☒ |
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
PDS Biotechnology Corporation
|
||
(Exact name of registrant as specified in its charter)
|
Delaware
|
26-4231384
|
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
300 Connell Drive, Suite 4000, Berkeley Heights, NJ 07922
|
||
(Address of principal executive offices)
|
(800) 208-3343
|
||
(Registrant’s telephone number)
|
Edge Therapeutics, Inc.
|
||
(Former name, former address and former fiscal year, if changed since last report)
|
Large accelerated filer
☐
|
Accelerated filer
☐
|
Non-accelerated filer
☒
|
Smaller Reporting Company
☒
|
Emerging growth company
☒
|
Title of each class
|
Trading symbol(s)
|
Name of each exchange on which registered
|
||
Common Stock, par value $0.00033 per share
|
PDSB
|
Nasdaq Capital Market
|
Page
|
|||
4
|
|||
5
|
|||
6
|
|||
7
|
|||
8
|
|||
19
|
|||
24
|
|||
24
|
|||
25
|
|||
25
|
|||
25
|
|||
45
|
|||
45
|
|||
45
|
|||
45
|
|||
45
|
|||
46
|
|||
47
|
Three Months Ended March 31,
|
||||||||
2019
|
2018
|
|||||||
Operating expenses:
|
||||||||
Research and development expenses
|
$
|
1,030,003
|
$
|
201,138
|
||||
General and administrative expenses
|
3,905,877
|
535,801
|
||||||
Total operating expenses
|
4,935,880
|
736,939
|
||||||
Loss from operations
|
(4,935,880
|
)
|
(736,939
|
)
|
||||
Other income (expense):
|
||||||||
Gain on bargain purchase
|
11,729,882
|
–
|
||||||
Interest income
|
23,302
|
6
|
||||||
Interest expense
|
(606
|
)
|
(959
|
)
|
||||
Net income (loss) and comprehensive income (loss)
|
$
|
6,816,698
|
$
|
(737,892
|
)
|
|||
Per share information:
|
||||||||
Net income (loss) per share , basic
|
$
|
1.82
|
$
|
(0.24
|
)
|
|||
Net income (loss) per share , diluted
|
$
|
1.47
|
$
|
(0.24
|
)
|
|||
Weighted average common shares outstanding, basic
|
3,748,325
|
3,099,311
|
||||||
Weighted average common shares outstanding, diluted
|
4,625,295
|
3,099,311
|
Common Stock
|
Additional
|
Accumulated
|
Total
|
|||||||||||||||||
|
Shares Issued
|
Amount
|
Paid-in Capital
|
Deficit
|
Equity (Deficit)
|
|||||||||||||||
Balance -
December 31, 2017
|
3,051,538
|
$
|
1,007
|
$
|
17,492,083
|
$
|
(18,102,618
|
)
|
$
|
(609,528
|
)
|
|||||||||
Stock-based compensation expense
|
–
|
–
|
7,015
|
–
|
7,015
|
|||||||||||||||
Capitalized offering costs
|
–
|
–
|
(44,000
|
)
|
–
|
(44,000
|
)
|
|||||||||||||
Issuance of common stock, net of issuance costs
|
281,860
|
93
|
757,801
|
–
|
757,894
|
|||||||||||||||
Warrant costs associated with stock issuance
|
–
|
–
|
342,105
|
–
|
342,105
|
|||||||||||||||
Net loss
|
–
|
–
|
–
|
(737,892
|
)
|
(737,892
|
)
|
|||||||||||||
Balance -
March 31, 2018
|
3,333,398
|
$
|
1,100
|
$
|
18,555,004
|
$
|
(18,840,510
|
)
|
$
|
(284,406
|
)
|
Common Stock
|
Additional
|
Accumulated
|
Total
|
|||||||||||||||||
|
Shares Issued
|
Amount
|
Paid-in Capital
|
Deficit
|
Equity (Deficit)
|
|||||||||||||||
Balance - December 31, 2018
|
3,417,187
|
$
|
1,128
|
$
|
19,311,529
|
$
|
(21,013,174
|
)
|
$
|
(1,700,517
|
)
|
|||||||||
Stock-based compensation expense
|
–
|
–
|
2,754,871
|
–
|
2,754,871
|
|||||||||||||||
Issuance of common stock, net of issuance costs
|
48,930
|
16
|
749,984
|
–
|
750,000
|
|||||||||||||||
Issuance of common stock for antidilution
|
97,960
|
32
|
(32
|
)
|
–
|
–
|
||||||||||||||
Issuance of common stock for convertible debt
|
9,683
|
3
|
32,950
|
–
|
32,953
|
|||||||||||||||
Equity from merger transaction
|
1,599,178
|
528
|
15,793,109
|
–
|
15,793,637
|
|||||||||||||||
Net income
|
–
|
–
|
–
