Mail Stop 6010 December 6, 2005
Mr. Stanley C. Erck
Chief Executive Officer
Iomai Corporation
20 Firstfield Road, Suite 250
Gaithersburg, Maryland 20878
Re: Iomai Corporation
Amendment No. 2 to Registration Statement on Form S-1
Filed November 14, 2005
File No. 333-128765
Dear Mr. Erck:
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.
Prospectus Summary, page 1
1. We note your response to comment 8. Please move the discussion
of
the potential disadvantages of your products to immediately follow
the discussion of the potential advantages.
2. The discussions of your product candidates and products in
preclinical development are unclear. Please make the following
clarifications throughout your filing:
* Clarify whether the needle-free flu vaccine will use flu
antigens
and an adjuvant that are FDA approved. If this product candidate
uses antigens and an adjuvant that you are hoping to get FDA
approval
for, then please revise to clarify that you are hoping to obtain
FDA
approval for the antigens and adjuvant as well as the patch as a
delivery system
* Does the IS patch for elderly receiving flu vaccines contain an
adjuvant that has already received FDA approval? If it contains
an
adjuvant that does not yet have FDA approval and you are hoping to
obtain FDA approval, please revise to clarify.
* Does the needle-free travelers` diarrhea patch contain a vaccine
that is already FDA approved or are you developing the vaccine as
well as the patch as a delivery system
* We note you are in preclinical development for an IS patch for
pandemic flu. Clarify whether you developing a vaccine or just
the
delivery system. If you are only developing the delivery system,
then clarify that there is not yet a vaccine for pandemic flu that
has received FDA approval and clarify whether your patch would
have
to be retested on humans once a vaccine received FDA approval.
3. If you are attempting to obtain FDA approval for the delivery
system, and not the antigens and adjuvants that will be used with
the
patch, clarify whether the FDA approval process differs from the
process of obtaining FDA approval for the antigens and adjuvants
and
clearly explain the process.
Use of Proceeds, page 27
4. We note your response to comment 19. However, the reason for
the
discrepancy is still unclear. Please provide us with a
reconciliation of the amounts needed to complete clinical trials
as
presented in your "Use of Proceeds" and the amounts needed to
complete clinical trials as presented in "Management`s Discussion
and
Analysis of Financial Condition and Results of Operations." It
may
be helpful to explain your meaning of the term "third-party
clinical
costs."
Management`s Discussion and Analysis of Financial Conditions and
Results of Operation
Results of Operations, page 37
5. We note your response to our prior comment 21. The increase in
general and administrative expenses during the nine months ended
September 30, 2005 compared to the nine months ended September 30,
2004 was only $100,000. Do the reasons you indicate for the
increase
relate to the $100,000, or are there other material general and
administrative expenses that decreased, offsetting the $100,000
increase.
Business, page 47
6. Please disclose the aggregate milestone payments payable under
your agreement with Dow.
7. We note your agreement with Dow requires you to pay "time-based
fees." Please revise to quantify these fees.
8. We note your response to comment 29. Please provide us with
more
information about this collaboration. Was the pharmaceutical
company
merely supplying the flu antigen for the clinical trial? If so,
it
would appear that this was merely a supply agreement as opposed to
collaboration. Please explain.
Underwriting
9. We note your response to our prior comment 43 that you will
comply
with Rule 433 if you conduct an electronic roadshow after December
1,
2005. Please advise us of whether you plan to conduct such an
electronic roadshow and how you intend to comply with Rule 433.
Index to Financial Statements, page F-1
Notes to Financial Statements, page F-8
2. Significant Accounting Policies, page F-8
Stock-based Compensation, page F-12
10. Please tell us whether the repriced options, noted in your
response to prior comment 47, were accounted for as variable, in
accordance with paragraph 39 of FIN 44. If so, please explain how
this would not have resulted in the amounts reported in net loss
since 2003 being different than the total expense for all awards,
determined under the fair value based method. In addition, please
disclose the repricing of and your accounting for these options.
4. Elan Restructuring, page F-16
Restructuring Agreement, page F-18
11. As it is still unclear from your response to prior comment 52,
please clarify why the estimated fair value of the convertible
notes
and accrued interest was significantly less than their carrying
value. In so doing, please clarify why their fair value appears
to
have been solely based on the fair value of the common stock into
which it would be convertible, especially as your response to
prior
comment 50 suggests that the notes were not yet convertible. In
this
regard, please explain why their fair value does not appear to
have
considered: (a) the amount at which a willing party would have
bought the convertible notes and accrued interest or (b) the
present
value of the cash flows underlying the convertible notes and
accrued
interest, as both are contemplated by CON 7.
