Registration Statement Under the Securities Act of 1933
As
filed with the Securities and Exchange Commission on December 27, 2005
Registration
No. 333-___________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-8
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
CALLISTO
PHARMACEUTICALS, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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13-3894575
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|
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(State
or other jurisdiction of incorporation or organization)
|
|
(IRS
Employer Identification No.)
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420
Lexington Avenue, Suite 1609
New
York, New York 10170
(Address
of principal executive offices) (Zip Code)
1996
INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN
2005
EQUITY COMPENSATION INCENTIVE PLAN
2005
DIRECTORS’ STOCK OPTION
PLAN
AND
NON-PLAN EMPLOYEE OPTIONS
(Full
title of Plan)
Gary
S. Jacob, Ph.D., Chief Executive Officer
420
Lexington Avenue, Suite 1609
New
York, New York 10170
(Name
and address of agent for service)
(212)
297-0010
(Telephone
number, including area code, of agent for service)
Jeffrey
J. Fessler, Esq.
Sichenzia
Ross Friedman Ference LLP
1065
Avenue of Americas
New
York, NY 10018
(212)
930-9700
Fax
(212) 930-9725
CALCULATION
OF REGISTRATION FEE
|
Title
of Securities
to
be Registered
|
|
Proposed
Maximum
Amount
to
be Registered
(1)
|
|
Proposed
Maximum
Offering
Price
Per
Share
|
|
Aggregate
Offering
Price
|
|
Amount
of Registration
Fee
|
|
|
Common
Stock, $.0001
par value
|
|
|
10,000
(2
|
)
|
$
|
1.80
(7
|
)
|
$
|
3,179,459
|
|
$
|
340
|
|
|
|
|
|
10,000
(2
|
)
|
|
1.75
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
375,000
(2
|
)
|
|
1.70
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
45,000
(2
|
)
|
|
1.60
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
200,000
(2
|
)
|
|
1.54
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
475,000
(2
|
)
|
|
1.53
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
145,000
(2
|
)
|
|
1.50
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
75,000
(2
|
)
|
|
1.38
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
50,000
(2
|
)
|
|
1.10
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
225,000
(2
|
)
|
|
1.03
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
550,000
(2
|
)
|
|
1.01
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
76,984
(2
|
)
|
|
1.00
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
25,000
(2
|
)
|
|
0.97
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
30,000
(3
|
)
|
|
1.17
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
22,500
(3
|
)
|
|
1.45
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
45,000
(4
|
)
|
|
1.50
(7
|
)
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock, $.0001 par value
|
|
|
5,000,000
(5
|
)
|
|
1.43
(8
|
)
|
|
7,150,000
|
|
|
765
|
|
|
Common
Stock, $.0001 par value
|
|
|
1,447,500
(6
|
)
|
|
1.43
(8
|
)
|
|
2,069,925
|
|
|
222
|
|
|
Total:
|
|
|
8,806,984
|
|
|
|
|
$
|
12,399,384
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|
$
|
1,327
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|
(1)
Pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended,
this registration statement covers such indeterminate additional shares of
common stock to be offered or issued to prevent dilution
as a result of future stock splits, stock dividends or other similar
transactions.
(2)
Consists of shares of common stock issuable upon exercise of options outstanding
pursuant to our 1996 Incentive and Non-Qualified Stock Option Plan.
(3)
Consists of shares of common stock issuable upon exercise of options outstanding
pursuant to our 2005 Directors’ Stock Option Plan.
(4)
Consists of shares of common stock issuable upon exercise of outstanding
non-Plan employee options.
(5)
Consists of shares of common stock issuable upon exercise of options available
for grant pursuant to our 2005 Equity Compensation Incentive Plan.
(6)
Consists of shares of common stock issuable upon exercise of options available
for grant pursuant to our 2005 Directors’ Stock Option Plan.
(7)
Pursuant to Rule 457(h) under the Securities Act, the proposed maximum offering
price per share was calculated for an aggregate of 2,261,984 shares of common
stock issuable upon exercise of outstanding options granted under the 1996
Plan,
for an aggregate of 52,500 shares of common stock issuable upon exercise of
outstanding options granted under the 2005 Directors’ Stock Option Plan, and
45,000 shares of common stock issuable upon exercise of outstanding non-Plan
options, based on the per share exercise prices of such options, as set forth
in
the Calculation of Registration Fee table.
(8)
Estimated solely for purposes of calculating the registration fee in accordance
with Rule 457(c) under the Securities Act of 1933, using the average of the
high
and low price as reported on the American Stock Exchange on December 23,
2005.
EXPLANATORY
NOTE
This
Registration Statement is being filed in accordance with the requirements of
Form S-8 in order to register an aggregate of 8,806,984 shares of our common
stock, par value $0.0001 per share, consisting of (i) 2,261,984 shares of common
stock issuable upon exercise of options outstanding pursuant to our 1996
Incentive and Non-Qualified Stock Option Plan, (ii) 5,000,000 shares of common
stock issuable upon exercise of options available for grant pursuant to our
2005
Equity Compensation Incentive Plan, (iii) 1,447,500 shares of common stock
issuable upon exercise of options available for grant pursuant to our 2005
Directors’ Stock Option Plan, (iv) 52,500 shares of common stock issuable upon
exercise of options outstanding pursuant to our 2005 Directors’ Stock Option
Plan and (v) 45,000 shares of common stock issuable upon exercise of outstanding
non-plan employee options.
In
addition, the Prospectus filed as part of this Registration Statement has been
prepared in accordance with the requirements of Form S-3 and may be used for
reofferings and resales of up to an aggregate of 2,089,484 shares of our common
stock, consisting of (i) 2,036,984 shares issuable upon exercise of options
previously granted by us to our officers and directors under our 1996 Incentive
and Non-Qualified Stock Option Plan, and (ii) 52,500 shares issuable upon
exercise of options previously granted by us to our directors under our 2005
Directors’ Stock Option Plan.
PART
I
Item
1. Plan Information.
The
documents containing the information specified in Item 1 will be sent or given
to participants in the 1996 Incentive and Non-Qualified Stock Option Plan,
the
2005 Equity Compensation Incentive Plan and the 2005 Directors’ Stock Option
Plan as specified by Rule 428(b)(1) of the Securities Act of 1933, as amended
(the "Securities Act"). Such documents are not required to be and are not filed
with the Securities and Exchange Commission (the "SEC") either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant
to
Rule 424. These documents and the documents incorporated by reference in this
Registration Statement pursuant to Item 3 of Part II of this Form S-8, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act.
Item
2. Registrant Information and Employee Plan Annual Information.
Upon
written or oral request, any of the documents incorporated by reference in
Item
3 of Part II of this Registration Statement (which documents are incorporated
by
reference in this Section 10(a) Prospectus), other documents required to be
delivered to eligible employees, non-employee directors and consultants,
pursuant to Rule 428(b) are available without charge by contacting:
Gary
S. Jacob, Ph.D., Chief Executive Officer
420
Lexington Avenue, Suite 1609
New
York, New York 10170
(212)
297-0010
Prospectus
Callisto
Pharmaceuticals, Inc.
2,089,484 SHARES
OF COMMON STOCK
1996
Incentive and Non-Qualified Stock Option Plan
2005
Directors’ Stock Option Plan
This
prospectus relates to the sale of up to 2,089,484 shares of common stock
Callisto Pharmaceuticals, Inc. offered by certain holders of our securities,
including up to (i) 2,036,984 shares issuable upon exercise of options
previously granted by us to our officers and directors under our 1996 Incentive
and Non-Qualified Stock Option Plan, and (ii) 52,500 shares issuable upon
exercise of options previously granted by us to our directors under our 2005
Directors’ Stock Option Plan. The shares may be offered by the selling
stockholders from time to time in regular brokerage transactions, in
transactions directly with market makers or in certain privately negotiated
transactions. For additional information on the methods of sale, you should
refer to the section entitled "Plan of Distribution." We will not receive any
of
the proceeds from the sale of the shares by the selling stockholders.
Our
common stock trades on the American Stock Exchange under the symbol
"KAL." On
December 23, 2005, the closing sale price of the common stock was $1.45 per
share.
The
securities offered hereby are speculative and involve a high degree of risk
and
substantial dilution. Only investors who can bear the risk of loss of their
entire investment should invest. See "Risk Factors" beginning on page
9.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
is
truthful or complete. Any representation to the contrary is a criminal
offense.
The
date of this prospectus is December 27, 2005
TABLE
OF CONTENTS
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9
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21
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22
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23
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23
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23
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24
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NO
PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO
BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
Overview
We
are a biopharmaceutical company focused on the development of drugs to treat
relapsed (re-occurrence of active disease) acute leukemia, multiple myeloma
(an
incurable blood cancer that invades and proliferates in bone marrow), other
cancers and osteolytic bone disease (bone disease caused by white blood cells).
Our lead drug candidate, L-Annamycin, a drug from the anthracycline family
(chemotherapy drugs which are derived from antibiotics), earlier completed
an
initial Phase I/IIa clinical trial in relapsed or refractory leukemia patients
with a prior sponsor. L-Annamycin, originally developed by scientists at The
University of Texas M.D. Anderson Cancer Center to address the clinical
limitations associated with anthracycline drugs such as Adriamycin (doxorubicin)
to treat cancer, began a clinical trial at The University of Texas M.D. Anderson
Cancer Center in adult relapsed acute lymphocytic leukemia (ALL) patients on
December 1, 2005. This single-arm, open label trial will enroll 12 patients
in a
dose escalation Phase I portion, followed by 10 patients in a final fixed dose
in the Phase II portion. We plan to treat up to 34 patients. We also expect
to
commence two additional trials of L-Annamycin in 2006, a single agent trial
in
pediatric relapsed ALL patients and a combination therapy trial with Ara-C
(cytosine arabinoside) in relapsed acute myeloid leukemia (AML) patients.
