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As filed with the Securities and Exchange Commission on August 17, 2009
Registration No. 333-155431
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
POST-EFFECTIVE
AMENDMENT NO. 1 TO
FORM
S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
DUSA PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Its Charter)
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New Jersey
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22-3103129 |
(State or Other Jurisdiction
of Incorporation or Organization)
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(I.R.S. Employer
Identification No.) |
25 Upton Drive
Wilmington, Massachusetts 01887
(Address of Principal Executive Offices) (Zip Code)
DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan
DUSA Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan
1991 Incentive Stock Option Plan Of Deprenyl USA, Inc.
DUSA Pharmaceuticals, Inc. 1994 Restricted Stock Option Plan
DUSA Pharmaceuticals, Inc. 1996 Omnibus Plan, As Amended
Stock Option Agreement For Richard C. Lufkin
Stock Option Agreements For Scott Lundahl
(Full Title of the Plan)
Nanette W. Mantell, Esq.
Reed Smith LLP
Princeton Forrestal Village
136 Main Street Suite 250
Princeton, New Jersey 08543-7839
(609) 514-8541
(Name and Address and Telephone of Agent for Service)
Copies to:
Robert F. Doman, President and Chief Executive Officer
DUSA Pharmaceuticals, Inc.
25 Upton Drive
Wilmington, Massachusetts 01887
(978) 657-7500
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.
(Check one)
Large accelerated filer o |
Accelerated filer o |
Non-accelerated
filer þ (do not check if smaller reporting company) |
Smaller reporting company o |
INTRODUCTORY STATEMENT
This Post-Effective Amendment to Registration Statements on Form S-8 constitutes
Post-Effective Amendment No. 1 to Registration Statement on Form S-8, Registration No. 333-155431,
filed November 18, 2008. This Post-Effective Amendment is being filed solely for the purpose of
updating the reoffer prospectus that forms a part of this Post-Effective Amendment relating to the
resale of control securities to be acquired by selling shareholders listed under the Selling
Securityholders section of the prospectus. The selling shareholders have acquired or will acquire
the securities pursuant to DUSAs various equity compensation plans. The reoffer prospectus
contained herein has been prepared in accordance with the requirements of Part I of Form S-3 and,
pursuant to General Instruction C of Form S-8, may be used for reoffers or resales of the shares
that have been or will be acquired by the selling security holders.
The inclusion of the individuals listed under the Selling Securityholders section of the
prospectus does not constitute a commitment to sell any or all of the stated number of shares of
common stock. The number of shares offered shall be determined from time to time by each selling
securityholder at their sole discretion and such individuals are listed as selling securityholders
solely to register the shares that each has received or will receive under DUSAs various equity
compensation plans.
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PROSPECTUS
1,313,250 Shares of Common Stock by Selling Securityholders
DUSA Pharmaceuticals, Inc.
The shares of common stock of DUSA Pharmaceuticals, Inc. covered by this prospectus may be
offered and sold to the public by certain selling securityholders of DUSA. The selling
securityholders have acquired or will acquire the shares under DUSAs 1991 Incentive Stock Option
Plan of Deprenyl USA, Inc. (Deprenyl USA, Inc. is the former name of DUSA Pharmaceuticals, Inc.),
1994 Restricted Stock Option Plan, 1996 Omnibus Plan, as amended, 2006 Equity Compensation Plan, as
amended, together with stock option agreements with Richard C. Lufkin and Scott Lundahl,
individually.
Our common stock is quoted on the Nasdaq Global Market under the symbol DUSA. On August 14,
2009, the closing price of a share of our common stock on the Nasdaq Global Market was $1.24 per
share.
Investing in our common stock involves risks. See Risk Factors beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is August 17, 2009.
TABLE OF CONTENTS
You should rely only on the information contained in this prospectus or any supplement,
including the documents that we incorporate by reference. We have not authorized anyone to provide
you with information different from that which is contained in or incorporated by reference to this
prospectus. We are offering to sell shares of common stock and seeking offers to buy shares of
common stock only in jurisdictions where offers and sales are permitted. The information contained
in this prospectus is accurate only as of the date of the prospectus, regardless of the time of
delivery of this prospectus or of any sale of the common stock.
DUSA PHARMACEUTICALS, INC.
We are a vertically integrated dermatology company that is developing and marketing
Levulan® photodynamic therapy, or PDT, and other products for common skin conditions.
Our marketed products include, among others, Levulan® Kerastick® 20% Topical
Solution with PDT, the BLU-U® brand light source, and ClindaReach®, which we
acquired.
Historically, we devoted most of our resources to advancing the development and marketing of
our Levulan® PDT/PD technology platform. In addition to our marketed products, our drug,
Levulan® brand of aminolevulinic acid HCl, or ALA, in combination with light, has been
studied in a broad range of medical conditions. When Levulan® is used and followed with
exposure to light to treat a medical condition, it is known as Levulan® PDT. When
Levulan® is used and followed with exposure to light to detect medical conditions, it is
known as Levulan® photodetection, or Levulan® PD. The Kerastick®
is our proprietary applicator that delivers Levulan®. The BLU-U® is our
patented light device.
The Levulan® Kerastick® 20% Topical Solution with PDT and the
BLU-U® were launched in the United States, or U.S., in September 2000 for the treatment
of non-hyperkeratotic actinic keratoses, or AKs, of the face or scalp under a former dermatology
collaboration. AKs are precancerous skin lesions caused by chronic sun exposure that can develop
over time into a form of skin cancer called squamous cell carcinoma. In addition, in September 2003
we received clearance from the United States Food and Drug Administration, or FDA, to market the
BLU-U® without Levulan® PDT for the treatment of moderate inflammatory acne
vulgaris and general dermatological conditions.
Sirius Laboratories, Inc., a dermatology specialty pharmaceuticals company, was founded in
2000 with a primary focus on the treatment of acne vulgaris and acne rosacea. Nicomide®,
its key product, is a vitamin-mineral product formerly prescribed by dermatologists. In March 2006,
DUSA acquired Sirius Laboratories, Inc. In April 2008, we were notified by Actavis Totowa, LLC,
the manufacturer of Nicomide®, that Actavis Totowa would cease manufacturing several
prescription vitamins, including Nicomide®, due to continuing discussions with the FDA.
As we previously disclosed, Actavis Totowa had received notice that the FDA considers prescription
dietary supplements to be unapproved new drugs. In response to this notification and subsequent
discussions with the FDA, we stopped the sale and distribution of Nicomide® as a
prescription product in June 2008.
On August 12, 2008, we entered into a worldwide non-exclusive patent License Agreement to our
patent covering Nicomide®, or License Agreement, with Rivers Edge Pharmaceuticals, LLC,
or Rivers Edge, and an amendment to our Settlement Agreement with Rivers Edge. The amendment to
the Settlement Agreement had allowed Rivers Edge to manufacture and market a prescription product
that could be substitutable for Nicomide® pursuant to the terms of the License Agreement
and changed certain payment obligations of Rivers Edge for sales of its substitutable product. In
consideration for granting the license, we were paid a share of the net revenues, as defined in the
License Agreement, of Rivers Edges licensed product sales. In April 2009, we and Rivers Edge
entered into an Amendment to the License Agreement, or License Amendment. The License Amendment
grants Rivers Edge an exclusive license to U.S. Patent, No. 6,979,468, and a license to use all
know-how and the trademark associated with the Licensed Products worldwide. Under the License
Amendment, we are required to transfer all of our rights, title and interest in and to DUSAs
patent, know-how and trademark relating to the Licensed Products (but not the copyright
registration relating to product labeling) to Rivers Edge upon our receipt of $5,000,000. Of the
$5,000,000, Rivers Edge is required to make a minimum guaranteed payment to us of $2,600,000, in
thirteen monthly installments of $200,000, subject to reduction under certain conditions, and pay
additional consideration of $2,400,000 payable over time based on a share of Rivers Edges net
revenues as defined in the License Amendment. The License Agreement, as amended, has a term of 30
months, subject to a further extension under certain circumstances to 48 months, and may be
terminated early by Rivers Edge on 30 days prior written notice. Under the License Agreement,
Rivers Edge has assumed all regulatory responsibilities for the Licensed Products. If the License
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Agreement is terminated prior to the payment of the $5,000,000, all of the rights and licenses
granted by us to Rivers Edge will revert to us. We are recording the revenue under the License
Amendment on a cash basis. We received the first $200,000 installment payment under the License
Amendment during the three-month period ended June 30, 2009. The Company has not received the
payments which were due on June 1, July 1 and August 1, 2009. We are evaluating our options to
collect the outstanding amounts due from Rivers Edge under the License Agreement, as amended, and
have not yet determined our course of action.
We are marketing Levulan® PDT under an exclusive worldwide license of patents and
technology from PARTEQ Research and Development Innovations, the licensing arm of Queens
University, Kingston, Ontario, Canada. In January, 2009, we filed a request for reexamination with
the U.S. Patent and Trademark Office of one of the Queens Universitys patents that cover our
approved indication for AK. We also own or license certain other patents relating to our
BLU-U® device and methods for using pharmaceutical formulations which contain our drug
and related processes and improvements. In the United States, DUSA®, DUSA
Pharmaceuticals, Inc.®, Levulan®, Kerastick®, BLU-U®,
Nicomide®, Nicomide-T®, ClindaReach®, Meted®, and
Psoriacap® are registered trademarks. Several of these trademarks are also registered in
Europe, Australia, Canada, and in other parts of the world. Numerous other trademark applications
are pending.
As of June 30, 2009, we had an accumulated deficit of approximately $144,311,000. We cannot
predict whether any of our products will achieve significant enough market acceptance or generate
sufficient revenues to enable us to become profitable on a sustainable basis. We recorded
significant impairment changes of goodwill during the fourth quarter of 2007 and the third quarter
of 2008.
As of June 30, 2009, we had a staff of 85 employees, including 2 part-time employees who
worked across all operating functions at DUSA.
Unless the context otherwise requires, the terms we, our, us, the Company and DUSA
refer to DUSA Pharmaceuticals, Inc., a New Jersey corporation.
We were incorporated on February 21, 1991, under the laws of the State of New Jersey. Our
principal executive offices are located at 25 Upton Drive, Wilmington, Massachusetts 01887
(telephone: (978) 657-7500).
