SEC Company Response from AIxCrypto Holdings, Inc. (AIXC) (CIK 0001460702) (FFR) — Mar 23, 2015
AIxCrypto Holdings, Inc. (AIXC) (CIK 0001460702)
Date: March 23, 2015 · CIK: 0001460702 · Accession: 0001571049-15-002198
AI Filing Summary & Sentiment
Referenced dates: February 25, 2015
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599 Lexington Avenue
New York, NY 10022-7650
+1 212 521 5400
Fax +1 212 521 5450
reedsmith.com
March 23, 2015
VIA EDGAR
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Attn: Mr. Johnny Gharib
Re: Ritter Pharmaceuticals, Inc.
Draft Registration Statement on Form S-1 submitted
January 29, 2015
CIK No. 0001460702
Dear Mr. Gharib:
On behalf of our client, Ritter
Pharmaceuticals, Inc. (the “Company”), we submit this letter in response to comments from the staff (the
“Staff”) of the Securities and Exchange Commission (the “Commission”) contained in its letter dated
February 25, 2015 (the “Comment Letter”), relating to the above-referenced Draft Registration Statement on Form
S-1 (the “Registration Statement”). We are concurrently filing via EDGAR this letter and the initial filing of
the registration statement (the “Revised Registration Statement”).
Set forth below in bold are comments from the
Comment Letter. For your convenience, each of the numbered paragraphs below corresponds to the numbered comment in the Staff’s
Comment Letter and includes the caption used in the Comment Letter. Immediately following each comment is the Company’s response
to that comment, including, where applicable, a cross-reference to the location of changes made in the Revised Registration Statement
in response to the Staff’s comment. All page references in the responses set forth below refer to page numbers in the Revised
Registration Statement. Defined terms used but not otherwise defined herein have the meanings ascribed to such terms in the Revised
Registration Statement.
Table of Contents, page i
1. We note your statement, “While we believe that these industry publications and third-party research, surveys and studies
are reliable, we have not independently verified such data.” As it is not appropriate to disclaim liability for information
contained in your prospectus, please revise your disclosure to delete these statements.
NEW YORK ¨ LONDON ¨ HONG KONG ¨ CHICAGO ¨ WASHINGTON, D.C. ¨ BEIJING ¨ PARIS ¨ LOS ANGELES ¨ SAN FRANCISCO ¨ PHILADELPHIA ¨ SHANGHAI ¨ PITTSBURGH ¨ HOUSTON
SINGAPORE ¨ MUNICH ¨ ABU DHABI ¨ PRINCETON ¨ NORTHERN VIRGINIA ¨ WILMINGTON ¨ SILICON VALLEY ¨ DUBAI ¨ CENTURY CITY ¨ RICHMOND ¨ GREECE ¨KAZAKHSTAN
Securities and Exchange Commission
March 23, 2015
Page 2
The Company acknowledges the Staff’s comment
and respectfully advises the Staff that it has revised the language on page i of the Revised Registration Statement to address
the Staff’s concern.
Prospectus Summary
Our Leading Product Candidate
– RP-G28, page 1
2. Please define the term “prebiotic” at your first reference in the prospectus summary.
The
Company acknowledges the Staff’s comment and respectfully advises the Staff that it has revised its disclosure on page 1
of the Revised Registration Statement to include a definition of the term “prebiotic.”
3. Please provide a brief explanation of the term “oligosaccharide” at your first reference in the prospectus summary.
The Company acknowledges the Staff’s comment and
respectfully advises the Staff that it has revised its disclosure on page 1 of the Revised Registration Statement to include a
brief explanation of the term “oligosaccharide.”
4. Please expand your disclosure in this section to briefly describe the “patient-reported symptom assessment instrument”
referenced in the second paragraph of this section.
The Company acknowledges the Staff’s comment and
respectfully advises the Staff that it has revised its disclosure on page 2 of the Revised Registration Statement to provide
a brief description of the “patient-reported symptom assessment instrument” referenced in the second paragraph of this
section.
5. Please expand your disclosure in this section to explain the term “principal component analyses.”
The Company acknowledges the Staff’s comment
and respectfully advises the Staff that it has revised its disclosure on page 3 of the Revised Registration Statement to
explain the term “principal component analyses.”
6. Please explain the meaning and significance of the term “statistically significant” at its first use in the
fourth paragraph of this section. To the extent that your explanation of “statistical significance” involves the minimum
“p-value” associated with statistical significance, please explain the relationship between the terms and the significance
of p-values to the FDA’s evidentiary standards of efficacy. Please also revise your disclosure in the section entitled “Phase
2a Study” on page 76 as required.
