Filed pursuant to Rule 424(b)(3)
Registration No. 333-223349
PROSPECTUS SUPPLEMENT
(to
Prospectus dated March 21,
2018)
1,202,500 Shares
Common Stock
This
prospectus relates solely to the offer and sale from time to time
of up to an aggregate of 1,202,500 shares of our common stock by
the selling stockholders identified in this prospectus or a
supplement hereto. Certain of these shares consist of shares of our
common stock that are issuable to the selling stockholders pursuant
to certain 10% Senior Convertible Debentures that are convertible
into shares of our common stock, which debentures we issued to the
selling stockholders in one or more private
placements.
This
prospectus describes the general manner in which the shares of
common stock may be offered and sold by the selling stockholders.
If necessary, the specific manner in which shares of common stock
may be offered and sold will be described in a supplement to this
prospectus.
We are
not offering any shares of common stock for sale under this
prospectus, and we will not receive any of the proceeds from the
sale or other disposition of the shares of common stock offered
hereby.
Our
common stock is listed on the OTCQB under the symbol
“GTBP.” On September 19, 2018, the last reported sale
price for our common stock on OTCQB was $2.00 per
share.
______________________________
Investing in our common stock involves risks. You should carefully
consider the risks described under “Risk Factors” in
Item 1A of our most recent Annual Report on Form 10-K (which is
incorporated by reference herein), as well as the other information
contained or incorporated by reference in this prospectus or in any
prospectus supplement hereto before making a decision to invest in
our common stock. See “Where You Can Find More
Information” below.
The
Securities and Exchange Commission and state securities regulators
have not approved or disapproved of these securities or determined
if this prospectus supplement or the accompanying prospectus is
truthful or complete. It is illegal for any person to tell you
otherwise.
______________________________
The date of this prospectus supplement is September 21,
2018.
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
SUPPLEMENT
This prospectus supplement is a supplement to the accompanying
prospectus that is also a part of this document. This prospectus
supplement and the accompanying prospectus are part of a
registration statement on Form S-3 (File No. 333-223349) that
we filed with the Securities and Exchange Commission, or the SEC,
using a “shelf” registration process. Under this
“shelf” registration process, we, or selling security
holders, may from time to time sell any combination of securities
described in the accompanying prospectus in one or more offerings
up to a total of $125.0 million.
This prospectus supplement and the accompanying prospectus do not
constitute an offer to sell or a solicitation of an offer to buy
the shares offered hereby in any jurisdiction where, or to any
person to whom, it is unlawful to make such offer or
solicitation.
This document is in two parts. The first part is this prospectus
supplement, which describes the terms of the offering of common
stock and also adds to and updates information contained in the
accompanying prospectus and the documents incorporated by reference
into the accompanying prospectus. The second part is the
accompanying prospectus, which provides more general information,
some of which may not apply to the common stock. To the extent
there is a conflict between the information contained in this
prospectus supplement, on the one hand, and the information
contained in the accompanying prospectus or any document
incorporated by reference therein, on the other hand, you should
rely on the information in this prospectus supplement.
You should rely only on the information contained in or
incorporated by reference into this prospectus supplement and the
accompanying prospectus or any free writing prospectus. We have not
authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent
information, you should not rely on it. The information contained
in or incorporated by reference into this prospectus supplement and
the accompanying prospectus is current as of the date such
information is presented, regardless of the time of delivery of
this prospectus supplement or of any sale of the shares. Our
business, financial condition, results of operations and prospects
may have changed since those dates. It is important for you to read
and consider all information contained in this prospectus
supplement and the accompanying prospectus, including the documents
incorporated by reference herein and therein, in making your
investment decision. You should also read and consider the
information in the documents we have referred you to in the
sections titled “Where You Can Find More Information”
and “Incorporation of Certain Information By Reference”
below.
This prospectus supplement and the information incorporated herein
by reference include trademarks, services marks and trade names
owned by us or other companies. All trademarks, service marks and
trade names included or incorporated by reference into this
prospectus supplement or any related free writing prospectuses are
the property of their respective owners.
Unless the context otherwise requires, the terms “we,”
“our,” “us,” “our company,” and
“GTBP” refer to GT Biopharma, Inc. and its
subsidiaries.
This summary highlights selected information contained elsewhere or
incorporated by reference in this prospectus supplement or the
accompanying prospectus. Because it is a summary, it does not
contain all of the information that you should consider before
investing in the shares. You should read this entire prospectus
supplement and the accompanying prospectus carefully, including
“Risk Factors,” and the financial statements and other
information incorporated by reference in this prospectus supplement
and the accompanying prospectus.
GT Biopharma, Inc.
Overview
We are a clinical stage biopharmaceutical company
predominantly focused on the development and commercialization of
immuno-oncology products based off our proprietary Tri-specific
Killer Engager (TriKE), Tetra-specific Killer Engager (TetraKE) and
bi-specific Antibody Drug Conjugate (ADC) technology platforms. Our
TriKE and TetraKE platforms generate proprietary moieties designed
to harness and enhance the cancer killing abilities of a
patient’s own natural killer, or NK, cells. Once bound to a
NK cell, our moieties are designed to enhance the NK cell and
precisely direct it to one or more specifically-targeted proteins
(tumor antigens) expressed on a specific type of cancer, ultimately
resulting in the cancer cell’s death. TriKEs and TetraKEs are
made up of recombinant fusion proteins, can be designed to target
certain tumor antigens on hematologic malignancies, sarcomas or
solid tumors and do not require patient-specific customization.
They are designed to be dosed in a common outpatient setting
similar to modern antibody therapeutics and are expected to have
reasonably low cost of goods. Our ADC platform can generate product
candidates that are bi-specific, ligand-directed single-chain
fusion proteins that, we believe, represent the next generation of
ADCs.
Our
most advanced bi-specific ADC, which targets CD19+ and/or CD22+
hematological malignancies, is in the Phase 2 component of a Phase
1/2 Non-Hodgins Lymphoma (NHL)/Acute Lymphocytic Leukemia (ALL)
trial which is an open-label, investigator-led study. We expect to
be in a position to begin a First-in-Class, Phase 1 trial in CD33+
hematologic malignancies for our most advanced TriKE product
candidate in the second half of 2018. We are initially targeting
certain hematologic malignancies as we believe our product
candidates may have certain advantages over existing and other
in-development products. We are also focused on developing TetraKE
product candidates designed to target the larger solid tumor
population and are working towards beginning clinical trials in
2019.
Our
TriKE product candidates are single-chain, tri-specific scFv
recombinant fusion proteins composed of the variable regions of the
heavy and light chains (or heavy chain only) of anti-CD16
antibodies, wild-type or a modified form of IL-15 and the variable
regions of the heavy and light chains of an antibody designed to
precisely target a specific tumor antigen. We utilize the NK
stimulating cytokine human IL-15 as a crosslinker between the two
scFvs which is designed to provide a self-sustaining signal leading
to the proliferation and activation of NK cells thus enhancing
their ability to kill cancer cells mediated by antibody-dependent
cell-mediated cytotoxicity (ADCC). Our second TriKE product
candidate, OXS-C3550, is a next-generation version of OXS-3550
containing a modified CD16 component.
Our
TetraKE product candidates are single-chain fusion proteins
composed of human single-domain anti-CD16 antibody, wild-type IL-15
and the variable regions of the heavy and light chains of two
antibodies that are designed to target two specific tumor antigens
expressed on specific types of cancer cells. An example of a
TetraKE product candidate is OXS-1615, which is designed to target
EpCAM and CD133 positive solid tumors. EpCAM is found on many solid
tumor cells of epithelial origin and CD133 is a marker for cancer
stem cells. OXS-1615 is designed to enable a patient’s NK
cells to kill not only the heterogeneous population of cancer cells
found in many solid tumors but also kill the cancer stem cells that
can be responsible for recurrences.
Our
TriKEs and TetraKEs are designed to act by binding to a
patient’s NK cells and a specific tumor antigen enabling an
immune synapse between the now IL-15-enhanced NK cell and the
targeted cancer cell. The formation of an immune synapse can induce
NK cell activation which can lead to the death of the cancer cell.
We believe the self-sustaining signal caused by our IL-15
cross-linker may enable prolonged and enhanced proliferation and
activation of NK cells similar to the increased proliferation of
T-cells caused by 41BB-L or CD28 intracellular domains in CAR-T
therapy but without the need to enhance the patient’s NK
cells ex vivo.
We are
using our TriKE and TetraKE platforms with the intent to bring to
market immuno-oncology products that can treat a range of
hematologic malignancies, sarcoma and solid tumors. The platforms
are scalable and we are putting processes in place to be able to
produce IND-ready moieties in a timely manner after a specific
TriKE or TetraKE conceptual design. After conducting market and
competitive research, specific moieties can then be advanced into
the clinic on our own or through potential collaborations with
larger companies. We are also evaluating, in conjunction with our
Scientific Advisory Board, additional moieties designed to target
different tumor antigens. We believe our TriKEs and TetraKEs may
have the ability, if approved for marketing, to be used on a
stand-alone basis, augment the current monoclonal antibody
therapeutics, be used in conjunction with more traditional cancer
therapy and potentially overcome certain limitations of current
chimeric antigen receptor, or CAR-T, therapy.
OXS-3550
is our first TriKE product candidate. The OXS-3550 IND will focus
on AML, the most common form of adult leukemia with 21,000 new
cases expected in 2018 alone (American Cancer Society). These
patients typically receive frontline therapy, usually chemotherapy,
including cytarabine and an anthracycline, a therapy that has not
changed in over 40 years. About half will have relapses and require
alternative therapies. In addition, MDS incidence rates have
dramatically increased in the population of the United States from
3.3 per 100,000 individuals from 2001-2004 to 70 per 100,000
annually, MDS is especially prevalent in elderly patients that have
a median age of 76 years at diagnosis. The survival of patients
with MDS is poor due to decreased eligibility, as a result of
advanced age, for allogeneic hematopoietic cell transplantation
(Allo-HSCT), the only curative MDS treatment (Cogle CR. Incidence
and Burden of the Myelodysplastic Syndromes. Curr Hematol Malig Rep. 2015;
10(3):272-281). We believe that OXS-3550 could serve as a
relatively safe, cost-effective, and easy-to-use therapy for
resistant/relapsing AML and MDS and could also be combined with
chemotherapy as frontline therapy thus targeting the larger patient
population.
The IND
for OXS-3550 was filed in June 2017 by the University of Minnesota.
FDA requested that additional preclinical toxicology be conducted
prior to initiating clinical trials. The FDA also requested some
additional information and clarifications on the manufacturing
(CMC) and clinical packages. The requested additional information
and clarifications have been completed and are being incorporated
by us into the IND in eCTD format. We filed the IND amendment in
June 2018 and expect to be in a position to begin a Phase 1
clinical trial in the second half of 2018.
We also
believe our bi-specific, ligand-directed single-chain fusion
proteins are examples of the next generation of ADCs. We believe
OXS-1550 has certain properties that could result in competitive
advantages over recently approved ADC products targeting leukemias
and lymphomas and/or have utility other niche populations. In a
Phase 1 trial, of nine patients that achieved adequate blood
levels, in two heavily pretreated patients a continuous partial
remission (PR) and complete remission (CR) were observed. One
patient, who had failed multiple previous treatment regimens, has
been in remission since early 2015.
OXS-1550
is being evaluated in a Phase 2 component of an investigator-led
Phase 1/2 clinical trial in relapsed/refractory NHL/ALL patients.
We recently assembled a Bi-Specific ADC Advisory Board to work with
us to assess and interpret the OXS-1550 pre-clinical and clinical
data, including an interim review of the Phase 1/2 study. Eighteen
patients have been enrolled to date, including 12 NHL and six ALL
patients. At the time of the interim review, 13 patients met the
evaluation criteria, including nine NHL and four ALL patients. More
than 50% of patients (seven of 13) exhibited a clinical benefit,
defined as stable disease, partial remission or complete remission
at Day 29. Of the seven patients, one demonstrated a complete
remission (CR), one demonstrated a partial remission (PR) and five
demonstrated stable disease (SD).
The
efficacy signal was more prominent in ALL patients with 75% (three
of four) exhibiting clinical benefit including one CR, one PR and
one SD. In the NHL population, four of nine patients exhibited SD.
Adverse events were mostly grade 1 and 2 and reversible. One
patient had a grade 4 low platelet count, two patients had a grade
3 increase in liver function tests, or LFTs, and one patient had a
grade 3 capillary leak.
The
Company currently expects final data for this trial to be available
in the fourth quarter of 2018 or the first quarter of
2019.
Our
initial and ongoing work is being conducted in collaboration with
the Masonic Cancer Center at the University of Minnesota under
research agreements led by Dr. Jeffrey Miller, the Deputy Director
and Dr. Daniel Vallera, Director, Section of Molecular Cancer
Therapeutics. Through these research agreements we have access to a
range of capabilities and resources such as construct design and
functional testing, early single-chain fusion protein GMP
production, scientific and clinical expertise and experience
including early phase human testing. Dr. Miller is a recognized
leader in the field of NK cell and IL-15 biology and their
therapeutic potential. We have exclusive rights to the TriKE and
TetraKE platforms and are generating additional intellectual
property around specific moieties.
We also
have a CNS portfolio of three product candidates consisting of what
we believe are innovative reformulations and/or repurposing of
existing therapies. We believe these therapeutic agents may address
certain unmet medical needs that can lead to improved efficacy
while addressing tolerability and safety issues that may have
limited the usefulness of the original approved drug. Our CNS drug
candidates may address disease states such as chronic neuropathic
pain, myasthenia gravis and motion sickness.
In
January 2018, we completed a study in healthy volunteers for
GTP-004, our product candidate for the treatment for the symptoms
of myasthenia gravis. We also announced the initiation of an
investigator led study in healthy volunteers for GTP-011, for the
prevention of motion sickness, with data expected in the second
half of 2018. We expect to take advantage of our CNS portfolio by
generating what we believe to be proof-of-concept data and/or
achieving other milestones, making what we believe are cost
effective go/no-go decisions, and pursuing strategic transactions
with commercialization-oriented pharmaceutical
companies.
Our Offices
Our principal executive offices are located at 100 South Ashley
Drive, Suite 600, Tampa, Florida 33602, and our telephone number is
(800) 3049888.
Our Website
Our website is located at www.gtbiopharma.com. Information
contained on or accessible through our website is not, and should
not be considered, part of, or incorporated by reference into, this
prospectus.
Investing in our securities involves a high degree of risk. Before
deciding whether to invest in our securities, you should consider
carefully the risks and uncertainties discussed under the sections
titled “Risk Factors” contained in our most recent
Annual Report on Form 10-K and Quarterly Report on Form 10-Q, as
well as any amendments thereto reflected in subsequent filings with
the SEC, which are incorporated by reference into this prospectus
in their entirety, together with other information in this
prospectus, the documents incorporated by reference and any free
writing prospectus that we may authorize for use in connection with
a specific offering. The risks described in these documents are not
the only ones we face, but those that we consider to be material.
There may be other unknown or unpredictable economic, business,
competitive, regulatory or other factors that could have material
adverse effects on our future results. Past financial performance
may not be a reliable indicator of future performance, and
historical trends should not be used to anticipate results or
trends in future periods. If any of these risks actually occurs,
our business, financial condition, results of operations or cash
flow could be seriously harmed. This could cause the trading price
of our securities to decline, resulting in a loss of all or part of
your investment. Please also read carefully “Forward-Looking
Statements” below.
FORWARD-LOOKING
STATEMENTS
This prospectus supplement and the documents incorporated herein by
reference contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, or Securities Act,
and Section 21E of the Securities Exchange Act of 1934, or
Exchange Act. These statements involve known and unknown risks,
uncertainties and other important factors that may cause our actual
results, performance or achievements to be materially different
from any future results, performances or achievements expressed or
implied by the forward-looking statements. These forward-looking
statements include, but are not limited to, those concerning the
following:
●
Our
business is at an early stage of development, and we may not
develop therapeutic products that can be
commercialized.
●
We
have a history of operating losses and we expect to continue to
incur losses for the foreseeable future and we may never generate
revenue or achieve profitability.
●
We
will need additional capital to conduct our operations and develop
our products and our ability to obtain the necessary funding is
uncertain.
●
We
have identified material weaknesses in our internal control over
financial reporting, which may negatively impact our ability to
accurately report our financial results or prevent fraud. As a
result, stockholders could lose confidence in our financials and
other public reporting, which would harm our business and the
trading price of our common stock.
●
If
our efforts to protect the proprietary nature of the intellectual
property related to our technologies are not adequate, we may not
be able to compete effectively in our market and our business would
be harmed.
●
We
depend on key personnel for our continued operations and future
success, and a loss of certain key personnel could significantly
hinder our ability to move forward with our business
plan.
●
Clinical
drug development is costly, time-consuming and uncertain, and we
may suffer setbacks in our clinical development program that could
harm our business.
●
We
have limited clinical testing and regulatory capabilities, and
human clinical trials are subject to extensive regulatory
requirements, very expensive, time-consuming and difficult to
design and implement. Our products may fail to achieve necessary
safety and efficacy endpoints during clinical trials, which may
limit our ability to generate revenues from therapeutic
products.
●
Our
business is based on novel technologies that are inherently
expensive and risky and may not be understood by or accepted in the
marketplace, which could adversely affect our future
value.
In some cases, you can identify forward-looking statements by terms
such as “anticipates,” “believes,”
“could,” “estimates,”
“expects,” “intends,” “may,”
“plans,” “potential,”
“predicts,” “projects,”
“should,” “will” and “would” as
well as similar expressions. Forward-looking statements reflect our
current views with respect to future events, are based on
assumptions and are subject to risks, uncertainties and other
important factors. We discuss many of these risks, uncertainties
and other important factors in greater detail in the sections
titled “Risk Factors” in our most recent annual report
on Form 10-K and in our most recent quarterly report on
Form 10-Q, as well as any amendments thereto reflected in
subsequent filings with the SEC. Given these risks, uncertainties
and other important factors, you should not place undue reliance on
these forward-looking statements. Also, these forward-looking
statements represent our estimates and assumptions only as of the
date such forward-looking statements are made. Except as required
by law, we assume no obligation to update any forward-looking
statements publicly, or to reflect facts and circumstances after
the date of this prospectus supplement. Before deciding to purchase
our securities, you should carefully read both this prospectus
supplement, the accompanying prospectus and any related free
writing prospectus, together with the information incorporated
herein by reference as described in “Incorporation of Certain
Information by Reference,” completely and with the
understanding that our actual future results may be materially
different from what we expect.
We will not receive any proceeds from the sale of shares of common
stock by the selling stockholders.
September 2018 Private Placement Financing
On September 7, 2018, we entered into a Securities Purchase
Agreement, or the September 2018 Purchase Agreement, with
institutional and other accredited investors relating to a private
placement of 10% Senior Convertible Debentures, or the September
2018 Debentures, which are convertible into shares of our common
stock. The investors purchased an aggregate principal amount of
$2,050,000 of September 2018 Debentures in cash or through the
cancellation of existing indebtedness. The September 2018
Debentures are convertible into shares of our common stock at any
time at the election of the holder before September 7, 2019, and
will convert into shares of our common stock automatically on
September 7, 2019, to the extent not converted before then. The
conversion price of the September 2018 Debentures is $2.00 per
share (subject to adjustments). Each of the investors in the
private placement is a selling stockholder. For purposes of the
table below, beneficial ownership is based on the securities held
of record by the selling stockholders as of May 11,
2018.
The 2018 Purchase Agreement contained a registration rights
covenant pursuant to which we agreed to file this prospectus
supplement to register for resale by the investors the shares of
common stock issuable upon conversion of the 2018 Debentures
purchased by the investors pursuant to the 2018 Purchase
Agreement.
Settlement Agreement
On
September 8, 2018, we entered into a Confidential Settlement
Agreement and Release, or the Settlement Agreement, with Multicell
Immunotherapeutics, Inc., or Multicell, to settle a breach of
contract lawsuit. As part of the Settlement Agreement, we agreed to
issue to Multicell 75,000 shares of Common Stock at an agreed value
of $2.00 per share. Multicell is a selling stockholder. For
purposes of the table below, beneficial ownership is based on the
securities held of record by the selling stockholders as of May 11,
2018.
Selling Stockholder Table
The following table sets forth for each selling stockholder, the
name, the number and percentage of shares of common stock
beneficially owned as of May 11, 2018, the maximum number of shares
of common stock that may be offered pursuant to this prospectus and
the number and percentage of shares of common stock that would be
beneficially owned after the sale of the maximum number of shares
of common stock, and is based upon information provided to us by
each selling stockholder for use in this prospectus. The
information presented in the table is based on 50,117,978 shares of
our common stock outstanding on May 11, 2018.
Beneficial ownership is determined in accordance with the rules of
the SEC and generally includes voting or investment power with
respect to securities. Unless otherwise indicated below, to our
knowledge, the persons and entities named in the table have sole
voting and investment power with respect to all shares beneficially
owned, subject to community property laws where applicable. For
purposes of the table below, shares of common stock issuable
pursuant to options and restricted stock held by a selling
stockholder that can be acquired within 60 days of May 11, 2018,
are deemed to be outstanding and to be beneficially owned by the
selling stockholder holding the securities but are not treated as
outstanding for the purpose of computing the percentage ownership
of any other selling stockholder.
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Shares
Beneficially Owned
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Shares
Beneficially Owned After the Sale of the Maximum Number of Shares
(9)
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Name of Selling
Stockholder
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Maximum Number
of Shares to Be Sold Hereunder
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Significant
Stockholders:
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None
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Other
Selling Stockholders:
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The Rosalinde and
Arthur Gilbert Foundation (1)
|
412,500
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*
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412,500
|
-
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0.0%
|
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Robert H. Lipp
Separate Property Trust (2)
|
13,750
|
*
|
13,750
|
-
|
0.0%
|
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The RSZ Trust
(3)
|
137,500
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*
|
137,500
|
-
|
0.0%
|
|
Martin H. Blank and
Linda M. Blank Rev Trust (4)
|
13,750
|
*
|
13,750
|
-
|
0.0%
|
|
The Runnels Family
Trust DTD 1-11-2000 (5)
|
275,000
|
*
|
275,000
|
-
|
0.0%
|
|
District 2 Capital
Fund LP (6)
|
165,000
|
*
|
165,000
|
-
|
0.0%
|
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Michael Breen
(7)
|
55,000
|
*
|
55,000
|
-
|
0.0%
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Greg Suess
(8)
|
55,000
|
*
|
55,000
|
-
|
0.0%
|
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Multicell
Immunotherapeutics, Inc.
|
75,000
|
*
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75,000
|
-
|
0.0%
|
* Represents
beneficial ownership of less than 1%.
