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Filing
Table of Contents
Filed
pursuant to Rule 424(b)(3)
Registration No. 333-127857
Registration No. 333-127857
PROSPECTUS
23,240,340 Shares
23,240,340 Shares
Common Stock
ADVENTRX
Pharmaceuticals, Inc.
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
(858) 558-0866
San Diego, California 92121
(858) 558-0866
The security holders of ADVENTRX Pharmaceuticals, Inc. (the Company) listed in this
prospectus are offering an aggregate of 23,240,340 shares of common stock, including shares
issuable upon exercise of outstanding warrants.
The shares and warrants were sold to the selling security holders in transactions exempt from
registration under the Securities Act of 1933, as amended (the Securities Act). We will not
receive any of the proceeds from the sale of the shares of common stock offered hereby although we
will receive the proceeds of sales of shares of common stock to the selling security holders upon
exercise of their warrants (except to the extent warrants are exercised on a net exercise basis).
The selling security holders may sell the shares covered by this prospectus from time to time
in transactions on the American Stock Exchange LLC, in the over-the-counter market or in negotiated
transactions. The selling security holders directly, or through agents or dealers designated from
time to time, may sell the shares of common stock offered by them at fixed prices, at prevailing
market prices at the time of sale, at varying prices determined at the time of sale or at
negotiated prices.
Our common stock is listed on the American Stock Exchange LLC under the symbol ANX. On
September 7, 2005, the last reported sale price of our common stock on the American Stock Exchange
LLC was $3.82 per share.
INVESTING IN THE COMMON STOCK INVOLVES RISKS.
SEE RISK FACTORS BEGINNING ON PAGE 4.
SEE RISK FACTORS BEGINNING ON PAGE 4.
Neither the Securities and Exchange Commission nor any state securities regulator has approved
or disapproved the shares of common stock covered by this prospectus, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date
of this prospectus is September 8, 2005
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In this prospectus, ADVENTRX, the company, we, us, and our refer to ADVENTRX
Pharmaceuticals, Inc.
You should rely only on the information contained in this prospectus. We have not authorized
anyone to provide you with information different from that contained in this prospectus. This
prospectus is offering to sell, and is seeking offers to buy, shares of common stock only in
jurisdictions where such offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus.
Special Note Regarding Forward-Looking Statements
Some of the statements under Our Company, Risk Factors and elsewhere in this prospectus
constitute forward-looking statements. These statements involve known and unknown risks,
uncertainties, and other factors that may cause our or our industrys actual results, levels of
activity, performance, or achievements to be materially different from any future results, levels
of activity, performance, or achievements expressed or implied by such forward-looking statements.
These factors include, among others, those listed under Risk Factors and elsewhere in this
prospectus.
In some cases, you can identify forward-looking statements by terms such as may, will,
should, expects, plans, anticipates, believes, estimates, predicts, potential, or
continue or similar terms.
Although we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.
Our actual results could differ materially from those expressed or implied by these forward-looking
statements as a result of various factors, including the risk factors described under the heading
Risk Factors and elsewhere in this prospectus. We undertake no obligation to update publicly any
forward-looking statements for any reason, except as required by law, even as new information
becomes available or other events occur in the future.
Moreover, neither we nor any other person assumes responsibility for the accuracy and
completeness of these statements. We undertake no obligation to update or revise any of the
forward-looking statements, whether as a result of new information, future events or otherwise. In
light of these risks, uncertainties and assumptions, the forward-looking events discussed in this
prospectus may not occur.
Where You Can Find More Information About Us
We file annual, quarterly and special reports and other information with the Securities and
Exchange Commission (the Commission). You may read and copy any document we file with the
Commission at the Public Reference Room at the Commission, at 100 F Street, N.E., Washington, D.C.
20549. Please call 1-800-SEC-0330 for further information concerning the Public Reference Room.
The Commission also makes these documents and
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other information available on its website at http://www.sec.gov. We also maintain a website
at http://www.adventrx.com. The material on our website is not a part of this prospectus.
We have filed with the Commission a registration statement on Form S-3 under the Securities
Act relating to the common stock offered by this prospectus. This prospectus constitutes a part of
the registration statement but does not contain all of the information set forth in the
registration statement and its exhibits. For further information, we refer you to the registration
statement and its exhibits.
The Commission allows us to incorporate by reference the information we file with it, which
means that we can disclose important information to you by referring you to another document we
have filed with the Commission. The information incorporated by reference is an important part of
this prospectus and information that we file later with the Commission will automatically update
and supersede this information. We incorporate by reference the following:
(a) | the section entitled Description of Registrants Securities contained in the Registrants Registration Statement on Form 8-A (file No. 001-32157) filed with the Commission on April 27, 2004, pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), including any amendment or report filed for the purpose of updating such description. | ||
(b) | our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2004 filed with the Commission on March 31, 2005; | ||
(c) | our Amendment No. 1 to our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2004 filed with the Commission on August 11, 2005; | ||
(d) | our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2005 filed with the Commission on May 16, 2005; | ||
(e) | our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2005 filed with the Commission on August 12, 2005; | ||
(f) | our Current Report on Form 8-K filed with the Commission on June 10, 2005; | ||
(g) | our Current Report on Form 8-K filed with the Commission on July 27, 2005; | ||
(h) | our Current Report on Form 8-K filed with the Commission on August 12, 2005; | ||
(i) | our Current Report on Form 8-K filed with the Commission on August 30, 2005; and | ||
(j) | any future filings we make with the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act, until we file a post-effective amendment which indicates the termination of the offering of the securities made by this prospectus. |
We will provide exhibits to these filings at no cost only if they are specifically
incorporated into those filings.
You may request a copy of these filings, at no cost, by writing or telephoning us at the
following address or telephone number:
Carrie E. Carlander
Chief Financial Officer
ADVENTRX Pharmaceuticals, Inc.
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
(858) 552-0866
Chief Financial Officer
ADVENTRX Pharmaceuticals, Inc.
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
(858) 552-0866
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Our Company
We are a biopharmaceutical research and development company focused on introducing new
technologies for anticancer and antiviral treatments that improve the performance and safety of
existing drugs by addressing significant problems such as drug metabolism, toxicity,
bioavailability or resistance. The Company currently does not manufacture, market, sell or
distribute any product. Through our license agreements with University of Southern California
(USC), and the National Institutes of Health (NIH), the Company has rights to drug candidates in
varying early stages of development.
