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. The stake has since been reduced to 50.2% at December 31, 2015, by subsequent issuances of
Cytocom common stock to shareholders.
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.
We
are focused on the development and commercialization of therapeutic treatments for cancer, HIV/AIDS and autoimmune diseases and
immune disorders by combating these severe and fatal diseases through the stimulation and/or regulation of the body’s immune
system. Our growth strategy includes the near-term commercialization of our existing immunotherapies targeting cancer, Crohn’s
disease and/or HIV/AIDS.
Product
Development
The
drugs currently being developed by the Company include: (i) MENK, which is a small synthetic pentapeptide that is naturally produced
in the body. Exogenous MENK is being manufactured and developed under the name “IRT-101”; and (ii) naltrexone, a small
molecular weight chemical entity that is being developed in low doses under the name “IRT-103.” Both IRT-101 and IRT-103
bind specifically to opioid receptors which are found not only in the central nervous system but also on other cells including
immune-mediating cells, cancerous cells and epithelial cells (including those in the gastrointestinal tract) where they play a
role in regulation of inflammation, growth, and mucosal repair. Opioid receptors have been associated with most types of immune
cells and chemokine receptors, where their interaction involves changes in cell proliferation, alteration of functions, and release
of inflammatory cytokines.
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 and
disorders such as Crohn’s disease.
MENK
MENK
is a potent endogenous opioid peptide that influences DNA synthesis and cell growth. MENK interacts with the opioid growth factor
receptor (OGFr) which has been shown in nonclinical studies to delay the cell cycle by modulating cyclin-dependent inhibitory
kinase pathways. The MENK-OGFr axis is an inhibitory pathway that plays a role in the onset and progression of autoimmune diseases,
viral disease (such as HIV/AIDS) and cancer. Studies have shown that the modulation of the MENK-OGFr axis can be accomplished
by the administration of exogenous MENK intravenously, or through other methods such as subcutaneous administration. By regulating
this pathway with MENK, this can have a direct impact in maintaining human health and treatment of diseases. (Zagon IS, Donahue
R, McLaughlin PJ. Targeting the opioid growth factor: opioid growth factor receptor axis for treatment of human ovarian cancer.
Exp Biol Med (Maywood).
2013 May; 238(5):579-87.
McLaughlin PJ
,
Zagon IS
. The opioid growth factor-opioid
growth factor receptor axis: homeostatic regulator of cell proliferation and its implications for health and disease (
Biochem
Pharmacol.
2012 Sep 15; 84(6):746-55).
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.
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.
The
MENK treatment was generally well tolerated with no significant toxicity observed. The high dose of MENK significantly 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 significant 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.
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.
|
A
team from Penn State University (“PSU”), led by Dr. Ian Zagon as the senior basic scientist and Dr. Jill Smith as
the senior physician scientist, have shown that in addition to the reported immunotherapy effects of MENK, they have discovered
a novel opioid receptor that is highly expressed on cancer cells and on some normal tissue cells, which selectively bind MENK
and thereby has been shown to induce direct inhibition of cancer cell growth in the laboratory or in immunodeficient nude mice,
and they have decided to refer to MENK as an opioid growth factor (“OGF”). Therefore, MENK has been shown to have
therapeutic activity by both immune stimulating effects (binding to OGF receptors (OGFr) on immune cells to increase immune function)
and direct anti-cancer inhibitory effects (binding to OGFr on cancer cells to inhibit cell growth).
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).
LDN
Management
believes clinical trials involving LDN hold great promise for the millions of people worldwide with 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.
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)
|
Significant
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. In addition, LDN has been used quite widely for treatment of a variety of autoimmune diseases and
immune disorders. 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.
