F-1/A 1 v420423_f1a.htm F-1/A

As filed with the Securities and Exchange Commission on September 16, 2015

Registration No. 333-205515

 

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



 

AMENDMENT NO. 3
TO
FORM F-1
 
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



 

OASMIA PHARMACEUTICAL AB

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)



 

   
Sweden   2834   Not Applicable
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification No.)

Vallongatan 1
752 28 Uppsala, Sweden
+46 18 50 54 40

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

CT Corporation System
111 Eighth Avenue
New York, NY 10011
(212) 590-9330

(Name, address, including zip code, and telephone number, including area code, of agent for service)



 

Copies to:

   
Gregory Sichenzia, Esq.
Henry Nisser, Esq.
Sichenzia Ross Friedman Ference LLP
61 Broadway
New York, NY 10036
Telephone: (212) 930-9700
Facsimile: (212) 930-9725
  Julian Aleksov
Executive Chairman
Oasmia Pharmaceutical AB
Vallongatan 1
752 28 Uppsala, Sweden
Telephone: +46 18 50 54 40
Facsimile: +46 18 51 08 73
  Stephen E. Older, Esq.
Rakesh Gopalan, Esq.
McGuireWoods LLP
1345 Avenue of the Americas, 7th Floor
New York, NY 10105
Tel: (212) 548-2100
Fax: (212) 548-2150


 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o



 

CALCULATION OF REGISTRATION FEE

   
Title of each class of securities to be registered   Proposed maximum
aggregate offering
price(1)(2)
  Amount of registration fee
Ordinary Shares, par value SEK 0.10 per share(3)   $ 23,000,000     $ 2,672.60 (4) 

(1) Estimated solely for the purpose of computing the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
(2) Includes securities that the underwriters have the option to purchase to cover over-allotments, if any.
(3) American Depositary Shares issuable on deposit of the ordinary shares registered hereby have been registered under a separate registration statement on Form F-6 (File No.: 333-205841). Each American Depositary Share will represent three (3) ordinary shares.
(4) Previously paid.


 

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

 

 


 
 

TABLE OF CONTENTS

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED SEPTEMBER 16, 2015

PRELIMINARY PROSPECTUS

OASMIA PHARMACEUTICAL AB
(Incorporated in Sweden)

[GRAPHIC MISSING]

American Depositary Shares
Representing      Ordinary Shares
$     per American Depositary Share

This is the initial public offering of Oasmia Pharmaceutical AB in the United States. We are offering American Depositary Shares (each, an “ADS” and, collectively the “ADSs”), each representing three (3) of our ordinary shares (the “Ordinary Shares”). Prior to this offering, there has been no public market for the ADSs representing the Ordinary Shares. We estimate that the initial public offering price will be between $5.75 and $7.75 per ADS.

The Ordinary Shares are listed on Nasdaq Stockholm under the symbol “OASM” and on the Frankfurt Stock Exchange under the symbol “OMAX.” On August 28, 2015, the last reported sale price of the Ordinary Shares on Nasdaq Stockholm and the Frankfurt Stock Exchange was $2.13 and $1.95, respectively, based on the certified foreign exchange rates published by the Federal Reserve Bank of New York on August 28, 2015.

We have applied to list the ADSs on the NASDAQ Capital Market under the symbol “OASM.”

We are an “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012 and as such, we have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings.

Investing in the ADSs involves a high degree of risk. See “Risk Factors” beginning on page 11 of this prospectus for certain factors you should consider before investing in the ADSs.

   
  Per ADS   Total
Initial public offering price   $            $         
Underwriting discounts and commissions(1)   $     $  
Proceeds, before expenses to us   $     $  

(1) See “Underwriting” for a description of the compensation payable to the underwriters.

We have granted the underwriters a 45-day option to purchase a total of up to    additional ADSs.

The underwriters expect to deliver the ADSs to the purchasers on            , 2015.

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.

 
Sole Book-Running Manager   Lead Manager

 
Ladenburg Thalmann   Aegis Capital Corp

The date of this prospectus is September   , 2015.


 
 

TABLE OF CONTENTS

TABLE OF CONTENTS

 
  Page
Prospectus Summary     1  
The Offering     7  
Summary of Selected Consolidated Financial Data     9  
Risk Factors     11  
Cautionary Note Regarding Forward-Looking Statements     43  
Exchange Rate Information     45  
Price Range of the Ordinary Shares     46  
Use of Proceeds     48  
Dividend Policy     49  
Capitalization     50  
Dilution     51  
Selected Consolidated Financial Data     53  
Management’s Discussion and Analysis of Financial Condition and Results of Operations     55  
Industry Data     67  
Business     68  
Management     105  
Related Party Transactions     113  
Principal Shareholders     115  
Description of the Ordinary Shares     117  
Description of the American Depositary Shares     123  
Ordinary Shares and ADSs Eligible for Future Sale     130  
Taxation     131  
Underwriting     137  
Expenses Relating to the Offering     146  
Legal Matters     146  
Experts     146  
Enforceability of Civil Liabilities     146  
Where You Can Find Additional Information     147  
Index to Consolidated Financial Statements     F-1  

Until            , 2015 (25 days after the commencement of this offering), all dealers that buy, sell or trade the Ordinary Shares or the ADSs, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

We have not, and the underwriters have not, authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, and only under the circumstances and in the jurisdictions where it is lawful to do so. The information contained in this prospectus or in any applicable free writing prospectus is

i


 
 

TABLE OF CONTENTS

current only as of its date, regardless of its time of delivery or any sale of the ADSs. Our business, financial condition, results of operations and prospects may have changed since that date.

For investors outside the United States: We have not, and the underwriters have not, done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the case of the U.S. Persons outside the U.S. who come into possession of this prospectus, who must inform themselves of, and observe any restrictions relating to, the offering of the ADSs and the distribution of this prospectus outside the U.S.

Oasmia, the Oasmia logo and other trademarks or service marks of Oasmia Pharmaceutical AB appearing in this prospectus are the property of Oasmia Pharmaceutical AB. This prospectus also includes trademarks, trade names and service marks that are the property of other organizations. Solely for convenience, trademarks and trade names referred to in this prospectus appear without the ® and TM symbols, but those references are not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights or that the applicable owner will not assert its rights, to these trademarks and trade names.

All references in this prospectus to “$” are to U.S. dollars, all references to “SEK” are to Swedish kronor and all references to “TSEK” are to Swedish kronor in thousands. Solely for the convenience of the reader some, but not all, Swedish krona and Euro amounts have been translated into U.S. dollars at the relevant exchange rate posted by the Federal Reserve Bank. These translations should not be considered representations that any such amounts have been, could have been or could be converted into U.S. dollars at that or any other exchange rate as of that or any other date.

ii


 
 

TABLE OF CONTENTS

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in the ADSs. You should read this entire prospectus carefully, especially the section in this prospectus entitled “Risk Factors” beginning on page 11 and our financial statements and the related notes thereto appearing at the end of this prospectus, before making an investment decision. As used in this prospectus, references to “Oasmia,” the “company,” “we,” “us” and “our” refer to Oasmia Pharmaceutical AB and its consolidated subsidiaries, except where the context otherwise requires.

Overview

We are a pharmaceutical company focused on innovative treatments within human and animal oncology. Our product and product candidates utilize a proprietary, nanoparticle formulation technology that is designed to facilitate the administration of intravenously-delivered active pharmaceutical ingredients, without the addition of toxic solvents. We believe our formulation may result in improved safety, efficacy and ease of administration over existing drugs. Our initial development and commercialization efforts are focused on creating novel formulations of well-established chemotherapeutic drugs that can be used for the treatment of cancer in both humans and companion animals. We have four human oncology product candidates in pre-clinical and/or clinical development, and two veterinary oncology product candidates. We disclosed top-line Phase III data for our lead human oncology product candidate in the fourth quarter of 2014. In February 2014, we received conditional approval by the United States Food and Drug Administration (“FDA”) for our initial veterinary oncology product.

Below is a graphic representation of our product pipeline:

[GRAPHIC MISSING]

1


 
 

TABLE OF CONTENTS

Paclical Overview

Paclical is our XR-17 formulation of paclitaxel for human use. Our XR-17 technology increases the solubility of paclitaxel without the use of toxic solvents, which we believe facilitates the ease of administration and allows for higher doses than some of the other existing products on the market (250 mg/m2 compared to 175 mg/m2).

Based on the potential benefits of XR-17, we are pursuing a strategy to replace the use of existing paclitaxel-based products in treating multiple types of cancer. Our initial focus is to obtain regulatory approval for the treatment of ovarian cancer and expand use through additional regulatory approvals, starting with breast cancer. We have obtained orphan drug designation for epithelial ovarian cancer in the EU and in the U.S.

Paclical Phase III Clinical Trial

On June 16, 2014, Oasmia announced that the primary endpoint for the Phase III study with Paclical for treatment of ovarian cancer had been met. The endpoint was to demonstrate that Paclical and Taxol, both in combination with carboplatin, have the same progression-free survival time. Further, we disclosed final results which showed a positive risk/benefit profile in the fourth quarter of 2014. This data will serve as the basis of an MAA to the EMA, which we intend to submit by the end of 2015 or early in 2016. We will continue to follow patients from the Phase III clinical trial to measure overall survival and expect to have results in the second half of 2016. We expect to be able to utilize the Section 505(b)(2) regulatory pathway for Paclical in the United States during 2016. In addition to our efforts in the EU and the U.S., we submitted an application for marketing authorization for Paclical in Russia in September 2012 and received approval in April of 2015.

Paclical/Abraxane Head to Head Study

On August 4, 2015, we announced the results of a preliminary study of a head-to-head pharmacokinetic comparison between Paclical and Abraxane, which found that the concentration of both total an unbound paclitaxel in plasma was similar.

A phase III study with our lead human oncology product candidate, Paclical, for the treatment of epithelial ovarian cancer has recently been completed. We have received orphan designation for Paclical in the EU and the U.S. Results regarding progression free survival are available, and we intend to file an MAA in the EU based upon these results. The results were disclosed in the fourth quarter of 2014. We previously submitted an application to market Paclical in Russia, and we received market authorization in April 2015. We are also conducting and planning additional clinical trials to evaluate Paclical in other cancer types, initially breast cancer.

Our formulation is currently called Paclical for human indications, and is marketed under the name Paccal Vet-CA1 (“Paccal Vet”) for veterinary indications. We own the global commercial rights to Paclical, excluding Israel, Turkey, Russia, the Commonwealth of Independent States (“CIS”), Ukraine, Georgia and Turkmenistan. We have licensed the global commercial rights to Paccal Vet for sale in Japan, Russia and the CIS. Paclical received marketing approval in Russia and the CIS in April 2015.

Paccal Vet

Paccal Vet is the first injectable chemotherapeutic agent authorized for marketing for the treatment of squamous cell carcinoma (a cancer occurring in certain cells in the skin and the lining of other organs) and mammary carcinoma (a cancer occurring in the lining of the milk ducts of the mammary glands) in dogs. We received conditional approval by the FDA for Paccal Vet for the treatment of mammary carcinoma and squamous cell carcinoma under the Minor Use and Minor Species (“MUMS”) designation in the U.S. MUMS designation is a status similar to orphan designation for human drugs, making the sponsor eligible for incentives to support the approval or conditional approval of the designated drug, including seven years of market exclusivity in the U.S. For a description of the qualifications for Paccal Vet to receive the MUMS designation, conditional approval and full approval for dogs, see “Business — Overview.” We believe Paccal Vet can be on the market for up to five years, through annual renewals, while we collect remaining required effectiveness data for full approval. We are currently planning additional efficacy studies in dogs to collect all the necessary efficacy data for full U.S. approval of Paccal Vet for mammary carcinoma and squamous cell carcinoma.

2


 
 

TABLE OF CONTENTS

Market Opportunity for Paclical

The two leading paclitaxel-based products on the market are Taxol and Abraxane, two widely used cancer drugs. Taxol generated $1.6 billion in sales in 2000 alone, prior to losing its patent protection in 2001. In 2013, Taxol generated $92 million in post-patent sales. Abraxane, which received FDA approval in 2005 for metastatic breast cancer, followed by approvals for lung (in 2012) and pancreatic cancer (in 2013), generated $649 million in worldwide annual sales in 2013 and generated $848 million in 2014. In order to deliver paclitaxel, Taxol contains the solvent Cremophor EL. The toxicity of Cremophor EL limits the dose of Taxol that can be administered during a reasonable time, potentially limiting the efficacy of the drug. In addition, patients receiving Taxol require pre-medication with steroids and antihistamines to prevent the toxic side effects associated with the combination of paclitaxel and Cremophor EL. Abraxane was developed as a Cremophor-free product containing paclitaxel suspended in human albumin. Because Abraxane contains no Cremophor solvent, Abraxane’s recommended dosing enables the delivery of 50% more paclitaxel while maintaining a similar safety profile, and requires no routine pre-medication to prevent hypersensitivity reactions or the immediate allergic effects that often prevent or limit treatment. Like Abraxane, Paclical is free of Cremophor EL, but unlike Abraxane, Paclical does not contain human albumin.

Our Commercial Operations

We are a newly-commercial stage company with one product conditionally approved for marketing and sale, and given our recent change from development stage to commercial stage, we have not generated any significant revenue other than milestone payments from our commercial partners. Since we do not yet have sales and marketing operations, we have entered into various licensing and distribution agreements with established pharmaceutical companies to sell Paclical, Paccal Vet, and our other product candidates. We have entered into an agreement with Pharmasyntez for the commercialization of Paclical in Russia and the CIS, as well as Ukraine, Georgia and Turkmenistan, and a separate agreement with Medison Pharma for the commercialization of Paclical in Israel and Turkey. Furthermore, we have entered into an agreement with Nippon Zenyaku Kogyo for the commercialization of Paccal Vet in Japan.

Certain figures in this Summary have been translated into USD as a service to readers of this prospectus in the US. The US Dollar is not the functional currency of Oasmia, which is SEK. The conversion of currency has been made by use of a convenience rate for all figures, including those from previous periods. This rate is the closing rate as per August 28, 2015 which was 8.4649 SEK per one USD.

From our inception through April 30, 2015, such agreements have yielded net cash of SEK 87.83 million, or $10.38 million, in upfront fees and milestone payments and SEK 2.0 million, or $240,000, in royalties and sales revenue. In addition to these partnerships, we will eventually directly commercialize Paclical ourselves using a targeted sales strategy similar to the approach used by Abraxis during the launch of Abraxane in 2005. We retain the right to commercialize Paclical in the U.S. and expect to retain some rights to market Paclical in the EU.

We have incurred significant net losses since our inception on April 15, 1988. We incurred net losses of SEK 117.50 million, or $13.88 million, and SEK 105.11 million, or $12.42 million, for the fiscal years ended April 30, 2015 and April 30, 2014, respectively. These losses have resulted principally from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. As of April 30, 2015, we had a deficit accumulated during development stage of SEK 485.07 million, or $57.30 million, and cash, cash equivalents and short-term investments of SEK 76.99 million, or $9.10 million. We expect to continue to incur operating losses in the near future as we continue our clinical and preclinical development programs, apply for marketing approval for our product candidates and, subject to obtaining regulatory approval of our product candidates, establish sales and marketing partnerships in preparation for the potential commercialization of our product candidates. We believe that the net proceeds of this offering, together with our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements for at least the next twelve months.

3


 
 

TABLE OF CONTENTS

Risk Factors

Our business is subject to numerous risks that could prevent us from successfully implementing our business strategy. These and other risks are discussed more fully in “Risk Factors” immediately following this prospectus summary and include the following:

We are substantially dependent on the success of our product and product candidates, of which none may receive full regulatory approval or be successfully commercialized.
Our product and product candidates may not achieve market acceptance, which would curtail or vitiate our ability to generate revenue from new products.
Problems in our manufacturing process, failure to comply with manufacturing regulations or unexpected increases in our manufacturing costs could harm our business, results of operations and financial condition.
We expect to face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.
We may not be successful in our efforts to expand our pipeline of product candidates.
The veterinary market we are seeking to enter with Paccal Vet and our other animal health products is untested.
Our independent registered public accounting firm has advised us that it has identified a material weakness in our internal control over financial reporting relating to inadequate financial statement preparation and review procedures.
Our concentration of ownership could be disadvantageous to shareholders.
There are relationships among our directors and our largest shareholders that could pose a conflict of interest.
We have incurred significant losses since our inception. We expect to incur losses over the next several years and may never achieve or maintain profitability.
There is a high rate of failure for drug candidates proceeding through clinical trials.
Clinical trials for our product candidates are expensive, time consuming, uncertain and susceptible to change, delay or termination.
The regulatory approval process is uncertain, requires us to utilize significant resources, and may prevent us or our commercial partners from obtaining approvals for the commercialization of some or all of our drug candidates.
If our efforts to protect the proprietary nature of the intellectual property related to our product or any of our current or future product candidates are not adequate, we may not be able to compete effectively in our market.

Recent developments

Conditional Approval of Paccal Vet

On February 27, 2014, we received FDA conditional approval for Paccal Vet, which made us eligible for royalties and potential milestone payments from our commercial partner Abbott Animal Health, the animal health division of Abbott Laboratories.

New Financing

As at March 31, 2015, Oasmia has a loan from Nexttobe, its presently second largest shareholder, of SEK 87 million, or $10.28 million. This loan, which replaces the earlier loan from Nexttobe of SEK 105 million, or $12.40 million, has a maturity date of December 30, 2015 and carries a fixed annual interest rate of 8.5%.

4


 
 

TABLE OF CONTENTS

Oasmia also has a bank loan of SEK 20 million, or $2.36 million, from Nordea Bank AB, which replaces the earlier loan from the same bank of SEK 40 million, or $4.73 million. This loan is due on December 30, 2015, and the interest rate is tied to the Stockholm interbank rate (STIBOR 1 week + 2%).

New Ordinary Share Issuance

During the business year 2014/2015 two new share issues were performed:

In July of 2014, 2,500,000 Ordinary Shares were issued, providing SEK 50 million, or $5.91 million, before transaction costs and in December, 2014, 9,785,814 Ordinary Shares were issued in a preferential rights issue, which provided SEK 176.15 million, or $20.81 million, before transaction costs.

Termination of Zoetis Agreement

In connection with Zoetis’ purchase of Abbott Animal Health, Zoetis provided the Company with notice that Zoetis will terminate the distribution arrangement effective September 30, 2015. The parties are currently formulating a plan to transition the distribution activities back to Oasmia. Oasmia views this as a positive development, and is implementing alternative sales and distribution channels that aligns with its business plans and growth strategy, including by use of its newly formed subsidiary, Oasmia Pharmaceutical, Inc.

Pharmacokinetic Comparison with Abraxane

On August 4, 2015, we announced today the topline findings from a head-to-head comparison study of our lead human cancer product candidate Paclical® and Celgene’s Abraxane®, which show similar pharmacokinetic (PK) profiles. The study was conducted in women with metastatic breast cancer.

The pharmacokinetic properties of paclitaxel have also been evaluated following an intravenous infusion of Paclical or Abraxane at a dose of 260 mg/m2 in order to compare the pharmacokinetics of Paclical and Abraxane in humans. The study was a cross-over study and both the mean total plasma concentrations and the mean unbound plasma concentrations were compared, and both were similar for the two formulations. We interpret these findings as an indication of similar efficacy of the two compounds.

