Item
1. Business
Company
Overview
Immune
Therapeutics, Inc. (the “Company”) was initially incorporated in Florida on December 2, 1993 as Resort Clubs International,
Inc. (“Resort Clubs”). It was formed to manage and market golf course properties in resort markets throughout the
United States. Galliano International Ltd. (“Galliano”) was incorporated in Delaware on May 27, 1998 and began trading
in November 1999 through the filing of a 15C-211. On November 10, 2004, Galliano merged with Resort Clubs. Resort Clubs was the
surviving corporation. On August 23, 2010, Resort Clubs changed its name to pH Environmental Inc. (“pH Environmental”).
On
April 23, 2012, pH Environmental completed a name change to TNI BioTech, Inc., and on April 24, 2012, we executed a share exchange
agreement for the acquisition of all of the outstanding shares of TNI BioTech IP, Inc. On September 4, 2014, a majority of our
shareholders approved an amendment to our Amended and Restated Articles of Incorporation, as amended, to change our name to Immune
Therapeutics, Inc. We filed our name change amendment with the Secretary of State of Florida on October 27, 2014 changing our
name to Immune Therapeutics, Inc.
The
Company currently operates out of Orlando, Florida. In July 2012, the Company’s focus turned to acquiring patents that would
protect and advance the development of new uses of opioid-related immune- therapies, such as low dose naltrexone (“LDN”)
and Methionine [Met5]-enkephalin (“MENK”). The Company’s therapies are believed to stimulate and/or regulate
the immune system in such a way that they provide the potential to treat a variety of diseases. We believe our therapies may be
able to correct abnormalities or deficiencies in the immune system in diseases such as HIV infection, autoimmune disease, immune
disorders, or cancer; all of which can lead to disease progression and life-threatening situations when the immune system is not
functioning optimally.
In
October 2012, the Company formed TNI BioTech International, Ltd., a BVI company in Tortola, British Virgin Islands, which was
set up to allow the Company to market and sell LDN in those countries outside the U.S. in which we have been able to obtain approval
to sell the Company’s products.
In
August 2013, the Company formed its United Kingdom subsidiary, TNI BioTech, LTD (the “UK Subsidiary”). The UK Subsidiary
received approval to be considered a micro, small or medium-sized enterprise (“SME”) with the European Medicines Agency
(“EMA”) on August 21, 2013. The designation provides the UK Subsidiary with significant discounts when holding meetings
or submitting filings to the EMA. On September 19, 2013, the UK Subsidiary submitted a pre-submission package to the EMA regarding
Crohn’s Disease. The EMA granted the UK Subsidiary a meeting that took place on September 27, 2013. The UK Subsidiary is
eligible to benefit from the provisions for administrative and financial assistance for SMEs set out in Regulation (EC) No 2049/2005.
The Company will apply to obtain EMA benefits once funding becomes available.
In
December 2013, the Company formed a new subsidiary, Cytocom Inc., to focus on conducting LDN and MENK clinical trials in the United
States. In December 2014, the Company finalized the distribution of common stock of Cytocom Inc. to its shareholders. As part
of the transaction, the Company retained exclusive rights to all international patents, in-country approvals, formulations, trademarks,
manufacturing, marketing, sales, and distributions rights in emerging nations, including Africa, Central America, South America,
Russia, India, China, Far East, and The Commonwealth of Independent States (former Soviet Union). The Company will continue to
have access to existing clinical data as well as any new data generated by Cytocom Inc. during drug development. On December 8,
2014, the number of Cytocom Inc. shares of common stock that were issued to our shareholders totaled 113,242,522 shares. In connection
with the transaction, Cytocom Inc. issued 140,100,000 shares of its common stock to the Company, which gave the Company a 55.3%
stake in Cytocom Inc. on that date. In April 2016, the Board of Directors and a majority of shareholders of Cytocom approved a
reverse stock split of Cytocom’s outstanding common stock with one new share of stock for each twenty old shares of common
stock. Cytocom effectuated and finalized the reverse split in June 2016. At December 31, 2016, the Company’s equity interest
had been further reduced to 13%, by subsequent issuances of Cytocom common stock to shareholders in settlement of notes payable.
In
March 2014, the Company incorporated Airmed Biopharma Limited, an Irish corporation with an address in Dublin, Ireland, and Airmed
Holdings Limited, an Irish company domiciled in Bermuda. The Irish companies were set up to benefit from incentives granted by
the Irish government for the establishment of pharmaceutical companies (many of the world’s leading pharmaceutical companies
have located in Ireland), and so that the Company could take advantage of Ireland’s status as a member of the European Union
and the European Economic Area. An Irish limited liability company enjoys a low corporate income tax rate of 12.5%, one of the
lowest in the world. The Irish-domiciled company hopes to qualify for tax incentives for Irish holding/headquartered companies
and to benefit from the network of double tax treaties that reduce withholding taxes. TNI BioTech International, Ltd. will manage
our international distribution, using product that is manufactured in Ireland and elsewhere.
Today,
Immune Therapeutics is focused on the commercialization of affordable non-toxic immunotherapies focused on the activation and
rebalancing of the body’s immune system. Stimulating the body’s immune system remains one of the most promising approaches
in the treatment of Cancers, HIV, Autoimmune Diseases, inflammatory conditions and other opportunistic infections for chronic
often life-threatening diseases through the mobilization of the body’s immune system in Emerging Nations using existing
clinical data.
Cytocom
Inc, is a clinical-stage pharmaceutical company focused on the development of the first affordable non-toxic immunodulator for
the treatment of inflammatory diseases, immune-related disorders, and cancer and is responsible for the development of our patented
therapies with the FDA and EMA.
As
of this date, neither we nor our collaboration partners are permitted to market our drug candidates in the United States until
we receive approval of a New Drug Application from the FDA. Neither we nor our collaboration partners have submitted an application
for or received marketing approval for any of our drug candidates. Obtaining approval of an NDA can be a lengthy, expensive and
uncertain process.
Some
of the Company’s more substantial risks include, but are not limited to, its lack of operating history, its high needs for
capital, strict government regulation, risk of law suits from trial participants and otherwise, requirement for drug approvals
which may never occur, changes in the industry, failure of the Company’s products to make it through trials, reliance on
third parties to conduct trials and manufacture and distribute the Company’s drugs, and fierce competition. All of these
factors and more could affect investors’ investments in the Company.
The
Company’s technology platform is built surrounding two different immune therapies, IRT-103, low dose naltrexone herein sometimes
referred to as “LDN” or “Lodonal™” or IRT-101, herein sometimes referred to as Methionine-Enkephalin
or “MENK.” Both therapies have been decades in the making, over forty clinical trials run by institutions such as
the Pennsylvania State University Medical School at Hershey, University of Chicago, State University of New York, and Multiple
Sclerosis Center at UCSF. When the Company acquired the assets from the either the patent holder or licensee we also acquired
the rights to the clinical data, orphan drug designations and IRB. The Company has completed one trial in Nigeria for Lodonal™
and has a second trial underway for cervical cancer in Malawi. The Company has also submitted briefing packaged to the FDA for
a phase IIB/III trial for IRT-103 for Crohn’s Disease and is preparing a new briefing package for IRT-103 for pancreatic
cancer. In addition to the work in the United States we have been completing pre-clinical and clinical work for IRT-013 with Professor
Shan at the School of Immunology in China.
LDN
The Company has branded our Immediate Release Low Dose Naltrexone
as IRT-103
TM
when working with the FDA and EMA and trademarked our product in Africa as Lodonal
TM
. Lodonal™
with an immediate release 4.5mg formulation of Naltrexone is the brand name for our HIV treatment. LDN can be any formulation between
.05 and to 10mg and may or may not be immediate release and may be an oral or liquid formulation.
The
FDA approved naltrexone HCl in 1984 for the treatment of opioid addiction. The typical daily dosage for opioid addiction is 50mg
to 100mg, and 50mg tablets are available commercial. There is no FDA-approved use for naltrexone at any lower dosage then 50mg
for the treatment of any other medical conditions or treatments.
Where
high dose Naltrexone at 50mg to 100mg and Slow release Naltrexone between .01mg and 10mg and Immediate Release Naltrexone between
.01mg and 10mg share commonality” in categories of genes and are considered the same drug the difference in dosing and delivery
method (immediate release) difference in the overall response to the immune system. There is a difference in the cell patterns
of genes that are altered by the treatment of immediate release naltrexone verses high does naltrexone and slow release low naltrexone
between .01mg and 10mg. The differences are important because immediate release naltrexone between .01 and 10mg acts as an immunomodulator.
Since
immediate release naltrexone blocks the opiate receptors only for a few hours before it is naturally excreted, what results is
a rebound effect; in which both the production
and
utilization of methionine-enkephalin or opiate growth factor are increased.
Once the immediate release naltrexone has been metabolized, the elevated endorphins produced as a result of the rebound effect
can now interact with the more sensitive and more-plentiful receptors and assist in regulating cell growth and immunity. There
is no rebound effect with either high dose naltrexone or slow release naltrexone and it is the rebound immunomodulatory effect
that effects the treatment of treating patients suffering from human immunodeficiency virus (HIV) acquired immune deficiency syndrome
(AIDS, autoimmune disease, opportunistic infections, cancer, inflammation, and neurodegenerative diseases
It
has been demonstrated in trials that in the presence of LDN, the numbers of T-cells, both CD4+ helper T cells and CD8+ cytotoxic
T cells, may increase by more than 300%.
The
Mechanism of Action of immediate release LDN is not fully understood at this time, but based on clinical work there are three
current theoretical models for how immediate release LDN works in autoimmune disease, inflammatory disease, cancer and HIV/AIDS.
Immediate
Release LDN, which is different from either slow or extended release LDN, works by triggering a number of receptors including
(1) the opioid and T Cell receptors on immune cells which activate or balance various cells of the immune system, and (2) tolling
receptors to shift Th1 (pro-inflammatory) to Th2 (anti-inflammatory) which is critical when dealing with autoimmune and inflammatory
disease. (1) Increases the production of cytokines specifically an endorphin referred to as Methionine-enkephaline or OGF.
These
compounds then produce pain relief similar to opiates. The body responds to these compounds by inhibition of cell growth, promoting
healing, and reducing inflammation, all in an effort to restore homeostasis. IRLDN also causes increase in OGF receptor.
Regulatory
applications submitted, if any, to commence clinical trials and the current status of such applications.
Clinical
trials under the INDs are anticipated to be conducted in the United States and the EU.
IND
#
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Indication
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Product Name
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Sponsor
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Status
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34,442
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HIV/AIDS
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MENK
(IRT-101)
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Dr.
Ronald Herberman and Dr. Bernard Bihari
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Inactive;
filed in 1997 (1)
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67442
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Crohn’s Disease
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Naltrexone HCL
(IRT-103)
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Dr. Jill Smith
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Active; filed May
31, 2003 and filed with the FDA in March, 2013
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50987
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Pancreatic Cancer
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MENK (IRT-101)
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Dr. Jill Smith
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Active; was filed
with the FDA in March, 2013
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(1)
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Currently
inactive but will soon be reactivated and transferred to TNIB.
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Immune
Therapeutics, Inc. Drug Development Plan
Nigeria
Immune
Therapeutics Inc., through its wholly owned subsidiary TNI BioTech Intl., completed a 90-day bridging trial for the treatment
of patients with HIV/AIDS in Nigeria. The National Agency for Food and Drug Administration and Control (NAFDAC) approval is based
on previous clinical data and the Nigeria Bridging Trial was a single center, open labeled, randomized, bridging study. The trial
consisted of a total of one hundred and fifty [150] patients of both genders between the ages of 18-60, each of whom was infected
with the human immunodeficiency virus (HIV).
The
90-Day Bridging Trial was undertaken at the State Specialist Hospital in Asubiaro, Osogbo, Osun State, Nigeria and the primary
objective of this Bridging Trial was to confirm that Lodonal
TM
has a beneficial effect on the immune system of immune
deficient patients and that it is safe. The trial separated the patients into a Control (placebo) Group and a Treatment Group
(which was administered Lodonal
TM
). The efficacy of increasing CD4 count [cell/mm
3
] between Day-1 and Day-90
by at least 25% was set as the criteria for demonstrating beneficial effect on the immune system. Safety was demonstrated through
quality of life assessment and vitals both of which were not adversely affected. Treatment Group patients were given a daily dose
of 4.5-mg/kg of Lodonal™.
The
results yielded an average increase of 44% increase in CD4 count in the Lodonal Treatment Group compared to an 11% increase in
the Control Group. Additionally, there were no reported opportunistic infections and no toxicity levels uncovered. Liver function
remained normal and there was no negative impact on other systems based on blood results. No sleep disturbance or vivid dreams
were present enough to justify trial discontinuation. No appreciable adverse CNS, renal, cardiac, hepatic, musculoskeletal, hematopoietic
side effects were present.
NAFDAC
has issued approval of Lodonal™as an immune system regulator in the management of HIV patients and the company is now in
the process of completing the registration to import the drug into Nigeria.
Malawi
The
Company, through its wholly owned subsidiary TNI BioTech International, received permission from the Pharmacy, Medicines and Poisons
Board (PMPB) and The College of Medicine; University of Malawi to initiate a clinical trial for a Single Visit Approach to Cervical
Cancer Prevention in the Republic of Malawi. The PMPB issued drug approval to import the drug in 2015.
The
Malawi Clinical Trial’s primary endpoint includes Safety, Acceptability, and Feasibility of a Single Visit Approach to Cervical
Cancer Prevention in patients. (Trial number: VIA-LDN-401 -0 I). The secondary objectives’ is to determine life extension;
to improve the immune system of HIV and Cancer positive patients by starting treatment with LDN (“Lodonal
TM”)
and to ensure marked improvement in Clinical benefit based upon parameters that reflect the overall well- being of the patient,
including Pain control, performance status, and body weight under the supervision of Dr. Frank Taulo, Dr. Gladys Gadama, Dr. Effie
Chipeta as Principal Investigators. The recruitment of study participants, testing and follow up is still on-going. The first
evaluation report from the doctors involved is expected by the end of April 2017 as per the study protocol
.
The
Company intends to initiate a number of additional trials in Africa in the next 6 months, which will include trials as an adjunct
to chemotherapy in Kenya and Ghana and HIV/AIDS in Malawi.
FDA
and EMA Development Plan for Cytocom, Inc.
After
the completion of the spin-off of our subsidiary, Cytocom, Inc., to shareholders, all work with the FDA, EMA or any of the G7
countries will be under the supervision of Cytocom Inc. However, the Company plans to submit all trials and fees on Cytocom Inc.’s
behalf until such time as Cytocom, Inc. is sufficiently funded, as all funding is currently being provided through the Company.
Nonetheless, the trials will be supervised by Cytocom, Inc. following submission by the Company. At this time the INDs have not
been transferred to Cytocom; however they will be transferred before the trials begin. Studies and trials in countries that are
not part of the G7 are being conducted directly by the Company.
Our
lead product candidate is IRT-103 ™, a first-in-class, proprietary fixed-dose therapy entering Phase 2b clinical trials
for the treatment of adult and pediatric Crohn’s disease where we have orphan drug designation. The Company acquired all
of the clinical data from Dr. Jill Smith in conjunction with the acquisition of the license. The Company had no direct involvement
in the trials.
Crohn’s
disease affects over 1.6 million adults in the United States and an estimated 80,000 children. Data from the Phase 2a clinical
trial indicate that Lodonal™ was generally well-tolerated therapy that can provide promise for the treatment of Crohn’s
disease. The Department of Medicine at The Pennsylvania State University, (PSU) College of Medicine, GI Medicine were responsible
for three of the Crohn’s trials that were part of our briefing package to the FDA.
PSU
researchers have demonstrated in a mouse model of Crohn’s disease from with dextran sodium sulfate (a chemically induced
colitis) that opioid receptor blockade by a low dose of naltrexone resulted in less weight loss, lower disease activity index
scores and less histological evidence of inflammation when compared to controls (Matters, GL
et al
., 2008). Furthermore,
the researchers demonstrated that tissue inflammatory cytokine mRNA was reversed to baseline levels in the colons of mice treated
with naltrexone.
A
Phase 2 trial with low-dose naltrexone was completed on patients with Crohn’s Disease and the objective of the trial was
to determine the role of endogenous opioids and opioid antagonists in healing and repair of tissues. Eligible subjects with histologically
and endoscopically confirmed active Crohn’s disease activity index (CDAI) score of 220–450 were enrolled in a study
using 4.5 mg naltrexone per day. Infliximab was not allowed for a minimum of 8 weeks prior to study initiation. Other therapy
for Crohn’s disease that was at a stable dose for 4 weeks prior to enrollment was continued at the same doses. Patients
completed the inflammatory bowel disease questionnaire (IBDQ) and the short-form (SF-36) quality of life surveys and CDAI scores
were assessed pre-treatment, every 4 weeks while on therapy and 4 weeks after completion of the study. The drug was administered
by mouth each evening for a 12-week period. Seventeen patients with a mean CDAI score of 356 °æ 27 were enrolled. CDAI
scores decreased significantly (P = 0.01) with LDN, and remained lower than baseline 4 weeks after completing therapy. Eighty-nine
percent of patients exhibited a response to therapy and 67% achieved a remission (P < 0.001). Improvement was recorded in both
quality of life surveys with LDN compared with baseline. No laboratory abnormalities were noted. The most common side effect was
sleep disturbances, occurring in seven patients. The trial concluded that LDN therapy appears effective and safe in subjects with
active Crohn’s disease.
Another
Phase 2 trial therapy was conducted, entitled, Therapy with the Opioid Antagonist Naltrexone Promotes Mucosal Healing in Active
Crohn’s Disease: A Randomized Placebo-Controlled Phase 11 trial at the Department of Medicine, The Pennsylvania State University,
College of Medicine, GI Medicine [Smith, JP.
et al,
2011]. Aims – A randomized double-blind placebo-controlled study
was designed to test the efficacy and safety of an opioid antagonist for 12 weeks in adults with active Crohn’s disease.
The phase 2A trial had 3 major endpoints for the study including: 1) Clinical improvement based upon the Crohn’s Disease
Activity Index (CDAI) Score, 2) Mucosal healing by colonoscopy, and 3) Safety. The human studies were done with FDA approval under
IND 67442. Forty subjects with active Crohn’s disease were enrolled in the study. Randomized patients received daily oral
administration of 4.5-mg naltrexone or placebo. Providers and patients were masked to treatment assignment. The primary outcome
was the proportion of subjects in each arm with a 70-point decline in Crohn’s Disease Activity Index (CDAI) score. The secondary
outcome included mucosal healing based upon colonoscopy appearance and histology. Eighty-eight percent of those treated with naltrexone
had at least a 70-point decline in CDAI scores compared to 40% of placebo-treated patients (p = 0.009). After 12 weeks, 78% of
subjects treated with naltrexone exhibited an endoscopic response as indicated by a 5-point decline in the Crohn’s disease
endoscopy index severity score (CDEIS) from baseline compared to 28% response in placebo-treated controls (p = 0.008). 33% achieved
remission with a CDEIS score <6, whereas only 8% of those on placebo, showed the same change. Fatigue was the only side effect
reported that was significantly greater in subjects receiving placebo. The study concluded that Naltrexone improves clinical and
inflammatory activity of subjects with moderate to severe Crohn’s Disease compared to placebo-treated controls. Strategies
to alter the endogenous opioid system provide promise for the treatment of Crohn’s Disease.
A
pilot study was completed entitled Safety and Tolerability of Low-dose Naltrexone Therapy in Children With Moderate to Severe
Crohn’s Disease trial at the Department of Medicine, The Pennsylvania State University, College of Medicine, GI Medicine
Smith, (JP.
et al,
2013). The aims of this study were to evaluate the safety and tolerability of an opioid antagonist,
naltrexone, in children with moderate to severe Crohn’s disease. The pilot clinical trial was conducted in children with
moderate to severe Crohn’s disease. Fourteen subjects with a mean age of 12.3 years (range, 8 to 17 y) were enrolled. Children
were randomized to placebo or naltrexone (0.1 mg/kg) orally for 8 weeks followed by open-labeled treatment with 8 additional weeks
of naltrexone. Safety and toxicity were monitored by physical examinations and blood chemistries. Clinical activity was assessed
by the Pediatric Crohn’s Disease Activity Index (PCDAI) and Quality of life was monitored by the Impact III survey. The
results indicated that oral naltrexone was well tolerated without any serious adverse events in children with moderate to severe
Crohn’s disease. PCDAI scores decreased from pre-treatment values (34.2Å 3.3) with an 8-week course of naltrexone
therapy (21.7Å 3.9) (P=0.005). Twenty-five percent of those treated with naltrexone were considered in remission (score
r10) and 67% had improved with mild disease activity (decrease in PCDAI score by at least 10 points) at the end of the study.
Systemic and social quality of life improved with naltrexone treatment (P=0.035). The study concluded that naltrexone therapy
seems safe with limited toxicity when given to children with Crohn’s disease and may reduce disease activity.
Food
And Drug Administration
There
are three types of meetings with the FDA: Type A Meeting – is a meeting that is “immediately necessary for an otherwise
stalled drug development program to proceed.” This type of meeting refers to meetings to resolve disputes, talk about clinical
holds, special protocols. Type B Meetings are identified as (1) pre-IND meetings, (2) certain end of Phase I meetings, (3) end
of Phase 2/pre-Phase 3 meetings and (4) pre-NDA/BLA meetings. A type C Meeting is any other kind of meeting.
The
Company attended a Type C meeting with the FDA June 26, 2013 with the Division of Gastroenterology and Inborn Errors Products
regarding the clinical and regulatory aspects of the proposed Phase IIB/III development program and future 505(b)(2) application
for Low Dose Naltrexone (LDN) in the treatment of adults and pediatric patients with Crohn’s Disease. In principal the FDA
agreed that a 505(b)(2) application would be an acceptable approach at FDA recommends that sponsors considering the submission
of an application through the 505(b)(2) pathway consult FDA’s regulations at 21 CFR 314.54, and the draft guidance for industry
Applications Covered by Section 505(b)(2) (October 1999). The Company is planning to submit a request for “breakthrough
technology” designation. If this request is granted, what impact could it have on minimizing the Phase 3 study design(s)
and the package needed for filing the 505(b)(2) application.
The
Company retained the services of Cote Orphan to provide a new briefing package and work with the Division for Breakthrough Therapy
Designation is granted to determine the most efficient development program for your product and proposed indication. The Company
notes that a 505(b)(2) NDA will need to be submitted with all the same components that a regular NDA requires. The Company hopes
to submit our briefing package to the FDA because CDAI was previously been accepted by the FDA for phase 3 trials in CD, FDA has
reconsidered the use of the CDAI as a measure of clinical response to therapeutic intervention and we our new trial design endpoint
will include endoscopies to show true mescal healing. The Company delayed submitting our new briefing package to the FDA as a
number of changes were under consideration at the FDA in connection with 505(2)(b) pathway drug development. The Company has recently
begun to make final changes to the briefing package, and expects to present its new briefing package to the FDA before the end
of the third quarter 2017, with a meeting shortly thereafter.
Anticipated
developmental timelines for Cytocom, Inc.
Guidance
meeting held with FDA regarding pediatric and adult studies provided feedback and based on the new submission of a briefing package
we anticipate presenting final protocols for both adult and pediatric trial.
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Current
development plan includes:
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Two
adult studies planned:
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Double-blind,
randomization, 24-week study of LDN vs. Placebo at 4.5mg
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Double-blind,
randomization 12-week multi-dose study including 4.5mg
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Both
studies will roll-over to an open label
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Studies
to commence Q1 2017
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Double-blind
randomization, 24 week study of LDN vs. Placebo at
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Both
studies will roll-over to open label
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Studies
to commence Q1 of 2017
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Competitive
Advantage
The
Company believes many of the same advantages of our therapies apply to both the US market as well as the African market. Lodonal
TM
could provide the first affordable, non-toxic approach for treatment of immune dysfunction, cancer and d chronic inflammatory
state.
Some
of the Competitive Advantages and Benefits of Lodonal
TM
include the following:
Lower
production costs and sales price of treatments
Today
the majority of the drugs under development are both more expensive and more toxic. We do not believe this is the right way to
move forward. Biologic agents cost between $12,000 and $150,000 a year.
Lodonal
TM
/
IRT-103 can be manufactured and delivered in Emerging Nations for under $.90 cents a day and we estimate a price of $3,600 dollars
a year in developed country underwritten to $10 to $15 dollars per month and when not underwritten the company will provide to
patients for $30 dollars a month.
Lodonal™
should be able to substantially reduce health care costs for a number of reasons:
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IRT-103
and Lodonal™ can provides a new, non-toxic inexpensive method of medical treatment
by mobilizing the natural defenses of one’s own immune system. It can be used as
a stand-alone therapy or an adjunct to existing immunosuppressive therapies by reducing
the toxic side effects of immunosuppressive drugs.
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Patients
who are taking immunosuppressant drugs should see their doctor on a regular basis to
monitor the patient for unwanted side effects.
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Lodonal™
does not require the medical supervision of antiretroviral or immunosuppressive therapies.
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Immunosuppressive
drugs are very powerful and can cause such serious side effects as high blood pressure,
kidney problems, malignancies and liver disorder. Immunosuppressant drugs lower a person’s
resistance to infection and can make infections harder to treat. The drugs can also increase
the chance of uncontrolled bleeding.
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Lodonal™
has no toxic side effects as it is an immunomodulator and activates and re-balances the
immune system.
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HIV
as a Chronic Disease: For reasons that remain to be elucidated, antiretroviral-treated
HIV disease is associated with a new constellation of problems, generally referred to
as “non-AIDS morbidity”, and, in the popular press, “premature aging”
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Health
care systems in those regions where most people with HIV reside (e.g., sub-Saharan Africa)
were designed to provide acute care only and are ill equipped to provide the chronic
care, which is now required to manage HIV.
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Lodonal
as an immunomodulator has a way of helping what is now referred to as “non-AIDS
morbidity”, and, in the popular press, “premature aging”.
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Blocks
release of proinflammatory cytokines including Interleukins IL6 and IL12, TNFα,
NF-ĸB (nuclear factor kappa light chain enhancer of activated B cells)
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Modulates
T and B lymphocyte production and cause Shift from Th1 (pro-inflammatory) to Th2 (anti-inflammatory)
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Affects
microglia – macrophages/ 1
st
line of immune defense in CNS; normally
quiescent;
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Cell
death, inflammation, infection à Activated microglia à increase in proinflammatory
cytokines, excitatory amino acids, and nitric oxide
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(NO);
Increased NFkB à additional proinflammatory cytokines that act on neurons to create
pain, fatigue, etc.; Naltrexone suppresses microglial activation;
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Low
dose naltrexone (LDN) enhances maturation of bone marrow dendritic cells (BMDCs)
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Reduces
inducible nitric oxide synthase activity à decreased peroxynitrite formation à
glutamate transporters inhibited
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Excitatory
neurotoxicity of glutamate on neuronal cells and oligodendrocytes is prevented
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Apoptosis
of oligodendrocytes reduced
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Downregulates
NFk2, inflammatory cytokines (TNF, IL-1, IL-6)
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These
are all immune system changes associated with aging, which
potentially
can be improved by Lodonal, which will improve the quality of life for HIV/AIDS patients
and reduce the health care burden on the medical system.
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Avoiding
contact with people who have infections is also important. In addition, people who are
taking or have been taking immunosuppressant drugs should not have such immunizations
as smallpox vaccinations without consulting their physician. Because their resistance
to infection has been lowered, people taking these drugs might get the disease that the
vaccine is designed to prevent. People taking immunosuppressant drugs should avoid contact
with anyone who has had a recent dose of oral polio vaccine, as there is a chance that
the virus used to make the vaccine could be passed on to them.
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Lodonal™
has no toxic side effects.
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Lodonal
TM
does not compromise the immune system.
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o
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Indirect
Cost of Immunosuppressive drugs
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HIV/AIDS
still ranks 5th among the 14 diseases, with indirect per person costs ranging from $890
to $2663 in Zaire and from $2425 to $5903 in Tanzania indirect costs are roughly 95%
of the total costs which are not covered by donor dollars.
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The
total economic burden of CD was $10.9-15.5 billion in the United States and euro 2.1-16.7
billion of which is approximately 30% to 50% are indirect cost.
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Lodonal™
has been shown to reduce the number of opportunistic infections with HIV/AIDS
|
Lodonal™
can improve compliance. When used correctly, antiretroviral therapy (ART) is effective. However, according to recent studies,
ART regimens require 70–90% adherence in order to be effective. Sustaining adherence to ART over the long term requires
accurate and consistent monitoring, and this is a particular challenge for countries in sub-Saharan Africa.
|
o
|
Lodonal
is a simple, once-daily regimen, which can be taken with or without a food,
|
|
o
|
Occasional
non-compliance will not affect the overall success therapy.
|
|
o
|
Does
not require the medical supervision of antiretroviral or immunosuppressive therapies
(people will not lose time from work).
|
|
o
|
Compliance
is further challenged by various social and clinical obstacles, where inadequate suppression
of viral replication by ART are resulting due to poor adherence to therapy, low potency
of the antiretroviral regimens and viral resistance to antiretroviral medications.
|
|
o
|
Estimates
suggest that the average rates of non-adherence to antiretroviral therapy range from
50% to 70%.
|
|
o
|
Due
to lack of compliance, the transmissibility of the antiretroviral resistant viruses from
person to person further compounds the problem as a clinical and public health challenge.
Which continues to be one of the major problems with treatment around the world.
|
Our
lead product candidate with the FDA is IRT-103 and is posed to initiate a pivotal phase IIB/III clinical trial for moderate-to-severe
adult Crohn’s disease as well for pediatric Crohn’s disease, an orphan indication. We will need to complete both a
Phase 2B and Phase 3 clinical trial for both Pediatric and Adult Crohn’s Disease for IRT-103 before we can obtain final
approval to market the drug in the U.S. from the FDA.
The
Company seeks to benefit patients with chronic and often life-threatening diseases through the stimulation and/or regulation of
the body’s immune system. Using our patented immunotherapy, management believes that the Company’s products, technologies
and patents will harness the power of the immune system to improve the treatment of cancer, HIV/AIDS, autoimmune diseases, opportunistic
infections and inflammatory disorders.
Recent
Accomplishments
The
Company obtained drug approval from NAFDAC (National Agency for Food and Drug Administration and Control) in April of 2016. In
May the Company began the regulatory process with NAFDAC for marketing authorization. There were a number of steps the Company
is required to complete before marketing approval will be granted despite the current approval of Lodonal™ as a treatment
of immune deficiency by NAFDAC.
The
Company is currently completing the regulatory process to begin marketing the drug in Nigeria. Beginning in July of 2016 NAFDAC
began requiring a manufacturing site inspection before authorizing the marketing of any new products, including Lodonal™.
On
October 3, 2016 the Company received a letter from NAFDAC requesting a site visit of our manufacturing facility as the final step
in regulatory marketing approval. Upon completion of the site visit the Company expects to receive marketing approval shortly
thereafter.
The
Company has been informed that the Nigerian approval allows the company to use the approval to be “fast tracked” for
approval in the Economic Community of West African States, a regional group of sixteen countries, of which Nigeria is a member.
The countries include Benin, Burkina, Faso, Cote d’Ivoire, Gambia, Ghana, Guinea-Bissau, Liberia, Mali, Nigeria, Senegal,
Sierra Leone, and Togo. These countries play a major role in our Africa development strategy, as they are part of the “Test
and Treat Program” for West and Central Africa. While the trend in international health funding for HIV/AIDS and ART (Antiretroviral
Therapy) and the policies that drive the funding, has been to focus on high-burden countries and HIV ‘hotspots’ in
Sub-Saharan Africa, most countries in the region classified by the UN as the West and Central Africa (WCA) region have been neglected.