We were initially organized as a corporation under the Delaware General Corporation Law in
December 1995. On May 30, 2003, the Company merged our wholly owned subsidiary, Biokeys, Inc.,
into itself and changed the name of the Company from Biokeys Pharmaceuticals, Inc. to ADVENTRX
Pharmaceuticals, Inc. The merger had no effect on the financial statements of the Company.
In July 2004, the Company formed a wholly owned subsidiary, ADVENTRX (Europe) Ltd., in the
United Kingdom for the purpose of conducting drug trials in the European Union.
Risk Factors
You should carefully consider the risks described below before making an investment decision.
The risks described below are not the only ones facing our company. Additional risks not presently
known to us or that we currently deem immaterial may also impair our business operations.
Our business, financial condition or results of operations could be materially adversely
affected by any of these risks. The trading price of our common stock could decline due to any of
these risks and you may lose all or part of your investment.
We have a substantial accumulated deficit and limited working capital.
We had an accumulated deficit of $41 million as of June 30, 2005. Since we presently have no
source of revenues and are committed to continuing our product research and development program,
significant expenditures and losses will continue until development of new products is completed
and such products have been clinically tested, approved by the FDA or other regulatory agencies and
successfully marketed. In addition, we fund our operations primarily through the sale of
securities, and have had limited working capital for our product development and other activities.
We do not believe that debt financing from financial institutions will be available until at least
the time that one of our products is approved for commercial production.
We have no current product sales revenues or profits.
We have devoted our resources to developing a new generation of therapeutic drug products, but
such products cannot be marketed until clinical testing is completed and governmental approvals
have been obtained. Accordingly, there is no current source of revenues, much less profits, to
sustain our present activities, and no revenues will likely be available until, and unless, the new
products are clinically tested, approved by the FDA or other regulatory agencies and successfully
marketed, either by us or a marketing partner, an outcome which we are not able to guarantee.
It is uncertain that we will have access to future capital.
It is not expected that we will generate positive cash flow from operations for at least the
next several years. As a result, substantial additional equity or debt financing for research and
development or clinical development will be required to fund our activities. Although we have
raised such equity financing in April 2004 and July 2005, we cannot be certain that we will be able
to continue to obtain such financing on favorable or satisfactory terms, if at all, or that it will
be sufficient to meet our cash requirements. Any additional equity financing could result in
substantial dilution to stockholders, and debt financing, if available, will most likely involve
restrictive covenants that preclude us from making distributions to stockholders and taking other
actions beneficial to stockholders. If adequate funds are not available, we may be required to
delay or reduce the scope of our drug development program or attempt to
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continue development by entering into arrangements with collaborative partners or others that
may require us to relinquish some or all of our rights to proprietary drugs. The inability to fund
our capital requirements would have a material adverse effect on us.
We are not certain that we will be successful in the development of our drug candidates.
The successful development of any new drug is highly uncertain and is subject to a number of
significant risks. Our drug candidates, all of which are in a development stage, require
significant, time-consuming and costly development, testing and regulatory clearance. This process
typically takes several years and can require substantially more time. Risks include, among others,
the possibility that a drug candidate will (i) be found to be ineffective or unacceptably toxic,
(ii) have unacceptable side effects, (iii) fail to receive necessary regulatory clearances, (iv)
not achieve broad market acceptance, (v) be subject to competition from third parties who may
market equivalent or superior products, (vi) be affected by third parties holding proprietary
rights that will preclude us from marketing a drug product, or (vii) not be able to be immediately
manufactured by manufacturers in a timely manner in accordance with required standards of quality.
There can be no assurance that the development of our drug candidates will demonstrate the efficacy
and safety of our drug candidates as therapeutic drugs, or, even if demonstrated, that there will
be sufficient advantages to their use over other drugs or treatments so as to render the drug
product commercially viable. In the past, we have been faced with limiting the scope and/or
delaying the launch of preclinical and clinical drug trials due to limited cash and personnel
resources. We have also chosen to terminate licenses of some drug candidates that were not showing
sufficient promise to justify continued expense and development. In the event that we are not
successful in developing and commercializing one or more drug candidates, investors are likely to
realize a loss of their entire investment.
We have been delayed at certain times in the past in the development of our drug products by
limited funding. In addition, if certain of our scientific and technical personnel resigned at or
about the same time, the development of our drug products would probably be delayed until new
personnel were hired and became familiar with the development programs.
Positive results in preclinical and clinical trials do not ensure that future clinical trials
will be successful or that drug candidates will receive any necessary regulatory approvals for the
marketing, distribution or sale of such drug candidates.
Success in preclinical and clinical trials does not ensure that large-scale clinical trials
will be successful. Clinical results are frequently susceptible to varying interpretations that may
delay, limit or prevent regulatory approvals. The length of time necessary to complete clinical
trials and to submit an application for marketing approval for a final decision by a regulatory
authority varies significantly and may be difficult to predict. In the past, we have terminated
licenses of drug candidates when our preclinical trials did not support or verify earlier
preclinical data. There is a significant risk that any of our drug candidates could fail to show
satisfactory results in continued trials, and would not justify further development.
We will face intense competition from other companies in the pharmaceutical industry.
We are engaged in a segment of the pharmaceutical industry that is highly competitive and
rapidly changing. If successfully developed and approved, any of our drug candidates will likely
compete with several existing therapies. CoFactor, our leading drug candidate, would likely compete
against a well-established product, leucovorin. In addition, there are numerous companies with a
focus in oncology and/or anti-viral therapeutics that are pursuing the development of new
pharmaceuticals that target the same diseases as are targeted by the drugs being developed by us.
We anticipate that we will face intense and increasing competition in the future as new products
enter the market and advanced technologies become available. We cannot assure that existing
products or new products developed by competitors will not be more effective, or more effectively
marketed and sold than those we may market and sell. Competitive products may render our drugs
obsolete or noncompetitive prior to our recovery of development and commercialization expenses.
