As filed with the Securities and Exchange
Commission on June 19, 2015
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ABEONA THERAPEUTICS INC.
(Exact name of registrant as specified in
its charter)
| Delaware |
|
83-0221517 |
| (State or other jurisdiction of incorporation or organization) |
|
(IRS Employer Identification Number) |
3333 Lee Parkway, Suite 600, Dallas, TX 75219
(214) 905-5100
(Address, including zip code, and telephone
number, including area code, of registrant’s principal executive offices)
John J. Concannon III, Esq.
Morgan, Lewis & Bockius LLP
One Federal Street
Boston, Massachusetts 02110
(617) 951-8000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Approximate date of commencement of proposed
sale to the public:
From time to time after the effective date of
this Registration Statement.
If the only securities
being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following
box. ¨
If any of the securities
being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x
If this Form is filed
to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a registration
statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If this Form is a post-effective
amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Securities Exchange Act of 1934.
| Large accelerated filer ¨ |
|
Accelerated filer ¨ |
|
Non-accelerated filer ¨ |
|
Smaller reporting company x |
| |
|
|
|
(Do not check if a smaller reporting company) |
CALCULATION OF REGISTRATION FEE (1)
| Title
of each class of securities to be registered | |
Proposed
maximum
offering price (1)(2) | | |
Amount
of
registration fee (2) | |
| Common
Stock (3) | |
| | | |
| | |
| Preferred
Stock (4) | |
| | | |
| | |
| Warrants
(5) | |
| | | |
| | |
| Debt
securities (6) | |
| | | |
| | |
| Total | |
$ | 225,000,000 | | |
$ | 26,145 | |
| (1) |
In no event will the aggregate offering price of
all securities issued from time to time by the registrant under this registration statement exceed $225,000,000 or its equivalent
in any other currency, currency units, or composite currency or currencies. The securities covered by this registration
statement to be sold by the registrant may be sold separately, together, or as units with other securities registered under
this registration statement. |
| |
|
| (2) |
The proposed maximum aggregate price has been estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act. |
| |
|
| (3) |
Subject to note (1), this registration statement covers an indeterminate amount of common stock (with accompanying purchase rights, if any), as may be sold, from time to time, at indeterminate prices, by the registrant. |
| |
|
| (4) |
Subject to note (1), this registration statement covers an indeterminate number of shares of preferred stock (with accompanying purchase rights, if any), as may be sold, from time to time, at indeterminate prices, by the registrant. Also covered is such an indeterminate amount of common stock (with accompanying purchase rights, if any) (i) as may be issuable or deliverable upon conversion of shares of preferred stock, and (ii) as may be required for delivery upon conversion of shares of preferred stock as a result of anti-dilution provisions. |
| |
|
| (5) |
Subject to note (1), this registration statement covers an indeterminate amount and number of warrants representing rights to purchase common stock, preferred stock and debt securities registered under this registration statement, as may be sold, from time to time, at indeterminate prices by the registrant. Also covered is an indeterminate amount of common stock and preferred stock (in each case, with accompanying purchase rights, if any) and debt securities (i) as may be issuable or deliverable upon exercise of warrants and (ii) as may be required for delivery upon exercise of any warrants as a result of anti-dilution provisions. |
| |
|
| (6) |
Subject to note (1), this registration statement covers an indeterminate
amount of debt securities, as may be sold, from time to time, at indeterminate prices by the registrant. If any debt securities
are issued at an original issue discount, then the offering price shall be in such greater principal amount as shall result
in an aggregate initial offering price not to exceed $225,000,000. Also covered is an indeterminate amount of common stock and
preferred stock (in each case, with accompanying purchase rights, if any) (i) as may be issuable or deliverable upon
exercise or conversion of debt securities and (ii) as may be required for delivery upon exercise or conversion of debt
securities as a result of anti-dilution provisions. |
We hereby amend this registration statement
(the “Registration Statement”) on such date or dates as may be necessary to delay its effective date until we shall
file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as
the Commission, acting pursuant to said Section 8(a), may determine.
The
information contained in this prospectus is not complete and may be changed. We may not sell these securities until the Registration
Statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities
and we are not soliciting offers to buy these securities in any jurisdiction where such offer or sale is not permitted.
Subject to Completion, Dated June 19, 2015
PROSPECTUS
$225,000,000
ABEONA THERAPEUTICS INC.
Common Stock
Preferred Stock
Warrants
Debt Securities
We may offer or sell to the public from time
to time in one or more series or issuances:
| • | shares of our common stock; |
| • | shares of preferred stock; |
| • | warrants to purchase shares of our common stock, preferred stock and/or debt securities; |
| • | debt securities consisting of debentures, notes or other evidences of indebtedness; or |
| • | any combination of these securities. |
This prospectus provides a general description
of the securities that we may offer. Each time that securities are sold under this prospectus, we will provide specific terms of
the securities offered in a supplement to this prospectus. The prospectus supplement may also add, update or change information
contained in this prospectus. This prospectus may not be used to consummate a sale of securities unless accompanied by the applicable
prospectus supplement. You should read both this prospectus and the applicable prospectus supplement together with additional information
described under the heading “Where You Can Find More Information” before you make your investment decision.
Securities sold under this prospectus shall
be sold directly to purchasers or through agents on our behalf or through underwriters or dealers as designated from time to time.
If any agents or underwriters are involved in the sale of any of these securities, the applicable prospectus supplement will provide
the names of the agents or underwriters and any applicable fees, commissions or discounts.
Our common stock is listed on The NASDAQ Capital
Market under the symbol “PTBI.” Beginning on June 22, 2015, our common stock will be listed on The NASDAQ Capital
Market under the symbol “ABEO”, reflecting the change in our name from PlasmaTech Biopharmaceuticals, Inc. to Abeona
Therapeutics Inc., as discussed elsewhere in this prospectus. On June 18, 2015, the closing price of our common stock was $6.53.
As of June 18, 2015, the aggregate
market value of our outstanding common stock held by non-affiliates was approximately $96,389,000, based on 29,859,015 shares
of outstanding common stock, of which approximately 14,760,908 shares are held by non-affiliates, and a per share price of
$6.53 based on the closing sale price of our common stock on June 18, 2015. As of the date hereof, we have not offered any
securities pursuant to General Instruction I.B.6 of Form S-3 during the prior 12 calendar month period that ends on and
includes the date hereof.
In addition to the securities covered under
this prospectus, our securities are currently also subject to ongoing public distribution pursuant to a prospectus covering the
resale of an aggregate of 1,925,000 shares of our common stock issued to certain selling stockholders (pursuant to the registration
statement on Form S-3, Registration No.333-204179).
The mailing address of our principal executive
offices is 3333 Lee Parkway, Suite 600, Dallas, Texas 75219. Our telephone number is (214) 905-5100.
Investing in our securities involves
certain risks. Before investing, you should refer to the risk factors on page 11 of this prospectus, included in our periodic
reports, in prospectus supplements and in other information filed by us with the Securities and Exchange Commission.
This prospectus may not be used to offer
or sell any securities unless accompanied by a prospectus supplement.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of
this prospectus. Any representation to the contrary is a criminal offense.
We may sell these securities on a continuous
or delayed basis directly, through agents, dealers or underwriters as designated from time to time, or through a combination of
these methods. We reserve the sole right to accept, and together with any agents, dealers and underwriters, reserve the right to
reject, in whole or in part, any proposed purchase of securities. If any agents, dealers or underwriters are involved in the sale
of any securities, the applicable prospectus supplement will set forth any applicable commissions or discounts. Our net proceeds
from the sale of securities also will be set forth in the applicable prospectus supplement.
The date of this prospectus is , 2015.
TABLE OF CONTENTS
Prospectus
ABOUT THIS PROSPECTUS
This prospectus is part of a “shelf”
registration statement. Under this process, we may sell, at any time and from time to time, in one or more offerings, any combination
of the securities described in this prospectus. The exhibits to our Registration Statement contain the full text of certain contracts
and other important documents we have summarized in this prospectus. Since these summaries may not contain all the information
that you may find important in deciding whether to purchase the securities we offer, you should review the full text of these documents.
The Registration Statement and the exhibits can be obtained from the Securities and Exchange Commission (“SEC”) as
indicated under the heading “Where You Can Find More Information.”
This prospectus only provides you with a general
description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that contains
specific information about the terms of those securities and the terms of that offering. The prospectus supplement may also add,
update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement together
with the additional information described below under the heading “Where You Can Find More Information.”
We have not authorized any dealer, agent
or other person to give any information or to make any representation other than those contained or incorporated by reference in
this prospectus and any accompanying prospectus supplement. You must not rely upon any information or representation not contained
or incorporated by reference in this prospectus or an accompanying prospectus supplement. This prospectus and the accompanying
prospectus supplement, if any, do not constitute an offer to sell or the solicitation of an offer to buy any securities other than
the registered securities to which they relate, nor do this prospectus and the accompanying prospectus supplement, if any, constitute
an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to
make such offer or solicitation in such jurisdiction. You should not assume that the information contained in this prospectus and
the accompanying prospectus supplement, if any, is accurate on any date subsequent to the date set forth on the front of the document
or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated
by reference, even though this prospectus and any accompanying prospectus supplement is delivered or securities are sold on a later
date.
References in this prospectus to the terms
“the Company,” “Abeona,” “we,” “our” and “us” or other similar terms
mean Abeona Therapeutics Inc., unless we state otherwise or the context indicates otherwise.
THE COMPANY
Overview
Abeona Therapeutics Inc. (“Abeona” or the “Company”)
is focused on developing and delivering gene therapy and plasma-based products for severe and life-threatening rare diseases. Abeona’s
lead program is a gene therapy for Sanfilippo syndrome (MPS IIIA and IIIB) in collaboration with patient advocate groups, researchers
and clinicians. Clinical trials for Sanfilippo types A and B are anticipated to begin in 2015. The Company recently licensed a
third gene therapy program in juvenile Batten disease from University of Nebraska Medical Center. In addition, the Company is pursuing
two additional proprietary platforms, Salt Diafiltration (SDF™) Process and Polymer Hydrogel Technology (PHT™), and
is active in the development and commercialization of human plasma-derived therapeutics, including its proprietary alpha-1 protease
inhibitor, SDF Alpha™. Our principal executive office is located at 3333 Lee Parkway, Suite 600, Dallas, Texas 75129. Our
website addresses are www.abeonatherapeutics.com and www.plasmatechbio.com. We do not incorporate by reference into
this prospectus the information on our website, and you should not consider it as part of this prospectus.
Recent Developments
| · | On June 15, 2015, we licensed exclusive worldwide rights to an AAV gene therapy and intellectual property from the University
of Minnesota to treat patients with Fanconi anemia (FA) disorder and other rare blood diseases using the CRISPR/cas9 technology
platform for undisclosed terms. |
| · | On June 8, 2015, we licensed exclusive worldwide rights to an AAV gene therapy for the treatment of juvenile Batten disease
(JBD) from UNeMed Corporation, the technology transfer and commercialization office for the University of Nebraska Medical Center
in Omaha, Nebraska for undisclosed terms. |
| · | On May 11, 2015 we closed a $10 million private placement of common stock consisting of 1,250,000 shares of common stock,
at a price of $8.00 per share, and warrants to purchase 625,000 shares of common stock with an exercise
price of $10 per share. |
| · | On May 5, 2015, the Company, Plasmatech Merger Sub Inc. (“Merger Sub”), a wholly owned subsidiary of the
Company, Abeona Therapeutics LLC, an Ohio limited liability company (“Abeona Ohio”) and Paul A. Hawkins, an
individual, solely in his capacity as Member Representative (“Member Representative”) entered into an Agreement
and Plan of Merger (the “Merger Agreement”). Pursuant to the terms and subject to the conditions set forth in the
Merger Agreement, Merger Sub merged with and into Abeona Ohio, with Abeona Ohio continuing as the surviving corporation and
becoming a wholly owned subsidiary of the Company (the “Merger”). The Board of Directors of the Company and
Managers of Abeona Ohio unanimously approved the transaction. The Merger closed on May 15, 2015. |
| · | In connection with the Merger, the Company issued to Abeona Ohio members a total of 3,979,761 common shares on closing
of the transaction, and up to an additional $9 million in performance milestones, in common stock or cash, at the Company’s
option. |
| · | On April 23, 2015 we closed a $7 million private placement of common stock consisting of 2,333,333 shares of common stock,
at a price of $3.00 per share. |
| · | On April 7, 2015 we announced we had appointed Charlie Strange, M.D. to our Scientific Advisory Board (SAB). Dr. Strange is
a highly regarded thought leader in the Alpha-1 community, and has extensive clinical experience in designing and managing Alpha-1
clinical studies. We believe his advice and counsel will help accelerate development and approval of our proprietary SDF Alpha™
biologic drug. |
Product Development Strategy
Abeona is focused on developing and delivering gene therapy and
plasma-based products for severe and life-threatening rare diseases. A rare disease is one that affects fewer than 200,000 people
in the United States. There are nearly 7,000 rare diseases, which may involve chronic illness, disability, and often, premature
death. More than 25 million Americans and 30 million Europeans have one. While rare diseases can affect any age group, about 50%
of people affected are children (15 million); and rare diseases account for 35% of deaths in the first year of life. These rare
diseases are often poorly diagnosed, very complex, and have no treatment or not very effective treatment—over 95% of rare
diseases do not have a single FDA or EMA approved drug treatment. However, most rare diseases are often caused by changes in genes—80%
are genetic in origin and can present at any stage of life. We believe emerging insights in genetics and advances in biotechnology,
as well as new approaches and collaboration between researchers, industry, regulators and patient groups, provide significant opportunities
to develop breakthrough treatments for rare diseases. Below is the status of our various products and product candidates.
Developing Next Generation Gene Therapy
Gene therapy is the use of DNA as a potential therapy to treat a
disease. In many disorders, particularly genetic diseases caused by a single genetic defect, gene therapy aims to treat a disease
by delivering the correct copy of DNA into a patient's cells. The healthy, functional copy of the therapeutic gene then helps the
cell function correctly. In gene therapy, DNA that encodes a therapeutic protein is packaged within a "vector", often
a “naked” virus, which is used to transfer the DNA to the inside of cells within the body. Gene therapy can be delivered
by a direct injection, either intravenously (IV) or directly into a specific tissue in the body, where it is taken up by individual
cells. Once inside cells, the correct DNA becomes expressed by the cell machinery, resulting in the production of therapeutic protein,
which in turn treats the patient's disease and can provide long-term benefit.
Abeona is developing next generation adeno-associated virus (AAV)
gene therapies. Viruses such as AAV are utilized because they have evolved a way of encapsulating and delivering one or more genes
of the size needed for clinical application, and can be purified in large quantities at high concentration. Unlike AAV vectors
found in nature, the AAV vectors used by Abeona have been genetically-modified such that they do not replicate. Although the preclinical
studies in animal models of disease demonstrate the promising impact of AAV-mediated gene expression to affected tissues such
as the heart, liver and muscle, our programs use a specific virus that is capable of delivering therapeutic DNA across the blood
brain barrier and into the central nervous system (CNS), making them attractive for addressing lysosomal storage diseases which
have severe CNS manifestations of the disease.
Lysosomal storage diseases (LSD) are a group of rare inborn errors
of metabolism resulting from deficiency in normal lysosomal function. These diseases are characterized by progressive accumulation
of storage material within the lysosomes of affected cells, ultimately leading to cellular dysfunction. Multiple tissues ranging
from musculoskeletal and visceral to tissues of the central nervous system are typically involved in disease pathology. Since the
advent of enzyme replacement therapy (ERT) to manage some LSDs, general clinical outcomes have significantly improved; however,
treatment with infused protein is lifelong and continued disease progression is still evident in patients. Thus, viral gene therapy
may provide a viable alternative or adjunctive therapy to current management strategies for LSDs.
Our initial programs are focused on LSDs such as Mucopolysaccharidosis
(MPS) IIIA and IIIB. Also known as Sanfilippo syndromes type A and type B, MPS III is a progressive neuromuscular disease with
profound CNS involvement. Our lead product candidates, ABO-101 and ABO-102, have been developed to replace the damaged, malfunctioning
enzymes within target cells with the normal, functioning version. Delivered via a single injection, the drug is only given once.
ABO-101 for MPS III B and ABO-102 for MPS III A (Sanfilippo
syndrome)
Mucopolysaccharidosis (MPS) type III (Sanfilippo syndrome) is a
group of four inherited genetic diseases, described as type A, B, C or D, which cause enzyme deficiencies that result in the abnormal
accumulation of glycosaminoglycans (sugars) in body tissues. MPS III is a lysosomal storage disease, a group of rare inborn errors
of metabolism resulting from deficiency in normal lysosomal function. The incidence of MPS III (all four types combined) is estimated
to be 1 in 70,000 births.
Mucopolysaccharides are long chains of sugar molecule used in the
building of connective tissues in the body. There is a continuous process in the body of replacing used materials and breaking
them down for disposal. Children with MPS III are missing an enzyme which is essential in breaking down the used mucopolysaccharides
called heparan sulfate. The partially broken down mucopolysaccharides remain stored in cells in the body causing progressive damage.
Babies may show little sign of the disease, but as more and more cells become damaged, symptoms start to appear.
In MPS III, the predominant symptoms occur due to accumulation within
the central nervous system (CNS), including the brain and spinal cord, resulting in cognitive decline, motor dysfunction, and eventual
death. To date, there is no cure for MPS III and treatments are largely supportive.
Abeona is developing next generation adeno-associated viral (AAV)-based
gene therapies for MPS III (Sanfilippo syndrome), which involves a one-time delivery of a normal copy of the defective gene to
cells of the central nervous system with the aim of reversing the effects of the genetic errors that cause the disease.
After a single dose in Sanfilippo preclinical models, ABO-101 and
ABO-102 induced cells in the CNS and peripheral organs to produce the missing enzymes which helped repair the damage caused to
the cells. Preclinical in vivo efficacy studies in Sanfilippo syndrome have demonstrated functional benefits that remain for months
after treatment. A single dose of AB0-101 or AB0-102 significantly restored normal cell and organ function, corrected cognitive
defects that remained months after drug administration, increased neuromuscular control and increased the lifespan of animals with
MPS III over 100% one year after treatment compared to untreated control animals. These results are consistent with studies from
several laboratories suggesting AAV treatment could potentially benefit patients with Sanfilippo Syndrome Type A and B. In addition,
safety studies conducted in animal models of Sanfilippo syndromes have demonstrated that delivery of AB0-101 or AB0-102 are well
tolerated with minimal side effects.
ABO-201 for Juvenile Batten Disease (JBD)
ABO-201 (scAAV9 CLN3) is an AAV-based gene therapy which has shown
promising preclinical efficacy in delivery of a normal copy of the defective CLN3 gene to cells of the central nervous system with
the aim of reversing the effects of the genetic errors that cause juvenile Batten disease. Juvenile Batten disease (JBD) is a rare,
fatal, autosomal recessive (inherited) disorder of the nervous system that typically begins in children between 4 and 8 years of
age. Often the first noticeable sign of JBD is vision impairment, which tends to progress rapidly and eventually result in blindness.
As the disease progresses, children experience the loss of previously acquired skills (developmental regression). This progression
usually begins with the loss of the ability to speak in complete sentences. Children then lose motor skills, such as the ability
to walk or sit. They also develop movement abnormalities that include rigidity or stiffness, slow or diminished movements (hypokinesia),
and stooped posture. Beginning in mid- to late childhood, affected children may have recurrent seizures (epilepsy), heart problems,
behavioral problems, and difficulty sleeping. Life expectancy is greatly reduced. Most people with juvenile Batten disease live
into their twenties or thirties. As yet, no specific treatment is known that can halt or reverse the symptoms of juvenile Batten
disease.
Juvenile Batten disease is the most common form of a group of disorders
known as neuronal ceroid lipofuscinoses (NCLs). Collectively, all forms of NCL affect an estimated 2 to 4 in 100,000 live births
in the United States. NCLs are more common in Finland, where approximately 1 in 12,500 individuals are affected; as well as Sweden,
other parts of northern Europe, and Newfoundland, Canada.
Most cases of juvenile Batten disease are caused by mutations in
the CLN3 gene, which is the focus of our AAV-based gene therapy approach. These mutations disrupt the function of cellular structures
called lysosomes. Lysosomes are compartments in the cell that normally digest and recycle different types of molecules. Lysosome
malfunction leads to a buildup of fatty substances called lipopigments and proteins within these cell structures. These accumulations
occur in cells throughout the body, but neurons in the brain seem to be particularly vulnerable to damage. The progressive death
of cells, especially in the brain, leads to vision loss, seizures, and intellectual decline in children with juvenile Batten disease.
