As filed with the Securities and Exchange Commission on January 22, 2001
Registration Statement No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
IMMTECH INTERNATIONAL, INC.
(Exact name of Registrant as Specified in Its Charter)
Delaware 39-1523370
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
150 Fairway Drive, Suite 150,
Vernon Hills, Illinois 60061
(847) 573-0033
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
T. Stephen Thompson, President
150 Fairway Drive, Suite 150,
Vernon Hills, Illinois 60061
(847) 573-0033
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent for Service)
Copy to:
John F. Fritts, Esq.
Cadwalader Wickersham & Taft
100 Maiden Lane
New York, New York 10038-4892
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
-------------------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
--------------------------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
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CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SHARES AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(1) PRICE(1) FEE
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Common Stock, par 584,250 shares $10.3125 $6,025,078.10 $1,506.27
value $0.01 per
share
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the low bid and high
asked prices of the common stock on the NASDAQ National Market System on
January 16, 2001.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
=======--=======================================================================
PROSPECTUS
584,250 SHARES
[LOGO] IMMTECH INTERNATIONAL, INC.
COMMON STOCK
------------------------------
Stockholders of Immtech International, Inc. (the "Company"), named under the
caption "Selling Stockholders" may offer and sell up to 584,250 shares of the
Company's common stock. The Company will receive no proceeds from the shares of
common stock offered by this prospectus.
INVESTING IN THE COMPANY'S COMMON STOCK IS RISKY. SEE "RISK FACTORS" ON PAGE
5.
The Selling Stockholders may offer their shares at prevailing market prices
in public transactions on the NASDAQ National Market System or in privately
negotiated transactions. No period of time has been fixed within which their
shares may be offered or sold.
The Company's common stock is traded on the NASDAQ National Market System
under the symbol "IMMT". The closing bid price of the Company's common stock on
January 16, 2001, was $10.4375.
The address of the Company's principal executive offices is 150 Fairway
Drive, Suite 150, Vernon Hills, Illinois 60061, and the Company's telephone
number is (847) 573-0033.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is January 22, 2001.
TABLE OF CONTENTS
WHERE YOU CAN FIND MORE INFORMATION..........................................1
THE COMPANY..................................................................2
Strategy..................................................................3
Pharmaceutical Products - Dications.......................................3
Oral Drug Delivery.....................................................4
Compound DB-289........................................................4
Cryptosporidiosis Program..............................................4
Anti-Fungal Program....................................................5
Tuberculosis Program...................................................5
Trypanosomiasis (African Sleeping Sickness) Program....................5
Leishmaniasis Program..................................................5
Cancer Program.........................................................6
Grant From the Bill and Melinda Gates Foundation.......................6
Biological Products.......................................................6
RISK FACTORS.................................................................6
The Company is a Development Stage Company, and There is No
Assurance that the Company will Successfully Develop a
Commercially Viable Product............................................6
The Company has a History of Losses and Accumulated Deficits. The
Company's Future Profitability is Uncertain............................7
The Company's Latest Annual Report Contains a "Going Concern"
Qualification..........................................................7
The Company has a Need for Substantial Additional Funds...................7
The Company's Advanced Product Candidates are in Early Stage
Clinical Trials........................................................7
There are Substantial Uncertainties Related to Clinical Trials............7
The Company has had Possible Conflicts of Interests.......................8
The Company has Limited Manufacturing Capability..........................8
The Company is Dependent on Third Party Relationships.....................8
The Company is Uncertain about its Ability to Protect or Obtain
Necessary Patents and Proprietary Information..........................9
The Company's Business has Significant Competition; The Company's
Product Candidates May Become Obsolete prior to Commercialization
Due to Alternative Technologies.......................................10
There is No Assurance that the Company will Receive FDA Approval for
any of its Product Candidates; Government Regulation May Impede,
Delay or Prevent the Commercialization of the Company's Product
Candidates............................................................10
The Company is Dependent on Key Personnel................................11
There is Uncertainty Regarding the Availability of Health Care
Reimbursement for Purchasers of the Company's Anticipated
Products; Health Care Reform May Negatively Impact the Ability of
Prospective Purchasers of Potential Company Products to Pay for
Such Products.........................................................11
There is a Risk of Product Liability, and Uncertainty Regarding the
Availability of Product Liability Insurance on Acceptable Terms.......11
Disclosure Regarding Potential Future Acquisitions or Business
Combinations..........................................................12
Potential Adverse Effect of Shares Eligible for Future Sale..............12
Potential Adverse Effect of Outstanding Common Stock Options and
Warrants..............................................................12
The Company Does Not Pay Dividends.......................................12
The Market Price of the Company's Common Stock May Experience
Significant Volatility................................................12
There are Limitations on the Liability of the Company's Directors,
and the Company may have to Indemnify its Officers and Directors
in Certain Instances..................................................13
RECENT DEVELOPMENTS.........................................................13
FORWARD-LOOKING STATEMENTS..................................................14
USE OF PROCEEDS.............................................................14
SELLING STOCKHOLDERS........................................................15
PLAN OF DISTRIBUTION........................................................16
DESCRIPTION OF SECURITIES...................................................17
General..................................................................17
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Common Stock.............................................................17
Preferred Stock..........................................................17
Registration Rights Agreements...........................................17
Transfer Agent, Registrar and Warrant Agent..............................18
Certain Provisions of the Delaware General Corporation Law...............18
REPORTS TO STOCKHOLDERS.....................................................19
SHARES ELIGIBLE FOR FUTURE SALE.............................................19
LEGAL MATTERS...............................................................19
EXPERTS.....................................................................19
GLOSSARY....................................................................20
PART II INFORMATION NOT REQUIRED IN PROSPECTUS.............................22
SIGNATURES..................................................................25
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. NO DEALER,
SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE INFORMATION THAT IS NOT
CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT
SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR
SALE IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT
ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF THE DELIVERY
OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.
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WHERE YOU CAN FIND MORE INFORMATION
Immtech International, Inc., has filed a registration statement on Form S-3
with the Securities and Exchange Commission in connection with this offering. In
addition, the Company files annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy the registration statement and any other documents filed
by the Company at the Securities and Exchange Commission's Public Reference Room
at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the Securities
and Exchange Commission at 1-800-SEC-0330 for further information on the Public
Reference Room. The Company's Securities and Exchange Commission filings are
also available to the public at the Securities and Exchange Commission's
Internet site at "http//www.sec.gov." In addition, reports, proxy statements and
other information concerning the Company may be inspected at the offices of the
NASDAQ National Market System, 1735 K Street, N.W., Washington, D.C. 20549, on
which the Company's common stock is quoted.
This prospectus is part of the registration statement and does not contain
all of the information included in the registration statement. Whenever a
reference is made in this prospectus to any contract or other document of
Immtech International, Inc., the reference may not be complete and you should
refer to the exhibits that are a part of the registration statement for a copy
of the contract or document.
The Securities and Exchange Commission allows the Company to "incorporate by
reference" into this prospectus the information the Company files with it, which
means that the Company can disclose important information to you by referring
you to those documents. Information incorporated by reference is part of this
prospectus. Later information filed with the Securities and Exchange Commission
will update and supersede this information.
The Company incorporates by reference the documents listed below and any
future filing made with the Securities and Exchange Commission under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
until this offering is completed:
Annual Report on Form 10-KSB for fiscal year ended March 31, 2000.
Quarterly Report on Form 10-QSB for quarter ended June 30, 2000.
Quarterly Report on Form 10-QSB for quarter ended September 30, 2000.
You may request a copy of these filings, at no cost,
by contacting the Company at:
Immtech International, Inc.
150 Fairway Drive, Suite 150
Vernon Hills, Illinois 60061
Attention.: Gary C. Parks
Telephone No.: (847) 573-0033
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THE COMPANY
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE INFORMATION PROVIDED
UNDER "RISK FACTORS." A GLOSSARY BEGINS ON PAGE 20 WHICH DEFINES VARIOUS TERMS
USED IN THIS PROSPECTUS.
Immtech International, Inc. (the "Company" or "Immtech"), a development stage
enterprise, is a biopharmaceutical company focused on the discovery, development
and commercialization of products for the treatment of patients afflicted with
infectious diseases (such as fungal, parasitic, bacterial and viral diseases),
compromised immune systems (such as HIV-infected persons), or cancer. Since
formation in October, 1984, the Company has engaged in developing the research
programs described in this Prospectus, recruiting outside directors, scientific
advisors and key scientists, negotiating and consummating technology licensing
agreements, as well as sponsoring various research and development activities.
The Company follows a business strategy of utilizing the expertise and resources
of third parties in a number of areas, including the conduct of laboratory
research and preclinical and clinical trials, the manufacture of pharmaceutical
and therapeutic compounds and products, and the execution of its corporate
strategies, which may also include the marketing, sale and distribution of any
products. The Company currently licenses several patents and patent applications
and other technologies from third parties that are integral to the Company's
products and business.
The Company has two programs for developing new drugs, a pharmaceutical
program and a biological program. The Company's pharmaceutical program is the
Company's main program and focuses primarily on the development and
commercialization of drugs to treat fungal, parasitic, bacterial and viral
diseases. This program is based on a technology for the design of a class of
pharmaceutical compounds referred to as dications, and is described in more
detail below. The Company's biological program focuses on developing products
for treating cancer and related diseases. The Company's biological program is
focused on the development of a naturally occurring protein called modified
C-reactive protein ("mCRP"). The protein, when used as a therapy in both animal
studies and human clinical trials, stimulated the production of the body's
immune cells, which combat infectious diseases and cancer. This program is
operated through a joint venture. There is currently litigation between the
Company and its principal joint venture partner, which has caused the program to
be delayed pending resolution of the litigation.