In the WCA region, 76% of those who need antiretroviral therapy – a total of five million people – are still awaiting
treatment. The unmet needs in most of these countries are slipping further out of focus and we believe that Lodonal™ could
help the people of West and Central Arica.
In
September of 2016, the company retained the services of GLOBALMEDLINE SARL in Senegal to assist the drug registration of Lodonal™
in Senegal for HIV/AIDS and Cancer. The filing in Senegal is part of the company’s program to register Lodonal™ throughout
the francophone (French-speaking) countries in Africa using our approval in Senegal to fast track the process.
The
Company is currently in the process of filing in Kenya, Ghana, Liberia, Mali and Uganda. We will be adding additional countries
in 2017.
In
September of 2016 the Company signed a consulting agreement with the Honorable Joyce Banda as a member of the Champions for an
AIDS Free Generation. His Excellency Festus Mogae, the Former President of the Republic of Botswana, first launched The Champions
in 2008. The Champions program works to ensure that all children are born free from HIV in Africa and that all people have access
to quality HIV prevention and treatment services.
The
Company has been assigned three provisional patent applications: No. 62/296,759, a Method for Inducing a Sustained Immune Response;
No. 62/379,272, a Method for Treating and Preventing Protozoan Infection; and No. 62/450,635, Methods and Compositions Useful
for Treating Cancer Application. The Company expects to file additional patent applications in the coming months. Our intellectual
property portfolio includes biotech assets acquired either through acquisition or exclusive licensing. The Company converted the
provisional patent for method for inducing immune response into a US patent, and a PCT application was filed on February 17, 2017
under number PCT/IB2017/000124.
The
Company has retained the services Coté Orphan to assist in obtaining FDA and EMEA approvals. Cote Orphan is a boutique,
full-service, lab-to-market regulatory group focused on Orphan Drugs. Team Coté is led by Dr. Tim Coté, the former
Director of the FDA’s Office of Orphan Products Development (OOPD). Dr. Cote is currently working with the Company to file
a briefing package and final protocols for adult and pediatric Crohn’s Disease. The Company expects to finish this process
by the end of the second quarter of 2017. The Company has delayed its request for a Type B meeting with the FDA on Crohn’s
Disease, as the FDA is in the process of making changes in a number of areas as it applies to both 505(2)(b) pathway development
and paediatric trials. The Company is preparing its final submission and expects to have the briefing package ready in the next
90 days.
The
Company recently submitted its application for drug approval in Senegal and Kenya, and expects to have responses from the regulatory
authorities by the end of the fourth quarter of 2017.
The
Company’s Board has authorized continued discussions with a number of potential partners in Far East as well as discussion
with drug development partners in both the US and EU.
MENK
MENK,
also herein referred to as IRT-101, opiate growth factor or OGF, and Methionine-enkephalin is a synthetic peptide that activates
natural killer (“NK”) cells of the immune system to seek and destroy cancer cells of the immune system to seek and
destroy cancer cells. IRT-101 is a small peptide normally made by nerve cells and immune cells.
Further
work in the laboratories of Plotnikoff, et al. has shown that daily injection of enkephalins into mice for 1 week resulted in
increases in the size and weight of the thymus gland and a concomitant decrease in size and weight of the spleen. These observations
led the same workers to study the antitumor action of the enkephalins. Mice carrying L 1210 tl.~mor cells were treated with methionine
and leucine enkephalins, and their survival was compared to placebo treated controls.
The
survival of the enkephalin-treated mice was longer than that of controls. Such observations in the animal model prompted these
and other researchers to evaluate the immune potentiating effects of enkephalins and endorphins in humans. Plotnikoff and his
group found that enkephalins and endorphins stimulated active rosettes in humans. Similar results were obtained by Gilman, et
al., and Wybran, et al. This work was expanded further to study the effect of enkephalins on an immunosuppressed population of
individuals. Lymphocytes from a group of lymphoma patients were treated with the enkephalins in vitro and then evaluated for rosetting
with sheep red blood cells (SRBC’s.) It was found that both methionine and leucine enkephalins enhanced the ability of these
cells to form T cell rosettes when compared to controls. Methionine enkephalin exhibited this immunopotentiation at a concentration
as low as 10-14 mg/ml.
Studies
have been undertaken in laboratories to investigate the effects of enkephalins on natural killer (NK) cell activity. The NK cells
are a population of cells that can selectively lyse certain tumor cells in vitro without prior sensitization. This is a heterogeneous
population of cells present in a variety of animals and humans. It is presently believed that these cells play a major role in
protective surveillance against cancer. Anticancer potential of many of the immune activators has been measured by their ability
to boost the (NK) defenses of the host. Results to date indicate enkephalins are capable of enhancing NK activity in vitro from
normal volunteers and more importantly from cancer patients, some of whom have been heavily pretreated with chemotherapy.
Three
separate groups have now reported in vivo clinical findings with the use of methionine enkephalin in patients with AIDS and symptomatic
HIV infection. A Low Dose Study (10 micrograms/kg l.V.3 times/wk. for 12 weeks) Zunich and Kirkpatrick administered 10 μg/kg
MEK intravenously three times weekly for up to 12 weeks to seven patients with various stages of HIV infection. This trial was
conducted prior to the advent of potent antiretroviral therapy. In evaluating cellular immunity, the authors stated that MEK appears
to temporarily enhance selected immune responses in patients infected with HIV. However, in this study, the results were neither
clinically, nor statistically significant. There were no adverse reactions or evidence of toxicity.
Moderate-High
Dose Studies (20, 25, 40, 50, 60, 80, and 100 micrograms/kg 1.V. 1 to 3 times/week for one to 24 months) have also been conducted.
The preliminary clinical studies of MEK in symptomatic HIV infection, AIDS and cancer patients (30, 32, 45, 46, 47, 48 and 49)
involved individualized treatment schedules with doses ranging up to 100 μg/kg 3x/week and durations extending beyond one year.
There were no serious adverse reactions attributed to treatment for any of the patients studied. All reactions were transitory
and appear to have been directly related to the infusion.
Eight
Kaposi’s Sarcoma Patients were administered MEK (10-100 μg/kg 1-3 x week for 1-24 months). There were no serious adverse
reactions attributed to treatment for any of the patients studied.
Symptomatic
HIV Infection (Treatment one month up to 24 months, MEK administered at doses of 20-100 μg/kg 1-3x week). In a pilot study
in these patients, Dr. J. Wybran in Brussels, Belgium indicated that there may be immunological improvements with MEK treatment.
No adverse reactions attributable to MEK treatment were observed.
Asymptomatic
HIV+ patients. Four asymptomatic HIV+ patients were treated with methionine enkephalin (60 μg/kg i.v.) once a week for 1-4
months. The monoclonal marker Leu 19 (CD56) for natural killer and killer cells was found to be increased in all four patients
(18/24 discrete measures). No adverse reactions to methionine enkephalin were reported. It appears, based on the above data, that
a new group of clinically useful immune modulators called enkephalins are emerging. Their in vitro magnitude of potency is at
least 106 - 107 greater than that of interferon, interleukins and thymus hormones. Stimulatory effects were observed at concentrations
as low as 1012- 10-14 mg/ml (33-37). Such characteristics make endogenous peptides ideal for therapeutic trials. The following
additional facts are of interest in this regard: a) Methionine enkephalin stimulates humoral immunity (at low doses) and chemotaxis;
b) Methionine enkephalin selectively stimulates production of cytotoxic T cells. Cytotoxic T cells (CD3, CD8) have been reported
to inhibit reverse transcriptase of HIV; c) Subacute safety studies in rats and dogs at doses up to 25 mg/kg resulted in no toxicity;
d) Human safety studies using doses up to 250 micrograms/kg resulted in no toxicity; e) Enkephalins may in fact be the natural
mediators for the endogenous release of both interleukin 2 (32, 44), gamma interferon (32, 44) and IL-12.
Prior
clinical studies
Eight
(8) Phase I and four (4) Phase II clinical trials completed in cancer and HIV/AIDS between the years 1997-2015.
Notably
promising data in HIV/AIDS and Cancer with strong efficacy signals:
123
adults in Phase I/II trials in cancer Between the years 1997-2014
250
adults in Phase I/II for HIV/AIDS Between the years 2000 -2014
Our
first acquisition was the patents and intellectual property of Dr. Nicholas P. Plotnikoff and Professor Fengping Shan in 2012.
While Dr. Plotnikoff was with Oral Roberts University, he was a member of the team that developed and patented the specific application
of MENK as a treatment for cancer, HIV/AIDS, and infectious diseases. All of the clinical data generated by Dr. Plotnikoff has
been included in our briefing package to the FDA.
Dr.
Nicholas Plotnikoff initiated and completed Phase I and Phase II clinical studies of MENK under Investigational New Drug (“IND”)
protocols filed with the U.S. Food and Drug Administration (“FDA”). In these clinical trials, MENK has been shown
to reduce the symptoms of early AIDS and AIDS Related Complex (“ARC”), a condition also known as pre-AIDS which includes
symptoms such as fever, diarrhea, weight loss, swollen lymph nodes and herpes. In addition to the therapeutic effects of the treatments,
trial reports indicated an elevation in mood of the patients treated (Bihari, B., Plotnikoff, N., Freeman, K., Dowling, J., Duguid,
C., and Altmann, E., ’‘Methionine Enkephalin in the Treatment of ARC,’’ Seventh Int. Conf. on AIDS, Florence,
Italy, 1991).
A
double-blind, randomized controlled Phase II study of 46 patients was performed with ARC (Bihari B, Plotnikoff NP. Methionine
Enkephalin in the Treatment of AIDS-Related Complex.
CRC Press, LLC; Cytokines: Stress and Immunity
. 1999; 77-91) that
was designed to measure the effect of a regular weekly dosing schedule of MENK at two different dose levels. The study involved
randomized assignment to three arms: (i) patients on the first arm received weekly doses of 60µg/kg of MENK (low dose) for
12 weeks; (ii) patients on the second arm received a weekly infusion of 60µg/kg of MENK (low dose) for 2 weeks, followed
by 10 weekly doses of MENK at 125µg/kg (high dose); and (iii) the patients on the third arm received a placebo intravenously
for 12 weeks.
Product
Development Status
●
|
Phase
I Trial Pancreatic was completed in 2007 – Department of Medicine, The Pennsylvania State University, College of Medicine,
GI Medicine.
|
●
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Dose
is 250-300 μg/kg IV weekly.
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●
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Showed
minimal side effects.
|
●
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Determine
the maximum tolerated dose standard 3+3 regimen starting at 25 μg/kg.
|
●
|
Safety
and toxicity of OGF (paresthesia, hypotension at 250μg/kg over 30 min).
|
●
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Compare
route of administration (IV vs. SC); solubility issues with sc in low volume.
|
●
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Pharmacokinetic
assays; [Met
5
]-enkephalin by RIA.
|
●
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Examine
safety of chronic administration.
|
Phase
I combination trial OGF & Gemcitabine
Evaluate
the safety and toxicity of the combination of OGF biotherapy and gemcitabine chemotherapy in patients with advanced pancreatic
cancer / pharmacokinetics. N =20
Examine
the role of OGF given with gemcitabine on, patient survival.
Patients
were treatment naïve.
All
of the symptoms and possible side effects of MENK/OGF therapy such as nausea, constipation, dry mouth, flushing, diarrhea and
abdominal pain thought to be due to the advanced cancer rather than the treatment.
The
two side effects thought to be due to the MENK/OGF therapy include the transient paresthesia or tingling at the beginning of the
infusion and the hypotension.
The
survival of patients with metastatic pancreatic cancer was increased to almost 9 months compared to standard historical medications
used.5 FU only lengthens the survival to 4.5 months and gemcitabine to 5.8 months.
Phase
II Trial Pancreatic Cancer
In
our larger Phase 2 study when we compared survival of OGF patients to 266 untreated control subjects, the survival was increased.
(Department of Medicine, The Pennsylvania State University, College of Medicine, GI Medicine)
|
●
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Funded
by FDA Orphan Drug Program
|
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●
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Treatment
OGF 250mg/kg over 45 min weekly
|
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Open-labeled,
untreated controls
|
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Primary
endpoint: Survival
|
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Secondary
endpoints: efficacy, QOL
|
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25
OGF-treated subjects & 166 controls
|
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Eligible
patients:
|
|
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Unresectable
pancreatic cancer
|
|
●
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Failed
standard therapy
|
|
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Karnofsky
status 50%
|
Most
importantly, there were no changes in the blood laboratory tests with OGF. Compared to standard chemotherapy that reduces the
blood count from bone marrow toxicity, the blood count remained stable with OGF.
One
of the most important features of OGF therapy in cancer patients with advanced metastatic disease is the marked improvement in
Clinical Benefit. Clinical benefit is based upon parameters that reflect the overall well-being of the patient, including Pain
control, performance status, and body weight. 53% of those receiving OGF experienced a clinical benefit compared to patients treated
with standard chemotherapy.
The
Company is planning to rely on the following available information and historical data to support the initiation of the Phase
3 study and filing of the NDA:
1.
Clinical safety data from studies conducted under this IND (50,987 studies NIH# R03
CA80646,
NCT00109941, and IRB Protocol No. 26336;
2.
Clinical safety data from studies conducted under IND 34,442 (MENK for the treatment of AIDS/ARC and cancer patients and normal
healthy volunteers
Toxicology
Studies completed by Baxter and Travenol 1984 and 1985
Published
literature as summarized in this package (to provide nonclinical pharmacology and additional safety data). To support the NDA
filing, we are also planning to conduct the following additional study:
Phase
2b study will run in parallel with the Phase 1 PK and 3 month GLP toxicology studies.
|
●
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Population
to be studied: Patients on first line therapy with local advanced or metastatic disease
|
|
●
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The
Company is running the GLP toxicology at an FDA approved facility in China and those
studies will be completed before the end of Q4 2017.
|
|
●
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The
company anticipates a database of 300 – 600 patients at the time of NDA filing.
|
|
●
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The
FDA stated that a genotoxicity study will not need to be conducted
.
|
|
●
|
The
MTD has been established previously under this IND in pancreatic cancer patients
|
|
●
|
Due
to safety data collected to date and established MTD, TNI BioTech believes that a Phase
1 PK study in healthy volunteers can be run concurrently with a Phase 2 clinical trial
in pancreatic cancer patients
|
|
●
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Doses
will not exceed the previously established MTD (250 µg/kg)
|
Sponsor,
which in this case is the Company, will submit the Phase 2b clinical protocol for FDA review. The FDA confirmed that the Phase
2b study could be conducted as an open-label randomized study with two doses of MENK in combination with nap-paclitaxel + gemcitabine
versus nap-paclitaxel + gemcitabine. Exact study design will be determined by the Sponsor, and submitted to the FDA for review.
After
completion of the Phase 2b study, the Agency would grant the Sponsor an End-of-Phase 2 meeting.
Hubei
Qianjiang and Immune Therapeutics have a signed agreement for the development of MENK and have moved forward on that project since
2014-present.
PK
and Toxicology Studies were delayed in 2015 because the China Food and Drug Administration (CFDA) required Chemistry, Manufacturing
and Controls to be completed before starting the toxicology study. They have been started and will be completed by the end of
2017.
Hubei
Qianjiang signed Pharmaceutical Development Agreement for Formulation Development and CTM Manufacturing of Methionine–Enkephalin
for Quinjiang and Immune Therapeutics with China Peptide Company (“CPC”) in Q3 2015
CPC
perform analytical, pre-formulation, formulation development, clinical trial manufacturing, release testing and ICH1 stability
for Methione- Enkephalin
CPC
is among only a handful of companies in the world that can claim both ISO Certification and cGMP licensing. In February 2012,
CPC became the first peptide company to successfully pass US FDA inspection outside of US and Europe regions.
CMC
and formulations are required for mass production of MENK, which is also required for pivotal trials with the FDA for this work
has been ongoing since our meeting with the FDA.
i.
|
Qianjiang
will provide Cote Orphan the CMC data which is required as part of filing MENK protocols.
|
In
addition Hubei has completed pre-clinical studies using MENK on various cancers in the lab using mouse models and has shown to
be successful in a number of cancers including colon, pancreatic and hepatic. The data will be translated and provided as part
of the briefing package for both pancreatic and liver cancer.
The
MENK treatment was generally well tolerated with no appreciable toxicity observed. The high dose of MENK increased adaptive cell
immunity resulting in increased activity of the body’s immune system (e.g. increased IL-2 receptors, CD56 NK and LAK cells,
CD3, CD4 and CD8 cells) and a reduction in the size of lymph nodes. One patient in the high dose group administered by rapid intravenous
infusion experienced dizziness, diaphoresis, elevated blood pressure and decreased pulse rate. These signs and symptoms were responded
to with supportive measures.
Recently,
Professor Fengping Shan and Dr. Plotnikoff have published, in a number of peer-reviewed international journals, that MENK inhibited
regulatory T-cells, increasing the functional activities of T cells and NK cells and, thus, is a key to improved cancer therapy.
They additionally published results showing that MENK alone or in combination with Interleukin-2 (“IL -2”) or Interferon-γ
(“IFN-γ”) can enhance the production of interferon- γ or IL-2 from CD4+T cells, respectively (Shan F,
Yanjie Xia, Ning Wang, Jingjuan Meng, Changlong Lu, Yiming Meng, Nicolas P. Plotnikoff. Functional modulation of the pathway between
dendritic cells (DCs) and CD4+T cells by the neuropeptide: Methionine enkephalin (MENK).
Peptides
32. 2011; 929–937).
MENK also appeared to be more potent than IL -2 or IFN-γ, alone (Hua H, Changlong Lu, Weiwei Li, Jingjuan Meng, Danan Wang,
Nicolas Plotnikoff, Enhua Wang and Fengping Shan. Comparison of stimulating effect on subpopulations of lymphocytes in human peripheral
blood by methionine enkephalin with IL-2 and IFN-γ.
Human Vaccines & Immunotherapeutics
8:8, 2012; 1082-1089),
two widely known cytokines that have been approved by the FDA for marketing.
Plotnikoff
& Shan History
|
●
|
1983
Baxter takes license Conducts sub-chronic multiple dose pathology and toxicology studies
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Beginning
1984 Open Label clinical studies started in cancer and AIDs patients
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1989
NIH AID’s Committee recommends Methionine-enkephalin for inclusion in AIDs clinical
trials (low priority). Methionine-enkephalin discovered to activate LAK cells which destroy
AIDs virus
|
|
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1990-1995
Double Blind placebo controlled study in HIV patients begun at C.R.L in New York
|
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1995-2000
Open Label Tulsa, Belgium, Denver and New York
|
|
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2012-2014
Open Label 1Department of Cord Blood Bank, Shengjing Hospital; China Medical University;
Heping District, Shenyang, PR China; Department of dermatology; No.1hospital; China Medical
University; Heping District, Shenyang, PR China; Department of Immunology; School of
Basic Medical Science; China Medical University; Heping District, Shenyang, PR China
and TNI Bio. Tech. Inc.; Orlando, FL USA
|
|
●
|
In
1984 Nicholas P Plotnikoff and Gerald C miller and Joseph Wybran (etc) initiated a trial
in 14 healthy volunteers and 8 cancer patients the Clinical pharmacology of methionine-enkephalin
was studied in normal volunteers at doses of 1, 10, 50, 100, 150, 200, and 250 pg/kg.
Immunologically, increases in total lymphocytes, B lymphocytes, active rosette-forming
cells, T lymphocytes (OKTl 1), T-helper lymphocytes (OKT4), and T-suppressor lymphocytes
(OKT8) were seen after infusion with methionine-enkephalin. In addition, increased mitogen-stimulated
blastogenesis with PHA, Con A, and pokeweed were also seen with methionine-enkephalin
treatment. No material changes were seen in EKG, blood pressure, heart rate, respiratory
rate, temperature, or neurologic reflexes of normal volunteers receiving methionine enkephalin
in doses of 1 to 200 pg/kg.
|
Our
human (in vivo) studies have demonstrated that methionine-enkephalin is an activator of T-cell subsets, NK cells, and potentiator
of blastogenesis in the presence of PHA, Con A, pokeweed, or Staph A. All of the clinical pharmacologic variables were normal,
including EKG, heart rate, blood pressure, respiration, temperature, and neurologic reflexes, as well as urinalysis and SMAC 26.
Transient side effects such as vasodilation and/or gastrointestinal cramps were seen only at high doses (100, 150, 200, and 250
pg/kg). Thus, in this study, methionine-enkephalin, a natural hormone, was administered without significant adverse effect in
a dose range of 1 to 250 pg/kg (by intravenous infusion).
In
our studies in cancer patients with Kaposi’s sarcoma (due to AIDS), melanoma, lung cancer, and hypernephroma increases in
T-cell subsets were also observed. Increased levels of blastogenesis with the mitogens PHA, Con A, and pokeweed were also observed.
An increased expression of interleukin-2 receptors was also observed, while Wybran reported increased blood levels of interleukin-2
in patients receiving methionine-enkephalin. In addition, Wybran et al. 28 have reported that methionine enkephalin elevates T-cell
subset numbers in pre-AIDS or ARC patients. Methionine enkephalin may well be useful as an immunomodulator in the treatment of
patient in the early stages of their illness and/or following surgery, radiation, or chemotherapy treatment.
Cancer
Patients
Methionine-enkephalin
was administrated to seven patients with lung cancer. These patients were newly diagnosed and had not yet received prior treatment
such as surgery, chemotherapy, radiotherapy, or immunotherapy. Immunologic tests were performed before Methionine-enkephalin injection,
and 2 hours, 24 hours, 6 days after Methionine-enkephalin perfusion. The results can be summarized as follows: in four patients
active T-cells were increased in the blood; in five patients the percentage of OKTlO increased in the blood; and in seven the
cells with the Leu 11 phenotype increased (to more than twice the initial value in four of these patients). More interestingly,
NK activity increased in five of seven patients (by more than 100 in three of them, in whom NK activity increased from 30 to 60,
7 to 15%, and 18 to 36%).
Once
again, the absence of subjective or objective side effects should be stressed in this single-injection study.
ARC
Patients
Seven
patients with AIDS-related complex received Methionine-enkephalin three times a week intravenously for a minimum of 21 days; the
concentrations varied from 20 to 100 pg/kg at each injection. Some patients have already been treated for 130 days. The immunologic
results can be summarized as follows after 21 days of treatment: increase in the numbers of blood OKT3 and OKT4 lymphocytes, no
increase in the absolute count of lymphocytes, borderline increase in NK activity (p < 0.10), and increase in IL-2 production
as well as in PHA response. The most striking result is the enhancement of the PHA response. Some patients were treated for a
longer period of time and one patient has shown a remarkable immunologic and clinical course. This 32-year-old Caucasian homosexual
male had a prior history of an 11-kg weight loss, night sweats, recurrent scrota infections, and lymphadenopathy for a period
of 2 years. Testing of his immunologic status showed a reduced OKT4 percentage (20%) and count 336/mm3), low NK activity (22%),
low ILL-2 production (0.5 units), and low PHA response (147,000 cpm). He was started on Methionine-enkephalin and followed immunologically
as well as clinically. At day 130, his OKT4 percentage is 38% and the OKT4 count 730/mm3. The NK activity has increased to 43%
and the IL-2 production is also normalized to 2.1 units. Finally, his PHA response has presently reached 414,000 cpm. Clinically,
this patient has no more scrota1 infections, he has gained 8 kg, the night sweats have disappeared, and the lymph nodes have completely
regressed within 3 months. In summary, this patient shows an almost complete immunologic nonspecific functional reconstitution,
except with respect to the OKT4 subset. Clinically, he is in complete remission. All the data indicate that Methionine-enkephalin
can enhance some immunologic functions in ARC patients, and preliminary data suggest some therapeutic beneficial effect in some
patients. These results have to be confirmed in larger series in double-blind randomized trials.
AIDS
Patients
One
AIDS patient received a single injection of 20 pg/kg of Methionine-enkephalin and his PHA response increased from 4300 cpm to
14,000 cpm! Another AIDS patient with Kaposi’s Sarcoma is now receiving chronic treatment with Methionine-enkephalin. His
lesions have remained stable for 4 months. More interestingly, an AIDS patient (with Hodgkin’s lymphoma, Toxoplasma cerebral
abscess, atypical mycobacteria) was diagnosed as having Kaposi’s Sarcoma lesions (biopsy-proven). He was started on Methionine-enkephalin
treatment 1 month after the Kaposi’s Sarcoma lesions appeared, and after 4 weeks of treatment these lesions have flattened
and are in the process of disappearing (as determined by biopsy). In the case, Methionine-enkephalin administration was associated
with the regression of the Kaposi’s Sarcoma.
Clinical
Studies finished with 178 patients in Tulsa, Brussels the Belgium Medical School, New York SUNY, Denver Colorado Medical School
and Chicago to increase number of cytotoxic cells CD4, CD8 and NK Cells in AIDS and Cancer patients. The studies demonstrated
that Methionine-enkephalin is an effective and potent immunomodulator in HIV/AIDS patients. Methionine-enkephalin exhibited a
dose response between the dose of 10, 20, 50 and 100 micrograms/kg in terms of increasing number of CD3, CD4, CD8 and NK cells
in these patients (average increase of 50%). Higher doses of Methionine-enkephalin (150, 200, 250 and 300 micrograms/kg) exhibited
a plateau effect. No toxicity was seen in these patients. Methionine-enkephalin increases the number of cytotoxic cells (subsets
CD4, CD8 and NK) that are known to specifically destroy HIV. This “antiviral” effect was recorded by marked reduction
of p24 both in vitro and in vivo.
A
phase II clinical study under IND was completed. The study, was a double-blind and placebo controlled, involved randomized assignment
to three arms receiving a weekly intravenous infusion of 60mpg/km (low Dose) or receiving a weekly infusion of 125 micrograms/kg
and the third receiving a placebo infusion of normal saline. Twenty subjects completed 12 weeks of the trial, twenty-six patients
completed 8 weeks, and 33 patients completed 4 weeks. Eligibility for this clinical study included a positive HIV serology, CD4
level between 200 and 500.
Substantial
differences from baseline were observed (at eight weeks in patients receiving 125 micrograms/km) for the following parameters:
CD4, DC8, DC35, CD38, CD56, NK, PHA, PWM and CMV. The most important findings of the study were the increase in CD4 (T helper
cells) and CD56 (cytotoxic cells NK-K-LAK). There were no serious adverse reactions.
Phase
I and Phase II studies have been conducted under the Company’s IND (previously held by Penn State University) that have
demonstrated that MENK can be delivered to patients suffering from advanced pancreatic cancer, hepatocellular carcinoma (PI: Eric
Kimchi, M.D. at Penn State University) and advanced head and neck cancer (PI: David Goldenberg, M.D., FACS at Penn State University).
The maximum tolerated dose has been found to be 250 µg/kg using the intravenous route of administration over a 30-min infusion
time in a Phase I trial in fourteen normal volunteers and eight cancer patients. This maximum tolerated dose was later confirmed
in Phase I and Phase II trials in patients with advanced unresectable pancreatic cancer.
Patients
with Kaposi’s Sarcoma (9 patients), lung cancer (12 patients), melanoma (3 patients), hypernephroma (1 patient), or pancreatic
cancer (1 patient) were treated with MENK for one week to 12 months at doses of 10 µg/kg three times per week up to 80 µg/kg
3 times per week. After 1-2 weeks increases in T cell subsets (CD3, CD4, CD8, and CD2 positive cells) were observed. An increase
also occurred in IL-2 receptor expression. NK cell activity was measured in 14 patients and an increased NK activity was present
in 12/14 patients. No toxicity attributable to treatment with MENK was observed in any patient.
Two
case studies have been reported in an infant and a 20-month old child who were treated with MENK. The infant was diagnosed with
hepatoblastoma and was treated with one course of neoadjuvant chemotherapy at approximately one week of age. Due to complications
from the chemotherapy (neutropenic fever, pneumonia and sepsis), the patient’s parents declined further chemotherapy, and
the infant was treated with surgical resection and MENK/LDN. She is currently close to ten years disease–free survival.
The 20-month-old child was diagnosed with hepatoblastoma. Due to existing comorbidities (including autosomal recessive polycystic
kidney disease and hypertension), and biopsy results that indicated the tumor might be insensitive to chemotherapy, the parents
elected not to proceed with neoadjuvant chemotherapy. The patient was treated with surgical resection and MENK/LDN, and is currently
at more than five years disease-free survival.
2013-
2014 Open Label China Medical School
2012-Present:
We have been running trials both in-vitro and in-vino and have published on some of the work that was completed.
MENK,
a penta-peptide is considered as being involved in the regulatory feedback loop between the immune and neuroendocrine systems,
with marked modulation of various functions of human immune cells. The aim of the present work was to investigate change of lymphocyte
subpopulations in peripheral blood of 50 cancer patients before and after treatment with MENK. Peripheral blood mononuclear cells
(PBMCs) of peripheral blood from 50 cancer patients were isolated by density gradient centrifugation using Ficoll-Paque solution
and cultured with MENK. We measured proliferation of total nucleated cells, subpopulations of individual CD4+T cells, CD8+T cells,
CD4+CD25+ regulatory T cells (Treg), natural killer cells (NK) before and after treatment with 10-12M MENK in cell culture by
flow cytometry (FCM).
Our
results indicated that MENK showed a strong inhibiting effect on Treg cells while it stimulated marked proliferation of other
lymphocyte subpopulations. All data obtained were of significance statistically. It was therefore concluded that MENK could work
as a strong immune booster with great potential in restoring damaged human immune system and we could consider MENK as a drug
to treat cancer patients, whose immune systems are damaged by chemotherapy or radiotherapy. Furthermore we could consider MENK
as a chemotherapy additive, which would sustain immune system of cancer patients during the process of chemotherapy to get maximized
efficacy with minimized side effect.
Methionine
enkephalin (MENK) improves lymphocyte subpopulations in human peripheral blood of 50 cancer patients by inhibiting regulatory
T cells (Tregs). The patients recruited for this study were all with terminal cancers with broad metastasis, underwent chemotherapy
and their immune system were damaged severely. They failed to respond to any therapy available and were desperate. After they
signed informed consent we began to give treatment. The concrete cases distribution was as following: Rectal cancer: 4, Colon
cancer: 6, Stomach cancer: 3, Hepanocellular cancer: 2, Lung cancer: 7, Oval cancer: 3, Pancreatic cancer: 2, Breast cancer: 3,
Urinary bladder cancer: 1
This
approach helps us learn more knowledge about MENK’s action in rehabilitating human immune system and the conclusion of MENK
as an immune enhancer, drawn from present study is fully supported by the data obtained. We believe that this is the first time
that published data based on large samples show that MENK could stimulate proliferation of lymphocyte subpopulations by inhibiting
Tregs in peripheral blood of cancer patients.
Research
results indicate that MENK, at suitable doses, boosts the immune system through the following possible mechanisms:
|
●
|
increasing
proliferation and functional activities of CD4+T-cells and CD8+T-cells which will play a role in anti-virus and anti-tumor
activities;
|
|
●
|
increasing
maturation of dendritic cells which will initiate and intensify T-cell responses;
|
|
●
|
increasing
secretion of cytokines such as IL-2, TNF, IL-12 and IFN-γ which will amplify the T-cell response and mediate interaction
among immune cells, forming a modulated and balanced immunity;
|
|
●
|
increasing
functions of macrophages, resulting in enhanced cellular immunity through secreting a set of cytokines; and
|
|
●
|
increasing
activity of NK cells which have the ability to kill cancer cells and virus-infected cells.
|
Based
upon published literature, the Company believes that, in oncology in particular, MENK has two possible mechanisms of actions:
1.