Many of our competitors such as Merck and Pfizer will also have significantly greater financial,
technical and human resources and will likely be better equipped to develop, manufacture and market
products. In addition, many of these competitors have extensive experience in preclinical testing
and clinical trials, obtaining FDA and other
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regulatory approvals and manufacturing and marketing pharmaceutical products. A number of these
competitors also have products that have been approved or are in late-stage development and operate
large, well-funded research and development programs. Smaller companies may also prove to be
significant competitors, particularly through collaborative arrangements with large pharmaceutical
and biotechnology companies. Furthermore, academic institutions, government agencies and other
public and private research organizations are becoming increasingly aware of the commercial value
of their inventions and are actively seeking to commercialize the technology they have developed.
Companies such as Gilead, Roche, GlaxoSmithKline all have drugs in various stages of development
that could become competitors. Accordingly, competitors may succeed in commercializing products
more rapidly or effectively than us, which would have a material adverse effect on us.
There is no assurance that our products will have market acceptance.
Our success will depend in substantial part on the extent to which a drug product, once
approved, achieves market acceptance. The degree of market acceptance will depend upon a number of
factors, including (i) the receipt and scope of regulatory approvals, (ii) the establishment and
demonstration in the medical community of the safety and efficacy of a drug product, (iii) the
products potential advantages over existing treatment methods and (iv) reimbursement policies of
government and third party payors. We cannot predict or guarantee that physicians, patients,
healthcare insurers or maintenance organizations, or the medical community in general, will accept
or utilize any of our drug products.
The unavailability of health care reimbursement for any of our products will likely adversely
impact our ability to effectively market such products and whether health care reimbursement will
be available for any of our products is uncertain.
Our ability to commercialize our technology successfully will depend in part on the extent to
which reimbursement for the costs of such products and related treatments will be available from
government health administration authorities, private health insurers and other third-party payors.
Significant uncertainty exists as to the reimbursement status of newly approved medical products.
We cannot guarantee that adequate third-party insurance coverage will be available for us to
establish and maintain price levels sufficient for realization of an appropriate return on our
investments in developing new therapies. If we are successful in getting FDA approval for CoFactor,
we will be competing against a generic drug, leucovorin, which has a lower cost and a long,
established history of reimbursement. Receiving sufficient reimbursement for purchase costs of
CoFactor will be necessary to make it cost effective and competitive versus the established drug,
leucovorin. Government, private health insurers, and other third-party payors are increasingly
attempting to contain health care costs by limiting both coverage and the level of reimbursement
for new therapeutic products approved for marketing by the FDA. Accordingly, even if coverage and
reimbursement are provided by government, private health insurers, and third-party payors for use
of our products, the market acceptance of these products would be adversely affected if the amount
of reimbursement available for the use of our therapies proved to be unprofitable for health care
providers.
Uncertainties related to health care reform measures may affect our success.
There have been some federal and state proposals in the past to subject the pricing of health
care goods and services, including prescription drugs, to government control and to make other
changes to the U.S. health care system. None of the proposals seems to have affected any of the
drugs in our programs. However, it is uncertain if future legislative proposals would be adopted
that might affect the drugs in our programs or what actions federal, state, or private payors for
health care treatment and services may take in response to any such health care reform proposals or
legislation. Any such health care reforms could have a material adverse effect on the marketability
of any drugs for which we ultimately require FDA approval.
Further testing of our drug candidates will be required and there is no assurance of FDA
approval.
The FDA and comparable agencies in foreign countries impose substantial requirements upon the
introduction of medical products, through lengthy and detailed laboratory and clinical testing
procedures, sampling activities and other costly and time-consuming procedures. Satisfaction of
these requirements typically takes several years or more and varies substantially based upon the
type, complexity, and novelty of the product.
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The effect of government regulation and the need for FDA approval will delay marketing of new
products for a considerable period of time, impose costly procedures upon our activities, and
provide an advantage to larger companies that compete with us. There can be no assurance that the
FDA or other regulatory approval for any products developed by us will be granted on a timely basis
or at all. Any such delay in obtaining or failure to obtain, such approvals would materially and
adversely affect the marketing of any contemplated products and the ability to earn product
revenue. Further, regulation of manufacturing facilities by state, local, and other authorities is
subject to change. Any additional regulation could result in limitations or restrictions on our
ability to utilize any of our technologies, thereby adversely affecting our operations.
Human pharmaceutical products are subject to rigorous preclinical testing and clinical trials
and other approval procedures mandated by the FDA and foreign regulatory authorities. Various
federal and foreign statutes and regulations also govern or influence the manufacturing, safety,
labeling, storage, record keeping and marketing of pharmaceutical products. The process of
obtaining these approvals and the subsequent compliance with appropriate U.S. and foreign statutes
and regulations are time-consuming and require the expenditure of substantial resources. In
addition, these requirements and processes vary widely from country to country.
Among the uncertainties and risks of the FDA approval process are the following: (i) the
possibility that studies and clinical trials will fail to prove the safety and efficacy of the
drug, or that any demonstrated efficacy will be so limited as to significantly reduce or altogether
eliminate the acceptability of the drug in the marketplace, (ii) the possibility that the costs of
development, which can far exceed the best of estimates, may render commercialization of the drug
marginally profitable or altogether unprofitable, and (iii) the possibility that the amount of time
required for FDA approval of a drug may extend for years beyond that which is originally estimated.
In addition, the FDA or similar foreign regulatory authorities may require additional clinical
trials, which could result in increased costs and significant development delays. Delays or
rejections may also be encountered based upon changes in FDA policy and the establishment of
additional regulations during the period of product development and FDA review. Similar delays or
rejections may be encountered in other countries.
Our success will depend on licenses and proprietary rights we receive from other parties, and
on any patents we may obtain.
Our success will depend in large part on our ability and our licensors ability to (i)
maintain license and patent protection with respect to their drug products, (ii) defend patents and
licenses once obtained, (iii) maintain trade secrets, (iv) operate without infringing upon the
patents and proprietary rights of others and (iv) obtain appropriate licenses to patents or
proprietary rights held by third parties if infringement would otherwise occur, both in the U.S.
and in foreign countries. We have obtained licenses to patents and other proprietary rights from
University of Southern California, and the National Institutes of Health.
