(Mark One)
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þ
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Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the fiscal year ended
December 31, 2011
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o
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Pernix Therapeutics Holdings, Inc.
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(Exact name of registrant as specified in its charter)
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Maryland
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33-0724736
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(State or Other Jurisdiction of Incorporation)
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(I.R.S. Employer Identification Number)
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10003 Woodloch Forest Drive
The Woodlands, TX 77380
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(832) 934-1825
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(Address of principal executive offices) (Zip Code)
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(Telephone number)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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NYSE Amex
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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þ
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(Do not check if a smaller reporting company) |
Page
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|||||
Part I
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|||||
Item 1.
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Business
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5
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Item 1A.
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Risk Factors
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29
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Item 1B.
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Unresolved Staff Comments
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57
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Item 2.
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Properties
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57
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Item 3.
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Legal Proceedings
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57
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Item 4.
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Mine Safety Disclosures
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57
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Part II
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|||||
Item 5.
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Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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58
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Item 6.
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Selected Financial Data
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59
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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59
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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74
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Item 8.
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Financial Statements and Supplementary Data
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75
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Item 9.
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Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
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108
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Item 9A.
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Controls and Procedures.
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108
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Item 9B.
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Other Information
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108
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Part III
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|||||
Item 10.
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Directors, Executive Officers and Corporate Governance
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109
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Item 11.
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Executive Compensation
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116
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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120
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Item 13.
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Certain Relationships and Related Transactions, Director Independence
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122
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Item 14.
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Principal Accounting Fees and Services
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123
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Part IV
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|||||
Item 15.
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Exhibits, Financial Statement Schedules
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125
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Signatures
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126
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||||
Exhibit Index
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127
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Marketed
Product Family
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Primary Indication
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Rights
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Launched by Pernix
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|||
ALDEX
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Allergies, congestion and cough
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Pernix
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Q3:2006
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|||
BROVEX
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Allergies, congestion and cough
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Pernix
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Q2:2009
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|||
CEDAX
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Bronchitis, ear and throat infections
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Pernix
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Q2:2010
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|||
NATROBA
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Topical treatment of head lice
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Pernix(license from ParaPRO)
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Q3:2011
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|||
PEDIATEX
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Allergies and congestion
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Pernix
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Q3:2008
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|||
REZYST
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Probiotic
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Pernix
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Q1:2009
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Product(s) / Product Candidates(s)
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Patent
Owners
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Patent Description
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Expiration
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|||
ALDEX AN and ALDEX CT
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Pernix Therapeutics, LLC
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Process for preparing control delivery capsule or other solid dosage forms
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April 9, 2022
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|||
ALDEX D, ALDEX DM, PEDIATEX TD and Z-COF 8 DM
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Pernix Therapeutics, LLC
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Process for preparing control delivery liquid and semi-solid dosage forms
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April 9, 2022
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|||
CEDAX
(2)
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Schering Corporation
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Stable hydrated cephalosporin dry powder for oral suspension formulation
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February 4, 2014
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|||
THEOBROMINE
(3)
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Gaine, Inc.
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Methods of stimulating mucociliary clearance to alleviate irritable cough
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March 20, 2018
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(1)
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In addition to the patents owned and licensed by Pernix, ParaPro owns and/or licenses certain patents relating to Natroba. We have no ownership interest or license to any such patent relating to Natroba by virtue of our co-promotion arrangement with ParaPro.
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(2)
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Pernix acquired a non-exclusive license for this remaining life of the patent in connection with its acquisition of CEDAX.
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(3)
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In connection with the formation of its joint venture with SEEK, we granted an exclusive license in our theobromine patent to the joint venture. However, we retain the exclusive promotion rights in the U.S. to the extent we fund the development and clinical trial program for theobromine product(s) for use in the pediatric market. SEEK assigned ownership of all of its non-U.S. patent and intellectual property rights relating to the development of BC 1036 to the joint venture, which are omitted from the above table.
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Customer
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2011
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2010
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||||||
Cardinal Health
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37%
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43%
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||||||
McKesson Corporation
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23%
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29%
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||||||
Morris & Dickson
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13%
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13%
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||||||
AmerisourceBergen Drug Corporation
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11%
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10%
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·
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ensuring product stocking in major channels in the geographic areas where we do business;
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·
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continually following up with accounts and monitoring product performance;
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·
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developing successful product launch strategies; and
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·
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partnering with customers on other value-added programs.
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·
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performance of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s Good Laboratory Practice, or GLP, regulations;
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·
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an investigational new drug application, or IND, submitted to the FDA, which must become effective before human clinical trials may commence;
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·
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an independent institutional review board (IRB) approval at each clinical site before each trial may begin;
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·
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completion of approved, well-controlled human clinical trials in accordance with Good Clinical Practices, or GCP, to establish the safety and efficacy of the proposed drug for its intended use;
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·
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submission of a new drug application, or NDA, to the FDA;
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·
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adequate completion of an FDA advisory committee review, if applicable;
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·
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satisfactory completion of an FDA inspection of the manufacturing facilities at which the product is produced to evaluate compliance with current Good Manufacturing Practices, or cGMP, and to assure that the facilities, methods and controls are satisfactory to preserve the drug’s identity, strength, quality and purity; and
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·
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FDA review and approval of the NDA.
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·
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Phase I: The product is initially introduced into healthy human subjects or, in certain circumstances, patients with the target disease or condition and is tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion.
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·
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Phase II: A limited patient population is administered the drug to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and schedule.
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·
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Phase III: An expanded patient population is administered the drug, generally at geographically unique clinical trial sites, to further evaluate dosage, clinical efficacy and safety, to establish the overall risk-benefit ratio of the drug, and to provide an adequate basis for regulatory approval and product labeling.
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·
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a substantial scientific issue essential to determining the safety or efficacy of the drug has been identified after testing has begun;
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·
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the protocol that was agreed upon with the FDA has not been followed by a sponsor;
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·
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the relevant data, assumptions, or information provided by a sponsor in a request for SPA change are found to be false or misstatements or are found to exclude important facts; or
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·
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the FDA and sponsor agree in writing to modify the protocol and such modification is intended to improve the study.
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·
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the required patent information has not been filed;
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·
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the listed patent has expired;
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·
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the listed patent will expire on a particular date, but has not expired and approval is sought after patent expiration; or
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·
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the listed patent is unenforceable, invalid or will not be infringed by the manufacture, sale or use of the new product, also known as a Paragraph IV certification.
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·
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be a specially formulated and processed product (as opposed to a naturally occurring food in its natural state) for oral ingestion or tube feeding (nasogastric tube);
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·
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be labeled for the dietary management of a specific medical disorder, disease or condition for which there are distinctive nutritional requirements; and
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·
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be intended to be used under medical supervision. Medical foods require a prescription from a physician.
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·
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regulations on government backed reimbursement for drugs;
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·
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regulations on payments to health care providers that affect demand for drug products;
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·
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objections to the pricing of drugs or limits or prohibitions on reimbursement for specific products through other means;
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·
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waning of restrictions on imports of drugs; and
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·
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increase of managed care systems in which health care providers commit to provide comprehensive health care for a fixed cost per person.
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●
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the prevalence and severity of any side effect;
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●
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the efficacy and potential advantages over the alternative treatments;
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●
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the ability to offer our branded products for sale at competitive prices, including in relation to any generic products;
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●
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relative convenience and ease of administration;
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●
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the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
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●
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the strength of marketing and distribution support; and
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●
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sufficient third-party coverage or reimbursement.
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●
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decreased demand for our products or any products that we may develop;
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●
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injury to reputation;
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●
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withdrawal of client trial participants;
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●
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withdrawal of a product from the market;
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●
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costs to defend the related litigation;
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●
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substantial monetary awards to trial participants or patients;
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●
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diversion of management time and attention;
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●
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loss of revenue; and
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●
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the inability to commercialize any products that we may develop.
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●
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reliance on the third-party for regulatory compliance and quality assurance;
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●
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the possible breach of the manufacturing arrangement by the third-party because of factors beyond our control; and
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●
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the possible termination or nonrenewal of the manufacturing relationship by the third party, based on its own business priorities, at a time that is costly or inconvenient for us.
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●
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fines;
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●
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injunctions;
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●
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civil penalties;
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●
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failure of regulatory authorities to grant marketing approval of our product candidates;
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●
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FDA regulatory action against any currently marketed products or products in development;
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●
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delays, suspension or withdrawal of approvals;
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●
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suspension of manufacturing operations;
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●
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DEA registration revocation;
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●
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seizures or recalls of products or product candidates;
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●
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operating restrictions; and
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●
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criminal prosecutions.
