Filed
Pursuant to Rule 424(b)(5)
Registration
No. 333-165960
PROSPECTUS
SUPPLEMENT
To Prospectus dated April 16,
2010
$10,000,000
Common
Stock
We have
entered into a sales agreement with Brinson Patrick Securities Corporation
relating to shares of our common stock, $0.001 par value per share, offered by
this prospectus supplement and the accompanying prospectus. In accordance with
the terms of the sales agreement, we may offer and sell an aggregate of up to
$10,000,000 of common stock from time to time through Brinson Patrick, as sales
manager.
Sales of
our common stock, if any, will be made on our behalf on or through national
securities exchanges (such as NASDAQ) and/or alternative trading systems, at
prices prevailing at the time of sale, and/or in any other manner permitted by
law (including, without limitation, privately negotiated transactions). No
minimum number or dollar amount of shares is required to be sold through Brinson
Patrick, but Brinson Patrick will use its best efforts to sell, as our agent,
the shares offered when and if we ask them to do so. There are no arrangements
to place the proceeds of the offering in an escrow account. This offering will
continue until the earliest of (i) the termination of our agreement with Brinson
Patrick, or (ii) the sale of all $10,000,000 of securities offered by this
prospectus supplement.
Our
common stock is listed on the NASDAQ Capital Market under the symbol
“NEXM.” On April 20, 2010, the last reported sales price of our
common stock on the NASDAQ Capital Market was $0.46 per share.
The
compensation to the sales manager for sales of our common stock will be at a
fixed commission rate of 4.5% of the gross sales price per share
sold.
The
aggregate market value of the outstanding shares of our common stock held by
non-affiliates is $52,837,862 based on 126,902,281 shares of common stock
outstanding, of which 114,864,918 shares are held by non-affiliates, and a
closing sale price on the NASDAQ Capital Market of $0.46 on April 20,
2010. As of the date hereof, we have not offered any securities
pursuant to the registration statement of which this prospectus forms a part, or
any similar registration statement, during the prior 12 calendar month period
ending on the date hereof.
Investing in our common stock
involves a high degree of risk. Before buying any of these shares of our common
stock, you should carefully consider the risk factors described in “Risk
Factors” beginning on page S-1 in this prospectus
supplement.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of
these securities or determined if this prospectus supplement and the
accompanying prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
The
date of this prospectus supplement is April 21, 2010.
TABLE
OF CONTENTS
|
Prospectus Supplement
|
|
|
|
The
Offering
|
|
S-1
|
|
Risk
Factors
|
|
S-1
|
|
Use
of Proceeds
|
|
S-10
|
|
Dilution
|
|
S-10
|
|
Plan
of Distribution
|
|
S-10
|
|
Description
of Common Stock
|
|
S-11
|
|
|
|
|
|
Prospectus
|
|
|
|
About
This Prospectus
|
|
1
|
|
About
NexMed
|
|
3
|
|
Risk
Factors
|
|
4
|
|
Forward
Looking Statements
|
|
4
|
|
Description
of Securities
|
|
4
|
|
Use
of Proceeds
|
|
5
|
|
Ratio
of Earnings to Fixed Charges
|
|
5
|
|
Plan
of Distribution
|
|
5
|
|
Legal
Matters
|
|
7
|
|
Experts
|
|
7
|
|
Incorporation
of Documents by Reference
|
|
7
|
|
Where
You Can Find More Information
|
|
8
|
Unless
otherwise mentioned or unless the context requires otherwise, all references in
this prospectus supplement and the accompanying prospectus to “the Company,”
“NexMed,” “we,” “us,” “our,” or similar references mean NexMed,
Inc.
This
document is in two parts. The first part is this prospectus supplement, which
describes the terms of this offering of our common stock and supplements
information contained in the accompanying prospectus and the documents
incorporated by reference into the accompanying prospectus. The second part is
the accompanying prospectus, dated April 16, 2010, including the documents
incorporated by reference therein, which gives more general information about us
and the shares of common stock we may offer from time to time under our shelf
registration statement. To the extent there is a conflict between the
information contained in this prospectus supplement, on the one hand, and the
information contained in the accompanying prospectus or any document
incorporated by reference therein, on the other hand, the information in this
prospectus supplement shall control.
We have
not authorized any dealer, salesman or other person to give any information or
to make any representation other than those contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. You
should not rely upon any information or representation not contained or
incorporated by reference in this prospectus supplement or the accompanying
prospectus. This prospectus supplement and the accompanying prospectus do not
constitute an offer to sell or the solicitation of an offer to buy common stock,
nor do this prospectus supplement and the accompanying prospectus constitute an
offer to sell or the solicitation of an offer to buy common stock in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. You should not assume that the information
contained in this prospectus supplement and the accompanying prospectus, and the
documents incorporated by reference herein, are accurate on any date subsequent
to the dates set forth on those respective documents, even though this
prospectus supplement and any accompanying prospectus is delivered or common
stock is sold on a later date.
THE OFFERING
|
Common
stock offered by us pursuant to this prospectus supplement
|
|
Up
to $10,000,000 of common stock
|
|
|
|
|
|
Common
stock to be outstanding after this offering
|
|
Up
to 149,124,503 shares, assuming sales at a price of $0.45 per share, which
was the closing price on The NASDAQ Capital Market on April 15,
2010. Actual shares issued will vary depending on the sales
prices under this offering.
|
|
|
|
|
|
Manner
of Offering
|
|
Best
efforts “at-the-market” offering that may be made from time to time
through our agent, Brinson Patrick Securities Corporation. See “Plan of
Distribution” on page S-10.
|
|
|
|
|
|
Use
of proceeds
|
|
We
intend to use the net proceeds from this offering primarily for general
working capital. Accordingly, we will retain broad discretion over how
these offering proceeds are used. See “Use of Proceeds” on page
S-10.
|
|
|
|
|
|
NASDAQ
Capital Market symbol
|
|
NEXM
|
|
|
|
|
|
Risk
factors
|
|
This
investment involves a high degree of risk. See “Risk Factors” beginning on
page S-1 of this prospectus
supplement.
|
The
number of shares of common stock to be outstanding after this offering is based
on 126,902,281 shares outstanding as of the date of this prospectus
supplement and excludes options and warrants outstanding as of that date
representing the right to purchase a total of approximately
9,930,000 shares of common stock at a weighted average exercise price of
approximately $1.28 per share. See, “Risk Factors – Risk Relating to
the Offering.” This number also excludes up to approximately 63
million shares of common stock that could be issued in payment of approximately
$10.6 million of outstanding indebtedness and approximately 6.9 million shares
of common stock that could be issued in payment of approximately $4 million of
outstanding indebtedness.
Our
principal executive offices are located at 6330 Nancy Ridge Drive, Suite 103,
San Diego, CA 92121 and our telephone number is (858) 222-8041.
Our website is
www.nexmed.com; no portion of our website is incorporated by reference into this
prospectus supplement.
RISK FACTORS
Before making an investment
decision, you should carefully consider the risks described in this prospectus
supplement, together with all of the other information incorporated by reference
into this prospectus, including from our most recently Annual Report on Form
10-K and any subsequent quarterly reports on Form 10-Q. Our business, financial
condition or results of operations could be materially adversely affected by any
of these risks. The trading price of our securities could decline due to any of
these risks, and you may lose all or part of your investment. This prospectus
and the incorporated documents also contain forward-looking statements that
involve risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including the risks mentioned above.
Risks
Relating to Our Business
We
continue to require external financing to fund our operations, which may not be
available.
We expect
our current cash reserves to provide us with sufficient cash to fund our
operations into the second half of 2011. While our newly acquired
subsidiary, Bio-Quant, is projected to be cash flow positive in 2010, we do not
believe that Bio-Quant will generate sufficient cash to fund the development of
our current products under development and the annual costs to remain a public
company, including legal, audit and listing fees. We intend to seek
development partners to advance our products under development because we will
also need significant funding to pursue our overall product development plans.
