As filed with the Securities and Exchange Commission on February 14, 2003
Registration No. 333-102965
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
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REGISTRATION STATEMENT
Under
The Securities Act of 1933
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CURATIVE HEALTH SERVICES, INC.
(Exact name of registrant as specified in its charter)
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Minnesota 41-1503914
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
150 Motor Parkway
Hauppauge, New York 11788
(631) 232-7000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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Joseph Feshbach
Chief Executive Officer
Curative Health Services, Inc.
150 Motor Parkway
Hauppauge, New York 11788
(631) 232-7000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copy to:
Timothy S. Hearn, Esq.
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, Minnesota 55402
(612) 340-2600
Facsimile: (612) 340-2868
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Approximate date of commencement of proposed sale to the public: From time to
time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following 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 that specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Subject to completion, dated February 14, 2003
184,080 Shares
CURATIVE HEALTH SERVICES, INC.
Common Stock
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184,080 shares of the common stock, $.01 par value, of Curative Health Services,
Inc. are being offered by this prospectus. The shares will be sold from time to
time by the selling shareholders named in this prospectus. We will not receive
any of the proceeds from the sales.
Our common stock is traded on the Nasdaq National Market under the symbol
"CURE." On February 13, 2003, the last sale price of our common stock as
reported on the Nasdaq National Market was $16.18 per share.
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This investment involves risk. See "Risk Factors" beginning on page 2.
Neither the Securities and Exchange Commission nor any state securities
commission has approved of anyone's investment in 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 information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The date of this prospectus is , 2003.
TABLE OF CONTENTS
Page
Summary......................................................................1
Risk Factors.................................................................2
Selling Shareholders........................................................12
Plan of Distribution........................................................13
Legal Matters...............................................................13
Experts.....................................................................14
Where You Can Find More Information.........................................14
About This Prospectus.......................................................15
SUMMARY
Business of Curative Health Services, Inc.
Curative Health Services, Inc., through its two unique business units, seeks to
deliver high-quality results and exceptional patient satisfaction for patients
experiencing serious or chronic medical conditions. Our Specialty Pharmacy
Services business unit provides services to help patients manage the healthcare
process and offers related pharmacy products to patients for chronic and
critical disease states. Through our Specialty Pharmacy Services business unit,
we purchase various biopharmaceutical products, which include both
pharmaceuticals (i.e., drugs) as well as biological products (e.g., hemophilia
factor), from suppliers and then contract with insurance companies and other
payors to provide direct to patient distribution of and education about, and
other support services relating to, these biopharmaceutical products. In
addition, we offer infusion therapy services for patients with immune system
disorders. Further, as part of our Specialty Pharmacy Services operations, we
provide biopharmaceutical product distribution and support services under
contract with retail pharmacies. The biopharmaceutical products distributed and
the infusion therapies offered by us are used by patients with chronic or severe
conditions such as hemophilia, respiratory syncytial virus, immune system
disorders, rheumatoid arthritis, hepatitis C and multiple sclerosis. We have
contracts with approximately 200 payors and retail pharmacies. Our Specialty
Pharmacy Services business unit provides services directly to patients and
caregivers via mail order, overnight courier, retail pharmacy and through our
community-based representatives.
Our Specialty Healthcare Services business unit is a leading disease management
company in chronic wound care management. Currently, our Specialty Healthcare
Services business unit manages, on behalf of hospital clients, a nationwide
network of Wound Care Center(R) programs that offer a comprehensive range of
services for treatment of chronic wounds. Our Wound Management Program(TM)
consists of diagnostic and therapeutic treatment procedures which are designed
to meet each patient's specific wound care needs on a cost-effective basis. Our
treatment procedures are designed to achieve positive results for wound healing
based on our significant experience in the field. We maintain a proprietary
database of patient results that we have collected since 1988 containing over
375,000 patient cases. Our treatment procedures, which are based on our
extensive patient data, have allowed us to achieve an overall rate of healing of
approximately 80% for patients completing therapy. Our Wound Care Center network
consists of more than 90 outpatient clinics located on or near campuses of acute
care hospitals in 30 states.
General
We were incorporated in the State of Minnesota in 1984 under the name Curatech,
Inc. We changed our name to Curative Technologies, Inc. in March, 1990 and to
Curative Health Services, Inc. in June, 1996. Our principal executive offices
are located at 150 Motor Parkway, Hauppauge, New York 11788, telephone number
(631) 232-7000. Wound Care Center(R), Wound Management Program(TM) and our name,
Curative Health Services(TM), with our logo are our trademarks. This prospectus
also includes trade names and marks of other companies.
RISK FACTORS
You should carefully consider each of the following risks and all of the other
information included or incorporated by reference in this prospectus before
deciding to invest in shares of our common stock. Additional risks not presently
known to us or that we currently believe to be immaterial may also adversely
affect our business. The trading price of our common stock could decline due to
any of these risks, and you may lose all or part of your investment.
RISK RELATED TO OUR BUSINESS
If we fail to comply with the terms of our settlement agreement with the
government, we could be subject to additional litigation or other governmental
actions which would be harmful to our business.
On December 28, 2001, we entered into a settlement with the Department of
Justice, the United States Attorney for the Southern District of New York, the
United States Attorney for the Middle District of Florida and the U.S.
Department of Health and Human Services, Office of the Inspector General, in
connection with all federal investigations and legal proceedings related to the
whistleblower lawsuits previously pending against us in the United States
District Court for the Southern District of New York and the United States
District Court for the District of Columbia. The focus of the government
investigation and resolution was the allegation that we improperly caused our
hospital customers to seek reimbursement for a portion of our management fees
that included costs related to advertising and marketing activities by our
personnel. Under the terms of the settlement, we were released from claims
associated with services we provided to hospitals, and we agreed to pay the
United States a $9 million initial payment, with an additional $7.5 million to
be paid over the next four years. Pursuant to the settlement, we will be
required to fulfill certain additional obligations, including abiding by a
five-year Corporate Integrity Agreement (which incorporates much of our existing
compliance program), avoiding violations of law and providing certain
information to the Department of Justice from time to time. If we fail or if we
are accused of failing to comply with the terms of the settlement, we may be
subject to additional litigation or other governmental actions. In addition, as
part of the settlement, we consented to the entry of a judgment for $28 million
against us if we fail to comply with the terms of the settlement.
We are involved in litigation which may harm the value of our business.