_____________
(1)
Consists of 412,500 shares of
common stock that may be acquired from us upon conversion of a
senior convertible debenture at the current conversion price of
$2.00 per share.
(2)
Consists of 13,750 shares of common
stock that may be acquired from us upon conversion of a senior
convertible debenture at the current conversion price of $2.00 per
share.
(3)
Consists of 137,500 shares of
common stock that may be acquired from us upon conversion of a
senior convertible debenture at the current conversion price of
$2.00 per share.
(4)
Consists of 13,750 shares of common
stock that may be acquired from us upon conversion of a senior
convertible debenture at the current conversion price of $2.00 per
share.
(5)
Consists of 275,000 shares of
common stock that may be acquired from us upon conversion of a
senior convertible debenture at the current conversion price of
$2.00 per share.
(6)
Consists of 165,000 shares of
common stock that may be acquired from us upon conversion of a
senior convertible debenture at the current conversion price of
$2.00 per share.
(7)
Consists of 55,000 shares of common
stock that may be acquired from us upon conversion of a senior
convertible debenture at the current conversion price of $2.00 per
share.
(8)
Consists of 55,000 shares of common
stock that may be acquired from us upon conversion of a senior
convertible debenture at the current conversion price of $2.00 per
share.
(9)
The
selling stockholders have not informed us, and we do not know, when
or in what amounts the selling stockholders may offer for sale the
shares of common stock pursuant to this offering. The selling
stockholders may choose not to sell any of the shares offered by
this prospectus. Because the selling stockholders may offer all,
some or none of the common stock that they own pursuant to this
offering, and because there are currently no agreements,
arrangements or undertakings with respect to the sale of any such
shares, we cannot provide any information or estimates as to the
number of shares of our common stock that the selling stockholders
will hold after completion of this offering. For purposes of this
table, we have assumed that the selling stockholders will have sold
all of the shares of common stock issuable upon conversion of the
notes covered by this prospectus upon the completion of this
offering.
The selling stockholders, which as used herein includes donees,
pledgees, transferees or other successors-in-interest selling
shares of common stock or interests in shares of common stock
received after the date of this prospectus from a selling
stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise
dispose of any or all of their shares of common stock or interests
in shares of common stock on any stock exchange, market or trading
facility on which the shares are traded or in private transactions.
These dispositions may be at fixed prices, at prevailing market
prices at the time of sale, at prices related to the prevailing
market price, at varying prices determined at the time of sale, or
at negotiated prices.
The selling stockholders may use any one or more of the following
methods when disposing of shares or interests therein:
●
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;
●
short sales
effected after the date the registration statement of which this
prospectus supplement is a part was declared effective by the
SEC;
●
through the writing
or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;
●
broker–dealers
may agree with the selling stockholders to sell a specified number
of such shares at a stipulated price per share;
●
a combination of
any such methods of sale; and
●
any other method
permitted by applicable law.
The selling stockholders may, from time to time, pledge or grant a
security interest in some or all of the 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, under this
prospectus, or under an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act
amending 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
the shares of common stock in other circumstances, in which case
the transferees, pledgees or other successors in interest will be
the selling beneficial owners for purposes of this
prospectus.
In connection with the sale of our common stock or interests
therein, the selling stockholders may enter into hedging
transactions with broker–dealers or other financial
institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The
selling stockholders may also sell shares of our common stock short
and deliver these securities to close out their short positions, or
loan or pledge the common stock to broker–dealers that in
turn may sell these securities. The selling stockholders may also
enter into option or other transactions with broker–dealers
or other financial institutions or the creation of one or more
derivative securities which require the delivery to such
broker–dealer or other financial institution of shares
offered by this prospectus, which shares such broker–dealer
or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The aggregate proceeds to the selling stockholders from the sale of
the common stock offered by them will be the purchase price of the
common stock less discounts or commissions, if any. Each of the
selling stockholders reserves the right to accept and, together
with their agents from time to time, to reject, in whole or in
part, any proposed purchase of common stock to be made directly or
through agents. We will not receive any of the proceeds from this
offering.
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 of 1933, provided that they meet the criteria
and conform to the requirements of that rule.
The selling stockholders and any underwriters, broker–dealers
or agents that participate in the sale of the common stock or
interests therein may be “underwriters” within the
meaning of Section 2(a)(11) of the Securities Act. Any discounts,
commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the
Securities Act. Selling stockholders who are
“underwriters” within the meaning of Section 2(a)(11)
of the Securities Act will be subject to the prospectus delivery
requirements of the Securities Act.
To the extent required, the shares of our common stock to be sold,
the names of the selling stockholders, the respective purchase
prices and public offering prices, the names of any agents, dealer
or underwriter, any applicable commissions or discounts with
respect to a particular offer will be set forth in an accompanying
prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this
prospectus.
In order to comply with the securities laws of some states, if
applicable, the common stock may be sold in these jurisdictions
only through registered or licensed brokers or dealers. In
addition, in some states the common stock may not be sold unless it
has been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is
complied with.
We have advised the selling stockholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of
shares in the market and to the activities of the selling
stockholders and their affiliates. In addition, to the extent
applicable we will make copies of this prospectus (as it may be
supplemented or amended from time to time) available to the selling
stockholders for the purpose of satisfying the prospectus delivery
requirements of the Securities Act. The selling stockholders may
indemnify any broker–dealer that participates in transactions
involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities
Act.
The validity of the securities being offered hereby will be passed
upon for us by DLA Piper LLP (US), Austin, Texas.
The consolidated financial statements, and the related financial
statement schedule, incorporated in this Prospectus by reference to
our Annual Report on Form 10-K have been audited by Seligson &
Giannattasio, LLP, an independent registered public accounting
firm, as stated in their report, which is incorporated herein by
reference. Such financial statements and financial statement
schedule 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 ADDITIONAL INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information electronically with the SEC. You may read and
copy these reports, proxy statements and other information at the
SEC’s public reference room at 100 F Street NE, Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more
information about the operation of the public reference room. You
can request copies of these documents by writing to the SEC and
paying a fee for the copying costs. The SEC also maintains an
Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file
electronically with the SEC, including us. The SEC’s website
can be found at www.sec.gov. In addition, we make available on or
through our Internet site copies of these reports as soon as
reasonably practicable after we electronically file or furnish them
to the SEC. Our Internet site can be found at
https://ir.gtbiopharma.com. Information contained in or accessible
through our website does not constitute a part of this
prospectus.
INCORPORATION OF CERTAIN INFORMATION 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 supplement. We incorporate by reference the following
information or documents that we have filed with the SEC
(Commission File No. 000-08092):
●
our Annual Report
on Form 10-K for our fiscal year ended December 31, 2017,
filed with the SEC on March 1, 2018;
●
our quarterly
report on Form 10-Q for the quarter ended March 31, 2018, filed
with the SEC on May 15, 2018;
●
our current reports
on Form 8-K filed with the SEC on January 16, 2018, January 23,
2018, February 21, 2018, April 27, 2018, May 14, 2018 and July 5,
2018; and
●
the description of
our common stock contained in our Prospectus dated June 18, 1969
(File No. 0361150), filed with the SEC on June 23, 1969, including
any amendment or report filed for the purpose of updating such
description.
Any information in any of the foregoing documents will
automatically be deemed to be modified or superseded to the extent
that information in this prospectus supplement or in a later filed
document that is incorporated or deemed to be incorporated herein
by reference modifies or replaces such information.
We also incorporate by reference any future filings (other than
current reports furnished under Item 2.02 or Item 7.01 of
Form 8-K and exhibits filed on such form that are related to
such items) made with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, including all such reports
filed after the date of this prospectus supplement until the
completion or termination of the offering of the securities made by
this prospectus supplement. Information in such future filings
updates and supplements the information provided in this prospectus
supplement. Any statements in any such future filings will
automatically be deemed to modify and supersede any information in
any document we previously filed with the SEC that is incorporated
or deemed to be incorporated herein by reference to the extent that
statements in the later filed document modify or replace such
earlier statements.
We will furnish without charge to each person to whom a copy of
this prospectus supplement is delivered, upon written or oral
request, a copy of the documents that have been incorporated by
reference into this prospectus supplement, including exhibits to
these documents. You should direct any requests for copies to GT
Biopharma, Inc., 100 South Ashley Drive, Suite 600, Tampa, Florida
33602; telephone number (800) 3049888.
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities
and we are not soliciting offers to buy these securities in any
state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS (Subject to Completion)
March 21, 2018
GT BIOPHARMA, INC.
$125,000,000
COMMON STOCK
PREFERRED STOCK
DEBT SECURITIES
WARRANTS
UNITS
We may from time to time offer to sell any combination of the
securities described in this prospectus, either individually or in
units, in one or more offerings. The aggregate initial offering
price of all securities sold under this prospectus will not exceed
$125,000,000.
This prospectus provides a general description of the securities we
may offer. Each time we sell securities, we will provide specific
terms of the securities offered in a supplement to this prospectus.
We may also authorize one or more free writing prospectuses to be
provided to you in connection with these offerings. The prospectus
supplement and any related free writing prospectus may also add,
update or change information contained in this prospectus. You
should carefully read this prospectus, the applicable prospectus
supplement and any related free writing prospectus, as well as any
documents incorporated by reference herein or therein, before you
invest in any securities. This prospectus may not be used to
consummate a sale of securities unless accompanied by the
applicable prospectus supplement.
Our common stock is quoted on the OTCQB under the symbol
“GTBP.” On March 20, 2018, the last reported sale price
of our common stock on the OTCQB was $1.86 per share. The
applicable prospectus supplement will contain information, where
applicable, as to any other quotation on the OTCQB or any
securities market or other exchange of the securities, if any,
covered by the prospectus supplement.
Investing in our securities involves risks. See “Risk
Factors” beginning on page 5.
We may sell these securities directly to investors, through agents
designated from time to time or to or through underwriters or
dealers. For additional information on the methods of sale, you
should refer to the section titled “Plan of
Distribution” in this prospectus. If any underwriters are
involved in the sale of any securities with respect to which this
prospectus is being delivered, the names of such underwriters and
any applicable commissions or discounts will be set forth in a
prospectus supplement. The price to the public of such securities
and the net proceeds we expect to receive from such sale will also
be set forth in a prospectus supplement.
Neither the Securities and Exchange Commission nor any other
regulatory body has approved or disapproved of these securities or
passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
The date of this prospectus is March 21, 2018.
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This
prospectus is a part of a registration statement that we filed with
the Securities and Exchange Commission, or SEC, using a
“shelf” registration process. Under this
shelf registration process, we may sell any combination of the
securities described in this prospectus in one or more offerings up
to a total dollar amount of $125,000,000. This prospectus provides
you with a general description of the securities we may offer. Each
time we sell securities under this shelf registration, we will
provide a prospectus supplement that will contain specific
information about the terms of that offering. We may also authorize
one or more free writing prospectuses to be provided to you that
may contain material information relating to these offerings. The
prospectus supplement and any related free writing prospectus that
we may authorize to be provided to you may also add, update or
change information contained in this prospectus or in any documents
that we have incorporated by reference into this prospectus. You
should read this prospectus, any applicable prospectus supplement
and any related free writing prospectus, together with the
information incorporated herein by reference as described under the
heading “Where You Can
Find Additional Information.”
You
should rely only on the information that we have provided or
incorporated by reference in this prospectus, any applicable
prospectus supplement and any related free writing prospectus that
we may authorize to be provided to you. We have not authorized any
dealer, salesman or other person to give any information or to make
any representation other than those contained or incorporated by
reference in this prospectus, any applicable prospectus supplement
or any related free writing prospectus that we may authorize to be
provided to you. You must not rely upon any information or
representation not contained or incorporated by reference in this
prospectus, the accompanying prospectus supplement or related free
writing prospectus. We take no responsibility for, and can provide
no assurance as to the reliability of, any other information that
others may give you.
This
prospectus, the accompanying supplement to this prospectus and any
related free writing prospectus, if any, do not constitute an offer
to sell or the solicitation of an offer to buy any securities other
than the registered securities to which they relate, nor do this
prospectus, the accompanying supplement to this prospectus or any
related free writing prospectus, if any, constitute an offer to
sell or the solicitation of an offer to buy securities in any
jurisdiction to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction. You should not assume
that the information contained in this prospectus, any applicable
prospectus supplement or any related free writing prospectus is
accurate on any date subsequent to the date set forth on the front
of the document or that any information we have incorporated by
reference therein is correct on any date subsequent to the date of
the document incorporated by reference, even though this
prospectus, any applicable prospectus supplement or any related
free writing prospectus is delivered or the applicable securities
are sold on a later date.
This summary highlights selected information from this prospectus
and the documents incorporated herein by reference and does not
contain all of the information that you need to consider in making
your investment decision. You should carefully read the entire
prospectus, including the risks of investing in our securities
discussed under “Risk Factors” on page 5 of this
prospectus, the information incorporated herein by reference,
including our financial statements, and the exhibits to the
registration statement of which this prospectus is a part.
Throughout this prospectus, the terms “GTBP,”
“we,” “us,” “our,” “the
company” and “our company” refer to GT Biopharma,
Inc., a Delaware corporation formerly known as DDI Pharmaceuticals,
Inc., Diagnostic Data, Inc. and Oxis International, Inc., together
with our subsidiaries.
GT BIOPHARMA, INC.
Overview
We are a clinical stage biopharmaceutical company focused on the
development and commercialization of novel immuno-oncology products
based off our proprietary Tri-specific Killer Engager (TriKE),
Tetra-specific Killer Engager (TetraKE) and bi-specific Antibody
Drug Conjugate (ADC) technology platforms. Our TriKE and TetraKE
platforms generate proprietary moieties designed to harness and
enhance the cancer killing abilities of a patient’s own
natural killer, or NK, cells. Once bound to a NK cell, our moieties
are designed to enhance the NK cell and precisely direct it to one
or more specifically-targeted proteins (tumor antigens) expressed
on a specific type of cancer, ultimately resulting in the cancer
cell’s death. TriKEs and TetraKEs are made up of recombinant
fusion proteins, can be designed to target any number of tumor
antigens on hematologic malignancies, sarcomas or solid tumors and
do not require patient-specific customization. They are designed to
be dosed in a common outpatient setting similar to modern antibody
therapeutics and are expected to have reasonably low cost of goods.
Our ADC platform generates product candidates that are bi-specific,
ligand-directed single-chain fusion proteins that, we believe,
represent the next generation of ADCs.
Our most advanced bi-specific ADC, which targets CD19+ and/or CD22+
hematological malignancies, is in a Phase 2 NHL/ALL trial, and we
plan to begin a Phase 1 trial in CD33+ hematologic malignancies for
our most advanced TriKE product candidate in the second half of
2018. We are initially targeting certain hematologic malignancies
as we believe our product candidates may have certain advantages
over existing and other in-development products. We are also
developing TetraKE product candidates designed to target the larger
solid tumor market and expect to begin human clinical trials in
2019.
We also are focused on developing a portfolio of three central
nervous system, or CNS, product candidates that are covered by
issued or filed composition of matter patents and consist of
innovative reformulations and/or repurposing of existing therapies.
We expect to take advantage of our CNS portfolio by generating
proof-of-concept data and/or achieving other milestones and
ultimately entering into strategic transactions, which may include
transactions with commercialization-oriented pharmaceutical
companies.
Our TriKE product candidates are single-chain, tri-specific scFv
recombinant fusion proteins composed of the variable regions of the
heavy and light chains (or heavy chain only) of anti-CD16
antibodies, wild-type or a modified form of IL-15 and the variable
regions of the heavy and light chains of an antibody that precisely
targets a specific tumor antigen. We utilize the NK stimulating
cytokine human IL-15 as a crosslinker between the two scFvs which
provides a self-sustaining signal that leads to the proliferation
and activation of NK cells thus enhancing their ability to kill
cancer cells mediated by antibody-dependent cell-mediated
cytotoxicity (ADCC) via the highly potent CD16 activating receptor
on our moieties. Our lead TriKE, OXS-3550, targeting CD33+
malignancies is expected to begin clinical testing in the second
half of 2018. Our second TriKE product candidate, OXS-C3550, is a
next-generation version of OXS-3550 containing a modified CD16
component.
Our TetraKE product candidates are single-chain fusion proteins
composed of human single-domain anti-CD16 antibody, wild-type IL-15
and the variable regions of the heavy and light chains of two
antibodies that target two specific tumor antigens expressed on
specific types of cancer cells. An example of a TetraKE product
candidate is OXS-1615which targets EpCAM and CD133 positive solid
tumors. EpCAM is found on many solid tumor cells of epithelial
origin and CD133 is a marker for cancer stem cells. OXS-1615 is
designed to enable a patient’s NK cells to kill not only the
heterogeneous population of cancer cells found in many solid tumors
but also kill the cancer stem cells that are typically responsible
for recurrences. We intend to initiate human clinical testing for
certain of our solid tumor product candidates in 2019.
Our TriKEs and TetraKEs act by binding to a patient’s NK cell
and a specific tumor antigen enabling an immune synapse between the
now IL-15-enhanced NK cell and the targeted cancer cell. The
formation of this immune synapse induces NK cell activation leading
to the death of the cancer cell. The self-sustaining signal caused
by our IL-15 cross-linker enables prolonged and enhanced
proliferation and activation of NK cells similar to the increased
proliferation of T-cells caused by 41BB-L or CD28 intracellular
domains in CAR-T therapy but without the need to enhance the
patient’s NK cells ex vivo.
We are using our TriKE and TetraKE platforms with the intent to
bring to market multiple immuno-oncology products that can treat a
wide range of hematologic malignancies, sarcoma and solid tumors.
The platforms are scalable and we are putting processes in place to
be able to produce IND-ready moieties in approximately 90-120 days
after a specific TriKE or TetraKE conceptual design. After
conducting market and competitive research, specific moieties can
then be rapidly advanced into the clinic on our own or through
potential collaborations with larger companies. We are currently
evaluating over a dozen moieties and intend to announce additional
clinical product candidates in the second half of 2018. We believe
our TriKEs and TetraKEs will have the ability, if approved for
marketing, to be used on a stand-alone basis, augment the current
monoclonal antibody therapeutics, be used in conjunction with more
traditional cancer therapy and potentially overcome certain
limitations of current chimeric antigen receptor, or CAR-T,
therapy.
We also believe our bi-specific, ligand-directed single-chain
fusion proteins represents the next generation of ADCs. Our lead
bi-specific ADC, OXS-1550, which targets CD19+ and/or CD22+
hematological malignancies is currently in a Phase 2 trial being
conducted at the University of Minnesota Masonic Cancer Center in
patients with relapsed/refractory B-cell leukemias or lymphomas. We
believe OXS-1550 has certain properties that could result in
competitive advantages over recently approved ADC products
targeting leukemias and lymphomas. In a Phase 1 trial, of nine
patients that achieved adequate blood levels, we saw a durable
complete response, or CR, in two heavily pretreated patients. One
patient, who had failed multiple previous treatment regimens, has
been cancer free since early 2015.
Our initial work has been conducted in collaboration with the
Masonic Cancer Center at the University of Minnesota under a
program led by Dr. Jeffrey Miller, the Deputy Director. Dr. Miller
is a recognized leader in the field of NK cell and IL-15 biology
and their therapeutic potential. We have exclusive rights to the
TriKE and TetraKE platforms and are generating additional
intellectual property around specific moieties.
We also are focused on developing a portfolio of central nervous
system, or CNS, product candidates that are covered by formulation
patents and issued or filed composition of matter patents and
consist of innovative reformulations and/or repurposing of existing
therapies. We believe our CNS product candidates represent
potentially near-to-market opportunities that may have broader
potential applicability beyond their initial indication. Certain
members of our management team have a track-record of developing
CNS products and product candidates with similar strategies
including at Chase Pharmaceuticals and Prestwick Pharmaceuticals.
We have designed our CNS clinical programs with the intent to
efficiently advance each program to an FDA New Drug Application in
a certain initial indication and expand applicable markets
potentially after approval. Our three product candidates are
initially targeting a rare autoimmune disease Myasthenia Gravis, a
rare neuropathic pain indication, trigeminal neuralgia, and a
vestibular disorder, motion sickness.
Securities We May Offer
We may
offer shares of our common stock and preferred stock, various
series of debt securities and warrants to purchase any of such
securities, either individually or in units, from time to time
under this prospectus, together with any applicable prospectus
supplement and related free writing prospectus, at prices and on
terms to be determined by market conditions at the time of
offering. This prospectus provides you with a general description
of the securities we may offer. Each time we offer a type or series
of securities, we will provide a prospectus supplement that will
describe the specific amounts, prices and other important terms of
the securities, including, to the extent applicable:
●
designation or
classification;
●
aggregate principal
amount or aggregate offering price;
●
maturity, if
applicable;
●
original issue
discount, if any;
●
rates and times of
payment of interest or dividends, if any;
●
redemption,
conversion, exchange or sinking fund terms, if any;
●
conversion or
exchange prices or rates, if any, and, if applicable, any
provisions for changes to or adjustments in the conversion or
exchange prices or rates and in the securities or other property
receivable upon conversion or exchange;
●
restrictive
covenants, if any;
●
voting or other
rights, if any; and
●
important United
States federal income tax considerations.
A
prospectus supplement and any related free writing prospectus that
we may authorize to be provided to you may also add, update or
change information contained in this prospectus or in documents we
have incorporated by reference. However, no prospectus supplement
or free writing prospectus will offer a security that is not
registered and described in this prospectus at the time of the
effectiveness of the registration statement of which this
prospectus is a part.
We may
sell the securities directly to or through underwriters, dealers or
agents. We, and our underwriters or agents, reserve the right to
accept or reject all or part of any proposed purchase of
securities. If we do offer securities through underwriters or
agents, we will include in the applicable prospectus
supplement:
●
the names of those
underwriters or agents;
●
applicable fees,
discounts and commissions to be paid to them;
●
details regarding
over-allotment options, if any; and
●
the net proceeds to
us.
