Please wait
As
filed with the Securities and Exchange Commission on December 28,
2007
Reg.
No.
333-148343
UNITED
STATES
SECURITIES
AND EXCHANGE
COMMISSION
Washington,
D.C.
20549
AMENDMENT
NO. 1 TO FORM S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
VYTERIS,
INC.
(Exact
name of registrant as specified in its charter)
|
NEVADA
|
84-1394211
|
|
(State
or other jurisdiction
|
(I.R.S.
Employer
|
|
of
incorporation or organization)
|
Identification
No.)
|
| |
|
|
13-01
POLLITT
DRIVE
|
|
|
FAIR
LAWN, NEW
JERSEY
|
07410
|
|
(Address
of principal executive office)
|
(Zip
Code)
|
(201)
703-2299
(Issuer’s
telephone number)
Timothy
J. McIntyre
Chief
Executive Officer
Vyteris,
Inc.
13-01
Pollitt Drive
Fair
Lawn, NJ 07410
(201) 703-2299
(Name,
address, including zip code, and telephone number, including area code,
of agent
for service)
With
a copy to:
Jolie
Kahn, Esq.
61
Broadway, Suite 2820
New
York, NY 10006
Fax:
(866) 705-3071
Approximate
date of commencement of
proposed sale to public: As soon as practicable after this Registration
Statement becomes effective.
If
the only securities being registered
on this form are being offered pursuant to dividend or interest reinvestment
plans, please check the following box. o
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, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. o
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. o
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. o
If
this Form is a registration
statement pursuant to General Instruction I.D. or a post-effective amendment
thereto that shall become effective upon filing with the Commission pursuant
to
Rule 462(e) under the Securities Act, check the following box. o
If
this Form is a post-effective
amendment to a registration statement filed pursuant to General Instruction
I.D.
filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the following
box. o
CALCULATION
OF REGISTRATION
FEE
|
Title
of each class of securities
to
be registered
|
Proposed
maximum
aggregate
offering price
|
Amount
of
registration
fee
|
|
Common
Stock, par value $.001 per share
|
-
|
-
|
|
Warrants
|
-
|
-
|
|
Total
|
$50,000,000
(1)(2)
|
$5,350
|
|
(1)
|
Estimated
solely for the purpose of calculating the registration fee pursuant
to
Rule 457(o) under the Securities Act of 1933.
|
|
(2)
|
There
are being registered
hereunder such indeterminate number of shares of common stock
and such
indeterminate number of
warrants to purchase common shares as shall
have an aggregate
offering price not to exceed $50,000,000. Any securities
registered hereunder may be sold separately or as units with
other
securities registered hereunder. The securities registered also
include such indeterminate amounts and numbers of common shares
as may be
issued upon exercise of warrants or pursuant to the anti-dilution
provisions of any such
securities.
|
THE
REGISTRANT HEREBY AMENDS THIS
REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY
ITS
EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR
UNTIL
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
The
information in this prospectus is not complete and may be changed. These
shares
and warrants may not be sold until the registration statement filed with
the
Securities and Exchange Commission becomes effective. This prospectus is
not an
offer to sell these shares and warrants, and it is not a solicitation of
an
offer to buy these shares and warrants, in any state where the offer or
sale is
not permitted.
SUBJECT
TO COMPLETION, DECEMBER 28,
2007
PROSPECTUS
VYTERIS,
INC.
$50,000,000
Common
Stock and
Warrants
We
may offer and sell from time to time
up to $50,000,000 of shares of our common stock and warrants in amounts, at
prices and on terms that we will decide at the time of the
offering.
We
will provide the specific terms of
these offers and sales in supplements to this prospectus. This prospectus
may
not be used to sell common stock and warrants unless accompanied by a prospectus
supplement. You should read this prospectus and the supplement carefully
before
you invest. We may offer common stock and/or warrants directly to investors
or
through agents, underwriters or dealers. If any agents, underwriters or dealers
are involved in the sale of any of our common stock, their names and any
applicable purchase prices, fees, commissions or discount arrangements will
be
set forth in the prospectus supplement. The supplements to this
prospectus will also provide the specific terms of the plan of
distribution.
Our
common stock is traded on the Over
The Counter Bulletin Board under the symbol “VYHN.” On December 24, 2007, the
last sale price of our common stock as reported on the Over The Counter Bulletin
Board was $ 0.73.
An
investment in our shares and
warrants involves a high degree of risk. Before purchasing any shares or
warrants, you should consider carefully the risks referred to under “Risk
Factors” on page 10 in this Prospectus and in the prospectus
supplement.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS
APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED THAT THIS PROSPECTUS
IS
COMPLETE OR ACCURATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The
date of this prospectus is
December 28, 2007
You
should rely only on the information
contained in or incorporated by reference in this prospectus. We have not
authorized anyone to provide you with information different from that contained
in or incorporated by reference in this prospectus. We are offering to sell,
and
seeking offers to buy, the securities described in this prospectus only in
jurisdictions where offers and sales are permitted. The information contained
in
this prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or of any sale of shares or warrants.
You should not assume that the information appearing in this prospectus or
any
applicable prospectus supplement or the documents incorporated by reference
herein or therein is accurate as of any date other than their respective
dates.
Our business, financial condition, results of operation and prospects may
have
changed since those dates.
| |
|
| |
Page
|
| |
|
|
ABOUT
THIS PROSPECTUS
|
ii
|
|
DESCRIPTION
OF OUR BUSINESS
|
1
|
|
RISK
FACTORS
|
10
|
|
NOTE
ON FORWARD-LOOKING STATEMENTS
|
21
|
|
THE
SECURITIES WE MAY OFFER
|
22
|
|
USE
OF PROCEEDS
|
22
|
|
PLAN
OF DISTRIBUTION
|
22
|
|
DESCRIPTION
OF SHARE CAPITAL
|
23
|
|
WHERE
YOU CAN FIND MORE INFORMATION
|
24
|
|
INCORPORATION
OF INFORMATION FILED WITH THE SEC
|
25
|
|
LEGAL
MATTERS
|
25
|
|
EXPERTS
|
25
|
Vyteris,
Inc. (formerly Vyteris Holdings (Nevada), Inc.) is a Nevada
corporation. The company’s address is 13-01 Pollitt Drive, Fair Lawn,
New Jersey 07410, and its telephone number is (201) 703-2299.
This
prospectus is part of a
registration statement utilizing the “shelf registration” process that we filed
with the Securities and Exchange Commission, or the SEC, to permit us to
offer
and sell the securities described in this prospectus in one or more
transactions. The plan of distribution of the shares and warrants is described
in this prospectus under the heading “Plan of Distribution.”
As
permitted by the rules and
regulations of the SEC, the registration statement filed by us includes
additional information not contained in this prospectus. You may read the
registration statement and the other reports we file with the SEC at the
SEC’s
web site or at the SEC’s offices described below under the heading “Where You
Can Find Additional Information.”
This
prospectus provides you with a
general description of the shares and warrants we may offer. Each time shares
and/or warrants are sold, we will provide a prospectus supplement that will
contain specific information about the terms of that offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and the prospectus supplement,
together with additional information described in this prospectus under the
heading “Where You Can Find More Information.”
You
should rely only on the information
provided in this prospectus and in the prospectus supplement, including any
information incorporated by reference. For more details on information
incorporated herein by reference, you should review the discussion contained
under the heading “Incorporation of Information Filed With the SEC.” We have not
authorized anyone to provide you with information different from that contained
or incorporated by reference in this prospectus and in the prospectus
supplement. We are offering the securities only in jurisdictions where offers
are permitted. You should not assume that the information in this prospectus
or
the prospectus supplement is accurate at any date other than the date indicated
on the cover page of these documents.
In
this prospectus, we sometimes refer
to Vyteris, Inc. as “Vyteris” or the “Company”. References in this
prospectus and the prospectus supplement to the “company,” “we,” “us” or “our”
refer to Vyteris, unless the context suggests otherwise.
Overview
Vyteris,
Inc. (formerly Vyteris Holdings (Nevada), Inc.) has developed and produced
the
first electronically controlled transdermal drug delivery system that delivers
drugs through the skin comfortably, without needles. This platform technology
can be used to administer certain therapeutics either directly to the skin
or
into the bloodstream. In January 2005, the Company received approval from
the
United States Food and Drug Administration (“FDA”) for its manufacturing
facility and processes for LidoSite. The Company holds over 150 world wide
patents relating to the delivery of drugs across the skin using a mild electric
current. The terms “Company,” “Vyteris,” “us,” “we” or “our” refer to each of
Vyteris, Inc., its subsidiary, also named Vyteris, Inc. (incorporated in
the
State of Delaware), and the combined company.
Technology
Our
active transdermal drug delivery technology is based on a process known as
electrotransport, or more specifically iontophoresis, a process that transports
drugs through the skin by applying a low-level electrical current. Vyteris’
active patch patented technology works by applying a charge to the drug-holding
reservoir of the patch. This process differs significantly from passive
transdermal drug delivery which relies on the slow, steady diffusion of drugs
through the skin. A significantly greater number of drugs can be delivered
through active transdermal delivery than is possible with passive transdermal
delivery. Based on our analysis thus far, we estimate that there are
currently 220 FDA-approved drugs that may be delivered through our active
transdermal delivery platform.
Business
Model
Our
commercialization strategy is to focus on near-term and future market
opportunities utilizing FDA-approved and marketed drugs with our proprietary
delivery technology, using our own brands and by partnering with major
pharmaceutical companies on other opportunities. By pursuing this strategy,
our
plan is to develop and commercialize new products that can reach the market
faster and at a reduced cost than the traditional development of new chemical
entities, so as to have a higher probability of commercial
success. During the first quarter of 2007, we focused our resources
on implementation of our business model and had no manufacturing or sales
activity. We continued these efforts through the second quarter, and
based upon the agreement reached with Laboratory Corporation of America,
Inc.
(“LabCorp”) during the second quarter of 2007, recommenced manufacturing
activities and recommenced sales activities in the third quarter of 2007
in an
effort to begin commercialization of Lidosite. The official product
launch occurred in August 2007, and we received our first orders in that
month. While it is premature to predict the volume of LidoSite sales
for future periods, the product launch is the initial mass introduction of
the
LidoSite product into the market, and we expect to gather sufficient data
points
in this proof of concept to determine actual market demand for the
product.
During
July 2007, we undertook the
first steps in our project to commercially launch the LidoSite
product. The efforts have been highlighted by formation of a joint
Vyteris – LabCorp team to initiate sales and marketing activities, under the
agreement with LabCorp. In addition, we hired our own internal sales
and marketing team and a senior vice president of sales and marketing. In
addition to spearheading the marketing activities for those specialty markets
not covered by the agreement with LabCorp, the Vyteris’ sales and marketing
group is working with LabCorp into the physician office market and the LabCorp
patient service centers.
In
addition to the LidoSite product, we
are also focused on pursuing new opportunities with products not yet in the
market place, facing patent expiration or offer the most promise in application
with our iontophoretic technology. Each new market opportunity and
potential product will be evaluated on our projection of speed to market
and
size of return to us and our partners, in particular looking for high value
market sectors. We have identified three additional key areas of market
opportunity, in addition to needle stick pain, which we intend to
pursue:
Our
focus
on these core market areas represents our belief in their near-term
commercialization and revenue-generating opportunity.
Needle
Stick Pain
The
first
key area targeted with our active transdermal drug delivery technology is
needle
stick pain. On May 6, 2004, we received approval from the FDA to
commercially launch our first product, LidoSite, in the United
States. LidoSite is a topical delivery system indicated for use on
normal intact skin to provide local anesthesia prior to needle stick procedures
such as venipunctures (blood draws), injections and intravenous therapies
as
well as superficial dermatological procedures. Our LidoSite product
uses our smart patch technology to achieve rapid, deep local anesthesia prior
to
these procedures.
Our
LidoSite product delivers lidocaine, a local anesthetic, along with a small
quantity of epinephrine, a drug that helps lidocaine work faster and last
longer
by accelerating the onset of anesthesia and extending the duration of pain
reduction. The system consists of a patch that adheres to the skin containing
the medication and a small battery-powered, wearable electronic dose controller
connected to the patch. Clinical trials have shown that LidoSite:
|
|
·
|
works
in as little as 10 minutes;
|
|
|
·
|
provides
deep anesthesia through the skin up to 10 mm in depth; and
|
|
|
·
|
is
well suited for applications in clinics and patient service centers,
where
time and staff productivity are important.
|
We
plan
to market LidoSite to the physician office, hospital, and commercial diagnostic
laboratory markets. An estimated 550 million blood samples are drawn each
year
in the U.S., from which an estimated 20-25 percent of patients may be needle
pain sensitive or needle phobic, making them ideal candidates for
LidoSite.
The
major
near term initiative in this area has been the relationship with LabCorp.
