SEC Company Response from CNS Pharmaceuticals, Inc. (CNSP) (CIK 0001729427) (CNSP) — Jul 16, 2019
CNS Pharmaceuticals, Inc. (CNSP) (CIK 0001729427)
Date: July 16, 2019 · CIK: 0001729427 · Accession: 0001683168-19-002208
AI Filing Summary & Sentiment
File numbers found in text: 333-232443
Show Raw Text
CORRESP
1
filename1.htm
100
N. 18th Street
Suite 300
Philadelphia,
PA 19103
t
202.778.6400
f
202.778.6460
www.schiffhardin.com
Cavas S. Pavri
202.724.6847
cpavri@schiffhardin.com
July 16, 2019
By EDGAR Submission
Securities and Exchange Commission
Division of Corporation Finance
Office of Healthcare & Insurance
100 F Street, N.E.
Washington, D.C. 20549
Attention: Christine Westbrook
Re: CNS Pharmaceuticals, Inc.
Registration Statement on Form
S-1
Filed June 28, 2019
File No. 333-232443
Dear Ms. Westbrook:
This letter is being
submitted on behalf of CNS Pharmaceuticals, Inc. (“CNS Pharmaceuticals” or the “Company”)
in response to the comment letter, dated July 10, 2019, of the staff of the Division of Corporation Finance (the “Staff”)
of the Securities and Exchange Commission (the “Commission”) with respect to the Company’s Registration
Statement on Form S-1 filed June 28, 2019 (the “Original Registration Statement”). The Company’s Amendment
No. 1 to the Registration Statement (the “Registration Statement”) has been submitted to the Commission.
For your convenience,
we have repeated the comment prior to the response in italics.
Registration Statement on Form S-1 filed June 28, 2019
Capitalization, page 25
1. Please address
the following:
• Explain
how you arrived at 15,506,615 shares issued and outstanding, pro forma – IPO as it does not appear evident from the information
in the third bullet of the headnote to the table.
• Regarding
your disclosure that the number of shares of common stock to be outstanding after the offering does not include 1,464,500 shares
of common stock underlying outstanding options, please reconcile that number of shares to disclosure in Note 5 to the financial
statements on F-25 that indicates only 675,000 options are outstanding.
Response: The 15,506,615 share amount
in the Original Registration Statement was incorrect, and has been corrected to state 15,806,615 shares in the Amended Registration
Statement. With respect to the difference between the disclosure in the forepart of the prospectus and the financial statements
regarding option issuances, the Company issued additional options during June 2019. A new subsequent event footnote has been included
in the Amended Registration Statement to reflect such new option issuances.
Securities and Exchange Commission
July 16, 2019
Page 2
Business
Intellectual Property, page 41
2. We note your disclosure that the last of three U.S.
patents are scheduled to expire in 2020. Please clarify the expiration date for each of these patents. Please also expand your
disclosure to discuss whether you expect the expiration of these patents to have a material effect on your business, including
any impact on future operations and the financial position of the company. Please add similar disclosure in the Summary and Risk
Factors to discuss any potential material effect, to the extent applicable.
Response: The Company has added the
following disclosure in the “Prospectus Summary” section of the Amended Registration Statement:
“The U.S. patents for Berbucin that
we have licensed from HPI have varying expiration dates and, when these patents expire, we may be subject to increased competition.
We have three U.S. patents related to Berbucin which expire in March 2020, August 2020 and November 2020. We intend to apply for
orphan drug status with the FDA for the use of Berubicin for the treatment of malignant gliomas, and if we are successful, of which
there is no assurance, we may obtain market exclusivity of up to 7 years from the date of approval of a NDA in the United States.
During that period FDA generally could not approve another product with the same active pharmaceutical ingredient for the same
indication. At the same time, we plan to file additional patent applications that potentially might allow for further increase
of the exclusive market protection for use of Berubicin. However, we can provide no assurance that we will receive orphan drug
status or that we will be able to file or receive additional patent protection. The failure to receive such orphan drug status
or to obtain additional patent protection will reduce the barrier to entry for competition for Berbucin, which may adversely affect
our operations.”
The Company has added the following new
risk factor in the “Risk Factor” section of the Amended Registration Statement:
“Our licensed U.S. patents expire in 2020 and the
expiration of our patents may subject us to increased competition.
The U.S. patents for Berbucin that we have
licensed from HPI have varying expiration dates and, when these patents expire, we may be subject to increased competition. We
have three U.S. patents related to Berbucin which expire in March 2020, August 2020 and November 2020. We intend to apply for orphan
drug status with the FDA for the use of Berubicin for the treatment of malignant gliomas, and if we are successful, of which there
is no assurance, we may obtain market exclusivity of up to 7 years from the date of approval of a NDA in the United States. During
that period FDA generally could not approve another product with the same active pharmaceutical ingredient for the same indication.
At the same time, we plan to file additional patent applications that potentially might allow for further increase of the exclusive
market protection for use of Berubicin. However, we can provide no assurance that we will receive orphan drug status or that we
will be able to file or receive additional patent protection. The failure to receive such orphan drug status or to obtain additional
patent protection will reduce the barrier to entry for competition for Berbucin, which may adversely affect our operations.”
The Company has revised the disclosure in
the “Business – Intellectual Property” section of the Amended Registration Statement:
“Under the HPI License we obtained
the exclusive right to develop certain patented chemical compounds for use in the treatment of cancer anywhere in the world. Our
rights pursuant to the HPI License are contingent on us raising at least $7,000,000 within 12 months from the effective date of
the HPI License, a date which can be extended by an additional 12 months by the payment of a nominal fee. We have licensed the
right to certain intellectual property covering products comprised of anthracycline antibiotic compound, methods for manufacture
and use for the treatment of cancer. The licensed intellectual property includes at least three material patents in the United
States and their foreign counterparts throughout the world. The U.S. patents have varying expiration dates and, when these patents
expire, we may be subject to increased competition. We have three U.S. patents which expire in March 2020, August 2020 and November
2020. We intend to apply for orphan drug status with the FDA for the use of Berubicin for the treatment of malignant gliomas, and
if we are successful, of which there is no assurance, we may obtain market exclusivity of up to 7 years from the date of approval
of a NDA in the United States. During that period FDA generally could not approve another product with the same active pharmaceutical
ingredient for the same indication. At the same time, we plan to file additional patent applications that potentially might allow
for further increase of the exclusive market protection for use of Berubicin. However, we can provide no assurance that we will
receive orphan drug status or that we will be able to file or receive additional patent protection. The failure to receive such
orphan drug status or to obtain additional patent protection will reduce the barrier to entry for competition for Berbucin, which
may adversely affect our operations.”
Securities and Exchange Commission
July 16, 2019
Page 3
Narrative Disclosure to Summary Compensation Table, page
52
3. Please file the amendments to your employment agreement
with Mr. Climaco , the employment agreements with Drs. Silberman and Picker, and the consulting agreement with Mr. Lourie as exhibits
to the registration statement.
Response: The Company has filed the
employment agreements with Drs. Silberman and Picker as exhibits to the Amended Registration Statement. The Company respectfully
advises the Staff that the new compensation arrangements for Messrs. Climaco and Lourie were made by the Board and did not involve
an amendment to the current employment agreement and consulting agreement previously filed as exhibits.
* * *
Should you have any
questions regarding the foregoing, please do not hesitate to contact Cavas Pavri at (202) 724-6847.
Sincerely,
SCHIFF HARDIN LLP
/s/ Cavas Pavri
Cavas Pavri
Enclosures
cc: John Climaco, Chief Executive Officer
Matt Lourie, Chief Financial Officer