Glory be! Looks like the conversions may be over -
Title of Shares to Proposed Maximum Proposed Amount of
be Registered Amount Aggregate Price Per Maximum Registration
Common Registered Share (1) Aggregate Fee (3)
stock, par 6,250,000 (2) $1.61 Offering $2003
value $.01 Price
per share $10,062,500
(1) Estimated solely for purposes of computing the registration fee
pursuant to Rule 457(c).
(2) Pursuant to Rule 416 under the Securities Act of 1933, any additional
shares of Common Stock issued as a result of the anti-dilution provisions
of the Certificate of Designation relating to the Preferred Stock pursuant
to which the Common Stock will be issued are deemed to be registeredherewith.
(3) Represents the sum of $1,884 originally paid in connection with the
registration of 6,000,000 shares pursuant to Rule 457(a) and $119 to
register 250,000 shares of the proposed maximum aggregate price per share.
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.
2<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 3, 1998
6,250,000 Shares
CYTOGEN CORPORATION
COMMON STOCK
This Prospectus relates to up to 6,250,000 shares of Common Stock, par
value $.01 per share (the "Common Stock"), of CYTOGEN Corporation
("CYTOGEN" or the "Company"), which have been registered for sale from time
to time by the selling stockholders named herein or their permitted
transferees or successors (the "Selling Stockholders"). Any or all of the
Common Stock being registered hereby may be sold from time to time to
purchasers directly by the Selling Stockholders. Alternatively, the Selling
Stockholders may from time to time offer the Common Stock through
underwriters, dealers or agents who may receive compensation in the form
of underwriting discounts, concessions or commissions from the Selling
Stockholders and/or the purchasers of Common Stock for whom they may act
as agent. To the extent required, the names of the Selling Stockholders,
the number of shares of Common Stock to be sold, purchase price, public
offering price, the name of any agent, dealer or underwriter and any
applicable commission or discount or other items constituting compensation
or indemnification arrangements with respect to a particular offering will
be set forth in an accompanying Prospectus Supplement. The Company will
receive no proceeds from sales by the Selling Stockholders of the Common
Stock offered hereby. The shares of Common Stock to which this Prospectus
relates are issuable to the Selling Stockholders from time to time upon
conversion of or as dividends on certain securities received in the Private
Placement (as defined herein). All Registration Expenses (as defined
herein) incurred in connection with the registration of the Common Stock
to which this Prospectus relates will be borne by the Company. The Company
has agreed to indemnify the Selling Stockholders against certain
liabilities, including certain liabilities under the Securities Act of
1933, as amended (the "Securities Act"), or to contribute to payments which
the Selling Stockholders may be required to make in respect thereof. See
"Plan of Distribution."
The Common Stock is traded on the Nasdaq National Market under the
symbol "CYTO." The last reported sale price of the Common Stock as reported
by the Nasdaq National Market on March 31, 1998 was $2.16 per share.
