o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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94-3171943
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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2600 Kelly Road, Suite 100
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Warrington, Pennsylvania 18976-3622
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(Address of principal executive offices)
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page | ||
Item 1.
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1
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1
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2
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3
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4
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Item 2.
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14
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Item 3.
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26
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Item 4.
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26
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PART II - OTHER INFORMATION
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||
Item 1.
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27
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Item 1A.
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27
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Item 2.
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31
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Item 6.
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31
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32
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•
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risks relating to the ability of our sales and marketing organization to effectively introduce SURFAXIN in the U.S. and, if approved, our other product candidates, in a timely manner, if at all; and that we may not succeed in developing a sufficient market awareness of our products or that our product candidates may not gain market acceptance by physicians, patients, healthcare payers and others in the medical community;
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•
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the risk that, if we fail to successfully commercialize SURFAXIN as planned, and if we do not achieve revenues consistent with our expectations, our revenues would be limited, and we may be unable to secure additional capital when needed, whether from strategic alliances or other sources, to continue our commercial and medical affairs activities, as well as our research and development programs and our operations would be impaired, which ultimately could have a material adverse effect on our business, financial condition and results of operations;
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•
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the risks that, although the U.S. Food and Drug Administration (FDA) has completed its review and cleared our investigational new drug (IND) application for our AEROSURF
®
phase 2 clinical program, and we expect to initiate our phase 2 clinical program in the fourth quarter of 2013, our clinical program may be delayed, or fail, which will harm our business;
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•
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the risk that we may be unable to enter into strategic alliances and/or collaboration agreements that would assist and support us in markets outside the U.S. with the development of our KL
4
surfactant pipeline products, beginning with AEROSURF (our combination drug-device product based on our aerosolized KL
4
surfactant and our capillary aerosol generator (CAG) technology that we are developing to address RDS in premature infants), and including the development of our lyophilized KL
4
surfactant, and, if approved, commercialization of AEROSURF in markets outside the U.S.; and support the commercialization of SURFAXIN in countries where regulatory approval is facilitated by the information contained in the SURFAXIN new drug application (NDA) approved by the FDA; and potentially support the development and, if approved, commercialization, of our other pipeline products;
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•
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risks relating to our research and development activities, which among other things involve time-consuming and expensive preclinical studies and potentially multiple clinical trials that may be subject to potentially significant delays or regulatory holds or fail;
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•
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risks related to our efforts to gain regulatory approval, in the U.S. and elsewhere, for our drug product and medical device candidates, including AEROSURF, a drug-device combination product that we are developing to address RDS in premature infants, and our lyophilized KL
4
surfactant that we expect will be the drug component of AEROSURF and potentially be developed as a life cycle extension of SURFAXIN under the name SURFAXIN LS™ ;
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•
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risks relating to the transfer of our manufacturing technology to contract manufacturing organizations (CMOs) and assemblers;
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•
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risks relating to our and our CMOs' ability to manufacture our KL
4
surfactant, in liquid and lyophilized dosage forms, which must be processed in an aseptic environment and tested using sophisticated and extensive analytical methodologies and quality control release and stability tests, for both commercial and research and development activities;
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•
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the risk that we, our CMOs or any of our third-party suppliers, many of which are single-source providers, may encounter problems or delays in manufacturing our KL
4
surfactant drug products and the APIs used in the manufacture of our drug product, CAG devices and other materials on a timely basis or in an amount sufficient to support the commercial introduction of SURFAXIN and the AFECTAIR device for infants, our aerosol-conducting airway connector, as well as our research and development activities for AEROSURF and our other product candidates;
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•
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the risks that, even if we succeed with the commercial introduction of SURFAXIN, we nevertheless in the future will require, but may be unable to secure, significant additional capital to continue our operations, fund our debt service and support our research and development activities until such time, if ever, that our revenues from all sources are sufficient to offset our cash outflows. To the extent that we raise such capital through additional financings, such additional financings could result in equity dilution;
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•
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risks relating to our pledge of substantially all of our assets to secure our obligations under our loan facility (Deerfield Facility) with Deerfield Management Company, L.P., which could make it more difficult for us to secure additional capital to satisfy our obligations and require us to dedicate cash flow to payments for debt service, which would reduce the availability of our cash flow to fund working capital, capital expenditures and other investment; and
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•
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other risks and uncertainties as detailed in “Risk Factors” in our most recent Annual Report on Form 10‑K filed with the Securities and Exchange Commission (SEC) on March 15, 2013, and our other filings with the SEC and any amendments thereto, and in the documents incorporated by reference in this report.
