424B5
Filed
Pursuant to Rule 424(b)(5)
Registration
No. 333-130912
PROSPECTUS
SUPPLEMENT
(To
Prospectus dated February 2, 2006)
2,600,000 Shares
Common
Stock
Progenics Pharmaceuticals, Inc. is offering all of the
2,600,000 shares of common stock offered by this prospectus
supplement.
Our common stock is listed on The Nasdaq Global Market under the
symbol PGNX. On September 19, 2007, the last
reported sales price of our common stock on The Nasdaq Global
Market was $24.35 per share.
Investing in our common stock involves a high degree of risk.
Before buying any shares, you should read the discussion of
material risks of investing in our common stock under the
heading Risk factors beginning on
page S-8
of this prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement or
accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
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Per
share
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Total
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Public offering price
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$
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23.15
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$
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60,190,000
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Underwriting discounts and
commissions
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$
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1.11
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$
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2,886,000
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Proceeds, before expenses, to us
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$
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22.04
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$
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57,304,000
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The underwriters may also purchase up to an additional
390,000 shares of common stock from us at the public
offering price, less the underwriting discounts and commissions,
to cover over-allotments, if any, within 30 days of
September 19, 2007. If the underwriters exercise the option
in full, the total underwriting discounts and commissions
payable by us will be $3,318,900 and the total proceeds before
expenses to us will be $65,899,600.
The underwriters are offering the shares of our common stock as
set forth under Underwriting. Delivery of the shares
of common stock will be made on or about September 25, 2007.
Joint
Book-Running Managers
UBS
Investment Bank CIBC World
Markets Morgan Stanley
The date of this prospectus supplement is September 20,
2007.
You should rely only on the information contained or
incorporated by reference in this prospectus supplement and the
accompanying prospectus. We have not authorized anyone to
provide information different from that contained or
incorporated by reference in this prospectus supplement or the
accompanying prospectus. Neither the delivery of this prospectus
supplement nor the sale of common stock means that information
contained or incorporated by reference in this prospectus
supplement or the accompanying prospectus is correct after the
date of this prospectus supplement. These documents are not an
offer to sell or solicitation of an offer to buy these shares of
common stock in any circumstance under which the offer or
solicitation is unlawful.
TABLE OF
CONTENTS
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Prospectus Supplement
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S-1
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S-8
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S-21
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S-22
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S-23
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S-23
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S-24
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S-25
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S-26
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S-29
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S-29
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S-29
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Base Prospectus dated
February 2, 2006
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1
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1
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1
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1
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2
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3
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4
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4
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5
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S-i
Prospectus
supplement summary
This summary does not contain all of the information that you
should consider before investing in our common stock. You should
read this entire prospectus supplement and the accompanying
prospectus carefully, including information under the caption
Risk factors, as well as the financial statements
and the other information incorporated by reference in this
prospectus supplement and the accompanying prospectus, before
making an investment decision. Unless the context requires
otherwise, the words Progenics, we,
company, us and our refer to
Progenics Pharmaceuticals, Inc.
BUSINESS
OVERVIEW
Progenics Pharmaceuticals, Inc. is a biopharmaceutical company
focusing on the development and commercialization of innovative
therapeutic products to treat the unmet medical needs of
patients with debilitating conditions and life-threatening
diseases. Our principal programs are directed toward
gastroenterology, virology and oncology. Our three formulations
of methylnaltrexone and our PRO 140 product candidate are in
clinical development, and several other product candidates are
in preclinical development.
Gastroenterology
Our most advanced product candidate and likeliest source of
product revenue is methylnaltrexone, which is designed to
reverse the side effects of opioid pain medications while
maintaining pain relief, an important need not currently met by
any approved drugs. In December 2005, we entered into a License
and Co-development Agreement, which we call the Collaboration
Agreement, with Wyeth Pharmaceuticals to develop and
commercialize methylnaltrexone. The Collaboration Agreement
involves the development and commercialization of three
formulations: (i) a subcutaneous formulation, to be used in
patients with opioid-induced constipation; (ii) an
intravenous formulation, to be used in patients with
post-operative ileus; and (iii) an oral formulation, to be
used in patients with opioid-induced constipation. Once
marketing approval for each product is obtained, Wyeth is
responsible for commercializing all three forms of
methylnaltrexone worldwide.
Our work with methylnaltrexone has proceeded farthest as a
treatment for opioid-induced constipation. We have successfully
completed two pivotal phase 3 clinical trials of the
subcutaneous formulation of methylnaltrexone in patients
receiving palliative care, including patients with cancer,
Acquired Immunodeficiency Syndrome and heart disease. We
achieved positive results from our two pivotal phase 3 clinical
trials (studies 301 and 302). All primary and secondary efficacy
endpoints of both of the phase 3 studies were met and were
statistically significant. The drug was generally well tolerated
in both phase 3 trials.
During March 2007, we submitted a New Drug Application, or NDA,
with the United States Food and Drug Administration, or FDA, for
marketing approval in the United States for a subcutaneous
formulation of methylnaltrexone for the treatment of
opioid-induced constipation in patients receiving palliative
care. In May 2007, Wyeth submitted a regulatory marketing
application in the European Union for the same indication. Both
applications were accepted for review in May 2007, which
resulted in the Company earning a total of $9.0 million in
milestone payments under its Collaboration Agreement with Wyeth.
The FDA review is expected to be completed by its Prescription
Drug User Fee Act (PDUFA) date of January 30, 2008. In June
2007, the Company and Wyeth announced positive results in a
three-month extension of the 302 study of a subcutaneous
formulation of methylnaltrexone. In August 2007, Wyeth submitted
a marketing application to the Therapeutic Goods Administration
division of the Australian government.
In September 2007, we and Wyeth announced the commencement of
two additional clinical trials of the subcutaneous formulation
of methylnaltrexone in patients outside of the palliative care
population included in the first NDA submission: a phase 3
trial, conducted by Wyeth, in patients with chronic pain not
related to cancer, such as chronic severe back pain that
requires treatment with opioids; and a
S-1
phase 2 trial, conducted by us, in patients rehabilitating from
an orthopedic surgical procedure in whom opioids are used to
control post-operative pain.
We are also developing an intravenous formulation of
methylnaltrexone in collaboration with Wyeth for the management
of post-operative ileus, a serious condition of the
gastrointestinal tract. We and Wyeth are conducting two global
pivotal phase 3 clinical trials to evaluate the safety and
efficacy of an intravenous formulation of methylnaltrexone for
the treatment of post-operative ileus. In September 2007, we and
Wyeth announced the initiation of an additional phase 3
intravenous methylnaltrexone study, being conducted by Wyeth, in
patients with post-operative ileus following a ventral hernia
repair via laparotomy or laparoscopy.
Under the Collaboration Agreement, Wyeth is also developing an
oral formulation of methylnaltrexone for the treatment of
opioid-induced constipation in patients with chronic pain. Prior
to the Collaboration Agreement, we had completed phase 1
clinical trials of an oral formulation of methylnaltrexone in
healthy volunteers, which indicated that methylnaltrexone was
well tolerated. In August 2006, Wyeth initiated a phase 2
clinical trial to evaluate once-daily dosing of an oral
formulation of methylnaltrexone. Preliminary results from the
phase 2 trial, conducted by Wyeth, showed that the initial oral
formulation of methylnaltrexone was generally well tolerated but
did not exhibit sufficient clinical activity to advance into
phase 3 testing. In March 2007, Wyeth began clinical testing of
a new oral formulation of methylnaltrexone for the treatment of
opioid-induced constipation, and in July 2007 we announced
positive preliminary results from a phase 1 clinical trial of
this new oral formulation of methylnaltrexone.
Wyeth made a $60 million non-refundable upfront payment to
us under the Collaboration Agreement at the time it was entered
into and has made $14.0 million in milestone payments since
that time. Wyeth is obligated to make up to $342.5 million
in additional payments to us upon the achievement of milestones
and contingent events in the development and commercialization
of methylnaltrexone. Costs for the development of
methylnaltrexone incurred by Wyeth or us starting
January 1, 2006 are being paid by Wyeth. We are being
reimbursed for our out-of-pocket development costs by Wyeth and
are receiving reimbursement for our efforts based on the number
of our full time equivalent employees devoted to the development
project. Wyeth is obligated to pay to us royalties on the sale
by Wyeth of methylnaltrexone throughout the world during the
applicable royalty periods.
Virology
In the area of virology, we are developing viral entry
inhibitors, which are molecules designed to inhibit the
virus ability to enter certain types of immune system
cells. PRO 140 is a humanized monoclonal antibody designed to
block Human Immunodeficiency Virus (HIV) infection
by inhibiting binding of HIV to a distinct site on the HIV
co-receptor CCR5, without interfering with the normal function
of CCR5. In mid-2005, we announced positive phase 1 clinical
findings related to PRO 140 in healthy volunteers. A phase 1b
trial of an intravenous formulation of PRO 140 in HIV-infected
patients began in December 2005 and completed enrollment and
dosing in December 2006. On May 1, 2007, we announced
positive results from this phase 1b trial. Patients receiving a
single 5.0 mg/kg dose of PRO 140, which was the highest
dose tested, achieved an average maximum decrease of viral
concentrations in the blood of 98.5% (1.83
log10).
In these patients, reductions in viral load of greater than 90%
(1.0 log10)
on average persisted for two to three weeks after dosing. In
addition, PRO 140 was generally well tolerated in this phase 1b
proof-of-concept study. We have also developed a subcutaneous
formulation of PRO 140 with the goal of developing a
long-acting, self-administered therapy for HIV infection. PRO
140 has been granted Fast Track status from the FDA. We plan to
initiate additional clinical testing of PRO 140 in the second
half of 2007. We are also conducting research into therapeutics
for hepatitis C virus infection that block viral entry into
cells.
S-2
Oncology
We are developing immunotherapies for prostate cancer, including
monoclonal antibodies directed against prostate-specific
membrane antigen, or PSMA, a protein found on the surface of
prostate cancer cells. We are also developing vaccines designed
to stimulate an immune response to PSMA.
We have an active business development function to seek out
promising new products and technologies around which to build
new development programs or enhance existing programs. Our
in-licensing strategy has been the basis for our clinical
development programs for methylnaltrexone, novel HIV
therapeutics and cancer immunotherapies. We own the worldwide
commercialization rights to each of our product candidates
except methylnaltrexone, the commercialization of which is the
responsibility of Wyeth under the Collaboration Agreement.
The following table summarizes the current status of our
principal development programs and product candidates:
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Program/product
candidates
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Indication/use
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Status(1)
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Gastroenterology
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Methylnaltrexone-Subcutaneous
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Treatment of opioid-induced
constipation in patients receiving palliative care
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Applications for marketing
submitted in the U.S, E.U. and Australia
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Methylnaltrexone-Subcutaneous
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Treatment of opioid-induced
constipation in patients receiving opioids for chronic pain
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Phase 3
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Methylnaltrexone-Intravenous
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Management of post-operative
ileus
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Phase 3
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Methylnaltrexone-Oral
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Treatment of opioid-induced
constipation
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Clinical testing of new formulation
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Virology
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HIV
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PRO 140
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Treatment of HIV infection
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Phase 1b completed
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ProVax
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Treatment of HIV infection
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Research
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Other
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Hepatitis C virus (HCV)
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Treatment of HCV infection
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Research
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Oncology
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Prostate Cancer
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PSMA:
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Recombinant protein vaccine
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Immunotherapy for prostate cancer
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Phase 1
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Viral-vector vaccine
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Immunotherapy for prostate cancer
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Preclinical
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Monoclonal antibody-drug conjugate
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Treatment of prostate cancer
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Preclinical
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(1) |
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Research means initial research related to
specific molecular targets, synthesis of new chemical entities,
assay development or screening for the identification of lead
compounds. |
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Preclinical means that a lead compound is
undergoing toxicology, formulation and other testing in
preparation for clinical trials. |
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Phase 1-3 clinical trials are safety and efficacy tests in
humans as follows: |
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Phase 1: Evaluation of safety. |
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Phase 2: Evaluation of safety, dosing and
activity or efficacy. |
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Phase 3: Larger scale evaluation of safety and
efficacy. |
S-3
None of our product candidates has received marketing approval
from the FDA or any other regulatory authority, and we have not
yet received any revenue from the sale of any of our product
candidates. We must receive marketing approval before we can
commercialize any of our product candidates. The actual timing
of events can vary dramatically relative to the expected timing
described in this prospectus supplement, the accompanying
prospectus and the documents incorporated by reference, due to a
variety of factors. See Risk factorsA Setback in our
clinical development programs could adversely affect us
and Our clinical trials could take longer than we
expect.
