S-1 1 fs10214_dandritbriotech.htm REGISTRATION STATEMENT fs10214_dandritbriotech.htm
As filed with the Securities and Exchange Commission on February 14, 2014
 
Registration No. 333 - _______ 


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

DanDrit Biotech USA, Inc.
 (Exact name of registrant as specified in its charter)
 
 
 
Delaware
2834
45-2559340
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)

 
DanDrit Biotech A/S
Fruebjergvej 3 Box 62
2100 Copenhagen, Denmark
+45 39179840 (Telephone Number)
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 
Dr. Eric Leire
Chief Executive Officer
c/o DanDrit Biotech USA, Inc.
P.O. Box 189
Randolph, VT 05060
212-727-7085
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:
Henry I. Rothman, Esq.
Joseph Walsh, Esq.
Troutman Sanders LLP
The Chrysler Building
405 Lexington Avenue
New York, NY 10174
(212) 704-6000 (Telephone Number)
(917) 704-6288 (Facsimile Number)
 
David N. Feldman, Esq.
Richardson & Patel, LLP
The Chrysler Building
405 Lexington Avenue, 49th Floor
New York, NY 10174
(212) 869-7000 (Telephone Number)
(917) 677-8165 (Facsimile Number)
 
Approximate date of commencement of proposed sale to the public: Promptly after the effective date of this registration statement.
 
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: þ
 
 
 

 
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o
 
Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)
 
Smaller reporting company þ
 

CALCULATION OF REGISTRATION FEE

 
Title of each class of securities to be registered
 
Proposed Maximum
Aggregate Offering
Price(1)
 
Amount of
Registration Fee
 
Common stock, par value $0.0001 per share (2)
  $ 13,800,000   $ 1,777.44  
Common Stock par value $0.0001 per share (3)
  $ 6,867,285   $ 884.51  
TOTAL
  $ 20,667,285   $ 2,661.95  
 
(1)
 
Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933, as amended (the “Securities Act”), for the public offering and Rule 457(a) of the offering by the security holder.
 
(2)
This registration statement covers under one prospectus, the registrant’s initial public offering of up to 2,400,000 shares of the registrant’s common stock, par value $0.0001 per share (the “Common Stock”), including up to an additional 360,000 shares of our Common Stock representing 15% of the shares offered to the public that the placement agent has the option to purchase to cover over-allotments, if any.
 
(3)
This registration statement also covers, under a separate prospectus, the resale (the “Resale”) of an aggregate of 1,373,457 shares of Common Stock owned by three (3) selling shareholders (the “Security Holders”) identified in the Resale Prospectus defined below. The Company will not receive any proceeds from the Resale.
 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 
 
ii

 
 
EXPLANATORY NOTE
 
This registration statement contains two forms of prospectus, as set forth below.
 
 
Public Offering Prospectus. A prospectus to be used for the initial public offering by the registrant of 2,400,000 shares of Common Stock, not including the over-allotment option (the “Public Offering Prospectus”), through the placement agent named on the cover page of the Public Offering Prospectus.
 
 
 
Resale Prospectus. A prospectus to be used in connection with the potential distribution by the Security Holders of up to an aggregate of 1,373,457 shares of the registrant’s Common Stock (the “Resale Prospectus”).
 
The Public Offering Prospectus and the Resale Prospectus will be identical in all respects except for the following:
 
 
they contain different front covers;
 
 
 
they contain different tables of contents;
 
 
 
the summary of The Offering is deleted from the Resale Prospectus;
 
 
 
they contain different Use of Proceeds sections;
 
 
 
a Shares Registered for Distribution section is included in the Resale Prospectus;
 
 
 
they contain different Plan of Distribution sections;
 
 
 
the Legal Matters section in the Resale Prospectus deletes the reference to counsel for the placement agent; and
 
 
 
they contain different back covers.
 
The registrant has included in this registration statement, after the financial statements, a set of alternate pages to reflect the foregoing differences between the Resale Prospectus and the Public Offering Prospectus.
 
 
iii

 

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
 
  PROSPECTUS Subject to Completion, Dated              , 2014                       
 
(DAN DRIT LOGO)
 
DANDRIT BIOTECH USA, INC.
 
Up to           Shares of Common Stock
 
We are offering up to $12,000,000 (          shares) of our common stock at an expected offering price of $     per share in an initial public offering of our common stock. There is presently no public market for our common stock.
 
We are an “emerging growth company” under the federal securities laws and will have the option to use reduced public company reporting requirements.
 
Investing in our common stock involves a high degree of risk. You should review carefully the risks and uncertainties described under the heading “Risk Factors” beginning on page 9 of this prospectus, and under similar headings in any amendments or supplements to this prospectus.
 
Sunrise Securities Corp. (the “Placement Agent”) is the placement agent for our initial public offering. The Placement Agent is not purchasing or selling any shares of common stock nor is it required to sell any specific number or dollar amount of common stock but will use its best efforts to sell the common stock offered. There are no minimum purchase requirements that must be met before the offering terminates. We have not arranged to place the funds from investors in an escrow, trust or similar account. Once your subscription is received, you will not have the right to withdraw your funds. Upon receipt, offering proceeds will be deposited into our operating account and used to conduct our business and operations in accordance with the section of this prospectus titled “Use of Proceeds”. This offering will terminate on August 14, 2014, unless it is fully subscribed before that date or we decide to terminate the offering prior to that date. In either event, the offering may be closed without further notice to you.
 

 
    Per Share    
Total
 
Public Offering Price
  $       $    
Placement Agent’s Commissions(1)
  $       $    
Offering Proceeds before expenses (2)
  $       $    
 
(1) For the purpose of estimating the Placement Agent’s fees, we have assumed that the Placement Agent will receive the maximum commission on all sales made in the offering. This figure does not include a non-accountable expense reimbursement fee of 1% of the gross proceeds of this offering. See “Plan of Distribution” for more information on this offering and the arrangements we have with the placement agent.
 
(2) Does not include offering expenses that we will be required to pay. Because there is no minimum offering amount required as a condition to closing this offering, the actual public offering amount, the Placement Agent’s commissions, and proceeds to us, if any, are not presently determinable and may be substantially less than the total maximum offering set forth above. Once the offering price has been determined, the common stock offering price will remain fixed for the duration of the offering. See “Plan of Distribution” for more information on this offering and the arrangements we have with the placement agent.
 
We have granted the placement agent an option for a period of 45 days to place for us, on the same terms and conditions set forth above, up to an additional 360,000 shares of common stock to cover over-allotments, if any.
 

 
The delivery of the shares of common stock will be made on or about                   , 2014.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
 
Sunrise Securities Corp.
The date of this prospectus is                   , 2014.
 
 
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TABLE OF CONTENTS
     
 
Page
   
1
 
7
 
9
 
23
 
24
 
25
 
26
 
27
 
28
 
37
 
64
 
66
 
68
 
70
 
72
 
73
 
74
 
75
 
76
 
79
 
82
 
83
 
83
 
83
 
 

 
Dealer Prospectus Delivery Obligation
 
Until                                          , 2014 (90 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as a placement agent and with respect to any unsold allotments or subscriptions.
 
 
v

 
 
ABOUT THIS PROSPECTUS
 
You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different or additional information. If anyone provides you with different or inconsistent information, you should not rely on it. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of securities described in this prospectus. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus or any prospectus supplement, as well as information we have previously filed with the Securities and Exchange Commission (the “SEC” or the “Commission”) and incorporated by reference herein, is accurate as of the date on the front of those documents only. Our business, financial condition, results of operations and prospects may have changed since those dates.
 
CURRENCY INFORMATION
 
Our functional currency is the Danish Krone (“DKK” or “Danish Krone”) and our reporting currency is U.S. dollars ($) for the purpose of the financial statements and other financial data contained elsewhere in this prospectus. Our consolidated balance sheet accounts are translated into U.S. dollars at the period-end exchange rates (DKK 5.51 and DKK 5.66 to $1 at September 30, 2013 and at December 31, 2012, respectively) and all revenue and expenses reported for the period ended September 30, 2013 and the year ended December 31, 2012 are translated into U.S. dollars at the average exchange rates prevailing during 2013 and 2012 (DKK 5.58 and DKK 5.79 to $1 at September 30, 2013 and December 31, 2012, respectively).
 
 
vi

 
 
 
This summary may not contain all of the information that may be important to you. You should read the entire prospectus, including the financial statements and related notes, and the risk factors under the section titled “Risk Factors”. Unless otherwise indicated or the context otherwise requires, all references in this prospectus to “DanDrit,” “we,” “us,” “our” and the “Company” are to DanDrit Biotech USA, Inc., a Delaware corporation (“DanDrit USA”), together with its wholly-owned subsidiaries DanDrit Biotech A/S, a Danish limited company, organized under the Danish Act on Limited Companies of the Kingdom of Denmark (“DanDrit Denmark,” or the “Subsidiary”).
 
Overview
 
We are a biotechnology company seeking to develop what we believe could be the world’s first vaccine approved for the treatment of colorectal cancer. For more than a decade we have developed and patented vaccines successfully used in initial clinical trials in Europe and Asia. We plan to continue our clinical development program in the United States. Springing from academic roots in Denmark, DanDrit has built upon its scientific and medical skills to advance candidate therapies, targeted initially at non-small-cell-lung-cancer (NSCLC) and colorectal cancer (CRC). On September 22, 2008, the Singapore government granted to DanDrit Denmark a named-patient compassionate use of MelCancerVac ™ (MCV). DanDrit has conducted three single-arm Phase II clinical trials in cancer where its dendritic cell vaccine, MCV, demonstrated efficacy. However, these three clinical trials generated data which indicated that the data needed to be confirmed in a larger, comparative randomized clinical trial. As a result, DanDrit, with the assistance of experienced practitioners in colorectal cancer treatment, designed a randomized trial with 174 stage IV colorectal cancer patients.
 
Our Biotechnology
 
We plan to use a dendritic cell vaccine technology relatively similar to the technology behind Dendreon’s FDA approved Provenge™ cancer vaccine. However, we believe DanDrit’s next generation of dendritic cell vaccine may benefit from technological competitive advantages over other cancer vaccines including:
 
 
The vaccine will be generated within eight days from a patient’s peripheral blood. We will be able to generate the vaccine quickly because only 200ml of blood is required to be drawn. Leukapheresis (a medical technology in which the blood of a patient is passed through an apparatus -dialysis machine- that separates out one particular constituent and returns the remainder to the circulation which is used in Denderon’s Provenge™ cancer vaccine) is not needed.
 
The vaccine will use an allogenic (using cells, tissues, or organs, sourced from a genetically non-identical member of the same species as the recipient (“Allogenic”) tumor lysate (a fluid containing the contents of lysed cells) as opposed to inconvenient autologous (from the patient) tumor lysate. Our cancer-specific antigens are off-the-shelf and therefore DanDrit does not need a patient’s tumor cells to manufacture the vaccine.
 
The vaccine will be polytopic (targets several cancer specific antigens). As a result, the risk of the tumor escaping is more limited and more T-cells can be activated than if the vaccine is targeting one antigen only. However, MCV has a focus on melanoma-associated antigen (“MAGE”)-A antigens that are only expressed by tumors and absent in normal tissues.
 
Fast track production in two days is possible.
 
MCV demonstrated efficacy in three separate Phase IIa clinical trials in colorectal and non-small cell lung cancer. Even if MCV can be used for various cancers, DanDrit has decided to focus MCV’s clinical development specifically on the treatment of advanced CRC.
 
Our Proposed Clinical Trial
 
Parallel with the establishment of a cancer vaccine center in Asia, DanDrit intends to develop globally MCV in colorectal cancer, with opportunities to expand the scope of the treatment to other types of cancer after development in colorectal cancer. DanDrit proposes to focus its development program on a randomized multicenter (United States, Europe and Asia) Phase IIb clinical trial in stage IV colorectal cancer. The proposed Proof of Concept (PoC) study with an adaptive design plans to enroll 174 stage IV colorectal cancer patients after surgical resection of metastases and chemotherapy. These patients have no evidence of disease but are not cured of cancer. Their Progression Free Survival (PFS) is only 24 to 26 months. The objective of this multicenter Phase II/III clinical study is to lengthen the survival of these patients. Treatment will be double blinded (to the patients and physicians) against reference therapy. Patients will be included after surgical resection of their primary tumor and resectable metastases in liver and after appropriate peri-operative chemotherapy by stratification and random assignment to a non-vaccine control group or a vaccine group receiving five vaccinations with 14-day administration intervals followed by five vaccines with two-month intervals. Inclusion will take place one month after finishing the last round of peri-operative chemotherapy (FOLFOX or FOLFIRI) and after a negative tumor scan (head, thoracic and abdominal cavities) and normal carcinoembryonic antigen (CEA) prior to inclusion in the vaccine or the control groups. Patients will be screened for MAGE-A expression. The control group will receive five plus five injections with physiological saline. In the event of disease progression, as verified by tumor scan and biomarker levels during the vaccination schedule, vaccinations will be discontinued.
 
 
1

 
 
Our Competitive Strengths
 
We believe the following strengths position us to increase our revenue and profitability:
 
 
Cutting Edge Technology. We believe, based on the current state of research, that immunotherapy is one of the waves of the future in cancer management.
 
 
Colorectal Therapy Potential. We believe the treatment of advanced colorectal cancer represents an opportunity to meet a well identified medical need for safe maintenance therapy. We believe the clinical data for MCV to date shows the potential for the vaccine to eventually become a standard of care for maintenance therapy. We believe, based on our studies to date, that MCV has the potential to prolong periods of remission after response to chemotherapy. If MCV works as expected in advanced colorectal cancer, we believe it would likely prove beneficial in other tumors that over-express MAGE-A including lung, breast and esophageal cancers.
 
 
Regulatory Precedent. With Provenge™, its prostate cancer vaccine, Dendreon pioneered the regulatory pathway for MCV. Dendreon worked with the FDA to develop the protocols which could allow a cellular therapy such as MCV to be approved for clinical use. We believe that DanDrit is the next generation of dendritic cell vaccine with several improvements over its competition: stimulate a cellular immune response rather than just an antibody response, no need for leukapheresis to produce the vaccine, intradermal administration, convenience of an Allogenic vaccine (off-the-shelf cancer specific antigens), polytopic approach but with a focus on the MAGE-A antigen family and reliable cost-efficient manufacturing.
 
 
Use in Singapore. For the last five years, DanDrit and the Singapore National Cancer Center have provided MCV to colorectal cancer patients within an on-going compassionate use program in Singapore.
 
 
Strong IP Protection. The technology is patented with a long patent life. DanDrit owns 100% of the technology.
 
Our Strategy
 
Our strategy is focused on conducting a proof-of-concept clinical trial in advanced colorectal cancer. DanDrit intends to conduct a randomized multicenter (United States, Europe and Asia) Phase IIb clinical trial to determine the ability of MCV to prevent recidivism in stage IV colorectal patients with no evidence of disease after resection of liver metastasis and chemotherapy. This blinded comparative trial is planned to be completed within three years. We believe that positive clinical data will be the catalyst to unlock commercial revenues for DanDrit through either acquisition by pharmaceutical partner or licensing deals that would yield upfront and milestone payments as well as royalties.
 
Furthermore, parallel to the previously described clinical trial, DanDrit may pursue a registration trial to support potential approval of MCV in China. This trial would be conducted under China’s State Food and Drug Administration (the “SFDA”) regulations with a Chinese oncology pharmaceutical partner. China has recently put in place a drug approval system.
 
DanDrit is headquartered in and runs operations from Denmark. When clinical milestones are met (positive 12-month-interim results from comparative clinical trial), DanDrit intends to establish a dendritic cell cancer vaccine good manufacturing practices (GMP) laboratory in the United States.
 
Industry Overview
 
We believe that major advances have been made the last three years in the field of immunotherapy. Molecular and cellular mechanisms controlling the immune system’s battle against cancer cells are now better understood.
 
 
2

 
 
However, currently, cancer remains still mostly treated by surgery, chemotherapy and radiotherapy. The current therapeutic approach is aggressive on the patient with significant side effects, and often fails to deal with the cancer for very long. Immunotherapy, however, can potentially solve these problems because the immune system, with its high level of specificity, can zero in on cancer cells that surgeons, drugs and radiations cannot reach.
 
For example, according to Dr. Adam Snook, “Our immune system is characterized by remarkable specificity, potency and memory – the ability of a single vaccine treatment to provide life-long-protection. No pharmacologic treatment for any indication can provide the same level of safety, efficacy, and long lasting affect than a vaccine can,”
 
In 2010, Dendreon published positive Phase III survival data for its immunotherapy, called Provenge™, in prostate cancer. During the last three years, the field of cancer immunotherapy has been fast evolving. In immunotherapy for cancer, there has been recently positive clinical data (i.e. anti-programmed cell death protein-1) and approval of several immunotherapies for cancer. We believe that dendritic cell vaccines such as MCV are among the potential developments in the treatment of cancer.
 
Colorectal cancer (CRC) is the second largest cancer market in terms of numbers of patients diagnosed. In 2010, a total of around 1.58 million individuals were affected by CRC in the seven major markets, including the US, Japan, France, Germany, Italy, Spain and the UK. CRC was the leading cause of cancer prevalence among men and second among women in Europe. It was also observed that higher survival rates correlated with higher prevalence.
 
According to Decision Resources, the colorectal cancer (CRC) market totaled $8.3 billion in 2011. The value of the CRC market is expected to decrease in the next ten years due to generic competition for a key cytotoxic agent, oxaliplatin (Sanofi’s Eloxatin/Eloxatine, Yakult Honsha’s Elplat), as well as the entry of biosimilar competitors for key targeted biological agents. In terms of number of patients, despite the risk being strongly associated with age, the effect of population aging may be limited by reduced risk of invasive disease due to screening at least in developed countries.
 
DanDrit develops MCV for the management of metastatic CRC (stage IV). Currently, about 20% of CRC are diagnosed with metastatic disease. Forecast improvements in the observed survival in the metastatic setting will increase the number of people living with metastatic CRC over the next twenty years, despite the number developing metastatic disease per year remaining relatively stable due to the combined effects of screening and forecast improvements in the management of metastatic recurrence.
 
Treatment of advanced CRC typically involves removal of sections of the colon (colectomy) or rerouting of the intestine by colostomy. Chemotherapy is also used to treat patients with stage IV colon cancer. Irinotecan, oxaliplatin, and 5-fluorouracil are the three most commonly used drugs. In addition, monoclonal antibodies, including cetuximab (Erbitux), panitumumab (Vectibix), and bevacizumab (Avastin) have been used alone or in combination with chemotherapy. CRC is considered cured in the absence of a recurrence within the first five years. Five year survival rates associated with CRC are as high as 90% in early stage disease, and 40–60% in late-stage disease. Stage I, II and III cancers are considered potentially curable. In most cases, stage IV cancer is not curable. Therefore, there is an unmet need for a safe maintenance therapy of stage IV CRC after surgery and chemotherapy.
 
Corporate History and Information
 
DanDrit was incorporated in Delaware on January 18, 2011 under the name “Putnam Hills Corp.” (“Putnam”) as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. We filed a Registration Statement on Form 10 with the U.S. Securities and Exchange Commission (the “SEC”) on August 12, 2011.

On February 12, 2014, the Company signed and closed the transactions contemplated by a Share Exchange Agreement (the "Share Exchange Agreement"), by and among DanDrit USA (formerly known as Putnam Hills Corp.), Dandrit Denmark and N.E. Nielsen, as the representative of the shareholders of DanDrit Denmark, pursuant to which the holders of approximately 97% of the issued and outstanding capital stock of DanDrit Denmark (the “DanDrit Consenting Holders”) agreed to exchange an aggregate of 3,879,624 equity interests of Dandrit Denmark for 5,814,945 shares of DanDrit USA (the “Share Exchange”) and as a result of which Putnam would become the parent of DanDrit Denmark. Following the closing of the Share Exchange, in accordance with Section 70 of the Danish Companies Act and the Articles of Association of Dandrit Denmark, DanDrit USA will offer to any Dandrit Denmark shareholder that has not consented to the Share Exchange (the “Non-Consenting Shareholders”) and therefore has not exchanged such Dandrit Denmark shareholder’s equity interests in DanDrit Denmark for shares of DanDrit USA, the pro rata portion of the number of shares of DanDrit USA such DanDrit Denmark shareholder would have been entitled to if such DanDrit Denmark shareholder had consented to the Share Exchange, up to an aggregate of 6,000,000 shares of DanDrit USA, including those issued to the DanDrit Consenting Holders at closing. Any remaining shares of DanDrit USA that have not been issued to the Dandrit Consenting Shareholders at the closing, or to the Non-Consenting Shareholders following the closing, shall be distributed pro rata among the shareholders of DanDrit Denmark that have received shares of DanDrit USA based on the number of shares of DanDrit USA issued to such shares of DanDrit Denmark in connection with the Share Exchange and the Share Exchange Agreement.
 
