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Prospectus Supplement
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Filed pursuant to Rule 424(b)(5)
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(To Prospectus dated October 15, 2015)
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Registration No. 333-207304
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CASI Pharmaceuticals,
Inc.
7,951,865 Shares of Common Stock
Warrants to Purchase 1,638,506 Shares
of Common Stock
We are offering up to 7,951,865shares of
our common stock and warrants to purchase up to1,638,506 shares of our common stock (and the shares of common stock issuable from
time to time upon exercise of the warrants). For each share of common stock you purchase you will receive a warrant to purchase
0.20 shares of common stock. The accompanying warrants will be exercisable for two years, beginning six months from the date
of issuance, and have an exercise price of $3.75 per share. The shares of common stock and the accompanying warrants
are immediately separable and will be issued separately, but will be purchased together in this offering. We will also issue
to our placement agent a warrant to purchase up to 48,133 shares of common stock at an exercise price of $3.75 per share. The placement
agent’s warrant will be exercisable for one year, beginning six months after the date of issuance. There will be no public
market for the accompanying warrants.
Our common stock is listed on The NASDAQ
Capital Market and traded under the symbol “CASI”. The consolidated closing bid price of our common stock
on The NASDAQ Capital Market on October 12, 2017 was $3.61 per share.
We have retained H.C. Wainwright & Co.,
LLC (“Wainwright”) as our exclusive placement agent to use its best efforts to solicit offers to purchase our securities
in this offering. See “Plan of Distribution” beginning on page S-13 of this prospectus supplement for more information
regarding these arrangements.
Investing in our common stock involves
a high degree of risk. See “Risk Factors” beginning on page S-4 of this prospectus supplement and under the heading
“Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2016, for a discussion
of certain material factors that you should consider in connection with an investment in our securities.
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Per share of
common stock and accompanying warrant
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Total
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Public offering price
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$
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3.0000
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$
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23,855,595
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Placement agent’s fees
(1)
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$
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0.0295
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$
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234,650
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Proceeds, before expenses, to CASI Pharmaceuticals, Inc.
(2)
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$
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2.9705
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$
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23,620,945
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(1) The per share fee is based
on a fee equal to 6.5% of the gross proceeds from the sale of the securities in this offering, excluding any gross proceeds from
any China focused investors and other investors introduced by the Company. We will also issue to Wainwright a warrant to purchase
up to 48,133 shares of common stock at an exercise price of $3.75 per share of common stock and reimburse the expenses of Wainwright
in an amount up to $85,000. Wainwright is not required to sell any specific number or dollar amount of shares of common stock or
warrants but will use its best efforts to sell the securities offered. See “Plan of Distribution” on page S-13 for
a further description of the compensation payable to Wainwright and other estimated offering expenses incurred in connection with
this offering.
(2) We estimate that the total
expenses related to this offering will be approximately $250,000.
Neither the Securities and Exchange
Commission (“SEC”) nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
We
expect to deliver the securities being offered pursuant to this prospectus supplement beginning on or about October 17, 2017
on
a staggered basis as investors’ funds are received.
H.C. WAINWRIGHT & CO.
October 13, 2017
Table of Contents
Accompanying Prospectus
About This Prospectus Supplement
This prospectus supplement supplements the
accompanying prospectus filed with our registration statement on Form S-3 (File No. 333-207304) as part of a “shelf”
registration process. Under the shelf registration process, we may offer to sell common stock, warrants and units, from time to
time in one or more offerings up to a total dollar amount of $30,000,000.
This prospectus supplement describes the
specific terms of this offering and the accompanying prospectus gives more general information, some of which may not apply to
this offering. To the extent there is a conflict between the information contained in this prospectus supplement, on the one hand,
and the information contained in the accompanying prospectus or any document incorporated by reference therein, on the other hand,
you should rely on the information contained in this prospectus supplement.
Unless otherwise mentioned or unless the
context requires otherwise, all references in this prospectus supplement and the accompanying prospectus to “the Company,”
“CASI,” “we,” “us,” “our,” or similar references mean CASI Pharmaceuticals, Inc.,
a Delaware corporation.
We have not authorized any broker, dealer,
salesperson or other person to give any information or to make any representation other than those contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. You must not rely upon any information or representation
not contained or incorporated by reference in this prospectus supplement or the accompanying prospectus. This prospectus supplement
and the accompanying prospectus do not constitute an offer to sell, or the solicitation of an offer to buy, securities in any jurisdiction
where, or to any person to whom, it is unlawful to make such offer or solicitation. You should not assume that the information
contained in this prospectus supplement and the accompanying 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 is correct on any date subsequent to the
date of the document incorporated by reference, even if this prospectus supplement and any accompanying prospectus are delivered
or any security is sold on a later date.
Prospectus Supplement Summary
This summary highlights selected information
about us, this offering and information appearing elsewhere in this prospectus supplement, in the accompanying prospectus and in
the documents we incorporate by reference. This summary is not complete and does not contain all the information you should consider
before investing in our securities pursuant to this prospectus supplement and the accompanying prospectus. You should carefully
read this entire prospectus supplement and the accompanying prospectus, including the information referred to under the heading
“Risk Factors” in this prospectus supplement and the financial statements and other information that we incorporated
by reference in this prospectus supplement and the accompanying prospectus, before making an investment decision.
About CASI Pharmaceuticals, Inc.
We are a late-stage biopharmaceutical company
focused on the acquisition, development, and commercialization of innovative therapeutics addressing cancer and other unmet medical
needs for the global market, with a focus on China and the U.S. We are a NASDAQ-listed company, headquartered in Rockville, Maryland
with a wholly owned subsidiary and R&D operations in Beijing, China.
Our mission is to become an integrated biopharmaceutical
company with significant market share in China, while establishing partnerships for global development and commercialization. Part
of our strategy is to leverage our expertise and resources in North America and China to bring safer, more effective, and/or easier-to-use
drugs to patients and to develop them more cost-effectively and faster using our unique dual development approach.
We have a strong and growing product pipeline,
and will continue to (i) seek to acquire additional drug candidates through in-license and acquisitions, and (ii) explore drug
candidates in preclinical development.
Our product pipeline features (1) EVOMELA®,
MARQIBO® and ZEVALIN®, all U.S. Food and Drug Administration (FDA) approved drugs in-licensed from Spectrum Pharmaceuticals,
Inc. (“Spectrum”) for China regional rights, and currently in various stages in the regulatory and clinical process
for market approval in China, (2) our proprietary drug candidate, ENMD-2076, ongoing in one Phase 2 clinical study, and (3) CASI-001
and CASI-002, proprietary preclinical candidates in immuno-oncology.
Our principal offices are located at 9620
Medical Center Drive, Suite 300, Rockville, Maryland 20850, and our telephone number is (240) 864-2600. Additional information
concerning us can be found in our periodic filings with the SEC, which are available on our website at http://www.casipharmaceuticals.com
and on the SEC’s website at www.sec.gov. The information on our web site is not deemed to be part of this prospectus.
The Offering
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Common stock offered by us
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7,951,865 shares
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Common stock to be outstanding upon completion of this offering
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68,148,439 shares
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Warrants
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Warrants to purchase up to 1,590,373 shares of common stock will be offered in this offering. Each warrant, other than the warrant we issue to Wainwright, may be exercised at any time during the two-year period beginning six months after the date of issuance, at an exercise price of $3.75 per share of common stock. In connection with this offering, we will also issue to Wainwright, our placement agent, a warrant to purchase up to 48,133 shares of common stock at an exercise price of $3.75 per share of common stock (the “Agent’s Warrant”). The Agent’s Warrant may be exercised at any time during the one year period beginning six months after the date of issuance and will expire on April 17, 2019. This prospectus also relates to the offering of the shares of common stock issuable upon exercise of the warrants. The Agent’s Warrant and shares of common stock underlying the Agent’s Warrant are included in this prospectus supplement.
