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<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 504pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">As
filed with the Securities and Exchange Commission on April 30,
2004</p>
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<b>Registration No.
333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b>
<br>
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<p style="font-family:serif;font-weight:bold;color:#000000;font-size:14pt;  width: 504pt; text-align: center; font-style: normal; line-height: 14pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">UNITED
STATES<br> SECURITIES AND EXCHANGE COMMISSION<br>Washington, D.C.
20549</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:14pt;  width: 504pt; text-align: center; font-style: normal; line-height: 16pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">FORM S-8</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:12pt;  width: 504pt; text-align: center; font-style: normal; line-height: 14pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:14pt;  width: 504pt; text-align: center; font-style: normal; line-height: 16pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">Vion Pharmaceuticals, Inc.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:8pt;  width: 504pt; text-align: center; font-style: normal; line-height: 9pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 6pt; background-color: #ffffff;">(Exact Name of Registrant as Specified
in Its
Charter)</p>
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<table cellpadding="0" cellspacing="0" border="0" width="665" bgcolor="#ffffff">
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<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="285"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="306"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
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<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="top" colspan="3">Delaware</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="top" colspan="3">13-3671221</td>
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<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="top" colspan="3">(State
or other jurisdiction of incorporation or organization)</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="top" colspan="3">(I.R.S.
Employer Identification
Number)</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 8pt" align="center" valign="bottom" colspan="3">4
Science Park<br>New Haven,
Connecticut</td>
<td style="padding-top: 8pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 8pt" align="center" valign="bottom" colspan="3">06511</td>
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<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="top" colspan="3">(Address
of Principal Executive Offices)</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="top" colspan="3">(Zip
Code)</td>
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<td><img src="spacer.gif" height="10" width="1"></td>
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<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 504pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">Vion Pharmaceuticals, Inc. 2003
Stock Option Plan<br>Senior Executive Stock Option Plan</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:8pt;  width: 504pt; text-align: center; font-style: normal; line-height: 9pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">(Full Title of the Plans)</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 504pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">
<font style="font-weight: normal; font-style: normal">Howard B. Johnson<br> President and Chief Financial
Officer<br>4 Science Park<br>New Haven, Connecticut 06511<br>(203)
498-4210</font>
</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 504pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">Copies to:</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 504pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">
<font style="font-weight: normal; font-style: normal">Paul
Jacobs, Esq.<br>Lawrence A. Spector, Esq.<br>Fulbright &amp; Jaworski
L.L.P.<br>666 Fifth Avenue<br>New York, New York 10103<br>(212)
318-3000</font>
</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:8pt;  width: 504pt; text-align: center; font-style: normal; line-height: 10pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">
<font style="font-weight: normal; font-style: normal">(Name, address, including zip
code, and telephone number, including area code, of agent for
service)</font>
</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 504pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 6pt; background-color: #ffffff;">CALCULATION OF REGISTRATION FEE</p>
<img src="spacer.gif" height="10" width="1"><br>
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<table cellpadding="0" cellspacing="0" border="0" width="665" bgcolor="#ffffff">
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<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="222"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="84"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
</tr>
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<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3">Title
Of Each Class of<br>Securities To Be Registered</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3">Amount To
Be<br> Registered (1)</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3">Proposed Maximum<br> Offering Price Per
Share</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3">Proposed Maximum<br> Aggregate Offering<br>
Price</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="left" valign="bottom" colspan="3">Amount Of<br>Registration<br>
Fee</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Common Stock $0.01 par value per share, with
common stock purchase rights
(2)</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">2,980,000</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">see
chart
below</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">$</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">15,054,000</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">$</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">1,907.35</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
</tr>
<tr>
<td><img src="spacer.gif" height="10" width="1"></td>
</tr>
</table>
</div>
<table cellpadding="0" cellspacing="0" border="0" width="665">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 8pt;  width: 19.2pt; padding-left: 0pt; text-align: left">(1)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 8pt;  padding-bottom: 6pt;width: 665pt">This
registration statement shall also cover any additional indeterminable
number of shares as may be required pursuant to Vion Pharmaceuticals,
Inc. 2003 Stock Option Plan and the Senior Executive Stock Option Plan,
in the event of a stock dividend, stock split, recapitalization or
other similar change in the Common Stock.</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="665">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 8pt;  width: 19.2pt; padding-left: 0pt; text-align: left">(2)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 8pt;  padding-bottom: 6pt;width: 665pt">The common stock purchase
rights are attached to and trade with common stock of the registrant.
Value attributable to such rights, if any, is reflected in the market
price of the common stock.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 504pt; text-align: left; font-style: normal; line-height: 12pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 6pt; background-color: #ffffff;">The following chart
illustrates the calculation of the registration fee:</p>
<img src="spacer.gif" height="10" width="1"><br>
<div style="border: 1px; width: 665px; padding-top: 2px" align="center">
<table cellpadding="0" cellspacing="0" border="0" width="665" bgcolor="#ffffff">
<tr>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="222"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3">&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3">Number
of Shares</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3">Offering Price<br> Per Share</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3">Maximum
Aggregate<br> Offering Price</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">2003 Stock Option
Plan</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">2,000,000</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">$</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">4.755
</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">(3)&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">$</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">9,510,000</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">
(3)&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Senior Executive Stock</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">760,000</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">$</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">5.775 </font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">(4)&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">$</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">&nbsp;&nbsp;4,389,000</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">(4)&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Option
Plan</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">220,000</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">$</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">5.25&nbsp;&nbsp;</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">(4)&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">$</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">1,155,000</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">
(4)&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="right" valign="bottom" colspan="3">TOTAL:</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">2,980,000</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">&mdash;</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">$</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">15,054,000</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="right" valign="bottom" colspan="3">REGISTRATION
FEE:</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">&mdash;</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">&mdash;</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="right" valign="bottom" colspan="1">$</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 1px solid #000000 ; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">1,907.35</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px solid #000000; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="border-bottom: 1px solid #000000"><img src="spacer.gif" height="1" width="2"></td>
</tr>
<tr>
<td><img src="spacer.gif" height="10" width="1"></td>
</tr>
</table>
</div>
<table cellpadding="0" cellspacing="0" border="0" width="665">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 8pt;  width: 23pt; padding-left: 0pt; text-align: left">(3)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 8pt;  padding-bottom: 6pt;width: 665pt">Pursuant
to Rule 457(h), the aggregate offering price and the fee have been
computed on the basis of $4.755 per share (the average of the high and
the low prices of the registrant's common stock as reported on
the Nasdaq SmallCap Market<sup>SM</sup> on April 26, 2004).</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="665">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 8pt;  width: 23pt; padding-left: 0pt; text-align: left">(4)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 8pt;  padding-bottom: 6pt;width: 665pt">Pursuant to Rule 457(h), the aggregate
offering price and the fee have been computed on the basis of the price
at which the options may be exercised. The offering price per share set
forth for such shares is the exercise price per share at which such
options are
exercisable.</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" width="665">
<tr>
<td><img src="spacer.gif" height="3" width="1"></td>
</tr>
<tr>
<td bgcolor="#000000"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td bgcolor="#000000"><img src="spacer.gif" height="3" width="1"></td>
</tr>
<tr>
<td><img src="spacer.gif" height="3" width="1"></td>
</tr>
</table>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>






<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">Explanatory
Note</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">This registration statement registers 2,000,000 shares of
common stock, par value $.01 per share, of Vion Pharmaceuticals, Inc.
(along with attached common stock purchase rights) that may be issued
and sold upon the exercise of options which have been or may be granted
under our 2003 Stock Option Plan and 980,000 shares of common stock
(along with attached common stock purchase rights) that have been
issued and sold upon the exercise of options granted under our Senior
Executive Stock Option Plan to Alan Kessman, our Chief Executive
Officer.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Under cover of this Form S-8 is our reoffer prospectus
prepared in accordance with Part I of Form S-3 under the Securities
Act. Our reoffer prospectus has been prepared pursuant to Instruction C
of Form S-8 and may be used for reofferings and resales on a continuous
or delayed basis in the future of up to an aggregate of 980,000 shares
of common stock (along with attached common stock purchase rights)
which have been issued to Alan Kessman, our Chief Executive Officer,
upon the exercise of options granted to him under our Senior Executive
Stock Option Plan, and up to an aggregate of 1,856,300 shares of common
stock (along with attached common stock purchase rights) which may be
issued upon the exercise of options that have been or may be granted to
our officers, directors and affiliates under our 2003 Stock Option
Plan. Any of these shares of common stock may be deemed
"control securities" or
"restricted
securities."</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>






<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">PART
I</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The documents containing the information specified in this Part I
will be sent or given to directors, officers, employees and consultants
as specified by Rule 428(b)(1) of the Securities Act. Such documents
need not be filed with the Securities and Exchange Commission
("Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements
pursuant to Rule 424 of the Securities Act. These documents and the
documents incorporated by reference in this Registration Statement
pursuant to Item 3 of Part II of this Registration Statement, taken
together, constitute a prospectus that meets the requirements of
Section 10(a) of the Securities Act.</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>






<page>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The
following reoffer prospectus filed as part of this Registration
Statement has been prepared in accordance with General Instruction C of
Form S-8 and, pursuant thereto, may be used for reofferings and resales
of the shares of common stock registered hereby. The reoffer prospectus
is for use in reoffering and reselling shares of common stock that may
be deemed to be "control securities" or
"restricted securities" under the Securities.
Act.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">
<u>REOFFER PROSPECTUS</u>
</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 19pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 0pt; background-color: #ffffff">Vion Pharmaceuticals, Inc.<br>
2,836,300 Shares of<br> Common Stock, par value $.01 per share</p>
<!--0--><table border="0" cellpadding="0" cellspacing="0" width="602">
<tr>
<td><img src="spacer.gif" width="1" height="1"></td>
</tr>
<tr>
<td><img src="spacer.gif" height="1" width="237"></td>
<td bgcolor="#000000"><img src="spacer.gif" height="1"><img src="spacer.gif" height="1" width="127"></td>
<td><img src="spacer.gif" height="1" width="237"></td>
<td><img src="spacer.gif" height="1" width="475"></td>
</tr>
<tr>
<td><img src="spacer.gif" height="8" width="1"></td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">This prospectus may be used by certain stockholders (the
"Selling Stockholders") to sell a maximum of
2,836,300 shares (the "Shares") of our common
stock, par value $.01 per share, which we have previously issued or may
issue in the future under awards of options and restricted common stock
which have been or may be granted under our 2003 Stock Option Plan and
Senior Executive Stock Option Plan. The Selling Stockholders are our
officers and directors who have received or are eligible to receive
awards of options under those plans and are listed in the section of
this prospectus entitled "Selling
Stockholders." The Selling Stockholders may offer these
Shares for resale from time to time. We will not receive any proceeds
from the sale of the Shares being offered by the Selling Stockholders.
We will pay all of the expenses associated with this prospectus. The
Selling Stockholders will pay the other costs, if any, associated with
the sale of the Shares.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The Selling Shareholders may sell the
Shares covered by this prospectus through various means, including
directly or indirectly to purchasers, in one or more transactions on
any stock exchange or stock market on which the Shares are traded at
the time of sale, in privately negotiated transactions, or through a
combination of these methods. These sales may be at fixed prices, which
may change, at market prices available at the time of sale, at prices
based on the market price at the time of sale, or at negotiated prices.
If the Shares are sold through underwriters, broker-dealers, or agents,
these parties may be compensated for their services in the form of
discounts or commissions, which is deemed to be
"underwriting compensation." Such
underwriting compensation shall be the sole responsibility of the
Selling Stockholders. If required, the Selling Stockholders will
disclose the names of any underwriter(s), applicable commissions or
discounts, and any other required information with respect to any
particular sales in an accompanying prospectus supplement. For
additional information on the Selling Stockholders' possible
methods of sale, you should refer to the section in this prospectus
entitled "Plan of Distribution."</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The
Shares are "control securities" or
"restricted securities" under the Securities
Act of 1933, as amended, before their sale under this reoffer
prospectus. We have prepared this prospectus for the sole purpose of
registering the Shares under the Securities Act in order to allow the
Selling Stockholders to offer and sell the Shares to the public,
subject to any contractual limitations on the Selling Stockholders.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Our common stock is currently traded on the Nasdaq SmallCap
Market<sup>SM</sup> under the symbol "VION."
The last reported sale price of our common stock on the Nasdaq SmallCap
Market on April 29, 2004 was $5.30.</p>
<!--0--><table border="0" cellpadding="0" cellspacing="0" width="602">
<tr>
<td><img src="spacer.gif" width="1" height="1"></td>
</tr>
<tr>
<td><img src="spacer.gif" height="1" width="237"></td>
<td bgcolor="#000000"><img src="spacer.gif" height="1"><img src="spacer.gif" height="1" width="127"></td>
<td><img src="spacer.gif" height="1" width="237"></td>
<td><img src="spacer.gif" height="1" width="475"></td>
</tr>
<tr>
<td><img src="spacer.gif" height="8" width="1"></td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">
<b>Investing in our common stock
involves a high degree of risk. See "Risk
Factors"' beginning page  5.</b>
</p>
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<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">
<b>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.</b>
</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 0pt; background-color: #ffffff">The date of this prospectus
is April 30, 2004</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>






<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 6pt; background-color: #ffffff;">TABLE OF
CONTENTS</p>
<img src="spacer.gif" height="10" width="1"><br>
<div style="border: 1px; width: 602px; padding-top: 12px" align="center">
<table cellpadding="0" cellspacing="0" border="0" width="602" bgcolor="#ffffff">
<tr>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="539"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 9pt" align="center" valign="bottom" colspan="3">&nbsp;</td>
<td style="padding-top: 9pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 9pt" align="center" valign="bottom" colspan="3">Page</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 9pt" align="left" valign="bottom" colspan="3">SUMMARY</td>
<td style="padding-top: 9pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 9pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 9pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">1</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px double #ffffff ; padding-top: 9pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 9pt" align="left" valign="bottom" colspan="3">RECENT DEVELOPMENTS</td>
<td style="padding-top: 9pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 9pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 9pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">3</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px double #ffffff ; padding-top: 9pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 9pt" align="left" valign="bottom" colspan="3">RISK
FACTORS</td>
<td style="padding-top: 9pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 9pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 9pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">5</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px double #ffffff ; padding-top: 9pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 9pt" align="left" valign="bottom" colspan="3">USE OF
PROCEEDS</td>
<td style="padding-top: 9pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 9pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 9pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">11</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 9pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 9pt" align="left" valign="bottom" colspan="3">SELLING
STOCKHOLDERS</td>
<td style="padding-top: 9pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 9pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 9pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">12</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 9pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 9pt" align="left" valign="bottom" colspan="3">PLAN OF
DISTRIBUTION</td>
<td style="padding-top: 9pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 9pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 9pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">14</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 9pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 9pt" align="left" valign="bottom" colspan="3">LEGAL
MATTERS</td>
<td style="padding-top: 9pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 9pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 9pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">15</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 9pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 9pt" align="left" valign="bottom" colspan="3">EXPERTS</td>
<td style="padding-top: 9pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 9pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 9pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">15</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 9pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 9pt" align="left" valign="bottom" colspan="3">NOTE REGARDING FORWARD-LOOKING
STATEMENTS</td>
<td style="padding-top: 9pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 9pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 9pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">15</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 9pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 9pt" align="left" valign="bottom" colspan="3">WHERE YOU CAN FIND MORE
INFORMATION</td>
<td style="padding-top: 9pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 9pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 9pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">15</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 9pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
</tr>
<tr>
<td><img src="spacer.gif" height="10" width="1"></td>
</tr>
</table>
</div>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">i</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>






<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">SUMMARY</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">You should read the entire prospectus, including the section
entitled "Risk Factors," carefully before
making an investment decision.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">Business of Vion</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We are
a development stage company engaged in the development of therapeutics
and technologies for the treatment of cancer. For the years ended
December 31, 2003, 2002 and 2001, we spent $9.7 million, $10.5 million
and $12.5 million, respectively, on research, development and clinical
activities.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Our portfolio of potential products consists of two
distinct small molecule anticancer agents in clinical development and
additional small molecules and a drug delivery system in preclinical
development. 'Preclinical development' or
'preclinical studies' indicate that the product candidates
selected for development are being evaluated for potency, specificity,
manufacturability and pharmacologic activity <font style="font-weight: normal; font-style: italic">in vitro</font>, or cell
culture, and <font style="font-weight: normal; font-style: italic">in vivo</font>, or animal, models. 'Clinical
development' involves a three-phase process. 'Phase
I' indicates safety and proof-of-concept testing and
determination of the maximum tolerated dose in a limited patient
population. 'Phase II' indicates safety, dosing and
activity testing in a limited patient population. 'Phase
III' indicates safety, dosing and efficacy testing in a large
patient population.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Potential Products in Clinical
Development</p>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Triapine<sup>&reg;</sup>
inhibits the enzyme ribonucleotide reductase, and therefore prevents
the replication of tumor cells by blocking a critical step in DNA
synthesis. We are evaluating Triapine in Phase I and Phase II
combination trials. Triapine is also being evaluated in additional
Phase I and Phase II single agent and combination clinical trials
sponsored by the National Cancer Institute (NCI).</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">CLORETAZINE<sup>TM</sup> (VNP40101M) is a
sulfonyl hydrazine alkylating (DNA-damaging) agent. We are evaluating
CLORETAZINE<sup>TM</sup> (VNP40101M) in Phase I single agent and
combination trials. In March 2004, we announced that
CLORETAZINE<sup>TM</sup> (VNP40101M) was designated as a fast track
program by the U.S. Food and Drug Administration (FDA) in relapsed or
refractory acute myeloid leukemia. In March 2004, we initiated a Phase
II trial of CLORETAZINE<sup>TM</sup> (VNP40101M) as a single agent in
acute myeloid leukemia and myelodysplastic syndromes. We also plan to
commence a Phase II trial of CLORETAZINE<sup>TM</sup> (VNP40101M) in
combination with cytosine arabinoside (Ara-C) in acute myeloid leukemia
in 2004. Initiation of a Phase II trial of CLORETAZINE<sup>TM</sup>
(VNP40101M) in human glioma (brain cancer) is planned for 2004 under an
investigator's Investigational New Drug Application (IND).</td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Potential Products in Preclinical
Development</p>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Heterocyclic hydrazones are
anticancer compounds that have demonstrated potent anti-tumor effects
in preclinical studies. The mechanisms of action for these compounds
are unidentified at this time but appear to be unlike any commercially
available anticancer agents that we know of. In December 2003, we
entered into an exclusive research collaboration and option agreement
related to these compounds and we are now evaluating heterocyclic
hydrazones in preclinical
studies.</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">KS119, an additional cytotoxic
(cell damaging) compound from the sulfonyl hydrazine class, has been
demonstrated in preclinical studies to be highly selective for hypoxic
(poorly oxygenated) cells which are found in tumors and are often hard
to treat with conventional anticancer agents. We are evaluating KS119
in preclinical
studies.</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">TAPET<sup>&reg;</sup> (Tumor
Amplified Protein Expression Therapy), our drug delivery system using
modified <font style="font-weight: normal; font-style: italic">Salmonella</font> bacteria, is designed to deliver anticancer
agents directly to solid tumors. Our first-generation TAPET bacteria,
VNP20009, was previously evaluated in Phase I trials. Based on the
clinical evidence provided by VNP20009, we developed two
second-generation </td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">1</p>
<br>
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<br>
<page>
<table cellpadding="0" cellspacing="0" border="0" width="602">
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<td><img src="spacer.gif" height="1" width="554"></td>
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<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 0pt; text-align: left;  font-style: normal; width: 36pt">&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">
TAPET vectors designed for improved
colonization of human tumors. Both of these vectors have been evaluated
in veterinary clinical trials in dogs with spontaneous tumors. We
continue to evaluate one of these vectors in additional veterinary
clinical studies in dogs.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Our product development programs are
based on technologies that we license from Yale University and other
cancer research centers. Our product development strategy consists of
two main approaches. First, we engage in product development with
respect to anticancer therapeutics and technologies through in-house
preclinical and clinical development and through collaboration with
academic institutions. Second, depending on financial and
pharmaceutical market conditions and required resources, we determine
the best method and/or partnership to develop, and eventually market,
our products.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">At the present time, under our current operating
plan, after giving effect to the receipt of approximately $32.9 million
of net proceeds from a private placement of our common stock and
warrants in February 2004 and receipt of $5.8 million from exercises in
2004 of warrants issued in connection with 2003 private placements, we
believe that we have sufficient cash to fund our operations into 2006.
