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EX-23.2 - EX-23.2 - Cascadian Therapeutics, Inc. | v58606a2exv23w2.htm |
EX-23.1 - EX-23.1 - Cascadian Therapeutics, Inc. | v58606a2exv23w1.htm |
Table of Contents
As
filed with the Securities and Exchange Commission on March 14, 2011
Registration No. 333-169746
Registration No. 333-169746
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
AMENDMENT NO. 2
TO
TO
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
Under
The Securities Act of 1933
ONCOTHYREON INC.
(Exact name of Registrant as specified in its charter)
Delaware | 8731 | 26-0868560 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
2601 Fourth Ave., Suite 500
Seattle, Washington
(206) 801-2100
(Address, including zip code, and telephone number, including area code, of Registrants principal executive offices)
Robert L. Kirkman, M.D.,
Chief Executive Officer
Oncothyreon Inc.
2601 Fourth Ave., Suite 500
Seattle, Washington
(206) 801-2100
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Patrick J. Schultheis
Michael Nordtvedt
Wilson Sonsini Goodrich & Rosati,
Professional Corporation
701 Fifth Avenue, Suite 5100
Seattle, Washington 98104
(206) 883-2500
Seattle, Washington
(206) 801-2100
(Address, including zip code, and telephone number, including area code, of Registrants principal executive offices)
Robert L. Kirkman, M.D.,
Chief Executive Officer
Oncothyreon Inc.
2601 Fourth Ave., Suite 500
Seattle, Washington
(206) 801-2100
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Patrick J. Schultheis
Michael Nordtvedt
Wilson Sonsini Goodrich & Rosati,
Professional Corporation
701 Fifth Avenue, Suite 5100
Seattle, Washington 98104
(206) 883-2500
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. þ
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one): o
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to
said Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. The selling
stockholder may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
SUBJECT
TO COMPLETION, DATED MARCH 14, 2011
PROSPECTUS
7,425,017 Shares
Common Stock
This prospectus relates to the disposition from time to time of an aggregate of 7,425,017
shares of our common stock, including shares issuable upon the exercise of warrants to purchase our
common stock, and relates to the resale of such shares by the selling stockholders identified in
this prospectus.
The selling stockholders or their permitted transferees or other successors-in-interest may,
but are not required to, sell their holdings of our common stock in a number of different ways and
at varying prices as determined by the prevailing market price for shares or in negotiated
transactions. See Plan of Distribution on page 37 for a description of how the selling
stockholders may dispose of the shares covered by this prospectus. We do not know when or in what
amount the selling stockholders may offer the shares for sale.
We will not receive any of the proceeds from the sale of our shares by the selling
stockholders pursuant to this prospectus. We have agreed to pay certain expenses related to the
registration of the offer and sale of the shares of common stock pursuant to the registration
statement of which this prospectus forms a part.
Our common stock is listed on The NASDAQ Global Market under the symbol ONTY. The last
reported sale price of our common stock on The NASDAQ Global Market
on March 14, 2011 was $3.49 per share.
Investing in our common stock involves a high degree of risk. Please see the sections entitled
Risk Factors beginning on page 5 of this prospectus and Part II Item 1A Risk Factors in
our Annual Report on Form 10-K for the year ended December 31, 2010.
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 , 2011.
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This prospectus is part of a registration statement on Form S-1 that we filed with the
Securities and Exchange Commission, or the SEC, using the shelf registration process. Under this
process, the selling stockholders may from time to time, in one or more offerings, sell the common
stock described in this prospectus.
You should rely only on the information contained in or incorporated by reference into this
prospectus (as supplemented and amended). We have not authorized anyone to provide you with
different information. This document may only be used where it is legal to sell these securities.
You should not assume that the information contained in this prospectus is accurate as of any date
other than its date regardless of the time of delivery of the prospectus or any sale of our common
stock.
We urge you to read carefully this prospectus (as supplemented and amended), together with the
information incorporated herein by reference as described under the heading Information
Incorporated by Reference, before deciding whether to invest in any of the common stock being
offered.
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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus or incorporated
herein by reference. This summary is not complete and does not contain all of the information that
you should consider before deciding to invest in our securities. We urge you to read this entire
prospectus and the information incorporated by reference herein carefully, including the Risk
Factors section.
Oncothyreon Inc.
Overview
We are a clinical-stage biopharmaceutical company focused primarily on the development of
therapeutic products for the treatment of cancer. Our goal is to develop and commercialize novel
synthetic vaccines and targeted small molecules that have the potential to improve the lives and
outcomes of cancer patients. Our cancer vaccines are designed to stimulate the immune system to
attack cancer cells, while our small molecule compounds are designed to inhibit the activity of
specific cancer-related proteins. We are advancing our product candidates through in-house
development efforts and strategic collaborations.
We believe the quality and breadth of our product candidate pipeline, strategic collaborations
and scientific team will potentially enable us to become an integrated biopharmaceutical company
with a diversified portfolio of novel, commercialized therapeutics for major diseases.
Our lead product candidate, Stimuvax, is being evaluated in two Phase 3 clinical trials for
the treatment of non-small cell lung cancer, or NSCLC. We have granted an exclusive, worldwide
license to Merck KGaA of Darmstadt, Germany, or Merck KGaA, for the development, manufacture and
commercialization of Stimuvax. Our pipeline of clinical stage proprietary small molecule product
candidates was acquired by us in October 2006 from ProlX Pharmaceuticals Corporation, or ProlX. We
are currently focusing our internal development efforts on PX-866, for which we initiated two Phase
1/2 trials in 2010, and plan to initiate two additional Phase 2 trials in the first half of 2011.
As of the date of this prospectus, we have not licensed any rights to our small molecules to any
third party and retain all development, commercialization and manufacturing rights. We are also
conducting preclinical development of ONT-10 (formerly BGLP40), a cancer vaccine directed against a
target similar to Stimuvax, and which is proprietary to us. In addition to our product candidates,
we have developed novel vaccine technology we may further develop ourselves and/or license to
others.
Corporate Information
Oncothyreon Inc. is the successor corporation to Biomira Inc. On August 23, 1985, Biomira Inc.
was incorporated under the Canada Business Corporations Act. Oncothyreon Inc. was incorporated in
the state of Delaware on September 7, 2007. On December 10, 2007, Oncothyreon became the successor
corporation to Biomira by way of an arrangement effected pursuant to Canadian law. Our executive
office is located at 2601 Fourth Avenue, Suite 500, Seattle, Washington 98121 and our telephone
number is (206) 801-2100. We maintain an Internet website at www.oncothyreon.com. We have not
incorporated the information on our website by reference into this prospectus, and you should not
consider it to be a part of this prospectus.
We carry on our business directly and through our subsidiaries. Throughout this prospectus,
unless the context specifies or implies otherwise, the terms Company, Oncothyreon, Biomira,
we, us, and our refer to Oncothyreon Inc., its predecessor, Biomira Inc., and its
subsidiaries.
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The Offering
The selling stockholders named in this prospectus may offer and sell up to 7,425,017 shares of
our common stock. Our common stock is listed on The NASDAQ Global Market under the symbol ONTY.
Shares of common stock that may be offered in this offering, when issued and paid for, will be
fully paid and non-assessable. We will not receive any of the proceeds of sales by the selling
stockholders of any of the common stock covered by this prospectus. Any proceeds we receive from
the exercise of warrants to purchase the shares included in the shares that are being offered by
the selling stockholders hereunder will be used for general corporate purposes. See Use of
Proceeds on page 28.
Throughout this prospectus, when we refer to the shares of our common stock, the offer and
sale of which are being registered on behalf of the selling stockholders, we are referring to the
shares of common stock that have been issued to the stockholders listed in Selling Stockholders
on page 34, pursuant to the securities purchase agreement described below. When we refer to the
selling stockholders in this prospectus, we are referring to the investors in our 2010 private
placement and, as applicable, any donees, pledgees, transferees or other successors-in-interest
selling shares received after the date of this prospectus from the investors in our 2010 private
placement as a gift, pledge, or other non-sale related transfer.
2010 Private Placement
On September 23, 2010, we entered into a securities purchase agreement with 17 investors in a
private placement transaction, pursuant to which we sold an aggregate of 4,242,870 units, with each
unit comprised of one share of common stock and a warrant to purchase 0.75 of a share of common
stock, at a purchase price of $3.50 per unit. The gross proceeds of such private placement was an
aggregate of approximately $14.9 million. JMP Securities LLC acted as the lead placement agent and
ROTH Capital Partners, LLC as the co-agent for the private placement transaction. As compensation
for serving as placement agents in the transaction, we paid the placement agents a cash commission
equal to 6% of the gross proceeds of the private placement ($50,000 of which was previously paid to
JMP Securities LLC as a retainer fee and was credited against the portion of the cash commission
paid to JMP Securities LLC) and agreed to reimburse them for certain of their expenses up to a
maximum of $75,000.
Pursuant to the terms of the securities purchase agreement, for a period beginning on the
later of (i) 90 days following the closing of the private placement transaction and (ii) 30 days
after the registration statement filed pursuant to the registration rights agreement (discussed
below) is declared effective by the SEC until the first anniversary date of the earlier of (i) the
date on which the shares of common stock underlying the warrants may be freely resold pursuant to a
resale registration statement and (ii) the date on which the shares of common stock underlying the
warrants may be sold under Rule 144, promulgated under the Securities Act, without any restriction
or limitation and without the requirement to be in compliance with Rule 144(c)(1), the investors
will have the right, subject to certain restrictions, to participate in subsequent issuances of
shares of our common stock or securities convertible into or exchangeable or exercisable for shares
of our common stock. The securities purchase agreement also contains indemnification provisions by
us, which are customary for transactions of this type.
Each warrant that comprises a part of such units has an exercise price of $4.24 per share and
is exercisable, in whole or in part, at any time or from time to time on or after the six-month
anniversary of the closing of the 2010 private placement through and including the five year
anniversary of the earlier of (i) the date on which the shares of common stock underlying the
warrants may be freely resold pursuant to a resale registration statement and (ii) the date on
which the shares of common stock underlying the warrants may be sold under Rule 144, promulgated
under the Securities Act, without any restriction or limitation and without the requirement to be
in compliance with Rule 144(c)(1). Upon the occurrence of a fundamental transaction
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(as defined in the warrants), including, but not limited to, certain transactions constituting
a change in control or a sale of all or substantially all of our assets, a holder may request prior
to the 30th day following the consummation of the fundamental transaction that we or the successor
entity in such fundamental transaction purchase the warrant for a cash payment equal to the Black
Scholes value of the remaining unexercised portion of such warrant calculated as of the date of the
fundamental transaction. The warrants also contain a cashless exercise feature that allows the
holders to exercise such warrants by surrendering a number of shares underlying the portion of the
warrant being exercised with a fair market value equal to the aggregate exercise price payable to
us if, on the date of any exercise, there is not an effective registration statement registering,
or no current prospectus available for, the resale of the shares of common stock underlying the
warrants. Upon exercise of the warrants, we must promptly (and in no event later than three trading
days after the exercise date) issue to the exercising warrant holder the shares of common stock
underlying the portion of the warrants exercised. If we fail to deliver such shares of common stock
by the close of the third trading day after the exercise date and, if prior to the receipt of such
shares of common stock, the warrant holder purchases (in an open market transaction) shares of our
common stock to deliver in satisfaction of a sale by such warrant holder of the shares of common
stock underlying the portion of the warrants exercised, then within three trading days after
receipt of the warrant holders request, we must either:
| pay in cash to the warrant holder an amount equal to such warrant holders total purchase price (including brokerage commissions, if any, that are reasonably documented in such warrant holders request) for the shares of common stock purchased on the open market, at which point our obligation to deliver the shares of common stock underlying the portion of the warrants exercised will terminate; or | ||
| promptly honor our obligation to deliver the shares of common stock underlying the portion of the warrants exercised and pay cash to the warrant holder in an amount equal to the excess (if any) of such warrant holders total purchase price (including brokerage commissions, if any, that are reasonably documented in such warrant holders request) for the shares of common stock purchased on the open market over the product of (A) the number of shares of common stock purchased on the open market, times (B) the closing bid price of a share of our common stock on the exercise date. |
In connection with the 2010 private placement, we entered into a registration rights
agreement, pursuant to which we agreed to file with the SEC a registration statement, of which this
prospectus is a part, to cover the resale of the common stock issued in connection with the 2010
private placement and the shares of common stock that will be issued upon exercise of the warrants,
within 10 calendar days after the closing of the 2010 private placement, or the filing deadline. We
agreed to use our commercially reasonable efforts to have the registration statement, of which this
prospectus is a part, declared effective as soon as practicable, but, in any event, no later than
90 days after the closing (or, in the event the SEC reviews and has written comments to the
registration statement, 120 days after the closing). We also agreed to use commercially reasonable
efforts to keep the registration statement continuously effective until the earliest of: (i) such
time as all of the shares and the shares of common stock underlying the warrants have been sold by
the investors; (ii) the date that all the shares and the shares of common stock underlying the
warrants become eligible for resale under Rule 144 of the Securities Act, without the requirement
that we be in compliance with the current public information requirements and without volume or
manner-of-sale restrictions, pursuant to a written opinion letter to such effect, addressed,
delivered and acceptable to our transfer agent; and (iii) the second anniversary of the closing of
the 2010 private placement (subject to extension in certain circumstances).
Upon the occurrence of certain events, constituting defaults under the registration rights
agreement, we have agreed to pay each security holder party to the registration rights agreement as
liquidated damages an
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amount equal to 1% of the purchase price paid by each such security holder on a monthly basis
or portion thereof during which such default remains uncured, or a penalty period. Such defaults
include the following:
| If, after the effective date of the registration statement, the registration statement ceases to remain continuously effective or the holders are not permitted to use the prospectus contained in the registration statement to resell the shares for more than an aggregate of 30 consecutive calendar days (or 45 consecutive calendar days if we receive comments on our Annual Report on Form 10-K for the year ended December 31, 2010) or 60 calendar days during any 12-month period. | ||
| Failure to satisfy the current public information requirement required under Rule 144 of the Securities Act. |
Pursuant to the registration rights agreement, following the effectiveness of the registration
statement, of which this prospectus is a part, we will be permitted to suspend the effectiveness of
such registration statement by giving notice to the security holders, for a period not to exceed
the time periods described in the third bullet point of the immediately preceding paragraph, in any
of the following cases:
| The SEC or any other federal or state governmental authority issues any stop order suspending the effectiveness of such registration statement. | ||
| We receive any notification with respect to the suspension of the qualification or exemption from qualification of any of the shares for sale in any jurisdiction. | ||
| The financial statements included in such registration statement are ineligible for inclusion in such registration statement for any reason or any statement made in such registration statement or the prospectus therein or any document incorporated therein by reference is untrue in any material respect. | ||
| If there is any pending corporate development with respect to us that we believe may be material and that, in our determination, makes it not in our best interest to allow continued availability of the registration statement or the prospectus herein. |
The registration rights agreement also contains mutual indemnifications by us and each
security holder party thereto customary for transactions of this type.
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RISK FACTORS
Investors should carefully consider the risks described below before deciding whether to
invest in our securities. The risks described below are not the only ones we face. If any of the
following risks actually occurs, our business, financial condition or results of operations could
be adversely affected. In such case, the trading price of our common stock could decline and you
could lose all or part of your investment. Our actual results could differ materially from those
anticipated in the forward-looking statements made throughout this prospectus as a result of
different factors, including the risks we face described below.
Risks Relating to our Business
Our near-term success is highly dependent on the success of our lead product candidate, Stimuvax,
and we cannot be certain that it will be successfully developed or receive regulatory approval or
be successfully commercialized.
Our lead product candidate, Stimuvax, is being evaluated in Phase 3 clinical trials for the
treatment of non-small cell lung cancer, or NSCLC, and, until the March 2010 suspension of clinical
trials, was being evaluated in a global Phase 3 trial in breast cancer. The March 2010 suspension
by Merck KGaA of the clinical development program for Stimuvax was the result of a suspected
unexpected serious adverse event reaction in a patient with multiple myeloma participating in an
exploratory clinical trial. In June 2010, we announced that the U.S. Food and Drug Administration,
or FDA, lifted the clinical hold it had placed on the Phase 3 clinical trials in NSCLC. Merck KGaA
has resumed the treatment and enrollment in these trials for Stimuvax in NSCLC. The clinical hold
on the Stimuvax trial in breast cancer remains in effect and Merck KGaA has discontinued the Phase
3 trial in breast cancer. Stimuvax will require the successful completion of the ongoing NSCLC
trials and possibly other clinical trials before submission of a biologic license application, or
BLA, or its foreign equivalent for approval. This process can take many years and require the
expenditure of substantial resources. Pursuant to our agreement with Merck KGaA, Merck KGaA is
responsible for the development and the regulatory approval process and any subsequent
commercialization of Stimuvax. We cannot assure you that Merck KGaA will continue to advance the
development and commercialization of Stimuvax as quickly as would be optimal for our stockholders.
In addition, Merck KGaA has the right to terminate the 2008 license agreement upon 30 days prior
written notice if, in its reasonable judgment, it determines there are issues concerning the safety
or efficacy of Stimuvax that would materially and adversely affect Stimuvaxs medical, economic or
competitive viability. Clinical trials involving the number of sites and patients required for FDA
approval of Stimuvax may not be successfully completed. If these clinical trials fail to
demonstrate that Stimuvax is safe and effective, it will not receive regulatory approval. Even if
Stimuvax receives regulatory approval, it may never be successfully commercialized. If Stimuvax
does not receive regulatory approval or is not successfully commercialized, or if Merck were to
terminate the 2008 license agreement, we may not be able to generate revenue, become profitable or
continue our operations. Any failure of Stimuvax to receive regulatory approval or be successfully
commercialized would have a material adverse effect on our business, operating results, and
financial condition and could result in a substantial decline in the price of our common stock.
We understand that Merck KGaA intends to submit for regulatory approval of Stimuvax for the
treatment of NSCLC based on the results of a single Phase 3 trial, the START study. If the FDA
determines that the results of this single study do not demonstrate the efficacy of Stimuvax with a
sufficient degree of statistical certainty, the FDA may require an additional Phase 3 study to be
performed prior to regulatory approval. Such a trial requirement would delay or prevent
commercialization of Stimuvax and could result in the
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termination by Merk KGaA of our license agreement with them. In addition, there can be no
guarantee that the results of an additional trial would be supportive of the results of the START
trial.
Stimuvax and ONT-10 are based on novel technologies, which may raise new regulatory issues that
could delay or make FDA approval more difficult.
