Registration No. 333-75636
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CELGENE CORPORATION
(Exact name of Registrant as specified in its charter)
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DELAWARE 86 Morris Avenue 22-2711928
(State or other Summit, New Jersey 07901 (I.R.S. Employer
jurisdiction of (908) 673-9000 Identification No.)
incorporation or
organization)
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
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JOHN W. JACKSON
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
CELGENE CORPORATION
86 MORRIS AVENUE, SUMMIT, NEW JERSEY 07901
(908) 673-9000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
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COPIES OF COMMUNICATIONS TO:
Robert A. Cantone, Esq.
Proskauer Rose LLP
1585 Broadway, New York, New York 10036-8299
(212) 969-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time or at one time after the effective date of this Registration Statement
as determined by the Registrant.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest or interest investment plans, please check the
following box. |_|
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If this Form is a registration statement pursuant to General Instruction
I.D. or a post-effective amendment thereto that shall become effective upon
filing with the Commission pursuant to Rule 462(e) under the Securities Act,
check the following box. |X|
If this Form is a post-effective amendment to a registration statement
filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the
Securities Act, check the following box. |_|
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 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
PROSPECTUS
$500,000,000
CELGENE CORPORATION
COMMON STOCK
DEBT SECURITIES
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Celgene Corporation may offer from time to time common stock and debt securities
separately or together. The securities will have a maximum aggregate offering
price of $500,000,000, in amounts, at prices and on terms determined at the time
of the offering of any such security. The specific terms and amounts of the
securities will be fully described in supplements to this prospectus. Please
read any prospectus supplements and this prospectus carefully before you invest.
This prospectus may not be used to sell securities unless accompanied by a
prospectus supplement.
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Our common stock is traded on the NASDAQ National Market under the symbol
"CELG." On December 27, 2005, the last reported sale price for our common stock
on the NASDAQ National Market was $57.48 per share.
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INVESTING IN OUR COMMON STOCK OR DEBT SECURITIES INVOLVES RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 7.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The securities may be sold directly by us to investors, through agents
designated from time to time or to or through underwriters or dealers. See "Plan
of Distribution." If any underwriters are involved in the sale of any securities
in respect of which this prospectus is being delivered, the names of such
underwriters and any applicable commissions or discounts will be set forth in a
prospectus supplement. The net proceeds we expect to receive from such sale also
will be set forth in a prospectus supplement.
December 30, 2005
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS ....................................................... 1
PROSPECTUS SUMMARY .......................................................... 2
RISK FACTORS ................................................................ 7
FORWARD-LOOKING STATEMENTS .................................................. 16
USE OF PROCEEDS ............................................................. 17
RATIO OF EARNINGS TO FIXED CHARGES .......................................... 18
DESCRIPTION OF CAPITAL STOCK ................................................ 19
DESCRIPTION OF DEBT SECURITIES .............................................. 21
PLAN OF DISTRIBUTION ........................................................ 29
LEGAL MATTERS ............................................................... 30
EXPERTS ..................................................................... 30
WHERE YOU CAN FIND MORE INFORMATION ......................................... 31
INCORPORATION BY REFERENCE .................................................. 32
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ABOUT THIS PROSPECTUS
This prospectus is part of a Registration Statement on Form S-3 that we filed
with the Securities and Exchange Commission utilizing a "shelf" registration
process. Under this shelf process, we may offer any combination of common stock
or debt securities, or either common stock or debt securities only, described in
this prospectus in one or more offerings up to a total amount of $500,000,000.
This prospectus provides you with a general description of the securities we may
offer. Each time we use this prospectus to offer securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. If there is any inconsistency between
the information in this prospectus and any prospectus supplement, you should
rely on the information in that prospectus supplement. Additionally, in the
event there is a material change to information contained in this prospectus, we
will file a post-effective amendment setting forth an explanation of such
change. You should read both this prospectus and any prospectus supplement
together with additional information described below under the heading "Where
You Can Find More Information."
In this prospectus and any prospectus supplement, unless otherwise indicated,
the terms "Celgene," "we," "us" and "our" refer and relate to Celgene
Corporation and its consolidated subsidiaries.
PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information, including the consolidated financial statements and the notes to
the consolidated financial statements and other information, incorporated by
reference in this prospectus.
CELGENE CORPORATION
We are a multi-national integrated biopharmaceutical company, incorporated in
1986 as a Delaware corporation. We are primarily engaged in the discovery,
development and commercialization of innovative therapies designed to treat
cancer and immune-inflammatory-related diseases. Over the last several years,
total revenues have steadily grown led by sales of THALOMID(R) (thalidomide),
our lead product, which is currently marketed for the treatment of erythema
nodosum leprosum, or (ENL), but more widely used off-label for treating multiple
myeloma and other cancers. The sales growth of THALOMID(R) has enabled us to
make substantial investments in research and development, which has advanced our
broad portfolio of drug candidates in our product pipeline, including a pipeline
of IMiDs(R) compounds, which are a class of compounds proprietary to Celgene and
having certain immunomodulatory and other biologically important properties.
We had total revenue of $387.6 million for the nine months ended September 30,
2005 and $377.5 million for the year ended December 31, 2004, and net income of
$59.7 million for the nine months ended September 30, 2005 and $52.8 million for
the year ended December 31, 2004. We had an accumulated deficit of $174.7
million at September 30, 2005 and have since our inception in 1986 financed our
working capital requirements primarily through product sales, private and public
sales of our debt and equity securities, income earned on the investment of the
proceeds from the sale of such securities and revenues from research contracts
and license payments.
On December 27, 2005, the U.S. Food and Drug Administration, or the FDA,
approved REVLIMID(R) (lenalidomide), our most clinically advanced IMiD(R) drug,
for the treatment of patients with transfusion-dependent anemia due to low-or
intermediate-1- risk myelodysplastic syndromes, or MDS, associated with a
deletion 5q cytogenetic abnormality with or without additional cytogenetic
abnormalities. REVLIMID(R) will be distributed through contracted pharmacies
under the RevAssist(sm) program, which is a proprietary risk-management
distribution program tailored specifically to help ensure the safe use of
REVLIMID(R). We believe that REVLIMID(R) has significant commercial sales
potential as a result of the compelling clinical data presented at major medical
meetings, the clinical findings reported in major peer-reviewed medical
publications, and REVLIMID(R)'s multiple regulatory filing strategies. As we
begin to execute our REVLIMID(R) launch activities in the United States, we
believe it has the potential to increase sales growth and profitability by
leveraging our established U.S. hematological-oncology sales force.
We are dedicated to innovative research and development in order to bring new
therapies to market. We are involved in research in several scientific areas
that may deliver proprietary next-generation therapies, such as cellular
signaling biology, immunomodulation and placental stem cell research. The drugs
we develop are designed to treat life-threatening diseases or chronic
debilitating conditions where patients are poorly served by current therapies.
Building on our growing knowledge of the biology behind hematological and solid
tumor cancers, we are investing in a range of innovative therapeutic programs
that are investigating ways to attack the disease source through multiple
mechanisms of action and intracellular pathways.
Celgene products and investigational drug candidates that are targeting a
variety of critical unmet medical needs are as follows:
COMMERCIAL STAGE PROGRAMS
Our commercial programs include pharmaceutical sales of REVLIMID(R),
THALOMID(R), and ALKERAN(R) and sales of FOCALIN(TM) to Novartis Pharma AG, or
Novartis; a licensing agreement with Novartis for FOCALIN XR(TM) and the entire
RITALIN(R) family of drugs; a licensing and product supply agreement with
Pharmion for its sales of thalidomide; and sales of biotherapeutic products and
services and bio-medical devices including: LIFEBANK(TM), BIOVANCE(TM) and
AMBIODRY(TM) through our Cellular Therapeutics subsidiary.
REVLIMID(R) (LENALIDOMIDE): REVLIMID(R) is an oral immunomodulatory drug
recently granted approval by the FDA for the treatment of patients with
transfusion-dependent anemia due to
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low- or intermediate-1-risk myelodysplastic syndromes associated with a deletion
5q cytogenetic abnormality with or without additional cytogenetic abnormalities.
REVLIMID(R) will be distributed through contracted pharmacies under the
RevAssist(sm) program, which is a proprietary risk-management distribution
program tailored specifically for REVLIMID(R). The FDA based its decision to
grant market approval on data from the open label Phase II trial (MDS-003) that
evaluated REVLIMID(R) in transfusion-dependent patients with myelodysplastic
syndromes with deletion 5q chromosomal abnormality - the largest trial in this
patient population reported to date - supported by a recommendation for approval
on September 14, 2005 from the Oncologic Drugs Advisory Committee (ODAC). As a
condition of approval, we agreed to timely complete specified post-marketing
studies relating to the safety and effectiveness of REVLIMID(R) for its approved
conditions of use.
Other efforts directed toward gaining additional regulatory approval of
REVLIMID(R) include the acceptance of our Marketing Authorization Application,
or MAA, on October 26, 2005 by the European Medicines Agency, or EMEA, as a
treatment for the same indication approved in the United States and plans to
submit a Supplemental New Drug Application, or sNDA, to the FDA, and an MAA to
the EMEA as a treatment in multiple myeloma based on clinical data from two
Phase III Special Protocol Assessment, or SPA, trials (MM-009 and MM-010), in
the first quarter of 2006.
REVLIMID(R) continues to be investigated in clinical trials as a potential
treatment for blood cancers that affect more than 700,000 patients worldwide.
The most advanced clinical studies evaluating REVLIMID(R) are Phase III trials -
in the United States (MM-009) and in Europe (MM-010) for previously treated
multiple myeloma patients, and Phase III trials in Europe (MDS-004) in
myelodysplastic syndromes, or MDS. There are more than 50 clinical trials
currently evaluating REVLIMID(R) either alone or in combination with one or more
other therapies in the treatment of a broad range of debilitating diseases,
including multiple myeloma, myelodysplastic syndromes, chronic lymphocytic
leukemia, amyloidosis, myeloid fibrosis and solid tumor cancers. The Southwest
Oncology Group, the Eastern Cooperative Oncology Group and the Cancer and
Leukemia Group B, three of the largest adult cancer clinical trial organizations
in the world, selected REVLIMID(R) for large clinical studies in randomized
controlled Phase III trials designed to evaluate the safety and efficacy of
REVLIMID(R) in multiple myeloma.
THALOMID(R) (THALIDOMIDE): THALOMID(R), which had net product sales totaling
$282.0 million for the nine months ended September 30, 2005 and $308.6 million
for the year ended December 31, 2004, was approved by the FDA in July 1998 for
the treatment of acute cutaneous manifestations of moderate to severe erythema
nodosum leprosum, or ENL, an inflammatory complication of leprosy. Although
leprosy is relatively rare in the United States, the disease afflicts millions
worldwide. ENL occurs in about 30% of leprosy patients and is characterized by
skin lesions, acute inflammation, fever and anorexia. While approved for the
treatment of ENL, THALOMID(R) is widely prescribed for treating multiple myeloma
and other cancers based on clinical results presented at major medical meetings,
clinical findings published in peer-reviewed medical journals and inclusion in
the National Comprehensive Cancer Network, or NCCN, guidelines.
Working with the FDA, we developed S.T.E.P.S.(R), or "SYSTEM FOR THALIDOMIDE
EDUCATION AND PRESCRIBING SAFETY," which is a proprietary strategic
comprehensive education and risk-management distribution program with methods
for the safe and appropriate use of THALOMID(R).
In November 2005, we received an approvable letter from the FDA in response to
our THALOMID(R) sNDA, which we filed in December 2003, for the treatment of
multiple myeloma. The FDA has requested revised product labeling with the
specific indication of newly diagnosed multiple myeloma and updated safety
information, as well as additional patient information to finalize its review.
Multiple myeloma is an incurable disease, and it is the second most common blood
cancer, affecting approximately 50,000 people in the United States. About 14,000
new cases of multiple myeloma are diagnosed each year and there are an estimated
11,000 deaths per year in the United States. THALOMID(R) is under development as
a potential treatment for multiple cancers, and there are more than 100 clinical
studies worldwide examining the potential of this compound as a single agent or
in combination therapy.
ALKERAN(R): In March 2003, we entered into a supply and distribution agreement
with GlaxoSmithKline, or GSK, to distribute, promote and sell in the United
States ALKERAN(R) (melphalan), a therapy approved by the FDA for the palliative
treatment of multiple myeloma and of carcinoma of the ovary. This agreement is
strategically valuable to us because it provides us with an approved oncology
product that complements our drug candidates, REVLIMID(R) and THALOMID(R), both
of which are continuing to demonstrate favorable results in late-stage clinical
trials for the treatment of multiple myeloma. ALKERAN(R) use in combination with
other therapies for the treatment of hematological diseases continues to grow,
driven by clinical data reported at major medical conferences around the world.