Our plan of operations for the next 12 months includes the following
elements:</p>
<table cellpadding="0" cellspacing="0" border="0" width="602">
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<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Conduct Phase I
clinical studies of an intravenous formulation of Triapine in
combination with standard chemotherapy
treatments;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Conduct Phase I
clinical studies of an oral formulation of Triapine;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Conduct Phase II clinical studies
of an intravenous formulation of Triapine in combination with standard
chemotherapy
treatments;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Provide product
for Phase I and Phase II clinical studies to be sponsored by the NCI of
an intravenous formulation of Triapine as a single agent and in
combination with standard chemotherapy
treatments;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Conduct Phase I
clinical studies of CLORETAZINE<sup>TM</sup> (VNP40101M) as a single
agent and in combination with standard chemotherapy
treatments;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Conduct Phase II
clinical studies of CLORETAZINE<sup>TM</sup> (VNP40101M) as a single
agent and in combination with standard chemotherapy
treatments;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Provide product
for a Phase II study of CLORETAZINE<sup>TM</sup> (VNP40101M) to be
conducted under an investigator's
IND;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Conduct additional
clinical trials of Triapine and/or CLORETAZINE<sup>TM</sup>
(VNP40101M), depending on the results of the clinical trials already
underway;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Continue to evaluate
one second-generation TAPET vector in veterinary clinical
trials;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Continue to conduct
internal product development studies with respect to our clinical
products and other product candidates that we may identify, including
heterocyclic hydrazones and
KS119;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Continue to support
research and development being performed at Yale University and by
other collaborators;
and</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Continue to seek
collaborative partnerships, joint ventures, co-promotional agreements
or other arrangements with third parties.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Our operating plans
and capital requirements for the next twelve months may vary materially
from the foregoing because of the results of research and development,
clinical studies, product testing, relationships with strategic
partners, changes in the focus and direction of our research and
development programs, competitive and technological advances, the
regulatory process in the United States and abroad and other
factors.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We were incorporated in March 1992 as a Delaware
corporation named MelaRx Pharmaceuticals, Inc. In April 1995 we changed
our name to OncoRx, Inc. in connection with a merger, and in April 1996
we changed our name to Vion Pharmaceuticals, Inc. Our executive offices
are located at 4 Science Park, New Haven, Connecticut 06511, and our
telephone number is (203) 498-4210. Our website address is
www.vionpharm.com. The information on our website is not part of this
prospectus.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">2</p>
<br>
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<br>
<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">RECENT DEVELOPMENTS</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">Private
Placement</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">On February 11, 2004, we completed a private
placement of 13,553,845 shares of our common stock together with
warrants for the purchase of an additional 3,388,463 shares of our
common stock, for an aggregate consideration of $35,239,997, or $2.60
for a unit consisting of a share of our common stock and a warrant to
purchase one-quarter of a share of common stock. In addition, we issued
to the placement agent, Rodman &amp; Renshaw, Inc., a warrant to
purchase 300,000 shares of our common stock.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">In connection with
the private placement, we agreed that until the earlier of June 10,
2004 or 15 calendar days after the effective date of the registration
statement on Form S-3 that we filed on March 29, 2004 with respect to
the resale of the shares of common stock sold and the shares of common
stock issuable upon the exercise of the warrants issued in the private
placement, we shall not effect a sale of our common stock or securities
convertible into common stock. We further agreed not to file any
registration statement with respect to any sale of common stock or
convertible securities prior to 15 calendar days after the effective
date of such registration statement. The Shares covered by this
prospectus are exempt from the restrictions set forth above.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 10pt; padding-bottom: 0pt; background-color: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;Warrants</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The warrants issued as part of the private
placement, including the warrants issued to Rodman &amp; Renshaw, Inc.,
have an exercise price of $3.25 per share of common stock, subject to
anti-dilution adjustments in connection with dividends on shares of our
common stock, and subdivisions, combinations and reclassifications of
our common stock. The warrants may also be exercised on a
"cashless" basis if, but only if, at any time
after February 11, 2005 there is no effective registration statement
registering the resale of the warrant shares by the holder. The
warrants expire on February  11, 2009.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">If we complete a
reorganization, reclassification, merger, consolidation or disposition
of assets, then the holders of the warrants shall have the right
thereafter to receive upon exercise of the warrants, the number of
shares of common stock of the successor or acquiring corporation or of
our company if it is the surviving corporation, and other property
receivable upon or as a result of the transaction by a holder of the
number of shares of common stock for which the warrants are exercisable
immediately prior to the transaction.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The warrants are not
exercisable by any selling stockholder to the extent that such exercise
would make the selling stockholder the beneficial holder of more than
4.999% of our total outstanding common stock.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">After a
period of 12 months following the effective date of the registration
statement on Form S-3 covering the resale of the shares issuable upon
exercise of the warrants, if the volume weighted average price of the
common stock is at or above $4.875 per share for 20 consecutive trading
days, then the warrants shall become callable by the Company upon
written notice within 10 trading days of such period.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We are
subject to potential daily monetary penalties for failure to timely
deliver stock certificates representing shares of common stock upon the
exercise of the warrants. If we fail to deliver a stock certificate
within five trading days after the exercise of warrants, and if, due to
that failure, a selling stockholder has to buy shares in the market, we
must pay the selling stockholder the amount of the difference between
the price at which the selling stockholder had to buy shares in the
market and the price at which he gave the order to sell shares, and we
must either reinstate the warrant or deliver shares of common stock at
the election of the selling stockholder.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 10pt; padding-bottom: 0pt; background-color: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;Registration
Rights</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We entered into a registration rights agreement with the
purchasers of our securities in the private placement. In accordance
with the registration rights agreement, we filed a registration
</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">3</p>
<br>
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<br>
<page>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: pt; background-color: #ffffff">
statement on Form S-3 on March 29, 2004,
covering the resale of all of the shares of our common stock sold by us
in the private placement and all shares of our common stock issuable
upon the exercise of the warrants issued to the purchasers as part of
the private placement. We must cause the registration statement to
become effective as soon as practicable, but in no event later than May
21, 2004, or June 20, 2004 if the registration statement is reviewed by
the SEC. If such registration statement is not declared effective by
the SEC on or before the May 21, 2004, or June 20, 2004, if applicable,
registration deadline, or if after such registration statement has been
declared effective by the SEC, sales of the shares of common stock
covered by the registration statement cannot be made pursuant to the
registration statement for any reason, then at the time of the event,
we are required to make payments to the purchasers in the amount of
2.0% of the aggregate purchase price paid in the private
placement by the purchasers for the shares of our common stock held by
them. Additional payments of 2.0% of the aggregate purchase
price paid by the purchasers for the shares of our common stock held by
them are payable on each monthly anniversary thereafter until we have
complied with our obligations under the registration rights
agreement.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">4</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">RISK FACTORS</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">In addition to the
other information in this prospectus, you should carefully consider the
following factors in evaluating us and our business before purchasing
the shares of common stock offered hereby. This prospectus contains, in
addition to historical information, forward-looking statements that
involve risks and uncertainties. Our actual results could differ
materially. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below, as well as
those discussed elsewhere in this prospectus, including the documents
incorporated by reference.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">If we fail to obtain the capital necessary to fund
our operations, we will be unable to continue or complete our product
development.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We will need to raise substantial additional
capital to fund operations and complete our product development. As of
December 31, 2003, we had $15.7 million in cash, cash equivalents and
short-term investments (not including the net proceeds of $32.9 million
from our recent private placement of common stock and warrants and
additional proceeds of $5.8 million from recent exercises of certain
warrants) to fund our operations and continue our product development.
We will not have an approved and marketable product for the foreseeable
future. Accordingly, we will need to raise substantial additional
capital to have sufficient capital to fund our operations in 2006 and
beyond.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We may not get funding when we need it or on favorable
terms. If we cannot raise adequate funds to satisfy our capital
requirements, we may have to delay, scale-back or eliminate our
research and development activities, clinical studies or future
operations. We might have to license our technology to others. This
could result in sharing revenues which we might otherwise retain for
ourselves. Any of these actions may harm our business, financial
condition and results of operations.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The amount of capital we
may need depends on many factors,
including:</p>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">the progress, timing and
scope of our product development
programs;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">the progress, timing and
scope of our preclinical studies and clinical
trials;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">the time and cost necessary to
obtain regulatory approvals;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">the time
and cost necessary to further develop manufacturing processes, arrange
for contract manufacturing or build manufacturing facilities and obtain
the necessary regulatory approvals for those
facilities;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">the time and cost necessary
to develop sales, marketing and distribution
capabilities;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">our ability to enter into
and maintain collaborative, licensing and other commercial
relationships; and</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">our partners'
commitment of time and resource to the development of our products.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">We have limited access to the capital markets and, if we can
raise additional funding, stockholders may experience extreme
dilution.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We have limited access to the capital markets to
raise capital. The capital markets have been unpredictable in the past,
especially for drug development companies and unprofitable companies
such as ours. In addition, it is difficult to raise capital under
current market conditions. The amount of capital that a company such as
ours is able to raise often depends on variables that are beyond our
control, such as the share price of our stock and its trading volume.
As a result, we may not be able to secure financing on terms attractive
to us, or at all. If we are able to consummate a financing arrangement,
the amount raised may not be sufficient to meet our future needs. If
adequate funds are not available on acceptable terms, or at all, our
business, including our technology licenses, relationships with key
suppliers, results of operations, financial condition and our continued
viability will be materially adversely affected.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">To the extent
we encounter additional opportunities to raise cash, we would likely
sell additional equity or debt securities. Due to our current stock
price and market conditions, and the amount of </p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">5</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: pt; background-color: #ffffff">
capital we need, any such debt or equity
securities are likely to be sold at relatively low prices, including
prices which are below the market prices of our stock, and may have
substantial rights to control the Company. In our private placement in
June 2003, shares of common stock were sold at $1.30 per share which
was approximately 64% of market price at the time. Stockholders
are likely to experience extreme dilution as well as subordination of
their rights. We do not have any contractual restrictions on our
ability to incur debt. Any indebtedness could contain covenants that
restrict our operations.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">In connection with our most recent
private placement of common stock and warrants in February 2004, we
agreed that until the earlier of June 10, 2004 or 15 calendar days
after the effective date of the registration statement we filed on
March 29, 2004 with respect to the resale of the shares of common stock
sold and the shares of common stock issuable upon the exercise of the
warrants issued in the private placement, we shall not effect a sale of
our common stock or securities convertible into common stock. We
further agreed not to file any registration statement with respect to
any such sale of common stock or convertible securities prior to 15
calendar days after the effective date of such registration statement.
This delay in our ability to sell securities and effectuate a financing
could have a material adverse effect on our ability to fund our
company.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">We may expand our business through new
acquisitions that could disrupt our business, harm our financial
condition and may also dilute current stockholders' ownership
interests in our company.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Our business strategy includes
expanding our products and capabilities, and we may seek acquisitions
to do so. Acquisitions involve numerous risks, including:</p>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">substantial cash
expenditures;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">potentially dilutive
issuance of equity
securities;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">incurrence of debt and
contingent liabilities, some of which may be difficult or impossible to
identify at the time of
acquisition;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">difficulties in
assimilating the operations of the acquired
companies;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">diverting our
management's attention away from other business
concerns;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">risks of entering markets in
which we have limited or no direct experience;
and</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">the potential loss of our key
employees or key employees of the acquired companies.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We cannot
assure you that any acquisition will result in short-term or long-term
benefits to us. We may incorrectly judge the value or worth of an
acquired company or business. In addition, our future success would
depend in part on our ability to manage the rapid growth associated
with some of these acquisitions. We cannot assure you that we will be
able to make the combination of our business with that of acquired
businesses or companies work or be successful. Furthermore, the
development or expansion of our business or any acquired business or
companies may require a substantial capital investment by us. We may
not have these necessary funds or they might not be available to us on
acceptable terms or at all. We may also seek to raise funds by selling
shares of our stock, which could dilute current stockholder's
ownership interest in our company.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">If we continue to
incur operating losses, we may be unable to continue our
operations.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We have incurred losses since inception. As of
December 31, 2003, we had an accumulated deficit of approximately
$115.7 million. If we continue to incur operating losses and fail to
become a profitable company, we may be unable to continue our
operations. Since we began our business, we have focused on research,
development and clinical trials of product candidates. We expect to
continue to operate at a net loss for at least the next several years
as we continue our research and development efforts, continue to
conduct clinical trials and develop manufacturing, sales, marketing and
distribution capabilities. Our future profitability depends on our
receiving regulatory approval of our product candidates and our ability
to successfully manufacture and market approved drugs. The extent of
our future losses and the timing of our profitability are highly
uncertain.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">6</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">If we do not obtain regulatory
approval for our products, we will not be able to sell our products and
the value of our company and our financial results will be harmed.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We cannot sell or market our drugs without regulatory approval. If
we cannot obtain regulatory approval for our products, the value of our
company and our financial results will be harmed. In the United States,
we must obtain approval from the U.S. Food and Drug Administration, or
FDA, for each drug that we intend to sell. The current status of our
potential products is as follows:</p>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Triapine<sup>&reg;</sup> is being
evaluated in Phase I and Phase II clinical trials in combination with
standard chemotherapies. The National Cancer Institute is also
sponsoring additional Phase I and Phase II trials of Triapine as a
single agent and in combination with standard
chemotherapies;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">CLORETAZINE<sup>TM</sup>
(VNP40101M) is being evaluated in Phase I trials as a single agent and
in combination with a standard chemotherapy and in Phase II trials as a
single agent; and</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Heterocyclic
hydrazones, KS119 and a second-generation TAPET<sup>&reg;</sup> vector
are being evaluated in preclinical studies.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">If and when we
complete the several phases of clinical testing for each drug
candidate, we will submit our test results to the FDA. FDA review may
generally take up to two years and approval is not assured. Foreign
governments also regulate drugs distributed outside the United States.
A delay in obtaining regulatory approvals for any of our drug
candidates will also have a material adverse effect on our
business.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">If our drug trials are delayed or
achieve unfavorable results, we will not be able to obtain regulatory
approvals for our products.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We must conduct extensive testing
of our product candidates before we can obtain regulatory approval for
our products. We need to conduct human clinical trials. These tests and
trials may not achieve favorable results. We would need to reevaluate
any drug that did not test favorably and either alter the drug or dose,
or abandon the drug development project. In such circumstances, we
would not be able to obtain regulatory approval on a timely basis, if
ever.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Factors that can cause delay or termination in our
clinical trials include:</p>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">slow patient
enrollment;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">long treatment time
required to demonstrate safety and
effectiveness;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">lack of sufficient
supplies of the product
candidate;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">adverse medical events or
side effects in treated patients;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">lack
of effectiveness of the product candidate being tested;
and</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">lack of sufficient funds.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">If the testing or use of our potential products harms
people, we could be subject to costly and damaging product liability
claims.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Our business exposes us to potential product liability
risks that are inherent in the testing, manufacturing and marketing of
drug products including, but not limited to, unacceptable side effects.
