United States securities and exchange commission logo
June 25, 2021
Allen Davidoff
President and Chief Executive Officer
XORTX Therapeutics Inc.
Suite 4000, 421 7th Avenue SW
Calgary, Alberta
Canada T2P 4K9
Re: XORTX Therapeutics
Inc.
Draft Registration
Statement on Form F-1
Submitted May 26,
2021
CIK No. 0001729214
Dear Mr. Davidoff:
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
Cover Page
1. Please clarify whether
your reference to "Public Warrants" in the first paragraph of the
prospectus cover page
is a reference to the Common Share Purchase Warrants being
offered or to different
warrants.
2. We note your statement
that you intend to offer shares at an "assumed public offering
price" which is based
on the last reported price of your common shares on the Canadian
Securities Exchange.
Please revise your disclosure to explain how you will use the trading
price on the Canadian
Securities Exchange to determine the offering price of both your
Allen Davidoff
FirstName LastNameAllen
XORTX Therapeutics Inc. Davidoff
Comapany
June NameXORTX Therapeutics Inc.
25, 2021
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common shares and Common Share Purchase Warrants. Please refer to the
instructions to
Item 501(b)(3) of Regulation S-K which require bona fide pricing
information for
offerings by companies not subject to the reporting requirements of
Section 13(a) or 15(d)
of the Exchange Act.
3. Please revise your description of the compensation to be paid to
A.G.P. to include a
discussion of the compensation warrant discussed on page 137.
Our Proprietary Therapeutic Platforms, page 2
4. Please revise your disclosure here and in Business to explain the
difference between your
"proprietary therapeutic platforms" and your product candidates. Also,
balance your
discussion in this section and in Business to clarify, if true, that
your product candidates
and therapeutic platforms are still in preclinical and clinical
development, the process of
product development is inherently uncertain and any potential
advantages of your product
candidates are speculative. Please also explain to us the basis for
your statement that your
platforms can be used alone, or in combination, with synergistic
activity to develop an
approach to a variety of diseases.
5. Please provide us with the basis for your statement that your
"platforms can be combined
in multiple ways and this synergy can be applied to address acute,
intermittent or chronic
disease progression." In that regard, we note that you have yet to
develop any product
candidates that have advanced to a Phase 3 clinical trial or received
a marketing approval.
6. Please remove your statement here and in Business that you will have
the opportunity to
provide "first-in-class" products.
Prospectus Summary
Overview, page 2
7. Please revise the Prospectus Summary, where appropriate, to briefly
explain the current
regulatory status of oxypurinol and the difference between oxypurinol
and allopurinol.
Please also provide a brief discussion of how your product candidates
differ from
oxypurinol.
8. We note your statements here and throughout the Prospectus Summary,
MD&A and
Business that you are focusing on treating "orphan" indications.
Please refrain from
stating that you are targeting orphan indications unless you have
obtained orphan drug
designation.
9. We note your statement that you "combine the power of oxypurinol with
innovative
therapeutic products existing drugs that can be adapted for different
disease indications
where elevated uric acid is a common denominator." Please revise here
and in Business to
explain what is meant by this sentence and whether you have actually
combined
oxypurinol with other existing drugs to create new product candidates.
We further note your statement that you intend to treat a variety of
serious or life-
Allen Davidoff
FirstName LastNameAllen
XORTX Therapeutics Inc. Davidoff
Comapany
June NameXORTX Therapeutics Inc.
25, 2021
June 25,
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FirstName LastName
threatening diseases. Please revise your disclosure here and
throughout to clarify, if true,
that you have not developed any product candidates to treat diseases
beyond ADPKD,
T2DN and AKI due to coronavirus infection.
Our Strategy, page 3
10. Please revise your statements here and throughout that you will
rapidly and efficiently
advance XRx-008 through Phase 3 clinical development and regulatory
approval. You
may state, if true, that you plan to submit an NDA to the FDA
following the conclusion of
your Phase 3 clinical trial of XRx-008.
Product Candidate Pipeline, page 3
11. We note your statement here and in Business that XRx-008 is in
preparations for a Phase
3 trial, the last stage before FDA approval. Please revise to disclose
whether you have an
active IND for this trial and to clarify that there is no guarantee
that the results from this
trial will be positive or that the FDA will view the results from this
trial to be sufficient
for a marketing approval.
Risk Factors, page 3
12. Please revise to highlight the risk factor discussed on page 54
concerning your belief that
were a PFIC during fiscal 2020 and potential adverse tax consequences
to stockholders.