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RISK FACTORS
Investing in our common stock is very speculative and involves a high degree of risk. You
should carefully consider and evaluate all of the information in, or incorporated by reference in,
this prospectus. The following are among the risks we face related to our business, assets and
operations. They are not the only ones we face. Any of these risks could materially and adversely
affect our business, results of operations and financial condition, which in turn could materially
and adversely affect the trading price of our common stock and you might lose all or part of your
investment.
This section contains forward-looking statements of our plans, objectives, expectations and
intentions. We use words such as anticipate, believe, expect, future, and intend and
similar expressions to identify forward-looking statements. Our actual results could differ
materially from those anticipated in these forward-looking statements for many reasons, including
the risk factors described below. You should not place undue reliance on these forward-looking
statements, which apply only as of the date of this prospectus.
Risks Related To DUSA
We Are Not Currently Profitable And May Not Be Profitable In The Future Unless We Can Successfully
Market And Sell Significantly Higher Quantities Of Our Products.
If We Do Not Become Profitable, We May Need More Capital.
We have approximately $16,382,000 in cash, cash equivalents and marketable securities as of June
30, 2009. Our cash, cash equivalents and marketable securities should be sufficient for current
operations for at least the next 12 months. If we are unable to become profitable in the near term,
we may have to reduce our headcount, curtail certain variable expenses, or raise funds through
financing transactions. We cannot predict whether financing will be available at all or on
reasonable terms.
If A Competitive Product Is Successful Our Market Share Could Decrease and Our Ability Become
Profitable Could Be Delayed
On May 30, 2006, we entered into a patent license agreement with PhotoCure ASA whereby we granted a
non-exclusive license to PhotoCure under the patents we license from PARTEQ, for esters of ALA.
Furthermore, we granted a non-exclusive license to PhotoCure for its existing formulations of its
Hexvix® and Metvix® (known in the United States as Metvixia®)
products for any DUSA patents that may issue or be licensed by us in the future. PhotoCure received
FDA approval to market Metvixia® for treatment of AKs in July 2004 and it is directly
competitive with our Levulan® Kerastick® product. Metvixia® is now
commercially available and its price is comparable to the price of Levulan®. We are
entitled to royalties from PhotoCure on its net sales of Metvixia, however, since it is marketed in
the U.S. by a large dermatology company, which has a large sales force and considerably more
resources than we have, our ability to maintain or increase our market could be significantly
hampered.
Our Ability To Become Profitable May Be Delayed Since We No Longer Sell Nicomide® As A
Prescription Product.
On August 12, 2008, we entered into a worldwide non-exclusive patent License Agreement to our
patent covering Nicomide® with Rivers Edge Pharmaceuticals, LLC and an amendment to our
Settlement Agreement with Rivers Edge which we entered into in October 2007 to settle certain
patent litigation. The amendment to the Settlement Agreement allows Rivers Edge to manufacture and
market a prescription product that could be substitutable for Nicomide® pursuant to the
terms of the License Agreement and changes certain payment obligations of Rivers Edge for sales of
its substitutable product.
In consideration for granting the license, we were paid a share of the net revenues, as defined in
the License Agreement, of Rivers Edges licensed product sales under the License Agreement. In
April 2009, we and Rivers Edge entered into an Amendment to the License Agreement (the License
Amendment). The License Amendment grants Rivers Edge an exclusive license to U.S. Patent, No.
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6,979,468, and a license to use all know-how and the trademark associated with the Licensed
Products worldwide. Under the License Amendment, we are required to transfer all of our rights,
title and interest in and to our patent, know-how and trademark relating to the Licensed Products
(but not the copyright registration relating to product labeling) to Rivers Edge upon our receipt
of $5,000,000. Of the $5,000,000, Rivers Edge is required to make a minimum guaranteed payment to
us of $2,600,000, in thirteen monthly installments of $200,000, subject to reduction under certain
conditions, and pay additional consideration of $2,400,000 payable over time based on a share of
Rivers Edges net revenues as defined in the License Amendment. We received the first $200,000
installment payment under the License Amendment during the three-month period ended June 30, 2009,
which is included in Product Revenues in the accompanying Consolidated Statements of Operations.
We have not received payments which were due on June 1, July 1 and August 1, 2009. We are
evaluating our options to collect the outstanding amounts due from Rivers Edge under the License
Agreement, as amended, and have not yet determined our course of action. The License Agreement, as
amended, has a term of 30 months, subject to a further extension under certain circumstances to 48
months, and may be terminated early by Rivers Edge on 30 days prior written notice to us. Under
the License Agreement, Rivers Edge has assumed all regulatory responsibilities for the Licensed
Products. If the License Agreement is terminated prior to the payment of the $5,000,000, all of the
rights and licenses granted by us to Rivers Edge will revert to us. Once we receive $5,000,000
under the terms of the License Agreement, we will no longer receive any revenues from sales of this
product. If the License Agreement is terminated before we receive $5,000,000, we may consider
selling the product in accordance with the Dietary Supplement Health and Education Act, but in that
case, we would expect volume and revenues to be lower than historical levels.
Another company has launched a substitutable niacinamide product. In July 2009, Rivers Edge filed
a lawsuit against it alleging infringement of this patent, and the validity of the
Nicomide® patent could be tested again. It is too early in the litigation to assess the
possible outcomes. Also, new products have been launched that are competing with
Nicomide®.
If Product Sales Do Not Continue to Increase, We May Not Be Able To Advance Development Of Our
Other Potential Products As Quickly As We Would Like To, Which Would Delay The Approval Process And
Marketing Of New Potential Products, if approved.
If we do not generate sufficient revenues from our approved products, we may be forced to delay or
abandon our development program for solid organ transplant recipients or other programs we may wish
to initiate. The pharmaceutical development and commercialization process is time consuming and
costly, and any delays might result in higher costs which could adversely affect our financial
condition and results of operations. Without sufficient product sales, we would need alternative
sources of funding. There is no guarantee that adequate funding sources could be found to continue
the development of our technology.
Any Failure To Comply With Ongoing Governmental Regulations In The United States And Elsewhere Will
Limit Our Ability To Market Our Products And Become Profitable.
The manufacture and marketing of our products are subject to continuing FDA review as well as
comprehensive regulation by the FDA and by state and local regulatory authorities. These laws
require, among other things:
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approval of manufacturing facilities, including adherence to good manufacturing
and laboratory practices during production and storage, |
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controlled research and testing of some of these products even after approval, |
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control of marketing activities, including advertising and labeling, and |
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state permits for the sale and distribution of products manufactured out-of-state. |
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If we, or any of our contract manufacturers, fail to comply with these requirements, we may be
limited in the jurisdictions in which we are permitted to sell our products. Additionally, if we or
our manufacturers fail to comply with applicable regulatory approval requirements, a regulatory
agency may:
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send warning letters, |
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impose fines and other civil penalties on us, |
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seize our products, |
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suspend our regulatory approvals, |
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cease the manufacture of our products, |
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refuse to approve pending applications or supplements to approved applications filed by us, |
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refuse to permit exports of our products from the United States, |
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require us to recall products, |
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require us to notify physicians of labeling changes and/or product related problems, |
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impose restrictions on our operations, and/or |
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criminally prosecute us. |
We and our manufacturers must continue to comply with current Good Manufacturing Practice
regulations, or cGMP, and Quality System Regulation, or QSR, and equivalent foreign regulatory
requirements. The cGMP requirements govern quality control and documentation policies and
procedures. In complying with cGMP and foreign regulatory requirements, we and our third-party
manufacturers will be obligated to expend time, money and effort in production, record keeping and
quality control to assure that our products meet applicable specifications and other requirements.
Manufacturing facilities are subject to ongoing periodic inspection by the FDA, including
unannounced inspections. We cannot guarantee that our third-party supply sources, including our
sole source supplier for the active ingredients in Levulan® and the BLU-U® or
our own Kerastick® facility, will continue to meet all applicable FDA regulations. If
we, or any of our manufacturers, including without limitation, the manufacturer of the
BLU-U®, who has received warning letters from the FDA, fail to maintain compliance with
FDA regulatory requirements, it would be time consuming and costly to remedy the problem(s) or to
qualify other sources. These consequences could have a significant adverse effect on our financial
condition and operations. As part of our FDA approval for the Levulan®
Kerastick® for AK, we were required to conduct two Phase IV follow-up studies. We
successfully completed the first study; and
submitted our final report on the second study to the FDA in January 2004. The FDA has requested
additional information, which was provided to them in June 2008. We are awaiting their response.
Additionally, if previously unknown problems with the product, a manufacturer or its facility are
discovered in the future, changes in product labeling restrictions or withdrawal of the product
from the market may occur. Any such problems could affect our ability to become profitable.
The Current Global Credit And Financial Market Conditions May Affect Our Business.
Sales of our products are dependent, in large part, on reimbursement from government health and
administration authorities, private health insurers, distribution partners and other organizations.
As a result of the current global credit and financial market conditions, government authorities
and private insurers may be unable to satisfy their reimbursement obligations or may delay payment.
In addition, federal and state health authorities may reduce Medicare and Medicaid reimbursements,
and private
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insurers may increase their scrutiny of claims. A reduction in the availability or
extent of reimbursement could negatively affect our product sales and revenues.
Due to the tightening of global credit, there may be disruption or delay in the performance by our
third-party contractors, suppliers or collaborators. We rely on third parties for several important
aspects of our business, including the active ingredient in Levulan® and key portion of
the BLU-U®, portions of our product manufacturing, royalty revenues, clinical
development of future collaboration products, conduct of clinical trials and the supply of raw
materials. If such third parties are unable to satisfy their commitments to us, our business would
be adversely affected. See Risk Factor Our Ability To Become Profitable May Be Delayed Since We
No Longer Sell Nicomide® As A Prescription Product.
If the Economic Slowdown Affects Our Market, Our Cash Burn Will Increase And Our Ability To Achieve
Profitability Will Be Delayed.
We are aware that a portion of our revenues is generated by patients that pay for their procedures
out-of-pocket. We believe that the recession may be causing some of these patients to postpone or
cancel their procedures, reducing our volume, and, if this continues, we will be required to use
more of our cash. This could cause a delay in our ability to achieve profitability on a sustainable
basis.
If any of our large customers were to suffer economic hardship and fail to pay us for their
purchases of our products, our ability to reach profitability could be delayed.
