Unassociated Document
Filed
Pursuant to Rule 424(b)(3)
Registration
No. 333-146416
PROSPECTUS
342,432,734
shares
Acura
Pharmaceuticals, Inc.
Common
Stock
This
prospectus relates to the offer and sale of 342,432,734 shares of our common
stock which may be disposed of from time to time by the selling stockholders
named in the “Selling Stockholders” section of this prospectus, or their
transferees, pledgees, donees or successors-in-interest. Of the shares offered
by this prospectus, such shares include 20,515,617 shares of common stock
issuable upon exercise of warrants. The shares were initially sold, and the
warrants were initially issued, in private placement transactions.
The
prices at which the selling stockholders may sell the shares will be determined
by the selling stockholders or their transferees. While we will receive cash
if
and when the warrants are exercised for cash (but not in a cashless exercise),
we will not receive any proceeds from the disposition of the shares of common
stock covered hereby.
We
will
pay the expenses related to the registration of the shares covered by this
prospectus. The selling stockholders will pay commissions and selling expenses,
if any, incurred by them.
Our
common stock is traded on the Over-the-Counter Bulletin Board under the symbol
“ACUR.OB.” On November 12, 2007, the last reported sale price of our common
stock on the Over-the-Counter Bulletin Board was $1.12 per share.
Our
principal executive offices are located at 616 N. North Court, Palatine,
Illinois 60067, and our telephone number is (847) 705-7709.
Investing
in our securities involves risks. See “Risk Factors” beginning on page 3 of
this prospectus.
NEITHER THE
SECURITIES AND
EXCHANGE
COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED</f
ont> OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The
date of this prospectus is November 20, 2007.
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Information
Contained in This Prospectus
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Special
Note Regarding Forward Looking Statements
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Risk
Factors
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3 |
About
Acura Pharmaceuticals, Inc.
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12 |
Use
of Proceeds
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15 |
Selling
Stockholders
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Plan
of Distribution
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19 |
Legal
Matters
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20 |
Experts
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Incorporation
Of Certain Information By Reference
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Where
You Can Find More Information
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You
should rely only on the information provided or incorporated by reference in
this prospectus or any prospectus supplement. Neither we nor the selling
stockholders have authorized anyone to provide you with additional or different
information. The selling stockholders are not making an offer of these
securities in any jurisdiction where the offer is not permitted. You should
assume that the information in this prospectus and any prospectus supplement
is
accurate only as of the date on the front of the document and that information
incorporated by reference in this prospectus or any prospectus supplement is
accurate only as of the date of the document incorporated by reference. In
this
prospectus and any prospectus supplement, unless otherwise indicated, “Acura,”
“we,” “us” and “our” refer to Acura Pharmaceuticals, Inc. and its subsidiary,
and do not refer to the selling stockholders. When we refer to “you” or “yours,”
we mean the persons to whom offers are made hereunder. Aversion® and Acura®
Pharmaceuticals are registered trademarks in the United States.
We
refer
to the U.S. Food and Drug Administration as the FDA.
We
have
made forward-looking statements in this prospectus and in documents that we
incorporate by reference into this prospectus. These forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause
our actual results, performance or achievements, to be materially different
from
any future results, performance, or achievements expressed or implied by those
forward-looking statements. The most significant of such factors include, but
are not limited to, our ability to successfully close and fulfill our
obligations under the Agreement with King Pharmaceuticals Research and
Development, Inc. (as described below under the caption “About Acura
Pharmaceuticals, Inc. - Recent Developments - King Agreement”), and our ability
to fulfill the FDA’s requirements for approving our product candidates for
commercial distribution in the United States, including, without limitation,
the
adequacy of the results of the laboratory and clinical studies completed to
date
and the results of other laboratory and clinical studies, to support FDA
approval of our product candidates, the adequacy of the development program
for
our product candidates, changes in regulatory requirements, adverse safety
findings relating to our product candidates, the risk that the FDA may not
agree
with our analysis of our clinical studies and may evaluate the results of these
studies by different methods or conclude that the results of the studies are
not
statistically significant, clinically meaningful or that there were human errors
in the conduct or otherwise of the studies, the risk that further studies of
our
product candidates do not support FDA approval or commercially viable product
labeling, and the uncertainties inherent in scientific research, drug
development, clinical trials and the regulatory approval process. Other
important factors that may also affect future results include, but are not
limited to: our ability to attract and retain highly skilled personnel; our
ability to secure and protect our patents, trademarks and proprietary rights;
our ability to avoid infringement of patents, trademarks and other proprietary
rights or trade secrets of third parties; litigation or regulatory action that
could require us to pay significant damages or change the way we conduct our
business; our ability to compete successfully against current and future
competitors; our dependence on third-party suppliers of raw materials; our
ability to secure U.S. Drug Enforcement Administration quotas and source
controlled substances that constitute the active ingredients in our product
candidates in development; difficulties or delays in clinical trials for our
product candidates or in the manufacture of our product candidates; and other
risks and uncertainties detailed in this prospectus. We are at a development
stage and may not ever have any products or technologies that generate revenue.
When used in this prospectus, the words "estimate," "project," "anticipate,"
"expect," "intend," "believe," and similar expressions are intended to identify
forward-looking statements.
An
investment in our common stock involves a high degree of risk. In addition
to
the other information contained in this prospectus and in documents that we
incorporate by reference into this prospectus, you should carefully consider
the
following risks before purchasing our common stock. If any of these risks
occurs, our business, financial condition and operating results could be
materially adversely affected. In that case, the trading price of our common
stock could decline and you could lose all or part of your investment. See
also
“Special Note Regarding Forward-Looking Statements.”
We
Received a "Going Concern" Opinion from Our Registered Independent Public
Accounting Firm, Have a History of Operating Losses and May Not Achieve
Profitability Sufficient to Generate a Positive Return on Shareholders'
Investment
We
incurred net losses of $13.8 million for the nine months ended September 30,
2007 and net losses of $6.0 million, $12.1 million and $70.0 million for
calendar years 2006, 2005 and 2004, respectively. As of September 30, 2007,
our
accumulated deficit was approximately $331.4 million. Our consolidated financial
statements for the calendar years 2006, 2005 and 2004 were prepared on a “going
concern” basis. In its report dated March 13, 2007 regarding those financial
statements, our registered independent public accounting firm expressed
substantial doubt about our ability to continue as a going concern as a result
of recurring losses, net capital deficiency and negative cash flows. Our future
profitability will depend on several factors, including: (i) the Company’s
ability to successfully close and fulfill its obligations under the Agreement
with King Pharmaceuticals Research and Development, Inc. (“King”) as more fully
described below under the caption “About Acura Pharmaceuticals, Inc. - Recent
Developments - King Agreement”, and (ii) the successful commercialization by
King and other future licensees (if any) of products incorporating our Aversion®
Technology without infringing the patents and other intellectual property rights
of third parties. We cannot assure you that we will ever have a product approved
for commercialization by the FDA or that we or our licensees will bring any
product to market.
We
Require Additional Funding
As
of
November 1, 2007, we had cash and cash equivalents of approximately $11.3
million, which included the proceeds from an additional Bridge Loan funded
in
July 2007 and the net proceeds from our private unit offering. We estimate
that
such cash reserves will fund operations through September 2008. To fund further
operations and product development activities beyond September 2008, we must
raise additional financing, or must successfully close the Agreement with King
described below under the caption “About Acura Pharmaceuticals, Inc. - Recent
Developments - King Agreement” and receive the $30 million up-front
non-refundable cash payment anticipated to be received upon the closing of
such
Agreement. No assurance can be given that the conditions to the closing of
the
Agreement will be satisfied, that we will receive the milestone and royalty
payments provided for in the Agreement, or that we will be successful in
entering into similar agreements with other pharmaceuticals partners to develop
and commercialize products incorporating the Aversion® Technology. In the
absence of our receipt of the upfront milestone payment provided for in the
Agreement, the receipt of payments under similar license agreements anticipated
to be negotiated and executed with other pharmaceutical company partners, or
the
receipt of financing from other sources, we may be required to scale back or
terminate operations and possibly seek protection under applicable bankruptcy
laws.
We
Have No Near Term Sources of Revenue and Must Rely on Current Cash Reserves,
Technology Licensing Fees and Third Party Financing to Fund
Operations
Pending
the closing and effectiveness of the King Agreement or similar license
agreements anticipated to be negotiated and executed with other pharmaceutical
company partners, of which no assurance can be given, we must rely on our
current cash reserves and third-party financing to fund operations and product
development activities. No assurance can be given that current cash reserves
will be sufficient to fund the continued operations and development of our
product candidates until such time as we generate revenue from collaborative
or
licensing agreements. Moreover, no assurance can be given that we will be
successful in raising additional financing or, if funding is obtained, that
such
funding will be sufficient to fund operations until product candidates
incorporating our Aversion® Technology may be commercialized.
We
Are Subject to Restrictions on the Incurrence of Additional Indebtedness, Which
May Adversely Impact the Company's Ability to Fund Operations and Clinical
Trials
Pursuant
to the terms of our outstanding secured term loan agreement we are limited
as to
the type and amount of future indebtedness we may incur. This restriction may
adversely impact our ability to fund the development of our product
candidates.
