Unassociated Document
As
filed with the Securities and Exchange Commission on December 23,
2009
Registration
Statement No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Genta
Incorporated
(Exact
name of Registrant as Specified in Its Charter)
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Delaware
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2836
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33-0326866
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(State or other jurisdiction of incorporation or
organization)
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(Primary Standard Industrial
Classification Code)
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(I.R.S. Employer Identification No.)
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200
Connell Drive
Berkeley
Heights, NJ 07922
(908)
286-9800
(Address,
including zip code, and telephone number, including area code, of registrant’s
principal executive offices)
Raymond
P. Warrell, Jr., M.D.
Chairman
and Chief Executive Officer
Genta
Incorporated
200
Connell Drive
Berkeley
Heights, NJ 07922
(908)
286-9800
(Name,
address, including zip code, and telephone number including area code, of agent
for service)
Copies
to:
Emilio
Ragosa, Esq.
Morgan,
Lewis & Bockius LLP
502
Carnegie Center
Princeton,
New Jersey 08540
(609)
919-6600
Approximate date of commencement of
proposed sale to public: From time to time or at one time
after this registration statement becomes effective in light of market
conditions and other factors.
If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box. o
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933 (the
“Securities Act”), other than securities offered only in connection with
dividend or interest reinvestment plans, check the following
box. x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
If this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. o
If this
Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “smaller reporting company, accelerated filer and large
accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer (Do not check if smaller reporting company)
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Smaller reporting company x
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CALCULATION
OF REGISTRATION FEE
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Title of each class of
securities to be registered
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Proposed
maximum
aggregate
offering price(1)(2)(3)
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Amount of
registration fee
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Common
Stock, par value $0.001 per share (4)
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(5)
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Preferred
Stock, par value $0.001 per share (6)
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(5)
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Debt
Securities (7)
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(5)
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Warrants
(8)
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(5)
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Units
(9)
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Totals
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$
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50,000,000
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$
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3,565.00
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(1)
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The
proposed maximum offering price will be determined from time to time by
the Registrant in connection with the issuance of securities registered
under this registration statement.
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(2)
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Estimated solely for purposes of
calculating the amount of the registration fee pursuant to Rule 457(o)
promulgated under the Securities Act of 1933, as
amended.
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(3)
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In no event will the aggregate
initial offering price of all securities issued from time to time pursuant
to this registration statement exceed $50,000,000.00. Securities
registered under this registration statement may be sold separately, or
together. This total amount also includes such securities as may, from
time to time, be issued upon conversion or exchange of securities
registered under this registration statement, to the extent any such
securities are, by their terms, convertible into or exchangeable for other
securities.
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(4)
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An
indeterminate number of shares of common stock of the Registrant as may be
sold from time to time are being registered under this registration
statement. Also includes such indeterminate number of shares of common
stock as may be (a) issued upon conversion, redemption or exchange for any
debt securities, preferred stock or other securities that provide for
conversion or exchange into common stock, (b) issued upon exercise and
settlement of any warrants or (c) issued as a result of stock splits,
stock dividends or similar
transactions.
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(5)
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Not required to be included
pursuant to General Instruction II.D. of Form S-3 under the Securities Act
of 1933, as amended.
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(6)
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An indeterminate number of shares
of preferred stock of the Registrant as may be sold from time to time are
being registered under this registration statement. Also includes such
indeterminate number of shares of preferred stock as may be (a) issued
upon conversion, redemption or exchange for any debt securities, preferred
stock or other securities that provide for conversion or exchange into
preferred stock, (b) issued upon exercise and settlement of any warrants
or (c) issued as a result of stock splits, stock dividends or similar
transactions.
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(7)
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An
indeterminate principal amount of debt securities of the Registrant as may
be sold from time to time are being registered under this registration
statement. If any debt securities of the Registrant are issued at an
original issue discount, then the offering price shall be in such greater
principal amount as shall result in an aggregate initial offering price
not to exceed $50,000,000.00, less the dollar amount of any securities
previously issued under this registration
statement.
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(8)
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An
indeterminate number of warrants of the Registrant as may be sold from
time to time are being registered under this registration statement.
Warrants may be exercised to purchase common stock, preferred stock or
debt securities.
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(9)
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Each
unit will be issued under a unit agreement or indenture and will represent
an interest in one or more debt securities, warrants, preferred shares and
common shares, as well as debt or equity securities of an entity
affiliated or not affiliated with the Registrant, in any combination,
which may or may not be separable from one
another.
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The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act or until the registration statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a), may
determine.
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and is not soliciting an offer to buy the
securities in any state where the offer or sale is not permitted.
Subject
to Completion, dated December 23, 2009
PROSPECTUS
GENTA
INCORPORATED
$50,000,000
DEBT
SECURITIES
WARRANTS
PREFERRED
STOCK
COMMON
STOCK
UNITS
Genta
Incorporated may from time to time offer to sell debt securities, warrants,
preferred stock, common stock and/or units, separately or together in one or
more combinations. The debt securities, warrants and preferred stock may be
convertible into or exercisable or exchangeable for common stock or preferred
stock or other securities of Genta Incorporated or any other party identified in
the applicable prospectus supplement.
Our
common stock is traded on the OTC Bulletin Board under the symbol “GETA.OB”. The
closing price of our common stock on December 16, 2009 was $0.08 per
share. Our principal offices are located at 200 Connell Drive,
Berkeley Heights, New Jersey 07922. Our telephone number is (908)
286-9800.
The total
amount of debt securities, warrants, preferred stock, common stock and units
will have an initial aggregate offering price of up to $50,000,000.00, or the
equivalent amount in other currencies, currency units or composite
currencies.
The
securities covered by this prospectus may be offered and sold to or through one
or more underwriters, dealers and agents, or directly to purchasers, on a
continuous or delayed basis.
This
prospectus describes some of the general terms that may apply to these
securities and the general manner in which they may be offered. The specific
terms of any securities to be offered, and the specific manner in which they may
be offered, will be described in one or more supplements to this
prospectus.
INVESTING
IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. RISKS ASSOCIATED WITH AN
INVESTMENT IN OUR SECURITIES WILL BE DESCRIBED IN THE APPLICABLE PROSPECTUS
SUPPLEMENT AND CERTAIN OF OUR FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION, AS DESCRIBED UNDER THE SECTION ENTITLED “RISK FACTORS” ON PAGE 14 OF
THIS PROSPECTUS. THE PROSPECTUS SUPPLEMENT APPLICABLE TO EACH TYPE OR
SERIES OF SECURITIES WE OFFER MAY CONTAIN A DISCUSSION OF ADDITIONAL RISKS
APPLICABLE TO AN INVESTMENT IN US AND THE PARTICULAR TYPE OF SECURITIES WE ARE
OFFERING UNDER THAT PROSPECTUS SUPPLEMENT.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The
date of this prospectus is December 23, 2009
EXPLANATORY
NOTE
The
prospectus contained herein relates to the general description of debt
securities, warrants, preferred stock, common stock and units issuable by Genta
Incorporated.
To the
extent required, the information in the prospectus, including financial
information, will be updated at the time of each offering. Upon each such
offering, a prospectus supplement to the base prospectus will be
filed.
TABLE
OF CONTENTS
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1
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ABOUT
GENTA INCORPORATED
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1
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SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
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13
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RISK
FACTORS
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14
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DESCRIPTION
OF THE SECURITIES WE MAY OFFER
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28
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DEBT
SECURITIES
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28
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WARRANTS
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34
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UNITS
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37
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PREFERRED
STOCK
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37
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COMMON
STOCK
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40
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BOOK-ENTRY
PROCEDURES AND SETTLEMENT
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41
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USE
OF PROCEEDS
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44
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PLAN
OF DISTRIBUTION
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45
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WHERE
YOU CAN FIND MORE INFORMATION; INCORPORATION OF DOCUMENTS BY
REFERENCE
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48
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LEGAL
MATTERS
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49
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EXPERTS
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49
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You
should rely only on the information provided in this prospectus and the
prospectus supplement, as well as the information incorporated by reference. We
have not authorized anyone to provide you with different information. We are not
making an offer of these securities in any jurisdiction where the offer is not
permitted. You should not assume that the information in this prospectus, the
prospectus supplement or any documents incorporated by reference is accurate as
of any date other than the date of the applicable document.
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 that we filed with
the U.S. Securities and Exchange Commission, referred to herein as the SEC,
using a “shelf” registration process. Under a shelf registration
process, we may issue, in one or more offerings, any combination of senior or
subordinated debt securities, warrants, preferred stock, common stock or units,
collectively referred to herein as the securities, up to a total dollar amount
of $50,000,000.00.
Each time
we sell these securities we will provide you with a prospectus supplement
containing specific information about the terms of each such
sale. This prospectus may not be used to sell any of the securities
unless accompanied by a prospectus supplement. The prospectus
supplement also may add, update or change information in this prospectus. If
there is any inconsistency between the information in the prospectus and the
prospectus supplement, you should rely on the information in the prospectus
supplement. You should read both this prospectus and any prospectus
supplement together with additional information described under the heading
“Where You Can Find More Information; Incorporation of Documents by Reference”
beginning on page 48 of this prospectus.
Unless
otherwise indicated or unless the context otherwise requires, all references in
this prospectus to “Genta,” “we,” “us,” or similar references mean Genta
Incorporated and our subsidiaries.
You
should rely only on the information contained in this prospectus or in a
prospectus supplement or amendment. We have not authorized anyone to provide you
with information different from that contained or incorporated by reference in
this prospectus. We may offer to sell, and seek offers to buy these securities
only in jurisdictions where offers and sales are permitted. The information
contained in this prospectus or a prospectus supplement or amendment or
incorporated herein by reference is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale
of securities.
ABOUT
GENTA INCORPORATED
GENERAL
Overview
We are a
biopharmaceutical company engaged in pharmaceutical (drug) research and
development. We are dedicated to the identification, development and
commercialization of novel drugs for the treatment of cancer and related
diseases. Our research portfolio consists of two major programs: “DNA/RNA
Medicines” (which includes our lead oncology drug, Genasense®); and
“Small Molecules” (which includes our marketed product, Ganite®, and
tesetaxel and oral gallium-containing compounds).
The
DNA/RNA Medicines program includes drugs that are based on using modifications
of either DNA or RNA as drugs that can be used to treat disease. These
technologies include antisense, decoys, and small interfering or micro RNAs. Our
lead drug from this program is an investigational antisense compound known as
Genasense®
(oblimersen sodium injection). Genasense® is
designed to disrupt a specific mRNA, which then block the production of a
protein known as Bcl-2. Current science suggests that Bcl-2 is a fundamental
(although not sole) cause of the inherent resistance of cancer cells to
anticancer treatments, such as chemotherapy, radiation, and monoclonal
antibodies. While Genasense® has
displayed anticancer activity when used alone, we are developing the drug
primarily as a means of amplifying the cytotoxic effects of other anticancer
treatments. We are also developing tesetaxel as an oral agent that
targets tubulin in cancer cells, an extremely well-validated cancer
target. Oral gallium compounds employ the same active ingredient in
our marketed product, Ganite®, that
has demonstrated clinical activity in a range of diseases associated with
accelerated bone loss.
Genasense®
For the
past several years, we have sought to secure regulatory approval for the
marketing of Genasense®.
Genasense® has been
studied in combination with a wide variety of anticancer drugs in a number of
different cancer indications. We have reported results from randomized trials of
Genasense® in a
number of diseases. Under our own sponsorship or in collaboration with others,
we are currently conducting additional clinical trials. We are especially
interested in the development, regulatory approval, and commercialization of
Genasense® in at
least three diseases: melanoma; chronic lymphocytic leukemia (CLL); and
non-Hodgkin’s lymphoma (NHL).
Melanoma
Our major
current initiative is a randomized controlled trial that tests whether the
addition of Genasense® to
standard chemotherapy can improve outcomes for patients with advanced melanoma.
In August 2007, we initiated a new Phase 3 trial of Genasense® plus
chemotherapy in advanced melanoma. This trial, known as AGENDA, is a randomized,
double-blind, placebo-controlled study in which patients are randomly assigned
to receive Genasense® plus
dacarbazine or dacarbazine alone. The study uses LDH, a blood enzyme associated
with progressive melanoma, as a biomarker to identify patients who are most
likely to respond to Genasense®, based
on data obtained from our preceding trial in melanoma.
The
design of AGENDA was based on data obtained from a similarly designed Phase 3
trial that was published in 2006. Results from this antecedent study showed that
treatment with Genasense® plus
dacarbazine compared with dacarbazine alone was associated with a statistically
significant increase in overall response, complete response, durable response,
and progression-free survival (PFS). However, the primary endpoint of overall
survival approached but did not quite reach statistical significance (P=0.077)
in the entire “intent-to-treat” population. Our analysis showed a significant
treatment interaction effect related to LDH. This benefit was
particularly noteworthy for patients whose baseline LDH did not exceed 80% of
the upper limit of normal for this lab value.
In March
2009, we completed accrual of 314 patients into AGENDA. In October 2009, we
announced that AGENDA did not show a statistically significant benefit for its
co-primary endpoint of progression-free survival. Secondary endpoints
of overall response rate and disease control rate (which includes complete and
partial responses, plus stable disease greater than 3 months duration) also did
not show a statistically significant benefit. According to the pre-specified
analysis plan, the statistical significance of durable response (a secondary
endpoint that measures the proportion of patients who achieved a complete or
partial response that lasts greater than 6 months) was too early to evaluate.
However, the observed differences in progression-free survival, overall
response, disease control and durable response all numerically favored the group
that received Genasense®.
Overall
survival, the other co-primary endpoint in AGENDA, was also too early to
evaluate, as prospectively specified. An analysis for futility, which
was defined as greater than 50% conditional power to observe a statistically
significant benefit of Genasense®
(P<0.05) under the prospectively specified hazard ratio of
0.69, was conducted for the co-primary endpoint of overall
survival. AGENDA passed this futility analysis, and an Independent
Data Monitoring Committee recommended that the trial continue to completion for
the determination of the overall survival endpoint. The safety profile of
Genasense® in
AGENDA was consistent with prior studies. Pending adequacy of financial
resources and other contingencies noted herein, Genta currently intends to
continue the AGENDA trial in order to determine whether the addition of
Genasense® to dacarbazine is associated with a statistically significant
increase in overall survival. If that association is demonstrated, we
currently expect that Genta would submit regulatory applications for the
marketing approval of Genasense® on a worldwide basis.
We have
been conducting other trials of Genasense® in
melanoma including a Phase 2 trial of Genasense® plus
chemotherapy consisting of Abraxane®
(paclitaxel protein-bound particles for injectable suspension) (albumin bound)
plus temozolomide (Temodar®). We
have expected to examine whether different dosing regimens would improve the
dosing convenience. We are currently assessing whether to continue such
trials.
CLL
As noted
above, our NDA for the use of Genasense® plus
chemotherapy in patients with relapsed or refractory CLL was not approved. We
conducted a randomized Phase 3 trial in 241 patients with relapsed or refractory
CLL who were treated with fludarabine and cyclophosphamide (Flu/Cy) with or
without Genasense®. The
trial achieved its primary endpoint: a statistically significant increase (17%
vs. 7%; P=0.025) in the proportion of patients who achieved a complete response
(CR), defined as a complete or nodular partial response. Patients who achieved
this level of response also experienced disappearance of predefined disease
symptoms. A key secondary endpoint, duration of CR, was also significantly
longer for patients treated with Genasense® (median
exceeding 36+ months in the Genasense® group,
versus 22 months in the chemotherapy-only group).
Several
secondary endpoints were not improved by the addition of Genasense®. The
percentage of patients who experienced serious adverse events was increased in
the Genasense® arm;
however, the percentages of patients who discontinued treatment due to adverse
events were equal in the treatment arms. The incidence of certain serious
adverse reactions, including but not limited to nausea, fever and
catheter-related complications, was increased in patients treated with
Genasense®.
We
received a “non-approvable” notice from the FDA in December 2006 for our NDA
that proposed the use of Genasense® in
combination with Flu/Cy for the treatment of patients with relapsed or
refractory CLL who had previously received fludarabine. In June 2008, we
announced results from 5 years of follow-up on patients who had been accrued to
our completed Phase 3 trial. These data showed that patients treated with
Genasense® plus
chemotherapy who achieved either a complete response (CR) or a partial response
(PR) also achieved a statistically significant increase in survival with
chemotherapy alone (median = 56 months vs. 38 months, respectively). After 5
years of follow-up, 22 of 49 (45%) responders in the Genasense® group
were alive compared with 13 of 54 (24%) responders in the chemotherapy-only
group (hazard ratio = 0.6; P = 0.038). Moreover, with 5 years of follow-up, 12
of 20 patients (60%) in the Genasense® group
who achieved CR were alive, 5 of these patients remained in continuous CR
without relapse, and 2 additional patients had relapsed but had not required
additional therapy. By contrast, only 3 of 8 CR patients in the
chemotherapy-only group were alive, all 3 had relapsed, and all 3 had required
additional anti-leukemic treatment.
In March
2009, the FDA’s Center for Drug Evaluation and Research (CDER) decided that
available data were still insufficient to support approval of Genasense® in CLL,
and the Agency recommended conducting another clinical trial. We have made no
decision whether to conduct this study or whether to pursue this application
without further study for regulatory approval in other territories.
As with
melanoma, we believe the clinical activity in CLL, as well as in non-Hodgkin’s
lymphoma and other types of cancer, should be explored with additional clinical
research. We are currently reassessing whether to proceed with such
studies.
NHL
Several
trials have shown clinical activity of Genasense® in
patients with non-Hodgkin’s lymphoma (NHL). We would like to conduct additional
clinical studies in patients with NHL to test whether Genasense® can be
approved in this indication.
Tesetaxel
In March
2008, we obtained an exclusive worldwide license for tesetaxel, a novel taxane
compound that is taken by mouth. Tesetaxel has completed Phase 2 trials in a
number of cancer types, and the drug has shown definite evidence of antitumor
activity in gastric cancer and breast cancer. Tesetaxel also appears to be
associated with a lower incidence of peripheral nerve damage, a common side
effect of taxanes that limits the maximum amount of these drugs that can be
given to patients. In January 2009, we announced initiation of a new clinical
trial with tesetaxel to examine the clinical pharmacology of the drug over a
narrow dosing range around the established Phase 2 dose. We expect accrual to
the initial phase of this study to be complete in December 2009.
We have
received approval by FDA for designation of tesetaxel as an Orphan Drug for
treatment of patients with advanced melanoma. Our current
priorities for clinical testing of tesetaxel includes the evaluation of safety
and efficacy in patients with advanced gastric cancer, advanced melanoma, and
prostate cancer. Other disease priorities for clinical research include cancers
of the bladder and breast, among other disorders. Maintenance of the license
from Daiichi Sankyo requires certain milestone payments. If such payments are
not made, Daiichi Sankyo may elect to terminate the license.
Oral
Gallium-Containing Compounds
Our other
pipeline products include novel oral formulations of gallium-containing
compounds. We completed a single-dose Phase 1 study of an initial formulation of
a new drug known as “G4544(a)”. We have formulated a modified version of this
compound, known as “G4544(b)”, in order to test whether this compound will
improve certain pharmaceutical characteristics.
