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BIODEL INC
FORM S-1/A
(Securities Registration Statement)
Filed 04/02/15
Address
Telephone
CIK
Symbol
SIC Code
Industry
Sector
Fiscal Year
100 SAW MILL ROAD
DANBURY, CT 06810
203-796-5000
0001322505
BIOD
2834 - Pharmaceutical Preparations
Biotechnology & Drugs
Healthcare
09/30
http://www.edgar-online.com
© Copyright 2015, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
TABLE OF CONTENTS
As filed with the Securities and Exchange Commission on April 2, 2015
Registration No. 333-202874
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION ​
Washington, DC 20549
​​ ​​
AMENDMENT NO. 1
TO
FORM S-1 ​
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
​​ ​​
BIODEL INC. ​
( Exact name of registrant as specified in its charter ) ​
​​ ​​
​
​
Delaware
(State or other jurisdiction of
incorporation or organization)
​ ​
​ ​
2834
(Primary Standard Industrial
Classification Code Number)
90-0136863
(I.R.S. Employer
Identification No.)
​ ​
​ ​
​
​
100 Saw Mill Road
Danbury, Connecticut 06810
(203) 796-5000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
​​ ​​
Errol De Souza, Ph.D.
President and Chief Executive Officer
Biodel Inc.
100 Saw Mill Road
Danbury, Connecticut 06810
(203) 796-5000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
​​ ​​
Copy to:
​ ​
Michael Grundei
Wiggin and Dana LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901
Telephone: (203) 363-7600
Anna T. Pinedo
Morrison & Foerster LLP
250 West 55th Street
New York, New York 10019
Telephone: (212) 468-8179
Approximate date of commencement of proposed sale to public : From time to time after the effective date of this registration statement, as determined
by the registrant.
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, or the Securities Act, 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 this form is a post-effective amendment filed pursuant to Rule 462(d) 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.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
​​
Accelerated filer
​​
​ ​ Smaller reporting company
Non-accelerated filer
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
​
Proposed
Maximum
Aggregate Offering
Amount to
be
Registered
Title of Each Class of Securities to be Registered
Common Stock, par value $0.01 per share
​ ​
(1)
$34,500,000
​ ​
Price (2)
$34,500,000
Amount of
Registration
​ ​
Fee (2)(3)
$ 4,008.90
​
(1)
Pursuant to Rule 416(a) under the Securities Act of 1933, the registrant is also registering hereunder an indeterminate number of shares that may be issued
and resold resulting from stock splits, stock dividends or similar transactions.
(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) of the Securities Act. Rule 457(o) permits the registration fee to
be calculated on the basis of the maximum offering price of all of the securities listed and, therefore, the table does not specify by each class information as
to the amount to be registered, the proposed maximum offering price per unit or the proposed maximum aggregate offering price.
​
Amount calculated pursuant to Section 6(b) under the Securities Act. Includes $3,486 paid with initial Form S-1 filing.
​(3)
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 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said
​
Section 8(a), may determine.
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The information in this preliminary prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the Securities and
Exchange Commission is effective. This preliminary prospectus is not an offer to sell these
securities and it is not soliciting offers to buy these securities in any state where the offer or
sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 2, 2015
PROSPECTUS
$30,000,000
Biodel Inc.
Common Stock
​
We are offering $30,000,000 of shares of our common stock, par value $0.01 per share. We will receive
all of the net proceeds from this offering.
​
Our common stock is quoted on The Nasdaq Capital Market (“Nasdaq”) under the symbol “BIOD.” On
April 1, 2015, the closing sale price of our common stock, as reported by Nasdaq, was $1.18 per share.
​
Investing in our common stock involves certain risks. Before purchasing our common stock,
please review the information included in, and incorporated by reference into, the “Risk Factors” caption
beginning on page 4 of this prospectus.
​
Per Share
​ ​
Total
​ ​
Public offering price
Underwriting discount
$
$
$
$
Proceeds, before expenses, to us
$
$
The underwriters may also purchase up to $4,500,000 of additional shares of our common stock from
us at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to
cover over-allotments, if any.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
The underwriters expect to deliver the shares to purchasers on or about            , 2015.
Joint Book-Running Managers
William Blair
​​
Ladenburg Thalmann​
Roth Capital Partners
The date of this prospectus is            , 2015.
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TABLE OF CONTENTS
Prospectus Summary
The Offering
Risk Factors
Special Note Regarding Forward-Looking Statements
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3
4
25
Use of Proceeds
Capitalization
Price Range of Common Stock
Dividend Policy
Dilution
27
28
29
30
31
Description of Capital Stock
Underwriting
Legal Matters
Experts
Where You Can Find More Information
Incorporation of Certain Documents by Reference
32
35
38
38
38
38
​
You should rely only on the information contained in or incorporated by reference in this prospectus, or in
any related prospectus supplement, amendment to this prospectus or “free writing prospectus” that we file
with the Securities and Exchange Commission. We have not, and the underwriters have not, authorized
anyone to provide you with different information. We are not making an offer of these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that the information contained in
this prospectus is accurate as of the date on the front of this prospectus only. Our business, financial
conditions, results of operations and prospects may have changed since that date.
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PROSPECTUS SUMMARY
The items in the following summary are described in more detail later in this prospectus or
incorporated by reference into this prospectus from our Annual Report on Form 10-K for the year ended
September 30, 2014, our Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2014 and
our other filings with the Securities and Exchange Commission listed in the section of the prospectus entitled
“Incorporation of Certain Documents by Reference.” This summary provides an overview of selected
information and does not contain all of the information you should consider before buying our common stock.
Therefore, you should read the entire prospectus carefully, especially the “Risk Factors” section beginning on
page 4 and our financial statements and the related notes incorporated by reference into this prospectus from our
Annual Report on Form 10-K for the year ended September 30, 2014, before deciding to invest in our common
stock. References in this prospectus to “Biodel,” “we,” “our,” “us” and other similar terms mean Biodel Inc.,
unless we state otherwise or the context indicates otherwise.
Business Overview
We are a specialty biopharmaceutical company focused on the development and commercialization of
innovative treatments for diabetes that may be safer, more effective and more convenient for patients. We
develop our product candidates by applying our formulation technologies to existing drugs in order to improve
their therapeutic profiles. Our glucagon formulations and presentations are designed to be stable at room
temperature and are intended for use by caregivers with little to no medical training as a rescue treatment for
diabetes patients experiencing severe hypoglycemia, or very low concentrations of blood glucose. Our
proprietary insulin formulations are designed to be more rapid-acting than the formulations currently available to
Type 1 and Type 2 diabetes patients. We refer to these as “ultra-rapid-acting” insulin formulations.
Our lead product candidate is a glucagon emergency management, or GEM, device that is intended to
treat diabetes patients experiencing severe hypoglycemia. GEM is comprised of lyophilized glucagon and an
aqueous diluent in a proprietary injection device from Unilife Medical Solutions, Inc., or Unilife. The GEM
device is a dual-chamber design that automatically reconstitutes lyophilized glucagon immediately prior to
injection and features automatic needle retraction on full dose delivery. We have designed the GEM device with
the goal of optimizing its ease of use for patient caregivers in an emergency.
In the third calendar quarter of 2014, we submitted an Investigational New Drug application, or IND, to
the U.S. Food and Drug Administration, or FDA, for our GEM product candidate. In March 2015, we announced
preliminary results from Study 6-101, a Phase 1 clinical trial comparing the pharmacokinetic, or PK, and
pharmacodynamic, or PD, profiles of BIOD-961, the reconstituted glucagon formulation intended for use in the
GEM device, to marketed glucagon formulations from Eli Lilly and Novo Nordisk. Overall, PK and PD profiles
among all three glucagon formulations were statistically indistinguishable. Based on the results of Study 6-101,
we intend to initiate and complete the pivotal trial for our GEM product candidate by the end of calendar year
2015 and submit a New Drug Application, or NDA, to the FDA in mid-2016.
In addition to our GEM product candidate, we are developing ultra-rapid-acting proprietary insulin
formulations that are designed to be more rapid-acting than the formulations currently available to Type 1 and
Type 2 diabetes patients. For example, BIOD-123, which was evaluated in a Phase 2 clinical trial, combines
recombinant human insulin, or RHI, with our proprietary combination of excipients to increase the rate of
absorption following subcutaneous injection when compared to other commercially available insulin
formulations, including “rapid-acting” mealtime insulin analogs such as Humalog ® , marketed by Eli Lilly,
NovoLog ® , marketed by Novo Nordisk, and Apidra ® , marketed by Sanofi. Similarly, we have developed
BIOD-531, a concentrated ultra-rapid-acting insulin formulation. BIOD-531 contains 400 units of RHI per
milliliter (instead of the standard 100 units per milliliter), and, like BIOD-123, is formulated with
ethylenediaminetetraacetic acid, or EDTA, citrate and magnesium sulfate. When delivered by subcutaneous
injection, BIOD-531 is characterized by a rapid onset of action and a prolonged duration of action, which we
believe could address an unmet medical need for an insulin with an initial rate of absorption superior to that of
existing concentrated insulins and prandial/basal premixed insulins.
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In addition to our RHI-based ultra-rapid-acting insulin formulations, we are using our proprietary
excipients to develop analog-based ultra-rapid-acting insulin formulations using either insulin lispro, the active
pharmaceutical ingredient in Humalog ® , or insulin aspart, the active pharmaceutical ingredient in NovoLog ® .
Recent Developments
On March 16, 2015, we announced positive preliminary results from a Phase 1 clinical trial comparing
BIOD-961, designed for use in our GEM device, to Eli Lilly’s Glucagon Emergency Rescue Kit and Novo
Nordisk’s GlucaGen ® HypoKit TM , which are marketed for the treatment of severe hypoglycemia. The study
was a randomized, single-center, double blind, six-period cross over study in 15 healthy volunteers who received
each glucagon administered subcutaneously and intramuscularly in a randomized treatment sequence. The
objectives of the study were to compare the PK profiles, the PD responses, and the PK/PD relationships of
intramuscular and subcutaneous dosing, as well as to assess safety profiles of the study drugs. Overall, PK and
PD profiles among all three glucagon formulations were statistically indistinguishable. Although this study was
designed as an exploratory comparison of PK and PD profiles, standard regulatory criteria for PK and PD
bioequivalence were satisfied when comparing BIOD-961 to Eli Lilly’s Glucagon Emergency Rescue Kit and
Novo Nordisk’s GlucaGen ® HypoKit TM .
Corporate Information
We were incorporated in the State of Delaware in December 2003. Our principal executive offices are
located at 100 Saw Mill Road, Danbury, Connecticut 06810, and our telephone number is (203) 796-5000. Our
website address is http://www.biodel.com. This reference to our website is intended to be an inactive textual
reference and, except for the documents incorporated by reference as described in the section of this prospectus
entitled “Incorporation of Certain Documents by Reference,” the information on, or accessible through, our
website is not intended to be a part of this prospectus.
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THE OFFERING
The following summary contains basic information about our common stock and the offering and is not
intended to be complete. It does not contain all the information that may be important to you. For a more
complete understanding of our common stock, you should read the section entitled “Description of Capital
Stock” in this prospectus.
Common stock offered by us
$30,000,000 of shares
Common stock to be outstanding
immediately after the offering
50,044,051 shares (1)
Over-allotment option
We have granted the underwriters an option to purchase up to
$4,500,000 of shares of our common stock at a price of $    per
share solely to cover over-allotments, if any. This option is
exercisable, in whole or in part, for a period of 30 days from the date
of this prospectus.
Use of proceeds
We intend to use the net proceeds from this offering primarily for
working capital and general corporate purposes. See “Use of
Proceeds.”
Risk factors
Investing in our common stock involves risks. See “Risk Factors”
beginning on page 4 of this prospectus and any related free writing
prospectus and under “Risk Factors” in our Annual Report on Form
10-K for the year ended September 30, 2014 incorporated by
reference into this prospectus for a discussion of risk factors that you
should carefully consider before making a decision to buy shares of
our common stock in this offering.
Nasdaq symbol
BIOD
(1)
​
The number of shares of our common stock to be outstanding after this offering assumes the issuance
of 25,423,729 shares of common stock at a price of $1.18 per share, the closing sale price of our
common stock on April 1, 2015, is based on 24,620,322 shares of common stock outstanding as of
March 31, 2015 and excludes shares of common stock issuable upon the exercise of outstanding stock
options and warrants and the conversion of outstanding shares of convertible preferred stock.
​
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RISK FACTORS
Investing in our securities involves significant risks. Before making an investment decision, you should
carefully consider the risks and other information we include or incorporate by reference in this prospectus. In
particular, you should consider the risks related to this offering described below. If any of these risks actually
occur, they may materially harm our business, prospects, financial condition and results of operations. In this
event, the market price of our securities could decline and you could lose part or all of your investment.
Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also affect
our business operations.
Risks Related to Our Financial Position and Need for Additional Capital
We have incurred significant losses since our inception. We expect to incur losses for the foreseeable future
and may never achieve or maintain profitability.
Since our inception in December 2003, we have incurred significant operating losses. Our net losses
were approximately $14.1 million for the fiscal year ended September 30, 2014 and approximately $4.7 million
for the three months ended December 31, 2014. As of December 31, 2014, we had a deficit accumulated since
inception of approximately $234.2 million. We have invested a significant portion of our efforts and financial
resources in the development of our RHI- and insulin analog-based ultra-rapid-acting insulin product candidates,
including BIOD-123, BIOD-531, BIOD-238, BIOD-250, and our prior Linjeta™ formulation. More recently, we
have begun to invest an increasing portion of our efforts and financial resources in the development of our GEM
product candidate.
We expect to continue to incur significant operating losses for at least the next several years as we may:
•
conduct the development work necessary to finalize the formulation and design of our GEM
product candidate and undertake manufacturing activities in support our earlier stage clinical trials
with that product candidate;
•
produce registration batches of our GEM product candidate to support the submission of an NDA
with the FDA;
•
conduct later stage clinical trials with our GEM product candidate, including at least one pivotal
clinical trial required for FDA approval of an NDA, and commence targeted commercialization
activities;
•
conduct clinical trials with our BIOD-531 product candidate, including a planned Phase 2 parallel
group study in patients with Type 2 diabetes over a six-month treatment period;
•
conduct the required stability, preclinical and human factors and user acceptability studies to
support the approval of our GEM device and one or more insulin injection devices intended for
use with BIOD-531; and
•
purchase active pharmaceutical ingredients and other materials in support of our product
candidates.
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To become and remain profitable, we must succeed in developing and eventually commercializing
drugs with significant market potential. This will require us to be successful in a range of challenging activities,
including developing proprietary insulin and glucagon product candidates with desirable pharmacokinetic,
pharmacodynamic, stability and injection site toleration characteristics and then successfully completing
preclinical testing and clinical trials for these formulations, obtaining regulatory approval for these formulations
and manufacturing, marketing and selling those products for which we may obtain regulatory approval. We may
never succeed in these activities and may never generate revenues that are significant or large enough to achieve
profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a
quarterly or annual basis. Our failure to become and remain profitable could depress the market price of our
common stock and could impair our ability to raise capital, expand our business or continue our operations. A
decline in the market price of our common stock could also cause you to lose all or a part of your investment.
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We will need substantial additional funding and may be unable to raise capital when needed, which would
force us to delay, reduce or eliminate our product development programs or commercialization efforts.
We are a development stage company with no commercial products. All of our product candidates are
in early stages of development. Our product candidates will require significant additional clinical development,
regulatory approvals and related investment before they can be commercialized. We expect to continue to incur
significant research and development expenses as we continue our formulation work and advance these programs
through clinical trials. Unless we are successful in consummating a strategic partnership to develop and
commercialize an ultra-rapid-acting insulin formulation or a glucagon rescue presentation, we would need to
raise substantial additional capital to develop and commercialize competitive products. Such financing may not
be available on terms acceptable to us, or at all. If we are unable to obtain financing on favorable terms, our
business, results of operations and financial condition may be materially adversely affected.
Based upon our current plans, we believe that our existing cash and cash equivalents will be sufficient
to fund our anticipated operating expenses and capital expenditures at least through the third calendar quarter of
2015. However, we cannot assure you that our plans will not change or that changed circumstances will not result
in the depletion of our capital resources more rapidly than we currently anticipate. Our future capital
requirements will depend on many factors, including:
•
the progress, timing or success of our research and development and clinical programs for our
product candidates, particularly our GEM product candidate and our BIOD-531 product candidate;
•
our ability to conduct the development work necessary to finalize the formulation and presentation
of our GEM product candidate, as well as the preclinical studies, clinical trials and manufacturing
activities necessary to support the submission of an NDA for that candidate;
•
the ability and willingness of our existing strategic partners, service providers and suppliers, upon
which we rely in the advancement of our product candidates, to meet the obligations set forth in
our agreements with them, including Unilife, which is responsible for designing and
manufacturing the device intended for use with our GEM product candidate, as well as delivering
three registration lots of the filled and finished GEM device required for submitting an NDA to the
FDA;
•
the success of our formulation development work to improve the stability of our newer ultra-and
rapid-acting insulin analog-based formulations while maintaining the pharmacokinetic and
injection site toleration characteristics associated with earlier formulations;
•
the results of our real-time stability programs for our glucagon-, RHI-, and insulin analog-based
product candidates, including the reproducibility of earlier, smaller scale, stability studies and our
ability to accurately project long term stability on the basis of accelerated testing;
•
our ability to accurately anticipate technical challenges that we may face in the development of
our glucagon-, RHI-, and insulin analog-based product candidates;
•
our ability to secure approval by the FDA for our product candidates under Section 505(b)(2) of
the Federal Food, Drug and Cosmetic Act, or FFDCA;
•
our ability to enter into collaboration arrangements for the commercialization of our product
candidates and the success or failure of any such collaborations into which we enter, or our ability
to commercialize our product candidates ourselves;
•
our ability to enforce our patents for our product candidates and our ability to secure additional
patents for our product candidates;
•
our ability to protect our intellectual property and operate our business without infringing upon the
intellectual property rights of others;
•
the degree of clinical utility of our product candidates, particularly with regard to our ultra-rapidacting insulin formulations, which have not yet been shown to be clinically superior to existing
rapid-acting insulin analogs;
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the emergence of competing technologies and products and other adverse market developments,
such as advancements in glucagon stabilization technologies that could enable a room-temperature
rescue product in a portable, easy to use presentation;
the ability of our contract manufacturing organizations or collaborators to produce our products in
our final dosage form and in the quantities we may require;
our ability to secure adequate supplies of active pharmaceutical ingredients to support our product
development programs and, if successful, the commercialization of one or more product
candidates;
our capabilities and strategies for manufacturing, marketing and commercializing a product
candidate; and
our ability to accurately estimate anticipated operating losses, future revenues, capital
requirements and our needs for additional financing.
​
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash
needs through public or private equity offerings and debt financings, strategic collaborations and licensing
arrangements. If we raise additional funds by issuing additional equity securities, our stockholders will
experience dilution. Debt financing, if available, may involve agreements that include covenants limiting or
restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or
declaring dividends. Any debt financing or additional equity that we raise may contain terms, such as liquidation
and other preferences, which are not favorable to us or our stockholders. If we raise additional funds through
collaboration, strategic alliance or licensing arrangements with third parties, it may be necessary to relinquish
valuable rights to our technologies or product candidates, future revenue streams, research programs or product
candidates or to grant licenses on terms that may not be favorable to us.
Our independent registered public accounting firm has expressed substantial doubt about our ability to
continue as a going concern, which may hinder our ability to obtain future financing.
Our consolidated financial statements as of September 30, 2014 were prepared under the assumption
that we will continue as a going concern for the next twelve months. Our independent registered public
accounting firm has issued a report that included an explanatory paragraph referring to our recurring and
expected continuing future losses from operations and expressing substantial doubt in our ability to continue as a
going concern without additional capital becoming available. While we may have access to certain amounts of
financing through our At-the-Market Issuance Sales Agreement, or the sales agreement, with MLV & Co., LLC,
or MLV, and our stock purchase agreement with Lincoln Park Capital Fund, LLC, or LPC, there are certain
factors, such as our stock price and ongoing registration obligations, which limit the amount that can be raised in
a short period of time through our agreement with LPC and MLV has no obligation to place any shares of our
common stock under the sales agreement. Our ability to continue as a going concern is dependent upon our
ability to obtain additional equity or debt financing, attain further operating efficiencies, reduce expenditures,
and, ultimately, to generate revenue. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Our short operating history may make it difficult for you to evaluate the success of our business to date and to
assess our future viability.
We commenced active operations in January 2004. Our operations to date have been limited to
organizing and staffing our company, developing and securing our technology and undertaking preclinical studies
and clinical trials of our product candidates. We have limited experience completing large-scale, pivotal clinical
trials and we have not yet demonstrated our ability to obtain regulatory approval to market a product,
manufacture a commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and
marketing activities necessary for successful product commercialization. Consequently, any predictions you
make about our future success or viability may not be as accurate as they could be if we had a longer operating
history.
In addition, as a relatively new business, we may encounter unforeseen expenses, difficulties,
complications, delays and other known and unknown factors. We may need to transition from a company with a
research focus to a company capable of supporting commercial activities. We may not be successful in such a
transition.
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Risks Related to the Development and Commercialization of Our Product Candidates
We have depended heavily on the success of our ultra-rapid-acting mealtime insulin development program.
We have invested a significant portion of our efforts and financial resources in the development of our
ultra-rapid-acting insulin product candidates. The FDA concluded that the results from our completed pivotal
Phase 3 clinical trials of Linjeta™ were not sufficient to obtain marketing approval for the Linjeta™ formulation.
We therefore chose to study newer formulations in earlier stage clinical trials. Clinical trials of our first two new
RHI-based formulations, BIOD-105 and BIOD-107, did not achieve satisfactory results. If we are not able to
develop alternative RHI- or insulin-analog based formulations with desirable pharmacokinetic,
pharmacodynamic, stability and injection site toleration characteristics, or experience significant delays in doing
so, then our business may be materially harmed. For example, while BIOD-531, our lead candidate for a
concentrated ultra-rapid-acting RHI-based formulation, demonstrated pharmacokinetic, pharmacodynamic and
injection site toleration characteristics consistent with our target product profile in two earlier stage, single-dose,
clinical trials, we have not studied BIOD-531 in multi-dose outpatient clinical trials.
