SOMERSET, N.J., Oct. 26 /PRNewswire-FirstCall/ -- DOV Pharmaceutical, Inc. announced today that it has received notification that the NASDAQ Listing Qualifications Panel has determined to delist the Company’s securities, effective at the open of business on October 27, 2006. This delisting is a result of the Company’s failure to meet the minimum market value of listed securities requirement for continued listing.
The Company has been advised that its securities are immediately eligible for quotation on the Pink Sheets, an electronic quotation service for securities traded over-the-counter, effective with the open of business on October 27, 2006. The Company’s common stock may, in the future, also be quoted on the Over-the-Counter Bulletin Board maintained by the NASD, provided that a market maker in the common stock files the appropriate application with, and such application is cleared by, the NASD. The Company anticipates disclosing further trading venue information for its common stock once such information becomes available.
The delisting of the Company’s common stock represents a “fundamental change” under the indenture governing the Company’s 2.50% convertible subordinated debentures due 2025. As a result, the Company is obligated to offer to repurchase the debentures. The Company must make this offer to repurchase the debentures on or prior to November 11, 2006. The Company is obligated to designate a repurchase date for the debentures that is not less than twenty, nor more than thirty-five, business days following the date of the Company’s offer to repurchase. Holders of the debentures will have the option, but not the obligation, to require the Company to repurchase their debentures at 100% of the principal amount of the debentures, plus any accrued and unpaid interest. There are currently $70 million in aggregate principal amount of debentures outstanding. The Company cannot predict the number of holders of debentures that will exercise their option to require the Company to repurchase their debentures. The Company does not presently have the capital necessary to repurchase all $70 million of the debentures if all holders of debentures exercise their option to require the Company to repurchase the debentures.
The Company will continue to explore a variety of initiatives to address its current capital structure issues and improve its liquidity position. The Company intends to initiate discussions with its major stakeholders regarding the Company’s strategic alternatives, including potentially a consensual restructuring of its capital structure. As with any negotiations, no assurance can be given as to when and if the Company will succeed in concluding any such agreement with its stakeholders. If the Company is unable to raise sufficient funds to repurchase the requisite amount of debentures or restructure its obligations under the debentures, it may be forced to seek protection under the United States bankruptcy laws.
The Company has retained Houlihan Lokey Howard & Zukin Capital, Inc. to serve as its financial advisor to assist with its evaluation of strategic alternatives and restructuring efforts with respect to the debentures.
The Company believes that its current cash-on-hand is adequate to meet the day-to-day obligations of the business during the restructuring process and its operations should not be affected by the delisting and restructuring process. The Company will continue to focus its internal efforts on its Phase I and II clinical and preclinical research programs for the development and discovery of drugs to treat neuropsychiatric disorders and advance the Company’s later-stage drug development programs through external partnerships and collaborations.
About DOV
DOV is a biopharmaceutical company focused on the discovery, acquisition and development of novel drug candidates for central nervous system disorders. The Company’s product candidates address some of the largest pharmaceutical markets in the world including depression, pain and insomnia.
About Pink Sheets LLC
Pink Sheets provides broker-dealers, issuers and investors with electronic and print products and information services designed to improve the transparency of the Over-the-Counter (OTC) markets. The products are designed to increase the efficiency of OTC markets, leading to greater liquidity and investor interest in OTC securities. Pink Sheets centralized information network is a source of competitive market maker quotations, historical prices and corporate information about OTC issues and issuers. Pink Sheets is neither an SEC-Registered Stock Exchange nor a NASD Broker/Dealer. Investors must contact a NASD Broker/Dealer to trade in a security quoted on the Pink Sheets. Pink Sheets LLC is a privately owned company headquartered in New York City. More information is available at http://www.pinksheets.com
About OTC Bulletin Board
The OTC Bulletin Board (OTCBB) is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in OTC equity securities. An OTC equity security generally is any equity that is not listed or traded on NASDAQ or a national securities exchange. OTCBB securities include national, regional, and foreign equity issues, warrants, units, ADRs, and Direct Participation Programs. More information is available at http://www.otcbb.com.
Cautionary Note
Statements in this press release that are not historical facts constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act, each as amended, including statements regarding our expectations with respect to the progress of and level of expenses for our clinical trial programs. You can also identify forward-looking statements by the following words: may, will, should, expect, intend, plan, anticipate, believe, estimate, predict, potential, continue or the negative of these terms or other comparable terminology. We caution you that forward-looking statements are inherently uncertain and are simply point-in-time estimates based on a combination of facts and factors currently known by us about which we cannot be certain or even relatively confident. Actual results or events will surely differ and may differ materially from our forward-looking statements as a result of many factors, some of which we may not be able to predict or may not be within our control. Such factors may also materially adversely affect our ability to achieve our objectives and to successfully develop and commercialize our product candidates, including our ability to:
* raise substantial additional capital in order to repurchase debentures that a holder tenders to us for repurchase; * raise substantial additional capital in order to fund operations; * obtain and maintain all necessary patents, licenses and other intellectual property rights; * demonstrate the safety and efficacy of product candidates at each stage of development; * develop and execute clinical programs for bicifadine, our novel analgesic; * meet our development schedule for our product candidates, including with respect to clinical trial initiation, enrollment and completion; * meet applicable regulatory standards and receive required regulatory approvals on our anticipated time schedule or at all; * meet or require our partners to meet obligations and achieve milestones under our license and other agreements; * obtain and maintain collaborations as required with pharmaceutical partners; * obtain substantial additional funds; and * produce drug candidates in commercial quantities at reasonable costs and compete successfully against other products and companies.
You should also refer to the risks discussed in our other filings with the Securities and Exchange Commission including those contained in our annual report on Form 10-K filed on March 15, 2006 and our quarterly report on Form 10-Q filed on August 9, 2006. We qualify all our forward-looking statements by these cautionary statements. Readers should not place undue reliance on our forward-looking statements. We do not undertake any obligation and do not intend to update any forward-looking statement.
DOV Pharmaceutical, Inc.
CONTACT: DOV Pharmaceutical, Inc., Investor Relations and CorporateCommunications, +1-732-907-3600
Web site: http://www.dovpharm.com/