 
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Upon the closing of the Share Exchange, DanDrit USA and the its majority shareholder immediately prior to the closing agreed to cancel up to 4,400,000 share of common stock.  In addition, following the closing of the Share Exchange, the wholly owned subsidiary of the company formed solely for the purposes of changing the company’s name, Dandrit Biotech USA, Inc., merged with and into the company and the company adopted the name of its wholly owned subsidiary “DanDrit Biotech USA, Inc.”
 
DanDrit USA owns approximately 97% of the outstanding equity interests of DanDrit Denmark. As a result of the Share Exchange, we changed our management and reconstituted our board of directors. As of the effective time of the Share Exchange, Samir Masri, the Chief Executive Officer, Chief Financial Officer, President, Secretary and sole director of Putnam resigned as the sole officer and director of the company and appointed NE Nielsen, Dr. Jacob Rosenberg, Dr. Eric Leire, Aldo Petersen and Robert E. Wolfe as directors of Putnam, and Dr. Eric Leire as Chief Executive Officer and President and Mr. Wolfe as Chief Financial Officer.
 
Our principal executive offices are located at Fruebjergvej 3 Box 62, 2100 Copenhagen, Denmark, and our telephone number is +45 39179840. We maintain an Internet website at www.dandrit.com. The information contained in, or accessible from, our website is not a part of this prospectus.
 
Implications of being an Emerging Growth Company
 
As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, or JOBS Act, enacted in April 2012. An “emerging growth company” may take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:
 
Financial Disclosure. The financial disclosure in a registration statement filed by an “emerging growth company” pursuant to the Securities Act will differ from registration statements filed by other companies as follows:
 
 
audited financial statements are required for only two fiscal years;
 
 
selected financial data is required for only the fiscal years that were audited;
 
 
executive compensation only needs to be presented in the limited format now required for “smaller reporting companies”.
 
Because we are a smaller reporting company, we are already provided with the above exemptions under Regulation S-K promulgated under the Securities Act.
 
The JOBS Act also exempts us from any Public Company Accounting Oversight Board rules that, if adopted, would mandate auditor rotation or auditor discussion and analysis.
 
Internal Control Attestation. The JOBS Act provides an exemption to emerging growth companies from the audit of internal controls over financial reporting. We are also exempt from this requirement as a smaller reporting company.
 
Shareholder Advisory Votes. Section 102(a) of the JOBS Act exempts emerging growth companies from the requirements in Sections 14A(a) and (b) of the Exchange Act to hold shareholder advisory votes approving executive compensation and golden parachute compensation paid in connection with an acquisition, merger, consolidation, or proposed sale or other disposition of all or substantially all the assets of an issuer.
 
 
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Information about an Emerging Growth Company. Section 105(a) of the JOBS Act amended the Securities Act to provide an exception from the definition of the word “offer” for purposes of Sections 2(a)(10) and 5(c) of the Securities Act for research reports issued by a broker-dealer regarding an emerging growth company that is the subject of a proposed public equity offering.
The JOBS Act also prohibits the SEC and FINRA from adopting or maintaining any rule or regulation in connection with an initial public offering of an emerging growth company that restricts, based on “functional role”, which employees of a broker-dealer may arrange for communications between research analysts and prospective investors; prohibits research analysts from participating in communication with company management in the presence of non-research personnel such as investment banking or sales force personnel; or which prohibits the publication or distribution of a research report or making of a public appearance within any prescribed period of time either following the pricing date of the emerging growth company’s initial public offering or prior to the expiration of a company or shareholder lock-up agreement.
 
Election to Opt Out of Transition Period. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standard.
 
The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have not elected to opt out of the transition period.
 
We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended, or the Securities Act, which such fifth anniversary will occur in 2018. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenues exceed $1.0 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.
 
Because we have elected to take advantage of certain of the reduced disclosure obligations and may elect to take advantage of other reduced reporting requirements in future filings, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.
 
 
5

 

THE OFFERING
 
Common stock offered by us
 
Up to          shares on a best efforts basis.
 
 
 
Common stock outstanding as of prior to the offering
 
7,854,945 shares.
 
 
 
Common stock to be outstanding after the offering
 
Up to          shares.
     
Use of proceeds
 
Based on an expected offering price of $          per share, after deducting the placement agent’s commissions and estimated offering expenses payable by us, we estimate that we will receive up to $10,785,464 in net proceeds from the sale of the shares of common stock in this offering. However, this is a best efforts offering, and there can be no assurance that the offering contemplated hereby will ultimately be consummated.
 
We intend to use the proceeds from this offering to invest approximately (i) $1,100,000 million for the manufacturing of our products, (ii) $1,900,000 million in SG&A/Administration, and (iii) $7,600,000 million in our clinical trial. All remaining proceeds will be used for working capital and general corporate purposes.
 
If we are unable to raise gross proceeds equal to at least $12,000,000 million, we intend to first apply the proceeds towards the development and marketing of our products and the engineering, development and testing of vaccines. However, to the extent that we are unable to raise a sufficient amount of proceeds in this offering, we may not be able to achieve all our business objectives in a timely manner.
 
See “Use of Proceeds” for more information.
     
Potential purchases by affiliates
 
Certain of our affiliates may purchase shares of our common stock in this offering on the same terms as they are offered and sold to the public.
     
Risk factors
 
The shares of common stock offered hereby involve a high degree of risk. See “Risk Factors”.
 
 
 
Dividend policy
 
We currently intend to retain any future earnings to fund the development and growth of our business. Therefore, we do not currently anticipate paying cash dividends on our common stock.
 
 
 
Trading Symbol
 
There is not currently, and there has never been, any market for our common stock. In connection with this offering, we intend to arrange for a registered broker-dealer to apply to have our common stock quoted on the OTC Bulletin Board and on the OTCQB. We cannot guarantee that our application will be approved.
 
 
6

 

 
The following table sets forth selected historical consolidated statements of operations for the fiscal years ended December 31, 2012 and 2011 and for the nine months ended September 30, 2013, and consolidated balance sheet data as of December 31, 2012 and 2011, and as of September 30, 2013. DanDrit Denmark is considered the accounting acquirer in the Share Exchange and, as a result, the assets and liabilities and the historical operations that are reflected in our consolidated financial statements are those of DanDrit Denmark. Therefore, the historical financial data of DanDrit Denmark is deemed to be our historical financial data.
 
The balance sheet data as of December 31, 2012 and 2011 and the statement of operations data for the fiscal years ended December 31, 2012 and 2011 have been derived from our audited consolidated financial statements for those years. The balance sheet data as of September 30, 2013 and the statement of operations data for the nine months ended September 30, 2013 have been derived from our unaudited consolidated financial statements for those periods. In the opinion of management, in such unaudited financial statements, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position and results of operations at September 30, 2013 and for the period then ended have been made. The results of operations for the period ended September 30, 2013 are not necessarily indicative of the operating results for the full year.
 
The following data for fiscal years 2012 and 2011, and for the nine months ended September 30, 2013, should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this prospectus and with our financial statements and the related notes and other financial information included in this prospectus.
 
STATEMENTS OF OPERATIONS:
 
   
For the Nine Months Ended
September 30,
2013 (Unaudited)
   
For the Year Ended
December 31,
2012 (Audited)
   
For the Year Ended
December 31,
2011 (Audited)
 
Net Sales
  $ 32,483     $ 62,806       72,013  
                         
Cost of Goods Sold
    68,486       64,385       85,494  
                         
Gross Loss
    (36,003 )     (1,579 )     (13,481 )
                         
Operating Expenses:
                       
General and administrative expenses
    573,777       1,036,005       376,944  
Depreciation and Amortization
    24,566       56,600       200,251  
Consulting expenses
    128,191       829,845       573,098  
                         
Total Operating Expense
    726,534       1,922,450       1,150,293  
                         
Loss from Operations
    (762,537 )     (1,924,029 )     (1,163,774 )
                         
Other Income (Expense)
                       
Interest (expense)
    (546,057 )     (704,911 )     (441,598 )
Gain on forgiveness of debt
    48,589       -       -  
Gain (loss) on currency transactions
    8,745       32,841       (69,391 )
Gain on derivative liability
    136,697       153,430       10,583  
Gain on sale of fixed assets
    -       15,020       -  
                         
Total Other Income (Expense)
    (352,026 )     (503,620 )     (500,406 )
                         
Loss Before Income Taxes
    (1,114,563 )     (2,427,649 )     (1,664,180 )
                         
Income Tax Expense (Benefit)
            -       -  
                         
Net Loss
    (1,114,563 )   $ (2,427,649 )   $ (1,664,180 )
                         
                         
Basic Earnings Per Share
  $ (0.31 )   $ (0.68 )   $ (0.62 )
                         
Weighted Average Common
                       
Shares Outstanding
    3,548,172       3,548,172       2,702,055  
                         
Diluted Earnings Per Share
  $ (0.31 )   $ (0.68 )   $ (0.62 )
                         
Weighted Average Common Shares
                       
Outstanding Assuming Dilution
    3,548,172       3,548,172       2,702,055  
 
 
7

 
 
BALANCE SHEETS:
   
As of
September 30,
   
As of
December 31,
   
As of
December 31,
 
   
2013
   
2012
   
2011
 
Current Assets:
                 
Cash
  $ 36,976     $ 4,381     $ 250,984  
Other receivables
    10,995       81,802       64,097  
Prepaid expenses
    23,737       19,747       12,881  
                         
Total Current Assets
    71,708       105,930       327,962  
Property and Equipment, net accumulated depreciation
    537       2,706       7,183  
                         
OTHER ASSETS:
                       
Definite life intangible assets
    232,405       239,658       192,118  
Deposits
    3,460       14,570       12,493  
                         
Total Other Assets
    235,865       254,228       204,611  
                         
 Total Assets
  $ 308,110     $ 362,864     $ 539,756  
                         
Current Liabilities:
                       
Notes payable - related party, current portion
  $ 1,972,828     $ 106,349     $ 45,380  
Accounts payable - trade
    37,840       31,391       16,318  
Accrued expenses
    876,464       1,948,882       802,951  
                         
Total Current Liabilities
    2,887,132       2,086,622       864,649  
                         
Long Term Liabilities
                       
Bonds Payable - related party, net of $502,465 and 963,744 discount
    1,413,510       997,535       536,256  
Notes payable - related Party
    911,022       795,785       -  
Derivative Liability
    712,205       850,753       993,332  
                         
Total Long-Term Liabilities
    3,036,737       2,644,073       1,529,588  
                         
Total Liabilities
    5,923,869       4,730,695       2,394,237  
                         
STOCKHOLDERS’ (DEFICIT):
                       
                         
Common Stock; par value 1.00 DKK, 200,000,000 shares authorized, 3,548,172, 3,548,172 and 3,548,172 shares issued and outstanding at September 30, 2013, December 31, 2012 and December 31, 2011, respectively
    655,978       655,978       655,978  
Additional paid-in capital
    12,161,676       12,161,676       12,161,676  
Other comprehensive income, net
    54,915       188,280       273,981  
Non-controlled interest in subsidiaries
    -                  
Accumulated Deficit
    (18,488,328 )     (17,373,765 )     (14,946,116 )
                         
Total Stockholders’ (Deficit)
    (5,615,759 )     (4,367,831 )     (1,854,481 )
Total Liabilities and Stockholders’ (Deficit)
  $ 308,110     $ 362,864     $ 539,756  
 
 
8

 
 
 
You should carefully consider and evaluate all of the information in this prospectus, including the risk factors listed below. Risks and uncertainties in addition to those we describe below, that may not be presently known to us, or that may also harm our business and operations. If any of these risks occur, our business, results of operations and financial condition could be harmed, the price of our common stock could decline, and future events and circumstances could differ significantly from those anticipated in the forward-looking statements contained in this prospectus.
 
All references to DanDrit’s drugs and vaccine candidates in this section refer to DanDrit drugs and vaccine candidates that DanDrit developed in-house.
 
RISKS ASSOCIATED WITH DANDRIT’S BUSINESS AND INDUSTRY
 
DanDrit lacks an established operating history on which to evaluate its business and determine if it will be able to execute our business plan, and can give no assurance that operations will result in profits.

DanDrit formed in Delaware in January 2011 as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business.  On February 12, 2014, DanDrit acquired approximately 97% of the outstanding capital stock of DanDrit Biotech A/S, a Danish company.  DanDrit has a limited operating history that makes it difficult to evaluate its business.  DanDrit has not begun sales of its products, and cannot say with certainty when it will begin to achieve profitability.  No assurance can be made that DanDrit will ever become profitable.
 
DanDrit has incurred losses in prior periods and expect to incur losses in the future. DanDrit may never be profitable.
 
DanDrit’s independent registered public accounting firm has issued an unqualified opinion with an explanatory paragraph to the effect that there is substantial doubt about its ability to continue as a going concern. This unqualified opinion with an explanatory paragraph could have a material adverse effect on DanDrit’s business, financial condition, results of operations and cash flows.
 
DanDrit had net losses at December 31, 2012 and 2011 of $2,427,649 and $1,664,180, respectively. DanDrit expects to continue to sustain losses for the foreseeable future. Net loss for the nine months ended September 30, 2013 was $1,114,563.
 
As sales of DanDrit’s products have generated minimal operating revenues, DanDrit has relied on loans and on sales of its debt and equity securities to continue operations. If DanDrit is unable to raise funds through sales of its securities, there can be no assurance that DanDrit will be able to implement its business plan, generate sustainable revenue or ever achieve profitable operations. DanDrit expects to have operating losses until such time as it develops a substantial and stable revenue base. DanDrit cannot assure you that it can achieve or sustain profitability on a quarterly or annual basis in the future.
 
DanDrit may not be able to develop its vaccine candidates to yield satisfactory results and they may never be approved for use by regulatory authorities. If DanDrit is unable to successfully commercialize its vaccines, its prospects, financial position, results of operations and future opportunities will be materially adversely affected.
 
None of DanDrit’s vaccine candidates has completed full clinical development. Because DanDrit’s vaccine candidates generally belong to new classes of cell therapy, they will require extensive further development, testing and funding before we can seek regulatory approval for any of these vaccines.
 
DanDrit’s prospects in the short term, including DanDrit’s ability to generate revenue and make new strategic alliances, depend on DanDrit’s ability to develop, obtain regulatory approval for and commercialize its current vaccine candidates with satisfactory results. If DanDrit fails to develop the medicines DanDrit has in its pipeline, it will have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities.
 
There can be no assurance that DanDrit will succeed in implementing its Phase IIb/III clinical trials for advanced colorectal cancer so that the results of these clinical trials will support further preclinical or clinical studies, or that DanDrit will be able to develop new vaccine candidates or successfully commercialize any of those cancer vaccine candidates at a later time. If DanDrit does not do this, we cannot achieve our growth potential and this will have a material adverse effect on DanDrit’s prospects, financial position, results of operations and future opportunities.
 
 
9

 
 
Results of our early clinical trials do not insure future success.
 
The results of early clinical trials may not necessarily be indicative of future results. Achieving positive results in preclinical testing and early clinical trials does not constitute any assurance that in future clinical trials sufficient data can be obtained to document a vaccine candidate’s efficacy and safety. The safety and efficacy of a vaccine candidate in development must be supported by extensive data from preclinical studies and clinical trials.
 
A number of companies in the pharmaceutical industry and in the biopharmaceutical industry, including companies that have greater resources and more experience than DanDrit, have achieved significant negative results in clinical phase IIb and III trials, even after obtaining promising results in preclinical and early clinical studies. Results that are considered acceptable in early clinical studies may not be confirmed or may be interpreted differently in subsequent studies. DanDrit cannot predict whether the clinical phase IIb and III and other clinical trials that may be implemented will demonstrate sufficient efficacy and safety to obtain regulatory approval to market any of DanDrit’ s vaccine candidates.
 
Negative or non-satisfactory results of clinical trials involving DanDrit’s vaccine candidates could lead to DanDrit or its collaborators having to perform additional nonclinical and/or clinical trials, which could result in higher costs and significantly delay the marketing authorization application for such vaccine candidates by the regulatory authority, or could lead to an application for a more narrowly defined use, or another indication for the vaccine candidate than originally expected. Such results could also lead to the complete elimination of a vaccine candidate. If any of these risks materialize, it could have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities.
 
We are a clinical-stage biopharmaceutical company which makes it difficult to assess our future viability.
 
We are a clinical-stage biopharmaceutical company. We have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical area. For example, to execute our business plan, we will need to successfully:
 
 
execute on product candidate development activities;
 
obtain required regulatory approvals for the development and commercialization of our product candidates;
 
maintain, leverage and expand our intellectual property portfolio;
 
gain market acceptance for our products;
 
develop and maintain any strategic relationships we elect to enter into; and;
 
manage our spending as costs and expenses increase due to preclinical development, clinical trials, regulatory approvals and commercialization.
 
If we are unsuccessful in accomplishing these objectives, we may not be able to develop product candidates, raise capital, expand our business or continue our operations.
 
DanDrit will be dependent on collaboration and licensing arrangement to develop and commercialize its products. These relationships may be unsuccessful and may not result in the development of vaccine candidates. In that case, our business, financial condition and growth opportunities will be materially adversely affected.
 
DanDrit expects to depend on collaboration and licensing agreements with third parties who we expected will provide additional personnel and other resources and funding required to develop and commercialize its products. Until these relationships are established, our plans for developing some of our vaccines may be uncertain. There can be no assurance that DanDrit will be able to enter into or maintain these agreements, that the results of these agreements will further the development of a vaccine, or that DanDrit will receive income from these agreements. Furthermore, collaborators that we anticipate may enter into agreements with us may change their priorities; make reallocation of resources; terminate the agreements; end or further delay the development of vaccine candidates; downgrade or change plans or strategies for regulatory approval or commercialization of the vaccine candidate; find it difficult to retain key employees; or be taken over by companies that are our competitors.
 
We expect that these collaboration and licensing agreements will entitle us to milestone payments and a percentage of sales related to the vaccine candidates that are commercialized. If a third party with which DanDrit has established a collaboration or licensing arrangement stops the development of a vaccine candidate, there can be no assurance that all rights in respect of the vaccine candidate will be reassigned to us. A transfer of these rights may be delayed for various reasons, which may result in the delay of all work performed for the vaccine candidate.
 
 
10

 
 
Since we are dependent on third parties to develop and commercialize our product candidates, any change in these anticipated relationships will have a material adverse effect on our business, financial condition, and future growth opportunities.
 
Regulatory requirements and regulations could have a material adverse effect on DanDrit.
 
DanDrit’s products are subject to extensive regulatory requirements, including public and/or regulatory limits set by the FDA and the European Medicines Agency (“EMA”). These laws and regulations, including those relating to reporting on safety, product safety and advertising and marketing of products cover all aspects of DanDrit’s business.
 
DanDrit and/or any future third party with which it has an effective collaboration or licensing agreement may be subject to changes in applicable governmental regulations and/or regulatory framework and be subject to additional or more onerous restrictions, which may make it necessary to make changes to personnel, facilities or procedures that could result in increased costs and adversely affect DanDrit’s business activities, including the development and commercialization of DanDrit’s vaccine candidates.
 
