Filed Pursuant to Rule 424(b)(3)
File No. 333-54138
PROSPECTUS
834,250 Shares
[LOGO] IMMTECH INTERNATIONAL, INC.
Common Stock
Stockholders of Immtech International, Inc. (the "Company") named under
the caption "Selling Stockholders" may offer and sell up to 834,250 shares of
the Company's common stock (the "Shares"). The Company will receive no proceeds
from the sale of Shares offered by this Prospectus.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-1 OF THIS
PROSPECTUS BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED.
The Selling Stockholders may sell the Shares from time to time in
transactions occurring either on or off the NASDAQ National Market System at
prevailing market prices or at negotiated prices. Sales may be made through
brokers or through dealers, who are expected to receive customary commissions or
discounts. The Company will not receive any of the proceeds from such sales. No
period of time has been fixed within which Shares may be offered or sold. The
Company's obligation to keep the Registration Statement of which this Prospectus
is a part effective expires as to 584,250 Shares six months from the date of
this Prospectus and on March 15, 2006 as to the remaining 250,000 Shares, or
sooner if all Shares are sold.
The Company's common stock is traded on the NASDAQ National Market
System under the symbol "IMMT". The last reported sale price of the Company's
common stock on November 27, 2001, was $5.63.
The address of the Company's principal executive offices is 150 Fairway
Drive, Suite 150, Vernon Hills, Illinois 60061, and the Company's telephone
number is (847) 573-0033.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS NOVEMBER 28, 2001.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS,
INCORPORATED BY REFERENCE OR PROVIDED BY SUPPLEMENT. WE HAVE NOT AUTHORIZED
ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. THIS PROSPECTUS IS NOT AN
OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION CONTAINED
IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS
OF THE TIME OF THE DELIVERY OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.
TABLE OF CONTENTS
RISK FACTORS..............................................................
WHERE YOU CAN FIND MORE INFORMATION.......................................
CERTAIN INFORMATION.......................................................
FORWARD-LOOKING STATEMENTS................................................
THE COMPANY...............................................................
USE OF PROCEEDS...........................................................
SELLING STOCKHOLDERS......................................................
PLAN OF DISTRIBUTION......................................................
LEGAL MATTERS.............................................................
EXPERTS...................................................................
GLOSSARY..................................................................
RISK FACTORS
An investment in the securities offered hereby (the "Shares") involves a
high degree of risk. In addition to the other information contained in this
Prospectus, the following risk factors should be considered carefully in
evaluating the Company and its business before purchasing the Shares.
THE COMPANY IS A DEVELOPMENT STAGE COMPANY, AND THERE IS NO ASSURANCE THAT THE
COMPANY WILL SUCCESSFULLY DEVELOP A COMMERCIALLY VIABLE PRODUCT.
The Company is at an early stage of clinical development activities
required for drug approval and commercialization. Since its formation in October
1984, the Company has engaged in developing research programs, recruiting
scientific advisors and scientists, negotiating and consummating technology
licensing agreements, and sponsoring research and development activities. The
Company has generated no revenue from product sales. The Company does not have
any products currently available for sale, and none are expected to be
commercially available for several years, if at all. There can be no assurance
that the research the Company funds and manages will lead to the development of
commercially viable products.
THE COMPANY HAS A HISTORY OF LOSSES AND AN ACCUMULATED DEFICIT; THE COMPANY'S
FUTURE PROFITABILITY IS UNCERTAIN.
The Company has experienced significant operating losses since its
inception and expects to incur additional operating losses for at least the next
several years as the Company continues its research and development and clinical
trial efforts. As of March 31, 2001, the Company had an accumulated deficit of
approximately $32,775,000.
THE COMPANY HAS A NEED FOR SUBSTANTIAL ADDITIONAL FUNDS.
The Company's operations to date have consumed substantial amounts of
cash. Negative cash flow from operations is expected to continue and to
accelerate in the foreseeable future. The Company's cash requirements may vary
materially from those now planned because of results of research and
development, results of pre-clinical and clinical testing, responses to the
Company's grant requests, relationships with strategic partners, changes in the
focus and direction of the Company's research and development programs,
competitive and technological advances, the FDA regulatory process and other
factors. In any of these circumstances the Company may require substantially
more funds than it currently has available or currently intends to raise to
continue its business. The Company may seek to satisfy its future funding
requirements through public or private offerings of securities, by collaborative
or other arrangements with major pharmaceutical companies, or from other
sources. Additional financing may not be available when needed or may not be
available on terms acceptable to the Company. If adequate financing is not
available, the Company may not be able to continue as a going concern or may be
required to delay, scale back or eliminate certain of its research and
development programs, to relinquish rights to certain of its technologies or
product candidates, to forego desired opportunities, or to license third parties
to commercialize products or technologies that the Company would otherwise seek
to develop itself. To the extent the Company raises additional capital by
issuing equity securities, ownership dilution to existing stockholders will
result.
SUBSTANTIAL DOUBT ABOUT COMPANY'S ABILITY TO CONTINUE AS A "GOING CONCERN."
The Company has a shortage of unrestricted working capital and has had
recurring losses from operations and negative cash flows from operations since
its inception. These factors, among others discussed herein, raise substantial
doubt about the Company's ability to continue as a going concern. (See "Item 6.
Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Item 7. Financial Statements -- Notes to Financial Statements and
Independent Auditors' Report" (which contains an explanatory paragraph relating
to substantial doubt about the Company's ability to continue as a going concern)
and elsewhere in the Company's Form 10-KSB/A (Amendment No. 1) and Forms 10-Q,
incorporated by reference herein, for further information on the Company's
financial position and results of operations.) The Company's ability to continue
to operate will ultimately depend upon the Company raising additional funds,
attaining profitability and being able to attain profit and operate at a profit
on a consistent basis, which will not occur for some time and may never occur.
In such a situation, the Company will not be able to continue as a going
concern.
THE COMPANY IS DEPENDENT ON KEY PERSONNEL.
The Company's business depends to a significant degree on the continuing
contributions of its key management, scientific and technical personnel, as well
as on the continued discoveries of scientists, researchers, and technicians at
The University of North Carolina at Chapel Hill ("UNC"), Duke University
("Duke"), Auburn University ("Auburn") and Georgia State University ("Georgia
State") (collectively, the "Consortium") who have entered into an agreement
dated January 15, 1997 (the "Consortium Agreement") by which the members of the
Consortium have agreed to give exclusive rights to the Company to commercialize
the pharmaceutical product candidates developed in the Consortium-member
laboratories. There can be no assurance that the loss of certain members of
management or the scientists, researchers and technicians from the
Consortium-member universities would not materially adversely affect the
Company. The Company has no key man life insurance policy on any of its
executives.
ADDITIONAL RESEARCH GRANTS MAY NOT BE AVAILABLE.
The Company will continue to apply for new grants to support continuing
research and development of the dication platform technology and/or, with its
joint venture company, NextEra, the biological product candidates. The process
of obtaining grants is extremely competitive and there can be no assurance that
any of the grant applications will be acted upon favorably.
THE COMPANY'S ADVANCED PRODUCT CANDIDATES ARE IN EARLY STAGE CLINICAL TRIALS.
All of the Company's product candidates, including DB289, require
additional clinical testing, regulatory approval and development of marketing
and distribution channels, all of which are expected to require substantial
additional investment prior to commercialization. There can be no assurance that
the Company's product candidates will be successfully developed, prove to be
safe and effective in human clinical trials, meet applicable regulatory
standards, be capable of being produced in commercial quantities at acceptable
costs, be eligible for third party reimbursement from governmental or private
insurers, be successfully marketed, or achieve market acceptance.
THERE ARE SUBSTANTIAL UNCERTAINTIES RELATED TO CLINICAL TRIALS.
