x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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46-4744124
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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201 Santa Monica Blvd., Suite 500,
Santa Monica, CA
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90401
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
¨
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
þ
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Emerging growth company
¨
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Page
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Item 7A.
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Item 9B.
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Item 16.
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Product
Group
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|
Patent No.
|
|
Description
|
|
Patent Expiration
|
|
Publication No.
|
NARCAN® Nasal
|
|
10,085,937
|
|
IN naloxone for treatment of opioid overdose
|
|
March 16, 2035
|
|
US20170071851
|
NARCAN® Nasal
|
|
9,211,253
|
|
IN naloxone for treatment of opioid overdose
|
|
March 16, 2035
|
|
US20150258019
|
NARCAN® Nasal
|
|
9,468,747
|
|
IN naloxone for treatment of opioid overdose
|
|
March 16, 2035
|
|
US20160184294
|
NARCAN® Nasal
|
|
9,480,644
|
|
IN naloxone for treatment of opioid overdose
|
|
March 16, 2035
|
|
US20160166503
|
NARCAN® Nasal
|
|
9,561,177
|
|
IN naloxone for treatment of opioid overdose
|
|
March 16, 2035
|
|
US20160303041
|
NARCAN® Nasal
|
|
9,629,965
|
|
IN naloxone for treatment of opioid overdose
|
|
March 16, 2035
|
|
US20170043107
|
NARCAN® Nasal
|
|
9,707,226
|
|
IN naloxone for treatment of opioid overdose
|
|
March 16, 2035
|
|
US20170151231
|
NARCAN® Nasal
|
|
9,775,838
|
|
IN naloxone for treatment of opioid overdose
|
|
March 16, 2035
|
|
US20170239241
|
NARCAN® Nasal
|
|
2,538,682
|
|
IN naloxone for treatment of opioid overdose
|
|
March 16, 2035
|
|
UK
|
NARCAN® Nasal
|
|
2,942,611
|
|
IN naloxone for treatment of opioid overdose
|
|
March 16, 2035
|
|
Canada
|
•
|
completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices regulations;
|
•
|
submission to the FDA of an Investigational New Drug ("IND"), which must become effective before human clinical studies may begin;
|
•
|
approval by an independent IRB, at each clinical site before each trial may be initiated;
|
•
|
performance of adequate and well-controlled human clinical studies according to Good Clinical Practice
|
•
|
preparation and submission to the FDA of an NDA;
|
•
|
satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practice ("cGMP") to assure that the facilities, methods, and controls are adequate to preserve the drug's identity, strength, quality, and purity; and
|
•
|
FDA review and approval of the NDA.
|
•
|
Phase 1. The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness. In the case of some products for severe or life-threatening diseases, especially when the product is suspected or known to be unavoidably toxic, the initial human testing may be conducted in patients.
|
•
|
Phase 2. Involves clinical studies in a limited patient population 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.
|
•
|
Phase 3. Clinical studies are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical study sites. These clinical studies are intended to establish the overall risk/benefit relationship of the product and provide an adequate basis for product labeling.
|
•
|
restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
|
•
|
warning letters or holds on post-approval clinical trials;
|
•
|
refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals;
|
•
|
product seizure or detention, or refusal to permit the import or export of products; or
|
•
|
injunctions or the imposition of civil or criminal penalties.
|
•
|
having inadequate financial or other resources to complete the development of our product candidates;
|
•
|
the inability to manufacture our products in commercial quantities, at an adequate quality, at an acceptable cost or in collaboration with third parties;
|
•
|
experiencing delays or unplanned expenditures in product development, clinical testing or manufacturing;
|
•
|
the inability to establish adequate sales, marketing and distribution channels;
|
•
|
healthcare professionals and patients may not accept our treatments;
|
•
|
we may not be aware of possible complications from the continued use of our products since we have limited clinical experience with respect to the actual use of our products;
|
•
|
technological breakthroughs in reversing opioid overdoses and treating patients with AUD, OUD and ACO may reduce the demand for our products;
|
•
|
changes in the market for reversing opioid overdoses and treating patients with AUD, OUD and ACO, new alliances between existing market participants and the entrance of new market participants may interfere with our market penetration efforts;
|
•
|
third-party payors may not agree to reimburse patients for any or all of the purchase price of our products, which may adversely affect patients’ willingness to purchase our products;
|
•
|
uncertainty as to market demand may result in inefficient pricing of our products;
|
•
|
we may face third party claims of intellectual property infringement;
|
•
|
we may fail to obtain or maintain regulatory approvals for our products in our markets or may face adverse regulatory or legal actions relating to our products even if regulatory approval is obtained; and
|
•
|
we our dependent upon the results of clinical studies relating to our products and the products of our competitors. If data from a clinical trial is unfavorable, we would be reluctant to advance the specific product for the indication for which it was being developed.
|
•
|
availability, performance, or contamination of raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier;
|
•
|
capacity of our facility and those of contract manufacturer;
|
•
|
the performance of information technology systems;
|
•
|
compliance with regulatory requirements;
|
•
|
inclement weather and natural disasters;
|
•
|
changes in forecasts of future demand for product components;
|
•
|
timing and actual number of production runs for product components;
|
•
|
potential facility contamination by microorganisms or viruses;
|
•
|
updating of manufacturing specifications; and
|
•
|
product quality success rates and yields.
|
•
|
others may be able to make formulations that are similar to our NARCAN® or other formulations but that are not covered by the claims of our patent rights;
|
•
|
the patents of third parties may have an adverse effect on our business;
|
•
|
we or our licensors or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed;
|
•
|
we or our licensors or any future strategic partners might not have been the first to file patent applications covering certain of our inventions;
|
•
|
others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;
|
•
|
it is possible that our pending patent applications will not lead to issued patents;
|
•
|
issued patents that we may own or that we exclusively license in the future may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors;
|
•
|
our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;
|
•
|
third parties performing manufacturing or testing for us using our product candidates or technologies could use the intellectual property of others without obtaining a proper license;
|
•
|
we may not develop additional proprietary technologies that are patentable; and
|
•
|
the patents of others may have an adverse effect on our business.
|
•
|
regulatory authorities may withdraw their approval of the products, which would force us to remove its products from the market;
|
•
|
regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication, or field alerts to physicians, pharmacies and others;
|
•
|
we may be required to change instructions regarding the way the products are administered, conduct additional clinical trials or change the labeling of the products;
|
•
|
we may be subject to limitations on how it may promote the products;
|
•
|
sales of the products may decrease significantly;
|
•
|
we may be subject to litigation or product liability claims; and
|
•
|
our reputation may suffer.
|
•
|
we may not have day-to-day control over the activities of our contractors or collaborators;
|
•
|
our collaborators may fail to defend or enforce patents they own on compounds or technologies that are incorporated into the products we develop with them;
|
•
|
third parties may not fulfill their regulatory or other obligations; and
|
•
|
we may not realize the contemplated or expected benefits from collaborative or other arrangements; and disagreements may arise regarding a breach of the arrangement, the interpretation of the agreement, ownership of proprietary rights, clinical results or regulatory approvals.
