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): February 22, 2008
Manhattan
Pharmaceuticals, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-32639
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36-3898269
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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810
Seventh Avenue, 4th Floor
New
York, New York 10019
(Address
of principal executive offices) (Zip Code)
(212)
582-3950
(Registrant's
telephone number, including area code)
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:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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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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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01 Entry
into a Material Definitive Agreement.
On
February 25, 2008, Manhattan Pharmaceuticals, Inc. (the "Company") closed on
its
previously disclosed Joint Venture Agreement with Nordic Biotech Venture Fund
II
K/S ("Nordic") to develop and commercialize Hedrin™,
the
Company's novel, non-insecticide treatment for head lice for the North American
market. In connection with the closing, the Company entered into an Assignment
and Transfer Agreement, assigning its North American rights to Hedrin to the
joint venture created pursuant to the joint venture agreement, and received
from
the joint venture a $2.0M cash payment and $2.5M of the joint venture's equity.
The joint venture has been named Hedrin Pharmaceuticals K/S. On February 25,
2008, the Company received an upfront payment of $150,000 from
Nordic.
Under
the
Joint Venture Agreement, in accordance with a milestone expected to be achieved
on April 30, 2008, Nordic has the right to receive, on such date, a Warrant
to
purchase approx 7.1 million shares of the Company's common stock at $0.14 per
share.
Also,
in
connection with the closing, the Company entered into a Services Agreement
with
the joint venture, whereby the Company will manage the day-to-day operations
of
the joint venture in consideration of a payment of $527,000 per year. In
addition, the Company entered into a Registration Rights Agreement with Nordic,
whereby the Company agreed to register 125% of the shares of Company common
stock underlying the put/call features of the Joint Venture Agreement and the
Warrant which may be issued to Nordic.
Further,
the Company entered into a Shareholders' Agreement with Nordic and the joint
venture which governs the management and governance of the joint venture,
including that in many circumstances the chairman of the board, who is appointed
by Nordic, has the deciding vote in the event that the joint ventures'
four-member board (two of whom are designated by each of Nordic and the Company)
are deadlocked.
Also
in
connection with the closing, the Company and Nordic executed an Amendment to
the
Joint Venture Agreement, wherein the following modifications were made to the
Company’s call option for all or a portion of Nordic’s equity interest in the
joint venture: (i) the per share price at which the Company can begin to
exercise its call rights has been increased to $1.40 per share, from $1.05
per
share; and (ii) the amount that Nordic is required to pay to the Company in
the
event that Nordic refuses the Company’s call has been decreased to $1.5 million,
from $2 million.
Under
the
Joint Venture Agreement, the Company is required to nominate a person identified
by Nordic to the Company's Board of Directors.
On
February 27, 2008, the company issued a press release concerning the closing
of
these transactions with Nordic and the joint venture, a copy of which is
attached hereto as Exhibit 99.1.
Item
3.01 Notice
of delisting or Failure to Satisfy a Continued Listing Rule or Standard:
Transfer of Listing.
On
February 22, 2008, Manhattan Pharmaceuticals, Inc. formally notified the
American Stock Exchange (the “Exchange”) that it intends to voluntarily delist
its common stock from the Exchange. This action was approved by the Company's
Board of Directors on February 21, 2008.
On
February 22, 2008, the company issued a press release disclosing its intention
to voluntarily delist its common stock from the Exchange, a copy of which is
attached hereto as Exhibit 99.1.
Item
9.01
Financial Statements and Exhibits
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(d)
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Exhibits.
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Exhibit
No.
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Description
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99.1
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Press
Release issued February 27, 2008.
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99.1
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Press
Release issued February 22, 2008.
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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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MANHATTAN
PHARMACEUTICALS, INC.
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Date:
February 28, 2008
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By:
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/s/ Michael
G. McGuinness
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Michael
G. McGuinness
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Chief
Financial Officer
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EXHIBIT
INDEX
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Exhibit
No.