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September 30,
2013
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December 31,
2012
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||||||
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(Unaudited)
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||||||
ASSETS
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||||||
Current Assets:
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||||||
Cash and cash equivalents
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$
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21,177
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$
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26,892
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||||
Inventory
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117
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195
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||||||
Prepaid expenses and other current assets
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418
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719
|
||||||
Total Current Assets
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21,712
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27,806
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||||||
Property and equipment, net
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1,417
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1,737
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||||||
Restricted cash
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400
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400
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||||||
Other assets
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102
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–
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||||||
Total Assets
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$
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23,631
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$
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29,943
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||||
LIABILITIES & STOCKHOLDERS’ EQUITY
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||||||||
Current Liabilities:
|
||||||||
Accounts payable
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$
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1,489
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$
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1,166
|
||||
Accrued expenses
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5,071
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4,159
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||||||
Common stock warrant liability
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4,678
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6,305
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||||||
Equipment loans and capitalized leases, current portion
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72
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69
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||||||
Total Current Liabilities
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11,310
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11,699
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||||||
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||||||||
Long-term debt, net of discount of $3,674 at September 30, 2013 and $0 at December 31, 2012
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6,326
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–
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||||||
Equipment loans and capitalized leases, non-current portion
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89
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148
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||||||
Other liabilities
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431
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443
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||||||
Total Liabilities
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18,156
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12,290
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||||||
Stockholders’ Equity:
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||||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding
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–
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–
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||||||
Common stock, $0.001 par value; 150,000,000 shares authorized at September 30, 2013, 100,000,000 shares authorized at December 31, 2012; 54,946,327 and 43,673,636 shares issued, 54,925,435 and 43,652,744 shares outstanding at September 30, 2013 and December 31, 2012, respectively
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55
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44
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||||||
Additional paid-in capital
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476,695
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455,398
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||||||
Accumulated deficit
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(468,221
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)
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(434,735
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)
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||||
Treasury stock (at cost); 20,892 shares
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(3,054
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)
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(3,054
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)
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Total Stockholders’ Equity
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5,475
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17,653
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||||||
Total Liabilities & Stockholders’ Equity
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$
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23,631
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$
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29,943
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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||||||||||||||
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2013
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2012
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2013
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2012
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||||||||||||
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||||||||||||
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||||||||||||
Grant revenue
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$
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60
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$
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–
