Filed Pursuant to Rule 424(b)(5)
Registration No. 333-225230
PROSPECTUS SUPPLEMENT
(To
Prospectus dated
June 13, 2018
)
$40,000,000
Immunic, Inc.
Common Stock
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We have entered into a sales agreement, or the Sales Agreement,
with SVB Leerink LLC, or SVB Leerink, dated July 17, 2019, relating to shares of our common stock, par value $0.0001 per share,
offered by this prospectus supplement and the accompanying prospectus. In accordance with the terms of the Sales Agreement, we
may offer and sell shares of our common stock having an aggregate offering price of up to $40.0 million from time to time through
SVB Leerink, acting as our agent.
Our common stock is listed on The Nasdaq Capital Market under
the symbol “IMUX.” On July 16, 2019, the last reported sale price of our common stock was $13.10 per share.
Sales of our common stock, if any, under this prospectus supplement
and the accompanying prospectus will be made in sales deemed to be “at the market offerings” as defined in Rule 415
promulgated under the Securities Act of 1933, as amended, or the Securities Act. SVB Leerink is not required to sell any specific
number or dollar amount of shares of our common stock, but will act as our sales agent using commercially reasonable efforts consistent
with its normal trading and sales practices, on mutually agreed terms between SVB Leerink and us. There is no arrangement for funds
to be received in any escrow, trust or similar arrangement.
The compensation payable to SVB Leerink for sales of common
stock sold pursuant to the Sales Agreement will be an amount equal to 3.0% of the gross proceeds of any shares of common stock
sold under the Sales Agreement. See “Plan of Distribution” beginning on page S-10 for additional information regarding
the compensation to be paid to SVB Leerink. In connection with the sale of the common stock on our behalf, SVB Leerink will be
deemed to be an “underwriter” within the meaning of the Securities Act and the compensation paid to SVB Leerink will
be deemed to be underwriting commissions or discounts. We have also agreed in the Sales Agreement to provide indemnification and
contribution to SVB Leerink with respect to certain liabilities, including liabilities under the Securities Act and the Securities
Exchange Act of 1934, as amended, or the Exchange Act.
We are an emerging growth company as that term is used in the
Jumpstart Our Business Startups Act of 2012 and, as such, have elected to comply with certain reduced public company reporting
requirements.
Investing in our common stock involves a high degree of risk.
See “Risk Factors” beginning on page S-5 of this prospectus supplement and the risk factors in the documents incorporated
by reference in this prospectus supplement and the accompanying prospectus.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
SVB Leerink
The date of this prospectus supplement
is July 17, 2019
TABLE OF CONTENTS
Page
Prospectus Supplement
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About this Prospectus Supplement
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S-ii
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Cautionary Note Regarding Forward-Looking Statements
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S-iii
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Prospectus Supplement Summary
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S-1
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The Offering
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S-4
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Risk Factors
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S-5
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Use of Proceeds
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S-7
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Dilution
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S-8
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Plan of Distribution
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S-10
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Legal Matters
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S-11
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Experts
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S-11
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Where You Can Find More Information
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S-11
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Information Incorporated by Reference
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S-12
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Prospectus
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About This Prospectus
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1
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Prospectus Summary
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2
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Risk Factors
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6
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Special Note Regarding Forward-Looking Statements
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6
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Ratio of Earnings to Fixed Charges and Preference Dividends
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7
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Use of Proceeds
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8
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Description of Capital Stock
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8
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Description of the Warrants
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12
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Description of the Debt Securities
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13
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Description of the Units
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25
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Selling Stockholders
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26
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Plan of Distribution
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28
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Legal Matters
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32
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Experts
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32
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Where You Can Find More Information
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32
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Information Incorporated by Reference
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Neither we nor SVB Leerink have authorized anyone to provide
any information or to make any representations other than those contained or incorporated by reference in this prospectus supplement,
the accompanying prospectus or in any free writing prospectus that we have authorized for use in connection with this offering.
We and SVB Leerink take no responsibility for, and can provide no assurance as to the reliability of, any other information that
others may give you. This prospectus supplement and the accompanying prospectus together constitute an offer to sell only the securities
offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this
prospectus supplement, the accompanying prospectus and any free writing prospectus that we have authorized for use in connection
with this offering is current only as of its date. Our business, financial condition, results of operations and prospects may have
changed since those dates. You should read this prospectus supplement, the accompanying prospectus, the documents incorporated
by reference herein and therein, and any free writing prospectus that we have authorized for use in connection with this offering
when making your investment decision. You should also read and consider the information in the documents we have referred you to
in the sections of this prospectus supplement and the accompanying prospectus entitled “Where You Can Find More Information”
and “Information Incorporated by Reference.”
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus form
part of a registration statement on Form S-3 (No. 333-225230) that we filed with the Securities and Exchange Commission, or SEC,
utilizing a “shelf” registration process. This document contains two parts. The first part consists of this prospectus
supplement, which provides you with specific information about this offering. The second part, the accompanying prospectus, which
was filed under our former name Vital Therapies, Inc., provides more general information, some of which may not apply to this offering.
Generally, when we refer only to the “prospectus,” we are referring to both parts combined. This prospectus supplement
may add, update or change information contained in the accompanying prospectus. To the extent that any statement we make in this
prospectus supplement is inconsistent with statements made in the accompanying prospectus or any documents incorporated by reference
herein or therein, the statements made in this prospectus supplement will be deemed to modify or supersede those made in the accompanying
prospectus and such documents incorporated by reference herein and therein. You should read this prospectus supplement and the
accompanying prospectus, including the information incorporated by reference herein and therein, and any related free writing prospectus
that we have authorized for use in connection with this offering.
You should rely only on the information that we have included
or incorporated by reference in this prospectus supplement, the accompanying prospectus and any related free writing prospectus
that we have authorized for use in connection with this offering. The information incorporated by reference into this prospectus
supplement and the accompanying prospectus from our Annual Report on Form 10-K for the year ended December 31, 2018, our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2019, and all Current Reports on Form 8-K prior to April 15, 2019, relates
to Vital Therapies, Inc. prior to the exchange transaction, which we refer to herein as the Exchange. See “Prospectus Supplement
Summary—Recent Developments.”
You should not rely on such information when making your investment decision.
Neither we nor SVB Leerink have authorized any dealer, salesman
or other person to give any information or to make any representation other than those contained or incorporated by reference in
this prospectus supplement, the accompanying prospectus or any related free writing prospectus that we have authorized for use
in connection with this offering.
The representations, warranties and covenants made by us in
any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus supplement or the
accompanying prospectus were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose
of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant
to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such
representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
This prospectus supplement, the accompanying prospectus and
any related free writing prospectus do not constitute an offer to sell or the solicitation of an offer to buy any securities other
than the registered securities to which they relate, nor do this prospectus supplement, the accompanying prospectus or any related
free writing prospectus constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any
person to whom it is unlawful to make such offer or solicitation in such jurisdiction.
You should not assume that the information contained in this
prospectus supplement, the accompanying prospectus or any related free writing prospectus is accurate on any date subsequent to
the date set forth on the front of the document or that any information we have incorporated by reference herein or therein is
correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus supplement, the
accompanying prospectus or any related free writing prospectus is delivered, or securities are sold, on a later date. You should
assume that the information appearing in this prospectus supplement, the accompanying prospectus, the documents incorporated by
reference and any related free writing prospectus is accurate only as of their respective dates. Our business, financial condition,
results of operations and prospects may have changed materially since those dates.
This prospectus supplement contains or incorporates by reference
summaries of certain provisions contained in some of the documents described herein, but all such summaries are qualified in their
entirety by the actual documents. Copies of some of the documents referred to herein have been or will be filed or have been or
will be incorporated by reference as exhibits to the registration statement of which this prospectus supplement forms a part, and
you may obtain copies of those documents as described in this prospectus supplement under the heading “Where You Can Find
More Information.”
All brand names or trademarks appearing in this prospectus supplement
and the accompanying prospectus are the property of their respective holders. Use or display by us of other parties’ trademarks,
trade dress, or products in this prospectus supplement and the accompanying prospectus is not intended to, and does not, imply
a relationship with, or endorsements or sponsorship of, us by the trademark or trade dress owners.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus and the documents we have filed with the SEC
that are incorporated herein by reference contain such “forward-looking statements” within the meaning of Section 27A
of the Securities Act, Section 21E of the Exchange Act, and the Private Securities Litigation Reform Act of 1995. These statements
represent our current expectations or beliefs concerning various future events and involve numerous risks and uncertainties that
could cause actual results to differ materially from expectations. Forward-looking statements may be preceded by, or contain, words
such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,”
“believe,” “estimate,” “predict,” “potential,” “might,” “could,”
“would,” “should” or other words indicating future results, though not all forward-looking statements necessarily
contain these identifying words. All statements other than statements of historical fact are statements that could be deemed forward-looking
statements. Such statements may include, but are not limited to, statements concerning the following:
• the initiation, cost, timing, progress and results
of, and our expected ability to undertake certain activities and accomplish certain goals with respect to, our research and development
activities, preclinical studies and clinical trials;
• our ability to obtain and maintain regulatory approval
of our product candidates, and any related restrictions, limitations, and/or warnings in the label of any product candidate, if
approved;
• our ability to obtain and deploy funding for our operations;
• our plans to research, develop and commercialize our
product candidates;
• our ability to attract collaborators with relevant
development, regulatory and commercialization expertise;
• our ability to avoid, settle or prevail in potential
litigation with stockholders or others;
• our ability to obtain and maintain intellectual property
protection for our product candidates;
• the size and growth potential of the markets for our
product candidates, and our ability to serve those markets;
• our ability to successfully commercialize, and our
expectations regarding future therapeutic and commercial potential with respect to, our product candidates;
• the rate and degree of market acceptance of our product
candidates;
• our ability to develop sales and marketing capabilities,
whether alone or with potential future collaborators;
• regulatory developments in the United States and other
countries;
• our ability to attract and retain experienced and
seasoned scientific and management professionals to lead us;
• the performance of our third-party suppliers and manufacturers;
• the success of competing therapies that are or may
become available;
• our expectations related to the use of proceeds from
this offering; and
• the accuracy of our estimates regarding future expenses,
future revenues, capital requirements and need for additional financing.
We believe these forward-looking statements are
reasonable; however, these statements are only current predictions and are subject to known and unknown risks, uncertainties
and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements
to be materially different from those anticipated by us or disclosed in the forward-looking statements. We discuss many of
these risks under the heading “Risk Factors” in our Current Report on Form 8-K filed with the SEC on July
17, 2019, which is incorporated by reference into this prospectus, as well as under the heading “Risk Factors”
and elsewhere in this prospectus supplement. Given these uncertainties, you should not rely upon forward-looking statements
as predictions of future events.
All forward-looking statements attributable to us or persons
acting on our behalf speak only as of the date hereof and are expressly qualified in their entirety by the cautionary statements
included in this prospectus. Except as required by law, we undertake no obligations to update or revise forward-looking statements
to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. In evaluating
forward-looking statements, you should consider these risks and uncertainties.
You should read this prospectus supplement, the accompanying
prospectus, the documents we have filed with the SEC that are incorporated by reference and any free writing prospectus that we
have authorized for use in connection with this offering completely and with the understanding that our actual future results may
be materially different from what we expect. We qualify all of the forward-looking statements in the foregoing documents by these
cautionary statements.
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights selected information contained elsewhere
in, or incorporated by reference into, this prospectus supplement and the accompanying prospectus. Because it is only a summary,
it does not contain all of the information that you should consider before investing in shares of our common stock and it is qualified
in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus
supplement, the accompanying prospectus, any free writing prospectus that we have authorized for use in connection with this offering
and the documents incorporated by reference in this prospectus supplement and the accompanying prospectus. You should read all
such documents carefully and you should pay special attention to the information contained under the caption entitled “Risk
Factors” in this prospectus supplement, in our Current Report on Form 8-K filed on July 17, 2019, in any subsequent Quarterly
Reports on Form 10-Q and Annual Reports on Form 10-K, and in our other reports filed from time to time with the SEC, which are
incorporated by reference into this prospectus supplement and the accompanying prospectus, before deciding to buy shares of our
common stock. Unless the context requires otherwise, references in this prospectus supplement to “Immunic,” “we,”
“us” and “our” refer to Immunic, Inc. and our subsidiaries.
Company Overview
We are a clinical-stage biopharmaceutical company focused on
the development of selective oral therapies in immunology with the goal of becoming a leader in treatments for chronic inflammatory
and autoimmune diseases. Our main operations are in Planegg-Martinsried near Munich, Germany. We currently have 18 employees.
We are currently pursuing three development programs. These
include the IMU-838 program, focused on the development of oral formulations of small molecule inhibitors of dihydroorotate dehydrogenase,
or DHODH; the IMU-935 program focused on an inverse agonist of ROR
g
t, an immune cell-specific
isoform of ROR
g
(retinoic acid receptor-related orphan nuclear receptor gamma); and the
IMU-856 program, involving the development of a drug targeting the restoration of intestinal barrier function. These product candidates
are being developed to address diseases such as relapsing-remitting multiple sclerosis, or RRMS, ulcerative colitis, Crohn’s
disease and psoriasis. In addition to these large markets, our products are also being developed to address certain rare diseases
with high unmet medical needs, such as primary sclerosing cholangitis, or PSC.
The following table summarizes the potential indications, clinical
targets and clinical development status of our three product candidates:
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Our most advanced drug candidate, IMU-838, targets DHODH, a
key enzyme in the intracellular metabolism of immune cells in the body. IMU-838’s lead indications are RRMS and inflammatory
bowel disease, or IBD, where the drug candidate is currently being studied in Phase 2b trials, EMPhASIS and CALDOSE-1. An investigator-sponsored
proof-of-concept clinical trial for IMU-838 in PSC is ongoing at the Mayo Clinic. If approved, we believe that IMU-838 has the
potential to be a first-in-class DHODH inhibitor in IBD and a best-in-class DHODH inhibitor in RRMS. DHODH represents a proven
target for drug development, with other DHODH inhibitors (e.g. Aubagio
®
, Sanofi) available commercially for the
treatment of conditions outside of IBD, such as multiple sclerosis. In addition, prior clinical data with IMU-838 in rheumatoid
arthritis has resulted in a good understanding of the safety profile of the drug at doses consistent with those currently under
evaluation for the treatment of RRMS and IBD.
Our second drug candidate, IMU-935, is a highly potent and selective
inverse agonist of a transcription factor called ROR
g
t with additional activity on DHODH.
We believe that the nuclear receptor ROR
g
t is the main driver for the differentiation
of Th17 cells and the expression of cytokines involved in various inflammatory and autoimmune diseases. We believe this target
is an attractive alternative to approved antibodies for targets such as IL-23, IL-17 receptor and IL-17 itself. We have observed
strong cytokine inhibition targeting both Th1 and Th17 responses in preclinical testing, as well as indications of activity in
animal models for psoriasis and IBD. Preclinical experiments indicated that, while leading to a potent inhibition of Th17 differentiation
and cytokine secretion, IMU-935 did not affect thymocyte maturation. Based on our preclinical data, we believe that IMU-935 has
potential as a best-in-class therapy for various autoimmune diseases.