If we are
able to identify a clinically and commercially acceptable formulation of an oral
gallium-containing compound, we may pursue a 505(b)(2) strategy to establish
bioequivalence to our marketed product, Ganite®, for its
initial regulatory approval. We believe a drug of this type may also be broadly
useful for treatment of other diseases associated with accelerated bone loss,
such as bone metastases, Paget’s disease and osteoporosis. In addition, new uses
of gallium-containing compounds have been identified for treatment of certain
infectious diseases.
Ganite®
We are
currently marketing Ganite® in the
U.S., which is an intravenous formulation of gallium, for treatment of
cancer-related hypercalcemia that is resistant to hydration.
Summary
of Business and Research and Development Programs
Our goal
is to establish Genta as a biopharmaceutical leader and preferred partner in the
oncology market and eventually, as direct marketers of our products in the
United States. Our key strategies in this regard are:
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Build on our core competitive
strength of oncology development expertise to establish a leadership
position in providing biopharmaceutical products for the treatment of
cancer.
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Expand our pipeline of products
in two therapeutic categories, DNA/RNA Medicines and Small Molecules,
through internal development, licensing and
acquisitions.
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Accelerate
development of our pipeline product therapeutic candidates, including
tesetaxel and oral gallium-containing compounds, into later stages of
clinical development.
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Establish our lead antisense
compound, Genasense®, as the preferred
chemosensitizing drug for use in combination with melanoma and other
cancers; and
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Establish a sales and marketing
presence in the U.S. oncology
market.
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Research
and Development Programs
DNA/RNA
Medicines
A number
of technologies have been developed using modifications of DNA or RNA. These
agents have been used as scientific tools for laboratory use to identify gene
function, as diagnostic probes to evaluate diseases, and — more recently — as
potential drugs to treat human diseases. Collectively, these technologies
include methods known as antisense, RNA interference, micro-RNA, decoys and gene
therapy. Founded in 1988, Genta was one of the first companies established to
exploit these new technologies for use as potential drugs and we remain broadly
committed to research and development of these compounds with a specific focus
on cancer medicine, commonly known as oncology. Our most advanced drugs in our
DNA/RNA Medicines program involve the use of antisense technology.
Antisense
Technology
Most
cellular functions, including whether cells live or die, are carried out by
proteins. The genetic code for a protein is contained in DNA, which is made up
of bases known as nucleotides that are arranged in a specific sequence. The
specificity of the sequence accounts for the production of a specific protein.
In order for DNA to produce a protein, an intermediate step is required. In this
step, DNA is transcribed into messenger RNA, or mRNA. The sequence of mRNA that
encodes a protein is oriented in only one direction, which is known as the
“sense” orientation.
Antisense
drugs are short sequences of chemically modified DNA bases that are called
oligonucleotides, or oligos. The oligos are engineered in a sequence that is
exactly opposite (hence “anti”) to the “sense” coding orientation of mRNA.
Because antisense drugs bind only short regions of the mRNA (rather than the
whole message itself), they contain far fewer nucleotides than the whole gene.
Moreover, since they are engineered to bind only to the matching sequence on a
specific mRNA, antisense drugs have both high selectivity and specificity, which
can be used to attack production of a single, disease-causing protein.
Genasense® is an
antisense oligo that is designed to block the production of Bcl-2.
We have
devoted significant resources towards the development of antisense oligos that
contain a phosphorothioate backbone, which is the nucleotide chain comprised of
ribose and phosphate groups. However, we also have patents and technologies
covering later generation technologies that involve mixed backbone structures,
as well as sterically fixed chemical bonds, that may further enhance the
molecule’s ability to bind to the intended target. Moreover, we have developed
certain formulations that can be used to more efficiently increase the uptake of
oligos into cells. Some of these advanced technologies may be incorporated into
future products from our DNA/RNA Medicines program.
Genasense® as a Regulator
of Apoptosis (“Programmed Cell Death”)
The
programmed death of cells, also known as apoptosis, is necessary to accommodate
the billions of new cells that are produced daily and also to eliminate aged or
damaged cells. However, abnormal regulation of the apoptotic process can result
in disease.
Cancer is
commonly associated with the over- or under-production of many types of
proteins. These proteins may be directly cancer-causing (i.e., “oncogenic”) or
they may contribute to the malignant nature of cancer (for instance, by
increasing the longevity of cancer cells or making them more likely to spread
throughout the body). The ability to selectively halt the production of certain
proteins may make the treatment of certain diseases more effective. Apoptosis is
regulated by a large number of proteins, particularly members of the Bcl-2
protein family. In an effort to make existing cancer therapy more effective, we
are developing Genasense® to
target and block the production of Bcl-2, a protein that is central to the
process of apoptosis.
Bcl-2
as an Inhibitor of Programmed Cell Death
Normally,
when a cancer cell is exposed to treatment, such as with chemotherapy, radiation
or immunotherapy, a “death signal” is sent to an organelle within the cell
called the mitochondrion. The mitochondrion then releases a factor known as
cytochrome C that activates a series of enzymes called caspases. These enzymes
cause widespread fragmentation of cellular proteins and DNA, which ultimately
causes cell death.
Bcl-2 is
normally found in the mitochondrial membrane where it regulates the release of
cytochrome C. High levels of Bcl-2 are associated with most types of human
cancer, including major hematologic cancers such as lymphomas, myeloma, and
leukemia, and solid tumors such as melanoma and cancers of the lung, colon,
breast and prostate. In these diseases, Bcl-2 inhibits the release of cytochrome
C that would ordinarily be triggered by cancer therapy. Thus, Bcl-2 appears to
be a major contributor to both inherent and acquired resistance to cancer
treatments. Overcoming resistance to chemotherapy poses a major challenge for
cancer treatment.
In cancer
cells, Bcl-2 inhibits the process of programmed cell death, thereby allowing
cells to survive for much longer than normal cells. Genasense® has been
developed as a chemosensitizing drug to block production of Bcl-2, thereby
dramatically increasing the sensitivity of cancer cells to standard cancer
treatment.
Genasense®
Genasense® has been
designed to block the production of Bcl-2. Current science suggests that Bcl-2
is a fundamental — although not sole — cause of the inherent resistance of
cancer cells to most types of existing anticancer treatments, such as
chemotherapy, radiation or monoclonal antibodies. Blocking Bcl-2, therefore, may
enable cancer treatments to be more effective. While Genasense® has
displayed some anticancer activity when used by itself, we believe the drug can
be optimally used as a means of amplifying the effectiveness of other cancer
therapies, most of which function by triggering apoptosis, which, as noted, is
relatively blocked in cancer cells due to over-production of Bcl-2.
Overview of Preclinical and Clinical
studies of Genasense®
Preclinical
Studies
A number
of preclinical studies in cell lines and in animals have shown enhancement of
tumor cell killing when Bcl-2 antisense was used in combination with standard
cancer therapies, including anti-metabolites, alkylating agents,
corticosteroids, other cytotoxic chemotherapy, radiation and monoclonal
antibodies. Several studies have demonstrated enhanced antitumor activity and
durable tumor regression in animals engrafted with human cancers that were
treated with Bcl-2 antisense followed by antitumor agents that induce programmed
cell death. These studies include human lymphoma, melanoma, breast cancer and
prostate cancers, which were treated with Genasense® in
combination with cyclophosphamide, dacarbazine, docetaxel and paclitaxel,
respectively.
Clinical
Studies
Genasense® has been
in clinical trials since 1995. We currently have efficacy and safety data on
over 2,500 patients in Phase 1, Phase 2 and Phase 3 clinical trials that have
been conducted in the U.S., Europe, South America and Australia. These studies
have included patients with a wide variety of tumor types, including advanced
melanoma, several types of acute and chronic leukemia, NHL, multiple myeloma and
cancers of the prostate, colon, lung, breast and other tumor types. Results of
these clinical trials suggest that Genasense® can be
administered to cancer patients with acceptable side-effects and that such
treatment may reduce the level of Bcl-2 protein in cancer cells.
Based on
work accomplished to date, we have focused on three indications for
Genasense®:
melanoma; CLL; and non-Hodgkin’s lymphoma. In addition, we have sought to
develop treatment methods for Genasense® that do
not involve the use of continuous IV infusions.
In 2007,
we began a new Phase 1 trial of Genasense®
administered as an IV infusion over 2 hours. This trial showed that the
maximally tolerable dose was 900 mg, and we have now advanced that study into a
trial at that dose administered twice per week. We have also continued to
escalate the single dose of Genasense® up to a
total of 1200 mg over 2 hours. The pharmacokinetic and pharmacodynamic data from
these trials may be useful for determining whether the prior requirement for
treatment by continuous IV infusion can ultimately be eliminated by these more
convenient dosing regimens.
For
additional background information on the drug application process and clinical
trials, see “Government Regulation.”
Ganite®
Ganite® as a Treatment
for Cancer-Related Hypercalcemia
In
October 2003, we began marketing Ganite® for the
treatment of cancer-related hypercalcemia. Ganite® is our
first drug to receive marketing approval. The principal patent covering the use
of Ganite® for its
approved indication, including potential extensions under Hatch-Waxman
provisions in the U.S., expired in April 2005.
Hypercalcemia
is a life-threatening condition caused by excessive buildup of calcium in the
bloodstream, which may occur in up to 20% of cancer patients. Gallium nitrate
was originally studied by the NCI as a new type of cancer chemotherapy. More
than 1,000 patients were treated in Phase 1 and Phase 2 trials, and the drug
showed promising antitumor activity against NHL, bladder cancer and other
diseases. In the course of these studies, gallium nitrate was also shown to
strongly inhibit bone resorption. Gallium nitrate underwent additional clinical
testing and was approved by the FDA in 1991 as a treatment for cancer-related
hypercalcemia. Lower doses of Ganite® were
also tested in patients with less severe bone loss, including bone metastases, a
cancer that has spread to bone, Paget’s disease, an affliction of older patients
that causes pain and disability, and osteoporosis.
Side
effects of Ganite® include
nausea, diarrhea and kidney damage. (A complete listing of Ganite®’s side
effects is contained in the product’s Package Insert that has been reviewed and
approved by the FDA.)
Other
Pipeline Products and Technology Platforms
Oral
Gallium-Containing Compounds
We have
sought to develop novel formulations of gallium-containing compounds that can be
taken orally and that will have extended patent protection. Such formulations
might be useful for diseases in which long-term low-dose therapy is deemed
desirable, such as bone metastases, Paget’s disease and osteoporosis. In March
2006, Genta and Emisphere Technologies, Inc. announced that the two companies
had entered into an exclusive worldwide licensing agreement to develop an oral
formulation of a gallium-containing compound. A number of candidate formulations
have been developed in this collaboration. In August 2007, we announced
submission of an Investigational New Drug Application, or IND, to the
Endocrinologic and Metabolic Drugs Division of the FDA for a new drug known as
G4544. G4544 is a new tablet formulation that enables oral absorption of the
active ingredient contained in Ganite®. Results
of the initial clinical trial were presented at a scientific meeting in the
second quarter of 2008. In January 2009, we announced that two new patents
related to our franchise in gallium-containing products have issued in the
United States. Applications similar to these patents are pending worldwide, and
several additional applications that address other compositions and uses have
been filed in the U.S. and other territories. These patents and filings provide
for claims of compositions and uses of gallium compounds that can be taken by
mouth over extended periods for treatment of skeletal diseases as well as other
indications.
Patents
and Proprietary Technology
It is our
policy to protect our technology by filing patent applications with respect to
technologies important to our business development. To maintain our competitive
position, we also rely upon trade secrets, unpatented know-how, continuing
technological innovation, licensing opportunities and certain regulatory
approvals (such as orphan drug designations).
We own or
have licensed several patents and applications to numerous aspects of
oligonucleotide technology, including novel compositions of matter, methods of
large-scale synthesis, methods of controlling gene expression and methods of
treating disease. Our patent portfolio includes approximately 65 granted patents
and 66 pending applications in the U.S. and foreign countries. We endeavor to
seek appropriate U.S. and foreign patent protection on our oligonucleotide
technology.
We have
licensed ten U.S. patents relating to the composition of Genasense® and its
backbone chemistry that expire between 2008 and 2015. The U.S. composition
patents for Genasense® may be
eligible for extension under Waxman-Hatch provisions. Corresponding patent
applications have been filed in three foreign countries. We also own five U.S.
patent applications relating to methods of using Genasense® expected
to expire in 2020 and 2026, with approximately 50 corresponding foreign patent
applications and granted patents.
Included
among our intellectual property rights are certain rights licensed from the NIH
covering phosphorothioate oligonucleotides. We also acquired from the University
of Pennsylvania exclusive rights to antisense oligonucleotides directed against
the Bcl-2 mRNA, as well as methods of their use for the treatment of cancer. The
claims of the University of Pennsylvania patents cover our proprietary antisense
oligonucleotide molecules, which target the Bcl-2 mRNA, including Genasense® and
methods employing them. Other related U.S. and corresponding foreign patent
applications are still pending.
Tesetaxel,
its potential uses, composition, and methods of manufacturing are covered under
a variety of patents licensed exclusively from Daiichi Sankyo, Inc. We believe
that composition-of-matter claims on tesetaxel extend to at least 2020 in the
U.S. and Europe and to 2022 in Japan. A number of other patents have been filed
worldwide for this compound.
The
principal patent covering the use of Ganite® for its
approved indication, including extensions expired in April 2005.
The
patent positions of biopharmaceutical and biotechnology firms, including Genta,
can be uncertain and can involve complex legal and factual questions.
Consequently, even though we are currently pursuing our patent applications with
the United States and foreign patent offices, we do not know whether any of our
applications will result in the issuance of any patents, or if any issued
patents will provide significant proprietary protection, or even if successful
that these patents will not be circumvented or invalidated. Even if issued,
patents may be circumvented or challenged and invalidated in the courts. Because
some applications in the United States are kept in secrecy until an actual
patent is issued, we cannot be certain that others have not filed patent
applications directed at inventions covered by our pending patent applications,
or that we were the first to file patent applications for such inventions. Thus,
we may become involved in interference proceedings declared by the U.S. Patent
and Trademark Office (or comparable foreign office or process) in connection
with one or more of our patents or patent applications to determine priority of
invention, which could result in substantial costs to us, as well as an adverse
decision as to priority of invention of the patent or patent application
involved.
Competitors
or potential competitors may have filed applications for, or have received
patents and may obtain additional patents and proprietary rights relating to,
compounds or processes competitive with those of ours. Accordingly, there can be
no assurances that our patent applications will result in issued patents or
that, if issued, the patents will afford protection against competitors with
similar technology. We cannot provide assurance that any patents issued to us
will not be infringed or circumvented by others, nor can there be any assurance
that we will obtain necessary patents or technologies or the rights to use such
technologies.
In
addition, there may be patents which are unknown to us and which may block our
ability to make, use or sell our product. We may be forced to defend ourselves
against charges of infringement or we may need to obtain expensive licenses to
continue our business. See the above Risk Factor entitled “We may be unable to
obtain or enforce patents, other proprietary rights and licenses to protect our
business; we could become involved in litigation relating to our patents or
licenses that could cause us to incur additional costs and delay or prevent our
introduction of new drugs to market”.
We also
rely upon unpatented trade secrets. No assurances can be given as to whether
third parties will independently develop substantially equivalent proprietary
information and techniques, or gain access to our trade secrets, or disclose
such technologies to the public, or that we can meaningfully maintain and
protect unpatented trade secrets.
We
require our employees, consultants, outside scientific collaborators, sponsored
researchers and other advisors to execute confidentiality agreements with us.
These agreements generally provide that all confidential information developed
or made known to an individual during the course of the individual’s
relationship with us shall be kept confidential and shall not be disclosed to
third parties except in specific circumstances. In the case of employees, the
agreement generally provides that all inventions conceived by the individual
shall be assigned to us, and made our exclusive property. There can be no
assurance, however, that these agreements will provide meaningful protection to
our trade secrets, or guarantee adequate remedies in the event of unauthorized
use or disclosure of confidential proprietary information or in the event of an
employee’s refusal to assign any patents to us in spite of his/her contractual
obligation.
Research
and Development
In
addition to our current focus in the areas described above, we continually
evaluate our programs in light of the latest market information and conditions,
the availability of third party funding, technological advances, financial
liquidity and other factors. As a result of such evaluations, we change our
product development plans from time to time and anticipate that we will continue
to do so. We recorded research and development expenses of $20.0 million, $13.5
million and $28.1 million during the years ended December 31, 2008, 2007 and
2006, respectively.
Sales
and Marketing
Currently
we do not have a sales force. At the present time, we do not
contemplate building a sales and marketing infrastructure in the United States
absent favorable regulatory actions on Genasense®. For
international product sales, we may distribute our products through
collaborations with third parties.
Manufacturing
and Raw Materials
Our
ability to conduct clinical trials on a timely basis, to obtain regulatory
approvals and to commercialize our products will depend in part upon our ability
to manufacture our products, either directly or through third parties, at a
competitive cost and in accordance with applicable FDA and other regulatory
requirements, including current Good Manufacturing Practice
regulations.
We
currently rely on third parties to manufacture our products. We have a
manufacturing and supply agreement with Avecia Biotechnology, Inc., or Avecia, a
leading multinational manufacturer of pharmaceutical products, to supply
quantities of Genasense®. This
agreement renews automatically at the end of each year, unless either party
gives one-year notice. We are not obligated to purchase further drug substance
from Avecia prior to approval of Genasense®. We
believe this agreement is sufficient for our production needs with respect to
Genasense®.
For
Ganite® we have
a manufacturing and supply agreement with Johnson Matthey Inc. that renews
automatically at the end of each year, unless either party gives one-year
notice. Under the agreement, we will purchase a minimum of 80% of our
requirements for quantities of Ganite®;
however, there are no minimum purchase requirements.
For
tesetaxel, we are currently evaluating new suppliers of both bulk drug substance
and finished goods with the intent of completely replacing the supply chain that
was previously used to manufacture this compound. Until the new supply chain is
established, we will continue to use investigational supplies of the compound
that was manufactured and is currently in inventory at Daiichi Sankyo Company,
Ltd.
The raw
materials that we require to manufacture our drugs are available only from a few
suppliers. Under the terms of our manufacturing and supply agreement, Avecia is
responsible for procuring the raw materials needed to manufacture Genasense®. We
believe that we have adequately addressed our needs for suppliers of raw
materials to manufacture Genasense® and
Ganite® and to
meet future customer demand.
Human
Resources
As of
December 16, 2009, we had 16 employees, 6 of whom hold doctoral degrees. As of
that date, there were 10 employees engaged in research, development and other
technical activities and 6 in administration. None of our employees are
represented by a union. Most of our management and professional employees have
had prior experience and positions with pharmaceutical and biotechnology
companies. We believe we maintain satisfactory relations with our employees and
have not experienced interruptions of operations due to employee relations
issues.
Government
Regulation
Regulation
by governmental authorities in the United States and foreign countries is a
significant factor in our ongoing research and product development activities
and in the manufacture and marketing of our proposed products. All of our
therapeutic products will require regulatory approval by governmental agencies
prior to commercialization. In particular, human therapeutic products are
subject to rigorous preclinical and clinical testing and pre-market approval
procedures by the FDA and similar authorities in foreign countries. Various
federal, and in some cases, state statutes and regulations, also govern or
affect the development, testing, manufacturing, safety, labeling, storage,
recordkeeping and marketing of such products. The lengthy process of seeking
these approvals, and the subsequent compliance with applicable federal and, in
some cases, state statutes and regulations, require substantial expenditures.