|
•
|
clinical development is a long, expensive and uncertain process; delay and failure can occur at any stage of our clinical trials;
|
•
|
our clinical trials are dependent on patient enrollment and regulatory approvals; we do not know whether our planned trials will begin on time, or at all, or will be completed on schedule, or at all;
|
•
|
the FDA or other regulatory authorities may not approve a clinical trial protocol or may place a clinical trial on hold;
|
•
|
we rely on third parties, such as consultants, contract research organizations, medical institutions and clinical investigators, to conduct clinical trials for our drug candidates and if we or any of our third-party contractors fail to comply with applicable regulatory requirements, such as cGMP requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, the European Medicines Agency or comparable foreign regulatory authorities may require us to perform additional clinical trials;
|
•
|
if the clinical development process is completed successfully, our ability to derive revenues from the sale of our product candidates will depend on us first obtaining FDA or other comparable foreign regulatory approvals, each of which are subject to unique risks and uncertainties;
|
•
|
there is no assurance that we will receive FDA or corollary foreign approval for any of our product candidates for any indication; we are subject to government regulation for the commercialization of our product candidates
|
•
|
we have not received regulatory approval in the United States for the commercial sale of any of our product candidates;
|
•
|
even if one or more of our product candidates does obtain approval, regulatory authorities may approve such product candidate for fewer or more limited indications than our requests, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials or may approve with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate;
|
•
|
undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities;
|
•
|
later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with the regulatory requirements of FDA and other applicable United Statesc and foreign regulatory authorities could subject us to administrative or judicially imposed sanctions;
|
•
|
the FDA's policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our drug candidates, and if we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained; and
|
•
|
we may be liable for contamination or other harm caused by hazardous materials used in the operations of our business.
|
•
|
The federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or providing remuneration to induce the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare or Medicaid programs. This statute has been applied to pharmaceutical manufacturer marketing practices, educational programs, pricing policies and relationships with healthcare providers. A person or entity does not need to have actual knowledge of this statute or specific intent to violate it to have committed a violation;
|
•
|
Federal civil and criminal false claims laws and civil monetary penalty laws, including civil whistleblower or qui tam actions that prohibit, among other things, knowingly presenting, or causing to be present, claims for payment or approval to the federal government that are false or fraudulent, knowingly making a false statement material to an obligation to pay or transmit money or property to the federal government or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the federal government. The government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the false claims statutes;
|
•
|
The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and its implementing regulations, which created federal criminal laws that prohibit, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
|
•
|
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, also imposes certain regulatory and contractual requirements regarding the privacy, security and transmission of individually identifiable health information;
|
•
|
Federal “sunshine” requirements imposed by the PPACA on drug manufacturers regarding any “transfer of value” made or distributed to physicians and teaching hospitals, and any ownership and investment interests held by such
|
•
|
State and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require drug manufacturers to comply with the industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state laws governing the privacy and security of certain health information, many of which differ from each other in significant ways and often are not preempted by HIPAA.
|
•
|
fluctuations in our operating results;
|
•
|
announcements of product releases by us or our competitors;
|
•
|
announcements of acquisitions and/or partnerships by us or our competitors; and
|
•
|
general market conditions.
|
•
|
prohibit stockholder action by written consent;
|
•
|
establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings;
|
•
|
establish a staggered board of directors such that all members of the Board are not elected at one time;
|
•
|
allow only the Board to fill any vacancy in the Board by reason of death, resignation or otherwise, or if the number of directors shall be increased; and
|
•
|
require a vote of a majority of the shares of our outstanding stock entitled to vote at an election of directors to remove a director.
|
|
|
High
|
|
Low
|
||||
Fiscal Year 2017
|
|
|
|
|
|
|
||
First quarter ended October 31, 2016
|
|
$
|
8.89
|
|
|
$
|
7.01
|
|
Second quarter ended January 31, 2017
|
|
$
|
8.40
|
|
|
$
|
5.01
|
|
Third quarter ended April 30, 2017
|
|
$
|
9.06
|
|
|
$
|
6.32
|
|
Fourth quarter ended July 31, 2017
|
|
$
|
15.29
|
|
|
$
|
5.00
|
|
|
|
|
|
|
||||
Transition Period
|
|
|
|
|
||||
August 1, 2017 - December 31, 2017
|
|
$
|
51.90
|
|
|
$
|
11.51
|
|
|
|
|
|
|
||||
Year Ended 2018
|
|
|
|
|
||||
First quarter ended March 31, 2018
|
|
$
|
32.28
|
|
|
$
|
18.37
|
|
Second quarter ended June 30, 2018
|
|
$
|
21.10
|
|
|
$
|
13.28
|
|
Third quarter ended September 30, 2018
|
|
$
|
29.55
|
|
|
$
|
12.75
|
|
Fourth quarter ended December 31, 2018
|
|
$
|
20.00
|
|
|
$
|
12.02
|
|
|
|
|
|
|
Plan Category
|
|
Number of securities to be issued upon exercise of outstanding options
|
|
Weighted-average
exercise price of outstanding options |
|
Number of securities
remaining available for future issuance under equity compensation plans |
|||
|
|
|
|
|
|
||||
Equity compensation plans approved by security holders
|
|
343,550
|
|
|
$
|
28.97
|
|
157,881
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans not approved by security holders
|
|
2,885,500
|
|
|
$
|
7.30