Our
second drug candidate, Atiprimod, is an orally administered drug with
antiproliferative and antiangiogenic activity. Atiprimod commenced a Phase
I/IIa
clinical trial in relapsed multiple myeloma patients on May 26, 2004. These
are
patients that have a re-occurrence of active disease, and no longer respond
to
approved therapies. The Phase I/IIa clinical trial is being performed at four
sites, The University of Texas M.D. Anderson Cancer Center (Houston, TX), the
Dana-Farber Cancer Institute (Boston, MA), the St. Vincent's Comprehensive
Cancer Center (New York, NY) and the Roswell Park Cancer Institute (Buffalo,
NY). In Dcember 2005, we announced an update on interim results from this trial
performed in relapsed or refractory multiple myeloma patients which consisted
of
15 patients treated with Atiprimod, including 3 patients at the highest dose
level of 180 mg/day. Two patients exhibited stable disease, with one patient
having a 34% decrease in M protein (measure of tumor burden) over 3 months
of
treatment. It was also noted that two patients reported a subjective decrease
in
bone pain. We plan to continue this trial at higher dose levels until the
maximum tolerated dose is reached and then treat 10 additional patients at
that
level.
On
March 15, 2005 we announced a second Phase I/IIa clinical trial of Atiprimod
in
advanced cancer patients. The new trial is entitled: "An Open Label Study of
the
Safety and Efficacy of Atiprimod Treatment for Patients with Advanced Cancer".
The trial is currently being conducted at the University of Texas M.D. Anderson
Cancer Center.
History
In
March 2002, Callisto Pharmaceuticals, Inc. ("Old Callisto") purchased 99.7%
of
the outstanding common shares of Webtronics, Inc., ("Webtronics") a public
company for $400,000. Webtronics was incorporated in Florida on February 2,
2001
and had limited operations at December 31, 2002.
On
April 30, 2003, pursuant to an Agreement and Plan of Merger dated March 10,
2003, as amended April 4, 2003, Synergy Acquisition Corp., a wholly-owned
subsidiary of Webtronics merged into Synergy Pharmaceuticals Inc. ("Synergy")
and Callisto Acquisition Corp., a wholly-owned subsidiary of Webtronics merged
into Old Callisto (collectively, the "Merger"). As a result of the Merger,
Old
Callisto and Synergy became wholly-owned subsidiaries of Webtronics. In the
Merger Webtronics issued 17,318,994 shares of its common stock in exchange
for
outstanding Old Callisto common stock and an additional 4,395,684 shares in
exchange for outstanding Synergy common stock. Old Callisto changed its name
to
Callisto Research Labs, LLC ("Callisto Research") and Webtronics changed its
name to Callisto Pharmaceuticals, Inc. and changed its state of incorporation
from Florida to Delaware. Subsequently, 171,818 shares of common stock issued
to
former Synergy shareholders were returned to us under the terms of certain
indemnification agreements.
Our
principal executive office is located at 420 Lexington Avenue, Suite 1609,
New
York, New York 10170.
This
Offering
|
Shares
of common stock outstanding prior to this offering
|
|
33,233,096
(1)
|
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|
|
Shares
of common stock issuable upon exercise of outstanding options
which may be
offered pursuant to this prospectus
|
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2,089,484
|
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Use
of proceeds
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|
We
will not receive any proceeds from the sale of the shares of common
stock
offered in this prospectus. We will receive proceeds to the extent
that
currently outstanding options are exercised for cash. We will use
the
exercise proceeds, if any, for working capital and general corporate
purposes.
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Risk
Factors
|
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The
purchase of our common stock involves a high degree of risk.
You should carefully review and consider "Risk Factors" beginning
on page
9.
|
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American
Stock Exchange Symbol
|
|
KAL
|
(1)
As of December 23, 2005. Does not include shares of common stock issuable upon
exercise of outstanding options or warrants.
Investment
in our common stock involves a high degree of risk. You should consider the
following discussion of risks as well as other information in this prospectus.
The risks and uncertainties described below are not the only ones. If any of
the
following risks actually occur, our business could be harmed. In such case,
the
trading price of our common stock could decline.
RISKS
RELATED TO OUR BUSINESS
WE
ARE AT AN EARLY STAGE OF DEVELOPMENT AS A COMPANY, CURRENTLY HAVE NO SOURCE
OF
REVENUE AND MAY NEVER BECOME PROFITABLE.
We
are a development stage biopharmaceutical company. Currently, we have no
products approved for commercial sale and, to date, we have not generated any
revenue. Our ability to generate revenue depends heavily on:
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·
|
demonstration
in Phase I/IIa and Phase IIb clinical trials that our two product
candidates, Atiprimod for the treatment of relapsed multiple myeloma
and
L-Annamycin for the treatment of relapsed acute leukemia, respectively,
are safe and effective;
|
| |
·
|
the
successful development of our other product
candidates;
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·
|
our
ability to seek and obtain regulatory approvals, including with respect
to
the indications we are seeking;
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·
|
the
successful commercialization of our product candidates;
and
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·
|
market
acceptance of our products.
|
All
of our existing product candidates will require extensive additional clinical
evaluation, regulatory review, significant marketing efforts and substantial
investment before they could provide us with any revenue. For example, Atiprimod
for the treatment of multiple myeloma entered Phase I/IIa clinical trials in
May
2004 and L-Annamycin for the treatment of acute leukemia entered clinical trials
in December 2005. Our other product candidates are in preclinical development.
As a result, if we do not successfully develop and commercialize Atiprimod
or
L-Annamycin, we will be unable to generate any revenue for many years, if at
all. We do not anticipate that we will generate revenue for several years,
at
the earliest, or that we will achieve profitability for at least several years
after generating material revenue, if at all. If we are unable to generate
revenue, we will not become profitable, and we may be unable to continue our
operations.
WE
HAVE INCURRED SIGNIFICANT LOSSES SINCE INCEPTION AND ANTICIPATE THAT WE WILL
INCUR CONTINUED LOSSES FOR THE FORESEEABLE FUTURE.
As
of September 30, 2005 and December 31, 2004, we had an accumulated deficit
of
$41,886,574
and
$33,361,197, respectively. We have incurred losses in each year since our
inception in 1996. We incurred a net loss of $8,525,377
for
the nine months ended September 30, 2005 and $7,543,467 and $13,106,247 for
the
years ended December 31, 2004 and 2003, respectively. These losses, among other
things, have had and will continue to have an adverse effect on our
stockholders' equity and working capital. We expect to incur significant and
increasing operating losses for the next several years as we expand our research
and development, continue our clinical trials of Atiprimod for the treatment
of
multiple myeloma, initiate our clinical trials of L-Annamycin for the treatment
of acute leukemias, acquire or license technologies, advance our other product
candidates into clinical development, seek regulatory approval and, if we
receive FDA approval, commercialize our products. Because of the numerous risks
and uncertainties associated with our product development efforts, we are unable
to predict the extent of any future losses or when we will become profitable,
if
at all. If we are unable to achieve and then maintain profitability, the market
value of our common stock will likely decline.
WE
WILL NEED TO RAISE SUBSTANTIAL ADDITIONAL CAPITAL TO FUND OUR OPERATIONS, AND
OUR FAILURE TO OBTAIN FUNDING WHEN NEEDED MAY FORCE US TO DELAY, REDUCE OR
ELIMINATE OUR PRODUCT DEVELOPMENT PROGRAMS OR COLLABORATION EFFORTS.
Our
operations have consumed substantial amounts of cash since inception. We expect
to continue to spend substantial amounts to:
| |
·
|
complete
the clinical development of our two lead product candidates, Atiprimod
for
the treatment of multiple myeloma and L-Annamycin for the treatment
of
acute leukemia;
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·
|
continue
the development of our other product
candidates;
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·
|
finance
our general and administrative
expenses;
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·
|
prepare
regulatory approval applications and seek approvals for Atiprimod
and
L-Annamycin and our other product
candidates;
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·
|
license
or acquire additional technologies;
|
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·
|
launch
and commercialize our product candidates, if any such product candidates
receive regulatory approval; and
|
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·
|
develop
and implement sales, marketing and distribution
capabilities.
|
In
2004, our cash used in operations increased significantly over 2003 and we
expect that our cash used in operations will increase significantly for the
next
several years. For the nine months ended September 30, 2005, we have spent
approximately $6.5 million or approximately $722,000 per month. As of September
30, 2005, we had $3,541,265 in cash and cash equivalents. We will be required
to
raise additional capital within the next twelve months to complete the
development and commercialization of our current product candidates and to
continue to fund operations at the current cash expenditure levels. Our future
funding requirements will depend on many factors, including, but not limited
to:
| |
·
|
the
rate of progress and cost of our clinical trials and other development
activities;
|
| |
·
|
any
future decisions we may make about the scope and prioritization of
the
programs we pursue;
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·
|
the
costs of filing, prosecuting, defending and enforcing any patent
claims
and other intellectual property
rights;
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| |
·
|
the
costs and timing of regulatory
approval;
|
| |
·
|
the
costs of establishing sales, marketing and distribution
capabilities;
|
| |
·
|
the
effect of competing technological and market
developments;
|
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·
|
the
terms and timing of any collaborative, licensing and other arrangements
that we may establish; and
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·
|
general
market conditions for offerings from biopharmaceutical
companies.
|
To
date, our sources of cash have been primarily limited to the sale of our equity
securities. We cannot be certain that additional funding will be available
on
acceptable terms, or at all. To the extent that we raise additional funds by
issuing equity securities, our stockholders may experience significant dilution.
Any debt financing, if available, may involve restrictive covenants that impact
our ability to conduct our business. If we are unable to raise additional
capital when required or on acceptable terms, we may have to significantly
delay, scale back or discontinue the development and/or commercialization of
one
or more of our product candidates. We also may be required to:
| |
·
|
seek
collaborators for our product candidates at an earlier stage than
otherwise would be desirable and on terms that are less favorable
than
might otherwise be available; and
|
| |
·
|
relinquish,
license or otherwise dispose of rights to technologies, product candidates
or products that we would otherwise seek to develop or commercialize
ourselves on unfavorable terms.
|
IF
OUR AGREEMENTS WITH ANORMED INC. OR THE UNIVERSITY OF TEXAS M.D. ANDERSON CANCER
CENTER TERMINATE, OUR BUSINESS WOULD BE ADVERSELY AFFECTED.
Our
business is dependent on rights we have licensed from AnorMED Inc. and The
University of Texas M.D. Anderson Cancer Center. Under the terms of the AnorMED
license agreement, we are obligated to make a maintenance fee payment of
$200,000 on January 1 of each year for the term of the license agreement.
Pursuant to the license agreement, failure to pay the maintenance fee is a
material breach of the agreement. We do not anticipate failing to pay the
maintenance fee, however in the event we cannot pay the maintenance fee, AnorMED
may terminate the license agreement and we would not be able to further develop
and commercialize Atiprimod which would have an adverse effect on our business.