The Company is at an early stage of clinical drug development activities,
which are required for regulatory approval and drug commercialization. The
Company has generated no revenue to date from product sales. The Company does
not have any therapeutic products currently available for sale, and none are
expected to be commercially available for several years, if at all. There can be
no assurance that the research that the Company funds and manages will lead to
the development of commercially viable products.
All new drugs and biological products, including the Company's product
candidates, are subject to extensive and rigorous regulation by the federal
government, principally the U.S. Food and Drug Administration (the "FDA") under
the Federal Food, Drug and Cosmetic Act, and other laws including, in the case
of biological products, the Public Health Services Act, and by state and local
governments. The Company has not received regulatory approval in the United
States or any foreign jurisdiction for the commercial sale of any of its
products. To obtain required regulatory approvals for the commercial sale of its
products, the Company must demonstrate through clinical trials that such
products are safe and effective for use in each target application. The
Company's ability to conduct clinical trials and its ability to commercialize
its products will depend in part upon its ability to manufacture its products
either directly or through third parties at a competitive cost and in accordance
with FDA and other regulatory requirements. All the Company's products,
including compound DB-289, require clinical testing, regulatory approval and
development of marketing and distribution channels, all of which are expected to
require substantial additional investment prior to commercialization.
There can be no assurance that the Company's products will be successfully
developed, prove to be safe and effective in human clinical trials, meet
applicable regulatory standards, be capable of being produced in commercial
quantities at acceptable costs, be eligible for third party reimbursement from
governmental or private insurers, be successfully marketed, or achieve market
acceptance.
The Company's ability to commercialize its product candidates will depend in
part on the extent to which reimbursement for the costs of such product will be
available from government health administration authorities, private health
insurers, and others.
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STRATEGY
The Company's long-term strategy for its pharmaceutical program is to develop
a broad product line by utilizing the technology for making pharmaceutical
dication products, which was developed by affiliated scientists. The scientists
affiliated with the Company for this purpose are from the University of North
Carolina at Chapel Hill, Duke University, Auburn University, and Georgia State
University (collectively, the "Consortium"). The initial two objectives of the
pharmaceutical program are to (1) commercialize compounds known as dications in
niche markets by gaining fast-track approvals from the U.S. Food and Drug
Administration (the "FDA"), and (2) demonstrate the effectiveness of the
dication technology and expand the program to identify new potential drugs for
other infectious diseases, beginning with the Company's development of a new,
orally administered, anti-fungal drug. The Company will continue to develop
other treatments for infectious diseases that afflict large populations through
funding provided by the Bill and Melinda Gates Foundation and through funding
from other grants which the Company will endeavor to obtain.
The Company's short-term strategy is to (i) further develop compound DB-289,
which has shown efficacy against PNEUMOCYSTIS CARINII pneumonia ("PCP"), a
specialized form of fungi common in patients with compromised immune systems,
and Trypanosomiasis, a parasitic disease; (ii) complete its Phase I human
clinical trial of compound DB-289 and begin a Phase II human clinical trial of
compound DB-289 for PCP and Trypanosomiasis; and (iii) leverage its resources
through strategic joint ventures to quickly and fully develop the Company's
product pipeline.
The Company intends to continue to conduct independent research and to fund
research by third parties, and to utilize joint ventures and other forms of
collaborative programs for product research, development, testing, manufacturing
and marketing. The Company considers its current collaborative relationships
significant to the successful development of its business and believes that it
will enter into arrangements in the future to research, develop, test,
manufacture and market not only the drug product candidates on which it is
currently focusing, but also those future drug products which it expects to
develop and commercialize.
PHARMACEUTICAL PRODUCTS - DICATIONS
The Company's pharmaceutical program is based on a technology for the design
of a class of pharmaceutical compounds referred to as dications. The technology
for developing dications is the result of a research program focused on
understanding how dications bind to the DNA of infectious micro-organisms.
Dicationic compounds have two positively charged ends held together by a
chemical linker. The structure of the compounds, with positive charges on the
ends (shaped like molecular barbells), allows them to bind to the negatively
charged surface in certain areas of the organism's DNA (like a bandaid),
preventing enzymes necessary to sustain the life of the organism from attaching
to the DNA's active sites. Research has shown that once a site is occupied by
one of these compounds, and a necessary enzyme cannot bind to the DNA, the
organism is prevented from dividing, thereby stopping the spread of the related
disease by inhibiting or killing the growth of the organism. This may result in
the body's return to normal health.
Pentamidine (a drug marketed by several pharmaceutical companies) was the
prototype drug used by researchers at UNC to understand the mechanism by which
dications work. Although the people who take this drug sometimes experience
toxic side effects, Pentamidine is effective for the treatment of PCP, and it is
also used to treat the early stages of Trypanosomiasis (also known as African
Sleeping Sickness). Researchers at the University of North Carolina at Chapel
Hill discovered that most of Pentamidine's toxic side effects were caused by
certain chemical substances formed as the drug breaks down within the body. This
discovery led the researchers to design new compounds with more stable molecular
structures which, the Company believes, are less likely to break down into toxic
substances that may cause side effects. These newly designed compounds proved,
in animal studies, to be less toxic and more effective in treating PCP than
Pentamidine. The methodology used by these researchers to develop these new
compounds evolved into the technology for designing dicationic compounds. The
Company believes that pharmaceutical dications can be designed to inhibit the
growth of a wide variety of infectious organisms which cause fungal, parasitic,
bacterial and viral diseases.
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The Company has an agreement (the "Consortium Agreement") with the University
of North Carolina at Chapel Hill ("UNC") acting on behalf of the Consortium
(which consists of UNC, Duke University, Auburn University and Georgia State
University), and with Pharm-Eco Laboratories, Inc. ("Pharm-Eco"), regarding the
continuing development and commercialization of the technology underlying the
Company's dicationic product candidates. In addition, license rights to
compounds developed by the Consortium prior to 1997, which were previously
licensed to Pharm-Eco, are to be transferred to Immtech pursuant to the
Consortium Agreement. In accordance with the Consortium Agreement, the Company
has contractual rights to the technology for making dicationic pharmaceutical
products using an existing library of over 1,000 compounds developed by the
Consortium as well as compounds to be developed by the Consortium in the future.
The Company considers its relationship with the Consortium, whose members employ
many of the world's leading experts in opportunistic infections and in designing
drugs using computer modeling to predict how compounds bind to and interact with
the DNA of infectious micro-organisms, to be a substantial asset. Members of the
Consortium have laboratory testing systems for screening compounds for activity
to specific micro-organisms (using both laboratory and animal models).
Additionally, Georgia State University has years of experience and proprietary
computer modeling technology which can be used to simulate the binding of
dicationic compounds to DNA, which facilitates the work of research chemists in
designing dicationic compounds to treat specific infections. The Consortium is
using the dication technology to design new pharmaceutical compounds, including
compound DB-075 and compound DB-289, which the Company is trying to develop into
treatments for a wide variety of infectious diseases, as described further
below.
ORAL DRUG DELIVERY
Researchers within the Consortium have developed a proprietary technology (to
which the Company has rights under the Consortium Agreement) for delivering
dications orally so that they are able to enter the body's blood circulatory
system. Dication compounds as a group have limited oral usefulness due to the
positive charges on the outer edges of the molecule, greatly reducing their
movement across membranes in the digestive system into the bloodstream. However,
the researchers in the Consortium have developed and patented several novel
approaches for temporarily masking the positive charges, thereby allowing the
molecules to move across the digestive membranes and into the bloodstream. The
Consortium's research shows that once the molecules enter the bloodstream, the
masking charges are removed by naturally occurring enzymes present in the blood.
The Consortium's research further shows that the active drug is thereby
effectively released throughout the body and can interact with the infectious
micro-organism it is targeted against.
COMPOUND DB-289
Compound DB-289 was developed as an oral substitute for the drug Pentamidine,
which is currently used to treat PCP and Trypanosomiasis. Pentamidine is
administered via slow intravenous infusion or inhalation due to its inability to
cross membranes in the digestive system into the bloodstream, and it is
generally administered in a hospital setting at substantial cost. Compound
DB-289 has had its positive charges neutralized (as described above under "Oral
Drug Delivery") to enable compound DB-289 to cross membranes in the digestive
system into the bloodstream. Compound DB-289 was also designed with a more
stable molecular structure which delivers more drug to the infected site and
reduces toxicity to the patient, which toxicity is caused by chemical substances
produced when the body breaks down the drug. Once compound DB-289 enters the
circulatory system, naturally occurring enzymes in the blood remove the patented
masking or neutralizing charges, thereby releasing the active drug. The Company
believes that since a drug derived from compound DB-289 could be given orally,
patients would be able to take it themselves outside of a hospital setting,
which would make it particularly practical for use in third world countries with
scarce medical resources, as well as substantially less expensive to use than
Pentamidine.
CRYPTOSPORIDIOSIS PROGRAM
The Company is developing compound DB-075 to treat Cryptosporidiosis, which
is recognized around the world as one of the most common infections of the
intestinal tract. Currently, no drug is available in the market to treat this
disease. Compound DB-075 is designed to block a key enzyme from attaching to the
DNA of the Cryptosporidium micro-organism, thus inhibiting or stopping the
growth of the micro-organism. The Company
-4-
believes that compound DB-075 is unique because it works directly in the
intestinal tract with only small amounts being absorbed into the circulatory
system, thereby substantially reducing the possibility of adverse side effects.