Adverse
Events reported to date in patients with Crohn’s Disease
|
|
Phase 1 Open-label Study in Adults N=17
|
|
|
Phase 2 Randomized, double-blind,
placebo-controlled study in Adults N=40
|
|
|
Phase 2 Pilot study in Children
N=12 a
|
|
Adverse Event
|
|
LDN
|
|
|
Placebo
|
|
|
LDN
|
|
|
Placebo
|
|
|
LDN
|
|
Sleep disturbance
|
|
|
7
|
|
|
|
5
|
|
|
|
5
|
|
|
|
2
|
|
|
|
2
|
|
Unusual dreams
|
|
|
1
|
|
|
|
3
|
|
|
|
2
|
|
|
|
0
|
|
|
|
2
|
|
Insomnia
|
|
|
5
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Nausea
|
|
|
1
|
|
|
|
4
|
|
|
|
4
|
|
|
|
0
|
|
|
|
1
|
|
Hair thinning/ Hair loss
|
|
|
1
|
|
|
|
1
|
|
|
|
0
|
|
|
|
1
|
|
|
|
0
|
|
Hair growth
|
|
|
0
|
|
|
|
0
|
|
|
|
1
|
|
|
|
0
|
|
|
|
0
|
|
Blurred vision
|
|
|
1
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Irritability
|
|
|
1
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Mood swings
|
|
|
1
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Mild disorientation
|
|
|
1
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Twitching
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1
|
|
|
|
1
|
|
Headaches
|
|
|
0
|
|
|
|
2
|
|
|
|
4
|
|
|
|
1
|
|
|
|
0
|
|
Decreased appetite/ Loss of appetite
|
|
|
0
|
|
|
|
0
|
|
|
|
2
|
|
|
|
1
|
|
|
|
0
|
|
Fatigue
|
|
|
0
|
|
|
|
3
|
|
|
|
0
|
|
|
|
1
|
|
|
|
0
|
|
Flushed ears
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1
|
|
Papules, rash
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1
|
|
|
|
0
|
|
Double vision
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1
|
|
Flatulence
|
|
|
0
|
|
|
|
5
|
|
|
|
6
|
|
|
|
0
|
|
|
|
0
|
|
Vomiting
|
|
|
0
|
|
|
|
1
|
|
|
|
3
|
|
|
|
0
|
|
|
|
0
|
|
Diarrhea
|
|
|
0
|
|
|
|
5
|
|
|
|
7
|
|
|
|
0
|
|
|
|
0
|
|
Abdominal Pain
|
|
|
0
|
|
|
|
5
|
|
|
|
5
|
|
|
|
0
|
|
|
|
0
|
|
Constipation
|
|
|
0
|
|
|
|
0
|
|
|
|
2
|
|
|
|
0
|
|
|
|
0
|
|
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 do not control the disease well and there are major side effects associated with virtually all of the currently used drugs.
In addition, most of these drugs are very expensive. 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 significant disease
and quality of life improvement by 12-weeks. LDN was able to reverse the inflammatory activity, promote mucosal healing, and significantly
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 Phase II dose response 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 most significant 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
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.
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’s management believes that to be successful, it was imperative to not only acquire all of the intellectual property
and patents but also the scientist(s) behind their development. To date, 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. Angus Dalgleish and Dr. Joseph Fortunak.
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 e (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 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.
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.
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
.
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.
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
|
|
Methods
for inducing sustained immune response.
|
|
May
16, 2022
|
|
Assigned
and licensed: Nicholas Plotnikoff.
|
|
IRT-101
(MENK)
|
|
|
|
|
|
|
|
|
|
China
Patent 200810229085
|
|
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.
|
|
March
21, 2026
|
|
Assigned
by Fengping Shan.
|
|
IRT-101
(MENK)
|
Immunotherapy
Overview
of Immunotherapy
The
role of the immune system in counteracting the development of cancer was initially supported by individual clinical case reports,
when it was observed that cancer occurs more frequently in individuals with compromised immune systems. In groundbreaking work
in the late 1800s, it was noted that some cancer patients suffering from bacterial infections had regression in their tumors.
In trying to fight off the bacterial infection, the patients’ immune systems had become highly activated, thus affording
some resistance to the tumor. Since then there have been hundreds of clinical trials conducted to evaluate numerous candidates
and decades of research by countless scientists. In April 2010, Provenge became the first cancer immunotherapy to acquire FDA
approval.