In the ordinary course of our business, we are the subject of or party to
various lawsuits, including those arising out of services or products provided
by or to our operations, personal injury and employment disputes, the outcome of
which, in the opinion of management, will not have a material adverse effect on
our financial position or results of operations.
If we are unable to manage our growth effectively, our business will be harmed.
Our growth strategy will likely place a strain on our resources, and if we
cannot effectively manage our growth, our business will be harmed. In connection
with our growth strategy, we will likely experience a large increase in the
number of our employees, the size of our programs and the scope of our
operations. Our ability to manage this growth and to be successful in the future
will depend partly on our ability to retain skilled employees, enhance our
management team and improve our management information and financial control
systems.
As part of our growth strategy, we continue to evaluate acquisition
opportunities. Acquisitions involve many risks, including:
o the specialty pharmacy industry is undergoing consolidation; therefore, we
may experience difficulty in identifying suitable candidates and
negotiating and consummating acquisitions on attractive terms;
o in the industry in which our Specialty Pharmacy Services division
operates, customers have a strong affiliation with their community-based
representatives; it is sometimes difficult to retain and assimilate the
community-based representatives of companies we acquire;
o because of the relationships between community-based representatives and
customers, the loss of a single community-based representative may entail
the loss of a significant number of customers, and we are, therefore,
subject to a significant potential for loss of customers, especially
during the periods in which we attempt to integrate newly-acquired
businesses;
o a growth strategy that involves significant acquisitions results in a
diversion of our management's attention from existing operations.
We could also be exposed to unknown or contingent liabilities resulting from the
pre-acquisition operations of the entities we acquire, such as liability for
failure to comply with health care or reimbursement laws.
We may need additional capital to finance our growth and capital requirements,
which could prevent us from fully pursuing our growth strategy.
In order to implement our present growth strategy, we will need substantial
capital resources and will incur, from time to time, short- and long-term
indebtedness, the terms of which will depend on market and other conditions. Due
to uncertainties inherent in the capital markets (e.g., availability of capital,
fluctuation of interest rates, etc.), we cannot be certain that existing or
additional financing will be available to us on acceptable terms, if at all. As
a result, we could be unable to fully pursue our growth strategy. Further,
additional financing may involve the issuance of equity securities that would
reduce the percentage ownership of our then current shareholders.
We could be adversely affected by an impairment of the significant amount of
goodwill on our financial statements.
Our Specialty Pharmacy acquisitions resulted in the recording of a significant
amount of goodwill on our financial statements. The goodwill was recorded
because the fair value of the net assets acquired was less than the purchase
price. We may not realize the full value of this goodwill. As such, we evaluate
on at least an annual basis whether events and circumstances indicate that all
or some of the carrying value of goodwill is no longer recoverable, in which
case we would write off the unrecoverable goodwill as a charge to our earnings.
Since our growth strategy will likely involve the acquisition of other
companies, we may record additional goodwill in the future. The possible
write-off of this goodwill could negatively impact our future earnings. We will
also be required to allocate a portion of the purchase price of any acquisition
to the value of any intangible assets that meet the criteria specified in the
Statement of Financial Accounting Standards No. 141, "Business Combinations,"
such as marketing, customer or contract-based intangibles. The amount allocated
to these intangible assets could be amortized over a fairly short period. As a
result, our earnings and the market price of our common stock could be
negatively affected.
We are highly dependent on our relationships with a limited number of
biopharmaceutical and other suppliers, and the loss of any of these
relationships could significantly affect our ability to sustain or grow our
revenues.
The biopharmaceutical industry is susceptible to product shortages. Some of the
products that we distribute, such as intravenous immunoglobulin and factor VIII
blood clotting products, have experienced shortages in the recent past.
Suppliers were unable to increase production to meet rising global demand. This
shortage has recently ended, and while supply has significantly increased,
demand continues to grow. In 2001, approximately 32 percent, or $11 million, of
our Specialty Pharmacy Services revenues were derived from our sale of factor
VIII. We purchased our supplies of blood clotting products from five suppliers,
including Baxter Healthcare Corp., Novo Nordisk Pharmaceuticals, Inc., Wyeth,
Alpha Therapeutics Corp., and Aventis Behring. The Company believes that these
five suppliers represent substantially all of the production capacity for
recombinant factor VIII. In the event that one of these suppliers is unable to
continue to supply us with products, it is uncertain whether the remaining
suppliers would be able to make up any shortfall resulting from such inability.
Our ability to take on additional customers or to acquire other specialty
pharmacy businesses with significant hemophilia customer bases could be affected
negatively in the event we are unable to secure adequate supplies of our
products from these suppliers. In addition, MedImmune, Inc. is the sole supplier
of Synagis(R), a product used to treat respiratory syncitial virus in infants.
In the event MedImmune is unable to provide us with an adequate supply of
Synagis(R) product for any reason, our ability to add and service patients would
be impaired. If these products, or any of the other drugs or products that we
distribute, are in short supply for long periods of time, our business could be
harmed.
If additional providers obtain access to favorably priced products we handle,
our business could be harmed.
Because we do not receive federal grants under the Public Health Service Act, we
are not eligible to participate directly in a federal pricing program
administered by the Federal Health Resources and Services Administration's
Public Health Service, which allows certain entities with such grants, such as
certain hospitals and hemophilia treatment centers, to obtain discounts on
drugs, including certain biopharmaceutical products (e.g., hemophilia clotting
factor) which products represented 23 percent of our total Company revenues in
2001. To the best of our knowledge, these entities benefit by being able to
acquire, pursuant to this federal program, products competitive with ours at
prices lower than our cost for the same products. Our customers, where eligible,
may elect to obtain hemophilia clotting factor, or other products, from such
lower-cost entities and this would result in a loss of revenue.
Recent investigations into reporting of average wholesale prices could reduce
our pricing and margins.
