e424b3
Filed pursuant to Rule 424 (b)(3)
Registration No. 333-144695
PROSPECTUS
13,825,065 Shares
Common Stock
This prospectus relates to the resale from time to time of up to 13,825,065 shares of our
outstanding common stock in the aggregate, including shares of our common stock issuable upon the
exercise of warrants, which were issued to the selling stockholders named in this prospectus and
which may be held from time to time by such stockholders and their donees, pledgees or successors.
Of the shares of common stock offered under this prospectus, 9,216,709 shares were issued in
connection with a private placement of our shares to institutional and other accredited investors
and 4,608,356 shares are issuable upon the exercise of warrants issued to the investors in the
private placement. We are not selling any securities under this prospectus and will not receive
any of the proceeds from the sale of shares by the selling stockholders, although we may receive
proceeds upon the exercise of the warrants.
The selling stockholders may sell the shares of common stock described in this prospectus from
time to time in a number of different ways and at varying prices determined at the time of sale or
at negotiated prices. We provide more information about how the selling stockholders may sell their
shares of common stock in the section entitled Plan of Distribution on page 26. We will not be
paying any underwriting discounts or commissions in this offering.
The common stock is traded
on the Nasdaq Global Market under the symbol MITI. On
August 2,
2007, the reported closing price of the common stock was $2.35 per share.
An investment in the shares offered hereby involves a high degree of risk. Before
investing in our common stock, we recommend that you carefully read this entire prospectus,
including the Risk Factors section beginning on page 4, our annual report on Form 10-K for the
year ended December 31, 2006 and the other documents we file with the Securities and Exchange
Commission from time to time.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus
is August 2, 2007.
TABLE OF CONTENTS
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PROSPECTUS SUMMARY
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1 |
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RISK FACTORS
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4 |
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FORWARD-LOOKING STATEMENTS
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20 |
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USE OF PROCEEDS
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RECENT DEVELOPMENTS
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22 |
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SELLING STOCKHOLDERS
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22 |
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PLAN OF DISTRIBUTION
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26 |
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LEGAL MATTERS
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27 |
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EXPERTS
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27 |
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WHERE YOU CAN FIND MORE INFORMATION
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27 |
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the Securities and
Exchange Commission (the SEC). The prospectus relates to 13,825,065 shares of our common stock,
including 4,608,356 shares of our common stock issuable upon the exercise of warrants, which the
selling stockholders named in this prospectus may sell from time to time. We will not receive any
of the proceeds from these sales, except that upon any exercise of the warrants by payment of cash,
we will receive the exercise price of the warrants. We have agreed to pay the expenses incurred in
registering these shares, including legal and accounting fees.
You should rely only on the information contained or incorporated by reference in this
prospectus. We have not, and the selling stockholders have not, authorized anyone to provide you
with information different from that contained in this prospectus. The selling stockholders are
offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where
it is lawful to do so. The selling shareholders should not make an offer of these shares in any
state where the offer is not permitted. Brokers or dealers should confirm the existence of an
exemption from registration or effect a registration in connection with any offer and sale of these
shares.
The information in this prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or any sale of our common stock.
You should read this prospectus together with the additional information described under the
heading Where You Can Find More Information.
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere or incorporated by reference into this
prospectus. Because it is a summary, it does not contain all of the information that you should
consider before investing in our securities. You should read this entire prospectus carefully,
including the section entitled Risk Factors and the documents that we incorporate by reference
into this prospectus, before making an investment decision.
MICROMET, INC.
We are a biopharmaceutical company focusing on the development of novel, proprietary
antibody-based products for cancer, inflammatory and autoimmune diseases. Three of our product
candidates are currently in clinical trials, while the remainder of
our product pipeline is in preclinical
development. MT103, also known as MEDI-538, is the first clinical stage antibody product candidate
based on our proprietary BiTE® antibody product development platform and is being evaluated in a
phase 1 clinical trial for the treatment of patients with non-Hodgkins lymphoma. The BiTE antibody
product development platform is based on a unique, antibody-based class of drug candidates that
leverages the cytotoxic potential of T cells, in the treatment of
cancer. T cells are widely recognized as some of the most powerful
killer cells of the human immune system. We are developing MT103 in collaboration with MedImmune,
Inc. Our second clinical stage product candidate is adecatumumab, also known as MT201, a
recombinant human monoclonal antibody which targets EpCAM-expressing tumors. Adecatumumab has
completed two phase 2a clinical trials, one in patients with breast cancer and the other in
patients with prostate cancer. In addition, a phase 1b trial evaluating the safety and tolerability
of adecatumumab in combination with docetaxel is currently ongoing in patients with metastatic
breast cancer. We are developing adecatumumab in collaboration with Merck Serono. Our product candidate D93, also known as TRC093, a first-in-class humanized
monoclonal antibody that inhibits angiogenesis and tumor cell growth
by binding cleaved collagen is in phase 1 clinical trials. This product candidate is being developed by TRACON Pharmaceuticals, Inc. for treatment of patients with cancer and Age-Related Macular Degeneration (AMD) pursuant to a license agreement under which we have granted
TRACON the worldwide rights to develop and commercialize D93/TRC093. For purposes of this
prospectus, we have included in the term collaborator our licensees, such as TRACON, in addition
to the counterparties to our collaboration agreements. In addition, we have established a
collaboration with Nycomed A/S for the development and commercialization of MT203, our proprietary
human antibody neutralizing the activity of granulocyte macrophage colony stimulating factor
(GM-CSF), which has potential applications in the treatment of inflammatory and autoimmune
diseases. Further, with our BiTE antibody product development platform, we believe that we have a
strong proprietary technology platform that we have used and will continue to use to generate
additional antibody-based product candidates for our own product pipeline.
Our goal is to develop products for the treatment of cancer and inflammatory and autoimmune
diseases that address significant unmet medical needs. We believe that our novel antibody
technologies, antibody product candidates and antibody product development expertise in these
fields will continue to enable us to identify and develop promising new product opportunities for
these critical markets. To date, we have incurred significant expenses and have not achieved any
product revenues from sales of our product candidates.
Each of our programs will require many years and significant costs to advance through
development. Typically it takes many years from the initial identification of a lead compound to
the completion of pre-clinical and clinical trials, before applying for marketing approval from the
United States Food and Drug Administration, or FDA, the European Medicines Agency, or EMEA, or
other equivalent international regulatory agencies. The risk that a program has to be terminated,
in part or in full, for safety reasons, or lack of adequate efficacy is very high. In particular,
we cannot predict which, if any, of our potential product candidates will be successfully developed
or approved for marketing, nor can we predict the time and cost to complete development.
As we obtain results from pre-clinical studies or clinical trials, we may elect not to
initiate or to discontinue clinical trials for certain product candidates for safety, efficacy or
commercial reasons. We may also elect to discontinue development of one or more product candidates
in order to focus our resources on more promising product candidates. Our business strategy
includes entering into collaborative agreements with third parties for the development and
commercialization of our product candidates. Depending on the structure of such collaborative
agreements, a third party may be granted control over the clinical trial process for one of our
product candidates. In such a situation, the third party, rather than us, may control development
and commercialization decisions for the respective product candidate. Consistent with our business
model, we may enter into additional collaboration agreements in the future. We cannot predict the
terms of such agreements or their potential impact on our capital requirements. Our inability to
complete our research and development projects in a timely manner, or our failure to enter into new
collaborative agreements, when appropriate, could significantly increase our capital requirements
and affect our liquidity.
1.
In May 2006, CancerVax Corporation completed a merger with Micromet AG, a privately-held
German company, pursuant to which CancerVaxs wholly-owned subsidiary, Carlsbad Acquisition
Corporation, merged with and into Micromet Holdings, Inc., a newly created parent corporation of
Micromet AG. Micromet Holdings became a wholly-owned subsidiary of CancerVax and was the surviving
corporation in the merger. CancerVax issued to Micromet AG stockholders and certain other security
holders shares of CancerVax common stock, and CancerVax assumed all of the stock options, stock
warrants and restricted stock of Micromet Holdings outstanding as of the closing of the merger,
such that the former Micromet AG stockholders, option holders, warrant holders and note holders
owned, as of the closing, approximately 67.5% of the combined company on a fully-diluted basis and
former CancerVax stockholders, option holders and warrant holders owned, as of the closing,
approximately 32.5% of the combined company on a fully-diluted basis. In connection with the
merger, CancerVax was renamed Micromet, Inc. and our NASDAQ Global Market ticker symbol was
changed to MITI.
Since our inception, we have financed our operations through private placements of preferred
stock, debt financing, government grants for research, license fees, milestone payments and
research-contribution revenues from our collaborations with pharmaceutical companies, and, more
recently, by accessing the capital resources of CancerVax through our 2006 merger with them and
subsequent private placements of common stock and associated warrants. We intend to continue to
seek funding through public or private financings in the future. If we are successful in raising
additional funds through the issuance of equity securities, stockholders may experience substantial
dilution, or the equity securities may have rights, preferences or privileges senior to existing
stockholders. If we are successful in raising additional funds through debt financings, these
financings may involve significant cash payment obligations and covenants that restrict our ability
to operate our business. There can be no assurance that we will be successful in raising additional
capital on acceptable terms, or at all. Based on our capital resources as of the date of this
prospectus, we believe that we have adequate resources to fund our operations into the second
quarter of 2009 at current spending levels, without considering any potential future milestone
payments that we may receive under current or future collaborations, any future capital raising
transactions or any drawdowns from our committed equity financing facility, or CEFF, with
Kingsbridge Capital Limited.
As described above, we have strategic collaborations with Merck Serono, MedImmune (which was
recently acquired by AstraZeneca plc) and Nycomed to develop therapeutic antibodies in cancer and
inflammatory and autoimmune diseases. We also have a license agreement with TRACON Pharmaceuticals
for the development and commercialization of one of our clinical stage product candidates and an
exclusive marketing agreement with Enzon, Inc. to market and license to third parties the
companies respective single-chain antibody patent estates. See Risk Factors for a discussion of
risks relating to our business and owning our capital stock.
We were incorporated in Delaware in 1998. Our principal executive offices are located at 6707
Democracy Boulevard, Suite 505, Bethesda, Maryland 20817, and our main telephone number is (240)
752-1420. Our Web site is located on the world wide web at http://www.micromet-inc.com. We do not
incorporate by reference into this prospectus the information on, or accessible through, our
website, and you should not consider it as part of this prospectus.
THE OFFERING
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Issuer
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Micromet, Inc. |
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Selling Stockholders
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Accredited investors who purchased shares of
our common stock and warrants in a private
placement in June 2007. |
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Securities offered
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13,825,065 shares of our common stock, which
includes 4,608,356 shares issuable to the
selling stockholders named in this prospectus
upon the exercise of the warrants. |
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Use of proceeds
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We will not receive any proceeds from sales of
the shares of common stock sold from time to
time under this prospectus by the selling
stockholders. Upon any exercise of the
warrants by payment of cash, however, we will
receive the exercise price of the warrants,
which will be used for general corporate
purposes. |
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2.
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Warrants
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Each warrant is exercisable for shares of our
common stock at an initial exercise price of
$3.09 per share, subject to adjustment upon
certain events. The warrants become
exercisable on December 19, 2007. Each of the
warrants will expire at 5:00 p.m., New York
City time, on December 19, 2012. |
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Trading of Warrants
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The common stock underlying the warrants is
being registered for resale hereunder.
Currently, there is no public market for the
warrants, and we do not expect that any such
market will develop. The warrants will not be
listed on any securities exchange or included
in any automated quotation system. |
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Risk Factors
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An investment in the common stock involves a
high degree of risk. See Risk Factors
beginning on page 4 for a discussion of
certain factors that you should consider when
evaluating an investment in the common stock. |
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NASDAQ Global Market symbol
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MITI |
3.
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider
the risk factors described below, and all other information contained in or incorporated by
reference in this prospectus, before deciding to invest in our common stock. If any of the
following risks actually occur, the market price of our common stock could decline, and you could
lose all or part of your investment. Additional risks not presently known to us or that we
currently believe are immaterial may also significantly impair our business operations and could
result in a complete loss of your investment.
Risks Relating to Our Financial Results, Financial Reporting and Need for Financing
We have a history of losses, we expect to incur substantial losses and negative operating cash
flows for the foreseeable future and we may never achieve profitability.
We have incurred losses from the inception of Micromet through March 31, 2007, and we
expect to incur substantial losses for the foreseeable future. We have no current sources of
material ongoing revenue, other than the reimbursement of development expenses and potential future
milestone payments from our current collaborators, MedImmune, Merck Serono, TRACON Pharmaceuticals
and Nycomed. We have not commercialized any products to date, either alone or with a third party
collaborator. If we are not able to commercialize any products, whether alone or with a
collaborator, we may not achieve profitability. Even if our collaboration agreements provide
funding for a portion of our research and development expenses for some of our programs, we expect
to spend significant capital to fund our internal research and development programs for the
foreseeable future. As a result, we will need to generate significant revenues in order to achieve
profitability. We cannot be certain whether or when this will occur because of the significant
uncertainties that affect our business. Our failure to become and remain profitable may depress the
market price of our common stock and could impair our ability to raise capital, expand our
business, diversify our product offerings or continue our operations.