The process of obtaining required FDA and other regulatory approvals, including foreign
approvals, is expensive, often takes many years and can vary substantially based upon the type,
complexity and novelty of the products involved. Stimuvax and ONT-10 are novel; therefore,
regulatory agencies may lack experience with them, which may lengthen the regulatory review
process, increase our development costs and delay or prevent commercialization of Stimuvax and our
other active vaccine products under development.
To date, the FDA has approved for commercial sale in the United States only one active vaccine
designed to stimulate an immune response against cancer. Consequently, there is limited precedent
for the successful development or commercialization of products based on our technologies in this
area.
The suspension of Mercks clinical development program for Stimuvax could severely harm our
business.
In March 2010, we announced that Merck KGaA suspended the clinical development program for
Stimuvax as the result of a suspected unexpected serious adverse event reaction in a patient with
multiple myeloma participating in an exploratory clinical trial. The suspension was a
precautionary measure while an investigation of the cause of the adverse event was conducted, but
it affected the Phase 3 clinical trials in NSCLC and in breast cancer. In June 2010, we announced
that the FDA, lifted the clinical hold it had placed on the Phase 3 clinical trials in NSCLC.
Merck KGaA has resumed the treatment and enrollment in these trials for Stimuvax in NSCLC. The
clinical hold on the Stimuvax trial in breast cancer remains in effect and Merck KGaA has
discontinued the Phase 3 trial in breast cancer.
As of the date of this prospectus, we can offer no assurances that this serious adverse event
was not caused by Stimuvax or that there are not or will not be more such serious adverse events in
the future. The occurrence of this serious adverse event, or other such serious adverse events,
could result in a prolonged delay, including the need to enroll more patients or collect more data,
or the termination of the clinical development program for Stimuvax. For example, we have been
informed that Merck KGaA
plans to increase the size of the START
trial of Stimuvax® in NSCLC from an estimated number of 1322 to 1476 patients as part of a plan to maintain the
statistical power of the trial. This change was agreed in consultation with the U.S. Food and
Drug Administration (the FDA), and the Special Protocol Agreement (SPA)
for START has been amended to reflect the change.
Another unexpected serious adverse event reaction could cause a
similar suspension of clinical trials in the future. Any of these foregoing risks could materially
and adversely affect our business, results of operations and the trading price of our common stock.
The terms of our secured debt facility may restrict our current and future operations, particularly
our ability to respond to changes or to take some actions, and our failure to comply with such
covenants, whether due to events beyond our control or otherwise, could result in an event of
default which could materially and adversely affect our operating results and our financial
condition.
In February 2011 we borrowed $5.0 million pursuant to the terms of a loan and security
agreement, or the loan agreement, with General Electric Capital Corporation, or GECC. In addition,
at any time before November 1, 2011 we may, at our sole option, borrow from GECC an additional $7.5
million, subject to our satisfaction of specified conditions precedent. The loan agreement with
GECC contains certain restrictive covenants that limit or restrict our ability to incur
indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make
acquisitions, enter into certain transactions with affiliates, pay dividends or make distributions,
or repurchase stock. The loan agreement also requires that we have 12 months of
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unrestricted cash and cash equivalents (as calculated in the loan agreement) as of each
December 31 during the term of the loan agreement. A breach of any of these covenants or the
occurrence of certain other events of default, which are customary in similar loan facilities,
would result in a default under the loan agreement. If there was an uncured event of default, GECC
could cause all amounts outstanding under the loan agreement to become due and payable immediately
and could proceed against the collateral securing the indebtedness, including our cash, cash
equivalents and short-term investments. We cannot be certain that our assets would be sufficient
to fully repay borrowings under the loan agreement, either upon maturity or acceleration upon an
uncured event of default.
Our ability to continue with our planned operations is dependent on our success at raising
additional capital sufficient to meet our obligations on a timely basis. If we fail to obtain
additional financing when needed, we may be unable to complete the development, regulatory approval
and commercialization of our product candidates.
We have expended and continue to expend substantial funds in connection with our product
development activities and clinical trials and regulatory approvals. The very limited funds
generated currently from our operations will be insufficient to enable us to bring all of our
products currently under development to commercialization. Accordingly, we need to raise
additional funds from the sale of our securities, partnering arrangements or other financing
transactions in order to finance the commercialization of our product candidates. The current
financing environment in the United States, particularly for biotechnology companies like us,
remains challenging and we can provide no assurances as to when such environment will improve. For
these reasons, among others, we cannot be certain that additional financing will be available when
and as needed or, if available, that it will be available on acceptable terms. For example,
pursuant to the terms of the loan agreement with GECC, we may borrow an additional $7.5 million at
any time before November 1, 2011, subject to our satisfaction of certain specified conditions
precedent. We cannot guarantee that we will be able to satisfy such conditions and, thus, the
additional $7.5 million may be unavailable. If financing is available, it may be on terms that
adversely affect the interests of our existing stockholders or restrict our ability to conduct our
operations. If adequate financing is not available, we may need to continue to reduce or eliminate
our expenditures for research and development, testing, production and marketing for some of our
product candidates. Our actual capital requirements will depend on numerous factors, including:
| activities and arrangements related to the commercialization of our product candidates; | ||
| the progress of our research and development programs; | ||
| the progress of pre-clinical and clinical testing of our product candidates; | ||
| the time and cost involved in obtaining regulatory approvals for our product candidates; | ||
| the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights with respect to our intellectual property; | ||
| the effect of competing technological and market developments; | ||
| the effect of changes and developments in our existing licensing and other relationships; and | ||
| the terms of any new collaborative, licensing and other arrangements that we may establish. |
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We may not be able to secure sufficient financing on acceptable terms. If we cannot, we may
need to delay, reduce or eliminate some or all of our research and development programs, any of
which would be expected to have a material adverse effect on our business, operating results, and
financial condition.
Further, since we failed to timely file our Annual Report on Form 10-K for the year ended
December 31, 2009, we are ineligible to utilize a registration statement on Form S-3 to raise
capital and will continue to be ineligible to use such registration statement until at least April
1, 2011. Our inability to take advantage of the benefits afforded by Form S-3 will limit our
financing alternatives and may significantly increase our cost of capital or the dilutive impact on
the voting and economic interests of our existing stockholders, as transactions effected using a
registration statement on Form S-3 are simpler and less costly to execute and may be perceived by
potential investors as being more attractive than those effected in a different manner. If
financing is available, the terms of such financing may place restrictions on us and adversely
affect the trading price of our common stock and the interests of our existing stockholders.
We have a history of net losses, we anticipate additional losses and we may never become
profitable.
Other than the year ended December 31, 2008, we have incurred net losses in each fiscal year
since we commenced our research activities in 1985. The net income we realized in 2008 was due
entirely to our December 2008 transactions with Merck KGaA and we do not anticipate realizing net
income again for the foreseeable future. As of December 31, 2010, our accumulated deficit was
approximately $347.3 million. Our losses have resulted primarily from expenses incurred in
research and development of our product candidates. We do not know when or if we will complete our
product development efforts, receive regulatory approval for any of our product candidates, or
successfully commercialize any approved products. As a result, it is difficult to predict the
extent of any future losses or the time required to achieve profitability, if at all. Any failure
of our products to complete successful clinical trials and obtain regulatory approval and any
failure to become and remain profitable would adversely affect the price of our common stock and
our ability to raise capital and continue operations.
There is no assurance that we will be granted regulatory approval for any of our product
candidates.
Merck KGaA has been testing our lead product candidate, Stimuvax, in Phase 3 clinical trials
for the treatment of NSCLC. We have initiated two Phase 1/2 trials in 2010 for PX-866, and plan to
initiate two additional Phase 2 trials in the first half of 2011. Our other product candidates
remain in the pre-clinical testing stages. The results from pre-clinical testing and clinical
trials that we have completed may not be predictive of results in future pre-clinical tests and
clinical trials, and there can be no assurance that we will demonstrate sufficient safety and
efficacy to obtain the requisite regulatory approvals. A number of companies in the biotechnology
and pharmaceutical industries, including our company, have suffered significant setbacks in
advanced clinical trials, even after promising results in earlier trials. For example, the
clinical trials for Stimuvax were suspended as a result of a suspected unexpected serious adverse
event reaction in a patient. Although the clinical hold for trials in NSCLC has been lifted, it
remains in effect for the trial in breast cancer and Merck KGaA has decided to discontinue the
Phase 3 trial in breast cancer. Regulatory approval may not be obtained for any of our product
candidates. If our product candidates are not shown to be safe and effective in clinical trials,
the resulting delays in developing other product candidates and conducting related pre-clinical
testing and clinical trials, as well as the potential need for additional financing, would have a
material adverse effect on our business, financial condition and results of operations.
We are dependent upon Merck KGaA to develop and commercialize our lead product candidate, Stimuvax.
Under our license agreement with Merck KGaA for our lead product candidate, Stimuvax, Merck
KGaA is entirely responsible for the development, manufacture and worldwide commercialization of
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Stimuvax and the costs associated with such development, manufacture and commercialization.
Any future payments, including royalties to us, will depend on the extent to which Merck KGaA
advances Stimuvax through development and commercialization. Merck KGaA has the right to terminate
the 2008 license agreement, upon 30 days written notice, if, in Merck KGaAs reasonable judgment,
Merck KGaA determines that there are issues concerning the safety or efficacy of Stimuvax which
materially adversely affect Stimuvaxs medical, economic or competitive viability; provided that if
we do not agree with such determination we have the right to cause the matter to be submitted to
binding arbitration. Our ability to receive any significant revenue from Stimuvax is dependent on
the efforts of Merck KGaA. If Merck KGaA fails to fulfill its obligations under the 2008 license
agreement, we would need to obtain the capital necessary to fund the development and
commercialization of Stimuvax or enter into alternative arrangements with a third party. We could
also become involved in disputes with Merck KGaA, which could lead to delays in or termination of
our development and commercialization of Stimuvax and time-consuming and expensive litigation or
arbitration. If Merck KGaA terminates or breaches its agreement with us, or otherwise fails to
complete its obligations in a timely manner, the chances of successfully developing or
commercializing Stimuvax would be materially and adversely affected.
We and Merck KGaA currently rely on third party manufacturers to supply our product candidates,
which could delay or prevent the clinical development and commercialization of our product
candidates.
We currently depend on third party manufacturers for the manufacture of PX-866. Any
disruption in production, inability of these third party manufacturers to produce adequate
quantities to meet our needs or other impediments with respect to development or manufacturing
could adversely affect our ability to continue our research and development activities or
successfully complete pre-clinical studies and clinical trials, delay submissions of our regulatory
applications or adversely affect our ability to commercialize our product candidates in a timely
manner, or at all.
Merck KGaA currently depends on a single manufacturer, Baxter International Inc., or Baxter,
for the supply of our lead product candidate, Stimuvax, and on Corixa Corp. (now a part of
GlaxoSmithKline plc, or GSK) for the manufacture of the adjuvant in Stimuvax. If Stimuvax is not
approved by 2015, Corixa/GSK may terminate its obligation to supply the adjuvant. In this case, we
would retain the necessary licenses from Corixa/GSK required to have the adjuvant manufactured, but
the transfer of the process to a third party would delay the development and commercialization of
Stimuvax, which would materially harm our business.
Similarly, we rely on a single manufacturer, Fermentek, LTD for the supply of Wortmannin, a
key raw ingredient for PX-866. Without the timely support of Fermentek, LTD, our development
program for PX-866 could suffer significant delays, require significantly higher spending or face
cancellation.
Our product candidates have not yet been manufactured on a commercial scale. In order to
commercialize a product candidate, the third party manufacturer may need to increase its
manufacturing capacity, which may require the manufacturer to fund capital improvements to support
the scale up of manufacturing and related activities. With respect to PX-866, we may be required
to provide all or a portion of these funds. The third party manufacturer may not be able to
successfully increase its manufacturing capacity for our product candidate for which we obtain
marketing approval in a timely or economic manner, or at all. If any manufacturer is unable to
provide commercial quantities of a product candidate, we (or Merck KGaA, in the case of Stimuvax)
will need to successfully transfer manufacturing technology to a new manufacturer. Engaging a new
manufacturer for a particular product candidate could require us (or Merck KGaA, in the case of
Stimuvax) to conduct comparative studies or use other means to determine equivalence between
product candidates manufactured by a new manufacturer and those previously manufactured by the
existing manufacturer, which could delay or prevent commercialization of our product candidates.
If any of these manufacturers is unable or unwilling to increase its manufacturing capacity or if
alternative
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arrangements are not established on a timely basis or on acceptable terms, the development and
commercialization of our product candidates may be delayed or there may be a shortage in supply.
Any manufacturer of our products must comply with current Good Manufacturing Practices, or
cGMP, requirements enforced by the FDA through its facilities inspection program or by foreign
regulatory agencies. These requirements include quality control, quality assurance and the
maintenance of records and documentation. Manufacturers of our products may be unable to comply
with these cGMP requirements and with other FDA, state and foreign regulatory requirements. We
have little control over our manufacturers compliance with these regulations and standards. A
failure to comply with these requirements may result in fines and civil penalties, suspension of
production, suspension or delay in product approval, product seizure or recall, or withdrawal of
product approval. If the safety of any quantities supplied is compromised due to our
manufacturers failure to adhere to applicable laws or for other reasons, we may not be able to
obtain regulatory approval for or successfully commercialize our products.
Any failure or delay in commencing or completing clinical trials for our product candidates could
severely harm our business.
Each of our product candidates must undergo extensive pre-clinical studies and clinical trials
as a condition to regulatory approval. Pre-clinical studies and clinical trials are expensive and
take many years to complete. The commencement and completion of clinical trials for our product
candidates may be delayed by many factors, including:
| safety issues or side effects; | ||
| delays in patient enrollment and variability in the number and types of patients available for clinical trials; | ||
| poor effectiveness of product candidates during clinical trials; | ||
| governmental or regulatory delays and changes in regulatory requirements, policy and guidelines; | ||
| our or our collaborators ability to obtain regulatory approval to commence a clinical trial; | ||
| our or our collaborators ability to manufacture or obtain from third parties materials sufficient for use in pre-clinical studies and clinical trials; and | ||
| varying interpretation of data by the FDA and similar foreign regulatory agencies. |
It is possible that none of our product candidates will complete clinical trials in any of the
markets in which we and/or our collaborators intend to sell those product candidates. Accordingly,
we and/or our collaborators may not receive the regulatory approvals necessary to market our
product candidates. Any failure or delay in commencing or completing clinical trials or obtaining
regulatory approvals for product candidates would prevent or delay their commercialization and
severely harm our business and financial condition. For example, although the suspension of the
clinical development program for Stimuvax in March 2010 has been lifted for trials in NSCLC, it
remains in effect for trials in breast cancer and, in any event, may result in a prolonged delay or
in the termination of the clinical development program for Stimuvax. For example, Merck KGaA has
announced that it has decided to discontinue the Phase 3 trial in breast cancer. A prolonged delay
or termination of the clinical development program would have a material adverse impact on our
business and financial condition.
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The failure to enroll patients for clinical trials may cause delays in developing our product
candidates.
We may encounter delays if we, any collaboration partners or Merck KGaA are unable to enroll
enough patients to complete clinical trials. Patient enrollment depends on many factors,
including, the size of the patient population, the nature of the protocol, the proximity of
patients to clinical sites and the eligibility criteria for the trial. Moreover, when one product
candidate is evaluated in multiple clinical trials simultaneously, patient enrollment in ongoing
trials can be adversely affected by negative results from completed trials. Our product candidates
are focused in oncology, which can be a difficult patient population to recruit. In addition, the
suspension of the Stimuvax trials may require Merck KGaA to enroll additional patients which could
delay such trials.
We rely on third parties to conduct our clinical trials. If these third parties do not
perform as contractually required or otherwise expected, we may not be able to obtain regulatory
approval for or be able to commercialize our product candidates.
We rely on third parties, such as contract research organizations, medical institutions,
clinical investigators and contract laboratories, to assist in conducting our clinical trials. We
have, in the ordinary course of business, entered into agreements with these third parties.
Nonetheless, we are responsible for confirming that each of our clinical trials is conducted in
accordance with its general investigational plan and protocol. Moreover, the FDA and foreign
regulatory agencies require us to comply with regulations and standards, commonly referred to as
good clinical practices, for conducting, recording and reporting the results of clinical trials to
assure that data and reported results are credible and accurate and that the trial participants are
adequately protected. Our reliance on third parties does not relieve us of these responsibilities
and requirements. If these third parties do not successfully carry out their contractual duties or
regulatory obligations or meet expected deadlines, if the third parties need to be replaced or if
the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our
clinical protocols or regulatory requirements or for other reasons, our pre-clinical development
activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be
able to obtain regulatory approval for our product candidates.
Even if regulatory approval is received for our product candidates, the later discovery of
previously unknown problems with a product, manufacturer or facility may result in restrictions,
including withdrawal of the product from the market.
Approval of a product candidate may be conditioned upon certain limitations and restrictions
as to the drugs use, or upon the conduct of further studies, and may be subject to continuous
review. After approval of a product, if any, there will be significant ongoing regulatory
compliance obligations, and if we or our collaborators fail to comply with these requirements, we,
any of our collaborators or Merck KGaA could be subject to penalties, including:
| warning letters; | ||
| fines; | ||
| product recalls; | ||
| withdrawal of regulatory approval; | ||
| operating restrictions; |
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| disgorgement of profits; | ||
| injunctions; and | ||
| criminal prosecution. |
Regulatory agencies may require us, any of our collaborators or Merck KGaA to delay, restrict
or discontinue clinical trials on various grounds, including a finding that the subjects or
patients are being exposed to an unacceptable health risk. For example, in March 2010, Merck KGaA
suspended the clinical development program for Stimuvax in both NSCLC and breast cancer as the
result of a suspected unexpected serious adverse event reaction in a patient with multiple myeloma
participating in an exploratory clinical trial. Although the clinical hold placed on Stimuvax
clinical trials in NSCLC has been lifted, the suspension of clinical trials in breast cancer
remains in effect and Merck KGaA has announced that it has decided to discontinue the Phase 3 trial
in breast cancer. In addition, we, any of our collaborators or Merck KGaA may be unable to submit
applications to regulatory agencies within the time frame we currently expect. Once submitted,
applications must be approved by various regulatory agencies before we, any of our collaborators or
Merck KGaA can commercialize the product described in the application. All statutes and
regulations governing the conduct of clinical trials are subject to change in the future, which
could affect the cost of such clinical trials. Any unanticipated costs or delays in such clinical
studies could delay our ability to generate revenues and harm our financial condition and results
of operations.