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Description
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99.1
99.2
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Press
Release issued February 27, 2008
Press
Release issued February 22, 2008
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Exhibit
99.1
Manhattan
Pharmaceuticals to Voluntarily Withdraw its
American
Stock Exchange Common Stock Listing
Company
to Move to Complete Joint Venture Agreement with Nordic Biotech
NEW
YORK, NY FEB 22, 2008
-
Manhattan Pharmaceuticals, Inc. (AMEX: MHA) today announced that it has formally
notified the American Stock Exchange (“AMEX”) that it intends to voluntarily
delist its common stock from AMEX. The company expects that the delisting will
become effective within the next 25 calendar days. The company had been notified
by AMEX on December 3, 2007, that failure to regain compliance with AMEX's
listing requirements by April 16, 2008, will likely result in AMEX's staff
initiating delisting proceedings pursuant to Section 1009 of the AMEX Company
Guide. As the company could not ensure that it would meet such listing
requirements, and in order to close on the joint venture transaction it recently
entered into with Nordic Biotech Advisors ApS (Nordic) for the development
and
commercialization of Hedrin, the company’s novel, non-insecticide treatment for
head lice, the company determined to delist its common stock from
AMEX.
Under
the
terms of the Nordic joint venture, the number of potentially issuable shares
represented by the put and call features of the joint venture agreement, and
the
warrant issuable to Nordic, would exceed 19.9% of Manhattan Pharmaceuticals’
total outstanding shares and would be issued at a price below the greater of
book or market value. As a result, under AMEX regulations, the company would
not
be able to complete the transaction without first receiving either stockholder
approval for the transaction, or a formal AMEX "financial viability" exception
from AMEX's stockholder approval requirement. The company estimates that
obtaining stockholder approval to comply with AMEX regulations would take a
minimum of 45 days to complete. The company has been discussing the financial
viability exception with AMEX since February 1, 2008, and has, as of the date
hereof, neither received the exception nor been denied the exception. If the
exception is received, AMEX regulations require that at least 10 days prior
notice be given to stockholders before the transaction may be completed. The
company has determined that its financial condition requires that it complete
the transaction immediately, and that the company's financial viability depends
on its completion of the transaction without further delay.
Accordingly,
to maintain the company's financial viability, the company has determined to
voluntarily delist its common stock from the AMEX and will neither seek
stockholder approval under AMEX regulations nor will it wait for AMEX to issue
a
final determination as to the company's request for a financial viability
exception.
“After
careful consideration, we believe that our decision to voluntarily withdraw
Manhattan Pharmaceuticals’ listing from AMEX is in the best interest of the
company and our shareholders,” stated Douglas Abel, president and chief
executive officer of Manhattan Pharmaceuticals. “The action we are taking will
allow us to dedicate our resources more fully to the most important operational
aspects of our business including the completion of this important joint venture
with Nordic and the ongoing development of our pipeline.”
Following
a required notice period, and the filing of a Form 25 with the Securities and
Exchange Commission, Manhattan Pharmaceuticals’ common stock will no longer be
listed on the AMEX. At that time, the company expects that its common stock
will
trade on the Over the Counter Bulletin Board. Manhattan Pharmaceuticals intends
to maintain corporate governance, disclosure and reporting procedures consistent
with applicable law.
As
a
result of Manhattan Pharmaceuticals’ voluntary delisting from AMEX, the company
had to request that Nordic waive certain of its closing conditions in order
to
complete the joint venture transaction. In return for Nordic’s waiver,
modifications were made to the joint venture agreement. The terms of the
company's call were modified such that the price of Manhattan Pharmaceuticals
common stock must now be at or above $1.40 for 30 consecutive trading days
as
compared to $1.05 share price before the modification. In addition, Nordic
can
now refuse Manhattan Pharmaceuticals’ call by paying the company up to $1.5
million as compared to up to $2.0 million before the modification. Also in
consideration of Nordic’s waiver, the amount of Nordic’s minimum guaranteed
return from the joint venture has been increased from 5% to 6% of Hedrin
sales.
About
Manhattan Pharmaceuticals, Inc.
Manhattan
Pharmaceuticals, Inc. is a pharmaceutical company that acquires and develops
novel, high-value drug candidates primarily for the treatment of dermatologic
and immune disorders. With a pipeline consisting of four clinical stage product
candidates, Manhattan Pharmaceuticals is developing potential therapeutics
for
large, underserved patient populations seeking superior treatments for
conditions including pedicultitis (head lice), psoriasis, atopic dermatitis
(eczema), and mastocytosis. (http://www.manhattanpharma.com)
Note
Regarding Forward-Looking Statements
This
press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements involve risks
and uncertainties that could cause Manhattan Pharmaceuticals, Inc.’s actual
results to differ materially from the anticipated results and expectations
expressed in these forward-looking statements. These statements are often,
but
not always, made through the use of words or phrases such as "anticipates,"
"expects," "plans," "believes," "intends," "will," and similar words or phrases.
