Item 1.01. Entry into a Material Definitive Agreement.
On January 25, 2021, Acer Therapeutics Inc. (the "Company") entered into an
Option Agreement (the "Option Agreement") with Relief Therapeutics Holding AG
("Relief") pursuant to which the Company granted Relief an exclusive option (the
"Exclusivity Option") to pursue a potential collaboration and license
arrangement with the Company for the development, regulatory approval and
commercialization of ACER-001 (sodium phenylbutyrate) for the treatment of
various inborn errors of metabolism, including urea cycle disorders (UCDs) and
Maple Syrup Urine Disease (MSUD). The Option Agreement provides a period of time
up to June 30, 2021 for the parties to perform additional due diligence and to
work toward negotiation and execution of a definitive agreement with respect to
the potential collaboration for ACER001. In consideration for the grant of the
Exclusivity Option, (i) the Company will receive from Relief an upfront
nonrefundable payment of $1.0 million, (ii) Relief provided to the Company a
12-month secured loan in the principal amount of $4.0 million, as evidenced by a
Promissory Note (the "Note") issued by the Company to Relief and (iii) the
Company granted to Relief a security interest in all of its assets to secure
performance of the Note, as evidenced by a Security Agreement (the "Security
Agreement"). The Note is repayable in one lump sum within 12 months from
issuance and bears interest at a rate equal to 6.0% per annum. If a definitive
agreement with respect to the potential collaboration is not executed by the
parties on or before June 30, 2021, the Exclusivity Option will terminate and
the Note is repayable by the Company upon maturity. The Note contains certain
customary events of default (including, but not limited to, default in payment
of principal or interest thereunder or a material breach of the Security
Agreement).
The foregoing description of the transactions contemplated by the Option
Agreement, Note and Security Agreement as well as the documents themselves do
not purport to be complete and are qualified in their entirety by reference to
Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3 to this Current Report on Form 8-K
which are incorporated herein by reference.
No Assurances
There can be no assurance that a definitive agreement will be successfully
negotiated and executed between the parties on the terms contemplated by the
Option Agreement, on other mutually acceptable terms, prior to June 30, 2021 or
at all. Except for the $1.0 million upfront payment to Acer and the $4.0 million
loan to Acer, the remaining proposed terms of the potential collaboration
between the parties are not binding and are subject to change as a result of
additional diligence by the parties. See Cautionary Statement Regarding
Forward-Looking Information.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information included under Item 1.01 of this Current Report on Form 8-K is
incorporated by reference herein.
Item 8.01.Other Events.
ACER-001 Exclusivity Option
On January 25, 2021, the Company and Relief issued a joint press release
entitled "Relief Therapeutics and Acer Therapeutics Sign Option Agreement for
Exclusivity to Negotiate a Collaboration and License Agreement for the Worldwide
Development and Commercialization of ACER-001 for the Treatment of Urea Cycle
Disorders and Maple Syrup Urine Disease," a copy of which is attached as
Exhibit 99.1 hereto and is incorporated herein by reference.
Sales Pursuant to At-the-Market Offering Program
During the period of January 16, 2021 through January 22, 2021, the Company
raised aggregate gross proceeds, before deducting fees and offering costs, of
approximately $1.4 million under its existing "at-the-market" offering program.
The Company issued an aggregate of 392,004 shares at an average gross sale price
of $3.47 per share. Aggregate net proceeds were approximately $1.3 million after
fees and offering costs of $0.1 million. The sales were completed by
JonesTrading Institutional Services LLC pursuant to the Amended and Restated
Sales Agreement (the "Sales Agreement") dated March 18, 2020 between the
Company, on the one hand, and JonesTrading Institutional Services LLC and Roth
Capital Partners, LLC as sales agents, on the other hand.
The shares sold under the Sales Agreement were issued and sold pursuant to a
shelf registration statement on Form S-3 (File No. 333-228319) previously filed
by the Company and declared effective by the Securities and Exchange Commission
("SEC") on November 21, 2018. A prospectus supplement related to the Company's
at-the-market offering program was also filed with the SEC on March 18, 2020.