The results of our earlier stage clinical trials may not be predictive of results we may generate in later
stage clinical trials, which may be more representative of the product candidate’s intended use as a long-term
therapy. Additionally, we have manufactured a limited number of larger-scale batches of BIOD-531 from which
to generate real-time stability data.
Our development of an RHI- or insulin analog-based formulation may not be successful; some formulations
may have different regulatory requirements to obtain marketing approval from the FDA.
While we have significant experience with the technology we use to develop ultra-rapid-acting insulin
formulations, we cannot assure you that our program to advance RHI- or insulin analog-based formulations will
be successful or will offer improvements over the Linjeta™ formulation that we submitted to the FDA in our
NDA. Some of our formulations offer advantages in terms of injection site toleration, but may not perform as
well as the Linjeta™ formulation in terms of the overall pharmacokinetic and pharmacodynamic profile. Some of
our insulin analog-based formulations under development appear to be absorbed as rapidly as Linjeta™, but are
less stable in accelerated testing. For example, BIOD-238 and BIOD-250 do not demonstrate stability
characteristics consistent with our target product profile. Accordingly, we are continuing our formulation
development work to improve the stability characteristics of our ultra-rapid-acting insulin analog-based
formulations. We may be unable to develop new RHI- or insulin analog-based formulations with
pharmacokinetic, pharmacodynamic, stability and injection site toleration characteristics that are acceptable to us,
a potential strategic partner or the FDA.
Furthermore, the regulatory requirements for any alternate formulation may not meet our expectations
or may be different from those applicable to the formulation of Linjeta™ submitted in our NDA. For example,
advancing any formulation based on an insulin analog may necessitate our conducting additional toxicology work
prior to initiation of clinical trials in the United States. While BIOD-238 and BIOD 250, which are formulated by
adding our proprietary excipients to the marketed presentation of Humalog ® , were the subject of a Phase 1
clinical trial in Australia, we expect that we would need to conduct toxicology studies before advancing our
insulin analog-based formulations into a Phase 1 clinical trial in the United States.
Our development of a glucagon rescue product candidate may not be successful; we have limited experience
with developing drug-device combination products and rely heavily on the performance of third parties
collaborators and consultants.
Our experience with the manufacture, testing and analysis of pharmaceutical preparations of glucagon
in preclinical studies is limited, and we have not yet concluded any clinical trials using glucagon as an active
pharmaceutical ingredient. Additionally, we have never prepared or submitted an NDA to the FDA for a drugdevice combination product, such as our GEM product candidate, and we therefore rely heavily on the expertise
of third-party collaborators and consultants, such as Unilife, which is responsible for the design and the
development phase manufacturing of the GEM device, as well as for the device-specific portions of any NDA we
may submit to the FDA. If we, or our consultants and
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collaborators, do not adequately anticipate or address technical and regulatory challenges that we may face in the
development of our GEM product candidate, our business may be significantly harmed. For example, we have
recently experienced delays in the development work for our GEM product candidate due to the inability of
Unilife to produce registration lots of the final device according to previously projected timelines. As a result, our
plans to submit an NDA for our GEM product candidate have been delayed, and we now anticipate filing an
NDA for our GEM product candidate in mid-2016.
The results of preclinical testing and clinical trials do not ensure success in future clinical trials or
commercial success.
We have completed and released the results of our two pivotal Phase 3 clinical trials of Linjeta™. We
have not completed the development of any products through commercialization. In October 2010, the FDA
notified us that it would not approve our NDA for the Linjeta™ formulation, and we subsequently advanced
alternate formulations, including BIOD-105, BIOD-107, BIOD-123, BIOD-125, BIOD-238, BIOD-250 and
BIOD-531 into the clinic and discontinued development of earlier formulations of Linjeta™. The outcomes of
preclinical testing and clinical trials of our product candidates may not be predictive of the success of future
clinical. For example, despite promising preclinical data, BIOD-105 and BIOD-107 did not meet our preferred
target product profile in Phase 1 clinical trials, and we discontinued development of these formulations. In
addition, interim or preliminary results of a clinical trial do not necessarily predict final results. We cannot assure
you that the clinical trials of any of our product candidates will ultimately be successful. New information
regarding the safety, efficacy, toleration and stability may arise that may be less favorable than the data observed
to date.
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If we are not successful in commercializing any of our product candidates, or are significantly delayed
in doing so, our business will be materially harmed. The commercial success of our product candidates will
depend on several factors, including the following:
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successful completion of preclinical development and clinical trials;
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our ability to identify and enroll patients who meet clinical trial eligibility criteria;
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receipt of marketing approvals from the FDA and similar regulatory authorities outside the United
States;
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establishing that, with regard to our ultra-rapid-acting insulin formulations, the formulations are
well-tolerated in chronic use;
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establishing that, with regard to our GEM product candidate, the commercial presentation can be
administered effectively by patient caregivers with limited or no training;
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establishing commercial manufacturing capabilities through arrangements with third-party
manufacturers;
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launching commercial sales of the products, whether alone or in collaboration with others;
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competition from other products; and
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continued acceptable safety profiles of the products following approval.
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If our clinical trials are delayed or do not produce positive results, we may incur additional costs and
ultimately be unable to commercialize our product candidates.
Before obtaining regulatory approval for the sale of our product candidates, we must conduct, at our
own expense, extensive preclinical tests to demonstrate the safety of our product candidates in animals and
clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Preclinical and clinical
testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to
outcome. A failure of one or more of our clinical trials for ultra rapid acting insulin or GEM product candidates
could occur at any stage of testing. We may experience numerous unforeseen events during our clinical trials that
could delay or prevent our ability to receive regulatory approval or commercialize our product candidates,
including:
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the number of patients required for our clinical trials may be larger than we anticipate, enrollment
in our clinical trials may be slower than we currently anticipate, or participants may drop out of
our clinical trials at a higher rate than we anticipate, any of which would result in significant
delays;
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•
our third-party contractors may fail to comply with regulatory requirements or meet their
contractual obligations to us in a timely manner;
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we might have to suspend or terminate our clinical trials if the participants are being exposed to
unacceptable health risks;
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regulators or institutional review boards may require that we hold, suspend or terminate clinical
research for various reasons, including noncompliance with regulatory requirements;
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the cost of our clinical trials may be greater than we anticipate;
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the supply, stability or quality of our product candidates or other materials necessary to conduct
our clinical trials may be insufficient or inadequate; and
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the effects of our product candidates may not be the desired effects, may include undesirable side
effects or the product candidates may have other unexpected characteristics.
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If we are required to conduct additional clinical trials or other testing of our product candidates beyond
those that we currently contemplate, if we are unable to successfully complete our clinical trials or other testing,
if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns,
we may:
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be delayed in obtaining or discontinue our efforts to obtain marketing approval;
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not be able to obtain marketing approval;
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obtain approval for indications that are not as broad as intended; or
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have the product removed from the market after obtaining marketing approval.
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Our product development costs will also increase if we experience delays in testing or approvals. We
do not know whether any preclinical tests or clinical trials will begin as planned, will need to be redesigned or
will be completed on schedule, if at all. Significant preclinical or clinical trial delays also could shorten any
periods during which we may have the exclusive right to commercialize our product candidates or allow our
competitors to bring products to market before we do and impair our ability to commercialize our products or
product candidates and may harm our business and results of operations.
If our product candidates are found to cause undesirable side effects we may need to delay or abandon our
development and commercialization efforts.
Any undesirable side effects that might be caused by our product candidates could interrupt, delay or
halt clinical trials and could result in the denial of regulatory approval by the FDA or other regulatory authorities
for any or all targeted indications. In addition, if any of our product candidates receive marketing approval and
we or others later identify undesirable side effects caused by the product, we could face one or more of the
following:
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a change in the labeling statements or withdrawal of FDA or other regulatory approval of the
product;
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a change in the way the product is administered; or
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the need to conduct additional clinical trials.
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Any of these events could prevent us from achieving or maintaining market acceptance of the affected
product or could substantially increase the costs and expenses of commercializing the product, which in turn
could delay or prevent us from generating significant revenues from its sale.
The commercial success of any product candidates that we may develop will depend upon the degree of market
acceptance by physicians, patients, healthcare payors and others in the medical community.
Any products that we bring to the market may not gain market acceptance by physicians, patients,
healthcare payors and others in the medical community. If these products do not achieve an adequate level of
acceptance, we may not generate significant product revenues and we may not become profitable. Physicians will
not recommend our product candidates until clinical data or other factors demonstrate the safety and efficacy of
our product candidates as compared to other treatments. Even if the clinical safety and efficacy of our product
candidates are established, physicians may elect not to recommend these
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product candidates for a variety of reasons including the reimbursement policies of government and third-party
payors, the effectiveness of our competitors in marketing their products and the possibility that patients may
experience more injection site discomfort than they experience with competing products.
The degree of market acceptance of our product candidates, if approved for commercial sale, will
depend on a number of factors, including:
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the willingness and ability of patients and the healthcare community to adopt our products;
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the ability to manufacture our product candidates in sufficient quantities with acceptable quality
and to offer our product candidates for sale at competitive prices;
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the perception of patients and the healthcare community, including third-party payors, regarding
the safety, efficacy and benefits of our product candidates compared to those of competing
products or therapies;
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the convenience and ease of administration of our product candidates relative to existing treatment
methods;
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the label and promotional claims allowed by the FDA, such as, in the case of an RHI- or insulin
analog-based formulation, claims relating to glycemic control, hypoglycemia, weight gain,
injection site discomfort, expiry dating and required handling conditions;
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the pricing and reimbursement of our product candidates relative to existing treatments; and
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marketing and distribution support for our product candidates.
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Our ultra-rapid-acting insulin formulations have not yet been shown to be clinically superior to existing
rapid-acting insulin analogs or other marketed comparators, such as Humulin ® R U-500 and Humalog ® Mix
75/25. It may be difficult for us to demonstrate superiority in the future because we anticipate that the primary
endpoint of any pivotal clinical trial that we might conduct with an ultra-rapid-acting insulin product candidate
would be non-inferiority to the comparator drug product. In addition, we are aware of other companies with
expertise in protein stabilization that are developing liquid presentations of stable glucagon. If these formulations
are presented in devices that are easier to use than our GEM device, our GEM product candidate, even if
approved by the FDA, may not achieve commercial success.
The successful development of our product candidates may depend upon our ability to collaborate with or
license technology from third parties.
BIOD-531 is at an early stage of development. In order for us to meet our projected milestones for this
program, we must obtain a reliable source of active pharmaceutical ingredient and other related materials and
supplies, including insulin injection devices or syringes that may be unique to BIOD-531 and its insulin
concentration. In addition, with regard to our GEM product candidate, we are dependent upon proprietary
licenses and supply arrangements we have with third parties, such as Unilife, which is responsible for designing
and manufacturing the GEM device, as well as delivering three registration lots of the filled and finished GEM
device required for submitting an NDA to the FDA. If we are unable to establish or maintain these licenses and
supply arrangements, our efforts to commercialize our product candidates may be materially harmed.
If we fail to enter into strategic collaborations for the commercialization of our product candidates or if our
collaborations are unsuccessful, we may be delayed in our commercialization efforts; we may be required to
establish our own sales, marketing, manufacturing and distribution capabilities which will be expensive,
require additional capital we do not currently have, and could delay the commercialization of our product
candidates and have a material and adverse effect on our business; we cannot commercialize our insulin
analog-based formulations until all applicable third-party patents have expired.
We cannot commercialize on our own any insulin analog-based formulation in the United States until
2014 at the earliest, when the patents covering the currently marketed insulin analogs first begin to expire.
Therefore, our current strategy for developing, manufacturing and commercializing our product candidates
includes securing collaborations with leading pharmaceutical and biotechnology companies, including those that
hold patents covering the currently marketed insulin analogs. To date, we have not
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entered into any out-licensing collaborations with pharmaceutical or biotechnology companies. We face
significant competition in seeking appropriate collaborators. In addition, collaboration agreements are complex
and time-consuming to negotiate, document and implement. For all these reasons, it may be difficult for us to
find third parties that are willing to enter into collaborations on economic terms that are favorable to us, or at all.
Even if we do enter into any such collaboration, the collaboration may not be successful. The success of our
collaboration arrangements will depend heavily on the efforts and activities of our collaborators. It is likely that
our collaborators will have significant discretion in determining the efforts and resources that they will apply to
these collaborations.
If we fail to enter into collaborations, or if our collaborations are unsuccessful, we may be required to
establish our own direct sales, marketing, manufacturing and distribution capabilities. Establishing these
capabilities can be time-consuming and expensive and we have little experience in doing so. Because of our size,
we would be at a disadvantage to our potential competitors to the extent they collaborate with large
pharmaceutical companies that have substantially more resources than we do. As a result, we would not initially
be able to field a sales force as large as our competitors or provide the same degree of market research or
marketing support. In addition, our competitors would have a greater ability to devote research and development
resources toward expansion of the indications for their products. We cannot assure our investors that we will
succeed in entering into acceptable collaborations, that any such collaboration will be successful or, if not, that
we will successfully develop our own sales, marketing and distribution capabilities.
If we are unable to obtain adequate reimbursement from governments or third-party payors for any products
that we may develop or if we are unable to obtain acceptable prices for those products, they may not be
purchased or used and our revenues and prospects for profitability will suffer.
Our future revenues and profits will depend heavily upon the availability of adequate reimbursement
for the use of any approved product candidates from governmental and other third-party payors, both in the
United States and in other markets. Reimbursement by a third-party payor may depend upon a number of factors,
including the third-party payor’s determination that use of a product is:
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a covered benefit under its health plan;
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safe, effective and medically necessary;
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appropriate for the specific patient;
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cost-effective; and
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neither experimental nor investigational.
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Obtaining reimbursement approval for a product from each government or other third-party payor is a
time-consuming and costly process that could require us to provide supporting scientific, clinical and costeffectiveness data for the use of our products to each payor. We may not be able to provide data sufficient to gain
acceptance with respect to reimbursement. Even when a payor determines that a product is eligible for
reimbursement, the payor may impose coverage limitations that preclude payment for some uses that are
approved by the FDA or comparable authorities. In addition, eligibility for coverage does not imply that any
product will be reimbursed in all cases or at a rate that allows us to make a profit or even cover our costs.
Interim payments for new products, if applicable, may also not be sufficient to cover our costs and may
not be made permanent.
Governments outside the United States tend to impose strict price controls, which may adversely affect our
revenues, if any.
In some countries, particularly the countries of the European Union, the pricing of prescription
pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental
authorities can take considerable time after the receipt of marketing approval for a product. To obtain
reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that
compares the cost-effectiveness of our product candidate to other available therapies. If reimbursement of our
products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business
could be adversely affected.
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Product liability lawsuits against us could cause us to incur substantial liabilities and to limit
commercialization of any products that we may develop.
We face an inherent risk of product liability exposure related to the testing of our product candidates in
human clinical trials and will face an even greater risk if we commercially sell any products that we may develop.
If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries,
we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:
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decreased demand for any product candidates or products that we may develop;
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injury to our reputation;
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withdrawal of clinical trial participants;
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costs to defend the related litigation;
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substantial monetary awards to trial participants or patients;
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loss of revenue; and
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the inability to commercialize any products that we may develop.
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We currently carry global liability insurance that we believe is sufficient to cover us from potential
damages arising from past or future clinical trials of our ultra-rapid-acting insulin formulations and other product
candidates that we may advance into the clinic. The amount of insurance that we currently hold may not be
adequate to cover all liabilities that we may incur. We intend to expand our insurance coverage to include the sale
of commercial products if we obtain marketing approval for any products. Insurance coverage is increasingly
expensive. We may not be able to maintain insurance coverage at a reasonable cost. If losses from product
liability claims exceed our liability insurance coverage, we may ourselves incur substantial liabilities. If we are
required to pay a product liability claim, we may not have sufficient financial resources to complete development
or commercialization of any of our product candidates and, if so, our business and results of operations would be
harmed.
We face substantial competition in the development of our product candidates which may result in others
developing or commercializing products before or more successfully than we do.
We are engaged in segments of the pharmaceutical industry that are characterized by intense
competition and rapidly evolving technology. Many large pharmaceutical and biotechnology companies,
academic institutions, governmental agencies and other public and private research organizations are pursuing the
development of novel drugs that target endocrine disorders. We face, and expect to continue to face, intense and
increasing competition as new products enter the market and advanced technologies become available.
If approved, our GEM product candidate would face significant competition. Eli Lilly and Novo
Nordisk currently market injectable glucagon rescue kit products. We are aware of several glucagon rescue
product candidates in early stage development, such as a potentially competitive auto-injector device being
developed by Enject Corporation that integrates glucagon powder and a diluent into a dual-chamber cartridge
within that device. Xeris Corporation, or Xeris, is developing glucagon formulations that are stabilized using
non-aqueous solvents to suppress glucagon fibrillation. At the 2014 Annual Meeting of the American Diabetes
Association, Xeris presented data from a Phase 2, double-blind, crossover, comparative pharmacology study in
healthy non-diabetic volunteers in which the Xeris candidate formulation demonstrated pharmacodynamic
bioequivalence to a marketed comparator (although the pharmacokinetic profiles of the 2 glucagon formulations
were significantly different). In addition, other companies with expertise in protein stabilization, including
Latitude Pharmaceuticals, have announced that they have developed a stable glucagon formulation using FDAapproved injectable ingredients. We believe that an intranasal formulation of glucagon is being studied in one or
more clinical trials, as is a glucagon formulation delivered intra-dermally by a micro needle patch. All of these
programs utilize the same active pharmaceutical ingredient as the stable glucagon presentations that we are
developing and offer, or may offer, presentations allowing for room temperature storage. In addition, Eli Lilly,
Novo Nordisk and Zealand Pharma A/S, a pharmaceutical company based in Denmark, may be developing
glucagon analogs, which may also offer advantages over our stable glucagon presentations.
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If approved, the primary competition for our BIOD-123 ultra-rapid-acting insulin product candidate
will be rapid-acting mealtime injectable insulins. There are several approved injectable rapid-acting mealtime
insulin analogs currently on the market including Humalog ® , marketed by Eli Lilly and Company, NovoLog ® ,
marketed by Novo Nordisk, and Apidra ® , marketed by Sanofi. These rapid-acting insulin analogs provide
improvement over “regular” mealtime insulin, including faster subcutaneous absorption, an earlier and greater
insulin peak and more rapid post-peak decrease. Both Humalog ® and NovoLog ® have limited remaining patent
protection in the United States and Europe. The possible introduction of lower priced brands or substitutable
generic versions of these products could negatively impact the revenue potential of our ultra-rapid-acting product
candidates should any be approved.
In addition, other development stage insulin formulations may be approved and compete with BIOD123. Halozyme Therapeutics, Inc. has conducted a Phase 1 and multiple Phase 2 clinical trials of RHI, lispro (the
insulin analog in Humalog ® ) and aspart (the insulin analog in NovoLog ® ) in combination with a recombinant
human hyaluronidase enzyme and has reported that in each case the combination yielded pharmacokinetics and
glucodynamics that better mimicked physiologic mealtime insulin release and activity than RHI, Humalog ® or
NovoLog ® alone. Novo Nordisk has initiated clinical development of an insulin analog intended to provide faster
onset of action than the currently available rapid-acting insulin analogs and is studying candidate formulations in
Phase 3 clinical trials. A French biotechnology company, Adocia Inc., announced positive preliminary results in
September 2014 from a Phase 2a dose response clinical trial evaluating an “ultra-fast” formulation of insulin
lispro. Furthermore, the company announced plans to develop a concentrated formulation of insulin lispro using
its absorption enhancing technologies. In December 2014, Adocia Inc. announced that it had entered into a
worldwide licensing partnership with Eli Lilly to develop an ultra-rapid-acting insulin to treat patients with Type
1 and Type 2 diabetes.
Our concentrated ultra-rapid acting insulin product candidate, BIOD-531, if approved, would face
significant competition from insulin formulations currently on the market and, potentially, from development
stage insulin formulations and other treatment systems. Humulin ® R U-500 is commonly used to treat diabetes
patients with severe insulin resistance, and pre-mixed insulins, such as Humalog ® Mix 75/25, is commonly used
to treat diabetes patients and lesser degrees of insulin resistance. Newer combination products may also compete
with BIOD-531. For example, a combination of insulin degludec, an ultra-long-acting basal insulin developed by
Novo Nordisk, and NovoLog ® is approved in Europe and may be approved in the United States within the next
few years. Also, combinations of basal insulin and GLP-1 analogs have either been approved or are in later stages
of development; these products are believed to offer some measure of postprandial glucose control in addition to
the control offered by a basal insulin. Furthermore, Thermalin Diabetes, LLC, has announced plans to develop a
novel concentrated insulin-analog based formulation with fast absorption.
Several companies are also developing or marketing alternative insulin systems for diabetes, including
Afrezza ® an inhalable mealtime insulin product from MannKind Corporation, which was approved by the FDA
in July 2014. In September 2014 MannKind Corporation announced the closing of a worldwide exclusive
collaboration and licensing agreement with Sanofi for the development and commercialization of Afrezza ® for
adults with Type 1 and Type 2 diabetes. An inhaled insulin could reduce the overall market for injectable
mealtime insulin.
Potential competitors also include academic institutions, government agencies and other public and
private research organizations that conduct research, seek patent protection and establish collaborative
arrangements for research, development, manufacturing and commercialization. Our competitors may develop
products that are more effective, safer, more convenient or less costly than any that we are developing or that
would render our product candidates obsolete or non-competitive. Our competitors may also obtain FDA or other
regulatory approval for their products more rapidly than we may obtain approval for ours.
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Many of our potential competitors have:
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significantly greater financial, technical and human resources than we have and may be better
equipped to discover, develop, manufacture and commercialize product candidates;
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more extensive experience in preclinical testing and clinical trials, obtaining regulatory approvals
and manufacturing and marketing pharmaceutical products;
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product candidates that have been approved or are in late-stage clinical development; or
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collaborative arrangements in our target markets with leading companies and research institutions.
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Our product candidates may be rendered obsolete by technological change.
The rapid rate of scientific discoveries and technological changes could result in one or more of our
product candidates becoming obsolete or noncompetitive. For several decades, scientists have attempted to
improve the bioavailability of injected formulations and to devise alternative non-invasive delivery systems for
the delivery of drugs such as insulin. Our product candidates will compete against many products with similar
indications. Our future success will depend not only on our ability to develop our product candidates, but also on
our ability to maintain market acceptance against emerging industry developments. We cannot assure current or
prospective stockholders that we will be able to do so.