Any failure by us, our collaborators or our licensees to obtain, or any delay in
obtaining, regulatory approvals could adversely affect the marketing of our
products and our ability to receive products or royalty
revenue.
The
activities required before a new pharmaceutical agent may be marketed in the
United States begin with preclinical testing. Preclinical tests include
laboratory evaluation of product chemistry and animal studies to assess the
potential safety and efficacy of the product and its formulations. The results
of these studies must be submitted to the FDA as part of an IND. An IND becomes
effective within 30 days of filing with the FDA unless the FDA imposes a
clinical hold on the IND. In addition, the FDA may, at any time, impose a
clinical hold on ongoing clinical trials. If the FDA imposes a clinical hold,
clinical trials cannot commence or recommence, as the case may be, without prior
FDA authorization, and then only under terms authorized by the FDA.
Clinical
trials are generally categorized into four phases.
Phase 1
trials are initial safety trials on a new medicine in which investigators
attempt to establish the dose range tolerated by a small group of patients using
single or multiple doses, and to determine the pattern of drug distribution and
metabolism.
Phase 2
trials are clinical trials to evaluate efficacy and safety in patients afflicted
with a specific disease. Typically, Phase 2 trials in oncology comprise 14 to 50
patients. Objectives may focus on dose-response, type of patient, frequency of
dosing or any of a number of other issues involved in safety and
efficacy.
In the
case of products for life-threatening diseases, the initial human testing is
generally done in patients rather than in healthy volunteers. Since these
patients are already afflicted with the target disease, it is possible that such
studies may provide results traditionally obtained in Phase 2
trials.
Phase 3
trials are usually multi-center, comparative studies that involve larger
populations. These trials are generally intended to be pivotal in importance for
the approval of a new drug. In oncology, Phase 3 trials typically involve 100 to
1,000 patients for whom the medicine is eventually intended. Trials are also
conducted in special groups of patients or under special conditions dictated by
the nature of the particular medicine and/or disease. Phase 3 trials often
provide much of the information needed for the package insert and labeling of
the medicine. A trial is fully enrolled when it has a sufficient number of
patients to provide enough data for the statistical proof of efficacy and safety
required by the FDA and others. After a sufficient period of follow-up has
elapsed to satisfactorily evaluate safety and efficacy, the trials’ results can
then be analyzed. Those results are then commonly reported at a scientific
meeting, in a medical journal and to the public.
Depending
upon the nature of the trial results, a company may then elect to discuss the
results with regulatory authorities such as the FDA. If we believe the data may
warrant consideration for marketing approval of the drug, the results of the
preclinical and clinical testing, together with chemistry, manufacturing and
control information, are then submitted to the FDA for a pharmaceutical product
in the form of an NDA. In responding to an NDA, biologics license application or
premarket approval application, the FDA may grant marketing approval, request
additional information or deny the application if it determines that the
application does not satisfy its regulatory approval criteria. There can be no
assurance that the approvals that are being sought or may be sought by us in the
future will be granted on a timely basis, if at all, or, if granted, will cover
all the clinical indications for which we are seeking approval or will not
contain significant limitations in the form of warnings, precautions or
contraindications with respect to conditions of use. Phase 3b trials are
conducted after submission of a NDA, but before the product’s approval for
market launch. Phase 3b trials may supplement or complete earlier trials, or
they may seek different kinds of information, such as quality of life or
marketing. Phase 3b is the period between submission for approval and receipt of
marketing authorization.
After a
medicine is marketed, Phase 4 trials provide additional details about the
product’s safety and efficacy.
In
circumstances where a company intends to develop and introduce a novel
formulation of an active drug ingredient already approved by the FDA, clinical
and preclinical testing requirements may not be as extensive. Limited additional
data about the safety and/or effectiveness of the proposed new drug formulation,
along with chemistry and manufacturing information and public information about
the active ingredient, may be satisfactory for product approval. Consequently,
the new product formulation may receive marketing approval more rapidly than a
traditional full new drug application; although no assurance can be given that a
product will be granted such treatment by the FDA.
Under
European Union regulatory systems, we may submit requests for marketing
authorizations either under a centralized or decentralized procedure. The
centralized procedure provides for the grant of a single marketing authorization
that is valid for all European Union member states. The decentralized procedure
provides for mutual recognition of national approval decisions. Under this
procedure, the holder of a national marketing authorization from a European
state may submit an application to the remaining member states. Within 90 days
of receiving the applications and assessment report, each member state must
decide whether to recognize approval.
We and
our third-party manufacturers are also subject to various foreign, federal,
state and local laws and regulations relating to health and safety, laboratory
and manufacturing practices, the experimental use of animals and the use,
manufacture, storage, handling and disposal of hazardous or potentially
hazardous substances, including radioactive compounds and infectious disease
agents, used in connection with our research and development work and
manufacturing processes. We currently incur costs to comply with laws and
regulations and these costs may become more significant.
Competition
In many
cases, our products under development will be competing with existing therapies
for market share. In addition, a number of companies are pursuing the
development of antisense technology and controlled-release formulation
technology and the development of pharmaceuticals utilizing such technologies.
We compete with fully integrated pharmaceutical companies that have
substantially more experience, financial and other resources and superior
expertise in research and development, manufacturing, testing, obtaining
regulatory approvals, marketing and distribution. Smaller companies may also
prove to be significant competitors, particularly through their collaborative
arrangements with large pharmaceutical companies or academic institutions.
Furthermore, academic institutions, governmental agencies and other public and
private research organizations have conducted and will continue to conduct
research, seek patent protection and establish arrangements for commercializing
products. Such products may compete directly with any products that may be
offered by us.
Our
competition will be determined in part by the potential indications for which
our products are developed and ultimately approved by regulatory authorities.
For certain of our potential products, an important factor in competition may be
the timing of market introduction of our or our competitors’ products.
Accordingly, the relative speed with which we can develop products, complete the
clinical trials and approval processes and supply commercial quantities of the
products to the market are expected to be important competitive factors. We
expect that competition among products approved for sale will be based, among
other things, on product efficacy, safety, reliability, availability, price,
patent position and sales, marketing and distribution capabilities. The
development by others of new treatment methods could render our products under
development non-competitive or obsolete.
Our
competitive position also depends upon our ability to attract and retain
qualified personnel, obtain patent protection, or otherwise develop proprietary
products or processes and secure sufficient capital resources for the
often-substantial period between technological conception and commercial
sales.
Liquidity
and Capital Resources
At
September 30, 2009, we had cash and cash equivalents totaling $7.4 million,
compared with $4.9 million at December 31, 2008, reflecting our April 2009
financing, July 2009 financing and September 2009 financing offset by funds used
in operating our company.
During
the first nine months of 2009, cash used in operating activities was $15.1
million compared with $22.0 million for the same period in 2008, reflecting the
reduced size of our company and our cost-control efforts.
Presently,
with no further financing, we project that we will run out of funds in the
second quarter of 2010. The terms of the April 2009 Notes enable those
noteholders, at their option, to purchase additional notes with similar terms.
We currently do not have any additional financing in place. If we are unable to
raise additional funds, we could be required to reduce our spending plans,
reduce our workforce, license one or more of our products or technologies that
we would otherwise seek to commercialize ourselves, or sell certain assets.
There can be no assurance that we can obtain financing, if at all, on terms
acceptable to us.
We will
require additional cash in order to maximize the commercial opportunity and
continue clinical development of our product candidates. Alternatives available
to us to sustain our operations include collaborative agreements, equity
financing, debt and other financing arrangements with potential corporate
partners and other sources. However, there can be no assurance that any such
collaborative agreements or other sources of funding will be available to us on
favorable terms, if at all.
We
anticipate seeking additional product development opportunities through
potential acquisitions or investments. Such acquisitions or investments may
consume cash reserves or require additional cash or equity. Our working capital
and additional funding requirements will depend upon numerous factors,
including: (i) the progress of our research and development programs; (ii) the
timing and results of pre-clinical testing and clinical trials; (iii) the level
of resources that we devote to sales and marketing capabilities; (iv)
technological advances; (v) the activities of competitors; and (vi) our ability
to establish and maintain collaborative arrangements with others to fund certain
research and development efforts, to conduct clinical trials, to obtain
regulatory approvals and, if such approvals are obtained, to manufacture and
market products.
Genta was
incorporated in Delaware on February 4, 1988. Our principal executive offices
are located at 200 Connell Drive, Berkeley Heights, New Jersey 07922. Our
telephone number is (908) 286-9800. The address of our website is
http://www.genta.com. Information on our website is not part of this prospectus.
Our website address is included in this prospectus as an inactive technical
reference only.
Available
Information
Our
reports that have been filed with the Securities and Exchange Commission, or
SEC, are available on our website free of charge, including our annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Forms
3, 4 and 5 filed on behalf of directors and executive officers and any
amendments to such reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, or the Exchange Act. Copies of our
Annual Report on Form 10-K may also be obtained without charge electronically or
by paper by contacting us at (908) 286-9800.
In
addition, we make available on our website (i) the charters for the committees
of the Board of Directors, including the Audit Committee, Compensation Committee
and Nominating and Corporate Governance Committee, (ii) our Code of Business
Conduct (the Code of Conduct) governing its directors, officers. Within the time
period required by the SEC, we will post on our website any modifications to the
Code of Business Conduct and Ethics, as required by the Sarbanes-Oxley Act of
2002.
The
public may also read and copy the materials we file with the SEC at its Public
Reference Room at 100 F Street, N.E., Washington, DC 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC also maintains a web site at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding companies that file electronically with the SEC.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain
statements contained in this prospectus, any prospectus supplement and in the
documents incorporated by reference herein constitute “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact may be deemed
to be forward-looking statements. Forward-looking statements frequently, but not
always, use the words “may”, “intends”, “plans”, “believes”, “anticipates” or
“expects” or similar words and may include statements concerning our strategies,
goals and plans. All forward-looking statements are management’s present
expectations of future events and are subject to a number of risks and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. These risks and uncertainties
include, among other things: (a) our projected sales and profitability, (b) our
growth strategies, (c) anticipated trends in our industry, (d) our ability to
obtain and retain sufficient capital for future operations, (e) our anticipated
needs for working capital and (f) other factors discussed under the caption
“Risk Factors” included in any prospectus supplement and under the caption
“Risks Related to Our Business” in our Annual Report on Form 10-K for the year
ended December 31, 2008, which is incorporated by reference into the
registration statement of which this prospectus forms a part.
The
following documents, among others, describe these assumptions, risks,
uncertainties, and other factors. You should read and interpret any
forward-looking statements together with these documents:
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the
risk factors contained in any prospectus supplement under the caption
“Risk Factors”;
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our
most recent annual report on Form 10-K, including the sections entitled
“Business”, “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of
Operations”;
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our
quarterly reports on Form 10-Q; and
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In light
of these assumptions, risks and uncertainties, the results and events discussed
in the forward-looking statements contained in this prospectus, any prospectus
supplement or in any document incorporated by reference in this prospectus might
not occur. Investors are cautioned not to place undue reliance on the
forward-looking statements, which speak only of the date of this prospectus, the
date of any prospectus supplement or the date of the document incorporated by
reference in this prospectus. We are not under any obligation, and we expressly
disclaim any obligation, to update or alter any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
may be required by applicable law. All subsequent forward-looking statements
attributable to us are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section.
RISK
FACTORS
This
registration statement contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
discussed in this registration statement. Factors that could cause or contribute
to these differences include, but are not limited to, those discussed below,
elsewhere in this registration statement, and in any documents incorporated in
this registration statement by reference.
Risks
Related to Our Business
Our
business will suffer if we fail to obtain timely funding.
Our
operations to date have required significant cash expenditures. Our future
capital requirements will depend on the results of our research and development
activities, preclinical studies and clinical trials, competitive and
technological advances, and regulatory activities of the FDA and other
regulatory authorities. In order to commercialize our products, seek new product
candidates and continue our research and development programs, we will need to
raise additional funds.
On June
9, 2008, we placed $20 million of senior secured convertible notes, or the 2008
Notes, with certain institutional and accredited investors. The 2008 Notes bear
interest at an annual rate of 15% payable at quarterly intervals in other 2008
Notes to the holder, and are presently convertible into shares of Genta common
stock at a conversion rate of 10,000 shares of common stock for every $1,000.00
of principal. Certain members of our senior management participated in this
offering. The 2008 Notes are secured by a first lien on all of our
assets.
On April
2, 2009, we placed approximately $6 million of senior secured convertible notes,
or the April 2009 Notes, and corresponding warrants to purchase common stock.
The April 2009 Notes bear interest at an annual rate of 8% payable semi-annually
in other April 2009 Notes to the holder, and are convertible into shares of our
common stock at a conversion rate of 10,000 shares of common stock for every
$1,000.00 of principal amount outstanding.
On July
7, 2009, we entered into a securities purchase agreement with certain accredited
institutional investors to place up to $10 million in aggregate principal amount
of units consisting of (i) 70% unsecured subordinated convertible notes, or the
July 2009 Notes, and (ii) 30% common stock, or the July 2009
financing. In connection with the sale of the units, we also issued
to the investors two-year warrants to purchase common stock in an amount equal
to 25% of the number of shares of common stock issuable upon conversion of the
July 2009 Notes purchased by each investor, or the July 2009
Warrants. We closed on $3 million of such July 2009 Notes, common
stock and July 2009 Warrants on July 7, 2009.
On August
6, 2009 and August 24, 2009, we entered into amendment agreements whereby, among
other things, certain accredited institutional investors who were parties to the
July 2009 securities purchase agreement agreed to permit us to raise up to $10
million through the sale of additional shares of common stock, July 2009 Notes
and warrants at an additional closing under the July 7, 2009 Securities Purchase
Agreement, increasing the aggregate amount that we may raise to $13 million, and
delaying our obligations to file a registration statement covering the shares of
common stock and shares of common stock underlying the July 2009 Notes and
warrants that were issued on July 7, 2009.
On
September 4, 2009, we entered into a consent and amendment agreement whereby,
among other things, certain accredited institutional investors who were parties
to the July 2009 securities purchase agreement agreed to decrease the amount we
could raise under the July 2009 securities purchase agreement to $10 million in
the aggregate and delay our obligation to file a registration statement covering
the shares of common stock and shares of common stock underlying the July 2009
Notes and July 2009 Warrants. On that same date, we closed on $7
million of additional July 2009 Notes, common stock and July 2009
Warrants.
Also on
September 4, 2009, we entered into a securities purchase agreement with certain
accredited institutional investors, pursuant to which we issued $3 million of
units consisting of (i) 70% September 2009 Notes, and (ii) 30% common stock, or
the September 2009 financing. The September 2009 Notes bear interest
at an annual rate of 8% payable at semi-annual intervals in other September 2009
Notes to the holder, and are convertible into shares of our common stock at a
conversion rate of 10,000 shares of common stock for every $1,000.00 of
principal. In connection with the sale of the units, we also issued to the
investors two- year warrants to purchase common stock in an amount equal to 25%
of the number of shares of common stock issuable upon conversion of the
September 2009 Notes purchased by each investor, or the September 2009
Warrants. Pursuant to the terms of the securities purchase agreement,
the investors had four business days from the date of the agreement to sign the
agreement and provide their respective investment to us. Certain
investors chose not to participate, and therefore, all of the investors who
chose to participate in the September 2009 financing agreed to a revised
allocation of the $3 million investment among the investors.
We will
need to obtain more funding in the future through collaborations or other
arrangements with research institutions and corporate partners or public and
private offerings of our securities, including debt or equity financing. We may
not be able to obtain adequate funds for our operations from these sources when
needed or on acceptable terms. Future collaborations or similar arrangements may
require us to license valuable intellectual property to, or to share substantial
economic benefits with, our collaborators. If we raise additional capital by
issuing additional equity or securities convertible into equity, our
stockholders may experience dilution and our share price may decline. Any debt
financing may result in restrictions on our spending.
If we are
unable to raise additional funds, we will need to do one or more of the
following:
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delay, scale back or eliminate
some or all of our research and product development
programs;
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license third parties to develop
and commercialize products or technologies that we would otherwise seek to
develop and commercialize
ourselves;
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attempt to sell our
company;
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Presently,
with no further financing, management projects that we will run out of funds in
the second quarter of 2010. If we are unable to raise additional
financing, we could be required to reduce our spending plans, reduce our
workforce, license to others products or technologies we would otherwise seek to
commercialize ourselves and sell certain assets. There can be no assurance that
we can obtain financing, if at all, on terms acceptable to us.
We
may be unsuccessful in our efforts to obtain approval from the FDA or EMEA and
commercialize Genasense® or our
other pharmaceutical products.
The
commercialization of our pharmaceutical products involves a number of
significant challenges. In particular, our ability to commercialize products,
such as tesetaxel, an oral gallium compound and Genasense®,
depends, in large part, on the success of our clinical development programs, our
efforts to obtain regulatory approvals and our sales and marketing efforts
directed at physicians, patients and third-party payors. A number of factors
could affect these efforts, including:
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our ability to demonstrate
clinically that our products are useful and safe in particular
indications;
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delays or refusals by regulatory
authorities in granting marketing
approvals;
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our limited financial resources
and sales and marketing experience relative to our
competitors;
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actual and perceived differences
between our products and those of our
competitors;
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the availability and level of
reimbursement for our products by third-party
payors;
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incidents of adverse reactions to
our products;
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side effects or misuse of our
products and the unfavorable publicity that could result;
and
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the occurrence of manufacturing,
supply or distribution
disruptions.
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We cannot
assure you that our product candidates will receive FDA or EMEA approval. For
example, the recent results in the Phase 3 AGENDA trial of Genasense® in
advanced melanoma will not be sufficient to apply for a NDA in the U.S. If
extended followup of the AGENDA trial is possible and shows a statistically
significant benefit for patients, we may be able to submit a NDA after that
result is known. However, our prior regulatory applications for Genasense® in
melanoma were unsuccessful. Our NDA for Genasense® plus
chemotherapy in patients with relapsed or refractory CLL was also
unsuccessful.
Our
financial condition and results of operations have been and will continue to be
significantly affected by FDA and EMEA action with respect to Genasense®. Any
adverse outcomes with respect to FDA and/or EMEA approvals could negatively
impact our ability to obtain additional funding or identify potential
partners.
Ultimately,
our efforts may not prove to be as effective as those of our competitors. In the
U.S. and elsewhere, our products will face significant competition. The
principal conditions on which our product development efforts are focused and
some of the other disorders for which we are conducting additional studies, are
currently treated with several drugs, many of which have been available for a
number of years or are available in inexpensive generic forms. Thus, even if we
obtain regulatory approvals, we will need to demonstrate to physicians, patients
and third-party payors that the cost of our products is reasonable and
appropriate in light of their safety and efficacy, the price of competing
products and the relative health care benefits to the patient. If we are unable
to demonstrate that the costs of our products are reasonable and appropriate in
light of these factors, we will likely be unsuccessful in commercializing our
products.