Many government payors, including Medicare and Medicaid, as well as some private
payors, pay us directly or indirectly based upon the drug's average wholesale
price. If a drug's average wholesale price declines, and if we are unable to
recoup the full amount of such decline from our customers, we will lose
revenues. Biopharmaceutical products, including hemophilia factor, are included
as part of this drug reimbursement methodology. In 2001, 43 percent of our
revenues resulted from reimbursements based on the average wholesale price of
our products. Average wholesale price for most drugs is compiled and published
by private companies such as First DataBank, Inc. Various federal and state
government agencies have been investigating whether the reported average
wholesale price of many drugs, including some that we sell, is an appropriate or
accurate measure of the market price of the drugs. As reported in the Wall
Street Journal, there are also several whistleblower lawsuits pending against
various drug manufacturers in connection with the appropriateness of the
manufacturer's average wholesale price for a particular drug. These government
investigations and lawsuits involve allegations that manufacturers reported
artificially inflated average wholesale prices of various drugs to First
DataBank, which in turn reported these prices to its subscribers including many
state Medicaid agencies who then included these average wholesale prices in the
state's reimbursement policies. In 2001, Bayer Corporation, an occasional
supplier of hemophilia factor to us, agreed to pay $14 million in a settlement
with the federal government and 45 states in order to close an investigation
regarding these charges. Bayer also entered into a five-year corporate integrity
agreement with the government, in which Bayer agreed to provide information on
the average sale price of its drugs to the government. In February 2000, First
DataBank published a Market Price Survey of 437 drugs, which was significantly
lower than the historic average wholesale price for a number of the clotting
factor and intravenous immunoglobulin products that we sell. Consequently, a
number of state Medicaid agencies have revised their payment methodology as a
result of the Market Price Survey. Although the Centers for Medicare and
Medicaid Services ("CMS") had also announced that Medicare fiscal agents should
calculate the amount that they pay for Medicare claims for certain drugs by
using the lower prices on the First DataBank Market Price Survey, the proposal
to include clotting factor in the lower Medicare pricing was withdrawn. CMS
announced that it will seek legislation that would establish payments to cover
the administrative costs of suppliers of clotting factor as a supplement to a
lower average wholesale price pricing for hemophilia factor.
On September 21, 2001, the United States House Subcommittees on Health and
Oversight & Investigations held hearings to examine how Medicare reimburses
providers for the cost of drugs. In conjunction with that hearing, the United
States General Accounting Office issued its Draft Report recommending that
Medicare establish payment levels for part-B prescription drugs and their
delivery and administration that are more closely related to their costs, and
that payments for drugs be set at levels that reflect actual market transaction
prices and the likely acquisition costs to providers. Other Congressional
Committees have subsequently held hearings. These hearings reflect Congress'
interest in possibly changing the manner in which the government reimburses
providers for drugs. While no Congressional action occurred in the 107th
Congress (2001-2002), Congressional interest on this issue is likely to continue
in the future.
The government investigations and the changes occurring in the reporting of
average wholesale price and its effects on Medicare and Medicaid prices could
have a negative effect on our business. For example, if the reduced average
wholesale prices published by First DataBank for the drugs that we sell are
ultimately adopted as the standard by which we are paid by government payors or
private payors, this could have an adverse effect on our business, including
reducing the pricing and margins on certain of our products.
Our business would be harmed if demand for our products and services is reduced.
Reduced demand for our products and services, in either our Specialty Pharmacy
Services or Specialty Healthcare Services businesses, could be caused by a
number of circumstances, including:
o customer shifts to treatment regimens other than those we offer;
o new treatments or methods of delivery of existing drugs that do not
require our specialty products and services;
o the recall of a drug;
o adverse reactions caused by a drug;
o the expiration or challenge of a drug patent;
o competing treatment from a new drug, a new use of an existing drug or
genetic therapy;
o drug companies cease to develop, supply and generate demand for drugs that
are compatible with the services we provide;
o drug companies stop outsourcing the services we provide or fail to support
existing drugs or develop new drugs;
o governmental or private initiatives that would alter how drug
manufacturers, health care providers or pharmacies promote or sell
products and services;
o the loss of a managed care or other payor relationship covering a number
of high revenue customers;
o the cure of a disease we service.
Our business involves risks of professional, product and hazardous substance
liability, and any inability to obtain adequate insurance may adversely affect
our business.
The provision of health services entails an inherent risk of professional
malpractice, regulatory violations and other similar claims. Claims, suits or
complaints relating to health services and products provided by physicians,
pharmacists or nurses in connection with our Specialty Healthcare Services and
Specialty Pharmacy Services programs may be asserted against us in the future.
Our operations involve the handling of bio-hazardous materials. Our employees,
like those of all companies that provide services dealing with human blood
specimens, may be exposed to risks of infection from AIDS, hepatitis and other
blood-borne diseases if appropriate laboratory practices are not followed.
Although we believe that our safety procedures for handling and disposing of
such materials comply with the standards prescribed by state and federal
regulations, the risk of accidental infection or injury from these materials
cannot be completely eliminated. In the event of such an accident, we could be
held liable for any damages that result, and such liability could harm our
business.
Our operations expose us to product and professional liability risks that are
inherent in managing the delivery of wound care services and the provision and
marketing of biopharmaceutical products. We currently maintain professional and
product liability insurance coverage of $25 million in the aggregate. Because we
cannot predict the nature of future claims that may be made, we can not assure
you that the coverage limits of our insurance would be adequate to protect us
against any potential claims, including claims based upon the transmission of
infectious disease, contaminated product or otherwise. In addition, we may not
be able to obtain or maintain professional and product liability insurance in
the future on acceptable terms or with adequate coverage against potential
liabilities.
We rely on key community-based representatives whose absence or loss could harm
our business.
The success of our Specialty Pharmacy Services division depends upon our ability
to retain key employees known as community-based representatives, and the loss
of their services could adversely affect our business and prospects. Our
community-based representatives are our chief contact and maintain the primary
relationship with our customers and the loss of a single community-based
representative could result in the loss of a significant number of customers. We
do not have key man insurance on any of our community-based representatives. In
addition, our success will depend, among other things, upon the successful
recruitment and retention of qualified personnel, and we may not be able to
retain all of our key management personnel or be successful in recruiting
additional replacements should that become necessary.
Our inability to maintain a number of important contractual relationships could
adversely affect our operations.