Failure to obtain regulatory approval in foreign jurisdictions would prevent us from marketing our
products internationally.
We intend to have our product candidates marketed outside the United States. In order to
market our products in the European Union and many other non-U.S. jurisdictions, we must obtain
separate regulatory approvals and comply with numerous and varying regulatory requirements. To
date, we have not filed for marketing approval for any of our product candidates and may not
receive the approvals necessary to commercialize our product candidates in any market. The
approval procedure varies among countries and can involve additional testing and data review. The
time required to obtain foreign regulatory approval may differ from that required to obtain FDA
approval. The foreign regulatory approval process may include all of the risks associated with
obtaining FDA approval. We may not obtain foreign regulatory approvals on a timely basis, if at
all. Approval by the FDA does not ensure approval by regulatory agencies in other countries, and
approval by one foreign regulatory authority does not ensure approval by regulatory agencies in
other foreign countries or by the FDA. However, a failure or delay in obtaining regulatory
approval in one jurisdiction may have a negative effect on the regulatory approval process in other
jurisdictions, including approval by the FDA. The failure to obtain regulatory approval in foreign
jurisdictions could harm our business.
Our product candidates may never achieve market acceptance even if we obtain regulatory approvals.
Even if we receive regulatory approvals for the commercial sale of our product candidates, the
commercial success of these product candidates will depend on, among other things, their acceptance
by physicians, patients, third party payers such as health insurance companies and other members of
the medical community as a therapeutic and cost-effective alternative to competing products and
treatments. If our product candidates fail to gain market acceptance, we may be unable to earn
sufficient revenue to continue our business. Market acceptance of, and demand for, any product
that we may develop and commercialize will depend on many factors, including:
| our ability to provide acceptable evidence of safety and efficacy; |
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| the prevalence and severity of adverse side effects; | ||
| availability, relative cost and relative efficacy of alternative and competing treatments; | ||
| the effectiveness of our marketing and distribution strategy; | ||
| publicity concerning our products or competing products and treatments; and | ||
| our ability to obtain sufficient third party insurance coverage or reimbursement. |
If our product candidates do not become widely accepted by physicians, patients, third party
payors and other members of the medical community, our business, financial condition and results of
operations would be materially and adversely affected.
If we are unable to obtain, maintain and enforce our proprietary rights, we may not be able to
compete effectively or operate profitably.
Our success is dependent in part on obtaining, maintaining and enforcing our patents and other
proprietary rights and will depend in large part on our ability to:
| obtain patent and other proprietary protection for our technology, processes and product candidates; | ||
| defend patents once issued; | ||
| preserve trade secrets; and | ||
| operate without infringing the patents and proprietary rights of third parties. |
As of December 31, 2010, we owned approximately 16 U.S. patents and 21 U.S. patent
applications, as well as the corresponding foreign patents and patent applications, and held
exclusive or partially exclusive licenses to approximately eight U.S. patents and two U.S. patent
applications, as well as the corresponding foreign patents and patent applications. The degree of
future protection for our proprietary rights is uncertain. For example:
| we might not have been the first to make the inventions covered by any of our patents, if issued, or our pending patent applications; | ||
| we might not have been the first to file patent applications for these inventions; | ||
| others may independently develop similar or alternative technologies or products and/or duplicate any of our technologies and/or products; | ||
| it is possible that none of our pending patent applications will result in issued patents or, if issued, these patents may not be sufficient to protect our technology or provide us with a basis for commercially-viable products and may not provide us with any competitive advantages; | ||
| if our pending applications issue as patents, they may be challenged by third parties as infringed, invalid or unenforceable under U.S. or foreign laws; |
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| if issued, the patents under which we hold rights may not be valid or enforceable; or | ||
| we may develop additional proprietary technologies that are not patentable and which may not be adequately protected through trade secrets, if for example a competitor were to independently develop duplicative, similar or alternative technologies. |
The patent position of biotechnology and pharmaceutical firms is highly uncertain and involves
many complex legal and technical issues. There is no clear policy involving the breadth of claims
allowed in patents or the degree of protection afforded under patents. Although we believe our
potential rights under patent applications provide a competitive advantage, it is possible that
patent applications owned by or licensed to us will not result in patents being issued, or that, if
issued, the patents will not give us an advantage over competitors with similar products or
technology, nor can we assure you that we can obtain, maintain and enforce all ownership and other
proprietary rights necessary to develop and commercialize our product candidates.
Even if any or all of our patent applications issue as patents, others may challenge the
validity, inventorship, ownership, enforceability or scope of our patents or other technology used
in or otherwise necessary for the development and commercialization of our product candidates. We
may not be successful in defending against any such challenges. Moreover, the cost of litigation
to uphold the validity of patents to prevent infringement or to otherwise protect our proprietary
rights can be substantial. If the outcome of litigation is adverse to us, third parties may be
able to use the challenged technologies without payment to us. There is no assurance that our
patents, if issued, will not be infringed or successfully avoided through design innovation.
Intellectual property lawsuits are expensive and would consume time and other resources, even if
the outcome were successful. In addition, there is a risk that a court would decide that our
patents, if issued, 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 a patent were upheld, a
court would refuse to stop the other party from using the inventions, including on the ground that
its activities do not infringe that patent. If any of these events were to occur, our business,
financial condition and results of operations would be materially and adversely effected.
In addition to the intellectual property and other rights described above, we also rely on
unpatented technology, trade secrets, trademarks and confidential information, particularly when we
do not believe that patent protection is appropriate or available. However, trade secrets are
difficult to protect and it is possible that others will independently develop substantially
equivalent information and techniques or otherwise gain access to or disclose our unpatented
technology, trade secrets and confidential information. We require each of our employees,
consultants and advisors to execute a confidentiality and invention assignment agreement at the
commencement of an employment or consulting relationship with us. However, it is possible that
these agreements will not provide effective protection of our confidential information or, in the
event of unauthorized use of our intellectual property or the intellectual property of third
parties, provide adequate or effective remedies or protection.
If our vaccine technology or our product candidates, including Stimuvax, conflict with the
rights of others, we may not be able to manufacture or market our product candidates, which could
have a material and adverse effect on us and on our collaboration with Merck KGaA.
Issued patents held by others may limit our ability to develop commercial products. All
issued patents are entitled to a presumption of validity under the laws of the United States. If
we need licenses to such patents to permit us to develop or market our product candidates, we may
be required to pay significant fees or royalties, and we cannot be certain that we would be able to
obtain such licenses on commercially reasonable terms, if at all. Competitors or third parties may
obtain patents that may cover subject matter we
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use in developing the technology required to bring our products to market, that we use in
producing our products, or that we use in treating patients with our products.
We know that others have filed patent applications in various jurisdictions that relate to
several areas in which we are developing products. Some of these patent applications have already
resulted in the issuance of patents and some are still pending. We may be required to alter our
processes or product candidates, pay licensing fees or cease activities. Certain parts of our
vaccine technology, including the MUC1 antigen, originated from third party sources.
These third party sources include academic, government and other research laboratories, as
well as the public domain. If use of technology incorporated into or used to produce our product
candidates is challenged, or if our processes or product candidates conflict with patent rights of
others, third parties could bring legal actions against us, in Europe, the United States and
elsewhere, claiming damages and seeking to enjoin manufacturing and marketing of the affected
products. Additionally, it is not possible to predict with certainty what patent claims may issue
from pending applications. In the United States, for example, patent prosecution can proceed in
secret prior to issuance of a patent. As a result, third parties may be able to obtain patents
with claims relating to our product candidates which they could attempt to assert against us.
Further, as we develop our products, third parties may assert that we infringe the patents
currently held or licensed by them and it is difficult to provide the outcome of any such action.
There has been significant litigation in the biotechnology industry over patents and other
proprietary rights and if we become involved in any litigation, it could consume a substantial
portion of our resources, regardless of the outcome of the litigation. If these legal actions are
successful, in addition to any potential liability for damages, we could be required to obtain a
license, grant cross-licenses and pay substantial royalties in order to continue to manufacture or
market the affected products.
There is no assurance that we would prevail in any legal action or that any license required
under a third party patent would be made available on acceptable terms or at all. Ultimately, we
could be prevented from commercializing a product, or forced to cease some aspect of our business
operations, as a result of claims of patent infringement or violation of other intellectual
property rights, which could have a material and adverse effect on our business, financial
condition and results of operations.
If any products we develop become subject to unfavorable pricing regulations, third party
reimbursement practices or healthcare reform initiatives, our ability to successfully commercialize
our products will be impaired.
Our future revenues, profitability and access to capital will be affected by the continuing
efforts of governmental and private third party payers to contain or reduce the costs of health
care through various means. We expect a number of federal, state and foreign proposals to control
the cost of drugs through government regulation. We are unsure of the impact recent health care
reform legislation may have on our business or what actions federal, state, foreign and private
payers may take in response to the recent reforms. Therefore, it is difficult to provide the
effect of any implemented reform on our business. Our ability to commercialize our products
successfully will depend, in part, on the extent to which reimbursement for the cost of such
products and related treatments will be available from government health administration
authorities, such as Medicare and Medicaid in the United States, private health insurers and other
organizations. Significant uncertainty exists as to the reimbursement status of newly approved
health care products, particularly for indications for which there is no current effective
treatment or for which medical care typically is not sought. Adequate third party coverage may not
be available to enable us to maintain price levels sufficient to realize an appropriate return on
our investment in product research and development. If adequate coverage and reimbursement levels
are not provided by government and third party payors for use
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of our products, our products may fail to achieve market acceptance and our results of
operations will be harmed.
Governments often impose strict price controls, which may adversely affect our future
profitability.
We intend to seek approval to market our future products in both the United States and foreign
jurisdictions. If we obtain approval in one or more foreign jurisdictions, we will be subject to
rules and regulations in those jurisdictions relating to our product. In some foreign countries,
particularly in the European Union, prescription drug pricing is subject to government control. In
these countries, pricing negotiations with governmental authorities can take considerable time
after the receipt of marketing approval for a drug candidate. To obtain reimbursement or pricing
approval in some countries, we may be required to conduct a clinical trial that compares the
cost-effectiveness of our future product to other available therapies. In addition, it is unclear
what impact, if any, recent health care reform legislation will have on the price of drugs;
however, prices may become subject to controls similar to those in other countries. If
reimbursement of our future products is unavailable or limited in scope or amount, or if pricing is
set at unsatisfactory levels, we may be unable to achieve or sustain profitability.
We face potential product liability exposure, and if successful claims are brought against us, we
may incur substantial liability for a product candidate and may have to limit its
commercialization.
The use of our product candidates in clinical trials and the sale of any products for which we
obtain marketing approval expose us to the risk of product liability claims. Product liability
claims might be brought against us by consumers, health care providers, pharmaceutical companies or
others selling our products. If we cannot successfully defend ourselves against these claims, we
will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may
result in:
| decreased demand for our product candidates; | ||
| impairment of our business reputation; | ||
| withdrawal of clinical trial participants; | ||
| costs of related litigation; | ||
| substantial monetary awards to patients or other claimants; | ||
| loss of revenues; and | ||
| the inability to commercialize our product candidates. |
Although we currently have product liability insurance coverage for our clinical trials for
expenses or losses up to a $10 million aggregate annual limit, our insurance coverage may not
reimburse us or may not be sufficient to reimburse us for any or all expenses or losses we may
suffer. Moreover, insurance coverage is becoming increasingly expensive and, in the future, we may
not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect
us against losses due to liability. We intend to expand our insurance coverage to include the sale
of commercial products if we obtain marketing approval for our product candidates in development,
but we may be unable to obtain commercially reasonable product liability insurance for any products
approved for marketing. On occasion, large judgments have been awarded in class action lawsuits
based on products that had unanticipated side effects. A successful product liability claim or
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series of claims brought against us could cause our stock price to fall and, if judgments
exceed our insurance coverage, could decrease our cash and adversely affect our business.
We face substantial competition, which may result in others discovering, developing or
commercializing products before, or more successfully, than we do.
Our future success depends on our ability to demonstrate and maintain a competitive advantage
with respect to the design, development and commercialization of our product candidates. We expect
any product candidate that we commercialize with our collaborative partners or on our own will
compete with existing, market-leading products and products in development.
Stimuvax. There are currently two products approved as maintenance therapy following
treatment of inoperable locoregional Stage III NSCLC with induction chemotherapy, Tarceva
(erlotinib), a targeted small molecule from Genentech, Inc., a member of the Roche Group, and
Alimta (pemetrexed), a chemotherapeutic from Eli Lilly and Company. Stimuvax has not been tested
in combination with or in comparison to these products. It is possible that other existing or new
agents will be approved for this indication. In addition, there are at least three vaccines in
development for the treatment of NSCLC, including GSKs MAGE A3 vaccine in Phase 3, NovaRx
Corporations Lucanix in Phase 3 and Transgenes TG-4010 in Phase 2. TG-4010 also targets MUC1,
although using technology different from Stimuvax. To our knowledge, these vaccines are not
currently being developed in the same indications as Stimuvax. However, subsequent development of
these vaccines, including Stimuvax, may result in direct competition.
Small Molecule Products. PX-866 is an inhibitor of phosphoinositide 3-kinase (PI3K). We are
aware of several companies that have entered clinical trials with competing compounds targeting the
same protein. Among those are compounds being developed by Novartis (Phase 1/2), Roche/Genentech
(Phase 1), Bayer (Phase 1), Semafore (Phase 1), Sanofi-Aventis (Phase 2), Pfizer (Phase 1) and
Calistoga (Phase 2). There are also several approved targeted therapies for cancer and in
development against which PX-866 might compete.
Many of our potential competitors have substantially greater financial, technical and
personnel resources than we have. In addition, many of these competitors have significantly
greater commercial infrastructures than we have. Our ability to compete successfully will depend
largely on our ability to:
| design and develop products that are superior to other products in the market; | ||
| attract qualified scientific, medical, sales and marketing and commercial personnel; | ||
| obtain patent and/or other proprietary protection for our processes and product candidates; | ||
| obtain required regulatory approvals; and | ||
| successfully collaborate with others in the design, development and commercialization of new products. |
Established competitors may invest heavily to quickly discover and develop novel compounds
that could make our product candidates obsolete. In addition, any new product that competes with a
generic market-leading product must demonstrate compelling advantages in efficacy, convenience,
tolerability and safety in order to overcome severe price competition and to be commercially
successful. If we are not able to compete effectively against our current and future competitors,
our business will not grow and our financial condition and operations will suffer.
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If we are unable to enter into agreements with partners to perform sales and marketing functions,
or build these functions ourselves, we will not be able to commercialize our product candidates.
We currently do not have any internal sales, marketing or distribution capabilities. In order
to commercialize any of our product candidates, we must either acquire or internally develop a
sales, marketing and distribution infrastructure or enter into agreements with partners to perform
these services for us. Under our agreements with Merck KGaA, Merck KGaA is responsible for
developing and commercializing Stimuvax, and any problems with that relationship could delay the
development and commercialization of Stimuvax. Additionally, we may not be able to enter into
arrangements with respect to our product candidates not covered by the Merck KGaA agreements on
commercially acceptable terms, if at all. Factors that may inhibit our efforts to commercialize
our product candidates without entering into arrangements with third parties include:
| our inability to recruit and retain adequate numbers of effective sales and marketing personnel; | ||
| the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe our products; | ||
| the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and | ||
| unforeseen costs and expenses associated with creating a sales and marketing organization. |
If we are not able to partner with a third party and are not successful in recruiting sales
and marketing personnel or in building a sales and marketing and distribution infrastructure, we
will have difficulty commercializing our product candidates, which would adversely affect our
business and financial condition.
If we lose key personnel, or we are unable to attract and retain highly-qualified personnel on a
cost-effective basis, it would be more difficult for us to manage our existing business operations
and to identify and pursue new growth opportunities.
Our success depends in large part upon our ability to attract and retain highly qualified
scientific, clinical, manufacturing, and management personnel. In addition, any difficulties
retaining key personnel or managing this growth could disrupt our operations. Future growth will
require us to continue to implement and improve our managerial, operational and financial systems,
and continue to retain, recruit and train additional qualified personnel, which may impose a strain
on our administrative and operational infrastructure. The competition for qualified personnel in
the biopharmaceutical field is intense. We are highly dependent on our continued ability to
attract, retain and motivate highly-qualified management, clinical and scientific personnel. Due
to our limited resources, we may not be able to effectively recruit, train and retain additional
qualified personnel. If we are unable to retain key personnel or manage our growth effectively, we
may not be able to implement our business plan.
Furthermore, we have not entered into non-competition agreements with all of our key
employees. In addition, we do not maintain key person life insurance on any of our officers,
employees or consultants. The loss of the services of existing personnel, the failure to recruit
additional key scientific, technical and managerial personnel in a timely manner, and the loss of
our employees to our competitors would harm our research and development programs and our business.
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Our business is subject to increasingly complex environmental legislation that has increased both
our costs and the risk of noncompliance.
Our business may involve the use of hazardous material, which will require us to comply with
environmental regulations. We face increasing complexity in our product development as we adjust
to new and upcoming requirements relating to the materials composition of many of our product
candidates. If we use biological and hazardous materials in a manner that causes contamination or
injury or violates laws, we may be liable for damages. Environmental regulations could have a
material adverse effect on the results of our operations and our financial position. We maintain
insurance under our general liability policy for any liability associated with our hazardous
materials activities, and it is possible in the future that our coverage would be insufficient if
we incurred a material environmental liability.
If we fail to establish and maintain proper and effective internal controls, our ability to produce
accurate financial statements on a timely basis could be impaired, which would adversely affect our
consolidated operating results, our ability to operate our business, and our stock price.
Ensuring that we have adequate internal financial and accounting controls and procedures in
place to produce accurate financial statements on a timely basis is a costly and time-consuming
effort that needs to be re-evaluated frequently. Failure on our part to have effective internal
financial and accounting controls would cause our financial reporting to be unreliable, could have
a material adverse effect on our business, operating results, and financial condition, and could
cause the trading price of our common stock to fall dramatically. For the year ended December 31,
2009, we and our independent registered public accounting firm identified certain material
weaknesses in our internal controls that are described in Item 9A Controls and Procedures
Managements Report on Internal Control over Financial Reporting, of our Annual Report on Form
10-K for the year ended December 31, 2009. Remediation of the material weakness was fully
completed on March 3, 2011; however, we can provide no assurances that this or other material
weaknesses in our internal control over financial reporting will not be identified in the future.