Common Stock
We may
offer shares of our common stock, par value $0.001 per share,
either alone or underlying other registered securities convertible
into or exercisable for our common stock. Holders of our common
stock are entitled to dividends as our board of directors may
declare from time to time out of legally available funds, subject
to the preferential rights of the holders of any shares of our
preferred stock that are outstanding or that we may issue in the
future. Currently, we do not pay any dividends and we have
1,259,778 shares of preferred stock outstanding. Each holder of our
common stock is entitled to one vote per share. In this prospectus,
we provide a general description of, among other things, the rights
and restrictions that apply to holders of our common stock. Our
common stock is described in greater detail in this prospectus
under “Description of Capital Stock—Common
Stock.”
Preferred Stock
We may
issue shares of preferred stock in one or more classes or series.
Our board of directors or a committee designated by our board of
directors will determine the dividend, voting and conversion rights
and other provisions at the time of sale. The particular terms of
each class or series of preferred stock, including redemption
privileges, liquidation preferences, voting rights, dividend rights
and/or conversion rights, will be more fully described in the
applicable prospectus supplement relating to the preferred stock
offered thereby. Our preferred stock is described in greater detail
in this prospectus under “Description of Capital
Stock—Preferred Stock.”
Debt Securities
We may
offer debt securities from time to time, in one or more series, as
either senior or subordinated debt or as senior or subordinated
convertible debt. The senior debt securities will rank equally with
any other unsubordinated debt that we may have and may be secured
or unsecured. The subordinated debt securities will be subordinate
and junior in right of payment, to the extent and in the manner
described in the instrument governing the debt, to all or some
portion of our indebtedness. Any convertible debt securities that
we issue will be convertible into or exchangeable for our common
stock or other securities of ours. Conversion may be mandatory or
at the holder’s option and would be at prescribed conversion
rates.
The
debt securities will be issued under one or more documents called
indentures, which are contracts between us and a trustee for the
holders of the debt securities. In this prospectus, we have
summarized certain general features of the debt securities under
“Description of Debt Securities.” We urge you, however,
to read the prospectus supplements and any free writing prospectus
that we may authorize to be provided to you related to the series
of debt securities being offered, as well as the complete
indentures that contain the terms of the debt securities. Forms of
indentures have been filed as exhibits to the registration
statement of which this prospectus is a part, and supplemental
indentures and forms of debt securities containing the terms of
debt securities being offered will be incorporated by reference
into the registration statement of which this prospectus is a part
from reports we file with the SEC.
Warrants
We may
from time to time offer warrants for the purchase of our common
stock, preferred stock and/or debt securities in one or more
series. We may issue warrants independently or together with common
stock, preferred stock and/or debt securities, and the warrants may
be attached to or separate from those securities.
The
warrants will be evidenced by warrant certificates issued under one
or more warrant agreements, which are contracts between us and an
agent for the holders of the warrants. In this prospectus, we have
summarized certain general features of the warrants under
“Description of Warrants.” We urge you, however, to
read the prospectus supplements and any free writing prospectus
that we may authorize to be provided to you related to the series
of warrants being offered, as well as the complete warrant
agreements and warrant certificates that contain the terms of the
warrants. Specific warrant agreements will contain additional
important terms and provisions and will be incorporated by
reference as an exhibit to the registration statement that includes
this prospectus.
Units
We may
offer units consisting of common stock, preferred stock, debt
securities and/or warrants to purchase any of such securities in
one or more series. In this prospectus, we have summarized certain
general features of the units under “Description of
Units.” We urge you, however, to read the prospectus
supplements and any free writing prospectus that we may authorize
to be provided to you related to the series of units being offered,
as well as the unit agreements that contain the terms of the units.
We will file as exhibits to the registration statement of which
this prospectus is a part, or will incorporate by reference from a
current report on Form 8-K that we file with the SEC, the form of
unit agreement and any supplemental agreements that describe the
terms of the series of units we are offering before the issuance of
the related series of units.
We will
evidence each series of units by unit certificates that we will
issue under a separate agreement. We will enter into the unit
agreements with a unit agent. Each unit agent will be a bank or
trust company that we select. We will indicate the name and address
of the unit agent in the applicable prospectus supplement relating
to a particular series of units.
Investment
in our securities involves risks. Prior to making a decision about
investing in our securities, you should consider carefully the risk
factors, together with all of the other information contained or
incorporated by reference in this prospectus and any prospectus
supplement, including any additional specific risks described in
the section entitled “Risk Factors” contained in any
supplements to this prospectus, as updated by annual, quarterly and
other reports and documents we file with the SEC after the date of
this prospectus and that are incorporated by reference herein or in
the applicable prospectus supplement. Each of these risk factors
could have a material adverse effect on our business, results of
operations, financial position or cash flows, which may result in
the loss of all or part of your investment.
Risks Related to Our Business
Our business is at an early stage of development and we may not
develop therapeutic products that can be
commercialized.
Our
business is at an early stage of development. We do not have
immune-oncology products in late stage clinical trials and have
only recently begun clinical trials for our CNS product candidates.
We are still in the early stages of identifying and conducting
research on potential therapeutic products. Our potential
therapeutic products will require significant research and
development and pre-clinical and clinical testing prior to
regulatory approval in the United States and other countries. We
may not be able to obtain regulatory approvals, enter clinical
trials for any of our product candidates, or commercialize any
products. Our product candidates may prove to have undesirable and
unintended side effects or other characteristics adversely
affecting their safety, efficacy or cost effectiveness that could
prevent or limit their use. Any product using any of our technology
may fail to provide the intended therapeutic benefits or
achieve therapeutic benefits equal to or better than the standard
of treatment at the time of testing or production.
We have a history of operating losses and we expect to continue to
incur losses for the foreseeable future and we may never generate
revenue or achieve profitability.
As of
December 31, 2017, we had an accumulated deficit of $267,896,000.
We have not generated any significant revenue to date and are not
profitable, and have incurred losses in each year since our
inception. We do not expect to generate any product sales or
royalty revenues for at least four years. We expect to incur
significant additional operating losses for the foreseeable future
as we expand research and development and clinical trial
efforts.
Our
ability to achieve long-term profitability is dependent upon
obtaining regulatory approvals for our products and successfully
commercializing our products alone or with third parties. However,
our operations may not be profitable even if any of our products
under development are successfully developed and produced and
thereafter commercialized. Even if we achieve profitability in the
future, we may not be able to sustain profitability in subsequent
periods.
Even if
we succeed in commercializing one or more of our product
candidates, we expect to continue to incur substantial research and
development and other expenditures to develop and market additional
product candidates. The size of our future net losses will depend,
in part, on the rate of future growth of our expenses and our
ability to generate revenue. Our prior losses and expected future
losses have had and will continue to have an adverse effect on our
stockholders’ equity and working capital.
We will need additional capital to conduct our operations and
develop our products, and our ability to obtain the necessary
funding is uncertain.
We have
used a significant amount of cash since inception to finance the
continued development and testing of our product candidates, and we
expect to need substantial additional capital resources in order to
develop our product candidates going forward and launch and
commercialize any product candidates for which we receive
regulatory approval.
We may
not be successful in generating and/or maintaining operating cash
flow, and the timing of our capital expenditures and other
expenditures may not result in cash sufficient to sustain our
operations through the next 12 months. If financing is not
sufficient and additional financing is not available or available
only on terms that are detrimental to our long-term survival, it
could have a material adverse effect on our ability to continue to
function. The timing and degree of any future capital requirements
will depend on many factors, including:
●
the accuracy of the
assumptions underlying our estimates for capital needs in 2018 and
beyond;
●
scientific and
clinical progress in our research and development
programs;
●
the magnitude and
scope of our research and development programs and our ability to
establish, enforce and maintain strategic arrangements for
research, development, clinical testing, manufacturing and
marketing;
●
our progress with
pre-clinical development and clinical trials;
●
the time and costs
involved in obtaining regulatory approvals;
●
the costs involved
in preparing, filing, prosecuting, maintaining, defending and
enforcing patent claims; and
●
the number and type
of product candidates that we pursue.
Additional
financing through strategic collaborations, public or private
equity or debt financings or other financing sources may not be
available on acceptable terms, or at all. Additional equity
financing could result in significant dilution to our stockholders,
and any debt financings will likely involve covenants restricting
our business activities. Additional financing may not be available
on acceptable terms, or at all. Further, if we obtain additional
funds through arrangements with collaborative partners, these
arrangements may require us to relinquish rights to some of our
technologies, product candidates or products that we would
otherwise seek to develop and commercialize on our
own.
If
sufficient capital is not available, we may be required to delay,
reduce the scope of or eliminate one or more of our research or
product development initiatives, any of which could have a material
adverse effect on our financial condition or business
prospects.
We have identified material weaknesses in our internal control over
financial reporting have not remedied these weaknesses. If we fail
to maintain an effective system of internal control over financial
reporting, we may not be able to accurately report our financial
results or prevent fraud. As a result, stockholders could lose
confidence in our financial and other public reporting, which would
harm our business and the trading price of our common
stock.
Effective
internal control over financial reporting is necessary for us to
provide reliable financial reports and, together with adequate
disclosure controls and procedures, are designed to prevent fraud.
Any failure to implement required new or improved controls, or
difficulties encountered in their implementation, could cause us to
fail to meet our reporting obligations. Ineffective internal
control could also cause investors to lose confidence in our
reported financial information, which could have a negative effect
on the trading price of our common stock.
We have identified material weaknesses in our internal control over
financial reporting as a company. As defined in Regulation 12b-2
under the Securities Exchange Act of 1934, or the Exchange Act, a
“material weakness” is a deficiency, or combination of
deficiencies, in internal control over financial reporting, such
that there is a reasonable possibility that a material misstatement
of our annual or interim consolidated financial statements will not
be prevented, or detected on a timely basis. Specifically, we
determined that we had the following material weaknesses in our
internal control over financial reporting: (i) inadequate
segregation of duties; and (ii) insufficient written policies and
procedures for accounting and financial reporting with respect to
the requirements and application of both generally accepted
accounting principles in the United States of America, or GAAP, and
the U.S. Securities and Exchange Commission, or the SEC,
guidelines.
As of the date of this report, we have not remediated these
material weaknesses. We are continuing to adopt and implement
written policies and procedures for accounting and financial
reporting. We plan to hire additional qualified personnel to
address inadequate segregation of duties, although the timing of
such hires is largely dependent on our securing additional
financing to cover such costs. The implementation of these
initiatives may not fully address any material weakness or other
deficiencies that we may have in our internal control over
financial reporting.
Even if we develop effective internal control over financial
reporting, such controls may become inadequate due to changes in
conditions or the degree of compliance with such policies or
procedures may deteriorate, which could result in the discovery of
additional material weaknesses and deficiencies. In any event, the
process of determining whether our existing internal control over
financial reporting is compliant with Section 404 of the
Sarbanes-Oxley Act, or Section 404, and sufficiently effective
requires the investment of substantial time and resources,
including by certain members of our senior management. As a result,
this process may divert internal resources and take a significant
amount of time and effort to complete. In addition, we cannot
predict the outcome of this process and whether we will need to
implement remedial actions in order to establish effective controls
over financial reporting. The determination of whether or not our
internal controls are sufficient and any remedial actions required
could result in us incurring additional costs that we did not
anticipate, including the hiring of outside consultants. We may
also fail to timely complete our evaluation, testing and any
remediation required to comply with Section 404.
We are required, pursuant to Section 404, to furnish a report by
management on, among other things, the effectiveness of our
internal control over financial reporting. However, for as long as
we are a “smaller reporting company,” our independent
registered public accounting firm will not be required to attest to
the effectiveness of our internal control over financial reporting
pursuant to Section 404. While we could be a smaller reporting
company for an indefinite amount of time, and thus relieved of the
above-mentioned attestation requirement, an independent assessment
of the effectiveness of our internal control over financial
reporting could detect problems that our management's assessment
might not. Such undetected material weaknesses in our internal
control over financial reporting could lead to financial statement
restatements and require us to incur the expense of
remediation.
Our intellectual property may be compromised.
Part of
our value going forward depends on the intellectual property rights
that we have been and are acquiring. There may have been many
persons involved in the development of our intellectual property,
and we may not be successful in obtaining the necessary rights from
all of them. It is possible that in the future, third parties may
challenge our intellectual property rights. We may not be
successful in protecting our intellectual property rights. In
either event, we may lose the value of our intellectual property,
and if so, our business prospects may suffer.
If our efforts to protect the proprietary nature of the
intellectual property related to our technologies are not adequate,
we may not be able to compete effectively in our market and our
business would be harmed.
We rely
upon a combination of patents, trade secret protection and
confidentiality agreements to protect the intellectual property
related to our technologies. Any disclosure to or misappropriation
by third parties of our trade secret or other confidential
information could enable competitors to quickly duplicate or
surpass our technological achievements, thus eroding any
competitive advantage we may derive from this
information.
The
strength of patents in the biotechnology and pharmaceutical field
involves complex legal and scientific questions and can be
uncertain. The patent applications we own or license may fail to
result in issued patents in the United States or in foreign
countries. Third parties may challenge the validity, enforceability
or scope of any issued patents we own or license or any
applications that may issue as patents in the future, which may
result in those patents being narrowed, invalidated or held
unenforceable. Even if they are unchallenged, our patents and
patent applications may not adequately protect our intellectual
property or prevent others from developing similar products that do
not fall within the scope of our patents. If the breadth or
strength of protection provided by the patents we hold or pursue is
threatened, our ability to commercialize any product candidates
with technology protected by those patents could be threatened.
Further, if we encounter delays in our clinical trials, the period
of time during which we would have patent protection for any
covered product candidates that obtain regulatory approval would be
reduced. Since patent applications in the United States and most
other countries are confidential for a period of time after filing,
we cannot be certain at the time of filing that we are the first to
file any patent application related to our product
candidates.
In
addition to the protection afforded by patents, we seek to rely on
trade secret protection and confidentiality agreements to protect
proprietary know-how that is not patentable, processes for which
patents are difficult to enforce and any other elements of our
discovery platform and drug development processes that involve
proprietary know-how, information or technology that is not covered
by patents or not amenable to patent protection. Although we
require all of our employees and certain consultants and advisors
to assign inventions to us, and all of our employees, consultants,
advisors and any third parties who have access to our proprietary
know-how, information or technology to enter into confidentiality
agreements, our trade secrets and other proprietary information may
be disclosed or competitors may otherwise gain access to such
information or independently develop substantially equivalent
information. Further, the laws of some foreign countries do not
protect proprietary rights to the same extent or in the same manner
as the laws of the United States. As a result, we may encounter
significant difficulty in protecting and defending our intellectual
property both in the United States and abroad. If we are unable to
prevent material disclosure of the trade secret intellectual
property related to our technologies to third parties, we may not
be able to establish or maintain the competitive advantage that we
believe is provided by such intellectual property, which could
materially adversely affect our market position and business and
operational results.
Claims that we infringe the intellectual property rights of others
may prevent or delay our drug discovery and development
efforts.
Our
research, development and commercialization activities, as well as
any product candidates or products resulting from those activities,
may infringe or be accused of infringing a patent or other form of
intellectual property under which we do not hold a license or other
rights. Third parties may assert that we are employing their
proprietary technology without authorization. There may be
third-party patents of which we are currently unaware of, with
claims that cover the use or manufacture of our product candidates
or the practice of our related methods. Because patent applications
can take many years to issue, there may be currently pending patent
applications that may later result in issued patents that our
product candidates may infringe. In addition, third parties may
obtain patents in the future and claim that use of our technologies
infringes one or more claims of these patents. If our activities or
product candidates infringe the patents or other intellectual
property rights of third parties, the holders of such intellectual
property rights may be able to block our ability to commercialize
such product candidates or practice our methods unless we obtain a
license under the intellectual property rights or until any
applicable patents expire or are determined to be invalid or
unenforceable.
Defense
of any intellectual property infringement claims against us,
regardless of their merit, would involve substantial litigation
expense and would be a significant diversion of employee resources
from our business. In the event of a successful claim of
infringement against us, we may have to pay substantial damages,
obtain one or more licenses from third parties, limit our business
to avoid the infringing activities, pay royalties and/or redesign
our infringing product candidates or methods, any or all of which
may be impossible or require substantial time and monetary
expenditure. Further, if we were to seek a license from the third
party holder of any applicable intellectual property rights, we may
not be able to obtain the applicable license rights when needed or
on commercially reasonable terms, or at all. The occurrence of any
of the above events could prevent us from continuing to develop and
commercialize one or more of our product candidates and our
business could materially suffer.
We may desire, or be forced, to seek additional licenses to use
intellectual property owned by third parties, and such licenses may
not be available on commercially reasonable terms or at
all.
A third
party may hold intellectual property, including patent rights, that
are important or necessary to the development of our product
candidates, in which case we would need to obtain a license from
that third party or develop a different formulation of the product
that does not infringe upon the applicable intellectual property,
which may not be possible. Additionally, we may identify product
candidates that we believe are promising and whose development and
other intellectual property rights are held by third parties. In
such a case, we may desire to seek a license to pursue the
development of those product candidates. Any license that we may
desire to obtain or that we may be forced to pursue may not be
available when needed on commercially reasonable terms or at all.
Any inability to secure a license that we need or desire could have
a material adverse effect on our business, financial condition and
prospects.
The patent protection covering some of our product candidates may
be dependent on third parties, who may not effectively maintain
that protection.
While
we expect that we will generally seek to gain the right to fully
prosecute any patents covering product candidates we may in-license
from third-party owners, there may be instances when platform
technology patents that cover our product candidates remain
controlled by our licensors. If any of our current or future
licensing partners that retain the right to prosecute patents
covering the product candidates we license from them fail to
appropriately maintain that patent protection, we may not be able
to prevent competitors from developing and selling competing
products or practicing competing methods and our ability to
generate revenue from any commercialization of the affected product
candidates may suffer.
We may be involved in lawsuits to protect or enforce our patents or
the patents of our licensors, which could be expensive,
time-consuming and unsuccessful.
Competitors
may infringe our patents or the patents of our current or potential
licensors. To attempt to stop infringement or unauthorized use, we
may need to enforce one or more of our patents, which can be
expensive and time-consuming and distract management. If we pursue
any litigation, a court may decide that a patent of ours or our
licensor’s is not valid or is unenforceable, or may refuse to
stop the other party from using the relevant technology on the
grounds that our patents do not cover the technology in question.
Further, the legal systems of certain countries, particularly
certain developing countries, do not favor the enforcement of
patents, which could reduce the likelihood of success of any
infringement proceeding we pursue in any such jurisdiction. An
adverse result in any infringement litigation or defense
proceedings could put one or more of our patents at risk of being
invalidated, held unenforceable, or interpreted narrowly and could
put our patent applications at risk of not issuing, which could
limit our ability to exclude competitors from directly competing
with us in the applicable jurisdictions.
Interference
proceedings provoked by third parties or brought by the U.S. PTO
may be necessary to determine the priority of inventions with
respect to our patents or patent applications or those of our
licensors. An unfavorable outcome could require us to cease using
the related technology or to attempt to license rights to use it
from the prevailing party. Our business could be harmed if the
prevailing party does not offer us a license on commercially
reasonable terms, or at all. Litigation or interference proceedings
may fail and, even if successful, may result in substantial costs
and distract our management and other employees.
If we are unsuccessful in obtaining or maintaining patent
protection for intellectual property in development, our business
and competitive position would be harmed.
We are
seeking patent protection for some of our technology and product
candidates. Patent prosecution is a challenging process and is not
assured of success. If we are unable to secure patent protection
for our technology and product candidates, our business may be
adversely impacted.
In
addition, issued patents and pending international applications
require regular maintenance. Failure to maintain our portfolio may
result in loss of rights that may adversely impact our intellectual
property rights, for example by rendering issued patents
unenforceable or by prematurely terminating pending international
applications.
If we are unable to protect the confidentiality of our trade
secrets, our business and competitive position would be
harmed.
In
addition to seeking patents for some of our technology and product
candidates, we also rely on trade secrets, including unpatented
know-how, technology and other proprietary information, to maintain
our competitive position. We currently, and expect in the future to
continue to, seek to protect these trade secrets, in part, by
entering into confidentiality agreements with parties who have
access to them, such as our employees, collaborators, contract
manufacturers, consultants, advisors and other third parties. We
also enter into confidentiality and invention or patent assignment
agreements with our employees and consultants. Despite these
efforts, any of these parties may breach the agreements and
disclose our proprietary information, including our trade secrets,
and we may not be able to obtain adequate remedies for any such
disclosure. Enforcing a claim that a party illegally disclosed or
misappropriated a trade secret is difficult, expensive and
time-consuming, and the outcome is unpredictable. In addition, some
courts inside and outside the United States are less willing or
unwilling to protect trade secrets. If any of our trade secrets
were to be lawfully obtained or independently developed by a
competitor, we would have no right to prevent them, or those to
whom they disclose the trade secrets, from using that technology or
information to compete with us. If any of our trade secrets were to
be disclosed to or independently developed by a competitor, our
competitive position would be harmed.
If we fail to meet our obligations under our license agreements, we
may lose our rights to key technologies on which our business
depends.
Our
business depends in part on licenses from third parties. These
third-party license agreements impose obligations on us, such as
payment obligations and obligations to diligently pursue
development of commercial products under the licensed patents. If a
licensor believes that we have failed to meet our obligations under
a license agreement, the licensor could seek to limit or terminate
our license rights, which could lead to costly and time-consuming
litigation and, potentially, a loss of the licensed rights. During
the period of any such litigation, our ability to carry out the
development and commercialization of potential products could be
significantly and negatively affected. If our license rights were
restricted or ultimately lost, our ability to continue our business
based on the affected technology platform could be severely
adversely affected.
We will have to hire additional executive officers and employees to
operate our business. If we are unable to hire qualified personnel,
we may not be able to implement our business strategy.
We
currently have only five full-time employees. The loss of the
services of any of our key product or business development
employees could delay our product development programs and our
research and development efforts. We do not maintain key person
life insurance on any of our officers, employees or consultants. In
order to develop our business in accordance with our business
strategy, we will have to hire additional qualified personnel,
including in the areas of manufacturing, clinical trials
management, regulatory affairs, and business development. We will
need to raise sufficient funds to hire the necessary employees and
have commenced our search for additional key
employees.
Moreover,
there is intense competition for a limited number of qualified
personnel among biopharmaceutical, biotechnology, pharmaceutical
and other businesses. Many of the other pharmaceutical companies
against which we compete for qualified personnel have greater
financial and other resources, different risk profiles, longer
histories in the industry and greater ability to provide valuable
cash or stock incentives to potential recruits than we do. They
also may provide more diverse opportunities and better chances for
career advancement. Some of these characteristics may be more
appealing to high quality candidates than what we are able to offer
as an early-stage company. If we are unable to continue to attract
and retain high quality personnel, the rate and success at which we
can develop and commercialize product candidates will be
limited.