ABO-301 for Fanconi Anemia (FA)
ABO-301 (AAV LK19 FANCC) is an AAV-based gene therapy which has
shown promising preclinical efficacy in delivery of a normal copy of the defective gene to cells of the hematopoietic or blood
system with the aim of reversing the effects of the genetic errors that cause juvenile Batten disease. Fanconi anemia (FA) is a
rare (1 in 160,000) pediatric, autosomal recessive (inherited) disease characterized by multiple physical abnormalities, organ
defects, bone marrow failure, and a higher than normal risk of cancer. The average lifespan for people with FA is 20 to 30 years.
The major function of bone marrow is to produce new blood cells.
In FA, a DNA mutation renders the FANCC gene nonfunctional. Loss of FANCC causes patient skeletal abnormalities and leads to bone
marrow failure. Fanconi Anemia patients also have much higher rates of hematological diseases, such as acute myeloid leukemia (AML)
or tumors of the head, neck, skin, gastrointestinal system, or genital tract. The likelihood of developing one of these cancers
in people with Fanconi anemia is between 10 and 30 percent. Aside from bone marrow transplantation (BMT) there are no specific
treatments known that can halt or reverse the symptoms of FA. Reparing fibroblast cells in FA patients with a functional FANCC
gene is the focus of our AAV-based gene therapy approach.
Using a novel CRISPR (clustered, regularly interspaced short palindromic
repeats)-Cas9 (CRISPR associated protein 9) system, researchers used a protein-RNA complex composed of an enzyme known as Cas9
bound to a guide RNA molecule that has been designed to recognize a particular DNA sequence. The RNA molecules guide the Cas9 complex
to the location in the genome that requires repair. CRISPR-Cas9 uniquely enables surgically efficient knock-out, knock-down or
selective editing of defective genes in the context of their natural promoters, unlocking the potential to treat both recessive
and dominant forms of genetic diseases. Most importantly, this approach has the potential to allow more precise gene modification.
Plasma-based Therapeutics using the SDF™ technology platform
Abeona’s proprietary Salt Diafiltration Process™ (SDF)
focuses on ethanol-free extraction of therapeutic biologics from human plasma. Plasma biologics are biopharmaceutical proteins
extracted, purified, and formulated from human blood plasma by the use of biotechnological processing techniques including precipitation,
diafiltration, affinity chromatography, and ion-exchange chromatography. These products are rendered virus-safe by means of chemical
treatment, nanofiltration, and pasteurization. Plasma biologics primarily address indications arising from genetic deficiencies,
which are increasingly being identified by means of newly available rapid and low-cost diagnostic genetic tests. Examples of plasma
biologics include Alpha-1 Antitrypsin (also known as alpha-1 proteinase inhibitor, A1PI), Intravenous Immune Globulin (IVIG), Anti-Hemophilic
Factor VIII (AHF) and Albumin.
Plasma biologics are currently obtained from human plasma by a fractionation
process known as the Cohn Cold Ethanol Fractionation Process (Cohn Process), which was developed prior to World War II to provide
a stable solution of human albumin for the rapid treatment of hemorrhagic shock on the battlefield. This process employs various
concentrations of ethanol combined with adjustments of pH, ionic strength, and temperature to bring about the necessary separations
by precipitation. Ethanol can inactivate many of the plasma proteins.
In contrast to the highly denaturing Cohn process, Abeona’s
patented SDF™ method involves a short two-step, ethanol-free salt precipitation process optimized to extract a wide range
of therapeutically useful biologic proteins from human blood plasma. SDF™ enables the production of unusually high yields
of these proteins compared with the Cohn process.
PTB-101 SDF Alpha™ (alpha-1
protease inhibitor) for emphysema or chronic obstructive pulmonary disease (COPD) due
to severe congenital deficiency of A1PI (alpha1-antitrypsin deficiency)
Alpha-1 antitrypsin deficiency is a rare (1 in 1,500 to 3,500) genetic
(inherited) autosomal disorder that may cause lung disease from an inability to neutralize the enzyme neutrophil elastase and liver
disease from retained misfolded protein. Alpha-1 antitrypsin deficiency occurs worldwide, but its prevalence varies by population.
Alpha-1 Antitrypsin is also known as alpha-1 proteinase inhibitor (A1PI).
About 10 percent of infants with alpha-1 antitrypsin deficiency
develop liver disease, which often causes yellowing of the skin and whites of the eyes (jaundice). Approximately 15 percent of
adults with alpha-1 antitrypsin deficiency develop liver damage (cirrhosis) due to the formation of scar tissue in the liver. Signs
of cirrhosis include a swollen abdomen, swollen feet or legs, and jaundice. Individuals with alpha-1 antitrypsin deficiency are
also at risk of developing a type of liver cancer called hepatocellular carcinoma.
Alpha-1 antitrypsin deficiency is inherited with an autosomal codominant
pattern, which means that two different versions of the gene may be active (expressed), and both versions contribute to the genetic
trait. The most common version (allele) of the SERPINA1 gene, called M, produces normal levels of alpha-1 antitrypsin. Most people
in the general population have two copies of the M allele (MM) in each cell. Other versions of the SERPINA1 gene lead to reduced
levels of alpha-1 antitrypsin. For example, the S allele produces moderately low levels of this protein, and the Z allele produces
very little alpha-1 antitrypsin. Individuals with two copies of the Z allele (ZZ) in each cell are likely to have alpha-1 antitrypsin
deficiency. Those with the SZ combination have an increased risk of developing liver and lung diseases such as chronic obstructive
pulmonary disease (COPD).
It is estimated that about 200,000 individuals in the United States
and Europe, have severe alpha-1 antitrypsin deficiency. However, only about 5% of this number have been diagnosed as symptoms
caused by this deficiency are very similar to asthma and chronic obstructive pulmonary disease (COPD) from non-genetic causes.
Only about 1–2% of COPD patients have severe alpha-1 antitrypsin deficiency. The Global Initiative for Chronic Obstructive
Lung Disease (GOLD) defines COPD as group of airflow-limited diseases including emphysema and chronic bronchitis. While severe alpha-1
antitrypsin deficiency can lead to or exacerbate all forms of COPD, it is considered to be the dominant cause of Panacinar
Emphysema, a form of emphysema which causes gradual destruction of all lung aveolii.
PTB-101 SDF Alpha™ (alpha1-proteinase inhibitor) for
Alpha-1 Antitrypsin Deficiency (Alpha-1)
Abeona is developing PTB-101 SDF Alpha™ (alpha1-proteinase
inhibitor) for chronic augmentation and maintenance therapy in adults with clinically evident panacinar emphysema and other forms
of COPD due to severe deficiency of alpha1-proteinase inhibitor.
Polymer Hydrogel Technology (PHT™)
MuGard® (mucoadhesive oral wound rinse) approved
for mucositis, stomatitis, aphthous ulcers, and traumatic ulcers
MuGard® is our marketed product for the management
of oral mucositis, a frequent side-effect of cancer therapy for which there is no other established treatment. MuGard, a proprietary
nanopolymer formulation, has received marketing clearance from the FDA in the US as well as Europe, China, Australia, New Zealand
and Korea. We launched MuGard in the U.S. in 2010 and was licensed to AMAG Pharmaceuticals, Inc. in 2013. We licensed MuGard to
RHEI Pharmaceuticals, N.V. (“RHEI”) for China and other Southeast Asian countries in 2010; Hanmi Pharmaceutical Co.
Ltd. (“Hanmi”) for South Korea in 2014; and Norgine B.V. (“Norgine”) for the European Union, Switzerland,
Norway, Iceland, Lichtenstein, Australia and New Zealand in 2014.
ProctiGard™ (mucoadhesive oral wound rinse) approved
for rectal mucositis and radiation proctitis
ProctiGard™ received 510(K) marketing clearance from the FDA
on July 22, 2014 for the treatment of symptomatic management of rectal mucositis. ProctiGard is our product for the treatment of
radiation proctitis, a frequent side effect of radiation treatment to the pelvic region. Radiation proctitis, or RP, is the inflammation
and damage to the lower portion of the colon after exposure to x-rays or ionizing radiation as part of radiation therapy. RP is
most common after treatments for cancer, such as cervical, colon and prostate cancer. RP can be acute, occurring within weeks of
initiation of therapy, or can occur months or years after treatment. We intend to commercialize ProctiGard in a manner similar
to the commercialization of MuGard, which may include confirmatory clinical trials, with the objective of commercialization in
collaboration with marketing partners globally.
We were incorporated in Wyoming in 1974 as Chemex Corporation, and
in 1983 we changed our name to Chemex Pharmaceuticals, Inc. We changed our state of incorporation from Wyoming to Delaware on June
30, 1989. In 1996 we merged with Access Pharmaceuticals, Inc., a private Texas corporation, and changed our name to Access Pharmaceuticals,
Inc. On October 24, 2014 we changed our name from Access Pharmaceuticals, Inc. to PlasmaTech Biopharmaceuticals, Inc. On June 19,
2015 we changed our name from PlasmaTech Biopharmaceuticals, Inc. to Abeona Therapeutics Inc.
RISK FACTORS
An investment in our securities involves risks.
We urge you to consider carefully the risks described below, and in the documents incorporated by reference in this prospectus
and, if applicable, in any prospectus supplement used in connection with an offering of our securities, before making an investment
decision, including those risks identified under “Item IA. Risk Factors” in our Annual Report on Form 10-K for
the year ended December 31, 2014, which is incorporated by reference in this prospectus and which may be amended, supplemented
or superseded from time to time by other reports that we subsequently file with the SEC. Additional risks, including those that
relate to any particular securities we offer, may be included in a prospectus supplement or free writing prospectus that we authorize
from time to time, or that are incorporated by reference into this prospectus or a prospectus supplement.
Risks related to the discovery and development of our product
candidates
Our gene therapy product candidates are based on a novel technology,
which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval.
At the moment, no gene therapy products have been approved in the United States and only one product has been approved in the European
Union (EU).
We have concentrated our therapeutic product
research and development efforts on our gene therapy platform, and our future success depends on the successful development of
this therapeutic approach. There can be no assurance that any development problems we experience in the future related to our gene
therapy platform will not cause significant delays or unanticipated costs, or that such development problems can be solved. We
may also experience delays in developing a sustainable, reproducible and commercial-scale manufacturing process or transferring
that process to commercial partners, which may prevent us from completing our clinical studies or commercializing our products
on a timely or profitable basis, if at all.
In addition, the clinical study requirements
of the FDA, the European Medicines Agency (EMA) and other regulatory agencies and the criteria these regulators use to determine
the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and
market of the potential products. The regulatory approval process for novel product candidates such as ours can be more expensive
and take longer than for other, better known or extensively studied pharmaceutical or other product candidates. At the moment,
only one gene therapy product, UniQure’s Glybera, which received marketing authorization in the EU in 2012, has been approved
in the Western world, which makes it difficult to determine how long it will take or how much it will cost to obtain regulatory
approvals for our product candidates in the United States, the EU or other jurisdictions. Approvals by the EMA and the European
Commission may not be indicative of what the FDA may require for approval.
Regulatory requirements governing gene and
cell therapy products have evolved and may continue to change in the future. For example, the FDA has established the Office of
Cellular, Tissue and Gene Therapies within its Center for Biologics Evaluation and Research, or CBER, to consolidate the review
of gene therapy and related products, and the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its review.
Gene therapy clinical studies conducted at institutions that receive funding for recombinant DNA research from the U.S. National
Institutes of Health, or the NIH, are also subject to review by the NIH Office of Biotechnology Activities’ Recombinant DNA
Advisory Committee, or the RAC. Although the FDA decides whether individual gene therapy protocols may proceed, the RAC review
process can impede the initiation of a clinical study, even if the FDA has reviewed the study and approved its initiation. Conversely,
the FDA can put an investigational new drug application, or IND, on clinical hold even if the RAC has provided a favorable review.
Also, before a clinical study can begin at an NIH-funded institution, that institution’s institutional review board, or IRB,
and its Institutional Biosafety Committee will have to review the proposed clinical study to assess the safety of the study. In
addition, serious adverse events or developments in clinical trials of gene therapy product candidates conducted by others may
cause the FDA or other regulatory bodies to initiate a clinical hold on our clinical trials or otherwise change the requirements
for approval of any of our product candidates.
These regulatory review agencies, committees
and advisory groups and the new requirements and guidelines they promulgate may lengthen the regulatory review process, require
us to perform additional studies, increase our development costs, lead to changes in regulatory positions and interpretations,
delay or prevent approval and commercialization of these treatment candidates or lead to significant post-approval limitations
or restrictions. As we advance our product candidates, we will be required to consult with these regulatory and advisory groups
and comply with applicable requirements and guidelines. If we fail to do so, we may be required to delay or discontinue development
of our product candidates. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring
a potential product to market could decrease our ability to generate sufficient product revenue to maintain our business.
We may find it difficult to enroll patients in our clinical studies,
which could delay or prevent clinical studies of our product candidates.
Identifying and qualifying patients to
participate in clinical studies of our product candidates is critical to our success. The timing of our clinical studies
depends on the speed at which we can recruit patients to participate in testing our product candidates. In our experience, we
have experienced delays in some of our upcoming clinical studies, and we may experience similar delays in the future. If
patients are unwilling to participate in our gene therapy studies because of negative publicity from adverse events in
the biotechnology or gene therapy industries or for other reasons, including competitive clinical studies for similar
patient populations, the timeline for recruiting patients, conducting studies and obtaining regulatory approval of potential
products may be delayed. These delays could result in increased costs, delays in advancing our product development, delays in
testing the effectiveness of our technology or termination of the clinical studies altogether.
We may not be able to identify, recruit and
enroll a sufficient number of patients, or those with required or desired characteristics to achieve diversity in a study, to complete
our clinical studies in a timely manner. Patient enrollment is affected by factors including:
| · | severity of the disease under investigation; |
| · | design of the study protocol; |
| |
· |
number of patients in the eligible patient population; |
| |
· |
weight of the eligible patient population, since our gene
therapies are dosed per/kg; |
| |
· |
amount of drug available during a particular year; |
| · | eligibility criteria for the study in question; |
| · | perceived risks and benefits of the product candidate under study; |
| · | proximity and availability of clinical study sites for prospective patients; |
| · | availability of competing therapies and clinical studies; |
| · | efforts to facilitate timely enrollment in clinical studies; |
| · | patient referral practices of physicians; |
| · | judegment and decisions of the clinical site investigators;
|
| · | clinical site institutional review board review and judegment; and
|
| · | ability to monitor patients adequately during and after treatment. |
In particular, each of the conditions
for which we plan to evaluate our current gene therapy product candidates are rare genetic disorders with limited patient
pools from which to draw for clinical studies. The eligibility criteria of our gene therapy clinical studies will further
limit the pool of available study participants. Additionally, the process of finding and diagnosing patients may prove
costly.
Certain of current product candidates
are being developed to treat rare conditions. We plan to seek initial marketing approval in the United States and the
European Union, and may have clinical studies in Australia, South America and Japan. We may not be able to initiate or
continue clinical studies if we cannot enroll a sufficient number of eligible patients to participate in the clinical studies
required by the FDA or the EMA or other regulatory agencies. Our ability to successfully initiate, enroll and complete a
clinical study in any foreign country is subject to numerous risks unique to conducting business in foreign countries,
including:
| · | difficulty in establishing or managing relationships with contract research organizations, or CROs, and physicians; |
| · | different standards for the conduct of clinical studies; |
| · | our inability to locate qualified local consultants, physicians and partners; and |
| · | the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including
the regulation of pharmaceutical and biotechnology products and treatment. |
In addition, our
clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our
product candidates, and this competition will reduce the number and types of patients available to us, because some patients
who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.
Because the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the
same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for
our clinical trials at such clinical trial sites. Moreover, because our product candidates represent a departure from more
commonly used methods for rare disease and/or cancer treatment, potential patients and their doctors may be inclined to use
conventional therapies, such as chemotherapy and hematopoietic cell transplantation, rather than enroll patients in any
future clinical trial.
If we have difficulty enrolling a sufficient
number of patients to conduct our clinical studies as planned, we may need to delay, limit or terminate ongoing or planned clinical
studies, any of which would have an adverse effect on our business. Even if we are able to enroll a sufficient number of patients
in our clinical trials, delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned
clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of
our product candidates.
We may encounter substantial delays in our clinical studies or
we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.
Before obtaining marketing approval from
regulatory authorities for the sale of our product candidates, we must conduct extensive clinical studies to demonstrate the
safety, purity and potency, or efficacy, of the product candidates in humans. Clinical testing is expensive, time-consuming
and uncertain as to outcome. We cannot guarantee that any clinical studies will be conducted as planned or completed on
schedule, if at all. A failure of one or more clinical studies can occur at any stage of testing, and that failure may effect
the progress of similar programs. Events that may prevent successful or timely completion of clinical development include:
| · | delays in reaching a consensus with regulatory agencies on study design; |
| · | delays in obtaining required Institutional Review Board, or IRB, or Institutional Ethics Committee approval at each clinical
study site; |
| · | delays in recruiting suitable patients to participate in our clinical studies; |
| · | imposition of a clinical hold by regulatory agencies, after an inspection of our clinical study operations or study sites or
due to unforeseen safety issues; |
| · | failure by our CROs, other third parties or us to adhere to clinical study requirements; |
| · | failure to perform in accordance with the FDA’s good clinical practices, or GCP, or applicable regulatory requirements
in other countries; |
| · | delays in the testing, validation, manufacturing and delivery of our product candidates to the clinical sites; |
| · | failure to obtain sufficient drug product during manufacture to achieve target doses; |
| · | delays in having patients complete participation in a study or return for post-treatment follow-up; |
| · | clinical study sites or patients dropping out of a study; |
| · | occurrence of serious adverse events associated with the product candidate that are viewed to outweigh its potential benefits;
or |
| · | changes in regulatory requirements and guidance that require amending or submitting new clinical protocols. |
Any inability to successfully complete preclinical
and clinical development could result in additional costs to us or impair our ability to generate revenues from product sales,
regulatory and commercialization milestones and royalties. In addition, if we make manufacturing or formulation changes to our
product candidates, we may need to conduct additional studies to demonstrate comparability of our modified product candidates to
earlier versions. Clinical study delays could also shorten any periods during which we may have the exclusive right to commercialize
our product candidates or allow our competitors to bring products to market before we do, which could impair our ability to successfully
commercialize our product candidates and may harm our business and results of operations.
If the results of our clinical studies are
inconclusive or if there are safety concerns or adverse events associated with our product candidates, we may:
| · | be delayed in obtaining regulatory approval for our product candidates, if at all; |
| · | obtain approval for indications or patient populations that are not as broad as intended or desired; |
| · | obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; |
| · | be required to perform additional clinical studies or clinical studies of longer duration to support approval or be subject
to additional |
| · | have regulatory authorities withdraw their approval of the product or impose restrictions on its use; |
| · | be subject to the addition of labeling statements, such as warnings or contraindications; |
| · | experience damage to our reputation. |
Treatment with our gene therapy product
candidates involves gene infusion, muscle and nerve studies and radiology studies,
which can cause side effects or adverse events that are unrelated to our product candidate, but may still impact the
success of our clinical studies. Additionally, our product candidates could potentially cause other adverse events that have
not yet been predicted. The inclusion of critically ill patients in our clinical studies may result in deaths or other
adverse medical events due to other therapies or medications that such patients may be using. As described above, any of
these events could prevent us from achieving or maintaining market acceptance of our product candidates and impair our
ability to commercialize our products.
We have not completed any clinical studies of our
current viral vectors or product candidates derived from these viral vectors or gene editing strategies. Success in early clinical
studies may not be indicative of results obtained in later studies.
We have not initiated evaluation in human clinical studies of our current viral vectors and our
product candidates, and we may experience unexpected results
in the future. Earlier gene therapy clinical studies, which we believe serve as proof-of-concept for our product
candidates, utilized lentiviral or adenoviral vectors similar to ours. However, these studies should not be relied upon as
evidence that our future clinical studies will succeed. Study designs and results from previous studies are not necessarily
predictive of our future clinical study designs or results, and initial results may not be confirmed upon full analysis of
the complete study data. Our product candidates may also fail to show the desired safety and efficacy in later stages of
clinical development despite having successfully advanced through initial clinical studies.
There is a high failure rate for drugs and
biologics proceeding through clinical studies. A number of companies in the pharmaceutical and biotechnology industries have suffered
significant setbacks in later stage clinical studies even after achieving promising results in earlier stage clinical studies.
Data obtained from preclinical and clinical activities are subject to varying interpretations, which may delay, limit or prevent
regulatory approval. In addition, regulatory delays or rejections may be encountered as a result of many factors, including changes
in regulatory policy during the period of product development.