To obtain required regulatory approvals for the commercial sale of its
product candidates, the Company must demonstrate through clinical trials that
such product candidates are safe and effective for their intended uses.
The Company may find, at any stage of its research and development, that
product candidates which appeared promising in earlier clinical trials do not
demonstrate safety or effectiveness in larger-scale clinical trials and
therefore do not receive regulatory approvals. The results from pre-clinical
testing and early clinical trials may not be predictive of results obtained in
later clinical trials and large-scale testing. Companies in the pharmaceutical
and biotechnology industries have suffered significant setbacks in various
stages of clinical trials, even after promising results had been obtained in
earlier stage trials. Completion of the clinical trials may be delayed by many
factors, including slower than anticipated patient enrollment, difficulty in
securing sufficient supplies of clinical trial materials or adverse events
occurring during clinical trials. Completion of testing, studies and trials may
take several years, and the length of time varies substantially with the type,
complexity, novelty, and intended use of the product. Delays or rejections may
be based upon many factors, including changes in regulatory policy during the
period of product development. No assurance can be given that any of the
Company's development programs will be successfully completed, that any
Investigational New Drug application filed with the FDA (or any foreign
equivalent filed with the appropriate foreign authorities) will become
effective, that additional clinical trials will be allowed by the FDA or other
regulatory authorities or that clinical trials will commence as planned. There
have been delays in the Company's testing and development schedules to date and
there can be no assurance that the Company's expected testing and development
schedules will be met.
THE COMPANY HAS NO MANUFACTURING CAPABILITY.
The Company's ability to conduct clinical trials and its ability to
commercialize its product candidates will depend in part upon its ability to
manufacture its product candidates either directly or through third parties at a
competitive cost and in accordance with FDA and other regulatory requirements.
The Company currently lacks the facilities and personnel to manufacture
products. There can be no assurance that the Company will be able to acquire
such resources either directly or through third parties at reasonable costs if
it develops commercially viable products.
THE COMPANY IS DEPENDENT ON THIRD-PARTY RELATIONSHIPS.
The Company follows a business strategy of utilizing the expertise and
resources of third parties in a number of areas, including the research and
development of potential products, the manufacture of potential products for
clinical trial purposes, the conduct of pre-clinical and clinical trials, and
the future development and manufacture of commercialized drugs. This strategy
creates risks to the Company by placing critical aspects of the Company's
business in the hands of third parties whom the Company may not be able to
control. If these third parties do not perform in a timely and satisfactory
manner, the Company may incur costs and delays in the conduct of its business as
it seeks alternate sources of such products and services, if available. Such
costs and delays may have a material adverse effect on the Company.
The Company has invested in NextEra Therapeutics Inc. ("NextEra") in a
joint venture with Franklin Research Group ("Franklin") and Dr. Larry Potempa by
contributing technology, patent assignments and cash. The success of NextEra is
partially dependent on the performance by Franklin of its obligations to NextEra
and the results of Dr. Potempa's research.
The Company may seek additional third party relationships in certain areas,
particularly in situations in which the Company believes that the clinical
testing, marketing, manufacturing and other resources of a pharmaceutical
company collaborator will enable the Company to develop particular products or
geographic markets which are otherwise beyond the Company's resources and/or
capabilities. There is no assurance that the Company will be able to obtain any
such collaboration, or any other research and development, manufacturing, or
clinical trial agreement. The inability of the Company to obtain and maintain
satisfactory relationships with third parties may have a material adverse effect
on the Company.
THE COMPANY IS UNCERTAIN ABOUT ITS ABILITY TO PROTECT OR OBTAIN NECESSARY
PATENTS AND PROPRIETARY INFORMATION.
There can be no assurance that any particular patent will be granted or
that issued patents will provide the Company, directly or through licenses, with
the protection contemplated. Patents and licenses of patents can be challenged,
invalidated or circumvented. It is also possible that competitors will develop
similar products simultaneously. The Company's breach of any license agreement
or the failure to obtain a license to any technology or process which may be
required to develop or commercialize one or more of its product candidates may
have a material adverse effect on the Company.
The pharmaceutical and biotechnology fields are characterized by a large
number of patent filings, and a substantial number of patents have already been
issued to other pharmaceutical and biotechnology companies. Third parties may
have filed applications for or have been issued patents and may obtain
additional patents and proprietary rights related to products or processes
competitive with or similar to those that the Company is attempting to develop
and commercialize. The Company may not be aware of all of the patents
potentially adverse to the Company's interests that may have been issued to
others. No assurance can be given that patents do not exist, have not been
filed, or could not be filed or issued, which contain claims relating to the
Company's technology, products or processes. If patents have been or are issued
to others containing preclusive or conflicting claims, then the Company may be
required to obtain licenses to one or more of such patents or to develop or
obtain alternate technology. There can be no assurance that the licenses that
might be required for the Company's technology, processes or products would be
available on commercially acceptable terms, or at all.
Because of the substantial length of time and expense associated with
bringing new products to the marketplace through the development and regulatory
approval process, the biotechnology industry places considerable importance on
patent and trade secret protection for new technologies, products and processes.
Since patent applications in the United States are confidential until patents
are issued and since publication of discoveries in the scientific or patent
literature often lag behind actual discoveries, the Company cannot be certain
that it (or any licensor) was the first to make the inventions covered by
pending patent applications or that it (or any licensor) was the first to file
patent applications for such inventions. The patent positions of pharmaceutical
and biotechnology companies can be highly uncertain and involve complex legal
and factual questions, and therefore the breadth of claims allowed in
pharmaceutical and biotechnology patents, or their enforceability, cannot be
predicted. There can be no assurance that any patents under pending patent
applications or any further patent applications will be issued. Furthermore,
there can be no assurance that the scope of any patent protection will exclude
competitors or provide competitive advantages to the Company, that any of the
Company's patents that have been issued or may be issued will be held valid if
subsequently challenged, or that others, including competitors or current or
former employers of the Company's employees, advisors and consultants, will not
claim rights in, or ownership to, the patents and other proprietary rights held
by the Company. There can be no assurance that others will not independently
develop substantially equivalent proprietary information or otherwise obtain
access to the Company's proprietary information, or that others may not be
issued patents that may require licensing and the payment of significant fees or
royalties by the Company.
The biotechnology industry has experienced extensive litigation
regarding patent and other intellectual property rights. The Company could incur
substantial costs in defending itself in suits that may be brought against the
Company claiming infringement of the rights of others or in asserting the
Company's patent rights in a suit against another party. The Company may also be
required to participate in interference proceedings declared by the United
States Patent and Trademark Office for the purpose of determining the priority
of inventions in connection with the patent applications of the Company or other
parties.
Adverse determinations in litigation or interference proceedings could
require the Company to seek licenses (which may not be available on commercially
reasonable terms) or subject the Company to significant liabilities to third
parties, and could therefore have a material adverse effect on the Company. Even
if the Company prevails in an interference proceeding or a lawsuit, substantial
resources of the Company, including the time and attention of its officers, will
be required.
As of June 8, 1995, certain legislative changes implementing the General
Agreement on Trade and Tariffs resulted in changes to United States patent laws
that affect the length of patent protection. Whereas the term for patent
applications used to be for a period of seventeen years from the date of grant,
the new term of a United States patent commences on the date of issuance and
terminates twenty years from the earliest effective filing date of the
application. The time from filing to issuance of a biotechnology patent
application is often more than three years; consequently, a twenty-year term
from the effective date of filing may result in a negative impact on the
Company's patent position by offering a substantially shortened term of
protection.
The Company also relies on trade secrets, know-how and technological
advancement to maintain its competitive position. Although the Company uses
confidentiality agreements and employee proprietary information and invention
assignment agreements to protect its trade secrets and other unpatented
know-how, these agreements may be breached by the other party thereto or may
otherwise be of limited effectiveness or enforceability.