Immune stimulation and regulation effects; and
2.
Direct anti-cancer inhibitory effects.
Based
upon data from multiple
in vivo
and
in vitro
studies conducted by Zagon
et al.
over the past 15 years, the
onset and/or progression of some cancers may be related to defects in MENK and/or OGFr, which would promote or exacerbate tumorigenesis.
These findings show there may be an advantage in up-regulating the peptide (e.g., MENK administration) to enhance anti-cancer
activity (Zagon IS, Donahue RN, McLaughlin PJ. Opioid growth factor-opioid growth factor receptor axis is a physiological determinant
of cell proliferation in diverse human cancers.
Am J Physiol Regul Integr Comp Physiol.
2009; 297: R1154–R1161).
Further exploration and clinical trials are needed to confirm MENK’s mechanism of action and its ability to stop the growth
of cancerous cells in human subjects with advanced cancer; however, supportive literature around the possible mechanism of actions
for MENK are provided below.
MENK
as an immune stimulator/regulator
While
Dr. Nicholas Plotnikoff was a faculty member at Oral Roberts University, he discovered that all three of the classical opioid
receptors are expressed on most subsets of immune cells, and that either
in vitro
incubation with MENK or parenteral administration
of and humans, especially those with immunodeficiencies associated with cancer or HIV/AIDS, MENK
in vivo
increased the
number and functional activities of T cells, including cytotoxic CD8+ T cells, and also natural killer (NK) cells (Plotnikoff
NP, Faith RE, Murgo AJ, Herberman RB, Good RA. Methionine Enkephalin: A New Cytokine – Human Studies.
Clinical Immunology
and Immunopathology
. February 1997; 82(2): 93-101). Following those pioneering studies, several other investigators observed
that administration of MENK to mice increased CD4+ and CD+ T cells, and increased various immune functions, including cytotoxic
activities of both T cells and NK cells (
Wybran J
,
Schandené L
,
Van Vooren JP
,
Vandermoten G
,
Latinne D
,
Sonnet J
,
De Bruyère M
,
Taelman H
,
Plotnikoff NP
. Immunologic properties
of methionine-enkephalin, and therapeutic implications in AIDS, ARC, and cancer.
Ann N Y Acad Sci.
1987; 496:108-14).
Recently, Drs. Fengping Shan and Nicholas Plotnikoff have reported that MENK treatment of mice stimulates the cytotoxic activities
of T cells and NK cells and reduces levels of T regulatory cells, and augments therapeutic effects in tumor-bearing immunocompetent
mice.
MENK
as an inhibitor of cancer cell growth
MENK
has been found to exert a profound inhibition on the initiation and progression of human pancreatic cancer
in vitro
and
in vivo
(Zagon IS, Smith JP, McLaughlin PJ. Opioid Growth Factor (OFG) Inhibits Human Pancreatic Cancer Transplanted into
Nude Mice.
Cancer Letters.
1997 Jan 30; 112(2):167-175. Zagon IS, Smith JP, Conter R, McLaughlin PJ. Identification and
Characterization of Opioid Growth Factor Receptor in Human Pancreatic Adenocarcinoma.
International J of Molecular Med.
2000 Jan; 5(1):77-84.). This led to the discovery that MENK interacted with a novel opioid receptor (OGFr) on human cancer cells
(ovarian, SCCHN, pancreatic, colorectal and others) creating a competitive inhibition profile and subcellular location that is
different from other well-known “classic” opioid receptors [mu (µ), delta (δ) and kappa (κ)]. The
other “classic” opioid receptors have not been found to have any impact on cell growth; thus there is specificity
in the MENK-OGFr interaction which regulates cell proliferation. In an extensive number of experiments that have been conducted
on human pancreatic cancer cells in tissue culture exposed to a variety of opioid-related compounds, MENK was the only compound
that inhibited cell proliferation. Based upon data from multiple
in vivo
and
in vitro
studies conducted by Zagon
et al
., the onset and/or progression of some cancers may be related to defects in MENK and/or OGFr, which would promote
or exacerbate tumorigenesis. These findings show there may be an advantage in up-regulating the peptide (e.g., MENK administration)
to enhance anti-cancer activity.
Therefore,
as opioid receptors are not only found on cancer cells, but also on most subsets of immune cells, MENK has the ability to not
only inhibit cancer cell growth, but also have a direct impact on the patient’s immune system by increasing the number and
functional activities of T cells and NK cells.
Zagon
and McLaughlin have not recorded in any of their animal studies any side effects of MENK for non-oncological indications such
as experimental autoimmune encephalomyelitis (EAE, the mouse model of multiple sclerosis) or relapse-remitting EAE (RR-EAE) with
MENK being administered daily. Treatment with MENK or LDN did not exacerbate EAE and was able to halt progression of disease,
reverse neurological deficits, and prevent the onset of neurological dysfunction over time (Rahn KA,
McLaughlin PJ
,
Zagon
IS
. Prevention and diminished expression of experimental autoimmune encephalomyelitis by low dose naltrexone (LDN) or opioid
growth factor (OGF) for an extended period: Therapeutic implications for multiple sclerosis).
Management
believes clinical trials involving LDN hold great promise for the millions of people worldwide for the treatment of autoimmune
diseases or disorders, central nervous system disorders or those who face cancer. Management also believes it could be the first
low-cost, easy to administer therapy with minimal to no side-effects for the treatment of HIV/AIDS, autoimmune diseases and immune
disorders, in particular Crohn’s disease, multiple sclerosis, and/or fibromyalgia.
Naltrexone
is an orally effective opioid receptor antagonist, used as a treatment for opiate addiction. Naltrexone was originally synthesized
in 1963 and patented in 1967. In 1984, the FDA approved naltrexone in a 50 mg dose as a treatment for heroin addiction. Naltrexone
50 mg film-coated tablets have been approved in Europe since at least 1989 for the treatment of opiate addiction and more recently
alcohol dependency. At lower doses (approximately 4.5 mg/day), it has been gaining popularity as a treatment for signs and symptoms
of autoimmune diseases and immune disorders, HIV/AIDS and cancer. Research studies by others have indicated that the short-term
blockage of opioid receptors on circulating and tissue cells by LDN was followed by a substantial rebound in opioid receptor expression
and increased levels of β-endorphin and methionine-enkephalin (Zagon IS, McLaughlin PJ. Opioid antagonist modulation of murine
neuroblastoma: A profile of cell proliferation and opioid peptides and receptors.
Brain Res
. 1989; 480:16–28.)
Oral
administration of LDN has been shown to transiently (approximately 4 hours) inhibit opioid receptors which in turn provides a
remaining window of approximately 20 hours for the unregulated opioids and receptors to interact (
Donahue RN
,
McLaughlin
PJ
,
Zagon IS
. The opioid growth factor (OGF) and low dose naltrexone (LDN) suppress human ovarian cancer progression
in mice.
Gynecol Oncol.
2011 Aug; 122(2):382-8).
LDN
has been shown to increase the levels of endogenous opioid activity, thereby having the ability to play a direct role in enhancing
the human body’s stress resilience, improving psychiatric problems such as autism, in addition to being able to have a direct
impact on the immune system and regulation of how the immune system works when faced with disease. LDN is believed to facilitate
the body’s own resources to slow down or combat cancers, autoimmune diseases and HIV/AIDS; thus reducing the overall impact
and load on the body (Brown N, and Panksepp J. Low dose naltrexone for disease prevention and quality of life.
Med Hypotheses
.
2008 Mar: 72(3):293-6.).
Naltrexone
was originally patented in 1967 by the specialty pharmaceutical company Endo Health Solutions Inc. At the time, it seemed unlikely
that naltrexone would be developed because the experimental drug had relatively low market potential, and naltrexone’s patent
protection would likely expire before the completion of clinical trials. With the assistance of DuPont, a division of Merck &
Co. that acquired Endo in 1969, the US government’s National Institute on Drug Abuse (“NIDA”) advanced naltrexone
through the FDA approval process, leading to approval for marketing as a treatment for heroin addiction in a 50 mg dose in 1984.
Although its patent expired that same year, naltrexone gained seven additional years of marketing exclusivity for DuPont when
the FDA designated it (trademarked as Trexan) an Orphan Drug. Marketing exclusivity provides a pharmaceutical company the right
to sell its drug for a certain length of time free of competition from generic versions of the drug and is often granted to encourage
companies to develop a use for a drug whose patent has expired or to encourage a company to develop an already approved drug for
a new use. With market exclusivity, the anticipated returns on investment are higher, improving the profitability of a drug. With
funding provided by the US National Institute on Alcohol Abuse and Alcoholism (“NIAAA”) and the potential to gain
three additional years of post-approval market exclusivity for naltrexone, DuPont advanced naltrexone through additional clinical
trials, and gained FDA approval for a 50 mg dose (trademarked as ReVia) as a treatment for alcohol abuse in 1995. As naltrexone
had already been on the market for 10 years as a treatment for heroin addiction, the FDA’s confidence in its safety resulted
in approval only six months after naltrexone’s regulatory application was submitted.
Naltrexone
has a black box warning for liver toxicity, which was included based on liver enzyme elevations reported with daily dosing at
100 mg-300 mg. These doses were evaluated in clinical trials for obesity; however, they have not been approved for this use. Our
review of the literature and adverse effect reports in naltrexone clinical trials did not demonstrate a risk for liver damage
with daily dosing at 50 mg. Although the black box warning does remain, the FDA has stated that naltrexone does not appear to
be a hepatotoxin at the recommended doses for the currently approved indications. Recently, naltrexone at 4 mg and 8 mg, in combination
with the anti-depressant drug, bupropion at 90 mg, was evaluated as an anti-obesity drug by Orexigen Therapeutics Inc. and submitted
for FDA approval in 2010. Data from studies with the drug combination (trademarked Contrave) showed potential hepatotoxicity in
1.2% of subjects treated with Contrave (n = 3,239). [Note: After the FDA requested a long-term study to demonstrate the daily
recommended dose of the drug combination (two tablets each with 8 mg naltrexone plus 90 mg bupropion taken twice daily) does not
raise the risk of heart attacks, Orexigen initiated a Phase III trial to evaluate Contrave in a study expected to enroll more
than 9,000 subjects and is anticipated to be completed in 2017.] Other than its small potential association with liver toxicity
at high doses, the most common adverse effects reported with naltrexone are non-specific gastrointestinal complaints such as diarrhea
and abdominal cramping.
Notable
published clinical trial evidence indicates that LDN, particularly daily dosing at 3mg - 4.5 mg, stimulates the immune system
and is effective in the treatment of some immunodeficiency diseases, such as HIV/AIDS diseases, and advanced cancer as shown in
the studies referenced herein. The first clinical trial results with LDN for immune disorders, however, were published only recently
in a peer-reviewed medical journal in 2007 which evaluated LDN treatment in a pilot phase II study of 17 patients with Crohn’s
disease, a form of inflammatory bowel disease that most commonly affects the ileum and the beginning of the colon. Two-Thirds
of patients in this study went into remission after 4.5 mg daily LDN treatment (p < 0.001), with 89% of patients overall showing
some degree of response.
An
open-label pilot study was conducted by Pennsylvania State University with LDN to evaluate response, safety and toxicity in adult
subjects with moderate to severe, active Crohn’s disease. Patients were treated with LDN orally each evening at a dose of
4.5 mg for 3 months. A total of 17 patients were enrolled, 16 of whom completed the study. No laboratory abnormalities were noted.
The most common side effect was sleep disturbances (occurred when dosing at night, at about bed-time), occurring in seven patients
(41%).
A
second clinical study was conducted by Pennsylvania State University as a randomized double-blind, placebo-controlled study to
test the efficacy and safety of LDN for 12 weeks in adults with moderate to severe active Crohn’s disease. Forty subjects
with moderate to severe active Crohn’s disease were enrolled in the study. Randomized patients received daily oral administration
LDN (4.5 mg/day) or placebo. Fatigue was the only side effect reported of statistical significance, and it was greater in subjects
receiving placebo.
A
pilot Phase II clinical trial was conducted by Pennsylvania State University in children with moderate to severe active Crohn’s
disease. Fourteen subjects were enrolled, 12 subjects were randomized and treated with a mean age of 12.3 years (range 8-17 years).
Children were randomized to placebo or LDN (0.1 mg/kg or a maximum dose of 4.5 mg) orally for 8 weeks followed by open-label treatment
for an additional 8 weeks of LDN at the same dose of 0.1 mg/kg or 4.5 mg. Oral LDN was well tolerated without any serious adverse
events.
Fourteen
(14) subjects were enrolled, 12 subjects were randomized and treated (Smith J.
et al
., 2007; Smith J.
et al
., 2011;
Smith J.
et al
., 2013).
Pennsylvania
State University researchers have also demonstrated in a mouse model of Crohn’s disease (chemically induced colitis with
dextran sodium sulfate) that opioid receptor blockade by LDN resulted in less weight loss, lower disease activity index scores
and less histological evidence of inflammation when compared to controls. Furthermore, the researchers demonstrated that tissue
inflammatory cytokine mRNA was reversed to baseline levels in the colons of mice treated with LDN.
Management
believes in LDN’s potential treatment effects for Crohn’s disease, as the treatments currently available for Crohn’s
disease are expensive and carry black box warning due to the toxic side effects associated with virtually all of the currently
used drugs. Management believes that LDN provides an attractive alternative. Three published clinical trials in patients with
moderate to severe disease, two in adults and one in children, have shown notable disease and quality of life improvement by 12-weeks.
LDN was able to reverse the inflammatory activity, promote mucosal healing, and decrease histologic inflammation when compared
to placebo-treated controls (Smith J.
et al,
2011; Smith J.
et al,
2013). Based on these results, the Company has
placed a very high priority on implementing a pivotal Phase IIB/III study. By using the 505(b)(2) pathway, confirmation of efficacy
in our Phase III study is expected to result in approval by the FDA.
With
its increasing recognition in children and adolescents, Crohn’s disease has become one of the chronic diseases that affect
young people. Pediatric Crohn’s disease affects approximately 80,000 patients in the United States, and thus has led to
orphan drug designation with the FDA. In addition to the common GI symptoms due to inflammation in the small and/or large intestine,
children often experience growth failure, malnutrition, pubertal delay, bone demineralization, and psychological issues. Crohn’s
tends to be both severe and extensive in the pediatric population with a relatively high proportion of pediatric Crohn’s
patients having involvement of their small intestine, proximal to the ileum.
The
following table provides a summary of clinical trials for LDN that have recently been or are being conducted by Pennsylvania State
University:
Title
|
|
Indication(s)
|
|
Dose
|
|
ClinicalTrials.gov
Identifier / Status
|
Low
Dose Naltrexone for Metastatic Melanoma, Castrate Resistant Prostate Cancer and Renal Cancer
|
|
Metastatic
Melanoma, Castrate Resistant Prostate Cancer and Renal Cancer
|
|
5
mg/day
|
|
NCT01650350
/
Currently
Recruiting
(verified
May 2013)
|
Effects
of Low Dose Naltrexone in Fibromyalgia
|
|
Fibromyalgia
|
|
3-4.5
mg/day
|
|
NCT00568555
/ Completed June 2012
(verified
June 2012)
|
Low
Dose Naltrexone in Symptomatic Inflammatory Bowel Disease
|
|
Inflammatory
Bowel Disease
|
|
4.5
mg/day
|
|
NCT01810185
/
Not
yet recruiting
(verified
June 2013)
|
Low
dose Naltrexone for Glioma Patients
|
|
Malignant
Glioma
|
|
4.5
mg/day
|
|
NCT01303835
/
Active,
not recruiting
(verified
January 2014)
|
Low
dose Naltrexone for Depression Relapse and Recurrence
|
|
Major
Depressive Disorder
Depression,
Unipolar
Recurrence
Relapse
|
|
1
mg/day
|
|
NCT01874951
/
Recruiting
(verified
September 2013)
|
The
505(b)(2) Regulatory Pathway
Traditionally,
pharmaceutical drugs had to be approved by the FDA under the standard 505(b)(1) regulatory pathway, which could take as long as
15 years. Now, drugs approved under 505(b)(2) may rely in part on data from existing reference drugs meaning they can be developed
and achieve FDA approval in as little as 30 months with only a fraction of the number of required clinical trials and at a much
lower cost.
Developing
LDN using the 505(b)(2) regulatory pathway decreases the amount of development time and cost in order to obtain FDA approval.
As naltrexone is an FDA-approved product for alcohol or opiate dependence, prescriptions are currently being filled for naltrexone
in 50 mg doses by hundreds of local pharmacies and mail-order pharmacies around the United States.
The
FDA’s 505(b)(2) pathway for approving drugs opens the door for the Company to gain FDA approval of LDN (which is used at
doses of approximately 1/10th the approved dose) for new diseases. A 505(b)(2) drug application for LDN will contain full reports
of clinical investigations to support the safety and effectiveness in the new indication(s); however, at least some of the information
required for approval will come from studies not conducted by or for the applicant, and for which the applicant has not obtained
a right of reference or use, as many of these drugs are now off-patent. With the opportunity to use previous findings of safety,
the Company intends to use the 505(b)(2) pathway to study and gain approval for LDN in other diseases, with Crohn’s disease
slated as its first therapeutic indication.
As
there is a sufficient database of information around the safety of this product, and the reference listed drug (NDA 018932 REVIA)
is being used, the FDA agreed that a 505(b)(2) application would be an acceptable approach at this time.
The
Company, through its subsidiary, will need to complete both a Phase 2B and Phase 3 clinical trial for both Pediatric and Adult
Crohn’s Disease for IRT-103 before final approval to market the drug in the U.S. from the FDA. Similarly Phase 2 and Phase
3 clinical trials will need to be completed in the U.S. for IRT-101 before we can obtain final approval to market the drug in
the U.S. from the FDA. All clinical trials in the U.S. are being completed under the supervision of our subsidiary Cytocom, Inc.
Intellectual
Property
The
Company has been developing active forms of immunotherapies through the acquisition of patents, IND Applications, clinical data
and all proprietary technical information, know-how, procedures, protocols, methods, prototypes, designs, data and reports which
are not readily available to others through public means, and which were owned, generated or developed through experiments or
testing by Dr. Plotnikoff, Professor Shan, Dr. Bernard Bihari, Dr. Ian S. Zagon, Dr. Jill Smith, Dr. Patricia J. McLaughlin and
Moshe Rogosnitzky.
The
Company has been able to acquire many of the patents and intellectual property it was seeking, and has also been able to team
up with some of the leaders in the field of immunology, experts such as the late Dr. Ronald Herberman (1940-2013), Dr. Fenping
Shan, Dr. Jill Smith and Dr. Terry Grossman.
Dr.
Plotnikoff is the inventor behind a number of patents granted for cancer treatments and an adjunct to patents for autoimmune diseases
including: European Patent United Kingdom, Germany, France, Ireland EP 1401471 BI Methods for inducing sustained immune response;
Russian Patent Russian Federation patent number 2313364; The Patent Office of the People’s Republic of China, Application
No.: 200810165784.8 China Patent CN1015113407 A The Patent Office of the People’s Republic of China ISSN: 1006-2858 CN 21-1349/R;
Patent Agencies Government of India Patent, Application number 1627/KOLNP/2003 number 220265 an Enkephalin Peptide Composition;
and the US Patent Pending, US Patent Application 10/146.999 which was approved in January 2014 US patent number 20140024588 (the
“Plotnikoff Patents”). The Patent Cooperation Treaty (“PCT”) enables a U.S. applicant to file a single
application, known as “an international application,” in a standardized format in English in the U.S. Receiving Office
(the U.S. Patent and Trademark Office) that is acknowledged as a regular national or regional filing in any state or region that
is party to the PCT.
The
Company entered into a Sale of Technology Agreement with Dr. Nicholas P. Plotnikoff on March 4, 2012, wherein Dr. Plotnikoff agreed
to transfer and assign all of his rights, title and interest in the Plotnikoff Patents to the Company. The Company received all
the production formulations and technology designs from Dr. Plotnikoff necessary for the manufacturing, formulation, production
and protocols of the MENK treatment of cancer and HIV/AIDS. As consideration for entering into the Sale of Technology Agreement,
Dr. Plotnikoff received 6,000,000 shares of common stock, a royalty of a one percent on all sales of MENK in perpetuity and was
granted the position of Non-Executive Chairman of the Board of Directors. The Sale of Technology Agreement was filed with Amendment
No. 6 to the Form 10 Registration and incorporated herein by reference.
In
addition to the above patents, we also signed an exclusive licensing agreement for all of the intellectual property developed
at Pennsylvania State University by Dr. Ian S. Zagon, Dr. Patricia J. McLaughlin and Dr. Jill P. Smith for the treatment of cancer.
The patents cover methods and formulations related to the treatment and prevention of cancers. More specifically, the present
inventions describe the use of drugs that interact with opioid receptors (naltrexone, naloxone and the pentapeptide MENK) to inhibit
and arrest the growth of cancer. Such efficacy has been discovered to be partially due to the functional manipulation of the zeta
opioid receptor through exogenous and endogenous MENK. This receptor has been determined to be present in a variety of cancers,
including pancreatic, ovarian, liver, head and neck, and colon cancer. US Patent Numbers 6,737,397, CA 2,557,504,
US 20010046968
,
US 6737397
,
US 6136780
,
US 20080015211
,
US 20070053838
,
US 8003630
,
US 20110123437
,
US 7807368
,
US 7576180
,
US 7517649
,
US 20080146512
,
US 7122651
,
US 20060073565
,
US 20050191241
, Patent No 8,003,630. In addition to the approved patents we have four other patents pending: U.S. Patent
Application No. 11/061,932, U.S. Application No. 13/660,129; Israeli Patent Application No. 194734; Chinese Patent Application
No.: 200810165784.8 and US Application No. 62/296,759. The licensing agreement referenced in this paragraph was previously filed
with Amendment No. 7 to the Form 10 Registration Statement filed January 22, 2014 and is incorporated herewith.
We
also acquired the licensing rights to the patent portfolio and intellectual property developed by Dr. Bernard Bihari relating
to treatments with drugs that interact with opioid receptors such as LDN and MENK for a variety of diseases and conditions including
malignant lymphoma, chronic lymphocyctic leukemia, Hodgkin’s lymphoma, and non-Hodgkin’s lymphoma, chronic herpes
virus infections, and chronic infections due to the Epstein-Barr virus and a treatment method for humans infected with HTLV-III
(AIDS) virus including patients clinically diagnosed as suffering from HIV/AIDS and those suffering from ARC. The licensed rights
include all reissues or modifications, reexaminations, or other related U.S. patent filings directed to the same subject matter
and the use of
U.S. Patent Number 6,586,443
,
U.S. Patent Number 6,384,044
,
U.S. Patent Number 6,288,074
,
U.S. Patent Number 5,356,900
,
U.S. Patent Number 5,013,739
,
U.S. Patent Number 4,888,346
. The license agreement
with Dr. Bihari was previously filed with Amendment No. 1 to the Form 10 Registration Statement filed on June 7, 2013 and is incorporated
herewith.
Once
the Company acquired the above patents, it was then able to sign a licensing agreement to acquire the exclusive patent rights
for the intellectual property of the licensors, Dr. Jill Smith and LDN Research Group, LLC, whose members include Dr. Ian S. Zagon,
Dr. Patricia J. McLaughlin and Moshe Rogosnitzky. The patents cover methods and formulations for the treatment of the inflammatory
and ulcerative diseases of the bowel, using naltrexone in low doses as an opioid antagonist. Endogenous opioids and opioid antagonists
at low doses have been shown to play a role in stimulating and rebalancing the immune system and the healing and repair of tissues.
US Patent No. 6,136,780, Patent No. US 7879870. The Company then negotiated with Dr. Jill Smith to arrange the transfer of the
Orphan Drug Designation for the use of naltrexone for the treatment of pediatric Crohn’s disease with the FDA. Dr. Smith
has since transferred the IND to the Company, and the FDA acknowledged that the Company is now the sponsor for this IND. In September
2014, the Company and the licensors jointly agreed to terminate the license agreement, and in place thereof, have the licensors
grant a similar license in their patent rights to Cytocom Inc. pursuant to a Patent License Agreement between the licensors, Cytocom
Inc. and the Company with substantially similar terms as set forth in the original license agreement. Pursuant to this agreement,
the Company issued 1,000,000 shares of its common stock to the licensors and the Company guaranteed the obligations of Cytocom
Inc. to the licensors under the agreement.
The
Company originally acquired the patents and intellectual property from Dr. Smith and LDN Research Group, LLC because management
believed clinical trials involving LDN held great promise for the millions of people worldwide with autoimmune diseases or disorders,
central nervous system disorders or those who face cancer. Management also believed it could be the first low-cost, easy to administer
therapy with minimal to no side-effects for the treatment of HIV/AIDS, autoimmune diseases and immune disorders, in particular
Crohn’s disease, multiple sclerosis, and/or fibromyalgia.
Dr.
Nicholas Plotnikoff, Professor Fenping Shan and Noreen Griffin recently filed a Provisional Application for a Utility Patent US
Application No. 62/296,759 Method for Inducing a Sustained Immune Response, which was assigned to the Company in March 2016. U.S.
Patent and Trademark Office has issued the Official Filing Receipt in connection with this application, and accorded a filing
date of February 18, 2016 during its pendency in the USPTO.
Summaries
of the Company’s agreements are as follows:
Dr.
Nicholas Plotnikoff
In
connection with the share exchange, the following is the scope of the intellectual property transfer: we entered into a Sale of
Technology Agreement with Dr. Nicholas P. Plotnikoff on March 4, 2012, wherein Dr. Plotnikoff agreed to a 100% transfer and assign
all of his rights, title and interest in: European Patent United Kingdom, Germany, France, Ireland EP 1401471 BI Methods for inducing
sustained immune response; Russian Patent Russian Federation patent number 2313364; The Patent Office of the People’s Republic
of China, Application No.: 200810165784.8 China Patent CN1015113407 A The Patent Office of the People’s Republic of China
ISSN: 1006-2858 CN 21-1349/R; Patent Agencies Government of India Patent, Application number 1627/KOLNP/2003 number 220265 an
Enkephalin Peptide Composition; and the US Patent Pending, US Patent Application 10/146.999 e. The Company received all the production
formulations and technology designs from Dr. Plotnikoff necessary for the manufacturing, formulation, production and protocols
of the MENK treatment of cancer and HIV/AIDS. As consideration for entering into the Sale of Technology Agreement, Dr. Plotnikoff
received 8,000,000 shares of common stock, a royalty of a single-digit percentage on all sales of MENK and was granted the position
of Non-Executive Chairman of the Board of Directors. There were no other payment provisions included in the termination provisions.
At
the time of the acquisition, the valuation of goodwill and other intangible assets were determined using the fair market price
for the Company’s common stock, which were exchanged for shares of TNI IP. In the fourth quarter of 2012, the Company performed
an annual valuation to determine whether any goodwill or intangible assets that had been acquired by the Company were impaired.
The result of this valuation was that material impairments were identified. The Company recognized an impairment of the goodwill
arising on the acquisition of TNI IP of $98,000,000.
Jacqueline
Young
On
August 13, 2012, the Company signed an exclusive License Agreement with Ms. Jacqueline Young (the “Young Agreement”)
for the intellectual property developed by Dr. Bernard Bihari relating to treatments with opioid antagonists such as naltrexone
and Met-enkephalin for a variety of diseases and conditions including malignant lymphoma, chronic lymphocytic leukemia, Hodgkin’s
lymphoma, and non-Hodgkin’s lymphoma, chronic herpes virus infections, chronic herpes viral infections such as chronic genital
herpes caused by the herpes simplex virus Type 2 and chronic infections due to the Epstein-Barr virus and a treatment method for
humans infected with HTLV-III (AIDS) virus, including patients clinically diagnosed as suffering from AIDS and those suffering
from AIDS-related complex (ARC).
The
Young Agreement is valid for the life of the patents and expires on a country by country basis in each country where patent rights
exist, upon the expiration of the last to expire patent in each country or in the event the patent in such country is held to
be invalid and/or unenforceable (by a court or government body of competent jurisdiction) or admitted to be invalid or unenforceable.
The
termination provision states that, additionally, we can cancel the Young Agreement upon 120 days’ written notice and shall
pay all royalties and fees that have accrued. We have the exclusive rights to the intellectual property; however, Ms. Young retains
a right to practice the patents licensed under the Young Agreement solely for non-commercial, academic research purposes.
The
Bihari patents were acquired in exchange for 540,000 shares of the Company’s common stock with a fair value of $972,000
and assumed liabilities of $400,000, which is payable to Ms. Young over a twenty-four month period in equal installments to reimburse
her for the costs of a New York City office in accordance with the Young Agreement. The patent liability at December 31, 2013
totaled $118,333. The cost of the patent totaled $1,372,000. Additionally, the Company will pay the licensor a royalty payment
of 1% of gross MENK sales and provide the licensor a position as non-executive chairman of the Company.
Dr.
Jill Smith
On
December 24, 2012, the Company signed an agreement for the acquisition of patent rights (the “Smith Agreement”) for
the intellectual property of Dr. Jill Smith and LDN Research Group, LLC (collectively, the “Licensor Parties”), whose
members are Dr. Ian S. Zagon, Dr. Patricia J. McLaughlin and Moshe Rogosnitzky and orphan drug designation by the FDA to a novel
late-stage drug, trademarked “LDN,” for the treatment of Pediatric Crohn’s disease. The patent covers methods
and formulations for treatment of the inflammatory and ulcerative diseases of the bowel, using naltrexone in low doses as an opioid
antagonist. These patents were acquired in exchange for the purchase of 300,000 shares of our common stock with a fair market
value of $2,715,000 and an up-front payment of $165,384 (consisting of a $100,000 initial license fee and payment of $65,384 of
expenses), which totaled $2,880,384.
The
Smith Agreement requires the Company to (i) use commercially reasonable efforts to develop, commercialize, market and sell licensed
products in a manner consistent with a business plan, (ii) expend a minimum amount of funds per annum to develop and commercialize
licensed products as soon as practicable, (iii) obtain all requisite regulatory approvals needed to use or sell licensed products
in the field of use, and (iv) make the first commercial sale of a licensed product by March of 2017.
In
addition to the above stated 300,000 shares with a fair market value of $2,715,000 at the time of signing with the Company, it
was agreed that 1,000,000 shares of common stock at the time of signing of a licensing agreement with Cytocom Inc, with all fees
paid by the Company, on behalf of the contract until such time as Cytocom is funded.
The
aggregate amounts paid to date under the agreement are: $100,000 in 2014, $100,000 in 2015, and $100,000 set to be paid in December
of 2016. The aggregate future potential milestone payments to be paid are: $250,000 upon the initiation of a phase III trial by
the FDA, $250,000 upon acceptance of a NDA by the FDA, and $750,000 upon marketing approval by the FDA. The royalty rates for
the transactions are 4% on Crohn’s Disease in the United States and 1% on sales in Emerging Markets.
Unless
terminated sooner pursuant to the Agreement, the Agreement will terminate upon the later of: (a) the expiration or abandonment
of the last patent to expire or become abandoned of the Patent Rights; or (b) Ten (10) years after the first Sale of the first
Licensed Product. The Company may terminate the Smith Agreement upon 90 days’ written notice, provided all sublicenses are
terminated and all amounts due and owing are paid to the Licensor Parties. The Licensor Parties may terminate the agreement ten
days’ after notice to the Company if the Company is ten days late in payment or there is a breach that remains uncured for
ten days after written notice of such breach.