Our third program, IMU-856, is a small molecule inhibitor that
targets a protein that serves as a transcriptional regulator of intestinal barrier function. Based on preclinical data, we believe
this compound represents a new and potentially disruptive approach for the treatment of gastrointestinal disorders by potentially
restoring the intestinal barrier function while maintaining immunocompetency.
Acquisition History
We acquired IMU-838 and IMU-935 in September 2016 from 4SC AG,
a publicly traded company based near Munich, Germany, through full asset acquisitions. Our rights to IMU-856 are secured pursuant
to a license and option agreement with Daiichi Sankyo Company, Limited, or Daiichi Sankyo, in Tokyo, Japan. Immunic and Daiichi
Sankyo are currently conducting Phase 1-enabling studies, including Good Laboratory Practice toxicology studies in rats and monkeys.
We have the exclusive option to execute an exclusive worldwide license to this development project at the time of starting Phase
1, in return for payment of an upfront licensing fee and further development, approval and sales milestone payments as well as
royalties.
Commercialization Strategy
Our products are being developed with the aim of delivering
proof-of-efficacy in state-of-the-art clinical trials with multiple compounds in multiple indications. Subsequent pivotal trials
may be conducted by us alone or with a potential future partner.
We expect to continue to lead most of our research and development
activities from our Planegg-Martinsried location, where a dedicated scientific, regulatory, clinical and medical team is available.
Due to this team’s key relationships with local service providers, we anticipate that this will result in timely, cost-effective
execution of our development programs. In addition, we intend to use our subsidiary based in Melbourne, Australia to expedite the
early clinical trials for IMU-935 and IMU-856.
We also conduct certain preclinical work in Halle/Saale, Germany
through a collaboration with the Fraunhofer Institute.
Recent Developments
On April 12, 2019, we completed an exchange transaction with
Immunic AG in accordance with the terms of an Exchange Agreement, dated as of January 6, 2019, or the Exchange Agreement, that
we entered into with Immunic AG and the former shareholders of Immunic AG party thereto. Pursuant to the terms of the Exchange
Agreement, the holders of ordinary shares of Immunic AG exchanged all of their shares for shares of our common stock, or the Exchange,
resulting in Immunic AG becoming our wholly-owned subsidiary. Immediately prior to the Exchange, we effected a 40-for-1 reverse
split of our outstanding common stock, or the Reverse Stock Split. Immediately following the Exchange, our name was changed to
Immunic, Inc. and the business of Immunic AG became our business. In connection with the closing of the Exchange, our stock began
trading on The Nasdaq Capital Market under the symbol “IMUX” on April 15, 2019.
Prior to and in connection with the Exchange, Immunic AG issued,
in a private placement transaction, an aggregate of 129,744 ordinary shares to certain of its shareholders for aggregate consideration
of approximately €26.7 million (approximately $30 million), pursuant to the terms of an Investment and Subscription Agreement,
dated as of January 6, 2019, between Immunic AG and the shareholders and investors party thereto. At closing of the Exchange, our
total cash balance was approximately $46.7 million, which we expect will enable us to fund our operating expenses and capital expenditure
requirements into the third quarter of 2020. Our estimate as to how long we expect our existing cash to continue to fund our operations
is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.
Corporate Information
Prior to April 12, 2019, we were a clinical-stage biotherapeutic
company known as Vital Therapies, Inc. that had historically been focused on the development of a cell-based therapy targeting
the treatment of acute forms of liver failure. Vital Therapies, Inc. was originally incorporated in the State of California in
May of 2003 as Vitagen Acquisition Corp., subsequently changed its name to Vital Therapies, Inc. in June 2003, and reincorporated
in Delaware in January 2004. Upon the Exchange, we became Immunic, Inc., a clinical-stage biopharmaceutical company focused on
the development of selective oral therapies in immunology with the goal of becoming a leader in treatments for chronic inflammatory
and autoimmune diseases.
Our corporate headquarters are located at Am Klopferspitz 19,
82152 Martinsried, Germany and our telephone number is + 49 89 250079460. We also have an office at 11440 West Bernardo Court,
Suite 300, San Diego, California 92127. We maintain a website at
www.immunic-therapeutics.com
. The information contained
on, or that can be accessed through, our website is not a part of this prospectus supplement. Investors should not rely on any
such information in deciding whether to purchase our common stock. We have included our website address in this prospectus supplement
solely as an inactive textual reference.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange
Act are available free of charge through the investor relations page of our internet website as soon as reasonably practicable
after we electronically file such material with, or furnish it to, the SEC.
Implications of Being an Emerging Growth Company
We are an “emerging growth company,” as defined
in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of relief from
certain reporting requirements and other burdens that are otherwise generally applicable to public companies. These provisions
include:
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requirement for only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;
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exemption from the auditor attestation requirement on the effectiveness of our internal control over financial reporting;
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reduced disclosure about our executive compensation arrangements; and
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no requirements for non
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binding advisory votes on executive compensation or golden parachute arrangements.
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We may take advantage of these provisions until December 31,
2019 (the fiscal year-end following the fifth anniversary of the completion of our initial public offering) or such earlier time
that we no longer qualify as an emerging growth company. We would cease to be an emerging growth company if we have more than $1.07
billion in total annual gross revenue, have more than $700 million in market value of our capital stock held by non-affiliates
or issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not
all of these reduced reporting requirements and other burdens. We have taken advantage of some reduced reporting burdens in this
prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein and therein. Accordingly,
the information that we provide stockholders may be different than what you might obtain from other public companies in which you
hold equity interests.
THE OFFERING
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Common stock offered by us
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Shares of our common stock having an aggregate offering price of up to $40.0 million.
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Manner of offering
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“At the market offering” that may be made from time to time through our sales agent, SVB Leerink LLC. See “Plan of Distribution” on page S-10.
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Use of proceeds
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We intend to use the net proceeds from this offering to
continue to fund the ongoing clinical development of our product candidates and for other general corporate purposes, including funding existing and potential new clinical programs and product candidates.
See “Use of Proceeds.”
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Risk factors
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Investing in our common stock involves a high degree of risk. You should read the “Risk Factors” section of this prospectus supplement beginning on page S-6 as well as those risk factors that are incorporated by reference in this prospectus supplement and the accompanying prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.
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Nasdaq Capital Market symbol
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IMUX
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RISK FACTORS
An investment in our common stock involves a high degree
of risk. Before deciding whether to invest in our common stock, you should carefully consider the risks described below and those
discussed under the caption entitled “Risk Factors” in our Current Report on Form 8-K that we filed on July 17, 2019,
in any subsequent Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K, and in our other reports filed from time to time
with the SEC, which are incorporated by reference in this prospectus supplement and the accompanying prospectus, together with
other information in this prospectus supplement, the accompanying prospectus, the information and documents incorporated by reference
herein and therein, and in any free writing prospectus that we have authorized for use in connection with this offering. If any
of these risks actually occurs, our business, financial condition, results of operations or cash flow could be seriously harmed.
This could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment.
Risks Related to this Offering
Management will have broad discretion as to the use of
any proceeds from this offering, and we may not use the proceeds effectively.
Our management will have broad discretion with respect to the
use of any proceeds of this offering, including for any of the purposes described in “Use of Proceeds.” You will be
relying on the judgment of our management regarding the application of any proceeds of this offering. The results and effectiveness
of the use of proceeds are uncertain, and we could spend the proceeds in ways that you do not agree with or that do not improve
our results of operations or enhance the value of our common stock. Our failure to apply these funds effectively could have a material
adverse effect on our business, delay the development of our product candidates and cause the price of our common stock to decline.
It is not possible to predict the aggregate proceeds resulting
from sales made under the Sales Agreement.
Subject to certain limitations in the Sales Agreement and compliance
with applicable law, we have the discretion to deliver a placement notice to SVB Leerink at any time throughout the term of the
Sales Agreement. The number of shares that are sold through SVB Leerink after delivering a placement notice will fluctuate based
on a number of factors, including the market price of our common stock during the sales period, any limits we may set with SVB
Leerink in any applicable placement notice and the demand for our common stock. Because the price per share of each share sold
pursuant to the Sales Agreement will fluctuate over time, it is not currently possible to predict the aggregate proceeds to be
raised in connection with sales under the Sales Agreement.
The common stock offered hereby will be sold in “at
the market offerings” and investors who buy shares at different times will likely pay different prices.
Investors who purchase shares in this offering at different
times will likely pay different prices, and accordingly may experience different levels of dilution and different outcomes in their
investment results. We will have discretion, subject to market demand, to vary the timing, prices and number of shares sold in
this offering. In addition, subject to the final determination by our board of directors or any restrictions we may place in any
applicable placement notice, there is no minimum or maximum sales price for shares to be sold in this offering. Investors may experience
a decline in the value of the shares they purchase in this offering as a result of sales made at prices lower than the prices they
paid.
If you purchase our common stock in this offering, you
may incur immediate and substantial dilution in the book value of your shares.
The offering price per share of common stock in this offering
may exceed the net tangible book value per share of our common stock outstanding prior to this offering. Therefore, if you purchase
common stock in this offering, you may pay a price per share that exceeds our as adjusted net tangible book value per share of
common stock. Assuming that an aggregate of 2,873,563 shares of our common stock are sold at an assumed offering price of $13.92
per share, the last reported sale price of our common stock on The Nasdaq Capital Market on July 12, 2019, for aggregate gross proceeds
of $40.0 million, and after deducting commissions and estimated offering expenses payable by us, you would experience immediate
dilution of $7.73 per share, representing the difference between our pro forma as adjusted net tangible book value per share as
of March 31, 2019, after giving effect to the Exchange and this offering, and the assumed offering price. To the extent outstanding
options or warrants are exercised, you will experience further dilution. See the section titled “Dilution” below for
a more detailed illustration of the dilution you would incur if you participate in this offering. Because the sales of the shares
offered hereby will be made directly into the market, the prices at which we sell these shares will vary and these variations may
be significant. Purchasers of the shares we sell, as well as our existing stockholders, will experience significant dilution if
we sell shares at prices significantly below the price at which they invested.
Future sales and issuances of our common stock or rights
to purchase common stock could result in additional dilution of the percentage ownership of our stockholders and could cause the
price of our common stock to decline.
We will need additional capital in the future to continue our
planned operations. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial
dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and
in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities, or if we
issue common stock pursuant to our equity compensation plans, investors may be materially diluted by subsequent sales or issuances.
These sales or issuances may also result in material dilution to our existing stockholders, and new investors could gain rights
superior to our existing stockholders.
USE OF PROCEEDS
We may issue and sell shares of our common stock having an aggregate
offering price of up to $40.0 million from time to time. Because there is no minimum offering amount required as a condition to
close this offering, the actual total public offering amount, commissions to SVB Leerink and proceeds to us, if any, are not determinable
at this time. There can be no assurance that we will sell any shares under the Sales Agreement as a source of financing.
We
intend to use the net proceeds from this offering
to continue to fund the ongoing clinical development of our product candidates
and for other general corporate purposes, including funding existing and potential new clinical programs and product candidates
.
Our expected use of the net proceeds to us from this offering
represents our current intentions based upon our present plans and business condition. The amounts and timing of our actual expenditures
will depend on numerous factors, including the progress of our research and development efforts, the status of and results from
our current or future clinical trials, the timing of regulatory submissions and any unforeseen cash needs. Accordingly, our management
will have broad discretion in the application of any net proceeds from this offering.
Until we use the net proceeds of this offering for the purposes
described above, we intend to invest any funds we receive in short-term, investment-grade, interest-bearing instruments and U.S.
government securities. We cannot predict whether these investments will yield a favorable return.
DILUTION
If you invest in our common stock in this offering, your interest
will be diluted immediately to the extent of the difference between the price per share you pay in this offering and the pro forma
as adjusted net tangible book value per share of our common stock after giving effect to this offering. Net tangible book value
per share represents our total tangible assets, which we calculate as our total assets, less goodwill and in process research and
development, less our total liabilities, divided by the number of shares of our common stock outstanding.
At March 31, 2019, the historical net tangible book value of
Vital Therapies, Inc. was $9.1 million, or $0.21 per share of common stock. After giving effect to the Exchange and the Reverse
Stock Split, our pro forma net tangible book value at March 31, 2019, based on 9,986,399 shares of common stock then outstanding,
was $41.0 million, or $4.11 per share of common stock.
After
giving further effect to the assumed sale by us of an aggregate of 2,873,563 shares of our common stock at an assumed offering
price of $13.92 per share, the last reported sale price of our common stock on the Nasdaq Capital Market on July 12, 2019, for aggregate
gross proceeds of $40.0 million, and after deducting commissions and estimated offering expenses payable by us, our net tangible
book value at March 31, 2019 would have been $79.6 million, or $6.19 per share of common stock. This represents an immediate increase
in net tangible book value to existing stockholders of $2.08 per share and an immediate dilution of $7.73 per share to new investors
purchasing common stock at the assumed offering price of $13.92 per share in this offering.
See Exhibit 99.1 of our Current
Report on Form 8-K that we filed with the SEC on July 17, 2019 for details on the calculations of the pro forma amounts of our
total tangible assets, total liabilities and shares of common stock outstanding.
The following table illustrates this per share dilution to the
new investors purchasing shares of common stock in this offering:
|
Assumed offering price per share
|
|
|
|
|
|
$
|
13.92
|
|
|
Pro forma net tangible book value per share at March 31, 2019, after giving effect to the Exchange and the Reverse Stock Split
|
|
$
|
4.11
|
|
|
|
|
|
|
Increase in pro forma net tangible book value per share attributable to new investors purchasing shares in this offering
|
|
$
|
2.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma as adjusted net tangible book value per share at March 31, 2019, after giving further effect to this offering
|
|
|
|
|
|
$
|
6.19
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilution per share to new investors in this offering
|
|
|
|
|
|
$
|
7.73
|
|
Other than the historical net tangible book value per share
of Vital Therapies, Inc.
, which is calculated based on
42,369,694
shares outstanding, the foregoing table and calculations are based on
9,986,399
shares of our common stock outstanding as of March 31, 2019 (
after
giving effect to the Exchange and the Reverse Stock Split
), and exclude:
|
|
•
|
33,738 shares of common stock issuable upon exercise of stock options outstanding as of March 31, 2019, at a weighted average exercise price of $279.39 per share;
|
|
|
|
|
|
|
•
|
20,325 shares of common stock available for future grant under our 2014 Equity Incentive Plan as of March 31, 2019;
|
|
|
|
|
|
|
•
|
6,015 shares of common stock issuable upon the exercise of warrants outstanding as of March 31, 2019, at a weighted average exercise price of $3,719.60; and
|
|
|
|
|
|
|
•
|
127,500 shares of common stock reserved for issuance under restricted stock units outstanding as of March 31, 2019.
|
An increase of $1.00 per share in the price at which the shares
are sold from the assumed offering price of $13.92 per share shown in the table above, assuming all of our common stock in the
aggregate amount of $40.0 million during the term of the Sales Agreement with SVB Leerink is sold at that price, would increase
our pro forma as adjusted net tangible book value per share to $6.28 per share and would increase the dilution in net tangible
book value per share to new investors in this offering to $8.64 per share, after deducting commissions and estimated offering expenses
payable by us. A decrease of $1.00 per share in the price at which the shares are sold from the assumed offering price of $10.71
per share shown in the table above, assuming all of our common stock in the aggregate amount of $40.0 million during the term of
the Sales Agreement with SVB Leerink is sold at that price, would decrease our pro forma as adjusted net tangible book value per
share to $6.08 per share and would decrease the dilution in net tangible book value per share to new investors in this offering
to $6.84 per share, after deducting commissions and estimated offering expenses payable by us.