Immunotherapy
History
More
than 100 years after researchers first explored the potential to harness the body’s immune system to fight cancer, many
of the field’s leading doctors believe the concept will finally prove itself on a large scale within the next two years.
A number of large companies now work on immunotherapy drugs for the treatment of cancer and, if proven successful, could gain
a significant share of the global market for oncology drugs. IMS Health estimates the oncology drug market will reach $75 Billion
by 2015 (The Global Use of Medicines: Outlook Through 2015, IMS Institute for Healthcare Informatics (2011). Scores of new immunotherapy
vaccines and other immune system modifiers are being tested against a variety of cancers. The new understanding of how immunotherapies
work may demand a revised definition of clinical success.
Antigen
Presentation
Antigen
presentation is a process in the body’s immune system by which antigen-presenting cells (“APCs”), such as macrophages,
B-lymphocytes, dendritic cells and other types of cells, process and present antigens on their surfaces to effector cells in the
immune system and enable their recognition, inducing two major types of defense (i.e., adaptive and innate) against the target
protein. The adaptive response is thought to be “specific” and is composed of highly specialized, systemic T and B
cells and processes that eliminate or prevent disease, whereas the innate response is active spontaneously, is “non-specific,”
and reacts against foreign cells immediately. There are several types of cells involved in the innate immune response, especially
natural killer (“NK”) cells and dendritic cells which are present in tissues in contact with the external environment
and have garnered the most research interest as antigen presenting cells. Tumor cells display a number of proteins on the cell
surface that signal to the immune system that these cells are not normal, healthy cells. As a result, cancer patients often have
specific anti-tumor antibodies and T-cells circulating in their blood, demonstrating that the immune system detected the tumor
cells and mounted a specific response.
In
many cases, the immune system response fails due to strategies that tumor cells use to evade immune detection. These strategies
range from methods designed to hide tumor cells, to active incapacitation of immune cells by tumor-produced agents that lower
the immune system’s responses. Based on the types of antigens and method of their presentation used, the following immunotherapy
strategies have been evaluated:
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Active
Immunotherapy by which drugs or vaccines stimulate the body’s own defenses to fight disease;
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Adoptive
Immunotherapy which uses immune system components (e.g., antibodies, cytokines, or immune cells) created outside the body
and then administered to patients; and
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Non-Specific
Immunotherapies which stimulate the body’s immune system in general ways, including activity against cancer cells or
virus-infected cells.
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While
extending life is the gold standard, most cancer drug trials have been deemed successful when tumors shrink or when a treatment
can demonstrate a delay in tumor growth or in worsening of the disease, known as progression-free survival (“PFS”).
New approaches based on more recent knowledge of the immune system include activating a variety of cells to go after tumors and
modifying mechanisms that keep either the immune system in check or turn it loose.
Immunotherapy
presents a number of potential advantages over approved cancer treatments. The traditional tools for treating cancer have been
around for years, including radiation, which has been used since the 1800s; surgery; and chemotherapy, which evolved from the
original use of mustard gas after World War I. All of these treatments are based on destroying the cancer cells either by damaging
their DNA, selective toxicity or removing them. All of these therapies have a high number of side effects. The goal of immunotherapy
is to treat the disease by harnessing the immune system to eliminate or control chronic, life-threatening diseases avoiding the
necessity for these traditional treatments.
The
immune system is quite diverse and includes major biological functions: (1) immune defense, which works against infectious organisms
such as bacteria, viruses, fungi, and parasites; (2) immune homeostasis which works to remove senescent cells and debris; and
(3) immune surveillance to clear mutated cells or cancer cells. Researchers discovered that the principal cells in the immune
system that attacked viruses and tumors were macrophages, dendritic cells, T-cells, NK cells, NKT cells and gamma/delta T-cells.
These cells originate in bone marrow and perform functions in peripheral blood, skin, respiratory and intestinal tracts, and immune
organs. The most important participant in the immune response is a class of white blood cells known as lymphocytes. These cells
develop in the bone marrow and are released into general circulation. There are different subpopulations of T-Cells including:
Helper T-Cells (Th) (CD4+), cytotoxic T-cells (CTL)(CD8+) and CD4+/CD25+T cells (T regulatory cells), and NK cells.