Under
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the terms of the agreement, we purchase ALKERAN(R) tablets and ALKERAN(R) for
injection from GSK and distribute the products in the United States under the
Celgene label. The agreement has been extended through March 31, 2009 and is
automatically extendable by successive one-year periods, unless at least one
year prior to the renewal date either party will advise the other party that it
elects not to extend the agreement.
RITALIN(R) FAMILY OF DRUGS: We have a major collaboration with Novartis
concerning the entire RITALIN(R) family of drugs. We discovered and developed
FOCALIN(TM) and FOCALIN XR(TM), using advanced single-isomer chemistry
technology, which are formulated by isolating the active d-isomer of
methylphenidate, which provides favorable tolerability and dosing flexibility at
only half the dose of RITALIN(R). Isomers are any of two or more chemical
substances that are composed of the same elements in the same proportions but
differ in properties because of differences in the arrangement of atoms. On
November 15, 2001, FOCALIN(TM) was approved by the FDA for the treatment of
attention deficit hyperactivity disorder, or ADHD, in children and adolescents.
On May 27, 2005, FOCALIN XR(TM), an extended release version, was approved by
the FDA for the treatment of ADHD in adults, adolescents and children.
We licensed the worldwide rights (excluding Canada) to FOCALIN(TM) and FOCALIN
XR(TM) to Novartis in exchange for milestone payments, a FOCALIN(TM) product
supply agreement and royalties on FOCALIN XR(TM) and the entire RITALIN(R)
family of drugs including RITALIN(R), RITALIN LA(R) and RITALIN SR(R).
PRECLINICAL- AND CLINICAL-STAGE PIPELINE:
Our preclinical- and clinical-stage pipeline of new drug candidates, in addition
to our cell therapies, is highlighted by multiple classes of small molecule,
orally administered therapeutic agents designed to selectively regulate
disease-associated genes and proteins. The drug candidates in our pipeline are
at various stages of preclinical and clinical development. Successful results in
preclinical or Phase I/II clinical studies may not be an accurate predictor of
the ultimate safety or effectiveness of a drug candidate.
o PHASE I CLINICAL TRIALS
If the FDA allows a request to initiate clinical investigations of a new
drug candidate to become effective, Phase I human clinical trials can
begin. These tests usually involve between 20 and 80 healthy volunteers or
patients. The tests study a drug's safety profile, and may include
preliminary determination of a drug candidate's safe dosage range. The
Phase I clinical studies also determine how a drug is absorbed,
distributed, metabolized and excreted by the body, and the duration of its
action.
o PHASE II CLINICAL TRIALS
In Phase II clinical trials, controlled studies are conducted on a limited
number of patients with the targeted disease. An initial evaluation of the
drug's effectiveness on patients is performed and additional information
on the drug's safety and dosage range is obtained.
o PHASE III CLINICAL TRIALS
This phase typically includes controlled multi-center trials and involves
a larger target patient population to ensure that study results are
statistically significant. During the Phase III clinical trials,
physicians monitor patients to determine efficacy and to gather further
information on safety.
IMiDs(R): IMiDs(R) are novel small molecule, orally available compounds that
modulate the immune system and other biologically important targets through
multiple mechanisms of action. We have advanced four IMiDs(R) into development:
REVLIMID(R) (CC-5013), ACTIMID(TM) (CC-4047) and CC-11006 are being evaluated in
human clinical trials and CC-10015 is advancing toward potential clinical
testing.
Our IMiDs(R) class of drug candidates are covered by an extensive and
comprehensive intellectual property estate of U.S. and foreign-issued patents
and pending patent applications including composition-of-matter, use and other
patents and patent applications.
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ACTIMID(TM): is one of the most potent IMiD(R) compounds that we are developing.
ACTIMID(TM) is in Phase II trials to determine its potential safety and efficacy
as an orally available treatment for multiple myeloma and prostate cancer.
ACTIMID(TM) and REVLIMID(R) have different activity profiles which may lead to
their evaluation in different diseases or stages of disease.
CC-11006: is a molecule we have identified as a potential treatment for chronic
inflammatory diseases, many of which have unmet medical needs. CC-11006 entered
Phase I human clinical trials in 2004. Following the completion of Phase I
trials, we will evaluate our development options.
TNF alfa INHIBITORS: Our TNF alfa inhibitors potentially provide an oral
approach for treating chronic inflammatory diseases. Our lead TNF alfa inhibitor
investigational compound is CC-10004. Data from Phase II proof-of-principal
trials support our decision to evaluate CC-10004 in pilot studies based on its
ability to inhibit TNF alfa in serious inflammatory diseases such as psoriatic
arthritis, rheumatoid arthritis and other immune-inflammatory indications.
During 2005, CC-10004 completed Phase II clinical trials in exercise-induced
asthma and psoriasis after successfully completing Phase I testing in healthy
human volunteers. The clinical data demonstrated that CC-10004 is well tolerated
with good bioavailability and pharmacokinetics in humans.
BENZOPYRANS: CC-8490, our lead investigational compound in this category, is in
Phase I clinical trials for glioblastoma, a form of brain cancer, led by
investigators at the National Cancer Institute. In Phase I trials in healthy
human volunteers, CC-8490 has been shown to be well tolerated. Animal studies
have demonstrated that the compound could have an important effect on solid
tumors such as non-small cell lung cancer and colon cancer.
KINASE INHIBITORS: We have multiple target and drug discovery projects underway
in the field of kinase inhibition. Kinases are molecules used by cells to
regulate gene expression and protein production. Our kinase inhibitor platform
includes inhibitors of the c-Jun N-terminal kinase pathway, or JNK. This pathway
has been associated with the regulation of a number of important disease
indications. CC-401, our lead JNK inhibitor, successfully completed a Phase I
trial in healthy volunteers. We are currently evaluating the clinical potential
of CC-401 in acute myelogenous leukemia (AML), a blood cancer, in a Phase II
clinical trial.
LIGASE INHIBITORS: We are conducting extensive discovery research in the field
of ligases, intracellular mechanisms that control the degradation of selected
proteins within cells. We are identifying drug targets and compounds that
regulate ligase pathways with the goal of controlling cellular proliferation and
survival. Such compounds have the potential to be an important new class of
anti-cancer and anti-inflammatory therapeutics.
PLACENTAL STEM CELLS: Stem cell based therapies offer the potential to provide
disease-modifying outcomes for serious diseases which today lack adequate
therapy. At the Cellular Therapeutics subsidiary of Celgene (CCT), we are
researching stem cells derived from the human placenta and umbilical cord. Our
studies of placental stem cells over the past two years have uncovered
biological activities with therapeutic promise. In December 2004, we filed an
investigational new drug application (IND) with the FDA for our initial stem
cell trial in sickle cell anemia. In sickle cell anemia, our research has shown
that our IMiDs(R) can interact with stem cells and modulate them in such a way
that they differentiate into erythrocytes, or red blood cells. We have also
discovered a method of expanding the stem cell population in cord blood, to help
generate the increased number and type of stem cells that may be necessary for
treating patients with cancer and other indications in the future.
CCT has developed proprietary methods for producing placental biomaterials for
organ and tissue repair that include products such as BIOVANCE(TM) and
AMBIODRY(TM). Also, CCT has developed proprietary technology for collecting,
processing and storing placental stem cells with potentially broad therapeutic
applications in cancer, autoimmune, cardiovascular, neurological and other
diseases.
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SIGNIFICANT ALLIANCES
From time to time we enter into strategic alliances with third parties whereby
we either (a) grant rights to certain of our compounds or (b) acquire rights to
compounds owned by other pharmaceutical or biotechnology companies, in exchange
for (1) rights to receive payments or (2) obligations to make payments to the
partnering companies in the form of upfront payments, milestone payments
contingent upon the achievement of pre-determined criteria and/or research and
development funding. Under these arrangements, one of the parties may also
purchase product and pay royalties on product sales. The following are our most
significant alliances:
o NOVARTIS: In April 2000, we entered into an agreement with Novartis in
which we granted to Novartis an exclusive worldwide license (excluding
Canada) to develop and market FOCALIN(TM) (d-methylphenidate, or d- MPH)
and FOCALIN XR(TM), the long-acting drug formulation. We have retained the
exclusive commercial rights to FOCALIN(TM) and FOCALIN XR(TM) for
oncology-related disorders, such as chronic fatigue associated with
chemotherapy. We also granted Novartis rights to all of our related
intellectual property and patents, including new formulations of the
currently marketed RITALIN(R). Under the agreement, we have received
upfront and regulatory achievement milestone payments totaling $55.0
million and are entitled to additional payments upon attainment of certain
other milestone events. We also sell FOCALIN(TM) to Novartis as well as
receive royalties on all of Novartis's FOCALIN(TM) and RITALIN(R) family
of ADHD-related products. The research portion of the agreement ended in
June 2003.
o PHARMION: In November 2001, we licensed to Pharmion Corporation exclusive
rights relating to the development and commercial use of our intellectual
property covering thalidomide. Under the terms of the agreement, we
receive a royalty/license fee of 8% of Pharmion's net thalidomide sales in
the licensed territory. In April 2003, we entered into an amendment to the
agreement whereby Pharmion agreed to provide an aggregate of $8.0 million
in research funding through December 2005 for the further clinical
development of THALOMID(R). Separately in December 2004, following our
acquisition of Penn T Limited, our wholly-owned subsidiary Celgene UK
Manufacturing II Limited, or CUK II, (formerly known as "Penn T Limited")
entered into an amended thalidomide supply agreement with Pharmion whereby
in exchange for a reduction in Pharmion's purchase price of thalidomide to
15.5% of its net sales of thalidomide, we received a one-time payment of
$77.0 million. Under the December 2004 agreement, we also received a
one-time payment of $3.0 million in return for granting license rights to
Pharmion to develop and market thalidomide in additional territories and
eliminating certain of our license termination rights. Under the
agreements, as amended in December 2004, the territory licensed to
Pharmion is for all countries other than the United States, Canada,
Mexico, Japan and all provinces of China, other than Hong Kong. The
agreements with Pharmion terminate upon the ten-year anniversary following
receipt of the first regulatory approval for thalidomide in the United
Kingdom.
Pharmion has also committed to providing funding to support further
clinical development studies of thalidomide. Under these research and
development agreements, Pharmion is required to pay us an additional $1.2
million during the three months ended December 31, 2005 and $2.7 million
in each of 2006 and 2007.
On December 29, 2005, we held 1,939,600 shares of Pharmion common stock
received in connection with the conversion of a five-year Senior
Convertible Promissory Note purchased in April 2003 under a Securities
Purchase Agreement with Pharmion and the exercise of warrants received in
connection with the November 2001 thalidomide license and April 2003
Securities Purchase Agreement.
o GLAXOSMITHKLINE: In March 2003, we entered into a supply and distribution
agreement with GSK to distribute, promote and sell ALKERAN(R) (melphalan),
a therapy approved by the FDA for the palliative treatment of multiple
myeloma and carcinoma of the ovary. Under the terms of the agreement, we
purchase ALKERAN(R) tablets and ALKERAN(R) for infusion from GSK and
distribute the products in the United States under the Celgene label. The
agreement requires us to purchase certain minimum quantities each year
under a take-or-pay arrangement. The agreement has been extended through
March 31, 2009. The agreement is automatically extendable by successive
one-year periods, unless at least one year prior to the renewal date,
either party advises the other party that it elects not to extend the
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agreement. On December 29, 2005, the remaining minimum purchase
requirements under the agreement totaled $102.0 million, consisting of
$13.7 million from the initial agreement and the following subsequent
extensions:
o April 1, 2006 - December 31, 2006 $21,000,000
o January 1, 2007 - December 31, 2007 $29,050,000
o January 1, 2008 - December 31, 2008 $30,525,000
o January 1, 2009 - March 31, 2009 $7,725,000
Our principal executive offices are located at 86 Morris Avenue, Summit, New
Jersey 07901, and our telephone number is (908) 673-9000. Additional information
regarding us is set forth in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2004 (which is incorporated by reference in this prospectus).
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS, AS WELL AS THE OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS OR ANY SUPPLEMENTAL PROSPECTUS HERETO
OR INCORPORATED HEREIN BY REFERENCE IN THIS PROSPECTUS, BEFORE PURCHASING ANY OF
OUR COMMON STOCK OR DEBT SECURITIES.
ALTHOUGH WE ARE CURRENTLY PROFITABLE, WE HAVE A HISTORY OF OPERATING LOSSES AND
AN ACCUMULATED DEFICIT.