THE COMPANY'S BUSINESS HAS SIGNIFICANT COMPETITION; THE COMPANY'S PRODUCT
CANDIDATES MAY BECOME OBSOLETE PRIOR TO COMMERCIALIZATION DUE TO ALTERNATIVE
TECHNOLOGIES.
The biopharmaceutical field is characterized by extensive research
efforts and rapid technological progress. Competition from other biotechnology
companies, pharmaceutical companies and research and academic institutions is
intense. Other companies are engaged in research and product development for
treatment of the same diseases as the Company. New developments in molecular
cell biology, molecular pharmacology, recombinant DNA technology and other
pharmaceutical processes are expected to continue at a rapid pace in both
industry and academia. There can be no assurance that research and discoveries
by others will not render some or all of the Company's programs or products
noncompetitive or obsolete.
The Company is cognizant of other companies and institutions dedicated
to the development of therapeutics similar to those being developed by the
Company, including Eli Lilly and Company, Hoffman-LaRoche Ltd., Chiron
Corporation, Cubist Pharmaceuticals, Inc., Schering-Plough Corporation, and
Abbott Laboratories. Many of the Company's existing or potential competitors
have substantially greater financial and technical resources and therefore may
be in a better position to develop, manufacture, and market biopharmaceutical
products. Many of these competitors are also more experienced with regard to
pre-clinical testing, human clinical trials and obtaining regulatory approvals.
The current or future existence of competitive products may also adversely
affect the marketability of the Company's product candidates.
THERE IS NO ASSURANCE THAT THE COMPANY WILL RECEIVE FDA APPROVAL FOR ANY OF ITS
PRODUCT CANDIDATES; GOVERNMENT REGULATION MAY IMPEDE, DELAY OR PREVENT THE
COMMERCIALIZATION OF THE COMPANY'S PRODUCT CANDIDATES.
All new drugs and biologics, including the Company's product candidates,
are subject to extensive and rigorous regulation by the federal government,
principally the FDA under the Federal Food, Drug and Cosmetic Act and other laws
including, in the case of biologics, the Public Health Services Act, and by
state, local and foreign governments. Such regulations govern, among other
things, the development, testing, manufacture, labeling, storage, pre-market
clearance or approval, advertising, promotion, sale and distribution of such
product candidates. If drug products are marketed abroad, they are subject to
extensive regulation by foreign governments. Failure to comply with applicable
regulatory requirements may subject the Company to administrative or judicially
imposed sanctions such as civil penalties, criminal prosecution, injunctions,
product seizure or detention, product recalls, total or partial suspension of
production, and FDA refusal to approve pending applications.
THE COMPANY HAS NOT RECEIVED REGULATORY APPROVAL IN THE UNITED STATES OR ANY
FOREIGN JURISDICTION FOR THE COMMERCIAL SALE OF ANY OF ITS PRODUCT CANDIDATES.
The process of obtaining FDA and other required regulatory approvals,
including foreign approvals, often takes many years and varies substantially
based upon the type, complexity and novelty of the products involved and the
indications being studied. Furthermore, such approval process is extremely
expensive and uncertain. There can be no assurance that the Company's product
candidates will be cleared for commercial sale by the FDA or regulatory agencies
in foreign countries. The regulatory review process can take many years and the
Company will need to raise additional funds prior to completing such process for
its current and future product candidates. The failure of the Company to receive
FDA approval for its product candidates would preclude the Company from
marketing and selling its products in the United States. Therefore, the failure
to receive FDA approval would have a material adverse effect on the Company.
Even if regulatory approval of a product is granted, there can be no assurance
that the Company will be able to obtain the labeling claims necessary or
desirable for the promotion of such product. FDA regulations prohibit the
marketing or promotion of a drug for unapproved indications. Furthermore,
regulatory marketing approval may entail ongoing requirements for postmarketing
studies if regulatory approval is obtained; the Company will then be subject to
ongoing FDA obligations and continued regulatory review. In particular, the
Company or its third party manufacturers will be required to adhere to
regulations setting forth Good Manufacturing Practices, which require that the
Company or third party manufacturers manufacture products and maintain records
in a prescribed manner with respect to manufacturing, testing and quality
control activities. Further, the Company or its third party manufacturer must
pass a pre-approval inspection of its manufacturing facilities by the FDA before
obtaining marketing approval. Failure to comply with applicable regulatory
requirements may result in penalties such as restrictions on a product's
marketing or withdrawal of the product from the market. In addition,
identification of certain side effects after a drug is on the market or the
occurrence of manufacturing problems could cause subsequent withdrawal of
approval, reformulation of the drug, additional pre-clinical testing or clinical
trials and changes in labeling of the product.
Prior to the submission of an application for FDA approval, drugs
developed by the Company must undergo rigorous pre-clinical and clinical testing
which may take several years and the expenditure of substantial resources.
Before commencing clinical trials in humans, the Company must submit to the FDA
and receive clearance of an Investigational New Drug ("IND"). There can be no
assurance that submission of an IND for future clinical testing of any product
under development or other future products of the Company would result in FDA
permission to commence clinical trials or that the Company will be able to
obtain the necessary approvals for future clinical testing in any foreign
jurisdiction. Further, there can be no assurance that if such testing of
products under development is completed, any such drug compounds will be
accepted for formal review by the FDA or any foreign regulatory body, or
approved by the FDA for marketing in the United States or by any such foreign
regulatory bodies for marketing in foreign jurisdictions. Future federal, state,
local or foreign legislation or administrative acts could also prevent or delay
regulatory approval of the Company's product candidates.
Prior to the submission of an application for FDA approval, biologics
developed by the Company or its joint venture, NextEra, must undergo rigorous
pre-clinical and clinical testing which may take several years and the
expenditure of substantial resources. Before commencing clinical trials in
humans in the United States, the Company must submit to the FDA and receive
clearance of an IND. If clinical trials of a new product are completed
successfully, then the Company may seek FDA marketing approval. If the product
is regulated as a biologic, the FDA will require the submission and approval of
both a Product License Application ("PLA") and an Establishment License
Application before commercial marketing can commence. The PLA must include
detailed information about the biologic and its manufacture and the results of
product development, pre-clinical studies and clinical trials. PLA's submitted
to the FDA can take, on average, two to five years to receive approval. The FDA
may ultimately decide that the PLA does not satisfy its regulatory criteria for
approval and deny approval or require additional clinical studies. Future
federal, state, local or foreign legislation or administrative acts could also
prevent or delay regulatory approval of the Company's biologic candidates.
THERE IS UNCERTAINTY REGARDING THE AVAILABILITY OF HEALTH CARE REIMBURSEMENT FOR
PURCHASERS OF THE COMPANY'S ANTICIPATED PRODUCTS; HEALTH CARE REFORM MAY
NEGATIVELY IMPACT THE ABILITY OF PROSPECTIVE PURCHASERS OF POTENTIAL COMPANY
PRODUCTS TO PAY FOR THE PRODUCTS.
The Company's ability to commercialize any of its product candidates
will depend in part on the extent to which reimbursement for the costs of the
resulting drug will be available from government health administration
authorities, private health insurers and others. Significant uncertainty exists
as to the reimbursement status of newly approved health care products. There can
be no assurance of the availability of third-party insurance reimbursement
coverage enabling the Company to establish and maintain price levels sufficient
for realization of a profit on its investment in developing pharmaceuticals and
biological products. Government and other third-party payers are increasingly
attempting to contain health care costs by limiting both coverage and the level
of reimbursement for new drug products approved for marketing by the FDA and by
refusing, in some cases, to provide any coverage for uses of approved products
for disease indications for which the FDA has not granted marketing approval. If
adequate coverage and reimbursement levels are not provided by government and
third-party payers for uses of the Company's products, the market acceptance of
these products would be adversely affected.
