SEC Company Response from XTL BIOPHARMACEUTICALS LTD (XTLB) (CIK 0001023549) (XTLB) — Jul 14, 2005
XTL BIOPHARMACEUTICALS LTD (XTLB) (CIK 0001023549)
Date: July 14, 2005 · CIK: 0001023549 · Accession: 0001144204-05-021608
AI Filing Summary & Sentiment
Referenced dates: June 8, 2005
Letter
United States Securities and Exchange Commission Division of Corporation Finance Re: XTL Biopharmaceuticals Ltd. Form 20-FR12G filed on May 12, 2005 File No. 0-51310
Dear Mr. Riedler:
At the request and on behalf of our client, XTL Biopharmaceuticals Ltd. (the “Company”), we hereby file, via EDGAR, responses to the Commission’s comment letter dated June 8, 2005, to the Company’s registration statement on Form 20-F (File No. 0-51310) (the “Registration Statement”). These responses have been prepared by the Company with the assistance of its legal counsel. As requested, these responses are keyed to correspond to the Commission’s comment letter. A copy of this letter, other supplemental materials referenced herein, a clean copy of the Registration Statement, and a copy of the Registration Statement marked to show changes from the Company’s original filing are being sent to the Commission via overnight mail. The page references in this letter are keyed to the marked version of the Registration Statement submitted in hard copy by overnight mail.
On July 7, 2005, the Company withdrew its initial Registration Statement to delay effectiveness until certain corporate governance measures required by The Nasdaq Stock Market were adopted by the Company. Therefore, the registration statement filed herewith, although a response to the Commission’s comments on the initial Registration Statement, constitutes a new and independent registration statement, which we refer to as “Amendment No. 1”. The references in this letter to the “Registration Statement” refer to the Registration Statement as amended by Amendment No. 1.
Capitalized terms used in the responses in this letter and not otherwise defined have the meaning set forth in the Registration Statement.
One Atlantic Center
West Peachtree Street
Atlanta, GA 30309-3424
404-881-7000
Fax: 404-881-7777
Bank of America Plaza
South Tryon Street, Suite 4000
Charlotte, NC 28280-4000
704-444-1000
Fax: 704-444-1111
Beechleaf Court, Suite 600
Raleigh, NC 27604-1062
919-862-2200
Fax: 919-862-2260
Pennsylvania Avenue, N.W.
North Building, 10th Floor
Washington, DC 20004-2601
202-756-3300
Fax: 202-756-3333
XTL Biopharmaceuticals Ltd.
Form 20-FR12G filed on May 12, 2005; File No. 0-51310
Page
Form 20-FR12G
General
1.
We note from your exhibit index that you intend to seek confidential treatment for certain exhibits. In that regard, please be advised that comments related to your request for confidential treatment will be delivered under separate cover. We will not be in a position to consider clearance of this registration statement until we resolve all issues concerning the confidential treatment request.
Response:
With Amendment No. 1 to the Registration Statement, we filed, in redacted form, all exhibits for which the Company is seeking confidential treatment, and submitted a request letter to the Commission in accordance with the Division of Corporation Finance Staff Legal Bulletin No. 1, as amended. We have also provided three copies of the request letter, original exhibits and redacted versions, for your review.
Forward-Looking Information, page 1
2.
It appears that much of this discussion is already included in the Risk Factor section of your document. In that regard, please revise to limit the discussion to a warning concerning forward-looking information.
Response:
Please refer to page 1 of the Registration Statement, which has been revised in response to your comment.
3.
We note your statement that you are claiming the “protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.” Please note that a company that is not subject to the reporting requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 at the time a forward-looking statement is made cannot avail itself of the protections of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934. Therefore, please delete your statement.
Response:
Please refer to page 1 of the Registration Statement, which has been revised in response to your comment.
XTL Biopharmaceuticals Ltd.
Form 20-FR12G filed on May 12, 2005; File No. 0-51310
Page
Risks Related to Our Business, page 4
4.
We note the language contained in your auditor’s report that “continuation of the Company’s current operations after utilizing its current cash reserves during 2006 is dependent upon the generation of additional financial resources, either through agreements for the commercialization of its product portfolio or through external financing.” It is unclear if the auditors have expressed a going concern opinion about your business. If the auditors have expressed a going concern opinion, please consider adding a separate risk factor discussing the risks and consequences stemming from the going concern opinion. In addition, please add disclosure in the risk factor entitled “If we are unable to obtain additional funds on terms favorable…” on page 9 to describe the effects your going concern may have on your ability to raise additional funds.