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●
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the level of product sales from our currently marketed products and any additional products that we may
market in the future;
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●
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The extent to which we acquire or invest in products, businesses and technologies;
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●
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the scope, progress, results and costs of clinical development activities for our product candidates, particularly BC1036;
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●
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the costs, timing and outcome of regulatory review of our product candidates, particularly BC 1036;
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●
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the number of, and development requirements for, additional product candidates that we pursue;
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●
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the costs of commercialization activities, including product marketing, sales and distribution;
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●
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the costs and timing of establishing manufacturing and supply arrangements for clinical and commercial
supplies of our product candidates;
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●
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the extent to which we choose to establish collaboration, co-promotion, distribution or other similar
arrangements for our products and product candidates; and
|
●
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the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending
intellectual property-related claims.
|
●
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our operating results, including the amount and timing of sales of our products;
|
●
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the availability and timely delivery of a sufficient supply of our products;
|
●
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our licensing and collaboration agreements and the products or product candidates that are the subject of those agreements;
|
●
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the results of discoveries, preclinical studies and clinical trials by us or our competitors;
|
●
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the acquisition of technologies, product candidates or products by us or our competitors;
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●
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the development of new technologies, product candidates or products by us or our competitors;
|
●
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regulatory actions with respect to our product candidates or products or those of our competitors; and
|
●
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significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors.
|
●
|
delaying, deferring or preventing a change in control;
|
●
|
impeding a merger, consolidation, takeover or other business combination; or
|
●
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discouraging a potential acquirer from making an acquisition proposal or otherwise attempting to obtain control.
|
●
|
period-to-period fluctuations in financial results due to seasonal demands for certain of our products;
|
●
|
issues in manufacturing products;
|
●
|
unanticipated potential product liability or patent infringement claims;
|
●
|
new or increased competition from generics;
|
●
|
the introduction of technological innovations or new commercial products by competitors;
|
●
|
changes in the availability of reimbursement to the patient from third-party payers for our products;
|
●
|
the entry into, or termination of, key agreements, including key strategic alliance agreements;
|
●
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the initiation of litigation to enforce or defend any of our intellectual property rights;
|
●
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the loss of key employees;
|
●
|
the results of pre-clinical testing, IND application, and potential clinical trials of some product candidates;
|
●
|
regulatory changes;
|
●
|
the results and timing of regulatory reviews relating to the approval of product candidates;
|
●
|
the results of clinical trials conducted by others on products that would compete with our products and product candidates;
|
●
|
failure of any of our products or product candidates to achieve commercial success;
|
●
|
general and industry-specific economic conditions that may affect research and development expenditures;
|
●
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future sales of our common stock; and
|
●
|
changes in the structure of health care payment systems resulting from proposed healthcare legislation or otherwise.
|
●
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successful completion of pre-clinical laboratory and animal testing;
|
●
|
an FDA approved investigational new drug application or IND application, becoming effective, which must occur before human clinical trials may commence;
|
●
|
successful completion of clinical trials;
|
●
|
submission of an NDA;
|
●
|
receipt of marketing approvals from the FDA;
|
●
|
establishing commercial manufacturing arrangements with third-party manufacturers;
|
|
●
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launching commercial sales of the product;
|
●
|
acceptance of the product by patients, the medical community and third party payors;
|
●
|
competition from other therapies;
|
●
|
achieving and maintaining compliance with all regulatory requirements applicable to the product; and
|
●
|
a continued acceptable safety profile of the product following approval.
|
●
|
FDA or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial
at a prospective trial site;
|
●
|
difficulty complying with conditions imposed by a regulatory authority regarding the scope or term of a clinical trial;
|
●
|
delays in reaching or failure to reach agreement on acceptable terms with prospective clinical research
organizations, or CROs, and trial sites, the terms of which can be subject to extensive negotiation and may
vary significantly among different CROs and trial sites;
|
●
|
our clinical trials may produce negative or inconclusive results, and we may decide, or FDA or analogous
foreign governmental entities may require us, to conduct additional clinical trials or we may abandon projects
that we expect to be promising;
|
●
|
the number of patients required for our clinical trials may be larger than we anticipate, enrollment in our clinical
trials may be slower or more difficult than we anticipate, or participants may drop out of our clinical trials at a higher rate than
we anticipate;
|
●
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our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations
to us in a timely manner;
|
●
|
we might have to suspend or terminate our clinical trials if the participants are being exposed to unacceptable
health risks;
|
●
|
regulators or institutional review boards may require that we hold, suspend or terminate clinical research for
various reasons, including noncompliance with regulatory requirements;
|
●
|
the cost of our clinical trials may be greater than we anticipate;
|
●
|
the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate; and
|
●
|
the effects of our product candidates may not be the desired effects or may include undesirable side effects
or the product candidates may have other unexpected characteristics.
|
●
|
be delayed in obtaining marketing approval for one or more of our product candidates;
|
●
|
not be able to obtain marketing approval; or
|
●
|
obtain approval for indications that are not as broad as intended.
|
●
|
withdrawal of the products from the market;
|
●
|
restrictions on the marketing or distribution of such products;
|
●
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restrictions on the manufacturers or manufacturing processes;
|
●
|
warning letters;
|
●
|
refusal to approve pending applications or supplements to approved applications that we submit;
|
●
|
recalls;
|
●
|
fines;
|
●
|
suspension or withdrawal of regulatory approvals;
|
●
|
refusal to permit the import or export of our products;
|
●
|
product seizure; or
|
●
|
injunctions or the imposition of civil or criminal penalties.
|
●
|
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 healthcare programs such as Medicare and Medicaid;
|
●
|
the Ethics in Patient Referrals Act, commonly referred to as the Stark Law, and its corresponding regulations, prohibit physicians from referring patients for designated health services reimbursed under the Medicare and Medicaid programs to entities with which the physicians or their immediate family members have a financial relationship or an ownership interest, subject to narrow regulatory exceptions;
|
●
|
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, or HIPAA, 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; 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.
|
●
|
We may be unable to license or acquire the relevant products, product candidates or technologies on
terms that would allow us to make an appropriate return on investment;
|
●
|
Companies that perceive us as a competitor may be unwilling to license or sell their product rights or
technologies to us;
|
●
|
We may be unable to identify suitable products, product candidates or technologies within our areas of
expertise; and
|
●
|
We may have inadequate cash resources or may be unable to obtain financing to acquire rights to suitable
products, product candidates or technologies from third parties.
|
●
|
use of cash resources;
|
●
|
higher than anticipated acquisition costs and expenses;
|
●
|
potentially dilutive issuances of equity securities;
|
●
|
the incurrence of debt and contingent liabilities, impairment losses or restructuring charges;
|
●
|
large write-offs and difficulties in assessing the relative percentages of in-process research and development
expense that can be immediately written off as compared to the amount that must be amortized over the
appropriate life of the asset; and
|
●
|
amortization expenses related to other intangible assets.
|
●
|
challenges associated with managing an increasingly diversified business;
|
●
|
disruption of our ongoing business;
|
●
|
difficulty and expense in assimilating the operations, products, technology, information systems or personnel
of the acquired company;
|
●
|
diversion of management’s time and attention from other business concerns;
|
●
|
inability to maintain uniform standards, controls, procedures and policies;
|
●
|
the assumption of known and unknown liabilities of the acquired company, including intellectual property
claims; and
|
●
|
subsequent loss of key personnel.
|
Price range of
common shares
|
||||||||
High
|
Low
|
|||||||
2010
1
:
|
||||||||
First Quarter (3/10/10 – 3/31/10)
|
5.75
|
3.70
|
||||||
Second Quarter
|
4.52
|
3.32
|
||||||
Third Quarter
|
3.88
|
2.60
|
||||||
Fourth Quarter
|
6.75
|
3.14
|
||||||
2011:
|
||||||||
First Quarter
|
12.20
|
6.05
|
||||||
Second Quarter
|
13.23
|
7.85
|
||||||
Third Quarter
|
9.99
|
6.07
|
||||||
Fourth Quarter
|
11.50
|
6.79
|
(1)
|
As previously disclosed, on March 9, 2010, Pernix completed its merger with GTA.
|
Period
|
Total
number
of shares
purchased
|
Average
price
paid per
share
|
Total number of shares purchased as part of publicly-announced
plans or
programs(1)
|
Maximum
approximate
dollar value of
shares that may
yet be
purchased
under the plans
or programs
|
||||||||||||
October 1, 2011 through October 31, 2011
|
---
|
$
|
---
|
---
|
$
|
1,150,130
|
||||||||||
November 1, 2011 through November 30, 2011
|
---
|
$
|
---
|
---
|
$
|
1,150,130
|
||||||||||
December 1, 2011 through December 31, 2011
|
—
|
$
|
—
|
—
|
$
|
1,150,130
|
||||||||||
Total
|
---
|
$
|
---
|
---
|
(1)
|
On May 12, 2010, our Board of Directors authorized the repurchase of up to $5,000,000 in shares of our common stock. The repurchase plan does not have a termination date and may be eliminated by our Board at any time. All shares of common stock were repurchased pursuant to open market transactions.
|
Year Ended
December 31,
|
||||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
Upper respiratory, allergy and antibiotic products
|
$
|
61,454
|
$
|
48,485
|
||||
Dietary supplements and medical food products
|
4,509
|
691
|
||||||
Dermatology products (including NATROBA)
|
12,633
|
903
|
||||||
Other generic products
|
8,152
|
---
|
||||||
Co-promotion and other revenue
|
4,634
|
2,490
|
||||||
Gross Revenues
|
91,382
|
52,569
|
||||||
Sales Allowances
|
(30,775
|
)
|
(19,342
|
)
|
||||
Net Sales Revenues
|
$
|
60,607
|
$
|
33,227
|
Product
Returns
|
Government
Program
Rebates
|
Price
Adjustments
|
||||||||||
(in thousands)
|
||||||||||||
Balance at December 31, 2009
|
$
|
3,975
|
$
|
2,301
|
$
|
647
|
||||||
Allowance assumed in acquisition of Macoven
|
245
|
55
|
325
|
|||||||||
Reclass accrual for prompt pay discounts
|
---
|
---
|
(127
|
)
|
||||||||
Current provision:
|
||||||||||||
Adjustments to provision for prior year sales
|
(682
|
)
|
—
|
—
|
||||||||
Provision – current year sales
|
2,882
|
9,288
|
6,517
|
|||||||||
Payments and credits
|
(2,107
|
)
|
(7,212
|
)
|
(5,618
|
)
|
||||||
Balance at December 31, 2010
|
4,313
|
4,432
|
1,744
|
|||||||||
Current provision:
|
||||||||||||
Adjustments to provision for prior year sales
|
498
|
1,137
|
300
|
|||||||||
Provision – current year sales
|
4,784
|
9,969
|
12,311
|
|||||||||
Payments and credits
|
(3,883
|
)
|
(9,695
|
)
|
(8,904
|
)
|
||||||
Balance at December 31, 2011
|
$
|
5,712
|
$
|
5,843
|
$
|
5,451
|
● |
the nature of the estimate or assumption is material due to the level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and
|
● |
the impact of the estimates and assumptions on its financial condition or operating performance is material.