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Use of proceeds
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We intend to use the net proceeds received from the sale of securities to support our business development activities, advance the development of our pipeline, and for other general corporate purposes. See “Use of Proceeds” on page S-9.
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Risk factors
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See “Risk Factors,” beginning on page S-4 and under the heading “Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2016, for a discussion of factors you should consider carefully before deciding to invest in our common stock and warrants to purchase our common stock.
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NASDAQ Capital Market symbol for common stock
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Our common stock is quoted and traded on The NASDAQ Capital Market under the symbol “CASI.” However, there is no established public trading market for the offered warrants, and we do not expect a market to develop. In addition, we do not intend to apply to list the warrants on any securities exchange. The warrants are immediately separable from the shares of common stock.
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The information above regarding outstanding
shares of our common stock is based on 60,196,574 shares of common stock outstanding as of June 30, 2017 and excludes the following
shares of common stock:
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9,747,004 shares of common stock issuable upon the exercise of stock options outstanding as of June 30, 2017 with a weighted-average exercise price of $1.51 per share;
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6,388,501 shares of common stock issuable upon the exercise of warrants outstanding as of June 30, 2017 with a weighted-average exercise price of $1.63 per share;
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4,850,358 shares of common stock reserved for future awards under our 2011 Long-Term Incentive Plan, as of June 30, 2017;
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1,590,373 shares of our common stock issuable upon the exercise of warrants to be issued in this offering at an exercise price of $3.75 per share; and
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48,133 shares of our common stock issuable upon the exercise of the Agent’s Warrant to be issued in this offering at an exercise price of $3.75 per share.
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Risk Factors
An investment in our securities involves
significant risk. You should consult with your own financial and legal advisor as to the risk involved in an investment in our
common stock and warrants and to determine whether our common stock and warrants is a suitable investment for you. Our common stock
and warrants may not be a suitable investment if you are unsophisticated about equity securities. Before investing in our common
stock and warrants, you should consider carefully the risks and uncertainties described below and the information set forth under
the heading “Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2016,
as such discussion may be amended or updated in other reports filed with the SEC, and which are incorporated by reference into
this prospectus supplement and accompanying prospectus. Additional risks and uncertainties of which we are unaware or that we currently
believe are immaterial could also materially adversely affect our business, financial condition or results of operations. In any
case, the trading price of our common stock could decline, and you could lose all or part of your investment.
Risks Related to Our Business, Our Financial Results and
Our Need for Financing
We have a history of losses and anticipate future losses
and may never become profitable on a sustained basis.
To date, we have been engaged primarily
in research and development activities. Although in the past we have received limited revenues on royalties from the sales of pharmaceuticals,
license fees and research and development funding from a former collaborator and limited revenues from certain research grants,
we have not derived significant revenues from operations.
We have experienced losses in each year
since inception. Through June 30, 2017, we had an accumulated deficit of approximately $446 million. We will seek to raise capital
to continue our operations and although we have been successfully funded to date through the sales of our equity securities and
through limited royalty payments, there is no assurance that our capital-raising efforts will be able to attract the funding needed
to sustain our operations. If we are unable to obtain additional funding for operations, we may not be able to continue operations
as proposed, requiring us to modify our business plan, curtail various aspects of our operations or cease operations. In any such
event, investors may lose a portion or all of their investment.
We expect that our ongoing clinical and
corporate activities will result in operating losses for the foreseeable future before we commercialize any products, if ever.
In addition, to the extent we rely on others to develop and commercialize our products, our ability to achieve profitability will
depend upon the success of these other parties. To support our research and development of certain product candidates, we may seek
and rely on cooperative agreements from governmental and other organizations as a source of support. If a cooperative agreement
were to be reduced to any substantial extent, it may impair our ability to continue our research and development efforts. Even
if we do achieve profitability, we may be unable to sustain or increase it.
We are uncertain whether additional funding will be available
for our future capital needs and commitments, and if we cannot raise additional funding, or access the credit Markets, we may be
unable to complete development of our product candidates.
We will require substantial funds in addition
to our existing working capital to develop our product candidates and otherwise to meet our business objectives. We have never
generated sufficient revenue during any period since our inception to cover our expenses and have spent, and expect to continue
to spend, substantial funds to continue our clinical development programs. Any one of the following factors, among others, could
cause us to require additional funds or otherwise cause our cash requirements in the future to increase materially:
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progress of our clinical trials or correlative studies;
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results of clinical trials;
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changes in or terminations of our relationships with strategic partners;
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changes in the focus, direction, or costs of our research and development programs;
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competitive and technological advances;
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establishment of marketing and sales capabilities;
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the regulatory approval process; or
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At June 30, 2017, we had cash and cash equivalents
of approximately $23.4 million. We may continue to seek additional capital through public or private financing or collaborative
agreements in 2017 and beyond. Our operations require significant amounts of cash. We may be required to seek additional capital
for the future growth and development of our business. We can give no assurance as to the availability of such additional capital
or, if available, whether it would be on terms acceptable to us. In addition, we may continue to seek capital through the public
or private sale of securities, if market conditions are favorable for doing so. If we are successful in raising additional funds
through the issuance of equity securities, stockholders will likely experience substantial dilution. If we are not successful in
obtaining sufficient capital because we are unable to access the capital markets on favorable terms, it could reduce our research
and development efforts and materially adversely affect our future growth, results of operations and financial results.
Risks Related to our Common Stock and the Offering
The market price of our common stock may be highly volatile
or may decline regardless of our operating performance.
Our common stock price has fluctuated from
year-to-year and quarter-to-quarter and will likely continue to be volatile. Year-to-date 2017, our stock price has ranged from
$0.91 to $3.64. We expect that the trading price of our common stock is likely to be highly volatile in response to factors
that are beyond our control. The valuations of many biotechnology companies without consistent product revenues and earnings
are extraordinarily high based on conventional valuation standards, such as price to earnings and price to sales ratios. These
trading prices and valuations may not be sustained. In the future, our operating results in a particular period may not meet
the expectations of any securities analysts whose attention we may attract, or those of our investors, which may result in a decline
in the market price of our common stock. Any negative change in the public’s perception of the prospects of biotechnology
companies could depress our stock price regardless of our results of operations. These factors may materially and adversely
affect the market price of our common stock.
Our largest holders of common stock may have different
interests than our other stockholders.
A small number of our stockholders hold
a significant amount of our outstanding common stock. These stockholders may have interests that are different from the interests
of our other stockholders. We cannot assure that our largest stockholders will not seek to influence our business in a manner that
is contrary to our goals or strategies or the interests of our other stockholders. In addition, the significant concentration of
ownership in our common stock may adversely affect the trading price for our common stock because investors often perceive disadvantages
in owning stock in companies with significant stockholders. Our largest stockholders, if they acted together, could significantly
influence all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or
other business combination transactions. Our largest stockholders together may be able to determine all matters requiring stockholder
approval.
Investors in this offering will experience immediate and
substantial dilution.
The public offering price of our common
stock is substantially higher than the net tangible book value per share of our common stock. Therefore, if you purchase shares
of our common stock in this offering, you will incur immediate and substantial dilution in the pro forma net tangible book value
per share of common stock from the price per share that you pay for the common stock. See “Dilution.”
Additionally, Spectrum has a contingent
right to purchase shares of our common stock at par value ($0.01 per share) in order to maintain its post-investment equity ownership
percentage as of September 17, 2014, which was 16.66%, if we issue securities (subject to a limited exception for certain equity
compensation grants) in the future. This right expires upon the earliest of (1) the date on which we have raised, in the aggregate,
$50 million in net proceeds through capital raising activities or (2) September 17, 2019 (subject to extension for certain outstanding
derivative securities). In 2016, Spectrum exercised its contingent right and purchased 4,623,197 shares of our common stock.
We may require additional capital in the future, which
may not be available to us on favorable terms; issuances of our equity securities to provide this capital may dilute your ownership
in us.