Our management is responsible for establishing and maintaining adequate internal control over
financial reporting to provide reasonable assurance regarding the reliability of our financial
reporting and the preparation of financial statements for external purposes in accordance with U.S.
GAAP. Our management does not expect that our internal control over financial reporting will
prevent or detect all errors and all fraud. A control system, no matter how well designed and
operated, can provide only reasonable, not absolute, assurance that the control systems objectives
will be met. Because of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that misstatements due to error or fraud will not occur or that all
control issues and instances of fraud, if any, within the company will have been detected.
In June 2010 we retained outside consultants to assist us with designing and implementing an
adequate risk assessment process to identify future complex transactions requiring specialized
knowledge to ensure the appropriate accounting for and disclosure of such transactions. In
September 2010 and January 2011, we retained personnel with the appropriate technical expertise to
assist us in accounting for complex transactions in accordance with U.S. GAAP. We cannot be
certain that the actions we are taking to improve our internal controls over financial reporting
will be sufficient or that we will be able to implement our planned processes and procedures in a
timely manner. In future periods, if the process required by Section 404 of the Sarbanes-Oxley Act
reveals any other material weaknesses or significant deficiencies, the correction of any such
material weaknesses or significant deficiencies could require additional remedial measures which
could be costly and time-consuming. In addition, we may be unable to produce accurate financial
statements on a timely basis. Any of the foregoing could cause investors to lose confidence in the
reliability of our consolidated financial statements, which could cause the market price of our
common stock to decline and make it more difficult for us to finance our operations and growth.
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If we are required to redeem the shares of our Class UA preferred stock, our financial
condition may be adversely affected.
Our certificate of incorporation provides for the mandatory redemption of shares of our Class
UA preferred stock if we realize net profits in any year. See Note 8 Share Capital
Authorized Shares Class UA preferred stock of the audited financial statements included in our
Annual Report on Form 10-K for the year ended December 31, 2010. For this purpose, net profits .
. . means the after tax profits determined in accordance with generally accepted accounting
principles, where relevant, consistently applied.
The certificate of incorporation does not specify the jurisdiction whose generally accepted
accounting principles would apply for the redemption provision. At the time of the original
issuance of the shares, we were a corporation organized under the federal laws of Canada, and our
principal operations were located in Canada. In addition, the original purchaser and current
holder of the Class UA preferred stock is a Canadian entity. In connection with our
reincorporation in Delaware, we disclosed that the rights, preferences and privileges of the shares
would remain unchanged except as required by Delaware law, and the mandatory redemption provisions
were not changed.
In addition, the formula for determining the price at which such shares would be redeemed is
expressed in Canadian dollars. Although, if challenged, we believe that a Delaware court would
determine that net profits be interpreted in accordance with Canadian GAAP, we cannot provide
assurances that a Delaware court would agree with such interpretation.
As a result of the December 2008 Merck KGaA transaction, we recognized on a one-time basis all
deferred revenue relating to Stimuvax, under both U.S. GAAP and Canadian GAAP. Under U.S. GAAP
this resulted in net income. However, under Canadian GAAP we were required to recognize an
impairment on intangible assets which resulted in a net loss for 2008 and therefore do not intend
to redeem any shares of Class UA preferred stock in 2009. If in the future we recognize net income
under Canadian GAAP, or any successor to such principles, or if the holder of Class UA preferred
stock were to challenge, and prevail in a dispute involving, the interpretation of the mandatory
redemption provision, we may be required to redeem such shares which would have an adverse effect
on our cash position. The maximum aggregate amount that we would be required to pay to redeem such
shares is CAN $1.25 million.
The holder of the Class UA preferred stock has declined to sign an acknowledgement that
Canadian GAAP applies to the redemption provision and has indicated that it believes U.S. GAAP
should apply. As of the date of this prospectus, the holder has not initiated a proceeding to
challenge this interpretation; however, it may do so. If they do dispute this interpretation,
although we believe a Delaware court would agree with the interpretation described above, we can
provide no assurances that we would prevail in such a dispute. Further, any dispute regarding this
matter, even if we were ultimately successful, could require significant resources which may
adversely affect our results of operations.
We may expand our business through the acquisition of companies or businesses or in-licensing
product candidates that could disrupt our business and harm our financial condition.
We may in the future seek to expand our products and capabilities by acquiring one or more
companies or businesses or in-licensing one or more product candidates. Acquisitions and
in-licenses involve numerous risks, including:
| substantial cash expenditures; |
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| potentially dilutive issuance of equity securities; | ||
| incurrence of debt and contingent liabilities, some of which may be difficult or impossible to identify at the time of acquisition; | ||
| difficulties in assimilating the operations of the acquired companies; | ||
| diverting our managements attention away from other business concerns; | ||
| entering markets in which we have limited or no direct experience; and | ||
| potential loss of our key employees or key employees of the acquired companies or businesses. |
In our recent history, we have not expanded our business through in-licensing and we have
completed only one acquisition; therefore, our experience in making acquisitions and in-licensing
is limited. We cannot assure you that any acquisition or in-license will result in short-term or
long-term benefits to us. We may incorrectly judge the value or worth of an acquired company or
business or in-licensed product candidate. In addition, our future success would depend in part on
our ability to manage the rapid growth associated with some of these acquisitions and in-licenses.
We cannot assure you that we would be able to make the combination of our business with that of
acquired businesses or companies or in-licensed product candidates work or be successful.
Furthermore, the development or expansion of our business or any acquired business or company or
in-licensed product candidate may require a substantial capital investment by us. We may not have
these necessary funds or they might not be available to us on acceptable terms or at all. We may
also seek to raise funds by selling shares of our capital stock, which could dilute our current
stockholders ownership interest, or securities convertible into our capital stock, which could
dilute current stockholders ownership interest upon conversion.
Risks Related to the Ownership of Our Common Stock
Our common stock may become ineligible for listing on The NASDAQ Stock Market, which would
materially adversely affect the liquidity and price of our common stock.
Our common stock is currently listed for trading in the United States on The NASDAQ Global
Market. As a result of our failure to timely file our Annual Report on Form 10-K for the year
ended December 31, 2009, we received a letter from The NASDAQ Stock Market informing us that we did
not comply with continued listing requirements. Although the filing of our Annual Report on Form
10-K for the year ended December 31, 2009 allowed us to regain full compliance with SEC reporting
requirements and The NASDAQ Stock Market continued listing requirements, we have in the past and
could in the future be unable to meet The NASDAQ Global Market continued listing requirements. For
example, on August 20, 2008 we disclosed that we had received a letter from The NASDAQ Stock Market
indicating that we did not comply with the requirements for continued listing on The NASDAQ Global
Market because we did not meet the maintenance standard in Marketplace Rule 4450(b)(1)(A)
(recodified as Marketplace Rule 5450(b)) that specifies, among other things, that the market value
of our common stock be at least $50 million or that our stockholders equity was at least $10
million. Although we regained compliance with the stockholders equity standard, we have a history
of losses and would expect that, absent the completion of a financing or other event that would
have a positive impact on our stockholders equity, our stockholders equity would decline over
time. Further, in the past our stock price has traded near, and at times below, the $1.00 minimum
bid price required for continued listing on NASDAQ. Although NASDAQ in the past has provided
relief from the $1.00 minimum bid price requirement as a result of the recent weakness in the stock
market, it may not do so in the future. If we fail to maintain compliance with NASDAQs listing
standards, and our common stock
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becomes ineligible for listing on The NASDAQ Stock Market the liquidity and price of our
common stock would be adversely affected.
If our common stock was delisted, the price of our stock and the ability of our stockholders
to trade in our stock would be adversely affected. In addition, we would be subject to a number of
restrictions regarding the registration of our stock under U.S. federal securities laws, and we
would not be able to allow our employees to exercise their outstanding options, which could
adversely affect our business and results of operations. If we are delisted in the future from The
NASDAQ Global Market, there may be other negative implications, including the potential loss of
confidence by actual or potential collaboration partners, suppliers and employees and the loss of
institutional investor interest in our company.
The trading price of our common stock may be volatile.
The market prices for and trading volumes of securities of biotechnology companies, including
our securities, have been historically volatile. The market has from time to time experienced
significant price and volume fluctuations unrelated to the operating performance of particular
companies. The market price of our common shares may fluctuate significantly due to a variety of
factors, including:
| public concern as to the safety of products developed by us or others; | ||
| the results of pre-clinical testing and clinical trials by us, our collaborators, our competitors and/or companies that are developing products that are similar to ours (regardless of whether such products are potentially competitive with ours); | ||
| technological innovations or new therapeutic products; | ||
| governmental regulations; | ||
| developments in patent or other proprietary rights; | ||
| litigation; | ||
| comments by securities analysts; | ||
| the issuance of additional shares of common stock, or securities convertible into, or exercisable or exchangeable for, shares of our common stock in connection with financings, acquisitions or otherwise; | ||
| the perception that shares of our common stock may be delisted from The NASDAQ Stock Market; | ||
| the incurrence of debt; | ||
| general market conditions in our industry or in the economy as a whole; and | ||
| political instability, natural disasters, war and/or events of terrorism. |
In addition, the stock market has experienced extreme price and volume fluctuations that have
often been unrelated or disproportionate to the operating performance of individual companies.
Broad market and industry factors may seriously affect the market price of companies stock,
including ours, regardless of actual
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operating performance. In addition, in the past, following periods of volatility in the
overall market and the market price of a particular companys securities, securities class action
litigation has often been instituted against these companies. This litigation, if instituted
against us, could result in substantial costs and a diversion of our managements attention and
resources.
Because we do not expect to pay dividends on our common stock, stockholders will benefit from an
investment in our common stock only if it appreciates in value.
We have never paid cash dividends on our common shares and have no present intention to pay
any dividends in the future. We are not profitable and do not expect to earn any material revenues
for at least several years, if at all. As a result, we intend to use all available cash and liquid
assets in the development of our business. Any future determination about the payment of dividends
will be made at the discretion of our board of directors and will depend upon our earnings, if any,
capital requirements, operating and financial conditions and on such other factors as our board of
directors deems relevant. As a result, the success of an investment in our common stock will
depend upon any future appreciation in its value. There is no guarantee that our common stock will
appreciate in value or even maintain the price at which stockholders have purchased their shares.
We expect that we will seek to raise additional capital in the future; however, such capital may
not be available to us on reasonable terms, if at all, when or as we require additional funding.
If we issue additional shares of our common stock or other securities that may be convertible into,
or exercisable or exchangeable for, our common stock, our existing stockholders would experience
further dilution.
We expect that we will seek to raise additional capital from time to time in the future. For
example, in July 2010, we entered into a common stock purchase agreement with Small Cap Biotech
Value, Ltd., or SCBV, pursuant to which we may sell to SCBV up to 5,090,759 shares of our common
stock over a 24-month period, subject to the satisfaction of certain terms and conditions contained
in the common stock purchase agreement. Future financings may involve the issuance of debt, equity
and/or securities convertible into or exercisable or exchangeable for our equity securities. These
financings may not be available to us on reasonable terms or at all when and as we require funding.
In addition, until October 13, 2011, the investors in our 2010 private placement have certain
rights of first refusal with respect to any equity or equity equivalent securities that we issue.
Compliance with the terms of these rights of first refusal could complicate any future financing
transactions we pursue. If we are able to consummate such financings, the trading price of our
common stock could be adversely affected and/or the terms of such financings may adversely affect
the interests of our existing stockholders. Any failure to obtain additional working capital when
required would have a material adverse effect on our business and financial condition and would be
expected to result in a decline in our stock price. Any issuances of our common stock, preferred
stock, or securities such as warrants or notes that are convertible into, exercisable or
exchangeable for, our capital stock, would have a dilutive effect on the voting and economic
interest of our existing stockholders.
Further, as a result of the delayed filing of our Annual Report on Form 10-K for the year
ended December 31, 2009, we will be ineligible to register the offer and sale of our securities on
Form S-3 by us or resale by others until at least April 1, 2011. We may use Form S-1 to raise
capital or complete acquisitions, but doing so could increase transaction costs and adversely
impact our ability to raise capital or complete acquisitions of other companies in a timely manner.
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If we sell shares of our common stock under our existing committed equity line financing facility,
our existing stockholders will experience immediate dilution and, as a result, our stock price may
go down.
In July 2010, we entered into a committed equity line financing facility, or financing
arrangement, under which we may sell up to $20.0 million of our common stock to SCBV over a
24-month period subject to a maximum of 5,150,680 shares of our common stock, including the 59,921
shares of common stock we issued to SCBV in July 2010 as compensation for their commitment to enter
into the financing arrangement. The sale of shares of our common stock pursuant to the financing
arrangement will have a dilutive impact on our existing stockholders. SCBV may resell some or all
of the shares we issue to them under the financing arrangement and such sales could cause the
market price of our common stock to decline significantly with advances under the financing
arrangement. To the extent of any such decline, any subsequent advances would require us to issue
a greater number of shares of common stock to SCBV in exchange for each dollar of the advance.
Under these circumstances, our existing stockholders would experience greater dilution. Although
SCBV is precluded from short sales of shares acquired pursuant to advances under the financing
arrangement, the sale of our common stock under the financing arrangement could encourage short
sales by third parties, which could contribute to the further decline of our stock price.
Our management will have broad discretion over the use of proceeds from the sale of securities to
SCBV and may not use such proceeds in ways that increase the value of our stock price.
We will have broad discretion over the use of proceeds from the sale of securities to SCBV and
we could spend the proceeds in ways that do not improve our results of operations or enhance the
value of our common stock. Our failure to apply these funds effectively could have a material
adverse effect on our business, delay the development of our product candidates and cause the price
of our common stock to decline.
We can issue shares of preferred stock that may adversely affect the rights of a stockholder of our
common stock.
Our certificate of incorporation authorizes us to issue up to 10,000,000 shares of preferred
stock with designations, rights, and preferences determined from time-to-time by our board of
directors. Accordingly, our board of directors is empowered, without stockholder approval, to
issue preferred stock with dividend, liquidation, conversion, voting or other rights superior to
those of holders of our common stock. For example, an issuance of shares of preferred stock could:
| adversely affect the voting power of the holders of our common stock; | ||
| make it more difficult for a third party to gain control of us; | ||
| discourage bids for our common stock at a premium; | ||
| limit or eliminate any payments that the holders of our common stock could expect to receive upon our liquidation; or | ||
| otherwise adversely affect the market price or our common stock. |
We have in the past, and we may at any time in the future, issue additional shares
of authorized preferred stock.
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We expect our quarterly operating results to fluctuate in future periods, which may cause our stock
price to fluctuate or decline.
Our quarterly operating results have fluctuated in the past, and we believe they will continue
to do so in the future. Some of these fluctuations may be more pronounced than they were in the
past as a result of the issuance by us in May 2009 of warrants to purchase 2,909,244 shares of our
common stock and the issuance by us in September 2010 of warrants to purchase 3,182,147 shares of
our common stock. These warrants are accounted for as a derivative financial instrument pursuant
to the ASC Topic 815, Derivatives and Hedging, and classified as a derivative liability.
Accordingly, the fair value of the warrants is recorded on our consolidated balance sheet as a
liability, and such fair value is adjusted at each financial reporting date with the adjustment to
fair value reflected in our consolidated statement of operations. The fair value of the warrants
is determined using the Black-Scholes option valuation model. Fluctuations in the assumptions and
factors used in the Black-Scholes model can result in adjustments to the fair value of the warrants
reflected on our balance sheet and, therefore, our statement of operations. Due to the
classification of such warrants and other factors, quarterly results of operations are difficult to
forecast, and period-to-period comparisons of our operating results may not be predictive of future
performance. In one or more future quarters, our results of operations may fall below the
expectations of securities analysts and investors. In that event, the market price of our common
stock could decline. In addition, the market price of our common stock may fluctuate or decline
regardless of our operating performance.
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FORWARD-LOOKING STATEMENTS
This prospectus and the SEC filings that are incorporated by reference into this prospectus
contain or incorporate by reference forward-looking statements. The Private Securities Litigation
Reform Act of 1995 has established that these statements qualify for safe harbors from liability.
You can identify these statements by forward-looking words such as may, expect, anticipate,
contemplate, believe, estimate, intends, and continue or similar words. You should read
statements that contain these words carefully because they discuss future expectations, contain
projections of future results of operations or financial condition, or state other
forward-looking information.
We believe it is important to communicate our expectations to our stockholders. However, there
may be events in the future that we are not able to predict accurately or over which we have no
control. The risk factors and cautionary language discussed in this prospectus provide examples of
risks, uncertainties and events that may cause actual results to differ materially from the
expectations described in the forward-looking statements, including our ability to:
| identify and capitalize on possible collaboration, strategic partnering, acquisition or divestiture opportunities; | ||
| obtain suitable financing to support our operations, clinical trials and commercialization of our products; | ||
| manage our growth and the commercialization of our products; | ||
| achieve operating efficiencies as we progress from a mid-stage to a final-stage biotechnology company; | ||
| successfully compete in our markets; | ||
| effectively manage our expenses; | ||
| realize the results we anticipate from our pre-clinical development activities and the clinical trials of our products; | ||
| succeed in finding and retaining joint venture and collaboration partners to assist us in the successful marketing, distribution and commercialization of our products; | ||
| achieve regulatory approval for our products; | ||
| believe that our product candidates could potentially be useful for many different oncology indications that address large markets; | ||
| obtain on commercially reasonable terms adequate product liability insurance for our commercialized products; | ||
| adequately protect our proprietary information and technology from competitors and avoid infringement of proprietary information and technology of our competitors; |
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| assure that our products, if successfully developed and commercialized following regulatory approval, are not rendered obsolete by products or technologies of competitors; and | ||
| not encounter problems with third parties, including key personnel, upon whom we are dependent. |
Although we believe that the forward-looking statements contained herein are reasonable, we
can give no assurance that our expectations will be met. All forward-looking statements contained
herein are expressly qualified in their entirety by this cautionary statement and the risk factors
beginning on page 5.
You are cautioned not to place undue reliance on these forward-looking statements, which speak
only as of the date of this prospectus. Except to the extent required by applicable laws and
regulations, we undertake no obligation to update these forward-looking statements to reflect
events or circumstances after the date of this prospectus or to reflect the occurrence of
unanticipated events.
