What changed in this filing

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Item 1. Legal Proceedings

2023-08-10 compared with 2023-05-11 · 54 added, 41 removed, 1063 unchanged (8% of the section changed)

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Memon’s complaint alleged a six-month longer class period than the complaint originally filed by Mr.

The complaint generally alleges that we and certain of our officers

violated Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making allegedly false and/or misleading statements concerning the New Drug Application for tebipenem HBr in an effort to lead investors to believe that the drug would receive approval from the FDA.

The complaint generally alleges that we and certain of our officers violated Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making allegedly false and/or misleading statements concerning the New Drug Application for tebipenem HBr in an effort to lead investors to believe that the drug would receive approval from the FDA.

The complaint seeks unspecified damages, interest, attorneys’

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Memon filed an amended complaint on December 5, 2022.

The amended complaint generally restates the same allegations contained in the original complaint.

The amended complaint generally restates the same

allegations contained in the original complaint.

The Court held a pre-motion conference on February 22, 2023 and set a date of June 21, 2023 for us to file our fully-briefed motion to dismiss, including Plaintiffs’

opposition, which we filed within that deadline.

We deny any allegations of wrongdoing and intend to vigorously defend against this lawsuit.

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It is possible that even if one or more of our product candidates has a beneficial effect, that effect will not be detected during clinical evaluation as a result of one of the factors listed or otherwise.

Conversely, as a result of the same factors, our clinical trials may indicate an apparent positive effect of a product candidate that is greater than the actual positive effect, if any.

Conversely, as a result of the same factors,

our clinical trials may indicate an apparent positive effect of a product candidate that is greater than the actual positive effect, if any.

Similarly, in our clinical trials, we may fail to detect toxicity of or intolerability of our product candidates or may determine that our product candidates are toxic or not well tolerated when that is not in fact the case.

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Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug or changes in governmental regulations or administrative actions.

results of these trials or tests are unfavorable or are only modestly favorable or if there are safety concerns associated with any of our product candidates, we may:

If we are required to conduct additional clinical trials or other testing of any of our product candidates beyond the trials and testing that we contemplate, if we are unable to successfully complete clinical trials or other testing of our product candidates, if the results of these trials or tests are unfavorable or are only modestly favorable or if there are safety concerns associated with any of our product candidates, we may:

incur additional unplanned costs;

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Clinical failure can occur at any stage of clinical development.

Clinical trials may produce negative or inconclusive results, and we or any

future collaborators may decide, or regulators may require us, to conduct additional clinical trials or preclinical studies.

Clinical trials may produce negative or inconclusive results, and we or any future collaborators may decide, or regulators may require us, to conduct additional clinical trials or preclinical studies.

We will be required to demonstrate through well-controlled clinical trials that our product candidates are safe and effective for use in a diverse population before we can seek marketing approvals for their commercial sale.

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Analyses of preliminary or interim data from our clinical studies are not necessarily predictive of analyses of final data.

Analyses of preliminary and interim data are subject to the risk that one or more of the clinical outcomes may materially change, as more patient data become available and we issue our final clinical study report.

Analyses of preliminary and interim data are subject to the risk that one or more of the clinical outcomes may materially change, as

more patient data become available and we issue our final clinical study report.

Preliminary or interim data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.

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Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.

Our spending on current and future research and development programs and product candidates for specific indications

may not yield any commercially viable product candidates.

Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable product candidates.

If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to the product candidate.

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unforeseen costs and expenses associated with creating an independent sales and marketing organization.

We intend to use collaborators to assist with the commercialization of any of our product candidates, including the GSK License Agreement with GSK for the development and commercialization of tebipenem HBr.

We intend to use collaborators to assist with the commercialization of any of our product candidates, including the GSK License Agreement for the development and commercialization of tebipenem HBr.

As a result of entering into arrangements with third parties to perform sales, marketing and distribution services, our product revenues or the profitability of these product revenues to us would likely be lower than if we were to directly market and sell products in those markets.

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One such product candidate is ceftibuten/clavulanate ("C-Scape") from Cipla Therapeutics, Inc.

If our competitors obtain marketing

approval from the FDA or comparable foreign regulatory authorities for their product candidates more rapidly than us, it could result in our competitors establishing a strong market position before we are able to enter the market.

If our competitors obtain marketing approval from the FDA or comparable foreign regulatory authorities for their product candidates more rapidly than us, it could result in our competitors establishing a strong market position before we are able to enter the market.

There are several IV-administered products marketed for the treatment of infections resistant to first-line therapy for Gram-negative infections, including ceftazidime-avibactam ("Avycaz") from Allergan plc and Pfizer Inc., ceftolozane-tazobactam ("Zerbaxa") from Merck & Co., imipenem/cilastatin and relebactam ("Recarbrio") from Merck & Co., plazomicin ("Zemdri") from Cipla Therapeutics, Inc., cefiderocol ("Fetroja") from Shionogi & Co.

