Attached files
| file | filename |
|---|---|
| EX-5.1 - Altimmune, Inc. | v200482_ex5-1.htm |
| EX-1.1 - Altimmune, Inc. | v200482_ex1-1.htm |
| EX-1.2 - Altimmune, Inc. | v200482_ex1-2.htm |
| EX-99.1 - Altimmune, Inc. | v200482_ex99-1.htm |
| EX-99.2 - Altimmune, Inc. | v200482_ex99-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): October 29,
2010
PHARMATHENE,
INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
001-32587
|
20-2726770
|
||
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
|
One Park Place, Suite 450, Annapolis, Maryland
|
21401
|
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number including area code: (410) 269-2600
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
|
Item
1.01
|
Entry
Into a Material Definitive
Agreement.
|
On
October 29, 2010, PharmAthene, Inc. (the “Company”) entered into an underwriting
agreement (the “Underwriting Agreement”) with Roth Capital Partners, LLC (the
“Underwriter”), relating to the issuance and sale of an aggregate of 4,300,000
shares of the Company’s common stock, at a public offering price of $3.50 per
share (the “Offering”). The Company expects to receive net proceeds
of approximately $14.1 million from the Offering before the payment of offering
expenses payable by the Company. In the Underwriting Agreement, the
Company also granted the Underwriter an option to acquire an additional 645,000
shares of common stock solely to cover overallotments made in connection with
the Offering. In addition, the Company agreed to reimburse the
Underwriter for certain expenses incurred by it in connection with the Offering
(including reasonable attorney’s fees and expenses) up to $55,000. A copy of the
Underwriting Agreement is attached as Exhibit 1.1 to this Current Report on Form
8-K, and is incorporated herein by reference.
The
Company also engaged Noble Financial Group, Inc. (“Noble”) to serve as its
non-exclusive financial advisor in connection with the
Offering. Noble will receive a financial advisory fee of $75,000,
which will reduce the underwriting discount payable to the Underwriter in
connection with the Offering.
The net
proceeds of the Offering will be used to repay certain indebtedness of the
Company and for general corporate purposes.
The
description of the Offering provided herein is qualified in its entirety by
reference to the Underwriting Agreement, a copy of which is filed as an exhibit
to this report. The Company has filed the Underwriting Agreement as
required by the rules and regulations of the Securities and Exchange Commission
(the “Commission”). The Underwriting Agreement contains
representations and warranties that the parties made to, and solely for the
benefit of, the other in the context of all of the terms and conditions thereof
and in the context of the specific relationship between the
parties. The provisions of the Underwriting Agreement, including the
representations and warranties contained therein, are not for the benefit of any
party other than the parties thereto and are not intended to be relied upon by
investors and the public. Rather, investors and the public should look to the
Company’s filings with the Commission for information regarding the
Company.
The
Shares are being issued pursuant to a prospectus supplement dated October 29,
2010, filed with the Commission pursuant to Rule 424(b) under the Securities
Act, as part of a shelf takedown from the Company’s registration statement on
Form S-3 (File No. 333-156997), including a related prospectus, which was
declared effective by the Securities and Exchange Commission on February 12,
2009.
On
October 29, 2010, eight of the Company’s note holders (including five affiliated
funds) elected to convert their 10% senior convertible notes pursuant
to an early conversion agreement (the “Early Conversion
Agreement”). In exchange for the note holders’ election to convert
the notes prior to their July 2011 maturity, in addition to
receiving shares of the Company's common stock as a result of the
conversion, they received cash payments corresponding to the interest foregone,
i.e. the interest such holders would have received between the conversion date
and the maturity date had they held the note through maturity. Such holders are
affiliates, officers or directors of PharmAthene. A copy of the Early
Conversion Agreement is attached as Exhibit 1.2 to this Current Report on Form
8-K, and is incorporated herein by reference.
On
October 28, 2010, the Company issued a press release announcing that it intended
to conduct the Offering. The text of the press release is included as
Exhibit 99.1 to this Form 8-K and is incorporated herein by
reference.
On
October 29, 2010, the Company issued a press release announcing the specific
terms and conditions of the Offering. The text of the press release
is included as Exhibit 99.2 to this Form 8-K and is incorporated herein by
reference.
|
Item
8.01
|
Other
Events
|
As used in this section, the term
“we”, “us” and “our” refers to the Company.
On October 29, 2010, eight of the
Company’s note holders (including five affiliated funds) elected to
convert their 10% senior convertible notes pursuant to an early conversion
agreement (the “Early Conversion Agreement”). In exchange for the
note holders’ election to convert the notes prior to their July 2011
maturity, in addition to receiving shares of the Company's common
stock as a result of the conversion, they received cash payments corresponding
to the interest foregone, i.e. the interest such holders would have received
between the conversion date and the maturity date had they held the note through
maturity.
