| Flemington Pharmaceutical Corporation | |||
| Ticker: | FLEM | 43 Emery Avenue | |
| Exchange: | NASDAQ-Small Cap Market | Flemington, NJ 08822 | |
| Industry: | Manufacturing (SIC Code 2834) | (908) 782-3431 | |
| # of Employees: | 4 | ||
| Type of Shares: | Common Shares | Filing Date: | 8/8/97 | |
| U.S. Shares: | 1,400,000 | Offer Date: | 11/21/97 | |
| Non-U.S. Shares: | 0 | Filing Price: | $3.50 | |
| Primary Shares: | 1,400,000 | Offer Price: | $5.90 | |
| Secondary Shares: | 0 | Gross Spread: | ||
| Offering Amount: | $4,900,000 | Selling: | ||
| Expenses: | $397,000 | Reallowance: | ||
| Shares Out After: | 3,997,390 |
| Manager | Tier | Phone |
| Monroe Parker & Company | Lead Manager | (914) 696-4200 |
| Issuer's Law Firm: | Reed Smith Shaw & McClay |
| Bank's Law Firm: | Bernstein & Wasserman |
| Auditor: | Wiss & Company |
Dollar amounts in U.S. millions except for per share data | |||||
| 9 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 7/31/96 | 4/30/97 | 4/30/96 | 4/30/97 | ||
| Revenue: | $3.50 | $0.61 | $1.22 | Assets: | $0.32 |
| Net Income: | $0.49 | -$0.20 | $0.09 | Curr Assets: | $0.24 |
| EPS: | $0.12 | -$0.05 | $0.02 | Liabilities: | $0.39 |
| Prior EPS: | -$0.01 | -$0.01 | -$0.04 | Curr Liabilities: | $0.39 |
| Cash Flow/Oper: | $0.08 | -$0.04 | $0.03 | Equity: | -$0.07 |
| Cash Flow/Fin: | $0.01 | -$0.01 | $0.00 | Cash: | $0.05 |
| Cash Flow/Inv: | $0.00 | -$0.01 | Working Cap: | -$0.15 | |
| Business Description |
| The company is engaged in the development of novel application drug delivery systems for presently marketed prescription and over-the-counter drugs. The Company's patent-pending delivery systems are lingual sprays and soft gelatin bite capsules, enabling drug absorption through the oral mucosa, and more rapid absorption into the bloodstream than presently available oral delivery systems. The Company's proprietary oral dosage delivery systems enhance and greatly accelerate the onset of the therapeutic benefits which the drugs are intended to produce. The Company refers to its delivery systems as Immediate-Immediate Release (I(2)R(TM)) because its delivery systems are designed to provide therapeutic benefits within minutes of administration. The Company's development efforts for its novel drug delivery systems are concentrated on drugs which are already available and proven in the marketplace. In addition to increased bioavailability by avoiding metabolism by the liver before entry into the bloodstream, the Company believes that its proprietary delivery systems offer the following significant advantages: (i) improved drug safety profile by reducing the required dosage, including possible reduction of side-effects; (ii) improved dosage reliability; (iii) allowing medication to be taken without water; and (iv) improved patient convenience and compliance. |
| Competition |
| The markets which the Company intends to enter are characterized by intense competition. The Company will be competing against established pharmaceutical companies which currently market products which are equivalent or functionally similar to those the Company intends to market. Prices of drug products are significantly affected by competitive factors and tend to decline as competition increases. In addition, numerous companies are developing or may, in the future, engage in the development of products competitive with the Company's proposed products. The Company expects that technological developments will occur at a rapid rate and that competition is likely to intensify as enhanced delivery system technologies gain greater acceptance. Additionally, the markets for formulated products which the Company has targeted for development are intensely competitive, involving numerous competitors and products. The Company will seek to enhance its competitive position by focusing its efforts on its novel dosage forms. |
| Business Plan |
| The Company's strategy is to concentrate its product development activities primarily on those pharmaceuticals for which there already are significant prescription and OTC sales, where the use of the Company's innovative delivery systems will greatly enhance speed of onset of therapeutic effect, reduce side effects through a reduction of the amount of active drug substance required to produce a given therapeutic effect, and improve patient convenience or compliance. The Company has initially identified approximately 50 presently marketed drugs that meet the Company's criteria for its drug delivery systems. The Company will concentrate its product development activities on those pharmaceuticals with significant prescription or OTC sales. The Company believes that applying a novel application delivery system to existing drugsinvolves less cost, time and risk than developing and commercializing a new chemical entity. The Company believes that there is significant opportunity to combine its delivery systems with existing pharmaceuticals to expand the market for an existing drug, differentiate a product from a generic or brand name competition, and possibly create new markets. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for research, clinical studies and stability testing, product development, marketing and sales expenses and general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| Harry A. Dugger, III, Ph.D. | 47.30% | 33.90% |
| John J. Moroney | 29.60% | 20.10% |
| Watson Pharmaceutical Corporation | 15.00% | 9.70% |
| Estate of William D. Swift, Jr., Columbus, Georgia | 7.40% | 4.80% |
| Officer Name | Title | Age |
| John J. Moroney | Chairman of the Board | 43 |
| Jean-Marc Maurette, Pharm. D. | Director and European Underwriter | 52 |
| Harry A. Dugger, III, Ph.D. | President and Director | 61 |
| Robert F. Schaul | Secretary and Director | 57 |
| Additional Underwriter Compensation |
| Additional compensation of $147,000. |
| Warrant to purchase 70,000 shares/units at a nominal price. |
| Exercise price of $8.40 for 4 year(s), 1 year(s) from 11/21/97. |
| $98,000.00 consulting agreement for 2 year(s). |
| # of Units: | 700,000 | |||
| Unit Ticker: | FLEMU | Unit Price: | $5.90 | |
| Warrant Ticker: | FLEMW | Warrant Price: | ||
| Warrant Exercise Date: | Warrant Exercise Price: | $4.25 | ||
| Warrant Expiration Date: | ||||
| Warrant Detachable: | Yes | Warrant Detach Date: | ||
| Warrant Callable: | Yes | Warrant Call Date: |
| Unit Composition: 2 Common Shares + 2 Class A Warrants |
| Warrant Entitlement: 1 Common Share |
| Warrants are callable at $0.10 if the common stock trades at $8.50 for 20 of 20 consecutive trading days. |
| 5.00% of the proceeds from the exercise of warrants goes to the underwriter. |