Recurring
losses and negative cash flows from operations raise substantial doubt about our
ability to continue as a going concern and we may not be able to continue
as a going concern.
Our
recurring losses from operations and negative cash flows from operations raise
substantial doubt about our ability to continue as a going concern and as a
result, our independent registered public accounting firm included an
explanatory paragraph in its report on our consolidated financial statement for
the year ended December 31, 2008 with respect to this uncertainty. Substantial
doubt about our ability to continue as a going concern may create negative
reactions to the price of the common shares of our stock and we may have a more
difficult time obtaining financing.
We have
prepared our financial statements on a going concern basis, which contemplates
the realization of assets and the satisfaction of liabilities and commitments in
the normal course of business. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or amounts of liabilities that might be necessary should we be unable to
continue in existence.
We
will not be able to commercialize our product candidates if our preclinical
studies do not produce successful results or if our clinical trials do not
demonstrate safety and efficacy in humans.
Our
success will depend on the success of our currently ongoing clinical trials and
subsequent clinical trials that have not yet begun. It may take several years to
complete the clinical trials of a product, and a failure of one or more of our
clinical trials can occur at any stage of testing. We believe that the
development of each of our product candidates involves significant risks at each
stage of testing. If clinical trial difficulties and failures arise, our product
candidates may never be approved for sale or become commercially viable. We do
not believe that any of our product candidates have alternative uses if our
current development activities are unsuccessful.
There are
a number of difficulties and risks associated with clinical trials. These
difficulties and risks may result in the failure to receive regulatory approval
to sell our product candidates or the inability to commercialize any of our
product candidates. The possibility exists that:
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we may discover that a product
candidate does not exhibit the expected therapeutic results in humans, may
cause harmful side effects or have other unexpected characteristics that
may delay or preclude regulatory approval or limit commercial use if
approved;
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the results from early clinical
trials may not be statistically significant or predictive of results that
will be obtained from expanded, advanced clinical
trials;
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institutional review boards or
regulators, including the FDA, may hold, suspend or terminate our clinical
research or the clinical trials of our product candidates for various
reasons, including noncompliance with regulatory requirements or if, in
their opinion, the participating subjects are being exposed to
unacceptable health risks;
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subjects may drop out of our
clinical trials;
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our preclinical studies or
clinical trials may produce negative, inconsistent or inconclusive
results, and we may decide, or regulators may require us, to conduct
additional preclinical studies or clinical trials;
and
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the cost of our clinical trials
may be greater than we currently
anticipate.
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In
October 2009, we announced that AGENDA did not show a statistically significant
benefit for its co-primary endpoint of progression-free
survival. Secondary endpoints of overall response rate and disease
control rate (which includes complete and partial responses, plus stable disease
greater than 3 months duration) also did not show a statistically significant
benefit. According to the prespecified analysis plan, the statistical
significance of durable response, (a secondary endpoint that measures the
proportion of patients who achieved a complete or partial response that lasts
greater than 6 months), is too early to evaluate. However, the observed
differences in progression-free survival, overall response, disease control and
durable response all numerically favored the group that received Genasense®.
Overall
survival, the other co-primary endpoint in AGENDA, is too early to evaluate, as
prospectively specified. An analysis for futility, which was defined
as greater than 50% conditional power to observe a statistically significant
benefit of Genasense® (P < 0.05) under the prospectively specified hazard
ratio of 0.69, was conducted for the co-primary endpoint of overall
survival. AGENDA passed this futility analysis, and an Independent
Data Monitoring Committee has recommended that the trial continue to completion
for the determination of the overall survival endpoint. The safety profile of
Genasense® in AGENDA was consistent with prior studies. Pending adequacy of
financial resources and other contingencies noted herein, Genta currently
intends to continue the AGENDA trial in order to determine whether the addition
of Genasense to dacarbazine is associated with a statistically significant
increase in overall survival. If that association is demonstrated, we
currently expect that Genta would submit regulatory applications for the
marketing approval of Genasense® on a worldwide basis.
We cannot
assure you that our ongoing preclinical studies and clinical trials will produce
successful results in order to support regulatory approval of Genasense® in any
territory or for any indication. Failure to obtain approval, or a substantial
delay in approval of Genasense® for
these or any other indications would have a material adverse effect on our
results of operations and financial condition.
We
have a significant amount of debt. Our substantial indebtedness could adversely
affect our business, financial condition and results of operations and our
ability to meet our payment obligations under the notes and our other
debt.
We have a
significant amount of debt. As of September 30, 2009, we had a face
amount of debt outstanding of $15.3 million, consisting of the face value of
2008 Notes of $2.2 million, the face value of April 2009 Notes of $5.4 million,
the face value of July 2009 Notes of $0.7 million and the face value of
September 2009 Notes of $7.0 million.
Our
aggregate level of debt could have significant consequences on our future
operations, including:
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making it more difficult for us
to meet our payment and other obligations under our outstanding
debt;
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resulting in an event of default
if we fail to comply with the restrictive covenants contained in our debt
agreements, which could result in all of our debt becoming due and payable
and, in the case of an event of default under our secured debt, could
permit the lenders to foreclose on our assets securing such
debt;
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limiting our flexibility in
planning for, or reacting to, and increasing our vulnerability to, changes
in our business, the industry in which we operate and the general economy;
and
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placing us at a competitive
disadvantage compared to our competitors that have less debt or are less
leveraged.
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Any of
the above-listed factors could have an adverse effect on our business, financial
condition and results of operations and our ability to meet our payment
obligations under the notes and our other debt.
Our
substantial amount of secured debt may prevent us from obtaining additional
financing in the future or make the terms of securing such additional financing
more onerous to us.
The 2008
Notes and April 2009 Notes are secured by a first priority lien on our assets
and the July 2009 Notes and September 2009 Notes are unsecured. While the terms
or availability of additional capital is always uncertain, should we need to
obtain additional financing in the future, because of the existing liens on our
assets, it may be even more difficult for us to do so. Potential future lenders
may be unwilling to provide financing on an unsecured basis and may not agree to
share the collateral with our existing secured debt. Alternatively, if we are
able to raise additional financing in the future, the terms of any such
financing may be onerous to us. This potential inability to obtain borrowings or
our obtaining borrowings on unfavorable terms could negatively impact our
operations and impair our ability to maintain sufficient working
capital.
We
may not have the ability to repay the principal on our convertible notes when
due.
Our
convertible notes mature on various dates in 2010 through 2012, and bear
interest payable quarterly or semi-annually at rates of 8.00% or 15.00% per
annum. Absent additional financing, we will likely not have sufficient funds to
pay the principal upon maturity or upon any acceleration thereof. If we fail to
pay principal on our convertible notes when due, we will be in default under our
debt agreements which could have an adverse effect on our business, financial
condition and results of operations.
We
have relied on and continue to rely on our contractual collaborative
arrangements with research institutions and corporate partners for development
and commercialization of our products. Our business could suffer if we are not
able to enter into suitable arrangements, maintain existing relationships, or if
our collaborative arrangements are not successful in developing and
commercializing products.
We have
entered into collaborative relationships relating to the conduct of clinical
research and other research activities in order to augment our internal research
capabilities and to obtain access to specialized knowledge and expertise. Our
business strategy depends in part on our continued ability to develop and
maintain relationships with leading academic and research institutions and with
independent researchers. The competition for these relationships is intense, and
we can give no assurances that we will be able to develop and maintain these
relationships on acceptable terms.
We also
seek strategic alliances with corporate partners, primarily pharmaceutical and
biotechnology companies, to help us develop and commercialize drugs. Various
problems can arise in strategic alliances. A partner responsible for conducting
clinical trials and obtaining regulatory approval may fail to develop a
marketable drug. A partner may decide to pursue an alternative strategy or focus
its efforts on alliances or other arrangements with third parties. A partner
that has been granted marketing rights for a certain drug within a geographic
area may fail to market the drug successfully. Consequently, strategic alliances
that we may enter into may not be scientifically or commercially
successful.
We cannot
control the resources that any collaborator may devote to our products. Any of
our present or future collaborators may not perform their obligations as
expected. These collaborators may breach or terminate their agreements with us,
for instance upon changes in control or management of the collaborator, or they
may otherwise fail to conduct their collaborative activities successfully and in
a timely manner.
In
addition, our collaborators may elect not to develop products arising out of our
collaborative arrangements or to devote sufficient resources to the development,
regulatory approval, manufacture, marketing or sale of these products. If any of
these events occur, we may not be able to develop or commercialize our
products.
An
important part of our strategy involves conducting multiple product development
programs. We may pursue opportunities in fields that conflict with those of our
collaborators. In addition, disagreements with our collaborators could develop
over rights to our intellectual property. The resolution of such conflicts and
disagreements may require us to relinquish rights to our intellectual property
that we believe we are entitled to. In addition, any disagreement or conflict
with our collaborators could reduce our ability to obtain future collaboration
agreements and negatively impact our relationship with existing collaborators.
Such a conflict or disagreement could also lead to delays in collaborative
research, development, regulatory approval or commercialization of various
products or could require or result in litigation or arbitration, which would be
time consuming and expensive, divert the attention of our management and could
have a significant negative impact on our business, financial condition and
results of operations.
We
anticipate that we will incur additional losses and we may never be
profitable.
We have
never been profitable. We have incurred substantial annual operating losses
associated with ongoing research and development activities, preclinical
testing, clinical trials, regulatory submissions and manufacturing activities.
From the period since our inception to September 30, 2009, we have incurred a
cumulative deficit of $1,018.7 million. We may never achieve revenue sufficient
for us to attain profitability. Achieving profitability is unlikely unless
Genasense® receives
approval from the FDA or EMEA for commercial sale in one or more
indications.
Our
business depends heavily on a small number of products.
We
currently market and sell one product, Ganite® and the
principal patent covering its use for the approved indication expired in April
2005. If Genasense® or our
other pipeline products are not approved, if approval is significantly delayed,
or if in the event of approval these products are commercially unsuccessful,
sales of other products may not be sufficient to offset this loss of potential
revenue.
To
diversify our product line in the long term, it will be important for us to
identify suitable technologies and products for acquisition or licensing and
development. If we are unable to identify suitable technologies and products, or
if we are unable to acquire or license products we identify, we may be unable to
diversify our product line and to generate long-term growth.
We
may be unable to obtain or enforce patents, other proprietary rights and
licenses to protect our business; we could become involved in litigation
relating to our patents or licenses that could cause us to incur additional
costs and delay or prevent our introduction of new drugs to market.
Our
success will depend to a large extent on our ability to:
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obtain U.S. and foreign patent or
other proprietary protection for our technologies, products and
processes;
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preserve trade secrets;
and
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operate without infringing the
patent and other proprietary rights of third
parties.
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standards relating to the validity of patents covering pharmaceutical and
biotechnological inventions and the scope of claims made under these types of
patents are still developing, and they involve complex legal and factual
questions. As a result, our ability to obtain and enforce patents that protect
our drugs is highly uncertain. If we are unable to obtain and enforce patents
and licenses to protect our drugs, our business, results of operations and
financial condition could be adversely affected.
We hold
numerous U.S., foreign and international patents covering various aspects of our
technology, which include novel compositions of matter, methods of large-scale
synthesis and methods of controlling gene expression and methods of treating
disease. In the future, however, we may not be successful in obtaining
additional patents despite pending or future applications. Moreover, our current
and future patents may not be sufficient to protect us against competitors who
use similar technology. Additionally, our patents, the patents of our business
partners and the patents for which we have obtained licensing rights may be
challenged, narrowed, invalidated or circumvented. Furthermore, rights granted
under our patents may not be broad enough to cover commercially valuable drugs
or processes, and therefore, may not provide us with sufficient competitive
advantage with respect thereto.
The
pharmaceutical and biotechnology industries have been greatly affected by
time-consuming and expensive litigation regarding patents and other intellectual
property rights. We may be required to commence, or may be made a party to,
litigation relating to the scope and validity of our intellectual property
rights or the intellectual property rights of others. Such litigation could
result in adverse decisions regarding the patentability of our inventions and
products, the enforceability, validity or scope of protection offered by our
patents or our infringement of patents held by others. Such decisions could make
us liable for substantial money damages, or could bar us from the manufacture,
sale or use of certain products. Moreover, an adverse decision may also compel
us to seek a license from a third party. The costs of any license may be
prohibitive and we may not be able to enter into any required licensing
arrangement on terms acceptable to us.
The cost
to us of any litigation or proceeding relating to patent or license rights, even
if resolved in our favor, could be substantial. Some of our competitors may be
able to sustain the costs of complex patent or licensing litigation more
effectively than we can because of their substantially greater resources.
Uncertainties resulting from the initiation and continuation of any patent or
related litigation could have a material adverse effect on our ability to
compete in the marketplace.
We also
may be required to participate in interference proceedings declared by the U.S.
Patent and Trademark Office in opposition or similar proceedings before foreign
patent offices and in International Trade Commission proceedings aimed at
preventing the importation of drugs that would compete unfairly with our drugs.
These types of proceedings could cause us to incur considerable
costs.
The
principal patent covering the use of Ganite® for its
approved indication, including Hatch-Waxman extensions, expired in April
2005.
Genta’s
patent portfolio includes approximately 65 granted patents and 66 pending
applications in the U.S. and foreign countries. We endeavor to seek appropriate
U.S. and foreign patent protection on our oligonucleotide
technology.
We have
licensed ten U.S. patents relating to Genasense® and its
backbone chemistry that expire between 2008 and 2015. Corresponding patent
applications have been filed in three foreign countries. We also own five U.S.
patent applications relating to methods of using Genasense® expected
to expire in 2020 and 2026, with approximately 50 corresponding foreign patent
applications and granted patents.
Most
of our products are in an early stage of development, and we may never receive
regulatory approval for these products.
Most of
our resources have been dedicated to the research and development of potential
antisense pharmaceutical products such as Genasense®, based
upon oligonucleotide technology. While we have demonstrated the activity of
antisense oligonucleotide technology in model systems in vitro and in animals,
Genasense® is our
only antisense product to have been tested in humans. Several of our other
technologies that serve as a possible basis for pharmaceutical products are only
in preclinical testing. Results obtained in preclinical studies or early
clinical investigations are not necessarily indicative of results that will be
obtained in extended human clinical trials. Our products may prove to have
undesirable and unintended side effects or other characteristics that may
prevent our obtaining FDA or foreign regulatory approval for any indication. In
addition, it is possible that research and discoveries by others will render our
oligonucleotide technology obsolete or noncompetitive.
Clinical
trials are costly and time consuming and are subject to delays; our business
would suffer if the development process relating to our products were subject to
meaningful delays.
Clinical
trials are very costly and time-consuming. The length of time required to
complete a clinical study depends upon many factors, including but not limited
to the size of the patient population, the ability of patients to get to the
site of the clinical study, the criteria for determining which patients are
eligible to join the study and other issues. Delays in patient enrollment and
other unforeseen developments could delay completion of a clinical study and
increase its costs, which could also delay any eventual commercial sale of the
drug that is the subject of the clinical trial.
Our
commencement and rate of completion of clinical trials also may be delayed by
many other factors, including the following:
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inability to obtain sufficient
quantities of materials for use in clinical
trials;
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inability to adequately monitor
patient progress after
treatment;
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unforeseen safety
issues;
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the failure of the products to
perform well during clinical trials;
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government or regulatory
delays.
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If
we fail to obtain the necessary regulatory approvals, we cannot market and sell
our products in the United States.
The FDA
imposes substantial pre-market approval requirements on the introduction of
pharmaceutical products. These requirements involve lengthy and detailed
preclinical and clinical testing and other costly and time-consuming procedures.
Satisfaction of these requirements typically takes several years or more
depending upon the type, complexity and novelty of the product. We cannot apply
for FDA approval to market any of our products under development until
preclinical and clinical trials on the product are successfully completed.
Several factors could prevent successful completion or cause significant delays
of these trials, including an inability to enroll the required number of
patients or failure to demonstrate adequately that the product is safe and
effective for use in humans. If safety concerns develop, the FDA could stop our
trials before completion. We may not market or sell any product for which we
have not obtained regulatory approval.
We cannot
assure you that the FDA will ever approve the use of our products that are under
development. If the patient populations for which our products are approved are
not sufficiently broad, or if approval is accompanied by unanticipated labeling
restrictions, the commercial success of our products could be limited and our
business, results of operations and financial condition could consequently be
materially adversely affected.
If
the third party manufacturers upon which we rely fail to produce our products in
the volumes that we require on a timely basis, or to comply with stringent
regulations applicable to pharmaceutical drug manufacturers, we may face delays
in the commercialization of, or be unable to meet demand for, our products and
may lose potential revenues.
We do not
manufacture any of our products or product candidates and we do not plan to
develop any capacity to do so. We have contracted with third-party manufacturers
to manufacture Ganite® and
Genasense®. The
manufacture of pharmaceutical products requires significant expertise and
capital investment, including the development of advanced manufacturing
techniques and process controls. Manufacturers of pharmaceutical products often
encounter difficulties in production, especially in scaling up initial
production. These problems include difficulties with production costs and
yields, quality control and assurance and shortages of qualified personnel, as
well as compliance with strictly enforced federal, state and foreign
regulations. Our third-party manufacturers may not perform as agreed or may
terminate their agreements with us.
In
addition to product approval, any facility in which Genasense® is
manufactured or tested for its ability to meet required specifications must be
approved by the FDA and/or the EMEA before it can manufacture Genasense®. Failure
of the facility to be approved could delay the approval of Genasense®.
We do not
currently have alternate manufacturing plans in place. The number of third-party
manufacturers with the expertise, required regulatory approvals and facilities
to manufacture bulk drug substance on a commercial scale is limited, and it
would take a significant amount of time to arrange for alternative
manufacturers. If we need to change to other commercial manufacturers, the FDA
and comparable foreign regulators must approve these manufacturers’ facilities
and processes prior to our use, which would require new testing and compliance
inspections, and the new manufacturers would have to be educated in or
independently develop the processes necessary for the production of our
products.
Any of
these factors could cause us to delay or suspend clinical trials, regulatory
submissions, required approvals or commercialization of our products or product
candidates, entail higher costs and result in our being unable to effectively
commercialize our products. Furthermore, if our third-party manufacturers fail
to deliver the required commercial quantities of bulk drug substance or finished
product on a timely basis and at commercially reasonable prices, and we were
unable to promptly find one or more replacement manufacturers capable of
production at a substantially equivalent cost, in substantially equivalent
volume and on a timely basis, we would likely be unable to meet demand for our
products and we would lose potential revenues.
Even
if we obtain regulatory approval, we will be subject to ongoing regulation, and
any failure by us or our manufacturers to comply with such regulation could
suspend or eliminate our ability to sell our products.
Ganite®,
Genasense® (if it
obtains regulatory approval), and any other product we may develop will be
subject to ongoing regulatory oversight, primarily by the FDA. Failure to comply
with post-marketing requirements, such as maintenance by us or by the
manufacturers of our products of current Good Manufacturing Practices as
required by the FDA, or safety surveillance of such products or lack of
compliance with other regulations could result in suspension or limitation of
approvals or other enforcement actions. Current Good Manufacturing Practices are
FDA regulations that define the minimum standards that must be met by companies
that manufacture pharmaceuticals and apply to all drugs for human use, including
those to be used in clinical trials, as well as those produced for general sale
after approval of an application by the FDA. These regulations define
requirements for personnel, buildings and facilities, equipment, control of raw
materials and packaging components, production and process controls, packaging
and label controls, handling and distribution, laboratory controls and
recordkeeping. Furthermore, the terms of any product candidate approval,
including the labeling content and advertising restrictions, may be so
restrictive that they could adversely affect the marketability of our product
candidates. Any such failure to comply or the application of such restrictions
could limit our ability to market our product candidates and may have a material
adverse effect on our business, results of operations and financial condition.