On
June 5, 2007, we entered into a product marketing agreement with LabCorp
which
sets forth the terms and conditions upon which LabCorp is granted marketing
rights to our LidoSite product (on an exclusive basis in specific target
markets), under the LidoSite brand name. The target markets primarily consist
of
medical doctors' offices located within the United States and Phase I of
the
Agreement ends on May 31, 2008. Additionally, we are beginning to
expand sales and marketing of LidoSite in specialty markets such as dermatology,
oncology and rheumatology where initial market inquiries suggest possible
significant demand.
Previously,
we entered into a license, development and supply agreement with B. Braun
Medical, Inc., or B. Braun, on September 20, 2002 and amendments to that
agreement on March 7, 2006, and January 1, 2007 relating to the marketing
and
distribution of LidoSite in the hospital market. We refer to this agreement,
as
amended, as the B. Braun Agreement.
The principal
terms of the B. Braun Agreement provide for the following:
|
|
·
|
B.
Braun will act as our principal sales and marketing distributor
for
LidoSite in the hospital market;
|
|
|
·
|
We
are responsible for manufacturing and delivering LidoSite product
to B.
Braun;
|
|
|
·
|
Title
and risk of loss transfer to B. Braun upon delivery of the LidoSite
product by us. We have no storage obligations once the product
has been
delivered to B. Braun; and
|
|
|
·
|
B.
Braun will be responsible for marketing, distribution and international
registration, except for Japan, and will have the right to distribute
the
product in such manner as it shall determine.
|
On
March
7, 2006 and on January 1, 2007 the Company and B. Braun amended B. Braun’s right
to be its exclusive worldwide sales and marketing distributor for its LidoSite
product by granting back to the Company the sales and marketing distribution
rights to the U.S. physician office market and the Japanese market. At this
time, B. Braun has not provided the Company with a purchase order for the
prospective calendar quarters, and minimal product revenue was generated
during
the first three quarters of 2007.
Oncology
is another fast growing segment within the pharmaceutical industry, where
several new injectable medications are coming into the marketplace each year.
The injection treatments in oncology require multiple visits by the patient.
LidoSite use prior to those chemotherapy injections could help reduce the
pain
and provide a better chemotherapy experience for the patients.
Another
channel is institutional sales of LidoSite. By working with groups
that typically have volumes of doctors and business, such as specialty area
practice networks and groups of medical clinics, we may be able to reach
multiple amounts of patients through concentrated points of entry, thus possibly
optimizing our sales force’s efforts.
We
believe the market opportunities available within the needle pain and specialty
market segment are complimentary in utilizing our active transdermal patch
delivery system as point of entry platform into multiple market segments.
Our
efforts to gain additional distribution partners into the physician office
and
commercial diagnostic laboratories are intended to contribute to our near-term
success.
Insurance
Reimbursement
Our
efforts to make LidoSite reimbursable by insurers has yielded preliminary
indications that it will be reimbursable based on available evidence from
the
Technology Evaulation Center (TEC) of the Blue Cross and Blue Shield
Association which found sufficient evidence to permit conclusions that the
effect of iontophoretic drug delivery on health outcomes in patients requiring
administration of local anesthetic prior to skin puncture or dermal procedures
meets their criteria, a key to insurance reimbursement. Blue Cross of
Idaho, Blue Cross of California, and UniCare have each made determinations
that
iontophoresis may be considered medically necessary to administer local
anesthesia prior to a venipuncture or dematologic procedure. While
the indications as to reimbursability are still in the nascent stage, we
are
hopeful that these preliminary actions may aid in the broader market tendency
to
support potential use of LidoSite .
Infertility
Product
In
our
first foray into the peptide delivery market, we have partnered with Ferring
Pharmaceuticals, Inc., or Ferring, for the development of an innovative product
to treat infertility. The product under development would mimic the female
body's natural rhythms of hormonal secretions, a characteristic important
in the
delivery of therapeutics for the treatment of infertility. To be effective,
medication must be delivered in multiple daily doses for up to 21 days during
a
woman's 28-dayovulation cycle. Many patients currently need to undergo multiple
injection-based protocols for ovulation induction, sometimes as many as eight
daily injections for up to three weeks. The product being co-developed by
Vyteris and Ferring would make it possible to administer the peptide without
needles, and is being designed to deliver multiple transdermal pulses
automatically, around the clock, in a painless, convenient and cost-effective
manner, possibly with as little as two 12-hour.patches per day. In
addition to this less painful therapy, there are also potential benefits
that
would possibly reduce the likelihood of multiple births.
Our
long
term goal for our infertility product is to increase pregnancy rates without
painful delivery methods currently in use.. Our desired result is for
drug manufacturers to see the possible opportunity to capture a significant
percentage of possible infertility treatment candidates, who decline treatment
after the first doctor visit due to the prospect of the painful
injections.
Furthermore,
the use of an active patch to deliver other peptides could constitute a major
scientific breakthrough in the biotech and biopharma sectors. Virtually all
biotechnology drugs are peptide molecules, and — up to this point — require
injections or infusions as the route of administration. We believe
that our SmartPatch technology has the potential to effectively deliver complex
peptide profiles, and we hope to pursue a new method of delivery for the
high
growth bio-tech market which could lead to an increase in demand due to the
alternate delivery path and the possibility to increase clinical usage of
biotech drugs.
The
principal terms of our development and marketing agreement and a supply
agreement with Ferring are as follows:
|
|
·
|
We
are responsible for all product development activities. Product
development activities include all activities associated with the
design,
engineering and laboratory testing of the physical product and
its
manufacturing processes, including hardware, software, materials,
components, specifications, procedures and manufacturing equipment;
|
|
|
·
|
Ferring
is obligated to reimburse us for 50 percent of our product development
costs, provided such costs do not exceed 110 percent of the amount
budgeted;
|
|
|
·
|
Ferring
is responsible for all regulatory filings;
|
|
|
·
|
Ferring
is responsible for the conduct of, and cost of, clinical trials.
Clinical
trials include experimental testing of the product on humans in
a clinical
environment according to FDA guidelines to demonstrate safety and
efficacy
and ultimately gain FDA approval. This includes all activities
associated
with design of the experimental trials, selecting the test centers,
personnel costs associated with carrying out the trials, acquisition
and
analysis of data from the trials, and presentation or publication
of the
data in a format suitable for submission to the FDA; and
|
|
|
·
|
Ferring
is obligated to pay up to $9.0 million on the occurrence of certain
events
during the term of the agreements. Through September 30, 2007,
Ferring has
made $0.5 million of such milestone payments to us, and we cannot
gauge what, if any, of the rest of the payments we will receive.
|
On
June
2, 2005, Ferring submitted an investigational new drug (“IND”) application to
the FDA in preparation for the initiation of clinical trials on a new
transdermal product to treat female infertility. Clearance from the FDA
was received on July 2, 2005 and Ferring initiated clinical studies on July
18,
2005. Upon Ferring’s submission of the IND to the FDA, we received a
$0.3 million milestone payment from Ferring, which revenue recognition was
deferred and will be recognized over the life of the development and marketing
agreement.
Migraine
Another
key area where we are seeking to apply our SmartPatch technology is the
treatment of migraines. This may be a highly attractive market
segment, estimated at over $3 billion per year (“Migraine Market: Trexima
Approval Delays Benefits Generic Triptan”, RedOrbit NEWS, published March 29,
2007), where major market leaders face imminent patent expirations. By focusing
on these expiring drugs, we believe we can achieve more rapid commercialization
by offering potential partners expanded patent protection through use of
our
active transdermal patch delivery platform and potentially provide a more
effective product.
The
treatment of migraine requires rapid onset of medication. A class of
compounds known as “triptans” is currently considered an effective
treatment. We believe a significant market opportunity exists to
improve the efficacy of triptan therapy for migraines by changing the method
by
which triptans are administered. Taken orally, triptans often fail to
deliver sufficient quantities of medication in the short time frame required
to
optimally treat migraine onset. Further, they often fail to prevent
the second episode, known as recurrence, that many migraine patients suffer
within 12 to 18 hours after a first attack. We have demonstrated in a
Phase I study our proprietary active transdermal delivery technology can
be used
to provide controlled delivery of zolmitriptan, a leading migraine medication,
in humans. Our intent is to complete the necessary trials and obtain FDA
approval to launch zolmitriptan in a smart patch, about the time it loses
patent
protection.
Our
active patch technology can be pre-programmed for rapid delivery — as little as
10 minutes to achieve therapeutic levels — followed by a sustained maintenance
dose that may prevent recurrence. If our Smart Patch is applied in
this area, this customizable drug delivery could offer tremendous advantages
in
the treatment of migraine, and could improve patient satisfaction and patient
compliance. This method of delivery represents a unique and significantly
improved therapy and we believe it could be a potentially effective way of
treating migraine headaches and preventing recurring migraine
headaches.
We
have
already performed feasibility studies with respect to our migraine work and
we
expect to conduct our Phase I clinical trials of our proprietary transdermal
system in 2008.
NSAID
Pain Management
Another
key area of potential partnership with pharmaceutical companies we are pursuing
is in pain management, specifically, the non-steroidal anti-inflammatory
drug
(“NSAID”) sector, which falls in line with our strategy of pursuing high
probability, low risk opportunities leading to better patient
care. The NSAID market is potentially worth $6 billion (see “Celebrex
sales plunge 40 percent”, CNN Money.com, June 29, 2005).. The mid-2005
withdrawal of COX-2 Inhibitor products because of safety issues has led to
a 49
percent decline, or a $3 billion immediate market opportunity (see “Celebrex
sales plunge 40 percent”, CNN Money.com, June
29, 2005).
NSAIDs
have made a dramatic contribution to pain management, but their extensive
use
has also documented a problematic safety profile, due to gastrointestinal
(“GI”)
side effects associated with extended use or over dosing of the drugs. In
the
United States alone, more than 200,000 hospitalizations are attributed to
NSAID
use, and more than 16,000 deaths a year are attributed to NSAID use (“Easing the
Pain of Exercise”, HealthScout, July 22, 2003). We believe there is
market opportunity for a drug delivery system minimizing the GI side affects
associated with oral NSAIDs.
Our
active delivery system bypasses the gastrointestinal tract minimizing the
GI
side effects associated with oral NSAIDs, and circumvents a major disadvantage
of these commonly used medications. We believe that if our smart patch
technology is applied to NSAIDs, the controlled drug delivery profile from
our
active patch could also curtail overdosing of the drugs.
We
expect
to conduct clinical trials of our proprietary transdermal system for the
delivery of NSAIDs in 2008.
MANUFACTURING
AND SUPPLIERS
Patch
Manufacturing
We
have an automated manufacturing and
assembly facility for pre-commercial and commercial production of LidoSite
and
other patches based upon our Smart Patch technology. With this
competency in place, we have the capability of developing and manufacturing
other transdermal products that we may develop. Our facility is
periodically audited and reviewed by the Food and Drug
Administration. The facility also practices current Good
Manufacturing Practices.
We
conduct our manufacturing in a
14,000 square foot section of our 13-01 Pollitt Drive facility in Fair Lawn,
New
Jersey with a maximum production capacity of up to two million patches per
year. At our current production level we do not anticipate making the
units cost-effectively and expect that our production costs will exceed our
revenue. In order to manufacture the product cost-effectively we will
need to increase our manufacturing efficiency through the installation of
our
second manufacturing line that we expect will operate at four to five times
the
capacity of our current equipment.
We
design, develop and maintain our own
manufacturing processes, but use third parties to build the automated assembly
equipment and fabricate replacement parts when necessary.
We
have leased a second production
facility (17-01 Pollitt Drive in Fair Lawn, New Jersey) to be
utilized as we expand our manufacturing capacity. Expansion for this
second facility could result in substantial one-time fixed asset expenditures
in
order to bring the new equipment on line. .
Electronic
Dose Controller Development and Manufacturing
To
date, we have gained significant
expertise in the design and development of miniature, wearable electronic
dose
controllers using commercially available, off-the-shelf components assembled
onto miniature circuit boards. The controller that has been developed
for LidoSite is a simple, single-pulse device initiated by the push of a
button,
which turns on the electric current for a ten-minute interval as it delivers
the
drug. Sophisticated control circuitry senses the skin's electrical
resistance and limits the amount of current that is delivered to a safe,
comfortable level, thereby automatically adapting to a wide range of skin
types
and characteristics. This controller is usable for up to 99
applications of LidoSite.
Although
we designed and developed the
controller, have assembled several prototypes and own various patents on
its
design, we outsource manufacturing on a non-exclusive basis to a company
specializing in contract manufacturing of electronic medical devices. In
this
way, we can use the knowledge and facilities of the supplier towards the
goal of
manufacturing a high-quality, cost-effective controller available in quantities
sufficient to meet market demand. Manufacturing processes and
electronic components for the controller are fairly standardized and widely
available. Future versions of the dose controller for drugs other
than lidocaine may incorporate features such as enhanced programmability,
custom
componentry including integrated circuitry, and radio frequency and telemetry
technology as the designs evolve to fit various therapeutic applications
and
lifestyle aspects of the patient.