|
6,816,698
|
6,816,698
|
|||||||||||||||
Balance - March 31, 2019
|
5,172,938
|
$
|
1,707
|
$
|
38,642,411
|
$
|
(14,196,476
|
)
|
$
|
24,447,642
|
Three Months Ended March 31,
|
||||||||
2019
|
2018
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$
|
6,816,698
|
$
|
(737,892
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Stock-based compensation expense
|
2,754,871
|
7,015
|
||||||
Stock-based 401K company common match
|
–
|
–
|
||||||
Depreciation expense
|
18,958
|
7,231
|
||||||
Bargain purchase gain
|
(11,729,882
|
)
|
–
|
|||||
Changes in assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
(181,679
|
)
|
15,272
|
|||||
Accounts payable
|
(620,212
|
)
|
16,014
|
|||||
Accrued expenses
|
(304,441
|
)
|
288,022
|
|||||
Restructuring reserve
|
(121,675
|
)
|
–
|
|||||
Net cash used in operating activities
|
(3,367,362
|
)
|
(404,338
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Cash received in reverse merger transaction
|
29,106,512
|
–
|
||||||
Net cash used in investing activities
|
29,106,512
|
–
|
||||||
Cash flows from financing activities:
|
||||||||
Payments for capital lease obligation
|
–
|
(3,478
|
)
|
|||||
Proceeds from issuance of common stock, net of issuance costs
|
750,000
|
1,055,999
|
||||||
Net cash provided by financing activities
|
750,000
|
1,052,521
|
||||||
Net increase in cash
|
26,489,150
|
648,183
|
||||||
Cash and cash equivalents at beginning of period
|
103,695
|
175,884
|
||||||
Cash and cash equivalents at end of period
|
$
|
26,592,845
|
$
|
824,067
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$
|
150
|
$
|
405
|
||||
Supplemental cash flow information:
|
||||||||
Conversion of convertible notes and accrued interest into common stock
|
$
|
32,953
|
$
|
–
|
||||
Consideration in connection with reverse merger transaction
|
$
|
15,793,638
|
$
|
–
|
(A) |
Unaudited interim financial statements:
|
(B) |
Use of estimates:
|
(C) |
Significant risks and uncertainties:
|
(D) |
Cash equivalents and concentration of cash balance:
|
(E) |
Research and development:
|
(H) |
Stock-based compensation:
|
As of March 31,
2018
|
||||
Stock options to purchase Common Stock
|
513,534
|
|||
Convertible promissory note
|
9,051
|
|||
Warrants to purchase Common Stock
|
115,860
|
|||
Total
|
638,445
|
Three Months Ended March,
|
||||||||
2019
|
2018
|
|||||||
Numerator
|
||||||||
Basic and diluted net income (loss)
|
$
|
6,816,698
|
$
|
(737,892
|
)
|
|||
Denominator
|
||||||||
Shares used in computing basic net income (loss) per share
|
3,748,325
|
3,099,311
|
||||||
Shares from dilutive securities
|
876,970
|
–
|
||||||
Shares used in computing diluted net income (loss) per share
|
4,625,295
|
3,099,311
|
||||||
Net income (loss) per share, basic
|
$
|
1.82
|
$
|
(0.24
|
)
|
|||
Net income (loss) per share, diluted
|
$
|
1.47
|
$
|
(0.24
|
)
|
(K) |
Accounting standards not yet adopted:
|
Number of shares of the combined company to be owned by Edge security holders (1)
|
1,600,166
|
|||
Multiplied by the price per share of Edge’s common stock as of March 15, 2019
|
$
|
9.87
|
||
Purchase price (in thousands)
|
$
|
15,794
|
(1) |
The amount includes 1,576,916 shares of Edge’s common stock outstanding as of March 15, 2019 plus 23,250 stock options of Edge that were in the money and vested immediately
upon closing of the Merger. At closing, 753 of in-the-money options and 235 fractional shares paid out in cash to shareholders were not issued as common stock, resulting in 1,599,178 common shares issued.