The patent positions of pharmaceutical companies, including ours, are uncertain and involve
complex legal and factual questions. There is no guarantee that we or our licensors have or will
develop or obtain the rights to products or processes that are patentable, that patents will issue
from any of the pending applications or that claims allowed will be sufficient to protect the
technology licensed to us. In addition, we cannot be certain that any patents issued to or licensed
by us will not be challenged, invalidated, infringed or circumvented, or that the rights granted
thereunder will provide competitive disadvantages to us.
Litigation, which could result in substantial cost, may also be necessary to enforce any
patents to which we have rights, or to determine the scope, validity and unenforceability of other
parties proprietary rights, which may affect our rights. U.S. patents carry a presumption of
validity and generally can be invalidated only through clear and convincing evidence. There can be
no assurance that our licensed patents would be held valid by a court or administrative body or
that an alleged infringer would be found to be infringing. The mere uncertainty resulting from the
institution and continuation of any technology-related litigation or interference proceeding could
have a material adverse effect on us pending resolution of the disputed matters.
We may also rely on unpatented trade secrets and know-how to maintain our competitive
position, which we seek to protect, in part, by confidentiality agreements with employees,
consultants and others. There can be no assurance that these agreements will not be breached or
terminated, that we will have adequate remedies for any breach, or that trade secrets will not
otherwise become known or be independently discovered by competitors.
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Our license agreements can be terminated in the event of a breach.
The license agreements pursuant to which we license our core technologies for our potential
drug products permit the licensors, respectively National Institutes of Health, and the University
of Southern California, to terminate the agreement under certain circumstances, such as the failure
by us to use our reasonable best efforts to commercialize the subject drug or the occurrence of any
other uncured material breach by us. The license agreements also provide that the licensor is
primarily responsible for obtaining patent protection for the technology licensed, and we are
required to reimburse the licensor for the costs it incurs in performing these activities. The
license agreements also require the payment of specified royalties. Any inability or failure to
observe these terms or pay these costs or royalties could result in the termination of the
applicable license agreement in certain cases. In the past, we have let lapse certain licenses for
drug candidates when we determined that the expense and risk of continued development outweighed
the likely benefits of that continued development. The termination of any license agreement could
have a material adverse effect on us.
Protecting our proprietary rights is difficult and costly.
The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and
involve complex legal and factual questions. Accordingly, we cannot predict the breadth of claims
allowed in these companies patents or whether we may infringe or be infringing these claims.
Although we have not been notified of any patent infringement, nor notified others of patent
infringement, such patent disputes are common and could preclude the commercialization of our
products. Patent litigation is costly in its own right and could subject us to significant
liabilities to third parties. In addition, an adverse decision could force us to either obtain
third-party licenses at a material cost or cease using the technology or product in dispute.
We may be unable to retain skilled personnel and maintain key relationships.
The success of our business depends, in large part, on our ability to attract and retain
highly qualified management, scientific and other personnel, and on our ability to develop and
maintain important relationships with leading research institutions and consultants and advisors.
Competition for these types of personnel and relationships is intense from numerous pharmaceutical
and biotechnology companies, universities and other research institutions. We are currently
dependent upon our scientific staff, which has a deep background in our drug candidates and the
ongoing preclinical and clinical trials. Recruiting and retaining senior employees with relevant
drug development experience in oncology and anti-viral therapeutics is costly and time-consuming.
There can be no assurance that we will be able to attract and retain such individuals on an
uninterrupted basis and on commercially acceptable terms, and the failure to do so could have a
material adverse effect on us by significantly delaying one or more of our drug development
programs. These individuals are employed under offer letters, rather than employment agreements.
We currently have no sales capability, and limited marketing capability.
We currently do not have sales personnel. We have limited marketing and business development
personnel. We will have to develop a sales force, or rely on marketing partners or other
arrangements with third parties for the marketing, distribution and sale of any drug product which
is ready for distribution. There is no guarantee that we will be able to establish marketing,
distribution or sales capabilities or make arrangements with third parties to perform those
activities on terms satisfactory to us, or that any internal capabilities or third party
arrangements will be cost-effective.
In addition, any third parties with which we may establish marketing, distribution or sales
arrangements may have significant control over important aspects of the commercialization of a drug
product, including market identification, marketing methods, pricing, composition of sales force
and promotional activities. There can be no assurance that we will be able to control the amount
and timing of resources that any third party may devote to our products or prevent any third party
from pursuing alternative technologies or products that could result in the development of products
that compete with, or the withdrawal of support for, our products.
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We do not have manufacturing capabilities and may not be able to efficiently develop
manufacturing capabilities or contract for such services from third parties on commercially
acceptable terms.
We do not have any manufacturing capacity. When required, we will seek to establish
relationships with third-party manufacturers for the manufacture of clinical trial material and the
commercial production of drug products as we have with our current manufacturing partners. There
can be no assurance that we will be able to establish relationships with third-party manufacturers
on commercially acceptable terms or that third-party manufacturers will be able to manufacture a
drug product on a cost-effective basis in commercial quantities under good manufacturing practices
mandated by the FDA.
The dependence upon third parties for the manufacture of products may adversely affect future
costs and the ability to develop and commercialize a drug product on a timely and competitive
basis. Further, there can be no assurance that manufacturing or quality control problems will not
arise in connection with the manufacture of our drug products or that third party manufacturers
will be able to maintain the necessary governmental licenses and approvals to continue
manufacturing such products. Any failure to establish relationships with third parties for our
manufacturing requirements on commercially acceptable terms would have a material adverse effect on
us.
We are dependent in part on third parties for drug development and research facilities.
We do not possess research and development facilities necessary to conduct all of our drug
development activities. We engage consultants and independent contract research organizations to
design and conduct clinical trials in connection with the development of our drugs. As a result,
these important aspects of a drugs development will be outside our direct control. In addition,
there can be no assurance that such third parties will perform all of their obligations under
arrangements with us or will perform those obligations satisfactorily.
In the future, we anticipate that we will need to obtain additional or increased product
liability insurance coverage and it is uncertain that such increased or additional insurance
coverage can be obtained on commercially reasonable terms.