S-4
The offering
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Common stock we are offering |
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2,600,000 shares |
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Common stock to be outstanding immediately following this
offering |
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29,224,113 shares |
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The Nasdaq Global Market symbol |
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PGNX |
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Use of proceeds |
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We estimate that the net proceeds from this offering after
deducting underwriting discounts and commissions and estimated
expenses payable by us will be approximately $57.1 million.
We anticipate using the net proceeds to fund clinical trials of
our product candidates, for research and development projects
and for other corporate purposes. See Use of
proceeds. |
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Risk Factors |
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Investing in our common stock involves a high degree of risk.
Before buying any shares, you should read the discussion of
material risks of investing in our common stock under the
heading Risk factors beginning on
page S-8
of this prospectus supplement. |
The number of shares of common stock to be outstanding after
this offering is based on 26,624,113 shares outstanding as
of June 30, 2007 and excludes, as of that date:
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Ø
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4,535,154 shares of common stock issuable upon exercise of
stock options outstanding at a weighted average exercise price
of $17.48 per share; and
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Ø
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3,296,196 additional shares of common stock authorized for
issuance under our equity incentive and employee stock purchase
plans.
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Unless we specifically state otherwise, all information
contained in this prospectus supplement assumes that the
underwriters do not exercise their over-allotment option to
purchase from us up to an additional 390,000 shares of
common stock.
S-5
Summary financial
data
The table below presents summary statement of operations and
balance sheet data. The summary financial data for each of the
three years ended December 31, 2004 through
December 31, 2006 are derived from our audited financial
statements for those periods. We derived the summary financial
data as of June 30, 2007 and for the six months ended
June 30, 2006 and 2007 from our unaudited financial
statements. The unaudited financial statement data includes, in
our opinion, all adjustments (consisting only of normal
recurring adjustments) that are necessary for a fair
presentation of our financial position and results of operations
for these periods. Operating results for the six months ended
June 30, 2007 are not necessarily indicative of the results
that may be expected for the fiscal year ended December 31,
2007. This information is only a summary. You should read it in
conjunction with our historical financial statements and related
notes incorporated by reference into this prospectus supplement
and the accompanying prospectus on file with the SEC. For more
details on how you can obtain our SEC reports and other
information, you should read the section of this prospectus
supplement entitled Where you can find additional
information. The as adjusted balance sheet data gives
effect to the issuance and sale of 2,600,000 shares of our
common stock in this offering after deducting the underwriting
discounts and commissions and estimated offering expenses
payable by us.
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Six months
ended
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Years ended
December 31,
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June 30,
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2004
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2005
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|
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2006
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|
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2006
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2007
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|
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(in thousands,
except per share data)
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Statement of operations
data:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Revenues:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract research and development
from collaborator
|
|
|
|
|
|
|
|
|
|
$
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58,415
|
|
|
$
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25,533
|
|
|
$
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38,447
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|
Contract research and development,
joint venture
|
|
$
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2,008
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|
|
$
|
988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research grants and contracts
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|
|
7,483
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|
|
|
8,432
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|
|
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11,418
|
|
|
|
4,526
|
|
|
|
4,606
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|
Product sales
|
|
|
85
|
|
|
|
66
|
|
|
|
73
|
|
|
|
65
|
|
|
|
41
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|
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|
|
|
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|
|
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|
|
|
|
|
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Total revenues
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9,576
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|
|
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9,486
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|
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69,906
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|
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30,124
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|
|
43,094
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Expenses:
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|
|
|
|
|
|
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|
|
|
|
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Research and development
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35,673
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|
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43,419
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61,711
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40,109
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|
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44,792
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In-process research and development
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|
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13,209
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|
|
|
|
|
|
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License feesresearch and
development
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|
|
390
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|
|
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20,418
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|
|
|
390
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|
|
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428
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960
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General and administrative
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12,580
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13,565
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22,259
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9,528
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|
|
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12,471
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Loss in joint venture
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|
|
2,134
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|
|
|
1,863
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|
|
|
121
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|
|
|
121
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|
|
|
|
|
Depreciation and amortization
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|
|
1,566
|
|
|
|
1,748
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|
|
|
1,535
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|
|
|
725
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|
|
|
1,299
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
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|
|
52,343
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|
|
|
81,013
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|
|
|
99,225
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|
|
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50,911
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|
|
|
59,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
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|
|
(42,767
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)
|
|
|
(71,527
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)
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|
|
(29,319
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)
|
|
|
(20,787
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)
|
|
|
(16,428
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)
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|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
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|
|
780
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|
|
|
2,299
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|
|
|
7,701
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|
|
|
3,816
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|
|
|
3,612
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|
Loss on sale of marketable
securities
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|
|
(31
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)
|
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|
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|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income
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|
|
749
|
|
|
|
2,299
|
|
|
|
7,701
|
|
|
|
3,816
|
|
|
|
3,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before income taxes
|
|
|
(42,018
|
)
|
|
|
(69,228
|
)
|
|
|
(21,618
|
)
|
|
|
(16,971
|
)
|
|
|
(12,816
|
)
|
Income taxes
|
|
|
|
|
|
|
(201
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(42,018
|
)
|
|
$
|
(69,429
|
)
|
|
$
|
(21,618
|
)
|
|
$
|
(16,971
|
)
|
|
$
|
(12,816
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share (basic and
diluted)
|
|
$
|
(2.48
|
)
|
|
$
|
(3.33
|
)
|
|
$
|
(0.84
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
(0.48
|
)
|
S-6
|
|
|
|
|
|
|
|
|
|
|
June 30,
2007
|
|
|
|
Actual
|
|
|
As
adjusted
|
|
|
|
|
|
(in
thousands)
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and
marketable securities
|
|
$
|
139,118
|
|
|
$
|
196,257
|
|
Working capital
|
|
|
74,081
|
|
|
|
131,220
|
|
Total assets
|
|
|
156,523
|
|
|
|
213,662
|
|
Long-term debt
|
|
|
|
|
|
|
|
|
Accumulated deficit
|
|
|
(223,174
|
)
|
|
|
(223,174
|
)
|
Total stockholders equity
|
|
|
108,037
|
|
|
|
165,176
|
|
S-7
Investing in our common stock involves a high degree of risk.
In addition to the other information contained or incorporated
by reference in this prospectus supplement and the accompanying
prospectus, you should carefully consider the risks described
below before purchasing our common stock. If any of the
following risks actually occurs, our business could be
materially harmed, and our financial condition and results of
operations could be materially and adversely affected. As a
result, the trading price of our common stock could decline, and
you might lose all or part of your investment.
Our product
development programs are inherently risky.
We are subject to the risks of failure inherent in the
development of product candidates based on new technologies.
Methylnaltrexone, which is designed to reverse certain side
effects induced by opioids and to treat post-operative ileus and
is being developed through a collaboration with Wyeth, is based
on a novel method of action that has not yet been proven to be
safe or effective. No drug with methylnaltrexones method
of action has ever received marketing approval. Additionally,
some of our HIV product candidates are designed to be effective
by blocking viral entry. To our knowledge, no drug designed to
treat HIV infection by blocking viral entry (with one exception)
has been approved for marketing in the U.S. Our other
research and development programs, including those related to
PSMA, involve similarly novel approaches to human therapeutics.
Consequently, there is little precedent for the successful
commercialization of products based on our technologies. There
are a number of technological challenges that we must overcome
to complete most of our development efforts. We may not be able
to develop successfully any of our products.
We have granted
to Wyeth the exclusive rights to develop and commercialize
methylnaltrexone, our lead product candidate, and our resulting
dependence upon Wyeth exposes us to significant risks.
In December 2005, we entered into a license and co-development
agreement with Wyeth. Under this agreement, we granted to Wyeth
the exclusive worldwide right to develop and commercialize
methylnaltrexone, our lead product candidate. As a result, we
are dependent upon Wyeth to perform and fund development,
including clinical testing, to make certain regulatory filings
and to manufacture and market products containing
methylnaltrexone. Our collaboration with Wyeth may not be
scientifically, clinically or commercially successful.
Any revenues from the sale of methylnaltrexone, if approved for
marketing by the FDA, will depend almost entirely upon the
efforts of Wyeth. Wyeth has significant discretion in
determining the efforts and resources it applies to sales of the
methylnaltrexone products and may not be effective in marketing
such products. In addition, Wyeth is a large, diversified
pharmaceutical company with global operations and its own
corporate objectives, which may not be consistent with our best
interests. For example, Wyeth may change its strategic focus or
pursue alternative technologies in a manner that results in
reduced revenues to us. In addition, we will receive milestone
and contingent payments from Wyeth only if methylnaltrexone
achieves specified clinical, regulatory and commercialization
milestones, and we will receive royalty payments from Wyeth only
if methylnaltrexone receives regulatory approval and is
commercialized by Wyeth. Many of these milestone events will
depend upon the efforts of Wyeth. We may not receive any
milestone, contingent or royalty payments from Wyeth.
The Collaboration Agreement extends, unless terminated earlier,
on a
country-by-country
and
product-by-product
basis, until the last-to-expire royalty period, as defined, for
any product. Progenics may terminate the Collaboration Agreement
at any time upon 90 days of written notice to Wyeth
S-8
Risk
factors
(30 days in the case of breach of a payment obligation)
upon material breach that is not cured. Wyeth may, with or
without cause, following the second anniversary of the first
commercial sale, as defined, of the first commercial product in
the U.S., terminate the Collaboration Agreement by providing
Progenics with at least 360 days prior written notice of
such termination. Wyeth may also terminate the agreement
(i) upon 30 days written notice following one or more
serious safety or efficacy issues that arise, as defined, and
(ii) at any time, upon 90 days written notice of a
material breach that is not cured by Progenics. Upon termination
of the Collaboration Agreement, the ownership of the license we
granted to Wyeth will depend on the party that initiates the
termination and the reason for the termination.
If our relationship with Wyeth were to terminate, we would have
to either enter into a license and co-development agreement with
another party or develop and commercialize methylnaltrexone
ourselves. We may not be able to enter into such an agreement
with another suitable company on acceptable terms or at all. To
develop and commercialize methylnaltrexone on our own, we would
have to develop a sales and marketing organization and a
distribution infrastructure, neither of which we currently have.
Developing these resources would be an expensive and lengthy
process and would have a material adverse effect on our revenues
and profitability.
Moreover, a termination of our relationship with Wyeth could
seriously compromise the development program for
methylnaltrexone. For example, we could experience significant
delays in the development of methylnaltrexone and would have to
assume full funding and other responsibility for further
development and eventual commercialization.
Any of these outcomes would result in delays in our ability to
distribute methylnaltrexone and would increase our expenses,
which would have a material adverse effect on our business,
results of operations and financial condition.
Our collaboration with Wyeth is multi-faceted and involves a
complex sharing of control over decisions, responsibilities,
costs and benefits. There are numerous potential sources of
disagreement between us and Wyeth, including with respect to
product development, marketing strategies, manufacturing and
supply issues and rights relating to intellectual property.