Substantially all of the revenues of our Specialty Healthcare Services
operations are derived from management contracts with acute care hospitals. At
present, we have approximately 90 management contracts. The contracts generally
have initial terms of three to five years, and many have automatic renewal terms
unless specifically terminated. During the year ending December 31, 2003, the
contract terms of 26 of our management contracts will expire, including 19
contracts which provide for automatic one-year renewals. The contracts often
provide for early termination either by the client hospital if specified
performance criteria are not satisfied, or by us under various other
circumstances. Historically, some contracts have expired without renewal, and
others have been terminated by us or the client hospital for various reasons
prior to their scheduled expiration. During 2002, five contracts expired without
renewal, and an additional 20 contracts were terminated prior to their scheduled
expiration. Generally, these contracts were terminated by hospitals because of
the Specialty Healthcare Services legal action, hospital financial difficulties
and Medicare reimbursement changes which reduced hospital revenues. Our
continued success is subject to our ability to renew or extend existing
management contracts and obtain new management contracts. Any hospital may
decide not to continue to do business with us following expiration of its
management contract, or earlier if such management contract is terminable prior
to expiration. In addition, any changes in the Medicare program or third-party
reimbursement levels which generally have the effect of limiting or reducing
reimbursement levels for health services provided by programs managed by us
could result in the early termination of existing management contracts and could
adversely affect our ability to renew or extend existing management contracts
and to obtain new management contracts. The termination or non-renewal of a
material number of management contracts could harm our business.
In addition, a portion of the revenues of our Specialty Pharmacy Services
operations is derived from contractual relationships with retail pharmacies. Our
success is subject to the continuation of these relationships, and termination
of one or more of these relationships could harm our business.
Our business will suffer if we lose relationships with payors.
We are highly dependent on reimbursement from non-governmental payors. Many
payors seek to limit the number of providers that supply drugs to their
enrollees. From time to time, payors with whom we have relationships require
that we and our competitors bid to keep their business, and, therefore, due to
the uncertainties involved in any bidding process, we may either not be retained
or our margins may be adversely affected. The loss of a significant number of
payor relationships, or an adverse change in the financial condition of a
significant number of payors could result in the loss of a significant number of
patients and harm our business.
Changes in reimbursement rates may cause reductions in the revenues of our
operations.
As a result of the Balanced Budget Act of 1997, CMS (formerly Health Care
Financing Administration) implemented the Outpatient Prospective Payment System
for all hospital outpatient department services furnished to Medicare patients
beginning August 2000. Under the system, a predetermined rate is paid to
hospitals for clinical services rendered, regardless of the hospital's cost. The
new payment system does not provide comparable reimbursement for previously
reimbursed services, and the payment rates for many services are insufficient
for many of our hospital customers, resulting in revenue and income shortfalls
for the Wound Care Center programs managed by us on behalf of the hospitals. As
a result, during 2001 and 2000, we renegotiated and modified many of our
management contracts, which has resulted in reduced revenue and income to us
from those modified contracts and, in numerous cases, contract termination.
These renegotiations resulted in reduced revenues of approximately $8.5 million.
In addition, we lost approximately $28 million in revenues as the result of
contract terminations. At any time during any given year, 10 percent to 20
percent of hospital contracts are being renegotiated. We expect that contract
renegotiation and modification with many of our hospital customers will
continue, and this could result in further reduced revenues and income to us
from those contracts and even contract terminations. These results could harm
our business.
The Wound Care Center programs managed by Specialty Healthcare Services on
behalf of acute care hospitals are generally treated as "provider based
entities" for Medicare reimbursement purposes. This designation is required for
the hospital based program to be covered under the Medicare outpatient
reimbursement system. With the Outpatient Prospective Payment System, Medicare
published criteria for determining when programs may be designated "provider
based entities." Programs that existed prior to October 1, 2000 are
grandfathered by CMS to be "provider based entities" until the start of their
next cost reporting period beginning on or after July 1, 2003. At that time, the
hospital will submit an attestation to the appropriate Regional Office,
attesting that the program meets all the requirements for provider based
designation. Programs that started on or after October 1, 2000 are required to
file an application for provider based designation status. We timely advised
each of our hospital clients of the mandatory application procedures. Of the
eight "under arrangement" models in our Specialty Healthcare Services business
unit, where we, not the hospital, employ the clinical and administrative staff
that work in the center, four are potentially at risk for not meeting the
criteria for a "provider based entity." As a result, Specialty Healthcare
Services has been in discussions with its "under arrangement" hospital customers
to convert the programs to management models where the hospital employs the
clinical and administrative staff. Although we believe that the programs we
manage substantially meet the current criteria to be designated "provider based
entities," a widespread denial of such designation would harm our business.
In recent years, competition for patients, efforts by traditional third-party
payors to contain or reduce healthcare costs, and the increasing influence of
managed care payors, such as health maintenance organizations, have resulted in
reduced rates of reimbursement. If these trends continue, they could harm our
business. The profitability of our specialty pharmacy operations depends on
reimbursement from third-party payors because our customers seek reimbursement
from third-party payors for the cost of drugs and related medical supplies that
we distribute. Changes in reimbursement policies of private and governmental
third-party payors, including policies relating to the Medicare, Medicaid and
other federally funded programs, could reduce the amounts reimbursed to these
customers for our products and, in turn, the amount these customers would be
willing to pay for our products and services. In addition, where we have direct
relationships with payors, changes in their reimbursement policies may reduce
amounts payable directly to us by such payors. Changes in those reimbursement
policies could affect our customers, which in turn could harm our business.
Our business could be harmed by changes in Medicare or Medicaid.
Changes in the Medicare, Medicaid or similar government programs or the amounts
paid by those programs for our services may adversely affect our earnings. Such
programs are highly regulated and subject to frequent and substantial changes
and cost containment measures. In recent years, changes in these programs have
limited and reduced reimbursement to providers. According to a Kaiser Family
Foundation report released on September 19, 2002, 45 states reported they took
actions to decrease Medicaid spending on 2002, and 41 reported they would take
additional actions to decrease Medicaid spending in 2003. As a result of our
Specialty Healthcare acquisitions, we expect the percentage of our revenues
attributable to federal and state programs to increase. In September 2002, the
Bush administration proposed deep reductions in Medicare payments for a wide
range of drugs provided as outpatient services by hospitals. Among the drugs
included in this proposal is hemophilia products. If this proposal is adopted,
we cannot predict whether state Medicaid programs would adopt similar pricing.
We are subject to pricing pressures and other risks involved with commercial
payors.
Commercial payors, such as managed care organizations and traditional indemnity
insurers, increasingly are requesting fee structures and other arrangements
providing for health care providers to assume all or a portion of the financial
risk of providing care. The lowering of reimbursement rates, increasing medical
review of bills for services and negotiating for reduced contract rates could
harm our business. Pricing pressures by commercial payors may continue, and our
business may be adversely affected by these trends.