Our business will expose us to potential product liability risks that are inherent in the
testing, manufacturing and marketing of pharmaceutical products. There can be no assurance that
product liability claims will not be asserted against us. We intend to obtain additional limited
product liability insurance for our clinical trials, directly or through our marketing development
partners or contract research organization (CRO) partners, when they begin in the U.S. and to
expand our insurance coverage if and when we begin marketing commercial products. However, there
can be no assurance that we will be able to obtain product liability insurance on commercially
acceptable terms or that we will be able to maintain such insurance at a reasonable cost or in
sufficient amounts to protect against potential losses. A successful product liability claim or
series of claims brought against us could have a material adverse effect on us.
The market price of our shares, like that of many biotechnology companies, is highly volatile.
Market prices for our Common Stock and the securities of other medical and biomedical
technology companies have been highly volatile and may continue to be highly volatile in the
future. Factors such as announcements of technological innovations or new products by us or our
competitors, government regulatory action, litigation, patent or proprietary rights developments,
and market conditions for medical and high technology stocks in general can have a significant
impact on any future market for the Common Stock.
Changes in laws and regulations that affect the governance of public companies has increased
our operating expenses and will continue to do so.
Recently enacted changes in the laws and regulations affecting public companies, including the
provisions of the Sarbanes-Oxley Act of 2002 and the listing requirements for American Stock
Exchange have imposed new duties on us and on our executives, directors, attorneys and independent
accountants. In order to comply with these new rules, we have hired and expect to hire additional
personnel and use additional outside legal, accounting and advisory services, which have increased
and are likely to continue increasing our operating expenses. In particular, we expect to incur
additional administrative expenses as we implement Section 404 of the Sarbanes-Oxley Act, which
requires
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management to report on, and our independent registered public accounting firm to attest to,
our internal controls. For example, we expect to incur significant expenses in connection with the
implementation, documentation and testing of our existing and newly implemented control systems.
Management time associated with these compliance efforts necessarily reduces time available for
other operating activities, which could adversely affect operating results. If we are unable to
achieve full and timely compliance with these regulatory requirements, we could be required to
incur additional costs, expend additional money and management time on remedial efforts which could
adversely affect our results of operations.
Failure to implement effective control systems, or failure to complete our assessment of the
effectiveness of our internal control over financial reporting, may subject us to regulatory
sanctions and could result in a loss of public confidence, which could harm our operating results.
Under the supervision of our Chief Executive Officer and our Chief Financial Officer, we
evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2004 and
again as of June 30, 2005. Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that as of both these dates, our disclosure controls and procedures
were not effective to ensure that management is alerted to material information required to be
disclosed by us in the reports we file with the SEC and that such material information is recorded
and reported within the time periods specified in the SECs rules and forms. Since December 31,
2004, management has implemented changes intended to improve certain aspects of our disclosure
controls and procedures. If we fail to implement effective disclosure controls and procedures, we
may be unable to make timely disclosure of material information, which could subject us to
regulatory sanctions, loss of public confidence and stockholder lawsuits.
Pursuant to Section 404 of the Sarbanes-Oxley Act, beginning with our year ending December 31,
2005, if we are an accelerated filer as of December 31, 2005, or December 31, 2006, if we are not
an accelerated filer as of December 31, 2005, we will be required to include in our annual report
our assessment of the effectiveness of our internal control over financial reporting and our
audited financial statements as of the end of that fiscal year. Furthermore, our independent
registered public accounting firm will be required to attest to whether our assessment of the
effectiveness of our internal control over financial reporting is fairly stated in all material
respects and separately report on whether it believes we maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2005, if we are an
accelerated filer as of December 31, 2005, or December 31, 2006, we are not an accelerated
filer as of December 31, 2005.
In connection with its audit of our financial statements for the fiscal year ended December
31, 2004, J.H. Cohn LLP, our independent registered public accounting firm, advised our Audit
Committee that it had identified material weaknesses in our accounting function that we need to
re-evaluate and strengthen. We are taking steps intended to remedy these material weaknesses.
However, if we fail to remedy these material weaknesses, fail to timely complete our assessment, or
if our independent registered public accounting firm cannot timely attest to our assessment, we
could be subject to regulatory sanctions and a loss of public confidence in our internal control.
In addition, any failure to implement required new or improved controls, or difficulties
encountered in their implementation, could harm our operating results or cause us to fail to timely
meet our regulatory reporting obligations.
Use of Proceeds
All of the shares of common stock and shares of common stock issuable upon exercise of
warrants offered pursuant to this prospectus are being offered by the selling security holders
listed under Selling Security Holders. We will not receive any proceeds from sales of shares of
common stock by the selling security holders. The shares offered hereby include an aggregate of
12,048,042 shares issuable upon exercise of outstanding warrants held by security holders named in
this prospectus. We will receive proceeds from any exercise of these warrants (except to the
extent warrants are exercised on a net exercise basis). The proceeds, if any, will be added to our
working capital and be available for general corporate purposes.
Selling Security Holders
All of the shares of common stock and shares of common stock issuable upon exercise of
warrants registered for sale under this prospectus (the
Registered Shares) are owned (or capable of being owned
upon exercise of warrants as described herein), as of the
date of this prospectus, by
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the selling security holders listed in the table below. We issued the Registered Shares (or
the warrants exerciseable for Registered Shares, as the case may be) in the ordinary course of
business in transactions exempt from the registration requirements of the Securities Act. We are
registering the Registered Shares for the selling security holders. At the time of the issuance of
the Registered Shares (or the warrants exercisable for Registered Shares, as the case may be) we
had no agreement or understanding with any selling security holder to distribute any of our
securities.