We will require additional financing, which may be difficult to obtain and may dilute your
ownership interest in us. If we fail to obtain the capital necessary to fund our operations, we
will be unable to develop or commercialize our product candidates and our ability to operate as a
going concern may be adversely affected.
We will require substantial funds to continue our research and development programs and
our future capital requirements may vary from what we expect. There are factors, many of which are
outside our control, that may affect our future capital requirements and accelerate our need for
additional financing. Among the factors that may affect our future capital requirements and
accelerate our need for additional financing are:
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continued progress in our research and development programs, as well as the scope of these programs; |
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our ability to establish and maintain collaborative arrangements for the discovery, research or
development of product candidates; |
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the timing, receipt and amount of research funding and milestone, license, royalty and other
payments, if any, from collaborators; |
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the timing, receipt and amount of sales revenues and associated royalties to us, if any, from our
product candidates in the market; |
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our ability to sell shares of our common stock under our committed equity financing facility, or
CEFF, with Kingsbridge Capital Limited, or Kingsbridge; |
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the costs of preparing, filing, prosecuting, maintaining, defending and enforcing patent claims and
other patent-related costs, including litigation costs and technology license fees; |
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costs associated with litigation; and |
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competing technological and market developments. |
We filed a shelf registration statement, declared effective by the Securities and Exchange
Commission on December 9, 2004, under which we may raise up to $80 million through the sale of our
common stock. This shelf registration statement became inactive in March 2006, and we may decide to
activate it by filing a post-effective amendment in the future, although our ability to do so will
depend on our eligibility to use a shelf registration statement at such time, under applicable SEC
rules. We expect to seek additional funding through public or private financings or from new
collaborators with whom we enter into research or development
4.
collaborations with respect to programs that are not currently licensed. However, the market
for stock of companies in the biotechnology sector in general, and the market for our common stock
in particular, is highly volatile. Due to market conditions and the status of our product
development pipeline, additional funding may not be available to us on acceptable terms, or at all.
Having insufficient funds may require us to delay, scale back or eliminate some or all of our
research or development programs or to relinquish greater or all rights to product candidates at an
earlier stage of development or on less favorable terms than we would otherwise choose. Failure to
obtain adequate financing also may adversely affect our ability to operate as a going concern.
If we raise additional funds through the issuance of equity securities, our stockholders
may experience substantial dilution, or the equity securities may have rights, preferences or
privileges senior to those of existing stockholders. If we raise additional funds through debt
financings, these financings may involve significant cash payment obligations and covenants that
restrict our ability to operate our business and make distributions to our stockholders. We also
could elect to seek funds through arrangements with collaborators or others that may require us to
relinquish rights to certain technologies, product candidates or products.
Our committed equity financing facility with Kingsbridge may not be available to us if we
elect to make a draw down, may require us to make additional blackout or other payments to
Kingsbridge and may result in dilution to our stockholders.
In August 2006, we entered into a CEFF with Kingsbridge. The CEFF entitles us to sell and
obligates Kingsbridge to purchase, from time to time until September 2009, shares of our common
stock for cash consideration up to an aggregate of $25 million, subject to certain conditions and
restrictions. Kingsbridge will not be obligated to purchase shares under the CEFF unless certain
conditions are met, which include:
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a minimum price for our common stock that is not less than 85% of
the closing price of the day immediately preceding the applicable
eight-day pricing period, but in no event less than $2.00 per
share; |
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the accuracy of representations and warranties made to Kingsbridge; |
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our compliance with all applicable laws which, if we failed to so
comply, would have a Material Adverse Effect (as that term is
defined in the purchase agreement with Kingsbridge); and |
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the effectiveness of a registration statement registering for
resale the shares of common stock to be issued in connection with
the CEFF. |
Kingsbridge is permitted to terminate the CEFF by providing written notice to us upon the
occurrence of certain events. If we are unable to access funds through the CEFF, or if Kingsbridge
terminates the CEFF, we may be unable to access capital from other sources on favorable terms, or
at all.
We are entitled, in certain circumstances, to deliver a blackout notice to Kingsbridge to
suspend the use of the resale registration statement and prohibit Kingsbridge from selling shares
under the resale registration statement for a certain period of time. If we deliver a blackout
notice during the fifteen trading days following our delivery of shares to Kingsbridge in
connection with any draw down, then we may be required to make a payment to Kingsbridge, or issue
to Kingsbridge additional shares in lieu of this payment, calculated on the basis of the number of
shares purchased by Kingsbridge in the most recent draw down and held by Kingsbridge immediately
prior to the blackout period and the decline in the market price, if any, of our common stock
during the blackout period. If the trading price of our common stock declines during a blackout
period, this blackout payment could be significant.
In addition, if we fail to maintain the effectiveness of the resale registration
statement or related prospectus in circumstances not permitted by our agreement with Kingsbridge,
we may be required to make a payment to Kingsbridge, calculated on the basis of the number of
shares held by Kingsbridge during the period that the registration statement or prospectus is not
effective, multiplied by the decline in market price, if any, of our common stock during the
ineffective period. If the trading price of our common stock declines during a period in which the
resale registration statement or related prospectus is not effective, this payment could be
significant.
Should we sell shares to Kingsbridge under the CEFF or issue shares in lieu of a blackout
payment, it will have a dilutive effect on the holdings of our current stockholders and may result
in downward pressure on the price of our common stock. If we draw down under the CEFF, we will
issue shares to Kingsbridge at a discount of 6% to 14% from the volume weighted average price of
our common stock. If we draw down amounts under the CEFF when our share price is decreasing, we
will need to issue more shares to raise the same amount than if our stock price was higher.
Issuances in the face of a declining share price will have an even greater dilutive effect than if
our share price were stable or increasing and may further decrease our share price. Moreover, the
number of shares that we will be able to issue to Kingsbridge in a particular draw down may be
materially reduced if our stock price declines significantly during the applicable eight-day
pricing period.
5.
Our quarterly operating results and stock price may fluctuate significantly.
We expect our results of operations to be subject to quarterly fluctuations. The level of our
revenues, if any, and results of operations at any given time, will be based primarily on the
following factors:
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the status of development of our product candidates; |
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the time at which we enter into research and license
agreements with strategic collaborators that provide for
payments to us, and the timing and accounting treatment of
payments to us, if any, under those agreements; |
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whether or not we achieve specified research, development or
commercialization milestones under any agreement that we enter into
with collaborators and the timely payment by commercial
collaborators of any amounts payable to us; |
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the addition or termination of research programs or funding support; |
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the timing of milestone payments under license agreements,
repayments of outstanding amounts under loan agreements, and other
payments that we may be required to make to others; and |
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variations in the level of research and development expenses
related to our product candidates or potential product candidates
during any given period. |
These factors may cause the price of our stock to fluctuate substantially. We believe that
quarterly comparisons of our financial results are not necessarily meaningful and should not be
relied upon as an indication of our future performance.
If the estimates we make and the assumptions on which we rely in preparing our financial
statements prove inaccurate, our actual results may vary significantly.
Our financial statements have been prepared in accordance with generally accepted
accounting principles in the United States. The preparation of these financial statements requires
us to make estimates and judgments that affect the reported amounts of our assets, liabilities,
revenues and expenses, the amounts of charges taken by us and related disclosure. We base our
estimates on historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. We cannot assure you that our estimates, or the assumptions
underlying them, will be correct. Accordingly, our actual financial results may vary significantly
from the estimates contained in our financial statements.
Changes in, or interpretations of, accounting rules and regulations could result in
unfavorable accounting charges or require us to change our compensation policies.
Accounting methods and policies for biopharmaceutical companies, including policies
governing revenue recognition, expenses, accounting for stock options and in-process research and
development costs are subject periodically to further review, interpretation and guidance from
relevant accounting authorities, including the SEC. Changes to, or interpretations of, accounting
methods or policies in the future may require us to reclassify, restate or otherwise change or
revise our financial statements, including those contained in this filing.
Our operating and financial flexibility, including our ability to borrow money, is limited by
certain debt arrangements.
Our loan agreements contain certain customary events of default, which generally include,
among others, non-payment of principal and interest, violation of covenants, cross defaults, the
occurrence of a material adverse change in our ability to satisfy our obligations under our loan
agreements or with respect to one of our lenders security interest in our assets and in the event
we are involved in certain insolvency proceedings. Upon the occurrence of an event of default, our
lenders may be entitled to, among other things, accelerate all of our obligations and sell our
assets to satisfy our obligations under our loan agreements. In addition, in an event of default,
our outstanding obligations may be subject to increased rates of interest.
6.
In addition, we may incur additional indebtedness from time to time to finance
acquisitions, investments or strategic alliances or capital expenditures or for other purposes. Our
level of indebtedness could have negative consequences for us, including the following:
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our ability to obtain additional financing, if necessary,
for working capital, capital expenditures, acquisitions or
other purposes may be impaired or such financing may not
be available on favorable terms; |
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payments on our indebtedness will reduce the funds that
would otherwise be available for our operations and future
business opportunities; |
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we may be more highly leveraged than our competitors,
which may place us at a competitive disadvantage; and |
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our debt level may reduce our flexibility in responding to
changing business and economic conditions. |
We have determined and further received an opinion from our independent registered public
accounting firm in connection with our year-end audit for 2006 that our system of internal control
over financial reporting does not meet the requirements of Section 404 of the Sarbanes-Oxley Act of
2002. As a result, investors could lose confidence in the reliability of our internal control over
financial reporting, which could have a material adverse effect on our stock price.
As a publicly traded company, we are required to comply with the Sarbanes-Oxley Act of
2002 and the related rules and regulations of the SEC, including Section 404 of the Sarbanes-Oxley
Act of 2002. As a result of the merger between CancerVax Corporation and Micromet AG, we are in the
process of upgrading the existing, and implementing additional, procedures and controls to
incorporate the operations of Micromet AG, which had been a private German company prior to the
merger. The process of updating the procedures and controls is requiring significant time and
expense. The integration of the two companies finance and accounting systems, procedures and
controls, and the implementation of procedures and controls at Micromet AG are more time-consuming
and expensive than we previously anticipated.
Our internal control system is designed to provide reasonable assurance to our management
and board of directors regarding the preparation and fair presentation of published financial
statements. In connection with the audit of our consolidated financial statements for the year
ended December 31, 2006, our independent registered public accounting firm provided us with an
unqualified opinion on our consolidated financial statements, but it identified material weaknesses
in our internal control over financial reporting based on criteria established in Internal Control
Integrated Framework, issued by the Committee of Sponsoring Organizations (COSO) of the Treadway
Commission. These material weaknesses relate to certain of our estimation and accrual processes,
procedures relating to analysis and recording of revenue transactions with unusual terms, and an
insufficient level of management review due to lack of resources. These weaknesses resulted, in
part, from our inability to sufficiently upgrade our existing procedures and controls and to
implement new procedures and controls to integrate the operations of Micromet AG prior to December
31, 2006. Because of these material weaknesses in our internal control over financial reporting,
there is heightened risk that a material misstatement of our annual or quarterly financial
statements will not be prevented or detected.
We are in the process of expanding our internal resources and implementing additional
procedures in order to remediate these material weaknesses in our internal control over financial
reporting; however, we cannot guarantee that these efforts will be successful. If we do not
adequately remedy these material weaknesses, and if we fail to maintain proper and effective
internal control over financial reporting in future periods, our ability to provide timely and
reliable financial results could suffer, and investors could lose confidence in our reported
financial information, which may have a material adverse effect on our stock price.
Risks Relating to Our Common Stock
Substantial sales of shares may adversely impact the market price of our common stock and our
ability to issue and sell shares in the future.
Substantially all of the outstanding shares of our common stock are, or upon the effectiveness
of the registration statement of which this prospectus is a part, will be, eligible for resale in
the public market. A significant portion of these shares is held by a small number of
stockholders. We have also registered shares of our common stock that we may issue under our equity
incentive compensation plans and our employee stock purchase plan. These shares generally can be
freely sold in the public market upon issuance. If our stockholders sell substantial amounts of our
common stock, the market price of our common stock may decline, which might make it more difficult
for us to sell equity or equity-related securities in the future at a time and price that we deem
appropriate. We are unable to predict the effect that sales of our common stock may have on the
prevailing market price of our common stock.
7.
Our stock price may be volatile, and you may lose all or a substantial part of your
investment.