For the nine months ended September 30, 2005, we posted net income of $59.7
million. For the years ended December 31, 2004 and December 31, 2003, we posted
net income of $52.8 million and $25.7 million, respectively. Prior to 2003, we
had sustained losses in each year since our incorporation in 1986. In addition,
we had an accumulated deficit of $174.7 million at September 30, 2005 compared
with $234.4 million at December 31, 2004. We expect to make substantial
expenditures to further develop and commercialize our products. We also expect
that our rate of spending will accelerate as the result of increased clinical
trial costs and expenses associated with regulatory approval and
commercialization of products now in development and products discovered,
licensed or acquired by us in the future.
WE MAY EXPERIENCE SIGNIFICANT FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS.
We have historically experienced, and expect to continue for the foreseeable
future to experience, significant fluctuations in our quarterly operating
results. These fluctuations are due to a number of factors, many of which are
outside our control, and may result in volatility of our stock price. Future
operating results will depend on many factors, including:
o demand for our products;
o regulatory approvals for our products;
o the timing and level of research and development and sales and marketing,
including product launch, costs;
o the timing and level of reimbursement from third-party payors for our
products;
o the timing of the introduction and market acceptance of new products by us
or competing companies;
o the development or expansion of business infrastructure in new clinical
and geographic markets;
o the acquisition of new products and companies;
o tax rates in the jurisdictions in which we operate;
o the timing and recognition of certain research and development milestones
and license fees; and
o our ability to control our costs.
IF WE ARE UNSUCCESSFUL IN DEVELOPING AND COMMERCIALIZING OUR PRODUCTS, OUR
BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE MATERIALLY
ADVERSELY AFFECTED WHICH COULD HAVE A NEGATIVE IMPACT ON THE VALUE OF OUR
SECURITIES.
Many of our products and processes are in the early or mid-stages of research
and development and will require the commitment of substantial financial
resources, extensive research, development, preclinical testing, clinical
trials, manufacturing scale-up and regulatory approval prior to being ready for
sale. With the exception of REVLIMID(R), THALOMID(R), ALKERAN(R), FOCALIN(TM)
and FOCALIN XR(TM) (the extended release version) and AMBIODRY(TM), all of our
other product candidates will require further development, clinical testing and
regulatory approvals before initial commercial marketing in the United States
and internationally.
7
Moreover, REVLIMID(R) requires further preclinical and clinical testing as a
condition of approval and all of our commercially available products will
require further development, clinical testing and regulatory approvals as we
seek approvals in new indications and geographic markets. If it becomes too
expensive to sustain our present commitment of resources on a long-term basis,
we will be unable to continue certain necessary research and development
activities. Furthermore, we cannot be certain that our clinical testing will
render satisfactory results, or that we will receive required regulatory
approvals for our new products or new indications. If any of our products, even
if developed and approved, cannot be successfully commercialized, our business,
financial condition and results of operations could be materially adversely
affected which could have a negative impact on the value of our common stock or
debt securities obligations.
DURING THE NEXT SEVERAL YEARS, WE WILL BE VERY DEPENDENT ON THE COMMERCIAL
SUCCESS OF REVLIMID(R), THALOMID(R), ALKERAN(R), AND FOCALIN XR(TM).
At our present and anticipated level of operations, we may not be able to
maintain profitability without continued growth in our revenues. The growth of
our business during the next several years will be largely dependent on the
commercial success of REVLIMID(R) and our other products. REVLIMID(R) was
approved by the FDA on December 27, 2005 for the treatment of certain
myelodysplastic syndromes, or MDS associated with a deletion 5q cytogenetic
abnormality. REVLIMID(R) will be distributed through contracted pharmacies under
the RevAssist(sm) program, which is a proprietary risk-management distribution
program tailored specifically to help ensure the safe use of REVLIMID(R). We do
not have long-term data on the use of the product and cannot predict whether
REVLIMID(R) will gain widespread acceptance, which will mostly depend on the
acceptance of regulators, physicians, patients and other key opinion leaders as
a relatively safe and effective drug that has certain advantages as compared to
existing or future therapies. In addition, some of our products compete with one
another as therapies designed to treat cancer. For example, market acceptance of
REVLIMID(R) may result to the detriment of THALOMID(R) and ALKERAN(R). We are
also seeking to market REVLIMID(R) in Europe as well as for other indications in
the United States. A delay in gaining the requisite regulatory approvals could
negatively impact our growth plans and the value of our common stock or debt
securities obligations.
THALOMID(R) is currently approved as a therapy for the treatment of ENL.
However, the market for the use of THALOMID(R) in patients suffering from ENL is
relatively small and we are dependent on revenues generated from its off-label
use in treating multiple myeloma and other forms of cancer. We have filed an
sNDA with the FDA seeking to market THALOMID(R) as a treatment in multiple
myeloma and are awaiting the FDA's response. If THALOMID(R) does not receive
market approval, we may not be able to maintain its market acceptance over time.
In addition, if adverse experiences are reported in connection with the use of
THALOMID(R) by patients, this could undermine physician and patient comfort with
the product, could limit the commercial success of the product and could even
impact the acceptance of our other products, including REVLIMID(R). Also, we are
dependent upon sales of ALKERAN(R), which we license from GSK, and royalties
based on Novartis' sales of FOCALIN XR(TM), which we cannot directly impact.
Our revenues and profits would be negatively impacted if generic versions of any
of these products were to be approved and launched.
WE FACE THE RISK OF PRODUCT LIABILITY CLAIMS.
We may be subject to a variety of product liability or other claims based on
allegations that the use of our technology or products has resulted in adverse
effects, whether by participants in our clinical trials, by patients using our
products or by other persons exposed to our products. Thalidomide, when used by
pregnant women, has resulted in serious birth defects. Therefore, necessary and
strict precautions must be taken by physicians prescribing the drug and
pharmacies dispensing the drugs to women with childbearing potential. These
precautions may not be observed in all cases or, if observed, may not be
effective. Use of thalidomide has also been associated, in a limited number of
cases, with other side effects, including nerve damage. Although we have product
liability insurance that we believe is sufficient, we may be unable to maintain
existing coverage or obtain additional coverage on commercially reasonable terms
if required, or our coverage may be inadequate to protect us in the event of a
multitude of claims being asserted against us. Our obligation to defend against
or pay any product liability or other claim may be expensive and divert the
efforts of our management and technical personnel.
IF OUR PRODUCTS ARE NOT ACCEPTED BY THE MARKET, DEMAND FOR OUR PRODUCTS WILL
DETERIORATE OR NOT MATERIALIZE AT ALL.
It is necessary that our and our distribution partners' products, including
REVLIMID(R), THALOMID(R), ALKERAN(R), FOCALIN(TM) and FOCALIN XR(TM), achieve
and maintain market acceptance. A number of factors
8
can render the degree of market acceptance of our products uncertain, including
the products' efficacy, safety and advantages, if any, over competing products,
as well as the reimbursement policies of third-party payors, such as government
and private insurance plans. In particular, thalidomide, when used by pregnant
women, has resulted in serious birth defects, and the negative history
associated with thalidomide and birth defects may decrease the market acceptance
of THALOMID(R). In addition, the products that we are attempting to develop
through our Celgene Cellular Therapeutics subsidiary may represent substantial
departures from established treatment methods and will compete with a number of
traditional drugs and therapies which are now, or may be in the future,
manufactured and marketed by major pharmaceutical and biopharmaceutical
companies. Furthermore, public attitudes may be influenced by claims that stem
cell therapy is unsafe, and stem cell therapy may not gain the acceptance of the
public or the medical community. If our products are not accepted by the market,
demand for our products will deteriorate or not materialize at all.
WE HAVE NO COMMERCIAL MANUFACTURING FACILITIES AND IF THE THIRD-PARTY
MANUFACTURERS UPON WHOM WE RELY FAIL TO PRODUCE ON A TIMELY BASIS THE RAW
MATERIALS OR FINISHED PRODUCTS IN THE VOLUMES THAT WE REQUIRE OR FAIL TO MEET
QUALITY STANDARDS AND MAINTAIN NECESSARY LICENSURE FROM REGULATORY AUTHORITIES,
WE MAY BE UNABLE TO MEET DEMAND FOR OUR PRODUCTS, POTENTIALLY RESULTING IN LOST
REVENUES.
We do not currently manufacture any of our products on a commercial scale and
have contracted with third-party manufacturers to supply the raw materials and
finished products to meet our needs. Although a site has been purchased in
Neuchatel, Switzerland and we are constructing a drug product manufacturing
facility, we intend to continue to utilize outside manufacturers as needed to
produce certain of our products on a commercial scale.
The active pharmaceutical ingredient, or API, for THALOMID(R) is manufactured by
Eagle Picher Pharmaceutical Services, a Division of Eagle-Picher Incorporated,
which has filed to reorganize under Chapter 11 of the Bankruptcy Code. We
currently have adequate supplies of API for THALOMID(R) on hand to support our
projected long-term requirements and do not believe that the Eagle-Picher
Chapter 11 bankruptcy filing will result in any supply disruptions for the
foreseeable future. We rely on two drug product manufacturers, Penn
Pharmaceuticals Services Limited (PPSL) and Institute of Drug Technology
Australia Limited for the formulation and encapsulation of the finished dosage
form of THALOMID(R) capsules, and on one contract packager, Sharp Corporation,
for the packaging of the final product.
The API for FOCALIN(TM) is currently obtained from two suppliers, Johnson
Matthey Inc. and Seigfried USA, Inc., and we rely on a single manufacturer,
Mikart, Inc., for the tableting and packaging of FOCALIN(TM) finished product.
We obtain the API for FOCALIN XR(TM) from Johnson Matthey Inc., which in turn is
supplied to Novartis for the manufacture of FOCALIN XR(TM) finished product.
We have entered into an agreement with Evotec OAI Limited for the supply of
REVLIMID(R) API, and have contracted with OSG Norwich Pharmaceuticals and PPSL
for the manufacture of REVLIMID(R) finished product.
The FDA requires that all suppliers of pharmaceutical bulk material and all
manufacturers of pharmaceuticals for sale in or from the United States achieve
and maintain compliance with the FDA's current Good Manufacturing Practices
(cGMP) regulations and guidelines. Failure of our third-party manufacturers to
comply with applicable regulations could result in sanctions being imposed on
them or us, including fines, injunctions, civil penalties, disgorgement,
suspension or withdrawal of approvals, license revocation, seizures or recalls
of products, operating restrictions and criminal prosecutions, any of which
could significantly and adversely affect supplies of our products. In addition,
before any product batch produced by our manufacturers can be shipped, it must
conform to release specifications pre-approved by regulators for the content of
the pharmaceutical product. If the operations of one or more of our
manufacturers were to become unavailable for any reason, any required FDA review
and approval of the operations of an alternative supplier could cause a delay in
the manufacture of our products. If our outside manufacturers do not meet our
requirements for quality, quantity or timeliness, or do not achieve and maintain
compliance with all applicable regulations, demand for our products or our
ability to continue supplying such products could substantially decline.
WE HAVE LIMITED MARKETING AND DISTRIBUTION CAPABILITIES.
Although we have a 179-person U.S. pharmaceutical commercial organization to
support our products, we may be required to seek one or more corporate partners
to provide marketing services with respect to certain of our products.
9
Any delay in securing these resources could substantially delay or curtail the
marketing of these products. We have contracted with Ivers Lee Corporation,
d/b/a Sharp, a specialty distributor, to distribute THALOMID(R) and REVLIMID(R).
If Sharp does not perform its obligations, our ability to distribute THALOMID(R)
may be severely restricted.
WE RECEIVE SIGNIFICANT REVENUES FROM COLLABORATIONS AND MAY BE DEPENDENT ON
COLLABORATIONS AND LICENSES WITH THIRD PARTIES.
Our ability to fully commercialize our preclinical and clinical-stage pipeline,
if developed, may depend to some extent upon our entering into collaborations
with other pharmaceutical and biopharmaceutical companies with the requisite
experience and financial and other resources to obtain regulatory approvals and
to manufacture and market such products. Our collaborations and licenses include
an exclusive license (excluding Canada) to Novartis for the development and
commercialization of FOCALIN(TM) and FOCALIN XR(TM); an agreement with Pharmion
Corporation to expand the THALOMID(R) franchise internationally; and an
agreement with GSK enabling us to distribute, promote and sell ALKERAN(R). Our
present and future arrangements may be jeopardized if any or all of the
following occur:
o we are not able to enter into additional joint ventures or other
arrangements on acceptable terms, if at all;
o our joint ventures or other arrangements do not result in a compatible
working relationship;
o our partners change their business priorities, fail to perform as agreed
upon or experience financial difficulties that disrupt necessary business
operations;
o our joint ventures or other arrangements do not lead to the successful
development and commercialization of any products;
o we are unable to obtain or maintain proprietary rights or licenses to
technology or products developed in connection with our joint ventures or
other arrangements; or
o we are unable to preserve the confidentiality of any proprietary rights or
information developed in connection with our joint ventures or other
arrangements.