The following
table sets forth information as of September 7, 2005 with respect to the selling
security holders and the respective number of shares of common stock beneficially owned by each
selling security holder, all of which are offered pursuant to this prospectus. Except as otherwise
noted in this prospectus, for purposes of computing the number and percentage of shares
beneficially owned by a selling security holder on September 7, 2005, any shares which such person
has the right to acquire within 60 days after such date are deemed to be outstanding, but those
shares are not deemed to be outstanding for the purpose of computing the percentage ownership of
any other selling security holder:
Shares | ||||||||||||||||||||
Shares | Percent | Owned | Percent | |||||||||||||||||
Owned | Owned | Shares | Upon | Owned | ||||||||||||||||
Before | Before | Being | Completion | After | ||||||||||||||||
Name | Offering(1) | Offering(2) | Offered | Of Offering | Offering(2) | |||||||||||||||
Andrew J. Maffey |
188,000 | (3) | * | 63,000 | 125,000 | * | ||||||||||||||
Caroline A. Levine |
11,250 | * | 11,250 | 0 | 0 | |||||||||||||||
Centrum Bank AG |
91,500 | (4) | * | 46,500 | 45,000 | * | ||||||||||||||
Charles and Leslie Close |
65,000 | (5) | * | 15,000 | 50,000 | * | ||||||||||||||
Clifford Ross |
65,000 | (6) | * | 15,000 | 50,000 | * | ||||||||||||||
Delaware Charter Guarantee and Trust
Co. FBO Michael Kooper IRA |
77,865 | (7) | * | 17,969 | 59,896 | * | ||||||||||||||
Elaine Dines |
65,000 | (8) | * | 15,000 | 50,000 | * | ||||||||||||||
Franco Merlo |
2,989 | * | 2,989 | 0 | 0 | |||||||||||||||
High River Limited Partnership |
1,729,730 | (9) | 2.6 | % | 1,729,730 | 0 | 0 | |||||||||||||
Icahn Partners LP |
3,321,080 | (10) | 4.8 | % | 3,321,080 | 0 | 0 | |||||||||||||
Icahn Partners Master Fund LP |
3,597,838 | (11) | 5.2 | % | 3,597,838 | 0 | 0 | |||||||||||||
James Simpson |
7,500 | (12) | * | 7,500 | 0 | 0 | ||||||||||||||
Jay Silberman |
97,500 | (13) | * | 22,500 | 75,000 | * | ||||||||||||||
John J. Kissane |
13,000 | * | 3,000 | 10,000 | * | |||||||||||||||
Legend Merchant Group, Inc. |
1,500 | (14) | * | 1,500 | 0 | 0 | ||||||||||||||
Michael Kooper |
308,750 | * | 71,250 | 237,500 | * | |||||||||||||||
North Sound Legacy Institutional
Fund LLC |
1,005,756 | (15) | 1.5 | %(15) | 807,756 | 198,000 | (16) | * | ||||||||||||
North Sound Legacy International Ltd. |
2,396,946 | (17) | 3.5 | %(17) | 2,012,946 | 384,000 | (18) | * | ||||||||||||
Paul Mezei |
2,600 | (19) | * | 600 | 2,000 | * | ||||||||||||||
Richard Melnick |
201,000 | * | 201,000 | 0 | 0 | |||||||||||||||
Robert J. Neborsky MD Combination
Retirement Trust |
670,641 | (20) | * | 320,414 | 350,227 | (21) | * | |||||||||||||
Royal Bank of Canada |
2,702,702 | (22) | 2,702,702 | 0 | 0 | |||||||||||||||
Schenk Family Trust Carl Schenk
Trustee |
32,500 | (23) | * | 7,500 | 25,000 | * | ||||||||||||||
The Prudent Bear Fund |
375,000 | (24) | * | 375,000 | 0 | 0 | ||||||||||||||
Thomas DePetrillo |
300,000 | (25) | * | 300,000 | 0 | 0 | ||||||||||||||
VGE III Portfolio Ltd. |
3,902,600 | (26) | 5.7 | % | 3,902,600 | 0 | 0 | |||||||||||||
Viking Global Equities LP |
3,664,966 | (27) | 5.3 | % | 3,664,966 | 0 | 0 | |||||||||||||
Steve
Salovitch |
13,000 | * | 3,000 | 10,000 | * | |||||||||||||||
EFG Private
Bank S.A. |
23,250 | (28) | * | 750 | 22,500 | * |
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* | Less than 1.0%. | |
(1) | Options and warrants to purchase our common stock that are presently exercisable or exercisable within 60 days of September 7, 2005, even if such options or warrants may otherwise be subject to restriction on exercise, are included in the total number of shares beneficially owned for the person holding those options or warrants and are considered outstanding for the purpose of calculating percentage ownership of the particular holder. | |
(2) | The percentage of ownership of common stock is based on 66,909,535 shares of common stock outstanding as of September 7, 2005 and excludes all shares of common stock issuable upon the exercise of outstanding options or warrants to purchase common stock, other than the shares of common stock issuable upon the exercise of options or warrants to purchase common stock held by the named person to the extent such options or warrants are exercisable within 60 days of September 7, 2005, even if such options or warrants may otherwise be subject to restriction on exercise. | |
(3) | Includes 16,000 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(4) | Includes 16,500 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(5) | Includes 15,000 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(6) | Includes 15,000 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(7) | Includes 17,969 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(8) | Includes 15,000 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(9) | Includes 864,865 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. All of the shares issuable upon exercise of warrants held by this person have been included in the total number of shares beneficially owned for this person notwithstanding the fact that the warrants are not exercisable until January 27, 2006. Based on our review of a Schedule 13D filed with the Commission on August 5, 2005 (the Icahn 13D) by High River Limited Partnership (High River), Hopper Investments, LLC (Hopper), Barberry Corp. (Barberry), Icahn Partners Master Fund LP (Icahn Master), Icahn Offshore LP (Icahn Offshore), CCI Offshore Corp. (CCI Offshore), Icahn Partners LP (Icahn Partners), Icahn Onshore LP (Icahn Onshore), CCI Onshore Corp. (CCI Onshore) and Carl C. Icahn, we believe that as of the date of this prospectus each of Barberry, Hopper and Mr. Icahn may be deemed to beneficially own (as that term is defined in Rule 13d-3 under the Exchange Act) the shares (including warrant shares) directly held by High River because such persons are in a position to directly or indirectly determine the investment and voting decisions of High River. Barberry, Hopper and Mr. Icahn each disclaim beneficial ownership of such shares for all other purposes. | |
(10) | Includes 1,660,540 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. All of the shares issuable upon exercise of warrants held by this person have been included in the total number of shares beneficially owned for this person notwithstanding the fact that the warrants are not exercisable until January 27, 2006. Based on our review of the Icahn 13D, we believe that as of the date of this prospectus each of CCI Onshore, Icahn Onshore and Mr. Icahn may be deemed to beneficially own (as that term is defined in Rule 13d-3 under the Exchange Act) the shares (including warrant shares) directly held by Icahn Partners because such persons are in a position to directly or indirectly determine the investment and voting decisions of Icahn Partners. CCI Onshore, Icahn Onshore and Mr. Icahn each disclaim beneficial ownership of such shares for all other purposes. Based on our review of a Form 3 filed with the Commission on August 16, 2005 (the Form 3) by Keith Meister, a member of our board of directors, and the information disclosed in the Icahn 13D, we believe that because Mr. Meister is a limited partner of Icahn Onshore and has an interest in the |
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fees, including the performance fees, relating to Icahn Onshore and Icahn Offshore he may be deemed to beneficially own (as that term is defined in Rule 13d-3 under the Exchange Act) the shares (including warrant shares) beneficially owned by Icahn Partners. Mr. Meister disclaims beneficial ownership of all such shares (including warrant shares) in the Form 3. | ||