Implications of Being an Emerging Growth Company, page 5
13. 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.
Implications off Being an Emerging Growth Company, page 5
14. We note the discussion that you qualify as an emerging growth
company as defined in
the JOBS Act. Please revise to disclose in the filing, including MD&A,
whether you
intend to take advantage of the extended transition period allowed for
emerging growth
companies for complying with new or revised accounting guidance as
allowed by Section
107 of the JOBS Act and Section 7(a)(2)(B) of the Securities Act of
1933.
Risk Factors
Our commercial success depends significantly on our ability to operate without
infringing the
patents..., page 35
15. We note your statement that you are aware of third party patents and
patent applications
"containing claims." Please revise your disclosure to clarify if these
claims are directed
towards your product candidates or technology.
Allen Davidoff
XORTX Therapeutics Inc.
June 25, 2021
Page 4
Market, Industry and Other Data, page 60
16. Your statements that you have not independently verified any third
party information may
imply an inappropriate disclaimer of responsibility with respect to
this information. Please
either delete these statements or specifically state that you are
responsible for such
information.
Use of Proceeds, page 61
17. Please revise this section to provide more specificity regarding the
use of proceeds from
the offering including the approximate amount of funds you plan to
allocate toward each
of your three lead product candidates. If the proceeds will not be
sufficient to fund all of
the proposed purposes, disclose the priority of such purposes as well
as the amount and
sources of other funds needed.
Capitalization, page 62
18. We note that you include your statement of financial condition from
page F-4 in the
Capitalization section. Revise to only include capitalization and
indebtedness. If you
present cash, place a double line below the cash line.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Research and Development Expense, page 68
19. We note the increase in your research and development expenses and
from page 73 that
you have multiple products in varying stages of development. Please
revise to provide
more detail for your research and development expenses for each period
presented
including, but not limited to, by product candidate as well as by the
nature of the
expenses. To the extent that you do not track expenses by product
candidate, please
disclose as such.
Business, page 72
20. Please revise your Business section, where appropriate, to discuss the
results of the
clinical trials of your product candidates. In your revisions, please
disclose who conducted
the trial, the phase of the trial, the primary and secondary endpoints
and whether the trial
achieved these endpoints, metrics utilized, the number and nature of
any drug-related
adverse events and the duration of the trial.
Product Candidate Pipeline, page 73
21. Your pipeline chart indicates that XRx-225 has completed preclinical
studies. However,
FirstName LastNameAllen Davidoff
your disclosure on page 79 appears to indicate that XRx-225 still needs
to complete
Comapany NameXORTX
preclinical Therapeutics
studies before Inc.to Phase 1 clinical testing.
Please revise your pipeline
advancing
chart
June 25, 2021toPage
shorten
4 the arrow for XRx-225 to reflect its current development
status or advise.
FirstName LastName
Allen Davidoff
FirstName LastNameAllen
XORTX Therapeutics Inc. Davidoff
Comapany
June NameXORTX Therapeutics Inc.
25, 2021
June 25,
Page 5 2021 Page 5
FirstName LastName
Anticipated clinical development of XRx-008, page 77
22. We note your statement that oxypurinol has not been approved for
marketing anywhere in
the world, though it has previously received FDA review under an NDA
filing. Please
revise to discuss the circumstances of this FDA filing, including who
made the filing and,
if known, why the FDA did not approve the product candidate under
review.
23. We note your statement that if XRx-008 is approved, it would fit well
in combination with
other pulmonary and cardiovascular products. Please revise to provide
the basis for this
statement and to clarify whether XRx-008 has been clinically evaluated
in combination
with other product candidates.
24. We note your statements that you are preparing for a bridging
pharmacokinetic study and
a Phase 3 clinical trial of XRx-008. Please revise to disclose for
each trial who will
conduct the trial, the primary and secondary endpoints, metrics
utilized and the planned
duration of the trial.
Anticipated clinical development of XRx-101, page 78
25. We note your statement that you expect to conduct a Phase 3 pivotal
clinical trial of XRx-
101 to evaluate whether it can attenuate acute tissue injuries in the
setting of COVID-19
infection. Please revise to disclose who will conduct the trial, the
primary and secondary
endpoints, metrics utilized and the planned duration of the trial.
XRx-225, page 78
26. Please revise your disclosure to provide the source for your claim
that T2DN is forecast to
double in the next decades and provide more precision regarding the
time period over
which T2DN is anticipated to double (e.g. next 10 years, 20 years,
etc.).
