UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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):    November 26, 2008    

Commission File No. 000-16929


DOR BIOPHARMA, INC.
(Exact name of small business issuer as specified in its charter)


DELAWARE
 
41-1505029
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)
     
850 Bear Tavern Road,
Suite 201
Ewing, NJ
 
08628
(Address of principal executive offices)
 
(Zip Code)
 
(609) 538-8200
 
 
(Issuer’s telephone number, including area code)
 


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 (see General Instruction A.2. below):
 
[ ] 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 November 26, 2008, DOR BioPharma, Inc. (the “Company”) entered into a letter of intent (the “Letter of Intent”) with Sigma-Tau Pharmaceuticals, Inc. (“Sigma-Tau”), which, among other things,  grants Sigma-Tau an exclusive right to negotiate terms and conditions for a possible business transaction or strategic alliance regarding the Company’s lead product, orBec® (oral beclomethasone dipropionate), and potentially other Company biotherapeutic pipeline compounds until March 1, 2009. In consideration for entering into the Letter of Intent, Sigma-Tau has agreed to purchase $1.5 million of the Company’s common stock, par value $0.001 per share (“Common Stock”), at the market price of $0.09 per share, representing 16,666,667 shares of common stock. The $1.5 million contribution we received will be considered an advance payment to be deducted from future payments due to the Company by Sigma-Tau pursuant to any future orBec® commercialization arrangement reached between the two parties.

The closing of the transaction relating to a business transaction or strategic alliance regarding the Company’s lead product, orBec® (oral beclomethasone dipropionate), and potentially other Company biotherapeutic pipeline compounds is subject to execution of definitive agreements between the parties, containing such representations, warranties, covenants, conditions, indemnities and limitations as are customary in a transaction of this kind. The Company has granted Sigma-Tau demand and piggy-back registration rights with regard to the shares issued to Sigma-Tau.

The foregoing description of the Letter of Intent does not purport to be complete and is qualified in its entirety by reference to the Letter of Intent attached hereto as Exhibit 10.1, which is incorporated herein by reference.

Item 3.02
Unregistered Sales of Equity Securities.
 
Under the terms of Letter of Intent described in Item 1.01 of this Form 8-K, the Company has agreed to issue 16,666,667 shares of Common Stock to Sigma-Tau, for gross proceeds of $1.5 million. The Company has issued demand and piggy-back registration rights to Sigma Tau in connection with this investment.  Such securities will be issued pursuant to an exemption provided by Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder.

The net proceeds from the sale of the securities will be used for working capital and general corporate purposes.

 
 
 

 
Item 9.01.  Financial Statements and Exhibits.
 
(d) Exhibits.

Exhibit No.                                  Title

10.1
Letter of Intent dated November 26, 2008 by and between DOR BioPharma, Inc. and Sigma-Tau Pharmaceuticals, Inc.

99.1
Press release issued by DOR BioPharma, Inc. on December 1, 2008.

 


SIGNATURE

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.

            DOR BIOPHARMA, INC.

December 1, 2008
by:
/s/ Christopher J. Schaber
   
Christopher J. Schaber, Ph.D.
   
President and Chief Executive Officer
   
(Principal Executive Officer)
     



 
 
 

EXHIBIT INDEX

Exhibit                        No.             Description

10.1
Letter of Intent dated November 26, 2008 by and between DOR BioPharma, Inc. and Sigma-Tau Pharmaceuticals, Inc.
 
99.1
Press release issued by DOR BioPharma, Inc. on December 1, 2008.

 
 




 
 
 


 
EXHIBIT 10.1
 
LETTER OF INTENT



 
Sigma-Tau Pharmaceuticals Inc.,  a Nevada corporation having its principal office at 9841 Washingtonian Blvd. Suite 500, Gaithersburg, MD 20878, USA (hereinafter referred to as "STPI")

And

DOR BioPharma Inc., a Delaware corporation having its principal office at 850 Bear Tavern Road, Suite 201 Ewing, NJ 08628 (hereinafter referred to as “DOR”)

 
WHEREAS

a)  
DOR has developed and owns intellectual property rights and data relating to Beclomethasone Dipropionate also identified under the trademark orBec® (the “Product”);

b)  
DOR and STPI signed on January 2, 2007 a Letter of Intent related to the subject matter hereof (the “Previous LOI”;

c)  
STPI wants to complete its evaluations of the Product,  to understand if it is interested or not in pursuing development and commercialization of such Product;

d)  
DOR is willing to enter into exclusive negotiations with STPI for a limited period of time to allow both parties to determine whether and if both parties can negotiate and execute definitive written agreements (“Definitive Agreements”) relating to a possible business transaction or strategic alliance involving the Product and/or any DOR biotherapeutic products other than the biodefense products (RiVax™ and BT-VACC), the terms of which are mutually acceptable to both parties as determined in each party’s sole discretion., and

          e)
DOR and STPI are willing to negotiate in good faith in an effort to enter into an agreement containing terms and conditions substantially similar to the provisions set forth in the June 24, 2008 draft of the licensing and supply agreement.