Such failures or restrictions may also prompt regulatory recalls of one or more
of our products, which could have material and adverse effects on our
business.
The
raw materials for our products are produced by a limited number of suppliers,
and our business could suffer if we cannot obtain needed quantities at
acceptable prices and qualities.
The raw
materials that we require to manufacture our drugs, particularly
oligonucleotides and taxanes, are available from only a few suppliers. If these
suppliers cease to provide us with the necessary raw materials or fail to
provide us with an adequate supply of materials at an acceptable price and
quality, we could be materially adversely affected.
If
third-party payors do not provide coverage and reimbursement for use of our
products, we may not be able to successfully commercialize our
products.
Our
ability to commercialize drugs successfully will depend in part on the extent to
which various third-party payors are willing to reimburse patients for the costs
of our drugs and related treatments. These third-party payors include government
authorities, private health insurers and other organizations, such as health
maintenance organizations. Third-party payors often challenge the prices charged
for medical products and services. Accordingly, if less costly drugs are
available, third-party payors may not authorize or may limit reimbursement for
our drugs, even if they are safer or more effective than the alternatives. In
addition, the federal government and private insurers have changed and continue
to consider ways to change the manner in which health care products and services
are provided and paid for in the United States. In particular, these third-party
payors are increasingly attempting to contain health care costs by limiting both
coverage and the level of reimbursement for new therapeutic products. In the
future, it is possible that the government may institute price controls and
further limits on Medicare and Medicaid spending. These controls and limits
could affect the payments we collect from sales of our products.
Internationally, medical reimbursement systems vary significantly, with some
countries requiring application for, and approval of, government or third-party
reimbursement. In addition, some medical centers in foreign countries have fixed
budgets, regardless of levels of patient care. Even if we succeed in bringing
therapeutic products to market, uncertainties regarding future health care
policy, legislation and regulation, as well as private market practices, could
affect our ability to sell our products in quantities, or at prices, that will
enable us to achieve profitability.
Our
business exposes us to potential product liability that may have a negative
effect on our financial performance and our business generally.
The
administration of drugs to humans, whether in clinical trials or commercially,
exposes us to potential product and professional liability risks, which are
inherent in the testing, production, marketing and sale of human therapeutic
products. Product liability claims can be expensive to defend and may result in
large judgments or settlements against us, which could have a negative effect on
our financial performance and materially and adversely affect our business. We
maintain product liability insurance (subject to various deductibles), but our
insurance coverage may not be sufficient to cover claims. Furthermore, we cannot
be certain that we will always be able to maintain or increase our insurance
coverage at an affordable price. Even if a product liability claim is not
successful, the adverse publicity and time and expense of defending such a claim
may interfere with or adversely affect our business and financial
performance.
We
may incur a variety of costs to engage in future acquisitions of companies,
products or technologies, and the anticipated benefits of those acquisitions may
never be realized.
As a part
of our business strategy, we may make acquisitions of, or significant
investments in, complementary companies, products or technologies, although no
significant acquisition or investments are currently pending. Any future
acquisitions would be accompanied by risks such as:
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difficulties in assimilating the
operations and personnel of acquired
companies;
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diversion of our management’s
attention from ongoing business
concerns;
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our potential inability to
maximize our financial and strategic position through the successful
incorporation of acquired technology and rights to our products and
services;
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additional expense associated
with amortization of acquired
assets;
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maintenance of uniform standards,
controls, procedures and policies;
and
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impairment of existing
relationships with employees, suppliers and customers as a result of the
integration of new management
personnel.
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We cannot
guarantee that we will be able to successfully integrate any business, products,
technologies or personnel that we might acquire in the future, and our failure
to do so could harm our business.
We
face substantial competition from other companies and research institutions that
are developing similar products, and we may not be able to compete
successfully.
In many
cases, our products under development will be competing with existing therapies
for market share. In addition, a number of companies are pursuing the
development of antisense technology and controlled-release formulation
technology and the development of pharmaceuticals utilizing such technologies.
We compete with fully integrated pharmaceutical companies that have more
substantial experience, financial and other resources and superior expertise in
research and development, manufacturing, testing, obtaining regulatory
approvals, marketing and distribution. Smaller companies may also prove to be
significant competitors, particularly through their collaborative arrangements
with large pharmaceutical companies or academic institutions. Furthermore,
academic institutions, governmental agencies and other public and private
research organizations have conducted and will continue to conduct research,
seek patent protection and establish arrangements for commercializing products.
Such products may compete directly with any products that may be offered by
us.
Our
competition will be determined in part by the potential indications for which
our products are developed and ultimately approved by regulatory authorities.
For certain of our potential products, an important factor in competition may be
the timing of market introduction of our or our competitors’ products.
Accordingly, the relative speed with which we can develop products, complete the
clinical trials and approval processes and supply commercial quantities of the
products to the market are expected to be important competitive factors. We
expect that competition among products approved for sale will be based, among
other things, on product efficacy, safety, reliability, availability, price,
patent position and sales, marketing and distribution capabilities. The
development by others of new treatment methods could render our products under
development non-competitive or obsolete.
Our
competitive position also depends upon our ability to attract and retain
qualified personnel, obtain patent protection or otherwise develop proprietary
products or processes and secure sufficient capital resources for the
often-substantial period between technological conception and commercial sales.
We cannot assure you that we will be successful in this regard.
We
are dependent on our key executives and scientists, and the loss of key
personnel or the failure to attract additional qualified personnel could harm
our business.
Our
business is highly dependent on our key executives and scientific staff. The
loss of key personnel or the failure to recruit necessary additional or
replacement personnel will likely impede the achievement of our development
objectives. There is intense competition for qualified personnel in the
pharmaceutical and biotechnology industries, and there can be no assurances that
we will be able to attract and retain the qualified personnel necessary for the
development of our business.
Risks
Related to Outstanding Litigation
The
outcome of and costs relating to pending litigation are uncertain.
In
November 2008, a complaint against us and our transfer agent, BNY Mellon
Shareholder Services, was filed in the Supreme Court of the State of New York by
an individual stockholder. The complaint alleges that we and our transfer agent
caused or contributed to losses suffered by the stockholder. We deny the
allegations of the complaint and intend to vigorously defend this
lawsuit.
In
September 2008, several of our stockholders, on behalf of themselves and
all others similarly situated, filed a class action complaint against us, our
Board of Directors, and certain of our executive officers in Superior Court of
New Jersey, captioned Collins v. Warrell, Docket No. L-3046-08. The
complaint alleged that in issuing convertible notes in June 2008, our Board of
Directors, and certain officers breached their fiduciary duties, and we aided
and abetted the breach of fiduciary duty. On March 20, 2009, the
Superior Court of New Jersey granted our motion to dismiss the class action
complaint and dismissed the complaint with prejudice. On April 30, 2009, the
plaintiffs filed a notice of appeal with the Appellate Division. On May
13, 2009, the plaintiffs filed a motion for relief from judgment based on a
claim of new evidence, which was denied on June 12, 2009. The plaintiffs
also asked the Appellate Division for a temporary remand to permit the Superior
Court judge to resolve the issues of the new evidence plaintiffs sought to raise
and the Appellate Division granted the motion for temporary
remand. Following the briefing and a hearing, the Superior Court denied the
motion for relief from judgment on August 28, 2009. Thus, this matter will
proceed in the Appellate Division. Plaintiffs' brief before the Appellate
Division was filed on October 28, 2009, and our responsive brief is due on
January 27, 2010. We intend to continue our vigorous defense of this
matter.
Risks
Related to Our Common Stock
Provisions
in our restated certificate of incorporation and bylaws and Delaware law may
discourage a takeover and prevent our stockholders from receiving a premium for
their shares.
Provisions
in our restated certificate of incorporation and bylaws may discourage third
parties from seeking to obtain control of us and, therefore, could prevent our
stockholders from receiving a premium for their shares. Our restated certificate
of incorporation gives our Board of Directors the power to issue shares of
preferred stock without approval of the holders of common stock. Any preferred
stock that is issued in the future could have voting rights, including voting
rights that could be superior to that of our common stock. The affirmative vote
of 66 2/3% of our voting stock is required to approve certain transactions and
to take certain stockholder actions, including the amendment of certain
provisions of our certificate of incorporation. Our bylaws contain provisions
that regulate how stockholders may present proposals or nominate directors for
election at annual meetings of stockholders.
In
addition, we are subject to Section 203 of the Delaware General Corporation Law,
which contains restrictions on stockholder action to acquire control of
us.
In
September 2005, our Board of Directors approved a Stockholder Rights Plan and
declared a dividend of one preferred stock purchase right, which we refer to as
a Right, for each share of our common stock held of record as of the close of
business on September 27, 2005. In addition, Rights shall be issued in respect
of all shares of common stock issued after such date. The Rights contain
provisions to protect stockholders in the event of an unsolicited attempt to
acquire us, including an accumulation of shares in the open market, a partial or
two-tier tender offer that does not treat all stockholders equally and other
activities that the Board believes are not in the best interests of
stockholders. The Rights may discourage a takeover and prevent our stockholders
from receiving a premium for their shares.
We
have not paid, and do not expect to pay in the future, cash dividends on our
common stock.
We have
never paid cash dividends on our common stock and do not anticipate paying any
such dividends in the foreseeable future. We currently intend to retain our
earnings, if any, for the development of our business.
Our
stock price is volatile.
The
market price of our common stock, like that of the common stock of many other
biopharmaceutical companies, has been and likely will continue to be highly
volatile. Factors that could have a significant impact on the future price of
our common stock include but are not limited to:
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the results of preclinical
studies and clinical trials by us or our
competitors;
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announcements of technological
innovations or new therapeutic products by us or our
competitors;
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developments in patent or other
proprietary rights by us or our competitors, including
litigation;
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fluctuations in our operating
results; and
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market conditions for
biopharmaceutical stocks in
general.
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At
September 30, 2009, our outstanding convertible notes were convertible into
202.9 million shares of common stock. Future sales of shares of our common stock
by existing stockholders, holders of convertible notes who might convert such
convertible notes into common stock and option and warrant holders who may
exercise their options and warrants to purchase common stock also could
adversely affect the market price of our common stock. Moreover, the perception
that sales of substantial amounts of our common stock might occur could
adversely affect the market price of our common stock.
As
our convertible noteholders convert their notes and warrants into shares of our
common stock, our stockholders will be diluted.
The
conversion of some or all of our notes dilutes the ownership interests of
existing stockholders. Any sales in the public market of the common stock
issuable upon conversion of the notes could adversely affect prevailing market
prices of our common stock. In addition, the existence of the notes may
encourage short selling by market participants because the conversion of the
notes could depress the price of our common stock.
If
holders of our notes elect to convert their notes and sell material amounts of
our common stock in the market, such sales could cause the price of our common
stock to decline, and such downward pressure on the price of our common stock
may encourage short selling of our common stock by holders of our notes or
others.
If there
is significant downward pressure on the price of our common stock, it may
encourage holders of notes or others to sell shares by means of short sales to
the extent permitted under the U.S. securities laws. Short sales involve
the sale by a holder of notes, usually with a future delivery date, of common
stock the seller does not own. Covered short sales are sales made in an
amount not greater than the number of shares subject to the short seller’s right
to acquire common stock, such as upon conversion of notes. A holder of
notes may close out any covered short position by converting its notes or
purchasing shares in the open market. In determining the source of shares
to close out the covered short position, a holder of notes will likely consider,
among other things, the price of common stock available for purchase in the open
market as compared to the conversion price of the notes. The existence of
a significant number of short sales generally causes the price of common stock
to decline, in part because it indicates that a number of market participants
are taking a position that will be profitable only if the price of the common
stock declines.
Our
common stock is considered a “penny stock” and does not qualify for exemption
from the “penny stock” restrictions, which may make it more difficult for you to
sell your shares.
Our
common stock is classified as a “penny stock” by the SEC and is subject to rules
adopted by the SEC regulating broker-dealer practices in connection with
transactions in “penny stocks.” The SEC has adopted regulations which define a
“penny stock” to be any equity security that has a market price of less than
$5.00 per share, or with an exercise price of less than $5.00 per share, subject
to certain exceptions. For any transaction involving a penny stock, unless
exempt, these rules require delivery, prior to any transaction in a penny stock,
of a disclosure schedule relating to the penny stock market. Disclosure is also
required to be made about current quotations for the securities and commissions
payable to both the broker-dealer and the registered representative. Finally,
broker-dealers must send monthly statements to purchasers of penny stocks
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. As a result of our shares of
common stock being subject to the rules on penny stocks, the liquidity of our
common stock may be adversely affected.
DESCRIPTION
OF THE SECURITIES WE MAY OFFER
We may
issue, in one or more offerings, any combination of senior or subordinated debt
securities, warrants, preferred stock, common stock or units.
This
prospectus contains a summary of the general terms of the various securities
that we may offer. The prospectus supplement relating to any particular
securities offered will describe the specific terms of the securities, which may
be in addition to or different from the general terms summarized in this
prospectus. The summary in this prospectus and in any prospectus supplement does
not describe every aspect of the securities and is subject to and qualified in
its entirety by reference to all applicable provisions of the documents relating
to the securities offered. These documents are or will be filed as exhibits to
or incorporated by reference in the registration statement.
In
addition, the prospectus supplement will set forth the terms of the offering,
the initial public offering price and estimated net proceeds to us. Where
applicable, the prospectus supplement will also describe any material United
States federal income tax considerations relating to the securities offered and
indicate whether the securities offered are or will be listed on any securities
exchange.
DEBT
SECURITIES
Please
note that in this section entitled Debt Securities, references to holders mean
those who own debt securities registered in their own names, on the books that
we or the trustee maintains for this purpose, and not those who own beneficial
interests in debt securities registered in street name or in debt securities
issued in book-entry form through one or more depositaries. Owners of beneficial
interests in the debt securities should read the section below entitled
“Book-Entry Procedures and Settlement”.
General
The debt
securities offered by this prospectus will be our unsecured obligations and will
be either senior or subordinated debt. We will issue senior debt under a senior
debt indenture, and we will issue subordinated debt under a subordinated debt
indenture. We sometimes refer to the senior debt indenture and the subordinated
debt indenture individually as an indenture and collectively as the indentures.
The indentures will be filed with the SEC prior to effectiveness of this
registration statement and will be exhibits to the registration statement of
which this prospectus forms a part. You can obtain copies of the indentures by
following the directions outlined in “Where You Can Find More Information;
Incorporation of Documents by Reference”, or by contacting the applicable
indenture trustee.
A form of
each debt security, reflecting the particular terms and provisions of a series
of offered debt securities, will be filed with the SEC subsequent to the time of
the applicable offering as exhibits to a Current Report on Form 8-K which, upon
filing with the SEC, will be incorporated by reference into the registration
statement of which this prospectus forms a part.
The
following briefly summarizes the material provisions of the indentures and the
debt securities, other than pricing and related terms disclosed for a particular
issuance in an accompanying prospectus supplement. The specific terms of the
debt securities of a particular series will be disclosed in the prospectus
supplement relating to that series. Wherever particular sections or defined
terms of the applicable indenture are referred to, the statement in this
prospectus is qualified by that reference. Prior to investing in our debt
securities, you should read the particular terms of that series of debt
securities described in the applicable prospectus supplement. You should also
carefully read the more detailed provisions of the applicable indenture relating
to that series.
The
trustee under each of the senior debt indenture and the subordinated debt
indenture will be either Wilmington Trust FSB or the trustee named in the
prospectus supplement.
The
indentures provide that our unsecured senior or subordinated debt securities may
be issued in one or more series, with different terms, in each case as we
authorize from time to time. We also have the right to reopen a previous issue
of a series of debt securities by issuing additional debt securities of such
series.
Types
of Debt Securities
We may
issue fixed or floating rate debt securities.
Fixed
rate debt securities will bear interest at a fixed rate described in the
prospectus supplement. This type includes zero coupon debt securities, which
bear no interest and are often issued at a price lower than the principal
amount. Material federal income tax consequences and other special
considerations applicable to any debt securities issued at a discount will be
described in the applicable prospectus supplement.
Upon the
request of the holder of any floating rate debt security, the calculation agent
will provide the interest rate then in effect for that debt security, and, if
determined, the interest rate that will become effective on the next interest
reset date. The calculation agent’s determination of any interest rate, and its
calculation of the amount of interest for any interest period, will be final and
binding in the absence of manifest error.
All
percentages resulting from any interest rate calculation relating to a debt
security will be rounded upward or downward, as appropriate, to the next higher
or lower one hundred-thousandth of a percentage point. All amounts used in or
resulting from any calculation relating to a debt security will be rounded
upward or downward, as appropriate, to the nearest cent, in the case of U.S.
dollars, or to the nearest corresponding hundredth of a unit, in the case of a
currency other than U.S. dollars, with one-half cent or one-half of a
corresponding hundredth of a unit or more being rounded upward.
In
determining the base rate that applies to a floating rate debt security during a
particular interest period, the calculation agent may obtain rate quotes from
various banks or dealers active in the relevant market, as described in the
prospectus supplement. Those reference banks and dealers may include the
calculation agent itself and its affiliates, as well as any underwriter, dealer
or agent participating in the distribution of the relevant floating rate debt
securities and its affiliates.
Information
in the Prospectus Supplement
The
prospectus supplement for any offered series of debt securities will describe
the following terms, as applicable:
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whether
the debt is senior or subordinated;
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the
total principal amount offered;
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the
percentage of the principal amount at which the debt securities will be
sold and, if applicable, the method of determining the
price;
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the
maturity date or dates;
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whether
the debt securities are fixed rate debt securities or floating rate debt
securities;
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if
the debt securities are fixed rate debt securities, the yearly rate at
which the debt security will bear interest, if any, and the interest
payment dates;
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if
the debt security is an original issue discount debt security, the yield
to maturity;
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if
the debt securities are floating rate debt securities, the interest rate
basis; any applicable index currency or maturity, spread or spread
multiplier or initial, maximum or minimum rate; the interest reset,
determination, calculation and payment dates; and the day count used to
calculate interest payments for any
period;
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the
date or dates from which any interest will accrue, or how such date or
dates will be determined, and the interest payment dates and any related
record dates;
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if
other than in U.S. Dollars, the currency or currency unit in which payment
will be made;
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any
provisions for the payment of additional amounts for
taxes;
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the
denominations in which the currency or currency unit of the securities
will be issuable if other than denominations of $1,000 and integral
multiples thereof;
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the
terms and conditions on which the debt securities may be redeemed at our
option;
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any
of our obligations to redeem, purchase or repay the debt securities at the
option of a holder upon the happening of any event and the terms and
conditions of redemption, purchase or
repayment;
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the
names and duties of any co-trustees, depositaries, authenticating agents,
calculation agents, paying agents, transfer agents or registrars for the
debt securities;
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any
material covenants to which the debt securities are
subject;
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any
material provisions of the applicable indenture described in this
prospectus that do not apply to the debt securities;
and
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any
other specific terms of the debt
securities.