(11) | Includes 1,798,919 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. All of the shares issuable upon exercise of warrants held by this person have been included in the total number of shares beneficially owned for this person notwithstanding the fact that the warrants are not exercisable until January 27, 2006. Based on our review of the Icahn 13D, we believe that as of the date of this prospectus each of CCI Offshore, Icahn Offshore and Mr. Icahn may be deemed to beneficially own (as that term is defined in Rule 13d-3 under the Exchange Act) the shares (including warrant shares) directly held by Icahn Master because such persons are in a position to directly or indirectly determine the investment and voting decisions of Icahn Master. CCI Offshore, Icahn Offshore and Mr. Icahn each disclaim beneficial ownership of such shares for all other purposes. Based on our review of the Form 3 and the information disclosed in the Icahn 13D, we believe that because Mr. Meister is a limited partner of Icahn Onshore and has an interest in the fees, including the performance fees, relating to Icahn Onshore and Icahn Offshore he may be deemed to beneficially own (as that term is defined in Rule 13d-3 under the Exchange Act) the shares (including warrant shares) beneficially owned by Icahn Master. Mr. Meister disclaims beneficial ownership of all such shares (including warrant shares) in the Form 3. | |
(12) | Includes 7,500 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(13) | Includes 22,500 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(14) | Includes 1,500 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(15) | Includes 483,378 shares of common stock issuable upon exercise of warrants held by this person, 417,378 of which will be offered. All of the shares issuable upon exercise of warrants held by this person have been included in the total number of shares beneficially owned for this person notwithstanding the fact that warrants to purchase 378,378 shares are not exercisable until January 27, 2006. We have been advised by this person that North Sound Capital LLC (North Sound Capital) may be deemed the beneficial owner of the shares beneficially owned by this person because North Sound Capital is the managing member of this person and the investment advisor of North Sounds Legacy International Ltd. As the managing member or investment advisor, respectively, of such entities, North Sound Capital has voting and investment control with respect to the shares of common stock held thereby. The ultimate managing member of North Sound Capital is Thomas McAuley. This person holds warrants to purchase 105,000 shares and a warrant to purchase 378,378 shares of common stock that contain provisions that would prohibit this person from exercising these warrants to the extent that upon such exercise this person would beneficially hold more than 9.99% or 4.9%, respectively, of the total number of shares of common stock then issued and outstanding (determined in |
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accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended) unless this person shall have provided us with 61-days notice of this persons waiver of this provision. | ||
(16) | All of the shares this person will beneficially own upon completion of this offering (including shares issuable upon the exercise of warrants) have been registered on the registration statement on Form S-3 (No. 333-117022), as amended, initially filed with the Commission on June 30, 2003. | |
(17) | Includes 1,167,973 shares of common stock issuable upon exercise of warrants held by this person, 1,039,973 of which will be offered. All of the shares issuable upon exercise of warrants held by this person have been included in the total number of shares beneficially owned for this person notwithstanding the fact that warrants to purchase 972,973 shares are not exercisable until January 27, 2006. See also footnote 15 regarding North Sound Capitals beneficial ownership of shares owned by this person. This person holds warrants to purchase 195,000 shares and a warrant to purchase 972,973 shares of common stock that contain provisions that would prohibit this person from exercising these warrants to the extent that upon such exercise this person would beneficially hold more than 9.99% or 4.9%, respectively, of the total number of shares of common stock then issued and outstanding (determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended) unless this person shall have provided us with 61-days notice of this persons waiver of this provision. | |
(18) | All of the shares this person will beneficially own upon completion of this offering (including shares issuable upon the exercise of warrants) have been registered on the registration statement on Form S-3 (No. 333-117022), as amended, initially filed with the Commission on June 30, 2003. | |
(19) | Includes 600 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(20) | Includes 320,414 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(21) | Of the shares this person will beneficially own upon completion of this offering, 167,500 have been registered on the registration statement on Form S-3 (No. 333-117022), as amended, initially filed with the Commission on June 30, 2003. | |
(22) | Includes 1,351,351 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. All of the shares issuable upon exercise of warrants held by this person have been included in the total number of shares beneficially owned for this person notwithstanding the fact that the warrants are not exercisable until January 27, 2006. | |
(23) | Includes 7,500 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(24) | Includes 375,000 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(25) | Includes 300,000 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. | |
(26) | Includes 1,951,300 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. All of the shares issuable upon exercise of warrants held by this person have been included in the total number of shares beneficially owned for this person notwithstanding the fact that the warrants are not |
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exercisable until January 27, 2006. Based on our review of a Schedule 13G filed with the Commission on August 5, 2005 (the Viking 13G) by Viking Global Performance LLC (VGP), Viking Global Investors LP (VGI), Viking Global Equities LP (VGE Global), O. Andreas Halvorsen, Brian T.Olson and David C. Ott, we believe that as of the date of this prospectus each of VGP, VGI and Messrs. Halvorsen, Olson and Ott may be deemed to beneficially own (as that term is defined in Rule 13d-3 under the Exchange Act) the shares (including warrant shares) directly held by VGE III Portfolio Ltd. (VGE Portfolio) because such persons are in a position to directly or indirectly determine the investment and voting decisions of VGE Portfolio. | ||
(27) | Includes 1,832,483 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. All of the shares issuable upon exercise of warrants held by this person have been included in the total number of shares beneficially owned for this person notwithstanding the fact that the warrants are not exercisable until January 27, 2006. Based on our review of the Viking 13G, we believe that as of the date of this prospectus each of VGP, VGI and Messrs. Halvorsen, Olson and Ott may be deemed to beneficially own (as that term is defined in Rule 13d-3 under the Exchange Act) the shares (including warrant shares) directly held by VGE Global because such persons are in a position to directly or indirectly determine the investment and voting decisions of VGE Global. | |
(28) | Includes 750 shares of common stock issuable upon exercise of warrants held by this person, all of which will be offered. |
Within the past three years, none of the selling security holders had any position, office or
other material relationship with us or, to our knowledge, any of our predecessors or affiliates.