Corporate Information

Our registered and principal executive offices are located at Vallongatan 1, 752 28 Uppsala, Sweden, our general telephone number is (46) 18 50 54 40 and our website is http://www.oasmia.com. Our website and information contained on or accessible through our website are not part of this prospectus. Our agent for service of process in the U.S. is CT Corporation System. Our Ordinary Shares have been listed on NASDAQ Stockholm since June 24, 2010 and on the Frankfurt Stock Exchange since January 24, 2011.

Implications of Being an Emerging Growth Company

As a company with less than $1.0 billion in revenue for our fiscal year ending April 30, 2014, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable to public companies in the U.S. These reduced requirements include not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), in the assessment of the emerging growth company’s internal control over financial reporting. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards.

We may take advantage of these reduced reporting obligations until the last day of our fiscal year following the fifth anniversary of the date of the first sale of the Ordinary Shares pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), and as a result of, such reduced reporting obligations will cease 2021. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenue exceeds $1.0 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company.

We have elected to take advantage of certain of the reduced disclosure obligations in this prospectus and may elect to take advantage of other reduced reporting requirements in future filings with the Securities and

5


 
 

TABLE OF CONTENTS

Exchange Commission (the “SEC”). As a result, the information that we provide to our shareholders and holders of the Ordinary Shares may be different than the information you might receive from other public reporting companies in which you hold equity interests.

The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. We have irrevocably elected not to avail ourselves of this exemption and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

6


 
 

TABLE OF CONTENTS

THE OFFERING

Securities offered by us    
        ADSs (or      ADSs if the underwriters exercise their option to purchase additional ADSs in full).
ADSs to be outstanding after this offering    
        (or      ADSs if the underwriters exercise their option to purchase additional ADSs in full).
Ordinary Shares to outstanding after this offering    
        (or      Ordinary Shares if the underwriters exercise their option to purchase additional ADSs in full). Note: all descriptions of Ordinary Shares outstanding immediately after closing of this offering assume completion of the temporary arrangement required by Swedish law in connection with closing and issuance of new Ordinary Shares related to this offering. See “Related Party Transactions — Stock Lending Agreement.”
Option to purchase additional ADSs    
    We have granted the underwriters a 45-day option to purchase up to additional ADSs to cover over-allotments, if any.
Use of Proceeds    
    We intend to use the net proceeds of this offering to fund (1) new clinical trials and other regulatory requirements of multiple product candidates; (2) production development, including validation batches; (3) capital expenditures; and (4) other general corporate purposes, including employees, rent, and costs and expenses of being a U.S. public company. See “Use of Proceeds” for a description of the intended use of proceeds from this offering.
Offering price    
    On August 28, 2015, the last reported sale price of the Ordinary Shares on the Nasdaq Stockholm was SEK 18.00 per Ordinary Share, equivalent to approximately $6.38 per ADS based on an assumed exchange rate of SEK 8.4649 to $1.00 and a ratio of three (3) Ordinary Shares for each ADS. See “Underwriting” for a discussion of factors considered in determining the price to the public of the ADSs.
The ADSs    
    Each ADS represents three (3) Ordinary Shares. The depositary will hold the Ordinary Shares underlying your ADSs. You will have rights as provided in the deposit agreement. You may cancel your ADSs and withdraw the underlying Ordinary Shares. The depositary will charge you fees for, among other acts, any cancellation. Except in certain limited instances described in the deposit agreement, we may amend or terminate the deposit agreement without your consent. If you continue to hold your ADSs, you agree to be bound by the terms of the deposit agreement then in effect.
    To better understand the terms of the ADSs, you should carefully read “Description of American Depositary Shares” in this prospectus. You should also read the deposit agreement, which is an exhibit to the registration statement that includes this prospectus.
Expected NASDAQ Capital Market Symbol    
    OASM

7


 
 

TABLE OF CONTENTS

Lock-up Agreements    
    We expect to enter into an agreement with the underwriters, subject to certain exceptions, not to sell or dispose of any of the Ordinary Shares, the ADSs or securities convertible into or exchangeable or exercisable for any of these securities until 180 days after the date of this prospectus. Our directors, officers, and large institutional investors have agreed to similar lock-up restrictions for a period of 180 days. See “Underwriting.”
Risk Factors    
    See “Risk Factors” beginning on page 11 and other information included in this prospectus for a discussion of factors that you should consider carefully before deciding to invest in the ADSs.

8


 
 

TABLE OF CONTENTS

SUMMARY OF SELECTED CONSOLIDATED FINANCIAL DATA

You should read the following selected financial data in conjunction with our financial statements and the related notes thereto appearing elsewhere in this prospectus and in the section of this prospectus entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The following table summarizes our consolidated financial data as of the dates and for the periods indicated. The selected consolidated financial data for the fiscal years ended April 30, 2015 and April 30, 2014 have been derived from our consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Financial Reporting Interpretations Committee. Furthermore, the recommendation RFR 1, Supplementary accounting regulations for Groups, issued by the Swedish Financial Reporting Board, has been applied. We have prepared the consolidated financial information set forth below on the same basis as our audited consolidated financial statements.

Our consolidated financial statements are prepared and presented in Swedish krona, which is our presentation currency. All tables, if not expressly otherwise stated, in this prospectus are therefore in Swedish krona.

Our historical results are not necessarily indicative of the results that may be expected in the future. The following summary consolidated financial data should be read in conjunction with the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements included elsewhere in this prospectus, including our discussion therein regarding the material weakness in our internal control over financial reporting identified by our auditors.

Key figures are translated into USD as additional information as a service to readers of this prospectus in the US. The US Dollar is not the functional currency of Oasmia, which is SEK. The conversion of currency has been made by use of a convenience rate for all figures including those from previous periods. This rate is the closing rate as per August 28, 2015 which was 8.4649 SEK per one USD.

Consolidated Income Statement Data:

       
  Year Ended April 30,
     2015   2015   2014   2014
     (TSEK)   (USD,
in thousands)
  (TSEK)   (USD,
in thousands)
Net sales     2,070       245       60       7  
Capitalized development cost     16,797       1,984       29,464       3,481  
Other operating income     221       26       4,454       526  
Raw materials, consumables and goods for resale     (10,062 )      (1,189 )      (6,835 )      (807 ) 
Other external expenses     (60,739 )      (7,175 )      (75,189 )      (8,882 ) 
Employee benefit expenses     (50,530 )      (5,969 )      (45,101 )      (5,328 ) 
Depreciation, amortization and impairment     (5,190 )      (613 )      (4,941 )      (584 ) 
Other operating expenses     (792 )      (94 )      (3 )      (0.4 ) 
Operating income     (108,225 )      (12,785 )      (98,091 )      (11,588 ) 
Financial income     210       25       192       23  
Financial expenses     (9,482 )      (1,120 )      (7,213 )      (852 ) 
Financial items, net     (9,272 )      (1,095 )      (7,021 )      (829 ) 
Income before taxes     (117,497 )      (13,880 )      (105,112 )      (12,417 ) 
Taxes
                                      
Income for the period     (117,497 )      (13,880 )      (105,112 )      (12,417 ) 
Earnings per share, before and after dilution, SEK(1)     (1.28 )      (0.15 )      (1.27 )      (0.14 ) 
Weighted average number of shares, in thousands before and after dilution(1)     91,655       91,655       82,848       82,848  

(1) Recalculation of historical figures has been performed with regards to capitalization issue components in the preferential rights share issue carried out in the fiscal quarter ended January 31, 2013 and January 31, 2015.

9


 
 

TABLE OF CONTENTS

Consolidated Balance Sheet Data:

       
  Year Ended April 30,
     2015   2015   2014   2014
     (TSEK)   (USD,
in thousands)
  (TSEK)   (USD,
in thousands)
Non-current assets     427,879       50,547       414,106       48,920  
Cash, cash equivalents and short-term investments     76,990       9,095       48,241       5,699  
Total current assets     86,690       10,241       54,276       6,412  
Total assets     514,569       60,789       468,383       55,332  
Total equity     375,711       44,385       281,907       33,303  
Total non-current liabilities     0       0       891       105  
Total current liabilities     138,858       16,404       185,584       21,924  
Total liabilities     138,858       16,404       186,476       22,029  

Consolidated Cash Flow Data:

       
  Year Ended April, 30
     2015   2015   2014   2014
     (TSEK)   (USD,
in thousands)
  (TSEK)   (USD,
in thousands)
Cash flow from operating activities     (107,666 )      (12,719 )      (86,899 )      (10,266 ) 
Cash flow from investing activities     (69,755 )      (8,240 )      (35,682 )      (4,215 ) 
Cash flow from financing activities     156,017       18,431       107,865       12,743  

10


 
 

TABLE OF CONTENTS

RISK FACTORS

Investing in the ADSs involves a high degree of risk. You should carefully consider the following risk factors and all other information contained in this prospectus, including our consolidated financial statements, before making an investment decision regarding our securities. The risks and uncertainties described below are those significant risk factors, currently known and specific to us, which we believe are relevant to an investment in our securities. The risk factors are not placed in order of priority and should not be construed as comprehensive. Additional risks and uncertainties not currently known to us or those we now deem immaterial may also harm us and adversely affect your investment in the ADSs. If any of these risks materialize, our business, results of operations, financial condition and future prospects could suffer and the price of the ADSs could decline and you could lose part or all of your investment. In addition to the information disclosed in this prospectus, investors should make their own assessment of each risk factor and its potential impact on our future development as well as an assessment of the impact of general conditions, including market conditions and world events.

Risks Related to Our Product and Product Candidates

We are substantially dependent on the success of our product and product candidates, none of which may receive full regulatory approval or be successfully commercialized.

None of our product candidates has been approved for full commercial distribution, and only one of our product candidates has been approved for commercial distribution at all. To date, we have invested nearly all of our resources in the research and development of our product candidates, which consist of Paccal Vet-CA1 (“Paccal Vet”) for cancer in dogs, Paclical for ovarian cancer and other cancers in humans, Docecal for breast cancer in humans, Doxophos Vet for lymphoma in dogs, Doxophos for breast cancer and other cancers in humans, and OAS-19 for various cancers in humans. Our near-term prospects, including our ability to finance our company and to enter into strategic collaborations and generate revenue, are directly dependent upon the successful development and commercialization of our product and product candidates, particularly Paccal Vet and Paclical.

The development and commercial success of our product and product candidates will depend on a number of factors, including, without limitation, the following:

timely initiation and successful completion of preclinical studies and clinical trials for our product candidates;
demonstration to the satisfaction of the United States Food and Drug Administration (“FDA”), the European Medicines Agency (“EMA”) and other applicable regulatory authorities the safety and efficacy of our product and product candidates as well as to obtain regulatory and marketing approval for our product and product candidates in the U.S., Europe and elsewhere;
continued compliance with all clinical and regulatory requirements applicable to our product and product candidates;
maintenance of an acceptable safety profile of our products following regulatory approval;
competition with other treatments;
creation, maintenance and protection of our intellectual property portfolio, including patents and trade secrets, and regulatory exclusivity for our product and product candidates;
effectiveness of our and our partners’ marketing, sales and distribution strategy and operations;
ability of our third-party manufacturers to manufacture supplies of our product and product candidates and to develop, validate and maintain commercially viable manufacturing processes;
ability to launch commercial sales of our product and product candidates following regulatory approval, whether alone or in collaboration with others;

11


 
 

TABLE OF CONTENTS

acceptance of our animal health product and product candidates by veterinarians, pet owners and the animal health community; and
acceptance of our human health product candidates from physicians, health care payers, patients and the medical community.

Many of these factors are beyond our control, and we cannot assure you that we will ever be able to generate sufficient revenue or any revenue from the sale of our product and product candidates. Our failure in any of the above factors or in successfully commercializing one or more of our product and product candidates, or any significant delay in doing so, could have a material adverse effect on our business, results of operations and financial condition, and the value of your investment could substantially decline.

Our product and product candidates may not achieve market acceptance, which could limit our ability to generate revenue from new products.

Even if we develop our product and product candidates and gain regulatory approvals for our products, unless veterinarians, physicians, and patients accept our products, we may not be able to sell our products and generate significant revenue. We cannot assure you that our current product and product candidates or any other planned products will achieve market acceptance and revenue if and when they obtain the requisite regulatory approvals. Market acceptance of any product depends on a number of factors, including but not limited to:

the indication and warnings approved by regulatory authorities in the product label;
continued demonstration of efficacy and safety in commercial use;
physicians’ or veterinarians’ willingness to prescribe the product;
reimbursement from third-party payors such as government health care systems and insurance companies;
the price of the product, including pet owners’ willingness to pay for treatment;
the nature of any post-approval risk management plans mandated by regulatory authorities;
competition; and
the effectiveness of marketing and distribution support.

Any failure by our product and product candidates to achieve market acceptance or commercial success could have a material adverse effect on our business, results of operations and financial condition.

Problems in our manufacturing process, failure to comply with manufacturing regulations or unexpected increases in our manufacturing costs could harm our business, results of operations and financial condition.

We are responsible for the manufacture and supply of Paccal Vet, Paclical, and our other product candidates for our commercial partners and for use in clinical trials. The manufacturing of our product and product candidates necessitates compliance with US FDA, EU EMA and international current Good Manufacturing Practice (“cGMP”) and other international regulatory requirements. Although we contract with third parties such as Baxter Oncology GmbH for a certain amount of the manufacturing of Paccal Vet, Paclical and our other product candidates, the market authorization for Paccal Vet and Paclical remains with us. As such, even if we could potentially have a claim against one or more third parties, we are legally liable for any noncompliance related to Paccal Vet and Paclical and we expect to retain legal responsibility for future product candidates as well.

If we are unable to manufacture, or contract to manufacture, our product and product candidates in accordance with regulatory specifications, or if there are disruptions in the manufacturing process due to damage, loss or failure to pass regulatory inspections of manufacturing facilities, we may not be able to meet the demand for our products or supply sufficient product for use in clinical trials, and this may harm our ability to commercialize Paccal Vet, Paclical and our other product candidates on a timely or cost-competitive basis, or preclude us from doing so at all. In addition, we are in the process of expanding and changing parts

12


 
 

TABLE OF CONTENTS

of our manufacturing facilities in order to meet future demand and FDA requirements, a program which requires significant time and resources. We also expect to expand and upgrade other parts of our manufacturing facilities in the future. These activities may lead to delays, interruptions in supply, or may prove to be more costly than we currently anticipate. Any problems in our manufacturing process could have a material adverse effect on our business, results of operations and financial condition.

In addition, under our license agreements, we expect to generate revenue from the supply of commercial products to our partners at a fixed percentage of our cost of goods sold, and thus any increases in our manufacturing costs could materially and adversely affect our margins and our financial condition.

Before we can begin commercial manufacture of Paccal Vet, Paclical or our other product candidates for sale in the U.S., we must obtain FDA regulatory approval for the product, which requires a successful FDA inspection of our manufacturing facilities, processes and quality systems in addition to other product-related approvals. Although we successfully passed an FDA Pre-Approval Inspection of our manufacturing facility in Uppsala, Sweden, our pharmaceutical facilities are continuously subject to inspection by the FDA and foreign regulatory authorities, even after product approval. Due to the complexity of the processes used to manufacture our product and product candidates, we may be unable to pass federal, state or international regulatory inspections in a cost effective manner, whether initially on at any time thereafter. If we are unable to comply with manufacturing regulations, we may be subject to fines, unanticipated compliance expenses, recall or seizure of any approved products, or legal actions such as injunctions or criminal or civil prosecution. These possible sanctions could materially and adversely affect our business, results of operations and financial condition. See also “— Risks Related to Development and Regulatory Approval of Our Product and Product Candidates — The regulatory approval process is uncertain, requires us to utilize significant resources, and may prevent us or our commercial partners from obtaining approvals for the commercialization of some or all of our drug candidates.”

We expect to face substantial competition, which may result in others discovering, developing or commercializing products before, or more successfully than, we do.

The development and commercialization of new drug products is highly competitive. We face competition with respect to our current product and product candidates, and will face competition with respect to any product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. In addition to existing therapeutic treatments for the indications we are targeting with our product and product candidates, we also face potential competition from other drug candidates in development by other companies. Our potential competitors include large health care companies, such as Celgene, Merck & Co., Inc., Sanofi S.A., Eli Lilly and Company, Bayer AG, Novartis AG and Boehringer Ingelheim GmbH. Each of these companies also has a presence in animal health. We also know of several smaller early stage companies that are developing products for use in the animal or human health products market. We expect that Paccal Vet and Doxophos Vet will face competition from Palladia, made by Zoetis, Inc., Masivet, made by AB Science S.A., and AT-004 and AT-005, made by Aratana Therapeutics, Inc. We may also face competition from generic medicines and products approved for use in humans that are used off-label for pets. Some of the potential competitive compounds referred to above are being developed by large, well-financed and experienced pharmaceutical and biotechnology companies or have been partnered with such companies, which may give them development, regulatory and marketing advantages over our products.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers or other third-party payers seeking to encourage the use of generic products. Generic products are currently on the market for the indications that we are pursuing. If our product candidates achieve marketing approval, we expect that they will be priced at a significant premium over competing generic products.

13


 
 

TABLE OF CONTENTS

Some of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

If we are unable to compete successfully, we may be unable to grow and sustain our revenue, which could materially and adversely affect our business, results of operations and financial condition.

Generic products may be more cost-effective than our products.

In addition to the competition that we may face from products produced by other companies in general, we may also face competition from generic alternatives to our products. For example, Paclical is expected to compete with the generic form of Taxol. Generic alternatives are generally less expensive, and competitors who market generic drugs are becoming more aggressive in terms of pricing. Consequently, generic products constitute an increasing percentage of both overall human and animal health sales in certain regions. If human and animal health care customers increase their use of new or existing generic products, or if we are unable to compete with existing generic products, our business, results of operations and financial condition could be materially and adversely affected.

Serious adverse events or other safety risks could require us to abandon development and preclude, delay or limit approval of our product and product candidates, or limit the scope of any approved label or market acceptance.

If any of Paccal Vet, Paclical, or any of our other product candidates, prior to or after any approval for commercial sale, causes serious or unexpected side effects, or become associated with other safety risks such as misuse, abuse or diversion, a number of potentially significant negative consequences could result, including, without limitation:

regulatory authorities may interrupt, delay or halt clinical trials;
regulatory authorities may deny regulatory approval of our product candidates;
regulatory authorities may require certain labeling statements, such as warnings or contraindications or limitations on the indications for use, or impose restrictions on distribution in the form of a Risk Evaluation and Mitigation Strategy (“REMS”), in connection with approval, if any;
regulatory authorities may withdraw their approval, require more onerous labeling statements or impose a more restrictive REMS of any product that is approved;
we may be required to change the way the product is administered or conduct additional clinical trials;
our relationships with our commercial partners may suffer;
we could be sued and held liable for harm caused to patients; and
our reputation may suffer.

We may voluntarily suspend or terminate our clinical trials if at any time we believe that they present an unacceptable risk to participants or if preliminary data demonstrate that our product and product candidates are unlikely to receive regulatory approval or are unlikely to be successfully commercialized. In addition, regulatory agencies, an Institutional Review Board (“IRB”), or data safety monitoring boards may at any time recommend the temporary or permanent discontinuation of our clinical trials or request that we cease using investigators in the clinical trials if they believe that the clinical trials are not being conducted in accordance with applicable regulatory requirements, or that they present an unacceptable safety risk to participants. Although we have never been asked by a regulatory agency, IRB or data safety monitoring board to

14


 
 

TABLE OF CONTENTS

temporarily or permanently discontinue a clinical trial, if we elect or are forced to suspend or terminate a clinical trial of Paccal Vet, Paclical or any of our other product candidates, the commercial prospects for that product will be harmed and our ability to generate product revenue from that product may be delayed or eliminated. Furthermore, any of these events could prevent us or our partners from achieving or maintaining market acceptance of the affected product and could substantially increase the costs of commercializing our product and product candidates and materially impair our ability to generate revenue from the commercialization of these products either by us or by our commercial partners and could have a material adverse effect on our reputation, business, results of operations and financial condition.