These risks are particularly inherent in human trials of our proposed
products. Side effects and other liability risks could give rise to
viable product liability claims against us. While we have obtained
insurance coverage for patients enrolled in clinical trials, we may not
be able to maintain this insurance on acceptable terms, insurance may
not provide adequate coverage against potential liabilities and we may
need additional insurance coverage for expanded clinical trials and
commercial activity. As a result, product liability claims, even if
successfully defended, could have a material adverse effect on our
business, financial condition and results of operations.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">If our potential products cause unacceptable side effects,
we will not be able to commercialize our<br> products.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Unacceptable side effects may be discovered during preclinical and
clinical testing of one or more of our potential products. If the side
effects are determined unacceptable, we will not be able to
commercialize our products.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">7</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">If we are found to be infringing on
patents or trade secrets owned by others, we may be forced to cease or
alter our drug development efforts, obtain a license to continue the
development or sale of our products, and/or pay damages.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Our
manufacturing processes and potential products may conflict with
patents that have been or may be granted to competitors, universities
or others, or the trade secrets of those persons and entities. As the
drug development industry expands and more patents are issued, the risk
increases that our processes and potential products may give rise to
claims that they infringe the patents or trade secrets of others. These
other persons could bring legal actions against us claiming damages and
seeking to enjoin clinical testing, manufacturing and marketing of the
affected product or process. If any of these actions are successful, in
addition to any potential liability for damages, we could be required
to obtain a license in order to continue to conduct clinical tests,
manufacture or market the affected product or use the affected process.
Required licenses may not be available on acceptable terms, if at all,
and the results of litigation are uncertain. If we become involved in
litigation or other proceedings, it could consume a substantial portion
of our financial resources and the efforts of our personnel.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">We rely on confidentiality agreements to protect our trade
secrets. If these agreements are breached by our employees or other
parties, our trade secrets may become known to our competitors.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We rely on trade secrets that we seek to protect through
confidentiality agreements with our employees and other parties. If
these agreements are breached, our competitors may obtain and use our
trade secrets to gain a competitive advantage over us. We may not have
any remedies against our competitors and any remedies that may be
available to us may not be adequate to protect our business and
compensate us for the damaging disclosure. In addition, we may have to
expend resources to protect our interests from possible infringement by
others.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">If we fail to recruit and retain key personnel,
our research and development programs may be delayed.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We are
highly dependent upon the efforts of our senior management and
scientific personnel, particularly, Alan Kessman, our chief executive
officer and director; Howard B. Johnson, our president and chief
financial officer; Mario Sznol, M.D., our vice president, clinical
affairs and Ivan King, Ph.D., our vice president, research and
development. There is intense competition in the drug development
industry for qualified scientific and technical personnel. Since our
business is very technical and specialized, we need to continue to
attract and retain such people. We may not be able to continue to
attract and retain the qualified personnel necessary for developing our
business, particularly in light of our need to raise substantial
additional financing in order to continue our operations in 2006 and
beyond. We have no key man insurance policies on any of the officers
listed above and we only have an employment agreement with Mr. Kessman.
If we lose the services of our management and scientific personnel or
fail to recruit other scientific and technical personnel, our research
and product development programs will be significantly and
detrimentally affected.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">We face intense
competition in the market for anticancer products, and if we are unable
to compete successfully, our business will suffer.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Numerous
pharmaceutical and biotechnology companies have publicly announced
their intention to develop drugs that target the replication of tumor
cells including, in some instances, the development of agents which
target ribonucleotide reductase similar to our compound Triapine&reg;,
agents which are alkylating agents similar to our compound
CLORETAZINE<sup>TM</sup> (VNP40101M) and agents which are drug delivery
systems. These companies include, but are not limited to, Bristol-Myers
Squibb Company, Pfizer Inc., Chiron Corporation, Amgen Inc., Genentech
Inc., ImClone Systems Inc., OSI Pharmaceuticals, Inc., Lorus
Therapeutics Inc., AstraZeneca PLC, Schering-Plough Corporation and Eli
Lilly and Company. These and other large pharmaceutical companies have
substantially greater financial and other resources and development
capabilities than we do and have substantially greater experience in
undertaking preclinical and clinical testing of products, obtaining
regulatory approvals, and manufacturing and marketing pharmaceutical
products. In addition, our competitors </p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">8</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: pt; background-color: #ffffff">
may succeed in obtaining approval for products
more rapidly than us and in developing and commercializing products
that are safer and more effective than those that we propose to
develop. The existence of these products, other products or treatments
of which we are not aware or products or treatments that may be
developed in the future may adversely affect the marketability of our
products by rendering them less competitive or obsolete. In addition to
competing with universities and other research institutions in the
development of products, technologies and processes, we may compete
with other companies in acquiring rights to products or technologies
from universities.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">If our corporate partners,
licensors, licensees, collaborators at research institutions and others
do not conduct activities in accordance with our arrangements, our
research and development efforts may be delayed.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Our strategy
for the research, development and commercialization of our products
entails entering into various arrangements with corporate partners,
licensors, licensees, collaborators at research institutions and
others. We currently depend on the following third
parties:</p>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">The National Cancer Institute
and its network of clinical investigators for sponsoring and conducting
Phase I and Phase II single agent and combination clinical trials of
Triapine;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Yale University, or Yale, for
collaborative research and for technologies that are licensed by them
to us;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Beijing Pason Pharmaceuticals,
Inc. for the development of Triapine in the People's Republic of
China, Hong Kong, Macao and
Taiwan;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Healthcare facilities in the
United States and other countries to perform human clinical trials of
our products;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Clinical research
organizations in the United States and other countries to monitor and
collect data related to human clinical trials; and</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">Contract manufacturers to produce limited
quantities of our products for use in preclinical and clinical
activities.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">If the third parties do not conduct activities in
accordance with the arrangements we have with them, our research and
development efforts may be delayed. We may also rely on other
collaborative partners to obtain regulatory approvals and to
manufacture and market our products. The amount and timing of resources
to be devoted to these activities by these other parties may not be
within our control.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">If Yale does not conduct research
relating to products we would like to pursue, we may never realize any
benefits from our funding provided to Yale.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Through December
31, 2003, we have paid approximately $9.9 million to Yale for research
funding. We have agreed to pay an additional $250,000 to support the
research activities of one of our directors, an affiliate of Yale,
through March 31, 2005. We may continue to support certain research
projects at Yale. We generally do not have the right to control the
research that Yale is conducting with our funding, and our funds may
not be used to conduct research relating to products that we would like
to pursue. Additionally, if the research being conducted by Yale
results in technologies that Yale has not already licensed or agreed to
license to us, we may need to negotiate additional license agreements
or we may be unable to utilize those technologies.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">There may be an adverse effect on the market price
of our common stock as a result of shares being available for sale in
the future.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Future additional sales of a substantial amount of
common stock in the public market or by private placement, or the
perception that these sales may occur, could adversely affect the
market price of our common stock from time to time. This could also
impair our ability to raise additional capital through the sale of our
equity securities. We had approximately 55.2 million shares of common
</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">9</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: pt; background-color: #ffffff">
stock outstanding as of March 31, 2004,
including 13,553,845 shares from our recent private placement of common
stock and warrants. Options and warrants to purchase approximately 13.6
million shares of common stock, including warrants to purchase
3,688,463 shares of our common stock from our recent private placement,
were exercisable at March 31, 2004 and other options to purchase
approximately 0.9 million shares of common stock become exercisable at
various times through 2008.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">If environmental laws become
stricter in the future, we may face large capital expenditures in order
to comply with environmental laws.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We cannot accurately predict
the outcome or timing of future expenditures that we may be required to
expend to comply with comprehensive federal, state and local
environmental laws and regulations. We must comply with environmental
laws that govern, among other things, all emissions, waste water
discharge and solid and hazardous waste disposal, and the remediation
of contamination associated with generation, handling and disposal
activities. To date, we have not incurred significant costs and are not
aware of any significant liabilities associated with our compliance
with federal, state and local laws and regulations. However,
environmental laws have changed in recent years and we may become
subject to stricter environmental standards in the future and may face
large capital expenditures to comply with environmental laws. We have
limited capital and are uncertain whether we will be able to pay for
significantly large capital expenditures. Also, future developments,
administrative actions or liabilities relating to environmental matters
may have a material adverse effect on our financial condition or
results of operations.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">All of our operations are performed under
strict environmental and health safety controls consistent with the
Occupational Safety and Health Administration, the Environmental
Protection Agency and the Nuclear Regulatory Commission regulations. We
cannot be certain that we will be able to control all health and safety
problems. If we cannot control those problems, we may be held liable
and may be required to pay the costs of remediation. These liabilities
and costs could be material.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">Even if we obtain
regulatory approval for our products, we currently lack the ability and
resources to commercialize the products.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">If our products are
approved for sale by regulatory authorities, we will need to develop
manufacturing and marketing capability or make arrangements with third
parties to manufacture, distribute and sell our products. We do not
currently have and are not seeking arrangements for manufacturing or
marketing products on a commercial basis.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 13pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">If the price
of our common stock declines to below $1.00 per share, our shares could
be delisted from the Nasdaq SmallCap Market<sup>SM</sup>.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">If
the price of our common stock declines below $1.00 per share, we may
fail to meet Nasdaq's maintenance criteria, which may result in
the delisting of our common stock from the Nasdaq SmallCap
Market<sup>SM</sup>. In such event, trading, if any, in our common
stock may then continue to be conducted in the non-Nasdaq
over-the-counter market in what are commonly referred to as the
electronic bulletin board and the "pink
sheets". As a result, an investor may find it more
difficult to dispose of or obtain accurate quotations as to the market
value of our common stock. In addition, we would be subject to a Rule
promulgated by the Securities and Exchange Commission that, if we fail
to meet criteria set forth in such Rule, imposes various practice
requirements on broker-dealers who sell securities governed by the Rule
to persons other than established customers and accredited investors.
For these types of transactions, the broker-dealer must make a special
suitability determination for the purchaser and have received the
purchaser's written consent to the transactions prior to the
sale. Consequently, the Rule may have a materially adverse effect on
the ability of broker-dealers to sell our securities, which may
materially affect the ability of stockholders to sell our securities in
the secondary market.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">A delisting from the Nasdaq SmallCap
Market<sup>SM</sup> will also make us ineligible to use Form S-3 to
register shares of our common stock with the Securities and Exchange
Commission, thereby making it </p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">10</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: pt; background-color: #ffffff">
more difficult and expensive for us to
register our common stock and raise additional capital. We would also
incur additional costs under state blue-sky laws to sell equity if we
are delisted.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Additionally, we may decide to, or certain of our
investors may require that, we implement a reverse stock split in order
to maintain a higher stock price. The effect of any reverse stock split
of the common stock upon the market price of our common stock cannot be
predicted, and the history of reverse stock splits for companies in
similar circumstances is varied. The trading price of our common stock
may not rise in exact proportion to the reduction in the number of
shares of our common stock outstanding as a result of the reverse stock
split, and there may not be a sustained increase in the trading price
of our common stock after giving effect to the reverse stock split.
Moreover, the trading price may not remain above the thresholds
required by the Nasdaq SmallCap Market and we may not be able to
continue to meet the other continued listing requirements of the Nasdaq
SmallCap Market.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The resulting decrease in the number of shares
of our common stock outstanding could potentially impact the liquidity
of our common stock, especially in the case of larger block trades. The
reverse stock split would result in some stockholders owning
"odd-lots" of less than 100 shares of common
stock. Brokerage commissions and other costs of transactions in
odd-lots are generally higher than the costs of transactions in
"round-lots" of even multiples of 100
shares.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The reverse stock split could also result in a greater
spread between the number of authorized shares and the number of
outstanding shares, which may have the effect of discouraging an
attempt to change control of the Company, especially in the event of a
hostile takeover bid, and to make more difficult the removal of
incumbent management.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: italic; line-height: 11pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">The rights that have been and may
in the future be granted to our stockholders may allow our Board and
management to deter a potential acquisition in which the Board and
management are to be replaced.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We have in place a stockholder
rights plan, or "poison pill", which enables
our board of directors to issue rights to purchase common stock when
someone acquires 20% or more of the outstanding shares of our
common stock. As a result of the plan, anyone wishing to take over the
company would most likely be forced to negotiate a transaction with our
Board and management in order not to trigger the pill. The need to
negotiate with the Board or management could frustrate a proposed
takeover particularly where the Board and management wish to remain
entrenched. This would prevent our stockholders from participating in a
takeover or tender offer, which might be of substantial value to
them.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">USE OF PROCEEDS</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The Selling Stockholders will
receive all of the proceeds from the resale of the Shares that may be
sold using this prospectus. We will not receive any of the proceeds
from the resale of the Shares. We will however receive the exercise
price of any options exercised by the Selling Stockholders. Any such
proceeds will be used for general corporate purposes.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">11</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">SELLING STOCKHOLDERS</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">This
prospectus relates to the Shares that are being registered for resale
by the Selling Stockholders who have acquired or may acquire Shares
pursuant to our 2003 Stock Option Plan and Senior Executive Stock
Option Plan. The Selling Stockholders are as follows:</p>
<img src="spacer.gif" height="10" width="1"><br>
<div style="border: 1px; width: 602px; padding-top: 12px" align="center">
<table cellpadding="0" cellspacing="0" border="0" width="444" bgcolor="#ffffff">
<tr>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="190"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Stephen
K. Carter, M.D.</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Director</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Frank T.
Cary</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Director</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Alan Kessman</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Director
and Chief Executive Officer</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Charles K.
MacDonald</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Director</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">William R.
Miller</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Director</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Alan C. Sartorelli,
Ph.D.</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Director</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Walter B.
Wriston</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Director</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Howard B.
Johnson</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">President and Chief Financial
Officer</td>
</tr>
<tr>
<td><img src="spacer.gif" height="10" width="1"></td>
</tr>
</table>
</div>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The table below sets forth certain
information regarding the beneficial ownership of common stock of the
Selling Stockholders as of April 1, 2004, and the number of the Shares
being offered by this prospectus. The information contained in this
table may be amended or supplemented from time to
time.</p>
<img src="spacer.gif" height="10" width="1"><br>
<div style="border: 1px; width: 602px; padding-top: 6px" align="center">
<table cellpadding="0" cellspacing="0" border="0" width="602" bgcolor="#ffffff">
<tr>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="190"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="72"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="72"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3" rowspan="2">Name
of Seller</td>
<td style="padding-top: 0pt " rowspan="2"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3" rowspan="2">Number of<br>shares<br>
beneficially<br>owned prior<br>to the<br>offering
(1)</td>
<td style="padding-top: 0pt " rowspan="2"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3" rowspan="2">Total<br>number of<br>shares<br>covered
by<br>this<br>prospectus</td>
<td style="padding-top: 0pt " rowspan="2"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3" rowspan="2">Number of shares<br>issued
upon exercise<br>of options and<br> underlying
currently<br>exercisable options<br>covered by
this<br>prospectus</td>
<td style="padding-top: 0pt " rowspan="2"><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="7">After all shares
underlying<br>currently exercisable options<br>are resold under
this<br>prospectus</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3">Number
of<br>shares<br>beneficially<br>owned</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3">% of
common<br>stock<br>beneficially<br>owned</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Stephen
K. Carter,
M.D.</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">42,740</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">(3)&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">(2)</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">0</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">42,740</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;"></font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px double #ffffff ; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">*&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Frank
T.
Cary</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">145,458</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">(4)&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">(2)</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">0</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">145,458</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;"></font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px double #ffffff ; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">*&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Alan
Kessman</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">1,350,074</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">(5)&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">(2)</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">980,000</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">370,074</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;"></font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px double #ffffff ; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">*&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Charles
K.
MacDonald</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">57,740</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">(6)&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">(2)</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">0</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">57,740</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;"></font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px double #ffffff ; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">*&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">William
R.
Miller</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">324,117</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">(7)&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">(2)</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">0</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">324,117</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;"></font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px double #ffffff ; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">*&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Alan
C. Sartorelli,
Ph.D.</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">482,402</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">(8)&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">(2)</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">0</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">482,402</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;"></font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px double #ffffff ; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">*&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Walter
B.
Wriston</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">140,458</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">(9)&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">(2)</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">0</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">140,458</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;"></font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px double #ffffff ; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">*&nbsp;</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Howard
B.