We Have Significant Losses And Anticipate Continued Losses.
We have a history of operating losses. We expect to have continued losses until sales of our
products increase substantially. We incurred net losses of $6,250,000, $14,714,000 and $31,350,000
for the years ended December 31, 2008, 2007 and 2006, respectively, and $2,460,000 for the
six-month period ended June 30, 2009. As of June 30, 2009, our accumulated deficit was
approximately $144,000,000. We cannot predict whether any of our products will achieve significant
enough market acceptance or generate sufficient revenues to enable us to become profitable on a
sustainable basis, if at all.
If We Are Unable To Obtain The Necessary Capital To Fund Our Operations, We Will Have To Delay Our
Development Program And May Not Be Able To Complete Our Clinical Trials.
We will need substantial additional funds to fully develop, manufacture, market and sell other
potential products. We may obtain funds through other public or private financings, including
equity financing, and/or through collaborative arrangements. Depending on the extent of available
funding, we may delay, reduce in scope or eliminate our solid organ transplant recipient, or SOTR,
research and development program. We may also choose to license rights to third parties to
commercialize products or technologies
that we would otherwise have attempted to develop and commercialize on our own which could reduce
our potential revenues.
The availability of additional capital to us is uncertain. There can be no assurance that
additional funding will be available to us on favorable terms, if at all. Any equity financing, if
needed, would likely result in dilution to our existing shareholders, and debt financing, if
available, would likely involve significant cash payment obligations and include restrictive
covenants that would adversely affect the operation of our business. Failure to raise capital if
needed could materially adversely affect our business, our financial condition, results of
operations and cash flows.
If We Are Not Successful With The Reexamination Of Our Patent, We Could Lose Market Share.
In January 2009, we filed a request for reexamination with the United States Patent and Trademark
Office, or USPTO, of one of the patents licensed from Queens University covering certain methods of
using our product, Levulan® , for our FDA-approved indication. The USPTO accepted our
request for reexamination during the first quarter of 2009. There is no guarantee that the process
will be successful since the USPTO reviews the entire prosecution history of a patent during a
reexamination and could
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determine that some or all of the patent claims are invalid. Typically, a
reexamination takes approximately 18 months to complete. The patent is due to expire in 2013. If
the USPTO finds that the patent is invalid, generic competitors could enter the market and we could
lose market share. This would adversely affect our financial condition and results of operations
and possibly prevent us from becoming profitable.
We Have Limited Patent Protection, And If We Are Unable To Protect Our Proprietary Rights,
Competitors Might Be Able To Develop Similar Products To Compete With Our Products And Technology.
Our ability to compete successfully depends, in part, on our ability to defend patents that have
issued, obtain new patents, protect trade secrets and operate without infringing the proprietary
rights of others. We have no compound patent protection for our Levulan® brand of the
compound ALA. Our basic ALA patents are for methods of detecting and treating various diseased
tissues using ALA (or related compounds called precursors), in combination with light. We own or
exclusively license ALA patents and patent applications related to the following:
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methods of using ALA and its unique physical forms in combination with light, |
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compositions and apparatus for those methods, and |
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unique physical forms of ALA. |
We also own patents covering our BLU-U® and our Kerastick®. However, other
third-parties may have blue light devices or drug delivery devices that do not infringe our
patents.
The patents relating to methods of using ALA for detecting or treating disease, other than for acne
and our approved indication for AKs of the face or scalp, started to expire in July 2009. The
patents covering our AK product do not start to expire until 2013. In January 2009, we filed an
application with the USPTO for reexamination of one of our patents. If the USPTO determines that
the patent is invalid, generic competitors could enter the market.
We have limited ALA patent protection outside the United States, which may make it easier for
third-parties to compete there. Our basic method of treatment patents and applications have
counterparts in only six foreign countries, and certain countries under the European Patent
Convention. Even where we have
patent protection, there is no guarantee that we will be able to enforce our patents. Additionally,
enforcement of a given patent may not be practicable or an economically viable alternative.
Some of the indications for which we may develop PDT therapies may not be covered by the claims in
any of our existing patents. Even with the issuance of additional patents to us, other parties are
free to develop other uses of ALA, including medical uses, and to market ALA for such uses,
assuming that they have obtained appropriate regulatory marketing approvals. ALA in the chemical
form has been commercially supplied for decades, and is not itself subject to patent protection.
There are reports of third-parties conducting clinical studies with ALA in countries outside the
United States where PARTEQ, the licensor of our ALA patents, does not have patent protection. In
addition, a number of third-parties are seeking patents for uses of ALA not covered by our patents.
These other uses, whether patented or not, and the commercial availability of ALA, could limit the
scope of our future operations because ALA products could come on the market which would not
infringe our patents but would compete with our Levulan® products even though they are
marketed for different uses.
On August 12, 2008, we entered into a worldwide non-exclusive patent License Agreement to our
patent covering Nicomide® with Rivers Edge and an amendment to our Settlement Agreement
with Rivers Edge. The amendment to the Settlement Agreement allows Rivers Edge to manufacture and
market a prescription product that could be substitutable for Nicomide® pursuant to the
terms of the License Agreement and changes certain payment obligations of Rivers Edge for sales of
its substitutable product. In consideration for granting the license, we were paid a share of the
net revenues, as defined in the
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License Agreement, of Rivers Edges licensed product sales under
the License Agreement. In April 2009, we and Rivers Edge entered into an Amendment to the License
Agreement (the License Amendment) originally entered into in August 2008. The License Amendment
grants Rivers Edge an exclusive license to U.S. Patent, No. 6,979,468, and a license to use all
know-how and the trademark associated with the Licensed Products worldwide. Under the License
Amendment, DUSA is required to transfer all of its rights, title and interest in and to DUSAs
patent know-how and trademark relating to the Licensed Products (but not the copyright registration
relating to product labeling) to Rivers Edge upon our receipt of $5,000,000. Of the $5,000,000,
Rivers Edge is required to make a minimum guaranteed payment to us of $2,600,000, in thirteen
monthly installments of $200,000, subject to reduction under certain conditions, and pay additional
consideration of $2,400,000 payable over time based on a share of Rivers Edges net revenues as
defined in the License Amendment. We received the first $200,000 installment payment under the
License Amendment during the three-month period ended June 30, 2009, which is included in Product
Revenues in the accompanying Consolidated Statements of Operations. We have not received payments
which were due on June 1, July 1 and August 1, 2009. We are evaluating our options to collect the
outstanding amounts due from Rivers Edge under the License Agreement, as amended, and have not yet
determined our course of action. The License Agreement, as amended, has a term of 30 months,
subject to a further extension under certain circumstances to 48 months, and may be terminated
early by Rivers Edge on 30 days prior written notice to us. Under the License Agreement, Rivers
Edge has assumed all regulatory responsibilities for the Licensed Products. If the License
Agreement is terminated prior to the payment of the $5,000,000, all of the rights and licenses
granted by us to Rivers Edge will revert to us.
Another company has launched a substitutable niacinamide product. In July 2009, Rivers Edge filed
a lawsuit against them alleging infringement of this patent, and the validity of the
Nicomide® patent could be tested again. It is too early in the litigation to assess the
possible outcomes. Also, new products have been launched that are competing with
Nicomide®. These events could negatively impact our royalty revenues and delay our
ability to be profitable.
Furthermore, PhotoCure received FDA approval to market Metvixia® for treatment of AKs in
July 2004, and this product, which is directly competitive with our Levulan®
Kerastick® product, is now
commercially available. While we are entitled to royalties from PhotoCure on its net sales of
Metvixia®, a large dermatology company has the marketing rights in the U.S., which may
adversely affect our ability to maintain or increase our Levulan® market.
While we attempt to protect our proprietary information as trade secrets through agreements with
each employee, licensing partner, consultant, university, pharmaceutical company and agent, we
cannot guarantee that these agreements will provide effective protection for our proprietary
information. It is possible that all of the following issues could negatively impact our ability to
be profitable:
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these persons or entities might breach the agreements, |
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we might not have adequate remedies for a breach, and/or |
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our competitors will independently develop or otherwise discover our trade secrets. |
Litigation Is Expensive And We May Not Be Able To Afford The Costs.
The costs of litigation or any proceeding relating to our intellectual property or contractual
rights could be substantial even if resolved in our favor. Some of our competitors have far greater
resources than we do and may be better able to afford the costs of complex litigation. Also, in a
lawsuit against a third-party for infringement of our patents in the United States, that
third-party may challenge the validity of our patent(s) as could happen in the Rivers Edge
litigation with another company mentioned above. We cannot guarantee that a third-party will not
claim, with or without merit, that our patents are not valid or that we have infringed their
patent(s) or misappropriated their proprietary material. We could get drawn or decide to join into,
this litigation. Defending these types of legal actions involve considerable expense and could
negatively affect our financial results.
8
Additionally, if a third-party were to file a United States patent application, or be issued a
patent claiming technology also claimed by us in a pending United States application(s), we may be
required to participate in interference proceedings in the USPTO to determine the priority of the
invention. A third-party could also request the declaration of a patent interference between one of
our issued United States patents and one of its patent applications. Any interference proceedings
likely would require participation by us and/or PARTEQ, which could involve substantial legal fees
and result in a loss or lessening of our patent protection.
Since We Now Operate The Only FDA Approved Manufacturing Facility For The Kerastick® And
Continue To Rely Heavily On Sole Suppliers For The Manufacture Of Levulan®, The
BLU-U®, And Meted®, Any Supply Or Manufacturing Problems Could Negatively
Impact Our Sales As Occurred With Nicomide®.
If we experience problems producing Levulan® Kerastick® units in our
facility, or if any of our contract suppliers fail to supply our requirements for products, our
business, financial condition and results of operations would suffer. Although we have received
approval by the FDA to manufacture the BLU-U® and the Levulan®
Kerastick® in our Wilmington, Massachusetts facility, at this time, with respect to the
BLU-U® , we expect to utilize our own facility only as a back-up to our current third
party manufacturer or for repairs.