Suppliers
Our
principal suppliers are Hydrogel
Design Systems, Inc., Advanced Labelworx and Altron Inc. We also
purchase parts from single-source suppliers. Although we
have not experienced significant production delays attributable to supply
changes, we believe that, for the electrode subcomponent and hydrogel in
particular, alternative sources of supply would be difficult to develop over
a
short period of time. Because we do not have supply agreements and
direct control over our third-party suppliers, interruptions or delays in
the
products and services provided by these third parties may be difficult to
remedy
in a timely fashion. In addition, if such suppliers are unable or
unwilling to deliver the necessary parts or products, we may be unable to
redesign or adapt our technology to work without such parts or find alternative
suppliers or manufacturers. In such events, we could experience
interruptions, delays, increased costs, or quality control
problems.
PATENTS
AND PROPRIETARY TECHNOLOGY
Intellectual
Property
The
intellectual property that we own
is based on significant improvements we have made to our drug delivery
technology during more than 15 years of research and development, ten of
which
were as a division of Becton, Dickinson and Company, or
Becton Dickinson. A significant portion of our
intellectual property relates to the design and manufacture of our proprietary
disposable, active transdermal patches and electronic dose
controllers.
We
protect our technological and
marketing position in advanced transdermal drug delivery technology by filing
U.S. patent applications and, where appropriate, corresponding foreign patent
applications. Our success will depend in part upon our ability to
protect our proprietary technology from infringement, misappropriation,
duplication and discovery. Our policy is to apply for patent
protection for inventions and improvements deemed important to the success
of
our business. We have a portfolio of United States patents and
foreign patents. We have approached the design and development of our
active transdermal drug delivery systems with the objective of maximizing
overall delivery system efficiency while addressing commercial requirements
for
reproducibility, formulation stability, safety, convenience and
cost. To achieve this goal, our delivery systems integrate
proprietary and patented technology with commercially available, off-the-shelf
components.
Vyteris
holds over 150 worldwide
patents. This allows the products developed using Vyteris technology
to provide for a significant competitive advantage.
A
list, for each of our issued patents,
including the patent number, the title and the date on which the patent is
expected to expire, is set forth in our Form 10-KSB for the year ended December
31, 2006.
Iontophoresis,
as a way of delivering
drugs, has been well known for many years. Our patent portfolio
consists of innovations that advance basic iontophoresis technology
through:
|
|
·
|
enabling
more efficient electrode designs;
|
|
|
·
|
drug
formulations enhancing iontophoresis;
|
|
|
·
|
specific
transdermal patch features allowing convenient use and low manufacturing
cost;
|
|
|
·
|
electronic
circuitry and program algorithms improving the safety and control
of
medication delivery; and
|
|
|
·
|
ability
to deliver specific classes of molecules not previously possible.
|
We
believe these patented features
provide for improved clinical performance and provide a competitive advantage
in
manufacturing cost and quality. Some areas in which we have a
particular concentration of patents are components, designs and formulations
resulting in little to no skin sensation during delivery, delivery of cell
adhesion inhibitors via iontophoresis, creating safe, single-use patches
that
cannot be inadvertently reused, and patches that can be used with drugs having
limited aqueous stability.
The
issuance of a patent is not
conclusive as to its validity or as to the enforceable scope of the claims
of
the patent. The patent positions of pharmaceutical, biotechnology and
drug delivery companies, including our company, are uncertain and
involve complex legal and factual issues. Accordingly, we cannot
assure investors that our patents will prevent other companies from developing
similar products or products which produce benefits substantially the same
as
our products, or that other companies will not be issued patents that may
prevent the sale of our products or require us to pay significant licensing
fees
in order to market our products. If our patent
applications are not approved or, even if approved, if such
patents are circumvented or not upheld in a
court of
law, our ability to competitively
exploit our patented products and technologies may
be significantly reduced. Additionally, the
coverage claimed in a patent application can be significantly reduced before
the
patent is issued. As a consequence, we do not
know whether any of our patent applications will be
granted with broad coverage or whether the claims
that eventually issue or that relate to our current
patents will be circumvented. Since patent applications in
the United States can be maintained
in secrecy until patents issue, and
since publication of discoveries in scientific
or patent literature often lag behind actual discoveries, we cannot be certain
that we were the
first inventor of inventions covered by
our issued patents or
pending patent applications
or that we were the first to file patent
applications for such inventions. Moreover, we
may have to participate in
interference proceedings declared by the
United States Patent
and Trademark Office to determine priority
of invention, which could result in substantial
cost to us, even if the eventual outcome is favorable. An adverse
outcome could subject us to significant liabilities to third
parties, require disputed rights to
be licensed from or to
third parties or require us to
cease using the technology in dispute.
Also,
patents may or may not provide
competitive advantages for their respective products or they may be challenged
or circumvented by competitors, in which case our ability to commercially
exploit these products may be diminished.
From
time to time, we may need to
obtain licenses to patents and other proprietary rights held by third parties
in
order to develop, manufacture and
market our products. If we
are unable to timely obtain these licenses on
commercially reasonable terms, our ability to commercially exploit such products
may be inhibited or prevented. Additionally, we cannot assure investors that
any
of our products or technology will be patentable or that any future patents
we
obtain will give us an exclusive position in the subject matter claimed by
those
patents. Furthermore, we cannot assure investors that
our pending patent
applications will result in
issued patents, that
patent protection will be secured for any particular
technology, or that our issued patents will be valid, enforceable and provide
us
with meaningful protection.
Although
we have entered into invention
assignment agreements with our employees and with certain advisors, if those
employees or advisors develop inventions or processes independently which
may
relate to products or technology under development by us, disputes may arise
about the ownership of those inventions or processes. Time-consuming
and costly litigation could be necessary to enforce and determine the scope
of
our rights.
We
also rely on trade secrets and
proprietary know-how that we seek to protect, in part, through confidentiality
agreements with our strategic partners, customers, suppliers, employees and
consultants. It is possible that these agreements will be breached or will
not
be enforceable in every instance, and that we will not have adequate remedies
for any such breach. It is also possible that our trade secrets will
otherwise become known or independently developed by competitors.
GOVERNMENTAL
REGULATION
Under
the United States Food, Drug and
Cosmetic Act, "new drugs" must obtain clearance from the Food and Drug
Administration, or FDA before they can be marketed lawfully in the United
States. Applications for marketing clearance must be based on
extensive clinical and other testing, the cost of which is very substantial.
Approvals – sometimes including pricing approvals -- are required
from health regulatory authorities in foreign countries before
marketing of pharmaceutical products may commence in
those countries. Requirements for approval may differ from
country to country, and can involve additional testing. There can be substantial
delays in obtaining required clearances from both the FDA and foreign
regulatory authorities after applications are filed. Even
after clearances are obtained, further delays may be
encountered before the products
become commercially available in countries requiring
pricing approvals.
Product
development generally involves
the following steps which are required by the regulatory process:
|
|
·
|
preclinical
development, during which initial laboratory development and in
vitro and
in vivo testing takes place;
|
|
|
·
|
submission
to the FDA of an investigational new drug application (IND) for
the
commencement of clinical studies;
|
|
|
·
|
adequate
and well-controlled human clinical trials -- Phase I, II and III
studies
--to establish the safety and efficacy of the product;
|
|
|
·
|
submission
of an NDA to the FDA requesting clearance to market the product
and
comparable filings to regulatory agencies outside the United States
if the
product is to be marketed outside of the United States; and
|
|
|
·
|
clearance
from the FDA -- and foreign regulatory authorities, if applicable
-- must
be obtained before the product can be marketed.
|
Medical
devices are subject to
comparable regulatory requirements.
Each
of these steps can take several
years and can cost tens of millions of dollars. Failure to obtain, or
delays in obtaining, regulatory clearance to market new products, as well
as
other regulatory actions and recalls, could adversely affect our financial
results.
The
packaging, labeling and advertising
of pharmaceutical products are also subject to government
regulation. The FDA recommends preclearing advertising materials
prior to the launch of a product, and the launch materials for products
receiving an accelerated FDA clearance must be precleared by the
FDA. With an accelerated FDA clearance, all labeling and advertising
must be submitted to the FDA 30 days prior to use, unless the FDA determines
otherwise. In addition, the FDA may require that additional clinical
studies - Phase IV studies - be completed after it grants clearance
to market a product.
Our
research and development,
manufacturing and distribution operations involve the use of hazardous
substances and are regulated under international,
federal, state and local laws governing health and safety and the
environment. We believe that our operations comply in all material
respects with applicable environmental laws and worker health and safety
laws;
however, the risk of environmental liabilities cannot be eliminated and we
cannot assure investors that the application of environmental and health
and
safety laws to us will not require us to incur significant
expenditures. We estimate that the annual expenditures related for
compliance with applicable health and safety and environmental laws is
approximately $0.1 million.
PROPERTIES
AND FACILITIES
We
lease approximately 27,000 square
feet of manufacturing, warehouse, laboratory and office space located at
13-01 Pollitt Drive in Fair Lawn, New
Jersey. This lease expires in September 2011. These
facilities include manufacturing space sufficient to house our current patch
manufacturing and packaging equipment, and a second manufacturing line currently
being built to our specifications. Our facilities also contain
prototype labs for simultaneous production of clinical supplies of multiple
products, and nine additional labs for research and development and quality
control purposes. For the years ended December 31, 2006 and 2005,
rent expense for the 13-01 lease was $0.2 million and $0.3 million,
respectively.
We
also have a lease for additional
space located at 17-01 Pollitt Drive in Fair Lawn, New Jersey,
approximately 200 yards from our headquarters building. The lease
covers approximately 26,000 square feet of space. The lease term
expires in July 2015. The primary purpose of this facility is for the
future expansion of our manufacturing capability. This facility also
includes office space. For the years ended December 31, 2006 and
2005, rent expense for the 17-01 lease was $0.2 million and $0.3 million,
respectively.
EMPLOYEES
As
of November 30, 2007, we had a
staff of 68 employees, of which 3 are part-time employees and 65 are full-time
employees. Of those 68 employees, 14 are in manufacturing and process
development, 16 in regulatory, quality and analytical services, 17 in research
and development, 6 in business development and marketing and 15 in
administration and management. We also have 4 consultants currently
providing services in the following areas: regulatory compliance, manufacturing
distribution, legal and healthcare.
None
of our employees are represented
by a labor union or covered by a collective bargaining agreement, nor have
we
experienced any work stoppages.
LEGAL
PROCEEDINGS
From
time to time, we are involved in
lawsuits, claims, investigations and proceedings, including pending opposition
proceedings involving patents, that arise in the ordinary course of
business. There are no matters pending that we expect to have a
material adverse impact on our business, results of operations, financial
condition or cash flows.
RISK
FACTORS
You
should carefully consider the risks described below together with all of
the
other information included in this prospectus, as well as all other information
included in all other filings, incorporated herein by reference, when evaluating
the Company and its business. If any of the following risks actually occurs,
our
business, financial condition, and results of operations could suffer. In
that
case, the price of our common stock could decline and our stockholders may
lose
all or part of their investment.
RISKS
RELATED TO OUR BUSINESS
We
are experiencing a severe, continuing cash shortage and without sufficient
financing we may be required to cease operations.
As
of
September 30, 2007, our cash and cash equivalents amounted to $6.2 million.
Without any substantial revenues, we have been dependent upon more than $52.1
million in borrowings and equity financings since January 1, 2005 to remain
in
business. As of September 30, 2007, our current liabilities were less
than our current assets by approximately $0.4 million. If we do not
continue to raise capital until we generate sufficient sums of revenue to
cover
this working capital deficit, we will be required to discontinue or
substantially modify our business. These factors raise substantial
doubt about our ability to continue as a going concern.
We
have never been profitable, we may never be profitable, and, if we become
profitable, we may be unable to sustain profitability.
From
November 2000 through September 30, 2007, we incurred net losses in excess
of
$163.2 million, as we had been engaged primarily in clinical testing and
development activities. We have never been profitable, we may never be
profitable, and, if we become profitable, we may be unable to sustain
profitability. We expect to continue to incur significant losses for the
foreseeable future and to finance our operations through sales of securities
and
incurrence of indebtedness.
We
are subject to restrictive covenants which are not likely to be waived by
the
holders of various financing instruments to which the Company is a
party.
When
we
have issued various financing instruments, we were required to agree to several
restrictive covenants, including, among others, restrictions on our ability
to
sell to, merge with, or purchase, another business, incur additional debt,
grant
liens on our assets, or buyback or redeem stock, without the consent of those
lenders. The holders such instruments have advised us that they have no
intention of granting us waivers with respect to any of those covenants.
Several
of those covenants have made, and may make, it more difficult for us to obtain
additional financing through the issuance of debt securities.
An
agreement that provided us with our principal source of revenues is subject
to
termination on short notice.
Our
agreement with Ferring Pharmaceuticals, Inc., under which we are developing
a
drug delivery product for female infertility, enables Ferring to terminate
our
relationship on short notice. This agreement was our principal source of
revenues during 2006 and during the first nine months of 2007. Any reduction
in
our revenues will produce further need for capital infusions, which may not
be
available to us.
