We estimate that our net proceeds from the sale of 10,000,000 shares of common
stock in this offering will be approximately $58.3 million after deducting
estimated offering expenses and underwriting discounts and commissions and
assuming an initial public offering price per share of $6.50, the mid-point of
the price range set forth on the cover of this prospectus. If the over-
allotment option is exercised in full, we estimate that our net proceeds will
be approximately $67.4 million. A $1.00 increase (decrease) in the assumed
initial public offering price per share of $6.50, the mid-point of the price
range set forth on the cover page of this prospectus, would increase (decrease)
the net proceeds to us from this offering by $9.3 million, assuming the number
of shares offered by us, as set forth on the cover page of this prospectus,
remains the same and after deducting estimated underwriting discounts and
estimated offering expenses payable by us.
The principal purposes of this offering are to obtain additional capital to
support our operations, to create a public market for our common stock and to
facilitate our future access to the public equity markets. We intend to use the
net proceeds from this offering as follows:
• approximately $32.0 million to fund the remaining estimated cost of our
first planned Phase 3 clinical trial with the IV formulation of
delafloxacin for the treatment of ABSSSI;
• approximately $16.0 million to fund ongoing research and development
activities for our RX-04, RX-05 and RX-06 programs;
• approximately $9.7 million to pay scheduled principal and interest
through April 2014 under our loan agreement with Oxford Finance LLC
bearing interest at a rate of 9.1% per annum and maturing on June 1,
2015, the proceeds from which have been used and will continue to be
used to fund our ongoing operations through the consummation of this
offering and, following this offering, for general corporate purposes;
and
• the remainder for working capital and other general corporate purposes,
including for additional costs and expenses associated with being a
public company.
We believe that the net proceeds from this offering, the amount we anticipate
receiving under our collaboration with Sanofi, and our existing cash and cash
equivalents, together with interest thereon, will be sufficient to fund the
continued development of delafloxacin and RX-04 through the following events:
• receipt of top-line data from our initial Phase 3 clinical trial of the
IV dosage form of delafloxacin for the treatment of ABSSSI; and
• identification of a clinical candidate from the RX-04 program and
submission of an Investigational New Drug, or IND, application.
The amount and timing of our actual expenditures will depend upon numerous
factors, including the ongoing status and results of the initial Phase 3
clinical trial for delafloxacin and progress on the RX-04 program in
collaboration with Sanofi. In particular, we will need to obtain additional
funding beyond the proceeds of this contemplated offering in order to continue
to advance the development of radezolid.
Our expected use of net proceeds from this offering represents our current
intentions based upon our present plans and business condition. As of the date
of this prospectus, we cannot predict with certainty all of the particular uses
for the net proceeds to be received upon the completion of this offering or the
amounts that we will actually spend on the uses set forth above. The amounts
and timing of our actual use of net proceeds will vary depending on numerous
factors, including our ability to obtain additional financing, the relative
success and cost of our research, preclinical and clinical development
programs, the amount and timing of revenues, if any, received from our
collaboration with Sanofi and whether we are able to enter into anticipated
future collaborations. As a result, management will have broad discretion in
the application of the net proceeds, and investors will be relying on our
judgment regarding the application of the net proceeds of this offering. In
addition, we might decide to postpone or not pursue other clinical trials or
any number of our research and development programs if the proceeds from this
offering and the other sources of cash are less than expected.
Pending their use, we plan to invest the net proceeds from this offering in
short- and intermediate-term, interest-bearing obligations, investment-grade
instruments, certificates of deposit or direct or guaranteed obligations of
the United States government.
The biopharmaceutical industry is characterized by intense competition and
rapid innovation. Our potential competitors include large pharmaceutical and
biotechnology companies, specialty pharmaceutical companies and generic drug
companies. We believe the key competitive factors that will affect the
development and commercial success of our product candidates are efficacy,
coverage of drug resistant strains of bacteria, safety and tolerability
profile, reliability, convenience of dosing, price and reimbursement, and
susceptibility to drug resistance.