The market price for our common stock is volatile and may fluctuate significantly in
response to a number of factors, a number of which we cannot control. Among the factors that could
cause material fluctuations in the market price for our common stock are:
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our ability to upgrade and implement our disclosure controls and our internal control
over financial reporting; |
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our ability to successfully raise capital to fund our continued operations; |
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our ability to successfully develop our product candidates within acceptable timeframes; |
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changes in the regulatory status of our product candidates; |
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changes in significant contracts, new technologies, acquisitions, commercial
relationships, joint ventures or capital commitments; |
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the execution of new contracts or termination of existing contracts related to our
clinical or preclinical product candidates or our BiTE technology platform; |
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announcements of the invalidity of, or litigation relating to, our key intellectual
property; |
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announcements of the achievement of milestones in our agreements with collaborators or
the receipt of payments under those agreements; |
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announcements of the results of clinical trials by us or by companies with product
candidates in the same therapeutic category as our product candidates; |
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events affecting our collaborators; |
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fluctuations in stock market prices and trading volumes of similar companies; |
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announcements of new products or technologies, clinical trial results, commercial
relationships or other events by us, our collaborators or our competitors; |
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our ability to successfully complete sublicensing arrangements with respect to our
product candidates; |
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variations in our quarterly operating results; |
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changes in securities analysts estimates of our financial performance or product
development timelines; |
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changes in accounting principles; |
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sales of large blocks of our common stock, including sales by our executive officers,
directors and significant stockholders; |
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additions or departures of key personnel; and |
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discussions of Micromet or our stock price by the financial and scientific press and
online investor communities such as chat rooms. |
If our officers and directors choose to act together, they can significantly influence our
management and operations in a manner that may be in their best interests and not in the best
interests of other stockholders.
Our officers and directors, together with their affiliates, collectively own an aggregate of
approximately 31% of our outstanding common stock, and, as a result, may significantly influence
all matters requiring approval by our stockholders, including the election of directors and the
approval of mergers or other business combination transactions. The interests of this group of
stockholders may not always coincide with our interests or the interests of other stockholders, and
this group may act in a manner that advances their best interests and not necessarily those of
other stockholders.
Our stockholder rights plan, anti-takeover provisions in our organizational documents and
Delaware law may discourage or prevent a change in control, even if an acquisition would be
beneficial to our stockholders, which could affect our stock price adversely and prevent attempts by our stockholders to replace or remove our current management.
8.
Our stockholder rights plan and provisions contained in our amended and restated
certificate of incorporation and amended and restated bylaws may delay or prevent a change in
control, discourage bids at a premium over the market price of our
common stock and adversely affect the market price of our common stock and the voting and other rights of the holders of our
common stock. The provisions in our amended and restated certificate of incorporation and amended
and restated bylaws include:
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dividing our board of directors into three classes serving staggered three-year terms; |
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prohibiting our stockholders from calling a special meeting of stockholders; |
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permitting the issuance of additional shares of our common stock or preferred stock
without stockholder approval; |
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prohibiting our stockholders from making certain changes to our amended and restated
certificate of incorporation or amended and restated bylaws except with 66 2/3%
stockholder approval; and |
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requiring advance notice for raising matters of business or making nominations at
stockholders meetings. |
We are also subject to provisions of the Delaware corporation law that, in general, prohibit
any business combination with a beneficial owner of 15% or more of our common stock for five years
unless the holders acquisition of our stock was approved in advance by our board of directors.
We may become involved in securities class action litigation that could divert managements
attention and harm our business and our insurance coverage may not be sufficient to cover all costs
and damages.
The stock market has from time to time experienced significant price and volume
fluctuations that have affected the market prices for the common stock of pharmaceutical and
biotechnology companies. These broad market fluctuations may cause the market price of our common
stock to decline. In the past, following periods of volatility in the market price of a particular
companys securities, securities class action litigation has often been brought against that
company. We may become involved in this type of litigation in the future. Litigation often is
expensive and diverts managements attention and resources, which could adversely affect our
business.
Risks Relating to Our Collaborations and Clinical Programs
We are dependent on collaborators for the development and commercialization of many of our
product candidates. If we lose any of these collaborators, or if they fail or incur delays in the
development or commercialization of our current and future product candidates, our operating
results would suffer.
The success of our strategy for development and commercialization of our product
candidates depends upon our ability to form and maintain productive strategic collaborations and
license arrangements. We currently have strategic collaborations or
license arrangements with MedImmune, Merck Serono, TRACON Pharmaceuticals and Nycomed. We
expect to enter into additional collaborations and license arrangements in the future. Our existing
and any future collaborations and licensed programs may not be scientifically or commercially
successful. The risks that we face in connection with these collaborations and licensed programs
include the following:
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Each of our collaborators has significant discretion in
determining the efforts and resources that it will apply
to the collaboration. The timing and amount of any future
royalty and milestone revenue that we may receive under
such collaborative and licensing arrangements will depend
on, among other things, such collaborators efforts and
allocation of resources. |
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All of our strategic collaboration and license agreements
are for fixed terms and are subject to termination under
various circumstances, including, in some cases, on short
notice without cause. If any of our collaborative partners
were to terminate its agreement with us, we may attempt to
identify and enter into an agreement with a new
collaborator with respect to the product candidate covered
by the terminated agreement. If we are not able to do so,
we may not have the funds or capability to undertake the
development, manufacturing and commercialization of that
product candidate, which could result in a discontinuation
or delay of the development of that product candidate. |
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Our collaborators may develop and commercialize, either
alone or with others, products and services that are
similar to or competitive with the product candidates and
services that are the subject of their collaborations with
us or programs licensed from us. |
9.
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Our collaborators may discontinue the development of our
product candidates in specific indications, for example as
a result of their assessment of the results obtained in
clinical trials, or fail to initiate the development in
indications that have a significant commercial potential. |
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Pharmaceutical and biotechnology companies from time to
time re-evaluate their research and development
priorities, including in connection with mergers and
consolidations, which have been common in recent years in
these industries. The ability of our partnered product
candidates to reach their potential could be limited if,
as a result of such changes, our collaborators decrease or
fail to increase spending related to such product
candidates, or decide to discontinue the development of
our product candidates and terminate their collaboration
or license agreement with us. |
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In June 2007, our collaborator MedImmune was acquired by
AstraZeneca plc. If MedImmune or AstraZeneca were to
perform a review of their development programs and
re-evaluate their priorities in the development of their
product candidates, this could result in a delay in the
development of and the commercialization of our product
candidate MT103, the CEA BiTE molecule, or the EphA2 BiTE
molecule that in each case we are developing in
collaboration with MedImmune, or in a termination of one
or both of the collaboration agreements we have with
MedImmune. In the event of such a termination, we may not
be able to identify and enter into a collaboration
agreement for our MedImmune- partnered product candidates
with another pharmaceutical company on terms favorable to
us or at all, and we may not have sufficient financial
resources to continue the development program for our
MedImmune- partnered product candidates on our own. As a
result, we may incur delays in the development for our
MedImmune-partnered product candidates following any
potential termination of the collaboration agreement with
MedImmune, or we may need to reallocate financial
resources that may cause delays in other development
programs for our other product candidates. |
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Similarly, in January 2007, our collaborator Serono
announced that it was acquired by Merck KGaA to form Merck Serono.
If Merck Serono re-evaluates its priorities in the
development of its product candidates, this could result
in a delay in the development and the launch of
adecatumumab (if successfully developed and approved for
commercial sale) or termination of the collaboration
agreement with us. We may not be able to identify and
enter into a collaboration agreement for adecatumumab with
another pharmaceutical company, and we may not have
sufficient financial resources to continue the development
program on our own. As a result, we could be required to
delay or abandon the development of adecatumumab following
any termination of the collaboration agreement with Merck
Serono. |
We may not be successful in establishing additional strategic collaborations, which could adversely
affect our ability to develop and commercialize product candidates.
As an integral part of our ongoing research and development efforts, we periodically
review opportunities to establish new collaborations for development and commercialization of new
BiTE molecules or existing product candidates in our development pipeline. We face significant
competition in seeking appropriate collaborators and the negotiation process is time-consuming and
complex. We may not be successful in our efforts to establish additional collaborations or other
alternative arrangements. Even if we are successful in our efforts to establish a collaboration,
the terms of the agreement may not be favorable to us. Finally, such collaborations or other
arrangements may not result in successful products and associated revenue from milestone payments,
royalties or profit share payments.
If the combination of adecatumumab (MT201) with cytotoxics, such as docetaxel, is not
tolerable or safe, if higher serum levels of adecatumumab cannot be administered safely, or if
sufficient anti-tumor activity cannot be shown, we and our collaborator Merck Serono may decide to
abandon all or part of the development program, and we could experience a material adverse impact
on our results of operations.
We previously have reported that the phase 2 clinical trials of adecatumumab did not reach
their respective primary endpoint in patients with metastatic breast cancer (clinical benefit rate
at week 24) and in patients with prostate cancer (mean change in prostate specific antigen,
compared to placebo control). We have also reported that we are continuing the development of
adecatumumab in a clinical trial in combination with docetaxel with escalating doses of
adecatumumab to investigate the tolerability and the safety of this combination. We have also
reported that we, in collaboration with Merck Serono, are planning to start a new phase 1
monotherapy study for the treatment of patients with solid tumors estimated to begin in 2007. If
the combination of adecatumumab with docetaxel
10.
proves not to be tolerable or safe or if no higher
serum levels of adecatumumab compared to previous clinical trials can be administered safely or if
sufficient anti-tumor activity cannot be shown, we and our collaborator Merck Serono may decide to
abandon all or part of the development program of adecatumumab and as a result we may experience a
material adverse impact on our results of operations.
We previously terminated three phase 1 trials involving short-term infusion regimens of MT103 due
to adverse side effects and a lack of perceived tumor response, and there can be no assurance that
our current continuous infusion phase 1 clinical trial of MT103 will produce a different outcome.
In April 2004, we initiated a phase 1, dose finding clinical trial designed to evaluate the
safety and tolerability of a continuous intravenous infusion of MT103 over 4-8 weeks at different
dose levels in patients with relapsed non-Hodgkins lymphoma. We previously terminated three other
phase 1 clinical trials for MT103, which involved a short-term infusion, as opposed to a continuous
infusion dosing regimen of MT103, due to adverse side effects and the lack of observed tumor responses. We have redesigned the
dosing regimen for our ongoing phase 1 clinical trial and, based upon the preliminary clinical
data, we currently are seeing a considerably more favorable safety profile in response to the new
continuous infusion dosing regimen. We have also seen objective tumor responses at the 15
µg/m2
per day dose level with the continuous infusion regimen and are
continuing the dose escalation in accordance with the clinical trial
protocal. While this preliminary
data suggest that MT103 has anti-tumor activity, there can be no assurance that we will not
encounter unacceptable adverse events during the continued dose escalation of our ongoing,
continuous-infusion phase 1 clinical trial or that the preliminary suggestion of anti-tumor
activity will be confirmed during the ongoing or any future study.
Changes in the laws or regulations of the United States or Cuba related to the conduct of our
business with CIMAB may adversely affect our ability to sublicense or otherwise transfer our rights
to SAI-EGF and our two other product candidates that we have licensed from that company.
The United States government has maintained an embargo against Cuba for more than 40 years.
The embargo is administered by the Office of Foreign Assets Control, or OFAC, of the U.S.
Department of Treasury. Without a license from OFAC, U.S. individuals and companies may not engage
in any transaction in which Cuba or Cubans have an interest. In order to enter into and carry out
our licensing agreements with CIMAB S.A., a Cuban company, we have obtained from OFAC a license
authorizing us to carry out all transactions set forth in the license agreements that we have
entered into with CIMAB for the development, testing, licensing and commercialization of our
product candidate SAI-EGF, and with CIMAB and its affiliate YM BioSciences, Inc., a Canadian
company, for our two other product candidates that target the EGF receptor signaling pathway. In
the absence of such a license from OFAC, the execution of and our performance under these
agreements could have exposed us to legal and criminal liability. At any time, there may occur for
reasons beyond our control a change in United States or Cuban law, or in the regulatory environment
in the U.S. or Cuba, or a shift in the political attitudes of either the U.S. or Cuban governments,
that could result in the suspension or revocation of our OFAC license or in our inability to carry
out part or all of the licensing agreements with CIMAB. There can be no assurance that the U.S. or
Cuban governments will not modify existing law or establish new laws or regulations that may
adversely affect our ability to develop, test, license and commercialize these product candidates.
Our OFAC license may be revoked or amended at anytime in the future, or the U.S. or Cuban
governments may restrict our ability to carry out all or part of our respective duties under the
licensing agreements between us, CIMAB and YM BioSciences. Similarly, any such actions may restrict
CIMABs ability to carry out all or part of its licensing agreements with us. In addition, we
cannot be sure that the FDA, EMEA or other regulatory authorities will accept data from the
clinical trials of these product candidates that were conducted in Cuba as the basis for our
applications to conduct additional clinical trials, or as part of our application to seek marketing
authorizations for such product candidates.