|
Years Ended
December 31,
|
||||||||
2011
|
2010
|
|||||||
Cash provided by (used in)
|
||||||||
Operating activities
|
$
|
9,397,000
|
$
|
4,667,000
|
||||
Investing activities
|
(2,175,000
|
)
|
(5,695,000
|
)
|
||||
Financing activities
|
19,069,000
|
4,710,000
|
||||||
Net increase (decrease) in cash and cash equivalents
|
$
|
26,291,000
|
$
|
3,682,000
|
●
|
the extent to which Pernix acquires or invests in products, businesses and technologies;
|
●
|
the level of product sales of its currently marketed products and any additional products that Pernix may market in the future;
|
● | the level of inventory purchase commitments under supply, manufacturing, license and/or co-promotion agreements; |
● | the scope, progress, results and costs of development activities for Pernix’s current product candidates; |
● | the costs, timing and outcome of regulatory review of Pernix’s product candidates, including the development of BC 1036; |
● |
the number of, and development requirements for, additional product candidates that Pernix pursues;
|
● |
the costs of commercialization activities, including product marketing, sales and distribution;
|
● |
the costs and timing of establishing manufacturing and supply arrangements for clinical and commercial supplies of Pernix’s product candidates and products;
|
● |
the extent to which Pernix chooses to establish collaboration, co-promotion, distribution or other similar arrangements for its marketed products and product candidates; and
|
● |
the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending claims related to intellectual property owned by or licensed to Pernix.
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
Less than
1 Year
|
1-3 Years
|
3-5 Years
|
More than
5 Years
|
||||||||||||||||
Operating leases(1)
|
$
|
888
|
$
|
227
|
$
|
396
|
$
|
265
|
$
|
—
|
||||||||||
Purchase obligations(2)
|
154,022
|
46,903
|
107,083
|
36
|
—
|
|||||||||||||||
Line of credit(3)
|
6,132
|
6,132
|
—
|
—
|
—
|
|||||||||||||||
License Agreements(4)
|
90
|
90
|
—
|
—
|
—
|
|||||||||||||||
Other long-term debt obligations (5)
|
1,800
|
1,200
|
600
|
—
|
—
|
|||||||||||||||
Total contractual obligations
|
$
|
161,932
|
$
|
54,552
|
$
|
108,079
|
$
|
301
|
$
|
—
|
(1)
|
Operating leases include minimum payments under leases for our facilities and certain equipment. |
(2)
|
Purchase obligations include fixed or minimum payments under manufacturing and supply agreements with third-party manufacturers and other providers of goods and services. The contractual obligations table set forth above does not reflect certain minimum sales requirements related to our co-promotion agreements. Our failure to satisfy minimum sales requirements under our co-promotion agreements generally allows the counterparty to terminate the agreement and/or results in a loss of our exclusivity rights. For example, our co-promotion agreement with ParaPRO for NATROBA requires that we meet certain annual sales targets. In the event we are unable to meet these requirements, ParaPRO may revoke our exclusivity to market NATROBA and/or terminate the co-promotion agreement. In addition to minimum sales requirements under our co-promotion agreements, the table above does not include commitments under open purchase orders for inventory that can be cancelled without penalty, which are approximately $1.1 million.
Pursuant to the Supply and Distribution Agreement between the Company and ParaPRO, the Company has purchase commitments for NATROBA of approximately $43,729,000 in 2012, $61,690,000 in 2013 and $44,112, 000 in 2014 in order to retain its exclusive co-promotion rights. The Supply and Distribution Agreement may be terminated pursuant to certain terms in conditions, including but not limited to, the failure of the parties to come to agreement on adjusted dispensed product minimums.
|
(3)
|
See Note 13 of our Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for additional information. |
(4)
|
License agreements include payments due under certain product license arrangements for which payments are not contingent on sales or other achievements. |
(5)
|
Other long-term liabilities represents the payments due under a privately negotiated stock repurchase. See Notes 12 and 14 of our Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for additional information. |
Page
|
||||
Report of Independent Registered Public Accounting Firm
|
76
|
|||
Consolidated Balance Sheets as of December 31, 2011 and 2010
|
77
|
|||
Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2011 and 2010
|
78
|
|||
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2011 and 2010
|
79
|
|||
Consolidated Statements of Cash Flows for the years ended December 31, 2011 and 2010
|
80
|
|||
Notes to Consolidated Financial Statements
|
81
|
December 31,
|
||||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
34,551,180
|
$
|
8,260,059
|
||||
Restricted cash
|
—
|
501,906
|
||||||
Accounts receivable, net
|
20,601,360
|
14,758,240
|
||||||
Inventory, net
|
6,261,162
|
4,145,734
|
||||||
Prepaid expenses and other current assets
|
2,144,203
|
1,930,062
|
||||||
Deferred income tax assets – current
|
4,552,000
|
2,494,000
|
||||||
Total current assets
|
68,109,905
|
32,090,001
|
||||||
Property and equipment, net
|
911,948
|
1,213,850
|
||||||
Other assets:
|
||||||||
Investments
|
4,451,831
|
1,502,814
|
||||||
Intangible assets, net
|
8,876,504
|
10,961,900
|
||||||
Other long-term assets
|
213,783
|
264,967
|
||||||
Total assets
|
$
|
82,563,971
|
$
|
46,033,532
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
2,987,913
|
$
|
2,248,342
|
||||
Accrued personnel expense
|
2,044,121
|
848,013
|
||||||
Accrued allowances
|
17,006,409
|
10,488,674
|
||||||
Income taxes payable
|
585,931
|
2,149,052
|
||||||
Other accrued expenses
|
1,565,918
|
1,319,512
|
||||||
Contracts payable
|
1,290,000
|
2,200,000
|
||||||
Line of credit
|
6,000,000
|
—
|
||||||
Total current liabilities
|
31,480,292
|
19,253,593
|
||||||
Long-term liabilities
|
||||||||
Line of credit
|
—
|
5,000,000
|
||||||
Contracts payable
|
600,000
|
1,800,000
|
||||||
Deferred income taxes
|
860,000
|
1,075,000
|
||||||
Total liabilities
|
32,940,292
|
27,128,593
|
||||||
Commitments and contingencies
|
||||||||
STOCKHOLDERS’ EQUITY
|
||||||||
Common stock $.01 par value, 90,000,000 shares authorized, 27,820,004 and 24,698,594 issued,
and 25,749,137 and 22,627,727 outstanding at December 31, 2011 and 2010, respectively
|
257,491
|
226,277
|
||||||
Treasury stock, at cost (2,070,867 shares held at December 31, 2011 and 2010)
|
(3,751,890
|
)
|
(3,751,890)
|
|||||
Additional paid-in capital
|
30,185,294
|
8,934,735
|
||||||
Retained earnings
|
21,843,416
|
13,495,817
|
||||||
Other comprehensive income
|
1,089,368
|
—
|
||||||
Total stockholders’ equity
|
49,623,679
|
18,904,939
|
||||||
Total liabilities and stockholders’ equity
|
$
|
82,563,971
|
$
|
46,033,532
|
Years Ended
December 31,
|
||||||||
2011
|
2010
|
|||||||
Net sales
|
$
|
60,606,855
|
$
|
33,227,433
|
||||
Costs and expenses:
|
||||||||
Cost of product sales
|
20,536,290
|
5,442,549
|
||||||
Selling, general and administrative expenses
|
22,537,966
|
15,188,525
|
||||||
Research and development expense
|
922,432
|
998,224
|
||||||
Loss from operations of the joint venture with SEEK
|
814,351
|
—
|
||||||
Royalties expense, net
|
384,943
|
738,868
|
||||||
Depreciation and amortization expense
|
2,302,894
|
1,238,922
|
||||||
Total costs and expenses
|
47,498,876
|
23,607,088
|
||||||
Income from operations
|
13,107,979
|
9,620,345
|
||||||
Other income (expense):
|
||||||||
Other income
|
—
|
286,868
|
||||||
Gain from bargain purchase
|
—
|
881,950
|
||||||
Interest income (expense), net
|
(171,378)
|
5,624
|
||||||
Total other income (expense), net
|
(171,378)
|
1,174,442
|
||||||
Income before income taxes
|
12,936,601
|
10,794,787
|
||||||
Income tax provision
|
4,589,000
|
1,486,000
|
||||||
Net income
|
8,347,601
|
9,308,787
|
||||||
Unrealized gain on securities, net of income tax of $674,000
|
1,089,368
|
—
|
||||||
Comprehensive income
|
$
|
9,436,969
|
$
|
9,308,787
|
||||
Net income per share, basic
|
$
|
0.35
|
$
|
0.40
|
||||
Net income per share, diluted
|
$
|
0.34
|
$
|
0.40
|
||||
Weighted-average common shares, basic
|
23,990,734
|
23,415,449
|
||||||
Weighted-average common shares, diluted
|
24,460,291
|
23,418,398
|
Common
Stock
|
Additional
Paid-In
Capital
|
Treasury
Stock
|
Retained
Earnings
|
Non-
Controlling
Interest
|
Accumulated Other Comprehensive Income |
Total
|
||||||||||||||||||||||
Balance at December 31, 2009
|
$
|
209,000
|
$
|
788,979
|
$
|
—
|
$
|
4,308,491
|
$
|
69,738
|
$ |
—
|
$
|