The
Company is required to pay an annual license fee, an annual running royalty on net sales of each licensed product or a minimum
royalty, whichever is greater, and a sublicense fee on payments received by the Company from sublicensees. The Company has an
exclusive, worldwide license to make, have made, use, lease, import, offer for sale and sell licensed products and to use the
method under the patent rights.
The
Company is also required to pay milestone payments after substantial achievement of certain milestone events for each licensed
product including payment: upon initiation of each Phase III trial; upon positive completion of each Phase III clinical trial
of the therapeutic use of an LDN compound in the field of use; when a New Drug Application (“NDA”) is accepted for
review by the FDA; and when FDA approval to market the NDA is approved. The Company will issue shares upon reaching certain milestones
including upon the first dosing of the first patient in a Phase III clinical trial for each licensed product, upon the first sale
of each licensed product, and upon the achievement of a set dollar amount in cumulative sales for each licensed product covered
by NDAs.
As
part of the Smith Agreement, the Company has the right to apply to the FDA for the transfer of the orphan drug status for the
use of naltrexone for the treatment of pediatric Crohn’s disease and ulcerative colitis, the Investigation New Drug Application
(“IND”), and the right to acquire the relevant clinical data set from Dr. Jill Smith. Dr. Jill Smith made arrangements
to transfer the IND to the Company as well as the relevant clinical data set, and the FDA has acknowledged that the Company is
now the sponsor for this IND.
On
September 24, 2014, the Company and the Licensor Parties jointly agreed to terminate the Smith Agreement, and in place thereof,
have the Licensor Parties grant a similar license in their patent rights to Cytocom Inc. pursuant to a Patent License Agreement
between the Licensor Parties, Cytocom Inc. and the Company with substantially similar terms as set forth in the Smith Agreement.
Pursuant to this agreement, the Company issued 1,000,000 shares of its common stock valued at $270,000, upon execution to the
Licensor Parties and the Company guaranteed the obligations of Cytocom Inc. to the Licensor Parties under the agreement.
The
Penn State Research Foundation
On
January 18, 2013, the Company signed an exclusive licensing agreement with The Penn State Research Foundation to license all of
the intellectual property developed by Dr. Ian S. Zagon, Dr. Patricia J. McLaughlin and Dr. Jill P. Smith for the treatment of
cancer titled “Opioid Growth Factor and Cancer” and “Combination Therapy with Opioid Growth Factor and Taxanes
for the Treatment of Cancer” (the “Foundation Agreement”).
The
Foundation Agreement requires the Company to: (a) use commercially reasonable efforts to develop, commercialize, market and sell
licensed products in a manner consistent with a business plan; (b) expend a minimum amount of funds per annum to develop and commercialize
licensed products as soon as practicable; (c) obtain all requisite regulatory approvals needed to use or sell licensed products
in the field of use; and (d) make the first commercial sale of a licensed product by December 31, 2016.
The
Foundation Agreement provides that the Company must pay to the licensor an initial license fee, a license maintenance fee on each
anniversary of the effective date of the Foundation Agreement, and an annual running royalty on net sales for each licensed product
or a minimum royalty, whichever is greater. In addition, the Company must pay a sublicense fee on payments received by the Company
from sublicensees.
The
Foundation Agreement also requires the Company to make payments upon the achievement of certain milestone events including: initiation
of each Phase II trial; initiation of each Phase III trial; when the NDA is accepted for review by the FDA; and when FDA approval
to market is approved. The Company must also issue shares upon certain milestones including upon the first dosing of the first
patient in a Phase II clinical trial for each licensed product, upon the first dosing of the first patient in a Phase III clinical
trial for each licensed product, upon the first sale of each licensed product, and upon the achievement of a set dollar amount
of cumulative sales for each licensed product covered by NDAs.
The
Foundation Agreement terminates on the expiration or abandonment of the last patent to expire or become abandoned. The Company
may terminate the Foundation Agreement at any time upon 60 days’ prior written notice and ceasing to make and sell all licensed
products, the termination of all sublicenses and payment of all monies owed under the Foundation Agreement. The licensor may terminate
the agreement 30 days after notice to the Company if the Company is 30 days late in payment or a breach that remains uncured for
45 days after written notice of such breach
The
Penn State Agreement included an upfront execution payment of $100,000 that was previously paid.
Each
year the Company incurs $10,000 in annual payments and maintenance fees on the patents as well as the legal fees in connection
with the pending patents.
The
aggregate future potential milestone payments to be paid are as follows:
|
●
|
One
Hundred Thousand Dollars ($100,000) upon initiation of each Phase II trial.
|
|
|
Two
Hundred Fifty Thousand Dollars ($250,000) upon initiation of each Phase III trial.
|
|
●
|
One
Million Dollars ($1,000,000) to be paid as follows: Two Hundred Fifty Thousand ($250,000) when the NDA is accepted for review
by the FDA and Seven Hundred Fifty Thousand ($750,000) when FDA approval to market is approved.
|
|
●
|
First
dosing of first patient in a Phase II trial for each Licensed Product 250,000 shares
|
|
●
|
First
dosing of first patient in Phase III trial 50,000 shares for each Licensed Product.
|
|
●
|
First
Sale of each Licensed Product in the United States and/or Canada 100,000 shares.
|
|
●
|
Achievement
of Twenty Million Dollars ($20,000,000) in cumulative Sales for each Licensed Product covered by NDA’s 200,000 shares
of common stock.
|
Royalty
rates are equal to four percent (4%) of Net Sales of US and Canadian sales.
Professor
Fengping Shan
In
May of 2013, the Company executed a Patent License Agreement with Professor Fengping Shan (the “Shan Agreement”) pursuant
to which it obtained exclusive rights to develop and commercialize the licensed technology. The licensed technology is the intellectual
property developed and owned by Professor Shan (i) relating to the treatment of a variety of diseases and conditions with MENK
including multiple forms of lymphoma and cancer and (ii) a treatment method for humans infected with the HLTV-III (AIDS) virus
including AIDS and AIDS related complex (ARC). The licensed technology includes the methods and formulations for these treatments
including all INDs, communications with regulatory agencies, patient data, and letters relating to these treatments. The licensed
technology also includes certain patents developed by Professor Shan.
Under
the Shan Agreement, the Company must issue 500,000 shares to Professor Shan upon final transfer of the licenses, and reimburse
Professor Shan for all out of pocket expenses in connection with the patents. The Company will pay Professor Shan a running royalty
on gross sales subject to decreases if third party intellectual property is needed to complete such sale or product. The Shan
Agreement lasts for the duration of each of the licensed patents however the Company may terminate the Shan Agreement on 120 days’
written notice to Professor Shan.
The
payment provisions under the Shan Agreement do not provide any up-front or executions payments and no aggregate amounts have been
paid or received under the agreement. No future potential milestone payments will be paid or received either. The royalty rate
under the agreement is .5% and there are no profit or revenue-sharing provisions to be followed.
On
August 6, 2014, Professor Fengping Shan executed an Assignment pursuant to which he transferred to the Company his entire right,
title and interest in and to the licensed patents under the Shan Agreement and CN 201210302259 Application of combination of low-dose
naltrexone and methionine-enkephalin to preparation of anti-cancer drug for the consideration of 500,000 shares of common stock
valued at $140,000.
Patents Overview:
Patent:
|
|
Title:
|
|
Expiration:
|
|
License/Assigned:
|
|
Product
or Use:
|
|
|
|
|
|
|
|
|
|
U.S.
Patent Number 6,586,443
(Related
to US 5,356,900, 5,013,739 and 4,888,346 – all expired)
(No
related foreign patents)
|
|
Multiple
sclerosis in a human patient is treated by the administration preferably via a pharmacologically effective route of an essentially
pure opiate receptor antagonist.
|
|
January
3, 2019
|
|
Exclusive
License from Jacqueline Young.
|
|
IRT-103
(LDN)
|
|
|
|
|
|
|
|
|
|
U.S.
Patent Number 6,384,044
(No
related foreign patents)
|
|
Cancer
of the prostate in human male patients even at an advanced state with metastasis to other organs is preferably treated by
administration.
|
|
November
8, 2019
|
|
Exclusive
License from Jacqueline Young.
|
|
IRT-103
(LDN)
|
|
|
|
|
|
|
|
|
|
U.S.
Patent Number 6,288,074
(No
related foreign patents)
|
|
Lymphoproliferative
syndrome, including such diseases as malignant lymphoma, chronic lymphocytic leukemia, Hodgkin’s lymphoma, and non-Hodgkin’s
lymphoma, are treated in human patients via administration.
|
|
November
15, 2019
|
|
Exclusive
License from Jacqueline Young.
|
|
IRT-103
(LDN)
|
|
|
|
|
|
|
|
|
|
U.S.
Patent Number 6,136,780
(Related
to US 6,737,397)
(No
related foreign applications)
|
|
Control
of cancer growth through the interaction of [Met5] - Enkephalin and the zeta (s) receptor.
|
|
May
17, 2021
|
|
Exclusive
License: Penn State University.
|
|
IRT-101
(MENK)
and
IRT-103 (LDN)
|
|
|
|
|
|
|
|
|
|
U.S.
Patent No. 6,737,397
(Related
to US 6,136,780)
(No
related foreign applications)
|
|
Control
of cancer growth through the interaction of [Met5]-Enkephalin and the zeta receptor.
|
|
May
17, 2021
|
|
Exclusive
license: Penn State University.
|
|
IRT-101
(MENK)
and
IRT-103 (LDN)
|
U.S.
Patent No. 7,879,870
(US
PgPub 2008/0015211)
(No
related foreign patents)
|
|
Treatment
of inflammatory and ulcerative diseases of the bowel with opioid antagonists.
|
|
February
1, 2028
|
|
License
to Cytocom Inc.: Dr. Jill Smith and LDN Research Group, LLC.
|
|
IRT-103
(LDN)
|
|
|
|
|
|
|
|
|
|
Israeli
Patent mentioned in license
|
|
Treatment
of inflammatory and ulcerative diseases of the bowel with opioid antagonists.
|
|
Pending
|
|
License
to Cytocom Inc.: Dr. Jill Smith and LDN Research Group, LLC.
|
|
Treatment
of Crohn’s disease
|
|
|
|
|
|
|
|
|
|
U.S.
Application Number: 11/061,932
(Claims
Priority to US60/548,021)
Canadian
Application Number: 2,557,504 (Pending)
|
|
Combinatorial
therapies for the treatment of neoplasias using the opioid growth factor receptor.
|
|
Pending
application
|
|
Exclusive
license: Penn State University.
|
|
IRT-101
(MENK)
|
|
|
|
|
|
|
|
|
|
U.S.
Patent No. 8,003,630 (Application Number: 11/510,682)
(US
PgPub 2007/0053838)
(Claims
Priority to US60/548,021)
|
|
Combinatorial
therapies for the treatment of neoplasias using the opioid growth factor receptor.
|
|
May
22, 2028
|
|
Exclusive
license: Penn State University.
|
|
IRT-101
(MENK)
|
|
|
|
|
|
|
|
|
|
U.S.
PgPub 2013/0084242 A1
(Application
Number: 13/660,129)
(Claims
Priority to US60/548,021)
Patent
Cooperation Treaty (PCT) application:
PCT/US2010/030967
(Claims
priority to US61/173,351)
|
|
Combinatorial
therapies for the treatment of neoplasias using the opioid growth factor receptor.
|
|
Pending
|
|
Exclusive
license: Penn State University.
|
|
IRT-101
(MENK)
|
|
|
|
|
|
|
|
|
|
US
7,807,368
(US
PgPub 2008-0146512 A1)
(No
related foreign applications)
|
|
Cyclin-dependent
kinase inhibitors as targets for opioid growth factor treatment.
|
|
October
4, 2027
|
|
Exclusive
license: Penn State University.
|
|
IRT-101
(MENK)
|
US
7,576,180
(Claims
priority to US60/106,879)
(There
is a related PCT application PCT/US1999/025802, claiming priority to the US60/106,879, but no National Phase applications
were filed)
|
|
Opioid
growth factor receptors.
|
|
August
17, 2026
|
|
Exclusive
license: Penn State University.
|
|
IRT-101
(MENK)
|
|
|
|
|
|
|
|
|
|
US
7,122,651
(No
related foreign applications)
|
|
Novel
nucleic acid molecules encoding opioid growth factor receptors.
|
|
October
17, 2023
|
|
Exclusive
license: Penn State University.
|
|
Treatment
of cancer
|
US
7,517,649
(US
PgPub 20060073565)
(No
related foreign applications)
|
|
Methods
of detecting opioid growth factor receptor (OGFr) in tissue.
|
|
April
13, 2026
|
|
Exclusive
license: Penn State University.
|
|
IRT-101
(MENK)
|
|
|
|
|
|
|
|
|
|
CN
200910011030
(No
related U.S. applications)
|
|
Shan
Fengping, Nikola Polonikov, Lu Changlong: Application of naloxone and composition thereof in preparing drug for treating cancer.
Shan Fengping: August 26, 2009.
|
|
August
23, 2026
|
|
Assigned
by Fengping Shan.
|
|
IRT-101
(MENK)
and
IRT-103 (LDN)
|
|
|
|
|
|
|
|
|
|
CN
200710051586
(No
related U.S. applications)
|
|
Huang
Jianyin, Zhang Ding, Shan Fengping, Luo Zhinong: Application of methionine enkephalin in preparing human or animal vaccination.
Huang Jianyin: August, 20 2008.
|
|
August
20, 2025
|
|
Assigned
by Fengping Shan.
|
|
IRT-101
(MENK)
|
|
|
|
|
|
|
|
|
|
CN
200710158742
(No
related U.S. applications)
|
|
Shan
Fengping, Lv Changlong, Nikola Polonikov, Huang Jianyin: Application of compounds Methionine Enkephalin for preparing medicine
for curing blood medulla hematopoietic system cancer. Dan Fengping: May 14, 2008.
|
|
May
13, 2025
|
|
Assigned
by Fengping Shan.
|
|
IRT-101
(MENK)
|
CN
200610046249
(No
related U.S. applications)
|
|
Shan
Fengping, Lv Changlong, Huang Jianyin, Zhang Ding, Luo Zhinong: Aerosol containing Met-Enkephalin. Shan Fengping: November
15, 2006.
|
|
November
14, 2023
|
|
Assigned
by Fengping Shan.
|
|
IRT-101
(MENK)
|
|
|
|
|
|
|
|
|
|
CN
200310120896
(No
related U.S. applications)
|
|
Shan
Fengping, Li Li: Integrated health food for regulating human body immune balance. Liaoning Academy of Microorganism Sciences:
July 6, 2005.
|
|
July
5, 2022
|
|
Exclusive
license: Nicholas Plotnikoff and Fengping Shan.
|
|
Oncology
treatments
and
cancer treatment
|
|
|
|
|
|
|
|
|
|
WO
2007/067753
(PCT/US2006/046925
|
|
Huang
John, Chang Ding, Lo Shi-Lung, Shan Fengping: Methods of reducing side effects in cancer therapy. Penta Biotech: June 14,
2007.
|
|
Pending
|
|
Exclusive
license: Fengping Shan.
|
|
IRT-101
(MENK)
|
CN
200510019964
|
|
Huang
Jianyin, Zhang Ding, Luo Zhinong, Shan Fengping: Use of Methionine Enkephalin in preparation of medicine for reducing toxic
side effects of chemical or radioactive therapy. Huang Jianyin: August 9, 2006.
|
|
August
8, 2023
|
|
Exclusive
license: Fengping Shan.
|
|
IRT-101
(MENK)
|
|
|
|
|
|
|
|
|
|
US
PgPub 2003/0148942 A1
(Application
Number: 10/146,999)
Our
Docket #6463-0101PUS1
(Claims
Priority to US60/291,237)
|
|
Methods
for inducing sustained immune response.
|
|
May
16, 2022
|
|
Assigned
and licensed: Nicholas Plotnikoff.
|
|
IRT-101
(MENK)
|
|
|
|
|
|
|
|
|
|
Russian
Application 2003136161/14
(Claims
Priority to US60/291,237)
|
|
Methods
for inducing sustained immune response.
|
|
May
16, 2022
|
|
Assigned
and licensed: Nicholas Plotnikoff.
|
|
IRT-101
(MENK)
|
|
|
|
|
|
|
|
|
|
PCT
application PCT/US2002/018529
(Claims
priority to the US60/291,237)
|
|
Methods
for inducing sustained immune response.
|
|
May
16, 2022
|
|
Assigned
and licensed: Nicholas Plotnikoff.
|
|
IRT-101
(MENK)
|
National
Phase entries filed off the PCT/US2002/018529
China
02814327.2
(Pending)
EP
App 2002746503 Granted: November 29, 2006
India
Patent No. 220265 (App 01627/KOLNP/2003)
Japan
App Withdrawn
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Methods
for inducing sustained immune response.
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May
16, 2022
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Assigned
and licensed: Nicholas Plotnikoff.
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IRT-101
(MENK)
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China
Patent 200810229085
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The
invention belongs to the technical field of treating tumors by immunization therapy. In particular, a method for treating
intestinal cancer and pancreatic cancer cells by Methionine Enkephalin under conditions of in-vivo injection and in-vitro
cell culture so as to achieve the treating aim.
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March
21, 2026
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Assigned
by Fengping Shan.
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IRT-101
(MENK)
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Employees
As
of December 31, 2016, the Company had 5 full time employees.
Reports
to Security Holders
Our
common stock is registered under the Securities Exchange Act of 1934 and we are required to file current, quarterly and annual
reports and other information with the SEC. You may read and copy any document that we file at the SEC’s public reference
facilities at 100 F. Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-732-0330 for more information about its
public reference facilities. Our SEC filings are available to you free of charge at the SEC’s web site at www.sec.gov. We
are an electronic filer with the SEC and, as such, our information is available through the Internet site maintained by the SEC
that contains reports, proxy and information statements and other information regarding issuers that file electronically with
the SEC. This information may be found at www.sec.gov and posted on our website at www.immunetherapeutics.com.
Research
and Development
Our
research and development (“R&D”) organization focuses primarily on new uses for the opioid-related immuno-therapies,
such as LDN and MENK. These therapies stimulate the immune system in such a way that provides the potential to treat a variety
of diseases that have abnormalities in the immune system.
Our
R&D priorities include development of MENK IRT-101, a small synthetic pentapeptide that is naturally occurring in the body,
and LDN IRT-103, an opioid receptor antagonist. Our pipeline provides two therapies with an extremely wide range of indications
that can be pursued. Both molecules have the ability to stimulate and/or regulate the immune system in order to treat a variety
of autoimmune diseases including multiple sclerosis, immune disorders such as Crohn’s disease, cancer, and viral infections
such as HIV/AIDS.
Our
R&D is overseen and managed internally, working with individuals, universities, and Contract Research Organizations (“CROs”)
in order to utilize patents that we have licensed or acquired since our inception. We continue to seek to expand our pipeline
by reviewing other compounds, technologies or capabilities. We also seek out promising compounds and innovative technologies developed
by third parties to incorporate into our discovery and development processes or projects.
Drug
discovery and development is time-consuming, expensive and unpredictable. According to the Pharmaceutical Research and Manufacturers
of America (PhRMA), out of 5,000-10,000 screened compounds, only 250 enter preclinical testing, five enter human clinical trials
and one is approved by the FDA. The process from early discovery or design to development to regulatory approval can take more
than 10 years. Drug candidates can fail at any stage of the process, and candidates may not receive regulatory approval even after
many years of research.
As
of December 31, 2015, we had two compounds (IRT-101 and IRT-103) in research and development. In 2015 our development programs
focused on both compounds, one in oncology and one in Crohn’s disease; which we are expecting to move into Phase II clinical
trials.
The
following table provides information about notable regulatory actions by, and filings pending with the FDA and regulatory authorities
in the EU, as well as additional indications and new drug candidates in late-stage development.
NEW
DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT
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CANDIDATE
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INDICATION
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REGULATORY
ACTIONS
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IRT-101
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Pancreatic
Cancer
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End-of-Phase
1 Meeting with FDA Complete 3Q 2013
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IRT-103
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Crohn’s
Disease
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Type
C Meeting with FDA Complete 2Q 2013
Scientific
Advice with EMA Complete 1Q 2014
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The
Company expects it will incur future research and development expenditures in the next 12 months through Cytocom. Cytocom plans
to conduct Phase II and Phase IIB trials for the treatment of IRT-103 Crohn’s disease, at an estimated cost of $3,900,000
and $7,500,000 respectively for each phase. If the trials do not commence before the end of 2017, the Company will be required
to make a payment of $100,000 in December 2017 under its license agreements. In prior years, the Company has been able to raise
funds through sales of notes payable, and it expects to do the same for the payment due in 2017. With funding Cytocom will be
responsible for the development of IRT-101 MENK for pancreatic cancer.
Government
Regulations
United
States
The
research, testing, manufacturing, labeling, approval, selling, import, export, marketing and distribution of drug products are
subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries with regulations
differing from country to country. Neither we nor our collaboration partners are permitted to market our drug candidates in the
United States until we receive approval of a New Drug Application (“NDA”) from the FDA. Neither we nor our collaboration
partners have submitted an application for or received marketing approval for any of our drug candidates. Obtaining approval of
an NDA can be a lengthy, expensive and uncertain process.
Prior
to receiving approval to commercialize any of our drug candidates in the United States or abroad, we and our collaboration partners
must demonstrate with substantial evidence from well controlled clinical trials, and to the satisfaction of the FDA and other
regulatory authorities abroad, that such drug candidates are safe and effective for their intended uses. Results from preclinical
studies and clinical trials can be interpreted in different ways. Regulatory approval of an NDA or NDA supplement is not guaranteed,
and the approval process is expensive and may take several years.
Before
a drug can be tested in people, the sponsor (in this case the Company) performs laboratory and animal tests to discover how the
drug works and whether it’s likely to be safe and effective in humans. As LDN and MENK have previously been used in clinical
trials, this phase of development was not required by the Company to initiate clinical trials under its applications.
Next,
a series of tests in people (i.e. clinical trials) is begun to determine whether the drug is safe when used to treat a disease
and whether it provides a real health benefit. The clinical phase typically starts at Phase 1 and progresses to Phase 3. The Company
will have an abbreviated list of clinical trials that need to be conducted due to published literature on previously conducted
studies, as well as utilizing the approval of naltrexone previously at 50 mg by the FDA.
Upon
completion of the clinical trials, the Company will send the FDA and/or the EMA the evidence from these tests to prove the drug
is safe and effective for its intended use (New Drug Application (NDA) in the US or Marketing Authorization Application in the
EU). The regulatory bodies will review these data and determine if the sponsor has approval to market the product at the specified
dose(s) and formulation(s) for the specified indication(s) (
http://www.fda.gov/Drugs/DevelopmentApprovalProcess/default.htm)
.
Once
regulatory approval has been granted, the approved product and its manufacturer are subject to continual review by the FDA and/or
non-U.S. regulatory authorities. Any regulatory approval that we or our collaboration partners receive for our drug candidates
may be subject to limitations on the indicated uses for which the product may be marketed or contain requirements for potentially
costly post-marketing follow-up studies to monitor the safety and efficacy of the product. In addition, if the FDA and/or non-U.S.
regulatory authorities approve any of our drug candidates, we will be subject to extensive and ongoing regulatory requirements
by the FDA and other regulatory authorities with regard to the labeling, packaging, adverse event reporting, storage, advertising,
promotion and recordkeeping for our products. In addition, manufacturers of our drug products are required to comply with current
cGMP regulations which include requirements related to quality control and quality assurance, as well as the corresponding maintenance
of records and documentation. Further, regulatory authorities must approve these manufacturing facilities before they can be used
to manufacture our drug products, and these facilities are subject to continual review and periodic inspections by the FDA and
other regulatory authorities for compliance with cGMP regulations.
European
Union
We
intend to seek distribution and marketing partners for IRT-101 (MENK) and IRT-103 (LDN) in the European Union (“EU”).
To market our future products in the European Economic Area (“EEA”) (which is comprised of the 27 member states of
the EU plus Norway, Iceland and Liechtenstein) and many other foreign jurisdictions, we must obtain separate regulatory approvals.
More concretely, in the EEA, medicinal products can only be commercialized after obtaining a Marketing Authorization (“MA”).
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The
Community MA is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee
for Medicinal Products for Human Use of the EMA, and is valid throughout the entire territory of the EEA. The Centralized
Procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products,
and medicinal products indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and
viral diseases. The Centralized Procedure is optional for products containing a new active substance not yet authorized in
the EEA, or for products that constitute a therapeutic, scientific or technical innovation or which are in the interest of
public health in the EU.
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National
MAs, which are issued by the competent authorities of the member states of the EEA and only cover their respective territory,
are available for products not falling within the mandatory scope of the Centralized Procedure. Where a product has already
been authorized for marketing in a member state of the EEA, this National MA can be recognized in another member state through
the Mutual Recognition Procedure. If the product has not received a National MA in any member state at the time of application,
it can be approved simultaneously in various member states through the Decentralized Procedure.
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Under
the procedures described above, before granting the MA, the EMA or the competent authorities of the member states of the EEA make
an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and
efficacy.
Our
IND is being conducted per 21 Code of Federal Regulations Title 21, Part 312. In addition, we follow ICH guidelines, including
good clinical practices (ICH E6) and current good manufacturing practice (ICH Q7) throughout the development process. After completion
of Phase III clinical trials, the Company will file our NDA for LDN (IRT-103) as a 505(b)(2) application. IRT-103 products will
follow the 505(b)(2) pathway relying on the Reference Listed Drug (RLD) REVIA to support the safety of the product. Efficacy will
be submitted by the Company directly to the LDN NDA. IRT-101 products will follow the traditional approval pathway as a RLD is
not available for MENK. However, published literature will support this program.
Nigeria
NAFDAC
is the equivalent in Nigeria of the FDA. It undertakes registration of food, drugs, medical devices, cosmetics, agrochemicals
and other similar products in Nigeria. At the end of the process, a registration number is given to the product and a registration
certificate is issued to the applicant.
Many
of the African countries do not have a local FDA equivalent organization or agency. We plan to use the NAFDAC Registration as
the guideline for submission in Africa for countries that do not have their own application and approval procedures.
The
Company has partnered with AHAR Pharma, a company duly incorporated and existing under the laws of the Republic of Nigeria to
distribute LDN in the Republic of Nigeria. The distribution agreement was originally signed in 2013 and extended in 2016 for 5
years with an optional 5 year extension. AHAR Pharma is responsible for securing all required governmental or regulatory approvals,
registrations, permits and licenses necessary to market, promote, offer for sale, sell, supply and distribute LDN in the Republic
of Nigeria. Pursuant to the distribution agreement, the Company shall pay AHAR Pharma twenty-five U.S. cents for each tablet sold.
Of the twenty-five cents paid, twelve and a half cents may be credited against the Company’s invoices and twelve and a half
U.S. cents shall be paid to AHAR Pharma’s affiliate GB Pharma.
In
addition, the Company has worked with GB Pharma Holdings since its formation in 2012. Over the last two years GB Pharma has worked
directly with the NAFDAC and Minister of Health’s in Africa and the African Union on the approval of Lodonal™ for
HIV/AIDS in Africa. GB Pharma has also worked to introduce LDN to the UNAIDS and World Health Organization. Dr. Gloria Herndon,
the President of GB Pharma Holdings has traveled extensively to Nigeria, Kenya, Angola and South Africa in the past two years
meeting with and holding discussion about the Company’s immunotherapies. Dr. Herndon has spoken on behalf of the Company
at a number of conferences and was responsible for the introduction of the therapy to the Africa Union and the Champions, a group
of former presidents of Africa to help promote the approval through the various in-country agencies.
The
Company’s wholly owned subsidiary, Airmed Biopharma Limited, entered into an Exclusive Agency Agreement with GB Parma Holdings,
Inc. on June 12, 2014 to distribute Lodonal™ in various emerging markets including Equatorial Guinea. Pursuant to the distribution
agreement, GB Pharma shall be entitled to a commission of 5% of the net product sales. The Company’s relationships with
the GB Pharma and its subsidiaries and affiliates are contractual, with the rights and obligations of the parties dictated by
their respective agreements. GB Pharma and certain of its affiliates may also now own, or in the past owned, minority share positions
in the Company via their investments or shares granted for services.
Malawi
No
formal governmental agency is in place in Malawi to govern the application of a new drug. Malawi is a member of the Southern Africa
Development Community (“SADC”). The SADC has been making efforts to synchronize the regulation of medication in the
SADC countries.
The
guidelines require filing an application prior to approval of registration. However, these guidelines are preliminary. The Regional
Indicative Strategic Development Plan (“RISDP”) is a comprehensive development and implementation framework guiding
the Regional Integration agenda of the SADC over a period of fifteen years (2005-2020). It is designed to provide clear strategic
direction with respect to SADC programs, projects and activities in line with the SADC Common Agenda and strategic priorities,
as enshrined in the SADC Treaty of 1992.
In
July 2014, the Republic of Malawi approved Lodonal™ as an adjunct for the treatment of cancer. Protocols for a Lodonal™
trial were approved in November 2015. The Brewer Group, Inc. has paid for production of the first shipment to Malawi of Lodonal™,
which was delivered to Malawi from Nicaragua in 2015.
The
Company and the Brewer Foundation arranged for the donation of the Wallach LL100 Cryosurgical system that were necessary to run
the trial and treat patients with cervical cancer. In July 2014, the Republic of Malawi approved Lodonal™ as an adjunct
for the treatment of cancer. Protocols for a Lodonal™ trial were approved in November 2015.
In
2012, the Company started its collaboration with the Brewer Foundation and the Brewer Group. Over the last two years The Brewer
Group and Foundation has worked directly with the Government of Malawi on the approval of the clinical trials and protocols. Once
the protocols were approved the Brewer Group help to arrange funding for the trials.
The
Brewer Group has entered into a distribution agreement with Airmed Bioparhma Limited, a wholly owned subsidiary of the Company,
to distribute Lodonal™ in emerging markets. The distribution agreement was entered into in 2014 and has a term of 5 years.
Pursuant to the distribution agreement the Company shall sell Lodonal™ to The Brewer Group at a 25% discount to the list
price. The Brewer Group has also arranged a number of meetings with various hedge funds in New York to assist with the funding
of the company.
The
Company’s relationships with the Brewer Group and Brewer Foundation are contractual, with the rights and obligations of
the parties dictated by their respective agreements. The Brewer Group, Brewer Foundation and certain of their affiliates may also
now own, or in the past owned, minority share positions in the Company via their investments or shares granted for services.
Equatorial
Guinea
Equatorial
Guinea does not have procedures for the official approval of traditional medical practices or remedies. Accordingly, the Company
was requested to make a presentation to the Health Sector and Minister on the use of naltrexone in the treatment of certain indications.
After due discussion, the Government approved the following:
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1.
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Drug
use naltrexone (4.5 mg) in the treatment of diseases requiring immune system stimulating cancer, HIV infection, multiple sclerosis,
etc., as demonstrated by the Company, at a cost of $1/day or 450 x F.CFA/day.
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2.
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Management
– laboratory for quality control and to analyze drugs imported in to Equatorial Guinea.
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3.
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The
implementation of local production of quality essential medicines.
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The
Company’s wholly owned subsidiary Airmed Biopharma Limited, entered into an Exclusive Agency Agreement with GB Parma Holdings,
Inc. on June 12, 2014 to distribute Lodonal™ in various emerging markets including Equatorial Guinea. Pursuant to the distribution
agreement, GB Pharma shall be entitled to a commission of 5% of the net product sales.