Wyeth has significantly greater financial and managerial
resources than we do, which it could draw upon in the event of a
dispute. A disagreement between Wyeth and us could lead to
lengthy and expensive litigation or other dispute resolution
proceedings as well as to extensive financial and operational
consequences to us, and have a material adverse effect on our
business, results of operations and financial condition.
If testing does
not yield successful results, our products will not be
approved.
We will need to obtain regulatory approval before we can market
our product candidates. To obtain marketing approval from
regulatory authorities, we or our collaborators must demonstrate
a products safety and efficacy through extensive
preclinical and clinical testing. Numerous adverse events may
arise during, or as a result of, the testing process, including
the following:
|
|
Ø
|
the results of preclinical studies may be inconclusive, or they
may not be indicative of results that will be obtained in human
clinical trials;
|
|
Ø
|
potential products may not have the desired efficacy or may have
undesirable side effects or other characteristics that preclude
marketing approval or limit their commercial use if approved;
|
|
Ø
|
after reviewing test results, we or our collaborators may
abandon projects, which we previously believed to be promising;
and
|
|
Ø
|
we, our collaborators or regulators may suspend or terminate
clinical trials if we or they believe that the participating
subjects or patients are being exposed to unacceptable health
risks.
|
S-9
Risk
factors
Clinical testing is very expensive and can take many years.
Results attained in early human clinical trials may not be
indicative of results that are obtained in later clinical
trials. In addition, many of our products, such as PRO 140 and
the PSMA product candidates, are at an early stage of
development. The successful commercialization of early stage
products will require significant further research, development,
testing, approvals by regulators and additional investment. Our
products in the research or preclinical development stage may
not yield results that would permit or justify clinical testing.
Our failure to adequately demonstrate the safety and efficacy of
a product under development would delay or prevent marketing
approval of the product, which could adversely affect our
operating results and credibility.
A setback in our
clinical development programs could adversely affect
us.
We have successfully completed two pivotal phase 3 clinical
trials of subcutaneous methylnaltrexone for the treatment of
opioid-induced constipation in patients receiving palliative
care. We submitted a New Drug Application to the FDA in March
2007 to market subcutaneous methylnaltrexone. We and Wyeth have
initiated two global pivotal phase 3 clinical trials to evaluate
the safety and efficacy of intravenous methylnaltrexone for the
treatment of post-operative ileus. We had completed phase 1
clinical trials of oral methylnaltrexone in healthy volunteers
prior to our Collaboration Agreement with Wyeth. Wyeth is
responsible for the worldwide development of oral
methylnaltrexone. Wyeth has conducted certain additional phase 1
clinical trials of oral methylnaltrexone in chronic pain
patients who experience opioid-induced constipation and in
August 2006 initiated a phase 2 clinical trial to evaluate
once-daily dosing of oral methylnaltrexone. Preliminary results
from the phase 2 trial, conducted by Wyeth, showed that the
initial formulation of oral methylnaltrexone was generally well
tolerated but did not exhibit sufficient clinical activity to
advance into phase 3 testing. In March 2007, Wyeth began
clinical testing of a new oral formulation of methylnaltrexone
for the treatment of opioid-induced constipation and in July
2007 announced preliminary results from a phase 1 clinical trial
of this new formulation. In September 2007, we and Wyeth
announced the commencement of three additional clinical trials
of methylnaltrexone in patients outside of the palliative care
population included in the first NDA submission.
If the results of any of these ongoing trials or of other future
trials of methylnaltrexone are not satisfactory, or if we
encounter problems enrolling patients, or if clinical trial
supply issues or other difficulties arise, our entire
methylnaltrexone development program could be adversely
affected, resulting in delays in commencing or completing
clinical trials or in making our regulatory filing for marketing
approval. The need to conduct additional clinical trials or
significant revisions to our clinical development plan would
lead to delays in filing for the regulatory approvals necessary
to market methylnaltrexone. If the clinical trials indicate a
serious problem with the safety or efficacy of a
methylnaltrexone product, then Wyeth has the right under our
license and co-development agreement to terminate the agreement
or to stop the development or commercialization of the affected
products. Since methylnaltrexone is our most clinically advanced
product, any setback of these types would have a material
adverse effect on our stock price and business.
We have announced positive phase 1b clinical findings related to
PRO 140. If the results of our future clinical studies of PRO
140 or the preclinical and clinical studies involving the PSMA
vaccine and antibody candidates are not satisfactory, we would
need to reconfigure our clinical trial programs to conduct
additional trials or abandon the program involved.
We have a history
of operating losses, and we may never be profitable.
We have incurred substantial losses since our inception. As of
June 30, 2007, we had an accumulated deficit of
$223.2 million. We have derived no significant revenues
from product sales or royalties. We
S-10
Risk
factors
may not achieve significant product sales or royalty revenue for
a number of years, if ever. We expect to incur additional
operating losses in the future, which could increase
significantly as we expand our clinical trial programs and other
product development efforts.
Our ability to achieve and sustain profitability is dependent in
part on obtaining regulatory approval to market our products and
then commercializing, either alone or with others, our products.
We may not be able to develop and commercialize products.
Moreover, our operations may not be profitable even if any of
our products under development are commercialized.
We are likely to
need additional financing, but our access to capital funding is
uncertain.
As of June 30, 2007, we had cash, cash equivalents and
marketable securities, including non-current portion, totaling
$139.1 million. During the six months ended June 30,
2007, we had a net loss of $12.8 million and cash used in
operating activities was $12.4 million. Our net loss is
expected to increase in the future.
Under our agreement with Wyeth, Wyeth is responsible for all
future development and commercialization costs relating to
methylnaltrexone starting January 1, 2006. As a result,
although our spending on methylnaltrexone has increased and is
expected to continue to increase significantly from the amounts
expended in 2006, our net expenses for methylnaltrexone have
been and will continue to be reduced.
With regard to our other product candidates, however, we expect
that we will continue to incur significant expenditures for
their development, and we do not have committed external sources
of funding for most of these projects. These expenditures will
be funded from our cash on hand, or we may seek additional
external funding for these expenditures, most likely through
collaborative agreements, or other license or sale transactions,
with one or more pharmaceutical companies, through the issuance
and sale of securities or through additional government grants
or contracts. We cannot predict with any certainty when we will
need additional funds or how much we will need or if additional
funds will be available to us. Our need for future funding will
depend on numerous factors, many of which are outside our
control.
Our access to capital funding is uncertain. We may not be able
to obtain additional funding on acceptable terms, or at all. Our
inability to raise additional capital on terms reasonably
acceptable to us would seriously jeopardize the future success
of our business.
If we raise funds by issuing and selling securities, it may be
on terms that are not favorable to our existing stockholders. If
we raise additional funds by selling equity securities, our
current stockholders will be diluted, and new investors could
have rights superior to our existing stockholders. If we raise
funds by selling debt securities, we could be subject to
restrictive covenants and significant repayment obligations.
Our clinical
trials could take longer than we expect.
Although for planning purposes we forecast the commencement and
completion of clinical trials, and have included many of those
forecasts in reports filed with the SEC and in other public
disclosures, the actual timing of these events can vary
dramatically. For example, we have experienced delays in our
methylnaltrexone clinical development program in the past as a
result of slower than anticipated patient enrollment. These
delays may recur. Delays can be caused by, among other things:
|
|
Ø
|
deaths or other adverse medical events involving patients or
subjects in our clinical trials;
|
|
Ø
|
regulatory or patent issues;
|
S-11
Risk
factors
|
|
Ø
|
interim or final results of ongoing clinical trials;
|
|
Ø
|
failure to enroll clinical sites as expected;
|
|
Ø
|
competition for enrollment from clinical trials conducted by
others in similar indications;
|
|
Ø
|
scheduling conflicts with participating clinicians and clinical
institutions; and
|
|
Ø
|
manufacturing problems.
|
In addition, we may need to delay or suspend our clinical trials
if we are unable to obtain additional funding when needed.
Clinical trials involving our product candidates may not
commence or be completed as forecasted.
Moreover, we have limited experience in conducting clinical
trials, and we rely on others to conduct, supervise or monitor
some or all aspects of some of our clinical trials. In addition,
certain clinical trials for our products may be conducted by
government-sponsored agencies, and consequently will be
dependent on governmental participation and funding. Under our
agreement with Wyeth relating to methylnaltrexone, Wyeth has the
responsibility to conduct some of the clinical trials for that
product candidate, including all trials outside of the United
States. We will have less control over the timing and other
aspects of these clinical trials than if we conducted them
entirely on our own.
As a result of these and other factors, our clinical trials may
not commence or be completed as we expect or may not be
conducted successfully, in which event investors
confidence in our ability to develop products may be impaired
and our stock price may decline.
We are subject to
extensive regulation, which can be costly and time consuming and
can subject us to unanticipated fines and delays.
We and our products are subject to comprehensive regulation by
the FDA in the U.S. and by comparable authorities in other
countries. These national agencies and other federal, state and
local entities regulate, among other things, the preclinical and
clinical testing, safety, approval, manufacture, labeling,
marketing, export, storage, record keeping, advertising and
promotion of pharmaceutical products. If we violate regulatory
requirements at any stage, whether before or after marketing
approval is obtained, we may be subject to forced removal of a
product from the market, product seizure, civil and criminal
penalties and other adverse consequences.
Our products do
not yet have, and may never obtain, the regulatory approvals
needed for marketing.
None of our products has been approved by applicable regulatory
authorities for marketing. The process of obtaining FDA and
foreign regulatory approvals often takes many years and can vary
substantially based upon the type, complexity and novelty of the
products involved. We have had only limited experience in filing
and pursuing applications and other submissions necessary to
gain marketing approvals. Our products under development may
never obtain the marketing approval from the FDA or any other
regulatory authority necessary for commercialization.
Even if our products receive regulatory approval:
|
|
Ø
|
they might not obtain labeling claims necessary to make the
product commercially viable (in general, labeling claims define
the medical conditions for which a drug product may be marketed,
and are therefore very important to the commercial success of a
product);
|
|
Ø
|
we or our collaborators might be required to undertake
post-marketing trials to verify the products efficacy or
safety;
|
S-12
Risk
factors
|
|
Ø
|
we, our collaborators or others might identify side effects
after the product is on the market, or we or our collaborators
might experience manufacturing problems, either of which could
result in subsequent withdrawal of marketing approval,
reformulation of the product, additional preclinical testing or
clinical trials, changes in labeling of the product or the need
for additional marketing applications; and
|
|
Ø
|
we and our collaborators will be subject to ongoing FDA
obligations and continuous regulatory review.
|
If our products fail to receive marketing approval or lose
previously received approvals, our financial results would be
adversely affected.
Even if our
products obtain marketing approval, they might not be accepted
in the marketplace.
The commercial success of our products will depend upon their
acceptance by the medical community and third party payers as
clinically useful, cost effective and safe. If health care
providers believe that patients can be managed adequately with
alternative, currently available therapies, they may not
prescribe our products, especially if the alternative therapies
are viewed as more effective, as having a better safety or
tolerability profile, as being more convenient to the patient or
health care providers or as being less expensive. For
pharmaceuticals administered in an institutional setting, the
ability of the institution to be adequately reimbursed could
also play a significant role in demand for our products. Even if
our products obtain marketing approval, they may not achieve
market acceptance. If any of our products do not achieve market
acceptance, we will likely lose our entire investment in that
product.
Marketplace
acceptance will depend in part on competition in our industry,
which is intense.
The extent to which any of our products achieves market
acceptance will depend on competitive factors. Competition in
our industry is intense, and it is accentuated by the rapid pace
of technological development. There are products currently in
the market that will compete with the products that we are
developing, including AIDS drugs and chemotherapy drugs for
treating cancer. As described below, Adolor Corporation is
developing a drug that would compete with methylnaltrexone. Many
of our competitors have substantially greater research and
development capabilities and experience and greater
manufacturing, marketing, financial and managerial resources
than we do. These competitors may develop products that are
superior to those we are developing and render our products or
technologies non-competitive or obsolete. If our product
candidates receive marketing approval but cannot compete
effectively in the marketplace, our operating results and
financial position would suffer.