Our
Product Candidates Are Based on Technology That Could Ultimately Prove
Ineffective
We
are
committing substantially all of our resources and available capital to the
development of Acurox™ (oxycodone HCl and niacin) Tablets. Additional clinical
and non-clinical testing will be required to continue development of Acurox™
Tablets and for the development, preparation and submission of a 505(b)(2)
New
Drug Application (“NDA”) with the FDA. There can be no assurance that Acurox™
Tablets or any other product candidate developed using Aversion® (abuse
deterrent)
Technology will achieve the primary end points in the required clinical studies
or perform as intended in other pre-clinical and clinical studies leading to
commercially viable product candidates, product labeling, or leading to a NDA
submission. If a NDA is submitted to the FDA for Acurox™ Tablets or any other
product candidates, there can be no assurances that the FDA will accept such
submission for filing and subsequently approve such NDA with commercially viable
product labeling or to ultimately approve such product candidates for commercial
distribution. Our failure to successfully develop and achieve final FDA approval
of a product candidate utilizing Aversion® Technology will have a material
adverse effect on our operations and financial condition.
If
Pre-Clinical or Clinical Testing For Our Product Candidates Are Unsuccessful
or
Delayed, We Will Be Unable to Meet Our Anticipated Development and
Commercialization Timelines
To
obtain
FDA approval to commercially market any of our product candidates, we must
submit to the FDA a NDA demonstrating, among other things, that the product
candidate is safe and effective for its intended use. This demonstration
requires significant pre-clinical and clinical testing. As we do not possess
the
resources or employ all the personnel necessary to conduct such testing, we
rely
on contract research organizations ("CROs") for the majority of this testing
with our product candidates. As a result, we have less control over our
development program than if we performed the testing entirely on our own. Third
parties may not perform their responsibilities on our anticipated schedule.
Delays in our development programs could significantly increase our product
development costs and delay product commercialization. In addition, many of
the
factors that may cause, or lead to a delay in the development program, may
also
ultimately lead to denial of regulatory approval of a product
candidate.
The
commencement of clinical trials with our product candidates may be delayed
for
several reasons, including but not limited to delays in demonstrating sufficient
pre-clinical safety required to obtain regulatory approval to commence a
clinical trial, reaching agreements on acceptable terms with prospective
licensees, manufacturing and quality assurance release of a sufficient supply
of
a product candidate for use in our clinical trials and/or obtaining
institutional review board approval to conduct a clinical trial at a prospective
clinical site. Once a clinical trial has begun, it may be delayed, suspended
or
terminated by us or regulatory authorities due to several factors, including
ongoing discussions with regulatory authorities regarding the scope or design
of
our clinical trials, failure to conduct clinical trials in accordance with
regulatory requirements, lower than anticipated recruitment or retention rate
of
patients in clinical trials, inspection of the clinical trial operations or
trial sites by regulatory authorities, the imposition of a clinical hold by
FDA,
lack of adequate funding to continue clinical trials, and/or negative or
unanticipated results of clinical trials.
Clinical
trials required by the FDA for commercial approval, may not demonstrate safety
or efficacy of our product candidates. Success in pre-clinical testing and
early
clinical trials does not ensure that later clinical trials will be successful.
Results of later clinical trials may not replicate the results of prior clinical
trials and pre-clinical testing. Even if the results of our pivotal phase III
clinical trials are positive, we and our licensees may have to commit
substantial time and additional resources to conduct further pre-clinical and
clinical studies before we or our licensees can submit NDAs or obtain regulatory
approval for our product candidates.
Clinical
trials may be expensive and difficult to design and implement, in part because
they are subject to rigorous regulatory requirements. Further, if participating
subjects or patients in clinical studies suffer drug-related adverse reactions
during the course of such trials, or if we, our licensees, if any, or the FDA
believes that participating patients are being exposed to unacceptable health
risks, we or our licensees, if any, may suspend the clinical trials. Failure
can
occur at any stage of the trials, and our licensees, if any, could encounter
problems causing the abandonment of clinical trials or the need to conduct
additional clinical studies, relating to a product candidate.
Even
if
our clinical trials are completed as planned, their results may not support
commercially viable product label claims. The clinical trial process may fail
to
demonstrate that our product candidates are safe and effective for their
intended use. Such failure would cause us or our licensees, if any, to abandon
a
product candidate and may delay the development of other product
candidates.
We
Or Our Licensees May Not Obtain Required FDA Approval; the FDA Approval Process
Is Time-Consuming and Expensive
The
development, testing, manufacturing, marketing and sale of pharmaceutical
products are subject to extensive federal, state and local regulation in the
United States and other countries. Satisfaction of all regulatory requirements
typically takes many years, is dependent upon the type, complexity and novelty
of the product candidate, and requires the expenditure of substantial resources
for research, development and testing. Substantially all of our operations
are
subject to compliance with FDA regulations. Failure to adhere to applicable
FDA
regulations by us or our licensees would have a material adverse effect on
our
operations and financial condition. In addition, in the event we are successful
in developing product candidates for sale in other countries, we would become
subject to regulation in such countries. Such foreign regulations and product
approval requirements are expected to be time consuming and
expensive.
We
or our
licensees may encounter delays or rejections during any stage of the regulatory
approval process based upon the failure of clinical or laboratory data to
demonstrate compliance with, or upon the failure of the product candidates
to
meet, the FDA's requirements for safety, efficacy and quality; and those
requirements may become more stringent due to changes in regulatory agency
policy or the adoption of new regulations. After submission of an NDA, or a
505(b)(2) NDA the FDA may refuse to file the application, deny approval of
the
application, require additional testing or data and/or require post-marketing
testing and surveillance to monitor the safety or efficacy of a product. The
FDA
commonly takes one to two years to grant final approval for a NDA, or 505(b)(2)
NDA. Further, the terms of approval of any NDA including the product labeling
may be more restrictive than we or our licensees desire and could affect the
marketability of products incorporating our Aversion® Technology.
Even
if
we comply with all FDA regulatory requirements we or our licensees may never
obtain regulatory approval for any of our product candidates. If we or our
licensees fail to obtain regulatory approval for any of our product candidates,
we will have fewer saleable products and correspondingly lower revenues. Even
if
regulatory approval of our products is received, such approval may involve
limitations on the indicated uses or promotional claims we or our licensees
may
make for our products.
The
FDA
also has the authority to revoke or suspend approvals of previously approved
products for cause, to debar companies and individuals from participating in
the
drug-approval process, to request recalls of allegedly violative products,
to
seize allegedly violative products, to obtain injunctions to close manufacturing
plants allegedly not operating in conformity with current Good Manufacturing
Practices (cGMP) and to stop shipments of allegedly violative products. As
any
future source of our revenue will be derived from the sale of FDA approved
products, the taking of any such action by the FDA would have a material adverse
effect on our operations and financial condition.
We
Must Maintain FDA Approval to Manufacture
Clinical Supplies of Our Product Candidates at Our Facility; Failure to Maintain
Compliance with FDA Requirements May Prevent or Delay the Manufacture of Our
Product Candidates and Costs of Manufacture May Be Higher Than
Expected
We
have
constructed and installed the equipment necessary to manufacture clinical trial
supplies of our Aversion® (abuse deterrent) Technology
product candidates in tablet formulations at our Culver, Indiana facility.
To be
used in clinical trials, all of our product candidates must be manufactured
in
conformity with current Good Manufacturing Practice (cGMP) regulations as
interpreted and enforced by the FDA. All such product candidates must be
manufactured, packaged, and labeled and stored in accordance with cGMPs.
Modifications, enhancements or changes in manufacturing sites of marketed
products are, in many circumstances, subject to FDA approval, which may be
subject to a lengthy application process or which we may be unable to obtain.
Our Culver, Indiana facility, as well as those of any third-party manufacturers
that we may use, are periodically subject to inspection by the FDA and other
governmental agencies, and operations at these facilities could be interrupted
or halted if such inspections are unsatisfactory. Failure to comply with FDA
or
other governmental regulations can result in fines, unanticipated compliance
expenditures, recall or seizure of products, total or partial suspension of
production or distribution, suspension of FDA review of our product candidates,
termination of ongoing research, disqualification of data for submission to
regulatory authorities, enforcement actions, injunctions and criminal
prosecution. We do not have the facilities, equipment or personnel to
manufacture commercial quantities of our product candidates and therefore must
rely on our licensees or other qualified companies with appropriate facilities
and equipment to contract manufacture commercial quantities of products
utilizing our Aversion Technology.
If
Our Partners Do Not Satisfy Their Obligations, We Will Be Unable to Develop
Our
Partnered Product Candidates
On
October 30, 2007, we entered
into our Agreement with King Pharmaceuticals Research and Development Inc.
("King") (as more fully described under the caption “About Acura
Pharmaceuticals”).
The
closing of the transaction contemplated by the Agreement is subject to receipt
of approval under the Hart-Scott-Rodino Antitrust Improvements Act. The
Company’s future revenue, if any, will be derived from milestone and royalty
payments relating to the Agreement and other milestone and royalty payments,
if
any, derived from agreements anticipated to be potentially negotiated and
executed with other pharmaceutical company partners. No assurance can be given
that the conditions to the closing of the Agreement with King will be satisfied,
that we will receive the milestone and royalty payments provided for in such
Agreement, or that we will be successful in entering into similar agreements
with other pharmaceutical partners to develop and commercialize products
incorporating the Aversion® Technology.
As
part
of such collaborative agreements, we will not have day-to-day control over
the
activities of our licensees with respect to any product candidate. If a
collaborative partner fails to fulfill its obligations under an agreement with
us, we may be unable to assume the development of the product covered by that
agreement or to enter into alternative arrangements with another third-party.
In
addition, we may encounter delays in the commercialization of the product
candidate that is the subject of a collaboration agreement. Accordingly, our
ability to receive any revenue from the product candidates covered by
collaboration agreements will be dependent on the efforts of our collaborative
partner. We could be involved in disputes with a collaborative partner, which
could lead to delays in or termination of, our development and commercialization
programs and result in time consuming and expensive litigation or arbitration.