Our most advanced product candidate, delafloxacin, is being developed as a
broad spectrum antibiotic with MRSA coverage for first line use in the hospital
setting. In this treatment setting, if approved, delafloxacin would compete
with a number of currently-marketed antibiotics, including Tygacil and Teflaro,
and antibiotics currently in Phase 3 development, including omadocycline/PTK-
0796, a tetracycline under development by Paratek Pharmaceuticals, Inc. Given
its favorable safety profile, potential for a convenient IV-to-oral switch and
potency against Gram-positive infections, including MRSA, we believe that
delafloxacin would also compete with currently marketed antibiotics used for
serious, Gram-positive infections. These include vancomycin, a generic drug
that is manufactured by a variety of companies, Zyvox, Cubicin and telavancin,
marketed as Vibativ. In addition, a number of Gram-positive anti-infective
product candidates currently in Phase 3 development could also compete with
delafloxacin if they are approved, including dalbavancin (under development by
Durata Therapeutics, Inc.), oritavancin (under development by The Medicines
Company), tedizolid (under development by Trius Therapeutics, Inc.) and Taksta
(under development by Cempra, Inc.).
Our second product candidate, radezolid, represents a differentiated
oxazolidinone with broader coverage and an improved safety profile with the
potential for widespread use as a treatment for MRSA and other Gram-positive
infections in vulnerable populations or requiring long-term therapy. If
approved, we believe that radezolid would compete with a number antibiotics
targeting serious Gram-positive infections, including MRSA. These include
currently marketed antibiotics such as vancomycin, Zyvox, Cubicin and Vibativ,
as well as antibiotics currently in Phase 3 development such as dalbavancin,
oritavancin, tedizolid and Taksta. We also expect that our product candidates,
if approved, would compete with future generic versions of currently marketed
antibiotics.
We believe that our product candidates offer key potential advantages over
these competitive products that could enable our product candidates, if
approved, to capture meaningful market share from our competitors. However,
many of our potential competitors have substantially greater financial,
technical and human resources than we do, as well as greater experience in the
discovery and development of product candidates, obtaining FDA and other
regulatory approvals of products and the commercialization of those products.
Accordingly, our competitors may be more successful than us in obtaining FDA
approval for drugs and achieving widespread market acceptance. Our competitors’
drugs may be more effective, or more effectively marketed and sold, than any
product candidate we may commercialize and may render our product candidates
obsolete or non-competitive before we can recover the expenses of their
development and commercialization. We anticipate that we will face intense and
increasing competition as new drugs enter the market and advanced technologies
become available. Finally, the development of new treatment methods for the
diseases we are targeting could render our product candidates non-competitive
or obsolete.
three-
dimensional understanding of interactions between drug candidates and their
bacterial targets and enables us to systematically engineer antibiotics with
enhanced characteristics. Our most advanced product candidate, delafloxacin,
is intended for use as an effective and convenient first-line therapy primarily
in hospitals prior to the availability of a specific diagnosis. Unlike
currently available first-line treatments, delafloxacin has the potential to
offer broad-spectrum coverage as a monotherapy for serious Gram-negative and
Gram-positive bacterial infections, including for methicillin-resistant
Staphylococcus aureus, or MRSA, with both intravenous and oral formulations.