Johnson</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">247,499</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">(10)&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">(2)</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">0</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">247,499</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 0pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 0pt; text-indent: 0pt;  padding-top: 0pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;"></font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 1px double #ffffff ; padding-top: 0pt " align="left" valign="bottom" nowrap="nowrap">*&nbsp;</td>
</tr>
<tr>
<td><img src="spacer.gif" height="10" width="1"></td>
</tr>
</table>
</div>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  width: 24pt; padding-left: 0pt; text-align: left">*</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  padding-bottom: 6pt;width: 602pt">Less
than one percent</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  width: 24pt; padding-left: 0pt; text-align: left">(1)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  padding-bottom: 6pt;width: 602pt">The number of
shares beneficially owned is determined under rules promulgated by the
SEC and includes outstanding shares of common stock (including
restricted common stock) and options for common stock that have vested
or will vest within 60 days.</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  width: 24pt; padding-left: 0pt; text-align: left">(2)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  padding-bottom: 6pt;width: 602pt">The
number of Shares subject to options which may be issued under the plans
to the Selling Stockholders (which, if issued upon exercise, will be
eligible for resale pursuant to this prospectus) is subject to awards
that may be made under the plans from time to time, and therefore, is
not yet determinable.</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  width: 24pt; padding-left: 0pt; text-align: left">(3)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  padding-bottom: 6pt;width: 602pt">Reflects
42,740 shares issuable upon exercise of options. 16,811 of such shares
may be issued upon exercise of currently unexercisable options covered
by this prospectus. Director options fully vest on the first
anniversary of the date of the
grant.</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  width: 24pt; padding-left: 0pt; text-align: left">(4)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  padding-bottom: 6pt;width: 602pt">Includes 82,740 shares
issuable upon exercise of options. 16,207 of such shares may be issued
upon exercise of currently unexercisable options covered by this
prospectus. Director options fully vest on the first anniversary of the
date of the grant.</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  width: 24pt; padding-left: 0pt; text-align: left">(5)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  padding-bottom: 6pt;width: 602pt">Includes
12,756 shares held by a family trust of which Mr. Kessman is a
controlling member. Also includes 1,305,427 shares issuable upon
exercise of options. 80,000 of such shares may be issued upon exercise
of currently unexercisable options covered by this prospectus. These
options will vest 50% on December 10, 2004 and 100% on
December 10, 2005.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">12</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  width: 24pt; padding-left: 0pt; text-align: left">(6)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  padding-bottom: 6pt;width: 602pt">Reflects
57,740 shares issuable upon exercise of options. 16,811 of such shares
may be issued upon exercise of currently unexercisable options covered
by this prospectus. Director options fully vest on the first
anniversary of the date of the
grant.</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  width: 24pt; padding-left: 0pt; text-align: left">(7)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  padding-bottom: 6pt;width: 602pt">Includes 134,711 shares
issuable upon exercise of options. 27,242 of such shares may be issued
upon exercise of currently unexercisable options covered by this
prospectus. Director options fully vest on the first anniversary of the
date of the grant.</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  width: 24pt; padding-left: 0pt; text-align: left">(8)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  padding-bottom: 6pt;width: 602pt">Includes
190,874 shares beneficially owned by Dr. Sartorelli's wife, as to
which Dr. Sartorelli disclaims beneficial ownership. Also includes
82,197 shares issuable upon exercise of options. 16,811 of such shares
may be issued upon exercise of currently unexercisable options covered
by this prospectus. Director options fully vest on the first
anniversary of the date of the
grant.</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  width: 24pt; padding-left: 0pt; text-align: left">(9)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  padding-bottom: 6pt;width: 602pt">Includes 86,490 shares
issuable upon exercise of options. 16,811 of such shares may be issued
upon exercise of currently unexercisable options covered by this
prospectus. Director options fully vest on the first anniversary of the
date of the grant.</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  width: 24pt; padding-left: 0pt; text-align: left">(10)</td>
<td align="left" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt;  padding-bottom: 6pt;width: 602pt">Reflects
247,499 shares issuable upon exercise of options. 60,000 of such shares
may be issued upon exercise of currently unexercisable options covered
by this prospectus. These options will vest
33 1/3% on December 10, 2004,
66 2/3% on December 10, 2005 and 100% on
December 10, 2006.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">13</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">PLAN OF DISTRIBUTION</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The Selling
Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their
shares of common stock on any stock exchange, market or trading
facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. The Selling
Stockholders may use any one or more of the following methods when
selling shares:</p>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">ordinary brokerage
transactions and transactions in which the broker-dealer solicits
purchasers;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">block trades in which the
broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the
transaction;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">purchases by a
broker-dealer as principal and resale by the broker-dealer for its
account;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">an exchange distribution in
accordance with the rules of the applicable
exchange;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">privately negotiated
transactions;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">settlement of short
sales;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">broker-dealers may agree with
the Selling Stockholders to sell a specified number of such shares at a
stipulated price per share;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">a
combination of any such methods of sale;
and</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="48"></td>
<td><img src="spacer.gif" height="1" width="554"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 36pt">&bull;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 420pt">any other method permitted pursuant
to applicable law.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The Selling Stockholders may also sell shares
under Rule 144 under the Securities Act, if available, rather than
under this prospectus.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Broker-dealers engaged by the Selling
Stockholders may arrange for other brokers-dealers to participate in
sales. Broker-dealers may receive commissions or discounts from the
Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated.
The Selling Stockholders do not expect these commissions and discounts
to exceed what is customary in the types of transactions involved.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the shares of common stock owned by
them and, if they default in the performance of their secured
obligations, the pledgees or secured parties may offer and sell the
shares of common stock from time to time under this prospectus, or
under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of
Selling Stockholders to include the pledgee, transferee or other
successors in interest as Selling Stockholders under this
prospectus.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The Selling Stockholders and any broker-dealers or
agents that are involved in selling the shares may be deemed to be
"underwriters" within the meaning of the
Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on
the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The amount of the Shares to be reoffered or resold pursuant to this
prospectus by each Selling Stockholder and any other person with whom
he is acting in concert for the purpose of selling our securities, may
not exceed, during any three-month period, the amount specified in Rule
144(e) of the Securities Act.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We cannot assure you that any of
the Selling Stockholders will offer for sale or sell any or all of the
Shares covered by this Prospectus.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">14</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">LEGAL MATTERS</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The validity of
the shares of common stock offered by us from time to time under this
prospectus will be passed upon for us by Fulbright &amp; Jaworski
L.L.P., New York, New York.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">EXPERTS</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Ernst &amp;
Young LLP, independent auditors, have audited our financial statements
included in our Annual Report on Form 10-K for the year ended December
31, 2003, as set forth in their report, which is incorporated by
reference in this prospectus and registration statement. Our financial
statements are incorporated by reference in reliance on Ernst &amp;
Young LLP's report, given on their authority as experts in
accounting and auditing.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">NOTE REGARDING FORWARD-LOOKING
STATEMENTS</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">This prospectus (including the documents
incorporated by reference in this prospectus) contains forward-looking
statements (as that term is defined in the Private Securities
Litigation Reform Act of 1995) and information about our financial
condition, results of operations and business that are based on our
current and future expectations. You can find many of these statements
by looking for words such as 'estimate,'
'project,' 'believe,' 'anticipate,'
'intend,' 'expect' and similar expressions.
These statements reflect our current views with respect to future
events and are subject to risks and uncertainties, including those
discussed under 'Risk Factors,' that could cause our actual
results to differ materially from those contemplated in the
forward-looking statements. We caution you that no forward-looking
statement is a guarantee of future performance. You should not place
undue reliance on these forward-looking statements, which speak only as
of the date of this prospectus. We do not undertake any obligation to
publicly release any revisions to these forward-looking statements to
reflect events or circumstances after the date of this prospectus or to
reflect the occurrence of unanticipated events which may cause our
actual results to differ from those expressed or implied by the
forward-looking statements contained in this prospectus.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 6pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">WHERE YOU CAN FIND MORE INFORMATION</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">We are subject
to the informational requirements of the Securities Exchange Act of
1934. Therefore, we file annual, quarterly and special reports, proxy
statements and other information with the SEC. Our filings are
available to the public over the internet at the SEC's web site
at <u>http://www.sec.gov</u>. You may also read and copy all of our
filings at the SEC's public reference facilities in Washington,
D.C., New York, New York and Chicago, Illinois. You may obtain
information on the operation of the SEC's public reference
facilities by calling the SEC at 1-800-SEC-0300. You can also read and
copy all of our filings at the offices of the Nasdaq Stock Market, 1735
K Street N.W., Washington, D.C. 20006.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The SEC allows us to
'incorporate by reference' the information into this
prospectus. This means that we can disclose important information to
you by referring you to another document filed separately with the SEC.
The information that we incorporate by reference is considered to be
part of this prospectus. Because we are incorporating by reference our
future filings with the SEC, this prospectus is continually updated and
those future filings may modify or supersede some or all of the
information included or incorporated in this prospectus. This means
that you must look at all of the SEC filings that we incorporate by
reference to determine if any of the statements in this prospectus or
in any document previously incorporated by reference have been modified
or superseded. This prospectus incorporates by reference the documents
listed below and any future filings we will make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 until the Selling Stockholders sell all of our common stock
registered under this prospectus.</p>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="57"></td>
<td><img src="spacer.gif" height="1" width="545"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 43.2pt">&mdash;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 413pt">Our annual report on Form 10-K for the
year ended December 31, 2003;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="57"></td>
<td><img src="spacer.gif" height="1" width="545"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 43.2pt">&mdash;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 413pt">Our
current reports on Form 8-K filed on January 15, 2004, January 20,
2004, February 6, 2004, February 11, 2004, March 5, 2004, March 8,
2004, March 11, 2004, March 15, 2004 (including Amendment No. 1 thereto
on Form 8-K/A filed on March 18, 2004) and March 29, 2004;</td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">15</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="57"></td>
<td><img src="spacer.gif" height="1" width="545"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 43.2pt">&mdash;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 413pt">The
description of our common stock contained in Item 1 of our Registration
Statement on Form 8-A dated July 31, 1995; and</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="57"></td>
<td><img src="spacer.gif" height="1" width="545"></td>
</tr>
<tr>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 20pt; text-align: left;  font-style: normal; width: 43.2pt">&mdash;&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 413pt">The rights agreement dated as of
October 26, 1998 as Exhibit 4.1 of our Current Report on Form 8-K filed
on October 26, 1998.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The information about us contained in this
prospectus should be read together with the information in the
documents incorporated by reference. You may request a copy of any or
all of these filings, at no cost, by writing or telephoning us at Vion
Pharmaceuticals, Inc., 4 Science Park, New Haven, Connecticut 06511,
Attention: Investor Relations, Telephone: (203)
498-4210.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">16</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>






<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">PART
II</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">ITEM 3.&nbsp;&nbsp;&nbsp;&nbsp;<font style="font-weight: bold; font-style: italic">Incorporation of Documents by Reference.</font>
</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">The following documents filed by Vion Pharmaceuticals, Inc. (the
"Company" or the
"Registrant") with the Commission pursuant to
the Securities Act of 1933, as amended (the "Securities
Act") and the Securities Exchange Act of 1934, as amended
(the "Exchange Act") are incorporated by
reference in this Registration Statement:</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:20pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">(a)&nbsp;&nbsp;&nbsp;&nbsp;The Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2003.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:20pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">(b)&nbsp;&nbsp;&nbsp;&nbsp;The Company's Current Reports on Form
8-K filed on filed on January 15, 2004, January 20, 2004, February 6,
2004, February 11, 2004, March 5, 2004, March 8, 2004, March 11, 2004,
March 15, 2004 (including Amendment No. 1 thereto on Form 8-K/A filed
on March 18, 2004) and March 29, 2004.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:20pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">(c)&nbsp;&nbsp;&nbsp;&nbsp;The description of the Company's
Common Stock contained in Item 1 of the Company's Registration
Statement on Form 8-A filed on July 31, 1995.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:20pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">(d)&nbsp;&nbsp;&nbsp;&nbsp;The rights agreement dated as of October
26, 1998 as Exhibit 4.1 of our Current Report on Form 8-K filed on
October 26, 1998.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">All documents subsequently filed by the
Registrant with the Commission pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which (i) indicates that all securities offered under this
Registration Statement have been sold or (ii) which deregisters all
securities remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part of this
Registration Statement from the date of filing of such documents.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">ITEM 4.&nbsp;&nbsp;&nbsp;&nbsp;<font style="font-weight: bold; font-style: italic">Description of Securities.</font>
</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Not
applicable.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">ITEM 5.&nbsp;&nbsp;&nbsp;&nbsp;<font style="font-weight: bold; font-style: italic">Interest of Named Experts and
Counsel.</font>
</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Not applicable.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">ITEM
6.&nbsp;&nbsp;&nbsp;&nbsp;<font style="font-weight: bold; font-style: italic">Indemnification of Directors and Officers.</font>
</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Under the General Corporation Law of the State of Delaware
("DGCL"), a corporation may include
provisions in its certificate of incorporation that will relieve its
directors of monetary liability for breaches of their fiduciary duty to
the corporation, except under certain circumstances, including a breach
of the director's duty of loyalty, acts or omissions of the
director not in good faith or which involve intentional misconduct or a
knowing violation of law, the approval of an improper payment of a
dividend or an improper purchase by the corporation of stock or any
transaction from which the director derived an improper personal
benefit. The registrant's Restated Certificate of Incorporation,
as amended, eliminates the personal liability of directors to the
registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director with certain limited exceptions set forth
in the DGCL.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Section 145 of the DGCL grants to corporations the
power to indemnify each officer and director against liabilities and
expenses incurred by reason of the fact that he or she is or was an
officer or director of the corporation if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed
to 2 the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
or her conduct was unlawful. The registrant's Restated
Certificate of Incorporation, as amended, and Bylaws provide for
</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">II-1</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: pt; background-color: #ffffff">
indemnification of each officer and director
of the registrant to the fullest extent permitted by the DGCL. Section
145 of the DGCL also empowers corporations to purchase and maintain
insurance on behalf of any person who is or was an officer or director
of the corporation against liability asserted against or incurred by
him in any such capacity, whether or not the corporation would have the
power to indemnify such officer or director against such liability
under the provisions of Section 145. The registrant has purchased and
maintains a directors' and officers' liability policy for
such purposes.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">ITEM 7.&nbsp;&nbsp;&nbsp;&nbsp;<font style="font-weight: bold; font-style: italic">Exemption from Registration
Claimed.</font>
</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">All of the restricted securities issued by us to
the Selling Stockholders who are reoffering and reselling such
restricted securities pursuant to this registration statement were
issued in reliance upon the exemption from registration under Section
4(2) and/or Regulation D of the Securities Act relating to sales by an
issuer not involving any public offering. The restricted securities
were issued as incentive compensation to a select group of employees of
the Company, all of whom either received adequate information about the
Company or had access, through employment or other relationships, to
adequate information about the Company including, but not limited to
our annual, quarterly and other reports and statements filed with the
Securities and Exchange Commission pursuant to the Exchange Act. All of
the recipients of such restricted securities have been informed that
they are restricted securities and therefore cannot be resold except
pursuant to a valid exemption from registration under the Securities
Act or pursuant to an effective registration statement under the
Securities Act. The issuances of such restricted securities were made
without the use of an underwriter.</p>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 6pt; background-color: #ffffff;">ITEM
8.&nbsp;&nbsp;&nbsp;&nbsp;<font style="font-weight: bold; font-style: italic">Exhibits.</font>
</p>
<img src="spacer.gif" height="10" width="1"><br>
<div style="border: 1px; width: 602px; padding-top: 12px" align="center">
<table cellpadding="0" cellspacing="0" border="0" width="602" bgcolor="#ffffff">
<tr>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 12pt" align="center" valign="bottom" colspan="3">Exhibit<br>
No.</td>
<td style="padding-top: 12pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 12pt" align="left" valign="bottom" colspan="3">Description</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 12pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 10pt; text-indent: -10pt;  padding-top: 12pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">4.1</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 12pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 12pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 12pt" align="left" valign="bottom" colspan="3">Vion
Pharmaceuticals, Inc. 2003 Stock Option Plan.</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 12pt" align="right" valign="top" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 10pt; text-indent: -10pt;  padding-top: 12pt" align="right" valign="top" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">4.2</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 12pt " align="left" valign="top" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 12pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 12pt" align="left" valign="top" colspan="3">Senior Executive
Stock Option Plan (incorporated by reference; previously filed as an
exhibit to the Company's Quarterly Report on Form 10-QSB for the
quarter ended 3/31/1999).</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 12pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 10pt; text-indent: -10pt;  padding-top: 12pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">5.1</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 12pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 12pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 12pt" align="left" valign="bottom" colspan="3">Opinion of
Fulbright  &amp; Jaworski  L.L.P.</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 12pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 10pt; text-indent: -10pt;  padding-top: 12pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">23.1</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 12pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 12pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 12pt" align="left" valign="bottom" colspan="3">Consent of Counsel (contained in Exhibit
5.1).</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 12pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 10pt; text-indent: -10pt;  padding-top: 12pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">23.2</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 12pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 12pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 12pt" align="left" valign="bottom" colspan="3">Consent of Independent
Auditors.</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-top: 12pt" align="right" valign="bottom" colspan="1">&nbsp;</td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal;  font-style: normal;  border-bottom: 3px double #ffffff; padding-left: 10pt; text-indent: -10pt;  padding-top: 12pt" align="right" valign="bottom" colspan="1" nowrap="nowrap"><font style="background-color: #ffffff;">24.1</font></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal;     border-bottom: 3px double #ffffff; padding-top: 12pt " align="left" valign="bottom" nowrap="nowrap">&nbsp;</td>
<td style="padding-top: 12pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 12pt" align="left" valign="bottom" colspan="3">Power of Attorney (included
in signature page).</td>
</tr>
<tr>
<td><img src="spacer.gif" height="10" width="1"></td>
</tr>
</table>
</div>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">ITEM
9.&nbsp;&nbsp;&nbsp;&nbsp;<font style="font-weight: bold; font-style: italic">Undertakings.</font>
</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">(a)&nbsp;&nbsp;&nbsp;&nbsp;The undersigned
Registrant hereby undertakes:</p>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="57"></td>
<td><img src="spacer.gif" height="1" width="30"></td>
<td><img src="spacer.gif" height="1" width="515"></td>
</tr>
<tr>
<td align="left" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; font-style: normal; width: 43pt"></td>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 0pt; text-align: left;  font-style: normal; width: 22.8pt">(1)&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 390pt">To file, during any period in which
offers or sales are being made, a post-effective amendment to this
Registration Statement:</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="84"></td>
<td><img src="spacer.gif" height="1" width="30"></td>
<td><img src="spacer.gif" height="1" width="487"></td>
</tr>
<tr>
<td align="left" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; font-style: normal; width: 64pt"></td>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 0pt; text-align: left;  font-style: normal; width: 22.8pt">(i)&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 369pt">To
include any prospectus required by Section 10(a)(3) of the Securities
Act<br> of 1933;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="84"></td>
<td><img src="spacer.gif" height="1" width="30"></td>
<td><img src="spacer.gif" height="1" width="487"></td>
</tr>
<tr>
<td align="left" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; font-style: normal; width: 64pt"></td>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 0pt; text-align: left;  font-style: normal; width: 22.8pt">(ii)&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 369pt">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 </td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">II-2</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="84"></td>
<td><img src="spacer.gif" height="1" width="30"></td>
<td><img src="spacer.gif" height="1" width="487"></td>
</tr>
<tr>
<td align="left" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; font-style: normal; width: 64pt"></td>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 0pt; text-align: left;  font-style: normal; width: 22.8pt">&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 369pt">
Rule  424(b) if, in aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in
the effective registration statement; and</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="84"></td>
<td><img src="spacer.gif" height="1" width="30"></td>
<td><img src="spacer.gif" height="1" width="487"></td>
</tr>
<tr>
<td align="left" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; font-style: normal; width: 64pt"></td>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 0pt; text-align: left;  font-style: normal; width: 22.8pt">(iii)&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 369pt">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.</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="57"></td>
<td><img src="spacer.gif" height="1" width="30"></td>
<td><img src="spacer.gif" height="1" width="515"></td>
</tr>
<tr>
<td align="left" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; font-style: normal; width: 43pt"></td>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 0pt; text-align: left;  font-style: normal; width: 22.8pt">(2)&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 390pt">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;</td>
</tr>
</table>
<table cellpadding="0" cellspacing="0" border="0" width="602">
<tr>
<td><img src="spacer.gif" height="1" width="57"></td>
<td><img src="spacer.gif" height="1" width="30"></td>
<td><img src="spacer.gif" height="1" width="515"></td>
</tr>
<tr>
<td align="left" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; font-style: normal; width: 43pt"></td>
<td align="right" valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top: 6pt; padding-left: 0pt; text-align: left;  font-style: normal; width: 22.8pt">(3)&nbsp;</td>
<td valign="top" style="font-family:serif;font-weight:normal;color:#000000;font-size: 10pt; padding-top:6pt; padding-bottom: 6pt; text-align: left; font-style: normal; width: 390pt">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.</td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">(b)&nbsp;&nbsp;&nbsp;&nbsp;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.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">(c)&nbsp;&nbsp;&nbsp;&nbsp;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.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">II-3</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>






<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">SIGNATURES</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8
and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
New Haven, State of Connecticut, on the 30<sup>th</sup> day of
April  2004.</p>
<img src="spacer.gif" height="10" width="1"><br>
<div style="border: 1px; width: 602px; padding-top: 12px" align="center">
<table cellpadding="0" cellspacing="0" border="0" width="602" bgcolor="#ffffff">
<tr>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="194"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="20"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="367"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 12pt" align="left" valign="top" colspan="3">&nbsp;</td>
<td style="padding-top: 12pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 12pt" align="left" valign="top" colspan="7"><b>VION
PHARMACEUTICALS, INC.</b></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 16pt" align="left" valign="top" colspan="3">&nbsp;</td>
<td style="padding-top: 16pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 16pt" align="left" valign="top" colspan="3">By:</td>
<td style="padding-top: 16pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 1px solid #000000 ;padding-left: 0pt; text-indent: 0pt;padding-top: 16pt" align="left" valign="top" colspan="3">/s/
Howard B. Johnson</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 12pt" align="left" valign="top" colspan="3">&nbsp;</td>
<td style="padding-top: 12pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 12pt" align="left" valign="top" colspan="3">&nbsp;</td>
<td style="padding-top: 12pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 9pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Howard B.