If DanDrit or its affiliates do not comply with applicable regulatory requirements or comply with significant legislative changes DanDrit or its affiliates can be fined or risk having regulatory approvals suspended or withdrawn, risking recall or seizure of products, restrictions on activities and/or civil or criminal prosecution, which could have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities. Furthermore, we cannot guarantee that our vaccine candidates will be approved by the regulating agencies.
 
As long as the relevant regulatory authorities have not considered and approved applications for DanDrit’s vaccine candidates (New Drug Application (NDA) or equivalent) DanDrit and its affiliates cannot commercialize DanDrit’s vaccine candidates. Production and marketing of DanDrit’s products and DanDrit’s ongoing research and development activities are subject to rules set by numerous public authorities throughout the world. The regulatory authorities of each country can set their own requirements and may refuse to approve a product or may require additional data before approving a product, even if the product is approved by another regulating agency. Approvals may include restrictions on the marketing or use of products, which could adversely affect the amount of DanDrit’s revenue from the sale of those products.
 
There can be no assurance that regulators will complete their review process in a timely manner, or that DanDrit vaccine candidates will obtain regulatory approval.
 
If DanDrit or any third party with which we have an effective collaboration or licensing agreement experience difficulties or delays in obtaining regulatory approvals, the development and commercialization of our vaccine candidates may be significantly delayed or even discontinued. Such difficulties or delays could result in significantly increased development costs and/or a delay or elimination of payments to us from our collaborators. This would have a material adverse effect on our business, financial condition, results of operations and future growth opportunities.
 
DanDrit will be dependent on external suppliers of certain services and technologies.
 
DanDrit will be dependent on a number of external parties such as contract laboratories and clinical research organizations, and in some cases our collaborators to:
 
 
Implement preclinical studies (pharmacology, toxicology testing and safety pharmacological evaluations).
 
Provide DanDrit with vaccine materials and support DanDrit’s activities related to preclinical and clinical studies.
 
Implement, inspect and/or monitor some or all aspects of the preclinical or clinical studies with DanDrit’s product candidates.
 
Ensure compliance with regulatory requirements such as Good Clinical Practice (“GCP”), Good Manufacturing Practice (“GMP”) and Good Laboratory Practices (“GLP”).
 
Deliver IT services.
 
Produce vaccine drugs and vaccines in accordance with GMP. The third parties DanDrit depends on may not be available when needed, or might not, if available, comply with all statutory and contractual requirements, and / or otherwise provide their services in a timely manner or in an acceptable manner.
 
 
11

 
 
DanDrit is dependent on its ability to recruit and retain qualified scientific and management personnel.
 
Recruiting and retaining qualified scientific and management personnel for the planning and execution of research and development; preparation of applications for intellectual property rights and regulatory approvals; and negotiating and maintaining cooperation with existing and new partners is essential for DanDrit.
 
There can be no assurance that DanDrit will be able to attract and retain such persons in light of demand for experienced employees from numerous pharmaceutical companies, chemical companies, specialized biopharmaceutical companies, universities and other research institutions. DanDrit’s employment contracts contain no limitation on competition that would prevent DanDrit’s current employees from being employed by DanDrit’s competitors or partners, if they choose to leave DanDrit.
 
DanDrit may in the future require additional expertise and manpower in areas such as preclinical trials, management of clinical trials, regulatory affairs, marketing, business development and management of partnerships. Inability to obtain or develop such expertise, or hire the employees they need, on reasonable terms, could have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities.
 
If our employees commit fraud or other misconduct, including noncompliance with regulatory standards and requirements and insider trading, our business may experience serious adverse consequences.
 
DanDrit is exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to comply with FDA regulations, to provide accurate information to the FDA, to comply with manufacturing standards we have established, to comply with federal and state health-care fraud and abuse laws and regulations, to report financial information or data accurately or to disclose unauthorized activities to us.
 
In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. We have adopted a Code of Business Conduct and Ethics but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.
 
DanDrit’s products may not achieve market acceptance. This would have a material adverse effect on our business, financial condition, results of operations and future growth opportunities.
 
The drugs DanDrit or its collaborators may develop, may not gain market acceptance among physicians, patients, third-party payers and the medical community, even if they are approved for marketing. The degree of market acceptance of the products approved for sale depends on a number of factors, including:
 
 
The ability of DanDrit or its collaborators to demonstrate the clinical efficacy, safety and benefits of the products.
 
The ability of DanDrit or its collaborators to demonstrate that the product has advantages over existing therapies or new alternative treatments.
 
The frequency and severity of any adverse effects arising from the use of the products.
 
The price of the products.
 
The subsidies DanDrit receives.
 
Efficacy within the therapeutic range for the illnesses the products are directed towards.
 
Patient comfort and user administration.
 
Requirements for marking.
 
The level of support for marketing and distribution.
 
 
12

 
 
We have no control over most of these factors. Furthermore, it may be difficult for us, to the extent that competitors are able to commercialize competing products before our vaccine candidates obtain regulatory approval, to develop a market for a vaccine because doctors, patients or third-party payers may have become accustomed to using a competing, existing product or for other reasons, even though our drug may be more effective or has other advantages.
 
If any of the vaccines we develop fail to achieve market acceptance in the future, we may not be able to generate significant revenue, which would have a material adverse effect on our business, financial condition, results of operations and future growth opportunities.
 
The use of DanDrit’s drugs or vaccine candidates may lead to unforeseen side effects. If any of our drugs or vaccine candidates is deemed to be unsafe, our business, financial condition, results of operations and future growth opportunities could be materially adversely affected.
 
All drugs are associated with a risk of allergic, immunologic genes or hyper-sensitivities. We test for allergic and immunological genes actions in preclinical and clinical studies, but if any of our products cause other allergic or immunological reactions than those considered acceptable by patients, doctors or regulatory authorities, we or our collaborators may be required to conduct additional clinical trials that will cause delays and increase costs for the development of a product, or development may have to be terminated or suspended on the grounds that participants will be exposed to unacceptable health risks.
 
Even in cases where pre-clinical or clinical studies have been successful, or received regulatory approval, a product can later prove to be unsafe. The incidence of adverse events may make it necessary for us and for our collaborators to carry out further investigations and studies. If a product is determined to be unsafe, we and our collaborators can be fined or risk having regulatory approvals suspended or withdrawn, be required to cease selling activities relating to the product, be required to recall the product, be subject to seizure of products, or be exposed to civil or criminal prosecution. Any of these results could have a material adverse effect on our business, financial condition, results of operations and future growth opportunities.
 
Third party reimbursement and reform measures on health care could have a material adverse effect on the commercial success of DanDrit’s vaccine candidates.
 
Market acceptance of DanDrit’s vaccine candidates depends in part on the extent to which the public and private health insurance and other third-party payers will subsidize DanDrit’s drugs.
 
Governments, insurance companies and health organizations are increasingly seeking to reduce healthcare costs by limiting coverage, price and reimbursement levels of new vaccine products as well as in some cases rejecting coverage. Reimbursement practices vary significantly from country to country, and some countries require that products undergo a lengthy review by the authorities before they meet the public support requirements.
 
In the United States, in Canada and in many other countries, pricing and/or profitability of some or all prescription pharmaceuticals and biopharmaceuticals are subject to varying degrees of government control. Healthcare reform and controls on healthcare spending may limit the price we charge for any products and the amounts thereof that we can sell. In particular, in the United States, the federal government and private insurers have changed and have considered ways to change, the manner in which healthcare services are provided. In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, PPACA, became law in the United States. PPACA substantially changes the way healthcare is financed by both governmental and private insurers and significantly affects the healthcare industry. The provisions of PPACA of importance to our product candidates include the following:
 
 
an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs;
 
 
an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% and 13.0% of the average manufacturer price for most branded and generic drugs, respectively;
 
 
expansion of healthcare fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance;
 
 
13

 
 
 
a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D;
 
 
extension of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
 
 
expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the federal poverty level beginning in 2014, thereby potentially increasing a manufacturer’s Medicaid rebate liability;
 
 
expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
 
 
new requirements under the federal Open Payments program and its implementing regulations;
 
 
a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and
 
 
a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
 
In addition, other legislative changes have been proposed and adopted since PPACA was enacted. These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect on April 1, 2013. In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on our customers and accordingly, our financial operations.
 
We anticipate that PPACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and additional downward pressure on the reimbursement we may receive for any approved product. Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives. For example, the Middle Class Tax Relief and Job Creation Act of 2012 requires the Centers for Medicare & Medicaid Services, or CMS, to reduce the Medicare clinical laboratory fee schedule by 2% in 2013, which in turn will serve as a base for 2014 and subsequent years. CMS also recently proposed to re-examine payment amounts for tests reimbursed under the Medicare clinical laboratory fee schedule due to changes in technology and, in addition, proposed to bundle the Medicare payments for certain laboratory tests ordered while a patient received services in a hospital outpatient setting. Such changes went into effect January 1, 2014. Levels of reimbursement may be impacted by current and future legislation, regulation or reimbursement policies of third-party payors in a manner that may harm the demand and reimbursement available for our products, which in turn, could harm our future product pricing and sales. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products.
 
There may be delays or difficulties in the recruitment and monitoring of patients in clinical trials. Any such delays could have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities.
 
All clinical development of new vaccine candidates depends on the recruitment of volunteer suitable patients for clinical trials. The ability to recruit patients depends on certain factors, including the prevalence of the disease in the population. It may be more difficult to find a sufficient number of patients to participate in clinical trials for drugs being developed for a disease that is common among the general population. Even if a disease is frequent among the population, there may be a number of other companies developing drugs that target the same disease who may eventually have more success in recruiting among the total group of potential patients for their clinical studies. If we or our collaborators find it difficult to recruit a sufficient number of patients to participate in clinical trials for one of its vaccine candidates DanDrit and/or its collaborators may have to postpone or discontinue ongoing clinical trials. Delays may also result in increased costs for clinical studies and may affect the implementation of studies required for a vaccine candidate’s approval. Delay or complete termination of a clinical trial program could have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities.
 
 
14

 
 
DanDrit may not be able to make, or cause others to conduct, animal testing in the future. This could have a material adverse effect on our research and development work.
 
Research into dendritic cell vaccines does not generally involve animals. But, certain aspects of DanDrit’s biotechnology research and development may be carried out on animals. Changes to laws and regulations, recognized clinical procedures, or experimental protocols may have a negative impact on this research and development. Pressure from society, which may lead to restrictions on the use of animals or result in actions against DanDrit, its affiliates or its clinical research organizations from groups of people or individuals who are against animal testing may also have a material adverse effect on research and development work.
 
DanDrit faces extensive competition. If our vaccine candidates cannot compete successfully, our business, financial condition, results of operations and future growth opportunities could be materially, adversely affected.
 
There is extensive competition in the biopharmaceutical industry and the technology is developing rapidly. DanDrit is developing a vaccine for the treatment of advanced colorectal cancer, where competing products may be introduced. If these newly developed products are more efficient, cheaper, more patient-friendly, safer, or better placed than DanDrit’s vaccine candidates, or if DanDrit’s competitors develop drugs that reduce or eliminate the need for DanDrit’s vaccine candidates, such competition could reduce or eliminate DanDrit’s commercial opportunities. Many of DanDrit’s competitors have substantially greater financial, technical and human resources than DanDrit and significantly more experience than DanDrit with preclinical and clinical research and development and in obtaining regulatory approval of pharmaceutical products.
 
DanDrit’s drugs may face competition as a result of many factors, including the route of administration (e.g. oral administration vs. injection), the availability and cost of production, efficiency of DanDrit’s partners’ marketing and sales efforts as well as the price of DanDrit’s products. DanDrit has limited or no previous experience in these areas. DanDrit’s inability to compete effectively would have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities.
 
DanDrit is likely to be exposed to product liability claims. If product liability lawsuits are successfully brought against us, our insurance may be inadequate. If a judgment were to exceed our insurance coverage, our business could be materially, adversely affected.
 
DanDrit will be exposed, by virtue of the nature of its business, to the risk of potential product liability claims, which is a natural part of the clinical development, manufacture and marketing of drugs. Even in cases where DanDrit has granted licenses to third parties to manufacture and sell its products, there can be no assurance that DanDrit will not be included in any product liability claims relating to these medicines, or claims by third parties, including DanDrit’s partners, for indemnity or other compensation from DanDrit in connection with any such claims.
 
We plan to obtain product liability insurance coverage once our clinical trials commence. However, our insurance coverage may not be sufficient to reimburse us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive, and, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. If and when we obtain marketing approval for our product candidates, we intend to expand our insurance coverage to include the sale of commercial products; however, we may be unable to obtain this product liability insurance on commercially reasonable terms. On occasion, large judgments have been awarded in class action lawsuits based on drugs that had unanticipated side effects. The cost of any product liability litigation or other proceedings, even if resolved in our favor, could be substantial. A successful product liability claim or series of claims brought against us could cause our share price to decline (assuming a trading market in our common stock is established) and, if judgments exceed our insurance coverage, could decrease our cash and adversely affect our business.
 
We have insufficient funds to develop our business, which may adversely affect our future growth.
 
We will need to raise substantial additional capital to fund our operations and to develop and commercialize our products. We may need to sell equity securities or borrow funds in order to develop these growth strategies and our inability to raise the additional capital and/or borrow the funds needed to implement these plans may adversely affect our business and future growth.
 
 
15

 
 
Our future capital requirements may be substantial and will depend on many factors including:
 
 
our clinical trial results;
 
 
the cost, timing and outcomes of seeking marketing approval of our products;
 
 
the cost of filing and prosecuting patent applications and the cost of defending our patents;
 
 
the cost of prosecuting infringement actions against third parties;
 
 
subject to receipt of marketing approval, revenue received from sales of approved products, if any, in the future;
 
 
any product liability or other lawsuits related to our products;
 
 
the expenses needed to attract and retain skilled personnel; and
 
 
the costs associated with being a public company.
 
Based on our current operating plan, we anticipate that the net proceeds of this offering, assuming the sale of all of the common stock we are offering, together with our existing resources, will be sufficient to enable us to maintain our currently planned operations, including our continued product development, at least through January 30, 2017.
 
Raising capital in the future could cause dilution to our existing shareholders, and may restrict our operations or require us to relinquish rights.
 
In the future, we may seek additional capital through a combination of private and public equity offerings, debt financings and collaborations and strategic and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a shareholder. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration, strategic alliance and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates, or grant licenses on terms that are not favorable to us.
 
We depend on intellectual property and the failure to protect our intellectual property could adversely affect our future growth and success. This would have a material adverse effect on our business, financial condition and results of operations.
 
We rely on patent, trademark and copyright law, trade secret protection, and confidentiality and other agreements with employees, customers, collaborators and others to protect our intellectual property. However, some of our intellectual property is not covered by any patent or patent application, and, despite precautions, it may be possible for third parties to obtain and use our intellectual property without authorization.
 
We do not know whether any patents will be issued from pending or future patent applications or whether the scope of the issued patents is sufficiently broad to protect our technologies or processes. The patent position of biotechnology companies is generally uncertain because it involves complex legal and factual considerations. The standards applied by the United States Patent and Trademark Office and foreign patent offices in granting patents are not always applied uniformly or predictably. For example, there is no uniform worldwide policy regarding patentable subject matter or the scope of claims allowable in biotechnology and pharmaceutical patents. Consequently, patents may not issue from our pending patent applications. As such, we do not know the degree of future protection that we will have on our proprietary products and technology.
 
We endeavor to aggressively protect our technologies through patents covering compositions of matter, drug targets and aspects of mechanism of action, drug product formulation, methods of use and methods of manufacture, and trade secrets. We have filed patent applications and in-licensed others with respect to our technology both domestically and internationally and anticipate filing multiple patent applications, in the future. While we believe that we will be able to secure adequate and enforceable patent protection for our products and technologies, there is no guarantee that patent protection can be obtained, and even if it is obtained that such patent protection will ultimately be deemed valid, sufficiently enforceable, sufficient to preclude competition or not infringe upon the rights of other parties. Furthermore, the laws of some foreign countries may not protect intellectual property rights to the same extent as do the laws of the United States and Denmark.
 
 
16

 
 
The patents protecting our proprietary technologies expire after a period of time. Currently, our patents have expiration dates ranging from 2021 through 2024. Although we have attempted to incorporate technology from our core patents into specific patented product applications, product designs and packaging to extend the lives of our patents, this approach may not be successful in protecting our proprietary technology. If we are not successful in protecting our proprietary technology, it could have a material adverse effect on our business, financial condition and results of operations.
 
We may not be successful in protecting our proprietary rights. Any infringement upon our intellectual property rights could have an adverse effect on our ability to develop our products and sell them commercially.
 
Issued patents covering one or more of our product candidates could be found invalid or unenforceable if challenged in court. If that were to happen, our business would be adversely impacted.
 
If we were to initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that our patent is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the U.S. Patent and Trademark Office, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on one or more of our product candidates or certain aspects of our platform technology. Such a loss of patent protection could have a material adverse impact on our business.
 
We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing our products.
 
Our commercial success depends significantly on our ability to operate without infringing the patents and other intellectual property rights of third parties. For example, there could be issued patents of which we are not aware that our products infringe. There also could be patents that we believe we do not infringe, but that we may ultimately be found to infringe. Moreover, patent applications are in some cases maintained in secrecy until patents are issued. The publication of discoveries in the scientific or patent literature frequently occurs substantially later than the date on which the underlying discoveries were made and patent applications were filed. Because patents can take many years to issue, there may be currently pending applications of which we are unaware that may later result in issued patents that our products infringe. For example, pending applications may exist that provide support or can be amended to provide support for a claim that results in an issued patent that our product infringes.
 
Third parties may assert that we are employing their proprietary technology without authorization. If a court held that any third-party patents are valid, enforceable and cover our products or their use, the holders of any of these patents may be able to block our ability to commercialize our products unless we obtained a license under the applicable patents, or until the patents expire. We may not be able to enter into licensing arrangements or make other arrangements at a reasonable cost or on reasonable terms. Any inability to secure licenses or alternative technology could result in delays in the introduction of our products or lead to prohibition of the manufacture or sale of products by us.
 
Unfavorable outcomes in intellectual property litigation could limit our research and development activities and/or our ability to commercialize certain products.
 
If third parties successfully assert intellectual property rights against us, we might be barred from using certain aspects of our technology, or barred from developing and commercializing certain products. Prohibitions against using certain technologies, or prohibitions against commercializing certain products, could be imposed by a court or by a settlement agreement between us and a plaintiff. In addition, if we are unsuccessful in defending against allegations of patent infringement or misappropriation of trade secrets, we may be forced to pay substantial damage awards to the plaintiff. There is inevitable uncertainty in any litigation, including intellectual property litigation. There can be no assurance that we would prevail in any intellectual property litigation, even if the case against us is weak or flawed. If litigation leads to an outcome unfavorable to us, we may be required to obtain a license from the patent owner, in order to continue our research and development programs or to market our product(s). It is possible that the necessary license will not be available to us on commercially acceptable terms, or at all. This could limit our research and development activities, our ability to commercialize certain products, or both.
 
 
17

 
 
Most of our competitors are larger than we are and have substantially greater resources. They are, therefore, likely to be able to sustain the costs of complex patent litigation longer than we could. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our internal research programs, in-license needed technology, or enter into strategic partnerships that would help us bring our product candidates to market.
 
In addition, any future patent litigation, interference or other administrative proceedings will result in additional expense and distraction of our personnel. An adverse outcome in such litigation or proceedings may expose us or any future collaborators to loss of our proprietary position, expose us to significant liabilities, or require us to seek licenses that may not be available on commercially acceptable terms, if at all.
 
Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.
 
As is the case with other pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity. Therefore, obtaining and enforcing pharmaceutical patents is costly, time-consuming and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform legislation. The United States Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the U.S. PTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.
 
Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information.
 
In addition to patents, we rely on other methods to protect our trade secrets, technical know-how, and proprietary information. In the course of our research and development activities and our business activities, we often rely on confidentiality agreements to protect our proprietary information. Such confidentiality agreements are used, for example, when we talk to vendors of laboratory or clinical development services or potential collaborators. We take steps to protect our proprietary information, and our confidentiality agreements are carefully drafted to protect our proprietary interests. Nevertheless, there can be no guarantee that an employee or an outside party will not make an unauthorized disclosure of our proprietary confidential information. This might happen intentionally or inadvertently. It is possible that a competitor will make use of such information in spite of any legal action we might take against persons making such unauthorized disclosures.
 
