As filed with the Securities and Exchange Commission on July 20, 2001
Registration Statement No. 333-54138
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO THE
REGISTRATION STATEMENT ON
FORM S-3
UNDER THE SECURITIES ACT OF 1933
---------------------------
IMMTECH INTERNATIONAL, INC.
(Exact name of Registrant as Specified in Its Charter)
DELAWARE 39-1523370
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
150 FAIRWAY DRIVE, SUITE 150,
VERNON HILLS, ILLINOIS 60061
(847) 573-0033
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
---------------------------
T. STEPHEN THOMPSON, PRESIDENT
150 FAIRWAY DRIVE, SUITE 150,
VERNON HILLS, ILLINOIS 60061
(847) 573-0033
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
---------------------------
Copy to:
John F. Fritts, Esq.
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038-4892
---------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SHARES TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
------------------------------------ -------------- ---------------- ----------------- ----------------
Common Stock, par value $0.01 per
share 834,250 shares $10.80 $9,009,900 $746.21 (1)
------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the low bid and high
asked prices of the common stock on the NASDAQ National Market System on
July 17, 2001. The aggregate registration fee is $2,252.48 and $1,506.27
was previously paid with the original filing of this Registration
Statement, filed with the Commission on January 22, 2001. The registration
fee paid with this Amendment No. 1 is the balance due of $746.21, as set
forth above.
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
--------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED JULY 20, 2001
PROSPECTUS
834,250 SHARES
[LOGO] IMMTECH INTERNATIONAL, INC.
COMMON STOCK
---------------------------
Stockholders of Immtech International, Inc. (the "Company") named under the
caption "Selling Stockholders" may offer and sell up to 834,250 shares of the
Company's common stock (the "Shares"). The Company will receive no proceeds from
the sale of Shares offered by this Prospectus.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-1 OF THIS
PROSPECTUS BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED.
The Selling Stockholders may sell the Shares from time to time in
transactions occurring either on or off the NASDAQ National Market System at
prevailing market prices or at negotiated prices. Sales may be made through
brokers or through dealers, who are expected to receive customary commissions or
discounts. The Company will not receive any of the proceeds from such sales. No
period of time has been fixed within which Shares may be offered or sold. The
Company's obligation to keep the Registration Statement of which this Prospectus
is a part effective expires as to 584,250 Shares six months from the date of
this Prospectus and on March 15, 2006 as to the remaining 250,000 Shares, or
sooner if all Shares are sold.
The Company's common stock is traded on the NASDAQ National Market System
under the symbol "IMMT". The last reported sale price of the Company's common
stock on July 19, 2001, was $11.00.
The address of the Company's principal executive offices is 150 Fairway
Drive, Suite 150, Vernon Hills, Illinois 60061, and the Company's telephone
number is (847) 573-0033.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is July 20, 2001.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS,
INCORPORATED BY REFERENCE OR PROVIDED BY SUPPLEMENT. WE HAVE NOT AUTHORIZED
ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. THIS PROSPECTUS IS NOT AN
OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION CONTAINED
IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS
OF THE TIME OF THE DELIVERY OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.
TABLE OF CONTENTS
RISK FACTORS.................................................................S-1
WHERE YOU CAN FIND MORE INFORMATION..........................................S-9
CERTAIN INFORMATION.........................................................S-10
FORWARD-LOOKING STATEMENTS..................................................S-10
THE COMPANY.................................................................S-11
USE OF PROCEEDS.............................................................S-14
SELLING STOCKHOLDERS........................................................S-14
PLAN OF DISTRIBUTION........................................................S-15
LEGAL MATTERS...............................................................S-16
EXPERTS.....................................................................S-16
GLOSSARY....................................................................S-16
-i-
RISK FACTORS
An investment in the securities offered hereby (the "Shares") involves a
high degree of risk. In addition to the other information contained in this
Prospectus, the following risk factors should be considered carefully in
evaluating the Company and its business before purchasing the Shares.
THE COMPANY IS A DEVELOPMENT STAGE COMPANY, AND THERE IS NO ASSURANCE THAT THE
COMPANY WILL SUCCESSFULLY DEVELOP A COMMERCIALLY VIABLE PRODUCT.
The Company is at an early stage of clinical development activities
required for drug approval and commercialization. Since its formation in October
1984, the Company has engaged in developing research programs, recruiting
scientific advisors and scientists, negotiating and consummating technology
licensing agreements, and sponsoring research and development activities. The
Company has generated no revenue from product sales. The Company does not have
any products currently available for sale, and none are expected to be
commercially available for several years, if at all. There can be no assurance
that the research the Company funds and manages will lead to the development of
commercially viable products.
THE COMPANY HAS A HISTORY OF LOSSES AND AN ACCUMULATED DEFICIT; THE COMPANY'S
FUTURE PROFITABILITY IS UNCERTAIN.
The Company has experienced significant operating losses since its
inception and expects to incur additional operating losses for at least the next
several years as the Company continues its research and development and clinical
trial efforts. As of March 31, 2001, the Company had an accumulated deficit of
approximately $32,775,000.
THE COMPANY HAS A NEED FOR SUBSTANTIAL ADDITIONAL FUNDS.
The Company's operations to date have consumed substantial amounts of cash.
Negative cash flow from operations is expected to continue and to accelerate in
the foreseeable future. The Company's cash requirements may vary materially from
those now planned because of results of research and development, results of
pre-clinical and clinical testing, responses to the Company's grant requests,
relationships with strategic partners, changes in the focus and direction of the
Company's research and development programs, competitive and technological
advances, the FDA regulatory process and other factors. In any of these
circumstances the Company may require substantially more funds than it currently
has available or currently intends to raise to continue its business. The
Company may seek to satisfy its future funding requirements through public or
private offerings of securities, by collaborative or other arrangements with
major pharmaceutical companies, or from other sources. Additional financing may
not be available when needed or may not be available on terms acceptable to the
Company. If adequate financing is not available, the Company may not be able to
continue as a going concern or may be required to delay, scale back or eliminate
certain of its research and development programs, to relinquish rights to
certain of its technologies or product candidates, to forego desired
opportunities, or to license third parties to commercialize products or
technologies that the Company would otherwise seek to develop itself. To the
extent the Company raises additional capital by issuing equity securities,
ownership dilution to existing stockholders will result.
SUBSTANTIAL DOUBT ABOUT COMPANY'S ABILITY TO CONTINUE AS A "GOING CONCERN."
The Company has a shortage of unrestricted working capital and has had
recurring losses from operations and negative cash flows from operations since
its inception. These factors, among others discussed herein, raise substantial
doubt about the Company's ability to continue as a going concern. (See "Item 6.
Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Item 7. Financial Statements -- Notes to Financial Statements and
Independent Auditors' Report" (which contains an explanatory paragraph relating
to substantial doubt about the Company's ability to continue as a going concern)
and elsewhere in the Company's Form 10-KSB/A (Amendment No. 1), incorporated by
reference herein, for further information on the Company's financial position
and results of operations.) The Company's ability to continue to operate will
ultimately depend upon the Company raising additional funds, attaining
profitability and being able to attain profit and operate at a profit on a
consistent basis, which will not occur for some time and may never occur. In
such a situation, the Company will not be able to continue as a going concern.
S-1
THE COMPANY IS DEPENDENT ON KEY PERSONNEL.
The Company's business depends to a significant degree on the continuing
contributions of its key management, scientific and technical personnel, as well
as on the continued discoveries of scientists, researchers, and technicians at
The University of North Carolina at Chapel Hill ("UNC"), Duke University
("Duke"), Auburn University ("Auburn") and Georgia State University ("Georgia
State") (collectively, the "Consortium") who have entered into an agreement
dated January 15, 1997 (the "Consortium Agreement") by which the members of the
Consortium have agreed to give exclusive rights to the Company to commercialize
the pharmaceutical product candidates developed in the Consortium-member
laboratories. There can be no assurance that the loss of certain members of
management or the scientists, researchers and technicians from the
Consortium-member universities would not materially adversely affect the
Company. The Company has no key man life insurance policy on any of its
executives.
ADDITIONAL RESEARCH GRANTS MAY NOT BE AVAILABLE.