Manufacturers and their subcontractors often encounter difficulties when commercial quantities of
products are manufactured for the first time, or large quantities of products are manufactured,
including problems involving:
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product yields, |
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quality control, |
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component and service availability, |
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compliance with FDA regulations, and |
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the need for further FDA approval if manufacturers make material
changes to manufacturing processes and/or facilities. |
We cannot guarantee that problems will not arise with production yields, costs or quality as we and
our suppliers manufacture our products. Any manufacturing problems could delay or limit our
supplies which would hinder our marketing and sales efforts. If our facility, any facility of our
contract manufacturers, or any equipment in those facilities is damaged or destroyed, we may not be
able to quickly or inexpensively replace it. Likewise, if there are quality or supply problems with
any components or materials needed to manufacturer our products, we may not be able to quickly
remedy the problem(s). Any of these problems could cause our sales to suffer and could increase
costs.
The third-party contract relating to the supply of the active ingredient in Levulan® is
scheduled to expire in December of this year. If we cannot renew this agreement on terms which are
acceptable to us, we would need to find a new source of supply. If we have any delay or problems
with a new manufacturer, our revenues and results of operations could suffer.
We Have Only Limited Experience Marketing And Selling Pharmaceutical Products Outside of the United
States And As A Result, Our Revenues From Product Sales May Suffer.
If we are unable to successfully market and sell sufficient quantities of our products, revenues
from product sales will be lower than anticipated and our financial condition may be adversely
affected. We are responsible for marketing our products in the United States and the rest of the
world, except Canada, Latin America and parts of Asia, where we have distributors. We are in
negotiations with Stiefel, our distributor in Latin America, because they did not purchase the
required minimum number of Kerastick®
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units under our agreement. Both parties have the
right to terminate the contract. Stiefel has announced that it plans to be acquired by
GlaxoSmithKline, or GSK, and we do not know whether GSK wants to continue to distribute the
Levulan® Kerastick®. If our sales and marketing efforts fail, then sales of
the Levulan® Kerastick®, the BLU-U®, and other products will be
adversely affected, which would adversely affect our financial condition.
The Commercial Success Of Any Product That We May Develop Will Depend Upon The Degree Of Market
Acceptance Of Our Products Among Physicians, Patients, Health Care Payors, Private Health Insurers
And The Medical Community.
Our ability to commercialize any product that we may develop will be highly dependent upon the
extent to which the product gains market acceptance among physicians, patients, health care payors,
such as Medicare and Medicaid, private health insurers, including managed care organizations and
group purchasing organizations, and the medical community. If a product does not achieve an
adequate level of acceptance, we may not generate material product revenues, and we may not become
profitable. The degree of market acceptance of our currently marketed products and our SOTR product
candidate, if approved for commercial sale, will depend on a number of factors, including:
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the effectiveness, or perceived effectiveness, of our product in
comparison to competing products; |
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the existence of any significant side effects, as well as their
severity in comparison to any competing products, |
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potential advantages over alternative treatments, |
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the ability to offer our product for sale at competitive prices, |
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relative convenience and ease of administration, |
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the strength of marketing and distribution support, and |
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sufficient third-party coverage or reimbursement. |
If We Cannot Improve Physician Reimbursement And/Or Convince More Private Insurance Carriers To
Adequately Reimburse Physicians For Our Product, Sales May Suffer.
Without adequate levels of reimbursement by government health care programs and private health
insurers, the market for our Levulan® Kerastick® for AK therapy will be
limited. While we continue to support efforts to improve reimbursement levels to physicians and are
working with the major private insurance carriers to improve coverage for our therapy, if our
efforts are not successful, broader adoption of our therapy and sales of our products could be
negatively impacted. Although positive reimbursement changes related to AK were made over the last
five years, some physicians still believe that reimbursement levels do not fully reflect the
required efforts to routinely execute our therapy in their practices.
If insurance companies do not cover our products, or stop covering our products which are covered,
our sales could be dramatically reduced.
We Have Only Three Therapies That Have Received Regulatory Approval Or Clearance, And We Cannot
Predict Whether We Will Ever Develop Or Commercialize Any Other Levulan® Products.
Our Potential Products Are In Early Stages Of Development And May Never Result In Any Commercially
Successful Products.
To be profitable, we must successfully research, develop, obtain regulatory approval for,
manufacture, introduce, market and distribute our products. Except for Levulan® PDT for
AKs, the BLU-U® for acne,
10
the ClindaReach® pledget and several other products
we acquired in our merger with Sirius, all of our other potential product candidates are at an
early stage of development and subject to the risks of failure inherent in the development of new
pharmaceutical products and products based on new technologies. These risks include:
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delays in product development, clinical testing or manufacturing, |
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unplanned expenditures in product development, clinical testing or manufacturing, |
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failure in clinical trials or failure to receive regulatory approvals, |
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emergence of superior or equivalent products, |
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inability to market products due to third-party proprietary rights, and |
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failure to achieve market acceptance. |
We cannot predict how long the development of our investigational stage products will take or
whether they will be medically effective. We cannot be sure that a successful market will continue
to develop for our Levulan® drug technology.
We Must Receive Separate Approval For Any Drug or Medical Device Products Before We Can Sell Them
Commercially In The United States Or Abroad.
Any potential Levulan® product will require the approval of the FDA before it can be
marketed in the United States. Before an application to the FDA seeking approval to market a new
drug, called an NDA, can be filed, a product must undergo, among other things, extensive animal
testing and human clinical trials. The process of obtaining FDA approvals can be lengthy, costly,
and time-consuming. Following the acceptance of an NDA, the time required for regulatory approval
can vary and is usually one to three years or more. The FDA may require additional animal studies
and/or human clinical trials before granting approval. Our Levulan® PDT products are
based on relatively new technology. To the best of our knowledge, the FDA has approved only three
drugs for use in photodynamic therapy, including Levulan® . This factor may lengthen the
approval process. We face much trial and error and we may fail at numerous stages along the way.
We cannot predict whether we will obtain any other regulatory approvals. Data obtained from
preclinical testing and clinical trials can be susceptible to varying interpretations which could
delay, limit or prevent regulatory approvals. Future clinical trials may not show that
Levulan® PDT or photodetection, known as PD, is safe and effective for any new use we
may study. In addition, delays or disapprovals may be encountered based upon additional
governmental regulation resulting from future legislation or administrative action or changes in
FDA policy.
We have been informed by FDA that the agency does not believe that our application for Orphan Drug
designation of use of Levulan® in immunosuppressed solid organ transplant recipients
should be granted. If we cannot obtain this designation, we may not continue to develop this
indication. We have requested a meeting with the FDA to provide further clarification on the
application and the related target population.
We have been informed by FDA that our 510(k) application for clearance of our BLU-U® to
treat severe acne requires additional clinical data. After further discussions with FDA, we may
decide to withdraw this application.
Because Of The Nature Of Our Business, The Loss Of Key Members Of Our Management Team Could Delay
Achievement Of Our Goals.
We are a small company with only 85 employees, including 2 part-time employees, as of June 30,
2009. We are highly dependent on several key officer/employees with specialized scientific and
technical skills
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without whom our business, financial condition and results of operations would
suffer, especially in the photodynamic therapy portion of our business. The photodynamic therapy
industry is still quite small and the number of experts is limited. The loss of these key employees
could cause significant delays in achievement of our business and research goals since very few
people with their expertise could be hired. Our growth and future success will depend, in large
part, on the continued contributions of these key individuals as well as our ability to motivate
and retain other qualified personnel in our specialty drug and light device areas.
Collaborations With Outside Scientists May Be Subject To Restriction And Change.
We work with scientific and clinical advisors and collaborators at academic and other institutions
that assist us in our research and development efforts. These scientists and advisors are not our
employees and may have other commitments that limit their availability to us. Although our advisors
and collaborators generally agree not to do competing work, if a conflict of interest between their
work for us and their work for another entity arises, we may lose their services. In addition,
although our advisors and
collaborators sign agreements not to disclose our confidential information, it is possible that
valuable proprietary knowledge may become publicly known through them.
Risks Related To Our Industry
Product Liability And Other Claims Against Us May Reduce Demand For Our Products Or Result In
Damages.
We Are Subject To Risk From Potential Product Liability Lawsuits Which Could Negatively Affect Our
Business.
The development, manufacture and sale of medical products expose us to product liability claims
related to the use or misuse of our products. Product liability claims can be expensive to defend
and may result in significant judgments against us. A successful claim could materially harm our
business, financial condition and results of operations. Additionally, we cannot guarantee that
continued product liability insurance coverage will be available in the future at acceptable costs.
If the cost is too high, we may have to self-insure.
Our Business Involves Environmental Risks And We May Incur Significant Costs Complying With
Environmental Laws And Regulations.
We have used various hazardous materials, such as mercury in fluorescent tubes in our research and
development activities. We are subject to federal, state and local laws and regulations which
govern the use, manufacture, storage, handling and disposal of hazardous materials and specific
waste products. We believe that we are in compliance in all material respects with currently
applicable environmental laws and regulations. However, we cannot guarantee that we will not incur
significant costs to comply with environmental laws and regulations in the future. We also cannot
guarantee that current or future environmental laws or regulations will not materially adversely
affect our operations, business or assets. In addition, although we believe our safety procedures
for handling and disposing of these materials comply with federal, state and local laws and
regulations, we cannot completely eliminate the risk of accidental contamination or injury from
these materials. In the event of such an accident, we could be held liable for any resulting
damages, and this liability could exceed our resources.
We May Not Be Able To Compete Against Traditional Treatment Methods Or Keep Up With Rapid Changes
In The Biotechnology And Pharmaceutical Industries That Could Make Some Or All Of Our Products
Non-Competitive Or Obsolete.
Competing Products And Technologies Based On Traditional Treatment Methods May Make Our Products Or
Potential Products Noncompetitive Or Obsolete.
Well-known pharmaceutical, biotechnology and medical device companies are marketing
well-established therapies for the treatment of AKs and acne. Doctors may prefer to use familiar
methods, rather than trying our products. Reimbursement issues affect the economic competitiveness
of our
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products as compared to other more traditional therapies.
Many companies are also seeking to develop new products and technologies, and receiving approval
for treatment of AKs and acne. Our industry is subject to rapid, unpredictable and significant
technological change. Competition is intense. Our competitors may succeed in developing products
that are safer or more effective than ours. Many of our competitors have substantially greater
financial, technical and marketing resources than we have. In addition, several of these companies
have significantly greater experience than we do in developing products, conducting preclinical and
clinical testing and obtaining regulatory approvals to market products for health care.