In general, products we plan to develop will require significant time-consuming
and costly research and development, clinical testing, regulatory approval and
significant investment prior to their commercialization. Even if we are
successful in obtaining partners who can assume the funding for further
development of our products, we may still encounter additional obstacles such as
research and development activities may not be successful, our products may not
prove to be safe and effective, clinical development work may not be completed
in a timely manner or at all, and the anticipated products may not be
commercially viable or successfully marketed. During 2010 we intend
to focus on generating more positive cash flow by expanding the CRO business
through organic growth within Bio-Quant’s current business operations and
through acquiring small cash flow positive entities who have complimentary
capabilities to those of Bio-Quant but are not operating at full capacity due to
insufficient business development efforts. There is no assurance that we
can expand Bio-Quant’s current business operations or successfully identify and
acquire small cash flow positive entities as described above. Should
we not be able to find development partners or successfully increase Bio-Quant’s
positive cash flow, we would require external financing to fund our
operations. We may not be able to obtain necessary
funding.
Additionally,
we have substantial notes payable issued in connection with the acquisition of
Bio-Quant, which if not converted to common stock, would significantly impact
liquidity when due in December 2010.
Our
current cash reserves should provide us with sufficient cash to fund our
operations into the second half of 2011, assuming we convert upon stockholder
approval or extend the maturity date of significant amounts due in 2010 and 2011
under notes payable. This projection is based on the monthly
operating expenses of maintaining our public listing together with Bio-Quant’s
business growing at an assumed rate of 11% over 2009 levels with no additional
acquisitions in 2010. If these assumptions prove to be wrong, then
our liquidity would be adversely affected.
We
will continue to incur operating losses.
We may
encounter delays, uncertainties and complications typically encountered by
businesses with future revenues tied to products under development. We have not
marketed or generated sales revenues in the U.S. from our products under
development. We are not profitable and have incurred an accumulated deficit of
$171,731,862 since our inception through December 31, 2009. Our ability to
generate revenues and to achieve profitability and positive cash flow will
depend on the successful licensing or commercialization of our products
currently under development and the ability to grow Bio-Quant’s pre-clinical
service business to a level sufficient to generate sufficient operating income
to cover the costs of our operations, including maintaining our public
listing. Our ability to become profitable will depend, among other
things, on our (1) development of our proposed products, (2) obtaining of
regulatory approvals of our proposed products on a timely basis, (3) success in
licensing, manufacturing, distributing and marketing our proposed products and
(4) increasing the profitability of Bio-Quant through acquisitions and organic
growth of its current operations.
Our
independent registered public accounting firm has doubt as to our ability to
continue as a going concern.
As a
result of our losses to date, expected losses in the future, limited capital
resources and accumulated deficit, our independent registered public accounting
firm has concluded that there is substantial doubt as to our ability to continue
as a going concern, and accordingly, our independent registered public
accounting firm has modified their report on our December 31, 2009 consolidated
financial statements in the form of an explanatory paragraph describing the
events that have given rise to this uncertainty. These factors may make it more
difficult for us to obtain additional funding to meet our obligations. Our
continuation is dependent upon our ability to generate or obtain sufficient cash
to meet our obligations on a timely basis and ultimately to attain profitable
operations. We anticipate that we will continue to incur significant losses at
least until successful commercialization of one or more of our products, and we
may never operate profitably in the future.
If
we fail to attract and keep senior management and key scientific personnel, we
may be unable to successfully operate our business.
Our
success depends in part on our continued ability to attract, retain and motivate
highly qualified management and scientific personnel and on our ability to
develop and maintain important relationships with healthcare providers,
clinicians and scientists. We are highly dependent upon our senior
management and scientific staff, particularly Bassam Damaj, Ph.D., our Chief
Executive Officer. Although we have employment agreements with most
of our executives, these agreements are generally terminable at will at any
time, and, therefore, we may not be able to retain their services as expected.
The loss of services of one or more members of our senior management and
scientific staff could delay or prevent us from obtaining new clients and
successfully operating our business. Competition for qualified
personnel in the biotechnology and pharmaceuticals field is intense,
particularly in the San Diego, California area, where our offices are
located. We may need to hire additional personnel as we expand our
commercial activities. We may not be able to attract and retain
qualified personnel on acceptable terms.
Our
ability to maintain, expand or renew existing business with our clients and to
get business from new clients, particularly in the drug development sector, also
depends on our ability to subcontract and retain scientific staff with the
skills necessary to keep pace with continuing changes in drug development
technologies.
We
will need partnering agreements and significant funding to continue with our
research and development efforts, and they may not be available.
We expect
our current cash reserves to provide us with sufficient cash to fund our
operations into the second half of 2011. We will need additional
sources of cash to fund the development and eventual marketing and sales of our
products under development. We intend to seek development partners to
advance our products under development because we will also need significant
funding to pursue our overall product development plans. In general, products we
plan to develop will require significant time-consuming and costly research and
development, clinical testing, regulatory approval and significant investment
prior to their commercialization.
Our
research and development expenses for the years ended December 31, 2009, 2008
and 2007 were $1,883,458, $5,410,513 and $5,022,671,
respectively. Through December 31, 2009, we have spent $98,786,673 on
research and development. Given our current level of cash reserves
and current revenue level of our subsidiary, Bio-Quant, we will not be able to
fully advance our products under development unless we enter into additional
partnering agreements and /or significantly grow Bio-Quant’s contract research
organization (CRO) business. If we are successful in entering into additional
partnering agreements for our products under development, we may receive
milestone payments, which will offset some of our research and development
expenses.
We
currently have no sales force or marketing organization and will need, but may
not be able, to attract marketing partners or afford qualified or experienced
marketing and sales personnel for our products under development.
In order
to market our proprietary products under development, we will need to attract
additional marketing partner(s) that will need to spend significant funds to
inform potential customers, including third-party distributors, of the
distinctive characteristics and benefits of our products. Our operating results
and long term success will depend, among other things, on our ability to
establish (1) successful arrangements with domestic and additional international
distributors and marketing partners and (2) an effective internal marketing
organization. Consummation of partnering arrangements is subject to the
negotiation of complex contractual relationships, and we may not be able to
negotiate such agreements on a timely basis, if at all, or on terms acceptable
to us.
Pre-clinical
and clinical trials are inherently unpredictable. If we or our
partners do not successfully conduct these trials, we or our partners may be
unable to market our products.
Through
pre-clinical studies and clinical trials, our products must be demonstrated to
be safe and effective for their indicated uses. Results from pre-clinical
studies and early clinical trials may not be indicative of, or allow for
prediction of results in later-stage testing. Future clinical trials
may not demonstrate the safety and effectiveness of our products or may not
result in regulatory approval to market our products. Commercial
sales in the United States of our products cannot begin until final FDA approval
is received. The failure of the FDA to approve our products for
commercial sales will have a material adverse effect on our
prospects.
Patents
and intellectual property rights are important to us but could be
challenged.
Proprietary
protection for our pharmaceutical products and products under development is of
material importance to our business in the U.S. and most other countries. We
have sought and will continue to seek proprietary protection for our products to
attempt to prevent others from commercializing equivalent products in
substantially less time and at substantially lower expense. Our success may
depend on our ability to (1) obtain effective patent protection within the U.S.
and internationally for our proprietary technologies and products, (2) defend
patents we own, (3) preserve our trade secrets, and (4) operate without
infringing upon the proprietary rights of others. In addition, we
have agreed to indemnify our partners for certain liabilities with respect to
the defense, protection and/or validity of our patents and would also be
required to incur costs or forego revenue if it is necessary for our partners to
acquire third party patent licenses in order for them to exercise the licenses
acquired from us.
We
currently hold ten U.S. patents out of a series of patent applications that we
have filed in connection with our NexACT
®
technology and our NexACT
®
-based
products under development. To further strengthen our global patent position on
our proprietary products under development, and to expand the patent protection
to other markets, we have filed under the Patent Cooperation Treaty
corresponding international applications for our issued U.S. patents and pending
U.S. patent applications. We previously held two patents covering the
first generation of the NexACT
®
technology enhancer, which expired in 2008 and 2009. While we believe
there are significant disadvantages to using the permeation enhancers covered by
these expired patents, third parties may nevertheless develop competitive
products using the enhancer technology now that it is no longer patent
protected..