ANTI-FUNGAL PROGRAM
Immtech's primary research focus within the pharmaceutical research program
is on the development of a new anti-fungal drug with broad spectrum
effectiveness, I.E., effectiveness against the three most common strains of
fungi which are Candida, Aspergillus, and Cryptococcus. During 2000 the Company
screened a series of new compounds for IN VITRO effectiveness against the three
strains of fungi. The researchers identified several new compounds with
excellent effectiveness. In addition, a group of compounds were tested in an IN
VIVO mouse model and several compounds showed effectiveness against Candida
similar to Flucanazol (a drug used to treat fungal disease).
TUBERCULOSIS PROGRAM
The World Health Organization has declared tuberculosis a global public
health emergency. Tuberculosis is the world's number one killer among infectious
diseases and the cause of over 3 million deaths per year. The Center for Disease
Control (the "CDC") reports that about 2 billion people, including 15 million
Americans, are infected with Mycobacterium tuberculosis ("TB"). The disease is
spreading rapidly in Asia, Africa, and South America, and is becoming
increasingly problematic in developed countries since the TB bacteria, like all
bacteria, over time develops resistance to the drugs used to combat it. Japan
recently declared TB as the country's most threatening disease because a large
number of the Japanese population is infected with it. Even the U.S. is seeing
an alarming trend in TB cases. The combination of the rapid spread of the
disease and the development of multi-drug resistance strains of TB makes it a
major health threat throughout the world.
The Company is a party to a collaborative research program with the Institute
for Tuberculosis Research at the College of Pharmacy of the University of
Illinois at Chicago to screen compounds in an effort to identify new drugs to
combat both the common and the drug-resistant strains of TB. The collaborative
research efforts are focused on dicationic compounds which bond to the DNA of
bacteria and block the flow of life-sustaining enzymes. In the fall of 2000 the
Company had IN VIVO tests performed to determine the efficacy of compound DB-289
and several other dication compounds against TB. These tests, conducted in mice,
showed that compound DB-289 prevented further growth of the TB bacteria at a
dose that was not toxic to the mice.
TRYPANOSOMIASIS (AFRICAN SLEEPING SICKNESS) PROGRAM
The World Health Organization estimates that 55 million people in Central
Africa are at risk for Trypanosomiasis, a parasitic disease spread by tsetse
flies. Based on the last survey conducted by the World Health Organization, it
is estimated that there are 300,000 to 500,000 active cases of the disease, with
an "epidemic situation" in the sub-Saharan region of Africa.
Compound DB-289 is an experimental oral treatment for Trypanosomiasis, which
in animal studies has shown to be safe and has improved effectiveness when
compared to Pentamidine, which is currently the standard treatment for early
stages of Trypanosomiasis. Pentamidine, which is administered intravenously, is
not a practical drug for use in rural regions of Africa. A new oral treatment
for treating Trypanosomiasis is needed to stem the epidemic. Compound DB-289 is
currently in a Phase I human clinical trial, and it is planned to commence a
Phase II human clinical trial during 2001.
LEISHMANIASIS PROGRAM
Leishmaniasis is a parasitic disease that affects more than 15 million people
in tropical and arid countries worldwide. Leishmaniasis is caused by a parasite
harbored in rodents and certain primates, and is transmitted to humans by
sandflies. There are many sub-species of the parasite in different regions of
the world, including India, Africa, the Middle East, Russia and South America.
-5-
The Company is part of a research program, sponsored by the Bill and Melinda
Gates Foundation through UNC, for developing new drugs for Leishmaniasis that
includes The London School of Hygiene and Tropical Medicine, of London, England,
Georgia State University, Ohio State, and UNC. Leishmaniasis is also a disease
that affects U.S. soldiers sent to regions of the world where the Leishmania
parasite is prevalent, which results in soldiers returning home to the U.S.
infected with this debilitating disease. The U.S. military could be a potential
purchaser of any drug developed by the Consortium to treat this disease. Immtech
and the researchers involved in the program are committed to developing a safe
and effective oral treatment for this disease.
CANCER PROGRAM
The National Cancer Institute has tested over 550 of the Consortium's
dication compounds for anti-cancer effectiveness. The results show that
approximately 30 dication compounds had effectiveness against different cancer
types and that many of these compounds had activity at low doses, indicating
that they have the potential to be less toxic to the patient than currently used
chemotherapy drugs.
GRANT FROM THE BILL AND MELINDA GATES FOUNDATION
In November 2000 the University of North Carolina at Chapel Hill was given a
$15.11 million grant from the Bill and Melinda Gates Foundation to develop new
drugs for the treatment of Trypanosomiasis (also known as African sleeping
sickness) and Leishmaniasis. The grant will fund a research consortium made up
of many of the experts in these two diseases. In addition, approximately $10
million of such amount will be paid by UNC to the Company for the purpose of
conducting human clinical trials on the compound DB-289 and conducting animal
pre-clinical studies and human clinical trials on another compound selected for
effectiveness against Leishmaniasis. Through the Consortium Agreement, Immtech
has rights to a worldwide license for these compounds that have the potential to
be new drugs.
BIOLOGICAL PRODUCTS
The Company, together with Franklin Research Group, Inc. ("Franklin"), and
certain other parties, formed a joint venture named NextEra Therapeutics, Inc.
("NextEra"), to develop therapeutic products for treating cancer and related
diseases. The Company and Franklin have a research and funding agreement with
NextEra in which Franklin has provided funding of $1,350,000 to NextEra through
March 31, 2000, to fund the scale-up of manufacturing and initiation of Phase I
clinical trials. The Company has contributed to NextEra its technology relating
to its recombinant form of modified blood protein CRP ("rmCRP") as well as use
of its current laboratory facilities, in exchange for 330,000 shares of common
stock of NextEra. During the year ended March 31, 2000, the Company advanced
$135,000 to NextEra to fund its operations. See "Recent Developments."
RISK FACTORS
An investment in the securities offered hereby (the "Shares") involves a high
degree of risk. In addition to the other information contained in this
Prospectus, the following risk factors should be considered carefully in
evaluating the Company and its business before purchasing the Shares.
THE COMPANY IS A DEVELOPMENT STAGE COMPANY, AND THERE IS NO ASSURANCE THAT THE
COMPANY WILL SUCCESSFULLY DEVELOP A COMMERCIALLY VIABLE PRODUCT.
The Company is at an early stage of clinical development activities required
for drug approval and commercialization. Since formation in October 1984, the
Company has engaged in developing the research programs described in this
Prospectus, recruiting outside directors, scientific advisors and key
scientists, negotiating and consummating technology licensing agreements, as
well as sponsoring various research and development activities. The Company has
generated no revenue from product sales. The Company does not have any
therapeutic products currently available for sale, and none are expected to be
commercially available for several years, if at all. There can be no assurance
that the research that the Company funds and manages will lead to the
development of commercially viable products.
-6-
THE COMPANY HAS A HISTORY OF LOSSES AND ACCUMULATED DEFICITS. THE COMPANY'S
FUTURE PROFITABILITY IS UNCERTAIN.
The Company has experienced significant operating losses since its inception
in 1984 and expects to incur operating losses for at least the next several
years as the Company expands its research and development and clinical trial
efforts. As of September 30, 2000, the Company had an accumulated deficit of
$27,640,106.
THE COMPANY'S LATEST ANNUAL REPORT CONTAINS A "GOING CONCERN" QUALIFICATION.
Included in the Company's latest annual report was the Company's independent
auditor's report, dated June 6, 2000, provided on the Company's balance sheet as
of March 31, 1999, and 2000, and the related statements of operations, common
stockholder investment (deficiency in assets) and cash flows for each of the
three years in the period ended March 31, 2000, indicates that the Company is a
development stage enterprise and the deficiency in working capital as of March
31, 2000, and the Company's operating losses since inception, raise substantial
doubt about the Company's ability to continue as a going concern. The Company's
ability to continue to operate will ultimately depend upon the Company attaining
profitability and being able to operate profitably on a consistent basis, which
will not occur for some time and may never occur. In such a situation, the
Company will not be able to continue as a going concern.
THE COMPANY HAS A NEED FOR SUBSTANTIAL ADDITIONAL FUNDS.
The Company's operations to date have consumed substantial amounts of cash.
The negative cash flow from operations is expected to continue and to accelerate
in the foreseeable future. Furthermore, if the Company's cash requirements vary
materially from those now planned because of results of research and
development, results of preclinical and clinical testing, responses to the
Company's grant requests, relationships with possible strategic partners,
changes in the focus and direction of the Company's research and development
programs, competitive and technological advances, the FDA regulatory process and
other factors, then the Company may require substantially more funds than it
currently has available to conduct research and development, preclinical and
clinical testing and to manufacture, or to have manufactured by third parties,
and market, or to have marketed by third parties, its product candidates. The
Company may seek to satisfy its future funding requirements through public or
private offerings of securities, by collaborative or other arrangements with
major pharmaceutical companies, or from other sources. Additional financing may
not be available when needed or may not be available on terms acceptable to the
Company. If adequate financing is not available, then the Company may not be
able to continue as a going concern, or may be required to delay, scale back or
eliminate certain of its research and development programs, to relinquish rights
to certain of its technologies or product candidates, to forego desired
opportunities, or to license third parties to commercialize products or
technologies that the Company would otherwise seek to develop itself. To the
extent the Company raises additional capital by issuing equity securities,
ownership dilution to the purchasers of the Shares, and to all other
stockholders, will result.
THE COMPANY'S ADVANCED PRODUCT CANDIDATES ARE IN EARLY STAGE CLINICAL TRIALS.
All the Company's more advanced products, including DB-289, require clinical
testing, regulatory approval and development of marketing and distribution
channels, all of which are expected to require substantial additional investment
prior to commercialization. There can be no assurance that the Company's
products will be successfully developed, prove to be safe and effective in human
clinical trials, meet applicable regulatory standards, be capable of being
produced in commercial quantities at acceptable costs, be eligible for third
party reimbursement from governmental or private insurers, be successfully
marketed, or achieve market acceptance.