The
Company has adopted a new business strategy, which involves a recommencement
of
its manufacturing and sales and marketing activities, which it may not be
able
to accomplish.
In
September 2006 we announced the adoption of a new business strategy which
required significant additional financing to accomplish that strategy, which
may
not be available on acceptable terms, or at all. The new plan
required us to resume manufacturing in the second quarter of
2007. Further, our new plan required that we be ready to recommence
in the third quarter of 2007, which we have accomplished. We will
need to rapidly and substantially ramp up our manufacturing capability,
relationships with critical vendors, obtain additional regulatory approvals
(including FDA approval of packaging and labeling changes), hire additional
technical employees, and improve its know-how and processes, all of which
may not be possible in those time frames or at all. Also, there are
difficulties inherent in any substantial ramp up process, such as management
of
increased infrastructure and streamlining manufacturing processes, which
may
further hinder our ability to recommence manufacturing and sales and marketing
in a timely manner. In order to ramp up activities quickly, we will
need to retain current consultants and engage new consultants in the future,
who
may not be readily available or may be available only at costs higher than
those
for which we have budgeted.
Our
new strategy, when implemented, may not be sufficient to enable us to operate
on
a self-sustaining basis.
There
are
several steps that we intend to take to turn-around our operational difficulties
and to respond to the challenges that we face. We cannot assure you
that we will be successful in implementing any or all of those plans or that,
if
implemented; such plans will be successful in enabling us to operate on a
self-sufficient basis or on a basis that will enable us to attract additional
capital.
Even
if we are successful in implementing our new strategy, we will likely require
additional capital and cannot assure you that we will be able to raise such
capital on acceptable terms, if at all.
We
adopted our new business strategy in
an effort to address problems that we have experienced in developing products
that have near-term revenue potential. However, even if our new
strategy is successful we cannot assure you that we will attain profitability
in
the near term, the medium term or ever. Accordingly, we expect that
we will require additional capital in order to be able to reach profitable
operations, although we cannot assure you that we will ever be
profitable. Given the difficulties that we have experienced in the
past, we cannot assure you that we will be successful in our capital raising
efforts. If we are unable to raise sufficient additional capital on
acceptable terms in a timely fashion, we will be forced to restrict new product
development and may be unable to continue our business operations. If
we raise capital in the future and it involves equity, such a financing will
almost certainly involve substantial dilution of outstanding
equity. Any subsequent offerings may also require the creation or
issuance of a class or series of stock that by its terms ranks senior to
the
common stock with respect to rights relating to dividends, voting and/or
liquidation. It will be necessary for us to seek additional capital almost
immediately.
We
may be unable to hire and retain the key management necessary to develop
and
grow our business.
We
rely
on the continued service of our senior management, specifically, our CEO,
Timothy McIntyre, our CFO, Anthony Cherichella, and our chief technical staff,
and other key employees and the hiring of new qualified employees. In the
pharmaceutical industry, there is substantial and continuous competition
for
highly skilled business, product development, technical and other personnel.
Given the concern over our long-term financial strength, we may not be
successful in recruiting new personnel and retaining and motivating existing
personnel, which could lead to increased turnover and reduce our ability
to meet
the needs of our current and future customers. If we are unable to retain
qualified personnel, we could face disruptions to operations, loss of key
information, expertise or know-how, and unanticipated additional recruitment
and
training costs. If employee turnover increases, our ability to provide customer
service and execute our strategy would be negatively affected.
For
example, our ability to increase revenues in the future depends considerably
upon our success in training and retaining effective direct sales personnel
and
the success of our direct sales force. We might not be successful in these
efforts. Our products and services require sophisticated sales efforts. We
may
experience significant turnover in our sales force including domestic senior
sales management. Our business will be harmed if we fail to retain qualified
sales personnel, or if newly hired salespeople fail to develop the necessary
sales skills or develop these skills more slowly than anticipated. Additionally,
we need to recruit experienced technical staff who are specifically trained
in
developing and manufacturing medical devices.
We
plan to make capital expenditures that may result in excess manufacturing
capacity.
We
intend
to take delivery of equipment which has been manufactured to our specifications
and is currently on the premises of the manufacturer in
Europe. However, current demand for our LidoSite product is not
sufficient to make efficient use of this equipment. When we take
delivery of this equipment (anticipated to be in the first half of 2008),
it
will be necessary for us to incur substantial additional expenses to install
the
equipment and qualify the production space under FDA regulations and we may
have
excess manufacturing capacity, and we will not be able to begin to predict
when
we will be able to, if at all, utilize this capacity until there has been
a
sufficient prospective history of sales to gauge demand for the
products
We
received an unscheduled visit from the FDA during December 2005 and received
a
report on Form 483 which required us to spend substantial time and money
to
correct deficiencies identified by the FDA.
The
FDA
conducted a cGMP (current Good Manufacturing Practices) inspection of our
facility and manufacturing process at our Fair Lawn, New Jersey location
from
late December 2005 to January 2006. As a result of the inspection, we
received a report on Form 483. Thereafter, we responded to the FDA with a
commitment to improve certain documentation, procedures and manufacturing
processes. Implementing these improvements has required us to spend substantial
time and money prior to the resumption of manufacturing our LidoSite
product. We may be subject to additional inspections by the
FDA. If we are required to take additional remedial measures, we may
not have sufficient resources to complete the activities in the proscribed
timeframes or at all. Such noncompliance could have severe
consequences, including halting of manufacturing, distribution and sales,
product recall or product seizure.
Our
2006 audited financial statements contain, and our future audited financial
statements are likely to contain, an explanatory paragraph expressing
uncertainty regarding our ability to continue as a going concern. The inclusion
of this paragraph may make it more difficult for us to raise additional capital
on acceptable terms.
The
report of the independent registered public accounting firm relating to the
audit of our consolidated financial statements for the year ended December
31,
2006 contains an explanatory paragraph expressing uncertainty regarding our
ability to continue as a going concern because of our operating losses and
our
need for additional capital. Such explanatory paragraph could make it more
difficult for us to raise additional capital and may materially and adversely
affect the terms of any financing that we may obtain.
Since
we are a company with a limited independent operating history, it is difficult
to predict our future growth and operating results, thereby making investment
decisions difficult.
Our
limited operating history as an independent drug delivery business makes
predicting our future growth and operating results difficult. Vyteris, Inc.,
our
subsidiary incorporated in Delaware, now a subsidiary of Vyteris, Inc.
(incorporated in Nevada), was incorporated in Delaware in 2000, although a
substantial portion of its business was developed by Becton Dickinson from
prior
to 1990 until 2000.
As
a small company with limited financial resources, we have not proven that we
will be capable to meet the many challenges that we face.
You
should consider the risks and
uncertainties that a company with limited financial resources, such as Vyteris,
faces in the rapidly evolving market for drug delivery technologies. In
particular, you should consider that we have not proven that we will be able
to:
|
|
·
|
raise
significant additional capital in the public or private markets;
|
|
|
·
|
obtain
the regulatory approvals necessary to commence selling drug delivery
systems that we may develop in the future,
|
|
|
·
|
manufacture
products, including our LidoSite product, in a manner that enables
us to
be profitable or meets regulatory, strategic partner or customer
requirements;
|
|
|
·
|
attract,
retain and manage a large, diverse staff of engineers and scientists;
|
|
|
·
|
develop
the relationships with strategic partners and key vendors that are
necessary to our ability to exploit the processes and technologies
that we
develop;
|
|
|
·
|
effectively
manage our operations;
|
|
|
·
|
develop
new products and drug delivery processes and new applications for
our drug
delivery technology;
|
|
|
·
|
respond
effectively to competitive pressures; or
|
If
we
cannot accomplish these goals, our business is not likely to
succeed.
Further,
you should be aware that LidoSite may not ultimately be successfully
commercialized; we may experience supply interruptions and other uncertainties
related to our future ability to acquire the components necessary for the
manufacture of LidoSite, which are outside the Company's control and may impact
the success of product launch and market penetration, including the possibility
that we may not have sufficient components to manufacture additional launch
quantities if necessary to meet product demand; and the risk that we may
encounter production issues and/or inefficiencies in the process of
manufacturing commercial quantities of LidoSite, which could adversely affect
the success of product launch and LidoSite’s results of operations.
Our
drug delivery business may not generate any material revenues from sales of
the
one product that we are currently permitted to sell, in which case our results
of operations, financial condition and liquidity will be materially and
adversely impacted and our opportunities to develop, market and sell other
products may be jeopardized.
To
date,
we have not generated material revenues from sales of our first drug delivery
product, LidoSite, and in fact generated minimal revenue whatsoever from
LidoSite sales during the first three quarters of 2007, our most recent
reporting period. As is common in our industry, we have spent many years and
substantial sums of money in developing LidoSite. To develop that product to
the
point where we are able to commence commercial sales, it has been necessary
for
us to prove our concepts, develop patent positions, engage in substantial
clinical trials, develop appropriate manufacturing processes, obtain necessary
regulatory approvals and establish a marketing and distribution agreement with
B. Braun. Our initial product sales demonstrated that we needed to perform
corrective work on the controller component of our LidoSite product. With all
of
this work effort and the attendant capital and operating expenditures, we still
have not tested the market in a manner that can assure us or our investors
that
we will derive material revenues from LidoSite. If we are unable to derive
material revenues from the sale of our LidoSite product, our liquidity will
be
materially and adversely impacted, we will require additional capital and we
may
find it more difficult to attract marketing partners for subsequent products
that we may develop.
We
cannot expect that we will be able to derive material revenues from the sale
of
products other than LidoSite in the near future.
While
we
have commenced development of other products and believe that our technology
can
and should be pursued with respect to several applications that could result
in
commercially viable products, the process of developing drug delivery products
to the point of commercial sales takes significant time and requires a
substantial commitment of financial and other resources that may not be
available to us for regulatory approval. We cannot assure investors that we
will
have the financial resources necessary to bring future products to market or
that developments in our industry will not preclude us from expanding our
product line beyond LidoSite. If we are unable to bring additional products
to
market, we will be forced to rely, at best, on a single source of revenue and
the future success of our Company would be dependent entirely upon the continued
demand for a single product. If we are forced to rely on a single product,
our entire business would be at risk in the event that market or
competitive conditions threatened the viability of that product, thereby
increasing the risk of a dramatic decline in the market value of our capital
stock.
We
may not be able to obtain FDA or foreign regulatory approval for our products
in
a timely manner, or at all, which could have a material adverse effect on our
ability to sell and market our products.
Drug
formulations and related delivery systems that we may develop in the future
cannot be sold in the United States until the FDA approves such products for
medical use. Similar foreign regulatory approvals will be needed in order to
sell any new drug formulations and related drug delivery systems, including
our
LidoSite product, outside of the U.S. We may not be able to obtain FDA or
foreign regulatory approval for our products in a timely manner, or at all.
Delays in obtaining FDA or foreign approvals for our products could result
in
substantial additional costs to us, and, therefore, could adversely affect
our
ability to compete with other drug delivery companies. If we do not obtain
such
approvals at all, our revenues may be insufficient to support continuing
operations.
We
rely on single suppliers for certain key materials and components used in our
LidoSite product, which makes us dependent on persons that we cannot
control.
Certain
raw materials and components used in the manufacture of our LidoSite product
are
available only from single suppliers. Some of those materials or components
are
custom-made for us and are the result of long periods of collaboration with
our
suppliers. The hydrogel that we use to hold lidocaine in the patch and the
electrode subcomponents that we use to carry current through our lidocaine
delivery system, for example, are both provided by single suppliers. Any
curtailment of the availability of such raw materials or components could be
accompanied by production or other delays and could result in a material loss
of
sales, with resulting adverse effects on our business and operating results.
In
addition, because raw material sources for pharmaceutical products must
generally be approved by regulatory authorities, changes in raw material
suppliers may result in production delays, higher raw material costs and loss
of
sales, customers and market share.
The
development or identification of alternative sources, or redesigning products,
could be time-consuming and expensive. We cannot assure you that
price increases or interruptions in the supply of raw materials and components
will not occur in the future or that we will not have to seek alternate
suppliers or obtain substitute raw materials or components, which may require
additional product validations and regulatory approvals. Further, our suppliers
could experience price increases or interruptions in the supply of materials
from their suppliers, or could fail to meet our or governmental manufacturing
standards.
Any
significant price increase, interruption of supply, our inability to secure
an
alternate source or our inability to qualify a substitute material could have
a
material adverse effect on our ability to manufacture our LidoSite product
or
maintain regulatory approval.
We
have limited experience in manufacturing drug delivery systems for commercial
resale and may be unable to manufacture our products for commercial sale on
a
profitable or reliable basis.