Under the terms of The University of Texas M.D. Anderson Cancer Center license
agreement, we are required to make certain good faith expenditures towards
the
clinical development of at least one licensed product within the two year period
after March 2005. In addition, at any time after 5 years from August 12, 2004,
The University of Texas M.D. Anderson Cancer Center has the right to terminate
the license if we
fail
to provide evidence within 90 days of written notice that we have commercialized
or we are actively and effectively attempting to commercialize L-Annamycin.
If
we fail to fulfill these obligations or other material obligations, The
University of Texas M.D. Anderson Cancer Center license agreement may be
terminated and our business would be adversely affected.
CLINICAL
TRIALS INVOLVE A LENGTHY AND EXPENSIVE PROCESS WITH AN UNCERTAIN OUTCOME, AND
RESULTS OF EARLIER STUDIES AND TRIALS MAY NOT BE PREDICTIVE OF FUTURE TRIAL
RESULTS.
In
order to receive regulatory approval for the commercialization of our product
candidates, we must conduct, at our own expense, extensive clinical trials
to
demonstrate safety and efficacy of these product candidates. Clinical testing
is
expensive, can take many years to complete and its outcome is uncertain. Failure
can occur at any time during the clinical trial process.
The
results of preclinical studies and early clinical trials of our product
candidates do not necessarily predict the results of later-stage clinical
trials. Product candidates in later stages of clinical trials may fail to show
the desired safety and efficacy traits despite having progressed through initial
clinical testing. The data collected from clinical trials of our product
candidates may not be sufficient to support the submission of a new drug
application or to obtain regulatory approval in the United States or elsewhere.
Because of the uncertainties associated with drug development and regulatory
approval, we cannot determine if or when we will have an approved product for
commercialization or achieve sales or profits.
DELAYS
IN CLINICAL TESTING COULD RESULT IN INCREASED COSTS TO US AND DELAY OUR ABILITY
TO GENERATE REVENUE.
While
to date there has been no delays in our clinical trials, enrollment in our
Atiprimod Phase I/IIa trial in multiple myeloma was slower than anticipated
due
to limited availability of relapsed multiple myeloma patients. In the future,
we
may experience delays in clinical testing of our product candidates. We do
not
know whether planned clinical trials will begin on time, will need to be
redesigned or will be completed on schedule, if at all. Clinical trials can
be
delayed for a variety of reasons, including delays in obtaining regulatory
approval to commence a trial, in reaching agreement on acceptable clinical
trial
terms with prospective sites, in obtaining institutional review board approval
to conduct a trial at a prospective site, in recruiting patients to participate
in a trial or in obtaining sufficient supplies of clinical trial materials.
Many
factors affect patient enrollment, including the size of the patient population,
the proximity of patients to clinical sites, the eligibility criteria for the
trial, competing clinical trials and new drugs approved for the conditions
we
are investigating. Prescribing physicians will also have to decide to use our
product candidates over existing drugs that have established safety and efficacy
profiles. Any delays in completing our clinical trials will increase our costs,
slow down our product development and approval process and delay our ability
to
generate revenue.
WE
MAY BE REQUIRED TO SUSPEND OR DISCONTINUE CLINICAL TRIALS DUE TO UNEXPECTED
SIDE
EFFECTS OR OTHER SAFETY RISKS THAT COULD PRECLUDE APPROVAL OF OUR PRODUCT
CANDIDATES.
Our
clinical trials may be suspended at any time for a number of reasons. For
example, we may voluntarily suspend or terminate our clinical trials if at
any
time we believe that they present an unacceptable risk to the clinical trial
patients. In addition, regulatory agencies may order the temporary or permanent
discontinuation of our clinical trials at any time if they believe that the
clinical trials are not being conducted in accordance with applicable regulatory
requirements or that they present an unacceptable safety risk to the clinical
trial patients.
Administering
any product candidates to humans may produce undesirable side effects. These
side effects could interrupt, delay or halt clinical trials of our product
candidates and could result in the FDA or other regulatory authorities denying
further development or approval of our product candidates for any or all
targeted indications. Ultimately, some or all of our product candidates may
prove to be unsafe for human use. Moreover, we could be subject to significant
liability if any volunteer or patient suffers, or appears to suffer, adverse
health effects as a result of participating in our clinical trials.
IF
WE ARE UNABLE TO SATISFY REGULATORY REQUIREMENTS, WE MAY NOT BE ABLE TO
COMMERCIALIZE OUR PRODUCT CANDIDATES.
We
need FDA approval prior to marketing our product candidates in the United States
of America. We commenced in May 2004 a Phase I/IIa trial of Atiprimod for the
treatment of multiple myeloma. In addition, we commenced a Phase I/IIa clinical
trial of L-Annamycin for the treatment of acute lymphocytic leukemia in December
2005. If we fail to obtain FDA approval to market our product candidates, we
will be unable to sell our product candidates in the United States of America
and we will not generate any revenue.
This
regulatory review and approval process, which includes evaluation of preclinical
studies and clinical trials of a product candidate as well as the evaluation
of
our manufacturing process and our contract manufacturers' facilities, is
lengthy, expensive and uncertain. To receive approval, we must, among other
things, demonstrate with substantial evidence from well-controlled clinical
trials that the product candidate is both safe and effective for each indication
where approval is sought. Satisfaction of these requirements typically takes
several years and the time needed to satisfy them may vary substantially, based
on the type, complexity and novelty of the pharmaceutical product. We cannot
predict if or when we might submit for regulatory review any of our product
candidates currently under development. Any approvals we may obtain may not
cover all of the clinical indications for which we are seeking approval. Also,
an approval might contain significant limitations in the form of narrow
indications, warnings, precautions, or contra-indications with respect to
conditions of use.
The
FDA has substantial discretion in the approval process and may either refuse
to
file our application for substantive review or may form the opinion after review
of our data that our application is insufficient to allow approval of our
product candidates. If the FDA does not file or approve our application, it
may
require that we conduct additional clinical, preclinical or manufacturing
validation studies and submit that data before it will reconsider our
application. Depending on the extent of these or any other studies, approval
of
any applications that we submit may be delayed by several years, or may require
us to expend more resources than we have available. It is also possible that
additional studies, if performed and completed, may not be considered sufficient
by the FDA to make our applications approvable. If any of these outcomes occur,
we may be forced to abandon our applications for approval, which might cause
us
to cease operations.
We
will also be subject to a wide variety of foreign regulations governing the
development, manufacture and marketing of our products. Whether or not FDA
approval has been obtained, approval of a product by the comparable regulatory
authorities of foreign countries must still be obtained prior to manufacturing
or marketing the product in those countries. The approval process varies from
country to country and the time needed to secure approval may be longer or
shorter than that required for FDA approval. We cannot assure you that clinical
trials conducted in one country will be accepted by other countries or that
approval in one country will result in approval in any other country.
IF
OUR PRODUCT CANDIDATES ARE UNABLE TO COMPETE EFFECTIVELY WITH MARKETED CANCER
DRUGS TARGETING SIMILAR INDICATIONS AS OUR PRODUCT CANDIDATES, OUR COMMERCIAL
OPPORTUNITY WILL BE REDUCED OR ELIMINATED.
We
face competition from established pharmaceutical and biotechnology companies,
as
well as from academic institutions, government agencies and private and public
research institutions. Many of our competitors have significantly greater
financial resources and expertise in research and development, manufacturing,
preclinical testing, conducting clinical trials, obtaining regulatory approvals
and marketing approved products than we do. Smaller or early-stage companies
may
also prove to be significant competitors, particularly through collaborative
arrangements with large, established companies. Our commercial opportunity
will
be reduced or eliminated if our competitors develop and commercialize cancer
drugs that are safer, more effective, have fewer side effects or are less
expensive than our product candidates. These third parties compete with us
in
recruiting and retaining qualified scientific and management personnel,
establishing clinical trial sites and patient registration for clinical trials,
as well as in acquiring technologies and technology licenses complementary
to
our programs or advantageous to our business.
We
expect that our ability to compete effectively will depend upon our ability
to:
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successfully
and rapidly complete clinical trials and submit for and obtain all
requisite regulatory approvals in a cost-effective
manner;
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maintain
a proprietary position for our products and manufacturing processes
and
other related product technology;
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attract
and retain key personnel;
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develop
relationships with physicians prescribing these products;
and
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build
an adequate sales and marketing infrastructure for our product
candidates.
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Because
we will be competing against significantly larger companies with established
track records, we will have to demonstrate to physicians that, based on
experience, clinical data, side-effect profiles and other factors, our products
are preferable to existing cancer drugs. If we are unable to compete effectively
in the cancer drug market and differentiate our products from currently marketed
cancer drugs, we may never generate meaningful revenue.
Numerous
pharmaceutical and biotechnology companies have developed anthracycline drugs
used to treat acute leukemias similar to our compound, L-Annamycin. These
compounds include Adriamycin® and Ellence® which are marketed by Pfizer and
Cerubidine® which is marketed by Boehringer Ingelheim. These drugs have been
approved by the FDA and are currently being marketed as opposed to L-Annamycin
which is in clinical development. Atiprimod, our drug candidate for relapsed
multiple myeloma, works through a different mechanism of action than Velcade
which is currently marketed by Millenium Pharmaceuticals and other drugs in
development, such as Celgene Corporation’s Revlimid.
WE
CURRENTLY HAVE NO SALES AND MARKETING ORGANIZATION. IF WE ARE UNABLE TO
ESTABLISH A DIRECT SALES FORCE IN THE UNITED STATES TO PROMOTE OUR PRODUCTS,
THE
COMMERCIAL OPPORTUNITY FOR OUR PRODUCTS MAY BE DIMINISHED.
We
currently have no sales and marketing organization. If any of our product
candidates are approved by the FDA, we intend to market that product directly
to
hospitals in the United States of America through our own sales force. We will
incur significant additional expenses and commit significant additional
management resources to establish this sales force. We may not be able to
establish these capabilities despite these additional expenditures. We will
also
have to compete with other pharmaceutical and biotechnology companies to
recruit, hire and train sales and marketing personnel. If we elect to rely
on
third parties to sell our product candidates in the United States, we may
receive less revenue than if we sold our products directly. In addition, we
may
have little or no control over the sales efforts of those third parties. In
the
event we are unable to develop our own sales force or collaborate with a third
party to sell our product candidates, we may not be able to commercialize our
product candidates which would negatively impact our ability to generate
revenue.