We may need to raise additional funds through
public or private debt or equity financings in order to:
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take advantage of expansion opportunities;
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acquire complementary businesses or technologies;
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develop new services and products; or
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respond to competitive pressures.
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Any additional capital raised through the
issuance of our equity securities may dilute your percentage ownership interest in us. Furthermore, any additional financing we
may need may not be available on terms favorable to us or at all. The unavailability of needed financing could adversely affect
our ability to execute our growth strategy.
Sales of substantial amounts of our common stock or the
perception that such sales may occur could cause the market price of our common stock to drop significantly, even if our business
is performing well.
The market price of our common stock could
decline as a result of sales by, or the perceived possibility of sales by, our existing stockholders of shares of our common stock
in the market after this offering. These sales might also make it more difficult for us to sell equity securities at a time and
price that we deem appropriate, or at all. In addition, we have filed resale shelf registration statements to register shares of
our common stock that may be sold by certain of our stockholders, which may increase the likelihood of sales, or the perception
of an increased likelihood of sales, by our existing stockholders of shares of our common stock.
We will have broad discretion in how we use the proceeds
of this offering, and we may not use these proceeds effectively, which could affect our results of operations and cause our stock
price to decline.
We will have considerable discretion in
the application of the net proceeds of this offering. We currently intend to use the net proceeds of this offering to support our
business development activities, advance development of our pipeline, and for other general corporate purposes. However, our management
has broad discretion over how these proceeds are used and could spend the proceeds in ways with which you may not agree. We may
not invest the proceeds of this offering effectively or in a manner that yields a favorable or any return, and consequently, this
could result in financial losses that could have a material and adverse effect on our business, cause the price of our common stock
to decline or delay the development of our product candidates.
The obligations of the purchasers of the shares of common
stock and accompanying warrants are several and not joint and closing of the transactions may occur on a staggered basis.
Each purchaser entered into a separate stock
purchase agreement with us and their obligations for payment are several and not joint. Consequently, while we expect closing to
occur on or about October 17, 2017, we cannot guarantee that all purchasers will have made payment by such date and additional
closings may occur on a staggered basis as we receive the funds from such purchasers.
There is no public market for the warrants to purchase
common stock in this offering.
There is no established public trading market
for the warrants being sold in this offering, and we do not expect a market to develop. In addition, we do not intend to apply
to list the warrants on any securities exchange. Without an active market, the liquidity of the warrants will be limited.
Because we do not expect to pay dividends in the foreseeable
future, you must rely on the possibility of stock appreciation for any return on your investment.
We have paid no cash dividends on any of
our capital stock to date, and we currently intend to retain our future earnings, if any, to fund the development and growth of
our business. As a result, we do not expect to pay any cash dividends in the foreseeable future, and payment of cash dividends,
if any, will also depend on our financial condition, results of operations, capital requirements and other factors and will be
at the discretion of our board of directors. Furthermore, we are subject to various laws and regulations that may restrict our
ability to pay dividends and we may in the future become subject to contractual restrictions on, or prohibitions against, the
payment of dividends. Accordingly, the success of your investment in our common stock will likely depend entirely upon any future
appreciation. There is no guarantee that our common stock will appreciate in value after the offering or even maintain the price
at which you purchased your shares, therefore, you may not realize a return on your investment in our common stock and you may
lose your entire investment in our common stock.
Special Note Regarding Forward-Looking
Statements
This prospectus supplement contains and
incorporates by reference certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements also may be included in other statements that we make. All statements that are not descriptions
of historical facts are forward-looking statements. These statements can generally be identified by the use of forward-looking
terminology such as “believes,” “expects,” “intends,” “may,” “will,”
“should,” or “anticipates” or similar terminology. These forward-looking statements include, among others,
statements regarding the timing of our clinical trials, our cash position and future expenses, and our future revenues.
Forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they
are made, and we assume no duty to update forward-looking statements. New factors emerge from time to time, and it is not possible
for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent
to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking
statements.
Actual results could differ materially from
those currently anticipated due to a number of factors, including: the risk that we may be unable to continue as a going concern
as a result of our inability to raise sufficient capital for our operational needs; the possibility that we may be delisted from
trading on the Nasdaq Capital Market; the volatility in the market price of our common stock; risks relating to interests of our
largest stockholders that differ from our other stockholders; the risk of substantial dilution of existing stockholders in future
stock issuances; the difficulty of executing our business strategy in China; our inability to enter into strategic partnerships
for the development, commercialization, manufacturing and distribution of our proposed product candidates or future candidates;
risks relating to the need for additional capital and the uncertainty of securing additional funding on favorable terms; risks
associated with our product candidates; risks associated with any early-stage products under development; the risk that results
in preclinical models are not necessarily indicative of clinical results; uncertainties relating to preclinical and clinical trials,
including delays to the commencement of such trials; the lack of success in the clinical development of any of our products; dependence
on third parties; and risks relating to the commercialization, if any, of our proposed products (such as marketing, safety, regulatory,
patent, product liability, supply, competition and other risks). risks relating to interests of our largest stockholders that differ
from our other stockholders. Such factors, among others, could have a material adverse effect upon our business, results of operations
and financial condition. We caution readers not to place undue reliance on any forward-looking statements, which only speak as
of the date made. Additional information about the factors and risks that could affect our business, financial condition and results
of operations, are contained in our filings with the SEC, which are available at www.sec.gov.
You are encouraged to review the Risk Factors
included in this prospectus supplement and under the heading “Item 1A. Risk Factors” in our annual report on Form 10-K
for the fiscal year ended December 31, 2016 and our other filings with the SEC.
Use of Proceeds
We estimate that the net proceeds we will
receive from this offering will be approximately $23.4 million after deducting the placement agent’s fees and other estimated
offering related expenses.
We will retain broad discretion over the
use of the net proceeds from the sale of our common stock offered hereby. We currently anticipate using the net proceeds
from this offering to support our business development activities, advance the development of our pipeline, and for general corporate
purposes.
The timing and amount of our actual expenditures
will be based on many factors, including progress in, and the costs of, our clinical trials and research and development programs,
our ability to identify collaborators for our product candidates, our ability to negotiate and enter into definitive agreements
with any such collaborators and the amount and timing of revenues, if any, from future collaborations. We therefore cannot estimate
the amount of net proceeds to be used for all of the purposes described above. Until we use the net proceeds of this offering for
the above purposes, we intend to invest the funds in short-term, investment grade, interest-bearing securities. We cannot predict
whether the proceeds invested will yield a favorable return.
Dilution
Our net tangible book value on June 30,
2017 was approximately $17,026,000, or approximately $0.28 per share of common stock. Net tangible book value per share as of any
date is determined by dividing our net tangible book value, which consists of tangible assets less total liabilities, by the number
of shares of common stock outstanding on that date. Without taking into account any other changes in our net tangible book value
after June 30, 2017 other than to give effect to our receipt of the estimated net proceeds (after payment of the placement
agent fees and our estimated offering expenses) from the sale by us of 7,951,865 shares of common stock and accompanying warrants
to purchase 1,590,373 shares of common stock at an offering price of $3.00 per share and accompanying warrants (and excluding any
shares of common stock issued and any proceeds received upon exercise of the warrants), our net tangible book value as of June
30, 2017, after giving effect to the items above, would have been approximately $40,396,000, or $0.59 per share of common stock.
This represents an immediate increase in net tangible book value of $0.31 per share of common stock to our existing stockholders
and an immediate dilution in net tangible book value of $2.41 per share of common stock to purchasers of common stock and accompanying
warrants in this offering.