The Company acknowledges the Staff’s comment and
respectfully advises the Staff that it has revised its disclosure on page 3 of the Revised Registration Statement and pages 77
through 79 of the
Securities and Exchange Commission
March 23, 2015
Page 3
Revised Registration Statement to provide the clarification
requested by the Staff in this comment.
7. We note your disclosure that you have received FDA guidance on RP-G28’s clinical and regulatory pathway. Please expand
your disclosure to provide a brief description of the FDA’s guidance on RP-G28.
The Company acknowledges the Staff’s
comment and respectfully advises the Staff that it has revised its disclosure on pages 3 and 4 of the Revised Registration
Statement to provide a brief description of the FDA’s guidance on RP-G28.
Substantial Patent Portfolio
and Product Exclusivity, page 3
8. Please revise your disclosure in this section to identify the prominent oligosaccharide manufacturer in Europe with whom you
have secured an exclusive supply agreement which provides for under certain circumstances the transfer of the manufacturer’s
patent applications for the process to produce ultra high purity oligosaccharide active pharmaceutical ingredients, including RP-G28.
The Company acknowledges the Staff’s comment and
respectfully advises the Staff that it has revised its disclosure on page 5 of the Revised Registration Statement to identify
the prominent oligosaccharide manufacturer in Europe with whom the Company has secured an exclusive supply agreement.
Risk Factors
Risks Related to Our Financial Position and Need for Additional
Capital
We will require substantial additional funding, which may
not be available …, page 11
9. Please expand your risk factor disclosure to quantify the amount of your cash and cash equivalents.
The Company acknowledges the Staff’s comment and
respectfully advises the Staff that it has revised its disclosure on page 13 of the Revised Registration Statement to quantify
the amount of its cash and cash equivalents.
Risks Relating to Regulatory
Review and Approval of Our Product Candidates
We cannot be certain that RP-G28
will receive regulatory approval, and …, page 13
10. Please expand your disclosure in the third paragraph of this risk factor to describe the purpose of the “ICH-compliant
GLP embryo-fetal development toxicology studies” and the “ICH standard batter of genotoxicity tests (GLP) using RP-G28.
The Company acknowledges the Staff’s comment and
respectfully advises the Staff that it has revised its disclosure on page 16 of the Revised Registration Statement to describe
the purpose
Securities and Exchange Commission
March 23, 2015
Page 4
of the “ICH-compliant GLP embryo-fetal development
toxicology studies” and the “ICH standard batter of genotoxicity tests (GLP) using RP-G28.
Risks Related to Our Business
and Strategy
We may not be able to manage
our business effectively if we are unable to …, page 25
11. Please identify your other key employees and consultants to whom you refer in the second paragraph of this risk factor.
The Company acknowledges the Staff’s comment. The
Company does not have any employees or consultants that it considers to be “key employees” (other than its executive
officers identified in second paragraph on page 27) nor does it have any “key consultants.” The Company has revised
its disclosure on page 27 to make this clarification.
We face potential product liability
exposure, and if successful claims are … , page 27
12. Please explain what you mean when you state that you expect to obtain “limited” product liability insurance coverage
by quantifying the amount of coverage you plan on obtaining and whether the amount of your coverage is typical for a company in
your industry. Please also provide this information when you discuss any other types of insurance you carry.
The Company acknowledges the Staff’s comment and
respectfully advises the Staff that it has revised its disclosure on page 29 of the Revised Registration Statement to clarify
that the insurance it currently maintains and expects to obtain in the future will be at levels typical for a company in its industry
and at its stage of development.
Use of Proceeds, page 42
13. Please revise your first bullet point in this section to indicate whether the allocated proceeds will allow you to fund your
Phase 2b and Phase 3 trials to completion. If not, please indicate how far in the development process the allocated proceeds will
allow you to reach.
The
Company acknowledges the Staff’s comment and respectfully advises the Staff that it has revised its first bullet on page
44 of the Revised Registration Statement to clarify that it expects that the net proceeds of this offering, together with its
existing cash and cash equivalents, as of December 31, 2014, will enable it to complete its planned Phase 2b trial.
Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Critical Accounting Policies and Estimates
Stock-Based Compensation, page 53
14. We may have additional comments on your accounting for equity issuances including stock compensation and beneficial conversion
features. Once you have an estimated offering
Securities and Exchange Commission
March 23, 2015
Page 5
price, please provide us an analysis
explaining the reasons for the differences between recent valuations of your common stock leading up to the IPO and the estimated
offering price.