WE
MAY NEED OTHERS TO MARKET AND COMMERCIALIZE OUR PRODUCT CANDIDATES IN
INTERNATIONAL MARKETS.
In
the future, if appropriate regulatory approvals are obtained, we intend to
commercialize our product candidates in international markets. However, we
have
not decided how to commercialize our product candidates in those markets. We
may
decide to build our own sales force or sell our products through third parties.
Currently, we do not have any plans to enter international markets. If we decide
to sell our product candidates in international markets through a third party,
we may not be able to enter into any marketing arrangements on favorable terms
or at all. In addition, these arrangements could result in lower levels of
income to us than if we marketed our product candidates entirely on our own.
If
we are unable to enter into a marketing arrangement for our product candidates
in international markets, we may not be able to develop an effective
international sales force to successfully commercialize those products in
international markets. If we fail to enter into marketing arrangements for
our
products and are unable to develop an effective international sales force,
our
ability to generate revenue would be limited.
IF
OUR RELATIONSHIP WITH OUR CONTRACT MANUFACTURER FOR L-ANNAMYCIN TERMINATES,
OR
THEIR FACILITIES ARE DAMAGED OR DESTROYED, WE MAY BE UNABLE TO DEVELOP OR
COMMERCIALIZE L-ANNAMYCIN.
Currently,
Antibioticos S.p.A. is our sole supplier of Annamycin (drug substance that
is
the active component of the final formulated L-Annamycin drug product). If
our
relationship with this contract
manufacturer,
or any other contract manufacturer we might use, terminates or if any of their
facilities are damaged for any reason, including fire, flood, earthquake or
other similar event, we may be unable to obtain supply of Annamycin. If any
of
these events were to occur, we may need to find alternative manufacturers or
manufacturing facilities. The number of contract manufacturers with the
expertise, required regulatory approvals and facilities to manufacture Annamycin
on a commercial scale is extremely limited, and it would take a significant
amount of time to arrange for alternative manufacturers. If we need to change
to
other commercial manufacturers, the FDA and comparable foreign regulators must
approve these manufacturers’ facilities and processes prior to our use, which
would require new testing and compliance inspections. In addition, we may not
have the intellectual property rights, or may have to share intellectual
property rights, to any improvements in the current manufacturing processes
or
any new manufacturing processes for Annamycin. Any of these factors could cause
us to delay or suspend clinical trials, regulatory submissions, required
approvals or commercialization of L-Annamycin, entail higher costs, and could
result in our being unable to commercialize L-Annamycin successfully.
Furthermore, if our contract manufacturers fail to deliver the required
commercial quantities of bulk drug substance or finished product on a timely
basis and at commercially reasonable prices, and we were unable to find one
or
more replacement manufacturers capable of production at a substantially
equivalent cost, in substantially equivalent volumes and quality, and on a
timely basis, we would likely be unable to meet demand for L-Annamycin and
we
would lose potential revenue.
IF
THE FDA DOES NOT APPROVE OUR CONTRACT MANUFACTURERS' FACILITIES, WE MAY BE
UNABLE TO DEVELOP OR COMMERCIALIZE OUR PRODUCT CANDIDATES.
We
rely on third-party contract manufacturers to manufacture our product
candidates, and currently have no plans to develop our own manufacturing
facility. The facilities used by our contract manufacturers to manufacture
our
product candidates must be approved by the FDA. If the FDA does not approve
these facilities for the manufacture of our product, we may need to fund
additional modifications to our manufacturing process, conduct additional
validation studies, or find alternative manufacturing facilities, any of which
would result in significant cost to us as well as a delay of up to several
years
in obtaining approval for and manufacturing of our product candidates. In
addition, our contract manufacturers will be subject to ongoing periodic
unannounced inspection by the FDA and corresponding state agencies for
compliance with good manufacturing practices regulations, or cGMPs, and similar
foreign standards. These regulations cover all aspects of the manufacturing,
testing, quality control and record keeping relating to our product candidates.
We do not have control over our contract manufacturers' compliance with these
regulations and standards. Failure by our contract manufacturers to comply
with
applicable regulations could result in sanctions being imposed on us, including
fines, injunctions, civil penalties, failure of the government to grant market
approval of drugs, delays, suspension or withdrawals of approvals, operating
restrictions and criminal prosecutions, any of which could significantly and
adversely affect our business. In addition, we have no control over our contract
manufacturers' ability to maintain adequate quality control, quality assurance
and qualified personnel. Failure by our contract manufacturers to comply with
or
maintain any of these standards could adversely affect the development of our
product candidates and our business.
IF
PRODUCT LIABILITY LAWSUITS ARE SUCCESSFULLY BROUGHT AGAINST US, WE MAY INCUR
SUBSTANTIAL LIABILITIES AND MAY BE REQUIRED TO LIMIT COMMERCIALIZATION OF OUR
PRODUCT CANDIDATES.
We
face an inherent risk of product liability lawsuits related to the testing
of
our product candidates, and will face an even greater risk if we sell our
product candidates commercially. Currently, we are not aware of any anticipated
product liability claims with respect to our product candidates. In the future,
an individual may bring a liability claim against us if one of our product
candidates causes, or merely appears to have caused, an injury. If we cannot
successfully defend ourselves against the product liability claim, we may incur
substantial liabilities. Regardless of merit or eventual outcome, liability
claims may result in:
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decreased
demand for our product candidates;
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injury
to our reputation;
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withdrawal
of clinical trial participants;
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costs
of related litigation;
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substantial
monetary awards to patients;
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the
inability to commercialize our product
candidates.
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We
have "clinical trial" liability insurance with a $3,000,000 annual aggregate
limit for up to 40 patients participating in our Atiprimod and L-Annamycin
clinical trials. We intend to expand our insurance coverage to include the
sale
of commercial products if marketing approval is obtained for our product
candidates. Our current insurance coverage may prove insufficient to cover
any
liability claims brought against us. In addition, because of the increasing
costs of insurance coverage, we may not be able to maintain insurance coverage
at a reasonable cost or obtain insurance coverage that will be adequate to
satisfy any liability that may arise.
EVEN
IF WE RECEIVE REGULATORY APPROVAL FOR OUR PRODUCT CANDIDATES, WE WILL BE SUBJECT
TO ONGOING SIGNIFICANT REGULATORY OBLIGATIONS AND OVERSIGHT.
If
we receive regulatory approval to sell our product candidates, the FDA and
foreign regulatory authorities may, nevertheless, impose significant
restrictions on the indicated uses or marketing of such products, or impose
ongoing requirements for post-approval studies. Following any regulatory
approval of our product candidates, we will be subject to continuing regulatory
obligations, such as safety reporting requirements, and additional
post-marketing obligations, including regulatory oversight of the promotion
and
marketing of our products. If we become aware of previously unknown problems
with any of our product candidates here or overseas or our contract
manufacturers' facilities, a regulatory agency may impose restrictions on our
products, our contract manufacturers or on us, including requiring us to
reformulate our products, conduct additional clinical trials, make changes
in
the labeling of our products, implement changes to or obtain re-approvals of
our
contract manufacturers' facilities or withdraw the product from the market.
In
addition, we may experience a significant drop in the sales of the affected
products, our reputation in the marketplace may suffer and we may become the
target of lawsuits, including class action suits. Moreover, if we fail to comply
with applicable regulatory requirements, we may be subject to fines, suspension
or withdrawal of regulatory approvals, product recalls, seizure of products,
operating restrictions and criminal prosecution. Any of these events could
harm
or prevent sales of the affected products or could substantially increase the
costs and expenses of commercializing and marketing these products.
WE
RELY ON THIRD PARTIES TO CONDUCT OUR CLINICAL TRIALS. IF THESE THIRD PARTIES
DO
NOT SUCCESSFULLY CARRY OUT THEIR CONTRACTUAL DUTIES OR MEET EXPECTED DEADLINES,
WE MAY NOT BE ABLE TO SEEK OR OBTAIN REGULATORY APPROVAL FOR OR COMMERCIALIZE
OUR PRODUCT CANDIDATES.
We
have agreements with third-party contract research organizations, or CROs,
to
provide monitors and to manage data for our clinical programs. We and our CROs
are required to comply with current Good Clinical Practices, or GCPs,
regulations and guidelines enforced by the FDA for all of our products in
clinical development. The FDA enforces GCPs through periodic inspections of
trial sponsors, principal investigators and trial sites. In the future, if
we or
our CROs fail to comply with applicable GCPs, the clinical data generated in
our
clinical trials may be deemed unreliable and the FDA may require us to perform
additional clinical trials before approving our marketing applications. We
cannot assure you that, upon inspection, the FDA will determine that any of
our
clinical trials for products in clinical development comply with GCPs. In
addition, our clinical trials must be conducted with product produced under
cGMP
regulations, and will require a large number of test subjects. Our failure
to
comply with these regulations may require us to repeat clinical trials, which
would delay the regulatory approval process.
If
any of our relationships with these third-party CROs terminate, we may not
be
able to enter into arrangements with alternative CROs. If CROs do not
successfully carry out their contractual duties or obligations or meet expected
deadlines, if they need to be replaced, or if the quality or accuracy of the
clinical data they obtain is compromised due to the failure to adhere to our
clinical protocols, regulatory requirements or for other reasons, our clinical
trials may be extended, delayed or terminated, and we may not be able to obtain
regulatory approval for or successfully commercialize our product candidates.
As
a result, our financial results and the commercial prospects for our product
candidates would be harmed, our costs could increase, and our ability to
generate revenue could be delayed.
IF
WE FAIL TO ATTRACT AND KEEP SENIOR MANAGEMENT AND KEY SCIENTIFIC PERSONNEL,
WE
MAY BE UNABLE TO SUCCESSFULLY DEVELOP OUR PRODUCT CANDIDATES, CONDUCT OUR
CLINICAL TRIALS AND COMMERCIALIZE OUR PRODUCT CANDIDATES.
Our
success depends in part on our continued ability to attract, retain and motivate
highly qualified management, clinical and scientific personnel and on our
ability to develop and maintain important relationships with leading academic
institutions, clinicians and scientists. We are highly dependent upon our senior
management and scientific staff, particularly Gary S. Jacob, our Chief Executive
Officer, Donald Picker, our Executive Vice President, R&D and Pamela Harris,
our Chief Medical Officer. The loss of services of Drs. Jacob, Picker, Harris
or
one or more of our other members of senior management could delay or prevent
the
successful completion of our planned clinical trials or the commercialization
of
our product candidates.