Negative public opinion and increased
regulatory scrutiny of gene therapy and genetic research may damage public perception of our gene therapies and our product
candidates or adversely affect our ability to conduct our business or obtain further marketing approvals for our gene
therapies and marketing approvals for our product candidates.
Public perception may be influenced by
claims that gene therapy is unsafe, and gene therapy may not gain the acceptance of the public or the medical community. In particular,
our success will depend upon physicians specializing in the treatment of those diseases that our product candidates target prescribing
treatments that involve the use of our product candidates in lieu of, or in addition to, existing symptomatic treatments they are
already familiar with and for which greater clinical data may be available.
More restrictive government regulations
or negative public opinion would have a negative effect on our business or financial condition and may delay or impair the development
and commercialization of our product candidates or demand for any products we may develop. For example, in 2003, trials using early
versions of murine gamma-retroviral vectors, which integrate with, and thereby alter, the host cell’s DNA, have led to several
well-publicized adverse events, including reported cases of leukemia. Although none of our current product candidates utilize murine
gamma-retroviral vectors, our product candidates use a viral delivery system. Adverse events in our clinical trials, even if not
ultimately attributable to our product candidates, and the resulting publicity could result in increased governmental regulation,
unfavorable public perception, potential regulatory delays in the testing or approval of our product candidates, stricter labeling
requirements for those product candidates that are approved and a decrease in demand for any such product candidates. Although
none of our current product candidates utilize the gamma-retroviruses used in the 2003 studies, our product candidates do use a
viral vector delivery system. The risk of cancer remains a concern for gene therapy and we cannot assure that it will not occur
in any of our planned or future clinical studies. In addition, there is the potential risk of delayed adverse events following
exposure to gene therapy products due to persistent biological activity of the genetic material or other components of products
used to carry the genetic material.
Adverse events in our clinical trials or
those conducted by other parties, even if not ultimately attributable to our product candidates, and the resulting publicity could
result in increased governmental regulation, unfavorable public perception, potential regulatory delays in the testing or approval
of our potential product candidates, stricter labeling requirements for those product candidates that are approved and a decrease
in demand for any such product candidates. If any such adverse events occur, commercialization of AAV-based gene therapies or further
advancement of our clinical trials could be halted or delayed, which would have a material adverse effect on our business and operations.
In previous clinical studies involving viral vectors for
gene therapy, some subjects experienced serious adverse events, including the development of leukemia due to vector-related
insertional oncogenesis. Other clinical trials have demonstrated significant immune responses or adverse events
related to over-production of the transgene after injection of the viral vector. If our vectors demonstrate a similar effect,
we may be required to halt or delay further clinical development of our product candidates.
A significant risk in any gene therapy product
based on viral vectors is that the vector will insert in or near cancer-causing oncogenes leading to uncontrolled clonal proliferation
of mature cancer cells in the patient. For example, in 2003, 20 subjects treated for X-linked severe combined immunodeficiency
in two gene therapy studies using a murine, or mouse-derived, gamma-retroviral vector showed correction of the disease, but the
studies were terminated after five subjects developed leukemia (four of whom were subsequently cured). The cause of these adverse
events was shown to be insertional oncogenesis, which is the process whereby the corrected gene inserts in or near a gene that
is important in a critical cellular process like growth or division, and this insertion results in the development of a cancer
(often leukemia). Using molecular diagnostic techniques, it was determined that clones from these subjects showed retrovirus insertion
in proximity to the promoter of the LMO2 proto-oncogene. Earlier generation retroviruses like the one used in these two studies
have been shown to preferentially integrate in regulatory regions of genes that control cell growth.
These well-publicized adverse events
led to the development of new viral vectors, such as lentiviral and adeno-associated virus (AAV) vectors, with improved
safety profiles and also the requirement of enhanced safety monitoring in gene therapy clinical trials, including periodic
analyses of the therapy’s genetic insertion sites. In published studies, lentiviral vectors have demonstrated an
improved safety profile over gamma-retroviral vectors, with no disclosed events of gene therapy-related adverse events, which
we believe is due to a number of factors including the tendency of these vectors to integrate within genes rather than in
areas that control gene expression, as well as their lack of strong viral enhancers.
Notwithstanding the historical data regarding
the potential safety improvements of lentiviral vectors, the risk of insertional oncogenesis remains a significant concern for
gene therapy and we cannot assure that it will not occur in any of our ongoing or planned clinical studies. There is also the potential
risk of delayed adverse events following exposure to gene therapy products due to persistent biological activity of the genetic
material or other components of products used to carry the genetic material. The FDA has stated that lentiviral vectors possess
characteristics that may pose high risks of delayed adverse events. If any such adverse events occur, further advancement of our
clinical studies could be halted or delayed, which would have a material adverse effect on our business and operations.
Even if we complete the necessary preclinical and clinical studies,
we cannot predict when or if we will obtain regulatory approval to commercialize a product candidate or the approval may be for
a more narrow indication than we expect.
We cannot commercialize a product until the
appropriate regulatory authorities have reviewed and approved the product candidate. Even if our product candidates demonstrate
safety and efficacy in clinical studies, the regulatory agencies may not complete their review processes in a timely manner, or
we may not be able to obtain regulatory approval. Additional delays may result if an FDA Advisory Committee or other regulatory
advisory group or authority recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections
based upon additional government regulation from future legislation or administrative action, or changes in regulatory agency policy
during the period of product development, clinical studies and the review process. Regulatory agencies also may approve a treatment
candidate for fewer or more limited indications than requested or may grant approval subject to the performance of post-marketing
studies. In addition, regulatory agencies may not approve the labeling claims that are necessary or desirable for the successful
commercialization of our treatment candidates.
Even if we obtain regulatory approval for a product candidate,
our products will remain subject to regulatory scrutiny.
Even if we obtain regulatory approval in a
jurisdiction, the regulatory authority may still impose significant restrictions on the indicated uses or marketing of our product
candidates, or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance. For example,
the FDA typically advises that patients treated with gene therapy undergo follow-up observations for potential adverse events for
a 15-year period. Additionally, the holder of an approved biologics license application, or BLA, is obligated to monitor and report
adverse events and any failure of a product to meet the specifications in the BLA. The holder of an approved BLA must also submit
new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing
process. Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other
potentially applicable federal and state laws.
In addition, product manufacturers and their
facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities
for compliance with good manufacturing practices, or GMP, and adherence to commitments made in the BLA. If we or a regulatory agency
discovers previously unknown problems with a product such as adverse events of unanticipated severity or frequency, or problems
with the facility where the product is manufactured, a regulatory agency may impose restrictions relative to that product or the
manufacturing facility, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.
If we fail to comply with applicable regulatory
requirements following approval of any of our product candidates, a regulatory agency may:
| · | issue a warning letter asserting that we are in violation of the law; |
| · | seek an injunction or impose civil or criminal penalties or monetary fines; |
| · | suspend or withdraw regulatory approval; |
| · | suspend any ongoing clinical studies; |
| · | refuse to approve a pending marketing application, such as a BLA or supplements to a BLA submitted by us; |
| · | refuse to allow us to enter into supply contracts, including government contracts. |
Any government investigation of alleged violations
of law could require us to expend significant time and resources in response and could generate negative publicity. The occurrence
of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenues.
Risks related to our reliance on third parties
We expect to rely on third parties to conduct some or all aspects
of our vector production, drug product manufacturing, research and preclinical and clinical testing, and these third parties may
not perform satisfactorily.
We do not expect to independently conduct
all aspects of our vector production, product manufacturing, research and preclinical and clinical testing, monitoring and data-analysis. We currently
rely, and expect to continue to rely, on third parties with respect to these items. In some cases these third parties are
academic, research or similar institutions that may not apply the same quality control protocols utilized in certain
commercial settings.
Our reliance on these third parties for research
and development activities will reduce our control over these activities but will not relieve us of our responsibility to ensure
compliance with all required regulations and study protocols. For example, for product candidates that we develop and commercialize
on our own, we will remain responsible for ensuring that each of our IND-enabling studies and clinical studies are conducted in
accordance with the study plan and protocols.
If these third parties do not successfully
carry out their contractual duties, meet expected deadlines or conduct our studies in accordance with regulatory requirements or
our stated study plans and protocols, we will not be able to complete, or may be delayed in completing, the preclinical and clinical
studies required to support future IND and BLA submissions and approval of our product candidates.
Any of these third parties may terminate their
engagements with us at any time. If we need to enter into alternative arrangements, it could delay our product development activities.
Reliance on third-party manufacturers entails
risks to which we would not be subject if we manufactured the product candidates ourselves, including:
| · | the inability to negotiate manufacturing agreements with third parties under commercially reasonable terms; |
| · | reduced control as a result of using third-party manufacturers for all aspects of manufacturing activities; |
| · | the risk that these activities are not conducted in accordance with our study plans and protocols; |
| · | termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging
to us; |
| · | disruptions to the operations of our third-party manufacturers or suppliers caused by conditions unrelated to our business
or operations, including the bankruptcy of the manufacturer or supplier, and |
| · | FDA inspection of company manufacturing facilities that result in a clinical hold and/or revision of company
manufacturing practices.
|
Any of these events could lead to clinical
study delays or failure to obtain regulatory approval, or impact our ability to successfully commercialize future products. Some
of these events could be the basis for FDA action, including injunction, recall, seizure or total or partial suspension of production.
Gene- and cell-based therapies
rely on the availability of reagents, specialized equipment, and other specialty materials, which may not be available to
us on acceptable terms or at all. For some of these reagents, equipment, and materials, we rely or may rely on sole
source vendors or a limited number of vendors, which could impair our ability to manufacture and supply our products.
Manufacturing our product
candidates will require many reagents, which are substances used in our manufacturing processes to bring about chemical or biological
reactions, and other specialty materials and equipment, some of which are manufactured or supplied by small companies with limited
resources and experience to support commercial biologics production. We currently depend on a limited number of vendors for certain
materials and equipment used in the manufacture of our product candidates. Some of these suppliers may not have the capacity to
support commercial products manufactured under cGMP by biopharmaceutical firms or may otherwise be ill-equipped to support our
needs. We also do not have supply contracts with many of these suppliers and may not be able to obtain supply contracts with them
on acceptable terms or at all. Accordingly, we may experience delays in receiving key materials and equipment to support clinical
or commercial manufacturing.
For some of these reagents,
equipment, and materials, we rely and may in the future rely on sole source vendors or a limited number of vendors. An inability
to continue to source product from any of these suppliers, which could be due to regulatory actions or requirements affecting the
supplier, adverse financial or other strategic developments experienced by a supplier, labor disputes or shortages, unexpected
demands, or quality issues, could adversely affect our ability to satisfy demand for our product candidates, which could adversely
and materially affect our product sales and operating results or our ability to conduct clinical trials, either of which could
significantly harm our business.
As we continue to develop
and scale our manufacturing process, we expect that we will need to obtain rights to and supplies of certain materials and equipment
to be used as part of that process. We may not be able to obtain rights to such materials on commercially reasonable terms, or
at all, and if we are unable to alter our process in a commercially viable manner to avoid the use of such materials or find a
suitable substitute, it would have a material adverse effect on our business. Even if we are able to alter our process so as to
use other materials or equipment, such a change may lead to a delay in our clinical development and/or commercialization plans.
If such a change occurs for a product candidate that is already in clinical testing, the change may require us to perform both ex
vivo comparability studies and to collect additional data from patients prior to undertaking more advanced clinical trials.
We and our contract manufacturers are subject to significant
regulation with respect to manufacturing our products. The manufacturing facilities on which we rely may not continue to meet regulatory
requirements and have limited capacity.
We currently have relationships with a limited
number of suppliers for the manufacturing of our viral vectors and product candidates. Each supplier may require licenses to manufacture
such components if such processes are not owned by the supplier or in the public domain and we may be unable to transfer or sublicense
the intellectual property rights we may have with respect to such activities.
All entities involved in the preparation of
therapeutics for clinical studies or commercial sale, including our existing contract manufacturers for our product candidates,
are subject to extensive regulation. Some components of a finished therapeutic product approved for commercial sale or used in
late-stage clinical studies must be manufactured in accordance with good manufacturing practice, or GMP. These regulations govern
manufacturing processes and procedures (including record keeping) and the implementation and operation of quality systems to control
and assure the quality of investigational products and products approved for sale. Poor control of production processes can lead
to the introduction of adventitious agents or other contaminants, or to inadvertent changes in the properties or stability of our
product candidates that may not be detectable in final product testing. We or our contract manufacturers must supply all necessary
documentation in support of a BLA or marketing authorization application, or MAA, on a timely basis and where required, must adhere
to the FDA’s or other regulator’s good laboratory practices, or GLP, and GMP regulations enforced by the FDA or other
regulator through facilities inspection programs. Some of our contract manufacturers have not produced a commercially-approved
product and therefore have not obtained the requisite FDA or other regulatory approvals to do so. Our facilities and quality systems
and the facilities and quality systems of some or all of our third-party contractors must pass a pre-approval inspection for compliance
with the applicable regulations as a condition of regulatory approval of our product candidates or any of our other potential products.
In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the preparation
of our product candidates or our other potential products or the associated quality systems for compliance with the regulations
applicable to the activities being conducted. If these facilities do not pass a pre-approval plant inspection, FDA or other regulatory
approval of the products will not be granted.
The regulatory authorities also may, at any
time following approval of a product for sale, audit the manufacturing facilities of our third-party contractors. If any such inspection
or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable
regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may require remedial measures
that may be costly and/or time-consuming for us or a third party to implement and that may include the temporary or permanent suspension
of a clinical study or commercial sales or the temporary or permanent closure of a facility. Any such remedial measures imposed
upon us or third parties with whom we contract could materially harm our business.
If we or any of our third-party manufacturers
fail to maintain regulatory compliance, the FDA or other regulators can impose regulatory sanctions including, among other things,
refusal to approve a pending application for a biologic product, or revocation of a pre-existing approval. As a result, our business,
financial condition and results of operations may be materially harmed.
Additionally, if supply from one approved manufacturer
is interrupted, there could be a significant disruption in commercial supply. The number of manufacturers with the necessary manufacturing
capabilities is limited. In addition, an alternative manufacturer would need to be qualified through a BLA supplement or similar
regulatory submission which could result in further delay. The regulatory agencies may also require additional studies if a new
manufacturer is relied upon for commercial production. Switching manufacturers may involve substantial costs and is likely to result
in a delay in our desired clinical and commercial timelines.
These factors could cause the delay of clinical
studies, regulatory submissions, required approvals or commercialization of our product candidates, cause us to incur higher costs
and prevent us from commercializing our products successfully. Furthermore, if our suppliers fail to meet contractual requirements,
and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical
studies may be delayed or we could lose potential revenue.
We expect to rely on third parties to conduct, supervise and
monitor our clinical studies, and if these third parties perform in an unsatisfactory manner, it may harm our business.
We expect to rely on CROs and clinical study
sites to ensure our clinical studies are conducted properly and on time. While we will have agreements governing their activities,
we will have limited influence over their actual performance. We will control only certain aspects of our CROs’ activities.
Nevertheless, we will be responsible for ensuring that each of our clinical studies is conducted in accordance with the applicable
protocol, legal, regulatory and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities.
We and our CROs are required to comply with
the FDA’s good clinical practices, or GCPs, for conducting, recording and reporting the results of clinical studies to assure
that the data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical study
participants are protected. The FDA enforces these GCPs through periodic inspections of study sponsors, principal investigators
and clinical study sites. If we or our CROs fail to comply with applicable GCPs, the clinical data generated in our future clinical
studies may be deemed unreliable and the FDA may require us to perform additional clinical studies before approving any marketing
applications. Upon inspection, the FDA may determine that our clinical studies did not comply with GCPs. In addition, our future
clinical studies will require a sufficient number of test subjects to evaluate the safety and efficacy of our product candidates.
Accordingly, if our CROs fail to comply with these regulations or fail to recruit a sufficient number of patients, we may be required
to repeat such clinical studies, which would delay the regulatory approval process.
Employees of our CROs are not our employees,
and we are therefore unable to directly monitor whether or not they devote sufficient time and resources to our clinical and nonclinical
programs, which must be conducted in accordance with GCPs and good laboratory practices, or GLPs, respectively. These CROs may
also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical
studies or other drug development activities that could harm our competitive position. If our CROs do not successfully carry out
their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they
obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements, or for any other reasons,
our clinical studies may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully
commercialize our product candidates. As a result, our financial results and the commercial prospects for our product candidates
would be harmed, our costs could increase, and our ability to generate revenues could be delayed.
We also expect to rely on other third parties
to store and distribute our vectors and products for any clinical studies that we may conduct. Any performance failure on the part
of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our
products, if approved, producing additional losses and depriving us of potential product revenue.
Our reliance on third parties requires us to share our trade
secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated
or disclosed.
Because we rely on third parties to manufacture
our vectors and our product candidates, and because we collaborate with various organizations and academic institutions on the
advancement of our gene therapy platform, we must, at times, share trade secrets with them. We seek to protect our proprietary
technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative
research agreements, consulting agreements or other similar agreements with our collaborators, advisors, employees and consultants
prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties
to use or disclose our confidential information, such as trade secrets. Despite the contractual provisions employed when working
with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets
become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation
of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s
discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material
adverse effect on our business.
In addition, these agreements typically restrict
the ability of our collaborators, advisors, employees and consultants to publish data potentially relating to our trade secrets.
Our academic collaborators typically have rights to publish data, provided that we are notified in advance and may delay publication
for a specified time in order to secure our intellectual property rights arising from the collaboration. In other cases, publication
rights are controlled exclusively by us, although in some cases we may share these rights with other parties. We also conduct joint
research and development programs that may require us to share trade secrets under the terms of our research and development partnerships
or similar agreements. Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either
through breach of these agreements, independent development or publication of information including our trade secrets in cases
where we do not have proprietary or otherwise protected rights at the time of publication. A competitor’s discovery of our
trade secrets would impair our competitive position and have an adverse impact on our business.
Risks Relating to our Business
and Industry
We have experienced a history of losses,
we expect to incur future losses and we may be unable to obtain necessary additional capital to fund operations in the future.
We have recorded minimal revenue to date and
have incurred an accumulated deficit of approximately $296.1 million through December 31, 2014 and $266.4 million through December
31, 2013. Net loss allocable to common stockholders for the year ended December 31, 2014 was $29.7 million and the net income for
the year ended December 31, 2013 was $1.5 million. Our losses have resulted principally from costs incurred in research and development
activities related to our efforts to develop clinical drug candidates and from the associated administrative costs. We expect to
incur additional operating losses over the next several years. We also expect cumulative losses to increase if we expand research
and development efforts and preclinical and clinical trials.
We require substantial capital for our development
programs and operating expenses, to pursue regulatory clearances and to prosecute and defend our intellectual property rights.
We believe that our existing capital resources, interest income, royalties and revenue from our licensing agreements and collaborative
agreements will be sufficient to fund our currently expected operating expenses and capital requirements for the next twelve months.
We will need to raise substantial additional capital to support our ongoing and planned operations.
If we raise additional funds by issuing equity
securities, further dilution to existing stockholders will result and future investors may be granted rights superior to those
of existing stockholders. If adequate funds are not available to us through additional equity offerings, we may be required to
delay, reduce the scope of or eliminate one or more of our research and development programs or to obtain funds by entering into
arrangements with collaborative partners or others that require us to issue additional equity securities or to relinquish rights
to certain technologies or drug candidates that we would not otherwise issue or relinquish in order to continue independent operations.
We do not have significant operating revenue
and may never attain profitability.
To date, we have funded our operations primarily
through private sales of common stock, preferred stock and convertible notes. Contract research payments and licensing fees from
corporate alliances and mergers have also provided funding for our operations. Our ability to achieve significant revenue or profitability
depends upon our licensees ability to successfully market MuGard in North America, Europe, Australia, New Zealand, Korea and China
or to complete the development of our drug candidates, to develop and obtain patent protection and regulatory approvals for our
drug candidates and to manufacture and commercialize the resulting drugs. We are not expecting any significant revenues in the
short-term from our products or product candidates. Furthermore, we may not be able to ever successfully identify, develop, commercialize,
patent, manufacture, obtain required regulatory approvals and market any additional products. Moreover, even if we do identify,
develop, commercialize, patent, manufacture, and obtain required regulatory approvals to market additional products, we may not
generate revenues or royalties from commercial sales of these products for a significant number of years, if at all. Therefore,
our proposed operations are subject to all the risks inherent in the establishment of a new business enterprise. In the next few
years, our revenues may be limited to minimal product sales and royalties, and any amounts that we receive under strategic partnerships
and research or drug development collaborations that we may establish and, as a result, we may be unable to achieve or maintain
profitability in the future or to achieve significant revenues in order to fund our operations.