THERE ARE SUBSTANTIAL UNCERTAINTIES RELATED TO CLINICAL TRIALS.
To obtain required regulatory approvals for the commercial sale of its
products, the Company must demonstrate through clinical trials that such
products are safe and efficacious for use in each target indication.
The Company may find, at any stage of its research and development, that
products which appeared promising in preclinical studies or Phase I and Phase II
clinical trials do not demonstrate efficacy in larger-scale clinical trials, and
therefore do not receive regulatory approvals. The results from preclinical
testing and early clinical trials may
-7-
not be predictive of results obtained in later clinical trials and large-scale
testing. Companies in the pharmaceutical and biotechnology industries have
suffered significant setbacks in various stages of clinical trials, even after
promising results had been obtained in earlier trials. Completion of the
Company's clinical trials may be delayed by many factors, including slower than
anticipated patient enrollment, difficulty in securing sufficient supplies of
clinical trial materials or adverse events occurring during clinical trials.
Completion of testing, studies and trials may take several years, and the length
of time varies substantially with the type, complexity, novelty and intended use
of the product. Delays or rejections may be based upon many factors, including
changes in regulatory policy during the period of product development. No
assurance can be given that any of the Company's development programs will be
successfully completed, that any Investigational New Drug application ("IND")
filed with the FDA (or any foreign equivalent which may be filed with the
appropriate foreign authorities) will become effective, or that additional
clinical trials will be allowed by the FDA or other regulatory authorities, or
that clinical trials will commence as planned. There have been delays in the
Company's testing and development schedules to date and there can be no
assurance that the Company's expected testing and development schedules will be
met.
THE COMPANY HAS HAD POSSIBLE CONFLICTS OF INTERESTS.
As of September 30, 2000, Criticare Systems, Inc. ("Criticare"), a
significant stockholder of the Company, owned 8.91% of the outstanding shares of
common stock of the Company. The former President of Criticare, Gerhard J. Von
der Ruhr, served as Chairman of the Company's Board of Directors until his
resignation in March, 1999. The current President of Criticare, Emil Soika,
served as a director of the Company from March, 1999, to December, 2000. The
Company and Criticare have entered into various transactions over the course of
the Company's existence, most recently entering into a letter agreement on June
29, 1998, pursuant to which, in return for Criticare agreeing to pay $150,000 to
the Company, the Company issued 86,207 shares of common stock to Criticare,
granted Criticare an option (which has since expired) to license the Company's
patents and know-how relating to rmCRP for applications in treating Sepsis, and
assigned its rights to certain diagnostic products relating to diabetes and
alcoholism. The Company believes that the foregoing transactions were in its
best interests, were on terms no less favorable to the Company than could be
obtained from unaffiliated third parties, and were in connection with bona fide
business purposes of the Company.
THE COMPANY HAS LIMITED MANUFACTURING CAPABILITY.
The Company's ability to conduct clinical trials and its ability to
commercialize its products will depend in part upon its ability to manufacture
its products either directly or through third parties at a competitive cost and
in accordance with FDA and other regulatory requirements. The Company currently
lacks the facilities and personnel to manufacture products in accordance with
Good Manufacturing Practices ("GMP's") as prescribed by the FDA or to produce an
adequate supply of compounds to meet future requirements for additional clinical
trials and commercialization. There can be no assurance that the Company will be
able to acquire such resources at reasonable costs if it develops commercially
viable products.
THE COMPANY IS DEPENDENT ON THIRD PARTY RELATIONSHIPS.
The Company follows a business strategy of utilizing the expertise and
resources of third parties in a number of areas, including the manufacture of
pharmaceuticals and therapeutics, the conduct of preclinical and clinical
trials, and the development and execution of its corporate strategies. This
strategy creates risks to the Company by placing critical aspects of the
Company's business in the hands of third parties whom the Company may not be
able to control. If these third parties do not perform in a timely and
satisfactory manner, then the Company may incur additional costs and incur
delays in the conduct of its development and clinical programs as it seeks
alternate sources of such products and services, if available. Such costs and
delays may have a material adverse effect on the Company. The Company has formed
NextEra, which is a joint venture corporation with Franklin Research Group, and
the success of NextEra is partially dependent on the performance by Franklin
Research Group of its obligations to NextEra. See "Recent Developments." The
Company has also entered into agreements to secure services and resources from
the Consortium and from Pharm-Eco.
The Company may seek additional third party relationships in certain areas,
particularly in situations in which the Company believes that the clinical
testing, marketing, manufacturing and other resources of a pharmaceutical
company collaborator will enable the Company to develop particular products or
geographic markets which are
-8-
otherwise beyond the Company's resources and/or capabilities. There is no
assurance that the Company will be able to obtain any such collaboration, or any
other research and development, manufacturing, or clinical trial agreement. The
inability of the Company to obtain and maintain satisfactory relationships with
third parties may have a material adverse effect on the Company.
THE COMPANY IS UNCERTAIN ABOUT ITS ABILITY TO PROTECT OR OBTAIN NECESSARY
PATENTS AND PROPRIETARY INFORMATION.
The pharmaceutical and biotechnology fields are characterized by a large
number of patent filings, and a substantial number of patents have already been
issued to other pharmaceutical and biotechnology companies. Third parties may
have filed applications for or have been issued patents and may obtain
additional patents and proprietary rights related to products or processes
competitive with or similar to those which the Company is attempting to develop
and commercialize. The Company may not be aware of all of the patents
potentially adverse to the Company's interests that may have been issued to
others. No assurance can be given that patents do not exist, have not been
filed, or could not be filed or issued, which contain claims relating to the
Company's technology, products or processes. If patents have been or are issued
to others containing preclusive or conflicting claims, then the Company may be
required to obtain licenses to one or more of such patents or to develop or
obtain alternate technology. There can be no assurance that the licenses that
might be required for the Company's processes or products would be available on
commercially acceptable terms, or at all.
Because of the substantial length of time and expense associated with
bringing new products to the marketplace through the development and regulatory
approval process, the biotechnology industry places considerable importance on
patent and trade secret protection for new technologies, products and processes.
Since patent applications in the United States are maintained in secrecy until
patents are issued and since publication of discoveries in the scientific or
patent literature often lag behind actual discoveries, the Company cannot be
certain that it (or any licensor) was the first to make the inventions covered
by pending patent applications or that it (or any licensor) was the first to
file patent applications for such inventions. The patent positions of vaccine
and biotechnology companies can be highly uncertain and involve complex legal
and factual questions, and therefore the breadth of claims allowed in vaccine
and biotechnology patents, or their enforceability, cannot be predicted. There
can be no assurance that any patents under pending patent applications or any
further patent applications will be issued. Furthermore, there can be no
assurance that the scope of any patent protection will exclude competitors or
provide competitive advantages to the Company, that any of the Company's patents
that have been issued or may be issued will be held valid if subsequently
challenged, or that others, including competitors or current or former employers
of the Company's employees, advisors and consultants, will not claim rights in
or ownership to the patents and other proprietary rights held by the Company.
There can be no assurance that others will not independently develop
substantially equivalent proprietary information or otherwise obtain access to
the Company's proprietary information, or that others may not be issued patents
that may require licensing and the payment of significant fees or royalties by
the Company.
The Company currently licenses several patents and patent applications and
other technologies from third parties that are integral to the Company's
products and business. The Company's breach of any existing license agreement or
the failure to obtain a license to technology required to commercialize its
product candidates may have a material adverse effect on the Company.
The biotechnology industry has experienced extensive litigation regarding
patent and other intellectual property rights. The Company could incur
substantial costs in defending itself in suits that may be brought against the
Company claiming infringement of the rights of others or in asserting the
Company's patent rights in a suit against another party. The Company may also be
required to participate in interference proceedings declared by the United
States Patent and Trademark Office for the purpose of determining the priority
of inventions in connection with the patent applications of the Company or other
parties.
Adverse determinations in litigation or interference proceedings could
require the Company to seek licenses (which may not be available on commercially
reasonable terms) or subject the Company to significant liabilities to third
parties, and could therefore have a material adverse effect on the Company. Even
if the Company prevails in an interference proceeding or a lawsuit, substantial
resources of the Company, including the time and attention of its officers, will
be required.
-9-
The Company also relies on trade secrets, know-how and technological
advancement to maintain its competitive position. Although the Company uses
confidentiality agreements and employee proprietary information and invention
assignment agreements to protect its trade secrets and other unpatented
know-how, these agreements may be breached by the other party thereto or may
otherwise be of limited effectiveness or enforceability.
THE COMPANY'S BUSINESS HAS SIGNIFICANT COMPETITION; THE COMPANY'S PRODUCT
CANDIDATES MAY BECOME OBSOLETE PRIOR TO COMMERCIALIZATION DUE TO
ALTERNATIVE TECHNOLOGIES.
The biopharmaceutical field is characterized by extensive research efforts
and rapid technological progress. Competition from other biotechnology
companies, pharmaceutical companies and research and academic institutions is
intense. Other companies are engaged in research and product development based
on the acute phase response of the immune system; adaptive immune response and
antimicrobial compounds. In addition, new developments in molecular cell
biology, molecular pharmacology, recombinant-DNA technology and other
pharmaceutical processes are expected to continue at a rapid pace in both
industry and academia. There can be no assurance that research and discoveries
by others will not render some or all of the Company's programs or products
noncompetitive or obsolete.