Our business activities involve the storage and use of hazardous materials, which require compliance with
environmental and occupational safety laws regulating the use of such materials. If we violate these laws, we
could be subject to significant fines, liabilities or other adverse consequences.
Our research and development work and manufacturing processes involve the controlled storage and
use of hazardous materials, including chemical and biological materials. Our operations also produce hazardous
waste products. We are subject to federal, state and local laws and regulations governing the use, manufacture,
storage, handling and disposal of these materials. Although we believe that our safety procedures for handling
and disposing of such materials and waste products comply in all material respects with the standards prescribed
by federal, state and local laws and regulations, the risk of accidental contamination or injury from hazardous
materials cannot be completely eliminated. In the event of an accident or failure to comply with environmental
laws, we could be held liable for any damages that may result, and any such liability could fall outside the
coverage or exceed the limits of our insurance. In addition, we could be required to incur significant costs to
comply with environmental laws and regulations in the future or pay substantial fines or penalties if we violate
any of these laws or regulations. Finally, current or future environmental laws and regulations may impair our
research, development or production efforts.
Risks Related to Our Dependence on Third Parties
Use of third parties to manufacture our product candidates may increase the risks that we will not have
sufficient quantities of our product candidates or such quantities at an acceptable cost, or that our contract
manufacturers will not be able to manufacture our products in their final dosage form. In any such case,
clinical development and commercialization of our product candidates could be delayed, prevented or
impaired.
We do not currently own or operate manufacturing facilities for commercial production of our product
candidates. We have limited experience in drug manufacturing and we lack the resources and the capabilities to
manufacture any of our product candidates on a clinical or commercial scale. Our current strategy is to outsource
to third parties all of the manufacturing required for our product candidates, including the component parts of the
GEM device and activities associated with assembling, filling, finishing and packaging that device.
Under our customization and commercial supply agreement with Unilife, Unilife will develop and be
the sole supplier of the GEM device. Additionally, Unilife is responsible for delivering three registration lots of
the filled and finished GEM device required for submitting an NDA to the FDA. The initial term of our
agreement with Unilife will expire in 2028.
We have entered into a manufacturing agreement with Emergent BioSolutions, or Emergent, under
which Emergent will fill and finish the GEM device, using lyophilized glucagon and an aqueous diluent. During
the term of our agreement with Emergent following validation of the manufacturing process, we are required to
purchase, and Emergent is obligated to deliver to us, one manufactured lot of the GEM device every quarter.
However, we would likely require additional manufacturing capacity in order for any commercial launch of our
GEM product candidate to be successful.
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With regard to our ultra-rapid-acting insulin formulations, including BIOD-531, we have recently relied
on the University of Iowa for manufacturing services. We do not have any commercial manufacturing agreements
in place with third parties to support these product candidates.
Reliance on third-party manufacturers entails risks to which we would not be subject if we
manufactured product candidates or products ourselves, including:
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reliance on the third party for regulatory compliance and quality assurance;
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the possible breach of the manufacturing agreement by the third party because of factors beyond
our control; and
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the possible refusal by or inability of the third party to support our manufacturing programs in a
time frame that we would otherwise prefer.
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Our manufacturers may not be able to comply with current good manufacturing practice, or cGMP,
regulations or other regulatory requirements or similar regulatory requirements outside the United States. Our
manufacturers are subject to unannounced inspections by the FDA, state regulators and similar regulators outside
the United States. Our failure, or the failure of our third-party manufacturers, to comply with applicable
regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, failure of
regulatory authorities to grant marketing approval of our product candidates, delays, suspension or withdrawal of
approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and
criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates.
Our product candidates and any products that we may develop may compete with other product
candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that
operate under cGMP regulations and that are both capable of manufacturing for us and willing to do so. If the
third parties that we engage to manufacture product for our clinical trials should cease to continue to do so for
any reason, we likely would experience delays in advancing these trials while we identify and qualify
replacement suppliers and we may be unable to obtain replacement supplies on terms that are favorable to us. In
addition, if we are not able to obtain adequate supplies of our product candidates or the drug substances used to
manufacture them, it will be more difficult for us to develop our product candidates and compete effectively.
Our current and anticipated future dependence upon others for the manufacture of our product
candidates may adversely affect our future profit margins and our ability to develop product candidates and
commercialize any products that receive regulatory approval on a timely and competitive basis.
We rely on third parties for design and engineering expertise relating to the development of devices we may
use to administer the pharmaceutical preparations of our product candidates.
The success of certain of our product candidates is likely to depend heavily on the design of the devices
being used for the administration of our pharmaceutical preparations. For example, the GEM device, which is
based on an existing technology platform developed by Unilife Corporation, is being customized by Unilife for
use in an emergency situation. We do not have internal engineering expertise relating to medical devices, and we
therefore rely on Unilife to provide such expertise. If our collaboration with Unilife is not successful in this
regard, our program to develop our GEM product candidate will be materially harmed. Additionally, in order to
maximize the commercial potential of our ultra-rapid-acting insulin product candidates, we will likely depend on
one or more manufacturers of insulin pen injection devices or syringes to supply us with a commercially
acceptable device. To date, we have not entered into any agreements for the supply of insulin pen injection
devices or syringes, and we cannot assure you that any such devices will be available on terms that will be
acceptable to us, if at all.
We rely on third parties to conduct our clinical trials and those third parties may not perform satisfactorily,
including failing to meet established timelines for the completion of such trials.
We do not independently conduct clinical trials of our product candidates. We rely on third parties,
such as contract research organizations, clinical data management organizations, medical institutions and clinical
investigators, to enroll qualified patients and conduct our clinical trials. Our reliance
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on these third parties for clinical development activities reduces our control over these activities. We are
responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational
plan and protocols for the trial. Moreover, the FDA requires us to comply with standards, commonly referred to
as Good Clinical Practices, for conducting, recording, and reporting the results of clinical trials to assure that data
and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants
are protected. Our reliance on third parties that we do not control does not relieve us of these responsibilities and
requirements. Furthermore, these third parties may also have relationships with other entities, some of which may
be our competitors. If these third parties do not successfully carry out their contractual duties, meet expected
deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we
will not be able to obtain, or may be delayed in obtaining, regulatory approvals for our product candidates and
will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.
If our suppliers of active pharmaceutical ingredients and other production materials fail to deliver materials
and provide services needed for the production of our product candidates in a timely and sufficient manner, or
if they fail to comply with applicable regulations, clinical development or regulatory approval of our product
candidates, and commercialization of our products could be delayed, producing additional losses and
depriving us of potential product revenue.
We need access to sufficient, reliable and affordable supplies of insulin, glucagon and other materials,
such as vials, cartridges, prefilled syringes and, potentially, drug injection devices, for which we rely on various
suppliers. We also must rely on those suppliers to comply with relevant regulatory and other legal requirements,
including the production of insulin and glucagon in accordance with cGMP. We can make no assurances that our
suppliers will comply with cGMP.
We have entered into a commercial supply agreement with Bachem AG for the supply of all of the
glucagon we will need for the testing and manufacturing of our GEM product candidate. The initial term of our
agreement with Bachem AG will expire in July 2017. We believe that the quantities of glucagon that we have
rights to acquire under this agreement will be sufficient to allow us to complete our current and anticipated future
clinical trials of our GEM product candidate and to support any commercial launch of the product candidate.
We have terminated an earlier supply agreement with N.V. Organon (subsequently acquired by
Amphastar Pharmaceuticals, Inc., a specialty pharmaceutical development and manufacturing company), under
which we have purchased the RHI we have used to formulate all of our RHI-based product candidates. We intend
to use existing supplies of RHI to support the further development of BIOD-531, as well as enter into one or
more development stage RHI supply agreements, as necessary. We do not have any plans, however, to commit to
quantities of RHI that may be required to support the commercial launch of one or more of our RHI-based
product candidates.
If we are unable to procure sufficient quantities of glucagon or insulin from our current or any future
supplier, if supply of RHI, glucagon and other materials otherwise becomes limited, or if our suppliers do not
meet relevant regulatory requirements, and if we were unable to obtain these materials in sufficient amounts, in a
timely manner and at reasonable prices, we could be delayed in the manufacturing and possible
commercialization of our product candidates, which may have a material adverse effect on our business. We
would incur substantial costs and manufacturing delays if our suppliers are unable to provide us with products or
services approved by the FDA or other regulatory agencies.
Risks Related to Our Intellectual Property
If we are unable to protect our intellectual property rights, our competitors may develop and market similar or
identical products that may reduce demand for our products, and we may be prevented from establishing
collaborative relationships on favorable terms.
The following factors are important to our success:
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receiving patent protection for our product candidates;
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maintaining our trade secrets;
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not infringing on the proprietary rights of others; and
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preventing others from infringing on our proprietary rights.
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We will be able to protect our proprietary rights from unauthorized use by third parties only to the
extent that our proprietary rights are covered by valid and enforceable patents or are effectively maintained as
trade secrets. We try to protect our proprietary position by filing U.S. and foreign patent applications related to
our proprietary technology, inventions and improvements that are important to the development of our business.
Because the patent position of pharmaceutical companies involves complex legal and factual questions, the
issuance, scope and enforceability of patents cannot be predicted with certainty. Patents, if issued, may be
challenged, invalidated or circumvented. Thus, any patents that we own or license from others may not provide
any protection against competitors.
In June 2012 we entered into an agreement with Aegis Therapeutics, LLC, or Aegis, to acquire an
exclusive, sublicensable, worldwide license to the protein stabilization technology that we are using in the
development of our stable liquid glucagon formulations. Under the terms of the agreement, Aegis will prepare,
file, prosecute and maintain patents and patent applications that are specific to our stable glucagon presentations
in jurisdictions that we may designate from time to time.
Our pending patent applications, those we may file in the future, or those we may license from third
parties, may not result in patents being issued. If patents do not issue with claims encompassing our products, our
competitors may develop and market similar or identical products that compete with ours. Even if patents are
issued, they may not provide us with proprietary protection or competitive advantages against competitors with
similar technology. Failure to obtain effective patent protection for our technology and products may reduce
demand for our products and prevent us from establishing collaborative relationships on favorable terms.
The individual active and inactive ingredients in our ultra-rapid-acting insulin formulations and our
stable glucagon presentations have been known and used for many years and, therefore, are no longer subject to
patent protection, except in proprietary combinations. Accordingly, our patent and pending applications are
directed to the particular formulations of these ingredients in our products, and to their use. Although we believe
our formulations and their uses are or will be patented and provide a competitive advantage, our patents may not
prevent others from marketing formulations using the same active and inactive ingredients in different
combinations.
We also rely on trade secrets, know-how and technology, which are not protected by patents, to
maintain our competitive position. We try to protect this information by entering into confidentiality agreements
with parties that have access to it, such as potential corporate partners, collaborators, employees and consultants.
Any of these parties may breach the agreements and disclose our confidential information or our competitors may
learn of the information in some other way. Furthermore, others may independently develop similar technologies
or duplicate any technology that we have developed. If any trade secret, know-how or other technology not
protected by a patent were to be disclosed to or independently developed by a competitor, our business and
financial condition could be materially adversely affected.
The laws of many foreign countries do not protect intellectual property rights to the same extent as do
the laws of the United States. Accordingly, the fact that we have obtained certain patent rights in the United
States does not guarantee that we will be able to obtain the same or similar rights elsewhere. Even if we are
granted patents in foreign countries, we cannot guarantee that we will be able to enforce our rights effectively.
We may become involved in lawsuits and administrative proceedings to protect, defend or enforce our patents
that would be expensive and time-consuming.
In order to protect or enforce our patent rights, we may initiate patent litigation against third parties in
the United States or in foreign countries. In addition, we may be subject to certain opposition proceedings
conducted in patent and trademark offices challenging the validity of our patents and may become involved in
future opposition proceedings challenging the patents of others. For example, in late July 2013, a third party
initiated administrative proceedings to oppose EP2319500 and EP2106790, two of
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our more recent patents that have been granted by the European Patent Office in connection with our ultra-rapidacting insulin formulations. While we were successful in defending the opposition before the Opposition Division
of the European Patent Office in October 2014 through an amendment to the specification, the parties have
appealed the European Patent Office’s decisions. The defense of intellectual property rights, including patent
rights, through lawsuits, interference or opposition proceedings, and other legal and administrative proceedings
can be costly and can divert our technical and management personnel from their normal responsibilities. Such
costs increase our operating losses and reduce our resources available for development activities. An adverse
determination of any litigation or defense proceedings could put one or more of our patents at risk of being
invalidated or interpreted narrowly and could put our patent applications at risk of not issuing.
Furthermore, because of the substantial amount of discovery required in connection with intellectual
property litigation, there is a risk that some of our confidential information could be compromised by disclosure
during this type of litigation. For example, during the course of this kind of litigation and despite protective
orders entered by the court, confidential information may be inadvertently disclosed in the form of documents or
testimony in connection with discovery requests, depositions or trial testimony. This disclosure could materially
adversely affect our business and financial results.
Claims by other parties that we infringe or have misappropriated their proprietary technology may result in
liability for damages, royalties, or other payments, or stop our development and commercialization efforts.
Competitors and other third parties may initiate patent litigation against us in the United States or in
foreign countries based on existing patents or patents that may be granted in the future. Many of our competitors
may have obtained patents covering products and processes generally related to our products and processes, and
they may assert these patents against us. Moreover, there can be no assurance that these competitors have not
sought or will not seek additional patents that may cover aspects of our technology. As a result, there is a greater
likelihood of a patent dispute than would be expected if our competitors were pursuing unrelated technologies.
While we conduct patent searches to determine whether the technologies used in our products infringe
patents held by third parties, numerous patent applications are currently pending and may be filed in the future
for technologies generally related to our technologies, including many patent applications that remain
confidential after filing. Due to these factors and the inherent uncertainty in conducting patent searches, there can
be no guarantee that we will not violate third-party patent rights that we have not yet identified.
There may be U.S. and foreign patents issued to third parties that relate to aspects of our product
candidates. There may also be patent applications filed by these or other parties in the United States and various
foreign jurisdictions that relate to some aspects of our product candidates, which, if issued, could subject us to
infringement actions. The owners or licensees of these and other patents may file one or more infringement
actions against us. In addition, a competitor may claim misappropriation of a trade secret by an employee hired
from that competitor. Any such infringement or misappropriation action could cause us to incur substantial costs
defending the lawsuit and could distract our management from our business, even if the allegations of
infringement or misappropriation are unwarranted. A need to defend multiple actions or claims could have a
disproportionately greater impact. In addition, either in response to or in anticipation of any such infringement or
misappropriation claim, we may enter into commercial agreements with the owners or licensees of these rights.
The terms of these commercial agreements may include substantial payments, including substantial royalty
payments on revenues received by us in connection with the commercialization of our products.
Payments under such agreements could increase our operating losses and reduce our resources
available for development activities. Furthermore, a party making this type of claim could secure a judgment that
requires us to pay substantial damages, which would increase our operating losses and reduce our resources
available for development activities. A judgment could also include an injunction or other court order that could
prevent us from making, using, selling, offering for sale or importing our products or prevent our customers from
using our products. If a court determined or if we independently concluded
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that any of our products or manufacturing processes violated third-party proprietary rights, our clinical trials
could be delayed and there can be no assurance that we would be able to reengineer the product or processes to
avoid those rights, or to obtain a license under those rights on commercially reasonable terms, if at all.
Risks Related to Regulatory Approval of Our Product Candidates
If the FDA does not believe that our product candidates satisfy the requirements for the Section 505(b)(2)
approval procedure, or if the requirements for our product candidates under Section 505(b)(2) are not as we
expect, the approval pathway will take longer and cost more than anticipated and in either case may not be
successful.
We believe our ultra-rapid-acting insulin formulations and our stable glucagon presentation for use as a
rescue product qualify for approval under Section 505(b)(2) of the FFDCA. Because we are developing new
formulations of previously approved chemical entities, such as insulin and glucagon, our drug approval strategy
is to submit Section 505(b)(2) NDAs to the FDA. We plan to pursue similar routes for submitting applications for
our product candidates in foreign jurisdictions if available. The FDA may not agree that our product candidates
are approvable pursuant to Section 505(b)(2) NDAs. There is no specific guidance available for Section 505(b)(2)
NDAs for insulin or glucagon. In addition, while there is precedent for a glucagon product being approved under
a Section 505(b)(2) NDA, we are not aware of any insulin product that has been approved under a Section 505(b)
(2) NDA. If the FDA determines that Section 505(b)(2) NDAs are not appropriate and that full NDAs are
required for our product candidates, the time and financial resources required to obtain FDA approval for our
product candidates could substantially and materially increase, and our product candidates might be less likely to
be approved. If the FDA requires full NDAs for our product candidates, or requires more extensive testing and
development for some other reason, our ability to compete with alternative products that arrive on the market
more quickly than our product candidates would be adversely impacted.
Notwithstanding the approval of many products by the FDA pursuant to Section 505(b)(2), over the last
few years certain pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505
(b)(2). If the FDA’s interpretation of Section 505(b)(2) is successfully challenged in court, the FDA may be
required to change its interpretation of Section 505(b)(2) which could delay or even prevent the FDA from
approving any Section 505(b)(2) NDA that we submit. The pharmaceutical industry is highly competitive, and it
is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking to
delay approval of, or impose additional approval requirements for, pending competing products. If successful,
such petitions can significantly delay, or even prevent, the approval of the new product. Moreover, even if the
FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds
to the petition.
Even if one of our product candidates is approved under Section 505(b)(2), the approval may be subject
to limitations on the indicated uses for which the product may be marketed or to other conditions of approval, or
may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of
the product.
Any product for which we obtain marketing approval could be subject to restrictions or withdrawal from the
market and we may be subject to penalties if we fail to comply with regulatory requirements or if we
experience unanticipated problems with our products, when and if any of them are approved.
Any product for which we obtain marketing approval, along with the manufacturing processes, postapproval clinical data, labeling, advertising and promotional activities for such product, will be subject to
continual requirements of and review by the FDA and other state and federal regulatory authorities. These
requirements include, in the case of the FDA, submissions of safety and other post-marketing information and
reports, registration requirements, cGMP requirements relating to quality control, quality assurance and
corresponding maintenance of records and documents, requirements regarding the distribution of samples to
physicians and recordkeeping. Even if regulatory approval of a product is granted, the approval may be subject to
limitations on the indicated uses for which the product may be marketed or to other conditions of approval, or
may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of
the product. In addition, if any of our product
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candidates are approved, our product labeling, advertising and promotion would be subject to regulatory
requirements and continuing regulatory review. The FDA strictly regulates the promotional claims that may be
made about prescription drug products. In particular, a drug may not be promoted in a misleading manner or for
uses that are not approved by the FDA as reflected in the product’s approved labeling. The FDA and other state
and federal entities actively enforce the laws and regulations prohibiting misleading promotion and the promotion
of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to
significant liability.
Discovery after approval of previously unknown problems with our products, manufacturers or
manufacturing processes, or failure to comply with state or federal regulatory requirements, may result in actions
such as:
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restrictions on such products’ manufacturers or manufacturing processes;
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restrictions on the marketing or distribution of a product;
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requirements that we conduct new studies, make labeling changes, and implement Risk Evaluation
and Mitigation Strategies;
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warning letters;
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withdrawal of the products from the market;
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refusal to approve pending applications or supplements to approved applications that we submit;
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recall of products;
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fines, restitution or disgorgement of profits or revenue;
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suspension or withdrawal of regulatory approvals;
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refusal to permit the import or export of our products;
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product embargo and/or seizure;
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injunctions; or
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imposition of civil or criminal penalties.
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Changes in law, regulations, and policies may preclude approval of our product under a 505(b)(2) or make it
more difficult and costly for us to obtain regulatory approval of our product candidates and to produce,
market and distribute our existing products.
In March 2010, the President signed into law legislation creating an abbreviated pathway for approval
under the Public Health Service Act, or PHS Act, of biological products that are similar to other biological
products that are approved under the PHS Act. This legislation also expanded the definition of biological product
to include proteins such as insulin. The new law contains transitional provisions governing protein products such
as insulin that, under certain circumstances, might permit companies to seek approval for their insulin products as
biologics under the PHS Act and might require that Biodel’s product be approved under the PHS Act rather than
in a 505(b)(2) NDA. We would be unlikely to pursue approval of our product candidates if we were required to
seek approval under the PHS Act rather than in a 505(b)(2) NDA.
In addition, the federal and state laws, regulations, policies or guidance may change in a manner that
could prevent or delay regulatory approval of our product candidates or further restrict or regulate post-approval
activities. It is impossible to predict whether additional legislative changes will be enacted, or FDA regulations,
guidance or interpretations implemented or modified, or what the impact of such changes, if any, may be.
Failure to obtain regulatory approval in international jurisdictions would prevent us from marketing our
products abroad.
We intend to have our products marketed outside the United States. In order to market our products in
the European Union and many other jurisdictions, we must obtain separate regulatory approvals and comply with
numerous and varying regulatory requirements of other countries regarding
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safety and efficacy and governing, among other things, clinical trials and commercial sales and distribution of our
products. The approval procedure varies among countries and can involve additional testing. The time required to
obtain approval may differ from that required to obtain FDA approval. The regulatory approval processes outside
the United States may include all of the risks associated with obtaining FDA approval, as well as additional risks.
In addition, in many countries outside the United States, it is required that the product be approved for
reimbursement before the product can be approved for sale in that country. We may not obtain approvals from
regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure
approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority
outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or
by the FDA. We may not be able to file for regulatory approvals and may not receive necessary approvals to
commercialize our products in any market.
Reports of side effects or safety concerns in related technology fields or in other companies’ clinical trials
could delay or prevent us from obtaining regulatory approval or negatively impact public perception of our
product candidates.
At present, there are a number of clinical trials being conducted by us and by other pharmaceutical
companies involving insulin or insulin delivery systems. The major safety concern with patients taking insulin is
the occurrence of hypoglycemic events. If we discover that our product is associated with a significantly
increased frequency of hypoglycemic or other adverse events, or if other pharmaceutical companies announce
that they observed frequent or significant adverse events in their trials involving insulin or insulin delivery
systems, we could encounter delays in the commencement or completion of our clinical trials or difficulties in
obtaining the approval of our product candidates. In addition, the public perception of our products might be
adversely affected, which could harm our business and results of operations, even if the concern relates to another
company’s product.