The information discussed above is illustrative only and the
shares subject to our Sales Agreement with SVB Leerink are being sold from time to time at various prices. Furthermore, to the
extent outstanding options or warrants are exercised, you will experience further dilution. In addition, we may choose to raise
additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current
or future operating plans. If we raise additional capital through the sale of equity or convertible debt securities, you will experience
further dilution.
PLAN OF DISTRIBUTION
We have entered into a Sales Agreement with SVB Leerink LLC,
or SVB Leerink, under which we may issue and sell up to $40.0 million of our common stock from time to time through SVB Leerink
as our sales agent. Sales of our common stock, if any, will be made by any method that is deemed to be an “at the market
offering” as defined in Rule 415 under the Securities Act, including sales made directly on or through The Nasdaq Capital
Market, on or through any other existing trading market for the common stock or to or through a market maker.
SVB Leerink will offer our common stock subject to the terms
and conditions of the Sales Agreement on a daily basis or as otherwise agreed upon by us and SVB Leerink. We will designate the
maximum number or amount of common stock to be sold through SVB Leerink on a daily basis or otherwise determine such maximum number
or amount together with SVB Leerink. Subject to the terms and conditions of the Sales Agreement, SVB Leerink will use commercially
reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations
and the rules of The Nasdaq Capital Market to sell on our behalf all of the common stock requested to be sold by us. We may instruct
SVB Leerink not to sell common stock if the sales cannot be effected at or above a minimum price designated by us in any such instruction.
SVB Leerink or we may suspend the offering of our common stock being made through SVB Leerink under the Sales Agreement upon proper
notice to the other party. SVB Leerink and we each have the right, by giving written notice as specified in the Sales Agreement,
to terminate the Sales Agreement in each party’s sole discretion at any time. The offering of our common stock pursuant to
the Sales Agreement will otherwise terminate upon the termination of the Sales Agreement as provided therein.
The compensation payable to SVB Leerink as sales agent will
be an amount equal to 3.0% of the gross proceeds of any shares of common stock sold through it pursuant to the Sales Agreement.
We have also agreed to reimburse SVB Leerink for actual outside legal expenses incurred by SVB Leerink in connection with this
offering, including SVB Leerink’s counsel fees in an amount up to $50,000, plus an additional amount of up to $15,000 in
connection with determining our compliance with the rules and regulations of the Financial Industry Regulatory Authority, Inc.,
or FINRA. In accordance with FINRA Rule 5110, these reimbursed fees and expenses are deemed sales compensation to SVB Leerink in
connection with this offering. We estimate that the total expenses of the offering payable by us, excluding commissions payable
to SVB Leerink under the Sales Agreement, will be approximately $243,000.
The remaining sales proceeds, after deducting any expenses payable
by us and any transaction fees imposed by any governmental, regulatory or self-regulatory organization in connection with the sales
of our common stock, will equal our net proceeds for the sale of such common stock.
SVB Leerink will provide written confirmation to us no later
than the next succeeding trading day on The Nasdaq Capital Market after each day on which common stock is sold through it as sales
agent under the Sales Agreement. Each confirmation will include the number or amount of shares sold through it as sales agent on
that day, the volume-weighted average price of the shares sold and the net proceeds to us from such sales.
We will report at least quarterly the number of shares of common
stock sold through SVB Leerink under the Sales Agreement, the net proceeds to us and the compensation paid by us to SVB Leerink
in connection with the sales of common stock during the relevant period.
Settlement for sales of common stock will occur, unless the
parties agree otherwise, on the second trading day following the date on which any sales were made in return for payment of the
net proceeds to us. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
In connection with the sale of the common stock on our behalf
pursuant to the Sales Agreement, SVB Leerink will be deemed to be an “underwriter” within the meaning of the Securities
Act and the compensation paid to SVB Leerink will be deemed to be underwriting commissions or discounts. We have agreed in the
Sales Agreement to provide indemnification and contribution to SVB Leerink with respect to certain liabilities, including liabilities
under the Securities Act and the Exchange Act. As sales agent, SVB Leerink will not engage in any transactions that stabilize our
common stock.
Our
common stock is listed on The Nasdaq Capital Market and trade under the symbol “IMUX.” The transfer agent of our common
stock is
American Stock Transfer & Trust Company
, LLC.
SVB Leerink and/or its affiliates have provided, and may in
the future provide, various investment banking and other financial services for us for which services they have received, and may
in the future receive, customary fees.
LEGAL MATTERS
The validity of the common stock being offered by this prospectus
supplement will be passed upon for us by Dentons US LLP, New York, New York. Covington & Burling LLP, New York, New York, is
counsel to SVB Leerink in connection with this offering.
EXPERTS
The financial statements of Vital Therapies, Inc. incorporated
in this prospectus supplement by reference to the Annual Report on Form 10-K of Vital Therapies, Inc. for the year ended December
31, 2018 have been so incorporated in reliance on the report (which contains an explanatory paragraph relating to Vital Therapies,
Inc.’s ability to continue as a going concern as described in Note 1 to the consolidated financial statements) of PricewaterhouseCoopers
LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The audited historical financial statements of Immunic AG included
in Immunic, Inc.’s Current Report on Form 8-K dated June 21, 2019 have been so incorporated in reliance on the report of
Baker Tilly Virchow Krause LLP, an independent registered public accounting firm, given on the authority of said firm as experts
in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus supplement and the accompanying prospectus form
part of a registration statement on Form S-3 that we filed with the SEC. This prospectus supplement and the accompanying prospectus
do not contain all of the information set forth in the registration statement and the exhibits to the registration statement or
the documents incorporated by reference herein and therein. For further information with respect to us and the securities that
we are offering under this prospectus supplement, we refer you to the registration statement and the exhibits and schedules filed
as a part of the registration statement and the documents incorporated by reference herein and therein. You should rely only on
the information contained in this prospectus supplement or the accompanying prospectus or incorporated by reference herein or therein.
We have not authorized anyone else to provide you with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any
date other than the date on the front page of this prospectus supplement, regardless of the time of delivery of this prospectus
supplement or any sale of the securities offered hereby.
We
file annual, quarterly and other reports, proxy and information statements and other information with the SEC. The SEC maintains
a website that contains reports, proxy statements and other information regarding us. The address of the SEC website is
www.sec.gov
.
We maintain a website at
www.immunic-therapeutics.com
. The
information contained on, or that can be accessed through, our website is not a part of this prospectus supplement. Investors should
not rely on any such information in deciding whether to purchase our common stock. We have included our website address in this
prospectus supplement solely as an inactive textual reference.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference into this prospectus
supplement and the accompanying prospectus certain information we file with it, which means that we can disclose important information
by referring you to those documents. The information incorporated by reference is considered to be a part of this prospectus supplement
and the accompanying prospectus, and information that we file later with the SEC will automatically update and supersede information
contained in this prospectus supplement and the accompanying prospectus.
The following documents are incorporated by reference into this
document (other than the portions of these documents deemed to be “furnished” or not deemed to be “filed,”
including the portions of these documents that are furnished under Item 2.02 or Item 7.01 of a Current Report on Form 8-K, including
any exhibits included with such Items):
|
|
•
|
our Annual Report on Form 10
-
K for the fiscal year ended December 31, 2018 filed with the SEC on March 4, 2019;
|
|
|
|
|
|
|
•
|
our Quarterly Report on Form 10-Q for the three months ended March 31, 2019 filed with the SEC on April 10, 2019;
|
|
|
|
|
|
|
•
|
our Current Reports on Form 8-K filed with the SEC on January 7, 2019, January 14, 2019, January 24, 2019, March 19, 2019, April 4, 2019, April 10, 2019, April 15, 2019, April 29, 2019, June 21, 2019, and July 17, 2019; and
|
|
|
|
|
|
|
•
|
the description of our common stock contained in our registration statement on Form 8
-
A12B, filed with the SEC on November 15, 2013 (File No. 001-36201), and all amendments or reports filed for the purpose of updating such description.
|
We also incorporate by reference into this prospectus all documents
(other than Current Reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related
to such items) that are filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this prospectus supplement and until the completion or termination of the offering contemplated hereby. These documents include
periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Any statement contained herein or in a document incorporated
or deemed to be incorporated by reference into this document will be deemed to be modified or superseded for purposes of the document
to the extent that a statement contained in this document or any other subsequently filed document that is deemed to be incorporated
by reference into this document modifies or supersedes the statement.
We make available, free of charge, through our website our Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file
such material with, or furnish it to, the SEC. You may also obtain, free of charge, a copy of any of these documents (other than
exhibits to these documents, unless the exhibits are specifically incorporated by reference into these documents or referred to
in this prospectus) by writing or calling us at the following address and telephone number:
Immunic, Inc.
Am Klopferspitz 19
82152 Martinsried
Germany
+ 49 89 250079460
PROSPECTUS
Vital Therapies, Inc.
$200,000,000
Common Stock, Preferred Stock,
Warrants, Debt Securities, Units
2,500,000 Shares of Common Stock
Offered by Selling Stockholders
________________________
We may offer and sell from time to time,
in one or more series or issuances and on terms that we will determine at the time of the offering, any combination of the securities
described in this prospectus, up to an aggregate maximum amount of $200,000,000.
In addition, selling stockholders named
in this prospectus may from time to time, after we announce topline data for our VTL-308 clinical study, offer and sell up to an
aggregate of 2,500,000 shares of our common stock in one or more transactions, subject to market conditions and prices, liquidity
objectives and other investment considerations. We will not receive any of the proceeds from the sale of our common stock by the
selling stockholders.
Our common stock is listed on The Nasdaq
Global Market under the symbol “VTL.” On June 5, 2018, the last reported sale price of our common stock on The Nasdaq
Global Market was $4.85 per share. There is currently no market for the other securities we may offer; however, we will provide
information in any applicable prospectus supplement regarding any listing of securities other than shares of our common stock on
any securities exchange.
This prospectus describes the general terms
of the securities we may offer and the general manner in which we may offer these securities. Each time we sell securities described
herein, and in certain cases where one or more selling stockholders sell securities pursuant to this prospectus, we or the selling
stockholders, as applicable, will provide prospective investors with a supplement to this prospectus that will contain specific
information about the terms of that offering, including the specific amounts, prices and terms of the securities offered. Such
prospectus supplements may also add, update or change information contained in this prospectus. The applicable prospectus supplement
will contain information, where applicable, as to any other listing on the Nasdaq Global Market or any other securities market
or other exchange with respect to the securities covered by such prospectus supplement. You should carefully read this prospectus
and any applicable prospectus supplement, together with the documents we incorporate by reference, before you invest.
We are an “emerging growth company”
as defined under the federal securities laws and, as such, have elected to comply with certain reduced public company reporting
requirements.
INVESTING IN OUR SECURITIES INVOLVES
SIGNIFICANT RISKS. YOU SHOULD REVIEW CAREFULLY THE “
RISK FACTORS
” ON PAGE 6 OF THIS PROSPECTUS AND IN THE PROSPECTUS
SUPPLEMENT, IF APPLICABLE, BEFORE INVESTING IN OUR SECURITIES.
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.
These securities may be offered and sold
to or through one or more underwriters, dealers and agents, or directly to purchasers, on a continuous or delayed basis. If underwriters,
dealers, or agents are used to sell the securities, we will name them and describe their compensation in a prospectus supplement.
In addition, the underwriters may over-allot a portion of the securities.
The date of this prospectus is June 13,
2018.
Table of Contents
|
|
Page
|
|
|
|
|
About This Prospectus
|
1
|
|
Prospectus Summary
|
2
|
|
Risk Factors
|
6
|
|
Special Note Regarding Forward-Looking Statements
|
6
|
|
Ratio of Earnings to Fixed Charges and Preference Dividends
|
7
|
|
Use of Proceeds
|
8
|
|
Description of Capital Stock
|
8
|
|
Description of the Warrants
|
12
|
|
Description of the Debt Securities
|
13
|
|
Description of the Units
|
25
|
|
Selling Stockholders
|
26
|
|
Plan of Distribution
|
28
|
|
Legal Matters
|
32
|
|
Experts
|
32
|
|
Where You Can Find More Information
|
32
|
|
Information Incorporated by Reference
|
33
|
ABOUT THIS PROSPECTUS
This prospectus is part of a registration
statement on Form S-3 that we filed with the United States Securities and Exchange Commission, or the SEC, using a “shelf”
registration process. Under this shelf process, we may, from time to time, sell any combination of the securities described in
this prospectus in one or more offerings up to an aggregate dollar amount of $200,000,000. In addition, the selling stockholders
may from time to time, after we announce topline data for our VTL-308 clinical study, sell up to an aggregate amount of 2,500,000
shares of our common stock in one or more transactions, subject to market conditions and prices, liquidity objectives and other
investment considerations.
This prospectus provides you with a general
description of the securities we or the selling stockholders may offer. Each time we sell securities described herein, and in certain
cases where one or more selling stockholders sell securities pursuant to this prospectus, we or the selling stockholders, as applicable,
will provide prospective investors with a supplement to this prospectus that will contain specific information about the terms
of that offering, including the specific amounts, prices and terms of the securities offered. The prospectus supplement may also
add to, update or change information contained in this prospectus and, accordingly, to the extent inconsistent, information in
this prospectus is superseded by the information in the prospectus supplement. You should carefully read both this prospectus and
any accompanying prospectus supplement, together with the information incorporated by reference and any other offering materials.
See “Where You Can Find More Information” and “Information Incorporated by Reference.”
You should only rely on the information
contained or incorporated by reference in this prospectus and any prospectus supplement or issuer free writing prospectus relating
to a particular offering. No person has been authorized to give any information or make any representations in connection with
this offering other than those contained or incorporated by reference in this prospectus, any accompanying prospectus supplement
and any related issuer free writing prospectus in connection with the offering described herein and therein, and, if given or made,
such information or representations must not be relied upon as having been authorized by us. Neither this prospectus nor any prospectus
supplement nor any related issuer free writing prospectus shall constitute an offer to sell or a solicitation of an offer to buy
offered securities in any jurisdiction in which it is unlawful for such person to make such an offering or solicitation. This prospectus
does not contain all of the information included in the registration statement. For a more complete understanding of the offering
of the securities, you should refer to the registration statement, including its exhibits.
You should read the entire prospectus and
any prospectus supplement and any related issuer free writing prospectus, as well as the documents incorporated by reference into
this prospectus or any prospectus supplement or any related issuer free writing prospectus, before making an investment decision.