We depend on key personnel for our continued operations and future
success, and a loss of certain key personnel could significantly
hinder our ability to move forward with our business
plan.
Because
of the specialized nature of our business, we are highly dependent
on our ability to identify, hire, train and retain highly qualified
scientific and technical personnel for the research and development
activities we conduct or sponsor. The loss of one or more key
executive officers, or scientific officers, would be significantly
detrimental to us. In addition, recruiting and retaining qualified
scientific personnel to perform research and development work is
critical to our success. Our anticipated growth and expansion into
areas and activities requiring additional expertise, such as
clinical testing, regulatory compliance, manufacturing and
marketing, will require the addition of new management personnel
and the development of additional expertise by existing management
personnel. There is intense competition for qualified personnel in
the areas of our present and planned activities. Accordingly, we
may not be able to continue to attract and retain the qualified
personnel, which would adversely affect the development of our
business.
We may be subject to claims by third parties asserting that our
employees or we have misappropriated their intellectual property,
or claiming ownership of what we regard as our own intellectual
property.
Many of
our employees were previously employed at universities or other
biotechnology or pharmaceutical companies, including our
competitors or potential competitors. Although we try to ensure
that our employees do not use the proprietary information or
know-how of others in their work for us, with contractual
provisions and other procedures, we may be subject to claims that
these employees or we have used or disclosed intellectual property,
including trade secrets or other proprietary information, of any
such employee’s former employers. Litigation may be necessary
to defend against any such claims.
In
addition, while it is our policy to require our employees and
contractors who may be involved in the development of intellectual
property to execute agreements assigning such intellectual property
to us, we may be unsuccessful in executing such an agreement with
each party who in fact contributes to the development of
intellectual property that we regard as our own. Further, the terms
of such assignment agreements may be breached and we may not be
able to successfully enforce their terms, which may force us to
bring claims against third parties, or defend claims they may bring
against us, to determine the ownership of intellectual property
rights we may regard and treat as our own.
Our employees may engage in misconduct or other improper
activities, including noncompliance with regulatory standards and
requirements, which could cause our business to
suffer.
We are
exposed to the risk of employee fraud or other misconduct.
Misconduct by employees could include intentional failures to
comply with regulations of governmental authorities, such as the
FDA or the European Medicines Agency, or EMA, to provide accurate
information to the FDA or EMA, to comply with manufacturing
standards we have established, to comply with federal, state and
international healthcare fraud and abuse laws and regulations as
they may become applicable to our operations, to report financial
information or data accurately or to disclose unauthorized
activities to us. Employee misconduct could also involve the
improper use of information obtained in the course of clinical
trials, which could result in regulatory sanctions and serious harm
to our reputation. It is not always possible to identify and deter
employee misconduct, and the precautions we currently take and the
procedures we may establish in the future as our operations and
employee base expand to detect and prevent this type of activity
may not be effective in controlling unknown or unmanaged risks or
losses or in protecting us from governmental investigations or
other actions or lawsuits stemming from a failure by our employees
to comply with such laws or regulations. If any such actions are
instituted against us, and we are not successful in defending
ourselves or asserting our rights, those actions could have a
significant impact on our business and results of operations,
including the imposition of significant fines or other
sanctions.
Our reliance on the activities of our non-employee consultants,
research institutions and scientific contractors, whose activities
are not wholly within our control, may lead to delays in
development of our proposed products.
We rely
extensively upon and have relationships with scientific consultants
at academic and other institutions, some of whom conduct research
at our request, and other consultants with expertise in clinical
development strategy or other matters. These consultants are not
our employees and may have commitments to, or consulting or
advisory contracts with, other entities that may limit their
availability to us. We have limited control over the activities of
these consultants and, except as otherwise required by our
collaboration and consulting agreements to the extent they exist,
can expect only limited amounts of their time to be dedicated to
our activities. These research facilities may have commitments to
other commercial and non-commercial entities. We have limited
control over the operations of these laboratories and can expect
only limited amounts of time to be dedicated to our research
goals.
It may take longer to complete our clinical trials than we project,
or we may not be able to complete them at all.
For
budgeting and planning purposes, we have projected the date for the
commencement, continuation and completion of our various clinical
trials. However, a number of factors, including scheduling
conflicts with participating clinicians and clinical institutions,
and difficulties in identifying and enrolling patients who meet
trial eligibility criteria, may cause significant delays. We may
not commence or complete clinical trials involving any of our
products as projected or may not conduct them
successfully.
We
expect to rely on medical institutions, academic institutions or
clinical research organizations to conduct, supervise or monitor
some or all aspects of clinical trials involving our products. We
will have less control over the timing and other aspects of these
clinical trials than if we conducted them entirely on our own. If
we fail to commence or complete, or experience delays in, any of
our planned clinical trials, our stock price and our ability to
conduct our business as currently planned could be
harmed.
Clinical drug development is costly, time-consuming and uncertain,
and we may suffer setbacks in our clinical development program that
could harm our business.
Clinical
drug development for our product candidates is costly,
time-consuming and uncertain. Our product candidates are in various
stages of development and while we expect that clinical trials for
these product candidates will continue for several years, such
trials may take significantly longer than expected to complete. In
addition, we, the FDA, an institutional review board, or IRB, or
other regulatory authorities, including state and local agencies
and counterpart agencies in foreign countries, may suspend, delay,
require modifications to or terminate our clinical trials at any
time, for various reasons, including:
●
discovery of safety
or tolerability concerns, such as serious or unexpected toxicities
or side effects or exposure to otherwise unacceptable health risks,
with respect to study participants;
●
lack of
effectiveness of any product candidate during clinical trials or
the failure of our product candidates to meet specified
endpoints;
●
delays in subject
recruitment and enrollment in clinical trials or inability to
enroll a sufficient number of patients in clinical trials to ensure
adequate statistical ability to detect statistically significant
treatment effects;
●
difficulty in
retaining subjects and volunteers in clinical trials;
●
difficulty in
obtaining IRB approval for studies to be conducted at each clinical
trial site;
●
delays in
manufacturing or obtaining, or inability to manufacture or obtain,
sufficient quantities of materials for use in clinical
trials;
●
inadequacy of or
changes in our manufacturing process or the product formulation or
method of delivery;
●
delays or failure
in reaching agreement on acceptable terms in clinical trial
contracts or protocols with prospective contract research
organizations, or CROs, clinical trial sites and other third-party
contractors;
●
inability to add a
sufficient number of clinical trial sites;
●
uncertainty
regarding proper formulation and dosing;
●
failure by us, our
employees, our CROs or their employees or other third-party
contractors to comply with contractual and applicable regulatory
requirements or to perform their services in a timely or acceptable
manner;
●
scheduling
conflicts with participating clinicians and clinical
institutions;
●
failure to design
appropriate clinical trial protocols;
●
inability or
unwillingness of medical investigators to follow our clinical
protocols;
●
difficulty in
maintaining contact with subjects during or after treatment, which
may result in incomplete data; or
●
changes in
applicable laws, regulations and regulatory policies.
If we experience delays or difficulties in the enrollment of
patients in clinical trials, those clinical trials could take
longer than expected to complete and our receipt of necessary
regulatory approvals could be delayed or prevented.
We may
not be able to initiate or continue clinical trials for our product
candidates if we are unable to locate and enroll a sufficient
number of eligible patients to participate in these trials as
required by U.S. Food and Drug Administration, or the FDA, or
similar regulatory authorities outside the United States. In
particular, because we are focused on patients with molecularly
defined cancers, our pool of suitable patients may be smaller and
more selective and our ability to enroll a sufficient number of
suitable patients may be limited or take longer than anticipated.
In addition, some of our competitors have ongoing clinical trials
for product candidates that treat the same indications as our
product candidates, and patients who would otherwise be eligible
for our clinical trials may instead enroll in clinical trials of
our competitors’ product candidates.
Patient
enrollment for any of our clinical trials may also be affected by
other factors, including without limitation:
●
the severity of the
disease under investigation;
●
the frequency of
the molecular alteration we are seeking to target in the applicable
trial;
●
the eligibility
criteria for the study in question;
●
the perceived risks
and benefits of the product candidate under study;
●
the extent of the
efforts to facilitate timely enrollment in clinical
trials;
●
the patient
referral practices of physicians;
●
the ability to
monitor patients adequately during and after treatment;
and
●
the proximity and
availability of clinical trial sites for prospective
patients.
Our
inability to enroll a sufficient number of patients for our
clinical trials would result in significant delays and could
require us to abandon one or more clinical trials altogether.
Enrollment delays in our clinical trials may result in increased
development costs for our product candidates, and we may not have
or be able to obtain sufficient cash to fund such increased costs
when needed, which could result in the further delay or termination
of the trial.
Consistent
with our general product development strategy, we intend to design
future trials for our product candidates to include some patients
with the applicable clinical characteristics, stage of therapy,
molecular alterations, biomarkers, and/or cell surface antigens
that determine therapeutic options, or are indicators of the
disease, with a view to assessing possible early evidence of
potential therapeutic effect. If we are unable to locate and
include such patients in those trials, then our ability to make
those early assessments and to seek participation in FDA expedited
review and approval programs, including breakthrough therapy and
fast track designation, or otherwise to seek to accelerate clinical
development and regulatory timelines, could be
compromised.
We have limited clinical testing and regulatory capabilities, and
human clinical trials are subject to extensive regulatory
requirements, very expensive, time-consuming and difficult to
design and implement. Our products may fail to achieve necessary
safety and efficacy endpoints during clinical trials, which may
limit our ability to generate revenues from therapeutic
products.
We
cannot assure you that we will be able to invest or develop
resources for clinical trials successfully or as expediently as
necessary. In particular, human clinical trials can be very
expensive and difficult to design and implement, in part because
they are subject to rigorous regulatory requirements. The clinical
trial process is time consuming. We estimate that clinical trials
of our product candidates will take at least several years to
complete. Furthermore, failure can occur at any stage of the
trials, and we could encounter problems that cause us to abandon or
repeat clinical trials. The commencement and completion of clinical
trials may be affected by several factors, including:
●
unforeseen safety
issues;
●
determination of
dosing issues;
●
inability to
demonstrate effectiveness during clinical trials;
●
slower than
expected rates of patient recruitment;
●
inability to
monitor patients adequately during or after treatment;
and
●
inability or
unwillingness of medical investigators to follow our clinical
protocols.
In
addition, we or the FDA, may suspend our clinical trials at any
time if it appears that we are exposing participants to
unacceptable health risks or if the FDA finds deficiencies in our
investigational new drug application, or IND, submissions or the
conduct of these trials.
We are subject to extensive regulation, which can be costly and
time consuming and can subject us to unanticipated delays. even if
we obtain regulatory approval for some of our products, those
products may still face regulatory difficulties.
All of
our potential products, processing and manufacturing activities,
are subject to comprehensive regulation by the FDA in the United
States and by comparable authorities in other countries. The
process of obtaining FDA and other required regulatory approvals,
including foreign approvals, is expensive and often takes many
years and can vary substantially based upon the type, complexity
and novelty of the products involved. In addition, regulatory
agencies may lack experience with our technologies and products,
which may lengthen the regulatory review process, increase our
development costs and delay or prevent their
commercialization.
If we
violate regulatory requirements at any stage, whether before or
after we obtain marketing approval, the FDA may take enforcement
action(s) against us, which could include issuing a warning or
untitled letter, placing a clinical hold on an ongoing clinical
trial, product seizure, enjoining our operations, refusal to
consider our applications for pre-market approval, refusal of an
investigational new drug application, fines, or even civil or
criminal liability, any of which could materially harm our
reputation and financial results. Additionally, we may not be able
to obtain the labeling claims necessary or desirable for the
promotion of our products. We may also be required to undertake
post-marketing trials to provide additional evidence of
safety and effectiveness. In addition, if we or others identify
side effects after any of our adoptive therapies are on the market,
or if manufacturing problems occur, regulators may withdraw their
approval and reformulations, additional clinical trials, changes in
labeling of our products, and additional marketing applications may
be required.
Any of
the following factors, among others, could cause regulatory
approval for our product candidates to be delayed, limited or
denied:
●
the product
candidates require significant clinical testing to demonstrate
safety and effectiveness before applications for marketing approval
can be filed with the FDA and other regulatory
authorities;
●
data obtained from
pre-clinical and nonclinical animal testing and clinical trials can
be interpreted in different ways, and regulatory authorities may
not agree with our respective interpretations or may require us to
conduct additional testing;
●
negative or
inconclusive results or the occurrence of serious or unexpected
adverse events during a clinical trial could cause us to delay or
terminate development efforts for a product candidate;
and/or
●
FDA and other
regulatory authorities may require expansion of the size and scope
of the clinical trials.
Any
difficulties or failures that we encounter in securing regulatory
approval for our product candidates would likely have a substantial
adverse impact on our ability to generate product sales, and could
make any search for a collaborative partner more
difficult.
Obtaining regulatory approval even after clinical trials that are
believed to be successful is an uncertain process.
Even if
we complete our planned clinical trials and believe the results
were successful, obtaining regulatory approval is a lengthy,
expensive and uncertain process, and the FDA or other regulatory
agencies may delay, limit or deny approval of any of our
applications for pre-market approval for many reasons,
including:
●
we may not be able
to demonstrate to the FDA’s satisfaction that our product
candidates are safe and effective for any indication;
●
the results of
clinical trials may not meet the level of statistical significance
or clinical significance required by the FDA for
approval;
●
the FDA may
disagree with the number, design, size, conduct or implementation
of our clinical trials;
●
the FDA may not
find the data from pre-clinical studies and clinical trials
sufficient to demonstrate that the clinical and other benefits of
our product candidates outweigh their safety risks;
●
the FDA may
disagree with our interpretation of data from pre-clinical studies
or clinical trials, or may not accept data generated at our
clinical trial sites;
●
the data collected
from pre-clinical studies and clinical trials of our product
candidates may not be sufficient to support the submission of
applications for regulatory approval;
●
the FDA may have
difficulties scheduling an advisory committee meeting in a timely
manner, or the advisory committee may recommend against approval of
our application or may recommend that the FDA require, as a
condition of approval, additional pre-clinical studies or clinical
trials, limitations on approved labeling, or distribution and use
restrictions;
●
the FDA may require
development of a risk evaluation and mitigation strategy as a
condition of approval;
●
the FDA may
identify deficiencies in the manufacturing processes or facilities
of third-party manufacturers with which we enter into agreements
for clinical and commercial supplies;
●
the FDA may change
their approval policies or adopt new regulations that adversely
affect our applications for pre-market approval; and
●
the FDA may require
simultaneous approval for both adults and for children and
adolescents delaying needed approvals, or we may have successful
clinical trial results for adults but not children and adolescents,
or vice versa.
Before
we can submit an application for regulatory approval in the United
States, we must conduct a pivotal, Phase 3 trial. We will also need
to agree on a protocol with the FDA for a clinical trial before
commencing the trial. Phase 3 clinical trials frequently produce
unsatisfactory results even though prior clinical trials were
successful. Therefore, even if the results of our Phase 2 trials
are successful, the results of the additional trials that we
conduct may or may not be successful. Further, our product
candidates may not be approved even if they achieve their primary
endpoints in Phase 3 clinical trials. The FDA or other foreign
regulatory authorities may disagree with our trial design and our
interpretation of data from preclinical studies and clinical
trials. Any of these regulatory authorities may change requirements
for the approval of a product candidate even after reviewing and
providing comments or advice on a protocol for a clinical trial.
The FDA or other regulatory agencies may require that we conduct
additional clinical, nonclinical, manufacturing validation or drug
product quality studies and submit those data before considering or
reconsidering the application. Depending on the extent of these or
any other studies, approval of any applications that we submit may
be delayed by several years, or may require us to expend more
resources than we have available. It is also possible that
additional studies, if performed and completed, may not be
considered sufficient by the FDA or other regulatory
agencies.
In
addition, the FDA or other regulatory agencies may also approve a
product candidate for fewer or more limited indications than we
request, may impose significant limitations related to use
restrictions for certain age groups, warnings, precautions or
contraindications or may grant approval contingent on the
performance of costly post-marketing clinical trials or risk
mitigation requirements.
We intend to pursue Section 505(b)(2) regulatory approval
filings with the FDA for at least three of our product candidates.
If the FDA concludes that certain of our product candidates fail to
satisfy the requirements under Section 505(b)(2), or if the
requirements for such product candidates under
Section 505(b)(2) are not as we expect, the approval
pathway for such product candidates may take significantly longer,
cost substantially more and entail greater complications and risks
than anticipated and, in either case, may not be successful. In
addition, if under certain circumstances, exclusivity of
competitors would delay approval of our product candidates, then we
may pursue approval through the Section 505(b)(1) regulatory
pathway, which may require us to conduct additional preclinical or
clinical trials or obtain a right to reference the preclinical or
clinical data of others.
We are
currently developing three product candidates, GTP-004, GTP-011 and
PainBrake for which we intend to seek FDA approval through the
Section 505(b)(2) regulatory pathway, and may decide to
seek FDA approval for other products through the
Section 505(b)(2) regulatory pathway in the future. A
Section 505(b)(2) NDA is a special type of NDA that
enables the applicant to rely, in part, on the FDA’s findings
of safety and efficacy of an existing previously approved product,
or published literature, in support of its application.
Section 505(b)(2) NDAs often provide an alternate path to
FDA approval for new or improved formulations or new uses of
previously approved products. Such filings involve significant
filing costs, including filing fees.
Reliance
on existing safety findings could expedite the development program
for our product candidates by decreasing the amount of preclinical
or clinical data that we would need to generate in order to obtain
FDA approval. If the FDA does not allow us to pursue the
Section 505(b)(2) regulatory pathway as anticipated, or
if the Section 505(b)(2) regulatory pathway fails to
significantly decrease the amount of testing we must conduct, we
may need to conduct additional preclinical or clinical trials,
provide additional data and information and meet additional
standards to obtain regulatory approval. In such case, the time and
financial resources required to obtain FDA approval for product
candidates for which we seek approval through the
Section 505(b)(2) pathway in the future, and complications and
risks associated with these product candidates, likely would
increase substantially. Moreover, our inability to pursue the
Section 505(b)(2) regulatory pathway could prevent us
from introducing our product candidates into the market prior to
our competitors, which could harm our competitive position and
prospects. Even if the FDA allows us to pursue approval through the
Section 505(b)(2), we cannot guarantee that it would
ultimately lead to faster product development, and our product
candidates may not receive the requisite approvals for
commercialization.
Furthermore,
Section 505(b)(2) NDAs are subject to special
requirements designed to protect the patent rights of sponsors of
previously approved drugs referenced in a
Section 505(b)(2) NDA, and pursuing the Section 505(b)(2)
pathway could lead to patent litigation and other significant
delays if a current patent holder challenges our application for
pre-market approval. In addition, a manufacturer of an approved
referenced product to file a citizen petition with the FDA
seeking to delay approval of, or impose additional approval
requirements for, pending competing products. If successful, such
petitions can significantly delay, or even prevent, the approval of
the new product. However, even if the FDA ultimately denies such a
petition, the FDA may substantially delay approval while it
considers and responds to the petition.
Furthermore,
award of three-year exclusivity by the FDA to a competitor with a
Section 505(b)(2) NDA could delay approval of a product candidate
of ours submitted pursuant to Section 505(b)(2) of the Food, Drug,
and Cosmetic Act if the FDA were to determine that the products
have overlapping conditions of approval, even if our Section
505(b)(2) NDA does not rely on the competing Section 505(b)(2) NDA.
Alternatively, we may pursue approval through the Section 505(b)(1)
regulatory pathway, which may require us to conduct additional
preclinical or clinical trials or obtain a right to reference the
preclinical or clinical data of others. These alternatives may
increase the time and/or financial resources required to obtain
approval.
We will continue to be subject to extensive FDA regulation
following any product approvals, and if we fail to comply with
these regulations, we may suffer a significant setback in our
business.
Even if
we are successful in obtaining regulatory approval of our product
candidates, we will continue to be subject to the requirements of
and review by, the FDA and comparable regulatory authorities in the
areas of manufacturing processes, post-approval clinical data,
adverse event reporting, labeling, advertising and promotional
activities, among other things. In addition, any marketing approval
we receive may be limited in terms of the approved product
indication or require costly post-marketing testing and
surveillance. Discovery after approval of previously unknown
problems with a product, manufacturer or manufacturing process, or
a failure to comply with regulatory requirements, may result in
enforcement actions such as:
●
warning letters or
other actions requiring changes in product manufacturing processes
or restrictions on product marketing or distribution;
●
product recalls or
seizures or the temporary or permanent withdrawal of a product from
the market;
●
suspending any
ongoing clinical trials;
●
temporary or
permanent injunctions against our production
operations;
●
refusal of our
applications for pre-market approval or an investigational new drug
application; and
●
fines, restitution
or disgorgement of profits or revenue, the imposition of civil
penalties or criminal prosecution.
The
occurrence of any of these actions would likely cause a material
adverse effect on our business, financial condition and results of
operations.
Many of our business practices are subject to scrutiny and
potential investigation by regulatory and government enforcement
authorities, as well as to lawsuits brought by private citizens
under federal and state laws. We could become subject to
investigations, and our failure to comply with applicable law or an
adverse decision in lawsuits may result in adverse consequences to
us. If we fail to comply with U.S. healthcare laws, we could face
substantial penalties and financial exposure, and our business,
operations and financial condition could be adversely
affected.