Response:
Kesselman & Kesselman, a Member of PricewaterhouseCoopers International Limited, the Company’s independent accountants, have concluded that substantial doubt about the Company’s ability to continue as a going concern for a period not to exceed one year beyond December 31, 2004, does not exist, and have therefore concluded that inclusion of the risk factor requested in your comment regarding the Company’s ability to continue as a going concern is not appropriate. Pursuant to AU 508.19 and Israeli standards on auditing number 58, the accountants have included the emphasis-of-a-matter paragraph regarding the Company’s liquidity matters and the potential for a cash shortage at the end of 2006, which is more than one year from December 31, 2004.
“We have a limited operating history and have incurred substantial operating losses…” page 4
5.
Please relocate the last full paragraph of this risk factor to a new risk factor discussing the fact that you have no products available for commercial sale, have never had any revenues from commercial sales and have relied on equity and debt financings to support your operations.
Response:
Please refer to page 4 of the Registration Statement, which has been revised in response to your comment.
XTL Biopharmaceuticals Ltd.
Form 20-FR12G filed on May 12, 2005; File No. 0-51310
Page
“If third parties on which we rely for clinical trials do not perform as contractually…” page 5
6.
Please identify the independent clinical investigators and other third party service providers you refer to in this risk factor, if you materially rely on such individuals or entities. In addition, please describe the terms of any agreements you have with these third parties in the section entitled “Information About the Company,” and file any agreements you have with them as exhibits. In the alternative, please provide us with a detailed analysis explaining why any agreements you have with such third parties are not material to you.
Response:
Although the ability of the Company to have relationships with independent clinical investigators to conduct clinical trials is material to the Company’s business, and therefore warrants the disclosure contained in the referenced risk factor on page 5, the Company believes that the nature of the relationship between each individual investigator and the Company is not material and does not merit disclosure.
The Company uses thirteen individual centers to contract with non-exclusive independent investigators to conduct clinical trials, and has the ability to change from one investigative center to another without causing serious harm or interruption to the continued testing and development of the Company’s products. There are a number of investigators that the Company could use to conduct such clinical trials, and the choice of one investigator over another has little relevance to the ability of the Company to develop and market its drug products. Furthermore, at this time, the Company has only one drug undergoing clinical trials, HepeX-B, and these trials are being conducted by the Company through investigators at the direction, supervision and expense of the Company’s partner, Cubist Pharmaceuticals Inc. (“Cubist”). Investigative clinical trials for XTL-6865 and XTL-2125 are scheduled to commence by the end of this year, but the Company has yet to select independent investigators to conduct those trials.
“If the clinical data related to our drug candidates do not track positive preclinical…” page 5
7.
Please clarify what you mean by “relatively early stages of development.” Please also identify certain of your drug candidates in that stage. Please also identify the drugs that have not been tested in humans.
XTL Biopharmaceuticals Ltd.
Form 20-FR12G filed on May 12, 2005; File No. 0-51310
Page
Response:
Please refer to page 5 of the Registration Statement, which has been revised in response to your comment.
“If our drug candidates do not receive the necessary regulatory approvals, we will…” page 6
8.
Please revise this risk factor heading to reflect that you have limited experience in conducting and managing clinical trials necessary to obtain regulatory approval.
Response:
Please refer to page 6 of the Registration Statement, which has been revised in response to your comment.
9.
Please also revise to indicate if you have any products candidates for approval before any agency, including any foreign agencies. If so, please revise to identify the agency, the product and the specific approval you are seeking.
Response:
Please refer to page 6 of the Registration Statement, which has been revised in response to your comment.
“Because we license in some of our proprietary technologies from third parties…” page
10.
Please identify the drug candidates and technologies that you refer to in this risk factor. Please also disclose the expiration date of the patent rights.
Response:
Please refer to pages 6 and 7 of the Registration Statement, which have been revised in response to your comment. Please note that to avoid extensive repetitive language in the risk factor, the Company has included cross-references to the disclosure in “Item 4: Information on the Company - Business Overview - Intellectual Property and Patents” on page 23 of the Registration Statement and “Item 4: Information on the Company - Business Overview - Licensing Agreements and Collaborations” on page 25 of the Registration Statement, which identify the drug candidates and proprietary technologies licensed in by the Company and the expiration dates of the patent rights of such drug candidates and proprietary technologies.
XTL Biopharmaceuticals Ltd.
Form 20-FR12G filed on May 12, 2005; File No. 0-51310
Page
11.
Please indicate who has the obligation to protect and bear
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filename1.htm
Alston&Bird
LLP
90
Park
Avenue
New
York,
New York 10016
212-210-9400
Fax:
212-210-9444
www.alston.com
Mark
F. McElreath
Direct
Dial: 212-210-9595
E-mail:
mmcelreath@alston.com
July
14,
2005
VIA: UPS
AND EDGAR
Mr.