5,376,208
|
||||||||||||||
Distributions to stockholders
|
—
|
—
|
—
|
(121,461
|
)
|
—
|
— |
(121,461
|
)
|
|||||||||||||||||||
Transfer of equity in reverse merger with GTA
|
36,586
|
7,073,911
|
—
|
—
|
—
|
—
|
7,110,497
|
|||||||||||||||||||||
Acquisition of Gaine non-controlling interest
|
—
|
(1,602,692
|
)
|
—
|
—
|
(69,738
|
)
|
—
|
(1,672,430
|
)
|
||||||||||||||||||
Contributed capital in acquisition of Macoven
|
—
|
2,211,344
|
—
|
—
|
—
|
—
|
2,211,344
|
|||||||||||||||||||||
Stock repurchase program
|
||||||||||||||||||||||||||||
Open market repurchases
|
(709
|
)
|
(1,772
|
)
|
(247,390
|
)
|
—
|
—
|
— |
(249,871
|
)
|
|||||||||||||||||
Negotiated repurchase from related party
|
(20,000
|
)
|
(75,500
|
)
|
(3,504,500
|
)
|
—
|
—
|
— |
(3,600,000
|
)
|
|||||||||||||||||
Proceeds from issuance of common stock
|
400
|
77,200
|
—
|
—
|
—
|
— |
77,600
|
|||||||||||||||||||||
Stock-based compensation
|
||||||||||||||||||||||||||||
Restricted stock
|
1,000
|
106,946
|
—
|
—
|
—
|
— |
107,946
|
|||||||||||||||||||||
Stock options
|
—
|
356,319
|
—
|
—
|
—
|
— |
356,319
|
|||||||||||||||||||||
Net income
|
—
|
—
|
—
|
9,308,787
|
—
|
— |
9,308,787
|
|||||||||||||||||||||
Balance at December 31, 2010
|
226,277
|
8,934,735
|
(3,751,890
|
)
|
13,495,817
|
—
|
—
|
18,904,939
|
||||||||||||||||||||
Stock-based compensation
|
||||||||||||||||||||||||||||
Restricted stock
|
600
|
320,192
|
—
|
—
|
—
|
— |
320,792
|
|||||||||||||||||||||
Stock options
|
—
|
861,507
|
—
|
—
|
—
|
— |
861,507
|
|||||||||||||||||||||
Employee stock purchase plan
|
—
|
100,968
|
—
|
—
|
—
|
— |
100,968
|
|||||||||||||||||||||
Issuance of stock options for services from non-employees
|
—
|
312,563
|
—
|
—
|
—
|
— |
312,563
|
|||||||||||||||||||||
Issuance of common stock upon the exercise of stock options
|
279
|
78,122
|
—
|
—
|
—
|
— |
78,401
|
|||||||||||||||||||||
Issuance of common stock in connection with employee
stock purchase plan
|
335
|
210,460
|
—
|
—
|
—
|
— |
210,795
|
|||||||||||||||||||||
Income tax benefit on stock based awards
|
—
|
137,000
|
—
|
—
|
—
|
— |
137,000
|
|||||||||||||||||||||
Issuance of common stock upon registered direct offering,
net of issuance costs of $255,254
|
30,000
|
19,229,745
|
—
|
—
|
—
|
—
|
19,259,745
|
|||||||||||||||||||||
Net income
|
—
|
—
|
—
|
8,347,601
|
—
|
— |
8,347,601
|
|||||||||||||||||||||
Unrealized gain on securities, net
|
—
|
—
|
—
|
—
|
1,089,368
|
1,089,368
|
||||||||||||||||||||||
Balance at December 31, 2011
|
$
|
257,491
|
$
|
30,185,292
|
$
|
(3,751,890
|
)
|
$
|
21,843,418
|
$
|
—
|
$ |
1,089,368
|
$
|
49,623,679
|
Years Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
8,347,601
|
$
|
9,308,787
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation
|
97,498
|
61,322
|
||||||
Amortization
|
2,205,396
|
1,177,600
|
||||||
Impairment charge to fair value of land
|
380,000
|
—
|
||||||
Deferred income tax benefit
|
(2,273,000
|
)
|
(3,055,000)
|
|||||
Stock compensation expense
|
1,283,267
|
464,265
|
||||||
Expense for stock options issued in exchange for services
|
312,563
|
—
|
||||||
Gain from bargain purchase from Macoven acquisition
|
—
|
(881,950)
|
||||||
Loss from the operations of the joint venture with SEEK
|
814,351
|
—
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(5,843,120
|
)
|
(8,361,058
|
)
|
||||
Income taxes
|
(2,237,121
|
)
|
2,049,048
|
|||||
Inventory
|
(2,115,428
|
)
|
(1,265,412)
|
|||||
Prepaid expenses and other assets
|
(325,568
|
)
|
170,110
|
|||||
Other assets – long term
|
51,184
|
118,366
|
||||||
Accounts payable
|
739,570
|
1,575,621
|
||||||
Accrued expenses
|
7,960,249
|
3,304,915
|
||||||
Net cash provided by operating activities
|
9,397,442
|
4,666,614
|
||||||
Cash flows from investing activities:
|
||||||||
Investment in TherapeuticsMD
|
(1,000,000
|
)
|
—
|
|||||
Investment in joint venture with SEEK
|
(1,000,000
|
)
|
(1,502,814)
|
|||||
Acquisition of Macoven, net of cash acquired of $189,274
|
—
|
(1,996,432)
|
||||||
Acquisition of CEDAX – initial payment (see Note 4)
|
—
|
(1,500,000)
|
||||||
Acquisition of non-controlling interest in Gaine - initial payment
|
—
|
(326,623)
|
||||||
Purchase of intangible assets
|
—
|
(250,000
|
)
|
|||||
Purchase of equipment and payments for construction in progress
|
(175,596
|
)
|
(119,580
|
)
|
||||
Net cash used in investing activities
|
(2,175,596
|
)
|
(5,695,449
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Cash acquired in connection with the reverse merger, net of costs paid
|
—
|
5,965,529
|
||||||
Proceeds from line of credit
|
1,000,000
|
5,000,000
|
||||||
Payments on contracts payable
|
(1,230,000
|
)
|
—
|
|||||
Transfer to/from restricted cash
|
500,000
|
(501,906)
|
||||||
Payments received on notes receivable
|
113,333
|
86,334
|
||||||
Payment on acquisition obligation – CEDAX (see Note 4)
|
—
|
(4,600,000)
|
||||||
Payment on acquisition obligation – Gaine (see Note 4)
|
(1,000,000
|
)
|
(345,807)
|
|||||
Distributions to stockholders
|
—
|
(121,461
|
)
|
|||||
Tax benefit on stock-based awards
|
137,000
|
— | ||||||
Repurchase of common stock
|
—
|
(849,871)
|
||||||
Proceeds from issuance of common stock in registered direct offering, net of issuance costs of $255,254
|
19,259,746
|
—
|
||||||
Proceeds from issuance of common stock through exercise of stock options and employee stock purchase plan
|
289,196
|
77,600
|
||||||
Net cash provided by financing activities
|
19,069,275
|
4,710,418
|
||||||
Net increase in cash and cash equivalents
|
26,291,121
|
3,681,583
|
||||||
Cash and cash equivalents, beginning of year
|
8,260,059
|
4,578,476
|
||||||
Cash and cash equivalents, end of year
|
$
|
34,551,180
|
$
|
8,260,059
|
||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||
Cash paid for income taxes
|
$
|
8,911,190
|
$
|
2,653,043
|
||||
Interest paid during the period
|
177,816
|
19,485
|
||||||
Non-cash transactions:
|
||||||||
Contract for product license – contract payable (total $120,000)
|
$
|
90,000
|
$
|
—
|
||||
Write off/donation of inventory
|
2,001,464 | 46,032 | ||||||
Negotiated repurchases of Pernix common stock from insider
|
—
|
3,600,000
|
||||||
Contribution of capital in acquisition of Macoven
|
—
|
2,211,344
|
Note 1.
|
Company Overview
|
Note 2.
|
Summary of Significant Accounting Policies
|
Level 1
|
|
Quoted prices in active markets for identical assets or liabilities as of the reporting date.
|
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 as of the reporting date.
|
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.
|
2011 | ||||||||||||||||
Financial Assets
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Notes receivable
|
—
|
—
|
4
|
4
|
||||||||||||
Investment in TherapeuticsMD
|
|
—
|
|
|
—
|
|
|
2,763
|
|
|
2,763
|
|
||||
Land (1)
|
|
—
|
|
|
—
|
|
|
572
|
|
|
572
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,339
|
|
|
$
|
3,339
|
|
2010 | ||||||||||||||||
Financial Assets
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
Total
|
|||||||||
Note receivable(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
114
|
|
|
$
|
114
|
|
Land(1)
|
|
—
|
|
|
—
|
|
|
952
|
|
|
952
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,066
|
|
|
$
|
1,066
|
|
(1)
|
Measured on a non-recurring basis.
|
Service Life
|
|
Leasehold improvements
|
15 years
|
Equipment
|
5-7 years
|
Furniture and fixtures
|
5-7 years
|
Computer software and website
|
3 years
|
Year Ended
December 31,
(in thousands)
|
||||||||
2011
|
2010
|
|||||||
Gross Product Sales
|
||||||||
Upper respiratory, allergy and antibiotic products
|
$
|
61,454
|
$
|
48,485
|
||||
Dietary supplements and medical food products
|
4,509
|
691
|
||||||
Other generic products
|
8,152
|
—
|
||||||
Dermatology products (including NATROBA)
|
12,633
|
903
|
||||||
Gross product sales
|
86,748
|
50,079
|
||||||
Sales allowances
|
(30,775
|
)
|
(19,342
|
)
|
||||
Net product sales
|
55,973
|
30,737
|
||||||
Co-promotion, royalty and other revenues
|
4,634
|
2,490
|
||||||
Net Revenues
|
$
|
60,607
|
$
|
33,227
|
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Numerator:
|
||||||||
Net income
|
$
|
8,347,601
|
$
|
9,308,787
|
||||
Denominator:
|
||||||||
Weighted-average common shares, basic
|
23,990,734
|
23,381,676
|
||||||
Dilutive effect of stock options
|
469,557
|
33,773
|
||||||
Weighted-average common shares, diluted
|
24,460,291
|
23,415,449
|
||||||
Net income per share, basic
|
$
|
0.35
|
$
|
0.40
|
||||
Net income per share, diluted
|
$
|
0.34
|
$
|
0.40
|
TherapeuticsMD Common Stock
|
Cost
|
Appreciation
|
Discount |
Fair Value
|
|||||||||||||
2,631,579 shares
|
$ | 1,000,000 | $ | 2,947,368 | $ | (1,184,000 | ) | $ | 2,763,368 |
Note 3.
