As filed with the Securities and Exchange Commission on June 6, 2005
Registration Number 333-123863
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CALLISTO PHARMACEUTICALS, INC.
(Name of Small Business Issuer in its Charter)
Delaware 13-3894575
(State or other jurisdiction (I.R.S. Employer)
of incorporation or organization) Identification No.)
420 Lexington Avenue, Suite 1609
New York, New York 10170
(212) 297-0010
(Address, including zip code, and telephone number,
including area code of registrant's principal
executive offices)
Gary S. Jacob
Chief Executive Officer
Callisto Pharmaceuticals, Inc.
420 Lexington Avenue, Suite 1609
New York, New York 10170
(212) 297-0010
(Name, address, including zip code, and telephone number, including area code
of agent for service)
Copies to:
Jeffrey J. Fessler, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas, 21st Floor
New York, New York 10018
(212) 930-9700
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 to be 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, 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, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATE(S)
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 THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION
8(a) MAY DETERMINE.
2
The information in this prospectus is not complete and may be changed. The
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
SUBJECT TO COMPLETION, DATED JUNE 6, 2005
CALLISTO PHARMACEUTICALS, INC.
1,985,791 Shares of Common Stock
The selling stockholders named in this prospectus are offering to sell up to
1,985,791 shares of common stock of Callisto Pharmaceuticals, Inc. which are
currently issued and outstanding and were previously issued by us to the selling
stockholders in a private placement. We will not receive any proceeds from the
resale of shares of our common stock.
Our common stock currently trades on the American Stock Exchange under the
symbol "KAL." On June 3, 2005, the last reported sale price for our common stock
on the American Stock Exchange was $1.01 per share.
The securities offered in this prospectus involve a high degree of risk. See
"Risk Factors" beginning on page 7 of this prospectus to read about factors you
should consider before buying shares of our common stock.
The selling stockholders are offering these shares of common stock. The selling
stockholders may sell all or a portion of these shares from time to time in
market transactions through any market on which our common stock is then traded,
in negotiated transactions or otherwise, and at prices and on terms that will be
determined by the then prevailing market price or at negotiated prices directly
or through a broker or brokers, who may act as agent or as principal or by a
combination of such methods of sale. The selling stockholders will receive all
proceeds from the sale of the common stock. For additional information on the
methods of sale, you should refer to the section entitled "Plan of
Distribution."
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined whether
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is _____, 2005
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TABLE OF CONTENTS
Page
Where You Can Find More Information......................................... 5
Incorporation of Documents By Reference..................................... 5
Summary..................................................................... 5
Risk Factors................................................................ 7
Forward-Looking Statements.................................................. 18
Use of Proceeds............................................................. 18
Selling Stockholders........................................................ 19
Plan of Distribution........................................................ 20
Legal Matters............................................................... 22
Experts..................................................................... 22
You may only rely on the information contained in this prospectus or that we
have referred you to. We have not authorized anyone to provide you with
different information. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the common stock
offered by this prospectus. This prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any common stock in any circumstances in
which such offer or solicitation is unlawful. Neither the delivery of this
prospectus nor any sale made in connection with this prospectus shall, under any
circumstances, create any implication that there has been no change in our
affairs since the date of this prospectus or that the information contained by
reference to this prospectus is correct as of any time after its date.
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WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement that we filed on Form S-3
with the Securities and Exchange Commission or SEC. This prospectus does not
contain all of the information in the registration statement and the exhibits
and schedules that were filed with the registration statement. You should refer
to the registration statement for additional information about us and the common
stock being offered in this prospectus. Statements made in this prospectus
regarding the contents of any contract, agreement or other document that is
filed as an exhibit to the registration statement or any document incorporated
by reference into the registration statement are not necessarily complete, and
you should review the referenced document itself for a complete understanding of
its terms.
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document that we file at the
SEC's public reference facilities located at 450 Fifth Street, NW, Room 1024,
Washington, DC 20549, and at the SEC's regional offices at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and Woolworth Building, 233 Broadway
New York, New York. Copies of all or any part of the registration statement may
be obtained from the SEC upon payment of the prescribed fee. Information
regarding the operation of the public reference rooms may be obtained by calling
the SEC at 1-800-SEC-0330. Our SEC filings are also available to you free of
charge at the SEC's web site at http://www.sec.gov.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to 'incorporate by reference' the information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
that we incorporate by reference is considered to be part of this prospectus.
Because we are incorporating by reference our future filings with the SEC, this
prospectus is continually updated and those future filings may modify or
supersede some or all of the information included or incorporated in this
prospectus. This means that you must look at all of the SEC filings that we
incorporate by reference to determine if any of the statements in this
prospectus or in any document previously incorporated by reference have been
modified or superseded. This prospectus incorporates by reference the documents
listed below and any future filings we will make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the
selling stockholders sell all of our common stock registered under this
prospectus.
o our annual report on Form 10-K/A for the fiscal year ended
December 31, 2004;
o our quarterly report on Form 10-Q filed on May 16, 2005;
o our current reports on Form 8-K filed on February 3, 2005,
February 7, 2005, February 14, 2005, March 15, 2005, March 30,
2005 and April 8, 2005; and
o the description of our common stock contained in Item 1 of our
Registration Statement on Form 8-A, dated October 22, 2004;
The information about us contained in this prospectus should be read together
with the information in the documents incorporated by reference. You may request
a copy of any or all of these filings, at no cost, by writing or telephoning us
at Callisto Pharmaceuticals, Inc., 420 Lexington Avenue, Suite 1609, New York,
New York 10170, Telephone: (212) 297-0010
SUMMARY
This summary highlights information contained elsewhere in this prospectus. You
should read the entire prospectus carefully, including, the section entitled
"Risk Factors" before deciding to invest in our common stock. Callisto
Pharmaceuticals, Inc. is referred to throughout this prospectus as "Callisto,"
"we" or "us."
We are a biopharmaceutical company focused on the development of drugs to treat
relapsed (failure of prior therapy) acute leukemia, multiple myeloma (an
incurable blood cancer that invades and proliferates in bone marrow), other
cancers and osteolytic bone disease (bone disease caused by white blood cells).
Our lead drug candidate, Annamycin, a drug from the anthracycline family
(chemotherapy drugs which are also antibiotics), earlier completed a Phase I/IIa
trial in leukemia patients who had residual leukemic cells (refractory) in their
bodies. Annamycin, originally developed by scientists at The University of Texas
M.D. Anderson Cancer Center to address the clinical limitations associated with
anthracycline drugs such as Adriamycin (doxorubicin) to treat cancer, is planned
to begin a trial at The University of Texas M.D. Anderson Cancer Center in adult
relapsed acute lymphocytic leukemia (ALL) patients in mid-2005 which will
include an initial evaluation of a small number of patients (2 cohorts totaling
approximately 6 patients) in a Phase I/IIa trial that will be rolled into a
larger Phase IIb trial. We also expect to commence two additional trials of
Annamycin in 2005, a single agent trial in pediatric relapsed ALL patients and
in combination with Ara-C (cytosine arabinoside) in relapsed acute myeloid
leukemia (AML) patients.
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Our second drug candidate, Atiprimod, is an orally available drug with
antiproliferative and antiangiogenic activity. Atiprimod commenced a Phase I/IIa
clinical trial in relapsed multiple myeloma patients on May 26, 2004. These are
patients that no longer respond to chemotherapy, and are in advanced stages of
the disease. The Phase I/IIa clinical trial is currently being enrolled at four
sites, The University of Texas M.D. Anderson Cancer Center (Houston, TX), the
Dana-Farber Cancer Institute (Boston, MA), the St. Vincent's Comprehensive
Cancer Center (New York, NY) and the Roswell Park Cancer Institute (Buffalo,
NY).
On January 6, 2004, we announced that the Office of Orphan Products Development
of the United States Food and Drug Administration (FDA) granted orphan drug
designation to Atiprimod for the treatment of multiple myeloma.
RECENT DEVELOPMENTS
On March 9, 2005 we sold and issued in a private placement an aggregate
1,985,791 shares of common stock at a per share price of $1.52, for aggregate
gross proceeds of approximately $3.02 million. Because this transaction was
completed with certain existing institutional shareholders and certain members
of our management we paid no fees to selling agents and have agreed to file a
registration statement covering resale of the shares within 30 days of the
closing.
On March 15, 2005 we announced a second Phase I/IIa clinical trial of Atiprimod
in advanced cancer patients. The new trial is entitled: "An Open Label Study of
the Safety and Efficacy of Atiprimod Treatment for Patients with Advanced
Cancer". The trial protocol received Institutional Review Board, or IRB,
approval on February 22, 2005 at The University of Texas M.D. Anderson Cancer
Center. Site initiation was completed on March 3, 2005, and patient screening
and dosing began in April, 2005.