China
On
October 18, 2012, the Company and Hubei Qianjiang Pharmaceutical Co., Ltd. (“Qianjiang Pharmaceutical”), signed a
Venture Cooperation Agreement on New Drug Methionine Enkephalin (the “Venture Agreement”) pursuant to which Qianjiang
Pharmaceutical acquired an exclusive license for the production of MENK in China. The Venture Agreement requires that Qianjiang
Pharmaceutical conduct drug research and pilot testing for MENK, organize pre-clinical studies, and apply for clinical trials
for MENK with the Chinese State Food and Drug Administration. Under the Venture Agreement, Qianjiang Pharmaceutical must open
a co-administration account for the development of MENK in China. Qianjiang Pharmaceutical must pay the Company, upon the marketing
of MENK products, a half-year amount equaling 6% of its gross sales from MENK of the preceding half year.
Qianjiang
Pharmaceutical is required to obtain all approvals and permits required for the importation and sale of the Company’s products
in China.
The
Company may cancel the Venture Agreement if Qianjiang Pharmaceutical does not pay expenses for a period exceeding nine months
or does not commence clinical trials within 12-months after receiving certain approvals. Qianjiang Pharmaceutical may cancel the
Venture Agreement if the Company fails to perform its obligations for a period of nine months or the failure to receive approval
of clinical trials is due to the Company’s MENK technologies.
On
August 6, 2014, the Company entered into a Supplementary Agreement on New Drug Methionine – Enkephalin Cooperation (the
“Amendment”) with Qianjiang Pharmaceutical, amending the Venture Agreement, as amended. The Company and Qianjiang
Pharmaceutical executed the Amendment to accelerate clinical trials in both the United States and China, and agreed to immediately
initiate three month Good Laboratory Practice (“GLP”) Toxicology Studies (rat and dog) within 30 days of signing the
Amendment. The Amendment requires that the GLP Toxicology Studies Trials are conducted in China in accordance with international
standards and standards acceptable to the FDA.
The
Company modified the agreement one more time due to the fact toxicology studies were not completed by the end of 2015 as others
steps were required before the studies could start.
Qianjiang
has completed the formulation and required Chemistry, Manufacturing, and Controls (“CMC”) for Methionine–Enkephalin.
All work was completed in China in accordance with international cGMP standards acceptable to the U.S. Food and Drug Administration
with Chinese Peptide Company (“CPC”). CPC is among only a handful of companies in the world that can claim both ISO
Certification and cGMP licensing. In February 2012, we became the first peptide company to successfully pass US FDA inspection
outside of US and Europe regions.
Nicaragua
and Dominican Republic
Laboratorios
Ramos in Managua, Nicaragua has been issued approval from the Minster of Health to manufacture Naltrexone for the Company under
the trademark name Lodonal™. The certificate of free sale allows Naltrexone to be exported from the Managua facility to
other jurisdictions where the Company is approved to market and sell Naltrexone in satisfaction of the import requirements of
such jurisdictions. The free sale certificate is not a license for export, which is issued separately for a specific product in
both the country of export as well as the country of import.
Due
to political developments in Nicaragua in the second half of 2016, the Company decided it would be prudent to obtain a second
source of LDN product supply for sales outside of North America. In October 2016, the Company and Acromax Dominicana, SA (“Acromax”)
entered into a contract for the manufacture of LDN tablets, capsules and/or creams (“Agreement”). Acromax is located
in Santo Domingo; in the Dominican Republic. It is both cGMP certified and ISO 9001: 2008 certified. Acromax exports over 160
products and has sold throughout the Caribbean and Central and South America. More information about Acromax is available at
http://acromaxdominicana.com/
.
The
Agreement has an initial term of five years unless terminated by either party in accordance with the terms. Subject to the terms
and conditions of the Agreement, Acromax will obtain all necessary licenses and permits to carry out the manufacturing and packaging
of LDN in exchange for a fixed fee per tablet plus an additional fee for packaging, shipping and customs clearance. In 2017, Acromax
received approval from the Ministry of Public Health and Social Assistance to manufacture and sell Naltrexone both in the Dominican
Republic as well as for export on behalf of TNI BioTech International under the trademark name Lodonal™. The company was
granted and issued a Certificate of Pharmaceutical Product (“COPP”) for the following countries: Nigeria, Senegal,
Kenya and Malawi. We expect to add additional countries to the COPP in 2017.
Business
Strategy
The
Company’s short-term business strategy focuses on several key areas described below, all of which are being undertaken simultaneously.
International
Regulatory Approval in 2017:
The Company has been in discussions with drug regulators regarding the regulatory and approvals
process for sale of its products in 2017 in a number of countries: South Africa, Nigeria, Malawi, Kenya, Angola, Niger, Gabon,
Egypt, Sri Lanka, and China. The process can take between four to 12 months depending on the local authorities. In December 2016,
the Company presented the final results of a bridging trial in Nigeria. As of March 31, 2017, we are still awaiting receipt
of final approvals for sale of Lodonal™ in Nigeria. The Company has begun discussions for a 90-day Lodonal™
bridging trial as an adjunct to chemotherapy in Kenya. If we complete the Kenya trial and if we meet the primary and secondary
end points, the Company expects to receive approval for Lodonal™ as an adjunct treatment for cancer in Kenya. An approval
in Nigeria would allow the Company to fast track approvals in other countries.
While
working on regulatory approval throughout Africa, The Company has begun discussions with a number of international organizations
including the World Health Organization, the Joint United Nations Programme on HIV/AIDS (UNAIDS), and PATH, an international nonprofit
organization dedicated to saving lives and improving health, especially among women and children. The Company expects to reach
agreements with them in the coming year.
Establish
Partnerships in Africa:
Receipt of the recent approvals in Nigeria will allow the Company to establish partnerships in Africa
with large employers that maintain onsite clinics; there is increasing recognition that health creates wealth and advances GDP.
HIV and AIDS have had a significant negative impact on labor and productivity. The vast majority of people living with HIV in
Africa are of working age 15-49 years old. The Company believes that Lodonal™ can be used as a prophylactic to avoid many
of the standard opportunistic infections accompanied with HIV and cancer. The Company will now move forward on this program if
it receives approval for Lodonal™ sales in Nigeria.
Funding
Cytocom Inc. Clinical Trials:
If we generate significant revenue from sales to Africa and under the licensing of our LDN formulation
to., which is described in detail below under “Agreements to Promote Development and Sale of Company Products,” we
believe that in 2017 we will be able to commit financial resources to help fund Cytocom Inc.’s clinical trials in the United
States to validate the use of Lodonal LDN in a number of indications. Unless other funding becomes available, the Company expects
to use revenue from the sale of Lodonal™ in Nigeria to help underwrite clinical trials in the U.S. and Europe.
Clinical
Studies:
In
2016, the Company focused on receipt of approvals in Nigeria and Malawi to conduct clinical development programs for Lodonal™.
We completed a trial in Nigeria in December 2016, and we have final NAFDAC approval to commence sales in Nigeria. The Company
also expects to commence a bridging trial for cancer in 2017 in the Republic of Malawi for Lodonal as a stand-along therapy. The
recruitment of study participants, VIA testing and follow up of patients is still on-going. The first evaluation report
from the doctors involved is expected by the end of April 2017 as per the study protocol. Since we have a cancer trial with Lodonal
as an adjunct, we decided to hold off requesting final approval for the second trial until we complete our first trial, which
is expected to occur in the third quarter of 2017.
On
the regulatory front, Cytocom Inc. has held constructive dialogue with the FDA with respect to appropriate trial designs and study
protocols for Lodonal™ and IRT-101. The Company has received approval for a phase IIB/III to be run in conjunction with
this trial, but as of the date of this Report the FDA remains in the process of determining the primary endpoint for the trial
for Crohn’s Disease. The Company has retained Cote Orphan to submit a final package to the FDA during the third quarter
of 2017.
Cytocom
Inc.’s immediate focus will be on pediatric and adult Crohn’s Disease. The Company expects recruitment in both pharmacokinetic
(PK) and Dosing Trials for Lodonal™ to begin in 2017 as long as funds are available.
In
addition to the trial design as described immediately above, the Company intends to undertake a Toxicologist and PK study in China
with its partner, Hubei Qianjiang Pharmaceutical Co., Ltd, for IRT-101 for the purpose of furthering its understanding of the
effect of the pharmacokinetics of IRT-101. The trial has been delayed until 2017 because the State Food and Drug Administration
of the People’s Republic of China on the Safety of Drugs and Medical Devices (SFDA) has required chemistry, manufacturing
and controls to be completed before the start of the toxicology study. Quinjiang expects to have the PK and Toxicology studies
completed before the end of the year. This will allow the Company to better understand the potential for drug interactions to
further optimize treatment for Phase 3 development of IRT-101 for cancer in both the United States and China. These trials are
required before Hubei can file for a phase III trial for liver cancer with the SFDA.
The
Company recently received the pharmacology and toxicology reports for MENK completed at GLP Lab by Hubei Qianjiang on. In addition
to the pharmacology and toxicology, China Peptide Company has completed the Chemistry, Manufacturing, and Controls (
CMC
)
required to file with both the SFDA and the FDA, as no pivotal trial can be started without CMC.
Strategy
for Growth:
Since
2015, the Company has worked aggressively to build the business both upward and outward. It has worked to create a multi-faceted
leader in immunotherapies by exploring opportunities beyond HIV/AIDS and cancer in emerging nations.
The
goal and strategic vision is to build a diverse pipeline and to develop and commercialize novel drug treatments to improve the
lives of patients suffering from chronic often life-threating disease.
To
fulfill these goals, the Company received funding from the sale of stock, the exercise of stock warrants and issuance of notes
payable totaling approximately $3.0 million in 2016. The Company anticipates generating revenues in 2017 from a number of sources,
including revenues from the use of its formulation and patents and the sale of Lodonal™ in Nigeria, Malawi, Kenya, and Equatorial
Guinea.
Company
Growth
:
To
build visibility and positive awareness of the Company, management has made presentations at key investor and industry conferences
internationally.
If
the Company receives approvals for the sale of LDN in Nigeria following the 2016 bridging trial there, the Company believes it
will be able to “fast track” the approval process in a number of African nations that will accept NAFDAC Nigeria’s
approval of Lodonal™ for the treatment of HIV/AIDS.
Focus
on HIV/AIDS
HIV/AIDS
remains one of the three global public health threats. This disease results in substantial morbidity, mortality, negative socioeconomic
consequences, and human suffering. Despite the significant increase in financial support and recent progress in addressing HIV/AIDS,
many obstacles and unmet priorities remain.
Disease-specific
interventions must be developed to ensure successful treatments of this disease. Apart from human suffering, the associated high
adult mortality caused by HIV/AIDS, negatively impacts the socioeconomic development in some countries, especially in Nigeria
and South Africa.
Adopting
a treatment regimen for life that involves taking daily medication with potential side effects, presents many challenges that
must be overcome if patients are to successfully remain on treatment. If drug resistance occurs through failure to adhere to antiretroviral
treatments (ARVs), far more expensive second line therapy may be necessary. In some cases drug-resistant strains of HIV are transmitted,
which can impact national treatment programs. Drug resistance has been found to be more prevalent the longer a country has provided
antiretroviral therapies.
The
Company believes Lodonal™ can provide an alternative in areas where patients have stopped taking their therapies due to
side effects, or cost; Lodonal™ has been shown in trials to lessen the toxic side effects of ARVs. In those countries where
people must travel monthly for a medical check-up (and lose a day’s pay), Lodonal™ can cost-effectively provide the
ability to slow the progression of the disease without any toxic side effects.
Nigeria:
In Nigeria, it is estimated that more than 3.6 million people are living with HIV/AIDS, with the annual number of new infections
for adults at 323,000 and 57,000 for children. Currently, only 600,000 people receive HIV treatment (see http://www.unaids.org/en/regionscountries/).
South
Africa:
Based on a wide range of data including the household and antenatal studies, UNAIDS (see http://www.unaids.org/en/regionscountries)
estimated that HIV prevalence was 17.3% among 15-49 year olds at the end of 2011. The high and low estimates were 16.6% and 18.1%,
respectively. This implies that approximately 5.6 million South Africans were living with HIV at the end of 2011, including 460,000
children under 15 years old. By October 2012, only two million people were receiving ARVs. The biggest problem is compliance with
prescribed treatment, as people are required to take pills 2 to 3 times a day at specific times and many times with food with
considerable toxic side effects. In contrast, Lodonal™ is taken only once per day, does not have to be taken with food,
and has no toxic side effects.
Agreements
to Promote Development and Sale of Company Products
The
Company is focused on its lead therapies designed for the treatment of cancer, HIV/AIDS, Crohn’s disease, fibromyalgia and
MS. Management believes the pharmaceutical industry is eager to acquire advanced clinical-phase and approved products. However,
despite the strong demand for advanced clinical-phase products, nearly 4,000 known compounds have had their development suspended
in Phase II or earlier. Many of these are promising therapeutic drug candidates, but their development was discontinued because
of strategic or financial constraints rather than for clinical reasons. Therefore, management believes there are clear market
opportunities with a significant amount of unmet needs and a robust potential for partnering activities.
To
further the business strategy, the Company has entered into relationships with a number of groups to promote the sale of its products
outside the U.S., focusing initially on countries in Africa. They include: The Brewer Group, Inc.; GB Oncology & Imaging Group,
LLC; American Hospitals and Resorts Limited (“AHAR”), an advanced surgical and medical facility, as well as a number
of U.S. doctors that own and operate clinics in the U.S. and Nigeria.
The
Brewer Group, Inc. is an international business advisory firm engaged in the business of identifying and capitalizing on opportunities
with international governments, non-government organizations and professional athletes. The CEO of The Brewer Group is also the
founder and Executive Director of The Jack Brewer Foundation. The Jack Brewer Foundation seeks to provide the Company with medical
equipment where it is needed. Under the Engagement Agreement for Corporate Advisory Services dated February 5, 2013, the Brewer
Group agreed to evaluate the Company’s options for expansion and growth into certain international markets, including Africa
and, upon request, markets in Haiti, the Dominican Republic and/or Panama. Pursuant to the Engagement Agreement, the Brewer Group
agreed to endorse the Company publicly and assist the Company in securing strategic partnership deals to enhance brand and market
awareness. The initial term of the Engagement Agreement was 12 months, with an option for either party to terminate upon 30 calendar
days with written notice to the other party. The agreement has been extended through 2017. The Company has issued the Brewer Group
a total of 6,650,000 shares of its common stock since the signing of the Engagement Agreement.
GB
Pharma lead by Dr. Gloria B. Herndon, a former director and current consultant of the Company has been committed to sourcing sustainable
solutions in the field of health care in Africa, and has been involved since the 1990s on health-care related issues in Africa.
The Company and GB Pharma have continued working with the ministries of health in African countries to provide better access to
and public awareness of the prevention, diagnosis and treatment of cancer and chronic infectious diseases.
In
2015, the Company submitted protocols seeking permission from the Pharmacy, Medicines and Poisons Board of Malawi (“PMPB”)
to conduct two trials involving Lodonal™ in Malawi:
a.
|
The
first protocol, submitted jointly with The Jack Brewer Foundation (“JBF Worldwide”), received PMPB approval on
November 11, 2016. The protocol covers a 12-month trial for a “Single Visit Approach to Cervical Cancer Prevention.”
The approach is designed to deliver a preventive and simple procedure that can be performed in a clinical setting without
the use of a laboratory and to allow for immediate treatment of any precancerous lesions utilizing Wallach LL100 Cryosurgical
systems. The protocol provides for 50% of the patient group to be put on Lodonal™ to determine if the drug lowers the
number of opportunistic infections during the year, and if it can be shown that LDN increases CD4, CE8, NK and T cell count,
which would show that the incidence rates of opportunistic infection could decrease with Lodonal™ and that Lodonal™
could be used as a prophylaxis to prevent substantial HIV-related morbidity in Malawi. The Company expects the final trial
agreement with PMPB to be signed by the end of the third quarter of 2017 as there was a delay in training and recruitment.
|
|
|
b.
|
The
second protocol, which has not yet been approved, covers a trial using Lodonal™ for the treatment of cancer. The protocol
is still under discussion with the PMPB. The Company has held off on this trial as the approval of Lodonal™ in Nigeria
and the pending approval in Kenya and Senegal for cancer treatment will allow it to file for drug approval without the need
for a trial.
|
In
September 2013, TNI BioTech International, Ltd., a wholly-owned subsidiary of the Company, signed a Distribution Agreement with
AHAR Pharma, a Nigerian company, to market Lodonal™, in Nigeria for the treatment of autoimmune diseases and cancer. AHAR
intends to distribute Lodonal™ through a local distributor network, an Internet client base and directly to hospitals, pharmacists
and doctors in Nigeria. The agreement gives AHAR exclusive rights to sell to customers in the private sector and non-exclusive
rights to public-sector companies. The Company may terminate the exclusivity if AHAR fails to meet minimum purchase targets. Unless
terminated earlier, the agreement is valid for five years, subject to the right of the parties to extend for one additional five-year
term. The Company had hoped to implement the agreement in 2015 but did not finish the trial until December 2015. We now anticipate
launch of the product in the third quarter of 2017. This delay was caused by the change in manufacturing from Nicaragua to the
Dominican Republic. Under the agreement, the Company is obligated to provide delivery of an initial supply of between 1 million
and 1.5 million doses of Lodonal™ product to cover AHAR Pharma’s first-year purchase commitment.
In
August 2015, the Company announced the signing of a letter of interest with GB Pharma/AHAR and Fidson Healthcare of Nigeria to
enable Fidson to market and sell Lodonal
TM
in Nigeria. The agreement will become effective if we receive NAFDAC approval
to distribute Lodonal
TM
in Nigeria, based on the 2015 trial evaluating the efficacy and safety of Lodonal™. The
agreement will require an amendment to the agreement signed in September 2013 with AHAR, so that both contracts conform. On January
21, 2016 the company submitted the initial results of the clinical trial to NAFDAC, and on February 22, 2016 AHAR Pharma submitted
final document to NAFDAC requesting the issuance for marketing approval. As of March 31, 2017 the Company is still awaiting
marketing approval for distribution of Lodonal™ in Nigeria under this agreement.
In
September 2014, Airmed Biopharma Limited (“Airmed”), a wholly owned subsidiary of the Company, signed an exclusive
agency agreement with GB Pharma Holdings Inc., to market and promote Lodonal™, and to solicit purchase orders for Lodonal™,
in various counties in Africa. Airmed is required to pay GB Pharma Holdings Inc. a commission based on payments actually received
on purchase orders procured by the GB Pharma Holdings Inc. from customers in Africa during the term of the agreement, after deduction
for certain costs incurred by Airmed for product supply. The agreement has an initial term of five years, with automatic renewals
for additional one-year periods unless terminated by either party.
On
October 18, 2012, the Company and Hubei Qianjiang Pharmaceutical Co., Ltd. (“Qianjiang Pharmaceutical”), signed a
Venture Cooperation Agreement on New Drug Methionine Enkephalin (the “Venture Agreement”) pursuant to which Qianjiang
Pharmaceutical acquired an exclusive license for the production of MENK in China. The Venture Agreement requires that Qianjiang
Pharmaceutical conduct drug research and pilot testing for MENK, organize pre-clinical studies, and apply for clinical trials
for MENK with the Chinese State Food and Drug Administration. Under the Venture Agreement, Qianjiang Pharmaceutical must open
a co-administration account for the development of MENK in China. Qianjiang Pharmaceutical must pay the Company, upon the marketing
of MENK products, a half-year amount equaling 6% of its gross sales from MENK of the preceding half year. The Company may cancel
the Venture Agreement if Qianjiang Pharmaceutical does not pay expenses for a period exceeding nine months or does not commence
clinical trials within 12-months after receiving certain approvals. Qianjiang Pharmaceutical may cancel the Venture Agreement
if the Company fails to perform its obligations for a period of nine months or the failure to receive approval of clinical trials
is due to the Company’s MENK technologies. The Venture Agreement was amended on February 24, 2013 to expand the clinical
trials from pancreatic to both pancreatic and liver cancer and amended on March 6, 2014 to require Qianjiang Pharmaceutical to
commence studies and clinical trials in China and place funds in the co-administration account.
On
August 6, 2014, the Company entered into a Supplementary Agreement on New Drug Methionine – Enkephalin Cooperation (the
“Amendment”) with Qianjiang Pharmaceutical, amending the Venture Agreement, as amended. The Company and Qianjiang
Pharmaceutical executed the Amendment to accelerate clinical trials in both the United States and China, and agreed to immediately
initiate three month Good Laboratory Practice (“GLP”) Toxicology Studies (rat and dog) within 30 days of signing the
Amendment. The Amendment requires that the GLP Toxicology Studies Trials are conducted in China in accordance with international
standards and standards acceptable to the FDA.
In
February 2013, the Company signed a Strategic Framework Agreement for Cooperation with Qianjiang Pharmaceutical. Under the agreement,
the parties will work together to further the development of new products and conduct research and development on the Company’s
licensed patented technology. Specifically, the parties aim to co-invest to develop and market products focusing on HIV, cancer
and related autoimmune system therapies, develop co-ventured manufacturing facilities in China, and develop co-ventured distribution
of the developed products in China and Africa. The agreement does not have a definitive term, as each new agreement resulting
from the cooperation will set forth the material terms, including, but not limited to, fees, duration and termination therein.
In
accordance with these agreements, Qianjiang Pharmaceutical has acquired MENK material for the preclinical and clinical trial.
MENK toxicology studies are in process under the trial, including a six-month toxicology study in animals. Other studies, including
stability and general pharmacology (on normal animals to determine the effect to heart, blood pressure, etc.) have commenced.
All FDA-required tests, including formulation and quality control tests, are in process in China.
The
Company recently received the pharmacology and toxicology reports for MENK at GLP lab completed by Hubei Qianjiang. In addition
to the pharmacology and toxicology, China Peptide has completed the Chemistry, Manufacturing, and Controls (CMC) required to file
with both the SFDA and the FDA, as no pivotal trial can be started without CMC.
Production
On
April 23, 2013, the Company signed a Contract with ViPharma for the Supervision and Inspection of Manufacturing Processes as part
of its negotiations for a contract for the manufacturing of LDN in a tablet, capsule and/or cream. The contract sets out the terms
and conditions under which ViPharma will carry out the services of inspecting and supervising the manufacturing and packaging
processes of LDN and ensure compliance with the FDA’s Current Good Manufacturing Practice regulations (“cGMP”)
and the Company’s specifications. ViPharma will carry out its obligations in whatever Latin American country the Company
ultimately decides to manufacture LDN. Under the contract, ViPharma has the exclusive rights to supervise and inspect all manufacturing
processes of LDN in Latin America. The initial term of the agreement is ten years commencing in September 2013, with automatic
five-year renewal terms provided neither party is in breach. The agreement may be terminated by (i) mutual agreement, (ii) in
the event of a breach after a 45 day cure period or (iii) by either party upon provision of written notice at least 90 days before
the end of the agreement, provided however that if the Company terminates the contract without cause it will be required to pay
ViPharma a $10 million penalty.
The
Company executed a manufacturing agreement with Laboratorios Ramos, a current good manufacturing practice (“cGMP”)
facility for Lodonal™ effective August 16, 2013. Under the agreement, Laboratorios Ramos will produce LDN tablets, capsules
and/or cream in accordance with the technical specifications we provided, cGMPs and the practices of Nicaragua and of any other
regulatory body of the countries where the products will be exported. Laboratorios Ramos has obtained all permits and licenses
necessary to carry out the manufacturing of LDN. The manufacturing agreement has a five-year term, renewable by a signed agreement
by the parties at least 60 days before the expiration of the agreement. The agreement may be terminated earlier through mutual
agreement or upon expiration of a 30-day cure period following notice from the non-breaching party to the breaching party of a
material failure of the obligations under the agreement. Additionally, we may terminate the agreement upon at least 30 days written
notice if Laboratorios Ramos does not act in strict accordance with the technical specifications we provided and with cGMPs or
those of any regulatory body of the importing countries. We will pay Laboratorios Ramos a low single digit cent amount per tablet
or capsule and a low double-digit cent amount per each cream produced.
Raw
Materials and Principal Suppliers
The
Company has decided to enter into third-party manufacturing agreements; accordingly, we rely on third parties for clinical production
of our products and product candidates.
The
active pharmaceutical ingredient (“API”) for initiating clinical trials in the United States has been and will continue
to be sourced from a cGMP-established vendor that has filed or will file a Type II Drug Master File in the United States. Prior
to sourcing, a quality due diligence/vendor qualification will be completed that will include, but is not limited to, a review
of the vendor’s inspection and compliance history with the FDA and, as relevant, the vendor’s inspection and compliance
history with other regulatory bodies (i.e. the European Medicines Agency, or EMA).
The
Company expects that the Finished Pharmaceutical Product (“FPP”) for initiating the proposed clinical trials will
be prepared by a U.S. vendor with extensive cGMP experience, a strong record of compliance with FDA regulations as evidenced by
a site Quality Audit, and an extensive history of manufacturing products administered to humans in the U.S.
American
Peptide Company is the Company’s supplier of the API in MENK. S.A.L.A.R.S SpA supplies the API in LDN.
Competition
The
pharmaceutical industry is characterized by rapidly evolving technology and intense competition. A large number of companies of
all sizes, including major pharmaceutical companies and specialized biotechnology companies, engage in activities similar to ours.
Many of our competitors have substantially greater financial and other resources available to them. In addition, colleges, universities,
governmental agencies and other public and private research organizations continue to conduct research and are becoming more active
in seeking patent protection and licensing arrangements to collect royalties for use of technologies that they have developed.
Some of our competitors’ current or future products and technologies may be in direct competition with ours. We also must
compete with these institutions in recruiting highly qualified personnel.
Established
pharmaceutical companies that currently sell or are developing drugs in our markets of interest include, for example; Abbott Laboratories,
Amgen, AstraZeneca, Biogen Idec, Bayer, Elan, Johnson & Johnson, Merck, Merck Serono, Takeda, Novartis, Pfizer, Reata, Sanofi-Aventis
and Teva. Many or all of these established competitors are also involved in research and drug development regarding various OGF
receptors. Pharmaceutical and biotechnology companies which are known to be involved in immuno therapy research and related drug
development include Pfizer, Bristol-Myers Squibb, Merck, Takeda, Sanofi-Aventis, Incyte, and UCB Pharma, among others.
Protalex,
Inc. is a clinical stage biopharmaceutical company that is developing a class of biopharmaceutical drugs for treating autoimmune
and inflammatory diseases and rtax Biopharma is a clinical stage biopharmaceutical company developing breakthrough therapies for
autoimmune diseases. Its pipeline of drugs is based on novel science that targets the interaction between T-cell receptors (TCR)
and Nck, a key protein involved in T-cell activation.
There
are also comparable companies focused on advancing drugs for various diseases using the FDA’s 505(b)(2) pathway including
Akorn Inc., Chelsea Therapeutics Inc., MAP Pharmaceuticals Inc., Pain Therapeutics Inc., Rexahn Pharmaceuticals Inc., Santarus
Inc., Ventrus Biosciences Inc., and XenoPort Inc.
The
current lack of safe, effective, low cost oral treatments for autoimmune diseases such as multiple sclerosis and Crohn’s
disease provides an attractive opportunity for our product. Treatment of cancer is an unmet medical need in developing countries,
and the need for a safe, effective, low-cost oral treatment provides an opportunity for our Company. Clinical results with LDN
trials support further evaluation of our products in the treatment of Crohn’s disease.
Customers
In
2016, the Company recorded Lodonal™ sales totaling $3,463 to individuals in the USA under its agreement with KRS. The Company
had $16,197 of sales to customers in 2015.
The
Company has made final applications for the importation of Lodonal™ into the Republic of Nigeria and the Republic of Equatorial
Guinea. In Equatorial Guinea, the Company has obtained approval for the sale of the drug, but the government has not allocated
any funds to initiate purchases. In December 2015, NAFDAC granted permission to the Company and AHAR Pharma for a Lodonal™
trial for HIV/AIDS in Nigeria. The objective of this bridging trial was to assure safety and tolerability as well as efficacy
with the local population. The Company completed this trial in December 2016, and as of March 31, 2017 had not yet received
approval for the importation of Lodonal™ in Nigeria.
The
Company, with approval from the Minister of Health in Nicaragua and countries that approve and register the product inclusive
of the Certificate of Pharmaceutical Products issued for that jurisdiction, will look to open distribution channels in Central
and South America in 2017.
Lodonal’s
commercialization in Nigeria was delayed by about three quarters as we replaced our Lodonal manufacturer in Nicaragua in favor
of Dominican Republic. Through our political contacts, we determined the political landscape in Nicaragua was shifting in the
wrong direction and, rather than risk a major, costly supply chain disruption after beginning distribution, our Board decided
to secure a relationship with a second manufacturer.
The
Company signed an agreement with Acromax Dominicana SA October 25, 2016 one of the premier pharmaceutical companies in the Dominican
Republic. Acromax is both cGMP certified but has received ISO 9001: 2008 certification as evidence that they fully meet the requirements
dictated by the said rule and, as a result, is able to meet national and international regulations related to their activities
ensuring quality, safety and reliability of their medicines. Acromax exports over 160 products and has shipped into Nigeria in
the past. This required a new round of regulatory approvals in both Nigeria with NAFDAC and with the Dominican Republic with the
Minister of Public Health and Social Assistance.
The
Dominican Minister of Public Health and Social Assistance granted manufacturing and export approval for Lodonal
TM
on
January 23, 2017, registration number 2017-0068. As of March 16, 2017, the Company had submitted all of the required documents
and samples to NAFDAC to apply for final marketing approval in Nigeria of Dominican-manufactured Lodonal
TM
. The company
is hopes to receive marketing approval by the third quarter of 2017.
Once
the Company obtained drug approval for Lodonal in the Dominican Republic, we were able to begin the new regulatory process in
Nigeria for marketing approval. The Company was required to provide the following documents as part of marketing approval: Acromax
Dossier, Drug Approval issued by the relevant health/regulatory body Dominican Republic, Certificate of Pharmaceutical Products
(COPP – WHO FORMAT); Current Good Manufacturing Practice (GMP) Certificate of the manufacturing facility; Certificate of
Registration of Brand Name with the trademark Registry in the Ministry of Commerce in Nigeria, Clinical Trial Data, Comprehensive
Certificate of Analysis; Issued by the manufacturer. Current Annual License to Practice for the Superintendent Pharmacists issued
by the Pharmacists Council of Nigeria; Current Certificate of Registration Retention of Premise issued by the Pharmacists Council
of Nigeria, 100 Samples including packaging, Patient Data Sheet and A letter of Invitation to inspect the factory abroad.
The
Company has received approval from the Republic of Malawi for the importation of Lodonal™, subject to completion of a clinical
trial as an adjunct treatment for cancer.
Research
and Development
Our
research and development (“R&D”) organization focuses primarily on new uses for the opioid-related immuno-therapies,
such as LDN and MENK. These therapies stimulate the immune system in such a way that provides the potential to treat a variety
of diseases that have abnormalities in the immune system.
Our
R&D priorities include development of MENK IRT-101, a small synthetic pentapeptide that is naturally occurring in the body,
and Lodonal™, an opioid receptor antagonist. Our pipeline provides two therapies with an extremely wide range of indications
that can be pursued. Both molecules have the ability to stimulate and/or regulate the immune system in order to treat a variety
of autoimmune diseases including multiple sclerosis, immune disorders such as Crohn’s disease, cancer, and viral infections
such as HIV/AIDS.
Our
R&D is overseen and managed internally, working with individuals, universities, and Contract Research Organizations (“CROs”)
in order to utilize patents that we have licensed or acquired since our inception. We continue to seek to expand our pipeline
by reviewing other compounds, technologies or capabilities. We also seek out promising compounds and innovative technologies developed
by third parties to incorporate into our discovery and development processes or projects.