Also, continued growth in managed care and capitated plans have pressured health
care providers to find ways of becoming more cost competitive. Managed care
organizations have grown substantially in terms of the percentage of the
population they cover and in terms of the portion of the health care economy
they control. Managed care organizations have continued to consolidate to
enhance their ability to influence the delivery of health care services and to
exert pressure to control health care costs. A rapid increase in the percentage
of revenue derived from managed care payors or under capitated arrangements
without a corresponding decrease in our operating costs could harm our business.
There is substantial competition in our industry, and we may not be able to
compete successfully.
The principal competition with our Specialty Healthcare Services business
consists of specialty clinics that have been established by some hospitals or
physicians. Additionally, there are some private companies which provide wound
care services through a hyperbaric oxygen therapy program format. In addition,
recently developed technologies, or technologies that may be developed in the
future, are or may be the basis for products which compete with our chronic
wound care services. We may not be able to enter into co-marketing arrangements
with respect to these products, and we may not be able to compete effectively
against such companies in the future. Our Specialty Pharmacy Services business
faces competition from other disease management entities, general health care
facilities and service providers, pharmaceutical companies, biopharmaceutical
companies as well as other competitors. Many of these companies have
substantially greater capital resources and marketing staffs and greater
experience in commercializing products and services than we have.
If we are unable to effectively adapt to changes in the healthcare industry, our
business will be harmed.
Political, economic and regulatory influences are subjecting the health care
industry in the United States to fundamental change. Although Congress has
failed to pass comprehensive health care reform legislation thus far, we
anticipate that Congress and state legislatures will continue to review and
assess alternative health care delivery and payment systems and may in the
future propose and adopt legislation effecting fundamental changes in the health
care delivery system as well as changes to the Medicare Program's coverage and
payments of the drugs and services we provide. It is possible that future
legislation enacted by Congress or state legislatures will contain provisions
that may harm our business, or may change the operating environment for our
targeted customers (including hospitals and managed care organizations). Health
care industry participants may react to such legislation or the uncertainty
surrounding related proposals by curtailing or deferring expenditures and
initiatives, including those relating to our programs and services. It is also
possible that future legislation either could result in modifications to the
nation's public and private health care insurance systems, or coverage for
biopharmaceutical products, which could affect reimbursement policies in a
manner adverse to us, or could encourage integration or reorganization of the
health care delivery system in a manner that could materially and adversely
affect our ability to compete or to continue our operations without substantial
changes. Other legislation relating to our business or to the health care
industry may be enacted, including legislation relating to third-party
reimbursement, and such legislation may have a negative effect on our business.
Our industry is subject to extensive government regulation, and noncompliance by
us or our suppliers, our customers or our referral sources could harm our
business.
The marketing, labeling, dispensing, storage, provision and purchase of drugs,
health supplies and health services including the biopharmaceutical products we
provide, are extensively regulated by federal and state governments, and if we
fail or are accused of failing to comply with laws and regulations, our business
could be harmed. Our business could also be harmed if the suppliers, customers
or referral sources we work with are accused of violating laws or regulations.
The applicable regulatory framework is complex, and the laws are very broad in
scope. Many of these laws remain open to interpretation and have not been
addressed by substantive court decisions. The federal government, or states in
which we operate, could, in the future, enact more restrictive legislation or
interpret existing laws and regulations in a manner that could limit the manner
in which we can operate our business and have a negative impact on our business.
There are a number of state and federal laws and regulations that apply to our
operations including, but not limited to:
o The federal "anti-kickback law" prohibits the offer or solicitation of
remuneration in return for the referral of patients covered by almost all
governmental programs, or the arrangement or recommendation of the purchase
of any item, facility or service covered by those programs. The Health
Insurance Portability and Accountability Act of 1996, or HIPAA, created new
violations for fraudulent activity applicable to both public and private
health care benefit programs and prohibits inducements to Medicare or
Medicaid eligible patients to influence their decision to seek specific
items and services reimbursed by the government or to choose a particular
provider. The potential sanctions for violations of these laws include
significant fines, exclusion from participation in the Medicare and
Medicaid programs and criminal sanctions. Although some "safe harbor"
regulations attempt to clarify when an arrangement will not violate the
anti-kickback law, our business arrangements and the services we provide
may not fit within these safe harbors. Failure to satisfy a safe harbor
requires further analysis of whether the parties violated the anti-kickback
law. In addition to the anti-kickback law, many states have adopted similar
kickback and/or fee-splitting laws, which can affect the financial
relationships we may have with physicians, vendors, other retail pharmacies
and patients. The finding of a violation of the federal laws or one of
these state laws could harm our business.
o In 2000, the Department of Health and Human Services issued final
regulations implementing the Administrative Simplification provision of
HIPAA concerning the maintenance, transmission and security of electronic
health information, particularly individually identifiable information. The
regulations, when effective, will require the development and
implementation of security and transaction standards for all electronic
health information and impose significant use and disclosure obligations on
entities that send or receive individually identifiable electronic health
information. As a result of these regulations, we anticipate new
expenditures in ensuring that patient data kept on our computer networks
are in compliance with these regulations. While we believe that we will be
in compliance by the applicable deadlines, the cost of reaching compliance
may harm our business. Also, failure to comply with these regulations or
wrongful disclosure of confidential patient information could result in the
imposition of administrative or criminal sanctions, including exclusion
from the Medicare and state Medicaid programs. In addition, if we choose to
distribute drugs through new distribution channels such as the Internet, we
will have to comply with government regulations that apply to those
distribution channels, which could harm our business.
o The Ethics in Patient Referrals Act of 1989, as amended, commonly referred
to as the "Stark Law," prohibits physician referrals to entities with
which the physician or their immediate family members have a "financial
relationship." A violation of the Stark Law is punishable by civil
sanctions, including significant fines and exclusion from participation in
Medicare and Medicaid.
o State laws prohibit the practice of medicine, pharmacy and nursing without
a license. To the extent that we assist patients and providers with
prescribed treatment programs, a state could consider our activities to
constitute the practice of medicine. Our nurses must obtain state licenses
to provide nursing services we provide to some of our patients. In
addition, in some states, coordination of nursing services for patients
could necessitate licensure as a home health agency and/or could
necessitate the need to use licensed nurses to provide certain patient
directed services. If we are found to have violated those laws, we could
face civil and criminal penalties and be required to reduce, restructure or
even cease our business in that state.