|
Fair Value Measurement
|
Level 1— Quoted prices in active markets for identical assets or liabilities.
|
Level 2— Observable inputs other than Level 1 prices 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. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
|
Note 5.
|
Accounts Receivable
|
December 31,
|
||||||||
2011
|
2010 | |||||||
Trade accounts receivable
|
$ | 18,844,320 | $ | 13,383,021 | ||||
Less allowance for customer discounts
|
(393,174 | ) | (305,917 | ) | ||||
Total trade receivables
|
18,451,146 | 13,077,104 | ||||||
Other receivables
|
4,000 | 2,203 | ||||||
Receivables from third parties – collaboration arrangements
|
2,146,214 | 1,678,933 | ||||||
Total account receivables
|
$ | 20,601,360 | $ | 14,758,240 |
Note 6.
|
Inventory
|
December 31,
|
||||||||
2011
|
2010
|
|||||||
Purchased finished goods
|
$
|
5,848,295
|
$
|
4,145,734
|
||||
Purchased raw materials
|
412,867
|
—
|
||||||
$
|
6,261,162
|
$
|
4,145,734
|
Note 7.
|
Prepaid Expenses and Other Current Assets
|
December 31,
|
||||||||
2011
|
2010
|
|||||||
Prepaid expenses
|
$
|
885,558
|
$
|
759,559
|
||||
Deposits on inventory and prepaid royalties
|
1,046,691
|
1,020,541
|
||||||
Prepaid contracts
|
208,333
|
—
|
||||||
Other current assets | 3,621 | 113,962 | ||||||
Total
|
$
|
2,144,203
|
$
|
1,930,062
|
Note 8.
|
Property, Plant & Equipment
|
December 31,
|
||||||||
2011
|
2010
|
|||||||
Land
|
$
|
572,342
|
$
|
952,342
|
||||
Buildings
|
35,421
|
25,485
|
||||||
Equipment
|
444,959
|
319,016
|
||||||
Furniture and fixtures
|
92,715
|
52,998
|
||||||
Computer software and website
|
88,500
|
88,500
|
||||||
1,233,937
|
1,438,341
|
|||||||
Less accumulated depreciation
|
(321,989
|
)
|
(224,491
|
)
|
||||
$
|
911,948
|
$
|
1,213,850
|
Note 9.
|
Investment in Joint Venture
|
Condensed Balance Sheet as of: | December 31, | |||||||
(unaudited) (in thousands)
|
2011
|
2010
|
||||||
Cash and other current assets
|
$
|
1,512
|
$
|
1,332
|
||||
Intellectual property and other rights (including capitalized development costs)
|
1,719
|
1,676
|
||||||
Total assets
|
$
|
3,231
|
$
|
3,008
|
||||
Equity
|
$
|
3,231
|
$
|
3,008
|
||||
Loss from operations of the joint venture with SEEK
|
$
|
814
|
$
|
—
|
Note 10.
|
Intangible Assets
|
December 31
,
|
|||||||||
Life
|
2011
|
2010
|
|||||||
Patents
|
12 - 15 years
|
$
|
1,442,000
|
$
|
1,442,000
|
||||
Brand – CEDAX
|
8 years
|
3,887,000
|
3,887,000
|
||||||
Product license
|
1 year
|
120,000
|
—
|
||||||
Non-compete and supplier contract – Macoven
|
3 years
|
5,194,571
|
5,194,571
|
||||||
Trademark rights – BROVEX
|
Indefinite
|
238,758
|
238,758
|
||||||
Non-compete- Ubiquinone | 2 years |
—
|
250,000 | ||||||
Goodwill
|
Indefinite
|
1,406,591
|
1,406,591
|
||||||
12,288,920
|
12,418,920
|
||||||||
Accumulated amortization
|
(3,412,416
|
)
|
(1,457,020
|
)
|
|||||
$
|
8,876,504
|
$
|
10,961,900
|
Amount
|
||||
2012
|
$
|
1,791,000
|
||
2013
|
1,055,000
|
|||
2014
|
1,055,000
|
|||
2015
|
1,055,000
|
|||
2016
|
1,055,000
|
|||
Thereafter
|
1,220,000
|
|||
$
|
7,231,000
|
Note 11.
|
Accrued Allowances
|
December 31,
|
||||||||
2011
|
2010
|
|||||||
Accrued returns allowance
|
|
$
|
5,712,500
|
|
$
|
4,313,000
|
||
Accrued price adjustments
|
5,450,619
|
1,743,674
|
||||||
Accrued government program rebates
|
5,843,290
|
4,432,000
|
||||||
Total
|
$
|
17,006,409
|
$
|
10,488,674
|
Note 12.
|
Contracts Payable
|
December 31,
|
||||||||
2011
|
2010
|
|||||||
Stock repurchase contract with related party (see Note 14)
|
$
|
1,200,000
|
$
|
1,200,000
|
||||
Gaine acquisition
|
—
|
1,000,000
|
||||||
Product license contract
|
90,000
|
—
|
||||||
Total contracts payable – short term
|
$
|
1,290,000
|
$
|
2,200,000
|
||||
Stock repurchase contract with related party (see Note 14) – long term
|
$
|
600,000
|
$
|
1,800,000
|
Note 13.
|
Lines of Credit
|
Note 14.
|
Stockholders’ Equity
|
Note 15.
|
Concentrations
|
Gross Product Sales |
For the years ended
December 31,
|
|||||||
2011
|
2010
|
|||||||
Cardinal Health, Inc.
|
37%
|
43%
|
||||||
McKesson Corporation
|
23%
|
29%
|
||||||
AmerisourceBergen Drug Corporation
|
11%
|
8%
|
||||||
Morris & Dickson
|
13%
|
13%
|
||||||
Total
|
84%
|
93%
|
Accounts Receivable
|
As of December 31,
|
|||||||
2011
|
2010
|
|||||||
Cardinal Health, Inc.
|
30%
|
50%
|
||||||
McKesson Corporation
|
32%
|
27%
|
||||||
Morris & Dickson
|
5%
|
11%
|
||||||
Total
|
67%
|
88%
|
Note 16.
|
Other Revenue Sharing Arrangements
|
Year Ended
December 31,
|
Six Months Ended
December 31
(2)
,
|
|||||||||||||||
2011
(1)
|
2010
|
2011
(1)
|
2010
|
|||||||||||||
Pernix Consolidated Gross Margin
-
including Natroba
|
69
|
%
|
N/A
|
64
|
%
|
N/A
|
||||||||||
Pernix Consolidated Gross Margin - excluding Natroba
|
78
|
%
|
84
|
%
|
77
|
%
|
82
|
%
|
Note 17.
|
Employee Compensation and Benefits
|
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Expected stock price volatility - range
|
69.2 - 77.4 | % | 69.3 - 76.3 | % | ||||
Estimated dividend yield
|
0.00 | % | 0.00 | % | ||||
Risk-free interest rate
|
1.45 | % | 2.51 | % | ||||
Expected life of option (in years)
|
6.02 | 6.00 | ||||||
Weighted-average grant-date fair value per share
|
$ | 4.68 | $ | 2.42 |
Option Shares
|
Shares
|
Weighted-
Average
Exercise Price
|
Weighted-Average Remaining Contractual Term
|
Aggregate
Intrinsic
Value ($000)
|
||||||||||||
Outstanding at December 31, 2010
|
1,026,000 | $ | 3.81 |
|
||||||||||||
Granted
(1)
|
891,000 | 5.45 |
|
|||||||||||||
Exercised
|
(27,842 | ) | 2.81 |
|
||||||||||||
Cancelled
|
(30,667 | ) | 4.04 |
|
||||||||||||
Expired
|
(10,000 | ) | 15.7 |
|
||||||||||||
Outstanding at December 31, 2011
|
1,848,491 | $ | 4.55 | 8.0 | $ | 8,742,755 | ||||||||||
Vested and exercisable, end of period
|
480,154 | $ | 3.73 | 4.9 | $ | 2,655,702 |
Options Outstanding
|
Options Exercisable
|
||||||||||||||||
Range of Exercise Price
|
Shares
|
Remaining
Contractual Life
(years)
|
Shares
|
Price | |||||||||||||
1.94 |
20,000
|
1.2
|
20,000
|
$ |
$1.94
|
||||||||||||
2.20 |
30,833
|
1.2
|
30,833
|
2.20
|
|||||||||||||
3.31 - $3.98 | (1) |
1,233,158
|
8.8
|
289,321
|
3.72
|
||||||||||||
4.20 |
137,500
|
1.2
|
137,500
|
4.20
|
|||||||||||||
6.10 |
197,000
|
9.6
|
-
|
-
|
|||||||||||||
7.90 |
40,000
|
9.0
|
-
|
-
|
|||||||||||||
8.20 |
150,000
|
9.9
|
-
|
-
|
|||||||||||||
10.14 |
40,000
|
9.2
|
2,500
|
-
|
|||||||||||||
1,848,491
|
8.1
|
480,154
|
$ |
$3.73
|
Years Ended
December 31,
|
||||||||
2011
|
2010
|
|||||||
Employees
|
$
|
834,000
|
$
|
287,000
|
||||
Non-employees/Directors
|
449,000
|
177,000
|
||||||
Total
|
$
|
1,283,000
|
$
|
464,000
|
Note 18.