In addition, any such dispute could diminish our collaborative partners’
commitment to us and reduce the resources they devote to developing and
commercializing our products. If any collaborative partner terminates or
breaches its agreement, or otherwise fails to complete its obligations in a
timely manner, our chances of successfully developing or commercializing our
product candidates would be materially adversely effected. Additionally, due
to
the nature of the market for our product candidates, it may be necessary for
us
to license all or a significant portion of our product candidates to a single
company thereby eliminating our opportunity to commercialize other product
candidates with other collaborative partners.
The
Market May Not Be Receptive to Products Incorporating Our Aversion®
Technology
The
commercial success of products incorporating our Aversion® Technology approved
for marketing by the FDA and other regulatory authorities will depend on
acceptance by health care providers and others that such products are clinically
useful, cost-effective and safe. There can be no assurance given, even if we
or
our licensees succeed in the development of products incorporating our Aversion®
Technology and receive FDA approval for such products, that products
incorporating the Aversion® Technology would be accepted by health care
providers and others. Factors that may materially affect market acceptance
of
products incorporating our Aversion® Technology include but are not limited to:
(i) the relative advantages and disadvantages of our Aversion® Technology
compared to competitive products; (ii) the relative timing to commercial launch
of products utilizing our Aversion® Technology compared to competitive products;
(iii) the relative safety and efficacy of products incorporating our Aversion®
Technology compared to competitive products; and (iv) the willingness of third
party payors to reimburse for or otherwise pay for products incorporating our
Aversion® Technology.
Our
product candidates, if successfully developed and commercially launched, will
compete with both currently marketed and new products marketed by other
companies. Health care providers may not accept or utilize any of our product
candidates. Physicians and other prescribers may not be inclined to prescribe
the products utilizing our Aversion® Technology unless our products bring clear
and demonstrable advantages over other products currently marketed for the
same
indications. If our products do not achieve market acceptance, we may not be
able to generate significant revenues or become profitable.
In
the Event That We or Our Licensees Are Successful in Bringing Any Products
to
Market, Our Revenues May Be Adversely Affected If We Fail to Obtain Acceptable
Prices or Adequate Reimbursement For Our Products From Third-Party
Payors
The
ability of our licensees to successfully commercialize our products may depend
in part on the availability of reimbursement for our products from government
health administration authorities, private health insurers, and other
third-party payors and administrators, including Medicaid and Medicare. We
cannot predict the availability of reimbursement for newly-approved products
incorporating our Aversion® Technology. Third-party payors and administrators,
including state Medicaid programs and Medicare, are challenging the prices
charged for pharmaceutical products. Government and other third-party payors
increasingly are limiting both coverage and the level of reimbursement for
new
drugs. Third-party insurance coverage may not be available to patients for
any
of our products. The continuing efforts of government and third-party payors
to
contain or reduce the costs of health care may limit our commercial opportunity.
If government and other third-party payors do not provide adequate coverage
and
reimbursement for any product incorporating our Aversion® Technology, health
care providers may not prescribe them or patients may ask their health care
providers to prescribe competing products with more favorable reimbursement.
In
some foreign markets, pricing and profitability of pharmaceutical products
are
subject to government control. In the United States, we expect there will be
federal and state proposals for similar controls. In addition, we expect that
increasing emphasis on managed care in the United States will continue to put
pressure on the pricing of pharmaceutical products. Cost control initiatives
could decrease the price that we charge for any products in the future. Further,
cost control initiatives could impair our ability or the ability of our
licensees to commercialize our products and our ability to earn revenues from
this commercialization.
Our
Success Depends on Our Ability to Protect Our Intellectual
Property
Our
success depends in significant part on our ability to obtain patent protection
for our Aversion®
Technology, in the United States and in other countries, and to enforce these
patents. The patent positions of pharmaceutical firms, including us, are
generally uncertain and involve complex legal and factual questions.
Notwithstanding our receipt of U.S. Patent No. 7,201,920 from the USPTO relating
to the Aversion® Technology, there is no assurance that any of our patent
application claims in our other pending non-provisional and provisional patent
applications for our Aversion® Technology will issue or if issued, that any such
patent claims will be valid and enforceable against third-party infringement
or
that our products will not infringe any third-party patent or intellectual
property. Moreover, any patent claims relating to the Aversion® Technology may
not be sufficiently broad to protect the products incorporating the Aversion®
Technology. In addition, issued patent claims may be challenged, invalidated
or
circumvented. Our patent claims may not afford us protection against competitors
with similar technology or permit the commercialization of our products without
infringing third-party patents or other intellectual property
rights.
Our
success also depends on our not infringing patents issued to competitors or
others. We may become aware of patents and patent applications belonging to
competitors and others that could require us to alter our technologies. Such
alterations could be time consuming and costly. We may not be able to obtain
a
license to any technology owned by or licensed to a third party that we or
our
licensees require to manufacture or market one or more products incorporating
our Aversion® Technology. Even if we can obtain a license, the financial and
other terms may be disadvantageous.
Our
success also depends on our maintaining the confidentiality of our trade secrets
and know-how. We seek to protect such information by entering into
confidentiality agreements with employees, potential licensees, raw material
suppliers, potential investors and consultants. These agreements may be breached
by such parties. We may not be able to obtain an adequate, or perhaps, any
remedy to such a breach. In addition, our trade secrets may otherwise become
known or be independently developed by our competitors. Our inability to protect
our intellectual property or to commercialize our products without infringing
third-party patents or other intellectual property rights would have a material
adverse affect on our operations and financial condition.
We
May Become Involved in Patent Litigation or Other Intellectual Property
Proceedings Relating to Our Aversion® Technology or Product Candidates Which
Could Result in Liability for Damages or Delay or Stop Our Development and
Commercialization Efforts
The
pharmaceutical industry has been characterized by significant litigation and
other proceedings regarding patents, patent applications and other intellectual
property rights. The situations in which we may become parties to such
litigation or proceedings may include: (i) litigation or other proceedings
we
may initiate against third parties to enforce our patent rights or other
intellectual property rights; (ii) litigation or other proceedings we may
initiate against third parties to seek to invalidate the patents held by such
third parties or to obtain a judgment that our product candidates do not
infringe such third parties' patents; (iii) if our competitors file patent
applications that claim technology also claimed by us, we may participate in
interference or opposition proceedings to determine the priority of invention;
and (iv) if third parties initiate litigation claiming that our product
candidates infringe their patent or other intellectual property rights, we
will
need to defend against such proceedings. Our failure to avoid infringing
third-party patents and intellectual property rights in the commercialization
of
products utilizing the Aversion® Technology will have a material adverse affect
on our operations and financial condition.
The
costs
of resolving any patent litigation or other intellectual property proceeding,
even if resolved in our favor, could be substantial. Most of our competitors
will be able to sustain the cost of such litigation and proceedings more
effectively than we can because of their substantially greater resources.
Uncertainties resulting from the initiation and continuation of patent
litigation or other intellectual property proceedings could have a material
adverse effect on our ability to compete in the marketplace. Patent litigation
and other intellectual property proceedings may also consume significant
management time.
Our
Aversion® Technology may be found to infringe upon claims of patents owned by
others. If we determine or if we are found to be infringing on a patent held
by
another, we or our licensees might have to seek a license to make, use, and
sell
the patented technologies. In that case, we or our licensees might not be able
to obtain such license on acceptable terms, or at all. The failure to obtain
a
license to any technology that may be required would materially harm our
business, financial condition and results of operations. If a legal action
is
brought against us, we could incur substantial defense costs, and any such
action might not be resolved in our favor. If such a dispute is resolved against
us, we may have to pay the other party large sums of money and our use of our
Aversion® Technology and the testing, manufacturing, marketing or sale of one or
more of our products could be restricted or prohibited. Even prior to resolution
of such a dispute, use of our Aversion® Technology and the testing,
manufacturing, marketing or sale of one or more of our products could be
restricted or prohibited.
Moreover,
other parties could have blocking patent rights to products made using the
Aversion®
Technology. We are aware of certain United States and international pending
patent applications owned by third parties claiming abuse deterrent
technologies, including at least one pending patent application which, if issued
in its present form, may encompass our lead product candidate. If such patent
applications result in issued patents, with claims encompassing our Aversion®
Technology or products, we or our licensees may need to obtain a license to
such
patents, should one be available, or alternatively, alter the Aversion®
Technology so as to avoid infringing such third-party patents. If we or our
licensees are unable to obtain a license on commercially reasonable terms,
we or
our licensees could be restricted or prevented from commercializing products
utilizing the Aversion® Technology. Additionally, any alterations to the
Aversion® Technology in view of pending third-party patent applications could be
time consuming and costly and may not result in technologies or products that
are non-infringing or commercially viable. We cannot assure that our products
and/or actions in developing products incorporating our Aversion® Technology
will not infringe third-party patents.
We
May Be Exposed to Product Liability Claims and May Not Be Able to Obtain
Adequate Product Liability Insurance
Our
business exposes us to potential product liability risks, which are inherent
in
the testing, manufacturing, marketing and sale of pharmaceutical products.
Product liability claims might be made by patients, health care providers
or
pharmaceutical companies or others that sell or consume our products. These
claims may be made even with respect to those products that possess regulatory
approval for commercial sale.
We
are
currently covered by clinical trial product liability insurance on a claims-made
basis. This coverage may not be adequate to cover any product liability claims.
Product liability coverage is expensive. In the future, we may not be able
to
maintain or obtain such product liability insurance at a reasonable cost or
in
sufficient amounts to protect us against losses due to liability claims. Any
claims that are not covered by product liability insurance could have a material
adverse effect on our business, financial condition and results of
operations.