Neither the delivery of this prospectus or any prospectus supplement or any issuer free writing prospectus nor any sale made hereunder
shall under any circumstances imply that the information contained or incorporated by reference herein or in any prospectus supplement
or issuer free writing prospectus is correct as of any date subsequent to the date hereof or of such prospectus supplement or issuer
free writing prospectus, as applicable. You should assume that the information appearing in this prospectus, any prospectus supplement
or any document incorporated by reference is accurate only as of the date of the applicable documents, regardless of the time of
delivery of this prospectus or any sale of securities. Our business, financial condition, results of operations and prospects may
have changed since that date.
References in this prospectus to the “company,”
“we,” “us” and “our” and similar terms or Vital Therapies refer to Vital Therapies, Inc.
PROSPECTUS SUMMARY
This summary description about us and
our business highlights selected information contained elsewhere in this prospectus or incorporated in this prospectus by reference.
This summary does not contain all of the information you should consider before deciding to invest in our securities. You should
carefully read this entire prospectus and any applicable prospectus supplement, including each of the documents incorporated herein
or therein by reference, before making an investment decision. Investors should carefully consider the information set forth under
“Risk Factors” on page 6 of this prospectus and incorporated by reference to our annual report on Form 10-K and our
quarterly reports on Form 10-Q.
Overview
We are a clinical-stage biotechnology company
focusing on the discovery, development and commercialization of cell-based therapies capable of transforming the management of
life-threatening conditions. Our initial product candidate, the ELAD® System, or ELAD, is a human-cell-based, bio-artificial
liver which is being developed to improve rates of survival among patients with acute forms of liver failure.
We believe that the ELAD System may improve
rates of overall survival and transform the management of acute forms of liver failure. Therapy with ELAD consists of a single,
up to five-day treatment session, during which a patient’s blood plasma is passed continuously through four cartridges containing
approximately one pound of VTL C3A cells. These cells, which are grown by us from our proprietary cell banks, are human, liver-derived
cells, which have been shown to retain a large number of the liver’s synthetic and metabolic functions. During therapy with
the ELAD System, we believe that the VTL C3A cells may infuse the patient’s plasma with beneficial proteins, including growth
factors, cell survival proteins, and anti-inflammatory proteins, and also remove certain harmful substances, such as endotoxin,
all of which may better allow the patient’s own liver to recover and regenerate, thereby potentially improving patient survival.
The ELAD System has been granted orphan drug designation by the U.S. Food and Drug Administration, or FDA, and the European Commission,
for the treatment of patients with acute liver failure, including alcoholic hepatitis.
In May 2016, we commenced our pivotal VTL-308
clinical study. This is a randomized and controlled study comparing the efficacy and safety of the ELAD System plus standard-of-care
to standard-of-care alone in adults, under the age of 50 and without secondary organ failure, with liver failure from severe alcoholic
hepatitis, or sAH. VTL-308 was designed to enroll at least 150 subjects, and the study’s primary endpoint is a Kaplan-Meier
analysis of overall survival to be performed after the last subject to be enrolled has been followed for at least ninety days.
The secondary endpoints are to evaluate the proportion of survivors at study days 28 and 91, as well as the proportion of subjects
achieving a certain threshold of bilirubin reduction and surviving without transplant. In March 2018, we completed enrollment in
VTL-308, and we expect to announce topline data in the third quarter of 2018, likely September. If the data is positive, these
results are expected to form the basis for a marketing application to the FDA and other global health regulatory authorities for
the approval of the ELAD System for the treatment of sAH. We anticipate performing follow-on studies in other acute forms of liver
failure.
Results from a prior study, VTI-208, informed
the design of the VTL-308 study and guided its focus on subjects under the age of 50 without secondary organ failure. The VTI-208
study enrolled 203 subjects between 2013 and 2015 with alcohol-induced liver decompensation, most of whom were experiencing liver
failure as a result of sAH. In August 2015, we learned that the Kaplan-Meier analysis of overall survival was not statistically
different between groups in the intention-to-treat, or ITT, population. However, in a pre-specified subset of 120 subjects with
Model for End-stage Liver Disease, or MELD, scores <28, the Kaplan-Meier analysis of overall survival did approach statistical
significance. A subject’s MELD score is a tool for characterizing the severity of liver disease and degree of secondary organ
dysfunction, and also provides a prognosis for survival at 90 days. In another pre-specified exploratory analysis of 101 subjects
with less than the median age of 46.9 years, the Kaplan-Meier analysis of overall survival also favored the ELAD-treated subjects.
Earlier studies, prior to VTI-208, were
primarily designed to identify patient populations and clinical trial designs that were appropriate to pursue in pivotal clinical
studies. Two randomized controlled trials (VTI-201 and VTI-206) were conducted primarily in U.S. subjects to help better define
the population that would be appropriate for study in pivotal clinical trials. The outcomes of these studies suggested that subjects
in whom alcohol was the predominant factor leading to their acute liver failure were a particularly suitable population for study
in pivotal clinical trials.
Additionally, a 69-subject randomized, controlled
clinical trial (VTIC-301) was performed at two hospital centers in Beijing, China, primarily in subjects with an acute form of
liver failure caused by viral hepatitis B. Data showed a statistically significant improvement in transplant-free survival rates
in the ELAD-treated group as compared with the control group, while data from a subset comprising the first 49 subjects in this
clinical trial revealed a statistically significant difference in overall transplant-free survival.
In the United States, we estimate that at
least 40,000 patients annually experience an acute form of liver failure that may be addressed by the ELAD System. These include
liver failure from sAH, post-surgical liver failure, and fulminant hepatic failure. Except for liver transplant, which is severely
limited by the availability of organs or not advisable for many patients under current guidelines, the current standard-of-care
is primarily focused on the management of complications, which does not restore lost liver function and is associated with a high
rate of mortality.
In addition to the ELAD System, we are also
exploring the use of proteins produced by our VTL C3A cells to resuscitate donated livers prior to transplantation into patients
as there is a need to increase the number and quality of livers available for transplant. Our pre-clinical research in this field
is being done in collaboration with leading research centers in the U.S. and the UK.
We currently retain worldwide rights to
the ELAD System free of royalties. If we receive marketing authorization for our products, we intend to establish targeted commercialization
and marketing capabilities for our products in the United States and Europe by developing a sales force that would focus on academic
medical centers and other centers of excellence treating liver failure. In the United States, for instance, we believe that the
approximately 125 active liver transplant centers, as well as a few dozen other specialized liver centers, represent appropriate
sites for the placement of the ELAD System. As such, we believe a small, targeted sales force could effectively cover these institutions
and successfully commercialize our ELAD System, if approved. We believe a similar sized sales force would be appropriate for Europe.
For commercialization of the ELAD System, if approved, outside of the United States and Europe, we may enter into collaborations
or license agreements with strategic partners.
Corporate Information
We were incorporated in California in May
2003 as Vitagen Acquisition Corp., changed our name to Vital Therapies, Inc. in June 2003, and reincorporated in Delaware in January
2004. Our principal executive offices are located at 15010 Avenue of Science, Suite 200, San Diego, California 92128. Our telephone
number is (858) 673-6840. Our website address is
http://www.vitaltherapies.com
. Information contained on the website is
not incorporated by reference into this prospectus, and should not be considered to be part of this prospectus.
“Vital Therapies” and “ELAD”
are registered trademarks of Vital Therapies and the Vital Therapies logo is a trademark of Vital Therapies. Other service marks,
trademarks, and trade names referred to in this prospectus are the property of their respective owners. Except as set forth above
and solely for convenience, the trademarks and trade names in this prospectus are referred to without the ® and ™ symbols,
but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent
under applicable law, their rights thereto.
Implications of Being an Emerging Growth Company
We are an “emerging growth
company,” as defined in the Jumpstart Our Business Startups Act of 2012. We may remain an “emerging growth
company” until December 31, 2019 (the fiscal year-end following the fifth anniversary of the completion of our initial
public offering), although we may cease to be an “emerging growth company” earlier under certain circumstances,
including (i) if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30,
in which case we would cease to be an “emerging growth company” as of the following December 31, or (ii) if our
gross revenue exceeds $1.07 billion in any fiscal year. We refer to the Jumpstart Our Business Startups Act of 2012 herein as
the “JOBS Act,” and references herein to “emerging growth company” are intended to have the meaning
associated with it in the JOBS Act.
For as long as we remain an “emerging
growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to public
companies that are not “emerging growth companies” including, but not limited to, not being required to comply with
the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote to approve executive compensation and shareholder approval of any golden parachute payments not previously approved. We currently
plan to take advantage of these reporting exemptions until we are no longer an “emerging growth company.”
The Securities We May Offer
We may offer up to $200,000,000 of common
stock, preferred stock, warrants, debt securities, and/or units in one or more offerings and in any combination. In addition, the
selling stockholders may sell, from time to time, after we announce topline data for our VTL-308 clinical study, up to an aggregate
of 2,500,000 shares of our common stock in one or more transactions, subject to market conditions and prices, liquidity objectives
and other investment considerations. This prospectus provides you with a general description of the securities we and the selling
stockholders may offer. Each time we sell securities described herein, and in certain cases where one or more selling stockholders
sell securities pursuant to this prospectus, we or the selling stockholders, as applicable, will provide prospective investors
with a supplement to this prospectus that will contain specific information about the terms of that offering, including the specific
amounts, prices and terms of the securities offered.
We or the selling stockholders may sell
the securities to or through underwriters, dealers or agents, directly to purchasers or through a combination of any of these methods
of sale or as otherwise set forth below under “Plan of Distribution.” We and the selling stockholders, as well as any
agents acting on our or their behalf, reserve the sole right to accept and to reject in whole or in part any proposed purchase
of securities. Any prospectus supplement will set forth the names of any underwriters, dealers, agents or other entities involved
in the sale of securities described in that prospectus supplement and any applicable fee, commission or discount arrangements with
them.
Common Stock
Each holder of our common stock is entitled
to one vote for each share on all matters to be voted upon by the stockholders, and there are no cumulative rights. Subject to
any preferential rights of any outstanding preferred stock, holders of our common stock are entitled to receive ratably the dividends,
if any, as may be declared from time to time by the board of directors out of legally available funds. If there is a liquidation,
dissolution or winding up of our company, holders of our common stock would be entitled to share ratably in our net assets legally
available for distribution to stockholders after the payment of all our debts and liabilities and any preferential rights of any
outstanding preferred stock.
Preferred Stock
Our board of directors is authorized to
issue shares of preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to
determine the rights, preferences, privileges and restrictions, including dividend rights, conversion rights, voting rights, redemption
privileges and liquidation preferences, of each series of preferred stock.
Each series of preferred stock will
be more fully described in the particular prospectus supplement that will accompany this prospectus, including redemption
provisions, rights in the event of our liquidation, dissolution or winding up, voting rights and rights to convert into
common stock. We have no present plans to issue any shares of preferred stock nor are any shares of our preferred stock
presently outstanding.
Warrants
We may issue warrants for the purchase of
common stock or preferred stock. We may issue warrants independently or together with other securities.
Debt Securities
We may offer secured or unsecured obligations
in the form of one or more series of senior or subordinated debt. The senior debt securities and the subordinated debt securities
are together referred to in this prospectus as the “debt securities.” The subordinated debt securities generally will
be entitled to payment only after payment of our senior debt. Senior debt generally includes all debt for money borrowed by us,
except debt that is stated in the instrument governing the terms of that debt to be not senior to, or to have the same rank in
right of payment as, or to be expressly junior to, the subordinated debt securities. We may issue debt securities that are convertible
into shares of our common stock.
The senior and subordinated debt securities
will be issued under separate indentures between us and a trustee. We have summarized the general features of the debt securities
to be governed by the indentures. These indentures have been filed as exhibits to the registration statement of which this prospectus
forms a part. We encourage you to read these indentures. Instructions on how you can get copies of these documents are provided
under the heading “Where You Can Find More Information.”
Units
We may issue units comprised of one or more
of the other classes of securities issued by us as described in this prospectus in any combination. Each unit will be issued so
that the holder of the unit is also the holder of each security included in the unit.
RISK FACTORS
An investment in our securities involves
a high degree of risk. The prospectus supplement applicable to each offering of our securities will contain a discussion of the
risks applicable to an investment in our securities. Prior to making a decision about investing in our securities, you should carefully
consider the specific factors discussed under the heading “Risk Factors” in the applicable prospectus supplement, together
with all of the other information contained or incorporated by reference in the prospectus supplement or appearing or incorporated
by reference in this prospectus. You should also consider the risks, uncertainties and assumptions discussed under “Part
I-Item 1A-Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and “Part II-Item
1A-Risk Factors” in our Quarterly Reports on Form 10-Q, all of which are incorporated herein by reference, and may be amended,
supplemented or superseded from time to time by other reports we file with the SEC in the future and any prospectus supplement
related to a particular offering. The risks and uncertainties we have described are not the only ones we face. Additional risks
and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations.
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus, each applicable prospectus
supplement, and the information incorporated by reference in this prospectus and each applicable prospectus supplement contain
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, referred to as the Securities
Act, and Section 21E of the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act. These forward-looking
statements are based on our management’s beliefs and assumptions and on information currently available to our management.
Those statements may appear in this prospectus, any accompanying prospectus supplement and the documents incorporated herein and
therein by reference, particularly in the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” Forward-looking statements
include, but are not limited to, information concerning our possible or assumed future results of operations, business strategies,
financing plans, competitive position, industry environment, potential growth opportunities and the effects of competition. Forward-looking
statements include all statements that are not historical facts and can be identified by terms such as “anticipates,”
“believes,” “could,” “seeks,” “estimates,” “expects,” “intends,”
“may,” “plans,” “potential,” “predicts,” “projects,” “should,”
“can,” “would,” “continue,” “will” or similar expressions and the negatives of
those terms.
These forward-looking statements include,
among other things, statements about:
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the cost, timing, and results of our clinical programs for the ELAD® System, including statements related to our VTL-308 phase 3 clinical trial;
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the timing of, and our ability to obtain and maintain regulatory approvals for the ELAD System;
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regulatory developments in the United States and foreign countries;
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the potential market for the ELAD System, including our anticipated gross margins if commercialized;
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the rate and degree of market acceptance and clinical utility of the ELAD System;
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our commercialization, marketing and manufacturing capabilities and strategy;
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our plans to improve or explore future uses of the ELAD System;
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our plans to explore other uses for our VTL C3A cells;
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our plans to obtain funding for our operations;
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the performance of third parties in connection with the development of the ELAD System, including third parties involved in our clinical trials and third-party suppliers;
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the development, regulatory approval, efficacy and commercialization of competing products;
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our ability to retain key scientific or management personnel;
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our intellectual property position;
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our estimates regarding expenses, future revenue, capital requirements, projected cash runway and needs for additional financing; and
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our ability to maintain effective internal control over financial reporting.
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Forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or implied by the forward-looking statements including
those described in “Risk Factors” and elsewhere in this prospectus and the documents incorporated by reference into
this prospectus. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking
statements represent our management’s beliefs and assumptions only as of the date of this prospectus or the date of the documents
incorporated by reference herein. You should read this prospectus and the documents that we have filed as exhibits to the registration
statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially
different from what we expect.