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The terms
on which a series of debt securities may be convertible into or exchangeable for
our other securities or any other entity will be set forth in the prospectus
supplement relating to such series. Such terms will include provisions as to
whether conversion or exchange is mandatory, at the option of the holder or at
our option. The terms may include provisions pursuant to which the number of
other securities to be received by the holders of such series of debt securities
may be adjusted.
We will
issue the debt securities only in registered form. As currently anticipated,
debt securities of a series will trade in book-entry form, and global notes will
be issued in physical, or paper, form, as described below under “Book-Entry
Procedures and Settlement”. Unless otherwise provided in the accompanying
prospectus supplement, we intend to issue debt securities denominated in U.S.
dollars and only in denominations of $1,000 and integral multiples
thereof.
The
prospectus supplement relating to offered securities denominated in a foreign or
composite currency will specify the denomination of the offered
securities.
The debt
securities may be presented for exchange, and debt securities other than a
global security may be presented for registration of transfer, at the principal
corporate trust office of the trustee named in the prospectus supplement.
Holders will not have to pay any service charge for any registration of transfer
or exchange of debt securities, but we may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection with such
registration of transfer.
Payment
and Paying Agents
Distributions
on the debt securities other than those represented by global notes will be made
in the designated currency against surrender of the debt securities at the
principal corporate trust office of the trustee named in the prospectus
supplement. Payment will be made to the registered holder at the close of
business on the record date for such payment. Interest payments will be made at
the principal corporate trust office of the trustee named in the prospectus
supplement, or by a check mailed to the holder at his/her registered address.
Payments in any other manner will be specified in the prospectus
supplement.
Calculation
Agents
Calculations
relating to floating rate debt securities and indexed debt securities will be
made by the calculation agent, an institution that we appoint as our agent for
this purpose. The initial calculation agent will be identified in the prospectus
supplement. We may appoint a different institution to serve as calculation agent
from time to time after the original issue date of the debt security without
your consent and without notifying you of the change.
Senior
Debt
We will
issue senior debt securities under the senior debt indenture. Senior debt will
rank on an equal basis with any other unsecured debt of ours except subordinated
debt.
Subordinated
Debt
We will
issue subordinated debt securities under the subordinated debt indenture.
Subordinated debt will rank subordinated and junior in right of payment, to the
extent set forth in the subordinated debt indenture and the applicable
prospectus supplement, to our senior debt.
Covenants
The
material covenants relating to a series of debt securities offered by this
prospectus will be disclosed in the prospectus supplement relating to such
series of debt securities.
Limitations
on Mergers and Sales of Assets
The
indentures provide that we will not merge or consolidate or transfer or lease
all or substantially all of our property or assets, and another person may not
transfer or lease all or substantially all of its property or assets to us,
unless:
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either
(1) we are the continuing corporation, or (2) the successor corporation,
if other than us, is a U.S. corporation and expressly assumes by
supplemental indenture the obligations evidenced by the securities issued
pursuant to the indenture; and
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immediately
after the transaction, there would not be any default in the performance
of any covenant or condition of the
indenture.
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Modification
of the Indentures
Under the
indentures, we and the relevant trustee can enter into supplemental indentures
to establish the form and terms of any new series of debt securities, consistent
with the terms of the indenture, without obtaining the consent of any holder of
debt securities.
We and
the trustee may, with the consent of the holders of at least a majority in
aggregate principal amount of the debt securities of a series, modify the
applicable indenture or the rights of the holders of the securities of such
series.
No such
modification may, however, without the consent of each holder of an affected
security:
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extend
the fixed maturity of any such
securities;
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reduce
the rate or change the time of payment of interest on such
securities;
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reduce
the principal amount of such securities or the premium, if any, on such
securities;
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change
any obligation of ours to pay additional
amounts;
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reduce
the amount of the principal payable on acceleration of any securities
issued originally at a discount;
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adversely
affect the right of repayment or repurchase at the option of the
holder;
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adversely
affect the right, if any, to convert or exchange such debt
security;
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reduce
or postpone any sinking fund or similar
provision;
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change
the currency or currency unit in which any such securities are payable or
the right of selection thereof;
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impair
the right to sue for the enforcement of any such payment on or after the
maturity of such securities;
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reduce
the percentage of securities referred to above whose holders need to
consent to the modification or a waiver without the consent of such
holders;
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change
any obligation of ours to maintain an office or agency;
or
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change
other provisions of such security as may be specified in the prospectus
supplement relating to the debt securities of that
series.
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Notwithstanding
the preceding, without the consent of any holder of outstanding securities, we
and the trustee may amend or supplement the indentures:
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to
cure any ambiguity, defect or
inconsistency;
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to
provide for uncertificated securities in addition to or in place of
certificated securities;
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to
provide for the assumption of our obligations to holders of any debt
security in the case of a merger or consolidation or sale of all or
substantially all of our property or
assets;
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to
make any change that would provide any additional rights or benefits to
the holders of securities or that does not adversely affect the legal
rights under the indenture of any such
holder;
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to
comply with requirements of the SEC in order to effect or maintain the
qualification of an indenture under the Trust Indenture
Act;
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to
conform the text of the indentures to any provision of the description of
debt securities in a prospectus supplement;
and
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to
provide for the issuance of additional securities in accordance with the
limitations set forth in the
indenture.
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The
consent of holders is not necessary under the indentures to approve the
particular form of any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.
Defaults
Each
indenture provides that events of default regarding any series of debt
securities will be:
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our
failure to pay required interest on any debt security of such series for
30 days;
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our
failure to pay principal, premium or sinking fund, if any, on any debt
security of such series when due;
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our
failure to make any required scheduled installment payment for 30 days on
debt securities of such series;
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our
failure to observe or perform any other covenant contained in the debt
securities or the indentures, other than a covenant specifically relating
to another series of debt securities, and our failure continues for 90
days, or within such other time period as may be specified in the
applicable indenture, after we receive notice from the debenture trustee
or holders of at least 25%, or such other percentage as may be specified
in the applicable indenture, in aggregate principal amount of the
outstanding debt securities of the applicable
series;
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our
failure to pay beyond any applicable grace period, or the acceleration of,
indebtedness in excess of any dollar amount specified in the prospectus
supplement;
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certain
events of bankruptcy or insolvency, whether voluntary or not;
and
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any
other event of default provided with respect to debt securities of that
series in accordance with provisions of the indenture related to the
issuance of such debt securities.
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If an
event of default regarding debt securities of any series issued under the
indentures should occur and be continuing, either the trustee or the holders of
25% in the principal amount of outstanding debt securities of such series may
declare each debt security of that series due and payable. We are required to
file annually with the trustee a statement of an officer as to the fulfillment
by us of our obligations under the indenture during the preceding
year.
No event
of default regarding one series of debt securities issued under an indenture is
necessarily an event of default regarding any other series of debt
securities.
Holders
of a majority in principal amount of the outstanding debt securities of any
series will be entitled to control certain actions of the trustee under the
indentures and to waive past defaults regarding such series. The trustee
generally cannot be required by any of the holders of debt securities to take
any action, unless one or more of such holders shall have provided to the
trustee reasonable security or indemnity.
If an
event of default occurs and is continuing regarding a series of debt securities,
the trustee may use any sums that it holds under the relevant indenture for its
own reasonable compensation and expenses incurred prior to paying the holders of
debt securities of such series.
Before
any holder of any series of debt securities may institute action for any remedy,
except payment on such holder’s debt security when due, the holders of not less
than 25% in principal amount of the debt securities of that series outstanding
must request the trustee to take action. Holders must also offer and give the
satisfactory security and indemnity against liabilities incurred by the trustee
for taking such action.
Discharge
and Defeasance
Unless
otherwise indicated in an applicable prospectus supplement, each indenture
provides that we may satisfy and discharge obligations thereunder with respect
to the debt securities of any series by delivering to the trustee for
cancellation all outstanding debt securities of the series or depositing with
the trustee, after the outstanding debt securities have become due and payable,
or will become due and payable within one year or will be called for redemption
within one year, cash sufficient to pay at stated maturity or redemption all of
the outstanding debt securities of the series and all other sums payable under
the indenture with respect to the series.
Except as
may otherwise be set forth in an accompanying prospectus supplement, after we
have deposited with the trustee, cash or government securities, in trust for the
benefit of the holders sufficient to pay the principal of, premium, if any, and
interest on the debt securities of such series when due, and satisfied certain
other conditions, including receipt of an opinion of counsel that holders will
not recognize taxable gain or loss for federal income tax purposes,
then:
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we
will be deemed to have paid and satisfied our obligations on all
outstanding debt securities of such series, which is known as defeasance
and discharge; or
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we
will cease to be under any obligation, other than to pay when due the
principal of, premium, if any, and interest on such debt securities,
relating to the debt securities of such series, which is known as covenant
defeasance.
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When
there is a defeasance and discharge, the applicable indenture will no longer
govern the debt securities of such series, we will no longer be liable for
payments required by the terms of the debt securities of such series and the
holders of such debt securities will be entitled only to the deposited funds.
When there is a covenant defeasance, however, we will continue to be obligated
to make payments when due if the deposited funds are not
sufficient.
Conversion
and Exchange Rights
If
specified in the applicable prospectus supplement, the debt securities of a
series may be convertible into or exchangeable for our common stock or other
securities. We will describe in the applicable prospectus supplement, among
other things, the conversion or exchange rate or price and any adjustments
thereto, the conversion or exchange period or periods, provisions as to whether
conversion or exchange will be mandatory, at our option or at the option of the
holders of that series of debt securities and provisions affecting conversion or
exchange in the event of the redemption of that series of debt
securities.
Governing
Law
Unless
otherwise stated in the prospectus supplement, the debt securities and the
indentures will be governed by New York law.
Concerning
the Trustee under the Indentures
We may
have and may continue to have banking and other business relationships with the
trustee named in the prospectus supplement, or any subsequent trustee, in the
ordinary course of business.
Form,
Exchange, Registration and Transfer
Unless
otherwise provided in a prospectus supplement, we intend to issue debt
securities only in registered global form.
You may
have your debt securities broken into more debt securities of smaller
denominations or combined into fewer debt securities of larger denominations, as
long as the total principal amount is not changed and so long as the
denominations are in multiples of $1,000 or such other amount as may be
specified in the applicable prospectus supplement. This is called an
exchange.
You may
exchange or transfer debt securities at the office of the trustee. The trustee
acts as our agent for registering debt securities in the names of holders and
transferring debt securities. We may appoint another entity or perform this role
ourselves. The entity performing the role of maintaining the list of registered
holders is called the security registrar. It will also perform transfers. You
will not be required to pay a service charge to transfer or exchange debt
securities, but you may be required to pay for any tax or other governmental
charge associated with the exchange or transfer. The transfer or exchange will
only be made if the security registrar is satisfied with your proof of
ownership.
If the
debt securities are redeemable and we redeem less than all of the debt
securities of a particular series, we may block the transfer or exchange of
those debt securities during the period beginning 15 days before the day we mail
the notice of redemption and ending on the day of that mailing, in order to
freeze the list of holders to prepare the mailing. We may also refuse to
register transfers or exchanges of debt securities selected for redemption,
except that we will continue to permit transfers and exchanges of the unredeemed
portion of any debt security being partially redeemed.
WARRANTS
Please
note that in this section references to holders mean those who own warrants
registered in their own names, on the books that we or our agent maintain for
this purpose, and not those who own beneficial interests in warrants registered
in street name or in warrants issued in book-entry form through one or more
depositaries. Owners of beneficial interests in the warrants should read the
section below entitled “Book-Entry Procedures and Settlement”.
General
We may
offer warrants separately or together with our debt or equity securities or
units.
We may
issue warrants in such amounts or in as many distinct series as we wish. This
section summarizes terms of the warrants that apply generally to all series.
Most of the financial and other specific terms of your warrant will be described
in the prospectus supplement. Those terms may vary from the terms described
here.
The
warrants of a series will be issued under a separate warrant agreement to be
entered into between us and one or more banks or trust companies, as warrant
agent, as set forth in the prospectus supplement. A form of each warrant
agreement, including a form of warrant certificate representing each warrant,
reflecting the particular terms and provisions of a series of offered warrants,
will be filed with the SEC at the time of the offering and incorporated by
reference in the registration statement of which this prospectus forms a part.
You can obtain a copy of any form of warrant agreement when it has been filed by
following the directions outlined in “Where You Can Find More Information;
Incorporation of Documents by Reference” or by contacting the applicable warrant
agent.
The
following briefly summarizes the material provisions of the warrant agreements
and the warrants. As you read this section, please remember that the specific
terms of your warrant as described in the prospectus supplement will supplement
and, if applicable, may modify or replace the general terms described in this
section. You should read carefully the prospectus supplement and the more
detailed provisions of the warrant agreement and the warrant certificate,
including the defined terms, for provisions that may be important to you. If
there are differences between the prospectus supplement and this prospectus, the
prospectus supplement will control. Thus, the statements made in this section
may not apply to your warrant.
Types
of Warrants
We may
issue debt warrants or equity warrants. A debt warrant is a warrant for the
purchase of our debt securities on terms to be determined at the time of sale.
An equity warrant is a warrant for the purchase or sale of our equity
securities. We may also issue warrants for the purchase or sale of, or whose
cash value is determined by reference to the performance, level or value of, one
or more of the following: securities of one or more issuers, including those
issued by us and described in this prospectus or debt or equity securities
issued by third parties; a currency or currencies; a commodity or commodities;
and other financial, economic or other measure or instrument, including the
occurrence or non-occurrence of any event or circumstances, or one or more
indices or baskets of these items.
Information
in the Prospectus Supplement
The
prospectus supplement will contain, where applicable, the following information
about the warrants:
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the
specific designation and aggregate number of, and the price at which we
will issue, the warrants;
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the
currency or currency unit with which the warrants may be purchased and in
which any payments due to or from the holder upon exercise must be
made;
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the
date on which the right to exercise the warrants will begin and the date
on which that right will expire or, if you may not continuously exercise
the warrants throughout that period, the specific date or dates on which
you may exercise the warrants;
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whether
the exercise price may be paid in cash, by the exchange of warrants or
other securities or both, and the method of exercising the
warrants;
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whether
the warrants will be settled by delivery of the underlying securities or
other property or in cash;
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whether
and under what circumstances we may cancel the warrants prior to their
expiration date, in which case the holders will be entitled to receive
only the applicable cancellation amount, which may be either a fixed
amount or an amount that varies during the term of the warrants in
accordance with a schedule or
formula;
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whether
the warrants will be issued in global or non-global
form;
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the
identities of the warrant agent, any depositaries and any paying,
transfer, calculation or other agents for the
warrants;
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any
securities exchange or quotation system on which the warrants or any
securities deliverable upon exercise of the warrants may be
listed;
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whether
the warrants are to be sold separately or with other securities, and if
the warrants are to be sold with the securities of another company or
other companies, certain information regarding such company or companies;
and
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any
other terms of the warrants.
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No holder
of a warrant will, as such, have any rights of a holder of the debt securities,
equity securities or other warrant property purchasable under or in the warrant,
including any right to receive payment thereunder.
Additional
Information in the Prospectus Supplement for Debt Warrants
In the
case of debt warrants, the prospectus supplement will contain, where
appropriate, the following additional information:
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the
designation, aggregate principal amount, currency and terms of the debt
securities that may be purchased upon exercise of the debt warrants;
and
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the
designation, terms and amount of debt securities, if any, to be issued
together with each of the debt warrants and the date, if any, after which
the debt warrants and debt securities will be separately
transferable.
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No
Limit on Issuance of Warrants
The
warrant agreements will not limit the number of warrants or other securities
that we may issue.
Modifications
We and
the relevant warrant agent may, without the consent of the holders, amend each
warrant agreement and the terms of each issue of warrants, for the purpose of
curing any ambiguity or of correcting or supplementing any defective or
inconsistent provision, or in any other manner that we may deem necessary or
desirable and that will not adversely affect the interests of the holders of the
outstanding unexercised warrants in any material respect.
We and
the relevant warrant agent also may, with the consent of the holders of at least
a majority in number of the outstanding unexercised warrants affected, modify or
amend the warrant agreement and the terms of the warrants. No such modification
or amendment may, without the consent of each holder of an affected
warrant:
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reduce
the amount receivable upon exercise, cancellation or
expiration;
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shorten
the period of time during which the warrants may be
exercised;
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otherwise
materially and adversely affect the exercise rights of the beneficial
owners of the warrants; or
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reduce
the percentage of outstanding warrants whose holders must consent to
modification or amendment of the applicable warrant agreement or the terms
of the warrants.
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Merger
and Similar Transactions Permitted; No Restrictive Covenants or Events of
Default
The
warrant agreements will not restrict our ability to merge or consolidate with,
or sell our assets to, another firm or to engage in any other transactions. If
at any time there is a merger or consolidation involving us or a sale or other
disposition of all or substantially all of our assets, the successor or assuming
company will be substituted for us, with the same effect as if it had been named
in the warrant agreement and in the warrants. We will be relieved of any further
obligation under the warrant agreement or warrants, and, in the event of any
such merger, consolidation, sale or other disposition, we as the predecessor
corporation may at any time thereafter be dissolved, wound up or
liquidated.
The
warrant agreements will not include any restrictions on our ability to put liens
on our assets, including our interests in our subsidiaries, nor will they
provide for any events of default or remedies upon the occurrence of any events
of default.
Warrant
Agreements Will Not Be Qualified under Trust Indenture Act
No
warrant agreement will be qualified as an indenture, and no warrant agent will
be required to qualify as a trustee, under the Trust Indenture Act. Therefore,
holders of warrants issued under a warrant agreement will not have the
protection of the Trust Indenture Act with respect to their
warrants.
Enforceability
of Rights by Beneficial Owner
Each
warrant agent will act solely as our agent in connection with the issuance and
exercise of the applicable warrants and will not assume any obligation or
relationship of agency or trust for or with any registered holder of or owner of
a beneficial interest in any warrant. A warrant agent will have no duty or
responsibility in case of any default by us under the applicable warrant
agreement or warrant certificate, including any duty or responsibility to
initiate any proceedings at law or otherwise or to make any demand upon
us.
Holders
may, without the consent of the applicable warrant agent, enforce by appropriate
legal action, on their own behalf, their right to exercise their warrants, to
receive debt securities, in the case of debt warrants, and to receive payment,
if any, for their warrants, in the case of universal warrants.
Governing
Law
Unless
otherwise stated in the prospectus supplement, the warrants and each warrant
agreement will be governed by New York law.
UNITS
As
specified in the applicable prospectus supplement, we may issue units consisting
of one or more warrants, debt securities, preferred stock, common stock or any
combination of such securities. The applicable prospectus supplement
will describe:
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the
terms of the units and of the warrants, debt securities, preferred stock
and common stock comprising the units, including whether and under what
circumstances the securities comprising the units may be traded
separately;
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a
description of the terms of any unit agreement governing the units;
and
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a
description of the provisions for the payment, settlement, transfer or
exchange of the units.
