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): April 3, 2007
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:
| o |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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| o |
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.
| (a) |
“Altoderm”
License Agreement
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On
April
3, 2007, Manhattan Pharmaceuticals, Inc. (the “Company”) entered into an
exclusive license agreement for “Altoderm” (the “Altoderm Agreement”) with
Thornton & Ross LTD (“T&R”). Pursuant to the Altoderm Agreement, the
Company acquired an exclusive North American license to certain patent rights
and other intellectual property relating to Altoderm, a topical skin lotion
product using sodium cromoglicate for the treatment of atopic dermatitis. In
consideration for the license, the Company agreed to issue to T&R 125,000
shares of its common stock upon the execution of the Altoderm Agreement. In
addition, the Company also agreed to make a cash payment of $475,000 to T&R
no later than April 10, 2007. Further, the Company agreed to make future
milestone payments to T&R comprised of various combinations of cash and
common stock in respective aggregate amounts of $5,675,000 and 875,000 shares
of
common stock upon the achievement of various clinical and regulatory milestones.
The Company also agreed to pay royalties on net sales of products using the
licensed patent rights at rates ranging from 10% to 20%, depending on the level
of annual net sales, and subject to an annual minimum royalty payment of $1
million in each year following the first commercial sale of Altoderm. The
Company may sublicense the patent rights and the proceeds resulting from such
sublicenses will be shared with T&R.
Under
the
terms of the Altoderm Agreement, the Company is responsible for maintaining
the
licensed patent rights at its own expense and using counsel of the Company’s own
choosing. The Altoderm Agreement also provides that T&R shall notify the
Company of any improvements to a licensed product, and assist the Company in
filing and maintaining such improvements with the applicable governmental
bodies. The Company has the first right under the Altoderm Agreement to
initiate, at its sole expense, legal proceedings against any infringers or
potential infringers of the licensed patent rights. Under certain circumstances
and at its sole expense, T&R may initiate legal proceedings against any
infringers or potential infringers of the licensed patent rights. Each party
may
elect to share equally in the expenses incurred during and proceeds received
from enforcement actions brought by the other party.
The
Altoderm Agreement expires upon the expiration of the last to expire patent
right covering a licensed product in North America, which is currently May
2019.
Subject to certain conditions, the Company may terminate the Altoderm Agreement
at any time by giving 30 days written notice to T&R. T&R may terminate
the Altoderm Agreement in the event the Company defaults or breaches any
condition of the Altoderm Agreement, which default or breach is not remedied
within 90 days of the date T&R provides written notice to the Company of
such default or breach. The Altoderm Agreement may also be terminated by T&R
(i) in the event the Company initiates a voluntary bankruptcy proceeding or
is
declared bankrupt, (ii) if the business of the Company is placed in the hands
of
a receiver or trustee for the benefit of creditors, or (iv) if the Company
or a
sublicensee fails to take certain affirmative actions towards the development
of
the licensed product within specified time parameters. In the event of a
termination, all of the Company’s rights to the licensed intellectual property
will terminate, except that if T&R terminates the agreement, the Company may
continue to sell all completed licensed product in inventory and will be allowed
to complete the manufacture of all such products in process at the time of
termination.
The
Company’s press release dated April 4, 2007, which announced the entry into the
Altoderm Agreement, is attached hereto as Exhibit 99.1 and incorporated by
reference herein.
| (b) |
“Altolyn”
License Agreement
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On
April
3, 2007, the Company and T&R also entered into an exclusive license
agreement for “Altolyn” (the “Altolyn Agreement”). Pursuant to the Altolyn
Agreement, the Company acquired an exclusive North American license to certain
patent rights and other intellectual property relating to Altolyn, an oral
formulation product using sodium cromoglicate for the treatment of mastocytosis,
food allergies, and inflammatory bowel disorder. In consideration for the
license, the Company agreed to make a cash payment of $475,000 to T&R no
later than April 10, 2007. Further, the Company agreed to make future cash
milestone payments to T&R in an aggregate amount of $5,675,000 upon the
achievement of various clinical and regulatory milestones. The Company also
agreed to pay royalties on net sales of products using the licensed patent
rights at rates ranging from 10% to 20%, depending on the level of annual net
sales, and subject to an annual minimum royalty payment of $1 million in each
year following the first commercial sale of Altolyn. The Company may sublicense
the patent rights and the proceeds resulting from such sublicenses will be
shared with T&R.
Under
the
terms of the Altolyn Agreement, the Company is responsible for maintaining
the
licensed patent rights at its own expense and using counsel of the Company’s own
choosing. The Altolyn Agreement also provides that T&R shall notify the
Company of any improvements to a licensed product, and assist the Company in
filing and maintaining such improvements with the applicable governmental
bodies. The Company has the first right under the Altolyn Agreement to initiate,
at its sole expense, legal proceedings against any infringers or potential
infringers of the licensed patent rights. Under certain circumstances and at
its
sole expense, T&R may initiate legal proceedings against any infringers or
potential infringers of the licensed patent rights. Each party may elect to
share equally in the expenses incurred during and proceeds received from
enforcement actions brought by the other party.
The
Altolyn Agreement expires upon the expiration of the last to expire patent
right
covering a licensed product in North America, which is currently believed to
be
November 2019. Subject to certain conditions, the Company may terminate the
Altolyn Agreement at any time by giving 30 days notice to T&R. T&R may
terminate the Altolyn Agreement in the event the Company defaults or breaches
any condition of the Altolyn Agreement, which default or breach is not remedied
within 90 days of the date T&R provides written notice to the Company of
such default or breach. The Altolyn Agreement may also be terminated by T&R
(i) in the event the Company initiates a voluntary bankruptcy proceeding or
is
declared bankrupt, (ii) if the business of the Company is placed in the hands
of
a receiver or trustee for the benefit of creditors, or (iv) if the Company
or a
sublicensee fails to take certain affirmative actions towards the development
of
the licensed product within specified time parameters. In the event of a
termination, all of the Company’s rights to the licensed intellectual property
will terminate, except that if T&R terminates the agreement, the Company may
continue to sell all completed licensed product in inventory and will be allowed
to complete the manufacture of all such products in process at the time of
termination.
The
Company’s press release dated April 4, 2007, which announced the entry into the
Altolyn Agreement, is attached hereto as Exhibit 99.1 and incorporated by
reference herein.
Item
9.01. Financial Statements and Exhibits
| (d) |
Exhibits.
The following exhibit is furnished
herewith.
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Exhibit
No.
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Description
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99.1
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Manhattan
Pharmaceuticals, Inc. press release dated April 4,
2007.
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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:
April 9, 2007 |
By: |
/s/ Michael
G. McGuinness |
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Michael
G. McGuinness |
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Chief
Financial Officer |
EXHIBIT
INDEX
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Exhibit
No.
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Description
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99.1
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Press
Release issued April 4, 2007.
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