The Company acknowledges the Staff’s
comment and respectfully advises the Staff that it will provide the Staff with an analysis explaining the reasons for any
significant differences between recent valuations of its common stock leading up to the IPO and the estimated offering price
once it has an estimated offering price.
Business, page 67
15. We note your discussion on page 61 regarding your R&D agreement with KPT and KPM. Please include disclosure under the appropriate
subheading of your Business section describing the material terms of the R&D agreement, including the nature and scope of the
agreement, the parties’ rights and obligations, duration of the agreement, termination provisions, aggregate payments to
be received by you under the agreement and royalties you are obligated to pay under the agreement.
The
Company acknowledges the Staff’s comment and respectfully advises the Staff that it has included a description of the
material terms of the R&D agreement on pages 81 and 82 of the Revised Registration Statement.
16. We note your disclosure on page 75 under the heading “Substantial Patent Portfolio and Product Exclusivity” where
you state that you secured an exclusive supply agreement for GMP produced product from a prominent oligosaccharide manufacturer
in Europe, which provides for, under certain conditions, the transfer of the manufacturer’s patent applications for the process
to produce ultra high purity oligosaccharide active pharmaceutical ingredients, including RP-G28. Please expand your disclosure
under the appropriate subheading of your Business section to identify the manufacturer and to describe the material terms of the
supply agreement, including the parties’ rights and obligations, the duration of the agreement, termination provisions and
any payment provisions. Also, please describe under what conditions the manufacturer will transfer its patent applications to you.
The
Company acknowledges the Staff’s comment and respectfully advises the Staff that on page 82 of the Revised
Registration Statement it has identified the prominent oligosaccharide manufacturer in Europe with whom the Company has
secured an exclusive supply agreement and has included a description of the material terms of this agreement.
Our Lead Product Candidate – RP-G28
Galacto-oligosaccharides (GOS), page 70
17. We note your statements that RP-G28 is manufactured to ultra-high purity specifications and that in comparison, commercially
available GOS are typically 50-60% GOS. Please expand your disclosure to provide the specifications of RP-G28.
Securities and Exchange Commission
March 23, 2015
Page 6
The
Company acknowledges the Staff’s comment and respectfully advises the Staff that it has revised its disclosure on page 71
to provide the specifications of RP-G28.
Clinical and Regulatory
Phase 2a Study, page 76
18. We note your statement, “Principal component analyses showed statistically significant shifts in the microbiome of subjects
treated with RP-G28” in the fourth paragraph of this section. Please expand your disclosure to provide the results, including
p-values, of the component analysis showing statistically significant shifts in the microbiome of subjects treated with RP-G28.
The Company acknowledges the Staff’s comment
and respectfully advises the Staff that it has expanded its disclosure on pages 77 through 79 to provide the results,
including p-values, of the component analysis showing statistically significant shifts in the microbiome of subjects treated
with RP-G28.
Competition, page 78
19. We note that you believe that RP-G28 is one of the few drug candidates in advanced clinical trials for treating lactose intolerance.
Please expand your disclosure to identify the other drug candidates that are under development with which you may compete and the
companies that are developing these product candidates. In this regard, we note that you currently provide such information in
the risk factor entitled, “We face competition from other biotechnology and pharmaceutical companies and our operating results
will suffer if we fail to compete effectively.”
The Company acknowledges the Staff’s comment and
respectfully advises the Staff that it has revised its disclosure on pages 6, 24 and 83 of the Revised Registration Statement
to clarify that while it knows of no other drug candidates in advanced clinical trials for treating lactose intolerance, because
the biopharmaceutical industry is intensely competitive, it could face competition in the future.
Intellectual Property
Patents and Proprietary Rights
Covering Our Drug Candidates, page 79
20. We note that your intellectual property portfolio related to RP-G28 contains four issued patents and at least 15 other related
pending patent applications in the United States and worldwide of both in-licensed and Ritter Pharmaceutical-owned inventions.
Please revise your disclosure in this section to provide the following information:
· A description of your fourth issued patent, including the type of patent protection such as use or process, the expiration
date of the patent and the jurisdiction where it is issued;
Securities and Exchange Commission
March 23, 2015
Page 7
· With regard to your patent applications, please describe the type of patent protection you are seeking such as composition
of matter, use or process, the expected expiration date of the issued patent if the patent application is granted, and the jurisdictions
where the patent application is pending; and
· With regard to your patents and patent applications, which ones are owned and which ones are licensed from third parties
and the name of the third party if the patent or patent application is licensed from a third party.
The Company acknowledges
the Staff’s comment and respectfully a