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): December
7, 2007
___________________________________________________________
ACURA
PHARMACEUTICALS, INC.
(Exact
Name of Registrant as Specified in Charter)
___________________________________________________________
|
State
of New York
|
1-10113
|
11-0853640
|
|
(State
of Other Jurisdiction
|
(CommissionFile
Number)
|
(I.R.S.
Employer
|
|
of
Incorporation)
|
Identification
Number)
|
616
N. North Court, Suite 120
Palatine,
Illinois 60067
(Address
of principal executive offices) (Zip Code)
(847)
705-7709
(Registrant’s
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o
Written
communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting
material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b))
o
Pre-commencement
communications pursuant
to Rule 13e-4(c) under the Exchange Act (17CFR 240.13e- 4(c))
Item
1.01 Entry
into a Material Definitive Agreement.
As
previously reported, on October 30, 2007, Acura Pharmaceuticals, Inc. (the
“Company”) and King Pharmaceuticals Research and Development, Inc. (“King”), a
wholly-owned subsidiary of King Pharmaceuticals, Inc., entered into a License,
Development and Commercialization Agreement (the “Agreement”) to develop and
commercialize certain opioid analgesic products utilizing the Company's
proprietary Aversion® (abuse deterrent) Technology in the United States, Canada,
and Mexico (the “Territory”). On December 7, 2007, the Agreement closed and
became effective as a result of the termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. On the same
date
the Company received from King a non-refundable cash payment of $30 million.
The
Company may receive additional non-refundable cash milestone payments from
King
based on the successful achievement of certain clinical and regulatory
milestones for Acurox™ Tablets and for each other product developed under the
Agreement. The Company may also receive an additional $50 million non-refundable
cash milestone payment when the aggregate net sales of all products developed
under the Agreement reach $750 million. In addition, the Company will receive
from King royalty payments ranging from 5% to 25% based
on
the combined annual net sales of all products developed under the Agreement.
King’s royalty payment obligations commence on the first anniversary of the
first commercial sale of a product and expire on the later of the expiration
of
the last to expire valid patent claim covering such product or 15 years from
the
first commercial sale of such product in such country.
On
a
quarterly basis during the term of the Agreement, King will reimburse Acura
for
its expenses incurred to develop the licensed products, consisting of all of
the
Company’s out-of-pocket expenses and internal research and development staff
costs allocated to the development of such products. The Company’s development
expenses to be funded by King include those relating to (i) Acurox™ Tablets
commencing September 19, 2007, (ii) qualifying a third-party supplier of the
products, (iii) successfully achieving Proof of Concept for any future product
for which King does not exercise its option to license such future product
in
the Territory, and (iv) product line extensions (as defined) for a product
as
agreed to by the parties.
The
foregoing provides only a brief summary of selected provisions of the Agreement
and is qualified in its entirety by reference to the text of the Agreement
attached to the Form 8-K filed by the Company on November 2, 2007 as
Exhibit
10.1
and is
incorporated herein by reference. A copy of the press release issued in
connection with [Acura’s][the
parties’]
announcement of the closing of the Agreement is attached hereto as Exhibit
99.1
and
incorporated by reference herein.
This
Report contains forward-looking statements about the Agreement between the
Company and King. As with any pharmaceutical product under development or
proposed to be developed, substantial risks and uncertainties exist in the
process of development, regulatory review and commercialization. There can
be no
assurance that any product developed utilizing Aversion® Technology will receive
regulatory approval or prove to be commercially successful. Accordingly,
investors in the Company should recognize that there is no assurance that the
Company will receive any additional milestone payment amounts described above
for Acurox™ Tablets (formerly OxyADF) or any other product candidate utilizing
Aversion® Technology, or even if such milestones are achieved, that the related
products will be successfully commercialized. For further discussion of these
and other risks and uncertainties, see the Company’s Annual Report on Form 10-K
for the year ended December 31, 2006, under the heading “Risks Factors”, its
most recent quarterly report on Form 10-Q and its other public disclosures
filed
with the U.S. Securities and Exchange Commission.
Item
2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation
or an Obligation under an Off-Balance Sheet Arrangement.
On
December 7, 2007, pursuant to the terms of the Agreement with King, the Company
received from King an upfront non-refundable cash payment of $30 million upon
the satisfaction of the closing conditions and the effectiveness of the
Agreement. In accordance with the terms of the Agreement and the Company’s Loan
Agreement dated March 29, 2000, as amended, between the Company and its lenders
(the “Loan Agreement”), simultaneous with the Company’s receipt from King of the
$30 million upfront cash payment, the Company prepaid in full the $4.992 million
principal balance plus unpaid interest under the Loan Agreement.