As
an
organization we have had limited experience in manufacturing drug delivery
systems for sale. We must increase our production capabilities significantly
beyond our present manufacturing capacity, which has been focused on producing
small quantities of our LidoSite product, and incur significant capital expense
in order to be able to produce our LidoSite product in commercial volumes in
a
cost effective manner. The equipment and machinery that we use to manufacture
the drug and patches for our LidoSite product are expensive and custom-built,
and have never been used in the large-scale production of pre-filled drug
delivery patches.
We
cannot
assure you that we can:
|
|
·
|
successfully
increase our manufacturing capabilities and develop large-scale
manufacturing processes on a profitable basis;
|
|
|
·
|
hire
and retain skilled personnel to oversee our manufacturing operations;
|
|
|
·
|
avoid
design and manufacturing defects and correct or redesign components
once
they are in production; or
|
|
|
·
|
develop
and maintain our manufacturing facility in compliance with governmental
regulations, including the FDA's good manufacturing practices.
|
We
may
not be able to manufacture our LidoSite product, or any future products, in
a
manner that ensures that the systems provide reproducible dosages of stable
formulations of drugs for sufficient periods after manufacture. If we cannot
ensure that our products have sufficient post-production shelf-life, we may
be
unable to produce our products in sufficient quantities to develop an economical
supply chain. Accordingly, we may not be able to manage our inventory
successfully.
We
operate in a complex regulatory environment which creates specific challenges
in
hiring and maintaining our sales force.
Pharmaceutical
companies, such as Vyteris, operate in a regulatory environment at both the
federal and state level, which continues to increase in complexity as well
as
the areas which are covered by regulation. Additionally, both federal
and state regulations may impose different regulatory and reporting requirements
on the same areas, thus making compliance even more difficult and
intricate. Many areas of these regulations cover reporting and
compliance by our sales force, thus as we continue to expand our sales force,
it
becomes increasingly difficult to assure full compliance without the expenditure
of significant resources. This expenditure of resources affects our
ability to assure commercial success and may affect our
profitability.
The
failure of any of our products, including our LidoSite product, to achieve
market acceptance could materially and adversely impact our future
success.
Our
future success depends upon the acceptance of our LidoSite product and any
of
our potential future products by health care providers and patients. In
addition, our future success may be dependent upon acceptance by third-party
payors -- including, without limitation, health insurance companies, Medicaid
and Medicare -- of products that we may develop in the future. Such market
acceptance may depend on numerous factors, many of which may not be under our
control, including:
|
|
·
|
the
safety and efficacy of our
products;
|
|
|
·
|
regulatory
approval and product labeling;
|
|
|
·
|
the
availability, safety, efficacy and ease of use of alternative
technologies;
|
|
|
·
|
the
price of our products relative to alternative technologies; and
|
|
|
·
|
for
future products, the availability of third-party reimbursement.
|
Our
LidoSite product is based upon a method of drug delivery through the skin that,
to date, has not gained widespread market acceptance. We cannot assure you
that
LidoSite or any future product will ever gain broad market
acceptance.
In
addition, the adoption of new pharmaceutical products is greatly influenced
by
health care providers and administrators, inclusion in hospital formularies,
and
reimbursement by third party payors. Because our existing and proposed drug
delivery systems encompass both a device and a drug and may be used by many
different departments within a hospital or health care facility, buying
decisions in these settings require more departmental approvals than are
required for either a stand-alone drug or a stand-alone device. As a result,
it
may be more difficult and more time consuming to achieve market penetration
with
our products. We cannot assure investors that health care providers and
administrators, hospitals or third party payors will accept our products on
a
large scale or on a timely basis, if at all, or that we will be able to obtain
approvals for additional indications and labeling for our products which
facilitate or expand their market acceptance or use. In addition, unanticipated
side effects, patient discomfort, defects or unfavorable publicity concerning
any of our products, or any other product incorporating technology similar
to
that used by our products, could have a material adverse effect on our ability
to commercialize our products or achieve market acceptance.
We
may be unable to secure strategic partnering relationships, which could limit
our ability to effectively market, sell or distribute certain
products.
In
order
for us to develop, market, sell and distribute certain future products, we
will
be dependent on entering into satisfactory arrangements with strategic partners.
We cannot assure investors that we will be able to negotiate such agreements
on
terms that are acceptable to us, or at all. In addition, we cannot assure any
investor that any strategic partner will not also engage in independent
development of competitive delivery technologies.
If
we are unable to protect our proprietary technology and preserve our trade
secrets, we will increase our vulnerability to competitors which could
materially adversely impact our ability to remain in business.
Our
ability to commercialize successfully our LidoSite product and any other
products that we develop will depend, in large measure, on our ability to
protect those products and our technology with United States and foreign
patents. We will also need to continue to preserve our trade secrets. The
issuance of a patent is not conclusive as to its validity or as to the
enforceable scope of the claims of the patent. The patent positions of
pharmaceutical, biotechnology and drug delivery companies, including our
Company, are uncertain and involve complex legal and factual
issues.
We
cannot
assure you that our patents will prevent other companies from developing similar
products or products which produce benefits substantially the same as our
products, or that other companies will not be issued patents that may prevent
the sale of our products or require us to pay significant licensing fees in
order to market our products. Accordingly, if our patent applications are not
approved or, even if approved, if such patents are circumvented or not upheld
in
a court of law, our ability to competitively exploit our patented products
and
technologies may be significantly reduced. Additionally, the coverage claimed
in
a patent application can be significantly reduced before the patent is
issued.
From
time
to time, we may need to obtain licenses to patents and other proprietary rights
held by third parties in order to develop, manufacture and market our products.
If we are unable to timely obtain these licenses on commercially reasonable
terms, our ability to commercially exploit such products may be inhibited or
prevented. Additionally, we cannot assure investors that any of our products
or
technology will be patentable or that any future patents we obtain will give
us
an exclusive position in the subject matter claimed by those patents.
Furthermore, we cannot assure investors that our pending patent applications
will result in issued patents, that patent protection will be secured for any
particular technology, or that our issued patents will be valid or enforceable
or provide us with meaningful protection.
If
we are required to engage in expensive and lengthy litigation to enforce our
intellectual property rights, the costs of such litigation could be material
to
our results of operations, financial condition and liquidity and, if we are
unsuccessful, the results of such litigation could materially adversely impact
our entire business.
We
may
find it necessary to initiate litigation to enforce our patent rights, to
protect our trade secrets or know-how or to determine the scope and validity
of
the proprietary rights of others. We plan to aggressively defend our proprietary
technology and any issued patents, if funding is available to do so.
Litigation concerning patents, trademarks, copyrights and proprietary
technologies can often be time-consuming and expensive and, as with litigation
generally, the outcome is inherently uncertain.
Although
we have entered into invention assignment agreements with our employees and
with
certain advisors, if those employees or advisors develop inventions or processes
independently which may relate to products or technology under development
by
us, disputes may also arise about the ownership of those inventions or
processes. Time-consuming and costly litigation could be necessary to enforce
and determine the scope of our rights under these agreements.
We
also rely on confidentiality
agreements with our strategic partners, customers, suppliers, employees and
consultants to protect our trade secrets and proprietary know-how. We may be
required to commence litigation to enforce such agreements and it is certainly
possible that we will not have adequate remedies for breaches of our
confidentiality agreements.
Other
companies may claim that our technology infringes on their intellectual property
or proprietary rights and commence legal proceedings against us which could
be
time-consuming and expensive and could result in our being prohibited from
developing, marketing, selling or distributing our products.
Because
of the complex and difficult legal and factual questions that relate to patent
positions in our industry, we cannot assure you that our products or technology
will not be found to infringe upon the intellectual property or proprietary
rights of others. Third parties may claim that our products or technology
infringe on their patents, copyrights, trademarks or other proprietary rights
and demand that we cease development or marketing of those products or
technology or pay license fees. We may not be able to avoid costly patent
infringement litigation, which will divert the attention of management away
from
the development of new products and the operation of our business. We cannot
assure investors that we would prevail in any such litigation. If we are found
to have infringed on a third party's intellectual property rights, we may be
liable for money damages, encounter significant delays in bringing products
to
market or be precluded from manufacturing particular products or using
particular technology.
Other
parties have challenged certain of our foreign patent applications. If such
parties are successful in opposing our foreign patent applications, we may
not
gain the protection afforded by those patent applications in particular
jurisdictions and may face additional proceedings with respect to similar
patents in other jurisdictions, as well as related patents. The loss of patent
protection in one jurisdiction may influence our ability to maintain patent
protection for the same technology in another jurisdiction.
If
we do not accurately predict demand for our products when deciding to invest
in
the development of new products, we will likely incur substantial expenditures
that will not benefit our business.
Research
and development, clinical testing and obtaining regulatory approvals for new
drug delivery systems takes a significant amount of time and requires
significant investment in skilled engineering and scientific personnel and
in
expensive equipment. Furthermore, manufacturing our lidocaine delivery system
requires expensive, custom-built machinery. We have made these investments,
and
intend to continue to make such investments, for our LidoSite product based
on
internal projections of the potential market for that system and of our
potential profit margins on sales of that system. If those projections are
inaccurate, we may not be able to obtain an acceptable return on our investment
in the development of our LidoSite product. If our projections of the prospects
of new products are inaccurate, we may make investments in the development,
testing and approval of those products that may result in unsatisfactory
returns.
We
may be unable to hire and retain skilled engineers and scientists in a tight
labor market, in which case we will be severely hampered in our product
development efforts and in our ability to attract marketing and distribution
partners.
Skilled
employees in our industry are in great demand. We are competing for employees
against companies located near our headquarters that are more established than
we are and have the ability to pay more cash compensation than we do. We require
scientific and engineering personnel in many fields, some of which are addressed
by relatively few companies. As a result, we may continue to experience
difficulty in hiring and retaining highly skilled employees, particularly
engineers and scientists. If we are unable to hire and retain skilled engineers
and scientists, our business, financial condition, operating results and future
prospects could be materially adversely affected.
If
we are unable to develop products or technologies that will be marketable,
we
will not be able to remain in business.
We
may
not be able to develop drug delivery products or technologies that will be
marketable. Even if we are able to develop marketable drug delivery products
or
technologies, we may not be able to develop them or obtain patent protection,
successful clinical trial results or regulatory approval for them. Our research
and development efforts may be hampered by a variety of factors, many of
which are outside of our control. Sustained development failures could
materially adversely impact our business.
We
face substantial competition for our LidoSite product and any future products
that we may develop, as well as for strategic partner transactions. Our failure
to adequately compete could have a material adverse effect on our ability to
develop, market and sell our products and meet our financial
projections.
There
is
substantial competition to develop alternative drug delivery solutions from
both
drug delivery technology and pharmaceutical companies, most of which are much
larger and have far greater resources than we do. Further, the drug delivery,
pharmaceutical and biotechnology industries are highly competitive and rapidly
evolving. We expect that significant developments in those industries will
continue at a rapid pace. Our success will depend on our ability to establish
and maintain a strong competitive position for our LidoSite product while
developing new products that are effective and safe. We cannot assure you that
any of our products will have advantages over alternative products and
technologies that may be developed later and that may be significant enough
to
cause health care providers to prefer those products or technologies over
ours.
In
our
drug delivery segment, which is focused on the process of actively delivering
drugs through the skin, we are aware of several companies that are also
developing or marketing products based on this process. We also face competition
from companies that are currently testing or already marketing delivery systems
or products for lidocaine or similar topical anesthetics. We face indirect
competition from companies that are actively involved in the development and
commercialization of modified drug delivery technologies, including oral,
pulmonary, bucal, nasal and needle-less injections, as well as companies working
on processes that passively deliver drugs through the skin. We also expect
to compete with other drug delivery companies and technologies in the
establishment of strategic partnering arrangements with large pharmaceutical
companies to assist in the development or marketing of products. Competition
is
expected to intensify as more companies enter the field.
Most
of
our competitors have substantially greater financial, technical, research and
other resources, are more experienced in research and development,
manufacturing, pre-clinical and clinical testing, and obtaining regulatory
approvals, and are larger, more established and have more collaborative partners
than we do. In addition, those other entities may offer broader product lines
and have greater name recognition than we do. Those other entities may succeed
in developing competing technologies and obtaining regulatory approvals and
market share more rapidly than we can. Some of those companies have competing
products that have already been approved by the FDA and foreign authorities,
or
are further along in development than is our LidoSite product. We cannot assure
you that those competitors will not succeed in developing or marketing products
that are more effective or more commercially acceptable than our lidocaine
delivery system or any future product. We cannot assure you that we will have
the financial resources, technical or management expertise or manufacturing
and
sales capability to compete in the future.
Increased
competition may result in price cuts, reduced gross margins and loss of market
share, any of which could have a material adverse effect on our business,
financial condition, results of operations and future prospects.
We
may not be able to license complementary drug technologies or drug
reformulations to expand our product offerings, in which case we will be
significantly limited in our product offerings.