o Pharmacies (retail, mail-order and wholesale) as well as pharmacists often
must obtain state licenses to operate and dispense drugs. Pharmacies must
also obtain licenses in some states in order to operate and provide goods
and services to residents of those states. In addition, our pharmacies may
be required by the federal Drug Enforcement Agency, as well as by similar
state agencies, to obtain registration to handle controlled substances,
including certain prescription drugs, and to follow specified labeling and
record-keeping requirements for such substances. If we are unable to
maintain our licenses, or if states place burdensome restrictions or
limitations on non-resident pharmacies, this could limit or affect our
ability to operate in some states which could harm our business.
o Federal and state investigations and enforcement actions continue to focus
on the health care industry, scrutinizing a wide range of items such as
joint venture arrangements, referral and billing practices, product
discount arrangements, home health care services, dissemination of
confidential patient information, clinical drug research trials and gifts
for patients or referral sources.
o We are subject to federal and state laws prohibiting entities and
individuals from knowingly and willfully making claims to Medicare and
Medicaid, and other third party payors, that contain false or fraudulent
information. The federal False Claims Act encourages private individuals to
file suits on behalf of the government against health care providers such
as us. As such suits are generally filed under seal with a court to allow
the government adequate time to investigate and determine whether it will
intervene in the action, health care providers affected are often unaware
of the suit until the government has made its determination and the seal is
lifted. Violations or alleged violations of such laws, and any related
suits could result in significant financial or criminal sanctions or
exclusion from participation in the Medicare and Medicaid programs.
There is a delay between our performance of services and our reimbursement.
The health care industry is characterized by delays that typically range from
three to nine months between when services are provided and when the
reimbursement or payment for these services is received. This makes working
capital management, including prompt and diligent billing and collection, an
important factor in our results of operations and liquidity. Trends in the
industry may further extend the collection period and impact our working
capital.
We rely heavily on a limited number of shipping providers, and our business
would be harmed if our rates are increased or our providers are unavailable.
A significant portion of our revenues result from the sale of drugs we deliver
to our patients, and a significant amount of our products are shipped by mail
order, overnight courier, retail pharmacy or in person through our
community-based representatives. The costs incurred in shipping are not passed
on to our customers and, therefore, changes in these costs directly impact our
margins. We depend heavily on these outsourced shipping services for efficient,
cost effective delivery of our product. The risks associated with this
dependence include:
o any significant increase in shipping rates;
o strikes or other service interruptions by these carriers; and
o spoilage of high cost drugs during shipment, since our drugs often
require special handling, such as refrigeration.
RISK RELATED TO OUR COMMON STOCK
Possible volatility of stock price in the public market.
The market price of our common stock has experienced, and may continue to
experience, substantial volatility. Over the past eight quarters, the market
price of our common stock has ranged from a low of $5.20 per share in the second
quarter of 2001 to a high of $22.75 in the first quarter of 2002. Many factors
have influenced the common stock price in the past, including fluctuations in
our earnings and changes in our financial position, management changes, low
trading volume, and negative publicity and uncertainty resulting from the legal
actions brought against us. In addition, the securities markets have, from time
to time, experienced significant broad price and volume fluctuations that may be
unrelated to the operating performance of particular companies. All of these
factors could adversely affect the market price of our common stock.
Provisions of our articles of incorporation and Minnesota law may make it more
difficult for you to receive a change-in-control premium.
Our Board's ability to designate and issue up to 10 million shares of preferred
stock and issue up to 50 million shares of common stock could adversely affect
the voting power of the holders of common stock, and could have the effect of
making it more difficult for a person to acquire, or could discourage a person
from seeking to acquire, control of our company. If this occurred, you could
lose the opportunity to receive a premium on the sale of your shares in a change
of control transaction.
In addition, the Minnesota Business Corporation Act contains provisions that
would have the effect of restricting, delaying or preventing altogether certain
business combinations with any person who becomes an interested stockholder.
Interested stockholders include, among others, any person who, together with
affiliates and associates, acquires 10 percent or more of a corporation's voting
stock in a transaction which is not approved by a duly constituted committee of
the Board of the corporation. These provisions could also limit your ability to
receive a premium in a change of control transaction.
SELLING SHAREHOLDERS
We have agreed to register the resale of 184,080 shares of our common
stock on behalf of certain selling shareholders. The following table lists the
selling shareholders and the number of shares each selling shareholder
beneficially owns and may sell pursuant to this prospectus from time to time.
See "Plan of Distribution." None of the selling shareholders has had a material
relationship with us within the past three years other than as a result of the
ownership of our common stock or as a result of their employment with us as of
the date of the closing of the acquisitions in which they acquired their shares.
Except as otherwise indicated, the number of shares owned by each selling
shareholder after the offering represents less than 1% of our outstanding shares
as of November 1, 2002. Information about the beneficial ownership of our shares
prior to this offering is as of February 4, 2003 and has been given to us by the
selling shareholders. The inclusion of any shares in this table does not
constitute an admission of beneficial ownership by the named selling
shareholder.
Number of Maximum
Shares Number of Number of
Beneficially Shares to be Shares
Owned Prior Sold Pursuant Beneficially
to the to this Owned After the
Name of Selling Shareholder Offering Prospectus(1) Offering(2)
---------------------------------- ------------ ------------ ---------------
---------------------------------- ------------ ------------ ---------------
Fred and Lisa Copeland Family
Trust dated August 4, 1999 208,572 30,686(4) 177,886(5)
Jim Williams 271,972(3) 30,686(4) 241,286(6)
Jon and Ellen Tamiyasu
Irrevocable Trust No. 1 40,707 6,130(4) 34,577
Kelly and Valorie Smith Family
Trust dated December 15 1997 166,746 24,538(4) 142,208(7)
Kelly and Valorie Smith
Irrevocable Trust No. 1 41,707 6,130(4) 35,577
Robert and Sandra Brooks Family
Trust dated April 10, 1987 203,572 30,686(4) 172,886(8)
Tamiyasu Trust dated December
16, 1997 366,417 55,224(4) 311,193(9)
----------- ------- ---------
Total 1,299,693 184,080 1,115,613
-----------
(1) This registration statement also shall cover any additional shares of
common stock which become issuable in connection with the shares
registered for sale hereby by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt
of consideration which results in an increase in the number of our
outstanding shares of common stock.
(2) Assumes the sale of all of the shares offered by this prospectus.
