As filed with the Securities and Exchange Commission on June 12, 2003
Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
Alteon Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State of Incorporation)
13-3304550
(I.R.S. Employer Identification No.)
170 Williams Drive
Ramsey, New Jersey 07446
(201) 934-5000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
Kenneth I. Moch
President and Chief Executive Officer
Alteon Inc.
170 Williams Drive
Ramsey, New Jersey 07647
(201) 934-5000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
------------------------
Copy to:
Marsha E. Novick, Esq.
Smith, Stratton, Wise, Heher & Brennan, LLP
600 College Road East
Princeton, New Jersey 08540
(609) 924-6000
------------------------
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 of the Securities
Act of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
Proposed Maximum Aggregate
Title of Shares to be Registered Offering Price (1) Amount of Registration Fee
-------------------------------- -------------------------- --------------------------
Common Stock,
$.01 par value $100,000,000 $8,090
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
ii
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JUNE 12, 2003
ALTEON INC.
COMMON STOCK
$100,000,000
This prospectus will allow us to issue our common stock from time to
time. This means we will provide a prospectus supplement each time we issue
securities; the prospectus supplement will inform you about the specific terms
of that offering and also may add, update or change information contained in
this document. You should read this document and any prospectus supplement
carefully before you invest.
Our common stock is traded on The American Stock Exchange under the
symbol "ALT." On June 10, 2003, the last reported sale price of the common stock
was $4.97 per share.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is June 12, 2003
TABLE OF CONTENTS
Page
----
The Company................................................................................................... 3
Risk Factors.................................................................................................. 4
Forward-Looking Statements.................................................................................... 11
Use of Proceeds............................................................................................... 11
Plan of Distribution.......................................................................................... 12
Dividend Policy............................................................................................... 12
Legal Matters................................................................................................. 12
Experts....................................................................................................... 12
Where You Can Find More Information........................................................................... 12
Incorporation of Certain Documents by Reference............................................................... 13
2
ALTEON INC.
We are a product-based biopharmaceutical company primarily engaged in
the discovery and development of oral drugs to reverse or slow down diseases of
aging and complications of diabetes. Our product candidates represent novel
approaches to some of the largest pharmaceutical markets. Our lead compound is
in Phase 2b clinical development; several others are in earlier development
stages. These pharmaceutical candidates were developed as a result of our
research on the Advanced Glycation End-Products, or A.G.E. pathway, a
fundamental pathological process and inevitable consequence of aging that causes
or contributes to many medical disorders, including cardiovascular, kidney and
eye diseases.
A.G.E.s are glucose/protein complexes that form as a result of
circulating blood glucose reacting with proteins. These A.G.E. complexes
subsequently interact and bond (crosslink) with other proteins, resulting in
"hardened" (stiffened) arteries, toughened tissues and impaired flexibility and
function of many body organs. In healthy individuals, this pathological
A.G.E.-formation process occurs slowly as the body ages. In diabetic patients,
the rate of A.G.E. accumulation and the extent of protein crosslinking are
accelerated because of high glucose levels.
Our current research and drug development activities targeting the
A.G.E. pathway take three directions: the breaking of A.G.E. crosslinks between
proteins in order to reverse damage ("A.G.E. Crosslink Breakers"); the
prevention or inhibition of A.G.E. formation ("A.G.E.-Formation Inhibitors") and
the reduction of the A.G.E. burden through a novel class of anti-hyperglycemic
agents, Glucose Lowering Agents ("GLA"). We believe that we were the first
company to focus on the development of compounds to treat diseases caused by
A.G.E. formation and crosslinking. Since our inception, we have created an
extensive library of novel compounds targeting the A.G.E. pathway, and have
actively pursued patent protection for these discoveries. We have 99 issued
United States patents and over 80 issued foreign patents focused primarily on
A.G.E. technology.
ALT-711 is an A.G.E. Crosslink Breaker and our lead product candidate.
ALT-711 offers the possibility of the first therapeutic approach to "breaking"
A.G.E. crosslinks, the benefit of which may be to reverse tissue damage caused
by aging and diabetes, thereby restoring flexibility and function to blood
vessels and organs of the body. We are initially developing ALT-711 for the
treatment of cardiovascular diseases, and have completed two Phase 2a safety,
efficacy and pharmacology studies. Results from the Phase 2a DIAMOND
(Distensibility Improvement And ReMOdeliNg in Diastolic Heart Failure) clinical
trial evaluating the activity of ALT-711 in diastolic heart failure ("DHF")
patients demonstrated that patients who received ALT-711 for 16 weeks
experienced a statistically significant reduction in left ventricular mass, a
marked improvement in left ventricular diastolic filling and statistically
significant improvements in multiple quality-of-life measurements. In 2001, we
conducted a Phase 2a clinical trial, in which 93 patients received ALT-711 or
placebo tablets once daily for eight weeks. Study results showed that ALT-711
patients experienced a statistically significant and clinically meaningful
reduction in pulse pressure), defined as the difference between systolic and
diastolic blood pressures. Results also showed a statistically significant
increase in large artery compliance, an indicator of greater vascular
flexibility and volume capacity. Additionally, the drug was well tolerated. This
Phase 2a data was published as "breakthrough information" in the September 26,
2001 issue of the peer-reviewed journal, Circulation: Journal of the American
Heart Association.
The positive results from the Phase 2a trials suggest that ALT-711 may
be a novel therapy for a number of cardiovascular conditions, including systolic
hypertension and diastolic heart failure, two diseases that occur as a result of
vascular stiffening due to age or diabetes.
We have initiated two companion Phase 2b clinical trials, the SAPPHIRE
(Systolic And Pulse Pressure Hemodynamic Improvement by Restoring Elasticity)
trial focused on patients with systolic hypertension and the SILVER (Systolic
Hypertension Interaction with Left VEntricular Remodeling) trial in patients
with systolic hypertension and left ventricular hypertrophy. Data from these
trials is expected to be reported concurrently about mid-year 2003. We are also
considering further clinical development of ALT-711 for DHF and other related
conditions.
We continue to explore the use of topical A.G.E. Crosslink Breakers in
skin and photo aging, as a result of our recent evaluation of ALT-744's positive
activity in this area. We are focusing efforts on bringing forward other
3
crosslink breaker compounds with more attractive formulation characteristics
than those of ALT-744 to address the pharmaceutical market for skin and photo
aging, and will discontinue research on the ALT-744 prototype.