Health care reform proposals have previously been introduced in Congress
and in various state legislatures and there is no guarantee that such proposals
will not be introduced in the future. The Company cannot predict when any
proposed reforms will be implemented, if ever, or the effect of any implemented
reforms on the Company's business. There can be no assurance that any
implemented reforms will not have a material adverse effect on the Company. Such
reforms, if enacted, may affect the availability of third-party reimbursement
for products developed by the Company as well as the price levels at which the
Company is able to sell such products. In addition, if the Company is able to
commercialize products in overseas markets, then the Company's ability to
achieve success in such markets may depend, in part, on the health care
financing and reimbursement policies of such countries.
CONFIDENTIALITY AGREEMENTS MAY NOT ADEQUATELY PROTECT THE COMPANY'S INTELLECTUAL
PROPERTY.
The Company requires its employees and consultants to execute
confidentiality agreements upon the commencement of their relationship with the
Company. The agreements generally provide that trade secrets and all inventions
conceived by the individual and all confidential information developed or made
known to the individual during the term of the relationship shall be the
exclusive property of the Company and shall be kept confidential and not
disclosed to third parties except in specified circumstances. There can be no
assurance, however, that these agreements will provide meaningful protection for
the Company's proprietary information in the event of unauthorized use or
disclosure of such information.
THERE IS A RISK OF PRODUCT LIABILITY, AND UNCERTAINTY REGARDING THE AVAILABILITY
OF PRODUCT LIABILITY INSURANCE ON ACCEPTABLE TERMS.
The Company's business exposes it to substantial product liability
risks. The Company plans to obtain product liability insurance covering the sale
of its products prior to their commercial introduction; however, there can be no
assurance that the Company will be able to obtain or maintain such insurance on
acceptable terms or that any insurance obtained will provide adequate coverage
against potential liabilities. Claims or losses in excess of any liability
insurance coverage now carried or subsequently obtained by the Company could
have a material adverse effect on the Company.
DISCLOSURE REGARDING POTENTIAL FUTURE ACQUISITIONS OR BUSINESS COMBINATIONS.
Although the Company has no current intentions to acquire other
businesses or merge with or into other entities, the trend toward consolidating
business operations, seeking economies of scale, diversifying product offerings
and pursuing operating synergies is one that currently characterizes many
industries, and the biopharmaceutical industry is no exception. If the Company
decides to focus on these benefits, then it may decide to pursue an acquisition
of another entity or some other form of business combination. If the Company
does decide to pursue a transaction of this type, except as otherwise required
by law, rules or regulations, the Company currently does not intend to provide
stockholders with information concerning an acquisition or merger candidate and
its business prior to consummation of the transaction. In addition, because the
Company has a very large number of authorized but unissued shares of capital
stock, the Company may decide to use shares of its capital stock to acquire
other businesses. Unless otherwise required by the rules and regulations
governing the NASDAQ National Market System, or the Delaware General Corporation
Law (the "Delaware Law"), the Company may use shares of its capital stock to
acquire businesses without stockholder approval.
POTENTIAL ADVERSE EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE.
Sales of our common stock (including shares issued upon the exercise of
outstanding options and warrants at exercise prices substantially below the
closing bid price) in the public market could materially and adversely affect
the market price of our shares. Such sales also might make it more difficult for
the Company to sell equity securities or equity-related securities in the future
at a time and price that the Company deems appropriate.
As of October 31, 2001, the Company had 6,005,371 shares of common stock
outstanding (not including 453,566 shares of common stock reserved for exercise
of outstanding options and 1,425,000 shares of common stock reserved for
exercise of outstanding warrants held by certain investors). Of the shares
outstanding, 3,377,404 shares of common stock are freely tradable without
restriction. All of the remaining 2,627,967 shares are restricted from resale
except pursuant to certain exceptions under the Securities Act of 1933, as
amended.
POTENTIAL ADVERSE EFFECT OF OUTSTANDING COMMON STOCK OPTIONS AND WARRANTS.
The Company has outstanding options and warrants for the purchase of
shares of its common stock which may adversely affect the Company's ability to
consummate future equity financings. Further, the holders of such warrants and
options may exercise them at a time when the Company would otherwise be able to
obtain additional equity capital on terms more favorable to the Company. To the
extent any such options and warrants are exercised, the outstanding shares of
the Company's stock will be diluted.
OUR COMMON STOCK MAY BE DELISTED FROM THE NASDAQ NATIONAL MARKET SYSTEM.
On October 9, 2001, we were notified by the NASDAQ staff that our common
stock may be delisted from the NASDAQ National Market System ("NMS") as a result
of our failure to meet certain NMS maintenance standards. Pursuant to NASDAQ
Marketplace Rule 4310(c)(8)(C), the Company was provided 30 calendar days to
regain compliance by regaining a $50 million market capitalization for 10
consecutive trading days. On November 8, 2001 the 30 day period expired without
the Company regaining a $50 million market capitalization. On November 12, 2001
we were notified by NASDAQ that the Company had failed to regain compliance and
that our common stock would be delisted unless we were to appeal the NASDAQ
staff's decision. On November 19, 2001 we filed an appeal with the NASDAQ
Listing Qualifications Panel and a hearing date was set for January 10, 2002.
During the appeals process our common stock will remain listed on the NASDAQ
NMS.
In the event our appeal to the NASDAQ Listing Qualifications Panel is
unsuccessful and we are unable to maintain our listing on the NASDAQ NMS we may
apply to list our common stock on the NASDAQ SmallCap Market. If we apply for
listing on the NASDAQ SmallCap Market and our application is not accepted, then
our common stock may be traded on the "pink sheets" and be deemed to be "penny
stocks." If the Company's common stock is considered penny stock, it would be
subject to rules that impose additional regulation on broker-dealers who sell
the Company's securities. For example, broker-dealers must make a special
suitability determination for the purchaser and have received the purchaser's
written consent to the transaction prior to the sale. Also, a disclosure
schedule must be prepared before any transaction involving a penny stock, and
disclosure is required about (1) sales commissions payable to both the
broker-dealer and the registered representative and (2) current quotations for
the securities. Monthly statements are also required to be sent disclosing
recent price information for the penny stock held in the account and information
on the limited market in penny stock. Because of these additional obligations,
some brokers may not effect transactions in penny stocks. This could have an
adverse effect on the liquidity of our common stock.
If the Company's securities are delisted from the NASDAQ NMS, there can
be no assurances that the Company will be able to satisfy the requirements for
listing on the NASDAQ SmallCap Market and its failure to do so may have a
material adverse effect on the business, financial conditions and results of
operations of the Company. The Company believes that its securities will be
delisted from the NASDAQ NMS if sufficient funds to satisfy the NASDAQ NMS net
asset or stockholder equity requirements are not secured and if it otherwise
does not comply with NASDAQ NMS maintenance standards. There can be no
assurances that the Company will be able to raise sufficient funds and satisfy
the other conditions to continued listing imposed upon the Company by NASDAQ,
and the Company believes that its failure to do so may have a material adverse
effect on the business, financial condition and related financial statements of
the Company.
THE MARKET PRICE OF THE COMPANY'S COMMON STOCK MAY EXPERIENCE SIGNIFICANT
VOLATILITY.
The securities markets from time to time experience significant price
and volume fluctuations unrelated to the operating performance of particular
companies. In addition, the market prices of the common stock of many publicly
traded pharmaceutical and biotechnology companies have been and can be expected
to be especially volatile. Announcements of technological innovations or new
products by the Company or its competitors, developments or disputes concerning
patents or proprietary rights, publicity regarding actual or potential clinical
trial results relating to products under development by the Company or its
competitors, regulatory developments in both the United States and foreign
countries, delays in the Company's testing and development schedules, public
concern as to the safety of vaccines or biological products and economic and
other external factors, as well as period-to-period fluctuations in the
Company's financial results, may have a significant impact on the market price
of our common stock. The realization of any of the risks described in these
"Risk Factors" may have a significant adverse impact on such market prices.