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
3,229,050
|
|
|
|
|
|
157,881
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended
|
|
Increase (Decrease)
|
||||||
(in thousands)
|
December 31, 2018
|
December 31, 2017
|
|
Amount
|
|||||
|
|
|
|
(unaudited)
|
|
|
|||
Revenue:
|
|
|
|
|
|
|
|||
Royalty and licensing revenue
|
$
|
13,262
|
|
$
|
15,447
|
|
$
|
(2,185
|
)
|
Treatment investment revenue
|
|
251
|
|
|
105
|
|
|
146
|
|
Grant and contract revenue
|
|
469
|
|
|
—
|
|
|
469
|
|
Total revenue
|
|
13,982
|
|
|
15,552
|
|
|
(1,570
|
)
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
11,264
|
|
|
10,313
|
|
|
951
|
|
Research and development
|
|
8,479
|
|
|
4,857
|
|
|
3,622
|
|
Royalty expense
|
|
1,491
|
|
|
1,408
|
|
|
83
|
|
License fees
|
|
13,725
|
|
|
—
|
|
|
13,725
|
|
Selling expense
|
|
214
|
|
|
851
|
|
|
(637
|
)
|
Total operating expenses
|
|
35,173
|
|
|
17,429
|
|
|
17,744
|
|
Loss from operations
|
|
(21,191
|
)
|
|
(1,877
|
)
|
|
(19,314
|
)
|
Other income (expense), net
|
|
46
|
|
|
68
|
|
|
(22
|
)
|
Loss before provision of income taxes
|
|
(21,145
|
)
|
|
(1,809
|
)
|
|
(19,336
|
)
|
Provision for income taxes
|
|
51
|
|
|
797
|
|
|
746
|
|
Net loss
|
$
|
(21,196
|
)
|
$
|
(2,606
|
)
|
$
|
(18,590
|
)
|
|
|
For the Year Ended
|
|
|
||||||||
(in thousands)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
Variance
|
||||||
|
|
|
|
(unaudited)
|
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
||||||
Interest income, net
|
|
$
|
145
|
|
|
$
|
34
|
|
|
$
|
111
|
|
Gain (loss) on foreign exchange
|
|
(48
|
)
|
|
48
|
|
|
(96
|
)
|
|||
Loss on settlement of liability
|
|
(50
|
)
|
|
(14
|
)
|
|
(36
|
)
|
|||
Total other income
|
|
$
|
47
|
|
|
$
|
68
|
|
|
$
|
(21
|
)
|
|
|
|
|
|
|
|
|
For the Five Month Period Ended
|
|
Increase (Decrease)
|
|||||||||
(in thousands)
|
December 31, 2017
|
December 31, 2016
|
|
Amount
|
|
Percentage
|
||||||
|
|
|
|
(unaudited)
|
|
|
|
|
||||
Revenue:
|
|
|
|
|
|
|
|
|
||||
Royalty and licensing revenue
|
$
|
11,697
|
|
$
|
14,831
|
|
$
|
(3,134
|
)
|
|
(21.1
|
)%
|
Treatment investment revenue
|
|
65
|
|
|
—
|
|
|
65
|
|
|
—
|
%
|
Total revenue
|
|
11,762
|
|
|
14,831
|
|
|
(3,069
|
)
|
|
(20.7
|
)%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
5,887
|
|
|
1,854
|
|
|
4,033
|
|
|
217.5
|
%
|
Research and development
|
|
2,486
|
|
|
709
|
|
|
1,777
|
|
|
250.6
|
%
|
Selling expenses
|
|
439
|
|
|
730
|
|
|
(291
|
)
|
|
(39.9
|
)%
|
Royalty expenses
|
|
1,408
|
|
|
—
|
|
|
1,408
|
|
|
—
|
%
|
Total operating expenses
|
|
10,220
|
|
|
3,293
|
|
|
6,927
|
|
|
210.4
|
%
|
Income from operations
|
|
1,542
|
|
|
11,538
|
|
|
(9,996
|
)
|
|
(86.6
|
)%
|
Other income (expense), net
|
|
7
|
|
|
(23
|
)
|
|
30
|
|
|
130.4
|
%
|
Income before provision of income taxes
|
|
1,549
|
|
|
11,515
|
|
|
(9,966
|
)
|
|
(86.5
|
)%
|
Provision for income taxes
|
|
169
|
|
|
—
|
|
|
169
|
|
|
—
|
%
|
Net income
|
$
|
1,380
|
|
$
|
11,515
|
|
$
|
(10,135
|
)
|
|
(88.0
|
)%
|
|
|
For the Five Month Period Ended
|
|
|
|
|
||||||
(in thousands)
|
|
December 31, 2017
|
|
December 31, 2016
|
|
Variance
|
||||||
|
|
|
|
|
(unaudited)
|
|
|
|
|
|||
Royalties related to SWK Purchase Agreement
|
$
|
—
|
|
|
$
|
13,710
|
|
|
$
|
(13,710
|
)
|
|
Royalties and milestones related to Adapt Agreement
|
|
11,697
|
|
|
|
1,121
|
|
|
|
10,576
|
|
|
|
$
|
11,697
|
|
|
$
|
14,831
|
|
|
$
|
(3,134
|
)
|
|
|
|
For the Five Month Period Ended
|
|
|
||||||||
(in thousands)
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
Variance
|
|
|||
|
|
|
|
|
(unaudited)
|
|
|
|
|
|||
Interest income
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
Interest expense
|
|
—
|
|
|
|
(4
|
)
|
|
|
4
|
|
|
Gain (loss) on foreign exchange rates
|
|
10
|
|
|
|
(19
|
)
|
|
|
29
|
|
|
Loss on settlement of liability
|
|
(13
|
)
|
|
|
—
|
|
|
|
(13
|
)
|
|
Net interest income (expense)
|
$
|
7
|
|
|
$
|
(23
|
)
|
|
$
|
30
|
|
|
|
Fiscal Year Ended
|
|
Increase (Decrease)
|
|||||||||
(in thousands)
|
July 31, 2017
|
July 31, 2016
|
|
Amount
|
|
Percentage
|
||||||
|
|
|
|
|
|
|
|
|
||||
Revenue:
|
|
|
|
|
|
|
|
|
||||
Royalty and licensing revenue
|
$
|
18,406
|
|
|
5,098
|
|
$
|
13,308
|
|
|
261.0
|
%
|
Treatment investment revenue
|
|
40
|
|
|
4,800
|
|
|
(4,760
|
)
|
|
(99.2
|
)%
|
Total revenue
|
|
18,446
|
|
|
9,898
|
|
|
8,548
|
|
|
86.4
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
6,530
|
|
|
14,509
|
|
|
(7,979
|
)
|
|
(55.0
|
)%
|
Research and development
|
|
3,172
|
|
|
2,809
|
|
|
363
|
|
|
12.9
|
%
|
Selling expenses
|
|
1,651
|
|
|
318
|
|
|
1,333
|
|
|
419.2
|
%
|
Total operating expenses
|
|
11,353
|
|
|
17,636
|
|
|
(6,283
|
)
|
|
(35.6
|
)%
|
Income from operations
|
|
7,093
|
|
|
(7,738
|
)
|
|
14,831
|
|
|
(191.7
|
)%
|
Other income (expense), net
|
|
38
|
|
|
(76
|
)
|
|
114
|
|
|
(150.0
|
)%
|
Income before provision of income taxes
|
|
7,131
|
|
|
(7,814
|
)
|
|
14,945
|
|
|
(191.3
|
)%
|
Provision for income taxes
|
|
550
|
|
|
—
|
|
|
550
|
|
|
—
|
%
|
Net income
|
$
|
6,581
|
|
$
|
(7,814
|
)
|
$
|
14,395
|
|
|
(184.2
|
)%
|
|
|
Fiscal Year Ended
|
|
|
|
|
||||||
(in thousands)
|
|
July 31, 2017
|
|
July 31, 2016
|
|
Variance
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
Royalties related to SWK Purchase Agreement
|
$
|
17,460
|
|
|
$
|
—
|
|
|
$
|
17,460
|
|
|
Royalties related to Adapt Agreement
|
|
946
|
|
|
|
5,098
|
|
|
|
(4,152
|
)
|
|
|
$
|
18,406
|
|
|
$
|
5,098
|
|
|
$
|
13,308
|
|
|
|
|
Fiscal Year Ended
|
|
|
||||||||
(in thousands)
|
|
July 31, 2017
|
|
|
July 31, 2016
|
|
|
Variance
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Interest income
|
$
|
24
|
|
|
$
|
1
|
|
|
$
|
23
|
|
|
Interest expense
|
|
(4
|
)
|
|
|
(12
|
)
|
|
|
8
|
|
|
Gain (loss) on foreign exchange rates
|
|
18
|
|
|
|
(65
|
)
|
|
|
83
|
|
|
Net interest income (expense)
|
$
|
38
|
|
|
$
|
(76
|
)
|
|
$
|
114
|
|
|
|
|
Year ended
|
|
Five months ended
|
|
Year ended
|
|||
(in thousands)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
July 31, 2017
|
|||
Net cash provided by (used in)
|
|
|
|
|
|
|
|
|
|
Operating activities
|
$
|
(523
|
)
|
$
|
(3,840
|
)
|
$
|
5,556
|
|
Financing activities
|
|
17,021
|
|
|
5,083
|
|
|
(165
|
)
|
Net increase in cash and cash equivalents
|
$
|
16,498
|
|
$
|
1,243
|
|
$
|
5,391
|
|
(in thousands)
|
|
Net Profit %
|
|
December 31, 2018
|
|
|
|
|
|
Potomac
|
|
10.2%
|
$
|
422
|
LYL
|
|
5.0%
|
|
206
|
Welmers
|
|
1.5%
|
|
62
|
Foundation
|
|
6.0%
|
|
248
|
Pendergast
|
|
1.0%
|
|
60
|
Royalty payable
|
|
23.7%
|
$
|
998
|
|
Page
Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
MaloneBailey, LLP
|
www.malonebailey.com
|
We have served as the Company’s auditor since 2013.