These statements are based on Manhattan Pharmaceuticals, Inc.’s current
expectations, forecasts and assumptions, which are subject to risks and
uncertainties, which could cause actual outcomes and results to differ
materially from these statements. Among other things, there can be no assurances
that we will be able to complete the joint venture transaction with Nordic,
that
AMEX will not take additional action against the company for closing the
transaction without stockholder approval, that one or more market makers will
apply to have our common stock traded on the OTC Bulletin Board, that we will
be
able to register the common stock underlying the put, call and warrant in time
to avoid the liquidated damages that will accrue if we are unable to
register the shares of common stock underlying the warrants and the
put/call rights referred to in this press release in a timely manner, that
Manhattan Pharmaceuticals, Inc.'s development efforts relating to Hedrin or
any
other current or future product candidates will be successful, that any
clinical study will be completed or will return positive results, or that
we will be able to out-license its discontinued programs to other companies
on
terms acceptable to Manhattan Pharmaceuticals, Inc. or at all. Other risks
that
may affect forward-looking information contained in this press release include
the company's extremely limited capital resources,
the possibility of being unable to obtain regulatory approval of Manhattan
Pharmaceuticals, Inc.’s product candidates , or obtain the
treatment we are seeking for Hedrin , the risk that the results of
clinical trials may not support the company’s claims, the risk that the
company’s product candidates may not achieve market acceptance in North America
or elsewhere, the company’s reliance on third-party researchers to develop its
product candidates, availability of patent protection, the risk that sufficient
capital may not be available to develop and commercialize the company’s product
candidates, and the company’s lack of experience in developing and
commercializing pharmaceutical products. Additional risks are described in
the
company's filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-KSB for the year ended December 31, 2006. Manhattan
Pharmaceuticals, Inc. assumes no obligation to update these statements, whether
as a result of new information, future events, or otherwise, except as required
by law.
Contact
Information
Michael
G. McGuinness
Chief
Financial Officer
(212)
582-3950
Exhibit
99.2
Manhattan
Pharmaceuticals Announces Closing of
Joint
Venture with Nordic Biotech
Manhattan
Pharmaceuticals Receives More Than $2Million in
Payments
and Nordic Provides Initial Funding to Joint Venture
NEW
YORK, NY FEB 27, 2008
-
Manhattan Pharmaceuticals, Inc. (AMEX: MHA) today announced the closing of
its
joint venture agreement with Nordic Biotech Venture Fund II K/S (Nordic) to
develop and commercialize Hedrin™,
the
company's novel, non-insecticide treatment for head lice for the North American
market. As a result of this closing, Manhattan Pharmaceuticals received a $2.0M
cash payment plus $2.5M of equity in the newly established joint venture, which
has been named Hedrin Pharmaceuticals K/S. Manhattan
Pharmaceuticals has formally assigned and transferred its North American Hedrin
rights to Hedrin Pharmaceuticals K/S.
In
accordance with a milestone expected to be achieved on April 30, 2008, Nordic
has the right to receive, on such date, a warrant to purchase approx 7.1 million
shares of Manhattan Pharmaceuticals common stock at $0.14 per share. If fully
exercised, this warrant will yield an additional $1.0M of capital for the
Company. In addition to the investment in the joint venture noted above, Nordic
has made an upfront payment of $150,000 to the Company.
Under
the
terms of the 50/50 joint venture agreement with Nordic, and upon Hedrin
receiving medical device designation from the United States Food and Drug
Administration by September 30, 2008, Hedrin Pharmaceuticals K/S will receive
an
additional $2.5M in cash from Nordic, pay Manhattan Pharmaceuticals an
additional $1.5M in cash, and issue $2.5M in equity to both Nordic and Manhattan
Pharmaceuticals.
Hedrin
Pharmaceuticals K/S is responsible for the development and commercialization
of
Hedrin in North America and all costs associated with the project including
any
necessary U.S. clinical trials, patent costs, and future milestones owed to
the
original licensor, Thornton & Ross Limited.
About
Hedrin
To
date,
Hedrin has been clinically studied in 326 subjects and has demonstrated clinical
equivalence to widely used insecticide head lice treatments. It is currently
marketed as a device in Western Europe and as a pharmaceutical in the United
Kingdom (U.K.). In Europe, Hedrin has been launched in 21 countries and has
achieved annual sales through its licensees of approximately $45 million at
in-market public prices (which equates to a projected 21% market share), and
is
the market leader in the U.K. with $11 million in sales (23% market share)
and
France with a 21% market share.