Most bacteria are broadly categorized as either Gram-positive, meaning that
they possess a single membrane and a thick cell wall and turn dark-blue or
violet when subjected to a laboratory staining method known as Gram’s method,
or Gram-negative, meaning that they have two membranes with a thin cell wall
and, when subjected to Gram’s method of staining, lose the stain or are
decolorized. Delafloxacin has completed four Phase 2 clinical trials, including
a Phase 2b clinical trial for the treatment of acute bacterial skin and skin
structure infections, or ABSSSI. We received results from this Phase 2b trial
in December 2011 and plan to commence the first of two planned Phase 3 trials
for the treatment of ABSSSI in the second half of 2012. The timing of our
second planned Phase 3 clinical trial will depend upon obtaining additional
funding beyond the proceeds of this contemplated offering. Based on our current
expectations regarding the availability of such funding and subject to the
results of these two trials, we anticipate submitting a New Drug Application
for delafloxacin for the treatment of ABSSSI as early as the fourth quarter of
2014 and for additional indications thereafter. Our second product candidate,
radezolid, is a next-generation, IV/oral oxazolidinone designed to be a potent
antibiotic with a safety profile permitting long-term treatment of resistant
infections, including those caused by MRSA. We have completed two Phase 2
clinical trials of radezolid. We are also pursuing development of RX-04, our
preclinical program partnered with Sanofi, S.A., which has produced new classes
of antibiotics that attach to a location on the bacterial ribosome to which no
other approved class of antibiotics bind and are designed to combat the most
difficult-to-treat, multi-drug resistant Gram-positive and Gram-negative
bacteria. Because its protein building function is essential for the life of
infection-causing bacteria, the bacterial ribosome is the target of most
marketed antibiotics, which work by binding to the ribosome and inhibiting its
function. In addition, our pipeline includes RX-05, an antibacterial discovery
program, and RX-06, an antifungal discovery program, both of which target newly
discovered binding sites within ribosomes.
We believe one of our key competitive advantages is our focus on the three-
dimensional properties of antibiotics, which is enabled by our proprietary drug
discovery platform. Unlike traditional approaches to antibiotic discovery,
which generally rely on random screening of chemical libraries to identify
potential compounds, our discovery team utilizes sophisticated, customized
computer software to simulate and predict in three-dimensions both inter- and
intra- molecular reactions and resulting properties of compounds including
absorption, distribution, metabolism, excretion and toxicology. We combine
these exclusive computational tools with our patent-protected, atomic-level
insights into the structure of the ribosome to systematically engineer novel
antibiotics to avoid resistance and optimize potency, spectrum, efficacy and
safety. As a result, we have created a highly efficient and productive drug
development engine based on our unique design strategy that effectively
leverages structure-based drug design, preparative medicinal chemistry,
ribosome biochemistry, molecular biology and pharmacology.
According to Datamonitor, in the seven major pharmaceutical markets, which
consist of the United States, Japan, the United Kingdom, Germany, France, Italy
and Spain, antibiotic product sales totaled approximately $20 billion in 2009
and, within the hospital market, approximately $8 billion was generated from
antibiotic sales in 2006. Staphylococcus skin and soft tissue infections in the
United States alone accounted for on average nearly 12 million physician and
emergency department visits annually in the years from 2001 to 2003 according
to the Centers for Disease Control, or CDC. In addition, the Infectious Disease
Society of America, or IDSA, estimated in 2004 that nearly two million
infections are developed in the hospital setting annually in the United States,
resulting in the deaths of 90,000 patients each year. Of these infections, 70%
are caused by bacteria that are resistant to one or more antibiotics used to
treat them, including those caused by MRSA. The CDC estimated that MRSA alone
caused 94,000 life-threatening infections and almost 19,000 deaths in 2005 in
the United States, exceeding the number of deaths caused by HIV/AIDS in that
year. Based on data provided by GlobalData for the U.S. pharmaceutical market
and the global pharmaceutical market, we estimate that the use of antibiotics
to treat MRSA has increased at a compounded annual growth rate of 18% for the
years from 2005 to 2010 and is forecasted to continue growing through 2017.
The three major branded antibiotics used for the treatment of serious
infections, Zyvox (linezolid), Cubicin (daptomycin) and Tygacil (tigecycline),
generated U.S. sales in 2011 of $640 million, $699 million and $148 million,
respectively. In addition, there were over four million courses of vancomycin,
a generic drug used to treat serious infections caused by resistant Gram-
positive bacteria like MRSA, dosed in 2009.