We may not successfully commercialize our
drug candidates.
Our drug candidates are subject to the risks
of failure inherent in the development of pharmaceutical products based on new technologies, and our failure to develop safe commercially
viable drugs would severely limit our ability to become profitable or to achieve significant revenues. We may be unable to successfully
commercialize our drug candidates because:
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some or all of our drug candidates may be found to be unsafe or ineffective or otherwise fail to meet applicable regulatory standards or receive necessary regulatory clearances; |
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our drug candidates, if safe and effective, may be too difficult to develop into commercially viable drugs; |
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it may be difficult to manufacture or market our drug candidates on a large scale; |
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proprietary rights of third parties may preclude us from marketing our drug candidates; and |
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third parties may market superior or equivalent drugs. |
The success of our research and development
activities, upon which we primarily focus, is uncertain.
Our primary focus is on our research and development
activities and the commercialization of compounds covered by proprietary biopharmaceutical patents and patent applications. Research
and development activities, by their nature, preclude definitive statements as to the time required and costs involved in reaching
certain objectives. Actual research and development costs, therefore, could significantly exceed budgeted amounts and estimated
time frames may require significant extension. Cost overruns, unanticipated regulatory delays or demands, unexpected adverse side
effects or insufficient therapeutic efficacy will prevent or substantially slow our research and development effort and our business
could ultimately suffer. We anticipate that we will remain principally engaged in research and development activities for an indeterminate,
but substantial, period of time.
We may be unable to successfully develop,
market, or commercialize our products or our product candidates without establishing new relationships and maintaining current
relationships and our ability to successfully commercialize, and market our product candidates could be limited if a number of
these existing relationships are terminated.
Our strategy for the research, development
and commercialization of our potential pharmaceutical products may require us to enter into various arrangements with corporate
and academic collaborators, licensors, licensees and others, in addition to our existing relationships with other parties. Specifically,
we may seek to joint venture, sublicense or enter other marketing arrangements with parties that have an established marketing
capability or we may choose to pursue the commercialization of such products on our own. We may, however, be unable to establish
such additional collaborative arrangements, license agreements, or marketing agreements as we may deem necessary to develop, commercialize
and market our potential pharmaceutical products on acceptable terms. Furthermore, if we maintain and establish arrangements or
relationships with third parties, our business may depend upon the successful performance by these third parties of their responsibilities
under those arrangements and relationships.
We may be unable to successfully manufacture
our products and our product candidates in clinical quantities or for commercial purposes without the assistance of contract manufacturers,
which may be difficult for us to obtain and maintain.
We have limited experience in the manufacture
of pharmaceutical products in clinical quantities or for commercial purposes and we may not be able to manufacture any new pharmaceutical
products that we may develop. As a result, we have established, and in the future intend to establish arrangements with contract
manufacturers to supply sufficient quantities of products to conduct clinical trials and for the manufacture, packaging, labeling
and distribution of finished pharmaceutical products if any of our potential products are approved for commercialization. If we
are unable to contract for a sufficient supply of our potential pharmaceutical or biopharmaceutical products on acceptable terms,
our preclinical and human clinical testing schedule may be delayed, resulting in the delay of our clinical programs and submission
of product candidates for regulatory approval, which could cause our business to suffer. Our business could suffer if there are
delays or difficulties in establishing relationships with manufacturers to produce, package, label and distribute our finished
pharmaceutical or biopharmaceutical or other medical products, if any. Moreover, US contract manufacturers that we may use must
adhere to current Good Manufacturing Practices, as required by the FDA. In this regard, the FDA will not issue a pre-market approval
or product and establishment licenses, where applicable, to a manufacturing facility for the products until the manufacturing facility
passes a pre-approval plant inspection. If we are unable to obtain or retain third party manufacturing on commercially acceptable
terms, we may not be able to commercialize our products as planned. Our potential dependence upon third parties for the manufacture
of our products may adversely affect our ability to generate profits or acceptable profit margins and our ability to develop and
deliver such products on a timely and competitive basis.
We are subject to extensive governmental
regulation which increases our cost of doing business and may affect our ability to commercialize any new products that we may
develop.
The FDA and comparable agencies in foreign
countries impose substantial requirements upon the introduction of pharmaceutical products through lengthy and detailed laboratory,
preclinical and clinical testing procedures and other costly and time-consuming procedures to establish safety and efficacy. All
of our drugs and drug candidates require receipt and maintenance of governmental approvals for commercialization. Preclinical and
clinical trials and manufacturing of our drug candidates will be subject to the rigorous testing and approval processes of the
FDA and corresponding foreign regulatory authorities. Satisfaction of these requirements typically takes a significant number of
years and can vary substantially based upon the type, complexity and novelty of the product.
Due to the time-consuming and uncertain nature
of the drug candidate development process and the governmental approval process described above, we cannot assure you when we,
independently or with our collaborative partners, might submit a New Drug Application, or NDA, for FDA or other regulatory review.
Further, our ability to commence and/or complete development projects will be subject to our ability to raise enough funds to pay
for the development costs of these projects. Government regulation also affects the manufacturing and marketing of pharmaceutical
products. Government regulations may delay marketing of our potential drugs for a considerable or indefinite period of time, impose
costly procedural requirements upon our activities and furnish a competitive advantage to larger companies or companies more experienced
in regulatory affairs. Delays in obtaining governmental regulatory approval could adversely affect our marketing as well as our
ability to generate significant revenues from commercial sales.
Our drug candidates may not receive FDA or
other regulatory approvals on a timely basis or at all. Moreover, if regulatory approval of a drug candidate is granted, such approval
may impose limitations on the indicated use for which such drug may be marketed. Even if we obtain initial regulatory approvals
for our drug candidates, our drugs and our manufacturing facilities would be subject to continual review and periodic inspection,
and later discovery of previously unknown problems with a drug, manufacturer or facility may result in restrictions on the marketing
or manufacture of such drug, including withdrawal of the drug from the market. The FDA and other regulatory authorities stringently
apply regulatory standards and failure to comply with regulatory standards can, among other things, result in fines, denial or
withdrawal of regulatory approvals, product recalls or seizures, operating restrictions and criminal prosecution.
The uncertainty associated with preclinical
and clinical testing may affect our ability to successfully commercialize new products.
Before we can obtain regulatory approvals for
the commercial sale of any of our potential drugs, the drug candidates will be subject to extensive preclinical and clinical trials
to demonstrate their safety and efficacy in humans. Preclinical or clinical trials of future drug candidates may not demonstrate
the safety and efficacy to the extent necessary to obtain regulatory approvals. In this regard, for example, adverse side effects
can occur during the clinical testing of a new drug on humans which may delay ultimate FDA approval or even lead it to terminate
our efforts to develop the drug for commercial use. Companies in the biotechnology industry have suffered significant setbacks
in advanced clinical trials, even after demonstrating promising results in earlier trials. The failure to adequately demonstrate
the safety and efficacy of a drug candidate under development could delay or prevent regulatory approval of the drug candidate.
A delay or failure to receive regulatory approval for any of our drug candidates could prevent us from successfully commercializing
such candidates and we could incur substantial additional expenses in our attempt to further develop such candidates and obtain
future regulatory approval.
We may incur substantial product liability
expenses due to the use or misuse of our products for which we may be unable to obtain insurance coverage.
Our business exposes us to potential liability
risks that are inherent in the testing, manufacturing and marketing of pharmaceutical products. These risks will expand with respect
to our drug candidates, if any, that receive regulatory approval for commercial sale and we may face substantial liability for
damages in the event of adverse side effects or product defects identified with any of our products that are used in clinical tests
or marketed to the public. Product liability insurance for the biotechnology industry is generally expensive, if available at all,
and as a result, we may be unable to obtain insurance coverage at acceptable costs or in a sufficient amount in the future, if
at all. We may be unable to satisfy any claims for which we may be held liable as a result of the use or misuse of products which
we developed, manufactured or sold and any such product liability claim could adversely affect our business, operating results
or financial condition.
Intense competition may limit our ability
to successfully develop and market commercial products.
The biotechnology and pharmaceutical industries
are intensely competitive and subject to rapid and significant technological change. Our competitors in the U.S. and elsewhere
are numerous and include, among others, major multinational pharmaceutical and chemical companies, specialized biotechnology firms
and universities and other research institutions. Many of our competitors have and employ greater financial and other resources,
including larger research and development, marketing and manufacturing organizations. As a result, our competitors may successfully
develop technologies and drugs that are more effective or less costly than any that we are developing or which would render our
technology and future products obsolete and noncompetitive.
In addition, some of our competitors have greater
experience than we do in conducting preclinical and clinical trials and obtaining FDA and other regulatory approvals. Accordingly,
our competitors may succeed in obtaining FDA or other regulatory approvals for drug candidates more rapidly than we can. Companies
that complete clinical trials, obtain required regulatory agency approvals and commence commercial sale of their drugs before their
competitors may achieve a significant competitive advantage. Drugs resulting from our research and development efforts or from
our joint efforts with collaborative partners therefore may not be commercially competitive with our competitors’ existing
products or products under development.
Our ability to successfully develop and
commercialize our drug candidates will substantially depend upon the availability of reimbursement funds for the costs of the resulting
drugs and related treatments.
Market acceptance and sales of our product
candidates may depend on coverage and reimbursement policies and health care reform measures. Decisions about formulary coverage
as well as levels at which government authorities and third-party payers, such as private health insurers and health maintenance
organizations, reimburse patients for the price they pay for our products as well as levels at which these payors pay directly
for our products, where applicable, could affect whether we are able to commercialize these products. We cannot be sure that reimbursement
will be available for any of these products. Also, we cannot be sure that coverage or reimbursement amounts will not reduce the
demand for, or the price of, our products. We have not commenced efforts to have our product candidates reimbursed by government
or third party payors. If coverage and reimbursement are not available or are available only at limited levels, we may not be able
to commercialize our products. In recent years, officials have made numerous proposals to change the health care system in the
U.S. These proposals include measures that would limit or prohibit payments for certain medical treatments or subject the pricing
of drugs to government control. In addition, in many foreign countries, particularly the countries of the European Union, the pricing
of prescription drugs is subject to government control. If our products are or become subject to government regulation that limits
or prohibits payment for our products, or that subjects the price of our products to governmental control, we may not be able to
generate revenue, attain profitability or commercialize our products.
As a result of legislative proposals and the
trend towards managed health care in the U.S., third-party payors are increasingly attempting to contain health care costs by limiting
both coverage and the level of reimbursement of new drugs. They may also impose strict prior authorization requirements and/or
refuse to provide any coverage of uses of approved products for medical indications other than those for which the FDA has granted
market approvals. As a result, significant uncertainty exists as to whether and how much third-party payors will reimburse patients
for their use of newly-approved drugs, which in turn will put pressure on the pricing of drugs.
The market may not accept any pharmaceutical
products that we develop.
The drugs that we are attempting to develop
may compete with a number of well-established drugs manufactured and marketed by major pharmaceutical companies. The degree of
market acceptance of any drugs developed by us will depend on a number of factors, including the establishment and demonstration
of the clinical efficacy and safety of our drug candidates, the potential advantage of our drug candidates over existing therapies
and the reimbursement policies of government and third-party payers. Physicians, patients or the medical community in general may
not accept or use any drugs that we may develop independently or with our collaborative partners and if they do not, our business
could suffer.
Healthcare reform measures could hinder
or prevent our product candidates’ commercial success.
The U.S. government and other governments have
shown significant interest in pursuing healthcare reform. Any government-adopted reform measures could adversely impact the pricing
of healthcare products and services in the U.S. or internationally and the amount of reimbursement available from governmental
agencies or other third party payors. The continuing efforts of the U.S. and foreign governments, insurance companies, managed
care organizations and other payors of health care services to contain or reduce health care costs may adversely affect our ability
to set prices for our products which we believe are fair, and our ability to generate revenues and achieve and maintain profitability.
New laws, regulations and judicial decisions,
or new interpretations of existing laws, regulations and decisions, that relate to healthcare availability, methods of delivery
or payment for products and services, or sales, marketing or pricing, may limit our potential revenue, and we may need to revise
our research and development programs. The pricing and reimbursement environment may change in the future and become more challenging
due to several reasons, including policies advanced by the current executive administration in the U.S., new healthcare legislation
or fiscal challenges faced by government health administration authorities. Specifically, in both the U.S. and some foreign jurisdictions,
there have been a number of legislative and regulatory proposals to change the health care system in ways that could affect our
ability to sell our products profitably.
For example, in March 2010, President Obama
signed the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or the PPACA.
This law will substantially change the way healthcare is financed by both government health plans and private insurers, and significantly
impact the pharmaceutical industry. The PPACA contains a number of provisions that are expected to impact our business and operations
in ways that may negatively affect our potential revenues in the future. For example, the PPACA imposes a non-deductible excise
tax on pharmaceutical manufacturers or importers that sell branded prescription drugs to U.S. government programs which we believe
will increase the cost of our products. In addition, as part of the PPACA’s provisions closing a funding gap that currently
exists in the Medicare Part D prescription drug program (commonly known as the “donut hole”), we will be required to
provide a discount on branded prescription drugs equal to 50% of the government-negotiated price, for drugs provided to certain
beneficiaries who fall within the donut hole. Similarly, PPACA increases the level of Medicaid rebates payable by manufacturers
of brand-name drugs from 15.1% to 23.1% and requires collection of rebates for drugs paid by Medicaid managed care organizations.
The PPACA also includes significant changes to the 340B drug discount program including expansion of the list of eligible covered
entities that may purchase drugs under the program. At the same time, the expansion in eligibility for health insurance benefits
created under PPACA is expected to increase the number of patients with insurance coverage who may receive our products. While
it is too early to predict all the specific effects the PPACA or any future healthcare reform legislation will have on our business,
they could have a material adverse effect on our business and financial condition.
Congress periodically adopts legislation like
the PPACA and the Medicare Prescription Drug, Improvement and Modernization Act of 2003, that modifies Medicare reimbursement and
coverage policies pertaining to prescription drugs. Implementation of these laws is subject to ongoing revision through regulatory
and sub regulatory policies. Congress also may consider additional changes to Medicare policies, potentially including Medicare
prescription drug policies, as part of ongoing budget negotiations. While the scope of any such legislation is uncertain at this
time, there can be no assurances that future legislation or regulations will not decrease the coverage and price that we may receive
for our proposed products. Other third-party payors are increasingly challenging the prices charged for medical products and services.
It will be time consuming and expensive for us to go through the process of seeking coverage and reimbursement from Medicare and
private payors. Our proposed products may not be considered cost-effective, and coverage and reimbursement may not be available
or sufficient to allow us to sell our proposed products on a profitable basis. Further federal and state proposals and health care
reforms are likely which could limit the prices that can be charged for the product candidates that we develop and may further
limit our commercial opportunities. Our results of operations could be materially adversely affected by proposed healthcare reforms,
by the Medicare prescription drug coverage legislation, by the possible effect of such current or future legislation on amounts
that private insurers will pay and by other health care reforms that may be enacted or adopted in the future. In September 2007,
the Food and Drug Administration Amendments Act of 2007 was enacted, giving the FDA enhanced post-marketing authority, including
the authority to require post-marketing studies and clinical trials, labeling changes based on new safety information, and compliance
with risk evaluations and mitigation strategies approved by the FDA. The FDA’s exercise of this authority could result in
delays or increased costs during product development, clinical trials and regulatory review, increased costs to assure compliance
with post-approval regulatory requirements, and potential restrictions on the sale and/or distribution of approved products.
Our business could suffer if we lose the
services of, or fail to attract, key personnel.
We are highly dependent upon the efforts of
our senior management, including our Executive Chairman, Principal Executive Officer, and board member, Steven H. Rouhandeh; our
President and Chief Executive Officer, Timothy J. Miller; our Chief Financial Officer, Harrison G. Wehner, III; our Chief Operating
Officer and board member Jeffrey B. Davis; our Senior Vice President Research and Development and our Chief Accounting Officer,
Stephen B. Thompson. The loss of the services of these individuals could delay or prevent the achievement of our research, development,
marketing, or product commercialization objectives. We do not have employment contracts with our other key personnel. We do not
maintain any ‘key-man’ insurance policies on any of our key employees and we do not intend to obtain such insurance.
In addition, due to the specialized scientific nature of our business, we are highly dependent upon our ability to attract and
retain qualified scientific and technical personnel and consultants. In view of the stage of our development and our research and
development programs, we have restricted our hiring to research scientists, consultants and a small administrative staff and we
have made only limited investments in manufacturing, production, sales or regulatory compliance resources. There is intense competition
among major pharmaceutical and chemical companies, specialized biotechnology firms and universities and other research institutions
for qualified personnel in the areas of our activities, however, and we may be unsuccessful in attracting and retaining these personnel.
Trends toward managed health care and downward
price pressures on medical products and services may limit our ability to profitably sell any drugs that we may develop.
Lower prices for pharmaceutical products may
result from:
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the trend toward managed health care in the U.S. and the concurrent growth of HMOs and similar organizations that can control or significantly influence the purchase of healthcare services and products; and |
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legislative proposals to reform healthcare or reduce government insurance programs. |
The cost containment measures that healthcare
providers are instituting, including practice protocols and guidelines and clinical pathways, and the effect of any healthcare
reform, could limit our ability to profitably sell any drugs that we may successfully develop. Moreover, any future legislation
or regulation, if any, relating to the healthcare industry or third-party coverage and reimbursement, may cause our business to
suffer.
Security breaches and other disruptions
could compromise our information and expose us to liability, which would cause our business and reputation to suffer.
In the ordinary course of our business, we
collect and store sensitive data, including intellectual property, our proprietary business information and that of our suppliers
and business partners, as well as personally identifiable information of clinical trial participants and employees. Similarly,
our business partners and third party providers possess certain of our sensitive data. The secure maintenance of this information
is critical to our operations and business strategy. Despite our security measures, our information technology and infrastructure
may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could
compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access,
disclosure or other loss of information, including our data being breached at our business partners or third-party providers, could
result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations,
and damage our reputation which could adversely affect our business.
Risks Related to our Intellectual
Property
It is difficult and costly to protect our
proprietary rights, and we may not be able to ensure protection of such rights.
Our commercial success will depend in part
on obtaining and maintaining patent protection and trade secret protection of our product candidates, and the methods used to manufacture
them, as well as successfully defending these patents against third-party challenges. We will only be able to protect our product
candidates from unauthorized making, using, selling and offering to sell or importation by third parties to the extent that we
have rights under valid and enforceable patents or trade secrets that cover these activities. The patent positions of pharmaceutical
and biotechnology companies can be highly uncertain and involve complex legal and factual questions for which important legal principles
remain unresolved. No consistent policy regarding the breadth of claims allowed in biotechnology patents has emerged to date in
the U.S. The biotechnology patent situation outside the U.S. is even more uncertain. Changes in either the patent laws or in interpretations
of patent laws in the U.S. and other countries may diminish the value of our intellectual property. Accordingly, we cannot predict
the breadth of claims that may be allowed or enforced in our issued patents or in third-party patents.
The degree of future protection for our proprietary
rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to
gain or keep our competitive advantage. For example:
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others may be able to produce compounds or molecules that are competitive with our product candidates but that are not covered by the claims of our patents; |
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we may not have been the first to make the inventions covered by our pending patent applications; |
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we may not have been the first to file patent applications for these inventions; |
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others may independently develop similar or alternative technologies or duplicate any of our technologies; |
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it is possible that our pending patent applications will not result in issued patents and it is possible that our issued patents could be narrowed in scope, invalidated, held to be unenforceable, or circumvented; |
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we may not develop additional proprietary technologies that are patentable; or |
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the patents of others may have an adverse effect on our business; or others may be able to misappropriate our trade secrets. |
We also may rely on trade secrets to protect
our technology, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult
to protect. While we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific
collaborators and other advisors may unintentionally or willfully disclose our information to competitors. Enforcing a claim that
a third party illegally obtained and is using our trade secrets is expensive and time consuming, and the outcome is unpredictable.
In addition, courts outside the United States are sometimes less willing to protect trade secrets. Moreover, our competitors may
independently develop equivalent knowledge, methods and know-how.
We may incur substantial costs as a result
of litigation or other proceedings relating to patent and other intellectual property rights and we may be unable to protect our
rights to, or use, our technology.
If we choose to go to court to stop someone
else from using the inventions claimed in our patents, that individual or company has the right to ask the court to rule that these
patents are invalid and/or should not be enforced against that third party. These lawsuits are expensive and would consume time
and other resources even if we were successful in stopping the infringement of these patents. In addition, there is a risk that
the court will decide that these patents are not valid and that we do not have the right to stop the other party from using the
inventions. There is also the risk that, even if the validity of these patents is upheld, the court will refuse to stop the other
party on the ground that such other party’s activities do not infringe our rights to these patents.