The following table illustrates this calculation
in a per share basis:
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Public offering price per share of common stock and accompanying warrant
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$
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3.00
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Net tangible book value per share as of June 30, 2017
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$
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0.28
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Increase in net tangible book value per share attributable to this offering
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$
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0.31
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Pro forma net tangible book value per share as of June 30, 2017, after giving effect to this offering
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$
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0.59
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Dilution per share to investors in this offering
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$
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2.41
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The above table is based on 60,196,574 shares
of our common stock outstanding as of June 30, 2017 and excludes, as of June 30, 2017:
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6,388,501 shares of common stock issuable upon the exercise of warrants outstanding prior to
this offering;
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1,638,506 shares of common stock issuable upon the exercise of warrants to be issued pursuant
to this offering;
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9,747,004 shares of common stock issuable upon the exercise of stock options outstanding prior
to this offering under our equity incentive plans; and
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4,850,358 shares of common stock available for future grants under our 2011 Long-Term Incentive
Plan.
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To the extent that any of these options
or warrants are exercised, new options are issued under our equity incentive plans or we otherwise issue additional shares of common
stock in the future, there will be further dilution to the new investors.
Description of Securities We Are Offering
Common Stock
The material terms and provisions of our
common stock are described under the caption “Description of Common Stock” starting on page 6 of the accompanying
prospectus.
Warrants
The material terms and provisions of
the accompanying warrants being offered with each share of common stock pursuant to this prospectus supplement are summarized below.
The form of warrant will be provided to each purchaser in this offering and will be included as an exhibit to a Current Report
on filed Form 8-K with the SEC in connection with this offering.
Form.
The accompanying
warrants, none of which have been issued as of the date of this prospectus supplement, will be issued as individual warrant
agreements to the investors.
Exercisability.
The accompanying
warrants are exercisable beginning six months after their issuance, expected to be April 17, 2018, and at any time up to the date
that is two years after the warrants become exercisable, expected to be April 17, 2020. The warrants will be exercisable,
at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice accompanied by payment in
full for the number of shares of our common stock purchased upon such exercise. No fractional shares of common stock will be issued
in connection with the exercise of a warrant. In lieu of fractional shares, we will pay the holder either a cash adjustment in
respect of such fraction in an amount equal to the fraction multiplied by the exercise price of the warrant, or round up to the
nearest whole share. Under certain conditions, the warrants will be exercisable on a cashless “net” basis. If, as of
the date of this prospectus supplement, a holder does not beneficially own more than 9.99% of the total number of issued and outstanding
shares, then the number of warrant shares that may be acquired by any holder upon any exercise of the warrant will be limited to
the extent necessary to insure that, following such exercise (or other issuance), the total number of shares of common stock then
beneficially owned by such holder and its affiliates and any other persons whose beneficial ownership of common stock would be
aggregated with the holder’s for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, does not exceed
4.99% (or 9.99% in the case of certain holders) of the total number of issued and outstanding shares of common stock (including
for such purpose the shares of common stock issuable upon such exercise), or beneficial ownership limitation. The holder may elect
to change this beneficial ownership limitation from 4.99% to 9.99% of the total number of issued and outstanding shares of common
stock (including for such purpose the shares of common stock issuable upon such exercise) upon 61 days’ prior written notice.
Exercise Price.
Each accompanying
warrant represents the right to purchase of shares of common stock at an exercise price equal to $3.75 per share, subject to adjustment
as described below. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting our common stock.
Transferability.
Subject
to applicable laws, the warrants may be offered for sale, sold, transferred or assigned without our consent.
Exchange Listing.
There
is no established public trading market for the warrants, and we do not expect a market to develop. We do not intend to apply to
list the warrants on any securities exchange. Without an active market, the liquidity of the warrants will be limited. In addition,
in the event our common stock price does not exceed the per share exercise price of the warrants during the period when the warrants
are exercisable, the warrants will not have any value.
Rights as a Stockholder.
Except
as otherwise provided in the warrants or by virtue of such holder’s ownership of shares of our common stock, the holder of
a warrant does not have the rights or privileges of a holder of our common stock, including any voting rights, until the holder
exercises the warrant.
Authorization of Shares upon Exercise.
The shares of common stock issuable on exercise of the warrants will be, when issued in accordance with the warrants, duly
and validly authorized, issued and fully paid and non-assessable. We will authorize and reserve at least that number of shares
of common stock equal to the number of shares of common stock issuable upon exercise of all outstanding warrants.
Agent’s Warrant
The material terms and provisions of
the Agent’s Warrant being offered pursuant to this prospectus supplement are summarized below. The Agent’s Warrant
will be provided to Wainwright and included as an exhibit to a Current Report on Form 8-K filed with the SEC in connection with
this offering.
The Agent’s Warrant
will be issued on substantially the same terms as the warrants issued to purchasers of the common stock and the accompanying warrants,
except (i) the Agent’s Warrant will contain certain restrictions required by the Financial Industry Regulatory Authority
(“FINRA”), as described under “Plan of Distribution” below and (ii) will expire on April 17, 2019, the
one year anniversary of the Agent’s Warrant becoming exercisable.
Plan of Distribution
Pursuant to a letter agreement, dated as
of October 12, 2017, by and between the us and Wainwright, (the “Engagement Agreement”), we have engaged Wainwright
to act as our exclusive placement agent in connection with our offering of the common stock and the accompanying warrants in a
proposed takedown from our shelf registration statement pursuant to this prospectus supplement and the accompanying prospectus.
The Engagement Agreement does not give rise to any commitment by Wainwright to purchase any of our shares of common stock or warrants,
and Wainwright will have no authority to bind us to sell securities by virtue of the agreement. Further, Wainwright does not guarantee
that it will be able to raise new capital in any prospective offering.
We have entered into a securities purchase
agreement directly with each purchaser in connection with this offering. Our obligation to issue and sell common stock and accompanying
warrants to the purchasers is subject to the conditions set forth in the purchase agreement. We will deliver the warrants to the
investors by a physical warrant certificate. A purchaser’s obligation to purchase common stock and accompanying warrants
is subject to the conditions set forth in its, his or her purchase agreement as well, which may also be waived.
We will deliver the shares of common stock
being issued to each purchaser electronically, or if requested, by physical stock certificate, upon receipt of purchaser funds
for the purchase of the shares of our common stock offered pursuant to this prospectus supplement. We expect that our transfer
agent will deliver the shares of our common stock being offered pursuant to this prospectus supplement beginning on or about October
17, 2017 on a staggered basis as investors’ funds are received. See “Risk Factors — The obligations of the purchasers
of the shares of common stock and accompanying warrants are several and not joint and closing of the transactions may occur on
a staggered basis.” Additionally, at least one investor will make payment in form of renminbi to our local Chinese subsidiary.
We have agreed to pay Wainwright a fee equal
to 6.5% of the gross proceeds from the sale of the securities in this offering, excluding any investment made by any China focused
investors and other investors introduced by the Company, or approximately $234,650. In addition, we will issue to Wainwright the
Agent’s Warrant, a warrant to purchase the number of shares equal to 4% of the shares of our common stock sold pursuant to
this prospectus supplement, excluding any investment made by any China focused investors and other investors introduced by the
Company, with an exercise price equal to $3.75 per share. The Agent’s Warrant will be exercisable beginning six months after
the date of issuance and will expire on April 17, 2019, the one-year anniversary of the warrant becoming exercisable. Pursuant
to FINRA Rule 5110(g)(1), neither the Agent’s Warrant nor any shares of common stock issued upon exercise of the Agent’s
Warrant may be sold, transferred, assigned, pledged, or hypothecated, or be subject to any hedging, short sale, derivative, put,
or call transaction that would result in the effective economic disposition of such securities by any person for a period of 180
days immediately following the date of effectiveness or commencement of sales of this offering, except the transfer of any security:
(i) by operation of law or by reason of reorganization, (ii) to any FINRA member firm participating in the offering and the officers
and partners thereof, if all securities so transferred remain subject to the lock-up restriction described above for the remainder
of the time period, (iii) if the aggregate amount of our securities held by Wainwright or related person does not exceed 1% of
the securities being offered, (iv) that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided
that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do
not own more than 10% of the equity in the fund, or (v) the exercise or conversion of any security, if all securities received
remain subject to the lock-up restriction set forth above for the remainder of the time period. We have also agreed to reimburse
Wainwright (i) 35,000 for non-accountable expenses and (ii) $50,000 for fees and expenses of legal counsel and other out-of-pocket
expenses.