According to the Joint Commission, formerly the Joint Commission on
Accreditation of Healthcare Organizations, hospitals are generally required to
begin administering antibiotics to patients with serious infections within six
hours of presentation to the hospital, well in advance of the up to 48 hours
required to diagnose the particular bacteria causing the infection. As a
result, this first-line antibiotic therapy needs to offer a broad spectrum of
antibacterial coverage that includes MRSA. Because there is no single broad-
spectrum antibiotic available that is safe for first-line use and also has
potency against MRSA, according to Datamonitor, the current first-line standard
of care for serious infections is an antibiotic cocktail consisting of the
twice-daily intravenous, or IV, administration of vancomycin for MRSA coverage,
and one or more additional antibiotics to broaden the overall spectrum of
coverage. The use of vancomycin, a narrow-spectrum Gram-positive treatment, may
be increasingly limited due to its risk of adverse side effects and the rise
of vancomycin-resistant bacterial strains in recent years. According to
Datamonitor, these limitations often require the use of a second-line
treatment, such as Cubicin or Zyvox, for MRSA and other resistant Gram-positive
bacteria. However, as indicated in its prescribing information, Cubicin is only
available in an IV form and requires laboratory monitoring at least weekly for
toxic side effects. Although Zyvox has an available oral form, as indicated in
its prescribing information, it requires active monitoring for use beyond two
weeks due to the potential for significant adverse side effects, including bone
marrow suppression, or myelosuppression, and nerve damage, or neurotoxicity. In
addition, studies published in The New England Journal of Medicine and
Antimicrobial Agents and Chemotherapy have found that Cubicin and Zyvox have
also been associated with increasing drug resistance. As indicated in its
prescribing information, Tygacil, a broad-spectrum antibiotic, is generally
utilized as a third- or fourth-line antibiotic due to its greater risk of
mortality as compared to the active comparators in its clinical studies, and
the high rates of vomiting and nausea.
We believe that antibiotic resistance has eroded the efficacy and exacerbated
the limitations of current treatments, creating significant unmet needs for new
antibiotics that represent new treatment paradigms. In particular, these
include:
• the need for an effective and convenient first-line, broad-spectrum
antibiotic with coverage of MRSA that can be administered as a single
treatment, or monotherapy, primarily in hospitals during the critical
early period of a patient’s care when a specific diagnosis is not yet
available;
• the need for a potent antibiotic with a safety profile permitting long-
term treatment of resistant infections, including MRSA;
• the need for drugs that treat multi-drug resistant bacteria, which are
generally the most difficult to treat; and
• the ongoing need for new drugs to combat the continuing problem of drug
resistance.
Our unique drug discovery approach serves as the foundation for our pipeline
of clinical and earlier-stage product candidates, set forth below, that we
believe can address these unmet needs for the treatment of serious infections.
Delafloxacin. Delafloxacin is intended for use as an effective and convenient
first-line antibiotic primarily in hospitals prior to the availability of a
specific diagnosis. Unlike current first-line treatments, delafloxacin has the
potential to offer broad-spectrum coverage as a monotherapy, including for
MRSA, with both IV and oral formulations. In addition to strong Gram-positive
potency, delafloxacin has shown excellent in vitro activity against most Gram-
negative bacteria commonly found in the hospital setting. We are developing
both IV and oral formulations of delafloxacin to enable patients who begin IV
treatment in the hospital setting to transition to oral dosing for home-based
care, offering the potential to increase patient convenience, lower the overall
cost of treatment and reduce the length of hospital stays. We believe that
these attributes, combined with delafloxacin’s safety profile and reduced
probability of resistance, demonstrate the potential of delafloxacin to become
a new standard of care for first-line treatment of serious infections and
thereby reduce the need to switch to second-line, narrow-spectrum antibiotics.
We have received results from our Phase 2b clinical trial designed to compare
the efficacy of delafloxacin for the treatment of ABSSSI, including infections
caused by MRSA, to Zyvox (linezolid), with and without aztreonam, and
vancomycin, with and without aztreonam. Delafloxacin met primary and secondary
efficacy endpoints evaluated to date. Of note, although this Phase 2b trial was
not designed to demonstrate statistical significance, for the primary endpoint
of Investigators’ Global Assessment of Cure, delafloxacin demonstrated a
statistically significant efficacy advantage as compared to vancomycin.
