United States securities and exchange commission logo
May 19, 2020
Pankaj Mohan, Ph.D.
Chief Executive Officer and Chairman
Sonnet BioTherapeutics Holdings, Inc.
100 Overlook Center, Suite 102
Princeton, NJ 08540
Re: Sonnet
BioTherapeutics Holdings, Inc.
Registration
Statement on Form S-3
Filed April 22,
2020
File No. 333-237795
Dear Dr. Mohan:
We have reviewed your 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.
Registration Statement on Form S-3
Prospectus Summary, page 4
1. We note your belief
that your FHAB technology, based on an in vivo study in a
mouse, significantly
improved efficacy versus interleukin. We further note your disclosure
on page 185 that
presents your conclusion that "SON-1010 [is] more effective at reducing
tumor volume and
extending survivability than standalone IL-12 WT." Additionally, we
note similar statements
regarding your FHAB technology and other product candidates
throughout the
registration statement. Given that it is within the sole authority of the FDA
or similar foreign
regulator to determine the efficacy of a drug and that efficacy is
determined by reference
to the indication being treated, these statements are not
appropriate. Please
delete these statements. You may replace these statement and other
similar statements with
descriptions of the preclinical or clinical trials and the resulting
Pankaj Mohan, Ph.D.
FirstName LastNamePankaj Mohan, Ph.D.
Sonnet BioTherapeutics Holdings, Inc.
Comapany NameSonnet BioTherapeutics Holdings, Inc.
May 19, 2020
Page 2
May 19, 2020 Page 2
FirstName LastName
data without drawing conclusions with respect to efficacy.
Incorporation of Certain Information by Reference
Form 8-K Dated April 1 Filed April 3, 2020, page 21
2. Please explain to us where the Form 8-K dated April 1 and filed April
3, 2020 is included
in the incorporation of certain information by reference section on
page 21.
3. We reference the financial statements of Relief Therapeutics SA
included in Exhibit
99.4 and note that the audit report of Mazars SA does not include an
opinion on whether
the financial statements comply with IFRS as issued by the IASB.
However, Note
3 indicates that the financial statements were prepared in accordance
with IFRS as issued
by the IASB. Please have your auditors revise their audit report to
opine on financial
statements prepared in accordance with IFRS as issued by the IASB.
Refer to Item 17(c)
of Form 20-F.
4. We reference Note 11 on page 14 of the audited financial statements of
Relief
Therapeutics SA included in Exhibit 99.4. Please explain to us the
basis in accounting
literature for the income recognition of the loan forgiven by the sole
shareholder.
5. It is unclear to us why you have included the pro forma information in
both Exhibits 99.5
and 99.6. Please explain to us the difference between the pro forma
information in each
of these exhibits and the reason pro forma information was included in
separate exhibits.
6. Please refer to Exhibit 99.6. We note that pro forma adjustment (3)B
represents the fair
value of in-process research and development with no alternative
future use acquired from
Relief Therapeutics. However, on your pro forma balance sheet this
amount is combined
with the effects of a pre-closing private placement transaction. In
order to clarify the
effect of the Relief acquisition, please revise your presentation to
separately quantify and
disclose all material pro forma adjustments. In addition, disclose the
purchase price
allocation for the acquisition of Relief Therapeutics and discuss how
the fair values were
determined that resulted in the in-process research and development.
Refer to the
requirements Rule 11-02 of Regulation S-X.
7. Please refer to Exhibit 99.6. We note that your pro forma adjustment
to cash in note
(3)E includes a $6 million payment of payoff amount. Please revise
your disclosure to
describe the nature and terms of the payoff and your basis for
including this amount as a
pro forma adjustment.
8. Please refer to Exhibit 99.6. We note the pro forma weighted average
shares outstanding
of 2,204,932 disclosed in note (3)N does not agree to the weighted
average common
shares outstanding of 2,275,661 disclosed on the face of the pro forma
statement of
operations. Please advise or revise your disclosure accordingly. As a
related matter,
explain to us how your calculated the 5,351,662 historical
reverse-split affected weighted
average shares outstanding in pro forma adjustment (3)O.
Pankaj Mohan, Ph.D.
FirstName LastNamePankaj Mohan, Ph.D.