|
Income Taxes
|
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Current:
|
||||||||
Federal
|
$
|
6,566,000
|
$
|
3,765,000
|
||||
State
|
970,000
|
776,000
|
||||||
7,536,000
|
4,541,000
|
|||||||
Deferred Provision:
|
||||||||
Federal
|
(2,551,000
|
)
|
(2,807,000
|
)
|
||||
State
|
(396,000
|
)
|
(248,000
|
)
|
||||
(2,947,000
|
)
|
(3,055,000
|
)
|
|||||
$
|
4,589,000
|
$
|
1,486,000
|
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Deferred tax assets:
|
||||||||
Accounts receivable
|
$
|
149,000
|
$
|
118,000
|
||||
Accruals
|
3,831,000
|
2,268,000
|
||||||
Stock awards
|
515,000
|
42,000
|
||||||
Investment in joint venture with SEEK
|
312,000
|
—
|
||||||
NOL carryovers
|
493,000
|
649,000
|
||||||
Differences in carry value of property and equipment | 66,000 |
—
|
||||||
Gross deferred tax assets
|
5,366,000
|
3,077,000
|
||||||
Deferred tax liabilities:
|
||||||||
Differences in carrying value of property and equipment
|
$
|
—
|
$
|
(33,000
|
)
|
|||
Other
|
(99,000
|
)
|
(90,000
|
)
|
||||
Intangibles
|
(901,000
|
)
|
(1,535,000
|
)
|
||||
Investments
|
(674,000
|
)
|
—
|
|||||
Gross deferred tax liability
|
(1,674,000
|
)
|
(1,658,000
|
)
|
||||
Net deferred tax asset/(liability)
|
3,692,000
|
1,419,000
|
||||||
Included in consolidated balance sheet:
|
||||||||
Deferred income tax assets/deferred income tax liabilities–current
|
4,552,000
|
2,494,000
|
||||||
Deferred income tax assets/deferred income tax liabilities–long-term
|
(860,000
|
)
|
(1,075,000
|
)
|
||||
Net deferred tax asset
|
$
|
3,692,000
|
$
|
1,419,000
|
December 31,
|
||||||||
2011
|
2010
|
|||||||
Expected taxes at statutory rates
|
35.0
|
%
|
35.0%
|
|||||
State taxes, net of federal tax benefit
|
2.9
|
%
|
3.2%
|
|||||
Establishment of deferred tax asset due to tax status change
|
—
|
(17.0)%
|
||||||
Release of valuation allowance
|
—
|
(7.2)%
|
||||||
Other
|
(2.4)
|
%
|
(0.2)%
|
|||||
35.5
|
%
|
13.8%
|
Note 19
|
Commitments and Contingencies
|
Note 20.
|
Subsequent Events
|
Name
|
Age
|
Position(s)
|
||
Michael C. Pearce
|
50 |
Chairman of the Board
|
||
Cooper C. Collins
|
32 |
President, Chief Executive Officer and Director
|
||
David P. Becker
|
45 |
Chief Financial Officer
|
||
Charles S. Hrushka
|
60 |
Vice President of Sales and Marketing
|
||
Anthem H. Blanchard
|
32 |
Director
|
||
Steven A. Elms
|
52 |
Director
|
||
James E. Smith
|
59 |
Director
|
·
|
Public company management
|
·
|
Strategic planning
|
·
|
Business development
|
·
|
Operational knowledge of our business
|
·
|
Sales and marketing knowledge and experience
|
·
|
Strategic planning
|
·
|
Emerging company management
|
·
|
Business development
|
·
|
Financial expertise
|
·
|
Financial expertise
|
·
|
Public company management
|
·
|
Audit committee experience
|
·
|
Legal expertise
|
·
|
Private company management
|
·
|
Operational knowledge of our Company
|
-
|
the appointment, compensation, retention, evaluation and oversight of the work of our independent registered public accounting firm;
|
-
|
reviewing the experience and qualifications of the senior members and lead partner of the independent registered public accounting firm;
|
-
|
reviewing, evaluating and approving the annual engagement proposal of the independent registered public accounting firm;
|
-
|
the pre-approval of all auditing services and all non-audit services permitted to be performed by the independent registered public accounting firm;
|
-
|
determining the independence of our independent registered public accounting firm;
|
-
|
reviewing any audit problems or difficulties the independent registered public accountants may encounter in the course of their audit work.
|
-
|
reviewing all proposed “related-party” transactions for potential conflict-of-interest situations;
|
-
|
reviewing and discussing with management and our independent registered public accounting firm annual audited financial statements, quarterly financial statements, material accounting principles applied in financial reporting and any other release of financial information;
|
-
|
reviewing and discussing with management our policies with respect to risk assessment and risk management;
|
-
|
reviewing the integrity, adequacy, and effectiveness of our accounting and financial controls, both internal and external, with the assistance of our independent registered public accounting firm, any internal auditors and accounting personnel;
|
-
|
discussing with our Chief Executive Officer and Chief Financial Officer the processes involved in, and any material required as a result of, their Annual Report on Form 10-K and Quarterly Report on Form 10-Q certifications regarding the operation of the internal controls of Pernix;
|
-
|
reviewing reports from management, the independent registered public accountants, counsel, tax advisors or any regulatory agency relating to the status of compliance with laws, regulations, and internal procedures;
|
-
|
approving and monitoring our compliance with our Code of Business Conduct and Ethics, which covers the conduct and ethical behavior of the directors, officers, and employees of Pernix; and
|
-
|
establishing procedures for the receipt, retention and treatment, on a confidential basis, of complaints received by Pernix.
|
-
|
reviewing the compensation practices and policies of Pernix to ensure they provide appropriate motivation for corporate performance and increased stockholder value;
|
-
|
approving (or recommending, where stockholder approval is required) any adoption, amendment or termination of compensation programs and plans;
|
-
|
overseeing the administration of our compensation programs and plans, including the determination of the directors and employees who are to receive awards and the terms of those awards;
|
-
|
conducting periodic surveys of compensation practices of comparable companies;
|
-
|
conducting an annual review and approval of compensation and benefits to directors and senior executives;
|
-
|
reviewing and approving the Company’s policies and procedures with respect to expense accounts and perquisites of the executive officers;
|
-
|
reviewing and approving our corporate goals and objectives for our Chief Executive Officer;
|
-
|
reviewing the performance of our Chief Executive Officer with regard to such goals and objectives with the independent members of our Board and communicating to our Chief Executive Officer the Board ’s evaluation of his performance;
|
-
|
reviewing and recommending to the Board of Directors the “Compensation Discussion and Analysis ” if required to be included, as applicable, in our Annual Report on Form 10-K, annual proxy statement, or any information statement;
|
-
|
composing the “Compensation Committee Report, ” if required to be included in our annual proxy statement;
|
-
|
reviewing and making recommendations to our Board regarding the directors ’ and officers’ indemnification and insurance matters; and
|
-
|
conducting an annual performance evaluation of the Compensation Committee.
|
-
|
establishing criteria for selecting new directors;
|
-
|
considering and recruiting candidates to fill new positions on our Board, including any candidate recommended by the stockholders;
|
-
|
conducting appropriate inquiries to establish a candidate’s compliance with the qualification requirements established by the Nominating Committee;
|
-
|
assessing the contributions of individual directors, including those directors slated for re-election;
|
-
|
recommending director nominees for approval by our Board;
|
-
|
evaluating of the performance of our Board as a whole and of the Nominating Committee at least annually; and
|
-
|
reviewing and making recommendations to our Board with respect to any proposal properly presented by a stockholder for inclusion in our annual proxy statement (which may be referred to any other Board committee as appropriate in light of the subject matter of the proposal).
|
Salary
|
Bonus
(2)
|
Option Awards
(3)
|
All Other Compensation
|
Total
|
|||||||||||||||||
Name and Position
(1)
|
Year
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||
Cooper C. Collins
|
2011
|
290,000
|
300,000
|
—
|
39,104
|
(4)
|
629,104
|
||||||||||||||
President and Chief Executive Officer
|
2010
|
290,000
|
300,000
|
—
|
40,155
|
(4)
|
630,155
|
||||||||||||||
David P. Becker
|
2011
|
17,398
|
—
|
759,329
|
750
|
777,477
|
|||||||||||||||
Chief Financial Officer
|
2010
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Tracy S. Clifford
|
2011
|
188,000
|
110,500
|
65,098
|
31,820
|
(5)
|
395,418
|
||||||||||||||
Former Chief Financial Officer; Current Controller,
Finance Director Secretary and Treasurer
|
2010
|
143,060
|
100,000
|
181,392
|
34,187
|
(5)
|
458,639
|
||||||||||||||
Charles S. Hrushka
|
2011
|
13,237
|
—
|
—
|
750
|
13,987
|
|||||||||||||||
Vice President of Sales and Marketing |
(1)
|
The individuals listed in this table were named executive officers of Pernix as of December 31, 2011 except as otherwise described herein.
|
(2)
|
Cash bonuses are awarded to Pernix’s executive officers to reward commendable performance of specially designated tasks or outstanding performance of assigned responsibilities. Bonuses are discretionary and are not calculated or paid according to a formula or specific time frame or schedule.
|
(3)
|
These amounts reflect the aggregate grant date fair value of the options granted to the named executive officers, determined using the Black-Scholes option model. See further discussion of these options below under the caption “Awards of Equity Compensation.”
|
(4)
|
“All Other Compensation” in 2011 for Mr. Collins includes (i) auto allowance, (ii) medical and dental insurance coverage, (iii) Company contributions to his 401(k) account and (iv) other miscellaneous items that total less than $5,000. “All Other Compensation” in 2010 for Mr. Collins includes (i) auto allowance, (ii) medical and dental insurance coverage, and (iii) our contributions to his 401(k) account.