In
order
to enhance our platform technology, strengthen our intellectual property
portfolio and expand our overall market opportunity beyond that for our LidoSite
product, we may seek to acquire or license rights to additional drug delivery
technologies or reformulations of FDA-approved drugs that compliment our core
drug delivery platform. We may not be able to acquire or license such other
technologies or drug reformulations on terms that are acceptable to us, if
at
all. Further, efforts to identify such technologies and attempts to negotiate
the terms of such acquisitions or licenses may divert the attention of our
management away from the internal development of new applications for our
existing technology and from the operation of our business.
If
any of our products injure a user, we could be subject to product liability
exposure in excess of amounts for which we are insured, which could have a
material adverse effect on our business, financial condition, results of
operations and future prospects.
Our
LidoSite product or any other drug delivery system we may develop or manufacture
in the future may result in injuries to persons using those products as a result
of mislabeling, misuse or product failure. While we carry product liability
insurance with respect to the now-completed clinical trials and for the
commercial sale of our LidoSite product, there can be no assurance that our
coverage will be adequate to protect us against future liability claims.
Furthermore, we cannot assure you that we can afford to maintain the insurance
that we have obtained. Product liability insurance is expensive and there can
be
no assurance that this insurance will be available to us in the future for
the
commercial sale of our lidocaine delivery system or for any new products, on
terms satisfactory to us, if at all. A successful product liability claim or
series of claims brought against us in excess of our insurance coverage could
have a material adverse effect on our business, financial condition, results
of
operations and future prospects.
Sales
of a significant number of shares of our common stock, warrants or the exercise
of stock options could depress the market price of our stock.
The
market price of our common stock could decline as a result of sales of
substantial amounts of common stock in the public market after this offering
or
the perception that substantial sales could occur. These sales also might make
it difficult for us to sell equity securities in the future at a time when,
and
at a price which, we deem appropriate.
We
sold a
total of 23,000,000 shares of common stock and 11,500,000 warrants in private
placements on October 5, 2006 and November 8, 2006. In addition we
sold a total of 7,053,638 shares of common stock in private placements in
December 2006. We also sold a total of 12,110,667 shares of common
stock in private placements in the first and second quarters of 2007, as well
as
issuing warrants convertible into approximately 1,211,066 shares of common
stock
in connection therewith. We are also obligated to register these
shares for sale. We also sold a total of 9,196,666 shares of common
stock in private placements in the third quarter of 2007, as well as issuing
warrants convertible into approximately 9,196,666 shares of common stock in
connection therewith. We are also obligated to register these shares
for sale.
Although
these 51,360,971 shares were sold in private placements, and we have not
registered the resale of these shares, under the SEC’s Rule 144, 30,053,638 of
those shares will be potentially eligible for resale, subject to compliance
with
Rule 144, on December 31, 2007, and the remainder of those shares will be
potentially eligible for resale by February 2008, under the SEC’s recent
amendments to Rule 144. The eligibility of these shares for resale
could harm the market price of our stock.
As
of
September 30, 2007, we had stock options to purchase 8,895,319 shares of our
common stock outstanding, of which options to purchase 1,624,749 shares were
exercisable. Also outstanding as of the same date were warrants exercisable
for
57,973,835 shares of common stock. Exercise of any outstanding stock options
or
warrants could harm the market price of our common stock.
We
may be unable to list our Common Stock on the NASDAQ or any other securities
exchange, in which case an investor may find it difficult to dispose of shares
or obtain accurate quotations as to the market value of our Common
Stock.
Although
we may apply to list our common stock on NASDAQ or the American Stock Exchange
in the future when and if we have stabilized our liquidity concerns, we may
not
be able to meet the initial listing standards, including the minimum per share
price and minimum capitalization requirements, of either of those or any other
stock exchange, and we may not be able to maintain a listing of our common
stock
on either of those or any other stock exchange. If we are unable to list our
common stock on Nasdaq, the American Stock Exchange or another stock exchange,
or to maintain that listing, we expect that our common stock will continue
to
trade on the OTC Bulletin Board maintained by NASDAQ, or possibly another
over-the-counter quotation system or on the "pink sheets," where an investor
may
find it difficult to dispose of shares or obtain accurate quotations as to
the
market value of our common stock. In addition, we are subject to an SEC “penny
stock” rule that imposes various practice requirements on broker-dealers who
sell securities governed by the rule to persons other than established customers
and accredited investors. Consequently, such rule may deter broker-dealers
from
recommending or selling our common stock, which may adversely affect the
liquidity of our Common Stock. It also makes it more difficult for us to
raise additional capital.
Our
common stock is considered a “penny stock” and may be difficult to
sell.
Our
common stock is considered to be a “penny stock” since it meets one or more of
the definitions in Rule 3a51-1 under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). These include but are not limited to the
following: (i) the stock trades at a price less than $5.00 per share;
(ii) it is not traded on a “recognized” national exchange; (iii) it
is not quoted on the NASDAQ Stock Market, or even if so, has a price less
than $5.00 per share; or (iv) is issued by a company with net tangible
assets less than $2.0 million, if in business more than a continuous
three years, or with average revenues of less than $6.0 million for the
past three years. The principal result or effect of being designated a
“penny stock” is that securities broker-dealers cannot recommend the stock but
must trade in it on an unsolicited basis. Section 15(g) of the
Exchange Act and Rule 15g-2 promulgated thereunder by the SEC require
broker-dealers dealing in penny stocks to provide potential investors with
a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction
in a
penny stock for the investor’s account.
Potential
investors in our common stock are urged to obtain and read such disclosure
carefully before purchasing any shares that are deemed to be “penny
stock.” Moreover, Rule 15g-9 requires broker-dealers in penny stocks
to approve the account of any investor for transactions in such stocks before
selling any penny stock to that investor. This procedure requires the
broker-dealer to (i) obtain from the investor information concerning his or
her financial situation, investment experience and investment objectives;
(ii) reasonably determine, based on that information, that transactions in
penny stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks
of
penny stock transactions; (iii) provide the investor with a written
statement setting forth the basis on which the broker-dealer made the
determination in (ii) above; and (iv) receive a signed and dated copy
of such statement from the investor, confirming that it accurately reflects
the
investor’s financial situation, investment experience and investment
objectives. Compliance with these requirements may make it more difficult
for holders of our common stock to resell their shares to third parties or
to
otherwise dispose of them in the market or otherwise.
Standards
for compliance with Section 404 of the Sarbanes-Oxley Act of 2002 are
uncertain, and if we fail to comply in a timely manner, our business could
be
harmed and our stock price could decline.
Rules
adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of
2002 require annual assessment of our internal control over financial reporting,
and attestation of the assessment by our independent registered public
accountants. This requirement for management’s assessment of our internal
control over financial reporting will first apply to our annual report for
fiscal 2007 and the requirement for our auditor’s attestation will first apply
to our annual report for fiscal 2008. The standards that must be met for
management to assess the internal control over financial reporting as effective
are new and complex, and require significant documentation, testing and possible
remediation to meet the detailed standards. We may encounter problems or
delays in completing activities necessary to make an assessment of our internal
control over financial reporting. In addition, the attestation process by
our independent registered public accountants is new and we may encounter
problems or delays in completing the implementation of any requested
improvements and receiving an attestation of the assessment by our independent
registered public accountants. If we cannot assess our internal control
over financial reporting as effective, or our independent registered public
accountants are unable to provide an unqualified attestation report on such
assessment, investor confidence and share value may be negatively
impacted. We expect to incur additional accounting related expenses
associated with compliance with Section 404.
We
may not be able to attract the attention of brokerage firms, which could have
a
material adverse impact on the market value of our Common Stock.
Security
analysts of brokerage firms have not provided, and may not provide in the
future, coverage of our common stock since there is limited incentive to
brokerage firms to produce research reports and recommend the purchase of our
common stock. To date, we have not been able to attract the attention of
brokerage firms and securities analysts. The absence of such attention limits
the likelihood that an active market will develop for our common stock. It
also
will likely make it more difficult to attract new investors at times when we
require additional capital.
Some
of the statements contained or
incorporated by reference in this prospectus or in the prospectus supplement
may
include forward-looking statements that reflect our current views with respect
to our research and development activities, business strategy, business plan,
financial performance and other future events. These statements include
forward-looking statements both with respect to us, specifically, and the
biotechnology sector, in general. We make these statements pursuant to the
safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Statements that include the words “expect,” “intend,” “plan,” “believe,”
“project,” “estimate,” “may,” “should,” “anticipate,” “will” and similar
statements of a future or forward-looking nature identify forward-looking
statements for purposes of the federal securities laws or
otherwise.
All
forward-looking statements involve
inherent risks and uncertainties, and there are or will be important factors
that could cause actual results to differ materially from those indicated in
these statements. We believe that these factors include, but are not limited
to,
those factors set forth under the caption “Risk Factors” in this prospectus and
in any prospectus supplement and under the captions “Business,” “Legal
Proceedings,” “Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” “Quantitative and Qualitative Disclosures About Market
Risk” and “Controls and Procedures” in our most recent Annual Report on Form
10-KSB and our most recent Quarterly Reports on Form 10-QSB, all of which you
should review carefully. Please consider our forward-looking statements in
light
of those risks as you read this prospectus and the prospectus supplement. We
undertake no obligation to publicly update or review any forward-looking
statement, whether as a result of new information, future developments or
otherwise.
If
one or more of these or other risks
or uncertainties materializes, or if our underlying assumptions prove to be
incorrect, actual results may vary materially from what we anticipate. All
subsequent written and oral forward-looking statements attributable to us or
individuals acting on our behalf are expressly qualified in their entirety
by
this Note. Before purchasing any shares or warrants, you should consider
carefully all of the factors set forth or referred to in this prospectus and
in
the prospectus supplement that could cause actual results to
differ.
THE
SECURITIES WE MAY OFFER
We
may
offer our common shares and/or warrants to purchase common shares, with a
total
value of up to $50,000,000, from time to time under this prospectus at prices
and on terms to be determined by market conditions at the time of offering.
This
prospectus provides you with a general description of the securities we may
offer. Each time we offer a type or series of securities, we will provide
a
prospectus supplement that will describe the specific amounts, prices and
other
important terms of the securities, including, to the extent
applicable:
|
|
•
|
|
designation
or classification;
|
|
|
•
|
|
aggregate
principal amount or aggregate offering
price;
|
|
|
•
|
|
maturity,
if applicable;
|
|
|
•
|
|
voting
or other rights, if any;
|
|
|
•
|
|
exercise
prices, if any; and
|
|
|
•
|
|
important
federal income tax considerations.
|
The
prospectus supplement also may add, update or change information contained
in
this prospectus or in documents we have incorporated by reference. However,
no
prospectus supplement shall offer a security that is not registered and
described in this prospectus at the time of its effectiveness. The
prospectus supplement shall also include specimen forms of the shares of
Common
Stock and warrants being offered thereby.
This
Prospectus may not be used to consummate a sale of securities unless it is
accompanied by a Prospectus Supplement.
We
may
sell the securities directly to or through agents, underwriters or dealers.
We,
and our agents or underwriters, reserve the right to accept or reject all
or
part of any proposed purchase of securities. If we do offer securities through
agents or underwriters, we will include in the applicable prospectus
supplement:
|
|
•
|
|
the
names of those agents or
underwriters;
|
|
|
•
|
|
applicable
fees, discounts and commissions to be paid to
them;
|
|
|
•
|
|
details
regarding over-allotment options, if any;
and
|
|
|
•
|
|
the
net proceeds to us.
|
Common
Shares.
We may issue common shares from time to time. Holders of common shares
are entitled to one vote per share on all matters submitted to a vote of
shareholders. Subject to the rights of any series of preferred stock issued
from
time to time, all actions submitted to a vote of shareholders shall be voted
on
by the holders of common shares, voting together as a single class, except
as
provided by law.
Warrants.
We may issue warrants for the purchase of common shares. We may issue
warrants independently or together with common shares, and the warrants may
be
attached to or separate from these securities.
The
warrants will be evidenced by warrant certificates. In this prospectus, we
have
summarized certain general features of the warrants. We will incorporate
by
reference into the registration statement of which this prospectus is a part
the
form of warrant agreement, including a form of warrant certificate, that
describes the terms of the series of warrants we are offering before the
issuance of the related series of warrants. We urge you to read the prospectus
supplements related to the series of warrants being offered, as well as the
complete warrant agreements and warrant certificates that contain the terms
of
the applicable series of warrants.
USE
OF PROCEEDS
Unless
we indicate otherwise in the
prospectus supplement, we expect to use the net proceeds we receive from the
sale of our common stock and warrants to augment our working capital and for
general corporate purposes, including, but not limited to, product development
activities, including research and development activities surrounding our
potential migraine, NSAID and peptide products, capital expenditures, potential
acquisitions and other business opportunities. We may set forth in the
prospectus supplement additional information on our intended use for the net
proceeds received from the sale of any common stock and warrants sold pursuant
to that prospectus supplement.