While we
have obtained patents and have several patent applications pending, the extent
of effective patent protection in the U.S. and other countries is highly
uncertain and involves complex legal and factual questions. No
consistent policy addresses the breadth of claims allowed in or the degree of
protection afforded under patents of medical and pharmaceutical
companies. Patents we currently own or may obtain might not be
sufficiently broad enough to protect us against competitors with similar
technology. Any of our patents could be invalidated or
circumvented.
While we
believe that our patents would prevail in any potential litigation, the holders
of competing patents could determine to commence a lawsuit against us and even
prevail in any such lawsuit. Litigation could result in substantial
cost to and diversion of effort by us, which may harm our business. In addition,
our efforts to protect or defend our proprietary rights may not be successful
or, even if successful, may result in substantial cost to us.
Additionally,
in February 2009, we sold two patents to Warner Chilcott and are obligated to
indemnify Warner against challenges to those patents, which could result in
additional costs to us.
We
and our licensees depend upon third party manufacturers for chemical
manufacturing supplies.
We and
our licensees are dependent on third party chemical manufacturers for the active
drugs in our NexACT
®
-based
products under development, and for the supply of our NexACT
®
enhancers that are essential in the formulation and production of our topical
products on a timely basis and at satisfactory quality levels. If our
validated third party chemical manufacturers fail to produce quality products on
time and in sufficient quantities, our results would suffer, as we or our
licensees would encounter costs and delays in revalidating new third party
suppliers.
We
face severe competition.
We are
engaged in a highly competitive industry. We and our licensees can expect
competition from numerous companies, including large international enterprises,
and others entering the market for products similar to ours. Most of these
companies have greater research and development, manufacturing, marketing,
financial, technological, personnel and managerial resources. Acquisitions of
competing companies by large pharmaceutical or healthcare companies could
further enhance such competitors' financial, marketing and other resources.
Competitors may complete clinical trials, obtain regulatory approvals and
commence commercial sales of their products before we could enjoy a significant
competitive advantage. Products developed by our competitors may be more
effective than our products.
The
Bio-Quant CRO business primarily competes against in-house departments of
pharmaceutical, biotechnology and medical device companies, academic
institutions and other contract research organizations. Competitors in
Bio-Quant’s industry range from small, limited-service providers to full
service, global contract research organizations. Many of Bio-Quant’s
competitors have an established global presence, including Quintiles
Transnational Corp., Covance, Inc., Parexel International Corporation,
Pharmaceutical Product Development, Inc., Icon Clinical Research, and Kendle
International, Inc. In addition, many of Bio-Quant’s competitors have
substantially greater financial and other resources than Bio-Quant does and
offer a broader range of services in more geographical areas than Bio-Quant
does. Significant factors in determining whether Bio-Quant will be
able to compete successfully include: its consultative capabilities; its
reputation for on-time quality performance; its expertise and experience in
specific drug discovery, research and development areas; the scope of its
service offerings; its strength in various geographic markets; the price of its
services; and its size.
If
Bio-Quant’s services are not competitive based on these or other factors and
Bio-Quant is unable to develop an adequate level of new business, its business,
backlog position, financial condition and results of operations will be
materially and adversely affected. In addition, Bio-Quant may compete
for fewer clients arising out of consolidation within the pharmaceutical
industry and the growing tendency of drug companies to outsource to a smaller
number of preferred contract research organizations that have far greater
resources and capabilities.
Bio-Quant’s
services may from time to time experience periods of increased price competition
that could have a material adverse effect on its profitability and
revenues. Additionally, the CRO industry is not highly
capital-intensive, and the financial costs of entry into the industry are
relatively low. Therefore, as a general matter, the industry has few
barriers to entry. Newer, smaller entities with specialty focuses,
such as those aligned to a specific disease or therapeutic area, may compete
aggressively against Bio-Quant for clients.
We
may be subject to potential product liability and other claims, creating risks
and expense.
We are
also exposed to potential product liability risks inherent in the development,
testing, manufacturing, marketing and sale of human therapeutic
products. Product liability insurance for the pharmaceutical industry
is extremely expensive, difficult to obtain and may not be available on
acceptable terms, if at all. We currently have liability insurance to cover
claims related to our products that may arise from clinical trials, with
coverage of $1 million for any one claim and coverage of $3 million in total,
but we do not maintain product liability insurance for marketed products as our
products have yet to be approved for commercialization. We may need
to acquire such insurance coverage prior to the commercial introduction of our
products. If we obtain such coverage, we have no guarantee that the coverage
limits of such insurance policies will be adequate. A successful claim against
us if we are uninsured, or which is in excess of our insurance coverage, if any,
could have a material adverse effect upon us and on our financial
condition.
Risks
Relating to Our Industry
We
are vulnerable to volatile market conditions.
The
market prices for securities of biopharmaceutical and biotechnology companies,
including ours, have been highly volatile. The market has from time to time
experienced significant price and volume fluctuations that are unrelated to the
operating performance of particular companies. In addition, future
announcements, such as the results of testing and clinical trials, the status of
our relationships with third-party collaborators, technological innovations or
new therapeutic products, governmental regulation, developments in patent or
other proprietary rights, litigation or public concern as to the safety of
products developed by us or others and general market conditions, concerning us,
our competitors or other biopharmaceutical companies, may have a significant
effect on the market price of our common stock.
Instability
and volatility in the financial markets and the global economic recession are
likely to have a negative impact on our ability to raise necessary funds and on
our business, financial condition, results of operations and cash
flows.
During
recent months, there has been substantial volatility and a decline
in financial markets due at least in part to the deteriorating global
economic environment. In addition, there has been substantial uncertainty in the
capital markets and access to financing is uncertain. These conditions are
likely to have an adverse effect on our industry, licensing partners, and
business, including our financial condition, results of operations and cash
flows.
To the
extent that we do not generate sufficient cash from operations, we may need to
incur indebtedness, if available, to finance plans for growth or to continue our
current operations. However, recent turmoil in the credit markets and the
potential impact on the liquidity of major financial institutions may have an
adverse effect on our ability to fund our business strategy through borrowings,
under either existing or newly created instruments in the public or private
markets on terms that we believe to be reasonable, if at all.
Changes
in trends in the pharmaceutical and biotechnology industries, including
difficult market conditions, could adversely affect our operating
results.
Industry
trends and economic and political factors that affect pharmaceutical,
biotechnology and medical device companies also affect our
business. For example, the practice of many companies in these
industries has been to hire companies like us to conduct discovery, research and
development activities. If these companies suspend these activities
or otherwise reduce their expenditures on outsourced discovery, research and
development in light of current difficult conditions in credit markets and the
economy in general, or for any other reason, our operations, financial condition
and growth rate could be materially and adversely affected. In the
past, mergers, product withdrawal and liability lawsuits, and other factors in
the pharmaceutical industry have also slowed decision-making by pharmaceutical
companies and delayed drug development projects. Continuation or
increases in these trends could have an adverse effect on our
business. In addition, numerous governments have undertaken efforts
to control growing healthcare costs through legislation, regulation and
voluntary agreements with medical care providers and pharmaceutical
companies. If future cost-containment efforts limit the profits that
can be derived on new drugs, our clients might reduce their drug discovery and
development spending, which could reduce our revenue and have a material adverse
effect on our results of operations.
The
biotechnology, pharmaceutical and medical device industries generally and drug
discovery and development more specifically are subject to increasingly rapid
technological changes. Our competitors, clients and others might
develop technologies, services or products that are more effective or
commercially attractive than our current or future technologies, services or
products, or that render our technologies, services or products less competitive
or obsolete. If competitors introduce superior technologies, services
or products and we cannot make enhancements to our technologies, services or
products to remain competitive, our competitive position, and in turn our
business, revenue and financial condition, would be materially and adversely
affected.
We
and our licensees are subject to numerous and complex government regulations
which could result in delay and expense.
Governmental
authorities in the U.S. and other countries heavily regulate the testing,
manufacture, labeling, distribution, advertising and marketing of our proposed
products. None of our proprietary products under development has been approved
for marketing in the U.S. Before any products we develop are marketed, FDA and
comparable foreign agency approval must be obtained through an extensive
clinical study and approval process.