Trade secrets are difficult to protect. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, or outside collaborators might intentionally or inadvertently disclose our trade secret information to competitors. Enforcing a claim that a third party illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States sometimes are less willing than U.S. courts to protect trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.
 
Foreign currency fluctuations could adversely impact financial performance.
 
Our reporting currency is the United States dollar. Because of our activities in Denmark, the United Kingdom and continental Europe, we are exposed to fluctuations in foreign currency rates. We may manage the risk to such exposure by entering into foreign currency futures and option contracts. Foreign currency fluctuations may have a significant effect on our operations in the future.
 
 
18

 
 
 Assuming that our vaccine candidates receive regulatory approval and we begin sales of these products, our results may fluctuate due to certain regulatory, marketing and competitive factors over which we have little or no control.
 
Assuming that our vaccine candidates receive regulatory approval and we begin the sale of these products, the factors listed below, some of which we cannot control, may cause our revenue and results of operations to fluctuate significantly:
 
 
Actions taken by regulatory bodies relating to the verification, registration or health effects of our products.
 
The extent to which existing and newly developed products obtain market acceptance.
 
The timing and size of customer purchases.
 
Customer concerns about the stability of our business, which could cause them to seek alternatives to our solutions and products; and
 
Increases in raw material costs.
 
We will incur significant costs as a result of operating as a public company, and our management may be required to devote substantial time to compliance initiatives.
 
As a public company, we will incur significant legal, accounting and other expenses which we estimate to be in excess of $300,000 annually. In addition, the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC, have imposed various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls as well as mandating certain corporate governance practices. Our management and other personnel will devote a substantial amount of time and financial resources to these compliance initiatives.
 
 If we fail to staff our accounting and finance function adequately, or maintain internal control systems adequate to meet the demands that are placed upon us as a public company, we may be unable to report our financial results accurately or in a timely manner and our business and stock price, assuming that a market for our stock develops, may suffer. The costs of being a public company, as well as diversion of management’s time and attention, may have a material adverse effect on our future business, financial condition and results of operations.
 
A significant portion of our assets and the majority of our officers and directors are located outside of the United States and therefore it may be difficult for an investor to enforce within the United States any judgments obtained against us or such officers and directors.
 
A significant portion of our assets are located outside of the United States. In addition, the majority of our officers and directors are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for an investor to effect service of process or enforce within the United States any judgments obtained against us or such officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. In addition, there is uncertainty as to whether the courts of other jurisdictions would recognize or enforce judgments of United States courts obtained against us or our directors and officers predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in other jurisdictions against us, or such officers and directors predicated upon the securities laws of the United States or any state thereof.
 
RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
 
There is currently no trading market for our common stock and we cannot guarantee you that a trading market will develop. You may be unable to sell your shares of our common stock if you need to liquidate your investment.
 
Our shares of common stock are not currently registered under the securities laws of any state or other jurisdiction, and accordingly there is no public trading market for our common stock. Further, we cannot guarantee you that a public trading market will develop in the foreseeable future. Currently, outstanding shares of our common stock cannot be offered, sold, pledged or otherwise transferred unless registered pursuant to, or exempt from registration under, the Securities Act and any other applicable federal or state securities laws or regulations. Compliance with the criteria for securing exemptions under federal securities laws and the securities laws of the various states is extremely complex. If you purchase shares of our common stock, there may be no market in which to sell them if you need to liquidate your investment in the future or the transfer or sale you wish to make may not comply with federal or state securities laws and would, therefore, be prohibited.
 
 
19

 
 
If a public market for our common stock develops, it may be volatile. This may affect the ability of our investors to sell their shares as well as the price at which they sell their shares.
 
If a market for our common stock develops, the market price for shares of our common stock may be significantly affected by factors such as variations in quarterly and yearly operating results, general trends in the biotechnology industry, and changes in state or federal regulations affecting us and our industry.
Furthermore, in recent years the stock market has experienced extreme price and volume fluctuations that are unrelated or disproportionate to the operating performance of the affected companies. Such broad market fluctuations may adversely affect the market price of our common stock, if a market for it develops.
 
As an “emerging growth company” under the JOBS Act, we are permitted to rely on exemptions from certain disclosure requirements.
 
We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to and may rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:
 
 
have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
 
 
comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);
 
 
submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay”, “say-on-frequency” and “say-on-golden parachute;” and
 
 
disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive’s compensation to median employee compensation.
 
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are not choosing to “opt out” of this provision. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
 
We will remain an “emerging growth company” until the last day of our fiscal year following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration under the Securities Act, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
 
Until such time, however, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
 
We have never paid dividends on our common stock.
 
We have never paid dividends on our common stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for payment of dividends will be re-invested into the Company to further its business strategy. Because we do not anticipate paying dividends in the future, the only opportunity for our stockholders to realize the creation of value in our common stock will likely be through a sale of those shares.
 
 
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The offering is being made on a best efforts basis with no minimum amount of shares required to be sold for the offering to proceed. If we are unable to raise the funds we need to fully implement our business plan, investors who participate in the offering may lose their entire investment.
 
In order to fully implement our business plan, we must raise $12,000,000 from this offering. However, our offering is being made on a best efforts basis with no minimum amount of shares required to be sold for the offering to proceed. If we raise only a nominal amount of proceeds we would likely be unable to implement our business plan, we may have to suspend or cease operations and investors who participate in this offering may lose their entire investments.
 
We arbitrarily determined the price of the common stock we are offering.
 
We determined the offering price of the common stock we are offering. The offering price does not bear any direct relationship to the value of our physical assets, the book value of our common stock, or any other generally accepted criteria of valuation. The price and other terms were based on a number of factors including, without limitation, estimates of our business potential and earnings prospects and the consideration of such potential earnings in relation to market valuations of comparable companies. The offering price is not an indication of the actual value of our common stock at the time of this offering.
 
Furthermore, if a market for our common stock develops, the price of our common stock following this offering may be highly volatile as the securities of emerging businesses often are. Factors such as our financial results and the introduction of new products by us or by our competitors, and various factors affecting the biotechnology industry generally, may have a significant impact on the market price of our securities. Additionally, in recent years, the stock market has experienced a high level of price and volume volatility and market prices for the securities of many companies, particularly of small and emerging growth companies, the common stock of which trade in the over-the-counter market, have experienced wide price fluctuations which have not necessarily been related to the operating performance of these companies.
 
We have the right to issue shares of preferred stock. If we were to issue preferred stock, it is likely to have rights, preferences and privileges that may adversely affect the common stock.
 
We are authorized to issue 10,000,000 shares of “blank check” preferred stock, with such rights, preferences and privileges as may be determined from time-to-time by our board of directors. No preferred stock is currently issued and outstanding. Our board of directors is empowered, without stockholder approval, to issue preferred stock in one or more series, and to fix for any series the dividend rights, dissolution or liquidation preferences, redemption prices, conversion rights, voting rights, and other rights, preferences and privileges for the preferred stock. No shares of preferred stock are presently issued and outstanding and we have no immediate plans to issue shares of preferred stock. The issuance of shares of preferred stock, depending on the rights, preferences and privileges attributable to the preferred stock, could adversely reduce the voting rights and powers of the common stock and the portion of the Company’s assets allocated for distribution to common stockholders in a liquidation event, and could also result in dilution in the book value per share of the common stock being offered. The preferred stock could also be utilized, under certain circumstances, as a method for raising additional capital or discouraging, delaying or preventing a change in control of the Company, to the detriment of the investors in the common stock being offered. We cannot assure you that the Company will not, under certain circumstances, issue shares of its preferred stock.
 
We may use the net proceeds from this offering in ways which differ from our estimates and with which you may not agree.
 
The discussion titled “Use of Proceeds”, which appears elsewhere in this prospectus, sets forth the way in which we expect to use the net proceeds of this offering. The discussion represents our estimates based upon our current plans, assumptions regarding industry and general economic conditions, and our anticipated future revenues and expenditures. The amounts and timing of our actual expenditures will depend on numerous factors, including market conditions, cash generated by our operations, business developments and the rate of our growth. We may find it necessary or advisable to use portions of the proceeds from this offering for purposes other than those stated in the Use of Proceeds discussion. Circumstances that may give rise to a change in the use of proceeds and the alternate purposes for which the proceeds may be used are also discussed in the section of this prospectus titled “Use of Proceeds”. You will not have an opportunity to evaluate the economic, financial or other information on which we base our decisions on how to use our proceeds. As a result, you and other shareholders may not agree with the decisions made by our management relating to the way in which the proceeds from this offering are used. See the discussion titled “Use of Proceeds” for additional information.
 
 
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You will experience immediate dilution in the book value per share of the common stock you purchase.
 
Because the price per share of our common stock being offered is substantially higher than the book value per share of our common stock, you will experience substantial dilution in the net tangible book value of the common stock you purchase in this offering. Based on an assumed offering price of $ per share, if you purchase shares of common stock in this offering, you will experience immediate and substantial dilution of $ per share in the net tangible book value of the common stock at September 30, 2013. See the section titled “Dilution” below for a more detailed discussion of the dilution you will incur if you purchase common stock in this offering.
 
 
Penny stock regulations may impose certain restrictions on the marketability of our securities.
 
The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $ per share, subject to certain exceptions. Our common stock is presently subject to these regulations which impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000, excluding the net value of the person’s primary residence, or annual income exceeding $200,000, or $300,000 together with the investor’s spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a “penny stock”, unless exempt, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the SEC relating to the “penny stock” market. The broker-dealer must also disclose the commission payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the “penny stock” held in the account and information on the limited market in “penny stocks”. Consequently, the “penny stock” rules may restrict the ability of broker-dealers to sell our securities and may negatively affect the ability of purchasers of our shares of common stock to sell such securities.
 
 
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
 
This prospectus contains forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may” or other similar expressions in this prospectus. These statements may be found in the sections of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business”, as well as in this prospectus generally. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
 
 
future financial and operating results, including projections of revenues, income, expenditures, cash balances and other financial items;
 
our capital requirements and the need for additional financing;
 
our ability to protect our intellectual property rights and secure the right to use other intellectual property that we deem to be essential to the conduct of our business;
 
our ability to execute our growth, expansion and acquisition strategies;
 
current and future economic and political conditions;
 
overall industry and market performance;
 
competition;
 
management’s goals and plans for future operations; and
 
other assumptions described in this prospectus underlying or relating to any forward-looking statements.
 
We describe material risks, uncertainties and assumptions that could affect our business, including our financial condition and results of operations, under “Risk Factors.” We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Reference is made in particular to forward-looking statements regarding growth strategies, financial results, product development, competitive strengths, intellectual property rights, litigation, mergers and acquisitions, market acceptance or continued acceptance of our products, accounting estimates, financing activities, ongoing contractual obligations and sales efforts. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this prospectus, whether as a result of new information, future events, changes in assumptions, or otherwise.
 
 
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Based on an initial public offering price of $ per share, after deducting commissions and estimated offering expenses payable by us, we estimate that we will receive up to $5,265,464 in net proceeds from the sale of          of shares of our common stock in this offering and up to $10,785,464 in net proceeds from the sale of            the maximum number of shares of common stock in this offering.
 
We intend to use the proceeds from this offering to conduct the Phase IIb/III clinical trial with MCV. All remaining proceeds will be used for working capital and general corporate purposes.
 
If we are unable to raise net proceeds equal to at least $10.7 million, we intend to first apply any proceeds raised towards the clinical trial. However, to the extent that we are unable to raise a sufficient amount of proceeds in this offering, we may not be able to achieve all our business objectives in a timely manner.
 
Pending any ultimate use of any portion of the proceeds from this offering, we intend to invest the proceeds in a variety of capital preservation investments, including short-term, interest-bearing instruments such as United States government securities and municipal bonds.
 
The anticipated use of proceeds for the offering funds is summarized below.
 
USD
 
Year 1
   
Year 2
   
Year 3
   
Total
 
Manufacturing
   
230,000
     
285,000
     
315,000
     
830,000
 
                                 
General & Administrative expenses
   
975,000
     
978,000
     
981,000
     
2,934,000
 
                                 
Clinical trial costs
   
1,858,000
     
2,430,000
     
2,730,000
     
7,018,000
 
                                 
Total
   
3,063,000
     
3,693,000
     
4,026,000
     
10,782,000
 
 
The amounts and timing of our actual expenditures will depend on numerous factors, including market conditions, results from our research and development efforts, business developments and opportunities and the rate of our growth, sales and marketing activities and competition. Accordingly, our management will have broad discretion in the application of the net proceeds, and investors will be relying on the judgment of our management regarding the application of the proceeds from this offering. We may find it necessary or advisable to use portions of the proceeds from this offering for other purposes. Circumstances that may give rise to a change in the use of proceeds and the alternate purposes for which the proceeds may be used include:
 
the existence of unforeseen or other opportunities or the need to take advantage of changes in the timing of our existing activities;
 
the need or desire on our part to accelerate, increase, reduce or eliminate one or more existing initiatives due to, among other things, changing market conditions and competitive developments or interim results of research and development efforts;
 
results from our business development and marketing efforts, including opportunities that may materialize;
 
the effect of federal, state, and local regulation on us and on our identified industries;
 
our ability to attract development funding or to license or sell our vaccine candidates; and/or
 
the presentation of strategic opportunities of which we are not currently aware (including acquisitions, joint ventures, licensing and other similar transactions).
 
From time to time, we evaluate these and other factors and we anticipate continuing to make such evaluations to determine if the existing allocation of resources, including the proceeds of this offering, is being optimized.
 
 
24

 
 
 
We do not intend to declare or pay dividends on our common stock in the foreseeable future. Instead, we generally intend to invest any future earnings in our business. Subject to Delaware law, our board of directors will determine the payment of future dividends on our common stock, if any, and the amount of any dividends in light of:
 
 
any contractual restrictions limiting our ability to pay dividends that may be applicable at such time;
 
 
our earnings and cash flow;
 
 
our capital requirements;
 
 
our financial condition; and
 
 
other factors our board of directors deems relevant.
 
 
25

 
 
 
The table below sets forth our cash and cash equivalents and capitalization, each as of September 30, 2013:
 
 
on an actual basis;
 
on an as adjusted basis giving effect to the issuance of $6,000,000 (       shares) of common stock in this offering; and
 
on an as adjusted basis giving effect to the issuance of the maximum of $12,000,000 (         shares) of common stock in this offering.
 
You should consider this table in conjunction with our financial statements and the notes thereto included elsewhere in this prospectus.
 
  
 
Actual
 
As Adjusted
$6 Million
Offering(1)
 
As Adjusted
Maximum
Offering(2)
Cash and cash equivalents
 
$
36,976
     
5,302,440
     
10,822,440
 
Loans payable – related party
   
38,235
     
38,235
     
38,235
 
Notes payable - related party, current portion
   
726,482
     
237,361
     
237,361
 
Accounts payable and accrued liabilities
   
677,581
     
677,581
     
67,581
 
                         
Total Debt obligations and payables
   
1,442,998
     
1,442,998
     
1,442,998
 
STOCKHOLDERS’ EQUITY:
   
  
     
  
     
  
 
Common stock; par value 0.0001 DKK, 100,000,000 shares authorized,
8,040,000 shares issued and outstanding at September 30, 2013
   
804
     
 924
     
      1,044
 
Additional Paid-in Capital
   
17,553,949
     
  22,819,293
     
28,339,173
 
Other Comprehensive Income, net
   
55,703
     
         55,703
     
     55,703
 
Non-controlled Interest in Subsidiaries
   
-
  
   
-
  
   
-
  
Accumulated Deficit
   
(18,828,449
)
   
    (18,828,449
)
   
(18,828,449
)
                         
Total Stockholders’ Equity
   
(1,053,969
)    
  4,046,547
     
9,556,427
 
                         
Total Capitalization
   
(1,405,322
)    
3,695,194
     
9,205,074
 
 
(1) Assumes that $6,000,000 (_______ shares) of our common stock are sold in this offering at an offering price of $   per share and that the net proceeds thereof are approximately $5,265,464, after deducting the placement agent’s commissions and our estimated offering expenses of $254,536.
 
(2) Assumes that $12,000,000 (_______ shares) of our common stock are sold in this offering at an offering price of $   per share and that the net proceeds thereof are approximately $10,785,464, after deducting the placement agent’s commissions and our estimated offering expenses of $254,536.
 
 
26

 
 
 
Purchasers of the shares of our common stock offered by this prospectus will suffer immediate and substantial dilution in the net tangible book value per share of our common stock. Our net tangible book value (unaudited) as of September 30, 2013, was a deficit of approximately $1,052,079, or $0.13 per share. Net tangible book value per share is calculated by subtracting our total liabilities from our total tangible assets, which is total assets less intangible assets, and dividing this amount by the number of shares of common stock outstanding as of September 30, 2013.
 
Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers in this offering and the as adjusted net tangible book value per share of our common stock immediately after this offering.
 
Assuming that we complete this offering for a total of $6,000,000 (___ shares) of our common stock at a price of $        per share, and after deducting the Placement Agent’s commission and estimated offering expenses payable by us, our as adjusted net tangible book value as of September 30, 2013 would have been approximately $    , or $   per share. This represents an immediate increase in the net tangible book value of $   per share to our existing stockholders and an immediate dilution in net tangible book value of $   per share to the investors in this offering. The following table illustrates this per share dilution based on the completion of this offering at the minimum level:
 
Price per share to the investor
        $    
Net tangible book value per share as of September 30, 2013
  $ (0.13 )        
Increase in net tangible book value per share attributable to this offering at the minimum level
  $            
As adjusted net tangible book value per share as of September 30, 2013 after giving effect to this offering at the minimum level
          $    
Dilution in net tangible book value per share to the new investor
          $    
 
Assuming that we complete this offering at the maximum level of $12,000,000 (___ shares) of our common stock at a price of $   per share, and after deducting the Placement Agent’s commission and estimated offering expenses payable by us, our as adjusted net tangible book value as of September 30, 2013 would have been approximately $   , or $   per share. This represents an immediate increase in the net tangible book value of $   per share to our existing stockholders and an immediate dilution in net tangible book value of $   per share to the investor in this offering. The following table illustrates this per share dilution based on the completion of this offering at the maximum level:
 
Price per share to the investor
        $    
Net tangible book value per share as of September 30, 2013
  $ (1,052,079 )        
Increase in net tangible book value per share attributable to this offering at the maximum level
  $            
As adjusted net tangible book value per share as of September 30, 2013 after giving effect to this offering at the maximum level
          $    
Dilution in net tangible book value per share to the new investor
          $    
 
The above table is based on 7,854,945 shares of our common stock outstanding as of February 12, 2014 and excludes, as of that date, any shares that may be issued upon the exercise of the placement agent’s over-allotment option.
 
The shares of common stock issuable upon the exercise of our outstanding warrants and the exercise price in respect thereof are subject to adjustment in certain circumstances.
 
To the extent that any options or warrants are exercised, new options are issued, any new stock option or stock incentive plans are adopted or we otherwise issue additional shares of common stock in the future, there will be further dilution to investors in this offering.
 
 
27

 
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See “Disclosure Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.
 
Overview
 
We are a biotechnology company committed to developing the world’s first vaccine against colorectal cancer. For more than a decade, we have developed and patented compounds successfully used in initial clinical trials in Europe and Asia. We expect to continue our clinical development program in the United States, Europe and Asia. Springing from academic roots in the Danish Cancer Society, we have built upon our scientific and medical skills to advance a number of candidate therapies, targeted initially at non-small-cell-lung-cancer (NSCLC) and colorectal-cancer (CRC). On September 22, 2008, MCV was authorized by the Singapore government for named patient compassionate use of MelCancerVac ™ (MCV) for CRC. We have conducted three single-arm Phase II clinical trials in cancer where our dendritic cell vaccine, MCV demonstrated efficacy. The three clinical trials generated data indicating prospects in a larger and different clinical setting. More specifically, this efficacy data needed to be confirmed in a comparative randomized trial with advanced colorectal cancer patients.
 
