January 14, 2020
Alexander Zwyer
Chief Executive Officer
NLS Pharmaceutics Ltd.
Alter Postplatz 2
CH-6370 Stans, Switzerland
Re: NLS Pharmaceutics Ltd.
Draft Registration Statement on Form F-1
Submitted December 18, 2019
CIK No. 0001783036
Dear Mr. Zwyer:
We have reviewed your draft 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 providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. 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 the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form F-1 submitted December 18, 2019
Prospectus Summary
Our Company, page 1
1. Please expand your disclosure regarding Quilience and Nolazol to briefly
discuss your
stage of development of these product candidates and your plans for
their development in
the future. Further, given your risk factor disclosure on page 10,
please clarify whether
you are pursuing FDA approval of one or both of the lead product
candidates for use in
children.
2. We note your statements throughout the prospectus that Quilience and
Nolazol are
"novel" pharmaceutical products and agents, yet the active molecule in
these product
candidates is a controlled release formulation of mazindol, which has
been previously
Alexander Zwyer
FirstName LastNameAlexander Zwyer
NLS Pharmaceutics Ltd.
Comapany NameNLS Pharmaceutics Ltd.
January 14, 2020
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approved in an immediate release form. Please revise the use of the
term "novel"
throughout the prospectus as appropriate.
Risks Associated With Our Business, page 2
3. Please include a bullet point describing the risks related to the fact
that over 70% of your
outstanding common stock is held by your chief executive officer and
affiliates, and
discuss the extent to which they will continue to exert control over
you after the offering.
Implications of Being an "Emerging Growth Company", page 3
4. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
Risk Factors
Obtaining approval of an NDA or a Marketing Authorization Application..., page
7
5. We note your disclosure that you have not received regulatory
clearance to conduct the
additional clinical trials that are necessary to be able to submit an
NDA to the FDA for
Nolazol. Please revise your disclosure to specify the regulatory
clearance needed to
conduct additional trials and describe any additional steps involved
in obtaining the
regulatory clearance.
Risks Related to Our Intellectual Property, page 25
6. Please add a risk factor, or revise in the appropriate risk factor, to
address the limitations
of patents protecting the method of use as opposed to other types of
patents, such as a
composition of matter patent.
Use of Proceeds, page 42
7. We note that the net proceeds will be used to further develop mazindol
CR for use in
Quilience and Nolazol. Please revise your disclosure to specify how
far in the clinical
development you expect to reach with the net proceeds for each of the
identified product
candidates.
Business
Our Development Pipeline, page 57
8. We note that your pipeline table includes product candidates with
regard to which you do
not provide any information (NLS 10, NLS-13 and NLS-14) or provide
limited
information (NLS-2, NLS-3 and NLS-4). Please remove these product
candidates from the
pipeline table or tell us why you believe these product candidates are
material to your
business. To the extent you believe these product candidates are
material, please provide
disclosure regarding these product candidates, including whether you
own or license the
Alexander Zwyer
NLS Pharmaceutics Ltd.
January 14, 2020
Page 3
intellectual property underlying the product candidate, the mechanism
of action, any trials
conducted to date and your plans for development.
Our Solution: Quilience for Narcolepsy - A Well-Suited Approach for the Disease
Pathology ,
page 62
9. We note that in your pipeline table on page 57, it suggests that you
have completed Phase
2 studies for Quilience. However, you do not provide a description of
any studies
conducted to date with respect to Quilience and further disclose that
you have not yet
submitted an IND application or CTA. Please revise your disclosure or
the pipeline table
to reconcile this discrepancy. To the extent you have completed any
clinical trials to date,
please provide a description of these trials.
10. We note your statement of belief that Quilience may qualify for the
Breakthrough
program "based on positive real-world evidence using the same outcome
measures
utilized in Phase 3 clinical trials." Please revise your disclosure to
explain what this
means.
Our Solution: Nolazol - The Efficacy of a CII Stimulant with Improved Safety
and Tolerability,
page 67
11. You make several assertions regarding the safety and efficacy of your
product candidates.