The
studies involved in the approval process are conducted in three
phases. In Phase 1 studies, researchers assess safety or the most
common acute adverse effects of a drug and examine the size of doses that
patients can take safely without a high incidence of side effects. Generally, 20
to 100 healthy volunteers or patients are studied in the Phase 1 study for a
period of several months. In Phase 2 studies, researchers determine the drug's
efficacy with short-term safety by administering the drug to subjects who have
the condition the drug is intended to treat, assess whether the drug favorably
affects the condition, and begin to identify the correct dosage level. Up to
several hundred subjects may be studied in the Phase 2 study for approximately 6
to 12 months, depending on the type of product tested. In Phase 3 studies,
researchers further assess efficacy and safety of the drug. Several hundred to
thousands of patients may be studied during the Phase 3 studies for a period
from 12 months to several years. Upon completion of Phase 3 studies, a New Drug
Application is submitted to the FDA or foreign governmental regulatory authority
for review and approval.
The
failure to obtain requisite governmental approvals for our products under
development in a timely manner or at all would delay or preclude us and our
licensees from marketing our products or limit the commercial use of our
products, which would adversely affect our business, financial condition and
results of operations.
Any
failure on our part to comply with applicable regulations could result in the
termination of on-going research, discovery and development activities or the
disqualification of data for submission to regulatory
authorities. As a result of any such failure, we could be
contractually required to perform repeat services at no further cost to our
clients, but at a substantial cost to us. The issuance of a notice
from regulatory authorities based upon a finding of a material violation by us
of applicable requirements could result in contractual liability to our clients
and/or the termination of ongoing studies which could materially and adversely
affect our results of operations. Furthermore, our reputation and
prospects for future work could be materially and adversely
diminished.
Because
we intend that our products will be sold and marketed outside the U.S., we
and/or our licensees are subject to foreign regulatory requirements governing
the conduct of clinical trials, product licensing, pricing and reimbursements.
These requirements vary widely from country to country. The failure to meet each
foreign country's requirements would delay the introduction of our proposed
products in the respective foreign country and limit our revenues from sales of
our proposed products in foreign markets. For example, in February
2008, we filed an application with Health Canada seeking approval to
commercialize Vitaros in Canada. Since making that filing, we have
received comments from Health Canada on our submission. In April
2010, we submitted a response intended to address these comments. As
of the date of this prospectus supplement, we have not received confirmation of
the acceptance of our response and we continue to await a final approval
decision. If Health Canada does not accept our response, or if our
application is otherwise denied, we will be unable to commercialize Vitaros and
will need to either abandon approval plans in Canada or refile our application
after conducting such additional studies as may be needed to support our
application. Such a determination from Health Canada would delay the
commercialization of Vitaros, force us to undertake additional studies, and/or
prevent us from commercializing this drug candidate altogether in
Canada.
Successful
commercialization of our products may depend on the availability of
reimbursement to the consumer from third-party healthcare payers, such as
government and private insurance plans. Even if one or more products is
successfully brought to market, reimbursement to consumers may not be available
or sufficient to allow the realization of an appropriate return on our
investment in product development or to sell our products on a competitive
basis. In addition, in certain foreign markets, pricing or profitability of
prescription pharmaceuticals is subject to governmental controls. In the U.S.,
federal and state agencies have proposed similar governmental control and the
U.S. Congress has recently passed legislative and regulatory reforms that will
affect companies engaged in the healthcare industry. Pricing constraints on our
products in foreign markets and possibly in the U.S. could adversely affect our
business and limit our revenues.
Risks
Relating to Our Stock
Our
stock may be delisted from Nasdaq, which may make it more difficult for you to
sell your shares.
Currently,
our common stock trades on the NASDAQ Capital Market. On January 26,
2010, we received an expected notice of non-compliance (the “Notice”) from The
NASDAQ Stock Market LLC based upon the bid price of the Company’s common stock
closing at less than $1.00 per share in violation of NASDAQ Listing Rule
5550(a)(2), which could serve as an additional basis for the delisting of the
Company’s securities from The NASDAQ Capital Market.
We
responded to the Notice on January 27, 2010, requesting additional time to
regain compliance with the bid price listing requirement. Our January
27, 2010 response also sought an exemption, through May 24, 2010, from
compliance with another existing deficiency (failure to comply with the annual
stockholder meeting and proxy solicitation requirements) to allow the Company to
execute its plans to regain compliance.
At an
appeals hearing held in November 2009 at our request, following a series of
communications between us and NASDAQ regarding various deficiencies, including
those described above and our failure to satisfy the minimum $2.5 million in
stockholders’ equity requirement for continued listing as of August 2009, we
presented to NASDAQ our plan to regain compliance with the applicable listing
requirements. On February 1, 2010, we received the Hearing Panel’s
determination (the “Determination Letter”). The Determination
Letter confirmed that NASDAQ would continue the listing of the Company’s
securities on The NASDAQ Stock Market provided that the Company shall have (1)
solicited proxies and held its annual meeting on or before May 24, 2010 and (2)
evidenced compliance with the minimum bid price requirement and all other
requirements for The NASDAQ Stock Market on or before July 15,
2010. If the Company is not able to demonstrate compliance with all
requirements for continued listing on or before July 15, 2010, its securities
may be delisted. During this exemption period, the Company must
provide prompt notice to NASDAQ of any significant events that occur, including,
but not limited to, any event that may call into question the Company’s
historical financial information or that may impact the Company’s ability to
maintain compliance with any NASDAQ listing requirement or exemption
deadline.
If we
fail to achieve the minimum bid price requirement of the NASDAQ Capital Market
by July 15, 2010 or fail to maintain compliance with any other listing
requirements during this period (including a failure to comply with the annual
stockholder meeting and proxy solicitation requirements on or before May 24,
2010), we may be delisted and our stock would be considered a penny stock under
regulations of the Securities and Exchange Commission and would therefore be
subject to rules that impose additional sales practice requirements on
broker-dealers who sell our securities. The additional burdens imposed upon
broker-dealers by these requirements could discourage broker-dealers from
effecting transactions in our common stock, which could severely limit the
market liquidity of the common stock and your ability to sell our securities in
the secondary market. In addition, if we fail to maintain our listing on NASDAQ
or any other United States securities exchange, quotation system, market or
over-the-counter bulletin board, we will be subject to cash penalties under
investor rights agreements to which we are a party until a listing is
obtained.
We
do not expect to pay dividends on our common stock in the foreseeable
future.
Although
our stockholders may receive dividends if, as and when declared by our board of
directors, we do not intend to declare dividends on our common stock in the
foreseeable future. Therefore, you should not purchase our common stock if you
need immediate or future income by way of dividends from your
investment.
We
may issue additional shares of our capital stock that could dilute the value of
your shares of common stock.
We are
authorized to issue 280,000,000 shares of our capital stock, consisting of
270,000,000 shares of our common stock and 10,000,000 shares of our preferred
stock. As of April 15, 2010, 126,902,281 shares of our common stock were issued
and outstanding and approximately 9,930,000 shares of our common stock were
issuable upon the exercise or conversion of outstanding options and
warrants. As of April 15, 2010, there were no shares of preferred
stock outstanding. In light of our possible future need for
additional financing, we may issue authorized and unissued shares of common
stock at below current market prices or additional convertible securities that
could dilute the earnings per share and book value of your shares of our common
stock.
Additionally,
we have substantial notes payable issued in connection with the acquisition of
Bio-Quant due in December 2010. These notes can, with approval of our
stockholders, be repaid with the issuance of common stock. As of the
date of this preliminary prospectus, we would need to issue up to 63 million
shares, at a predetermined price of $0.168 per share to repay such notes payable
in full. We are currently seeking approval at our 2010 annual meeting
of stockholders to allow for the repayment of the notes through the issuance of
this additional common stock. If approved, we could issue these
additional shares at any time and without further notice.