As a result, DanDrit Denmark, with the assistance of key opinion leaders in colorectal cancer treatment, has designed a randomized trial with 174 stage IV colorectal cancer patients after surgical resection and chemotherapy. Using an adaptive design clinical study that includes a prospectively planned opportunity for modification of one or more specified aspects of the study design and hypotheses based on analysis of data (usually interim data) from subjects in the study (an “Adaptive Design Clinical Study”), we significantly reduced the cost and duration of a Phase IIb/III study and we believe we can complete the study within three years.
 
Share Exchange
 
DanDrit was incorporated in Delaware on January 18, 2011 under the name “Putnam Hills Corp.” as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. We filed a Registration Statement on Form 10 with the U.S. Securities and Exchange Commission (the “SEC”) on August 12, 2011.
 
On February 12, 2014, the Company signed and closed the transactions contemplated by a Share Exchange Agreement (the "Share Exchange Agreement"), by and among DanDrit USA (formerly known as Putnam Hills Corp.), Dandrit Denmark and N.E. Nielsen, as the representative of the shareholders of DanDrit Denmark, pursuant to which the holders of approximately 97% of the issued and outstanding capital stock of DanDrit Denmark (the “DanDrit Consenting Holders”) agreed to exchange an aggregate of 3,879,624 equity interests of Dandrit Denmark for 5,814,945 shares of DanDrit USA (the “Share Exchange”) and as a result of which Putnam would become the parent of DanDrit Denmark. Following the closing of the Share Exchange, in accordance with Section 70 of the Danish Companies Act and the Articles of Association of Dandrit Denmark, DanDrit USA will offer to any Dandrit Denmark shareholder that has not consented to the Share Exchange (the “Non-Consenting Shareholders”) and therefore has not exchanged such Dandrit Denmark shareholder’s equity interests in DanDrit Denmark for shares of DanDrit USA, the pro rata portion of the number of shares of DanDrit USA such DanDrit Denmark shareholder would have been entitled to if such DanDrit Denmark shareholder had consented to the Share Exchange, up to an aggregate of 6,000,000 shares of DanDrit USA, including those issued to the DanDrit Consenting Holders at closing. Any remaining shares of DanDrit USA that have not been issued to the Dandrit Consenting Shareholders at the closing, or to the Non-Consenting Shareholders following the closing, shall be distributed pro rata among the shareholders of DanDrit Denmark that have received shares of DanDrit USA based on the number of shares of DanDrit USA issued to such shares of DanDrit Denmark in connection with the Share Exchange and the Share Exchange Agreement.
 
Upon the closing of the Share Exchange, DanDrit USA and the its majority shareholder immediately prior to the closing agreed to cancel up to 4,400,000 share of common stock.  In addition, following the closing of the Share Exchange, the wholly owned subsidiary of the company formed solely for the purposes of changing the company’s name, Dandrit Biotech USA, Inc., merged with and into the company and the company adopted the name of its wholly owned subsidiary “DanDrit Biotech USA, Inc.”
 
DanDrit USA owns approximately 97% of the outstanding equity interests of DanDrit Denmark. As a result of the Share Exchange, we changed our management and reconstituted our board of directors. As of the effective time of the Share Exchange, Samir Masri, the Chief Executive Officer, Chief Financial Officer, President, Secretary and sole director of Putnam resigned as the sole officer and director of the company and appointed NE Nielsen, Dr. Jacob Rosenberg, Dr. Eric Leire, Aldo Petersen and Robert E. Wolfe as directors of Putnam, and Dr. Eric Leire as Chief Executive Officer and President and Mr. Wolfe as Chief Financial Officer.
 
 
28

 
 
Recent Developments
 
Negotiation with Etablissement Francais du Sang (EFS) regarding the GeniusVac Technology
 
DanDrit has recently entered into a negotiation with the Etablissement Francais du Sang (EFS) regarding access to their GeniusVac Technology. The GeniusVac technology is an Allogenic irradiated plasmacytoid dendritic cell line. This technology may allow DanDrit to develop a 100% off-the-shelf cancer vaccine. DanDrit has conducted and completed due diligence under CDA. DanDrit USA and EFS are now working on a feasibility proof-of-concept test before establishing further collaboration.
 
Trends, Events and Uncertainties
 
A large pharmaceutical company, GSK is developing a MAGE-A3 cancer vaccine in melanoma and non-small cell lung cancer (NSCLC). GSK is in the midst of Phase III trials testing its vaccine candidate against NSCLC. This NSCLC clinical trial is the largest clinical trial ever conducted to assess the efficacy of a cancer vaccine. GSK enrolled 2,700 patients and will publish the results by the end of Q1 2014. Because GSK and DanDrit are the only two companies currently targeting MAGE-A cancer specific antigens, we believe that positive results from the NSCLC clinical trial may significantly increase interest in the vaccines we are developing.
 
 
29

 
 
Results of Operations
 
Nine months ended September 30, 2013 compared to the nine months ended September 30, 2012
 
The following table sets forth our revenues, expenses and net income for the nine month periods ended September 30, 2013 and 2012. The financial information below is derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus.
 
       
   
For the Nine Months Ended
September 30,
 
   
2013
   
2012
 
Net Sales
  $ 32,483     $ 60,544  
                 
Cost of Goods Sold
    68,486       51,087  
                 
Gross Loss
    (36,003 )     9,457  
Operating Expenses:
               
General and administrative expenses
    573,777       825,306  
Depreciation and Amortization
    24,566       47,431  
Consulting expenses
    128,191       705,350  
                 
Total Operating Expense
    726,534       1,578,087  
                 
Loss from Operations
    (762,537 )     (1,568,630 )
Other Income (Expense)
               
Interest (expense)
            (490,948 )
Gain on forgiveness of debt
    (546,057 )     -  
Gain (loss) on currency transactions
    48,589       (76,960 )
Gain on derivative liability
    8,745       103,603  
Gain on sale of fixed assets
    136,697       15,073  
      -          
Total Other Income (Expense)
    (352,026 )     (449,233 )
                 
Loss Before Income Taxes
    (1,114,563 )     (2,017,862 )
Income Tax Expense (Benefit)
            -  
Net Loss
    (1,114,563 )     (2,017,862 )
Basic Loss Per Share
  $ (0.31 )   $ (0.57 )
                 
Weighted Average Common
               
Shares Outstanding
    3,548,172       3,548,172  
                 
Diluted Loss Per Share
  $ (0.31 )   $ (0.57 )
Weighted Average Common Shares
               
Outstanding Assuming Dilution
    3,548,172       3,548,172  
 
 
30

 
 
Comparison of the nine month periods ended September 30, 2013 and September 30, 2012
 
Revenues
 
Net sales for the nine month period ended September 30, 2013 was $32,483 compared to $60,544 for the same period in 2012, representing a decrease of $28,061, or 46.3%. The decrease was mainly due to lower supply of lysate to NCC Singapore from DanDrit Denmark. This reduced capability to supply NCC Singapore with lysate is explained by the transfer of the cGMP grade lysate production to the CMO, PX Therapeutics. The transfer of manufacturing technology has been successful and DanDrit Denmark should now be able to supply NCC with larger quantities of cGMP lysate.
 
Cost of Goods Sold
 
Cost of goods sold for the nine month period ended September 30, 2013 was $68,486 compared to $51,087 for the same period in 2012, representing an increase of $17,399 or 34%. The increase was due to additional costs of technology transfer of lysate manufacturing.
 
Gross Loss
 
Gross loss for the nine month period ended September 30, 2013 was $36,003 compared to gross profit of $9,457 for same period in 2012, representing a decrease of $45,460, or 480.7%. The decrease was mainly due to lower sales and higher cost of goods sold for the nine month period ended September 30, 2013compared to the nine month period ended September 30, 2012. The gross profit margin for the nine month period ended September 30, 2013 was (110.8)% compared to 15.6 % for the nine month period ended September 30, 2012.
 
Expenses
 
Total operating expenses for the nine month period ended September 30, 2013 was $726,534, representing a decrease of $851,553, or 54.0%, compared to $1,578,087 for the same period in 2012. The largest contributors to the decrease in operating expenses was a decrease in consulting expenses which went from $705,350 for the nine month period ended September 30, 2012 to $128,191 for the nine month period ended September 30, 2013 a decrease of $577,159 or 81.8%. During the period ended September 30, 2012, we retained several consultants to assist us with the preparation of this prospectus.
 
General and administrative expenses for the nine month period ended September 30, 2013 was $573,577 compared to $825,306 for the same period in 2012, representing a decrease of $251,729, or 30.5%. The decrease is mainly due to general cost savings of no longer writing a prospectus and valuing DanDrit Denmark. General and administrative expenses are comprised primarily of office rental, website management and insurance.
 
Net Loss
 
Net loss attributable to the Company for the nine month period ended September 30, 2013 was $1,114,563 compared to a net loss of $2,017,862 for the comparable period in 2012, representing a decrease of $903,299, or 44.8%. This decrease was primarily attributable to a decrease in total operating expenses of $851,553 from $1,578,087 for the nine month period ended September 30, 2012 to $726,534 for the nine month period ended September 30, 2013.
 
 
31

 

Year-ended December 31, 2012 compared to the year-ended December 31, 2011
 
The following table sets forth our revenues, expenses and net income for the years ended December 31, 2012 and 2011. The financial information below is derived from our audited consolidated financial statements included elsewhere in this prospectus.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
                 
   
FOR THE YEAR ENDED
 
   
DECEMBER 31,
 
   
2012
   
2011
 
Net Sales
  $ 62,806       72,013  
                 
Cost of Goods Sold
    64,385       85,494  
                 
Gross Loss
    (1,579 )     (13,481 )
                 
Operating Expenses:
               
General and administrative expenses
    1,036,005       376,944  
Depreciation and Amortization
    56,600       200,251  
Consulting expenses
    829,845       573,098  
                 
Total Operating Expense
    1,922,450       1,150,293  
                 
Loss from Operations
    (1,924,029 )     (1,163,774 )
                 
Other Income (Expense)
               
Interest (expense)
    (704,911 )     (441,598 )
 Gain (loss) on currency transactions
    32,841       (69,391 )
 Gain on derivative liability
    153,430       10,583  
 Gain on sale of fixed assets
    15,020       -  
                 
Total Other Income (Expense)
    (503,620 )     (500,406 )
Loss Before Income Taxes
    (2,427,649 )     (1,664,180 )
                 
Income Tax Expense (Benefit)
    -       -  
                 
                 
Net Loss
  $ (2,427,649 )   $ (1,664,180 )
                 
Basic Earnings Per Share
  $ (0.68 )   $ (0.62 )
Weighted Average Common
               
Shares Outstanding
    3,548,172       2,702,055  
                 
Diluted Earnings Per Share
  $ (0.68 )   $ (0.62 )
Weighted Average Common Shares
    3,548,172       2,702,055  
 
 
32

 
 
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS
 
             
   
DECEMBER 31,
 
   
2012
   
2011
 
             
Net Loss
  $ (2,427,649 )   $ (1,664,180 )
                 
Equity Adjustment for foreign Currency Translation
    85,701       (273,981 )
                 
Other Comprehensive Loss
  $ (2,341,948 )   $ (1,938,161 )
 
Revenues
 
Our net sales for the year ended December 31, 2012 were $62,806 compared to net sales of $72,013 for the year ended December 31, 2011, representing a year over year decrease in sales of $9,207 or 12.8%. This decrease was due primarily to a small decline in the use of our cell lysate in Singapore for the Compassionate Use Program.
 
Cost of Goods Sold
 
Our cost of goods sold declined by $21,209 or 24.7% during the year ended December 31, 2012, to $64,385, from $85,494 in cost of goods sold for the year ended December 31, 2011. The decrease in cost of goods sold was due primarily to the fact that the cell lysate we sold to Singapore during the year ended December 31, 2012 was prepared in 2011, therefore we had no preparation costs related to it.
 
Gross Loss
 
Gross loss for the year ended December 31, 2012 was $1,579 compared to a loss of $13,481 for same period in 2011, representing a decrease in the loss of $11,902, or 88.3%. The decrease in the loss was mainly attributable to the decrease in cost of goods sold for the year ended December 31, 2012.
 
Expenses
 
Our total operating expense for the year ended December 31, 2012 was $1,922,450, representing an increase of $772,157, or 67.1% compared to $1,150,293 for the year ended December 31, 2011. This increase is mainly due to our increased spending on general and administrative expenses.
 
General and administrative expense for the year ended December 31, 2012 was $1,036,005 compared to $376,944 for the year ended December 31, 2011, representing an increase of $659,061, or 195.6%. This increase was due primarily to costs associated with the audit of our financial statements and the conversion of our financial statements to international financial reporting standards. General and administrative expenses include office rental, website management and insurance, salary and payment for assistance with drafting of this prospectus and having the Company valued. Expenses related to assistance with drafting of this prospectus and having the Company valued are the main reasons for the increased spending on general and administrative expenses.
 
Consulting expenses for the year ended December 31, 2012 totaled $829,845 compared to $573,098 for the year ended December 31, 2011, representing an increase of $256,747, or 44.8%. This increase was due primarily to an increased use of consultants in the prospectus writing process and in valuing DanDrit Denmark.
 
33

 
 
Net Loss
 
Net loss attributable to DanDrit Denmark for the year ended December 31, 2012 was $2,427,649 compared to a loss of $1,664,180 for the year ended December 31, 2011, representing an increase of $763,469, or 45.9%. This increase was attributable to a $772,157 increase in our total operating expenses.
 
The largest contributor to the increase in expenses was general and administrative expenses, which increased by $659,061or 195.6% compared to the year ended December 31, 2011 and to the increase in the consulting expenses, which increased by $256,747 or 44.8% compared to the year ended December 31, 2011.
 
Liquidity and Capital Resources
 
We have historically satisfied our capital and liquidity requirements through funding from our main shareholders and issuance of convertible notes which over time have been converted into shares of our common stock. At September 30, 2013, we had cash of $36,976 and working capital of $(2,815,424) and at December 31, 2012 we had cash of $4,381 and working capital of $(1,980,692). At September 30, 2013, our working capital decreased by $834,732 due to an increase in notes payable - related party, current portion of $1,866,478, partly offset by a decrease in accrued expenses of $1,072,418.
 
In general, lines of credit in Denmark are due on demand. We do not believe that any of our lines of credit will be called but, if they were called, we believe that we could refinance with other lenders in Denmark with similar terms. See “Description of Indebtedness” for more details on our standby lines of credit.
 
During 2012, DKTI A/S, a shareholder, agreed to loan the Company up to DKK 5,000,000 (approximately $880,000) accruing interest at 6%. The loan is secured by all the Company’s intellectual property rights, including patents and patent applications. The loan is payable with 30 days written notice but not before November 30, 2014, but may be payable without notice for 1) failure to make timely payments, 2) a breach by the Company of any other obligation under the loan agreement, 3) a declaration of bankruptcy or the consummation of a merger by the Company, and 4) a change in control of the Company or its assets to any party other than DKTI A/S.
 
During the nine months ended September 30, 2013 and the year ended December 31, 2012 the Company borrowed DKK 310,000 (approximately $55,000) plus DKK 206,212 in interest and DKK 4,431,862 ($783,139) plus DKK 71,563 ($12,646) in interest, respectfully. The notes with related accrued interest were subsequently converted into 96,288 common shares.
 
During years ended December 31, 2012 and 2011, Sune Olsen Holding ApS (Sune Olsen), an entity owned by a shareholder of the Company, loaned the Company DKK 338,719 ($59,854) and DKK 143,750 ($25,019), respectively. The note accrues interest at 6% and the Company recorded interest expense of DKK 20,469 ($3,617) and DKK 2,689 ($468) for the year and the period, respectively.  The loans are payable upon three month written notice of the shareholder. The notes with related accrued interest were subsequently converted into 9,262 common shares.

On January 18, 2013, February 15, 2013 and March 1, 2013, Sune Olsen loaned the Company an additional DKK 1,000,000, DKK 187,724 and DKK 80,000 (approximately $178,661, $33,685 and $14,075). The notes accrue interest at 6% and are payable upon three month written notice of the shareholder. The notes with related accrued interest were subsequently converted into 25,844 common shares.

On April 14, 2013, Sune Olsen acquired DKK 4,375,932 (approximately $773,000) in liabilities owed by the Company for past due rent. The liability will accrue interest at 5% and is payable on demand. The note with related interest was subsequently converted into 86,204 common shares.

On July 26, 2013 and August 15, 2013, Sune Olsen loaned the Company an additional DKK 1,000,000, ($177,239) DKK 750,000($133,343). The notes accrue interest at 5% and are payable upon three month written notice of the shareholder. The notes with related accrued interest were subsequently converted into 33,705 common shares

On June 20, 2013, Sune Olsen Holding ApS paid DKK 1,500,000, ($265,000) in accrued legal fees in exchange for a DKK 1,500,000 ($265,000) 5% note payable. The note with related accrued interest was subsequently converted into 29,036 common shares.

DanDrit Biotech A/S has received a loan facility from Sune Olsen Holding ApS ensuring financing until new equity has been brought in. Under the loan facility DanDrit has received the following amounts: On November 11, 2013 $269,620 (DKK 1,500,000), on November 20, 2013 $55,459 (DKK 405,000), on December 2, 2013 $163,482 (DKK 900,000). The loans are due May 1, 2014 and accrue interest at 5% per year.

DanDrit Biotech A/S has received a loan from Sune Olsen ensuring financing until new equity has been brought in. The loan in the amount of $184,873 (DKK 1,000,000) was issued on December 20, 2013. The loan is due May 1, 2014 and accrues interest at 5% per year.
 
We believe that our cash flow together with currently available funds from our existing lines of credit and other potential sources of funds, such as loans from shareholders, will be sufficient to fund our anticipated working capital needs and capital spending requirements for the next twelve months. However, if we were to incur any unanticipated expenditures or the positive trend of our operating cash flow does not continue, such circumstances could put a substantial burden on our cash resources.
 
We may also need additional funds for possible future strategic acquisitions of businesses, products or technologies complementary to our business. If additional funds are required, we may raise such funds from time to time through public or private sales of equity or debt securities. Financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could materially adversely impact our growth plans and our financial condition and results of operations.
 
 
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Cash Flows
 
Nine months ended September 30, 2013 compared to nine months ended September 30, 2012
 
Cash loss from operating activities for the nine month period ended September 30, 2013 was $1,806,844, representing an increase of $949,630, compared to cash loss from operating activities of $857,214 for the nine months period ended September 30, 2012. This increase was primarily due to a decrease in accrued expenses of $1,880,229 partly offset by a decrease in net loss of $903,298.
 
Changes in assets and liabilities as of September 30, 2013 compared to December 31, 2012 included the following:
 
There were no major changes in the total assets as of September 30, 2013 compared to December 31, 2012. Total liabilities increased by approx. $1.1 million as of September 30, 2013 compared to December 31, 2012. The increase was mainly due to an increase in notes payable - related party, current portion of $1,866,478 partly offset by a decrease in accrued expenses of $1,072,418.
 
Cash used in investing activities was $8,913 for the nine month period ended September 30, 2013, as compared to cash used in investing activities of $64,723 for the nine month period ended September 30, 2012. Cash used for investing activities decreased in the first nine months of 2013, compared to the first nine months of 2012, primarily due to an approximately $70,000 or 88.8% lower investment in intangible assets. Despite the decrease for the nine month period of 2013, we have, and we anticipate that we will continue to, invest in additional production equipment in order to meet the continuing increase in the demand for our products.
 
Cash provided by financing activities was $1,981,717 for the nine month period ended September 30, 2013, as compared to cash provided by financing activities of $673,746 for the nine month period ended September 30, 2012. The increase of approximately $1,307,971 in cash provided by financing activities in the first nine months of 2013, compared to the first nine months of 2012, was primarily due to cash received in connection with the issuance of related party notes.
 