In 1996, a significant change to the United States embargo against Cuba resulted from
congressional passage of the Cuban Liberty and Democratic Solidarity Act, also known as the
Helms-Burton Bill. That law authorizes private lawsuits for damages against anyone who traffics in
property confiscated, without compensation, by the government of Cuba from persons who at the time
were, or have since become, nationals of the United States. We do not own any property in Cuba and
do not believe that any of CIMABs properties or any of the scientific centers that are or have
been involved in the development of the technology that we have licensed from CIMAB were
confiscated by the government of Cuba from persons who at the time were, or who have since become,
nationals of the U.S. However, there can be no assurance that our understanding in this regard is
correct. We do not intend to traffic in confiscated property, and we have included provisions in
our licensing agreements to preclude the use of such property in association with the performance
of CIMABs obligations under those agreements, although we cannot ensure that CIMAB or other third
parties will comply with these provisions.
11.
As part of our interactions with CIMAB, we are subject to the U.S. Commerce Departments
export administration regulations that govern the transfer of technology to foreign nationals.
Specifically, we or our sublicensees, if any, will require a license from the Commerce Departments
Bureau of Industry and Security, or BIS, in order to export or otherwise transfer to CIMAB any
information that constitutes technology under the definitions of the Export Administration
Regulations, or EAR, administered by BIS. The export licensing process may take months to be
completed, and the technology transfer in question may not take place unless and until a license is
granted by the Commerce Department. Due to the unique status of the Republic of Cuba, technology
that might otherwise be transferable to a foreign national without a Commerce Department license
requires a license for export or transfer to a Cuban national. If we or our sublicensees fail to
comply with the export administration regulations, we may be subject to both civil and criminal
penalties. There can be no guarantee that any license application will be approved by BIS or that a
license, once issued, will not be revoked, modified, suspended or otherwise restricted for reasons
beyond our control due to a change in U.S.-Cuba policy or for other reasons.
Risks Relating to Our Operations, Business Strategy, and the Life Sciences Industry
We face substantial competition, which may result in our competitors discovering, developing
or commercializing products before or more successfully than we do.
Our product candidates face competition with existing and new products being developed by
biotechnology and pharmaceutical companies, as well as universities and other research
institutions. For example, research in the fields of antibody-based therapeutics for the treatment
of cancer, and autoimmune and inflammatory diseases, is highly competitive. A number of entities
are seeking to identify and patent antibodies, potentially active proteins and other potentially
active compounds without specific knowledge of their therapeutic functions. Our competitors may
discover, characterize and develop important inducing molecules or genes in advance of us.
Many of our competitors have substantially greater capital resources, research and development
staffs and facilities than we have. Efforts by other biotechnology and pharmaceutical companies
could render our programs or product candidates uneconomical or result in therapies that are
superior to those that we are developing alone or with a collaborator. We and our collaborators
face competition from companies that may be more experienced in product development and
commercialization, obtaining regulatory approvals and product manufacturing. As a result, they may
develop competing products more rapidly and at a lower cost, or may discover, develop and
commercialize products, which render our product candidates non-competitive or obsolete. We expect
competition to intensify in antibody research as technical advances in the field are made and
become more widely known.
We may not be successful in our efforts to expand our portfolio of product candidates.
A key element of our strategy is to discover, develop and commercialize a portfolio of
new drugs. We are seeking to do so through our internal research programs and in-licensing
activities. A significant portion of the research that we are conducting involves new and unproven
technologies. Research programs to identify new disease targets and product candidates require
substantial technical, financial and human resources regardless of whether or not any suitable
candidates are ultimately identified. Our research programs may initially show promise in
identifying potential product candidates, yet fail to yield product candidates suitable for
clinical development. If we are unable to discover suitable potential product candidates, develop
additional delivery technologies through internal research programs or in-license suitable product
candidates or delivery technologies on acceptable business terms, our business prospects will
suffer.
The product candidates in our pipeline are in early stages of development and our efforts to
develop and commercialize these product candidates are subject to a high risk of delay and failure.
If we fail to successfully develop our product candidates, our ability to generate revenues will be
substantially impaired.
The process of successfully developing product candidates for the treatment of human
diseases is very time-consuming, expensive and unpredictable and there is a high rate of failure
for product candidates in preclinical development and in clinical trials. The preclinical studies
and clinical trials may produce negative, inconsistent or inconclusive results, and the results
from early clinical trials may not be statistically significant or predictive of results that will
be obtained from expanded, advanced clinical trials. Further, we or our collaborators may decide,
or regulators may require us, to conduct preclinical studies or clinical trials in addition to
those planned by us or our collaborators, which may be expensive or could delay the time to market
for our product candidates. In addition, we do not know whether the clinical trials will result in
marketable products.
12.
All of our product candidates are in early stages of clinical and pre-clinical
development, so we will require substantial additional financial resources, as well as research,
product development and clinical development capabilities, to pursue the development of these product candidates, and we may never develop an approvable or
commercially viable product.
We do not know whether our planned preclinical development or clinical trials for our
product candidates will begin on time or be completed on schedule, if at all. The timing and
completion of clinical trials of our product candidates depend on, among other factors, the number
of patients that will be required to enroll in the clinical trials, the inclusion and exclusion
criteria used for selecting patients for a particular clinical trial, and the rate at which those
patients are enrolled. Any increase in the required number of patients, tightening of selection
criteria, or decrease in recruitment rates or difficulties retaining study participants may result
in increased costs, delays in the development of the product candidate, or both.
Since our product candidates may have different efficacy profiles in certain clinical
indications, sub-indications or patient profiles, an election by us or our collaborators to focus
on a particular indication, sub-indication or patient profile may result in a failure to capitalize
on other potentially profitable applications of our product candidates.
Our product candidates may not be effective in treating any of our targeted diseases or
may prove to have undesirable or unintended side effects, toxicities or other characteristics that
may prevent or limit their commercial use. Institutional review boards or regulators, including the
FDA and the EMEA, may hold, suspend or terminate our clinical research or the clinical trials of
our product candidates for various reasons, including non-compliance with regulatory requirements
or if, in their opinion, the participating subjects are being exposed to unacceptable health risks,
or if additional information may be required for the regulatory authority to assess the proposed
development activities. Further, regulators may not approve study protocols at all or in a
timeframe anticipated by us if they believe that the study design or the mechanism of action of our
product candidates poses an unacceptable health risk to study participants.
We have limited financial and managerial resources. These limitations require us to focus
on a select group of product candidates in specific therapeutic areas and to forego the exploration
of other product opportunities. While our technologies may permit us to work in multiple areas,
resource commitments may require trade-offs resulting in delays in the development of certain
programs or research areas, which may place us at a competitive disadvantage. Our decisions as to
resource allocation may not lead to the development of viable commercial products and may divert
resources away from other market opportunities, which would otherwise have ultimately proved to be
more profitable.
We rely heavily on third parties for the conduct of preclinical and clinical studies of our product
candidates, and we may not be able to control the proper performance of the studies or trials.
In order to obtain regulatory approval for the commercial sale of our product candidates,
we and our collaborators are required to complete extensive preclinical
studies as well as clinical trials in humans to demonstrate to the FDA, EMEA and other
regulatory authorities that our product candidates are safe and effective. We have limited
experience and internal resources for conducting certain preclinical studies and clinical trials
and rely primarily on collaborators and contract research organizations for the performance and
management of certain preclinical studies and clinical trials of our product candidates. If our
collaborators or contractors fail to properly perform their contractual or regulatory obligations
with respect to conducting or overseeing the performance of our preclinical studies or clinical
trials, the completion of these studies or trials may be delayed, or the results may not be useable
and the studies or trials may have to be repeated. Any of these events could delay or create
additional costs in the development of our product candidates and could adversely affect our and
our collaborators ability to market a product after marketing approvals have been obtained.
Even if we complete the lengthy, complex and expensive development process, there is no
assurance that we or our collaborators will obtain the regulatory approvals necessary for the
launch and commercialization of our product candidates.
To the extent that we or our collaborators are able to successfully complete the clinical
development of a product candidate, we or our collaborators will be required to obtain approval by
the FDA, EMEA or other regulatory authorities prior to marketing and selling such product candidate
in the United States, the European Union or other countries.
The process of preparing and filing applications for regulatory approvals with the FDA,
EMEA and other regulatory authorities, and of obtaining the required regulatory approvals from
these regulatory authorities is lengthy and expensive, and may require two years or more. This
process is further complicated because some of our product candidates use non-traditional or novel
materials in
13.
non-traditional or novel ways, and the regulatory officials have little precedent to
follow. Moreover, an unrelated biotech company recently observed multiple severe adverse reactions
in a phase 1 trial of an antibody that stimulates T cells. This development could cause the FDA and
EMEA or other regulatory authorities to require additional preclinical data or certain precautions
in the designs of clinical protocols that could cause a delay in the development of our BiTE
product candidates or make the development process more expensive.
Any marketing approval by the FDA, EMEA or other regulatory authorities may be subject to
limitations on the indicated uses for which we or our collaborators may market the product
candidate. These limitations could restrict the size of the market for the product and affect
reimbursement levels by third-party payers.
As a result of these factors, we or our collaborators may not successfully begin or
complete clinical trials and launch and commercialize any product candidates in the time periods
estimated, if at all. Moreover, if we or our collaborators incur costs and delays in development
programs or fail to successfully develop and commercialize products based upon our technologies, we
may not become profitable and our stock price could decline.
We and our collaborators are subject to governmental regulations other than those imposed by
the FDA and EMEA, and we or our collaborators may not be able to comply with these regulations. Any
non-compliance could subject us or our collaborators to penalties and otherwise result in the
limitation of our or our collaborators operations.
In addition to regulations imposed by the FDA, EMEA and other health regulatory authorities,
we and our collaborators are subject to regulation under the Occupational Safety and Health Act,
the Environmental Protection Act, the Toxic Substances Control Act, the Research Conservation and
Recovery Act, as well as regulations administered by the Nuclear Regulatory Commission, national
restrictions on technology transfer, import, export and customs regulations and certain other
local, state or federal regulations, or their counterparts in Europe and other countries. From time
to time, other governmental agencies and legislative or international governmental bodies have
indicated an interest in implementing further regulation of biotechnology applications. We are not
able to predict whether any such regulations will be adopted or whether, if adopted, such
regulations will apply to our or our collaborators business, or whether we or our collaborators
would be able to comply, without incurring unreasonable expense, or at all, with any applicable
regulations.
Our growth could be limited if we are unable to attract and retain key personnel and consultants.
We have limited experience in filing and prosecuting regulatory applications to obtain
marketing approval from the FDA, EMEA or other regulatory authorities. Our success depends on the
ability to attract, train and retain qualified scientific and technical personnel, including
consultants, to further our research and development efforts. The loss of services of one or more
of our key employees or consultants could have a negative impact on our business and operating
results. Locating candidates with the appropriate qualifications can be difficult, and we may not
be able to attract and retain sufficient numbers of highly skilled employees.
Any growth and expansion into areas and activities that may require additional personnel or
expertise, such as in regulatory affairs and compliance, would require us to either hire new key
personnel or obtain such services from a third party. The pool of personnel with the skills that we
require is limited, and we may not be able to hire or contract such additional personnel.
If our third-party manufacturers do not follow current good manufacturing practices or do not
maintain their facilities in accordance with these practices, our product development and
commercialization efforts may be harmed.
Product candidates used in clinical trials or sold after marketing approval has been
obtained must be manufactured in accordance with current good manufacturing practices regulations.
There are a limited number of manufacturers that operate under these regulations, including the
FDAs and EMEAs good manufacturing practices regulations,
and that are capable of manufacturing our product candidates. Third-party manufacturers may
encounter difficulties in achieving quality control and quality assurance and may experience
shortages of qualified personnel. Also, manufacturing facilities are subject to ongoing periodic,
unannounced inspection by the FDA, the EMEA, and other regulatory agencies or authorities, to
ensure strict compliance with current good manufacturing practices and other governmental
regulations and standards. A failure of third-party manufacturers to follow current good
manufacturing practices or other regulatory requirements and to document their adherence to such
practices may lead to significant delays in the availability of product candidates for use in a
clinical trial or for commercial sale, the termination of, or hold on a clinical trial, or may
delay or prevent filing or approval of marketing applications for our product candidates. In
addition, as a result of such a failure, we could be subject to sanctions, including fines,
injunctions and civil penalties, refusal or delays by regulatory authorities to
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grant marketing approval of our product candidates, suspension or withdrawal of marketing approvals, seizures or
recalls of product candidates, operating restrictions and criminal prosecutions, any of which could
significantly and adversely affect our business. If we were required to change manufacturers, it
may require additional clinical trials and the revalidation of the manufacturing process and
procedures in accordance with applicable current good manufacturing practices and may require FDA
or EMEA approval. This revalidation may be costly and time-consuming. If we are unable to arrange
for third-party manufacturing of our product candidates, or to do so on commercially reasonable
terms, we may not be able to complete development or marketing of our product candidates.