The Common Stock offered hereby involves a high degree of risk. See
"Risk Factors" beginning on page 5 for a discussion of certain factors that
should be considered by prospective investors.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------
>
SELLING STOCKHOLDERS
--------------------
The following table sets forth certain information regarding the
beneficial ownership of Common Stock by the Selling Stockholders as of
April 2, 1998, and the number of shares of Common Stock covered by this
Prospectus.<TABLE><CAPTION>
Number of Shares of Number of Shares of
Common Stock Beneficially Number of Shares of Common Stock Beneficially
Name and Address Owned Common Stock Offered Owned Following the
Stockholder Prior to the Offering (1) Hereby (2) Offering (3)
----------- ------------------------- ---------- ------------
# of Shares % of Class # of Shares % of Class
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Southbrook International Investments, Ltd. 2,499,767 4.36 2,566,237 4.47 0
c/o Trippoak Advisors, Inc.630 Fifth Avenue, Suite 2000New York, NY 10111
Westover Investments L.P. 914,579 1.60 927,873 1.62 0
777 Main Street, Suite 2750Fort Worth, TX 76102
Montrose Investments L.P. 1,371,869 2.39 1,391,810 2.42 0
777 Main Street, Suite 2750Fort Worth, TX 76102
Heracles Fund 438,076 .76 454,693 .79 0
Bank of Bermuda (Cayman) LimitedP.O. Box 5133rd Floor, British American Center
Dr. Roy's Drive Georgetown, Grand CaymanCayman Islands, BWI
Themis Partners, L.P. 438,076 .76 454,693 .79 0
c/o Promethean Investment Group L.L.C.40 West 57th Street, Suite 1520
New York, NY 10019
Brown Simpson Strategic Growth Fund, L.P. 175,230 .31 181,878 .32 0
152 West 57th Street, 40th Floor New York, NY 10019
Brown Simpson Strategic Growth Fund, Ltd. 262,845 .46 272,816 .47 0
152 West 57th Street, 40th FloorNew York, NY 10019
-----------------------------
18<PAGE>
(1) Includes (i) the number of shares of Common Stock issued or issuable
upon conversion of shares of the Company's Series B Convertible
Preferred Stock, assuming, with respect to unconverted shares,
conversion at the formula price in effect on April 2, 1998 (which
price will fluctuate from time to time based on changes in the market
price of the Common Stock and provisions in the formula for
determining the conversion price). The Series B Preferred Stock was
issued by the Company to the Selling Stockholders in December 1997 in
a transaction exempt from the registration requirements of the
Securities Act of 1933 pursuant to Regulation D thereunder (the
"Private Placement").
(2) In order to provide for (i) fluctuations in the market price of the
Common Stock, (ii) provisions in the formula for determining the
conversion price of the Series B Preferred Stock set forth in the
terms thereof (see "Description of Series B Convertible Preferred
Stock") and (iii) shares of Common Stock which may be issued in
payment of dividends on the Series B Preferred Stock, the aggregate
number of shares of Common Stock registered hereby exceeds the
aggregate number of such shares issuable upon conversion of shares of
the Series B Preferred Stock at the conversion price in effect on the
date hereof. For each Selling Stockholder, the number in this column
represents such Selling Stockholder's pro rata portion of the
aggregate number of shares of Common Stock registered hereby. No
Selling Stockholder may acquire more than 4.99% of the Common Stock
unless they give the Company at least 65 days notice of the waiver of
such restrictions.(3) Assumes sale of all shares offered hereby.
PLAN OF DISTRIBUTION
--------------------
The Selling Stockholders may, from time to time, sell all or a portion
of the shares of Common Stock (the "Shares") on the Nasdaq National Market,
in privately negotiated transactions or otherwise, at fixed prices that may
be changed, at market prices prevailing at the time of sale, at prices
related to such market prices or at negotiated prices. The Shares may be
sold by the Selling Stockholders by one or more of the following methods,
without limitation: (a) block trades in which the broker or dealer so
engaged will attempt to sell the Shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction,
(b) purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this Prospectus, (c) an exchange
distribution in accordance with the rules of such exchange, (d) ordinary
brokerage transactions and transactions in which the broker solicits
purchasers, (e) privately negotiated transactions, (f) short sales and (g)
a combination of any such methods of sale. In effecting sales, brokers and
dealers engaged by the Selling Stockholders may arrange for other brokers
or dealers to participate. Brokers or dealers may receive commissions or
discounts from the Selling Stockholders (or, if any such broker-dealer acts
as agent for the purchasers of such shares, from such purchaser) in amounts
to be negotiated which are not expected to exceed those customary in the
types of transactions involved. Broker-dealers may agree with the Selling
Stockholders to sell a specified number of such Shares at a stipulated
price per share, and, to the extent such broker-dealer is unable to do so
acting as agent for a Selling Stockholder, to purchase as principal any
unsold Shares at the price required to fulfill the broker-dealer commitment
to the Selling Stockholders. Broker-dealers who acquire Shares as
principal may thereafter resell such Shares from time to time in
transactions (which may involve block transactions and sales to and through
other broker-dealers, including transactions of the nature described above)
in the over-the-counter market or otherwise at prices and on terms then
prevailing at the time of sale, at prices related to the then-current
market price or in negotiated transactions and, in connection with such
resales, may pay to or receive from the purchasers of such Shares
commissions as described above. The Selling Stockholders may also sell the
Shares in accordance with Rule 144 under the Securities Act, rather than
pursuant to this Prospectus. 19<PAGE>
The Selling Stockholders and any broker-dealers or agents that
participate with the Selling Stockholders in sales of the Shares may be
deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales. In such event, any commissions received by
such broker-dealers or agents and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
From time to time the Selling Stockholders may engage in short sales,
short sales against the box, puts and calls and other transactions in
securities of the Company or derivatives thereof, and may sell and deliver
the Shares in connection therewith or in settlement of securities loans.