Hedrin
is
a unique, proprietary combination of silicones (dimethicone and cyclomethicone)
that acts as a pediculicidal (lice killing) agent by disrupting the insect's
mechanism for managing fluid and breathing. Hedrin contains no traditional
chemical insecticides in contrast with most currently available lice treatments.
Recent studies have indicated that resistance to traditional chemical
insecticides may be increasing and therefore contributing to insecticide
treatment failure. Because Hedrin kills lice by preventing the louse from
excreting waste fluid and by asphyxiation (smothering), rather than by acting
on
the central nervous system, the insects cannot build up resistance to the
treatment.
About
Pediculitis
According
to the American Academy of Pediatrics, an estimated 6 12 million Americans
have
Pediculitis each year, with pre-school and elementary age children and their
families affected most often.
About
Manhattan Pharmaceuticals, Inc.
Manhattan
Pharmaceuticals, Inc. is a pharmaceutical company that acquires and develops
novel, high-value drug candidates primarily for the treatment of dermatologic
and immune disorders. With a pipeline consisting of four clinical stage product
candidates, Manhattan Pharmaceuticals is developing potential therapeutics
for
large, underserved patient populations seeking superior treatments for
conditions including pedicultitis (head lice), psoriasis, pruritus associated
with atopic dermatitis (eczema), and mastocytosis. (http://www.manhattanpharma.com)
Manhattan Pharmaceuticals announced on February 25, 2008, that it is voluntarily
delisting its common stock from the American Stock Exchange.
About
Nordic Biotech
Nordic
Biotech Advisors ApS is the investment advisor to Nordic Biotech K/S and Nordic
Biotech Venture Fund II K/S, and was founded in 2001 by Christian Hansen and
Florian Schonharting. Key investors in the Nordic Biotech fund family are major
institutions and family foundations. Nordic Biotech focuses on global special
situations opportunities and currently has a portfolio in excess of 10
companies. (http://www.nordicbiotech.com/)
Note
Regarding Forward-Looking Statements
This
press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements involve risks
and uncertainties that could cause Manhattan Pharmaceuticals, Inc.'s actual
results to differ materially from the anticipated results and expectations
expressed in these forward-looking statements. These statements are often,
but
not always, made through the use of words or phrases such as "anticipates,"
"expects," "plans," "believes," "intends," "will," and similar words or phrases.
These statements are based on Manhattan Pharmaceuticals, Inc.'s current
expectations, forecasts and assumptions, which are subject to risks and
uncertainties, which could cause actual outcomes and results to differ
materially from these statements. Among other things, there can be no assurances
that our joint venture with Nordic will be able to meet the milestone which
will
obligate Nordic to make the next payment referred to in this press release
(the
failure to meet that milestone will give Nordic enhanced control over the joint
venture's operations and other important decision-making), that liquidated
damages will accrue if we are unable to register the shares of common stock
underlying the warrants and the put/call rights referred to in this press
release in a timely manner, that Manhattan Pharmaceuticals, Inc.'s development
efforts relating to Hedrin or any other current or future product candidates
will be successful, that any clinical study will be completed or will return
positive results, or that we will be able to out-license its discontinued
programs to other companies on terms acceptable to Manhattan Pharmaceuticals,
Inc. or at all. Other risks that may affect forward-looking information
contained in this press release include the company's extremely limited capital
resources, the possibility of being unable to obtain regulatory approval of
Manhattan Pharmaceuticals, Inc.'s product candidates, or obtain the treatment
we
are seeking for Hedrin, the risk that the results of clinical trials may not
support the company's claims, the risk that the company's product candidates
may
not achieve market acceptance in North America or elsewhere, the company's
reliance on third-party researchers to develop its product candidates,
availability of patent protection, the risk that sufficient capital may not
be
available to develop and commercialize the company's product candidates, the
company's lack of experience in developing and commercializing pharmaceutical
products, and that trading in the company's stock may be adversely impacted
by
the company's voluntary delisting of its common stock from the American Stock
Exchange. Additional risks are described in the company's filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-KSB
for the year ended December 31, 2006. Manhattan Pharmaceuticals, Inc. assumes
no
obligation to update these statements, whether as a result of new information,
future events, or otherwise, except as required by law.
Contact
Manhattan
Pharmaceuticals, Inc.
Michael
G. McGuinness, Chief Financial Officer
(212)
582-3950