Even if regulatory authorities approve our product candidates, we may fail to comply with
ongoing regulatory requirements or experience unanticipated problems with our product candidates,
and these product candidates could be subject to restrictions or withdrawal from the market
following approval.
Any product candidates for which we obtain marketing approval, along with the
manufacturing processes, post-approval clinical trials and promotional activities for such product
candidates, will be subject to continual review and periodic inspections by the FDA, EMEA and other
regulatory authorities. Even if regulatory approval of a product candidate is granted, the approval
may be subject to limitations on the indicated uses for which the product may be marketed or
contain requirements for costly post-marketing testing and surveillance to monitor the safety or
efficacy of the product. Post-approval discovery of previously unknown problems with any approved
products, including unanticipated adverse events or adverse events of unanticipated severity or
frequency, difficulties with a manufacturer or manufacturing processes, or failure to comply with
regulatory requirements, may result in restrictions on such approved products or manufacturing
processes, withdrawal of the approved products from the market, voluntary or mandatory recall,
fines, suspension of regulatory approvals, product seizures, injunctions or the imposition of civil
or criminal penalties.
The procedures and requirements for granting marketing approvals vary among countries, which
may cause us to incur additional costs or delays or may prevent us from obtaining marketing
approvals in different countries and regulatory jurisdictions.
We intend to market our product candidates in many countries and regulatory
jurisdictions. In order to market our product candidates in the United States, the European Union
and many other jurisdictions, we must obtain separate regulatory approvals in each of these
countries and territories. The procedures and requirements for obtaining marketing approval vary
among countries and regulatory jurisdictions, and can involve additional clinical trials or other
tests. Also, the time required to obtain approval may differ from that required to obtain FDA and
EMEA approval. The various regulatory approval processes may include all of the risks associated
with obtaining FDA and EMEA approval. We may not obtain all of the desirable or necessary
regulatory approvals on a timely basis, if at all. Approval by a regulatory authority in a
particular country or regulatory jurisdiction, such as the FDA in the United States and the EMEA in
the European Union, generally does not ensure approval by a regulatory authority in another
country. We may not be able to file for regulatory approvals and may not receive necessary
approvals to commercialize our product candidates in any or all of the countries or regulatory
jurisdictions in which we desire to market our product candidates.
If we fail to obtain an adequate level of reimbursement for any approved products by
third-party payers, there may be no commercially viable markets for these products or the markets
may be much smaller than expected. The continuing efforts of the government, insurance companies,
managed care organizations and other payers of health care costs to contain or reduce costs of
healthcare may adversely affect our ability to generate revenues and achieve profitability, the
future revenues and profitability of our potential customers, suppliers and collaborators, and the
availability of capital.
Our ability to commercialize our product candidates successfully will depend in part on the
extent to which governmental authorities, private health insurers and other organizations establish
appropriate reimbursement levels for the price charged for our product candidates and related
treatments. The efficacy, safety and cost-effectiveness of our product candidates as well as the
efficacy, safety and cost-effectiveness of any competing products will determine in part the
availability and level of reimbursement. These third-party payors continually attempt to contain or
reduce the costs of healthcare by challenging the prices charged for healthcare products and
services. Given recent federal and state government initiatives directed at lowering the total cost
of healthcare in the United States, the U.S. Congress and state legislatures will likely continue
to focus on healthcare reform, the cost of prescription pharmaceuticals and on the reform of the
Medicare and Medicaid systems. In certain countries, particularly the countries of the European
Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these
countries, pricing negotiations with governmental authorities can take six to twelve months or
longer after the receipt of regulatory marketing approval for a product. To obtain reimbursement or
pricing approval in some countries, we may be required to conduct clinical trials that compare the
cost-effectiveness of our product candidates to other available therapies. If reimbursement for our
product candidates were unavailable or limited in scope or amount or if reimbursement levels or
prices are set at unsatisfactory levels, our projected and actual revenues and our prospects for
profitability would be negatively affected.
15.
Another development that may affect the pricing of drugs in the United States is
regulatory action regarding drug reimportation into the United States. The Medicare Prescription
Drug, Improvement and Modernization Act of 2003, which became law in December 2003, requires the
Secretary of the U.S. Department of Health and Human Services to promulgate regulations allowing
drug reimportation from Canada into the United States under certain circumstances. These provisions
will become effective only if the Secretary certifies that such imports will pose no additional
risk to the publics health and safety and result in significant cost savings to consumers.
Proponents of drug reimportation may also attempt to pass legislation that would remove the
requirement for the Secretarys certification or allow reimportation under circumstances beyond
those anticipated under current law. If legislation is enacted, or regulations issued, allowing the
reimportation of drugs, it could decrease the reimbursement we would receive for any product
candidates that we may commercialize, or require us to lower the price of our product candidates
then on the market that face competition from lower-priced supplies of that product from other
countries. These factors would negatively affect our projected and actual revenues and our
prospects for profitability.
If physicians and patients do not accept the product candidates that we may develop, our
ability to generate product revenue in the future will be adversely affected.
Our product candidates, if successfully developed and approved by the regulatory authorities,
may not gain market acceptance among physicians, healthcare payers, patients and the medical
community. Market acceptance of and demand for any product candidate that we may develop will
depend on many factors, including:
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our ability to provide acceptable evidence of safety and efficacy; |
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convenience and ease of administration; |
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prevalence and severity of adverse side effects; |
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availability of alternative treatments; |
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cost effectiveness; |
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effectiveness of our marketing and pricing strategy for any product candidates that we may develop; |
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publicity concerning our product candidates or competitive products; and |
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our ability to obtain third-party coverage or reimbursement. |
If any product candidates for which we may receive marketing approval fail to gain market
acceptance, our ability to generate product revenue in the future will be adversely affected.
We face the risk of product liability claims and may not be able to obtain insurance.
Our business exposes us to the risk of product liability claims that is inherent in the
testing, manufacturing, and marketing of drugs and related devices. Although we have product
liability and clinical trial liability insurance that we believe is appropriate, this insurance is
subject to deductibles and coverage limitations. We may not be able to obtain or maintain adequate
protection against potential liabilities. If any of our product candidates are approved for
marketing, we may seek additional insurance coverage. If we are unable to obtain insurance at
acceptable cost or on acceptable terms with adequate coverage or otherwise protect ourselves
against potential product liability claims, we will be exposed to significant liabilities, which
may harm our business. These liabilities could prevent or interfere with our product
commercialization efforts. Defending a suit, regardless of merit, could be costly, could divert
management attention and might result in adverse publicity or reduced acceptance of our product
candidates in the market.
Our operations involve hazardous materials and we must comply with environmental laws and
regulations, which can be expensive.
Our research and development activities involve the controlled use of hazardous
materials, including chemicals and radioactive and biological materials. Our operations also
produce hazardous waste products. We are subject in the United States to a variety of federal,
state and local regulations, and in Europe to European, national, state and local regulations,
relating to the use, handling, storage and disposal of these materials. We generally contract with
third parties for the disposal of such substances and store certain low-level radioactive waste at
our facility until the materials are no longer considered radioactive. We cannot eliminate the risk
of accidental contamination or injury from these materials. We may be required to incur substantial
costs to comply with current or future environmental and safety regulations. If an accident or
contamination occurred, we would likely incur significant costs associated with civil penalties or
criminal fines and in complying with environmental laws and regulations. We do not have any
insurance for liabilities arising from hazardous materials. Compliance with environmental laws
and regulations is expensive, and current or future environmental regulation may impair our
research, development or production efforts.
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Risks Relating to Our Intellectual Property and Litigation
We may not be able to obtain or maintain adequate patents and other intellectual property
rights to protect our business and product candidates against competitors.
Our value will be significantly enhanced if we are able to obtain adequate patents and
other intellectual property rights to protect our business and product candidates against
competitors. For that reason, we allocate significant financial and personnel resources to the
filing, prosecution, maintenance and defense of patent applications, patents and trademarks
claiming or covering our product candidates and key technology relating to these product
candidates.
To date, we have sought to protect our proprietary positions related to our important
proprietary technology, inventions and improvements by filing of patent applications in the U.S.,
Europe and other jurisdictions. Because the patent position of pharmaceutical and biopharmaceutical
companies involves complex legal and factual questions, the issuance, scope and enforceability of
patents cannot be predicted with certainty, and we cannot be certain that patents will be issued on
pending or future patent applications that cover our product candidates and technologies. Claims
could be restricted in prosecution that might lead to a scope of protection which is of minor value
for a particular product candidate. Patents, if issued, may be challenged and sought to be
invalidated by third parties in litigation. In addition, U.S. patents and patent applications may
also be subject to interference proceedings, and U.S. patents may be subject to reexamination
proceedings in the U.S. Patent and Trademark Office. European patents may be subject to opposition
proceedings in the European Patent Office. Patents might be invalidated in national jurisdictions.
Similar proceedings may be available in countries outside of Europe or the U.S. These proceedings
could result in either a loss of the patent or a denial of the patent application or loss or
reduction in the scope of one or more of the claims of the patent or patent application. Thus, any
patents that we own or license from others may not provide any protection against competitors.
Furthermore, an adverse decision in an interference proceeding could result in a third party
receiving the patent rights sought by us, which in turn could affect our ability to market a
potential product or product candidate to which that patent filing was directed. Our pending patent
applications, those that we may file in the future, or those that we may license from third parties
may not result in patents being issued. If issued, they may not provide us with proprietary
protection or competitive advantages against competitors with similar technology. Furthermore,
others may independently develop similar technologies or duplicate any technology that we have
developed, which fall outside the scope of our patents. Products or technology could also be copied
by competitors after expiration of the patent life.
We rely on third-party payment services for the payment of foreign patent annuities and
other fees. Non-payment or delay in payment of such fees, whether intentional or unintentional, may
result in loss of patents or patent rights important to our business.
We may incur substantial costs enforcing our patents against third parties. If we are unable to
protect our intellectual property rights, our competitors may develop and market products with
similar features that may reduce demand for our potential products.
We own or control a substantial portfolio of issued patents. From time to time, we may
become aware of third parties that undertake activities that infringe on our patents. We may decide
to grant those third parties a license under our patents, or to enforce the patents against those
third parties by pursuing an infringement claim in litigation. If we initiate patent infringement
litigation, it could consume significant financial and management resources, regardless of the
merit of the claims or the outcome of the litigation. The outcome of patent litigation is subject
to uncertainties that cannot be adequately quantified in advance, including the demeanor and
credibility of witnesses and the identity of the adverse party, especially in biotechnology-related
patent cases that may turn on the testimony of experts as to technical facts upon which experts may
reasonably disagree. Some of our competitors may be able to sustain the costs of such litigation or
proceedings more effectively than we can because of their substantially greater financial
resources. Uncertainties resulting from the initiation and continuation of patent litigation or
other proceedings could harm our ability to compete in the marketplace.
Our ability to enforce our patents may be restricted under applicable law. Many
countries, including certain countries in Europe, have compulsory licensing laws under which a
patent owner may be compelled to grant licenses to third parties. For example, compulsory licenses
may be required in cases where the patent owner has failed to work the invention in that country,
or the third-party has patented improvements. In addition, many countries limit the enforceability
of patents against government agencies or government contractors. In these countries, the patent
owner may have limited remedies, which could materially diminish the value of the patent. Moreover,
the legal systems of certain countries, particularly certain developing countries, do not favor the
aggressive
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enforcement of patent and other intellectual property rights, which makes it difficult to stop
infringement. In addition, our ability to enforce our patent rights depends on our ability to
detect infringement. It is difficult to detect infringers who do not advertise the compounds that
are used in their products or the methods they use in the research and development of their
products. If we are unable to enforce our patents against infringers, it could have a material
adverse effect on our competitive position, results of operations and financial condition.
If we are not able to protect and control our unpatented trade secrets, know-how and other
technological innovation, we may suffer competitive harm.
We rely on proprietary trade secrets and unpatented know-how to protect our research,
development and manufacturing activities and maintain our competitive position, particularly when
we do not believe that patent protection is appropriate or available. However, trade secrets are
difficult to protect. We attempt to protect our trade secrets and unpatented know-how by requiring
our employees, consultants and advisors to execute confidentiality and non-use agreements. We
cannot guarantee that these agreements will provide meaningful protection, that these agreements
will not be breached, that we will have an adequate remedy for any such breach, or that our trade
secrets or proprietary know-how will not otherwise become known or independently developed by a
third party. Our trade secrets, and those of our present or future collaborators that we utilize by
agreement, may become known or may be independently discovered by others, which could adversely
affect the competitive position of our product candidates. If any trade secret, know-how or other
technology not protected by a patent or intellectual property right were disclosed to, or
independently developed by a competitor, our business, financial condition and results of
operations could be materially adversely affected.