If the Selling Stockholders engage in such transactions, the Conversion
Price may be affected. From time to time the Selling Stockholders may
pledge their Shares pursuant to the margin provision of their respective
customer agreements with their brokers. Upon a default by the Selling
Stockholders, the broker may offer and sell the pledged Shares from timeto time.
The Company is required to pay all fees and expenses incident to the
registration of the Shares, including fees and disbursements (not to exceed
an aggregate of $10,000) of counsel to the Selling Stockholders. The
Company has agreed to indemnify the Selling Stockholders against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act. DESCRIPTION OF CAPITAL STOCK
----------------------------
As of the date of this Prospectus, the Company's authorized capital
stock consists of 89,600,000 shares of Common Stock, par value $0.01 per
share, and 5,400,000 shares of preferred stock, $0.01 per share. Pursuant
to the Certificates of Designation for the Series A Preferred Stock (as
defined below) and for the Series B Preferred Stock, 1,000 shares of Series
A Preferred Stock and 750 shares of Series B Preferred Stock, respectively,
have been authorized for issuance. The description below is a summary of
all material provisions of the Company's Common Stock and preferred stock.
Common Stock------------
The holders of Common Stock are entitled to one vote per share on all
matters voted on by the stockholders, including elections of directors.
Except as otherwise required by law or as provided in any resolutions
adopted by the Board with respect to the preferred stock of the Company,
the holders of shares of Common Stock will exclusively possess all voting
power. Subject to the preferential rights, if any, of holders of any then
outstanding preferred stock, the holders of Common Stock are entitled to
receive dividends when, as and if declared by the Board of Directors of the
Company out of funds legally available therefor. The terms of the Common
Stock do not grant to the holders thereof any preemptive, subscription,
redemption, conversion or sinking fund rights. Subject to the preferential
rights of holders of any then outstanding preferred stock, the holders of
Common Stock are entitled to share ratably in the assets of the Company
legally available for distribution to stockholders in the event of the
liquidation, dissolution or winding up of the Company.
As of February 27, 1998, 53,831,046 shares of Common Stock were issued
and outstanding, and 1,260,000 shares of Common Stock were reserved for
issuance upon the exercise of certain outstanding warrants and
approximately 6,230,102 shares were reserved for issuance pursuant to stock
option plans and Employee Stock Purchase Plans. The Company has issued to
Dow and Elan, warrants to purchase an aggregate of 1,260,000 shares of
Common Stock at prices ranging from $8.40 to $14.00 per share. In
connection with the Company's acquisition of an exclusive license from Dow,
CYTOGEN issued to Dow two warrants to purchase an aggregate of 260,000
shares of Common Stock at $12.50 per share. The remaining warrant is held
by Elan. See "Description of Capital Stock Preferred Stock" for a
description of the Elan warrant. 20<PAGE>
The Certificate of Incorporation and Bylaws of the Company contain
certain provisions which may have the effect of delaying, deferring, or
preventing a change of control of the Company. See "Risk Factors Anti-takeover
Considerations". In addition, the Board generally has the authority, without
further action by stockholders, to fix the relative powers, preferences,
and rights of the unissued shares of preferred stock of the Company.