Except as required by law, we assume no
obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially
from those anticipated in these forward-looking statements, even if new information becomes available in the future.
This prospectus, any accompanying prospectus
supplement and the documents incorporated herein and therein by reference may also contain estimates and other information concerning
our industry that are based on government and industry publications. This information involves a number of assumptions and limitations,
and you are cautioned not to give undue weight to these estimates. These government and industry publications generally indicate
that their information has been obtained from sources believed to be reliable.
RATIO OF EARNINGS TO FIXED CHARGES AND
PREFERENCE DIVIDENDS
Our earnings have been inadequate to cover
fixed charges and preference dividends. The following table sets forth the dollar amount of the coverage deficiency for each of
the years ended December 31, 2015, 2016 and 2017, and the three-month period ended March 31, 2018. We have derived the deficiency
of earnings to cover fixed charges and preference dividends from our historical financial statements. The following should be read
in conjunction with our financial statements, including the notes thereto, included in our annual report on Form 10-K for the year
ended December 31, 2017 and our quarterly report on Form 10-Q for the period ended March 31, 2018, both of which are incorporated
by reference in this prospectus. See Exhibit 12.1 hereto for additional detail regarding the computation of the deficiency of earnings
to cover fixed charges and preference dividends.
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Fiscal Year Ended December 31,
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Three Months
Ended March 31,
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2015
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2016
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2017
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2018
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Deficiency of earnings available to cover combined fixed charges and preference dividends
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$
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$
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(40,969
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$
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(52,078
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$
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(14,388
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As of the date of this prospectus, we have
no shares of preferred stock outstanding, and consequently, our ratio of earnings to combined fixed charges and preferred share
dividends and ratio of earnings to fixed charges would be identical.
USE OF PROCEEDS
Unless otherwise indicated in a prospectus
supplement, we will use the net proceeds from the sale of securities offered by this prospectus for general corporate purposes,
which may include working capital, capital expenditures and other corporate expenses. We may also use a portion of the net proceeds
for the licensing or acquisition of complementary products, technologies or businesses. However, we have no present plans, agreements
or commitments with respect to any potential acquisition, investment or license.
The timing and amount of our actual expenditures
will be based on many factors, including, but not limited to, the timing of clinical trials, preparation for the timing of any
submission of a biologics license application and decisions with respect to building commercial operations. As a result, unless
otherwise indicated in the prospectus supplement, our management will have broad discretion to allocate the net proceeds of the
offerings. Pending their ultimate use, we intend to invest the net proceeds in short-term, investment-grade, interest-bearing instruments.
We will not receive any proceeds from the
sale of shares of our common stock by the selling stockholders.
DESCRIPTION OF CAPITAL STOCK
The following is a summary of all material
characteristics of our capital stock as set forth in our amended and restated certificate of incorporation and second amended and
restated bylaws. The summary does not purport to be complete and is qualified in its entirety by reference to our amended and restated
certificate of incorporation and second amended and restated bylaws and to the applicable provisions of Delaware law.
General
Our authorized capital stock consists of
130,000,000 shares of common stock, par value $0.0001 per share, and 20,000,000 shares of preferred stock, par value $0.0001 per
share.
Common Stock
Outstanding Shares
As of March 31, 2018, there were 42,368,864
shares of our common stock outstanding, held by approximately 69 stockholders of record, and no shares of our preferred stock outstanding.
Our board of directors is authorized, without stockholder approval except as required by the listing standards of The Nasdaq Global
Market, to issue additional shares of our capital stock.
Voting
Each holder of common stock is
entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of
directors. Our amended and restated certificate of incorporation and second amended and restated bylaws do not provide for
cumulative voting rights. Because of this absence of cumulative voting, the holders of a majority of the shares of common
stock entitled to vote in any election of directors can elect all of the directors standing for election, if they should so
choose. Currently, certain stockholders affiliated with Muneer A. Satter, a member of our board of directors, have the right
to nominate some members to our board. See “Anti-Takeover Effects of Delaware Law and Our Certificate of Incorporation,
Bylaws and Fourth Amended and Restated Investors’ Rights Agreement--
Senior Preferred Investors’ Rights
Agreement
” below. In addition, our amended and restated certificate of incorporation also provides that our
directors may be removed only for cause by the affirmative vote of the holders of at least 75% of the combined voting power
of all our stockholders entitled to vote on the election of directors, voting together as a single class.
Subject to supermajority votes for some
matters, matters shall be decided by the affirmative vote of our stockholders having a majority in voting power of the votes cast
by the stockholders present or represented and voting on such matter, provided that the holders of our common stock are not allowed
to vote on any amendment to our certificate of incorporation that relates solely to the terms of one or more series of preferred
stock if the holders of such affected series are entitled, either separately or together with the holders or one or more such series,
to approve such amendment. The affirmative vote of the holders of at least 75% of the votes that all of our stockholders would
be entitled to cast in any annual election of directors and, in some cases, the affirmative vote of a majority of minority stockholders
entitled to vote in any annual election of directors are required to amend or repeal our bylaws, amend or repeal certain provisions
of our certificate of incorporation, approve certain transactions with certain affiliates, or approve the sale or liquidation of
the company. The vote of a majority of the minority of stockholders applies when an individual or entity and its affiliates or
associates together own more than 50% of the voting power of our then outstanding capital stock, excluding any such person that
owned 15% or more of our outstanding voting stock immediately prior to our initial public offering, and such a vote would require
the approval of the majority of our voting stock, excluding the voting stock held by such a majority holder.
Dividends
Subject to preferences that may be applicable
to any then outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends, if any, as may
be declared from time to time by our board of directors out of legally available funds.
Liquidation
In the event of our liquidation, dissolution
or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to
stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preferences that
may be granted to the holders of any then outstanding shares of preferred stock.
Rights and Preferences
Holders of common stock have no preemptive,
conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock. The rights,
preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders
of shares of any series of preferred stock, which we may designate and issue in the future.
Fully Paid and Nonassessable
All of our outstanding shares of common
stock are, and the shares of common stock to be issued under this prospectus, when paid for, will be fully paid and nonassessable.
Preferred Stock
Our board of directors has the authority,
without further action by the stockholders, to issue up to 20,000,000 shares of preferred stock in one or more series and to fix
the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights,
conversion rights, voting rights, redemption rights, liquidation preferences, sinking fund terms and the number of shares constituting
any series or the designation of such series, any or all of which may be greater than the rights of common stock.
Our board of directors may authorize
the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights
of the holders of common stock. The issuance of preferred stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a
change in control of our company and may adversely affect the market price of the common stock and the voting and other
rights of the holders of common stock. No shares of preferred stock are outstanding, and we have no present plan to issue any
shares of preferred stock.
Stock Options
As of March 31, 2018, we had outstanding
options to purchase an aggregate of 7,740,808 shares of our common stock pursuant to our equity plans, at a weighted-average exercise
price of $6.66 per share. As of March 31, 2018, 56,506 shares of our common stock remain available for future grant or issuance
under our 2014 Equity Incentive Plan and 261,168 shares are available for grant under our 2017 Inducement Equity Incentive Plan,
each as amended. In addition, the number of shares available for issuance under the 2014 Plan was increased by 1,200,000 shares
effective April 16, 2018.
Warrants
As of March 31, 2018, we had outstanding
warrants to purchase an aggregate of 240,620 shares of our common stock at an exercise price of $92.99 per share.
Registration Rights
Senior Preferred Investors’
Rights Agreement
Pursuant to the Fourth Amended and Restated
Investors’ Rights Agreement, dated August 28, 2013, as amended (the “Senior Preferred IRA”), certain holders
of 11,597,719 shares of common stock, including Muneer A. Satter and various trusts and other entities affiliated with Mr. Satter,
are entitled to certain rights with respect to the registration of shares of common stock under the Securities Act. Subject to
company-imposed lock-ups and certain limitations in the Senior Preferred IRA, including our ability to delay registration in certain
circumstances, the holders of at least 25% of these securities then outstanding may demand on three occasions, that we use our
reasonable best efforts to register these securities using a long form registration statement for public resale if the anticipated
aggregate offering price, net of underwriting discounts and commissions, would exceed $15 million. If we register any of our common
stock either for our own account or for the account of other security holders, the holders of these securities are entitled to
include their shares of common stock in that registration, subject to the ability of the underwriters to limit the number of shares
included in the offering. We are obligated to use our reasonable best efforts to make short form registration statements available,
and the holders of at least 25% of these securities then outstanding may also demand, but not more than two times in any 12-month
period, that we register all or a portion of these securities using a short form registration statement, provided, among other
limitations, that the proposed aggregate selling price is at least $15 million. We will be responsible for paying all registration
expenses, including the reasonable fees of legal counsel for the selling holders, and the holders selling their shares will be
responsible for paying all selling expenses.
Registration rights under the Senior Preferred
IRA terminate, as to a given holder of registration rights, when such holder and such holder’s affiliates can sell all of
their registrable securities in a three-month period pursuant to Rule 144. Accordingly, only Muneer A. Satter and various trusts
and other entities affiliated with Mr. Satter who were parties to the Senior Preferred IRA have existing registration rights.
Anti-Takeover Effects of Delaware Law and Our Certificate
of Incorporation, Bylaws and Fourth Amended and Restated Investors’ Rights Agreement
Certain provisions of Delaware law,
our amended and restated certificate of incorporation, our second amended and restated bylaws and the Senior Preferred IRA
contain provisions that could have the effect of delaying, deferring or discouraging another party from acquiring control of
us. These provisions, which are summarized below, are expected to discourage certain types of coercive takeover practices and
inadequate takeover bids. These provisions are also designed in part to encourage anyone seeking to acquire control of us to
first negotiate with our board of directors. We believe that the advantages gained by protecting our ability to negotiate
with any unsolicited and potentially unfriendly acquirer outweigh the disadvantages of discouraging such proposals, including
those priced above the then-current market value of our common stock, because, among other reasons, the negotiation of such
proposals could improve their terms.
Certificate of Incorporation and
Bylaws
Our amended and restated certificate of
incorporation and second amended and restated bylaws include provisions that:
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authorize our board of directors to issue, without further action by the stockholders, up to 20,000,000 shares of undesignated preferred stock;
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require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;
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specify that special meetings of our stockholders can be called only by a supermajority (75%) vote of our directors then in office;
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our board of directors may amend or repeal our bylaws only pursuant to a supermajority (75%) vote of our directors then in office;
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our stockholders may amend or repeal our bylaws only pursuant to a supermajority (75% and majority of the minority, if applicable) vote of the outstanding shares of our capital stock;
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require in general the approval of a supermajority (75% and majority of the minority, if applicable) vote of our outstanding shares of capital stock to amend or repeal certain provisions of our certificate of incorporation;
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require the approval of a supermajority (75% and majority of the minority, if applicable) vote of our outstanding shares of capital stock to approve the sale or liquidation of the company;
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establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors;
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provide that directors may be removed only for cause by a supermajority (75%) vote of our outstanding shares of capital stock;
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provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;
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provide that in general the number of directors on our board may only be fixed from time to time by a supermajority (75%) vote of our directors then in office; and
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establish that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered terms.
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Senior Preferred Investors’
Rights Agreement
The Senior Preferred IRA also
provides that, for so long as Muneer A. Satter and various trusts and other entities affiliated with Mr. Satter, referred to
as the Satter Investors, hold at least 30% of our outstanding common stock, the Satter Investors have the right to nominate
40% of our directors (rounded up to the nearest whole number). If the Satter Investors hold less than 30% (but at least 20%)
of our outstanding common stock, they have the right to nominate 30% of our directors (rounded up to the nearest whole
number). If the Satter Investors hold less than 20% (but at least 10%) of our outstanding common stock, they have the right
to nominate 20% of our directors (rounded up to the nearest whole number). If the Satter Investors hold less than 10% (but at
least 2%) of our outstanding common stock, they have the right to nominate 10% of our directors (rounded up to the nearest
whole number). For so long as the Satter Investors hold less than 2% of our outstanding common stock, they do not have the
contractual right to nominate any representatives to our board of directors. To date the Satter Investors have not exercised
their rights to nominate any directors, but they have reserved the right to do so in the future.
Although not currently serving as such,
the Senior Preferred IRA provides that Mr. Satter can elect to serve as our Lead Director. Currently, Mr. Hasnain is serving as
our Chairman.
Delaware Anti-Takeover Statute
We have elected in our amended and restated
certificate of incorporation not to be subject to Section 203 of the Delaware General Corporation Law, an anti-takeover law. In
general, Section 203 prohibits a publicly-held Delaware corporation from engaging in a business combination, such as a merger,
with a person or group owning 15% or more of the corporation’s voting stock for a period of three years following the date
the person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which
the person became an interested stockholder is approved in a prescribed manner. Accordingly, we are not subject to any anti-takeover
effects of Section 203. However, our amended and restated certificate of incorporation contains provisions that have the same effect
as Section 203, except that they provide that certain of our current stockholders, including Mr. Satter and entities affiliated
with him, and any persons to whom certain of our current stockholders sell their common stock will be deemed to have been approved
by our board of directors, and thereby not subject to the restrictions set forth in Section 203.
Listing
Our common stock is listed on the Nasdaq
Global Market under the symbol “VTL.”
Transfer Agent and Registrar
The transfer agent and registrar for our
common stock is American Stock Transfer & Trust Company, LLC, or AST. The transfer agent and registrar’s address is 6201
15th Avenue, Brooklyn, New York 11219.
DESCRIPTION OF THE WARRANTS
We may issue warrants for the purchase of
our preferred stock or common stock, or any combination thereof. Warrants may be issued independently or together with our preferred
stock or common stock and may be attached to or separate from any offered securities. Each series of warrants will be issued under
a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent. The warrant agent will
act solely as our agent in connection with the warrants. The warrant agent will not have any obligation or relationship of agency
or trust for or with any holders or beneficial owners of warrants.
The prospectus supplement relating to a
particular series of warrants to purchase our common stock or preferred stock will describe the terms of the warrants, including
the following:
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the title of the warrants;
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the offering price for the warrants, if any;
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the aggregate number of warrants;
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the designation and terms of the common stock or preferred stock that may be purchased upon exercise of the warrants;
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if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each security;
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if applicable, the date from and after which the warrants and any securities issued with the warrants will be separately transferable;
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the number of shares of common stock or preferred stock that may be purchased upon exercise of a warrant and the exercise price for the warrants;
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the dates on which the right to exercise the warrants shall commence and expire;
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if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
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the currency or currency units in which the offering price, if any, and the exercise price are payable;
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if applicable, a discussion of material U.S. federal income tax considerations;
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the anti-dilution provisions of the warrants, if any;
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the redemption or call provisions, if any, applicable to the warrants;
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any adjustments to the terms of the warrants resulting from the occurrence of certain events or from the entry into or consummation by us of certain transactions;
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any provisions with respect to the holder’s right to require us to repurchase the warrants upon a change in control or similar event; and
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any additional terms of the warrants, including procedures and limitations relating to the exchange, exercise and settlement of the warrants.