If we fail to obtain and sustain an adequate level of reimbursement for our products by third-party payers, sales and profitability will be adversely affected.

The course of medical treatment for human patients is, and will continue to be, expensive. We expect that most patients and their families will not be capable of paying for our products themselves. Accordingly, it is unlikely that there will be a commercially viable market for Paclical or our other human health care product candidates without reimbursement from third-party payors. Additionally, even if there is a commercially viable market, if the level of third-party reimbursement is insufficient from the patient’s perspective, our revenue and gross margins will be materially and adversely affected.

A current trend in the U.S. health care industry, as well as in other countries around the world, is toward cost containment. Large public and private payers, managed care organizations, group purchasing organizations and similar organizations are exerting increasing influence on decisions regarding the use of, and reimbursement levels for, particular treatments. Third-party payers, such as government programs, including Medicare in the U.S. and private health care insurers, carefully review and have increasingly been challenging the coverage of, and prices charged for, medical products and services. Many third-party payers limit coverage of or reimbursement for newly-approved health care products. Reimbursement rates from private health insurance companies vary depending on the company, the insurance plan and other factors. Cost-control initiatives could decrease the price we or our partners establish for products, which could result in lower product revenue and profitability.

Reimbursement systems in international markets vary significantly by country and by region, and reimbursement approvals must be obtained on a country-by-country basis. Our partners may elect to reduce the price of our products in order to increase the likelihood of obtaining reimbursement approvals. In many countries, products cannot be commercially launched until reimbursement is approved and the negotiation process in some countries can exceed 12 months. In addition, pricing and reimbursement decisions in certain countries can be affected by decisions taken in other countries, which can lead to mandatory price reductions and/or additional reimbursement restrictions across a number of other countries, which may thereby adversely affect our sales and profitability. If countries set prices that are not sufficient to allow us or our partners to generate a profit, our partners may refuse to launch the product in such countries or withdraw the product from the market, which would adversely affect our sales and profitability and could materially and adversely affect our business, results of operations and financial condition.

We may not be successful in our efforts to expand our pipeline of product candidates.

One element of our strategy is to expand our pipeline of pharmaceuticals based on our XR-17 technology and advance these product candidates through clinical development for the treatment of a variety of indications. Although our research and development efforts to date have resulted in a number of development programs based on XR-17 technology, we may not ultimately be able to develop product candidates that are safe and effective. Even if we are successful in continuing to expand our pipeline, the potential product candidates that we identify may not be suitable for clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to receive marketing approval and achieve market acceptance. In addition, if we attempt to apply XR-17 technology to develop product candidates for indications outside of cancer, we will need to conduct genotoxicity, carcinogenicity and immunotoxicity trials, in which the results may be uncertain. If we do not successfully develop and commercialize product candidates based upon our technological approach, we will not be able to obtain product revenue in future periods, which would make it unlikely that we would ever achieve profitability.

15


 
 

TABLE OF CONTENTS

The veterinary market we are seeking to enter with Paccal Vet and our other animal health products is untested.

The market for cancer drugs for dogs is nascent and changing. Consequently, it is difficult to assess to what extent cancer drugs might be accepted by veterinarians, which complicates both the estimate of the market size as well as our share thereof, if any. If a market does not develop, or our share thereof is not meaningful, it could have a material adverse effect on our business, results of operations and financial condition.

For our animal health products, changes in distribution channels could negatively impact our market share and distribution of our animal health products.

Since our animal health product and product candidates are designed to be given intravenously by veterinarians, pet owners will not be able to obtain our products over-the-counter or via the internet. Increasingly, pet owners purchase animal health products from sources other than veterinarians, such as internet-based retailers, “big-box” retail stores or other over-the-counter distribution channels. This trend has been demonstrated by the significant shift away from the veterinarian distribution channel in the sale of parasiticides and vaccines in recent years. Pet owners also could decrease their reliance on, and visits to, veterinarians as they rely more on internet-based animal health information. Since we market our animal health products through the veterinarian distribution channel, any decrease in visits to veterinarians by pet owners could reduce our market share for such products and materially and adversely affect our operating results and financial condition.

Business interruptions could delay us in the process of developing our product and product candidates and could disrupt our product sales.

Loss of our manufacturing facilities, stored inventory or laboratory facilities through accidents, fire or other causes could have an adverse effect on our ability to meet demand for our products, to continue product development activities and to conduct our business. Failure to supply our partners with commercial products may lead to adverse consequences, including the right of certain partners to take over responsibility for product supply. We have insurance coverage to compensate us for such business interruptions, but should such coverage prove insufficient to fully compensate us for damage to our business resulting from any significant property or casualty loss to our inventory or facilities, it could have a material adverse effect on our business, results of operations and financial condition.

Product recalls or inventory losses caused by unforeseen events, cold chain interruption and testing difficulties may adversely affect our operating results and financial condition.

Paccal Vet, Paclical and our other product candidates are manufactured and distributed using technically complex processes requiring specialized facilities, highly specific raw materials and other production constraints. The complexity of these processes, as well as the strict company and government standards for the manufacture of our products, subjects us to production risks. While product batches released for use in clinical trials or for commercialization undergo sample testing, some defects may only be identified following product release. In addition, process deviations or unanticipated effects of approved process changes may result in these intermediate products not complying with stability requirements or specifications. Most of our products must be stored and transported at temperatures within a certain range, which is known as “strict cold chain” storage and transportation. If these environmental conditions deviate, our products’ remaining shelf lives could be impaired or their efficacy and safety could become adversely affected, making them no longer suitable for use. The occurrence or suspected occurrence of production and distribution difficulties can lead to lost inventories, and in some cases product recalls, with consequential reputational damage and the risk of product liability. The investigation and remediation of any identified problems can cause production delays, substantial expense, lost sales and delays of new product launches, any of which could have a material adverse effect on our business, results of operations and financial condition.

16


 
 

TABLE OF CONTENTS

Related to Our Financial Position and Capital Needs

Our independent registered public accounting firm included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited consolidated financial statements included in this Prospectus.

Our audited consolidated financial statements were prepared assuming that we will continue as a going concern. However, the report of our independent registered public accounting firm included elsewhere in this Prospectus contains an explanatory paragraph on our consolidated financial statements stating there is substantial doubt about our ability to continue as a going concern, meaning that we may not be able to continue in operation for the foreseeable future or be able to realize assets and discharge liabilities in the ordinary course of operations. Such an opinion could materially limit our ability to raise additional funds through the issuance of new debt or equity securities or otherwise. There is no assurance that sufficient financing will be available when needed to allow us to continue as a going concern. The perception that we may not be able to continue as a going concern may also make it more difficult to raise additional funds or operate our business due to concerns about our ability to meet our contractual obligations.

Based on current operating plans, assuming successful completion of this offering, we believe that we have resources to fund our operations for at least the next twenty-four months, but will require further funds to finance our activities thereafter. In the event this offering is not consummated as expected we will need to consider alternative arrangements and such arrangements could have a potentially significant negative impact on our ability to continue our operations.

Our independent registered public accounting firm has advised us that it has identified a material weakness in our internal control over financial reporting relating to inadequate financial statement preparation and review procedures.

In connection with the audit of our financial statements as of and for the fiscal years ended April 30, 2015 and April 30, 2014 our independent registered public accounting firm reported to our audit committee that it had identified a material weakness in our internal control over financial reporting related to inadequate financial statement preparation and review procedures. Under standards established by the Public Company Accounting Oversight Board (United States), a material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. Specifically, our independent registered public accounting firm determined that we did not have adequate procedures and controls to ensure that accurate financial statements could be prepared and reviewed on a timely basis, including:

sufficient resources and processes in place, including controls in the finance and accounting department, to adequately perform a timely financial statement close process resulting in errors in period-end accruals related to capitalized research and development expenses.
adequate internal review processes in place over critical accounting areas including timely operation whereby management identifies and resolves significant or complex accounting matters.

As a result of this material weakness, we plan to:

continue improving necessary procedures to capture all expenses for capitalized research and development expenses;
further enhance the internal review processes of critical and significant accounting areas by involving the management group deeper in such judgments and estimates;
strengthened the finance department by recruitments and organizational change and by hiring additional personnel;
improve know how of IFRS standards, as adopted by the IASB, through additional education in IFRS standards and also specific SEC reporting in the U.S.;
continue implementing and improving formalized written policies and procedures for the timely accrual of capitalized research and development expenses;

17


 
 

TABLE OF CONTENTS

enhance oversight procedures in an effort to ensure that the accrual process has been performed prior to finalization of the financial statements at each reporting period; and
formalize accounting evaluation of non-routine judgments and estimations.

We concurred with the findings of our independent registered public accounting firm. We are working to remediate the material weakness. The actions that we are taking are subject to ongoing senior management review and audit committee oversight. Although we plan to complete this remediation process as quickly as possible, we cannot at this time estimate how long it will take, and our initiatives may not prove to be successful in remediating this material weakness. If we are unable to successfully remediate this material weakness and if we are unable to produce accurate and timely financial statements, our share price may be adversely affected and we may be unable to maintain compliance with applicable stock exchange listing requirements.

We will be required to disclose changes made in our internal control over financial reporting and procedures on a semi-annual basis and our management will be required to assess the effectiveness of these controls annually. However, for as long as we are an “emerging growth company” under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. We could be an “emerging growth company” for up to five years. An independent assessment of the effectiveness of our internal control over financial reporting could detect problems that our management’s assessment might not. Additional undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur additional expenses of remediation, and adversely affect our reputation, financial condition and operating results.

We face litigation risks as a result of the material weakness in our internal control over financial reporting identified by our independent registered public accounting firm.

In connection with the audit of our financial statements as of and for the fiscal years ended April 30, 2013 and April 30, 2012 our independent registered public accounting firm reported to our audit committee that it had identified a material weakness in internal control over financial reporting related to inadequate financial statement preparation and review procedures. See “— Our independent registered public accounting firm has advised us that it has identified a material weakness in our internal control over financial reporting relating to inadequate financial statement reparation and review procedures.”

As a result of such material weakness and our disclosure thereof, we face the potential for litigation by current or former shareholders based on their purported inability to accurately evaluate our financial performance from reviewing our audited financial statements, based on an alleged material statement or omission contained in our audited financial statements or based on other claims arising from our inadequate financial statement preparation and review procedures. As of the date of this prospectus, we have no knowledge of any such shareholder litigation. However, we can provide no assurance that such shareholder litigation will not arise in the future. Any such shareholder litigation, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition.

Our concentration of ownership could be disadvantageous to shareholders.

Alceco International S.A. (“Alceco”), as of the date of this prospectus, owned approximately 35.95 percent of our shares. Nexttobe AB (“Nexttobe”), as of as of the date of this prospectus, owned approximately 20.03 percent of our shares, and also holds a significant amount of our debt. Alceco and Nexttobe can thus, both before and after the offering, exercise significant influence over all matters requiring shareholder approval, and may be able to prevent a change in control or take other measures that may benefit Alceco or Nexttobe but could be disadvantageous to other shareholders. Moreover, the sale of a substantial number of our shares by Alceco and/or Nexttobe within a short period of time could cause our share price to decrease, make it more difficult for us to raise funds through future offerings of Ordinary Shares or acquire other businesses using Ordinary Shares as consideration. Additionally, Alceco and Nexttobe may have conflicting interests with us. See “— There are relationships among our directors and our largest shareholders that could pose a conflict of interest.”

18


 
 

TABLE OF CONTENTS

There are relationships among our directors and our largest shareholders that could pose a conflict of interest.

There are relationships among some of the members of our board of directors with each other and with our largest shareholders that could pose a conflict of interest. Two of our directors, our Executive Chairman Julian Aleksov and Bo Cederstrand are co-owners of Alceco, a holding company based in Luxembourg that conducts no business and exists only for financial management. Alceco owns 35,178,112 of the Ordinary Shares as of the date of this prospectus and is our largest shareholder. In addition to being partners in Alceco, Messrs. Aleksov and Cederstrand also have a familial relationship. Mr. Aleksov is the partner of Mr. Cederstrand’s daughter and the father of his two grandchildren. Alceco has also extended a credit facility of SEK 40 million to us, which as of the date of this prospectus has not been drawn upon.

Another director, Alexander Kotsinas, is a partner at Nexttobe, which owned 19,602,173 of our Ordinary Shares as of the date of this prospectus and is our second-largest shareholder. Nexttobe is also our largest creditor, from whom we have a loan of SEK 87 million.

These directors may have actual or apparent conflicts of interest with respect to matters involving or affecting us and Alceco and/or Nexttobe. Examples of possible conflicts include:

the board of directors could have to decide whether to use funds for operating expenses or the repayment of a loan to Nexttobe;
issues or disputes could arise under the commercial agreements that exist between us and Alceco and Nexttobe;
under the terms of Alceco’s loan agreements, one or more Alceco creditors could become shareholders and could exercise their voting rights in a manner that could conflict with your interests;
Nexttobe, a venture capital company, could own or come to own interests in companies that compete with us; and
given the close relationship between Messrs. Cederstrand and Aleksov, Mr. Cederstrand could be conflicted as to any board decision on the compensation and employment status of Mr. Aleksov.

See also “Related Party Transactions.”

Apart from the conflicts of interest policy contained in our Code of Ethics and Business Conduct, we and Alceco and Nexttobe have not established any formal procedures for us and Alceco and Nexttobe to resolve potential or actual conflicts of interest between us. There can be no assurance that any of the foregoing conflicts will be resolved in a manner that does not adversely affect our business, financial condition or results of operations.

U.S. investors may have difficulty enforcing civil liabilities against us, our directors or members of senior management and the experts named in this prospectus.

All of our directors and officers named in this prospectus are non-residents of the U.S., and all or a substantial portion of the assets of such persons are located outside the U.S. As a result, it may not be possible to serve process on such persons or our company in the U.S. or to enforce judgments obtained in U.S. courts against them or us based on civil liability provisions of the securities laws of the U.S. There is doubt as to whether Swedish courts would enforce certain civil liabilities under U.S. securities laws in original actions or judgments of U.S. courts based upon these civil liability provisions. In addition, awards of punitive damages in actions brought in the U.S. or elsewhere may be unenforceable in Sweden. An award for monetary damages under the U.S. securities laws would be considered punitive if it does not seek to compensate the claimant for loss or damage suffered and is intended to punish the defendant. The enforceability of any judgment in Sweden will depend on the particular facts of the case as well as the laws and treaties in effect at the time. The U.S. and Sweden do not currently have a treaty providing for recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters.

19


 
 

TABLE OF CONTENTS

We have incurred significant losses since our inception. We expect to incur losses over the next several years and may never achieve or maintain profitability.

Since our inception on April 15, 1988, we have incurred significant operating losses. We incurred net losses of SEK 117.50 million and SEK 105.11 million for the fiscal years ended April 30, 2015 and April 30, 2014, respectively. To date, we have financed our operations primarily through private placements of shares in our company and through one-time milestone payments from our commercial partners. We have devoted substantially all of our financial resources and efforts to research and development, including preclinical studies and clinical trials. We expect to continue to incur significant expenses and operating losses over the next few years. Our net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase substantially as we:

initiate and conduct a Phase II program for Paclical for the treatment of metastatic breast cancer;
conduct additional efficacy studies in dogs to collect all the necessary efficacy data for full FDA approval of Paccal Vet;
continue research and development for and commence pre-clinical and clinical trials of Docecal, Doxophos, Doxophos Vet and OAS-19;
seek to discover and develop additional product candidates;
seek regulatory approvals for any product candidates that successfully complete clinical trials;
ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any products that we choose not to license to a third party and for which we may obtain regulatory approval;
maintain, expand and protect our intellectual property portfolio;
hire additional clinical and scientific personnel; and
add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts.

To become and remain profitable, we must succeed in developing and eventually commercializing products that generate significant revenue. This will require us to be successful in a range of challenging activities, including completing preclinical testing and clinical trials of our product candidates, discovering additional product candidates, potentially entering into collaboration and license agreements, obtaining regulatory approval for product candidates and manufacturing, marketing and selling any products for which we may obtain regulatory approval. We are only in the preliminary stages of most of these activities. We may never succeed in these activities and, even if we do, may never achieve profitability.

Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. If we are required by the FDA or by other regulatory authorities outside of the U.S. to perform studies in addition to those currently expected, or if there are any delays in completing our clinical trials or the development of any of our product candidates, our expenses could increase.

Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our product offerings or even continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.

We may need substantial additional funding, which may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or our commercialization efforts.

Our operations have consumed substantial cash since inception. Excluding receipts from milestone fees, our cash flow used for operating activities for the fiscal years ended April 30, 2015 and April 30, 2014 was SEK 107.67 million and SEK 86.90 million, respectively, with development costs, which are capitalized, for

20


 
 

TABLE OF CONTENTS

those years totaling SEK 16.80 million and SEK 29.46 million, respectively. We expect our operating and management and administrative expenses and cash used for operations to continue to be significant and to increase substantially in connection with our planned research, development and continued product commercialization efforts and as we transition to a U.S. public company. We may need to raise additional capital following this offering to fund our operations and continue to conduct clinical trials to support potential regulatory approval of marketing applications. If we are unable to raise capital when needed or on attractive terms, we could be forced to:

delay, reduce or eliminate our research and development programs or any future commercialization efforts;
relinquish or license on unfavorable terms our rights to technologies, our product, or product candidates that we otherwise would seek to develop or commercialize ourselves;
seek collaborators for our product or one or more of our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available; or
cease operations altogether.

We believe that future capital requirements from cash flow from operations, including milestone and other payments from our partners and the net proceeds from this offering, will enable us to fund our operating expenses and capital expenditure requirements for at least the next twelve months. We have based this estimate on assumptions that may prove to be wrong, and we could use up our capital resources sooner than we currently expect. We do not expect our existing capital resources, including the net proceeds from this offering, to enable us to complete Phase III development of Paclical for the treatment of epithelial ovarian cancer, conduct Phase II development of Paclical for the treatment of metastatic breast cancer, conduct additional efficacy studies in dogs for full FDA approval of Paccal Vet or continue research and development for and commence clinical trials of Docecal, Doxophos Vet, Doxophos and OAS-19. Accordingly, we expect that we will need to raise substantial additional funds in the future. Our future capital requirements will depend on many factors, including:

the revenue, if any, related to commercial sales of our product and product candidates for which we receive marketing approval, including royalties and milestones received from Abbott Animal Health (the animal health division of Abbott Laboratories);
the Phase II clinical program for Paclical for the treatment metastatic breast cancer;
the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our other product candidates, including those of Docecal, Doxophos Vet, Doxophos and OAS-19;
our ability to enter into collaborative agreements for the development and commercialization of our product candidates;
the number and development requirements of other product candidates that we pursue;
the costs, timing and outcome of regulatory review of our product candidates or any future product candidates, both in the U.S. and outside the U.S.;
the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for our product or any of our product candidates for which we receive marketing approval;
any product liability or other lawsuits related to our products;
the expenses needed to attract and retain skilled personnel; and
the costs involved in preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims, both in the U.S. and outside the U.S.

Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the

21


 
 

TABLE OF CONTENTS

necessary data or results required to obtain regulatory approval and achieve product sales. In addition, our product and our product candidates, if approved, may not achieve commercial success. Our commercial revenue, if any, will be derived from sales of products that we do not expect to be commercially available for several months, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.

We do not currently intend to pay dividends on the Ordinary Shares or make any other distribution of earnings to holders of the Ordinary Shares.

Since our inception, we have not declared or paid any dividends on the Ordinary Shares. We intend to retain any earnings for use in our business and do not currently intend to pay dividends on the Ordinary Shares. The declaration and payment of any future dividends will be at the discretion of our board of directors and will depend upon our results of operations, cash requirements, financial condition, contractual restrictions, restrictions imposed by our indebtedness, any future debt agreements or applicable laws and other factors that our board of directors may deem relevant. This policy may have a material adverse effect on the value of your Ordinary Shares. See “Dividend Policy.”

The milestone payments we receive are not reliable sources of income and in some cases may be required to be returned at a later date.

Much of our income has consisted of, and may in the future take the form of, milestone payments, which are contractual one-time payments from our partners as we reach certain targets. There have been cases in which we have not reached the targets and there is no guarantee that we will be able to reach such targets in the future. We may also be required to repay already obtained milestone payments if the agreed upon schedules are not kept or if the required marketing approvals are not obtained. Further, milestone payments often occur irregularly over time, causing fluctuations in our sales and earnings. Milestone payments are not sustainable earnings and any dependence on milestone payments could have a material adverse effect on our business, results of operations and financial condition. See also “Business — Strategic Alliances and Collaborations.”

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

We commenced active operations in 1999, and our operations thus far have been limited to organizing and staffing our company, business planning, raising capital, identifying potential product candidates, undertaking preclinical studies and conducting clinical trials. To date we have had no commercial operations. All but three of our product candidates are still in preclinical development. We have not yet demonstrated our ability to successfully complete later stage clinical trials, obtain full regulatory approvals, manufacture a commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history.

In addition, as a business with a limited operating history, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. We will need to expand our capabilities to support commercial activities. We may not be successful in adding such capabilities.

We expect our financial condition and operating results to continue to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. Accordingly, you should not rely upon the results of any past annual or interim periods as indications of future operating performance.

Risks Related to Development and Regulatory Approval of Our Product and Product Candidates

There is a high rate of failure for drug candidates proceeding through clinical trials.

Generally, there is a high rate of failure for drug candidates proceeding through clinical trials. We may suffer significant setbacks in our clinical trials similar to the experience of a number of other companies in the

22


 
 

TABLE OF CONTENTS

pharmaceutical and biotechnology industries, even after receiving promising results in earlier trials. Further, even if we view the results of a clinical trial to be positive, the FDA or other regulatory authorities may disagree with our interpretation of the data. For instance, because a large percentage of subjects in our pivotal trials for Paccal Vet, Paclical and our other product candidates in cancer treatment, are being enrolled at sites outside the U.S. (25% of canine subjects and 100% of human patients), differences in efficacy results between U.S. and non-U.S. sites could cause the FDA to require additional trials. In the event that:

we obtain negative results from the Paccal Vet or Paclical Phase III trials,
we receive poor clinical results for our other product candidates,
the FDA places a clinical hold on our Phase III trials due to potential chemistry, manufacturing and controls issues or other hurdles, or
the FDA does not approve our New Animal Drug Application (“NADA”) for Paccal Vet or our New Drug Application (“NDA”) for Paclical or for our other product candidates,

then:

we may not be able to generate sufficient revenue or obtain financing to continue our operations,
our ability to execute our current business plan will be materially impaired,
our reputation in the industry and in the investment community would likely be significantly damaged, and
the price of the Ordinary Shares would likely decrease significantly.

Any of these results could materially and adversely affect our business, results of operations or financial condition.

Clinical trials for our product candidates are expensive, time consuming, uncertain and susceptible to change, delay or termination.

Clinical trials are expensive, time consuming and difficult to design and implement. The result of a clinical trial may be undesirable and can result in a clinical trial cancellation or the need for re-evaluation and supplementation. Even if the results of our clinical trials are favorable, the clinical trials for a number of our product candidates are expected to continue for several years and may even take significantly longer to complete. In addition, we, the FDA, an IRB, or other regulatory authorities, including in the U.S., EU and elsewhere, may suspend, delay or terminate our clinical trials at any time, for various reasons, including:

lack of effectiveness of any product candidate during clinical trials;
discovery of serious or unexpected toxicities or side effects experienced by trial participants or other safety issues;
slower than expected rates of subject recruitment and enrollment rates in clinical trials;
difficulty in retaining subjects who have initiated a clinical trial but may have withdrawn due to adverse side effects from the therapy, insufficient efficacy, fatigue with the clinical trial process or for any other reason;
delays or inability in manufacturing or obtaining sufficient quantities of materials for use in clinical trials due to manufacturing or regulatory constraints;
inadequacy of or changes in our manufacturing process or product formulation;
delays in obtaining regulatory authorization to commence a trial, including experiencing “clinical holds” or delays requiring suspension or termination of a trial by a regulatory agency, such as the FDA, before or after a trial is commenced;
changes in applicable regulatory policies and regulations;
delays or failure in reaching agreement on acceptable terms in clinical trial contracts or protocols with prospective clinical trial sites;

23


 
 

TABLE OF CONTENTS

delay or failure to supply product for use in clinical trials which conforms to regulatory specification;
unfavorable results from ongoing pre-clinical studies and clinical trials;
failure of our contract research organizations (“CROs”), or other third-party contractors to comply with all contractual requirements or to perform their services in a timely or acceptable manner;
failure by us, our employees, our CROs or their employees to comply with all applicable FDA or other regulatory requirements relating to the conduct of clinical trials;
scheduling conflicts with participating clinicians and clinical institutions;
failure to design appropriate clinical trial protocols; or
regulatory concerns with pharmaceutical products generally and the potential for abuse.

Any of the foregoing could have a material adverse effect on our business, results of operations and financial condition.

The regulatory approval process is uncertain, requires us to utilize significant resources, and may prevent us or our commercial partners from obtaining approvals for the commercialization of some or all of our drug candidates.

The research, testing, manufacturing, labeling, approval, sale, marketing and testing of our product and product candidates are subject to extensive regulation by regulatory authorities in the U.S. and Europe, and regulatory requirements applicable to our product and product candidates differ from country to country. Neither we nor any commercial partner is permitted to market any of our current or future product candidates in the U.S. until we receive approval from the FDA of an NADA for our animal health products or an NDA for our human health products. We received conditional approval for Paccal Vet from the FDA in February 2014, which will require additional follow-up efficacy studies for full approval, but have yet to receive any type of approval for any of our other current product candidates. Obtaining approval of either an NADA or an NDA can be an uncertain process that requires us to utilize significant resources. Furthermore, regulatory authorities possess broad discretion regarding processing time and usually request additional information and raise questions which have to be answered. There is considerable uncertainty regarding the times at which products may be approved. In addition, failure to comply with FDA and other applicable U.S. and foreign regulatory requirements may subject us to administrative or judicially imposed sanctions, including: warning letters, civil and criminal penalties, injunctions, withdrawal of approved products from the market, product seizure or detention, product recalls, total or partial suspension of production, and refusal to approve pending applications or supplements to approved applications.

The process required by the FDA and most foreign regulatory authorities before human health care pharmaceuticals may be marketed generally involves nonclinical laboratory and animal tests; submission of an Investigational New Drug (“IND”) application, which must become effective before clinical trials may begin; adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use or uses; pre-approval inspection of manufacturing facilities and clinical trial sites; and FDA approval of an NDA, which must occur before a drug can be marketed or sold.

In order to gain approval to market a pet therapeutic for a particular species of pet, we must provide the FDA and foreign regulatory authorities with data from animal safety and effectiveness studies that adequately demonstrate the safety and efficacy of that product in the target animal for the intended indication applied for in the NADA or other regulatory filing. Conditional approval is available under the FDA Minor Use and Minor Species (“MUMS”) designation, which gives the sponsor the right to promote a product before all of the efficacy data necessary for full approval are available. If approved, this provides the sponsor with seven years of market exclusivity. Even for conditional approval, the development of animal health products is a lengthy, expensive and uncertain process, and delay or failure can occur at any stage of any of our development efforts. Success in prior target animal studies or even in the treatment of human beings with a product candidate does not ensure that our studies will be successful and the results of development efforts by other parties may not be indicative of the results of our studies and other development efforts.

24


 
 

TABLE OF CONTENTS

Regulatory approval of a NADA or an NDA, or any supplements of either, is not guaranteed, and the approval process requires us to utilize significant resources, could take several years, and is subject to the substantial discretion of the FDA. Despite the time and expense exerted, failure can occur at any stage, and we could encounter problems that cause us to abandon or have to repeat or perform additional studies. If our product or any of our current or future product candidates fails to demonstrate safety and efficacy in our studies, or for any other reason does not gain regulatory approval, our business and results of operations will be materially and adversely harmed.

In addition, separate regulatory approvals are required in order to market any product in many jurisdictions, including the U.S., the European Economic Area, which consists of the 28 Member States of the European Union plus Norway, Iceland and Liechtenstein, and many others. Approval procedures vary among countries and can involve additional studies and testing, and the time required to obtain approval may differ from that required to obtain FDA approval. Studies conducted in one country may not be accepted by regulatory authorities in other countries. Approval by the FDA does not ensure approval by regulatory authorities in other countries, and approval by one or more foreign regulatory authorities does not ensure approval by regulatory authorities in other foreign countries or by the FDA. However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval. We may be unable to file for regulatory approvals or to do so on a timely basis and, even if we are able to, we may not receive necessary approvals to commercialize our products in any market. Any of these results could have a material adverse effect on our business, results of operations and financial condition.

Even if we receive regulatory approval for any of our current or future product candidates, we will be subject to ongoing FDA and other regulatory body obligations and continued regulatory review, which may result in significant additional expense. Additionally, our product and any product candidates, if approved, will be subject to labeling and manufacturing requirements and could be subject to other restrictions. Failure to comply with these regulatory requirements or the occurrence of unanticipated problems with our products could result in significant penalties.

Any regulatory approvals that we or any of our collaborators receive for any of our current or future product candidates may be subject to conditions of approval or limitations on the approved indicated uses for which the product may be marketed, or may contain requirements for potentially costly surveillance to monitor the safety and efficacy of the product candidate. In addition, our product and any of our current or future product candidates, if approved by the FDA or other regulatory bodies, will be subject to extensive and ongoing regulatory requirements regarding the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping. These requirements will include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP, Good Laboratory Practice and Good Clinical Practice for any studies that we conduct post-approval. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls;
fines, warning letters or holds on target studies;
refusal by the FDA or other applicable regulatory body to approve pending applications or supplements to approved applications filed by us or our strategic collaborators, or suspension or revocation of product license approvals;
product seizure or detention, or refusal to permit the import or export of products; and
injunctions or the imposition of civil or criminal penalties

The policies of the FDA and other regulatory bodies may change, and additional government regulations may be promulgated that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the U.S. or elsewhere. If we are slow or unable to adapt to changes in

25


 
 

TABLE OF CONTENTS

existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would materially and adversely affect our business, results of operations and financial condition.

Our product and any of our current or future product candidates, if approved, may cause or contribute to adverse medical events that we are required to report to the FDA and regulatory authorities in other countries and, if we fail to do so, we could be subject to sanctions that would materially harm our business.

If we are successful in commercializing our product and any of our current or future product candidates, regulations of the FDA and of the regulatory authorities in other countries require that we report certain information about adverse medical events if those products may have caused or contributed to those adverse events. The timing of our obligation to report would be triggered by the date we become aware of the adverse event as well as the nature of the event. We may fail to report adverse events we become aware of within the prescribed timeframe. We may also fail to appreciate that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of our products. If we fail to comply with our reporting obligations, the FDA and regulatory authorities in other countries could take action including criminal prosecution, the imposition of civil monetary penalties, seizure of our products, or delay in approval or clearance of future products, which could have a material adverse effect on our business, results of operations and financial condition.

Legislative or regulatory reforms with respect to human or animal health products may make it more difficult and costly for us to obtain regulatory clearance or approval of any of our current or future product candidates and to produce, market, and distribute our products after clearance or approval is obtained.

From time to time, legislation is drafted and introduced in the U.S. Congress and lawmaking bodies in other countries that could significantly change the statutory provisions governing the testing, regulatory clearance or approval, manufacture, and marketing of regulated products. In addition, FDA regulations and guidance are often revised or reinterpreted by the FDA in ways that may significantly affect our business and our products. Similar changes in laws or regulations can occur in other countries. Any new regulations or revisions or reinterpretations of existing regulations in the U.S. or in other countries may impose additional costs or lengthen review times of our product and any of our current or future product candidates. We cannot determine what effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted or adopted may have on our business in the future. Such changes could, among other things, require:

requests for additional endpoints or studies;
changes to manufacturing methods;
recall, replacement, or discontinuance of certain products; and
additional record keeping.

Each of these would likely entail substantial time and cost and could have a material adverse effect on our financial results. In addition, delays in receipt of or failure to receive regulatory clearances or approvals for any future products could materially and adversely affect our business, results of operations and financial condition.

Our ability to market our product and product candidates in the U.S., if approved, will be limited to use for the treatment of the indications for which they are approved, and if we want to expand the indications for which we may market our product and product candidates, we will need to obtain additional FDA approvals, which may not be granted.

We plan to seek full FDA approval in the U.S. for Paccal Vet for mammary carcinoma and squamous-cell carcinoma in dogs, Paclical for ovarian cancer in humans, Docecal for breast cancer in humans, Doxophos Vet for lymphoma in dogs, Doxophos for breast cancer in humans, and OAS-19 for various cancers in humans. If our product candidates are approved, the FDA will restrict our ability to market or advertise them for the

26


 
 

TABLE OF CONTENTS

treatment of indications other than the indications for which they are approved, which could limit their use. If we decide to attempt to develop, promote and commercialize new treatment indications and protocols for our product and product candidates in the future, we could not predict when, or if, we would ever receive the approvals required to do so. We would be required to conduct additional studies to support such applications for additional use, which would consume additional resources and may produce results that do not result in FDA approvals. If we do not obtain additional FDA approvals, our ability to expand our business in the U.S. would be adversely affected, which could materially and adversely affect our business, results of operations and financial condition.

The anticipated development of a REMS for Paclical and our other human health product candidates could cause delays in the approval process and would add additional layers of regulatory requirements that could impact our ability to commercialize our human health product candidates in the U.S. and reduce their market potential.

As a condition of approval of an NDA, the FDA may require a REMS to ensure that the benefits of the drug outweigh the potential risks. REMS elements can include medication guides, communication plans for health care professionals, and elements to assure safe use (“ETASU”). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient registries. Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy. We may be required to adopt a REMS for Paclical and our other human health product candidates to ensure that the benefits outweigh the risks of abuse, misuse, diversion and other potential safety concerns. Even if the risk of abuse, misuse or diversion are not as high as for some other products, there can be no assurance that the FDA will approve a manageable REMS for Paclical and our other human health product candidates, which could create material and significant limits on our ability to successfully commercialize our human health product candidates in the U.S. Delays in the REMS approval process could result in delays in the NDA approval process. In addition, as part of the REMS, the FDA could require significant restrictions, such as restrictions on the prescription, distribution and patient use of the product, which could significantly impact our ability to effectively commercialize Paclical and our other human health candidates, and dramatically reduce their market potential thereby adversely impacting our business, financial condition and results of operations. Even if initial REMS are not highly restrictive, if, after launch, Paclical or our other human health product candidates were to be subject to significant abuse/non-medical use or diversion from licit channels, this could lead to negative regulatory consequences, including a more restrictive REMS, which could materially and adversely affect our business, results of operations and financial condition.

If we are found in violation of “fraud and abuse” laws, we may be required to pay a penalty and/or be suspended from participation in government-run health care programs, which may adversely affect our business, financial condition and results of operations.

If we are successful in obtaining marketing approval for our products in the U.S. and elsewhere, we will be subject to various health care “fraud and abuse” laws, including anti-kickback laws, false claims laws and other laws intended to reduce fraud and abuse in government-run health care programs, which could affect us, particularly upon successful commercialization of our products in the U.S. For example, the Medicare and Medicaid Patient Protection Act of 1987 (otherwise known as the federal “Anti-Kickback Statute”) makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration that is intended to induce the referral of business, including the purchase, order or prescription of a particular drug for which payment may be made under a U.S. health care program such as Medicare or Medicaid. Under U.S. federal government regulations, some arrangements, known as safe harbors, are deemed not to violate the Anti-Kickback Statute. Although we seek to structure our business arrangements in compliance with all applicable requirements, these laws are broadly written, and it is often difficult to determine precisely how the law will be applied in specific circumstances. Accordingly, it is possible that our practices may be challenged under the Anti-Kickback Statute and similar laws in other jurisdictions. False claims laws prohibit anyone from knowingly and willfully presenting or causing to be presented for payment to third-party payers, including government payers, reimbursement claims for drugs or services that are false or fraudulent, claims for items or services that were not provided as claimed, or claims for medically unnecessary items or services. Cases have been brought

27


 
 

TABLE OF CONTENTS

under false claims laws alleging that off-label promotion of pharmaceutical products or the payment of kickbacks to pharmaceutical providers has resulted in the submission of false claims to governmental health care programs. Under laws such as the Health Insurance Portability and Accountability Act of 1996 in the U.S., we are prohibited from knowingly and willfully executing a scheme to defraud any health care benefit program, including private payers, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services. Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including fines and/or exclusion or suspension from government-run health care programs such as Medicare and Medicaid and debarment from contracting with the U.S. and other governments. In addition, in the U.S. individuals have the ability to bring actions on behalf of the government under the federal False Claims Act as well as under state false claims laws.

Many states in the U.S. have adopted laws similar to the Anti-Kickback Statute, some of which apply to the referral of patients for health care services reimbursed by any source, not just governmental payers. In addition, California and a few other states in the U.S. have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of America Code on Interactions with Health Care Professionals. In addition, several states impose other marketing restrictions or require pharmaceutical companies to make marketing or price disclosures to the state. There are ambiguities as to what is required to comply with these state requirements and if we fail to comply with an applicable state law requirement we could be subject to penalties.

We have yet to receive definitive guidance on the application of fraud and abuse laws to our business. Law enforcement authorities are increasingly focused on enforcing these laws, and it is possible that some of our practices may be challenged under these laws. While we believe we have structured our business arrangements to comply with these laws, it is possible that the government could allege violations of, or convict us of violating, these laws. If we are found in violation of one of these laws, we could be required to pay a penalty and could be suspended or excluded from participation in certain government-run health care programs, and our business, results of operations and financial condition may be materially and adversely affected.

Risks Related to Our Business and Industry

If we fail to attract and keep senior management and key scientific personnel, we may be unable to successfully develop our product or our current or future product candidates, conduct our in-licensing and development efforts or commercialize our product or any of our current or future product candidates.