Furthermore, a third party may claim that we
are using inventions covered by the third party’s patent rights and may go to court to stop us from engaging in our normal
operations and activities, including making or selling our product candidates. These lawsuits are costly and could affect our results
of operations and divert the attention of managerial and technical personnel. There is a risk that a court would decide that we
are infringing the third party’s patents and would order us to stop the activities covered by the patents. In addition, there
is a risk that a court will order us to pay the other party damages for having violated the other party’s patents. The biotechnology
industry has produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents
cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the
interpretation is not always uniform. If we are sued for patent infringement, we would need to demonstrate that our products or
methods of use either do not infringe the patent claims of the relevant patent and/or that the patent claims are invalid, and we
may not be able to do this. Proving invalidity, in particular, is difficult since it requires a showing of clear and convincing
evidence to overcome the presumption of validity enjoyed by issued patents. Because some patent applications in the U.S. may be
maintained in secrecy until the patents are issued, patent applications in the U.S. and many foreign jurisdictions are typically
not published until eighteen months after filing, and publications in the scientific literature often lag behind actual discoveries,
we cannot be certain that others have not filed patent applications for technology covered by our issued patents or our pending
applications or that we were the first to invent the technology. Our competitors have filed, and may in the future file, patent
applications covering technology similar to ours. Any such patent application may have priority over our patent applications and
could further require us to obtain rights to issued patents covering such technologies. If another party has filed a U.S. patent
application on inventions similar to ours, we may have to participate in an interference proceeding declared by the PTO, to determine
priority of invention in the U.S. The costs of these proceedings could be substantial, and it is possible that such efforts would
be unsuccessful, resulting in a loss of our United States patent position with respect to such inventions.
Some of our competitors may be able to sustain
the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition,
any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our
ability to raise the funds necessary to continue our operations.
Pending and future litigation, including
product liability claims, private securities litigation, stockholder derivative suits and contract litigation, may adversely affect
our financial condition and results of operations or liquidity.
The development, manufacture and marketing
of pharmaceutical products of the types that we produce entail an inherent risk of product liability claims. A number of factors
could result in an unsafe condition or injury to a patient with respect to these or other products that we manufacture or sell,
including inadequate disclosure of product-related risks or product-related information. In addition, we may be the subject of
litigation involving contract disputes, stockholder derivative suites or private securities litigation. The outcome of litigation,
particularly class action lawsuits, is difficult to assess or quantify. Plaintiffs in these types of lawsuits often seek recovery
of very large or indeterminate amounts, including not only actual damages, but also punitive damages. The magnitude of the potential
losses relating to these lawsuits may remain unknown for substantial periods of time. In addition, the cost to defend against any
future litigation may be significant. Product liability claims, securities and commercial litigation and other litigation in the
future, regardless of the outcome, could have a material adverse effect on our financial condition, results of operations or liquidity.
We are currently involved in a class action litigation, the outcome of which is uncertain and we may be required to pay damages.
This litigation is described on page 27 under the heading “Legal Proceedings.”
We may not be successful in protecting our
intellectual property and proprietary rights.
Our success depends, in part, on our ability
to obtain U.S. and foreign patent protection for our drug candidates and processes, preserve our trade secrets and operate our
business without infringing the proprietary rights of third parties. Legal standards relating to the validity of patents covering
pharmaceutical and biotechnological inventions and the scope of claims made under such patents are still developing and there is
no consistent policy regarding the breadth of claims allowed in biotechnology patents. The patent position of a biotechnology firm
is highly uncertain and involves complex legal and factual questions. We cannot assure you that any existing or future patents
issued to, or licensed by, us will not subsequently be challenged, infringed upon, invalidated or circumvented by others. We cannot
assure you that any patents will be issued from any of the patent applications owned by, or licensed to, us. Furthermore, any rights
that we may have under issued patents may not provide us with significant protection against competitive products or otherwise
be commercially viable.
Patents may have been granted to third parties
or may be granted covering products or processes that are necessary or useful to the development of our drug candidates. If our
drug candidates or processes are found to infringe upon the patents or otherwise impermissibly utilize the intellectual property
of others, our development, manufacture and sale of such drug candidates could be severely restricted or prohibited. In such event,
we may be required to obtain licenses from third parties to utilize the patents or proprietary rights of others. We cannot assure
you that we will be able to obtain such licenses on acceptable terms, if at all. If we become involved in litigation regarding
our intellectual property rights or the intellectual property rights of others, the potential cost of such litigation, regardless
of the strength of our legal position, and the potential damages that we could be required to pay could be substantial.
Risks Related to our Common Stock
The market price of our common stock may
be volatile and adversely affected by several factors.
The market price of our common stock could
fluctuate significantly in response to various factors and events, including:
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operating results below expectations; |
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announcements concerning product development results, including clinical trial results, or intellectual property rights of others; |
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litigation or public concern about the safety of our potential products; |
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our issuance of additional securities, including debt or equity or a combination thereof, which will be necessary to fund our operating expenses; |
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announcements of technological innovations or new products by us or our competitors; |
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industry developments, including, without limitation, changes in healthcare policies or practices or third-party reimbursement policies; economic and other external factors; |
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whether an active trading market in our common stock develops and is maintained. |
In addition, the securities markets have from
time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular
companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
We have not paid cash dividends in the past
and do not expect to pay cash dividends in the foreseeable future. Any return on investment may be limited to the value of our
common stock.
We have never paid cash dividends on our common
stock and do not anticipate paying cash dividends on our common stock in the foreseeable future. The payment of dividends on our
capital stock will depend on our earnings, financial condition and other business and economic factors affecting us at such time
as the board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return
on your investment will only occur if the common stock price appreciates.
Our quarterly operating results may fluctuate
significantly.
We expect our operating results to be subject
to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors, including:
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addition or termination of clinical trials; |
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any intellectual property infringement lawsuit in which we may become involved; |
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our execution of any collaborative, licensing or similar arrangements, and the timing of payments we may make or receive under these arrangements. |
If our quarterly operating results fall below
the expectations of investors or securities analysts, the price of our common stock could decline substantially. Furthermore, any
quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.
Provisions of our charter documents could
discourage an acquisition of our company that would benefit our stockholders and may have the effect of entrenching, and making
it difficult to remove, management.
Provisions of our Certificate of Incorporation
and By-laws may make it more difficult for a third party to acquire control of us, even if a change in control would benefit our
stockholders. In particular, shares of our preferred stock may be issued in the future without further stockholder approval and
upon such terms and conditions, and having such rights, privileges and preferences, as our Board of Directors may determine, including,
for example, rights to convert into our common stock. The rights of the holders of our common stock will be subject to, and may
be adversely affected by, the rights of the holders of any of our preferred stock that may be issued in the future. The issuance
of our preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes,
could have the effect of making it more difficult for a third party to acquire control of us. This could limit the price that certain
investors might be willing to pay in the future for shares of our common stock and discourage these investors from acquiring a
majority of our common stock. Further, the existence of these corporate governance provisions could have the effect of entrenching
management and making it more difficult to change our management.
Failure to achieve and maintain effective
internal controls could have a material adverse effect on our business.
Effective internal controls are necessary for
us to provide reliable financial reports. If we cannot provide reliable financial reports, our operating results could be harmed.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined
to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Based on
our evaluation, our management concluded that there is a material weakness in our internal control over financial reporting for
the year ended December 31, 2014. The material weakness identified did not result in the restatement of any previously reported
financial statements or any related financial disclosure, nor does management believe that it had any effect on the accuracy of
our financial statements for the year ended December 31, 2014. A material weakness is a deficiency, or a combination of control
deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement
of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness relates
to the monitoring and review of work performed by an accounting consultant in the preparation of audit and financial statements,
footnotes and financial data provided to our registered public accounting firm in connection with the annual audit of our financial
statements. All of our financial reporting was carried out by an accounting consultant. This lack of accounting staff results in
a lack of segregation of duties and accounting technical expertise necessary for an effective system of internal control. We have
hired additional personnel and have implemented appropriate procedures for monitoring and review of work performed by our current
Chief Accounting Officer. Because of the material weakness described above, management concluded that, as of December 31, 2014,
our internal control over financial reporting was not effective based on the criteria established in Internal Control — Integrated
Framework, 1992, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
While we continue to evaluate and improve our
internal controls, we cannot be certain that these measures will ensure adequate controls over our financial processes and reporting
in the future. Any failure to implement required new or improved controls, or difficulties encountered in their implementation,
could harm our operating results or cause us to fail to meet our reporting obligations. Failure to achieve and maintain an effective
internal control environment could cause investors to lose confidence in our reported financial information, which could have a
material adverse effect on our stock price. Failure to comply with Section 404 could also potentially subject us to sanctions or
investigations by the Securities and Exchange Commission (“SEC”) or other regulatory authorities.
There can be no assurance that we will be
able to comply with continued listing standards of the NASDAQ Capital Market.
We cannot assure you that we will be able to
continue to comply with the minimum bid price and the other standards that we are required to meet in order to maintain a listing
of our common stock on the NASDAQ Capital Market. Our failure to continue to meet these requirements may result in our common stock
being delisted from the NASDAQ Capital Market.
Our ability to use our net operating loss
carry forwards may be subject to limitation.
Generally, a change of more than 50% in the
ownership of a company’s stock, by value, over a three-year period constitutes an ownership change for U.S. federal income
tax purposes. An ownership change may limit our ability to use our net operating loss carryforwards attributable to the period
prior to the change. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards
to offset U.S. federal taxable income may become subject to limitations, which could potentially result in increased future tax
liability for us. At December 31, 2014, we had net operating loss carryforwards aggregating approximately $200.8 million.
Ownership of our shares is concentrated
in the hands of a few investors which could limit the ability of our other stockholders to influence the direction of the company.
As calculated by SEC rules of beneficial ownership,
SCO Capital Partners LLC and affiliates; Perceptive Advisors LLC (and affiliates Joseph Edelman); Europa International, Inc.; and
Larry N. Feinberg (Oracle Partners LP, Oracle Institutional Partners LP and Oracle Associate, LLC); each beneficially owned approximately
46.3%, 8.0%, 5.6%, and 5.3%, respectively, of our common stock on an as converted basis as of December 31, 2014. Accordingly, they
collectively have the ability to significantly influence or determine the election of all of our directors or the outcome of most
corporate actions requiring stockholder approval. They may exercise this ability in a manner that advances their best interests
and not necessarily those of our other stockholders.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus, any prospectus supplement
and the other documents we have filed with the SEC that are incorporated herein by reference contain forward-looking statements
that involve substantial risks and uncertainties. All statements, other than statements of historical facts, regarding our strategy,
future operations, future financial position, future revenues, projected costs, prospects, plans, objectives of management or other
financial items are forward-looking statements. The words “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “may,” “plan,” “predict,” “project,”
“will,” “would” and similar expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words.
We may not actually achieve the plans,
intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking
statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking
statements we make. We have included important factors in the cautionary statements included in this prospectus, particularly as
set forth and incorporated by reference in the “Risk Factors” section above, that we believe could cause actual results
or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect
the potential impact of any future acquisitions, mergers, dispositions, joint ventures, collaborations or investments we may make.
You should read this prospectus, any supplements
to this prospectus and the documents that we incorporate by reference in this prospectus completely and with the understanding
that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking
statements, except as otherwise required by law. We advise you, however,
to consult any further disclosures we make on related subjects in our future annual reports on Form 10-K, quarterly reports
on Form 10-Q and current reports on Form 8-K we file with or furnish to the SEC.
USE OF PROCEEDS
Unless otherwise specified in a prospectus
supplement accompanying this prospectus, the net proceeds from the sale of the securities to which this prospectus relates will
be used for general corporate purposes. General corporate purposes may include repayment of debt, acquisitions, additions to working
capital, capital expenditures, research and development, and investments in our subsidiaries. Net proceeds may be temporarily invested
prior to use.
PLAN OF DISTRIBUTION
We may sell the offered
securities in any of the ways described below or in any combination or any other way set forth in an applicable prospectus supplement
from time to time:
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The distribution of
the securities may be effected from time to time in one or more transactions:
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at a fixed price, or prices, which may be changed from time to time; |
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at prices related to such prevailing market prices; or |
Each prospectus supplement
will describe the method of distribution of the securities and any applicable restrictions.
The prospectus supplement
with respect to the securities of a particular series will describe the terms of the offering of the securities, including the
following:
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the name or names of any underwriters, dealers or agents and the amounts of securities underwritten or purchased by each of them; |
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the public offering price of the securities and the proceeds to us and any discounts, commissions or concessions allowed or reallowed or paid to dealers; and |
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any securities exchanges on which the securities may be listed. |
Any offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
Only the agents or underwriters named in
each prospectus supplement are agents or underwriters in connection with the securities being offered thereby.
We may authorize underwriters, dealers or
other persons acting as our agents to solicit offers by certain institutions to purchase securities from us pursuant to delayed
delivery contracts providing for payment and delivery on the date stated in each applicable prospectus supplement. Each contract
will be for an amount not less than, and the aggregate amount of securities sold pursuant to such contracts shall not be less nor
more than, the respective amounts stated in each applicable prospectus supplement. Institutions with whom the contracts, when authorized,
may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable
institutions and other institutions, but shall in all cases be subject to our approval. Delayed delivery contracts will be subject
only to those conditions set forth in each applicable prospectus supplement, and each prospectus supplement will set forth any
commissions we pay for solicitation of these contracts.
Agents, underwriters and other third parties
described above may be entitled to indemnification by us against certain civil liabilities, including liabilities under the Securities
Act of 1933, as amended (the “Securities Act”), or to contribution from us with respect to payments which the agents,
underwriters or other third parties may be required to make in respect thereof. Agents, underwriters and such other third parties
may be customers of, engage in transactions with, or perform services for us in the ordinary course of business.
One or more firms, referred to as “remarketing
firms,” may also offer or sell the securities, if a prospectus supplement so indicates, in connection with a remarketing
arrangement upon their purchase. Remarketing firms will act as principals for their own accounts or as our agents. These remarketing
firms will offer or sell the securities in accordance with the terms of the securities. Each prospectus supplement will identify
and describe any remarketing firm and the terms of its agreement, if any, with us and will describe the remarketing firm’s
compensation. Remarketing firms may be deemed to be underwriters in connection with the securities they remarket. Remarketing firms
may be entitled under agreements that may be entered into with us to indemnification by us against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of, engage in transactions with or perform services for us in the ordinary
course of business.
Certain underwriters may use this prospectus
and any accompanying prospectus supplement for offers and sales related to market-making transactions in the securities. These
underwriters may act as principal or agent in these transactions, and the sales will be made at prices related to prevailing market
prices at the time of sale.
The securities we offer may be new issues
of securities and may have no established trading market. The securities may or may not be listed on a securities exchange. Underwriters
may make a market in these securities, but will not be obligated to do so and may discontinue any market making at any time without
notice. We can make no assurance as to the liquidity of, or the existence of trading markets for, any of the securities.
Certain persons participating in an offering
may engage in overallotment, stabilizing transactions, short covering transactions and penalty bids in accordance with rules and
regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Overallotment involves sales
in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters
to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a short covering
transaction to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise
be. If commenced, the underwriters may discontinue any of the activities at any time.
We also may sell any of the securities through
agents designated by us from time to time. We will name any agent involved in the offer or sale of these securities and will list
commissions payable by us to these agents in the applicable prospectus supplement. These agents will be acting on a best efforts
basis to solicit purchases for the period of its appointment, unless stated otherwise in the applicable prospectuses.
We may sell any of the securities directly
to purchasers. In this case, we will not engage underwriters or agents in the offer and sale of these securities.
We may engage in sales deemed to be “at
the market offerings” as defined in Rule 415 promulgated under the Securities Act, including sales made directly on
or through The NASDAQ Capital Market, the existing trading market for our common stock, sales made to or through a market maker
other than on an exchange or otherwise, in negotiated transactions at market prices prevailing at the time of sale or at prices
related to such prevailing market prices, and/or any other method permitted by law. The terms of such “at the market offerings”
will be set forth in the applicable prospectus supplement. We may engage an agent to act as a sales agent in such “at the
market offerings” on a best efforts basis using commercially reasonable efforts consistent with normal trading and sales
practices, on mutually agreed terms between such agent and us. We will name any agent involved in such “at the market offerings”
of securities and will list commissions payable by us to these agents in the applicable prospectus supplement.
In addition, we may enter into derivative
transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions.
If the applicable prospectus supplement so indicates, in connection with those derivatives, the third parties may sell securities
covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party
may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings
of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of
stock. The third party in such sale transactions will be an underwriter and, if not identified in this prospectus, will be named
in the applicable prospectus supplement (or a post-effective amendment). In addition, we may otherwise loan or pledge securities
to a financial institution or other third party that in turn may sell the securities short using this prospectus and an applicable
prospectus supplement. Such financial institution or other third party may transfer its economic short position to investors in
our securities or in connection with a concurrent offering of other securities.
The specific terms of any lock-up provisions
in respect of any given offering will be described in the applicable prospectus supplement.
In compliance with the guidelines of the
Financial Industry Regulatory Authority, Inc., or FINRA, the maximum consideration or discount to be received by any FINRA
member or independent broker dealer may not exceed 8% of the aggregate proceeds of the offering.
The underwriters, dealers and agents may
engage in transactions with us, or perform services for us, in the ordinary course of business for which they receive compensation.
GENERAL DESCRIPTION OF SECURITIES THAT
WE MAY SELL
We may offer and sell, at any time and
from time to time:
| • | Shares of our common stock; |
| • | Shares of our preferred stock; |
| • | Warrants to purchase shares of our common stock, preferred stock and/or debt securities; |
| • | Debt securities consisting of debentures, notes or other evidences of indebtedness; or |
| • | Any combination of these securities. |
The
terms of any securities we offer will be determined at the time of sale. We may issue debt securities that are exchangeable for
or convertible into common stock or any of the other securities that may be sold under this prospectus. When particular securities
are offered, a supplement to this prospectus will be filed with the SEC, which will describe the terms of the offering and sale
of the offered securities.
DESCRIPTION OF OUR COMMON STOCK
Our authorized capital stock consists of
200,000,000 shares of common stock, $0.01 par value per share, and 2,000,000 shares of preferred stock, $0.01 par value per share,
which may be issued in one or more series. Currently, 4,000 shares of preferred stock are designated as Series A Preferred Stock
and 1,000 shares of preferred stock are designated as Series B Preferred Stock. The following summary of the terms of our common
stock is subject to and qualified in its entirety by reference to our charter and by-laws, copies of which are on file with the
SEC as exhibits to previous SEC filings. Please refer to “Where You Can Find More Information” below for directions
on obtaining these documents.
As of June 18, 2015, we had 29,859,015
shares of common stock outstanding and no shares of Series A Preferred Stock or Series B Preferred Stock outstanding.
Reverse Stock Split
Our Board of Directors and majority stockholders
approved an amendment to our certificate of incorporation to effect a reverse stock split of our common stock at a ratio between
1 for 5 and 1 for 50 in order to satisfy requirements for the listing of our common stock on The NASDAQ Capital Market. Our stockholders
further authorized the board of directors to determine the ratio at which the reverse stock split would be effected. Our board
of directors authorized the ratio of the Reverse Split on October 16, 2014 and to be effective at the opening of business on October
24, 2014. We amended our certificate of incorporation to effect the reverse split at a ratio of 1 for 50 on October 24, 2014 (the
“Reverse Split”). All share and per share numbers included in this prospectus give effect to the Reverse Split.
General
Holders of our common stock are entitled
to one vote for each share held on all matters submitted to a vote of stockholders and have the right to vote cumulatively for
the election of directors. This means that in the voting at our annual meeting, each stockholder or his proxy, may multiply the
number of his shares by the number of directors to be elected then cast the resulting total number of votes for a single nominee,
or distribute such votes on the ballot among the nominees as desired. Holders of our common stock are entitled to receive ratably
such dividends, if any, as may be declared by our Board of Directors out of funds legally available therefor, subject to any preferential
dividend rights for our outstanding preferred stock.
Upon our liquidation, dissolution or winding
up, the holders of our common stock are entitled to receive ratably our net assets available after the payment of all debts and
other liabilities and subject to the prior rights of any of our outstanding preferred stock. Holders of our common stock have no
preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of our common stock
are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock which
we may designate and issue in the future.
Our common stockholders may not receive
any assets or funds until our creditors have been paid in full and the preferential or participating rights of our preferred stockholders
have been satisfied. If we participate in a corporate merger, consolidation, purchase or acquisition of property or stock, or other
reorganization, any payments or shares of stock allocated to our common stockholders will be distributed pro rata to holders of
our common stock on a per share basis. If we redeem, repurchase or otherwise acquire for payment any shares of our common stock,
we will treat each share of common stock identically.