Johnson<br>
<font style="font-weight: normal; font-style: italic">President and Chief Financial
Officer</font></td>
</tr>
<tr>
<td><img src="spacer.gif" height="10" width="1"></td>
</tr>
</table>
</div>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 0pt; background-color: #ffffff;">POWER OF ATTORNEY</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 0pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">KNOW ALL
PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Alan Kessman and Howard B. Johnson, or
either of them, as his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement (or any other Registration Statement for the same offering
that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act of 1933), and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of
them, or their or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.</p>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt;  width: 456pt; text-align: left; font-style: normal; line-height: 12pt; padding-top:6pt; padding-left:0pt; padding-right:0pt; padding-bottom: 6pt; margin: 0pt; text-indent: 20pt; background-color: #ffffff">Pursuant to the requirements
of the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the dates
indicated:</p>
<table cellpadding="0" cellspacing="0" border="0" width="593">
<tr>
<td><img src="spacer.gif" height="1" width="218"></td>
<td><img src="spacer.gif" height="1" width="16"></td>
<td><img src="spacer.gif" height="1" width="234"></td>
<td><img src="spacer.gif" height="1" width="16"></td>
<td><img src="spacer.gif" height="1" width="109"></td>
</tr>
<tr>
<td style="font-family: serif; font-weight: bold; font-size: 8pt; font-style: normal; line-height: 12pt; border-bottom: 1px solid #000000;" align="center">Signature</td>
<td></td>
<td style="font-family: serif; font-weight: bold; font-size: 8pt; font-style: normal; line-height: 12pt; border-bottom: 1px solid #000000;" align="center">Title</td>
<td></td>
<td style="font-family: serif; font-weight: bold; font-size: 8pt; font-style: normal; line-height: 12pt; border-bottom: 1px solid #000000;" align="center">Date</td>
</tr>
<tr>
<td><img src="spacer.gif" height="16" width="1"></td>
</tr>
<tr>
<td valign="top" align="center" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt ; ">/s/ William R. Miller</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; font-style: normal; line-height: 12pt; " align="left">Chairman of the Board
of<br>Directors</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt; " align="center">April 30, 2004</td>
</tr>
<tr>
<td bgcolor="#000000"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td align="center" valign="top" style="font-family: serif; font-weight: normal;  font-size: 10pt ; font-style: normal; line-height: 12pt ; ">William R.
Miller</td>
</tr>
<tr>
<td><img src="spacer.gif" height="16" width="1"></td>
</tr>
<tr>
<td valign="top" align="center" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt ; ">/s/ Alan Kessman</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; font-style: normal; line-height: 12pt; " align="left">Chief Executive Officer<br> (Principal
Executive Officer)</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt; " align="center">April 30, 2004</td>
</tr>
<tr>
<td bgcolor="#000000"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td align="center" valign="top" style="font-family: serif; font-weight: normal;  font-size: 10pt ; font-style: normal; line-height: 12pt ; ">Alan
Kessman</td>
</tr>
<tr>
<td><img src="spacer.gif" height="16" width="1"></td>
</tr>
<tr>
<td valign="top" align="center" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt ; ">/s/ Howard B. Johnson</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; font-style: normal; line-height: 12pt; " align="left">President and Chief Financial<br> Officer
(Principal Financial and<br> Accounting Officer)</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt; " align="center">April
30, 2004</td>
</tr>
<tr>
<td bgcolor="#000000"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td align="center" valign="top" style="font-family: serif; font-weight: normal;  font-size: 10pt ; font-style: normal; line-height: 12pt ; ">Howard B.
Johnson</td>
</tr>
<tr>
<td><img src="spacer.gif" height="16" width="1"></td>
</tr>
<tr>
<td valign="top" align="center" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt ; ">/s/ Frank T.
Cary</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; font-style: normal; line-height: 12pt; " align="left">Director</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt; " align="center">April 30, 2004</td>
</tr>
<tr>
<td bgcolor="#000000"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td align="center" valign="top" style="font-family: serif; font-weight: normal;  font-size: 10pt ; font-style: normal; line-height: 12pt ; ">Frank T. Cary</td>
</tr>
<tr>
<td><img src="spacer.gif" height="16" width="1"></td>
</tr>
<tr>
<td valign="top" align="center" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt ; ">/s/ Stephen K. Carter,
M.D.</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; font-style: normal; line-height: 12pt; " align="left">Director</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt; " align="center">April 30,
2004</td>
</tr>
<tr>
<td bgcolor="#000000"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td align="center" valign="top" style="font-family: serif; font-weight: normal;  font-size: 10pt ; font-style: normal; line-height: 12pt ; ">Stephen K. Carter,
M.D.</td>
</tr>
<tr>
<td><img src="spacer.gif" height="16" width="1"></td>
</tr>
<tr>
<td valign="top" align="center" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt ; ">/s/ Charles K.
MacDonald</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; font-style: normal; line-height: 12pt; " align="left">Director</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt; " align="center">April 30, 2004</td>
</tr>
<tr>
<td bgcolor="#000000"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td align="center" valign="top" style="font-family: serif; font-weight: normal;  font-size: 10pt ; font-style: normal; line-height: 12pt ; ">Charles K. MacDonald</td>
</tr>
<tr>
<td><img src="spacer.gif" height="16" width="1"></td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">II-4</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>
<page>
<table cellpadding="0" cellspacing="0" border="0" width="593">
<tr>
<td><img src="spacer.gif" height="1" width="218"></td>
<td><img src="spacer.gif" height="1" width="16"></td>
<td><img src="spacer.gif" height="1" width="234"></td>
<td><img src="spacer.gif" height="1" width="16"></td>
<td><img src="spacer.gif" height="1" width="109"></td>
</tr>
<tr>
<td style="font-family: serif; font-weight: bold; font-size: 8pt; font-style: normal; line-height: 12pt; border-bottom: 1px solid #000000;" align="center">Signature</td>
<td></td>
<td style="font-family: serif; font-weight: bold; font-size: 8pt; font-style: normal; line-height: 12pt; border-bottom: 1px solid #000000;" align="center">Title</td>
<td></td>
<td style="font-family: serif; font-weight: bold; font-size: 8pt; font-style: normal; line-height: 12pt; border-bottom: 1px solid #000000;" align="center">Date</td>
</tr>
<tr>
<td><img src="spacer.gif" height="16" width="1"></td>
</tr>
<tr>
<td valign="top" align="center" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt ; ">/s/ Alan C. Sartorelli,
Ph.D.</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; font-style: normal; line-height: 12pt; " align="left">Director</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt; " align="center">April 30,
2004</td>
</tr>
<tr>
<td bgcolor="#000000"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td align="center" valign="top" style="font-family: serif; font-weight: normal;  font-size: 10pt ; font-style: normal; line-height: 12pt ; ">Alan C. Sartorelli,
Ph.D.</td>
</tr>
<tr>
<td><img src="spacer.gif" height="16" width="1"></td>
</tr>
<tr>
<td valign="top" align="center" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt ; ">/s/ Walter B.
Wriston</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; font-style: normal; line-height: 12pt; " align="left">Director</td>
<td rowspan="3"></td>
<td valign="top" rowspan="3" style="font-family: serif; font-weight: normal; font-size: 10pt; normal; line-height: 12pt; " align="center">April 30,
2004</td>
</tr>
<tr>
<td bgcolor="#000000"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td align="center" valign="top" style="font-family: serif; font-weight: normal;  font-size: 10pt ; font-style: normal; line-height: 12pt ; ">Walter B.
Wriston</td>
</tr>
<tr>
<td><img src="spacer.gif" height="16" width="1"></td>
</tr>
</table>
<p style="font-family:serif;font-weight:normal;color:#000000;font-size:10pt; text-align: center; width: 456pt;">II-5</p>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>






<page>
<p style="font-family:serif;font-weight:bold;color:#000000;font-size:10pt;  width: 456pt; text-align: center; font-style: normal; line-height: 12pt; padding-top: 12pt; padding-left:0pt; padding-right:0pt; margin: 0pt; text-indent: 0pt; padding-bottom: 6pt; background-color: #ffffff;">INDEX TO
EXHIBITS</p>
<img src="spacer.gif" height="10" width="1"><br>
<div style="border: 1px; width: 602px; padding-top: 12px" align="center">
<table cellpadding="0" cellspacing="0" border="0" width="602" bgcolor="#ffffff">
<tr>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="48"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
<td><img src="spacer.gif" height="1" width="8"></td>
<td height="1" width="15"><img src="spacer.gif" height="1" width="1"></td>
<td height="1" width="10"><img src="spacer.gif" height="1" width="544"></td>
<td height="1" width="25"><img src="spacer.gif" height="1" width="1"></td>
</tr>
<tr>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="center" valign="bottom" colspan="3">Exhibit
&nbsp;&nbsp;&nbsp;No.&nbsp;&nbsp;&nbsp;</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 8pt; color: #000000; font-weight: bold; font-style: normal; border-bottom: 1px solid #000000 ;padding-top: 0pt" align="left" valign="bottom" colspan="3">Description</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">&nbsp;&nbsp;4.1</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Vion
Pharmaceuticals, Inc. 2003 Stock Option
Plan.</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="center" valign="top" colspan="3">&nbsp;&nbsp;4.2</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="top" colspan="3">Senior
Executive Stock Option Plan (incorporated by reference; previously
filed as an exhibit to the Company's Quarterly Report on Form
10-QSB for the quarter ended 3/31/1999).</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">&nbsp;&nbsp;5.1</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Opinion of Fulbright  &amp;
Jaworski  L.L.P.</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">23.1</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Consent of
Counsel (contained in Exhibit 5.1).</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">23.2</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Consent of Independent Auditors.</td>
</tr>
<tr>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 10pt; text-indent: -10pt;padding-top: 0pt" align="center" valign="bottom" colspan="3">24.1</td>
<td style="padding-top: 0pt "><img src="spacer.gif" height="1" width="2"></td>
<td style="font-family: serif; font-size: 10pt; color: #000000; font-weight: normal; font-style: normal; border-bottom: 3px double #ffffff;padding-left: 0pt; text-indent: 0pt;padding-top: 0pt" align="left" valign="bottom" colspan="3">Power of Attorney (included in signature
page).</td>
</tr>
<tr>
<td><img src="spacer.gif" height="10" width="1"></td>
</tr>
</table>
</div>
<br>
<hr width="760" style="padding-left: 0pt;" align="left">
<br>



</BODY>
</HTML>
[{"type": "S-8", "sequence": "1", "filename": "file001.htm", "description": "FORM S-8", "secsgml_size_bytes": 277313}]
{"company-data": {"conformed-name": "VION PHARMACEUTICALS INC", "cik": "0000944522", "assigned-sic": "2836", "irs-number": "133671221", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-115027", "film-number": "04768803"}, "business-address": {"street1": "4 SCIENCE PARK", "city": "NEW HAVEN", "state": "CT", "zip": "06511", "phone": "2034984210"}, "mail-address": {"street1": "FOUR SCIENCE PARK", "city": "NEW HAVEN", "state": "CT", "zip": "06511"}, "former-company": {"former-conformed-name": "ONCORX INC", "date-changed": "19950615"}}
As
filed with the Securities and Exchange Commission on April 30,
2004
Registration No.
333-
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933
Vion Pharmaceuticals, Inc.
(Exact Name of Registrant as Specified
in Its
Charter)
Delaware
13-3671221
(State
or other jurisdiction of incorporation or organization)
(I.R.S.
Employer Identification
Number)
4
Science Park
New Haven,
Connecticut
06511
(Address
of Principal Executive Offices)
(Zip
Code)
Vion Pharmaceuticals, Inc. 2003
Stock Option Plan
Senior Executive Stock Option Plan
(Full Title of the Plans)
Howard B. Johnson
President and Chief Financial
Officer
4 Science Park
New Haven, Connecticut 06511
(203)
498-4210
Copies to:
Paul
Jacobs, Esq.
Lawrence A. Spector, Esq.
Fulbright & Jaworski
L.L.P.
666 Fifth Avenue
New York, New York 10103
(212)
318-3000
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
CALCULATION OF REGISTRATION FEE
Title
Of Each Class of
Securities To Be Registered
Amount To
Be
Registered (1)
Proposed Maximum
Offering Price Per
Share
Proposed Maximum
Aggregate Offering
Price
Amount Of
Registration
Fee
Common Stock $0.01 par value per share, with
common stock purchase rights
(2)
2,980,000
see
chart
below
$
15,054,000
$
1,907.35
(1)
This
registration statement shall also cover any additional indeterminable
number of shares as may be required pursuant to Vion Pharmaceuticals,
Inc. 2003 Stock Option Plan and the Senior Executive Stock Option Plan,
in the event of a stock dividend, stock split, recapitalization or
other similar change in the Common Stock.
(2)
The common stock purchase
rights are attached to and trade with common stock of the registrant.
Value attributable to such rights, if any, is reflected in the market
price of the common stock.
The following chart
illustrates the calculation of the registration fee:
Number
of Shares
Offering Price
Per Share
Maximum
Aggregate
Offering Price
2003 Stock Option
Plan
2,000,000
$
4.755
(3)
$
9,510,000
(3)
Senior Executive Stock
760,000
$
5.775
(4)
$
4,389,000
(4)
Option
Plan
220,000
$
5.25
(4)
$
1,155,000
(4)
TOTAL:
2,980,000
—
$
15,054,000
REGISTRATION
FEE:
—
—
$
1,907.35
(3)
Pursuant
to Rule 457(h), the aggregate offering price and the fee have been
computed on the basis of $4.755 per share (the average of the high and
the low prices of the registrant's common stock as reported on
the Nasdaq SmallCap Market
SM
on April 26, 2004).
(4)
Pursuant to Rule 457(h), the aggregate
offering price and the fee have been computed on the basis of the price
at which the options may be exercised. The offering price per share set
forth for such shares is the exercise price per share at which such
options are
exercisable.