(3) Includes 33,400 shares which Mr. Williams can acquire upon the exercise of
stock options which are exercisable within 60 days of February 4, 2003.
(4) Represents shares to be issued upon conversion of convertible note issued
in connection with our acquisition of Apex Therapeutic Care, Inc.
(5) Represents 1.5% of our outstanding common stock as of November 1, 2002.
(6) Represents 2.0% of our outstanding common stock as of November 1, 2002.
(7) Represents 1.2% of our outstanding common stock as of November 1, 2002.
(8) Represents 1.4% of our outstanding common stock as of November 1, 2002.
(9) Represents 2.6% of our outstanding common stock as of November 1, 2002.
PLAN OF DISTRIBUTION
We are registering these shares on behalf of the selling shareholders. As used
in this prospectus, the term "selling shareholders" includes donees and pledgees
selling shares received from a named selling shareholder after the date of this
prospectus. The selling shareholders will offer and sell the shares to which
this prospectus relates for their own account. We will not receive any proceeds
from the sale of the shares. We will bear all fees and expenses in connection
with the registration of the shares.
The selling shareholders may offer and sell the shares from time to time, at
prices relating to prevailing market prices or at negotiated prices, in one or
more of the following methods: ordinary brokers' transactions, which may include
long sales or short sales effected after the effective date of the registration
statement of which this prospectus is a part; transactions involving cross or
block trades or otherwise on the Nasdaq National Market; purchases by brokers,
dealers or underwriters as principals and resale by the purchasers for their own
accounts pursuant to this prospectus; to or through market makers or into an
existing market for the shares; in other ways not involving market makers or
established trading markets, including direct sales to purchasers or sales
effected through agents; through transactions in options, swaps or other
derivatives (whether exchange-listed or otherwise); or any combination of the
foregoing, or by any other legally available means. Sales may be made to or
through brokers or dealers who may receive compensation in the form of
discounts, concessions or commissions from the selling shareholders or the
purchasers of the shares. As of the date of this prospectus, we are not aware of
any agreement, arrangement or understanding between any broker or dealer and the
selling shareholders regarding the sale of their shares, nor are we aware of any
underwriter or coordinating broker acting in connection with the proposed sale
of shares by the selling shareholders. There is no assurance that the selling
shareholders will sell any or all of the shares that they offer.
The selling shareholders and any brokers or dealers who participate in the sale
of the shares may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), and any commissions
received by them and any profits realized by them on the resale of shares may be
deemed to be underwriting discounts or commissions under the Securities Act.
Because the selling shareholders may be deemed to be "underwriters" within the
meaning of the Securities Act, the selling shareholders will be subject to the
prospectus requirements of the Securities Act. We have informed the selling
shareholders that their sales in the market must comply with the requirements of
the rules and regulations of the Securities Exchange Act of 1934, as amended.
The selling shareholders may also resell all or a portion of these shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of that Rule.
Upon notification to us by a selling shareholder that any material arrangement
has been entered into with a broker or dealer for the sale of shares through a
block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, a supplement to this prospectus will be
filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing
(i) the name of the selling shareholder and of the participating brokers or
dealers, (ii) the number of shares involved, (iii) the price at which such
shares were sold, (iv) the commissions paid or discounts or concessions allowed
to such brokers or dealers, where applicable, (v) that such brokers or dealers
did not conduct any investigation to verify the information set out or
incorporated by reference in this prospectus and (vi) other facts material to
the transaction. In addition, upon notification to us by a selling shareholder
that a donee or pledgee intends to sell more than 500 shares, a supplement to
this prospectus will be filed if required.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered by this
prospectus will be passed upon for us by Dorsey & Whitney LLP, Minneapolis,
Minnesota.
EXPERTS
The consolidated financial statements of Curative Health Services, Inc.
appearing in Curative Health Services, Inc.'s Annual Report (Form 10-K) for the
year ended December 31, 2001, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
The financial statements of eBioCare.com, Inc. for the year ended December 31,
2000, appearing in Curative Health Services, Inc.'s current report on Form 8-K,
filed on April 13, 2001, as amended by a Form 8-K/A, filed on June 12, 2001,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon such
report given on the authority of such firm as experts in accounting and
auditing.
The financial statements of Apex Therapeutic Care, Inc. appearing in Curative
Health Services, Inc.'s current report on Form 8-K, filed on March 11, 2002, as
amended by a Form 8-K/A, filed on May 3, 2002, have been audited by Martini,
Iosue & Akpovi, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such financial statements
are incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-3 with respect to the common stock offered by this
prospectus. This prospectus, which constitutes a part of the registration
statement, does not include all of the information contained in the registration
statement. For further information about us and our common stock, you should
review the registration statement and its exhibits and schedules. You may read
and copy any document we file with the Commission at its public reference room
at 450 Fifth Street NW, Washington, DC 20549. Please call the Commission at
1-800-SEC-0330 for further information about its public reference facilities and
copy charges. Our filings are also available to the public from the Commission's
web site at http://www.sec.gov.
We file periodic reports, proxy statements and other information with the
Commission. These periodic reports, proxy statements and other information are
available for inspection and copying at the Commission's public reference room
and the regional offices listed above and can be obtained over the Internet
through the Commission's web site.
The Commission allows us to incorporate by reference information into this
prospectus. This allows us to disclose important information to you by referring
you to another document filed separately with the Commission. The information
incorporated by reference is deemed to be part of this prospectus, except for
any information superceded by information contained directly in this prospectus.
The documents that we are incorporating by reference are:
o our current report on Form 8-K filed on April 13, 2001, as amended by our
Form 8-K/A filed on June 12, 2001;
o our annual report on Form 10-K for the fiscal year ended December 31,
2001 filed on April 1, 2002;
o our current reports on Form 8-K, filed on May 20, 2002, June 11, 2002,
July 2, 2002, July 29, 2002, September 6, 2002, October 28, 2002,
November 15, 2002, November 25, 2002 and February 14, 2003;
o our current report on Form 8-K, filed on March 11, 2002, as amended by
our Form 8-K/A filed on May 3, 2002;
o our quarterly report on Form 10-Q for the quarter ended September 30,
2002 filed on November 14, 2002; and
o our Registration Statement on Form 8-A filed on June 26, 1991, which
contains a description of our common stock.
We also are incorporating by reference any future filings made by us with the
SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act until
the completion of this offering. The most recent information that we file with
the SEC automatically updates and supercedes more dated information.
