Via Facsimile and U.S. Mail
Mail Stop 6010
June 20, 2005
Robert L. Bratzler
President and Chief Executive Officer
Coley Pharmaceutical Group, Inc.
93 Worcester Street, Suite 101
Wellesley, MA 02481
Re: Coley Pharmaceutical Group, Inc.
Amendment #1 to Registration Statement on Form S-1
Filed June 2, 2005
File Number 333-124176
Dear Mr. Bratzler:
We have reviewed your filing and have the following comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
FORM S-1
1. We note your response to comment 8 and reissue the comment.
Please revise to limit the summary discussion of your product
candidates to an identification of the target indication, the
stage
of clinical trials and the identification of the collaborative
partners. Move the discussion of the results of clinical trials
to
the Business section. Additionally, the discussion in the
Business
section should include qualifying language explaining that later
stage clinical trials might not support the finding presented.
Risk Factors
Because we have limited manufacturing experience, we depend on
third-
party ..., page 15
2. We note your response to comment 17. We understand from your
analysis, there are at least two manufacturers who can provide you
with the Actilon compound and that production of the compound is
not
complex. Additionally, there are others who can provide you with
this compound and these third-party manufacturers can supply you
with
your preclinical and clinical needs with minimum disruption.
However, we note your statement in the risk factor, "there are
very
few third-party manufacturers that have sufficient production
capacity to manufacture all of our TLR Therapeutic product
candidates
either for our clinical trials or on a commercial scale." Please
revise to eliminate the inconsistency.
If the combination of patents, trade secrets and contractual
provisions ..., page 17
3. We note your response to comment 21 and reissue the comment.
Please revise the discussion to identify your product candidates
that
would be affected if Dynavax`s actions are successful.
Use of Proceeds, page 27
4. We note your response to comment 27 and reissue the comment.
Your
"Use of Proceeds" should provide estimates of the amounts expected
to
be spent on each product candidate and the stage of development
you
expect to achieve with these proceeds.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations, page 39
Quarters Ended March 31, 2005 and 2004, page 39
Research and Development Expenses, page 39
5. Refer to your response to comment 30. Your disclosure appears
to
indicate that you now track certain of these expenditures at a
project level, refer to the second paragraph under the table
"Research and Development Expenses" where you discuss certain
clinical expenses on a project basis. Please disclose the
expenditures by major research and development project for the
periods in which you actually tracked these expenses at that
level.
Liquidity and Capital Resources, page 44
6. We note your response to comment 31 and reissue the comment in
part. Please indicate if you expect to raise additional funds in
the
next 24 months. If you are unable to determine whether you will
or
not, please disclose the reasons. This information was not asked
for
supplementally but rather as disclosure in your prospectus.
Please
revise accordingly, we may have further comments.
Business
Other Commercial Collaborations, page 72
7. We note your response to comment 31. Please provide us with
your
analysis supporting your determination that the agreement is not
material. Additionally, as the agreement was previously filed in
a
redacted format with a confidential treatment request, you cannot
simply delete it from your list of exhibits. We may issue
comments
on your confidential treatment request for this agreement and may
require you to refile the agreement restoring some of the redacted
information.
8. We note your responses to comments 38, 39 and 40 related to the
duration of agreements. For agreements that expire on the
expiration
of the latest to expire patent, please disclose when the latest to
expire patent is scheduled to expire.
9. We note your response to comment 40 and reissue the comment.
Please disclose the total aggregate amount you may be entitled to
receive under the terms of your license agreement with Qiagen (now
Merial Limited). While we are willing to grant confidential
treatment for the amounts of individual payments, the aggregate
amounts must be disclosed in your registration statement. Please
revise your Form S-1 to include all aggregate payments pursuant to
your agreements for which you have requested confidential
treatment.
We may have further comments.
Intellectual Property, page 75
10. We note your response to comment 45. You have disclosed that
you
have nine other patents relating to other potential TLR
Therapeutics.
Please revise to identify any product candidate that they relate
to
or state that you do not currently have any product candidates
that
rely on these patents.
Principal Stockholders, page 95
11. We note your response to comment 53 and reissue the comment in
part. Please provide the full name(s) of the natural persons
having
voting, dispositive or investment powers over the shares held by
the
entities affiliated with DWS Investment GmbH. Additionally, it is
not clear whether Karsten Henco is a natural person or an entity,
if
an entity, please provide similar disclosure.
Notes to the Consolidated Financial Statements
3. Summary of Significant Accounting Policies
Deferred Royalty Fees, page F-11
12. We note your response to our comment number 61. It appears
that
you assert that the deferral of the royalty payments is
appropriate
because you are required to defer the revenue and recognize this
revenue over the term of the agreement. Please clarify if our
understanding of this treatment is correct. Also tell us for
which
agreements you are deferring revenue and royalties and explain
better
to us how the revenue recognized specifically relates to the
deferred
royalty payments. Additionally, we are unsure of the
applicability
of SAB Topic 13.A.3.f. Question 5 relates to a specific
transaction,
and not a broad application of the literature. Also note that all
other literature cited in your response is very specific to those
transactions and analogy to that literature does not appear
justified. Please provide additional support for your accounting
treatment.
8. Redeemable Convertible Preferred Stock, page F-19
Financing History, page F-19
13. Refer to your response to comment 63. Please note that we may
have additional comments related to the valuations used and
discussed
in the response when the price range for the offering becomes
known.
Conversion Rights, page F-22
14. Refer to your response to comment 67. Please provide to us
your
analysis of the impact that Issue 7 of EITF 00-27 had on the
adjustments to the conversion prices of these preferred shares.
Include a detailed explanation of any calculations and assumptions
used in this determination.
* * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please file
your cover letter on EDGAR under the form type label CORRESP.
Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Tabitha Akins at (202) 551-3658 or Jim
Atkinson
at (202) 551-3674 if you have questions regarding comments on the
financial statements and related matters. Please contact Albert
Lee
at (202) 551-3654 or me at (202) 551-3715 with any other
questions.
Sincerely,
Jeffrey Riedler
Assistant Director
cc: Megan Gates
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
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Robert L. Bratzler
Coley Pharmaceutical Group, Inc.
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