We are also actively evaluating product development opportunities from
other classes of compounds in our patent estate, including A.G.E.-Formation
Inhibitors which target the A.G.E. pathway by inhibiting the formation and
crosslinking of A.G.E.s. In addition, we are utilizing our technical expertise
in the field of diabetes to develop compounds focused on glucose regulation and
control, our GLA compounds. We are evaluating our lead compounds in these
classes to determine the optimal strategy for pre-clinical development.
We were incorporated in Delaware in October 1986 under the name
Geritech Inc. Our name was changed to Alteon Inc. in August 1991. We are
headquartered at 170 Williams Drive, Ramsey, New Jersey 07446. Our web address
is www.alteon.com, and our telephone number is (201) 934-5000.
RISK FACTORS
RISKS RELATING TO OUR BUSINESS
IF WE DO NOT OBTAIN SUFFICIENT ADDITIONAL FUNDING TO MEET OUR NEEDS, WE MAY HAVE
TO CURTAIL OR DISCONTINUE THE RESEARCH, PRODUCT DEVELOPMENT, PRE-CLINICAL
TESTING AND CLINICAL TRIALS OF SOME OR ALL OF OUR PRODUCT CANDIDATES.
As of March 31, 2003, we had working capital of $17,384,271, including
$20,494,478 of cash and cash equivalents and short-term investments. During
March 2003, we sold 2,300,000 shares of common stock, raising net proceeds of
$7,655,500. Our cash used in operations for the three months ended March 31,
2003 was $4,561,785, and for the year ended December 31, 2002 was $14,931,030.
We anticipate that at our current spending level, our existing available cash
and cash equivalents and short-term investments will be adequate to satisfy our
working capital requirements for our current operations through the first
quarter of 2004. As a result, throughout the next 12 months, we will monitor our
liquidity position and status of our clinical trials. Depending upon the results
of any attempts made by us to raise additional funds through the sale of
additional equity securities, we may be required to significantly reduce or
curtail our research and product development activities and other operations if
our cash and cash equivalents fall below pre-determined levels. We have the
intent and ability to quickly and significantly reduce the cash burn rate, as we
have limited fixed commitments. Following completion of the SAPPHIRE and SILVER
trials, we will require substantial new funding to pursue development of ALT-711
and continue our operations.
We will require, over the long-term, substantial new funding to pursue
development and commercialization of ALT-711 and our other product candidates
and continue our operations. We believe that satisfying these capital
requirements over the long-term will require successful commercialization of our
product candidates. However, it is uncertain whether or not any products will be
approved or will be commercially successful. The amount of our future capital
requirements will depend on numerous factors, including the progress of our
research and development programs, the conduct of pre-clinical tests and
clinical trials, the development of regulatory submissions, the costs associated
with protecting patents and other proprietary rights, the development of
marketing and sales capabilities and the availability of third-party funding.
Because of our short-term and long-term capital requirements, we may
seek access to the public or private equity markets. This may have the effect of
materially diluting the current holders of our outstanding stock. We may also
seek additional funding through corporate collaborations and other financing
vehicles, potentially including off-balance sheet financing through limited
partnerships or corporations. There can be no assurance that such funding will
be available at all or on terms acceptable to us. If we obtain funds through
arrangements with collaborative partners or others, we may be required to
relinquish rights to certain of our technologies or product candidates.
4
IF WE DO NOT SUCCESSFULLY DEVELOP ANY PRODUCTS, WE MAY NOT DERIVE ANY REVENUES.
We have not yet requested or received regulatory approval for any
product from the United States Food and Drug Administration ("FDA") or any other
regulatory body. All of our product candidates are still in research or clinical
development. We may not succeed in the development and marketing of any
therapeutic or diagnostic product. To achieve profitable operations, we must,
alone or with others, successfully identify, develop, introduce and market
proprietary products. Such products will require significant additional
investment, development and pre-clinical and clinical testing prior to potential
regulatory approval and commercialization.
The development of new pharmaceutical products is highly uncertain and
subject to a number of significant risks. Potential products that appear to be
promising at early stages of development may not reach the market for a number
of reasons. Potential products may be found ineffective or cause harmful side
effects during pre-clinical testing or clinical trials, fail to receive
necessary regulatory approvals, be difficult to manufacture on a large scale, be
uneconomical, fail to achieve market acceptance or be precluded from
commercialization by proprietary rights of third parties. We may not be able to
undertake additional clinical trials. In addition, our product development
efforts may not be successfully completed, we may not obtain regulatory
approvals and our products, if introduced, may not be successfully marketed or
achieve customer acceptance. We do not expect any of our products, including
ALT-711, to be commercially available for a number of years, if at all.
CLINICAL TRIALS REQUIRED FOR OUR PRODUCT CANDIDATES ARE EXPENSIVE AND
TIME-CONSUMING, AND THEIR OUTCOME IS UNCERTAIN.
Before obtaining regulatory approvals for the commercial sale of any of
our products under development, we must demonstrate through pre-clinical studies
and clinical trials that the product is safe and effective for use in each
target indication. The length of time necessary to complete clinical trials
varies significantly and may be difficult to predict. Factors which can cause
delay or termination of our clinical trials include: (i) slower than expected
patient enrollment due to the nature of the protocol, the proximity of patients
to clinical sites, the eligibility criteria for the study, competition with
clinical trials for other drug candidates or other factors; (ii) lower than
expected retention rates of patients in a clinical trial; (iii) inadequately
trained or insufficient personnel at the study site to assist in overseeing and
monitoring clinical trials; (iv) delays in approvals from a study site's review
board; (v) longer treatment time required to demonstrate effectiveness or
determine the appropriate product dose; (vi) lack of sufficient supplies of the
product candidate; (vii) adverse medical events or side effects in treated
patients; (viii) lack of effectiveness of the product candidate being tested and
(ix) regulatory changes.
Even if we obtain positive results from pre-clinical or clinical trials
for a particular product, we may not achieve the same success in future trials
of that product. In addition, some or all of the clinical trials we undertake
may not demonstrate sufficient safety and efficacy to obtain the requisite
regulatory approvals, which could prevent the creation of marketable products.
Our product development costs will increase if we have delays in testing or
approvals, if we need to perform more or larger clinical trials than planned or
if our trials are not successful. Delays in our clinical trials may harm our
financial results and the commercial prospects for our products.
