Item 9.01 Financial Statements and Exhibits
TABLE OF CONTENTS ITEM DESCRIPTION PAGE 1.01 Entry into a Material Definitive Agreement 5 Acquisition of Relmada and Related Transactions 5 2.01 Completion of Acquisition or Disposition of Assets 6 Form 10 Disclosure 6 Description of Business 6 Risk Factors 12 Management's Discussion and Analysis of Financial Condition and 36 Results of Operations Description of Property 42 Security Ownership of Certain Beneficial Owners and Management 43 Directors and Executive Officers 45 Executive Compensation 49 Certain Relationships and Related Transactions, and Director 51 Independence Legal Proceedings 53 Market Price And Dividends on our Common Equity and Related 53 Stockholder Matters Recent Sales of Unregistered Securities 54 Description of Securities 54 Indemnification of Directors and Officers 58 Changes in and Disagreements with Accountants on Accounting and 59 Financial Disclosure Item 3.02 Unregistered Sales of Equity Securities 59 Item 4.01 Changes in Registrant's Certifying Accountant 59 Item 5.01 Changes in Control of Registrant 60 Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory 60 Arrangements of Certain Officers Item 5.03 Amendments to Articles of Incorporation or bylaws; Change in 60 Fiscal Year Item 5.05 Amendments to the Registrant's Code of Ethics, Waiver of the Code 60 of Ethics Item 5.06 Change in Shell Company Status 60 Item 9.01 Financial Statements and Exhibits 61 Signatures 63 Audited Consolidated Financial Statements for the years ended Ex 99.1 December 31, 2013 and 2012 for Relmada Therapeutics, Inc. Unaudited financial statements for the three months ended March 31, Ex. 99.2 2014 and 2013 Unaudited Pro Forma Combined Financial Information of Camp Nine and Ex 99.3 Relmada Therapeutics, Inc. 4
Item 1.01 Entry into a Material Definitive Agreement.
ACQUISITION OF RELMADA AND RELATED TRANSACTIONS
Acquisition of Relmada
On the Closing Date,
The foregoing description of the Exchange Agreement is qualified in its entirety by reference to the provisions of the Exchange Agreement filed as Exhibit 2.1 to this Report, which is incorporated by reference herein.
In connection with the Offering, Relmada entered into the 2014 Unit Investor Rights Agreement (the "Investor Rights Agreement") with each of the Investors, under which it is required, within 45 days after the final closing of the Offering (the "Filing Deadline"), to file a registration statement (the "Registration Statement") registering for resale (i) all Common Stock issued to the Investors pursuant to the Share Exchange Agreement, in exchange for the Relmada Stock issued as part of the Units, and (ii) all shares of Common Stock issuable upon exercise of the warrants issued pursuant to the Share Exchange Agreement in exchange for the Investor Warrants (collectively, the "Registrable Shares"). The holders of any Registrable Shares removed from the Registration Statement as a result of a Rule 415 or other comment from the
In connection with the Offering, we entered into lock-up agreements (collectively, the "Lock-Up Agreements") with each of the officers, and directors, as well as the Placement Agent and any other controlling persons, under which they agreed to not sell or otherwise transfer any securities of Relmada or
The foregoing description of the Subscription Agreements, Unit Purchase Agreement, A Warrant, B Warrant, Investor Rights Agreement, and Lock-Up Agreements are qualified in its entirety by reference to the provisions of the Forms of Subscription Agreement, Unit Purchase Agreement, A Warrant, B Warrant, Investor Rights Agreement, Officer and Director Lock-Up Agreement, and CEO Lock Up Agreement, filed as Exhibits 10.9, 10.7, 4.3, 4.4, 10.8, 4.9, and 4.10, respectively, to this Report, which are incorporated by reference herein.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The disclosure in Item 1.01 of this Report regarding the Share Exchange is incorporated herein by reference in its entirety.
FORM 10 DISCLOSURE
We acquired Relmada on the Closing Date pursuant to the Share Exchange, which was accounted for as a recapitalization effected by a share exchange. Item 2.01(f) of Form 8-K provides that if the Company was a shell company, other than a business combination related shell company (as those terms are defined in Rule 12b-2 under the Exchange Act) immediately before the Share Exchange, then the Company must disclose the information that would be required if the Company were filing a general form for registration of securities on Form 10 under the Exchange Act reflecting all classes of the Company's securities subject to the reporting requirements of Section 13 of the Exchange Act upon consummation of the Share Exchange.
To the extent that the Company might have been considered to be a shell company immediately before the Share Exchange, we are providing below the information that we would be required to disclose on Form 10 under the Exchange Act if we were to file such form. Please note that the information provided below relates to the combined Company after the acquisition of Relmada, except that information relating to periods prior to the date of the Share Exchange relates only to Relmada unless otherwise specifically indicated.