|
Houston, Texas
|
March 21, 2019
|
|
December 31, 2018
|
|
December 31, 2017
|
|
July 31,
2017 |
|
||||||
Assets
|
|
|
|
|
|
|
|
|
||||
Current assets
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
24,613,638
|
|
|
$
|
8,115,903
|
|
|
$
|
6,872,555
|
|
|
Accounts receivable
|
4,489,317
|
|
|
11,696,676
|
|
|
3,750,000
|
|
|
|||
Prepaid expenses and other current assets
|
267,623
|
|
|
733,328
|
|
|
164,887
|
|
|
|||
Deferred financing costs
|
—
|
|
|
209,042
|
|
|
—
|
|
|
|||
Total current assets
|
29,370,578
|
|
|
20,754,949
|
|
|
10,787,442
|
|
|
|||
|
|
|
|
|
|
|
||||||
Other assets
|
|
|
|
|
|
|
|
|
||||
Computer equipment, net
|
—
|
|
|
1,183
|
|
|
2,753
|
|
|
|||
Patents and patent applications, net
|
15,746
|
|
|
17,118
|
|
|
17,690
|
|
|
|||
Total assets
|
$
|
29,386,324
|
|
|
$
|
20,773,250
|
|
|
$
|
10,807,885
|
|
|
|
|
|
|
|
|
|
||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
|
|
|
|
||||
Accounts payable and accrued liabilities
|
1,132,960
|
|
|
3,156,992
|
|
|
2,211,971
|
|
|
|||
License fees payable
|
5,400,000
|
|
|
—
|
|
|
—
|
|
|
|||
Accrued salaries and wages
|
1,083,644
|
|
|
713,489
|
|
|
1,701,359
|
|
|
|||
Royalty payable
|
998,305
|
|
|
1,408,012
|
|
|
—
|
|
|
|||
Deferred revenue
|
1,212,149
|
|
|
378,700
|
|
|
253,619
|
|
|
|||
Total current liabilities
|
9,827,058
|
|
|
5,657,193
|
|
|
4,166,949
|
|
|
|||
|
|
|
|
|
|
|
||||||
Long-term liabilities
|
|
|
|
|
|
|
||||||
Deferred revenue
|
—
|
|
|
2,115,805
|
|
|
2,306,527
|
|
|
|||
License fees payable, net of current portion
|
2,700,000
|
|
|
—
|
|
|
—
|
|
|
|||
Total liabilities
|
12,527,058
|
|
|
7,772,998
|
|
|
6,473,476
|
|
|
|||
|
|
|
|
|
|
|
||||||
Stockholders' equity
|
|
|
|
|
|
|
|
|
||||
Common stock; par value $0.001; 200,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
||||
3,845,361, 2,535,766 and 2,026,608 shares issued and outstanding at December 31, 2018, 2017, and July 31, 2017, respectively.
|
3,846
|
|
|
2,536
|
|
|
2,026
|
|
|
|||
Additional paid-in capital
|
91,276,086
|
|
|
66,223,066
|
|
|
58,937,112
|
|
|
|||
Accumulated deficit
|
(74,420,666
|
)
|
|
(53,225,350
|
)
|
|
(54,604,729
|
)
|
|
|||
Total stockholders' equity
|
16,859,266
|
|
|
13,000,252
|
|
|
4,334,409
|
|
|
|||
Total liabilities and stockholders' equity
|
$
|
29,386,324
|
|
|
$
|
20,773,250
|
|
|
$
|
10,807,885
|
|
|
|
|
For the
Year Ended December 31, |
|
For the
Five Months Ended December 31, |
|
For the
Year Ended July 31, |
|
|||
|
|
2018
|
|
2017
|
|
2017
|
|
|||
Revenues
|
|
|
|
|
|
|
|
|
|
|
Royalty and licensing revenue
|
$
|
13,262,321
|
|
$
|
11,696,676
|
|
$
|
18,406,142
|
|
|
Treatment investment revenue
|
|
250,549
|
|
|
65,641
|
|
|
39,854
|
|
|
Grant and contract revenue
|
|
469,307
|
|
|
—
|
|
|
—
|
|
|
Total Revenue
|
|
13,982,177
|
|
|
11,762,317
|
|
|
18,445,996
|
|
|
|
|
|
|
|
|
|
|
|||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
11,263,804
|
|
|
5,887,135
|
|
|
6,530,533
|
|
|
Research and development
|
|
8,478,817
|
|
|
2,486,514
|
|
|
3,171,599
|
|
|
Royalty expenses
|
|
1,491,099
|
|
|
1,408,012
|
|
|
—
|
|
|
License fees
|
|
13,725,000
|
|
|
—
|
|
|
—
|
|
|
Selling expenses
|
|
213,897
|
|
|
438,625
|
|
|
1,651,099
|
|
|
Total operating expenses
|
|
35,172,617
|
|
|
10,220,286
|
|
|
11,353,231
|
|
|
|
|
|
|
|
|
|
|
|||
Income (loss) from operations
|
|
(21,190,440
|
)
|
|
1,542,031
|
|
|
7,092,765
|
|
|
|
|
|
|
|
|
|
|
|||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
144,696
|
|
|
10,401
|
|
|
19,966
|
|
|
Gain (loss) on foreign exchange
|
|
(48,306
|
)
|
|
10,027
|
|
|
18,356
|
|
|
Loss on settlement of liability
|
|
(49,983
|
)
|
|
(13,917
|
)
|
|
—
|
|
|
Total other income
|
|
46,407
|
|
|
6,511
|
|
|
38,322
|
|
|
|
|
|
|
|
|
|
|
|||
Income (loss) before provision for income taxes
|
|
(21,144,033
|
)
|
|
1,548,542
|
|
|
7,131,087
|
|
|
|
|
|
|
|
|
|
|
|||
Provision for income taxes
|
|
51,283
|
|
|
169,163
|
|
|
550,474
|
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
$
|
(21,195,316
|
)
|
$
|
1,379,379
|
|
$
|
6,580,613
|
|
|
|
|
|
|
|
|
|
|
|||
Income (loss) per share of common stock:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(7.10
|
)
|
$
|
0.66
|
|
$
|
3.27
|
|
|
Diluted
|
$
|
(7.10
|
)
|
$
|
0.31
|
|
$
|
2.94
|
|
|
Weighted average common stock outstanding
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
2,985,335
|
|
|
2,077,663
|
|
|
2,014,540
|
|
|
Diluted
|
|
2,985,335
|
|
|
4,393,138
|
|
|
2,235,851
|
|
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Deficit |
|
Total
|
|||||||||||
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
Balance at July 31, 2016
|
1,992,433
|
|
|
$
|
1,992
|
|
|
$
|
56,478,394
|
|
|
$
|
(61,185,342
|
)
|
|
$
|
(4,704,956
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Reconciling adjustment to record shares issued in prior year for the conversion of debt into common stock in relation to 1:100 reverse stock split