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USE OF PROCEEDS
The selling stockholders will receive all of the proceeds from sales of the common stock sold
pursuant to this prospectus. However, we may receive proceeds of up to approximately $13.5 million
to the extent that the warrants issued to the selling stockholders in connection with the 2010
private placement are fully exercised for cash. There can be no assurance that any of the warrants
will be exercised by the selling stockholders or that they will exercise the warrants for cash
instead of using the cashless exercise feature of the warrants.
We plan to use the net proceeds, if any, from the exercise of the warrants for general
corporate purposes, including research and product development, such as funding pre-clinical
studies and clinical trials and otherwise moving product candidates towards commercialization, or
the possible acquisition or licensing of new product candidates or technology which could result in
other product candidates. The amounts and timing of our actual expenditures for each purpose may
vary significantly depending upon numerous factors, including the status of our product development
and clinical trial efforts, regulatory approvals, competition, marketing and sales activities and
the market acceptance of any products introduced by us. We reserve the right to change the use of
proceeds as a result of certain contingencies such as competitive developments, opportunities to
acquire technologies or products and other factors. Pending application of the proceeds of sale of
the securities, we intend to invest the net proceeds of the sale in short-term, investment-grade,
interest-bearing instruments.
PRICE RANGE OF OUR COMMON STOCK
Our common stock has been quoted on the NASDAQ Global Market under the symbol ONTY.
The following table sets forth for the indicated periods the high and low sales prices of our
common stock as reported by the NASDAQ Global Market.
High | Low | |||||||
Fiscal year
ended December 31, 2011 (through March 14, 2011): |
||||||||
First Quarter |
$ | 3.62 | $ | 2.99 | ||||
Fiscal year ended December 31, 2010: |
||||||||
First Quarter |
$ | 5.90 | $ | 3.16 | ||||
Second Quarter |
4.35 | 2.20 | ||||||
Third Quarter |
4.73 | 3.10 | ||||||
Fourth Quarter |
4.20 | 3.11 | ||||||
Fiscal year ended December 31, 2009: |
||||||||
First Quarter |
$ | 1.89 | $ | 0.76 | ||||
Second Quarter |
4.89 | 1.69 | ||||||
Third Quarter |
7.77 | 2.99 | ||||||
Fourth Quarter |
5.86 | 3.41 | ||||||
DIVIDEND POLICY
We have never paid cash dividends on our common stock and have no present intention to pay any
dividends in the future. We are not profitable and do not expect to earn any material revenues for
at least several years, if at all. As a result, we intend to use all available cash and liquid
assets in the development of our business. Any future determination about the payment of dividends
will be made at the discretion of our board of directors and will depend upon our earnings, if any,
capital requirements, operating and financial conditions and on such other factors as our board of
directors deems relevant.
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DESCRIPTION OF OUR CAPITAL STOCK
The following is a summary of the material provisions of the common stock and the preferred
stock contained in our certificate of incorporation and bylaws. For greater detail about our
capital stock, please refer to our certificate of incorporation and bylaws, both as filed with the
SEC as annexes to our registration statement on Form S-4 initially filed September 27, 2007, as
amended.
General
We are authorized to issue 110,012,500 shares of all classes of capital stock, of which
100,000,000 shares is common stock, $0.0001 par value per share; 10,000,000 shares is undesignated
preferred stock, $0.0001 par value per share and 12,500 shares is Class UA preferred stock, no par
value per share. Our capital is stated in U.S. dollars. As of February 28, 2011, we had 30,088,628
outstanding shares of common stock.
Common Stock
The holders of our common stock are entitled to receive such dividends or distributions as are
lawfully declared on our common stock, to have notice of any authorized meeting of stockholders,
and to one vote for each share of our common stock on all matters which are properly submitted to a
vote of stockholders. As a Delaware corporation, we are subject to statutory limitations on the
declaration and payment of dividends. In the event of a liquidation, dissolution or winding up of
Oncothyreon, holders of our common stock have the right to a ratable portion of assets remaining
after satisfaction in full of the prior rights of creditors, including holders of our indebtedness,
all liabilities and the aggregate liquidation preferences of any outstanding shares of our
preferred stock. The holders of our common stock have no conversion, redemption, preemptive or
cumulative voting rights.
Preferred Stock
As of February 28, 2011, other than as described below, no shares of our preferred stock had
been issued and no such shares were subject to outstanding options and other rights to purchase or
acquire. However, shares of preferred stock may be issued in one or more series from time to time
by our board of directors, and the board of directors is expressly authorized to fix by resolution
or resolutions the designations and the powers, preferences and rights, and the qualifications,
limitations and restrictions thereof, of the shares of each series of preferred stock. Subject to
the determination of our board of directors, any shares of our preferred stock that may be issued
in the future would generally have preferences over our common stock with respect to the payment of
dividends and the distribution of assets in the event liquidation, dissolution or winding up of
Oncothyreon.
Class UA Preferred Stock
Our certificate of incorporation provides for a separate class of preferred stock, the Class
UA preferred stock. As of February 28, 2011, 12,500 shares of Class UA preferred stock are issued
and outstanding and held by the University of Alberta. Below is a summary of the terms associated
with our Class UA preferred stock. Please refer to our certificate of incorporation for a full
description of the rights and privileges attached to our Class UA preferred stock.
Voting. Each share of Class UA preferred stock is not entitled to receive notice of, or to
attend and vote at, any stockholder meeting unless the meeting is called to consider any matter in
respect of which the holders of the shares of Class UA preferred stock would be entitled to vote
separately as a class, in which case
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the holders of the shares of Class UA preferred stock shall be entitled to receive notice of
and to attend and vote at such meeting. Amendments to our certificate of incorporation that would
increase or decrease the par value of the Class UA preferred stock or alter or change the powers,
preferences or special rights of the Class UA preferred stock so as to affect them adversely would
require the approval of the Class UA preferred stock.
Conversion. The Class UA preferred stock is not convertible into shares of any other class of
our capital stock.
Dividends. The holders of the shares of Class UA preferred stock are not entitled to receive
dividends.
Liquidation Preference. In the event of any liquidation, dissolution or winding up of
Oncothyreon, the holders of the Class UA preferred stock are entitled to receive, in preference to
the holders of our common stock, an amount equal to the lesser of (a) 20% of the after tax profits,
which we refer to as net profits, determined in accordance with generally accepted accounting
principles, where relevant, consistently applied, for the period commencing at the end of our last
completed fiscal year and ending on the date of the distribution of our assets to stockholders
together with 20% of our net profits for the last completed fiscal year and (b) Cdn.$100 per share.
Redemption. We may, at our option and subject to the requirements of applicable law, redeem at
any time the whole or from time to time any part of the then-outstanding shares of Class UA
preferred stock for Cdn.$100 per share. We are required each year to redeem at Cdn.$100 per share
that number of shares of Class UA preferred stock as is determined by dividing 20% of the net
profits by Cdn.$100.
Anti-takeover Effect of Unissued Shares of Capital Stock
Common Stock. Our shares of authorized and unissued common stock are available for future
issuance without additional stockholder approval. While these additional shares are not designed to
deter or prevent a change of control, under some circumstances we could use the additional shares
to create voting impediments or to frustrate persons seeking to effect a takeover or otherwise gain
control by, for example, issuing those shares in private placements to purchasers who might side
with our board of directors in opposing a hostile takeover bid.
Preferred Stock. Our certificate of incorporation grants our board of directors the authority,
without any further vote or action by our stockholders, to issue preferred stock in one or more
series and to fix the number of shares constituting any such series and the preferences,
limitations and relative rights, including dividend rights, dividend rate, voting rights, terms of
redemption, redemption price or prices, conversion rights and liquidation preferences of the shares
constituting any series. The existence of authorized but unissued preferred stock could reduce our
attractiveness as a target for an unsolicited takeover bid since we could, for example, issue
shares of preferred stock to parties who might oppose such a takeover bid or shares that contain
terms the potential acquirer may find unattractive. This may have the effect of delaying or
preventing a change in control, may discourage bids for the common stock at a premium over the
market price of the common stock, and may adversely affect the market price of, and the voting and
other rights of the holders of, common stock.
Delaware Anti-Takeover Law and Certain Provisions of Our Certificate of Incorporation and By-laws
Certain provisions of Delaware law and our certificate of incorporation and bylaws could make
it more difficult to acquire us by means of a tender offer, a proxy contest or otherwise and to
remove our incumbent officers and directors. These provisions, summarized below, are expected to
discourage certain types of coercive takeover practices and inadequate takeover bids and to
encourage persons seeking to acquire
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control of us to first negotiate with us. We believe that the benefits of increased protection
of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal
to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition
proposals because, among other things, negotiation of these proposals could result in an
improvement of their terms.
We are subject to Section 203 of the General Corporation Law of the State of Delaware, an
anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation from
engaging in a business combination with an interested stockholder for a period of three years
following the date the person became an interested stockholder, unless, with exceptions, the
business combination or the transaction in which the person became an interested stockholder is
approved in a prescribed manner. Generally, a business combination includes a merger, asset or
stock sale, or other transaction resulting in a financial benefit to the interested stockholder.
Generally, an interested stockholder is a person who, together with affiliates and associates,
owns, or within three years prior to the determination of interested stockholder status, did own,
15% or more of a corporations voting stock. The existence of this provision would be expected to
have an anti-takeover effect with respect to transactions not approved in advance by our board of
directors, including discouraging attempts that might result in a premium over the market price for
the shares of common stock held by stockholders.
Our certificate of incorporation and bylaws require that any action required or permitted to
be taken by our stockholders must be effected at a duly called annual or special meeting of the
stockholders and may not be effected by written consent. Special meetings of our stockholders may
be called only by the Chairman of our board of directors, a majority of our board of directors or
our president. Our certificate of incorporation and bylaws also provide that our board of directors
will be divided into three classes, with each class serving staggered three-year terms. Except as
otherwise set forth in our certificate of incorporation and bylaws, the stockholders may amend or
repeal certain provisions of our certificate of incorporation and may amend, alter or repeal our
bylaws only with the affirmative vote of the holders of 75% of the shares of capital stock issued
and outstanding and entitled to vote at a general or special meeting of our stockholders, as
applicable. These provisions may have the effect of deterring hostile takeovers or delaying changes
in control of us or our management.
Transfer Agent
The transfer agent for our common stock is Computershare Investor Services Inc., 350 Indiana
St., Suite 800, Golden, Colorado 80401, (214) 340-0757.
Listing
Our common stock is quoted on the Nasdaq Global Market under the trading symbol ONTY.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial ownership of our
capital stock as of February 28, 2011 by (i) each person known by us to be the beneficial owner of
more than 5% of any class of our voting securities, (ii) each of our directors, (iii) each of our
named executive officers and (iv) our directors and executive officers as a group, including
shares they had the right to acquire within 60 days after February 28, 2011
Common Stock Beneficially | ||||||||
Owned | ||||||||
Name of Beneficial Owner(1) | Number of Shares(2) | Percent of Class(3) | ||||||
5% Stockholders: |
||||||||
Ayer Capital Management, LP(4) |
1,617,059 | 5.37 | % | |||||
Directors and Executive Officers: |
||||||||
Christopher Henney(5) |
81,768 | * | ||||||
Richard Jackson(6) |
17,525 | * | ||||||
W. Vickery Stoughton(7) |
19,468 | * | ||||||
Daniel Spiegelman(8) |
| * | ||||||
Douglas Williams(9) |
| * | ||||||
Robert Kirkman(10) |
683,986 | 2.22 | % | |||||
Gary Christianson(11) |
61,461 | * | ||||||
Shashi Karan(12) |
16,975 | * | ||||||
Julia Eastland |
| * | ||||||
Diana Hausman(13) |
20,000 | * | ||||||
Scott Peterson(14) |
22,109 | * | ||||||
All directors and executive officers as a group (11 persons)(15) |
923,292 | 2.98 | % | |||||
* | Represents less than 1% of class or combined classes. | |
(1) | Except as otherwise indicated, the address of each stockholder identified is c/o Oncothyreon Inc., 2601 Fourth Avenue, Suite 500, Seattle, Washington 98121. Except as indicated in the other footnotes to this table, each person named in this table has sole voting and investment power with respect to all shares of stock beneficially owned by that person. | |
(2) | Options and warrants exercisable within 60 days after February 28, 2011 are deemed outstanding for the purposes of computing the percentage of shares owned by that person, but are not deemed outstanding for purposes of computing the percentage of shares owned by any other person. | |
(3) | Based on 30,088,628 shares of common stock issued and outstanding as of February 28, 2011. | |
(4) | Based on information of beneficial ownership as of December 31, 2010, included in a Schedule 13G/A filed with the SEC on February 15, 2011. The address of the Ayer Capital Management, LP is 230 California St., Suite 600, San Francisco, CA 94111. | |
(5) | Includes 53,602 shares of common stock that Dr. Henney has the right to acquire under outstanding options exercisable within 60 days after February 28, 2011. Shares attributable to restricted stock units owned are not reflected as none of the shares underlying the restricted stock units have vested or will vest within 60 days after February 28, 2011. | |
(6) | Includes 9,359 shares of common stock that Dr. Jackson has the right to acquire under outstanding options exercisable within 60 days after February 28, 2011. Shares attributable to restricted stock units owned are not reflected as none of the shares underlying the restricted stock units have vested or will vest within 60 days after February 28, 2011. | |
(7) | Includes 12,136 shares of common stock that Mr. Stoughton has the right to acquire under outstanding options exercisable within 60 days after February 28, 2011. Shares attributable to restricted stock units owned are not reflected as none of the shares underlying the restricted stock units have vested or will vest within 60 days after February 28, 2011. | |
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(8) | Shares attributable to restricted stock units owned are not reflected as none of the shares underlying the restricted stock units have vested or will vest within 60 days after February 28, 2011. | |
(9) | Shares attributable to restricted stock units owned are not reflected as none of the shares underlying the restricted stock units have vested or will vest within 60 days after February 28, 2011. | |
(10) | Includes 675,653 shares of common stock that Dr. Kirkman has the right to acquire under outstanding options exercisable within 60 days after February 28, 2011. | |
(11) | Includes 60,000 shares of common stock that Mr. Christianson has the right to acquire under outstanding options exercisable within 60 days after February 28, 2011. | |
(12) | Includes 6,875 shares of common stock that Mr. Karan has the right to acquire under outstanding options exercisable within 60 days after February 28, 2011. In accordance with the separation agreement by and between us and Mr. Karan, only options vested as of October 5, 2010 are exercisable, and options may only be exercised for up to 180 days from the separation date, or April 3, 2011. | |
(13) | Includes 20,000 shares of common stock that Dr. Hausman has the right to acquire under outstanding options exercisable within 60 days after February 28, 2011. | |
(14) | Includes 18,750 shares of common stock that Dr. Peterson has the right to acquire under outstanding options exercisable within 60 days after February 28, 2011. | |
(15) | Includes 856,375 shares of common stock that can be acquired under outstanding options exercisable within 60 days after February 28, 2011. | |
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SELLING STOCKHOLDERS
We have included in this prospectus and related registration statement the common stock
(including common stock issuable upon exercise of warrants) issued in the 2010 private placement to
the selling stockholders. The term selling stockholder includes the stockholders listed below and
their transferees, pledges, donees or other successors in interest selling shares received after
the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution
or other non-sale related transfer. Information concerning the selling stockholders may change
after the date of this prospectus and changed information will be presented in a supplement to this
prospectus if and when required.
The information in the table below was prepared based solely on information supplied to us by
or on behalf of the selling stockholders on or prior to February 28, 2011, and we have not
independently verified such information. The aggregate number of shares of common stock in the
columns Shares Sold in the Offering and Shares Issuable Upon Exercise of Warrants Sold in the
Offering represents the total shares of common stock that a selling stockholder may offer under
this prospectus. Each selling stockholder may offer and sell, from time to time, some, all or none
of its shares included in this prospectus. The number of shares in the column Number of Shares of
Common Stock Owned After Offering assumes that the selling stockholder sells all of the shares
covered by this prospectus as we have assumed for purposes of such table that none of the shares
covered by this prospectus will be held by the selling stockholders after the completion of their
resales.
We do not know how long the selling stockholder will hold such shares before selling them, and
we currently have no agreements, arrangements or understandings with the selling stockholders
regarding the sale of any of the shares. Because the selling stockholders may offer all or only
some portion of the 7,425,017 shares of common stock to be registered, no estimate can be given as
to the amount or percentage of these shares of common stock that will be held by the selling
stockholders upon termination of their resales. The selling stockholders may have sold or
transferred, in transactions exempt from the registration requirements of the Securities Act, some
or all of such shares since the date on which the information in the table is presented.
Information about the selling stockholders may change over time.
The beneficial ownership percentages in the table below are determined in accordance with the
rules of the SEC. Beneficial ownership generally includes voting or investment power with respect
to securities. Shares of common stock which can be acquired under options or warrants that are
currently exercisable, or which will become exercisable no later than 60 days after February 28,
2011, are deemed outstanding for the purposes of computing the percentage of the person holding
such options or warrants, but not deemed outstanding for the purposes of computing the percentage
of any other person. Except as indicated by footnote and subject to community property laws where
applicable, the persons named in the table below have sole voting and investment power with respect
to all shares of common stock shown beneficially owned by them.
Except as noted in the footnotes to the table below, to our knowledge, none of the selling
stockholders has held any position or office or had any other material relationship with us or any
of our predecessors or affiliates within the past three years other than as a result of the
ownership of our securities. We may amend or supplement this prospectus from time to time to update
the disclosure set forth in it.