Unless otherwise indicated below, "
DESCRIPTION OF BUSINESS
We are a clinical stage, private biopharmaceutical company focused on drugs to treat pain. In 2013, the US market for prescription pain drugs was approximately
We intend to realize our business objectives by implementing two core strategies: a) develop improved versions of proven drug candidates for treating pain conditions where they can fill an unmet need; and b) develop d-methadone as an innovative NMDA antagonist platform to treat neuropathic pain or other potential conditions. A core part of our strategy of developing repurposed drugs for unmet needs allows us to accelerate development at a lower cost. Product development plans for several of our lead products such as levorphanol and buprenorphine require the completion of a relatively small Phase I program before entering Phase III pivotal clinical trials using a 505(b)(2)
· LevoCap ER ("Levorphanol ER" or "Levorphanol" and similar terms) is a proprietary once-a-day extended release (ER) dosage form of the potent opioid levorphanol in a tamper resistant drug delivery system. Unlike other opioids, LevoCap ER modulates pain through both opioid pathways acting at mu, delta and kappa opioid receptors, and monoaminergic (noradrenergic and serotonergic) pathways thereby providing pain relief through multiple mechanisms in one capsule. Thus, LevoCap ER combines the pain relieving mechanisms of OxyContin® (U.S. 2013 sales,
$2.5Baccording to IMS Health) and Cymbalta® (global 2013 sales, $5.1B, according to Eli Lilly 2013 annual report). Importantly, levorphanol has also been shown to partially reverse analgesic tolerance to morphine and may therefore benefit patients who are tolerant to the analgesic effects of their current opioid. LevoCap ER is anticipated to compete in the opioid market, which according to IMS Health had $8.3Bin U.S. sales in 2013. 6
· d-Methadone is the d-optical isomer of racemic methadone and an antagonist at
the N-methyl-D-aspartate (NMDA) receptor. NMDA antagonists have been shown to provide relief to patients with neuropathic pain and to reduce analgesic tolerance to opioids. Our open-label Phase I/IIa study at the
Memorial Sloan Kettering Cancer Centershowed that d-methadone was safe and well tolerated with 75% of the patients completing the study finding d-methadone to be moderately or very effective. d-Methadone will compete in the approximately $2.4Bneuropathic pain market (Datamonitor, 2010), which is expected to grow to $9.7Bby 2018 according to a 2011 report by Decision Resources. Management expects d-Methadone to leverage the established analgesic efficacy and use of methadone but without its safety hazard.
· BuTab ER ("Buprenorphine ER" or "Buprenorphine" and similar terms) is a
proprietary extended release (ER) oral dosage form of the DEA Schedule III (C-III) opioid, buprenorphine. There are no orally absorbed dosage forms of Buprenophine and historically both patients and doctors prefer oral dosing versus sublingual or patch products.
The Drug Enforcement Agency("DEA") classifies controlled substances from Schedule I (C-I) to C-V, where C-I opioids have no current medical use and the potential for abuse is greatest for C-II and lowest for C-V. BuTab ER is being developed for chronic pain and opioid maintenance therapy. Unlike C-II opioids, BuTab ER carries reduced risk of physical dependence, euphoria, and certain opioid side effects, while benefitting from the convenience of telephone prescribing and refills. BuTab ER will compete in the opioid pain market and the sublingual buprenorphine (Suboxone®/Subutex®) opioid dependence market, which according to Wolters Kluwer, had approximate U.S. 2013 sales of $1.4B.
· MepiGel ("Mepivacaine gel" or "Mepivacaine" and similar terms) is a
proprietary topical non-greasy gel dosage form of the local anesthetic mepivacaine for the treatment of postherpetic neuralgia and painful HIV-associated neuropathy. We have received two 7-year FDA Orphan Drug market exclusivities for mepivacaine, one for "the treatment of painful HIV-associated neuropathy" and the other for "the management of postherpetic neuralgia". Lidoderm® patch, the only approved topical local anesthetic suffers from poor patch adhesion, has shown to have inefficient skin absorption and low efficacy, deficiencies which MepiGel can exploit. MepiGel will be used alone or in combination with oral therapies for neuropathic pain such as Lyrica® and Cymbalta®. Management anticipates that it will compete with Lidoderm® patch which had 2012 sales of
$948Min the U.S. according to Endo Pharmaceuticals2012 annual report.
In addition to our priority drug development projects, we have an early stage pipeline of product candidates which are briefly described in the business section of this document.
