SEC Comment Letter for PDS Biotechnology Corp (PDSB) (CIK 0001472091) (PDSB) — Apr 18, 2014
PDS Biotechnology Corp (PDSB) (CIK 0001472091)
Date: April 18, 2014 · CIK: 0001472091 · Accession: 0000000000-14-019629
AI Filing Summary & Sentiment
Reasoning
Letter
April 17, 2014 Via E -mail Brian A. Leuthner President and Chief Executive Officer Edge Therapeutics, Inc. 200 Connell Drive, Suite 1600 Berkeley Heights, NJ 07922
Re: Edge Therapeutics, Inc. Confidential Draft Registration Statement on Form S -1 Submitted March 21, 2014 CIK No. 0001472091
Dear Mr. Leuthner:
We have reviewed your confidential draft registration statement and have the following comments. In some of our comments, we may ask you to provide us with infor mation so we may better understand your disclosure.
Please respond to this letter by providing the requested infor mation and either sub mitting an amended confidential draft re gistration state ment or publicl y filing your registration state ment on EDGAR. If you do not believe our comments apply to your facts and circu mstances or do not believe an amendment is a ppropriate, please tell us why in your response.
After revie wing the infor mation you provide in res ponse to these com ments and your amended confidential draft registration state ment or filed registration state ment, we may have additio nal co mments.
General
1. Please sub mit all outstanding exhibits as soon as prac ticable. We may have further comments upon examination of these exhibits.
2. Please provide us proofs of all graphic, visual or photographic information you will provide in the printed prospectus prior to its use, for example in a preliminary prospectus. Please note that we may have comments regarding this material.
3. Please supplementally provide us with copies of all written communications, as defined in Rule 405 under the Securities Act, that you, or anyone authorized to do so on your behalf, present to potential investors in reliance on Sec tion 5(d) of the Securities Act, whether or not they retain copies of the communications. Similarly, please
Brian A. Leuthner Edge Therapeutics, Inc. April 17 , 2014 Page 2
supplementally provide us with any research reports about you that are published or distributed in reliance upon Section 2(a)(3) of the Securities A ct of 1933 added by Section 105(a) of the Jumpstart Our Business Startups Act by any broker or dealer that is participating or will participate in your offering.
Prospectus Summary, page 1
4. Please define the term “pancreatic trypsin inhibitor” the first t ime it is used and briefly explain how it functions to prevent recurrent bleeding on the surface of the brain.
Our Product Candidates, page 2
5. We refer you to the pipeline chart included on page 2. Given the considerable uncertainty inherent in the clini cal development process, you should delete the reference to a “TBD” candidate in the chart, especially considering that you have not yet selected an active pharmaceutical ingredient for this candidate. Please also revise the chart as it appears on page 63 .
Our Team, page 3
6. Please reconcile the list of your CEO’s past employers with the list that appears in his biograph y on page 88.
Risks Associated with Our Business, pages 4 -5
7. The risks disclosed in your prospectus summary should present the most material risks to investors and should be reasonably specific. In this regar d, the risks described in several bullet points appear to be boilerplate. Please provide more details, including but not limited to your total accumulated deficit in bullet point 2, the specific third parties and contracts on which you are dependent in bu llet point 9, and the specific employees you consider key employees in bullet point 10.
Risk Factors “If we are unable to protect our intellectual property rights…,” page 29
8. Please revise this risk factor to include a brief discussion of your most material patents, the product candidates or technology to which they relate, the jurisdictions in which they were granted, and the expected expiration date of the patent protection. Additionally, if the patents are subject to a license agreement that may be terminated resulting in the loss of patent protection, please so disclose.
Brian A. Leuthner Edge Therapeutics, Inc. April 17 , 2014 Page 3
Use of Proceeds, page 39
9. Please provide disclosure as to the approximate amount of proceeds that you expect to devote to each of the NEWTON trial and the planned Phase 3 trial for EG1962 separately. Additionally, please disclose your best estimate of what the application of these proceeds will allow you to accomplish as to eac h trial.