Risks Related to Employee Matters and Managing Growth
Our future success depends on our ability to retain our chief executive officer and other key executives and to
attract, retain and motivate qualified personnel.
We are highly dependent on Errol De Souza, our President and Chief Executive Officer, Gary
Gemignani, our Chief Financial Officer and Dr. Alan Krasner, our Chief Medical Officer. The loss of the services
of any of these persons might impede the achievement of our research, development and commercialization
objectives. Replacing key employees may be difficult and time-consuming because of the limited number of
individuals in our industry with the skills and experiences required to develop, gain regulatory approval of and
commercialize our product candidates successfully. We generally do not maintain key person life insurance to
cover the loss of any of our employees.
Recruiting and retaining qualified scientific personnel, clinical personnel and sales and marketing
personnel will also be critical to our success. We may not be able to attract and retain these personnel on
acceptable terms, if at all, given the competition among numerous pharmaceutical and biotechnology companies
for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from
other companies, universities and research institutions. In addition, we rely on consultants and advisors, including
scientific and clinical advisors, to assist us in formulating our research and development and commercialization
strategy. Our consultants and advisors may be employed by employers other than us and may have commitments
under consulting or advisory contracts with other entities that may limit their availability to us.
We may expand our development, regulatory and sales and marketing capabilities, and as a result, we may
encounter difficulties in managing our growth, which could disrupt our operations.
If our development and commercialization plans for any of our product candidates are successful, we
may experience significant growth in the number of our employees and the scope of our operations, particularly
in the areas of manufacturing, clinical trials management, and regulatory affairs. To manage our possible future
growth, we must continue to implement and improve our managerial, operational and financial systems and
continue to recruit and train additional qualified personnel. Due to our limited financial resources we may not be
able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. Any
inability to manage growth could delay the execution of our business plans or disrupt our operations.
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Risks Related to Our Common Stock
Provisions in our corporate charter documents and under Delaware law could make an acquisition of us,
which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to
replace or remove our current management.
Provisions in our corporate charter and bylaws may discourage, delay or prevent a merger, acquisition
or other change in control of us that stockholders may consider favorable, including transactions in which you
might otherwise receive a premium for your shares. These provisions could also limit the price that investors
might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our
common stock. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace
or remove our current management by making it more difficult for stockholders to replace members of our board
of directors. Because our board of directors is responsible for appointing the members of our management team,
these provisions could in turn affect any attempt by our stockholders to replace current members of our
management team.
Among others, these provisions:
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establish a classified board of directors such that not all members of the board are elected at one
time;
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allow the authorized number of our directors to be changed only by resolution of our board of
directors;
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limit the manner in which stockholders can remove directors from the board;
•
establish advance notice requirements for stockholder proposals that can be acted on at
stockholder meetings and nominations to our board of directors;
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require that stockholder actions must be effected at a duly called stockholder meeting and prohibit
actions by our stockholders by written consent;
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limit who may call stockholder meetings;
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authorize our board of directors to issue preferred stock without stockholder approval, which
could be used to institute a stockholder rights plan or “poison pill” that would work to dilute the
stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not
been approved by our board of directors; and
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require the approval of the holders of at least 75% of the votes that all our stockholders would be
entitled to cast to amend or repeal certain provisions of our charter or bylaws.
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In addition, because we are incorporated in Delaware, we are governed by the provisions of Section
203 of the Delaware General Corporation Law, which generally prohibits a person who owns in excess of 15% of
our outstanding voting stock from merging or combining with us for a period of three years after the date of the
transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or
combination is approved in a prescribed manner.
Because our stock price is volatile, purchasers of our common stock could incur substantial losses.
Our stock price has been and may continue to be volatile. The stock market in general and the market
for biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the
operating performance of particular companies. The market price for our common stock may be influenced by
many factors, including:
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results of clinical trials of our product candidates or those of our competitors;
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regulatory or legal developments in the United States and other countries;
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variations in our financial results or those of companies that are perceived to be similar to us;
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developments or disputes concerning patents or other proprietary rights;
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the recruitment or departure of key personnel;
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changes in the structure of healthcare payment systems;
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•
market conditions in the pharmaceutical and biotechnology sectors and issuance of new or
changed securities analysts’ reports or recommendations;
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general economic, industry and market conditions; and
•
the other factors described in this “Risk Factors” section.
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Our outstanding warrants may be exercised, and our outstanding shares of preferred stock may be converted,
in the future, which would increase the number of shares in the public market and result in dilution to our
stockholders.
As a result of our May 2011 registered direct offering and June 2012 private placement, we have
outstanding warrants to purchase 2,256,929 shares of our common stock at $9.92 per share and 2,749,469 shares
of our common stock at $2.66 per share. The $9.92 per share warrants expire in May 2016 and the $2.66 per
share warrants expire in June 2017. We also have outstanding shares of Series B preferred stock that are
convertible into 1,950,000 shares of common stock. In June and September 2013 an aggregate of 1,655,607
shares of Series B preferred stock were converted into an equal number of shares of common stock. The exercise
of these warrants for, or the conversion of shares of Series B preferred stock into, shares of common stock would
be substantially dilutive to the outstanding shares of common stock. Any dilution or potential dilution may cause
our stockholders to sell their shares, which would contribute to a downward movement in the stock price of our
common stock.
We have never paid any cash dividends on our common stock and we do not anticipate paying any cash
dividends in the foreseeable future.
We have paid no cash dividends on our common stock to date. We currently intend to retain our future
earnings, if any, to fund the development and growth of our business. In addition, the terms of any future debt
agreements may preclude us from paying dividends. As a result, we do not expect to pay any cash dividends in
the foreseeable future, and payment of cash dividends, if any, will depend on our financial condition, results of
operations, capital requirements and other factors and will be at the discretion of our board of directors.
Furthermore, we may in the future become subject to contractual restrictions on, or prohibitions against, the
payment of dividends. Capital appreciation, if any, of our common stock will be investors’ sole source of gain for
the foreseeable future.
We incur substantial costs as a result of operating as a public company, and our management is required to
devote substantial time to comply with public company regulations.
We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 as
well as other federal and state laws. These requirements may place a strain on our people, systems and resources.
The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and
financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and
procedures and internal controls over financial reporting. In order to maintain and improve the effectiveness of
our disclosure controls and procedures and internal controls over financial reporting, significant resources and
management oversight are required. This may divert management’s attention from other business concerns,
which could have a material adverse effect on our business, financial condition, results of operations and cash
flows.
Risks Related to this Offering
Investors in this offering will suffer immediate and substantial dilution.
Because the price per share of our common stock being offered is substantially higher than the book
value per share of our common stock, you will suffer substantial dilution in the net tangible book value of the
common stock you purchase in this offering. If you purchase shares of common stock in this offering, you will
suffer immediate and substantial dilution of $0.22 per share in the net tangible book value of the common stock,
assuming a public offering price of $1.18, which was the last reported sale price of our common stock on Nasdaq
on April 1, 2015, and after deducting underwriting discounts and offering expenses payable by us. See the section
entitled “Dilution” below for a more detailed discussion of the dilution you will incur if you purchase common
stock in this offering.
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We will have considerable discretion over the use of the proceeds of this offering and may not realize an
adequate return.
We will have considerable discretion in the application of the net proceeds of this offering. We have
not determined the amount of net proceeds that we will apply to various corporate purposes. We may use the
proceeds for purposes that do not yield a significant return, if any, for our stockholders.
Future sales or issuances of our common stock may cause the market price of our common stock to decline.
The sale of substantial amounts of our common stock, whether directly by us or in the secondary
market by existing securityholders (including holders of our outstanding warrants and convertible preferred
stock), the perception that such sales could occur or the availability for future sale of shares of our common stock
or securities convertible into or exchangeable or exercisable for our common stock could materially and
adversely affect the market price of our common stock and our ability to raise capital through future offerings of
equity or equity related securities. Any such sales may result in significant dilution to our existing shareholders,
including you. We cannot assure you that we will be able to sell shares or other securities in any other offering at
a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors
purchasing shares or other securities in the future could have rights superior to existing stockholders, which will
result in additional dilution to you.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents we incorporate by reference in this prospectus contain forwardlooking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve
substantial risks and uncertainties. All statements, other than statements of historical facts, included or
incorporated by reference in this prospectus and the documents we incorporate by reference in this prospectus
regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects,
plans and objectives of management are forward-looking statements. The words “anticipates,” “believes,”
“could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,”
“would” and similar expressions are intended to identify forward-looking statements, although not all forwardlooking statements contain these identifying words.
Our forward-looking statements in this prospectus and the documents we incorporate by reference in
this prospectus are subject to a number of known and unknown risks and uncertainties that could cause actual
results, performance or achievements to differ materially from those described or implied in the forward-looking
statements, including:
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the progress, timing or success of our research and development and clinical programs for our
product candidates, particularly our GEM product candidate, which comprises lyophilized
glucagon and an aqueous diluent in an automatic reconstitution device, and our concentrated ultrarapid-acting insulin product candidate, BIOD-531, which uses RHI, as the active pharmaceutical
ingredient in a concentration of 400 units per milliliter;
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our ability to conduct the development work necessary to finalize the formulation and presentation
of our GEM product candidate, as well as the preclinical studies, clinical trials and manufacturing
activities necessary to support the submission of an NDA, to the FDA, for that product candidate;
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the ability and willingness of our existing strategic partners, service providers and suppliers, upon
which we rely in the advancement of our product candidates, to meet the obligations set forth in
our agreements with them, including Unilife, which is responsible for designing and
manufacturing the device intended for use with our GEM product candidate, as well as delivering
three registration lots of the filled and finished GEM device required for submitting an NDA to the
FDA;
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the success of our formulation development work to improve the stability of our newer ultra-rapidacting insulin analog-based formulations while maintaining the pharmacokinetic and injection site
toleration characteristics associated with earlier formulations;
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the results of our real-time stability programs for our glucagon-, RHI-, and insulin analog-based
product candidates, including the reproducibility of earlier, smaller scale, stability studies and our
ability to accurately project long term stability on the basis of accelerated testing;
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our ability to accurately anticipate technical challenges that we may face in the development of
our glucagon-, RHI-, and insulin analog-based product candidates;
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our ability to secure approval by the FDA for our product candidates under Section 505(b)(2) of
the FFDCA;
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our ability to enter into collaboration arrangements for the commercialization of our product
candidates and the success or failure of any such collaborations into which we enter, or our ability
to commercialize our product candidates ourselves;
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our ability to enforce our patents for our product candidates and our ability to secure additional
patents for our product candidates;
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our ability to protect our intellectual property and operate our business without infringing upon the
intellectual property rights of others;
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the degree of clinical utility of our product candidates, particularly with regard to our ultra-rapidacting insulin formulations, which have not yet been shown to be clinically superior to existing
rapid-acting insulin analogs;
​
​
​
​
​
​
​
​
​
​
​
​
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•
the emergence of competing technologies and products and other adverse market developments,
such as advancements in glucagon stabilization technologies that could enable a room-temperature
rescue product in a portable, easy to use presentation;
•
the ability of our contract manufacturing organizations or collaborators to properly produce our
products in our final dosage form and in the quantities we may require;
•
our ability to secure adequate supplies of active pharmaceutical ingredients to support our product
development programs and, if successful, the commercialization one or more product candidates;
•
our capabilities and strategies for manufacturing, marketing and commercializing a product
candidate; and
•
our ability to accurately estimate anticipated operating losses, future revenues, capital
requirements and our needs for additional financing.
​
​
​
​
​
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking
statements, and you should not place undue reliance on our forward-looking statements. Actual results or events
could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we
make. We have included or incorporated by reference important factors in the cautionary statements included in
this prospectus, particularly in the “Risk Factors” section, that could cause actual results or events to differ
materially from the forward-looking statements that we make.
You should read this prospectus, the documents incorporated by reference in this prospectus and the
documents that have been filed as exhibits to the registration statement of which this prospectus forms a part or to
any document incorporated by reference herein completely and with the understanding that our actual future
results may be materially different from what we expect. It is routine for internal projections and expectations to
change as the year, or each quarter in the year, progresses, and, therefore, it should be clearly understood that the
internal projections and beliefs upon which we base our expectations are made as of the date of this prospectus
and may change prior to the end of each quarter or the year. While we may elect to update forward-looking
statements at some point in the future, we do not assume any obligation to update any forward-looking statements
contained or incorporated by reference in this prospectus.
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USE OF PROCEEDS
We estimate that the net proceeds to us from this offering, after deduction of the underwriting discount
and payment of estimated offering expenses, will be approximately $27,850,000 (or approximately $32,068,750
if the underwriters’ over-allotment option is exercised in full), assuming a public offering price of $1.18 per
share, which was the last reported sale price of our common stock on Nasdaq on April 1, 2015.
We intend to use the net proceeds from this offering for operating costs, capital expenditures and for
general corporate purposes, including working capital. We may also use a portion of the net proceeds to invest in
or acquire businesses or technologies that we believe are complementary to our own, although we have no current
plans, commitments or agreements with respect to any acquisitions as of the date of this prospectus.
We expect to utilize the proceeds of this offering in part to:
•
conduct the clinical development work required for the submission of an NDA for our GEM
product candidate to the FDA;
•
complete the technology transfer and related chemistry, manufacturing and controls development
work necessary for the manufacture of our GEM product candidate on a commercial scale, and
produce the registration batches required for the approval by the FDA of both an adult and a
pediatric presentation of the product candidate;
•
submit an NDA for our GEM product candidate to the FDA; and
•
conduct a multidose, multicenter, outpatient, parallel group Phase 2 clinical trial with our BIOD531 product candidate and related toxicology and chemistry, manufacturing and controls
development work supportive of Phase 3 pivotal trials.
​
​
​
​
​
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CAPITALIZATION
The following table sets forth our cash, cash equivalents and capitalization as of December 31, 2014 on
an actual basis and on an as adjusted basis to reflect our receipt of estimated net proceeds of $27,850,000 from
the sale of shares of common stock in this offering, based on an assumed public offering price of $1.18 per share
(the last reported sale price of our common stock on April 1, 2015), after deducting underwriting discounts and
commissions and estimated offering expenses payable by us. The as adjusted information below is illustrative
only. Our capitalization following the closing of this offering will be adjusted based on the actual public offering
price and other terms of this offering determined at pricing.
The historical data in the table is derived from, and should be read in conjunction with, our historical
financial statements, including accompanying notes, incorporated by reference in the registration statement of
which this prospectus is a part. You should also read this table in conjunction with the section entitled
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated
financial statements and the related notes thereto from our Annual Report on Form 10-K for the year ended
September 30, 2014 and Quarterly Report on Form 10-Q for the quarter ended December 31, 2014.
December 31, 2014
(unaudited)
(in thousands, except share and per share amounts)
​ ​
Actual
​ ​ As adjusted
$ 19,726
Cash and cash equivalents
Stockholders’ equity
​ ​
Series B convertible preferred stock, $0.01 par value per share, 1,950,000 shares issued
and outstanding
Common stock, $0.01 par value per share, 23,453,075 shares issued and outstanding
Additional paid-in capital
Accumulated deficit
​
19
19
235
489
252,874
280,470
(234,246 )
(234,246 )
$ 18,882
Total capitalization
$ 47,576
$ 46,732
​
Common stock outstanding listed in the table above as of December 31, 2014 does not include:
•
5,006,398 shares underlying outstanding warrants,
•
1,950,000 shares underlying outstanding Series B Preferred Stock,
•
3,462,516 shares underlying outstanding stock options, or
•
131,128 outstanding RSUs.
​
​
​
​
​
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PRICE RANGE OF COMMON STOCK
Our common stock is listed for trading on The NASDAQ Capital Market under the symbol “BIOD.”
On April 1, 2015, the last reported sale price of our common stock was $1.18 per share. On March 31, 2015,
there were approximately 33 record holders of our common stock.
The following table sets forth the high and low sale prices per share for our common stock for the
periods indicated.
​ ​ High ​ ​ Low
​
Fiscal Year Ended September 30, 2013
​ ​
st
​
1 Quarter
2 nd Quarter
3 rd Quarter
$2.98
2.97
5.11
$2.13
2.29
2.48
4 th Quarter
6.08
3.05
Fiscal Year Ended September 30, 2014
​ ​
1 st Quarter
2 nd Quarter
3 rd Quarter
4 th Quarter
​
$3.24
3.71
2.94
2.21
Fiscal Year Ending September 30, 2015
1 st Quarter
2 nd Quarter
3 rd Quarter (through April 1, 2015)
​ ​
​
$1.68
2.00
1.19
29
$1.93
2.23
1.97
1.61
$1.20
1.14
1.15
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DIVIDEND POLICY
We have never paid or declared any cash dividends on our common stock. Our board of directors sets
our dividend policy. We currently intend to retain all available funds and any future earnings for use in the
operation and expansion of our business, but we may determine in the future to declare or pay cash dividends on
our common stock. Any future determination as to the declaration and payment of dividends will be at the
discretion of our board of directors and will depend on then existing conditions, including our financial condition,
results of operations, contractual restrictions, capital requirements, business prospects and other factors that our
board of directors considers relevant.
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DILUTION
If you invest in our common stock in this offering, your ownership interest will be diluted to the extent
of the difference between the public offering price per share and the pro forma net tangible book value per share
after this offering. We calculate net tangible book value per share by dividing the net tangible book value, which
is tangible assets less total liabilities, by the number of outstanding shares of our common stock.
Our net tangible book value per share as of December 31, 2014 was approximately $18,843,000, or
$0.80 per share. After giving effect to the sale by us of $30,000,000 of shares of common stock offered by this
prospectus at an assumed public offering price of $1.18 per share (the last reported sale price of our common
stock on April 1, 2015) and after deducting underwriting discounts and estimated offering expenses payable by
us, our pro forma net tangible book value as of December 31, 2014 would have been approximately $46.7
million, or $0.96 per share. This represents an immediate increase in pro forma net tangible book value of $0.16
per share to existing stockholders and an immediate dilution of $0.22 per share to new investors purchasing our
common stock in this offering. The following table illustrates the per share dilution:
Public offering price per share
Net tangible book value per share as of December 31, 2014
Increase in net tangible book value per share after this offering
Pro forma net tangible book value per share as of December 31, 2014, after giving effect to
this offering
Dilution per share to new investors in this offering
$1.18
$0.80
$0.16
$0.96
$0.22
The information above assumes that the underwriters do not exercise their over-allotment option. If the
underwriters exercise their over-allotment option in full, our net tangible book value per share after giving effect
to this offering would be $0.97 per share, and the dilution in net tangible book value per share to investors in this
offering would be $0.21 per share.
The above discussion and table are based on 23,453,075 shares of our common stock outstanding as of
December 31, 2014 and does not include:
•
5,006,398 shares underlying outstanding warrants,
•
1,950,000 shares underlying outstanding Series B Preferred Stock,
•
3,462,516 shares underlying outstanding stock options, or
•
131,128 outstanding RSUs.
​
​
​
​
​
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DESCRIPTION OF CAPITAL STOCK
Authorized Capital Stock
The following descriptions of our capital stock and provisions of our certificate of incorporation and
bylaws are summaries and are qualified by reference to our second amended and restated certificate of
incorporation, as amended, and our amended and restated bylaws. We have filed copies of these documents with
the SEC as exhibits to the registration statement of which this prospectus forms a part.
Our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.01 per
share, and 50,000,000 shares of preferred stock, par value $0.01 per share.
Common Stock
As of March 31, 2015, we had 24,620,322 shares of common stock outstanding.
Each holder of our common stock is entitled to one vote for each share on all matters submitted to a
vote of our stockholders. Holders of our common stock do not have cumulative voting rights. An election of
directors by our stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to
vote on the election. Holders of common stock are entitled to receive proportionately any dividends that may be
declared by our board of directors, subject to any preferential dividend rights of outstanding preferred stock.
If we liquidate, dissolve or wind up, the holders of our common stock are entitled to share ratably in all
assets legally available for distribution to our stockholders after the payment of all of our debts and other
liabilities and the satisfaction of any liquidation preference granted to the holders of any outstanding shares of our
preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights.
The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected
by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the
future.
Preferred Stock
Under the terms of our certificate of incorporation, our board of directors is authorized to issue shares
of preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to
determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion
rights, redemption privileges and liquidation preferences, of each series of preferred stock.
Our board of directors has designated 2,000,000 of the 50,000,000 authorized shares of preferred stock
as Series A Convertible Preferred Stock and 4,000,000 of the 50,000,000 authorized shares of preferred stock as
Series B Convertible Preferred Stock. As of December 31, 2014, we had no shares of Series A Preferred Stock
and 1,950,000 shares of Series B Preferred Stock outstanding. Subject to certain limitations preventing holders of
Series B Preferred Stock from converting their shares if, as a result of such conversion, such holder, together with
its affiliates, would beneficially own more than 9.98% of the total number of shares of common stock then issued
and outstanding, each share of Series B Preferred Stock is convertible into one share of common stock. In the
event of our liquidation, dissolution or winding up, holders of the Series B Preferred Stock will receive a
payment equal to $0.01 per share of preferred stock before any proceeds are distributed to the holders of common
stock. After the payment of this preferential amount, and subject to the rights of holders of any class or series of
capital stock specifically ranking by its terms senior to the Series B Preferred Stock, holders of the Series B
Preferred Stock will participate ratably in the distribution of any remaining assets with the common stock and any
other class or series of capital stock that participates with the common stock in such distributions. Shares of
Series B Preferred Stock generally have no voting rights, except as required by law and except that the consent of
the holders of a majority of the outstanding Series B Preferred Stock will be required to amend the terms of the
Series B Preferred Stock. Holders of Series B Preferred Stock are entitled to receive, and we are required to pay,
dividends on shares of the Series B Preferred Stock equal (on an as-if-converted-to-common-stock basis) to and
in the same form as dividends (other than dividends in the form of common stock) actually paid on shares of the
common stock when, as and if such dividends (other than dividends in the form of common stock) are paid on
shares of the common stock.
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The purpose of authorizing our board of directors to issue additional series of preferred stock and
determine the rights and preferences of any such additional series is to eliminate delays associated with a
stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection
with possible acquisitions, future financings and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of
our outstanding voting stock. This could also permit our board of directors to institute a stockholder rights plan or
“poison pill”.