Provisions which could discourage an unsolicited tender offer or takeover
proposal, such as extraordinary voting, dividend, redemption, or conversion
rights, could be included in such preferred stock. For a description of
certain rights which may also affect a change-in-control transaction, see
"Description of Capital Stock Preferred Stock."Preferred Stock---------------
Pursuant to the Certificate of Incorporation, the Company has the
authority to issue up to 5,400,000 shares of preferred stock, $0.01 par
value per share, in one or more series as determined by the Board of
Directors of the Company. The Board of Directors of the Company may,
without further action by the stockholders of the Company, issue one or
more series of preferred stock and fix the rights and preferences of such
shares, including the dividend rights, dividend rates, conversion rights,
exchange rights, voting rights, terms of redemption, redemption price or
prices, liquidation preferences and the number of shares constituting any
series or the designation of such series. Shares of any series of
preferred stock of the Company may be represented by depositary shares
evidenced by depositary receipts, each representing a fractional interest
in a share of preferred stock of such series and deposited with a
depository. The use of this mechanism could increase the number of
interests in preferred stock issued by the Company. The rights of the
holders of Common Stock will be subject to, and may be adversely affected
by, the rights of holders of preferred stock issued by the Company in the
future. In addition, the issuance of preferred stock could have the effect
of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, control of theCompany.
Series A Preferred Stock------------------------
Pursuant to the Certificate of Designations, Powers, Preferences and
Rights of the Series A Convertible and Exchangeable Preferred Stock (the
"Series A Certificate of Designation"), 1,000 shares of Series A Preferred
Stock (the "Series A Preferred Stock"), with a liquidation preference of
$5,000 per share, have been authorized for issuance. Of these authorized
shares, all have been issued and are outstanding. All of the 1,000 shares
of Series A Preferred Stock were purchased by Elan for $5.0 million in
September 1996. The proceeds from the sale of the Series A Preferred
Stock, along with $5.0 million in proceeds from the sale of Common Stock
to Elan were used to fund the formation of Targon Corporation, a
majority-owned (99.75%) subsidiary of the Company. Targon focuses exclusively
on the rapid development, registration, manufacturing and commercialization
of oncology products.
The Series A Preferred Stock held by Elan could, at Elan's option be
either (i) exchanged for a portion of the Company's interest in Targon
which declines from 50% to 35%, depending on the time of the exchange,
which exchange may not occur later than September 30, 2001 or (ii)
converted into shares of Common Stock of CYTOGEN. On March 31, 1998, Elan
exchanged the Series A Preferred Stock for a portion of the Company's
interest in Targon. Elan is entitled through March 31, 2003 to exercise
a warrant to purchase up to 1 million shares of CYTOGEN Common Stock, at
an exercise price per share which escalates from $8.40 to $14 over the life
of the warrant. Elan's right to convert the Series A Preferred Stock into
shares of common stock of CYTOGEN expired on exercise of this exchange
right. The Series A Preferred Stock is no longer outstanding.
Description of Series B Convertible Preferred Stock
---------------------------------------------------
The 750 shares of Series B Preferred Stock were issued by the Company
to the holders of Series B Preferred Stock (the "Series B Holders") in the
Private Placement. Each share of Series B Preferred Stock has a par value
of $.01 per share and a stated value of $10,000 per share (the "StatedValue").