IF WE ARE UNABLE TO DERIVE REVENUES FROM PRODUCT SALES, WE MAY NEVER BE
PROFITABLE.
All of our revenues to date have been generated from collaborative
research agreements and financing activities, or interest income earned on these
funds. We have not received any revenues from product sales. We may not realize
product revenues on a timely basis, if at all.
At March 31, 2003, we had an accumulated deficit of $175,504,109. We
anticipate that we will incur substantial, potentially greater, losses in the
future. Our products under development may not be successfully developed and our
products, if successfully developed, may not generate revenues sufficient to
enable us to earn a profit. We expect to incur substantial additional operating
expenses over the next several years as our research, development and clinical
trial activities increase. We do not expect to generate revenues from the sale
of products, if any, for a number of years. Our ability to achieve profitability
depends, in part, on our ability to enter into agreements for product
development, obtain regulatory approval for our products and develop the
capacity, or enter into agreements, for the manufacture, marketing and sale of
any products. We may not obtain required regulatory
5
approvals, or successfully develop, manufacture, commercialize and market
product candidates, and we may never achieve product revenues or profitability.
PRIOR STOCK OPTION REPRICING MAY HAVE AN ADVERSE EFFECT ON OUR FUTURE FINANCIAL
PERFORMANCE.
Based on the performance of our stock, we repriced certain employee
stock options on February 2, 1999, in order to bolster employee retention. As a
result of this repricing, options to purchase 1.06 million shares of stock were
repriced and certain vesting periods related to these options were modified or
extended. This repricing may have a material adverse impact on future financial
performance based on the Financial Accounting Standards Board Interpretation
No. 44, "Accounting for Certain Transactions Involving Stock Compensation, An
Interpretation of APB Opinion No. 25." This interpretation requires us to
record compensation expense or benefit, which is adjusted every quarter, for
increases or decreases in the fair value of the repriced options based on
changes in our stock price from the value at July 1, 2000, until the repriced
options are exercised, forfeited or expire. The options expire at various dates
through January 2008.
IF WE ARE UNABLE TO FORM THE COLLABORATIVE RELATIONSHIPS THAT OUR BUSINESS
STRATEGY REQUIRES, THEN OUR PROGRAMS WILL SUFFER AND WE MAY NOT BE ABLE TO
DEVELOP PRODUCTS.
Our strategy for developing and deriving revenues from our products
depends, in large part, upon entering into arrangements with research
collaborators, corporate partners and others. We are seeking to establish these
relationships to provide the funding necessary for continuation of our product
development, but if such efforts are not successful, our programs may suffer and
we may be unable to develop products.
IF WE ARE ABLE TO FORM OUR COLLABORATIVE RELATIONSHIPS, BUT ARE UNABLE TO
MAINTAIN THEM, OUR PRODUCT DEVELOPMENT MAY BE DELAYED AND DISPUTES OVER RIGHTS
TO TECHNOLOGY MAY RESULT.
We may form collaborative relationships that will, in some cases, make
us dependent upon outside partners to conduct pre-clinical testing and clinical
trials and to provide adequate funding for our development programs. Such
corporate partners, if any, may have all or a significant portion of the
development and regulatory approval responsibilities. Failure of the corporate
partners to develop marketable products or to gain the appropriate regulatory
approvals on a timely basis, if at all, would have a material adverse effect on
our business, financial condition and results of operations.
In most cases, we will not be able to control the amount and timing of
resources that our corporate partners devote to our programs or potential
products. If any of our corporate partners breached or terminated its agreement
with us or otherwise failed to conduct its collaborative activities in a timely
manner, the pre-clinical or clinical development or commercialization of product
candidates or research programs could be delayed, and we would be required to
devote additional resources to product development and commercialization or
terminate certain development programs.
Disputes may arise in the future with respect to the ownership of
rights to any technology we develop with third parties. These and other possible
disagreements between us and collaborators could lead to delays in the
collaborative research, development or commercialization of product candidates,
or could require or result in litigation or arbitration, which would be
time-consuming and expensive and would have a material adverse effect on our
business, financial condition, results of operations and liquidity.
Any corporate partners we have may develop, either alone or with
others, products that compete with the development and marketing of our
products. Competing products, either developed by the corporate partners or to
which the corporate partners have rights, may result in their withdrawal of
support with respect to all or a portion of our technology, which would have a
material adverse effect on our business, financial condition, results of
operations and liquidity.
6
IF WE CANNOT SUCCESSFULLY DEVELOP A MARKETING AND SALES FORCE OR MAINTAIN
SUITABLE ARRANGEMENTS WITH THIRD PARTIES TO MARKET AND SELL OUR PRODUCTS, OUR
ABILITY TO DELIVER PRODUCTS MAY BE IMPAIRED.
We currently have no experience in marketing or selling pharmaceutical
products. In order to achieve commercial success for any approved product, we
must either develop a marketing and sales force or, where appropriate or
permissible, enter into arrangements with third parties to market and sell our
products. We might not be successful in developing marketing and sales
capabilities. Further, we may not be able to enter into marketing and sales
agreements with others on acceptable terms, and any such arrangements, if
entered into, may be terminated. If we develop our own marketing and sales
capability, it will compete with other companies that currently have
experienced, well funded and larger marketing and sales operations. To the
extent that we enter into co-promotion or other sales and marketing arrangements
with other companies, revenues will depend on the efforts of others, which may
not be successful.
IF WE CANNOT SUCCESSFULLY FORM AND MAINTAIN SUITABLE ARRANGEMENTS WITH THIRD
PARTIES FOR THE MANUFACTURING OF THE PRODUCTS WE MAY DEVELOP, OUR ABILITY TO
DEVELOP OR DELIVER PRODUCTS MAY BE IMPAIRED.
We have no experience in manufacturing products for commercial purposes
and do not have manufacturing facilities. Consequently, we are dependent on
contract manufacturers for the production of products for development and
commercial purposes. The manufacture of our products for clinical trials and
commercial purposes is subject to current Good Manufacturing Practice ("cGMP")
regulations promulgated by the FDA. In the event that we are unable to obtain or
retain third-party manufacturing for our products, we will not be able to
commercialize such products as planned. We may not be able to enter into
agreements for the manufacture of future products with manufacturers whose
facilities and procedures comply with cGMP and other regulatory requirements.