If third parties claim that our product candidates or technologies infringe their intellectual
property rights, we may become involved in expensive patent litigation, which could result in
liability for damages or require us to stop our development and commercialization of our product
candidates after they have been approved and launched in the market, or we could be forced to
obtain a license and pay royalties under unfavorable terms.
Our commercial success will depend in part on not infringing the patents or violating the
proprietary rights of third parties. Competitors or third parties may obtain patents that may claim
the composition, manufacture or use of our product candidates, or the technology required to
perform research and development activities relating to our product candidates.
From time to time we receive correspondence inviting us to license patents from third
parties. While we believe that our pre-commercialization activities fall within the scope of an
available exemption against patent infringement provided in the United States by 35 U.S.C. § 271(e)
and by similar research exemptions in Europe, claims may be brought against us in the future based
on patents held by others. Also, we are aware of patents and other intellectual property rights of
third parties relating to our areas of practice, and we know that others have filed patent
applications in various countries that relate to several areas in which we are developing product
candidates. Some of these patent applications have already resulted in patents and some are still
pending. The pending patent applications may also result in patents being issued. In addition, the
publication of patent applications occurs with a certain delay after the date of filing, so we may
not be aware of all relevant patent applications of third parties at a given point in time.
Further, publication of discoveries in the scientific or patent literature often lags behind actual
discoveries, so we may not be able to determine whether inventions claimed in patent applications
of third parties have been made before or after the date on which inventions claimed in our patent
applications and patents have been made. All issued patents are entitled to a presumption of
validity in many countries, including the United States and many European countries. Issued patents
held by others may therefore limit our freedom to operate unless and until these patents expire or
are declared invalid or unenforceable in a court of applicable jurisdiction.
We and our collaborators may not have rights under some patents that may cover the
composition of matter, manufacture or use of product candidates that we seek to develop and
commercialize, drug targets to which our product candidates bind, or technologies that we use in
our research and development activities. As a result, our ability to develop and commercialize our
product candidates may depend on our ability to obtain licenses or other rights under these
patents. The third parties who own or control such patents may be unwilling to grant those licenses
or other rights to us or our collaborators under terms that are commercially viable or at all.
Third parties who own or control these patents could bring claims based on patent infringement
against us or our collaborators and seek monetary damages and to enjoin further clinical testing,
manufacturing and marketing of the affected product candidates or products. There has been, and we
believe that there will continue to be, significant litigation in the pharmaceutical industry
regarding patent and other intellectual property rights. If a third party sues us for patent
infringement, it could consume significant financial and management resources, regardless of the
merit of the claims or the outcome of the litigation.
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If a third party brings a patent infringement suit against us and we do not settle the
patent infringement suit and are not successful in defending against the patent infringement
claims, we could be required to pay substantial damages or we or our collaborators could be forced
to stop or delay research, development, manufacturing or sales of the product or product candidate
that is claimed by the third partys patent. We or our collaborators may choose to seek, or be
required to seek, a license from the third party and would most likely be required to pay license
fees or royalties or both. However, there can be no assurance that any such license will be
available on acceptable terms or at all. Even if we or our collaborators were able to obtain a
license, the rights may be nonexclusive, which would give our competitors access to the same
intellectual property. Ultimately, we could be prevented from commercializing a product candidate,
or forced to cease some aspect of our business operations as a result of patent infringement
claims, which could harm our business.
Our success depends on our ability to maintain and enforce our licensing arrangements with
various third party licensors.
We are party to intellectual property licenses and agreements that are important to our
business, and we expect to enter into similar licenses and agreements in the future. These licenses
and agreements impose various research, development, commercialization, sublicensing, milestone and
royalty payment, indemnification, insurance and other obligations on us. If we or our collaborators
fail to perform under these agreements or otherwise breach obligations thereunder, our licensors
may terminate these agreements and we could lose licenses to intellectual property rights that are
important to our business. Any such termination could materially harm our ability to develop and
commercialize the product candidate that is the subject of the agreement, which could have a
material adverse impact on our results of operations.
If licensees or assignees of our intellectual property rights breach any of the agreements
under which we have licensed or assigned our intellectual property to them, we could be deprived of
important intellectual property rights and future revenue.
We are a party to intellectual property out-licenses, collaborations and agreements that are
important to our business, and we expect to enter into similar agreements with third parties in the
future. Under these agreements, we license or transfer intellectual property to third parties and
impose various research, development, commercialization, sublicensing, royalty, indemnification,
insurance, and other obligations on them. If a third party fails to comply with these requirements,
we generally retain the right to terminate the agreement and to bring a legal action in court or in
arbitration. In the event of breach, we may need to enforce our rights under these agreements by
resorting to arbitration or litigation. During the period of arbitration or litigation, we may be
unable to effectively use, assign or license the relevant intellectual property rights and may be
deprived of current or future revenues that are associated with such intellectual property, which
could have a material adverse effect on our results of operations and financial condition.
We may be subject to damages resulting from claims that we or our employees have wrongfully
used or disclosed alleged trade secrets of their former employers.
Many of our employees were previously employed at other biotechnology or pharmaceutical
companies, including our competitors or potential competitors. Although no claims against us are
currently pending, we may be subject to claims that these employees or we have inadvertently or
otherwise used or disclosed trade secrets or other proprietary information of their former
employers. Litigation may be necessary to defend against these claims. Even if we are successful in
defending against these claims, litigation could result in substantial costs and be a distraction
to management. If we fail in defending such claims, in addition to paying money claims, we may lose
valuable intellectual property rights or personnel. A loss of key personnel or their work product
could hamper or prevent our ability to commercialize certain product candidates.
Risks Relating to Manufacturing and Sales of Products
We depend on our collaborators and third-party manufacturers to produce most, if not all, of our
product candidates and if these third parties do not successfully manufacture these product
candidates our business will be harmed.
We have no manufacturing experience or manufacturing capabilities for the production of our
product candidates for clinical trials or commercial sale. In order to continue to develop product
candidates, apply for regulatory approvals, and commercialize our product candidates following
approval, we or our collaborators must be able to manufacture or contract with third parties to
manufacture our product candidates in clinical and commercial quantities, in compliance with
regulatory requirements, at acceptable costs and in a timely manner. The manufacture of our product
candidates may be complex, difficult to accomplish and difficult to scale-up when large-scale
production is required. Manufacture may be subject to delays, inefficiencies and poor or low yields
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quality products. The cost of manufacturing our product candidates may make them prohibitively
expensive. If supplies of any of our product candidates or related materials become unavailable on
a timely basis or at all or are contaminated or otherwise lost, clinical trials by us and our
collaborators could be seriously delayed. This is due to the fact that such materials are
time-consuming to manufacture and cannot be readily obtained from third-party sources.
To the extent that we or our collaborators seek to enter into manufacturing arrangements
with third parties, we and such collaborators will depend upon these third parties to perform their
obligations in a timely and effective manner and in accordance with government regulations.
Contract manufacturers may breach their manufacturing agreements because of factors beyond our
control or may terminate or fail to renew a manufacturing agreement based on their own business
priorities at a time that is costly or inconvenient for us. If third-party manufacturers fail to
perform their obligations, our competitive position and ability to generate revenue may be
adversely affected in a number of ways, including:
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we and our collaborators may not be able to initiate or continue clinical trials of product
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we and our collaborators may be delayed in submitting applications for regulatory approvals
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we and our collaborators may not be able to meet commercial demands for any approved products. |
We have no sales, marketing or distribution experience and will depend significantly on third
parties who may not successfully sell our product candidates following approval.
We have no sales, marketing or product distribution experience. If we receive required
regulatory approvals to market any of our product candidates, we plan to rely primarily on sales,
marketing and distribution arrangements with third parties, including our collaborators. For
example, as part of our agreements with MedImmune, Merck Serono, TRACON Pharmaceuticals and
Nycomed, we have granted these companies the right to market and distribute products resulting from
such collaborations, if any are ever successfully developed. We may have to enter into additional
marketing arrangements in the future and we may not be able to enter into these additional
arrangements on terms that are favorable to us, if at all. In addition, we may have limited or no
control over the sales, marketing and distribution activities of these third parties, and sales
through these third parties could be less profitable to us than direct sales. These third parties
could sell competing products and may devote insufficient sales efforts to our product candidates
following approval. As a result, our future revenues from sales of our product candidates, if any,
will be materially dependent upon the success of the efforts of these third parties.
We may seek to co-promote products with our collaborators, or to independently market
products that are not already subject to marketing agreements with other parties. If we determine
to perform sales, marketing and distribution functions ourselves, we could face a number of
additional risks, including:
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the cost of establishing a marketing staff or sales force may not be justifiable in light of the revenues
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Any statements in this prospectus about our expectations, beliefs, plans, objectives,
assumptions or future events or performance are not historical facts and are forward-looking
statements. Such forward-looking statements include statements regarding the efficacy, safety and
intended utilization of our product candidates, the conduct and results of future clinical trials,
plans regarding regulatory filings, future research and clinical trials and plans regarding
partnering activities, and our goal of monitoring our internal controls for financial reporting and
making modifications as necessary. You can identify these forward-looking statements by the use of
words or phrases such as believe, may, could, will, estimate, continue, anticipate,
intend, seek, plan, expect, should, or would. Among the factors that could cause actual
results to differ materially from those indicated in the forward-looking statements are risks and
uncertainties inherent in our business including, without limitation, the progress and timing of
our clinical trials; difficulties or delays in development, testing, obtaining regulatory approval
for producing and marketing our products; unexpected adverse side effects or inadequate therapeutic
efficacy of our products that could delay or prevent product development or
20.
commercialization, or that could result in recalls or product liability claims; the scope and validity of patent
protection for our product candidates; competition from other pharmaceutical or biotechnology
companies; our ability to obtain additional financing to support our operations; successful
administration of our business and financial reporting capabilities, including the successful
remediation of material weaknesses in our internal control our financial reporting and other risks
detailed in this prospectus; and other risks detailed in our Annual Report on Form 10-K for the
year ended December 31, 2006 filed with the Securities and Exchange Commission on March 16, 2007;
our Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 filed with the Securities
and Exchange Commission on May 10, 2007; and the discussions set forth above under the caption
Risk Factors.
Although we believe that the expectations reflected in our forward-looking statements are
reasonable, we cannot guarantee future results, events, levels of activity, performance or
achievement. We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise, unless required by
law.
USE OF PROCEEDS
We are registering these shares pursuant to the registration rights granted to the selling
stockholders in connection with our June 2007 private placement. We are not selling any securities
under this prospectus and will not receive any proceeds from sales of the shares of common stock
sold from time to time under this prospectus by the selling stockholders.
Some of the shares covered by this prospectus are issuable upon exercise of warrants to
purchase our common stock. Upon any exercise of the warrants for cash, the selling stockholders
would pay us the exercise price of the warrants, which would be used for general corporate
purposes. The cash exercise price of the warrants is $3.09 per share of our common stock. Under
certain conditions set forth in the warrants, the warrants are exercisable on a cashless basis. If
any warrants are exercised on a cashless basis, we would not receive any cash payment from the
selling stockholders upon the exercise of these warrants.
We have agreed to pay all costs, expenses and fees relating to registering the shares of our
common stock referenced in this prospectus. The selling stockholders will pay any brokerage
commissions and/or similar charges incurred for the sale of such shares of our common stock.
RECENT DEVELOPMENTS
On June 19, 2007, we entered into a Securities Purchase Agreement with certain institutional
and other accredited investors, pursuant to which we agreed to issue to the investors an aggregate
of 9,216,709 shares of our common stock (the Shares) and warrants to purchase up to 4,608,356
shares of our common stock at an exercise price of $3.09 per share (the Warrants), at a purchase
price of $2.7525 per unit (with each unit consisting of one Share and a Warrant exercisable for
one-half of one Share). The Securities Purchase Agreement contained customary representations and
warranties by us and each investor. The Warrants will become exercisable on December 19, 2007 and
will remain exercisable for five years thereafter. The exercise price of the warrants is subject
to adjustment upon certain transactions, including stock splits, stock dividends, rights offerings
at an effective price below the exercise price, pro rata distributions of securities or assets to
stockholders, mergers, consolidations, sales of all or substantially all of our assets, tender or
exchange offers or reclassifications. The exercise price of the warrants may also be reduced to
any amount deemed appropriate by our board of directors. The gross proceeds of the sale of the
Shares and Warrants totaled approximately $25.4 million. RBC Capital Markets acted as lead
placement agent with respect to the transaction and received an aggregate cash fee equal to
approximately $1.4 million, and C.E. Unterberg, Towbin acted as co-placement agent and received an
aggregate cash fee equal to approximately $0.4 million.