|
6,228
|
|
|
6
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock issued for services
|
27,947
|
|
|
28
|
|
|
190,399
|
|
|
—
|
|
|
190,427
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock based compensation from issuance of options
|
—
|
|
|
—
|
|
|
1,277,139
|
|
|
—
|
|
|
1,277,139
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock based compensation from issuance of warrants
|
—
|
|
|
—
|
|
|
229,360
|
|
|
—
|
|
|
229,360
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Forgiveness of related party debt
|
—
|
|
|
—
|
|
|
761,826
|
|
|
—
|
|
|
761,826
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
6,580,613
|
|
|
6,580,613
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at July 31, 2017
|
2,026,608
|
|
|
$
|
2,026
|
|
|
$
|
58,937,112
|
|
|
$
|
(54,604,729
|
)
|
|
$
|
4,334,409
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cashless exercise of options
|
145,630
|
|
|
146
|
|
|
(146
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Exercise of warrants
|
356,790
|
|
|
357
|
|
|
5,292,519
|
|
|
—
|
|
|
5,292,876
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock issued as settlement of liability
|
6,738
|
|
|
7
|
|
|
213,910
|
|
|
—
|
|
|
213,917
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock based compensation from issuance of options
|
—
|
|
|
—
|
|
|
1,779,671
|
|
|
—
|
|
|
1,779,671
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,379,379
|
|
|
1,379,379
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2017
|
2,535,766
|
|
|
$
|
2,536
|
|
|
$
|
66,223,066
|
|
|
$
|
(53,225,350
|
)
|
|
$
|
13,000,252
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Exercise of stock options
|
50,497
|
|
|
50
|
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Exercise of warrants
|
3,400
|
|
|
3
|
|
|
33,997
|
|
|
—
|
|
|
34,000
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock issued for services
|
44,664
|
|
|
45
|
|
|
882,187
|
|
|
—
|
|
|
882,232
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock issued to net profit partner
|
160,000
|
|
|
160
|
|
|
1,599,840
|
|
|
—
|
|
|
1,600,000
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock based compensation
|
—
|
|
|
—
|
|
|
5,760,432
|
|
|
—
|
|
|
5,760,432
|
|
||||
|
|
|
|
|
|
|
|
|
|
Cashless exercise of options
|
$
|
50
|
|
|
$
|
146
|
|
|
$
|
—
|
|
Issuance of common stock to net profit partner
|
$
|
1,600,000
|
|
|
$
|
—
|
|
|
—
|
|
|
Issuance of common stock as settlement of liability
|
$
|
100,000
|
|
|
$
|
200,000
|
|
|
$
|
—
|
|
Forgiveness of related party of debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
761,826
|
|
Reconciling adjustment to record shares issued in prior year for the conversion of debt into common stock and rounding in relation to 1-for-100 reverse stock split
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
Offset of deferred financing costs against APIC
|
$
|
209,042
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended
|
Five Months ended
|
Year Ended
|
||||||
Numerator:
|
December 31, 2018
|
December 31, 2017
|
July 31, 2017
|
||||||
Net Income (loss)
|
$
|
(21,195,316
|
)
|
$
|
1,379,379
|
|
$
|
6,580,613
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
||||||
Denominator for basic income (loss) per share - weighted average shares
|
2,985,335
|
|
2,077,663
|
|
2,014,540
|
|
|||
Effect of dilutive securities:
|
|
|
|
||||||
Equity incentive plans
|
—
|
|
2,315,475
|
|
221,311
|
|
|||
Denominator for diluted income (loss) per share
|
2,985,335
|
|
4,393,138
|
|
2,235,851
|
|
|||
|
|
|
|
||||||
Income (loss) per share - Basic
|
$
|
(7.10
|
)
|
$
|
0.66
|
|
$
|
3.27
|
|
Income (loss) per share - Diluted
|
$
|
(7.10
|
)
|
$
|
0.31
|
|
$
|
2.94
|
|
|
|
|
|
(in thousands)
|
NIH Grant
|
|
BED
|
|
Other
Opioid Treatments |
|
Total
|
|||||||||
Balance as of July 31, 2016
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
$
|
1,600
|
|
|
$
|
2,600
|
|
Recognized as revenue
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
(39
|
)
|
||||
Balance as of July 31, 2017
|
|
—
|
|
|
961
|
|
|
1,600
|
|
|
2,561
|
|
||||
Recognized as revenue
|
|
—
|
|
|
(66
|
)
|
|
—
|
|
|
(66
|
)
|
||||
Balance as of December 31, 2017
|
|
—
|
|
|
895
|
|
|
1,600
|
|
|
2,495
|
|
||||
Cash Received NIH
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
||||
Converted to Equity
|
|
—
|
|
|
—
|
|
|
(1,600
|
)
|
|
(1,600
|
)
|
||||
Recognized as revenue
|
|
(432
|
)
|
|
(251
|
)
|
|
—
|
|
|
(683
|
)
|
||||
Balance as of December 31, 2018
|
|
$
|
568
|
|
|
$
|
644
|
|
|
$
|
—
|
|
|
$
|
1,212
|
|
Deferred Revenue (in thousands)
|
NIH Grant
|
|
BED
|
|
Other
Opioid Treatments |
|
Total
|
|||||||||
Current portion
|
|
$
|
568
|
|
|
$
|
644
|
|
|
$
|
—
|
|
|
$
|
1,212
|
|
Long-term portion
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
568
|
|
|
$
|
644
|
|
|
$
|
—
|
|
|
$
|
1,212
|
|
a.