One
of the most significant medical advances in the past 30 years has been the discovery of the hormones of the immune system, known
as “cytokines.” Cytokines are small proteins or polypeptides produced by certain body cells that interact with other
cells of the immune system in order to regulate the body’s response to disease or other disorder. The most famous of these
are the interleukins (“IL”) and the interferons (“IFN”), such as IL-2 and IFN-gamma. Another major group
includes the enkephalins, such as MENK and endorphins. Clinically, these cytokines have been found to be useful in stimulating
the immune system in treating viral infections such as AIDS and hepatitis as well as in a number of different types of cancer.
The resulting balance of systems protects the individual from harmful extremes of uncontrolled activity. Diseases such as those
caused by viral infections (especially HIV), bacterial infections and cancer tend to result in deficiencies of the immune system
response. Thus, it is critical to restore the body’s immunity to its effective level and to restore system balance.
Our
Company’s Immunotherapy
Management
believes one of the most significant medical advances in the past 20 years has been the discovery of the hormones of the immune
system, known as “cytokines.” MENK is a member of the body of hormones known as cytokines, which are produced by the
immune system. MENK plays an essential role in influencing all components of the immune system.
Two
of the most important compounds being researched by the Company are LDN and MENK. Both LDN and MENK are proven immune-stimulating
drugs. They boost the immune system by increasing the T and NK cells in the body, thereby activating the body’s own natural
defenses against cancer, autoimmune diseases, immune disorders and infections. As previously mentioned, Dr. Plotnikoff and Professor
Shan have published articles proving that MENK plays a very important role in immune stimulation. Dr. Plotnikoff and Professor
Shan have been able to show that MENK has more advantages in boosting the human immune system than either IFN (interferon) or
IL-2 (interleukin-2). MENK inhibits Treg cells while interferon or interleukin-2 does not. This is a unique discovery by the Company
that supports our strategy to combat cancer with our patented technologies and therapies.
The
most important participant in the immune response is a class of white blood cells known as lymphocytes. These cells develop in
the bone marrow and are released into general circulation. The lymphocytes (or white blood cells) traveling through the thymus
are transformed into T-lymphocytes (or T-Cells) by a hormone known as thymosin. Others, known as B-lymphocytes (or B-Cells), mature
in other regions of the body. B-Cells produce specific substances called antibodies that bind to and destroy antigens.
Researchers
discovered that the principal cells in the immune system that attack viruses and tumors are T-cells and NK cells. These cells
originate in certain body tissues such as the bone marrow and are activated by hormones known as cytokines, which include enkephalins.
Several of these are recognized as stress hormones that stimulate the immune system to fight off infections and cancer.
Thus,
the immune system acts as a defensive system against infectious organisms such as bacteria, viruses, fungi and parasites and,
importantly, tumor cells. The immune system includes many different defense cells such as macrophages, T-cells, NK cells, B-cells
and neutrophils. These cells and their produced cytokines communicate with all of the cells in the immune system.
Our
Immunotherapy Products
IRT-101
is an active immunotherapy systemic administration of MENK that works by stimulating and/or regulating a patient’s immune
system against infectious diseases, autoimmune diseases, immune disorders and tumor cells. This is accomplished by increasing
the number of T-cells and NK cells, NKT and gamma/delta T-cells that destroy infective organisms and tumor cells, while simultaneously
inhibiting T regulatory cells.
IRT-103
is an active immunotherapy by administration of LDN which works by the short-term blockage of opioid receptors on circulating
and tissue cells followed by a substantial rebound in opioid receptor expression and increased levels of β-endorphin and
methionine-enkephalin.
Management
considers any condition that results in altered-immune response a target for investigation. However, the Company will most likely
pursue additional investigations for LDN and MENK as valuable candidates in the treatment of the following:
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Autoimmune
diseases or immune disorders such as Crohn’s disease and multiple sclerosis;
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As
an adjunct to antivirals in the treatment of HIV/AIDS; and
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In
cancer patients undergoing chemotherapy, radiation treatments or surgery.