Our current dependence upon others for the manufacture of our products may
adversely affect our profit margin, if any, on the sale of future products and
our ability to develop and deliver such products on a timely and competitive
basis.
IF WE ARE NOT ABLE TO PROTECT THE PROPRIETARY RIGHTS THAT ARE CRITICAL TO OUR
SUCCESS, THE DEVELOPMENT AND ANY POSSIBLE SALES OF OUR PRODUCT CANDIDATES COULD
SUFFER AND COMPETITORS COULD FORCE OUR PRODUCTS COMPLETELY OUT OF THE MARKET.
Our success will depend on our ability to obtain patent protection for
our products, preserve our trade secrets, prevent third parties from infringing
upon our proprietary rights and operate without infringing upon the proprietary
rights of others, both in the United States and abroad.
The degree of patent protection afforded to pharmaceutical inventions
is uncertain and our potential products are subject to this uncertainty.
Competitors may develop competitive products outside the protection that may be
afforded by the claims of our patents. We are aware that other parties have been
issued patents and have filed patent applications in the United States and
foreign countries with respect to other agents that have an effect on A.G.E.s.
or the formation of A.G.E. crosslinks. In addition, although we have several
patent applications pending to protect proprietary technology and potential
products, these patents may not be issued, and the claims of any patents, which
do issue, may not provide significant protection of our technology or products.
In addition, we may not enjoy any patent protection beyond the expiration dates
of our currently issued patents.
We also rely upon unpatented trade secrets and improvements, unpatented
know-how and continuing technological innovation to maintain, develop and expand
our competitive position, which we seek to protect, in part, by confidentiality
agreements with our corporate partners, collaborators, employees and
consultants. We also have invention or patent assignment agreements with our
employees and certain, but not all, corporate partners and consultants. Relevant
inventions may be developed by a person not bound by an invention assignment
agreement. Binding agreements may be breached, and we may not have adequate
remedies for such breach. In addition, our trade secrets may become known to or
be independently discovered by competitors.
7
IF WE FAIL TO OBTAIN REGULATORY APPROVALS FOR OUR PRODUCTS, THE COMMERCIAL USE
OF OUR PRODUCTS WILL BE LIMITED.
Our research, pre-clinical testing and clinical trials of our product
candidates are, and the manufacturing and marketing of our products will be,
subject to extensive and rigorous regulation by numerous governmental
authorities in the United States and in other countries where we intend to test
and market our product candidates.
Prior to marketing, any product we develop must undergo an extensive
regulatory approval process. This regulatory process, which includes
pre-clinical testing and clinical trials and may include post-marketing
surveillance of each compound to establish its safety and efficacy, can take
many years and can require the expenditure of substantial resources. Data
obtained from pre-clinical and clinical activities is susceptible to varying
interpretations that could delay, limit or prevent regulatory approval. In
addition, we may encounter delays or rejections based upon changes in FDA policy
for drug approval during the period of product development and FDA regulatory
review of each submitted new drug application ("NDA"). We may encounter similar
delays in foreign countries. We may not obtain regulatory approval for the drugs
we develop. Moreover, regulatory approval may entail limitations on the
indicated uses of the drug. Further, even if we obtain regulatory approval, a
marketed drug and its manufacturer are subject to continuing review and
discovery of previously unknown problems with a product or manufacturer which
may have adverse effects on our business, financial condition and results of
operations, including withdrawal of the product from the market. Violations of
regulatory requirements at any stage, including pre-clinical testing, clinical
trials, the approval process or post-approval, may result in various adverse
consequences, including the FDA's delay in approving, or its refusal to approve
a product, withdrawal of an approved product from the market and the imposition
of criminal penalties against the manufacturer and NDA holder. None of our
products has been approved for commercialization in the United States or
elsewhere. We may not be able to obtain FDA approval for any products. Failure
to obtain requisite governmental approvals or failure to obtain approvals of the
scope requested will delay or preclude our licensees or marketing partners from
marketing our products or limit the commercial use of such products and will
have a material adverse effect on our business, financial condition, results of
operations and liquidity.
IF WE ARE NOT ABLE TO COMPETE SUCCESSFULLY WITH OTHER COMPANIES IN THE
DEVELOPMENT AND MARKETING OF CURES AND THERAPIES FOR CARDIOVASCULAR DISEASES,
DIABETES AND THE OTHER CONDITIONS FOR WHICH WE SEEK TO DEVELOP PRODUCTS, WE MAY
NOT BE ABLE TO CONTINUE OUR OPERATIONS.
We are engaged in pharmaceutical fields characterized by extensive
research efforts and rapid technological progress. Many established
pharmaceutical and biotechnology companies with resources greater than ours are
attempting to develop products that would be competitive with our products.
Other companies may succeed in developing products that are safer, more
efficacious or less costly than any we may develop and may also be more
successful than us in production and marketing. Rapid technological development
by others may result in our products becoming obsolete before we recover a
significant portion of the research, development or commercialization expenses
incurred with respect to those products.
Certain technologies under development by other pharmaceutical
companies could result in better treatments for cardiovascular disease, or
diabetes and its related complications. Several large companies have initiated
or expanded research, development and licensing efforts to build pharmaceutical
franchises focusing on these medical conditions. It is possible that one or more
of these initiatives may reduce or eliminate the market for some of our
products. In addition, other companies have initiated research in the inhibition
or crosslink breaking of A.G.E.s.
IF GOVERNMENTS AND THIRD-PARTY PAYERS CONTINUE THEIR EFFORTS TO CONTAIN OR
DECREASE THE COSTS OF HEALTHCARE, WE MAY NOT BE ABLE TO COMMERCIALIZE OUR
PRODUCTS SUCCESSFULLY.
In certain foreign markets, pricing and/or profitability of
prescription pharmaceuticals are subject to government control. In the United
States, we expect that there will continue to be federal and state initiatives
to control and/or reduce pharmaceutical expenditures. In addition, increasing
emphasis on managed care in the United States will continue to put pressure on
pharmaceutical pricing. Cost control initiatives could decrease the price that
we receive for any products we may develop and sell in the future and have a
material adverse effect on our business, financial condition and results of
operations. Further, to the extent that cost control initiatives have a
8
material adverse effect on our corporate partners, our ability to commercialize
our products may be adversely affected.