|
Cash and cash equivalents
|
$
|
29,106,513
|
||
Prepaid expense and other assets
|
1,441,732
|
|||
Right to use asset
|
1,384,810
|
|||
Intangible assets-IPR&D
|
1,223,000
|
|||
Total identifiable assets acquired
|
33,156,055
|
|||
Accounts payable, accrued expenses, other liabilities
|
(4,530,383
|
)
|
||
Lease liability
|
(945,152
|
)
|
||
Deferred tax liability
|
(157,000
|
)
|
||
Total liabilities assumed
|
(5,632,535
|
)
|
||
Net identifiable assets acquired
|
27,523,520
|
|||
Bargain purchase gain
|
(11,729,882
|
)
|
||
Purchase price
|
$
|
15,793,638
|
Three Months Ended
March 31,
|
||||||||
2019
|
2018
|
|||||||
Pro forma operating expenses
|
$
|
15,053,452
|
$
|
20,833,121
|
||||
Pro forma net loss
|
(15,714,303
|
)
|
(21,577,995
|
)
|
||||
Pro forma basic and diluted net loss per share
|
$
|
(4.19
|
)
|
$
|
(4.64
|
)
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
Total
|
Quoted Prices in
Active Markets
(Level 1)
|
Quoted Prices in
Inactive Markets
(Level 2)
|
Significant
Unobservable Inputs
(Level 3)
|
|||||||||||||
As of March 31, 2019: (unaudited)
|
||||||||||||||||
Cash and cash equivalents
|
$
|
26,592,845
|
$
|
26,592,845
|
$
|
–
|
$
|
–
|
||||||||
As of December 31, 2018:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
103,695
|
$
|
103,695
|
$
|
–
|
$
|
–
|
Reported as of March 31, 2019
|
||||
Current portion of operating lease liability
|
$
|
477,300
|
||
Operating leases, net of current portion
|
902,972
|
|||
Total
|
$
|
1,380,272
|
As of
March 31, 2019
|
As of
December 31, 2018
|
|||||||
Accrued research and development costs
|
$
|
172,190
|
$
|
71,329
|
||||
Accrued professional fees
|
221,528
|
421,617
|
||||||
Accrued compensation
|
45,244
|
54,269
|
||||||
Accrued other
|
–
|
46,674
|
||||||
Accrued rent
|
8,000
|
8,000
|
||||||
Total
|
$
|
446,962
|
$
|
601,889
|
As of
March 31, 2019
|
As of
December 31, 2018
|
|||||||
Restructuring reserve (1)
|
$
|
1,948,596
|
$
|
–
|
||||
Total
|
$
|
1,948,596
|
$
|
–
|
(1) |
Restructuring reserve relates to the severance costs incurred by Edge Therapeutics prior to the merger transaction and assumed by the
Company as part of the purchase accounting, but not yet paid. For the three months ended March 31, 2019, the Company incurred $121,675 of restructuring expense which is recognized within general and administrative expense.