Our future growth and success depends in part on our continued ability to attract, retain and motivate highly qualified management and scientific personnel. We are highly dependent upon our senior management, particularly Julian Aleksov, our Executive Chairman, as well as our senior scientists and other members of our senior management team. The loss of services of any of these individuals could delay or prevent the successful development of our current or future product pipeline, completion of our planned development efforts or the commercialization of our product and product candidates. Although we have entered into an employment agreement with Julian Aleksov, the agreement does not provide for a fixed term of service, and does not contain any competition or non-solicitation clauses after the termination of employment. It is possible that current or former employees of Oasmia could put forward claims for an alleged right to our patents and demand compensation therefor. However, all our employees have signed an agreement where they assign all their inventions and intellectual property rights generated by them in their work to us. In addition, there is a law in Sweden that regulates the right to patentable inventions made by employees which gives the employer the rights to the inventions if they are invented in the course of the employees work. If one or more of the key personnel were to leave us and engage in competing operations, our business, results of operations and financial condition could be materially and adversely affected. To date, none of our key personnel has left us or, to our knowledge, engaged in competing operations, nor has any departure of key personnel had any material effect on Oasmia.

28


 
 

TABLE OF CONTENTS

We may have trouble hiring additional qualified personnel.

As we expand our development and commercial activities, we will need to hire additional personnel and could experience difficulties attracting and retaining qualified employees. Competition for qualified personnel in the biopharmaceutical field is intense due to the limited number of individuals who possess the skills and experience required by that industry. We may not be able to attract and retain quality personnel on favorable terms, or at all. In addition, to the extent we hire personnel from competitors, we may be subject to allegations that such personnel have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former employers own their research output. Any of these difficulties could have a material adverse effect on our business, results of operations and financial condition.

We are subject to risks relating to legal proceedings.

We are subject to various claims and legal actions arising in the ordinary course of its business. Any such litigation could be very costly and could distract our management from focusing on operating our business. The existence of any such litigation could harm our business, results of operations and financial condition. Results of actual and potential litigation are inherently uncertain. Additionally, in the past we have been subject to fines by a foreign exchange relating to our disclosures. See “Business — Foreign Exchanges.” An unfavorable result in a legal proceeding could adversely affect our reputation, financial condition and operating results.

If product liability lawsuits are successfully brought against us, we will incur substantial liabilities and may be required to limit the commercialization of Paccal Vet, Paclical and our other product candidates.

We and our partners face potential product liability exposure related to the testing of our product and product candidates in human and animal clinical trials. We will face exposure to claims by an even greater number of persons if we begin to market and distribute our products commercially in the U.S. and elsewhere, including those relating to misuse of Paccal Vet, Paclical and our other product candidates. Now, and in the future, an individual may bring a liability claim against us alleging that our product or one of our product candidates caused an injury. While we continue to take, what we believe to be appropriate precautions (including SEK 20 million, approximately $3 million, in product liability insurance coverage as of the date of this prospectus), we may be unable to avoid significant liability if any product liability lawsuit is brought against us. It should be noted that the amount of the product liability insurance is revised continuously of the insurance broker. If we cannot successfully defend ourselves against product liability claims, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

decreased demand for Paccal Vet, Paclical and our other product candidates, if such product candidates are approved;
injury to our reputation;
withdrawal of clinical trial participants;
costs of related litigation;
substantial monetary awards to patients, pet owners and others;
increased cost of liability insurance;
loss of revenue; and
our inability to successfully commercialize our products.

Furthermore, in the future there may be a need to expand the scope of our insurance coverage, which could result in significantly increased costs or the inability to obtain sufficient insurance coverage. Any of these occurrences could have a material adverse effect on our business, results of operations and financial condition.

Failure of our information technology systems could significantly disrupt the operation of our business.

Our ability to execute our business plan and to comply with regulatory requirements with respect to data control and data integrity depends, in part, on the continued and uninterrupted performance of our information

29


 
 

TABLE OF CONTENTS

technology systems (“IT systems”). These systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious human acts and natural disasters. Moreover, despite network security and back-up measures, some of our servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems. Despite the precautionary measures we have taken to prevent unanticipated problems that could affect our IT systems, there are no assurances that electronic break-ins, computer viruses and similar disruptive problems, and/or sustained or repeated system failures or problems arising during the upgrade of any of our IT systems that interrupt our ability to generate and maintain data will not occur. The occurrence of any of the foregoing with respect to our IT systems could have a material adverse effect on our business, results of operations or financial condition.

We are subject to the U.S. Foreign Corrupt Practices Act and other anti-corruption laws, as well as export control laws, customs laws, sanctions laws and other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures, and legal expenses, which could adversely affect our business, results of operations and financial condition.

Our operations are subject to certain anti-corruption laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”), and other anti-corruption laws that apply in countries where we do business. The FCPA and other anti-corruption laws generally prohibit us and our employees and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage. We and our commercial partners operate in a number of jurisdictions that pose a high risk of potential FCPA violations and we participate in collaborations and relationships with third parties whose actions could potentially subject us to liability under the FCPA or local anti-corruption laws. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted.

We are also subject to other laws and regulations governing our international operations, including regulations administered in the U.S. and in the EU, including applicable export control regulations, economic sanctions on countries and persons, customs requirements and currency exchange regulations (collectively, “Trade Control Laws”).

There can be no assurance that we will be completely effective in ensuring our compliance with all applicable anticorruption laws, including the FCPA or other legal requirements, such as Trade Control Laws. Any investigation of potential violations of the FCPA, other anti-corruption laws or Trade Control Laws by U.S., EU or other authorities could have an adverse impact on our reputation, our business, results of operations and financial condition. Furthermore, should we be found not to be in compliance with the FCPA, other anti-corruption laws or Trade Control Laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, as well as the accompanying legal expenses, any of which could have a material adverse effect on our reputation and liquidity, as well as on our business, results of operations and financial condition.

We are exposed to risks related to currency exchange rates.

Currency risks arise when future commercial transactions or reported assets or liabilities are denominated in a currency other than our functional currency, the Swedish krona. Our primary contract manufacturer and all of our clinical trials are located outside of Sweden. Because our financial statements are presented in kronor, changes in currency exchange rates have had and could continue to have a significant effect on our operating results. Exchange rate fluctuations between local currencies and the krona create risk in several ways, including the following:

weakening of the krona may increase the krona cost of overseas research and development expenses and the cost of sourced product components outside Sweden;
strengthening of the krona may decrease the value of our revenues denominated in other currencies;
the exchange rates on non-kronor transactions and cash deposits can distort our financial results; and
the pricing and profit margins of Paccal Vet, Paclical and our other product candidates may be affected by currency fluctuations.

30


 
 

TABLE OF CONTENTS

In addition, to the extent our need for contract manufacturing increases once our products reach the commercial market, our exposure to currency risks will increase proportionally. We do not engage in regular hedging transactions, since to date our currency exposure has been mostly related to purchased services for product development, which has been irregular and difficult to anticipate. It is possible that fluctuations in currency exchange rates could have a material adverse effect on our business, results of operations and financial condition.

If we are unable to use our net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments or benefit from favorable tax legislation, our business, results of operations and financial condition may be adversely affected.

As a Swedish resident trading entity, we are subject to Swedish corporate taxation. As of April 30, 2015, we had cumulative carry forward tax losses of SEK 521.39 million, and as of April 30, 2014, we had cumulative carry forward tax losses of SEK 404.26 million. These losses are available to carry forward and offset against future operating profits, unlimited in time. If, however, there are unexpected adverse changes to the Swedish tax law, our business, results of operations and financial condition may be adversely affected.

Risks Related to Our Reliance upon Third Parties

We depend substantially on the commercial expertise of our commercial partners.

We do not have a sales and marketing operation and expect to rely, in certain geographical areas such as Japan and the CIS, on the expertise and commercial skills of our commercial partners to sell Paccal Vet, Paclical, Doxophos Vet, and our other product candidates in selected territories. We have entered into agreements for the commercialization of Paccal Vet in Japan, where Paccal Vet is licensed to Nippon Zenyaku Kogyo, and Russia and the CIS, where we retain commercialization rights. We have entered into agreements for the commercialization of Paclical with Medison Pharma in Israel and Turkey and with Pharmasyntez in Russia and the CIS, as well as Ukraine, Georgia and Turkmenistan. The commercial success of Paclical and many of our other product candidates in each of these markets will depend entirely on the expertise and commercial skills of our commercial partners, whereas we will be responsible for the distribution and sales of Paccal Vet and Doxophos Vet. In addition, it is customary that in these types of commercial agreements our partners are entitled to price our products, which means that much of our financial performance will be dependent on our partners. Our partners also have the right, under certain circumstances, to terminate their agreements with us. See “Business — Strategic Alliances and Collaborations” for descriptions of the agreements with our commercial partners. A failure by our partners to successfully market Paccal Vet, Paclical, Doxophos Vet and our other product candidates, or the termination of agreements with our partners, would have a material adverse effect on our business, results of operations and financial condition.

As referred to elsewhere herein, we have entered into various licensing and distribution agreements with established pharmaceutical companies to sell Paccal Vet. Specifically, we had entered into an agreement for the global commercialization of Paccal Vet with Abbott Animal Health, the assets of which were acquired by Zoetis on February 10, 2015. In connection with Zoetis’ purchase of Abbott Animal Health, Zoetis provided the Company with notice that Zoetis will terminate the distribution arrangement effective September 30, 2015.

We currently have no sales and marketing organization for the distribution of Paccal Vet or Doxophos Vet as a result of the pending termination of the Distribution Agreement with Zoetis. If we are unable to establish a direct sales force in the U.S. to promote our products, the commercial opportunity for our products may be diminished.

We currently have no sales and marketing organization for the distribution of Paccal Vet or Doxophos Vet as a result of the pending termination of the Distribution Agreement with Zoetis, which covered the entire world except for Japan and the CIS. While we have established an entity through which Oasmia intends to distribute these products in the United States, the Company currently has no sales and marketing organization for these products. The Company will incur significant additional expenses and commit significant additional management resources to establish our sales force. The Company may not be able to establish these capabilities despite these additional expenditures. The Company will also have to compete with other pharmaceutical and biotechnology companies to recruit, hire and train sales and marketing personnel. While

31


 
 

TABLE OF CONTENTS

the Company has no present intention of doing so, if the Company elects to rely on third parties to sell these products in the U.S., it may receive less revenue than the Company we sold our products directly. In addition, while the Company anticipates using due diligence in monitoring their activities, it may have little or no control over the sales efforts of those third parties. In the event the Company is unable to develop its own sales force or collaborate with a third party to sell these products, the Company may not be able to commercialize these products which would negatively impact its ability to generate revenue.

We rely on contract manufacturers for the production of our products, which can create production uncertainties.

Our own production facility has the technical capacity for production of our finished products up to a limited commercial scale. We produced the launch supply of Paccal Vet, but we do not have adequate capacity to supply the product in the long term. As such, full-scale production of our products for commercial use will be carried out by contract manufacturers. Production at our primary contract manufacturer is expected to commence shortly. If it proves difficult for contract manufacturers to scale-up production, full-scale production may be delayed, which could then delay the product launch schedule.

We will also be required to validate full-scale production and submit documentation to the relevant health authorities in connection with the scaling-up of the production to full-scale production. These agencies must approve the production at the manufacturers we select. We will be relying upon the contract manufacturers to provide us with the appropriate information for the regulators, and if the documentation is incomplete or incorrect there is a risk that the product launch will be delayed, which may have a material adverse effect on our financial position and performance.

We depend on a limited number of suppliers for materials and components required to manufacture Paccal Vet, Paclical and our other product candidates. The loss of these suppliers, or their failure to supply us on a timely basis, could cause delays in our current and future capacity and adversely affect our business.

The majority of the raw materials used in the production of our pharmaceuticals are purchased from a limited number of suppliers. As a result, we may not be able to obtain sufficient quantities of critical materials and components in the future. A delay or interruption by our suppliers may harm our business, results of operations and financial condition. In addition, the lead time needed to establish a relationship with a new supplier can be lengthy, and we may experience delays in meeting demand in the event we must switch to a new supplier. The time and effort to qualify for and, in some cases, obtain regulatory approval for a new supplier could result in additional costs, diversion of resources or reduced manufacturing yields, any of which would negatively impact our operating results. Our dependence on a limited number of suppliers exposes us to numerous risks, including:

our suppliers could cease or reduce production or deliveries, raise prices or renegotiate terms;
we may be unable to locate a suitable replacement suppliers on acceptable terms or on a timely basis, or at all; and
delays caused by supply issues may harm our reputation, frustrate our customers and cause them to turn to our competitors for future needs.

Any one of these occurrences could have a material adverse effect on our business, results of operations and financial condition.

Risks Related to Our Intellectual Property

We may be forced to litigate to enforce or defend our intellectual property rights, or the intellectual property rights of our licensors.

We may be forced to litigate to enforce or defend our intellectual property rights against infringement and unauthorized use by competitors. In so doing, we may place our intellectual property at risk of being invalidated, held unenforceable, or narrowed in scope. Further, an adverse result in any litigation or defense proceedings may place pending applications at risk of non-issuance. In addition, if any licensor fails to enforce or defend its intellectual property rights, this may adversely affect our ability to develop and

32


 
 

TABLE OF CONTENTS

commercialize our product and product candidates as well as our ability to prevent competitors from making, using, and selling competing products. Any such litigation could be very costly and could distract our management from focusing on operating our business. The existence or outcome of any such litigation could harm our business, results of operations and financial condition.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential and proprietary information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of the Ordinary Shares.

We may be unable to adequately prevent disclosure of trade secrets and other proprietary information.

We rely on trade secrets to protect our proprietary know-how and technological advances, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to protect our trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets and proprietary information. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights. Failure to obtain or maintain trade secret protection or failure to adequately protect our intellectual property could enable competitors to develop generic products or use our proprietary information to develop other products that compete with our products or cause additional, material adverse effects upon our business, results of operations and financial condition.

The transfer of technology and knowledge to contract manufacturers pursuant to the production of our products also creates a risk of uncontrolled distribution and copying of concepts, methods and processes relating to our products. Such uncontrolled distribution and copying could have a material adverse effect on the value of our products if used for the production of competing drugs or otherwise used commercially without our obtaining financial compensation.

We may become subject to third parties’ claims alleging infringement of patents and proprietary rights or seeking to invalidate our patents or proprietary rights, which would be costly, time-consuming and, if successfully asserted against us, delay or prevent the development and commercialization of our product and our current or future product candidates.

There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical industry, as well as patent challenge proceedings, including interference and administrative law proceedings before the U.S. Patent and Trademark Office (“U.S. PTO”) and the European Patent Office (“EPO”), and oppositions and other comparable proceedings in other jurisdictions. Recently, under U.S. patent reform laws, new procedures including inter partes review and post grant review have been implemented. As stated below, the novel implementation of such reform laws presents uncertainty regarding the outcome of challenges to our patents in the future.

We cannot assure you that our product or any of our current or future product candidates will not infringe existing or future patents. We may be unaware of patents that have already issued that a third party might assert are infringed by our product or one of our current or future product candidates. Because patent applications can take many years to issue and may be confidential for eighteen months or more after filing, there may be applications now pending of which we are unaware and which may later result in issued patents that we may infringe by commercializing our product or any of our current or future product candidates. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. Moreover, we may face claims from non-practicing entities (commonly referred to as “patent trolls”), which have no relevant product revenue and against whom our own patent portfolio may thus have no deterrent effect.

33


 
 

TABLE OF CONTENTS

We may be subject to third-party claims in the future against us or our collaborators that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages, including treble damages and attorney’s fees if we are found to be willfully infringing a third party’s patents. If a patent infringement suit were brought against us or our collaborators, we or our collaborators could be forced to stop or delay research, development, manufacturing or sales of the product candidate that is the subject of the suit. As a result of patent infringement claims, or in order to avoid potential claims, we or our collaborators may choose to seek, or be required to seek, a license from the third party and would most likely be required to pay license fees or royalties or both. These licenses may not be available on acceptable terms, or at all. Even if we or our collaborators were able to obtain a license, the rights may be nonexclusive, which would give our competitors access to the same intellectual property. Ultimately, we could be prevented from commercializing a product, or forced to redesign it, or to cease some aspect of our business operations if, as a result of actual or threatened patent infringement claims, we or our collaborators are unable to enter into licenses on acceptable terms. Even if we are successful in defending such claims, infringement and other intellectual property litigation can be expensive and time-consuming to litigate and divert management’s attention from our core business. Any of these events could harm our business significantly.

In addition to infringement claims against us, if third parties have prepared and filed patent applications in the U.S. that also claim technology to which we have rights, we may have to participate in interference proceedings in the U.S. PTO to determine the priority of invention. Third parties may also attempt to initiate reexamination, post grant review or inter partes review of our patents in the U.S. PTO. We may also become involved in similar opposition proceedings in the EPO or comparable offices in other jurisdictions regarding our intellectual property rights with respect to our products and technology. Any of these claims could have a material adverse effect on our business, results of operations and financial condition.

If our efforts to protect the proprietary nature of the intellectual property related to our product or any of our current or future product candidates are not adequate, we may not be able to compete effectively in our market.

We rely upon a combination of patents, trade secret protection as well as confidentiality and license agreements to protect the intellectual property related to our product and our current product candidates and our development programs.

Composition-of-matter patents on an active pharmaceutical ingredient are generally considered to be the strongest form of intellectual property protection for pharmaceutical products, as such patents provide protection without regard to any particular method of use or manufacture. We cannot be certain that the claims in our patent application covering composition-of-matter of our product and our product candidates will be considered patentable by the U.S. PTO and courts in the U.S., or by the patent offices and courts in foreign countries. Method-of-use patents protect the use of a product for the specified method. This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method. Moreover, for our animal health products particularly, even if competitors do not actively promote their products for our targeted indications, veterinarians may recommend that pet owners use these products off label, or pet owners may do so themselves. Although off-label use may infringe or contribute to the infringement of method-of-use patents, we believe the practice is common and such infringement is difficult to prevent or prosecute.

The strength of patents in the field of human and animal health products involves complex legal and scientific questions and can be uncertain. The patent applications that we own or license may fail to result in issued patents in the U.S. or in other foreign countries. Even if the patents do successfully issue, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property or prevent others from designing around our claims. If the breadth or strength of protection provided by the patent applications we own, in-license or pursue with respect to our product or any of our current or future product candidates is threatened, it could threaten our ability to commercialize our product or any of our current or future product candidates. Further, if we encounter delays in our development efforts, the period of time during which we could market our product or any of our current or future product candidates under patent protection would be reduced. Since patent applications in the U.S. and most other countries are confidential for a period of time after filing, we

34


 
 

TABLE OF CONTENTS

cannot be certain that we were the first to file any patent application related to our product and product candidates. Furthermore, for patent applications in which claims are entitled to a priority date before March 16, 2013, an interference proceeding can be initiated by a third party or instituted by the U.S. PTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications. For patent applications containing a claim not entitled to a priority date before March 16, 2013, there is a greater level of uncertainty in the patent law with the passage of the America Invents Act, some provisions of which went into effect on that date whereas the America Invents Act itself first went into effect on September 16, 2011 and brought about significant changes to the U.S. patent laws that have yet to be well defined, and which introduces new procedures for challenging pending patent applications and issued patents. A primary change under this reform is creating a “first to file” system in the U.S., which requires us to minimize the time from invention to filing of a patent application.

Even where laws provide protection, costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and the outcome of such litigation would be uncertain. Moreover, any actions we may bring to enforce our intellectual property against our competitors could provoke them to bring counterclaims against us, and some of our competitors have substantially greater intellectual property portfolios than we have.

We also rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements of our product development processes that involve proprietary know-how, information or technology that is not covered by patents. Although we endeavor to execute confidentiality agreements with all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology, we cannot be certain that we have executed such agreements with all parties who may have helped to develop our intellectual property or had access to our proprietary information, nor that our agreements will not be breached. We cannot guarantee that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Further, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the EU or the U.S. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the U.S. and elsewhere. If we are unable to prevent material disclosure of the intellectual property related to our technologies to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially and adversely affect our business, results of operations and financial condition.

Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market.

Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity. Therefore, obtaining and enforcing biopharmaceutical patents is costly, time-consuming and inherently uncertain. In addition, the U.S. has recently enacted and is currently implementing wide-ranging patent reform legislation. The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in other situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the U.S. PTO, the laws and regulations governing patents could change in ways that would weaken our ability to obtain new patents or to enforce our existing licensed patents and patents that we might obtain in the future. Similarly, changes in EU patent law and elsewhere could negatively affect the value of our patents registered outside of the U.S.

35


 
 

TABLE OF CONTENTS

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with any of these requirements.

The U.S. PTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case, which could have a material adverse effect on our business, results of operations and financial condition.

We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting and defending patents on product and product candidates throughout the world is prohibitively expensive. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but where enforcement is not as strong as that in the U.S. These products may compete with our products in jurisdictions where we do not have any issued or licensed patents and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.

Risks related to the ADSs and this offering

As a new investor, you will experience substantial dilution as a result of this offering.

The public offering price per ADS will be substantially higher than the net tangible book value per ADS prior to the offering. Consequently, if you purchase ADSs in this offering at a public offering price of $     per ADS, you will incur immediate dilution of $     per ADS. See “Dilution” for further information regarding the dilution resulting from this offering. In addition, you may experience further dilution to the extent that additional ADSs or Ordinary Shares are issued upon exercise of outstanding options and warrants. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their Ordinary Shares. In addition, if the underwriters exercise their overallotment option, you will experience additional dilution.

There is no established trading market for the ADSs.

This offering constitutes our initial public offering of ADSs, and no public market for the ADSs currently exists. We have applied to list the ADSs on the NASDAQ Capital Market (“Nasdaq”), and if approved we expect the ADSs to be quoted on Nasdaq, subject to completion of customary procedures in the U.S. Any delay in the commencement of trading of the ADSs on Nasdaq would impair the liquidity of the market for the ADSs and make it more difficult for holders to sell the ADSs.

Even if the ADSs are listed on Nasdaq, there can be no assurance that an active trading market for the ADSs will develop or be sustained after this offering is completed. The initial offering price has been determined by negotiations among the lead underwriters and us. Among the factors considered in determining the initial offering price were our future prospects and the prospects of our industry in general, our revenue, net income and certain other financial and operating information in recent periods, and the financial ratios, market prices of securities and certain financial and operating information of companies engaged in activities similar to ours. However, there can be no assurance that following this offering the ADSs will trade at a price equal to or greater than the offering price.

36


 
 

TABLE OF CONTENTS

In addition, the market price of the ADSs may be volatile. Many factors may have a material adverse effect on the market price of the ADSs, including, but not limited to:

announcements of the failure to obtain regulatory approvals or receipt of a “complete response letter” from the FDA;
announcements of restricted label indications or patient populations, or changes or delays in regulatory review processes;
announcements of therapeutic innovations or new products by us or our competitors;
adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities;
changes or developments in laws or regulations applicable to Paccal Vet, Paclical, or our other product candidates;
the failure of our testing and clinical trials;
product liability claims, other litigation or public concern about the safety of our product, product candidates or future products;
any adverse changes to our relationship with licensors, manufacturers or suppliers;
the loss of any of our key scientific or management personnel;
any major changes in our board of directors or management;
the failure to retain our existing, or obtain new, commercial partners;
announcements concerning our competitors or the pharmaceutical industry in general;
the achievement of expected product sales and profitability;
the failure to obtain reimbursements for our products or price reductions;
manufacture, supply or distribution shortages;
actual or anticipated fluctuations in our cash position or operating results;
manufacturing and supply issues related to our product or our current or future product candidates for our development programs and commercialization;
changes in financial estimates or recommendations by securities analysts;
the termination of any of our existing license agreements;
announcements relating to future licensing or development agreements;
potential acquisitions;
the trading volume of ADSs on Nasdaq and of the Ordinary Shares on NASDAQ Stockholm and the Frankfurt Stock Exchange;
sales of the ADSs or Ordinary Shares by us, our executive officers or directors or our shareholders;
fluctuations in the U.S. equity markets;
changes in accounting principles;
market conditions in the human and animal health sectors; and
general economic conditions in the U.S. and elsewhere.

In addition, the stock market in general, and Nasdaq in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of the Ordinary Shares, regardless of our actual operating performance.

37


 
 

TABLE OF CONTENTS

The multiple listing of the Ordinary Shares and the ADSs following this offering may adversely affect the liquidity and value of the ADSs.

Following this offering and after the ADSs are traded on Nasdaq, the Ordinary Shares will continue to be listed on NASDAQ Stockholm and the Frankfurt Stock Exchange. We cannot predict the effect of this multiple listing on the value of the Ordinary Shares and the ADSs. However, it is possible the multiple listing of the Ordinary Shares and ADSs may dilute the liquidity of these securities in one or all three markets and may adversely affect the development of an active trading market for the ADSs in the U.S. The price of the ADSs could also be adversely affected by trading in the Ordinary Shares on NASDAQ Stockholm and the Frankfurt Stock Exchange. Although currently we have no plans to do so, we may decide to delist the Ordinary Shares from either exchange in the future. We cannot predict the effect such delisting of the Ordinary Shares would have on the market price of the ADSs on Nasdaq.

If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding the ADSs or the Ordinary Shares, the price of these securities and their trading volume could decline.

The trading market for the ADSs and the Ordinary Shares will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If we do not obtain adequate securities or industry analyst coverage, the trading price for the ADSs and the Ordinary Shares may be negatively impacted. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our products, our intellectual property or the ADSs or our ordinary share performance, or if our target studies and operating results fail to meet the expectations of analysts, the prices of the ADSs and the Ordinary Shares may decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause the prices of the ADSs and the Ordinary Shares, as well as their respective trading volume to decline.

Substantial future sales of the Ordinary Shares or the ADSs in the public market, or the perception that these sales could occur, could cause the price of the ADSs to decline.

Additional sales of the Ordinary Shares in the public market after this offering, or the perception that such sales could occur, could cause the market price of the Ordinary Shares to decline. Upon completion of this offering, we will have        Ordinary Shares issued and outstanding. All ADSs sold in this offering will be freely transferable without restriction or additional registration under the Securities Act. The Ordinary Shares held by our directors, officers, and large institutional shareholders will be available for sale upon the expiration of a lock-up period, which we expect will expire 180 days after the date of this prospectus. The remaining Ordinary Shares will be available for sale after this offering since they are not subject to contractual and legal restrictions on resale. Any or all of these shares may be released prior to expiration of the lock-up period at the discretion of the lead underwriters for this offering. To the extent shares are released before the expiration of the lock-up period and these shares are sold into the market, the market price of the ADSs could decline.

You may not have the same voting rights as the holders of the Ordinary Shares and may not receive voting materials in time to be able to exercise your right to vote.

Holders of ADSs are not shareholders of our company and therefore do not have direct voting rights or the right to attend shareholders’ meetings. ADS holders do have the right to instruct the depositary how to vote the Ordinary Shares underlying their ADSs, but the depositary will only send voting materials to ADS holders if we ask it to. Therefore, you may not receive voting materials or you may not receive voting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers or other securities intermediaries, will not have the opportunity to exercise a right to vote.

You may not receive distributions on the Ordinary Shares represented by the ADSs or any value for them if it is illegal or impractical to make them available to holders of ADSs.

The depositary for the ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on the Ordinary Shares or other deposited securities after deducting its fees and expenses.

38


 
 

TABLE OF CONTENTS

You will receive these distributions in proportion to the number of the Ordinary Shares your ADSs represent. However, in accordance with the limitations set forth in the deposit agreement, it may be unlawful or impractical to make a distribution available to holders of ADSs. We have no obligation to take any other action to permit the distribution of the ADSs, Ordinary Shares, rights or anything else to holders of the ADSs. This means that you may not receive the distributions we make on the Ordinary Shares or any value from them if it is unlawful or impractical to make them available to you. These restrictions may have a material adverse effect on the value of your ADSs.

As a foreign private issuer, we are exempt from a number of U.S. securities laws and rules promulgated thereunder and are permitted to file less information with the SEC than U.S. companies must. This will limit the information available to holders of the ADSs.

We currently qualify as a “foreign private issuer,” as defined in the SEC’s rules and regulations and, consequently, we are not subject to all of the disclosure requirements applicable to companies organized within the U.S. For example, we are exempt from certain rules under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, our officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies. We are also not subject to Regulation FD under the Exchange Act, which would prohibit us from selectively disclosing material nonpublic information to certain persons without concurrently making a widespread public disclosure of such information. Accordingly, there may be less publicly available information concerning our company than there is for U.S. public companies.

As a foreign private issuer, we will file an annual report on Form 20-F within four months of the close of each fiscal year ended April 30 and reports on Form 6-K relating to certain material events promptly after we publicly announce these events. However, because of the above exemptions for foreign private issuers, our shareholders will not be afforded the same protections or information generally available to investors holding shares in public companies organized in the U.S.

As a foreign private issuer, we are not subject to certain Nasdaq corporate governance rules applicable to U.S. listed companies.

We rely on a provision in Nasdaq’s Listed Company Manual that allows us to follow Swedish corporate law and the Swedish Companies Act (SFS 2005:551) (the “Swedish Companies Act”) with regard to certain aspects of corporate governance. This allows us to follow certain corporate governance practices that differ in significant respects from the corporate governance requirements applicable to U.S. companies listed on Nasdaq.

For example, we are exempt from Nasdaq regulations that require a listed U.S. company to:

have a majority of the board of directors consist of independent directors;
require non-executive directors to meet on a regular basis without management present;
promptly disclose any waivers of the code of ethics for directors or executive officers that should address certain specified items;
have an independent nominating committee;
solicit proxies and provide proxy statements for all shareholder meetings; and
seek shareholder approval for the implementation of certain equity compensation plans and issuances of ordinary shares.

As a foreign private issuer, we are permitted to, and we will, follow home country practice in lieu of the above requirements. The determination of foreign private issuer is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be

39


 
 

TABLE OF CONTENTS

made with respect to us as of the end of our second quarter of the current fiscal year. If we do not meet the SEC’s requirements for foreign private issuer, we will be subject to a number of additional rules and regulations, including those identified above, and as a result we may incur significant regulatory compliance costs.

In accordance with our Nasdaq listing, our audit committee is required to comply with the provisions of Section 301 of the Sarbanes-Oxley Act, and Rule 10A-3 of the Exchange Act, both of which are also applicable to Nasdaq-listed U.S. companies. Because we are a foreign private issuer, however, our audit committee is not subject to additional Nasdaq requirements applicable to listed U.S. companies, including an affirmative determination that all members of the audit committee are “independent,” using more stringent criteria than those applicable to us as a foreign private issuer.

We are an “emerging growth company,” as defined in the JOBS Act, and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, the ADS and Ordinary Shares may be less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We cannot predict if investors will find the ADSs or the Ordinary Shares less attractive because we will rely on these exemptions. If some investors find the ADSs or the Ordinary Shares less attractive as a result, there may be a less active trading market for the ADSs or the Ordinary Shares and the price of the ADSs may be more volatile. We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year: (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least USD$1.0 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of the Ordinary Shares that is held by non-affiliates exceeds USD$700 million as of the prior October 31 prior June 30; and (2) the date on which we have issued more than USD$1.0 billion in non-convertible debt during the prior three-year period.

If we fail to establish and maintain proper internal controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired.

Section 404(a) of the Sarbanes-Oxley Act requires that beginning with our annual report for the year ending April 30, 2016, management shall assess and report annually on the effectiveness of our internal control over financial reporting and identify any material weaknesses in our internal controls over financial reporting. Although Section 404(b) of the Sarbanes-Oxley Act requires our independent registered public accounting firm to issue an annual report that addresses the effectiveness of our internal control over financial reporting, we have opted to rely on the exemptions provided in the JOBS Act, and consequently will not be required to comply with SEC rules that implement Section 404(b) of the Sarbanes-Oxley Act until such time as we are no longer an emerging growth company.

Our first Section 404(a) assessment will take place beginning with our annual report for the year ending April 30, 2016. The presence of a material weakness could result in financial statement errors which, in turn, could lead to errors in our financial reports or delays in our financial reporting, and could require us to restate our operating results or require our auditors to issue a qualified audit report. For the fiscal years ended April 30, 2013 and April 30, 2012, our independent registered public accounting firm reported to our audit committee that it had identified a material weakness in internal control over financial reporting related to inadequate financial statement preparation and review procedures. See “Our independent registered public accounting firm has advised us that it has identified a material weakness in our internal control over financial reporting relating to inadequate financial statement preparation and review procedures.” In order to maintain and improve the effectiveness of our disclosure controls and procedures and our internal controls over financial reporting, we will need to expend significant resources and provide significant management oversight. Implementing any appropriate changes to our internal controls may require specific compliance training of our directors and employees, entail substantial costs in order to modify our existing accounting

40


 
 

TABLE OF CONTENTS

systems, take a significant period of time to complete and divert management’s attention from other business concerns. These changes may not, however, be effective in maintaining the adequacy of our internal controls.

If we are unable to conclude that we have effective internal control over financial reporting or, at the appropriate time, our independent auditors are unwilling or unable to provide us with an unqualified report on the effectiveness of our internal control over financial reporting as required by Section 404(b) of the Sarbanes-Oxley Act, investors may lose confidence in our operating results, the price of the Ordinary Shares could decline and we may be subject to litigation or regulatory enforcement actions. In addition, if we are unable to meet the requirements of Section 404 of the Sarbanes-Oxley Act, we may not be able to remain listed on Nasdaq.

We will incur significant increased costs as a result of operating as a company whose ADSs are publicly traded in the U.S., and our management will be required to devote substantial time to new compliance initiatives.

As a company with publicly traded ADSs in the U.S., we will incur significant legal, accounting, insurance and other expenses that we have not previously incurred. In addition, the Sarbanes-Oxley Act, Dodd-Frank Wall Street Reform Act, Consumer Protection Act and related rules implemented by the SEC and Nasdaq have imposed various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We estimate that our annual compliance expenses following the completion of this offering will be approximately SEK 3 million in each of the next two fiscal years. Among other matters, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage. These laws and regulations could also make it more difficult and expensive for us to attract and retain qualified persons to serve on our board of directors, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of the ADSs, fines, sanctions and other regulatory action and potentially civil litigation.

We have broad discretion to determine how to use the funds raised in this offering, and may use them in ways that may not enhance our operating results or the price of the ADSs or the Ordinary Shares.

Though we intend to use the proceeds from this offering as indicated in “Use of Proceeds,” our management will have broad discretion over how to use proceeds from this offering, and we could spend the proceeds from this offering in ways our investors and shareholders may not agree with or that do not yield a favorable return, if at all. We intend to use the net proceeds of this offering to fund (1) new clinical trials and other regulatory requirements of multiple product candidates; (2) production development, including validation batches; (3) discovery and development of new product candidates; (4) working capital; (5) capital expenditures; and (6) other general corporate purposes, including employees, rent, and costs and expenses of being a U.S. public company. However, our ultimate use of these proceeds may differ substantially from our current plans. If we do not invest or apply the proceeds of this offering in ways that improve our operating results, we may fail to achieve expected financial results, which could cause the price of the ADSs to decline.

The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation.

We are incorporated under Swedish law. The rights of holders of Ordinary Shares and, therefore, certain of the rights of holders of ADSs, are governed by Swedish law, including the provisions of the Swedish Companies Act, and by our Articles of Association. These rights differ in certain respects from the rights of shareholders in typical U.S. corporations. See “Description of the Ordinary Shares — Differences in Corporate Law” for a description of the principal differences between the provisions of the Swedish Companies Act applicable to us and, for example, the Delaware General Corporation Law relating to shareholders’ rights and protections.

41


 
 

TABLE OF CONTENTS

We may be or may become a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes.

Whether we are or may be a PFIC is a complex determination based on the classification of various assets and income under the PFIC rules. Further, a determination as to whether or not we are a PFIC must be made annually and our circumstances may change in any given year. We do not intend to make decisions regarding our business operations with the specific purpose of reducing the likelihood of our becoming a PFIC. Accordingly, our business plan may result in our engaging in activities that could cause us to become a PFIC. If we are or become a PFIC, U.S. Holders may be subject to increased U.S. federal income taxes on a sale or other disposition of our ADSs and on the receipt of certain distributions and will be subject to increased U.S. federal income tax reporting requirements. Moreover, we may not decide to provide the information that would enable U.S. Holders to make an election to treat us as a “qualified electing fund” (a “QEF”), which election could mitigate the adverse U.S. federal income tax consequences of us being classified as a PFIC if we were so classified. See “Taxation — Passive Foreign Investment Company Status” for a more detailed discussion of the consequences if we are treated as a PFIC.

42


 
 

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains estimates and forward-looking statements, principally in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” Some of the matters discussed concerning our operations and financial performance include estimates and forward-looking statements within the meaning of the Securities Act and the Exchange Act.

These forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. These forward-looking statements are based on assumptions regarding our present and future business strategies and the environment in which we expect to operate in the future. Important factors that could cause those differences include, but are not limited to:

increasing expenses related to clinical studies and development of our product candidates;
our ability to obtain funding on acceptable terms or at all;
the inherent uncertainty of product development/commercialization of our products;
manufacturing and commercialization;
patents, including, but not limited to, legal challenges;
government regulation and approval, including, but not limited to, the expected regulatory approval dates for Paccal Vet, Paclical, and our other product candidates;
current revenue being insufficient to fund operating expenses;
future revenue being lower than expected;
the level of pricing and reimbursement for our products;
increasing competitive pressures in the industry;
general economic conditions or conditions affecting demand for the services offered by us in the markets in which it operates, both domestically and internationally, being less favorable than expected;
fluctuations in the price of raw materials and utilities;
currency fluctuations and hedging risks;
worldwide economic and business conditions and conditions in the industries in which we operate;
our relationships with our customers and suppliers;
increased competition from other companies in the industries in which we operate;
changing technology;
serious adverse events or other safety risks related to our products;
claims for personal injury or death arising from the use of products produced by us;
the occurrence of accidents or other interruptions to our production processes;
changes in our business strategy or development plans, and our expected level of capital expenses;
our ability to attract and retain qualified personnel;
regulatory, environmental, legislative and judicial developments;
our ability to expand our pipeline of product candidates;

43


 
 

TABLE OF CONTENTS

our intention to pay dividends; and
factors that are not known to us at this time.

Additional factors that could cause actual results, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results to differ materially include, but are not limited to, those discussed under “Risk Factors” in this prospectus. Additional risks that we may currently deem immaterial or that are not presently known to us could also cause the forward-looking events discussed in this prospectus not to occur. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar words are intended to identify estimates and forward-looking statements. Estimates and forward-looking statements speak only at the date they were made, and we undertake no obligation to update or to review any estimate and/or forward-looking statement because of new information, future events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. Our future results may differ materially from those expressed in these estimates and forward-looking statements. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this prospectus might not occur and our future results and our performance may differ materially from those expressed in these forward-looking statements due to, inclusive of, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based solely on these estimates and forward-looking statements.