PLAN OF DISTRIBUTION
We are registering the shares of common stock covered by this prospectus on behalf of the
selling security holders listed in this prospectus. Sales of shares may be made by selling security
holders, including their respective donees or other successors-in-interest directly to purchasers
or to or through underwriters, broker-dealers or through agents. Sales may be made from time to
time on the American Stock Exchange, any other exchange or market upon which our shares may trade
in the future, in the over-the-counter market or otherwise, at market prices prevailing at the time
of sale, at prices related to market prices, or at negotiated or fixed prices. The shares may be
sold by one or more of, or a combination of, the following:
| a block trade in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction (including crosses in which the same broker acts as agent for both sides of the transaction); | ||
| purchases by a broker-dealer as principal and resale by such broker-dealer, including resales for its account, pursuant to this prospectus; | ||
| ordinary brokerage transactions and transactions in which the broker-dealer solicits purchases; | ||
| through options, swaps or derivatives; | ||
| in privately negotiated transactions; | ||
| in making short sales or in transactions to cover short sales entered into after the date of this prospectus; | ||
| put or call option transactions relating to the shares; or | ||
| any other method permitted by applicable law. |
The selling security holders may effect these transactions by selling shares directly to
purchasers or to or through broker-dealers, which may act as agents or principals. These
broker-dealers may receive compensation in the form of discounts, concessions or commissions from
the selling security holders or the purchasers of shares for whom such broker-dealers may act as
agents or to whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). Each of the selling security holders
has advised us that they have not entered into any agreements, understandings or arrangements with
any underwriters or broker-dealers regarding the sale of their securities.
Each selling security holder will act independently of us in making decisions regarding the
timing, manner and size of each sale of shares of common stock covered by this registration
statement.
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Each of the selling security holders may enter into hedging transactions with broker-dealers
or other financial institutions. In connection with those transactions, the broker-dealers or other
financial institutions may engage in short sales of the shares or of securities convertible into or
exchangeable for the shares in the course of hedging positions they assume with the selling
security holders. Each of the selling security holders may also enter into options or other
transactions with broker-dealers or other financial institutions which require the delivery of
shares offered by this prospectus to those broker-dealers or other financial institutions. The
broker-dealer or other financial institution may then resell the shares pursuant to this prospectus
(as amended or supplemented, if required by applicable law, to reflect those transactions).
Each of the selling security holders and any broker-dealers that act in connection with the
sale of shares may be deemed to be underwriters within the meaning of Section 2(11) of the
Securities Act, and any commissions received by broker-dealers or any profit on the resale of the
shares sold by them while acting as principals may be deemed to be underwriting discounts or
commissions under the Securities Act. Each of the selling security holders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving sales of the shares
against liabilities, including liabilities arising under the Securities Act. We have agreed to
indemnify each of the selling security holders and each selling security holder has agreed,
severally and not jointly, to indemnify us against some liabilities in connection with the offering
of the shares, including liabilities arising under the Securities Act.
Each selling security holder and any other persons participating in a distribution of the
securities covered by this registration statement will be subject to the prospectus delivery
requirements of the Securities Act and will be subject to applicable provisions of the Exchange Act
and the rules and regulations thereunder, including, without limitation, Regulation M, which may
restrict certain activities of, and limit the timing of purchases and sales of securities by,
selling security holders and other persons participating in a distribution of securities.
Furthermore, under Regulation M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and certain other activities with respect to such
securities for a specified period of time prior to the commencement of such distribution, subject
to specified exceptions or exemptions. All of the foregoing may affect the marketability of the
securities offered hereby.
Each of the selling security holders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act rather than under this
prospectus, provided they meet the criteria and conform to the requirements of Rule 144.
Upon being notified by a selling security holder that a material arrangement has been entered
into with a broker-dealer for the sale of shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, we will file a
supplement to this prospectus, if required pursuant to Rule 424(b) under the Securities Act,
disclosing:
| the name of each such selling security holder and of the participating broker-dealer(s); | ||
| the number of shares involved; | ||
| the initial price at which the shares were sold; | ||
| the commissions paid or discounts or concessions allowed to the broker-dealer(s), where applicable; | ||
| that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus; and | ||
| other facts material to the transactions. |
In addition, if required under applicable law or the rules or regulations of the Commission,
we will file a supplement to this prospectus when a selling security holder notifies us that a
donee intends to sell more than 500 shares of common stock.
We are paying all expenses and fees customarily paid by the issuer in connection with the
registration of the shares. Each of the selling security holders will bear all brokerage or
underwriting discounts or commissions paid to broker-dealers and any transfer agent fees in
connection with the sale of the shares.
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Legal Matters
The validity of the issuance of shares of common stock offered hereby will be passed upon for
us by Bingham McCutchen LLP, San Francisco, California. To our knowledge, no attorney at Bingham
McCutchen LLP who has worked on substantive matters for us owns any of our securities.
Experts
Our consolidated balance sheets as of December 31, 2004 and 2003, and the related consolidated
statements of operations, shareholders equity (deficit) and cash flows for the years then ended
and for the period from June 12, 1996 (date of inception) through December 31, 2004, have been
incorporated by reference in this prospectus and in the registration statement in reliance on the
report of J.H. Cohn LLP, independent registered public accounting firm, given upon the authority of
said firm as experts in accounting and auditing. The report of J.H. Cohn LLP notes that the
consolidated financial statements for the period from June 12, 1996 (date of inception) through
December 31, 2001, were audited by other auditors. J.H. Cohn LLPs opinion insofar as it relates
to the period from June 12, 1996 to December 31, 2001, is based solely on the report of these other
auditors.
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23,240,340 SHARES
ADVENTRX PHARMACEUTICALS, INC.
COMMON STOCK
PROSPECTUS
September 8, 2005