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$
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315
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$
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–
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||||||||
Expenses:
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||||||||||||||||
Research and development
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6,574
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5,743
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21,909
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15,482
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||||||||||||
Selling, general and administrative
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4,299
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4,255
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12,648
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9,912
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||||||||||||
Total expenses
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10,873
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9,998
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34,557
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25,394
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Operating loss
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(10,813
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)
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(9,998
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)
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(34,242
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)
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(25,394
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)
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||||||||
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||||||||||||||||
Change in fair value of common stock warrant liability
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(1,059
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)
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(3,309
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)
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1,627
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(5,063
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)
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|||||||||
Interest income
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1
|
1
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2
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5
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||||||||||||
Interest expense
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(353
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)
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(4
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)
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(873
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)
|
(12
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)
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||||||||
Other expense
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-
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(36
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)
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-
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(36
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)
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||||||||||
Net loss
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$
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(12,224
|
)
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$
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(13,346
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)
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$
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(33,486
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)
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$
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(30,500
|
)
|
||||
Net loss per common share –
|
||||||||||||||||
Basic
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$
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(0.22
|
)
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$
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(0.31
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)
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$
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(0.68
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)
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$
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(0.80
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)
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||||
Diluted
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$
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(0.22
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)
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$
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(0.31
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)
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$
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(0.69
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)
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$
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(0.80
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)
|
||||
Weighted average number of common shares outstanding
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||||||||||||||||
Basic
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54,792
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43,444
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49,235
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38,061
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||||||||||||
Diluted
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54,792
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43,444
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50,377
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38,061
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Nine Months Ended
September 30,
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|||||||
|
2013
|
2012
|
||||||
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|
||||||
Cash flows from operating activities:
|
|
|
||||||
Net loss
|
$
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(33,486
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)
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$
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(30,500
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
537
|
855
|
||||||
Stock-based compensation and 401(k) match
|
2,367
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1,805
|
||||||
Fair value adjustment of common stock warrants
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(1,627
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)
|
5,063
|
|||||
Loss on sale or disposal of equipment
|
–
|
36
|
||||||