Item
9.01 Financial
Statements and Exhibits
|
Exhibit
Number
|
Description
|
|
99.1
|
Press
Release of the Registrant dated December 10,
2007.
|
SIGNATURES
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 thereunto
duly authorized.
| ACURA PHARMACEUTICALS, INC. | ||
| |
|
|
| Date: December 10, 2007 | By: | /s/ Peter Clemens |
|
Peter A. Clemens |
||
| Senior Vice President & Chief Financial Officer | ||
EXHIBIT
INDEX
|
Exhibit
Number
|
Description
|
|
99.1
|
Press
Release of the Registrant dated December 10,
2007.
|
CONTACT:
Acura
Pharmaceuticals, Inc.
Peter
A.
Clemens, SVP Investor Relations & CFO 847-705-7709
FOR
IMMEDIATE RELEASE
ACURA
PHARMACEUTICALS, INC. ANNOUNCES RECEIPT OF $30 MILLION CASH PAYMENT AND CLOSING
OF AGREEMENT WITH KING PHARMACEUTICALS
Palatine,
IL, December 10, 2007:
Acura
Pharmaceuticals, Inc. (OTC.BB-ACPH.OB) today announced the closing of the
License, Development and Commercialization Agreement (the “Agreement”) with King
Pharmaceuticals Research and Development, Inc., a subsidiary of King
Pharmaceuticals, Inc. (“King”) and receipt of the initial $30 million
non-refundable cash payment from King under the Agreement. The Agreement closing
was subject to clearance under the Hart-Scott-Rodino Antitrust Improvements
Act
which was received December 6, 2007. Upon the closing of the Agreement, the
Company paid off its $5 million secured term note in accordance with the
Agreement and the prepayment provisions of the secured term note. The Company
now has no term debt on its balance sheet.
The
Agreement provides King with an exclusive license in the United States, Canada,
and Mexico (the "Territory") for ACUROX™ Tablets plus another undisclosed opioid
product candidate utilizing Acura's Aversion® Technology. In addition, the
Agreement provides King with an option to license in the Territory all future
opioid analgesic products developed utilizing Acura's Aversion® Technology. In
addition to the $30 million initial payment announced today, Acura could also
receive additional cash payments from King of up to $28 million for ACUROX™
Tablets and similar amounts with respect to each future product licensed based
on successful achievement of certain development and regulatory milestones
specified in the Agreement. King will reimburse Acura for all ACUROX™ Tablet
research and development expenses incurred beginning from September 19, 2007
and
all research and development expenses related to future products after King's
exercise of its option to an exclusive license for each future product. King
will record net sales of all products and pay Acura a royalty ranging from
5% to
25% based on the level of combined annual net sales for all products subject
to
the Agreement. King will also make a one-time cash payment to Acura of $50
million in the first year in which the combined annual net sales of all licensed
products exceed $750 million.
About
Acura Pharmaceuticals, Inc.
Acura
Pharmaceuticals, Inc. is a specialty pharmaceutical company engaged in research,
development and manufacture of innovative Aversion® (abuse deterrent) Technology
and related product candidates.
Forward
Looking Statements
This
press release contains "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. These statements are based on current
expectations of future events. If underlying assumptions prove inaccurate or
unknown risks or uncertainties materialize, actual results could vary materially
from the Company’s expectations and projections. The most significant of such
risks and uncertainties include, but are not limited to, the ability of the
Company, King Pharmaceuticals Research and Development, Inc. and other
pharmaceutical companies, if any, with whom the Company may license its
Aversion® Technology, to obtain necessary regulatory approvals and commercialize
products utilizing the Aversion® Technology, the ability to avoid infringement
of patents, trademarks and other proprietary rights or trade secrets of third
parties, the ability to manufacture products utilizing the Aversion® Technology,
and the ability to fulfill the FDA’s requirements for approving the Company’s
product candidates for commercial distribution in the United States, including,
without limitation, the adequacy of the
results
of the clinical studies completed to date and the results of other clinical
studies, to support FDA approval of the Company’s product candidates, the
adequacy of the development program for the Company’s product candidates,
changes in regulatory requirements, adverse safety findings relating to the
Company’s product candidates, the risk that the FDA may not agree with the
Company’s analysis of its clinical studies and may evaluate the results of these
studies by different methods or conclude that the results of the studies are
not
statistically significant, clinically meaningful or that there were human errors
in the conduct of the studies or otherwise, the risk that further studies of
the
Company’s product candidates are not positive, and the uncertainties inherent in
scientific research, drug development, clinical trials and the regulatory
approval process. You are encouraged to review other important risk factors
relating to the Company on our web site at www.acurapharm.com
under
the link, “Company Risk Factors” and detailed in Company filings with the
Securities and Exchange Commission. Acura Pharmaceuticals, Inc. assumes no
obligation to update any forward-looking statements as a result of new
information or future events or developments. Acura Pharmaceuticals, Inc. press
releases may be reviewed at www.acurapharm.com.