The Company will continue to apply for new grants to support continuing
research and development of the dication platform technology and/or, with its
joint venture company, NextEra, the biological product candidates. The process
of obtaining grants is extremely competitive and there can be no assurance that
any of the grant applications will be acted upon favorably.
THE COMPANY'S ADVANCED PRODUCT CANDIDATES ARE IN EARLY STAGE CLINICAL TRIALS.
All of the Company's product candidates, including DB289, require
additional clinical testing, regulatory approval and development of marketing
and distribution channels, all of which are expected to require substantial
additional investment prior to commercialization. There can be no assurance that
the Company's product candidates will be successfully developed, prove to be
safe and effective in human clinical trials, meet applicable regulatory
standards, be capable of being produced in commercial quantities at acceptable
costs, be eligible for third party reimbursement from governmental or private
insurers, be successfully marketed, or achieve market acceptance.
THERE ARE SUBSTANTIAL UNCERTAINTIES RELATED TO CLINICAL TRIALS.
To obtain required regulatory approvals for the commercial sale of its
product candidates, the Company must demonstrate through clinical trials that
such product candidates are safe and effective for their intended uses.
The Company may find, at any stage of its research and development, that
product candidates which appeared promising in earlier clinical trials do not
demonstrate safety or effectiveness in larger-scale clinical trials and
therefore do not receive regulatory approvals. The results from pre-clinical
testing and early clinical trials may not be predictive of results obtained in
later clinical trials and large-scale testing. Companies in the pharmaceutical
and biotechnology industries have suffered significant setbacks in various
stages of clinical trials, even after promising results had been obtained in
earlier stage trials. Completion of the clinical trials may be delayed by many
factors, including slower than anticipated patient enrollment, difficulty in
securing sufficient supplies of clinical trial materials or adverse events
occurring during clinical trials. Completion of testing, studies and trials may
take several years, and the length of time varies substantially with the type,
complexity, novelty, and intended use of the product. Delays or rejections may
be based upon many factors, including changes in regulatory policy during the
period of product development. No assurance can be given that any of the
Company's development programs will be successfully completed, that any
Investigational New Drug application filed with the FDA (or any foreign
equivalent filed with the appropriate foreign authorities) will become
effective, that additional clinical trials will be allowed by the FDA or other
regulatory authorities or that clinical trials will commence as planned. There
have been delays in the Company's testing and development schedules to date and
there can be no assurance that the Company's expected testing and development
schedules will be met.
THE COMPANY HAS NO MANUFACTURING CAPABILITY.
The Company's ability to conduct clinical trials and its ability to
commercialize its product candidates will depend in part upon its ability to
manufacture its product candidates either directly or through third parties at a
competitive cost and in accordance with FDA and other regulatory requirements.
The Company currently lacks the facilities and personnel to manufacture
products. There can be no assurance that the Company will be able to acquire
S-2
such resources either directly or through third parties at reasonable costs if
it develops commercially viable products.
THE COMPANY IS DEPENDENT ON THIRD-PARTY RELATIONSHIPS.
The Company follows a business strategy of utilizing the expertise and
resources of third parties in a number of areas, including the research and
development of potential products, the manufacture of potential products for
clinical trial purposes, the conduct of pre-clinical and clinical trials, and
the future development and manufacture of commercialized drugs. This strategy
creates risks to the Company by placing critical aspects of the Company's
business in the hands of third parties whom the Company may not be able to
control. If these third parties do not perform in a timely and satisfactory
manner, the Company may incur costs and delays in the conduct of its business as
it seeks alternate sources of such products and services, if available. Such
costs and delays may have a material adverse effect on the Company.
The Company has invested in NextEra Therapeutics Inc. ("NextEra") in a
joint venture with Franklin Research Group ("Franklin") and Dr. Larry Potempa by
contributing technology, patent assignments and cash. The success of NextEra is
partially dependent on the performance by Franklin of its obligations to NextEra
and the results of Dr. Potempa's research.
The Company may seek additional third party relationships in certain areas,
particularly in situations in which the Company believes that the clinical
testing, marketing, manufacturing and other resources of a pharmaceutical
company collaborator will enable the Company to develop particular products or
geographic markets which are otherwise beyond the Company's resources and/or
capabilities. There is no assurance that the Company will be able to obtain any
such collaboration, or any other research and development, manufacturing, or
clinical trial agreement. The inability of the Company to obtain and maintain
satisfactory relationships with third parties may have a material adverse effect
on the Company.
THE COMPANY IS UNCERTAIN ABOUT ITS ABILITY TO PROTECT OR OBTAIN NECESSARY
PATENTS AND PROPRIETARY INFORMATION.
There can be no assurance that any particular patent will be granted or
that issued patents will provide the Company, directly or through licenses, with
the protection contemplated. Patents and licenses of patents can be challenged,
invalidated or circumvented. It is also possible that competitors will develop
similar products simultaneously. The Company's breach of any license agreement
or the failure to obtain a license to any technology or process which may be
required to develop or commercialize one or more of its product candidates may
have a material adverse effect on the Company.
The pharmaceutical and biotechnology fields are characterized by a large
number of patent filings, and a substantial number of patents have already been
issued to other pharmaceutical and biotechnology companies. Third parties may
have filed applications for or have been issued patents and may obtain
additional patents and proprietary rights related to products or processes
competitive with or similar to those that the Company is attempting to develop
and commercialize. The Company may not be aware of all of the patents
potentially adverse to the Company's interests that may have been issued to
others. No assurance can be given that patents do not exist, have not been
filed, or could not be filed or issued, which contain claims relating to the
Company's technology, products or processes. If patents have been or are issued
to others containing preclusive or conflicting claims, then the Company may be
required to obtain licenses to one or more of such patents or to develop or
obtain alternate technology. There can be no assurance that the licenses that
might be required for the Company's technology, processes or products would be
available on commercially acceptable terms, or at all.
Because of the substantial length of time and expense associated with
bringing new products to the marketplace through the development and regulatory
approval process, the biotechnology industry places considerable importance on
patent and trade secret protection for new technologies, products and processes.
Since patent applications in the United States are confidential until patents
are issued and since publication of discoveries in the scientific or patent
literature often lag behind actual discoveries, the Company cannot be certain
that it (or any licensor) was the first to make the inventions covered by
pending patent applications or that it (or any licensor) was the first to file
patent applications for such inventions. The patent positions of pharmaceutical
and biotechnology companies can be highly uncertain and involve complex legal
and factual questions, and therefore the breadth of claims allowed in
S-3
pharmaceutical and biotechnology patents, or their enforceability, cannot be
predicted. There can be no assurance that any patents under pending patent
applications or any further patent applications will be issued. Furthermore,
there can be no assurance that the scope of any patent protection will exclude
competitors or provide competitive advantages to the Company, that any of the
Company's patents that have been issued or may be issued will be held valid if
subsequently challenged, or that others, including competitors or current or
former employers of the Company's employees, advisors and consultants, will not
claim rights in, or ownership to, the patents and other proprietary rights held
by the Company. There can be no assurance that others will not independently
develop substantially equivalent proprietary information or otherwise obtain
access to the Company's proprietary information, or that others may not be
issued patents that may require licensing and the payment of significant fees or
royalties by the Company.
The biotechnology industry has experienced extensive litigation regarding
patent and other intellectual property rights. The Company could incur
substantial costs in defending itself in suits that may be brought against the
Company claiming infringement of the rights of others or in asserting the
Company's patent rights in a suit against another party. The Company may also be
required to participate in interference proceedings declared by the United
States Patent and Trademark Office for the purpose of determining the priority
of inventions in connection with the patent applications of the Company or other
parties.
Adverse determinations in litigation or interference proceedings could
require the Company to seek licenses (which may not be available on commercially
reasonable terms) or subject the Company to significant liabilities to third
parties, and could therefore have a material adverse effect on the Company. Even
if the Company prevails in an interference proceeding or a lawsuit, substantial
resources of the Company, including the time and attention of its officers, will
be required.
As of June 8, 1995, certain legislative changes implementing the General
Agreement on Trade and Tariffs resulted in changes to United States patent laws
that affect the length of patent protection. Whereas the term for patent
applications used to be for a period of seventeen years from the date of grant,
the new term of a United States patent commences on the date of issuance and
terminates twenty years from the earliest effective filing date of the
application. The time from filing to issuance of a biotechnology patent
application is often more than three years; consequently, a twenty-year term
from the effective date of filing may result in a negative impact on the
Company's patent position by offering a substantially shortened term of
protection.