We
may sell the shares of our common
stock and/or warrants being offered hereby in one or more of the following
ways
from time to time:
|
|
·
|
through
agents to the public or to
investors;
|
|
|
·
|
to
one or more underwriters for
resale to the public or to
investors;
|
|
|
·
|
in
“at
the market” offerings,
within the meaning of Rule 415(a)(4) of the Securities Act of 1933,
as amended, or the Securities Act, to or through a market maker or
into an
existing trading market, on an exchange or
otherwise;
|
|
|
·
|
directly
to investors;
or
|
|
|
·
|
through
a combination of these
methods of sale.
|
We
will set forth in a prospectus
supplement the terms of an offering of shares of our common stock and/or
warrants, including.
|
|
·
|
the
name or names of any agents or
underwriters;
|
|
|
·
|
the
purchase price of the shares
and/or warrants being offered and the proceeds we will receive from
the
sale;
|
|
|
·
|
any
over-allotment options under
which underwriters may purchase additional shares and/or warrants
from
us;
|
|
|
·
|
any
agency fees or underwriting
discounts and other items constituting agents’ or underwriters’
compensation;
|
|
|
·
|
the
public offering price;
and
|
|
|
·
|
any
discounts or concessions
allowed or reallowed or paid to
dealers.
|
We
may distribute the common stock
and/or warrants from time to time in one or more transactions;
|
|
·
|
at
a fixed price or prices, which
may be changed;
|
|
|
·
|
at
market prices prevailing at the
time of sale;
|
|
|
·
|
at
prices related to such
prevailing market prices; or
|
We
may also, from time to time,
authorize dealers, acting as our agents, to offer and sell common stock and/or
warrants upon the terms and conditions set forth in the applicable prospectus
supplement. We, or the purchasers of common stock and/or warrants for whom
the
underwriters may act as agents, may compensate underwriters in the form of
underwriting discounts or commissions, in connection with the sale of common
stock and/or warrants. Underwriters may sell the common stock and/or warrants
to
or through dealers, and those dealers may receive compensation in the form
of
discounts, concessions or commissions from the underwriters or commissions
from
the purchasers for whom they may act as agent. Unless otherwise indicated in
a
prospectus supplement, an agent will be acting on a “best efforts” basis and a
dealer will purchase common stock and/or warrants as a principal, and may then
resell the common stock and/or warrants at varying prices to be determined
by
the dealer.
We
will describe in the applicable
prospectus supplement any compensation we will pay to underwriters or agents
in
connection with the offering of common stock and/or warrants, and any discounts,
concessions or commissions allowed by underwriters to participating dealers.
The
dealers and agents participating in the distribution of common stock and/or
warrants may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of the common stock
and/or warrants may be deemed to be underwriting discounts and commissions.
We
may enter into agreements to indemnify underwriters, dealers and agents against
certain civil liabilities, including liabilities under the Securities Act and
to
reimburse these persons for certain expenses. We may grant underwriters who
participate in the distribution of common stock and/or warrants we are offering
under this prospectus an option to purchase additional shares and/or warrants
to
cover over-allotments, if any, in connection with the distribution.
To
facilitate the offering of common
stock and/or warrants, certain persons participating in the offering may engage
in transactions that stabilize, maintain, or otherwise affect the price of
the
common stock and/or warrants. This may include over-allotments or short sales
of
the common stock and/or warrants, which involve the sale by persons
participating in the offering of more common stock and/or warrants than we
sold to them. In these circumstances, these persons would cover such
over-allotments or short positions by making purchases in the open market or
by
exercising their over-allotment option, if any. In addition, these persons
may
stabilize or maintain the price of the common stock and/or warrants by bidding
for or purchasing common stock and/or warrants in the open market or by imposing
penalty bids, whereby selling concessions allowed to dealers participating
in
the offering may be reclaimed if common stock and/or warrants sold by them
is
repurchased in connection with stabilization transactions. The effect of these
transactions may be to stabilize or maintain the market price of the common
stock and/or warrants at a level above that which might otherwise prevail in
the
open market. These transactions may be discontinued at any time.
Certain
underwriters, dealers or agents
and their associates may engage in transactions with and perform services for
us
in the ordinary course of our business.
Under no circumstances will the fee, commission or discount received by a
placement agent or any other FINRA member or independent broker-dealer exceed
eight percent of the gross proceeds to us in this offering or any other offering
in the United States pursuant to the base prospectus.
The agent’s compensation warrants, if any, will be substantially on
the same terms as the warrants offered under any prospectus supplement, except
that the compensation warrants will comply with FINRA Rule 2710(g)(1) in
that
for a period of six months after the issuance date of the compensation warrants
(which shall not be earlier than the closing date of the offering pursuant
to
which the compensation warrants are being issued), neither the compensation
warrants nor any warrant shares issued upon exercise of the compensation
warrants shall be sold, transferred, assigned, pledged, or hypothecated,
or be
the subject of any hedging, short sale, derivative, put, or call transaction
that would result in the effective economic disposition of the securities
by any
person for a period of 180 days immediately following the date of effectiveness
or commencement of sales of the offering pursuant to which the compensation
warrants are being issued, except as otherwise permitted by FINRA Rule
2710(g)(2).
The
following statements with respect to our share capital are subject to the
detailed provisions of our articles of incorporation and bylaws. These
statements do not purport to be complete and, while we believe the descriptions
of the material provisions of the memorandum of continuance and bye-laws
incorporated by reference are accurate statements with respect to such material
provisions, such statements are subject to the detailed provisions in the
articles of incorporation and bylaws, to which reference is hereby made for
a
full description of such provisions.
Common
Shares
General
Our
memorandum of continuance and bye-laws provide that our authorized common
share
capital is limited to 500,000,000 common shares, par value U.S.$.001 per
share.
As of December 26, 2007, there were 88,857,897 common shares issued and
outstanding.
Voting
The
holders of common shares are entitled to one vote per share. Subject to the
rights of any series of preferred stock issued from time to time, all actions
submitted to a vote of shareholders shall be voted on by the holders of common
shares, voting together as a single class and any other shares having general
voting rights, (if any), except as provided by law.
Dividends
Holders
of common shares are entitled to participate, on a share for share basis,
with
the holders of any other common shares issued and outstanding, with respect
to
any dividends declared by our board of directors, subject to the rights of
holders of preferred stock. Dividends will generally be payable in U.S. dollars.
We have not paid cash dividends on the common shares. We currently do not
intend
to pay dividends and intend to retain any of our earnings for use in our
business and the financing of our capital requirements for the foreseeable
future. The payment of any future cash dividends on the common shares is
necessarily dependent upon our earnings and financial needs, along with
applicable legal and contractual restrictions.
Liquidation
Upon
our
liquidation, holders of our common shares will be entitled to receive any
assets
remaining after the payment of our debts and the expenses of the liquidation,
subject to such special rights as may be attached to any other class of
shares.
Redemption
The
common shares are not subject to redemption either by us or the holders
thereof.
Variation
of Rights
Under
our
bye-laws, if at any time our share capital is divided into different classes
of
shares, the rights attached to any class (unless otherwise provided by the
terms
of the issue of the shares of that class) may be varied with the consent
in
writing of the holders of a majority of the issued shares of that class or
with
the sanction of a resolution passed by the holders of a majority of such
shares
at a separate general meeting.
DESCRIPTION
OF WARRANTS
The
following description, together with the additional information we may include
in any applicable prospectus supplements, summarizes the material terms and
provisions of the warrants that we may offer under this prospectus and the
related warrant agreements and warrant certificates. While the terms summarized
below will apply generally to any warrants that we may offer, we will describe
the particular terms of any series of warrants in more detail in the applicable
prospectus supplement. If we indicate in the prospectus supplement, the terms
of
any warrants offered under that prospectus supplement may differ from the
terms
described below. However, no prospectus supplement shall fundamentally change
the terms that are set forth in this prospectus or offer a security that
is not
registered and described in this prospectus at the time of its effectiveness.
We
will incorporate by reference into the registration statement of which this
prospectus is a part the form of warrant agreement, including a form of warrant
certificate, that describes the terms of the series of warrants we are offering
before the issuance of the related series of warrants. The following summaries
of material provisions of the warrants and the warrant agreements are subject
to, and qualified in their entirety by reference to, all the provisions of
the
warrant agreement applicable to a particular series of warrants. We urge
you to
read the applicable prospectus supplements related to the warrants that we
sell
under this prospectus, as well as the complete warrant agreements that contain
the terms of the warrants.
Terms
We
will
describe in the applicable prospectus supplement the terms of the series
of
warrants, including:
|
|
•
|
|
the
offering price and aggregate number of warrants
offered;
|
|
|
•
|
|
the
currency for which the warrants may be
purchased;
|
|
|
•
|
|
if
applicable, the designation and terms of the securities with which
the
warrants are issued and the number of warrants issued with each
such
security or with a specified
|
| |
|
|
principal
amount of such security; |
|
|
•
|
|
if
applicable, the date on and after which the warrants and the related
securities will be separately
transferable;
|
|
|
•
|
|
the
number of common shares, as the case may be, purchasable upon the
exercise
of one warrant and the price at which these shares may be purchased
upon
such exercise;
|
|
|
•
|
|
the
effect of any amalgamation, consolidation, merger, sale or other
disposition of our business on the warrant agreements and the
warrants;
|
|
|
•
|
|
the
terms of any rights to redeem or call the
warrants;
|
|
|
•
|
|
any
provisions for changes to or adjustments in the exercise price
or number
of securities issuable upon exercise of the
warrants;
|
|
|
•
|
|
the
dates on which the right to exercise the warrants will commence
and
expire;
|
|
|
•
|
|
the
manner in which the warrant agreements and warrants may be
modified;
|
|
|
•
|
|
U.S.
federal income tax consequences of holding or exercising the warrants;
and
|
|
|
•
|
|
any
other specific terms, preferences, rights or limitations of or
restrictions on the warrants.
|
Before
exercising their warrants, holders of warrants will not have any of the rights
of holders of the securities purchasable upon such exercise.
Exercise
of Warrants
Each
warrant will entitle the holder to purchase the securities that we specify
in
the applicable prospectus supplement at the exercise price that we describe
in
the applicable prospectus supplement. Unless we otherwise specify in the
applicable prospectus supplement, holders of the warrants may exercise the
warrants at any time up to 5:00 P.M. New York time on the expiration date
that
we set forth in the applicable prospectus supplement. After the close of
business on the expiration date, unexercised warrants will become
void.
Holders
of the warrants may exercise the warrants by delivering the warrant certificate
representing the warrants to be exercised together with specified information,
and paying the required amount to the warrant agent in immediately available
funds, as provided in the applicable prospectus supplement. We will set forth
on
the reverse side of the warrant certificate and in the applicable prospectus
supplement the information that the holder of the warrant will be required
to
deliver to the warrant agent.
Upon
receipt of the required payment and the warrant certificate properly completed
and duly executed at the corporate trust office of the warrant agent or any
other office indicated in the applicable prospectus supplement, we will issue
and deliver the securities purchasable upon such exercise. If fewer than
all of
the warrants represented by the warrant certificate are exercised, then we
will
issue a new warrant certificate for the remaining amount of warrants. If
we so
indicate in the applicable prospectus supplement, holders of the warrants
may
surrender securities or rights to purchase securities as all or part of the
exercise price for warrants.
Enforceability
of Rights by Holders of Warrants
Each
warrant agent will act solely as our agent under the applicable warrant
agreement and will not assume any obligation or relationship of agency or
trust
with any holder of any warrant. A single bank or trust company may act as
warrant agent for more than one issue of warrants. A warrant agent will have
no
duty or responsibility in case of any default by us under the applicable
warrant
agreement or warrant, including any duty or responsibility to initiate any
proceedings at law or otherwise, or to make any demand upon us. Any holder
of a
warrant may, without the consent of the related warrant agent or the holder
of
any other warrant, enforce by appropriate legal action its right to exercise,
and receive the securities purchasable upon exercise of, its
warrants.
Outstanding
Warrants
A
description of our outstanding warrants is set forth in the periodic reports
filed by us with the Securities and Exchange Commission, as incorporated
herein
by reference.
We
are subject to the informational
requirements of the Securities Exchange Act of 1934, or Exchange Act, and are
required to file annual, quarterly and other reports, proxy statements and
other
information with the SEC. You may inspect and copy these reports, proxy
statements and other information at the public reference facilities maintained
by the SEC in Washington, D.C. (100 F Street NE, Room 1580, Washington,
D.C. 20549). Copies of such materials can be obtained from the SEC’s public
reference section at prescribed rates. You may obtain information on the
operation of the public reference rooms by calling the SEC at
(800) SEC-0330 or on the SEC website located at http://www.sec.gov.
Our
common stock is traded on the Over
the Counter Bulletin Board under the symbol “VYHN”.
Information
about us is also available
at our website at www.vyteris.com; however, the information on our website
is
not a part of this prospectus.
INCORPORATION
OF INFORMATION FILED
WITH THE SEC
The
SEC allows us to incorporate in
this prospectus “by reference” information contained in documents that we file
with the SEC, which means that we can disclose important information to you
by
referring you to those other documents. The information incorporated by
reference is an important part of this prospectus, and documents that we file
with the SEC after the date of this prospectus will automatically update and,
where applicable, modify or supersede any information set forth or incorporated
by reference in this prospectus.