Our ability to commercialize pharmaceutical products may depend, in
part, on the extent to which reimbursement for the products will be available
from government health administration authorities, private health insurers and
other third-party payers. Significant uncertainty exists as to the reimbursement
status of newly approved healthcare products, and third-party payers, including
Medicare, are increasingly challenging the prices charged for medical products
and services. Third-party insurance coverage may not be available to patients
for any products developed by us. Government and other third-party payers are
attempting to contain healthcare costs by limiting both coverage and the level
of reimbursement for new therapeutic products and by refusing in some cases to
provide coverage for uses of approved products for disease indications for which
the FDA has not granted labeling approval. If adequate coverage and
reimbursement levels are not provided by government and other third-party payers
for our products, the market acceptance of these products would be adversely
affected.
IF THE USERS OF THE PRODUCTS WE DEVELOP CLAIM THAT OUR PRODUCTS HAVE HARMED
THEM, WE MAY BE SUBJECT TO COSTLY AND DAMAGING PRODUCT LIABILITY LITIGATION,
WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS.
The use of any of our potential products in clinical trials and the
sale of any approved products, including the testing and commercialization of
ALT-711 or other compounds, exposes us to liability claims resulting from the
use of products or product candidates. A claim, which was subsequently settled,
was made by a participant in one of our clinical trials, and additional claims
might be made directly by other such participants, consumers, pharmaceutical
companies or others. We maintain product liability insurance coverage for claims
arising from the use of our products in clinical trials. However, coverage is
becoming increasingly expensive, and we may not be able to maintain or acquire
insurance at a reasonable cost or in sufficient amounts to protect us against
losses due to liability that could have a material adverse effect on our
business, financial conditions and results of operations. We may not be able to
obtain commercially reasonable product liability insurance for any product
approved for marketing in the future and insurance coverage and our resources
may not be sufficient to satisfy any liability resulting from product liability
claims. A successful product liability claim or series of claims brought against
us could have a material adverse effect on our business, financial condition,
results of operations and liquidity.
IF WE ARE UNABLE TO ATTRACT AND RETAIN THE KEY PERSONNEL ON WHOM OUR SUCCESS
DEPENDS, OUR PRODUCT DEVELOPMENT, MARKETING AND COMMERCIALIZATION PLANS COULD
SUFFER.
We are highly dependent on the principal members of our management and
scientific staff. The loss of services of any of these personnel could impede
the achievement of our development objectives. Furthermore, recruiting and
retaining qualified scientific personnel to perform research and development
work in the future will also be critical to our success. We may not be able to
attract and retain personnel on acceptable terms given the competition between
pharmaceutical and healthcare companies, universities and non-profit research
institutions for experienced scientists. In addition, we rely on consultants to
assist us in formulating our research and development strategy. All of our
consultants are employed outside of us and may have commitments to or consulting
or advisory contracts with other entities that may limit their availability to
us.
OUR OPERATIONS INVOLVE A RISK OF INJURY OR DAMAGE FROM HAZARDOUS MATERIALS, AND
IF AN ACCIDENT WERE TO OCCUR, WE COULD BE SUBJECT TO COSTLY AND DAMAGING
LIABILITY CLAIMS, WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Our research and development activities involve the controlled use of
hazardous materials and chemicals. Although we believe that our safety
procedures for handling and disposing of hazardous materials comply with the
standards prescribed by state and federal regulations, the risk of accidental
contamination or injury from these materials cannot be completely eliminated. In
the event of an accident, we could be held liable for any damages or fines that
result. Such liability could have a material adverse effect on our business,
financial condition, results of operations and liquidity.
9
RISKS RELATED TO THIS OFFERING
THE COMMON STOCK BEING OFFERED BY THIS PROSPECTUS RANKS JUNIOR TO OUR
OUTSTANDING SHARES OF PREFERRED STOCK.
In addition to our authorized but unissued shares of preferred stock,
we have outstanding 1,101.83 shares of Series G and 3,308.87 shares of Series H
Convertible Preferred Stock. In the event of a liquidation, dissolution or
winding-up of our company, the holders of these shares of preferred stock will
have the right to receive distributions of our assets prior to distributions to
the holders of our common stock. This right could adversely affect the voting
power of common stockholders; make it more difficult for a third party to gain
control of us; discourage bids for our common stock at a premium; or otherwise
adversely affect the market price of the common stock.
THE CONVERSION OF OUR SERIES G AND SERIES H PREFERRED STOCK MAY ADVERSELY AFFECT
OUR STOCKHOLDERS.
The exact number of shares of common stock issuable upon conversion of
our Series G and Series H Preferred Stock will vary inversely with the market
price of the common stock. The holders of common stock may be materially diluted
by conversion of the Series G and Series H Preferred Stock depending on the
future market price of the common stock. The conversion price of the Series G
and Series H Preferred Stock depends on the average price of the common stock on
the American Stock Exchange for the twenty (20) business days immediately
preceding the conversion. On June 1, 2003, the conversion price was $4.54. If
this price were used to determine the number of shares of common stock issuable
upon conversion of the Series G and Series H Preferred Stock, we would issue a
total of approximately 9,715,198 shares of common stock if all shares of the
Series G and Series H Preferred Stock were converted on such date. To the extent
the average price of the common stock during the 20 business days immediately
preceding any date on which shares of the Series G and Series H Preferred Stock
are converted is higher or lower than $4.54, we would issue more or fewer shares
of common stock than reflected in this estimate, and this difference could be
material.
The number of shares of common stock to be issued upon conversion of
the Series G and Series H Preferred Stock will also depend on the number of
shares of Series G and Series H Preferred Stock issued as dividends on the
Series G and Series H Preferred Stock.
THERE MAY BE RISKS RELATED TO HAVING USED ARTHUR ANDERSEN AS OUR INDEPENDENT
AUDITOR.
Until May 30, 2002, Arthur Andersen, LLP served as our independent
auditors. Arthur Andersen is not able to consent to the use of its report on the
2001 and earlier financial statements and will not be in a position to perform
any post-audit review procedures. Should an event have occurred between the date
of Arthur Andersen's report and the date of this prospectus that could serve to
make inaccurate the statement in Arthur Andersen's report that our financial
statements present fairly, in all material respects, the financial position,
results of operations and cash flows for the periods covered by such financial
statements, in conformity with accounting principles generally accepted in the
United States, an investor might be precluded from bringing a claim against
Arthur Andersen.