WE MAY CONTINUE TO MAKE STRATEGIC ACQUISITIONS OF OTHER COMPANIES BUSINESSES OR
PRODUCTS AND THESE ACQUISITIONS INTRODUCE SIGNIFICANT RISKS AND UNCERTAINTIES,
INCLUDING RISKS RELATED TO INTEGRATING THE ACQUIRED BUSINESSES AND PRODUCTS AND
TO ACHIEVING BENEFITS FROM THE ACQUISITIONS.
In order to take advantage of external growth opportunities, we have made, and
may continue to make, strategic acquisitions that involve significant risks and
uncertainties. These risks and uncertainties include: (1) the difficulty in
integrating newly-acquired businesses and operations in an efficient and
effective manner; (2) the challenges in achieving strategic objectives, cost
savings and other benefits from acquisitions; (3) the risk that the technologies
acquired do not evolve as anticipated; (4) contracts, agreements, assets and
liabilities are not as represented; (5) the potential loss of key employees of
the acquired businesses; (6) the risk of diverting the attention of senior
management from our other operations; (7) the risks of entering new markets in
which we have limited experience; (8) difficulties in expanding information
technology systems and other business processes to accommodate the acquired
businesses; and (9) future impairments of goodwill and other intangibles of an
acquired business.
Many acquisition candidates in the biopharmaceuticals industry carry high price
to earnings valuations. As a result, acquiring a business that has a high
valuation may be dilutive to our earnings, especially when the acquired business
has little or no revenue.
Key employees of acquired businesses may receive substantial value in connection
with a transaction in the form of change-in-control agreements, acceleration of
stock options and the lifting of restrictions on other equity-based compensation
rights. To retain such employees and integrate the acquired business, we may
offer additional, sometimes costly, retention incentives.
THE HAZARDOUS MATERIALS WE USE IN OUR RESEARCH, DEVELOPMENT AND OTHER BUSINESS
OPERATIONS COULD RESULT IN SIGNIFICANT LIABILITIES WHICH COULD EXCEED OUR
INSURANCE COVERAGE AND FINANCIAL RESOURCES.
10
We use certain hazardous materials in our research, development and general
business activities. While we believe we are currently in substantial compliance
with the federal, state and local laws and regulations governing the use of
these materials, we cannot be certain that accidental injury or contamination
will not occur. Any such accident or contamination could result in substantial
liabilities that could exceed our insurance coverage and financial resources.
Additionally, the cost of compliance with environmental and safety laws and
regulations may increase in the future, requiring us to expend more financial
resources either in compliance or in purchasing supplemental insurance coverage.
THE PHARMACEUTICAL INDUSTRY IS SUBJECT TO EXTENSIVE GOVERNMENT REGULATION WHICH
PRESENTS NUMEROUS RISKS TO US.
The discovery, preclinical development, clinical trials, manufacturing,
marketing and labeling of pharmaceuticals and biologics are all subject to
extensive regulation by numerous governmental authorities and agencies in the
United States and other countries. If we or our contractors and collaborators
are delayed in receiving, or are unable to obtain at all, necessary governmental
approvals, we will be unable to effectively market our products.
The testing, marketing and manufacturing of our products require regulatory
approval, including approval from the FDA and, in some cases, from the U.S.
Environmental Protection Agency or governmental authorities outside of the
United States that perform roles similar to those of the FDA and EPA. Certain of
our pharmaceutical products, such as FOCALIN(TM), fall under the Controlled
Substances Act of 1970 that requires authorization by the U.S. Drug Enforcement
Agency, or DEA, of the U.S. Department of Justice in order to handle and
distribute these products. The regulatory approval process presents several
risks to us:
o In general, preclinical tests and clinical trials can take many years, and
require the expenditure of substantial resources, and the data obtained
from these tests and trials can be susceptible to varying interpretation
that could delay, limit or prevent regulatory approval;
o Delays or rejections may be encountered during any stage of the regulatory
process based upon the failure of the clinical or other data to
demonstrate compliance with, or upon the failure of the product to meet, a
regulatory agency's requirements for safety, efficacy and quality or, in
the case of a product seeking an orphan drug indication, because another
designee received approval first;
o Requirements for approval may become more stringent due to changes in
regulatory agency policy, or the adoption of new regulations or
legislation;
o The scope of any regulatory approval, when obtained, may significantly
limit the indicated uses for which a product may be marketed and
reimbursed and may impose significant limitations in the nature of
warnings, precautions and contra-indications that could materially affect
the sales and profitability of the drug;
o Pricing and reimbursement controls;
o Approved drugs, as well as their manufacturers, are subject to continuing
and ongoing review, and discovery of previously unknown problems with
these products or the failure to adhere to manufacturing or quality
control requirements may result in restrictions on their manufacture, sale
or use or in their withdrawal from the market;
o Regulatory authorities and agencies may promulgate additional regulations
restricting the sale of our existing and proposed products;
o Once a product receives marketing approval, the FDA may not permit us to
market that product for broader or different applications, or may not
grant us approval with respect to separate product applications that
represent extensions of our basic technology. In addition, the FDA may
withdraw or modify existing approvals in a significant manner or
promulgate additional regulations restricting the sale of our present or
proposed products;
o Products, such as REVLIMID(R), that are subject to accelerated approval
can be subject to an expedited withdrawal if the post-marketing study
commitments are not completed with due diligence, the post-marketing
restrictions are not adhered to or are shown to be inadequate to assure
the safe use of the drug, or evidence demonstrates that the drug is not
shown to be safe and effective under its conditions of use. Additionally,
promotional materials for such drugs are subject to enhanced surveillance,
including pre-approval review of all promotional materials used within
120 days following marketing approval and a requirement for the
submissions 30 days prior to initial dissemination of all promotional
materials disseminated after 120 days following marketing approval.
o Our labeling and promotional activities relating to our products are
regulated by the FDA and state regulatory agencies and, in some
circumstances, by the DEA, and are subject to associated risks. If we fail
to comply with FDA regulations prohibiting promotion of off-label uses and
the promotion of products for which marketing clearance has not been
obtained, the FDA, or the Office of the Inspector General of the
11
Department of Health and Human Services or the state Attorneys General
could bring an enforcement action against us that could inhibit our
marketing capabilities as well as result in significant penalties.
The FDA's Center for Biologics Evaluation and Research currently regulates under
21 CFR Parts 1270 and 1271 human tissue intended for transplantation that is
recovered, processed, stored or distributed by methods that do not change tissue
function or characteristics and that is not currently regulated as a human drug,
biological product or medical device. Certain stem cell activities fall within
this category. Part 1270 requires tissue establishments to screen and test
donors, to prepare and follow written procedures for the prevention of the
spread of communicable disease and to maintain records. It also provides for
inspection by the FDA of tissue establishments. Part 1271 requires human cells,
tissue and cellular and tissue-based product establishments (HCT/Ps) to register
with the agency and list their HCT/Ps.
Currently, we are required to be, and are, licensed to operate in New York and
New Jersey, two of the states in which we currently collect placentas and
umbilical cord blood for our allogeneic and private stem cell banking
businesses. If other states adopt similar licensing requirements, we would need
to obtain such licenses to continue operating. If we are delayed in receiving,
or are unable to obtain at all, necessary licenses, we will be unable to provide
services in those states and this would impact negatively on our revenues.
WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY AND OUR PRODUCTS MAY BE
SUBJECT TO GENERIC COMPETITION.
Our success depends, in part, on our ability to obtain and enforce patents,
protect trade secrets, obtain licenses to technology owned by third parties and
to conduct our business without infringing upon the proprietary rights of
others. The patent positions of pharmaceutical and biopharmaceutical firms,
including ours, can be uncertain and involve complex legal and factual
questions.
Under the current U.S. patent laws, patent applications in the United States are
maintained in secrecy from four to eighteen months, and publication of
discoveries in the scientific and patent literature often lag behind actual
discoveries. Thus, we may discover sometime in the future that we, or the third
parties from whom we have licensed patents or patent applications, were not the
first to make and/or file the inventions covered by the patents and patent
applications in which we have or seek rights. In the event that a third party
has also filed a patent application for any of the inventions claimed in our
patents or patent applications, or those we have licensed-in, we could become
involved in an interference proceeding declared by the U.S. Patent and Trademark
Office to determine priority of invention or an opposition proceeding in other
places such as Europe. Such an interference or opposition could result in the
loss of an issued U.S. or foreign patent, respectively, or loss of any
opportunity to secure U.S. patent protection for that invention. Even if the
eventual outcome is favorable to us, such proceedings could result in
substantial cost and delay to us and limit the scope of the claimed subject
matter.
In addition, the coverage sought in a patent application may not be obtained or
may be significantly reduced before the patent is issued. Consequently, if our
pending applications, or pending application that we have licensed-in from
third parties, do not result in the issuance of patents or if any patents that
are issued do not provide significant proprietary protection or commercial
advantage, our ability to sustain the necessary level of intellectual property
rights upon which our success depends may be restricted.
Moreover, different countries have different procedures for obtaining patents,
and patents issued in different countries provide different degrees of
protection against the use of a patented invention by others. Therefore, if the
issuance to us or our licensors, in a given country, of a patent covering an
invention is not followed by the issuance in other countries of patents covering
the same invention, or if any judicial interpretation of the validity,
enforceability or scope of the claims in a patent issued in one country is not
similar to the interpretation given to the corresponding patent issued in
another country, our ability to protect our intellectual property in other
countries may be limited.
Furthermore, even if our patents, or those we have licensed-in, are issued, our
competitors may still challenge the scope, validity or enforceability of such
patents in court, requiring us to engage in complex, lengthy and costly
litigation. Alternatively, our competitors may be able to design around such
patents and compete with us using the resulting alternative technology. If any
of our issued or licensed patents are infringed, we may not be successful in
enforcing our or our licensor's intellectual property rights or defending the
validity or enforceability of our issued patents and subsequently not be able to
develop or market applicable products exclusively.
12
FDA regulatory exclusivity for thalidomide has expired so that generic drug
companies can file an abbreviated new drug application, or ANDA, to seek
approval to market thalidomide in the United States. However, such an ANDA filer
will need to challenge the validity or enforceability of our United States
patents relating to our S.T.E.P.S.(R) program or to demonstrate that they do not
use an infringing risk management program. We cannot predict whether an ANDA
challenge to our patents will be made, nor can we predict whether our
S.T.E.P.S.(R) patents can be circumscribed or invalidated or otherwise rendered
unenforceable. However, if such an ANDA was filed and approved by the FDA, and
the generic company was successful in challenging our patents listed in the
Orange Book for THALOMID(R), the generic company would be permitted to sell a
generic thalidomide product.
Further, we rely upon unpatented proprietary and trade secret technology that we
try to protect, in part, by confidentiality agreements with our collaborative
partners, employees, consultants, outside scientific collaborators, sponsored
researchers and other advisors. If these agreements are breached, we may not
have adequate remedies for any such breach. Despite precautions taken by us,
others may obtain access to or independently develop our proprietary technology
or such technology may be found to be non-proprietary or not a trade secret.
Our right to practice the inventions claimed in certain patents that relate to
THALOMID(R) arises under licenses granted to us by others, including The
Rockefeller University and Children's Medical Center Corporation, or CMCC. In
addition to these patents, which relate to thalidomide, we have also licensed
from CMCC certain patents relating to thalidomide analogs. In December 2002, we
entered into an exclusive license agreement with CMCC and EntreMed Inc. pursuant
to which CMCC exclusively licensed to us certain patents and patent applications
that relate to analogs, metabolites, precursors and hydrolysis products of
thalidomide, and all stereoisomers thereof. Our license under the December 2002
agreement is worldwide and royalty-bearing, and we have complete control over
the prosecution of the licensed thalidomide analog patent rights. Under this
December 2002 agreement, we are obligated to comply with certain milestones, for
a REVLIMID(R) approval and royalties with respect to sales of REVLIMID(R). The
December 2002 agreement also grants us an option for a certain time period, to
inventions in the field of thalidomide analogs that may be developed at CMCC in
the laboratory of Dr. Robert D'Amato, pursuant to the terms and conditions of a
separate Sponsored Research Agreement negotiated between CMCC and us.