The
pharmaceutical industry is characterized by frequent litigation. Those companies
with significant financial resources will be better able to bring and defend
any
such litigation. No assurance can be given that we would not become involved
in
such litigation. Such litigation may have material adverse consequences to
our
financial condition and results of operations.
We
Face Significant Competition Which May Result in Others Developing or
Commercializing Products Before or More Successfully Than We
Do
The
pharmaceutical industry is highly competitive and is affected by new
technologies, governmental regulations, health care legislation, availability
of
financing, litigation and other factors. If our product candidates receive
FDA
approval, they will compete with a number of existing and future drugs and
therapies developed, manufactured and marketed by others. Existing or future
competing products may provide greater therapeutic convenience, clinical or
other benefits for a specific indication than our products, or may offer
comparable performance at lower costs. If our products are unable to capture
and
maintain market share, we or our licensees will not achieve significant product
revenues and our financial condition and results of operations will be
materially adversely affected.
We
will
compete for market share against fully integrated pharmaceutical companies
or
other companies that collaborate with larger pharmaceutical companies, academic
institutions, government agencies and other public and private research
organizations. Many of these competitors have products already approved,
marketed or in development. In addition, many of these competitors, either
alone
or together with their collaborative partners, operate larger research and
development programs, have substantially greater financial resources, experience
in developing products, obtaining FDA and other regulatory approvals,
formulating and manufacturing drugs, and commercializing drugs than we
do.
We
are
concentrating substantially all of our efforts on developing product candidates
incorporating our Aversion® Technology. The commercial success of products using
our Aversion® Technology will depend, in large part, on the intensity of
competition and the relative timing and sequence of new product approvals from
other companies developing, marketing, selling and distributing products that
compete with the products incorporating our Aversion® Technology. Alternative
technologies and products are being developed to improve or replace the use
of
opioid analgesics. In the event that such alternatives to opioid analgesics
are
widely adopted, then the market for products incorporating our Aversion®
Technology may be substantially decreased subsequently reducing our ability
to
generate future profits.
Key
Personnel Are Critical to Our Business, and Our Success Depends on Our Ability
to Retain Them
We
are
highly dependent on our management and scientific team, including Andrew D.
Reddick, our President and Chief Executive Officer, and Ron J. Spivey, Ph.D.
our
Senior Vice President and Chief Scientific Officer. We may not be able to
attract and retain personnel on acceptable terms given the intense competition
for such personnel among biotechnology, pharmaceutical and healthcare companies,
universities and non-profit research institutions. While we have employment
agreements with certain employees, all of our employees are at-will employees
who may terminate their employment at any time. We do not have key personnel
insurance on any of our officers or employees. The loss of any of our key
personnel, or the inability to attract and retain such personnel, may
significantly delay or prevent the achievement of our product and technology
development and business objectives and could materially adversely affect our
business, financial condition and results of operations.
The
U.S. Drug Enforcement Administration ("DEA") Limits the Availability of the
Active Ingredients Used in Our Product Candidates and, as a Result, Our Quota
May Not Be Sufficient to Complete Clinical Trials or May Result in Development
Delays
The
DEA
regulates certain finished drug products and active pharmaceutical ingredients.
Certain opioid active pharmaceutical ingredients in our current product
candidates are classified by the DEA as Schedule II substances under the
Controlled Substances Act of 1970. Consequently, their manufacture, research,
shipment, storage, sale and use are subject to a high degree of regulation.
Furthermore, the amount of Schedule II substances we can obtain for our clinical
trials is limited by the DEA and our quota may not be sufficient to complete
clinical trials. There is a risk that DEA regulations may interfere with the
supply of the products used in our clinical trials.
The
Market Price of Our Common Stock May Be Volatile
The
market price of our common stock, like the market price for securities of
pharmaceutical, biopharmaceutical and biotechnology companies, has historically
been highly volatile. The stock market from time to time experiences significant
price and volume fluctuations that are unrelated to the operating performance
of
particular companies. Factors, such as fluctuations in our operating results,
future sales of our common stock, announcements of technological innovations
or
new therapeutic products by us or our competitors, announcements regarding
collaborative agreements, laboratory or clinical trial results, government
regulation, developments in patent or other proprietary rights, public concern
as to the safety of drugs developed by us or others, changes in reimbursement
policies, comments made by securities analysts and general market conditions
may
have a significant effect on the market price of our common stock. In the past,
following periods of volatility in the market price of a company's securities,
securities class action litigation has often been instituted. A securities
class
action suit against us could result in substantial costs, potential liabilities
and the diversion of management's attention and resources and result in a
material adverse effect on our financial condition and results of
operations.
Our
Common Stock is Currently Traded on the Over-the-Counter Bulletin Board, and
the
Liquidity of our Stock may be Seriously Limited
Our
common stock is currently traded on the Over-the-Counter Bulletin Board. Trading
on the Over-the Counter Bulletin Board may adversely impact our stock price
and
liquidity, and the ability of our stockholders to purchase and sell our shares
in an orderly manner. As our common stock is not quoted on a stock exchange
and
is not qualified for inclusion on the NASDAQ Capital Market or AMEX market,
our
common stock could be subject to a rule of the Securities and Exchange
Commission that imposes additional sales practice requirements on broker-dealers
who sell such securities to persons other than established customers and
accredited investors. For transactions covered by this rule, the broker-dealer
must make a special suitability determination for the purchaser and have
received the purchaser's written consent for a transaction prior to sale.
Consequently, the rule may affect the ability of broker-dealers to sell our
common stock. There is no guarantee that an active trading market for our common
stock will be maintained on the Over-the-Counter Bulletin
Board.
Our
Quarterly Results of Operations Will Fluctuate, and These Fluctuations Could
Cause Our Stock Price to Decline
Our
quarterly operating results are likely to fluctuate in the future. These
fluctuations could cause our stock price to decline. The nature of our business
involves variable factors, such as the timing of the research, development
and
regulatory submissions of our product candidates that could cause our operating
results to fluctuate.
We
Do Not Anticipate Paying Dividends on Our Common Stock in the Foreseeable
Future
We
have
not declared and paid cash dividends on our common stock in the past, and we
do
not anticipate paying any cash dividends in the foreseeable future. Our senior
term loan indebtedness prohibits the payment of cash dividends.
GCE
Holdings LLC Can Control All Matters
Requiring Approval By Shareholders
GCE
Holdings LLC beneficially owns approximately 78% of the Company's outstanding
common stock as of November 1, 2007 (calculated in accordance with Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended). In addition,
pursuant to the terms of the Amended and Restated Voting Agreement dated
February 6, 2004, as amended, between us and the former holders of our
previously outstanding convertible preferred stock, all such shareholders have
agreed that our Board of Directors shall be comprised of not more than seven
members, four of whom shall be the designees of GCE Holdings LLC. As a result,
GCE Holdings LLC, in view of its ownership percentage of our common stock and
by
virtue of its controlling position on our Board of Directors, will be able
to
control all matters requiring approval by our shareholders, including the
approval or rejection of mergers, sales or licenses of all or substantially
all
of our assets, or other business combination transactions. The interests of
GCE
Holdings LLC may not always coincide with the interests of our other
shareholders and such entity may we take action in advance of its interests
to
the detriment of our other shareholders. Accordingly, you may not be able to
influence any action we take or consider taking, even if it requires a
shareholder holder vote.
Any
Future Sale of a Substantial Number of Shares Eligible for Resale Could Depress
the Trading Price of our Stock, Lower our Value and Make It More Difficult
for
us to Raise Capital
342,432,734
shares (representing approximately 66.5% of our shares outstanding on a
fully-diluted basis - including all derivative securities, whether or not
currently exercisable) are being offered for sale by selling stockholders
hereby, including 313,497,569 shares held by affiliates. An additional 81
million shares of our common stock and common stock underlying stock options,
restricted stock units and warrants, not being offered hereby are held by
affiliates. If some or all shares offered hereby are sold by affiliates and
others or if affiliates sell other shares, it will likely have the effect of
depressing the trading price of our common stock. In addition, such sales could
lower our value and make it more difficult for us to raise capital.
There
Can Be No Assurance That The Total Market Capitalization Of Our Common Stock
(The Aggregate Value Of Our Common Stock At The Then Market Price) After Our
Reverse Stock Split Will Be Equal To Or Greater Than The Total Market
Capitalization Before Our Reverse Stock Split Or That The Per Share Market
Price
Of Our Common Stock Following Our Reverse Stock Split Will Equal Or Exceed
The
Current Per Share Market Price
On
December 14, 2006, our shareholders authorized our Board of Directors, in its
discretion, to effect a reverse stock split of our common stock at one of six
ratios on or prior to December 14, 2007. On October 30, 2007, our Board of
Directors approved an amendment to our Restated Certificate of Incorporation
to
take effect on or about December 5, 2007, subject to compliance with OTC
Bulletin Board requirements, to effect a one for ten reverse stock split of
our
common stock. There can be no assurance that the market price per new share
of
our common stock after the reverse stock split will increase in proportion
to
the reduction in the number of old shares of our common stock outstanding before
the reverse stock split. For example, if the market price of our common stock
on
the OTC Bulletin Board before the effective date of our reverse split was $1.00
per share, and after giving effect to the one for ten reverse split ratio
adopted by our Board, there can be no assurance that the post-split market
price
of our common stock would be $10.00 per share or greater. By decreasing the
number of outstanding shares of common stock without altering the aggregate
economic interest represented by the shares, we believe the market price will
be
proportionally increased. The higher the market price of our common stock rises
above the two dollar minimum bid price requirement for obtaining a listing
on
the American Stock Exchange, if we elect to apply for listing there, or the
four
dollar minimum bid price requirement for obtaining a listing on the Nasdaq
Capital Market, if we elect to apply for listing there, the less risk there
will
be that we will fail to meet the relevant minimum bid price requirement.