The
competition for qualified personnel in the biotechnology and pharmaceuticals
field is intense. We will need to hire additional personnel as we expand our
clinical development and commercial activities. We may not be able to attract
and retain quality personnel on acceptable terms given the competition for
such
personnel among biotechnology, pharmaceutical and other companies. We do not
carry "key person" insurance covering any members of our senior management.
IF
WE FAIL TO ACQUIRE AND DEVELOP OTHER PRODUCTS OR PRODUCT CANDIDATES, WE MAY
BE
UNABLE TO GROW OUR BUSINESS.
To
date, we have in-licensed or acquired the rights to each of our product
candidates. As part of our growth strategy, in addition to developing our
current product candidates, we intend to license or acquire additional products
and product candidates for development and commercialization. Because we have
limited internal research capabilities, we are dependent upon pharmaceutical
and
biotechnology companies and other researchers to sell or license products to
us.
The success of this strategy depends upon our ability to identify, select and
acquire the right pharmaceutical product candidates and products. We currently
do not have any intentions to acquire another company.
Any
product candidate we license or acquire may require additional development
efforts prior to commercial sale, including extensive clinical testing and
approval by the FDA and applicable foreign regulatory authorities. All product
candidates are prone to the risks of failure inherent in pharmaceutical product
development, including the possibility that the product candidate will not
be
shown to be sufficiently safe and effective for approval by regulatory
authorities. In addition, we cannot assure you that any products that we license
or acquire that are approved will be manufactured or produced economically,
successfully commercialized or widely accepted in the marketplace.
Proposing,
negotiating and implementing an economically viable product acquisition or
license is a lengthy and complex process. Other companies, including those
with
substantially greater financial, marketing and sales resources, may compete
with
us for the acquisition or license of product candidates and approved products.
We may not be able to acquire or license the rights to additional product
candidates and approved products on terms that we find acceptable, or at all.
WE
MAY UNDERTAKE ACQUISITIONS IN THE FUTURE, AND ANY DIFFICULTIES FROM INTEGRATING
THESE ACQUISITIONS COULD DAMAGE OUR ABILITY TO ATTAIN OR MAINTAIN PROFITABILITY.
We
may acquire additional businesses, products or product candidates that
complement or augment our existing business. Integrating any newly acquired
business or product could be expensive and time-consuming. We may not be able
to
integrate any acquired business or product successfully or operate any acquired
business profitably. Moreover, we many need to raise additional funds through
public or private debt or equity financing to make acquisitions, which may
result in dilution to stockholders and the incurrence of indebtedness that
may
include restrictive covenants.
WE
WILL NEED TO INCREASE THE SIZE OF OUR ORGANIZATION, AND WE MAY EXPERIENCE
DIFFICULTIES IN MANAGING GROWTH.
We
are a small company with 10 full-time and 4 part-time employees as of December
23, 2005. To continue our clinical trials and commercialize our product
candidates, we will need to expand our employee base for managerial,
operational, financial and other resources. Future growth will impose
significant added responsibilities on members of management, including the
need
to identify, recruit, maintain and integrate additional employees. Over the
next
12 months depending on the progress of our planned clinical trials, we plan
to
add approximately four employees who we expect to assist us with our clinical
programs. Our future financial performance and our ability to commercialize
our
product candidates and to compete effectively will depend, in part, on our
ability to manage any future growth effectively. To that end, we must be able
to:
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manage
our development efforts
effectively;
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manage
our clinical trials effectively;
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integrate
additional management, administrative, manufacturing and sales and
marketing personnel;
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maintain
sufficient administrative, accounting and management information
systems
and controls; and
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hire
and train additional qualified
personnel.
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We
may not be able to accomplish these tasks, and our failure to accomplish any
of
them could harm our financial results.
REIMBURSEMENT
MAY NOT BE AVAILABLE FOR OUR PRODUCT CANDIDATES, WHICH COULD DIMINISH OUR SALES.
Market
acceptance and sales of our product candidates may depend on reimbursement
policies and health care reform measures. The levels at which government
authorities and third-party payors, such as private health insurers and health
maintenance organizations, reimburse patients for the price they pay for our
products could affect whether we are able to commercialize these products.
We
cannot be sure that reimbursement will be available for any of these products.
Also, we cannot be sure that reimbursement amounts will not reduce the demand
for, or the price of, our products. We have not commenced efforts to have our
product candidates reimbursed by government or third party payors. If
reimbursement is not available or is available only to limited levels, we may
not be able to commercialize our products.
In
recent years, officials have made numerous proposals to change the health care
system in the United States. These proposals include measures that would limit
or prohibit payments for certain medical treatments or subject the pricing
of
drugs to government control. In addition, in many foreign countries,
particularly the countries of the European Union, the pricing of prescription
drugs is subject to government control. If our products are or become subject
to
government regulation that limits or prohibits payment for our products, or
that
subject the price of our products to governmental control, we may not be able
to
generate revenue, attain profitability or commercialize our products.
As
a result of legislative proposals and the trend towards managed health care
in
the United States, third-party payers are increasingly attempting to contain
health care costs by limiting both coverage and the level of reimbursement
of
new drugs. They may also refuse to provide any coverage of uses of approved
products for medical indications other than those for which the FDA has granted
market approvals. As a result, significant uncertainty exists as to whether
and
how much third-party payers will reimburse patients for their use of
newly-approved drugs, which in turn will put pressure on the pricing of drugs.
LEGISLATIVE
OR REGULATORY REFORM OF THE HEALTHCARE SYSTEM MAY AFFECT OUR ABILITY TO SELL
OUR
PRODUCTS PROFITABLY.
In
both the United States and certain foreign jurisdictions, there have been a
number of legislative and regulatory proposals to change the healthcare system
in ways that could impact upon our ability to sell our products profitably.
In
recent years, new legislation has been proposed in the United States at the
federal and state levels that would effect major changes in the healthcare
system, either nationally or at the state level.
These
proposals have included prescription drug benefit proposals for Medicare
beneficiaries introduced in Congress. Legislation creating a prescription drug
benefit and making certain changes in Medicaid reimbursement has recently been
enacted by Congress and signed by the President. Given this legislation's recent
enactment, it is still too early to determine its impact on the pharmaceutical
industry and our business. Further federal and state proposals are likely.
The
potential for adoption of these proposals affects or will affect our ability
to
raise capital, obtain additional collaborators and market our products. We
expect to experience pricing pressures in connection with the sale of our
products due to the trend toward managed health care, the increasing influence
of health maintenance organizations and additional legislative proposals. Our
results of operations could be adversely affected by future healthcare reforms.
RISKS
RELATED TO OUR INTELLECTUAL PROPERTY
IT
IS DIFFICULT AND COSTLY TO PROTECT OUR PROPRIETARY RIGHTS, AND WE MAY NOT BE
ABLE TO ENSURE THEIR PROTECTION.
Our
commercial success will depend in part on obtaining and maintaining patent
protection and trade secret protection of our product candidates, and the
methods used to manufacture them, as well as successfully defending these
patents against third-party challenges. We will only be able to protect our
product candidates from unauthorized making, using, selling, offering to sell
or
importation by third parties to the extent that we have rights under valid
and
enforceable patents or trade secrets that cover these activities.
As
of December 23, 2005, we own 4 issued United States patents and have licensed
rights to 8 issued United States patents and 78 issued foreign patents, and
to 3
pending United States patent applications and 39 pending foreign patent
applications. We do not and have not had any control over the filing or
prosecution of these patents or patent applications. We may file additional
patent applications and extensions. Our issued United States patents we own
and
license primarily are composition of matter and formulation patents related
to
Atiprimod and L-Annamycin. Our composition of matter patents for L-Annamycin
and
Atiprimod expire in 2008 and 2009, respectively. Our formulation patents for
L-Annamycin and Atiprimod dimeleate (preferred salt form) expire in 2019 and
2018, respectively.
The
patent positions of pharmaceutical and biotechnology companies can be highly
uncertain and involve complex legal and factual questions for which important
legal principles remain unresolved. No consistent policy regarding the breadth
of claims allowed in biotechnology patents has emerged to date in the United
States. The biotechnology patent situation outside the United States is even
more uncertain. Changes in either the patent laws or in interpretations of
patent laws in the United States and other countries may diminish the value
of
our intellectual property. Accordingly, we cannot predict the breadth of claims
that may be allowed or enforced in our licensed patents or in third-party
patents.
The
degree of future protection for our proprietary rights is uncertain because
legal means afford only limited protection and may not adequately protect our
rights or permit us to gain or keep our competitive advantage. For example:
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others
may be able to make compounds that are competitive with our product
candidates but that are not covered by the claims of our licensed
patents,
or for which we are not licensed under our license
agreements;
|
| |
·
|
we
or our licensors might not have been the first to make the inventions
covered by our pending patent application or the pending patent
applications and issued patents of our
licensors;
|
| |
·
|
we
or our licensors might not have been the first to file patent applications
for these inventions;
|
| |
·
|
others
may independently develop similar or alternative technologies or
duplicate
any of our technologies;
|
| |
·
|
it
is possible that our pending patent application or one or more of
the
pending patent applications of our licensors will not result in issued
patents;
|
| |
·
|
the
issued patents of our licensors may not provide us with any competitive
advantages, or may be held invalid or unenforceable as a result of
legal
challenges by third parties;
|
| |
·
|
we
may not develop additional proprietary technologies that are patentable;
or
|
| |
·
|
the
patents of others may have an adverse effect on our
business.
|
We
also may rely on trade secrets to protect our technology, especially where
we do
not believe patent protection is appropriate or obtainable. However, trade
secrets are difficult to protect. While we use
reasonable
efforts to protect our trade secrets, our employees, consultants, contractors,
outside scientific collaborators and other advisors may unintentionally or
willfully disclose our information to competitors. Enforcing a claim that a
third party illegally obtained and is using our trade secrets is expensive
and
time consuming, and the outcome is unpredictable. In addition, courts outside
the United States are sometimes less willing to protect trade secrets. Moreover,
our competitors may independently develop equivalent knowledge, methods and
know-how.