HISTORY
In March 2002, Callisto Pharmaceuticals, Inc. ("Old Callisto") purchased 99.7%
of the outstanding common shares of Webtronics, Inc., ("Webtronics") a public
company for $400,000. Webtronics was incorporated in Florida on February 2, 2001
and had limited operations at December 31, 2002.
On April 30, 2003, pursuant to an Agreement and Plan of Merger dated March 10,
2003, as amended April 4, 2003, Synergy Acquisition Corp., a wholly-owned
subsidiary of Webtronics merged into Synergy Pharmaceuticals Inc. ("Synergy")
and Callisto Acquisition Corp., a wholly-owned subsidiary of Webtronics merged
into Old Callisto (collectively, the "Merger"). As a result of the Merger, Old
Callisto and Synergy became wholly-owned subsidiaries of Webtronics. In the
Merger Webtronics issued 17,318,994 shares of its common stock in exchange for
outstanding Old Callisto common stock and an additional 4,395,684 shares in
exchange for outstanding Synergy common stock. Old Callisto changed its name to
Callisto Research Labs, LLC ("Callisto Research") and Webtronics changed its
name to Callisto Pharmaceuticals, Inc. and changed its state of incorporation
from Florida to Delaware. Subsequently, 171,818 shares of common stock issued to
former Synergy shareholders were returned to us under the terms of certain
indemnification agreements.
Our principal executive office is located at 420 Lexington Avenue, Suite 1609,
New York, New York 10170
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RISK FACTORS
AN INVESTMENT IN OUR SHARES INVOLVES A HIGH DEGREE OF RISK. BEFORE MAKING AN
INVESTMENT DECISION, YOU SHOULD CAREFULLY CONSIDER ALL OF THE RISKS DESCRIBED IN
THIS PROSPECTUS. IF ANY OF THE RISKS DISCUSSED IN THIS PROSPECTUS ACTUALLY
OCCUR, OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE
MATERIALLY AND ADVERSELY AFFECTED. IF THIS WERE TO HAPPEN, THE PRICE OF OUR
SHARES COULD DECLINE SIGNIFICANTLY AND YOU MAY LOSE ALL OR A PART OF YOUR
INVESTMENT. OUR FORWARD-LOOKING STATEMENTS IN THIS PROSPECTUS ARE SUBJECT TO THE
FOLLOWING RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM THOSE ANTICIPATED BY OUR FORWARD-LOOKING STATEMENTS AS A RESULT OF THE RISK
FACTORS BELOW. SEE "FORWARD-LOOKING STATEMENTS."
RISKS RELATED TO OUR BUSINESS
WE ARE AT AN EARLY STAGE OF DEVELOPMENT AS A COMPANY, CURRENTLY HAVE NO SOURCE
OF REVENUE AND MAY NEVER BECOME PROFITABLE.
We are a development stage biopharmaceutical company. Currently, we have no
products approved for commercial sale and, to date, we have not generated any
revenue. Our ability to generate revenue depends heavily on:
o demonstration in Phase I/IIa and Phase IIb clinical trials that
our two product candidates, Atiprimod for the treatment of
relapsed multiple myeloma and Annamycin for the treatment of
relapsed acute leukemia, respectively, are safe and effective;
o the successful development of our other product candidates;
o our ability to seek and obtain regulatory approvals, including
with respect to the indications we are seeking;
o the successful commercialization of our product candidates; and
o market acceptance of our products.
All of our existing product candidates will require extensive additional
clinical evaluation, regulatory review, significant marketing efforts and
substantial investment before they could provide us with any revenue. For
example, Atiprimod for the treatment of multiple myeloma entered Phase I/IIa
clinical trials in May 2004 and Annamycin for the treatment of acute leukemia is
expected to enter clinical trials in mid-2005. Our other product candidates are
in preclinical development. As a result, if we do not successfully develop and
commercialize Atiprimod or Annamycin, we will be unable to generate any revenue
for many years, if at all. We do not anticipate that we will generate revenue
for several years, at the earliest, or that we will achieve profitability for at
least several years after generating material revenue, if at all. If we are
unable to generate revenue, we will not become profitable, and we may be unable
to continue our operations.
WE HAVE INCURRED SIGNIFICANT LOSSES SINCE INCEPTION AND ANTICIPATE THAT WE WILL
INCUR CONTINUED LOSSES FOR THE FORESEEABLE FUTURE.
As of March 31, 2005 and December 31, 2004, we had an accumulated deficit of
$35,955,328 and $33,361,197, respectively. We have incurred losses in each year
since our inception in 1996. We incurred a net loss of $2,594,131 for the three
months ended March 31, 2005 and $7,543,467 and $13,106,247 for the years ended
December 31, 2004 and 2003, respectively. These losses, among other things, have
had and will continue to have an adverse effect on our stockholders' equity and
working capital. We expect to incur significant and increasing operating losses
for the next several years as we expand our research and development, continue
our clinical trials of Atiprimod for the treatment of multiple myeloma, initiate
our clinical trials of Annamycin for the treatment of acute leukemias, acquire
or license technologies, advance our other product candidates into clinical
development, seek regulatory approval and, if we receive FDA approval,
commercialize our products. Because of the numerous risks and uncertainties
associated with our product development efforts, we are unable to predict the
extent of any future losses or when we will become profitable, if at all. If we
are unable to achieve and then maintain profitability, the market value of our
common stock will likely decline.
7
WE WILL NEED TO RAISE SUBSTANTIAL ADDITIONAL CAPITAL TO FUND OUR OPERATIONS, AND
OUR FAILURE TO OBTAIN FUNDING WHEN NEEDED MAY FORCE US TO DELAY, REDUCE OR
ELIMINATE OUR PRODUCT DEVELOPMENT PROGRAMS OR COLLABORATION EFFORTS.
Our operations have consumed substantial amounts of cash since inception. We
expect to continue to spend substantial amounts to:
o complete the clinical development of our two lead product
candidates, Atiprimod for the treatment of multiple myeloma and
Annamycin for the treatment of acute leukemias;
o continue the development of our other product candidates;
o finance our general and administrative expenses;
o prepare regulatory approval applications and seek approvals for
Atiprimod and Annamycin and our other product candidates;
o license or acquire additional technologies;
o launch and commercialize our product candidates, if any such
product candidates receive regulatory approval; and
o develop and implement sales, marketing and distribution
capabilities.
In 2004, our cash used in operations increased significantly over 2003 and we
expect that our cash used in operations will increase significantly for the next
several years. Over the past 12 months, we have spent approximately $4.7 million
or approximately $400,000 per month. We expect that our existing capital
resources will be sufficient to fund our operations for at least the next 12
months. We will be required to raise additional capital to complete the
development and commercialization of our current product candidates. Our future
funding requirements will depend on many factors, including, but not limited to:
o the rate of progress and cost of our clinical trials and other
development activities;
o any future decisions we may make about the scope and
prioritization of the programs we pursue;
o the costs of filing, prosecuting, defending and enforcing any
patent claims and other intellectual property rights;
o the costs and timing of regulatory approval;
o the costs of establishing sales, marketing and distribution
capabilities;
o the effect of competing technological and market developments;
o the terms and timing of any collaborative, licensing and other
arrangements that we may establish; and
o general market conditions for offerings from biopharmaceutical
companies.
To date, our sources of cash have been primarily limited to the sale of our
equity securities. We cannot be certain that additional funding will be
available on acceptable terms, or at all. To the extent that we raise additional
funds by issuing equity securities, our stockholders may experience significant
dilution. Any debt financing, if available, may involve restrictive covenants
that impact our ability to conduct our business. If we are unable to raise
additional capital when required or on acceptable terms, we may have to
significantly delay, scale back or discontinue the development and/or
commercialization of one or more of our product candidates. We also may be
required to:
o seek collaborators for our product candidates at an earlier stage
than otherwise would be desirable and on terms that are less
favorable than might otherwise be available; and
o relinquish, license or otherwise dispose of rights to
technologies, product candidates or products that we would
otherwise seek to develop or commercialize ourselves on
unfavorable terms.
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IF OUR AGREEMENTS WITH ANORMED INC. OR THE UNIVERSITY OF TEXAS M.D. ANDERSON
CANCER CENTER TERMINATE, OUR BUSINESS WOULD BE ADVERSELY AFFECTED.
Our business is dependent on rights we have licensed from AnorMED Inc. and The
University of Texas M.D. Anderson Cancer Center. Under the terms of the AnorMED
license agreement, we are obligated to make a maintenance fee payment of
$200,000 on January 1 of each year for the term of the license agreement.
Pursuant to the license agreement, failure to pay the maintenance fee is a
material breach of the agreement. We do not anticipate failing to pay the
maintenance fee, however in the event we cannot pay the maintenance fee, AnorMED
may terminate the license agreement and we would not be able to further develop
and commercialize Atiprimod which would have an adverse effect on our business.