You can obtain a copy of any documents which are incorporated by reference in
this prospectus (other than an exhibit to a filing unless that exhibit is
specifically incorporated by reference into that filing) at no cost, by writing
or telephoning the Director of Investor Relations, at Curative Health Services,
Inc., 150 Motor Parkway, Hauppauge, New York 11788, (631) 232-7000.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission. The prospectus relates to 184,080 shares of
our common stock, which the selling shareholders named in this prospectus may
sell from time to time. We will not receive any of the proceeds from these
sales. We have agreed to pay the expenses incurred in registering these shares,
including legal and accounting fees.
These shares have not been registered under the securities laws of any state or
other jurisdiction as of the date of this prospectus. Brokers or dealers should
confirm the existence of any exemption from registration or effect a
registration in connection with any offer and sale of these shares.
This prospectus describes certain risk factors that you should consider before
purchasing these shares. See "Risk Factors" beginning on page 2. You should
read this prospectus together with the additional information described under
the heading, "Where You Can Find More Information."
---------------
You should rely only on the information contained in this document or to which
we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following is an itemized statement of the estimated amounts of expenses
payable by the Registrant, other than underwriting discounts and commissions, in
connection with the registration of the common stock offered hereby. All amounts
are estimates except the SEC registration fee.
SEC Registration Fee $ 301
Legal Fees and Expenses 5,000
Accounting Fees and Expenses 5,000
Miscellaneous 4,699
-----
TOTAL $15,000
Item 15. Indemnification of Officers and Directors
Minnesota Statutes Section 302A.521 provides that a corporation shall indemnify
any person made or threatened to be made a party to a proceeding by reason of
the former or present official capacity of such person against judgments,
penalties, fines (including, without limitation excise taxes assessed against
such person with respect to any employee benefit plan), settlements and
reasonable expenses, including attorneys' fees and disbursements, incurred by
such person in connection with the proceeding, if, with respect to the acts or
omissions of such person complained of in the proceeding, such person (1) has
not been indemnified therefor by another organization or employee benefit plan;
(2) acted in good faith; (3) received no improper personal benefit and Section
302A.255 (with respect to director conflicts of interest), if applicable, has
been satisfied; (4) in the case of a criminal proceeding, had no reasonable
cause to believe the conduct was unlawful; and (5) reasonably believed that the
conduct was in the best interests of the corporation in the case of acts or
omissions in such person's official capacity for the corporation or reasonably
believed that the conduct was not opposed to the best interests of the
corporation in the case of acts or omissions in such person's official capacity
for other affiliated organizations. The bylaws of the company provide that the
company shall indemnify its officers and directors under such circumstances and
to the extent permitted by Section 302A.521 as now enacted or hereafter amended.
Item 16. Exhibits
Exhibit
Number Description of Exhibit
5.1 Opinion of Dorsey & Whitney LLP (previously filed)
23.1 Consent of Ernst & Young LLP*
23.2 Consent of Ernst & Young LLP*
23.3 Consent of Martini, Iosue & Akpovi*
23.4 Consent of Dorsey & Whitney LLP (included in Exhibit 5.1, previously
filed)
24.1 Power of Attorney (previously filed)
--------------
* Filed herewith
Item 17. Undertakings
(a) Rule 415 Offering. 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; and (iii) to include
any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement 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.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference. The
undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934, that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and therefore is unenforceable. In the event that a claim for
indemnification against such liabilities, other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
(c) Registration Statement Permitted by Rule 430A. The undersigned registrant
hereby undertakes that:
(1) For purposes of determining 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 or
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Hauppauge, State of New York, on February 14, 2003.
CURATIVE HEALTH SERVICES, INC.
By: /s/ Thomas Axmacher
----------------------------------------
Thomas Axmacher
Senior VP Finance and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities listed on February 14, 2003:
Signature Title
By: * Chief Executive Officer and Chairman
--------------------------- (principal executive officer)
Joseph Feshbach
By: /s/ Thomas Axmacher Senior VP Finance and Chief Financial Officer
--------------------------- (principal financial and accounting officer)
Thomas Axmacher
By: * Director
---------------------------
Paul S. Auerbach
By: * Director
---------------------------
Daniel E. Berce
By: * Director
---------------------------
Lawrence P. English
By: * Director
---------------------------
John C. Prior
By: * Director
---------------------------
Gerard Moufflet
By: * Director
---------------------------
Timothy I. Maudlin
*By: /s/ Thomas Axmacher
------------------------------------
Thomas Axmacher, as attorney-in-fact
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
5.1 Opinion of Dorsey & Whitney LLP (previously filed)
23.1 Consent of Ernst & Young LLP*
23.2 Consent of Ernst & Young LLP*
23.3 Consent of Martini, Iosue & Akpovi*
23.4 Consent of Dorsey & Whitney LLP (included in Exhibit 5.1, previously
filed)
24.1 Power of Attorney (previously filed)
--------------
* Filed herewith
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-102965) and
related Prospectus of Curative Health Services, Inc. for the registration of
184,080 shares of its common stock and to the incorporation by reference therein
of our report dated March 19, 2002, with respect to the consolidated financial
statements and schedule of Curative Health Services, Inc. included in its Annual
Report (Form 10-K) for the year ended December 31, 2001, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Melville, New York
February 14, 2003
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-102965) and
related Prospectus of Curative Health Services, Inc. for the registration of
184,080 shares of its common stock and to the incorporation by reference therein
of our report dated May 15, 2001, with respect to the financial statements of
eBioCare.com, Inc. for the year ended December 31, 2000 included in Curative
Health Services, Inc.'s current report on Form 8-K, filed April 13, 2001, as
amended by Form 8-K/A filed June 12, 2001, with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Palo Alto, California
February 14, 2003
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 File No. 333-102965) and
related Prospectus of Curative Health Services, Inc. for the registration of
184,080 shares of its common stock and to the incorporation by reference therein
of our reports dated November 2, 2000 and November 30, 2001, with respect to the
consolidated financial statements of Apex Therapeutic Care, Inc. as of and for
the years ended September 30, 2000 and 1999, and September 30, 2001 and 2000,
respectively, appearing in Curative's current report on Form 8-K, filed March
11, 2002, as amended by a Form 8-K/A, filed with the Securities and Exchange
Commission on May 3, 2002.
/s/ Martini, Iosue & Akpovi
Encino, California
February 14, 2003