8. Stockholders` Deficit, page F-23
Stock Options, page F-23
12. We have the following comments on your responses to prior
comments 53 and 54:
a. As we had requested, please disclose the information requested
by
prior comment 53 or tell us where you have disclosed this
information. Once you disclose or later revise an estimated IPO
price, please ensure that you disclose the significant factors
contributing to the difference between the fair value of the
common
stock as of the date of each grant and the estimated IPO price.
Until then, please provide us an analysis of these factors, as if
an
update of the anticipated price you provided in response to prior
comment 26 was the estimated IPO price.
b. Based on your response to prior comment 53 and your
disclosures,
it appears that the last sale of your stock occurred in June 2004,
when you sold shares of Series C preferred stock at $0.4421 per
share. As you appear to believe that the fair value of your
comment
stock remained at $0.07 per share between then and July 29, 2005,
please provide us with the analysis you performed in June 2004 to
arrive at the $0.07 per share (or 84% less than the price of the
Series C) and each analyses that you subsequently performed
through
July 29, 2005, with as much quantification as was performed.
Please
clearly indicate when each of these subsequent analyses were
contemporaneously performed, as represented in your response to
prior
comment 54. In addition, please demonstrate how each of these
analyses considered any intervening changes in each of the seven
factors disclosed on page F-24 and any other factors that you
believed appropriate when determining the fair market value of
your
stock. Furthermore, please illustrate how each analysis
considered
the likelihood of ultimately completing an IPO.
c. Please elaborate on why the fair value of your common stock
increased from $0.07 to $0.22 per share between July 29 and August
30, 2005, respectively. In so doing, please:
i. Provide us the analysis you performed to arrive at the $0.22
per
share, with as much quantification as was performed.
ii. Demonstrate how that analysis considered any changes in each
of
the seven factors disclosed on page F-24 and any other factors
that
you believed appropriate when determining the fair market value of
your stock.
iii. Illustrate how each of the events described in the
penultimate
paragraph of your response to prior comment 53 was reflected in
that
analysis.
iv. Elaborate on the "positive trends in the public capital market
for life sciences companies" and clarify when they commenced; if
they
commenced prior to July 29, 2005, tell us why this did not appear
to
previously affect the fair value of your stock.
v. Describe why, after you had interviewed and begun negotiations
with potential investment banks, you appear to have believed that
the
likelihood of completing an IPO without a collaboration would have
been less than 50%.
vi. Explain how the likelihood of completing an IPO was affected
by
you and the potential collaborator reaching "the outline of a non-
binding agreement on the economic terms of a potential deal".
vii. Tell us the extent to which you quantitatively weighed the
probability of completing or not completing an IPO and the fair
value
of your stock under each scenario.
d. In light of the events described in the last paragraph of your
response to prior comment 53, please provide us with the analysis
you
performed in concluding that the fair value of your common stock
did
not change between August 30 and September 29, 2005. In so doing,
please:
i. Demonstrate how that analysis considered any changes in each of
the seven factors disclosed on page F-24 and any other factors
that
you believed appropriate when determining the fair market value of
your stock. Illustrate how it considered the likelihood of
completing an IPO.
ii. Tell us how your analysis considered the September 22, 2005
confirmation "from the potential partner that it was interested in
moving ahead with drafting documents based on the deal as outlined
in
the August meeting".
iii. Elaborate on how not filing your registration statement
apparently put you in a position where you could not "gauge the
likelihood of success of" a potential IPO. Tell us what you
concluded about this likelihood when you filed the registration
statement on October 3, 2005, just two business days after
September
29, 2005.
13. As it is was unclear from your response to prior comment 55,
please tell us whether the price observations of the small-
capitalization public life science companies were of an
appropriate
period following them going public, as per paragraph 277 of SFAS
123.
In addition, please tell us how that period was consistent with
the
expected option lives, as contemplated by paragraph 285(a) of SFAS
123. Finally, as we had requested, please illustrate how your
calculation of estimated volatility was consistent with Appendix F
of
SFAS 123.
* * * * *
As appropriate, please amend your filing 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 Tabatha Akins at (202) 551-3658 or Oscar
Young
at (202) 551-3622 if you have questions regarding comments on the
financial statements and related matters. Please contact Sonia
Barros at (202) 551-3655 or Suzanne Hayes at (202) 551-3675 with
any
other questions.
Sincerely,
Jeffrey P. Riedler
Assistant Director
cc: Paul M. Kinsella, Esq.
Ropes & Gray LLP
One International Place
Boston, MA 02110-2624
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Mr. Stanley C. Erck
December 6, 2005
Page 8