Amortization of discount on long-term debt
|
302
|
–
|
||||||
Changes in:
|
||||||||
Inventory
|
78
|
(128
|
)
|
|||||
Prepaid expenses and other current assets
|
301
|
(723
|
)
|
|||||
Accounts payable
|
323
|
(903
|
)
|
|||||
Accrued expenses
|
912
|
693
|
||||||
Other assets
|
(115
|
)
|
–
|
|||||
Other liabilities
|
(12
|
)
|
(19
|
)
|
||||
Net cash used in operating activities
|
(30,420
|
)
|
(23,821
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(204
|
)
|
(593
|
)
|
||||
Net cash used in investing activities
|
(204
|
)
|
(593
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of securities, net of expenses
|
15,114
|
43,605
|
||||||
Proceeds from issuance of long-term debt, net of expenses
|
9,850
|
–
|
||||||
Proceeds from exercise of common stock warrants and options
|
1
|
6,741
|
||||||
Repayment of equipment loans and capital lease obligations
|
(56
|
)
|
(57
|
)
|
||||
Net cash provided by financing activities
|
24,909
|
50,289
|
||||||
Net (decrease) / increase in cash and cash equivalents
|
(5,715
|
)
|
25,875
|
|||||
Cash and cash equivalents – beginning of period
|
26,892
|
10,189
|
||||||
Cash and cash equivalents – end of period
|
$
|
21,177
|
$
|
36,064
|
||||
Supplementary disclosure of cash flows information:
|
||||||||
Interest paid
|
$
|
559
|
$
|
10
|
(in thousands)
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Numerator:
|
||||||||||||||||
Net loss as reported
|
$
|
(12,224
|
)
|
$
|
(13,346
|
)
|
$
|
(33,486
|
)
|
$
|
(30,500
|
)
|
||||
Less: income from change in fair value of warrant liability
|
–
|
–
|
(1,525
|
)
|
–
|
|||||||||||
Numerator for diluted net loss per common share
|
$
|
(12,224
|
)
|
$
|
(13,346
|
)
|
$
|
(35,011
|
)
|
$
|
(30,500
|
)
|
||||
|
||||||||||||||||
Denominator:
|
||||||||||||||||
Basic weighted average common shares outstanding
|
54,792
|
43,444
|
49,235
|
38,061
|
||||||||||||
Dilutive common shares from assumed warrant exercises
|
–
|
–
|
1,142
|
–
|
||||||||||||
Diluted weighted average common shares outstanding
|
54,792
|
43,444
|
50,377
|
38,061
|
· | Level 1 – Quoted prices in active markets for identical assets and liabilities. |
· | Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
· | Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
|
Fair Value
|
Fair value measurement using | ||||||||||||||
|
September 30, 2013
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Money Market
|
$
|
19,877
|
$
|
19,877
|
$
|
–
|
$
|
–
|
||||||||
Certificate of Deposit
|
400
|
400
|
–
|
–
|
||||||||||||
Total Assets
|
$
|
20,277
|
$
|
20,277
|
$
|
–
|
$
|
–
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Common stock warrant liability
|
$
|
4,678
|
$
|
–
|
$
|
–
|
$
|
4,678
|
|
Fair Value
|
Fair value measurement using | ||||||||||||||
|
December 31, 2012
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Money Market
|
$
|
23,377
|
$
|
23,377
|
$
|
–
|
$
|
–
|
||||||||
Certificate of Deposit
|
400
|
400
|
–
|
–
|
||||||||||||
Total Assets
|
$
|
23,777
|
$
|
23,777
|
$
|
–
|
$
|
–
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Common stock warrant liability
|
$
|
6,305
|
$
|
–
|
$
|
–
|
$
|
6,305
|
(in thousands)
|
Fair Value Measurements of
Common Stock Warrants Using
Significant Unobservable Inputs
(Level 3)
|
|||
|
||||
Balance at December 31, 2012
|
$
|
6,305
|
||
Change in fair value of common stock warrant liability
|
(1,627
|
)
|
||
Balance at September 30, 2013
|
$
|
4,678
|
(in thousands)
|
Fair Value Measurements of
Common Stock Warrants Using
Significant Unobservable Inputs
(Level 3)
|
|||
|
||||
Balance at December 31, 2011
|
$
|
6,996
|
||
Exercise of warrants
|
(136
|
)
|
||
Change in fair value of common stock warrant liability
|
5,063
|
|||
Balance at September 30, 2012
|
$
|
11,923
|
Significant Unobservable Input
Assumptions of Level 3 Valuations
|
September 30, 2013
|
December 31, 2012
|
||||||
|
||||||||
Historical Volatility
|
55% - 61
|
%
|
56% -80
|
%
|
||||
Expected Term (in years)
|
0.6 – 2.4
|
1.4 – 3.2
|
||||||
Risk-free interest rate
|
0.05% - 0.45
|
%
|
0.16% - 0.36
|
%
|
Significant Unobservable Input
Assumptions of Level 3 Valuations
|
|
|||
|
|
|||
Historical Volatility
|
101
|
%
|
||
Expected Term (in years)
|
6.0
|
|||
Risk-free interest rate
|
1.175
|
%
|
Note Payable
|
$
|
10,000
|
||
Unamortized discount
|
(3,674
|
)
|
||
Long-term debt, net of discount
|
$
|
6,326
|
(in thousands)
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
||||||||||||||||
Cash interest expense
|
$
|
221
|
$
|
–
|
$
|
551
|
$
|
–
|
||||||||
Non-cash amortization of debt discounts
|
125
|
–
|
302
|
–
|
||||||||||||
Amortization of debt costs
|
5
|
–
|
13
|
–
|
||||||||||||
Total Deerfield Facility interest expenses
|
$
|
351
|
$
|
–
|
$
|
866
|
$
|
–
|
|
|
|
Fair Value of Warrants
(in thousands)
|
|||||||||||||
Issuance
Date
|
Number of
Warrant
Shares
|
Exercise
Price
|
Warrant
Expiration
Date
|
Issuance
Date
|
September 30,
2013
|
|||||||||||
|
|
|
|
|
||||||||||||
5/13/2009
|
466,667
|
$
|
17.25
|
5/13/2014
|
$
|
3,360
|
$
|
–
|
||||||||
2/23/2010
|
916,669
|
12.75
|
2/23/2015
|
5,701
|
2
|
|||||||||||
2/22/2011
|
4,948,750
|
1.50
|
2/22/2016
|
8,004
|
4,676
|
|
2013
|
2012
|
||||||
|
||||||||
Weighted-average expected volatility
|
110
|
%
|
110
|
%
|
||||
Weighted-average expected term (in years)
|
4.7
|
4.8
|
||||||
Weighted-average risk-free interest rate
|
0.74
|
%
|
0.79
|
%
|
||||
Expected dividends
|
–
|
–
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Research & Development
|
$
|
210
|
$
|
150
|
$
|
551
|
$
|
388
|
||||||||
Selling, General & Administrative
|
431
|
324
|
1,053
|
889
|
||||||||||||
Total
|
$
|
641
|
$
|
474
|
$
|
1,604
|
$
|
1,277
|
·
|
SURFAXIN for the Prevention of Respiratory Distress Syndrome (RDS) in Premature Infants at High Risk for RDS
|
In
April 2013, we received a response from the FDA to a submission we made in the fourth quarter of 2012 concerning our improved analytical chemistry method and updated product specifications for SURFAXIN drug product. The April FDA correspondence included a request for specific information and documents, recommendations regarding documentation of product specifications generally and for the upper limit of a single product specification, and a request for supporting data using the improved and revalidated analytical chemistry method. We completed the required work and submitted our response to the FDA on June 7, 2013. On October 4, 2013, we received confirmation that the FDA has agreed with our updated product specifications. We have now manufactured new drug product and have initiated the commercial introduction of SURFAXIN.
|
On August 7, 2013, we entered into a Pharmaceutical Manufacturing and Supply Agreement with our contract manufacturer, DSM Pharmaceuticals, Inc. (DSM) providing for the manufacture of SURFAXIN drug product. We anticipate that DSM will become our principal manufacturer of SURFAXIN upon expiration of the lease for our manufacturing operations in Totowa, NJ, currently in mid-2015.
See,
“– Results of Operations – Research and Development Expenses – Product Development and Manufacturing.”
|
·
|
AEROSURF
|
|
On
October 17, 2013, we announced that we have submitted an Investigational New Drug (IND) Application to the FDA for our AEROSURF phase 2 clinical program
.