21<PAGE>
Pursuant to the Certificate of Designation relating to the Series B
Preferred Stock (the "Series B Certificate of Designation") the Series B
Holders are entitled to receive, when, as and if declared by the Board of
Directors of the Company (the "Board of Directors"), out of funds legally
available therefor, cumulative dividends at a rate of 6% of the Stated
Value per share per annum, payable, at the option of the Company, in cash
or shares of Common Stock (subject to certain limitations). Dividends on
the Series B Preferred Stock shall be deemed to accrue from the date of
original issue of the Series B Preferred Stock, whether or not earned or
declared and whether or not there are profits, surplus or other funds of
the Company legally available for the payment of dividends. Accrued
dividends on the Series B Preferred Stock shall be paid on the date such
Series B Preferred Stock is converted, but the Company shall have the
option to pay dividends in cash or shares of Common Stock and more
frequently as and when declared by the Board of Directors. The Series B
Certificate of Designation does not provide for a sinking fund.
The Series B Certificate of Designation prohibits the repurchase by
the Company of, or the payment or declaration of any dividends with respect
to, any securities of the Company junior to or pari passu with the Series
B Preferred Stock (with certain exceptions).
Except as may be required by law and except with respect to certain
actions which may adversely affect the Series B Holders, the Series B
Holders are not entitled to vote on any matter submitted to a vote of
stockholders of the Company.
The Series B Preferred Stock ranks senior with respect to rights on
liquidation, winding-up and dissolution of the Company to the Company's
Common Stock. Upon any voluntary or involuntary liquidation, dissolution
or winding-up of the Company, holders of Series B Preferred Stock will be
entitled to receive $10,000 per share, plus accrued and unpaid dividends,
before any distribution is made on the common stock or any preferred stock
of the Company ranking junior as to liquidation rights to the Series B
Preferred Stock.
The Series B Holders have the right to convert shares of Series B
Preferred Stock into common stock at a conversion price (the "Initial
Conversion Price") equal to the lesser of (a) $3.4575 and (b) at a discount
of up to 15% of the average of four closing bid prices chosen by the Series
B Holders during the twenty-five trading days prior to notice of
conversion, which discount is initially 5% and shall increase by 5% on the
first day of the two months subsequent to the Original Issue Date of the
Series B Preferred Stock. If, however, the average per share market value
for the five day trading period immediately preceding the conversion date
exceeds the Initial Conversion Price by 180%, then the conversion price
otherwise applicable to such conversion shall be increased by an amount
equal to 50% of the difference between the average per share market value
for the five day trading period immediately preceding the conversion date
and the Initial Conversion Price.
The Conversion Price may be adjusted under certain circumstances,
including the failure by the Company to file a registration statement with
the Securities and Exchange Commission (the "Commission") for the
underlying shares into which the Series B Preferred Stock is convertible,
the failure of such registration statement to be declared effective by the
Commission within certain time periods, suspension of trading of the
Company's common stock or upon the occurrence of certain other events. If
on the date of conversion, the conversion price then in effect would result
in the number of shares issuable in connection with such conversion
(including the conversion shares issued in respect of payment of dividends)
equalling or exceeding 20% of the number of shares of Common Stock
outstanding on the Original Issue Date, the Company is, under certain
circumstances, required to obtain the approval of a majority of
shareholders to authorize such issuance. If such approval is not obtained
certain penalties may apply. The Series B Holders have agreed that in no
event shall any such Series B Holder be entitled to convert any shares of
Series B Preferred Stock if the issuance of shares of Common Stock upon a
proposed conversion, when the shares to be so issued are counted together
with other shares of common stock beneficially owned by such Series B
Holder would result in a Series B Holder beneficially owning more than
22<PAGE>
4.999% of the outstanding shares of Common Stock.
The Series B Preferred Stock is convertible at the option of the
Company three years from the Original Issue Date. All outstanding and
unconverted shares of Series B Preferred Stock are redeemable on the third
anniversary of the Original Issue Date at a price per share equal to the
product of (1) the average per share market value for the five trading days
immediately preceding (i) the third anniversary of the original issue date
or (ii) the date of payment in full by the Company of the redemption
price, whichever is greater, and (2) the Stated Value plus accrued but
unpaid dividends not paid in Common Stock divided by the Conversion Price
for the Series B Preferred Stock calculated on the third anniversary of the
Original Issue Date. |