The Company also relies on trade secrets, know-how and technological
advancement to maintain its competitive position. Although the Company uses
confidentiality agreements and employee proprietary information and invention
assignment agreements to protect its trade secrets and other unpatented
know-how, these agreements may be breached by the other party thereto or may
otherwise be of limited effectiveness or enforceability.
THE COMPANY'S BUSINESS HAS SIGNIFICANT COMPETITION; THE COMPANY'S PRODUCT
CANDIDATES MAY BECOME OBSOLETE PRIOR TO COMMERCIALIZATION DUE TO ALTERNATIVE
TECHNOLOGIES.
The biopharmaceutical field is characterized by extensive research efforts
and rapid technological progress. Competition from other biotechnology
companies, pharmaceutical companies and research and academic institutions is
intense. Other companies are engaged in research and product development for
treatment of the same diseases as the Company. New developments in molecular
cell biology, molecular pharmacology, recombinant DNA technology and other
pharmaceutical processes are expected to continue at a rapid pace in both
industry and academia. There can be no assurance that research and discoveries
by others will not render some or all of the Company's programs or products
noncompetitive or obsolete.
The Company is cognizant of other companies and institutions dedicated to
the development of therapeutics similar to those being developed by the Company,
including Eli Lilly and Company, Hoffman-LaRoche Ltd., Chiron Corporation,
Cubist Pharmaceuticals, Inc., Schering-Plough Corporation, and Abbott
Laboratories. Many of the Company's existing or potential competitors have
substantially greater financial and technical resources and therefore may be in
a better position to develop, manufacture, and market biopharmaceutical
products. Many of these competitors are also more experienced with regard to
pre-clinical testing, human clinical trials and obtaining regulatory approvals.
The current or future existence of competitive products may also adversely
affect the marketability of the Company's product candidates.
S-4
THERE IS NO ASSURANCE THAT THE COMPANY WILL RECEIVE FDA APPROVAL FOR ANY OF ITS
PRODUCT CANDIDATES; GOVERNMENT REGULATION MAY IMPEDE, DELAY OR PREVENT THE
COMMERCIALIZATION OF THE COMPANY'S PRODUCT CANDIDATES.
All new drugs and biologics, including the Company's product candidates,
are subject to extensive and rigorous regulation by the federal government,
principally the FDA under the Federal Food, Drug and Cosmetic Act and other laws
including, in the case of biologics, the Public Health Services Act, and by
state, local and foreign governments. Such regulations govern, among other
things, the development, testing, manufacture, labeling, storage, pre-market
clearance or approval, advertising, promotion, sale and distribution of such
product candidates. If drug products are marketed abroad, they are subject to
extensive regulation by foreign governments. Failure to comply with applicable
regulatory requirements may subject the Company to administrative or judicially
imposed sanctions such as civil penalties, criminal prosecution, injunctions,
product seizure or detention, product recalls, total or partial suspension of
production, and FDA refusal to approve pending applications.
THE COMPANY HAS NOT RECEIVED REGULATORY APPROVAL IN THE UNITED STATES OR ANY
FOREIGN JURISDICTION FOR THE COMMERCIAL SALE OF ANY OF ITS PRODUCT CANDIDATES.
The process of obtaining FDA and other required regulatory approvals,
including foreign approvals, often takes many years and varies substantially
based upon the type, complexity and novelty of the products involved and the
indications being studied. Furthermore, such approval process is extremely
expensive and uncertain. There can be no assurance that the Company's product
candidates will be cleared for commercial sale by the FDA or regulatory agencies
in foreign countries. The regulatory review process can take many years and the
Company will need to raise additional funds prior to completing such process for
its current and future product candidates. The failure of the Company to receive
FDA approval for its product candidates would preclude the Company from
marketing and selling its products in the United States. Therefore, the failure
to receive FDA approval would have a material adverse effect on the Company.
Even if regulatory approval of a product is granted, there can be no assurance
that the Company will be able to obtain the labeling claims necessary or
desirable for the promotion of such product. FDA regulations prohibit the
marketing or promotion of a drug for unapproved indications. Furthermore,
regulatory marketing approval may entail ongoing requirements for postmarketing
studies if regulatory approval is obtained; the Company will then be subject to
ongoing FDA obligations and continued regulatory review. In particular, the
Company or its third party manufacturers will be required to adhere to
regulations setting forth Good Manufacturing Practices, which require that the
Company or third party manufacturers manufacture products and maintain records
in a prescribed manner with respect to manufacturing, testing and quality
control activities. Further, the Company or its third party manufacturer must
pass a pre-approval inspection of its manufacturing facilities by the FDA before
obtaining marketing approval. Failure to comply with applicable regulatory
requirements may result in penalties such as restrictions on a product's
marketing or withdrawal of the product from the market. In addition,
identification of certain side effects after a drug is on the market or the
occurrence of manufacturing problems could cause subsequent withdrawal of
approval, reformulation of the drug, additional pre-clinical testing or clinical
trials and changes in labeling of the product.
Prior to the submission of an application for FDA approval, drugs developed
by the Company must undergo rigorous pre-clinical and clinical testing which may
take several years and the expenditure of substantial resources. Before
commencing clinical trials in humans, the Company must submit to the FDA and
receive clearance of an Investigational New Drug ("IND"). There can be no
assurance that submission of an IND for future clinical testing of any product
under development or other future products of the Company would result in FDA
permission to commence clinical trials or that the Company will be able to
obtain the necessary approvals for future clinical testing in any foreign
jurisdiction. Further, there can be no assurance that if such testing of
products under development is completed, any such drug compounds will be
accepted for formal review by the FDA or any foreign regulatory body, or
approved by the FDA for marketing in the United States or by any such foreign
regulatory bodies for marketing in foreign jurisdictions. Future federal, state,
local or foreign legislation or administrative acts could also prevent or delay
regulatory approval of the Company's product candidates.
Prior to the submission of an application for FDA approval, biologics
developed by the Company or its joint venture, NextEra, must undergo rigorous
pre-clinical and clinical testing which may take several years and the
expenditure of substantial resources. Before commencing clinical trials in
humans in the United States, the Company must submit to the FDA and receive
clearance of an IND. If clinical trials of a new product are completed
successfully, then the Company may seek FDA marketing approval. If the product
is regulated as a biologic, the FDA will require the submission and approval of
S-5
both a Product License Application ("PLA") and an Establishment License
Application before commercial marketing can commence. The PLA must include
detailed information about the biologic and its manufacture and the results of
product development, pre-clinical studies and clinical trials. PLA's submitted
to the FDA can take, on average, two to five years to receive approval. The FDA
may ultimately decide that the PLA does not satisfy its regulatory criteria for
approval and deny approval or require additional clinical studies. Future
federal, state, local or foreign legislation or administrative acts could also
prevent or delay regulatory approval of the Company's biologic candidates.
THERE IS UNCERTAINTY REGARDING THE AVAILABILITY OF HEALTH CARE REIMBURSEMENT FOR
PURCHASERS OF THE COMPANY'S ANTICIPATED PRODUCTS; HEALTH CARE REFORM MAY
NEGATIVELY IMPACT THE ABILITY OF PROSPECTIVE PURCHASERS OF POTENTIAL COMPANY
PRODUCTS TO PAY FOR THE PRODUCTS.
The Company's ability to commercialize any of its product candidates will
depend in part on the extent to which reimbursement for the costs of the
resulting drug will be available from government health administration
authorities, private health insurers and others. Significant uncertainty exists
as to the reimbursement status of newly approved health care products. There can
be no assurance of the availability of third-party insurance reimbursement
coverage enabling the Company to establish and maintain price levels sufficient
for realization of a profit on its investment in developing pharmaceuticals and
biological products. Government and other third-party payers are increasingly
attempting to contain health care costs by limiting both coverage and the level
of reimbursement for new drug products approved for marketing by the FDA and by
refusing, in some cases, to provide any coverage for uses of approved products
for disease indications for which the FDA has not granted marketing approval. If
adequate coverage and reimbursement levels are not provided by government and
third-party payers for uses of the Company's products, the market acceptance of
these products would be adversely affected.