Critical Accounting Policies and Significant Judgments and Estimates Fair Value of Common Stock, page 52
10. We may have c omments on your accounting for stock compensation or any beneficial conversion features once you have disclosed an estimated offering price. Please supplementally provide us with a quantitative and qualitative analysis explaining the difference between th e estimated offering price and the fair value of each equity issuance since October 11, 2013 through the date of effectiveness.
Management’s Discussion and Analysis Operating Capital Requirements, page 57
11. We note your estimation that current cash and est imated proceeds from this offering will be sufficient to meet cash requirement through the completion of a single Phase 3 trial for EG-1062. Please additionally provide a related estimation of the time frame through which these funds will last.
Busines s Clinical Results, page 66
12. We note your discussion of the clinical findings from the Heinrich Heine University Medical Center trial. Please clarify who sponsored and conducted this trial, how it was funded, and its primary purpose. Please further clarify the signifi cance of the “Individual Therapeutic Approaches,” or ITAs, used as part of this trial, and describe how this approach differs, if at all, from a standard clinical trial.
13. Please clarify what you mean by the term “meta -data analysis” on page 67. Please further disclose what other clinical trial you refer to on this page in which 403 patients were treated with the current standard of care, and provide specific disclosure as to how you measured significance in your conclusion that EG -1962 had “significantly b etter outcomes” than the patients in that trial.
Planned Clinical Development, page 69
14. We note your disclosure in this section of the reasons you believe the FDA may support your proposal to conduct a single pivotal Phase 3 trial pending positive re sults from the NEWTON trial. In support of the belief, you discuss prior findings of safety and efficacy
Brian A. Leuthner Edge Therapeutics, Inc. April 17 , 2014 Page 4
for oral nimodipine and the deficiencies of the current standard of care. You should qualify this discussion by reference to intravenous treatment wi th nimodipine, and disclose that the FDA issued an alert in 2006 warning that nimodipine, when administered intravenously, can lead to serious adverse events, including death. To the extent material, please discuss the dangers specific to intravenous admi nistration, as opposed to the U.S. approved oral administration, and clarify whether such dangers pose a risk to perceived or actual safety of EG -1962.
Regulatory Pathway, page 70
15. We note your disclosure on this page that based on a meeting with the FDA, EG -1962 qualifies for the Section 505(b)(2) pathway. Please disclose all material details of this meeting with the FDA here, including the purpose of the meeting and its results. Please also clarify in disclosure here and on page 62 that although you may pursue this pathway, approval pursuant to 505(b)(2) was not guaranteed by the FDA at the meeting.
EG-1962 for tSAH, page 70
16. Please identify the published research to which you refer indicating that nimodipine might improve outcomes after traumatic brain injury (TBI) , and additionally d isclose whether such research was peer -reviewed. You need not provide full citations.
17. To the extent they are different from the research referenc ed in the above comment, please provide more details on the studies referenced on page 71 in TBI patients, including who sponsored and conducted the studies, the size of the tSAH subgroup, and the meaning of “a significant increase” regarding favorable outcomes in that subgroup.
Our Precisa Development Platform, page 73
18. Please revise your disclosure to expand this section. Specifically, please explain in greater detail how Precisa allows you to create polymer -based therapeutics capable of delivering therapeutics to t he site of injury. Please further clarify how you “program” Precisa with a specific blend of polymers in order to obtain a specific release profile. In your expanded disclosure, please avoid overly -complex scientific terminology that could be confusing t o a reasonable investor.
19. We note your reference to Precisa as a “proprietary” platform. Please clarify in disclosure how the platform is proprietary. In this regard, it does not appear that you have patent protection for the Precisa platform generally, and the foundation (PLGA) is a polymer that has been in use since the 1970s.