|
(5)
|
“All Other Compensation” in 2011 for Ms. Clifford includes (i) auto allowance, (ii) medical and dental insurance coverage, (iii) Company contributions to her 401(k) account and (iv) other miscellaneous items that total less than $5,000. “All Other Compensation” in 2010 for Ms. Clifford includes (i) auto allowance, (ii) medical and dental insurance coverage, (iii) our contributions to her 401(k) account, (iv) a non-cash trip incentive, and (v) the pay-out of accrued vacation time in transferring her employment from GTA to Pernix.
|
-
|
require that all outstanding Incentives be exercised by a certain date;
|
-
|
require the surrender to Pernix of some or all outstanding Incentives in exchange for a stock or cash payment for each incentive equal in value to the per-share change in control value, calculated as described in the Plan, over the exercise or base price;
|
-
|
make any equitable adjustment to outstanding Incentives as the Committee deems necessary to reflect such change of control; or
|
-
|
provide that an Incentive shall become an Incentive relating to the number and class of shares of stock or other securities or property (including cash) to which the participant would have been entitled in connection with the change of control transaction if the participant had been a stockholder.
|
Outstanding Equity Awards at December 31, 2011
|
|||||||||||
Name
|
Number of
securities
underlying unexercised
options
(#)
exercisable
|
Number of securities underlying unexercised options (#) unexercisable
|
Option
Exercise
Price
|
Option
Expiration
Date
|
|||||||
Cooper Collins
|
—
|
—
|
—
|
—
|
|||||||
President and Chief Executive Officer
|
|||||||||||
David Becker |
—
|
150,000 | (1) | 8.20 | 12/05/2021 | ||||||
Chief Financial Officer | |||||||||||
Tracy Clifford |
25,000
|
—
|
3.80 | 3/9/2013 | |||||||
Former Chief Financial Officer; Current Controller, |
5,000
|
—
|
2.20 | 3/9/2013 | |||||||
Director of Finance, Secretary and Treasurer |
25,000
|
50,000 |
(2)
|
3.73 | 5/12/2020 | ||||||
—
|
17,000 |
(2)
|
6.10 | 8/12/2021 | |||||||
Charles Hrushka(3) |
—
|
—
|
—
|
—
|
|||||||
Vice President of Sales and Marketing | |||||||||||
(1)
|
Mr. Becker was awarded 150,000 options on December 5, 2011, his first day of employment, as described above. These options vest ratably over three years and expire ten years from the date of issuance.
|
(2)
|
Ms. Clifford was awarded 75,000 options on May 12, 2010 and 17,000 on August 12, 2011, both of which vest ratably over three years and expire ten years from the date of issuance.
|
(3)
|
Mr. Hrushka was hired on December 5, 2011, but was granted an option to purchase 50,000 shares in January 2012, none of which is currently vested.
|
Fees Earned
or
Paid
in Cash
|
Stock
Awards
(1)
|
Option
Awards
(1)
|
Non-Equity
Incentive Plan Compensation
|
Nonqualified
Deferred Compensation Earnings
|
All Other Compensation
|
Total
|
||||||||||||||||||||||
Name and Position
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||||||||
Michael C. Pearce
|
59,879
|
101,400
|
69,089
|
—
|
—
|
11,438
|
241,806
|
|||||||||||||||||||||
Cooper C. Collins
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||
Anthem H. Blanchard
|
47,177
|
101,400
|
69,089
|
—
|
—
|
—
|
217,666
|
|||||||||||||||||||||
Jan H. Loeb
|
44,043
|
101,400
|
69,089
|
—
|
—
|
—
|
214,532
|
|||||||||||||||||||||
Steven A. Elms
|
5,916
|
---
|
---
|
---
|
---
|
---
|
5,916
|
|||||||||||||||||||||
James E. Smith, Jr.
|
41,371
|
101,400
|
69,089
|
—
|
—
|
—
|
211,860
|
(1)
|
Reflects the aggregate grant date fair value of equity awards granted in 2011 and calculated in accordance with FASB ASC 718, excluding effect of estimated forfeitures.
|
Plan Category
|
Number of Securities
to be
Issued
upon
Exercise of
Outstanding Options,
Warrants
and Rights
|
Weighted-Average
Exercise
Price of
Outstanding Options,
Warrants and Rights
|
Number of Securities
Remaining Available for
Future
Issuance
under Equity
Compensation
Plans(Excluding Securities
Reflected in Column (a))
|
|||||||||
(a)(1)
|
(b)
|
(c)(2)
|
||||||||||
Equity Compensation Plans Approved by Security Holders
|
1,848,491 | $ | 4.55 | 4,640,099 | ||||||||
Equity Compensation Plans Not Approved by Security Holders
|
--- | --- | --- | |||||||||
Total
|
1,848,491 | 4.55 | 4,460,099 |
Name of Beneficial Owner
|
Shares Acquirable within 60 Days upon Exercise of Stock Options
|
Shares of
Restricted
Stock
(1)
|
Total Number
of Shares
Beneficially
Owned
(2)
|
Percentage
of Class
(3)
|
||||||||||||
Directors
|
||||||||||||||||
Michael Pearce
|
158,333
|
36,667
|
195,000
|
.74
|
%
|
|||||||||||
Anthem Blanchard
|
20,000
|
45,000
|
65,000
|
.25
|
%
|
|||||||||||
Steve Elms
(5)
|
---
|
10,000 |
2,010,000
|
7.63
|
%
|
|||||||||||
James Smith, Jr.
|
20,000
|
45,000
|
5,025,904
|
19.06
|
%
|
|||||||||||
Named Executive Officers
|
||||||||||||||||
Cooper Collins
(4)
|
---
|
---
|
8,906,571
|
33.80
|
%
|
|||||||||||
David Becker
|
---
|
---
|
---
|
---
|
||||||||||||
Tracy Clifford
|
80,000
|
---
|
81,706
|
.31
|
% | |||||||||||
Charles Hrushka
|
---
|
---
|
---
|
---
|
||||||||||||
All Current Directors and Officers as a Group (7 Persons)
|
358,333
|
136,667
|
16,284,181
|
61.16
|
%
|
(1)
|
Each holder of restricted stock has sole voting power but no investment power over the shares he or she beneficially owns.
|
(2)
|
The figures in this column includes all shares currently beneficially owned by the respective holder with full voting and investment power, plus the amounts reported in the previous two columns (“Shares Acquirable within 60 Days upon Exercise of Stock Options” and “Shares of Restricted Stock”).
|
(3)
|
Based on 26,034,272 shares of our common stock outstanding on March 23, 2012.
|
(4)
|
Mr. Collins is also a named executive officer.
|
(5)
|
The reporting person is a managing member of the general partner of the general partner of the partnership that owns the reported securities. The reporting person disclaims beneficial ownership of the reported securities except to the extent of any pecuniary interest he has therein.
|
Name and Address of Beneficial Owner
|
Amount and Nature
of Beneficial
Ownership
|
Percent of
Class
(1)
|
|||||
Brandon Belanger
10003 Woodloch Forest #950
The Woodlands, TX 77380
|
1,979,238
|
(2)
|
7.51 % | ||||
Emily E. Bonner Deville
10003 Woodloch Forest #950
The Woodlands, TX 77380
|
1,979,238
|
(3) |
7.51
%
|
||||
Orbimed Advisors, LLC
601 Lexington Avenue, 54
th
Floor
|
2,135,300
|
(4) | 8.10% |
(1)
|
Based on 26,034,272 shares of our common stock outstanding on March 23, 2012.
|
(2)
|
Based on a Schedule 13D/A filed on July 29, 2011 with the SEC by Mr. Belanger, who has sole voting and investment power over all shares reported. Mr. Belanger is employed as our National Sales Director – Gastroenterology.
|
(3)
|
Based on a Schedule 13D/A filed on July 29, 2011 with the SEC by Ms. Bonner Deville, who has sole voting and investment power over all shares reported. Ms. Bonner Deville is employed as our Vice President of Sales Training and Compliance.
|
(4)
|
Based on a Schedule 13G filed on February 4, 2012 with the SEC by Orbimed Advisors, LLC, who has sole voting and shared dispositive power over 782,800 shares; Orbimed Capital LLC who has shared voting and shared dispositive power over 1,353,000 shares; Samuel D. Isaly who has shared voting and shared dispositive power over the total of 2,135,800 shares.
|
2011
|
2010
|
|||||||
Audit Fees
(1)
|
$
|
228,018 |
$
|
221,907
|
||||
Audit-Related Fees(2)
|
57,827 |
103,674
|
||||||
Tax Fees(3)
|
52,455 |
44,250
|
||||||
All Other Fees
|
—
|
—
|
||||||
Total
|
$
|
338,300 |
$
|
369,831
|
(1)
|
“Audit Fees” represent fees for professional services rendered by Cherry, Bekaert & Holland, L.L.P for fiscal years 2011 and 2010 for the audit of our annual consolidated financial statements included in our Annual Reports on Form 10-K for those respective fiscal years, the review of financial statements included in our Quarterly Reports on Form 10-Q for those respective years and any services normally provided by these firms in connection with statutory and regulatory filings or engagements.
|
(2)
|
“Audit-Related Fees” represent fees for assurance and related services by Cherry, Bekaert & Holland, L.L.P. for fiscal years 2011 and 2010 that are reasonably related to the performance of the audit or review of our consolidated financial statements for those respective fiscal years and are not reported under “Audit Fees.” These fees consisted primarily of accounting consultations relating to the preparation and filing of our definitive proxy statement and the Form 8-K relating to the merger of GTA and Pernix.
|
(3)
|
“Tax Fees” represent fees for professional services rendered by Cherry, Bekaert & Holland, L.L.P. for fiscal years 2011 and 2010 for tax compliance, tax advice and tax planning.
|
(1)
|
Financial Statements.
|
|
For a list of the financial information included herein, see “Index to Consolidated Financial Statements” on page
63
of this annual report on Form 10-K.
|
||
(2)
|
Financial Statement Schedules.