The FDA has completed its review and cleared our IND, and we expect to initiate our phase 2 clinical program in the fourth quarter of 2013.
|
|
The primary goal of the study (phase 2a) of the AEROSURF clinical program is to evaluate the safety and tolerability of a single exposure of aerosolized KL
4
surfactant drug product. This study is planned as an escalating dose study evaluating three dose levels of aerosolized KL
4
surfactant. The comparator is nCPAP alone. The study will be conducted in three centers in the U.S. and is expected to be completed by mid-2014. The design of the second study (phase 2b) will be informed by the results of the phase 2a study. The primary objective of this study will be to determine the optimal dose and to estimate the efficacy margin, information that will inform the design of the phase 3 efficacy and safety study. Phase 2b is expected to be conducted in multiple centers and completed by mid-2015.
|
DSM has manufactured the clinical lyophilized KL
4
surfactant drug product needed to conduct the phase 2a study of our AEROSURF clinical program. On October 24, 2013, we entered into a Master Services Agreement with DSM providing for the further development of our lyophilized KL
4
surfactant and manufacture of additional drug supply needed to complete our phase 2 clinical program, and potentially for our phase 3 clinical program and, if approved, commercial supply.
|
With the assistance of Battelle Memorial Institute (Battelle), we have completed development of a clinic-ready CAG device, which has passed a rigorous design verification testing program, and have manufactured a sufficient number of clinic-ready CAGs to support the initial phase of our AEROSURF clinical program. We plan to continue development of our CAG and expect to manufacture additional devices to support completion of our phase 2 clinical program and potentially our phase 3 clinical program. The CAG has been designed to produce aerosolized KL
4
surfactant in volumes up to 10 times the output produced by currently available aerosol devices.
|
(in thousands)
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
||||||||||||||||
Product development and manufacturing
|
$
|
4,769
|
$
|
4,258
|
$
|
16,591
|
$
|
11,298
|
||||||||
Medical and regulatory operations
|
1,506
|
1,400
|
4,416
|
3,475
|
||||||||||||
Direct preclinical and clinical programs
|
299
|
85
|
902
|
709
|
||||||||||||
Total Research & Development Expenses
|
$
|
6,574
|
$
|
5,743
|
$
|
21,909
|
$
|
15,482
|
(in thousands)
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Selling, General and Administrative Expenses
|
$
|
4,299
|
$
|
4,255
|
$
|
12,648
|
$
|
9,912
|
(in thousands)
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Change in fair value of common stock warrant liability (Income / (Expense))
|
$
|
(1,059
|
)
|
$
|
(3,309
|
)
|
$
|
1,627
|
$
|
(5,063
|
)
|
(in thousands)
|
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Interest Expense
|
$
|
(353
|
)
|
$
|
(4
|
)
|
$
|
(873
|
)
|
$
|
(12
|
)
|
(in thousands)
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
||||||||||||||||
Cash interest expense
|
$
|
221
|
$
|
–
|
$
|
551
|
$
|
–
|
||||||||
Non-cash amortization of debt discounts
|
125
|
–
|
302
|
–
|
||||||||||||
Amortization of debt costs
|
5
|
–
|
13
|
–
|
||||||||||||
Total Deerfield Facility interest expenses
|
$
|
351
|
$
|
–
|
$
|
866
|
$
|
–
|
(in thousands)
|
Nine Months Ended
September 30,
|
|||||||
|
2013
|
2012
|
||||||
|
||||||||
Financings pursuant to common stock offerings
|
$
|
15,114
|
$
|
42,145
|
||||
Issuance of long-term debt, net of expenses
|
9,850
|
–
|
||||||
Financings under the ATM Program
|
–
|
1,460
|
||||||
Repayment of equipment loans and capital lease obligations
|
(56
|
)
|
(57
|
)
|
||||
Exercise of stock options and warrants
|
1
|
6,741
|
||||||
Cash flows from financing activities, net
|
$
|
24,909
|
$
|
50,289
|
Note Payable
|
$
|
10,000
|
||
Unamortized discount
|
(3,674
|
)
|
||
Long-term debt, net of discount
|
$
|
6,326
|
(in thousands)
|
2013
|
2014
|
2015
|
2016
|
2017
|
There-
after
|
Total
|
|||||||||||||||||||||
Operating lease obligations
|
$
|
272
|
$
|
1,087
|
$
|
1,024
|
$
|
934
|
$
|
935
|
$
|
158
|
$
|
4,410
|
||||||||||||||
Deerfield Loan Facility
(1)
|
–
|
–
|
–
|
–
|
3,330
|
6,670
|
10,000
|
|||||||||||||||||||||
Equipment loan obligations
|
13
|
79
|
69
|
–
|
–
|
–
|
161
|
|||||||||||||||||||||
Total
|
$
|
285
|
$
|
1,166
|
$
|
1,093
|
$
|
934
|
$
|
4,265
|
$
|
6,828
|
$
|
14,571
|
(1)
See,
“– Loan Facility with Deerfield”
|
●
|
seek collaborators for one or more of our development programs for territories that we had planned to retain or on terms that are less favorable than might otherwise be available; and/or
|
●
|
relinquish or license on unfavorable terms our rights to technologies or product candidates that we otherwise would seek to develop or commercialize ourselves.