While
payment is not yet available from third-party payors (government or
commercial) for our product, our goal is to obtain such coverage as
soon as possible after product approval and commercial launch in
the U.S . If this occurs, the availability of such payment would
mean that many healthcare laws would place limitations and
requirements on the manner in which we conduct our business
(including our sales and promotional activities and interactions
with healthcare professionals and facilities) and could result in
liability and exposure to us. In some instances, our interactions
with healthcare professionals and facilities that occurred prior to
commercialization could have implications at a later date. The laws
that may affect our ability to operate include, among others: (i)
the federal healthcare programs Anti-Kickback Statute, which
prohibits, among other things, persons from knowingly and willfully
soliciting, receiving, offering or paying remuneration, directly or
indirectly, in exchange for or to induce either the referral of an
individual for, or the purchase, order or recommendation of, any
good or service for which payment may be made under federal
healthcare programs such as Medicare or Medicaid, (ii) federal
false claims laws which prohibit, among other things, individuals
or entities from knowingly presenting, or causing to be presented,
claims for payment from Medicare, Medicaid, or other third-party
payors that are false or fraudulent, and which may apply to
entities like us under theories of “implied
certification” where the government and qui tam relators may
allege that device companies are liable where a product that was
paid for by the government in whole or in part was promoted
“off-label,” lacked necessary approval, or failed to
comply with good manufacturing practices or other laws; (iii)
transparency laws and related reporting and/or disclosures such as
the Sunshine Act; and/or (iv) state law equivalents of each of the
above federal laws, such as anti-kickback and false claims laws
which may apply to items or services reimbursed by any third-party
payor, including commercial insurers, many of which differ from
their federal counterparts in significant ways, thus complicating
compliance efforts.
If our
operations are found to be in violation of any of the laws
described above or any other governmental regulations that apply to
us, we may be subject to penalties, including civil and criminal
penalties, exclusion from participation in government healthcare
programs, damages, fines and the curtailment or restructuring of
our operations. Any penalties, damages, fines, curtailment or
restructuring of our operations could adversely affect our ability
to operate our business and our financial results. The risk of our
being found in violation of these laws is increased by the fact
that their provisions are open to a variety of evolving
interpretations and enforcement discretion. Any action against us
for violation of these laws, even if we successfully defend against
it, could cause us to incur significant legal expenses and divert
our management’s attention from the operation of our
business.
Both
federal and state government agencies have heightened civil and
criminal enforcement efforts. There are numerous ongoing
investigations of healthcare pharmaceutical companies and others in
the healthcare space, as well as their executives and managers. In
addition, amendments to the Federal False Claims Act, have made it
easier for private parties to bring qui tam (whistleblower)
lawsuits against companies under which the whistleblower may be
entitled to receive a percentage of any money paid to the
government. In addition, the Affordable Care Act amended the
federal civil False Claims Act to provide that a claim that
includes items or services resulting from a violation of the
federal anti-kickback statute constitutes a false or fraudulent
claim for purposes of the federal civil False Claims Act. Penalties
include substantial fines for each false claim, plus three times
the amount of damages that the federal government sustained because
of the act of that person or entity and/or exclusion from the
Medicare program. In addition, a majority of states have adopted
similar state whistleblower and false-claims provision. There can
be no assurance that our activities will not come under the
scrutiny of regulators and other government authorities or that our
practices will not be found to violate applicable laws, rules and
regulations or prompt lawsuits by private citizen "relators" under
federal or state false claims laws. Any future investigations of
our business or executives, or enforcement action or prosecution,
could cause us to incur substantial costs, and result in
significant liabilities or penalties, as well as damage to our
reputation.
Laws impacting the U.S. healthcare system are subject to a great
deal of uncertainty, which may result in adverse consequences to
our business.
There
have been a number of legislative and regulatory proposals to
change the healthcare system, reduce the costs of healthcare and
change medical reimbursement policies. Doctors, clinics, hospitals
and other users of our products may decline to purchase our
products to the extent there is uncertainty regarding coverage from
government or commercial payors. Further proposed legislation,
regulation and policy changes affecting third-party reimbursement
are likely. Among other things, Congress has in the past proposed
changes to and the repeal of the Patient Protection and Affordable
Care and Health Care and Education Affordability Reconciliation Act
of 2010 (collectively, the “Affordable Care Act”), and
lawsuits have been brought challenging aspects of the law at
various points. There have been repeated recent attempts by
Congress to repeal or replace the Affordable Care Act. At this
time, it remains unclear whether there will be any changes made to
or any repeal or replacement of the Affordable Care Act, with
respect to certain of its provisions or in its entirety. We are
unable to predict what legislation or regulation, if any, relating
to the health care industry or third-party coverage and
reimbursement may be enacted in the future at the state or federal
level, or what effect such legislation or regulation may have on
us. Denial of coverage and reimbursement of our products, or the
revocation or changes to coverage and reimbursement policies, could
have a material adverse effect on our business, results of
operations and financial condition.
We may not be successful in our efforts to build a pipeline of
product candidates.
A key
element of our strategy is to use and expand our product platform
to build a pipeline of product candidates, and progress those
product candidates through clinical development for the treatment
of a variety of different types of cancer. Even if we are
successful in building a product pipeline, the potential product
candidates that we identify may not be suitable for clinical
development for a number of reasons, including causing harmful side
effects or demonstrating other characteristics that indicate a low
likelihood of receiving marketing approval or achieving market
acceptance. If our methods of identifying potential product
candidates fail to produce a pipeline of potentially viable product
candidates, then our success as a business will be dependent on the
success of fewer potential product candidates, which introduces
risks to our business model and potential limitations to any
success we may achieve.
Our product candidates may cause undesirable side effects or have
other properties that could delay or prevent their regulatory
approval, limit the commercial profile of an approved label, or
result in significant negative consequences following marketing
approval, if any.
Additionally,
if one or more of our product candidates receives marketing
approval, and we or others later identify undesirable side effects
caused by such products, a number of potentially significant
negative consequences could result, including:
●
regulatory
authorities may withdraw approvals of such product;
●
regulatory
authorities may require additional warnings on the product’s
label;
●
we may be required
to create a medication guide for distribution to patients that
outlines the risks of such side effects;
●
we could be sued
and held liable for harm caused to patients; and
●
our reputation may
suffer.
Any of
these events could prevent us from achieving or maintaining market
acceptance of the particular product candidate, if approved, and
could significantly harm our business, results of operations and
prospects.
We may expend our limited resources to pursue a particular product
candidate or indication that does not produce any commercially
viable products and may fail to capitalize on product candidates or
indications that may be more profitable or for which there is a
greater likelihood of success.
Because
we have limited financial and managerial resources, we must focus
our efforts on particular research programs and product candidates
for specific indications. As a result, we may forego or delay
pursuit of opportunities with other product candidates or for other
indications that later prove to have greater commercial potential.
Further, our resource allocation decisions may result in our use of
funds for research and development programs and product candidates
for specific indications that may not yield any commercially viable
products. If we do not accurately evaluate the commercial potential
or target market for a particular product candidate, we may
relinquish valuable rights to that product candidate through
collaboration, licensing or other royalty arrangements in cases in
which it would have been more advantageous for us to retain sole
development and commercialization rights to such product candidate.
Any such failure to improperly assess potential product candidates
could result in missed opportunities and/or our focus on product
candidates with low market potential, which would harm our business
and financial condition.
Our products may be expensive to manufacture, and they may not be
profitable if we are unable to control the costs to manufacture
them.
Our
products may be significantly more expensive to manufacture than we
expect or than other therapeutic products currently on the market
today. We hope to substantially reduce manufacturing costs through
process improvements, development of new methods, increases in
manufacturing scale and outsourcing to experienced manufacturers.
If we are not able to make these, or other improvements, and
depending on the pricing of the product, our profit margins may be
significantly less than that of other therapeutic products on the
market today. In addition, we may not be able to charge a high
enough price for any product we develop, even if they are safe and
effective, to make a profit. If we are unable to realize
significant profits from our potential product candidates, our
business would be materially harmed.
For some of our products, we currently lack sufficient
manufacturing capabilities to produce our therapeutic product
candidates at commercial-scale quantities and do not have an
alternate manufacturing supply, which could negatively impact our
ability to meet any future demand for the product.
We
expect that we would need to significantly expand our manufacturing
capabilities to meet potential demand for our therapeutic product
candidates, if approved. Such expansion would require additional
regulatory approvals. Even if we increase our manufacturing
capabilities, it is possible that we may still lack sufficient
capacity to meet demand.
We do
not currently have any alternate supply for our products. If our
facilities where our products are currently being manufactured or
equipment were significantly damaged or destroyed, or if there were
other disruptions, delays or difficulties affecting manufacturing
capacity, including if such facilities are deemed not in compliance
with current Good Manufacturing Practice, or GMP, requirements,
future clinical studies and commercial production for our products
would likely be significantly disrupted and delayed. It would be
both time-consuming and expensive to replace this capacity with
third parties, particularly since any new facility would need to
comply with the regulatory requirements.
Ultimately,
if we are unable to supply our products to meet commercial demand,
whether because of processing constraints or other disruptions,
delays or difficulties that we experience, our production costs
could dramatically increase and sales of our products and their
long-term commercial prospects could be significantly
damaged.
To be successful, our proposed products must be accepted by the
healthcare community, which can be very slow to adopt or
unreceptive to new technologies and products.
Our
proposed products and those developed by our collaborative
partners, if approved for marketing, may not achieve market
acceptance since hospitals, physicians, patients or the medical
community in general may decide not to accept and use these
products. The products that we are attempting to develop represent
substantial departures from established treatment methods and will
compete with a number of more conventional therapies manufactured
and marketed by major pharmaceutical companies. The degree of
market acceptance of any of our developed products will depend on a
number of factors, including:
●
our establishment
and demonstration to the medical community of the clinical efficacy
and safety of our proposed products;
●
our ability to
create products that are superior to alternatives currently on the
market;
●
our ability to
establish in the medical community the potential advantage of our
treatments over alternative treatment methods; and
●
reimbursement
policies of government and third-party payers.
If the
healthcare community does not accept our products for any of these
reasons, or for any other reason, our business would be materially
harmed.
Our business is based on novel technologies that are inherently
expensive and risky and may not be understood by or accepted in the
marketplace, which could adversely affect our future
value.
The
clinical development, commercialization and marketing of
immuno-oncology therapies are at an early-stage, substantially
research-oriented, and financially speculative. To date, very few
companies have been successful in their efforts to develop and
commercialize an immuno-oncology therapeutic product. In general,
such products may be susceptible to various risks, including
undesirable and unintended side effects, unintended immune system
responses, inadequate therapeutic efficacy, or other
characteristics that may prevent or limit their approval or
commercial use. Furthermore, the number of people who may use such
therapies is difficult to forecast with accuracy. Our future
success is dependent on the establishment of a significant market
for such therapies and our ability to capture a share of this
market with our product candidates.
Our
development efforts with our therapeutic product candidates are
susceptible to the same risks of failure inherent in the
development and commercialization of therapeutic products based on
new technologies. The novel nature of immuno-oncology therapeutics
creates significant challenges in the areas of product development
and optimization, manufacturing, government regulation, third-party
reimbursement and market acceptance. For example, the FDA has
relatively limited experience regulating such therapies, and there
are few approved treatments using such therapy.
Our competition includes fully integrated biotechnology and
pharmaceutical companies that have significant advantages over
us.
The
market for therapeutic immuno-oncology products is highly
competitive. We expect that our most significant competitors will
be fully integrated and more established pharmaceutical and
biotechnology companies or institutions, including major
multinational pharmaceutical companies, biotechnology companies and
universities and other research institutions. These companies are
developing similar products, and they have significantly greater
capital resources and research and development, manufacturing,
testing, regulatory compliance, and marketing capabilities. Many of
these potential competitors may be further along in the process of
product development and also operate large, company-funded research
and development programs. As a result, our competitors may develop
more competitive or affordable products, or achieve earlier patent
protection or product commercialization than we are able to
achieve. Competitive products may render any products or product
candidates that we develop obsolete.
Many of
our competitors have substantially greater financial, technical and
other resources than we do, such as larger research and development
staff and experienced marketing and manufacturing organizations.
Additional mergers and acquisitions in the biotechnology and
pharmaceutical industries may result in even more resources being
concentrated in certain of our competitors. As a result, these
companies may be able to obtain regulatory approval more rapidly
than we can and may be more effective in selling and marketing
their products. Smaller or early-stage companies may also prove to
be significant competitors, particularly through collaborative
arrangements with large, established companies. Competition may
increase further as a result of advances in the commercial
applicability of technologies and greater availability of capital
for investment in these industries. Our competitors may succeed in
developing, acquiring or licensing drug products that are more
effective or less costly to produce or purchase on the market than
any product candidate we are currently developing or that we may
seek to develop in the future. If approved, our product candidates
will face competition from commercially available drugs as well as
drugs that are in the development pipelines of our
competitors.
Established
pharmaceutical companies may invest heavily to accelerate discovery
and development of or in-license novel compounds that could make
our product candidates less competitive. In addition, any new
product that competes with an approved product must demonstrate
compelling advantages in efficacy, convenience, tolerability and
safety in order to overcome price competition and to be
commercially successful. Accordingly, our competitors may succeed
in obtaining patent protection, receiving FDA, EMA or other
regulatory approval, or discovering, developing and commercializing
medicines before we do, which would have a material adverse impact
on our business and ability to achieve profitability from future
sales of our approved product candidates, if any.
If competitors develop and market products that are more effective,
safer or less expensive than our product candidates or offer other
advantages, our commercial prospects will be limited.
Our
therapeutic immuno-oncology development programs face, and will
continue to face, intense competition from pharmaceutical,
biopharmaceutical and biotechnology companies, as well as numerous
academic and research institutions and governmental agencies
engaged in drug discovery activities or funding, both in the United
States and abroad. Some of these competitors are pursuing the
development of drugs and other therapies that target the same
diseases and conditions that we are targeting with our product
candidates.
As a
general matter, we also face competition from many companies that
are researching and developing cell therapies. Many of these
companies have financial and other resources substantially greater
than ours. In addition, many of these competitors have
significantly greater experience in testing pharmaceutical and
other therapeutic products, obtaining FDA and other regulatory
approvals, and marketing and selling. If we ultimately obtain
regulatory approval for any of our product candidates, we also will
be competing with respect to manufacturing efficiency and marketing
capabilities, areas in which we have limited or no
commercial-scale experience. Mergers and acquisitions in the
pharmaceutical and biotechnology industries may result in even more
resources’ being concentrated by our competitors. Competition
may increase further as a result of advances made in the commercial
applicability of our technologies and greater availability of
capital for investment in these fields.
Our CNS
portfolio compounds also face considerable competition. Many
compounds are in development for the treatment of neuropathic pain.
Current treatments for neuropathic include narcotic analgesics,
voltage-gated sodium channel blockers, voltage-gated calcium
channel blockers, glutamate NMDA NR2B antagonists (ketamine), drugs
that increase monoamine transmission, and cannabinoids.
Some of the key players operating in
the global neuropathic pain market are Depomed Inc. (NASDAQ:DEPO),
Pfizer Inc. (NYSE:PFE), Johnson & Johnson (NYSE:JNJ),
Bristol-Myers Squibb (NYSE:BMY), Eli Lilly and Company (NYSE:LLY),
GlaxoSmithKline PLC (NYSE:GSK), Sanofi S.A. (NYSE:SNY), Biogen Idec
Inc. (NASDAQ:BIIB), and Baxter Healthcare Corporation (NYSE:BAX).
In the field of myasthenia gravis, pharmaceutical R&D efforts
focus on the discovery of a cure for the disease. A cure would make
treatment with GTP-004 obsolete. In the field of motion sickness,
research may be ongoing for better anti-motion sickness
drugs.
If we are unable to keep up with rapid technological changes in our
field or compete effectively, we will be unable to operate
profitably.
We are
engaged in activities in the biotechnology field, which is
characterized by extensive research efforts and rapid technological
progress. If we fail to anticipate or respond adequately to
technological developments, our ability to operate profitably could
suffer. Research and discoveries by other biotechnology,
agricultural, pharmaceutical or other companies may render our
technologies or potential products or services uneconomical or
result in products superior to those we develop. Similarly, any
technologies, products or services we develop may not be preferred
to any existing or newly developed technologies, products or
services.
We may not be able to obtain third-party patient reimbursement or
favorable product pricing, which would reduce our ability to
operate profitably.
Our
ability to successfully commercialize certain of our proposed
products in the human therapeutic field may depend to a significant
degree on patient reimbursement of the costs of such products and
related treatments at acceptable levels from government
authorities, private health insurers and other organizations, such
as health maintenance organizations. Reimbursement in the United
States or foreign countries may not be available for any products
we may develop, and, if available, may be decreased in the future.
Also, reimbursement amounts may reduce the demand for, or the price
of, our products with a consequent harm to our business. We cannot
predict what additional regulation or legislation relating to the
healthcare industry or third-party coverage and reimbursement may
be enacted in the future or what effect such regulation or
legislation may have on our business. If additional regulations are
overly onerous or expensive, or if healthcare-related legislation
makes our business more expensive or burdensome than originally
anticipated, we may be forced to significantly downsize our
business plans or completely abandon our business
model.
We may be subject to litigation that will be costly to defend or
pursue and uncertain in its outcome.
Our
business may bring us into conflict with our licensees, licensors
or others with whom we have contractual or other business
relationships, or with our competitors or others whose interests
differ from ours. If we are unable to resolve those conflicts on
terms that are satisfactory to all parties, we may become involved
in litigation brought by or against us. That litigation is likely
to be expensive and may require a significant amount of
management’s time and
attention, at the expense of other aspects of our business. The
outcome of litigation is always uncertain, and in some cases could
include judgments against us that require us to pay damages, enjoin
us from certain activities, or otherwise affect our legal or
contractual rights, which could have a significant adverse effect
on our business.
We are exposed to the risk of liability claims, for which we may
not have adequate insurance.
Since
we participate in the pharmaceutical industry, we may be subject to
liability claims by employees, customers, end users and third
parties. We do not currently have product liability insurance. We
intend to obtain proper insurance . however, there can be no
assurance that any liability insurance we purchase will be adequate
to cover claims asserted against us or that we will be able to
maintain such insurance in the future. We intend to adopt prudent
risk-management programs to reduce these risks and potential
liabilities. however, we have not taken any steps to create these
programs and have no estimate as to the cost or time required to do
so and there can be no assurance that such programs, if and when
adopted, will fully protect us. We may not be able to put risk
management programs in place, or obtain insurance, if we are unable
to retain the necessary expertise and/or are unsuccessful in
raising necessary capital in the future. Our failure to obtain
appropriate insurance, or to adopt and implement effective
risk-management programs, as well as any adverse rulings in any
legal matters, proceedings and other matters could have a material
adverse effect on our business.
Preclinical
and clinical trials are conducted during the development of
potential products and other treatments to determine their safety
and efficacy for use by humans. Notwithstanding these efforts, when
our treatments are introduced into the marketplace, unanticipated
side effects may become evident. Manufacturing, marketing, selling
and testing our product candidates under development or to be
acquired or licensed, entails a risk of product liability claims.
We could be subject to product liability claims in the event that
our product candidates, processes, or products under development
fail to perform as intended. Even unsuccessful claims could result
in the expenditure of funds in litigation and the diversion of
management time and resources, and could damage our reputation and
impair the marketability of our product candidates and processes.
While we plan to maintain liability insurance for product liability
claims, we may not be able to obtain or maintain such insurance at
a commercially reasonable cost. If a successful claim were made
against us, and we lacked insurance or the amount of insurance were
inadequate to cover the costs of defending against or paying such a
claim or the damages payable by us, we would experience a material
adverse effect on our business, financial condition and results of
operations.
We could be subject to product liability lawsuits based on the use
of our product candidates in clinical testing or, if obtained,
following marketing approval and commercialization. If product
liability lawsuits are brought against us, we may incur substantial
liabilities and may be required to cease clinical testing or limit
commercialization of our product candidates.
We
could be subject to product liability lawsuits if any product
candidate we develop allegedly causes injury or is found to be
otherwise unsuitable for human use during product testing,
manufacturing, marketing or sale. Any such product liability claims
may include allegations of defects in manufacturing, defects in
design, a failure to warn of dangers inherent in the product,
negligence, strict liability and a breach of warranties. Claims
could also be asserted under state consumer protection acts. If we
cannot successfully defend ourselves against product liability
claims, we may incur substantial liabilities or be required to
limit commercialization of our product candidates, if approved.
Even successful defense would require significant financial and
management resources. Regardless of the merits or eventual outcome,
liability claims may result in:
●
decreased demand
for our product candidates;
●
withdrawal of
clinical trial participants;
●
initiation of
investigations by regulators;
●
costs to defend the
related litigation;
●
a diversion of
management’s time and our resources;
●
substantial
monetary awards to trial participants or patients;
●
product recalls,
withdrawals or labeling, marketing or promotional
restrictions;
●
loss of revenues
from product sales; and
●
the inability to
commercialize our product candidates.
Our
inability to retain sufficient product liability insurance at an
acceptable cost to protect against potential product liability
claims could prevent or inhibit the clinical testing and
commercialization of products we develop. We may wish to obtain
additional such insurance covering studies or trials in other
countries should we seek to expand those clinical trials or
commence new clinical trials in other jurisdictions or increase the
number of patients in any clinical trials we may pursue. We also
may determine that additional types and amounts of coverage would
be desirable at later stages of clinical development of our product
candidates or upon commencing commercialization of any product
candidate that obtains required approvals. However, we may not be
able to obtain any such additional insurance coverage when needed
on acceptable terms or at all. If we do not obtain or retain
sufficient product liability insurance, we could be responsible for
some or all of the financial costs associated with a product
liability claim relating to our preclinical and clinical
development activities, in the event that any such claim results in
a court judgment or settlement in an amount or of a type that is
not covered, in whole or in part, by any insurance policies we may
have or that is in excess of the limits of our insurance coverage.
We may not have, or be able to obtain, sufficient capital to pay
any such amounts that may not be covered by our insurance
policies.
We rely on third parties to conduct preclinical and clinical trials
of our product candidates. If these third parties do not
successfully carry out their contractual duties or meet expected
deadlines, we may not be able to obtain regulatory approval for or
commercialize our product candidates and our business could be
substantially harmed.
We
rely, and expect to continue to rely, upon third-party CROs to
execute our preclinical and clinical trials and to monitor and
manage data produced by and relating to those trials. However, we
may not be able to establish arrangements with CROs when needed or
on terms that are acceptable to us, or at all, which could
negatively affect our development efforts with respect to our drug
product candidates and materially harm our business, operations and
prospects.
We will
have only limited control over the activities of the CRO we will
engaged to continue conduct our clinical trials including the
University of Minnesota for our phase 2 clinical trial for
OXS-1550. Nevertheless, we are responsible for ensuring that each
of our studies is conducted in accordance with the applicable
protocol, legal, regulatory and scientific standards, and our
reliance on any CRO does not relieve us of our regulatory
responsibilities. Based on our present expectations, we, our CROs
and our clinical trial sites are required to comply with good
clinical practices, or GCPs, for all of our product candidates in
clinical development. Regulatory authorities enforce GCPs through
periodic inspections of trial sponsors, principal investigators and
trial sites. If we or any of our CROs fail to comply with
applicable GCPs, the clinical data generated in the applicable
trial may be deemed unreliable and the FDA, EMA or comparable
foreign regulatory authorities may require us to perform additional
clinical trials before approving a product candidate for marketing,
which we may not have sufficient cash or other resources to support
and which would delay our ability to generate revenue from any
sales of such product candidate. In addition, our clinical trials
are required to be conducted with product produced in compliance
with current good manufacturing practice requirements, or cGMPs.