Explanatory
Note
This registration statement registers 2,000,000 shares of
common stock, par value $.01 per share, of Vion Pharmaceuticals, Inc.
(along with attached common stock purchase rights) that may be issued
and sold upon the exercise of options which have been or may be granted
under our 2003 Stock Option Plan and 980,000 shares of common stock
(along with attached common stock purchase rights) that have been
issued and sold upon the exercise of options granted under our Senior
Executive Stock Option Plan to Alan Kessman, our Chief Executive
Officer.
Under cover of this Form S-8 is our reoffer prospectus
prepared in accordance with Part I of Form S-3 under the Securities
Act. Our reoffer prospectus has been prepared pursuant to Instruction C
of Form S-8 and may be used for reofferings and resales on a continuous
or delayed basis in the future of up to an aggregate of 980,000 shares
of common stock (along with attached common stock purchase rights)
which have been issued to Alan Kessman, our Chief Executive Officer,
upon the exercise of options granted to him under our Senior Executive
Stock Option Plan, and up to an aggregate of 1,856,300 shares of common
stock (along with attached common stock purchase rights) which may be
issued upon the exercise of options that have been or may be granted to
our officers, directors and affiliates under our 2003 Stock Option
Plan. Any of these shares of common stock may be deemed
"control securities" or
"restricted
securities."
PART
I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information specified in this Part I
will be sent or given to directors, officers, employees and consultants
as specified by Rule 428(b)(1) of the Securities Act. Such documents
need not be filed with the Securities and Exchange Commission
("Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements
pursuant to Rule 424 of the Securities Act. These documents and the
documents incorporated by reference in this Registration Statement
pursuant to Item 3 of Part II of this Registration Statement, taken
together, constitute a prospectus that meets the requirements of
Section 10(a) of the Securities Act.
The
following reoffer prospectus filed as part of this Registration
Statement has been prepared in accordance with General Instruction C of
Form S-8 and, pursuant thereto, may be used for reofferings and resales
of the shares of common stock registered hereby. The reoffer prospectus
is for use in reoffering and reselling shares of common stock that may
be deemed to be "control securities" or
"restricted securities" under the Securities.
Act.
REOFFER PROSPECTUS
Vion Pharmaceuticals, Inc.
2,836,300 Shares of
Common Stock, par value $.01 per share
This prospectus may be used by certain stockholders (the
"Selling Stockholders") to sell a maximum of
2,836,300 shares (the "Shares") of our common
stock, par value $.01 per share, which we have previously issued or may
issue in the future under awards of options and restricted common stock
which have been or may be granted under our 2003 Stock Option Plan and
Senior Executive Stock Option Plan. The Selling Stockholders are our
officers and directors who have received or are eligible to receive
awards of options under those plans and are listed in the section of
this prospectus entitled "Selling
Stockholders." The Selling Stockholders may offer these
Shares for resale from time to time. We will not receive any proceeds
from the sale of the Shares being offered by the Selling Stockholders.
We will pay all of the expenses associated with this prospectus. The
Selling Stockholders will pay the other costs, if any, associated with
the sale of the Shares.
The Selling Shareholders may sell the
Shares covered by this prospectus through various means, including
directly or indirectly to purchasers, in one or more transactions on
any stock exchange or stock market on which the Shares are traded at
the time of sale, in privately negotiated transactions, or through a
combination of these methods. These sales may be at fixed prices, which
may change, at market prices available at the time of sale, at prices
based on the market price at the time of sale, or at negotiated prices.
If the Shares are sold through underwriters, broker-dealers, or agents,
these parties may be compensated for their services in the form of
discounts or commissions, which is deemed to be
"underwriting compensation." Such
underwriting compensation shall be the sole responsibility of the
Selling Stockholders. If required, the Selling Stockholders will
disclose the names of any underwriter(s), applicable commissions or
discounts, and any other required information with respect to any
particular sales in an accompanying prospectus supplement. For
additional information on the Selling Stockholders' possible
methods of sale, you should refer to the section in this prospectus
entitled "Plan of Distribution."
The
Shares are "control securities" or
"restricted securities" under the Securities
Act of 1933, as amended, before their sale under this reoffer
prospectus. We have prepared this prospectus for the sole purpose of
registering the Shares under the Securities Act in order to allow the
Selling Stockholders to offer and sell the Shares to the public,
subject to any contractual limitations on the Selling Stockholders.
Our common stock is currently traded on the Nasdaq SmallCap
Market
SM
under the symbol "VION."
The last reported sale price of our common stock on the Nasdaq SmallCap
Market on April 29, 2004 was $5.30.
Investing in our common stock
involves a high degree of risk. See "Risk
Factors"' beginning page  5.
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.
The date of this prospectus
is April 30, 2004
TABLE OF
CONTENTS
Page
SUMMARY
1
RECENT DEVELOPMENTS
3
RISK
FACTORS
5
USE OF
PROCEEDS
11
SELLING
STOCKHOLDERS
12
PLAN OF
DISTRIBUTION
14
LEGAL
MATTERS
15
EXPERTS
15
NOTE REGARDING FORWARD-LOOKING
STATEMENTS
15
WHERE YOU CAN FIND MORE
INFORMATION
15
i
SUMMARY
You should read the entire prospectus, including the section
entitled "Risk Factors," carefully before
making an investment decision.
Business of Vion
We are
a development stage company engaged in the development of therapeutics
and technologies for the treatment of cancer. For the years ended
December 31, 2003, 2002 and 2001, we spent $9.7 million, $10.5 million
and $12.5 million, respectively, on research, development and clinical
activities.
Our portfolio of potential products consists of two
distinct small molecule anticancer agents in clinical development and
additional small molecules and a drug delivery system in preclinical
development. 'Preclinical development' or
'preclinical studies' indicate that the product candidates
selected for development are being evaluated for potency, specificity,
manufacturability and pharmacologic activity
in vitro
, or cell
culture, and
in vivo
, or animal, models. 'Clinical
development' involves a three-phase process. 'Phase
I' indicates safety and proof-of-concept testing and
determination of the maximum tolerated dose in a limited patient
population. 'Phase II' indicates safety, dosing and
activity testing in a limited patient population. 'Phase
III' indicates safety, dosing and efficacy testing in a large
patient population.
Potential Products in Clinical
Development
•
Triapine
®
inhibits the enzyme ribonucleotide reductase, and therefore prevents
the replication of tumor cells by blocking a critical step in DNA
synthesis. We are evaluating Triapine in Phase I and Phase II
combination trials. Triapine is also being evaluated in additional
Phase I and Phase II single agent and combination clinical trials
sponsored by the National Cancer Institute (NCI).
•
CLORETAZINE
TM
(VNP40101M) is a
sulfonyl hydrazine alkylating (DNA-damaging) agent. We are evaluating
CLORETAZINE
TM
(VNP40101M) in Phase I single agent and
combination trials. In March 2004, we announced that
CLORETAZINE
TM
(VNP40101M) was designated as a fast track
program by the U.S. Food and Drug Administration (FDA) in relapsed or
refractory acute myeloid leukemia. In March 2004, we initiated a Phase
II trial of CLORETAZINE
TM
(VNP40101M) as a single agent in
acute myeloid leukemia and myelodysplastic syndromes. We also plan to
commence a Phase II trial of CLORETAZINE
TM
(VNP40101M) in
combination with cytosine arabinoside (Ara-C) in acute myeloid leukemia
in 2004. Initiation of a Phase II trial of CLORETAZINE
TM
(VNP40101M) in human glioma (brain cancer) is planned for 2004 under an
investigator's Investigational New Drug Application (IND).
Potential Products in Preclinical
Development
•
Heterocyclic hydrazones are
anticancer compounds that have demonstrated potent anti-tumor effects
in preclinical studies. The mechanisms of action for these compounds
are unidentified at this time but appear to be unlike any commercially
available anticancer agents that we know of. In December 2003, we
entered into an exclusive research collaboration and option agreement
related to these compounds and we are now evaluating heterocyclic
hydrazones in preclinical
studies.
•
KS119, an additional cytotoxic
(cell damaging) compound from the sulfonyl hydrazine class, has been
demonstrated in preclinical studies to be highly selective for hypoxic
(poorly oxygenated) cells which are found in tumors and are often hard
to treat with conventional anticancer agents. We are evaluating KS119
in preclinical
studies.
•
TAPET
®
(Tumor
Amplified Protein Expression Therapy), our drug delivery system using
modified
Salmonella
bacteria, is designed to deliver anticancer
agents directly to solid tumors. Our first-generation TAPET bacteria,
VNP20009, was previously evaluated in Phase I trials. Based on the
clinical evidence provided by VNP20009, we developed two
second-generation
1
TAPET vectors designed for improved
colonization of human tumors. Both of these vectors have been evaluated
in veterinary clinical trials in dogs with spontaneous tumors. We
continue to evaluate one of these vectors in additional veterinary
clinical studies in dogs.
Our product development programs are
based on technologies that we license from Yale University and other
cancer research centers. Our product development strategy consists of
two main approaches. First, we engage in product development with
respect to anticancer therapeutics and technologies through in-house
preclinical and clinical development and through collaboration with
academic institutions. Second, depending on financial and
pharmaceutical market conditions and required resources, we determine
the best method and/or partnership to develop, and eventually market,
our products.
At the present time, under our current operating
plan, after giving effect to the receipt of approximately $32.9 million
of net proceeds from a private placement of our common stock and
warrants in February 2004 and receipt of $5.8 million from exercises in
2004 of warrants issued in connection with 2003 private placements, we
believe that we have sufficient cash to fund our operations into 2006.
Our plan of operations for the next 12 months includes the following
elements:
•
Conduct Phase I
clinical studies of an intravenous formulation of Triapine in
combination with standard chemotherapy
treatments;
•
Conduct Phase I
clinical studies of an oral formulation of Triapine;
•
Conduct Phase II clinical studies
of an intravenous formulation of Triapine in combination with standard
chemotherapy
treatments;
•
Provide product
for Phase I and Phase II clinical studies to be sponsored by the NCI of
an intravenous formulation of Triapine as a single agent and in
combination with standard chemotherapy
treatments;
•
Conduct Phase I
clinical studies of CLORETAZINE
TM
(VNP40101M) as a single
agent and in combination with standard chemotherapy
treatments;
•
Conduct Phase II
clinical studies of CLORETAZINE
TM
(VNP40101M) as a single
agent and in combination with standard chemotherapy
treatments;
•
Provide product
for a Phase II study of CLORETAZINE
TM
(VNP40101M) to be
conducted under an investigator's
IND;
•
Conduct additional
clinical trials of Triapine and/or CLORETAZINE
TM
(VNP40101M), depending on the results of the clinical trials already
underway;
•
Continue to evaluate
one second-generation TAPET vector in veterinary clinical
trials;
•
Continue to conduct
internal product development studies with respect to our clinical
products and other product candidates that we may identify, including
heterocyclic hydrazones and
KS119;
•
Continue to support
research and development being performed at Yale University and by
other collaborators;
and
•
Continue to seek
collaborative partnerships, joint ventures, co-promotional agreements
or other arrangements with third parties.
Our operating plans
and capital requirements for the next twelve months may vary materially
from the foregoing because of the results of research and development,
clinical studies, product testing, relationships with strategic
partners, changes in the focus and direction of our research and
development programs, competitive and technological advances, the
regulatory process in the United States and abroad and other
factors.
We were incorporated in March 1992 as a Delaware
corporation named MelaRx Pharmaceuticals, Inc. In April 1995 we changed
our name to OncoRx, Inc. in connection with a merger, and in April 1996
we changed our name to Vion Pharmaceuticals, Inc. Our executive offices
are located at 4 Science Park, New Haven, Connecticut 06511, and our
telephone number is (203) 498-4210. Our website address is
www.vionpharm.com. The information on our website is not part of this
prospectus.
2
RECENT DEVELOPMENTS
Private
Placement
On February 11, 2004, we completed a private
placement of 13,553,845 shares of our common stock together with
warrants for the purchase of an additional 3,388,463 shares of our
common stock, for an aggregate consideration of $35,239,997, or $2.60
for a unit consisting of a share of our common stock and a warrant to
purchase one-quarter of a share of common stock. In addition, we issued
to the placement agent, Rodman & Renshaw, Inc., a warrant to
purchase 300,000 shares of our common stock.
In connection with
the private placement, we agreed that until the earlier of June 10,
2004 or 15 calendar days after the effective date of the registration
statement on Form S-3 that we filed on March 29, 2004 with respect to
the resale of the shares of common stock sold and the shares of common
stock issuable upon the exercise of the warrants issued in the private
placement, we shall not effect a sale of our common stock or securities
convertible into common stock. We further agreed not to file any
registration statement with respect to any sale of common stock or
convertible securities prior to 15 calendar days after the effective
date of such registration statement. The Shares covered by this
prospectus are exempt from the restrictions set forth above.
Warrants
The warrants issued as part of the private
placement, including the warrants issued to Rodman & Renshaw, Inc.,
have an exercise price of $3.25 per share of common stock, subject to
anti-dilution adjustments in connection with dividends on shares of our
common stock, and subdivisions, combinations and reclassifications of
our common stock. The warrants may also be exercised on a
"cashless" basis if, but only if, at any time
after February 11, 2005 there is no effective registration statement
registering the resale of the warrant shares by the holder. The
warrants expire on February  11, 2009.
If we complete a
reorganization, reclassification, merger, consolidation or disposition
of assets, then the holders of the warrants shall have the right
thereafter to receive upon exercise of the warrants, the number of
shares of common stock of the successor or acquiring corporation or of
our company if it is the surviving corporation, and other property
receivable upon or as a result of the transaction by a holder of the
number of shares of common stock for which the warrants are exercisable
immediately prior to the transaction.
The warrants are not
exercisable by any selling stockholder to the extent that such exercise
would make the selling stockholder the beneficial holder of more than
4.999% of our total outstanding common stock.
After a
period of 12 months following the effective date of the registration
statement on Form S-3 covering the resale of the shares issuable upon
exercise of the warrants, if the volume weighted average price of the
common stock is at or above $4.875 per share for 20 consecutive trading
days, then the warrants shall become callable by the Company upon
written notice within 10 trading days of such period.
We are
subject to potential daily monetary penalties for failure to timely
deliver stock certificates representing shares of common stock upon the
exercise of the warrants. If we fail to deliver a stock certificate
within five trading days after the exercise of warrants, and if, due to
that failure, a selling stockholder has to buy shares in the market, we
must pay the selling stockholder the amount of the difference between
the price at which the selling stockholder had to buy shares in the
market and the price at which he gave the order to sell shares, and we
must either reinstate the warrant or deliver shares of common stock at
the election of the selling stockholder.
Registration
Rights
We entered into a registration rights agreement with the
purchasers of our securities in the private placement. In accordance
with the registration rights agreement, we filed a registration
3
statement on Form S-3 on March 29, 2004,
covering the resale of all of the shares of our common stock sold by us
in the private placement and all shares of our common stock issuable
upon the exercise of the warrants issued to the purchasers as part of
the private placement. We must cause the registration statement to
become effective as soon as practicable, but in no event later than May
21, 2004, or June 20, 2004 if the registration statement is reviewed by
the SEC. If such registration statement is not declared effective by
the SEC on or before the May 21, 2004, or June 20, 2004, if applicable,
registration deadline, or if after such registration statement has been
declared effective by the SEC, sales of the shares of common stock
covered by the registration statement cannot be made pursuant to the
registration statement for any reason, then at the time of the event,
we are required to make payments to the purchasers in the amount of
2.0% of the aggregate purchase price paid in the private
placement by the purchasers for the shares of our common stock held by
them. Additional payments of 2.0% of the aggregate purchase
price paid by the purchasers for the shares of our common stock held by
them are payable on each monthly anniversary thereafter until we have
complied with our obligations under the registration rights
agreement.
4
RISK FACTORS
In addition to the
other information in this prospectus, you should carefully consider the
following factors in evaluating us and our business before purchasing
the shares of common stock offered hereby. This prospectus contains, in
addition to historical information, forward-looking statements that
involve risks and uncertainties. Our actual results could differ
materially. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below, as well as
those discussed elsewhere in this prospectus, including the documents
incorporated by reference.
If we fail to obtain the capital necessary to fund
our operations, we will be unable to continue or complete our product
development.
We will need to raise substantial additional
capital to fund operations and complete our product development. As of
December 31, 2003, we had $15.7 million in cash, cash equivalents and
short-term investments (not including the net proceeds of $32.9 million
from our recent private placement of common stock and warrants and
additional proceeds of $5.8 million from recent exercises of certain
warrants) to fund our operations and continue our product development.
We will not have an approved and marketable product for the foreseeable
future. Accordingly, we will need to raise substantial additional
capital to have sufficient capital to fund our operations in 2006 and
beyond.
We may not get funding when we need it or on favorable
terms. If we cannot raise adequate funds to satisfy our capital
requirements, we may have to delay, scale-back or eliminate our
research and development activities, clinical studies or future
operations. We might have to license our technology to others. This
could result in sharing revenues which we might otherwise retain for
ourselves. Any of these actions may harm our business, financial
condition and results of operations.
The amount of capital we
may need depends on many factors,
including:
•
the progress, timing and
scope of our product development
programs;
•
the progress, timing and
scope of our preclinical studies and clinical
trials;
•
the time and cost necessary to
obtain regulatory approvals;
•
the time
and cost necessary to further develop manufacturing processes, arrange
for contract manufacturing or build manufacturing facilities and obtain
the necessary regulatory approvals for those
facilities;
•
the time and cost necessary
to develop sales, marketing and distribution
capabilities;
•
our ability to enter into
and maintain collaborative, licensing and other commercial
relationships; and
•
our partners'
commitment of time and resource to the development of our products.