|
●
|
the number of hospitals and critical care centers that agree to place SURFAXIN drug product on their formulary lists and the length of time required to achieve broad formulary acceptance;
|
●
|
the willingness of the target hospitals to accept and employ WARMING CRADLE
®
dry-block heater;
|
●
|
the effectiveness of our marketing, sales and medical affairs organizations and their ability to (a) accurately describe SURFAXIN consistent with its approved labeling, and (b) educate and provide critical care providers and hospitals with medical and scientific education and information concerning our products;
|
●
|
our ability to gain access to the entire market with our commercial organizations;
|
●
|
the safety and efficacy of SURFAXIN, our ability to provide hospitals acceptable evidence of the safety and efficacy of SURFAXIN, and the perceived advantages of SURFAXIN over alternative treatment methods;
|
●
|
the pharmacoeconomic benefits (which are determined by comparing, among other things, the cost and effects of a product when compared to different treatment options) and cost-effectiveness of our products;
|
●
|
the budget impact of adding our products and devices to relevant formulary and medical device hospital lists and the availability, cost and potential advantages of alternative treatments, including less expensive generic drugs and other competitive products;
|
●
|
the availability of different size drug vials and medical devices to meet the specific needs of healthcare practitioners;
|
●
|
the claims, limitations, warnings and other information that appear in the package insert and labeling of SURFAXIN drug product;
|
●
|
the willingness of third-party payers, including government payers, to provide coverage and reimbursements to patients, physicians and other providers who wish to prescribe and use our products;
|
●
|
our ability to secure and maintain regulatory marketing approvals from the U.S. and foreign regulatory authorities;
|
●
|
the rate of preterm births;
|
●
|
the number of infants who are diagnosed with RDS and the number treated with SURFAXIN;
|
●
|
the growth of commercial sales;
|
●
|
our ability to meet commercial demand for SURFAXIN, including through maintenance of commercial supplies of our active drug substances and other excipients, and manufacturing capabilities, by ourselves and through third-party manufacturers; and commercial inventory supplies of our medical device products; and
|
●
|
the sufficiency of coverage or reimbursement by third parties.
|
●
|
the number of clinical sites;
|
●
|
the size of the patient population;
|
●
|
the eligibility and enrollment criteria for the study;
|
●
|
the willingness of patients’ parents or guardians to participate in the clinical trial;
|
●
|
the existence of competing clinical studies;
|
●
|
the existence of alternative available products; and
|
●
|
geographical and geopolitical considerations.
|
●
|
we may be unable to successfully identify manufacturers with whom we might establish appropriate arrangements on acceptable terms, if at all, because the number of potential manufacturers is limited and the FDA must approve any replacement CMO. This approval could take as long as a year and would require new testing and compliance inspections as well as a potentially lengthy qualification process;
|
●
|
CMOs might be unable to manufacture our products in the volume and to our specifications to meet our commercial and clinical needs, or we may have difficulty scheduling the production of drug product and devices in a timely manner to meet our timing requirements;
|
●
|
CMOs may not perform as agreed, or may not remain in the CMO business for a lengthy time, or may refuse to renew an expiring agreement as expected, or may fail to product a sufficient supply to meet our commercial and/or clinical needs;
|
●
|
CMOs are subject to ongoing periodic unannounced inspection by the FDA, the Drug Enforcement Administration, and corresponding state agencies to ensure strict compliance with cGMP and/or quality system regulations (QSR) and other government regulations and corresponding foreign standards. We do not have control over CMO’s compliance with these regulations and standards;
|
●
|
moreover, if we desire to make our drug products and/or devices available outside the U.S. for commercial or clinical purposes, our CMOs would become subject to, and may not be able to comply with, corresponding manufacturing and quality system regulations of the various foreign regulators having jurisdiction over our activities abroad. Such failures could restrict our ability to execute our business strategies;
|
●
|
if any third-party manufacturer makes improvements in the manufacturing process for our products, we may not have rights to, or may have to share, the intellectual property rights to any such innovation. We may be required to pay fees or other costs for access to such improvements; and
|
●
|
each of these risks could delay our commercial manufacturing plans and our development programs, the approval, if any, of our product candidates by the FDA or result in higher costs or deprive us of potential product revenues.