One or more
competitors developing an opioid antagonist may reach the market
ahead of us and adversely affect the market potential for
methylnaltrexone.
We are aware that Adolor Corporation, in collaboration with
Glaxo Group Limited, or Glaxo, a subsidiary of GlaxoSmithKline
plc, is developing an opioid antagonist,
Enteregtm
(alvimopan), for post-operative ileus, which has completed
phase 3 clinical trials, and for opioid-induced bowel
dysfunction, which is in phase 3 clinical trials. Entereg
is further along in the clinical development process than
methylnaltrexone, and Adolor Corporation has received an
approvable letter from the FDA for Entereg regarding the
treatment of post-operative ileus. If Entereg reaches the market
before methylnaltrexone, it could achieve a significant
competitive advantage relative to our product. In any event, the
considerable marketing and sales capabilities of Glaxo may
impair our ability to penetrate the market.
Under the terms of our collaboration with Wyeth with respect to
methylnaltrexone, Wyeth is developing the oral form of
methylnaltrexone worldwide. We are leading the
U.S. development of the subcutaneous and intravenous forms
of methylnaltrexone, while Wyeth is leading development of these
parenteral products outside the U.S. Decisions regarding
the timelines for development of the three
S-13
Risk
factors
methylnaltrexone formulations are being be made by a Joint
Development Committee, and endorsed by the Joint Steering
Committee, each committee formed under the terms of the license
and co-development agreement, consisting of members from both
Wyeth and Progenics.
If we are unable
to negotiate collaborative agreements, our cash burn rate could
increase and our rate of product development could
decrease.
Our business strategy includes as an element entering into
collaborations with pharmaceutical and biotechnology companies
to develop and commercialize our products and technologies. We
entered into such a collaboration with Wyeth. However, we may
not be successful in negotiating additional collaborative
arrangements. If we do not enter into new collaborative
arrangements, we would have to devote more of our resources to
clinical product development and product-launch activities, and
our cash burn rate would increase or we would need to take steps
to reduce our rate of product development.
If we do not
remedy our failure to achieve milestones or satisfy conditions
regarding some of our product candidates, we may not maintain
our rights under our licenses relating to these product
candidates.
We are required to make substantial cash payments, achieve
specified milestones and satisfy other conditions, including
filing for and obtaining marketing approvals and introducing
products, to maintain rights under our intellectual property
licenses. We may not be able to maintain our rights under these
licenses.
If we do not comply with our obligations under our license
agreements, the licensors may terminate them. Termination of any
of our licenses could result in our losing our rights to, and
therefore being unable to commercialize, any related product.
We have limited
manufacturing capabilities, which could adversely impact our
ability to commercialize products.
We have limited manufacturing capabilities, which may result in
increased costs of production or delay product development or
commercialization. In order to commercialize our product
candidates successfully, we or our collaborators must be able to
manufacture products in commercial quantities, in compliance
with regulatory requirements, at acceptable costs and in a
timely manner. The manufacture of our product candidates can be
complex, difficult to accomplish even in small quantities,
difficult to
scale-up for
large-scale production and subject to delays, inefficiencies and
low yields of quality products. The cost of manufacturing some
of our products may make them prohibitively expensive. If
adequate supplies of any of our product candidates or related
materials are not available to us on a timely basis or at all,
our clinical trials could be seriously delayed, since these
materials are time-consuming to manufacture and cannot be
readily obtained from third-party sources.
We operate pilot-scale manufacturing facilities for the
production of vaccines and recombinant proteins. We believe
that, for these types of product candidates, these facilities
will be sufficient to meet our initial needs for clinical
trials. However, these facilities may be insufficient for
late-stage clinical trials for these types of product
candidates, and would be insufficient for commercial-scale
manufacturing requirements. We may be required to expand further
our manufacturing staff and facilities, obtain new facilities or
contract with corporate collaborators or other third parties to
assist with production.
In the event that we decide to establish a commercial-scale
manufacturing facility, we will require substantial additional
funds and will be required to hire and train significant numbers
of employees and comply with applicable regulations, which are
extensive. We may not be able to build a manufacturing
S-14
Risk
factors
facility that both meets regulatory requirements and is
sufficient for our clinical trials or commercial-scale
manufacturing.
We have entered into arrangements with third parties for the
manufacture of some of our products. Our third-party sourcing
strategy may not result in a cost-effective means for
manufacturing products. In employing third-party manufacturers,
we will not control many aspects of the manufacturing process,
including compliance by these third parties with the FDAs
current Good Manufacturing Practices and other regulatory
requirements. We may not be able to obtain adequate supplies
from third-party manufacturers in a timely fashion for
development or commercialization purposes, and commercial
quantities of products may not be available from contract
manufacturers at acceptable costs.
We are dependent
on our patents and other intellectual property rights. The
validity, enforceability and commercial value of these rights
are highly uncertain.
Our success is dependent in part on obtaining, maintaining and
enforcing patent and other intellectual property rights. The
patent position of biotechnology and pharmaceutical firms is
highly uncertain and involves many complex legal and technical
issues. There is no clear policy involving the breadth of claims
allowed, or the degree of protection afforded, under patents in
this area. Accordingly, the patent applications owned by or
licensed to us may not result in patents being issued. We are
aware of other groups that have patent applications or patents
containing claims similar to or overlapping those in our patents
and patent applications. We do not expect to know for several
years the relative strength or scope of our patent position as
compared to these other groups. Furthermore, patents that we own
or license may not enable us to preclude competitors from
commercializing drugs, and consequently may not provide us with
any meaningful competitive advantage.
We own or have licenses to several issued patents. However, the
issuance of a patent is not conclusive as to its validity or
enforceability. The validity or enforceability of a patent after
its issuance by the patent office can be challenged in
litigation. Our patents may be successfully challenged.
Moreover, we may incur substantial costs in litigation to uphold
the validity of patents or to prevent infringement. If the
outcome of litigation is adverse to us, third parties may be
able to use our patented invention without payment to us.
Moreover, third parties may avoid our patents through design
innovation.
Most of our product candidates, including methylnaltrexone, PRO
140 and our PSMA and HCV program products, incorporate to some
degree intellectual property licensed from third parties. We can
lose the right to patents and other intellectual property
licensed to us if the related license agreement is terminated
due to a breach by us or otherwise. Our ability, and that of our
collaboration partners, to commercialize products incorporating
licensed intellectual property would be impaired if the related
license agreements were terminated.
Generally, we have the right to defend and enforce patents
licensed by us, either in the first instance or if the licensor
chooses not to do so. In addition, our license agreement with
the University of Chicago regarding methylnaltrexone gives us
the right to prosecute and maintain the licensed patents. We
bear the cost of engaging in some or all of these activities
with respect to our license agreements with the University of
Chicago for methylnaltrexone. Under our Collaboration Agreement,
Wyeth has the right, at its expense, to defend and enforce the
methylnaltrexone patents licensed to Wyeth by us. With most of
our other license agreements, the licensor bears the cost of
engaging in all of these activities, although we may share in
those costs under specified circumstances. Historically, our
costs of defending patent rights, both our own and those we
license, have not been material.
We also rely on unpatented technology, trade secrets and
confidential information. Third parties may independently
develop substantially equivalent information and techniques or
otherwise gain access to our technology or disclose our
technology, and we may be unable to effectively protect our
rights in
S-15
Risk
factors
unpatented technology, trade secrets and confidential
information. We require each of our employees, consultants and
advisors to execute a confidentiality agreement at the
commencement of an employment or consulting relationship with
us. However, these agreements may not provide effective
protection in the event of unauthorized use or disclosure of
confidential information.
If we infringe
third-party patent or other intellectual property rights, we may
need to alter or terminate a product development
program.
There may be patent or other intellectual property rights
belonging to others that require us to alter our products, pay
licensing fees or cease certain activities. If our products
infringe patent or other intellectual property rights of others,
the owners of those rights could bring legal actions against us
claiming damages and seeking to enjoin manufacturing and
marketing of the affected products. If these legal actions are
successful, in addition to any potential liability for damages,
we could be required to obtain a license in order to continue to
manufacture or market the affected products. We may not prevail
in any action brought against us, and any license required under
any rights that we infringe may not be available on acceptable
terms or at all. We are aware of intellectual property rights
held by third parties that relate to products or technologies we
are developing. For example, we are aware of other groups
investigating methylnaltrexone and other peripheral opioid
antagonists, PSMA or related compounds and CCR5 monoclonal
antibodies and of patents held, and patent applications filed,
by these groups in those areas. While the validity of these
issued patents, patentability of these pending patent
applications and applicability of any of them to our programs
are uncertain, if asserted against us, any related patent or
other intellectual property rights could adversely affect our
ability to commercialize our products.
The research, development and commercialization of a
biopharmaceutical often involve alternative development and
optimization routes, which are presented at various stages in
the development process. The preferred routes cannot be
predicted at the outset of a research and development program
because they will depend on subsequent discoveries and test
results. There are numerous third-party patents in our field,
and we may need to obtain a license to a patent in order to
pursue the preferred development route of one or more of our
products. The need to obtain a license would decrease the
ultimate profitability of the applicable product. If we cannot
negotiate a license, we might have to pursue a less desirable
development route or terminate the program altogether.
We are dependent
upon third parties for a variety of functions. These
arrangements may not provide us with the benefits we
expect.
We rely in part on third parties to perform a variety of
functions. We are party to numerous agreements which place
substantial responsibility on clinical research organizations,
consultants and other service providers for the development of
our products. We also rely on medical and academic institutions
to perform aspects of our clinical trials of product candidates.
In addition, an element of our research and development strategy
is to in-license technology and product candidates from academic
and government institutions in order to minimize investments in
early research. Furthermore, we entered into an agreement under
which we will depend on Wyeth for the commercialization and
development of methylnaltrexone, our lead product candidate. We
may not be able to maintain any of these relationships or
establish new ones on beneficial terms. Furthermore, we may not
be able to enter new arrangements without undue delays or
expenditures, and these arrangements may not allow us to compete
successfully.
S-16
Risk
factors
We lack sales and
marketing infrastructure and related staff, which will require
significant investment to establish and in the meantime may make
us dependent on third parties for their expertise in this
area.
We have no established sales, marketing or distribution
infrastructure. If we receive marketing approval, significant
investment, time and managerial resources will be required to
build the commercial infrastructure required to market, sell and
support a pharmaceutical product. Should we choose to
commercialize any product directly, we may not be successful in
developing an effective commercial infrastructure or in
achieving sufficient market acceptance. Alternatively, we may
choose to market and sell our products through distribution,
co-marketing, co-promotion or licensing arrangements with third
parties. We may also consider contracting with a third party
professional pharmaceutical detailing and sales organization to
perform the marketing function for our products. Under our
license and co-development agreement with Wyeth, Wyeth is
responsible for commercializing methylnaltrexone. To the extent
that we enter into distribution, co-marketing, co-promotion,
detailing or licensing arrangements for the marketing and sale
of our other products, any revenues we receive will depend
primarily on the efforts of third parties. We will not control
the amount and timing of marketing resources these third parties
devote to our products.
If we lose key
management and scientific personnel on whom we depend, our
business could suffer.
We are dependent upon our key management and scientific
personnel. In particular, the loss of Dr. Paul J. Maddon,
our Chief Executive Officer and Chief Science Officer, could
cause our management and operations to suffer. Our employment
agreement with Dr. Maddon, the initial term of which ran
through June 30, 2005, was automatically renewed for an
additional period of two years through June 30, 2007, but
has now expired. Dr. Maddon continues to be employed by us
and is receiving compensation from us at the same rate as was
specified in the expired contract. We are in discussions with
Dr. Maddon regarding a new employment agreement. Employment
agreements do not assure the continued employment of an
employee. We maintain key-man life insurance on Dr. Maddon
in the amount of $2.5 million.