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As of January 22, 2021 and after the transactions described above in Item 8.01,
there were 14,310,244 shares of the Company's common stock outstanding.
Projected Cash Runway
After receipt of the $1.0 million upfront payment and $4.0 million loan from
Relief and the recent sales under the Company's at-the-market offering program,
combined with its existing resources, the Company believes that it has
sufficient cash and cash equivalents on hand to fund its currently anticipated
operating and capital requirements for its development programs into mid2021.
This statement is based on management's current expectations and involves risks
and uncertainties. Actual results and performance could differ materially from
that estimate. Disclosure regarding those risks and uncertainties is included in
the Company's SEC filings, including its Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 2020.
This Current Report on Form 8-K does not constitute an offer to sell nor the
solicitation of an offer to buy shares of the Company's common stock, nor shall
there be any sale of shares of the Company's common stock in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state or
other jurisdiction.
Cautionary Statement Regarding Forward-Looking Information
Certain statements either contained in or incorporated by reference into this
document, other than purely historical information, including estimates,
projections and statements relating to Acer's business plans, objectives and
expected operating results, and the assumptions upon which those statements are
based, are "forward-looking statements." All statements, other than statements
of historical facts, included in or incorporated by reference into this document
regarding strategy, future operations, future financial position, future
revenue, projected expenses, prospects, plans and objectives of management are
forward-looking statements. Examples of such statements include, but are not
limited to, statements relating to the structure, terms, timing and entry into a
definitive agreement for the proposed collaboration between Acer and Relief with
respect to ACER-001; the shared values, vision and results of the potential
collaboration of Acer and Relief; the potential for ACER-001 to target diseases;
the adequacy of Acer's capital to support its future operations and its ability
to successfully continue its development programs; Acer's ability to secure the
additional capital necessary to fund its various product candidate development
programs; and the development and commercial potential of any of Acer's product
candidates including ACER001. Acer may not actually achieve the plans, carry
out the intentions or meet the expectations or projections disclosed in the
forward-looking statements and you should not place undue reliance on these
forward-looking statements. Such statements are based on management's current
expectations and involve risks and uncertainties. Actual results and performance
could differ materially from those projected in the forward-looking statements
as a result of many factors, including, without limitation, risks and
uncertainties associated with Acer's ability to successfully negotiate and
execute a definitive collaboration agreement with Relief on the proposed terms,
on other mutually acceptable terms, or at all, Acer's ability to repay the $4
million secured loan from Relief, the ability to project future cash utilization
and reserves needed for contingent future liabilities and business operations,
the availability of sufficient resources to fund Acer's various product
candidate development programs and to meet its business objectives and
operational requirements, the fact that the results of earlier studies and
trials may not be predictive of future clinical trial results, the protection
and market exclusivity provided by Acer's intellectual property, risks related
to the drug discovery and the regulatory approval process and the impact of
competitive products and technological changes. Acer disclaims any intent or
obligation to update these forward-looking statements to reflect events or
circumstances that exist after the date on which they were made. You should
review additional disclosures Acer makes in its filings with the Securities and
Exchange Commission, including its Quarterly Reports on Form 10Q and its Annual
Report on Form 10-K. You may access these documents for no charge at
http://www.sec.gov.
Item 9.01.Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 Option Agreement, dated January 25, 2021, by and between Acer
Therapeutics Inc. and Relief Therapeutics Holding AG.
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10.2 Promissory Note, dated January 25, 2021, issued by Acer
Therapeutics Inc. in favor of Relief Therapeutics Holding AG.
10.3 Security Agreement, dated January 25, 2021, by and between Acer
Therapeutics Inc. and Relief Therapeutics Holding AG.
99.1 Press release issued by Acer Therapeutics Inc. dated January 25,
2021 titled "Relief Therapeutics and Acer Therapeutics Sign Option
Agreement for Exclusivity to Negotiate a Collaboration and License
Agreement for the Worldwide Development and Commercialization of
ACER-001 for the Treatment of Urea Cycle Disorders and Maple Syrup
Urine Disease."
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