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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Under Rule 14a-12
NORTHFIELD LABORATORIES INC.
(Name of Registrant as Specified in its Charter)
C. ROBERT COATES
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee
paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party: C. Robert Coates
4) Date Filed: September 09, 2002
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MISLEADING OR INCOMPLETE STATEMENTS BY NORTHFIELD
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Page Statement in ISS Document Key Point(s)
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Page "In August 2001, Mr. Coates * On August 3, 2001 Northfield
7 filed an action against the announces that it will host its
company and its directors Annual Meeting on August 31, 2001
alleging that the company giving shareholders less than 30
inequitably advanced the 2001 days notice of the meeting. For
annual meeting from Oct. 11, the years 2000, 1999, 1998 and
2001 to Aug. 31, 2001 for the 1997, the meeting dates had been
purposes of preventing Mr. October 12, October 28, September
Coates from waging an effective 28 and October 17 respectively.
proxy contest. The company
stated that the proxy statement * The company files its proxy
with respect to the Aug. 31, statement with the SEC on August
2001 meeting date was mailed to 3, 2001. The company knows that it
shareholders prior to the date has not complied with the
Mr. Coates filed his lawsuit and agreement it reached with Mr.
notified the company of his Coates as a condition to his not
intention to nominate two of his running a proxy contest in 2000.
candidates to the board.
According to the company, it had * On August 10, 2001 Mr. Coates
not received any prior files an action against Northfield
communication from Mr. Coates and its directors. The suit
indicating his intention to alleges that the defendants
nominate directors to the board. inequitably advanced the 2001
On the same day, Mr. Coates annual meeting from October 11,
withdrew his lawsuit." 2001, the date Northfield had
identified as the expected meeting
date, to August 31, 2001 for the
purposes of preventing Mr. Coates
from waging an effective proxy
contest. The lawsuit also mentions
"the lack of information
stockholders and the investing
public have about Northfield" -
issues that Northfield had
promised to rectify, as captured
in a Northfield press release, one
year earlier.
* The judge denies Northfield's
motion to dismiss Mr. Coates' suit
and agrees to hear the suit on the
day before the scheduled annual
meeting.
* On August 16, 2001 Northfield
announces that it had completed
preparation of all its Biologics
License Application (BLA)
components, including collection
and analysis of its clinical trial
data for PolyHeme. Neither
Northfield's August 3, 2001 press
release nor its August 3, 2001
Proxy Statement mentioned
Northfield's plan to file the BLA.
* On August 17, 2001 upon learning
of Northfield's plan to file its
BLA Mr. Coates withdraws his
lawsuit. The prepared 14A Proxy
Statement is not filed and NO
VOTES ARE SOLICITED. Mr. Coates
wishes to be constructive, not
disruptive to the FDA filing
process by Northfield
Laboratories.
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Page "Contrary to Mr. Coates' * The "strength of the data" is a
11 contention that the company subjective statement; the FDA only
filed a deficient BLA for issues a 'Refusal-To-File' (RTF)
PolyHeme, management asserts when simple, well known and
that the strength of the data required components of an
justified the BLA submission." application are missing
* The company states in its 2002
annual report (page 3) that it
submitted its BLA to the FDA
"seeking approval to market
PolyHeme for use in the treatment
of urgent, life-threatening blood
loss", but according to a 10/11/01
news release from Northfield their
study indicates that PolyHeme was
used to treat patients with severe
blood loss who refused blood
transfusion, and was compared to
'historical' data in which such
patients generally died.
* The purpose of an RTF is not to
provide an opinion on the safety
and efficacy of the product
* Would the FDA be discussing
"strength of data" prior to
resolving missing components of an
application?
* Can you say that the "strength of
data justified" the submission
without knowing if the
manufacturing processes were
acceptable to the FDA?
* An RTF means that the BLA was in
fact not filed; if the BLA was not
filed, why did the company issue
$560,000 in bonuses "in
recognition of the Company filing
a Biologics License Application
("BLA") with the FDA for PolyHeme
(10Q, October 15, 2001)?"
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Page "In the meantime, management * The company had $18.4 million left
11 notes that the company has $18.4 as of May 31, 2002. It has
million in available cash to substantially less than $18.4
support the company's on-going million in cash left as of August
operations for at least the next 30, 2002
18 months. Furthermore,
management believes that
subsequent to getting FDA
approval for PolyHeme, the
company will be in a stronger
position to accomplish its
following goals:
- Raise additional capital
for the company
- Secure a pharmaceutical
partner and
- Enhance the company's
profile in the scientific and
investment communities."
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Page "Management adds that although * What did Northfield get from Dr.
12 Dr. Ness is already a consultant Ness in fiscal year 2002 for the
to the company, if elected to $80,000 it paid him?
the board, he would be able to
share his expertise with all * Did his 2002 involvement with
members of the board by Northfield not include meetings to
participating in regular board share some of his expertise with
meetings." the directors?
* If he makes it on the board, and
can presumably share his expertise
with all members, why does he need
to remain a consultant as laid out
in the 2002 proxy? ("Dr. Ness has
provided consulting services to
Northfield relating to FDA
regulatory matters and the
sourcing of red blood cells from
major blood banking organizations.
Northfield expects to enter into
an agreement with Dr. Ness under
which he will agree to continue to
provide such services to
Northfield.")
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Page Contrary to Mr. Coates' * The members of the nominating
12 contention, management proclaims committee are themselves
that the Nominating Committee candidates for election this year
carefully considered both Mr.