Under no circumstances will the fee, commission
or discount received by Wainwright or any member of FINRA or any independent broker-dealer exceed 8% of the gross proceeds to us
in this offering.
We have agreed to indemnify Wainwright against
certain civil liabilities, including certain liabilities under the Securities Act of 1933, as amended (the “Securities Act”),
and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and to contribute to payments that Wainwright
may be required to make in respect of such liabilities.
The Engagement Agreement will be included
as an exhibit to the Current Report on Form 8-K that we will file with the SEC and will be incorporated by reference into the registration
statement of which this prospectus supplement forms a part.
Wainwright may be deemed to be an underwriter
within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it might be deemed to be underwriting
discounts or commissions under the Securities Act. As an underwriter, Wainwright would be required to comply with the requirements
of the Securities Act and the Exchange Act, including, without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5
and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of shares of common
stock and warrants by Wainwright acting as principal. Under these rules and regulations, Wainwright:
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may not engage in any stabilization activity in connection with our securities; and
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may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution.
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The estimated offering expenses payable
by us, in addition to the fee of $234,650 due to Wainwright, are approximately $250,000, which includes our legal, accounting and
filing costs, and various other fees associated with registering the securities and listing the common stock and certain expenses
we have agreed to reimburse Wainwright in an amount up to $85,000. After deducting certain fees due to Wainwright and our estimated
offering expenses, we expect the net proceeds from this offering to be approximately $23.4 million (excluding any shares of common
stock issued and any proceeds received upon exercise of the warrants).
The foregoing does not purport to be a complete
statement of the terms and conditions of the securities purchase agreement or warrants. A copy of the Agent’s Warrant, the
form of securities purchase agreement with the investors and the form of warrant will be included as exhibits to our current report
on Form 8-K that will be filed with the SEC and incorporated by reference into the Registration Statement of which this prospectus
supplement forms a part.
The transfer agent for our common stock
is American Stock Transfer & Trust Company.
Our common stock is traded on The NASDAQ
Capital Market under the symbol “CASI.”
The purchase price per share was determined
based on negotiations with investors and discussions with Wainwright.
Legal Matters
The validity of the issuance of the securities
offered hereby has been passed upon by Arnold & Porter Kaye Scholer LLP, Washington, D.C.
Experts
CohnReznick LLP (“CohnReznick”),
an independent registered public accounting firm, has audited our consolidated financial statements included in our Annual Report
on Form 10-K for the year ended December 31, 2016, as set forth in their report, which is incorporated by reference herein. Our
financial statements are incorporated by reference in reliance on CohnReznick’s report, given on their authority as experts
in accounting and auditing.
Where You Can Find More Information
We have filed with the SEC a registration
statement under the Securities Act that registers the distribution of the securities offered under this prospectus supplement.
The registration statement, including the attached exhibits and schedules and the information incorporated by reference, contains
additional relevant information about us and the securities. The rules and regulations of the SEC allow us to omit from this prospectus
supplement certain information included in the registration statement.
In addition, we file annual, quarterly and
special reports, proxy statements and other information with the SEC. You may read and copy this information and the registration
statement at the SEC public reference room located at Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the public reference room.
In addition, the SEC maintains an Internet
site that contains reports, proxy statements and other information about issuers of securities, like us, who file such material
electronically with the SEC. The address of that web site is http://www.sec.gov. We also maintain a web site at http://www.casipharmaceuticals.com,
which provides additional information about our company. The material on our website is not a part of this prospectus supplement
or the accompanying prospectus.
Incorporation of Certain Information
by Reference
The SEC allows us to incorporate by reference
the information that we file with the SEC, which means that we can disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to be part of this prospectus supplement. These documents may
include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K,
as well as Proxy Statements. Any documents that we subsequently file with the SEC will automatically update and replace the information
previously filed with the SEC. Thus, for example, in the case of a conflict or inconsistency between information set forth in this
prospectus supplement and information incorporated by reference into this prospectus supplement, you should rely on the information
contained in the document that was filed later.
This prospectus supplement incorporates
by reference the documents listed below that we previously have filed with the SEC and any additional documents that we may file
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this prospectus supplement and the
termination of the offering of the securities. These documents contain important information about us.
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC
on March 31, 2017;
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Our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2017, and
June 30, 2017 filed with the SEC on May 15, 2017, and August 14, 2017, respectively;
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Our Current Reports on Form 8-K filed with the SEC on September 7, 2017 and June 9, 2017; and
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The description of the Company’s common stock contained in the Company’s Registration
Statement on Form 8-A filed with the SEC under the Exchange Act on May 14, 1996, including any amendment or report filed for
the purpose of updating such description.
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You can obtain a copy of any or all of the
documents incorporated by reference in this prospectus supplement (other than an exhibit to a document unless that exhibit is specifically
incorporated by reference into that document) from the SEC on its web site at http://www.sec.gov. You also can obtain these documents
from us without charge by visiting our web site at http://www.casipharmaceuticals.com or by requesting them in writing, by email
or by telephone at the following address:
Cynthia W. Hu
Chief Operating Officer, General Counsel
and Secretary
CASI Pharmaceuticals, Inc.
9620 Medical Center Drive, Suite 300
Rockville, Maryland 20850
(240) 864-2600
ir@casipharmaceuticals.com
We have authorized no one to provide you with any information
that differs from that contained in this prospectus supplement or the accompanying prospectus. Accordingly, you should not rely
on any information that is not contained in this prospectus supplement or the accompanying prospectus.
PROSPECTUS
CASI PHARMACEUTICALS, INC.
$30,000,000
Common Stock
Warrants to Purchase Common Stock
Units
We may offer and sell from time to time shares
of common stock or warrants to purchase shares of common stock either individually or in units. We may also offer common stock
upon exercise of warrants. We may sell any combination of the above described securities, either individually or in units, in one
or more offerings in amounts, at prices and on terms determined at the time of the offering. We refer to the shares of common stock,
warrants to purchase shares of common stock and units collectively as the “securities.”
This prospectus also may be used in connection
with the issuance of up to 2,309,162 shares of common stock upon the exercise of outstanding warrants.
This prospectus provides you with a general
description of the securities that we may offer. This prospectus may not be used to consummate sales of securities unless accompanied
by a prospectus supplement. Each time we sell securities, we will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add information or update information contained in this prospectus.
You should read both this prospectus and any prospectus supplement together with the documents incorporated by reference and described
under the heading “Where You Can Find More Information” before you make your investment decision.
An investment in the securities offered
under this prospectus involves a high degree of risk. You should carefully consider the risk factors described in the applicable
prospectus supplement and certain of our filings with the Securities and Exchange Commission, as described under “Risk Factors ”
on page 4.
The aggregate market value of our outstanding
common stock held by non-affiliates is $21,682,764, based on 32,445,811 shares of outstanding common stock as of October 2, 2015,
of which 20,264,265 were held by non-affiliates, and a per share price of $1.07 based on the closing sale price of our common stock
on October 2, 2015. We have not offered any securities pursuant to General Instruction I.B.6. of Form S-3 during the prior
12 calendar month period that ends on and includes the date of this 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.
The date of this prospectus is
October 15, 2015.
TABLE OF CONTENTS
About This Prospectus
This prospectus is part of a “shelf”
registration statement we filed with the Securities and Exchange Commission, or the SEC. By using a shelf registration statement,
we may offer to sell any one or more or a combination of the securities described in this prospectus from time to time for an aggregate
offering price of up to $30,000,000.