Our or our CROs’ failure to comply with those regulations may
require us to repeat clinical trials, which would also require
significant cash expenditures and delay the regulatory approval
process.
Agreements
governing relationships with CROs generally provide those CROs with
certain rights to terminate a clinical trial under specified
circumstances. If a CRO that we have engaged terminates its
relationship with us during the performance of a clinical trial, we
would be forced to seek an engagement with a substitute CRO, which
we may not be able to do on a timely basis or on commercially
reasonable terms, if at all, and the applicable trial would
experience delays or may not be completed. In addition, our CROs
are not our employees, and except for remedies available to us
under any agreements we enter with them, we are unable to control
whether or not they devote sufficient time and resources to our
clinical, nonclinical and preclinical programs. If CROs do not
successfully carry out their contractual duties or obligations or
meet expected deadlines, if they need to be replaced or if the
quality or accuracy of the clinical data they obtain is compromised
due to a failure to adhere to our clinical protocols, regulatory
requirements or for other reasons, our clinical trials may be
extended, delayed or terminated and we may not be able to obtain
regulatory approval for, or successfully commercialize, the
affected product candidates. As a result, our operations and the
commercial prospects for the effected product candidates would be
harmed, our costs could increase and our ability to generate
revenues could be delayed.
We contract with third parties for the supply of product candidates
for clinical testing and expect to contract with third parties for
the manufacturing of our product candidates for large-scale testing
and commercial supply. This reliance on third parties increases the
risk that we will not have sufficient quantities of our product
candidates or products or such quantities at an acceptable cost,
which could delay, prevent or impair our development or
commercialization efforts.
We
anticipate continuing our engagement of third parties to provide
our clinical supply as we advance our product candidates into and
through clinical development. We expect in the future to use third
parties for the manufacture of our product candidates for clinical
testing, as well as for commercial manufacture. We plan to enter
into long-term supply agreements with several manufacturers for
commercial supplies. We may be unable to reach agreement on
satisfactory terms with contract manufacturers to manufacture our
product candidates. Additionally, the facilities to manufacture our
product candidates must be the subject of a satisfactory inspection
before the FDA or other regulatory authorities approve a marketing
authorization for the product candidate manufactured at that
facility. We will depend on these third-party manufacturers for
compliance with the FDA’s and international regulatory
authority requirements for the manufacture of our finished
products. We do not control the manufacturing process of, and are
completely dependent on, our contract manufacturers for compliance
with cGMPs. If our manufacturers cannot successfully manufacture
material that conforms to our specifications and the FDA and other
regulatory authorities’ cGMP requirements, they will not be
able to secure and/or maintain regulatory approval for their
manufacturing facilities. In addition, we have no control over the
ability of our contract manufacturers to maintain adequate quality
control, quality assurance and qualified personnel. If the FDA or a
comparable foreign regulatory authority does not approve these
facilities for the manufacture of our product candidates or if it
withdraws any such approval in the future, we may need to find
alternative manufacturing facilities, which would significantly
impact our ability to develop, obtain regulatory approval for or
market our product candidates, if approved, and may subject us to
recalls or enforcement action for products already on the
market.
If any
of our product candidates are approved and contract manufacturers
fail to deliver the required commercial quantities of finished
product on a timely basis and at commercially reasonable prices,
and we are unable to find one or more replacement manufacturers
capable of production at a substantially equivalent cost, in
substantially equivalent volumes and quality and on a timely basis,
we would likely be unable to meet demand for our products and could
lose potential revenue. It may take several years to establish an
alternative source of supply for our product candidates and to have
any such new source approved by the FDA or any other relevant
regulatory authorities.
We currently have no marketing and sales force. If we are unable to
establish effective marketing and sales capabilities or enter into
agreements with third parties to market and sell our product
candidates, we may not be able to effectively market and sell our
product candidates, if approved, or generate product
revenues.
We
currently do not have a marketing or sales team for the marketing,
sales and distribution of any of our product candidates that are
able to obtain regulatory approval. In order to commercialize any
product candidates, we must build on a territory-by-territory basis
marketing, sales, distribution, managerial and other non-technical
capabilities or make arrangements with third parties to perform
these services, and we may not be successful in doing so. If our
product candidates receive regulatory approval, we intend to
establish an internal sales and marketing team with technical
expertise and supporting distribution capabilities to commercialize
our product candidates, which will be expensive and time consuming
and will require significant attention of our executive officers to
manage. Any failure or delay in the development of our internal
sales, marketing and distribution capabilities would adversely
impact the commercialization of any of our products that we obtain
approval to market. With respect to the commercialization of all or
certain of our product candidates, we may choose to collaborate,
either globally or on a territory-by-territory basis, with third
parties that have direct sales forces and established distribution
systems, either to augment our own sales force and distribution
systems or in lieu of our own sales force and distribution systems.
If we are unable to enter into such arrangements when needed on
acceptable terms or at all, we may not be able to successfully
commercialize any of our product candidates that receive regulatory
approval or any such commercialization may experience delays or
limitations. If we are not successful in commercializing our
product candidates, either on our own or through collaborations
with one or more third parties, our future product revenue will
suffer and we may incur significant additional losses.
Our business and operations would suffer in the event of system
failures.
Despite
the implementation of security measures, our internal computer
systems and those of our contractors and consultants are vulnerable
to damage from computer viruses, unauthorized access, natural
disasters, terrorism, war and telecommunication and electrical
failures. While we have not experienced any such system failure,
accident or security breach to date, if such an event were to occur
and cause interruptions in our operations, it could result in a
material disruption of our drug development programs. For example,
the loss of clinical trial data from completed or ongoing or
planned clinical trials could result in delays in our regulatory
approval efforts and we may incur substantial costs to attempt to
recover or reproduce the data. If any disruption or security breach
resulted in a loss of or damage to our data or applications, or
inappropriate disclosure of confidential or proprietary
information, we could incur liability and/or the further
development of our product candidates could be
delayed.
Our operations are vulnerable to interruption by natural disasters,
power loss, terrorist activity and other events beyond our control,
the occurrence of which could materially harm our
business.
Businesses
located in California have, in the past, been subject to electrical
blackouts as a result of a shortage of available electrical power,
and any future blackouts could disrupt our operations. We are
vulnerable to a major earthquake, wildfire and other natural
disasters, and we have not undertaken a systematic analysis of the
potential consequences to our business as a result of any such
natural disaster and do not have an applicable recovery plan in
place. We do not carry any business interruption insurance that
would compensate us for actual losses from interruption of our
business that may occur, and any losses or damages incurred by us
could cause our business to materially suffer.
We have not held regular annual meetings in the past, and if we are
required by the Delaware Court of Chancery to hold an annual
meeting pursuant to Section 211(c) of the Delaware General
Corporation Law, or the DGCL, it could result in the unanticipated
expenditure of funds, time and other Company
resources.
Section
2.2 of our bylaws provides that an annual meeting shall be held
each year on a date and at a time designated by our board of
directors, and Section 211(b) of the DGCL provides for an annual
meeting of stockholders to be held for the election of directors.
Section 211(c) of the DGCL provides that if there is a failure to
hold the annual meeting for a period of 13 months after the latest
to occur of the organization of the corporation, its last annual
meeting or last action by written consent to elect directors in
lieu of an annual meeting, the Delaware Court of Chancery may order
a meeting to be held upon the application of any stockholder or
director. Section 211(c) also provides that the failure to hold an
annual meeting shall not affect otherwise valid corporate acts or
result in a forfeiture or dissolution of the
corporation.
We have
not held regular annual meetings in the past because a substantial
majority of our stock is owned by a small number of stockholders,
making it easy to obtain written consent in lieu of a meeting when
necessary. In light of our historical liquidity constraints,
handling matters by written consent has allowed our Company to save
on the financial and administrative resources required to prepare
for and hold such annual meetings. To our knowledge, no stockholder
or director has requested our Company’s management to hold
such an annual meeting and no stockholder or director has applied
to the Delaware Court of Chancery seeking an order directing our
company to hold a meeting. However, if one or more stockholders or
directors were to apply to the Delaware Court of Chancery seeking
such an order, and if the Delaware Court of Chancery were to order
an annual meeting before we are prepared to hold one, the
preparation for the annual meeting and the meeting itself could
result in the unanticipated expenditure of funds, time, and other
Company resources.
SPECIAL NOTE REGARDING FORWARD-LOOKING
INFORMATION
Statements
in this prospectus that are not descriptions of historical facts,
including statements regarding our future results of operations and
financial position, business strategy, prospective products,
product approvals, research and development costs, timing and
likelihood of success, plans and objectives of management for
future operations, and future results of anticipated products, are
forward-looking statements that are based on management’s
current expectations and assumptions and are subject to risks and
uncertainties. If such risks or uncertainties materialize or such
assumptions prove incorrect, our business, financial condition,
operating results and market price of our common stock could be
materially negatively affected. In some cases, you can identify
forward-looking statements by terminology including
“anticipates,” “believes,”
“can,” “continue,” “could,”
“estimates,” “expects,”
“intends,” “may,” “plans,”
“potential,” “predicts,”
“should,” “will,” “would” or
the negative thereof or other variations thereon or other
comparable terminology.
We have
based these forward-looking statements on our current expectations,
assumptions, estimates and projections. While we believe these
expectations, assumptions, estimates and projections are
reasonable, such forward-looking statements are only predictions
and involve known and unknown risks and uncertainties, many of
which are beyond our control. These and other important factors,
including those discussed in this prospectus may cause our actual
results, performance or achievements to differ materially from any
future results, performance or achievements expressed or implied by
these forward-looking statements. Factors that could cause actual
results to differ materially from those currently anticipated
include those set forth in the section titled “Risk
Factors” including, without limitation, risks relating
to:
●
Our business is at
an early stage of development and we may not develop therapeutic
products that can be commercialized.
●
We have a history
of operating losses and we expect to continue to incur losses for
the foreseeable future and we may never generate revenue or achieve
profitability.
●
We will need
additional capital to conduct our operations and develop our
products and our ability to obtain the necessary funding is
uncertain.
●
We have identified
material weaknesses in our internal control over financial
reporting, which may negatively impact our ability to accurately
report our financial results or prevent fraud.
As a
result, stockholders could lose confidence in our financials and
other public reporting, which would harm our business and the
trading price of our common stock.
●
If our efforts to
protect the proprietary nature of the intellectual property related
to our technologies are not adequate, we may not be able to compete
effectively in our market and our business would be
harmed.
●
We depend on key
personnel for our continued operations and future success, and a
loss of certain key personnel could significantly hinder our
ability to move forward with our business plan.
●
Clinical drug
development is costly, time-consuming and uncertain, and we may
suffer setbacks in our clinical development program that could harm
our business.
●
We have limited
clinical testing and regulatory capabilities, and human clinical
trials are subject to extensive regulatory requirements, very
expensive, time-consuming and difficult to design and implement.
Our products may fail to achieve necessary safety and efficacy
endpoints during clinical trials, which may limit our ability to
generate revenues from therapeutic products.
●
Our business is
based on novel technologies that are inherently expensive and risky
and may not be understood by or accepted in the marketplace, which
could adversely affect our future value.
We
operate in a very competitive and rapidly changing environment, and
new risks emerge from time to time. As a result, it is not possible
for our management to predict all risks, nor can we assess the
impact of all factors on our business or the extent to which any
factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements we may make. In light of these risks, uncertainties and
assumptions, the forward-looking events and circumstances discussed
in this prospectus may not occur and actual results could differ
materially and adversely from those anticipated or implied in the
forward-looking statements. You are cautioned not to place undue
reliance upon such forward-looking statements as predictions of
future events. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot
guarantee that the future results, levels of activity, performance
or events and circumstances reflected in the forward-looking
statements will be achieved or occur.
Any
forward-looking statement included in this prospectus speaks only
as of the date hereof. Except as required by law, we do not
undertake any obligation to update or revise, or to publicly
announce any update or revision to, any of the forward-looking
statements, whether as a result of new information, future events
or any other reason after the date of this prospectus. For all
forward-looking statements, we claim the protection of the safe
harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995.
Except
as described in any applicable prospectus supplement and in any
free writing prospectuses in connection with a specific offering,
we currently intend to use the net proceeds from the sale of the
securities offered hereby for working capital and other general
corporate purposes, including to develop our products, fund capital
expenditures, make investments in or acquisitions of other
businesses, solutions or technologies or repay a portion of our
outstanding borrowings. We currently have no plan or proposal to
make any particular such investment or acquisition. Pending these
uses, we intend to invest the net proceeds in short-term,
interest-bearing, investment-grade securities.
DESCRIPTION OF SECURITIES WE MAY
OFFER
We may
offer shares of our common stock and preferred stock, various
series of debt securities and warrants to purchase any of such
securities, either individually or in units, from time to time
under this prospectus, together with any applicable prospectus
supplement and related free writing prospectus, at prices and on
terms to be determined by market conditions at the time of
offering. This prospectus provides you with a general description
of the securities we may offer. Each time we offer a type or series
of securities, we will provide a prospectus supplement that will
describe the specific amounts, prices and other important terms of
the securities. We may offer up to $125,000,000 of securities under
this prospectus.
DESCRIPTION OF CAPITAL
STOCK
The
following description of our capital stock, together with any
additional information we include in any applicable prospectus
supplement or any related free writing prospectus, summarizes the
material terms and provisions of our common stock and the preferred
stock that we may offer under this prospectus. While the terms we
have summarized below will apply generally to any future common
stock or preferred stock that we may offer, we will describe the
particular terms of any class or series of these securities in more
detail in the applicable prospectus supplement. For the complete
terms of our common stock and preferred stock, please refer to our
certificate of incorporation and our bylaws that are incorporated
by reference into the registration statement of which this
prospectus is a part or may be incorporated by reference in this
prospectus or any applicable prospectus supplement. The terms of
these securities may also be affected by Delaware General
Corporation Law. The summary below and that contained in any
applicable prospectus supplement or any related free writing
prospectus are qualified in their entirety by reference to our
amended and restated certificate of incorporation and our amended
and restated bylaws.
Common Stock
We are
authorized to issue 750,000,000 shares of common stock, of which
50,117,977 shares were issued and outstanding as of March
14, 2018.
The
holders of common stock are entitled to one vote per share on all
matters submitted to a vote of our stockholders generally and do
not have cumulative voting rights. Accordingly, holders of a
majority of the shares of common stock entitled to vote in any
election of directors may elect all of the directors standing for
election. Subject to preferences that may be applicable to any
preferred stock outstanding at the time, the holders of outstanding
shares of common stock are entitled to receive ratably any
dividends declared by our board of directors out of assets legally
available. Upon our liquidation, dissolution or winding up, holders
of our common stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation
preference of any then-outstanding shares of preferred stock.
Holders of common stock have no preemptive or conversion rights or
other subscription rights. There are no redemption or sinking fund
provisions applicable to the common stock.
All of
the outstanding shares of our common stock are fully paid and
non-assessable. The shares of common stock offered by this
prospectus or upon the conversion of any preferred stock or debt
securities or exercise of any warrants offered pursuant to this
prospectus, when issued and paid for, will also be, fully paid and
non-assessable.
Preferred Stock
We are authorized to issue 15,000,000 shares of preferred stock,
par value $0.001 per share. As of March 14, 2018, there were
1,259,778 shares of our preferred stock outstanding, 96,230 of
which are shares of our Series C Preferred Stock and 1,163,548 of
which are shares of our Series J Preferred
Stock.
Our
board of directors is authorized, without action by the
stockholders, to designate and issue up to 15,000,000 shares of
preferred stock in one or more series. In the past the board has
designated series lettered A through I and issued shares in those
series. As of the date of this prospectus, only Series C and Series
J preferred shares are issued and outstanding. Our board of
directors can fix or alter the rights, preferences and privileges
of the shares of each series and any of its qualifications,
limitations or restrictions, including dividend rights, conversion
rights, voting rights, terms of redemption, liquidation preferences
and the number of shares constituting a class or series. The
issuance of preferred stock could, under certain circumstances,
result in one or more of the following adverse
effects:
●
decreasing the
market price of our common stock.
●
restricting
dividends on our common stock.
●
diluting the voting
power of our common stock.
●
impairing the
liquidation rights of our common stock. or
●
delaying or
preventing a change in control of us without further action by our
stockholders.
Our
board of directors will make any determination to issue such shares
based on its judgment as to our best interests and the best
interests of our stockholders. We have no current plans to issue
any shares of preferred stock.
Series C
On August 26, 1996, we authorized 3,076,923 shares of Series C
Preferred Stock. Shares of Series C Preferred Stock will
have the same voting rights as shares of common stock with each
share of Series J Preferred Stock entitled to one vote at a meeting
of the shareholders of the Corporation. Shares of Series C
Preferred Stock will not be entitled to receive any dividends,
unless and until specifically declared by our board of directors.
The holders of the Series C Preferred Stock will participate, on an
as-converted basis, in any dividends to the holders of common
stock. Each share of the Series C Preferred Stock is convertible
into one share of our common stock at any time at the option of the
holder. As of March 14, 2018, 96,230 shares of Series C Preferred
Stock were issued and outstanding.
Series J
On September 1, 2017, we authorized 2,000,000 shares of Series J
Preferred Stock. Shares of Series J Preferred Stock will
have the same voting rights as shares of common stock with each
share of Series J Preferred Stock entitled to one vote at a meeting
of the shareholders of the Corporation. Shares of Series J
Preferred Stock will not be entitled to receive any dividends,
unless and until specifically declared by our board of directors.
The holders of the Series J Preferred Stock will participate, on an
as-if-converted-to-common stock basis, in any dividends to the
holders of common stock. Each share of the Series J Preferred Stock
is convertible into one share of our common stock at any time at
the option of the holder. As of March 14, 2018, 1,163,548 shares of Series J
Preferred Stock were issued and outstanding.
2018 Private Placement Financing
On
January 22, 2018, we entered into a securities purchase agreement
with certain institutional and other accredited investors relating
to a private placement of our senior convertible notes and warrants
representing the right to acquire a number of shares of our common
stock. Each senior convertible note is convertible into our common
stock, par value, $0.001 per share, at the current conversion price
at any time or times on or after January 23, 2018. Each warrant
represents the right to purchase one share of common stock at a
price of $4.58 per share and are exercisable at any time or times
on or after January 23, 2018. The investors purchased an aggregate
principal amount of $7,760,510 of senior convertible notes and
warrants to purchase 1,694,442 shares of our common
stock.
In
connection with the private placement, we entered into a
registration rights agreement, dated January 22, 2018, with the
investors, pursuant to which we agreed to register for resale by
the investors the shares of common stock issuable upon conversion
of the senior convertible notes and the shares of common stock
issuable upon exercise of the warrants, purchased by the investors
pursuant to the securities purchase agreement. We committed to file
the registration statement no later than March 2, 2018. The
registration rights agreement provides for liquidated damages upon
the occurrence of certain events, including our failure to file the
registration statement or cause it to become effective prior to the
applicable deadlines. The amount of liquidated damages payable to
an investor would be 2.0% of the aggregate amount invested by such
investor for each 30-day period, or pro rata portion thereof,
during which the default continues.
Registration Rights
The
holders of certain shares of common stock outstanding or their
permitted transferees are entitled to various rights with respect
to the registration of these shares under the Securities Act.
Registration of these shares under the Securities Act would result
in these shares becoming fully tradable without restriction under
the Securities Act immediately upon the effectiveness of the
registration, except for shares purchased by
affiliates.
Piggyback Registration Rights
If we
elect to register any of our shares of common stock for any public
offering, the holders of registrable securities are entitled to
include shares of common stock in the registration. However, we may
reduce the number of shares proposed to be registered in an
underwritten offering to an amount that the underwriters determine
will not affect the success of the offering.
Anti-Takeover Provisions Under Our Charter and Bylaws and Delaware
Law
Certain provisions of Delaware law, our amended and restated
certificate of incorporation, and our bylaws contain provisions
that could have the effect of delaying, deferring or discouraging
another party from acquiring control of us. These provisions, which
are summarized below, may have the effect of discouraging coercive
takeover practices and inadequate takeover bids. These provisions
are also designed, in part, to encourage persons seeking to acquire
control of us to first negotiate with our board of directors. We
believe that the benefits of increased protection of our potential
ability to negotiate with an unfriendly or unsolicited acquirer
outweigh the disadvantages of discouraging a proposal to acquire us
because negotiation of these proposals could result in an
improvement of their terms.
Amended and Restated Certificate of Incorporation
Undesignated Preferred Stock.
Our board of directors has the ability to issue preferred stock
with voting or other rights or preferences that could impede the
success of any attempt to change control of us. These and other
provisions may have the effect of deferring hostile takeovers or
delaying changes in control or management of our
company.
Special Meetings of Stockholders. Our bylaws provide that special meetings of our
stockholders may be called only by our chairman of the board, our
president or our board of directors, thus prohibiting a stockholder
from calling a special meeting. This provision might delay the
ability of our stockholders to force consideration of a proposal or
for stockholders controlling a majority of our capital stock to
take any action, including the removal of
directors.
Board Vacancies Filled Only by Majority of
Directors. Vacancies and newly
created seats on our board may be filled only by a majority of the
directors then in office. Only our board of directors may determine
the number of directors on our board. The inability of stockholders
to determine the number of directors or to fill vacancies or newly
created seats on our board of directors makes it more difficult to
change the composition of our board of directors, but these
provisions promote a continuity of existing
management.
No Cumulative Voting. The
Delaware General Corporation Law, or DGCL, provides that
stockholders are not entitled to the right to cumulate votes in the
election of directors unless our amended and restated certificate
of incorporation provides otherwise. Our amended and restated
certificate of incorporation and bylaws do not expressly provide
for cumulative voting.
Directors Removed Only by Special Meeting of
Stockholders. A director can
only be removed by the affirmative vote of a majority of the votes
of the issued and outstanding stock entitled to vote for the
election of directors of the corporation given at a special meeting
of the stockholders called and held for this
purpose.