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We have not generated any revenue from the sale of our products and have incurred losses in each year since our inception in 2013.

Our net loss was $13.3 million during the three months ended March 31, 2023.

Our net losses were $11.9 million and $25.2 million during the three and six months ended June 30, 2023, respectively.

All of our product candidates are in development, none have been approved for sale and we may never have a product candidate approved for commercialization.

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We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the issuance of the financial statements included in this report.

Based on our current operating plans, we believe that our cash runway will be sufficient to fund us beyond 2024.

Based on our cash and cash equivalents as of June 30, 2023, and inclusive of the $30.0 million development milestone payment to be received from GSK, as described under “Recent Developments”

above, we believe that our cash runway will be sufficient to fund us into the second half of 2025.

Beyond this point we will need additional funding, which primarily consist of raising additional capital through some combination of equity or debt financings, potential new collaborations or partnerships, additional grant funding and/or reducing cash expenditures.

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Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.

Our prior losses, combined with

expected future losses, have had and will continue to have an adverse effect on our stockholders’

Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’

equity and working capital.

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Based on our current operating plans, we believe that our cash runway will be sufficient to fund us beyond 2024.

Based on our cash and cash equivalents as of June 30, 2023, and inclusive of the $30.0 million development milestone payment to be received from GSK as described under “Recent Developments”

above, we believe that our cash runway will be sufficient to fund us into the second half of 2025.

Our cash forecasts are based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.

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the extent to which we in-license or acquire other products and technologies.

As of March 31, 2023, our non-dilutive sources of funding consisted of an award from BARDA for tebipenem HBr, an award from NIAID for SPR206 and an award from the DoD CDMRP Joint Warfighter Medical Research Program for SPR206.

As of June 30, 2023, our non-dilutive sources of funding consisted of an award from BARDA for tebipenem HBr and an award from NIAID for SPR206.

Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

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The Court held a pre-motion conference on February 22, 2023 and set a date of June 21, 2023 for us to file our fully-briefed motion to dismiss, including Plaintiffs’

opposition, which we filed within that deadline.

We intend to engage in a vigorous defense of the lawsuit.

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In addition, pursuant to our GSK License Agreement, we granted GSK an exclusive royalty-bearing license, with the right to grant sublicenses, under our intellectual property and regulatory documents and a sublicense under certain intellectual property of Meiji and Meiji’s regulatory documents to develop, manufacture and commercialize the GSK Licensed Products in the GSK Territory.

Under the terms of the GSK License Agreement, we received an upfront payment of $66.0 million for GSK to secure rights to the medicine.

Remaining potential payments are milestone based, and are (i) approximately $150.0 million in payments for the achievement of development milestones, (ii) up to $150.0 million in commercial milestone payments, (iii) up to $225.0 million in sales milestone payments, and (iv) tiered low single-digit to low double-digit royalties on net sales of GSK Licensed Products in the GSK Territory.

Under the terms of the GSK License Agreement, we received an upfront payment of $66.0 million for GSK to secure rights to the medicine and are entitled to invoice for a $30.0 million milestone upon achievement of a development milestone in July 2023.

Remaining potential payments are milestone based, and are (i) approximately $120.0 million in payments for the achievement of development milestones, (ii) up to $150.0 million in commercial milestone payments, (iii) up to $225.0 million in sales milestone payments, and (iv) tiered low single-digit to low double-digit royalties (if sales exceed $1.0 billion) tiered on net sales of GSK Licensed Products in the GSK Territory.

We will be responsible for the execution and costs of the follow-up Phase 3 clinical trial of tebipenem HBr.

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For example, in May 2022, we announced that we are suspending current commercialization activities for tebipenem HBr based on feedback from our LCM with the FDA, and during our subsequent Type A meeting, the FDA indicated that positive results from a single additional Phase 3 clinical trial supported by confirmatory nonclinical evidence of efficacy could be sufficient to support the approval of tebipenem HBr for the treatment of cUTI, including pyelonephritis for a limited use indication.

While we have negotiated a Special Protocol Assessment, or SPA, agreement with the FDA relating to our pivotal Phase 3 clinical trial of tebipenem HBr in patients with cUTI, including AP, this agreement does not guarantee approval of tebipenem HBr or any other particular outcome from regulatory review of the clinical trial or the product candidate.

On July 31, 2023, the Company announced it received written agreement from the FDA, under a Special Protocol Assessment ("SPA"), on the design and size of PIVOT-PO, a pivotal Phase 3 clinical trial of tebipenem HBr in patients with cUTI, including AP.