You should rely only on the information contained
in or specifically incorporated by reference into this prospectus or a prospectus supplement. No dealer, sales person, agent or
other individual has been authorized to give any information or to make any representations not contained in this prospectus. If
given or made, such information or representations must not be relied upon as having been authorized by us.
This prospectus does not constitute an offer
to sell, or a solicitation of an offer to buy, the securities offered hereby in any jurisdiction where, or to any person to whom,
it is unlawful to make such offer or solicitation.
We may sell securities to underwriters who
will sell the securities to the public on terms fixed at the time of sale. In addition, the securities may be sold by us directly
or through dealers or agents designated from time to time. If we, directly or through agents, solicit offers to purchase the securities,
we reserve the sole right to accept and, together with any agents, to reject, in whole or in part, any of those offers.
Any prospectus supplement will contain the
names of the underwriters, dealers or agents, if any, together with the terms of offering, the compensation of those underwriters
and the net proceeds to us. Any underwriters, dealers or agents participating in the offering may be deemed “underwriters”
within the meaning of the Securities Act of 1933, as amended, or the Securities Act.
We have not taken any action to permit a
public offering of the shares of common stock outside the United States or to permit the possession or distribution of this prospectus
outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves
about and observe any restrictions relating to the offering of the shares of common stock and the distribution of this prospectus
outside of the United States.
The information contained in this prospectus
is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of securities.
Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create an implication that
there has not been any change in the facts set forth in this prospectus or in our affairs since the date of this prospectus.
Special Note Regarding Forward-Looking
Statements
This prospectus contains and incorporates
certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934, as amended, or the Exchange Act. Forward-looking statements also may be included in other statements that we make.
All statements that are not descriptions of historical facts are forward-looking statements. These statements can generally be
identified by the use of forward-looking terminology such as “believes,” “expects,” “intends,”
“may,” “will,” “should,” or “anticipates” or similar terminology. These forward-looking
statements include, among others, statements regarding the timing of our clinical trials, our cash position and future expenses,
and our future revenues.
Our forward-looking statements are based
on information available to us today, and we will not update these statements.
Actual results could differ materially from
those currently anticipated due to a number of factors, including: the risk that we may be unable to continue as a going concern
as a result of our inability to raise sufficient capital for our operational needs; the possibility that we may be delisted from
trading on the Nasdaq Capital Market; the volatility in the market price of our common stock; the difficulty of executing our business
strategy in China; our inability to enter into strategic partnerships for the development, commercialization, manufacturing and
distribution of our proposed product candidates or future candidates; risks relating to the need for additional capital and the
uncertainty of securing additional funding on favorable terms; risks associated with our product candidates; risks associated with
any early-stage products under development; the risk that results in preclinical models are not necessarily indicative of clinical
results; uncertainties relating to preclinical and clinical trials, including delays to the commencement of such trials; the lack
of success in the clinical development of any of our products; dependence on third parties; risks relating to the commercialization,
if any, of our proposed products (such as marketing, safety, regulatory, patent, product liability, supply, competition and other
risks); risks relating to interests of our largest stockholders that differ from our other stockholders; and the risk of substantial
dilution of existing stockholders in future stock issuances. Such factors, among others, could have a material adverse effect upon
our business, results of operations and financial condition. We caution readers not to place undue reliance on any forward-looking
statements, which only speak as of the date made. Additional information about the factors and risks that could affect our business,
financial condition and results of operations, are contained in our filings with the SEC, which are available at
www.sec.gov
.
About CASI Pharmaceuticals, Inc.
We are a biopharmaceutical company focused
on the acquisition, development and commercialization of innovative therapeutics addressing cancer and other unmet medical needs
with a strategic commercial focus on the greater China market. Our mission is to deliver pharmaceutical drugs to patients with
unmet medical needs in China directly, and in the rest of the world by establishing partnerships for global development and commercialization.
We intend to become fully integrated with drug development and commercial operations.
We employ a diversified and risk-managed
approach to our pipeline that includes (1) internal development of our lead proprietary drug candidate, ENMD-2076, leveraging resources
and dual development in North America and China, (2) in-license or acquisition of late-stage clinical drug candidates, such
as ZEVALIN
®
, MARQIBO
®
, and CE Melphalan for the greater China market, and (3) internal development
of new drug candidates with clinically proven targets using our proprietary new drug delivery technology platform. Through partnerships,
collaborations and strategic acquisitions, we intend to add additional drug candidates to our pipeline. The Company uses a market-oriented
approach to identify pharmaceutical candidates that it believes have the potential for gaining widespread market acceptance, either
globally or in China, and for which development can be accelerated under the Company’s drug development strategy.
Our lead internal drug candidate is ENMD-2076,
a selective Aurora A and angiogenic kinase inhibitor for the treatment of cancer, which we will continue to develop with approval
by the Food and Drug Administration (FDA). In parallel, we will include ENMD-2076 in clinical sites in China as an import drug
as well as develop ENMD-2076 in China locally under the China Food and Drug Administration (CFDA).
In September 2014, we acquired from Spectrum
Pharmaceuticals, Inc. and certain of its affiliates (together referred to as “Spectrum”) exclusive rights in greater
China (including Taiwan, Hong Kong and Macau) to three in-licensed oncology products, including ZEVALIN
®
(ibritumomab
tiuxetan) approved in the U.S. for advanced non-Hodgkin’s lymphoma, MARQIBO
®
(vinCRIStine sulfate LIPOSOME
injection) approved in the U.S. for advanced adult Ph- acute lymphoblastic leukemia (ALL), as well as EVOMELA™ (CE-Melphalan
HCI for injection), which is the subject of a New Drug Application filed by Spectrum and accepted by the FDA in March 2015 with
a PDUFA date of October 23, 2015. We have initiated the regulatory and development process to obtain marketing approval for ZEVALIN
and MARQIBO in our territorial region, and have initiated commercial activities of ZEVALIN in Hong Kong. We will continue to seek
to expand our pipeline by acquiring additional drug candidates through in-license and acquisitions.
Our pipeline also includes drug candidates
with clinically proven targets that we are internally developing under the Company’s new drug delivery technology platform.
We intend to advance clinical development
of our drugs and drug candidates, and the implementation of our plans will include leveraging our resources in both the United
States and China. In order to capitalize on the drug development and capital resources available in China, the Company is doing
business in China through its wholly-owned Chinese subsidiary that will execute the China portion of the Company’s drug development
strategy, including conducting clinical trials in China, pursuing local funding opportunities and strategic collaborations, and
implementing the Company’s plan for development and commercialization in the China market.
Our principal offices are located at 9620
Medical Center Drive, Suite 300, Rockville, Maryland 20850, and our telephone number is (240) 864-2600. Additional information
concerning us can be found in our periodic filings with the SEC, which are available on our website at http://www.casipharmaceuticals.com
and on the SEC’s website at www.sec.gov. The information on our website is not deemed to be part of this prospectus.
Risk Factors
An investment in our securities involves
a high degree of risk. Before you decide whether to purchase any of our securities, in addition to the other information in this
prospectus and the accompanying prospectus supplement, you should carefully consider the risk factors set forth under the heading
“Risk Factors” in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, which are
incorporated by reference into this prospectus, as the same may be updated from time to time by our future filings under the Securities
Exchange Act of 1934, as amended, or the Securities Exchange Act. For more information, see the section entitled “Incorporation
by Reference.” The risks and uncertainties we have described are not the only ones facing our company. Additional risks and
uncertainties not presently known to us or that we currently consider immaterial may also affect our business operations. To the
extent that a particular offering implicates additional significant risks, we will include a discussion of those risks in the applicable
prospectus supplement.
Use of Proceeds
Except as may be otherwise set forth in the
prospectus supplement accompanying this prospectus, we will use the net proceeds we receive from sales of the securities offered
hereby for general corporate purposes, including support for our continuing research and development, commercialization activities,
business development activities, and, if opportunities arise, acquisitions of businesses, products, technologies or licenses that
are complementary to our business, although we have no current plans, commitments or agreements with respect to any acquisitions
as of the date of this prospectus.