Further, while we believe these confidentiality agreements and license
agreements to be valid and enforceable, our rights under these agreements may
not continue or disputes concerning these agreements may arise. If any of the
foregoing should occur, we may be unable to rely upon our unpatented proprietary
and trade secret technology, or we may be unable to use the third-party
proprietary technology we have licensed-in, either of which may prevent or
hamper us from successfully pursuing our business.
On August 19, 2004, we, together with our exclusive licensee Novartis, filed an
infringement action in the United States District Court of New Jersey against
Teva Pharmaceuticals USA, Inc., in response to notices of Paragraph IV
certifications made by Teva in connection with the filing of an ANDA for
FOCALIN(TM). The notification letters contend that United States Patent Nos.
5,908,850, and 6,355,656, or '656 patent, are invalid. The '656 patent is
currently the subject of reexamination proceedings in the United States Patent
and Trademark Office. After the suit was filed, Novartis listed another patent,
United States Patent No. 6,528,530, or '530 patent, in the Orange Book in
association with the FOCALIN(TM) NDA. The '530 patent is currently not part of
the patent infringement action against Teva. This case does not involve an ANDA
for RITALIN LA(R) or FOCALIN XR(TM) as such an ANDA has not been filed.
Recently, Teva amended its answer to contend that the '850 patent was not
infringed by the filing of its ANDA, and that the '850 patent is not enforceable
due to an allegation of inequitable conduct. Fact discovery is set to expire on
February 28, 2006. No trial date has been set. If successful, Teva will be
permitted to sell a generic version of FOCALIN(TM), which could significantly
reduce our sales of FOCALIN(TM) to Novartis.
It is also possible that third-party patent applications and patents could issue
with claims that broadly cover certain aspects of our business or of the subject
matter claimed in the patents or patent applications owned or optioned by us or
licensed to us, which may limit our ability to conduct our business or to
practice under our patents, and may impede our efforts to obtain meaningful
patent protection of our own. If patents are issued to third parties that
contain competitive or conflicting claims, we may be legally prohibited from
pursuing research, development or commercialization of potential products or be
required to obtain licenses to these patents or to develop or obtain alternative
technology. We may be legally prohibited from using patented technology, may not
be able to obtain any license to the patents and technologies of third parties
on acceptable terms, if at all, or may not be able to obtain or develop
alternative technologies. Consequently, if we cannot successfully defend against
any patent infringement suit that may be brought against us by a third-party, we
may lose the ability to continue to conduct our business as
13
we presently do, or to practice certain subject matter delineated by patent
claims that we have exclusive rights to, whether by ownership or by license, and
that may have a material adverse effect on our business.
We rely upon trademarks and service marks to protect our rights to the
intellectual property used in our business. On October 29, 2003, we filed a
lawsuit against Centocor, Inc. to prevent Centocor's use of the term "I.M.I.D.s"
in connection with Centocor's products, which use, we believe, is likely to
cause confusion with our IMiDs(R) registered trademark for compounds being
developed by us to treat cancer and inflammatory diseases. If we are not
successful in this suit, it may be necessary for us to adopt a different
trademark for that class of compounds and thereby lose the value we believe we
have built in the "IMiDs(R)" mark.
On January 15, 2004, an opposition proceeding was brought by Celltech R&D Ltd.
against granted European Patent 0728143 which we have licensed from the
University of California relating to JNK 1 and JNK 2 polypeptides. This
proceeding is directed solely to our claims for JNK 2 and not JNK 1. An oral
hearing occurred in October of 2005 in which the European Patent Office advised
us of its intent to revoke certain of our claims. We await a written decision.
The written decision may be appealed. We do have other JNK1 and JNK European
patent application claims pending.
THE PHARMACEUTICAL AND BIOTECH INDUSTRY IS HIGHLY COMPETITIVE AND SUBJECT TO
RAPID AND SIGNIFICANT TECHNOLOGICAL CHANGE.
The pharmaceutical industry in which we operate is highly competitive and
subject to rapid and significant technological change. Our present and potential
competitors include major pharmaceutical and biotechnology companies, as well as
specialty pharmaceutical firms, including but not limited to:
o Amgen, which potentially competes with our TNF alfa and kinase inhibitors;
o Novartis, which potentially competes with our IMiDs(R) and kinase
programs;
o Bristol Myers Squibb Co., which potentially competes in clinical trials
with our IMiDs(R) and TNF alfa inhibitors;
o Genentech, Inc., which potentially competes in clinical trials with our
IMiDs(R) and TNF alfa inhibitors;
o AstraZeneca plc, which potentially competes in clinical trials with our
IMiDs(R) and TNF alfa inhibitors;
o Millennium Pharmaceuticals, Inc., which potentially competes in clinical
trials with our IMiDs(R) and TNF alfa inhibitors as well as with
THALOMID(R);
o Vertex Pharmaceuticals Inc. and Pfizer Inc., which potentially compete in
clinical trials with our kinase inhibitors; and
o Biogen IDEC Inc. and Genzyme Corporations, both of which are generally
developing drugs that address the oncology and immunology markets.
Many of these companies have considerably greater financial, technical and
marketing resources than we. We also experience competition from universities
and other research institutions, and in some instances, we compete with others
in acquiring technology from these sources. The pharmaceutical industry has
undergone, and is expected to continue to undergo, rapid and significant
technological change, and we expect competition to intensify as technical
advances in the field are made and become more widely known. The development of
products or processes by our competitors with significant advantages over those
that we are seeking to develop could cause the marketability of our products to
stagnate or decline.
SALES OF OUR PRODUCTS ARE DEPENDENT ON THIRD-PARTY REIMBURSEMENT.
Sales of our products will depend, in part, on the extent to which the costs of
our products will be paid by health maintenance, managed care, pharmacy benefit
and similar health care management organizations, or reimbursed by government
health administration authorities, private health coverage insurers and other
third-party payors. These
14
health care management organizations and third-party payors are increasingly
challenging the prices charged for medical products and services. Additionally,
the containment of health care costs has become a priority of federal and state
governments, and the prices of drugs have been a focus in this effort. If these
organizations and third-party payors do not consider our products to be
cost-effective or competitive with other available therapies, they may not
reimburse providers or consumers of our products or, if they do, the level of
reimbursement may not be sufficient to allow us to sell our products on a
profitable basis.
WE HAVE GROWN RAPIDLY, AND IF WE FAIL TO ADEQUATELY MANAGE THAT GROWTH OUR
BUSINESS COULD BE ADVERSELY IMPACTED.
We have an aggressive growth plan that has included substantial and increasing
investments in research and development, sales and marketing and facilities. We
plan to continue to grow and our plan has a number of risks, some of which we
cannot control. For example:
o we will need to generate higher revenues to cover a higher level of
operating expenses, and our ability to do so may depend on factors that we
do not control;
o we will need to assimilate new staff members;
o we will need to manage complexities associated with a larger and faster
growing organization; and
o we will need to accurately anticipate demand for the products we
manufacture and maintain adequate manufacturing capacity, and our ability
to do so may depend on factors that we do not control.
THE PRICE OF OUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY, WHICH MAY MAKE IT
DIFFICULT FOR YOU TO SELL THE COMMON STOCK WHEN YOU WANT OR AT PRICES YOU FIND
ATTRACTIVE.
There has been significant volatility in the market prices for publicly traded
shares of biopharmaceutical companies, including ours. We expect that the market
price of our common stock will continue to fluctuate. The intra-day price of our
common stock fluctuated from a high of $63.27 per share to a low of $24.70 per
share for the 11 months ended November 30, 2005. On December 27, 2005, our
common stock closed at a price of $57.48 per share. The price of our common
stock may not remain at or exceed current levels. The following key factors may
have an adverse impact on the market price of our common stock:
o results of our clinical trials or adverse events associated with our
marketed products;
o announcements of technical or product developments by our competitors;
o market conditions for pharmaceutical and biotechnology stocks;
o market conditions generally;
o governmental regulation;
o health care legislation;
o public announcements regarding medical advances in the treatment of the
disease states that we are targeting;
o patent or proprietary rights developments;
o changes in pricing and third-party reimbursement policies for our
products; or
15
o fluctuations in our operating results.
In addition, the stock market in general has experienced extreme volatility that
has often been unrelated to the operating performance of a particular company.
These broad market fluctuations may adversely affect the market price of our
common stock.
THE NUMBER OF SHARES OF OUR COMMON STOCK ELIGIBLE FOR FUTURE SALE COULD
ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK.
Future sales of substantial amounts of our common stock or debt or other
securities convertible into common stock could adversely affect the market price
of our common stock. As of December 29, 2005, there were outstanding stock
options and warrants for 25,430,361 shares of common stock, of which 24,976,654
were currently exercisable at an exercise price range between $0.08 per share
and $71.34 per share, with a weighted average exercise price of $26.98 per
share. These amounts include outstanding options and warrants of Anthrogenesis
Corp. (which is now our Celgene Cellular Therapeutics subsidiary) that we
assumed as part of our acquisition of Anthrogenesis on December 31, 2002 and
that were converted into outstanding options and warrants of our common stock
pursuant to an exchange ratio. In addition, in June 2003, we issued $400.0
million of unsecured convertible notes that are currently convertible into
16,511,180 shares of our common stock at the conversion price. The conversion of
some or all of these notes will dilute the ownership interest of existing
stockholders.
OUR SHAREHOLDER RIGHTS PLAN AND CERTAIN CHARTER AND BY-LAW PROVISIONS MAY DETER
A THIRD-PARTY FROM ACQUIRING US AND MAY IMPEDE THE STOCKHOLDERS' ABILITY TO
REMOVE AND REPLACE OUR MANAGEMENT OR BOARD OF DIRECTORS.
Our board of directors has adopted a shareholder rights plan, the purpose of
which is to protect stockholders against unsolicited attempts to acquire control
of us that do not offer a fair price to all of our stockholders. The rights plan
may have the effect of dissuading a potential acquirer from making an offer for
our common stock at a price that represents a premium to the then current
trading price.
Our board of directors has the authority to issue, at any time, without further
stockholder approval, up to 5,000,000 shares of preferred stock, and to
determine the price, rights, privileges and preferences of those shares. An
issuance of preferred stock could discourage a third-party from acquiring a
majority of our outstanding voting stock. Additionally, our board of directors
has adopted certain amendments to our by-laws intended to strengthen the board's
position in the event of a hostile takeover attempt. These provisions could
impede the stockholders' ability to remove and replace our management and/or
board of directors.
Furthermore, we are subject to the provisions of Section 203 of the Delaware
General Corporation Law, an anti-takeover law, which may also dissuade a
potential acquirer of our common stock.
FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference in this prospectus are
forward-looking statements concerning our business, financial condition, results
of operations, economic performance and financial condition. Forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
within the meaning of Section 21E of the Securities Exchange Act of 1934 are
included, for example, in the discussions about:
- our strategy;
- new product discovery, development or product introduction;
- product manufacturing;
- product sales, royalties and contract revenues;
- expenses and net income;
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- our credit risk management;
- our liquidity;
- our asset/liability risk management; and
- our operational and legal risks.
These and other forward-looking statements involve risks and uncertainties.
Actual results may differ materially from those expressed or implied in those
statements. Factors that could cause such differences include, but are not
limited to, those discussed under the preceding section called "Risk Factors."
USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, the net proceeds from the
sale of securities offered by this prospectus will be used for general corporate
purposes, including further development of our lead clinical programs, expansion
of our international operations, capital expenditures and to meet working
capital needs. We expect from time to time to evaluate the acquisition of
businesses, products and technologies for which a portion of the net proceeds
may be used. We will use a prospectus supplement in connection with the sale of
securities offered by this prospectus to further specify how we intend to use
any proceeds generated by such sale.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our historical ratio of earnings to fixed charges, or
deficiency of earnings, for each of the five most recent fiscal years and for
the nine months ended September 30, 2005 (dollars in thousands):
NINE MONTHS YEARS ENDED DECEMBER 31,
ENDED
SEPTEMBER 30,
2005 2004 2003 2002 2001 2000
------------ -------- -------- -------- -------- --------
Ratio of earnings to 11.1 7.4 5.3 -- -- --
fixed charges (1)
Deficiency of earnings
available to cover
fixed charges (2) -- -- -- $(91,590) $(4,136) $(18,813)
(1) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of the sum of our pretax income from continuing operations before loss
from equity investees and fixed charges. Fixed charges consist of interest
expense, amortization of debt discount, premium and expense, capitalized
interest and a portion of lease payments considered to represent an interest
factor.