Competition for qualified employees among companies in the
biopharmaceutical industry is intense. Our future success
depends upon our ability to attract, retain and motivate highly
skilled employees. In order to commercialize our products
successfully, we may be required to expand substantially our
personnel, particularly in the areas of manufacturing, clinical
trials management, regulatory affairs, business development and
marketing. We may not be successful in hiring or retaining
qualified personnel.
If we are unable
to obtain sufficient quantities of the raw and bulk materials
needed to make our products, our product development and
commercialization could be slowed or stopped.
In accordance with our collaboration agreement with Wyeth, we
have transferred to Wyeth the responsibility for manufacturing
methylnaltrexone for clinical and commercial use. In addition,
we currently obtain supplies of critical raw materials used in
production of other of our product candidates from single
sources. We do not have long-term contracts with any of these
other suppliers. Wyeth may not be able to fulfill its
manufacturing obligations, either on its own or through
third-party suppliers. Furthermore, our existing arrangements
with suppliers for our other product candidates may not result
in the supply of sufficient quantities of our product candidates
needed to accomplish our clinical development programs, and we
may not have the right or capability to manufacture sufficient
quantities of these products to meet our needs if our suppliers
are unable or unwilling to do so. Any delay or
S-17
Risk
factors
disruption in the availability of raw materials would slow or
stop product development and commercialization of the relevant
product.
A substantial
portion of our funding comes from federal government grants and
research contracts. We cannot rely on these grants or contracts
as a continuing source of funds.
A substantial portion of our revenues to date has been derived
from federal government grants and research contracts. During
2006 and 2007, we were awarded, in the aggregate, approximately
$2.5 million in NIH grants. During 2005, we were also
awarded a $3.0 million and a $10.1 million grant from
the NIH to partially fund our hepatitis C virus and
PRO 140 programs, respectively. Also, in 2004 we were
awarded, in the aggregate, approximately $9.2 million in
NIH grants and research contracts in addition to previous
years awards. We cannot rely on grants or additional
contracts as a continuing source of funds. Moreover, funds
available under these grants and contracts must be applied by us
toward the research and development programs specified by the
government rather than for all our programs generally. For
example, the $28.6 million contract awarded to us by the
NIH in September 2003 must be used by us in furtherance of our
efforts to develop an HIV vaccine. The governments
obligation to make payments under these grants and contracts is
subject to appropriation by the U.S. Congress for funding
in each year. Moreover, it is possible that Congress or the
government agencies that administer these government research
programs will decide to scale back these programs or terminate
them due to their own budgetary constraints. Additionally, these
grants and research contracts are subject to adjustment based
upon the results of periodic audits performed on behalf of the
granting authority. Consequently, the government may not award
grants or research contracts to us in the future, and any
amounts that we derive from existing grants or contracts may be
less than those received to date.
If health care
reform measures are enacted, our operating results and our
ability to commercialize products could be adversely
affected.
In recent years, there have been numerous proposals to change
the health care system in the U.S. and in foreign
jurisdictions. Some of these proposals have included measures
that would limit or eliminate payments for medical procedures
and treatments or subject the pricing of pharmaceuticals to
government control. In some foreign countries, particularly
countries of the European Union, the pricing of prescription
pharmaceuticals is subject to governmental control. In addition,
as a result of the trend towards managed health care in the
U.S., as well as legislative proposals to reduce government
insurance programs, third-party payers are increasingly
attempting to contain health care costs by limiting both
coverage and the level of reimbursement of new drug products.
Consequently, significant uncertainty exists as to the
reimbursement status of newly approved health care products.
If we or any of our collaborators succeed in bringing one or
more of our products to market, third-party payers may establish
and maintain price levels insufficient for us to realize an
appropriate return on our investment in product development.
Significant changes in the health care system in the
U.S. or elsewhere, including changes resulting from adverse
trends in third-party reimbursement programs, could have a
material adverse effect on our operating results and our ability
to raise capital and commercialize products.
We are exposed to
product liability claims, and in the future we may not be able
to obtain insurance against these claims at a reasonable cost or
at all.
Our business exposes us to product liability risks, which are
inherent in the testing, manufacturing, marketing and sale of
pharmaceutical products. We may not be able to avoid product
liability exposure. If a product liability claim is successfully
brought against us, our financial position may be adversely
affected.
S-18
Risk
factors
Product liability insurance for the biopharmaceutical industry
is generally expensive, when available at all. We have obtained
product liability insurance in the amount of $10.0 million
per occurrence, subject to a deductible and a $10.0 million
annual aggregate limitation. In addition, where local statutory
requirements exceed the limits of our existing insurance or
where local policies of insurance are required, we maintain
additional clinical trial liability insurance to meet these
requirements. Our present insurance coverage may not be adequate
to cover claims brought against us. In addition, some of our
license and other agreements require us to obtain product
liability insurance. Adequate insurance coverage may not be
available to us at a reasonable cost in the future.
We handle
hazardous materials and must comply with environmental laws and
regulations, which can be expensive and restrict how we do
business. If we are involved in a hazardous waste spill or other
accident, we could be liable for damages, penalties or other
forms of censure.
Our research and development work and manufacturing processes
involve the use of hazardous, controlled and radioactive
materials. We are subject to federal, state and local laws and
regulations governing the use, manufacture, storage, handling
and disposal of these materials. Despite procedures that we
implement for handling and disposing of these materials, we
cannot eliminate the risk of accidental contamination or injury.
In the event of a hazardous waste spill or other accident, we
could be liable for damages, penalties or other forms of
censure. In addition, we may be required to incur significant
costs to comply with environmental laws and regulations in the
future.
Our stock price
has a history of volatility. You should consider an investment
in our stock as risky and invest only if you can withstand a
significant loss.
Our stock price has a history of significant volatility. Between
January 1, 2005 and September 17, 2007, our stock
price has ranged from $14.09 to $30.83 per share. Historically,
our stock price has fluctuated through an even greater range. At
times, our stock price has been volatile even in the absence of
significant news or developments relating to us. Moreover, the
stocks of biotechnology companies and the stock market generally
have been subject to dramatic price swings in recent years.
Factors that may have a significant impact on the market price
of our common stock include:
|
|
Ø
|
the results of clinical trials and preclinical studies involving
our products or those of our competitors;
|
|
Ø
|
changes in the status of any of our drug development programs,
including delays in clinical trials or program terminations;
|
|
Ø
|
developments regarding our efforts to achieve marketing approval
for our products;
|
|
Ø
|
developments in our relationship with Wyeth regarding the
development and commercialization of methylnaltrexone;
|
|
Ø
|
announcements of technological innovations or new commercial
products by us, our collaborators or our competitors;
|
|
Ø
|
developments in our relationships with other collaborative
partners;
|
|
Ø
|
developments in patent or other proprietary rights;
|
|
Ø
|
governmental regulation;
|
|
Ø
|
changes in reimbursement policies or health care legislation;
|
|
Ø
|
public concern as to the safety and efficacy of products
developed by us, our collaborators or our competitors;
|
|
Ø
|
our ability to fund on-going operations;
|
S-19
Risk
factors
|
|
Ø
|
fluctuations in our operating results; and
|
|
Ø
|
general market conditions.
|
Our principal
stockholders are able to exert significant influence over
matters submitted to stockholders for approval.
At June 30, 2007, Dr. Maddon and stockholders
affiliated with Tudor Investment Corporation together
beneficially own or control approximately 17% of our outstanding
shares of common stock. These persons, should they choose to act
together, could exert significant influence in determining the
outcome of corporate actions requiring stockholder approval and
otherwise control our business. This control could have the
effect of delaying or preventing a change in control of us and,
consequently, could adversely affect the market price of our
common stock.
Anti-takeover
provisions may make the removal of our Board of Directors or
management more difficult and discourage hostile bids for
control of our company that may be beneficial to our
stockholders.
Our Board of Directors is authorized, without further
stockholder action, to issue from time to time shares of
preferred stock in one or more designated series or classes. The
issuance of preferred stock, as well as provisions in certain of
our stock options that provide for acceleration of
exercisability upon a change of control, and Section 203
and other provisions of the Delaware General Corporation Law
could:
|
|
Ø
|
make the takeover of Progenics or the removal of our Board of
Directors or management more difficult;
|
|
Ø
|
discourage hostile bids for control of Progenics in which
stockholders may receive a premium for their shares of common
stock; and
|
|
Ø
|
otherwise dilute the rights of holders of our common stock and
depress the market price of our common stock.
|
If there are
substantial sales of our common stock, the market price of our
common stock could decline.
Sales of substantial numbers of shares of common stock could
cause a decline in the market price of our stock. We require
substantial external funding to finance our research and
development programs and may seek such funding through the
issuance and sale of our common stock. We have filed a shelf
registration statement to permit the sale by us of up to
4.0 million shares of our common stock, pursuant to which
this offering is being made, and additional shelf registration
statements to permit the public reoffer and sale from time to
time of up to 286,000 shares of our common stock by certain
stockholders. Sales of our common stock pursuant to these
registration statements could cause the market price or our
stock to decline. In addition, some of our other stockholders
are entitled to require us to register their shares of common
stock for offer or sale to the public. Also, we have filed
Form S-8
registration statements registering shares issuable pursuant to
our equity compensation plans. Any sales by existing
stockholders or holders of options may have an adverse effect on
our ability to raise capital and may adversely affect the market
price of our common stock.
S-20
Forward-looking
statements
Certain statements in this prospectus supplement and the
accompanying prospectus constitute forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Any statements contained herein
that are not statements of historical fact may be
forward-looking statements. When we use the words
anticipates, plans, expects
and similar expressions, it is identifying forward-looking
statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause
our actual results, performance or achievements, or industry
results, to be materially different from any expected future
results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among
others, the risks associated with our dependence on Wyeth to
fund and to conduct clinical testing, to make certain regulatory
submissions and to manufacture and market products containing
methylnaltrexone, the uncertainties associated with product
development, the risk that clinical trials will not commence,
proceed or be completed as planned, the risk that our products
will not receive marketing approval from regulators, the risks
and uncertainties associated with the dependence upon the
actions of our corporate, academic and other collaborators and
of government regulatory agencies, the risk that our licenses to
intellectual property may be terminated because of our failure
to have satisfied performance milestones, the risk that products
that appear promising in early clinical trials are later found
not to work effectively or are not safe, the risk that we may
not be able to manufacture commercial quantities of our
products, the risk that our products, if approved for marketing,
do not gain market acceptance sufficient to justify development
and commercialization costs, the risk that we will not be able
to obtain funding necessary to conduct our operations, the
uncertainty of future profitability and other factors set forth
more fully in this prospectus supplement, the accompanying
prospectus and the documents incorporated by reference herein,
including those described in this prospectus supplement under
the caption Risk factors, to which investors are
referred for further information.
We do not have a policy of updating or revising forward-looking
statements, and we assume no obligation to update any
forward-looking statements contained or incorporated by
reference in this prospectus supplement and the accompanying
prospectus as a result of new information or future events or
developments. Thus, you should not assume that our silence over
time means that actual events are bearing out as expressed or
implied in such forward-looking statements.
S-21
We estimate that the net proceeds from the sale of the shares of
common stock we are offering, after deducting underwriting
discounts and commissions and estimated expenses payable by us,
will be approximately $57.1 million (or approximately
$65.7 million if the underwriters over-allotment
option is exercised in full).