For example, on page 67, you state that "Nolazol has the right balance
of safety and
efficacy," that Nolazol demonstrated "evidence of efficacy and safety"
in your Phase 2
clinical trial, and that Nolazol has "comparable efficacy, improved
safety" compared to
CII treatments in use today and is "a more effective treatment than
the available non-
stimulants." Safety and efficacy determinations are solely within the
authority of the FDA
(or applicable foreign regulator). Please revise or remove
statements/inferences
throughout your prospectus that your product candidates are safe
and/or effective.
Manufacturing and Suppliers, page 74
12. We note that you rely on a single source for the production of your
drug substance. Please
disclose the material terms of your agreement with this supplier and
file the agreement as
an exhibit to the registration statement, or tell us why you do not
believe this is
required. See Item 601(b)(10) of Regulation S-K.
Intellectual Property, page 75
13. Please expand your disclosure to clarify the type of patent protection
your applications
covering mazindol CR for the treatment of ADHD and narcolepsy provide
(e.g.,
FirstName LastNameAlexander Zwyer
composition of matter, method of use, etc.). Also revise to clarify the
type of protection
Comapany NameNLS Pharmaceutics Ltd. referenced in the last sentence of the
second
covering NLS-2, NLS-3 and NLS-4
paragraph.
January 14, 2020 Page 3
FirstName LastName
Alexander Zwyer
FirstName LastNameAlexander Zwyer
NLS Pharmaceutics Ltd.
Comapany NameNLS Pharmaceutics Ltd.
January 14, 2020
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January 14, 2020 Page 4
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Note 1: Background, page F-7
14. You disclose that as all of the companies were owned by the same
shareholders, the
Merger was considered to be a common controlled transaction. Please
tell us the
ownership interests of NLS-0 Pharma Ltd., NLS Pharma Ltd. and NLS-1
Pharma Ltd.
both before and after the Merger. If any of the ownership percentages
changed, please
explain the appropriateness of accounting for the Merger at historical
cost.
Note 2: Summary of Significant Accounting Policies
Revenue Recognition, page F-8
15. Although you indicate that you recognized revenue in accordance with
ASC 606, your
disclosures herein and in Note 8 appear to refer to terminology and
recognition principals
set forth in ASC 605. Please revise your disclosures to address your
revenue recognition
policies and disclosure requirements under the guidance of ASC 606.
Address this
comment as it relates to your Critical Accounting Policies regarding
revenue recognition
on page 51. Also, see our specific comment below regarding your
accounting for the EF
License Agreement.
Note 8: License Revenues, page F-12
16. Given the fact that you adopted the provisions of ASC 606 on January
1, 2019, please
revise your disclosures to identify the performance obligations
included in your EF
License Agreement. Indicate the goods or services promised that are
distinct and those
that are combined to form a bundled performance obligation. Refer to
ASC 606-10-25-14
through 22 and provide the disclosures required by ASC 606-10-50-12
and 50-13. In
addition, with reference to ASC 606-10-32-28 through 35, please
disclose how you
determined the transaction price and the amount allocated to each
performance obligation. In that regard, please address how you
considered the guidance
in ASC 606-10-55-50 thorough ASC 606-10-55-53 in accounting for the
$2.5 million
payment and how you considered the other milestone payments in
determining your
transaction price and the extent to which such variable consideration
was constrained.
Refer to ASC 606-10-50-20. Please address this comment as it relates
to your disclosures
surrounding the accounting for your EF License Agreement on page 46.
Alexander Zwyer
FirstName LastNameAlexander Zwyer
NLS Pharmaceutics Ltd.
Comapany NameNLS Pharmaceutics Ltd.
January 14, 2020
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January 14, 2020 Page 5
FirstName LastName
You may contact Michael Fay at 202-551-3812 or Jeanne Baker at
202-551-3691 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Irene Paik at 202-551-6553 or Mary Beth Breslin at 202-551-3625 with
any other
questions.
Sincerely,
Division of Corporation
Finance
Office of Life Sciences
cc: Howard Berkenblit