|
|
Not applicable.
|
||
(3)
|
Exhibits
|
|
The exhibits listed in the accompanying Index to Exhibits are filed or incorporated by reference as part of this report.
|
PERNIX THERAPEUTICS HOLDINGS, INC.
|
|||
Date: March 29, 2012
|
By:
|
/s/ Cooper C. Collins
|
|
Cooper C. Collins
|
|||
President & Chief Executive Officer |
Signature
|
Title
|
Date
|
||
/s/ Michael C. Pearce
|
Chairman of the Board and
Director
|
March 29, 2012
|
||
Michael C. Pearce
|
|
|||
/s/ Cooper C. Collins
|
President, Chief Executive Officer
and Director (Principal Executive Officer)
|
March 29, 2012
|
||
Cooper C. Collins
|
||||
/s/ David P. Becker
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
March 29, 2012
|
||
David P. Becker
|
||||
/s/ Anthem H. Blanchard
|
Director
|
March 29, 2012
|
||
Anthem H. Blanchard
|
||||
/s/ Steven A. Elms
|
Director
|
March 29, 2012
|
||
Steven A. Elms
|
||||
/s/ James E. Smith
|
Director
|
March 29, 2012
|
||
James E. Smith, Jr
|
Filed or
Furnished
with this
|
Incorporated by Reference
|
|||||||
No.
|
Description
|
Form 10-K
|
Form
|
Date Filed
|
||||
1.1 |
Underwriting Agreement dated July 21, 2011 between Pernix Therapeutics Holdings, Inc., the selling stockholders named therein and Stifel, Nicolaus & company, Incorporated, as representatives of the several underwriters named in Schedule I thereto
|
8-K |
07/21/2011
|
|||||
2.1 |
Agreement and Plan of Merger By and Among Golf Trust of America, Inc., GTA Acquisition, LLC and Pernix Therapeutics, Inc. dated as of October 6, 2009
|
8-K |
10/07/2009
|
|||||
2.2 |
Asset Purchase Agreement dated January 8, 2010 by and between Sciele Pharma, Inc. and Pernix Therapeutics, Inc. as Buyer
|
8-K |
03/30/2010
|
|||||
2.3 |
Membership Interest Purchase Agreement by and between Pernix Therapeutics, LLC and Michael Venters, John McMahon, Robert Cline, Jr. and Zinterests, L.L.C., dated September 8, 2010
|
8-K |
09/14/2010
|
|||||
3.1 |
Articles of Incorporation of the Company.
|
8-K |
03/15/2010
|
|||||
3.2 |
Bylaws of the Company.
|
8-K |
03/15/2010
|
|||||
4.1 |
Form of certificate representing shares of common stock of the Company.
|
ü
|
||||||
10.1* |
2009 Stock Incentive Plan
|
8-K |
03/15/2010
|
|||||
10.2* |
2010 Employee Stock Purchase Plan
|
S-8 |
08/16/2010
|
|||||
10.3 |
Amended and Restated Pharmaceuticals Agreement dated as of June 22, 2010, by and between Pernix Therapeutics, Inc. and Macoven Pharmaceuticals, L.L.C.
|
8-K |
06/28/2010
|
|||||
10.4* |
Employment and Non-Compete Agreement, dated December 31, 2008, by and between Pernix Therapeutics, Inc. and Michael Venters
|
8-K |
03/15/2010
|
|||||
10.5* |
Employment Non-Compete Agreement, dated June 1, 2008, by and between Pernix Therapeutics, Inc. and Cooper Collins
|
8-K |
03/15/2010
|
|||||
10.6* |
Amended and Restated Employment and Non-Compete Agreement, dated March 14, 2011, by and between Pernix Therapeutics Holdings, Inc. and John McMahon
|
10-K |
03/30/2011
|
|||||
10.7 |
Form of Merger Partner Stockholder Agreement
|
8-K |
10/07/2009
|
|||||
10.8 |
Joint Venture Agreement by and between Gaine, Inc., Pernix Therapeutics, LLC, Biocopea Limited and Kulik Investments (1) IC Limited dated December 17, 2010.
|
8-K |
12/22/2010
|
|||||
10.9* |
Golf Trust of America, Inc., 2007 Stock Option Plan
|
S-8 |
06/04/2010
|
|||||
10.10 |
Loan Agreement, dated September 8, 2010, by and among Pernix Therapeutics Holdings, Inc., Pernix Therapeutics, LLC and Regions Bank
|
8-K |
09/14/2010
|
|||||
10.11 |
Stock Purchase Agreement by and between Pernix Therapeutics Holdings, Inc. and David Waguespack dated September 10, 2010
|
8-K |
09/14/2010
|
|||||
10.12 |
Sales Agreement dated Febuary 10, 2012, between Pernix Therapeutics Holdings, Inc. and Cantor Fitzgerald & Co.
|
8-K | 02/10/2012 | |||||
10.13 |
2007 Stock Option Plan
|
Def14A
|
11/16/2007
|
|||||
10.14 |
1997 Non-Employee Director's Plan
|
S-11/A† |
11/15/1997
|
|||||
10.15 |
Form of Amended and Restated Merger Partner Stockholder Agreement
|
8-K |
05/31/2011
|
10.16 |
Consulting Agreement by and between Pernix Therapeutics Holdings, Inc. and Jan Loeb dated August 29, 2011
|
10-Q |
11/14/2011
|
|||||
10.17* |
Employment Offer Letter, dated December 1, 2011, by and between Pernix Therapeutics Holdings, Inc. and David Becker
|
ü
|
||||||
10.18* |
Employment Offer Letter, dated December 1, 2011, by and between Pernix Therapeutics Holdings, Inc. and Chuck Hrushka
|
ü
|
||||||
10.19
|
Amendment No. 1 to Amended and Restated Employment and Non-Compete Agreement, dated March 23, 2012, by and between Pernix Therapeutics Holdings, Inc. and John McMahon
|
ü
|
||||||
14.1 |
Code of Business Conduct and Ethics
|
8-K |
11/6/2007
|
21.1 |
Subsidiaries of the Company
|
ü
|
||||||
23.1 |
Consent of Cherry, Bekaert & Holland L.L.P
|
ü
|
||||||
31.1 |
Certification by Cooper C. Collins pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
ü
|
||||||
31.2 |
Certification by David P. Becker pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
ü
|
||||||
32.1 |
Certification by Cooper C. Collins and David P. Becker pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
ü
|
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
|
*
|
Indicates a management contract or compensatory plan or arrangement
|
·
|
Base salary will be set at $230,000 per year.
|
·
|
Monthly car allowance of $750 to be reduced or increased from time to time as the CEO deems appropriate.
|
·
|
Annual bonus, if deemed appropriate by Pernix’s compensation committee, will be based on company and individual performance.
|
·
|
Stock option award of 150,000 options awarded on the first day of your employment that vest ratably over three years and expire 10 years from the date of the award.
|
·
|
Reasonable moving expenses based on the lowest of three independent quotes.
|
·
|
Upon termination, without cause (as defined on Exhibit A), you would be eligible for severance equivalent to one year of annual salary at your then current rate and the cash equivalent of one year of your health benefits. This severance would be paid out in equal semi-monthly payments over the term of the severance period (one year).
|
/s/Cooper Collins
|
||
Cooper Collins
|
||
President and CEO
|
/s/David Becker
|
||
David Becker | ||
|
||
12/1/2011 | ||
Date |
·
|
Base salary will be set at $175,000 per year.
|
·
|
Monthly car allowance of $750 to be reduced or increased from time to time as the CEO deems appropriate.
|
·
|
Annual bonus, if deemed appropriate by Pernix’s compensation committee, will be based on company and individual performance.
|
·
|
Reasonable moving expenses based on the lowest of three independent quotes.
|
·
|
Contingent upon the successful acquisition of a certain gastroenterology product, you will receive a stock option award of 50,000 options awarded on the first day following the successful acquisition of this product that vest ratably over three years and expire 10 years from the date of the award.
|
·
|
Contingent upon the successful acquisition of this product, upon termination, without cause (as defined on Exhibit A), you would be eligible for severance equivalent to one year of annual salary at your then current rate and the cash equivalent of one year of your health benefits. This severance would be paid out in equal semi-monthly payments over the term of the severance period (one year).
|
/s/Cooper Collins
|
||
Cooper Collins
|
||
President and CEO
|
/s/Charles Hrushka | ||
Charles Hrushka
|
||
|
||
12/1/11 | ||
Date |
EMPLOYEE : | EMPLOYER : | |||
MACOVEN PHARMACEUTICALS, LLC
By: PERNIX THERAPEUTICS, LLC
|
||||
By: PERNIX THERAPEUTICS HOLDINGS, INC. | ||||
/s/
John McMahon
|
By: |
/s/ Cooper Collins
|
||
John McMahon
|
Name: |
Cooper Collins
|
||
|
Its: |
President and Chief Executive Officer
|
AGREED AND ACKNOWLEDGED: | PARENT : | |||
EMPLOYEE’S SPOUSE : | ||||
PERNIX THERAPEUTICS HOLDINGS, INC. | ||||
/s/ Kimberly McMahon
|
By: |
/s/ Cooper Collins
|
||
Kimberly McMahon
|
Name: |
Cooper Collins
|
||
|
Its: |
President and Chief Executive Officer
|
March 29, 2012
|
|
/s/ Cooper C. Collins | |
Cooper C. Collins | |||
Chief Executive Officer and President |
March 29, 2012
|
|
/s/ David P. Becker | |
David P. Becker | |||
Chief Financial Officer |
Date: March 29, 2012
|
/s/ Cooper C. Collins
|
||
Cooper C. Collins
|
|||
Chief Executive Officer and President
|
|||
Date: March 29, 2012
|
/s/ David P. Becker
|
||
David P. Becker
|
|||
Chief Financial Officer
|