|
Three Months Ended March 31,
|
||||||||
2019
|
2018
|
|||||||
(unaudited)
|
||||||||
Stock-Based Compensation
|
||||||||
Research and development
|
$
|
440,700
|
$
|
3,219
|
||||
General and administrative
|
2,314,171
|
3,796
|
||||||
Total
|
$
|
2,754,871
|
$
|
7,015
|
Three Months Ended March 31,
|
||||||||
2019
|
2018
|
|||||||
Weighted Average
|
Weighted Average
|
|||||||
(unaudited)
|
||||||||
Volatility
|
83.00
|
%
|
0.00
|
%
|
||||
Risk-Free Interest Rate
|
2.49
|
%
|
0.00
|
%
|
||||
Expected Term in Years
|
6.25
|
–
|
||||||
Dividend Rate
|
0.00
|
%
|
0.00
|
%
|
||||
Fair Value of Option on Grant Date
|
$
|
6.54
|
$
|
–
|
Number
of Shares
|
Weighted Average
Exercise Price
|
Weighted Average
Remaining Contractual
Life in Years
|
Aggregate
Intrinsic Value
|
|||||||||||||
Options outstanding at December 31, 2018
|
541,117
|
$
|
7.20
|
|||||||||||||
Assumed in connection with Merger
|
347,697
|
121.52
|
||||||||||||||
Granted
|
389,707
|
9.04
|
||||||||||||||
Exercised
|
–
|
–
|
||||||||||||||
Forfeited
|
(55,521
|
)
|
5.01
|
|||||||||||||
Options outstanding at March 31, 2019
|
1,223,000
|
$
|
40.39
|
6.52
|
$
|
357,168
|
||||||||||
Vested and expected to vest at March 31, 2019
|
1,223,000
|
$
|
40.39
|
6.52
|
$
|
357,168
|
||||||||||
Exercisable at March 31, 2019
|
1,223,000
|
$
|
40.39
|
6.52
|
$
|
357,168
|
● |
the accuracy of estimates of our expenses, future revenue, capital requirements and our needs for additional financing;
|
● |
our ability to obtain funding for our operations in the event we determine to raise additional capital;
|
● |
our ability to retain key management personnel;
|
● |
the accuracy of our estimates regarding expenses, future revenues and capital requirements;
|
● |
our ability to maintain our listing on the Nasdaq Stock Market;
|
● |
regulatory developments in the United States and foreign countries;
|
● |
our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”); and
|
● |
other risks and uncertainties, including those listed under Part II, Item 1A. Risk Factors.
|
● |
the timing and costs of our planned clinical trials;
|
● |
the timing and costs of our planned preclinical studies of its Versamune® platform;
|
● |
the outcome, timing and costs of seeking regulatory approvals;
|
● |
the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may enter into;
|
● |
the amount and timing of any payments we may be required to make in connection with the licensing, filing, prosecution, maintenance, defense and enforcement of any patents
or patent applications or other intellectual property rights; and
|
● |
the extent to which we in-licenses or acquires other products and technologies.
|
Three Months Ended March 31,
|
Increase (Decrease)
|
|||||||||||||||
2019
|
2018
|
$
|
|
%
|
||||||||||||
(in thousands)
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development expenses
|
$
|
1,030
|
$
|
201
|
$
|
829
|
412
|
%
|
||||||||
General and administrative expenses
|
3,906
|
536
|
3,370
|
629
|
%
|
|||||||||||
Total operating expenses
|
4,936
|
737
|
4,199
|
570
|
%
|
|||||||||||
Loss from operations
|
(4,936
|
)
|
(737
|
)
|
(4,199
|
)
|
570
|
%
|
||||||||
Other income (expense), net
|
11,730
|
–
|
11,730
|
100
|
%
|
|||||||||||
Interest income (expense), net
|
22
|
(1
|
)
|
23
|
100
|
%
|
||||||||||
Net loss and comprehensive loss
|
$
|
6,816
|
$
|
(738
|
)
|
$
|
7,554
|
(1,024
|
)%
|
Three Months Ended March 31,
|
||||||||
2019
|
2018
|
|||||||
Net cash used in operating activities
|
$
|
(3,367
|
)
|
$
|
(404
|
)
|
||
Net cash provided by investing activities
|
29,106
|
–
|
||||||
Net cash provided by financing activities
|
750
|
1,052
|
||||||
Net increase in cash
|
$
|
26,489
|
$
|
648
|
● |
the initiation, progress, timing, costs and results of our planned clinical trials;
|
● |
the outcome, timing and cost of meeting regulatory requirements established by the U.S. Food and Drug Administration, or FDA, the European Medicines Agency, or EMA, and
other comparable foreign regulatory authorities;
|
● |
the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
|
● |
the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us now or in the future;
|
● |
the effect of competing technological and market developments;
|
● |
the cost of establishing sales, marketing and distribution capabilities in regions where we choose to commercialize our tablet vaccines on our own; and
|
● |
the initiation, progress, timing and results of our commercialization of our tablet vaccine candidates, if approved, for commercial sale.