However, there can be no assurance that the market price of our common stock
will rise to or maintain any particular level or that we will at any time or
at
all times be able to meet the minimum-bid-price and other requirements for
obtaining a listing of our common stock on the American Stock Exchange or the
Nasdaq Capital Market and for maintaining such a listing.
Following
The Effective Date of Our Reverse Stock Split, The Resulting Per-Share Stock
Price May Not Attract Institutional Investors Or Investment Funds And May Not
Satisfy The Investing Guidelines Of Such Investors
There
can
be no assurance that our one for ten reverse split to be effective on or about
December 5, 2007 will result in a per-share price that will attract
institutional investors or investment funds or that such share price will
satisfy the investing guidelines of institutional investors or investment
funds.
General
We
are a
specialty pharmaceutical company engaged in research, development and
manufacture of our innovative Aversion® Technology and related product
candidates. Product candidates developed with Aversion® Technology and
containing opioid analgesic active ingredients are intended to effectively
treat
pain and also discourage the three most common methods of pharmaceutical product
misuse and abuse including: (i) intravenous injection of dissolved tablets
or
capsules, (ii) nasal snorting of crushed tablets or capsules and (iii)
intentional swallowing of excessive numbers of tablets or capsules. Acurox™
(oxycodone HCl and niacin) Tablets (formerly known as OxyADF), our lead product
candidate utilizing Aversion® Technology, is being developed pursuant to an
active investigational new drug application (“IND”) on file with the U.S. Food
and Drug Administration ("FDA"). We conduct internal research, development,
laboratory, manufacturing and warehousing activities for Aversion® Technology at
our Culver, Indiana facility. The 28,000 square foot facility is registered
by
the U.S. Drug Enforcement Administration (“DEA”) to perform research,
development and manufacture of certain Schedule II - V finished dosage form
products. In addition to internal capabilities and activities, we engage
numerous contract research organizations (“CROs”) with expertise in regulatory
affairs, clinical trial design and monitoring, clinical data management,
biostatistics, medical writing, laboratory testing and related services. Such
CROs perform development services for Acurox™ Tablets and other product
candidates under our direction.
Aversion®
Technology is applicable to orally administered tablets and capsules. Aversion®
Technology can be formulated into orally administered tablets containing
commonly utilized opioid active pharmaceutical ingredients (such as oxycodone,
hydrocodone, hydromorphone, oxymorphone, morphine, codeine, tramadol,
propoxyphene, etc.), or other potentially abuseable drugs. In addition to the
opioid active ingredient, Aversion® Technology utilizes certain combinations of
pharmaceutical product inactive excipients and active ingredients intended
to
discourage or deter pharmaceutical product abuse. Aversion® Technology does
not
utilize
opioid antagonists such as naltrexone and naloxone.
Acurox™
(oxycodone
HCl and niacin) Tablets, our lead product candidate with Aversion® Technology,
is an orally administered immediate release tablet containing oxycodone HCl
as
its sole active analgesic ingredient and a sub therapeutic amount of niacin.
We
intend to file a 505(b)(2) NDA for OxyADF Tablets with an anticipated indication
for treating moderate to moderately severe pain. Acurox™
Tablets
are intended to effectively treat moderate to moderately severe pain while
also
discouraging the three most common methods of misuse and abuse. OxyADF Tablets
are being developed pursuant to an active IND on file with the FDA. The FDA
has
provided written guidance to us stating that Acurox™
Tablets
are an appropriate product candidate for submission as a 505(b)(2)
NDA.
Acurox™
Tablets are currently the subject of a clinical study (referred to by us as
Study AP-ADF-105) titled “A Phase III, Randomized, Double-blind,
Placebo-controlled, Multicenter, Repeat-dose Study of the Safety and Efficacy
of
Acurox™ (oxycodone HCl and niacin) Tablets versus Placebo for the Treatment of
Acute, Moderate to Severe Postoperative Pain Following Bunionectomy Surgery
in
Adult Patients.” This short term phase III study is planned to enroll
approximately 400 patients with moderate to severe pain following bunionectomy
surgery. We submitted the study protocol to the FDA and requested a Special
Protocol Assessment (SPA). Clinical protocols for Phase III trials whose data
will form the primary basis for an efficacy claim are eligible for a SPA. A
SPA
from the FDA is an agreement that the Phase III trial protocol design, clinical
endpoints, and statistical analyses plan are acceptable to support regulatory
approval. A SPA is binding upon the FDA unless a substantial scientific issue
essential to determining safety or efficacy is identified after the testing
is
begun. On June 19, 2007, we announced that we had reached agreement with the
FDA
on the SPA for Study AP-ADF-105. We believe the completion of Study AP-ADF-105
is the critical time and events path to a 505(b)(2) NDA submission for Acurox™
Tablets.
In
April
2007, the United States Patent and Trademark Office (the “USPTO”) granted us a
U.S. Patent No. 7,201,920 titled ”Methods and Compositions for Deterring Abuse
of Opioid Containing Dosage Forms”. The allowed patent claims encompass
pharmaceutical compositions intended to reduce or discourage the three most
common methods of prescription opioid analgesic product misuse and abuse
including; (i) intravenous injection of dissolved tablets or capsules; (ii)
snorting of crushed tablets or capsules; and (iii) intentionally swallowing
excess quantities of tablets or capsules. The opioid analgesics in the
allowed patent claims include oxycodone, hydrocodone, hydromorphone, morphine,
codeine, tramadol, propoxyphene and many others. In addition to issued U.S.
Patent No. 7,201,920, we currently have pending five U.S. non-provisional patent
applications, three WO/PCT patent applications and multiple additional U.S.
provisional and international patent filings relating to compositions containing
opioid analgesics and other abuseable drugs.
On
October 30, 2007, we entered
into an Agreement with King Pharmaceuticals Research and Development Inc.,
("King") as more fully described below under the caption “King Agreement” (the
“Agreement”).
Pursuant
to the Agreement, we and King will develop and commercialize certain opioid
analgesic products utilizing our Aversion® (abuse deterrent) Technology
including Acurox™ Tablets. The closing of the transaction contemplated by the
Agreement is subject to receipt of approval under the Hart-Scott-Rodino
Antitrust Improvements Act. Our future revenue, if any, will be derived from
milestone and royalty payments relating to the Agreement and other milestone
and
royalty payments, if any, derived from agreements anticipated to be potentially
negotiated and executed with other pharmaceutical company partners.
Our
consolidated financial statements for each of the last four years in the period
ended December 31, 2006 were prepared on a going-concern basis, expressing
substantial doubt about our ability to continue as a going-concern as a result
of recurring losses and negative cash flows. Our future profitability will
depend on several factors, including (i) our ability to
successfully close and fulfill our obligations pursuant to the Agreement with
King, and (ii) the successfully commercialization by King and other future
potential licensees (if any) of products incorporating our Aversion®
Technology.
Pending
the closing and effectiveness of the Agreement with King or similar license
agreements anticipated to be negotiated and executed with other pharmaceuticals
company partners, or other sources of funding, of which no assurance can be
given, we must rely on our current cash reserves to fund operations and product
development activities. No assurance can be given that the condition to the
closing of the Agreement will be satisfied, that we will receive the milestone
and royalty payments provided for in the Agreement, or that we will be
successful in entering into similar agreements with other pharmaceuticals
partners to develop and commercialize products incorporating the Aversion®
Technology. In the absence of our receipt of the upfront, milestone payment
provided for in the Agreement, the receipt of payments under similar license
agreements anticipated to be negotiated and executed with other pharmaceutical
company partners, or the receipt of financing from other sources, we may be
required to scale back or terminate operations and possibly seek protection
under applicable bankruptcy laws. Our failure to successfully develop the
Aversion®
Technology in a timely manner, and to avoid infringing patents and other
intellectual property rights of third parties will have a material adverse
impact on our financial condition and results of operations.
We
are a
publicly traded New York corporation. Our shares of common stock are traded
on
the Over-the-Counter Bulletin Board under the symbol “acur.ob”.
Recent
Developments
King
Agreement
On
October 30, 2007, we and King Pharmaceuticals Research and Development, Inc.
(“King”), a wholly-owned subsidiary of King Pharmaceuticals, Inc., entered into
a License, Development and Commercialization Agreement (the “Agreement”) to
develop and commercialize in the United States, Canada and Mexico (the
"Territory") certain opioid analgesic products utilizing our proprietary
Aversion® (abuse deterrent) Technology including Acurox™ Tablets (formerly known
as OxyADF). The Agreement provides King with an exclusive license in the
Territory for Acurox™ Tablets and another undisclosed opioid product utilizing
Acura's Aversion® Technology. In addition, the Agreement provides King with an
option to license in the Territory all future opioid analgesic products
developed utilizing Acura's Aversion® Technology. The Agreement closing is
subject to antitrust review under the Hart-Scott-Rodino Antitrust Improvements
Act.
Under
the
terms of the Agreement, King will make an upfront cash payment to us of $30
million. Depending on the achievement of certain development and regulatory
milestones, King could also make additional cash payments to us of up to $28
million relating to Acurox™ Tablets and similar amounts with respect to each
subsequent Aversion® Technology product developed under the Agreement. King will
reimburse us for all research and development expenses incurred beginning from
September 19, 2007 for Acurox™ Tablets and all research and development expenses
related to future products after King's exercise of its option to an exclusive
license for each future product. King will record net sales of all products
and
pay us a royalty ranging from 5% to 25% based on the level of combined annual
net sales for all products subject to the Agreement. King will also make a
one-time cash payment to us of $50 million in the first year in which the
combined annual net sales of all products exceed $750 million.