FUTURE SALES BY OUR CURRENT STOCKHOLDERS MAY ADVERSELY AFFECT OUR STOCK PRICE.
As of June 1, 2003, 35,910,841 shares of our common stock, 1,101.83
shares of Series G Preferred Stock and 3,308.87 shares of Series H Preferred
Stock were issued and outstanding. In addition, options to purchase 5,519,404
shares of common stock and warrants to purchase 1,193,636 shares of common stock
were outstanding. The sale of common stock issued upon the exercise of stock
options, the exercise of warrants, and the conversion of Series G and Series H
Preferred Stock, as well as future sales of common stock by us or by existing
stockholders, or the perception that sales could occur, could adversely affect
the market price of the common stock.
FUTURE SALES OF COMMON STOCK MAY DILUTE OUR STOCKHOLDERS.
We may sell the common stock covered by this prospectus in one or more
transactions at prices and in a manner we determine from time to time. If we
sell the common stock in more than one transaction, stockholders who purchase
stock covered by this prospectus may be materially diluted by subsequent sales
that are also covered
10
by this prospectus. In addition, we may sell common stock from time to time in
the future in transactions not covered by this prospectus. Such sales may also
result in material dilution to our stockholders.
THE PRICE OF OUR COMMON STOCK IS VOLATILE AND THE MARKET VALUE OF YOUR
INVESTMENT MAY DECREASE.
The market prices for securities of biotechnology and pharmaceutical
companies, including ours, have historically been highly volatile, and the
market has from time to time experienced significant price and volume
fluctuations that are unrelated to the operating performance of particular
companies. Factors such as fluctuations in our operating results, announcement
of technological innovations or new therapeutic products by us or others,
clinical trial results, developments concerning agreements with collaborators,
governmental regulation, developments in patent or other proprietary rights,
public concern as to the safety of drugs developed by us or others, future sales
of substantial amounts of common stock by existing stockholders and general
market conditions can have an adverse effect on the market price of the common
stock. The realization of any of the risks described in these "Risk Factors"
could have a dramatic and adverse impact on the market price of the common
stock.
ANTI-TAKEOVER PROVISIONS COULD MAKE A THIRD-PARTY ACQUISITION OF US, WHICH MAY
BE BENEFICIAL TO OUR STOCKHOLDERS, MORE DIFFICULT.
Our Certificate of Incorporation provides for staggered terms for the
members of the Board of Directors and includes a provision (the "Fair Price
Provision") that requires the approval of the holders of 80 percent of our
voting stock as a condition to a merger or certain other business transactions
with, or proposed by, a holder of 10 percent or more of our voting stock, except
in cases where certain directors approve the transaction or certain minimum
price criteria and other procedural requirements are met. We have entered into a
Stockholders' Rights Agreement pursuant to which each holder of a share of
common stock is granted a Right to purchase our Series F Preferred Stock under
certain circumstances if a person or group acquires or commences a tender offer
for 20 percent of our outstanding common stock. We have also adopted a Change in
Control Severance Benefits Plan which provides for severance benefits to
employees upon certain events of termination of employment after or in
connection with a change in control as defined in the Plan. In addition, the
Board of Directors has the authority, without further action by the
stockholders, to fix the rights and preferences of, and issue shares of,
Preferred Stock. The staggered board terms, Fair Price Provision, Stockholders'
Rights Agreement, Change in Control Severance Benefits Plan, Preferred Stock
provision and other provisions of our charter and Delaware corporate law may
discourage certain types of transactions involving an actual or potential change
in control.
FORWARD-LOOKING STATEMENTS
Statements in this prospectus that are not statements or descriptions
of historical facts are "forward-looking" statements under Section 21E of the
Securities Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995 and are subject to numerous risks and
uncertainties. These forward-looking statements and other forward-looking
statements made by us or our representatives are based on a number of
assumptions. The words "believe," "expect," "anticipate," "intend," "estimate"
or other expressions, which are predictions of or indicate future events and
trends and which do not relate to historical matters identify forward-looking
statements. You are cautioned not to place undue reliance on these
forward-looking statements as they involve risks and uncertainties, and actual
results could differ materially from those currently anticipated due to a number
of factors, including those set forth above under Risk Factors and elsewhere in
this prospectus. The forward-looking statements represent our judgment and
expectations as of the date of this prospectus. We assume no obligation to
update any such forward-looking statements.
USE OF PROCEEDS
Each time we issue our common stock, we will provide a prospectus
supplement that will contain information about how we intend to use the net
proceeds from each offering.
Unless otherwise indicated in the applicable prospectus supplement, we
intend to use the net proceeds from the sale of our common stock for working
capital and general corporate purposes.
11
PLAN OF DISTRIBUTION
We may sell the common stock covered by this prospectus in one or more
transactions, including block transactions, at a fixed price or prices, which
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at prices determined on a negotiated
or competitive bid basis. We may sell the common stock to underwriters for
public offering, directly to investors, through agents designated from time to
time, or by such other means as may be specified in the supplement to this
prospectus. If we sell shares of the common stock to a broker-dealer acting as
principal, the broker-dealer may then resell such shares of common stock to the
public at varying prices to be determined by the broker-dealer at the time of
resale.
Participating agents or broker-dealers in the distribution of any of
the shares of common stock may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933, as amended. Any discount or commission received
by any underwriter and any participating agents or broker-dealers, and any
profit on the resale of shares of common stock purchased by any of them may be
deemed to be underwriting discounts or commissions under the Securities Act.
To the extent required, the number of shares of common stock to be
sold, information relating to the underwriters, the purchase price, the public
offering price, if applicable, the name of any underwriter, agent or
broker-dealer, and any applicable commissions, discounts or other items
constituting compensation to such underwriters, agents or broker-dealers with
respect to a particular offering will be set forth in a supplement to this
prospectus.
DIVIDEND POLICY
We have not paid any dividends since our inception and do not
anticipate paying any dividends in the foreseeable future.
LEGAL MATTERS
The validity of the issuance of the common stock being offered hereby
has been passed upon by Smith, Stratton, Wise, Heher & Brennan, LLP, Princeton,
New Jersey. A member of Smith, Stratton, Wise, Heher & Brennan, LLP owns 13,250
shares of our common stock.