|
|
Discovery Laboratories, Inc.
|
|
|
(Registrant)
|
|
|
|
|
Date:
November 12, 2013
|
By:
|
/s/ John G. Cooper
|
|
|
John G. Cooper
|
|
|
President and Chief Executive Officer and Chief Financial Officer
|
|
|
(Principal Executive and Financial Officer)
|
Exhibit No.
|
Description
|
Method of Filing
|
|
|
|
|
|
3.1
|
Amended and Restated Certificate of Incorporation of Discovery Laboratories, Inc. (Discovery) filed as of August 1, 2013, including amendments reflected in a Certificate of Amendment to the Restated Certificate of Incorporation of Discovery filed on December 27, 2010, and in a Certificate of Amendment to the Restated Certificate of Incorporation of Discovery filed on October 3, 2011
|
Incorporated by reference to Exhibit 3.1 to Discovery’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, as filed with the SEC on August 8, 2013.
|
|
|
|
|
|
3.2
|
Certificate of Designations, Preferences and Rights of Series A Junior Participating Cumulative Preferred Stock of Discovery, dated February 6, 2004
|
Incorporated by reference to Exhibit 2.2 to Discovery’s Form 8-A, as filed with the SEC on February 6, 2004.
|
|
|
|
|
|
3.3
|
Amended and Restated By-Laws of Discovery, as amended effective September 3, 2009
|
Incorporated by reference to Exhibit 3.1 to Discovery’s Current Report on Form 8-K, as filed with the SEC on September 4, 2009.
|
|
|
|
|
|
4.1
|
Shareholder Rights Agreement, dated as of February 6, 2004, by and between Discovery and Continental Stock Transfer & Trust Company
|
Incorporated by reference to Exhibit 10.1 to Discovery’s Current Report on Form 8-K, as filed with the SEC on February 6, 2004.
|
|
|
|
|
|
4.2
|
Warrant Agreement dated May 22, 2008 by and between Kingsbridge Capital Limited and Discovery
|
Incorporated by reference to Exhibit 4.1 to Discovery’s Current Report on Form 8-K as filed with the SEC on May 28, 2008.
|
|
|
|
|
|
4.3
|
Warrant Agreement dated December 12, 2008 by and between Kingsbridge Capital Limited and Discovery
|
Incorporated by reference to Exhibit 4.1 to Discovery’s Current Report on Form 8-K, as filed with the SEC on December 15, 2008.
|
|
|
|
|
|
4.4
|
Form of Stock Purchase Warrant issued in May 2009
|
Incorporated by reference to Exhibit 10.3 to Discovery’s Current Report on Form 8-K, as filed with the SEC on May 8, 2009.
|
|
|
|
|
|
4.5
|
Form of Stock Purchase Warrant issued in February 2010
|
Incorporated by reference to Exhibit 4.1 to Discovery’s Current Report on Form 8-K, as filed with the SEC on February 18, 2010.
|
|
|
|
|
|
4.6
|
Warrant Agreement, dated as of April 30, 2010, by and between Discovery and PharmaBio
|
Incorporated by reference to Exhibit 4.1 to Discovery’s Current Report on Form 8-K, as filed with the SEC on April 28, 2010.
|
|
|
|
|
|
4.7
|
Warrant Agreement dated June 11, 2010 by and between Kingsbridge Capital Limited and Discovery
|
Incorporated by reference to Exhibit 4.1 to Discovery’s Current Report on Form 8-K, as filed with the SEC on June 14, 2010.
|
Exhibit No. |
Description
|
Method of Filing
|
|
|
|
|
|
4.8
|
Form of Series I Warrant to Purchase Common Stock issued on June 22, 2010 (Five-Year Warrant)
|
Incorporated by reference to Exhibit 4.1 to Discovery’s Current Report on Form 8-K, as filed with the SEC on June 17, 2010.
|
|
|
|
|
|
4.9
|
Warrant Agreement, dated as of October 12, 2010, by and between Discovery and PharmaBio
|
Incorporated by reference to Exhibit 4.1 to Discovery’s Current Report on Form 8-K, as filed with the SEC on October 13, 2010.
|
|
|
|
|
|
4.10
|
Form of Series I Warrant to Purchase Common Stock issued on February 22, 2011 (Five-Year Warrant)
|
Incorporated by reference to Exhibit 4.1 to Discovery’s Current Report on Form 8-K, as filed with the SEC on February 16, 2011.