Sonnet BioTherapeutics Holdings, Inc.
Comapany NameSonnet BioTherapeutics Holdings, Inc.
May 19, 2020
Page 3
May 19, 2020 Page 3
FirstName LastName
9. We note that you have incorporated by reference your Registration
Statement on Form S-4
(File No. 333-235301) filed on November 27, 2019 and refer to your
FHAB disclosure
starting on page 179. Please revise to balance the presentation of
this disclosure, as
applicable, to discuss the challenges or uncertainties you face with
respect to the
development or commercialization of your proprietary FHAB technology.
10. We note that you have incorporated by reference your Registration
Statement on Form S-4
(File No. 333-235301) filed on November 27, 2019 and refer to your
pipeline table on
page 180. Please include a column for each of Phase 2 and Phase 3.
11. We note that you have incorporated by reference your Registration
Statement on Form S-4
(File No. 333-235301) filed on November 27, 2019 and refer to your
pipeline table on
page 180. Please revise your pipeline table to indicate that SON-080
and SON-081 are
the same product candidate with different indications. To the extent
that you have not
commenced clinical trials for Diabetic Peripheral Neuropathy, please
revise the chart to
indicate your reliance on the clinical results of SON-080 as
representative of the
development status of SON-081.
12. We note that you have incorporated by reference your Registration
Statement on Form S-4
(File No. 333-235301) filed on November 27, 2019 and refer to your
pipeline table on
page 180. Please either identify the "undisclosed" and "early stage
cancer" indications or
remove them from the pipeline table. The table is intended to provide
information about
your product candidates in development that are material to your
company. Unless an
indication and a compound have been identified, the product is too
preliminary for
inclusion in the table.
13. We note that you have incorporated by reference your Registration
Statement on Form S-4
(File No. 333-235301) filed on November 27, 2019 and refer to your
discussion of the
completed Phase I studies in 214 cancer patients on page 181. To the
extent a drug-
related serious adverse event has occurred, or an event the
investigator could not
determine was unrelated to treatment, please clearly disclose the
event and the number of
affected patients.
General
14. It appears you are not eligible to conduct this offering on Form S-3
because you do not
meet the conditions outlined in General Instruction I.A.6 of Form S-3.
In this regard, we
note that Sonnet BioTherapeutics, Inc. was deemed to be the accounting
acquirer for
financial reporting purposes in your business combination and the
financial statements of
Sonnet BioTherapeutics, Inc. have not been included in materials
required to be filed
pursuant to Section 13, 14 and 15(d) for a period of at least twelve
calendar months
immediately preceding the filing of the registration statement on Form
S-3. Please refile
this offering on Form S-1. When you refile, please also consider your
eligibility to
incorporate by reference. See General Instruction VII of Form S-1.
Pankaj Mohan, Ph.D.
Sonnet BioTherapeutics Holdings, Inc.
May 19, 2020
Page 4
15. We note that you are registering 29,487,330 shares of common stock for
resale by the
selling stockholders, including approximately 24 million shares pursuant
to the reset
provisions of the Series A warrants and Series B warrants. Given the size
of the resale
offering relative to the outstanding shares of common stock held by
non-affiliates, it
appears that this transaction may be an indirect primary offering by or
on behalf of the
company. Please provide us with your legal analysis as to why the
transaction covered by
the registration statement should be regarded as a secondary offering
that is eligible to be
made on a delayed or continuous basis under Rule 415(a)(1)(i) of the
Securities Act. For
guidance, please refer to Question 612.09 of the Securities Act Rules
Compliance and
Disclosure Interpretations. In discussing the circumstances under which
the investors
received the shares, address in your response the investors' acquisition
of the additional 24
million shares.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Eric Atallah at 202-551-3663 or Brian Cascio at
202-551-3676 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Jeffrey Gabor at 202-551-2544 or Christine Westbrook at 202-551-5019
with any other
questions.
Sincerely,
FirstName LastNamePankaj Mohan, Ph.D.
Division of
Corporation Finance
Comapany NameSonnet BioTherapeutics Holdings, Inc.
Office of Life
Sciences
May 19, 2020 Page 4
cc: Steven M. Skolnick, Esq.
FirstName LastName