|
On December 18, 2014, the Company entered into a consulting agreement (the "2014 Agreement") with Torreya Partners LLP ("Torreya"), a financial advisory firm, under which Torreya agreed to provide financial advisory services with regard to a licensing agreement. The Company is also required to pay an additional fee equivalent to
3.75%
of all amounts received by the Company in excess of
$3.0 million
, in perpetuity. Total fees incurred by the Company to this consultant pursuant to this agreement during the fiscal year ended July 31, 2017 amounted to approximately
$963.6 thousand
.
|
b.
|
On November 19, 2015, the Company issued
14,327
shares of unregistered Common Stock upon the execution of a binding letter of intent to agree to negotiate and enter into an exclusive license agreement and collaboration agreement (“LOI”) with a pharmaceutical company with certain desirable proprietary information. The shares issued in this transaction were valued using the stock price at issuance date and amounted to approximately
$120.3 thousand
. Pursuant to the LOI, the Company is obligated to issue up to an additional
92,634
shares of unregistered Common Stock upon the occurrence of various milestones. A total of
3,582
shares had been issued as of July 31, 2016 due to achievement of certain milestones. On November 10, 2016, the Company issued an additional
14,327
shares of the unregistered Common Stock pursuant to the LOI. The shares issued in this transaction were valued using the stock price at issuance date and amounted to approximately
$85.1 thousand
. On March 16, 2017, the Company issued an additional
10,745
shares of unregistered Common Stock pursuant to the LOI. The Company was obligated to issue these shares upon the
one year
anniversary of receipt by the Company of a milestone payment from Adapt for the first commercial sale of the Company’s product, NARCAN®, in the U.S. The shares issued on March 16, 2017 were valued on the date of issuance using the March 16, 2017 closing price of the Company’s Common Stock of
$7.75
per share, which resulted in an aggregate value of approximately
$83.3 thousand
. The Company expensed the entire
$83.3 thousand
as non-cash expense during the fiscal year ended July 31, 2017. There were
no
share issuances,
no
r any expenses incurred, by the Company in relation to this LOI during the five months ended December 31, 2017.
|
c.
|
In October 2016, the Company in-licensed a heroin vaccine from Walter Reed Army Institute of Research ("WRAIR"). In consideration for the license the Company agreed to pay a royalty of
3%
of net sales if the Company commercializes the vaccine, or
4%
if the vaccine is sublicensed. In addition, the Company agreed to pay a minimum annual royalty of
$10 thousand
, as well as fixed payments of up to approximately
$715.7 thousand
if all of the specified milestones are met. During the five months ended December 31, 2017, the Company paid
$60 thousand
in cash to WRAIR, of which
$50 thousand
was a non-recurring "execution" fee and the remaining
$10 thousand
was the minimum annual royalty for the period of September 2017 through August 2018. The
$10 thousand
minimum annual royalty was recorded as a prepaid expense and is being expensed at the rate of
$833
per month, beginning in September 2017 and ending in August 2018.
|
d.
|
The Company has a Sublease with Standish Management, LLC to sublease office space on a month-to-month basis, located at 201 Santa Monica Boulevard, Suite 500, Santa Monica, CA 90401, which is the Company's headquarters. The Company also has an Office Service Agreement to lease office space at 83 Baker Street, London, England, W1U 6AG. Effective May 31, 2018 either party is able to terminate the Office Service Agreement by providing three months advance written notice of termination. During the year ended December 31, 2018, the five months ended December 31, 2017, and the year ended July 31, 2017 the Company incurred approximately
$321 thousand
,
$150 thousand
, and
$123 thousand
, respectively of rent expense.
|
e.
|
On June 1, 2017 (the “LYL Effective Date”), the Company entered into an amendment with LYL (the “LYL Amendment”) to the Amended and Restated Consulting Agreement, dated October 25, 2016 and effective as of July 17, 2013 (the “LYL Agreement”). Pursuant to the LYL Amendment, LYL granted the Company certain buyback provisions that have expired as of December 31, 2018. In consideration for LYL entering into the LYL Amendment, upon the Company's receipt after the LYL Effective Date of at least
$3 million
from (i) SWK under the SWK Purchase Agreement and/or (ii) Adapt under the Adapt Agreement, fifty percent of all actual amounts received by the Company from SWK will be used in determining the Net Profit (as defined in the LYL Agreement).
|
f.
|
On June 22, 2017, the Company entered into a license agreement (the "License Agreement") and a related supply agreement (the “Supply Agreement”) with Aegis Therapeutics LLC ("Aegis") pursuant to which the Company was granted an exclusive license (the “License”) to Aegis’ proprietary chemically synthesizable delivery enhancement and stabilization agents, including, but not limited to, Aegis’ Intravail® absorption enhancement agents, ProTek® and HydroGel® (collectively, the “Technology”) to exploit (a) the Compounds (as such are defined in the License Agreement) and (b) a product containing a Compound and formulated using the Technology (“Aegis Product”), in each case of (a) and (b) for any and all purposes. The License Agreement restricts the Company's ability to manufacture any Aegis excipients included in the Technology (“Excipients”), except for certain instances of supply failure, supply shortage or termination of the Supply Agreement, and the Company shall obtain all supply of such Excipients from Aegis under the Supply Agreement. The License Agreement also restricts Aegis’s ability to compete with the Company worldwide with respect to the Exploitation (as defined in the License Agreement) of any therapeutic containing a Compound or derivative or active metabolite of a Compound without the Company's prior written consent. The effective date of the License Agreement and the Supply Agreement is January 1, 2017.
|
g.
|
On July 14, 2017, Renaissance Lakewood, LLC (“Renaissance”) and the Company entered into a Research and Development Agreement (the “Renaissance Agreement”). Under the Renaissance Agreement, Renaissance will perform product development work on a naltrexone multi-dose nasal product for the treatment of alcohol use disorder pursuant to the terms set forth in a proposal agreed upon by the parties. The Company will bear the costs of all development services, including all raw materials and packaging components, in connection with the performance of the development work under the Renaissance Agreement and in accordance with financials agreed upon through the proposal. Renaissance will conduct quality control and testing, including non-stability, stability, in-use, raw material, and packaging component testing as part of the services provided to the Company under the Renaissance Agreement. The Company will own all formulations provided to Renaissance and any formulations developed in connection with the Renaissance Agreement. Renaissance will own all know-how developed in connection with the performance of the services that is not solely related to a product. The Company has the right to seek patent protection on any invention or know-how that relates solely to a product developed under the Renaissance Agreement or any our formulation, excluding general manufacturing or product development know-how of Renaissance. The Renaissance Agreement is effective until terminated by either party in accordance with its terms. The Company or Renaissance may terminate the project under a proposal to the Renaissance Agreement due to unforeseen circumstances in the development. The Renaissance Agreement may be terminated by the Company, with or without cause, upon
45 days
written notice. There are also mutual customary termination provisions relating to uncured breaches of material provisions. See Note 6 - Prepaid Expenses and Other Current Assets.
|
h.