Amendment of Charter Provisions. In order to amend certain of the above
provisions in our amended and restated certificate of incorporation
and our bylaws, the board of directors is expressly authorized to
adopt, alter or repeal the bylaws, subject to the rights of the
stockholders entitled to vote. Stockholders can vote at any
stockholder meeting and repeal, alter, or amend the bylaws by the
affirmative vote of a majority of the stockholders entitled to vote
in such meeting.
Delaware Anti-takeover Statute
We are subject to Section 203 of the DGCL. 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
after the date of the transaction in which the person became an
interest stockholder, unless the business combination is approved
in a prescribed manner. A “business combination”
includes mergers, asset sales and other transactions in which the
interested stockholder receives or could receive a financial
benefit on other than a pro rata basis with other stockholders. An
“interested stockholder” is a person who, together with
affiliates and associates, owns, or within three years did own, 15%
or more of the corporation’s outstanding voting stock. This
provision has an anti-takeover effect with respect to transactions
not approved in advance by our board of directors, including
discouraging takeover attempts that might result in a premium over
the market price for the shares of our market price. With approval
of our stockholders, we could amend our amended and restated
certificate of incorporation in the future to avoid the
restrictions imposed by this anti-takeover law.
The provisions of Delaware law and our amended and restated
certificate of incorporation could have the effect of discouraging
others from attempting hostile takeovers and, as a consequence,
they may also inhibit temporary fluctuations in the market price of
our common stock that often result from actual or rumored hostile
takeover attempts. These provisions may also have the effect of
preventing changes in our management. It is possible that these
provisions could make it more difficult to accomplish transactions
that stockholders may otherwise deem to be in their best
interests.
Transfer Agent and Registrar
Our
transfer agent and registrar for our capital stock is
ComputerShare. The transfer agent’s address is 350 Indiana Street,
Golden, Colorado 80401, and its telephone number is (303)
262-0600.
Listing
Our
common stock is listed on the OTCQB under the symbol
“GTBP.” The last reported sale price of our common
stock on the OTCQB on March 20,
2018, was $1.86 per
share. Our common stock is also quoted on several European-based
exchanges including Berlin (GTBP.BE), Frankfurt (GTBP.DE), the
Euronext (GTBP.NX) and Paris (GTBP.PA).
DESCRIPTION OF DEBT
SECURITIES
The
following description, together with the additional information we
include in any applicable prospectus supplements or free writing
prospectuses, summarizes the material terms and provisions of the
debt securities that we may offer under this prospectus. We may
issue debt securities, in one or more series, as either senior or
subordinated debt or as senior or subordinated convertible debt.
While the terms we have summarized below will apply generally to
any future debt securities we may offer under this prospectus, we
will describe the particular terms of any debt securities that we
may offer in more detail in the applicable prospectus supplement or
free writing prospectus. The terms of any debt securities we offer
under a prospectus supplement may differ from the terms we describe
below. However, no prospectus supplement shall fundamentally change
the terms that are set forth in this prospectus or offer a security
that is not registered and described in this prospectus at the time
of its effectiveness. As of the date of this prospectus, we have no
outstanding registered debt securities. Unless the context requires
otherwise, whenever we refer to the “indentures,” we also are referring to any
supplemental indentures that specify the terms of a particular
series of debt securities.
We will
issue any senior debt securities under the senior indenture that we
will enter into with the trustee named in the senior indenture. We
will issue any subordinated debt securities under the subordinated
indenture and any supplemental indentures that we will enter into
with the trustee named in the subordinated indenture. We have filed
forms of these documents as exhibits to the registration statement,
of which this prospectus is a part, and supplemental indentures and
forms of debt securities containing the terms of the debt
securities being offered will be filed as exhibits to the
registration statement of which this prospectus is a part or will
be incorporated by reference from reports that we file with the
SEC.
The
indentures will be qualified under the Trust Indenture Act of 1939,
as amended, or the Trust Indenture Act. We use the term
“trustee” to refer to either the trustee
under the senior indenture or the trustee under the subordinated
indenture, as applicable.
The
following summaries of material provisions of the senior debt
securities, the subordinated debt securities and the indentures are
subject to, and qualified in their entirety by reference to, all of
the provisions of the indenture and any supplemental indentures
applicable to a particular series of debt securities. We urge you
to read the applicable prospectus supplements and any related free
writing prospectuses related to the debt securities that we may
offer under this prospectus, as well as the complete indentures
that contains the terms of the debt securities. Except as we may
otherwise indicate, the terms of the senior indenture and the
subordinated indenture are identical.
General
The
terms of each series of debt securities will be established by or
pursuant to a resolution of our board of directors and set forth or
determined in the manner provided in an officers’ certificate or by a supplemental
indenture. Debt securities may be issued in separate series without
limitation as to aggregate principal amount. We may specify a
maximum aggregate principal amount for the debt securities of any
series. We will describe in the applicable prospectus supplement
the terms of the series of debt securities being offered,
including:
●
the principal
amount being offered, and if a series, the total amount authorized
and the total amount outstanding;
●
any limit on the
amount that may be issued;
●
whether or not we
will issue the series of debt securities in global form, and, if
so, the terms and who the depositary will be;
●
whether and under
what circumstances, if any, we will pay additional amounts on any
debt securities held by a person who is not a United States person
for tax purposes, and whether we can redeem the debt securities if
we have to pay such additional amounts;
●
the annual interest
rate, which may be fixed or variable, or the method for determining
the rate and the date interest will begin to accrue, the dates
interest will be payable and the regular record dates for interest
payment dates or the method for determining such
dates;
●
whether the debt
securities will be secured or unsecured, and the terms of any
secured debt;
●
the terms of the
subordination of any series of subordinated debt;
●
the place where
payments will be made;
●
restrictions on
transfer, sale or other assignment, if any;
●
our right, if any,
to defer payment of interest and the maximum length of any such
deferral period;
●
the date, if any,
after which, and the price at which, we may, at our option, redeem
the series of debt securities pursuant to any optional or
provisional redemption provisions and the terms of those redemption
provisions;
●
provisions for a
sinking fund purchase or other analogous fund, if any, including
the date, if any, on which, and the price at which we are
obligated, pursuant thereto or otherwise, to redeem, or at the
holder’s option, to purchase, the series of debt securities
and the currency or currency unit in which the debt securities are
payable;
●
whether the
indenture will restrict our ability or the ability of our
subsidiaries to:
●
incur additional
indebtedness;
●
issue additional
securities;
●
pay dividends or
make distributions in respect of our capital stock or the capital
stock of our subsidiaries;
●
place restrictions
on our subsidiaries’ ability to pay dividends, make
distributions or transfer assets;
●
make investments or
other restricted payments;
●
sell or otherwise
dispose of assets;
●
enter into
sale–leaseback transactions;
●
engage in
transactions with stockholders or affiliates;
●
issue or sell stock
of our subsidiaries; or
●
effect a
consolidation or merger;
●
whether the
indenture will require us to maintain any interest coverage, fixed
charge, cash flow-based, asset-based or other financial
ratios;
●
a discussion of
certain material or special United States federal income tax
considerations applicable to the debt securities;
●
information
describing any book-entry features;
●
the applicability
of the provisions in the indenture on discharge;
●
whether the debt
securities are to be offered at a price such that they will be
deemed to be offered at an “original issue discount” as
defined in paragraph (a) of Section 1273 of the Internal Revenue
Code of 1986, as amended;
●
the denominations
in which we will issue the series of debt securities, if other than
denominations of $1,000 and any integral multiple
thereof;
●
the currency of
payment of debt securities if other than U.S. dollars and the
manner of determining the equivalent amount in U.S. dollars;
and
●
any other specific
terms, preferences, rights or limitations of, or restrictions on,
the debt securities, including any additional events of default or
covenants provided with respect to the debt securities, and any
terms that may be required by us or advisable under applicable laws
or regulations.
Conversion or Exchange Rights
We will
set forth in the applicable prospectus supplement the terms under
which a series of debt securities may be convertible into or
exchangeable for our common stock, our preferred stock or other
securities (including securities of a third party). We will include
provisions as to whether conversion or exchange is mandatory, at
the option of the holder or at our option. We may include
provisions pursuant to which the number of shares of our common
stock, our preferred stock or other securities (including
securities of a third party) that the holders of the series of debt
securities receive would be subject to adjustment.
Consolidation, Merger or Sale
Unless
we provide otherwise in the prospectus supplement applicable to a
particular series of debt securities, the indentures will not
contain any covenant that restricts our ability to merge or
consolidate, or sell, convey, transfer or otherwise dispose of all
or substantially all of our assets. However, any successor to or
acquirer of such assets must assume all of our obligations under
the indentures or the debt securities, as appropriate. If the debt
securities are convertible into or exchangeable for our other
securities or securities of other entities, the person with whom we
consolidate or merge or to whom we sell all of our property must
make provisions for the conversion of the debt securities into
securities that the holders of the debt securities would have
received if they had converted the debt securities before the
consolidation, merger or sale.
Events of Default Under the Indenture
Unless
we provide otherwise in the prospectus supplement applicable to a
particular series of debt securities, the following are events of
default under the indentures with respect to any series of debt
securities that we may issue:
●
if we fail to pay
interest when due and payable and our failure continues for 90 days
and the time for payment has not been extended;
●
if we fail to pay
the principal, premium or sinking fund payment, if any, when due
and payable at maturity, upon redemption or repurchase or
otherwise, and the time for payment has not been
extended;
●
if we fail to
observe or perform any other covenant contained in the debt
securities or the indentures, other than a covenant specifically
relating to another series of debt securities, and our failure
continues for 90 days after we receive notice from the trustee or
we and the trustee receive notice from the holders of at least 25%
in aggregate principal amount of the outstanding debt securities of
the applicable series; and
●
if specified events
of bankruptcy, insolvency or reorganization occur.
We will
describe in each applicable prospectus supplement any additional
events of default relating to the relevant series of debt
securities.
If an
event of default with respect to debt securities of any series
occurs and is continuing, other than an event of default specified
in the last bullet point above, the trustee or the holders of at
least 25% in aggregate principal amount of the outstanding debt
securities of that series, by notice to us in writing, and to the
trustee if notice is given by such holders, may declare the unpaid
principal, premium, if any, and accrued interest, if any, due and
payable immediately. If an event of default arises because of the
occurrence of certain specified bankruptcy, insolvency or
reorganization events, the unpaid principal, premium, if any, and
accrued interest, if any, of each issue of debt securities then
outstanding shall be due and payable without any notice or other
action on the part of the trustee or any holder.
The
holders of a majority in principal amount of the outstanding debt
securities of an affected series may waive any default or event of
default with respect to the series and its consequences, except
defaults or events of default regarding payment of principal,
premium, if any, or interest, unless we have cured the default or
event of default in accordance with the indenture. Any waiver shall
cure the default or event of default.
Subject
to the terms of the indentures, if an event of default under an
indenture shall occur and be continuing, the trustee will be under
no obligation to exercise any of its rights or powers under such
indenture at the request or direction of any of the holders of the
applicable series of debt securities, unless such holders have
offered the trustee reasonable indemnity or security satisfactory
to it against any loss, liability or expense. The holders of a
majority in principal amount of the outstanding debt securities of
any series will have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the
trustee, or exercising any trust or power conferred on the trustee,
with respect to the debt securities of that series, provided
that:
●
the direction so
given by the holder is not in conflict with any law or the
applicable indenture; and
●
subject to its
duties under the Trust Indenture Act, the trustee need not take any
action that might involve it in personal liability or might be
unduly prejudicial to the holders not involved in the
proceeding.
The
indentures provide that if an event of default has occurred and is
continuing, the trustee will be required in the exercise of its
powers to use the degree of care that a prudent person would use in
the conduct of its own affairs. The trustee, however, may refuse to
follow any direction that conflicts with law or the indenture, or
that the trustee determines is unduly prejudicial to the rights of
any other holder of the relevant series of debt securities, or that
would involve the trustee in personal liability. Prior to taking
any action under the indentures, the trustee will be entitled to
indemnification against all costs, expenses and liabilities that
would be incurred by taking or not taking such action.
A
holder of the debt securities of any series will have the right to
institute a proceeding under the indentures or to appoint a
receiver or trustee, or to seek other remedies only
if:
●
the holder has
given written notice to the trustee of a continuing event of
default with respect to that series;
●
the holders of at
least 25% in aggregate principal amount of the outstanding debt
securities of that series have made a written request and such
holders have offered reasonable indemnity to the trustee or
security satisfactory to it against any loss, liability or expense
or to be incurred in compliance with instituting the proceeding as
trustee; and
●
the trustee does
not institute the proceeding, and does not receive from the holders
of a majority in aggregate principal amount of the outstanding debt
securities of that series other conflicting directions within 90
days after the notice, request and offer.
These
limitations do not apply to a suit instituted by a holder of debt
securities if we default in the payment of the principal, premium,
if any, or interest on, the debt securities, or other defaults that
may be specified in the applicable prospectus
supplement.
We will
periodically file statements with the trustee regarding our
compliance with specified covenants in the indentures. The
indentures provide that if a default occurs and is continuing and
is actually known to a responsible officer of the trustee, the
trustee must mail to each holder notice of the default within the
earlier of 90 days after it occurs and 30 days after it is known by
a responsible officer of the trustee or written notice of it is
received by the trustee, unless such default has been cured or
waived. Except in the case of a default in the payment of principal
or premium of, or interest on, any debt security or certain other
defaults specified in an indenture, the trustee shall be protected
in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of
directors, or responsible officers of the trustee, in good faith
determine that withholding notice is in the best interests of
holders of the relevant series of debt securities.
Modification of Indenture; Waiver
Subject
to the terms of the indenture for any series of debt securities
that we may issue, we and the trustee may change an indenture
without the consent of any holders with respect to the following
specific matters:
●
to fix any
ambiguity, defect or inconsistency in the indenture;
●
to comply with the
provisions described above under “Description of Debt
Securities—Consolidation, Merger or Sale;”
●
to comply with any
requirements of the SEC in connection with the qualification of any
indenture under the Trust Indenture Act;
●
to add to, delete
from or revise the conditions, limitations and restrictions on the
authorized amount, terms or purposes of issue, authentication and
delivery of debt securities, as set forth in the
indenture;
●
to provide for the
issuance of, and establish the form and terms and conditions of,
the debt securities of any series as provided under
“Description of Debt Securities—General,” to
establish the form of any certifications required to be furnished
pursuant to the terms of the indenture or any series of debt
securities, or to add to the rights of the holders of any series of
debt securities;
●
to evidence and
provide for the acceptance of appointment hereunder by a successor
trustee;
●
to provide for
uncertificated debt securities and to make all appropriate changes
for such purpose;
●
to add such new
covenants, restrictions, conditions or provisions for the benefit
of the holders, to make the occurrence, or the occurrence and the
continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an event of default or to
surrender any right or power conferred to us in the indenture;
or
●
to change anything
that does not adversely affect the interests of any holder of debt
securities of any series in any material respect.
In
addition, under the indentures, the rights of holders of a series
of debt securities may be changed by us and the trustee with the
written consent of the holders of at least a majority in aggregate
principal amount of the outstanding debt securities of each series
that is affected. However, subject to the terms of the indenture
for any series of debt securities that we may issue or otherwise
provided in the prospectus supplement applicable to a particular
series of debt securities, we and the trustee may only make the
following changes with the consent of each holder of any
outstanding debt securities affected:
●
extending the
stated maturity of the series of debt securities;
●
reducing the
principal amount, reducing the rate of or extending the time of
payment of interest, or reducing any premium payable upon the
redemption or repurchase of any debt securities; or
●
reducing the
percentage of debt securities, the holders of which are required to
consent to any amendment, supplement, modification or
waiver.
Discharge
Each
indenture provides that, subject to the terms of the indenture and
any limitation otherwise provided in the prospectus supplement
applicable to a particular series of debt securities, we may elect
to be discharged from our obligations with respect to one or more
series of debt securities, except for specified obligations,
including obligations to:
●
register the
transfer or exchange of debt securities of the series;
●
replace stolen,
lost or mutilated debt securities of the series;
●
maintain paying
agencies;
●
hold monies for
payment in trust;
●
recover excess
money held by the trustee;
●
compensate and
indemnify the trustee; and
●
appoint any
successor trustee.
In
order to exercise our rights to be discharged, we must deposit with
the trustee money or government obligations sufficient to pay all
the principal of, and any premium and interest on, the debt
securities of the series on the dates payments are
due.
Form, Exchange and Transfer
We will
issue the debt securities of each series only in fully registered
form without coupons and, unless we otherwise specify in the
applicable prospectus supplement, in denominations of $1,000 and
any integral multiple thereof. The indentures provide that we may
issue debt securities of a series in temporary or permanent global
form and as book-entry securities that will be deposited with, or
on behalf of, The Depository Trust Company or another depositary
named by us and identified in a prospectus supplement with respect
to that series. See “Legal Ownership of
Securities” below for a
further description of the terms relating to any book-entry
securities.
At the
option of the holder, subject to the terms of the indentures and
the limitations applicable to global securities described in the
applicable prospectus supplement, the holder of the debt securities
of any series can exchange the debt securities for other debt
securities of the same series, in any authorized denomination and
of like tenor and aggregate principal amount.
Subject
to the terms of the indentures and the limitations applicable to
global securities set forth in the applicable prospectus
supplement, holders of the debt securities may present the debt
securities for exchange or for registration of transfer, duly
endorsed or with the form of transfer endorsed thereon duly
executed if so required by us or the security registrar, at the
office of the security registrar or at the office of any transfer
agent designated by us for this purpose. Unless otherwise provided
in the debt securities that the holder presents for transfer or
exchange, we will make no service charge for any registration of
transfer or exchange, but we may require payment of any taxes or
other governmental charges.
We will
name in the applicable prospectus supplement the security
registrar, and any transfer agent in addition to the security
registrar, that we initially designate for any debt securities. We
may at any time designate additional transfer agents or rescind the
designation of any transfer agent or approve a change in the office
through which any transfer agent acts, except that we will be
required to maintain a transfer agent in each place of payment for
the debt securities of each series.
If we
elect to redeem the debt securities of any series, we will not be
required to:
●
issue, register the
transfer of, or exchange any debt securities of that series during
a period beginning at the opening of business 15 days before the
day of mailing of a notice of redemption of any debt securities
that may be selected for redemption and ending at the close of
business on the day of the mailing; or
●
register the
transfer of or exchange any debt securities so selected for
redemption, in whole or in part, except the unredeemed portion of
any debt securities we are redeeming in part.
Information Concerning the Trustee
The
trustee, other than during the occurrence and continuance of an
event of default under an indenture, undertakes to perform only
those duties as are specifically set forth in the applicable
indenture and is under no obligation to exercise any of the powers
given it by the indentures at the request of any holder of debt
securities unless it is offered reasonable security and indemnity
against the costs, expenses and liabilities that it might incur.
However, upon an event of default under an indenture, the trustee
must use the same degree of care as a prudent person would exercise
or use in the conduct of his or her own affairs.
Payment and Paying Agents
Unless
we otherwise indicate in the applicable prospectus supplement, we
will make payment of the interest on any debt securities on any
interest payment date to the person in whose name the debt
securities, or one or more predecessor securities, are registered
at the close of business on the regular record date for the
interest payment.
We will
pay principal of and any premium and interest on the debt
securities of a particular series at the office of the paying
agents designated by us, except that unless we otherwise indicate
in the applicable prospectus supplement, we will make interest
payments by check that we will mail to the holder or by wire
transfer to certain holders. Unless we otherwise indicate in the
applicable prospectus supplement, we will designate the corporate
trust office of the trustee as our sole paying agent for payments
with respect to debt securities of each series. We will name in the
applicable prospectus supplement any other paying agents that we
initially designate for the debt securities of a particular series.
We will maintain a paying agent in each place of payment for the
debt securities of a particular series.
All
money we pay to a paying agent or the trustee for the payment of
the principal of or any premium or interest on any debt securities
that remains unclaimed at the end of two years after such
principal, premium or interest has become due and payable will be
repaid to us, and the holder of the debt security thereafter may
look only to us for payment thereof.
Governing Law
The
indentures and the debt securities will be governed by and
construed in accordance with the laws of the State of New York,
except to the extent that the Trust Indenture Act
applies.
Ranking Debt Securities
The
subordinated debt securities will be unsecured and will be
subordinate and junior in priority of payment to our senior secured
indebtedness and certain other indebtedness to the extent described
in a prospectus supplement. The subordinated indenture does not
limit the amount of subordinated debt securities that we may issue.
It also does not limit us from issuing any other secured or
unsecured debt.
The
senior debt securities will be unsecured and will rank equally in
right of payment to all our other senior unsecured debt and
subordinate and junior in priority of payment to our senior secured
indebtedness. The senior indenture does not limit the amount of
senior debt securities that we may issue. It also does not limit us
from issuing any other secured or unsecured debt.
The
following description, together with the additional information we
may include in any applicable prospectus supplements and free
writing prospectuses, summarizes the material terms and provisions
of the warrants that we may offer under this prospectus, which may
consist of warrants to purchase common stock, preferred stock or
debt securities and may be issued in one or more series. Warrants
may be offered independently or together with common stock,
preferred stock or debt securities offered by any prospectus
supplement, and may be attached to or separate from those
securities. While the terms we have summarized below will apply
generally to any warrants that we may offer under this prospectus,
we will describe the particular terms of any series of warrants
that we may offer in more detail in the applicable prospectus
supplement and any applicable free writing prospectus. The terms of
any warrants offered under a prospectus supplement may differ from
the terms described below. However, no prospectus supplement will
fundamentally change the terms that are set forth in this
prospectus or offer a security that is not registered and described
in this prospectus at the time of its effectiveness.
We will
issue the warrants under a warrant agreement that we will enter
into with a warrant agent to be selected by us. The warrant agent
will act solely as an agent of ours in connection with the warrants
and will not act as an agent for the holders or beneficial owners
of the warrants. We will file as exhibits to the registration
statement of which this prospectus is a part, or will incorporate
by reference from a current report on Form 8-K that we file with
the SEC, the form of warrant agreement, including a form of warrant
certificate, that describes the terms of the particular series of
warrants we are offering before the issuance of the related series
of warrants. The following summaries of material provisions of the
warrants and the warrant agreements are subject to, and qualified
in their entirety by reference to, all the provisions of the
warrant agreement and warrant certificate applicable to a
particular series of warrants. We urge you to read the applicable
prospectus supplement and any applicable free writing prospectus
related to the particular series of warrants that we sell under
this prospectus, as well as the complete warrant agreements and
warrant certificates that contain the terms of the
warrants.
