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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): January 29, 2007
Critical Therapeutics, Inc.
(Exact Name of Registrant as Specified in Charter)
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Delaware
(State or Other Jurisdiction
of Incorporation)
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000-50767
(Commission
File Number)
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04-3523569
(IRS Employer
Identification No.) |
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60 Westview Street, Lexington, Massachusetts
(Address of Principal Executive Offices)
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02421
(Zip Code) |
Registrants telephone number, including area code: (781) 402-5700
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
On January 29, 2007, Critical Therapeutics, Inc. (the Company) entered into an exclusive license
agreement (the License Agreement) with Innovative Metabolics, Inc. (IMI) under which the
Company granted to IMI an exclusive worldwide license under patent rights and know-how controlled
by the Company relating to the stimulation of the vagus nerve to make, use and sell products and
methods covered by the licensed patent rights and know-how in the licensed field. The licensed
field includes mechanical and electrical stimulation of the vagus nerve and excludes
pharmacological modulation of a cholinergic receptor (including the nicotinic alpha-7 cholinergic
receptor).
In consideration for the license, IMI agreed to pay the Company an initial license fee of $500,000
in cash following the completion of a financing by IMI that results in gross proceeds in excess of
$5.0 million (the Financing). In addition, in connection with the Financing, IMI agreed to issue
to the Company a number of shares of preferred stock of IMI equal to the number of shares of
preferred stock that could be purchased for $500,000 in the Financing. The preferred stock issued
to the Company will have a liquidation preference subordinate to the preferred stock issued in the
Financing. Under the License Agreement, IMI also agreed to:
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make a one-time milestone payment to the Company of $1.0 million upon the
achievement of all regulatory approvals from the U.S. Food and Drug Administration or
any foreign counterpart agency required for the marketing and sale in the applicable
country of any product or method covered by the licensed patent rights; |
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pay the Company royalties based on net sales of licensed products and methods by IMI
and its affiliates until the expiration of the patent rights covering the licensed
product or method in the country of actual or intended use; and |
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pay the Company a percentage of any royalties, fees and payments actually received
from third parties, with limited exceptions, in connection with sublicenses by IMI of
its rights under the licensed patent rights and know-how. |
The patent rights and know-how licensed by the Company to IMI include patent rights and know-how
arising from research conducted by The Feinstein Institute for Medical Research, formerly known as
The North Shore-Long Island Jewish Research Institute (The Feinstein Institute), under a
sponsored research and license agreement, as amended (the Sponsored Research Agreement), that the
Company entered into with The Feinstein Institute in January 2003. The research term under the
Sponsored Research Agreement expires in December 2007. Under the Sponsored Research Agreement, the
Company acquired an exclusive worldwide license to make, use and sell products covered by the
patent rights and know-how arising from the sponsored research. The Feinstein Institute retained
the right to make and use the licensed products in its own laboratories solely for non-commercial,
scientific purposes and non-commercial research.
Under the License Agreement, IMI agreed to be responsible for specified obligations of the Company
to The Feinstein Institute pursuant to the Sponsored Research Agreement. IMI agreed to financially
support sponsored research under the Sponsored Research Agreement to the extent that the sponsored
research is in the licensed field under the License Agreement. IMI also agreed to reimburse the
Company for a portion of (1) amounts payable to The Feinstein Institute in connection with the
filing of any U.S. patent application or issuance of a U.S. patent relating to the field of
cholinergic anti-inflammatory technology and (2) minimum annual royalties payable to The Feinstein
Institute beginning in the first year after termination of research activities under the Sponsored
Research Agreement.
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Each party has the right to terminate the License Agreement upon the occurrence of a material
uncured default by the other party. IMI has the right to terminate the License Agreement at any
time on 90-days prior written notice to the Company, provided that IMI pays a termination fee of
$50,000 if it has not yet paid the $500,000 initial license fee. The Company has the right to
terminate the License Agreement if IMI fails to sell or otherwise issue securities in the Financing
on or before June 30, 2007.
Two founders of the Company, Kevin J. Tracey, M.D. and H. Shaw Warren, M.D., are founders of IMI.
Dr. Warren served as a member of the Companys Board of Directors until October 2006. Dr. Tracey
is a member of the medical staff at The Feinstein Institute. In addition, the Company is a party
to consulting agreements with Dr. Tracey and Dr. Warren. These consulting agreements terminate on
January 1, 2008.
The License Agreement is filed as Exhibit 99.1 to this Current Report on Form 8-K, and the Company
refers you to such exhibit for the complete terms of the agreement. The complete terms of the
License Agreement are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
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(d)
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Exhibits. |
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See Exhibit Index attached hereto. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: January 30, 2007 |
CRITICAL THERAPEUTICS, INC.
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By: |
/s/ Frank E. Thomas
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Frank E. Thomas |
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President and Chief Executive Officer |
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EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1*
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Exclusive License Agreement, dated as of January 29, 2007,
between the Company and Innovative Metabolics, Inc. |
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Confidential treatment requested as to certain portions, which portions have
been omitted and filed separately with the Securities and Exchange Commission. |