In
addition to provisions providing for proportionate adjustments in the event of
stock splits, stock dividends, reverse stock splits and similar events, certain
outstanding warrants and convertible instruments provide (with certain
exceptions) for an adjustment of the exercise or conversion price if we issue
shares of common stock at prices lower than the then exercise or conversion
price or the then prevailing market price. This means that if we need to raise
equity financing at a time when the market price for our common stock is lower
than the exercise or conversion price, or if we need to provide a new equity
investor with a discount from the then prevailing market price, then the
exercise price will be reduced and the dilution to stockholders
increased.
Risk
Relating to the Offering
We have convertible notes outstanding
that may be repaid through the issuance of additional shares of common stock. If
we issue shares at a price per-share share that is below the conversion price
under these notes, then the conversion price will be adjusted downward, which
will increase the number of shares potentially issuable under these
notes.
In March
2010, we issued $4,000,000 of convertible promissory notes (the “Notes”). The
Notes are currently convertible into shares of our common stock at $0.58 per
share. However, this conversion price will be adjusted downward on a “weighted
average” basis if we sell common stock at a per-share price below $0.58 or the
then-applicable conversion price. Under this formula, the conversion
price adjustment is determined by the number of shares being sold and the extent
of the discount below the Note conversion price. For example, as of
April 15, 2010, the closing price of our common stock on the NASDAQ Stock Market
was $0.45 per share. Assuming that we sold the entire $10,000,000 of
shares being offered hereby in a single transaction at $0.45 per share, the
conversion price under the Notes would be adjusted down to approximately $0.56,
which would result in the Notes being convertible into approximately 238,000
additional shares. This increase of shares under the Notes would,
upon conversion, dilute the voting power and ownership percentage of our
stockholders and may adversely affect prevailing market prices of our common
stock.
Management
will have broad discretion as to the use of the proceeds from this offering, and
we may not use the proceeds effectively.
Our
management will have broad discretion in the application of the net proceeds
from this offering and could spend the proceeds in ways that do not improve our
results of operations or enhance the value of our common stock. Our failure to
apply these funds effectively could have a material adverse effect on our
business or the development of our product candidates and cause the price of our
common stock to decline.
You
will experience immediate and substantial dilution in the net tangible book
value per share of the common stock you purchase.
Since the
price per share of our common stock being offered is substantially higher than
the net tangible book value per share of our common stock, you will suffer
substantial dilution in the net tangible book value of the common stock you
purchase in this offering. Based on an assumed offering price of $0.45 per
share, if you purchase shares of common stock in this offering, you will suffer
immediate and substantial dilution of approximately ($0.386) per share in the
net tangible book value of the common stock. See the section entitled “Dilution”
in this prospectus supplement for a more detailed discussion of the dilution you
will incur if you purchase common stock in this offering.
USE OF PROCEEDS
We
anticipate using the net proceeds from the sale of our securities offered by
this prospectus supplement primarily for general working capital. We may also
use a portion of the net proceeds to pay off outstanding indebtedness and/or
acquire or invest in complementary businesses, products and technologies.
Although we have no specific agreements, commitments or understandings with
respect to any acquisition, we evaluate acquisition opportunities and engage in
related discussions with other companies from time to time and may use a portion
of the proceeds from this offering in connection with one or more such
acquisitions.
The
amounts and timing of these expenditures will depend on a number of factors,
such as the timing, scope, progress and results of our research and development
efforts, the timing and progress of any partnering efforts, and the competitive
environment for our product candidates. As of the date of this prospectus
supplement, we cannot specify with certainty all of the particular uses of the
proceeds from this offering. Accordingly, we will retain broad discretion over
the use of such proceeds. Pending the use of the net proceeds, we
intend to invest the net proceeds in short-term, interest-bearing,
investment-grade securities.
DILUTION
Our net
tangible book value as of December 31, 2009 was approximately $(1.44) million,
or $(0.014) per share of common stock. Net tangible book value per
share is calculated by subtracting our total liabilities from our total tangible
assets, which is total assets less intangible assets, and dividing this amount
by the number of shares of common stock outstanding. After giving effect to the
sale by us of the full $10,000,000 of common stock that may be offered in this
offering at an assumed offering price of $0.45 per share, which was the closing
price of our common stock on the NASDAQ Capital Market as of April 15, 2010, and
after deducting estimated offering commissions and expenses payable by us,
as-adjusted net tangible book value as of December 31, 2009 would have been
approximately $8.11 million, or $0.064 per share of common stock. This
represents an immediate increase in the net tangible book value of $0.078 per
share to our existing stockholders and an immediate and substantial dilution in
net tangible book value of ($0.386) per share to new investors. The following
table illustrates this hypothetical per share dilution:
|
Assumed offering price per
share
|
|
$
|
0.45
|
|
|
Net tangible book value per share
as of
December 31, 2009
|
|
$
|
(0.014
|
)
|
|
Increase per share attributable to
new investors
|
|
$
|
0.078
|
|
|
As-adjusted net tangible book
value per share after this offering
|
|
$
|
0.064
|
|
|
Dilution per share to new
investors
|
|
$
|
(0.386
|
)
|
The
foregoing dilution information assumes an offering price equal to the closing
price for our common stock on April 15, 2010 and is based on 104,821,571 shares
outstanding as of December 31, 2009. The actual price at which we
sell shares in this offering may be higher or lower than this assumed price and
our total shares outstanding has changed, and is expected to continue to change,
since December 31, 2009. For each $0.10 increase or decrease in the
assumed offering price, the per-share dilution would be $0.098 more and $0.097
less, respectively, than the figures in the above table.
PLAN OF
DISTRIBUTION
We may
sell up to $10,000,000 of common stock from time to time through Brinson Patrick
Securities Corporation, or Brinson Patrick, as sales manager. These
sales, if any, will be made pursuant to a sales agreement entered into between
us and the sales manager, a copy of which will be filed with the Securities and
Exchange Commission. Sales of our common stock, if any, will be made on our
behalf on or through national securities exchanges, such as NASDAQ, and/or
alternative trading systems, at market prices prevailing at the time of sale,
and/or in any other manner permitted by law, including, without limitation,
privately negotiated transactions. These sales will be made by the sales manager
on a best-efforts basis. We may also make sales under this Prospectus Supplement
pursuant to a plan or arrangement that is intended to comply with the safe
harbor afforded under Rule 10b5-1 promulgated under the Securities Exchange Act
of 1934.
The
compensation to the sales manager for sales of our common stock will be at a
fixed commission rate of 4.5% of the gross sales price per share
sold. In connection with the sale of common stock on our behalf, the
sales manager will be deemed to be an “underwriter” within the meaning of the
Securities Act of 1933, as amended, or the Securities Act, and the compensation
of the sales manager may be deemed to be underwriting commissions or discounts.
We have agreed to provide indemnification and contribution to the sales manager
against liabilities, including liabilities under the Securities
Act. The aggregate value of all compensation received or to be
received by Brinson Patrick does not exceed 8% of the offering
proceeds.
The
following table shows the public offering price, underwriting commissions and
proceeds, before our estimated offering expenses, to us, assuming all
$10,000,000 of common stock is sold at an assumed price of $0.45 per share,
which was the last reported sales price of our common stock on the NASDAQ
Capital Market on April 15, 2010.
|
|
|
Per
Share
*
|
|
|
Total
*
|
|
|
Public
offering price
|
|
$
|
0.450
|
|
|
$
|
10,000,000
|
|
|
Underwriting
commissions
**
|
|
$
|
0.002
|
|
|
$
|
450,000
|
|
|
Proceeds,
before expenses, to us
|
|
$
|
0.043
|
|
|
$
|
9,550,000
|
|
|
*
|
|
This
is an offering that will be made, if at all, from time to time at the
then-prevailing market prices. Therefore, there can be no assurances that
the per share or total public offering price, underwriting commissions,
and proceeds, before expenses, will be as set forth
above.
|
|
|
|
|
|
**
|
|
Underwriting
commissions for sales of our common stock shall be at a fixed commission
rate of 4.5% of the gross sales price per share
sold.
|
The
expenses of the offering, not including underwriting commissions, are estimated
at $75,000, include certain fees and disbursements of underwriters’ counsel, and
are payable by us.