Jeffrey Riedler
United
States Securities and Exchange Commission
100
F. Street, N.E.
Division
of Corporation Finance
Mail
Stop
6010
Washington,
D.C. 20549
Re:
XTL
Biopharmaceuticals Ltd.
Form
20-FR12G filed on May 12, 2005
File
No. 0-51310
Dear
Mr.
Riedler:
At
the request and on behalf of our client, XTL Biopharmaceuticals Ltd. (the
“Company”), we hereby file, via EDGAR, responses to the Commission’s comment
letter dated June 8, 2005, to the Company’s registration statement on Form 20-F
(File No. 0-51310) (the “Registration Statement”). These responses have been
prepared by the Company with the assistance of its legal counsel. As requested,
these responses are keyed to correspond to the Commission’s comment letter. A
copy of this letter, other supplemental materials referenced herein, a clean
copy of the Registration Statement, and a copy of the Registration Statement
marked to show changes from the Company’s original filing are being sent to the
Commission via overnight mail. The page references in this letter are keyed
to
the marked version of the Registration Statement submitted in hard copy by
overnight mail.
On
July 7, 2005, the Company withdrew its initial Registration Statement to
delay
effectiveness until certain corporate governance measures required by The
Nasdaq
Stock Market were adopted by the Company. Therefore, the registration statement
filed herewith, although a response to the Commission’s comments on the initial
Registration Statement, constitutes a new and independent registration
statement, which we refer to as “Amendment No. 1”. The references in this letter
to the “Registration Statement” refer to the Registration Statement as amended
by Amendment No. 1.
Capitalized
terms used in the responses in this letter and not otherwise defined have
the
meaning set forth in the Registration Statement.
One
Atlantic Center
1201
West Peachtree Street
Atlanta,
GA 30309-3424
404-881-7000
Fax:
404-881-7777
Bank
of America Plaza
101
South Tryon Street, Suite 4000
Charlotte,
NC 28280-4000
704-444-1000
Fax:
704-444-1111
3201
Beechleaf Court, Suite 600
Raleigh,
NC 27604-1062
919-862-2200
Fax:
919-862-2260
601
Pennsylvania Avenue, N.W.
North
Building, 10th
Floor
Washington,
DC 20004-2601
202-756-3300
Fax:
202-756-3333
XTL
Biopharmaceuticals Ltd.
Form
20-FR12G filed on May 12, 2005; File No. 0-51310
Page
2
Form
20-FR12G
General
1.
We
note from your exhibit index that you intend to seek confidential
treatment for certain exhibits. In that regard, please be advised
that
comments related to your request for confidential treatment will
be
delivered under separate cover. We will not be in a position to
consider
clearance of this registration statement until we resolve all issues
concerning the confidential treatment
request.
Response:
With
Amendment No. 1 to the Registration Statement, we filed, in redacted form,
all
exhibits for which the Company is seeking confidential treatment, and submitted
a request letter to the Commission in accordance with the Division of
Corporation Finance Staff Legal Bulletin No. 1, as amended. We have also
provided three copies of the request letter, original exhibits and redacted
versions, for your review.
Forward-Looking
Information, page 1
2.
It
appears that much of this discussion is already included in the
Risk
Factor section of your document. In that regard, please revise
to limit
the discussion to a warning concerning forward-looking
information.
Response:
Please
refer to page 1 of the Registration Statement, which has been revised in
response to your comment.
3.
We
note your statement that you are claiming the “protection of the safe
harbor for forward-looking statements contained in the Private
Securities
Litigation Reform Act of 1995.” Please note that a company that is not
subject to the reporting requirements of Section 13(a) or 15(d)
of the
Securities Exchange Act of 1934 at the time a forward-looking statement
is
made cannot avail itself of the protections of Section 27A of the
Securities Act of 1933 or Section 21E of the Securities Exchange
Act of
1934. Therefore, please delete your
statement.
Response:
Please
refer to page 1 of the Registration Statement, which has been revised in
response to your comment.
XTL
Biopharmaceuticals Ltd.
Form
20-FR12G filed on May 12, 2005; File No. 0-51310
Page
3
Risks
Related to Our Business, page 4
4.
We
note the language contained in your auditor’s report that “continuation of
the Company’s current operations after utilizing its current cash reserves
during 2006 is dependent upon the generation of additional financial
resources, either through agreements for the commercialization
of its
product portfolio or through external financing.” It is unclear if the
auditors have expressed a going concern opinion about your business.
If
the auditors have expressed a going concern opinion, please consider
adding a separate risk factor discussing the risks and consequences
stemming from the going concern opinion. In addition, please add
disclosure in the risk factor entitled “If we are unable to obtain
additional funds on terms favorable…” on page 9 to describe the effects
your going concern may have on your ability to raise additional
funds.