(2) There was a deficiency of earnings available to cover fixed charges for
the years 2000-2002 because we incurred net losses in each of those years.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 275,000,000 shares of common stock, par
value $.01 per share, and 5,000,000 shares of preferred stock, par value $.01
per share, of which 520 shares have been designated Series A convertible
preferred stock and 20,000 shares have been designated as Series B convertible
preferred stock. As of December 27, 2005, there were 171,120,633 shares of
common stock outstanding, no shares of Series A convertible preferred stock
outstanding and no shares of Series B convertible preferred stock outstanding.
COMMON STOCK
Holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders, and do not have cumulative voting
rights. Holders of common stock are entitled to receive ratably such dividends,
if any, as may be declared by our board of directors out of funds legally
available therefor, and subject to any preferential dividend rights of any then
outstanding preferred stock. Upon our liquidation, dissolution or winding up,
the holders of common stock are entitled to receive ratably our net assets
available after the payment of all debts and other liabilities and subject to
any liquidation preference of any then outstanding preferred stock. Holders of
common stock have no preemptive, subscription or conversion rights. There are no
redemption or sinking fund provisions applicable to the common stock. The
outstanding shares of common stock are, and any shares offered by us in this
offering will be when issued and paid for, fully paid and non-assessable.
PREFERRED STOCK
Our board of directors has the authority, subject to certain restrictions,
without further stockholder approval, to issue, at any time and from time to
time, shares of preferred stock in one or more series. Each such series shall
have such number of shares, designations, preferences, voting powers,
qualifications, and special or relative rights or privileges as shall be
determined by our board of directors, which may include, among others, dividend
rights, voting rights, redemption and sinking fund provisions, liquidation
preferences, conversion rights and preemptive rights, to the full extent now or
hereafter permitted by the laws of the State of Delaware.
The rights of the holders of common stock will be subject to, and may be
adversely affected by, the rights of holders of any preferred stock that may be
issued in the future. Such rights may include voting and conversion rights which
could adversely affect the holders of the common stock. Satisfaction of any
dividend preferences of outstanding preferred stock would reduce the amount of
funds available, if any, for the payment of dividends on common stock. Holders
of preferred stock would typically be entitled to receive a preference payment.
SHAREHOLDER RIGHTS PLAN
Our board of directors has adopted a shareholder rights plan. The shareholder
rights plan was adopted to give our board of directors increased power to
negotiate in our best interests and to discourage appropriation of control of us
at a price that is unfair to our stockholders. It is not intended to prevent
fair offers for acquisition of control determined by our board of directors to
be in the best interests of us and our stockholders, nor is it intended to
prevent a person or group from obtaining representation on or control of our
board of directors through a proxy contest, or to relieve our board of directors
of its fiduciary duty to consider any proposal for our acquisition in good
faith.
The shareholder rights plan involves the distribution of one "right" as a
dividend on each outstanding share of our common stock to all holders of record
on September 26, 1996, and an ongoing distribution of one right with respect to
each share of our common stock issued subsequently. Each right shall entitle the
holder to purchase one-tenth of a share of common stock. The rights trade in
tandem with the common stock until, and become exercisable upon, the occurrence
of certain triggering events, and the exercise price is based on the estimated
long-term value of our common stock. The exercise of these rights becomes
economically attractive upon the triggering of certain "flip-in" or "flip-over"
rights which work in conjunction with the shareholder rights plan's basic
provisions. The flip-in rights will permit their holders to purchase shares of
common stock at a discounted rate, resulting in substantial dilution of an
acquiror's voting and economic interests in us. The flip-over element of the
shareholder rights plan involves some mergers or significant asset purchases,
which trigger certain rights to purchase shares of the acquiring or surviving
company at a discount. The shareholder rights plan contains a "permitted offer"
exception which allows
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offers determined by our board of directors to be in our best interests and our
stockholders to take place free of the diluting effects of the shareholder
rights plan's mechanisms.
Our board of directors retains the right, at all times prior to acquisition of
15% or more of our voting common stock by an acquiror, to discontinue the
shareholder rights plan through the redemption of all rights, or to amend the
shareholder rights plan in any respect. In August 2003, we amended the
shareholder rights plan to provide that a qualified institutional investor (as
defined in the amendment) will not trigger any rights under the plan until it
beneficially owns at least 17% of the shares of our outstanding common stock,
rather than 15%.
DELAWARE LAW AND SOME BY-LAW PROVISIONS
Our board of directors has adopted certain amendments to our by-laws intended to
strengthen our board of directors' position in the event of a hostile takeover
attempt. These by-law provisions have the following effects:
o they provide that only persons who are nominated in accordance with the
procedures set forth in the by-laws shall be eligible for election as our
directors, except as may be otherwise provided in the by-laws;
o they provide that only business brought before the annual meeting by our
board of directors or by a stockholder who complies with the procedures set
forth in the by-laws may be transacted at an annual meeting of stockholders;
o they provide that only the chairman of the board, if any, the chief executive
officer, the president, the secretary or a majority of our board of directors
may call special meetings of our stockholders;
o they establish a procedure for our board of directors to fix the record date
whenever stockholder action by written consent is undertaken; and
o they require a vote of holders of two-thirds of the outstanding shares of
common stock to amend certain by-law provisions.
Furthermore, we are subject to the provisions of Section 203 of the Delaware
General Corporation Law, an anti-takeover law. In general, the statute prohibits
a publicly held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. For purposes of Section
203, a "business combination" includes a merger, asset sale or other transaction
resulting in a financial benefit to the interested stockholder, and an
"interested stockholder" is a person who, together with affiliates and
associates, owns, or within three years prior, did own, 15% or more of the
corporation's voting stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is American Stock Transfer
& Trust Company. It is located at 59 Maiden Lane, New York, NY 10038, and its
telephone number is (718) 921-8200.
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DESCRIPTION OF DEBT SECURITIES
The following is a summary of the general terms of the debt securities covered
by this prospectus. We will file a prospectus supplement that may contain
additional terms when we issue debt securities under one or more senior or
subordinated indentures. The terms presented here, together with the terms in a
related prospectus supplement, which could be different from the terms described
below, will be a description of the material terms of the debt securities. You
should also read the applicable indenture. We have filed forms of indentures
with the SEC as exhibits to the registration statement of which this prospectus
is a part. All capitalized terms have the meanings specified in the indentures.
The indentures are substantially identical except for the subordination
provisions described below under "Subordinated Debt Securities." The terms and
provisions of the debt securities below will most likely be modified by the
documents that set forth the specific terms of the debt securities issued.
We may issue, from time to time, debt securities, in one or more series, that
will consist of either our senior or subordinated debt. The debt securities we
offer will be issued under an indenture or indentures between us and a trustee.
Debt securities, whether senior or subordinated, may be issued as convertible
debt securities or exchangeable debt securities.
GENERAL
Debt securities may be issued in separate series without limitation as to
aggregate principal amount. We may specify a maximum aggregate principal amount
for the debt securities of any series.
We are not limited as to the amount of debt securities we may issue under the
indentures. The prospectus supplement will set forth:
- whether the debt securities will be senior or subordinated,
- the offering price,
- the title,
- any limit on the aggregate principal amount,
- the person who shall be entitled to receive interest, if other than the
record holder on the record date,
- the date the principal will be payable,
- the interest rate, if any, the date interest will accrue, the interest
payment dates and the regular record dates,
- the place where payments may be made,
- any mandatory or optional redemption provisions,
- any obligation to redeem or purchase the debt securities pursuant to a
sinking fund,
- if applicable, the method for determining how the principal, premium, if any,
or interest will be calculated by reference to an index or formula,
- conversion or exchange provisions, if any, including conversion or exchange
prices or rates and adjustments thereto,
- if other than U.S. currency, the currency or currency units in which
principal, premium, if any, or interest will be payable and whether we or the
holder may elect payment to be made in a different currency,
21
- the portion of the principal amount that will be payable upon acceleration of
stated maturity, if other than the entire principal amount,
- if the principal amount payable at stated maturity will not be determinable
as of any date prior to stated maturity, the amount which will be deemed to
be the principal amount,
- any defeasance provisions if different from those described below under
"Satisfaction and Discharge; Defeasance,"
- any conversion or exchange provisions,
- whether the debt securities will be issuable in the form of a global
security,
- any subordination provisions, if different than those described below under
"Subordinated Debt Securities,"
- any deletions of, or changes or additions to, the events of default or
covenants, and
- any other specific terms of such debt securities.
Unless otherwise specified in a prospectus supplement:
- the debt securities will be registered debt securities, and
- registered debt securities denominated in U.S. dollars will be issued in
denominations of $1,000 or an integral multiple of $1,000.
Debt securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at time of
issuance is below market rates.
EXCHANGE AND TRANSFER
Debt securities may be transferred or exchanged at the office of the security
registrar or at the office of any transfer agent designated by us.
We will not impose a service charge for any transfer or exchange, but we may
require holders to pay any tax or other governmental charges associated with any
transfer or exchange.
In the event of any potential redemption of debt securities of any series, we
will not be required to:
- issue, register the transfer of, or exchange, any debt security of that
series during a period beginning at the opening of business 15 days before
the day of mailing of a notice of redemption and ending at the close of
business on the day of the mailing, or
- register the transfer of or exchange any debt security of that series
selected for redemption, in whole or in part, except the unredeemed portion
being redeemed in part.
We may initially appoint the trustee as the security registrar. Any transfer
agent, in addition to the security registrar, initially designated by us will be
named in a prospectus supplement. We may designate additional transfer agents or
change transfer agents or change the office of the transfer agent. However, we
will be required to maintain a transfer agent in each place of payment for the
debt securities of each series.
GLOBAL SECURITIES
The debt securities of any series may be represented, in whole or in part, by
one or more global securities. Each global security will:
22
- be registered in the name of a depositary that we will identify in a
prospectus supplement,
- be deposited with the depositary or nominee or custodian, and
- bear any required legends.
No global security may be exchanged in whole or in part for debt securities
registered in the name of any person other than the depositary or any nominee
unless:
- the depositary has notified us that it is unwilling or unable to continue as
depositary or has ceased to be qualified to act as depositary,
- an event of default is continuing, or
- any other circumstances described in a prospectus supplement.
As long as the depositary, or its nominee, is the registered owner of a global
security, the depositary or nominee will be considered the sole owner and holder
of the debt securities represented by the global security for all purposes under
the indenture. Except in the above limited circumstances, owners of beneficial
interests in a global security:
- will not be entitled to have the debt securities registered in their names,
- will not be entitled to physical delivery of certificated debt securities,
and
- will not be considered to be holders of those debt securities under the
indentures.
Payments on a global security will be made to the depositary or its nominee as
the holder of the global security. Some jurisdictions have laws that require
that certain purchasers of securities take physical delivery of such securities
in definitive form. These laws may impair the ability to transfer beneficial
interests in a global security.
Institutions that have accounts with the depositary or its nominee are referred
to as "participants." Ownership of beneficial interests in a global security
will be limited to participants and to persons that may hold beneficial
interests through participants. The depositary will credit, on its book-entry
registration and transfer system, the respective principal amounts of debt
securities represented by the global security to the accounts of its
participants.
Ownership of beneficial interests in a global security will be shown on and
effected through records maintained by the depositary, with respect to
participants' interests, or any participant, with respect to interests of
persons held by participants on their behalf.
Payments, transfers and exchanges relating to beneficial interests in a global
security will be subject to policies and procedures of the depositary.
The depositary policies and procedures may change from time to time. Neither we
nor the trustee will have any responsibility or liability for the depositary's
or any participant's records with respect to beneficial interests in a global
security.
PAYMENT AND PAYING AGENTS
The provisions of this paragraph will apply to the debt securities unless
otherwise indicated in a prospectus supplement. Payment of interest on a debt
security on any interest payment date will be made to the person in whose name
the debt security is registered at the close of business on the regular record
date. Payment on debt securities of a particular series will be payable at the
office of a paying agent or paying agents designated by us. However, at our
option, we may pay interest by mailing a check to the record holder. The
corporate trust office will be designated as our sole paying agent.
23
We may also name any other paying agents in a prospectus supplement. We may
designate additional paying agents, change paying agents or change the office of
any paying agent. However, we will be required to maintain a paying agent in
each place of payment for the debt securities of a particular series.
All moneys paid by us to a paying agent for payment on any debt security which
remain unclaimed at the end of two years after such payment was due will be
repaid to us. Thereafter, the holder may look only to us for such payment.
REDEMPTION
We may reserve the right to redeem and pay, or may covenant to redeem and pay,
the debt securities of any series or any part thereof prior to the stated
maturity at such time and on such terms as provided for in the debt securities.
The provisions described herein will apply to any optional and mandatory
redemption of debt securities unless otherwise indicated in a prospectus
supplement.