Year-ended December 31, 2012 compared to the year-ended December 31, 2011
 
For the year ended December 31, 2012, cash used by operations was $933,012 compared to cash used by operations of $1,260,388 for the year ended December 31, 2011, a decrease of $327,376, or 25.97%. The increase was primarily due to an increase in accrued expenses of $1,031,915 partly offset by a decrease in net loss of $763,469.
 
For the year ended December 31, 2012, cash used by investing activities was $84,643 compared to cash used by investing activities of $29,369 for the year ended December 31, 2011, an increase of $55,274, or 188.2%. This increase was due to an increase in purchase of intangible assets of $75,510.
 
For the year ended December 31, 2012, cash provided by financing activities was $856,754 compared to cash provided by financing activities of $1,219,568 for the year ended December 31, 2011, a decrease of $362,814. This decrease was primarily due to a lack of proceeds from convertible bonds, as compared to $1,500,000 in such proceeds for the year ended December 31, 2011. The decrease was partly offset against net payments in 2011 on notes payable – related parties of $1,167,280, of which there were none in 2012.
 
Off Balance Sheet Arrangements
 
As of September 30, 2013, we had no off-balance sheet arrangements. We are not aware of any material transactions which are not disclosed in our consolidated financial statements.
 
Significant Accounting Policies and Critical Accounting Estimates
 
The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our consolidated financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Our most critical accounting estimates include:
 
 
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Property and Equipment — Property and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized, upon being placed in service. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed for financial statement purposes on a straight-line basis over the estimated useful lives of the assets which range from four to six years.
 
Intangible Assets — Definite life intangible assets include patents. The Company accounts for definite life intangible assets in accordance with Financial Accounting Standards Board, (“FASB”) Accounting Standards Codification, (“ASC”) Topic 350, “Goodwill and Other Intangible Assets” and amortized the patents on a straight line basis over the estimated useful life of twenty years. Costs incurred in relation to patent applications are capitalized costs and amortized over the estimated useful life of the patent. If it is determined that a patent will not be issued, the related remaining patent application costs are charged to expense.
 
Revenue Recognition and Sales — The Company’s sales of its MelCancerVac colorectal cancer treatment have been limited to a compassionate use basis in Singapore after stage IIA trials and the vaccine is not currently approved for sale for any other use or location. The Company accounts for revenue recognition in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (SAB 101), FASB ASC 605 Revenue Recognition. The Company recognizes revenue when rights and risk of ownership have passed to the customer, when there is persuasive evidence of an arrangement, product has been shipped or delivered to the customer, the price and terms are finalized, and collection of the resulting receivable is reasonably assured. Products are primarily shipped FOB shipping point at which time title passes to the customer.
 
Value Added Tax - In Denmark, Value Added Tax (“VAT”) of 25% of the invoice amount is collected in respect of the sales of goods on behalf of tax authorities. The VAT collected is not revenue of the Company; instead, the amount is recorded as a liability on the balance sheet until such VAT is paid to the authorities. VAT of 25% is also paid to Danish and EU vendors on invoices. These amounts are refundable from the respective governmental authority and recorded as other receivables in the accompanying financial statements.
 
Accounting Estimates — The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimated.
 
Recent Enacted Accounting Standards
 
For a description of accounting changes and recent accounting standards, including the expected dates of adoption and estimated effects, if any, on our consolidated financial statements, see “Note 1: Recently Enacted Accounting Standards” in the financial statements included elsewhere in this prospectus.
 
Quantitative and Qualitative Disclosures About Market Risk
 
We are not required to provide quantitative and qualitative disclosures about market risk because we are a smaller reporting company.
 
 
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Overview
 
We are a biotechnology company seeking to develop what we believe could be the world’s first vaccine against colorectal cancer. For more than a decade, we have developed and patented compounds successfully used in initial clinical trials in Europe and Asia. We expect to continue these trials in the United States. Springing from academic roots in Denmark, DanDrit has built upon its scientific and medical skills to advance a number of candidate therapies, targeted initially at non-small-cell-lung-cancer (NSCLC) and colorectal-cancer (CRC). On September 22, 2008, MelCancerVac ™ (MCV) was authorized by the Singapore government for a named patient compassionate use for CRC. We have conducted three single-arm Phase II clinical trials in cancer where our dendritic cell vaccine, MCV, demonstrated efficacy. The three clinical trials generated data indicating prospects in a larger and different clinical setting. More specifically, this efficacy data needed to be confirmed in a comparative randomized trial. As a result, DanDrit Denmark, with the assistance of experienced practitioners in colorectal cancer treatment, has designed a randomized trial with 174 stage IV colorectal cancer patients.
 
Our Biotechnology
 
We plan to use a dendritic cell vaccine technology relatively similar to the technology behind Dendreon’s FDA approved Provenge™ cancer vaccine. However, we believe DanDrit’s next generation of dendritic cell vaccine may benefit from technological competitive advantages over other cancer vaccines including:
 
 
The vaccine will be generated within eight days from a patient’s peripheral blood. We will be able to generate the vaccine quickly because only 200ml of blood is required to be drawn. Leukapheresis (a medical technology in which the blood of a patient is passed through an apparatus -dialysis machine- that separates out one particular constituent and returns the remainder to the circulation which is used in Denderon’s Provenge™ cancer vaccine) is not needed.
 
The vaccine will use an allogenic (using cells, tissues, or organs, sourced from a genetically non-identical member of the same species as the recipient (“Allogenic”) tumor lysate (a fluid containing the contents of lysed cells) as opposed to inconvenient autologous (from the patient) tumor lysate. Our cancer-specific antigens are off-the-shelf and therefore DanDrit does not need a patient’s tumor cells to manufacture the vaccine.
 
The vaccine will be polytopic (targets several cancer specific antigens). As a result, the risk of the tumor escaping is more limited and more T-cells can be activated than if the vaccine is targeting one antigen only. However, MCV has a focus on melanoma-associated antigen (“MAGE”)-A antigens that are only expressed by tumors and absent in normal tissues.
 
Fast track production in two days is possible.
 
MCV demonstrated efficacy in three separate Phase IIa clinical trials in colorectal and non-small cell lung cancer. Even if MCV can be used for various cancers, DanDrit has decided to focus MCV’s clinical development specifically on the treatment of advanced CRC.
 
Our Proposed Clinical Trial
 
Parallel with the establishment of a cancer vaccine center in Asia, DanDrit intends to develop globally MCV in colorectal cancer, with opportunities to expand the scope of the treatment to other types of cancer. DanDrit will focus on a randomized Phase IIb/III clinical trial in stage IV colorectal cancer. The proposed Proof of Concept (PoC) study with an adaptive design plans to enroll 174 stage IV colorectal cancer patients after resection of liver metastases and therefore no evidence of disease. The clinical study is designed as a randomized, placebo controlled, multicenter, Phase IIb/III clinical study. Treatment is double blinded (to the patients and physicians). Patients will be included after resection of their primary tumor and resectable metastases in liver and after appropriate peri-or post-operative chemotherapy by stratification and random assignment to a non-vaccine control group or a vaccine group receiving five vaccinations with 14-day administration intervals followed by five vaccines with two-month intervals. Inclusion will take place three months after finishing the last round of peri- or post-operative chemotherapy (FOLFOX or FOLFIRI) and after a negative tumor scan (head, thoracic and abdominal cavities) and normal CarcinoEmbryonic Antigen (CEA) prior to inclusion in the vaccine or the control groups. Patients will be screened for MAGE-A expression. The control group will receive five plus five injections with physiological saline. In the event of disease progression, as verified by tumor scan during the vaccination schedule, vaccinations will be discontinued.
 
 
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Corporate History and Information
 
DanDrit was incorporated in Delaware on January 18, 2011 under the name “Putnam Hills Corp.” (“Putnam”) as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. We filed a Registration Statement on Form 10 with the U.S. Securities and Exchange Commission (the “SEC”) on August 12, 2011.
 
On February 12, 2014, the Company signed and closed the transactions contemplated by a Share Exchange Agreement (the "Share Exchange Agreement"), by and among DanDrit USA (formerly known as Putnam Hills Corp.), Dandrit Denmark and N.E. Nielsen, as the representative of the shareholders of DanDrit Denmark, pursuant to which the holders of approximately 97% of the issued and outstanding capital stock of DanDrit Denmark (the “DanDrit Consenting Holders”) agreed to exchange an aggregate of 3,879,624 equity interests of Dandrit Denmark for 5,814,945 shares of DanDrit USA (the “Share Exchange”) and as a result of which Putnam would become the parent of DanDrit Denmark. Following the closing of the Share Exchange, in accordance with Section 70 of the Danish Companies Act and the Articles of Association of Dandrit Denmark, DanDrit USA will offer to any Dandrit Denmark shareholder that has not consented to the Share Exchange (the “Non-Consenting Shareholders”) and therefore has not exchanged such Dandrit Denmark shareholder’s equity interests in DanDrit Denmark for shares of DanDrit USA, the pro rata portion of the number of shares of DanDrit USA such DanDrit Denmark shareholder would have been entitled to if such DanDrit Denmark shareholder had consented to the Share Exchange, up to an aggregate of 6,000,000 shares of DanDrit USA, including those issued to the DanDrit Consenting Holders at closing. Any remaining shares of DanDrit USA that have not been issued to the Dandrit Consenting Shareholders at the closing, or to the Non-Consenting Shareholders following the closing, shall be distributed pro rata among the shareholders of DanDrit Denmark that have received shares of DanDrit USA based on the number of shares of DanDrit USA issued to such shares of DanDrit Denmark in connection with the Share Exchange and the Share Exchange Agreement.

Upon the closing of the Share Exchange, DanDrit USA and the its majority shareholder immediately prior to the closing agreed to cancel up to 4,400,000 share of common stock.  In addition, following the closing of the Share Exchange, the wholly owned subsidiary of the company formed solely for the purposes of changing the company’s name, Dandrit Biotech USA, Inc., merged with and into the company and the company adopted the name of its wholly owned subsidiary “DanDrit Biotech USA, Inc.”
 
DanDrit USA owns approximately 97% of the outstanding equity interests of DanDrit Denmark. As a result of the Share Exchange, we changed our management and reconstituted our board of directors. As of the effective time of the Share Exchange, Samir Masri, the Chief Executive Officer, Chief Financial Officer, President, Secretary and sole director of Putnam resigned as the sole officer and director of the company and appointed NE Nielsen, Dr. Jacob Rosenberg, Dr. Eric Leire, Aldo Petersen and Robert E. Wolfe as directors of Putnam, and Dr. Eric Leire as Chief Executive Officer and President and Mr. Wolfe as Chief Financial Officer.
 
Our principal executive offices are located Fruebjergvej 3 Box 62, 2100 Copenhagen, Denmark, and our telephone number is +45 39179840. We maintain an Internet website at www.dandrit.com. The information contained in, or accessible from, our website is not a part of this prospectus.
 
Products
 
DanDrit plans to assess its lead compound, MelCancerVac™ (MCV), a cellular therapy, in a comparative Phase IIb/III clinical trial in advanced colorectal cancer. DanDrit uses a dendritic cell technology similar to the Dendreon’s FDA approved Provenge™ cancer vaccine.
 
MCV demonstrated efficacy in three separate Phase IIa clinical trials in colorectal and non-small cell lung cancer. Even if MCV can be used for various cancers, DanDrit has decided to initiate MCV’s clinical development with advanced colorectal cancer. We believe that a maintenance therapy for advanced colorectal cancer represents a genuine commercial opportunity for MCV. A clear and unmet medical need for a safe maintenance therapy offers the opportunity to confirm the efficacy of MCV in a favorable setting.
 
DanDrit plans to conduct a randomized multicenter (anticipated to be located in USA, Europe and Asia) clinical trial to determine the safety and efficacy of MCV as adjuvant therapy in advanced colorectal cancer. The study will determine the ability of MCV to prevent recidivism in stage IV colorectal patients with no evidence of disease after surgical resection of liver metastasis and chemotherapy. Using an Adaptive Design Clinical Study, which allows modification made to trail and/or statistical procedures of ongoing clinical trials based on accrued data, the double blinded randomized Proof-of-Concept study will evaluate MCV with standard of care against standard of care alone in 174 colorectal cancer patients using as primary endpoints Progression Free Survival at 18 months and Overall Survival. We anticipated that the blinded comparative trial can be completed within three years. We are confident that positive upcoming clinical data will be the catalyst to unlock commercial revenues for DanDrit through either acquisition by a pharmaceutical partner or licensing deals that would yield upfront and milestone payments as well as royalties.
 
DanDrit has learned how to manufacture dendritic cells, immune cells forming part of the mammalian immune system with the main function of processing antigen material and presenting it on the surface to other cells of the immune system, functioning as antigen-presenting cells, in vitro from monocyte (a type of white blood cell) precursor cells taken from patients eligible for DanDrit’s therapies. The preparation of tumor lysate containing selections of cancer, specific non-self antigens, allows DanDrit to sensitize patients’ dendritic cells. The use of the patient’s own monocyte cells from peripheral blood (autologous cell therapy) overcomes the issues associated with non-self allergic reactions to immune therapies.
 
 
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DanDrit’s intellectual property is protected with patents and trademarks. DanDrit’s candidate vaccines are based on the MCV platform that is protected by a family of issued or submitted patents. DanDrit’s lead product has completed Phase II clinical trials in Denmark and Singapore. DanDrit’s Singapore Phase II data was compelling enough that the Singapore authorities allowed the use of MCV for CRC on a humanitarian named patient basis.
 
To date, clinical trials of MCV have been targeted to patients in terminal stages of cancer with non-resectable bulky tumors who failed to respond to surgery and chemotherapy. Several patients given just months to live were alive and enjoyed high quality of life, two years after MCV therapy commenced. Several patients showed stable disease with no progression of tumors. There was evidence of tumor regression in some patients.
 
These achievements have been built on a carefully executed R&D program that generated practical solutions to scientific and medical challenges. Through this development program, DanDrit gained advanced understanding of the role of dendritic cells in immunoregulation and cancer.
 
Non-core applications of dendritic cell technologies mastered by DanDrit have applications in infectious diseases and auto-immune diseases such as diabetes (7th leading causes of death in the US). These other applications represent opportunities for out-licensing and cooperation. Where other companies have non-core technologies of relevance to DanDrit’s core business in dendritic cell cancer therapy, we will pursue a policy of cooperation and in-licensing.
 
DENDRITIC CELLS, THE THERAPEUTIC PLATFORM
 
Summary
 
Early academic work of Professor Jesper Zeuthen, and other colleagues at the Danish Cancer Society was spun-out into DanDrit Biotech. The fundamental scientific postulate of DanDrit is the fact that key cells in the immune system can be sensitized to cancer cells that carry foreign (or non-self) antigens. These key antigen-presenting cells are the dendritic cells. Dendritic cells encounter and recognise foreign antigens. Dendritic cells can assimilate and process the cells expressing these antigens. The key components of these antigens (known as epitopes, and several epitopes are known as polytopes) are subsequently presented on the cell surface of the dendrititc cell. Dendritic cells travel to lymph nodes and other lymphatic tissues where the epitopes are presented to other immune cells, including cell-killing T lymphocytes. T lymphocytes sensitised by dendritic cells can then recognize and kill tumor cells carrying tumor-specific antigens recognised by the dendritic cells. The main aim is to kill tumor cells without killing normal body tissues.
 
Dendritic cell interacting with T-lymphocyte
 
(LOGO)
 
The above photograph (courtesy Science Photo Library) illustrates a dendritic cell (blue/green) communicating with a T-lymphocyte (gold). From DanDrit’s point of interest, this might represent a dendritic cell instructing a T-lymphocyte to kill tumor cells.
 
DanDrit presents itself as a “Cancer Vaccine” company and its lead product, MelCancerVac® (MCV), a polytopic vaccine, targets colorectal cancer in the first instance. In addition, DanDrit has developed several technologies relevant to dendritic cell production.
 
 
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DanDrit’s candidate vaccines are based on the MCV platform that is protected by a family of issued and submitted patents. DanDrit’s lead product has completed Phase II clinical trials in Denmark and Singapore. DanDrit’s Singapore Phase II data were compelling enough for the Singapore authorities to make MCV available on a limited humanitarian named patient basis.
 
To date, clinical trials of MCV have been targeted to patients in terminal stages of disease who failed to respond to surgical resection and chemotherapies. Some patients given just months to live were still alive and enjoyed high quality of life, two years after MCV therapy commenced. Many patients were showed stable disease with no progression of tumor. There was evidence of tumor regression in some patients.
 
Scientific and medical research is adding to DanDrit’s clinical and pre-clinical development pipeline in cancer. Some of this research in dendritic cells could have implications that reach beyond DanDrit’s cancer vaccine vision.
 
Dendritic Cells and the immune response
 
Dendritic cells were first recognised by Paul Langerhans in the late 19th century. For this reason such cells in the skin may still be referred to as Langerhans cells. The term “dendritic cell” was first used by Ralph Steinman and Zanvil Cohn in 1973. Steinman received the 2007 Lasker Award for this work and the 2011 Medicine Nobel Prize.
 
Like macrophages, cells whose role is to phagocytose, or engulf and then digest, cellular debris and pathogens, either as stationary or as mobile cells, dendritic cells are involved in the processing of antigens and their presentation to the cells that directly carry out the immune response through antibody generation (B lymphocytes) or cell killing activity (T- lymphocytes). Like macrophages, dendritic cells are mobile and once stimulated by an antigen, activated macrophages and dendritic cells move from their host tissue (usually skin or epithelial tissue such as gut, mucous membranes, lung etc.) to lymphatic tissues where they encounter and stimulate cells that mediate the immune response.
 
Unsurprisingly, macrophages and dendritic cells are closely related. Both are derived from circulating blood cells known as monocytes. Monocytes, macrophages and immature dendritic cells are all phagocytic cells, that is, they engulf and process foreign antigens. On activation by the uptake of antigen, dendritic cells mature and become mobile. The mobile mature dendritic cells are capable of stimulating T-lymphocytes through the expression of T-cell stimulatory antigens on their cell surfaces.
 
It is possible to force monocytes to differentiate in vitro into immature dendritic cells. This is the basis of DanDrit’s proprietary dendritic cell production process. As in nature DanDrit’s process involves a subtle communication between monocytes and cytokines. Dendritic cells produced by DanDrit are functionally, morphologically and biochemically very similar – if not identical – to natural dendritic cells.
 
 
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Figure 2 Principle of Dendritic Cell cancer vaccines
 
(LOGO)
 
DanDrit’s platform technology is based on isolating patient monocytes and transforming them into immature dendritic cells in vitro. This is achieved by exposing monocytes to cytokines (interleukin 4, IL-4; and granulocyte macrophage colony stimulating factor, GM-CSF). Still in vitro these immature dendritic cells are activated by exposure to a cancer cell line lysate. This cancer cell lysate contains many “non-self” antigens of the cancer/testis family. Although coded by the human genome, these antigens are not normally expressed in tissues other than cancer or testis (note that testis and immune system are isolated from each other). Once sensitised in vitro, the immature dendritic cells are matured by exposure to a DanDrit proprietary cytokine cocktail. The now mature dendritic cells can be re-injected to the patient via a simple 0.2 ml intra-dermal injection and they will find their way to the lymphatic tissues. There, they will stimulate multiple cell killing (T) lymphocytes which will become sensitised to the cancer-specific antigens present in the lysate.
 
The Platform Technology, MelCancerVac®
 
MelcCancerVac® (MCV) is a cellular immunotherapy for treatment of cancer. At this time MCV has been studied in two cancers: Non-Small Cell Lung cancer (NSCLC) and colorectal cancer (CRC). The use of MCV is extended to other tumors in the mid-term such as the two types of oesophageal cancers: esophageal squamous cell carcinoma (EC) and esophageal adenocarcinoma (EAC).
 
DanDrit’s platform technology comprises two arms:
 
 
Autologous dendritic cells obtained by the activation of patient-derived monocytes
 
 
Proprietary lysate from melanoma-derived cell line expressing a range of cancer/testis antigens, notably the MAGE-A family
 
The melanoma lysate component of MCV is manufactured from a melanoma cell line established by DanDrit scientists. This cell line was isolated from a melanoma tumor that expressed antigens found in a wide range of tumors but not in normal tissues (other than the testis). These antigens belong to a family of cancer/testis antigens (including mostly MAGE-A antigens) found in many tumors.
 