Anti-Takeover Effects of Provisions of Delaware Law and Our Certificate of Incorporation and Bylaws
Delaware Law
We are subject to Section 203 of the Delaware General Corporation Law, or the DGCL. Subject to
certain exceptions, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business
combination” with an “interested stockholder” for three years following the date the person became an interested
stockholder, unless the interested stockholder attained such status with the approval of our board of directors or
unless the business combination is approved in a prescribed manner.
Section 203 of the DGCL generally defines a “business combination” to include, among other things,
any merger or consolidation involving us and the interested stockholder and the sale of more than 10% of our
assets.
In general, an “interested stockholder” is any entity or person beneficially owning 15% or more of our
voting stock or any entity or person associated or affiliated with or controlling or controlled by such entity or
person. The restrictions contained in Section 203 are not applicable to any of our existing stockholders that
owned 15% or more of our outstanding voting stock upon the closing of our initial public offering.
Staggered Board
Our certificate of incorporation and our bylaws divide our board of directors into three classes with
staggered three-year terms. In addition, our certificate of incorporation and our bylaws provide that directors may
be removed only for cause and only by the affirmative vote of the holders of 75% of our shares of capital stock
present in person or by proxy and entitled to vote. Under our certificate of incorporation and bylaws, any vacancy
on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be
filled only by vote of a majority of our directors then in office. Furthermore, our certificate of incorporation
provides that the authorized number of directors may be changed only by the resolution of our board of directors.
The classification of our board of directors and the limitations on the ability of our stockholders to remove
directors, change the authorized number of directors and fill vacancies could make it more difficult for a third
party to acquire, or discourage a third party from seeking to acquire, control of our company.
Stockholder Action; Special Meeting of Stockholders; Advance Notice Requirements for Stockholder
Proposals and Director Nominations
Our certificate of incorporation and our bylaws provide that any action required or permitted to be
taken by our stockholders at an annual meeting or special meeting of stockholders may only be taken if it is
properly brought before such meeting and may not be taken by written action in lieu of a meeting. Our certificate
of incorporation and our bylaws also provide that, except as otherwise required by law, special meetings of the
stockholders can only be called by our chairman of the board, our president or chief executive officer or our
board of directors. In addition, our bylaws establish an advance notice procedure for stockholder proposals to be
brought before an annual meeting of stockholders, including proposed nominations of candidates for election to
the board of directors. Stockholders at an annual meeting may only consider proposals or nominations specified
in the notice of meeting or brought before the meeting by or at the direction of the board of directors, or by a
stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has
delivered timely written notice in proper form to our secretary of the stockholder’s intention to bring such
business before the meeting. These provisions could have the effect of delaying until the next stockholder
meeting stockholder actions that are favored by the holders of a majority of our outstanding voting securities.
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Super-Majority Voting
The DGCL provides generally that the affirmative vote of a majority of the shares entitled to vote on
any matter is required to amend a corporation’s certificate of incorporation or bylaws, unless a corporation’s
certificate of incorporation or bylaws, as the case may be, requires a greater percentage. Our bylaws may be
amended or repealed by a majority vote of our board of directors or the affirmative vote of the holders of at least
75% of the votes that all our stockholders would be entitled to cast in any annual election of directors. In
addition, the affirmative vote of the holders of at least 75% of the votes that all our stockholders would be
entitled to cast in any election of directors is required to amend or repeal or to adopt any provisions inconsistent
with any of the provisions of our certificate of incorporation described above.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Continental Stock Transfer & Trust Company.
NASDAQ Capital Market Listing
Our common stock is listed on Nasdaq under the trading symbol “BIOD.”
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UNDERWRITING
The underwriters named below have severally agreed, subject to the terms and conditions set forth in
the underwriting agreement by and between us and the William Blair & Company, L.L.C., as representative of
the underwriters, to purchase from us the respective number of shares of common stock set forth opposite each
underwriter’s name in the table below.
Underwriter
​ ​ Number of Shares
William Blair & Company, L.L.C.
​ ​
​
Ladenburg Thalmann & Co. Inc.
Roth Capital Partners, LLC
Total
​ ​
​
​ ​
​
​ ​
​
This offering will be underwritten on a firm commitment basis. In the underwriting agreement, the
underwriters have agreed, subject to the terms and conditions set forth therein, to purchase the shares of common
stock being sold pursuant to this prospectus at a price per share equal to the public offering price less the
underwriting discount specified on the cover page of this prospectus. According to the terms of the underwriting
agreement, the underwriters will purchase all of the shares (other than those covered by the over-allotment option
described below) offered by us if they purchase any shares. In the event of default by any underwriter, in certain
circumstances, the purchase commitments of the non-defaulting underwriters may be increased or the
underwriting agreement may be terminated.
We have granted an option to the underwriters to purchase up to
additional shares of our
common stock at the same price per share to be paid by the underwriters for the other shares offered hereby. The
underwriters may exercise this option for 30 days from the date of this prospectus solely to cover any overallotments, if any. If any additional shares of common stock are purchased, the underwriters will offer the
additional shares on the same terms as those on which the shares are being offered. If the underwriters purchase
any additional shares pursuant to this option, each of the underwriters will be committed to purchase the
additional shares in approximately the same proportion as set forth in the table above. The underwriters may
exercise the option only for the purpose of covering excess sales, if any, made in connection with the distribution
of the shares of common stock offered hereby. The underwriters will offer any additional shares that they
purchase on the terms described in the following paragraph.
The representative has advised us that the underwriters propose to offer the common stock to the public
initially at the public offering price set forth on the cover page of this prospectus and to selected dealers at such
price less a concession of not more than $    per share. The underwriters will offer the shares subject to prior
sale and subject to receipt and acceptance of the shares by the underwriters. The underwriters may reject any
order to purchase shares in whole or in part. The underwriters expect that we will deliver the shares to the
underwriters through the facilities of The Depository Trust Company in New York, New York on or about
  , 2015. At that time, the underwriters will pay us for the shares in immediately available funds. After
commencement of the public offering, the representative may change the public offering price and other selling
terms.
The following table summarizes the compensation to be paid by us to the underwriters assuming either
no exercise or full exercise of the underwriters’ option to purchase additional shares.
Total
​
​ ​
​
Without
With
Over-allotment
Over-allotment
Exercise
Exercise
​ ​ Per Share ​ ​
​ ​
​ ​
Public offering price
Underwriting discount
$      
$
$         
$
$         
$
Proceeds, before expenses
$
$
$
​
We estimate that the total expenses for this offering, excluding the underwriting discount, will be
approximately $275,000.
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No Sales of Similar Securities
We and our executive officers and directors have agreed with the underwriters, subject to certain
exceptions, not to sell or transfer any common stock or securities convertible into, exchangeable for, or
exercisable for, common stock, other than the securities which we may sell in this offering, for 90 days after the
date of this prospectus without the prior written consent of William Blair & Company, L.L.C. on behalf of the
underwriters. Specifically, we and our executive officers and directors have agreed not to:
•
offer, pledge, sell or contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or
dispose of, either directly or indirectly, any shares of common stock or any securities convertible
into or exercisable or exchangeable for common stock;
•
file or cause to become effective a registration statement under the Securities Act relating to the
offer and sale of any shares of common stock or securities convertible into or exercisable or
exchangeable for shares of common stock;
•
enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the common stock, whether any such transaction is to be
settled by delivery of common stock or such other securities, in cash or otherwise;
•
make any demand for or exercise any right with respect to the registration of any shares of our
common stock or any securities convertible into or exercisable or exchangeable for our common
stock; or
•
publicly announce an intention to effect any transaction described in this list.
​
​
​
​
​
The 90-day period in all of the agreements is subject to extension if (i) during the last 17 days of the
restricted period we issue an earnings release or material news or a material event relating to us occurs or (ii)
prior to the expiration of the restricted period, we announce that we will release earnings results during the 16day period beginning on the last day of the restricted period, in which case the restrictions imposed in these lockup agreements shall continue to apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event. This extension will not apply if the
publication of research reports by the underwriters during the period around the expiration of the restricted period
is no longer restricted by applicable law or regulation.
We have agreed to indemnify the underwriters and their controlling persons against certain liabilities
for misstatements in the registration statement of which this prospectus forms a part, including liabilities under
the Securities Act of 1933, as amended, or to contribute to payments the underwriters may be required to make in
respect thereof. We have also agreed to reimburse the underwriters for all reasonable third-party costs, fees and
expenses not to exceed, without our consent, $75,000.
The representative has informed us that the underwriters intend to deliver all copies of this prospectus
via electronic means, via hand delivery or through mail or courier services.
Stabilization
In connection with this offering, the underwriters and other persons participating in this offering may
engage in transactions which affect the market price of the common stock. These may include stabilizing and
over-allotment transactions and purchases to cover syndicate short positions. Stabilizing transactions consist of
bids or purchases for the purpose of pegging, fixing or maintaining the price of the common stock. An overallotment involves selling more shares of common stock in this offering than are specified on the cover page of
this prospectus, which results in a syndicate short position. The underwriters may cover this short position by
purchasing common stock in the open market or by exercising all or part of their over-allotment option.
In addition, the representative may impose a penalty bid. This allows the representative to reclaim the
selling concession allowed to an underwriter or selling group member if shares of common stock sold by such
underwriter or selling group member in this offering are repurchased by the representative in stabilizing or
syndicate short covering transactions. These transactions, which may be effected on Nasdaq
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or otherwise, may stabilize, maintain or otherwise affect the market price of the common stock and could cause
the price to be higher than it would be without these transactions. The underwriters and other participants in this
offering are not required to engage in any of these activities and may discontinue any of these activities at any
time without notice. We and the underwriters make no representation or prediction as to whether the underwriters
will engage in such transactions or choose to discontinue any transactions engaged in or as to the direction or
magnitude of any effect that these transactions may have on the price of the common stock.
This prospectus may be made available in electronic format on websites or through other online
services maintained by the underwriters or by an affiliate of the underwriters. Other than this prospectus in
electronic format, the information on the underwriters’ websites and any information contained in any other
websites maintained by the underwriters is not part of this prospectus or the registration statement of which this
prospectus forms a part, has not been approved and/or endorsed by us or the underwriters.
Regulation M
One or more of the underwriters currently act as a market maker for our common stock and may engage
in “passive market making” in such securities on Nasdaq in accordance with Rule 103 of Regulation M under the
Exchange Act. Rule 103 permits, upon the satisfaction of certain conditions, underwriters participating in a
distribution that are also Nasdaq market makers in the security being distributed to engage in limited market
making transactions during the period when Regulation M would otherwise prohibit such activity. Rule 103
prohibits underwriters engaged in passive market making generally from entering a bid or effecting a purchase
price that exceeds the highest bid for those securities displayed on Nasdaq by a market maker that is not
participating in the distribution. Under Rule 103, each underwriter engaged in passive market making is subject
to a daily net purchase limitation equal to the greater of (i) 30% of such entity’s average daily trading volume
during the two full calendar months immediately preceding, or any consecutive 60 calendar days ending within
the ten calendar days preceding, the date of the determination of the offering price of the common stock to be
distributed or (ii) 200 shares of common stock.
Listing
Our common stock is listed on Nasdaq under the symbol “BIOD.”
Affiliations
The underwriters and their respective affiliates may provide various investment banking, financial
advisory and other services to us and our affiliates for which services they have received, and may in the future
receive, customary fees. In the course of their businesses, the underwriters and their respective affiliates may
actively trade our securities or loans for their own account or for the accounts of customers, and, accordingly, the
underwriters and their respective affiliates may at any time hold long or short positions in such securities or
loans.
General
The foregoing does not purport to be a complete statement of the terms and conditions of the
underwriting agreement. A copy of the underwriting agreement is included as an exhibit to the Registration
Statement of which this prospectus forms a part. See “Where You Can Find More Information” below.
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LEGAL MATTERS
The validity of the securities being offered by this prospectus is being passed upon for us by Wiggin
and Dana LLP, Stamford, Connecticut. Morrison & Foerster LLP, New York, New York, is counsel for the
underwriters in connection with this offering.
EXPERTS
The financial statements as of September 30, 2014 and 2013 and for each of the years then ended
incorporated by reference in this Prospectus have been so incorporated in reliance on the report of BDO USA,
LLP, an independent registered public accounting firm (the report on the financial statements contains an
explanatory paragraph regarding the Company’s ability to continue as a going concern), incorporated herein by
reference, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC as required by the Exchange Act.
You can find, copy and inspect information we file at the SEC’s public reference room at 100 F Street, N.E.,
Room 1580, Washington, D.C. 20549. You can call the SEC at 1-800-SEC-0330 for further information about
the public reference room. You can review our electronically filed reports, proxy and information statements on
the SEC’s website at http://www.sec.gov or on our website at http://www.biodel.com. Information included on
our website is not a part of this prospectus.
This prospectus is part of a registration statement that we filed with the SEC. The registration statement
contains more information than this prospectus regarding us and the securities, including exhibits and schedules.
You can obtain a copy of the registration statement from the SEC at any address listed above or from the SEC’s
website.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” into this prospectus information that we file with the
SEC in other documents. This means that we can disclose important information to you by referring to other
documents that contain that information. The information incorporated by reference is considered to be part of
this prospectus. Pursuant to Rule 412 under the Securities Act, information contained in this prospectus modifies
and supersedes previously filed information, including information in previously filed documents or reports that
have been incorporated by reference in this prospectus, to the extent the new information differs from or is
inconsistent with the old information. Any information so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this prospectus.
We incorporate by reference, as of their respective dates of filing, the documents listed below that we
have filed with the SEC (in each case, other than those documents or the portions of those documents not deemed
to be filed):
•
our Annual Report on Form 10-K for the fiscal year ended September 30, 2014, as filed with the
SEC on December 19, 2014;
•
our Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2014, as filed
with the SEC on February 12, 2015;
•
our Current Reports on Form 8-K filed with the SEC on January 7, 2015, March 16, 2015 (Item
8.01 and Exhibit 99.2 only) and March 18, 2015;
•
our Proxy Statement, as amended and restated, filed with the SEC on February 24, 2015; and
•
the description of our common stock contained in our Registration Statement on Form 8-A dated
May 8, 2007, including any amendments or reports filed for the purpose of updating that
description.
​
​
​
​
​
​
38
TABLE OF CONTENTS
You may request a copy of these documents, which will be provided to you at no cost, by writing or
telephoning us using the following contact information:
Biodel Inc.
100 Saw Mill Road
Danbury, Connecticut 06810
Attention: General Counsel
Telephone: (203) 796-5000
You may also obtain these filings through our website located at http://www.biodel.com. This reference
to our website is intended to be an inactive textual reference and, except for the documents incorporated by
reference as noted above, the information on, or accessible through, our website is not intended to be a part of
this prospectus.
39
TABLE OF CONTENTS
$30,000,000
Common Stock
​
           , 2015
​
William Blair
Ladenburg Thalmann
Roth Capital Partners
TABLE OF CONTENTS
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
n
​
The following table sets forth the fees and expenses to be incurred in connection with the registration of
the securities being registered hereby, all of which will be borne by the registrant. Except for the SEC registration
fee, all amounts are estimates.
Description
Amount
​ ​
SEC registration fee
FINRA filing fee
Accounting fees and expenses
Legal fees and expenses
Transfer agent and registrar fees and expenses
Printing and engraving expenses
Miscellaneous expenses
$
4,008.90
5,000.00
43,800.00
175,000.00
21,000.00
20,000.00
6,191.10
Total expenses
$ 275,000.00
​
Item 14. Indemnification of Directors and Officers
​
Section 145 of the Delaware General Corporation Law, or the DGCL, generally provides that a
corporation may indemnify an officer, director, employee or agent of the corporation and certain other persons
serving at the request of the corporation in related capacities against expenses, including, attorney’s fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection
with an action, suit or proceeding to which he or she is or is threatened to be made a party by reason of such
position, provided that the person acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the corporation’s best interests and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his or her conduct was illegal. In the case of actions brought by or in the right of
the corporation, no indemnification is permitted without judicial approval if the officer or director is adjudged to
be liable to the corporation, unless and only to the extent that the Court of Chancery or other adjudicating court
determines that, despite the adjudication liability but in view of all of the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
The registrant’s certificate of incorporation provides for the indemnification of its directors and
executive officers to the fullest extent permitted under the DGCL. As permitted by Delaware law, the registrant
has entered into indemnity agreements with each of its directors and executive officers. These agreements
generally require the registrant to indemnify its directors and executive officers against any and all expenses
(including attorneys’ fees), witness fees, damages, judgments, fines, settlements and other amounts incurred
(including expenses of a derivative action) in connection with any action, suit or proceeding, whether actual or
threatened, to which any of these individuals may be made a party by reason of the fact that he or she is or was a
director, officer, employee, or other agent of the registrant or serving at its request as a director, officer,
employee, or other agent of another corporation or enterprise, provided that he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the registrant’s best interests and, with respect to
any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. Under the
indemnification agreements, all expenses incurred by one of the registrant’s directors or executive officers in
defending any such action, suit or proceeding in advance of its final disposition shall be paid by the registrant
upon delivery to it of an undertaking, by or on behalf of the director or executive officer, to repay all advanced
amounts if it is ultimately determined that the director or executive officer is not entitled to be indemnified by the
registrant under his or her indemnification agreement, the registrant’s amended and restated bylaws or the DGCL.
The indemnification agreements also set forth certain procedures that will apply in the event any of the
registrant’s directors or executive officers brings a claim for indemnification under his or her indemnification
agreement.
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In addition, Section 102(b)(7) of the DGCL permits a corporation to provide that a director of the
corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach
of fiduciary duties as a director, except for liability for:
•
any transaction from which the director derives an improper personal benefit;
•
acts or omissions not in good faith or that involve intentional misconduct or a knowing violation
of law;
•
unlawful payment of dividends or unlawful stock purchases or redemptions of shares; or
•
any breach of a director’s duty of loyalty to the corporation or its stockholders.
​
​
​
​
The registrant’s certificate of incorporation includes such a provision.
There is currently no pending litigation or proceeding involving any of the registrant’s directors or
executive officers for which indemnification is being sought. The registrant is not currently aware of any
threatened litigation that may result in claims for indemnification against it by any of its directors or executive
officers.
The registrant maintains an insurance policy covering its officers and directors with respect to certain
liabilities arising out of claims based on acts or omissions in their capacities as officers and directors.
Item 15. Recent Sales of Unregistered Securities
​
On June 21, 2012, the registrant entered into a Securities Purchase Agreement with a group of
institutional investors for the private placement of approximately 7.9 million shares of the registrant’s capital
stock and warrants to purchase approximately 2.7 million shares of the registrant’s common stock. A portion of
the shares issued were shares of common stock and a portion were shares of the registrant’s Series B Convertible
Preferred Stock. The common stock, Series B Preferred Stock and warrants were offered and sold to selected
institutional investors and other accredited investors without registration under the Securities Act or state
securities laws, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and Regulation D
promulgated thereunder and in reliance on similar exemptions under applicable state laws.
On July 25, 2014, the registrant entered into a purchase agreement, together with a related registration
rights agreement, with Lincoln Park Capital Fund, LLC, pursuant to which the registrant has the right to sell to
Lincoln Park up to $15,000,000 in shares of common stock, subject to certain limitations, from time to time over
the 36-month period commencing on the date that a registration statement covering the resale of the shares
subject to the purchase agreement is declared effective by the SEC. The offering, issuance and sale of shares of
common stock by the registrant pursuant to the purchase agreement was made without registration under the
Securities Act or state securities laws, in reliance on exemptions provided by Section 4(a)(2) of the Securities Act
and Regulation D promulgated thereunder, and in reliance on similar exemptions under applicable state securities
laws, based on the offering, issuance and sale of such common stock to one investor; the lack of any general
solicitation or advertising in connection with such offering, issuance and sale; the representation of the sole
investor to the company that it was an accredited investor (as that term is defined in Rule 501(a)(3) of Regulation
D); the representation of the investor that it was purchasing the shares of common stock for its own account and
without a view to distributing the shares; and the restrictions on transfer that the purchase agreement places on
any securities sold thereunder.
Item 16. Exhibits and Financial Statement Schedules
​
(a) Exhibits
The exhibits to this Registration Statement are listed in the exhibit index, which appears elsewhere
herein and is incorporated herein by reference.
(b) Financial Statement Schedules
All schedules have been omitted because either they are not required, are not applicable, or the
information is otherwise set forth in the financial statements and the related notes thereto.
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Item 17. Undertakings
ngs
​
(1)
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to
directors, officers and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant 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 registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant 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 registrant 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 will be governed by the final adjudication of such issue.
(2)
The undersigned registrant hereby undertakes that:
​
​
(i)
For purposes of determining any liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus filed
by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as of the time it was
declared effective.
(ii)
For the purpose of determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus 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.
​
​
​
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of
Danbury, State of Connecticut, on April 2, 2015.
BIODEL INC.
By: /S/ ERROL DE SOUZA
​
Dr. Errol De Souza
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
Signature
Title
​ ​
​ ​
/S/ ERROL DE SOUZA
​ ​
President and Chief Executive Officer
(Principal Executive Officer), Director
Errol De Souza
​ ​
/S/ GARY G. GEMIGNANI
April 2, 2015
​ ​
Chief Financial Officer
(Principal Financial and Accounting Officer)
Gary G. Gemignani
Date
​ ​
​ ​
April 2, 2015
​ ​
*
Director
April 2, 2015
Ira W. Lieberman
​ ​
​ ​
*
Director
April 2, 2015
Julia R. Brown
​ ​
​ ​
*
Director
April 2, 2015
Barry H. Ginsberg
​ ​
​ ​
*
Director
April 2, 2015
Daniel Lorber
​ ​
​ ​
*
Director
Davey S. Scoon
*By:​ ​ /S/ PAUL S. BAVIER
Paul S. Bavier, Attorney-in-Fact
II-4
April 2, 2015
TABLE OF CONTENTS
EXHIBIT INDEX
Exhibit
Number ​ ​
1.1
††
3.1
3.2
3.3
3.4
3.5
3.6
Description
​ ​ Form of Underwriting Agreement
​ ​ Registrant’s Second Amended and Restated Certificate of Incorporation (Incorporated by reference to
Exhibit 3.4 to the registrant’s Registration Statement on Form S-1 (SEC File No. 333-140504)).