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Holders of warrants will not be entitled:
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to vote, consent or receive dividends;
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receive notice as stockholders with respect to any meeting of stockholders for the election of our directors or any other matter; or
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exercise any rights as stockholders of us.
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This summary of certain provisions of the
warrants is not complete. For the terms of a particular series of warrants, you should refer to the prospectus supplement for that
series of warrants and the warrant agreement for that particular series.
DESCRIPTION OF THE DEBT SECURITIES
The debt securities may be either
secured or unsecured and will either be our senior debt securities or our subordinated debt securities. The debt securities
may be issued under one or more separate indentures between us and a trustee to be specified in an accompanying prospectus
supplement. Senior debt securities may be issued under a senior indenture and subordinated debt securities may be issued
under a subordinated indenture. Together, the senior indenture and the subordinated indenture are called indentures in this
description. This prospectus, together with the applicable prospectus supplement, will describe the terms of a particular
series of debt securities.
The following is a summary of selected provisions
and definitions of the indentures and debt securities to which any prospectus supplement may relate. Other specific terms of the
applicable indenture and debt securities will be described in the applicable prospectus supplement. The summary of selected provisions
of the indentures and the debt securities appearing below is not complete and is subject to, and qualified entirely by reference
to, all of the provisions of the applicable indenture and certificates evidencing the applicable debt securities. If any particular
terms of the indenture or debt securities described in a prospectus supplement differ from any of the terms described below, then
the terms described below will be deemed to have been superseded by that prospectus supplement. For additional information, you
should look at the applicable indenture and the certificate evidencing the applicable debt security that is filed as an exhibit
to the registration statement that includes the prospectus.
General
Debt securities may be issued in separate
series without limitation as to aggregate principal amount. We may specify a maximum aggregate principal amount for the debt securities
of any series.
We are not limited as to the amount of debt
securities we may issue under the indentures. Unless otherwise provided in a prospectus supplement, a series of debt securities
may be reopened to issue additional debt securities of such series.
The prospectus supplement relating to a
particular series of debt securities will set forth:
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whether the debt securities are senior or subordinated;
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the offering price;
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the title;
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any limit on the aggregate principal amount;
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the person who shall be entitled to receive interest, if other than the record holder on the record date;
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the date or dates the principal will be payable;
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the interest rate or rates, which may be fixed or variable, if any, the date from which interest will accrue, the interest payment dates and the regular record dates, or the method for calculating the dates and rates;
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the place where payments may be made;
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any mandatory or optional redemption provisions or sinking fund provisions and any applicable redemption or purchase prices associated with these provisions;
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if issued other than in denominations of U.S. $1,000 or any multiple of U.S. $1,000, the denominations in which the debt securities shall be issuable;
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if applicable, the method for determining how the principal, premium, if any, or interest will be calculated by reference to an index or formula;
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if other than U.S. currency, the currency or currency units in which principal, premium, if any, or interest will be payable and whether we or a holder may elect payment to be made in a different currency;
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the portion of the principal amount that will be payable upon acceleration of maturity, if other than the entire principal amount;
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if the principal amount payable at stated maturity will not be determinable as of any date prior to stated maturity, the amount or method for determining the amount which will be deemed to be the principal amount;
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if applicable, whether the debt securities shall be subject to the defeasance provisions described below under “Satisfaction and Discharge; Defeasance” or such other defeasance provisions specified in the applicable prospectus supplement for the debt securities;
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any conversion or exchange provisions;
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whether the debt securities will be issuable in the form of a global security;
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the deletion, addition or change in any event of default;
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any change or modification to the subordination provisions applicable to the subordinated debt securities if different from those described below under “Subordinated Debt Securities;”
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any deletion, addition or change in the covenants set forth in Article 10 of the indenture;
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any paying agents, authenticating agents, security registrars or other agents for the debt securities, if other than the trustee;
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any provisions relating to any security provided for the debt securities, including any provisions regarding the circumstances under which collateral may be released or substituted;
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any provisions relating to guaranties for the securities and any circumstances under which there may be additional obligors;
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any provisions granting special rights to holders when a specified event occurs;
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any special tax provisions that apply to the debt securities;
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with respect to the debt securities that do not bear interest, the dates for certain required reports to the applicable trustee;
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any and all additional, eliminated or changed terms that will apply to the debt securities; and
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any other terms of such debt securities.
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Unless otherwise specified in the prospectus
supplement, the debt securities will be registered debt securities. Debt securities may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which at time of issuance is below market rates. The U.S.
federal income tax considerations applicable to debt securities sold at a discount will be described in the applicable prospectus
supplement.
Exchange and Transfer
Debt securities may be transferred or exchanged
at the office of the security registrar or at the office of any transfer agent designated by us.
We will not impose a service charge for
any transfer or exchange, but we may require holders to pay any tax or other governmental charges associated with any transfer
or exchange.
In the event of any partial redemption of
debt securities of any series, we will not be required to:
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issue, register the transfer of, or exchange, any debt security of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption and ending at the close of business on the day of the mailing; or
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register the transfer of or exchange any debt security of that series selected for redemption, in whole or in part, except the unredeemed portion of the debt security being redeemed in part.
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We will appoint the trustee as the initial
security registrar. Any transfer agent, in addition to the security registrar initially designated by us, will be named in the
prospectus supplement. We may designate additional transfer agents or change transfer agents or change the office of the transfer
agent. However, we will be required to maintain a transfer agent in each place of payment for the debt securities of each series.
Global Securities
The debt securities of any series may be
represented, in whole or in part, by one or more global securities. Each global security will:
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be registered in the name of a depositary, or its nominee, that we will identify in a prospectus supplement;
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be deposited with the depositary or nominee or custodian; and
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bear any required legends.
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No global security may be exchanged in whole
or in part for debt securities registered in the name of any person other than the depositary or any nominee unless:
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the depositary has notified us that it is unwilling or unable to continue as depositary or has ceased to be qualified to act as depositary;
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an event of default is continuing with respect to the debt securities of the applicable series; or
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any other circumstance described in a prospectus supplement has occurred permitting or requiring the issuance of any such security.
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As long as the depositary, or its nominee,
is the registered owner of a global security, the depositary or nominee will be considered the sole owner and holder of the debt
securities represented by the global security for all purposes under the indentures. Except in the above limited circumstances,
owners of beneficial interests in a global security will not be:
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entitled to have the debt securities registered in their names;
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entitled to physical delivery of certificated debt securities; or
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considered to be holders of those debt securities under the indenture.
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Payments on a global security will be made
to the depositary or its nominee as the holder of the global security. Some jurisdictions have laws that require that certain purchasers
of securities take physical delivery of such securities in definitive form. These laws may impair the ability to transfer beneficial
interests in a global security.
Institutions that have accounts with the
depositary or its nominee are referred to as “participants.” Ownership of beneficial interests in a global security
will be limited to participants and to persons that may hold beneficial interests through participants. The depositary will credit,
on its book-entry registration and transfer system, the respective principal amounts of debt securities represented by the global
security to the accounts of its participants.
Ownership of beneficial interests in a global
security will be shown on and effected through records maintained by the depositary, with respect to participants’ interests,
or any participant, with respect to interests of persons held by participants on their behalf.
Payments, transfers and exchanges relating
to beneficial interests in a global security will be subject to policies and procedures of the depositary. The depositary policies
and procedures may change from time to time. Neither any trustee nor we will have any responsibility or liability for the depositary’s
or any participant’s records with respect to beneficial interests in a global security.
Payment and Paying Agents
Unless otherwise indicated in a prospectus
supplement, the provisions described in this paragraph will apply to the debt securities. Payment of interest on a debt security
on any interest payment date will be made to the person in whose name the debt security is registered at the close of business
on the regular record date. Payment on debt securities of a particular series will be payable at the office of a paying agent or
paying agents designated by us. However, at our option, we may pay interest by mailing a check to the record holder. The trustee
will be designated as our initial paying agent.
We may also name any other paying agents
in a prospectus supplement. We may designate additional paying agents, change paying agents or change the office of any paying
agent. However, we will be required to maintain a paying agent in each place of payment for the debt securities of a particular
series.
All moneys paid by us to a paying agent
for payment on any debt security that remain unclaimed for a period ending the earlier of:
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10 business days prior to the date the money would be turned over to the applicable state; or
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at the end of two years after such payment was due,
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will be repaid to us thereafter. The holder may look only to
us for such payment.
No Protection in the Event of a Change of Control
Unless otherwise indicated in a prospectus
supplement with respect to a particular series of debt securities, the debt securities will not contain any provisions that may
afford holders of the debt securities protection in the event we have a change in control or in the event of a highly-leveraged
transaction, whether or not such transaction results in a change in control.
Covenants
Unless otherwise indicated in a prospectus
supplement with respect to a particular series of debt securities, the debt securities will not contain any financial or restrictive
covenants.
Consolidation, Merger and Sale of Assets
Unless we indicate otherwise in a prospectus
supplement with respect to a particular series of debt securities, we may not consolidate with or merge into any other person (other
than one of our subsidiaries), in a transaction in which we are not the surviving corporation, or convey, transfer or lease our
properties and assets substantially as an entirety to, any person (other than a subsidiary of Vital Therapies, Inc.), unless:
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the successor entity, if any, is a U.S. corporation, limited liability company, partnership, trust or other business entity;
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the successor entity assumes our obligations on the debt securities and under the indentures;
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immediately after giving effect to the transaction, no default or event of default shall have occurred and be continuing; and
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certain other conditions specified in the indenture are met.
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Events of Default
Unless we indicate otherwise in a prospectus
supplement, the following will be events of default for any series of debt securities under the indentures:
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we fail to pay principal of or any premium on any debt security of that series when due;
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(2)
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we fail to pay any interest on any debt security of that series for 30 days after it becomes due;
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(3)
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we fail to deposit any sinking fund payment when due;
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(4)
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we fail to perform any other covenant in the indenture and such failure continues for 90 days after we are given the notice required in the indentures; and
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(5)
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certain events involving our bankruptcy, insolvency or reorganization.
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Additional or different events of default
applicable to a series of debt securities may be described in a prospectus supplement. An event of default of one series of debt
securities is not necessarily an event of default for any other series of debt securities.
The trustee may withhold notice to the holders
of any default, except defaults in the payment of principal, premium, if any, interest, any sinking fund installment on, or with
respect to any conversion right of, the debt securities of such series. However, the trustee must consider it to be in the interest
of the holders of the debt securities of such series to withhold this notice.
Unless we indicate otherwise in a
prospectus supplement, if an event of default, other than an event of default described in clause (5) above, shall occur and
be continuing with respect to any series of debt securities, either the trustee or the holders of at least 25% in aggregate
principal amount of the outstanding securities of that series may declare the principal amount and premium, if any, of the
debt securities of that series, or if any debt securities of that series are original issue discount securities, such other
amount as may be specified in the applicable prospectus supplement, in each case together with accrued and unpaid interest
thereon, if any, to be due and payable immediately.
Unless we indicate otherwise in a prospectus
supplement, if an event of default described in clause (5) above shall occur, the principal amount and premium, if any, of all
the debt securities of that series, or if any debt securities of that series are original issue discount securities, such other
amount as may be specified in the applicable prospectus supplement, in each case together with accrued and unpaid interest thereon,
if any, will automatically become immediately due and payable. Any payment by us on the subordinated debt securities following
any such acceleration will be subject to the subordination provisions described below under “Subordinated Debt Securities.”
Notwithstanding the foregoing, each indenture
will provide that we may, at our option, elect that the sole remedy for an event of default relating to our failure to comply with
our obligations described under the section entitled “Reports” below or our failure to comply with the requirements
of Section 314(a)(1) of the Trust Indenture Act will for the first 180 days after the occurrence of such an event of default consist
exclusively of the right to receive additional interest on the relevant series of debt securities at an annual rate equal to (i)
0.25% of the principal amount of such series of debt securities for the first 90 days after the occurrence of such event of default
and (ii) 0.50% of the principal amount of such series of debt securities from the 91st day to, and including, the 180th day after
the occurrence of such event of default, which we call “additional interest.” If we so elect, the additional interest
will accrue on all outstanding debt securities from and including the date on which such event of default first occurs until such
violation is cured or waived and shall be payable on each relevant interest payment date to holders of record on the regular record
date immediately preceding the interest payment date. On the 181st day after such event of default (if such violation is not cured
or waived prior to such 181st day), the debt securities will be subject to acceleration as provided above. In the event we do not
elect to pay additional interest upon any such event of default in accordance with this paragraph, the debt securities will be
subject to acceleration as provided above.
In order to elect to pay the additional
interest as the sole remedy during the first 180 days after the occurrence of any event of default relating to the failure to comply
with the reporting obligations in accordance with the preceding paragraph, we must notify all holders of debt securities and the
trustee and paying agent of such election prior to the close of business on the first business day following the date on which
such event of default occurs. Upon our failure to timely give such notice or pay the additional interest, the debt securities will
be immediately subject to acceleration as provided above.
After acceleration, the holders of a majority
in aggregate principal amount of the outstanding securities of that series may, under certain circumstances, rescind and annul
such acceleration if all events of default, other than the non-payment of accelerated principal, or other specified amounts or
interest, have been cured or waived.
Other than the duty to act with the required
care during an event of default, the trustee will not be obligated to exercise any of its rights or powers at the request of the
holders unless the holders shall have offered to the trustee reasonable indemnity. Generally, the holders of a majority in aggregate
principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee.
A holder of debt securities of any series
will not have any right to institute any proceeding under the indentures, or for the appointment of a receiver or a trustee, or
for any other remedy under the indentures, unless:
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the holder has previously given to the trustee written notice of a continuing event of default with respect to the debt securities of that series;
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(2)
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the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made a written request and have offered reasonable indemnity to the trustee to institute the proceeding; and
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the trustee has failed to institute the proceeding and has not received direction inconsistent with the original request from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series within 60 days after the original request.
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Holders may, however, sue to enforce the
payment of principal, premium or interest on any debt security on or after the due date or to enforce the right, if any, to convert
any debt security (if the debt security is convertible) without following the procedures listed in (1) through (3) above.
We will furnish the trustee an annual statement
from our officers as to whether or not we are in default in the performance of the conditions and covenants under the indenture
and, if so, specifying all known defaults.
Modification and Waiver
Unless we indicate otherwise in a prospectus
supplement, the applicable trustee and we may make modifications and amendments to an indenture with the consent of the holders
of a majority in aggregate principal amount of the outstanding securities of each series affected by the modification or amendment.
