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United States securities and exchange commission logo
May 10, 2024
Ralph Schiess
Interim Chief Executive Officer
Onconetix, Inc.
201 E. Fifth Street, Suite 1900
Cincinnati, OH 45202
Re: Onconetix, Inc.
Amendment No. 1 to
Registration Statement on Form S-1
Filed April 26,
2024
File No. 333-277066
Dear Ralph Schiess:
We have reviewed your amended registration statement and have the
following
comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies to your
facts and circumstances
or do not believe an amendment is appropriate, please tell us why in
your response.
After reviewing any amendment to your registration statement and
the information you
provide in response to this letter, we may have additional comments.
Unless we note otherwise,
any references to prior comments are to comments in our March 12, 2024
letter.
Amendment No. 1 to Registration Statement on Form S-1
Prospectus Summary
Our Company, page 1
1. We note your response
to comment 4 and re-issue. Please revise the prospectus summary
to clarify when the
diagnostic was approved and describe the specific target market for
Proclarix or otherwise
advise. We note your disclosure on page 74 that "Proclarix is
intended for use in
diagnosing ["grey zone"] patients where it is difficult to decide if a
biopsy is necessary to
verify a potential clinically significant cancer diagnosis."
2. Consistent with your
disclosure on page 60, please update your disclosure here to quantify
the approximate
percentage ownership stake Proteomedix shareholders will have in
Onconetix if the Series
B Convertible Preferred Stock are converted into shares of
common stock.
Ralph Schiess
FirstName
Onconetix, LastNameRalph Schiess
Inc.
Comapany
May NameOnconetix, Inc.
10, 2024
May 10,
Page 2 2024 Page 2
FirstName LastName
About this Offering
Risk Factors, page 4
3. We note your reference to Incorporation of Certain Information by
Reference, but this
section appears to have been removed from this amendment. Please
revise or otherwise
advise.
Risk Factors, page 5
4. Please provide concise, bulleted or numbered statements that is no
more than two pages
summarizing your principal risk factors. Refer to Item 105(b) of
Regulation S-K.
There is substantial doubt about our ability to continue as a "going concern,"
and we will require
substantial additional funding..., page 6
5. Please update your risk factor disclosure to highlight how the
Forbearance Agreement
with Veru may impact your future capital requirements or otherwise
advise.
Our current liabilities are significant, and if those to whom we owe accounts
payable, such as
Veru, IQVIA or other creditors or vendors..., page 7
6. We note your disclosure that you have accounts payable to IQVIA;
however, we do not
note disclosure elsewhere related to any agreement with IQVIA. Please
revise your
disclosure to clarify whether IQVIA is currently providing any
material services to you or
otherwise advise.
We owe a significant amount of money to Veru, which funds we do not have. Veru
may take
action..., page 7
7. Please update your risk factor to disclose the material "certain
forbearance terms."
The life of patent protection is limited, and third parties could develop and
commercialize
methods, products, and technologies..., page 35
8. We note your disclosure on page 36 that licensed patents and pending
patent applications
are expected to expire on various dates. We also not your
disclosure on page 89 that one
patent has already expired and another was set to expire on May 3,
2024. If material,
please revise to disclose what effect you expect the expiration of
these patents to have on
your patent portfolio and your business and if you intend to take any
action to mitigate
such effect.
ENTADFI, page 65
9. We note your disclosure on page 66 that you agreed to pay Veru "15% of
(i) the monthly
cash receipts of Proteomedix for the licensing or sale of any products
or services, (ii)
monthly cash receipts of the Company or any of its subsidiaries for
the sales of Proclarix
anywhere in the world, and (iii) monthly cash receipts of the Company
or any of its
Ralph Schiess
FirstName
Onconetix, LastNameRalph Schiess
Inc.
Comapany
May NameOnconetix, Inc.
10, 2024
May 10,
Page 3 2024 Page 3
FirstName LastName
subsidiaries for milestone payments or royalties from Labcorp" as
consideration for Veru's
entrance into the Forbearance Agreement. Please revise your disclosure
to clarify the term
of the potential payments to Veru.