Our Corporate History and Background
We were formed as a
Acquisition of Relmada
On the Closing Date, Relmada completed a Share Exchange with Camp Nine, whereby Camp Nine acquired 94% of the issued and outstanding capital stock of Relmada from the Relmada Stockholders in exchange for the issuance of 28,098,178, shares of Common Stock to the Relmada Shareholders, which represented 84.7% of our issued and outstanding common stock after the consummation of the Share Exchange. Relmada's outstanding options and warrants were also exchanged for options and warrants to purchase shares of Common Stock of Camp Nine at a ratio of 10 to 1. Prior to the Share Exchange, Camp Nine had
The Share Exchange was accounted for as a "reverse merger" rather than a business combination, wherein Relmada is considered the acquirer for accounting and financial reporting purposes. The statement of operations reflects the activities of Relmada from the commencement of its operations on
Effective at the Closing of the Share Exchange,
As a result of the Share Exchange, Relmada became a subsidiary of Camp Nine and Camp Nine assumed the business and operations of Relmada. Camp Nine plans to change its name to
Corporate History of Relmada
Relmada commended operations on
Summary of Scientific and Business Achievements
Relmada's corporate and drug development achievements during and after the closing of its
February 2014, Relmada appointed Dr. Eliseo Salinas, MD, MSC as President and Chief Scientific Officer. Dr. Salinas was previously EVP, Specialty Pharma, Global R&D and Chief Scientific Officer at Shire Pharmaceuticals, EVP - Head of R&D and Chief Medical Officer at Elan Pharmaceuticals, and was Head of Worldwide CNS at Wyeth. Dr. Salinas has been the driving force behind the development of several highly successful drugs including Effexor XR, Adderall XR; · In December 2013, we completed the acquisition of Medeor, Inc., from whom we had licensed d-methadone; · In December 2013, Relmada appointed Doug Beck, CPA as Chief Financial Officer. Mr. Beckhas been the CFO of several public companies including Lev Pharmaceuticals, Inc., which was acquired by ViroPharma, Incorporatedfor $618 millionin 2008; · During 2013, we completed good manufacturing practices, or GMP manufacturing for LevoCap ER additional strengths, and also completed a 30 patient pharmacokinetic study for LevoCap ER and announced a positive outcome; · In 2013, we successfully manufactured GMP d-methadone active pharmaceutical ingredients, or API; · In 2013, we completed a successful preclinical study with MepiGel that resulted in the selection of the optimal formulation; · In 2013, we completed a successful preclinical study with BuTab ER that resulted in achieving proof of concept for gastrointestinal bioavailability of buprenorphine in an animal model.
Relmada's strategy is to leverage its considerable industry experience, analgesic therapy knowledge and development expertise to identify, develop and commercialize product candidates with strong market potential that can fulfill unmet medical needs in the treatment of pain.
We plan to further develop our new and proprietary drug products to provide improved efficacy, safety and patient convenience primarily using the 505(b)(2) development pathway and develop new indications where use exclusivity is available under the Hatch-Waxman Act, orphan drug regulations and through the generation of IP (Intellectual Property). Relmada will also pursue the development of d-methadone via the traditional NDA route. RTI will continue to prioritize its product development activities after taking into account the resources it has available, market dynamics and potential for value addition. The Company will continue to outsource development of its products, while retaining scientific, operational and financial oversight and control.
RTI intends to seek and execute licensing and/or co-development agreements with companies capable of supporting the final stages development of the Company's products and their subsequent commercialization in the U.S. and international markets. The Company is planning to develop its own internal sales and marketing capabilities to commercialize some or all of the Company's products to selected specialty medical segments in the U.S. while out-licensing sales and marketing for the international market.
Relmada may in-license late-stage or approved drugs to accelerate the pathway to become a fully integrated pain specialty biopharmaceutical company with commercial capability and to reach profitability sooner. Alternatively, RTI might consider a trade sale of its products or the entire company if it deems that it is in the best interests of our stockholders.
Analgesics continue to be among the most widely prescribed medications and there is little to suggest that their preeminence will change in the near future, given the prominent role of pain in many diseases. Survey data indicate substantial patient dissatisfaction with current pain management modalities. According to the Chronic Pain in
According to IMS Health, the U.S. opioid market was worth approximately
Many patients with neuropathic pain have suboptimal relief with monotherapy and treatment is frequently multimodal, involving use of two or more drugs from different pharmacologic classes. Our topical local anaesthetic mepivacaine and oral d-methadone are anticipated to be used for the treatment of painful peripheral neuropathies. According to
Our orphan designated topical MepiGel is anticipated to compete with topical Lidoderm® patch with
We believe that we have executed our lower clinical risk strategy by developing a portfolio of improved versions of proven drug candidates for treating unmet medical need in various types of pain conditions. Relmada has successfully completed a 15-subject, 5-way crossover bioavailability study of its abuse resistant once-a-day dosage forms of the multimodal strong opioid analgesic, LevoCap ER under a U.S. FDA IND (Investigational New Drug) application. The study evaluated 4 promising GMP formulations of LevoCap ER against immediate . . .