We
and
King will form a joint steering committee to coordinate development and
commercialization strategies. With King’s oversight, we will conduct all Acurox™
Tablet development activities through approval of a New Drug Application (“NDA”)
and thereafter King will commercialize Acurox™ in the U.S. With respect to all
other products subject to the Agreement, King will be responsible for
development and regulatory activities following either acceptance of an
Investigational New Drug Application by the U.S. Food and Drug Administration
(“FDA”) or our demonstration of certain stability and pharmacokinetic
characteristics for each future product. All products developed pursuant to
the
Agreement will be manufactured by King or a third party contract manufacturer
under the direction of King. Subject to the Agreement, King will have final
decision making authority with respect to all development and commercialization
activities for all products licensed.
The
foregoing description of the Agreement contains forward-looking statements
about
the revenue generating potential of Acurox™ Tablets and other opioid analgesic
products developed pursuant to the Agreement. As with any pharmaceutical
products under development or proposed to be developed, substantial risks and
uncertainties exist in development, regulatory review and commercialization
process. There can be no assurance that any product developed, in whole or
in
part, pursuant to the Agreement will receive regulatory approval or prove to
be
commercially successful. Accordingly, investors should recognize that there
is
no assurance that we will receive the milestone payments or royalty revenues
described in the Agreement or even if such milestones are achieved that the
related products will be successfully commercialized and that any royalty
revenues payable to us by King will materialize.
Reverse
Stock Split
On
October 30, 2007, our Board of Directors approved an Amendment to our Restated
Certificate of Incorporation to effect a 1 for 10 reverse stock split. The
reverse stock split will take effect on or about December 5, 2007, subject
to
compliance with OTC Bulletin Board requirements.
Unit
Offering
In
August
2007, we completed a private offering of 23,651,847 units, at a price of $1.08
per unit, with each unit consisting of four shares of common stock and a
seven-year warrant to purchase one share of common stock exercisable at a price
of $0.34 per share. 13,888,886 of the units were issued for cash with the
balance of 9,762,961 units issued in consideration of the conversion to units
of
an aggregate of $10.544 million in principal amount of outstanding bridge loan
indebtedness. Estimated net cash proceeds from the private offering of units,
after related expenses, were approximately $14.2 million. We will utilize the
net proceeds from the private offering for general working capital and to fund
our Pivotal Phase III Clinical Trial for OxyADF Tablets, our lead product
candidate utilizing our Aversion® Technology.
After
giving effect to the issuance of the units, as of September 25, 2007, we had
426,756,493 shares issued and outstanding, 39,715,662 shares underlying
outstanding warrants, 18,994,995 shares underlying outstanding stock options
and
29,500,000 shares underlying outstanding restricted stock units.
Also
on
August 20, 2007, we amended our Loan Agreement dated as of March 29, 2000 and
related $5,000,000 note (the “Note”) held by certain lenders, to (i) extend the
maturity of the Note to December 31, 2008 from September 30, 2007, (ii) reduce
the interest rate to the fixed rate of 10% per annum from the prime rate plus
four and one-half percent, and (iii) have interest paid quarterly in cash,
instead of stock. In addition, the Note is subject to mandatory prepayment
in
whole or in part, with all proceeds in excess of $5 million that we might
receive from a third party pharmaceutical company or companies pursuant to
a
licensing agreement (a “Prepayment Event”). We expect to repay in full the
principal and accrued interest under the Note simultaneous with the closing
of
our Agreement with King. The Loan Agreement and Note were further amended
effective September 24, 2007 to defer the payment of cash interest until the
earlier to occur of (i) the December 31, 2008 maturity date and (ii) the
occurrence of a Prepayment Event.
As
a
result of the above transaction, our outstanding debt balance as of August
20,
2007 of $15,544,000 was reduced to $5,000,000 and our stockholders’ equity
balance increased by approximately $24,690,000.
All
proceeds from the sale of the shares of common stock will be for the account
of
the selling stockholders. We will not receive any of the proceeds from the
sale
of the shares of common stock sold under this prospectus. If all of the warrants
are exercised for cash (rather than on a cashless basis), we will, however,
receive up to approximately $9.98 million. We will use these proceeds, if any,
for working capital purposes and for such other uses as our Board deems
advisable at the time of exercise. We will not receive any proceeds from the
exercise of warrants in a cashless exercise. See “Selling Stockholders” and
“Plan of Distribution.”
Of
the
342,432,734 shares covered by this prospectus, 76,592,570 of such shares
(including shares underlying warrants) were acquired in a private placement
pursuant to a securities purchase agreement dated as of August 20,
2007 (the
“PIPE Transaction”). In the PIPE Transaction, we issued 23,651,847 units at a
price of $1.08 per unit, with each unit consisting of four shares of common
stock and a warrant exercisable for seven years to purchase an additional share
of common stock with an exercise price of $0.34 per share. We agreed to file
a
registration statement with the SEC covering the resale of the shares issued
in
the foregoing transactions, including the shares issuable upon exercise of
the
warrants. GCE Holdings LLC, an investor in the PIPE Transaction, has elected
to
exclude from this prospectus, 41,666,665 shares of common stock (including
shares underlying warrants) acquired by GCE Holdings LLC in the PIPE
Transaction.
The
remaining 265,840,164 shares of common stock (including shares underlying
warrants) covered by this prospectus were acquired by the selling stockholders
from us in previous private placement transactions - the overwhelming majority
of such shares being attributable to private placements occurring in 1998 and
2004 - and are included herein because selling stockholders elected to exercise
piggyback registration rights with respect to such shares.
Ian
Meierdierks and Blair Johnson, two of the selling stockholders listed below,
are
associated persons of broker dealers. Each of such selling stockholders
represented to us at the time of his investment in the PIPE Transaction that
he
acquired the units in the PIPE Transaction for his own account as principal
and
had no arrangement to effect a distribution of the units or the underlying
shares or warrants.
We
prepared the following table based on the information supplied to us by the
selling stockholders named in the table. The selling stockholders may, however,
have sold, transferred or otherwise disposed of all or a portion of their shares
of common stock since the date on which they provided such information. Except
as provided in the table below, none of the selling stockholders has held any
position or office with, or has otherwise had a material relationship with,
us
or any of our subsidiaries within the past three years.
We
do not
know when or in what amounts a selling stockholder may offer shares of common
stock for sale. For purposes of the columns entitled “Number
of shares beneficially owned after the Offering” and “Percentage Ownership After
Offering” we assumed that all shares included in the column labeled “Number of
Shares being offered” will be sold. The
selling stockholders may choose not to sell any of the shares offered by this
prospectus. Except as otherwise set forth below, each selling stockholder has
sole voting control over the shares shown as beneficially owned.
|
|
Number
of shares
beneficially
owned prior to the
offering
(1)
|
|
|
|
Number
of
shares being
offered
|
|
Number
of shares beneficially owned after the Offering
|
|
Percentage
Ownership After Offering
|
GCE
Holdings LLC
|
(2)
|
345,649,572
|
(12)
|
|
|
303,982,907
|
(12)
|
41,666,665
|
(34) |
9.6%
|
Galen
Partners III, L.P.
|
(3)
|
6,156,335
|
(13)(14)
|
|
|
6,006,335
|
(13)
|
150,000
|
|
*
|
Galen
Partners International, III, L.P.
|
(3)
|
508,597
|
(15)
|
|
|
508,597
|
(15)
|
0
|
|
*
|
Galen
Employee Fund III, L.P.
|
(3)
|
26,047
|
(16)
|
|
|
26,047
|
(16)
|
0
|
|
*
|
Essex
Woodlands Health Ventures
Fund
V, L.P.
|
(4)
|
1,806,781
|
(17)(18)
|
|
|
1,706,781
|
(17)
|
100,000
|
|
*
|
Care
Capital Investments II, LP
|
(5)
|
1,279,147
|
(19)(20)
|
|
|
1,185,567
|
(19)
|
93,580
|
|
*
|
Care
Capital Offshore Investments II, LP
|
(5)
|
87,755
|
(21)(22)
|
|
|
81,335
|
(22)
|
6,420
|
|
*
|
Vivo
Ventures Fund VI, L.P.
|
(6)
|
24,818,180
|
(23)
|
|
|
24,818,180
|
(23)
|
0
|
|
*
|
Vivo
Ventures VI Affiliates Fund, L.P
|
(6)
|
181,820
|
(24)
|
|
|
181,820
|
(24)
|
0
|
|
*
|
CGM
IRACustodian f/b/o Michael M. Weisbrot
|
(7)
|
1,114,925
|
(25)
|
|
|
925,925
|
(25)
|
189,000
|
|
*
|
Michael
Weisbrot and Susan Weisbrot JT
|
(8)
|
5,392,649
|
(26)
|
|
|
694,440
|
(27)
|
4,698,209
|
|
1.1%
|
Dennis
Adams
|
(9)
|
5,349,641
|
(28)
|
|
|
694,440
|
(28)
|
4,700,201
|
|
1.1%
|
George
Boudreau
|
(10)
|
910,211
|
(29)
|
|
|
694,440
|
(29)
|
215,771
|
|
*
|
Greg
Wood
|
|
894,639
|
(30)
|
|
|
231,480
|
(30)
|
663,159
|
|
*
|
Peter
Stieglitz
|
(11)
|
265,565
|
(31)
|
|
|
231,480
|
(31)
|
34,085
|
|
*
|
Ian
Meierdiercks
|
|
231,480
|
(32)
|
|
|
231,480
|
(32)
|
0
|
|
*
|
Blair
Johnson
|
|
231,480
|
(33)
|
|
|
231,480
|
(33)
|
0
|
|
*
|
____________
*
Less than One Percent
(1)
|
Beneficial
ownership is determined in accordance with the rules of the Securities
and
Exchange Commission. Amounts in this column assume full exercise
by the
respective selling stockholders of all warrants whose underlying
shares
are covered by this Prospectus.