WE
MAY INCUR SUBSTANTIAL COSTS AS A RESULT OF LITIGATION OR OTHER PROCEEDINGS
RELATING TO PATENT AND OTHER INTELLECTUAL PROPERTY RIGHTS AND WE MAY BE UNABLE
TO PROTECT OUR RIGHTS TO, OR USE, OUR TECHNOLOGY.
If
we choose to go to court to stop someone else from using the inventions claimed
in our licensed patents, that individual or company has the right to ask the
court to rule that these patents are invalid and/or should not be enforced
against that third party. These lawsuits are expensive and would consume time
and other resources even if we were successful in stopping the infringement
of
these patents. In addition, there is a risk that the court will decide that
these patents are not valid and that we do not have the right to stop the other
party from using the inventions. There is also the risk that, even if the
validity of these patents is upheld, the court will refuse to stop the other
party on the ground that such other party's activities do not infringe our
rights to these patents.
Furthermore,
a third party may claim that we are using inventions covered by the third
party's patent rights and may go to court to stop us from engaging in our normal
operations and activities, including making or selling our product candidates.
These lawsuits are costly and could affect our results of operations and divert
the attention of managerial and technical personnel. There is a risk that a
court would decide that we are infringing the third party's patents and would
order us to stop the activities covered by the patents. In addition, there
is a
risk that a court will order us to pay the other party damages for having
violated the other party's patents. The biotechnology industry has produced
a
proliferation of patents, and it is not always clear to industry participants,
including us, which patents cover various types of products or methods of use.
The coverage of patents is subject to interpretation by the courts, and the
interpretation is not always uniform. If we are sued for patent infringement,
we
would need to demonstrate that our products or methods of use either do not
infringe the patent claims of the relevant patent and/or that the patent claims
are invalid, and we may not be able to do this. Proving invalidity, in
particular, is difficult since it requires a showing of clear and convincing
evidence to overcome the presumption of validity enjoyed by issued patents.
Because
some patent applications in the United States of America may be maintained
in
secrecy until the patents are issued, because patent applications in the United
States of America and many foreign jurisdictions are typically not published
until eighteen months after filing, and because publications in the scientific
literature often lag behind actual discoveries, we cannot be certain that others
have not filed patent applications for technology covered by our licensors'
issued patents or our pending applications or our licensors' pending
applications or that we or our licensors were the first to invent the
technology. Our competitors may have filed, and may in the future file, patent
applications covering technology similar to ours. Any such patent application
may have priority over our or our licensors' patent applications and could
further require us to obtain rights to issued patents covering such
technologies. If another party has filed a United States patent application
on
inventions similar to ours, we may have to participate in an interference
proceeding declared by the United States Patent and Trademark Office to
determine priority of invention in the United States. The costs of these
proceedings could be substantial, and it is possible that such efforts would
be
unsuccessful, resulting in a loss of our United States patent position with
respect to such inventions.
Some
of our competitors may be able to sustain the costs of complex patent litigation
more effectively than we can because they have substantially greater resources.
In addition, any uncertainties resulting from the initiation and continuation
of
any litigation could have a material adverse effect on our ability to raise
the
funds necessary to continue our operations.
RISKS
RELATED TO OUR COMMON STOCK
MARKET
VOLATILITY MAY AFFECT OUR STOCK PRICE AND THE VALUE OF YOUR INVESTMENT.
The
market prices for securities of biopharmaceutical companies in general have
been
highly volatile and may continue to be highly volatile in the future. The
following factors, in addition to other risk factors described in this section,
may have a significant impact on the market price of our common stock:
| |
·
|
announcements
of technological innovations or new products by us or our
competitors;
|
| |
·
|
announcement
of FDA approval or non-approval of our product candidates or delays
in the
FDA review process;
|
| |
·
|
actions
taken by regulatory agencies with respect to our product candidates,
clinical trials, manufacturing process or sales and marketing activities;
|
| |
·
|
regulatory
developments in the United States of America and foreign countries;
|
| |
·
|
the
success of our development efforts and clinical trials;
|
| |
·
|
the
success of our efforts to acquire or in-license additional products
or
product candidates;
|
| |
·
|
any
intellectual property infringement action, or any other litigation,
involving us;
|
| |
·
|
announcements
concerning our competitors, or the biotechnology or biopharmaceutical
industries in general;
|
| |
·
|
actual
or anticipated fluctuations in our operating results;
|
| |
·
|
changes
in financial estimates or recommendations by securities analysts;
|
| |
·
|
our
ability to maintain listing requirements on the American Stock Exchange;
|
| |
·
|
sales
of large blocks of our common stock;
|
| |
·
|
sales
of our common stock by our executive officers, directors and significant
stockholders; and
|
| |
·
|
the
loss of any of our key scientific or management personnel.
|
The
occurrence of one or more of these factors may cause our stock price to decline,
and you may not be able to resell your shares at or above the price you paid
for
your shares. In addition, the stock markets in general, and the markets for
biotechnology and biopharmaceutical stocks in particular, have experienced
extreme volatility that has often been unrelated to the operating performance
of
particular companies. These broad market fluctuations may adversely affect
the
trading price of our common stock.
WE
ARE AT RISK OF SECURITIES CLASS ACTION LITIGATION.
In
the past, securities class action litigation has often been brought against
a
company following a decline in the market price of its securities. This risk
is
especially relevant for us because biotechnology and biopharmaceutical companies
have experienced significant stock price volatility in recent years. If we
faced
such litigation, it could result in substantial costs and a diversion of
management's attention and resources, which could harm our business.
WE
HAVE NOT PAID CASH DIVIDENDS IN THE PAST AND DO NOT EXPECT TO PAY CASH DIVIDENDS
IN THE FUTURE. ANY RETURN ON INVESTMENT MAY BE LIMITED TO THE VALUE OF OUR
STOCK.
We
have never paid cash dividends on our stock and do not anticipate paying cash
dividends on our stock in the foreseeable future. The payment of cash dividends
on our stock will depend on our earnings, financial condition and other business
and economic factors affecting us at such time as the board of directors may
consider relevant. If we do not pay cash dividends, our stock may be less
valuable because a return on your investment will only occur if our stock price
appreciates.
The
Private Securities Litigation Reform Act of 1995 (the "Act") provides a safe
harbor for forward-looking statements made by us or on our behalf. We and our
representatives may from time to time make written or oral statements that
are
"forward-looking," including statements contained in this prospectus and other
filings with the Securities and Exchange Commission, reports to our stockholders
and news releases. All statements that express expectations, estimates,
forecasts or projections are forward-looking statements within the meaning
of
the Act. In addition, other written or oral statements which constitute
forward-looking statements may be made by us or on our behalf. Words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates,"
"projects," "forecasts," "may," "should," variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve risks,
uncertainties and assumptions which are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed or forecasted
in or suggested by such forward-looking statements. Among the important factors
on which such statements are based are assumptions concerning our ability to
complete ongoing clinical trials, results of our clinical trials, the timing
of
approval of our products by the United States Food and Drug Administration,
our
ability to obtain additional financing, our ability to attract and retain key
employees, our ability to protect intellectual property, and our ability to
adapt to economic, political and regulatory conditions affecting the healthcare
industry.
The
table below sets forth information concerning the resale of the shares of common
stock by the selling stockholders. We will not receive any proceeds from the
resale of the common stock by the selling stockholders. We will receive proceeds
from the exercise of the options.
The
following table also sets forth the name of each person who is offering the
resale of shares of common stock by this prospectus, the number of shares of
common stock beneficially owned by each person, the number of shares of common
stock that may be sold in this offering and the number of shares of common
stock
each person will own after the offering, assuming they sell all of the shares
offered which they beneficially own as of the date hereof.
| |
|
Shares
Beneficially Owned
Prior
to the Offering (1)
|
|
|
|
Shares
Beneficially Owned
After
the Offering (1)
|
|
Name
|
|
Number
|
|
Percent
(2)
|
|
Total
Shares
Offered
|
|
Number
|
|
Percent
(2)
|
|
Riccardo
Dalla-Favera
|
|
—
|
|
—
|
|
81,000
|
|
—
|
|
—
|
|
Stephen
Carter
|
|
28,287
(3)
|
|
*
|
|
19,861
|
|
25,000
|
|
*
|
|
John
Brancaccio
|
|
30,707
(4)
|
|
*
|
|
31,123
|
|
25,000
|
|
*
|
|
Randall
Johnson
|
|
35,000
(5)
|
|
*
|
|
94,000
|
|
—
|
|
—
|
|
Pamela
Harris
|
|
—
|
|
—
|
|
350,000
|
|
—
|
|
—
|
|
Gary
S. Jacob
|
|
449,745
(6)
|
|
1.3%
|
|
350,000
|
|
449,745
|
|
1.3%
|
|
Donald
Picker
|
|
315,370
(7)
|
|
*
|
|
200,000
|
|
315,370
|
|
*
|
|
Bernard
Denoyer
|
|
30,000
(8)
|
|
*
|
|
75,000
|
|
30,000
|
|
*
|
|
Kunwar
Shailubhai
|
|
125,000
(9)
|
|
*
|
|
75,000
|
|
125,000
|
|
*
|
|
Daniel
D’Agostino
|
|
16,448
(10)
|
|
*
|
|
400,000
|
|
16,448
|
|
*
|
|
Christoph
Bruening
|
|
534,032
(11)
|
|
1.6%
|
|
38,500
|
|
525,699
|
|
1.6%
|
|
Gabriele
M. Cerrone
|
|
3,214,237
(12)
|
|
9.4%
|
|
375,000
|
|
3,026,737
|
|
8.8%
|
| |
*
Less than one percent.
|
| |
|
|
| |
(1)
|
The
number and percentage of shares beneficially owned is determined
in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934,
and the information is not necessarily indicative of beneficial
ownership
for any other purpose. Under such rule, beneficial ownership includes
any
shares as to which the selling stockholder has sole or shared voting
power
or investment power and also any shares, which the selling stockholder
has
the right to acquire within 60 days.
|
| |
|
|
| |
(2)
|
Based
upon 33,233,096 shares issued and outstanding as of December 23,
2005.
|
| |
|
|
| |
(3)
|
Consists
of shares of common stock issuable upon exercise of stock options.
|
| |
|
|
| |
(4)
|
Consists
of shares of common stock issuable upon exercise of stock options.
|
| |
|
|
| |
(5)
|
Consists
of shares of common stock issuable upon exercise of stock options.