|
On September 5, 2017, the Company accepted, effective September 11, 2017 (the “Separation Date”), the resignation of Kevin Pollack as (i) the Company’s Chief Financial Officer, Treasurer and Secretary, and (ii) a director of Opiant Pharmaceuticals UK Limited, a wholly owned subsidiary of the Company. On September 5, 2017, the Company and Mr. Pollack entered into a Separation Agreement and General Release (the “Separation Agreement”), with such agreement becoming effective on September 12, 2017 (the "Separation Agreement Effective Date"), which represented the date on which Mr. Pollack's
seven
-day revocation period expired.
|
i.
|
On September 7, 2018, the Company entered into a Development Agreement ("Development Agreement") and an Agreement for Reimbursement of Capital Expenditure and Service Fees ("Reimbursement Agreement") with Aesica Queenborough Limited ("Aesica"), a wholly owned subsidiary of Consort Medical plc, related to the Company’s product OPNT003 (intranasal nalmefene), a potent long acting opioid antagonist for the treatment of opioid overdose. As part of the Development Agreement, Aesica and Bespak, wholly owned subsidiaries of Consort, will supply the Company with clinical samples and registration batches for the purpose of performing clinical studies and obtaining regulatory approvals. Further, as part of the Development Agreement, the Company and Aesica agreed that, upon approval by the U.S. FDA, Aesica and Bespak will manufacture and supply the commercial device for the Company upon mutually agreed terms. Under the terms of the Reimbursement Agreement, the Company has agreed to reimburse Aesica for certain service, tooling, equipment and facility alteration expenses incurred by Aesica under certain
|
|
December 31, 2017
|
|
July 31, 2017
|
|
||
Market value of stock on measurement date
|
$
|
36.79
|
|
|
$5.61 to 13.00
|
|
Risk-free interest rate
|
1.47
|
%
|
|
0.88-2.55%
|
|
|
Dividend yield
|
0
|
%
|
|
0
|
%
|
|
Volatility factor
|
96
|
%
|
|
76-348%
|
|
|
Term
|
2.12 years
|
|
|
2.28-10 years
|
|
|
Number of
Shares |
|
Weighted-
average Exercise Price |
|
Weighted-
average Remaining Contractual Term (years) |
|
Aggregate
Intrinsic Value |
||||
Outstanding at July 31, 2016
|
4,635,000
|
|
|
8.79
|
|
|
7.39
|
|
$
|
2,731,250
|
|
Granted
|
320,000
|
|
|
9.38
|
|
|
|
|
|
|
|
Expired
|
(5,000
|
)
|
|
10.00
|
|
|
|
|
|
||
Forfeited
|
(1,180,000
|
)
|
|
11.03
|
|
|
|
|
|
||
Outstanding at July 31, 2017
|
3,770,000
|
|
|
8.13
|
|
|
6.87
|
|
$
|
19,139,625
|
|
Exercised
|
(217,500
|
)
|
|
10.22
|
|
|
|
|
|
|
|
Forfeited
|
(572,000
|
)
|
|
11.51
|
|
|
|
|
|
|
|
Outstanding at December 31, 2017
|
2,980,500
|
|
|
7.33
|
|
|
7.06
|
|
$
|
46,606,210
|
|
Exercised
|
(95,000
|
)
|
|
8.24
|
|
|
|
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
|
|
|
||
Outstanding at December 31, 2018
|
2,885,500
|
|
|
7.30
|
|
|
6.04
|
|
$
|
20,633,100
|
|
Exercisable at December 31, 2018
|
2,747,150
|
|
|
7.20
|
|
|
6.01
|
|
$
|
19,928,663
|
|
Non-vested options
|
Number of
Options |
|
|
Weighted Average
Grant Date Fair Value |
|
||
Non-vested at July 31, 2016
|
90,833
|
|
|
$
|
7.27
|
|
|
Granted
|
320,000
|
|
|
7.70
|
|
|
|
Vested
|
(70,962
|
)
|
|
6.70
|
|
|
|
Non-vested at July 31, 2017
|
339,871
|
|
|
$
|
7.93
|
|
|
|
|
|
|
|
|||
Vested
|
(50,969
|
)
|
|
9.29
|
|
|
|
Non-vested at December 31, 2017
|
288,902
|
|
|
$
|
7.87
|
|
|
|
|
|
|
|
|
|
|
Vested
|
(150,552
|
)
|
|
7.92
|
|
|
|
Non-vested at December 31, 2018
|
138,350
|
|
|
$
|
7.84
|
|
|
|
Year Ended 12/31/18
|
Five Months Ended
12/31/17 |
||
Market value of stock on measurement date
|
$14.31 to $24.84
|
|
$18.16 to $49.93
|
|
Risk-free interest rate
|
2.47 % to 3.05%
|
|
2.06 % to 2.47%
|
|
Dividend yield
|
—
|
%
|
—
|
%
|
Volatility factor
|
121% to 324%
|
|
324% to 329%
|
|
Term (years)
|
5.5 to 10.0
|
|
10.00
|
|
|
Number of
Shares |
|
Weighted-
average Exercise Price |
|
Weighted-
average Remaining Contractual Term (years) |
|
Aggregate
Intrinsic Value |
|||||
Outstanding at July 31, 2017
|
—
|
|
|
|
|
|
|
|
||||
Total options authorized
|
400,000
|
|
|
|
|
|
|
|
||||
Granted
|
(214,000
|
)
|
|
$
|
37.62
|
|
|
|
|
|
||
Expired
|
—
|
|
|
|
|
|
|
|
||||
Forfeited
|
40,000
|
|
|
$
|
49.93
|
|
|
|
|
|
||
Outstanding at December 31, 2017
|
174,000
|
|
|
$
|
34.78
|
|
|
9.71
|
|
$
|
14,430
|
|
Exercisable at December 31, 2017
|
—
|
|
|
|
|
|
|
|
||||
Annual additional options authorized
|
101,431
|
|
|
|
|
|
|
|
||||
Granted
|
(196,550
|
)
|
|
$
|
23.26
|
|
|
|
|
|
||
Expired
|
—
|
|
|
|
|
|
|
|
||||
Forfeited
|
27,000
|
|
|
$
|
24.84
|
|
|
|
|
|
||
Options available at December 31, 2018
|
157,881
|
|
|
|
|
|
|
|
||||
Outstanding at December 31, 2018
|
343,550
|
|
|
$
|
28.97
|
|
|
8.95
|
|
$
|
840
|
|
|
Number of
Shares |
|
Weighted Average
Grant Date Fair Value Per Share |
|||
Non-vested at July 31, 2017 and 2016
|
—
|
|
|
|
||
Granted
|
214,000
|
|
|
$
|
37.62
|
|
Forfeited
|
(40,000
|
)
|
|
$
|
49.93
|
|
Non-vested at December 31, 2017
|
174,000
|
|
|
$
|
34.78
|
|
Granted
|
196,550
|
|
|
$
|
23.26
|
|
Forfeited
|
(27,000
|
)
|
|
$
|
24.84
|
|
Non-vested at December 31, 2018
|
288,047
|
|
|
$
|
27.62
|
|
Vested at December 31, 2018
|
55,503
|
|
|
$
|
34.66
|
|
|
Number of
Warrants |
|
Weighted-
average Exercise Price |
|
Weighted-
average Remaining Contractual Term (years) |
|
Aggregate
Intrinsic Value |
|||||
Outstanding at July 31, 2016
|
1,215,385
|
|
|
$
|
17.90
|
|
|
2.86
|
|
$
|
—
|
|
Granted
|
45,000
|
|
|
10.00
|
|
|