If less than all of the debt securities of a series are to be redeemed, the
trustee will select the securities of the series to be redeemed in a manner that
the trustee deems fair and appropriate, in denominations larger than $1,000. We
will mail a notice of redemption at least 30 days but not more than 60 days
before the redemption date by first-class mail to each holder whose debt
securities are to be redeemed. The notice will identify the debt securities to
be redeemed and will state:
- the redemption date;
- the redemption price;
- the name and address of the paying agent;
- that the debt securities called for redemption must be surrendered to the
paying agent to collect the redemption price;
- that interest on the debt securities called for redemption ceases to accrue
on and after the redemption date; and
- any other required information.
Once the notice of redemption is mailed, the debt securities called for
redemption will become due and payable on the redemption date at the redemption
price. The paying agent will pay the redemption price plus accrued interest to
the redemption date to the holder of the redeemed debt securities upon surrender
of such debt securities.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with or merge into any other person, in a transaction in
which we are not the surviving corporation, or convey, transfer or lease our
properties and assets substantially as an entirety to, any person, unless:
- the successor, if any, is a U.S. corporation, limited liability company,
partnership, trust or other entity,
- the successor assumes our obligations on the debt securities and under the
indenture,
- immediately after giving effect to the transaction, no default or event of
default shall have occurred and be continuing, and
- certain other conditions are met.
EVENTS OF DEFAULT
Unless we inform you otherwise in a prospectus supplement, the indenture will
define an event of default with respect to any series of debt securities as one
or more of the following events:
24
(1) failure to pay principal of or any premium on any debt security of that
series when due,
(2) failure to pay any interest on any debt security of that series for 30
days when due,
(3) failure to deposit any sinking fund payment when due,
(4) failure to perform any other covenant in the indenture continued for 60
days after being given the notice required in the indenture,
(5) our bankruptcy, insolvency or reorganization, and
(6) any other event of default specified in a prospectus supplement.
An event of default of one series of debt securities is not necessarily an event
of default for any other series of debt securities. If an event of default,
other than an event of default described in clause (5) above, shall occur and be
continuing, either the trustee or the holders of at least 25% in aggregate
principal amount of the outstanding securities of that series may declare the
principal amount of the debt securities of that series to be due and payable
immediately.
If an event of default described in clause (5) above shall occur, the principal
amount of all the debt securities of that series will automatically become
immediately due and payable. Any payment by us on the subordinated debt
securities following any such acceleration will be subject to the subordination
provisions described below under "Subordinated Debt Securities."
After acceleration the holders of a majority in aggregate principal amount of
the outstanding securities of that series may, under certain circumstances,
rescind and annul such acceleration if all events of default, other than the
non-payment of accelerated principal, or other specified amount, have been cured
or waived.
Other than the duty to act with the required care during an event of default,
the trustee will not be obligated to exercise any of its rights or powers at the
request of the holders unless the holders shall have offered to the trustee
reasonable indemnity. Generally, the holders of a majority in aggregate
principal amount of the outstanding debt securities of any series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the trustee or exercising any trust or power conferred on
the trustee.
A holder will not have any right to institute any proceeding under the
indentures, or for the appointment of a receiver or a trustee, or for any other
remedy under the indentures, unless:
(1) the holder has previously given to the trustee written notice of a
continuing event of default with respect to the debt securities of that
series,
(2) the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of that series have made a written request and
have offered reasonable indemnity to the trustee to institute the
proceeding, and
(3) the trustee has failed to institute the proceeding and has not received
direction inconsistent with the original request from the holders of a
majority in aggregate principal amount of the outstanding debt securities
of that series within 60 days after the original request.
Holders may, however, sue to enforce the payment of principal, premium or
interest on any debt security on or after the due date or to enforce the right,
if any, to convert any debt security without following the procedures listed in
(1) through (3) above.
We will furnish the trustee an annual statement by our officers as to whether or
not we are in default in the performance of the indenture and, if so, specifying
all known defaults.
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MODIFICATION AND WAIVER
We and the trustee may make modifications and amendments to the indentures with
the consent of the holders of a majority in aggregate principal amount of the
outstanding securities of each series affected by the modification or amendment.
However, neither we nor the trustee may make any modification or amendment
without the consent of the holder of each outstanding security of that series
affected by the modification or amendment if such modification or amendment
would:
- change the stated maturity of any debt security,
- reduce the principal, premium, if any, or interest on any debt security,
- reduce the principal of an original issue discount security or any other debt
security payable on acceleration of maturity,
- reduce the rate of interest on any debt security,
- change the currency in which any debt security is payable,
- impair the right to enforce any payment after the stated maturity or
redemption date,
- waive any default or event of default in payment of the principal of, premium
or interest on any debt security,
- waive a redemption payment or modify any of the redemption provisions of any
debt security,
- adversely affect the right to convert any debt security, or
- change the provisions in the indenture that relate to modifying or amending
the indenture.
SATISFACTION AND DISCHARGE; DEFEASANCE
We may be discharged from our obligations on the debt securities of any series
that have matured or will mature or be redeemed within one year if we deposit
with the trustee enough cash to pay all the principal, interest and any premium
due to the stated maturity date or redemption date of the debt securities.
Each indenture contains a provision that permits us to elect:
- to be discharged from all of our obligations, subject to limited exceptions,
with respect to any series of debt securities then outstanding, and/or
- to be released from our obligations under the following covenants and from
the consequences of an event of default resulting from a breach of these
covenants:
(1) the subordination provisions under the subordinated indenture, and
(2) covenants as to payment of taxes and maintenance of corporate
existence.
To make either of the above elections, we must deposit in trust with the trustee
enough money to pay in full the principal, interest and premium on the debt
securities. This amount may be made in cash and/or U.S. government obligations.
As a condition to either of the above elections, we must deliver to the trustee
an opinion of counsel that the holders of the debt securities will not recognize
income, gain or loss for Federal income tax purposes as a result of the action.
26
If any of the above events occurs, the holders of the debt securities of the
series will not be entitled to the benefits of the indenture, except for the
rights of holders to receive payments on debt securities or the registration of
transfer and exchange of debt securities and replacement of lost, stolen or
mutilated debt securities.
NOTICES
Notices to holders will be given by mail to the addresses of the holders in the
security register.
GOVERNING LAW
The indentures and the debt securities will be governed by, and construed under,
the law of the State of New York.
REGARDING THE TRUSTEE
The indenture limits the right of the trustee, should it become a creditor of
us, to obtain payment of claims or secure its claims.
The trustee is permitted to engage in certain other transactions. However, if
the trustee acquires any conflicting interest, and there is a default under the
debt securities of any series for which they are trustee, the trustee must
eliminate the conflict or resign.
SUBORDINATED DEBT SECURITIES
Payment on the subordinated debt securities will, to the extent provided in the
indenture, be subordinated in right of payment to the prior payment in full of
all our senior indebtedness.
Upon any distribution of our assets upon any dissolution, winding up,
liquidation or reorganization, the payment of the principal of and interest on
the subordinated debt securities will be subordinated in right of payment to the
prior payment in full in cash or other payment satisfactory to the holders of
senior indebtedness of all senior indebtedness. In the event of any acceleration
of the subordinated debt securities because of an event of default, the holders
of any senior indebtedness would be entitled to payment in full in cash or other
payment satisfactory to such holders of all senior indebtedness obligations
before the holders of the subordinated debt securities are entitled to receive
any payment or distribution. The indenture requires us or the trustee to
promptly notify holders of designated senior indebtedness if payment of the
subordinated debt securities is accelerated because of an event of default.
We may not make any payment on the subordinated debt securities, including upon
redemption at the option of the holder of any subordinated debt securities or at
our option, if:
- a default in the payment of the principal, premium, if any, interest, rent or
other obligations in respect of designated senior indebtedness occurs and is
continuing beyond any applicable period of grace (called a "payment
default"), or
- a default other than a payment default on any designated senior indebtedness
occurs and is continuing that permits holders of designated senior
indebtedness to accelerate its maturity, and the trustee receives a notice of
such default (called a "payment blockage notice") from us or any other person
permitted to give such notice under the indenture (called a "non-payment
default").
We may resume payments and distributions on the subordinated debt securities:
- in the case of a payment default, upon the date on which such default is
cured or waived or ceases to exist, and
- in the case of a non-payment default, the earlier of the date on which such
nonpayment default is cured or waived or ceases to exist and 179 days after
the date on which the payment blockage notice is received by the trustee, if
the maturity of the designated senior indebtedness has not been accelerated.
27
No new period of payment blockage may be commenced pursuant to a payment
blockage notice unless 365 days have elapsed since the initial effectiveness of
the immediately prior payment blockage notice and all scheduled payments of
principal, premium and interest, including any liquidated damages, on the debt
securities that have come due have been paid in full in cash. No non-payment
default that existed or was continuing on the date of delivery of any payment
blockage notice shall be the basis for any later payment blockage notice unless
the non-payment default is based upon facts or events arising after the date of
delivery of such payment blockage notice.
If the trustee or any holder of the notes receives any payment or distribution
of our assets in contravention of the subordination provisions on the
subordinated debt securities before all senior indebtedness is paid in full in
cash, property or securities, including by way of set-off, or other payment
satisfactory to holders of senior indebtedness, then such payment or
distribution will be held in trust for the benefit of holders of senior
indebtedness or their representatives to the extent necessary to make payment in
full in cash or payment satisfactory to the holders of senior indebtedness of
all unpaid senior indebtedness.
In the event of our bankruptcy, dissolution or reorganization, holders of senior
indebtedness may receive more, ratably, and holders of the subordinated debt
securities may receive less, ratably, than our other creditors (including our
trade creditors). This subordination will not prevent the occurrence of any
event of default under the indenture.
As of December 29, 2005, no senior indebtedness was outstanding. We are not
prohibited from incurring debt, including senior indebtedness, under the
indenture. We may from time to time incur additional debt, including senior
indebtedness.
We are obligated to pay reasonable compensation to the trustee and to indemnify
the trustee against certain losses, liabilities or expenses incurred by the
trustee in connection with its duties relating to the subordinated debt
securities. The trustee's claims for these payments will generally be senior to
those of noteholders in respect of all funds collected or held by the trustee.
CONVERSION OR EXCHANGE RIGHTS
Debt securities may be convertible into or exchangeable for shares of our common
stock. The terms and conditions of conversion or exchange will be stated in the
applicable prospectus supplement. The terms will include, among others, the
following:
- the conversion or exchange price,
- the conversion or exchange period,
- provisions regarding the convertibility or exchangeability of the debt
securities, including who may convert or exchange,
- events requiring adjustment to the conversion or exchange price,
- provisions affecting conversion or exchange in the event of our redemption of
the debt securities, and
- any anti-dilution provisions, if applicable.
NO INDIVIDUAL LIABILITY OF STOCKHOLDERS, OFFICERS OR DIRECTORS
The indentures provide that none of our past, present or future stockholders,
officers or directors, or stockholders, officers or directors of any successor
corporation, in their capacity as such shall have any individual liability for
any of our obligations, covenants or agreements under the debt securities or the
applicable indenture.
28
NO CHANGE IN CONTROL PUT OPTIONS
The indentures do not provide that debt securities may be put to us at the
option of the debtholder in the event of a change in control, highly leveraged
transaction or other events. If we decide subsequently to provide such put
options, an appropriate disclosure will be provided by prospectus supplement,
including whether we maintain other indebtedness with similar features and the
potential difficulties, if any, in meeting such simultaneous obligations.
NO SECURED INDEBTEDNESS
As of the date of the prospectus, we have no secured indebtedness, and none of
our subsidiaries have any outstanding indebtedness. An appropriate disclosure
will be provided by prospectus supplement to disclose any subsequent change in
the foregoing.
PLAN OF DISTRIBUTION
We may sell the securities separately or together:
- through one or more underwriters or dealers in a public offering and sale by
them,
- directly to investors, or
- through agents.
We may sell the securities from time to time in one or more transactions at a
fixed price or prices, which may be changed from time to time:
- at market prices prevailing at the time of sale,
- at prices related to such prevailing market prices, or
- at negotiated prices.
We may engage in at-the-market offerings of our common stock. An at-the-market
offering is an offering of our common stock at other than a fixed price to or
through a market maker. Under Rule 415(a)(4) promulgated under the Securities
Act, the total value of at-the-market offerings made under this prospectus may
not exceed 10% of the aggregate market value of our common stock held by
non-affiliates.
We will describe the method of distribution of the securities in the applicable
prospectus supplement. In the event there is a material change to our plan of
distribution for securities offered pursuant to this prospectus, we will file a
post-effective amendment to this prospectus setting forth an explanation of such
change.