THERE IS NO ASSURANCE THAT THE COMPANY WILL RECEIVE FDA APPROVAL FOR ANY OF ITS
PRODUCT CANDIDATES; GOVERNMENT REGULATION MAY IMPEDE, DELAY OR PREVENT THE
COMMERCIALIZATION OF THE COMPANY'S PRODUCT CANDIDATES.
All new drugs and biologics, including the Company's product candidates, are
subject to extensive and rigorous regulation by the federal government,
principally the FDA under the Federal Food, Drug and Cosmetic Act and other laws
including, in the case of biologics, the Public Health Services Act, and by
state and local governments. Such regulations govern, among other things, the
development, testing, manufacture, labeling, storage, premarket clearance or
approval, advertising, promotion, sale and distribution of such products. If
drug products are marketed abroad, they are subject to extensive regulation by
foreign governments. Failure to comply with applicable regulatory requirements
may subject the Company to administrative or judicially imposed sanctions such
as civil penalties, criminal prosecution, injunctions, product seizure or
detention, product recalls, total or partial suspension of production, and FDA
refusal to approve pending applications.
The Company has not received regulatory approval in the United States or any
foreign jurisdiction for the commercial sale of any of its products. The process
of obtaining FDA and other required regulatory approvals, including foreign
approvals, often takes many years and varies substantially based upon the type,
complexity and novelty of the products involved and the indications being
studied. Furthermore, such approval process is extremely expensive and
uncertain. There can be no assurance that the Company's product candidates will
be cleared for commercial sale by the FDA or other regulatory agencies in
foreign countries. The regulatory review process can take many years and the
Company will need to raise additional funds prior to completing such process for
its current product candidates. The failure of the Company to receive FDA
approval for its product candidates would preclude the Company from marketing
and selling its products in the United States. Therefore, the failure to receive
FDA approval would have a material adverse effect on the Company. Even if
regulatory approval of a product is granted, there can be no assurance that the
Company will be able to obtain the labeling claims necessary or desirable for
the promotion of such product. FDA regulations prohibit the marketing or
promotion of a drug for unapproved indications. Furthermore, regulatory
marketing approval may entail ongoing requirements for postmarketing studies. If
regulatory approval is obtained, then the Company will be subject to ongoing FDA
obligations and continued regulatory review. In particular, the Company or its
third party manufacturers will be required to adhere to regulations setting
forth GMPs, which require that the Company or third party manufacturers
manufacture products and maintain records in a prescribed manner with respect to
manufacturing, testing and quality control activities. Further, the Company or
its third party manufacturer must pass a preapproval inspection of its
manufacturing facilities by the FDA before obtaining marketing approval. Failure
to comply with applicable regulatory requirements may result in penalties such
as restrictions on a product's marketing or withdrawal of the product from the
market. In addition, identification of certain side effects after a drug is on
the market or the occurrence of manufacturing problems could cause subsequent
withdrawal of approval, reformulation of the drug, additional preclinical
testing or clinical trials and changes in labeling of the product.
-10-
Prior to the submission of an application for FDA approval, drugs developed
by the Company must undergo rigorous preclinical and clinical testing which may
take several years and the expenditure of substantial resources. Before
commencing clinical trials in humans, the Company must submit to the FDA and
receive clearance of an IND. There can be no assurance that submission of an IND
for future clinical testing of any product under development or other future
products of the Company would result in FDA permission to commence clinical
trials or that the Company will be able to obtain the necessary approvals for
future clinical testing in any foreign jurisdiction. Further, there can be no
assurance that if such testing of products under development is completed, any
such drug compounds will be accepted for formal review by the FDA or any foreign
regulatory body, or approved by the FDA for marketing in the United States or by
any such foreign regulatory bodies for marketing in foreign jurisdictions.
Future federal, state, local or foreign legislation or administrative acts could
also prevent or delay regulatory approval of the Company's products.
THE COMPANY IS DEPENDENT ON KEY PERSONNEL.
The Company's business depends to a significant degree on the continuing
contributions of its key management, scientific and technical personnel. There
can be no assurance that the loss of certain members of management and
scientists would not prevent the Company from executing its business plan. The
Company has no key man life insurance policy on any of its executives.
THERE IS UNCERTAINTY REGARDING THE AVAILABILITY OF HEALTH CARE REIMBURSEMENT
FOR PURCHASERS OF THE COMPANY'S ANTICIPATED PRODUCTS; HEALTH CARE REFORM
MAY NEGATIVELY IMPACT THE ABILITY OF PROSPECTIVE PURCHASERS OF POTENTIAL
COMPANY PRODUCTS TO PAY FOR SUCH PRODUCTS.
The Company's ability to commercialize its product candidates will depend in
part on the extent to which reimbursement for the costs of such product will be
available from government health administration authorities, private health
insurers and others. Significant uncertainty exists as to the reimbursement
status of newly approved health care products. There can be no assurance of the
availability of third-party insurance reimbursement coverage enabling the
Company to establish and maintain price levels sufficient for realization of a
return on its investment in developing vaccines and biological products.
Government and other third-party payors are increasingly attempting to contain
health care costs by limiting both coverage and the level of reimbursement for
new therapeutic products approved for marketing by the FDA and by refusing, in
some cases, to provide any coverage for uses of approved products for disease
indications for which the FDA has not granted marketing approval. If adequate
coverage and reimbursement levels are not provided by government and third-party
payors for uses of the Company's products, then the market acceptance of these
products would be adversely affected.
Health care reform proposals have previously been introduced in Congress and
in various state legislatures and there is no guarantee that such proposals will
not be introduced in the future. The Company cannot predict when any proposed
reforms will be implemented, if ever, or the effect of any implemented reforms
on the Company's business. There can be no assurance that any implemented
reforms will not have a material adverse effect on the Company. Such reforms, if
enacted, may affect the availability of third-party reimbursement for products
developed by the Company as well as the price levels at which the Company is
able to sell such products. In addition, if the Company is able to commercialize
products in overseas markets, then the Company's ability to achieve success in
such markets may depend, in part, on the health care financing and reimbursement
policies of such countries.
THERE IS A RISK OF PRODUCT LIABILITY, AND UNCERTAINTY REGARDING THE AVAILABILITY
OF PRODUCT LIABILITY INSURANCE ON ACCEPTABLE TERMS.
The Company's business exposes it to substantial product liability risks. The
Company plans to obtain product liability insurance covering the sale of its
products prior to their commercial introduction; however, there can be no
assurance that the Company will be able to obtain or maintain such insurance on
acceptable terms or that any insurance obtained will provide adequate coverage
against potential liabilities. Claims or losses in excess of any liability
insurance coverage now carried or subsequently obtained by the Company could
have a material adverse effect on the Company.
-11-
DISCLOSURE REGARDING POTENTIAL FUTURE ACQUISITIONS OR BUSINESS COMBINATIONS.
Although the Company has no current intentions to acquire other businesses or
merge with or into other entities, the trend toward consolidating business
operations, seeking economies of scale, diversifying product offerings and
pursuing operating synergies is one that currently characterizes many
industries, and the biopharmaceutical industry is no exception. If the Company
decides to focus on these benefits, then it may decide to pursue an acquisition
of another entity or some other form of business combination. If the Company
does decide to pursue a transaction of this type, then, except as otherwise
required by law, rules or regulations, the Company currently does not intend to
provide stockholders with information concerning an acquisition or merger
candidate and its business prior to consummation of the transaction. In
addition, because the Company has a very large number of authorized but unissued
shares of capital stock, the Company may decide to use shares of its capital
stock to acquire other businesses. Unless otherwise required by the rules and
regulations governing the NASDAQ National Market System, or the Delaware General
Corporation Law, the Company may use shares of its capital stock to acquire
businesses without stockholder approval.
POTENTIAL ADVERSE EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE.
Sales of common stock (including shares issued upon the exercise of
outstanding options and warrants at exercise prices substantially below the
closing bid price in January 2001) in the public market after this offering
could materially and adversely affect the market price of the Shares. Such sales
also might make it more difficult for the Company to sell equity securities or
equity-related securities in the future at a time and price that the Company
deems appropriate.
As of December 31, 2000, the Company had 5,955,245 shares of common stock
outstanding (not including 458,232 shares of common stock subject to outstanding
options and 2,025,000 shares of common stock subject to outstanding warrants).
Of the shares outstanding, 3,146,823 shares of common stock are freely tradable
without restriction. All of the remaining 2,808,422 shares are restricted
securities within the meaning of the Securities Act of 1933, as amended (the
"Securities Act").
The Company does not anticipate that an active trading market for the common
stock will develop outside the United States. Therefore, any resales of common
stock will likely occur on the NASDAQ National Market System.
POTENTIAL ADVERSE EFFECT OF OUTSTANDING COMMON STOCK OPTIONS AND WARRANTS.
The Company has outstanding options and warrants for shares of its common
stock, which may adversely affect the Company's ability to consummate future
equity financings. Further, the holders of such warrants and options may
exercise them at a time when the Company would otherwise be able to obtain
additional equity capital on terms more favorable to the Company. To the extent
any such options and warrants are exercised, the interests of the Company's
stockholders will be diluted.
THE COMPANY DOES NOT PAY DIVIDENDS.
The Company has never declared or paid dividends on its common stock and does
not intend to pay any dividends in the foreseeable future.
THE MARKET PRICE OF THE COMPANY'S COMMON STOCK MAY EXPERIENCE SIGNIFICANT
VOLATILITY.