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Shares | ||||||||||||||||||||||||
Issuable | ||||||||||||||||||||||||
Upon | ||||||||||||||||||||||||
Number of Shares of | Exercise | Number of Shares of | ||||||||||||||||||||||
Common Stock | Shares Sold | of Warrants | Common Stock | |||||||||||||||||||||
Name of Selling | Owned Prior to Offering | in | Sold In | Owned After Offering | ||||||||||||||||||||
Stockholder | Number(1) | Percent(2) | the Offering | the Offering | Number(1)(3) | Percent(2) | ||||||||||||||||||
Ayer Capital Partners Master
Fund, L.P.(4) |
1,744,030 | 5.60 | % | 651,541 | 852,949 | 239,540 | * | |||||||||||||||||
Epworth Ayer Capital(4) |
155,934 | * | 59,597 | 76,152 | 20,185 | * | ||||||||||||||||||
Ayer Capital Partners Kestrel Fund,
LP(4) |
57,449 | * | 22,532 | 28,040 | 6,877 | * | ||||||||||||||||||
Hudson Bay Master Fund Ltd.(5) |
1,443,209 | 4.58 | % | | 328,571 | 1,114,638 | 3.57 | % | ||||||||||||||||
Capital Ventures International(6)(7) |
825,938 | 2.67 | % | | 385,725 | 440,213 | 1.44 | % | ||||||||||||||||
Iroquois Master Fund Ltd.(8) |
440,437 | 1.44 | % | | 321,428 | 119,009 | * | |||||||||||||||||
Cranshire Capital, L.P.(9) |
1,025,330 | 3.31 | % | 74,495 | 308,570 | 642,265 | 2.09 | % | ||||||||||||||||
Freestone Advantage Partners, LP(10) |
29,002 | * | 8,244 | 12,858 | 7,900 | * | ||||||||||||||||||
Straus Partners, L.P.(11) |
543,141 | 1.79 | % | 150,000 | 112,500 | 280,641 | * | |||||||||||||||||
Straus Healthcare Partners, L.P.(11) |
489,692 | 1.62 | % | 150,000 | 112,500 | 227,192 | * | |||||||||||||||||
Cowen Overseas Investment LP(6)(12) |
214,285 | * | | 214,285 | | * | ||||||||||||||||||
Kingsbrook Opportunities Master
Fund LP(13) |
414,285 | 1.37 | % | 200,000 | 214,285 | | * | |||||||||||||||||
Hartz Capital Investments, LLC(14) |
107,142 | * | | 107,142 | | * | ||||||||||||||||||
DAFNA LifeScience Select Ltd(15) |
60,000 | * | | 60,000 | | * | ||||||||||||||||||
DAFNA LifeScience Ltd(15) |
26,785 | * | | 26,785 | | * | ||||||||||||||||||
DAFNA LifeScience Market Neutral
Ltd(15) |
20,357 | * | | 20,357 | | * | ||||||||||||||||||
* | Represents beneficial ownership of less than one percent of the outstanding shares of our common stock. | |
(1) | Warrants exercisable within 60 days after February 28, 2011 are deemed outstanding for the purposes of computing the percentage of shares owned by that person, but are not deemed outstanding for purposes of computing the percentage of shares owned by any other person. | |
(2) | Applicable percentage ownership is based on 30,088,628 shares of our common stock outstanding as of February 28, 2011. | |
(3) | Assumes the sale of all shares being offered pursuant to this prospectus, including an aggregate of 3,182,147 shares issuable upon exercise of the warrants issued in the 2010 private placement. | |
(4) | The address of Ayer Capital Partners Master Fund, L.P., Epworth Ayer Capital and Ayer Capital Partners Kestrel Fund, LP (collectively, the Ayer Funds) is 230 California St., Suite 600, San Francisco, CA 94111 and such shares include 1,061,082, 94,776, and 34,916 shares of common stock, respectively, underlying warrants held by such security holders. Jay Venkatesan exercises voting and/or dispositive power with respect to the shares held of record by the Ayer Funds. The Ayer Funds are under common control and are deemed affiliates of one another. | |
(5) | The address of this security holder is 120 Broadway, 40th Floor, New York, NY 10271 and such shares include 1,443,209 shares of common stock underlying warrants held by such security holder. Hudson Bay Capital Management LP, the investment manager of Hudson Bay Master Fund Ltd., has voting and investment power over these securities. Sander Gerber is the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay Capital Management LP. Sander Gerber disclaims beneficial ownership over these securities. | |
(6) | This security holder is an affiliate of a broker-dealer. Each affiliate of a broker-dealer represents that such affiliate (a) purchased or acquired the securities to be resold in the ordinary course of business, and (b) had no agreements or understandings, directly or indirectly, with any person to distribute the securities at the time of their purchase. | |
(7) | The address of this security holder is 101 California St, Suite 3250, San Francisco, CA, 94111 and such shares include 825,938 shares of common stock underlying warrants held by such security holder. Heights Capital Management, Inc., the authorized agent of this security holder, has discretionary authority to vote and dispose of these securities held by this security holder and may be deemed to be the beneficial owner of these securities. Martin Kobinger, in his capacity as investment manager of Heights Capital Management, Inc. may also be deemed to have the investment discretion and voting power over these securities. Mr. Kobinger disclaims any such beneficial ownership of these securities. | |
(8) | Includes 440,437 shares of common stock underlying warrants held by such security holder. The address of this security holder is 641 Lexington Ave., 26th Floor, New York, NY 10022. Iroquois Capital Management L.L.C. (Iroquois Capital) is the investment manager of Iroquois Master Fund, Ltd. (IMF). Consequently, Iroquois Capital has voting control and investment discretion over securities held by IMF. As managing members of Iroquois Capital, Joshua Silverman and Richard Abbe make voting and investment decisions on behalf of Iroquois Capital in its capacity as investment manager to IMF. As a result of the | |
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foregoing, Mr. Silverman and Mr. Abbe may be deemed to have beneficial ownership (as determined under Section 13(d) of the Exchange Act) of the securities held by IMF. Notwithstanding the foregoing, Mr. Silverman and Mr. Abbe disclaim such beneficial ownership. | ||
(9) | Includes 866,473 shares of common stock underlying warrants held by such security holder. The address of this security holder is 3100 Dundee Road, Suite 703, Northbrook, IL 60062. Downsview Capital, Inc. (Downsview) is the general partner of Cranshire Capital, L P. (Cranshire) and consequently has voting control and investment discretion over securities held by Cranshire. Mitchell P. Kopin (Mr. Kopin), President of Downsview, has voting control over Downsview. As a result of the foregoing, each of Mr. Kopin and Downsview may be deemed to have beneficial ownership (as determined under Section 13(d) of the Exchange Act) of the shares of common stock beneficially owned by Cranshire. | |
(10) | Includes 12,858 shares of common stock underlying warrants held by such security holder. The address of this security holder is 3100 Dundee Road, Suite 703, Northbrook, IL 60062. Downsview is the investment manager for a managed account of Freestone Advantage Partners, LP and consequently has voting control and investment discretion over securities held in such account. Mr. Kopin, President of Downsview, has voting control over Downsview. As a result, each of Mr. Kopin and Downsview may be deemed to have beneficial ownership (as determined under Section 13(d) of the Exchange Act) of the shares held in such account which are being registered hereunder. | |
(11) | The address of Straus Partners, L.P. and Straus Healthcare Partners, L.P. (together the Straus Funds) is 767 Third Ave., 21st Floor, New York, NY 10017 and such shares include 198,560 and 160,311 shares of common stock, respectively, underlying warrants held by such security holders. Ravinder Holder is the general partner of the Straus Funds and holds voting and/or dispositive power over the shares held of record by the Straus Funds. The Straus Funds are under common control and are deemed affiliates of one another. | |
(12) | Includes 214,285 shares of common stock underlying warrants held by such security holder. The address of this security holder is c/o Ramius LLC, 599 Lexington Ave, 20th Floor, New York, NY 10022. Ramius Advisors, LLC (Ramius Advisors) is the general partner of Cowen Overseas Investment LP (COIL) and consequently has voting control and investment discretion over securities held by COIL. Ramius LLC (Ramius) is the managing member of Ramius Advisors and may be considered the beneficial owner of any securities deemed to be beneficially owned by Ramius Advisors. Cowen Group, Inc. (Cowen) is the managing member of Ramius and may be considered the beneficial owner of any securities deemed to be beneficially owned by Ramius. Each of Ramius and Cowen disclaims beneficial ownership of these securities. | |
(13) | Includes 214,285 shares of common stock underlying warrants held by such security holder. The address of this security holder is c/o Kingsbrook Partners LP, 590 Madison Ave., 27th Floor, New York, NY 10022. Kingsbrook Partners LP (Kingsbrook Partners) is the investment manager of Kingsbrook Opportunities Master Fund LP (Kingsbrook Opportunities) and consequently has voting control and investment discretion over securities held by Kingsbrook Opportunities. Kingsbrook Opportunities GP LLC (Opportunities GP) is the general partner of Kingsbrook Opportunities and may be considered the beneficial owner of any securities deemed to be beneficially owned by Kingsbrook Opportunities. KB GP LLC (GP LLC) is the general partner of Kingsbrook Partners and may be considered the beneficial owner of any securities deemed to be beneficially owned by Kingsbrook Partners. Ari J. Storch, Adam J. Chill and Scott M. Wallace are the sole managing members of Opportunities GP and GP LLC and as a result may be considered beneficial owners of any securities deemed beneficially owned by Opportunities GP and GP LLC. Each of Kingsbrook Partners, Opportunities GP, GP LLC and Messrs. Storch, Chill and Wallace disclaim beneficial ownership of these securities. | |
(14) | Includes 107,142 shares of common stock underlying warrants held by such security holder. The address of this security holder is 120 Broadway, Suite 1019, New York, NY 10271. Empery Asset Management LP (Empery Management), the authorized agent of Hartz Capital Investments, LLC (Hartz), has discretionary authority to vote and dispose of the shares held by Hartz and may be deemed to be the beneficial owner of these shares. Martin Hoe and Ryan Lane, in their capacity as investment managers of Empery Management, may also be deemed to have investment discretion and voting power over the shares held by the Empery Funds. Mr. Hoe and Mr. Lane disclaim any beneficial ownership of these shares. | |
(15) | The address of DAFNA LifeScience Select Ltd, DAFNA LifeScience Ltd and DAFNA LifeScience Market Neutral Ltd (collectively, the DAFNA Funds) is 10990 Wilshire Blvd, Suite 1400, Los Angeles, CA 90024 and such shares include 60,000, 26,785, and 20,357 shares of common stock, respectively, underlying warrants held by such security holders. Nathan Fischel, MD, CFA and Fariba Ghodsian, Ph.D. exercise shared voting and dispositive power with respect to the shares held of record by the DAFNA Funds. The DAFNA Funds are under common control and are deemed affiliates of one another. | |
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PLAN OF DISTRIBUTION
We are registering the shares of common stock issued to the selling stockholders and issuable
upon exercise of the warrants issued to the selling stockholders to permit the resale of these
shares of common stock by the holders of the shares of common stock and warrants from time to time
after the date of this prospectus. We will not receive any of the proceeds from the sale by the
selling stockholders of the shares of common stock. We will bear all fees and expenses incident to
our obligation to register the offer and sale of the shares of common stock.
The selling stockholders may sell all or a portion of the shares of common stock beneficially
owned by them and offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of common stock are sold through underwriters or
broker-dealers, the selling stockholders will be responsible for underwriting discounts or
commissions or agents commissions. The shares of common stock may be sold on any national
securities exchange or quotation service on which the securities may be listed or quoted at the
time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges
or systems or in the over-the-counter market and in one or more transactions at fixed prices, at
prevailing market prices at the time of the sale, at varying prices determined at the time of sale,
or at negotiated prices. These sales may be effected in transactions, which may involve crosses or
block transactions. The selling stockholders may use any one or more of the following methods when
selling shares:
| ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | ||
| block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; | ||
| purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | ||
| an exchange distribution in accordance with the rules of the applicable exchange; | ||
| privately-negotiated transactions; | ||
| settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part; | ||
| broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; | ||
| through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise; | ||
| a combination of any such methods of sale; and | ||
| any other method permitted pursuant to applicable law. |
The selling stockholders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act, as permitted by that rule, or
Section 4(1) under the Securities Act, if available, rather than under this prospectus, provided
that they meet the criteria and conform to the requirements of those provisions.
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Broker dealers engaged by the selling stockholders may arrange for other broker dealers to
participate in sales. If the selling stockholders effect such transactions by selling shares of
common stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts, concessions or
commissions from the selling stockholders or commissions from purchasers of the shares of common
stock for whom they may act as agent or to whom they may sell as principal. Such commissions will
be in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the
case of an agency transaction will not be in excess of a customary brokerage commission in
compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in
compliance with FINRA IM-2440.
In connection with sales of the shares of common stock or otherwise, the selling stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the shares of common stock in the course of hedging in positions
they assume. The selling stockholders may also sell shares of common stock short and deliver shares
of common stock covered by this prospectus to close out short positions and to return borrowed
shares in connection with such short sales. The selling stockholders may also loan or pledge shares
of common stock to broker-dealers that in turn may sell such shares, to the extent permitted by
applicable law. The selling stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of shares offered
by this prospectus, which shares such broker-dealer or other financial institution may resell
pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The selling stockholders may, from time to time, pledge or grant a security interest in some
or all of the warrants or shares of common stock owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may offer and sell the
shares of common stock from time to time pursuant to this prospectus or any amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act, amending, if
necessary, the list of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus. The selling stockholders also may
transfer and donate the shares of common stock in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.
The selling stockholders and any broker-dealer or agents participating in the distribution of
the shares of common stock may be deemed to be underwriters within the meaning of Section 2(11)
of the Securities Act in connection with such sales and in which case may be subject to certain
statutory liabilities under the Exchange Act.
The selling stockholders will be subject to the applicable prospectus delivery requirements of
the Securities Act unless subject to an exemption therefrom, including under Rule 172 thereunder.
Each selling stockholder has informed us that it is not a registered broker-dealer and does
not have any written or oral agreement or understanding, directly or indirectly, with any person to
distribute the common stock. Upon our being notified in writing by a selling stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of common stock
through a block trade, special offering, exchange distribution or secondary distribution or a
purchase by a broker or dealer, a supplement to this prospectus will be filed, if required,
pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling
stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such the shares of common stock were sold, (iv) the commissions paid or
discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information set out or
incorporated by reference in this prospectus, and
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(vi) other facts material to the transaction. In no event shall any broker-dealer receive fees,
commissions and markups, which, in the aggregate, would exceed 8.0%.
Under the securities laws of some states, the shares of common stock may be sold in such
states only through registered or licensed brokers or dealers. In addition, in some states the
shares of common stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied
with.
There can be no assurance that any selling stockholder will sell any or all of the shares of
common stock registered pursuant to the registration statement, of which this prospectus forms a
part.
Each selling stockholder and any other person participating in such distribution will be
subject to applicable provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which
may limit the timing of purchases and sales of any of the shares of common stock by the selling
stockholder and any other participating person. To the extent applicable, Regulation M may also
restrict the ability of any person engaged in the distribution of the shares of common stock to
engage in market-making activities with respect to the shares of common stock. All of the foregoing
may affect the marketability of the shares of common stock and the ability of any person or entity
to engage in market-making activities with respect to the shares of common stock.
We will pay all expenses of the registration of the shares of common stock pursuant to the
registration rights agreement, including, without limitation, SEC filing fees and expenses of
compliance with state securities or blue sky laws; provided, however, that each selling
stockholder will pay all underwriting discounts and selling commissions, if any and any related
legal expenses incurred by it. We will indemnify the selling stockholders against certain
liabilities, including some liabilities under the Securities Act, in accordance with the
registration rights agreement, or the selling stockholders will be entitled to contribution. We may
be indemnified by the selling stockholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us by the selling
stockholders specifically for use in this prospectus, in accordance with the related registration
rights agreement, or we may be entitled to contribution.
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LEGAL MATTERS
Certain legal matters will be passed upon for us by Wilson Sonsini Goodrich & Rosati,
Professional Corporation, Seattle, Washington. Additional legal matters may be passed on for us, or
any underwriters, dealers or agents, by counsel that we will name in the applicable prospectus
supplement.
EXPERTS
The consolidated financial statements of Oncothyreon Inc. as of and for the year ended
December 31, 2010 appearing in Oncothyreons Annual Report on Form 10-K for the year ended December
31, 2010, and the effectiveness of internal control over financial reporting as of December 31,
2010, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set
forth in their reports thereon, included therein, and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in reliance upon such
reports given on the authority of such firm as experts in accounting and auditing. The 2008 and
2009 consolidated financial statements incorporated in this prospectus by reference from the
Companys Annual Report on Form 10-K for the year ended December 31, 2010 have been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report,
which is incorporated herein by reference. Such financial statements have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and other reports, proxy statements and other information with the
SEC. Our SEC filings are available to the public over the Internet at the SECs website at
http://www.sec.gov. You may also read and copy any document we file at the SECs Public Reference
Room at 100 F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room. Our Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, and Current Reports on Form 8-K, including any amendments to those reports, and other
information that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the
Exchange Act can also be accessed free of charge by linking directly from our website at
http://www.oncothyreon.com under the Investor SEC Filings caption to the SECs Edgar Database.
These filings will be available as soon as reasonably practicable after we electronically file such
material with, or furnish it to, the SEC. Information contained on our website is not part of this
prospectus.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference the information we file with it, which means
that we can disclose important information to you by referring you to another document that we have
filed separately with the SEC. You should read the information incorporated by reference because it
is an important part of this prospectus. We incorporate by reference the following information or
documents that we have filed with the SEC:
| our Annual Report on Form 10-K for the year ended December 31, 2010 filed with the SEC on March 14, 2011; | ||
| our Current Reports on Form 8-K filed with the SEC on January 4 and February 9, 2011; and | ||
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| the description of our common stock set forth under the caption Description of Oncothyreons Securities Following the Arrangement in the prospectus that constitutes part of our Registration Statement on Form S-4 (File No. 333-145995), initially filed with the SEC on September 12, 2007, including any amendments or reports filed for the purpose of updating this description. |
Any statement contained in any document incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this prospectus to the extent that a statement contained in
this prospectus or any prospectus supplement modifies or supersedes such statement. Any statement
so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a
part of this prospectus.
We will provide without charge to each person, including any beneficial owner, to whom this
prospectus is delivered, upon written or oral request, a copy of any or all documents that are
incorporated by reference into this prospectus, but not delivered with the prospectus, other than
exhibits to such documents unless such exhibits are specifically incorporated by reference into the
documents that this prospectus incorporates. You should direct written requests to: Oncothyreon
Inc., 2601 Fourth Avenue, Suite 500, Seattle, Washington 98121, or you may call us at (206)
801-2100.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the various costs and expenses (other than the underwriting
discounts and commissions) payable by the company in connection with a distribution of securities
registered hereby. All amounts are estimates except the SEC registration fee.
SEC registration fee(1) |
$ | 1,864 | ||
Printing costs |
25,000 | |||
Legal fees and expenses |
125,000 | |||
Accounting fees and expenses |
34,000 | |||
Miscellaneous |
130,000 | |||
Total |
$ | 315,864 | ||
(1) | Previously paid. | |
Item 14. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a corporations board of
directors to grant, and authorizes a court to award, indemnity to officers, directors and other
corporate agents.
As permitted by Section 102(b)(7) of the Delaware General Corporation Law, the Registrants
certificate of incorporation includes provisions that eliminate the personal liability of its
directors and officers for monetary damages for breach of their fiduciary duty as directors and
officers.