We cannot guarantee that new drugs or future developments in drug technologies will not have a
material adverse effect on our business. Increased competition could result in:
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price reductions, |
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lower levels of third-party reimbursements, |
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failure to achieve market acceptance, and |
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loss of market share, any of which could adversely affect our
business. Further, we cannot give any assurance that developments by
our competitors or future competitors will not render our technology
obsolete. |
On May 30, 2006, we entered into a patent license agreement with PhotoCure ASA whereby we granted a
non-exclusive license to PhotoCure under the patents we license from PARTEQ, for esters of ALA.
Furthermore, we granted a non-exclusive license to PhotoCure for its existing formulations of its
Hexvix® and Metvix ® (known in the United States as Metvixia®)
products for any DUSA patents that may issue or be licensed by us in the future. PhotoCure received
FDA approval to market Metvixia® for treatment of AKs in July 2004 and it is directly
competitive with our Levulan® Kerastick® product. Metvixia® is now
commercially available and its price is comparable to the price of Levulan®. We are
entitled to royalties from PhotoCure on its net sales of Metvixia, however since it is marketed in
the U.S. by a large dermatology company which has a large sales force and considerably more
resources than we have, our ability to maintain or increase our market could be significantly
hampered.
Our Competitors In The Biotechnology And Pharmaceutical Industries May Have Better Products,
Manufacturing Capabilities Or Marketing Expertise.
We are aware of several companies commercializing and/or conducting research with ALA or
ALA-related compounds, including: medac GmbH and photonamic GmbH & Co. KG (Germany); Biofrontera,
PhotoTherapeutics, Inc. (U.K.) and PhotoCure ASA (Norway). Photocure has entered into a marketing
agreement with Galderma S.A. for countries outside of Nordic countries for certain dermatology
indications. We also anticipate that we will face increased competition as the scientific
development of PDT and PD advances and new companies enter our markets. Several companies are
developing PDT agents other than Levulan®. These include: QLT Inc. (Canada); Axcan
Pharma Inc. (U.S.); Miravant, Inc. (U.S.); and Pharmacyclics, Inc. (U.S.). There are many
pharmaceutical companies that compete with us in the field of dermatology, particularly in the acne
and rosacea markets.
Axcan Pharma Inc. has received FDA approval for the use of its product, PHOTOFRIN®, for
PDT in the treatment of high grade dysplasia associated with Barretts Esophagus. Axcan is the
first company to market a PDT therapy for this indication for which we designed our proprietary
sheath device and have conducted pilot clinical trials.
We expect that our principal methods of competition with other PDT products will be based upon such
factors as:
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the ease of administration of our method of PDT, |
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the degree of generalized skin sensitivity to light, |
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the number of required doses, |
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the selectivity of our drug for the target lesion or tissue of interest, and |
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the type and cost of our light systems. |
Our primary competition in the acne market includes oral and topical antibiotics, other topical
prescription and over-the-counter products, as well as various laser and non-laser light
treatments. The market is highly competitive and other large and small companies have more
experience than we do which could make it difficult for us to penetrate the market. The entry of
new products from time to time would likely cause us to lose market share.
Risks Related To Our Stock
Our Common Stock May Not Continue To Trade On The Nasdaq Global Market, Which Could Reduce The
Value Of Your Investment And Make Your Shares More Difficult To Sell.
In order for our common stock to trade on the Nasdaq Global Market, we must continue to meet the
listing standards of that market. Among other things, those standards require that our common stock
maintain a minimum closing bid price of at least $1.00 per share. Recently, our common stock has
traded at prices near and below $1.00. On October 16, 2008, and several times since then, Nasdaq
suspended the enforcement of rules requiring a minimum $1.00 closing bid price, but the suspension
ended July 31, 2009, and the rule is now in force again. If we do not continue to meet Nasdaqs
applicable minimum listing standards, Nasdaq could delist us from the Nasdaq Global Market. If our
common stock is delisted from the Nasdaq Global Market, we could seek to have our common stock
listed on the Nasdaq Capital Market or other Nasdaq markets. However, delisting of our common stock
from the Nasdaq Global Market could hinder your ability to sell, or obtain an accurate quotation
for the price of, your shares of our common stock. Delisting could also adversely affect the
perception among investors of DUSA and its prospects, which could lead to further declines in the
market price of our common stock. Delisting would also make it more difficult and expensive for us
to raise capital. In addition, delisting might subject us to a Securities and Exchange Commission
rule that could adversely affect the ability of broker-dealers to sell or make a market in our
common stock, thus hindering your ability to sell your shares.
Our Results Of Operations And General Market Conditions For Specialty Pharmaceutical And
Biotechnology Stocks Could Result In Sudden Changes In The Market Value Of Our Stock.
The price of our common stock has been highly volatile. These fluctuations create a greater risk of
capital losses for our shareholders as compared to less volatile stocks. From January 1, 2008 to
August 10, 2009, the price of our stock has ranged from a low of $0.87 to a high of $2.58. Factors
that contributed to the volatility of our stock during this period included:
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quarterly levels of product sales; |
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clinical trial results; |
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general market conditions; |
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patent litigation; |
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increased marketing activities or press releases; and |
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changes in third-party payor reimbursement for our therapy. |
The significant general market volatility in similar stage pharmaceutical and biotechnology
companies made the market price of our common stock even more volatile.
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Significant Fluctuations In Orders For Our Products, On A Monthly And Quarterly Basis, Are Common
Based On External Factors And Sales Promotion Activities. These Fluctuations Could Increase The
Volatility Of Our Stock Price.
The price of our common stock may be affected by the amount of quarterly shipments of our products
to end-users. Since our PDT products are still in relatively early stages of adoption, and sales
volumes are still low, a number of factors could affect product sales levels and growth rates in
any period. These could include the level of penetration of new markets outside of the United
States, the timing of medical conferences, sales promotion activities, and large volume purchases
by our higher usage customers. In addition, seasonal fluctuations in the number of patients seeking
treatment at various times during the year could impact sales volumes. These factors could, in
turn, affect the volatility of our stock price.
If Outstanding Options, Warrants And Rights Are Converted, The Value Of The Shares Of Common Stock
Outstanding Just Prior To The Conversion Will Be Diluted.
As of August 10, 2009, there were outstanding options and warrants to purchase 4,989,000 shares of
common stock, with exercise prices ranging from $1.08 to $31.00 per share for options, and exercise
prices ranging from $2.85 to $6.00 per share for warrants. In addition, there are 393,250 shares of
unvested common stock. The holders of the options and warrants have the opportunity to profit if
the market price for the common stock exceeds the exercise price of their respective securities,
without assuming the risk of ownership. The holders may exercise their securities during a time
when we would likely be able to raise capital from the public on terms more favorable than those
provided in these securities.
Effecting A Change Of Control Of DUSA Would Be Difficult, Which May Discourage Offers For Shares Of
Our Common Stock.
Our certificate of incorporation authorizes the board of directors to issue up to 100,000,000
shares of stock, 40,000,000 of which are common stock. The board of directors has the authority to
determine the price, rights, preferences and privileges, including voting rights, of the remaining
60,000,000 shares without any further vote or action by the shareholders. The rights of the holders
of our common stock will be subject to, and may be adversely affected by, the rights of the holders
of any preferred stock that may be issued in the future.
On September 27, 2002, we adopted a shareholder rights plan at a special meeting of DUSAs board of
directors. The rights plan could discourage, delay or prevent a person or group from acquiring 15%
or more of our common stock, thereby limiting, perhaps, the ability of our shareholders to benefit
from such a transaction.
The rights plan provides for the distribution of one right as a dividend for each outstanding share
of our common stock to holders of record as of October 10, 2002. Each right entitles the registered
holder to purchase one one-thousandths of a share of preferred stock at an exercise price of $37.00
per right. The rights will be exercisable subsequent to the date that a person or group either has
acquired, obtained the right to acquire, or commences or discloses an intention to commence a
tender offer to acquire, 15% or more of our outstanding common stock or if a person or group is
declared an Adverse Person, as such term is defined in the rights plan. The rights may be
redeemed by DUSA at a redemption price of one one-hundredth of a cent per right until ten days
following the date the person or group acquires, or discloses an intention to acquire, 15% or more,
as the case may be, of DUSA, or until such later date as may be determined by the our board of
directors.