|
As of March 31, 2019
|
Total
|
Less than
one year
|
1-3 Years
|
3-5 Years
|
More than
5 Years
|
|||||||||||||||
(in thousands)
|
||||||||||||||||||||
Operating lease obligations
|
$
|
1,585
|
$
|
602
|
$
|
983
|
$
|
–
|
$
|
–
|
||||||||||
Milestone payments
|
100
|
100
|
–
|
–
|
–
|
|||||||||||||||
Total contractual obligations
|
$
|
1,685
|
$
|
702
|
$
|
983
|
$
|
–
|
$
|
–
|
● |
set an acceptable price for Versamune
®
-based immunotherapy candidates, including the
Versamune
®
Products, and obtain coverage and adequate reimbursement from third-party payors;
|
● |
establish sales, marketing, manufacturing and distribution systems;
|
● |
add operational, financial and management information systems and personnel, including personnel to support our clinical, manufacturing and planned future clinical
development and commercialization efforts and operations as a public company;
|
● |
develop manufacturing capabilities for bulk materials and manufacture commercial quantities of PDS0101 and other Versamune
®
Products at acceptable cost levels;
|
● |
achieve broad market acceptance of PDS0101 and other Versamune
®
Products in the medical
community and with third-party payors and consumers;
|
● |
attract and retain an experienced management and advisory team;
|
● |
launch commercial sales of PDS0101 and other Versamune
®
Products, whether alone or in
collaboration with others; and
|
● |
maintain, expand and protect our intellectual property portfolio.
|
● |
we may not be able to demonstrate that PDS0101 is safe and effective to the satisfaction of the FDA;
|
● |
the FDA may not agree that the completed Phase 1/2A clinical trials of PDS0101 satisfy the FDA
’
s
requirements and may require us to conduct additional testing;
|
● |
the results of our future clinical trials may not meet the level of statistical or clinical significance required by the FDA for marketing approval;
|
● |
the FDA may disagree with the number, design, size, conduct or implementation of one or more of our clinical trials;
|
● |
the contract research organizations, or CROs, that we retain to conduct clinical trials may take actions outside of our control that materially and adversely impact our
clinical trials;
|
● |
the FDA may not find the data from our preclinical studies and clinical trials sufficient to demonstrate that the clinical and other benefits of PDS0101 outweigh the safety
risks;
|
● |
the FDA may disagree with our interpretation of data from our preclinical studies and clinical trials;
|
● |
the FDA may not accept data generated at our clinical trial sites;
|
● |
if our BLA is reviewed by an advisory committee, the FDA may have difficulties scheduling an advisory committee meeting in a timely manner or the advisory committee may
recommend against approval of our application or may recommend that the FDA require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions;
|
● |
the FDA may require development of a risk evaluation and mitigation strategy, or REMS, as a condition of approval;
|
● |
the FDA may identify deficiencies in our manufacturing processes or facilities; or
|
● |
the FDA may change its approval policies or adopt new regulations.
|
● |
the initiation, progress, timing, costs and results of our planned clinical trials;
|
● |
the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities;
|
● |
the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
|
● |
the cost of defending potential intellectual property disputes, including any patent infringement actions brought by third parties against us now or in the future;
|
● |
the effect of competing technological and market developments;
|
● |
the cost of establishing sales, marketing and distribution capabilities in regions where we choose to commercialize PDS0101 on our own; and
|
● |
the initiation, progress, timing and results of the commercialization of PDS0101, if approved, for commercial sale.