Health care reform proposals have previously been introduced in Congress
and in various state legislatures and there is no guarantee that such proposals
will not be introduced in the future. The Company cannot predict when any
proposed reforms will be implemented, if ever, or the effect of any implemented
reforms on the Company's business. There can be no assurance that any
implemented reforms will not have a material adverse effect on the Company. Such
reforms, if enacted, may affect the availability of third-party reimbursement
for products developed by the Company as well as the price levels at which the
Company is able to sell such products. In addition, if the Company is able to
commercialize products in overseas markets, then the Company's ability to
achieve success in such markets may depend, in part, on the health care
financing and reimbursement policies of such countries.
CONFIDENTIALITY AGREEMENTS MAY NOT ADEQUATELY PROTECT THE COMPANY'S INTELLECTUAL
PROPERTY.
The Company requires its employees and consultants to execute
confidentiality agreements upon the commencement of their relationship with the
Company. The agreements generally provide that trade secrets and all inventions
conceived by the individual and all confidential information developed or made
known to the individual during the term of the relationship shall be the
exclusive property of the Company and shall be kept confidential and not
disclosed to third parties except in specified circumstances. There can be no
assurance, however, that these agreements will provide meaningful protection for
the Company's proprietary information in the event of unauthorized use or
disclosure of such information.
THERE IS A RISK OF PRODUCT LIABILITY, AND UNCERTAINTY REGARDING THE AVAILABILITY
OF PRODUCT LIABILITY INSURANCE ON ACCEPTABLE TERMS.
The Company's business exposes it to substantial product liability risks.
The Company plans to obtain product liability insurance covering the sale of its
products prior to their commercial introduction; however, there can be no
assurance that the Company will be able to obtain or maintain such insurance on
acceptable terms or that any insurance obtained will provide adequate coverage
against potential liabilities. Claims or losses in excess of any liability
insurance coverage now carried or subsequently obtained by the Company could
have a material adverse effect on the Company.
DISCLOSURE REGARDING POTENTIAL FUTURE ACQUISITIONS OR BUSINESS COMBINATIONS.
Although the Company has no current intentions to acquire other businesses
or merge with or into other entities, the trend toward consolidating business
operations, seeking economies of scale, diversifying product offerings and
S-6
pursuing operating synergies is one that currently characterizes many
industries, and the biopharmaceutical industry is no exception. If the Company
decides to focus on these benefits, then it may decide to pursue an acquisition
of another entity or some other form of business combination. If the Company
does decide to pursue a transaction of this type, except as otherwise required
by law, rules or regulations, the Company currently does not intend to provide
stockholders with information concerning an acquisition or merger candidate and
its business prior to consummation of the transaction. In addition, because the
Company has a very large number of authorized but unissued shares of capital
stock, the Company may decide to use shares of its capital stock to acquire
other businesses. Unless otherwise required by the rules and regulations
governing the NASDAQ National Market System, or the Delaware General Corporation
Law (the "Delaware Law"), the Company may use shares of its capital stock to
acquire businesses without stockholder approval.
POTENTIAL ADVERSE EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE.
Sales of our common stock (including shares issued upon the exercise of
outstanding options and warrants at exercise prices substantially below the
closing bid price) in the public market could materially and adversely affect
the market price of our shares. Such sales also might make it more difficult for
the Company to sell equity securities or equity-related securities in the future
at a time and price that the Company deems appropriate.
As of July 16, 2001, the Company had 6,005,371 shares of common stock
outstanding (not including 423,850 shares of common stock reserved for exercise
of outstanding options and 1,425,000 shares of common stock reserved for
exercise of outstanding warrants held by certain investors). Of the shares
outstanding, 2,839,174 shares of common stock are freely tradable without
restriction. All of the remaining 3,166,197 shares are restricted from resale
except pursuant to certain exceptions under the Securities Act of 1933, as
amended.
POTENTIAL ADVERSE EFFECT OF OUTSTANDING COMMON STOCK OPTIONS AND WARRANTS.
The Company has outstanding options and warrants for the purchase of shares
of its common stock which may adversely affect the Company's ability to
consummate future equity financings. Further, the holders of such warrants and
options may exercise them at a time when the Company would otherwise be able to
obtain additional equity capital on terms more favorable to the Company. To the
extent any such options and warrants are exercised, the outstanding shares of
the Company's stock will be diluted.
OUR COMMON STOCK MAY BE DELISTED FROM THE NASDAQ MARKET.
If the market capitalization of our common stock falls below $50,000,000
for 10 consecutive trading days, we may be notified by NASDAQ that if either the
market capitalization does not rise above $50,000,000 for 10 consecutive trading
days within 30 days from such notice or if we fail to meet NASDAQ's net asset
requirements, our stock may be delisted from the NASDAQ National Market System.
Delisting of the Company's common stock may result in a reduced market for our
common stock and consequently a reduced liquidity for our stockholders.
THE MARKET PRICE OF THE COMPANY'S COMMON STOCK MAY EXPERIENCE SIGNIFICANT
VOLATILITY.
The securities markets from time to time experience significant price and
volume fluctuations unrelated to the operating performance of particular
companies. In addition, the market prices of the common stock of many publicly
traded pharmaceutical and biotechnology companies have been and can be expected
to be especially volatile. Announcements of technological innovations or new
products by the Company or its competitors, developments or disputes concerning
patents or proprietary rights, publicity regarding actual or potential clinical
trial results relating to products under development by the Company or its
competitors, regulatory developments in both the United States and foreign
countries, delays in the Company's testing and development schedules, public
concern as to the safety of vaccines or biological products and economic and
other external factors, as well as period-to-period fluctuations in the
Company's financial results, may have a significant impact on the market price
of our common stock. The realization of any of the risks described in these
"Risk Factors" may have a significant adverse impact on such market prices.
S-7
THE COMPANY DOES NOT PAY DIVIDENDS.
The Company has never declared or paid dividends on its common stock and
does not intend to pay any dividends in the foreseeable future.
THERE ARE LIMITATIONS ON THE LIABILITY OF THE COMPANY'S DIRECTORS, AND THE
COMPANY MAY HAVE TO INDEMNIFY ITS OFFICERS AND DIRECTORS IN CERTAIN INSTANCES.
The Company's Certificate of Incorporation limits, to the maximum extent
permitted by the Delaware Law, the personal liability of directors for monetary
damages for breach of their fiduciary duties as directors. The Company's Bylaws
provide that the Company shall indemnify its officers and directors and may
indemnify its employees and other agents to the fullest extent permitted by law.
The Company has entered into indemnification agreements with its officers and
directors containing provisions which are in some respects broader than the
specific indemnification provisions contained in the Delaware Law. The
indemnification agreements may require the Company, among other things, to
indemnify such officers and directors against certain liabilities that may arise
by reason of their status or service as directors or officers (other than
liabilities arising from willful misconduct of a culpable nature), to advance
their expenses incurred as a result of any proceeding against them as to which
they could be indemnified, and to obtain directors' and officers' insurance if
available on reasonable terms. Section 145 of the Delaware Law provides that a
corporation may indemnify a director, officer, employee or agent made or
threatened to be made a party to an action by reason of the fact that he was a
director, officer, employee or agent of the corporation or was serving at the
request of the corporation, against expenses actually and reasonably incurred in
connection with such action if he or she acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to 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 Delaware Law
does not permit a corporation to eliminate a director's duty of care, and the
provisions of the Company's Certificate of Incorporation have no effect on the
availability of equitable remedies, such as injunction or rescission, for a
director's breach of the duty of care.
THE COMPANY'S JOINT VENTURE PARTNER AND NEXTERA HAVE BROUGHT SUIT AGAINST THE
COMPANY.
The Company's biological program, operated through NextEra Therapeutics, Inc.
("NextEra"), stalled in April 2000 when the Company's joint venture partner
Franklin Research Group ("Franklin") filed a complaint against the Company in
United States District Court for the Southern District of Ohio, Eastern Division
in connection with the Funding and Research Agreement between Franklin, Immtech
and NextEra. On March 23, 2001, Franklin voluntarily dismissed that action and
filed a new complaint in the Court of Common Pleas, Franklin County, Ohio in
which NextEra joined as a plaintiff with Franklin. In May 2001, Franklin and
NextEra voluntarily dismissed the state action and entered into negotiations
with the Company to determine if the joint venture can be managed and funded
going forward. Further clinical trials at a major cancer center to study
effectiveness of rmCRP will begin if the Company and Franklin can reach an
agreement and secure additional funding for NextEra. The Company is not certain
about the future of NextEra nor the potential for renewed litigation.
