March 26, 2019
Dean Petkanas
Chief Executive Officer
Kannalife, Inc.
3805 Old Easton Road
Doylestown, PA 18902
Re: Kannalife, Inc.
Amendment No. 2 to Registration Statement on Form S-1
Filed March 8, 2019
File No. 333-227736
Dear Mr. Petkanas:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments. Unless
we note
otherwise, our references to prior comments are to comments in our February 15,
2019 letter.
Amendment No. 2 to Registration Statement on Form S-1
Our Business, page 1
1. We refer to the first paragraph of your Summary and note that the
prospectus summary
should include a balanced presentation of your business, including your
competitive
position in the industry. Please revise this opening paragraph to
explain that your
operations are pre-clinical in nature. In light of your pre-clincial
status and your
disclosures on page 23, also revise to remove your claim of industry
leadership.
2. Please revise your Summary Overview to explain briefly why your
preclincial work has
focused exclusively on testing your potential drug candidates
side-by-side against CBD.
To place this research in context, disclose whether any CBD-based or
CDB-derived drugs
have received FDA or foreign regulatory clearances to treat the
indications you target.
Dean Petkanas
FirstName Inc.
Kannalife, LastNameDean Petkanas
Comapany2019
March 26, NameKannalife, Inc.
March 26, 2019 Page 2
Page 2
FirstName LastName
3. We refer to prior comment 4 and note that your revised prospectus
contains several
performance claims concerning drugs that you have not tested
clinically and that have not
been approved by FDA or comparable regulatory bodies. Please review
your prospectus
and revise to remove all such performance claims or, alternatively,
revise to place them
into appropriate context. Without limitation, we note the following
disclosures:
"our proven drug discovery and development processes" (page 1);
"we have successfully synthesized, tested and patented our
proprietary CBD derived
new chemical entities" (page 1);
"both molecules exhibited complete efficacy" (page 2); and
Kannalife has "solved" problems exhibited in CBD (i.e., severe
limitations in terms of
potency, safety, oral bioavailability, and regulatory
restrictions) (page 52).
4. We note your revised disclosure concerning the '507 patent and refer
to comment 6 from
our November 1, 2018 letter. Based on your revised disclosure, it is
unclear why you
highlight this patent prominently in your Summary, particularly given
(i) your disclosure
on page 46 that this patent expires in less than one month and (ii)
your disclosure on page
41 that "the weight of the Company's future success, drug development
program
regarding cannabidiol based therapeutics is not centered on the `507
Patent." Please
revise accordingly. For guidance, please refer to the Instruction to
Regulation S-K, Item
503(a).
5. We refer to your Summary disclosure in the final paragraph of page 1
and your
corresponding Business disclosures on page 56-57. Please tell us, and
revise the
prospectus to clarify, your basis for the claim at the bottom of page
1 that your research
"determined that one of our patented CBD derived target drug
candidates, KLS-13019
was superior to CBD in the potential treatment of chemotherapy induced
peripheral
neuropathy ("CIPN")." In this regard, we note that your disclosure in
the fifth paragraph
on page 56 suggests that you and your partners have not yet conducted
the "Phase I STTR
application" related to CIPN. We also note that the final sentence in
the second
paragraph on page 57 references "preclinical studies", but does not
discuss those
studies or their results, and that the third paragraph on page 57
discusses the "preliminary
effects of KLS-13019 in a CIPN model", but does not compare the
results against those
achieved using CBD.
6. We refer to your disclosure in the first paragraph on page 2 relating
to "top-line results
from our pre-clinical efforts in the potential treatment of overt
hepatic encephalopathy
("OHE") and the potential treatment of CIPN." For both indications,
please revise your
Business section to discuss in detail these efforts and results and
show how they support
your claims of "marked improvement" and "increased potency" relative
to CDB. Also,
explain the meaning of "top-line" and discuss any efforts or results
that remain
outstanding.
Dean Petkanas
FirstName Inc.
Kannalife, LastNameDean Petkanas
Comapany2019
March 26, NameKannalife, Inc.
March 26, 2019 Page 3
Page 3
FirstName LastName
7. We refer to the second paragraph on page 2. Please revise the Business
section to discuss
the studies that support your statement that (i) treatment with
KLS-13019 alone was 5-fold
less toxic than CBD and (ii) our studies indicate that KLS-13019 was
more potent and less
toxic than CBD.
Corporate Strengths, page 2
8. We note that you have added a section to the Summary detailing several
of your
"Corporate Strengths." Accordingly, please revise your Summary
presentation to also
highlight significant risks and/or challenges that you face. With
respect to bullet points 4,
5 and 6, please also consider whether inclusion of a "Clinical
Timelines" table, such as the
one presented on page 42, would enhance your Summary presentation.
Business
Kannalife Studies on CBD, page 48
9. We note your disclosure that CBD is a substance with "demonstrated
protective properties
against oxidative stress." To the extent that FDA and/or comparable
foreign
regulatory bodies have not approved CBD to treat oxidative stress,
please revise to place
this statement in context.
Kannalife Strategic Third Party Business Relationships, Licenses and Joint
Ventures, page 50
10. We note your revisions in response to our prior comment 13. Please
expand your
disclosure concerning the MTTA to include the material terms including
the
following: each party's rights and obligations; financial terms,
including the aggregate
milestone payments and royalty rate or range not to exceed ten
percent; duration of the
agreement and royalty term; and termination provisions.
General
11. Please revise to update the financial statements by reference to Rule
8-08(b) of Regulation
S-X.
12. In response to prior comment 19, you state that the Company's receipt
of capital stock
(i.e., shares of MJNA's common stock) from another entity in
connection with the
settlement of a dispute represents a disproportionate segment of the
Company's total
assets. Please explain why the Company is not an investment company
under section
3(a)(1)(C) of the Investment Company Act. In your response, please
provide us with
specific facts regarding the investment company status of the Company.
Specifically,
please explain why the Company's shares in the common stock of MJNA
would not
constitute "investment securities" under Section 3(a)(2) of the
Investment Company Act
and provide an analysis of the value of the Company's investment
securities as a
percentage of total assets (exclusive of Government securities and
cash items) on an
unconsolidated basis as of the date of the latest balance sheet
included in the Company's
Dean Petkanas
Kannalife, Inc.
March 26, 2019
Page 4
registration statement.
You may contact Paul Cline at (202) 551-3851 or Jim Rosenberg at (202)
551-3679 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Jeffrey Gabor at (202) 551-2544 or Joseph McCann at (202) 551-6262 with
any other
questions.
Sincerely,
FirstName LastNameDean Petkanas
Division of
Corporation Finance
Comapany NameKannalife, Inc.
Office of Healthcare
& Insurance
March 26, 2019 Page 4
cc: Christopher L. Tinen, Esq.
FirstName LastName