Under the terms of the The University of Texas M.D. Anderson Cancer Center
license agreement, we are required to make certain good faith expenditures
towards the clinical development of at least one licensed product within the two
year period after March 2005. In addition, at any time after 5 years from August
12, 2004, The University of Texas M.D. Anderson Cancer Center has the right to
terminate the license if we fail to provide evidence within 90 days of written
notice that we have commercialized or we are actively and effectively attempting
to commercialize Annamycin. If we fail to fulfill these obligations or other
material obligations, The University of Texas M.D. Anderson Cancer Center
license agreement may be terminated and our business would be adversely
affected.
CLINICAL TRIALS INVOLVE A LENGTHY AND EXPENSIVE PROCESS WITH AN UNCERTAIN
OUTCOME, AND RESULTS OF EARLIER STUDIES AND TRIALS MAY NOT BE PREDICTIVE OF
FUTURE TRIAL RESULTS.
In order to receive regulatory approval for the commercialization of our product
candidates, we must conduct, at our own expense, extensive clinical trials to
demonstrate safety and efficacy of these product candidates. Clinical testing is
expensive, can take many years to complete and its outcome is uncertain. Failure
can occur at any time during the clinical trial process.
The results of preclinical studies and early clinical trials of our product
candidates do not necessarily predict the results of later-stage clinical
trials. Product candidates in later stages of clinical trials may fail to show
the desired safety and efficacy traits despite having progressed through initial
clinical testing. The data collected from clinical trials of our product
candidates may not be sufficient to support the submission of a new drug
application or to obtain regulatory approval in the United States or elsewhere.
Because of the uncertainties associated with drug development and regulatory
approval, we cannot determine if or when we will have an approved product for
commercialization or achieve sales or profits.
DELAYS IN CLINICAL TESTING COULD RESULT IN INCREASED COSTS TO US AND DELAY OUR
ABILITY TO GENERATE REVENUE.
While to date there have no delays in our clinical trials, enrollment in our
Atiprimod Phase I/IIa trial in multiple myeloma was slower than anticipated due
to limited availability of relapsed multiple myeloma patients. In the future, we
may experience delays in clinical testing of our product candidates. We do not
know whether planned clinical trials will begin on time, will need to be
redesigned or will be completed on schedule, if at all. Clinical trials can be
delayed for a variety of reasons, including delays in obtaining regulatory
approval to commence a trial, in reaching agreement on acceptable clinical trial
terms with prospective sites, in obtaining institutional review board approval
to conduct a trial at a prospective site, in recruiting patients to participate
in a trial or in obtaining sufficient supplies of clinical trial materials. Many
factors affect patient enrollment, including the size of the patient population,
the proximity of patients to clinical sites, the eligibility criteria for the
trial, competing clinical trials and new drugs approved for the conditions we
are investigating. Prescribing physicians will also have to decide to use our
product candidates over existing drugs that have established safety and efficacy
profiles. Any delays in completing our clinical trials will increase our costs,
slow down our product development and approval process and delay our ability to
generate revenue.
WE MAY BE REQUIRED TO SUSPEND OR DISCONTINUE CLINICAL TRIALS DUE TO UNEXPECTED
SIDE EFFECTS OR OTHER SAFETY RISKS THAT COULD PRECLUDE APPROVAL OF OUR PRODUCT
CANDIDATES.
Our clinical trials may be suspended at any time for a number of reasons. For
example, we may voluntarily suspend or terminate our clinical trials if at any
time we believe that they present an unacceptable risk to the clinical trial
patients. In addition, regulatory agencies may order the temporary or permanent
discontinuation of our clinical trials at any time if they believe that the
clinical trials are not being conducted in accordance with applicable regulatory
requirements or that they present an unacceptable safety risk to the clinical
trial patients.
Administering any product candidates to humans may produce undesirable side
effects. These side effects could interrupt, delay or halt clinical trials of
our product candidates and could result in the FDA or other regulatory
authorities denying further development or approval of our product candidates
for any or all targeted indications. Ultimately, some or all of our product
candidates may prove to
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be unsafe for human use. Moreover, we could be subject to significant liability
if any volunteer or patient suffers, or appears to suffer, adverse health
effects as a result of participating in our clinical trials.
IF WE ARE UNABLE TO SATISFY REGULATORY REQUIREMENTS, WE MAY NOT BE ABLE TO
COMMERCIALIZE OUR PRODUCT CANDIDATES.
We need FDA approval prior to marketing our product candidates in the United
States of America. We commenced in May 2004 a Phase I/IIa trial of Atiprimod for
the treatment of multiple myeloma. We expect to commence a Phase I/IIa clinical
trial of Annamycin for the treatment of acute leukemias in mid-2005. If we fail
to obtain FDA approval to market our product candidates, we will be unable to
sell our product candidates in the United States of America and we will not
generate any revenue.
This regulatory review and approval process, which includes evaluation of
preclinical studies and clinical trials of a product candidate as well as the
evaluation of our manufacturing process and our contract manufacturers'
facilities, is lengthy, expensive and uncertain. To receive approval, we must,
among other things, demonstrate with substantial evidence from well-controlled
clinical trials that the product candidate is both safe and effective for each
indication where approval is sought. Satisfaction of these requirements
typically takes several years and the time needed to satisfy them may vary
substantially, based on the type, complexity and novelty of the pharmaceutical
product. We cannot predict if or when we might submit for regulatory review any
of our product candidates currently under development. Any approvals we may
obtain may not cover all of the clinical indications for which we are seeking
approval. Also, an approval might contain significant limitations in the form of
narrow indications, warnings, precautions, or contra-indications with respect to
conditions of use.
The FDA has substantial discretion in the approval process and may either refuse
to file our application for substantive review or may form the opinion after
review of our data that our application is insufficient to allow approval of our
product candidates. If the FDA does not file or approve our application, it may
require that we conduct additional clinical, preclinical or manufacturing
validation studies and submit that data before it will reconsider our
application. Depending on the extent of these or any other studies, approval of
any applications that we submit may be delayed by several years, or may require
us to expend more resources than we have available. It is also possible that
additional studies, if performed and completed, may not be considered sufficient
by the FDA to make our applications approvable. If any of these outcomes occur,
we may be forced to abandon our applications for approval, which might cause us
to cease operations.
We will also be subject to a wide variety of foreign regulations governing the
development, manufacture and marketing of our products. Whether or not FDA
approval has been obtained, approval of a product by the comparable regulatory
authorities of foreign countries must still be obtained prior to manufacturing
or marketing the product in those countries. The approval process varies from
country to country and the time needed to secure approval may be longer or
shorter than that required for FDA approval. We cannot assure you that clinical
trials conducted in one country will be accepted by other countries or that
approval in one country will result in approval in any other country.
IF OUR PRODUCT CANDIDATES ARE UNABLE TO COMPETE EFFECTIVELY WITH MARKETED CANCER
DRUGS TARGETING SIMILAR INDICATIONS AS OUR PRODUCT CANDIDATES, OUR COMMERCIAL
OPPORTUNITY WILL BE REDUCED OR ELIMINATED.
We face competition from established pharmaceutical and biotechnology companies,
as well as from academic institutions, government agencies and private and
public research institutions. Many of our competitors have significantly greater
financial resources and expertise in research and development, manufacturing,
preclinical testing, conducting clinical trials, obtaining regulatory approvals
and marketing approved products than we do. Smaller or early-stage companies may
also prove to be significant competitors, particularly through collaborative
arrangements with large, established companies. Our commercial opportunity will
be reduced or eliminated if our competitors develop and commercialize cancer
drugs that are safer, more effective, have fewer side effects or are less
expensive than our product candidates. These third parties compete with us in
recruiting and retaining qualified scientific and management personnel,
establishing clinical trial sites and patient registration for clinical trials,
as well as in acquiring technologies and technology licenses complementary to
our programs or advantageous to our business.
We expect that our ability to compete effectively will depend upon our ability
to:
o successfully and rapidly complete clinical trials and submit for
and obtain all requisite regulatory approvals in a cost-effective
manner;
o maintain a proprietary position for our products and
manufacturing processes and other related product technology;
o attract and retain key personnel;
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o develop relationships with physicians prescribing these products;
and
o build an adequate sales and marketing infrastructure for our
product candidates.
Because we will be competing against significantly larger companies with
established track records, we will have to demonstrate to physicians that, based
on experience, clinical data, side-effect profiles and other factors, our
products are preferable to existing cancer drugs. If we are unable to compete
effectively in the cancer drug market and differentiate our products from
currently marketed cancer drugs, we may never generate meaningful revenue.
Numerous pharmaceutical and biotechnology companies have developed anthracycline
drugs used to treat acute leukemias similar to our compound, Annamycin. These
compounds include Adriamycin(R) and Ellence(R) which are marketed by Pfizer and
Cerubidine(R) which is marketed by Boehringer Ingelheim. These drugs have been
approved by the FDA and are currently being marketed as opposed to Annamycin
which is in clinical development. Atiprimod, our drug candidate for relapsed
multiple myeloma, works through a different mechanism of action than Velcade
which is currently marketed by Millenium Pharmaceuticals and other drugs in
development, such as Celgene Corporation's Revlimid.