About the Company
Products
Proclarix, page 69
10. For each diagnostic test and decision support system described in this
section, please
revise to discuss in greater detail the technical development of each
test including the
remaining stages of technical development, regulatory filings or other
requirements (i.e.
the necessity of clinical studies, trials or other clearance or
approvals) and associated costs
and timelines. To the extent clinical studies or trials will be
required, please discuss these
requirements and any plans, costs and timelines to complete these
studies or trials. Please
include enough details so investors can clearly appreciate where each
test resides in your
development pipeline and the steps, costs and timelines necessary to
obtain final
regulatory approval.
11. We note your disclosure elsewhere that you entered into an exclusive
partnership with
Labcorp in 2023 pursuant to which Labcorp has the exclusive right to
develop and
commercialize Proclarix in the United States. Please update your
product pipeline figure
and introductory disclosure to clarify this partnership.
12. We note the inclusion of certain diagnostic candidates and decision
support systems in
your pipeline table, including Prediction (Rx), Prosgard Software and
Prostate Cancer
Decision Support. Given the limited disclosure related to these
programs, please explain
why they are sufficiently material to your business to warrant
inclusion in your pipeline
table. If they are material, please expand your disclosure in the
Business section to
provide a more fulsome discussion of these programs, including a
description of
development activities conducted. Alternatively, remove any programs
that are not
currently material from your pipeline table.
13. We note your reference to a "Cockpit" in your pipeline table. Please
clarify what this
means or otherwise advise.
14. We note your pipeline table appears to depict Proclarix twice in the
graphic, as a Decision
Support System and a Diagnostic. However, your disclosure elsewhere
appears to indicate
that "Proclarix already consists of a decision support system
integrating different values in
a risk score" and appears to be one "Proclarix diagnostic program."
Please revise your
table or otherwise advise if the decision support system is separate
from the diagnostic
test.
Clinical Studies, page 70
15. At first use, please provide a brief explanation of the disclosed
p-value and how it is used
to measure statistical significance.
Ralph Schiess
Onconetix, Inc.
May 10, 2024
Page 4
16. With respect to the clinical studies, please clearly describe the
primary endpoints, and
whether these endpoints were met. To the extent that there were
secondary endpoints,
please clearly describe, and disclose whether such endpoints were met,
or otherwise
advise.
17. Please provide the basis or data for the statement on page 71 that
Proclarix was more
accurate when compared to PSA density and online calculators, as well
as the conclusion
that Proclarix outperformed PSA density in the selection of candidates
for prostate biopsy.
You may provide an objective summary of the data that you used to draw
such
conclusions.
A novel serum biomarker quintet that improves disease prognosis in men with
confirmed
prostate cancer, page 72
18. Please provide the basis or quantify your analysis showing that the
proposed model had a
better prediction for disease progression than the CAPRA score.
In addition, please
clarify, if true, that you conducted the clinical evaluation, or
otherwise advise.
Market Opportunity
Proclarix, page 74
19. We note your disclosure that the "worldwide market for in vitro
diagnostic ( IVD )
products was valued at $117.8 billion in 2022." However, we note that
"Proclarix has been
validated and approved for use in men with elevated total PSA (2.0 to
10.0 ng/mL), a
normal DRE not suspicious for cancer and an elevated prostate volume
(35 mL)." Please
add balancing disclosure to clarify the addressable market for your
specific product of
product candidate.
Competition
Competitive Advantages of Proclarix, page 78
20. With respect to referencing the insurance company as a "Payer," please
disclose, if true,
that this is a potential or desired stakeholder. In this regard, we
note your disclosures on
pages 60 and 73 that Proclarix is currently not reimbursed in Europe,
and therefore
patients pay for Proclarix out of pocket.
Intellectual Property, page 88
21. We note your disclosure here that you partnered with New Horizon Health
Limited and
FirstName LastNameRalph Schiess
Immunovia AB. Please revise your disclosure to discuss the material
terms of your
Comapany NameOnconetix,
partnerships. Inc.
Please file these agreements as exhibits or advise. Refer
to Item
May 10,601(b)(10)(ii)(A)
2024 Page 4 of Regulation S-K.
FirstName LastName
Ralph Schiess
FirstName
Onconetix, LastNameRalph Schiess
Inc.
Comapany
May NameOnconetix, Inc.
10, 2024
May 10,
Page 5 2024 Page 5
FirstName LastName
Patents, page 89
22. Please revise your discussion of your intellectual property to clarify
and disclose the
specific material product, product groups and technologies to which
such patents relate,
whether they are owned or licensed, the type of patent protection you
have, the expiration
dates and the applicable material jurisdictions.