The securities markets have from time to time experienced significant price
and volume fluctuations that may be unrelated to the operating performance of
particular companies. In addition, the market prices of the common stock of many
publicly traded pharmaceutical or biotechnology companies have in the past been,
and can in the future be expected to be, especially volatile. Announcements of
technological innovations or new products by the Company or its competitors,
developments or disputes concerning patents or proprietary rights, publicity
regarding actual or potential clinical trial results relating to products under
development by the Company or its competitors, regulatory developments in both
the United States and foreign countries, delays in the Company's testing and
development schedules, public concern as to the safety of vaccines or biological
products and economic and other external factors, as well period-to-period
fluctuations in the Company's financial results, may have a significant
-12-
impact on the market price of the common stock. The realization of any of the
risks described in these "Risk Factors" could have a significant and adverse
impact on such market prices.
THERE ARE LIMITATIONS ON THE LIABILITY OF THE COMPANY'S DIRECTORS, AND THE
COMPANY MAY HAVE TO INDEMNIFY ITS OFFICERS AND DIRECTORS IN CERTAIN INSTANCES.
The Company's Certificate of Incorporation limits, to the maximum extent
permitted by the Delaware General Corporation Law (the "Delaware Law"), the
personal liability of directors for monetary damages for breach of their
fiduciary duties as directors. The Company's Bylaws provide that the Company
shall indemnify its officers and directors and may indemnify its employees and
other agents to the fullest extent permitted by law. The Company has entered
into indemnification agreements with its officers and directors containing
provisions which are in some respects broader than the specific indemnification
provisions contained in the Delaware Law. The indemnification agreements may
require the Company, among other things, to indemnify such officers and
directors against certain liabilities that may arise by reason of their status
or service as directors or officers (other than liabilities arising from willful
misconduct of a culpable nature), to advance their expenses incurred as a result
of any proceeding against them as to which they could be indemnified, and to
obtain directors' and officers' insurance if available on reasonable terms.
Section 145 of the Delaware Law provides that a corporation may indemnify a
director, officer, employee or agent made or threatened to be made a party to an
action by reason of the fact that he was a director, officer, employee or agent
of the corporation or was serving at the request of the corporation, against
expenses actually and reasonably incurred in connection with such action if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The Delaware Law does not permit a corporation to
eliminate a director's duty of care, and the provisions of the Company's
Certificate of Incorporation have no effect on the availability of equitable
remedies, such as injunction or rescission, for a director's breach of the duty
of care.
RECENT DEVELOPMENTS
On or about June 15, 2000, Technikrom, Inc. ("Technikrom"), filed a claim
against the Company with the American Arbitration Association in Chicago,
Illinois. In that proceeding, Technikrom seeks to recover $124,000 in fees,
interest and costs for certain method development services provided to the
Company relating to the purification of a protein known as rmCRP. The Company
intends to vigorously defend the action and has filed a counterclaim against
Technikrom for fraudulent inducement of contract which seeks compensatory
damages of at least $224,000, plus interest and costs. The Company has also
sought a declaratory judgment that Technikrom, inter alia, failed to use its
best efforts to develop a purification method within the time parameters set by
the parties. The parties have engaged an arbitrator and are proceeding with the
arbitration process.
In August, 2000, the Company received two Small Business Innovative Research
("SBIR") grants from The National Institute of Health for an aggregate of
approximately $831,000. The first was a grant for "New Broad Spectrum Drugs for
Opportunistic Infections." The second was a grant for "Novel Prodrugs for the
Treatment of Opportunistic Infections."
On August 18, 2000, the Company became a party to a legal proceeding in the
Court of Chancery of the State of Delaware, in and for New Castle County by
Pharm-Eco Laboratories, Inc., a California corporation ("Pharm-Eco").
-13-
Pharm-Eco amended its complaint on August 21, 2000, to add two individuals,
David J. Wade ("Wade") and Richard Gabriel ("Gabriel"), as co-plaintiffs. Each
of Wade and Gabriel are senior executives of Pharm-Eco and indirect beneficial
owners of Pharm-Eco. Among other relief, Pharm-Eco seeks a declaration from the
court that the shares of the Company's common stock that Pharm-Eco was issued in
July, 1999 (collectively, the "Pharm-Eco Shares"), are freely tradable pursuant
to Rule 144 under the Securities Act ("Rule 144"). The Pharm-Eco Shares were
issued to Pharm-Eco pursuant to the Consortium Agreement. The Company believes
that Pharm-Eco's claims are meritless and that the Pharm-Eco Shares are not yet
tradable pursuant to Rule 144 because Pharm-Eco has failed to comply with the
Consortium Agreement by failing to give the Company all of the consideration to
which the Company is entitled. The Company is vigorously defending the
proceeding, and has filed a counterclaim against Pharm-Eco and certain other
parties. The Company has filed a Motion for Summary Judgement. The plaintiffs
are opposing the motion, but have not filed a counter-motion. A trial date for
the proceeding has been set for March, 2001.
On August 29, 2000, the Company signed a research agreement with the London
School of Hygiene and Tropical Medicine at the University of London to study the
activity of a new series of dication compounds against Leishmaniasis, a
parasitic disease spread by sandflies. The dication compounds will be screened
for activity in an IN VIVO study against several strains of Leishmania.
In September, 2000, the Company entered into a collaborative research program
with the Institute for Tuberculosis Research at the College of Pharmacy at the
University of Illinois at Chicago to screen compounds, focusing on dicationic
compounds, for the potential as a new drug for the treatment of common and
drug-resistant Mycobacterium Tuberculosis.
On October 13, 2000, the Company received regulatory approval in Germany to
begin Phase I human clinical trials in Germany for DB-289.
In November, 2000, the University of North Carolina at Chapel Hill was given
a $15.11 million grant from the Bill and Melinda Gates Foundation to develop new
drugs for treatment of Trypanosomiasis (also known as African sleeping sickness)
and Leishmaniasis. The grant will fund a research consortium made up of many of
the experts in these two diseases. In addition, approximately $10 million of
such amount will be paid by UNC to the Company for the purpose of conducting
human clinical trials on the drug DB-289 and on a new drug for Leishmaniasis.
Through the Consortium Agreement, Immtech has rights to a world wide license for
these drug compounds.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus and in the documents
incorporated by reference herein, constitute "forward-looking statements" within
the meaning of Section 27A of the Securities Act, and Section 21E of the
Exchange Act of 1934, as amended. These forward-looking statements can be
identified by the use of predictive, future-tense or forward-looking
terminology, such as "believes," "anticipates," "expects," "estimates," "may,"
"will" or similar terms. Forward-looking statements also include projections of
financial performance, statements regarding management's plans and objectives
and statements concerning any assumption relating to the foregoing. Certain
important factors regarding the Company's business, operations and competitive
environment which may cause actual results to vary materially from these
forward-looking statements are discussed above under the caption "Risk Factors."
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the Shares
offered hereby.
-14-
SELLING STOCKHOLDERS
On December 8, 2000, pursuant to certain Subscription Agreements between the
Company and the Selling Stockholders (the "Subscription Agreements"), the
Selling Stockholders purchased 584,250 shares of the Company's common stock and
paid the Company approximately $4,674,000.
Pursuant to the Subscription Agreements, the Company agreed to register the
resale by the Selling Stockholders of the Shares issued within 45 days of the
closing date. The registration statement is to be at the Company's expense. The
registration statement, of which this prospectus is a part, is being filed
pursuant to such Subscription Agreements. The following table sets forth for
each Selling Stockholder the total number of shares of common stock being
offered in this offering. Because the Selling Stockholders may offer all, some
or none of their Shares, the Company cannot provide a definitive estimate as to
the number of shares of common stock that they will hold after such offering.
The following table has been prepared on the assumption that all shares of
common stock offered under this prospectus will be sold. None of the following
Selling Stockholders are or were directors or officers of, or have or have had
any material relationship with, the Company, any of its predecessors, or any of
its affiliates over the past three years.
PERCENTAGE OF
AGGREGATE
OUTSTANDING
NUMBER OF SHARES OF NUMBER OF SHARES OF
COMMON STOCK SHARES OF NUMBER OF SHARES OF COMMON STOCK
BENEFICIALLY OWNED COMMON STOCK COMMON STOCK BENEFICIALLY
IMMEDIATELY PRIOR TO BE SOLD IN BENEFICIALLY OWNED OWNED AFTER THE
NAME TO THE OFFERING THE OFFERING AFTER THE OFFERING OFFERING
- ----------------------------------- -------------------- -------------- ------------------- ---------------
China Dragon Limited 290,000 290,000 0 0
Vivienne Lee 51,000 51,000 0 0
Michael L. Keiser & Rosalind C. 25,000 25,000 0 0
Keiser Charitable Trust
Frederick W. Wackerle 40,000 25,000 15,000 .25%
Rick Kash 59,233 20,000 39,233 .66%
Lau Ching Yin Judy /Chan Chee Wing 20,000 20,000 0 0
Chan Tak Chi William 20,000 20,000 0 0
Bernard K. Chiu 20,000 20,000 0 0
Jerome A. Grossman 12,500 12,500 0 0
Falcone Ltd. Partnership 12,500 12,500 0 0
Peter F. Drake 12,500 12,500 0 0
Kevin Bowen 12,000 12,000 0 0
Happy Results Limited 65,000 10,000 55,000 .92%
John M. Kelly 10,000 10,000 0 0
Cheung Shuk Kwan 10,000 10,000 0 0
Stephen D. Chubb 6,250 6,250 0 0
Robert H. Lessin Venture Capital, LLC 6,250 6,250 0 0
Robert D. Scallan 6,250 6,250 0 0
Dr. Levi Hong Kaye Lee 4,000 4,000 0 0
Cheng Ching Jung 4,000 4,000 0 0
Lau Chu 2,000 2,000 0 0
Cheung Yuk Chor Dickie 2,000 2,000 0 0
Lee Shun Lung 1,000 1,000 0 0
Chan Kin Man 1,000 1,000 0 0
Clarence E. McFeely 1,000 1,000 0 0
-15-
PLAN OF DISTRIBUTION
The Company will pay all costs and expenses incurred in connection with the
registration of the Shares offered by this prospectus. Any brokerage commissions
and similar selling expenses attributable to the sale of Shares will be borne by
the Selling Stockholders. Sales of Shares may be effected by the Selling
Stockholders at various times in one or more types of transactions (which may
include block transactions) on the NASDAQ National Market System at the market
price prevailing at the time of each sale or at a negotiated price. Such
transactions may or may not involved brokers or dealers. To the Company's
knowledge, the Selling Stockholders have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of the Shares, nor is there an underwriter or coordinating broker
acting in connection with the proposed sales of Shares by the Selling
Stockholders.