|
(2)
|
GCE
Holdings LLC, a Delaware limited liability company, was the assignee
of
all of our preferred stock (prior to its conversion into common stock)
and
bridge loans entered into in 2005, 2006 and 2007 (prior to their
conversion into common stock and warrants) formerly held by each
of Galen
Partners III, L.P., Galen Partners International III, L.P., Galen
Employee
Fund III, L.P. (collectively, “Galen”), Care Capital Investments II, LP,
Care Capital Offshore Investments II, LP (collectively, “Care Capital”)
and Essex Woodlands Health Ventures Fund V, L.P. (“Essex”). Galen, Care
Capital and Essex own approximately 39.8%, 30.6% and 29.6%, respectively,
of the membership interests in GCE Holdings LLC. The following natural
persons exercise voting, investment and dispositive rights over our
securities held of record by GCE Holdings LLC: (i) Galen Partners
III,
L.P., Galen Partners International III, L.P. and Galen Employee Fund
III,
L.P.: Bruce F. Wesson, L. John Wilkenson, David W. Jahns, and Zubeen
Shroff; (ii) Care Capital Investments II, LP and Care Capital Offshore
Investments II, LP: Jan Leschly, Richard Markham, Argeris Karabelas
and
David Ramsay; and (iii) Essex Woodlands Health Ventures Fund V, L.P.:
Immanuel Thangaraj, James L. Currie and Martin P. Sutter. Pursuant
to a
voting agreement, GCE Holdings LLC has the right to designate four
members
to our Board of Directors. It has currently exercised such right
with
respect to three directors: Immanuel Tharangaj, Richard Markham and
Bruce
Wesson. Amounts listed for GCE Holdings LLC exclude amounts held
by Galen,
Care Capital or Essex. GCE Holdings LLC acquired units in the PIPE
Transaction for $9 million in cash and conversion of $10.294 million
in
bridge loans acquired from Galen, Care Capital and Essex. The shares
and
shares underlying the units acquired by GCE Holdings LLC in the PIPE
Transaction for cash are not being offered
hereby.
|
(3)
|
Galen
Partners III, L.P., Galen Partners International III, L.P., Galen
Employee
Fund III, L.P. (collectively, “Galen”) collectively own approximately
39.8% of GCE Holdings LLC. Prior to November 2005, Galen had the
right to
designate one member to our Board of Directors. Galen had been one
of our
bridge lenders in the past three years and also holds a 35.1% interest
in
a secured $5 million note issued by us, which must be repaid upon
the
closing of the King Agreement. Galen assigned to GCE Holdings LLC
its
interest in $3,431,333 in principal of our bridge loans prior to
the
closing of the PIPE Transaction and GCE Holdings LLC converted such
bridge
loans into units in the PIPE Transaction. The following natural persons
exercise voting, investment and dispositive rights over our securities
held by Galen: (i) Bruce F. Wesson, L. John Wilkenson, David W. Jahns,
and
Zubeen Shroff. Bruce Wesson has been one of our directors since March
1998, including as designee of Galen and currently as designee of
GCE
Holdings LLC. The amounts listed for each Galen entity exclude amounts
held by any other Galen entity or GCE Holdings
LLC.
|
(4)
|
Essex
Woodlands Health Ventures Fund V, L.P. (“Essex”) owns approximately 29.6%
of GCE Holdings LLC. Prior to November 2005, Essex had the right
to
designate one member to our Board of Directors. Essex had been one
of our
bridge lenders in the past three years and also holds a 35.1% an
interest
in a secured $5 million note issued by us, which must be repaid upon
the
closing of the King Agreement. Essex assigned to GCE Holdings LLC
its
interest in $3,431,333 in principal of our bridge loans prior to
the
closing of the PIPE Transaction and GCE Holdings LLC converted those
bridge loans into units in the PIPE Transaction. The following natural
persons exercise voting, investment and dispositive rights over our
securities held by Essex: Immanuel Thangaraj, James L. Currie and
Martin
P. Sutter. Mr. Tharangaj has been one of our directors since December
2002, as designee of Essex and now as designee of GCE Holdings LLC.
The
amounts listed for Essex exclude amounts held by GCE Holdings LLC.
|
(5)
|
Care
Capital Investments II, LP and Care Capital Offshore Investments
II, LP
(collectively, “Care Capital”) collectively own approximately 30.6% of GCE
Holdings LLC. Prior to November 2005, Care Capital had the right
to
designate one member to our Board of Directors. Care Capital had
been one
of our bridge lenders in the past three years and also holds a 27.0%
interest in a $5 Million note issued by us, which must be repaid
upon the
closing of the King Agreement. Care Capital assigned to GCE Holdings
LLC
its interest in $3,431,333 of our bridge loans prior
to the closing of the PIPE Transaction and GCE Holdings LLC converted
those loans into units
in
the PIPE Transaction. The following natural persons exercise voting,
investment and dispositive rights over our securities held by Care
Capital: Jan Leschly, Richard Markham, Argeris Karabelas and David
Ramsay.
Argeris Karabelas was one of our directors from December 2002 to
May 2006,
as designee of Care Capital and Richard Markham has been a director
since
May 2006, as designee of Care Capital and now as designee of GCE
Holdings
LLC. The amounts listed for each Care Capital entity exclude amounts
held
by any other Care Capital entity or GCE Holdings
LLC.
|
(6)
|
Vivo
Ventures Fund VI, L.P. and Vivo Ventures VI Affiliates Fund, L.P.
are
affiliated entities (the “Vivo Entities”). Vivo Ventures Fund VI, L.P. has
the right to designate an observer to attend meetings of our Board
of
Directors, until such time as it disposes of 50% of the securities
it
acquired in the PIPE Transaction and Vivo Ventures Fund VI, L.P.
has
designated Albert Cha as such observer. The amounts listed for each
of the
Vivo Entities excludes the amounts held by any other Vivo Entity.
All
shares held by each Vivo Entity were acquired in the PIPE Transaction.
Vivo Ventures Fund VI, L.P. invested $5 million and Vivo Ventures
VI
Affiliates Fund, L.P. invested $0.4 million in the PIPE
Transaction.
|
(7)
|
CGM
IRA Custodian f/b/o Michael M. Weisbrot invested $200,000 in cash
in the
PIPE Transaction. Amounts exclude shares and shares underlying warrants
held by Michael and Susan Weisbrot.
|
(8)
|
Michael
and Susan Weisbrot own a 1.2% interest in a secured $5 million note
issued
by us, which must be repaid upon the closing of the King
Agreement.
|
(9)
|
Amounts
include shares and shares underlying warrants acquired by Mr. Adams
for
$100,000 in cash and upon conversion of $50,000 in bridge loans extended
in November 2005 into units in the PIPE Transaction. Mr. Adams owns
a 0.9%
interest in a secured $5 million note issued by us, which must be
repaid
upon the closing of the King Agreement.
|
(10)
|
Amounts
include shares and shares underlying warrants acquired by Mr. Boudreau
for
$100,000 in cash and upon conversion of $50,000 in bridge loans extended
in November 2005 into units in the PIPE Transaction. Mr. Boudreau
owns a
0.4% interest in a secured $5 million note issued by us, which must
be
repaid upon the closing of the King Agreement.
|
(11)
|
Amounts
include shares and shares underlying warrants acquired by Mr. Stieglitz
for $50,000 in cash in the PIPE Transaction. Mr. Stieglitz owns a
0.15%
interest in a secured $5 million note issued by us, which must be
repaid
upon the closing of the King Agreement.
|
(12)
|
Includes
9,531,481 shares underlying warrants acquired in the PIPE Transaction,
exercisable at $0.34 per share.
|
(13)
|
Includes
424,663, 137,030 and 3,732,365 shares underlying warrants exercisable
at
$0.99, $0.1285, and $0.34,
respectively.
|
(14)
|
Includes
100,000 shares underlying options exercisable at $0.36 per share
and
50,000 shares underlying options with exercise prices ranging from
$1.14
to $2.375 per share.
|
(15)
|
Includes
37,284, 12,409 and 337,797 shares underlying warrants exercisable
at
$0.99, $0.1285 and $0.34,
respectively.
|
(16)
|
Includes
4,716, 561 and 15,279 shares underlying warrants exercisable at $0.99,
$0.1285 and $0.34, respectively.
|
(17)
|
Includes
345,000 shares underlying warrants exercisable at $.01285 per
share.
|
(18)
|
Includes
100,000 shares underlying options exercisable at $0.36 per share.
|
(19)
|
Includes
140,370 shares underlying warrants exercisable at $0.1285 per share.
|
(20)
|
Includes
93,580 shares underlying options exercisable at $0.36 per share.
|
(21)
|
Includes
9,630 shares underlying warrants exercisable at $0.1285 per share.
|
(22)
|
Includes
6,420 shares underlying options exercisable at $0.36 per share.
|
(23)
|
Includes
4,963,636 shares underlying warrants acquired in the PIPE Transaction,
exercisable at $0.34 per share.
|
(24)
|
Includes
36,364 shares underlying warrants acquired in the PIPE Transaction,
exercisable at $0.34 per share.
|
(25)
|
Includes
185,185 shares underlying warrants acquired in the PIPE Transaction,
exercisable at $0.34 per share.
|
(26)
|
Amounts
include shares and shares underlying warrants acquired by Susan and
Michael Weisbrot upon conversion of $150,000 in bridge loans extended
in
November 2005 into units in the PIPE Transaction. Amounts
include shares and shares underlying warrants of CGM IRA Custodian
f/b/o
Michael M. Weisbrot, over which Michael Weisbrot has voting and investment
control. Included
in the foregoing are 324,073 shares underlying warrants acquired
in the
PIPE Transaction by Susan and Michael Weisbrot and by CGM IRA Custodian
f/b/o Michael M. Weisbrot, exercisable at $0.34 per share. Also
includes the following over which Michael Weisbrot has or shares
voting
and investment control: 6,438 shares in another retirement account
owned
by Michael Weisbrot and 10,000 shares held by Michael Weisbrot as
custodian for the son of Michael and Susan Weisbrot. Also includes
the
following over which Susan Weisbrot has or shares voting and investment
control: 6,323 shares in a retirement account owned by Susan
Weisbrot,
and
12,000 shares held jointly be Susan Weisbrot and the daughter of
Michael
and Susan Weisbrot.