     NOW, THEREFORE, in consideration of such preambles and the mutual promises and covenants hereinafter set forth, the parties hereby agree as follows:

1.  
a. DOR hereby grants STPI an exclusive right (except with respect to paragraph 1(a)(iii) which shall be non-exclusive) until March 1, 2009  to negotiate with DOR with regard to terms and conditions of a possible business transaction or strategic alliance between DOR and STPI regarding any or all of the following:

(i)  
Acquire European exclusive rights in respect of the development and commercialization of the Product,

(ii)  
Execute a Co-Promotion agreement for the Product with DOR in the United States,

(iii)  
Invest and become a shareholder of DOR,

(iv)  
Participate in the development and commercialization of the Product with DOR,

(v)  
Enter into negotiations in good faith to reach an agreement containing terms and conditions substantially similar to the provisions set forth in the June 24, 2008 draft of the licensing and supply agreement that was under discussion between DOR and STPI, and/or

(vi)  
Acquire rights and/or participate in the development and commercialization of any DOR products other than the Product.

b. During the No-Shop Period (as defined below), DOR will discontinue any and all discussions and will not engage in negotiations with any other party in respect to the items outlined in  Paragraph 1(a).  Accordingly, nothing contained in this Agreement shall prohibit DOR from discussing a transaction with respect to the Product outside of Europe and the United States.
 
 
 
Page 1
 
 
2.  
The No-Shop Period shall last until March 1 st , 2009 (the “No-Shop Period”).

3.  
In consideration for entering into this Agreement, STPI will pay DOR the following amount within two (2) business days upon signature of this Agreement:


(i)  
An amount of One Million, five hundred thousand U.S. Dollars (US$1,500,000.00) by wire transfer of immediately available funds to be immediately converted into unregistered newly issued shares of DOR common stock, $0.001 par value, (the “DOR Common Shares”) at a price per share of $0.09.

DOR hereby grants STPI free of charge a demand registration right exercisable at any time, and unlimited piggyback registration rights and agrees to promptly execute and      deliver to STPI an agreement setting forth such rights.

4.  
Should the parties execute Definitive Agreements during the No-Shop Period (or any other later date mutually agreed upon in writing between the parties); the amount set forth in Paragraph 3 above will be considered as advanced payments to be deducted from future payments due by STPI.

5.  
DOR warrants and represents that it has the authority necessary to enter into this Agreement and perform its obligations hereunder. DOR further warrants and represents that by entering into this Agreement and the transactions contemplated hereunder, DOR will not be in conflict with or in breach of any agreements to which it is a party.

6.  
STPI warrants and represents that it has the authority necessary to enter into this Agreement and perform its obligations hereunder.  STPI further warrants and represents that by entering into this Agreement and the transactions contemplated hereunder, STPI will not be in conflict with or in breach of any agreements to which it is a party.

7.  
This Agreement shall be non-binding with respect to both parties with the exception of paragraphs 1(b), 2, 3, 4, 5, 6, 7, 8, and 9. This Agreement shall not constitute an Agreement with respect to the subject matter of paragraph 1(a). No agreements shall be valid unless made in writing signed by both parties and this agreement may only be amended in writing signed by both parties. No party hereto may assign its rights or obligations under this Agreement without the express prior written consent of the other party hereto, which consent may be withheld at the sole discretion of such party

8.  
Neither party shall under any circumstances be liable for any additional payments or reimbursement, special, incidental or consequential damages of any nature whatsoever arising under or relating to this Agreement.

9.  
This Agreement shall be interpreted under and governed by the laws of the State of New Jersey.

10.  
For the sake of clarity, the Previous LOI will remain in full force and effect for all rights and obligations not yet fulfilled under such Previous LOI at the date hereof.


 
Page 2
 
IN WITNESS WHEREOF , the parties hereto have executed this Agreement by their duly authorized representatives in duplicate, as of the date below written.


DOR BioPharma, Inc.                                                                                     SIGMA-TAU Pharmaceuticals, Inc.