DESCRIPTION
OF COMMON STOCK
Pursuant
to our articles of incorporation, we have the authority to issue up to
270,000,000 shares of common stock, par value $0.001 per share. As of
the date of this prospectus supplement, 126,902,281 shares of common stock were
issued and outstanding.
Voting, Dividend and Other
Rights
. Each outstanding share of common stock entitles the holder to one
vote on all matters presented to stockholders for a vote. Holders of shares of
common stock do not have any cumulative voting rights. This means that the
holders of a majority of the outstanding shares of common stock can elect all of
the directors then standing for election and the holders of the remaining shares
will not be able to elect any directors. Holders of shares of common stock do
not have preemptive rights to subscribe for any of our securities. We are
permitted to pay dividends to the holders of shares of common stock if and when
our board of directors declares such dividends out of legally available
funds.
Rights Upon Liquidation
.
Under Nevada law, our stockholders generally are not liable for our debts or
obligations. Upon our liquidation, subject to the right of any holders of
preferred stock to receive preferential distributions, each holder of common
stock may participate pro rata in the distribution of the assets remaining after
payment of, or adequate provision for, all of our known debts and
liabilities.
PROSPECTUS
$30,000,000
NEXMED,
Inc.
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
We may
offer and sell an indeterminate number of shares of our common stock and
preferred stock, debt securities and warrants from time to time under this
prospectus. We may offer these securities separately or as units, which may
include combinations of the securities. We will describe in a
prospectus supplement the securities we are offering and selling, as well as the
specific terms of the securities.
We may
offer these securities in amounts, at prices and on terms determined at the time
of offering. We may sell the securities directly to you, through agents we
select, or through underwriters and dealers we select. If we use
agents, underwriters or dealers to sell the securities, we will name them and
describe their compensation in a prospectus supplement.
Our
common stock trades on the NASDAQ Capital Market under the symbol “NEXM.” On
April 16, 2010, the closing price for our common stock, as reported on the
NASDAQ Capital Market, was $0.45 per share.
Investing
in our securities involves certain risks. See “Risk Factors” beginning on
Page 3 of this prospectus and in the applicable prospectus supplement for
certain risks you should consider. You should read the entire prospectus
carefully before you make your investment decision.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal
offense.
The date
of this prospectus is April 16, 2010
TABLE
OF CONTENTS
|
|
|
Page
|
|
About
This Prospectus
|
|
1
|
|
About
NexMed
|
|
3
|
|
Risk
Factors
|
|
4
|
|
Forward
Looking Statements
|
|
4
|
|
Description
of Securities
|
|
4
|
|
Use
of Proceeds
|
|
5
|
|
Ratio
of Earnings to Fixed Charges
|
|
5
|
|
Plan
of Distribution
|
|
5
|
|
Legal
Matters
|
|
7
|
|
Experts
|
|
7
|
|
Incorporation
of Documents by Reference
|
|
7
|
|
Where
You Can Find More Information
|
|
8
|
You
should rely only on the information contained or incorporated by reference in
this prospectus and any applicable prospectus supplements. We have not
authorized anyone to provide you with information different from that contained
in this prospectus. Offers to sell, and offers to buy, the shares of common
stock are valid only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as to the date of this
prospectus, regardless of the time of delivery of the prospectus or of any sale
of the common stock.
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission (“SEC”), utilizing a shelf registration process. Under
the shelf registration process, we may offer shares of our common stock and
preferred stock, various series of debt securities and warrants to purchase any
of such securities with a total value of up to $30,000,000 from time to time
under this prospectus at prices and on terms to be determined by market
conditions at the time of offering. This prospectus provides you with a general
description of the securities we may offer. Each time we offer a type or series
of securities, we will provide a prospectus supplement that will describe the
specific amounts, prices and other important terms of the securities, including,
to the extent applicable:
|
|
·
|
designation
or classification;
|
|
|
·
|
aggregate
principal amount or aggregate offering
price;
|
|
|
·
|
maturity;
|
|
|
·
|
original
issue discount, if any;
|
|
|
·
|
rates
and times of payment of interest, dividends or other payments, if
any;
|
|
|
·
|
redemption,
conversion, exchange, settlement or sinking fund terms, if
any;
|
|
|
·
|
conversion,
exchange or settlement prices or rates, if any, and, if applicable, any
provisions for changes to or adjustments in the conversion, exchange or
settlement prices or rates and in the securities or other property
receivable upon conversion, exchange or settlement;
|
|
|
·
|
ranking;
|
|
|
·
|
restrictive
covenants, if any;
|
|
|
·
|
voting
or other rights, if any; and
|
|
|
·
|
important
federal income tax considerations.
|
A
prospectus supplement may include a discussion of risks or other special
considerations applicable to us or the offered securities. A prospectus
supplement may also add, update or change information in this prospectus. If
there is any inconsistency between the information in this prospectus and the
applicable prospectus supplement, you must rely on the information in the
prospectus supplement. Please carefully read both this prospectus and the
applicable prospectus supplement together with additional information described
under the heading “Where You Can Find More Information.” This prospectus may not
be used to offer or sell any securities unless accompanied by a prospectus
supplement.
The
registration statement containing this prospectus, including exhibits to the
registration statement, provides additional information about us and the common
stock offered under this prospectus. The registration statement can be read at
the SEC website or at the SEC's public reading room mentioned under the heading
“Where You Can Find More Information.”
We have
not authorized any broker-dealer, salesperson or other person to give any
information or to make any representation other than those contained or
incorporated by reference in this prospectus and the accompanying supplement to
this prospectus. You must not rely upon any information or representation not
contained or incorporated by reference in this prospectus or the accompanying
prospectus supplement. This prospectus and the accompanying supplement to this
prospectus do not constitute an offer to sell or the solicitation of an offer to
buy securities, nor do this prospectus and the accompanying supplement to this
prospectus constitute an offer to sell or the solicitation of an offer to buy
securities in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation. The information contained in this prospectus and the
accompanying prospectus supplement speaks only as of the date set forth on the
cover page and may not reflect subsequent changes in our business, financial
condition, results of operations and prospects even though this prospectus and
any accompanying prospectus supplement is delivered or securities are sold on a
later date.
We may
sell the securities directly to or through underwriters, dealers or agents. We,
and our underwriters or agents, reserve the right to accept or reject all or
part of any proposed purchase of securities. If we do offer securities through
underwriters or agents, we will include in the applicable prospectus
supplement:
|
|
·
|
the
names of those underwriters or agents;
|
|
|
·
|
applicable
fees, discounts and commissions to be paid to them;
|
|
|
·
|
details
regarding over-allotment options, if any;
and
|
|
|
·
|
the
net proceeds to us.
|
Common
Stock
.
We may
issue shares of our common stock from time to time. Holders of our common stock
are entitled to one vote per share for the election of directors and on all
other matters that require stockholder approval. Subject to any preferential
rights of any outstanding preferred stock, in the event of our liquidation,
dissolution or winding up, holders of our common stock are entitled to share
ratably in the assets remaining after payment of liabilities and the liquidation
preferences of any outstanding preferred stock. Our common stock does not carry
any redemption rights or any preemptive or preferential rights enabling a holder
to subscribe for, or receive shares of, any class of our common stock or any
other securities convertible into shares of any class of our common
stock.
Preferred
Stock.
We may issue shares of our preferred stock from time to time, in
one or more series. Under our Articles of Incorporation, our board of directors
has the authority, without further action by stockholders, to designate up to
10,000,000 authorized shares of preferred stock in one or more series and to fix
the voting rights, designations, preferences, limitations, restrictions,
privileges and relative rights granted to or imposed upon the preferred stock,
including dividend rights, conversion rights, voting rights, rights and terms of
redemption, liquidation preference and sinking fund terms, any or all of which
may be greater than the rights of the common stock. 1,001,400 shares
of preferred stock have been so designated and 8,998,600 shares of preferred
stock remain available for such designation by our board of
directors.