44


 
 

TABLE OF CONTENTS

EXCHANGE RATE INFORMATION

Fluctuations in the exchange rate between the Swedish krona and the U.S. dollar will affect the U.S. dollar amounts received by owners of the ADSs on conversion of dividends, if any, paid in kronor on the Ordinary Shares and will affect the U.S. dollar price of the ADSs on Nasdaq. The table below shows the period end, average, high and low exchange rates of kronor per U.S. dollar for the periods shown. Average rates are computed by using the noon buying rate of the Federal Reserve Bank of New York for the U.S. dollar on the last business day of each month during the relevant year indicated or each business day during the relevant month indicated. The rates set forth below are provided solely for your convenience and may differ from the actual rates used in the preparation of our consolidated financial statements included in this prospectus and other financial data appearing in this prospectus.

       
  Period End   Average   High   Low
Year Ended April 30:
                                   
2011     6.0258       6.9437       8.0593       6.0258  
2012     6.7274       6.5990       7.0137       5.9968  
2013     6.4817       6.6747       7.2655       6.2880  
2014     6.5049       6.5244       6.8171       6.3237  
2015     8.3778       7.5000       8.8180       6.4864  
Month Ended:
                                   
August 2014     6.9753       6.8983       6.9753       6.8341  
September 2014     7.2151       7.1302       7.2600       7.0127  
October 2014     7.3971       7.2456       7.3971       7.1632  
November 2014     7.4544       7.4155       7.4754       7.3605  
December 2014     7.8245       7.6289       7.8245       7.4119  
January 2015     8.2732       8.1131       8.2732       7.8847  
February 2015     8.3555       8.3537       8.4193       8.2265  
March 2015     8.6268       8.5448       8.7505       8.2612  
April 2015     8.3778       8.6321       8.8180       8.3052  
May 2015     8.5245       8.3350       8.5245       8.2085  
June 2015     8.2937       8.2653       8.5884       8.1076  
July 2015     8.5925       8.5325       8.6402       8.3493  
August 2015 (through August 28, 2015)     8.4649       8.5554       8.7679       8.2769  

45


 
 

TABLE OF CONTENTS

PRICE RANGE OF THE ORDINARY SHARES

The Ordinary Shares have been trading on NASDAQ Stockholm under the symbol “OASM” since June 24, 2010 and on the Frankfurt Stock Exchange under the symbol “OMAX” since January 24, 2011.

The following table sets forth, for the periods indicated, the reported high and low closing sale prices of the Ordinary Shares on NASDAQ Stockholm and the Frankfurt Stock Exchange, in kronor and U.S. dollars and in Euros and U.S. dollars, respectively. U.S. dollar per ordinary share amounts have been translated into U.S. dollars at $1.00 = SEK 8.4649 and $1.00 = €1.1172 based on the certified foreign exchange rates published by the Federal Reserve Bank of New York on August 28, 2015.

NASDAQ Stockholm

       
  Krona   Dollar
     Price Per Ordinary Share   Price Per Ordinary Share
     High   Low   High   Low
Annual (Year Ended April 30):
                                   
2011 (beginning June 24, 2010)     26.00       11.60       3.07       1.37  
2012     14.60       6.60       1.72       0.78  
2013     13.55       4.70       1.60       0.56  
2014     29.80       10.00       3.52       1.18  
2015     23.00       18.30       2.72       2.16  
Quarterly (Fourth Quarter Ended April 30):
                                   
First Quarter 2013     8.00       6.30       0.95       0.74  
Second Quarter 2013     8.45       5.10       1.00       0.60  
Third Quarter 2013     10.50       4.70       1.24       0.56  
Fourth Quarter 2013     13.55       10.20       1.60       1.20  
First Quarter 2014     12.45       10.00       1.47       1.18  
Second Quarter 2014     18.20       11.90       2.15       1.41  
Third Quarter 2014     23.90       16.80       2.82       1.98  
Fourth Quarter 2014     29.80       18.60       3.52       2.20  
First Quarter 2015     23.00       18.80       2.72       2.22  
Second Quarter 2015     22.10       18.30       2.61       2.16  
Third Quarter 2015     20.80       18.30       2.46       2.16  
Fourth Quarter 2015     22.50       19.00       2.66       2.24  
First Quarter 2016     19.20       17.00       2.27       2.01  
Second Quarter 2016 (through August 28, 2015)     18.30       16.80       2.16       1.98  
Most Recent Six Months:
                                   
March 2015     22.20       19.90       2.62       2.35  
April 2015     21.40       19.00       2.53       2.24  
May 2015     19.20       18.00       2.27       2.13  
June 2015     18.80       17.00       2.22       2.01  
July 2015     18.20       17.20       2.15       2.03  
August 2015 (through August 28, 2015)     18.30       16.80       2.16       1.98  

46


 
 

TABLE OF CONTENTS

Frankfurt Stock Exchange

       
  Euro   Dollar
     Price Per Ordinary Share   Price Per Ordinary Share
     High   Low   High   Low
Annual (Year Ended April 30):
                                   
2011 (beginning January 24, 2011)     1.95       1.29       2.18       1.44  
2012     1.60       0.71       1.79       0.79  
2013     1.63       0.53       1.82       0.59  
2014     3.31       1.13       3.70       1.26  
2015     2.48       1.87       2.77       2.09  
Quarterly (Fourth Quarter Ended April 30):
                                   
First Quarter 2013     0.88       0.67       0.99       0.75  
Second Quarter 2013     0.97       0.58       1.08       0.65  
Third Quarter 2013     1.16       0.53       1.29       0.59  
Fourth Quarter 2013     1.63       1.13       1.82       1.26  
First Quarter 2014     1.41       1.13       1.58       1.26  
Second Quarter 2014     2.10       1.34       2.35       1.49  
Third Quarter 2014     2.74       1.86       3.06       2.08  
Fourth Quarter 2014     3.31       2.00       3.70       2.24  
First Quarter 2015     2.48       1.99       2.77       2.23  
Second Quarter 2015     2.41       1.93       2.69       2.16  
Third Quarter 2015     2.21       1.87       2.47       2.09  
Fourth Quarter 2015     2.36       2.00       2.63       2.23  
First Quarter 2016     2.10       1.76       2.35       1.97  
Second Quarter 2016 (through August 28, 2015)     1.93       1.72       2.16       1.92  
Most Recent Six Months:
                                   
March 2015     2.36       2.10       2.63       2.35  
April 2015     2.32       2.00       2.60       2.23  
May 2015     2.10       1.86       2.35       2.08  
June 2015     1.97       1.79       2.20       2.00  
July 2015     1.89       1.76       2.12       1.97  
August 2016 (through August 28, 2015)     1.93       1.72       2.16       1.92  

47


 
 

TABLE OF CONTENTS

USE OF PROCEEDS

We estimate that we will receive total estimated net proceeds from this offering of approximately $18.4 million based on an offering price of $    per ADS, or $    million if the underwriters exercise the overallotment option in full, in each case after deducting underwriting discounts and commissions and estimated expenses of the offering payable by us.

We intend to use the net proceeds we receive from this offering as follows:

approximately $7.3 million to fund new clinical trials and other regulatory requirements of our product and product candidates;
approximately $3 million to fund production development, including validation batches;
approximately $0.5 million to fund capital expenditures; and
approximately $7.6 million for other general corporate purposes, including employees, rent, and costs and expenses of being a U.S. public company.

Of the total use of proceeds of USD 7.3 million that are planned to be used for clinical trials, the Company plans to allocate approximately USD 2.2 million to animal health studies, approximately USD 4.5 million to human health studies and approximately USD 0.6 million to a XR-17 pharmacokinetic study.

For the animal health, Oasmia has been granted conditional approval in the US by the FDA of Paccal Vet-CA1 for the treatment of mammary carcinoma and squamous cell carcinoma in dogs. In order to apply for a full approval for these indications, Oasmia is planning a Phase III study for each indication. With the allocated funds of approximately USD 1.5 million, we estimate being able to reach approximately 20 – 25% of completion. The Company also plans to allocate USD 0.7 million to continue a Phase II study with Doxophos Vet the primary goal of which is to assess response rate in the treated dogs. The study will continue throughout 2016 and with the allocated funds the study is estimated to reach completion. The Phase II study will form the basis for a conditional approval application in the US for the treatment of lymphoma in dogs.

For human health, the Company plans to allocate approximately USD 4.5 million in total whereof USD 3.0 million to Docecal, approximately USD 0.5 million to Doxophos and USD 1.0 million to Paclical. For Docecal, the plan is to start a clinical Phase I study and a safety and tolerance study. With the allocated funds Oasmia estimates being able to reach 75% and 30% completion, respectively. The Company plans to initiate a Paclical study for the breast cancer indication and intends to allocate USD 1.0 million for this purpose. The estimated completion rate for the Paclical study will be less than 10%.

The Company plans to spend approximately USD 3.0 million on product development, mainly scale up of production at our contract manufacturing partner, Baxter Oncology GmbH in Germany. The proceeds will include cost for validation batches and be equally allocated among Paclical, Docecal and Doxophos.

The expected use of the net proceeds we receive from this offering represent our intentions based upon our current plans and business conditions. The amounts and timing of our actual expenses may vary significantly depending on numerous factors. Accordingly, we will have broad discretion over the uses of the net proceeds in this offering and investors will be relying on the judgment of our management regarding the application of the net proceeds. In addition, it is possible that the amount set forth above will not be sufficient for the purposes described above.

Pending these uses, we intend to invest the net proceeds from this offering in short or medium term investments.

48


 
 

TABLE OF CONTENTS

DIVIDEND POLICY

Since our inception, we have not declared or paid any dividends on the Ordinary Shares. We intend to retain any earnings for use in our business and do not currently intend to pay dividends on the Ordinary Shares. The declaration and payment of any future dividends will be at the discretion of our board of directors and will depend upon our results of operations, cash requirements, financial condition, contractual restrictions, restrictions imposed by our indebtedness, any future debt agreements or applicable laws and other factors that our board of directors may deem relevant.

See “Description of American Depositary Shares — Dividends and Other Distributions” for more information on the procedure for awarding dividends to nonresidents of Sweden.

49


 
 

TABLE OF CONTENTS

CAPITALIZATION

The following table sets forth our total capitalization, cash and cash equivalents and short-term investments as of April 30, 2015.

on an actual basis; and
on an as adjusted basis to give effect to the sale by us of      ADSs in this offering at an offering price of $    per ADS (after deduction of the underwriting discounts and commissions and estimated offering expenses payable by us in connection with this offering and assuming no exercise of the overallotment option by the underwriters and the application of proceeds therefrom).

You should read this table together with our consolidated financial statements and the related notes, which we include elsewhere in this prospectus, and with the information under “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

   
  As of April 30, 2015
     Actual   As adjusted(1)
     (in TSEK)
Cash, cash equivalents and short-term investments     76,990     $       
Liabilities:
                 
Liabilities to credit institutions     20,000     $  
Borrowings     87,000     $  
Total non-current liabilities            
Total long-term debt, including current portion     107,000     $        
Shareholders’ equity:
                 
Share capital, SEK 0.10 par value; 97,858,144 shares outstanding;     shares issued(2)     9,786     $  
Other capital provided     850,996           
Retained earnings     (485,071 )    $        
Total stockholders’ equity     375,711     $        
Total capitalization     405,721     $        

(1) Assuming the number of ADSs sold by us in this offering remains the same, a $1.00 increase or decrease in the assumed initial public offering price of $    per ADS, the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease our total capitalization by $     million.
(2) Assumes completion of the temporary arrangement in connection with closing and issuance of new Ordinary Shares related to this offering. See “Related Party Transactions — Stock Lending Agreement.”

50


 
 

TABLE OF CONTENTS

DILUTION

If you invest in the ADSs in this offering, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per ADS and the as adjusted net tangible book value per ADS after giving effect to this offering.

As of April 30, 2015, we had a net tangible book value (deficit) of ($3.34) million, or $     per Ordinary Share and $     per ADS. Our net tangible book value (deficit) per share represents total assets less capitalized development costs, other intangible assets and total liabilities divided by the number of Ordinary Shares outstanding at April 30, 2015.

After giving effect to the sale of      ADSs at an assumed initial public offering price of $     per ADS (and completion of the closing mechanics described in “Related Party Transactions — Stock Lending Agreement”), the midpoint of the range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our as adjusted net tangible book value as of April 30, 2015, would have been approximately $     million, or approximately $     per outstanding Ordinary Share, including Ordinary Shares underlying the outstanding ADSs, or $     per ADS. This amount represents an immediate increase in net tangible book value of $     per Ordinary Share, or $     per ADS, to existing shareholders and an immediate dilution in net tangible book value of approximately $     per Ordinary Share, or $     per ADS to new investors purchasing ADSs in this offering.

Dilution per ADS to new investors is determined by subtracting as adjusted net tangible book value per Ordinary Share after this offering from the initial public offering price per ADS paid by new investors. The following table illustrates this dilution:

 
Assumed initial public offering price per ADS         
Net tangible book value (deficit) as of April 30, 2015     ($3.34 million)  
Increase in as adjusted net tangible book value per ADS attributable to this offering         
As adjusted net tangible book value per ADS after this offering         
Dilution per ADS to new investors         

Each $1.00 increase (decrease) in the assumed initial public offering price of $     per ADS, the midpoint of the range set forth on the cover page of this prospectus, would increase (decrease) the as adjusted net tangible book value after this offering by approximately $     per Ordinary Share and $     per ADS, and dilution in net tangible book value per share to new investors by approximately $     per Ordinary Share and $     per ADS, assuming that the number of ADSs offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and the estimated offering expenses payable by us.

The following table summarizes on the as adjusted basis described above, as of April 30, 2015, the differences between the shareholders as of April 30, 2015 and the new investors with respect to the number of ADSs purchased from us, the total consideration paid to us in cash and the average price per ADS paid at an assumed initial public offering price of $     per ADS. The calculation below is based on the assumed initial public offering price of $     per ADS, the midpoint of the range set forth on the cover page of this prospectus, before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

           
  Ordinary Shares Purchased   Total Consideration   Average Price
Per Ordinary
Share
  Average Price
Per ADS
     Number   %   Amount   %
Existing shareholders                $         $     $  
New investors                                                              
Total           100 %    $       100 %    $     $  

Each $1.00 increase (decrease) in the assumed public offering price of $     per ADS would increase (decrease) total consideration paid by new investors, average price per Ordinary Share and per ADS paid by

51


 
 

TABLE OF CONTENTS

all shareholders by $     million per Ordinary Share and $     million per ADS, respectively, assuming sale of      ADSs by us at an assumed initial public offering price of $     per ADS before deducting estimated underwriting discounts and commissions and offering expenses payable by us.

If the underwriters exercise their option to purchase additional ADSs in full:

the percentage of the Ordinary Shares held by existing shareholders will decrease to approximately     % of the total number of Ordinary Shares outstanding after this offering; and
the number of ADSs held by new investors will increase to     , or approximately     % of the total number of Ordinary Shares outstanding after this offering.

52


 
 

TABLE OF CONTENTS

SELECTED CONSOLIDATED FINANCIAL DATA

You should read the following selected financial data in conjunction with our financial statements and the related notes thereto appearing elsewhere in this prospectus and in the section of this prospectus entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The following table summarizes our consolidated financial data as of the dates and for the periods indicated. The selected consolidated financial data for the fiscal years ended April 30, 2015 and April 30, 2014 have been derived from our consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Financial Reporting Interpretations Committee. Furthermore, the recommendation RFR 1, Supplementary accounting regulations for Groups, issued by the Swedish Financial Reporting Board, has been applied. We have prepared the consolidated financial information set forth below on the same basis as our audited consolidated financial statements.

Our consolidated financial statements are prepared and presented in Swedish krona, which is our presentation currency. All tables, if not expressly otherwise stated, in this prospectus are therefore in Swedish krona.

Our historical results are not necessarily indicative of the results that may be expected in the future. The following summary consolidated financial data should be read in conjunction with the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements included elsewhere in this prospectus, including our discussion therein regarding the material weakness in our internal control over financial reporting identified by our auditors.

Key figures are translated into USD as additional information as a service to readers of this prospectus in the US. The US Dollar is not the functional currency of Oasmia, which is SEK. The conversion of currency has been made by use of a convenience rate for all figures including those from previous periods. This rate is the closing rate as per August 28, 2015 which was 8.4649 SEK per one USD.

Consolidated Income Statement Data:

       
  Year Ended April 30,
     2015   2015   2014   2014
     (TSEK)   (USD,
in thousands)
  (TSEK)   (USD,
in thousands)
Net sales     2,070       245       60       7  
Capitalized development cost     16,797       1,984       29,464       3,481  
Other operating income     221       26       4,454       526  
Raw materials, consumables and goods for resale     (10,062 )      (1,189 )      (6,835 )      (807 ) 
Other external expenses     (60,739 )      (7,175 )      (75,189 )      (8,882 ) 
Employee benefit expenses     (50,530 )      (5,969 )      (45,101 )      (5,328 ) 
Depreciation, amortization and impairment     (5,190 )      (613 )      (4,941 )      (584 ) 
Other operating expenses     (792 )      (94 )      (3 )      (0.4 ) 
Operating income     (108,225 )      (12,785 )      (98,091 )      (11,588 ) 
Financial income     210       25       192       23  
Financial expenses     (9,482 )      (1,120 )      (7,213 )      (852 ) 
Financial items, net     (9,272 )      (1,095 )      (7,021 )      (829 ) 
Income before taxes     (117,497 )      (13,880 )      (105,112 )      (12,417 ) 
Taxes
                                   
Income for the period     (117,497 )      (13,880 )      (105,112 )      (12,417 ) 
Earnings per share, before and after dilution, SEK(1)     (1.28 )      (0.15 )      (1.27 )      (0.14 ) 
Weighted average number of shares, in thousands before and after dilution(1)     91,655       91,655       82,848       82,848  

(1) Recalculation of historical figures has been performed with regards to capitalization issue components in the preferential rights share issue carried out in the fiscal quarter ended January 31, 2013 and January 31, 2015.

53


 
 

TABLE OF CONTENTS

Consolidated Balance Sheet Data:

       
  Year Ended April 30,
     2015   2015   2014   2014
     (TSEK)   (USD,
in thousands)
  (TSEK)   (USD,
in thousands)
Non-current assets     427,879       50,547       414,106       48,920  
Cash, cash equivalents and short-term investments     76,990       9,095       48,241       5,699  
Total current assets     86,690       10,241       54,276       6,412  
Total assets     514,569       60,789       468,383       55,332  
Total equity     375,711       44,385       281,907       33,303  
Total non-current liabilities     0       0       891       105  
Total current liabilities     138,858       16,404       185,584       21,924  
Total liabilities     138,858       16,404       186,476       22,029  

Consolidated Cash Flow Data:

       
  Year Ended April 30,
     2015   2015   2014   2014
     (TSEK)   (USD,
in thousands)
  (TSEK)   (USD,
in thousands)
Cash flow from operating activities     (107,666 )      (12,719 )      (86,899 )      (10,266 ) 
Cash flow from investing activities     (69,755 )      (8,240 )      (35,682 )      (4,215 ) 
Cash flow from financing activities     156,017       18,431       107,865       12,743  

54


 
 

TABLE OF CONTENTS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of this prospectus for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a pharmaceutical company focused on innovative treatments within human and animal oncology. Our product and product candidates utilize a proprietary, nanoparticle formulation technology that is designed to facilitate the administration of intravenously-delivered active pharmaceutical ingredients, without the addition of toxic solvents. We believe our formulation may result in improved safety, efficacy and ease of administration over existing drugs. Our initial development and commercialization efforts are focused on creating novel formulations of well-established chemotherapeutic drugs that can be used for the treatment of cancer in both humans and companion animals. We have four human oncology product candidates in pre-clinical and/or clinical development, and two veterinary oncology product candidates. We disclosed top-line Phase III data for our lead human oncology product candidate in the fourth quarter of 2014. In February 2014, we received conditional approval by the United States Food and Drug Administration (“FDA”) for our initial veterinary oncology product.