|
| |
|
|
| |
(6)
|
Consists
of (i) 124,745 shares of common stock, and (ii) 325,000 shares
of common
stock issuable upon exercise of stock options.
|
| |
|
|
| |
(7)
|
Consists
of (i) 73,704 shares of common stock and (ii) 241,666 shares of
common
stock issuable upon exercise of stock options.
|
| |
(8)
|
Consists
of common stock issuable upon exercise of stock
options.
|
| |
|
|
| |
(9)
|
Consists
of common stock issuable upon exercise of stock
options.
|
| |
|
|
| |
(10)
|
Consists
of shares of common stock.
|
| |
|
|
| |
(11)
|
Consists
of (i) 475,699 shares of common stock and (ii) 58,333 shares of
common
stock issuable upon exercise of stock options.
|
| |
|
|
| |
(12)
|
Consists
of (i) 1,087,500 shares
of common stock issuable upon exercise of stock options and (ii)
2,126,737
shares of common stock held by Panetta Partners, Ltd. Mr. Cerrone
is the
sole managing partner of Panetta and in such capacity only exercises
voting and dispositive control over securities owned by Panetta.
|
Sales
of the shares may be effected by or for the account of the selling stockholders
from time to time in transactions (which may include block transactions) on
the
American Stock Exchange, in negotiated transactions, through a combination
of
such methods of sale, or otherwise, at fixed prices that may be changed, at
market prices prevailing at the time of sale or at negotiated prices. The
selling stockholders may effect such transactions by selling the shares directly
to purchasers, through broker-dealers acting as agents of the selling
stockholders, or to broker-dealers acting as agents for the selling
stockholders, or to broker-dealers who may purchase shares as principals and
thereafter sell the shares from time to time in transactions (which may include
block transactions) on the American Stock Exchange, in negotiated transactions,
through a combination of such methods of sale, or otherwise. In effecting sales,
broker-dealers engaged by a selling stockholder may arrange for other
broker-dealers to participate. Such broker-dealers, if any, may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders and/or the purchasers of the shares for whom such
broker-dealers may act as agents or to whom they may sell as principals, or
both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions).
The
selling stockholders and any broker-dealers or agents that participate with
the
selling stockholders in the distribution of the shares may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933. Any commissions
paid or any discounts or concessions allowed to any such persons, and any
profits received on the resale of the shares purchased by them may be deemed
to
be underwriting commissions or discounts under the Securities Act of
1933.
We
have agreed to bear all expenses of registration of the shares other than legal
fees and expenses, if any, of counsel or other advisors of the selling
stockholders. The selling stockholders will bear any commissions, discounts,
concessions or other fees, if any, payable to broker-dealers in connection
with
any sale of their shares.
We
have agreed to indemnify the selling stockholders, or their transferees or
assignees, against certain liabilities, including liabilities under the
Securities Act of 1933 or to contribute to payments the selling stockholders
or
their respective pledgees, donees, transferees or other successors in interest,
may be required to make in respect thereof.
The
validity of the shares of common stock offered hereby will be passed upon for
us
by Sichenzia Ross Friedman Ference LLP, 1065 Avenue of the Americas,
21st
Floor, New York, NY 10018. Sichenzia Ross Friedman Ference LLP owns an aggregate
of 22,000 shares of our common stock.
The
financial statements incorporated by reference in this prospectus have been
audited by BDO Seidman, LLP, an independent registered public accounting firm,
to the extent and for the periods set forth in their report incorporated
herein by reference, and are incorporated herein in reliance upon such report
given upon the authority of said firm as experts in auditing and
accounting.
The
Securities and Exchange Commission allows us to incorporate by reference certain
of our publicly-filed documents into this prospectus, which means that such
information is considered part of this prospectus. Information that we file
with
the SEC subsequent to the date of this prospectus will automatically update
and
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under all documents subsequently
filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 until the selling stockholders have sold all of the shares
offered hereby or such shares have been deregistered.
The
following documents filed with the SEC are incorporated herein by reference:
| |
·
|
Reference
is made to the Registrant’s quarterly report on Form 10-Q for the period
ending September 30, 2005, as filed with the SEC on November 14,
2005,
which is hereby incorporated by
reference.
|
| |
·
|
Reference
is made to the Registrant’s quarterly report on Form 10-Q for the period
ending June 30, 2005, as filed with the SEC on August 8, 2005, which
is
hereby incorporated by reference.
|
| |
·
|
Reference
is made to the Registrant’s quarterly report on Form 10-Q for the period
ending March 31, 2005, as filed with the SEC on May 16, 2005, which
is
hereby incorporated by reference.
|
| |
·
|
Reference
is made to the Registrant’s annual report on Form 10-KSB for the period
ending December 31, 2004, as filed with the SEC on March 30, 2005,
which
is hereby incorporated by
reference.
|
| |
·
|
Reference
is made to the Registrant’s annual report on Form 10-K/A for the period
ending December 31, 2004, as filed with the SEC on June 6, 2005,
which is
hereby incorporated by reference.
|
| |
·
|
Reference
is made to Registrant's 8-Ks filed with the SEC on February 3, 7,
and 14,
2005, March 15 and 30, 2005, April 8, 2005, June 15, 2005, July 7
and 22,
2005, August 26, 2005, October 21, 2005, December 6, 2005 and December
12,
2005, each of which are hereby incorporated by
reference.
|
| |
·
|
Reference
is made to the description of the Registrant's common stock as contained
in Item 1 of its Registration Statement on Form 8-A, filed with the
Commission on October 22, 2004, including all amendments and reports
filed
with the Commission for the purpose of updating such description,
which is
hereby incorporated by reference.
|
We
will provide without charge to each person to whom a copy of this prospectus
has
been delivered, on written or oral request a copy of any or all of the documents
incorporated by reference in this prospectus, other than exhibits to such
documents. Written or oral requests for such copies should be directed to Gary
S. Jacob.
Our
Certificate of Incorporation provides that to the fullest extent permitted
by
the Delaware General Corporation Law, a director of the company shall not be
personally liable to the company or its stockholders for monetary damages for
breach of fiduciary duty as a director. Under current Delaware law, liability
of
a director may not be limited (i) for any breach of the director's duty of
loyalty to the company or its stockholders, (ii) for acts or omissions not
in
good faith or that involve intentional misconduct or a knowing violation of
law,
and (iii) for any transaction from which the director derives an improper
personal benefit.
The
effect of the provision of our Certificate of Incorporation is to eliminate
the
rights of the company and its stockholders (through stockholders' derivative
suits on behalf of the company) to recover monetary damages against a director
for breach of the fiduciary duty of care as a director (including breaches
resulting from negligent or grossly negligent behavior) except in the situations
described in clauses (i) through (iii) above. This provision does not limit
or
eliminate the rights of the company or any stockholder to seek nonmonetary
relief such as an injunction or rescission in the event of a breach of a
director's duty of care. In addition, our Certificate of Incorporation provides
that the company shall indemnify to the fullest extent permitted by law its
directors, officers and employees and any other persons to which Delaware law
permits a corporation to provide indemnification against losses incurred by
any
such person by reason of the fact that such person was acting in such capacity.
We
have an insurance policy that insures our directors and officers, within the
limits and subject to the limitations of the policy, against certain expenses
in
connection with the defense of actions, suits or proceedings, and certain
liabilities that might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been
directors or officers.
This
prospectus is part of a Registration Statement on Form S-8 that we filed with
the SEC. Certain information in the Registration Statement has been omitted
from
this prospectus in accordance with the rules of the SEC. We file annual,
quarterly and special reports, proxy statements and other information with
the
SEC. You can inspect and copy the Registration Statement as well as reports,
proxy statements and other information we have filed with the SEC at the public
reference room maintained by the SEC at 100 F Street N.E. Washington, D.C.
20549, You can obtain copies from the public reference room of the SEC at 100
F
Street N.E. Washington, D.C. 20549, upon payment of certain fees. You can call
the SEC at 1-800-732-0330 for further information about the public reference
room. We are also required to file electronic versions of these documents with
the SEC, which may be accessed through the SEC's World Wide Web site at
http://www.sec.gov. No dealer, salesperson or other person is authorized to
give
any information or to make any representations other than those contained in
this prospectus, and, if given or made, such information or representations
must
not be relied upon as having been authorized by us. This prospectus does not
constitute an offer to buy any security other than the securities offered by
this prospectus, or an offer to sell or a solicitation of an offer to buy any
securities by any person in any jurisdiction where such offer or solicitation
is
not authorized or is unlawful. Neither delivery of this prospectus nor any
sale
hereunder shall, under any circumstances, create any implication that there
has
been no change in the affairs of our company since the date hereof.
CALLISTO
PHARMACEUTICALS, INC.
2,089,484
SHARES OF COMMON STOCK
PROSPECTUS
December
23, 2005
PART
II
INFORMATION
REQUIRED IN THE REGISTRATION STATEMENT
Item
3. Incorporation of Documents by Reference.
The
Registrant hereby incorporates by reference into this Registration Statement
the
documents listed below. In addition, all documents subsequently filed pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the
date
of filing of such documents:
| |
·
|
Reference
is made to the Registrant’s quarterly report on Form 10-Q for the period
ending September 30, 2005, as filed with the SEC on November 14,
2005,
which is hereby incorporated by
reference.
|
| |
·
|
Reference
is made to the Registrant’s quarterly report on Form 10-Q for the period
ending June 30, 2005, as filed with the SEC on August 8, 2005, which
is
hereby incorporated by reference.
|
| |
·
|
Reference
is made to the Registrant’s quarterly report on Form 10-Q for the period
ending March 31, 2005, as filed with the SEC on May 16, 2005, which
is
hereby incorporated by reference.
|
| |
·
|
Reference
is made to the Registrant’s annual report on Form 10-KSB for the period
ending December 31, 2004, as filed with the SEC on March 30,
2005, which
is hereby incorporated by
reference.
|
| |
·
|
Reference
is made to the Registrant’s annual report on Form 10-K/A for the
period ending December 31, 2004, as filed with the SEC on June 6,
2005,
which is hereby incorporated by
reference.
|
| |
·
|
Reference
is made to Registrant's 8-Ks filed with the SEC on February 3, 7,
and 14,
2005, March 15 and 30, 2005, April 8, 2005, June 15, 2005, July 7
and 22,
2005, August 26, 2005, October 21, 2005, December 6, 205 and December
12,
2005, each of which are hereby incorporated by
reference.
|
| |
·
|
Reference
is made to the description of the Registrant's common stock as contained
in Item 1 of its Registration Statement on Form 8-A, filed with the
Commission on October 22, 2004, including all amendments and reports
filed
with the Commission for the purpose of updating such description,
which is
hereby incorporated by reference.
|
Item
4. Description of Securities.
Not
Applicable.