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PREFERRED
STOCK
Our
certificate of incorporation authorizes 5,000,000 shares of preferred stock,
$0.001 par value per share. We are authorized to issue 600,000 shares of Series
A Convertible Preferred Stock. As of December 16, 2009, 7,700 shares
of Series A Convertible Preferred Stock were issued and
outstanding. Two million shares of our preferred stock have been
designated Series G Participating Cumulative Preferred Stock, none of which are
issued and outstanding, such shares being subject to the Stockholder Rights Plan
described below. The preferred stock may be issued from time to time
in one or more series, with such distinctive serial designations, rights and
preferences as shall be determined by the board of directors.
The
following briefly summarizes the material terms of our preferred stock, other
than pricing and related terms disclosed for a particular issuance in an
accompanying prospectus supplement. You should read the particular terms of any
series of preferred stock we offer which will be described in more detail in the
prospectus supplement prepared for such series, together with the more detailed
provisions of our certificate of incorporation and the certificate of
designations relating to each particular series of preferred stock, for
provisions that may be important to you. The certificate of designations
relating to a particular series of preferred stock offered by way of an
accompanying prospectus supplement will be filed with the SEC at the time of the
offering and incorporated by reference in the registration statement of which
this prospectus forms a part. You can obtain a copy of this document by
following the directions outlined in “Where You Can Find More Information;
Incorporation of Documents by Reference.” The prospectus supplement will also
state whether any of the terms summarized below do not apply to the series of
preferred stock being offered.
General
Under our
certificate of incorporation, our board of directors is authorized to issue
shares of preferred stock in one or more series, and to establish from time to
time a series of preferred stock with the following terms
specified:
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the
number of shares to be included in the
series;
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the
designation, powers, preferences and rights of the shares of the series;
and
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the
qualifications, limitations or restrictions of such series, except as
otherwise stated in the certificate of
incorporation.
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Prior to
the issuance of any series of preferred stock, our board of directors will adopt
resolutions creating and designating the series as a series of preferred stock
and the resolutions will be filed in a certificate of designation as an
amendment to the certificate of incorporation. The term board of directors
includes any duly authorized committee.
The
rights of holders of the preferred stock offered may be adversely affected by
the rights of holders of any shares of preferred stock that may be issued in the
future, provided that the future issuances are first approved by the holders of
the class(es) of preferred stock adversely affected. The board of directors may
cause shares of preferred stock to be issued in public or private transactions
for any proper corporate purpose. Examples of proper corporate purposes include
issuances to obtain additional financing in connection with acquisitions or
otherwise, and issuances to our officers, directors and employees pursuant to
benefit plans or otherwise. Shares of preferred stock we issue may have the
effect of rendering more difficult or discouraging an acquisition of us deemed
undesirable by our board of directors.
The
preferred stock will be, when issued, fully paid and nonassessable. Holders of
preferred stock will not have any preemptive or subscription rights to acquire
more of our stock.
We will
name the transfer agent, registrar, dividend disbursing agent and redemption
agent for shares of each series of preferred stock in the prospectus supplement
relating to such series.
Rank
Unless
otherwise specified for a particular series of preferred stock in an
accompanying prospectus supplement, each series will rank on an equal basis with
each other series of preferred stock, and prior to the common stock, as to
dividends and distributions of assets.
Dividends
Holders
of each series of preferred stock will be entitled to receive cash dividends,
when, as and if declared by our board of directors out of funds legally
available for dividends. The rates and dates of payment of dividends will be set
forth in the prospectus supplement relating to each series of preferred stock.
Dividends will be payable to holders of record of preferred stock as they appear
on our books on the record dates fixed by the board of directors. Dividends on
any series of preferred stock may be cumulative or noncumulative.
We may
not declare, pay or set apart for payment dividends on the preferred stock
unless full dividends on any other series of preferred stock that ranks on an
equal or senior basis have been paid or sufficient funds have been set apart for
payment for:
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all
prior dividend periods of the other series of preferred stock that pay
dividends on a cumulative basis; or
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the
immediately preceding dividend period of the other series of preferred
stock that pay dividends on a noncumulative
basis.
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Partial
dividends declared on shares of preferred stock and any other series of
preferred stock ranking on an equal basis as to dividends will be declared pro
rata. A pro rata declaration means that the ratio of dividends declared per
share to accrued dividends per share will be the same for both series of
preferred stock.
Similarly,
we may not declare, pay or set apart for payment non-stock dividends or make
other payments on the common stock or any other of our stock ranking junior to
the preferred stock until full dividends on the preferred stock have been paid
or set apart for payment for:
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all
prior dividend periods if the preferred stock pays dividends on a
cumulative basis; or
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the
immediately preceding dividend period if the preferred stock pays
dividends on a noncumulative basis.
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Conversion
and Exchange
The
prospectus supplement for any series of preferred stock will state the terms, if
any, on which shares of that series are convertible into or exchangeable for
shares of our common stock or other securities.
Redemption
If so
specified in the applicable prospectus supplement, a series of preferred stock
may be redeemable at any time, in whole or in part, at our option or at the
option of the holder thereof and may be mandatorily redeemed.
Any
partial redemptions of preferred stock will be made in a way that our board of
directors decides is equitable.
Unless we
default in the payment of the redemption price, dividends will cease to accrue
after the redemption date on shares of preferred stock called for redemption and
all rights of holders of such shares will terminate except for the right to
receive the redemption price.
Liquidation
Preference
Upon our
voluntary or involuntary liquidation, dissolution or winding up, holders of each
series of preferred stock will be entitled to receive distributions upon
liquidation in the amount set forth in the prospectus supplement relating to
such series of preferred stock, plus an amount equal to any accrued and unpaid
dividends. Such distributions will be made before any distribution is made on
any securities ranking junior relating to preferred stock in liquidation,
including common stock.
If the
liquidation amounts payable relating to the preferred stock of any series and
any other securities ranking on a parity regarding liquidation rights are not
paid in full, the holders of the preferred stock of such series and such other
securities will share in any such distribution of our available assets on a
ratable basis in proportion to the full liquidation preferences. Holders of such
series of preferred stock will not be entitled to any other amounts from us
after they have received their full liquidation preference.
Voting
Rights
The
holders of shares of our preferred stock will have no voting rights,
except:
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as
otherwise stated in the prospectus
supplement;
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as
otherwise stated in the certificate of designations establishing such
series; and
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as
required by applicable law.
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COMMON
STOCK
Under our
restated certificate of incorporation, as amended to date, we are authorized to
issue up to 6,000,000,000 shares of common stock, $0.001 par value per share. As
of December 16, 2009, approximately 191,810,882 shares of common stock were
issued and outstanding. The following description of our common stock, restated
certificate of incorporation and amended and restated bylaws are only summaries,
and we encourage you to review complete copies of these documents. You can
obtain copies of these documents by following the directions outlined in “Where
You Can Find More Information; Incorporation of Documents by
Reference”.
Dividends,
Voting Rights and Liquidation
Except as
required by law or by the restated certificate of incorporation, holders of
common stock are entitled to one vote for each share held of record on all
matters submitted to a vote of the stockholders. Subject to preferences that may
be applicable to any then outstanding preferred stock, holders of common stock
are entitled to receive ratably such dividends as may be declared by the Board
of Directors out of funds legally available therefor. In the event of a
liquidation, dissolution or winding up of Genta, holders of our common stock and
our preferred stock are entitled to share ratably on an as-converted basis in
all assets remaining after payment of liabilities and the liquidation preference
of any then outstanding preferred stock. Holders of common stock have no right
to convert their common stock into any other securities. There are no redemption
or sinking fund provisions applicable to the common stock. All outstanding
shares of common stock are fully paid and non-assessable.
In
September 2005, the Board of Directors adopted a Stockholder Rights Plan and
declared a dividend of one preferred stock purchase right, or Right, for each
outstanding share of our common stock, payable to holders of record as of the
close of business on September 27, 2005. In addition, Rights shall be issued in
respect of all shares of common stock issued after such date, including the
shares issued hereunder, pursuant to the Plan. Generally, the rights become
exercisable upon the earlier of the close of business on the tenth business day
following the first public announcement that any person or group has become a
beneficial owner of 15% or more of our common stock and the close of business on
the tenth business day after the date of the commencement of a tender or
exchange offer by any person which would, if consummated, result in such person
becoming a beneficial owner of 15% or more of the our common stock. Each Right
shall be exercisable to purchase, for $25.00, subject to adjustment, one
one-hundredth of a newly registered share of our Series G Participating
Cumulative Preferred Stock, par value $0.001 per share. The terms and conditions
of the Rights are set forth in a Rights Agreement dated September 20, 2005
between us and Mellon Investor Services, LLC, as Rights Agent.
Transfer
Agent and Registrar
Our
transfer agent is BNY Mellon Securities LLC.
Delaware
Law and Certain Certificate of Incorporation and By-Law Provisions
Under
Section 203 of the Delaware General Corporation Law certain “business
combinations” between a Delaware corporation, whose stock generally is publicly
traded or held of record by more than 2,000 stockholders, and an “interested
stockholder” are prohibited for a three-year period following the date that such
stockholder became an interested stockholder, unless:
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the
corporation has elected in its certificate of incorporation not to be
governed by Section 203 (we have not made such an
election);
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either
the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder was approved by the board
of directors of the corporation before the other party to the business
combination became an interested
stockholder;
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upon
consummation of the transaction that made it an interested stockholder,
the interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the commencement of the transaction excluding
voting stock owned by directors who are also officers or held in employee
benefit plans in which the employees do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in
a tender or exchange offer;
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on
or subsequent to such date the business combination is approved by the
board of directors and authorized at an annual or special meeting of
stockholders by the affirmative vote of at least 66-2/3% of the
outstanding voting stock which is not owned by the interested
stockholder.
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The
three-year prohibition also does not apply to certain business combinations
proposed by an interested stockholder following the announcement or notification
of certain extraordinary transactions involving the corporation and a person who
had not been an interested stockholder during the previous three years or who
became an interested stockholder with the approval of a majority of the
corporation’s directors. A “business combination” is defined to include mergers,
asset sales and other transactions resulting in financial benefit to a
stockholder. In general, an “interested stockholder” is a person who, together
with affiliates and associates, owns (or within three years, did own) 15% or
more of a corporation’s voting stock.
The
statute could prohibit or delay mergers or other takeover or change in control
attempts with respect to us and, accordingly, may discourage attempts to acquire
us even though such a transaction may offer our stockholders the opportunity to
sell their stock at a price above the prevailing market price.
Our
amended and restated bylaws provide that stockholders seeking to bring business
before an annual meeting of stockholders, or to nominate candidates for election
as directors at an annual meeting of stockholders, must provide timely notice
thereof in writing. To be timely, a stockholder’s notice must be delivered to
the secretary at our principal executive offices not less than 50 calendar days
nor more than 75 calendar days prior to the meeting; provided, that if less than
65 days’ notice or prior public disclosure of the date of the meeting is given
or made to stockholders, notice by the stockholder to be timely must be received
not later than the close of business on the 15th day following the day on which
notice of the date of the annual meeting was mailed or such public disclosure
was made. Our amended and restated bylaws also specify requirements as to the
form and content of a stockholder’s notice. These provisions may discourage
stockholders from bringing matters before an annual meeting of stockholders or
from making nominations for directors at an annual meeting of
stockholders.
BOOK-ENTRY
PROCEDURES AND SETTLEMENT
Most
offered securities will be book-entry, or global, securities. Upon issuance, all
book-entry securities will be represented by one or more fully registered global
securities, without coupons. Each global security will be deposited with, or on
behalf of, The Depository Trust Company, or DTC, a securities depository, and
will be registered in the name of DTC or a nominee of DTC. DTC will thus be the
only registered holder of these securities.
Purchasers
of securities may only hold interests in the global securities through DTC if
they are participants in the DTC system. Purchasers may also hold interests
through a securities intermediary — banks, brokerage houses and other
institutions that maintain securities accounts for customers — that has an
account with DTC or its nominee. DTC will maintain accounts showing the security
holdings of its participants, and these participants will in turn maintain
accounts showing the security holdings of their customers. Some of these
customers may themselves be securities intermediaries holding securities for
their customers. Thus, each beneficial owner of a book-entry security will hold
that security indirectly through a hierarchy of intermediaries, with DTC at the
top and the beneficial owner’s own securities intermediary at the
bottom.
The
securities of each beneficial owner of a book-entry security will be evidenced
solely by entries on the books of the beneficial owner’s securities
intermediary. The actual purchaser of the securities will generally not be
entitled to have the securities represented by the global securities registered
in its name and will not be considered the owner under the applicable indenture,
the declaration of trust or other applicable governing documents relating to the
security. In most cases, a beneficial owner will also not be able to obtain a
paper certificate evidencing the holder’s ownership of securities. The
book-entry system for holding securities eliminates the need for physical
movement of certificates. However, the laws of some jurisdictions require some
purchasers of securities to take physical delivery of their securities in
definitive form. These laws may impair the ability to transfer book-entry
securities.
A
beneficial owner of book-entry securities represented by a global security may
exchange the securities for definitive, or paper, securities only
if:
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DTC
is unwilling or unable to continue as depositary for such global security
and we do not appoint a qualified replacement for DTC within 90 days;
or
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we
in our sole discretion decide to allow some or all book-entry securities
to be exchangeable for definitive securities in registered
form.
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Unless we
indicate otherwise, any global security that is exchangeable will be
exchangeable in whole for definitive securities in registered form, with the
same terms and of an equal aggregate principal amount. Definitive securities
will be registered in the name or names of the person or persons specified by
DTC in a written instruction to the registrar of the securities. DTC may base
its written instruction upon directions that it receives from its
participants.
In this
prospectus, for book-entry securities, references to actions taken by security
holders will mean actions taken by DTC upon instructions from its participants,
and references to payments and notices of redemption to security holders will
mean payments and notices of redemption to DTC as the registered holder of the
securities for distribution to participants in accordance with DTC’s
procedures.
DTC is a
limited purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a clearing corporation within the
meaning of the New York Uniform Commercial Code and a clearing agency registered
under section 17A of the Securities Exchange Act of 1934. The rules applicable
to DTC and its participants are on file with the SEC.
Neither
we nor any trustee or underwriter will have any responsibility or liability for
any aspect of the records relating to, or payments made on account of,
beneficial ownership interest in the book-entry securities or for maintaining,
supervising or reviewing any records relating to the beneficial ownership
interests.
Clearstream
and Euroclear
Links may
be established among DTC, Clearstream Banking, societe anonyme, Luxembourg
(Clearstream Banking SA) and Euroclear (two international clearing systems that
perform functions similar to those that DTC performs in the U.S.), to facilitate
the initial issuance of book-entry securities and cross-market transfers of
book-entry securities associated with secondary market trading.
Although
we understand that DTC, Clearstream Banking SA and Euroclear have agreed to the
procedures provided below in order to facilitate transfers, they are under no
obligation to perform such procedures, and the procedures may be modified or
discontinued at any time.
Clearstream
Banking SA and Euroclear will record the ownership interests of their
participants in much the same way as DTC, and DTC will record the aggregate
ownership of each of the U.S. agents of Clearstream Banking SA and Euroclear, as
participants in DTC.
When
book-entry securities are to be transferred from the account of a DTC
participant to the account of a Clearstream Banking SA participant or a
Euroclear participant, the purchaser must send instructions to Clearstream
Banking SA or Euroclear through a participant at least one business day prior to
settlement. Clearstream Banking SA or Euroclear, as the case may be, will
instruct its U.S. agent to receive book-entry securities against payment. After
settlement, Clearstream Banking SA or Euroclear will credit its participant’s
account. Credit for the book-entry securities will appear on the next day
(European time).
Because
settlement is taking place during New York business hours, DTC participants can
employ their usual procedures for sending book-entry securities to the relevant
U.S. agent acting for the benefit of Clearstream Banking SA or Euroclear
participants. The sale proceeds will be available to the DTC seller on the
settlement date. Thus, to the DTC participant, a cross-market transaction will
settle no differently than a trade between two DTC participants.
When a
Clearstream Banking SA or Euroclear participant wishes to transfer book-entry
securities to a DTC participant, the seller must send instructions to
Clearstream Banking SA or Euroclear through a participant at least one business
day prior to settlement. In these cases, Clearstream Banking SA or Euroclear
will instruct its U.S. agent to transfer the book-entry securities against
payment. The payment will then be reflected in the account of the Clearstream
Banking SA or Euroclear participant the following day, with the proceeds
back-valued to the value date (which would be the preceding day, when settlement
occurs in New York). If settlement is not completed on the intended value date
(i.e., the trade fails), proceeds credited to the Clearstream Banking SA or
Euroclear participant’s account would instead be valued as of the actual
settlement date.
We may
issue, in one or more offerings, any combination of senior or subordinated debt
securities, warrants, preferred stock, common stock or units.
This
prospectus contains a summary of the general terms of the various securities
that we may offer. The prospectus supplement relating to any particular
securities offered will describe the specific terms of the securities, which may
be in addition to or different from the general terms summarized in this
prospectus. The summary in this prospectus and in any prospectus supplement does
not describe every aspect of the securities and is subject to and qualified in
its entirety by reference to all applicable provisions of the documents relating
to the securities offered. These documents are or will be filed as exhibits to
or incorporated by reference in the registration statement.
In
addition, the prospectus supplement will set forth the terms of the offering,
the initial public offering price and estimated net proceeds to us. Where
applicable, the prospectus supplement will also describe any material United
States federal income tax considerations relating to the securities offered and
indicate whether the securities offered are or will be listed on any securities
exchange.
USE
OF PROCEEDS
Unless
otherwise set forth in the applicable prospectus supplement, we intend to use
the net proceeds from the sale of the securities we offer by this prospectus for
general corporate purposes, which may include, among other things:
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general
corporate purposes, including additions to working capital and capital
expenditures;
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research
and development activities; and
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the
expansion of our business through internal growth or
acquisitions.
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We may
raise additional funds from time to time through equity or debt financing,
including borrowings under credit facilities, to finance our business and
operations. If required, we will include a more detailed description of the use
of proceeds from any specific offering of securities in the prospectus
supplement relating to that offering.
PLAN
OF DISTRIBUTION
We may
sell our securities from time to time through underwriters, dealers or agents or
directly to purchasers, in one or more transactions at a fixed price or prices,
which may be changed, or at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. We may
use these methods in any combination.
By
Underwriters
We may
use an underwriter or underwriters in the offer or sale of our
securities:
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If
we use an underwriter or underwriters, the offered securities will be
acquired by the underwriters for their own
account.
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We
will include the names of the specific managing underwriter or
underwriters, as well as any other underwriters, the amounts underwritten
by each underwriter, and the terms of the transactions, including the
compensation the underwriters and dealers will receive, in the prospectus
supplement.
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The
underwriters will use this prospectus and the prospectus supplement to
sell our securities.
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We may
also sell securities pursuant to one or more standby agreements with one or more
underwriters in connection with the call, redemption or exchange of a specified
class or series of any of our outstanding securities. In a standby agreement,
the underwriter or underwriters would agree either:
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to
purchase from us up to the number of shares of common stock that would be
issuable upon conversion or exchange of all the shares of the class or
series of our securities at an agreed price per share of common stock;
or
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to
purchase from us up to a specified dollar amount of offered securities at
an agreed price per offered security, which price may be fixed or may be
established by formula or other method and which may or may not relate to
market prices of our common stock or any other outstanding
security.