Under the rights plan, if a person or group acquires the threshold amount of common stock, all
holders of rights (other than the acquiring person or group) may, upon payment of the purchase
price then in effect, purchase shares of common stock of DUSA having a value of twice the purchase
price. In the event that we are involved in a merger or other similar transaction where DUSA is not
the surviving corporation, all holders of rights (other than the acquiring person or group) shall
be entitled, upon payment of the purchase price then in effect, to purchase common stock of the
surviving corporation having a value of twice the purchase price. The rights will expire on October
10, 2012, unless previously redeemed. Our
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board of directors has also adopted certain amendments to DUSAs certificate of incorporation
consistent with the terms of the rights plan.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report, including the Managements Discussion and Analysis of Financial Condition and Results
of Operations, contains various forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934 which represent our
expectations or beliefs concerning future events, including, but not limited to managements
statements regarding our focus for 2009, our use of estimates and assumptions in the preparation of
our financial statements and policies and impact on us of the adoption of certain accounting
standards, managements beliefs regarding the unique nature of Levulan® and its use and
potential use, expectations regarding the enrollment and timing of results of clinical trials and
investigator studies, future development of Levulan® and our other products and other
potential indications, beliefs concerning manufacture of the BLU-U®, intention to pursue
licensing, marketing, co-promotion, collaboration or acquisition opportunities, status of clinical
programs for all other indications and beliefs regarding potential efficacy and marketing, our
beliefs regarding the safety, simplicity, reliability and cost-effectiveness of certain light
sources, expectations regarding additional market expansion and increased sales, expectations
regarding the marketing and distribution of Levulan® Kerastick® by Daewoong
Pharmaceutical Co., Ltd. and Stiefel Laboratories, Inc., beliefs regarding the clinical benefit of
Levulan® PDT for other indications, expectations regarding the confidentiality of our
proprietary information, statements of our intentions to seek additional U.S. and foreign
regulatory approvals, and to market and increase sales outside the U.S., beliefs regarding
regulatory classifications, filings, timelines, off-label use and environmental compliance, beliefs
concerning patent disputes and litigation, intentions to defend our patent estate, the impact of a
third-partys regulatory compliance and fulfillment of contractual obligations, beliefs concerning
the impact of price increases, expectations of increases or decreases in cost of product sales,
expected use of cash resources, requirements of cash resources for our future liquidity, beliefs
regarding investments, beliefs regarding economic conditions, beliefs concerning increased margins,
expectations regarding outstanding options and warrants and our dividend policy, anticipation of
increases or decreases in personnel, beliefs regarding the effect of reimbursement policies on
revenues and acceptance of our therapies, expectations for future strategic opportunities and
research and development programs and expenses, expectations for continuing operating losses and
competition including from Metvixia®, expectations for growth of PDT segment revenues
and reduction of Non-PDT segment revenues, expectations regarding the adequacy and availability of
insurance, expectations regarding general and administrative costs, expectations regarding legal
expenses, sales and marketing costs and research and development costs, levels of interest income
and our capital resource needs, intention to raise additional funds to meet capital requirements
and the potential dilution and impact on our business, potential for additional inspection and
testing of our manufacturing facilities or additional FDA actions, beliefs regarding the adequacy
of our inventory of Kerastick® and BLU-U® units, our manufacturing
capabilities and the impact of inventories on revenues, beliefs regarding interest rate risks to
our investments and effects of inflation, beliefs regarding the impact of any current or future
legal proceedings, dependence on key personnel, and beliefs concerning product liability insurance,
the enforceability of our patents, the impact of generic products, our beliefs regarding our
sales
and marketing efforts, competition with other companies, the adoption of our products, and the
outcome of such efforts, our beliefs regarding the use of our products and technologies by third
parties, our beliefs regarding our compliance with applicable laws, rules and regulations, our
beliefs regarding available reimbursement for our products, our beliefs regarding the current and
future clinical development and testing of our potential products and technologies and the costs
thereof, the volatility of our stock price, the impact of our rights plan, the possibility that the
holders of options and warrants will purchase our common stock by exercising these securities,
statements regarding milestone payments to former Sirius shareholders, statements regarding the
possibility of other companies distributing our products, statements regarding failure to renew the
agreement with Sochinaz, statements regarding our royalty revenues, statements regarding the impact
of our marketing and sales efforts on revenues and financial conditions and statements regarding
the termination of the agreement with Rivers Edge. These
forward-looking statements are further qualified by important factors that could cause actual
results to
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differ materially from those in the forward-looking statements. These factors include,
without limitation, changing market and regulatory conditions, actual clinical results of our
trials, the impact of competitive products, pricing and timely development, FDA and foreign
regulatory approval, and market acceptance of our products, environmental risks relating to our
products, reliance on third-parties for the production, manufacture, sales and marketing of our
products, the availability of products for acquisition and/or license on terms agreeable to us,
sufficient sources of funds and profitability, the securities regulatory process, the maintenance
of our patent portfolio and ability to obtain competitive levels of reimbursement by third-party
payors, none of which can be assured. Results actually achieved may differ materially from expected
results included in these statements as a result of these or other factors.
You should read and interpret any forward-looking statements together with the following
documents:
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our most recent Annual Report on Form 10-K; |
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our most recent Quarterly Report on Form 10-Q; |
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our most recent Current Reports on Form 8-K; |
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the risk factors contained in this prospectus under the caption Risk Factors; and |
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our other filings with the SEC. |
Any forward-looking statement speaks only as of the date on which that statement is made. We
will not update any forward-looking statement to reflect events or circumstances that occur after
the date on which such statement is made.
USE OF PROCEEDS
DUSA will not receive any proceeds from the sale of shares of common stock which may be sold
pursuant to this prospectus for the respective accounts of the selling securityholders. All such
proceeds, net of brokerage commissions, if any, will be received by the selling securityholders.
See the sections titled Selling Securityholders and Plan of Distribution.
17
SELLING SECURITYHOLDERS
This prospectus relates to shares of common stock to be offered by the selling
securityholders. The table below, including the footnotes, presents information regarding the
selling securityholders and the shares of our common stock that the selling securityholders may
offer and sell from time to time under this prospectus. The inclusion in the table of the
individuals named therein shall not be deemed to be an admission that any such individuals are
affiliates of DUSA.
The following is a list, as of July 31, 2009, of the selling securityholders and the number of
shares beneficially owned by each selling securityholder. The number of shares in the column
Number of Shares Owned represents the total number of shares that a selling security holder
currently owns or has the right to acquire within sixty (60) days of July 31, 2009. The number of
shares in the columns Number of Shares to be Offered represent all of the shares that a selling securityholder may offer under this
prospectus. The table and footnotes assume that the selling securityholders will sell all of such
shares. However, because the selling securityholders may sell all or some of their shares under
this prospectus from time to time, or in another permitted manner, we cannot assure you as to the
actual number of shares that will be sold by the selling securityholders or that will be held by
the selling securityholders after completion of any sales. We do not know how long the selling
securityholders will hold the shares before selling them. Information concerning the selling
securityholders may change from time to time and changed information will be presented in a
supplement to this prospectus if and when necessary and required. Beneficial ownership is
determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Securities Exchange
Act of 1934, as amended.
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Number of |
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Number of |
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Number of |
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Percentage of |
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Shares |
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Shares to be |
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Shares Owned |
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Shares Owned |
Name |
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Owned |
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Offered(1)(2) |
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After Offering |
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After Offering |
John H. Abeles (3) |
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124,500 |
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85,000 |
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19,500 |
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* |
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David M. Bartash (4) |
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110,500 |
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95,000 |
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15,500 |
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* |
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Mark Carota (5) |
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132,500 |
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132,500 |
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0 |
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* |
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Alexander W. Casdin (6) |
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225,000 |
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25,000 |
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200,000 |
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* |
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Richard C. Christopher (7) |
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107,625 |
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102,625 |
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5,000 |
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* |
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Robert F. Doman (8) |
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194,375 |
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179,375 |
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15,000 |
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* |
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Jay M. Haft (9) |
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139,500 |
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105,000 |
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34,500 |
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* |
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Richard C. Lufkin (10) |
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117,100 |
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117,000 |
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100 |
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* |
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Marvin E. Lesser(11) |
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15,000 |
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15,000 |
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0 |
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* |
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Scott L. Lundahl (12) |
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133,332 |
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133,125 |
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207 |
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* |
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Stuart L. Marcus (13) |
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124,407 |
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124,407 |
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0 |
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* |
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Magnus Moliteus (14) |
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75,000 |
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75,000 |
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0 |
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* |
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William F. ODell (15) |
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75,843 |
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75,843 |
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0 |
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* |
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Michael J. Todisco (16) |
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48,375 |
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48,375 |
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0 |
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* |
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* |
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Less than one percent. |
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(1) |
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Represents shares beneficially owned by the named individual which have been granted under
the 1991 Incentive Stock Option Plan of Deprenyl USA, Inc. (Deprenyl USA, Inc. is the former
name of DUSA Pharmaceuticals, Inc.), the DUSA Pharmaceuticals, Inc. 1994 Restricted Stock
Option Plan, the DUSA Pharmaceuticals, Inc. 1996 Omnibus Plan, as amended, the DUSA
Pharmaceuticals, Inc. 2006 Equity Compensation Plan, as amended and individual stock option
agreements with Richard C. Lufkin and Scott Lundahl, including shares that such individual has
the right to acquire upon exercise of options or warrants vesting within sixty (60) days of
July 31, 2009, but does not include shares underlying options and warrants which vest more
than sixty (60) days from such date. Also includes all shares previously issued to such
individuals after the exercise of options or warrants granted under the listed plans and
shares of common stock |
18
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otherwise acquired, or beneficially owned, by such named individual. Unless otherwise
noted, all persons referred to above have sole voting and sole investment power. |
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(2) |
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Does not constitute a commitment to sell any or all of the stated number of shares of common
stock. The number of shares offered shall be determined from time to time by each selling
securityholder at their sole discretion. |
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(3) |
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Dr. Abeles has served as a director since August 1994. Beneficial ownership includes 39,500
shares of common stock and 85,000 shares of common stock underlying stock options granted to
Dr. Abeles which will have vested within sixty (60) days after July 31, 2009. The number of
shares owned does not include 7,500 shares of common stock granted to Dr. Abeles which will
vest more than sixty (60) days after July 31, 2009. Dr. Abeles shares investment and voting
power with regard to 34,500 shares of common stock. |
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(4) |
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Mr. Bartash has served as a director since November 2001. Beneficial ownership includes
15,500 shares of common stock and 95,000 shares of common stock underlying stock options
granted to Mr. Bartash which will have vested within sixty (60) days after July 31, 2009. The
number of shares owned does not include 7,500 shares of common stock granted to Mr. Bartash
which will vest more than sixty (60) days after July 31, 2009. |
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(5) |
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Mr. Carota joined us in October 1999 and was elected as our Vice President, Operations in
February 2000. Beneficial ownership includes 2,750 shares of common stock and 129,750 shares
of common stock underlying stock options granted to Mr. Carota which will have vested within
sixty (60) days after July 31, 2009. The number of shares owned does not include 81,725
shares of common stock underlying stock options and 36,050 shares of common stock granted to
Mr. Carota which will vest more than sixty (60) days after July 31, 2009. |
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(6) |
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Mr. Casdin has served as a director since January 2009. Beneficial ownership includes
200,000 shares of common stock and 25,000 shares of common stock underlying stock options
granted to Mr. Casdin which will have vested within sixty (60) days after July 31, 2009. |
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(7) |
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Mr. Christopher joined us in December 2000 and was appointed to the position of Vice
President, Finance and Chief Financial Officer effective February 16, 2005. Before that, Mr.
Christopher served as our Vice President, Financial Planning and Business Analysis and had
also served as our Director, Financial Analysis. Beneficial ownership includes 8,250 shares
of common stock and 99,375 shares of common stock underlying stock options granted to Mr.