/s/Christopher J. Schaber                                                                                       /s/Gregg A. Lapointe
Christopher J. Schaber, PhD                                                                                Gregg A. Lapointe
President & CEO                                                                                                    Chief Executive Officer
Date: November 26, 2008                                                                                      Date: November 26, 2008



 
Page 3
 


Exhibit 99.1

DOR BIOPHARMA, INC.
 
DOR BioPharma Receives $1.5 Million from Sigma-Tau Pharmaceuticals for Exclusive Right to Negotiate orBec ® Strategic Alliance


Ewing, NJ – December 1, 2008 – DOR BioPharma, Inc. (OTCBB: DORB) (“DOR” or the “Company”) announced today that it has received $1.5 million under a letter of intent with Sigma-Tau Pharmaceuticals, Inc. (“Sigma-Tau”), which grants Sigma-Tau an exclusive right to negotiate terms and conditions for a possible business transaction or strategic alliance regarding orBec ®  (oral beclomethasone dipropionate or oral BDP) and potentially other DOR pipeline compounds until March 1, 2009.

Under the terms of the letter of intent, Sigma-Tau has purchased $1.5 million of DOR’s common stock at the market price of $0.09 per share, which will be considered an advance payment to be deducted from upfront monies due to DOR by Sigma-Tau pursuant to any future orBec ® commercialization arrangement reached between the two parties.

Gregg Lapointe, Chief Executive Officer of Sigma-Tau, commented, “As a result of our long-standing relationship with DOR, we are confident orBec ® will prove successful in the confirmatory Phase 3 clinical program.  orBec ® is also a very good fit with our rare disease focus, particularly with our other development activities in the transplant area.  We look forward to finalizing our collaboration with DOR in the progression of this important compound.”
 
“We are very pleased with Sigma-Tau’s interest in orBec ® ,” said Christopher J. Schaber, PhD, President and CEO of DOR. “We have known Sigma-Tau for a long time and have observed their strong commitment in working with other biotech companies, and have confidence in their expertise in commercializing orphan products.  We look forward to productive discussions with Sigma-Tau to reach a mutually beneficial collaboration.”
 
The common stock sold to Sigma-Tau has not been registered under the Securities Act of 1933 (the “Act”) or any state securities laws, and the securities may not be offered or sold absent registration or an applicable exemption from the registration requirements of the Act and applicable state securities laws.

About orBec ®

orBec ® represents a first-of-its-kind oral, locally acting therapy tailored to treat the gastrointestinal manifestation of GVHD, the organ system where GVHD is most frequently encountered and highly problematic. orBec ® is intended to reduce the need for systemic immunosuppressive drugs to treat GI GVHD. BDP is a highly potent, topically active corticosteroid that has a local effect on inflamed tissue. BDP has been marketed in the US and worldwide since the early 1970s as the active pharmaceutical ingredient in a nasal spray and in a metered dose inhaler for the treatment of patients with allergic rhinitis and asthma. orBec ®   is formulated for oral administration as a single product consisting of two tablets; one tablet is intended to release BDP in the proximal portions of the GI tract, and the other tablet is intended to release BDP in the distal portions of the GI tract.
 
Two prior randomized, double-blinded, placebo-controlled Phase 2 and 3 clinical trials demonstrated that orBec ® provides clinically meaningful outcomes when compared with the current standard of care, including a lowered exposure to systemic corticosteroids following allogeneic transplantation. Currently, there are no approved products to treat GI GVHD. The Phase 3 trial was a 129-patient pivotal Phase 3 multi-center clinical trial of orBec ® conducted at 16 leading bone marrow/stem cell transplantation centers in the US and France. Although orBec ®   did not achieve statistical significance in the primary endpoint of its pivotal trial, namely median time to treatment failure through Day 50 (p-value 0.1177), orBec ® did achieve statistical significance in other key secondary endpoints such as the proportion of patients free of GVHD at Day 50 (p-value 0.05) and Day 80 (p-value 0.005) and the median time to treatment failure through Day 80 (p-value 0.0226), as well as a 66% reduction in mortality among patients randomized to orBec ® at 200 days post-transplant with only 5 patient (8%) deaths in the orBec ®   group compared to 16 patient (24%) deaths in the placebo group (p-value 0.0139). At one year post randomization in the pivotal Phase 3 trial, 18 patients (29%) in the orBec ® group and 28 patients (42%) in the placebo group died within one year of randomization (46% reduction in mortality, hazard ratio 0.54, 95% CI: 0.30, 0.99, p=0.04, stratified log-rank test).
 
About Sigma-Tau Pharmaceuticals, Inc.