Drug
discovery and development is time-consuming, expensive and unpredictable. According to the Pharmaceutical Research and Manufacturers
of America (PhRMA), out of 5,000-10,000 screened compounds, only 250 enter preclinical testing, five enter human clinical trials
and one is approved by the FDA. The process from early discovery or design to development to regulatory approval can take more
than 10 years. Drug candidates can fail at any stage of the process, and candidates may not receive regulatory approval even after
many years of research.
As
of December 31, 2016, we had two compounds (IRT-101 and Lodonal™) in research and development. In 2016 our development programs
focused on both compounds, one in oncology and one in Crohn’s disease; which we are expecting to move into Phase II clinical
trials.
The
following table provides information about significant regulatory actions by, and filings pending with the FDA and regulatory
authorities in the EU, as well as additional indications and new drug candidates in late-stage development.
NEW
DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT
|
CANDIDATE
|
|
INDICATION
|
|
REGULATORY
ACTIONS
|
IRT-101
|
|
Pancreatic
Cancer
|
|
End-of-Phase
1 Meeting with FDA Complete 3Q 2013
|
IRT-103
Lodonal™
|
|
Crohn’s
Disease
|
|
Type
C Meeting with FDA Complete 2Q 2013
Scientific
Advice with EMA Complete 1Q 2015
|
The
Company has incurred, and expects to continue incurring, substantial research, development and other costs in connection with
compound partnering agreements. In 2016, the Company incurred cash expenses of $444,165 for research and development. The Company
estimates it could spend approximately $15,000,000 in cash for research and development costs in 2017.
Employees
As
of December 31, 2016, the Company had 5 full time employees.
Available
Information
Our
Current Reports on Form 8-K, and Quarterly Reports are electronically filed with or furnished to the Securities and Exchange Commission
(SEC), and all such reports and amendments to such reports have been and will be made available, free of charge, through our website
(http://www.immunetherapeutics.com) as soon as reasonably practicable after such submission to the SEC. Such reports will remain
available on our website for at least 12 months. The contents of our website are not incorporated by reference into this Annual
Report on Form 10-K. The public may read and copy any materials filed by us with the SEC at the SEC’s Public Reference Room
at 100 F Street, NW, Washington, D.C. 20549.
Item
1A. Risk Factors
You
should carefully consider the following factors and other information in this Annual Report and our other SEC filings before making
a decision to invest in our common stock. Additional risks and uncertainties that we are unaware of may become important factors
that affect us. If any of the following events occur, our business, financial conditions and operating results may be materially
and adversely affected. In that event, the trading price of our common stock may decline, and you could lose all or part of your
investment.
Risks
Related to our Business
We
have a limited operating history and are expected to incur significant operating losses during the early stage of our corporate
development.
We
have a limited operating history. Our historical financial information consists only of an audit of our financial results at and
for the years ended December 31, 2016, 2015, 2014, 2013 and 2012. There is limited historical financial information upon which
to base an evaluation of our performance. We are an emerging company, and thus our prospects must be considered in light of the
uncertainties, risks, expenses, and difficulties frequently encountered by companies in their early stages of operation, particularly
in the pharmaceutical industry.
Since
inception, we have invested a substantial portion of our time and financial resources in the acquisition and development of our
most advanced drug candidate, LDN. We have generated cumulative losses of approximately $xxx million and $xxx stockholders’
deficit since inception, and we expect to continue to incur losses until IRT-103 (LDN) is approved by the FDA and foreign regulatory
authorities. Even if regulatory approval is obtained, there is a risk that we will not be able to generate material sales of IRT-103
(LDN), which would cause us to continue to incur losses.
We
may never generate revenue, are not profitable and may never become profitable.
We
expect to incur substantial losses and negative operating cash flow for the foreseeable future, and we may never achieve or maintain
profitability. Even if we are able to launch IRT-103 (LDN) we expect to incur substantial losses for the foreseeable future and
may never become profitable.
We
do not anticipate that we will generate revenue from the sale of our products for the foreseeable future. In addition, if approved,
we expect to incur significant costs to commercialize our drug candidates and our drugs may never gain market acceptance. If our
drug candidates fail to demonstrate safety and efficacy in clinical trials, do not gain regulatory approval, or do not achieve
market acceptance, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain
profitability in subsequent periods. If we are unable to achieve and sustain profitability, the market value of our common stock
will likely decline. Because of the numerous risks and uncertainties associated with developing pharmaceutical products, we are
unable to predict the extent of any future losses or whether we will become profitable.
We
will see losses from our clinical trials conducted either directly or through our subsidiaries for the foreseeable future, and
if we fail at one or more of our clinical trials, it could affect the value of the Company’s stock.
We
rely on financings to fund and conduct clinical trials directly or through our subsidiaries needed for NDA submission with respect
to IRT-103 (LDN). Any of the following events or factors could have a material adverse effect on our ability to generate revenue
from the commercialization of IRT-103 (LDN):
|
●
|
The
Company may be unable to successfully complete the clinical development of IRT-103 (LDN);
|
|
●
|
The
Company must comply with any possible additional requests and recommendations from the FDA, including additional clinical
trials;
|
|
●
|
The
Company may not obtain all necessary approvals from the FDA and similar foreign regulatory agencies;
|
|
●
|
The
Company may not commit sufficient resources to the development, regulatory approval, marketing and distribution of IRT-103
(LDN);
|
|
●
|
IRT-103
(LDN) must be manufactured in compliance with requirements of the FDA and similar foreign regulatory agencies and in commercial
quantities sufficient to meet market demand;
|
|
●
|
IRT-103
(LDN) may not achieve market acceptance by physicians, patients and third party payers;
|
|
●
|
IRT-103
(LDN) may not successfully compete against alternative products and therapies; and
|
|
●
|
The
Company or any other pharmaceutical organization may independently develop products that compete with IRT-103 (LDN).
|
To
obtain approval from the FDA of an NDA, for IRT-103 (LDN), The Company will need to demonstrate through evidence of adequate and
well-controlled clinical trials that IRT-103 (LDN) is safe and effective for each proposed indication. However, IRT-103 (LDN)
may not be approved even though it achieved its specified endpoints in future Phase III clinical trials intended to support an
NDA, which may be conducted by the Company. The FDA may disagree with the trial design and the interpretation of data from clinical
trials, may ask the Company to conduct additional costly and time consuming clinical trials in order to obtain marketing approval
or approval to enter into an advanced phase of development, or may change the requirements for approval even after it has reviewed
and commented on the design for our future clinical trials. The FDA may also approve IRT-103 (LDN) for fewer or more limited indications
than the Company may request, or may grant approval contingent on the performance of costly post-approval clinical trials. In
addition, the FDA may not approve the labeling claims that we believe are necessary or desirable for the successful commercialization
of IRT-103 (LDN).
The
Company anticipates that if Cytocom initiates a clinical trial in the next 12 months, Cytocom would need approximately $7-$15
million to fully develop products and for Phase III clinical trials for Crohn’s disease. We expect that two-thirds of this
amount will be spent by Cytocom in the USA, the balance by Immune Therapeutics, Inc. and/or its subsidiaries for international
trials. Cytocom trials are expected to be split evenly between LDN and MENK. The international trials will focus the use of MENK
for treatment of cancer in Africa.
The
development of new drugs is a highly risky undertaking which involves a lengthy process, and therefore our drug discovery and
development activities may not result in products that are approved by the applicable regulatory authorities on the time schedule
we have planned, or at all.
Our
drug candidates are in early stages of drug discovery or clinical trials and are prone to the risks of failure inherent in drug
development. As of the date of this Form 10-K, both of our current drug candidates, IRT-101 (MENK) and IRT-103 (LDN) have been
tested on human beings. We will need to conduct additional clinical trials before we can demonstrate that our drug candidates
are safe and effective to the satisfaction of the FDA and other regulatory authorities. Clinical trials are expensive and uncertain
processes that can take multiple years to complete. We cannot assure you that our ongoing clinical trials or any future clinical
trial of any of our other drug candidates, will be completed on schedule, or at all, or whether our planned clinical trials will
start in a timely manner. The commencement of our planned clinical trials could be substantially delayed or prevented by a number
of factors, including:
|
●
|
delays
or failures in obtaining sufficient quantities of the API and/or drug product;
|
|
●
|
delays
or failures in reaching an agreement on acceptable clinical trial agreement terms or clinical trial protocols with prospective
sites and with the FDA or other foreign regulatory bodies;
|
|
●
|
delays
or failures in obtaining Institutional Review Board (“IRB”) or Ethics Committee (“EC”) approvals to
conduct a clinical trial at a prospective site;
|
|
●
|
the
need to successfully complete, on a timely basis, preclinical safety pharmacology studies (for IRT-101 (MENK));
|
|
●
|
the
limited number of, and competition for, suitable sites to conduct the clinical trials;
|
|
●
|
the
limited number of, and competition for, suitable patients for enrollment in the clinical trials; and
|
|
●
|
delays
or failures in obtaining regulatory approval to commence a clinical trial.
|
The
completion of our clinical trials could also be substantially delayed or prevented by a number of factors, including:
|
●
|
slower
than expected rates of patient recruitment and enrollment;
|
|
●
|
failure
of patients to complete the clinical trials;
|
|
●
|
failure
of our third party vendors to timely or adequately perform their contractual obligations relating to the clinical trials;
|
|
●
|
inability
or unwillingness of patients or medical investigators to follow our clinical trial protocols;
|
|
|
|
|
●
|
inability
to monitor patients adequately during or after treatment;
|
|
●
|
termination
of the clinical trials by one or more clinical trial sites;
|
|
●
|
unforeseen
safety issues;
|
|
●
|
lack
of efficacy demonstrated during clinical trial results;
|
|
●
|
lack
of adequate funding to continue the clinical trials;
|
|
●
|
the
need for unexpected discussions with the FDA or other foreign regulatory agencies regarding the scope or design of our clinical
trials or the need to conduct additional trials;
|
|
●
|
unforeseen
delays by the FDA or other foreign regulatory agencies after submission of our results;
|
|
●
|
an
unfavorable FDA inspection of our contract manufacturers of APIs or drug products; and/or
|
|
●
|
inspection
of the clinical trial operations or trial sites by the FDA or other regulatory authorities resulting in the imposition of
a clinical hold.
|
Any
failure or significant delay in completing clinical trials for our drug candidates will harm the commercial prospects for our
drug candidates and adversely affect our financial results.
Additionally,
changes in regulatory requirements and guidance may occur and we may need to amend clinical trial protocols to reflect these changes.
Amendments may require us to resubmit our clinical trial protocols to IRBs or ECs for reexamination, which may impact the costs,
timing or successful completion of a clinical trial. If we experience delays in completion of a clinical trial, or if we terminate
any of our clinical trials, the commercial prospects for our drug candidates may be harmed and our ability to generate product
revenues will be delayed. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of
clinical trials may also ultimately lead to the denial of regulatory approval of a drug candidate.
If
we are required to suspend or discontinue clinical trials due to side effects or other safety risks, or if we are required to
conduct studies on the long-term effects associated with the use of our drug candidates, our efforts to commercialize our products
could be delayed or halted.
Our
clinical trials may be suspended or terminated at any time for a number of safety-related reasons. For example, administering
any drug candidate to humans may produce undesirable side effects. We may voluntarily suspend or terminate our clinical trials
if at any time we believe that our drug candidates present an unacceptable safety risk to the clinical trial patients. In addition,
IRBs, ECs or regulatory agencies may order the temporary discontinuation or termination of our clinical trials at any time if
they believe that the clinical trials are not being conducted in accordance with applicable regulatory requirements, including
if they present an unacceptable safety risk to patients. The existence of undesirable side effects resulting from our drug candidates
could cause us or regulatory authorities, such as the FDA, to interrupt, delay or halt clinical trials of our drug candidates
and could result in the FDA or other regulatory agencies denying further development or approval of our drug candidates for any
or all targeted indications.
Further,
cytokine receptors and opiate growth factor receptors are a novel class of targets. As a result, we may experience unforeseen
adverse side effects with our existing and future drug candidates, including IRT-101 (MENK) and IRT-103 (LDN). As of the date
of this registration statement, although we have not observed harmful side effects in prior studies of LDN or MENK, later trials
could reveal such side effects. The pharmacokinetic profile and results of preclinical studies may not be indicative of results
in any clinical trial.
We
have not conducted studies on the long-term effects associated with the use of our drug candidates. Studies of long-term effects
and chronic dosing (approximately 1 year of dosing); will be required for regulatory approval and may delay introduction of our
therapies or our other drug candidates into the market. Additional studies could also be required at any time after regulatory
approval of any of our drug candidates. Some or all of our drug candidates may prove to be unsafe for human use.
Even
if our drug candidates do obtain regulatory approval they may never achieve market acceptance or commercial success.
Even
if we obtain FDA or other regulatory approval, our drug candidates may not achieve market acceptance among physicians, patients
and/or third party payers or they may be used only in applications more restricted than we anticipate, and ultimately, may not
be commercially successful. Our treatments, if successfully developed, will compete with a number of traditional products manufactured
and marketed by major pharmaceutical and biotechnology companies. Our treatments may also compete with new products currently
under development by such companies and others. Physicians will prescribe a product only if they determine, based on experience,
clinical data, side effect profiles and other factors, that it is beneficial as compared to other products currently available
and in use. Physicians also will prescribe a product based on their traditional preferences. Market acceptance of our drug candidates
for which we receive approval depend on a number of factors, including:
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the
efficacy and safety of our drug candidates as demonstrated in clinical trials;
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the
clinical indications for which the drug is approved;
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acceptance
by physicians, major operators of clinics and patients of the drug as a safe and effective treatment;
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the
potential and perceived advantages of our drug candidates over alternative treatments;
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the
safety of drug candidates seen in a broader patient group, including its use outside the approved indications;
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the
cost of treatment in relation to alternative treatments;
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the
availability of adequate reimbursement and pricing by third parties and government authorities;
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relative
convenience and ease of administration;
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the
prevalence and severity of adverse side effects; and
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the
effectiveness of our sales and marketing efforts.
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If
our drug candidates that obtain regulatory approval fail to achieve market acceptance or commercial success, the Company’s
financial results will be adversely affected.
The
commercial success of IRT-103 depends, in part, on Cytocom’s ability to develop and market the drug in North America, and
if we fail in these initiatives, our ability to generate future revenue in the United States could be reduced.
If
Cytocom successfully completes the clinical development program in the U.S. for our lead independent drug candidate, IRT-103 (LDN),
we plan to retain commercial rights to IRT-103 as we have exclusive licensing rights. Any of the following events or factors could
have a material adverse effect on both the ability to generate revenue in the U.S. from the commercialization of IRT-103:
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we
may be unable to successfully complete the clinical development of IRT-103;
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our
lack of experience in commercializing and marketing drug products;
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we
may not have or be able to obtain sufficient financial resources to develop and commercialize IRT-103;
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we
may not be able to identify a suitable co-development partner;
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we,
or any of our future partners, may fail to fulfill our responsibilities in a timely manner or fail to commit sufficient resources
to the development, regulatory approval, and commercialization efforts related to IRT-103;
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we,
or any of our future partners, must comply with additional requests and recommendations from the FDA, including additional
clinical trials;
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we,
or any of our future partners, may not obtain all necessary approvals from the FDA and similar foreign regulatory agencies;
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IRT-103
must be manufactured in compliance with requirements of the FDA and similar foreign regulatory agencies and in commercial
quantities sufficient to meet market demand;
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IRT-103
may not achieve market acceptance by physicians, patients and third party payers;
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IRT-103
may not compete successfully against alternative products and therapies; and
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we,
or any pharmaceutical company, may independently develop products that compete with IRT-103.
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Changes
in pharmaceutical and biotechnology industry trends could adversely affect the Company’s operating results.
Industry
trends, economic and political factors that affect pharmaceutical, biotechnology, medical device companies and academic/government
entities sponsoring clinical research directly affect the Company’s business. For example, many companies in such industries
and government organizations have been hiring companies (like the Company) to conduct large development projects. The Company’s
operations, financial condition and growth rate could be materially and adversely affected if these industries reduce outsourcing
of such projects. In the past, mergers, product withdrawals, liability lawsuits and other factors in the pharmaceutical industry
have slowed decision making by pharmaceutical companies and correlating government bodies significantly delaying and/or halting
drug development projects. Continuation or increases in such trends could have an adverse effect on the Company’s business.
Additionally, numerous government agencies have undertaken efforts to control growing healthcare costs through legislation, regulation
and voluntary agreements with medical care providers and pharmaceutical companies. If future regulatory cost-containment efforts
limit potential profits derived from new drugs, the Company’s clients may reduce their drug discovery and development spending.
A reduction in drug discovery and development spending could have a material adverse effect on the Company’s results and
operations creating a significant reduction of the Company’s revenue.
We
currently rely on third parties to conduct all our clinical trials. If these third parties do not successfully carry out their
contractual duties or meet expected deadlines, we may be unable to obtain regulatory approval for or commercialize any of our
drug candidates.
We
currently do not have the ability to independently conduct clinical trials. We rely on medical institutions, clinical investigators,
contract laboratories, collaborative partners and other third parties, such as contract research organizations, to conduct clinical
trials on our drug candidates. The third parties with whom we contract for execution of our clinical trials play a significant
role in the conduct of these trials and the subsequent collection and analysis of data. These third parties are not our employees,
and except for contractual duties and obligations, we have limited ability to control the amount or timing of resources that they
devote to our programs. Our IND is being conducted per 21 Code of Federal Regulations Title 21, Part 312. In addition, we follow
ICH guidelines, including good clinical practices (ICH E6) and current good manufacturing practice (ICH Q7) throughout the development
process. After completion of Phase III clinical trials, the Company will file our NDA for LDN (IRT-103) as a 505(b)(2) application.
Although we rely on these third parties to conduct our clinical trials, we remain responsible for ensuring that each of our preclinical
studies and clinical trials is conducted in accordance with its investigational plan and protocol. Moreover, the FDA and foreign
regulatory authorities require us to comply with regulations and standards, commonly referred to as current Good Clinical Practices
(“cGCPs”) for conducting, monitoring, recording and reporting the results of clinical trials to ensure that the data
and results are scientifically credible and accurate and that the trial subjects are adequately informed of the potential risks
of participating in clinical trials.
In
addition, the execution of preclinical studies and clinical trials, and the subsequent compilation and analysis of the data produced,
requires coordination among various parties. In order for these functions to be carried out effectively and efficiently, it is
imperative that these parties communicate and coordinate with one another. Moreover, these third parties may also have relationships
with other commercial entities, some of which may compete with us. In most cases, these third parties may terminate their agreements
upon a material breach by us that is not cured within 30 days by providing us with 30 days’ prior written notice. Many of
these agreements may also be terminated by such third parties under certain other circumstances, including our insolvency or our
failure to comply with applicable laws. In general, these agreements require such third parties to reasonably cooperate with us
at our expense for an orderly winding down of services of such third parties under the agreements. If the third parties conducting
our clinical trials do not perform their contractual duties or obligations, experience work stoppages, do not meet expected deadlines,
terminate their agreements with us or need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised
due to their failure to adhere to our clinical trial protocols or cGCPs, or for any other reason, we may need to enter into new
arrangements with alternative third parties, which could be costly, and our clinical trials may be extended, delayed or terminated
or may need to be repeated, and we may not be able to obtain regulatory approval for or commercialize the drug candidate being
tested in such trials.
If
any of our drug candidates receive marketing approval, and the Company or others later identify undesirable side effects caused
by the drug candidate, our ability to market and derive revenue from the drugs could be compromised.
If
the Company or others identify undesirable side effects caused by one of our drug candidates, any of the following adverse events
could occur:
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regulatory
authorities may withdraw approval of the drug or seize the drug;
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we
may be required to recall the drug or change the way the drug is administered;
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additional
restrictions may be imposed on the marketing or the manufacturing processes of the particular drug;
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we
may be subject to fines, injunctions or the imposition of civil or criminal penalties;
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regulatory
authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;
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we
may be required to create a medication guide outlining the risks of such side effects for distribution to patients;
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we
could be sued and held liable for harm caused to patients;
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the
drug may become less competitive; and
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our
reputation may suffer.
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Any
of these could result in the loss of significant revenues, which would materially and adversely affect our results of operations
and business.
We
may need additional financing and may be unable to raise capital on acceptable terms, or at all, when needed, which could force
us to delay, reduce or eliminate our research and development programs and other operations or commercialization efforts.
We
are advancing multiple drug candidates through discovery and development and will require substantial funds to conduct development,
including preclinical studies and clinical trials, of our drug candidates. Commercialization of any drug candidate will also require
substantial expenditures. To further the development and commercialization efforts of our drug candidates, we may need additional
financing to hire additional employees to co-promote drug candidates or to commercialize drug candidates that may not be covered
by our current collaboration agreements.
At
December 31, 2016, we had $74,389 in cash and cash equivalents. We do not believe that our available cash and cash equivalents
will be sufficient to fund our anticipated level of operations for the next 12 months and we will likely need to seek outside
sources of funding. Assuming that anticipated investment and revenue does not materialize business operations would not be able
to continue more than 30 days. We believe we require at least $2,000,000 for our operations over the next 12 months. Our future
financing requirements will depend on many factors, some of which are beyond our control, including:
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the
rate of progress and cost of our clinical trials, preclinical studies and other discovery and research and development activities;
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the
timing of, and costs involved in, seeking and obtaining FDA and other regulatory approvals;
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the
continuation and success of our strategic alliances and future collaboration partners;
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the
exercise of remaining options under current collaborative agreements;
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the
costs of preparing, filing, prosecuting, maintaining and enforcing any patent claims and other intellectual property rights,
including litigation costs and the results of such litigation;
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our
ability to enter into additional collaboration, licensing, government or other arrangements and the terms and timing of such
arrangements;
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potential
acquisition or in-licensing of other products or technologies; and
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the
technologies or other adverse market developments.
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Future
capital requirements will also depend on the extent to which we acquire or invest in additional complementary businesses, products
and technologies. We currently have no understandings, commitments or agreements relating to any of these types of transactions.
Until
we can generate a sufficient amount of product revenue to finance our cash requirements, which we may never do, we expect to finance
future cash needs primarily through public or private equity offerings, debt financings, government grants and contracts and/or
strategic collaborations. Additional financing may not be available to us when we need it or it may not be available on favorable
terms, if at all. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of or eliminate
one or more of our clinical trials or research and development programs or our commercialization efforts. We may be required to
enter into collaborative partnerships for one or more of our drug candidate programs at an earlier stage of development or on
less favorable terms, which may require us to relinquish rights to some of our drug candidates that we would otherwise have pursued
on our own. We may also be required to pursue strategic alternatives that may affect our business or corporate structure in order
to make ourselves more attractive to investors.
In
addition, If the Company or any of its future collaboration partners does not perform in the manner we expect or fulfill its responsibilities
in a timely manner, or at all, the clinical development, regulatory approval, and commercialization efforts related to IRT-103
(LDN) could be delayed or terminated. It may be necessary for us to assume the responsibility at our own expense for the development
of IRT-103 (LDN). In that event, we would likely be required to seek additional funding.
We
may form additional strategic alliances in the future with respect to our independent programs, and we may not realize any benefits
of such alliances.
We
may form strategic alliances, create joint ventures or collaborations or enter into licensing arrangements with third parties
with respect to our independent programs that we believe will complement or augment our existing business. For example, we plan
to find a partner to co-develop and commercialize IRT-101 (MENK) and IRT-103 (LDN) outside North America upon completion of clinical
development of IRT-103 (LDN) for the treatment of pediatric and adult patients with Crohn’s disease. We face significant
competition in seeking appropriate strategic partners. The negotiation process is time-consuming and complex. Moreover, we may
not be successful in our efforts to establish a strategic partnership or other alternative arrangements for any future product
candidates and programs because our research and development pipeline may be insufficient, our product candidates and programs
may be deemed to be at too early a stage of development for collaborative effort and/or third parties may not view our product
candidates and programs as having the requisite potential to demonstrate safety and efficacy. We cannot be certain that, following
a strategic transaction or license, we will achieve the revenues or specific net income that justifies such transactions. Any
delays in entering into new strategic partnership agreements related to our product candidates could also delay the development
and commercialization of our product candidates and reduce their competitiveness even if they reach the market.
We
do not currently manufacture IRT-103 Low Dose Naltrexone (LDN) and therefore must rely on third-party manufacturing to supply
the drug for clinical trials. If one of our suppliers or manufacturers fails to perform adequately or fulfill our needs, we may
be required to incur significant costs and devote significant efforts to find new suppliers or manufacturers, which would cause
delays in the development and commercialization of our drug candidates.
The
manufacture of pharmaceutical products in compliance with cGMPs requires significant expertise and capital investment, including
the development of advanced manufacturing techniques and process controls. Manufacturers of pharmaceutical products often encounter
difficulties in production, including difficulties with production costs and yields, quality control, including stability of the
drug candidate and quality assurance testing, shortages of qualified personnel, as well as compliance with strictly enforced FDA
cGMP requirements, other federal and state regulatory requirements, and foreign regulations. If our manufacturers were to encounter
any of these difficulties or otherwise fail to comply with their obligations to us or under applicable regulations, our ability
to provide study drugs in our preclinical studies and clinical trials would be jeopardized. Any delay or interruption in the supply
of preclinical study or clinical trial materials could delay the completion of our preclinical studies and clinical trials, increase
the costs associated with maintaining our preclinical study and clinical trial programs and, depending upon the period of delay,
require us to commence new trials at significant additional expense or terminate the studies and trials completely.
All
manufacturers of our drug candidates must comply with cGMP requirements enforced by the FDA through its facilities inspection
program. These requirements include, among other things, quality control, quality assurance and the maintenance of records and
documentation. Manufacturers of our component materials may be unable to comply with these cGMP requirements and with other FDA,
state and foreign, regulatory requirements. The FDA or similar foreign regulatory agencies at any time may also implement new
standards, or change their interpretation and enforcement of existing standards for manufacture, packaging or testing of products.
We have little control over our manufacturers’ compliance with these regulations and standards. A failure to comply with
these requirements may result in fines and civil penalties, suspension of production, suspension or delay in product approval,
product seizure or recall, or withdrawal of product approval. If the safety of any product supplied is compromised due to our
manufacturers’ failure to adhere to applicable laws or for other reasons, we may not be able to obtain regulatory approval
for or successfully commercialize our products, and we may be held liable for any injuries sustained as a result. Any of these
factors could cause a delay of clinical trials, regulatory submissions, approvals or commercialization of our drug candidates
or entail higher costs or impair our reputation.
We
source the API for IRT-103 (LDN) from a third-party manufacturing vendor. Another pharmaceutical company manufactures the API
for IRT-101. Our current agreements with our suppliers provide for the entire supply of the API necessary for additional clinical
trials or for full-scale commercialization. In the event that we and our suppliers cannot agree to the terms and conditions for
them to continue to provide some or all of our API clinical and commercial supply needs, or if any single source supplier terminates
the agreement in response to a breach by us, we would not be able to manufacture the API on a commercial scale until a qualified
alternative supplier is identified, which could also delay the development of, and impair our ability to commercialize, our drug
candidates.
Although
alternative sources of supplies exist, the number of third party suppliers with the necessary manufacturing and regulatory expertise
and facilities are limited, and it could be expensive and take a significant amount of time to arrange for alternative suppliers,
which could have a material adverse effect on our business. New suppliers of any API would be required to qualify under applicable
regulatory requirements and would need to have sufficient rights to the method of manufacturing such ingredients under applicable
intellectual property laws. Obtaining the necessary FDA approvals or other qualifications under applicable regulatory requirements
and ensuring non-infringement of third party intellectual property rights could result in a significant interruption of supply
and could require the new manufacturer to bear significant additional costs which may be passed on to us.
We
currently have only a limited distribution organization with no sales and marketing staff. If we are unable to develop sales and
marketing and expand distribution capability on our own or through collaborations with marketing partners, we will not be successful
in commercializing our future products.
We
currently have only a limited distribution organization with no sales or marketing staff. If our products are approved for sale
in the United States we will need to execute a number of sales and marketing agreements, but there can be no assurance that the
Company will be able to sign an agreement to market and distribute our products. To the extent we rely on third parties for marketing
and distributing our approved products, any revenue we receive will depend upon the efforts of third parties, which may not be
successful, and are only partially within our control. Our reliance on third parties makes it likely that our product revenue
is likely to be lower than if we directly marketed or sold our products. If we are unable to enter into arrangements with third
parties to commercialize the approved products on acceptable terms or at all, we may not be able to successfully commercialize
our future products or we will have to market these products ourselves, which will be expensive and require us to build our own
sales force, which we do not have experience doing. We cannot assure you we will be successful in any of these initiatives. If
we are not successful in commercializing our future products, either on our own or through collaborations with one or more third
parties, our future product revenue will be materially adversely affected.
We
are dependent on market acceptance of compounding pharmacies and compounded formulations, and physicians may be unwilling to prescribe,
and patients may be unwilling to use, our proprietary LDN compounded formulation.
We
are currently distributing our proprietary LDN formulation through Complete Pharmacy and Medical Solutions, LLC and expect to
distribute such formulation through other compounding pharmacies outside of the U.S. Formulations prepared and dispensed by compounding
pharmacies contain FDA-approved ingredients, but are not themselves approved by the FDA. As a result, our formulation has not
undergone the FDA approval process and only limited data, if any, may be available with respect to the safety and efficiency of
our formulation for any particular indication. Some physicians may be hesitant to prescribe, and some patients may be hesitant
to purchase and use, this non-FDA approved compounded formulation. In addition, certain compounding pharmacies have been the subject
of widespread negative media coverage in recent years, and the actions of these pharmacies have resulted in increased scrutiny
of compounding pharmacy activities from the FDA and state governmental agencies. As a result, physicians may be unwilling to prescribe
a compounded formulation when an FDA-approved alternative is available, even if they believe the compounded formulation to be
superior and less expensive. Other reasons physicians may be unwilling to prescribe or patients may be unwilling to use our proprietary
LDN compounded formulation could include the following, among others: our proprietary formulation is not required to be, and has
not been, approved for marketing and sale by the FDA; there may be limited or no data available with respect to the clinical efficacy
or safety of our compounded formulation the physician is prescribing; and to the extent there is such data available, we are limited
in our ability to discuss the efficacy or safety of our formulation with potential purchasers of our formulation.
Additionally,
some third-party payors, including the government Medicare and Medicaid programs, may not provide reimbursement for compounded
formulations. Physicians who may otherwise be interested in prescribing our formulation or utilizing our compounding pharmacy
services may be unwilling to do so if third party payor reimbursement, including Medicare and Medicaid reimbursement, is not available
for our compounded formulation. Any failure by physicians, patients and/or third-party payors to accept and embrace compounded
formulations could substantially limit our market and cause our operations to suffer.
We
aim to generate revenue from our proprietary LDN formulation through our licensing arrangement with
Complete
Pharmacy and Medical Solutions, LLC
and potentially other compounding pharmacies outside of the United States, but we may
not be successful in our efforts to generate revenue from such formulation.
One
aspect of our business strategy is to continue to develop our licensing arrangement with
Complete
Pharmacy and Medical Solutions, LLC
and potentially enter into other licensing arrangements with other compounding pharmacies
outside of the U.S., through which we can generate revenue from the sale of our proprietary LDN formulation. On December 8, 2014,
we entered into a Contract for the Compounding of Pharmaceutical Products with
Complete
Pharmacy and Medical Solutions, LLC
pursuant to which
Complete Pharmacy and Medical
Solutions, LLC
will carry out the services of compounding, packaging and distributing tablets of our LDN formulation in
the U.S. We have limited experience commercializing our formulation through licensing arrangements with compounding pharmacies.