Furthermore, by exposing DanDrit’s proprietary melanoma tumor cell to 5-aza-deoxycytadine (5-aza-CdR/Decitabine), which is an inhibitor of DNA methylation, DanDrit has shown that derived tumor lysates (MCV5AZA) express a far wider range of tumor-specific antigens.
 
 
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Antigen characterization
 
For a patient to respond favourably to MCV, it is necessary that the antigens presented by the patient’s tumor show a significant match with the antigens in the lysate. The level of expression of antigens in each batch of lysate is determined by a procedure known as Reverse Transcriptase Quantitative Polymerase Chain Reaction or “RT-QPCR”. Clearly all patient cells will present many thousands of antigens - as will the lysate. MCV’s lysate component is isolated from a melanoma cell line that expresses a great many cancer/testis antigens at significant level. This broad spectrum of cancer/testis antigens is what makes MCV a good cancer vaccine. Figure 3 (below) shows how RT-QPCR can analyse levels of antigen expression as measured by messenger RNA.
 
Figure 3 Comparison of tumor antigen expression in MCV with two patient biopsies
 
(LOGO)
 
 
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In this example, TA-1 to TA-28 are 28 known tumor antigens (antigens that are only expressed by cancer cells and not by normal cells). We can see that 14 of these antigens are present in MCV. Even more (21) cancer-specific antigens are expressed by the tumor in Patient two, which indicates a good chance of promoting a cancer killing response. In patient one there is not a strong overlap of MCV antigens and the five patient’s tumor antigens. The chances of promoting a strong immune response are less but still significant (TA-3, TA-9, TA-18, and TA-19 are shared).
 
By analyzing patient’s tumors by RT-QPCR it is possible to select patients that have the best chance of success with MCV. However, other uncharacterised antigens may also be present that might promote a response.
 
Clinical Trials Data and product approvals
 
Overall clinical results
 
All dendritic cell-based vaccinations are safe, with no life-threatening side effects, as found by DanDrit, competitors, and the medical community. The only potential adverse events associated with dendritic cell vaccines are a flu-like symptom with fevers (not up to 39-40 deg. C), chills, and headaches in some patients. The occurrence of these adverse events did not require additional treatment or hospitalization. Some patients may also develop a vitiligo, a skin condition in which there is a loss of brown color (pigment) from areas of skin, resulting in irregular white patches that feel like normal skin, when melanocyte differentiation antigens are used as targets in immunotherapy. However, this does not occur with DanDrit’s MCV due to a lack of differentiation antigens in the melanoma cell lysate.
 
MCV is produced according to the principles of Good Manufacturing Practice (GMP) in facilities approved by the Danish Medicine Agency and EU regulation for the production of medicines from patient blood in aseptic conditions. No products of animal origin are used during vaccine preparation. Quality control is performed for each individual batch of the vaccine as well as for the lysate used in the loading of dendritic cells.
 
MCV has been tested in clinical trials for the treatment of colorectal cancer (CRC) and non-small-cell lung cancer (NSCLC).
 
CRC Clinical Trials
 
 
Phase II at Gentofte Hospital, Denmark - Completed
 
 
Phase II at the National Cancer Centre, Singapore - Completed
 
NSCLC Clinical Trials
 
 
Phase II at Herlev Hospital, Denmark – Completed
 
ColoRectal Cancer (CRC) in Denmark
 
DanDrit sponsored a clinical trial using MCV at the University Hospital of Copenhagen, Gentofte, in Denmark. Enrolment of CRC patients started in October 2004 and the study ended in September 2006. The title of this study is: “Vaccination with autologous dendritic cells loaded with Lysate of allogeneic melanoma cells (MCV) for treatment of patients with advanced colorectal cancer”.
 
Twenty patients with advanced colorectal cancer (Dukes D - not curable by resection and no further conventional therapy options available) were included in the study (six patients in phase I and 14 in phase II).
 
The purpose of this open phase I/II study was to study the tolerability and effect of MCV given as intradermal injections to patients with metastasizing colorectal cancer, where there was no indication for surgery or chemotherapy. The first part was a phase I study to investigate whether treatment with MCV is in any way toxic. No toxicity was observed and the study continued into phase II to study the effect and tolerability of MCV. At the completion of the study stable disease was observed in twenty percent of the enrolled patients. This data was achieved with a DanDrit’s early MCV vaccine, which has since been replaced by an improved MCV.
 
 
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Inclusion criteria:
 
 
Age 25-75
 
 
No chemo or radiotherapy within six weeks prior to inclusion
 
 
Expected survival > four month
 
 
Performance status two according to the performing status of WHO
 
 
Adequate hepatic and renal function
 
 
Adequate haematopoietic and coagulation capacity
 
 
Normal EKG or non-clinical significant abnormal EKG
 
 
Preserved pulmonary function
 
Exclusion criteria for the trial:
 
 
Uncontrolled serious infection
 
 
Systemic corticosteroid treatment or other immune suppressive treatment in the last two months
 
 
Participation in other clinical trials over the former six weeks
 
 
For women, pregnancy or lactation
 
Study design: dendritic cells were generated from autologous peripheral blood mononuclear cells (PBMC). In order to increase the level of circulating leukocytes, patients exercised five minutes on a treadmill before 200ml of blood was drawn. Patients were scheduled for ten vaccinations consisting of 3-5x106 dendritic cells. Vaccinations were given bi-weekly intra-dermally on the proximal thigh with two injections each thigh. Adverse events were monitored and classified according to the National Cancer Institute’s Common Toxicity Criteria (NCI’s CTC). Evaluation of responses was made according to the Response Evaluation Criteria in Solid Tumors (“RECIST”) criteria and patients were CT scanned before entering the study, after five vaccinations and after ten vaccinations. Quality of life was monitored by questionnaires bi-weekly. The study was performed at the Department of Surgical Gastroenterology at Gentofte University Hospital, Copenhagen, Denmark according to ICH Guidelines for Good Clinical Practice (European Directive on GCP 2001/20/EC).
 
Non-small cell lung cancer (NSCLC) in Denmark
 
DanDrit sponsored this MCV clinical trial conducted at Herlev Hospital, University of Copenhagen, in Denmark. The title of the study is: “Vaccination with Autologous Dendritic Cells Pulsed with Allogeneic Tumor Lysate (MelCancerVac) for the Treatment of Patients with Advanced or Metastatic Non-Small Cell Lung Cancer”.
 
DanDrit designed the trial as an open-label, phase II clinical study. Enrolled patients had disseminated, inoperable NSCLC after chemotherapy; the patients did not want further chemotherapy: and no other systemic treatments could be offered to them.
 
The primary objective was to measure the antigen specific immunological reaction between vaccine antigens and the patients’ immune system in vivo and in vitro. The secondary objectives were to estimate the patients’ survival time, the tumor response according to RECIST criteria, and the patients’ quality of life during the study period.
 
The first patient was included in January 2007. A total of 28 patients were included in the trial. The initial results were encouraging. In this Phase IIa trial a 43% response rate was observed, with six patients showing stable disease. Five of these patients were immunologically responding to the vaccine (ELISPOT –IFN Gamma positive) while eight of nine patients with no clinical response had no IFN gamma response.
 
Colorectal Cancer (CRC) in Singapore
 
A single arm phase II clinical study was also conducted at the Singapore National Cancer Centre (NCC) to investigate the efficacy of intradermal vaccination with MCV in patients with advanced colorectal cancer. The study used DanDrit’s new patented procedure for generating dendritic cells. All included patients had tumors which antigenically correlated with the vaccine, i.e. were MAGE-A positive. The purpose of the study was to investigate the objective efficacy and specific immunologic response of the MCV vaccination. The first patient was enrolled in June 2005, and by June 2007 a total of 20 patients had been treated and evaluated.
 
 
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The vaccine was given to advanced colorectal cancer patients pre-treated with chemotherapy, where there was no further indication for surgery or treatment with chemotherapy.
 
Treatment with MCV did not adversely affect the patient’s quality of life, which remained both high and stable throughout the study period. MCV induced objective responses in seven of 20 patients (six responses were stable disease and one response was partial regression of tumor mass). Significant immunological and clinical correlation was observed. Results from the trial were presented orally at the AACR meeting in Singapore in November 2007. Since 2009, the focus has been on scaling up manufacturing and compassionate use in Singapore.
 
Compassionate Use/Named Patient Approval
 
Further to the data emerging from the Singapore CRC trial, the Singapore government requested and approved (22 September 2008) that named patients be offered MCV therapy at cost. This first compassionate use approval marked a significant milestone for the progress and acceptability of the MCV therapeutic model. This compassionate program could be used as a model to initiate sales of MCV in other countries of the ASEA such as Thailand or Malaysia.
 
Future: 100% Off-the-Shelve Vaccines
 
Autologous (from the patient) dendritic cells cancer vaccines are tailor made for each individual patient. This personalized medicine approach is appealing to the patients but may present several drawbacks to a pharmaceutical company. Creating a new, unique vaccine for each patient may be perceived as complex, time consuming, and expensive. Therefore, DanDrit is pursuing two programs to offer in addition to its personalized vaccine 100% off-the-shelve cancer vaccines: MCV2 and MelVaxin. These two programs presented below capitalize on the knowledge and the expertise gained with DanDrit’s proprietary lysate used for MCV.
 
Allogenic DC based vaccine: MCV2
 
First, DanDrit is developing MCV2 a 100% off-the-shelf dendritic cell vaccine through collaboration with the Etablissement Francais du Sang (EFS) / GeniusVac (France). MCV2 is a cell-based immunotherapeutic product consisting of an irradiated plasmacytoid dendritic cell line presenting DanDrit’s proven lysate. DanDrit sourced the allogeneic dendritic cells from EFS /GeniusVac. EFS/GeniusVac produces anallogeneic plasmacytoid dendritic cells (pDCs) line that has demonstrated the induction of multi-specific and highly functional cytotoxic cell responses directed against tumor targets both In vitro and in vivo. These irradiated antigen-presenting pDCs have a strong power to induce specific antitumor response by cytotoxic DC8+ T-cells. The safety and efficacy allogeneic pDC platform has been proven. Stimulation of PBMC from HLA-A*0201+ donors by HLA-A*0201 matched allogeneic pDCs pulsed with tumor-derived peptides triggered high levels of antigen-specific and functional cytotoxic T cell responses (up to 98% tetramer+ CD8 T cells (a group of white blood cells known as lymphocytes and play a central role in cell-mediated immunity). The pDC vaccine demonstrated anti-tumor therapeutic in vivo efficacy as shown by the inhibition of tumor growth in a humanized mouse model. It also elicited functional tumor-specific T cells ex-vivo from PBMC and TIL of stage I-IV melanoma patients. Responses against MelA, GP100, tyrosinase and MAGE-3 antigens reached tetramer levels up to 62%, 24%, 85% and 43% respectively. pDC vaccine-primed T cells specifically killed patients’ own autologous melanoma tumor cells. This semi-allogeneic pDC vaccine was more effective than conventional myeloid DC- based vaccines.
 
This Allogenic approach offers multiple advantages:
       
 
The vaccine could then be mass-produced in a unique manufacturing facility
      (logo)
 
Cost effective process
 
All manufacturing process can then be out-sourced (DanDrit does not need to support its own GMP manufacturing facility)
 
The MCV2 vaccine could be more likely to have higher efficacy than MCV. The allogeneic DCs are further regarded as MHC-incompatible foreign invaders.  Then, they induce an inflammatory reaction that further promotes the recruitment and activation of endogenous DCs at the vaccination site. This hypothesis has now been verified in rat and mouse cancer models in which tumor growth was significantly reduced by therapeutic vaccinations with tumor-loaded allogeneic DCs.

 
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MCV2 is still using the clinically proven lysate used in MCV as cancer specific antigen
 
“One- To- Many”: the same drug product could be used to treat several patients (consistent with current pharma business model).
 
Fully standardizable product
 
Guarantee of homogeneity of the clinical trials
 
Melvaxin™
 
A second platform product, MelVaxin™ is also evaluated. MelVaxin™ is similar to the lysate component of MCV. DanDrit proposed injecting MelVaxin™ into the skin to promote natural dendritic cell responses that will attack the tumor expressing cancer/testis antigens. It is necessary to inject MelVaxin™ with an immuno-stimulator such as GM-CSF, BCG or novel adjuvants (such as 3M’s TLR7 and TLR8 agonists). A preclinical programme has been planned in minipigs. These animals have immune response profiles, particularly of skin injection, that are very close to human. This programme, currently on hold, can be reinitiated when staff is available to manage this programme. This takes second place to the MCV2 programme and illustrates DanDrit’s professional commitment to advancing lead clinical products.
 
Other Future Products
 
Other cancers
 
DanDrit has already made progress with clinical trials of NSCLC and CRC. DanDrit is now focussing its clinical development on advanced colorectal cancer, but DanDrit may if opportunity arises extend its range of cancer targets to answer the desperate need for effective new therapies. As an illustration, esophageal cancers may be one of these opportunities. The two types of esophageal cancers the esophageal squamous cell carcinoma (EC) and the esophageal adenocarcinoma (EAC) expressed MAGE -A. Worldwide, EC is the most frequent malignant esophageal cancer accounting for at least 10,000 deaths per year.
 
But in Western countries, EAC is the most rapidly increasing cancer compared with other malignancies. Surgical resection is currently the only potential cure with or without neo-adjuvant or adjuvant chemo-and/or radiotherapy, the five year survival rate is less than 20%. At first presentation, approximately 50-60% of patients with esophageal cancer are not eligible for surgery and have very poor outcome.
 
Tolerogenic Dendritic Cells
 
Some dendritic cells seem to instruct cell-killing T cell clones to abandon their mission by self-destructing through an apoptotic pathway. This may offer the possibility of eliminating those T cells responsible for the manifestation of auto-immune disease. In MCV dendritic cells are derived in such a way that the resulting dendritic cells promote an immune reaction. However, dendritic cells may also be derived in such a way that they are tolerogenic, they promote immune tolerance. Promoting immune tolerance can be used to treat autoimmune diseases such as early stage type I diabetes (where insulin secreting cells are still present) or even to help prevent rejection of tissue transplantation. In this way the tolerogenic dendritic cells are used to turn off an undesirable immune reaction. DanDrit has established methods to derive tolerogenic dendritic cells from peripheral blood monocytes, similar to the approach used to generate immunogenic dendritic cells in MCV. Tolerogenic dendritic cells are easily distinguished by their function in vitro. DanDrit has filed patents to cover the generation of tolerogenic dendritic cells.
 
Non-Core Products – Out-licensing
 
Non-core patents are being developed for application in dendritic cell related applications that are not cancer-related. Revenues from licensing such non-core products will support core product and core technology development.
 
The principal non-core intellectual property relates to tolerogenic dendritic cells, their production and application in auto-immune diseases to include type 1 diabetes. DanDrit’s fast track production methods for dendritic cells might be out-licensed for non-competitive applications in areas other than cancer.
 
 
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Fast-track production of Dendritic Cells
 
The generation of mature immunogenic dendritic cells from peripheral blood monocytes requires eight days of growth in culture. The efficiency of producing MCV could be improved if the time required to generate dendritic cells could be significantly reduced. DanDrit has tested many protocols for generating dendritic cells quickly. Two promising methods have emerged from intensive research activities to generate dendritic cells in either two days or five days. The fast track methods for generating dendritic cells produce immunogenic dendritic cells that are comparable to cells generated using DanDrit’s standard technique. These new fast track methods are covered by DanDrit’s existing dendritic cell technology patent.
 
This fast-track production technology could be of commercial interest for other companies working in non-competitive areas of dendritic cell technology.
 
MicroRNAs for dendritic cell quality control
 
DanDrit patented a method using microRNAs to characterise dendritic cells and establish a basis for quality control. To date there are few dendritic-cell specific antigens and those existing are covered by patents. DanDrit has patented its microRNA approach developed with Bioneer (note that patents are 100% owned by DanDrit).
 
Proposed Clinical Trial
 
Most of the net proceeds from this offering will be spent on a Proof of Concept (PoC) clinical trial. DanDrit will focus its development program on a randomized Phase IIb/III clinical trial in stage IV (metastatic) colorectal cancer. The purpose of this section is to present this clinical trial.
 
The proposed PoC study with an adaptive design plans to enroll 174 stage IV colorectal cancer patients after surgical resection of liver metastases and chemotherapy. These patients will therefore have no evidence of disease. The clinical study is designed as a randomized, placebo controlled, multicenter, Phase IIb/III clinical study. Treatment is double blinded (to the patients and physicians). Patients will be included after resection of their primary tumor and resectable metastases in liver and after appropriate peri- or post-operative chemotherapy by stratification and random assignment to a non-vaccine control group or a vaccine group receiving five vaccinations with 14-day administration intervals followed by five vaccines with two-month intervals. Inclusion is planned to take place one month after finishing the last round of peri- or post-operative chemotherapy (FOLFOX or FOLFIRI) and after a negative tumor scan (head, thoracic and abdominal cavities) and normal CEA prior to inclusion in the vaccine or the control groups. Patients will be screened for MAGE-A expression. The control group will receive five plus five injections with physiological saline. In the event of disease progression, as verified by tumor scan during the vaccination schedule, vaccinations will be discontinued. The table below summarizes the key features of the proposed PoC clinical study.
 
 
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Phase IIb/III Overview
 
Purpose
To determine the safety and efficacy of our investigational vaccine in colorectal cancer and to determine its ability to prevent recidive in stage IV colorectal patients with no evidence of disease (after surgical resection of metastase and chemotherapy)
Study Type
Interventional
Study design
 
Endpoint (primary)
Efficacy : Progression Free Survival at 18 months
Endpoint (secondary)
Overall Survival; Carcino-Embryonic Antigen (CEA); Quality of Life
 
Intervention Model
Parallel assignment 174 patients
Masking
Double blind
Allocation
Randomized
Power
80%
Adaptive Design
Purpose: potential sample size re-estimation
Interim analysis of 12-month data from first 90 patients (CEA)
Treatment
Five vaccines bi-weekly (intra-dermal administration) followed by five vaccines every two months
Location
Asia, Europe, and USA
Expected Duration
Three years
Eligibility
Stage IV colorectal cancer patients
After resection of liver metastase (lung metastase are excluded) and no evidence of disease (CT scan and CEA back to normal)
          ●    Stratification for risk factor
Vaccine therapy given after FOLFOX or FOLFIRI (after completion of course of chemotherapy)
Screen for MAGE-A expression
 
 
(FLOW CHART)
 
Critical Success Factors
 
The points below are a specific, focused list of critical factors and challenges that need to be considered for the project, during the critical start-up phase and throughout the project life cycle. In addition to the sections noted below, during the course of the study, DanDrit will be pro-active in discussing the Critical Factors with the investigators.
 
Oncology studies by their nature have a degree of complexity not always encountered in other therapeutic areas. We believe success of the CRC study will be related to these Critical Success Factors. Our approach to each critical factor is detailed below. DanDrit identified the following key factors for success:
 
 
Patient accrual and site selection
 
Assessment of patient response
 
Study design and collection of patient data
 
Vaccine supply
 
Patient safety
 
Multinational regulatory requirements
 
CRO previous experience
 
Adaptive trial design experience
 
Patient accrual and site selection
 
 
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The proposed study is anticipated to enroll 174 patients at approximately 37 sites in the US, Europe and Singapore. Although the number of potential stage IV patients is significant, only a portion of these, approximately 10-20%, will have complete resections of their primary tumors and metastatic disease to liver with no detectable residual disease (i.e. clear resection margins). This coupled with a competitive oncology vaccine research environment will put pressure on accrual milestones.
 