THE COMPANY DOES NOT PAY DIVIDENDS.
The Company has never declared or paid dividends on its common stock and
does not intend to pay any dividends in the foreseeable future.
THERE ARE LIMITATIONS ON THE LIABILITY OF THE COMPANY'S DIRECTORS, AND THE
COMPANY MAY HAVE TO INDEMNIFY ITS OFFICERS AND DIRECTORS IN CERTAIN INSTANCES.
The Company's Certificate of Incorporation limits, to the maximum extent
permitted by the Delaware Law, the personal liability of directors for monetary
damages for breach of their fiduciary duties as directors. The Company's Bylaws
provide that the Company shall indemnify its officers and directors and may
indemnify its employees and other agents to the fullest extent permitted by law.
The Company has entered into indemnification agreements with its officers and
directors containing provisions which are in some respects broader than the
specific indemnification provisions contained in the Delaware Law. The
indemnification agreements may require the Company, among other things, to
indemnify such officers and directors against certain liabilities that may arise
by reason of their status or service as directors or officers (other than
liabilities arising from willful misconduct of a culpable nature), to advance
their expenses incurred as a result of any proceeding against them as to which
they could be indemnified, and to obtain directors' and officers' insurance if
available on reasonable terms. Section 145 of the Delaware Law provides that a
corporation may indemnify a director, officer, employee or agent made or
threatened to be made a party to an action by reason of the fact that he was a
director, officer, employee or agent of the corporation or was serving at the
request of the corporation, against expenses actually and reasonably incurred in
connection with such action if he or she acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The Delaware Law
does not permit a corporation to eliminate a director's duty of care, and the
provisions of the Company's Certificate of Incorporation have no effect on the
availability of equitable remedies, such as injunction or rescission, for a
director's breach of the duty of care.
THE COMPANY'S JOINT VENTURE PARTNER AND NEXTERA HAVE BROUGHT SUIT AGAINST THE
COMPANY.
The Company's biological program, operated through NextEra Therapeutics,
Inc. ("NextEra"), stalled in April 2000 when the Company's joint venture partner
Franklin Research Group ("Franklin") filed a complaint against the Company in
United States District Court for the Southern District of Ohio, Eastern Division
in connection with the Funding and Research Agreement between Franklin, Immtech
and NextEra. On March 23, 2001, Franklin voluntarily dismissed that action and
filed a new complaint in the Court of Common Pleas, Franklin County, Ohio in
which NextEra joined as a plaintiff with Franklin. In May 2001, Franklin and
NextEra voluntarily dismissed the state action and entered into negotiations
with the Company to determine if the joint venture can be managed and funded
going forward. Further clinical trials at a major cancer center to study
effectiveness of rmCRP will begin if the Company and Franklin can reach an
agreement and secure additional funding for NextEra. The Company is not certain
about the future of NextEra nor the potential for renewed litigation.
NEXTERA HAS A NEED FOR SUBSTANTIAL ADDITIONAL FUNDS.
NextEra has incurred accumulated losses of approximately $2,076,000
since inception (July 8, 1998) through March 31, 2001. NextEra is expected to
continue to incur significant losses during the next several years. In addition,
as of March 31, 2001, NextEra's current liabilities exceeded its current assets
by approximately $1,612,000 and NextEra had a stockholders' deficiency of
approximately $1,590,000. NextEra's ability to continue as a going concern is
dependent upon its ability to generate sufficient funds to meet its obligations
as they become due and, ultimately, to obtain profitable operations. NextEra's
financial plans for the forthcoming year include efforts to obtain additional
equity financing, as NextEra needs to raise substantial additional funds.
WHERE YOU CAN FIND MORE INFORMATION
We file annual and quarterly reports, proxy statements and other
information required by the Securities Exchange Act of 1934, as amended (the
"Exchange Act") with the Securities and Exchange Commission ("SEC"). You may
inspect and copy any document the Company files with the SEC at the SEC's public
reference rooms located at 450 Fifth Street, N.W., Washington, D.C. 20549, at
233 Broadway, 16th Floor, New York, New York 10279 and at Northwest Atrium
Center, 5000 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. The Company's SEC filings are also available to the public from
the SEC's web site at http://www.sec.gov.
The Company has filed with the SEC a registration statement on Form S-3
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Shares. This Prospectus, which
constitutes a part of that Registration Statement, does not contain all the
information contained in that Registration Statement and its exhibits. For
further information with respect to the Company and the Shares, you should
consult the Registration Statement and its exhibits. Statements contained in
this Prospectus concerning the provisions of any documents are necessarily
summaries of those documents, and each statement is qualified in its entirety by
reference to the copy of the document filed with the SEC. The Registration
Statement and any of its amendments, including exhibits filed as a part of the
Registration Statement or an amendment to the Registration Statement, are
available for inspection and copying through the SEC's public reference rooms
listed above.
The SEC allows the Company to "incorporate by reference" in this
Prospectus the information that we file with the SEC. This means we can disclose
important information to you by referring you to other information we have filed
with the SEC. The information we incorporate by reference is considered to be
part of this Prospectus, and information we later file with the SEC will
automatically update and supersede the information in this Prospectus.
The following documents filed by us with the SEC pursuant to Section 13
of the Exchange Act (File No. 000-25669) and any future filings under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act made before the termination of the
offering are incorporated by reference:
(i) our Annual Report on Form 10-KSB/A (Amendment No. 1) for the
fiscal year ended March 31, 2001;
(ii) our Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2001;
(iii) our Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2001;
(iv) all other reports filed by us pursuant to Section 13(a) or
15(d) of the Exchange Act since March 31, 2001; and
(v) the description of the common stock contained in our
registration statement filed under Section 12 of the Exchange
Act, including any amendments or reports filed for the purpose
of updating such description.
Any statement incorporated or deemed incorporated herein by reference
shall be deemed to be modified or superseded for the purpose of this
Registration Statement to the extent that a statement contained herein or in any
subsequently filed document modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
The Company will provide to you without charge a copy of any or all
documents incorporated by reference into this Prospectus except the exhibits to
such documents, unless such exhibits are specifically incorporated by reference
in such documents. Exhibits not incorporated by reference may not be available.
YOU MAY REQUEST A COPY OF THESE FILINGS, AT NO COST,
BY CONTACTING THE COMPANY AT:
IMMTECH INTERNATIONAL, INC.
150 FAIRWAY DRIVE, SUITE 150
VERNON HILLS, ILLINOIS 60061
ATTENTION: MR. GARY C. PARKS
TELEPHONE NO.: (847) 573-0033
CERTAIN INFORMATION
Unless otherwise stated in this prospectus:
o the "Company," "we" and "us" refer to Immtech International,
Inc.;
o "Immtech" refers to Immtech International, Inc.;
o "common stock" refers to the common stock, par value $0.01 per
share, of Immtech.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Prospectus and in the documents
incorporated by reference herein, including, without limitation, statements
containing the words "believe," "anticipate," "expect" and words of similar
import, constitute "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange
Act of 1934, as amended. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company, or industry results, to be
materially different from any results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
the following: (i) the Company's history of operating losses, (ii) the Company's
need for substantial additional funds, (iii) the Company's ability to access the
capital markets and/or to secure private sources of funding, (iv) the
availability of grant money, (v) the length of time until any of the Company's
product candidates may be available for sale, (vi) the uncertainties involved in
clinical trials being performed on the product candidates the Company is
developing, (vii) the Company's dependence on third party relationships for the
manufacture of product candidates and the performance of clinical trials with
regard to its product candidates, (viii) the intense competition and rapid
technological changes in the Company's industry, (ix) the extensive and rigorous
federal and foreign regulations of the Company's testing, manufacturing and sale
of its product candidates, (x) the Company's dependence on key personnel and
contributions from scientists, researchers and technicians from
Consortium-member universities, (xi) the Company's ability to protect the
technology, patents and proprietary information on which its business relies,
(xii) the disposition of certain legal actions, (xiii) the Company's ability to
keep its common stock listed on the NASDAQ National Market System and (xiv)
other factors referenced in this Prospectus. Given these uncertainties, readers
of this report are cautioned not to place undue reliance on such forward-looking
statements. The Company disclaims any obligation to update any such factors or
to publicly announce the result of any revisions to any of the forward-looking
statements contained herein to reflect future events or developments.