We may also make modifications and amendments
to the indentures for the benefit of holders without their consent, for certain purposes including, but not limited to:
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to evidence the succession of another person to Vital Therapies, or successive successions, and the assumption by any such successor of the covenants of Vital Therapies in the indentures in compliance with Article 8 of the indentures;
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adding covenants;
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adding events of default;
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making certain changes to facilitate the issuance of the debt securities;
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to add to, change or eliminate any of the provisions of the indentures or series of securities, provided that any such addition, change or elimination (A) shall neither (i) apply to any security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify the rights of the holder of any such security with respect to such provision or (B) shall become effective only when there is no such security outstanding;
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securing the debt securities;
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providing for guaranties of, or additional obligors on, the debt securities;
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to establish the form or term of debt securities as permitted by Sections 2.1 and 3.1 of the indenture;
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providing for a successor trustee or additional trustees;
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conforming the indenture to the description of the securities set forth in this prospectus or the accompanying prospectus supplement;
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curing any ambiguity, defect or inconsistency; provided that such action shall not adversely affect the interest of the holders in any material respect;
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permitting or facilitating the defeasance and discharge of the debt securities;
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make such other provisions in regard to matters or questions arising under the indentures or under any supplemental indentures as our board of directors may deem necessary or desirable, and which does not in each case adversely affect the interests of the holders of the debt securities of a series; and
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comply with requirements of the SEC in order to effect or maintain the qualifications of the indentures under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).
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However, neither the trustee nor we may
make any modification or amendment without the consent of the holder of each outstanding security of that series affected by the
modification or amendment if such modification or amendment would:
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change the stated maturity of the principal of, or any installment of principal or interest on, any debt security;
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reduce the principal, premium, if any, or interest on any debt security or any amount payable upon redemption or repurchase, whether at our option or the option of any holder, or reduce the amount of any sinking fund payments;
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reduce the principal of an original issue discount security or any other debt security payable on acceleration of maturity;
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change the place of payment or the currency in which any debt security is payable;
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impair the right to enforce any payment after the stated maturity or redemption date;
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if subordinated debt securities, modify the subordination provisions in a materially adverse manner to the holders;
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adversely affect the right to convert any debt security if the debt security is a convertible debt security; or
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change the provisions in the indenture that relate to modifying or amending the indenture.
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Satisfaction and Discharge; Defeasance
We may be discharged from our obligations
on the debt securities, subject to limited exceptions, of any series that have matured or will mature or be redeemed within one
year if we deposit enough money with the trustee to pay all the principal, interest and any premium due to the stated maturity
date or redemption date of the debt securities.
Each indenture contains a provision that
permits us to elect either or both of the following:
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we may elect to be discharged from all of our obligations, subject to limited exceptions, with respect to any series of debt securities then outstanding. If we make this election, the holders of the debt securities of the series will not be entitled to the benefits of the indenture, except for the rights of holders to receive payments on debt securities or the registration of transfer and exchange of debt securities and replacement of lost, stolen or mutilated debt securities.
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we may elect to be released from our obligations under some or all of any financial or restrictive covenants applicable to the series of debt securities to which the election relates and from the consequences of an event of default resulting from a breach of those covenants.
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To make either of the above elections, we
must irrevocably deposit in trust with the trustee enough money to pay in full the principal, interest and premium on the debt
securities. This amount may be made in cash and/or U.S. government obligations or, in the case of debt securities denominated in
a currency other than U.S. dollars, cash in the currency in which such series of securities is denominated and/or foreign government
obligations. As a condition to either of the above elections, for debt securities denominated in U.S. dollars, we must deliver
to the trustee an opinion of counsel that the holders of the debt securities will not recognize income, gain or loss for U.S. federal
income tax purposes as a result of the action.
With respect to debt securities of any series
that are denominated in a currency other than United States dollars, “foreign government obligations” means:
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direct obligations of the government that issued or caused to be issued the currency in which such securities are denominated and for the payment of which obligations its full faith and credit is pledged, or, with respect to debt securities of any series which are denominated in Euros, direct obligations of certain members of the European Union for the payment of which obligations the full faith and credit of such members is pledged, which in each case are not callable or redeemable at the option of the issuer thereof; or
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obligations of a person controlled or supervised by or acting as an agency or instrumentality of a government described in the bullet above the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which are not callable or redeemable at the option of the issuer thereof.
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Notices
Notices to holders will be given by mail
to the addresses of the holders in the security register.
Governing Law
The indentures and the debt securities will
be governed by, and construed under, the laws of the State of New York, except to the extent that the Trust Indenture Act is applicable.
No Personal Liability of Directors, Officers, Employees and
Stockholders
No incorporator, stockholder, employee,
agent, officer, director or subsidiary of ours will have any liability for any obligations of ours, or because of the creation
of any indebtedness under the debt securities, the indentures or supplemental indentures. The indentures provide that all such
liability is expressly waived and released as a condition of, and as a consideration for, the execution of such indentures and
the issuance of the debt securities.
Regarding the Trustee
The indentures limit the right of the trustee,
should it become our creditor, to obtain payment of claims or secure its claims.
The trustee will be permitted to engage
in certain other transactions with us. However, if the trustee acquires any conflicting interest, and there is a default under
the debt securities of any series for which it is trustee, the trustee must eliminate the conflict or resign.
Subordinated Debt Securities
The following provisions will be applicable
with respect to each series of subordinated debt securities, unless otherwise stated in the prospectus supplement relating to that
series of subordinated debt securities.
The indebtedness evidenced by the subordinated
debt securities of any series is subordinated, to the extent provided in the subordinated indenture and the applicable prospectus
supplement, to the prior payment in full, in cash or other payment satisfactory to the holders of senior debt, of all senior debt,
including any senior debt securities.
Upon any distribution of our assets upon
any dissolution, winding up, liquidation or reorganization, whether voluntary or involuntary, marshalling of assets, assignment
for the benefit of creditors, or in bankruptcy, insolvency, receivership or other similar proceedings, payments on the subordinated
debt securities will be subordinated in right of payment to the prior payment in full in cash or other payment satisfactory to
holders of senior debt of all senior debt.
In the event of any acceleration of the
subordinated debt securities of any series because of an event of default with respect to the subordinated debt securities of that
series, holders of any senior debt would be entitled to payment in full in cash or other payment satisfactory to holders of senior
debt of all senior debt before the holders of subordinated debt securities are entitled to receive any payment or distribution.
In addition, the subordinated debt securities
will be structurally subordinated to all indebtedness and other liabilities of our subsidiaries, including trade payables and lease
obligations. This occurs because our right to receive any assets of our subsidiaries upon their liquidation or reorganization,
and your right to participate in those assets, will be effectively subordinated to the claims of that subsidiary’s creditors,
including trade creditors, except to the extent that we are recognized as a creditor of such subsidiary. If we are recognized as
a creditor of that subsidiary, our claims would still be subordinate to any security interest in the assets of the subsidiary and
any indebtedness of the subsidiary senior to us.
We are required to promptly notify holders
of senior debt or their representatives under the subordinated indenture if payment of the subordinated debt securities is accelerated
because of an event of default.
Under the subordinated indenture, we may
not make payment on the subordinated debt securities if:
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a default in our obligations to pay principal, premium, if any, interest or other amounts on our senior debt occurs and the default continues beyond any applicable grace period, which we refer to as a payment default; or
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any other default occurs and is continuing with respect to designated senior debt that permits holders of designated senior debt to accelerate its maturity, which we refer to as a non-payment default, and the trustee receives a payment blockage notice from us or some other person permitted to give the notice under the subordinated indenture.
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We will resume payments on the subordinated
debt securities:
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in case of a payment default, when the default is cured or waived or ceases to exist, and
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in case of a non-payment default, the earlier of when the default is cured or waived or ceases to exist or 179 days after the receipt of the payment blockage notice.
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No new payment blockage period may commence
on the basis of a non-payment default unless 365 days have elapsed from the effectiveness of the immediately prior payment blockage
notice. No non-payment default that existed or was continuing on the date of delivery of any payment blockage notice to the trustee
shall be the basis for a subsequent payment blockage notice.
As a result of these subordination provisions,
in the event of our bankruptcy, dissolution or reorganization, holders of senior debt may receive more, ratably, and holders of
the subordinated debt securities may receive less, ratably, than our other creditors. The subordination provisions will not prevent
the occurrence of any event of default under the subordinated indenture.
The subordination provisions will not apply
to payments from money or government obligations held in trust by the trustee for the payment of principal, interest and premium,
if any, on subordinated debt securities pursuant to the provisions described under the section entitled “Satisfaction and
Discharge; Defeasance,” if the subordination provisions were not violated at the time the money or government obligations
were deposited into trust.
If the trustee or any holder receives any
payment that should not have been made to them in contravention of subordination provisions before all senior debt is paid in full
in cash or other payment satisfactory to holders of senior debt, then such payment will be held in trust for the holders of senior
debt.
Senior debt securities will constitute senior
debt under the subordinated indenture.
Additional or different subordination provisions
may be described in a prospectus supplement relating to a particular series of debt securities.
Definitions
“Designated senior debt” means
our obligations under any particular senior debt in which the instrument creating or evidencing the same or the assumption or guarantee
thereof, or related agreements or documents to which we are a party, expressly provides that such indebtedness shall be designated
senior debt for purposes of the subordinated indenture. The instrument, agreement or other document evidencing any designated senior
debt may place limitations and conditions on the right of such senior debt to exercise the rights of designated senior debt.
Indebtedness” means the following,
whether absolute or contingent, secured or unsecured, due or to become due, outstanding on the date of the indenture for such series
of securities or thereafter created, incurred or assumed:
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our indebtedness evidenced by a credit or loan agreement, note, bond, debenture or other written obligation;
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all of our obligations for money borrowed;
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all of our obligations evidenced by a note or similar instrument given in connection with the acquisition of any businesses, properties or assets of any kind,
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our obligations:
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as lessee under leases required to be capitalized on the balance sheet of the lessee under generally accepted accounting principles, or
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as lessee under leases for facilities, capital equipment or related assets, whether or not capitalized, entered into or leased for financing purposes;
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all of our obligations under interest rate and currency swaps, caps, floors, collars, hedge agreements, forward contracts or similar agreements or arrangements;
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all of our obligations with respect to letters of credit, bankers’ acceptances and similar facilities, including reimbursement obligations with respect to the foregoing;
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all of our obligations issued or assumed as the deferred purchase price of property or services, but excluding trade accounts payable and accrued liabilities arising in the ordinary course of business;
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all obligations of the type referred to in the above clauses of another person, the payment of which, in either case, we have assumed or guaranteed, for which we are responsible or liable, directly or indirectly, jointly or severally, as obligor, guarantor or otherwise, or which are secured by a lien on our property; and
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renewals, extensions, modifications, replacements, restatements and refundings of, or any indebtedness or obligation issued in exchange for, any such indebtedness or obligation described in the above clauses of this definition.
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“Senior debt” means the principal
of, premium, if any, and interest, including all interest accruing subsequent to the commencement of any bankruptcy or similar
proceeding, whether or not a claim for post-petition interest is allowable as a claim in any such proceeding, and rent payable
on or in connection with, and all fees and other amounts payable in connection with, our indebtedness. However, senior debt shall
not include:
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any debt or obligation if its terms or the terms of the instrument under which or pursuant to which it is issued expressly provide that it shall not be senior in right of payment to the subordinated debt securities or expressly provide that such indebtedness is on the same basis or “junior” to the subordinated debt securities; or
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debt to any of our subsidiaries, a majority of the voting stock of which is owned, directly or indirectly, by us.
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“Subsidiary” means a corporation
more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by us or by one or more of our other subsidiaries
or by a combination of us and our other subsidiaries. For purposes of this definition, “voting stock” means stock or
other similar interests which ordinarily has or have voting power for the election of directors, or persons performing similar
functions, whether at all times or only so long as no senior class of stock or other interests has or have such voting power by
reason of any contingency.
DESCRIPTION OF THE UNITS
We may issue units comprised of one or more
of the other classes of securities described in this prospectus in any combination. Each unit will be issued so that the holder
of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations
of a holder of each included security. The units may be issued under unit agreements to be entered into between us and a unit agent,
as detailed in the prospectus supplement relating to the units being offered. The prospectus supplement will describe:
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the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances the securities comprising the units may be held or transferred separately;
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a description of the terms of any unit agreement governing the units;
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a description of the provisions for the payment, settlement, transfer or exchange of the units;
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a discussion of material federal income tax considerations, if applicable; and
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whether the units if issued as a separate security will be issued in fully registered or global form.
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The descriptions of the units in this prospectus
and in any prospectus supplement are summaries of the material provisions of the applicable agreements. These descriptions do not
restate those agreements in their entirety and may not contain all the information that you may find useful. We urge you to read
the applicable agreements because they, and not the summaries, define your rights as holders of the units. For more information,
please review the forms of the relevant agreements, which will be filed with the SEC promptly after the offering of units and will
be available as described in the section titled “Where You Can Find More Information.”
SELLING STOCKHOLDERS
This prospectus also relates to the possible
resale from time to time, after we announce topline data for our VTL-308 clinical study, by the stockholders named herein, who
we refer to in this prospectus as the “selling stockholders,” of up to an aggregate maximum amount of 2,500,000 shares
of our common stock in one or more transactions, subject to market conditions and prices, liquidity objectives and other investment
considerations. Such shares of common stock were issued and outstanding prior to the original filing date of the registration statement
of which this prospectus forms a part. The selling stockholders originally acquired the shares of our common stock included in
this prospectus through (i) our directed share program at our initial public offering, our follow-on public offerings, or otherwise
on the open market, and (ii) several private placements of our common stock or convertible preferred stock prior to our initial
public offering, with all such shares of convertible preferred stock converted into shares of our common stock in connection with
our initial public offering. Additional information about the selling stockholders, where applicable, will be set forth in an applicable
prospectus supplement, documents incorporated by reference in this prospectus or in a free writing prospectus we file with the
SEC.
The following table sets forth the information
about the selling stockholders, including the number of shares of our common stock beneficially owned by such selling stockholders
immediately prior to the date of this prospectus, the number of shares offered hereby and registered by the registration statement
of which this prospectus is a part, and the number of shares of our common stock to be beneficially owned by such selling stockholders
after this offering. The number of shares to be owned after this offering assumes that all shares covered by this prospectus will
be sold by the selling stockholders and that no additional shares of our common stock are subsequently bought or sold by the selling
stockholders.
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Name
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Shares
Beneficially Owned
Prior
to the Date of this Prospectus
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Shares
Subject to Sale
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Shares Beneficially Owned After Sale of All Shares Subject to Sale Pursuant to this Prospectus
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Number of Shares
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Percent
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Pursuant to this Prospectus
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Number of Shares
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Percent
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Satter Medical Technology Partners, L.P.
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4,250,000 (1)(3)
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10.0
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933,469
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3,316,531
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7.8
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Trusts and Other Entities Affiliated with Muneer A. Satter
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7,347,719 (2)(3)
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17.3
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1,566,531
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5,781,188
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13.6
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(1) Muneer A. Satter has sole voting and dispositive power over
all such shares. Mr. Satter disclaims beneficial ownership of all such shares, except to the extent of his pecuniary interest.