Additionally, delafloxacin demonstrated numerical benefit over both Zyvox
(linezolid) and vancomycin in the secondary endpoint, cessation of lesion
spread and absence or resolution of fever at 48 to 72 hours. Based on this
analysis and other data, we believe delafloxacin has demonstrated a level of
efficacy that strongly supports our planned initiation of a Phase 3 study of
delafloxacin in the second half of 2012.
Radezolid. Radezolid is a next-generation oxazolidinone designed to meet the
need for a potent antibiotic with both IV and oral formulations and a safety
profile suitable for the treatment of serious infections, including ABSSSI and
severe community-acquired bacterial pneumonia, or CABP, and those caused by
MRSA, as well as long-term treatment of underserved serious infections, such
as osteomyelitis and prosthetic and joint infections. Radezolid has several
attributes allowing it to overcome known oxazolidinone resistance mechanisms
and has shown excellent in vitro activity against resistant Streptococcus
pneumoniae and MRSA. Unlike Zyvox and tedizolid, radezolid has also shown in
vitro activity against Haemophilus influenzae, Legionella pneumophila and
Moraxella catarrhalis, and other common causes of CABP. We believe that the
demonstrated broad-spectrum of coverage, potency and potential long-term safety
profile of radezolid give it the potential to become the antibiotic of choice
for multiple resistant infections and for treatment in populations, such as the
elderly and children, that might be vulnerable to myelosuppression caused by
other oxazolidinone treatments.
RX-04 Program. Our most advanced preclinical program, the RX-04 program, is
focused on using one novel binding site within the ribosome to design and
develop new classes of antibiotics to treat some of the most deadly and
difficult-to-treat, multi-drug resistant Gram-positive and Gram-negative
infections. We also are designing candidates through the RX-04 program to have
lower potential for resistance, lower potential for toxicity and potential for
IV-to-oral dosing. Using our proprietary drug discovery platform, we have
developed three novel classes of antibiotics in less than three years that bind
to this ribosomal site.
In June 2011, we entered into a collaboration and license agreement with Sanofi
related to our RX-04 program. Under this agreement, Sanofi has the right to
license an unlimited number of product candidates targeting this discrete
binding site within the ribosome. We retain all rights pertaining to our
proprietary drug discovery platform, including all other binding sites within
the ribosome and all future programs, as well as to any RX-04 compound that
Sanofi does not exercise its option to develop during the three-year term of
the collaboration. We have received $22.0 million through March 31, 2012 in
upfront and milestone payments under the collaboration, including the receipt
of a payment of $3.0 million from Sanofi in January 2012 for the achievement
of a research milestone. For each RX-04 product developed by Sanofi, we are
eligible for up to $9.0 million in potential research milestone payments, up
to $27.0 million in potential development milestone payments relating to
initiation of Phase 1, 2 and 3 clinical trials, up to $50.0 million in
potential regulatory milestone payments relating to approvals in various
jurisdictions including the United States, the European Union and Japan, up to
$100.0 million in potential commercial milestone payments, and tiered
percentage royalties of up to 10% on sales from products commercialized under
the agreement, if any. We also have the right under the collaboration to
co-commercialize one RX-04 product of our choosing with Sanofi in the United
States. We are currently collaborating with Sanofi on ongoing preclinical
development and lead generation and, as part of a comprehensive safety
assessment, we have just completed in vitro and in vivo profiling of the first
cohort of leads from the RX-04 program that demonstrated strong potency and
efficacy. These results have informed the next iteration of design and
optimization. We expect the results of this optimization round to inform the
selection of a lead compound in 2012 for toxicology studies followed by Phase
1 studies in humans.
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We were incorporated in Delaware in October 2000 under the name Rib-X Designs,
Inc. and changed our name to Rib-X Pharmaceuticals, Inc. in December 2000.
Our primary executive offices are located at 300 George Street, Suite 301, New
Haven, CT 06511-6663, and our telephone number is (203) 624-5606. Our website
address is www.rib-x.com.