Strategic Partnerships and Collaborations, page 79
27. Your disclosure on page 44 indicates that you license technology from
the University of
Florida, the University of Washington and Dr. Richard Johnson. Please
revise this
subsection of your Business section to disclose the material terms of
these license
agreements, as well as any other license agreements that are material
to your
business, including:
the technology or product candidates subject to the agreement;
each parties' rights and obligations under the agreement;
quantify all payment made to date;
disclose separately the aggregate amount of all potential
development, regulatory and
commercial milestone payments;
disclose any milestones that you are required to achieve
pursuant to the agreements;
disclose the amount of option fees for additional targets;
quantify the royalty rate, or a range no greater than 10
percentage points per tier;
Allen Davidoff
FirstName LastNameAllen
XORTX Therapeutics Inc. Davidoff
Comapany
June NameXORTX Therapeutics Inc.
25, 2021
June 25,
Page 6 2021 Page 6
FirstName LastName
disclose when royalty provisions expire, if the expiration is
based on a number of
years following commercialization, disclose the number of years;
disclose the expiration date; and
describe any termination provisions.
Please also revise your Prospectus Summary to briefly explain which of
your products and
technology are subject to license agreements. Finally, please file
these agreements as
exhibits to your registration statement.
Competition, page 81
28. Please remove your statement that XRX-008 is a "potent oral uric acid
lowering agent that
does not require hospital administration and has a much superior
safety profile" to
Jynarque. Given the current stage of development of this product
candidate, it appears to
be premature to make this claim.
Similarly, please remove your statements that "XRX-101 will be a more
effective and
better therapy...because it will be both potent and safe" and that
"XRX-225 will be a more
effective and better therapy because it has been shown to be a
powerful and safe uricacid
lowering agent."
Certain Relationships and Related Party Transactions, page 112
29. Please revise your disclosure to provide more specificity regarding
the clinical trials that
are being supported by Prevail including the services that Prevail is
providing, the product
candidates being evaluated and the timing of the clinical trials.
Independent Auditors' Report, page F-2
30. We note that the audit report references Canadian generally accepted
auditing standards
and does not conform to the format required by PCAOB AS 3101. Please
revise to include
financial statements that are audited in accordance with the standards
of the Public
Company Accounting Oversight Board and a report of your independent
registered public
accounting firm that fully complies with the guidance in PCAOB AS
3101.06 through .10
and Article 2 of Regulation S-X. Refer to PCAOB Release No. 2017-001.
31. We reference the disclosure in Note 2 that the consolidated financial
statements have been
prepared in accordance with International Financial Reporting
Standards ( IFRS ) as
issued by the International Accounting Standards Board ( IASB ).
Please have the
auditors revise their report to opine on the financial statements
prepared in accordance
with IFRS as issued by the IASB. Refer to 17(c) of Form 20-F.
32. Please revise such that the title of your financial statements is
consistent with the exact
title included in the auditors' report.
33. Please have your auditors revise the section Material Uncertainty
Related to Going
Concern to reference substantial doubt and comply with the guidance
in PCAOB AS
Allen Davidoff
XORTX Therapeutics Inc.
June 25, 2021
Page 7
2415.12 and .13.
34. The audit report does not present the signature of the audit firm, or
state the date since
which they have served as the Company s auditors. Please revise for
these issues in
accordance with Rule 2-02 of Regulation S-X and AS 3101.
Financial Statements
Note 5. Deposits, page F-13
35. Revise to disclose your accounting treatment for deposits paid in
connection with the
agreements discussed in the Note, including your accounting and valuation
of the shares
issued for the deposit in connection with the private placement. Cite the
accounting
literature used that supports your accounting treatment.
Note 7. Intangible Assets, page F-14
36. Please revise to clarify that your intangible assets relate solely to
licensed intellectual
property. Confirm there are no other individual intangible assets that
are material to your
financial statements. Refer to paragraphs 118-123 of IAS 38.
You may contact Jeanne Bennett at (202) 551-3606 or Mary Mast at (202)
551-3613 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Alan Campbell at (202) 551-4224 or Joe McCann at (202) 551-6262 with
any other
questions.
Sincerely,
FirstName LastNameAllen Davidoff
Division of
Corporation Finance
Comapany NameXORTX Therapeutics Inc.
Office of Life
Sciences
June 25, 2021 Page 7
cc: Anthony W. Epps
FirstName LastName