|
● |
regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
|
● |
we may have delays in reaching or fail to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;
|
● |
clinical trials of PDS0101 may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon
product development programs;
|
● |
the number of subjects required for clinical trials of PDS0101 may be larger than we anticipate; enrollment in these clinical trials may be slower than we anticipate, or
participants may drop out of these clinical trials at a higher rate than we anticipate;
|
● |
Our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;
|
● |
regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with
regulatory requirements or a finding that the participants are being exposed to unacceptable health risks;
|
● |
the cost of clinical trials of PDS0101 may be greater than we anticipate; and
|
● |
the supply or quality of PDS0101 or other materials necessary to conduct clinical trials of PDS0101 may be insufficient or inadequate.
|
● |
be delayed in obtaining marketing approval for PDS0101;
|
● |
not obtain marketing approval at all;
|
● |
obtain approval for indications or patient populations that are not as broad as intended or desired;
|
● |
obtain approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings;
|
● |
be subject to additional post-marketing testing requirements; or
|
● |
have the product removed from the market after obtaining marketing approval.
|
● |
develop and commercialize immunotherapies that are superior to other alternatives in the market;
|
● |
demonstrate through our clinical trials that PDS0101 is differentiated from existing and future therapies;
|
● |
attract qualified scientific, immunotherapy development and commercial personnel;
|
● |
obtain additional patent or other proprietary protection for PDS0101;
|
● |
obtain required regulatory approvals;
|
● |
obtain coverage and adequate reimbursement from, and negotiate competitive pricing with, third-party payors; and
|
● |
successfully develop and commercialize, independently or with collaborators, new applications for PDS0101 or immunotherapies.
|
● |
regulatory authorities may withdraw their approval of PDS0101 or impose restrictions on its distribution or other risk management measures;
|
● |
regulatory authorities may require the addition of labeling statements, such as warnings or contraindications;
|
● |
we may be required to change the way PDS0101 is administered or to conduct additional clinical trials;
|
● |
we could be sued and held liable for injuries sustained by patients;
|
● |
we could elect to discontinue the sale of PDS0101; and
|
● |
our reputation may suffer.
|
● |
restrictions on manufacturing PDS0101;
|
● |
restrictions on the labeling or marketing of PDS0101;
|
● |
restrictions on PDS0101 distribution or use;
|
● |
requirements to conduct post-marketing studies or clinical trials;
|
● |
warning letters;
|
● |
withdrawal of PDS0101 from the market;
|
● |
refusal to approve pending applications or supplements to approved applications that we submit;
|
● |
recalls of PDS0101;
|
● |
fines, restitution or disgorgement of profits or revenues;
|
● |
suspension or withdrawal of marketing approvals;
|
● |
refusal to permit the import or export of PDS0101;
|
● |
seizures of PDS0101; or
|
● |
injunctions or the imposition of civil or criminal penalties.
|
● |
the efficacy and potential advantages compared to alternative treatments;
|
● |
effectiveness of sales and marketing efforts;
|
● |
the cost of treatment in relation to alternative treatments;
|
● |
our ability to offer PDS0101 for sale at competitive prices;
|
● |
the convenience and ease of administration compared to alternative treatments;
|
● |
the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
|
● |
the willingness of the medical community to offer customers PDS0101 in addition to or in the place of other immunotherapies;
|
● |
the strength of marketing and distribution support;
|
● |
the availability of third-party coverage and adequate reimbursement;
|
● |
the prevalence and severity of any side effects; and
|
● |
any restrictions on the use of PDS0101 together with other medications.