WE CURRENTLY HAVE NO SALES AND MARKETING ORGANIZATION. IF WE ARE UNABLE TO
ESTABLISH A DIRECT SALES FORCE IN THE UNITED STATES TO PROMOTE OUR PRODUCTS, THE
COMMERCIAL OPPORTUNITY FOR OUR PRODUCTS MAY BE DIMINISHED.
We currently have no sales and marketing organization. If any of our product
candidates are approved by the FDA, we intend to market that product directly to
hospitals in the United States of America through our own sales force. We will
incur significant additional expenses and commit significant additional
management resources to establish this sales force. We may not be able to
establish these capabilities despite these additional expenditures. We will also
have to compete with other pharmaceutical and biotechnology companies to
recruit, hire and train sales and marketing personnel. If we elect to rely on
third parties to sell our product candidates in the United States, we may
receive less revenue than if we sold our products directly. In addition, we may
have little or no control over the sales efforts of those third parties. In the
event we are unable to develop our own sales force or collaborate with a third
party to sell our product candidates, we may not be able to commercialize our
product candidates which would negatively impact our ability to generate
revenue.
WE MAY NEED OTHERS TO MARKET AND COMMERCIALIZE OUR PRODUCT CANDIDATES IN
INTERNATIONAL MARKETS.
In the future, if appropriate regulatory approvals are obtained, we intend to
commercialize our product candidates in international markets. However, we have
not decided how to commercialize our product candidates in those markets. We may
decide to build our own sales force or sell our products through third parties.
Currently, we do not have any plans to enter international markets. If we decide
to sell our product candidates in international markets through a third party,
we may not be able to enter into any marketing arrangements on favorable terms
or at all. In addition, these arrangements could result in lower levels of
income to us than if we marketed our product candidates entirely on our own. If
we are unable to enter into a marketing arrangement for our product candidates
in international markets, we may not be able to develop an effective
international sales force to successfully commercialize those products in
international markets. If we fail to enter into marketing arrangements for our
products and are unable to develop an effective international sales force, our
ability to generate revenue would be limited.
IF OUR RELATIONSHIP WITH OUR CONTRACT MANUFACTURER FOR ANNAMYCIN TERMINATES, OR
THEIR FACILITIES ARE DAMAGED OR DESTROYED, WE MAY BE UNABLE TO DEVELOP OR
COMMERCIALIZE ANNAMYCIN.
Currently, Antibioticos S.p.A. is our sole supplier of Annamycin for our
clinical trials. If our relationship with this contract manufacturer, or any
other contract manufacturer we might use, terminates or if any of their
facilities are damaged for any reason, including fire, flood, earthquake or
other similar event, we may be unable to obtain supply of Annamycin. If any of
these events were to occur, we may need to find alternative manufacturers or
manufacturing facilities. The number of contract manufacturers with the
expertise, required regulatory approvals and facilities to manufacture Annamycin
on a commercial scale is extremely limited, and it would take a significant
amount of time to arrange for alternative manufacturers. If we need to change to
other commercial manufacturers, the FDA and comparable foreign regulators must
approve these manufacturers' facilities and processes prior to our use, which
would require new testing and compliance inspections. In addition, we may not
have the intellectual property rights, or may have to share intellectual
property rights, to any improvements in the current manufacturing processes or
any new manufacturing processes for Annamycin. Any of these factors could cause
us to delay or suspend clinical trials, regulatory submissions, required
approvals or commercialization of Annamycin, entail higher costs, and could
result in our being unable to commercialize Annamycin
11
successfully. Furthermore, if our contract manufacturers fail to deliver the
required commercial quantities of bulk drug substance or finished product on a
timely basis and at commercially reasonable prices, and we were unable to find
one or more replacement manufacturers capable of production at a substantially
equivalent cost, in substantially equivalent volumes and quality, and on a
timely basis, we would likely be unable to meet demand for Annamycin and we
would lose potential revenue.
IF THE FDA DOES NOT APPROVE OUR CONTRACT MANUFACTURERS' FACILITIES, WE MAY BE
UNABLE TO DEVELOP OR COMMERCIALIZE OUR PRODUCT CANDIDATES.
We rely on third-party contract manufacturers to manufacture our product
candidates, and currently have no plans to develop our own manufacturing
facility. The facilities used by our contract manufacturers to manufacture our
product candidates must be approved by the FDA. If the FDA does not approve
these facilities for the manufacture of our product, we may need to fund
additional modifications to our manufacturing process, conduct additional
validation studies, or find alternative manufacturing facilities, any of which
would result in significant cost to us as well as a delay of up to several years
in obtaining approval for and manufacturing of our product candidates. In
addition, our contract manufacturers will be subject to ongoing periodic
unannounced inspection by the FDA and corresponding state agencies for
compliance with good manufacturing practices regulations, or cGMPs, and similar
foreign standards. These regulations cover all aspects of the manufacturing,
testing, quality control and record keeping relating to our product candidates.
We do not have control over our contract manufacturers' compliance with these
regulations and standards. Failure by our contract manufacturers to comply with
applicable regulations could result in sanctions being imposed on us, including
fines, injunctions, civil penalties, failure of the government to grant market
approval of drugs, delays, suspension or withdrawals of approvals, operating
restrictions and criminal prosecutions, any of which could significantly and
adversely affect our business. In addition, we have no control over our contract
manufacturers' ability to maintain adequate quality control, quality assurance
and qualified personnel. Failure by our contract manufacturers to comply with or
maintain any of these standards could adversely affect the development of our
product candidates and our business.
IF PRODUCT LIABILITY LAWSUITS ARE SUCCESSFULLY BROUGHT AGAINST US, WE MAY INCUR
SUBSTANTIAL LIABILITIES AND MAY BE REQUIRED TO LIMIT COMMERCIALIZATION OF OUR
PRODUCT CANDIDATES.
We face an inherent risk of product liability lawsuits related to the testing of
our product candidates, and will face an even greater risk if we sell our
product candidates commercially. Currently, we are not aware of any anticipated
product liability claims with respect to our product candidates. In the future,
an individual may bring a liability claim against us if one of our product
candidates causes, or merely appears to have caused, an injury. If we cannot
successfully defend ourselves against the product liability claim, we may incur
substantial liabilities. Regardless of merit or eventual outcome, liability
claims may result in:
o decreased demand for our product candidates;
o injury to our reputation;
o withdrawal of clinical trial participants;
o costs of related litigation;
o substantial monetary awards to patients;
o product recalls;
o loss of revenue; and
o the inability to commercialize our product candidates.
We have "clinical trial" liability insurance with a $2,000,000 annual aggregate
limit for up to 40 patients participating in our Atiprimod and prospective
Annamycin clinical trials. We intend to expand our insurance coverage to include
the sale of commercial products if marketing approval is obtained for our
product candidates. Our current insurance coverage may prove insufficient to
cover any liability claims brought against us. In addition, because of the
increasing costs of insurance coverage, we may not be able to maintain insurance
coverage at a reasonable cost or obtain insurance coverage that will be adequate
to satisfy any liability that may arise.
EVEN IF WE RECEIVE REGULATORY APPROVAL FOR OUR PRODUCT CANDIDATES, WE WILL BE
SUBJECT TO ONGOING SIGNIFICANT REGULATORY OBLIGATIONS AND OVERSIGHT.
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If we receive regulatory approval to sell our product candidates, the FDA and
foreign regulatory authorities may, nevertheless, impose significant
restrictions on the indicated uses or marketing of such products, or impose
ongoing requirements for post-approval studies. Following any regulatory
approval of our product candidates, we will be subject to continuing regulatory
obligations, such as safety reporting requirements, and additional
post-marketing obligations, including regulatory oversight of the promotion and
marketing of our products. If we become aware of previously unknown problems
with any of our product candidates here or overseas or our contract
manufacturers' facilities, a regulatory agency may impose restrictions on our
products, our contract manufacturers or on us, including requiring us to
reformulate our products, conduct additional clinical trials, make changes in
the labeling of our products, implement changes to or obtain re-approvals of our
contract manufacturers' facilities or withdraw the product from the market. In
addition, we may experience a significant drop in the sales of the affected
products, our reputation in the marketplace may suffer and we may become the
target of lawsuits, including class action suits. Moreover, if we fail to comply
with applicable regulatory requirements, we may be subject to fines, suspension
or withdrawal of regulatory approvals, product recalls, seizure of products,
operating restrictions and criminal prosecution. Any of these events could harm
or prevent sales of the affected products or could substantially increase the
costs and expenses of commercializing and marketing these products.