Christopher which will have vested within sixty (60) days after July 31, 2009. The number of
shares owned does not include 104,725 shares of common stock underlying stock options and
47,350 shares of common stock granted to Mr. Christopher which will vest more than sixty (60)
days after July 31, 2009. |
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(8) |
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Mr. Doman joined us as our President and Chief Operating Officer on January 3, 2005 and was
promoted to President and Chief Executive Officer in June 2007. Beneficial ownership includes
19,750 shares of common stock and 174,625 shares of common stock underlying options granted to
Mr. Doman which will have vested within sixty (60) days after July 31, 2009. The number of
shares owned does not include 251,275 shares of common stock underlying stock options and
107,850 shares of common stock which will vest more than sixty (60) days after July 31, 2009. |
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(9) |
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Mr. Haft has served as a director since September 1996. He served as Chairman of the Board
since December 2008 Mr. Haft also served as Chairman of the Board from June 2003 to December
2004. Mr. Haft served as Lead Director from June 2003 to January 2005. From January 2005
until December 2008, he served as Vice Chairman of the Board and Lead Director. Beneficial
ownership includes 34,500 shares of common stock and 105,000 shares of common |
19
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stock underlying stock options granted to Mr. Haft which will have vested within sixty (60)
days after July 31, 2009. The number of shares owned does not include 15,000 shares of
common stock granted to Mr. Haft which will vest more than sixty (60) days after July 31,
2009. Under Rule 13d-3 of the Securities and Exchange Act of 1934, as amended, Mr. Haft
disclaims, but may be deemed to be the beneficial owner of, the 34,500 shares of common
stock held indirectly by Mr. Hafts spouse. |
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(10) |
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Mr. Lufkin has served as a director since January 1992. Beneficial ownership includes 12,100
shares of common stock and 105,000 shares of common stock underlying stock options granted to
Mr. Lufkin which will have vested within sixty (60) days after July 31, 2009. The number of
shares owned does not include 7,500 shares of common stock granted to Mr. Lufkin which will
vest more than sixty (60) days after July 31, 2009. |
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(11) |
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Mr. Lesser has served as a director since June 2009. Beneficial ownership includes 15,000
shares of common stock underlying stock options granted to Mr. Lesser which will have vested
within sixty (60) days after July 31, 2009. |
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(12) |
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Mr. Lundahl joined us in May 1998 and was elected as our Vice President, Regulatory Affairs
and Intellectual Property in June 2003. Before that, Mr. Lundahl was our Vice President,
Technology and Device Development from June 1999 until June 2003. Beneficial ownership
includes 7,957 shares of common stock and 125,375 shares of common stock underlying stock
options granted to Mr. Lundahl which will have vested within sixty (60) days after July 31,
2009. The number of shares owned does not include 81,725 shares of common stock underlying
stock options and 36,050 shares of common stock granted to Mr. Lundahl which will vest more
than sixty (60) days after July 31, 2009. |
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(13) |
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Dr. Marcus was elected as our Vice President, Scientific Affairs and Chief Medical Officer in
October 1993. Beneficial ownership includes 2,032 shares of common stock and 122,375 shares
of common stock underlying stock options granted to Dr. Marcus which will have vested within
sixty (60) days after July 31, 2009. The number of shares owned does not include 84,600
shares of common stock underlying stock options and 37,550 shares of common stock granted to
Dr. Marcus which will vest more than sixty (60) days after July 31, 2009. |
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(14) |
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Mr. Moliteus has served as a director since August 2003. Beneficial ownership includes
15,000 shares of common stock and 60,000 shares of common stock underlying stock options
granted to Mr. Moliteus which will have vested within sixty (60) days after July 31, 2009.
The number of shares owned does not include 7,500 shares of common stock granted to Mr.
Moliteus which will vest more than sixty (60) days after July 31, 2009. |
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(15) |
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Mr. ODell joined us as our Executive Vice President Sales and Marketing on April 4, 2006.
Beneficial ownership includes 2,218 shares of common stock and 73,625 shares of common stock
underlying stock options granted to Mr. ODell which will have vested within sixty (60) days
after July 31, 2009. This number does not include 114,725 shares of common stock underlying
stock options and 47,350 shares of common stock which will vest more than sixty (60) days
after July 31, 2009. |
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(16) |
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Mr. Todisco has served as Vice President, Controller since September 2006. Beneficial
ownership includes 1,706 shares of common stock and 29,500 shares of common stock underlying
stock options granted to Mr. Todisco which will have vested within sixty (60) days after July
31, 2009. The number of shares owned does not include 82,725 shares of common stock
underlying stock options and 47,050 shares of common stock granted to Mr. Todisco which will
vest more than sixty (60) days after July 31, 2009. |
20
PLAN OF DISTRIBUTION
Shares offered hereby may be sold from time to time directly by or on behalf of the selling
securityholders in one or more transactions on the Nasdaq Global Market or on any stock exchange on
which the common stock may be listed at the time of sale, in privately negotiated transactions, or
through a combination of such methods, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at fixed prices (which may be changed) or at negotiated
prices. The selling securityholders may sell shares through one or more agents, brokers or dealers
or directly to purchasers. Such brokers or dealers may receive compensation in the form of
commissions, discounts or concessions from the selling securityholders and/or purchasers of the
shares or both (which compensation as to a particular broker or dealer may be in excess of
customary commissions).
In connection with such sales, the selling securityholders and any participating broker or
dealer may be deemed to be underwriters within the meaning of the Securities Act, and any
commissions they receive and the proceeds of any sale of shares may be deemed to be underwriting
discounts and commissions under the Securities Act.
In order to comply with certain state securities laws, if applicable, the shares may be sold
in such jurisdictions only through registered or licensed brokers or dealers. In certain states,
the shares may not be sold unless the shares have been registered or qualified for sale in such
state or an exemption from regulation or qualification is available and is complied with. Sales of
shares must also be made by the selling securityholders in compliance with all other applicable
state securities laws and regulations.
In addition to any shares sold hereunder, selling securityholders may, at the same time, sell
any shares of common stock owned by them in compliance with all of the requirements of Rule 144,
regardless of whether such shares are covered by this reoffer prospectus. There can be no
assurance that any of the selling securityholders will sell any or all of the shares offered by
them hereby.
DUSA will pay all expenses of the registration of the shares. DUSA has notified certain
selling securityholders of the need to deliver a copy of this reoffer prospectus in connection with
any sale of the shares.
LEGAL MATTERS
The validity of the shares being offered hereby has been passed upon for DUSA by Reed Smith
LLP. Nanette W. Mantell, Esq., a partner of Reed Smith LLP, serves as DUSAs Secretary, which is
an officer position.
EXPERTS
The consolidated financial statements, incorporated in this prospectus by reference from DUSA
Pharmaceuticals, Inc.s Annual Report on Form 10-K for the year ended December 31, 2008 have been
audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in
their report, which is incorporated herein by reference. Such financial statements have been so
incorporated in reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-8 under the Securities Act with
respect to the shares of common stock offered hereby. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits thereto. You can find
additional information regarding us and the common stock in the registration statement and the
exhibits. Statements contained in this prospectus regarding the contents of any contract or any
other document to which reference is made are not necessarily complete,
21
and, in each instance where a copy of such contract or other document has been filed as an
exhibit to the registration statement, reference is made to the copy so filed, each such statement
being qualified in all respects by such reference.
We are subject to the informational requirements of the Securities Exchange Act of 1934, as
amended (the Exchange Act), and, in accordance therewith, file reports and other information with
the SEC. The registration statement, including exhibits, and the reports and other information
filed by us can be inspected without charge at the public reference facilities maintained by the
SEC at the SECs public reference room at 100 F Street, N.E., Washington, D.C. 20549. Copies of
such material can be obtained from such offices at fees prescribed by the SEC. The public may
obtain information on the operation of the Public Reference room by calling the SEC at
1-800-SEC-0330. The SEC maintains a World Wide Web site that contains reports, proxy and
information statements and other information regarding registrants that file electronically with
the SEC. The address of this site is http://www.sec.gov. In addition, you can also access
documents we file with the SEC at our website, http://www.dusapharma.com, which is not a part of
this prospectus and is not incorporated herein by reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by us with the SEC pursuant to the Exchange
Act, are incorporated by reference in this prospectus as of their respective dates:
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(a) |
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Our Annual Report on Form 10-K for the year ended December 31, 2008; |
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(b) |
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Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2009; |
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(c) |
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Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009; |
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(d) |
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All other reports filed pursuant to Section 13 or 15(d) of the Exchange Act
since December 31, 2008; and |
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(e) |
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The description of DUSAs common stock contained in its registration statement
on Form 8-A which was filed on January 3, 1992 and amended on Form 8-A12G filed on
October 24, 1997, and in DUSAs Quarterly Report on Form 10-Q which was filed on
November 12, 1997. |
All documents filed by us pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act
after the date hereof and prior to the termination of the offering, other than information
furnished pursuant to Item 2.02 or Item 7.01 of Form 8-K or as otherwise permitted by SEC rules and
regulations, shall be deemed to be incorporated by reference into this prospectus 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 herein by reference shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement.
22
We will provide without charge to any person, including any beneficial owner, to whom this
prospectus is delivered, upon written or oral request of such person, a copy of each document
incorporated by reference in the prospectus (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into this prospectus). We will provide such
copies at no cost, upon written or oral request, by writing or telephoning us at:
DUSA Pharmaceuticals, Inc.
25 Upton Drive
Wilmington, Massachusetts 01887
Attention: Mr. Richard Christopher
Telephone: (978) 657-7500
Attention: Mr. Richard Christopher
E-mail to: ChristopherR@DusaPharma.com
Our World Wide Web site is located at www.dusapharma.com. Information on the Web site is not
incorporated by reference into this prospectus.
23
1,313,250 Shares
DUSA
PHARMACEUTICALS, INC.
Common Stock
PROSPECTUS
August 17, 2009
PART II
INFORMATION REQUIRED TO BE IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference
The following documents, which have been filed by us with the SEC pursuant to the Exchange
Act, are incorporated by reference in this registration statement as of their respective dates:
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(a) |
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Our Annual Report on Form 10-K for the year ended December 31, 2008; |
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(b) |
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Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2009; |
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(c) |
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Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009; |
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(d) |
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All other reports filed pursuant to Section 13 or 15(d) of the Exchange Act
since December 31, 2008; and |
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(e) |
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The description of DUSAs common stock contained in its registration statement
on Form 8-A which was filed on January 3, 1992 and amended on Form 8-A12G filed on
October 24, 1997, and in DUSAs Quarterly Report on Form 10-Q which was filed on
November 12, 1997. |
All documents filed by us pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act
after the date hereof and prior to the termination of the offering, other than information
furnished pursuant to Item 2.02 or Item 7.01 of Form 8-K or as otherwise permitted by SEC rules and
regulations, shall be deemed to be incorporated by reference into this prospectus 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 herein by reference shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement.