Plan of Distribution
We may sell the securities offered through
this prospectus in any one or more of the following ways:
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directly to investors or purchasers;
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to investors through agents;
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to or through brokers or dealers;
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to the public through underwriting syndicates led by one or more managing underwriters;
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to one or more underwriters acting alone for resale to investors or to the public;
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through a block trade in which the broker or dealer engaged to handle the block trade will attempt to sell the securities as
agent, but may position and resell a portion of the block as principal to facilitate the transaction; and
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through a combination of any such methods of sale.
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Securities may also be issued upon exercise
of warrants. We reserve the right to sell securities directly to investors on our own behalf in those jurisdictions where we are
authorized to do so.
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.
The prospectus supplement will, where applicable:
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describe the terms of the offering;
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identify any underwriters, dealers or agents;
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identify any managing underwriter or underwriters;
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provide purchase price of the securities;
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provide the net proceeds from the sale of the securities;
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describe any delayed delivery arrangements;
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describe any underwriting discounts, commissions and other items constituting underwriters’ compensation;
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describe any initial public offering price;
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describe any discounts or concessions allowed or reallowed or paid to dealers; and
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describe any commissions paid to agents.
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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.
If dealers are used in the sale of securities
offered through this prospectus, we 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.
Direct Sales and Sales Through Agents
We may sell the securities offered through
this prospectus. In this case, no underwriters or agents would be involved. Such securities may also be sold through agents designated
from time to time. The 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. 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 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.
Delayed Delivery Contracts
If the prospectus supplement indicates,
we 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. Delayed delivery contracts will be subject only to those conditions set forth in each applicable prospectus
supplement, and each prospectus supplement will set forth any commissions we pay for solicitation of these contracts.
“At the Market” Offerings
We may from time to time engage a firm
to act as our agent for one or more offerings of our securities. We sometimes refer to this agent as our “offering agent.”
If we reach agreement with an offering agent with respect to a specific offering, including the number of securities and any minimum
price below which sales may not be made, than the offering agent will try to sell such securities on the agreed terms. The offering
agent could make sales in privately negotiated transactions or any other method permitted by law, including sales deemed to be
an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including sales made
directly on the The Nasdaq Capital Market, or sales made to or through a market maker other than on an exchange. The offering agent
will be deemed to be an “underwriter” within the meaning of the Securities Act with respect to any sales effected through
an “at the market” offering.
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 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. Therefore, we cannot assure you
that the securities will have a liquid trading market.
To the extent permitted by and in accordance
with Regulation M under the Exchange Act in connection with an offering an underwriter may engage in over-allotments, stabilizing
transactions, short covering transactions and penalty bids. Over-allotments involve sales in excess of the offering size, which
creates a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids
do not exceed a specified maximum. Short covering transactions involve purchases of the securities in the open market after the
distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a
dealer when the securities originally sold by the dealer are purchased in a covering transaction to cover short positions. Those
activities may cause the price of the securities to be higher than it would be otherwise. If commenced, the underwriters may discontinue
any of the activities at any time.
To the extent permitted by and in accordance
with Regulation M under the Exchange Act, any underwriters who are qualified market makers on the Nasdaq Capital Market may
engage in passive market making transactions in the securities on the Nasdaq Capital Market during the business day prior to the
pricing of an offering, before the commencement of offers or sales of the securities. Passive market makers must comply with applicable
volume and price limitations and must be identified as passive market makers. In general, a passive market maker must display its
bid at a price not in excess of the highest independent bid for such security; if all independent bids are lowered below the passive
market maker’s bid, however, the passive market maker’s bid must then be lowered when certain purchase limits are exceeded.
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 effect 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.
General Information; Offering Limitations
Agents, underwriters, and dealers may be
entitled, under agreements entered into with us, to indemnification by us against certain liabilities, including liabilities under
the Securities Act. Our agents, underwriters, and dealers, or their affiliates, may be customers of, engage in transactions with
or perform services for us, in the ordinary course of business. No securities may be sold under this prospectus without delivery,
in paper format, in electronic format on the Internet, or both, of the applicable prospectus supplement describing the method and
terms of the offering.
Pursuant to the SEC rules governing the
primary offering of securities on Form S-3 and as a result of our current public float as of the date of this Registration Statement,
provided that we otherwise eligible to use Form S-3, we are limited to issue and sell, pursuant to this Registration Statement,
a number of shares equivalent to the value of one-third of our public float in the 12-month period immediately prior to, and including,
any such sale. If our public float exceeds $75 million at any time subsequent to the effective date of this Registration Statement,
we will no longer be subject to the one-third limitation with respect to future sales.
Dilution
We will set forth in a prospectus supplement
the following information regarding any material dilution of the equity interests of investors purchasing securities in an offering
under this prospectus:
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the net tangible book value per share of our equity securities before and after the offering;
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the amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers in
the offering; and
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the amount of the immediate dilution from the public offering price which will be absorbed by such purchasers.
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The Securities We May Offer
The descriptions of the securities contained
in this prospectus, together with the applicable prospectus supplement, summarize the material terms and provisions of the various
types of securities that we may offer. We will describe in the applicable prospectus supplement relating to any securities the
particular terms of the securities offered by that prospectus supplement. If we so indicate in a prospectus supplement, the terms
of the securities may revise, amend, modify or supersede the terms we have summarized below. We will also include in the prospectus
supplement information, where applicable, about material United States federal income tax considerations relating to the securities,
and the securities exchange or market, if any, on which the securities will be listed or quoted.
We may sell from time to time, in one or
more offerings, one or more of the following securities:
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warrants to purchase common stock; and
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units, comprised of shares of common stock and/or warrants to purchase shares of common stock.
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These securities may be offered and sold
from time to time for an aggregate offering price not to exceed $30,000,000.
Description of Common Stock
The following summary of the terms of our
common stock is subject to and qualified in its entirety by reference to our certificate of incorporation and by-laws, each as
amended to date, copies of which are on file with the SEC as exhibits to previous SEC filings. Please see “Where You Can
Find More Information” below for directions on obtaining these documents.
As of September 30, 2015, we had 170,000,000
shares of common stock authorized, of which 32,445,811 shares were outstanding. All of our outstanding common shares are fully
paid and non-assessable. Any additional common shares that we issue will be fully paid and non-assessable.
General
Holders of our common stock are entitled
to one vote per share on matters on which our stockholders vote. There are no cumulative voting rights. Holders of our common stock
are entitled to receive proportionally any dividends declared by our board of directors, out of funds that we may legally use to
pay dividends. In the event of our liquidation or dissolution, holders of our common stock are entitled to share ratably in all
assets remaining after payment of all debts and other liabilities.
Since our initial public offering in 1996,
we have not paid cash dividends on our common stock. We currently anticipate that any earnings will be retained for the continued
development of our business and we do not anticipate paying any cash dividends on our common stock in the foreseeable future.
Transfer Agent and Registrar
The transfer agent and registrar for our
common stock is American Stock Transfer & Trust Company.
Nasdaq Capital Market
Our common stock is listed for quotation
on the Nasdaq Capital Market under the symbol “CASI.”
Description of Warrants
We may issue warrants to purchase shares
of common stock. The warrants may be issued independently or together with any other securities and may be attached to or separate
from the other securities. Further terms of the warrants will be set forth in the applicable prospectus supplement.