|
|
|
|
|
|
4.11
|
Form of Series II Warrant to Purchase Common Stock issued on February 22, 2011
|
Incorporated by reference to Exhibit 4.2 to Discovery’s Current Report on Form 8-K, as filed with the SEC on February 16, 2011.
|
|
|
|
|
|
4.12+
|
Form of Warrant issued to Deerfield Private Design Fund II, L.P., Deerfield Private Design International II, L.P., Deerfield Special Situations Fund, L.P. and Deerfield Special Situations International Master Fund, L.P. (collectively, Deerfield) under a Facility Agreement dated as of February 13, 2013 between Discovery and Deerfield (Deerfield Facility)
|
Incorporated by reference to Exhibit 4.1 to Discovery’s Current Report on Form 8-K/A, as filed with the SEC on March 15, 2013.
|
|
|
|
|
|
4.13
|
Form of Notes issued to Deerfield evidencing loan under Deerfield Facility
|
Incorporated by reference to Exhibit 4.2 to Discovery’s Current Report on Form 8-K/A, as filed with the SEC on March 15, 2013.
|
|
|
|
|
|
10.1
|
Extension, dated as of July 16, 2013, of Lease dated as of December 3, 2004, between Discovery, as successor-in-interest to Laureate Pharma, Inc. (Tenant), and Norwell Land Company (“Landlord”), with respect to property at 710 Union Blvd., Totowa, NJ 07512
|
Incorporated by reference to Exhibit 10.1 to Discovery’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, as filed with the SEC on August 8, 2013.
|
|
|
|
|
|
10.2+
|
Pharmaceutical Manufacturing and Supply Agreement dated August 7, 2013 between Discovery and DSM Pharmaceuticals, Inc. (DSM)
|
Incorporated by reference to Exhibit 10.2 to Discovery’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, as filed with the SEC on August 8, 2013.
|
|
|
|
|
|
Master Services Agreement dated October 24, 2013 between Discovery and DSM
|
Filed herewith.
|
||
|
|
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act
|
Filed herewith.
|
||
|
|
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Filed herewith.
|
Exhibit No. |
Description
|
Method of Filing
|
|
|
|
|
|
101.1
|
The following consolidated financial statements from the Discovery Laboratories, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, formatted in Extensive Business Reporting Language (“XBRL”): (i) Balance Sheets as of September 30, 2013 (unaudited) and December 31, 2012, (ii) Statements of Operations (unaudited) for the three and nine months ended September 30, 2013 and September 30, 2012, (iii) Statements of Cash Flows (unaudited) for the nine months ended September 30, 2013 and September 30, 2012, and (v) Notes to consolidated financial statements.
|
|
|
|
|
|
|
101.INS
|
Instance Document
|
Filed herewith.
|
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
Filed herewith.
|
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
Filed herewith.
|
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
Filed herewith.
|
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
Filed herewith.
|
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Filed herewith.
|
+
Confidential treatment requested as to certain portions of this exhibit. Such portions have been redacted and filed separately with the Commission.
|
If to DSM:
|
|
DSM Pharmaceuticals, Inc.
|
|
|
[***]
|
|
|
[***]
|
|
|
[***]
|
|
|
[***]
|
If to Discovery Labs: | Discovery Laboratories, Inc. | |
2600 Kelly Road, Suite 100 | ||
Warrington, PA 18976 | ||
Attn: General Counsel |
DSM Pharmaceuticals, Inc.
|
|
Discovery Laboratories, Inc.
|
|
||
|
|
|
|
|
|
By:
|
|
|
By:
|
|
|
[***]
|
|
|
Name:
|
|
|
[***]
|
|
|
Title:
|
|
|
DSM Pharmaceuticals, Inc.
|
|
Discovery Laboratories, Inc.
|
|
||
|
|
|
|
|
|
By:
|
|
|
By:
|
|
|
Name:
|
|
|
Name:
|
|
|
Title:
|
|
|
Title:
|
|
|
Date: November 12, 2013
|
/s/ John G. Cooper
|
|
|
John G. Cooper
|
|
|
President and Chief Executive and Chief Financial Officer
|
|
|
(Principal Executive and Financial Officer)
|
Date: November 12, 2013
|
|
|
|
/s/ John G. Cooper
|
|
John G. Cooper
|
|
President and Chief Executive Officer and Chief Financial Officer
|
|
(Principal Executive and Financial Officer)
|