We are offering our common stock at this time to increase our
cash reserves in order to fund our operations. We expect to use
the net proceeds from this offering:
|
|
Ø
|
to fund clinical trials of our product candidates;
|
|
Ø
|
to fund research and development projects; and
|
|
Ø
|
for other corporate purposes.
|
We have not identified precisely the amounts we plan to spend on
each of the uses of proceeds listed above, nor have we
determined the timing of these expenditures. The amounts
actually expended for each purpose may vary significantly
depending upon numerous factors, including:
|
|
Ø
|
the results of our research and development and product testing;
|
|
Ø
|
our potential relationships with in-licensors and collaborators;
|
|
Ø
|
changes in the focus and direction of our research and
development programs;
|
|
Ø
|
potential acquisitions;
|
|
Ø
|
the cost of filing, prosecuting, defending and enforcing patent
claims;
|
|
Ø
|
the regulatory approval process; and
|
|
Ø
|
manufacturing, marketing and other costs associated with
commercialization of our products.
|
We may also use a portion of the proceeds from this offering to
in-license technology, establish research and development
collaborations or acquire technology or companies in
complementary fields. Although we have an active business
development function, and in the ordinary course of our business
we engage in discussions regarding these types of transactions,
we are not currently a party to any definitive agreement
regarding any of these transactions.
Pending our use of the net proceeds from this offering as
described above, we intend to invest the net proceeds in
short-term, interest bearing, investment grade securities.
S-22
Price
range of common stock
Our common stock is listed on The Nasdaq Global Market under the
symbol PGNX. The following table sets forth, for the
periods indicated, the high and low sales price per share of our
common stock, as reported on The Nasdaq Global Market. Such
prices reflect inter-dealer prices, without retail
mark-up,
markdown or commission and may not represent actual transactions.
|
|
|
|
|
|
|
|
|
|
|
High
|
|
|
Low
|
|
|
|
|
Year ended December 31,
2005
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
24.40
|
|
|
$
|
14.09
|
|
Second quarter
|
|
|
21.35
|
|
|
|
15.76
|
|
Third quarter
|
|
|
25.07
|
|
|
|
20.60
|
|
Fourth quarter
|
|
|
27.00
|
|
|
|
20.73
|
|
Year ended December 31,
2006
|
|
|
|
|
|
|
|
|
First quarter
|
|
|
30.83
|
|
|
|
24.92
|
|
Second quarter
|
|
|
26.72
|
|
|
|
19.95
|
|
Third quarter
|
|
|
26.07
|
|
|
|
19.80
|
|
Fourth quarter
|
|
|
29.55
|
|
|
|
22.51
|
|
Year ending December 31,
2007
|
|
|
|
|
|
|
|
|
First quarter
|
|
|
30.31
|
|
|
|
22.02
|
|
Second quarter
|
|
|
27.59
|
|
|
|
21.14
|
|
Third quarter (through September
19)
|
|
|
26.10
|
|
|
|
20.55
|
|
On September 19, 2007, the last sale price for our common
stock as reported on The Nasdaq Global Market was $24.35.
We have not paid any dividends since our inception and presently
anticipate that all earnings, if any, will be retained for
development of our business and that no dividends on our common
stock will be declared in the foreseeable future.
S-23
The following table shows:
|
|
Ø
|
our actual capitalization at June 30, 2007; and
|
|
Ø
|
our as adjusted capitalization at June 30, 2007, to give
effect to our issuance and sale of 2,600,000 shares of
common stock in this offering, after deducting underwriting
discounts and commissions and estimated offering expenses. See
Use of proceeds.
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2007
|
|
|
|
Actual
|
|
|
As
adjusted
|
|
|
|
|
|
(in thousands,
except
|
|
|
|
per share
amounts)
|
|
|
Cash, cash equivalents and
marketable securities
|
|
$
|
139,118
|
|
|
$
|
196,257
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par
value per share; 20,000,000 authorized; none issued or
outstanding
|
|
|
|
|
|
|
|
|
Common stock, $0.0013 par
value per share; 40,000,000 authorized; 26,624,113 issued and
outstanding, actual; 29,224,113 issued and outstanding, as
adjusted;
|
|
$
|
35
|
|
|
$
|
38
|
|
Additional paid-in capital
|
|
|
331,391
|
|
|
|
388,527
|
|
Accumulated deficit
|
|
|
(223,174
|
)
|
|
|
(223,174
|
)
|
Accumulated other comprehensive
income (loss)
|
|
|
(215
|
)
|
|
|
(215
|
)
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
108,037
|
|
|
|
165,176
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
108,037
|
|
|
$
|
165,176
|
|
|
|
|
|
|
|
|
|
|
The number of shares of our common stock in the table above as
of June 30, 2007, excludes:
|
|
Ø
|
4,535,154 shares of our common stock issuable upon exercise
of outstanding options at a weighted average exercise price of
$17.48 per share; and
|
|
Ø
|
3,296,196 shares of our common stock available for future
issuance under our equity incentive and employee stock purchase
plans.
|
This table should be read in conjunction with our financial
statements and the related notes, which are incorporated by
reference into this prospectus supplement and the accompanying
prospectus.
S-24
Our net tangible book value as of June 30, 2007 was
$108.0 million, or $4.06 per share. Net tangible book value
is total tangible assets less total liabilities. Net tangible
book value per share is determined by dividing our net tangible
book value by the number of shares of our common stock
outstanding. Without taking into account any changes in our net
tangible book value after June 30, 2007, other than to give
effect to the issuance and sale of the 2,600,000 shares of
our common stock offered by this prospectus supplement and the
accompanying prospectus, our as adjusted net tangible book value
at June 30, 2007 would have been $165.2 million, or
$5.65 per share. This change in our as adjusted net
tangible book value per share compared to our net tangible book
value per share represents an immediate increase in net tangible
book value of $1.59 per share to our existing stockholders
as a result of this offering and an immediate dilution in net
tangible book value of $17.50 per share to new investors in this
offering. The following table illustrates this per share
dilution:
|
|
|
|
|
|
|
|
|
Public offering price per share
|
|
|
|
|
|
$
|
23.15
|
|
Net tangible book value per share
as of June 30, 2007
|
|
$
|
4.06
|
|
|
|
|
|
Increase in net tangible book
value per share attributable to this offering
|
|
|
1.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted net tangible book
value per share as of June 30, 2007 after giving effect to
this offering
|
|
|
|
|
|
|
5.65
|
|
|
|
|
|
|
|
|
|
|
Dilution per share to new
investors in this offering
|
|
|
|
|
|
$
|
17.50
|
|
|
|
|
|
|
|
|
|
|
The foregoing table assumes no exercise of outstanding options.
See Capitalization. The exercise of options could
result in further dilution to new investors.
If the underwriters exercise their over-allotment option in
full, the as adjusted net tangible book value as of
June 30, 2007 would have been $5.87 per share,
representing an increase to existing stockholders of $1.81 per
share, and there will be an immediate dilution of $17.28 per
share to new investors.
S-25
We are offering the shares of our common stock described in this
prospectus supplement and the accompanying prospectus through
the underwriters named below. We have entered into an
underwriting agreement with the underwriters. Subject to the
terms and conditions of the underwriting agreement, each of the
underwriters has severally agreed to purchase the number of
shares of common stock listed next to its name in the following
table:
|
|
|
|
|
Underwriters
|
|
Number of
shares
|
|
|
|
|
UBS Securities LLC
|
|
|
866,667
|
|
CIBC World Markets Corp.
|
|
|
866,667
|
|
Morgan Stanley & Co.
Incorporated
|
|
|
866,666
|
|
|
|
|
|
|
Total
|
|
|
2,600,000
|
|
|
|
|
|
|
The underwriting agreement provides that the underwriters must
buy all of the shares if they buy any of them. However, the
underwriters are not required to take or pay for the shares
covered by the underwriters over-allotment option
described below.
Our common stock is offered subject to a number of conditions,
including:
|
|
Ø
|
receipt and acceptance of our common stock by the underwriters;
and
|
|
Ø
|
the underwriters right to reject orders in whole or in
part.
|
In connection with this offering, the underwriters or securities
dealers may distribute prospectuses electronically.
OVER-ALLOTMENT
OPTION
We have granted the underwriters an option to buy up to 390,000
additional shares of our common stock. The underwriters may
exercise this option solely for the purpose of covering
over-allotments, if any, made in connection with this offering.
The underwriters have 30 days from September 19, 2007
to exercise this option. If the underwriters exercise this
option, they will each purchase additional shares approximately
in proportion to the amounts specified in the table above.
COMMISSIONS AND
DISCOUNTS
Shares sold by the underwriters to the public will initially be
offered at the initial offering price set forth on the cover of
this prospectus supplement. Any shares sold by the underwriters
to securities dealers may be sold at a discount of up to $0.25
per share from the public offering price. If all the shares are
not sold at the public offering price, the underwriters may
change the public offering price and the other selling terms.
Upon execution of the underwriting agreement, the underwriters
will be obligated to purchase the shares at the prices and upon
the terms stated therein and, as a result, will thereafter bear
any risk associated with changing the offering price to the
public or other selling terms. Sales of shares made outside of
the United States may be made by affiliates of the underwriters.
The following table shows the per share and total underwriting
discounts and commissions we will pay to the underwriters. These
amounts are shown assuming both no exercise and full exercise of
the underwriters option to purchase up to an additional
390,000 shares.
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No
exercise
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Full
exercise
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Per share
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$
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1.11
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$
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1.11
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Total
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$
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2,886,000
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$
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3,318,900
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S-26
Underwriting
We estimate that the total expenses of this offering payable by
us, not including the underwriting discounts and commissions,
will be approximately $165,000.
NO SALES OF
SIMILAR SECURITIES
We and our executive officers and directors have entered into
lock-up
agreements with the underwriters. Under these agreements, we and
each of these persons may not, without the prior written
approval of UBS Securities LLC, subject to limited exceptions,
offer, sell, contract to sell or otherwise dispose of, directly
or indirectly, or hedge our common stock or securities
convertible into or exchangeable or exercisable for our common
stock. We are not precluded from filing a registration statement
covering the future sale of our common stock. These restrictions
will be in effect for a period of 60 days after
September 19, 2007. The 60 day lockup period may be
extended for up to 32 additional days under certain
circumstances where we announce or pre-announce earnings or
material news or a material event within approximately
17 days prior to, or approximately 16 days after, the
termination of the 60 day period. At any time and without
public notice, the underwriters may, in their sole discretion,
release some or all of the securities from these
lock-up
agreements.
INDEMNIFICATION
AND CONTRIBUTION
We have agreed to indemnify each of the underwriters and its
controlling persons against certain liabilities, including
liabilities under the Securities Act. If we are unable to
provide this indemnification, we will contribute to payments the
underwriters and its controlling persons may be required to make
in respect of those liabilities.
THE NASDAQ GLOBAL
MARKET LISTING
Our common stock is listed on The Nasdaq Global Market under the
symbol PGNX.
PRICE
STABILIZATION, SHORT POSITIONS, PASSIVE MARKET MAKING
In connection with this offering, the underwriters may engage in
activities that stabilize, maintain or otherwise affect the
price of our common stock, including:
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stabilizing transactions;
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short sales;
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Ø
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purchases to cover positions created by short sales;
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Ø
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syndicate covering transactions; and
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Ø
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passive market making.
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Stabilizing transactions consist of bids or purchases made for
the purpose of preventing or retarding a decline in the market
price of our common stock while this offering is in progress.
These transactions may also include making short sales of our
common stock, which involve the sale by the underwriters of a
greater number of shares of common stock than they are required
to purchase in this offering, and purchases of shares of common
stock in the open market to cover positions created by short
sales.
As a result of these activities, the price of our common stock
may be higher than the price that otherwise might exist in the
open market. If these activities are commenced, they may be
discontinued by the underwriters at any time. The underwriters
may carry out these transactions on The Nasdaq Global Market, in
the over-the-counter market or otherwise. Short sales may be
covered short sales, which are short positions in an
amount not greater than the underwriters over-allotment
option referred to above, or may be naked shorts
sales, which are short positions in excess of that amount.