NEXTERA HAS A NEED FOR SUBSTANTIAL ADDITIONAL FUNDS.
NextEra has incurred accumulated losses of approximately $2,076,000 since
inception (July 8, 1998) through March 31, 2001. NextEra is expected to continue
to incur significant losses during the next several years. In addition, as of
March 31, 2001, NextEra's current liabilities exceeded its current assets by
approximately $1,612,000 and NextEra had a stockholders' deficiency of
approximately $1,590,000. NextEra's ability to continue as a going concern is
dependent upon its ability to generate sufficient funds to meet its obligations
as they become due and, ultimately, to obtain profitable operations. NextEra's
financial plans for the forthcoming year include efforts to obtain additional
equity financing, as NextEra needs to raise substantial additional funds.
S-8
WHERE YOU CAN FIND MORE INFORMATION
We file annual and quarterly reports, proxy statements and other
information required by the Securities Exchange Act of 1934, as amended (the
"Exchange Act") with the Securities and Exchange Commission (the "SEC"). You may
inspect and copy any document the Company files with the SEC at the SEC's public
reference rooms located at 450 Fifth Street, N.W., Washington, D.C. 20549, at
Seven World Trade Center, 13th Floor, New York, New York 10048 and at Northwest
Atrium Center, 5000 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. The Company's SEC filings are also available to the
public from the SEC's web site at http://www.sec.gov.
The Company has filed with the SEC a registration statement on Form S-3
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Shares. This Prospectus, which
constitutes a part of that Registration Statement, does not contain all the
information contained in that Registration Statement and its exhibits. For
further information with respect to the Company and the Shares, you should
consult the Registration Statement and its exhibits. Statements contained in
this Prospectus concerning the provisions of any documents are necessarily
summaries of those documents, and each statement is qualified in its entirety by
reference to the copy of the document filed with the SEC. The Registration
Statement and any of its amendments, including exhibits filed as a part of the
Registration Statement or an amendment to the Registration Statement, are
available for inspection and copying through the SEC's public reference rooms
listed above.
The SEC allows the Company to "incorporate by reference" in this Prospectus
the information that we file with the SEC. This means we can disclose important
information to you by referring you to other information we have filed with the
SEC. The information we incorporate by reference is considered to be part of
this Prospectus, and information we later file with the SEC will automatically
update and supersede the information in this Prospectus.
The following documents filed by us with the SEC pursuant to Section 13 of
the Exchange Act (File No. 000-25669) and any future filings under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act made before the termination of the
offering are incorporated by reference:
(i) our Annual Report on Form 10-KSB/A (Amendment No. 1) for the fiscal
year ended March 31, 2001;
(ii) all other reports filed by us pursuant to Section 13(a) or 15(d) of
the Exchange Act since March 31, 2001; and
(iii) The description of the common stock contained in our registration
statement filed under Section 12 of the Exchange Act, including any
amendments or reports filed for the purpose of updating such
description.
Any statement incorporated or deemed incorporated herein by reference shall
be deemed to be modified or superseded for the purpose of this Registration
Statement to the extent that a statement contained herein or in any subsequently
filed document modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
The Company will provide to you without charge a copy of any or all
documents incorporated by reference into this Prospectus except the exhibits to
such documents, unless such exhibits are specifically incorporated by reference
in such documents. Exhibits not incorporated by reference may not be available.
You may request a copy of these filings, at no cost, by contacting the
Company at:
Immtech International, Inc.
150 Fairway Drive, Suite 150
Vernon Hills, Illinois 60061
Attention: Mr. Gary C. Parks
Telephone No.: (847) 573-0033
S-9
CERTAIN INFORMATION
Unless otherwise stated in this prospectus:
o the "Company," "we" and "us" refer to Immtech International, Inc.;
o "Immtech" refers to Immtech International, Inc.;
o "common stock" refers to the common stock, par value $0.01 per share,
of Immtech.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Prospectus and in the documents
incorporated by reference herein, including, without limitation, statements
containing the words "believe," "anticipate," "expect" and words of similar
import, constitute "forward-looking statements" within the meaning of Section
27A of the Securities Act, and Section 21E of the Exchange Act of 1934, as
amended. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company, or industry results, to be materially different
from any results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the following:
(i) the Company's history of operating losses, (ii) the Company's need for
substantial additional funds, (iii) the Company's ability to access the capital
markets and/or to secure private sources of funding, (iv) the availability of
grant money, (v) the length of time until any of the Company's product
candidates may be available for sale, (vi) the uncertainties involved in
clinical trials being performed on the product candidates the Company is
developing, (vii) the Company's dependence on third party relationships for the
manufacture of product candidates and the performance of clinical trials with
regard to its product candidates, (viii) the intense competition and rapid
technological changes in the Company's industry, (ix) the extensive and rigorous
federal and foreign regulations of the Company's testing, manufacturing and sale
of its product candidates, (x) the Company's dependence on key personnel and
contributions from scientists, researchers and technicians from
Consortium-member universities, (xi) the Company's ability to protect its
technology, patents and proprietary information on which its business relies,
(xii) the disposition of certain legal actions, and (xiii) other factors
referenced in this Prospectus. Given these uncertainties, readers of this
Prospectus and investors are cautioned not to place undue reliance on such
forward-looking statements. The Company disclaims any obligation to update any
such factors or to publicly announce the result of any revisions to any of the
forward-looking statements contained herein to reflect future events or
developments.
S-10
THE COMPANY
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE INFORMATION PROVIDED
UNDER "RISK FACTORS." A GLOSSARY BEGINS ON PAGE S-16 WHICH DEFINES VARIOUS TERMS
USED IN THIS PROSPECTUS.
Immtech International, Inc. (the "Company" or "Immtech") is a
biopharmaceutical company focused on the discovery, development, and
commercialization of drugs for the treatment of: (i) fungal, parasitic,
bacterial and viral diseases such as tuberculosis, hepatitis, pneumonia,
diarrhea and AIDS, and (ii) cancer, through both the Company's primary
discipline, its pharmaceutical program and, operated by a joint venture company,
NextEra Therapeutics, Inc. ("NextEra"), its biological program. Since its
formation in October 1984, the Company has engaged in developing research
programs, recruiting scientific advisors and scientists, negotiating and
consummating technology licensing agreements, and engaging in and sponsoring
drug research and development activities. The Company uses the expertise and
resources of strategic partners and third parties in a number of areas,
including: (i) laboratory research, (ii) pre-clinical and human clinical trials,
and (iii) the manufacture of pharmaceutical and therapeutic compounds and
products (pharmaceuticals are typically synthetic chemicals and therapeutics are
typically naturally occurring proteins). The Company holds worldwide patents,
licenses and rights to license worldwide patents and patent applications from
third parties that are integral to the Company's business. The Company currently
does not have any commercially available products nor does it expect to have any
commercially available products for several years, if at all.
The pharmaceutical program is based on technology for developing a class of
compounds known as dications. The dication technology is the result of a
research program designed to understand how dications bind to the
deoxyribonucleic acid ("DNA") of infectious micro-organisms. The dication
platform was developed by scientists at The University of North Carolina at
Chapel Hill ("UNC"), Duke University ("Duke"), Auburn University ("Auburn") and
Georgia State University ("Georgia State") (collectively, the "Consortium"). The
Company entered into an agreement with the Consortium, dated January 15, 1997,
to commercialize product candidates resulting from the Consortium's research,
including the dication technology (the "Consortium Agreement").
Structurally, dications are chemical molecules which have two positively
charged ends that are held together by a chemical linker. The composition of the
dications, with positive charges on both ends (shaped like molecular barbells)
allows dications to bind (similar to a bandaid) to the negatively charged active
sites (sites where enzymes interact with DNA) in certain areas of an infectious
micro-organism's DNA. The bound dications prevent enzymes necessary to the life
of the micro-organism from attaching to certain of its DNA's active sites.
Research has shown that once a site is occupied by a dication, enzymes necessary
to the life of the infectious micro-organism are blocked and the organism dies.