Item
5. Interests of Named Experts and Counsel.
The
validity of the shares of common stock offered hereby will be passed upon for
the Registrant by Sichenzia Ross Friedman Ference LLP, 1065 Avenue of Americas,
21st
flr., New York, NY 10018. Sichenzia Ross Friedman Ference LLP owns an aggregate
of 22,000 shares of the Registrant’s common stock.
Item
6. Indemnification of Directors and Officers.
Callisto
Pharmaceuticals, Inc.'s Certificate of Incorporation provides that to the
fullest extent permitted by the Delaware General Corporation Law, a director
of
the company shall not be personally liable to the company or its stockholders
for monetary damages for breach of fiduciary duty as a director. Under current
Delaware law, liability of a director may not be limited (i) for any breach
of
the director's duty of loyalty to the company or its stockholders, (ii) for
acts
or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, and (iii) for any transaction from which the director
derives an improper personal benefit.
The
effect of the provision of Callisto’s Certificate of Incorporation is to
eliminate the rights of the company and its stockholders (through stockholders'
derivative suits on behalf of the company) to recover monetary damages against
a
director for breach of the fiduciary duty of care as a director (including
breaches resulting from negligent or grossly negligent behavior) except in
the
situations described in clauses (i) through (iii) above. This provision does
not
limit or eliminate the rights of the company or any stockholder to seek
nonmonetary relief such as an injunction or rescission in the event of a breach
of a director's duty of care. In addition, Callisto’s Certificate of
Incorporation provides that the company shall indemnify to the fullest extent
permitted by law its directors, officers and employees and any other persons
to
which Delaware law permits a corporation to provide indemnification against
losses incurred by any such person by reason of the fact that such person was
acting in such capacity.
Callisto
has an insurance policy that insures its directors and officers, within the
limits and subject to the limitations of the policy, against certain expenses
in
connection with the defense of actions, suits or proceedings, and certain
liabilities that might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been
directors or officers.
Item
7. Exemption from Registration Claimed.
All
shares of common stock registered hereunder for reoffer or resale, have been
or
will be issued upon exercise of options granted pursuant to the Registrant’s
1996 Incentive and Non-Qualified Stock Option Plan, 2005 Equity Compensation
Incentive Plan, and its Non-Plan Executive and Director Options. The options
are
non-transferable and the underlying shares were and will be issued in
transactions not involving a public offering. Upon exercise of an option, the
optionee is required to execute an undertaking not to resell such shares except
pursuant to an effective registration statement or other exemption under the
Act, a restrictive legend is placed on the certificates for the shares of common
stock purchased and transfer stops are placed against such certificates. Such
shares may only be reoffered and sold pursuant to registration under the Act
or
pursuant to an applicable exemption under the Act. As a result, such offers
and
sales are exempt from the registration requirements of the Act pursuant to
the
provisions of Section 4(2) of the Act.
Item
8. Exhibits.
| |
EXHIBIT
NUMBER
|
EXHIBIT
|
| |
|
|
| |
4.1
|
1996
Incentive and Non-Qualified Stock Option Plan (1)
|
| |
|
|
| |
4.2
|
2005
Equity Compensation Incentive Plan (2)
|
| |
|
|
| |
4.3
|
2005
Directors’ Stock Option Plan (3)
|
| |
|
|
| |
4.4
|
Form
of Non-Plan Stock Option Agreement (4)
|
| |
|
|
| |
5.1
|
Opinion
of Sichenzia Ross Friedman Ference LLP.
|
| |
|
|
| |
23.1
|
Consent
of Sichenzia Ross Friedman Ference LLP is contained in Exhibit
5.1.
|
| |
|
|
| |
23.2
|
Consent
of BDO Seidman, LLP.
|
| |
|
|
| |
24.1
|
Power
of Attorney (Included on signature page).
|
| |
|
| |
(1)
Incorporated
by reference to Exhibit 4.1 filed with the Company's Current Report
on
Form 8-K filed on April 30, 2003.
|
| |
(2)
Incorporated by reference to Appendix B filed with the Company's
Definitive Proxy Statement on Schedule 14A filed on August 31,
2005.
|
| |
(3)
Incorporated by reference to Appendix C filed with the Company's
Definitive Proxy Statement on Schedule 14A filed on August 31,
2005.
|
| |
(4)
Incorporated by reference to Exhibit 4.3 filed with the Company's
Registration Statement on Form S-8 filed on October 4,
2004.
|
Item
9. Undertakings.
(a)
The undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee”
table in the effective registration statement;
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
Provided,
however,
that paragraphs (1)(i), and (1)(ii) do not apply if
the Registration Statement is on Form S-8 and if
the information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission
by
the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That,
for purposes of determining any liability under the Securities Act of 1933,
each
filing of the registrant’s annual report pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an
employee benefit plan’s annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering
thereof.
(5) That,
for the purpose of determining liability under the Securities Act of 1933 to
any
purchaser:
(A) Each
prospectus filed by a Registrant pursuant to Rule 424(b)(3) shall be deemed
to be part of the registration statement as of the date the filed prospectus
was
deemed part of and included in the registration statement; and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or
(b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i),
(vii) or
(x) for the purpose of providing the information required by Section 10(a)
of the Securities Act of 1933 shall be deemed to be part of and included in
the
registration statement as of the earlier of the date such form of prospectus
is
first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in
Rule 430B, for liability purposes of the issuer and any person that is at
that date an underwriter, such date shall be deemed to be a new effective date
of the registration statement relating to the securities in the registration
statement to which the prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering
thereof. Provided,
however,
that no statement made in a registration statement or prospectus that is part
of
the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus that
is
part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or modify any statement
that was made in the registration statement or prospectus that was part of
the
registration statement or made in any such document immediately prior to such
effective date.
(6)
That, for the purpose of determining liability of a Registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities, each undersigned Registrant undertakes that in a primary offering
of
securities of an undersigned Registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means
of
any of the following communications, the undersigned Registrant will be a seller
to the purchaser and will be considered to offer or sell such securities to
such
purchaser:
(i) Any
preliminary prospectus or prospectus of an undersigned Registrant relating
to
the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of
an
undersigned Registrant or used or referred to by an undersigned Registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about an undersigned Registrant or its securities provided
by or on behalf of an undersigned Registrant; and
(iv) Any
other communication that is an offer in the offering made by an undersigned
Registrant to the purchaser.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and
is, therefore, unenforceable.
In
the event that a claim for indemnification against such liabilities (other
than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and
will be governed by the final adjudication of such issue.
SIGNATURES
In
accordance with the requirements of the Securities Act of 1933, as amended,
the
registrant certifies that it has reasonable grounds to believe that it meets
all
of the requirements for filing on Form S-8 and has duly caused this Form
S-8 to be signed on its behalf by the undersigned, thereunto duly authorized,
in
the City of New York, State of New York, on December 27, 2005.
| |
|
|
| |
CALLISTO
PHARMACEUTICALS, INC. |
|
|
|
| |
By: |
/s/ Gary
S.
Jacob |
| |
|
| |
Gary
S.
Jacob,
Chief Executive
Officer
|
KNOW
ALL
MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Gabriele M. Cerrone and Gary S. Jacob, and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in
any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and any subsequent registration
statements pursuant to the Securities Act of 1933 and to file the same, with
all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that each of said attorney-in-fact
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
In
accordance with the requirements of the Securities Act of 1933, as amended,
this
Form S-8 has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/
Gary S. Jacob
Gary
S. Jacob
|
|
Chief
Executive Officer and Director
(Principal
Executive Officer)
|
|
December
27,
2005
|
| |
|
|
|
|
|
/s/
Bernard Denoyer
Bernard
Denoyer
|
|
Vice
President, Finance
(Principal
Financial and Accounting Officer)
|
|
December
27,
2005
|
| |
|
|
|
|
|
/s/
Gabriele M. Cerrone
Gabriele
M. Cerrone
|
|
Chairman
of the Board
|
|
December
27,
2005
|
| |
|
|
|
|
|
/s/
Christoph Bruening
Christoph
Bruening
|
|
Director
|
|
December
27,
2005
|
| |
|
|
|
|
|
/s/
John P. Brancaccio
John
P. Brancaccio
|
|
Director
|
|
December
27,
2005
|
| |
|
|
|
|
|
/s/
Stephen Carter
Stephen
Carter
|
|
Director
|
|
December
27,
2005
|
| |
|
|
|
|
|
/s/
Randall K. Johnson
Randall
K. Johnson
|
|
Director
|
|
December
27,
2005
|
| |
|
|
|
|
|
Riccardo
Dalla-Favera
|
|
Director
|
|
December
___, 2005
|
| |
EXHIBIT
NUMBER
|
EXHIBIT |
| |
|
|
| |
4.1
|
1996
Incentive and Non-Qualified Stock Option Plan (1)
|
| |
|
|
| |
4.2
|
2005
Equity Compensation Incentive Plan (2)
|
| |
|
|
| |
4.3
|
2005
Directors’ Stock Option Plan (3)
|
| |
|
|
| |
4.4
|
Form
of Non-Plan Stock Option Agreement (4)
|
| |
|
|
| |
5.1
|
|
| |
|
|
| |
23.1
|
Consent
of Sichenzia Ross Friedman Ference LLP is contained in Exhibit
5.1.
|
| |
|
|
| |
23.2
|
|
| |
|
|
| |
24.1
|
Power
of Attorney (Included on signature page).
|
| |
|
| |
(1)
Incorporated
by reference to Exhibit 4.1 filed with the Company's Current Report
on
Form 8-K filed on April 30, 2003.
|
| |
(2)
Incorporated by reference to Appendix B filed with the Company's
Definitive Proxy Statement on Schedule 14A filed on August 31,
2005.
|
| |
(3)
Incorporated by reference to Appendix C filed with the Company's
Definitive Proxy Statement on Schedule 14A filed on August 31,
2005.
|
| |
(4)
Incorporated by reference to Exhibit 4.3 filed with the Company's
Registration Statement on Form S-8 filed on October 4,
2004.
|