EXPERTS
Our financial statements as of December 31, 2002, and for the year then
ended, have been incorporated by reference herein and in the registration
statement in reliance upon the report of KPMG LLP, independent accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is a part of a registration statement on Form S-3,
which we filed with the Securities and Exchange Commission ("SEC") under the
Securities Act. It omits some of the information set forth in the registration
statement. You can find additional information about us in the registration
statement. Copies of the registration statement are on file at the offices of
the SEC. You may obtain them by paying the prescribed fee, or you may examine
them without charge at the SEC's public reference facilities described below.
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and as required by the
Exchange Act, we file reports, proxy statements and other information with the
SEC. You may inspect these reports, proxy statements and other information
without charge and copy them at the Public Reference Room maintained by the SEC
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The information we file with the SEC is also available
through the SEC's Web Site (http://www.sec.gov) and our Web Site
(http://www.alteon.com).
12
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which we have filed with the SEC, are
incorporated herein by reference:
(a) Our Annual Report on Form 10-K for the fiscal year ended
December 31, 2002.
(b) Our Current Reports on Form 8-K, filed January 3, 2003 and
March 27, 2003.
(c) Our Quarterly Report on Form 10-Q for the quarter ended March
31, 2003.
(d) Our proxy statement for our Annual Meeting of Stockholders
held on June 4, 2003.
(e) The description of our common stock, $.01 par value, which is
contained in our Registration Statement on Form 8-A, filed November 1, 1991,
including any amendments or reports filed for the purpose of updating such
description.
(f) The description of our Rights to Purchase Series F Preferred
Stock, which is contained in our Registration Statement on Form 8-A, filed
August 4, 1995, including any amendments or reports filed for the purpose of
updating such description.
All documents, which we file under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and prior to termination
of the offering shall be deemed to be incorporated by reference herein and to be
a part of this prospectus from the date of the filing of such documents. Any
statement contained herein or in a document incorporated by reference or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that the statement is
modified or superseded by any other subsequently filed document which is
incorporated or is deemed to be incorporated by reference herein. Any statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this prospectus.
This prospectus incorporates documents by reference which are not
presented herein or delivered herewith. We will provide without charge to each
person, including any beneficial owner, to whom this prospectus is delivered, on
the written or oral request of such person, a copy of any or all of the
documents referred to above which have been or may be incorporated into this
prospectus and deemed to be a part of this prospectus, other than exhibits to
the documents unless such exhibits are specifically incorporated by reference in
the documents. These documents are available upon request from Elizabeth A.
O'Dell, Vice President, Finance, Alteon Inc., 170 Williams Drive, Ramsey, New
Jersey 07446, (201) 934-5000.
13
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemized estimate (other than the SEC
registration fee which is the actual, not estimated, fee) of fees and expenses
payable by the registrant in connection with the offering described in this
registration statement.
SEC registration fee ..................................................... $ 8,090
Legal fees and expenses .................................................. 5,000 (1)
Accounting fees .......................................................... 5,000 (1)
Miscellaneous expenses ................................................... 3,500 (1)
--------
Total .............................................................. $ 21,090
========
(1) Does not include expenses relating to offerings of particular
securities. Each prospectus supplement will reflect the estimated expenses
related to the offering of securities covered by such prospectus supplement.
All expenses of registration incurred in connection herewith are being
borne by Alteon.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of
Delaware empowers a corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect to any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all of the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
Section 145 further provides that to the extent a director or officer
of a corporation has been successful in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith; that the indemnification provided by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and that the scope of indemnification extends to directors, officers, employees,
or agents of a constituent corporation absorbed in a consolidation or merger and
persons serving in that capacity at the request of the constituent corporation
for another. Section 145 also empowers the corporation to purchase and maintain
insurance on behalf of a director or officer of the corporation against any
14
liability asserted against him or incurred by him in any such capacity or
arising out of his status as such whether or not the corporation would have the
power to indemnify him against such liabilities under Section 145.
Article IX of the registrant's bylaws specifies that the registrant
shall indemnify its directors and officers to the full extent permitted by the
General Corporation Law of Delaware. This provision of the bylaws is deemed to
be a contract between the registrant and each director and officer who serves in
such capacity at any time while such provision and the relevant provisions of
the General Corporation Law of Delaware are in effect, and any repeal or
modification thereof shall not offset any rights or obligations then existing
with respect to any state of facts then or theretofore existing or in any
action, suit or proceeding theretofore or thereafter brought or threatened in
whole or in part upon any such state of facts.
Section 102(b)(7) of the Delaware General Corporation Law enables a
corporation in its certificate of incorporation to limit the personal liability
of members of its board of directors for violation of a director's fiduciary
duty of care. This Section does not, however, limit the liability of a director
for breaching his duty of loyalty, failing to act in good faith, engaging in
intentional misconduct or knowingly violating a law, or from any transaction in
which the director derived an improper personal benefit. This Section also will
have no effect on claims arising under the federal securities laws. The
registrant's certificate of incorporation limits the liability of its directors
as authorized by Section 102(b)(7).
The registrant currently carries liability insurance for the benefit of
its directors and officers which provides coverage for losses of directors and
officers for liabilities arising out of claims against such persons acting as
directors or officers of the registrant (or any subsidiary thereof) due to any
breach of duty, neglect, error, misstatement, misleading statement, omission or
act done by such directors and officers, except as prohibited by law. The
liability limit, however, shall be reduced by amounts incurred for legal
defense, which amounts are to be applied against the retention amount. The
insurance policy also provides for the advancement of reasonable fees, costs and
expenses including attorneys' fees under certain circumstances, incurred by
directors and officers in investigating, adjusting, defending and appealing any
claim, subject to repayment by such director or officer if it is ultimately
determined that such insureds are not entitled under the terms of the policy to
payment of such loss.
The insurance policy will not provide coverage to the directors and
officers to the extent that the registrant has indemnified the directors or
officers. The policy provides for the reimbursement of the registrant to the
extent the registrant has indemnified the directors and officers pursuant to
law, contract or the certificate of incorporation or bylaws of the registrant.