Response:
Kesselman
& Kesselman, a Member of PricewaterhouseCoopers International Limited,
the
Company’s independent accountants, have concluded that substantial doubt
about
the
Company’s ability to continue as a going concern for a period not to exceed one
year beyond December 31, 2004, does
not
exist, and have therefore concluded that inclusion of the risk factor requested
in your comment regarding the Company’s ability to continue as a going concern
is not appropriate.
Pursuant
to AU 508.19 and Israeli standards on auditing number 58, the accountants
have
included the emphasis-of-a-matter paragraph regarding the Company’s liquidity
matters and the potential for a cash shortage at the end of 2006, which is
more
than one year from December 31, 2004.
“We
have a limited operating history and have incurred substantial operating
losses…” page 4
5.
Please
relocate the last full paragraph of this risk factor to a new risk
factor
discussing the fact that you have no products available for commercial
sale, have never had any revenues from commercial sales and have
relied on
equity and debt financings to support your
operations.
Response:
Please
refer to page 4 of the Registration Statement, which has been revised in
response to your comment.
XTL
Biopharmaceuticals Ltd.
Form
20-FR12G filed on May 12, 2005; File No. 0-51310
Page
4
“If
third parties on which we rely for clinical trials do not perform as
contractually…” page 5
6.
Please
identify the independent clinical investigators and other third
party
service providers you refer to in this risk factor, if you materially
rely
on such individuals or entities. In addition, please describe the
terms of
any agreements you have with these third parties in the section
entitled
“Information About the Company,” and file any agreements you have with
them as exhibits. In the alternative, please provide us with a
detailed
analysis explaining why any agreements you have with such third
parties
are not material to you.
Response:
Although
the ability of the Company to have relationships with independent clinical
investigators to conduct clinical trials is material to the Company’s business,
and therefore warrants the disclosure contained in the referenced risk factor
on
page 5, the Company believes that the nature of the relationship between
each
individual investigator and the Company is not material and does not merit
disclosure.
The
Company uses thirteen individual centers to contract with non-exclusive
independent investigators to conduct clinical trials, and has the ability
to
change from one investigative center to another without causing serious harm
or
interruption to the continued testing and development of the Company’s products.
There are a number of investigators that the Company could use to conduct
such
clinical trials, and the choice of one investigator over another has little
relevance to the ability of the Company to develop and market its drug products.
Furthermore, at this time, the Company has only one drug undergoing clinical
trials, HepeX-B, and these trials are being conducted by the Company through
investigators at the direction, supervision and expense of the Company’s
partner, Cubist Pharmaceuticals Inc. (“Cubist”). Investigative clinical trials
for XTL-6865 and XTL-2125 are scheduled to commence by the end of this year,
but
the Company has yet to select independent investigators to conduct those
trials.
“If
the clinical data related to our drug candidates do not track positive
preclinical…” page 5
7.
Please
clarify what you mean by “relatively early stages of development.” Please
also identify certain of your drug candidates in that stage. Please
also
identify the drugs that have not been tested in
humans.
XTL
Biopharmaceuticals Ltd.
Form
20-FR12G filed on May 12, 2005; File No. 0-51310
Page
5
Response:
Please
refer to page 5 of the Registration Statement, which has been revised in
response to your comment.
“If
our drug candidates do not receive the necessary regulatory approvals, we
will…”
page 6
8.
Please
revise this risk factor heading to reflect that you have limited
experience in conducting and managing clinical trials necessary
to obtain
regulatory approval.
Response:
Please
refer to page 6 of the Registration Statement, which has been revised in
response to your comment.
9.
Please
also revise to indicate if you have any products candidates for
approval
before any agency, including any foreign agencies. If so, please
revise to
identify the agency, the product and the specific approval you
are
seeking.
Response:
Please
refer to page 6 of the Registration Statement, which has been revised in
response to your comment.
“Because
we license in some of our proprietary technologies from third parties…” page
6
10.
Please
identify the drug candidates and technologies that you refer to
in this
risk factor. Please also disclose the expiration date of the patent
rights.
Response:
Please
refer to pages 6 and 7 of the Registration Statement, which have been revised
in
response to your comment. Please note that to avoid extensive repetitive
language in the risk factor, the Company has included cross-references to
the
disclosure in “Item 4: Information on the Company - Business Overview -
Intellectual Property and Patents” on page 23 of the Registration Statement and
“Item 4: Information on the Company - Business Overview - Licensing Agreements
and Collaborations” on page 25 of the Registration Statement, which identify the
drug candidates and proprietary technologies licensed in by the Company and
the
expiration dates of the patent rights of such drug candidates and proprietary
technologies.
XTL
Biopharmaceuticals Ltd.
Form
20-FR12G filed on May 12, 2005; File No. 0-51310
Page
6
11.
Please
indicate who has the obligation to protect and bear