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The
underwriter or underwriters may also agree, if applicable, to convert or
exchange any securities of the class or series held or purchased by the
underwriter or underwriters into or for our common stock or other
security.
The
underwriter or underwriters may assist in the solicitation of conversions or
exchanges by holders of the class or series of securities.
By
Dealers
We may
use a dealer to sell our securities.
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If
we use a dealer, such person, as principal, will sell our securities to
the dealer.
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The
dealer will then resell our securities to the public at varying prices
that the dealer will determine at the time it sells our
securities.
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We
will include the name of the dealer and the terms of our transactions with
the dealer in the prospectus
supplement.
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By
Agents
We may
designate agents to solicit offers to purchase our securities.
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We
will name any agent involved in offering or selling our securities and any
commissions that we will pay to the agent in the prospectus
supplement.
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Unless
indicated otherwise in the prospectus supplement, our agents will act on a
best efforts basis for the period of their
appointment.
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An
agent may be deemed to be an underwriter under the Securities Act of any
of our securities that they offer or
sell.
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By
Delayed Delivery Contracts
We may
authorize our agents and underwriters to solicit offers by certain institutions
to purchase our securities at the public offering price under delayed delivery
contracts.
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If
we use delayed delivery contracts, we will disclose that we are using them
in the prospectus supplement and will tell you when payment will be
demanded and securities delivered under the delayed delivery
contracts.
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These
delayed delivery contracts will be subject only to the conditions set
forth in the prospectus supplement.
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We
will indicate in the prospectus supplement the commission that
underwriters and agents soliciting purchases of our securities under
delayed delivery contracts will be entitled to
receive.
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We may
directly solicit offers to purchase our securities, and we may directly sell our
securities to institutional or other investors, including our affiliates. We
describe the terms of our direct sales in the prospectus supplement. We may also
sell our securities upon the exercise of rights which we may issue.
General
Information
Underwriters,
dealers and agents that participate in the distribution of our securities may be
underwriters as defined in the Securities Act, and any discounts or commissions
they receive and any profit they make on the resale of the offered securities
may be treated as underwriting discounts and commissions under the Securities
Act. Any underwriters or agents will be identified and their compensation
described in a prospectus supplement. We may indemnify agents, underwriters, and
dealers against certain civil liabilities, including liabilities under the
Securities Act, or make contributions to payments they may be required to make
relating to those liabilities. Our agents, underwriters, and dealers, or their
affiliates, may be customers of, engage in transactions with, or perform
services for us in the ordinary course of business.
Each
series of securities offered by this prospectus may be a new issue of securities
with no established trading market. Any underwriters to whom securities offered
by this prospectus are sold by us for public offering and sale may make a market
in the securities offered by this prospectus, but the underwriters will not be
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
any securities offered by this prospectus.
Representatives
of the underwriters through whom our securities are sold for public offering and
sale may engage in over-allotment, stabilizing transactions, syndicate short
covering transactions and penalty bids in accordance with Regulation M under the
Exchange Act. Over-allotment involves syndicate sales in excess of the offering
size, which creates a syndicate short position. Stabilizing transactions permit
bids to purchase the offered securities so long as the stabilizing bids do not
exceed a specified maximum.
Syndicate
covering transactions involve purchases of the offered securities in the open
market after the distribution has been completed in order to cover syndicate
short positions. Penalty bids permit the representative of the underwriters to
reclaim a selling concession from a syndicate member when the offered securities
originally sold by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. Such stabilizing transactions,
syndicate covering transactions and penalty bids may cause the price of the
offered securities to be higher than it would otherwise be in the absence of
such transactions. These transactions may be effected on the OTC Bulleting Board
or a national securities exchange and, if commenced, may be discontinued at any
time. Underwriters, dealers and agents may be customers of, engage in
transactions with or perform services for, us and our subsidiaries in the
ordinary course of business.
We will
bear all costs, expenses and fees in connection with the registration of the
securities as well as the expense of all commissions and discounts, if any,
attributable to the sales of any of our securities by us.
WHERE
YOU CAN FIND MORE INFORMATION; INCORPORATION OF DOCUMENTS BY
REFERENCE
We file
annual, quarterly and special reports, proxy statements and other information
with the Commission. You may read and copy any document we file at the
Commission’s public reference room at 100 F Street, N.E., Washington, D.C.
20549. Please call the Commission at 1-800-SEC-0330 for further information on
the public reference rooms. Many of the filings we make with the Commission are
also available to the public from the Securities and Exchange Commission’s
Website at “http://www.sec.gov.” We make available free of charge our annual,
quarterly and current reports, proxy statements and other information upon
request. To request such materials, please contact our Investor Relations
department at: Genta Incorporated, Attention: Investor Relations, 200 Connell
Drive, Berkeley Heights, NJ 07922, (908) 286-9800. In addition, our common stock
is listed for trading on the OTC Bulletin Board under the symbol “GETA.OB.” We
maintain a Website at “http:// www.genta.com” (this is not a hyperlink, you must
visit this website through an Internet browser). Our Website and the information
contained therein or connected thereto are not incorporated into this
prospectus.
We have
filed with the Commission a registration statement (which contains this
prospectus) on Form S-3 under the Securities Act. The registration statement
relates to our offering of the common stock, preferred stock, debt securities,
warrants and units. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits and schedules to the
registration statement. Please refer to the registration statement and its
exhibits and schedules for further information with respect to us and our common
stock, preferred stock, debt securities, warrants and units. Statements
contained in this prospectus as to the contents of any contract or other
document are not necessarily complete and, in each instance, we refer you to the
copy of that contract or document filed as an exhibit to the registration
statement. You may read and obtain a copy of the registration statement and its
exhibits and schedules from the Commission, as described in the preceding
paragraph.
The
Commission allows us to “incorporate by reference” the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and information that we file later with the
Commission will automatically update and supersede this information. We
incorporate by reference the documents filed with the Commission listed
below:
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Our
Annual Report on Form 10-K for the year ended December 31, 2008, filed
with the Commission on February 13, 2009, as amended on April 6, 2009, and
as updated by our Current Report on Form 8-K, filed with the Commission on
September 4, 2009;
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Our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009, June
30, 2009 and September 30, 2009, file with the Commission on May 12, 2009,
August 14, 2009 and November 16, 2009,
respectively;
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Our
Current Reports on Form 8-K filed with the Commission on January 5, 2009;
January 8, 2009; January 14, 2009; February 2, 2009; February 11, 2009;
March 9, 2009; March 12, 2009; March 26, 2009; April 3, 2009, as amended
on April 6, 2009 and June 5, 2009; April 8, 2009; April 29, 2009; May 19,
2009; May 26, 2009; May 29, 2009, as amended on June 5, 2009; June 1,
2009; June 29, 2009; June 30, 2009; July 8, 2009; July 13, 2009; August
12, 2009; August 26, 2009; September 4, 2009; September 9, 2009; September
11, 2009; October 7, 2009; October 29, 2009; November 16, 2009; December
2, 2009 and December 11, 2009;
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The
description of our shares of common stock contained in the Registration
Statement on Form S-3 that was filed on April 2, 2004 and any subsequent
amendments thereto, or in a Registration Statement on Form 8-A, updating
such description; and
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All
documents we have filed with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date
of the registration statement and prior to the effectiveness of the
registration statement, as well as subsequent to the date of this
prospectus and prior to the termination of this offering, shall be deemed
to be incorporated by reference into this prospectus and to be a part of
this prospectus from the date of the filing of the
documents.
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You may
request a copy of these filings, at no cost, by contacting our Investor
Relations department at: Genta Incorporated, Attention: Investor Relations, 200
Connell Drive, Berkeley Heights, NJ 07922, (908) 286-9800. Exhibits to the
documents will not be sent, unless those exhibits have specifically been
incorporated by reference in this prospectus.
This
prospectus is part of a registration statement we filed with the Commission. You
should rely only on the information contained in this prospectus. We have
authorized no one to provide you with different information. We are not making
an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.
LEGAL
MATTERS
Legal
matters with respect to the securities offered hereby are being passed upon for
us by Morgan, Lewis and Bockius LLP, Princeton, New Jersey.
EXPERTS
The
consolidated financial statements as of and for the year ended December 31,
2008, incorporated by reference in this prospectus and elsewhere in the
registration statement have been audited by Amper, Politziner & Mattia, LLP,
an independent registered public accounting firm, as indicated in their report
with respect thereto (which report expresses an unqualified opinion on the
consolidated financial statements and includes an explanatory paragraph relating
to Genta Incorporated’s ability to continue as a going concern), and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting and auditing.
The
consolidated financial statements as of December 31, 2007, and for each of the
two years in the period ended December 31, 2007 (prior to the effects of the
2009 reverse stock split), not incorporated by reference in this prospectus and
elsewhere in the registration statement, have been audited by Deloitte &
Touche LLP, an independent registered public accounting firm, as stated in their
report which is incorporated herein by reference from Genta Incorporated’s
Current Report on Form 8-K filed September 4, 2009 (which report expresses
an unqualified opinion on the consolidated financial statements and includes
explanatory paragraphs relating to (1) Genta Incorporated’s ability to continue
as a going concern; (2) the adoption of Financial Accounting Standards Board
Interpretation No. 48, Accounting for Uncertainty in Income
Taxes — an Interpretation of FASB Statement No.
109, effective January 1, 2007;
and (3) Deloitte & Touche LLP was not engaged to audit, review, or apply any
procedures to the adjustments to retrospectively apply the effects of the 2009
reverse stock split and, accordingly, does not express an opinion or any other
form of assurance about whether such retrospective adjustments are appropriate
and have been properly applied. Those retrospective adjustments were audited by
other auditors). Such report has been so incorporated in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.
GENTA
INCORPORATED
$50,000,000.00
DEBT
SECURITIES
WARRANTS
PREFERRED
STOCK
COMMON
STOCK
UNITS
December
23, 2009
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and
Distribution
The
following table sets forth an itemization of the various expenses, all of which
we will pay, in connection with the issuance and distribution of the securities
being registered. All of the amounts shown are estimated except the SEC
Registration Fee.
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SEC
Registration Fee
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$ |
3,565.00 |
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Printing
and Engraving Fees
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25,000.00 |
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Legal
Fees and Expenses
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40,000.00 |
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Accounting
Fees and Expenses
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100,000.00 |
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Transfer
Agent and Registrar Fees
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10,000.00 |
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Trustee’s
Fees and Expenses
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10,000.00 |
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Miscellaneous
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1,435.00 |
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Total
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$ |
190,000.00 |
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Item 15. Indemnification of Directors and
Officers
Our
Certificate of Incorporation includes an indemnification provision under which
we have agreed to indemnify directors and officers of Genta from and against
certain claims arising from or related to future acts or omissions as a director
or officer of Genta. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of Genta pursuant to the foregoing, or otherwise, Genta has been advised
that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
Item 16. Exhibits
The
exhibits to this registration statement are listed in the Exhibit Index to this
registration statement, which Exhibit Index is hereby incorporated by
reference.
Item 17. Undertakings
(a) The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the
effective registration statement; and
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
provided, however, that paragraphs
(a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do not apply if the information required
to be included in a post-effective amendment by these paragraphs is contained in
reports filed with or furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement, or is contained in a
form of prospectus filed pursuant to Rule 424(b) that is part of the
registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(i) Each prospectus filed by the
registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was deemed part of
and included in the registration statement; and
(ii) Each prospectus required to be
filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act of 1933 shall be deemed to be
part of and included in the registration statement as of the earlier of the date
such form of prospectus is first used after effectiveness or the date of the
first contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of the issuer and
any person that is at that date an underwriter, such date shall be deemed to be
a new effective date of the registration statement relating to the securities in
the registration statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such effective date,
supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such
document immediately prior to such effective date.
(5) That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the
securities:
The
undersigned registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(i) Any preliminary prospectus or
prospectus of the undersigned registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned registrant
or used or referred to by the undersigned registrant;
(iii) The portion of any other free
writing prospectus relating to the offering containing material information
about the undersigned registrant or its securities provided by or on behalf of
the undersigned registrant; and
(iv) Any other communication that is
an offer in the offering made by the undersigned registrant to the
purchaser.
(b) The
undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant’s
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan’s annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c)
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the registrant,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(d) The
undersigned registrant hereby undertakes that:
(1) For
purposes of determining any liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For
the purpose of determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(e) If
and when applicable, the undersigned registrant hereby undertakes to file an
application for the purpose of determining the eligibility of the trustee to act
under subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Trust Indenture Act.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Berkeley Heights, State of New Jersey on December 23,
2009.
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GENTA
INCORPORATED
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By:
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/s/ Raymond P. Warrell, Jr.,
M.D.
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Raymond
P. Warrell, Jr., M.D.
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Chairman
and Chief Executive
Officer
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POWER OF
ATTORNEY
We, the
undersigned officers and directors of Genta Incorporated, hereby severally
constitute and appoint Raymond P. Warrell, Jr., M.D. and Gary Siegel, our true
and lawful attorneys, with full power to each of them singly, to sign for us and
in our names in the capacities indicated below, the registration statement on
Form S-3 filed herewith and any and all subsequent amendments to said
registration statement, and generally to do all such things in our names and on
our behalf in our capacities as officers and directors to enable Genta
Incorporated to comply with the provisions of the Securities Act, and all
requirements of the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by our said attorneys, or any of
them, to said registration statement and any and all amendments
thereto.
Pursuant
to the requirements of the Securities Act, this registration statement has been
signed by the following persons in the capacities and on the dates
indicated.
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Signatures
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Title
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Date
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/s/ Raymond P. Warrell, Jr.,
M.D.
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Chairman
and Chief Executive Officer
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December
23, 2009
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Raymond
P. Warrell, Jr., M.D.
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(principal
executive officer)
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/s/ Gary Siegel
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Vice
President, Finance
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December
23, 2009
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Gary
Siegel
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(principal
financial and accounting officer)
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/s/ Christopher P. Parios
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Director
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December
23, 2009
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Christopher
P. Parios
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/s/ Daniel D. Von Hoff,
M.D.
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Director
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December
23, 2009
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Daniel
D. Von Hoff, M.D.
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/s/ Douglas G. Watson
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Director
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December
23, 2009
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Douglas
G. Watson
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EXHIBIT
INDEX
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Exhibit No.
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Description
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1.1
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Form
of Underwriting Agreement *
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4.1
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Restated
Certificate of Incorporation of Genta Incorporated (incorporated by
reference to Exhibit 3(i).1 to our Annual Report on Form 10-K for the year
ended December 31, 1995, Commission File No. 0-19635)
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4.2
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Certificate
of Designations of Series D Convertible Preferred Stock of Genta
Incorporated (incorporated by reference to Exhibit 3(i) to our Current
Report on Form 8-K filed on February 28, 1997, Commission File No.
0-19635)
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4.3
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Certificate
of Amendment of Restated Certificate of Incorporation of Genta
Incorporated (incorporated by reference to Exhibit 3(i).3 to our Annual
Report on Form 10-K for the year ended December 31, 1999, Commission File
No. 0-19635)
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4.4
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Amended
Certificate of Designations of Series D Convertible Preferred Stock of
Genta Incorporated (incorporated by reference to Exhibit 3(i).4 to our
Annual Report on Form 10-K for the year ended December 31, 1999,
Commission File No. 0-19635)
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4.5
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Certificate
of Increase of Series D Convertible Preferred Stock of Genta Incorporated
(incorporated by reference to Exhibit 3(i).5 to our Annual Report on Form
10-K for the year ended December 31, 1999, Commission File No.
0-19635)
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4.6
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Certificate
of Amendment of Restated Certificate of Incorporation of Genta
Incorporated (incorporated by reference to Exhibit 3(i).4 to our Annual
Report on Form 10-K for the year ended December 31, 1998, Commission File
No. 0-19635)
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4.7
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Certificate
of Amendment of Restated Certificate of Incorporation of Genta
Incorporated (incorporated by reference to Exhibit 3(i).3 to our Annual
Report on Form 10-K for the year ended December 31, 1998, Commission File
No. 0-19635)
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4.8
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Certificate
of Amendment of Restated Certificate of Incorporation of Genta
Incorporated (incorporated by reference to Exhibit 3(i).8 to our Annual
Report on Form 10-K for the year ended December 31, 1999, Commission File
No. 0-19635)
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4.9
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Certificate
of Amendment of Restated Certificate of Incorporation of Genta
Incorporated (incorporated by reference to Exhibit 3.1.i to our
Registration Statement on Form S-1, Commission File No.
333-110238)
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4.10
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Certificate
of Amendment of Restated Certificate of Incorporation of Genta
Incorporated (incorporated by reference to Exhibit 3.1.j to our
Registration Statement on Form S-1, Commission File No.
333-110238)
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4.11
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Certificate
of Amendment of Restated Certificate of Incorporation of Genta
Incorporated (incorporated by reference to Exhibit 3.1.k to our Quarterly
Report on Form 10-Q for the quarter ended June 30, 2004, Commission File
No. 0-19635)
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4.12
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Certificate
of Designation of Series G Participating Cumulative Preferred Stock of
Genta Incorporated (incorporated by reference to Exhibit 3.1 to our
Current Report on Form 8-K filed on September 21, 2005, Commission File
No. 0-19635)
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4.13
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Certificate
of Amendment of Restated Certificate of Incorporation of Genta
Incorporated (incorporated by reference to Exhibit 3.1 to our Quarterly
Report on Form 10-Q for the quarter ended June 30, 2006, Commission File
No. 0-19635)
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4.14
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Certificate
of Amendment of Restated Certificate of Incorporation of Genta
Incorporated (incorporated by reference to Exhibit 3.1 to our Current
Report on Form 8-K, filed on July 13, 2007, Commission File No.
0-19635)
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4.15
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Certificate
of Amendment of Restated Certificate of Incorporation of Genta
Incorporated (incorporated by reference to Exhibit 3.1 to our Current
Report on Form 8-K, filed on June 29, 2009, Commission File No.
0-19635)
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4.16
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Amended
and Restated Bylaws of Genta Incorporated (incorporated by reference to
Exhibit 3.2 to our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2004, Commission File No. 0-19635)
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4.17
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Form
of Senior Indenture **
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4.18
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Form
of Subordinated Indenture **
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4.19
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Certificate
of Designations of Preferred Stock *
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4.20
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Form
of Preferred Stock Certificate *
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4.21
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Form
of Warrant *
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5.1
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Opinion
of Morgan, Lewis & Bockius LLP **
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23.1
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Consent
of Amper, Politziner & Mattia, LLP, Independent Registered Public
Accounting Firm **
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23.2
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Consent
of Deloitte & Touche LLP, Independent Registered Public Accounting
Firm **
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23.3
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Consent
of Morgan, Lewis & Bockius LLP (included in Exhibit 5.1)
**
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24.1
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Powers
of Attorney (included on signature page to this Registration Statement)
**
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25.1
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Form
T-1 Statement of Eligibility of Wilmington Trust FSB, as trustee
**
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*
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To be filed, if necessary, by
amendment as an exhibit to a report pursuant to Sections 13(a), 13(c) or
15(d) of the Exchange Act or subsequent Current Report on Form
8-K.
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