Pursuant to the Securities Purchase Agreement and the corresponding Registration Rights
Agreement, we agreed to prepare and file with the Securities and Exchange Commission, on or prior
to the 30th calendar day following the date of the Registration Rights Agreement (the Filing
Date), a registration statement (the Registration Statement) covering the resale of the Shares
as well as the shares of the Companys common stock underlying the Warrants (the Warrant Shares),
for an offering to be made on a continuous basis pursuant to Rule 415 promulgated by the SEC
pursuant to the Securities Act. Pursuant to the Registration Rights Agreement, we agreed to use our
best efforts to cause the Registration Statement to be declared effective under the Securities Act
as promptly as possible after the filing thereof but, in any event, if the Registration Statement
does not become subject to review by the SEC, prior to the earlier of (1) the 90th calendar day
following the date of the Registration Rights Agreement and (2) the fifth trading day following the
date on which we receive notification from the SEC that the Registration Statement will not be
reviewed or is no longer subject to further review by the SEC. If the Registration Statement
becomes subject to a full review by the SEC, we will be obligated to use our
best efforts to cause the Registration Statement to be declared effective prior to the 150th
calendar day following the date of the Registration Rights Agreement. Pursuant to the Registration
Rights Agreement, we also agreed to use our best efforts to keep the Registration Statement
continuously effective under the Securities Act until the earlier of the date on which all of the
Shares and Warrant Shares have been sold and the date on which all of the Shares and Warrant Shares
can be sold publicly under Rule 144(k) under the Securities Act.
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Should an Event (as defined below) occur, then upon the occurrence of such Event, and on every
monthly anniversary thereof until the applicable Event is cured, we will be required to pay an
amount in cash, as liquidated damages and not as a penalty, equal to 1.5% of the purchase price for
any unregistered Shares then held (but excluding Warrant Shares); provided, however, that the total
amount of such payments (the Event Payments) will not exceed 12% of the aggregate purchase price.
Any Event Payments would apply on a prorated basis for any portion of a month prior to the cure of
an Event. In the event we fail to make Event Payments in a timely manner, such Event Payments
would bear interest at the rate of 18% per year (prorated for partial periods) until paid in full.
For these purposes, each of the following constitutes an Event: (i) the Registration Statement is
not filed on or prior to the Filing Date; (ii) we fail to request acceleration of effectiveness as
required by the Registration Rights Agreement; (iii) the Registration Statement is not declared
effective on or prior to the applicable required effectiveness date described in the preceding
paragraph; and (iv) except as provided for in the Registration Rights Agreement, after the
Effective Date, a purchaser of the Shares is not permitted to sell such purchasers Shares under
the Registration Statement for any reason for 10 consecutive calendar days or an aggregate of 15
calendar days in any 12-month period. We also agreed to other customary obligations regarding
registration, including matters relating to indemnification, maintenance of the
Registration Statement and payment of expenses.
SELLING STOCKHOLDERS
On June 22, 2007, we issued 9,216,709 shares of common stock and warrants to purchase an
additional 4,608,356 shares of common stock in a private placement to institutional and other
accredited investors pursuant to a Securities Purchase Agreement. Pursuant to a Registration
Rights Agreement related to this private placement, we agreed to file a registration statement of
which this prospectus is a part with the Securities and Exchange Commission to register the
disposition of the shares of our common stock we issued in the private placement and shares of
common stock underlying the exercise of warrants, and to keep the registration statement effective
until the earlier of (a) such time as all such shares have been sold by the selling stockholders,
or (b) the date upon which all of the shares, and the shares issuable upon the exercise of the
warrants, assuming net exercise of the warrants pursuant to the provisions hereof, may be sold
publicly under Rule 144(k) of the Securities Act of 1933, as amended.
The warrants issued to the purchasers in the private placement are exercisable after December
19, 2007 at an exercise price of $3.09 per share, and expire December 19, 2012. Pursuant to
conditions set forth in the warrants, the warrants are exercisable under certain circumstances on a
cashless basis. If certain changes occur to our capitalization, such as a stock split or stock
dividend of the common stock, then the exercise price and number of shares issuable upon exercise
of the warrants will be adjusted appropriately.
We have included the shares issuable upon exercise of the warrants issued in the private
placement to the selling stockholders in this prospectus and related registration statement.
The following table sets forth:
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the name of each of the selling stockholders; |
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the number of shares of our common stock beneficially owned by each such selling stockholder prior to this offering; |
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the percentage (if one percent or more) of common stock owned by each such selling stockholder prior to this offering; |
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the number of shares of our common stock being offered pursuant to this prospectus; |
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the number of shares of our common stock issuable upon exercise of the warrants issued in the private placement; |
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the number of shares of our common stock owned upon completion of this offering; and |
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the percentage (if one percent or more) of common stock owned by each such selling stockholder after this offering. |
This table is prepared based on information supplied to us by the selling stockholders,
and reflects holdings as of July 12, 2007. As used in this prospectus, the term selling
stockholder includes each of the selling stockholders listed below, and any donees, pledges,
transferees or other successors in interest selling shares received after the date of this
prospectus from a selling stockholder as a gift, pledge, or other non-sale related transfer. The number of shares in the column Number
of Shares Being Offered represents all of the shares that a selling stockholder may offer under
this prospectus. Each selling stockholder may sell some, all or none of its shares. The number of
shares in the column Shares of Common Stock Beneficially Owned After Offering assumes that the
selling stockholder sells all of the shares covered by this prospectus. We do not know how long
the selling stockholders will hold the shares before selling them, and we currently have no
agreements, arrangements or understandings with the selling stockholders regarding the sale of any
of the shares. Each of the selling stockholders listed below has certified that (i) it purchased
the shares in the ordinary course of business, and (ii) at the time of purchase of the shares to be
resold, it had no agreements or understandings, directly or indirectly, with any person to
distribute such shares.
Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC
under the Securities Exchange Act of 1934, as amended. The percentage of shares beneficially owned
prior to the offering is based on 40,723,376 shares of our common stock actually outstanding as of
July 12, 2007.
Except as noted in the footnotes to the table below, no selling stockholder has had, within
the past three years, any position, office, or material relationship with us or any of our
predecessors or affiliates.
22.
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Shares of Common Stock |
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Shares of Common Stock |
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Beneficially Owned |
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Number of |
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Beneficially Owned After |
Security Holder |
|
Prior to Offering (1) |
|
Outstanding Shares |
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Shares Issuable Upon Exercise of |
|
Offering (2) |
|
|
Number |
|
Percent |
|
Being Offered |
|
Warrants Being Offered (1) |
|
Number |
|
Percent |
|
Advent Private Equity Fund III B Limited
Partnership (3) |
|
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964,817 |
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2.4 |
% |
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90,058 |
|
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45,029 |
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874,759 |
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2.1 |
% |
Advent Private Equity Fund III C Limited
Partnership (3) |
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269,250 |
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|
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* |
|
|
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25,132 |
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|
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12,566 |
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244,118 |
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|
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* |
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Advent Private Equity Fund III A Limited
Partnership (3) |
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1,969,639 |
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4.8 |
% |
|
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183,852 |
|
|
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91,926 |
|
|
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1,785,787 |
|
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4.4 |
% |
Advent Private Equity Fund III D Limited
Partnership (3) |
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529,495 |
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1.3 |
% |
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49,424 |
|
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24,712 |
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480,071 |
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1.2 |
% |
Advent Private Equity Fund III Affiliates
Limited Partnership (3) |
|
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63,077 |
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|
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* |
|
|
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5,888 |
|
|
|
2,944 |
|
|
|
57,189 |
|
|
|
* |
|
Advent Management III Limited Partnership
(3) |
|
|
19,676 |
|
|
|
* |
|
|
|
1,836 |
|
|
|
918 |
|
|
|
17,840 |
|
|
|
* |
|
Advent Private Equity Fund III GmbH & Co KG
(3) |
|
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76,227 |
|
|
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* |
|
|
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7,116 |
|
|
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3,558 |
|
|
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69,111 |
|
|
|
* |
|
Baker Bros. Investments II, L.P. (4) |
|
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2,620 |
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|
|
* |
|
|
|
2,620 |
|
|
|
1,310 |
|
|
|
|
|
|
|
* |
|
Baker Biotech Fund I, L.P. (4) |
|
|
585,122 |
|
|
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1.4 |
% |
|
|
389,824 |
|
|
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194,913 |
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195,298 |
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* |
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Baker Brothers Life Sciences, L.P. (4) |
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1,573,890 |
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3.9 |
% |
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1,028,095 |
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514,048 |
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545,795 |
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1.3 |
% |
14159, L.P. (4) |
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50,589 |
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* |
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32,685 |
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16,341 |
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17,904 |
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|
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* |
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V2M Life Sciences Fund (5) |
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72,661 |
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* |
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72,661 |
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36,331 |
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|
|
|
|
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* |
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Fort Mason Master, LP (6) |
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682,362 |
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1.7 |
% |
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682,362 |
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|
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341,181 |
|
|
|
|
|
|
|
* |
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Fort Mason Partners, LP (6) |
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44,250 |
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* |
|
|
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44,250 |
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|
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22,125 |
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|
|
|
|
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* |
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Capital Ventures International (7) |
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1,089,918 |
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2.7 |
% |
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1,089,918 |
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544,959 |
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* |
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Iroquois Master Fund Ltd. (8) |
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145,322 |
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* |
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145,322 |
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72,661 |
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|
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|
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* |
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UBS
OConnor LLC fbo OConnor PIPES Corporate Strategies Master Limited (9) |
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726,612 |
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1.8 |
% |
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726,612 |
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|
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361,306 |
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|
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* |
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Panacea Fund, LLC (10) |
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363,306 |
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* |
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363,306 |
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181,653 |
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|
|
|
|
|
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* |
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NGN BioMed Opportunity I, L.P. (11) |
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2,139,380 |
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5.2 |
% |
|
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527,157 |
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|
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263,579 |
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|
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1,612,223 |
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3.9 |
% |
NGN BioMed Opportunity I GmbH & Co
Beteiligungs KG (11) |
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1,546,663 |
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3.7 |
% |
|
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381,108 |
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190,554 |
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1,165,555 |
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2.8 |
% |
WS Opportunity Fund (QP), L.P. (12) |
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73,300 |
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|
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* |
|
|
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73,300 |
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|
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36,650 |
|
|
|
|
|
|
|
* |
|
WS Opportunity Fund, L.P. (12) |
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77,700 |
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|
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* |
|
|
|
77,700 |
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|
|
38,850 |
|
|
|
|
|
|
|
* |
|
WS Opportunity Fund International, Ltd. (12) |
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121,480 |
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|
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* |
|
|
|
121,480 |
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|
|
60,740 |
|
|
|
|
|
|
|
* |
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Maritime Asset Management LLC (13) |
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254,314 |
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|
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* |
|
|
|
254,314 |
|
|
|
127,157 |
|
|
|
|
|
|
|
* |
|
Merlin Nexus II, L.P. (14) |
|
|
544,959 |
|
|
|
1.3 |
% |
|
|
544,959 |
|
|
|
272,479 |
|
|
|
|
|
|
|
* |
|
Nexus Gemini, L.P. (15) |
|
|
544,959 |
|
|
|
1.3 |
% |
|
|
544,959 |
|
|
|
272,479 |
|
|
|
|
|
|
|
* |
|
Omega Fund III, L.P. (16) |
|
|
1,634,877 |
|
|
|
4.0 |
% |
|
|
1,634,877 |
|
|
|
817,439 |
|
|
|
|
|
|
|
* |
|
Hale BioPharma Ventures, LLC (17) |
|
|
18,165 |
|
|
|
* |
|
|
|
18,165 |
|
|
|
9,083 |
|
|
|
|
|
|
|
* |
|
Franklin M. Berger |
|
|
97,729 |
|
|
|
* |
|
|
|
97,729 |
|
|
|
48,865 |
|
|
|
|
|
|
|
* |
|
TOTAL |
|
|
16,277,659 |
|
|
|
39.4 |
% |
|
|
9,216,709 |
|
|
|
4,608,356 |
|
|
|
7,060,950 |
|
|
|
17.1 |
% |
|
|
|
* |
|
Represents less than 1%. |
|
(1) |
|
The warrants issued in connection with the June 2007 private placement are not
exercisable prior to December 19, 2007 and, accordingly, the shares underlying such warrants have
been excluded from the shares of common stock beneficially owned prior to the offering. However,
the shares underlying such warrants are being registered for resale hereby. |
23.