We may issue additional shares of our common
stock, if authorized by the Board, without the common stockholders’ approval, unless required by Delaware law or a stock
exchange on which our securities are traded. If we receive the appropriate payment, shares of our common stock that we issue will
be fully paid and nonassessable.
Anti-Takeover Provisions
We are subject to the provisions of Section
203 of the General Corporation Law of Delaware. Section 203 prohibits certain publicly held Delaware corporations from engaging
in a “business combination” with an “interested stockholder,” for a period of three years after the date
of the transaction in which the person became an “interested stockholder”, unless the business combination is approved
in a prescribed manner. A “business combination” includes mergers, asset sales and other transactions resulting in
a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a
person or entity who, together with affiliates and associates, owns (or within the preceding three years, did own) 15% or more
of the corporation's voting stock. The statute contains provisions enabling a corporation to avoid the statute's restrictions if
the stockholders holding a majority of the corporation's voting stock approve our certificate of incorporation provides that our
directors shall be divided into three classes, with the terms of each class to expire on different years.
In addition, our certificate of incorporation,
in order to combat “greenmail,” provides in general that any direct or indirect purchase by us of any of our voting
stock or rights to acquire voting stock known to be beneficially owned by any person or group which holds more than five percent
of a class of our voting stock and which has owned the securities being purchased for less than two years must be approved by the
affirmative vote of at least two-thirds of the votes entitled to be cast by the holders of voting stock, subject to certain exceptions.
The prohibition of “greenmail” may tend to discourage or foreclose certain acquisitions of our securities which might
temporarily increase the price of our securities. Discouraging the acquisition of a large block of our securities by an outside
party may also have a potential negative effect on takeovers. Parties seeking control of us through large acquisitions of its securities
will not be able to resort to “greenmail” should their bid fail, thus making such a bid less attractive to persons
seeking to initiate a takeover effort.
Elimination of Monetary Liability for
Officers and Directors
Our certificate of incorporation incorporates
certain provisions permitted under the General Corporation Law of Delaware relating to the liability of directors. The provisions
eliminate a director's liability for monetary damages for a breach of fiduciary duty, including gross negligence, except in circumstances
involving certain wrongful acts, such as the breach of director's duty of loyalty or acts or omissions, which involve intentional
misconduct or a knowing violation of law. These provisions do not eliminate a director's duty of care. Moreover, these provisions
do not apply to claims against a Director for certain violations of law, including knowing violations of federal securities law.
Our Certificate of Incorporation also contains provisions to indemnify the directors, officers, employees or other agents to the
fullest extent permitted by the General Corporation Law of Delaware. We believe that these provisions will assist us in attracting
and retaining qualified individual to serve as directors.
Our Certificate of Incorporation also contains
provisions to indemnify the directors, officers, employees or other agents to the fullest extent permitted by the General Corporation
Law of Delaware. These provisions may have the practical effect in certain cases of eliminating the ability of stockholders to
collect monetary damages from directors. We believe that these provisions will assist us in attracting or retaining qualified individuals
to serve as our directors.
The NASDAQ Capital Market
Our common stock is listed on The NASDAQ
Capital Market under the symbol “PTBI.” Beginning on June 22, 2015, our common stock will be listed on The NASDAQ Capital
Market under the symbol “ABEO”, reflecting the change in our name from PlasmaTech Biopharmaceuticals, Inc. to Abeona
Therapeutics Inc., as discussed elsewhere in this prospectus.
Transfer Agent and Registrar
The transfer agent and registrar for our
common stock is American Stock Transfer & Trust Company, New York, New York.
DESCRIPTION OF OUR PREFERRED STOCK
The Board may, without further action by
our stockholders, from time to time, direct the issuance of shares of preferred stock in series and may, at the time of issuance,
determine the rights, preferences and limitations of each series, including voting rights, dividend rights and redemption and liquidation
preferences. Satisfaction of any dividend preferences of outstanding shares of our preferred stock would reduce the amount of funds
available for the payment of dividends on shares of our common stock. Holders of shares of our preferred stock may be entitled
to receive a preference payment in the event of any liquidation, dissolution or winding-up of our Company before any payment is
made to the holders of shares of our common stock. In some circumstances, the issuance of shares of preferred stock may render
more difficult or tend to discourage a merger, tender offer or proxy contest, the assumption of control by a holder of a large
block of our securities or the removal of incumbent management. Upon the affirmative vote of the Board, without stockholder approval,
we may issue shares of preferred stock with voting and conversion rights which could adversely affect the holders of shares of
our common stock.
If we offer a specific class or series
of preferred stock under this prospectus, we will describe the terms of the preferred stock in the prospectus supplement for such
offering and will file a copy of the certificate establishing the terms of the preferred stock with the SEC. To the extent required,
this description will include:
| • | the title and stated value; |
| • | the number of shares offered, the liquidation preference per share and the purchase price; |
| • | the dividend rate(s), period(s) and/or payment date(s), or method(s) of calculation for such dividends; |
| • | whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate; |
| • | the procedures for any auction and remarketing, if any; |
| • | the provisions for a sinking fund, if any; |
| • | the provisions for redemption, if applicable; |
| • | any listing of the preferred stock on any securities exchange or market; |
| • | whether the preferred stock will be convertible into our common stock, and, if applicable, the conversion price (or how it
will be calculated), the conversion period and any other terms of conversion (including any anti-dilution provisions, if any); |
| • | whether the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange price (or how it will
be calculated), the exchange period and any other terms of exchange (including any anti-dilution provisions, if any); |
| • | voting rights, if any, of the preferred stock; |
| • | a discussion of any material U.S. federal income tax considerations applicable to the preferred stock; |
| • | the relative ranking and preferences of the preferred stock as to dividend rights and rights upon liquidation, dissolution
or winding up of the affairs of the Company; |
| • | any material limitations on issuance of any class or series of preferred stock ranking senior to or on a parity with the series
of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of the Company; and |
| • | any other affirmative, negative or other covenants or contractual rights which might be attendant with the specific class or
series of preferred stock. |
The preferred stock offered by this prospectus,
when issued, will not have, or be subject to, any preemptive or similar rights.
Transfer Agent and Registrar
The transfer agent and registrar for any
series or class of preferred stock will be set forth in each applicable prospectus supplement.
DESCRIPTION OF OUR WARRANTS
This section describes the general terms
and provisions of our warrants to acquire our securities that we may issue from time to time. The applicable prospectus supplement
will describe the specific terms of the warrants offered through that prospectus supplement.
We may issue warrants for the purchase
of our debt securities, common stock or preferred stock or other securities issued by us. We may issue warrants independently or
together with other securities, and they may be attached to or separate from the other securities. We will file a copy of the warrant
and warrant agreement with the SEC each time we issue a series of warrants, and these warrants and warrant agreements will be incorporated
by reference into the Registration Statement of which this prospectus is a part. A holder of our warrants should refer to the provisions
of the applicable warrant agreement and prospectus supplement for more specific information.
The applicable prospectus supplement will
contain, where applicable, the following terms of and other information relating to the warrants:
| • | the specific designation and aggregate number of, and the price at which we will issue, the warrants; |
| • | the currency or currency units in which the offering price, if any, and the exercise price are payable; |
| • | the designation, amount and terms of the securities purchasable upon exercise of the warrants; |
| • | if applicable, the exercise price for shares of our common stock and the number of shares of common stock to be received upon
exercise of the warrants; |
| • | if applicable, the exercise price for shares of our preferred stock, the number of shares of preferred stock to be received
upon exercise, and a description of that class or series of our preferred stock; |
| • | if applicable, the exercise price for our debt securities, the amount of our debt securities to be received upon exercise,
and a description of that series of debt securities; |
| • | the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if the warrants
may not be continuously exercised throughout that period, the specific date or dates on which the warrants may be exercised; |
| • | whether the warrants will be issued in fully registered form or bearer form, in definitive or global form or in any combination
of these forms, although, in any case, the form of a warrant included in a unit will correspond to the form of the unit and of
any security included in that unit; |
| • | any applicable material U.S. federal income tax consequences; |
| • | the identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer agents,
registrars or other agents; |
| • | the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities
exchange; |
| • | if applicable, the date from and after which the warrants and the common stock, preferred stock or debt securities will be
separately transferable; |
| • | if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time; |
| • | information with respect to book-entry procedures, if any; |
| • | the anti-dilution provisions of the warrants, if any; |
| • | any redemption or call provisions; |
| • | whether the warrants are to be sold separately or with other securities as parts of units; and |
| • | any additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of
the warrants. |
After your warrants expire they will become
void. All warrants will be issued in registered form. The prospectus supplement may provide for the adjustment of the exercise
price of the warrants.
Warrants may be exercised at the appropriate
office of the warrant agent or any other office indicated in the applicable prospectus supplement. Before the exercise of warrants,
holders will not have any of the rights of holders of the securities purchasable upon exercise and will not be entitled to payments
made to holders of those securities.
The warrant agreements may be amended or
supplemented without the consent of the holders of the warrants to which it applies to effect changes that are not inconsistent
with the provisions of the warrants and that do not materially and adversely affect the interests of the holders of the warrants.
However, any amendment that materially and adversely alters the rights of the holders of warrants will not be effective unless
the holders of at least a majority of the applicable warrants then outstanding approve the amendment. Every holder of an outstanding
warrant at the time any amendment becomes effective, by continuing to hold the warrant, will be bound by the applicable warrant
agreement as amended. The prospectus supplement applicable to a particular series of warrants may provide that certain provisions
of the warrants, including the securities for which they may be exercisable, the exercise price and the expiration date, may not
be altered without the consent of the holder of each warrant.
Transfer Agent and Registrar
The transfer agent and registrar for any
warrants will be set forth in the applicable prospectus supplement.
DESCRIPTION OF OUR DEBT SECURITIES
This section describes the general terms
and provisions of the debt securities that we may offer under this prospectus, any of which may be issued as convertible or exchangeable
debt securities. We will set forth the particular terms of the debt securities we offer in a prospectus supplement. The extent,
if any, to which the following general provisions apply to particular debt securities will be described in the applicable prospectus
supplement. The following description of general terms relating to the debt securities and the indenture under which the debt securities
will be issued are summaries only and therefore are not complete. You should read the indenture and the prospectus supplement regarding
any particular issuance of debt securities.
We will issue any debt under an indenture
to be entered into between us and the trustee identified in the applicable prospectus supplement. The terms of the debt securities
will include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939,
as amended (the “Indenture Act”), as in effect on the date of the indenture. We have filed or will file a copy of the
form of indenture as an exhibit to the Registration Statement in which this prospectus is included. The indenture will be subject
to and governed by the terms of the Indenture Act.
We may offer under this prospectus up to
an aggregate principal amount of $225,000,000 in debt securities, or if debt securities are issued at a discount, or in a foreign
currency, foreign currency units or composite currency, the principal amount as may be sold for an initial public offering price
of up to $225,000,000. Unless otherwise specified in the applicable prospectus supplement, the debt securities will represent direct, unsecured
obligations of the Company and will rank equally with all of our other unsecured indebtedness.
The following statements relating to the
debt securities and the indenture are summaries, qualified in their entirety by reference to the detailed provisions of the indenture
and the final form indenture as may be filed with a future prospectus supplement.
General
We may issue the debt securities in one or
more series with the same or various maturities, at par, at a premium, or at a discount. We will describe the particular terms
of each series of debt securities in a prospectus supplement relating to that series, which we will file with the SEC.
The prospectus supplement will set forth,
to the extent required, the following terms of the debt securities in respect of which the prospectus supplement is delivered:
| • | the title of the series; |
| • | the aggregate principal amount; |
| • | the issue price or prices, expressed as a percentage of the aggregate principal amount of the debt securities; |
| • | any limit on the aggregate principal amount; |
| • | the date or dates on which principal is payable; |
| • | the interest rate or rates (which may be fixed or variable) or, if applicable, the method used to determine such rate or rates; |
| • | the date or dates from which interest, if any, will be payable and any regular record date for the interest payable; |
| • | the place or places where principal and, if applicable, premium and interest, is payable; |
| • | the terms and conditions upon which we may, or the holders may require us to, redeem or repurchase the debt securities; |
| • | the denominations in which such debt securities may be issuable, if other than denominations of $1,000 or any integral multiple
of that number; |
| • | whether the debt securities are to be issuable in the form of certificated securities (as described below) or global securities
(as described below); |
| • | the portion of principal amount that will be payable upon declaration of acceleration of the maturity date if other than the
principal amount of the debt securities; |
| • | the currency of denomination; |
| • | the designation of the currency, currencies or currency units in which payment of principal and, if applicable, premium and
interest, will be made; |
| • | if payments of principal and, if applicable, premium or interest, on the debt securities are to be made in one or more currencies
or currency units other than the currency of denomination, the manner in which the exchange rate with respect to such payments
will be determined; |
| • | if amounts of principal and, if applicable, premium and interest may be determined by reference to an index based on a currency
or currencies or by reference to a commodity, commodity index, stock exchange index or financial index, then the manner in which
such amounts will be determined; |
| • | the provisions, if any, relating to any collateral provided for such debt securities; |
| • | any addition to or change in the covenants and/or the acceleration provisions described in this prospectus or in the indenture; |
| • | any events of default, if not otherwise described below under “Default and Notice”; |
| • | the terms and conditions, if any, for conversion into or exchange for shares of our common stock or preferred stock; |
| • | any depositaries, interest rate calculation agents, exchange rate calculation agents or other agents; and |
| • | the terms and conditions, if any, upon which the debt securities shall be subordinated in right of payment to other indebtedness
of the Company. |
We may issue discount debt securities that
provide for an amount less than the stated principal amount to be due and payable upon acceleration of the maturity of such debt
securities in accordance with the terms of the indenture. We may also issue debt securities in bearer form, with or without coupons.
If we issue discount debt securities or debt securities in bearer form, we will describe material U.S. federal income tax considerations
and other material special considerations which apply to these debt securities in the applicable prospectus supplement.
We may issue debt securities denominated
in or payable in a foreign currency or currencies or a foreign currency unit or units. If we do, we will describe the restrictions,
elections, and general tax considerations relating to the debt securities and the foreign currency or currencies or foreign currency
unit or units in the applicable prospectus supplement.
Exchange and/or Conversion Rights
We may issue debt securities which can be
exchanged for or converted into shares of our common stock or preferred stock. If we do, we will describe the terms of exchange
or conversion in the prospectus supplement relating to these debt securities.
Transfer and Exchange
We may issue debt securities that will be
represented by either:
| • | “book-entry securities,” which means that there will be one or more global securities registered in the name of
a depositary or a nominee of a depositary; or |
| | | |
| • | “certificated securities,” which means that they will be represented by a certificate issued in definitive registered
form. |
We will specify in the prospectus supplement
applicable to a particular offering whether the debt securities offered will be book-entry or certificated securities.
Certificated Debt Securities
If you hold certificated debt securities
issued under an indenture, you may transfer or exchange such debt securities in accordance with the terms of the indenture. You
will not be charged a service charge for any transfer or exchange of certificated debt securities but may be required to pay an
amount sufficient to cover any tax or other governmental charge payable in connection with such transfer or exchange.
Global Securities
The debt securities of a series may be issued
in the form of one or more global securities that will be deposited with a depositary or its nominees identified in the prospectus
supplement relating to the debt securities. In such a case, one or more global securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of outstanding debt securities of the series to be represented
by such global security or securities.
Unless and until it is exchanged in whole
or in part for debt securities in definitive registered form, a global security may not be registered for transfer or exchange
except as a whole by the depositary for such global security to a nominee of the depositary and except in the circumstances described
in the prospectus supplement relating to the debt securities. The specific terms of the depositary arrangement with respect to
a series of debt securities will be described in the prospectus supplement relating to such series.
No Protection in the Event of Change of Control
Any indenture that governs our debt securities
covered by this prospectus may not have any covenant or other provision providing for a put or increased interest or otherwise
that would afford holders of our debt securities additional protection in the event of a recapitalization transaction, a change
of control of the Company, or a highly leveraged transaction. If we offer any covenants or provisions of this type with respect
to any debt securities covered by this prospectus, we will describe them in the applicable prospectus supplement.
Covenants
Unless otherwise indicated in this prospectus
or the applicable prospectus supplement, our debt securities may not have the benefit of any covenant that limits or restricts
our business or operations, the pledging of our assets or the incurrence by us of indebtedness. We will describe in the applicable
prospectus supplement any material covenants in respect of a series of debt securities.
Consolidation, Merger and Sale of Assets
We may agree in any indenture that governs
the debt securities of any series covered by this prospectus that we will not consolidate with or merge into any other person or
convey, transfer, sell or lease our properties and assets substantially as an entirety to any person, unless such person and such
proposed transaction meets various criteria, which we will describe in detail in the applicable prospectus supplement.
Defaults and Notice
The debt securities of any series will
contain events of default to be specified in the applicable prospectus supplement, which may include, without limitation:
| • | failure to pay the principal of, or premium or make-whole amount, if any, on any debt security of such series when due and
payable (whether at maturity, by call for redemption, through any mandatory sinking fund, by redemption at the option of the holder,
by declaration or acceleration or otherwise); |
| • | failure to make a payment of any interest on any debt security of such series when due; |
| • | our failure to perform or observe any other covenants or agreements in the indenture with respect to the debt securities of
such series; |
| • | certain events relating to our bankruptcy, insolvency or reorganization; and |
| • | certain cross defaults, if and as applicable. |
If an event of default with respect to debt
securities of any series shall occur and be continuing, we may agree that the trustee or the holders of at least 25% in aggregate
principal amount of the then outstanding debt securities of such series may declare the principal amount (or, if the debt securities
of such series are issued at an original issue discount, such portion of the principal amount as may be specified in the terms
of the debt securities of such series) of all debt securities of such series or such other amount or amounts as the debt securities
or supplemental indenture with respect to such series may provide, to be due and payable immediately. Any provisions pertaining
to events of default and any remedies associated therewith will be described in the applicable prospectus supplement.
Any indenture that governs our debt securities
covered by this prospectus may require that the trustee under such indenture shall, within 90 days after the occurrence of a default,
give to holders of debt securities of any series notice of all uncured defaults with respect to such series known to it. However,
in the case of a default that results from the failure to make any payment of the principal of, premium or make-whole amount, if
any, or interest on the debt securities of any series, or in the payment of any mandatory sinking fund installment with respect
to debt securities of such series, if any, the trustee may withhold such notice if it in good faith determines that the withholding
of such notice is in the interest of the holders of debt securities of such series. Any terms and provisions relating to the foregoing
types of provisions will be described in further detail in the applicable prospectus supplement.
Any indenture that governs our debt securities
covered by this prospectus will contain a provision entitling the trustee to be indemnified by holders of debt securities before
proceeding to exercise any trust or power under the indenture at the request of such holders. Any such indenture may provide that
the holders of at least a majority in aggregate principal amount of the then outstanding debt securities of any series may direct
the time, method and place of conducting any proceedings for any remedy available to the trustee, or of exercising any trust or
power conferred upon the trustee with respect to the debt securities of such series. However, the trustee under any such indenture
may decline to follow any such direction if, among other reasons, the trustee determines in good faith that the actions or proceedings
as directed may not lawfully be taken, would involve the trustee in personal liability or would be unduly prejudicial to the holders
of the debt securities of such series not joining in such direction.
Any indenture that governs our debt securities
covered by this prospectus may endow the holders of such debt securities to institute a proceeding with respect to such indenture,
subject to certain conditions, which will be specified in the applicable prospectus supplement and which may include, that the
holders of at least a majority in aggregate principal amount of the debt securities of such series then outstanding make a written
request upon the trustee to exercise its power under the indenture, indemnify the trustee and afford the trustee reasonable opportunity
to act. Even so, such holders may have an absolute right to receipt of the principal of, premium or make-whole amount, if any,
and interest when due, to require conversion or exchange of debt securities if such indenture provides for convertibility or exchangeability
at the option of the holder and to institute suit for the enforcement of such rights. Any terms and provisions relating to the
foregoing types of provisions will be described in further detail in the applicable prospectus supplement.
Modification of the Indenture
We and the trustee may modify any indenture
that governs our debt securities of any series covered by this prospectus with or without the consent of the holders of such debt
securities, under certain circumstances to be described in a prospectus supplement.
Defeasance; Satisfaction and Discharge
The prospectus supplement will outline the
conditions under which we may elect to have certain of our obligations under the indenture discharged and under which the indenture
obligations will be deemed to be satisfied.