Our lead products utilize paclitaxel, the active ingredient of Taxol and Abraxane, two widely used cancer drugs marketed by Bristol-Myers Squibb and Celgene, respectively. Based on the potential benefits of our proprietary formulation technology, we are pursuing a strategy to replace the use of existing paclitaxel-based products in multiple cancers with our novel formulations. Our formulation is currently called Paclical for human indications, and is marketed under the name Paccal Vet-CA1 (“Paccal Vet”) for veterinary indications. We own the global commercial rights to Paclical, excluding Israel, Turkey, Russia, the Commonwealth of Independent States (“CIS”), Ukraine, Georgia and Turkmenistan. We have licensed the commercial rights to Paccal Vet for sale in Japan, Russia and the CIS. Paclical received marketing approval in Russia and the CIS in April 2015.

Since we do not have sales and marketing operations, we have entered into various licensing and distribution agreements with established pharmaceutical companies to sell Paclical, Paccal Vet, and our other product candidates. We have entered into an agreement with Pharmasyntez for the commercialization of Paclical in Russia and the CIS, as well as Ukraine, Georgia and Turkmenistan, and a separate agreement with Medison Pharma for the commercialization of Paclical in Israel and Turkey. Furthermore, we have entered into an agreement with Nippon Zenyaku Kogyo for the commercialization of Paccal Vet in Japan.

Paccal Vet is the first injectable chemotherapeutic agent authorized for marketing for the treatment of squamous cell carcinoma (a cancer occurring in certain cells in the skin and the lining of other organs) and mammary carcinoma (a cancer occurring in the lining of the milk ducts of the mammary glands) in dogs. We received conditional approval by the FDA for Paccal Vet for the treatment of mammary carcinoma and squamous cell carcinoma under the Minor Use and Minor Species (“MUMS”) designation in the U.S. MUMS designation is a status similar to orphan designation for human drugs, making the sponsor eligible for incentives to support the approval or conditional approval of the designated drug, including seven years of market exclusivity in the U.S. For a description of the qualifications for Paccal Vet to receive the MUMS designation, conditional approval and full approval for dogs, see “Business — Overview.” We believe Paccal Vet can be on the market for up to five years, through annual renewals, while we collect remaining required effectiveness data for full approval. We are currently planning additional efficacy studies in dogs to collect all the necessary efficacy data for full U.S. approval of Paccal Vet for mammary carcinoma and squamous cell carcinoma.

From our inception through April 30, 2015, such agreements have yielded net cash of SEK 87.83 million in upfront fees and milestone payments and SEK 2.0 million in royalties and sales revenue. In addition to

55


 
 

TABLE OF CONTENTS

these partnerships, we will eventually directly commercialize Paclical ourselves using a targeted sales strategy similar to the approach used by Abraxis during the launch of Abraxane in 2005. We retain the right to commercialize Paclical in the U.S. and expect to retain some rights to market Paclical in the EU. On August 4, 2015, we announced the results of a preliminary study of a head-to-head pharmacokinetic comparison between Paclical and Abraxane, which found that the concentration of both total an unbound paclitaxel in plasma was similar.

We are a newly-commercial stage company with one product conditionally approved for marketing and sale, and given our recent change from development stage to commercial stage, we have not generated any significant revenue other than milestone payments from our commercial partners. We have incurred significant net losses since our inception on April 15, 1988. We incurred net losses of SEK 117.50 million and SEK 105.11 million for the fiscal years ended April 30, 2015 and April 30, 2014, respectively. These losses have resulted principally from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. As of April 30, 2015, we had a deficit accumulated during development stage of SEK 485.07 million and cash, cash equivalents and short-term investments of SEK 76.99 million. We expect to continue to incur operating losses in the near future as we continue our clinical and preclinical development programs, apply for marketing approval for our product candidates and, subject to obtaining regulatory approval of our product candidates, establish sales and marketing partnerships in preparation for the potential commercialization of our product candidates. We believe that the net proceeds of this offering, together with our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements for at least the next twelve months.

Other than what is disclosed in this prospectus, there are at present no significant trends known to us that are reasonably likely to have a material effect on our financial situation.

Events after balance sheet date of April 30, 2015

Oasmia applied to be listed on NASDAQ in the USA, and began preparing a roadshow for American investors in July.

On July 6, 2015 the Company submitted an application to be listed on the NASDAQ Stock Exchange. Ladenburg Thalmann & Co., Inc. was listed as a financial advisor in connection with the application.

Oasmia set up sales company in the USA

Paccal Vet-CA1 was formerly distributed in the USA by Zoetis, a veterinary pharmaceutical company that was spun off from Pfizer in 2013. Due to an officially ongoing rationalization programme at Zoetis, amongst other things, Oasmia decided to create a sales organization of its own and to be responsible for marketing and sales. The company reclaimed the exclusive global rights to Paccal Vet and Doxophos Vet, and started a company named “Oasmia Pharmaceutical, Inc.” with a view to marketing products in the USA and promoting Oasmia’s future growth. During the transfer process between the parties, business is proceeding as previously and the process is estimated to be complete in September 2015.

Oasmia carried out changes to the Board and management team

At the Extraordinary General Meeting held on May 28, 2015, Hans Liljeblad and Lars Bergkvist were elected to the Board; Julian Aleksov was elected to succeed Joel Citron as Chairman of the Board. Mikael Asp was appointed as new CEO for Oasmia by the Board. Bo Cederstrand, Horst Domdey, Alexander Kotsinas and Hans Sundin remained as members of the Board.

The Extraordinary General Meeting adopted a resolution, in accordance with the Board’s proposal, to authorize the Board, effective until the next Annual General Meeting, and on one or more occasions, to make a decision to issue shares, warrants and/or convertible instruments. However, the Board may not make any decision whereby the share capital increases by more than SEK 1,500,000 over and above the increase in share capital that may occur as a result of previous authorizations effective until the next Annual General Meeting.

Financial Operations Overview

Net sales.  We generate net sales pursuant to agreements with our commercial partners. These agreements generally include some of the following sources of revenue: an initial payment, additional milestone payments dependent upon the achievement of certain clinical, regulatory or commercial milestones,

56


 
 

TABLE OF CONTENTS

invoiced supply price for products delivered to commercial partners and royalties on product sales of licensed products when such product sales occur. Net sales also include amounts earned from the sale of miscellaneous supplies, such as sterile water. We recognize net sales when the amount earned can be measured in a reliable way and when we have determined it is likely that future economic benefits will accrue to us and certain criteria have been met, which will vary based on specific contractual arrangements. Revenue from licensing arrangements and product sales during the fiscal year ended April 30, 2015 amounted to TSEK 2,002 and for the fiscal year ended April 30, 2014 it amounted to zero.

Capitalized development cost.  Capitalized development cost consists of expenditures for materials and services used in development of the intangible asset and employee benefit expenses for staff engaged in developing the intangible asset. Expenditures for research and development operations are generally expensed as they occur. Development costs which are attributable to clinical trials and registration are capitalized to the extent that they are expected to generate future economic benefits. We have determined that the beginning of Phase III trials is the earliest point for capitalization of development expense. This has been applied for Paccal Vet and Paclical, for which all conditions for capitalization are fulfilled. These conditions are generally met when it is probable that expected future economic benefits attributable to an asset will flow to us and the asset’s cost can be measured reliably. The disclosure of the development costs in Phase III is accounted for gross, i.e. the costs are included in various operating expenses whereas the capitalized part is disclosed on a specific line in the income statement.

Other operating income.  Other operating income comprises revenues that are not generated in the ordinary course of business. For the periods disclosed, other operating income primarily consists of an insurance compensation we received in June 2013 due to defective water equipment valves that lost small particles, resulting in product recall, destruction of clinical batches and lost time for the production of vials for clinical trials. All proceeds received from the insurance compensation were used towards paying for the extra costs associated with the resulting business interruption.

Operating expenses.  Operating expenses includes four categories described below.

Raw materials, consumables and goods for resale.  Raw materials, consumables and goods for resale consist of materials and consumables for manufacturing of pharmaceuticals for sales, clinical trials, cost of analysis for such pharmaceuticals and handling of waste.

Other external expenses.  Other external expenses consist mainly of external fees paid for clinical trials, fees paid for regulatory, administration and other services such as rent of facility and cost for utilities.

Employee benefit expenses.  Employee benefit expenses consist of salaries to employees, remuneration to board members, social security cost and other employee benefits and expenses.

Depreciation and amortization.  Depreciation consists of depreciation for machinery, equipment and patents. The capitalized development expense is not yet subject to amortization.

Financial income.  Financial income consists primarily of interest earned by investing our cash reserves in short-term interest-bearing deposit accounts.

Financial expenses.  Financial expenses consist primarily of interest expense on interest-bearing loans.

Income taxes.  As a Swedish resident trading equity, we are subject to Swedish corporate taxation. Since we have been loss-making since inception, no corporate taxes have been recorded.

57


 
 

TABLE OF CONTENTS

Results of operations

Comparison of Fiscal Years Ended April 30, 2015 and April 30, 2014

   
  Year Ended April 30,
     2015   2014
     (in TSEK)
Net sales     2,070       60  
Capitalized development cost     16,797       29,464  
Other operating income     221       4,454  
Operating expenses     (127,313 )      (132,069 ) 
Financial income     210       192  
Financial expense     (9,482 )      (7,213 ) 
Income taxes            
Income for the period     (117,497 )      (105,112 ) 

Net sales

   
  Year Ended April 30,
     2015   2014
     (in TSEK)
Net sales     2,070       60  

Revenues from royalties and sales of products were SEK 2,002 thousands in the year ended April 30, 2015 and zero in 2014.

There were revenues from sales of sterile water amounting to SEK 68 thousands in the year ended April 30, 2015 and SEK 60 thousands in 2014.

Capitalized development cost

   
  Year Ended April 30,
     2015   2014
     (in TSEK)
Capitalized development cost     16,797       29,464  

Capitalized development cost decreased by SEK 12.66 million, or 43%, from SEK 29.46 million in the year ended April 30, 2014 to SEK 16.80 million in the year ended April 30, 2015. In both years there were two product candidates, Paccal Vet and Paclical, subject to capitalization. For Paclical, capitalization went down by SEK 10.48 million, from SEK 19.68 million to SEK 9.2 million as the Phase III study for this product candidate is in its final stages. For Paccal Vet, capitalization decreased by SEK 2.18 million from SEK 9.79 million to SEK 7.61 million in the year ending April 30, 2015. This was a result of a new complementary Phase III study that was started in the second quarter of the fiscal year ending April 30, 2013.

Other operating income

   
  Year Ended April 30,
     2015   2014
     (in TSEK)
Other operating income     221       4,454  

For the year ended April 30, 2015, other operating income decreased to SEK 0.22 million, compared to SEK 4.45 million in the prior year. The decrease was primarily due to the amount the fiscal year ending April 30, 2014 consisting mainly of insurance compensation related to faulty production equipment amounting to SEK 4.25 million.

58


 
 

TABLE OF CONTENTS

Operating expenses

   
  Year Ended April 30,
     2015   2014
     (in TSEK)
Raw materials, consumables and goods for resale     10,062       6,835  
Other external expenses     60,739       75,189  
Employee benefit expenses     50,530       45,101  
Depreciation, amortization and impairment     5,190       4,941  
Other operating expenses     792       3  
Total operating expenses     127,313       132,069  

Operating expenses including depreciation and amortization decreased by SEK 4.6 million, or 4%, from SEK 132.07 million to SEK 127.3 million, for the year ended April 30, 2015 compared to the year before.

Raw materials, consumables and goods for resale increased by SEK 3.23 million which was due to higher demand of raw materials in research and development.

Other external expenses decreased by SEK 14.45 million due to a number of factors. Method development of production methods decreased by SEK 3.6 million compared to prior year. Financial activities, mainly related to external services in connection with the potential stock listing in the U.S decreased by SEK 3.5 million. External expenses in clinical trials decreased by SEK 1.95 million in animal health and by SEK 9.47 million in human health.

Expenses for premises and rent of production facilities increased by SEK 1.66 million and consultancy fees by SEK 1.9 million.

Employees benefit expenses increased by SEK 5.43 million due to annual wage adjustments, hiring of more qualified staff and a new pension plan.

Financial income

   
  Year Ended April 30,
     2015   2014
     (in TSEK)
Financial income     210       192  

Financial income in the year ended April 30, 2015 amounted to SEK 0.21 million, compared to SEK 0.19 million for the year before.

Financial expense

   
  Year Ended April 30,
     2015   2014
     (in TSEK)
Financial expense     9,482       7,213  

Financial expense is primarily attributable to interest on loans from Nexttobe. Interest expense was higher in the year ended April 30, 2015 than in the previous year due to the maturity of the loan and an increased interest rate. The loan was provided to the Company in three portions. The first portion, for SEK 25 million, was provided in February 2012. The second portion, for SEK 65 million, was in May 2012. The third portion of SEK 15 million was provided in September 2012, amounting to a total loan of SEK 105 million. The interest rate was fixed at 5% for all portions of the loan until December 31, 2013. From January 1, 2014, the interest was set to 8.5%. This component amounted to an additional interest expense of SEK 1.87 million years ended April 30, 2015.

Furthermore, Oasmia was granted a bank loan from Nordea amounting to SEK 40 million, with a term from December 1, 2013. This loan was replaced by a new loan of SEK 20 million in December 2014. Interest expense for this loan was SEK 0.65 million in the fiscal year ending April 30, 2015 and SEK 1.06 million 2014.

59


 
 

TABLE OF CONTENTS

Liquidity and Capital Resources

Sources of funds

Our primary uses of cash are to fund research and development expenses and capital expenditures. In recent years, we have largely funded our operations and growth from loans, share issuances and milestone payments from our partners and licensees. Our cash flows may fluctuate, are difficult to forecast and will depend on many factors including:

the realization of revenue from our product and product candidates, which will rely upon the timing of regulatory approvals, the marketing efforts of our commercial partners, and the price levels achieved by our partners;
the extent of success in our pre-clinical and clinical stage research programs which will determine the amount of funding required to further the development of our product candidates;
the outcome, timing and cost of regulatory approvals of Paccal Vet, Paclical, Doxophos Vet and our other product candidates;
the timing of achievement of the milestones receivable if Paccal Vet, Paclical, Doxophos Vet and our other product candidates are approved and launched in the U.S. and elsewhere;
the extent to which we seek to retain development rights to our pipeline of new product candidates or whether we seek to license such candidates to a partner who will fund future research and development expenditure in return for a right to share in future commercial revenue;
the terms and timing of new strategic collaborations;
the number and characteristics of the product candidates that we seek to develop;
the costs involved in filing and prosecuting patent applications and enforcing and defending potential patent claims; and
the costs of hiring additional skilled employees to support our continued growth.

On April 30, 2015 we had the following loans and credit lines: (i) one loan from Nexttobe amounting to SEK 87 million, due December 30, 2015 with an interest rate of 8.5%, (ii) one loan from Nordea Bank AB (“Nordea”) amounting to SEK 20 million with an interest rate pegged to the Stockholm Interbank Offered Rate (“STIBOR”) one week plus 2%, (iii) one unutilized SEK 5 million credit facility with Nordea with a variable interest rate upon utilization, and (iii) one unutilized credit facility of SEK 40 million with Alceco, with a fixed interest rate of 5% upon utilization.

Assuming gross proceeds of $20 million are raised, we believe that, together with our cash and cash equivalents and unutilized credit facilities, we expect to have sufficient resources to fund our operations, including currently anticipated research and development activities and planned capital spending, for the foreseeable future, including for at least the next twelve months. Our expectation is based, in part, on our ability to either extend the maturity date of the Nexttobe loan (as we have done in the past) beyond December 30, 2015 or secure new credit overdraft facility. We cannot assure you that we will be able to extend the maturity date or obtain this new credit facility.

Summary of cash flows

   
  Year Ended April 30,
     2015   2014
     (in TSEK)
Cash flow from operating activities     (107,666 )      (86,899 ) 
Cash flow from investing activities     (69,755 )      (35,682 ) 
Cash flow from financing activities     156,017       107,865  

60


 
 

TABLE OF CONTENTS

Cash flow from operating activities

The negative cash flow from operating activities for the fiscal year ended April 30, 2015, SEK 107.67 million, consists of the operating income loss, SEK 108.23 million, adjusted for depreciation and amortization, SEK 5.19 million, divestment and disposal of tangible assets, SEK 0.79 million, and negative changes in working capital, SEK 4.10 million, plus interest received, SEK 0.06 million, less interest paid, SEK 1.38 million. The significant items in the changes in working capital included a decrease in accounts payable of SEK 3.49 million, an increase in inventories of SEK 3.68 million and an increase in other current liabilities of SEK 3.05 million.

Cash flow from investing activities

For the fiscal year ended April 30, 2015, cash used in investing activities amounted to SEK 69.76 million. This amount included intangible assets of SEK 17.41 million, which consisted of capitalized development costs of SEK 16.80 million and patents of SEK 0.61 million. Investments in tangible assets amounted to SEK 3.62 million, which primarily related to the purchase of production equipment.

Excess cash of net SEK 50 million has been invested in short term investments.

Cash flow from financing activities

For the fiscal year ended April 30, 2015, cash flow provided by financing activities amounted to SEK 156.02 million. This amount consisted of a new share issue of SEK 176.02 million net of issue expenses and decrease in liability to credit institutions.

On July 3, 2014, the Company consummated a SEK 50 million directed share issue that provided the Company with SEK 46.83 million after issue expenses. It was directed at a number of international institutional investors and investors in Sweden. In the aggregate, 2,500,000 Ordinary Shares were issued at a price of SEK 20 per share. The total number of shares amounted to 88,072,330 afterwards. The increase in number of the Ordinary Shares was approximately 3%.

On December 12, 2014, Oasmia announced the final result in the right issue in the total amount of SEK 176.15 million (before transaction related costs), of which SEK 35.28 million by means were set-off of debt to Nexttobe AB.

On December 30, 2014, Oasmia announced that Nexttobe extended its loan and Oasmia used some of the proceeds from the rights issue in November/December to pay accrued interest and a part of the original principal amount of the loan from Nexttobe. The new loan amounts to SEK 87 million and is due December 30, 2015.

On December 5, 2013, we reported that we were granted a new bank loan from Nordea amounting to SEK 40 million, with a term from December 1, 2013 to March 31, 2014.

On March 25, 2014, we reported that a new bank loan of SEK 40 million from Nordea had replaced the previous bank loan, with the new bank loan having a term of April 1, 2014 to August 31, 2014. We reported on September 5, 2014 that the maturity of this bank loan was extended to September 30, 2014 and then renegotiated to expire December 30, 2014. On December 30, 2014 we announced that Oasmia obtained a new SEK 20 million bank loan that replaces the previous SEK 40 million bank loan which was due on December 30, 2014. The new SEK 20 million bank loan had a maturity date of June 30, 2015, which has been renegotiated to be due on December 30, 2015. As of January 1, 2015, the Company has SEK 20 million placed in a blocked fixed income fund as a pledge for the SEK 20 million bank loan.

61


 
 

TABLE OF CONTENTS

Contractual Obligations

The following table summarizes our contractual commitments and obligations as of April 30, 2015.

         
  Payments Due by Period
     Total   Less than
1 year
  1 – 3 years   3 – 5 years   More than
5 years