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|
|
(2) |
|
Assumes the sale of all of the shares offered by this prospectus. |
|
(3) |
|
Jerry Benjamin, a member of our board of directors, is a general partner of each of
these entities, and as a result, Mr. Benjamin shares voting and dispositive power with respect to
the shares held by these entities and disclaims beneficial ownership of the shares in which he has
no pecuniary interest. These entities beneficially owned in excess of 5% of our outstanding common
stock prior to the June 2007 private placement. |
|
(4) |
|
Julian Baker and Felix Baker share voting and investment control over the securities
held by this securityholder. |
|
(5) |
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Each of J. Misha Petkevich and Dennis McCoy has the power to vote and direct the
disposition of the securities held by V2M Life Sciences Fund. |
|
(6) |
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Fort Mason Capital, LLC serves as the general partner of each of these funds and, in
such capacity, exercises sole voting and investment authority with respect to the shares. Daniel
German serves as the sole managing member of Fort Mason Capital, LLC. Fort Mason Capital, LLC and
Mr. German each disclaim beneficial ownership of such shares, except to the extent of its or his
pecuniary interest therein, if any. |
|
(7) |
|
Heights Capital Management, Inc., the authorized agent of Capital Ventures
International (CVI), has discretionary authority to vote and dispose of the securities held by
CVI and may be deemed to be the beneficial owner of these securities. Martin Kobinger, in his
capacity as Investment Manager of Heights Capital Management, Inc., may also be deemed to have
investment discretion and voting power over the securities held by CVI. Mr. Kobinger disclaims any
such beneficial ownership of the securities. CVI has identified itself as an affiliate of a
broker-dealer. This selling securityholder has represented to us that it acquired its securities in
the ordinary course of business and, at the time of purchase of the securities, such selling
securityholder had no agreements or understandings, directly or indirectly, with any person to
distribute the securities. |
|
(8) |
|
Joshua Silverman has investment power and voting control over the shares of common
stock held by Iroquois Master Fund Ltd. Mr. Silverman disclaims beneficial ownership of these
securities. |
|
(9) |
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Jeffrey Putman is the Portfolio Manager of UBS OConnor LLC fbo OConnor PIPES
Corporate Strategies Master Limited and as such controls the voting and investment power of these
shares and thus may be deemed to beneficially own the shares held by UBS OConnor LLC fbo OConnor
PIPES Corporate Strategies Master Limited. Mr. Putman disclaims beneficial ownership of the shares
held by UBS OConnor LLC fbo OConnor PIPES Corporate Strategies Master Limited |
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(10) |
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William Harris Investors, Inc. is the Manager of Panacea Fund, LLC. Michael S.
Resnick, an executive vice-president of William Harris Investors, Inc., Charles Polsky and Fred
Houbow, co-Fund Managers of Panacea Fund, LLC, have voting and investment control over the shares
of common stock and warrants held by Panacea Fund, LLC but disclaim beneficial ownership of such
shares and warrants, except to the extent of any pecuniary interest therein. |
|
(11) |
|
Peter Johann, Ph.D., a Managing General Partner of NGN Capital LLC, which is the
sole general partner of the general partner of NGN BioMed Opportunity I, L.P. and the managing
limited partner of NGN Biomed Opportunity I GmbH & Co. Beteiligungs KG, is a member of our board of
directors. Dr. Johann disclaims beneficial ownership of these shares except to the extent of his
pecuniary interest in the named funds. |
24.
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(12) |
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WSV Management, L.L.C. is the general partner of WS Ventures Management, L.P., which
is the general partner of WS Opportunity Fund, L.P. and WS Opportunity Fund (QP), L.P. and the
agent and attorney-in-fact for WS Opportunity Fund International, Ltd. Reid S. Walker, G. Stacy
Smith and Patrick P. Walker are principals of WS Capital, L.L.C. and WSV Management, L.L.C., and
Patrick P. Walker is a principal of WSV Management, L.L.C; and each has the power to vote and
direct the disposition of the securities. Each of the above persons expressly disclaims membership
in a group under Section 13(d) of the Exchange Act with respect to the securities. Each of the
above persons expressly disclaims beneficial ownership of the securities, other than to the extent
of its pecuniary interest therein. |
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(13) |
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Ann L. Evans has the power to vote and direct the disposition of the securities held
by Maritime Asset Management LLC. |
|
(14) |
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Merlin Nexus II LLC is the general partner of Merlin Nexus II, LP and shares voting
and dispositive power over these shares with Merlin Nexus II, LP. Dominique Semon, as managing
member of Merlin Nexus II LLC, also may be deemed to share voting and dispositive power over these
shares. Each of Dominique Semon and Merlin Nexus LLC disclaims beneficial ownership of these shares
except to the extent of his or its pecuniary interest. |
|
(15) |
|
Nexus Gemini LLC is the general partner of Nexus Gemini, LP and shares voting and
dispositive power over these shares with Nexus Gemini LP. Dominique Semon, as managing member of
Nexus Gemini LLC, also may be deemed to share voting and dispositive power over these shares. Each
of Dominique Semon and Nexus Gemini LLC disclaims beneficial ownership of these shares except to
the extent of his or its pecuniary interest. |
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(16) |
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Otello Stampacchia is a member of our board of directors and is sole shareholder of
Sigma Holding Limited (Sigma), which is the sole shareholder of Omega Fund Management Limited
(Omega Management), which is the sole shareholder of Omega Fund III G.P., Ltd. (Omega III
GPLtd), which is the general partner of Omega Fund III GP, L.P., which is the general partner of
Omega Fund III, L.P. Connie Helyar and John Luff are directors of each of Omega III GPLtd, Omega
Management and Sigma. As a result, Messrs. Stampacchia and Luff and Ms. Helyar share voting and
dispositive power with respect to the shares held by Omega Fund III, L.P. and disclaim beneficial
ownership of the shares in which he or she has no pecuniary interest. |
|
(17) |
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David F. Hale, a member of our board of directors, has voting and dispositive power
over the securities held by Hale BioPharma Ventures, LLC. Mr. Hale also previously served as our
Chief Executive Officer until May 2006. |
25.
PLAN OF DISTRIBUTION
Each selling stockholder (the Selling Stockholders) of the common stock and any of their
pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their
shares of common stock on the NASDAQ Global Market or any other stock exchange, market or trading
facility on which the shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. A Selling Stockholder may use any one or more of the following methods when
selling shares:
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ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers; |
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block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate the
transaction; |
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
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an exchange distribution in accordance with the rules of the applicable exchange; |
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privately negotiated transactions; |
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settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part; |
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|
broker-dealers may agree with the Selling Stockholders to sell a specified number
of such shares at a stipulated price per share; |
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|
through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise; |
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a combination of any such methods of sale; or |
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|
any other method permitted pursuant to applicable law. |
The Selling Stockholders may also sell shares under Rule 144 under the Securities Act of 1933,
as amended (the Securities Act), if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the Selling
Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this
Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a markup or markdown
in compliance with NASDR IM-2440.
In connection with the sale of the common stock or interests therein, the Selling Stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the common stock in the course of hedging the positions they
assume. The Selling Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common stock to broker-dealers
that in turn may sell these securities. The Selling Stockholders may also enter into option or
other transactions with broker-dealers or other financial institutions or the creation of one or
more derivative securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction).
The Selling Stockholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be underwriters within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it
does not have any written or oral agreement or understanding, directly or indirectly, with any
person to distribute the Common Stock. In no event shall any broker-dealer receive fees,
commissions and markups which, in the aggregate, would exceed eight percent (8%).
26.
The Company is required to pay certain fees and expenses incurred by the Company incident to
the registration of the shares. The Company has agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities under the Securities
Act.
Because Selling Stockholders may be deemed to be underwriters within the meaning of the
Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act
including Rule 172 thereunder. In addition, any securities covered by this prospectus which
qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather
than under this prospectus. There is no underwriter or coordinating broker acting in connection
with the proposed sale of the resale shares by the Selling Stockholders.
We agreed to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the Selling Stockholders without registration and without regard to any
volume limitations by reason of Rule 144(k) under the Securities Act or any other rule of similar
effect or (ii) all of the shares have been sold pursuant to this prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state securities laws. In
addition, in certain states, the resale shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the
distribution of the resale shares may not simultaneously engage in market making activities with
respect to the common stock for the applicable restricted period, as defined in Regulation M, prior
to the commencement of the distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations thereunder, including
Regulation M, which may limit the timing of purchases and sales of shares of the common stock by
the Selling Stockholders or any other person. We will make copies of this prospectus available to
the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to
each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the
Securities Act).
LEGAL MATTERS
The validity of the securities being offered hereby will be passed upon by Cooley Godward
Kronish LLP, Reston, Virginia.
EXPERTS
The consolidated financial statements of Micromet, Inc. appearing in Micromet, Inc.s Annual
Report on Form 10-K for the year ended December 31, 2006, and Micromet, Inc. managements
assessment of the effectiveness of internal control over financial reporting as of December 31,
2006 included in its Form 10-K/A, have been audited by Ernst & Young AG, WPG, independent
registered public accounting firm, as set forth in their reports thereon (which conclude, among
other things, that Micromet, Inc. did not maintain effective internal control over financial
reporting as of December 31, 2006, based on Internal ControlIntegrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission, because of the effects of the
material weaknesses described therein), included therein, and incorporated herein by reference.
Such consolidated financial statements and managements assessment are incorporated herein by
reference in reliance upon such reports given on the authority of such firm as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file electronically with the Securities and Exchange Commission our annual reports on Form
10-K, quarterly interim reports on Form 10-Q, current reports on Form 8-K, and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934. We make available on or through our website, free of charge, copies of these reports as soon
as reasonably practicable after we electronically file or furnish it to the SEC. You can also
request copies of such documents by contacting our Investor Relations Department at (240) 752-1420
or sending an email to investors@micromet-inc.com. You may read and copy any document we file at
the SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC
at 1-800-SEC-0330 for more information about the operation of the Public Reference Room. The SEC
maintains an Internet site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC, including Micromet. The SECs
Internet site can be found at http://www.sec.gov.
27.
We incorporate by reference into this prospectus the documents listed below and any future
filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, including any filings after the date of this prospectus but before the end of any
offering made under this prospectus. Except as set forth below, the SEC file number for the
documents incorporated by reference in this prospectus is 0-50440. We incorporate by reference the
following information that has been filed with the SEC:
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our current report on Form 8-K filed with the SEC on January 4,
2007; |
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our annual report on Form 10-K for the year ended December 31, 2006
filed with the SEC on March 16, 2007, as amended by a Form 10-K/A filed on May
11, 2007; |
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our current report on Form 8-K filed with the SEC on March 20, 2007
(except for the information furnished under Item 2.02 or any related exhibit); |
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our definitive proxy statement for our 2007 annual meeting of
stockholders filed with the SEC on April 30, 2007; |
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our current report on Form 8-K filed with the SEC on April 30, 2007; |
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our current report on Form 8-K filed with the SEC on May 9, 2007
(except for the information furnished under Item 2.02 or any related exhibit); |
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our quarterly report on Form 10-Q for the quarterly period ended
March 31, 2007 filed with the SEC on May 10, 2007; |
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our current report on Form 8-K filed with the SEC on May 24, 2007;
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our current report on Form 8-K filed with the SEC on June 4, 2007;
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our current report on Form 8-K filed with the SEC on June 21, 2007; |
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the description of our common stock contained in our registration
statement on Form 8-A registering our common stock under Section 12 of the
Exchange Act, filed with the SEC on October 24, 2003, including any amendments or
reports filed for the purpose of updating that description; and |
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the description of our Series A Junior Participating Preferred Stock
Purchase Rights (the Rights) contained in our registration statement on Form
8-A registering the Rights under Section 12 of the Exchange Act, filed with the
SEC on November 12, 2004, including any amendments or reports filed for the
purpose of updating that description. |
In addition, all filings that we make with the SEC pursuant to the Exchange Act of 1934 after
the initial filing date of the registration statement, of which this prospectus forms a part, and
prior to effectiveness of the registration statement shall be deemed to be incorporated by
reference into this prospectus.
Any information in any of the foregoing documents will automatically be deemed to be modified
or superseded to the extent that information in this prospectus or in a later filed document that
is incorporated or deemed to be incorporated herein by reference modifies or replaces such
information.
28.
We also incorporate by reference any future filings (other than current reports furnished
under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such
items) made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, until
we file a post-effective amendment which indicates the termination of the offering of the
securities made by this prospectus. Information in such future filings updates and supplements the
information provided in this prospectus. Any statements in any such future filings will automatically be deemed to modify and supersede any
information in any document we previously filed with the SEC that is incorporated or deemed to be
incorporated herein by reference to the extent that statements in the later filed document modify
or replace such earlier statements.
We will provide to each person, including any beneficial owner, to whom a prospectus is
delivered, without charge upon written or oral request, a copy of any or all of the documents that
are incorporated by reference into this prospectus but not delivered with the prospectus, including
exhibits which are specifically incorporated by reference into such documents. Requests should be
directed to: Investor Relations, Micromet, Inc., 6707 Democracy Boulevard, Suite 505, Bethesda,
Maryland 20817, telephone (240) 752-1420.
29.