​ ​ Certificate of Designation of Series A Convertible Preferred Stock of the Registrant (Incorporated by
reference to Exhibit 4.6 to the Registrant’s Current Report on Form 8-K filed on May 19, 2011).
​ ​ Certificate of Amendment to Registrant’s Second Amended and Restated Certificate of Incorporation,
as amended (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K
filed on June 11, 2012).
​ ​ Certificate of Designation of Series B Convertible Preferred Stock of the Registrant (Incorporated by
reference to Exhibit 4.8 to the Registrant’s Current Report on Form 8-K filed on June 27, 2012).
​ ​ Certificate of Amendment of Registrant’s Second Amended and Restated Certificate of Incorporation,
as amended (Incorporated by reference to Exhibit 3.5 to the Registrant’s Annual Report on Form 10-K
filed on December 21, 2012).
​ ​ Registrant’s Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.6 to the
Registrant’s Registration Statement on Form S-1, Amendment No. 1 (333-140504), filed on May 10,
2007).
3.7
​ ​ Certificate of Amendment of Registrant’s Second Amended and Restated Certificate of Incorporation,
as amended (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K
filed on March 18, 2015).
4.1
​ ​ Specimen Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Registrant’s
Registration Statement on Form S-1, Amendment No. 1 (333-140504), filed on May 10, 2007).
​ ​ Form of Warrant to Purchase Shares of Common Stock issued in the Registrant’s May 2011 registered
direct offering (Incorporated by reference to Exhibit 4.7 to the Registrant’s Current Report on Form 8K filed on May 13, 2011).
​ ​ Form of Warrant to Purchase Common Stock issued in the Registrant’s June 2012 private placement
(Incorporated by reference to Exhibit 4.9 to the Registrant’s Current Report on Form 8-K filed on
June 22, 2012).
​ ​ Opinion of Wiggin and Dana LLP.
4.2
4.3
5.1 #
10.1* ​ ​ 2010 Stock Incentive Plan, as amended March 8, 2012 (Incorporated by reference to Exhibit A of the
Registrant’s Definitive Proxy Statement on Schedule 14A filed on January 26, 2012).
10.2* ​ ​ 2010 Incentive Stock Option Agreement (Incorporated by reference to Exhibit 10.2 to the Registrant’s
Quarterly Report on Form 10-Q filed on May 7, 2010).
10.3* ​ ​ 2010 Non Statutory Stock Option Agreement (Incorporated by reference to Exhibit 10.3 to the
Registrant’s Quarterly Report on Form 10-Q filed on May 7, 2010).
10.4* ​ ​ 2010 Restricted Stock Unit Agreement (Incorporated by reference to Exhibit 10.4 to the Registrant’s
Quarterly Report on Form 10-Q filed on May 7, 2010).
​
​
10.5*
Form of Indemnification Agreement entered into between the Registrant and its directors and certain of
its executive officers (Incorporated by reference to Exhibit 10.1 to the Registrant’s Registration
Statement on Form S-1 (333-140504) filed on February 7, 2007).
​
​
10.6*
Amended and Restated 2004 Stock Incentive Plan (Incorporated by reference to Exhibit 10.3 to the
Registrant’s Registration Statement on Form S-1, Amendment No. 1 (333-140504), filed on May 10,
2007).
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Exhibit
Number ​ ​
Description
10.7* ​ ​ 2005 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.4 to the Registrant’s
Registration Statement on Form S-1, Amendment No. 1 (333-140504), filed on May 10, 2007).
​
​
10.8*
2005 Non-Employee Directors’ Stock Option Plan (Incorporated by reference to Exhibit 10.5 to the
Registrant’s Registration Statement on Form S-1, Amendment No. 1 (333-140504), filed on May 10,
2007).
​
​
10.9*
Employment Agreement, dated March 26, 2010, between the Registrant and Errol B. De Souza
(Incorporated by reference to the Registrant’s Current Report on Form 8-K filed on April 1, 2010).
10.10* ​ ​ Change of Control Agreement entered into between the Registrant and certain of its executive officers
(Incorporated by reference to Exhibit 10.12 to the Registrant’s Registration Statement on Form S-1
(333-140504) filed on February 7, 2007).
​
​
10.11* Executive Severance Agreement entered into between the Registrant and certain of its executive
officers (Incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form
S-1 (333-140504) filed on February 7, 2007).
​
​
10.12
Commercial Lease, dated February 2, 2004, by and between the Registrant and Mulvaney Properties,
LLC and an amendment thereto dated September 29, 2006 (for the premises located at 6 Christopher
Columbus Avenue, Danbury, CT 06810) (Incorporated by reference to Exhibit 10.14 to the
Registrant’s Registration Statement on Form S-1, Amendment No. 1 (333-140504), filed on May 10,
2007).
​
​
10.13
Commercial Lease, dated October 19, 2006, by and between the Registrant and Mulvaney Properties,
LLC (for the premises located at 8 Christopher Columbus Avenue, Danbury, CT 06810) (Incorporated
by reference to Exhibit 10.15 to the Registrant’s Registration Statement on Form S-1, Amendment No.
1 (333-140504), filed on May 10, 2007).
10.14 ​ ​ Amendment to Commercial Lease, dated July 23, 2007 by and between the Registrant and Mulvaney
Properties, LLC (for the premises located at 6 Christopher Columbus Avenue, Danbury, CT 06810)
(Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on
July 27, 2007).
10.15 ​ ​ Amendment to Commercial Lease, dated July 23, 2007 by and between the Registrant and Mulvaney
Properties, LLC (for the premises located at 8 Christopher Columbus Avenue, Danbury, CT 06810)
(Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on
July 27, 2007).
10.16 ​ ​ Commercial Lease, dated July 23, 2007, by and between the Registrant and Mulvaney Properties, LLC
(for the premises located at 100 Saw Mill Road, Danbury, CT 06810) (Incorporated by reference to
Exhibit 10.1 the Registrant’s Current Report on Form 8-K filed on July 27, 2007).
​
​
10.17
Lease Amendment, dated October 1, 2007, to Commercial Lease, dated July 23, 2007, by and between
the Registrant and Mulvaney Properties, LLC (for the premises located at 100 Saw Mill Road,
Danbury, CT 06810) (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on
Form 8-K filed on October 4, 2007).
​
​
10.18
Option to Renew, dated as of November 6, 2013, to Commercial Lease, dated as of July 23, 2007, as
amended, by and between the Registrant and Mulvaney Properties, LLC (for the premises located at
100 Saw Mill Road, Danbury, CT 06810) (Incorporated by reference to Exhibit 10.15 to Registrant’s
Annual Report on Form 10-K filed on December 20, 2013).
​
​
10.19* Offer Letter, dated November 12, 2007, by and between the Registrant and Gerard J. Michel
(Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on
November 14, 2007).
10.20* ​ ​ Form of Incentive Stock Option Agreement for 2004 Amended and Restated Stock Incentive Plan
(Incorporated by reference to Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K filed on
December 21, 2007).
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Exhibit
Number ​ ​
Description
10.21* ​ ​ Form of Option Agreement for 2005 Non-Employee Directors’ Stock Option Plan (Incorporated by
reference to Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K filed on December 21,
2007).
10.22 ​ ​ At-the-Market Issuance Sales Agreement, dated May 13, 2013, between the Registrant and MLV &
Co. LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q
filed on May 13, 2013).
10.23 ​ ​ Underwriting Agreement, dated June 19, 2013, among the Registrant and the several Underwriters
named therein (Incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8K filed on June 20, 2013).
​
​
10.24
Purchase Agreement, dated as of July 25, 2014, by and between the Registrant and Lincoln Park
Capital Fund, LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on
Form 8-K filed on July 28, 2014).
10.25 ​ ​ Registration Rights Agreement, dated as of July 25, 2014, by and between the Registrant and Lincoln
Park Capital Fund, LLC (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report
on Form 8-K filed on July 28, 2014).
10.26* ​ ​ Employment Agreement, dated August 21, 2014, by and between the Registrant and Gary G.
Gemignani (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K
filed on August 27, 2014).
†​ ​
10.27
License Agreement, effective as of June 8, 2012, between Aegis Therapeutics, LLC and the Registrant
(Incorporated by reference to Exhibit 10.01 to the Registrant’s Quarterly Report on Form 10-Q filed on
August 14, 2012).
10.28 † ​ ​ Commercial Supply Agreement for Glucagon, dated July 17, 2012, among Bachem Americas, Inc.,
Bachem AG and the Registrant (Incorporated by reference to Exhibit 10.25 to Registrant’s Annual
Report on Form 10-K filed on December 20, 2013).
†​ ​
10.29
Customization and Commercial Supply Agreement, effective April 8, 2013, between Unilife Medical
Solutions, Inc. and the Registrant (Incorporated by reference to Exhibit 10.26 to Registrant’s Annual
Report on Form 10-K filed on December 20, 2013).
​
​
10.30
Form of Securities Purchase Agreement, dated as of June 21, 2012, among the Registrant and the
purchasers named therein (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report
on Form 8-K filed on June 22, 2012).
21.1 ​ ​ Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to the Registrant’s Annual
Report on Form 10-K filed on December 19, 2014).
†† ​ ​
23.1
Consent of BDO USA, LLP
23.2 # ​ ​ Consent of Wiggin and Dana LLP (included in Exhibit 5.1).
†† ​ ​
24.1
Powers of Attorney (included on signature page)
†
​
#
To be filed by amendment.
*
Indicates a management contract or compensatory plan or arrangement.
​
†
Confidential treatment granted with respect to certain portions of this exhibit. Omitted portions have
been filed separately with the Securities and Exchange Commission.
​
††
Filed herewith.
​
†††
​
​
Previously filed.
Exhibit 1.1
BIODEL INC.
Common Stock, par value $0.01 per share
Underwriting Agreement
[ ], 2015
William Blair & Company, L.L.C.,
As Representative of the several Underwriters
named in Schedule I hereto,
c/o William Blair & Company, L.L.C.
222 West Adams Street
Chicago, Illinois 60606
Ladies and Gentlemen:
Biodel Inc., a Delaware corporation (the “ Company ”), proposes, subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the “ Underwriters ”) for whom William Blair & Company, L.L.C. is acting as representative (the “
Representative ” or “ you ”) an aggregate of [ ] shares (the “ Firm Securities ”) and, at the election of the Underwriters, up to [ ] additional shares
(the “ Optional Securities ”) of common stock, par value $0.01 per share (“ Common Stock ”), of the Company (the Firm Securities and the
Optional Securities that the Underwriters elect to purchase pursuant to Section 2 hereof are herein collectively called the “ Securities ”).
The Company understands that the Underwriters propose to make a public offering of their respective portions of the Securities as soon as
you deem advisable after the registration statement hereinafter referred to becomes effective.
1.
The Company represents and warrants to, and agrees with, each of the Underwriters that:
(a)
Registration Statement .
(i)
The Company has prepared and filed with the Securities and Exchange Commission (the “ Commission ”) a
registration statement on Form S-1 (File No. 333-202874) under the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “ Securities Act ”), and such amendments to such registration statement as may have been
required to the date of this Agreement. Such registration statement has been declared effective by the Commission. Each part of such
registration statement, at any given time, including amendments thereto at such time, the exhibits and any schedules thereto at such time, the
documents incorporated by reference therein pursuant to Item 12 of Form S-1 under the Securities Act at such time and the documents and
information otherwise deemed to be a part thereof or included therein by Rule 430B or 430C under the Securities Act or otherwise pursuant
to the Securities Act at such time, is herein called the “ Registration Statement .” Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the “ Rule 462(b) Registration Statement ” and, from and after the date and time
of filing of the Rule 462(b) Registration Statement, the term “Registration Statement” shall include the Rule 462(b)
Registration Statement. The Company and the transactions contemplated by this Agreement meet the requirements and comply with the
conditions for the use of Form S-1 pursuant to General Instruction VII. The Company has complied with all requests of the Commission for
additional or supplemental information.
(ii)
No stop order preventing or suspending the effectiveness of the Registration Statement has been issued by the
Commission, and no proceedings for such purpose have been instituted or, to the Company’s knowledge, are contemplated or threatened by
the Commission.
(iii)
The prospectus in the form included in the Registration Statement or, if the prospectus included in the
Registration Statement omits certain information in reliance upon Rule 430A under the Act and such information is thereafter included in a
prospectus filed with the Commission pursuant to Rule 424(b) under the Act or as part of a post-effective amendment to the Registration
Statement after the Registration Statement becomes effective, the prospectus as so filed, is referred to in this Agreement as the “
Prospectus .” The prospectus subject to completion in the form included in the Registration Statement at the time of the initial filing of such
Registration Statement with the Commission and as such prospectus is amended from time to time until the date of the Prospectus is referred
to in this Agreement as the “ Preliminary Prospectus .” Any reference herein to any Preliminary Prospectus or the Prospectus or to any
amendment or supplement to any of the foregoing shall be deemed to include any documents incorporated by reference therein pursuant to
Item 12 of Form S-1 under the Securities Act as of the date of such prospectus, and, in the case of any reference herein to the Prospectus,
also shall be deemed to include any documents incorporated by reference therein, and any supplements or amendments thereto, filed with
the Commission after the date of filing of the Prospectus pursuant to Rule 424(b) under the Securities Act, and prior to the termination of
this offering.
(iv)
For purposes of this Agreement, all references to the Registration Statement, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ( “ EDGAR ” ). All references in this Agreement to amendments or supplements to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (collectively with the rules and regulations promulgated thereunder, the “ Exchange Act ”), and which
is deemed to be incorporated by reference therein or otherwise deemed to be a part thereof.
(b)
Compliance with Registration Requirements . As of the time of filing of the Registration Statement or any post-effective
amendment thereto, at the time it became effective (including each deemed effective date with respect to the Underwriters pursuant to Rule 430B
under the Securities Act), at the time of each amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether
by post-effective amendment, incorporated report or form of prospectus) and as of the Closing Date, the Registration Statement complied and will
comply, in all material respects, with the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, at the time of
filing or the time of first use and as of the Closing Date, complied and will comply, in all material respects, with the requirements of the Securities
Act and did not and will not contain an
-2-
untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided , that the Company makes no representations or warranty in this paragraph with respect to the
Underwriter Information (as defined in Section 9(b)).
(c)
Disclosure Package . As of the Applicable Time (as defined below) and as of the Closing Date, neither (A) the Issuer
General Free Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time, the Prospectus, and the information included on
Schedule II hereto, all considered together (collectively, the “ Disclosure Package ” ), nor (B) any individual Issuer Limited-Use Free Writing
Prospectus (as defined below), when considered together with the Disclosure Package, included or will include any untrue statement of a material
fact or omitted or will omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided , that the Company makes no representations or warranty in this paragraph with respect to the Underwriter
Information. As used in this paragraph and elsewhere in this Agreement:
(1)
“Applicable Time” means [ ] [a.m]/[p.m.], New York City time, on the date of this Agreement.
(2)
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433
under the Securities Act (“ Rule 433 ”), including without limitation any “free writing prospectus” (as defined in Rule 405 under
the Securities Act (“ Rule 405 ”)) relating to the Securities that is (i) required to be filed with the Commission by the Company, (ii)
a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the
Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the
Securities or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).
(3)
“Issuer General Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended
for general distribution to prospective investors as identified on Schedule I hereto, and does not include a “bona fide electronic road
show” as defined in Rule 433.
(4)
“Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an
Issuer General Free Writing Prospectus.
(d)
Conflict with Registration Statement . Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the offering and sale of the Securities or until any earlier date that the Company notified or notifies the Underwriters, did
not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration
Statement or the Prospectus including any document incorporated by reference therein and any prospectus supplement deemed to be a part thereof
that has not been superseded or modified; provided, that the Company makes no representations or warranty in this paragraph with respect to the
Underwriter Information.
-3-
(e)
Distributed Materials . The Company has not, directly or indirectly, distributed and will not distribute any prospectus or
other offering material in connection with the offering and sale of the Securities other than the Disclosure Package or the Prospectus, and other
materials, if any, permitted under the Securities Act to be distributed and consistent with Section 6(a) hereof. The Company has filed and will file
with the Commission all Issuer Free Writing Prospectuses that are required to be filed in the time required under Rule 433(d) under the Securities
Act. The Company has satisfied or will satisfy the conditions in Rule 433 under the Securities Act to avoid a requirement to file with the Commission
any electronic road show. The parties hereto agree and understand that the content of any and all “road shows” related to the offering is solely the
property of the Company.
(f)
Not an Ineligible Issuer . (i) At the time of filing the Registration Statement and (ii) as of the date of the execution and
delivery of this Agreement, the Company is not an “ineligible issuer,” as defined in Rule 405 under the Securities Act, without taking account of any
determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer including, without
limitation, for purposes of Rules 164 and 433 under the Securities Act with respect to the offering as contemplated by the Registration Statement.
(g)
Incorporated Documents . The documents incorporated by reference in the Disclosure Package and in the Prospectus,
when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and none of such documents
contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(h)
Due Incorporation and Good Standing . The Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the State of Delaware and has corporate power and authority to own or lease, as the case may be, and operate its
properties and to conduct its business as described in the Registration Statement, Disclosure Package and the Prospectus and to enter into and
perform its obligations under this Agreement. The Company is duly qualified as a foreign corporation to transact business and is in good standing in
Connecticut, the only jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of
business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a
material adverse effect, on the condition, financial or otherwise, or on the earnings, business, properties, operations or prospects, whether or not
arising from transactions in the ordinary course of business, of the Company (a “ Material Adverse Effect ”). The Company does not own of record
or beneficially, directly or indirectly, (i) any shares of outstanding capital stock or securities convertible into capital stock of any other corporation, or
(ii) any equity, voting or participating interest in any limited liability company, partnership, joint venture or other non-corporate business enterprises,
except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus.
(i)
Capitalization . The Securities conform in all material respects to the description thereof contained in the Registration
Statement, Disclosure Package and the Prospectus. All of the issued and outstanding shares of Common Stock have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance with federal and state securities laws. None of the outstanding shares of
Common Stock were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities
of the Company. The issuance of the Securities to be purchased from the
-4-
Company hereunder is not subject to preemptive or other similar rights, or any restrictions upon the voting or transfer pursuant to applicable law or
the Company’s certificate of incorporation, bylaws or other governing documents or any agreement to which the Company is a party or by which it is
bound. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any capital stock of the Company other than those accurately described in the
Registration Statement, Disclosure Package and the Prospectus. The description of the Company’s 2004 Stock Incentive Plan, the Company’s 2005
Employee Stock Purchase Plan, the Company’s 2005 Non-Employee Directors Stock Option Plan and the Company’s 2010 Stock Incentive Plan (as
amended and restated) and the awards granted thereunder, set forth in the Disclosure Package and the Prospectus accurately and fairly presents the
information required to be shown with respect to each such plan.
(j)
Authorization, Issuance . The Securities to be issued and sold by the Company to the Underwriters hereunder have been
duly authorized and, when issued and delivered by the Company against payment therefor, as provided herein, will be validly issued, fully paid and
nonassessable.
(k)
No Registration Rights . There are no persons with registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in the offering contemplated by this Agreement, except for such rights as have been
duly waived, or such rights, the failure with which to comply would not reasonably be expected to have a Material Adverse Effect (as defined below)
or adversely affect the consummation of the transactions contemplated by this Agreement.
(l)
Due Authorization . This Agreement has been duly authorized, executed and delivered by the Company.
(m)
No Violation . The Company is not in breach or violation of or in default (nor has any event occurred which with notice,
lapse of time or both would result in any breach or violation of, or constitute a default) (i) under the provisions of its certificate of incorporation,
bylaws or other governing documents, (ii) in the performance or observance of any term, covenant, obligation, agreement or condition contained in
any indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company is a party or by which the Company or any of its properties may be bound or affected, except as set
forth in the Registration Statement, the Disclosure Package and the Prospectus, or (iii) in the performance or observance of any statute, law, rule,
regulation, ordinance, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its properties (including, without limitation, those administered by the Food and Drug
Administration of the U.S. Department of Health and Human Services (the “ FDA ”) or by any foreign, federal, state or local regulatory authority
performing functions similar to those performed by the FDA); except, with respect to clauses (ii) and (iii) above, to the extent any such contravention
would not result in a Material Adverse Effect.
(n)
No Conflict . Except as set forth in the Registration Statement, the Disclosure Package or the Prospectus, the execution,
delivery and performance by the Company of this Agreement, and the consummation of the transactions herein contemplated, including the issuance
and sale by the Company of the Securities, will not conflict with or result in a breach or violation of, or constitute a default under (nor constitute any
event which with notice, lapse of time or both
-5-
would result in any breach or violation of or constitute a default under) (i) the provisions of the certificate of incorporation, bylaws or other
governing documents of the Company, (ii) any indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness,
or any material license, lease, contract or other agreement or instrument to which the Company is a party or by which any of its properties may be
bound or affected, or (iii) any federal, state, local or foreign law, regulation or rule or any decree, judgment or order applicable to the Company;
except, with respect to clauses (ii) and (iii) above, to the extent any such contravention would not result in a Material Adverse Effect.
(o)
No Consents Required . No approval, authorization, consent or order of or filing with any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency, or of or with any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, the NASDAQ Capital Market (“ Nasdaq ”)), or approval of the stockholders of the Company
(including as may be required pursuant to the rules and regulations of Nasdaq), is required in connection with the issuance and sale of the Securities
or the consummation by the Company of the transactions contemplated hereby, except as have been obtained or made and other than (i) as may be
required under the Securities Act, (ii) under the rules and regulations of the Financial Industry Regulatory Authority (“ FINRA ”) and (iii) as may be
required under the Exchange Act or state “Blue Sky” laws.
(p)
Absence of Material Changes. E xcept as otherwise disclosed in the Registration Statement, the Disclosure Package and
the Prospectus, subsequent to the respective dates as of which information is given in the Disclosure Package: (i) there has been no material adverse
change, or any development that could reasonably be expected to result in a material adverse change, in the condition, financial or otherwise, or in
the earnings, business, properties, operations or prospects, whether or not arising from transactions in the ordinary course of business, of the
Company (any such change is called a “ Material Adverse Change ”); (ii) the Company has not incurred any material liability or obligation,
indirect, direct or contingent, nor entered into any material transaction or agreement; (iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of capital stock or any repurchase or redemption by the Company of any class of capital stock;
and (iv) there has not been any change in the capital stock outstanding on the date hereof, or material change in the short−term debt or long−term
debt of the Company or any issue of options, warrants, convertible securities or other rights to purchase the capital stock (other than grants or
exercises of stock options under the Company’s stock incentive plans, purchases under the Company’s employee stock purchase plan, or conversions
of convertible securities that are disclosed in the Registration Statement, Disclosure Package and the Prospectus).