WE RELY ON THIRD PARTIES TO CONDUCT OUR CLINICAL TRIALS. IF THESE THIRD PARTIES
DO NOT SUCCESSFULLY CARRY OUT THEIR CONTRACTUAL DUTIES OR MEET EXPECTED
DEADLINES, WE MAY NOT BE ABLE TO SEEK OR OBTAIN REGULATORY APPROVAL FOR OR
COMMERCIALIZE OUR PRODUCT CANDIDATES.
We have agreements with third-party contract research organizations, or CROs, to
provide monitors and to manage data for our clinical programs. We and our CROs
are required to comply with current Good Clinical Practices, or GCPs,
regulations and guidelines enforced by the FDA for all of our products in
clinical development. The FDA enforces GCPs through periodic inspections of
trial sponsors, principal investigators and trial sites. In the future, if we or
our CROs fail to comply with applicable GCPs, the clinical data generated in our
clinical trials may be deemed unreliable and the FDA may require us to perform
additional clinical trials before approving our marketing applications. We
cannot assure you that, upon inspection, the FDA will determine that any of our
clinical trials for products in clinical development comply with GCPs. In
addition, our clinical trials must be conducted with product produced under cGMP
regulations, and will require a large number of test subjects. Our failure to
comply with these regulations may require us to repeat clinical trials, which
would delay the regulatory approval process.
If any of our relationships with these third-party CROs terminate, we may not be
able to enter into arrangements with alternative CROs. If CROs do not
successfully carry out their contractual duties or obligations or meet expected
deadlines, if they need to be replaced, or if the quality or accuracy of the
clinical data they obtain is compromised due to the failure to adhere to our
clinical protocols, regulatory requirements or for other reasons, our clinical
trials may be extended, delayed or terminated, and we may not be able to obtain
regulatory approval for or successfully commercialize our product candidates. As
a result, our financial results and the commercial prospects for our product
candidates would be harmed, our costs could increase, and our ability to
generate revenue could be delayed.
IF WE FAIL TO ATTRACT AND KEEP SENIOR MANAGEMENT AND KEY SCIENTIFIC PERSONNEL,
WE MAY BE UNABLE TO SUCCESSFULLY DEVELOP OUR PRODUCT CANDIDATES, CONDUCT OUR
CLINICAL TRIALS AND COMMERCIALIZE OUR PRODUCT CANDIDATES.
Our success depends in part on our continued ability to attract, retain and
motivate highly qualified management, clinical and scientific personnel and on
our ability to develop and maintain important relationships with leading
academic institutions, clinicians and scientists. We are highly dependent upon
our senior management and scientific staff, particularly Gary S. Jacob, our
Chief Executive Officer, and Donald Picker, our Executive Vice President, R&D.
The loss of services of Dr. Jacob, Dr. Picker or one or more of our other
members of senior management could delay or prevent the successful completion of
our planned clinical trials or the commercialization of our product candidates.
The competition for qualified personnel in the biotechnology and pharmaceuticals
field is intense. We will need to hire additional personnel as we expand our
clinical development and commercial activities. We may not be able to attract
and retain quality personnel on acceptable terms given the competition for such
personnel among biotechnology, pharmaceutical and other companies. We do not
carry "key person" insurance covering any members of our senior management.
IF WE FAIL TO ACQUIRE AND DEVELOP OTHER PRODUCTS OR PRODUCT CANDIDATES, WE MAY
BE UNABLE TO GROW OUR BUSINESS.
To date, we have in-licensed or acquired the rights to each of our product
candidates. As part of our growth strategy, in addition to developing our
current product candidates, we intend to license or acquire additional products
and product candidates for development and commercialization. Because we have
limited internal research capabilities, we are dependent upon pharmaceutical and
biotechnology companies and other researchers to sell or license products to us.
The success of this strategy depends upon our
13
ability to identify, select and acquire the right pharmaceutical product
candidates and products. We currently do not have any intentions to acquire
another company.
Any product candidate we license or acquire may require additional development
efforts prior to commercial sale, including extensive clinical testing and
approval by the FDA and applicable foreign regulatory authorities. All product
candidates are prone to the risks of failure inherent in pharmaceutical product
development, including the possibility that the product candidate will not be
shown to be sufficiently safe and effective for approval by regulatory
authorities. In addition, we cannot assure you that any products that we license
or acquire that are approved will be manufactured or produced economically,
successfully commercialized or widely accepted in the marketplace.
Proposing, negotiating and implementing an economically viable product
acquisition or license is a lengthy and complex process. Other companies,
including those with substantially greater financial, marketing and sales
resources, may compete with us for the acquisition or license of product
candidates and approved products. We may not be able to acquire or license the
rights to additional product candidates and approved products on terms that we
find acceptable, or at all.
WE MAY UNDERTAKE ACQUISITIONS IN THE FUTURE, AND ANY DIFFICULTIES FROM
INTEGRATING THESE ACQUISITIONS COULD DAMAGE OUR ABILITY TO ATTAIN OR MAINTAIN
PROFITABILITY.
We may acquire additional businesses, products or product candidates that
complement or augment our existing business. Integrating any newly acquired
business or product could be expensive and time-consuming. We may not be able to
integrate any acquired business or product successfully or operate any acquired
business profitably. Moreover, we many need to raise additional funds through
public or private debt or equity financing to make acquisitions, which may
result in dilution to stockholders and the incurrence of indebtedness that may
include restrictive covenants.
WE WILL NEED TO INCREASE THE SIZE OF OUR ORGANIZATION, AND WE MAY EXPERIENCE
DIFFICULTIES IN MANAGING GROWTH.
We are a small company with 5 full-time and 2 part-time employees as of June 1,
2005. To continue our clinical trials and commercialize our product candidates,
we will need to expand our employee base for managerial, operational, financial
and other resources. Future growth will impose significant added
responsibilities on members of management, including the need to identify,
recruit, maintain and integrate additional employees. Over the next 12 months
depending on the progress of our planned clinical trials, we plan to add
approximately four employees who we expect to assist us with our clinical
programs. Our future financial performance and our ability to commercialize our
product candidates and to compete effectively will depend, in part, on our
ability to manage any future growth effectively. To that end, we must be able
to:
o manage our development efforts effectively;
o manage our clinical trials effectively;
o integrate additional management, administrative, manufacturing
and sales and marketing personnel;
o maintain sufficient administrative, accounting and management
information systems and controls; and
o hire and train additional qualified personnel.
We may not be able to accomplish these tasks, and our failure to accomplish any
of them could harm our financial results.
REIMBURSEMENT MAY NOT BE AVAILABLE FOR OUR PRODUCT CANDIDATES, WHICH COULD
DIMINISH OUR SALES.
Market acceptance and sales of our product candidates may depend on
reimbursement policies and health care reform measures. The levels at which
government authorities and third-party payors, such as private health insurers
and health maintenance organizations, reimburse patients for the price they pay
for our products could affect whether we are able to commercialize these
products. We cannot be sure that reimbursement will be available for any of
these products. Also, we cannot be sure that reimbursement amounts will not
reduce the demand for, or the price of, our products. We have not commenced
efforts to have our product candidates reimbursed by government or third party
payors. If reimbursement is not available or is available only to limited
levels, we may not be able to commercialize our products.
14
In recent years, officials have made numerous proposals to change the health
care system in the United States. These proposals include measures that would
limit or prohibit payments for certain medical treatments or subject the pricing
of drugs to government control. In addition, in many foreign countries,
particularly the countries of the European Union, the pricing of prescription
drugs is subject to government control. If our products are or become subject to
government regulation that limits or prohibits payment for our products, or that
subject the price of our products to governmental control, we may not be able to
generate revenue, attain profitability or commercialize our products.
As a result of legislative proposals and the trend towards managed health care
in the United States, third-party payers are increasingly attempting to contain
health care costs by limiting both coverage and the level of reimbursement of
new drugs. They may also refuse to provide any coverage of uses of approved
products for medical indications other than those for which the FDA has granted
market approvals. As a result, significant uncertainty exists as to whether and
how much third-party payers will reimburse patients for their use of
newly-approved drugs, which in turn will put pressure on the pricing of drugs.
LEGISLATIVE OR REGULATORY REFORM OF THE HEALTHCARE SYSTEM MAY AFFECT OUR ABILITY
TO SELL OUR PRODUCTS PROFITABLY.
In both the United States and certain foreign jurisdictions, there have been a
number of legislative and regulatory proposals to change the healthcare system
in ways that could impact upon our ability to sell our products profitably. In
recent years, new legislation has been proposed in the United States at the
federal and state levels that would effect major changes in the healthcare
system, either nationally or at the state level.
These proposals have included prescription drug benefit proposals for Medicare
beneficiaries introduced in Congress. Legislation creating a prescription drug
benefit and making certain changes in Medicaid reimbursement has recently been
enacted by Congress and signed by the President. Given this legislation's recent
enactment, it is still too early to determine its impact on the pharmaceutical
industry and our business. Further federal and state proposals are likely. The
potential for adoption of these proposals affects or will affect our ability to
raise capital, obtain additional collaborators and market our products. We
expect to experience pricing pressures in connection with the sale of our
products due to the trend toward managed health care, the increasing influence
of health maintenance organizations and additional legislative proposals. Our
results of operations could be adversely affected by future healthcare reforms.