If we
issue preferred stock, we will fix the voting rights, designations, preferences,
limitations, restrictions, privileges and relative rights of the preferred stock
of each series that we sell under this prospectus and applicable prospectus
supplements in the certificate of designation relating to that series. If we
issue preferred stock, we will incorporate by reference into the registration
statement of which this prospectus is a part the form of any certificate of
designation that describes the terms of the series of preferred stock we are
offering before the issuance of such series of preferred stock. We urge you to
read the prospectus supplement related to any series of preferred stock we may
offer, as well as the complete certificate of designation that contains the
terms of the applicable series of preferred stock.
Debt
Securities
. We may issue debt securities from time to time, in one or
more series, as either senior or subordinated debt or as senior or subordinated
convertible debt. The senior debt securities will rank equally with any
other
unsubordinated debt that we may have and may be secured or unsecured. The
subordinated debt securities will be subordinate and junior in right of payment,
to the extent and in the manner described in the instrument governing the debt,
to all or some portion of our indebtedness. Any convertible debt securities that
we issue will be convertible into or exchangeable for our common stock or other
securities of ours. Conversion may be mandatory or at your option and would be
at prescribed conversion rates.
If we
issue debt securities, they will be issued under one or more documents called
indentures, which are contracts between us and a trustee for the holders of the
debt securities. We urge you to read the prospectus supplement related to the
series of debt securities being offered, as well as the complete indenture that
contains the terms of the debt securities (which will include a supplemental
indenture). If we issue debt securities, indentures and forms of debt securities
containing the terms of debt securities being offered will be incorporated by
reference into the registration statement of which this prospectus is a part
from reports we would subsequently file with the SEC.
Warrants
.
We may issue warrants for the purchase of common stock, preferred stock and/or
debt securities in one or more series, from time to time. We may issue warrants
independently or together with common stock, preferred stock and/or debt
securities, and the warrants may be attached to or separate from those
securities.
If we
issue warrants, they will be evidenced by warrant agreements or warrant
certificates issued under one or more warrant agreements, which are contracts
between us and an agent for the holders of the warrants. We urge you to read the
prospectus supplement related to any series of warrants we may offer, as well as
the complete warrant agreement and warrant certificate that contain the terms of
the warrants. If we issue warrants, forms of warrant agreements and warrant
certificates relating to warrants for the purchase of common stock, preferred
stock and debt securities will be incorporated by reference into the
registration statement of which this prospectus is a part from reports we would
subsequently file with the SEC.
ABOUT
NEXMED, INC.
NexMed,
Inc. is life sciences company that operates in two segments: (i) designing and
developing pharmaceutical products based on our NexACT delivery technology, and
(ii) providing pre-clinical CRO services through our Bio-Quant
subsidiary. Bio-Quant is the largest specialty CRO based in San
Diego, California, and is one of the industry's most experienced CROs for
in vitro
and
in vivo
pharmacology services
and research models. NexMed’s goal is to generate revenues from the
growth of its Discovery Pre-clinical CRO business, while aggressively seeking to
monetize its proprietary NexACT drug delivery technology through out-licensing
agreements with pharmaceutical and biotechnology companies worldwide. At the
same time, we are actively pursuing partnering opportunities for its
NexACT-based treatments for onychomycosis, psoriasis, sexual dysfunction and
cancer. Below is a summary of our product pipeline and the stage of
development for each compound as of the date of this prospectus:
|
Name
|
|
Indication
|
|
Development
Stage **
|
|
Vitaros
*
|
|
Erectile
dysfunction
|
|
Phase
III completed; seeking approval
|
|
NM1000060
|
|
Onychomycosis
(anti-fungal)
|
|
Phase
II completed
|
|
Femprox
|
|
Female
sexual arousal disorder
|
|
Phase
I completed
|
|
PrevOnco
|
|
Oncology
(HCC)
|
|
IND
pending to commence Phase II trials
|
|
Calcipotriene
/ betamethasone
|
|
Psoriasis
|
|
Pre-clinical
|
|
Ketoprofen
|
|
Pain
Relief
|
|
Pre-clinical
|
|
Alprostadil
|
|
Wound
healing
|
|
Pre-clinical
|
|
Alprostadil
|
|
Raynaud’s
Disease
|
|
Pre-clinical
|
|
Lidocaine
|
|
Pain
|
|
Pre-clinical
|
|
*
|
U.S.
rights sold to Warner Chilcott. As of the date of this
prospectus, under review in Canada for marketing approval and Warner
Chilcott expected to seek approval in U.S. in
2010.
|
|
**
|
At
present, the Company is sponsoring no ongoing clinical trials of these
drug candidates. Pre-clinical development work is being
performed by our Bio-Quant subsidiary while we are seeking
commercialization partners to defray part or all of the clinical
development costs in a licensing or partnering
arrangement.
|
We are a
Nevada corporation and have been in existence since 1987. We have
operated in the pharmaceutical industry since 1995, focusing on research and
development in the area of drug delivery. Our proprietary drug
delivery technology is called NexACT® . Please refer to the
applicable prospectus supplement and the filings that are incorporated herein by
reference for more complete and current information regarding NexMed and our
operations.
Our
principal executive offices are at 6330 Nancy Ridge Drive, Suite 103, San Diego,
California 92121 and our telephone number is (858) 222-8041.
RISK
FACTORS
Before
making an investment decision, you should carefully consider the risks described
under “Risk Factors” in the applicable prospectus supplement, together with all
of the other information appearing in this prospectus or incorporated by
reference into this prospectus and any applicable prospectus supplement, in
light of your particular investment objectives and financial circumstances. Our
business, financial condition or results of operations could be materially
adversely affected by any of these risks. The trading price of our securities
could decline due to any of these risks, and you may lose all or part of your
investment. This prospectus and the incorporated documents also contain
forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including the risks mentioned
above.
FORWARD-LOOKING
STATEMENTS
This
prospectus and the other documents incorporated by reference into this
prospectus contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Statements in this prospectus and the
other documents incorporated into this prospectus by reference that are not
historical facts are identified as “forward-looking statements” for the purpose
of the safe harbor provided by Section 21E of the Securities Exchange Act of
1934, as amended, or the Exchange Act, and Section 27A of the Securities Act of
1933, as amended, or the Securities Act. Forward-looking statements include
projections, assumptions or information concerning possible or assumed future
actions, events or our results of operations. These statements involve estimates
and assumptions based on the judgment of the company’s management. A number of
risks and uncertainties may cause actual results to differ materially from those
suggested by the forward-looking statements.
Forward-looking
statements include the information in this prospectus and the other documents
incorporated by reference into this prospectus. These statements may be made
regarding the business, operations, financial performance and condition,
earnings, our prospects and products, as well as regarding our industry
generally. These statements may be preceded by, followed by or include the words
“believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “should”
or similar expressions. We claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995 for all forward-looking statements. We do not undertake any
obligation to publicly update any forward-looking statements to reflect
subsequent events or circumstances.
Forward-looking
statements are not guarantees of performance. You should understand that these
factors, in addition to those discussed in “Risk Factors” above and elsewhere in
this document, and in the documents that are incorporated by reference into this
prospectus, could affect our future results and could cause those results or
other outcomes to differ materially from those expressed or implied in any
forward-looking statement.
DESCRIPTION
OF SECURITIES
We may
offer shares of our common stock and preferred stock, various series of debt
securities and warrants to purchase any such securities with a total value of up
to $30,000,000 from time to time under this prospectus at prices and on terms to
be determined by market conditions at the time of offering. Each time
we offer a type or series of securities, we will provide a prospectus supplement
that will describe the specific amounts, prices and other important terms of the
securities.
USE
OF PROCEEDS
We will
retain broad discretion over the use of the net proceeds from the sale of our
securities offered hereby. Except as described in any prospectus
supplement, we currently anticipate using the net proceeds from the sale of our
securities hereby primarily for general working capital. We may also
use a portion of the net proceeds to pay off outstanding indebtedness and/or
acquire or invest in complementary businesses, products and technologies.
Although we have no specific agreements, commitments or understandings with
respect to any acquisition, we evaluate acquisition opportunities and engage in
related discussions with other companies from time to time.
Pending
the use of the net proceeds, we intend to invest the net proceeds in short-term,
interest-bearing, investment-grade securities.