In addition, as permitted by Section 145 of the Delaware General Corporation Law, the
certificate of incorporation and bylaws of the Registrant provide that:
| The Registrant shall indemnify its directors and officers for serving the Registrant in those capacities or for serving other business enterprises at the Registrants request, to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such persons conduct was unlawful. | ||
| The Registrant may, in its discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law. | ||
| The Registrant is required to advance expenses, as incurred, to its directors and officers in connection with defending a proceeding, except that such director or officer shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification. | ||
| The Registrant will not be obligated pursuant to the bylaws to indemnify a person with respect to proceedings initiated by that person, except with respect to proceedings authorized by the Registrants Board of Directors or brought to enforce a right to indemnification. |
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| The rights conferred in the certificate of incorporation and bylaws are not exclusive, and the Registrant is authorized to enter into indemnification agreements with its directors, officers, employees and agents and to obtain insurance to indemnify such persons. | ||
| The Registrant may not retroactively amend the bylaw provisions to reduce its indemnification obligations to directors, officers, employees and agents. The Registrants policy is to enter into separate indemnification agreements with each of its directors and officers that provide the maximum indemnity allowed to directors and executive officers by Section 145 of the Delaware General Corporation Law and also to provide for certain additional procedural protections. The Registrant also maintains directors and officers insurance to insure such persons against certain liabilities. |
These indemnification provisions and the indemnification agreements entered into between the
Registrant and its officers and directors may be sufficiently broad to permit indemnification of
the Registrants officers and directors for liabilities (including reimbursement of expenses
incurred) arising under the Securities Act.
Item 15. Recent Sales of Unregistered Securities.
Committed Equity Line Financing Facility
On July 6, 2010, the registrant entered into a common stock purchase agreement, or the
Purchase Agreement, with Purchaser, or SCBV, providing for a financing arrangement that is
sometimes referred to as a committed equity line financing facility. The Purchase Agreement
provides that, upon the terms and subject to the conditions set forth in the Purchase Agreement,
SCBV is committed to purchase up to $20.0 million of shares of the registrants common stock over
the 24-month term of the Purchase Agreement under certain specified conditions and limitations,
provided that in no event may the registrant sell under the Purchase Agreement more than 5,090,759
shares of common stock, which is equal to one share less than 20% of the registrants outstanding
shares of common stock on July 6, 2010, the closing date of the Purchase Agreement, less the number
of shares of common stock the registrant issued to SCBV on the closing date as Commitment Shares
described below. Furthermore, in no event will SCBV be obligated to purchase any shares of the
registrants common stock which, when aggregated with all other shares of the registrants common
stock then beneficially owned by SCBV, would result in the beneficial ownership by SCBV of more
than 9.9% of the then outstanding shares of the registrants common stock.
From time to time over the term of the Purchase Agreement, and in the registrants sole
discretion, the registrant may present SCBV with draw down notices requiring SCBV to purchase a
specified dollar amount of shares of its common stock, based on the price per share over 10
consecutive trading days, or the Draw Down Period, with the total dollar amount of each draw down
subject to certain agreed-upon limitations based on the market price of the registrants common
stock at the time of the draw down (which may not be waived or modified. In addition, in the
registrants sole discretion, but subject to certain limitations, the registrant may require SCBV
to purchase a percentage of the daily trading volume of the registrants common stock for each
trading day during the Draw Down Period. The registrant is allowed to present SCBV with up to 24
draw down notices during the term of the Purchase Agreement, with only one such draw down notice
allowed per Draw Down Period and a minimum of five trading days required between each Draw Down
Period.
Once presented with a draw down notice, SCBV is required to purchase a pro rata portion of the
shares on each trading day during the trading period on which the daily volume weighted average
price for the registrants common stock exceeds a threshold price determined by the registrant for
such draw down. The
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per share purchase price for these shares equals the daily volume weighted
average price of the registrants common stock on each date during the Draw Down Period on which shares are
purchased, less a discount ranging from 5.00% to 7.00%, based on a minimum price specified by the
registrant. If the daily volume weighted average price of the registrants common stock falls below
the threshold price on any trading day during a Draw Down Period, the Purchase Agreement provides
that SCBV will not be required to purchase the pro-rata portion of shares of common stock allocated
to that trading day. The obligations of SCBV under the Purchase Agreement to purchase shares of the
registrants common stock may not be transferred to any other party.
In partial consideration for SCBVs execution and delivery of the Purchase Agreement, the
registrant issued to SCBV upon the execution and delivery of the Purchase Agreement 59,921 shares
of its common stock, or the Commitment Shares, which is equal to the sum of $20,000 divided by the
volume weighted average price of our common stock for each trading day during the 10 trading day
period ending July 6, 2010. The average price per Commitment Share was $3.3377. The issuance of the
Commitment Shares, together with all other shares of common stock issuable to SCBV pursuant to the
terms of the Purchase Agreement, is exempt from registration under the Securities Act, pursuant to
the exemption for transactions by an issuer not involving any public offering under Section 4(2) of
and Regulation D under the Securities Act.
Reedland Capital Partners, an Institutional Division of Financial West Group, member
FINRA/SIPC, served as the registrants placement agent in connection with the financing arrangement
contemplated by the Purchase Agreement. The registrant has agreed to pay Reedland, upon each sale
of its common stock to SCBV under the Purchase Agreement, a fee equal to 1.0% of the aggregate
dollar amount of common stock purchased by SCBV upon settlement of each such sale. The registrant
has agreed to indemnify and hold harmless Reedland against certain liabilities, including certain
liabilities under the Securities Act.
2010 Private Placement
On September 23, 2010, the registrant entered into a securities purchase agreement with 17
investors in a private placement transaction, pursuant to which the registrant sold an aggregate of
4,242,870 units, with each unit comprised of one share of common stock and a warrant to purchase
0.75 of a share of common stock, at a purchase price of $3.50 per unit. The gross proceeds of such
private placement was an aggregate of approximately $14.9 million.
The shares of the registrants common stock, warrants and the shares of the registrants
common stock underlying the warrants, or collectively, the Securities, offered and sold in the 2010
private placement were offered and sold in reliance upon exemptions from registration under the
Securities Act in reliance on Section 4(2) of the Securities Act and Rule 506 of Regulation D
promulgated thereunder, as transactions by an issuer not involving a public offering. The
securities purchase agreement for the 2010 private placement contains representations to support
the registrants reasonable belief that the investors that are parties thereto had access to
information concerning our operations and financial condition, the investors did not acquire the
Securities with a view to the distribution thereof in the absence of an effective registration
statement or an applicable exemption from registration, and that the investors are accredited
investors (as defined by Rule 501 under the Securities Act). The registrant relied upon the
representations made by the investors pursuant to the purchase agreement in determining that such
exemptions were available.
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Number of shares of | ||||||||
common stock | ||||||||
issuable | ||||||||
Number of shares of | pursuant to warrants | |||||||
2010 private placement security holder | common stock | issued | ||||||
Ayer Capital Partners Master Fund, L.P. |
880,070 | 660,052 | ||||||
Epworth Ayer Capital |
87,832 | 65,874 | ||||||
Ayer Capital Partners Kestrel Fund, LP |
32,098 | 24,073 | ||||||
Hudson Bay Master Fund Ltd. |
571,429 | 428,571 | ||||||
Capital Ventures International |
514,300 | 385,725 | ||||||
Iroquois Master Fund Ltd. |
428,571 | 321,428 | ||||||
Cranshire Capital, L.P. |
411,427 | 308,570 | ||||||
Freestone Advantage Partners, LP |
17,144 | 12,858 | ||||||
Straus Partners, L.P. |
150,000 | 112,500 | ||||||
Straus Healthcare Partners, L.P. |
150,000 | 112,500 | ||||||
Cowen Overseas Investment LP |
285,714 | 214,285 | ||||||
Kingsbrook Opportunities Master Fund LP |
285,714 | 214,285 | ||||||
Empery Asset Master, LTD. |
142,857 | 107,142 | ||||||
Hartz Capital Investments, LLC |
142,857 | 107,142 | ||||||
DAFNA LifeScience Select Ltd. |
80,000 | 60,000 | ||||||
DAFNA LifeScience Ltd. |
35,714 | 26,785 | ||||||
DAFNA LifeScience Market Neutral Ltd. |
27,143 | 20,357 | ||||||
Total Securities Issued in 2010 Private Placement |
4,242,870 | 3,182,147 | ||||||
2011 Loan Agreement Warrants
On February 8, 2011, the registrant entered into a Loan and Security Agreement (the Loan
Agreement) with General Electric Capital Corporation (GECC and together with the other financial
institutions that may become parties to the Loan Agreement, the Lenders), pursuant to which the
Lenders agreed to extend a term loan (the Initial Term Loan) to the Company with an aggregate
principal amount of $5.0 million and, subject to the terms and conditions set forth in the Loan
Agreement, a second term loan (the Second Term Loan) with an aggregate principal amount of $7.5
million.
Pursuant to the terms of the Loan Agreement, the registrant is required to issue to the
Lenders warrants equal to 3.0% of the principal amount of term loan borrowings actually incurred.
On February 8, 2011, pursuant to the terms and conditions of the Loan Agreement, the registrant
issued to an affiliate of GECC a warrant to purchase up to 48,701 shares of the registrants common
stock at an exercise price equal to $3.08 per share (the Initial Warrant). If the registrant
borrows the Second Term Loan, the registrant must issue an additional warrant to the Lenders (the
Second Warrant and together with the Initial Warrant, the Warrants) to purchase a number of
shares of the registrants common stock equal to (x) $225,000 divided by (y) the exercise price per
share of the Second Warrant. Subject to the adjustment described in the following sentence, the
exercise price of the Second Warrant shall equal the lesser of the 10-day trailing average of the
registrants common stock price, as determined as of the close of business on the business day
immediately prior to the funding date of the Second Term Loan, and the registrants common stock
price, as determined as of the close of business on the business day immediately prior to the
funding date of the Second Term Loan. If application of the formula for determining the number of
shares underlying the Second Warrant would cause the aggregate number of such shares to exceed
467,565, then the number of shares purchasable will be fixed at 467,565 and the price per share
will be reduced proportionately to maintain the net economic terms dictated above. The Warrants are
immediately exercisable and will expire seven years from their respective dates of issue.
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The Warrants and the shares of the registrants common stock underlying the Warrants, is
exempt registration under the Securities Act, pursuant to an exemption for transactions of an
issuer not involving a public offering under Section 4(2) of and Rule 506 of Regulation D
promulgated under the Securities Act.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits. The following exhibits are filed herewith or are incorporated by reference to
exhibits previously filed with the SEC:
Exhibit | ||
Number | Description | |
2.1(a)
|
Agreement and Plan of Reorganization among ProlX Pharmaceuticals Corporation, D. Lynn Kirkpatrick, Garth Powis and Biomira Inc., dated October 30, 2006 (incorporated by reference from Exhibit 2.1 to Registration Statement on Form S-4/A filed on October 29, 2007). | |
2.1(b)
|
Amendment No. 1 to Agreement and Plan of Reorganization dated November 7, 2007 (incorporated by reference from Exhibit 2.1(b) to Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed on May 6, 2010). | |
3.1
|
Amended and Restated Certificate of Incorporation of Oncothyreon Inc. (incorporated by reference from Exhibit 3.1 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
3.2
|
Bylaws of Oncothyreon Inc. (incorporated by reference from Exhibit 3.1 to Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009 filed on August 14, 2009). | |
4.1
|
Form of registrants common stock certificate. (incorporated by reference from Exhibit 4.1 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
4.2
|
Registration Rights Agreement, dated July 6, 2010 between Oncothyreon Inc. and Small Cap Biotech Value, Ltd (incorporated by reference from Exhibit 4.1 to Current Report on Form 8-K filed on July 7, 2010). | |
4.3
|
Registration Rights Agreement, dated September 28, 2010 by and among Oncothyreon Inc. and the signatories thereto (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K, filed on September 27, 2010). | |
5.1**
|
Opinion of Wilson Sonsini Goodrich & Rosati, PC. | |
10.1*
|
Form of Indemnification Agreement (incorporated by reference from Exhibit 10.1 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
10.2
|
License Agreement between Biomira Inc. and the Dana-Farber Cancer Institute, Inc., dated November 22, 1996 (incorporated by reference from Exhibit 10.6 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.3
|
Amended and Restated License Agreement between Imperial Cancer Research Technology Limited and Biomira Inc., dated November 14, 2000 (incorporated by reference from Exhibit 10.11 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
10.4
|
Consent and Acknowledgement among Biomira Inc., Biomira International Inc., Biomira Europe B.V., Imperial Cancer Research Technology Limited and Merck KGaA, dated February 5, 2002 (incorporated by reference from Exhibit 10.13 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.5
|
License Agreement between the Governors of the University of Alberta and Biomira Inc., dated December 1, 2001 (incorporated by reference from Exhibit 10.14 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
10.6
|
Letter Agreement between Biomira Inc. and Cancer Research Technology Limited (formerly Imperial Cancer Research Technology Limited), dated March 9, 2004 (incorporated by reference from Exhibit 10.16 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
10.7
|
Exclusive License Agreement between the University of Arizona and ProlX Pharmaceuticals Corporation, dated July 29, 2004 (incorporated by reference from Exhibit 10.18 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.7(a)
|
First Amendment to Exclusive License Agreement between University of Arizona and Oncothyreon Inc., dated September 27, 2010 (incorporated by reference from Exhibit 10.7(a) to Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed on March 14, 2011). | |
10.8
|
Adjuvant License Agreement between Biomira International Inc. and Corixa Corporation, dated | |
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Exhibit | ||
Number | Description | |
October 20, 2004 (incorporated by reference from Exhibit 10.19 to Registration Statement on Form S-4/A filed on September 27, 2007). | ||
10.9
|
Adjuvant Supply Agreement between Biomira International Inc. and Corixa Corporation, dated October 20, 2004 (incorporated by reference from Exhibit 10.20 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
10.10
|
Exclusive Patent License Agreement between the University of Arizona and ProlX Pharmaceuticals Corporation, dated September 15, 2005 (incorporated by reference from Exhibit 10.21 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.10(a)
|
First Amendment to Exclusive Patent License Agreement between the University of Arizona and Oncothyreon Inc., dated November 28, 2008 (incorporated by reference from Exhibit 10.10(a) to Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed on March 14, 2011). | |
10.10(b)
|
Second Amendment to Exclusive Patent License Agreement between the University of Arizona and Oncothyreon Inc., dated August 13, 2010 (incorporated by reference from Exhibit 10.10(b) to Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed on March 14, 2011). | |
10.11*
|
Offer letter with Robert Kirkman, dated August 29, 2006 (incorporated by reference from Exhibit 10.27 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.11(a)*
|
Amendment to Robert Kirkman Offer Letter dated December 31, 2008 (incorporated by reference from Exhibit 10.18(a) to Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed on March 30, 2009). | |
10.11(b)*
|
Amendment to Robert Kirkman Offer Letter dated December 3, 2009 (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on December 7, 2009). | |
10.12
|
Letter Agreement between the University of Arizona and Biomira Inc., dated October 6, 2006 (incorporated by reference from Exhibit 10.28 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.13
|
Security Agreement between Jeffrey Millard and Biomira Inc., dated November 8, 2006 (incorporated by reference from Exhibit 10.43 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.14
|
General Security Agreement between Jeffrey Millard and Biomira Inc., dated November 8, 2006 (incorporated by reference from Exhibit 10.44 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.15
|
Promissory Note between Jeffrey Millard and Biomira Inc., dated November 8, 2006 (incorporated by reference from Exhibit 10.49 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.15(a)
|
Note Amendment Agreement by and between Oncothyreon Inc. and Jeffrey Millard, dated April 20, 2008 (incorporated by reference from Exhibit 10.36(a) to Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed on March 30, 2009). | |
10.16*
|
Offer Letter with Gary Christianson, dated June 29, 2007 (incorporated by reference from Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008 filed on November 10, 2008). | |
10.16(a)*
|
Amendment to Gary Christianson Offer Letter dated December 31, 2008 (incorporated by reference from Exhibit 10.40(a) to Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed on March 30, 2009). | |
10.16(b)*
|
Amendment to Gary Christianson Offer Letter dated December 3, 2009 (incorporated by reference from Exhibit 10.2 to Current Report on Form 8-K filed on December 7, 2009). | |
10.17
|
Sublease Agreement between Muze Inc. and Oncothyreon Inc., dated May 9, 2008 (incorporated by reference from Exhibit 10.2 to Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008 filed on November 10, 2008). | |
10.18
|
Lease Agreement between Selig Holdings Company and Oncothyreon Inc., dated May 9, 2008 (incorporated by reference from Exhibit 10.3 to Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008 filed on November 10, 2008). | |
10.19
|
Amendment Number 1 to Adjuvant License Agreement and Adjuvant Supply Agreement between Corixa Corporation, d/b/a GlaxoSmithKline Biologicals N.A. and Biomira Management Inc., dated August 8, 2008 (incorporated by reference from Exhibit 10.4 to Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008 filed on November 10, 2008). | |
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Exhibit | ||
Number | Description | |
10.20
|
Amended and Restated License Agreement between Biomira Management, Inc. and Merck KGaA, dated December 18, 2008 (incorporated by reference from Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009 filed on May 15, 2009). | |
10.21*
|
Offer Letter dated March 24, 2008 between Oncothyreon Inc. and Shashi Karan (incorporated by reference from Exhibit 99.1 to Current Report on Form 8-K filed on March 11, 2009). | |
10.21(a)*
|
Amendment to Shashi Karan Offer Letter dated December 3, 2009 (incorporated by reference from Exhibit 10.5 to Current Report on Form 8-K filed on December 7, 2009). | |
10.22
|
Form of Warrant (incorporated by reference from Annex A to the Companys free writing prospectus, dated as of May 19, 2009, and filed on May 20, 2009). | |
10.23*
|
Offer Letter dated June 9, 2009 between Oncothyreon Inc. and Scott Peterson, Ph.D. (incorporated by reference from Exhibit 10.2 to Current Report on Form 8-K filed on June 15, 2009). | |
10.23(a)*
|
Amendment to Scott Peterson Offer Letter dated December 3, 2009 (incorporated by reference from Exhibit 10.4 to Current Report on Form 8-K filed on December 7, 2009). | |
10.24*
|
Offer Letter dated July 6, 2009 between Oncothyreon Inc. and Diana Hausman, M.D. (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on August 4, 2009). | |
10.24(a)*
|
Amendment to Diana Hausman Offer Letter dated December 3, 2009 (incorporated by reference from Exhibit 10.3 to Current Report on Form 8-K filed on December 7, 2009). | |
10.25
|
Form of Warrant (incorporated by reference from Annex A to the Companys free writing prospectus, dated as of August 4, 2009, and filed on August 5, 2009). | |
10.26*
|
Amended and Restated Share Option Plan (incorporated by reference from Exhibit 10.2 to Current Report on Form 8-K filed on October 14, 2009). | |
10.27*
|
Form of Stock Option Agreement under the Amended and Restated Share Option Plan (incorporated by reference from Exhibit 10.3 to Current Report on Form 8-K filed on October 14, 2009). | |
10.28*
|
Amended and Restated Restricted Share Unit Plan (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on October 14, 2009). | |
10.29*
|
Form of Restricted Share Unit Agreement under the Amended and Restated Restricted Share Unit Plan (incorporated by reference from Exhibit 10 to Current Report on Form 8-K filed on June 15, 2009). | |
10.30
|
Common Stock Purchase Agreement by and among Biomira Inc., Biomira International Inc. and Merck KGaA dated May 2, 2001 (incorporated by reference from Exhibit 10.41 to Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed on May 6, 2010). | |
10.31
|
Tax Indemnity Agreement by and between Biomira International Inc. and Merck KGaA dated May 3, 2001 (incorporated by reference from Exhibit 10.42 to Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed on May 6, 2010). | |
10.32
|
Common Stock Purchase Agreement, dated July 6, 2010 between Oncothyreon Inc. and Small Cap Biotech Value, Ltd (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on July 7, 2010). | |
10.33
|
Engagement Letter, dated as of July 6, 2010 between Oncothyreon Inc. and Reedland Capital Partners, an Institutional Division of Financial West Group (incorporated by reference from Exhibit 10.2 to Current Report on Form 8-K filed on July 7, 2010). | |
10.34*
|
2010 Employee Stock Purchase Plan (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on June 8, 2010). | |
10.35*
|
Form of Subscription Agreement and Notice of Withdrawal under the 2010 Employee Stock Purchase Plan (incorporated by reference from Exhibit 10.2 to Current Report on Form 8-K filed on June 8, 2010). | |
10.36*
|
Offer letter with Julia M. Eastland, dated August 17, 2010 (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on August 31, 2010). | |
10.37
|
Securities Purchase Agreement, dated September 23, 2010, by and among Oncothyreon Inc. and the signatories thereto (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K, filed on September 27, 2010). | |
10.37(a)
|
Amendment No. 1 to the Securities Purchase Agreement, dated September 28, 2010 (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on September 30, 2010). | |
10.38
|
Form of Warrant issued pursuant to the terms of the Securities Purchase Agreement, dated September | |
II-7
Table of Contents
Exhibit | ||
Number | Description | |
23, 2010, by and among Oncothyreon Inc. and the signatories thereto, as amended (incorporated by reference from Exhibit 10.49 to Registration Statement on Form S-1 filed on October 4, 2010). | ||
10.39
|
Loan and Security Agreement between Oncothyreon Inc. and General Electric Capital Corporation dated February 8, 2011 (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on February 9, 2011). | |
10.40
|
Promissory Note issued by Oncothyreon Inc. to General Electric Capital Corporation dated February 8, 2011 (incorporated by reference from Exhibit 10.2 to Current Report on Form 8-K filed on February 9, 2011). | |
10.41
|
Form of Warrant to Purchase Common Stock issued by Oncothyreon Inc. to the Lenders pursuant to the terms of the Loan and Security Agreement (incorporated by reference from Exhibit 10.3 to Current Report on Form 8-K filed on February 9, 2011). | |
16.1
|
Letter to Securities and Exchange Commission from Deloitte & Touche LLP, dated November 19, 2010 (incorporated by reference from Exhibit 16.1 to Current Report on Form 8-K/A filed November 19, 2010). | |
21.1
|
Subsidiaries of Oncothyreon Inc. (incorporated by reference from Exhibit 21.1 to Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed on March 14, 2011). | |
23.1
|
Consent of Deloitte & Touche LLP, independent registered public accounting firm. | |
23.2
|
Consent of Ernst & Young LLP, independent registered public accounting firm. | |
23.3**
|
Consent of Wilson Sonsini Goodrich & Rosati, PC (included in Exhibit 5.1). | |
24.1
|
Power of Attorney (included on signature page). | |
* | Executive Compensation Plan or Agreement. | |
** | Previously filed. | |
| Confidential treatment has been granted for portions of this exhibit. |
(b) Financial Statement Schedules.