Coates and Mr. Williams as * Messrs. Chelberg and Savner talked
director nominees and found them to Mr. Coates but declined to
seriously lacking in the discuss his qualifications because
qualifications that merit "something happened" several days
nomination to the board. prior to the call; that something
turned out to be DeWoskin's
resignation
* Mr. Gould refused to accept an
offer to have Mr. Williams fly up
at his own expense and meet with
the Nominating Committee.
* On May 15, 2002 Coates and
Williams sent a letter to
Northfield requesting a meeting
with the board; Northfield
responded on May 21 suggesting a
July 11, 2002 meeting to coincide
with their regularly scheduled
board meeting
* On June 10, 2002 Coates sent a
letter to Northfield stating his
preference to meet with the board
earlier rather than later and
proposed a meeting "within the
next two weeks"; Northfield
responded that the board could not
meet with Coates and Williams
prior to July 11
* On July 3, 2002 Northfield sent a
letter stating that it had
postponed its July 11 meeting and
that they had "recently
established a nominating
committee"; the letter provided
Messrs. Chelberg's and Savner's
phone numbers and suggested that
Mr. Coates call them to discuss
his nominations
* It would appear that the
nominating committee was
established well after Messrs.
Coates and Williams announced
their candidacy for the board of
directors
* On July 9, 2002 Mr. Coates sends a
letter to Mr. David Savner stating
that the bylaws of Northfield
allow for up to nine directors and
that the current members of the
board could invite Coates and
Williams to join the board
immediately
* The July 9, 2002 letter also
stated that it seemed "that the
board has changed its mind about
my meeting with the nominating
committee regarding" Mr. Coates
credentials; in addition, the
letter states that "even though"
Savner has "indicated that
neither" him "nor the board will
be able to talk to me over the
next `thirty to forty days', I
will still make myself available
to meet or talk to any or all of
the directors at any time."
* On July 24, 2002 Northfield sent a
letter stating "that the
Nominating Committee of the Board
of Directors of Northfield
Laboratories Inc., after carefully
considering the director
nominations you recently
submitted, has recommended to the
Board of Directors that your
nominees not be included in the
individuals nominated by the Board
for election as directors at
Northfield's 2002 Annual Meeting
of Stockholders."
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Page "Management's approach is to * The FDA has not accepted
13 achieve FDA approval for Northfield's BLA yet
PolyHeme first, and then raise
additional capital, secure a * It takes, on average,
pharmaceutical partner, and approximately 18 months to get a
enhance PolyHeme's profile." product approved at the FDA from
the time the BLA is accepted
* The company had $18.4 million left
as of May 31, 2002
* Net cash used in operating
activities for fiscal year 2002
was $10,103,579
* The company has less than $18.4
million in cash left as of August
30, 2002
* Seeking FDA approval prior to
raising additional capital is a
risky proposition since the BLA
has not been re-filed yet and thus
the 18 month approval process at
the FDA has not begun yet
* If the review process takes 18
months or more, Northfield will
run out of cash
* Most important, given Northfield's
RTF and the recent resignation of
their CEO, there is no reason to
believe Northfield can ever gain
FDA approval on its own.
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Page "After Mr. DeWoskin resigned as * Was he fired or did he resign?
15 CEO, the company retained him as
a consultant particularly due to * If you resign are you given a
his expertise in the "severance package?"
manufacturing side of PolyHeme."
* What expertise do Marc D.
Doubleday, VP of Process
Engineering, and Robert McGinnis,
VP of Manufacturing Development,
bring to Northfield?
---- -------------------------------- -----------------------------------
Page "After Mr. DeWoskin resigned as * DeWoskin's salary in 2002 was
15 CEO, the company retained him as $281,525
a consultant particularly due to
his expertise in the * DeWoskin's benefits in 2002 were
manufacturing side of PolyHeme. $27,306
Ultimately, Mr. DeWoskin's
severance package has been * Two times $308,831 is $617,662.
transformed into a consulting It is certainly not $841,098.
agreement. In lieu of the
severance payment, Mr. DeWoskin * DeWoskin's consulting agreement
will receive a monthly can be "extended by mutual
consulting fee of $26,962 until agreement of the parties"
Dec. 31, 2004, which amounts to
a total of $647,088. Mr.
DeWoskin's annual salary and
bonus as CEO in fiscal 2002 was
a total of $420,549. According
to management, Mr. DeWoskin's
severance package already
entitles him to two times salary
plus benefits, or at least
$841,098."
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IMPLIED STATEMENTS IN THE DOCUMENT
* Northfield's comments to ISS implies that the election is an either/or
choice. The reality is that Northfield can nominate and elect Bob
Coates and Bert Williams without displacing all incumbent directors and
thus giving Northfield enough votes to add Messrs. Bierbaum and Dr. Ness
to the Northfield board.
MISSING STATEMENTS REGARDING NORTHFIELD
* There was no mention of Mr. Olshansky's problems with the SEC
* There was no mention of the fact that two nominees (Messrs. Chelberg and
Bierbaum) with affiliations to PepsiAmericas, Inc., which owns 10.5% of the
outstanding shares, would control 28.6% of the board of directors
* There is no mention of DeWoskin's comments to TheStreet.com and The Chicago
Tribune regarding manufacturing issues. DeWoskin's comments directly
contradict those of Gould. For example, The Chicago Tribune published the
following statement: "Northfield Chief Executive Richard DeWoskin says the
application process is not the issue. He says the FDA's problems with the
application are focused on certain manufacturing processes and
'chemistries' the company plans to use in the production of Polyheme."
* There is no mention of the words "RTF" or "Refusal-To-File" - a huge issue
for anyone seeking FDA approval for their product..and further proof that
management is probably incompetent.