RATIO
OF EARNINGS TO FIXED CHARGES
If we
offer debt securities and/or preference equity securities under this prospectus,
then we will, at that time, provide a ratio of earnings to fixed charges and/or
ratio of combined fixed charges and preference dividends to earnings,
respectively, in the applicable prospectus supplement for such
offering.
PLAN
OF DISTRIBUTION
We may
sell the securities covered by this prospectus from time to time in one or more
offerings. Registration of the securities covered by this prospectus does not
mean, however, that those securities will necessarily be offered or
sold.
We may
sell the securities separately or together:
|
|
·
|
through
one or more underwriters or dealers in a public offering and sale by
them;
|
|
|
·
|
directly
to investors; or
|
We may
sell the securities from time to time:
|
|
·
|
in
one or more transactions at a fixed price or prices, which may be changed
from time to time;
|
|
|
·
|
at
market prices prevailing at the times of
sale;
|
|
|
·
|
at
prices related to such prevailing market prices; or
|
|
|
·
|
at
negotiated prices.
|
We will
describe the method of distribution of the securities and the terms of the
offering in the prospectus supplement.
Any
discounts or concessions allowed or re-allowed or paid to dealers may be changed
from time to time.
If
underwriters are used in the sale of any securities, the securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions described above. The securities may be
either offered to the public through underwriting syndicates represented by
managing underwriters, or directly by underwriters. Generally, the underwriters’
obligations to purchase the securities will be subject to conditions precedent
and the underwriters will be obligated to purchase all of the securities if they
purchase any of the securities. We may use underwriters with whom we have a
material relationship. We will describe in the prospectus supplement, naming the
underwriter, the nature of any such relationship.
We may
authorize underwriters, dealers or agents to solicit offers by certain
purchasers to purchase the securities from us at the public offering price set
forth in the prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. The
contracts will be subject only to those conditions set forth in the prospectus
supplement, and the prospectus supplement will set forth any commissions we pay
for solicitation of these contracts.
We may
enter into derivative transactions with third parties, or sell securities not
covered by this prospectus to third parties in privately negotiated
transactions. If the applicable prospectus supplement indicates, in connection
with those derivatives, the third parties may sell securities covered by this
prospectus and the applicable prospectus supplement, including in short sale
transactions. If so, the third party may use securities pledged by us or
borrowed from us or others to settle those sales or to close out any related
open borrowings of stock, and may use securities received from us in settlement
of those derivatives to close out any related open borrowings of stock. The
third party in such sale transactions will be an underwriter and will be
identified in the applicable prospectus supplement or in a post-effective
amendment.
Underwriters,
dealers and agents may be entitled to indemnification by us against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments made by the underwriters, dealers or
agents, under agreements between us and the underwriters, dealers and
agents.
We may
grant underwriters who participate in the distribution of securities an option
to purchase additional securities to cover over-allotments, if any, in
connection with the distribution.
Underwriters,
dealers or agents may receive compensation in the form of discounts, concessions
or commissions from us or our purchasers, as their agents in connection with the
sale of securities. These underwriters, dealers or agents may be considered to
be underwriters under the Securities Act. As a result, discounts, commissions or
profits on resale received by the underwriters, dealers or agents may be treated
as underwriting discounts and commissions. The prospectus supplement will
identify any such underwriter, dealer or agent and describe any compensation
received by them from us. Any initial public offering price and any discounts or
concessions allowed or re-allowed or paid to dealers may be changed from time to
time.
Unless
otherwise specified in the related prospectus supplement, all securities we
offer, other than common stock, will be new issues of securities with no
established trading market. Any underwriters may make a market in these
securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Any common stock sold pursuant to a
prospectus supplement will be listed for trading on the NASDAQ Stock Market or
other principal market for our common stock. We may apply to list any series of
debt securities, preferred stock or warrants on an exchange, but we are not
obligated to do so. Therefore, there may not be liquidity or a trading market
for any series of securities.
Any
underwriter may engage in over-allotment transactions, stabilizing transactions,
short-covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves sales in excess of the offering
size, which create a short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters to reclaim a selling concession
from a dealer when the securities originally sold by the dealer are purchased in
a covering transaction to cover short positions. Those activities may cause the
price of the securities to be higher than it would otherwise be. If commenced,
the underwriters may discontinue any of the activities at any time. We make no
representation or prediction as to the direction or magnitude of any effect that
such transactions may have on the price of the securities. For a description of
these activities, see the information under the heading “Underwriting” or “Plan
of Distribution” in the applicable prospectus supplement.
Underwriters,
broker-dealers or agents who may become involved in the sale of the common stock
may engage in transactions with and perform other services for us in the
ordinary course of their business for which they receive
compensation.
LEGAL
MATTERS
The
validity of the issuance of the shares of Common Stock or Preferred Stock
offered hereby will be passed upon for us by Brownstein Hyatt Farber Schreck,
LLP, Las Vegas, Nevada. The binding nature of any debt securities or
warrants being offered hereby will be passed upon by Goodwin Procter LLP, San
Diego, California.
EXPERTS
The
financial statements for the years ended December 31, 2009 and 2008,
incorporated in this Prospectus by reference to the Annual Report on Form 10-K
for the year ended December 31, 2009, have been so incorporated in reliance on
the report (which contains an explanatory paragraph relating to the Company’s
ability to continue as a going concern as described in Note 1 to the financial
statements) of Amper, Politziner & Mattia, LLP, an independent registered
public accounting firm, given on the authority of said firm as experts in
auditing and accounting.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The
Securities and Exchange Commission allows us to “incorporate by reference”
information in documents we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information we incorporate by reference is considered to be part of this
prospectus and information that we file later with the Securities and Exchange
Commission automatically will update and supersede such information. We hereby
incorporate by reference the documents listed below and any future filings we
make with the Securities and Exchange Commission under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, prior to the termination of the
offering of the securities covered by this prospectus, as amended:
|
(1)
|
Our
Annual Report on Form 10-K for the fiscal year ended December 31, 2009
filed on March 31, 2010;
|
|
(2)
|
Our
Current Report on Form 8-K filed on January 8,
2010;
|
|
(3)
|
Our
Current Report on Form 8-K filed on January 28,
2010;
|
|
(4)
|
Our
Current Report on Form 8-K filed on February 1,
2010;
|
|
(5)
|
Our
Current Report on Form 8-K filed on March 3,
2010;
|
|
(6)
|
Our
Current Report on Form 8-K filed on March 17, 2010;
and
|
|
(7)
|
The
description of our securities contained in our Registration Statement on
Form S-3 (File No. 333-152591), filed July 29, 2008, including any
amendment or report filed for the purpose of updating such
information.
|
You
may request a copy of these filings (including exhibits to such filings that we
have specifically incorporated by reference in such filings), at no cost, by
writing or telephoning our executive offices at the following
address:
NexMed,
Inc.
6330
Nancy Ridge Drive, Suite 103
San
Diego, California 92121
Attn:
Secretary
(858)
222-8041
You
should rely only on the information provided or incorporated by reference in
this prospectus or any related supplement. We have not authorized anyone else to
provide you with different information. The selling stockholders have agreed not
to make an offer of these shares in any state that prohibits such an offer. You
should not assume that the information in this prospectus or any supplement is
accurate as of any date other than the date on the cover page of such
documents.
WHERE
YOU CAN FIND MORE INFORMATION
We are
subject to the informational requirements of the 1934 Act and in accordance
therewith file reports, proxy statements and other information with the
Securities and Exchange Commission. Our filings are available to the public over
the Internet at the Securities and Exchange Commission’s website at
www.sec.gov
, as well as at
our website at
www.nexmed.com.
You may also
read and copy, at prescribed rates, any document we file with the Securities and
Exchange Commission at the Public Reference Room of the Securities and Exchange
Commission located at 100 F Street, N.E., Washington, D.C. 20549. Please
call the Securities and Exchange Commission at (800) SEC-0330 for further
information on the Securities and Exchange Commission’s Public Reference
Rooms.
* * *
Nexmed (MM) (NASDAQ:NEXM)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Nexmed (MM) (NASDAQ:NEXM)
Gráfica de Acción Histórica
De May 2023 a May 2024