No financial statement schedules are provided because they are inapplicable or the requested
information is shown in the consolidated financial statements of the registrant or related notes
thereto included in the registrants Annual Report on Form 10-K filed with the SEC on March 14, 2011.
Item 17. 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% change in the maximum aggregate offering
price set forth in the Calculation of Registration Fee table in the effective registration
statement; and
II-8
Table of Contents
(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.
(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.
(b) 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 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.
(c) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
II-9
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused
this Registration Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Seattle, County of King, State of
Washington, on March 14, 2011.
ONCOTHYREON INC. |
||||
By: | /s/ ROBERT L. KIRKMAN | |||
Robert L. Kirkman | ||||
President, CEO and Director | ||||
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates indicated:
Signature | Title | Date | ||
/s/ Robert L. Kirkman
|
President, Chief Executive Officer and Director (Principal Executive Officer) |
March 14, 2011 | ||
/s/ Julia M. Eastland
|
Chief Financial Officer (Principal Financial and Accounting Officer) |
March 14, 2011 | ||
*
|
Chairman and Director | March 14, 2011 | ||
*
|
Director | March 14, 2011 | ||
*
|
Director | March 14, 2011 | ||
*
|
Director | March 14, 2011 | ||
*
|
Director | March 14, 2011 | ||
*By: | /s/ Julia M. Eastland | |||
Julia M. Eastland | ||||
Attorney-in-fact | ||||
II-10
Table of Contents
EXHIBIT INDEX
Exhibit | ||
Number | Description | |
2.1(a)
|
Agreement and Plan of Reorganization among ProlX Pharmaceuticals Corporation, D. Lynn Kirkpatrick, Garth Powis and Biomira Inc., dated October 30, 2006 (incorporated by reference from Exhibit 2.1 to Registration Statement on Form S-4/A filed on October 29, 2007). | |
2.1(b)
|
Amendment No. 1 to Agreement and Plan of Reorganization dated November 7, 2007 (incorporated by reference from Exhibit 2.1(b) to Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed on May 6, 2010). | |
3.1
|
Amended and Restated Certificate of Incorporation of Oncothyreon Inc. (incorporated by reference from Exhibit 3.1 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
3.2
|
Bylaws of Oncothyreon Inc. (incorporated by reference from Exhibit 3.1 to Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009 filed on August 14, 2009). | |
4.1
|
Form of registrants common stock certificate. (incorporated by reference from Exhibit 4.1 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
4.2
|
Registration Rights Agreement, dated July 6, 2010 between Oncothyreon Inc. and Small Cap Biotech Value, Ltd (incorporated by reference from Exhibit 4.1 to Current Report on Form 8-K filed on July 7, 2010). | |
4.3
|
Registration Rights Agreement, dated September 28, 2010 by and among Oncothyreon Inc. and the signatories thereto (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K, filed on September 27, 2010). | |
5.1**
|
Opinion of Wilson Sonsini Goodrich & Rosati, PC. | |
10.1*
|
Form of Indemnification Agreement (incorporated by reference from Exhibit 10.1 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
10.2
|
License Agreement between Biomira Inc. and the Dana-Farber Cancer Institute, Inc., dated November 22, 1996 (incorporated by reference from Exhibit 10.6 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.3
|
Amended and Restated License Agreement between Imperial Cancer Research Technology Limited and Biomira Inc., dated November 14, 2000 (incorporated by reference from Exhibit 10.11 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
10.4
|
Consent and Acknowledgement among Biomira Inc., Biomira International Inc., Biomira Europe B.V., Imperial Cancer Research Technology Limited and Merck KGaA, dated February 5, 2002 (incorporated by reference from Exhibit 10.13 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.5
|
License Agreement between the Governors of the University of Alberta and Biomira Inc., dated December 1, 2001 (incorporated by reference from Exhibit 10.14 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
10.6
|
Letter Agreement between Biomira Inc. and Cancer Research Technology Limited (formerly Imperial Cancer Research Technology Limited), dated March 9, 2004 (incorporated by reference from Exhibit 10.16 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
10.7
|
Exclusive License Agreement between the University of Arizona and ProlX Pharmaceuticals Corporation, dated July 29, 2004 (incorporated by reference from Exhibit 10.18 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.7(a)
|
First Amendment to Exclusive License Agreement between University of Arizona and Oncothyreon Inc., dated September 27, 2010 (incorporated by reference from Exhibit 10.7(a) to Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed on March 14, 2011). | |
10.8
|
Adjuvant License Agreement between Biomira International Inc. and Corixa Corporation, dated October 20, 2004 (incorporated by reference from Exhibit 10.19 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
10.9
|
Adjuvant Supply Agreement between Biomira International Inc. and Corixa Corporation, dated October 20, 2004 (incorporated by reference from Exhibit 10.20 to Registration Statement on Form S-4/A filed on September 27, 2007). | |
10.10
|
Exclusive Patent License Agreement between the University of Arizona and ProlX Pharmaceuticals | |
Table of Contents
Exhibit | ||
Number | Description | |
Corporation, dated September 15, 2005 (incorporated by reference from Exhibit 10.21 to Registration Statement on Form S-4 filed on September 12, 2007). | ||
10.10(a)
|
First Amendment to Exclusive Patent License Agreement between the University of Arizona and Oncothyreon Inc., dated November 28, 2008 (incorporated by reference from Exhibit 10.10(a) to Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed on March 14, 2011). | |
10.10(b)
|
Second Amendment to Exclusive Patent License Agreement between the University of Arizona and Oncothyreon Inc., dated August 13, 2010 (incorporated by reference from Exhibit 10.10(b) to Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed on March 14, 2011). | |
10.11*
|
Offer letter with Robert Kirkman, dated August 29, 2006 (incorporated by reference from Exhibit 10.27 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.11(a)*
|
Amendment to Robert Kirkman Offer Letter dated December 31, 2008 (incorporated by reference from Exhibit 10.18(a) to Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed on March 30, 2009). | |
10.11(b)*
|
Amendment to Robert Kirkman Offer Letter dated December 3, 2009 (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on December 7, 2009). | |
10.12
|
Letter Agreement between the University of Arizona and Biomira Inc., dated October 6, 2006 (incorporated by reference from Exhibit 10.28 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.13
|
Security Agreement between Jeffrey Millard and Biomira Inc., dated November 8, 2006 (incorporated by reference from Exhibit 10.43 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.14
|
General Security Agreement between Jeffrey Millard and Biomira Inc., dated November 8, 2006 (incorporated by reference from Exhibit 10.44 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.15
|
Promissory Note between Jeffrey Millard and Biomira Inc., dated November 8, 2006 (incorporated by reference from Exhibit 10.49 to Registration Statement on Form S-4 filed on September 12, 2007). | |
10.15(a)
|
Note Amendment Agreement by and between Oncothyreon Inc. and Jeffrey Millard, dated April 20, 2008 (incorporated by reference from Exhibit 10.36(a) to Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed on March 30, 2009). | |
10.16*
|
Offer Letter with Gary Christianson, dated June 29, 2007 (incorporated by reference from Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008 filed on November 10, 2008). | |
10.16(a)*
|
Amendment to Gary Christianson Offer Letter dated December 31, 2008 (incorporated by reference from Exhibit 10.40(a) to Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed on March 30, 2009). | |
10.16(b)*
|
Amendment to Gary Christianson Offer Letter dated December 3, 2009 (incorporated by reference from Exhibit 10.2 to Current Report on Form 8-K filed on December 7, 2009). | |
10.17
|
Sublease Agreement between Muze Inc. and Oncothyreon Inc., dated May 9, 2008 (incorporated by reference from Exhibit 10.2 to Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008 filed on November 10, 2008). | |
10.18
|
Lease Agreement between Selig Holdings Company and Oncothyreon Inc., dated May 9, 2008 (incorporated by reference from Exhibit 10.3 to Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008 filed on November 10, 2008). | |
10.19
|
Amendment Number 1 to Adjuvant License Agreement and Adjuvant Supply Agreement between Corixa Corporation, d/b/a GlaxoSmithKline Biologicals N.A. and Biomira Management Inc., dated August 8, 2008 (incorporated by reference from Exhibit 10.4 to Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008 filed on November 10, 2008). | |
10.20
|
Amended and Restated License Agreement between Biomira Management, Inc. and Merck KGaA, dated December 18, 2008 (incorporated by reference from Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009 filed on May 15, 2009). | |
10.21*
|
Offer Letter dated March 24, 2008 between Oncothyreon Inc. and Shashi Karan (incorporated by reference from Exhibit 99.1 to Current Report on Form 8-K filed on March 11, 2009). | |
10.21(a)*
|
Amendment to Shashi Karan Offer Letter dated December 3, 2009 (incorporated by reference from | |
Table of Contents
Exhibit | ||
Number | Description | |
Exhibit 10.5 to Current Report on Form 8-K filed on December 7, 2009). | ||
10.22
|
Form of Warrant (incorporated by reference from Annex A to the Companys free writing prospectus, dated as of May 19, 2009, and filed on May 20, 2009). | |
10.23*
|
Offer Letter dated June 9, 2009 between Oncothyreon Inc. and Scott Peterson, Ph.D. (incorporated by reference from Exhibit 10.2 to Current Report on Form 8-K filed on June 15, 2009). | |
10.23(a)*
|
Amendment to Scott Peterson Offer Letter dated December 3, 2009 (incorporated by reference from Exhibit 10.4 to Current Report on Form 8-K filed on December 7, 2009). | |
10.24*
|
Offer Letter dated July 6, 2009 between Oncothyreon Inc. and Diana Hausman, M.D. (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on August 4, 2009). | |
10.24(a)*
|
Amendment to Diana Hausman Offer Letter dated December 3, 2009 (incorporated by reference from Exhibit 10.3 to Current Report on Form 8-K filed on December 7, 2009). | |
10.25
|
Form of Warrant (incorporated by reference from Annex A to the Companys free writing prospectus, dated as of August 4, 2009, and filed on August 5, 2009). | |
10.26*
|
Amended and Restated Share Option Plan (incorporated by reference from Exhibit 10.2 to Current Report on Form 8-K filed on October 14, 2009). | |
10.27*
|
Form of Stock Option Agreement under the Amended and Restated Share Option Plan (incorporated by reference from Exhibit 10.3 to Current Report on Form 8-K filed on October 14, 2009). | |
10.28*
|
Amended and Restated Restricted Share Unit Plan (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on October 14, 2009). | |
10.29*
|
Form of Restricted Share Unit Agreement under the Amended and Restated Restricted Share Unit Plan (incorporated by reference from Exhibit 10 to Current Report on Form 8-K filed on June 15, 2009). | |
10.30
|
Common Stock Purchase Agreement by and among Biomira Inc., Biomira International Inc. and Merck KGaA dated May 2, 2001 (incorporated by reference from Exhibit 10.41 to Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed on May 6, 2010). | |
10.31
|
Tax Indemnity Agreement by and between Biomira International Inc. and Merck KGaA dated May 3, 2001 (incorporated by reference from Exhibit 10.42 to Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed on May 6, 2010). | |
10.32
|
Common Stock Purchase Agreement, dated July 6, 2010 between Oncothyreon Inc. and Small Cap Biotech Value, Ltd (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on July 7, 2010). | |
10.33
|
Engagement Letter, dated as of July 6, 2010 between Oncothyreon Inc. and Reedland Capital Partners, an Institutional Division of Financial West Group (incorporated by reference from Exhibit 10.2 to Current Report on Form 8-K filed on July 7, 2010). | |
10.34*
|
2010 Employee Stock Purchase Plan (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on June 8, 2010). | |
10.35*
|
Form of Subscription Agreement and Notice of Withdrawal under the 2010 Employee Stock Purchase Plan (incorporated by reference from Exhibit 10.2 to Current Report on Form 8-K filed on June 8, 2010). | |
10.36*
|
Offer letter with Julia M. Eastland, dated August 17, 2010 (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on August 31, 2010). | |
10.37
|
Securities Purchase Agreement, dated September 23, 2010, by and among Oncothyreon Inc. and the signatories thereto (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K, filed on September 27, 2010). | |
10.37(a)
|
Amendment No. 1 to the Securities Purchase Agreement, dated September 28, 2010 (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on September 30, 2010). | |
10.38
|
Form of Warrant issued pursuant to the terms of the Securities Purchase Agreement, dated September 23, 2010, by and among Oncothyreon Inc. and the signatories thereto, as amended (incorporated by reference from Exhibit 10.49 to Registration Statement on Form S-1 filed on October 4, 2010). | |
10.39
|
Loan and Security Agreement between Oncothyreon Inc. and General Electric Capital Corporation dated February 8, 2011 (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K filed on February 9, 2011). | |
10.40
|
Promissory Note issued by Oncothyreon Inc. to General Electric Capital Corporation dated February 8, | |
Table of Contents
Exhibit | ||
Number | Description | |
2011 (incorporated by reference from Exhibit 10.2 to Current Report on Form 8-K filed on February 9, 2011). | ||
10.41
|
Form of Warrant to Purchase Common Stock issued by Oncothyreon Inc. to the Lenders pursuant to the terms of the Loan and Security Agreement (incorporated by reference from Exhibit 10.3 to Current Report on Form 8-K filed on February 9, 2011). | |
16.1
|
Letter to Securities and Exchange Commission from Deloitte & Touche LLP, dated November 19, 2010 (incorporated by reference from Exhibit 16.1 to Current Report on Form 8-K/A filed November 19, 2010). | |
21.1
|
Subsidiaries of Oncothyreon Inc. (incorporated by reference from Exhibit 21.1 to Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed on March 14, 2011). | |
23.1
|
Consent of Deloitte & Touche LLP, independent registered public accounting firm. | |
23.2
|
Consent of Ernst & Young LLP, independent registered public accounting firm. | |
23.3**
|
Consent of Wilson Sonsini Goodrich & Rosati, PC (included in Exhibit 5.1). | |
24.1
|
Power of Attorney (included on signature page). | |
* | Executive Compensation Plan or Agreement. | |
** | Previously filed. | |
| Confidential treatment has been granted for portions of this exhibit. |