Even if we are successful, we may be unable to generate sufficient revenue to recover our costs.
We
have minimal experience licensing products to pharmacies and outsourcing facilities and we may not be successful in our efforts
to develop our licensing arrangements. If we elect to license our proprietary LDN formulation to one or more pharmacies or outsourcing
facilities outside of the U.S., we may not be able to enter into licensing agreements when desired, on acceptable terms, or at
all. Establishing licensing or other relationships with pharmacies and outsourcing facilities could be expensive and time consuming,
disrupt our other operations, require significant capital expenditures and distract management and our other employees from other
aspects of our business.
Failure
to achieve and maintain effective internal controls could have a material adverse effect on our business.
Effective
internal controls are necessary for us to safeguard our assets and provide reliable financial reports. If we cannot provide reliable
financial reports, our operating results could be harmed. All internal control systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial
statement preparation and presentation.
While
we continue to evaluate and improve our internal controls, we are a small company with limited staff, and we cannot be certain
that the measures we implement will ensure that we design, undertake and maintain adequate controls over our financial processes
and reporting in the future. Any failure to implement required new or improved controls, or difficulties encountered in their
implementation, could harm our operating results or cause us to fail to meet our reporting obligations.
Failure
to achieve and maintain an effective internal control environment could cause investors to lose confidence in our reported financial
information, which could have a material adverse effect on our stock price. In addition, if our efforts to comply with new or
changed laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities
related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.
Our
independent registered public accounting firm has identified material weaknesses in our financial reporting process.
Our
independent registered public accounting firm has identified two material weaknesses in our financial reporting process. Specifically,
our independent registered public accounting firm identified material weaknesses with respect to:
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currently
inadequate segregation of duties by management in the financial reporting area; and
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the
lack of an audit committee to oversee the financial reporting process.
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We
intend to remediate this weakness by increasing the size of our accounting staff in 2016 and by appointing an audit committee
with membership that is qualified to oversee the Company’s financial reporting. However, there can be no assurance that
we will be able to successfully implement our plans to remediate the material weaknesses in our financial reporting process. Our
failure to successfully implement our plans to remediate these material weaknesses could cause us to fail to meet our reporting
obligations, to produce timely and reliable financial information, and to effectively prevent fraud. Additionally, such failure,
or other weaknesses that we may experience in our financial reporting process or other internal controls, could cause investors
to lose confidence in our reported financial information, which could have a negative impact on our financial condition and stock
price.
We
will need to increase the size of our organization, but we may experience difficulties in managing growth.
We
will need to continue to expand our managerial, operational, financial and other resources in order to manage our operations and
clinical trials, continue our development activities and commercialize our drug candidates. Our current management, personnel
systems and facilities may not be adequate to support this future growth. Our need to effectively execute our growth strategy
requires that we:
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manage
our clinical trials effectively, including our clinical trials for IRT-103 (LDN) which will be conducted at numerous trial
sites throughout the world;
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manage
our internal development efforts effectively while carrying out our contractual obligations to licensors, contractors, collaborators,
government agencies and other third parties;
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manage
operations in both regulated and unregulated businesses;
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continue
to improve our operational, financial and management controls and reporting systems and procedures; and
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identify,
recruit, maintain, motivate and integrate additional employees.
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If
we are unable to expand our managerial, operational, financial and other resources to the extent required to manage our development
and commercialization activities, our business will be materially adversely affected.
We
face substantial competition. Our competitors may discover, develop or commercialize products faster or more successfully than
us.
The
biotechnology and pharmaceutical industries are highly competitive. We face significant competition from companies in the pharmaceutical,
biotechnology and other related markets that are researching and marketing products designed to address Crohn’s Disease,
multiple sclerosis, other autoimmune diseases or immune disorders, inflammatory disorders, HIV/AIDS and cancer. Established pharmaceutical
companies that currently sell or are developing drugs in our markets of interest include, for example; Abbott Laboratories, Amgen,
AstraZeneca, Biogen Idec, Bayer, Elan, Johnson & Johnson, Merck, Merck Serono, Takeda, Novartis, Pfizer, Reata, Sanofi-Aventis
and Teva. Many or all of these established competitors are also involved in research and drug development regarding various OGF
receptors. Pharmaceutical and biotechnology companies which are known to be involved in immunotherapy research and related drug
development include Pfizer, Bristol-Myers Squibb, Merck, Takeda, Sanofi-Aventis, Incyte, and UCB Pharma among others.
We
are developing small molecule therapeutics that will compete with other drugs and alternative therapies that are currently marketed
or are being developed to treat Crohn’s Disease, HIV/AIDS, other autoimmune diseases and inflammatory disorders, HIV/AIDS
and cancer. If approved for marketing by the FDA, IRT-103 (LDN), our lead Inflammatory Bowel Disease (“IBD”) drug
candidate, would compete against existing IBD treatments such as Sulfasalazine (
Azulfidine
); Mesalamine (
Asacol, Rowasa
)
Corticosteroids; Azathioprine (
Imuran
) and mercaptopurine (
Purinethol
); Infliximab (
Remicade
); Adalimumab
(
Humira
); Certolizumab pegol (
Cimzia
); Methotrexate (
Rheumatrex
); Cyclosporine (
Gengraf, Neoral, Sandimmune
)
and Natalizumab (
Tysabri
). Similarly, other future drug candidates we are pursuing would compete against numerous existing
and established drugs and potentially against other novel drugs and therapies that are currently in development. We also anticipate
that we will face increased competition in the future as new companies enter our target markets and scientific developments surrounding
the chemokine system continue to develop.
Many
of our competitors have greater name recognition and financial, manufacturing, marketing, research and drug development resources
than we do. Additional mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources
being concentrated in our competitors. Large pharmaceutical companies in particular have extensive expertise in preclinical and
clinical testing and in obtaining regulatory approvals for drugs. In addition, academic institutions, government agencies, and
other public and private organizations conducting research may seek patent protection with respect to potentially competitive
products or technologies. These organizations may also establish exclusive collaborative or licensing relationships with our competitors,
thus giving our competitors a significant advantage. We may be unable to respond to competitive forces presently in the marketplace,
which would severely impact our business.
In
addition, in terms of the licensing of our LDN formulation to
Complete Pharmacy and Medical
Solutions, LLC
, we compete against branded drug companies, generic drug companies, outsourcing facilities and other compounding
pharmacies. We are currently and expect to continue our efforts on making available our proprietary compounded formulation through
Complete Pharmacy and Medical Solutions, LLC
and other compounding pharmacies outside
of the U.S. The drug products available through branded and generic drug companies with which our formulation competes have been
approved for marketing and sale by the FDA and are required to be manufactured in facilities compliant with cGMP standards. As
a result, some physicians may be unwilling to prescribe them. Because our proprietary LDN formulation is compounded in accordance
with The U.S. Federal Food, Drug, and Cosmetic Act Section 503B and is not required to be, and has not been, approved for marketing
and sale by the FDA, our business may be subject to limitations our competitors with FDA-approved drugs may not face.
Under
state and federal laws applicable to compounding pharmacies,
Complete Pharmacy and Medical
Solutions, LLC
is not permitted to prepare significant amounts of a specific formulation in advance of a prescription,
compound quantities for office use or utilize a wholesaler for distribution for our formulation; instead, our compounded formulation
must be prepared and dispensed in connection with a physician prescription for an individually identified patient. Pharmaceutical
companies typically sell most of their FDA-approved products to large pharmaceutical wholesalers, who in turn sell to and supply
hospitals and retail pharmacies. As a result, the sale of our formulation by
Complete Pharmacy
and Medical Solutions, LLC
is not scalable on the scope available to our competitors with FDA-approved drugs, which may
limit our potential for revenue.
We
may be subject to costly product liability claims related to our clinical trials and drug candidates and, if we are unable to
obtain adequate insurance or are required to pay for liabilities resulting from a claim excluded from, or beyond the limits of,
our insurance coverage, a material liability claim could adversely affect our financial condition.
Because
we conduct clinical trials with human patients, we face the risk that the use of our drug candidates may result in adverse side
effects to patients and to otherwise healthy volunteers in our clinical trials. We face even greater risks upon any commercialization
of our drug candidates. Although we will maintain product liability insurance for clinical trials, our insurance may be insufficient
to reimburse us for any expenses or losses we may suffer, and we will be required to increase our product liability insurance
coverage for the advanced clinical trials that we plan to initiate. We do not know whether we will be able to continue to obtain
product liability coverage and obtain expanded coverage on acceptable terms, or at all. We may not have sufficient resources to
pay for any liabilities resulting from a claim excluded from, or beyond the limits of, our insurance coverage. There is also a
risk that third parties that we have agreed to indemnify could incur liability. An individual may bring a product liability claim
against us if one of our drug candidates, products or compounded formulations cause, or is claimed to have caused, an injury or
is found to be unsuitable for consumer use. Any product liability claim brought against us, with or without merit, could result
in:
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withdrawal
of clinical trial volunteers, investigators, patients or trial sites;
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the
inability to commercialize our drug candidates;
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decreased
demand for our drug candidates;
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regulatory
investigations that could require costly recalls or product modifications;
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loss
of revenues;
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substantial
costs of litigation;
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liabilities
that substantially exceed our product liability insurance, which we would then be required to pay ourselves;
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an
increase in our product liability insurance rates or the inability to maintain insurance coverage in the future on acceptable
terms, if at all;
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the
diversion of management’s attention from our business; and
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damage
to our reputation and the reputation of our products.
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Our
business involves the use of hazardous materials. As a result, we, including our third party manufacturers, must comply with environmental
laws and regulations, which may be expensive and restrict how we do business.
Our
third party manufacturers’ activities and our own activities involve the controlled storage, use and disposal of hazardous
materials, including the components of our pharmaceutical products, test samples and reagents, biological materials and other
hazardous compounds. We and our manufacturers are subject to federal, state and local, and foreign laws and regulations governing
the use, generation, manufacture, storage, handling and disposal of these hazardous materials. We currently carry no insurance
specifically covering environmental claims relating to the use of hazardous materials. Although we believe that our safety procedures
for handling and disposing of these materials and waste products comply with the standards prescribed by these laws and regulations,
we cannot eliminate the risk of accidental injury or contamination from the use, storage, handling or disposal of hazardous materials.
In the event of an accident, state or federal or other applicable authorities may curtail our use of these materials and/or interrupt
our business operations. In addition, if an accident or environmental discharge occurs, or if we discover contamination caused
by prior operations, including by prior owners and operators of properties we acquire, we could be liable for cleanup obligations,
damages and fines. The substantial unexpected costs we may incur could significantly harm our financial condition and results
of operations.
Future
financings may adversely affect our stockholders or impose restrictions on our assets or operations, which may harm our business.
If
we raise additional capital by issuing equity securities or convertible debt securities, our existing stockholders’ ownership
will be diluted and the terms of any new equity securities may have preferences over our common stock. If we raise additional
capital through the issuance of debt securities, the debt will have rights senior to the holders of our common stock and may contain
covenants that restrict our operational flexibility or impose liens or other restrictions on our assets. In addition, the terms
of future financings may restrict our ability to raise additional capital, which would delay or prevent the further development
or commercialization of our drug candidates.
If
we raise additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish potentially
valuable rights to our current drug candidates, potential products or proprietary technologies, or grant licenses on terms that
are not favorable to us. Additionally, we may consider pursuing strategic opportunity for our business and corporate structure
that may make us a more attractive investment candidate. If adequate funds are not available, our ability to achieve profitability
or to respond to competitive pressures would be significantly limited and we may be required to delay, significantly curtail or
eliminate the development of one or more of our drug candidates.
We
may be adversely affected by the current economic environment.
Our
ability to attract and retain collaboration partners or customers, invest in and grow our business and meet our financial obligations
depends on our operating and financial performance, which, in turn, is subject to numerous factors, including the prevailing economic
conditions and financial, business and other factors beyond our control, such as the rate of unemployment, the number of uninsured
persons in the United States and inflationary pressures. We cannot anticipate all the ways in which the current economic climate
and financial market conditions could adversely impact our business.
We
are exposed to risks associated with reduced profitability and potential financial instability of our collaboration partners or
customers, many of which may be adversely affected by volatile conditions in the financial markets. For example, unemployment
and underemployment, and the resultant loss of insurance, may decrease the demand for healthcare services and pharmaceuticals.
If fewer patients are seeking medical care because they do not have insurance coverage, our collaboration partners or customers
may experience reductions in revenues, profitability and/or cash flow that could lead them to reduce their support of our programs
or financing activities. If collaboration partners or customers are not successful in generating sufficient revenue or are precluded
from securing financing, they may not be able to pay, or may delay payment of, accounts receivable that are owed to us. This,
in turn, could adversely affect our financial condition and liquidity. To the extent economic challenges result in fewer individuals
pursuing or being able to afford our products once commercialized, our business, results of operations, financial condition and
cash flows could be adversely affected.
Our
internal computer systems, or the computer systems of our contractors or consultants, may fail or suffer security breaches, which
could result in a material disruption of our drug development programs.
Despite
the implementation of security measures, our internal computer systems and the computer systems of our contractors and consultants
are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and
electrical failures. While we have not experienced any such system failure, accident or security breach to date, if such an event
were to occur and cause interruptions in our operations, it could result in a material disruption of our drug development programs.
For example, the loss of clinical trial data from completed or ongoing clinical trials for any of our drug candidates could result
in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent
that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure
of confidential or proprietary information, we could incur liability and the further development of our drug candidates could
be delayed.
Our
current and future operations substantially depend on our management team and our ability to have other key personnel, the loss
of any of whom could disrupt our business operations.
The
Company’s future success depends on the efforts and abilities of principal members of its senior management and scientific
staff to provide strategic direction, business development, operations management and maintenance of a cohesive and stable work
environment. The Company relies on the services of Dr. Nicholas P. Plotnikoff and Professor Fengping Shan. If we lost their services
or the services of any other key member of management, it could be impossible to replace them.
Additionally,
the Company’s ability to maintain, expand and renew existing business with its clients and maximize potential business opportunities
from new clients (in both the drug development and the drug discovery areas) depends on its ability to hire and retain scientists
with necessary skills. The scientists working for the Company must have the ability to lead ahead of continuing changes and trends
in drug discovery and development technologies to create the most innovative products on the market in order to remain competitive
within the drug development industry. The Company faces risks, challenges and competition attracting and retaining experienced
scientists and healthcare providers.
The
Company’s inability to hire qualified personnel may increase the workload for both existing and new personnel. The Company
may not be successful in attracting new healthcare providers, scientists and management or in retaining/motivating existing personnel.
The shortage of experienced healthcare providers and scientists or other factors may lead to increased recruiting, relocation
and compensation costs for the Company. Such increased costs may reduce profit margins or make hiring necessary experts (i.e.
healthcare providers or scientists) impracticable. If the Company is unable to attract or retain any of its key personnel its
ability to execute a competitive and profitable business plan will be adversely affected. Services and products will be less competitive
if not obsolete. If competing companies introduce superior technologies that compete with the Company’s services and products,
the Company may not be able to make the necessary enhancements to its services and products that will maintain a competitive position
in the marketplace. The Company’s competitive position, business, revenues and financial condition will be materially and
adversely affected.
Any
failure by the Company to comply with existing health care and drug regulations could harm its reputation, operating results,
the quality of the Company’s business strategy and the quality of the Company’s products.
The
Company has not experienced any failure to comply and has not received any notice or violation of either good clinical practices,
laboratory practices or good manufacturing practices. Any future failure by the Company to comply with existing health care and
drug regulations could result in the termination of ongoing research and/or the disqualification of data for submission to regulatory
authorities. Failure to comply with existing regulations will harm the Company’s reputation, brand name, its prospects for
immediate and future work and its operating results. For example, if the Company fails to verify that informed consent is obtained
from patient participants in connection with a particular clinical trial or grant deviations from the inclusion/exclusion criteria
in a study protocol, the data collected from that trial could be disqualified at which point the Company may be required to conduct
the trial again at no further cost to its client. Furthermore, the issuance of a FDA notice based on a finding of a material violation
of good clinical practice, good laboratory practice or good manufacturing practice requirements could materially and adversely
affect the Company.
Proposed
and future legislation or regulation may increase the cost of the Company’s business or limit its service and product offerings.
Federal,
state, and/or international authorities might adopt healthcare legislation or regulations that are more burdensome than existing
regulations. For example, recent product safety concerns and the creation of the Drug Safety Oversight Board could change the
regulatory environment for drug products including the process for FDA product approval and post-approval safety surveillance.
Such changes and other possible changes in regulation could increase the Company’s expenses or limit its ability to offer
some of its services or products. For example, the confidentiality of patient-specific information and the circumstances under
which it may be released for inclusion in the Company’s databases or used in other aspects of business are subject to substantial
government regulation. Additional legislation or regulation governing the possession, use and dissemination of medical record
information or other personal health information may require the Company to implement new security measures requiring substantial
expenditures or limiting the ability to offer services and products. These regulations might also increase costs by creating new
privacy requirements for the Company’s business mandating additional privacy procedures for its clinical research business.
Requirements
associated with being a public company will increase our costs significantly, as well as divert significant company resources
and management attention.
Prior
to June 2013, we were not subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). We are working with our legal, independent accounting and financial advisors to identify those areas in which changes
should be made to our financial and management control systems to manage our growth and our obligations as a public company. These
areas include corporate governance, corporate control, internal audit, disclosure controls and procedures and financial reporting
and accounting systems. We have made, and will continue to make, changes in these and other areas. However, the expenses that
will be required in order to adequately prepare for being a public company could be material.
Compliance
with the various reporting and other requirements applicable to public companies will also require considerable time and attention
of management. As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private
company. The Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC and NASDAQ, has imposed various requirements
on public companies. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives.
In addition, the changes we make may not be sufficient to allow us to satisfy our obligations as a public company on a timely
basis.
Moreover,
we anticipate that compliance with these rules and regulations will increase our legal, accounting and financial compliance costs
substantially. In addition, these rules and regulations may make our activities related to legal, accounting and financial compliance
more difficult, time-consuming and costly and may also place undue strain on our personnel, systems and resources. If these requirements
divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on
our business, financial condition and results of operations.
In
addition, being a public company could make it more difficult or more costly for us to obtain certain types of insurance, including
directors’ and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or
incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult
for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
We
estimate the additional costs we may incur to respond to these requirements to range from $100 to $500 thousand annually, although
unforeseen circumstances could increase actual costs.
As
an “emerging growth company” under applicable law, we will be subject to lessened disclosure requirements, which could
leave our stockholders without information or rights available to stockholders of more mature companies.
For
as long as we remain an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (which
we refer to herein as the JOBS Act), we have elected 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:
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not
being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;
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taking
advantage of an extension of time to comply with new or revised financial accounting standards;
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reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and
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exemptions
from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden
parachute payments not previously approved.
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We
expect to take advantage of these reporting exemptions until we are no longer an “emerging growth company.” Because
of these lessened regulatory requirements, our stockholders would be left without information or rights available to stockholders
of more mature companies.
If
we are unable to attract suitable and willing investigators and volunteers for clinical trials and product development, business
may suffer.
Our
clinical research studies rely on the accessibility and participation of physician investigators and volunteer subjects. Investigators
are typically located at hospitals, clinics or other sites and supervise administration of the study drug to patients during the
course of a clinical trial. Volunteer subjects generally include individuals from the locale where the studies are conducted.
Our clinical research development business could be adversely affected if it is unable to attract suitable and willing investigators
or volunteers on a consistent basis.
We
may not obtain government approval for our products and/or uses.
The
development and commercialization of pharmaceutical products are subject to extensive governmental regulation in the United States
and foreign countries. Government approvals are required to develop, market and sell potential drug candidates. Obtaining government
approval to develop, market and sell drug candidates is time-consuming and expensive. The clinical trial results for a particular
drug candidate might not satisfy necessary requirements to obtain government approvals. Even if we are successful in obtaining
all required approvals to market and sell a drug candidate, post-approval requirements and the failure to comply with other regulations
could result in suspension or limitation of government approvals.
In
connection with drug discovery activities outside of the United States, we and our strategic partners will be subject to foreign
regulatory requirements governing testing, approval, manufacturing, labeling, marketing and sale of pharmaceutical products. These
requirements vary with location. Even if approval has been obtained for a product in the United States, approval in a foreign
country must be obtained prior to marketing the product. The approval process in foreign countries may be more or less rigorous
than the United States and the time required for approval may be longer or shorter. Clinical studies conducted outside of a specific
country may not be acceptable. The approval of a pharmaceutical product in one country does not guarantee approval in another.
Even
if approved, the products that we may develop and market may be later withdrawn from the market or subject to promotional limitations.
We
may not be able to obtain the labeling claims necessary or desirable for the promotion of our treatments if approved. We may also
be required to undertake post-marketing clinical trials. If the results of such post-marketing studies are not satisfactory or
if adverse events or other safety issues arise after approval, the FDA or a comparable regulatory agency in another country may
withdraw marketing authorization or may condition continued marketing on commitments from us that may be expensive and/or time
consuming to complete. In addition, if we or others identify adverse side effects after any of our products are on the market,
or if manufacturing problems occur, regulatory approval may be withdrawn and reformulation of our products, additional clinical
trials, changes in labeling of our products and additional marketing applications may be required. Any reformulation or labeling
changes may limit the marketability of our products if approved.
Florida
Law and our Articles of Incorporation may protect our Directors and Officers from certain types of lawsuits.
Florida
law provides that our officers and directors will not be liable to us or our stockholders for monetary damages for all but certain
types of conduct as officers and directors. Our Bylaws permit us broad indemnification powers to all persons against all damages
incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have
the effect of preventing stockholders from recovering damages against our officers and directors caused by their negligence, poor
judgment or other circumstances. The indemnification provisions may require us to use our limited assets to defend our officers
and directors against claims, including claims arising out of their negligence, poor judgment or other circumstances.
We
may seek to grow our business through acquisitions of or investments in new or complementary businesses, products or technologies,
and the failure to manage acquisitions or investments, or the failure to integrate them with our existing business, could have
a material adverse effect on us.
From
time to time we expect to consider opportunities to acquire or make investments in other technologies, products and businesses
that may enhance our capabilities, complement our current products or expand the breadth of our markets or customer base. Potential
and completed acquisitions and strategic investments involve numerous risks, including:
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problems
assimilating the purchased technologies, products or business operations;
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issues
maintaining uniform standards, procedures, controls and policies;
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unanticipated
costs associated with acquisitions;
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diversion
of management’s attention from our core business;
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adverse
effects on existing business relationships with suppliers and customers;
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risks
associated with entering new markets in which we have limited or no experience;
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potential
loss of key employees of acquired businesses; and
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increased
legal and accounting compliance costs.
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We
have no current commitments with respect to any acquisition or investment. We do not know if we will be able to identify acquisitions
we deem suitable, whether we will be able to successfully complete any such acquisitions on favorable terms or at all, or whether
we will be able to successfully integrate any acquired business, product or technology into our business or retain any key personnel,
suppliers or distributors. Our ability to successfully grow through acquisitions depends upon our ability to identify, negotiate,
complete and integrate suitable target businesses and to obtain any necessary financing. These efforts could be expensive and
time-consuming, and may disrupt our ongoing business and prevent management from focusing on our operations. If we are unable
to integrate any acquired businesses, products or technologies effectively, our business, results of operations and financial
condition will be materially adversely affected.
We
may expend our limited resources to pursue a particular opportunity and fail to capitalize on current research and products that
may be more profitable or for which there is a greater likelihood of success.
Because
we have limited financial and managerial resources, we have focused on specific research programs, treatments, and products. As
a result, we may forego or delay pursuit of opportunities with other products or research that later may prove to have greater
commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial treatments or
profitable market opportunities. Our spending on current and future research and development programs may not yield any commercially
viable treatments.
We
are subject to risks associated with our non-U.S. operations.
The
Foreign Corrupt Practices Act (“FCPA”) and similar worldwide anti-bribery laws in non-U.S. jurisdictions generally
prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or
retaining business. The FCPA also imposes accounting standards and requirements on publicly traded U.S. corporations and their
foreign affiliates which are intended to prevent the diversion of corporate funds to the payment of bribes and other improper
payments, and to prevent the establishment of “off books” slush funds from which such improper payments can be made.
Because of the predominance of government-sponsored healthcare systems around the world, many of our customer relationships outside
of the United States are with governmental entities and are therefore subject to such anti-bribery laws. Our internal control
policies and procedures may not always protect us from reckless or criminal acts committed by our employees or agents. Violations
of these laws, or allegations of such violations, could disrupt our operations, involve significant management distraction and
result in a material adverse effect on our business, results of operations and financial condition. We also could suffer severe
penalties, including criminal and civil penalties, disgorgement and other remedial measures, including further changes or enhancements
to our procedures, policies and controls, as well as potential personnel changes and disciplinary actions.
Furthermore,
we are subject to the export controls and economic embargo rules and regulations of the United States, including, but not limited
to, the Export Administration Regulations and trade sanctions against embargoed countries, which are administered by the Office
of Foreign Assets Control within the Department of the Treasury, as well as the laws and regulations administered by the Department
of Commerce. These regulations limit our ability to market, sell, distribute or otherwise transfer our products or technology
to prohibited countries or persons. A determination that we have failed to comply, whether knowingly or inadvertently, may result
in substantial penalties, including fines and enforcement actions and civil and/or criminal sanctions, the disgorgement of profits,
the imposition of a court-appointed monitor, the denial of export privileges and/or an adverse effect on our reputation.
These
and other factors may have a material adverse effect on our international operations or on our business, results of operations
and financial condition generally.
Because
our some of our manufacturing activities occur in Nicaragua, which is subject to political, economic and other uncertainties,
situations may arise that could have a material adverse effect on our business.
The
status of Nicaragua as a developing country may make it difficult for us to obtain additional financing for our projects. Notwithstanding
the progress achieved in recent years in political institutions and revitalizing the Nicaraguan economy, the present administration,
or any successor government, may not be able to sustain the progress achieved. While the Nicaraguan economy has experienced growth
in recent years, such growth may not continue in the future at similar rates or at all. If the economy of Nicaragua fails to continue
its growth or suffers a recession, our manufacturing efforts may be affected.
Further,
Nicaragua has in the past experienced a difficult security environment as well as political instability. In particular, various
illegal groups that may be active in and around regions in which we are present may pose a credible threat of terrorism, extortion
and kidnapping, which could have an adverse effect on our operations in such regions. In the event that continued operations in
these regions compromise our security or business principles, we may withdraw from these regions on a temporary or permanent basis,
which in turn, could have an adverse impact on our results of operations and financial condition. Any changes in regulations or
shifts in political attitudes are beyond our control and may adversely affect our business.
Our
independent auditors have expressed substantial doubt about our ability to continue as a going concern.
Due
to our net losses, negative cash flow and negative working capital, in their report on our audited financial statements for the
years ended December 31, 2015 and 2014, our independent auditors included an explanatory paragraph regarding substantial doubt
about our ability to continue as a going concern.
We
have incurred substantial losses since inception. Because of these losses, we will require additional working capital to develop
our business operations. We intend to raise additional working capital through private placements, public offerings, bank financing
and/or advances from related parties or shareholder loans.
There
are no assurances that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations.
To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient,
we will have to raise additional working capital. No assurance can be given that additional financing will be available, or, if
available, will be on terms acceptable to us. If adequate working capital is not available we may not increase our operations.
These
conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities
that might be necessary should we be unable to continue as a going concern.
Risks
Related to Intellectual Property
Our
inability to adequately protect our intellectual property rights could hurt business.
Our
commercial success will depend in part on obtaining and maintaining intellectual property protection for our products, formulations,
processes, methods and other technologies. We will only be able to protect these technologies and products from unauthorized use
by third parties to the extent that valid and enforceable intellectual property rights, including patents or other market exclusionary
rights apply.
The
patent positions of pharmaceutical companies, like ours, can be highly uncertain and involve complex legal and factual questions
for which important legal principles remain unresolved. No consistent policy regarding the breadth of claims allowed in such companies’
patents has emerged to date in the United States. The general environment for pharmaceutical patents outside the United States
also involves significant uncertainty. Accordingly, we cannot predict the breadth of claims that may be allowed or enforced, or
that the scope of these patent rights could provide a sufficient degree of future protection that could permit us to gain or keep
our competitive advantage with respect to these products and technologies. For example, we cannot predict:
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the
degree and range of protection any patents will afford us against competitors, including whether third parties will find ways
to make, use, sell, offer to sell or import competitive products without infringing our patents;
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if
and when patents will issue;
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whether
or not others will obtain patents claiming inventions similar to those covered by our patents and patent applications; or
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whether
we will need to initiate litigation or administrative proceedings in connection with patent rights, which may be costly whether
we win or lose.
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Some
of our patents we have licensed may be subject to challenge and possibly invalidated or rendered unenforceable by third parties.
Changes in either the patent laws or in the interpretations of patent laws in the United States or other countries may diminish
the value of our intellectual property.
In
addition, others may independently develop similar or alternative products and technologies that may be outside the scope of our
intellectual property. Furthermore, others may have invented technology claimed by our patents before our licensors or we did
so, and they may have filed patents claiming such technology before we did so, weakening our ability to obtain and maintain patent
protection for such technology. Should third parties obtain patent rights to similar products or technology, this may have an
adverse effect on our business.
We
may also rely on trade secrets to protect our technology, especially where we do not believe patent protection is appropriate
or obtainable. Trade secrets, however, are difficult to protect. While we believe that we will use reasonable efforts to protect
our trade secrets, our own or our strategic partners’ employees, consultants, contractors or advisors may unintentionally
or willfully disclose our information to competitors. We seek to protect this information, in part, through the use of non-disclosure
and confidentiality agreements with employees, consultants, advisors and others. These agreements may be breached, and we may
not have adequate remedies for a breach. In addition, we cannot ensure that those agreements will provide adequate protection
for our trade secrets, know-how or other proprietary information or prevent their unauthorized use or disclosure.
If
competitors that have greater experience and financial resources learn our trade secrets, the competitors may copy or use our
trade secrets and other proprietary information in the advancement of their products, methods or technologies. If we were to prosecute
a claim that a third party had illegally obtained and was using our trade secrets, it could be expensive and time consuming and
the outcome could be unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade
secrets than courts in the United States. Moreover, if our competitors independently develop equivalent knowledge, we would lack
any legal or contractual claim to prevent them from using such information, and our business could be harmed.
The
Company’s most important intellectual property includes:
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For
IRT - 103 for Crohn’s disease, Patent Number 7879870, filed April 16, 2007, issued February 1, 2011, Methods for the
treatment of inflammatory and ulcerative diseases of the bowel (e.g., Crohn’s disease and ulcerative colitis) with low
dose opioid antagonists (e.g., naltrexone, nalmefene or naloxone), pharmaceutical compositions for use in such methods, and
methods for the manufacture of such pharmaceutical compositions.
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We
depend extensively on our license agreement with Pennsylvania State University for the development of IRT-101 for pancreatic
cancer covered by patents US Patent Numbers 6,737,397, CA 2,557,504, US 20010046968 , US 6737397 , US 6136780 , US 20080015211
, US 20070053838 , US 8003630 , US 20110123437 , US 7807368 , US 7576180 , US 7517649, US 20080146512 , US 7122651 , US 20060073565
, US 20050191241 , Patent No 8,003,630 issued between 2001 and 2011. Our license agreement with Pennsylvania State University
may be terminated if we materially breach the agreement and fail to cure our breach during an applicable cure period. Our
failure to use commercially reasonable efforts to develop and commercialize OGF sometimes referred to as MENK (intravenous)
and IRT-101 in the United States and certain other specified countries or to perform our other diligence obligations under
the license agreement would constitute a material breach of the license agreement. In the event our license agreement with
Pennsylvania State University is terminated, we will lose all of our rights to develop and commercialize the drug candidates
covered by such license, which would harm our business and future prospects. We own a number of other patents having to do
with the development of MENK which would allow us to continue our development of those indications.