RISKS RELATED TO OUR INTELLECTUAL PROPERTY
IT IS DIFFICULT AND COSTLY TO PROTECT OUR PROPRIETARY RIGHTS, AND WE MAY NOT BE
ABLE TO ENSURE THEIR PROTECTION.
Our commercial success will depend in part on obtaining and maintaining patent
protection and trade secret protection of our product candidates, and the
methods used to manufacture them, as well as successfully defending these
patents against third-party challenges. We will only be able to protect our
product candidates from unauthorized making, using, selling, offering to sell or
importation by third parties to the extent that we have rights under valid and
enforceable patents or trade secrets that cover these activities.
As of June 1, 2005, we own 4 issued United States patents and have licensed
rights to 8 issued United States patents and 78 issued foreign patents, and to 3
pending United States patent applications and 39 pending foreign patent
applications. We do not and have not had any control over the filing or
prosecution of these patents or patent applications. We may file additional
patent applications and extensions. Our issued United States patents we own and
license primarily are composition of matter and formulation patents related to
Atiprimod and liposomal Annamycin. Our composition of matter patents for
liposomal Annamycin and Atiprimod expire in 2008 and 2009, respectively. Our
formulation patents for liposomal Annamycin and Atiprimod expire in 2019 and
2018, respectively.
The patent positions of pharmaceutical and biotechnology companies can be highly
uncertain and involve complex legal and factual questions for which important
legal principles remain unresolved. No consistent policy regarding the breadth
of claims allowed in biotechnology patents has emerged to date in the United
States. The biotechnology patent situation outside the United States is even
more uncertain. Changes in either the patent laws or in interpretations of
patent laws in the United States and other countries may diminish the value of
our intellectual property. Accordingly, we cannot predict the breadth of claims
that may be allowed or enforced in our licensed patents or in third-party
patents.
The degree of future protection for our proprietary rights is uncertain because
legal means afford only limited protection and may not adequately protect our
rights or permit us to gain or keep our competitive advantage. For example:
o others may be able to make compounds that are competitive with
our product candidates but that are not covered by the claims of
our licensed patents, or for which we are not licensed under our
license agreements;
15
o we or our licensors might not have been the first to make the
inventions covered by our pending patent application or the
pending patent applications and issued patents of our licensors;
o we or our licensors might not have been the first to file patent
applications for these inventions;
o others may independently develop similar or alternative
technologies or duplicate any of our technologies;
o it is possible that our pending patent application or one or more
of the pending patent applications of our licensors will not
result in issued patents;
o the issued patents of our licensors may not provide us with any
competitive advantages, or may be held invalid or unenforceable
as a result of legal challenges by third parties;
o we may not develop additional proprietary technologies that are
patentable; or
o the patents of others may have an adverse effect on our business.
We also may rely on trade secrets to protect our technology, especially where we
do not believe patent protection is appropriate or obtainable. However, trade
secrets are difficult to protect. While we use reasonable efforts to protect our
trade secrets, our employees, consultants, contractors, outside scientific
collaborators and other advisors may unintentionally or willfully disclose our
information to competitors. Enforcing a claim that a third party illegally
obtained and is using our trade secrets is expensive and time consuming, and the
outcome is unpredictable. In addition, courts outside the United States are
sometimes less willing to protect trade secrets. Moreover, our competitors may
independently develop equivalent knowledge, methods and know-how.
WE MAY INCUR SUBSTANTIAL COSTS AS A RESULT OF LITIGATION OR OTHER PROCEEDINGS
RELATING TO PATENT AND OTHER INTELLECTUAL PROPERTY RIGHTS AND WE MAY BE UNABLE
TO PROTECT OUR RIGHTS TO, OR USE, OUR TECHNOLOGY.
If we choose to go to court to stop someone else from using the inventions
claimed in our licensed patents, that individual or company has the right to ask
the court to rule that these patents are invalid and/or should not be enforced
against that third party. These lawsuits are expensive and would consume time
and other resources even if we were successful in stopping the infringement of
these patents. In addition, there is a risk that the court will decide that
these patents are not valid and that we do not have the right to stop the other
party from using the inventions. There is also the risk that, even if the
validity of these patents is upheld, the court will refuse to stop the other
party on the ground that such other party's activities do not infringe our
rights to these patents.
Furthermore, a third party may claim that we are using inventions covered by the
third party's patent rights and may go to court to stop us from engaging in our
normal operations and activities, including making or selling our product
candidates. These lawsuits are costly and could affect our results of operations
and divert the attention of managerial and technical personnel. There is a risk
that a court would decide that we are infringing the third party's patents and
would order us to stop the activities covered by the patents. In addition, there
is a risk that a court will order us to pay the other party damages for having
violated the other party's patents. The biotechnology industry has produced a
proliferation of patents, and it is not always clear to industry participants,
including us, which patents cover various types of products or methods of use.
The coverage of patents is subject to interpretation by the courts, and the
interpretation is not always uniform. If we are sued for patent infringement, we
would need to demonstrate that our products or methods of use either do not
infringe the patent claims of the relevant patent and/or that the patent claims
are invalid, and we may not be able to do this. Proving invalidity, in
particular, is difficult since it requires a showing of clear and convincing
evidence to overcome the presumption of validity enjoyed by issued patents.
Because some patent applications in the United States of America may be
maintained in secrecy until the patents are issued, because patent applications
in the United States of America and many foreign jurisdictions are typically not
published until eighteen months after filing, and because publications in the
scientific literature often lag behind actual discoveries, we cannot be certain
that others have not filed patent applications for technology covered by our
licensors' issued patents or our pending applications or our licensors' pending
applications or that we or our licensors were the first to invent the
technology. Our competitors may have filed, and may in the future file, patent
applications covering technology similar to ours. Any such patent application
may have priority over our or our licensors' patent applications and could
further require us to obtain rights to issued patents covering such
technologies. If another party has filed a United States patent application on
inventions similar to ours, we may have to participate in an interference
proceeding declared by the United States Patent and Trademark Office to
determine priority of invention in the United States. The costs of these
proceedings could be substantial, and it is possible that such efforts would be
unsuccessful, resulting in a loss of our United States patent position with
respect to such inventions.
16
Some of our competitors may be able to sustain the costs of complex patent
litigation more effectively than we can because they have substantially greater
resources. In addition, any uncertainties resulting from the initiation and
continuation of any litigation could have a material adverse effect on our
ability to raise the funds necessary to continue our operations.
RISKS RELATED TO OUR COMMON STOCK
MARKET VOLATILITY MAY AFFECT OUR STOCK PRICE AND THE VALUE OF YOUR INVESTMENT.
The market prices for securities of biopharmaceutical companies in general have
been highly volatile and may continue to be highly volatile in the future. The
following factors, in addition to other risk factors described in this section,
may have a significant impact on the market price of our common stock:
o announcements of technological innovations or new products by us
or our competitors;
o announcement of FDA approval or non-approval of our product
candidates or delays in the FDA review process;
o actions taken by regulatory agencies with respect to our product
candidates, clinical trials, manufacturing process or sales and
marketing activities;
o regulatory developments in the United States of America and
foreign countries;
o the success of our development efforts and clinical trials;
o the success of our efforts to acquire or in-license additional
products or product candidates;
o any intellectual property infringement action, or any other
litigation, involving us;
o announcements concerning our competitors, or the biotechnology or
biopharmaceutical industries in general;
o actual or anticipated fluctuations in our operating results;
o changes in financial estimates or recommendations by securities
analysts;
o sales of large blocks of our common stock;
o sales of our common stock by our executive officers, directors
and significant stockholders; and
o the loss of any of our key scientific or management personnel.
The occurrence of one or more of these factors may cause our stock price to
decline, and you may not be able to resell your shares at or above the price you
paid for your shares. In addition, the stock markets in general, and the markets
for biotechnology and biopharmaceutical stocks in particular, have experienced
extreme volatility that has often been unrelated to the operating performance of
particular companies. These broad market fluctuations may adversely affect the
trading price of our common stock.
WE ARE AT RISK OF SECURITIES CLASS ACTION LITIGATION.
In the past, securities class action litigation has often been brought against a
company following a decline in the market price of its securities. This risk is
especially relevant for us because biotechnology and biopharmaceutical companies
have experienced significant stock price volatility in recent years. If we faced
such litigation, it could result in substantial costs and a diversion of
management's attention and resources, which could harm our business.
WE HAVE NOT PAID CASH DIVIDENDS IN THE PAST AND DO NOT EXPECT TO PAY CASH
DIVIDENDS IN THE FUTURE. ANY RETURN ON INVESTMENT MAY BE LIMITED TO THE VALUE OF
OUR STOCK.