Brian A. Leuthner Edge Therapeutics, Inc. April 17 , 2014 Page 5
License Agreement with Evonik, page 76
20. We note your dis closure on page 75 that patent applications relating to this agreement cover “a process for producing a substantially pure polymorphic form of a bioactive agent encapsulated in microparticles” and “a semisolid delivery system containing microparticles comp rising a substantially pure crystalline form of a polymorphic bioactive agent.” Please clarify how these patent applications relate to you r Precisa platform, if at all. Please be sure to address what sort of protection the patents, if issued, would provide for EG -1962 and/or EG01964 (e.g., composition of matter, method of use, etc.).
European Union Drug Review Approval, page 87
21. Please include a description of how the abbreviated pathway to approval referenced on page 70 functions in the European Union.
Employment Agreements, pages 95 -96
22. Please briefly disclose the manner and methodology pursuant to which bonuses may be awarded to your named executive officers under their employment agreements.
Shares Eligible for Future Sale Lock -up Agreements, page 115
23. Please file the form of lock -up agreement as an exhibit to your registration statement.
If you intend to respond to these comments with an amended draft registration statement, please submit it and an y associated correspondence in accordance with the guidance we provide in the Division’s October 11, 2012 announcement on the SEC website at http://www.sec.gov/divisions/corpfin/cfannouncements/drsfilingprocedures101512.htm.
Please keep in mind that we ma y publicly post filing review correspondence in accordance with our December 1, 2011 policy (http://www.sec.gov/divisions/corpfin/cfannouncements/edgarcorrespondence.htm). If you intend to use Rule 83 (17 CFR 200.83) to request confidential treatment of in formation in the correspondence you submit on EDGAR, please properly mark that information in each of your confidential submissions to us so we do not repeat or refer to that information in our comment letters to you.
Brian A. Leuthner Edge Therapeutics, Inc. April 17 , 2014 Page 6
You may contact Christine Torney at (202) 551 -3652 or Mary Mast at (202) 551 -3613 if you have questions regarding comments on the financial statements and related matters. Please contact Austin Stephenson at (202) 551 -3192, Dan Greenspan at (202) 551 -3623, or me at (202) 551-3715 with any o ther questions.
Sincerely,
/s/ Daniel Greenspan for
Show Raw Text
April 17, 2014
Via E -mail
Brian A. Leuthner
President and Chief Executive Officer
Edge Therapeutics, Inc.
200 Connell Drive, Suite 1600
Berkeley Heights, NJ 07922
Re: Edge Therapeutics, Inc.
Confidential Draft Registration Statement on Form S -1
Submitted March 21, 2014
CIK No. 0001472091
Dear Mr. Leuthner:
We have reviewed your confidential draft registration statement and have the following
comments. In some of our comments, we may ask you to provide us with infor mation so we may
better understand your disclosure.
Please respond to this letter by providing the requested infor mation and either sub mitting
an amended confidential draft re gistration state ment or publicl y filing your registration state ment
on EDGAR. If you do not believe our comments apply to your facts and circu mstances or do
not believe an amendment is a ppropriate, please tell us why in your response.
After revie wing the infor mation you provide in res ponse to these com ments and your
amended confidential draft registration state ment or filed registration state ment, we may have
additio nal co mments.
General
1. Please sub mit all outstanding exhibits as soon as prac ticable. We may have further
comments upon examination of these exhibits.
2. Please provide us proofs of all graphic, visual or photographic information you will
provide in the printed prospectus prior to its use, for example in a preliminary prospectus.
Please note that we may have comments regarding this material.
3. Please supplementally provide us with copies of all written communications, as defined
in Rule 405 under the Securities Act, that you, or anyone authorized to do so on your
behalf, present to potential investors in reliance on Sec tion 5(d) of the Securities Act,
whether or not they retain copies of the communications. Similarly, please
Brian A. Leuthner
Edge Therapeutics, Inc.
April 17 , 2014
Page 2
supplementally provide us with any research reports about you that are published or
distributed in reliance upon Section 2(a)(3) of the Securities A ct of 1933 added by
Section 105(a) of the Jumpstart Our Business Startups Act by any broker or dealer that is
participating or will participate in your offering.
Prospectus Summary, page 1
4. Please define the term “pancreatic trypsin inhibitor” the first t ime it is used and briefly
explain how it functions to prevent recurrent bleeding on the surface of the brain.