THE COMPANY
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE INFORMATION PROVIDED
UNDER "RISK FACTORS" BEGINNING ON PAGE S-1. A GLOSSARY BEGINS ON PAGE S-16 WHICH
DEFINES VARIOUS TERMS USED IN THIS PROSPECTUS.
Immtech International, Inc. (the "Company" or "Immtech") is a
biopharmaceutical company focused on the discovery, development, and
commercialization of drugs for the treatment of: (i) fungal, parasitic,
bacterial and viral diseases such as tuberculosis, hepatitis, pneumonia,
diarrhea and AIDS, and (ii) cancer, through both the Company's primary
discipline, its pharmaceutical program and, operated by a joint venture company,
NextEra Therapeutics, Inc. ("NextEra"), its biological program. Since its
formation in October 1984, the Company has engaged in developing research
programs, recruiting scientific advisors and scientists, negotiating and
consummating technology licensing agreements, and engaging in and sponsoring
drug research and development activities. The Company uses the expertise and
resources of strategic partners and third parties in a number of areas,
including: (i) laboratory research, (ii) pre-clinical and human clinical trials,
and (iii) the manufacture of pharmaceutical and therapeutic compounds and
products (pharmaceuticals are typically synthetic chemicals and therapeutics are
typically naturally occurring proteins). The Company holds worldwide patents,
licenses and rights to license worldwide patents and patent applications from
third parties that are integral to the Company's business. The Company currently
does not have any commercially available products nor does it expect to have any
commercially available products for several years, if at all.
The pharmaceutical program is based on technology for developing a class
of compounds known as dications. The dication technology is the result of a
research program designed to understand how dications bind to the
deoxyribonucleic acid ("DNA") of infectious micro-organisms. The dication
platform was developed by scientists at The University of North Carolina at
Chapel Hill ("UNC"), Duke University ("Duke"), Auburn University ("Auburn") and
Georgia State University ("Georgia State") (collectively, the "Consortium"). The
Company entered into an agreement with the Consortium, dated January 15, 1997,
to commercialize product candidates resulting from the Consortium's research,
including the dication technology (the "Consortium Agreement").
Structurally, dications are chemical molecules which have two positively
charged ends that are held together by a chemical linker. The composition of the
dications, with positive charges on both ends (shaped like molecular barbells)
allows dications to bind (similar to a bandaid) to the negatively charged active
sites (sites where enzymes interact with DNA) in certain areas of an infectious
micro-organism's DNA. The bound dications prevent enzymes necessary to the life
of the micro-organism from attaching to certain of its DNA's active sites.
Research has shown that once a site is occupied by a dication, enzymes necessary
to the life of the infectious micro-organism are blocked and the organism dies.
The Company's biological program, operated through NextEra in a joint
venture with the Franklin Research Group ("Franklin"), concentrates on
developing products for treating cancer and AIDS. The biological program is
focused on the development of a synthetic protein to replace a protein called
modified C-reactive protein ("mCRP"), naturally found in human tissues. The
Company's research, prior to the formation of NextEra, and NextEra's subsequent
research, has shown that mCRP is noticeably absent, or present at severely
reduced levels, in the tissue of patients with cancer or AIDS. Laboratory tests,
in both animal studies and human clinical trials, showed that the recombinant
(synthetically made) mCRP ("rmCRP") caused the subjects to produce cells which
were able to combat cancer and infectious diseases associated with AIDS.
This NextEra program was delayed in April 2000 when our joint venture
partner, Franklin, filed suit against the Company. The parties entered a
Stipulation of Dismissal in May 2001 which resulted in a withdrawal of the suit,
however, Franklin reserved the right to refile the suit should negotiations fail
to settle the dispute. NextEra's research and development of its product
candidates continue, but at a slowed pace while the Company and Franklin
negotiate a settlement to the litigation and NextEra seeks additional funding.
STRATEGY
The Company's strategy is to develop drugs effective against infectious
diseases and cancer by utilizing the dicationic platform technology developed by
Consortium scientists. Our plan is to commercialize dications first in niche
markets by taking advantage of fast-track FDA approvals permitted in those
areas. The Company believes that its first products will demonstrate the power
and versatility of the dication platform technology. Then, the Company will work
on developing treatments for infectious diseases which afflict large populations
of people.
The Company intends to continue to cooperate with and oversee the
results of independent research and to use business-sponsored research programs,
joint ventures and other forms of collaborative programs for product
development, manufacturing and marketing. The Company considers its current
collaborative relationships significant to the successful development of its
business and believes that it will enter into additional arrangements in the
future to develop, manufacture and market not only the product candidates on
which it is currently focusing, but also those dications which the Consortium
members are developing for future commercialization.
NextEra's strategy is to commercialize its biological product candidates
as a primary therapy against cancer and as a treatment in combination with
chemotherapy in treating cancer, AIDS and other diseases which affect
immune-suppressed patients.
PRODUCT CANDIDATES
The information below is a summary of our product candidates.
Pharmaceutical Products - Dications
The platform technology, the result of the Consortium's research
programs, is focused on understanding how dications bind to the DNA of
infectious micro-organisms. Certain exclusive rights to the platform technology
(and the dications created with such technology) have been granted to the
Company to develop and commercialize dications through the Consortium Agreement.
When dications bind to the DNA, a key enzyme is blocked from attaching and the
infectious organism is killed. The methodology used by the Consortium
researchers to develop dications evolved into the Consortium's platform
technology for designing dications to treat infectious diseases. The Consortium
is using this platform technology to design new treatments for a range of
infectious diseases, including protozoan, fungal, bacterial and viral
infections.
In May 2001, the Company completed a safety trial of the dication DB289
in human volunteers. The Company has recently completed a multi-dose human
clinical trial of DB289. In this trial, DB289 was shown to be safe to humans at
dosage levels expected to be effective against the following diseases, PCP and
Trypanosomiasis, for which it is targeted to cure. DB289 is designed to be
delivered orally to patients without toxic side effects. Since DB289 can be
given orally, the Company anticipates that it will be self-administered, thus
making it practical to deliver and substantially less expensive than competitive
products.
Another dication we are considering for human trials is DB075. The
Consortium scientists have shown that DB075 may be a successful treatment for
Cryptosporidiosis, one of the most common infections of the intestinal tract
resulting from a parasite, Cryptosporidium parvum, that causes diarrhea and
wasting in immune suppressed patients. Currently, no drug is available in the
market to treat Cryptosporidiosis. DB075 is designed to block a key enzyme from
binding to the parasite's DNA, thereby killing the organism.
DB075 works directly in the digestive tract with limited absorption
across the digestive membranes into the bloodstream. The reduced absorption
substantially reduces the possibility of side effects. The Company specifically
targeted a treatment for Cryptosporidiosis because the Company believes that the
FDA will follow a "fast-track" approval process because currently no drug exists
to treat this disease. The FDA may allow a fast-track approval process for drugs
which are designed to treat diseases for which no treatment exists.
The Company believes DB289 and DB075 are suited to demonstrate the power
and versatility of the dicationic technology platform and the effectiveness of
the dicationic oral drug delivery technology.