Sigma-Tau Pharmaceuticals, Inc. is a U.S. based, wholly owned subsidiary of the Sigma-Tau Group, and is dedicated solely to the global development and commercialization of medicines for
patients with rare diseases.  Sigma-Tau Pharmaceuticals, Inc. is based in Gaithersburg, Maryland.
 
Since 1989, the company’s products have been focused on rare diseases, kidney disease, and cancer. With more than 6,000 identified rare diseases that affect approximately 25 million patients in the U.S., Sigma-Tau places its considerable scientific resources behind the development and commercialization of compounds that benefit the few. The company has a substantial development program focused on transplant, cancer, inherited genetic disorders, malaria, and other areas of unmet medical need. For more information about the company, visit  www.sigmatau.com .

About DOR BioPharma, Inc.

DOR BioPharma, Inc. (DOR) is a late-stage biopharmaceutical company developing products to treat life-threatening side effects of cancer treatments and serious gastrointestinal diseases, and vaccines for certain bioterrorism agents. DOR’s lead product, orBec ® (oral beclomethasone dipropionate or BDP), is a potent, locally acting corticosteroid being developed for the treatment of gastrointestinal Graft-versus-Host disease (GI GVHD), a common and potentially life-threatening complication of hematopoietic cell transplantation. DOR expects to begin a confirmatory Phase 3 clinical trial of orBec ® for the treatment of GI GVHD in 1H 2009. orBec ® is also currently the subject of an NIH-supported, Phase 2, randomized, double-blind, placebo-controlled trial in the prevention of acute GVHD. Oral BDP may also have application in treating other gastrointestinal disorders characterized by severe inflammation. Additionally, DOR has a Lipid Polymer Micelle (LPM™) drug delivery technology for the oral delivery of leuprolide for the treatment of prostate cancer and endometriosis.

Through its Biodefense Division, DOR is developing biomedical countermeasures pursuant to the Project BioShield Act of 2004. DOR’s biodefense products in development are recombinant subunit vaccines designed to protect against the lethal effects of exposure to ricin toxin, botulinum toxin and anthrax. DOR’s ricin toxin vaccine, RiVax TM , has been shown to be well tolerated and immunogenic in a Phase 1 clinical trial in normal volunteers.

For further information regarding DOR BioPharma, Inc., please visit the Company's website at www.dorbiopharma.com.

This press release contains forward-looking statements that reflect DOR BioPharma, Inc.'s current expectations about its future results, performance, prospects and opportunities. Statements that are not historical facts, such as "anticipates," "believes," "intends," or similar expressions, are forward-looking statements. These statements are subject to a number of risks, uncertainties and other factors that could cause actual events or results in future periods to differ materially from what is expressed in, or implied by, these statements. DOR cannot assure you that it will be able to successfully develop or commercialize products based on its technology, including orBec®, particularly in light of the significant uncertainty inherent in developing vaccines against bioterror threats, manufacturing and conducting preclinical and clinical trials of vaccines, and obtaining regulatory approvals, that its cash expenditures will not exceed projected levels, that it will be able to secure partnerships or obtain financing within the next nine months to meet operating expenses and to conduct its upcoming confirmatory Phase 3 trial of orBec®, that product development and commercialization efforts will not be reduced or discontinued due to difficulties or delays in clinical trials or due to lack of progress or positive results from research and development efforts, that it will be able to successfully obtain any further grants and awards, maintain its existing grants which are subject to performance, enter into any biodefense procurement contracts with the US Government or other countries, that the US Congress may not pass any legislation that would provide additional funding for the Project BioShield program, that it will be able to patent, register or protect its technology from challenge and products from competition or maintain or expand its license agreements with its current licensors, or that its business strategy will be successful. Important factors which may affect the future use of orBec® for gastrointestinal GVHD include the risks that: the FDA's requirement that DOR conduct additional clinical trials to demonstrate the safety and efficacy of orBec® will take a significant amount of time and money to complete and positive results leading to regulatory approval cannot be assumed; DOR is dependent on the expertise, effort, priorities and contractual obligations of third parties in the clinical trials, manufacturing, marketing, sales and distribution of its products; orBec® may not gain market acceptance if it is eventually approved by the FDA; and others may develop technologies or products superior to orBec®. These and other factors are described from time to time in filings with the Securities and Exchange Commission, including, but not limited to, DOR's most recent reports on Forms 10-Q and 10-KSB. Unless required by law, DOR assumes no obligation to update or revise any forward-looking statements as a result of new information, future events.

Company Contact :

Evan Myrianthopoulos
Chief Financial Officer
(609) 538-8200 | www.dorbiopharma.com

DOR BioPharma, Inc.
850 Bear Tavern Road, Suite 201
Ewing, NJ 08628