The applicable prospectus supplement will
describe the terms of the warrants in respect of which this prospectus is being delivered, including, where applicable, the following:
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the title of the warrants;
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the aggregate number of the warrants;
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the price or prices at which the warrants will be issued and the currency in which the price for the warrants may be paid;
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the designation, terms and number of shares of common stock purchasable upon exercise of such warrants;
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the designation and terms of the shares of common stock with which such warrants are issued and the number of such warrants
issued with such shares;
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the date on and after which such warrants and the related common stock will be separately transferable, including any limitations
on ownership and transfer of such warrants;
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provisions for changes to or adjustments in the exercise price of the warrants;
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the price at which each share of common stock purchasable upon exercise of such warrants may be purchased;
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the date on which the right to exercise such warrants shall commence and the date on which such right shall expire;
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the minimum or maximum amount of such warrants which may be exercised at any one time;
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information with respect to book-entry procedures, if any;
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a discussion of certain material U.S. federal income tax consequences; and
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any other terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such
warrants.
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Description of Units
The following description, together with
the additional information we may include in any applicable prospectus supplements, summarizes the material terms and provisions
of the units that we may offer under this prospectus and any related unit agreements and unit certificates. While the terms summarized
below will apply generally to any units that we may offer, we will describe the particular terms of any series of units in more
detail in the applicable prospectus supplement. If we indicate in the prospectus supplement, the terms of any units offered under
that prospectus supplement may differ from the terms described below.
We will file as exhibits to the registration
statement of which this prospectus is a part, or will incorporate by reference from reports that we file with the SEC, any form
of unit agreement that describes the terms of the series of units we are offering, and any supplemental agreements, before the
issuance of the related series of units. The following summaries of material terms and provisions of the units are subject to,
and qualified in their entirety by reference to, all the provisions of such unit agreements and any supplemental agreements applicable
to a particular series of units. We urge you to read the applicable prospectus supplements related to the particular series of
units that we may offer under this prospectus and the complete unit agreement and any supplemental agreements that contain the
terms of the units.
We may issue units comprised of shares
of our common stock and warrants to purchase common stock or any combination thereof. 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 unit agreement under which a unit is issued may provide that the securities
included in the unit may not be held or transferred separately, at any time or at any time before a specified date.
We may evidence units by unit certificates
that we issue under a separate agreement. We may issue the units under a unit agreement between us and one or more unit agents.
If we elect to enter into a unit agreement with a unit agent, the unit agent will act solely as our agent in connection with the
units and will not assume any obligation or relationship of agency or trust for or with any registered holders of units or beneficial
owners of units. We will indicate the name and address and other information regarding the unit agent in the applicable prospectus
supplement relating to a particular series of units if we elect to use a unit agent.
We will describe in the applicable prospectus
supplement the terms of the series of units being offered, including:
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the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances
those securities may be held or transferred separately;
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any provisions of the governing unit agreement that differ from those described below; and
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any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the
units.
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The other provisions regarding our common
stock and warrants as described in this section will apply to each unit to the extent such unit consists of shares of our common
stock and warrants to purchase our common stock.
Certain Provisions of Our Certificate
of Incorporation, Our Bylaws and Delaware Law
The following paragraphs summarize certain
provisions of the Delaware General Corporation Law and our certificate of incorporation and bylaws. The summary does not purport
to be complete and is subject to and qualified in its entirety by reference to the Delaware General Corporation Law and to our
certificate of incorporation and bylaws, copies of which are on file with the SEC.
Section 203 of the Delaware General Corporation Law
We are subject to the provisions of Section 203
of the Delaware General Corporation Law, an anti-takeover law. In general, the statute prohibits a publicly held Delaware corporation
from engaging in a “business combination” with an “interested stockholder” for a period of three years
after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved
in a prescribed manner. For purposes of Section 203, a “business combination” includes a merger, asset sale or
other transaction resulting in a financial benefit to the interested stockholder, and an “interested stockholder” is
a person who, together with affiliates and employees, owns or, within three years prior, did own 15% or more of the corporation’s
voting stock.
Staggered Board of Directors
Our board of directors is divided
into three classes, the members of each of which will serve for a staggered three-year term. Our shareholders may elect only one-third
of the directors each year; therefore, it is more difficult for a third party to gain control of our board of directors than if
our board was not staggered.
Stockholder Meetings
Our bylaws provide that a special meeting
of stockholders may be called only by the chairman of the board after the receipt of a written request of a majority of our board
of directors.
Voting Rights
Each of our outstanding common shares as
of the applicable record date is entitled to one vote in each matter submitted to a vote at a meeting of stockholders and, in all
elections for directors, every stockholder has the right to vote the number of shares owned by it for as many persons as there
are directors to be elected, provided directors are elected according to our articles of incorporation and by-laws. Our stockholders
may vote either in person or by proxy.
Requirements for Advance Notification of Stockholder Nominations
and Proposals
Our bylaws establish advance notice procedures
with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by
or at the direction of the board of directors or a committee of the board of directors.
Amendment of Bylaws
Any amendment of our bylaws by our stockholders
requires approval at a meeting at which a quorum is present by vote of a majority of the number of shares of stock entitled to
vote present in person or by proxy at such meeting. Our bylaws may also be amended, changed, added to or repealed by our board
of directors without the assent or vote of our stockholders.
Legal Matters
The validity of the shares of common stock
offered hereby has been passed upon for us by Arnold & Porter LLP, Washington, D.C.
Experts
CohnReznick LLP (“CohnReznick”),
independent registered public accounting firm, has audited our consolidated financial statements included in our Annual Report
on Form 10-K for the year ended December 31, 2014, as set forth in their report which is incorporated by reference in this prospectus
and elsewhere in the registration statement. Our financial statements as of December 31, 2014 are incorporated by reference in
reliance on CohnReznick’s report, given on their authority as experts in accounting and auditing.
Where You Can Find More Information
We have filed with the SEC a registration
statement under the Securities Act that registers the distribution of the securities offered under this prospectus. The registration
statement, including the attached exhibits and schedules and the information incorporated by reference, contains additional relevant
information about us and the securities. The rules and regulations of the SEC allow us to omit from this prospectus certain information
included in the registration statement. You can obtain a copy of the registration statement from the SEC at the address listed
below or from the SEC’s website.
We file reports, proxy statements and other
documents with the SEC. You may read and copy any document we file at the SEC’s public reference room at 100 F Street, N.E.,
Washington, D.C. 20549. You should call 1-800-SEC-0330 for more information on the public reference room. Our SEC filings are also
available to you on the SEC’s website at http://www.sec.gov.
Incorporation of Certain Documents
by Reference
The SEC allows us to incorporate by reference
the information that we file with the SEC, which means that we can disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to be part of this prospectus. These documents may include periodic
reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as Proxy
Statements. Any documents that we subsequently file with the SEC will automatically update and replace the information previously
filed with the SEC. Thus, for example, in the case of a conflict or inconsistency between information set forth in this prospectus
and information incorporated by reference into this prospectus, you should rely on the information contained in the document that
was filed later.
This prospectus incorporates by reference
the documents listed below that we previously have filed with the SEC and any additional documents that we may file with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this prospectus and the termination of the offering
of the securities. These documents contain important information about us.
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The Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 27, 2015.
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The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on May 15, 2015.
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The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed with the SEC on August 14, 2015.
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The Company’s Definitive Proxy Statement on Schedule 14A for its 2015 Annual Stockholder’s Meeting, filed with
the SEC on April 17, 2015.
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The Company’s Current Reports on Form 8-K, filed on June 8, 2015, September 22, 2015 and October 1, 2015.
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The description of the Company’s common stock contained in the Company’s Registration Statement on Form 8-A filed
under the Exchange Act on May 14, 1996, including any amendment or report filed for the purpose of updating such description.
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You can obtain a copy of any or all of the
documents incorporated by reference in this prospectus (other than an exhibit to a document unless that exhibit is specifically
incorporated by reference into that document) from the SEC on its website at http://www.sec.gov. You also can obtain these documents
from us without charge by visiting our website at http://www.casipharmaceuticals.com or by requesting them in writing, by email
or by telephone at the following address:
CASI Pharmaceuticals, Inc.
9620 Medical Center Drive, Suite 300
Rockville, Maryland 20850
(240) 864-2600
ir@casipharmaceuticals.com
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