We
incorporate by reference in this
prospectus the documents listed below:
|
|
·
|
Our
Annual Report on Form 10-KSB
for the year ended December 31,
2006.
|
|
|
·
|
Our
Quarterly Reports on Form
10-QSB for the quarters ended March 31, 2007, June 30, 2007 and
September 30, 2007, respectively.
|
|
|
·
|
Our
Current Reports on Form 8-K
filed with the SEC
on
February 22, 2007 (2), March 1, 2007, March 21, 2007, June 6, 2007,
June
11, 2007, June 19, 2007, July 20, 2007, July 31, 2007, September
27, 2007
and November 13, 2007;
|
|
|
·
|
Any
document that we file with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this prospectus and before the termination of this
offering (other than any portion of such documents that are not deemed
“filed” under the Exchange Act in accordance with the Exchange Act and
applicable SEC rules). Information in these subsequent SEC filings
will be
deemed to be incorporated by reference as of the date we make the
filing.
|
You
may obtain a copy of the foregoing
documents from us at no cost by writing or calling us at the following address
and telephone number: Vyteris, Inc., 13-01 Pollitt Drive, Fair Lawn, NJ 07410
(201) 703-2299, attn: Anthony Cherichella, Chief Financial
Officer.
The validity of the common shares being offered hereby has been passed upon
for
us by Hale Lane Peek Dennison and Howard, 5441 Kietzke Lane, Second Floor,
Reno,
Nevada 89511. The validity of the warrants being offered hereby has
been passed upon for us by Jolie Kahn, Esq., 61 Broadway, Suite 2820, New
York,
NY 10006.
A portion of the consolidated financial statements incorporated by reference
in
the Prospectus constituting a part of this Registration Statement have been
audited by Amper, Politziner & Mattia, P.C., an independent registered
public accounting firm to the extent at December 31, 2006 and for the period
ended December 31, 2006 as set forth in their reports incorporated herein by
reference, and are incorporated herein in reliance upon such reports given
upon
the authority of said firm as experts in auditing and
accounting.
The consolidated financial statements of Vyteris Holdings (Nevada), Inc.
appearing in Vyteris Holdings (Nevada), Inc.'s Annual Report (Form 10-KSB)
at
December 31, 2005 and for each of the two years in the period ended December
31,
2005, have been audited by Ernst & Young LLP, independent registered public
accounting firm, as set forth in their report thereon (which contained an
explanatory paragraph describing conditions that raise substantial doubt
about
the Company's ability to continue as a going concern as described in Note
1 to
the consolidated financial statements) included therein, and incorporated
herein
by reference. Such consolidated financial statements are incorporated
herein by reference in reliance on such report given the authority of such
firm
as experts in accounting and auditing.
PART
II
INFORMATION
NOT REQUIRED IN
PROSPECTUS
ITEM
14. OTHER EXPENSES OF ISSUANCE
AND DISTRIBUTION
We
estimate that the expenses incurred
in connection with the distribution described in this registration statement
will be as set forth below. We will bear all of such expenses. The selling
shareholders will bear any commissions and discounts attributable to sales
of
the shares being registered hereunder.
|
SEC
registration fee
|
|
$ |
5,350 |
|
|
Accounting
fees and expenses
|
|
$ |
30,000 |
|
|
Legal
fees and expenses
|
|
$ |
10,000 |
|
|
Miscellaneous
|
|
$ |
2,500 |
|
| |
|
|
|
|
|
Total
|
|
$ |
47,850 |
|
ITEM
15. INDEMNIFICATION OF DIRECTORS
AND OFFICERS
The
Nevada Corporation Code grants to
Vyteris the power to indemnify the officers and directors of Vyteris, under
certain circumstances and subject to certain conditions and limitations as
stated therein, against all expenses and liabilities incurred by or imposed
upon
them as a result of suits brought against them as such officers and directors
if
they act in good faith and in a manner they reasonably believe to be in or
not
opposed to the best interests of Vyteris and, with respect to any criminal
action or proceeding, have no reasonable cause to believe their conduct was
unlawful.
Article
IX of the Vyteris articles of
incorporation provides as follows:
"To
the fullest extent allowed by law,
the directors and executive officers of the Corporation shall be entitled to
indemnification from the Corporation for acts and omissions taking place in
connection with their activities in such capacities."
Under
Nevada law, a director or officer
is not individually liable to the corporation or its stockholders or creditors
for any damages as a result of any act or failure to act in his capacity as
a
director or officer unless it is proven that his or her act or failure to act
constituted a breach of fiduciary duty as a director or officer and his or
her
breach of those duties involved intentional misconduct, fraud or a knowing
violation of law. One of the amendments to the articles of incorporation adopted
by Vyteris' stockholders confirms that, in the event that Nevada law were no
longer automatically applied to all Nevada corporations, then, to the maximum
extent permitted under Nevada law, no director or officer of Vyteris would
be
personally liable to the corporation or its stockholders for damages as a result
of any act or failure to act in his or her capacity as a director or
officer.
The
registration rights agreement
entered into by Vyteris immediately after the consummation of the
Vyteris/Vyteris Merger contains provisions pursuant to which each selling
stockholder severally agrees to indemnify Vyteris, any person controlling
Vyteris within the meaning of Section 15 of the Securities Act of 1933, or
Section 20 of the Securities Exchange Act of 1934, each of Vyteris' directors,
and each officer of Vyteris who signs this registration statement with respect
to information relating to such selling stockholder furnished in writing to
Vyteris by or on behalf of such selling stockholder specifically for inclusion
in this registration statement.
We
also maintain directors' and
officers' liability insurance to cover such individuals.
Insofar
as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of Vyteris pursuant to the foregoing
provisions, or otherwise, Vyteris 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.
ITEM
16. EXHIBITS
The
exhibits listed in the accompanying
Exhibit Index are filed or incorporated by reference as part of this
registration statement.
ITEM
17.
UNDERTAKINGS
The
undersigned registrant hereby
undertakes:
|
(1)
|
To
file, during any period in which offers or sales are being made,
a
post-effective amendment to this registration statement:
|
|
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
|
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent
a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease
in the
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the SEC pursuant to
Rule
424(b) if, in the aggregate, the changes in volume and price represent
no
more than 20% change in the maximum aggregate offering price set
forth in
the “Calculation of Registration Fee” table in the effective registration
statement; and
|
|
|
(iii)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration statement;
|
|
|
Provided,
however,
that: paragraphs (1)(i), (1)(ii) and (1)(iii) above do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with
or
furnished to the SEC by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement, or is contained in
a form of
prospectus filed pursuant to Rule 424(b) that is part of the registration
statement.
|
|
(2)
|
That,
for the purpose of determining any liability under the Securities
Act of
1933, each such post-effective amendment shall be deemed to be a
new
registration statement relating to the securities offered therein,
and the
offering of such securities at that time shall be deemed to be the
initial
bona fide
offering thereof.
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any
of the
securities being registered which remain unsold at the termination
of the
offering.
|
|
(4)
|
That,
for the purpose of determining liability under the Securities Act
of 1933
to any purchaser:
|
|
|
(i)
|
If
the registrant is relying on 430B:
|
|
|
(A)
|
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall
be deemed to be part of the registration statement as of the date
the
filed prospectus was deemed part of and included in the registration
statement; and
|
|
|
(B)
|
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5),
or (b)(7) as part of a registration statement in reliance on
Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i),
(vii), or (x) for the purpose of providing the information required
by Section 10(a) of the Securities Act of 1933 shall be deemed to
be part
of and included in the registration statement as of the earlier of
the
date such form of prospectus is first used after effectiveness or
the date
of the first contract of sale of securities in the offering described
in
the prospectus. As provided in Rule 430B, for liability purposes of
the issuer and any person that is at that date an underwriter, such
date
shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which
that
prospectus relates, and the offering of such securities at that time
shall
be deemed to be the initial bona fide offering
thereof. Provided,
however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in
a
document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale
prior to
such effective date, supersede or modify any statement that was made
in
the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such
effective
date.
|
Or
|
|
(ii)
|
If
the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating
to an
offering, other than registration statements relying on Rule 430B or
other than prospectuses filed in reliance on Rule 430A, shall be
deemed to be part of and included in the registration statement as
of the
date it is first used after effectiveness. Provided, however, that
no statement made in a registration statement or prospectus that
is part
of the registration statement or made in a document incorporated
or deemed
incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser
with a
time of contract of sale prior to such first use, supersede or modify
any
statement that was made in the registration statement or prospectus
that
was part of the registration statement or made in any such document
immediately prior to such date of first use.
|
|
(5)
|
That,
for the purpose of determining liability of the registrant under
the
Securities Act of 1933 to any purchaser in the initial distribution
of the
securities, the undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to
this
registration statement, regardless of the underwriting method used
to sell
the securities to the purchaser, if the securities are offered or
sold to
such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will
be
considered to offer or sell such securities to such purchaser:
|
|
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424;
|
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on
behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
|
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant
or its
securities provided by or on behalf of the undersigned registrant;
and
|
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
|
|
(6)
|
That,
for purposes of determining any liability under the Securities Act
of
1933, each filing of the registrant’s annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan’s annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is
incorporated by reference in the registration statement shall be
deemed to
be a new registration statement relating to the securities offered
therein, and the offering of the securities at that time shall be
deemed
to be the initial bona
fide offering thereof.
|
|
(7)
|
Insofar
as indemnification for liabilities arising under the Securities Act
of
1933 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 SEC such
indemnification is against public policy as expressed in the Securities
Act of 1933 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 Exchange Act and will
be
governed by the final adjudication of such issue.
|
|
(8)
|
That,
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.
|
|
(9)
|
That,
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.
|
SIGNATURES
Pursuant
to the requirements of the
Securities Act of 1933, the registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-3 and
has
duly caused this Amendment No. 1 to Registration Statement on Form S-3 to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Fair Lawn, State of New Jersey, on December 28, 2007.
|
|
|
|
|
|
|
|
VYTERIS,
INC.
|
|
|
|
By:
|
/s/
TIMOTHY J. MCINTYRE
|
|
|
|
|
Timothy
J. McIntyre
|
|
|
|
|
President
and Chief Executive Officer
|
|
|
|
POWER
OF ATTORNEY
KNOW
ALL PERSONS BY THESE PRESENTS,
that each person whose signature appears below constitutes and appoints Timothy
J. McIntyre his true and lawful attorney-in-fact and agent, with full power
of
substitution, for him in any and all capacities, to sign this Registration
Statement and any amendments hereto, and to file the same, with exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as he might do or could do
in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on
the
dates indicated.
| |
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
| |
|
|
|
|
|
/s/
TIMOTHY J. MCINTYRE
Timothy
J. McIntyre
|
|
President
and Chief Executive
Officer
and Director
|
|
December
28, 2007
|
| |
|
|
|
|
|
/s/
ANTHONY CHERICHELLA
Anthony
Cherichella
|
|
Chief
Financial Officer
(principal
financial and
accounting
officer)
|
|
December
28, 2007
|
| |
|
|
|
|
|
/s/
DONALD F. FARLEY
Donald
F. Farley
|
|
Director
|
|
December
28, 2007
|
| |
|
|
|
|
|
/s/
DAVID DIGIACINTO
David
DiGiacinto
|
|
Director
|
|
December
28, 2007
|
| |
|
|
|
|
|
/s/
RUSSELL O. POTTS, PHD
Russell
O. Potts, PhD
|
|
Director
|
|
December
28, 2007
|
| |
|
|
|
|
|
/s/
ARTHUR COURBANOU
Arthur
Courbanou
|
|
Director
|
|
December
28, 2007
|
EXHIBIT
INDEX
The
following exhibits are filed
herewith or incorporated by reference as a part of this Registration
Statement:
|
|
|
|
Exhibit
|
|
|
Number
|
Description
|
| |
|
|
5.1
|
Opinion
of Hale Lane Peek Dennison and Howard, is incorporated by reference
to
Exhibit 5.1 to the Registrant's Registration Statement on Form S-3
filed
with the Commission on December 26, 2007
|
| |
|
|
5.2
|
Opinion
of Jolie Kahn, Esq.
|
| |
|
|
23.1
|
Consent
of Hale Lane Peek Dennison and Howard (included in Exhibit 5.1),
is
incorporated by reference to Exhibit 5.1 to the Registrant's Registration
Statement on Form S-3 filed with the Commission on December 26,
2007
|
| |
|
|
23.2
|
Consent
of Amper, Politziner & Mattia
|
| |
|
|
23.3
|
Consent
of Ernst & Young LLP
|
| |
|
|
23.4
|
Consent
of Jolie Kahn, Esq. (included in Exhibit 5.2)
|
| |
|
|
24.1
|
Power
of Attorney (included within "Signatures"
section)
|
30