The Selling Stockholders may sell Shares directly to purchasers or to or
through broker-dealers, who may act as agents or principals. These
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or purchasers of the Shares. This
compensation may be in excess of customary commissions.
The Company has agreed to indemnify certain of such Selling Stockholders and
such Selling Stockholders' respective officers, directors, employees and agents,
and each person who controls such Selling Stockholders, in certain circumstances
against certain liabilities, including liabilities arising under the Securities
Act. Such Selling Stockholders have agreed to indemnify Immtech and its
directors and officers in certain circumstances against certain liabilities,
including liabilities arising under the Securities Act.
The Selling Stockholders and any broker-dealers that act in connection with
the sale of Shares might be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act, and any commissions received by all
broker-dealers and any profit on the resale of the Shares sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act.
The Selling Stockholders also may resell all or a portion of the Shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided such sales meet the criteria and conform to the requirements of that
Rule.
-16-
DESCRIPTION OF SECURITIES
GENERAL
The authorized capital stock of the Company consists of (i) 30,000,000 shares
of common stock, $0.01 par value per share, of which 5,955,245 (not including
outstanding options and warrants) shares were issued and outstanding as of
December 31, 2000, and (ii) 5,000,000 shares of preferred stock, $0.01 par value
per share, of which no shares were issued and outstanding.
The following summary of the respective rights of the holders of the capital
stock of the Company is qualified in its entirety by reference to the Company's
Certificate of Incorporation and its Bylaws, as amended to date, where such
rights are set forth in full, copies of which are incorporated by reference into
the Registration Statement of which this Prospectus is a part.
COMMON STOCK
Subject to the rights of the holders of any preferred stock which may be then
outstanding, each holder of common stock is entitled to receive such dividends
as may be declared by the Board of Directors out of funds legally available
therefor, and, in the event of liquidation, dissolution or winding up of the
Company, to share pro rata in any distribution of the Company's assets after
payment or providing for the payment of all liabilities and the liquidation
preference of any outstanding preferred stock. Each holder of common stock is
entitled to one vote for each share held of record on the applicable record date
on all matters presented to a vote of stockholders, including the election of
directors. Holders of common stock have no cumulative voting rights or
pre-emptive rights to purchase or subscribe for any shares of common stock or
other securities of the Company. The shares of common stock have no conversion
rights, are not subject to redemption and are not subject to further calls or
assessments. All outstanding shares of common stock are fully paid and
nonassessable.
PREFERRED STOCK
The Board of Directors is authorized, without any action required of the
stockholders, to provide for the issuance of one or more series of preferred
stock and to fix the designations, preferences, powers and relative,
participating, optional and other rights, qualifications, limitations and
restrictions thereof, including, without limitation, the dividend rate, voting
rights, conversion rights, redemption price and liquidation preference per
series of preferred stock. Any series of preferred stock so issued may rank
senior to the common stock with respect to the payment of dividends or amounts
to be distributed upon liquidation, dissolution or winding up of the Company.
There are no agreements for the issuance of preferred stock and the Board of
Directors has no present intent to issue any preferred stock. The existence of
authorized but unissued preferred stock may enable the Directors to render more
difficult or to discourage an attempt to obtain control of the Company by means
of a merger, tender offer, proxy contest or otherwise. The issuance of preferred
stock could decrease the amount of earnings and assets available for
distribution to holders of common stock and adversely affect the rights and
powers, including voting rights, of such holders and may have the effect of
delaying, deferring or preventing a change in control of the Company.
-17-
TRANSFER AGENT, REGISTRAR AND WARRANT AGENT
The transfer agent and registrar for the common stock of the Company and the
warrant agent for outstanding warrants is ComputerShare Investor Services,
successor in interest to Harris Trust and Savings Bank.
CERTAIN PROVISIONS OF THE DELAWARE GENERAL CORPORATION LAW
Generally, Section 203 of the Delaware General Corporation Law (the "Delaware
Law") prohibits a publicly held Delaware corporation from engaging in a broad
range of business combinations with an "interested stockholder" (defined
generally as a person owing 15% or more of the corporation's outstanding voting
stock) for three years following the date such person became an interested
stockholder unless (i) before the person becomes an interested stockholder, the
transaction resulting in such person becoming an interested stockholder or the
business combination is approved by the board of directors of the corporation,
(ii) upon consummation of the transaction resulting in the stockholder becoming
an interested stockholder, the interested stockholder owns at least 85% of the
outstanding voting stock of the corporation (excluding shares owned by directors
who are also officers of the corporation or shares held by employee stock plans
that do not provide employees with the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender offer or exchange
offer), or (iii) on or after such date on which such person became an interested
stockholder, the business combination is approved by the board of directors and
authorized at an annual or special meeting, and not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting stock excluding
shares owned by the interested stockholders. The restrictions of Section 203 do
not apply, among other reasons, if a corporation, by action of its stockholders,
adopts an amendment to its certificate of incorporation or bylaws expressly
electing not to be governed by Section 203, provided that, in addition to any
other vote required by law, such amendment to the certificate of incorporation
or bylaws must be approved by the affirmative vote of a majority of the shares
entitled to vote. Moreover, an amendment so adopted is not effective until
twelve months after its adoption and does not apply to any business combination
between the corporation and any person who became an interested stockholder of
such corporation on or prior to such adoption. The Company's Certificate of
Incorporation and Bylaws do not currently contain any provisions electing not to
be governed by Section 203 of the Delaware Law.
Section 203 of the Delaware Law may discourage persons from making a tender
offer for or acquisitions of substantial amounts of the common stock. This could
have the effect of inhibiting changes in management and may also prevent
temporary fluctuations in the common stock that often result from takeover
attempts.
Section 228 of the Delaware Law allows any action that is required to be or
may be taken at a special or annual meeting of the stockholders of a corporation
to be taken without a meeting with the written consent of holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted, provided that the certificate of
incorporation of such corporation does not contain a provision to the contrary.
The Company's Certificate of Incorporation contains no such provision, and
therefore stockholders holding a majority of the voting power of the common
stock will be able to approve a broad range of corporate actions requiring
stockholder approval without the necessity of holding a meeting of stockholders.
-18-
Certain provisions of the Company's Bylaws may have the affect of
discouraging certain types of transactions that may involve an actual or
threatened change of control of the Company and encouraging any person who might
seek to acquire control of the Company to negotiate with the Company's Board of
Directors.
REPORTS TO STOCKHOLDERS
Stockholders of the Company will be furnished with annual reports containing
audited financial statements of the Company and such other interim reports as
the Company may determine.
SHARES ELIGIBLE FOR FUTURE SALE
As of December 31, 2000, the Company had 5,955,245 shares of common stock
outstanding. Of the shares outstanding, 3,146,823 shares of common stock are
freely tradable without any restrictions. All of the remaining 2,808,422 shares
are restricted securities within the meaning of the Securities Act. RADE
Management Corporation, a stockholder, has agreed to lock up the 975,000
warrants it had received (some of which it has since transferred to others) for
a minimum of twenty-four months from the date of the Company's initial public
offering, or until April 29, 2001.
In general, under Rule 144, as amended, a person (or persons whose shares are
aggregated), including an affiliate, who has beneficially owned shares for at
least one (1) year (including the contiguous holding period of any prior owner
except an affiliate) is entitled to sell in "broker's transactions" or to market
makers, within any three-month period, a number of shares that does not exceed
the greater of (i) one percent of the then outstanding shares of common stock
(approximately 59,500 shares as of December 31, 2000), or (ii) the average
weekly trading volume in the common stock during the four calendar weeks
preceding the filing of a Form 144 with respect to such sale. Sales under Rule
144 are also subject to certain requirements as to manner of sale, the filing of
a notice with the Securities and Exchange Commission, and the availability of
public information concerning the Company. In addition, a person who is not
deemed to have been an affiliate of the Company at any time during the three (3)
months preceding a sale and who has beneficially owned the shares proposed to be
sold for at least two (2) years (including the contiguous holding period of any
prior owner except an affiliate) would be entitled to sell such shares under
Rule 144(k) without regard to the requirements described above.
Beginning early August, 1999, each employee, officer or director of or
consultant to the Company who purchased their shares pursuant to a written
compensatory plan or contract has been entitled to rely on the resale provisions
of Rule 701 under the Securities Act, which permits nonaffiliates to sell their
Rule 701 shares without having to comply with the public information, holding
period, volume limitation or notice provisions of Rule 144 and permits
affiliates to sell their Rule 701 shares without having to comply with Rule
144's holding period restrictions.
Sales of substantial amounts of the common stock of the Company in the public
market could adversely affect prevailing market prices for the common stock and
the ability of the Company to raise equity capital in the future.
LEGAL MATTERS
Legal matters in connection with the validity of the common stock offered
hereby will be passed upon for the Company by Cadwalader, Wickersham & Taft, New
York, New York.