(q)
Permits . Except as disclosed in the Disclosure Package and the Prospectus, the Company possesses such valid and
current licenses, certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct its business, including, without limitation, all such certificates, authorizations and permits required by the FDA or any other state, federal or
foreign agencies or bodies engaged in the regulation of pharmaceuticals or biohazardous materials, and the Company has not received any notice of
proceedings relating to the revocation or modification of, or non-compliance with, any such license, certificate, authorization or permit which,
individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could have a Material Adverse Effect.
(r)
Legal Proceedings . There are no legal or governmental proceedings pending or, to the Company’s knowledge,
threatened or contemplated to which the Company is or would be
-6-
a party or of which any of its properties is or would be subject at law or in equity, before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency, or before or by any self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, Nasdaq), except (i) as described in the Registration Statement, the Disclosure Package and the Prospectus,
(ii) any such proceeding, which if resolved adversely to the Company, would not result in a judgment, decree or order having, individually or in the
aggregate, a Material Adverse Effect or (iii) any such proceeding that would not prevent or materially and adversely affect the ability of the Company
to consummate the transactions contemplated hereby.
(s)
Audit Committee. The Company’s board of directors meets the independence requirements of, and has established an
audit committee that meets the independence requirements of, the rules and regulations of the Commission and Nasdaq.
(t)
Independent Accountants . To the Company’s knowledge, BDO USA, LLP, who has audited the financial statements of
the Company, is an independent registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act) with respect to the
Company within the meaning of the Securities Act and the applicable rules and regulations thereunder adopted by the Commission and the Public
Company Accounting Oversight Board (United States).
(u)
Financial Statements . The financial statements of the Company, together with the related schedules and notes thereto, set
forth or incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as applicable, and present fairly in all material respects in accordance with
generally accepted accounting principles as in effect in the United States (“ GAAP ”) (i) the financial condition of the Company, as of the dates
indicated and (ii) the results of operations, stockholders’ equity and changes in cash flows of the Company, for the periods therein specified; and such
financial statements and related schedules and notes thereto have been prepared in conformity with GAAP, consistently applied throughout the
periods involved (except as otherwise stated therein and subject, in the case of unaudited financial statements, to the absence of footnotes and normal
year-end adjustments). There are no other financial statements (historical or pro forma) that are required to be included in the Registration Statement,
the Disclosure Package and the Prospectus; and the Company does not have any material liabilities or obligations, direct or contingent (including any
off-balance sheet obligations), not disclosed in the Registration Statement, the Disclosure Package and the Prospectus; and all disclosures contained
in the Registration Statement, the Disclosure Package and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the
rules and regulations of the Commission), if any, comply with Regulation G of the Exchange Act and Item 10(e) of Regulation S-K of the
Commission, to the extent applicable, and present fairly the information shown therein and the Company’s basis for using such measures.
(v)
Accounting Controls . The Company maintains a system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management’s general or specific authorization, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP, or any other criteria applicable to such statements, and to maintain
accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.
-7-
(w)
Not an Investment Company . The Company has been advised of the rules and requirements under the Investment
Company Act of 1940, as amended (the “ Investment Company Act ”). The Company is not, and after receipt of payment for the Securities and the
application of the proceeds thereof as contemplated under the caption “Use of Proceeds” in the Prospectus will not be, an “investment company”
within the meaning of the Investment Company Act and will conduct its business in a manner so that it will not become subject to the Investment
Company Act.
(x)
Good Title to Property . The Company does not own any real property. The Company has good and valid title to, or has
valid rights to lease or otherwise use, all personal property described in the Registration Statement, the Disclosure Package and the Prospectus, which
are material to its respective businesses, in each case free and clear of all liens, claims, security interests, other encumbrances or defects except such
as are described in the Registration Statement, the Disclosure Package and the Prospectus and except as would not, individually or in the aggregate,
have a Material Adverse Effect. All of the property described in the Registration Statement, the Disclosure Package and the Prospectus as being held
under lease by the Company is held thereby under valid, subsisting and enforceable leases, without any liens, restrictions, encumbrances or claims,
except as would not, individually or in the aggregate, result in a Material Adverse Effect.
(y)
Intellectual Property Rights . The Company owns, possesses, licenses or has other rights to use, on reasonable terms, all
patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, know-how and other intellectual property (collectively, the “ Intellectual Property ”) necessary for the conduct of the Company’s
business as now conducted or as proposed in the Disclosure Package and the Prospectus to be conducted. Except as set forth in the Disclosure
Package and the Prospectus, (a) no party has been granted an exclusive license to use any portion of such Intellectual Property owned by the
Company; (b) there is no material infringement by third parties of any such Intellectual Property owned by or exclusively licensed to the Company;
(c) there is no pending or threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to any material Intellectual
Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (d) there is no pending or threatened
action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such claim; (e) there is no pending or threatened action, suit, proceeding or claim by others that the
Company’s business as now conducted infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a reasonable basis for any such claim.
(z)
Patent Applications . The Company has duly and properly filed or caused to be filed with the U.S. Patent and Trademark
Office (the “ PTO ”) and applicable foreign and international patent authorities all patent applications owned by the Company (the “ Company
Patent Applications ”). To the knowledge of the Company, the Company has complied with the PTO’s duty of candor and disclosure for the
Company Patent Applications and has made no material misrepresentation in the Company Patent Applications. To the Company’s knowledge,
except as disclosed in the Disclosure Package and the Prospectus, the Company Patent Applications disclose patentable subject matters, and the
Company has not been notified of any inventorship challenges nor has any interference been declared or provoked nor is any material fact known by
the Company that would preclude the issuance of patents with respect to the Company Patent Applications or would render such patents invalid or
unenforceable. To the Company’s knowledge, except as disclosed in the Disclosure Package and the Prospectus, no third party possesses rights to the
-8-
Company’s Intellectual Property, that, if exercised, could enable such party to develop products competitive to those the Company intends to develop
as described in each of the Disclosure Package and the Prospectus.
(aa)
Tests and Preclinical Trials . The studies, tests and preclinical and clinical trials conducted by or on behalf of the
Company that are described in the Disclosure Package and the Prospectus were and, if still pending, are being, conducted in all material respects in
accordance with the protocols submitted to the FDA, the Therapeutic Goods Administration (the “ TGA ”), or any foreign government exercising
comparable authority, procedures and controls pursuant to, where applicable, accepted professional and scientific standards, and all applicable laws
and regulations; the descriptions of the studies, tests and preclinical and clinical trials conducted by or on behalf of the Company, and the results
thereof, contained in the Disclosure Package and the Prospectus are accurate and complete in all material respects; the Company is not aware of any
other studies, or tests or preclinical and clinical trials, the results of which reasonably call into question the results described or referred to in the
Disclosure Package and the Prospectus; and the Company has not received any notices or correspondence from the FDA, TGA, or any foreign, state
or local governmental body exercising comparable authority or any Institutional Review Board requiring the termination, suspension, material
modification or clinical hold of any studies, tests or preclinical or clinical trials conducted by or on behalf of the Company, which termination,
suspension, modification or clinical hold would reasonably be expected to have a Material Adverse Effect.
(bb)
Taxes . The Company has filed all necessary federal, state, local and foreign income and franchise tax returns in a timely
manner and has paid all taxes shown thereon and, if due and payable, any related or similar assessment, fine or penalty levied against it, except for
any taxes, assessments, fines or penalties as may be being contested in good faith and by appropriate proceedings. The Company has made
appropriate provisions in the applicable financial statements referred to in Section 1(u) above in respect of all federal, state, local and foreign income
and franchise taxes for all current or prior periods as to which the tax liability of the Company has not been finally determined.
(cc)
Insurance . The Company is insured by recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for its business including, but not
limited to, policies covering real and personal property owned or leased by the Company against theft, damage, destruction, acts of vandalism and
earthquakes. All policies of insurance and fidelity or surety bonds insuring the Company or its business, assets, employees, officers and directors are
in full force and effect; the Company is in compliance with the terms of such policies and instruments in all material respects; and there are no claims
by the Company under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of
rights clause; and the Company has not been refused any insurance coverage sought or applied for. The Company has no reason to believe that it will
not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not have a Material Adverse Effect.
(dd)
Disclosure Controls . The Company has established, maintains and evaluates “disclosure controls and procedures” (as
such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), which (i) are designed to ensure that material information relating to
the Company is made known to the Company’s principal executive officer and its principal financial
-9-
officer by others within the Company, particularly during the periods in which the periodic reports required under the Exchange Act are being
prepared, (ii) have been evaluated for effectiveness as of the end of the last fiscal period covered by the Registration Statement, and (iii) such
disclosure controls and procedures are effective to perform the functions for which they were established. There are no significant deficiencies or
material weaknesses in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize,
and report financial data to management and the Board of Directors. The Company is not aware of any fraud, whether or not material, that involves
management or other employees who have a role in the Company’s internal controls; and since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.
(ee)
No Price Stabilization . Neither the Company nor, to the Company’s knowledge, any of its respective officers or directors,
has taken or will take, directly or indirectly, any action designed to cause or result in the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(ff)
No Undisclosed Relationships . No relationship, direct or indirect, exists between or among the Company on the one hand
and the directors, officers, stockholders, customers or suppliers of the Company on the other hand which is required to be described in the
Registration Statement, the Disclosure Package and the Prospectus which has not been so described. There are no outstanding loans, advances
(except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit
of any of the officers or directors of the Company or any member of their respective immediate families, except as disclosed in the Registration
Statement, the Disclosure Package and the Prospectus.
(gg)
Sarbanes-Oxley Act . There is no failure on the part of the Company and, to the best of the Company’s knowledge, any of
the Company’s directors or officers, in their capacities as such, to comply with any applicable provision of the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated in connection therewith (the “ Sarbanes-Oxley Act ”) in any material respect, including Section 402 related to
loans and Sections 302 and 906 related to certifications.
(hh)
Brokers Fees . Except as disclosed in the Disclosure Package and the Prospectus, the Company is not a party to any
contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against the Company or the
Underwriters for a brokerage commission, finder’s fee or other like payment in connection with the offering.
(ii)
FINRA Affiliations . To the Company’s knowledge, there are no affiliations or associations between (i) any member of
FINRA and (ii) the Company or any of the Company’s officers, directors or 5% or greater securityholders or any beneficial owner of the Company’s
unregistered equity securities that were acquired at any time on or after the one hundred eightieth (180 th ) day immediately preceding (A) the date the
Registration Statement was initially filed with the Commission and (B) the date the Prospectus was filed with the Commission, except as set forth in
the Registration Statement, the Disclosure Package and the Prospectus.
(jj)
Compliance with Environmental Laws . Except as may otherwise be disclosed in the Disclosure Package and the
Prospectus, (i) the Company is not in violation of any federal,
- 10 -
state, local or foreign law, regulation, order, permit or other requirement relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including without limitation,
laws and regulations relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products (collectively, “ Materials of Environmental Concern ”), or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environment Concern
(collectively, “ Environmental Laws ”), which violation includes, but is not limited to, noncompliance with any permits or other governmental
authorizations required for the operation of the business of the Company under applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company received any written communication, whether from a governmental authority, citizens group, employee or
otherwise, that alleges that the Company is in violation of any Environmental Law, except as would not, individually or in the aggregate, have a
Material Adverse Effect; (ii) there is no claim, action or cause of action filed with a court or governmental authority, no investigation with respect to
which the Company has received written notice, and no written notice by any person or entity alleging potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, attorneys’ fees or penalties arising out
of, based on or resulting from the presence, or release into the environment, of any Material of Environmental Concern at any location owned, leased
or operated by the Company, now or in the past (collectively, “ Environmental Claims ”), pending or, to the Company’s knowledge, threatened
against the Company or any person or entity whose liability for any Environmental Claim the Company has retained or assumed either contractually
or by operation of law, except as would not, individually or in the aggregate, have a Material Adverse Effect; (iii) to the Company’s knowledge, there
are no past, present or anticipated future actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release,
emission, discharge, presence or disposal of any Material of Environmental Concern, that reasonably could result in a violation of any Environmental
Law, require expenditures to be incurred pursuant to Environmental Law, or form the basis of a potential Environmental Claim against the Company
or against any person or entity whose liability for any Environmental Claim the Company has retained or assumed either contractually or by
operation of law, except as would not, individually or in the aggregate, have a Material Adverse Effect; and (iv) the Company is not subject to any
pending or threatened proceeding under Environmental Law to which a governmental authority is a party and which is reasonably likely to result in
monetary sanctions of $100,000 or more.
(kk)
No Labor Disputes . No labor problem or dispute with the employees of the Company exists or, to the best of the
Company’s knowledge, is threatened or imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of
any of its principal suppliers or contractors, that could have a Material Adverse Effect.
(ll)
ERISA . The Company is in compliance in all material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ ERISA ”); no “reportable
event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company would have any
liability; the Company has not incurred and reasonably does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the “ Code ”); and each “pension plan” for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
- 11 -
respects and nothing has occurred, whether by action or by failure to act, which could reasonably be expected to cause the loss of such qualification.
(mm)
Nasdaq; Exchange Act Registration . The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and
accepted for listing on Nasdaq, and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or delisting the Common Stock from Nasdaq, nor has the Company received any notification that the
Commission or Nasdaq is contemplating terminating such registration or listing. The Company has complied in all material respects with the
applicable requirements of Nasdaq for maintenance of listing of the Securities thereon. The Securities have been authorized for listing, upon official
notice of issuance, on Nasdaq.
(nn)
Statistical or Market-Related Data . Nothing has come to the attention of the Company that has caused the Company to
believe that the statistical and market-related data included in the Registration Statement, Disclosure Package and the Prospectus is not based on or
derived from sources that are reliable and accurate in all material respects.
(oo)
Money Laundering Laws. The operations of the Company are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of jurisdictions where the Company conducts business,
the applicable rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “ Money Laundering Laws ”), and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of
the Company, threatened.
(pp)
FCPA . Neither the Company nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the
Company is aware of or has taken any action, directly or indirectly, that would result in a violation by such Persons of the Foreign Corrupt Practices
Act of 1977, as amended, and the rules and regulations thereunder (the “ FCPA ”), including, without limitation, making use of the mails or any
means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in
the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the
Company and its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(qq)
Accuracy of Statements in Prospectus. The statements in (i) the Company’s Annual Report on Form 10-K for the fiscal
year ended September 30, 2014 under the headings “Business — Government Regulation” and “Business — Intellectual Property and Proprietary
Technology,” and (ii) the Prospectus under the headings “Risk Factors — Risks Related to Our Intellectual Property,” “Description of Capital Stock”
and “Underwriting” insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate and
fair summaries of such legal matters, agreements, documents or proceedings.
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(rr)
OFAC. Neither the Company nor, to the knowledge of the Company, any director, officer, agent or employee of the
Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“ OFAC
”); and the Company will not, directly or indirectly, knowingly use the proceeds of the offering, or knowingly lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person or entity that, to the Company’s knowledge, will use such proceeds,
for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
Any certificate signed by any officer of the Company and delivered to the Underwriters or to counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and warranty by the Company (and not such officer in an individual capacity) to
the Underwriters as to the matters covered thereby.
2.
Subject to the terms and conditions herein set forth, (a) the Company agrees to issue and sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price per share of $[ ], the number of Firm
Securities set forth opposite the name of such Underwriter in Schedule I hereto and (b) in the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Securities as provided below, the Company agrees to issue and sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the purchase price per share set forth in clause (a) of this
Section 2, that portion of the number of Optional Securities as to which such election shall have been exercised (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying such number of Optional Securities by a fraction, the numerator of which is the maximum
number of Optional Securities which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I hereto
and the denominator of which is the maximum number of Optional Securities that all of the Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at their election up to [ ] Optional Securities, at the purchase price per
share set forth in the paragraph above, for the sole purpose of covering sales of shares in excess of the number of Firm Securities, provided that the
purchase price per Optional Share shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and
payable on the Firm Securities but not payable on the Optional Securities. Any such election to purchase Optional Securities may be exercised only
by written notice from you to the Company, given within a period of 30 calendar days after the date of this Agreement, setting forth the aggregate
number of Optional Securities to be purchased and the date on which such Optional Securities are to be delivered, as determined by you but in no
event earlier than the First Time of Delivery (as defined in Section 4(a) hereof) or, unless you and the Company otherwise agree in writing, earlier
than two or later than ten business days after the date of such notice.
3.
Upon the authorization by you of the release of the Firm Securities, the several Underwriters propose to offer the Firm Securities
for sale upon the terms and conditions set forth in the Prospectus.
4.
(a)
The Securities to be purchased by each Underwriter hereunder, in definitive form, and in such authorized denominations
and registered in such names as the Representative may request upon at least forty-eight hours’ prior notice to the Company shall be delivered by or
on behalf of the Company to the Representative, through the facilities of the Depository Trust
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Company (“ DTC ”), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified by the Company to the Representative at least forty-eight hours in advance. The
time and date of such delivery and payment shall be, with respect to the Firm Securities, 10:00 a.m., New York City time, on [ ], 2015 or such other
time and date as the Representative and the Company may agree upon in writing, and, with respect to the Optional Securities, 9:30 a.m., New York
City time, on the date specified by the Representative in the written notice given by the Representative of the Underwriters’ election to purchase such
Optional Securities, or such other time and date as the Representative. and the Company may agree upon in writing. Such time and date for delivery
of the Firm Securities is herein called the “ First Time of Delivery ”, such time and date for delivery of the Optional Securities, if not the First Time
of Delivery, is herein called the “ Second Time of Delivery ”, and each such time and date for delivery is herein called a “ Time of Delivery ”.
The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 8 hereof,
(b)
including the cross-receipt for the Securities and any additional documents requested by the Underwriters pursuant to Section 8(m) hereof, will be
delivered at the offices of Morrison & Foerster, LLP, at 250 W. 55 th Street, New York, New York 10019-9601 (the “ Closing Location ”), and the
Securities will be delivered at the office of DTC (or its designated custodian), all at such Time of Delivery. A meeting will be held at the Closing
Location at 5:00 p.m., New York City time, on the New York Business Day (as defined in Section 15 hereof) immediately preceding such Time of
Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the
parties hereto.
5.
The Company agrees with each of the Underwriters:
(a)
To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement
or such earlier time as may be required under the Securities Act ; to make no further amendment or any supplement to the Registration Statement or
the Prospectus prior to the last Time of Delivery which shall be disapproved by you promptly after reasonable notice thereof; to advise you, promptly
after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any amendment
or supplement to the Prospectus has been filed and to furnish you with copies thereof; to file promptly all other material required to be filed by the
Company with the Commission pursuant to Rule 433(d) under the Securities Act, within the time required by such rule; to file promptly all reports
and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus (or in lieu thereof, the notice
referred to in Rule 173(a) under the Securities Act) is required in connection with the offering or sale of the Securities; to advise you, promptly after
it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary
Prospectus or other prospectus in respect of the Securities, of the suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Preliminary
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Prospectus or other prospectus or suspending any such qualification, to promptly use its best efforts to obtain the withdrawal of such order;
(b)
Promptly from time to time to take such action as you may reasonably request to qualify the Securities for offering and
sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Securities, provided that in connection
therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction or
subject itself to taxation in any jurisdiction in which it is not otherwise subject to taxation on the date hereof;
(c)
Prior to 10:00 a.m., New York City time, on the New York Business Day next succeeding the date of this Agreement and
from time to time, to furnish the Underwriters with written and electronic copies of the Prospectus in New York City in such quantities as you may
reasonably request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act ) is required at
any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Securities and if
at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act ) is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, to notify you and upon your
request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many written and
electronic copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance; and in case any Underwriter is required to deliver a prospectus (or in lieu thereof, the notice
referred to in Rule 173(a) under the Securities Act ) in connection with sales of any of the Securities at any time nine months or more after the time
of issue of the Prospectus, upon your request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many written and
electronic copies as you may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Securities Act ;
(d)
To make generally available to its security holders as soon as practicable, but in any event not later than sixteen months
after the effective date of the Registration Statement (as defined in Rule 158(c) under the Securities Act) an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158);
(e)
During the period beginning from the date hereof and continuing to and including the date 90 days after the date of the
Prospectus (the “ Lock-Up Period ”), not to (i) offer, sell, contract to sell, pledge, grant any option, right or warrant to purchase, make any short sale
or otherwise transfer or dispose of, directly or indirectly, or file with the Commission a registration statement under the Securities Act relating to, any
securities of the Company that are substantially similar to the Securities, including but not limited to any options or warrants to purchase shares of
Common Stock or any securities that are convertible into or exchangeable for, or that represent the
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right to receive, Common Stock, or any such substantially similar securities, or publicly disclose the intention to make any offer, sale, pledge,
disposition or filing or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership
of the Common Stock, or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of
shares of Common Stock or such other securities, in cash or otherwise, without the prior written consent of the Representative on behalf of the
Underwriters (other than (A) the Securities to be sold to the Underwriters hereunder, (B) the issuance of options, restricted stock units, restricted
stock or other equity awards to acquire shares of Common Stock granted pursuant to the Company’s equity incentive plans that are described in the
Prospectus, as such plans may be amended, (C) the issuance of shares of Common Stock upon the exercise of any such options, restricted stock units
or other equity awards to acquire shares of Common Stock, (D) the filing by the Company of registration statements on Form S-8 with respect to the
Company’s benefit plans that are referred to in the Prospectus, (E) the issuance by the Company of any shares of Common Stock as consideration for
mergers, acquisitions, other business combinations, or strategic alliances (including joint ventures, marketing or distribution arrangements,
collaboration agreements or intellectual property license agreements) occurring after the date of this Agreement; provided that each recipient of
shares pursuant to this clause (E) agrees that all such shares remain subject to restrictions substantially similar to those contained in this Section 5(e),
and (F) shares of Common Stock issued upon exercise of outstanding warrants or conversion of outstanding convertible preferred stock); provided,
however, that if (1) during the last 17 days of the initial Lock-Up Period, the Company releases earnings results or announces material news or a
material event or (2) prior to the expiration of the initial Lock-Up Period, the Company announces that it will release earnings results during the 16day period following the last day of the initial Lock-Up Period, then in each case the Lock-Up Period will be automatically extended until the
expiration of the 18-day period beginning on the date of release of the earnings results or the announcement of the material news or material event, as
applicable, unless the Representative on behalf of the Underwriters waives, in writing, such extension, except that such extension will not apply if the
provisions of NASD Conduct Rule 2711(f)(4) do not restrict the publishing or distribution of any research reports relating to the Company published
or distributed by any Underwriter during the 16 days before or after the last day of the Lock-Up Period (before giving effect to such extension); the
Company will provide the Representative with prior notice of any such announcement that gives rise to an extension of the Lock-Up Period;
(f)
If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., New York City time, on the date of this Agreement, and the Company shall at the time
of filing either pay the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such
fee pursuant to Rule 111(b) under the Securities Act;
(g)
To use the net proceeds received by it from the sale of the Securities pursuant to this Agreement in the manner specified in
the Prospectus under the caption “Use of Proceeds”; and
(h)
To use its best efforts to list, subject to notice of issuance, the Securities on Nasdaq.