The selected patient population will be easier to work with than the patients in Phase IIa. It is reasonable to expect the response rate to be greater for MCV, or for any immunotherapy, in a patient population with No evident Disease (NED). Consequently in this Phase IIb/III trial, patients will have to be NED, raising the likelihood that the immune system can generate a response against cancer as it re-occurs. We believe this may ultimately lead to better data from the Phase IIb/III trial. Careful selection of study sites using evidence based feasibility research, discussion with colorectal key opinion leaders (KOLs), contact with investigators at key sites and our past clinical experience in this indication and with cancer vaccines will be required. The trial is planned to be run out of sites such as Dana Farber Harvard University in the US, the Institut Gustave Roussy (IGR) in France, the National Cancer Institute of Milan in Italy, all of which are among the world’s premier cancer research and treatment facilities and leaders in immunotherapy research. That these sites are among the selected clinical trial sites raises the chances that the 174 patients will be recruited swiftly.
 
Accrual rates are estimates and can be further refined. Inadequate enrollment is one of the biggest drivers of wasted cost and time in clinical trials. Therefore, DanDrit has taken a very conservative position regarding site selection and patient enrollment.
 
Assessment of patient response
 
In general, in oncology vaccine studies, the relationship between clinical response, survival (and other measures of efficacy) and immune response may be unclear. Changes in patients’ immunological profiles during vaccination protocols, their response to the vaccine components as measured by DTH, ELISPOT, CD antigen profiles and other strategies to attempt to correlate treatment outcome with the results of vaccination are variable. The paper describing the Phase II study in CRC patients by Toh et al indicates that a plasma protein expression profile has been identified for responding patients. Continued evaluation of immunological profiles of the patients and the collection of these data and correlation with outcomes may be desirable but for this POC study will not be necessary.
 
In a guidance document by the FDA, “Clinical Considerations for Therapeutic Cancer Vaccines” (September 2009), the agency recognizes that immunological approaches to tumor control may require significant time to develop, and that careful clinical assessment of patients must be performed as well as the use of methods that rely on radiological measurement of tumor size (e.g. RECIST). The guidance indicates that for cancer vaccines, patients may be observed to develop indications of progressive disease based on radiological measurement, but that these indications may also be transient and that tumor regression is still a possibility as the immunological response develops. Methods to incorporate such an approach will help avoid premature termination of study treatment for some patients.
 
Tumor burden has also been a confounding problem for oncology vaccine development because of tumor-induced immune-suppression in some patients and because of progression prior to immune response. These issues may be obviated in this study of no-evident-disease subjects.
 
Patient safety
 
MCV appears to be safe and well tolerated in studies to date. Adverse events related to the vaccine appear to be Grade 1-2 and consist of mostly superficial toxicities as describe above. Patients in the proposed study will have recovered from previous treatments and will be apparently disease free: thus, at this time, only general safety precautions and observations related to the patient population are recommended.
 
Injection site reactions and other toxicities expected in the class of DC vaccines will be included in site training. Some volume of Severe Adverse Events can be anticipated in a population of advanced CRC patients. Discrimination of events related to vaccine against a background of underlying disease and prior chemo or and/or radiotherapy will be necessary.
 
The CRO’s pharmacovigilance scientists will prepare a Safety Management Plan to specifically outline the procedures to be followed and will train the site personnel to obtain, collect, verify, transmit and coordinate a timely and efficient manner.
 
In addition to reviewing assignment of causality, a DSMB may assist in the (proposed) interim assessment for efficacy and its constitution should be considered.
 
 
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Regulatory
 
DanDrit will seek scientific advice from EMEA (ATMP) and will request a pre-Phase II meeting with the FDA. The CRO Regulatory Affairs group will provide preparation and assistance for the Scientific Advice process in EMEA including the following activities:
 
 
Regulatory review of pertinent data
 
Discussions/kick off meeting with DanDrit contact(s), for background, pertinent issues, proposed questions, strategic discussion etc.
 
Prepare a briefing package for Scientific Advice includes QC (one review round with DanDrit) using the existing information in the Investigational Medicinal Product Dossier(IMPD)/Investigator Brochure(IB) as the basis for the package
 
Set up and attend meeting with EU regulatory agency and conduct all associated administrative tasks (letters, post meeting minutes, etc.)
 
While the IIb trial will commence as soon as practicable and will run over a three year period, DanDrit also has the option to evolve the Phase IIb to a Phase III trial through the use of an adaptive design. Ordinarily a drug requires two Phase III trials before it can apply for FDA approval. Consequently the first patient for Phase IIb could be considered commencement of ‘pivotal’ trials for MCV. Also, DanDrit intends to move to a pivotal trial in China with a Chinese partner. Currently, the China Food and Drug Administration offers a low-cost clinical development pathway for cancer drugs developed, manufactured and commercialized in China. A separate local CRO will be recruited for this Chinese trial.
 
Our Competitive Strengths
 
We believe our following strengths position us to increase our revenue and profitability:
 
 
Cutting Edge Technology. Immunotherapy is one of the waves of the future in cancer treatment.
 
 
Colorectal Market Potential. Colorectal cancer is a large market with a well identified unmet medical need for safe maintenance therapy. The clinical data for MCV to date gives the potential for the vaccine to eventually become the standard of care for maintenance therapy. MCV has the potential to alter the treatment paradigm by prolonging periods of remission after response to chemotherapy. If MCV works as expected in colorectal cancer, we believe it would likely prove beneficial in other tumors that over-express MAGE-A including lung, breast and esophageal cancer.
 
 
Regulatory Precedent. Dendreon with Provenge™, its prostate cancer vaccine, pioneered the regulatory pathway for MCV. Dendreon worked with the FDA to develop the protocols allowing a cellular therapy such as MCV to be approved for clinical use. DanDrit could be the next generation of dendritic cell vaccine with several improvements over its competition: stimulate a cellular immune response rather than just an antibody response, no need for leukapheresis to produce the vaccine, intradermal administration, convenience of an allogenic vaccine, polytopic approach but with a focus on the MAGE-A antigen family and reliable manufacturing.
 
 
Successful Use in Singapore. For the last five years, DanDrit and the Singapore National Cancer Center have provided MCV to colorectal cancer patients within an on-going compassionate use program in Singapore. Based on that experience, DanDrit is building a potential collaboration with a Chinese oncology pharma partner that may speed up large scale commercialization of MCV.
 
 
Strong IP Protection. The technology is patented with a long patent life. DanDrit owns 100% of the technology, without intellectual property issues.
 
Our Strategy
 
Our strategy is focused on conducting a proof-of-concept clinical trial in advanced colorectal cancer that may trigger partnership deal that should bring a significant return on investment (based on analysis of past acquisitions of peer cancer vaccine companies).
 
DanDrit intends to conduct a randomized multicenter (USA, Europe and Asia) clinical trial to determine the ability of MCV to prevent recidivism in stage IV colorectal patients with no evidence of disease after surgical resection of liver metastasis and chemotherapy.
 
 
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This blinded comparative trial is planned to be completed within three years. DanDrit’s management is confident that upcoming clinical data will be the catalyst to unlock commercial revenues for DanDrit through either acquisition by pharmaceutical partner or licensing deals that would yield upfront and milestone payments as well as royalties.
 
We are also considering a registration trial to support potential approval of MCV in China. This trial would be conducted under China Food and Drug Administration regulations with a Chinese oncology pharmaceutical partner, such as the TASLY Group or 3S Bio. Contacts with 3S Bio and the TASLY Group have already been initiated. China has recently put in place a drug approval system that includes a low-cost first clinical approval pathway especially for Chinese biotechnology companies. The approval for local biotechnology players is advantageous, since costs for a pivotal clinical trial in China are estimated at one tenth of EU or U.S. costs. Therefore, we plan to collaborate with a Chinese company such as the TASLY Group to develop, manufacture and sell MCV in China. Several factors are also making a partnership with a Chinese pharmaceutical company attractive:
 
 
For registration, the clinical trial can only be performed in sites approved by the China Food and Drug Administration. By November 2010, there were 112 oncology sites in Mainland China.
 
Screening for MAGE-A could be attractive to the China Food and Drug Administration, but tumor samples could not be shipped outside of China for genomic testing. Therefore a partner who can perform MAGE-A screening in China is valuable.
 
In addition, the China Food and Drug Administration relies more than other agencies on risk benefit assessment. Risk benefit assessment in China remains the “heart” of determining the value of products and is a more favorable assessment approach to MCV as the vaccine is, thus far, well tolerated with a perfect safety profile (due to dendritic cell technology).
 
Furthermore, due to high unmet medical need, the approval for cancer drugs is also more favorable than in other regions of the world. Because cancer is the first cause of mortality in China, the approval process for oncology drugs benefits from easier rules than those that govern drugs targeting other diseases. The State Food and Drug Administration (the predecessor of China Food and Drug Administration) granted 114 Clinical Trial Authorization (CTA) approvals for oncology global/regional trials from 2005 to 2010. Generally, in order to approve a cancer drug in China:
 
 
Usually only one pivotal study is required
 
With only 100 to 800 patients (most likely 300 patients)
 
An open-label study design is accepted (without placebo control)
 
The statistical consideration are also attractive as relatively low statistical significance (P value 0.03~0.05) is required
 
Overall additional flexibility exists for oncology drugs, driven by the benefit/risk ratio
 
Furthermore, a special review and approval procedure applies to oncology drugs. The review and approval procedure could shorten the review time and can enhance communication with the China Food and Drug Administration. By the end of 2010, 28 drugs obtained approval, and more than half were oncology drugs (ten chemical drugs, and five biologics).
 
We believe that it is important to take advantage of this development opportunity quickly as the paradigm for oncology drug development is changing rapidly in China:
 
 
There is an unprecedented number of anti-cancer therapies in development and the standard of care changes quickly
 
The complexity of information concerning tumor genetics and signaling pathways is growing and will bring greater opportunities for personalized medicine
 
Industry
 
Cancer deaths remain constant, partly because people are living longer. DanDrit’s lead products for NSCLC and CRC address about 40% of all cancer deaths. Other important cancers include Breast (8% of deaths), Prostate (6% of deaths) and Pancreas (6% of deaths). Together these top 5 cancers are responsible for 60% of all cancer deaths.
 
 
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Cancers Diagnosed (deaths in parentheses) each year
 
Region
Population
1000,000s
All Cancer
1000s
NSCLC
1000s
CRC
1000s
Breast
1000s
Prostate
1000s
Pancreas
1000s
USA
300
1400 (560)
190 (125)
150 (50)
185 (40)
185 (30)
37 (30)
EU
500
2300 (900)
315 (205)
250 (85)
305 (67)
305 (50)
60 (50)
Combined
800
3700 (1300)
505 (330)
400 (135)
490 (107)
490 (80)
97 (80)
 
With the 12,667,500 estimated number of new cancer cases in 2008, cancer remains a large market opportunity. Cancer is still the main cause of death in developed countries – accounting for ~33% of death and remains an area of huge unmet medical need. The cancer market has a high growth potential for the coming years with an expected 7% annual growth rate for the years 2011- 2018. The American Cancer Society figured out 1,638,910 new cancer cases in the US for 2012 with 577,190 associated deaths.
 
In Europe the number of new cancer cases for 2012 was estimated at 3.45 million with a 1.75 million deaths. The cancer market is the fastest growing pharmaceutical market with $83 billion expected growth of the cancer drug market by 2020.
 
The per-treatment price of chemotherapy for CRC is approximately $30,000. We expect that, if our vaccine is approved for use in CRC patients, the cost per-treatment will be approximately equal to the per-treatment cost of chemotherapy.
 
Due to its safety profile, MCV should fit easily into the treatment paradigm of most cancers. The initial label of adjuvant therapy for stage IV colorectal cancer with no evidence of disease after surgical resection of metastases could be a door opener for the larger colorectal cancer market. DanDrit’s pharmaceutical partner should be able to grow the label to the larger adjuvant for stage III colorectal cancer market.
 
Colorectal Cancer
 
The figure below presents the market opportunity for MCV in advanced colorectal treatment. The global colorectal cancer market peak opportunity for MCV can be valued at US$4.6 billion using quite conservative assumptions.
 
(logo)
 
Despite numerous therapeutic advances, colorectal cancer continues to be associated with one of the worst survival rates of all cancers. Metastatic liver disease is found in 10% to 25% of patients having surgery for primary colorectal cancer instead of liver metastasis are detected in 40-50% of patients with diagnosed colon cancer. Then, standard of care “treatment” for colorectal cancer patients after resection surgery and chemotherapy is only observation. When surgical resections of liver metastases are possible, as in 20% of the affected patients, five years survival may approach 35%. According to the most recent papers, the median Progression-Free-Survival (PFS) in patients receiving combined surgery and chemotherapy with No Evidence of Disease is 24-26 months.
 
 
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We believe that it is of great importance for colorectal cancer patients receiving surgery alone or surgery combined with peri- or post-operative chemotherapy, that new and more effective therapies are developed and offered in the post-treatment period. The aim of the proposed trial is to study whether our lead vaccine can increase the progression-free survival for these patients.
 
Licensing Potential and Cooperation Agreements
 
The following discussion represents opportunities that we believe can expand the use of our technology.
 
Alliance with Chinese Company
 
In addition of the size of their national market, Chinese biotech firms currently benefit from a low cost first clinical development path. The Chinese approval process is favorable for local biotechnology companies. With a Chinese partner, we plan to conduct a Phase III trial in China for approximately one tenth of the cost in the U.S. and at a faster pace. A successful Phase III trial could result in large scale commercialization in China and Southeast Asia.
 
Furthermore, the domestic market in China for cancer therapies is expected to grow due to a large aging population, expanded insurance coverage, higher government healthcare spending, rising disposable incomes and the high incidence of cancer among the population. In spite of recent price cuts, we believe that the market for cancer therapies in China represents a long-term opportunity based on the factors set forth above. In 2010, oncology agents (17.1%) ranked second in sales, at 17.1%, only after anti-infective agents (23.1%) and before cardiovascular drugs (13.4%). This market segment is expected to continue to grow at a CAGR of over 20% from 2009 to 2014.
 
Alliance Strategy
 
In addition to its lead compound MCV, DanDrit has built a pipeline of dendritic cell based cancer therapies, currently addressing 40% of all cancer-related deaths. DanDrit intends to work with strategic partners to strengthen the in-house pipeline.
 
We control key technologies with relevance outside our core business area and these we may out-license or co-develop with suitable partners.
 
MyTomorrows
 
In December 2013, DanDrit entered an agreement with MyTomorrows (“MT”), a Dutch company, regarding a Patient Name Use Program (PNU) for MCV. This program will allow DanDrit to sell MCV at $ 20,600 for one year of treatment (10 vaccines) to cancer patients through MT. MT offers a worldwide online platform providing access to non-registered medicines for patients with life threatening diseases.
 
MT is a turnkey solution and will be in charge of regulatory, recruitment, logistics, and pharmacovigilance. DanDrit’s potential liabilities are limited to quality control of cGMP manufacturing of MCV. DanDrit expects several benefits from this agreement. First, in 2014, DanDrit anticipates short term revenue generation as MT will transfer $20,600 as soon as a patient orders MCV. DanDrit also anticipates that this program may contribute to lowering the cost of manufacturing of the clinical lot through economy of scale. This program may also generate real life data for MCV.
 
Manufacturing
 
In 2011 and 2012, DanDrit has out-sourced the GMP manufacturing of its lysate. We believe that proving that our technology transfer was possible was a key step in finding and working with a future pharmaceuticals partner. DanDrit evaluated several possible EU-based contract manufacturing organizations (CMOs) and selected PX Therapeutics SA, a CMO based in Grenoble, France. The collaboration with PX Therapeutics SA in France demonstrated that GMP production of lysate could not only be transferred but that the production could be scaled up. We consider that the potential economy of scale that can be expected in the cost of lysate production could become a competitive advantage versus other cancer vaccine companies using recombinant production of cancer-specific antigens (i.e. Mage-A3 from GSK). Also, the collaboration with the French CMO is based on a pure fee-for-services basis and can be discontinued at any time without notice.
 
In addition, DanDrit will spend a small part of the net proceeds on improving the manufacturing of the MCV vaccine. DanDrit intends to establish a closed fully automatized manufacturing process. We learned from the Dendreon’s experience that an efficient manufacturing process should be in place before approval for commercialization. Cost saving should be expected from a fully automatized vaccine production. We also assume that a fully efficient manufacturing process may increase the value of a deal with a pharmaceutical partner.
 
 
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Cell Banking
 
The melanoma cell lines used by DanDrit in the production of our lysate (MCL) are stored at ultra-low temperature in liquid nitrogen at Symbion Science Park, Copenhagen, Denmark. Both master- and working cell banks are stored this way and the contents of the cell banks (both master and working) are recorded in log books. Nitrogen levels are maintained by the staff of DanDrit Biotech at least once a week and any activity in regards to storage (shipment of cells, nitrogen levels etc.) are documented in the appropriate log book.
 
Furthermore, for security reasons, samples of the master cell banks are also stored at specialized cell storage facilities in England. In addition, samples of one working cell bank from the DDM1.7 cell line are stored at PX Therapeutics in France for production purposes.
 
Sales, Marketing and Distribution
 
The business model of DanDrit is to focus on early development of dendritic cell based vaccine. We have significantly reduced the fixed costs linked with our operation and do not intend to build an expensive marketing, sales and distribution organization. We will rely on pharmaceutical partners with demonstrated relevant experience in commercialization of cancer products to market, sell and distribute MCV. Therefore, we have already identified and establish a communication line with several potential future pharmaceutical partners. At completion of the comparative clinical trial, we plan to enter into a collaboration agreement with a pharmaceutical partner regarding the regulatory approval, marketing, sales and distribution of MCV.
 
Intellectual Property
 
As a company primarily focused on pharmaceutical research, we expect that our most valuable assets are our intellectual property. This includes U.S. and foreign patents, patent applications, common-law trademarks, trade secrets and know-how. We are pursuing an aggressive intellectual property strategy.
 
DanDrit intends to aggressively defend its patents through legal process if necessary. Where appropriate, DanDrit may in-license intellectual property that may add to the strength and defense of our core business. DanDrit’s intellectual property comprises patents, trademarks, copyright and secret know-how.
 
DanDrit’s core business is cancer therapy. Where DanDrit’s patents and secret know-how are applicable to non-core business areas we will consider out-licensing for relevant non-core applications.
 
DanDrit filed its first PCT patent application on November 29, 2002 with priority claimed from 2001 with the Danish application, shortly after our formation.
 
DanDrit may continue to patent its innovations, such as novel dendritic cell production systems or dendritic cell quality control. To support potential income streams DanDrit may patent non-core applications of its dendritic cell technologies so as to secure future revenue streams from out-licensing activity.
 
Patents
 
 
Pharmaceutical composition for inducing an immune response in a human or animal (2001 DK, 2002 PCT)
 
 
Protocol for generating dendritic cells 2005 DK, 2008 PCT
 
 
Method for generating tolerogenic dendritic cells employing decreased temperature 2007
 
 
Micro RNAs as markers of the functional state of a dendritic cell
 
All of the above patents are protected by relevant international extensions.
 
 
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The following tables present DanDrit’s different patent families (including application numbers, filing dates and office actions).

1. IMMUNOTHERAPEUTIC VACCINE
 
Application No. and title
   
Filing date
   
Priority data
   
Actions
   
Comments
PCT/DK2002/000802Published June 5, 2003 as
WO/2003/045427
 
(Our Ref.: PA76242)
 
PHARMACEUTICAL COMPOSITION FOR INDUCING AN IMMUNE RESPONSE IN A HUMAN OR ANIMAL
   
29 Nov 2002
   
PA200101770
29 Nov 2001
 
US 60/336,706
7 Dec 2001
         
International Preliminary Report on Patentability (IPRP):
All claims novel and inventive.
 
Patent expiry date Nov. 29, 2022
National entries of PCT application
   
Filing date
   
Patent granted Date and number
   
Actions Factual and expected
   
Comments
2002365291
Australia
(PA78949)
   
29 Nov 2002
   
14 Feb 2008
2002365291
   
Patent Granted
   
 
02827663.9
China
(PA78950)
   
29 Nov 2002
   
11 Nov 2009
ZL02827663.9
   
Patent Granted
     
02803755.4
Europe
(PA78951)
   
29 Nov 2002
   
21 Oct 2009
1448229
   
Patent Granted
   
Patent validated in CH, DE, DK, ES, FR, (P003142 family)
161832
Israel