The FDA’s SPA process is designed to allow the FDA to evaluate the proposed design and size of clinical trials that are intended to form the primary basis for determining a drug product’s efficacy, among other eligible protocols.

Upon specific written request by a clinical trial sponsor, the FDA will evaluate the planned protocol and respond to a sponsor’s questions regarding, among other things, primary efficacy endpoints, trial conduct and data analysis.

The FDA ultimately assesses whether the protocol design and planned analysis of the trial adequately address scientific and regulatory requirements for the particular purposes identified by the sponsor, which in this case was that the PIVOT-PO protocol can be considered an adequate and well-controlled study in support of our future resubmission of the tebipenem HBr marketing application.

All agreements between the FDA and the sponsor regarding an SPA must be clearly documented in writing, either in the form of an SPA letter or minutes of a meeting between the sponsor and the FDA at which the SPA agreement was reached.

However, an SPA agreement does not guarantee approval of a product candidate, and even if the FDA agrees to the design, execution and analysis proposed in protocols reviewed under the SPA process, the FDA may revoke or alter its agreement in certain circumstances.

In particular, an SPA agreement is not binding on the FDA if public health concerns emerge that were unrecognized at the time of the SPA agreement, if other new scientific concerns regarding product safety or efficacy arise, if the sponsor fails to comply with the agreed upon trial protocols or modifies such protocols without prior FDA agreement, or if the relevant data, assumptions or information provided by the sponsor change or are found to be false or omit relevant facts.

In addition, even after an SPA agreement is finalized, the SPA agreement may be modified, and such modification will be deemed binding on the FDA review division, except under the circumstances described above, so long as the FDA and the sponsor agree in writing to modify the protocol and such modification is intended to improve the study.

The FDA retains significant latitude and discretion in interpreting the terms of an SPA agreement, as well as the data and results obtained from any study that is the subject of the SPA agreement.

We cannot assure you that our pivotal Phase 3 clinical trial will

succeed, or that the SPA agreement will ultimately be binding on the FDA or will result in any FDA approval of tebipenem HBr.

We expect that the FDA will review our compliance with the protocol that is subject to the SPA agreement, and, as with all NDA reviews, evaluate the results of the trial and conduct inspections of some of the sites where the trial will be conducted.

We cannot assure you that the FDA will deem each of the clinical trial sites to have complied with applicable laws and regulations, and negative inspection results could significantly delay or prevent any potential approval for tebipenem HBr.

If the FDA revokes or alters its agreement under the SPA, or interprets the data collected from the clinical trial differently than we do, the FDA may not deem the data sufficient to support an application for regulatory approval, which could materially adversely affect our business, financial condition and results of operations.

In March 2020, the FDA granted orphan drug designation for SPR720.

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Further, even though we have obtained orphan drug designation for SPR720, or even if we obtain orphan drug designation for other product candidates, such designation may not effectively protect us from competition because different drugs can be approved for the same condition and the same drug can be approved for different conditions and potentially used off-label in the orphan indication.

Even after an orphan drug is approved, the FDA can subsequently approve a competing drug for the same condition for several reasons, including, if the FDA concludes that the later drug is safer or more effective or makes a major

contribution to patient care.

Orphan drug designation neither shortens the development time or regulatory review time of a drug, nor gives the drug any advantage in the regulatory review or approval process.

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The QIDP designation granted by FDA to this drug product and indication also make it eligible for a further five-year extension of that Hatch-Waxman exclusivity.

We cannot predict the interest of potential generic competitors in the future market for such an approved treatment for cUTI, whether someone will attempt to invalidate our period of exclusivity or otherwise force the FDA to take other actions, or how quickly others may seek to come to market with competing products after the applicable exclusivity period ends.

Future product candidates may also receive marketing exclusivity under the FDCA after approval that may similarly be subject to challenge or uncertainty.

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In addition, even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed, may be subject to significant conditions of approval or may impose requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product.

The FDA may also require a REMS as a condition of approval of our product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and

other risk minimization tools.

The FDA closely regulates the post-approval marketing and promotion of drugs to ensure that drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling and regulatory requirements.

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the federal transparency or “sunshine”

requirements under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the "ACA") requires manufacturers of drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report, on an annual basis, to the United States Department of Health and Human Services ("DHHS"), information related to payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists, chiropractors and certain advanced non-physician health care practitioners), teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

advanced non-physician health care practitioners), teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and some state laws require pharmaceutical companies to implement compliance programs and to track and report gifts, compensation and other remuneration provided to physicians, in addition to requiring drug manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and pricing information.

