Intellect Neurosciences, Inc. Issues Letter to Shareholders
July 31 2014 - 8:00AM
Intellect Neurosciences, Inc. (OTCPNK:ILNS), a
biopharmaceutical company engaged in the discovery and development
of disease-modifying therapeutic agents for the treatment and
prevention of Alzheimer's disease today issued the following Letter
to Shareholders from Elliot Maza, newly appointed Chairman and CEO.
Dear Intellect Stakeholder,
During the past several months, the Board of Directors of
Intellect Neurosciences conducted a thorough review of the
Company's programs, finances and capital structure to determine how
best to leverage the Company's valuable asset portfolio. The Board
determined that three objectives must be satisfied to deliver an
aggressive and transformational change to the status quo:
1. The infusion of sufficient funds to
support ongoing operating expenses and further development of the
Company's core Alzheimer's Tau C3 monoclonal antibody
technology;
2. The streamlining of the
Company's complicated capital structure by substantially reducing
the outstanding amount of convertible preferred stock
previously issued by the Company and eliminating "ratchet
anti-dilution" provisions contained in the Company's outstanding
convertible securities and warrants, which reduce the conversion
price of such securities upon the occurrence of certain events;
and
3. The appointment of a new Chief
Executive Officer to spearhead the Company's drive towards
monetization.
I am pleased to report that the strategic financing transaction
and other corporate events described in the Form 8-K that the
company filed today with the SEC is a significant step towards
fulfilling these objectives:
1. Three of our largest existing
shareholders invested a total of $1.2 million of funds needed
to advance our Alzheimer's Tau C3 monoclonal antibody technology,
pay for maintaining our patent estate that, among other things, is
the foundation of our valuable contract with Shire
Pharmaceuticals related to the development of OX1 for Friedreich
Ataxia and support our ongoing operations;
2. Certain shareholders
surrendered a total of $16.75 million of Convertible Preferred
Stock and more than 50 million warrants in exchange for nominal
consideration and a majority of the holders of Series B, Series C,
Series D and Series E Convertible Preferred Stock and the holders
of the Company's outstanding Convertible Notes and Warrants
previously issued by the Company agreed to eliminate the ratchet
anti-dilution provision going forward; and
3. The Board appointed Elliot Maza,
JD, CPA, currently CFO and Director, as Chief Executive Officer,
Chief Financial Officer and Chairman of the Board of Directors.
More specifically, the financing that we announced today will
provide the Company with the necessary financial resources to:
- Fund all patent related expenses that we are currently
obligated to pay under the Company's contract with Shire
Pharmaceuticals covering Intellect's OX1 molecule, an antioxidant
containing indole-3-propionic acid. In September 2011, we entered
into an Exclusive License Agreement with ViroPharma related to OX1.
In January 2014, ViroPharma merged with Shire Pharmaceuticals. In a
letter dated February 5, 2014, Shire informed us that all existing
work under the License Agreement regarding the development of OX1
will continue. Shire is developing OX1 as a treatment for
Friedreich's Ataxia and possibly other diseases for which OX1 may
qualify for orphan drug designation. Under the License Agreement,
Intellect is entitled to an aggregate of up to $120 million in
milestone payments from Shire and a tiered royalty based on annual
net sales assuming successful advancement of the product to market;
of which there can be no assurance;
- Fund further animal studies related to TauC3, Intellect's
unique Alzheimer's drug candidate. Intellect's exclusive license
from Northwestern University to TauC3 for all therapeutic and
diagnostic applications remains in full force and effect. TauC3 is
a high affinity IgG monoclonal antibody that uniquely binds to
Asp421 at the C-terminus of Δtau, believed to be an important
mediator in tau pathology;
- Fund exploratory pre-clinical studies related to CONJUMAB-A, a
humanized monoclonal antibody specific for amyloid beta (Aβ). Its
uniqueness is that the antibody is chemically conjugated through a
maleimide-based linker to N-acetyl 5-methoxytryptamine (aka
melatonin), a potent antioxidant that has anti-amyloidogenic,
anti-inflammatory and anti-apoptotic properties. We are promoting
CONJUMAB-A as a particularly effective therapeutic candidate for
Age Related Macular Degeneration (AMD) the leading cause of
blindness in elderly people.
- Fund litigation expenses related to our ongoing dispute with
one of our licensees. We remain confident about prevailing in
this dispute; although there can be no assurance that we will
prevail.
- Maintain Dr. Daniel Chain, the Company's founder, developer of
its technology and former CEO and Chairman of the Board, as a
consultant to the Company to provide insight and guidance necessary
to advance the Company's asset portfolio.
In an effort to increase shareholder awareness of the Company's
progress, the Board has asked me to communicate with our
stakeholders on a regular basis through meetings, published updates
and timely responses to shareholder queries addressed to the
Company at ir@intellectns.com.
I look forward to updating you on our progress going forward and
appreciate your support. Thank you.
Sincerely,
/s/ Elliot Maza
Chief Executive Officer & CFO
Safe Harbor Statements Regarding Forward Looking
Statements
The statements in this letter made by representatives of
Intellect Neurosciences relating to matters that are not historical
facts , including without limitation, those regarding future
performance or financial results, the timing or potential outcomes
of research collaborations or clinical trials, any market that
might develop for any of Intellect's product candidates and the
sufficiency of Intellect's cash and other capital resources are
forward-looking statements that involve risks and uncertainties,
including, but not limited to, the likelihood that actual
performance or results could materially differ, that future
research will prove successful, the likelihood that any product in
the research pipeline will receive regulatory approval in the
United States or abroad, or Intellect's ability to fund such
efforts with or without partners. Intellect undertakes no
obligation to update any of these statements. Readers are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as to the date hereof. Accordingly, any
forward-looking statements should be read in conjunction with the
additional risks and uncertainties detailed in Intellect's filings
with the Securities and Exchange Commission, including those
discussed in Intellect's Annual Report on Form 10-K (file no.
333-128226) filed on October 15, 2013 and Quarterly Report on Form
10-Q (file no. 333-128226), filed on May 20, 2014.
CONTACT: ir@intellectns.com
201-608 5101