We have limited access to the capital markets and, if we can
raise additional funding, stockholders may experience extreme
dilution.
We have limited access to the capital markets to
raise capital. The capital markets have been unpredictable in the past,
especially for drug development companies and unprofitable companies
such as ours. In addition, it is difficult to raise capital under
current market conditions. The amount of capital that a company such as
ours is able to raise often depends on variables that are beyond our
control, such as the share price of our stock and its trading volume.
As a result, we may not be able to secure financing on terms attractive
to us, or at all. If we are able to consummate a financing arrangement,
the amount raised may not be sufficient to meet our future needs. If
adequate funds are not available on acceptable terms, or at all, our
business, including our technology licenses, relationships with key
suppliers, results of operations, financial condition and our continued
viability will be materially adversely affected.
To the extent
we encounter additional opportunities to raise cash, we would likely
sell additional equity or debt securities. Due to our current stock
price and market conditions, and the amount of
5
capital we need, any such debt or equity
securities are likely to be sold at relatively low prices, including
prices which are below the market prices of our stock, and may have
substantial rights to control the Company. In our private placement in
June 2003, shares of common stock were sold at $1.30 per share which
was approximately 64% of market price at the time. Stockholders
are likely to experience extreme dilution as well as subordination of
their rights. We do not have any contractual restrictions on our
ability to incur debt. Any indebtedness could contain covenants that
restrict our operations.
In connection with our most recent
private placement of common stock and warrants in February 2004, we
agreed that until the earlier of June 10, 2004 or 15 calendar days
after the effective date of the registration statement we filed on
March 29, 2004 with respect to the resale of the shares of common stock
sold and the shares of common stock issuable upon the exercise of the
warrants issued in the private placement, we shall not effect a sale of
our common stock or securities convertible into common stock. We
further agreed not to file any registration statement with respect to
any such sale of common stock or convertible securities prior to 15
calendar days after the effective date of such registration statement.
This delay in our ability to sell securities and effectuate a financing
could have a material adverse effect on our ability to fund our
company.
We may expand our business through new
acquisitions that could disrupt our business, harm our financial
condition and may also dilute current stockholders' ownership
interests in our company.
Our business strategy includes
expanding our products and capabilities, and we may seek acquisitions
to do so. Acquisitions involve numerous risks, including:
•
substantial cash
expenditures;
•
potentially dilutive
issuance of equity
securities;
•
incurrence of debt and
contingent liabilities, some of which may be difficult or impossible to
identify at the time of
acquisition;
•
difficulties in
assimilating the operations of the acquired
companies;
•
diverting our
management's attention away from other business
concerns;
•
risks of entering markets in
which we have limited or no direct experience;
and
•
the potential loss of our key
employees or key employees of the acquired companies.
We cannot
assure you that any acquisition will result in short-term or long-term
benefits to us. We may incorrectly judge the value or worth of an
acquired company or business. In addition, our future success would
depend in part on our ability to manage the rapid growth associated
with some of these acquisitions. We cannot assure you that we will be
able to make the combination of our business with that of acquired
businesses or companies work or be successful. Furthermore, the
development or expansion of our business or any acquired business or
companies may require a substantial capital investment by us. We may
not have these necessary funds or they might not be available to us on
acceptable terms or at all. We may also seek to raise funds by selling
shares of our stock, which could dilute current stockholder's
ownership interest in our company.
If we continue to
incur operating losses, we may be unable to continue our
operations.
We have incurred losses since inception. As of
December 31, 2003, we had an accumulated deficit of approximately
$115.7 million. If we continue to incur operating losses and fail to
become a profitable company, we may be unable to continue our
operations. Since we began our business, we have focused on research,
development and clinical trials of product candidates. We expect to
continue to operate at a net loss for at least the next several years
as we continue our research and development efforts, continue to
conduct clinical trials and develop manufacturing, sales, marketing and
distribution capabilities. Our future profitability depends on our
receiving regulatory approval of our product candidates and our ability
to successfully manufacture and market approved drugs. The extent of
our future losses and the timing of our profitability are highly
uncertain.
6
If we do not obtain regulatory
approval for our products, we will not be able to sell our products and
the value of our company and our financial results will be harmed.
We cannot sell or market our drugs without regulatory approval. If
we cannot obtain regulatory approval for our products, the value of our
company and our financial results will be harmed. In the United States,
we must obtain approval from the U.S. Food and Drug Administration, or
FDA, for each drug that we intend to sell. The current status of our
potential products is as follows:
•
Triapine
®
is being
evaluated in Phase I and Phase II clinical trials in combination with
standard chemotherapies. The National Cancer Institute is also
sponsoring additional Phase I and Phase II trials of Triapine as a
single agent and in combination with standard
chemotherapies;
•
CLORETAZINE
TM
(VNP40101M) is being evaluated in Phase I trials as a single agent and
in combination with a standard chemotherapy and in Phase II trials as a
single agent; and
•
Heterocyclic
hydrazones, KS119 and a second-generation TAPET
®
vector
are being evaluated in preclinical studies.
If and when we
complete the several phases of clinical testing for each drug
candidate, we will submit our test results to the FDA. FDA review may
generally take up to two years and approval is not assured. Foreign
governments also regulate drugs distributed outside the United States.
A delay in obtaining regulatory approvals for any of our drug
candidates will also have a material adverse effect on our
business.
If our drug trials are delayed or
achieve unfavorable results, we will not be able to obtain regulatory
approvals for our products.
We must conduct extensive testing
of our product candidates before we can obtain regulatory approval for
our products. We need to conduct human clinical trials. These tests and
trials may not achieve favorable results. We would need to reevaluate
any drug that did not test favorably and either alter the drug or dose,
or abandon the drug development project. In such circumstances, we
would not be able to obtain regulatory approval on a timely basis, if
ever.
Factors that can cause delay or termination in our
clinical trials include:
•
slow patient
enrollment;
•
long treatment time
required to demonstrate safety and
effectiveness;
•
lack of sufficient
supplies of the product
candidate;
•
adverse medical events or
side effects in treated patients;
•
lack
of effectiveness of the product candidate being tested;
and
•
lack of sufficient funds.
If the testing or use of our potential products harms
people, we could be subject to costly and damaging product liability
claims.
Our business exposes us to potential product liability
risks that are inherent in the testing, manufacturing and marketing of
drug products including, but not limited to, unacceptable side effects.
These risks are particularly inherent in human trials of our proposed
products. Side effects and other liability risks could give rise to
viable product liability claims against us. While we have obtained
insurance coverage for patients enrolled in clinical trials, we may not
be able to maintain this insurance on acceptable terms, insurance may
not provide adequate coverage against potential liabilities and we may
need additional insurance coverage for expanded clinical trials and
commercial activity. As a result, product liability claims, even if
successfully defended, could have a material adverse effect on our
business, financial condition and results of operations.
If our potential products cause unacceptable side effects,
we will not be able to commercialize our
products.
Unacceptable side effects may be discovered during preclinical and
clinical testing of one or more of our potential products. If the side
effects are determined unacceptable, we will not be able to
commercialize our products.
7
If we are found to be infringing on
patents or trade secrets owned by others, we may be forced to cease or
alter our drug development efforts, obtain a license to continue the
development or sale of our products, and/or pay damages.
Our
manufacturing processes and potential products may conflict with
patents that have been or may be granted to competitors, universities
or others, or the trade secrets of those persons and entities. As the
drug development industry expands and more patents are issued, the risk
increases that our processes and potential products may give rise to
claims that they infringe the patents or trade secrets of others. These
other persons could bring legal actions against us claiming damages and
seeking to enjoin clinical testing, manufacturing and marketing of the
affected product or process. If any of these actions are successful, in
addition to any potential liability for damages, we could be required
to obtain a license in order to continue to conduct clinical tests,
manufacture or market the affected product or use the affected process.
Required licenses may not be available on acceptable terms, if at all,
and the results of litigation are uncertain. If we become involved in
litigation or other proceedings, it could consume a substantial portion
of our financial resources and the efforts of our personnel.
We rely on confidentiality agreements to protect our trade
secrets. If these agreements are breached by our employees or other
parties, our trade secrets may become known to our competitors.
We rely on trade secrets that we seek to protect through
confidentiality agreements with our employees and other parties. If
these agreements are breached, our competitors may obtain and use our
trade secrets to gain a competitive advantage over us. We may not have
any remedies against our competitors and any remedies that may be
available to us may not be adequate to protect our business and
compensate us for the damaging disclosure. In addition, we may have to
expend resources to protect our interests from possible infringement by
others.
If we fail to recruit and retain key personnel,
our research and development programs may be delayed.
We are
highly dependent upon the efforts of our senior management and
scientific personnel, particularly, Alan Kessman, our chief executive
officer and director; Howard B. Johnson, our president and chief
financial officer; Mario Sznol, M.D., our vice president, clinical
affairs and Ivan King, Ph.D., our vice president, research and
development. There is intense competition in the drug development
industry for qualified scientific and technical personnel. Since our
business is very technical and specialized, we need to continue to
attract and retain such people. We may not be able to continue to
attract and retain the qualified personnel necessary for developing our
business, particularly in light of our need to raise substantial
additional financing in order to continue our operations in 2006 and
beyond. We have no key man insurance policies on any of the officers
listed above and we only have an employment agreement with Mr. Kessman.
If we lose the services of our management and scientific personnel or
fail to recruit other scientific and technical personnel, our research
and product development programs will be significantly and
detrimentally affected.
We face intense
competition in the market for anticancer products, and if we are unable
to compete successfully, our business will suffer.
Numerous
pharmaceutical and biotechnology companies have publicly announced
their intention to develop drugs that target the replication of tumor
cells including, in some instances, the development of agents which
target ribonucleotide reductase similar to our compound Triapine®,
agents which are alkylating agents similar to our compound
CLORETAZINE
TM
(VNP40101M) and agents which are drug delivery
systems. These companies include, but are not limited to, Bristol-Myers
Squibb Company, Pfizer Inc., Chiron Corporation, Amgen Inc., Genentech
Inc., ImClone Systems Inc., OSI Pharmaceuticals, Inc., Lorus
Therapeutics Inc., AstraZeneca PLC, Schering-Plough Corporation and Eli
Lilly and Company. These and other large pharmaceutical companies have
substantially greater financial and other resources and development
capabilities than we do and have substantially greater experience in
undertaking preclinical and clinical testing of products, obtaining
regulatory approvals, and manufacturing and marketing pharmaceutical
products. In addition, our competitors
8
may succeed in obtaining approval for products
more rapidly than us and in developing and commercializing products
that are safer and more effective than those that we propose to
develop. The existence of these products, other products or treatments
of which we are not aware or products or treatments that may be
developed in the future may adversely affect the marketability of our
products by rendering them less competitive or obsolete. In addition to
competing with universities and other research institutions in the
development of products, technologies and processes, we may compete
with other companies in acquiring rights to products or technologies
from universities.
If our corporate partners,
licensors, licensees, collaborators at research institutions and others
do not conduct activities in accordance with our arrangements, our
research and development efforts may be delayed.
Our strategy
for the research, development and commercialization of our products
entails entering into various arrangements with corporate partners,
licensors, licensees, collaborators at research institutions and
others. We currently depend on the following third
parties:
•
The National Cancer Institute
and its network of clinical investigators for sponsoring and conducting
Phase I and Phase II single agent and combination clinical trials of
Triapine;
•
Yale University, or Yale, for
collaborative research and for technologies that are licensed by them
to us;
•
Beijing Pason Pharmaceuticals,
Inc. for the development of Triapine in the People's Republic of
China, Hong Kong, Macao and
Taiwan;
•
Healthcare facilities in the
United States and other countries to perform human clinical trials of
our products;
•
Clinical research
organizations in the United States and other countries to monitor and
collect data related to human clinical trials; and
•
Contract manufacturers to produce limited
quantities of our products for use in preclinical and clinical
activities.
If the third parties do not conduct activities in
accordance with the arrangements we have with them, our research and
development efforts may be delayed. We may also rely on other
collaborative partners to obtain regulatory approvals and to
manufacture and market our products. The amount and timing of resources
to be devoted to these activities by these other parties may not be
within our control.
If Yale does not conduct research
relating to products we would like to pursue, we may never realize any
benefits from our funding provided to Yale.
Through December
31, 2003, we have paid approximately $9.9 million to Yale for research
funding. We have agreed to pay an additional $250,000 to support the
research activities of one of our directors, an affiliate of Yale,
through March 31, 2005. We may continue to support certain research
projects at Yale. We generally do not have the right to control the
research that Yale is conducting with our funding, and our funds may
not be used to conduct research relating to products that we would like
to pursue. Additionally, if the research being conducted by Yale
results in technologies that Yale has not already licensed or agreed to
license to us, we may need to negotiate additional license agreements
or we may be unable to utilize those technologies.
There may be an adverse effect on the market price
of our common stock as a result of shares being available for sale in
the future.
Future additional sales of a substantial amount of
common stock in the public market or by private placement, or the
perception that these sales may occur, could adversely affect the
market price of our common stock from time to time. This could also
impair our ability to raise additional capital through the sale of our
equity securities. We had approximately 55.2 million shares of common
9
stock outstanding as of March 31, 2004,
including 13,553,845 shares from our recent private placement of common
stock and warrants. Options and warrants to purchase approximately 13.6
million shares of common stock, including warrants to purchase
3,688,463 shares of our common stock from our recent private placement,
were exercisable at March 31, 2004 and other options to purchase
approximately 0.9 million shares of common stock become exercisable at
various times through 2008.
If environmental laws become
stricter in the future, we may face large capital expenditures in order
to comply with environmental laws.
We cannot accurately predict
the outcome or timing of future expenditures that we may be required to
expend to comply with comprehensive federal, state and local
environmental laws and regulations. We must comply with environmental
laws that govern, among other things, all emissions, waste water
discharge and solid and hazardous waste disposal, and the remediation
of contamination associated with generation, handling and disposal
activities. To date, we have not incurred significant costs and are not
aware of any significant liabilities associated with our compliance
with federal, state and local laws and regulations. However,
environmental laws have changed in recent years and we may become
subject to stricter environmental standards in the future and may face
large capital expenditures to comply with environmental laws. We have
limited capital and are uncertain whether we will be able to pay for
significantly large capital expenditures. Also, future developments,
administrative actions or liabilities relating to environmental matters
may have a material adverse effect on our financial condition or
results of operations.
All of our operations are performed under
strict environmental and health safety controls consistent with the
Occupational Safety and Health Administration, the Environmental
Protection Agency and the Nuclear Regulatory Commission regulations. We
cannot be certain that we will be able to control all health and safety
problems. If we cannot control those problems, we may be held liable
and may be required to pay the costs of remediation. These liabilities
and costs could be material.
Even if we obtain
regulatory approval for our products, we currently lack the ability and
resources to commercialize the products.
If our products are
approved for sale by regulatory authorities, we will need to develop
manufacturing and marketing capability or make arrangements with third
parties to manufacture, distribute and sell our products. We do not
currently have and are not seeking arrangements for manufacturing or
marketing products on a commercial basis.
If the price
of our common stock declines to below $1.00 per share, our shares could
be delisted from the Nasdaq SmallCap Market
SM
.
If
the price of our common stock declines below $1.00 per share, we may
fail to meet Nasdaq's maintenance criteria, which may result in
the delisting of our common stock from the Nasdaq SmallCap
Market
SM
. In such event, trading, if any, in our common
stock may then continue to be conducted in the non-Nasdaq
over-the-counter market in what are commonly referred to as the
electronic bulletin board and the "pink
sheets". As a result, an investor may find it more
difficult to dispose of or obtain accurate quotations as to the market
value of our common stock. In addition, we would be subject to a Rule
promulgated by the Securities and Exchange Commission that, if we fail
to meet criteria set forth in such Rule, imposes various practice
requirements on broker-dealers who sell securities governed by the Rule
to persons other than established customers and accredited investors.
For these types of transactions, the broker-dealer must make a special
suitability determination for the purchaser and have received the
purchaser's written consent to the transactions prior to the
sale. Consequently, the Rule may have a materially adverse effect on
the ability of broker-dealers to sell our securities, which may
materially affect the ability of stockholders to sell our securities in
the secondary market.
A delisting from the Nasdaq SmallCap
Market
SM
will also make us ineligible to use Form S-3 to
register shares of our common stock with the Securities and Exchange
Commission, thereby making it
10
more difficult and expensive for us to
register our common stock and raise additional capital. We would also
incur additional costs under state blue-sky laws to sell equity if we
are delisted.
Additionally, we may decide to, or certain of our
investors may require that, we implement a reverse stock split in order
to maintain a higher stock price. The effect of any reverse stock split
of the common stock upon the market price of our common stock cannot be
predicted, and the history of reverse stock splits for companies in
similar circumstances is varied. The trading price of our common stock
may not rise in exact proportion to the reduction in the number of
shares of our common stock outstanding as a result of the reverse stock
split, and there may not be a sustained increase in the trading price
of our common stock after giving effect to the reverse stock split.
Moreover, the trading price may not remain above the thresholds
required by the Nasdaq SmallCap Market and we may not be able to
continue to meet the other continued listing requirements of the Nasdaq
SmallCap Market.
The resulting decrease in the number of shares
of our common stock outstanding could potentially impact the liquidity
of our common stock, especially in the case of larger block trades. The
reverse stock split would result in some stockholders owning
"odd-lots" of less than 100 shares of common
stock. Brokerage commissions and other costs of transactions in
odd-lots are generally higher than the costs of transactions in
"round-lots" of even multiples of 100
shares.