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Among policy makers and payors in the United States and foreign countries, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and expanding access to healthcare.

In the United States, the pharmaceutical industry has been a particular focus of

these efforts and has been significantly affected by major legislative initiatives.

In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

We expect to experience pricing pressures in connection with the sale of any products for which we obtain marketing approval, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative proposals.

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operations, pharmacy networks, or financial arrangements.

efforts to change the PBM industry as it currently exists in the U.S.

Significant efforts to change the PBM industry as it currently exists in the U.S.

may affect the entire pharmaceutical supply chain and the business of other stakeholders, including biopharmaceutical developers like us.

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We may also be required to report pricing information to the United States Department of Veterans Affairs.

If we become subject to these reporting requirements, we will be liable for errors associated with our submission of pricing data, for failure to report pricing data in a timely manner, and for overcharging government payers, which can result in civil monetary penalties under the Medicaid statute, the federal civil False Claims Act, and other laws and regulations.

If we become subject to these reporting requirements, we will be liable for errors associated with our

submission of pricing data, for failure to report pricing data in a timely manner, and for overcharging government payers, which can result in civil monetary penalties under the Medicaid statute, the federal civil False Claims Act, and other laws and regulations.

Additionally, the 2021 Consolidated Appropriations Act signed into law on December 27, 2020 incorporated extensive healthcare provisions and amendments to existing laws, which includes a requirement that all manufacturers of drug products covered under Medicare Part B report the product’s average sales price ("ASP") to DHHS beginning on January 1, 2022, subject to enforcement via civil money penalties.

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Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

For example, over the last several years, the United States

government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities.

For example, over the last several years, the United States government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities.

If a prolonged government shutdown occurs, it could significantly affect the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

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Our industry has experienced a high rate of turnover of management personnel in recent years.

We are highly dependent on the development, regulatory, commercialization and business development expertise of Ankit Mahadevia, M.D., our President and Chief Executive Officer, as well as the other principal members of our management, scientific and clinical team.

We are highly dependent on the development, regulatory, commercialization and business development expertise of Satyavrat Shukla, our President and Chief Executive Officer, as well as the other principal members of our management, scientific and clinical team.

Although we have formal employment agreements with our executive officers, these agreements do not prevent them from terminating their employment with us at any time.

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The closing bid price for our common stock must remain at or above $1.00 per share to comply with the Bid Price Requirement for continued listing.

On August 8, 2022 we received a deficiency letter (the “Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market, LLC (“Nasdaq”) notifying us that, for the preceding 30 consecutive trading days, the closing bid price of our common stock was below the Bid Price Requirement.

days, the closing bid price of our common stock was below the Bid Price Requirement.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had until February 6, 2023 to regain compliance with the Bid Price Requirement.

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In November 2018, we entered into an exchange agreement with BVF to exchange 1,000,000 shares of our common stock previously held by BVF for 1,000 shares of our Series B Convertible Preferred Stock (“Series B Preferred Stock”), each share of which was convertible into 1,000 shares of our common stock, subject to certain ownership restrictions.

In connection with our rights offering, which we launched in February 2020 and closed in early March 2020, we issued 2,287 shares of

our Series C Convertible Preferred Stock (“Series C Preferred Stock”) to BVF, each share of which was convertible into 1,000 shares of our common stock, subject to certain ownership restrictions.

In connection with our rights offering, which we launched in February 2020 and closed in early March 2020, we issued 2,287 shares of our Series C Convertible Preferred Stock (“Series C Preferred Stock”) to BVF, each share of which was convertible into 1,000 shares of our common stock, subject to certain ownership restrictions.

In September 2020, in connection with our underwritten public offering, we issued 3,215,000 shares of our Series D Convertible Preferred Stock (“Series D Preferred Stock”) to BVF, each share of which was convertible on a one-to-one basis into shares of our common stock, subject to certain ownership restrictions.

As of March 31, 2023, all of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred stock has been converted into shares of our common stock.

As of June 30, 2023, all of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred stock has been converted into shares of our common stock.

If any other future holders of our shares of preferred stock convert their shares into common stock, existing holders of our common stock will experience dilution.

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Our outstanding shares of common stock may be freely sold in the public market at any time to the extent permitted by Rules 144 and 701 under the Securities Act of 1933, or to the extent that such shares have already been registered under the Securities Act and are held by non-affiliates of ours.

Moreover, holders of a substantial number of shares of our common stock have rights, subject to conditions, to require us to file registration statements covering their shares or to include their shares in

registration statements that we may file for ourselves or other stockholders.

We also have registered all shares of common stock that we may issue under our equity compensation plans or that are issuable upon exercise of outstanding options.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Legal Proceedings