6.
(a)
The Company represents and agrees that, without the prior consent of the Representative, it has not made and will not
make any offer relating to the Securities that would constitute a “free writing prospectus” as defined in Rule 405 under the Securities Act, other than
any such free writing prospectus the use of which has been consented to by the Representative and
- 16 -
which is listed on Schedule II(a) hereto; each Underwriter represents and agrees that, without the prior consent of the Company and the
Representative, it has not made and will not make any offer relating to the Securities that would constitute a free writing prospectus, other than any
such free writing prospectus the use of which has been consented to by the Company and the Representative is listed on Schedule II(a) hereto;
(b)
The Company has complied and will comply with the requirements of Rule 433 under the Securities Act applicable to any
Issuer Free Writing Prospectus, including timely filing with the Commission or retention where required and legending; and
(c)
The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or
occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Disclosure
Package or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the
Representative and, if requested by the Representative, will prepare and furnish without charge to each Underwriter an Issuer Free Writing
Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this representation and warranty shall
not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with the Underwriter
Information.
7.
The Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following:
(i) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Securities under the
Securities Act and all other expenses in connection with the preparation, printing, reproduction and filing of the Registration Statement, any
Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this
Agreement, any Blue Sky memorandum, closing documents (including any compilations thereof) and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iii) all fees and expenses in connection with listing the Securities on Nasdaq; (iv) any
expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 5(c) hereof,
including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky
survey, if any; (v) the filing fees incident to, and the fees and disbursements of counsel for the Underwriters in connection with, any required review
by FINRA of the terms of the sale of the Securities; (vi) the costs incidental to the issuance of the Securities, including the costs of preparation,
printing and distribution of one or more versions of the Preliminary Prospectus and the Prospectus for distribution in Canada, in the form of a
Canadian “wrapper” (including related fees and disbursements of Canadian counsel to the Underwriters, which disbursement shall not exceed
$10,000); (vii) the cost and charges of any transfer agent or registrar; (viii) the costs and expenses of the Company relating to investor presentations
on any “road show” undertaken in connection with the marketing of the Securities, including without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, travel and
lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of any aircraft and other transportation
chartered in connection with the road show; (ix) all costs, fees and expenses (including reasonable fees and expenses of counsel for the Underwriters,
but excluding the fees, expenses and disbursements of such counsel
- 17 -
provided for in clause (iv) and (v) above) incurred by the Underwriters in connection with matters related to the Securities to be sold by the Company
pursuant to this Agreement, not to exceed, without the Company’s prior consent, $75,000; and (x) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as
provided in this Section 7, and Sections 9 and 12 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their
counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make.
8.
The obligations of the Underwriters hereunder, as to the Securities to be delivered at each Time of Delivery, shall be subject, in
their discretion, to the condition that all representations and warranties of the Company herein are, at and as of such Time of Delivery, true and
correct (except that those representations and warranties that address matters only as of a particular date shall remain true and correct as of such
date), the condition that the Company shall have performed in all material respects all of its obligations hereunder theretofore to be performed, and
the following additional conditions:
(a)
The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Securities Act within the
applicable time period prescribed for such filing by the rules and regulations under the Securities Act and in accordance with Section 5(a) hereof; all
material required to be filed by the Company pursuant to Rule 433(d) under the Securities Act shall have been filed with the Commission within the
applicable time period prescribed for such filings by Rule 433; if the Company has elected to rely upon Rule 462(b) under the Securities Act, the
Rule 462(b) Registration Statement shall have become effective by 10:00 p.m., New York City time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; no stop order suspending or preventing the use of the Prospectus or any Issuer Free Writing
Prospectus shall have been initiated or, to the Company’s knowledge, threatened by the Commission; and all requests for additional information on
the part of the Commission shall have been complied with to your reasonable satisfaction;
(b)
Morrison & Foerster LLP, counsel for the Underwriters, shall have furnished to you such written opinion and negative
assurance letter, dated such Time of Delivery, in form and substance satisfactory to you, with respect to the matters you may reasonably request, and
such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;
(c)
Wiggin and Dana LLP, counsel for the Company, shall have furnished to you their written opinion and negative assurance
letter, dated such Time of Delivery, in form and substance satisfactory to you;
(d)
Pabst Patent Group LLP, intellectual property counsel to the Company, shall have furnished to you their written opinion,
dated such Time of Delivery, in form and substance satisfactory to you;
(e)
Paul Bavier, General Counsel and Secretary of the Company, shall have furnished to you his written opinion, dated such
Time of Delivery, in form and substance satisfactory to you;
- 18 -
(f)
On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration Statement filed subsequent to the date of this Agreement and also at each Time of
Delivery, BDO USA, LLP shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance
satisfactory to the Representative;
(g)
(i) The Company shall not have sustained since the date of the latest audited financial statements included or incorporated
by reference in the Disclosure Package any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Disclosure
Package, and (ii) since the respective dates as of which information is given in the Disclosure Package there shall not have been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries or any Material Adverse Effect, otherwise than as set forth or contemplated
in the Disclosure Package, the effect of which, in any such case described in clause (i) or (ii), is in your judgment so material and adverse as to make
it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(h)
On or after the Applicable Time (i) no downgrading shall have occurred in the rating accorded the Company’s securities
by any “nationally recognized statistical rating organization,” as that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company’s debt securities;
(i)
On or after the Applicable Time there shall not have occurred any of the following : (i) a suspension or material limitation
in trading in securities generally on the New York Stock Exchange or on Nasdaq; (ii) a suspension or material limitation in trading in the Company’s
securities on Nasdaq; (iii) a general moratorium on commercial banking activities declared by either Federal or New York authorities or a material
disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or
crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause
(iv) or (v) in your judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities being delivered
at such Time of Delivery on the terms and in the manner contemplated in the Prospectus;
(j)
The Securities to be sold at such Time of Delivery shall have been duly listed, subject to notice of issuance, on the
Nasdaq;
(k)
The Company shall have obtained and delivered to the Underwriters executed copies of a lock-up letter from each of the
Company’s executive officers and directors, substantially to the effect set forth in Annex I hereof, in form and substance satisfactory to the
Representative;
(l)
The Company shall have complied with the provisions of Section 5(c) hereof with respect to the furnishing of
prospectuses on the New York Business Day next succeeding the date of this Agreement; and
- 19 -
(m)
The Company shall have furnished or caused to be furnished to you at such Time of Delivery certificates of officers of the
Company satisfactory to you as to the accuracy of the representations and warranties of the Company herein at and as of such time, as to the
performance in all material respects by the Company of all of its obligations hereunder to be performed at or prior to such time, as to the matters set
forth in subsections (a), (g) and (h) of this Section 8 and as to such other matters as you may reasonably request;
9.
(a)
The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, any Preliminary Prospectus, the Disclosure Package or the Prospectus, or any amendment or supplement thereto, any
Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Securities Act or any
materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the
Securities (the “ Marketing Materials ”), including any roadshow or investor presentations made to investors by the Company (whether in person or
electronically), or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by
such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in the Registration Statement any Preliminary Prospectus, the Disclosure
Package or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus, or in any Marketing Materials, in reliance
upon and in conformity with the Underwriter Information.
(b)
Each Underwriter will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to
which the Company may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement any Preliminary Prospectus, the Disclosure Package or the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus, the Disclosure Package or the
Prospectus or any such amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with the
Underwriter Information, it being understood and agreed that the only such information furnished by the Underwriters that shall constitute
“Underwriter Information” for the purposes of this Agreement consists of the following: (i) the information in the third paragraph under the heading
“Underwriting” in the Prospectus regarding the terms of the offering by the Underwriters; (ii) the information under the subheading “Underwriting –
Stabilization” in the Prospectus; (iii) the information under the subheading "Underwriting – Regulation M Restrictions" in the Prospectus; and (iv)
the information in the second sentence under the subheading “Underwriting – Affiliations” in the Prospectus; and will reimburse the Company for
- 20 -
any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such
expenses are incurred.
(c)
Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party under such subsection, except to the extent that the indemnifying party has been materially
prejudiced by such failure. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on
behalf of any indemnified party.
(d)
If the indemnification provided for in this Section 9 is applicable on its terms but unavailable to or insufficient to hold
harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection
(c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus.
The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriters on the other
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and
the Underwriters
- 21 -
agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act ) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e)
The obligations of the Company under this Section 9 shall be in addition to any liability which the Company may
otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the
Securities Act and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act , including, without limitation, the
officers, directors, partners and members of each such Underwriter and its broker-dealer affiliates; and the obligations of the Underwriters under this
Section 9 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Securities
Act.
10.
(a)
If any Underwriter shall default in its obligation to purchase the Securities which it has agreed to purchase hereunder at a
Time of Delivery, you may in your discretion arrange for you or another party or other parties to purchase such Securities on the terms contained
herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Securities, then the Company shall
be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Securities
on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such
Securities, or the Company notifies you that it has so arranged for the purchase of such Securities, you or the Company shall have the right to
postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or
supplements to the Registration Statement or the Prospectus which in your opinion may thereby be made necessary. The term “ Underwriter ” as
used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this
Agreement with respect to such Securities.
(b)
If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters
by you and the Company as provided in subsection (a) above, the aggregate number of such Securities which remains unpurchased does not exceed
one eleventh of the aggregate number of all the Securities to be purchased at such Time of Delivery, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the
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number of shares which such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Securities which such Underwriter agreed to purchase hereunder) of the Securities
of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c)
If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters
by you and the Company as provided in subsection (a) above, the aggregate number of such Securities which remains unpurchased exceeds one
eleventh of the aggregate number of all the Securities to be purchased at such Time of Delivery, or if the Company shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to purchase Securities of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to the Second Time of Delivery, the obligation of the Underwriters to purchase and of the Company to sell the Optional
Securities) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be
borne by the Company and the Underwriters as provided in Section 7 hereof and the indemnity and contribution agreements in Section 9 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its default.
11.
The respective indemnities, agreements, representations, warranties and other statements of the Company and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person
of any Underwriter, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for
the Securities.
12.
If this Agreement shall be terminated pursuant to Section 10 hereof, the Company shall not then be under any liability to any
Underwriter except as provided in Sections 7 and 9 hereof; but, if for any other reason, any Securities are not delivered by or on behalf of the
Company as provided herein, the Company will reimburse the Underwriters through you for all out of pocket expenses approved in writing by you,
including fees and disbursements of outside counsel, reasonably incurred and documented by the Underwriters in making preparations for the
purchase, sale and delivery of the Securities not so delivered, but the Company shall then be under no further liability to any Underwriter except as
provided in Sections 7 and 9 hereof.
13.
In all dealings hereunder, you shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you.
All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail
or facsimile transmission to you as the Representative in care of William Blair & Company, L.L.C., 222 West Adams Street, Chicago, IL 60606,
Attention: General Counsel, Facsimile: (312) 551-4646, with copy to Morrison & Foerster, LLP, 250 W. 55 th Street, New York, New York 100199601, Attention: Anna T. Pinedo, Esq., Facsimile: (212) 468-7900; and if to the Company shall be delivered or sent by mail or facsimile transmission
to Biodel Inc. 100 Saw Mill Road, Danbury, Connecticut 06810, Attention: President and Chief Executive Officers, Facsimile: (203) 796-5000 with
copy to Wiggin and Dana LLP, Two Stamford Plaza, 281 Tresser Boulevard, Stamford, CT 06901, Attention: Michael Grundei, Esq.,
- 23 -
Facsimile: (203) 363-7676. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
In accordance with the requirements of the USA Patriot Act, the Underwriters are required to obtain, verify and record information that
identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as
other information that will allow the underwriters to properly identify their respective clients.
14.
This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 9 and 11 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.
15.
Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the
Commission’s office in Washington, D.C. is open for business and “ New York Business Day ” shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive
order to close.
16.
The Company acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to this Agreement is an arm’slength commercial transaction between the Company, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and
with the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or fiduciary of the Company, (iii) no
Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) or any other
obligation to the Company except the obligations expressly set forth in this Agreement and (iv) the Company has consulted its own legal and
financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim that the Underwriters, or any of them, has rendered
advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company, in connection with such transaction or the process
leading thereto.
17.
The Company acknowledges that the Underwriters’ research analysts and research departments are required to be independent from
their respective investment banking divisions and are subject to certain regulations and internal policies, and that such Underwriters’ research
analysts may hold views and make statements or investment recommendations and/or publish research reports with respect to the Company and/or
the offering that differ from the views of their respective investment banking divisions. The Company hereby waives and releases, to the fullest
extent permitted by law, any claims that the Company may have against the Underwriters with respect to any conflict of interest that may arise from
the fact that the views expressed by their independent research analysts and research departments may be different from or inconsistent with the
views or advice communicated to the Company by such Underwriters’ investment banking divisions. The Company acknowledges that each of the
Underwriters is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own
account or the account of its customers and hold long or short positions in debt or equity
- 24 -
securities of the companies that may be the subject of the transactions contemplated by this Agreement.
18.
This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the
Underwriters, or any of them, with respect to the subject matter hereof.
THIS AGREEMENT AND ANY MATTERS RELATED TO THIS TRANSACTION SHALL BE GOVERNED BY AND
19.
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAWS OF THE STATE
OF NEW YORK. THE COMPANY AGREES THAT ANY SUIT OR PROCEEDING ARISING IN RESPECT OF THIS AGREEMENT
OR YOUR ENGAGEMENT WILL BE TRIED EXCLUSIVELY IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK OR, IF THAT COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION, IN ANY STATE COURT LOCATED IN
THE CITY AND COUNTY OF NEW YORK AND THE COMPANY AGREES TO SUBMIT TO THE JURISDICTION OF, AND TO
VENUE IN, SUCH COURTS.
20.
The Company and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
21.
This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute one and the same instrument. Delivery of a signature page hereto via
facsimile or other electronic image transmission shall be valid and binding for all purposes.
22.
Notwithstanding anything herein to the contrary, the Company is authorized to disclose to any persons the U.S. federal and state
income tax treatment and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses)
provided to the Company relating to that treatment and structure, without the Underwriters imposing any limitation of any kind . However, any
information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent
necessary to enable any person to comply with securities laws . For this purpose, “tax structure” is limited to any facts that may be relevant to that
treatment.
23.
If any term or other provision of this Agreement shall be held invalid, illegal or unenforceable, the validity, legality or
enforceability of the other provisions of this Agreement shall not be affected thereby, and there shall be deemed substituted for the provision at issue
a valid, legal and enforceable provision as similar as possible to the provision at issue.
24.
Except as otherwise expressly provided herein, the provisions of this Agreement may be amended or waived at any time only by the
written agreement of the parties hereto . Any waiver, permit, consent or approval of any kind or character on the part of any such holders of any
provision or condition of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in writing . The
failure of any party hereto to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision . No
waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.
- 25 -
[ signature page follows ]
- 26 -
If the foregoing is in accordance with your understanding, please sign and return to us, and upon the acceptance hereof by you, on behalf of
each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement between each of the Underwriters and the
Company . It is understood that your acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on your
part as to the authority of the signers thereof.
Very truly yours,
BIODEL INC.
By:
Name:
Title:
Accepted as of the date hereof:
WILLIAM BLAIR & COMPANY, L.L.C.
By:
Name:
Title:
On behalf of each of the Underwriters
- 27 -
SCHEDULE I
Total
Number of
Firm
Securities
to be
Purchased
[]
[]
[]
[]
Underwriter
William Blair & Company, L.L.C.
Ladenburg Thalmann & Co. Inc.
Roth Capital Partners, LLC
Total
- 28 -
Number of
Optional
Securities to
be Purchased
if Maximum
Option
Exercised
[]
[]
[]
[]
SCHEDULE II
(a)
Issuer Free Writing Prospectuses: [Free Writing Prospectus, dated [ ], 2015]
(b)
Additional Documents Incorporated by Reference: [None]
- 29 -
Annex I
[Form of Lock-Up Letter]
___, 2015
William Blair & Company, L.L.C.
As Representative of the several Underwriters
c/o William Blair & Company, L.L.C.
222 West Adams
Chicago, Illinois 60606
Ladies and Gentlemen:
The undersigned understands that William Blair & Company, L.L.C. (“ William Blair ”), as the representative of the several underwriters
(the “ Underwriters ”), proposes to enter into an Underwriting Agreement (the “ Underwriting Agreement ”) with Biodel Inc., a Delaware corporation
(the “ Company ”), providing for the public offering (the “ Offering ”) by the Company of shares of common stock, par value $0.01 per share (the “
Common Stock ”), and potentially other securities. All such securities to be sold in the Offering are hereinafter collectively referred to as the “
Securities .”
In consideration of the foregoing, and in order to induce you to participate in the Offering, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of William Blair on behalf of the
Underwriters (which consent may be withheld in its sole discretion), the undersigned will not, during the period (the “ Lock-Up Period ”) beginning
on the date hereof and ending on the date ninety (90) days after the date of the final prospectus (including the final prospectus supplement) to be used
in confirming the sale of the Securities, (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, or file
(or participate in the filing of) a registration statement with the Securities and Exchange Commission (the “ Commission ”) in respect of, any shares
of Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock (including without limitation, shares
of Common Stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the
Commission and securities which may be issued upon exercise of a stock option or warrant), (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of the shares of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of shares of Common Stock or such other securities, in cash or otherwise, (3) make
any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable
or exchangeable for shares of Common Stock, or (4) publicly announce an intention to effect any transaction specific in clause (1), (2) or (3) above.
Notwithstanding the foregoing, the restrictions set forth in clauses (1) and (2) above shall not apply to (a) transactions relating to shares of
Common Stock or other securities acquired in open market transactions after the completion of the Offering, provided that no filing under Section 16
(a) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), shall be required or shall be voluntarily made in connection with
subsequent sales of Common Stock or other securities
- 30 -
acquired in such open market transactions, (b) transfers (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in
writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the
undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such
transfer shall not involve a disposition for value, (iii) pursuant to the laws of descent, or (iv) effected pursuant to any exchange of “underwater”
options with the Company, (c) the exercise of any stock option issued pursuant to the Company’s existing stock option plans, including any exercise
effected by the delivery of shares of Common Stock of the Company held by the undersigned, (d) the purchase or sale of the Company’s securities
pursuant to a plan, contract or instruction that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) that was in effect prior to the date hereof, or
(e) the entry into any trading plan established pursuant to Rule 10b5-1 of the Exchange Act, provided that no sales or other dispositions may occur
under such plan until the expiration of Lock-Up Period and provided further that in the case of any transfer or distribution pursuant to clause (b) or
(c), no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made during the Lock-Up Period. In addition, the
undersigned agrees that, without the prior written consent of William Blair, it will not, during the Lock-Up Period, make any demand for or exercise
any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for
Common Stock. For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more
remote than first cousin.
For the purpose of allowing you to comply with FINRA Rule 2711(f)(4), if (1) during the last 17 days of the Lock-Up Period, the Company
releases earnings results or publicly announces other material news or a material event relating to the Company occurs or (2) prior to the expiration of
the Lock-Up Period, the Company announces that it will release earnings results during the 16 day period beginning on the last day of the Lock-Up
Period, then in each case the Lock-Up Period will be extended until the expiration of the 18 day period beginning on the date of release of the
earnings results or the public announcement regarding the material news or the occurrence of the material event, as applicable, unless William Blair,
on behalf of the Underwriters waives, in writing, such extension.
Notwithstanding the foregoing, if the Company has “actively traded securities” within the meaning of Rule 139 of the Securities Act of
1933, or otherwise satisfies the requirements set forth in Rule 139 that would permit the Underwriters to publish issuer-specific research reports
pursuant to Rule 139, the Lock-Up Period shall not be extended upon the occurrence of (1) or (2) above.
The foregoing restrictions are expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is
designed to or reasonably expected to lead to or result in a sale or disposition of shares of Common Stock even if such securities would be disposed
of by someone other than the undersigned. Such prohibited hedging or other transactions would include without limitation any short sale or any
purchase, sale or grant of any right (including without limitation any put option or put equivalent position or call option or call equivalent position)
with respect to any of the shares of Common Stock or with respect to any security that includes, relates to, or derives any significant part of its value
from such shares.
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. All
authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or
personal representatives of the undersigned.
- 31 -
The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar or
depositary against the transfer of the undersigned’s shares of Common Stock except in compliance with the foregoing restrictions.
The undersigned understands that, if the Underwriting Agreement does not become effective on or prior to May 15, 2015, or if the
Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and
delivery of the Securities to be sold thereunder, the undersigned shall be released from all obligations under this Lock-Up Agreement. However, this
Lock-Up Agreement shall be understood to apply with equal force if the Company determines to proceed with an offering of equity-linked securities,
exchangeable for or exercisable for, shares of its Common Stock, in a private offering in which William Blair acts as the lead placement agent.
This Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the
conflict of laws principles thereof.
Very truly yours,
Name:
- 32 -
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
Biodel Inc.
Danbury, CT
We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement of our report dated December
19, 2014, relating to the consolidated financial statements of Biodel Inc. which is incorporated by reference in that Prospectus. Our report contains an
explanatory paragraph regarding the Company’s ability to continue as a going concern.
We also consent to the reference to us under the caption “Experts” in the Prospectus.
/s/BDO USA, LLP
New York, New York
April 2, 2015