General
We will
describe in the applicable prospectus supplement the terms relating
to a series of warrants, including:
●
the offering price
and aggregate number of warrants offered;
●
the currency for
which the warrants may be purchased;
●
if applicable, the
designation and terms of the securities with which the warrants are
issued and the number of warrants issued with each such security or
each principal amount of such security;
●
if applicable, the
date on and after which the warrants and the related securities
will be separately transferable;
●
in the case of
warrants to purchase debt securities, the principal amount of debt
securities purchasable upon exercise of one warrant and the price
at, and currency in which, this principal amount of debt securities
may be purchased upon such exercise;
●
in the case of
warrants to purchase common stock or preferred stock, the number of
shares of common stock or preferred stock, as the case may be,
purchasable upon the exercise of one warrant and the price at which
these shares may be purchased upon such exercise;
●
the effect of any
merger, consolidation, sale or other disposition of our business on
the warrant agreements and the warrants;
●
the terms of any
rights to redeem or call the warrants;
●
any provisions for
changes to or adjustments in the exercise price or number of
securities issuable upon exercise of the warrants;
●
the dates on which
the right to exercise the warrants will commence and
expire;
●
the manner in which
the warrant agreements and warrants may be modified;
●
United States
federal income tax consequences of holding or exercising the
warrants;
●
the terms of the
securities issuable upon exercise of the warrants;
●
the amount of
warrants outstanding
●
any provisions for
changes to or adjustments in the exercise price of the warrants;
and
●
any other specific
terms, preferences, rights or limitations of or restrictions on the
warrants.
Before
exercising their warrants, holders of warrants will not have any of
the rights of holders of the securities purchasable upon such
exercise, including:
●
in the case of
warrants to purchase debt securities, the right to receive payments
of principal of, or premium, if any, or interest on, the debt
securities purchasable upon exercise or to enforce covenants in the
applicable indenture; or
●
in the case of
warrants to purchase common stock or preferred stock, the right to
receive dividends, if any, or, payments upon our liquidation,
dissolution or winding up or to exercise voting rights, if
any.
Exercise of Warrants
Each
warrant will entitle the holder to purchase the securities that we
specify in the applicable prospectus supplement at the exercise
price that we describe in the applicable prospectus supplement.
Unless we otherwise specify in the applicable prospectus
supplement, holders of the warrants may exercise the warrants at
any time up to the specified time on the expiration date that we
set forth in the applicable prospectus supplement. After the close
of business on the expiration date, unexercised warrants will
become void.
Holders
of the warrants may exercise the warrants by delivering the warrant
certificate representing the warrants to be exercised together with
specified information, and paying the required amount to the
warrant agent in immediately available funds, as provided in the
applicable prospectus supplement. We will set forth on the reverse
side of the warrant certificate and in the applicable prospectus
supplement the information that the holder of the warrant will be
required to deliver to the warrant agent.
Upon
receipt of the required payment and the warrant certificate
properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the
applicable prospectus supplement, we will issue and deliver the
securities purchasable upon such exercise. If fewer than all of the
warrants represented by the warrant certificate are exercised, then
we will issue a new warrant certificate for the remaining amount of
warrants. If we so indicate in the applicable prospectus
supplement, holders of the warrants may surrender securities as all
or part of the exercise price for warrants.
Enforceability of Rights by Holders of Warrants
Each
warrant agent will act solely as our agent under the applicable
warrant agreement and will not assume any obligation or
relationship of agency or trust with any holder of any warrant. A
single bank or trust company may act as warrant agent for more than
one issue of warrants. A warrant agent will have no duty or
responsibility in case of any default by us under the applicable
warrant agreement or warrant, including any duty or responsibility
to initiate any proceedings at law or otherwise, or to make any
demand upon us. Any holder of a warrant may, without the consent of
the related warrant agent or the holder of any other warrant,
enforce by appropriate legal action its right to exercise, and
receive the securities purchasable upon exercise of, its
warrants.
The
following description, together with the additional information we
may include in any applicable prospectus supplements and free
writing prospectuses, summarizes the material terms and provisions
of the units that we may offer under this prospectus. While the
terms we have summarized below will apply generally to any units
that we may offer under this prospectus, we will describe the
particular terms of any series of units in more detail in the
applicable prospectus supplement. The terms of any units offered
under a prospectus supplement may differ from the terms described
below. However, no prospectus supplement will fundamentally change
the terms that are set forth in this prospectus or offer a security
that is not registered and described in this prospectus at the time
of its effectiveness.
We will
file as exhibits to the registration statement of which this
prospectus is a part, or will incorporate by reference from a
current report on Form 8-K that we file with the SEC, the form of
unit agreement that describes the terms of the series of units we
are offering, and any supplemental agreements, before the issuance
of the related series of units. The following summaries of material
terms and provisions of the units are subject to, and qualified in
their entirety by reference to, all the provisions of the unit
agreement and any supplemental agreements applicable to a
particular series of units. We urge you to read the applicable
prospectus supplements related to the particular series of units
that we sell under this prospectus, as well as the complete unit
agreement and any supplemental agreements that contain the terms of
the units.
General
We may
issue units comprising one or more debt securities, shares of
common stock, shares of preferred stock and warrants in any
combination. Each unit will be issued so that the holder of the
unit is also the holder of each security included in the unit.
Thus, the holder of a unit will have the rights and obligations of
a holder of each included security. The unit agreement under which
a unit is issued may provide that the securities included in the
unit may not be held or transferred separately, at any time or at
any time before a specified date.
We will
describe in the applicable prospectus supplement the terms of the
series of units, including:
●
the designation and
terms of the units and of the securities constituting the units,
including whether and under what circumstances those securities may
be held or transferred separately;
●
any provisions of
the governing unit agreement that differ from those described
below; and
●
any provisions for
the issuance, payment, settlement, transfer or exchange of the
units or of the securities comprising the units.
The
provisions described in this section, as well as those described
under “Description of
Capital Stock,”
“Description of Debt
Securities” and
“Description of
Warrants” will apply to
each unit and to any common stock, preferred stock, debt security
or warrant included in each unit, respectively.
Issuance in Series
We may
issue units in such amounts and in numerous distinct series as we
determine.
Enforceability of Rights by Holders of Units
Each
unit agent will act solely as our agent under the applicable unit
agreement and will not assume any obligation or relationship of
agency or trust with any holder of any unit. A single bank or trust
company may act as unit agent for more than one series of units. A
unit agent will have no duty or responsibility in case of any
default by us under the applicable unit agreement or unit,
including any duty or responsibility to initiate any proceedings at
law or otherwise, or to make any demand upon us. Any holder of a
unit may, without the consent of the related unit agent or the
holder of any other unit, enforce by appropriate legal action its
rights as holder under any security included in the
unit.
We, the
unit agents and any of their agents may treat the registered holder
of any unit certificate as an absolute owner of the units evidenced
by that certificate for any purpose and as the person entitled to
exercise the rights attaching to the units so requested, despite
any notice to the contrary. See “Legal Ownership of
Securities.”
LEGAL OWNERSHIP OF
SECURITIES
We can
issue securities in registered form or in the form of one or more
global securities. We describe global securities in greater detail
below. We refer to those persons who have securities registered in
their own names on the books that we or any applicable trustee or
depositary or warrant agent maintain for this purpose as the
“holders” of those securities. These persons
are the legal holders of the securities. We refer to those persons
who, indirectly through others, own beneficial interests in
securities that are not registered in their own names, as
“indirect
holders” of those
securities. As we discuss below, indirect holders are not legal
holders, and investors in securities issued in book-entry form or
in street name will be indirect holders.
Book-Entry Holders
We may
issue securities in book-entry form only, as we will specify in the
applicable prospectus supplement. This means securities may be
represented by one or more global securities registered in the name
of a financial institution that holds them as depositary on behalf
of other financial institutions that participate in the
depositary’s book-entry
system. These participating institutions, which are referred to as
participants, in turn, hold beneficial interests in the securities
on behalf of themselves or their customers.
Only
the person in whose name a security is registered is recognized as
the holder of that security. Global securities will be registered
in the name of the depositary or its participants. Consequently,
for global securities, we will recognize only the depositary as the
holder of the securities, and we will make all payments on the
securities to the depositary. The depositary passes along the
payments it receives to its participants, which in turn pass the
payments along to their customers who are the beneficial owners.
The depositary and its participants do so under agreements they
have made with one another or with their customers; they are not
obligated to do so under the terms of the securities.
As a
result, investors in a global security will not own securities
directly. Instead, they will own beneficial interests in a global
security, through a bank, broker or other financial institution
that participates in the depositary’s book-entry system or holds an
interest through a participant. As long as the securities are
issued in global form, investors will be indirect holders, and not
legal holders, of the securities.
Street-name Holders
We may
terminate a global security or issue securities that are not issued
in global form. In these cases, investors may choose to hold their
securities in their own names or in “street name.” Securities held by an investor in
street name would be registered in the name of a bank, broker or
other financial institution that the investor chooses, and the
investor would hold only a beneficial interest in those securities
through an account he or she maintains at that
institution.
For
securities held in street name, we or any applicable trustee or
depositary will recognize only the intermediary banks, brokers and
other financial institutions in whose names the securities are
registered as the holders of those securities, and we or any such
trustee or depositary will make all payments on those securities to
them. These institutions pass along the payments they receive to
their customers who are the beneficial owners, but only because
they agree to do so in their customer agreements or because they
are legally required to do so. Investors who hold securities in
street name will be indirect holders, not legal holders, of those
securities.
Legal Holders
Our
obligations, as well as the obligations of any applicable trustee
or third party employed by us or a trustee, run only to the legal
holders of the securities. We do not have obligations to investors
who hold beneficial interests in global securities, in street name
or by any other indirect means. This will be the case whether an
investor chooses to be an indirect holder of a security or has no
choice because we are issuing the securities only in global form.
For example, once we make a payment or give a notice to the holder,
we have no further responsibility for the payment or notice even if
that holder is required, under agreements with its participants or
customers or by law, to pass it along to the indirect holders but
does not do so. Similarly, we may want to obtain the approval of
the holders to amend an indenture, to relieve us of the
consequences of a default or of our obligation to comply with a
particular provision of an indenture, or for other purposes. In
such an event, we would seek approval only from the legal holders,
and not the indirect holders, of the securities. Whether and how
the legal holders contact the indirect holders is up to the legal
holders.
Special Considerations for Indirect Holders
If you
hold securities through a bank, broker or other financial
institution, either in book-entry form because the securities are
represented by one or more global securities or in street name, you
should check with your own institution to find out:
●
how it handles
securities payments and notices;
●
whether it imposes
fees or charges;
●
how it would handle
a request for the holders’ consent, if ever
required;
●
whether and how you
can instruct it to send you securities registered in your own name
so you can be a legal holder, if that is permitted in the
future;
●
how it would
exercise rights under the securities if there were a default or
other event triggering the need for holders to act to protect their
interests; and
●
if the securities
are in book-entry form, how the depositary’s rules and
procedures will affect these matters.
Global Securities
A
global security is a security that represents one or any other
number of individual securities held by a depositary. Generally,
all securities represented by the same global securities will have
the same terms.
Each
security issued in book-entry form will be represented by a global
security that we issue to, deposit with and register in the name of
a financial institution or its nominee that we select. The
financial institution that we select for this purpose is called the
depositary. Unless we specify otherwise in the applicable
prospectus supplement, The Depository Trust Company, New York, New
York, known as DTC, will be the depositary for all securities
issued in book-entry form.
A
global security may not be transferred to or registered in the name
of anyone other than the depositary, its nominee or a successor
depositary, unless special termination situations arise. We
describe those situations below under “—Special Situations When A
Global Security Will Be Terminated.” As a result of these arrangements,
the depositary, or its nominee, will be the sole registered owner
and legal holder of all securities represented by a global
security, and investors will be permitted to own only beneficial
interests in a global security. Beneficial interests must be held
by means of an account with a broker, bank or other financial
institution that in turn has an account with the depositary or with
another institution that does. Thus, an investor whose security is
represented by a global security will not be a legal holder of the
security, but only an indirect holder of a beneficial interest in
the global security.
If the
prospectus supplement for a particular security indicates that the
security will be issued as a global security, then the security
will be represented by a global security at all times unless and
until the global security is terminated. If termination occurs, we
may issue the securities through another book-entry clearing system
or decide that the securities may no longer be held through any
book-entry clearing system.
Special Considerations For Global Securities
●
As an indirect
holder, an investor’s
rights relating to a global security will be governed by the
account rules of the investor’s financial institution and of the
depositary, as well as general laws relating to securities
transfers. We do not recognize an indirect holder as a holder of
securities and instead deal only with the depositary that holds the
global security.
●
If securities are
issued only as global securities, an investor should be aware of
the following:
●
an investor cannot
cause the securities to be registered in his or her name, and
cannot obtain non-global certificates for his or her interest in
the securities, except in the special situations we describe
below;
●
an investor will be
an indirect holder and must look to such investor’s own bank
or broker for payments on the securities and protection of such
investor’s legal rights relating to the securities, as we
describe above;
●
an investor may not
be able to sell interests in the securities to some insurance
companies and to other institutions that are required by law to own
their securities in non-book-entry form;
●
an investor may not
be able to pledge such investor’s interest in the global
security in circumstances where certificates representing the
securities must be delivered to the lender or other beneficiary of
the pledge in order for the pledge to be effective;
●
the
depositary’s policies, which may change from time to time,
will govern payments, transfers, exchanges and other matters
relating to an investor’s interest in the global security. We
and any applicable trustee have no responsibility for any aspect of
the depositary’s actions or for its records of ownership
interests in the global security. We and the trustee also do not
supervise the depositary in any way;
●
the depositary may,
and we understand that DTC will, require that those who purchase
and sell interests in the global security within its book-entry
system use immediately available funds, and your broker or bank may
require you to do so as well; and
●
financial
institutions that participate in the depositary’s book-entry
system, and through which an investor holds its interest in the
global security, may also have their own policies affecting
payments, notices and other matters relating to the securities.
There may be more than one financial intermediary in the chain of
ownership for an investor. We do not monitor and are not
responsible for the actions of any of those
intermediaries
Special Situations When a Global Security Will Be
Terminated
In a
few special situations described below, a global security will
terminate and interests in it will be exchanged for physical
certificates representing those interests. After that exchange, the
choice of whether to hold securities directly or in street name
will be up to the investor. Investors must consult their own banks
or brokers to find out how to have their interests in securities
transferred to their own names, so that they will be direct
holders. We have described the rights of holders and street name
investors above.
A
global security will terminate when the following special
situations occur:
●
if the depositary
notifies us that it is unwilling, unable or no longer qualified to
continue as depositary for that global security and we do not
appoint another institution to act as depositary within 90
days;
●
if we notify any
applicable trustee that we wish to terminate that global security;
or
●
if an event of
default has occurred with regard to securities represented by that
global security and has not been cured or waived.
The
applicable prospectus supplement may also list additional
situations for terminating a global security that would apply only
to the particular series of securities covered by the prospectus
supplement. When a global security terminates, the depositary, and
neither we nor any applicable trustee, is responsible for deciding
the names of the institutions that will be the initial direct
holders.
We may
sell the securities being offered hereby in one or more of the
following ways from time to time:
●
through agents to
the public or to investors;
●
to underwriters for
resale to the public or to investors;
●
directly to
investors; or
●
through a
combination of any of these methods of sale.
We will
set forth in a prospectus supplement the terms of that particular
offering of securities, including:
●
the name or names
of any agents or underwriters;
●
the purchase price
of the securities being offered and the proceeds we will receive
from the sale;
●
any over-allotment
options under which underwriters may purchase additional securities
from us;
●
any agency fees or
underwriting discounts and other items constituting agents’
or underwriters’ compensation;
●
any initial public
offering price;
●
any discounts or
concessions allowed or reallowed or paid to dealers;
and
●
any securities
exchanges or markets on which such securities may be
listed.
Agents
We may
designate agents who agree to use their reasonable efforts to
solicit purchases of our securities for the period of their
appointment or to sell our securities on a continuing
basis.
Underwriters
If we
use underwriters for a sale of securities, the underwriters will
acquire the securities for their own account. The underwriters may
resell the securities in one or more transactions, including
negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The obligations of
the underwriters to purchase the securities will be subject to the
conditions set forth in the applicable underwriting agreement. The
underwriters will be obligated to purchase all the securities of
the series offered if they purchase any of the securities of that
series. We may change from time to time any initial public offering
price and any discounts or concessions the underwriters allow or
reallow or pay to dealers. We may use underwriters with whom we
have a material relationship. We will describe the nature of any
such relationship in any prospectus supplement naming any such
underwriter. Only underwriters we name in the prospectus supplement
are underwriters of the securities offered by the prospectus
supplement.
Direct Sales
We may
also sell securities directly to one or more purchasers without
using underwriters or agents. Underwriters, dealers and agents that
participate in the distribution of the securities may be
underwriters as defined in the Securities Act, and any discounts or
commissions they receive from us and any profit on their resale of
the securities may be treated as underwriting discounts and
commissions under the Securities Act. We will identify in the
applicable prospectus supplement any underwriters, dealers or
agents and will describe their compensation. We may have agreements
with the underwriters, dealers and agents to indemnify them against
specified civil liabilities, including liabilities under the
Securities Act. Underwriters, dealers and agents may engage in
transactions with or perform services for us in the ordinary course
of their businesses.
Trading Markets and Listing of Securities
Unless
otherwise specified in the applicable prospectus supplement, each
class or series of securities will be a new issue with no
established trading market, other than our common stock, which is
quoted on the OTCQB. We may elect to list any other class or series
of securities on any exchange or market, but we are not obligated
to do so. It is possible that one or more underwriters may make a
market in a class or series of securities, but the underwriters
will not be obligated to do so and may discontinue any market
making at any time without notice. We cannot give any assurance as
to the liquidity of the trading market for any of the
securities.
Stabilization Activities
Any
underwriter may engage in overallotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with
Regulation M under the Securities Exchange Act of 1934, as amended,
or the Exchange Act. Overallotment involves sales in excess of the
offering size, which create a short position. Stabilizing
transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum.
Short covering transactions involve purchases of the securities in
the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters to reclaim a
selling concession from a dealer when the securities originally
sold by the dealer are purchased in a covering transaction to cover
short positions. Those activities may cause the price of the
securities to be higher than it would otherwise be. The
underwriters may discontinue any of these activities, if commenced,
at any time.
Passive Market Making
Any
underwriters who are qualified market makers on the OTCQB, as
applicable, may engage in passive market making transactions in the
securities on the OTCQB, as applicable, in accordance with Rule 103
of Regulation M, during the business day prior to the pricing of
the offering, before the commencement of offers or sales of the
securities. Passive market makers must comply with applicable
volume and price limitations and must be identified as passive
market makers. In general, a passive market maker must display its
bid at a price not in excess of the highest independent bid for
such security. If all independent bids are lowered below the
passive market maker’s
bid, however, the passive market maker’s bid must then be lowered when
certain purchase limits are exceeded.
DLA
Piper LLP (US), Austin, Texas, will pass for us upon the validity
of the securities being offered by this prospectus and applicable
prospectus supplement, and counsel named in the applicable
prospectus supplement will pass upon legal matters for any
underwriters, dealers or agents.
The
consolidated financial statements, and the related financial
statement schedule, incorporated in this Prospectus by reference to
our Annual Report on Form 10-K have been audited by Seligson &
Giannattasio, LLP, an independent registered public accounting
firm, as stated in their report, which is incorporated herein by
reference. Such financial statements and financial statement
schedule 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
ADDITIONAL INFORMATION
We file
annual, quarterly and current reports, proxy statements and other
information electronically with the SEC. You may read and copy
these reports, proxy statements and other information at the
SEC’s public reference
room at 100 F Street, N.E., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for more information about the operation of
the public reference room. You can request copies of these
documents by writing to the SEC and paying a fee for the copying
costs. The SEC also maintains an Internet site that contains
reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC, including
us. The SEC’s website can
be found at www.sec.gov. In addition, we make available on or
through our Internet site copies of these reports as soon as
reasonably practicable after we electronically file or furnish them
to the SEC. Our Internet site can be found at
https://ir.gtbiopharma.com. Information contained in or accessible
through our website does not constitute a part of this
prospectus.
INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE
The SEC
allows us to “incorporate
by reference” information
that we file with it into this prospectus, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is an
important part of this prospectus. Information in this prospectus
supersedes information incorporated by reference that we filed with
the SEC prior to the date of this prospectus, while information
that we file later with the SEC will automatically update and
supersede the information in this prospectus. We incorporate by
reference into this registration statement and prospectus the
following documents, and any future filings we will make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of the initial registration statement but prior to
effectiveness of the registration statement and after the date of
this prospectus but prior to the termination of the offering of the
securities covered by this prospectus (other than current reports
or portions thereof furnished under Item 2.02 or Item 7.01 of Form
8-K):
●
our Annual Report
on Form 10-K for the year ended December 31, 2017, filed with the
SEC on March 1, 2018 and amendments to our Annual Reports on Form
10-K for the years ended December 31, 2016 and 2015, each filed
with the SEC on February 28, 2018 (File No.
000-08092);
●
amendments to our
Quarterly Reports on Form 10-Q for the periods ended September 30,
2016, June 30, 2016 and March 31, 2016, each filed with the SEC on
February 28, 2018 (File No. 000-08092);
●
our current reports
on Form 8-K filed with the SEC on January 16, 2018, January 23,
2018 and February 21, 2018 (File No. 000-08092);
●
the description of
our common stock contained in our Prospectus dated June 18, 1969
(File No. 0361150), filed with the SEC on June 23, 1969, including
any amendment or report filed for the purpose of updating such
description.
We will
provide each person, including any beneficial owner, to whom a
prospectus supplement and the accompanying prospectus is delivered,
a copy of any or all of the information that has been incorporated
by reference into this prospectus but not delivered with this
prospectus upon written or oral request at no cost to the
requester. Requests should be directed to: GT Biopharma, Inc., 1825
K Street NW, Suite 510, Washington, D.C. 20006, Attn: Investor
Relations, telephone: (800) 304-9888.
______________
1,202,500 Shares
Common Stock
________________________________________
PROSPECTUS SUPPLEMENT
September 21, 2018
________________________________________