We have never paid cash dividends on our stock and do not anticipate paying cash
dividends on our stock in the foreseeable future. The payment of cash dividends
on our stock will depend on our earnings, financial condition and other business
and economic factors affecting us at such time as the board of directors may
consider relevant. If we do not pay cash dividends, our stock may be less
valuable because a return on your investment will only occur if our stock price
appreciates.
17
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 (the "Act") provides a safe
harbor for forward-looking statements made by us or on our behalf. We and our
representatives may from time to time make written or oral statements that are
"forward-looking," including statements contained in this prospectus and other
filings with the Securities and Exchange Commission, reports to our stockholders
and news releases. All statements that express expectations, estimates,
forecasts or projections are forward-looking statements within the meaning of
the Act. In addition, other written or oral statements which constitute
forward-looking statements may be made by us or on our behalf. Words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates,"
"projects," "forecasts," "may," "should," variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve risks,
uncertainties and assumptions which are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed or forecasted
in or suggested by such forward-looking statements. We undertake no obligation
to update publicly any forward-looking statements, whether as a result of new
information, future events or otherwise. Among the important factors on which
such statements are based are assumptions concerning our ability to complete
ongoing clinical trials, results of our clinical trials, the timing of approval
of our products by the United States Food and Drug Administration, our ability
to obtain additional financing, our ability to attract and retain key employees,
our ability to protect intellectual property, and our ability to adapt to
economic, political and regulatory conditions affecting the healthcare industry.
USE OF PROCEEDS
We will not receive any of the proceeds from the resale of the shares. All
proceeds from the sale of these shares will be solely for the accounts of the
selling stockholders.
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SELLING STOCKHOLDERS
On March 9, 2005, we sold and issued 1,985,791 shares of common stock in a
private placement. This prospectus only covers the 1,985,791 shares of common
stock issued in the private placement. The following table lists certain
information with respect to the selling stockholders as follows: (i) each
selling stockholder's name, (ii) the number of outstanding shares of common
stock beneficially owned by the selling stockholders prior to this offering;
(iii) the number of shares being offered in this offering, (iv) the number of
shares of common stock to be beneficially owned by each selling stockholder
after the completion of this offering assuming the sale of all of the shares of
the common stock offered by each selling stockholder; and (v) if one percent or
more, the percentage of outstanding shares of common stock to be beneficially
owned by each selling stockholder after the completion of this offering assuming
the sale of all of the shares of common stock offered by each selling
stockholder. Except as noted, none of the selling stockholders have had any
position, office, or other material relationship with us or any of our
predecessors or affiliates within the past three years.
The selling stockholders may sell all, or none of their shares in this offering.
See "Plan of Distribution."
After the Offering
------------------
Selling Stockholder Number of Shares Number of Shares Number of Shares Percent of Shares
------------------- Beneficially Owned Being Offered Beneficially Owned Beneficially
Prior to the Offering ---------------- ------------------ Owned
--------------------- -----
The Pharmaceutical/Medical
Technology Fund, L.P.(1) 694,444 (2) 250,000 444,444 1.4
Atlas Equity I, Ltd.(3) 700,000 500,000 200,000 *
Orion Biomedical Fund, L..P (4) 905,572 540,461 365,111 1.2
Orion Biomedical Offshore Fund, L..P(4) 196,767 117,434 79,333 *
Alexandra Global Master Fund Ltd.(5) 750,000 500,000 250,000 *
Panetta Partners, Ltd. (6) 2,101,237 25,000 2,076,237 6.6
Gary S. Jacob (7) 274,745 (8) 16,448 258,297 *
Christoph Bruening (9) 460,699 (10) 20,000 440,699 1.4
Daniel D'Agostino (11) 16,448 16,448 -- --
* less than 1%.
(1) Dr. Douglas Murphy-Chutorian may be deemed to have dispositive power or
investment control over the shares of common stock held by the selling
stockholder.
(2) Includes 444,444 shares of common stock owned by Greenberg Health Care
Partners LLC, a related entity.
(3) Dmitri Balyasny and Jacob Gottlieb may be deemed to share dispositive power
or investment control over the shares of common stock held by the selling
stockholder.
(4) Lindsay A. Rosenwald, M.D. is the managing member of Orion Biomedical GP,
LLC, the general partner of Orion Biomedical Fund, LP and Orion Biomedical
Offshore Fund, LP, and may be deemed to have dispositive power or investment
control over the shares of common stock held by the selling stockholder.
(5) Mikhail A. Filimonov and Dimitri Sogoloff are managing members of Alexandra
Investment Management, LLC, the investment advisor to the selling stockholder,
and may be deemed to share dispositive power or investment control over the
shares of common stock held by the selling stockholder.
(6) Gabriele M. Cerrone, our Chairman, is the sole general partner of Panetta
and in such capacity only exercises voting and dispositive control over
securities owned by Panetta. As such, Mr. Cerrone may be deemed, solely for
purposes of Section 13(d) of the Securities Exchange Act of 1934 as amended, to
"beneficially" own securities in which he has no pecuniary interest and he
therefore disclaims such beneficial interest.
(7) Mr. Jacob is our Chief Executive Officer
(8) Includes 150,000 shares of common stock issuable upon exercise of stock
options.
19
(9) Mr. Bruening is a director of our company.
(10) Includes 25,000 shares of common stock issuable upon exercise of stock
options.
(11) Mr. D'Agostino is a consultant to our company.
PLAN OF DISTRIBUTION
The selling stockholders, or their pledgees, donees, transferees, or any of
their successors in interest selling shares received from a named selling
stockholder as a gift, partnership distribution or other non-sale-related
transfer after the date of this prospectus (all of whom may be selling
stockholders) may sell the common stock offered by this prospectus from time to
time on any stock exchange or automated interdealer quotation system on which
the common stock is listed or quoted at the time of sale, in the
over-the-counter market, in privately negotiated transactions or otherwise, at
fixed prices that may be changed, at market prices prevailing at the time of
sale, at prices related to prevailing market prices or at prices otherwise
negotiated. The selling stockholders may sell the common stock by one or more of
the following methods, without limitation:
o Block trades in which the broker or dealer so engaged will
attempt to sell the common stock as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
o An exchange distribution in accordance with the rules of any
stock exchange on which the common stock is listed;
o Ordinary brokerage transactions and transactions in which the
broker solicits purchases;
o Privately negotiated transactions;
o In connection with short sales of company shares;
o Through the distribution of common stock by any selling
stockholder to its partners, members or stockholders;
o By pledge to secure debts of other obligations;
o In connection with the writing of non-traded and exchange-traded
call options, in hedge transactions and in settlement of other
transactions in standardized or over-the-counter options;
o Purchases by a broker-dealer as principal and resale by the
broker-dealer for its account; or
o In a combination of any of the above.
These transactions may include crosses, which are transactions in which the same
broker acts as an agent on both sides of the trade. The selling stockholders may
also transfer the common stock by gift. We do not know of any arrangements by
the selling stockholders for the sale of any of the common stock.
The selling stockholders may engage brokers and dealers, and any brokers or
dealers may arrange for other brokers or dealers to participate in effecting
sales of the common stock. These brokers or dealers may act as principals, or as
an agent of a selling stockholder. Broker-dealers may agree with a selling
stockholder to sell a specified number of the stocks at a stipulated price per
share. If the broker-dealer is unable to sell common stock acting as agent for a
selling stockholder, it may purchase as principal any unsold shares at the
stipulated price. Broker-dealers who acquire common stock as principals may
thereafter resell the shares from time to time in transactions in any stock
exchange or automated interdealer quotation system on which the common stock is
then listed, at prices and on terms then prevailing at the time of sale, at
prices related to the then-current market price or in negotiated transactions.
Broker-dealers may use block transactions and sales to and through
broker-dealers, including transactions of the nature described above. The
selling stockholders may also sell the common stock in accordance with Rule 144
or Rule 144A under the Securities Act, rather than pursuant to this prospectus.
In order to comply with the securities laws of some states, if applicable, the
shares of common stock may be sold in these jurisdictions only through
registered or licensed brokers or dealers.
From time to time, one or more of the selling stockholders may pledge,
hypothecate or grant a security interest in some or all of the shares owned by
them. The pledgees, secured parties or person to whom the shares have been
hypothecated will, upon foreclosure in
20
the event of default, be deemed to be selling stockholders. The number of a
selling stockholder's shares offered under this prospectus will decrease as and
when it takes such actions. The plan of distribution for that selling
stockholder's shares will otherwise remain unchanged. In addition, a selling
stockholder may, from time to time, sell the shares short, and, in those
instances, this prospectus may be delivered in connection with the short sales
and the shares offered under this prospectus may be used to cover short sales.