|
● |
the Federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering, or paying
remuneration, directly or indirectly, in cash or in kind, in exchange for or to induce either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service for which payment
may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid;
|
● |
the Federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering, or paying
remuneration, directly or indirectly, in cash or in kind, in exchange for or to induce either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service for which payment
may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid;
|
● |
the FCA
’
s civil provisions, which prohibit, among other things, individuals or entities from knowingly
presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other third-party payors that are false or fraudulent; knowingly making using, or causing to be made or used, a false record or statement to get a
false or fraudulent claim paid or approved by the government; or knowingly making, using, or causing to be made or used, a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government;
|
● |
the FCA
’
s criminal provisions, which imposes criminal fines or imprisonment against individuals or
entities who make or present a claim to the government knowing such claim to be false, fictitious or fraudulent;
|
● |
HIPAA, which created federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare
matters;
|
● |
the federal beneficiary inducement statute, which prohibits, among other things, the offering or giving of remuneration to a Medicare or Medicaid beneficiary that the
person knows or should know is likely to influence the beneficiary
’
s selection of a particular supplier of items or services reimbursable by a Federal or state
governmental program;
|
● |
the federal physician sunshine requirements under the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or
collectively, the Affordable Care Act, which require certain manufacturers of drugs, devices, biologics, and medical supplies to report annually to the U.S. Department of Health and Human Services information related to payments and
other transfers of value to physicians, other healthcare providers, and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members; and
|
● |
state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party
payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the device industry
’
s voluntary compliance guidelines and the
relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state laws that require device manufacturers to report
information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures.
|
● |
decreased demand for PDS0101 or other immunotherapies that we may develop;
|
● |
injury to our reputation and significant negative media attention;
|
● |
withdrawal of clinical trial participants;
|
● |
significant costs to defend any related litigation;
|
● |
substantial monetary awards to trial subjects or patients;
|
● |
loss of revenue; and
|
● |
the inability to commercialize any products we may develop.
|
● |
different regulatory requirements for drug approvals and rules governing drug commercialization in foreign countries;
|
● |
reduced protection for intellectual property rights;
|
● |
unexpected changes in tariffs, trade barriers and regulatory requirements;
|
● |
economic weakness, including inflation, or political instability in particular foreign economies and markets;
|
● |
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
|
● |
foreign reimbursement, pricing and insurance regimes;
|
● |
foreign taxes;
|
● |
foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;
|
● |
workforce uncertainty in countries where labor unrest is more common than in the United States;
|
● |
potential noncompliance with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act 2010 and similar anti-bribery and anticorruption laws in other jurisdictions;
|
● |
shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and
|
● |
business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.
|
● |
significant time and effort from our management team;
|
● |
financial funding to support said collaboration;
|
● |
coordination of our research and development programs with the research and development priorities of our collaborators; and
|
● |
effective allocation of our resources to multiple projects.
|
● |
the federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration,
directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare
programs such as Medicare and Medicaid;
|
● |
the federal False Claims Act imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly
presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
|
● |
the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, imposes
criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of
individually identifiable health information;
|
● |
the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in
connection with the delivery of or payment for healthcare benefits, items or services;
|
● |
the federal transparency requirements under the Affordable Care Act requires manufacturers of drugs, devices, biologics and medical supplies to report to the Department of
Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests; and
|
● |
analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items
or services reimbursed by non-governmental third-party payors, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry
’
s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring immunotherapy manufacturers to report information related to payments to
physicians and other health care providers or marketing expenditures.