Regarding the Trustee
We will identify the trustee and any relationship
that we may have with such trustee, with respect to any series of debt securities, in the prospectus supplement relating to the
applicable debt securities. You should note that if the trustee becomes a creditor of the Company, the indenture and the Indenture
Act limit the rights of the trustee to obtain payment of claims in certain cases, or to realize on certain property received in
respect of any such claim, as security or otherwise. The trustee and its affiliates may engage in, and will be permitted to continue
to engage in, other transactions with us and our affiliates. If, however, the trustee acquires any “conflicting interest”
within the meaning of the Indenture Act, it must eliminate such conflict or resign.
Governing Law
The law governing the indenture and the debt
securities will be identified in the prospectus supplement relating to the applicable indenture and debt securities.
WHERE YOU CAN FIND MORE INFORMATION;
INCORPORATION BY REFERENCE
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. You may read and copy information filed by us with the SEC at the SEC’s
public reference section, 100 F Street, N.E., Washington, D.C. 20549. Information regarding the operation of the public reference
section can be obtained by calling 1-800-SEC-0330. The SEC also maintains an Internet site at http://www.sec.gov that contains
reports, statements and other information about issuers, such as us, who file electronically with the SEC. We maintain a Internet
sites at www.abeonatherapeutics.com and www.plasmatechbio.com. However, the information on our Internet sites is
not incorporated by reference in this prospectus and any prospectus supplement and you should not consider it a part of this prospectus
or any accompanying prospectus supplement.
The SEC allows us to “incorporate
by reference” into this prospectus the information in other documents that we file with it. This means that we can disclose
important information to you by referring you to those documents. The information incorporated by reference is considered to be
a part of this prospectus, and information in documents that we file later with the SEC will automatically update and supersede
information contained in documents filed earlier with the SEC or contained in this prospectus. We incorporate by reference in this
prospectus the documents listed below and any future filings that we may make with the SEC under Sections 13(a), 13(c), 14, or
15(d) of the Exchange Act prior to the termination of the offering under this prospectus; provided, however, that we are not incorporating,
in each case, any documents or information deemed to have been furnished and not filed in accordance with SEC rules:
| • | Our Annual Report on Form 10-K for the year ended December 31, 2014 (filed on March 31, 2015); |
| • | Our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 (filed on May 14, 2015); |
| • | Our Current Reports on Form 8-K filed on January 5, 2015,
January 6, 2015, February 9, 2015, March 5, 2015, April 7, 2015, April 24, 2015, May
6, 2015, May 7, 2015, May 8, 2015, May 11, 2015, May 12, 2015 and May 18, 2015,
and on Form 8-K/A filed on April 27, 2015, May 13, 2015 and June 4, 2015; |
| • | Definitive Proxy Statement on Schedule 14A relating to the Company’s 2015 Annual Meeting of Shareholders (filed on April
7, 2015); and |
| • | the description of our common stock, par value $0.01 per share
contained in our Registration Statement on Form 8-A, dated and filed with the SEC on November 4, 2014, and any amendment or
report filed with the SEC for the purpose of updating the description. |
All reports and other documents we subsequently
file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering, including
all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness
of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated
by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents.
You may obtain a copy of any or all of
the documents referred to above which may have been or may be incorporated by reference into this prospectus, except for exhibits
to those documents (unless the exhibits are specifically incorporated by reference into those documents) at no cost to you by writing
or telephoning us at the following address: Investor Relations, Abeona Therapeutics Inc., 3333 Lee Parkway, Suite 600, Dallas,
Texas 75219, telephone (214) 905-5100.
LEGAL MATTERS
Unless otherwise specified in the prospectus
supplement accompanying this prospectus, Morgan, Lewis & Bockius LLP will provide opinions regarding certain legal matters.
Certain partners and attorneys of Morgan, Lewis & Bockius LLP hold shares of our common stock. Additional
legal matters may be passed upon for us or any underwriters, dealers or agents, by counsel that we will name in the applicable
prospectus supplement.
EXPERTS
The consolidated financial statements,
incorporated by reference from the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, have
been audited by Whitley Penn LLP, an independent registered public accounting firm, as stated in their report,
which is incorporated by reference in this prospectus. Such financial statements have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and auditing.
The financial statements of Abeona Therapeutics
LLC as of December 31, 2014 and 2013 and for the year ended December 31, 2014 and the period from inception (March 29, 2013) through
December 31, 2013, incorporated by reference in this prospectus, have been so incorporated in reliance on the report of BDO USA,
LLP, an independent auditor, given on the authority of said firm as experts in auditing and accounting.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other
Expenses of Issuance and Distribution.
Set forth below is an estimate (except
in the case of the registration fee) of the amount of fees and expenses to be incurred in connection with the issuance and distribution
of the offered securities registered hereby, other than underwriting discounts and commission, if any, incurred in connection with
the sale of the offered securities. All such amounts will be borne by Abeona Therapeutics Inc.
| SEC Registration Fee | |
$ | 26,145 | |
| Legal Fees and Expenses | |
$ | *** | |
| Accounting Fees and Expenses | |
$ | *** | |
| Blue Sky Fees and Expenses | |
$ | *** | |
| Printing Expenses | |
$ | *** | |
| Miscellaneous Fees and Expenses | |
$ | *** | |
| Total: | |
$ | *** | |
*** To be provided by amendment. These fees are calculated based
on the securities offered and the number of issuances and accordingly cannot be estimated at this time.
Item 15. Indemnification
of Directors and Officers.
Section 145 of the Delaware General Corporation
law empowers a Delaware corporation to indemnify its officers and directors and certain other persons to the extent and under the
circumstances set forth therein.
Our Certificate of Incorporation, as amended,
and By-laws, as amended, provide for indemnification of our officers and directors and certain other persons against liabilities
and expenses incurred by any of them in certain stated proceedings and under certain stated conditions.
The above discussion
of the Registrant’s Certificate of Incorporation, as amended, By-laws, as amended, and Section 145 of the Delaware General
Corporation Law is not intended to be exhaustive and is qualified in its entirety by such Certificate of Incorporation, By-Laws
and statute.
The Company maintains
a general liability insurance policy that covers certain liabilities of the Company’s directors and officers arising out
of claims based on acts or omissions in their capacities as directors or officers.
In any underwriting
agreement that the Company enters into in connection with the sale of common stock being registered hereby, the underwriters will
agree to indemnify, under certain conditions, the Company, its directors, its officers and persons who control the Company within
the meaning of the Securities Act, against certain liabilities.
Item 16. Exhibits
INDEX TO EXHIBITS
| 1.1** |
|
Form of Underwriting Agreement |
| |
|
|
| 2.1 |
|
Amended and Restated Agreement of Merger and Plan of Reorganization between the Registrant and Chemex Pharmaceuticals, Inc., dated as of October 31, 1995 (Incorporated by reference to Exhibit A of our Registration Statement on Form S-4 dated December 20, 1995, Commission File No. 33-64031) |
| |
|
|
| 2.2 |
|
Agreement and Plan of Merger, by and among the Registrant, Somanta Acquisition Corporation, Somanta Pharmaceuticals, Inc., Somanta Incorporated and Somanta Limited, dated April 19, 2007 (Incorporated by reference to Exhibit 2.1 to our Form 8-K dated April 18, 2007) |
| |
|
|
| 2.3 |
|
Agreement and Plan of Merger, by and among the Registrant, MACM Acquisition Corporation and MacroChem Corporation, dated July 9, 2008 (Incorporated by reference to Exhibit 2.3 of our Form 10-Q for the quarter ended June 30, 2008) |
| 3.1 |
|
Certificate of Incorporation (Incorporated by reference to Exhibit 3(a) of our Form 8-K dated July 12, 1989, Commission File Number 9-9134) |
| |
|
|
| 3.2 |
|
Certificate of Amendment of Certificate of Incorporation filed August 13, 1992 (Incorporated by reference to Exhibit 3.3 of our Form 10-K for year ended December 31, 1995) |
| |
|
|
| 3.3 |
|
Certificate of Merger filed January 25, 1996 (Incorporated by reference to Exhibit E of our Registration Statement on Form S-4 dated December 20, 1995, Commission File No. 33-64031) |
| |
|
|
| 3.4 |
|
Certificate of Amendment of Certificate of Incorporation filed January 25, 1996 (Incorporated by reference to Exhibit E of our Registration Statement on Form S-4 dated December 20, 1995, Commission File No. 33-64031) |
| |
|
|
| 3.5 |
|
Certificate of Amendment of Certificate of Incorporation filed July 18, 1996 (Incorporated by reference to Exhibit 3.7 of our Form 10-K for the year ended December 31, 1996) |
| |
|
|
| 3.6 |
|
Certificate of Amendment of Certificate of Incorporation filed June 18, 1998. (Incorporated by reference to Exhibit 3.8 of our Form 10-Q for the quarter ended June 30, 1998) |
| |
|
|
| 3.7 |
|
Certificate of Amendment of Certificate of Incorporation filed July 31, 2000 (Incorporated by reference to Exhibit 3.8 of our Form 10-Q for the quarter ended March 31, 2001) |
| |
|
|
| 3.8 |
|
Certificate of Designations of Series A Junior Participating Preferred Stock filed November 7, 2001 (Incorporated by reference to Exhibit 4.1.H of our Registration Statement on Form S-8 dated December 14, 2001, Commission File No. 333-75136) |
| |
|
|
| 3.9 |
|
Amended and Restated Bylaws (Incorporated by reference to Exhibit 2.1 of our Form 10-Q for the quarter ended June 30, 1996) |
| |
|
|
| 3.10 |
|
Certificate of Designation, Rights and Preferences of Series A Cumulative Convertible Preferred Stock filed November 9, 2007 (Incorporated by reference to Exhibit 3.10 to our Form SB-2 filed on December 10, 2007) |
| |
|
|
| 3.11 |
|
Certificate of Amendment to Certificate of Designations, Rights and Preferences of Series A Cumulative Convertible Preferred Stock filed June 11, 2008 (Incorporated by reference to Exhibit 3.11 of our Form 10-Q for the quarter ended June 30, 2008) |
| |
|
|
| 3.12 |
|
Certificate of Designations, Rights and Preferences of Series B Cumulative Convertible Preferred Stock filed October 26, 2012 (Incorporated by reference to Exhibit 10.3 of our Form 8-K filed October 26, 2012) |
| |
|
|
| 3.13 |
|
Certificate of Amendment of Certificate of Incorporation filed July 1, 2013 increasing the aggregate number of shares of Common Stock which we have authority to issue to Two Hundred Million (200,000,000) shares with a par value of one cent ($0.01) per share (Incorporated by reference to Exhibit 3.3 of our Form 10-Q for the quarter ended June 30, 2014). |
| |
|
|
| 3.14 |
|
Certificate of Amendment of Certificate of Incorporation filed October 23, 2014 (Incorporated by reference to Exhibit 3.14 of our Form 8-K filed October 23, 2014) |
| |
|
|
| 3.15 |
|
Certificate of Amendment to Certificate of Designations, Rights and Preferences of Series A Cumulative Convertible Preferred Stock (Incorporated by reference to Exhibit 3.15 of our Form 8-K filed on October 23, 2014) |
| |
|
|
| 3.16 |
|
Amendment to Bylaws (Incorporated by reference to Exhibit 3.1 of our Form 8-K filed January 1, 2015) |
| |
|
|
| 3.17 |
|
Amendment to Bylaws (Incorporated by reference to Exhibit 3.1 of our Form 8-K filed March 2, 2015) |
| |
|
|
| 4.1** |
|
Form of Certificate of Designations, Rights and Preferences |
| |
|
|
| 4.2** |
|
Form of Indenture |
| |
|
|
| 4.3 |
|
Form of stock certificate evidencing shares of common stock, $0.01 par value per share, of the Company (Incorporated by reference to Exhibit 4.1 of the Company’s Form S-3 field on May 14, 2015) |
| 4.4** |
|
Form of stock certificate evidencing shares of preferred stock, $0.01 par value per share, of the Company |
| |
|
|
| 4.5** |
|
Form of Common Stock Warrant Agreement and Warrant Certificate |
| |
|
|
| 4.6** |
|
Form of Preferred Stock Warrant Agreement and Warrant Certificate |
| |
|
|
| 4.7** |
|
Form of Debt Securities Warrant Agreement and Warrant Certificate |
| |
|
|
| 4.8 |
|
Form of Warrant dated February 16, 2006, issued by the Company to certain Purchasers (Incorporated by reference to Exhibit 10.31 of the Company’s Form 10-Q for the quarter ended March 31, 2006) |
| |
|
|
| 4.9 |
|
Form of Warrant dated October 24, 2006, issued by the Company to certain Purchasers (Incorporated by reference to Exhibit 10.27 of the Company’s Form 10-KSB filed on April 2, 2007) |
| |
|
|
| 4.10 |
|
Form of Warrant December 6, 2006, issued by the Company to certain Purchasers (Incorporated by reference to Exhibit 10.32 of the Company’s Form 10-KSB filed on April 2, 2007) |
| |
|
|
| 4.11 |
|
Board Designation Agreement dated November 15, 2007, between the Company and SCO Capital Partners LLC (Incorporated by reference to Exhibit 10.26 of the Company’s Form S-1 filed on March 11, 2008) |
| |
|
|
| 4.12 |
|
Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.29 of the Company’s Form S-1 filed on January 15, 2010) |
| |
|
|
| 4.13 |
|
Form of Warrant (Incorporated by reference to Exhibit 10.30 of the Company’s Form S-1 filed on January 15, 2010) |
| |
|
|
| 4.14 |
|
Form of Securities Purchase Agreement dated as of December 10, 2010 by and among the Company and the Purchasers named therein (Incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on December 14, 2010) |
| |
|
|
| 4.15 |
|
Form of Common Stock Warrant issued by the Company (Incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on December 14, 2010) |
| |
|
|
| 4.16 |
|
Form of Securities Purchase Agreement dated as of November 1, 2011 by and among the Company and the Purchasers named therein (Incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on November 10, 2011) |
| |
|
|
| 4.17 |
|
Form of Common Stock Warrant (Five Year Warrant) issued by the Company (Incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed on November 10, 2011) |
| |
|
|
| 4.18 |
|
Amendment No.1 to Warrant Agreement dated February 10, 2012 by and among the Company and warrant holders including certain affiliates named therein extending the term of certain warrants until 2015 (Incorporated by reference to Exhibit 99.1 of the Company’s Form 8-K filed on February 10, 2012) |
| |
|
|
| 4.19 |
|
Preferred Stock and Warrant Purchase Agreement dated October 25, 2012 by and among the Company and the Purchasers named therein (Incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed October 26, 2012) |
| |
|
|
| 4.20 |
|
Investor Rights Agreement dated October 25, 2012, between the Company and certain Purchasers (Incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on October 26, 2012) |
| |
|
|
| 4.21 |
|
Form of Common Stock Warrant issued by the Company (Incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed on October 26, 2012) |
| |
|
|
| 4.22 |
|
Unsecured Grid Note $250,000, dated September 10, 2014, by and between the Company and SCO Capital Partners LLC (Incorporated by reference to Exhibit 10.33 of the Company’s Form 8-K filed October 23, 2014) |
| |
|
|
| 4.23 |
|
Unsecured Grid Note $250,000, dated December 1, 2014, by and between us and SCO Capital Partners LLC (Incorporated by reference to Exhibit 10.34 of our Form 8-K filed December 3, 2014) |
| |
|
|
| 4.24 |
|
Form of Warrant Agreement between the Company and American Stock Transfer & Trust Company (Incorporated by reference to Exhibit 4.1 of the Company’s Pre-effective Amendment No. 1 to Form S-1 filed October 24, 2014) |
| 5.1 |
|
Opinion of Morgan, Lewis & Bockius LLP (filed herewith) |
| |
|
|
| 23.1 |
|
Consent of Whitley Penn LLP (filed herewith) |
| |
|
|
| 23.2 |
|
Consent of BDO USA, LLP (filed herewith) |
| |
|
|
| 23.3 |
|
Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.1) |
| |
|
|
| 24 |
|
Powers of Attorney (included on signature page) |
| |
|
|
| 25.1** |
|
Form T-1 Statement of Eligibility of Trustee Under Indenture |
| ** | To be filed, if necessary, subsequent to the effectiveness of this Registration Statement by an amendment to this
Registration Statement or incorporated by reference pursuant to a Current Report on Form 8-K in connection with
an offering of securities, as appropriate. |
Item 17. Undertakings.
(a) The undersigned
registrant hereby undertakes:
(1) To file, during any period in which
offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required
by Section 10(a)(3) of the Securities Act.
(ii) To reflect in the prospectus
any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation
of Registration Fee” table in the effective registration statement.
(iii) To include any material information
with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such
information in the registration statement.
provided, however, that paragraphs
(i), (ii) and (iii) do not apply if the registration statement is on Form S-3 and the information required to be included
in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement,
or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement;
(2) That, for the purpose of determining
any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means
of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(5) That, for the purpose of determining
liability under the Securities Act to any purchaser:
(i) each prospectus filed by the registrant
pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
(ii) each prospectus required to be
filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating
to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required
by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities
in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person
that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating
to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date;
and
(6) That, for the purpose of determining
liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will
be considered to offer or sell such securities to such purchaser:
(i) any preliminary prospectus or
prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) any free writing prospectus relating
to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) the portion of any other free
writing prospectus relating to the offering containing material information about the undersigned registrant or its securities
provided by or on behalf of the undersigned registrant; and
(iv) any other communication that
is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The undersigned registrant hereby undertakes
that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to
the provisions described under Item 15 above, or otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, the registrant, Abeona Therapeutics Inc., certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, State of Texas, on this 19th
day of June, 2015.
| |
ABEONA THERAPEUTICS INC. |
| |
|
|
| |
By: |
/s/ Steven H. Rouhandeh |
| |
|
Steven H. Rouhandeh |
| |
|
Executive Chairman (Principal
Executive Officer) |
| |
|
|
| |
By: |
/s/ Stephen B. Thompson |
| |
|
Stephen B. Thompson |
| |
|
Vice President Finance (Principal
Financial and Accounting Officer) |
POWER OF ATTORNEY
KNOW ALL PERSONS BY
THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Steven H. Rouhandeh and Jeffrey
B. Davis, and each of them, as such person’s true and lawful attorneys-in-fact and agents with full power of substitution
and resubstitution, for such person and in such person’s name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) and additions to this Registration Statement on Form S-3 and to file
the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission,
and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as such person might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or such person’s substitute or substitutes may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated as of the 19th
day of June,
2015.