The Company's biological program, operated through NextEra in a joint
venture with the Franklin Research Group ("Franklin"), concentrates on
developing products for treating cancer and AIDS. The biological program is
focused on the development of a synthetic protein to replace a protein called
modified C-reactive protein ("mCRP"), naturally found in human tissues. The
Company's research, prior to the formation of NextEra, and NextEra's subsequent
research, has shown that mCRP is noticeably absent, or present at severely
reduced levels, in the tissue of patients with cancer or AIDS. Laboratory tests,
in both animal studies and human clinical trials, showed that the recombinant
(synthetically made) mCRP ("rmCRP") caused the subjects to produce cells which
were able to combat cancer and infectious diseases associated with AIDS.
This NextEra program was delayed in April 2000 when our joint venture
partner, Franklin, filed suit against the Company. The parties entered a
Stipulation of Dismissal in May 2001 which resulted in a withdrawal of the suit,
however, Franklin reserved the right to refile the suit should negotiations fail
to settle the dispute. NextEra's research and development of its product
candidates continue, but at a slowed pace while the Company and Franklin
negotiate a settlement to the litigation and NextEra seeks additional funding.
S-11
STRATEGY
The Company's strategy is to develop drugs effective against infectious
diseases and cancer by utilizing the dicationic platform technology developed by
Consortium scientists. Our plan is to commercialize dications first in niche
markets by taking advantage of fast-track FDA approvals permitted in those
areas. The Company believes that its first products will demonstrate the power
and versatility of the dication platform technology. Then, the Company will work
on developing treatments for infectious diseases which afflict large populations
of people.
The Company intends to continue to cooperate with and oversee the results
of independent research and to use business-sponsored research programs, joint
ventures and other forms of collaborative programs for product development,
manufacturing and marketing. The Company considers its current collaborative
relationships significant to the successful development of its business and
believes that it will enter into additional arrangements in the future to
develop, manufacture and market not only the product candidates on which it is
currently focusing, but also those dications which the Consortium members are
developing for future commercialization.
NextEra's strategy is to commercialize its biological product candidates as
a primary therapy against cancer and as a treatment in combination with
chemotherapy in treating cancer, AIDS and other diseases which affect
immune-suppressed patients.
PRODUCT CANDIDATES
The information below is a summary of our product candidates.
Pharmaceutical Products - Dications
-----------------------------------
The platform technology, the result of the Consortium's research programs,
is focused on understanding how dications bind to the DNA of infectious
micro-organisms. Certain exclusive rights to the platform technology (and the
dications created with such technology) have been granted to the Company to
develop and commercialize dications through the Consortium Agreement. When
dications bind to the DNA, a key enzyme is blocked from attaching and the
infectious organism is killed. The methodology used by the Consortium
researchers to develop dications evolved into the Consortium's platform
technology for designing dications to treat infectious diseases. The Consortium
is using this platform technology to design new treatments for a range of
infectious diseases, including protozoan, fungal, bacterial and viral
infections.
In May 2001, the Company completed a safety trial of the dication DB289 in
human volunteers. The Company has recently completed a multi-dose human clinical
trial of DB289. In this trial, DB289 was shown to be safe to humans at dosage
levels expected to be effective against disease. DB289 is designed to be
delivered orally to patients without toxic side effects. Since DB289 can be
given orally, the Company anticipates that it will be self-administered, thus
making it practical to deliver and substantially less expensive than competitive
products.
Another dication we have ready for human trials is DB075. The Consortium
believes DB075 may be a successful treatment for Cryptosporidiosis, one of the
most common infections of the intestinal tract resulting from a parasite,
Cryptosporidium parvum, that causes diarrhea and wasting in immune suppressed
patients. Currently, no drug is available in the market to treat
Cryptosporidiosis. DB075 is designed to block a key enzyme from binding to the
parasite's DNA, thereby killing the organism.
DB075 works directly in the digestive tract with limited absorption across
the digestive membranes into the bloodstream. The reduced absorption
substantially reduces the possibility of side effects. The Company specifically
targeted a treatment for Cryptosporidiosis because the Company believes that the
FDA will follow a "fast-track" approval process because currently no drug exists
to treat this disease. The FDA may allow a fast-track approval process for drugs
which are designed to treat diseases for which no treatment exists.
The Company believes DB289 and DB075 are suited to demonstrate the power
and versatility of the dicationic technology platform and the effectiveness of
the dicationic oral drug delivery technology.
S-12
Other Pharmaceutical Programs
-----------------------------
Immtech's other pharmaceutical research programs include antifungal,
Mycobacterium Tuberculosis ("TB"), hepatitis, Trypanosomiasis, Leishmaniasis and
cancer programs. Immtech's antifungal program focuses on developing a new orally
delivered dication with effectiveness against the three most common strains of
fungi, which are Candida, Asperigillus, and Cryptococcus. During the previous 12
months, Immtech, through the Consortium, screened a series of new compounds for
effectiveness against the three strains of fungi and the Consortium researchers
identified several new dicationic compounds that showed promising results.
In the TB program, the National Institutes of Health ("NIH") researchers
have also been evaluating the Consortium's dications for effectiveness against
TB, having screened over 500 of the Consortium's dications. The NIH screening
test has identified approximately 10 to 15 dications with activity comparable,
or superior, in performance to drugs currently available for the treatment of
TB.
Additionally, Dr. Scott G. Franzblau of the University of Illinois-Chicago
("UIC"), a recognized expert in TB research, has joined with the Consortium to
test dications for effectiveness against TB. The Company will assist Dr.
Franzblau to obtain new grants and has given a grant of approximately $74,000 to
the University of Illinois-Chicago to fund Dr. Franzblau's studies. UIC will
screen dications sent by the Georgia State and UNC combinatorial chemistry
laboratories in the UIC TB tests. The dication that shows the greatest potential
for effectiveness against TB will be sent to UNC for further testing in animal
studies. The Company expects to continue monitoring the testing of dications and
intends to identify within the next 18 to 24 months a lead dication potent
against TB and safe to the patient as an orally administered drug candidate.
In the hepatitis program, scientists at Auburn University ("Auburn") have
developed a patented laboratory screening test using the bovine viral diarrhea
virus ("BVDV") as a substitute for the hepatitis C virus ("HCV") to gauge the
potential for effectiveness of dications against HCV. The Auburn scientists have
advanced the dicationic candidates believed to have the greatest potential for
effectiveness into a special animal (mouse) model that develops a chronic viral
infection of BVDV. The results of this animal model is expected to help the
researchers determine which dications will be further studied or advanced into
primate tests. Immtech is also working with two large pharmaceutical companies
with expertise in HCV testing. These companies are screening the most active
dications in their internal proprietary screening tests to assess the viability
of joint ventures with Immtech.
In the Trypanosomiasis (African sleeping sickness) program (part of a
clinical research subcontract between the Company and UNC ("Clinical Research
Agreement") funded by $9.8 million of a $15.1 million grant to UNC from the Bill
& Melinda Gates Foundation (the "Gates Foundation"), compound DB289 has shown to
be safe in human Phase I trials. DB289 has demonstrated improved safety and
effectiveness when compared to existing treatments in animal models.
In the Leishmaniasis program, also part of the Gates Foundation grant, the
Company is working with The London School of Hygiene and Tropical Medicine in
England ("The London School"), Ohio State University ("OSU"), UNC and Georgia
State to develop a drug to treat Leishmaniasis. The U.S. military supported
initial work of the Leishmaniasis program with a grant of approximately $80,000
to Georgia State to develop dications that were screened in the military's
laboratory for potential for effectiveness. The London School and OSU have
sub-contracted with the Consortium to screen the drug candidates supplied by
Georgia State and UNC. The London School researchers have screened Consortium
dications for effectiveness in animal tests and have identified dications that
show promising preliminary test results. The identified dications have shown
potential for effectiveness equivalent to or better than drugs currently used to
treat Leishmaniasis. Immtech is responsible (under the Clinical Research
Agreement with UNC in connection with the Gates Foundation grant) for the
pre-clinical development of a new drug resulting from the Consortium research
for treatments of Leishmaniasis.