Moreover, the policy does not provide coverage for any claim: (i) based upon, or
arising from, personal injury, slander, defamation or a similar matter, (ii)
based upon, or arising from the director or officer gaining, in fact, a personal
profit or advantage to which he or she was not legally entitled, (iii) based
upon, or arising from, any deliberately dishonest, malicious or fraudulent act
or omission or any willful violation of law by any Insured if a judgment or
other final adjudication adverse to the Insured established such an act,
omission or willful violation, (iv) brought or maintained by or on behalf of the
Insured Organization or any Insured Person, in any capacity, subject to certain
exceptions, including those related to stockholders' derivative actions, set
forth in the policy, (v) based upon, or arising from, environmental claims and
violations, (vi) based upon, or arising from, a violation of the Employee
Retirement Income Security Act of 1974, as amended, and (vii) arising from a
loss insured by any other valid or collectible insurance, except as such loss
may exceed the policy amount or other limitations of such other insurance.
At present, there is no pending litigation or proceeding involving a
director or officer of the registrant as to which indemnification is being
sought nor is the registrant aware of any threatened litigation that may result
in claims for indemnification by any director or officer.
ITEM 16. EXHIBITS.
The exhibits required to be filed are listed on the "Exhibit Index"
attached hereto, which is incorporated herein by reference.
15
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, represent 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 end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 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;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
(2) That for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event 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 Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
16
(2) For purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
17
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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Borough of Ramsey, State of New Jersey, on June 12, 2003.
ALTEON INC.
By: /s/ Kenneth I. Moch
-------------------------------------
Kenneth I. Moch
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Kenneth I. Moch and Elizabeth A. O'Dell,
and each or any one of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection with this registration statement, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitutes or substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Kenneth I. Moch Chairman of the Board, President June 12, 2003
------------------- and Chief Executive Officer
Kenneth I. Moch (principal executive officer)
/s/ Elizabeth A. O'Dell Vice President, Finance June 12, 2003
----------------------- Treasurer and Secretary
Elizabeth A. O'Dell (principal accounting officer)
/s/ Edwin D. Bransome, Jr., M.D. Director June 12, 2003
--------------------------------
Edwin D. Bransome, Jr., M.D.
/s/ Marilyn Breslow Director June 12, 2003
-------------------
Marilyn Breslow
/s/ Alan J. Dalby Director June 12, 2003
-----------------
Alan J. Dalby
/s/ David McCurdy Director June 12, 2003
-----------------
David McCurdy
/s/ Thomas A. Moore Director June 12, 2003
-------------------
Thomas A. Moore
/s/ George M. Naimark, Ph.D. Director June 12, 2003
----------------------------
George M. Naimark, Ph.D.
/s/ Mark Novitch, M.D. Director June 12, 2003
---------------------
Mark Novitch, M.D.
18
EXHIBIT INDEX
Exhibit
No. Description of Exhibit
------- ----------------------
4.1 Restated Certificate of Incorporation. (Incorporated by reference to Exhibit 3.1 to the Company's Report on Form
10-Q filed on November 10, 1999, S.E.C. file Number 000-19529.)
4.2 Certificate of the Voting Powers, Designations, Preference and Relative Participating, Optional and Other Special
Qualifications, Limitations or Restrictions of Series F Preferred Stock of the Company. (Incorporated by reference
to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, S.E.C. File
Number 001-16043.)
4.3 Certificate of Retirement of Stock of Alteon Inc. dated September 10, 1999. (Incorporated by reference to Exhibit
3.1 to the Company's Report on Form 10-Q filed on November 10, 1999, S.E.C. File Number 000-19529.)
4.4 Certificate of Designations of Series G Preferred Stock of Alteon Inc. (Incorporated by reference to Exhibit 3.4
to the Company's Annual Report on Form 10-K for the year ended December 31, 1997, S.E. C. File Number 000-19529.)
4.5 Certificate of Amendment of Certificate of Designations of Series G Preferred Stock of Alteon Inc. (Incorporated
by reference to Exhibit 3.4 of the Company's Report on Form 10-Q filed on August 14, 1998, S.E. C. File Number
000-19529.)
4.6 Certificate of Designations of Series H Preferred Stock of Alteon Inc. (Incorporated by reference to Exhibit 3.5
to the Company's Annual Report on Form 10-K for the year ended December 31, 1997, S.E. C. File Number 000-19529.).
4.7 Amended Certificate of Designations of Series H Preferred Stock of Alteon Inc. (Incorporated by reference to
Exhibit 3.6 to the Company's Report on Form 10-Q filed on August 14, 1998, S.E. C. File Number 000-19529.)
4.8 Certificate of Retirement of Stock of Alteon Inc. dated November 20, 2000. (Incorporated by reference to Exhibit
3.8 to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, S.E. C. File Number
001-16043.)
4.9 Certificate of Amendment to Restated Certificate of Incorporation of Alteon Inc. dated June 7, 2001. (Incorporated
by reference to Exhibit 3.8 to the Company's Report on Form 10-Q filed on August 14, 2001, S.E.C. File Number
001-16043.)
4.10 Stockholders' Rights Agreement dated as of July 27, 1995, between Alteon Inc. and Registrar and Transfer Company,
as Rights Agent. (Incorporated by reference to Exhibit 4.1 to the Company's Annual Report on Form 10-K for the
year ended December 31, 2000, S.E. C. File Number 001-16043.)
4.11 Amendment to Stockholders' Rights Agreement between Alteon Inc. and Registrar and Transfer Company, as Rights
Agent. (Incorporated by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K filed on May 9, 1997,
S.E. C. File Number 000-19529.)
4.12 Amendment to Stockholders' Rights Agreement between Alteon Inc. and Registrar and Transfer Company, as Rights
Agent. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on December 10,
1997, S.E.C. File Number 000-19529.)
4.13 Notice of Appointment, dated August 29, 2002, of The American Stock Transfer & Trust Company as successor Rights
Agent, pursuant to Stockholders' Rights Agreement dated as of July 27, 1995. (Incorporated by reference to Exhibit
4.4 of the Company's Report on Form 10-Q filed on November 13, 2002, S.E.C. File Number 001-16043.)
4.14 Bylaws, as amended. (Incorporated by reference to Exhibit 3.10 to the Company's Annual Report on Form 10-K for the
year ended December 31, 2002, S.E. C. File Number 001-16043.)
5.1 Opinion of Smith, Stratton, Wise, Heher & Brennan, LLP.
23.1 Consent of KPMG LLP, independent public accountants.
23.2 Consent of Smith, Stratton, Wise, Heher & Brennan, LLP. (Contained in Exhibit 5.1.)
24.1 Power of Attorney. (See "Power of Attorney" on signature page.)