Our Product Candidates, page 2
5. We refer you to the pipeline chart included on page 2. Given the considerable
uncertainty inherent in the clini cal development process, you should delete the reference
to a “TBD” candidate in the chart, especially considering that you have not yet selected
an active pharmaceutical ingredient for this candidate. Please also revise the chart as it
appears on page 63 .
Our Team, page 3
6. Please reconcile the list of your CEO’s past employers with the list that appears in his
biograph y on page 88.
Risks Associated with Our Business, pages 4 -5
7. The risks disclosed in your prospectus summary should present the most material risks to
investors and should be reasonably specific. In this regar d, the risks described in several
bullet points appear to be boilerplate. Please provide more details, including but not
limited to your total accumulated deficit in bullet point 2, the specific third parties and
contracts on which you are dependent in bu llet point 9, and the specific employees you
consider key employees in bullet point 10.
Risk Factors
“If we are unable to protect our intellectual property rights…,” page 29
8. Please revise this risk factor to include a brief discussion of your most material patents,
the product candidates or technology to which they relate, the jurisdictions in which they
were granted, and the expected expiration date of the patent protection. Additionally, if
the patents are subject to a license agreement that may be terminated resulting in the loss
of patent protection, please so disclose.
Brian A. Leuthner
Edge Therapeutics, Inc.
April 17 , 2014
Page 3
Use of Proceeds, page 39
9. Please provide disclosure as to the approximate amount of proceeds that you expect to
devote to each of the NEWTON trial and the planned Phase 3 trial for EG1962
separately. Additionally, please disclose your best estimate of what the application of
these proceeds will allow you to accomplish as to eac h trial.
Critical Accounting Policies and Significant Judgments and Estimates
Fair Value of Common Stock, page 52
10. We may have c omments on your accounting for stock compensation or any beneficial
conversion features once you have disclosed an estimated offering price. Please
supplementally provide us with a quantitative and qualitative analysis explaining the
difference between th e estimated offering price and the fair value of each equity issuance
since October 11, 2013 through the date of effectiveness.
Management’s Discussion and Analysis
Operating Capital Requirements, page 57
11. We note your estimation that current cash and est imated proceeds from this offering will
be sufficient to meet cash requirement through the completion of a single Phase 3 trial for
EG-1062. Please additionally provide a related estimation of the time frame through
which these funds will last.
Busines s
Clinical Results, page 66
12. We note your discussion of the clinical findings from the Heinrich Heine University
Medical Center trial. Please clarify who sponsored and conducted this trial, how it was
funded, and its primary purpose. Please further clarify the signifi cance of the “Individual
Therapeutic Approaches,” or ITAs, used as part of this trial, and describe how this
approach differs, if at all, from a standard clinical trial.
13. Please clarify what you mean by the term “meta -data analysis” on page 67. Please
further disclose what other clinical trial you refer to on this page in which 403 patients
were treated with the current standard of care, and provide specific disclosure as to how
you measured significance in your conclusion that EG -1962 had “significantly b etter
outcomes” than the patients in that trial.
Planned Clinical Development, page 69
14. We note your disclosure in this section of the reasons you believe the FDA may support
your proposal to conduct a single pivotal Phase 3 trial pending positive re sults from the
NEWTON trial. In support of the belief, you discuss prior findings of safety and efficacy
Brian A. Leuthner
Edge Therapeutics, Inc.
April 17 , 2014
Page 4
for oral nimodipine and the deficiencies of the current standard of care. You should
qualify this discussion by reference to intravenous treatment wi th nimodipine, and
disclose that the FDA issued an alert in 2006 warning that nimodipine, when
administered intravenously, can lead to serious adverse events, including death. To the
extent material, please discuss the dangers specific to intravenous admi nistration, as
opposed to the U.S. approved oral administration, and clarify whether such dangers pose
a risk to perceived or actual safety of EG -1962.