In the cancer program, the National Cancer Institute (the "NCI") has tested
over 550 of the Consortium's dications for anti-cancer activity, reporting that
a significant number of the dications tested have either retarded or killed
cancer cells. The NCI has identified 47 of the Consortium's dications as
displaying specificity (effectiveness against specific cancer types) and potency
as anti-cancer agents. Eighteen have been identified by the NCI to advance to
animal (mouse) model testing. Early test results show that specific dications
may be effective against different cancer types and that most of the dications
tested had some effectiveness even at low doses. While the Consortium's
dications have shown effectiveness against cancer, this research is at an early
S-13
stage and the treatment of cancer is a highly specialized endeavor that is
outside the scope of the Company's current expertise. The Company intends to
seek partners to jointly develop and commercialize the dications in its cancer
program.
Biological Products
-------------------
The Company's biological program is operated through the joint venture
company NextEra, formed in July 1998 by the Company, Franklin Research Group
("Franklin") and Dr. Larry Potempa, NextEra's Chief Science Officer. This
program focuses on strengthening the body's natural immune system by (i)
improving the structural environment around cells, and (ii) reprogramming cancer
cells to act normally. The Company entered into an agreement in 1998 with
Franklin to obtain funding for NextEra to accelerate the biological program for
the treatment of cancer and related diseases.
Company researchers have discovered that, as part of the immune system's
response to disease, the blood protein C-reactive protein "CRP" is modified by
the body to form modified CRP ("mCRP"). Modified CRP strengthens tissues and
their interconnective structures that work to increase the body's ability to
resist disease and improve the effectiveness of the immune system. mCRP is found
naturally in healthy tissues surrounding blood vessels, in the tissues in
lymphatic organs, and in cells that secrete proteins or other cell products. In
contrast, mCRP is absent (or present in greatly reduced amounts) in cancerous
tissues found in the lung, breast or prostate.
The Company's scientists have discovered that when cancerous cells come in
contact with mCRP, cell behavior is markedly changed, abnormal rapid growth
ceases and the cell returns to normal activity. NextEra's biological program
focuses on replacing mCRP in areas where mCRP is deficient, thereby increasing
barriers between cells to reduce the entry and propagation of diseases and
enhancing immune reactions.
In 1996, Immtech conducted a Phase I human clinical trial to evaluate the
safety of its rmCRP product candidate in volunteers who were infected with HIV.
The results showed that the drug was safe to administer and duplicated the
results seen in animal pre-clinical tests. Subsequently, the Company contributed
its rmCRP program to NextEra as part of the joint venture with Franklin. NextEra
has signed a contract with a third party manufacturing company to produce rmCRP
for human clinical trials in cancer patients.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby.
SELLING STOCKHOLDERS
The Selling Stockholders listed below acquired Shares of the Company on
December 8, 2000 or have the right to acquire Shares upon the exercise of
warrants issued to them by the Company on March 15, 2001.
On December 8, 2000 the Selling Stockholders purchased 584,250 of the
Shares for approximately $4,674,000. The Company agreed to use reasonable
efforts to register the resale of such Shares by the Selling Stockholders within
45 days of the closing date and to keep such registration effective for the
lesser of six months or until all Shares are sold.
On March 15, 2001 the Company issued a warrant to The Kriegsman Group to
purchase 250,000 of the Shares and provided The Kriegsman Group with a right to
demand the Company to use its reasonable good faith efforts to register such
Shares and to keep such registration effective until March 15, 2006. The
Kriegsman Group made such demand of the Company.
The following table sets forth for each Selling Stockholder the number of
Shares of Common Stock being registered in this Prospectus. Because the Selling
Stockholders may offer all, some or none of their Shares, the Company cannot
provide a definitive estimate of the number of Shares they will hold after such
registration. Other than The Kriegsman Group, none of the Selling Stockholders
are or were directors or officers of, or have or have had any material
relationship with, the Company, any of its predecessors, or any of its
affiliates over the past three years. The Company is obligated to pay The
Kriegsman Group, pursuant to a financial consulting and services contract,
$20,000 per month through March 14, 2002, unless such contract is terminated
earlier. No termination may be effective
S-14
prior to September 14, 2001. Upon the occurrence of certain events, however, the
minimum term of such contract shall be extended from September 14, 2001, to
March 14, 2002. In addition, the Company may be obligated to pay certain other
fees to The Kriegsman Group if the Company were to engage in certain
transactions during the 18 months following the expiration or termination of
such contract. This Prospectus is filed at the Company's expense.
SHARES BENEFICIALLY OWNED
IMMEDIATELY PRIOR TO THE
NAME OFFERING NUMBER OF SHARES REGISTERED
------------------------------------------------------- ------------------------- ---------------------------
China Dragon Limited 290,000 290,000
The Kriegsman Group * 250,000 250,000
Vivienne Lee 90,600 51,000
Michael L. Keiser & Rosalind C. Keiser Charitable Trust 25,000 25,000
Frederick W. Wackerle 40,000 25,000
Rick Kash 59,233 20,000
Lau Ching Yin Judy /Chan Chee Wing 159,810 20,000
Chan Tak Chi William 31,000 20,000
Bernard K. Chiu 66,900 20,000
Jerome A. Grossman 12,500 12,500
Falcone Ltd. Partnership 12,500 12,500
Peter F. Drake 12,500 12,500
Kevin Bowen 12,000 12,000
Happy Results Limited 104,900 10,000
John M. Kelly 11,450 10,000
Cheung Shuk Kwan 10,000 10,000
Stephen D. Chubb 6,250 6,250
Robert H. Lessin Venture Capital, LLC 6,250 6,250
Robert D. Scallan 6,250 6,250
Dr. Levi Hong Kaye Lee 10,500 4,000
Cheng Ching Jung 4,000 4,000
Lau Chu 2,000 2,000
Cheung Yuk Chor Dickie 2,000 2,000
Lee Shun Lung 1,000 1,000
Chan Kin Man 1,000 1,000
Clarence E. McFeely 1,000 1,000
========= =======
Total: 1,228,643 834,250
* 150,000 shares underlying the warrants are subject to certain vesting
conditions and may never vest.
PLAN OF DISTRIBUTION
We will not receive any proceeds from the sale of the Shares offered
hereby.
We are registering the Shares on behalf of the Selling Stockholders. The
Shares covered by this Prospectus may be offered and sold, from time to time, by
the Selling Stockholders, or by purchasers, pledgees, donees, transferees or
other successors in interest pursuant to this Prospectus (a) in transactions
(including one or more block transactions) on the NASDAQ National Market System;
(b) in the public market of the NASDAQ National Market System; (c) in privately
negotiated transactions, (d) through put or call option transactions relating to
the common stock, through short sales of the common stock, or (e) in a
combination of such transactions. Each sale may be made either at the market
price prevailing at the time of sale or at a negotiated price. Those
transactions may be made through brokers or dealers, which may act as agents or
principals and such brokers or dealers may receive compensation in the form of
commissions, concessions or discounts from the Selling Stockholders and/or the
purchasers of the common stock for whom such broker-dealers may act as agents or
to whom they sell as principal, or both not exceeding those customary in similar
transactions.
S-15
To the Company's knowledge, the Selling Stockholders have not entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the Shares, nor is there an underwriter or
coordinating broker acting in connection with the proposed sales of Shares by
the Selling Stockholders. Any shares covered by this prospectus that qualify for
sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144
rather than pursuant to this Prospectus. The Company will pay all costs and
expenses incurred in connection with the registration of the Shares offered by
this Prospectus. Any brokerage commissions and similar selling expenses
attributable to the sale of Shares will be borne by the Selling Stockholders.
The Selling Stockholders, dealers acting in connection with the offering
and brokers executing sell orders on behalf of one more Selling Stockholder may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933.
In addition, any such broker or dealer may be required to deliver a copy of this
prospectus to any person who purchases any of the Shares from or through such
broker or dealer.
The Company has agreed to indemnify the Selling Stockholders and the
Selling Stockholders' respective officers, directors, employees and agents, and
each person who controls such Selling Stockholders, in certain circumstances
against certain liabilities, including liabilities arising under the Securities
Act, and the Selling Stockholders have agreed to indemnify Immtech and its
directors and officers in certain circumstances against certain liabilities,
including liabilities arising under the Securities Act, in each case in
connection with their offering.