The reverse stock split could also result in a greater
spread between the number of authorized shares and the number of
outstanding shares, which may have the effect of discouraging an
attempt to change control of the Company, especially in the event of a
hostile takeover bid, and to make more difficult the removal of
incumbent management.
The rights that have been and may
in the future be granted to our stockholders may allow our Board and
management to deter a potential acquisition in which the Board and
management are to be replaced.
We have in place a stockholder
rights plan, or "poison pill", which enables
our board of directors to issue rights to purchase common stock when
someone acquires 20% or more of the outstanding shares of our
common stock. As a result of the plan, anyone wishing to take over the
company would most likely be forced to negotiate a transaction with our
Board and management in order not to trigger the pill. The need to
negotiate with the Board or management could frustrate a proposed
takeover particularly where the Board and management wish to remain
entrenched. This would prevent our stockholders from participating in a
takeover or tender offer, which might be of substantial value to
them.
USE OF PROCEEDS
The Selling Stockholders will
receive all of the proceeds from the resale of the Shares that may be
sold using this prospectus. We will not receive any of the proceeds
from the resale of the Shares. We will however receive the exercise
price of any options exercised by the Selling Stockholders. Any such
proceeds will be used for general corporate purposes.
11
SELLING STOCKHOLDERS
This
prospectus relates to the Shares that are being registered for resale
by the Selling Stockholders who have acquired or may acquire Shares
pursuant to our 2003 Stock Option Plan and Senior Executive Stock
Option Plan. The Selling Stockholders are as follows:
Stephen
K. Carter, M.D.
Director
Frank T.
Cary
Director
Alan Kessman
Director
and Chief Executive Officer
Charles K.
MacDonald
Director
William R.
Miller
Director
Alan C. Sartorelli,
Ph.D.
Director
Walter B.
Wriston
Director
Howard B.
Johnson
President and Chief Financial
Officer
The table below sets forth certain
information regarding the beneficial ownership of common stock of the
Selling Stockholders as of April 1, 2004, and the number of the Shares
being offered by this prospectus. The information contained in this
table may be amended or supplemented from time to
time.
Name
of Seller
Number of
shares
beneficially
owned prior
to the
offering
(1)
Total
number of
shares
covered
by
this
prospectus
Number of shares
issued
upon exercise
of options and
underlying
currently
exercisable options
covered by
this
prospectus
After all shares
underlying
currently exercisable options
are resold under
this
prospectus
Number
of
shares
beneficially
owned
% of
common
stock
beneficially
owned
Stephen
K. Carter,
M.D.
42,740
(3)
(2)
0
42,740
*
Frank
T.
Cary
145,458
(4)
(2)
0
145,458
*
Alan
Kessman
1,350,074
(5)
(2)
980,000
370,074
*
Charles
K.
MacDonald
57,740
(6)
(2)
0
57,740
*
William
R.
Miller
324,117
(7)
(2)
0
324,117
*
Alan
C. Sartorelli,
Ph.D.
482,402
(8)
(2)
0
482,402
*
Walter
B.
Wriston
140,458
(9)
(2)
0
140,458
*
Howard
B.
Johnson
247,499
(10)
(2)
0
247,499
*
*
Less
than one percent
(1)
The number of
shares beneficially owned is determined under rules promulgated by the
SEC and includes outstanding shares of common stock (including
restricted common stock) and options for common stock that have vested
or will vest within 60 days.
(2)
The
number of Shares subject to options which may be issued under the plans
to the Selling Stockholders (which, if issued upon exercise, will be
eligible for resale pursuant to this prospectus) is subject to awards
that may be made under the plans from time to time, and therefore, is
not yet determinable.
(3)
Reflects
42,740 shares issuable upon exercise of options. 16,811 of such shares
may be issued upon exercise of currently unexercisable options covered
by this prospectus. Director options fully vest on the first
anniversary of the date of the
grant.
(4)
Includes 82,740 shares
issuable upon exercise of options. 16,207 of such shares may be issued
upon exercise of currently unexercisable options covered by this
prospectus. Director options fully vest on the first anniversary of the
date of the grant.
(5)
Includes
12,756 shares held by a family trust of which Mr. Kessman is a
controlling member. Also includes 1,305,427 shares issuable upon
exercise of options. 80,000 of such shares may be issued upon exercise
of currently unexercisable options covered by this prospectus. These
options will vest 50% on December 10, 2004 and 100% on
December 10, 2005.
12
(6)
Reflects
57,740 shares issuable upon exercise of options. 16,811 of such shares
may be issued upon exercise of currently unexercisable options covered
by this prospectus. Director options fully vest on the first
anniversary of the date of the
grant.
(7)
Includes 134,711 shares
issuable upon exercise of options. 27,242 of such shares may be issued
upon exercise of currently unexercisable options covered by this
prospectus. Director options fully vest on the first anniversary of the
date of the grant.
(8)
Includes
190,874 shares beneficially owned by Dr. Sartorelli's wife, as to
which Dr. Sartorelli disclaims beneficial ownership. Also includes
82,197 shares issuable upon exercise of options. 16,811 of such shares
may be issued upon exercise of currently unexercisable options covered
by this prospectus. Director options fully vest on the first
anniversary of the date of the
grant.
(9)
Includes 86,490 shares
issuable upon exercise of options. 16,811 of such shares may be issued
upon exercise of currently unexercisable options covered by this
prospectus. Director options fully vest on the first anniversary of the
date of the grant.
(10)
Reflects
247,499 shares issuable upon exercise of options. 60,000 of such shares
may be issued upon exercise of currently unexercisable options covered
by this prospectus. These options will vest
33 1/3% on December 10, 2004,
66 2/3% on December 10, 2005 and 100% on
December 10, 2006.
13
PLAN OF DISTRIBUTION
The Selling
Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their
shares of common stock on any stock exchange, market or trading
facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. The Selling
Stockholders may use any one or more of the following methods when
selling shares:
•
ordinary brokerage
transactions and transactions in which the broker-dealer solicits
purchasers;
•
block trades in which the
broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the
transaction;
•
purchases by a
broker-dealer as principal and resale by the broker-dealer for its
account;
•
an exchange distribution in
accordance with the rules of the applicable
exchange;
•
privately negotiated
transactions;
•
settlement of short
sales;
•
broker-dealers may agree with
the Selling Stockholders to sell a specified number of such shares at a
stipulated price per share;
•
a
combination of any such methods of sale;
and
•
any other method permitted pursuant
to applicable law.
The Selling Stockholders may also sell shares
under Rule 144 under the Securities Act, if available, rather than
under this prospectus.
Broker-dealers engaged by the Selling
Stockholders may arrange for other brokers-dealers to participate in
sales. Broker-dealers may receive commissions or discounts from the
Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated.
The Selling Stockholders do not expect these commissions and discounts
to exceed what is customary in the types of transactions involved.
The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the shares of common stock owned by
them and, if they default in the performance of their secured
obligations, the pledgees or secured parties may offer and sell the
shares of common stock from time to time under this prospectus, or
under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of
Selling Stockholders to include the pledgee, transferee or other
successors in interest as Selling Stockholders under this
prospectus.
The Selling Stockholders and any broker-dealers or
agents that are involved in selling the shares may be deemed to be
"underwriters" within the meaning of the
Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on
the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
The amount of the Shares to be reoffered or resold pursuant to this
prospectus by each Selling Stockholder and any other person with whom
he is acting in concert for the purpose of selling our securities, may
not exceed, during any three-month period, the amount specified in Rule
144(e) of the Securities Act.
We cannot assure you that any of
the Selling Stockholders will offer for sale or sell any or all of the
Shares covered by this Prospectus.
14
LEGAL MATTERS
The validity of
the shares of common stock offered by us from time to time under this
prospectus will be passed upon for us by Fulbright & Jaworski
L.L.P., New York, New York.
EXPERTS
Ernst &
Young LLP, independent auditors, have audited our financial statements
included in our Annual Report on Form 10-K for the year ended December
31, 2003, as set forth in their report, which is incorporated by
reference in this prospectus and registration statement. Our financial
statements are incorporated by reference in reliance on Ernst &
Young LLP's report, given on their authority as experts in
accounting and auditing.
NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus (including the documents
incorporated by reference in this prospectus) contains forward-looking
statements (as that term is defined in the Private Securities
Litigation Reform Act of 1995) and information about our financial
condition, results of operations and business that are based on our
current and future expectations. You can find many of these statements
by looking for words such as 'estimate,'
'project,' 'believe,' 'anticipate,'
'intend,' 'expect' and similar expressions.
These statements reflect our current views with respect to future
events and are subject to risks and uncertainties, including those
discussed under 'Risk Factors,' that could cause our actual
results to differ materially from those contemplated in the
forward-looking statements. We caution you that no forward-looking
statement is a guarantee of future performance. You should not place
undue reliance on these forward-looking statements, which speak only as
of the date of this prospectus. We do not undertake any obligation to
publicly release any revisions to these forward-looking statements to
reflect events or circumstances after the date of this prospectus or to
reflect the occurrence of unanticipated events which may cause our
actual results to differ from those expressed or implied by the
forward-looking statements contained in this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We are subject
to the informational requirements of the Securities Exchange Act of
1934. Therefore, we file annual, quarterly and special reports, proxy
statements and other information with the SEC. Our filings are
available to the public over the internet at the SEC's web site
at
http://www.sec.gov
. You may also read and copy all of our
filings at the SEC's public reference facilities in Washington,
D.C., New York, New York and Chicago, Illinois. You may obtain
information on the operation of the SEC's public reference
facilities by calling the SEC at 1-800-SEC-0300. You can also read and
copy all of our filings at the offices of the Nasdaq Stock Market, 1735
K Street N.W., Washington, D.C. 20006.
The SEC allows us to
'incorporate by reference' the information into this
prospectus. This means that we can disclose important information to
you by referring you to another document filed separately with the SEC.
The information that we incorporate by reference is considered to be
part of this prospectus. Because we are incorporating by reference our
future filings with the SEC, this prospectus is continually updated and
those future filings may modify or supersede some or all of the
information included or incorporated in this prospectus. This means
that you must look at all of the SEC filings that we incorporate by
reference to determine if any of the statements in this prospectus or
in any document previously incorporated by reference have been modified
or superseded. This prospectus incorporates by reference the documents
listed below and any future filings we will make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 until the Selling Stockholders sell all of our common stock
registered under this prospectus.
—
Our annual report on Form 10-K for the
year ended December 31, 2003;
—
Our
current reports on Form 8-K filed on January 15, 2004, January 20,
2004, February 6, 2004, February 11, 2004, March 5, 2004, March 8,
2004, March 11, 2004, March 15, 2004 (including Amendment No. 1 thereto
on Form 8-K/A filed on March 18, 2004) and March 29, 2004;
15
—
The
description of our common stock contained in Item 1 of our Registration
Statement on Form 8-A dated July 31, 1995; and
—
The rights agreement dated as of
October 26, 1998 as Exhibit 4.1 of our Current Report on Form 8-K filed
on October 26, 1998.
The information about us contained in this
prospectus should be read together with the information in the
documents incorporated by reference. You may request a copy of any or
all of these filings, at no cost, by writing or telephoning us at Vion
Pharmaceuticals, Inc., 4 Science Park, New Haven, Connecticut 06511,
Attention: Investor Relations, Telephone: (203)
498-4210.
16
PART
II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3.
Incorporation of Documents by Reference.
The following documents filed by Vion Pharmaceuticals, Inc. (the
"Company" or the
"Registrant") with the Commission pursuant to
the Securities Act of 1933, as amended (the "Securities
Act") and the Securities Exchange Act of 1934, as amended
(the "Exchange Act") are incorporated by
reference in this Registration Statement:
(a)    The Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2003.
(b)    The Company's Current Reports on Form
8-K filed on filed on January 15, 2004, January 20, 2004, February 6,
2004, February 11, 2004, March 5, 2004, March 8, 2004, March 11, 2004,
March 15, 2004 (including Amendment No. 1 thereto on Form 8-K/A filed
on March 18, 2004) and March 29, 2004.
(c)    The description of the Company's
Common Stock contained in Item 1 of the Company's Registration
Statement on Form 8-A filed on July 31, 1995.
(d)    The rights agreement dated as of October
26, 1998 as Exhibit 4.1 of our Current Report on Form 8-K filed on
October 26, 1998.
All documents subsequently filed by the
Registrant with the Commission pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which (i) indicates that all securities offered under this
Registration Statement have been sold or (ii) which deregisters all
securities remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part of this
Registration Statement from the date of filing of such documents.
ITEM 4.
Description of Securities.
Not
applicable.
ITEM 5.
Interest of Named Experts and
Counsel.
Not applicable.
ITEM
6.
Indemnification of Directors and Officers.
Under the General Corporation Law of the State of Delaware
("DGCL"), a corporation may include
provisions in its certificate of incorporation that will relieve its
directors of monetary liability for breaches of their fiduciary duty to
the corporation, except under certain circumstances, including a breach
of the director's duty of loyalty, acts or omissions of the
director not in good faith or which involve intentional misconduct or a
knowing violation of law, the approval of an improper payment of a
dividend or an improper purchase by the corporation of stock or any
transaction from which the director derived an improper personal
benefit. The registrant's Restated Certificate of Incorporation,
as amended, eliminates the personal liability of directors to the
registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director with certain limited exceptions set forth
in the DGCL.
Section 145 of the DGCL grants to corporations the
power to indemnify each officer and director against liabilities and
expenses incurred by reason of the fact that he or she is or was an
officer or director of the corporation if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed
to 2 the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
or her conduct was unlawful. The registrant's Restated
Certificate of Incorporation, as amended, and Bylaws provide for
II-1
indemnification of each officer and director
of the registrant to the fullest extent permitted by the DGCL. Section
145 of the DGCL also empowers corporations to purchase and maintain
insurance on behalf of any person who is or was an officer or director
of the corporation against liability asserted against or incurred by
him in any such capacity, whether or not the corporation would have the
power to indemnify such officer or director against such liability
under the provisions of Section 145. The registrant has purchased and
maintains a directors' and officers' liability policy for
such purposes.
ITEM 7.
Exemption from Registration
Claimed.
All of the restricted securities issued by us to
the Selling Stockholders who are reoffering and reselling such
restricted securities pursuant to this registration statement were
issued in reliance upon the exemption from registration under Section
4(2) and/or Regulation D of the Securities Act relating to sales by an
issuer not involving any public offering. The restricted securities
were issued as incentive compensation to a select group of employees of
the Company, all of whom either received adequate information about the
Company or had access, through employment or other relationships, to
adequate information about the Company including, but not limited to
our annual, quarterly and other reports and statements filed with the
Securities and Exchange Commission pursuant to the Exchange Act. All of
the recipients of such restricted securities have been informed that
they are restricted securities and therefore cannot be resold except
pursuant to a valid exemption from registration under the Securities
Act or pursuant to an effective registration statement under the
Securities Act. The issuances of such restricted securities were made
without the use of an underwriter.
ITEM
8.
Exhibits.
Exhibit
No.
Description
4.1
Vion
Pharmaceuticals, Inc. 2003 Stock Option Plan.
4.2
Senior Executive
Stock Option Plan (incorporated by reference; previously filed as an
exhibit to the Company's Quarterly Report on Form 10-QSB for the
quarter ended 3/31/1999).
5.1
Opinion of
Fulbright  & Jaworski  L.L.P.
23.1
Consent of Counsel (contained in Exhibit
5.1).
23.2
Consent of Independent
Auditors.
24.1
Power of Attorney (included
in signature page).
ITEM
9.
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
II-2
Rule  424(b) if, in aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in
the effective 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)    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.
(c)    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.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8
and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
New Haven, State of Connecticut, on the 30
th
day of
April  2004.
VION
PHARMACEUTICALS, INC.
By:
/s/
Howard B. Johnson
Howard B.
Johnson
President and Chief Financial
Officer
POWER OF ATTORNEY
KNOW ALL
PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Alan Kessman and Howard B. Johnson, or
either of them, as his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement (or any other Registration Statement for the same offering
that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act of 1933), and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of
them, or their or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements
of the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the dates
indicated:
Signature
Title
Date
/s/ William R. Miller
Chairman of the Board
of
Directors
April 30, 2004
William R.
Miller
/s/ Alan Kessman
Chief Executive Officer
(Principal
Executive Officer)
April 30, 2004
Alan
Kessman
/s/ Howard B. Johnson
President and Chief Financial
Officer
(Principal Financial and
Accounting Officer)
April
30, 2004
Howard B.
Johnson
/s/ Frank T.
Cary
Director
April 30, 2004
Frank T. Cary
/s/ Stephen K. Carter,
M.D.
Director
April 30,
2004
Stephen K. Carter,
M.D.
/s/ Charles K.
MacDonald
Director
April 30, 2004
Charles K. MacDonald
II-4
Signature
Title
Date
/s/ Alan C. Sartorelli,
Ph.D.
Director
April 30,
2004
Alan C. Sartorelli,
Ph.D.
/s/ Walter B.
Wriston
Director
April 30,
2004
Walter B.
Wriston
II-5
INDEX TO
EXHIBITS
Exhibit
   No.
Description
4.1
Vion
Pharmaceuticals, Inc. 2003 Stock Option
Plan.
4.2
Senior
Executive Stock Option Plan (incorporated by reference; previously
filed as an exhibit to the Company's Quarterly Report on Form
10-QSB for the quarter ended 3/31/1999).
5.1
Opinion of Fulbright  &
Jaworski  L.L.P.
23.1
Consent of
Counsel (contained in Exhibit 5.1).
23.2
Consent of Independent Auditors.
24.1
Power of Attorney (included in signature
page).