ITEM 4. Description of Securities
Not applicable.
ITEM 5. Interests of Named Experts and Counsel
Not applicable.
ITEM 6. Indemnification of Directors and Officers
Article 5 of the Companys Certificate of Incorporation, as amended, and New Jersey Business
Corporation Act, N.J.S.A. 14A:2-7 provide as follows:
Any director and officer of the Corporation shall not be personally liable to the Corporation
or its shareholders for damages for breach of any duty owed to the Corporation or its shareholders,
except that this provision shall not relieve a director or officer from liability for any breach of
duty based upon an act or omission (a) in breach of such persons duty of loyalty to the
Corporation or its shareholders; (b) not in good faith or involving a knowing violation of law; or
(c) resulting in receipt by such person of an improper personal benefit.
II-1
The Companys By-laws, as amended, pursuant to the New Jersey Business Corporation Act,
N.J.S.A. 14A:3-5, provide as follows:
ARTICLE IV
INDEMNIFICATION
Section 1. Actions by Others. The Corporation (1) shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an
action by or in the right of the Corporation) by reason of the fact that he is or was a director,
officer or trustee of the Corporation or of any constituent corporation absorbed by the Corporation
in a consolidation or merger and (2) except as otherwise required by Section 3 of this Article, may
indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by reason of the fact
that he (a) is or was an employee or agent or the legal representative of a director, officer,
trustee, employee or agent of the Corporation or of any absorbed constituent corporation, or (b) is
or was serving at the request of the Corporation or of any absorbed constituent corporation as a
director, officer, employee, agent of or participant in another corporation, partnership, joint
venture, trust or other enterprise, or the legal representative of such a person against expenses,
costs, disbursements (including attorneys fees), judgments, fines and amounts actually and
reasonably incurred by him in good faith and in connection with such action, suit or proceeding if
he acted in a manner he reasonably believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or proceeding, he had no reasonable cause to
believe that his conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not meet the applicable
standard of conduct.
Section 2. Actions by or in the Right of the Corporation. The Corporation
shall indemnify any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director, officer, trustee,
employee or agent of the Corporation or of any constituent corporation absorbed by the Corporation
by consolidation or merger, or the legal representative of any such person, or is or was serving at
the request of the Corporation or of any absorbed constituent corporation, as a director, officer,
trustee, employee, agent of or participant, or the legal representative of any such person in
another corporation, partnership, joint venture, trust or other enterprise against expenses
(including attorneys fees) actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Corporation unless and only to the extent that the New
Jersey Superior Court or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such expenses which the New
Jersey Superior Court or such other court shall deem proper.
Section 3. Successful Defense. To the extent that a person who is or was a
director, officer, trustee, employee or agent of the Corporation or of any constituent corporation
absorbed by the Corporation by consolidation or merger, or the legal representative of any such
person, has been successful on the merits or otherwise in defense of any action, suit or proceeding
referred to in Section 1 or Section 2 of this Article, or in defense of any claim, issue, or matter
therein, he shall be indemnified against expenses (including attorneys fees) actually and
reasonably incurred by him in connection therewith.
II-2
Section 4. Specific Authorization. Any indemnification under Section 1 or
Section 2 of this Article (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the director, officer,
trustee, employee, agent, or the legal representative thereof, is proper in the circumstances
because he has met the applicable standard of conduct set forth in said Sections 1 and 2. Such
determination shall be made (1) by the Board of Directors by a majority vote of quorum consisting
of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is
not obtainable, a quorum of disinterested directors so directs, by independent legal counsel for a
written opinion, (3) by the shareholders.
Section 5. Advance of Expenses. Expenses incurred by any person who may have
a right of indemnification under this Article in defending civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final distribution of such action, suit
or proceeding as authorized by the board of directors upon receipt of an undertaking by or on
behalf of the director, officer, trustee, employee, or the legal representative thereof, to repay
such amount unless it shall ultimately be determined that he is entitled to be indemnified by the
Corporation pursuant to this Article.
Section 6. Right of Indemnity not Exclusive. The indemnification and
advancement of expenses provided by this Article shall not exclude any other rights to which those
seeking indemnification may be entitled under the certificate of incorporation of the Corporation
or any by-law, agreement, vote of shareholders or otherwise; provided that no indemnification shall
be made to or on behalf of a Director, officer, trustee, employee, agent, or legal representative
if a judgment or other final adjudication adverse to such persons establishes that his acts or
omissions (a) were in breach of his duty of loyalty to the corporation or its shareholders, (b)
were not in good faith or involved a knowing violation of law or (c) resulted in receipt by such
person of an improper personal benefit.
Section 7. Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, trustee, employee or agent of the
Corporation or of any constituent corporation absorbed by the Corporation by consolidation or
merger of the legal representative of such person or is or was serving at the request of the
Corporation or of any absorbed constituent corporation as a director, officer, trustee, employee or
agent of or participant in another corporation, partnership, joint venture, trust or other
enterprise, or the legal representative of any such person against any liability asserted against
him and incurred by him in any such capacity, arising out of his status as such or by reason of his
being or having been such, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Article, the New Jersey Business Corporation
Act, or otherwise.
Section 8. Invalidity of any Provision of this Article. The invalidity or
unenforceability of any provision of this Article shall not affect the validity or enforceability
of the remaining provisions of this Article.
We also maintain directors and officers liability insurance which may, in some instances, reimburse
us for judgments against us or our directors or officers.
ITEM 7. Exemption from Registration Claimed.
Not applicable.
II-3
ITEM 8. Exhibits
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Exhibit No. |
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Description of Exhibit |
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4.1
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Common Stock specimen, filed as Exhibit 4(a) to the
Registrants Form 10-K for the fiscal year ended December 31,
2002, and is incorporated herein by reference |
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4.2
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Rights Agreement, dated as of September 27, 2002, between the
Registrant and American Stock Transfer and Trust Company filed
as Exhibit 4.0 to Registrants Current Report on Form 8-K
filed October 11, 2002, and is incorporated herein by
reference |
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4.3
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Rights Certificate relating to the rights granted to holders
of common stock under the Rights Agreement filed as Exhibit
4.0 to Registrants Current Report on Form 8-K, filed on
October 11, 2002, and is incorporated herein by reference |
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5.1
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Opinion of Reed Smith LLP |
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23.1
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Consent of independent registered public accounting firm |
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23.2
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Consent of Reed Smith LLP (included in Exhibit 5.1) |
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24.1
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Power of Attorney (contained on Signature Page) |
ITEM 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) to include in any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the effective date of this
registration statement (or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth in this registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum aggregate offering price set
forth in the Calculation of Registration Fee table in the effective registration statement;
(iii) to include any material information with respect to the plan of distribution not
previously disclosed in this registration statement or any material change to such information in
this registration statement;
provided, however, that paragraphs (a)(1)(i), and (a)(1)(ii) above do not apply if the registration
statement is on Form S-8 and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the
registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference
in the registration statement.
II-4
(2) that, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) to remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrants annual report pursuant to
Section 13 (a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plans annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC
such indemnification is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-5
SIGNATURES
The Registrant: Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration statement on Form S-8 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wilmington,
Commonwealth of Massachusetts, on this 17th day of August, 2009.
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DUSA PHARMACEUTICALS, INC.
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By: |
/s/ Robert F. Doman
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Robert F. Doman |
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President and Chief Executive
Officer |
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POWER OF ATTORNEY
Know All Men By These Presents, that each person whose signature appears below constitutes and
appoints Robert F. Doman and Richard C. Christopher, and each of them singly, as his/her true and
lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him/her
and in his/her name, place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this registration statement or any related registration
statement, including any amendment to this registration statement for the purpose of registering
additional shares in accordance with General Instruction E to Form S-8, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in connection with the
above premises, as fully to all intents and purposes as he/she might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or his/her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement on Form S-8 has been signed by the following persons in the capacities and on the dates
indicated:
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/s/ John H. Abeles, MD
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Director
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August 17, 2009 |
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John H. Abeles, MD
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Date |
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/s/ David M. Bartash
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Director
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August 17, 2009 |
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David M. Bartash
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Date |
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/s/ Alexander W. Casdin
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Director
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August 17, 2009 |
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Alexander W. Casdin
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Date |
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/s/ Richard C. Christopher
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Vice President, Finance and Chief
Financial Officer (principal
financial officer and principal
accounting officer)
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August 17, 2009 |
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Richard C. Christopher
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Date |
II-6
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/s/ Robert F. Doman
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Director, President and Chief
Executive Officer (principal
executive officer)
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August 17, 2009
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Robert F. Doman
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Date |
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/s/ Jay M. Haft, Esq.
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Chairman of the Board of Directors
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August 17, 2009 |
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Jay M. Haft, Esq.
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Date |
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/s/ Marvin E. Lesser
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Director
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August 17, 2009 |
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Marvin E. Lesser
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Date |
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/s/ Richard C. Lufkin
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Director
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August 17, 2009 |
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Richard C. Lufkin
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Date |
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/s/ Magnus Moliteus
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Director
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August 17, 2009 |
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Magnus Moliteus
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Date |
II-7
EXHIBIT INDEX
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Exhibit No. |
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Description of Exhibit |
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4.1
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Common Stock specimen, filed as Exhibit 4(a) to the
Registrants Form 10-K for the fiscal year ended December 31,
2002, and is incorporated herein by reference |
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4.2
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Rights Agreement, dated as of September 27, 2002, between the
Registrant and American Stock Transfer and Trust Company filed
as Exhibit 4.0 to Registrants Current Report on Form 8-K
filed October 11, 2002, and is incorporated herein by
reference |
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4.3
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Rights Certificate relating to the rights granted to holders
of common stock under the Rights Agreement filed as Exhibit
4.0 to Registrants Current Report on Form 8-K, filed on
October 11, 2002, and is incorporated herein by reference |
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5.1
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Opinion of Reed Smith LLP |
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23.1
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Consent of independent registered public accounting firm |
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23.2
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Consent of Reed Smith LLP (included in Exhibit 5.1) |
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24.1
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Power of Attorney (contained on
Signature Page) |
II-8