LEGAL MATTERS
Legal matters in connection with the validity of the common stock offered
hereby will be passed upon for the Company by Cadwalader, Wickersham & Taft, New
York, New York.
EXPERTS
The financial statements incorporated in this prospectus by reference from
the Company's Annual Report on Form 10-KSB/A (Amendment No. 1) for the year
ended March 31, 2001 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report (which report expresses an unqualified
opinion and includes an explanatory paragraph regarding substantial doubt about
the Company's ability to continue as a going concern), which is incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
GLOSSARY
As used in this Prospectus, the following terms have the meanings set forth
below.
AIDS Acquired immune deficiency syndrome.
Cryptosporidiosis A disease caused by a parasite, Cryptosporidium
parvum, that is commonly found in the
intestinal tract of mammals that, in immune
suppressed individuals, can cause a chronic,
profuse, watery diarrhea accompanied by fever,
marked weight loss, and enlarged lymph nodes.
DB075 The designation given to a dication which is
being studied for use as a drug for treatment
of Cryptosporidiosis.
DB289 The designation given to the Company's lead
dication.
Dication A chemical molecule with two positively charged
ends that are held together by a chemical
linker. Dications bind to the DNA of infectious
organisms.
DNA A type of molecule made up of polymerized
deoxyribonucleotides linked together by
phosphate bonds.
FDA U.S. Food and Drug Administration.
S-16
IND Investigational New Drug Application - a
document required to be filed with the FDA
prior to performing clinical studies on human
subjects in the United States.
Leishmaniasis An infection caused by a protozoal parasite
that affects the skin and abdominal organisms,
causing ulcers or skin disorders that resemble
leprosy.
Phase I Clinical testing in which the safety and
pharmacological profile of a new drug is
established in humans.
Phase II Clinical testing in which the effectiveness of
a new drug is established in humans. This
includes establishing the dose amount and
frequency required to achieve a therapeutic
effect, the metabolic rate of the administered
drug, and the toxicity profile in specific
patient populations.
Phase III Clinical testing in which the effectiveness and
safety of a new drug is tested over a large
group of subjects of different ethnic and
geographic backgrounds. Particular attention is
paid to effects the drug might have on groups
that share various traits.
TB A disease caused by bacteria, Mycobacterium
tuberculosis, that is transmitted by breathing
in, or eating infected droplets, usually
affecting the lungs, although infection of
other organ systems can occur.
Trypanosomiasis An infection caused by a protozoal parasite and
transmitted usually by insect bites. Also known
as African Sleeping Sickness.
S-17
================================================
IMMTECH INTERNATIONAL,
INC.
834,250 SHARES
COMMON STOCK
------------------------------------------------
PROSPECTUS
------------------------------------------------
JULY 20, 2001
=================================================
S-18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the Company's estimates of the expenses to
be incurred by it in connection with the offering of the shares of common stock
being offered hereby:
SEC Registration Fee: $ 2,252.48
Printing expenses:* $ 7,000.00
Legal fees and expenses:* $ 70,000.00
Accounting fees and expenses:* $ 25,000.00
Miscellaneous expenses:* $ 10,000.00
============
TOTAL: $ 114,252.48
------------------
* Estimated
The Company will pay all costs and expenses incurred in connection with the
registration of the Shares. Any brokerage commissions and similar selling
expenses attributable to the sale of Shares will be borne by the Selling
Stockholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Limitation of Director's Liability
The Bylaws of the Company (the "Bylaws") eliminate the liability of
directors to the fullest extent permissible under Delaware law. Delaware law
permits a corporation to limit the personal liability of a director to the
corporation or its shareholders for monetary damages for breach of certain
fiduciary duties as a director, provided that the director's liability may not
be eliminated or limited for: (a) breaches of the director's duty of loyalty to
the corporation or its shareholders; (b) acts or omissions not in good faith or
involving intentional misconduct or knowing violations of law; (c) the payment
of unlawful dividends or unlawful stock repurchases or redemptions; or (d)
transactions in which the director received an improper personal benefit. A
director's liability may also not be limited for violation of, or otherwise
relieve the corporation or its directors from the necessity of complying with,
federal or state securities laws or affect the availability of non-monetary
remedies such as injunctive relief or rescission.
Indemnification of Officers and Directors
The Company's Bylaws relating to indemnification require that the Company
indemnify its directors and its executive officers to the fullest extent
permitted under Delaware law, provided that the Company may modify the extent of
such indemnification by individual contracts with its directors and executive
officers, and provided further, that the Company will not be required to
indemnify any director or executive officer in connection with a proceeding
initiated by such person, with certain exceptions. Delaware corporate law, the
Company's Bylaws, as well as any indemnity agreements, may also permit
indemnification for liabilities arising under the Securities Act or the Exchange
Act.
The Board of Directors has been advised that, in the opinion of the
Securities and Exchange Commission, indemnification of liabilities arising under
the Securities Act is contrary to public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director or officer of the Company in the
S-19
successful defense of any action, suit or proceeding) is asserted by such
director or officer in connection with the Shares being registered hereby, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act, and such claim for indemnification will be
governed by the final adjudication of such issue.
ITEM 16. EXHIBITS.
See Exhibit Index immediately following the Signature Page.
ITEM 17. UNDERTAKINGS.
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, as amended;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this 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 price may be reflected in the form of prospectus
filed with the Commission under Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 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 this Registration Statement or any
material change to such information in this Registration Statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by us pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934, as amended, that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
Annual Report under Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference into this Registration Statement shall be deemed to be
a new Registration Statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Immtech pursuant to the foregoing provisions, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Immtech of expenses incurred
or paid by a director, officer or controlling person of the Company 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, we will, unless in the opinion of our counsel the question has been
S-20
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by us is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
S-21
SIGNATURES
In accordance with 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 of filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, hereunto
duly authorized, on July 20, 2001.
IMMTECH INTERNATIONAL, INC.
By: /s/T. Stephen Thompson
----------------------------------------------
Name: T. Stephen Thompson
Title: President, Chief Executive Officer
and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints T. Stephen Thompson his true and lawful
attorney-in-fact and agent, 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, and to file the same, with all exhibits thereto, and the 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 or necessary to be done in
and about the premises, 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 any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement was signed by the following persons in the
capacities and on the dates stated.
Signatures Title
By: /s/T. Stephen Thompson President, Chief Executive Officer and Director
--------------------------------------------------- (Principal Executive Officer)
T. Stephen Thompson
/s/Gary C. Parks Chief Financial Officer, Treasurer and Secretary
--------------------------------------------------- (Principal Financial and Accounting Officer)
Gary C. Parks
/s/Byron E. Anderson, Ph.D. Director
---------------------------------------------------
Byron E. Anderson, Ph.D.
/s/Harvey R. Colten, M.D. Director
---------------------------------------------------
Harvey R. Colten, M.D.
/s/Eric L. Sorkin Director
---------------------------------------------------
Eric L. Sorkin
By: /s/T. Stephen Thompson
---------------------------------------------------
T. Stephen Thompson
Attorney-In-Fact
Index to Exhibits
Exhibit Description
------- -----------
4.1(1) Form of Common Stock Certificate
4.2(2) Form of Regulation D Subscription Agreement for December 8, 2000
Private Placement
4.3(2) Form of Regulation S Subscription Agreement for December 8, 2000
Private Placement
4.4(3) Warrant Agreement, dated March 15, 2001, by and between the Company
and The Kriegsman Group
5.1(4) Opinion of Cadwalader, Wickersham & Taft
23.1(4) Consent of Deloitte & Touche LLP
23.2(4) Consent of Cadwalader, Wickersham & Taft (included in Exhibit 5.1)
24.1(4) Powers of Attorney (included on signature page)
(1) Incorporated by reference to Amendment No. 2 to the Company's Registration
Statement on Form SB-2 (Registration Statement No. 333-64393), as filed
with the Securities and Exchange Commission on March 30, 1999.
(2) Incorporated by reference to the Company's Quarterly Report on Form 10-QSB
(File No. 000-25669), as filed with the Securities and Exchange Commission
on February 14, 2001.
(3) Incorporated by reference to the Company's Annual Report on Form 10-KSB/A
(Amendment No. 1), as filed with the Securities and Exchange Commission on
July 6, 2001.
(4) Filed herewith.