EXPERTS
The financial statements as of March 31, 2000, and for each of the three
years in the period ended March 31, 2000, included by reference in this
Prospectus and the Registration Statement have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report (which report expresses an
unqualified opinion and includes an explanatory paragraph regarding substantial
doubt about the Company's ability to continue as a going concern.) Such
financial statements have been included by reference based upon the report of
such firm given upon their authority as experts in accounting and auditing.
-19-
GLOSSARY
As used in this Prospectus, the following terms have the meanings set forth
below.
Acute phase response The term used to describe a vast number of
systemic and metabolic changes occurring in the
body immediately after and within the first few
days of any event which threatens the integrity
of healthy tissues.
AIDS Acquired immune deficiency syndrome.
Antigen A substance recognized by (reacting with) an
antibody.
Candida albicans A common, yeast-like fungus, normally
found in the mouth, digestive tract, vagina, and
on the skin of healthy persons. Can cause
infections of internal organs.
CDC The Center for Disease Control.
Cryptococcus neoformans A yeast-like fungus that spreads through the
lungs to the brain, skin, bones and urinary
tract.
Cryptosporidium parvum A parasite that is commonly found in the
intestinal tract of mammals that, in immune
suppressed individuals, can cause chronic,
profuse, watery diarrhea accompanied by fever,
marked weight loss, and enlarged lymph nodes.
DB-075 A drug for the treatment of Cryptosporidium. The
drug is unique because it will work directly in
the digestive tract and not be absorbed into the
circulatory system, substantially reducing the
possibility of adverse side effects.
DB-289 The designation given to the Company's lead
pro-drug, which can be administered orally.
Diabetes A chronic disease characterized by abnormal
insulin secretion from the pancreas. This causes
problems in the metabolism of glucose (sugar).
DNA A type of molecule made up of polymerized
deoxyribonucleotides linked together by
phosphate bonds. The sequence of nucleotides in
the polymer contains the basic information of
life.
FDA U.S. Food and Drug Administration.
GMP Good Manufacturing Practices.
HIV Human immunodeficiency virus (the virus that
causes AIDS).
IND Investigational New Drug Application - a
document required to be filed with the FDA prior
to performing clinical studies on human subjects
in the United States.
IN VITRO Occurring in a contained artificial test system
(i.e., in a test tube).
IN VIVO Occurring inside the body.
Leismaniasis An infection caused by a protozoal parasite that
affects the skin and abdominal organisms,
causing ulcers or skin disorders that resemble
leprosy.
-20-
Mycobacterium tuberculosis A bacterial infection that is transmitted by
breathing in, or eating infected droplets,
usually affecting the lungs, although infection
of other organ systems can occur.
PCP Pneumocystis carinii pneumonia.
Pentamidine An antiprotozoal drug having two positive
charges (i.e., "di cations"), used to treat
Pneumocystis carinii pneumonia, Leismaniasis,
and Trypanosomiasis. The drug is very difficult
to deliver and is potentially toxic if not
administered properly.
Phase I Clinical testing time in which the safety and
pharmacological profile of a new drug is
established in humans.
Phase II Clinical testing time in which the effectiveness
of a new drug is established in humans. This
includes establishing the dose amount and
frequency required to achieve a therapeutic
effect, the metabolic rate of the administered
drug, and the toxicity profile in specific
patient populations.
Pneumocystis carinii pneumonia (PCP) A type of lung infection found rarely in
the general population but which may occur in
immune suppressed patients. Approximately 80% of
all AIDS patients get PCP at some time during
the course of the AIDS disease.
Sepsis A severe bacterial infection involving the blood
stream.
TB Mycobacterium tuberculosis.
Trypanosomiasis An infection caused by a protozoal parasite and
transmitted usually by insect bites. Also known
as African Sleeping Sickness.
-21-
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the Company's estimates of the expenses to be
incurred by it in connection with the offering of the shares of common stock
being offered hereby:
SEC Registration Fee: $ 1,506.27
Printing expenses:* $ 5,000.00
Legal fees and expenses:* $50,000.00
Accounting fees and expenses:* $ 5,000.00
Miscellaneous expenses:* $ 5,000.00
=========
TOTAL: $66,506.27
- ------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
LIMITATION OF DIRECTOR'S LIABILITY
The Bylaws of the Company (the "Bylaws") eliminates the liability of
directors to the fullest extent permissible under Delaware law. Delaware law
permits a corporation to limit the personal liability of a director to the
corporation or its shareholders for monetary damages for breach of certain
fiduciary duties as a director, provided that the director's liability may not
be eliminated or limited for: (a) breaches of the director's duty of loyalty to
the corporation or its shareholders; (b) acts or omissions not in good faith or
involving intentional misconduct or knowing violations of law; (c) the payment
of unlawful dividends or unlawful stock repurchases or redemptions; or (d)
transactions in which the director received an improper personal benefit. A
director's liability may also not be limited for violation of, or otherwise
relieve the corporation or its directors from the necessity of complying with,
federal or state securities laws or affect the availability of non-monetary
remedies such as injunctive relief or rescission.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company's Bylaws relating to indemnification require that the Company
indemnify its directors and its executive officers to the fullest extent
permitted under Delaware law, provided that the Company may modify the extent of
such indemnification by individual contracts with its directors and executive
officers, and provided further, that the Company will not be required to
indemnify any director or executive officer in connection with a proceeding
initiated by such person, with certain exceptions. Delaware corporate law, the
Company's Bylaws, as well as any indemnity agreements, may also permit
indemnification for liabilities arising under the Securities Act or the
Securities Exchange Act of 1934, as amended.
The Board of Directors has been advised that, in the opinion of the
Securities and Exchange Commission, indemnification of liabilities arising under
the Securities Act is contrary to public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director or officer of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director or officer in connection with the Shares being registered hereby, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is
-22-
against public policy as expressed in the Securities Act, and such claim for
indemnification will be governed by the final adjudication of such issue.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
See Exhibit Index.
ITEM 17. UNDERTAKINGS.
The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities Act,
each filing of the Company's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended, that is incorporated by
reference in the Registration Statement, shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the Company
pursuant to Item 15 of Part II of the Registration Statement, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act, and such claim for
indemnification will be governed by the final adjudication of such issue.
-23-
ITEM 27. EXHIBITS.
EXHIBIT DESCRIPTION
- ------- -----------
4.1(3) Form of Common Stock Certificate.
5.1(5) Opinion of Cadwalader, Wickersham & Taft.
23.1(5) Consent of Deloitte & Touche LLP.
23.2(5) Consent of Cadwalader, Wickersham & Taft (included in Exhibit
5.1).
24.1(4) Powers of Attorney (included on signature page).
- ------------
(1) Included with the Company's Registration Statement on Form SB-2
(Registration Statement No. 333-64393), as filed with the Securities and
Exchange Commission on September 28, 1998.
(2) Included with Amendment No. 1 to the Company's Registration Statement on
Form SB-2 (Registration Statement No. 333-64393), as filed with the
Securities and Exchange Commission on February 11, 1999.
(3) Included with Amendment No. 2 to the Company's Registration Statement on
Form SB-2 (Registration Statement No. 333-64393), as filed with the
Securities and Exchange Commission on March 30, 1999.
(4) Filed herewith.
(5) To be filed by amendment.
-24-
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements of filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, hereunto
duly authorized, on January 22, 2001.
IMMTECH INTERNATIONAL, INC.
By: /s/ T. Stephen Thompson
--------------------------------------
Name: T. Stephen Thompson
Title: President, Chief Executive
Officer and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints T. Stephen Thompson his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and the documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement was signed by the following persons in the
capacities and on the dates stated.
Signatures Title
By: /s/ T. Stephen Thompson President, Chief Executive Officer
------------------------------------ and Director
T. Stephen Thompson (Principal Executive Officer)
/s/ Gary C. Parks Chief Financial Officer, Treasurer
------------------------------------ and Secretary
Gary C. Parks (Principal Financial and Accounting
Officer)
/s/ Byron E. Anderson, Ph.D. Director
------------------------------------
Byron E. Anderson, Ph.D.
/s/ Harvey R. Colten, M.D. Director
------------------------------------
Harvey R. Colten, M.D.
/s/ Eric L. Sorkin Director
------------------------------------
Eric L. Sorkin
By: /s/ T. Stephen Thompson
------------------------------------
T. Stephen Thompson
Attorney-In-Fact
-25-
INDEX TO EXHIBITS
-----------------
EXHIBIT DESCRIPTION
- ------- -----------
4.1(3) Form of Common Stock Certificate
5.1(5) Opinion of Cadwalader, Wickersham & Taft
23.1(5) Consent of Deloitte & Touche LLP
23.2(5) Consent of Cadwalader, Wickersham & Taft (included in Exhibit 5.1)
24.1(4) Powers of Attorney (included on signature page)
(1) Included with the Company's Registration Statement on Form SB-2
(Registration Statement No. 333-64393), as filed with the Securities and
Exchange Commission on September 28, 1998.
(2) Included with Amendment No. 1 to the Company's Registration Statement on
Form SB-2 (Registration Statement No. 333-64393), as filed with the
Securities and Exchange Commission on February 11, 1999.
(3) Included with Amendment No. 2 to the Company's Registration Statement on
Form SB-2 (Registration Statement No. 333-64393), as filed with the
Securities and Exchange Commission on March 30, 1999.
(4) Filed herewith.
(5) To be filed by amendment.
-26-
================================================================================
IMMTECH INTERNATIONAL,
INC.
584,250 SHARES
COMMON STOCK
----------------------------------
PROSPECTUS
----------------------------------
JANUARY 22, 2001
================================================================================