S-27
Underwriting
The underwriters may close out any covered short position by
either exercising their over-allotment option, in whole or in
part, or by purchasing shares in the open market. In making this
determination, the underwriters will consider, among other
things, the price of shares available for purchase in the open
market as compared to the price at which they may purchase
shares through the over-allotment option. The underwriters must
close out any naked short position by purchasing shares in the
open market. A naked short position is more likely to be created
if the underwriters are concerned that there may be downward
pressure on the price of the shares in the open market after
pricing that could adversely affect investors who purchased in
this offering.
The underwriters also may impose a penalty bid. This occurs when
a particular underwriter repays to the underwriters a portion of
the underwriting discount received by it because the
representatives have repurchased shares sold by or for the
account of that underwriter in stabilizing or short covering
transactions.
In addition, in connection with this offering, the underwriters
may engage in passive market making transactions in our common
stock on The Nasdaq Global Market prior to the pricing and
completion of this offering. Passive market making consists of
displaying bids on The Nasdaq Global Market no higher than the
bid prices of independent market makers and making purchases at
prices no higher than these independent bids and effected in
response in order flow. Net purchases by a passive market maker
on each day are generally limited to a specified percentage of
the passive market makers average daily trading volume in
the common stock during a specified period and must be
discontinued when such limit is reached. Passive market making
may cause the price of our common stock to be higher than the
price that otherwise would exist in the open market in the
absence of these transactions. If passive market making is
commenced, it may be discontinued at any time.
AFFILIATIONS
UBS Securities LLC and its affiliates and CIBC World Markets
Corp. and its affiliates and Morgan Stanley & Co.
Incorporated and its affiliates may from time to time in the
future engage in transactions with us and perform services for
us in the ordinary course of their business.
S-28
The validity of the common stock being offered hereby will be
passed upon for us by Dewey Ballantine LLP, New York, New
York. Certain legal matters will be passed upon for the
underwriters by Wilmer Cutler Pickering Hale and Dorr LLP,
Boston, Massachusetts.
The financial statements and managements assessment of the
effectiveness of internal control over financial reporting
(which is included in the Managements Report on Internal
Control over Financial Reporting) incorporated in this
prospectus supplement and the accompanying prospectus by
reference to the Annual Report on
Form 10-K
for the year ended December 31, 2006 have been so
incorporated in reliance on the report of PricewaterhouseCoopers
LLP, an independent registered public accounting firm, given on
the authority of said firm as experts in auditing and accounting.
Where
you can find additional information
We are subject to the reporting requirements of the Exchange Act
and in accordance with its requirements file annual and
quarterly reports, proxy statements and other information with
the Securities and Exchange Commission. These reports, proxy
statements and other information may be inspected, and copies of
these materials may be obtained upon payment of the prescribed
fees, at the SECs Public Reference Room,
100 F Street N.E., Washington, D.C. 20549. Please
call the SEC at
1-800-SEC-0330
for further information regarding the Public Reference Room. In
addition, we are required to file electronic versions of these
materials with the SEC through the SECs Electronic Data
Gathering, Analysis and Retrieval (EDGAR) system. The SEC
maintains an internet site at
http://www.sec.gov
that contains reports, proxy and information statements and
other information regarding registrants, including us, that file
electronically with the SEC.
We have filed with the SEC a Registration Statement on
Form S-3
under the Securities Act of 1933 with respect to the common
stock offered by this prospectus supplement and the accompanying
prospectus. The prospectus supplement and the accompanying
prospectus do not contain all of the information set forth in
the Registration Statement and the exhibits to the Registration
Statement. For further information with respect to us and our
common stock, you should read the Registration Statement,
including its exhibits and schedules. Statements contained in
this prospectus supplement and the accompanying prospectus,
including documents that we have incorporated by reference, as
to the contents of any contract or other document referred to
are not necessarily complete, and, with respect to any contract
or other document filed as an exhibit to the Registration
Statement, each such statement is qualified in all respects by
reference to the corresponding exhibit. Copies of the
Registration Statement and its exhibits are on file at the
offices of the SEC and may be obtained upon payment of the
prescribed fee or may be examined without charge at the
SECs Public Reference Room, at the address listed above,
or via the EDGAR database.
The SEC allows us to incorporate by reference information into
this prospectus supplement and the accompanying prospectus. This
means that we can disclose important information to you by
referring you to another document filed separately with the SEC.
The information incorporated by reference is considered to be
part of this prospectus supplement and the accompanying
prospectus, except for any information superseded by information
contained directly in this prospectus supplement or the
accompanying prospectus. This prospectus supplement and the
accompanying prospectus incorporate by reference the documents
set forth below that we have previously filed with the SEC
(other than information in such documents that is deemed to be
furnished and not filed). These documents contain important
information about us and our financial condition.
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Our Annual Report on
Form 10-K
for the year ended December 31, 2006, File
No. 0-23143;
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Our Annual Report on
Form 10-K/A
for the year ended December 31, 2006, File
No. 0-23143;
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S-29
Where you can
find additional information
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Ø
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Our Quarterly Report on
Form 10-Q
for the period ended March 31, 2007, File
No. 0-23143;
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Our Quarterly Report on
Form 10-Q
for the period ended June 30, 2007, File
No. 0-23143
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Our Current Report on
Form 8-K
filed on January 8, 2007, File
No. 0-23143;
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The description of our common stock contained in our
Registration Statement on
Form 8-A,
dated September 29, 1997, File
No. 0-23143,
including any amendments or reports filed for the purpose of
updating such description.
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All documents filed by us pursuant to Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 subsequent to
the date of this prospectus supplement and prior to the
completion of this offering of our common stock will be deemed
to be incorporated by reference into this prospectus supplement
and to be a part hereof from the date of filing of such
documents.
Any statement contained in a document incorporated or deemed to
be incorporated by reference into this prospectus supplement and
the accompanying prospectus shall be deemed to be modified or
superseded for purposes of this prospectus supplement and the
accompanying prospectus to the extent that a statement contained
in this prospectus supplement or accompanying prospectus, or in
any other subsequently filed document that is also incorporated
or deemed to be incorporated by reference in this prospectus
supplement or accompanying prospectus, modifies or supersedes
the earlier statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus supplement or the
accompanying prospectus.
Documents incorporated by reference are available from us
without charge, excluding all exhibits unless specifically
incorporated by reference as an exhibit to this prospectus
supplement and the accompanying prospectus. Prospective
investors may obtain documents incorporated by reference in this
prospectus supplement and the accompanying prospectus by
requesting them in writing or by telephone from us at our
executive offices at 777 Old Saw Mill River Road, Tarrytown, New
York 10591, telephone number
(914) 789-2800,
Attention: Richard W. Krawiec, Ph.D., Vice President,
Corporate Affairs.
S-30
4,000,000 Shares
Common
Stock
From time to time, we may sell common stock in one or more
issuances. This prospectus describes the general manner in which
our common stock may be offered using this prospectus. We will
specify in the accompanying prospectus supplement the terms of
any offering. Our common stock is listed on The Nasdaq National
Market under the symbol PGNX.
Investing in our common stock involves a high degree of risk.
See Risk Factors on page 1.
Our common stock may be sold directly by us to investors,
through agents designated from time to time or through
underwriters or dealers at prices and on terms to be determined
at the time of offering. We will set forth the names of any
underwriters or agents and any applicable commissions or
discounts in the accompanying prospectus supplement. For
additional information on the methods of sale, you should refer
to the section entitled Plan of Distribution. We
will also set forth the use of the net proceeds we expect to
receive from any sale of our common stock in the accompanying
prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these
securities or determined if this prospectus or the accompanying
prospectus supplement is truthful or complete. Any
representation to the contrary is a criminal offense.
This prospectus may not be used to offer or sell any
securities unless accompanied by a prospectus supplement.
The date of this prospectus is February 2, 2006.
TABLE OF
CONTENTS
You should rely only on the information contained in this
prospectus and the accompanying prospectus supplement. We have
not authorized anyone 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 contained in this prospectus and the accompanying
prospectus supplement is accurate as of any date other than the
date on the front cover of those documents.
i
This prospectus is part of a registration statement that we have
filed with the Securities and Exchange Commission using a
shelf registration process. Under this process, we
may, from time to time, offer and sell up to
4,000,000 shares of our common stock, par value $.0013 per
share. This prospectus, together with the accompanying
prospectus supplement contains important information you should
know before investing, including important information about us
and our common stock being offered. You should read both this
prospectus and the accompanying prospectus supplement as well as
the additional information contained in the documents described
under the heading Where you can find additional
information in both this prospectus and the accompanying
prospectus supplement.
This prospectus describes the general manner in which our common
stock may be offered by this prospectus. Each time we sell
common stock pursuant to the registration statement we will
provide a prospectus supplement that will contain more specific
information about the offering and the shares offered. The
accompanying prospectus supplement may also add, update or
change information contained in this prospectus. If there is any
inconsistency between the information in this prospectus and the
accompanying prospectus supplement, you should rely on the
information in that prospectus supplement. This prospectus may
not be used to offer to sell, to solicit an offer to buy, or to
consummate a sale of our common stock unless it is accompanied
by a prospectus supplement.
We are a biopharmaceutical company focusing on the development
and commercialization of innovative therapeutic products to
treat the unmet medical needs of patients with debilitating
conditions and life-threatening diseases. Our principal programs
are directed toward symptom management and supportive care and
the treatment of Human Immunodeficiency Virus (HIV)
infection and cancer. We do not have any FDA approved products
and have not received any revenue from the sale of any of our
product candidates under development. The mailing address of our
principal executive offices is 777 Old Saw Mill River Road,
Tarrytown, New York 10591, and our telephone number is
(914) 789-2800.
References to Progenics, the Company,
we, our, and us refers to
Progenics Pharmaceuticals, Inc. and its subsidiary.
An investment in our common stock is speculative in nature and
involves a high degree of risk. You should carefully consider
the discussion of the material risks of investing in our common
stock contained in our Current Report on
Form 8-K,
dated January 9, 2006, which is incorporated by reference
in this prospectus, and in any report subsequently filed by us
with the Securities and Exchange Commission and incorporated or
deemed to be incorporated by reference in this prospectus, as
well as in any applicable prospectus supplement, in evaluating
our company, our business and our prospects.
Forward-looking
statements
Certain statements in this prospectus, any accompanying
prospectus supplement and the documents we have filed with the
Securities and Exchange Commission that are incorporated by
reference into this prospectus and any prospectus supplement
constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Included in these forward-looking statements are statements
regarding our expectations for beginning or completing clinical
trials, submitting to regulatory authorities applications for
marketing approvals for our product candidates, raising
additional capital and reducing our operating costs if we cannot
raise additional funds. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which
may cause our actual results, performance or achievements, or
industry results, to be materially different from any expected
future results, performance, or achievements expressed or
implied by such forward-looking
1
Forward-looking
statements
statements. These factors include, among others, the risks
associated with our dependence on Wyeth to fund clinical
testing, and to make certain regulatory filings and to
manufacture and market products containing MNTX, the
uncertainties associated with product development, the risk that
clinical trials will not commence, proceed or be completed as
planned, the risk that our products will not receive marketing
approval from regulators, the risks and uncertainties associated
with the dependence upon the actions of our corporate, academic
and other collaborators and of government regulatory agencies,
the risk that our licenses to intellectual property may be
terminated because of our failure to have satisfied performance
milestones, the risk that products that appear promising in
early clinical trials are later found not to work effectively or
are not safe, the risk that we may not be able to manufacture
commercial quantities of our products, the risk that our
products, if approved for marketing, do not gain market
acceptance sufficient to justify development and
commercialization costs, the risk that we will not be able to
obtain funding necessary to conduct our operations, the
uncertainty of future profitability and other factors set forth
more fully in this prospectus, any prospectus supplement and the
documents incorporated by reference herein, including those
factors described under the caption Risk factors, to
which investors are referred for further information.