Regulatory Pathway, page 70
15. We note your disclosure on this page that based on a meeting with the FDA, EG -1962
qualifies for the Section 505(b)(2) pathway. Please disclose all material details of this
meeting with the FDA here, including the purpose of the meeting and its results. Please
also clarify in disclosure here and on page 62 that although you may pursue this pathway,
approval pursuant to 505(b)(2) was not guaranteed by the FDA at the meeting.
EG-1962 for tSAH, page 70
16. Please identify the published research to which you refer indicating that nimodipine
might improve outcomes after traumatic brain injury (TBI) , and additionally d isclose
whether such research was peer -reviewed. You need not provide full citations.
17. To the extent they are different from the research referenc ed in the above comment,
please provide more details on the studies referenced on page 71 in TBI patients,
including who sponsored and conducted the studies, the size of the tSAH subgroup, and
the meaning of “a significant increase” regarding favorable outcomes in that subgroup.
Our Precisa Development Platform, page 73
18. Please revise your disclosure to expand this section. Specifically, please explain in
greater detail how Precisa allows you to create polymer -based therapeutics capable of
delivering therapeutics to t he site of injury. Please further clarify how you “program”
Precisa with a specific blend of polymers in order to obtain a specific release profile. In
your expanded disclosure, please avoid overly -complex scientific terminology that could
be confusing t o a reasonable investor.
19. We note your reference to Precisa as a “proprietary” platform. Please clarify in
disclosure how the platform is proprietary. In this regard, it does not appear that you
have patent protection for the Precisa platform generally, and the foundation (PLGA) is a
polymer that has been in use since the 1970s.
Brian A. Leuthner
Edge Therapeutics, Inc.
April 17 , 2014
Page 5
License Agreement with Evonik, page 76
20. We note your dis closure on page 75 that patent applications relating to this agreement
cover “a process for producing a substantially pure polymorphic form of a bioactive
agent encapsulated in microparticles” and “a semisolid delivery system containing
microparticles comp rising a substantially pure crystalline form of a polymorphic
bioactive agent.” Please clarify how these patent applications relate to you r Precisa
platform, if at all. Please be sure to address what sort of protection the patents, if issued,
would provide for EG -1962 and/or EG01964 (e.g., composition of matter, method of use,
etc.).
European Union Drug Review Approval, page 87
21. Please include a description of how the abbreviated pathway to approval referenced on
page 70 functions in the European Union.
Employment Agreements, pages 95 -96
22. Please briefly disclose the manner and methodology pursuant to which bonuses may be
awarded to your named executive officers under their employment agreements.
Shares Eligible for Future Sale
Lock -up Agreements, page 115
23. Please file the form of lock -up agreement as an exhibit to your registration statement.
If you intend to respond to these comments with an amended draft registration statement,
please submit it and an y associated correspondence in accordance with the guidance we provide
in the Division’s October 11, 2012 announcement on the SEC website at
http://www.sec.gov/divisions/corpfin/cfannouncements/drsfilingprocedures101512.htm.
Please keep in mind that we ma y publicly post filing review correspondence in
accordance with our December 1, 2011 policy
(http://www.sec.gov/divisions/corpfin/cfannouncements/edgarcorrespondence.htm). If you
intend to use Rule 83 (17 CFR 200.83) to request confidential treatment of in formation in the
correspondence you submit on EDGAR, please properly mark that information in each of your
confidential submissions to us so we do not repeat or refer to that information in our comment
letters to you.
Brian A. Leuthner
Edge Therapeutics, Inc.
April 17 , 2014
Page 6
You may contact Christine Torney at (202) 551 -3652 or Mary Mast at (202) 551 -3613 if
you have questions regarding comments on the financial statements and related matters. Please
contact Austin Stephenson at (202) 551 -3192, Dan Greenspan at (202) 551 -3623, or me at (202)
551-3715 with any o ther questions.
Sincerely,
/s/ Daniel Greenspan for
Jeffrey P. R iedler
Assista nt Direct or
cc: Via E -mail
David S. Rosenthal, Esq.
Dechert LLP