(2) Includes (a) 4,202,930 shares that are held by the Muneer
A. Satter Revocable Trust for which Mr. Satter serves as trustee and, in such capacity, has sole voting and dispositive power over
all such shares and (b) 2,929,347 shares that are held by various other trusts and other entities for which Mr. Satter serves as
trustee, investment adviser or manager and, in such capacity, has sole voting and dispositive power over all such shares. Also
includes (i) warrants to acquire 60,639 shares of common stock that are held by the Muneer A. Satter Revocable Trust, (ii) warrants
to acquire 61,533 shares of common stock that are held by various trusts and other entities for which Mr. Satter serves as trustee,
investment adviser or manager, and (iii) stock options to purchase 93,270 shares of common stock held by Mr. Satter. Excludes a
stock option to purchase 29,538 shares of common stock, which vests and becomes exercisable on the earlier of May 23, 2019 or the
date immediately prior to our 2019 annual meeting of stockholders. Mr. Satter disclaims beneficial ownership of all shares included
in clauses (b) and (ii) above, except to the extent of his pecuniary interest.
(3) Shares may also be sold, transferred or otherwise
disposed of at any time and from time to time, after we announce topline data for our VTL-308 clinical study, in transactions
exempt from the registration requirements of the Securities Act. The address for each selling stockholder is c/o Satter Management
Co., L.P., 676 N. Michigan Avenue, Suite 4000, Chicago, IL 60611.
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No selling stockholder has had any material
relationship with us or any of our affiliates within the past three fiscal years, other than Muneer A. Satter is a member of our
Board of Directors and the selling stockholders are entitled to the board and registration rights described in this prospectus
under “Description of Capital Stock.”
PLAN OF DISTRIBUTION
We and/or the selling stockholders, if applicable,
may sell the securities offered through this prospectus and any accompanying prospectus supplement, if required, in any of the
following ways: (1) to or through underwriters or dealers, (2) directly to purchasers, including our affiliates, (3) through agents,
or (4) through a combination of any these methods. The securities may be distributed at a fixed price or prices, which may be changed,
market prices prevailing at the time of sale, prices related to the prevailing market prices, or negotiated prices.
We or the selling stockholders may use
any one or more of the following methods when selling securities:
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underwritten transactions;
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privately negotiated transactions;
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sales through the Nasdaq Global Market or on any national securities exchange or quotation service on which the shares of common stock may be listed or quoted at the time of sale;
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sales in the over-the-counter market;
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ordinary brokerage transactions and transactions in which the broker solicits purchasers;
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broker-dealers may agree with the selling stockholders to sell a specified number of such securities at a stipulated price per share;
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a block trade (which may involve crosses) in which the broker-dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus;
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“at-the-market offerings” to or through a market maker or into an existing trading market, on an exchange or otherwise;
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exchange distributions and/or secondary distributions;
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a combination of any such methods of sale; and
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any other method permitted pursuant to applicable law.
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If required, a prospectus supplement with
respect to a particular offering will set forth the terms of the offering, including the following:
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the names of any underwriters or agents;
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the name or names of any managing underwriter or underwriters;
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the name or names of any selling stockholders;
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the sales price of the securities;
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the net proceeds from the sale of the securities;
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any delayed delivery arrangements;
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any underwriting discounts, commissions or agency fees and other item constituting underwriters’ or agents’ compensation;
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any initial price to public;
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any discounts or concessions allowed or reallowed or paid to dealers; and
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any commissions paid to agents.
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A selling stockholder that is an entity
may elect to make a pro rata in-kind distribution of shares of our common stock to its members, partners or stockholders pursuant
to the registration statement of which this prospectus forms a part by delivering a prospectus. To the extent that such members,
partners or stockholders are not affiliates of such selling stockholder, such members, partners or stockholders would thereby receive
freely tradeable shares of our common stock pursuant to the distribution through a registration statement.
Sale through Underwriters or Dealers
If underwriters are used in the sale, the
underwriters will acquire the securities for their own account, including through underwriting, purchase, security lending or repurchase
agreements with us. The underwriters may resell the securities from time to time in one or more transactions, including negotiated
transactions. Underwriters may sell the securities in order to facilitate transactions in any of our other securities (described
in this prospectus or otherwise), including other public or private transactions and short sales. Underwriters may offer securities
to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more
firms acting as underwriters. Unless otherwise indicated in the prospectus supplement, the obligations of the underwriters to purchase
the securities will be subject to certain conditions, and the underwriters will be obligated to purchase all the offered securities
if they purchase any of them. The underwriters may change from time to time any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers. The prospectus supplement will include the names of the principal underwriters
the respective amount of securities underwritten, the nature of the obligation of the underwriters to take the securities and the
nature of any material relationship between an underwriter and us.
Some or all of the securities that we
offer through this prospectus may be new issues of securities with no established trading market. Any underwriters to whom we
sell securities for public offering and sale may make a market in those securities, but they will not be obligated to do so
and they may discontinue any market making at any time without notice. Accordingly, we cannot assure you of the liquidity of,
or continued trading markets for, any securities offered pursuant to this prospectus.
If dealers are used in the sale of securities
offered through this prospectus, we or the selling stockholders will sell the securities to them as principals. They may then resell
those securities to the public at varying prices determined by the dealers at the time of resale. The prospectus supplement will
include the names of the dealers and the terms of the transaction.
To our knowledge, there are currently no
plans, arrangements or understandings between the selling stockholders and any underwriter, dealer or agent regarding the sale
of the shares covered by this prospectus by such selling stockholders. If any selling stockholder notifies us that a material arrangement
has been entered into with an underwriter, dealer or other agent for the sale of shares through a block trade, special offering
or secondary distribution, we may be required to file a prospectus supplement pursuant to applicable SEC rules promulgated under
the Securities Act.
Direct Sales and Sales through Agents
We or the selling stockholders may sell
the securities offered through this prospectus directly. In this case, no underwriters or agents would be involved. Such securities
may also be sold through agents designated from time to time. Any required prospectus supplement will name any agent involved in
the offer or sale of the offered securities and will describe any commissions payable to the agent by us or the selling stockholders.
Unless otherwise indicated in the prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases
for the period of its appointment.
We or the selling stockholders may sell
the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities
Act with respect to any sale of those securities. The terms of any such sales will be described in the prospectus supplement.
At-the-Market Offerings
We or the selling stockholders may engage
in at-the-market offerings into an existing trading market in accordance with Rule 415(a)(4). To the extent that we or the selling
stockholders make sales through one or more underwriters or agents in at-the-market offerings, we will do so pursuant to the terms
of a sales agency financing agreement or other at-the-market offering arrangement between us or the selling stockholders, on one
hand, and the underwriters or agents, on the other. If we engage in at-the-market sales pursuant to any such agreement, we or the
selling stockholders will sell our securities through one or more underwriters or agents, which may act on an agency basis or a
principal basis. During the term of any such agreement, we or the selling stockholders may sell securities on a daily basis in
exchange transactions or otherwise as we agree with the underwriters or agents. Any such agreement will provide that any securities
sold will be sold at prices related to the then prevailing market prices for our securities. Therefore, exact figures regarding
proceeds that will be raised or commissions to be paid cannot be determined as of the date of this prospectus. Pursuant to the
terms of the agreement, we or the selling stockholders may agree to sell, and the relevant underwriters or agents may agree to
solicit offers to purchase, blocks of our common stock or other securities. The terms of any such agreement will be set forth in
more detail in the applicable prospectus or prospectus supplement.
Delayed Delivery Contracts
If the prospectus supplement indicates,
we or the selling stockholders may authorize agents, underwriters or dealers to solicit offers from certain types of institutions
to purchase securities at the public offering price under delayed delivery contracts. These contracts would provide for payment
and delivery on a specified date in the future. The contracts would be subject only to those conditions described in the prospectus
supplement. The applicable prospectus supplement will describe the commission payable for solicitation of those contracts.
Market Making, Stabilization and Other Transactions
Unless the applicable prospectus supplement
states otherwise, each series of offered securities will be a new issue and will have no established trading market. We may elect
to list any series of offered securities on an exchange. Any underwriters that we or the selling stockholders use in the sale of
offered securities may make a market in such securities, but may discontinue such market making at any time without notice. Accordingly,
we cannot assure you of the liquidity of, or continued trading markets for, any securities offered pursuant to this prospectus.
Any underwriter may also engage in stabilizing
transactions, syndicate covering transactions and penalty bids in accordance with Rule 104 under the Securities Exchange Act of
1934, as amended. Stabilizing transactions involve bids to purchase the underlying security in the open market for the purpose
of pegging, fixing or maintaining the price of the securities. Syndicate covering transactions involve purchases of the securities
in the open market after the distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the underwriters to
reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member are purchased
in a syndicate covering transaction to cover syndicate short positions. Stabilizing transactions, syndicate covering transactions
and penalty bids may cause the price of the securities to be higher than it would be in the absence of the transactions. The underwriters
may, if they commence these transactions, discontinue them at any time.
Derivative Transactions and Hedging
We, the underwriters or other agents may
engage in derivative transactions involving the securities. These derivatives may consist of short sale transactions and other
hedging activities. The underwriters or agents may acquire a long or short position in the securities, hold or resell securities
acquired and purchase options or futures on the securities and other derivative instruments with returns linked to or related to
changes in the price of the securities. In order to facilitate these derivative transactions, we may enter into security lending
or repurchase agreements with the underwriters or agents. The underwriters or agents may make the derivative transactions through
sales of the securities to the public, including short sales, or by lending the securities in order to facilitate short sale transactions
by others. The underwriters or agents may also use the securities purchased or borrowed from us or others (or, in the case of derivatives,
securities received from us in settlement of those derivatives) to directly or indirectly settle sales of the securities or close
out any related open borrowings of the securities.
Electronic Auctions
We or the selling stockholders may also
make sales through the Internet or through other electronic means. Since we or the selling stockholders may from time to time elect
to offer securities directly to the public, with or without the involvement of agents, underwriters or dealers, utilizing the Internet
or other forms of electronic bidding or ordering systems for the pricing and allocation of such securities, you should pay particular
attention to the description of that system we will provide in a prospectus supplement.
Such electronic system may allow bidders
to directly participate, through electronic access to an auction site, by submitting conditional offers to buy that are subject
to acceptance by us, and which may directly affect the price or other terms and conditions at which such securities are sold. These
bidding or ordering systems may present to each bidder, on a so-called “real-time” basis, relevant information to assist
in making a bid, such as the clearing spread at which the offering would be sold, based on the bids submitted, and whether a bidder’s
individual bids would be accepted, prorated or rejected. For example, in the case of a debt security, the clearing spread could
be indicated as a number of “basis points” above an index treasury note. Of course, many pricing methods can and may
also be used.
Upon completion of such an electronic auction
process, securities will be allocated based on prices bid, terms of bid or other factors. The final offering price at which securities
would be sold and the allocation of securities among bidders would be based in whole or in part on the results of the Internet
or other electronic bidding process or auction.
General Information
Agents, underwriters, and dealers may be
entitled, under agreements entered into with us, to indemnification by us or the selling stockholders against certain liabilities,
including liabilities under the Securities Act. Agents, dealers, and underwriters may engage in transactions with or perform services
for us in the ordinary course of their businesses.
The selling stockholders and any agents,
underwriters or dealers that are involved in selling shares of our common stock may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such agents,
underwriters or dealers and any profit on the resale of shares of our common stock purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
There can be no assurance that any selling
stockholder will sell any or all of the shares of our common stock registered pursuant to the registration statement of which this
prospectus forms a part. The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather
than pursuant to the registration statement of which this prospectus forms a part. If sold under the registration statement of
which this prospectus forms a part, the securities will be freely tradable in the hands of persons other than our affiliates.
LEGAL MATTERS
The validity of the securities offered by
this prospectus will be passed upon by Wilson Sonsini Goodrich & Rosati, Professional Corporation, San Diego, California. Additional
legal matters may be passed upon for us or any underwriters, dealers or agents, by counsel that we will name in the applicable
prospectus supplement.
EXPERTS
The financial statements incorporated in
this prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2017 have been so incorporated in
reliance on the report (which contains an explanatory paragraph relating to the Company’s requirement for additional financing
to fund future operations as described in Note 1 to the consolidated financial statements) of PricewaterhouseCoopers LLP, an independent
registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and other reports,
proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s
website at http://www.sec.gov. You may also read and copy any document we file at the SEC’s Public Reference Room at 100
F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, including any amendments to those
reports, and other information that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act can
also be accessed free of charge through the Internet. These filings will be available as soon as reasonably practicable after we
electronically file such material with, or furnish it to, the SEC.
We have filed with the SEC a registration
statement under the Securities Act of 1933 relating to the offering of these securities. The registration statement, including
the attached exhibits, contains additional relevant information about us and the securities. This prospectus does not contain all
of the information set forth in the registration statement. You can obtain a copy of the registration statement, at prescribed
rates, from the SEC at the address listed above. The registration statement and the documents referred to below under “Incorporation
by Reference” are also available on our Internet website, www.vitaltherapies.com. We have not incorporated by reference into
this prospectus the information on our website, and you should not consider it to be a part of this prospectus.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference
into this prospectus certain information we file with it, which means that we can disclose important information by referring you
to those documents. The information incorporated by reference is considered to be a part of this prospectus, and information that
we file later with the SEC will automatically update and supersede information contained in this prospectus and any accompanying
prospectus supplement. We incorporate by reference the documents listed below that we have previously filed with the SEC; provided,
however, that we are not incorporating any information furnished under any of Item 2.02 or Item 7.01 of any current report on Form
8-K (and exhibits filed on such form that are related to such items):
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our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed on March 13, 2018, as amended on March 14, 2018;
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our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed on May 8, 2018;
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our Current Report in Form 8-K filed on May 24, 2018; and
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the description of our common stock contained in our Registration Statement on Form 8-A as filed with the SEC on November 15, 2013 pursuant to Section 12(b) of the Exchange Act.
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We also incorporate by reference into this
prospectus additional documents that we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior
to the completion or termination of the offering of the securities described in this prospectus, including all such documents we
may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement,
but excluding those documents or portions of those documents deemed furnished and not filed with the SEC. Any statements contained
in a previously filed document incorporated by reference into this prospectus is deemed to be modified or superseded for purposes
of this prospectus to the extent that a statement contained in this prospectus, or in a subsequently filed document also incorporated
by reference herein, modifies or supersedes that statement.
You should rely only on the information
incorporated by reference or provided in this prospectus. Neither we nor the selling stockholders have authorized anyone else to
provide you with different information. You should not assume that the information in this prospectus is accurate as of any date
other than the date of this prospectus or the date of the documents incorporated by reference in this prospectus.
We will provide to each person, including
any beneficial owner, to whom this prospectus is delivered, upon written or oral request, at no cost to the requester, a copy of
any and all of the information that is incorporated by reference in this prospectus.
Requests for such documents should be directed
to:
Vital Therapies, Inc.
Attn: Investor Relations
15010 Avenue of Science, Suite 200
San Diego, California 92128
(858) 673-6840
You may also access the documents incorporated by reference
in this prospectus through our website at www.vitaltherapies.com. Except for the specific incorporated documents listed above,
no information available on or through our website shall be deemed to be incorporated in this prospectus or the registration statement
of which it forms a part.
$40,000,000
Immunic, Inc.
Common Stock
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PROSPECTUS SUPPLEMENT
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SVB Leerink
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July
17,
2019
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