| Signature |
|
Capacity |
|
Date |
| /s/ Steven H. Rouhandeh |
|
Executive Chairman and
Chairman of the Board |
|
June 19, 2015 |
| Steven H. Rouhandeh |
|
(principal executive officer) |
|
|
| |
|
|
|
|
| /s/ Stephen B. Thompson |
|
Vice President Finance
(principal financial and |
|
June 19, 2015 |
| Stephen B. Thompson |
|
accounting officer) |
|
|
| |
|
|
|
|
| /s/ Jeffrey B. Davis |
|
Director |
|
June 19, 2015 |
| Jeffrey B. Davis |
|
|
|
|
| |
|
|
|
|
| /s/ Mark J. Ahn |
|
Director |
|
June 19, 2015 |
| Mark J. Ahn |
|
|
|
|
| |
|
|
|
|
| /s/ Mark J. Alvino |
|
Director |
|
June 19, 2015 |
| Mark J. Alvino |
|
|
|
|
| |
|
|
|
|
| /s/ Stephen B. Howell |
|
Director |
|
June 19, 2015 |
| Stephen B. Howell |
|
|
|
|
| |
|
|
|
|
| /s/ Todd Wider |
|
Director |
|
|
| Todd Wider |
|
|
|
June 19, 2015 |
INDEX TO EXHIBITS
| 1.1** |
|
Form of Underwriting Agreement |
| |
|
|
| 2.1 |
|
Amended and Restated Agreement of Merger and Plan of Reorganization between the Registrant and Chemex Pharmaceuticals, Inc., dated as of October 31, 1995 (Incorporated by reference to Exhibit A of our Registration Statement on Form S-4 dated December 20, 1995, Commission File No. 33-64031) |
| |
|
|
| 2.2 |
|
Agreement and Plan of Merger, by and among the Registrant, Somanta Acquisition Corporation, Somanta Pharmaceuticals, Inc., Somanta Incorporated and Somanta Limited, dated April 19, 2007 (Incorporated by reference to Exhibit 2.1 to our Form 8-K dated April 18, 2007) |
| |
|
|
| 2.3 |
|
Agreement and Plan of Merger, by and among the Registrant, MACM Acquisition Corporation and MacroChem Corporation, dated July 9, 2008 (Incorporated by reference to Exhibit 2.3 of our Form 10-Q for the quarter ended June 30, 2008) |
| |
|
|
| 3.1 |
|
Certificate of Incorporation (Incorporated by reference to Exhibit 3(a) of our Form 8-K dated July 12, 1989, Commission File Number 9-9134) |
| |
|
|
| 3.2 |
|
Certificate of Amendment of Certificate of Incorporation filed August 13, 1992 (Incorporated by reference to Exhibit 3.3 of our Form 10-K for year ended December 31, 1995) |
| |
|
|
| 3.3 |
|
Certificate of Merger filed January 25, 1996 (Incorporated by reference to Exhibit E of our Registration Statement on Form S-4 dated December 20, 1995, Commission File No. 33-64031) |
| |
|
|
| 3.4 |
|
Certificate of Amendment of Certificate of Incorporation filed January 25, 1996 (Incorporated by reference to Exhibit E of our Registration Statement on Form S-4 dated December 20, 1995, Commission File No. 33-64031) |
| |
|
|
| 3.5 |
|
Certificate of Amendment of Certificate of Incorporation filed July 18, 1996 (Incorporated by reference to Exhibit 3.7 of our Form 10-K for the year ended December 31, 1996) |
| |
|
|
| 3.6 |
|
Certificate of Amendment of Certificate of Incorporation filed June 18, 1998. (Incorporated by reference to Exhibit 3.8 of our Form 10-Q for the quarter ended June 30, 1998) |
| |
|
|
| 3.7 |
|
Certificate of Amendment of Certificate of Incorporation filed July 31, 2000 (Incorporated by reference to Exhibit 3.8 of our Form 10-Q for the quarter ended March 31, 2001) |
| |
|
|
| 3.8 |
|
Certificate of Designations of Series A Junior Participating Preferred Stock filed November 7, 2001 (Incorporated by reference to Exhibit 4.1.H of our Registration Statement on Form S-8 dated December 14, 2001, Commission File No. 333-75136) |
| |
|
|
| 3.9 |
|
Amended and Restated Bylaws (Incorporated by reference to Exhibit 2.1 of our Form 10-Q for the quarter ended June 30, 1996) |
| |
|
|
| 3.10 |
|
Certificate of Designation, Rights and Preferences of Series A Cumulative Convertible Preferred Stock filed November 9, 2007 (Incorporated by reference to Exhibit 3.10 to our Form SB-2 filed on December 10, 2007) |
| |
|
|
| 3.11 |
|
Certificate of Amendment to Certificate of Designations, Rights and Preferences of Series A Cumulative Convertible Preferred Stock filed June 11, 2008 (Incorporated by reference to Exhibit 3.11 of our Form 10-Q for the quarter ended June 30, 2008) |
| |
|
|
| 3.12 |
|
Certificate of Designations, Rights and Preferences of Series B Cumulative Convertible Preferred Stock filed October 26, 2012 (Incorporated by reference to Exhibit 10.3 of our Form 8-K filed October 26, 2012) |
| |
|
|
| 3.13 |
|
Certificate of Amendment of Certificate of Incorporation filed July 1, 2013 increasing the aggregate number of shares of Common Stock which we have authority to issue to Two Hundred Million (200,000,000) shares with a par value of one cent ($0.01) per share (Incorporated by reference to Exhibit 3.3 of our Form 10-Q for the quarter ended June 30, 2014). |
| |
|
|
| 3.14 |
|
Certificate of Amendment of Certificate of Incorporation filed October 23, 2014 (Incorporated by reference to Exhibit 3.14 of our Form 8-K filed October 23, 2014) |
| 3.15 |
|
Certificate of Amendment to Certificate of Designations, Rights and Preferences of Series A Cumulative Convertible Preferred Stock (Incorporated by reference to Exhibit 3.15 of our Form 8-K filed on October 23, 2014) |
| |
|
|
| 3.16 |
|
Amendment to Bylaws (Incorporated by reference to Exhibit 3.1 of our Form 8-K filed January 1, 2015) |
| |
|
|
| 3.17 |
|
Amendment to Bylaws (Incorporated by reference to Exhibit 3.1 of our Form 8-K filed March 2, 2015) |
| |
|
|
| 4.1** |
|
Form of Certificate of Designations, Rights and Preferences |
| |
|
|
| 4.2** |
|
Form of Indenture |
| |
|
|
| 4.3 |
|
Form of stock certificate evidencing shares of common stock, $0.01 par value per share, of the Company (Incorporated by reference to Exhibit 4.1 of the Company’s Form S-3 field on May 14, 2015) |
| |
|
|
| 4.4** |
|
Form of stock certificate evidencing shares of preferred stock, $0.01 par value per share, of the Company |
| |
|
|
| 4.5** |
|
Form of Common Stock Warrant Agreement and Warrant Certificate |
| |
|
|
| 4.6** |
|
Form of Preferred Stock Warrant Agreement and Warrant Certificate |
| |
|
|
| 4.7** |
|
Form of Debt Securities Warrant Agreement and Warrant Certificate |
| |
|
|
| 4.8 |
|
Form of Warrant dated February 16, 2006, issued by the Company to certain Purchasers (Incorporated by reference to Exhibit 10.31 of the Company’s Form 10-Q for the quarter ended March 31, 2006) |
| |
|
|
| 4.9 |
|
Form of Warrant dated October 24, 2006, issued by the Company to certain Purchasers (Incorporated by reference to Exhibit 10.27 of the Company’s Form 10-KSB filed on April 2, 2007) |
| |
|
|
| 4.10 |
|
Form of Warrant December 6, 2006, issued by the Company to certain Purchasers (Incorporated by reference to Exhibit 10.32 of the Company’s Form 10-KSB filed on April 2, 2007) |
| |
|
|
| 4.11 |
|
Board Designation Agreement dated November 15, 2007, between the Company and SCO Capital Partners LLC (Incorporated by reference to Exhibit 10.26 of the Company’s Form S-1 filed on March 11, 2008) |
| |
|
|
| 4.12 |
|
Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.29 of the Company’s Form S-1 filed on January 15, 2010) |
| |
|
|
| 4.13 |
|
Form of Warrant (Incorporated by reference to Exhibit 10.30 of the Company’s Form S-1 filed on January 15, 2010) |
| |
|
|
| 4.14 |
|
Form of Securities Purchase Agreement dated as of December 10, 2010 by and among the Company and the Purchasers named therein (Incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on December 14, 2010) |
| |
|
|
| 4.15 |
|
Form of Common Stock Warrant issued by the Company (Incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on December 14, 2010) |
| |
|
|
| 4.16 |
|
Form of Securities Purchase Agreement dated as of November 1, 2011 by and among the Company and the Purchasers named therein (Incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on November 10, 2011) |
| |
|
|
| 4.17 |
|
Form of Common Stock Warrant (Five Year Warrant) issued by the Company (Incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed on November 10, 2011) |
| |
|
|
| 4.18 |
|
Amendment No.1 to Warrant Agreement dated February 10, 2012 by and among the Company and warrant holders including certain affiliates named therein extending the term of certain warrants until 2015 (Incorporated by reference to Exhibit 99.1 of the Company’s Form 8-K filed on February 10, 2012) |
| |
|
|
| 4.19 |
|
Preferred Stock and Warrant Purchase Agreement dated October 25, 2012 by and among the Company and the Purchasers named therein (Incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed October 26, 2012) |
| 4.20 |
|
Investor Rights Agreement dated October 25, 2012, between the Company and certain Purchasers (Incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on October 26, 2012) |
| |
|
|
| 4.21 |
|
Form of Common Stock Warrant issued by the Company (Incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed on October 26, 2012) |
| |
|
|
| 4.22 |
|
Unsecured Grid Note $250,000, dated September 10, 2014, by and between the Company and SCO Capital Partners LLC (Incorporated by reference to Exhibit 10.33 of the Company’s Form 8-K filed October 23, 2014) |
| |
|
|
| 4.23 |
|
Unsecured Grid Note $250,000, dated December 1, 2014, by and between us and SCO Capital Partners LLC (Incorporated by reference to Exhibit 10.34 of our Form 8-K filed December 3, 2014) |
| |
|
|
| 4.24 |
|
Form of Warrant Agreement between the Company and American Stock Transfer & Trust Company (Incorporated by reference to Exhibit 4.1 of the Company’s Pre-effective Amendment No. 1 to Form S-1 filed October 24, 2014) |
| |
|
|
| 5.1 |
|
Opinion of Morgan, Lewis & Bockius LLP (filed herewith) |
| |
|
|
| 23.1 |
|
Consent of Whitley Penn LLP (filed herewith) |
| |
|
|
| 23.2 |
|
Consent of BDO USA, LLP (filed herewith) |
| |
|
|
| 23.3 |
|
Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.1) |
| |
|
|
| 24 |
|
Powers of Attorney (included on signature page) |
| |
|
|
| 25.1** |
|
Form T-1 Statement of Eligibility of Trustee Under Indenture |
| ** | To be filed, if necessary, subsequent to the effectiveness of this
Registration Statement by an amendment to this Registration Statement or incorporated
by reference pursuant to a Current Report on Form 8-K in connection with an offering
of securities, as appropriate. |
EXHIBIT 5.1
Morgan, Lewis & Bockius llp
One Federal Street
Boston, Massachusetts 02110-1726
Tel. +1.617.341.7700
Fax: +1.617.341.7701
www.morganlewis.com
June 19, 2015
Abeona Therapeutics Inc.
3333 Lee Parkway, Suite 600
Dallas, Texas 75219
| Re: | Registration Statement on Form S-3 of Abeona Therapeutics Inc. |
Ladies and Gentlemen:
We have acted as counsel to Abeona Therapeutics
Inc., a Delaware corporation (the “Company”), in connection with the registration under the Securities Act of
1933, as amended (the “Act”), by a Registration Statement on Form S-3, dated June 19, 2015 (as may be amended,
the “Registration Statement”), of an indeterminate amount of the Company’s securities having an aggregate
public offering price of up to $225,000,000 to be offered from time to time pursuant to Rule 415 of the Act. Such securities may
include (i) shares of the Company’s common stock, par value $0.01 per share (the
“Common Stock”), (ii) shares of the Company’s preferred stock, par value $0.01 per share (the “Preferred
Stock”), (iii) one or more series of the Company’s debt securities (collectively, “Debt Securities”),
(iv) warrants to purchase Common Stock, Preferred Stock or Debt Securities (the “Warrants” and, together
with the Common Stock, Preferred Stock and Debt Securities, the “Securities”), and (v) any combination of two
or more of the above Securities. The Registration Statement will be supplemented by one or more prospectus supplements.
The Debt Securities are to be issued pursuant
to a senior indenture and/or a subordinated indenture, a form of which will be filed as an exhibit to the Registration Statement
(the “Indenture”) and is to be entered into, in each case, between the Company and a trustee (the “Trustee”).
Each indenture may be supplemented, as applicable, in connection with the issuance of each series of Debt Securities by a supplemental
indenture or other appropriate action of the Company creating such series. The Securities may be sold pursuant to an underwriting
agreement, placement agency agreement, subscription agreement or other contract, which will be in substantially the form to be
filed as an exhibit to a report filed pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
or an amendment to the Registration Statement. The Common Stock, Preferred Stock, Warrants and Debt Securities are to be issued
in forms to be filed as exhibits to a report filed pursuant to the Exchange Act or an amendment to the Registration Statement.
As to all matters of fact (including factual
conclusions and characterizations and descriptions of purpose, intention or other state of mind), we have relied, with your permission,
entirely upon written actions by the board of directors of the Company and certificates of certain officers of the Company and
have assumed, without independent inquiry, the accuracy of those certificates and written actions by the board of directors of
the Company.
As counsel to the Company, in rendering
the opinions hereinafter expressed, we have examined and relied upon originals or copies of such corporate records, agreements,
documents and instruments as we have deemed necessary or advisable for purposes of this opinion, including (i) the certificate
of incorporation and bylaws of the Company, and (ii) the Registration Statement.
We have assumed:
| (i) | the genuineness of all signatures, the conformity to the originals of all documents reviewed by
us as copies, the authenticity and completeness of all original documents reviewed by us in original or copy form and the legal
competence of each individual executing any document; |
| (ii) | that any shares of Common Stock issued pursuant to the Registration Statement from time to time
will not exceed the maximum authorized number of shares of Common Stock under the current Certificate of Incorporation of the Company,
as the same may have been amended, minus that number of shares of Common Stock that may have been issued and are outstanding, or
are reserved for issuance for other purposes, at such time; |
| (iii) | that any shares of Preferred Stock issued pursuant to the Registration Statement from time to time
will not exceed the maximum authorized number of shares of Preferred Stock under the current Certificate of Incorporation of the
Company, as the same may have been amended, minus that number of shares of Preferred Stock that may have been issued and are outstanding,
or are reserved for issuance for other purposes, at such time; |
| (iv) | that at least $2,500,000 will be advanced to the Company in payment of the consideration for the
Debt Securities; |
| (v) | that (1) the execution, delivery and performance by the Company of the applicable Indenture will
not, and the execution, delivery and performance by the Company of any warrant agreement or other similar agreement entered into
in connection with the issuance of any Securities will not, violate the laws of the jurisdiction of incorporation of the Company
or any other applicable laws (excepting the internal, substantive laws of the State of New York and, to the limited extent provided
herein, the Delaware General Corporation Law (the “DGCL”)); and (2) the execution, delivery and performance
by the Company of the applicable Indenture will not, and the execution, delivery and performance by the Company of any warrant
agreement or other similar agreement entered into in connection with the issuance of any Securities will not, constitute a breach
or violation of any agreement or instrument that is binding upon the Company; and |
| (vi) | that, at the time of each issuance and sale of the Securities, the Company will continue to be
validly existing and in good standing under the laws of its jurisdiction of organization with the requisite corporate power and
authority to issue and sell such Securities. |
This opinion is limited solely to the DGCL,
as applied by courts located in Delaware, and the internal, substantive laws of the State of New York as applied by courts located
in New York without regard to choice of law, in each case to the extent that the same may apply to or govern the transactions contemplated
by the Registration Statement. We express no opinion as to the effect of events occurring, circumstances arising, or changes of
law becoming effective or occurring, after the date hereof on the matters addressed in this opinion.
Each opinion set forth below with respect
to enforceability is subject to the following general qualifications:
| (a) | enforceability may be limited by the effect of applicable bankruptcy, insolvency, reorganization,
moratorium, marshaling, fraudulent conveyance or other similar laws and rules of law affecting the enforcement generally of creditors’
or secured parties’ rights and remedies; |
| (b) | rights to indemnification and contribution may be limited by applicable law or equitable principles,
and exculpatory provisions and waivers of the benefits of statutory provisions may be limited on public policy grounds; |
| (c) | enforceability may be limited by general principles of equity, including without limitation concepts
of materiality, reasonableness, good faith and fair dealing, and the possible unavailability of specific performance or injunctive
relief and limitation of rights of acceleration, regardless of whether such enforceability is considered in a proceeding in equity
or at law; and |
| (d) | we express no opinion with respect to the enforceability of: |
| i. | consents to, or restrictions upon, judicial relief or, except to the extent that such waivers or
consents are made enforceable by New York General Obligations Law Section 5-1402 (as applied by a New York State court), jurisdiction
or venue; |
| ii. | advance waivers of claims, defenses, rights granted by law, or notice, opportunity for hearing,
evidentiary requirements, statutes of limitation, trial by jury or at law, or other procedural rights; |
| iii. | waivers of broadly or vaguely stated rights; and |
| iv. | provisions for liquidated damages, default interest, late charges, monetary penalties, make-whole
premiums or other economic remedies to the extent such provisions are deemed to constitute a penalty or a forfeiture. |
Based on such examination and subject to
the foregoing, we are of the opinion that:
| 1. | With respect to shares of Common Stock, when both (a) the Board of Directors of the Company or
a duly constituted and acting committee thereof (such Board of Directors or committee being hereinafter referred to as the “Board”)
has taken all necessary corporate action to approve the issuance and terms of the offering of shares of Common Stock and related
matters, and (b) certificates representing the shares of Common Stock have been duly executed, countersigned, registered and delivered
either (i) in accordance with the applicable definitive placement agency, underwriting, subscription or similar agreement approved
by the Board, upon payment of the consideration therefor (not less than the par value of the Common Stock), (ii) upon the exercise
of Warrants to purchase Common Stock and payment of the consideration therefor (not less than the par value of the Common Stock)
provided for therein, or (iii) upon conversion or exercise of any other Security, in accordance with the terms of such Security
or the instrument governing such Security providing for such conversion or exercise as approved by the Board, for the stated consideration
(not less than the par value of the Common Stock), then the shares of Common Stock will be validly issued, fully paid and nonassessable. |
| 2. | With respect to any particular series of shares of Preferred Stock, when both (a) the Board has
taken all necessary corporate action to approve the issuance and terms of the shares of Preferred Stock, the terms of the offering
thereof, and related matters, including the adoption of a certificate of designation relating to such Preferred Stock conforming
to the DGCL (a “Certificate”) and the Certificate has been filed with the Secretary of State of the State of
Delaware, and (b) certificates representing the shares of Preferred Stock have been duly executed, countersigned, registered and
delivered either (i) in accordance with the applicable definitive placement agency, underwriting, subscription or similar agreement
approved by the Board, upon payment of the consideration therefor (not less than the par value of the Preferred Stock), (ii) upon
the exercise of Warrants to purchase Preferred Stock and payment of the consideration therefor (not less than the par value of
the Preferred Stock) provided for therein, or (iii) upon conversion or exercise of any other Security, in accordance with the terms
of such Security or the instrument governing such Security providing for such conversion or exercise as approved by the Board and
for the stated consideration (not less than the par value of the Preferred Stock), then the shares of Preferred Stock will be validly
issued, fully paid and nonassessable. |
| 3. | With respect to the Warrants, when both (a) the Board has taken all necessary corporate action
to approve the issuance and terms of the Warrants and related matters, and (b) the Warrants have been duly executed and delivered
against payment therefor, pursuant to the applicable definitive placement agency, underwriting, subscription, warrant or similar
agreement duly authorized, executed and delivered by the Company and any applicable warrant agent and the certificates for the
Warrants have been duly executed and delivered by the Company and any applicable warrant agent, then the Warrants will constitute
valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. |
| 4. | With respect to Debt Securities to be issued under the Indenture, when (a) the Trustee is qualified
to act as Trustee under any Indenture, (b) the Trustee has duly authorized, validly executed and delivered the Indenture, (c) the
applicable Indenture has been duly authorized and validly executed and delivered by the Company to the Trustee, (d) the applicable
Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended, (e) the Board has taken all necessary corporate
action to approve the issuance and terms of such Debt Securities, the terms of the offering thereof and related matters, and (f)
such Debt Securities have been duly executed, authenticated, issued and delivered in accordance with the provisions of the applicable
Indenture, and the applicable definitive placement agency, underwriting, subscription or similar agreement approved by the Board,
or upon the exercise of Warrants to purchase Debt Securities, upon payment of the consideration therefor provided for therein,
such Debt Securities will constitute valid and binding obligations of the Company, enforceable against the Company in accordance
with their terms and entitled to the benefits of the applicable Indenture. |
We hereby consent to the filing of this
opinion as an exhibit to the Registration Statement and to the reference to this firm under the heading “Legal Matters”
in the Prospectus included in the Registration Statement. In giving this consent, we do not admit that we are in the category of
persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Securities and Exchange Commission
thereunder. In rendering this opinion, we are opining only as to the specific legal issues expressly set forth herein, and no opinion
shall be inferred as to any other matter or matters. This opinion is intended solely for use in connection with the issuance and
sale of the Securities subject to the Registration Statement and is not to be relied upon for any other purpose.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
MORGAN, LEWIS & BOCKIUS LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
We consent to the inclusion in this Registration
Statement on Form S-3 of PlasmaTech Biopharmaceuticals, Inc. of our report dated March 31, 2015 relating to our audits of the consolidated
financial statements of PlasmaTech Biopharmaceuticals, Inc. as of and for the years ended December 31, 2014 and 2013. We also consent
to the reference to our firm under the heading “Experts” in such Registration Statement.
/s/ Whitley Penn, LLP
Dallas, Texas
June 19, 2015
EXHIBIT
23.2
Consent
of Independent Auditor
Abeona
Therapeutics, Inc.
Dallas,
Texas
We
hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement on Form
S-3 of our report dated May 16, 2015, relating to the financial statements of Abeona Therapeutics LLC. appearing in the Current
Report on Form 8-K/A filed by Abeona Therapeutics, Inc. (f/k/a PlasmaTech Biopharmaceuticals, Inc.) on June 4, 2015.
We
also consent to the reference to us under the caption “Experts” in the Prospectus.
/s/
BDO USA, LLP
Cleveland,
Ohio
June
19, 2015
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