Conditional
Listing on NYSE Amex
On July
26, 2010, we received a letter from the NYSE Amex, stating that we are not in
compliance with the exchange’s continued listing standards, specifically,
Sections 1003(a)(i), (ii) and (iii) of the NYSE Amex Company Guide, because we
have stockholders’ equity of less than $2.0 million, $4.0 million and $6.0
million and losses from continuing operations and net losses in two of our three
most recent fiscal years, three of our four most recent fiscal years and our
five most recent fiscal years, respectively.
On August
25, 2010, we submitted a plan to the NYSE Amex addressing how we intend to
regain compliance with the continued listing standards by January 26, 2012, the
end of the eighteen-month compliance period under NYSE Amex
rules. Based on the information in our compliance plan and related
discussions with exchange staff, the NYSE Amex determined that we had made a
reasonable demonstration of our ability to regain compliance with Sections
1003(a)(i), (ii) and (iii) of the NYSE Amex Company Guide by January 26, 2012
and that it would continue the listing of our common stock subject to
conditions. The conditions include (a) the requirement to provide
exchange staff with updates on the initiatives included in our compliance plan,
at least once each quarter concurrent with our corresponding periodic SEC
filing, (b) the periodic review of our compliance with the plan by exchange
staff, and (c) the approval of a NYSE Amex management committee prior to any
issuances of additional shares of common stock. We currently believe
that we are in compliance with these conditions. If we do not
show progress consistent with our compliance plan, or we do not meet the
continued listing standards by January 26, 2012, the NYSE Amex could initiate
delisting proceedings. We may appeal any delisting determination
before a listing qualifications panel of the exchange and in turn request a
review of the decision of such panel by the exchange’s Committee on
Securities.
Status
of SIGA Litigation
In March
2010, Siga Technologies, Inc., or SIGA, filed a motion for summary judgment
relating to our lawsuit filed against them in 2006. Oral argument was
held in July 2010 and the court indicated that it would render a decision by the
end of October 2010. If the court rules in favor of SIGA, significant
claims in our case could be dismissed, drastically limiting our chances for a
meaningful remedy. We cannot assure you that SIGA will not prevail on
its motion for summary judgment or that if the case eventually proceeds to
trial, we will prevail or even recover any costs or damages.
Conversion
of Outstanding Convertible Senior Notes
As of the
date of this prospectus supplement, convertible notes in the aggregate principal
amount of approximately $19.3 million, bearing interest of 10% per annum,
are outstanding. These notes are convertible into up to approximately
8.5 million shares of our common stock (based on principal amount plus interest
through the date of this prospectus supplement). Under the terms of the notes,
each holder converting notes is entitled to receive a number of shares
corresponding to principal and accrued interest through the date of conversion
(plus any accrued and unpaid late charges). We have
offered to pay any holder exercising his conversion right prior to maturity an
amount in cash corresponding to the interest foregone, i.e., the interest the
holder would have received between the conversion date and the maturity date had
he held the note through maturity as disclosed above.
Any net
proceeds of this offering not paid to holders of our convertible notes will be
used for general corporate purposes.
Related
Party Transactions
MPM
Bioventures is purchasing 430,000 shares of our common stock in this
offering under the same terms as they are offered to the public
hereunder.
Certain
of our affiliates, officers and directors (and their family members) own
convertible senior notes due July 2011 and, assuming they convert their notes in
accordance with the procedures outlined above, will receive cash payments from
the proceeds of this offering corresponding to the interest foregone, i.e., the
interest the holders would have received between the conversion date and the
maturity date had they held the note through maturity.
In the
alternative, to the extent we repay their Notes either upon a redemption or at
maturity thereof, we would use the proceeds hereof for the benefit of such
affiliates, officers and directors (and their family members). See “Use of
Proceeds”
Update
on Nerve Agent Countermeasure Program
In 2006
we entered into a contract with the U.S. Department of Defense (“DoD”) to
develop a medical countermeasure for nerve agent exposure to protect the
warfighter. This program utilizes the recombinant enzyme
butyrylcholinesterase, or “rBChE”, a naturally occurring bioscavenger, as its
active ingredient. Our first generation program for producing rBChE,
which we refer to as Protexia®, utilizes transgenic goats to produce the enzyme
in their milk. We have also been working on a second generation
approach, which we refer to as our Advanced Expression System, or “AES”, that
utilizes a mammalian-cell-based expression system for rBChE.
While the
AES technology is still at an early research stage, if our efforts are
successful, we believe this cell-based approach could have significant
advantages over the transgenic goat-based approach originally developed to
produce Protexia®. Specifically, we believe these advantages could
include:
|
•
|
An
established manufacturing platform, consistent with those used for other
biotechnology products and with the U.S. government’s recent advanced
manufacturing system initiative.
|
|
•
|
Final
product with a pharmacokinetic (PK) profile that more closely resembles
naturally occurring butyrylcholinesterase, or BChE, from human blood
plasma.
|
|
•
|
Higher
production yields than a transgenic goat based
approach.
|
|
•
|
Substantially
lower costs of production to yield significant savings to our DoD
customer.
|
|
•
|
A
more traditional regulatory path to FDA
licensure.
|
|
•
|
Greater
ability to scale up production if demand
increases.
|
The DoD
has recently informed us that it is deferring a decision on whether to fund
advanced development of Protexia® for the time being, potentially for several
years, due to budget constraints and concerns about potential duration of
protection with the current route of Protexia® administration as compared to the
human blood plasma derived BChE product. DoD has said they need more
data regarding the duration of protection of Protexia® before making a decision
regarding future advanced development funding, and it is unclear at this time
how long and what the cost would be to address their concerns. As such, our
existing September 2006 contract related to milk collection for Protexia® will
not be extended past its current term, which ends on December 31,
2010.