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We
may become subject to intellectual property suits that could cause us to incur significant costs or pay significant damages or
that could prohibit us from selling its products.
The
Company’s competitors also seek to obtain patents or other protection of their proprietary rights. Third parties may claim
in the future that the Company’s products infringe upon their proprietary rights. To date, there have been no claims of
infringement. However, in the future, intellectual property claims could force the Company to alter its existing products or withdraw
them from the market or could delay the introduction of new products.
Various
patents have been issued to the Company’s competitors and these competitors may assert that the Company’s products
infringe their patent or other proprietary rights. If the Company’s products are found to infringe third-party intellectual
property rights, the Company may be unable to obtain a license to use such technology, and it could incur substantial costs to
redesign its products or to defend legal actions.
The
drug discovery and development industry has a history of patent and other intellectual property litigation; thus, we may be involved
in costly intellectual property lawsuits.
There
has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical
and biotechnology industries. We or one of our collaborators may be subject to third party claims in the future 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. Further, if a patent infringement
suit were brought against us or our collaborators, we or they could be forced to stop or delay research, development, manufacturing
or sales of the product or drug 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. This could harm our business significantly.
In
addition to infringement claims against us, if third parties prepare and file patent applications in the United States that also
claim technology to which we have rights, we may have to participate in interference proceedings with the United States Patent
and Trademark Office (“USPTO”) to determine the priority of invention. We may also become involved in similar opposition
proceedings in the European Patent Office regarding our intellectual property rights with respect to our products and technology.
The
failure to obtain or maintain patents, licensing agreements and other intellectual property could impact our ability to compete
effectively.
Our
success will depend, in part, on our ability to obtain and maintain patent protection for our drug candidates, preserve our trade
secrets, prevent third parties from infringing upon our proprietary rights and operate without infringing upon the proprietary
rights of others. While the patents we own have been issued, pending patent applications we have filed may not result in issued
patents or may take longer than we expect to result in issued patents. We cannot be certain that patents will be issued as a result
of any of our pending applications, and we cannot be certain that any of our issued patents, whether issued pursuant to our pending
applications or licensed from third parties, will give us adequate protection from competing products.
Composition
of Matter patents on APIs are generally considered to be the strongest form of intellectual property protection for pharmaceutical
products, as they apply without regard to any method of use. Entirely new individual chemical compounds, often referred to as
new chemical entities, are typically entitled to Composition of Matter coverage. However, we cannot be certain that the current
law will remain the same, or that our drug candidates will be considered novel and non-obvious by the USPTO and courts.
In
addition to Composition of Matter patents and patent applications, we also have filed Method of Use patent applications. This
type of patent protects the use of the product only for the specified method. However, 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, even if these competitors do not actively promote their product for our targeted indication, physicians
may prescribe these products “off-label.” Although off-label prescriptions may infringe or contribute to the infringement
of Method of Use patents, the practice is common and such infringement is difficult to prevent or prosecute.
Patent
applications in the United States and most other countries are confidential for a period of time until they are published. The
publication of discoveries in scientific or patent literature typically lags actual discoveries by several months or more. As
a result, we cannot be certain whether the Company or another inventor were the inventors of the issued patents and applications
or that the Company or another inventor were the first to conceive of the inventions covered by such patents and pending patent
applications or that the Company or another inventor were the first to file patent applications covering such inventions.
Others
may obtain issued patents that could prevent us from commercializing our product candidates or require us to obtain licenses requiring
the payment of considerable fees or royalties in order to enable us to conduct our business. As to those patents that we have
licensed, our rights depend on maintaining our obligations to the licensor under the applicable license agreement, and we may
be unable to do so.
We
have numerous issued patents and some patent applications pending before the USPTO. The protection may lapse before we manage
to obtain commercial value from the patents, which might result in increased competition and materially affect our position in
the market.
We
may be subject to claims that we or our employees or consultants have wrongfully used or disclosed alleged trade secrets of our
employees’ or consultants’ former employers or their clients. These claims may be costly to defend and if we do not
successfully do so, we may be required to pay monetary damages and may lose valuable intellectual property rights or personnel.
Many
of our employees were previously employed at universities, biotechnology or pharmaceutical companies, including our competitors
or potential competitors. Although no claims against us are currently pending, we may be subject to claims that these employees
or we have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers.
Litigation may be necessary to defend against these claims. If we fail in defending such claims, in addition to paying monetary
damages, we may lose valuable intellectual property rights or personnel. A loss of key research personnel or their work product
could hamper our ability to commercialize, or prevent us from commercializing our drug candidates, which could severely harm our
business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction
to management.
Some
of our intellectual property that was discovered through government funded programs may be subject to federal regulation such
as “march-in” rights, certain reporting requirements, and a preference for United States industry. Compliance with
such regulations may limit our exclusive rights, subject us to expenditure of resources with respect to reporting requirements,
and limit our ability to contract with foreign manufacturers.
Some
of our existing drug candidates, including LDN and MENK, and some of the research and development work conducted before we had
licensing rights may have been funded, at least in part, by the U.S. government and therefore would be subject to certain federal
regulations. Under the “march-in” provisions of the Bayh-Dole Act, the government may have the right under limited
circumstances to require the patent owners to grant exclusive, partially exclusive or non-exclusive rights to third parties for
intellectual property discovered through the government-funded program. The government can exercise its march-in rights if it
determines that action is necessary because the patent owner fails to achieve practical application of the new invention or because
action is necessary to alleviate health concerns or address the safety needs of the public. Intellectual property discovered under
the government-funded program is also subject to certain reporting requirements, compliance with which may require us to expend
substantial resources. Such intellectual property is also subject to a preference for U.S. industry, which may limit our ability
to contract with foreign product manufacturers for products covered by such intellectual property. We may apply for additional
U.S. government funding, and it is possible that we may discover compounds or drug candidates as a result of such funding. Intellectual
property under such discoveries would be subject to the applicable provisions of the Bayh-Dole Act.
Risks
Related to Government Regulation
The
regulatory approval process is expensive, time consuming and uncertain and may prevent us or our collaboration partners from obtaining
approvals for the commercialization of some or all of our drug candidates.
The
research, testing, manufacturing, labeling, approval, selling, import, export, marketing and distribution of drug products are
subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries which regulations
differ from country to country. Neither we nor our collaboration partners are permitted to market our drug candidates in the United
States until we receive approval of a NDA from the FDA. Neither we nor our collaboration partners have submitted an application
for or received marketing approval for any of our drug candidates. Obtaining approval of an NDA can be a lengthy, expensive and
uncertain process. 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:
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warning
letters;
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civil
and criminal penalties;
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injunctions;
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withdrawal
of approved products;
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product
seizure or detention;
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product
recalls;
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total
or partial suspension of production; and
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refusal
to approve pending NDAs or supplements to approved NDAs.
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Regulatory
approval of an NDA or NDA supplement is not guaranteed, and the approval process is expensive and may take several years. The
FDA also has substantial discretion in the approval process. Despite the time and expense exerted, failure can occur at any stage,
and we could encounter problems that cause us to abandon or repeat clinical trials, or perform additional preclinical studies
and clinical trials. The number of preclinical studies and clinical trials that will be required for FDA approval varies depending
on the drug candidate, the disease or condition that the drug candidate is designed to address, and the regulations applicable
to any particular drug candidate. The FDA can delay, limit or deny approval of a drug candidate for many reasons, including, but
not limited to, the following:
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a
drug candidate may not be deemed safe or effective;
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FDA
officials may not find the data from preclinical studies and clinical trials sufficient;
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the
FDA might not approve our or our third party manufacturer’s processes or facilities; or
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the
FDA may change its approval policies or adopt new regulations.
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If
any of our drug candidates fail to demonstrate safety and efficacy in clinical trials or do not gain regulatory approval, our
business and results of operations will be materially and adversely harmed.
Even
if we receive regulatory approval for a drug candidate, we will be subject to ongoing regulatory obligations and continued regulatory
review which may result in considerable additional expense and subject us to penalties if we fail to comply with applicable regulatory
requirements.
Once
regulatory approval has been granted, the approved product and its manufacturer are subject to continual review by the FDA and/or
non-U.S. regulatory authorities. Any regulatory approval that we or our collaboration partners receive for our drug candidates
may be subject to limitations on the indicated uses for which the product may be marketed or contain requirements for potentially
costly post-marketing follow-up studies to monitor the safety and efficacy of the product. In addition, if the FDA and/or non-U.S.
regulatory authorities approve any of our drug candidates, we will be subject to extensive and ongoing regulatory requirements
by the FDA and other regulatory authorities with regard to the labeling, packaging, adverse event reporting, storage, advertising,
promotion and recordkeeping for our products. In addition, manufacturers of our drug products are required to comply with current
cGMP regulations which include requirements related to quality control and quality assurance as well as the corresponding maintenance
of records and documentation. Further, regulatory authorities must approve these manufacturing facilities before they can be used
to manufacture our drug products, and these facilities are subject to continual review and periodic inspections by the FDA and
other regulatory authorities for compliance with cGMP regulations. If we or a regulatory authority discover previously unknown
problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the
product is manufactured, a regulatory authority may impose restrictions on that product, the manufacturer or us, including requiring
withdrawal of the product from the market or suspension of manufacturing. If we, our drug candidates or the manufacturing facilities
for our drug candidates fail to comply with regulatory requirements of the FDA and/or other non-U.S. regulatory authorities, we
could be subject to administrative or judicially imposed sanctions, including:
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warning
letters;
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civil
or criminal penalties;
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injunctions;
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suspension
of or withdrawal of regulatory approval;
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suspension
of any ongoing clinical trials;
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voluntary
or mandatory product recalls and publicity requirements;
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refusal
to approve pending applications for marketing approval of new drugs or supplements to approved applications filed by us;
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restrictions
on operations, including costly new manufacturing requirements; or
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seizure
or detention of our products or import bans.
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The
regulatory requirements and policies may change and additional government regulations may be enacted for which we may also be
required to comply. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation
or administrative action, either in the United States or in other countries. If we are not able to maintain regulatory compliance,
we will not be permitted to market our future products and our business will suffer.
The
availability of adequate third-party coverage and reimbursement for newly approved drugs is uncertain, and failure to obtain adequate
coverage and reimbursement from third-party payers could impede our ability to market any future products we may develop and could
limit our ability to generate revenue.
There
is significant uncertainty related to the third-party payor coverage and reimbursement of newly approved drugs. The commercial
success of our future products in both domestic and international markets depends on whether such third-party coverage and reimbursement
is available for our future products. Governmental payers, including Medicare and Medicaid, health maintenance organizations and
other third-party payers are increasingly attempting to manage their healthcare expenditures by limiting both coverage and the
level of reimbursement of new drugs and, as a result, they may not cover or provide adequate reimbursement for our future products.
These payers may not view our future products as cost-effective, and coverage and reimbursement may not be available to our customers
or may not be sufficient to allow our future products to be marketed on a competitive basis. Third-party payers are exerting increasing
influence on decisions regarding the use of, and coverage and reimbursement levels for, particular treatments. Such third-party
payers, including Medicare, are challenging the prices charged for medical products and services, and many third-party payers
limit or delay coverage and reimbursement for newly approved healthcare products. In particular, third-party payers may limit
the covered indications. Cost-control initiatives could cause us to decrease the price we might establish for products, which
could result in lower than anticipated product revenues. If the prices for our drug candidates decrease or if governmental and
other third-party payers do not provide adequate coverage or reimbursement, our prospects for revenue and profitability will suffer.
Even
if we obtain FDA approval of any product candidate we may develop or acquire in the future, we may never obtain approval or commercialize
our products outside of the U.S., which would limit our ability to realize their full market potential. If foreign approval is
obtained, there are risks in conducting business in international markets.
We
have and continue to seek other distribution and marketing partners for IRT-101 and IRT-103 (LDN) outside North America that will
and may market future products in international markets. In order to market any of our products we may develop or acquire outside
of the U.S., we must establish and comply with numerous and varying regulatory requirements of other countries regarding safety
and efficacy. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory
approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures vary
among countries and can involve additional product testing and validation and additional administrative review periods. Seeking
foreign regulatory approvals could result in significant delays, difficulties and costs for us and require additional preclinical
studies or clinical trials which would be costly and time consuming. Regulatory requirements can vary widely from country to country
and could delay or prevent the introduction of our products in those countries. Satisfying these and other regulatory requirements
is costly, time consuming, uncertain and subject to unanticipated delays. In addition, our failure to obtain regulatory approval
in the U.S. or any foreign country may delay or have negative effects on the process for regulatory approval in other countries.
If we fail to comply with regulatory requirements in a foreign country or to obtain and maintain required approvals, our potential
market for our products will be reduced and our ability to realize the full market potential of our products will be harmed.
The
Company, either directly or through its collaborating partners, is working with drug regulatory authorities in Nicaragua, China
and in those African Nations where an FDA equivalent exists. The Company is working with the agencies to obtain local approval
for the therapies for each modality that we intend to market for. We believe this will reduce our risk due to The Agreement on
Trade Related Aspects of Intellectual Property Rights (“TRIPS”) which is an international agreement administered by
the World Trade Organization (“WTO”). TRIPS allows emerging nations to manufacture drugs around existing patents.
If
approved for commercialization in a foreign country, we intend to enter into agreements with third parties to market our products
whenever they may be approved and wherever we have the right to market them. Consequently, we expect that we will be subject to
additional risks relating to entering into international business relationships, including:
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lack
of adequate protection from intellectual property rights in foreign countries, which could occur if we do not have issued
patents in force in such foreign countries covering our products, their methods of use and methods of manufacture;
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the
potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices
(for instance, because the goods have patent protection in such country), opts to import goods from a foreign market (with
low or lower prices) rather than buy them locally;
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unexpected
changes in tariffs, trade barriers and regulatory requirements
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economic
weakness, including inflation, or political instability in particular foreign economies and markets;
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compliance
with laws for employees traveling abroad;
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foreign
taxes, including withholding of payroll taxes;
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foreign
currency fluctuations, which could result in increased operating expenses and reduced revenues;
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workforce
uncertainty in countries where labor unrest is more common than in the U.S.;
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production
shortages resulting from any events affecting the API and/or finished drug product supply or manufacturing capabilities abroad;
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business
interruptions resulting from geo-political actions, including war and terrorism, or natural disasters including earthquakes,
typhoons, floods and fires; and
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failure
to comply with Office of Foreign Asset Control rules and regulations and the Foreign Corrupt Practices Act
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These
and other risks may materially adversely affect our ability to attain or sustain revenue from international markets.
Healthcare
policy changes may have a material adverse effect on us.
Our
business may be affected by the efforts of government and third-party payers to contain or reduce the cost of healthcare through
various means. For example, the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation
Act of 2010 (collectively, the Affordable Care Act or ACA), enacted in March 2010, substantially changed the way healthcare is
financed by both governmental and private insurers, and significantly impacted the pharmaceutical industry. With regard to pharmaceutical
products, among other things, ACA is expected to expand and increase industry rebates for drugs covered under Medicaid programs
and make changes to the coverage requirements under the Medicare D program. ACA has been held constitutional. This adds to the
uncertainty of the legislative changes enacted as part of ACA, and we cannot predict the impact that ACA or any other legislative
or regulatory proposals will have on our business. We expect both government and private health plans to continue to require healthcare
providers, including healthcare providers that may one day purchase our products, to contain costs and demonstrate the value of
the therapies they provide.
If
we fail to comply with healthcare regulations, we could face substantial penalties and our business, operations and financial
condition could be adversely affected.
Even
though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party
payers, certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are
and will be applicable to our business. We could be subject to healthcare fraud and abuse and patient privacy regulation by both
the federal government and the states in which we conduct our business. The regulations that may affect our ability to operate
include, without limitation:
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the
federal healthcare program Anti-Kickback Statute, which prohibits, among other things, any person from knowingly and willfully
offering, soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual
for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare
programs such as the Medicare and Medicaid programs;
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the
federal False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or causing
to be presented, false claims, or knowingly using false statements to obtain payment from the federal government, and which
may apply to entities like us which may provide coding and billing advice to customers;
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federal
criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating
to healthcare matters; and
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the
federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic
and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security
and privacy of protected health information; and state law equivalents of each of the above federal laws, such as anti-kickback
and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers.
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If
our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply
to us, we may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restructuring
of our operations. Any penalties, damages, fines, curtailment or restructuring of our operations could adversely affect our ability
to operate our business and our financial results. Any action against us for violation of these laws, even if we successfully
defend against it, could cause us to incur significant legal expenses and divert Management’s attention from the operation
of our business. Moreover, achieving and sustaining compliance with applicable federal and state privacy, security and fraud laws
may prove costly.
The
FDA may not accept the results of clinical trials conducted outside of the United States.
It
is possible that the FDA may not accept the results of our clinical trials; and this risk can increase when a clinical trial is
conducted outside of the United States. All clinical trials and clinical trial sites that are outside of the United States but
will be used to support a FDA application will be run in accordance with all US guidelines and regulations; however, this does
not guarantee the FDA’s acceptance of the clinical trial results. Clinical studies to support US licensure will only be
conducted in countries that are typically used to support a US licensure such as Canada, Australia, and countries within the EU.
We would need to obtain approval from the FDA to conduct the trial outside of the United States and/or to allow clinical sites
outside of the US, prior to initiation of such study. We would also need to ensure that the study is conducted in accordance with
local legal and regulatory requirements and all applicable United States federal regulations, European Union regulations, International
Conference on Harmonisation of Good Clinical Practice guidelines and any other applicable regulatory requirements for the overall
conduct of the clinical investigation.
Risks
Related to our Common Stock
Because
of their significant stock ownership, our chief executive officer, our other executive officers, and our directors and principal
stockholders may be able to exert control over us and our significant corporate decisions. Our other stockholders will have limited
ability to influence corporate actions or decisions.
This
concentration of ownership may harm the value of our common stock by, among other things:
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delaying,
deferring or preventing a change in control of our company;
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impeding
a merger, consolidation, takeover or other business combination involving our company; or
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causing
us to enter into transactions or agreements that are not in the best interests of all stockholders
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As
a group, our officers and directors own 14.0% of the outstanding common stock of the Company. Our other stockholders will
have limited ability to influence corporate actions or decisions.
The
price of our common stock may be volatile, and you may not be able to resell your shares.
An
active and liquid trading market for our common stock may not develop or be sustainable. Shareholders may be unable to sell shares
of common stock at or above their purchase price due to fluctuations in the market price of our common stock. The market price
of our common stock may fluctuate significantly in response to factors, some of which are beyond our control. Factors that could
cause volatility in the market price of our common stock include, but are not limited to:
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results
from, and delays in, clinical trial programs relating to our drug candidates, including the ongoing and planned clinical trials
for IRT-103 (LDN), IRT-101 (MENK) and other drug candidates;
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announcements
of regulatory approvals or disapprovals of our drug candidates including IRT-103 (LDN) and IRT-101 (MENK) or delays in any
regulatory agency review or approval processes;
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failure
or discontinuation of any of our research programs;
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loss
of significant clients or customers;
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loss
of significant strategic relationships;
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announcements
relating to future collaborations or our existing collaborations;
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our
failure to achieve and maintain profitability;
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changes
in earnings estimates and recommendations by financial analysts;
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changes
in market valuations of similar companies;
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wholesalers’
buying patterns;
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addition
or termination of clinical trials or funding support;
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regulatory
developments affecting our drug candidates or those of our competitors;
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the
Company’s sales decrease internationally;
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variations
in the level of expenses related to our drug candidates or future development programs;
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ability
to secure new government contracts and allocation of our resources to or away from performing work under government contracts;
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general
economic conditions in the United States and abroad;
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acquisitions
and sales of new products, technologies or business;
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market
conditions in the pharmaceutical, biopharmaceutical and biotechnology sectors;
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the
issuance of new or changed securities analysts’ reports or recommendations regarding us, our competitors or our industry
in general;
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actual
and anticipated fluctuations in our quarterly operating results;
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disputes
concerning our intellectual property or other proprietary rights;
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introduction
of technological innovations or new products by us or our competitors;
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manufacturing
issues related to our drug candidates for clinical trials or future products for commercialization;
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market
acceptance of our future products;
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deviations
in our operating results from the estimates of analysts;
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third
party payor coverage and reimbursement policies;
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new
legislation in the United States relating to the sale or pricing of pharmaceuticals;
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FDA
or other U.S. or foreign regulatory actions affecting us or our industry;
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product
liability claims or other litigation or public concern about the safety of our drug candidates or future drugs;
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our
ability to obtain necessary intellectual property licenses including, if necessary, those relating to IRT-103 (LDN) and other
drug candidates;
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the
outcome of any future legal actions to which we are a party;
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sales
of our common stock by our officers, directors or significant stockholders;
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frequent,
irregular, under market, or large sales of shares of our common stock by any shareholder;
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additions
or departures of key personnel; and
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external
factors, including natural disasters and other crises.
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In
addition, the stock markets in general, and the markets for pharmaceutical, biopharmaceutical and biotechnology stocks in particular,
have experienced extreme volatility that has often been unrelated to the operating performance of the issuer. These broad market
fluctuations may adversely affect the trading price or liquidity of our common stock. In the past, when the market price of a
stock has been volatile, holders of that stock have sometimes instituted securities class action litigation suits against the
issuer. If any of our stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit
and the attention of our management would be diverted from the operation of our business.
Future
sales of our common stock or securities convertible or exchangeable for our common stock may depress our stock price.
If
our existing stockholders or holders of our convertible notes, options or warrants sell, or indicate an intention to sell substantial
amounts of our common stock in the public market, the trading price of our common stock could decline. The perception in the market
place that these sales may occur could also cause the trading price of our common stock to decline.
Certain
holders of shares of our common stock, warrants to purchase our common stock, and shares of common stock issuable upon exercise
of warrants will be entitled to rights with respect to the registration of their shares under the Securities Act. Registration
of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities
Act, except for shares purchased by affiliates. In addition, our directors may, and we expect that our executive officers will
establish programmed selling plans under Rule 10b5-1 of the Exchange Act, for the purpose of effecting sales of our common stock.
Any sales of securities by these stockholders, or the perception that those sales may occur, including the entry into such programmed
selling plans, could have a material adverse effect on the trading price of our common stock.
If
we sell shares of our common stock in future financings, common stockholders may experience immediate dilution and, as a result,
our stock price may decline.
We
may from time to time issue additional shares of common stock at a discount from the current trading price of our common stock.
As a result, our common stockholders would experience immediate dilution upon the purchase of any shares of our common stock sold
at such a discount. In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the
future, including the issuance of debt securities, preferred stock or common stock.
Provisions
of our charter documents or Florida law could delay or prevent an acquisition of the Company, even if the acquisition would be
beneficial to our stockholders, and could make it more difficult for stockholders to change management.
Provisions
of our amended and restated articles of incorporation, as amended, and amended and restated bylaws may discourage, delay or prevent
a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which stockholders
might otherwise receive a premium for their shares. In addition, these provisions may frustrate or prevent any attempt by our
stockholders to replace or remove our current management by making it more difficult to replace or remove our board of directors.
We
do not anticipate paying any cash dividends on our capital stock in the foreseeable future, therefore capital appreciation, if
any, of our common stock will be our shareholders sole source of gain for the foreseeable future.
We
have never declared or paid cash dividends on our capital stock. We do not anticipate paying any cash dividends on our capital
stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development
and growth of our business. As a result, capital appreciation, if any, of the common stock will be our shareholders sole source
of gain for the foreseeable future.
If
securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our
stock price and trading volume could decline.
The
trading market for our common stock will depend, in part, on the research and reports that securities or industry analysts publish
about us or our business. Securities and industry analysts do not currently, and may never, publish research on our Company. If
no securities or industry analysts commence coverage of our Company, the trading price for our stock would likely be negatively
impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade
our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. In addition,
if our operating results fail to meet the forecast of analysts, our stock price would likely decline. If one or more of these
analysts cease coverage of our Company or fail to publish reports on us regularly, demand for our stock could decrease, which
might cause our stock price and trading volume to decline.
Our
board of directors is authorized to issue and designate shares of our preferred stock in additional series without stockholder
approval.
Our
amended and restated articles of incorporation, as amended, authorize our board of directors, without the approval of our stockholders,
to issue shares of our preferred stock, subject to limitations prescribed by applicable law, rules and regulations and the provisions
of our amended and restated articles of incorporation, as amended, as shares of preferred stock in series, and to establish from
time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights
of the shares of each such series and the qualifications, limitations or restrictions thereof. The powers, preferences and rights
of these additional series of preferred stock may be senior to or on parity with our common stock, which may reduce its value.
We do not currently have any class of preferred stock authorized.
Our
shares may be subject to the “penny stock” rules, which may subject you to restrictions on marketability and limit
your ability to sell your shares.
Broker-dealer
practices in connection with transactions in “Penny Stocks” are regulated by certain penny stock rules adopted by
the SEC. Penny stocks generally are equity securities with a price of less than $5.00 per share (other than securities registered
on certain national securities exchanges or quoted on the NASDAQ system). The penny stock rules require a broker-dealer, prior
to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that
provides information about penny stocks and the risk associated with the penny stock market. The broker-dealer must also provide
the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson
in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account.
In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer must make
a written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written
agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the
secondary market for a stock that becomes subject to the penny stock rules. The Company’s securities may be subject to the
penny stock rules, and investors may find it more difficult to sell their securities.
An
active and visible trading market for our common stock may not develop.
We
cannot predict whether an active market for our common stock will develop in the future. In the absence of an active trading market:
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Investors
may have difficulty buying and selling or obtaining market quotations;
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Market
visibility for our common stock may be limited; and
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A
lack of visibility for our common stock may have a depressive effect on the market price for our common stock
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Our
common stock is currently quoted on the OTC Market under the trading symbol “IMUN”. The OTC Market is unorganized,
inter-dealers, over-the-counter markets that provides significantly less liquidity than the New York Stock Exchange or NASDAQ.
No assurances can be given that we will ever obtain a listing for our securities on a senior exchange. The trading price of our
common stock is therefore expected to be subject to significant fluctuations in response to variations in quarterly operating
results, changes in analysts’ earnings estimates, announcements of innovations by us or our competitors, general conditions
in the industry in which we operate and other factors. These fluctuations, as well as general economic and market conditions,
may have a material or adverse effect on the market price of our common stock.
Because
we have elected to use the extended transition period for complying with new or revised accounting standards for an “emerging
growth company” our financial statements may not be comparable to companies that comply with public company effective dates.
We
have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1)
of the JOBS Act. This election allows us to delay the adoption of new or revised accounting standards that have different effective
dates for public and private companies until those standards apply to private companies. As a result of this election, our financial
statements may not be comparable to companies that comply with public company effective dates, and thus investors may have difficulty
evaluating or comparing our business, performance or prospects in comparison to other public companies, which may have a negative
impact on the value and liquidity of our common stock.
We
may not register or qualify our securities with any state agency pursuant to blue sky regulations.
The
holders of our shares of common stock and persons who desire to purchase them in the future should be aware that there may be
significant state law restrictions upon the ability of investors to resell our shares. We currently do not intend to and may not
be able to qualify securities for resale in other states which require shares to be qualified before they can be resold by our
shareholders.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain
statements contained or incorporated by reference in this Form S-1 are considered forward-looking statements (within the meaning
of the Private Securities Litigation Reform Act of 1995) concerning our business, results of operations, economic performance
and/or financial condition, based on management’s current expectations, plans, estimates, assumptions and projections. Forward-looking
statements are included, for example, in the discussions about:
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strategy;
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new
product discovery and development;
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current
or pending clinical trials;
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our
products’ ability to demonstrate efficacy or an acceptable safety profile;
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actions
by the FDA and other regulatory authorities;
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product
manufacturing, including our arrangements with third-party suppliers;
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product
introduction and sales;
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royalties
and contract revenues;
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expenses
and net income;
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credit
and foreign exchange risk management;
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liquidity;
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asset
and liability risk management;
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the
outcome of litigation and other proceedings;
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intellectual
property rights and protection;
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economic
factors;
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competition;
and
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legal
risks.
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Any
statements contained in this report that are not statements of historical fact may be deemed forward-looking statements. Forward-looking
statements generally are identified by the words “expects,” “anticipates,” “believes,” “intends,”
“estimates,” “aims,” “plans,” “may,” “could,” “will,”
“will continue,” “seeks,” “should,” “predict,” “potential,” “outlook,”
“guidance,” “target,” “forecast,” “probable,” “possible” or the negative
of such terms and similar expressions. Forward-looking statements are subject to change and may be affected by risks and uncertainties,
most of which are difficult to predict and are generally beyond our control. Forward-looking statements speak only as of the date
they are made, and we undertake no obligation to update any forward-looking statement in light of new information or future events,
except as required by law, although we intend to continue to meet our ongoing disclosure obligations under the U.S. securities
laws and other applicable laws.
We
caution you that a number of important factors could cause actual results or outcomes to differ materially from those expressed
in, or implied by, the forward-looking statements, and therefore you should not place too much reliance on them. These factors
include, among others, those described herein, under “Risk Factors” and elsewhere in this Annual Report and in our
other public reports filed with the Securities and Exchange Commission. It is not possible to predict or identify all such factors,
and therefore the factors that are noted are not intended to be a complete discussion of all potential risks or uncertainties
that may affect forward-looking statements. If these or other risks and uncertainties materialize, or if the assumptions underlying
any of the forward-looking statements prove incorrect, our actual performance and future actions may be materially different from
those expressed in, or implied by, such forward-looking statements. We can offer no assurance that our estimates or expectations
will prove accurate or that we will be able to achieve our strategic and operational goals.
Forward-looking
statements are based on information we have when those statements are made or management’s good faith belief as of that
time with respect to future events, and are subject to significant risks and uncertainties that could cause actual performance
or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that
could cause such differences include, but are not limited to:
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our
lack of operating history;
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our
current and future capital requirements and our ability to satisfy our capital needs;
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our
inability to keep up with industry competition;
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interpretations
of current laws and the passages of future laws;
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acceptance
of our business model by investors and our ability to raise capital;
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our
drug discovery and development activities may not result in products that are approved by the applicable regulatory authorities.
Even if our drug candidates do obtain regulatory approval they may never achieve market acceptance or commercial success;
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our
reliance on key personnel, including our ability to attract and retain scientists;
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our
reliance on third party manufacturing to supply drugs for clinical trials and sales;
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our
limited distribution organization with no sales and marketing staff;
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our
being subject to product liability claims;
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our
reliance on key personnel, including our ability to attract and retain scientists;
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legislation
or regulation that may increase the cost of our business or limit our service and product offerings;
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risks
related to our intellectual property, including our ability to adequately protect intellectual property rights;
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risks
related to government regulation, including our ability to obtain approvals for the commercialization of some or all of our
drug candidates, and ongoing regulatory obligations and continued regulatory review which may result in significant additional
expense and subject us to penalties if we fail to comply with applicable regulatory requirements; and
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our
ability to obtain regulatory approvals in foreign jurisdictions to allow us to market our products internationally.
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Moreover,
new risks regularly emerge and it is not possible for our management to predict or articulate all risks we face, nor can we assess
the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to
differ from those contained in any forward-looking statements. All forward-looking statements included in this prospectus are
based on information available to us on the date of this registration statement. Except to the extent required by applicable laws
or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information,
future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on
our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this registration
statement.