We do not have a policy of updating or revising forward-looking
statements, and we assume no obligation to update any
forward-looking statements contained or incorporated by
reference in this prospectus and any accompanying prospectus
supplement as a result of new information or future events or
developments. Thus, you should not assume that our silence over
time means that actual events are bearing out as expressed or
implied in such forward-looking statements.
Unless we indicate otherwise in an accompanying prospectus
supplement, we currently intend to use the net proceeds from the
sale of our common stock to fund:
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clinical trials for product candidates;
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other research and development activities; and
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in-licensing of technology and establishment of research and
development collaborations.
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We may also use the proceeds for working capital and general
corporate purposes, including potential acquisitions of
technology or companies in complementary fields.
We may set forth additional information concerning our expected
use of net proceeds from the sale of shares of our common stock
in a prospectus supplement relating to the specific offering.
Pending our use of the net proceeds from our sale of common
stock as described above, we intend to invest the net proceeds
in interest bearing, investment-grade securities.
The accompanying prospectus supplement may not identify
precisely the amounts we plan to spend on each of the uses of
proceeds listed above or any other uses of proceeds that we may
identify in the prospectus supplement. The amounts actually
expended for each purpose may vary significantly depending upon
numerous factors, including:
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the results of our research and development and product testing;
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changes in the focus and direction of our research and
development programs;
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our relationship with Wyeth or with any other in-licensor and
collaborator;
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manufacturing, marketing and other costs associated with
commercialization of our products;
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the cost of filing, prosecuting, defending and enforcing patent
claims;
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the regulatory approval process; and
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potential acquisitions.
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2
We may sell our common stock through underwriters or dealers,
through agents, or directly to one or more purchasers. The
accompanying prospectus supplement will describe the terms of
the offering of the securities, including:
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the name or names of any underwriters;
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the purchase price of the common stock and the proceeds we will
receive from the sale;
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any over-allotment options pursuant to which underwriters may
purchase additional securities from us;
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any agency fees or underwriting discounts and other items
constituting agents or underwriters compensation;
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any initial public offering price; and
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any discounts or concessions allowed or reallowed or paid to
dealers.
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If underwriters are used in the sale, they will acquire the
common stock for their own account and may resell the stock from
time to time in one or more transactions at a fixed public
offering price or at varying prices determined at the time of
the sale. The obligations of the underwriters to purchase the
common stock will be subject to the conditions set forth in the
applicable underwriting agreement. We may offer the common stock
to the public through underwriting syndicates represented by
managing underwriters or by underwriters without a syndicate.
Subject to certain conditions, the underwriters will be
obligated to purchase all the shares of common stock offered by
the prospectus supplement if any such shares are purchased. The
underwriters may change from time to time the public offering
price and any discounts or concessions allowed or reallowed or
paid to dealers. We may use underwriters with whom we have a
material relationship. We will describe such relationships in
the prospectus supplement naming the underwriter.
We may sell common stock directly or through agents we designate
from time to time. We will name any agent involved in the
offering and sale of common stock, and we will describe any
commissions that must be paid to the agent in the prospectus
supplement. Unless the prospectus supplement states otherwise,
our agent will act on a best-efforts basis for the period of its
appointment.
We may provide agents and underwriters with indemnification
against civil liabilities related to this offering, including
liabilities under the Securities Act, or contribution with
respect to payments that the agents or underwriters may make
with respect to these liabilities. Agents and underwriters may
engage in transactions with, or perform services for, us in the
ordinary course of business.
Rules of the Securities and Exchange Commission may limit the
ability of any underwriters to bid for or purchase shares before
the distribution of the shares is completed. However,
underwriters may engage in the following activities in
accordance with the rules:
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Stabilizing transactionsUnderwriters may make bids
or purchases for the purpose of pegging, fixing or maintaining
the price of the shares, so long as stabilizing bids do not
exceed a specified maximum.
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Over-allotments and syndicate covering
transactionsUnderwriters may sell more shares of our
common stock than the number of shares that they have committed
to purchase in any underwritten offering. This over-allotment
creates a short position for the underwriters. This short
position may involve either covered short sales or
naked short sales. Covered short sales are short
sales made in an amount not greater than the underwriters
over-allotment option to purchase additional shares in any
underwritten offering. The underwriters may close out any
covered short position either by exercising their over-allotment
option or by purchasing shares in the open market. To determine
how they will close the covered short position, the underwriters
will consider, among other things, the
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3
Plan of
distribution
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price of shares available for purchase in the open market, as
compared to the price at which they may purchase shares through
the over-allotment option. Naked short sales are short sales in
excess of the over-allotment option. The underwriters must close
out any naked short position by purchasing shares in the open
market. A naked short position is more likely to be created if
the underwriters are concerned that, in the open market after
pricing, there may be downward pressure on the price of the
shares that could adversely affect investors who purchase shares
in the offering.
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Penalty bidsIf underwriters purchase shares in the
open market in a stabilizing transaction or syndicate covering
transaction, they may reclaim a selling concession from other
underwriters and selling group members who sold those shares as
part of the offering.
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Similar to other purchase transactions, an underwriters
purchases to cover the syndicate short sales or to stabilize the
market price of our common stock may have the effect of raising
or maintaining the market price of our common stock or
preventing or mitigating a decline in the market price of our
common stock. As a result, the price of the shares of our common
stock may be higher than the price that might otherwise exist in
the open market. The imposition of a penalty bid might also have
an effect on the price of shares if it discourages resales of
the shares.
If commenced, the underwriters may discontinue at any time any
of the activities described above.
Any underwriters who are qualified market makers on The Nasdaq
National Market may engage in passive market making transactions
in the common stock on The Nasdaq National Market in accordance
with Rule 103 of Regulation M, during the business day
prior to the pricing of the offering, before the commencement of
offers or sales of the common stock. Passive market makers must
comply with applicable volume and price limitations and must be
identified as passive market makers. In general, a passive
market maker must display its bid at a price not in excess of
the highest independent bid for such security; if all
independent bids are lowered below the passive market
makers bid, however, the passive market makers bid
must then be lowered when certain purchase limits are exceeded.
In compliance with guidelines of the National Association of
Securities Dealers, or NASD, the consideration or discount to be
received by any NASD member or independent broker dealer may not
exceed 8% of the aggregate amount of the securities offered
pursuant to this prospectus and any applicable prospectus
supplement.
The validity of the common stock being offered hereby will be
passed upon for us by Dewey Ballantine LLP, New York, New
York.
The financial statements and managements assessment of the
effectiveness of internal control over financial reporting
(which is included in Managements Report on Internal
Control over Financial Reporting) incorporated in this
Prospectus by reference to the Annual Report on
Form 10-K
for the year ended December 31, 2004 have been so
incorporated in reliance on the report of PricewaterhouseCoopers
LLP, an independent registered public accounting firm, given on
the authority of said firm as experts in auditing and accounting.
4
Where
you can find additional information
We are subject to the reporting requirements of the Securities
Exchange Act of 1934 and in accordance with its requirements
file annual and quarterly reports, proxy statements and other
information with the Securities and Exchange Commission. These
reports, proxy statements and other information may be
inspected, and copies of these materials may be obtained upon
payment of the prescribed fees, at the SECs Public
Reference Room, 100 F Street, N.E., Washington D.C.
20549. Please call the SEC at
1-800-SEC-0330
for further information regarding the Public Reference Room. In
addition, we are required to file electronic versions of these
materials with the SEC through the SECs Electronic Data
Gathering, Analysis and Retrieval (EDGAR) system. The SEC
maintains an internet site at
http://www.sec.gov
that contains reports, proxy and information statements and
other information regarding registrants that file electronically
with the SEC.
We have filed with the SEC a registration statement on
Form S-3
under the Securities Act of 1933 with respect to the common
stock offered by this prospectus and the accompanying prospectus
supplement. This prospectus and the accompanying prospectus
supplement do not contain all of the information set forth in
the registration statement and the exhibits and the schedules to
the registration statement. For further information with respect
to us and our common stock, you should read the registration
statement, including its exhibits and schedules. Statements
contained in this prospectus and the accompanying prospectus
supplement, including documents that we have incorporated by
reference, as to the contents of any contract or other document
referred to are not necessarily complete, and, with respect to
any contract or other document filed as an exhibit to the
registration statement, each such statement is qualified in all
respects by reference to the corresponding exhibit. Copies of
the registration statement and its exhibits are on file at the
offices of the SEC and may be obtained upon payment of the
prescribed fee or may be examined without charge at the
SECs Public Reference Room, at the address listed above,
or via the EDGAR database.
The SEC allows us to incorporate by reference information in
this prospectus and the accompanying prospectus supplement. This
means that we can disclose important information to you by
referring you to another document filed separately with the SEC.
The information incorporated by reference is considered to be
part of this prospectus and the accompanying prospectus
supplement, except for any information superseded by information
contained directly in this prospectus and the accompanying
prospectus supplement or in any subsequently filed incorporated
document. This prospectus and the accompanying prospectus
supplement incorporate by reference the documents set forth
below that we have previously filed with the SEC (other than
information in such documents that is deemed to be furnished and
not filed). These documents contain important information about
us and our financial condition.
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Our Annual Report on
Form 10-K
for the year ended December 31, 2004, File
No. 0-23143;
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Our Quarterly Report on
Form 10-Q
for the three months ended March 31, 2005, File
No. 0-23143;
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Our Quarterly Report on
Form 10-Q
for the six months ended June 30, 2005, File
No. 0-23143;
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Our Quarterly Report on
Form 10-Q
for the nine months ended September 30, 2005,
File No. 0-23143;
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Our Current Reports on
Form 8-K
filed on:
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January 14, 2005, File
No. 0-23143;
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January 14, 2005, File
No. 0-23143;
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February 25, 2005, File
No. 0-23143;
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March 2, 2005, File
No. 0-23143;
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5
Where you can
find additional information
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March 10, 2005, File
No. 0-23143;
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April 5, 2005, File
No. 0-23143;
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May 13, 2005, File
No. 0-23143;
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June 8, 2005, File
No. 0-23143;
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June 13, 2005, File
No. 0-23143;
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June 29, 2005, File
No. 0-23143;
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September 15, 2005, File
No. 0-23143;
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December 28, 2005, File
No. 0-23143;
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January 9, 2006, File
No. 0-23143;
and
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The description of our common stock contained in our
Registration Statement on
Form 8-A,
dated September 29, 1997, File
No. 0-23143,
including any amendments or reports filed for the purpose of
updating such description.
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All documents filed by us pursuant to Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 subsequent to
the date of this prospectus and prior to the completion of this
offering of our common stock will be deemed to be incorporated
by reference in this prospectus and the accompanying prospectus
supplement and to be a part hereof from the date of filing of
such documents.
Any statement contained in a document incorporated or deemed to
be incorporated by reference in this prospectus or the
accompanying prospectus supplement shall be deemed to be
modified or superseded for purposes of this prospectus and the
accompanying prospectus supplement to the extent that a
statement contained in this prospectus or the accompanying
prospectus supplement, or in any other subsequently filed
document that is also incorporated or deemed to be incorporated
by reference in this prospectus and the accompanying prospectus
supplement, modifies or supersedes the earlier statement. Any
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
prospectus or the accompanying prospectus supplement.
Documents incorporated by reference are available from us
without charge, excluding all exhibits unless specifically
incorporated by reference as an exhibit to this prospectus and
the accompanying prospectus supplement. Prospective investors
may obtain documents incorporated by reference in this
prospectus and the accompanying prospectus supplement by
requesting them in writing or by telephone from us at our
executive offices at 777 Old Saw Mill River Road,
Tarrytown, New York 10591, telephone number
(914) 789-2800,
Attention: Richard W. Krawiec, Ph.D., Vice President,
Corporate Affairs.
6