Michael and Susan
Weisbrot each share voting and investment control over the remaining
shares.
|
(27)
|
Includes
138,888 shares underlying warrants acquired in the PIPE Transaction
by
Susan and Michael Weisbrot exercisable at $0.34 per share. Excludes
shares
and shares underlying warrants being offered by CGM IRA Custodian
f/b/o
Michael M. Weisbrot.
|
(28)
|
Includes
138,888 shares underlying warrants acquired in the PIPE Transaction,
exercisable at $0.34 per share.
|
(29)
|
Includes
138,888 shares underlying warrants acquired in the PIPE Transaction,
exercisable at $0.34 per share.
|
(30)
|
Includes
46,296 shares underlying warrants acquired in the PIPE Transaction,
exercisable at $0.34 per share. Mr. Wood invested $50,000 in cash
in the
PIPE Transaction.
|
(31)
|
Includes
46,296 shares underlying warrants acquired in the PIPE Transaction,
exercisable at $0.34 per share.
|
(32)
|
Includes
46,296 shares underlying warrants acquired in the PIPE Transaction,
exercisable at $0.34 per share. Mr.
Meierdiercks invested
$50,000 in cash in the PIPE
Transaction.
|
(33)
|
Includes
46,296 shares underlying warrants acquired in the PIPE Transaction,
exercisable at $0.34 per share. Mr. Johnson invested $50,000 in cash in
the PIPE Transaction.
|
(34)
|
Includes
8,333,333 shares underlying warrants acquired in the PIPE Transaction,
exercisable at $0.34 per share.
|
The
selling stockholders may, from time to time, sell any or all of their shares
of
common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more of the
following methods when selling shares:
|
●
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
●
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
●
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
|
●
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
●
|
privately
negotiated transactions;
|
|
●
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
|
|
●
|
broker-dealers
may agree with the selling stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
|
●
|
a
combination of any such methods of sale;
and
|
|
●
|
any
other method permitted pursuant to applicable
law.
|
The
selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus
Broker-dealers
engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
selling stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved. Any profits on the
resale of shares of common stock by a broker-dealer acting as principal might
be
deemed to be underwriting discounts or commissions under the Securities Act.
Discounts, concessions, commissions and similar selling expenses, if any,
attributable to the sale of shares will be borne by a selling stockholder.
The
selling stockholders may agree to indemnify any agent, dealer or broker-dealer
that participates in transactions involving sales of the shares if liabilities
are imposed on that person under the Securities Act.
The
selling stockholders may from time to time pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time under this
prospectus after we have filed a supplement to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act of 1933
supplementing or amending the list of selling stockholders to include the
pledgee, transferee or other successors in interest as selling stockholders
under this prospectus.
The
selling stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors
in
interest will be the selling beneficial owners for purposes of this prospectus
and may sell the shares of common stock from time to time under this prospectus
after we have filed a supplement to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 supplementing or
amending the list of selling stockholders to include the pledgee, transferee
or
other successors in interest as selling stockholders under this
prospectus.
The
selling stockholders and any broker-dealers or agents that are involved in
selling the shares of common stock may be deemed to be “underwriters” within the
meaning of the Securities Act in connection with such sales. In such event,
any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares of common stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
We
are
required to pay all fees and expenses incident to the registration of the shares
of common stock. We have agreed to indemnify the selling stockholders against
certain losses, claims, damages and liabilities, including liabilities under
the
Securities Act.
The
selling stockholders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating broker acting in connection with a proposed
sale
of shares of common stock by any selling stockholder. If we are notified by
any
selling stockholder that any material arrangement has been entered into with
a
broker-dealer for the sale of shares of common stock, if required, we will
file
a supplement to this prospectus. If the selling stockholders use this prospectus
for any sale of the shares of common stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
The
anti-manipulation rules of Regulation M under the Securities Exchange Act
of 1934 may apply to sales of our common stock and activities of the selling
stockholders.
The
validity of the common stock offered hereby has been passed upon by Seiden
Wayne
LLC. Seiden Wayne LLC holds 24,530 shares
of
our common stock.
The
consolidated financial statements incorporated by reference in this Prospectus
and in the Registration Statement have been audited by BDO Seidman, LLP, an
independent registered public accounting firm, to the extent and for the periods
set forth in their report incorporated herein and are included herein in
reliance upon such report, given upon authority of said firm as experts in
auditing and accounting. This report contains an explanatory paragraph regarding
the Company’s ability to continue as a going concern.
The
Securities and Exchange Commission, or SEC, allows us to “incorporate by
reference” in this prospectus the information that we file with them. This means
that we can disclose important information to you in this document by referring
you to other filings we have made with the SEC. The information incorporated
by
reference is considered to be part of this prospectus, and later information
we
file with the SEC will update and supersede this information. We incorporate
by
reference the documents listed below and any future filings made with the SEC
under Section 13(a), 13(c), 14, or 15(d) of the Exchange Act prior to the
completion of the offering covered by this prospectus:
•
|
|
our
Annual Report on Form 10-K for our fiscal year ended December 31,
2006;
|
•
|
|
our
Current Report on Form 8-K filed with the SEC on February 20, 2007;
|
•
|
|
our
Current Reports on Form 8-K each filed with the SEC on March 15,
2007;
|
•
|
|
our
Current Report on Form 8-K filed with the SEC on April 2, 2007;
|
•
|
|
our
Amendment to Current Report on Form 8-K/A filed with the SEC on April
3,
2007, amending our Current Report on Form 8-K filed on April 2, 2007
|
•
|
|
our
Current Report on Form 8-K filed with the SEC on May 4, 2007;
|
•
|
|
our
Quarterly Report on Form 10-Q for our fiscal quarter ended March
31, 2007
filed with the SEC on May 4, 2007;
|
•
|
|
our
Current Report on Form 8-K filed with the SEC on May 18, 2007;
|
•
|
|
our
Current Report on Form 8-K filed with the SEC on June 19, 2007;
|
•
|
|
our
Current Report on Form 8-K filed with the SEC on July 5, 2007;
|
•
|
|
our
Current Report on Form 8-K filed with the SEC on July 10, 2007;
|
•
|
|
our
Current Report on Form 8-K filed with the SEC on August 9, 2007;
|
•
|
|
our
Quarterly Report on Form 10-Q for our fiscal quarter ended June 30,
2007
filed with the SEC on August 9, 2007;
|
•
|
|
our
Current Report on Form 8-K filed with the SEC on August 21, 2007;
|
•
|
|
our
Current Report on Form 8-K filed with the SEC on September 24, 2007;
|
•
|
|
our
Quarterly Report on Form 10-Q for our fiscal quarter ended September
30,
2007 filed with the SEC on November 2,
2007;
|
•
|
|
our
Current Reports (two) on Form 8-K filed with the SEC on November
2, 2007;
and
|
•
|
|
the
description of our common stock contained in our registration statement
on
Form 8-A filed with the SEC on November 14, 1988.
|
Documents
incorporated by reference in this prospectus, filed after the date of any other
document incorporated by reference may contain information that updates,
modifies or is contrary to information in such earlier document. This prospectus
may contain information that updates, modifies or is contrary to information
in
one or more of the documents incorporated by reference in this prospectus.
Reports we file with the SEC after the date of this prospectus may also contain
information that updates, modifies or is contrary to information in this
prospectus or in documents incorporated by reference in this prospectus.
Investors should review these reports as they may disclose a change in our
business, prospects, financial condition or other affairs after the date of
this
prospectus.
Upon
your
written or oral request, we will provide at no cost to you a copy of any and
all
of the information that is incorporated by reference in this prospectus.
Requests
for such documents should be directed to:
Acura
Pharmaceuticals, Inc.
Attn:
Investor Relations
616
N.
North Court, Suite 120
Palatine,
Illinois 60067
(847)
705-7709
We
have
filed with the Securities and Exchange Commission a registration statement
on
Form S-3, of which this prospectus is a part, under the Securities Act with
respect to the shares of common stock offered hereby. This prospectus does
not
contain all of the information included in the registration statement.
Statements in this prospectus concerning the provisions of any document are
not
necessarily complete. You should refer to the copies of these documents filed
as
exhibits to the registration statement or otherwise filed by us with the SEC
for
a more complete understanding of the matter involved. Each statement concerning
these documents is qualified in its entirety by such reference.
We
are
subject to the informational requirements of the Securities and Exchange Act
of
1934, as amended, and, accordingly, file reports, proxy statements and other
information with the SEC. The SEC maintains a web site at http://www.sec.gov
that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. Copies of our
reports, proxy statements and other information also may be inspected and copied
at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington,
D.C. 20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330.
342,432,734
Shares
ACURA
PHARMACEUTICALS, INC.
Common
Stock
PROSPECTUS
November
20, 2007