Other Pharmaceutical Programs
Immtech's other pharmaceutical research programs include antifungal,
Mycobacterium tuberculosis ("TB"), hepatitis C, Trypanosomiasis, Leishmaniasis
and cancer programs. Immtech's antifungal program focuses on developing a new
orally delivered dication with effectiveness against the three most common
strains of fungi, which are Candida, Aspergillus, and Cryptococcus. During the
previous 12 months, Immtech, through the Consortium, screened a series of new
compounds for effectiveness against the three strains of fungi and the
Consortium researchers identified several new dicationic compounds that showed
promising results.
In the TB program, the National Institutes of Health ("NIH") researchers
evaluated the Consortium's dications for effectiveness against TB, having
screened over 500 of the Consortium's dications. The NIH screening test
identified approximately 10 to 15 dications with activity comparable, or
superior, in performance to drugs currently available for the treatment of TB.
Additionally, Dr. Scott G. Franzblau of the University of
Illinois-Chicago ("UIC"), a recognized expert in TB research, joined with the
Consortium to test dications for effectiveness against TB. The Company will
assist Dr. Franzblau to obtain new grants and has given a grant of approximately
$74,000 to the University of Illinois-Chicago to fund Dr. Franzblau's studies.
UIC has screened approximately 120 dications sent by the Georgia State and UNC
combinatorial chemistry laboratories. Several dications in this group have shown
the potential for killing TB and will tested at UIC in animal studies. The
Company expects to continue monitoring the testing of dications and intends to
identify within the next 18 to 24 months a lead dication potent against TB and
safe to the patient as an orally administered drug candidate.
In the hepatitis C program, scientists at Auburn University ("Auburn")
have developed a patented laboratory screening test using the bovine viral
diarrhea virus ("BVDV") as a substitute for the hepatitis C virus ("HCV") to
gauge the potential for effectiveness of dications against HCV. The Auburn
scientists are advancing the lead dicationic candidates believed to have the
greatest potential for effectiveness into a special animal (mouse) model that
develops a chronic viral infection of BVDV. The results of this animal model are
expected to help the researchers determine which dications will be further
studied or advanced into primate tests. Immtech plans to present such identified
dications to several large pharmaceutical companies with expertise in HCV
testing. These companies will screen the most active dications in their internal
proprietary screening tests to assess the viability of the dications as
treatments for HCV. The Company expects to form joint ventures or license
dications to the pharmaceutical companies.
In the Trypanosomiasis (African sleeping sickness) program (part of a
clinical research subcontract between the Company and UNC ("Clinical Research
Agreement") funded by $9.8 million of a $15.1 million grant to UNC from the Bill
& Melinda Gates Foundation (the "Gates Foundation"), compound DB289 has shown to
be safe in human Phase I trials. DB289 has demonstrated improved safety and
effectiveness when compared to existing treatments in animal models.
In the Leishmaniasis program, also part of the Gates Foundation grant,
the Company is working with The London School of Hygiene and Tropical Medicine
in England ("The London School"), Ohio State University ("OSU"), UNC and Georgia
State to develop a drug to treat Leishmaniasis. The London School and OSU have
sub-contracted with the Consortium to screen the drug candidates supplied by
Georgia State and UNC. The London School researchers have screened Consortium
dications for effectiveness in animal tests and have identified dications that
show promising preliminary test results. The identified dications have shown
potential for effectiveness equivalent to or better than drugs currently used to
treat Leishmaniasis. Immtech is responsible (under the Clinical Research
Agreement with UNC in connection with the Gates Foundation grant) for the
preclinical development of a new drug resulting from the Consortium research for
treatments of Leishmaniasis.
In the cancer program, the National Cancer Institute (the "NCI") has
tested over 550 of the Consortium's dications for anti-cancer activity,
reporting that a significant number of the dications tested have either retarded
or killed cancer cells. The NCI has identified 47 of the Consortium's dications
as displaying specificity (effectiveness against specific cancer types) and
potency as anti-cancer agents. Eighteen have been identified by the NCI to
advance to animal (mouse) model testing. Early test results show that specific
dications may be effective against different cancer types and that most of the
dications tested had some effectiveness even at low doses. While the
Consortium's dications have shown effectiveness against cancer, this research is
at an early stage and the treatment of cancer is a highly specialized endeavor
that is outside the scope of the Company's current expertise. The Company
intends to seek partners to jointly develop and commercialize the dications in
its cancer program.
Biological Products
The Company's biological program is operated through the joint venture
company NextEra, formed in July 1998 by the Company, Franklin Research Group
("Franklin") and Dr. Larry Potempa, NextEra's Chief Science Officer. This
program focuses on strengthening the body's natural immune system by (i)
improving the structural environment around cells, and (ii) reprogramming cancer
cells to act normally. The Company entered into an agreement in 1998 with
Franklin to obtain funding for NextEra to accelerate the biological program for
the treatment of cancer and related diseases.
Company researchers have discovered that, as part of the immune system's
response to disease, the blood protein C-reactive protein "CRP" is modified by
the body to form modified CRP ("mCRP"). Modified CRP strengthens tissues and
their interconnective structures that work to increase the body's ability to
resist disease and improve the effectiveness of the immune system. mCRP is found
naturally in healthy tissues surrounding blood vessels, in the tissues in
lymphatic organs, and in cells that secrete proteins or other cell products. In
contrast, mCRP is absent (or present in greatly reduced amounts) in cancerous
tissues found in the lung, breast or prostate.
The Company's scientists have discovered that when cancerous cells come
in contact with mCRP, cell behavior is markedly changed, abnormal rapid growth
ceases and the cell returns to normal activity. NextEra's biological program
focuses on replacing mCRP in areas where mCRP is deficient, thereby increasing
barriers between cells to reduce the entry and propagation of diseases and
enhancing immune reactions.
In 1996, Immtech conducted a Phase I human clinical trial to evaluate
the safety of its rmCRP product candidate in volunteers who were infected with
HIV. The results showed that the drug was safe to administer and duplicated the
results seen in animal pre-clinical tests. Subsequently, the Company contributed
its rmCRP program to NextEra as part of the joint venture with Franklin. NextEra
has signed a contract with a third party manufacturing company to produce rmCRP
for human clinical trials in cancer patients.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby.
SELLING STOCKHOLDERS
The Selling Stockholders listed below acquired Shares of the Company on
December 8, 2000 or have the right to acquire Shares upon the exercise of
warrants issued to them by the Company on March 15, 2001.
On December 8, 2000 the Selling Stockholders purchased 584,250 of the
Shares for approximately $4,674,000. The Company agreed to use reasonable
efforts to register the resale of such Shares by the Selling Stockholders within
45 days of the closing date and to keep such registration effective for the
lesser of six months or until all Shares are sold.
On March 15, 2001 the Company issued a warrant to The Kriegsman Group to
purchase 250,000 of the Shares and provided The Kriegsman Group with a right to
demand the Company to use its reasonable good faith efforts to register such
Shares and to keep such registration effective until March 15, 2006. The
Kriegsman Group made such demand of the Company.
The following table sets forth for each Selling Stockholder the number
of Shares of Common Stock being registered in this Prospectus. Because the
Selling Stockholders may offer all, some or none of their Shares, the Company
cannot provide a definitive estimate of the number of Shares they will hold
after such registration. Other than Kriegsman, none of the Selling Stockholders
are or were directors or officers of, or have or have had any material
relationship with, the Company, any of its predecessors, or any of its
affiliates over the past three years. The Company is obligated to pay Kriegsman,
pursuant to a financial consulting and services contract, $20,000 per month
through March 14, 2002, unless such contract is terminated earlier. Pursuant to
the terms of the financial consulting and services contract, the Company
subsequently terminated the contract on September 14, 2001 after paying The
Kriegsman Group $125,682 in fees and expenses. In addition, the Company may be
obligated to pay certain other fees to Kriegsman if the Company were to engage
in certain transactions during the 18 months following the expiration or
termination of such contract. This Prospectus is filed at the Company's expense.