To the extent required under the Securities Act, the aggregate amount of selling
stockholders' shares being offered and the terms of the offering, the names of
any agents, brokers, dealers or underwriters, any applicable commission and
other material facts with respect to a particular offer will be set forth in an
accompanying prospectus supplement or a post-effective amendment to the
registration statement of which this prospectus is a part, as appropriate. Any
underwriters, dealers, brokers or agents participating in the distribution of
the common stock may receive compensation in the form of underwriting discounts,
concessions, commissions or fees from a selling stockholder and/or purchasers of
selling stockholders' shares, for whom they may act (which compensation as to a
particular broker-dealer might be less than or in excess of customary
commissions). Neither we nor any selling stockholder can presently estimate the
amount of any such compensation.
The selling stockholders and any underwriters, brokers, dealers or agents that
participate in the distribution of the common stock may be deemed to be
"underwriters" within the meaning of the Securities Act, and any discounts,
concessions, commissions or fees received by them and any profit on the resale
of the securities sold by them may be deemed to be underwriting discounts and
commissions. If a selling stockholder is deemed to be an underwriter, the
selling stockholder may be subject to certain statutory liabilities including,
but not limited to Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act. Selling stockholders who are deemed underwriters within
the meaning of the Securities Act will be subject to the prospectus delivery
requirements of the Securities Act. The SEC staff is of a view that selling
stockholders who are registered broker-dealers or affiliates of registered
broker-dealers may be underwriters under the Securities Act. We will not pay any
compensation or give any discounts or commissions to any underwriter in
connection with the securities being offered by this prospectus. Because of
their affiliation with a broker-dealer, Orion Biomedical Fund, LP and Orion
Biomedical Offshore Fund, LP, each of which are selling stockholders, is deemed
to be an underwriter in connection with the offering of its respective shares
under this prospectus. Each of Orion Biomedical Fund, LP and Orion Biomedical
Offshore Fund, LP has represented to us that it purchased its respective shares
in the ordinary course of business and at the time of such purchase, had no
agreements or understandings to distribute such shares.
A selling stockholder may enter into hedging transactions with broker-dealers
and the broker-dealers may engage in short sales of the common stock in the
course of hedging the positions they assume with that selling stockholder,
including, without limitation, in connection with distributions of the common
stock by those broker-dealers. A selling stockholder may enter into option or
other transactions with broker-dealers, who may then resell or otherwise
transfer those common stock. A selling stockholder may also loan or pledge the
common stock offered hereby to a broker-dealer and the broker-dealer may sell
the common stock offered by this prospectus so loaned or upon a default may sell
or otherwise transfer the pledged common stock offered by this prospectus.
The selling stockholders and other persons participating in the sale or
distribution of the common stock will be subject to applicable provisions of the
Exchange Act, and the rules and regulations under the Exchange Act, including
Regulation M. This regulation may limit the timing of purchases and sales of any
of the common stock by the selling stockholders and any other person. The
anti-manipulation rules under the Exchange Act may apply to sales of common
stock in the market and to the activities of the selling stockholders and their
affiliates. Regulation M may restrict the ability of any person engaged in the
distribution of the common stock to engage in market-making activities with
respect to the particular common stock being distributed for a period of up to
five business days before the distribution. These restrictions may affect the
marketability of the common stock and the ability of any person or entity to
engage in market-making activities with respect to the common stock.
We have agreed to indemnify the selling stockholders who participated in our
March 9, 2005 private placement (the "Private Placement Stockholders") and any
brokers, dealers and agents who may be deemed to be underwriters, if any, of the
common stock offered by this prospectus, against specified liabilities,
including liabilities under the Securities Act. The Private Placement
Stockholders have agreed to indemnify us against specified liabilities.
The common stock offered by this prospectus was originally issued to the Private
Placement Stockholders pursuant to an exemption from the registration
requirements of the Securities Act, as amended. We agreed to register the common
stock issued to the Private Placement Stockholders under the Securities Act, and
to keep the registration statement of which this prospectus is a part effective
until three years after the effective date of the registration statement. We
have agreed to pay all expenses incident to the registration of the common stock
held by the Private Placement Stockholders in connection with this offering, but
all selling expenses related to the securities registered shall be borne by the
individual holders of such securities pro rata on the basis of the number of
shares of securities so registered on their behalf.
We cannot assure you that the selling stockholders will sell all or any portion
of the common stock offered by this prospectus. In addition, we cannot assure
you that a selling stockholder will not transfer the shares of our common stock
by other means not described in this prospectus.
21
LEGAL MATTERS
The validity of the common stock will be passed upon by Sichenzia Ross Friedman
Ference LLP, New York, New York. Sichenzia Ross Friedman Ference LLP owns an
aggregate of 22,000 shares of Callisto's common stock.
EXPERTS
The financial statements incorporated by reference in this prospectus have been
audited by BDO Seidman, LLP, an independent registered public accounting firm,
to the extent and for the periods set forth in their report incorporated herein
by reference, and are incorporated herein in reliance upon such report given
upon the authority of said firm as experts in auditing and accounting.
22
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth an estimate of the costs and expenses payable by
Callisto Pharmaceuticals, Inc. in connection with the offering described in this
registration statement. All of the amounts shown are estimates except the
Securities and Exchange Commission ("SEC") registration fee:
Securities and Exchange Commission Registration Fee $332
Printing and Engraving Expenses 2,500
Accounting Fees and Expenses 7,000
Legal Fees and Expenses 15,000
Miscellaneous 168
-------
Total $25,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Callisto Pharmaceuticals, Inc.'s Certificate of Incorporation provides that to
the fullest extent permitted by the Delaware General Corporation Law, a director
of the company shall not be personally liable to the company or its stockholders
for monetary damages for breach of fiduciary duty as a director. Under current
Delaware law, liability of a director may not be limited (i) for any breach of
the director's duty of loyalty to the company or its stockholders, (ii) for acts
or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, and (iii) for any transaction from which the director
derives an improper personal benefit.
The effect of the provision of Callisto's Certificate of Incorporation is to
eliminate the rights of the company and its stockholders (through stockholders'
derivative suits on behalf of the company) to recover monetary damages against a
director for breach of the fiduciary duty of care as a director (including
breaches resulting from negligent or grossly negligent behavior) except in the
situations described in clauses (i) through (iii) above. This provision does not
limit or eliminate the rights of the company or any stockholder to seek
nonmonetary relief such as an injunction or rescission in the event of a breach
of a director's duty of care. In addition, Callisto's Certificate of
Incorporation provides that the company shall indemnify to the fullest extent
permitted by law its directors, officers and employees and any other persons to
which Delaware law permits a corporation to provide indemnification against
losses incurred by any such person by reason of the fact that such person was
acting in such capacity.
Callisto has an insurance policy that insures its directors and officers, within
the limits and subject to the limitations of the policy, against certain
expenses in connection with the defense of actions, suits or proceedings, and
certain liabilities that might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been
directors or officers.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
5.1 Opinion of Sichenzia Ross Friedman Ference LLP*
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Sichenzia Ross Freidman Ference LLP
(included in Exhibit 5.1)*
24 Power of Attorney (included on Page II-3)*
* Previously filed.
ITEM 17. UNDERTAKINGS
1. The undersigned registrant hereby undertakes to file, during any period in
which offers or sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration
II-1
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
Provided, however, that paragraphs (B)(1)(i) and (B)(1)(ii) of
this section do not apply if the registration statement is on
Form S-3, Form S-8 or Form F-3, and the information required
to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
2. The undersigned registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, as amended, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
3. The undersigned registrant hereby undertakes to remove from registration by
means of a post-effective amendment any of the securities being registered that
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
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
5. Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the undersigned registrant according the foregoing provisions, or
otherwise, the undersigned registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
6. The undersigned registrant hereby undertakes that:
(i) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1)or (4) or
497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared
effective.
(ii) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-2
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 for filing on Form S-3 and has duly caused this
Amendment No. 1 to Form S-3 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on June
6, 2005.
CALLISTO PHARMACEUTICALS, INC.
By: /s/ Gary S. Jacob
----------------------
Gary S. Jacob,
CHIEF EXECUTIVE OFFICER
In accordance with the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to Form S-3 has been signed below by the following persons
in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Gary S. Jacob Chief Executive Officer and Director June 6, 2005
------------------- (Principal Executive Officer)
Gary S. Jacob
* Vice President, Finance June 6, 2005
------------------- (Principal Financial and Accounting Officer)
Bernard Denoyer
* Chairman of the Board June 6, 2005
-------------------
Gabriele M. Cerrone
Director __, 2005
-------------------
Edwin Snape
* Director June 6, 2005
-------------------
Christoph Bruening
* Director June 6, 2005
-------------------
John P. Brancaccio
* Director June 6, 2005
-------------------
Stephen Carter
* Director June 6, 2005
-------------------
Randall K. Johnson
* By: /s/ Gary S. Jacob
---------------------
Gary S. Jacob
Attorney-in-Fact
II-3