The
second generation AES approach is more consistent with the DoD
requirements. We believe the AES could provide a potentially safe and
effective nerve agent countermeasure for the warfighter in a shorter timeframe
and at a more affordable cost than the transgenic goat-based
product. Consequently, we plan to defer the decision on whether to
generate the additional data DoD has requested, pending the results of our work
on the AES.
In
connection with the expiration of our current contract for milk collection for
Protexia®, we will eliminate our transgenic goat operations and are in
discussions with a third party to establish the capability to initiate
production of the transgenic goat-based product at an FDA-licensed facility if
the government decides to pursue development of this product again in the
future. In the fourth quarter of 2010 and the first half of 2011, we
expect to incur a modest amount of severance and other wind-down costs related
to the termination of our Protexia®-related operations, but have not yet
determined whether we will need to write down the net book value of our
Protexia® related assets, and if required, how much that will be. We
expect to complete this analysis in the fourth quarter 2010.
We are in
advanced discussions with the DoD regarding a new contract to fund on-going
research we have been conducting related to the production of rBChE using our
AES. Based on those discussions, we currently anticipate that DoD will award a
contract to us before the end of 2010 for up to $5.9 million to support this
initial work. We cannot assure you, however, that the contract will be awarded
in this time frame, or at all, or of the specific terms of any such contract.
Also, in September 2010 we submitted a white paper to the DoD for additional
funding of up to approximately $30 million over three years to support further
development of the AES, including process development and manufacture of cGMP
material for non-clinical and clinical testing, IND-enabling safety and toxicity
studies, IND submission, and a Phase I human clinical study. If DoD
approves the white paper, we can submit a formal proposal for funding this
work. If DoD were to accept our proposal and award us such funding,
it would likely not occur before the fourth quarter 2011.
Update
on BARDA performance evaluation
In
response to the performance evaluation for the period April 1, 2009 through
April 30, 2010 we received from BARDA under our current contract for the
advanced development of SparVax™, we have implemented key organizational changes
and information sharing enhancements. We have received positive
feedback from BARDA personnel in recent months. BARDA has also solicited our
input regarding achievements since the last assessment by BARDA and agreed to
provide an interim assessment prior to the end of the year, which we anticipate
will recognize our improved execution.
Update
on Valortim® partial clinical hold
As part
of our investigational plan regarding the partial clinical hold on Valortim®, we
conducted a subcutaneous skin testing study with five subjects, including the
two subjects who had adverse reactions as part of our Valortim®/Ciprofloxacin
study. There were no positive skin test reactions to Valortim® or it excipients,
suggesting that the adverse reactions previously observed were not likely to be
allergic reactions.
We
recently presented this information to the FDA and the Safety Monitoring
Committee (SMC) for Valortim®, which agreed with our plan to propose to FDA an
intravenous (IV) dose-escalation study of Valortim® with a slower infusion rate
than that used in the Valortim®/Ciprofloxacin study. We plan to send
our final investigation plan report, IV dose escalation protocol, and SMC
recommendations to FDA in early November, and believe that we are
well-positioned for FDA to permit us to proceed with the dose escalation study,
with dosing of the first subject scheduled for January
2011.
We
updated BARDA during the course of our investigation, and the agency has
continued to express interest in Valortim®. We plan to submit a white
paper to BARDA for advanced development funding for Valortim® of in excess of
$100 million before the end of 2010, and subject to BARDA’s agreement, submit a
formal funding proposal as soon as possible
thereafter.
|
Item
9.01
|
Financial
Statements and Exhibits
|
(d) The
following exhibits are filed herewith:
|
No.
|
Description
|
|
|
1.1
|
Underwriting
Agreement dated as of October 28, 2010 by and among the Company and Roth
Capital Partners, LLC.
|
|
|
1.2
|
Form
of Early Conversion Agreement
|
|
|
5.1
|
Opinion
of SNR Denton US LLP.
|
|
|
99.1
|
Press
Release dated October 28, 2010.
|
|
|
99.2
|
Press
Release dated October 29, 2010.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
PHARMATHENE,
INC.
(Registrant)
|
||
|
Date: October
29, 2010
|
By:
|
/s/ Charles A. Reinhart
III
|
|
Charles
A. Reinhart III
|
||
|
Senior
Vice President and Chief Financial
Officer
|
||