|
|
|
|||
Expired
|
(166,585
|
)
|
|
$
|
46.37
|
|
|
|
|
|
|
|
Forfeited
|
(325,000
|
)
|
|
15
|
|
|
|
|
|
|||
Outstanding at July 31, 2017
|
768,800
|
|
|
$
|
12.50
|
|
|
3.04
|
|
$
|
1,184,000
|
|
Exercised
|
(356,790
|
)
|
|
14.83
|
|
|
|
|
|
|||
Forfeited
|
(55,000
|
)
|
|
$
|
15.00
|
|
|
|
|
|
|
|
Outstanding at December 31, 2017
|
357,010
|
|
|
$
|
9.78
|
|
|
5.57
|
|
$
|
4,708,020
|
|
Exercised
|
(3,400
|
)
|
|
$
|
10.00
|
|
|
|
|
|
||
Outstanding at December 31, 2018
|
353,610
|
|
|
$
|
9.78
|
|
|
4.60
|
|
$
|
1,651,165
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
July 31, 2017
|
||||||
Net loss before taxes at statutory rate
|
$
|
(6,015,352
|
)
|
|
$
|
919,111
|
|
|
$
|
2,992,311
|
|
Permanent items
|
1,471,275
|
|
|
4,056
|
|
|
5,828
|
|
|||
Temporary items
|
2,444,934
|
|
|
(698,380
|
)
|
|
385,910
|
|
|||
Income tax expense at statutory rate
|
(2,099,143
|
)
|
|
224,787
|
|
|
3,384,049
|
|
|||
Valuation allowance
|
2,150,426
|
|
|
(55,624
|
)
|
|
(2,833,575
|
)
|
|||
Income tax expense per books
|
$
|
51,283
|
|
|
$
|
169,163
|
|
|
$
|
550,474
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
July 31, 2017
|
||||||
Net operating loss carryover at statutory rate
|
$
|
5,753,943
|
|
|
$
|
2,869,510
|
|
|
$
|
4,936,604
|
|
Stock-based compensation expense
|
4,939,759
|
|
|
7,404,037
|
|
|
9,922,093
|
|
|||
Fixed asset depreciation
|
—
|
|
|
(353
|
)
|
|
(2,470
|
)
|
|||
Intangibles amortization
|
(1,148
|
)
|
|
(1,012
|
)
|
|
—
|
|
|||
Other
|
2,046,961
|
|
|
(290,775
|
)
|
|
—
|
|
|||
Total
|
$
|
12,739,515
|
|
|
$
|
9,981,407
|
|
|
$
|
14,856,227
|
|
|
|
|
|
|
|
||||||
Valuation allowance
|
$
|
(12,739,515
|
)
|
|
$
|
(9,981,407
|
)
|
|
$
|
(14,856,227
|
)
|
Net deferred tax asset
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
For the Year Ended
|
||
(in thousands)
|
December 31, 2017
|
||
|
|
(unaudited)
|
|
Revenue:
|
|
|
|
Royalty and licensing revenue
|
$
|
15,447
|
|
Treatment investment revenue
|
|
105
|
|
Grant and contract revenue
|
|
—
|
|
Total revenue
|
|
15,552
|
|
Operating expenses:
|
|
|
|
General and administrative
|
|
10,313
|
|
Research and development
|
|
4,857
|
|
Royalty expense
|
|
1,408
|
|
Selling expense
|
|
851
|
|
Total operating expenses
|
|
17,429
|
|
Income from operations
|
|
(1,877
|
)
|
Other income, net
|
|
68
|
|
Income before provision of income taxes
|
|
(1,809
|
)
|
Provision for income taxes
|
|
797
|
|
Net loss
|
$
|
(2,606
|
)
|
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit Description
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
10.15†
|
|
|
|
|
|
|
||
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
23.1*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101
|
|
The following materials from the Opiant Pharmaceuticals, Inc. Form 10-K for the year ended December 31, 2018, the five months ended December 31, 2017 and the fiscal year ended July 31, 2017, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2018, December 31, 2017, and July 31, 2017, (ii) Consolidated Statements of Operations for the year ended December 31, 2018, the five months ended December 31, 2017 and the fiscal year ended July 31, 2017, (iii) Consolidated Statement of Stockholders' Equity (Deficit) for the year ended December 31, 2018, the five months ended December 31, 2017 and the fiscal year ended July 31, 2017, (iv) Consolidated Statements of Cash Flows for the year ended December 31, 2018, the five months ended December 31, 2017 and the fiscal year ended July 31, 2017, and (v) Notes to Consolidated Financial Statements.
|
|
|
|
Opiant Pharmaceuticals, Inc.
|
|
|
|
|
|
|
Date:
|
March 21, 2019
|
|
By:
|
/s/ Dr. Roger Crystal
|
|
|
|
|
Dr. Roger Crystal
|
|
|
|
|
Chief Executive Officer
|
By:
|
/s/
Dr. Roger Crystal
|
|
Director & Chief Executive Officer
|
|
Dr. Roger Crystal
|
|
(Principal Executive Officer)
|
|
|
|
|
By:
|
/s/
David D. O'Toole
|
|
Chief Financial Officer
|
|
David D. O'Toole
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
By:
|
/s/
Dr. Michael Sinclair
|
|
Director
|
|
Dr. Michael Sinclair
|
|
|
|
|
|
|
By:
|
/s/
Thomas T. Thomas
|
|
Director
|
|
Thomas T. Thomas
|
|
|
|
|
|
|
By:
|
/s/
Dr.
Gabrielle Silver
|
|
Lead Independent Director
|
|
Dr. Gabrielle Silver
|
|
|
|
|
|
|
By:
|
/s/
Ann MacDougall
|
|
Director
|
|
Ann MacDougall
|
|
|
|
|
|
|
By:
|
/s/
Richard J. Daly
|
|
Director
|
|
Richard J. Daly
|
|
|
|
|
|
|
By:
|
/s/
Craig Collard
|
|
Director
|
|
Craig Collard
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this Annual Report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and
|
d)
|
Disclosed in this Annual Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
By:
|
/s/
Dr. Roger Crystal
|
|
|
Dr. Roger Crystal
|
|
|
|
Chief Executive Officer
|
|
e)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this Annual Report is being prepared;
|
f)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
g)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and
|
h)
|
Disclosed in this Annual Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
c)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
d)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: March 21, 2019
|
|
|
|
|
|
|
|
|
By:
|
/s/
David O'Toole
|
|
|
David O'Toole
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
/s/
Dr. Roger Crystal
|
|
|
Dr. Roger Crystal
|
|
|
|
Chief Executive Officer
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
/s/ David O'Toole
|
|
|
David O'Toole
|
|
|
|
Chief Financial Officer
|
|
|