Certain Significant Relationships
Ology Agreement (which was later acquired by National Resilience, Inc.), page
104
23. We note your disclosure that you are "obligated to pay Ology an
aggregate amount of
approximately $2.8 million, plus reimbursement for materials and
outsourced testing,
which will be billed at cost plus 15%." Please revise your disclosure
to (i) clarify the
type of project or services Ology is performing under the agreement,
(ii) disclose the
aggregate potential payment remaining and (iii) disclose the term and
termination
provision of the project.
Onconetix s Management s Discussion and Analysis of Financial Condition and
Results of
Operations
Overview, page 104
24. We note your response to comment 17 and re-issue in part. With respect
to the license
agreement with Laboratory Corporation of America Holdings, please
revise to (i) disclose
the aggregate amounts paid to date and the aggregate amount of
remaining potential
milestone payments; (ii) quantify the royalty payments on the net
sales, or provide a range
no greater than 10 percentage points; (iii) disclose when the royalty
provisions expire; (iv)
disclose the expiration date; and (v) describe any termination
provisions.
Services Agreement, page 105
25. Please identify the Vendor referenced in the Services Agreement.
Selling Stockholders, page 153
26. We note your disclosure that the second column lists the number of
shares of Common
Stock beneficially owned by each Selling Stockholder, based on its
ownership of the
shares of Common Stock, PIOs, as of April 1, 2024. Please update this
section to provide
all required information in Item 507 of Regulation S-K, including the
amount of securities
held by the security holders prior to the offering, and the amount and
(if one percent or
more) percentage of the class to be owned by the security holders
after completion of the
offering.
Ralph Schiess
FirstName
Onconetix, LastNameRalph Schiess
Inc.
Comapany
May NameOnconetix, Inc.
10, 2024
May 10,
Page 6 2024 Page 6
FirstName LastName
Onconetix, Inc.
Consolidated Balance Sheet, page F-4
27. Please revise to clearly identify any related party amounts on the
face of your financial
statements as required by Rule 4-08(k) of Regulation S-X. In this
regard, we note that
the PMX Investor, which is a party to your Subscription Agreement, is
a 5% stockholder
of the company.
ProteoMedix AG
Notes to Condensed Financial Statements
Note 3 - Summary of Significant Accounting Policies
Revenue Recognition, page F-87
28. We note your tabular disclosure on page F-88 which disaggregates
ProteoMedix revenues
by type for the periods ended September 30, 2023 and 2022. Please
revise to clarify
whether product sales are derived from sales of Proclarix in the
European Union. If not,
please clarify from where such product sales are derived. Please also
revise to provide the
customer concentration disclosures required by ASC 275-10-50-18. In
this regard, we
note your disclosure on page 122 that development services revenue was
attributable to a
contract with a single customer while license revenue was attributable
to a one-time
licensing contract. Please also revise your revenue throughout your
document accordingly.
General
29. At first use, please define abbreviations throughout your registration
statement. For
example only, we note BPH on page 1, DRE on page 70, which
do not appear to be
defined.
30. Many of your tables and graphics include print that is not legible.
For example only, your
Figure 4 and 5 contains text that is too small to be legible. Please
revise your graphics
throughout your prospectus as applicable to ensure that the text is
legible.
31. We note your disclosure throughout your registration statement that
Proclarix is "expected
to be available in the United States ( U.S. ) in the near future."
We also note, pursuant to
your license agreement with Labcorp, "Labcorp is wholly responsible
for the cost, if any,
of research, development and commercialization of Licensed Products in
the
United States." Please revise your disclosure to clarify the current
regulatory status of
Proclarix in the United States or otherwise advise.
Please contact Tara Harkins at 202-551-3639 or Angela Connell at
202-551-3426 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Jimmy McNamara at 202-551-7349 or Jason Drory at 202-551-8342 with any
other
questions.
Ralph Schiess
Onconetix, Inc.
May 10, 2024
Page 7
Sincerely,
FirstName LastNameRalph Schiess
Division of Corporation Finance
Comapany NameOnconetix, Inc.
Office of Life Sciences
May 10, 2024 Page 7
cc: Jessica Yuan
FirstName LastName