Underwriters, dealers or agents may receive compensation in the form of
discounts, concessions or commissions from us or our purchasers (as their agents
in connection with the sale of securities). These underwriters, dealers or
agents may be considered to be underwriters under the Securities Act. As a
result, discounts, commissions or profits on resale received by the
underwriters, dealers or agents may be treated as underwriting discounts and
commissions. The applicable prospectus supplement will identify any such
underwriter, dealer or agent, and describe any compensation received by them
from us.
Underwriters, dealers and agents may be entitled to indemnification by us
against certain civil liabilities, including liabilities under the Securities
Act, or to contribution with respect to payments made by the underwriters,
dealers and agents.
We may grant underwriters who participate in the distribution of securities an
option to purchase additional securities to cover over-allotments, if any, in
connection with the distribution.
29
All debt securities will be new issues of securities with no established trading
market. Underwriters involved in the public offering and sale of debt securities
may make a market in the debt securities. However, they are not obligated to
make a market and may discontinue market making activity at any time. No
assurance can be given as to the liquidity of the trading market for any debt
securities.
Underwriters or agents and their associates may be customers of, engage in
transactions with or perform services for us in the ordinary course of business.
LEGAL MATTERS
Proskauer Rose LLP, New York, New York, will pass on the validity of the
issuance of the securities offered in this prospectus.
EXPERTS
The consolidated financial statements and schedule of Celgene Corporation and
subsidiaries as of December 31, 2004 and 2003, and for each of the years in the
three-year period ended December 31, 2004, and management's assessment of the
effectiveness of internal control over financial reporting as of December 31,
2004 have been incorporated by reference herein in reliance upon the reports of
KPMG LLP, independent registered public accounting firm, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
KPMG LLP's report dated March 18, 2005, on management's assessment of the
effectiveness of internal control over financial reporting and the effectiveness
of internal control over financial reporting as of December 31, 2004, contains
an explanatory paragraph that states management has not evaluated the
effectiveness of internal control over financial reporting at Penn T Limited,
which was acquired on October 21, 2004. KPMG LLP's audit of internal control
over financial reporting of Celgene Corporation and subsidiaries also excludes
an evaluation of the internal control over financial reporting of Penn T
Limited.
KPMG LLP's audit report dated March 18, 2005 covering the December 31, 2004
consolidated financial statements also contains an explanatory paragraph that
states the Company's 2003 and 2002 consolidated financial statements have been
restated.
The statements in this prospectus that relate to U.S. patent rights licensed
from The Rockefeller University and Children's Medical Center Corporation under
the caption "Risk Factors - We may not be able to protect our intellectual
property" have been reviewed and approved by Jones Day as our special patent
counsel for these matters, and are included herein in reliance upon their review
and approval as patent council.
With the exception of the statements regarding stem cell related activities, the
statements describing legal and regulatory requirements in this prospectus under
the caption "Risk Factors - The pharmaceutical industry is subject to extensive
government regulation which presents numerous risks to us" have been reviewed
and, assuming the accuracy of the factual statements made, approved by
Kleinfeld, Kaplan & Becker, as experts in such matters, and are included herein
in reliance upon such review and approval.
The statements in this prospectus that relate to trademarks under the caption
"Risk Factors - We may not be able to protect our intellectual property" have
been reviewed by Cozen O'Conner as our special trademarks counsel for these
matters and are included herein in reliance upon such review and approval.
30
WHERE YOU CAN FIND MORE INFORMATION
We file reports with the Securities and Exchange Commission, or the SEC, on a
regular basis that contain financial information and results of operations. You
may read or copy any document that we file with the SEC at the SEC's Public
Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain
information about the
Public Reference Room by calling the SEC for more information at 1-800-SEC-0330.
Our SEC filings are also available at the SEC's web site at http://www.sec.gov.
Our common stock is listed on the NASDAQ National Market and we are required to
file reports, proxy statements and other information with NASDAQ. You may read
any document we file with NASDAQ at the offices of the NASDAQ Stock Market, Inc.
which is located at 1735 K Street, N.W., Washington, D.C. 20006.
31
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below that we have filed with the SEC and any
future filings that we will make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 prior to the termination of this
offering.
1. Our Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended
December 31, 2004;
2. Our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
2005, June 30, 2005 and September 30, 2005;
3. Our Current Reports on Form 8-K filed with the SEC on March 29, 2005, June
16, 2005, September 13, 2005, September 14, 2005, December 14, 2005 and
December 28, 2005; and
4. The description of our common stock contained in our Registration
Statement on Form 8-A filed with the SEC on September 16, 1996.
You may request a copy of these filings, at no cost, by writing or telephoning
our Secretary at the following address:
Celgene Corporation
86 Morris Avenue
Summit, NJ 07901
(908) 673-9000
This prospectus is part of a registration statement we filed with the SEC. You
should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different information.
We are not making an offer of these securities in any state where the offer is
not permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of the document.
32
$500,000,000
CELGENE CORPORATION
COMMON STOCK
DEBT SECURITIES
-------------------
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO PROVIDE YOU WITH
INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST
NOT RELY ON ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS. WE ARE OFFERING TO
SELL, AND SEEKING OFFERS TO BUY, ONLY THE SECURITIES OF CELGENE CORPORATION
COVERED BY THIS PROSPECTUS, AND ONLY UNDER CIRCUMSTANCES AND IN JURISDICTIONS
WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS
CURRENT ONLY AS OF ITS DATE, REGARDLESS OF THE TIME OF DELIVERY OF THIS
PROSPECTUS OR OF ANY SALE OF THE SHARES.
December 30, 2005
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
An estimate (other than the SEC registration fee) of the fees and expenses of
issuance and distribution (other than discounts and commissions) of the
securities offered hereby (all of which will be paid by Celgene Corporation
("Celgene") is as follows:
SEC registration fee ..................................... $119,500*
Trustee's fees and expenses .............................. $ 5,000
Legal fees and expenses .................................. $ 80,000
Accounting fees and expenses ............................. $ 12,000
Printing Costs ........................................... $ 2,000
Total...................................... $218,500
*previously paid
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The General Corporation Law of the State of Delaware ("DGCL") permits Celgene
and its stockholders to limit directors' exposure to liability for certain
breaches of the directors' fiduciary duty, either in a suit on behalf of Celgene
or in an action by stockholders of Celgene.
The Certificate of Incorporation of Celgene (the "Charter") eliminates the
liability of directors to stockholders or Celgene for monetary damages arising
out of the directors' breach of their fiduciary duty of care. The Charter also
requires Celgene to indemnify its directors, officers, incorporators, employees
and agents with respect to certain costs, expenses and amounts incurred in
connection with an action, suit or proceeding by reason of the fact that such
person was serving as a director, officer, incorporator, employee or agent of
Celgene. In addition, the Charter permits Celgene to provide additional
indemnification rights to its officers and directors and to indemnify them to
the greatest extent possible under the DGCL. Celgene has entered into
indemnification agreements with each of its directors and certain officers and
intends to enter into indemnification agreements with its future directors and
certain of its future officers. Pursuant to such indemnification agreements,
Celgene has agreed to indemnify the officers and directors against certain
liabilities, including liabilities arising out of the offering made by this
Registration Statement.
Celgene maintains a standard form of officers' and directors' liability
insurance policy which provides coverage to the officers and directors of
Celgene for certain liabilities, including certain liabilities which may arise
out of this Registration Statement.
ITEM 16. EXHIBITS.
The exhibits listed in the Exhibit Index are filed as part of this Registration
Statement.
Exhibit
Number Description
------- -----------
4.1 Form of Indenture for Senior Debt*
4.2 Form of Indenture for Subordinated Debt*
II-1
Exhibit
Number Description
------- -----------
5.1 Opinion of Proskauer Rose LLP*
12.1 Statement Regarding Computation of Ratios
23.1 Consent of KPMG LLP
23.2 Consent of Jones Day LLP
23.3 Consent of Kleinfeld, Kaplan & Becker
23.4 Consent of Cozen O'Conner
23.5 Consent of Proskauer Rose LLP (incorporated by reference to
Exhibit 5.1)*
24.1 Power of Attorney (included in Signature Page)**
99.1 Forms of Award Agreement for the Celgene Corporation 1998 Stock
Incentive Plan
* Previously filed.
** Previously filed; Power of Attorney for one director filed herewith.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8, or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
PROVIDED, HOWEVER, that:
II-2
(A) Paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if
the registration statement is on Form S-8 (ss.239.16b of this chapter), and the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission by
the registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) that are incorporated by
reference in the registration statement; and
(B) Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do
not apply if the registration statement is on Form S-3 (ss.239.13 of this
chapter) or Form F-3 (ss.239.33 of this chapter) and the information required to
be included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement, or is contained in a
form of prospectus filed pursuant to Rule 424(b) (ss.230.424(b) of this chapter)
that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser:
(i) If the registrant is relying on Rule 430B (ss.230.430B of this
chapter):
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3)
(ss.230.424(b)(3) of this chapter) shall be deemed to be part of the
registration statement as of the date the filed prospectus was deemed part of
and included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2),
(b)(5), or (b)(7) (ss.230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part
of a registration statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii), or (x) (ss.230.415(a)(1)(i), (vii),
or (x) of this chapter) for the purpose of providing the information required by
section 10(a) of the Securities Act of 1933 shall be deemed to be part of and
included in the registration statement as of the earlier of the date such form
of prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer and any person that
is at that date an underwriter, such date shall be deemed to be a new effective
date of the registration statement relating to the securities in the
registration statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial BONA FIDE
offering thereof. PROVIDED, HOWEVER, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such effective date,
supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such
document immediately prior to such effective date; or
(ii) If the registrant is subject to Rule 430C (ss.230.430C of this
chapter), each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A (ss.230.430A of this chapter), shall be deemed to be part of and
included in the registration statement as of the date it is first used after
effectiveness. PROVIDED, HOWEVER, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use, supersede or
modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such date of first use.
II-3
(6) That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchase in the initial distribution of the
securities:
The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to
the purchaser, if the securities are offered or sold to such purchaser by means
of any of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such securities
to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to Rule 424
(ss.230.424 of this chapter);
(ii) any free writing prospectus relating to the offering prepared by or
on behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant; and
(iv) any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(i) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
(j) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under section 305(b)(2) of
the Act.
II-5
SIGNATURES
KNOW ALL MEN BY THESE PRESENTS, that each person or entity whose signature
appears below constitutes and appoints John W. Jackson, Sol J. Barer and Robert
J. Hugin, and each of them, its true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for it and in its name,
place and stead, in any and all capacities, to sign any and all amendments to
this Post-Effective Amendment No. 1 to the Registration Statement on Form S-3
(No. 333-75636) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as it might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Post-Effective
Amendment No. 1 to the Registration Statement on Form S-3 (No. 333-75636) to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Summit, State of New Jersey on December 29, 2005.
CELGENE CORPORATION
By: /s/John W. Jackson
------------------
John W. Jackson
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement No. 333-75636 has
been signed below by the persons whose signatures appear below on December 29,
2005 which persons have signed such Registration Statement in the capacities
indicated:
Signature Title
--------- -----
/s/John W. Jackson Chairman of the Board and
----------------------------------- Chief Executive Officer
John W. Jackson (Principal Executive Officer)
/s/Sol J. Barer President, Chief Operating Officer,
----------------------------------- Director
Sol J. Barer
/s/Robert J. Hugin Chief Financial Officer, Director
----------------------------------- (Principal Accounting and
Robert J. Hugin Financial Officer)
* Director
-----------------------------------
Jack L. Bowman
* Director
-----------------------------------
Frank T. Cary
/s/Michael D. Casey Director
-----------------------------------
Michael D. Casey
Signature Title
--------- -----
* Director
-----------------------------------
Arthur Hull Hayes, Jr.
* Director
-----------------------------------
Gilla Kaplan
* Director
-----------------------------------
Richard C. E. Morgan
* Director
-----------------------------------
Walter L. Robb
/s/John W. Jackson
-----------------------------------
John W. Jackson
Attorney-In Fact
*Executed by Attorney-in-Fact.
INDEX TO EXHIBITS
5.1 Opinion of Proskauer Rose LLP*
12.1 Statement Regarding Computation of Ratios
23.1 Consent of KPMG LLP
23.2 Consent of Jones Day LLP
23.3 Consent of Kleinfeld, Kaplan & Becker
23.4 Consent of Cozen O'Conner
23.5 Consent of Proskauer Rose LLP (incorporated by reference to Exhibit 5.1)*
24.1 Power of Attorney (included in Signature Page)**
99.1 Forms of Award Agreement for the Celgene Corporation 1998 Stock Incentive
Plan
* Previously filed.
** Previously filed; Power of Attorney for one director filed herewith.