SHARES BENEFICIALLY
OWNED IMMEDIATELY NUMBER OF SHARES
NAME PRIOR TO THE OFFERING REGISTERED
-----------------------------------------------------------------------------------------------------------
China Dragon Limited 290,000 290,000
-----------------------------------------------------------------------------------------------------------
The Kriegsman Group* 250,000 250,000
-----------------------------------------------------------------------------------------------------------
Vivienne Lee 90,600 51,000
-----------------------------------------------------------------------------------------------------------
Michael L. Keiser & Rosalind C. Keiser
Charitable Trust 25,000 25,000
-----------------------------------------------------------------------------------------------------------
Frederick W. Wackerle 40,000 25,000
-----------------------------------------------------------------------------------------------------------
Rick Kash 59,233 20,000
-----------------------------------------------------------------------------------------------------------
Lau Ching Yin Judy /Chan Chee Wing 159,810 20,000
-----------------------------------------------------------------------------------------------------------
Chan Tak Chi William 31,000 20,000
-----------------------------------------------------------------------------------------------------------
Bernard K. Chiu 66,900 20,000
-----------------------------------------------------------------------------------------------------------
Jerome A. Grossman 12,500 12,500
-----------------------------------------------------------------------------------------------------------
Falcone Ltd. Partnership 12,500 12,500
-----------------------------------------------------------------------------------------------------------
Peter F. Drake 12,500 12,500
-----------------------------------------------------------------------------------------------------------
Kevin Bowen 12,000 12,000
-----------------------------------------------------------------------------------------------------------
Happy Results Limited 104,900 10,000
-----------------------------------------------------------------------------------------------------------
John M. Kelly 11,450 10,000
-----------------------------------------------------------------------------------------------------------
Cheung Shuk Kwan 10,000 10,000
-----------------------------------------------------------------------------------------------------------
Stephen D. Chubb 6,250 6,250
-----------------------------------------------------------------------------------------------------------
Robert H. Lessin Venture Capital, LLC 6,250 6,250
-----------------------------------------------------------------------------------------------------------
Robert D. Scallan 6,250 6,250
-----------------------------------------------------------------------------------------------------------
Dr. Levi Hong Kaye Lee 10,500 4,000
-----------------------------------------------------------------------------------------------------------
Cheng Ching Jung 4,000 4,000
-----------------------------------------------------------------------------------------------------------
Lau Chu 2,000 2,000
-----------------------------------------------------------------------------------------------------------
Cheung Yuk Chor Dickie 2,000 2,000
------------------------------------------------------------------------------------------------------------
Lee Shun Lung 1,000 1,000
-----------------------------------------------------------------------------------------------------------
Chan Kin Man 1,000 1,000
-----------------------------------------------------------------------------------------------------------
Clarence E. McFeely 1,000 1,000
-----------------------------------------------------------------------------------------------------------
Total: 1,228,643 834,250
-----------------------------------------------------------------------------------------------------------
* 150,000 shares underlying the warrants are subject to certain vesting
conditions and may never vest.
PLAN OF DISTRIBUTION
We will not receive any proceeds from the sale of the Shares offered
hereby.
We are registering the Shares on behalf of the Selling Stockholders. The
Shares covered by this Prospectus may be offered and sold, from time to time, by
the Selling Stockholders, or by purchasers, pledgees, donees, transferees or
other successors in interest pursuant to this Prospectus (a) in transactions
(including one or more block transactions) on the NASDAQ National Market System;
(b) in the public market of the NASDAQ National Market System; (c) in privately
negotiated transactions, (d) through put or call option transactions relating to
the common stock, through short sales of the common stock, or (e) in a
combination of such transactions. Each sale may be made either at the market
price prevailing at the time of sale or at a negotiated price. Those
transactions may be made through brokers or dealers, which may act as agents or
principals and such brokers or dealers may receive compensation in the form of
commissions, concessions or discounts from the Selling Stockholders and/or the
purchasers of the common stock for whom such broker-dealers may act as agents or
to whom they sell as principal, or both not exceeding those customary in similar
transactions.
To the Company's knowledge, the Selling Stockholders have not entered
into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the Shares, nor is there an underwriter or
coordinating broker acting in connection with the proposed sales of Shares by
the Selling Stockholders. Any shares covered by this prospectus that qualify for
sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144
rather than pursuant to this Prospectus. The Company will pay all costs and
expenses incurred in connection with the registration of the Shares offered by
this Prospectus. Any brokerage commissions and similar selling expenses
attributable to the sale of Shares will be borne by the Selling Stockholders.
The Selling Stockholders, dealers acting in connection with the offering
and brokers executing sell orders on behalf of one more Selling Stockholder may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933.
In addition, any such broker or dealer may be required to deliver a copy of this
prospectus to any person who purchases any of the Shares from or through such
broker or dealer.
The Company has agreed to indemnify the Selling Stockholders and the
Selling Stockholders' respective officers, directors, employees and agents, and
each person who controls such Selling Stockholders, in certain circumstances
against certain liabilities, including liabilities arising under the Securities
Act, and the Selling Stockholders have agreed to indemnify Immtech and its
directors and officers in certain circumstances against certain liabilities,
including liabilities arising under the Securities Act, in each case in
connection with their offering.
LEGAL MATTERS
Legal matters in connection with the validity of the common stock
offered hereby will be passed upon for the Company by Cadwalader, Wickersham &
Taft, New York, New York.
EXPERTS
The financial statements incorporated in this prospectus by reference
from the Company's Annual Report on Form 10-KSB/A (Amendment No. 1) for the year
ended March 31, 2001 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report (which report expresses an unqualified
opinion and includes an explanatory paragraph regarding substantial doubt about
the Company's ability to continue as a going concern), which is incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
GLOSSARY
As used in this Prospectus, the following terms have the meanings set
forth below.
AIDS Acquired immune deficiency syndrome.
Cryptosporidiosis A disease caused by a parasite, Cryptosporidium parvum, that
is commonly found in the intestinal tract of mammals that,
in immune suppressed individuals, can cause a chronic,
profuse, watery diarrhea accompanied by fever, marked weight
loss, and enlarged lymph nodes.
DB075 The designation given to a dication which is being studied
for use as a drug for treatment of Cryptosporidiosis.
DB289 The designation given to the Company's lead dication.
Dication A chemical molecule with two positively charged ends that
are held together by a chemical linker. Dications bind to
the DNA of infectious organisms.
DNA A type of molecule made up of polymerized
deoxyribonucleotides linked together by phosphate bonds.
FDA U.S. Food and Drug Administration.
IND Investigational New Drug Application - a document required
to be filed with the FDA prior to performing clinical
studies on human subjects in the United States.
Leishmaniasis An infection caused by a protozoal parasite that affects the
skin and abdominal organisms, causing ulcers or skin
disorders that resemble leprosy.
Phase I Clinical testing in which the safety and pharmacological
profile of a new drug is established in humans.
Phase II Clinical testing in which the effectiveness of a new drug is
established in humans. This includes establishing the dose
amount and frequency required to achieve a therapeutic
effect, the metabolic rate of the administered drug, and the
toxicity profile in specific patient populations.
Phase III Clinical testing in which the effectiveness and safety of a
new drug is tested over a large group of subjects of
different ethnic and geographic backgrounds. Particular
attention is paid to effects the drug might have on groups
that share various traits.
TB A disease caused by bacteria, Mycobacterium tuberculosis,
that is transmitted by breathing in, or eating infected
droplets, usually affecting the lungs, although infection of
other organ systems can occur.
Trypanosomiasis An infection caused by a protozoal parasite and transmitted
usually by insect bites. Also known as African Sleeping
Sickness.
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IMMTECH INTERNATIONAL, INC.
834,250 SHARES
COMMON STOCK
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PROSPECTUS
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NOVEMBER 28, 2001
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