|
● |
the ability of us and our partners to develop product candidates and conduct clinical trials that demonstrate such product candidates
are safe and effective;
|
● |
the ability of us or our partners to obtain regulatory approvals for product candidates, and delays or failures to obtain such approvals;
|
● |
failure of any of our
product candidates to demonstrate safety and efficacy, receive regulatory
approval and achieve commercial success;
|
● |
failure by us to maintain our existing third-party license, manufacturing and supply agreements;
|
● |
failure by us or our licensors to prosecute, maintain, or enforce our intellectual property rights;
|
● |
changes in laws or regulations applicable to our
product candidates;
|
● |
any inability to obtain adequate supply of product candidates or the inability to do so at acceptable prices;
|
● |
adverse regulatory authority decisions;
|
● |
introduction of new or competing products by our competitors;
|
● |
failure to meet or exceed financial and development projections we may provide to the public;
|
● |
the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community;
|
● |
announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us or our competitors;
|
● |
disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain intellectual property protection for our
technologies;
|
● |
additions or departures of key personnel;
|
● |
significant lawsuits, including intellectual property or stockholder litigation;
|
● |
if securities or industry analysts do not publish research or reports about us, or if they issue an adverse or misleading opinions regarding our business and stock;
|
● |
if large short positions are taken in our stock and or negative reports are provided, whether they are based in fact or otherwise;
|
● |
changes in the market valuations of similar companies;
|
● |
general market or macroeconomic conditions;
|
● |
sales of our common stock by us or our stockholders in the future;
|
● |
trading volume of our common stock;
|
● |
adverse publicity relating to our markets generally, including with respect to other products and potential products in such markets;
|
● |
changes in the structure of health care payment systems; and
|
● |
period-to-period fluctuations in our financial results.
|
Exhibit
Number
|
Exhibit Description
|
|
2.1
|
Agreement and Plan of Merger and Reorganization, dated
November 23, 2018, by and among Edge Therapeutics, Inc., Echos Merger Sub, Inc. and PDS Biotechnology Corporation
(filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on November 26, 2018, and incorporated by
reference herein).
|
|
2.2
|
Amendment No. 1 to Agreement and Plan of Merger and
Reorganization, dated January 24, 2019, by and among Edge Therapeutics, Inc., Echos Merger Sub, Inc. and PDS Biotechnology Corporation
(filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on January 30, 2019, and
incorporated by reference herein).
|
|
3.1
|
Eighth Amended and Restated Certificate of
Incorporation of Edge Therapeutics, Inc.
(
filed as Exhibit 3.1 to the
Company’s Current Report on Form 8-K filed on October 6, 2015, and incorporated by reference herein).
|
|
3.2
|
Second Amended and Restated Bylaws of Edge
Therapeutics, Inc.
(
filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on October 6, 2015, and incorporated by reference
herein).
|
|
3.3
|
Certificate of Amendment to Eighth Amended and Restated
Certificate of Incorporation for Corporate Name Change
(filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on March 18, 2019, and incorporated by reference herein).
|
|
3.4
|
Certificate of Amendment to Eighth Amended and Restated
Certificate of Incorporation for Reverse Stock Split
(filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on March 18, 2019, and incorporated by reference herein).
|
|
10.1
|
Letter Agreement, dated as of February 3, 2019, by and among Edge Therapeutics, Inc., PDS Biotechnology Corporation and Brian A. Leuthner
(filed
as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 4, 2019, and incorporated by reference herein).
|
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
||
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
||
32.1
*
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (furnished herewith).
|
|
32.2
*
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (furnished herewith).
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
* |
The certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto are deemed to accompany this Quarterly Report and will not be deemed “filed” for purposes of Section 18
of the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference.
|
PDS Biotechnology Corporation
|
||
May 14, 2019
|
By:
|
/s/ Frank Bedu-Addo
|
Frank Bedu-Addo
|
||
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
May 14, 2019
|
By:
|
/s/
Andrew Saik
|
Andrew Saik
|
||
Chief Financial Officer
|
||
(Principal Financial Officer)
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of PDS Biotechnology Corporation for the period ended March 31, 2019;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3 |
Based on my knowledge, the condensed consolidated financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of condensed consolidated financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: May 14, 2019
|
/s/ Frank Bedu-Addo
|
|
Frank Bedu-Addo
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of PDS Biotechnology Corporation for the period ended March 31, 2019;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3 |
Based on my knowledge, the condensed consolidated financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of condensed consolidated financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: May 14, 2019
|
/s/
Andrew Saik
|
|
Andrew Saik
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
(1) |
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: May 14, 2019
|
/s/ Frank Bedu-Addo
|
|
Frank Bedu-Addo
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
(1) |
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: May 14, 2019
|
/s/
Andrew Saik
|
|
Andrew Saik
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|