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In
clinical trials there is evidence that LDN and MENK stimulate the immune system and are effective in the treatment of some immune-suppressed
diseases. The treatment modality to date has been demonstrated to be effective while avoiding certain deleterious effects on the
body, as is often the case with traditional treatments.
Treatment
Focus
Cancer
In
clinical trials with MENK, and off-label use of LDN around the world, both products are being used to fight cancer. MENK treatment
has been shown in clinical trials to have a substantial degree of efficacy against a wide variety of cancers in patients, with
only mild side effects.
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 1 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 1 week of age. Due to significant
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/low dose naltrexone (LDN). She is currently close to 10 years disease–free
survival (Rogosnitzky M,
et al.,
2013). 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 5 years disease-free survival (Rogosnitzky M,
et al.,
2013).
Multiple
clinical trials have been performed by Dr. Jill Smith and her colleagues at the Pennsylvania State University (PSU) School of
Medicine in Hershey, PA. A total of five advance cancer studies have been conducted with MENK via i.v. infusion or s.c. injection.
Three studies were conducted in patients with advanced pancreatic cancer, one study in patients with hepatocellular carcinoma,
and one study in patients with advanced head and neck cancer. Across the five studies, MENK therapy has been observed to be safe
with limited toxicity when given to adults with advanced cancer. The patients with pancreatic cancer had failed prior chemotherapy
regimens and were either treated with MENK or were entered into a hospice program. Clinical benefits were experienced by 53% of
MENK-treated patients, whereas historical controls with similarly advanced disease had only 23.8% and 4.8% for gemcitabine and
5-fluorouracil (5-FU), respectively. Of the MENK-treated patients surviving more than eight weeks, 62% showed either a decrease
or stabilization in tumor size by computed tomography. The median survival time for the MENK-treated patients was three times
that of the untreated hospice patients (65.5 versus 21 days, p < 0.001). No adverse effects on hematologic or chemistry parameters
were noted, and quality of life surveys suggested improvement with MENK (Smith JP, Conter RL, Bingaman SI, Harvey HA, Mauger DT,
Ahmad M, Demers LM, Stanley WB, McLaughlin J, Zagon IS. Treatment of advanced pancreatic cancer with opioid growth factor: Phase
I. Anti-Cancer Drugs. 2004; 15:203–209. Smith JP, Bingaman SI, Mauger DT, Harvey HA, Demers LM, Zagon IS. Opioid Growth
Factor improves clinical benefit and survival in patients with advanced pancreatic cancer. Open Access Journal of Clinical Trials.
2010; 2 37–48).
The
use of MENK therapy at earlier stages of disease or in combination with chemotherapeutic agents may further improve the outcome
of this very aggressive malignancy.
HIV/AIDS
Early
stage clinical trials in AIDS patients have been completed and results from these trials show great promise.
The
Company recently completed an open label non-randomized, two-group clinical trial during the period of May 2015 through December
2015. The control group received the standard ART medication plus a placebo, while the treatment group received 4.5 mg of LodonalTM
[daily at bedtime] in addition to the standard ART medications. All patients enrolled in this study signed informed consent forms
required by the Osun State Ministry of Health Ethics Committee and were covered by health insurance. 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 in of 44% for the Treatment Group compared to 11% for 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. The patients were able to go about their daily routine unhindered. No significant
sleep disturbance or vivid dreams were present enough to justify trial discontinuation. No significant adverse CNS, renal, cardiac,
hepatic, musculoskeletal, hematopoietic side effects were present.
NAFDAC
is at the forefront of the development of effective health-care in Africa. NAFDAC has approved Lodonal
TM
as an innovative
non-toxic adjunct treatment in the treatment of HIV/AIDS and as a general immune booster to improve the quality of life of people
suffering from a compromised immune system.
A
single blind nine-month randomized clinical trial and a single prospective cohort study were conducted in Mali under the auspices
of the Centre National d’Appui à la lutte contre la Maladie (CNAM), Bamako, Mali and other institutions named in
the study to evaluate the impact of LDN on asymptomatic HIV+ adults. Results of the nine-month study showed an improvement in
CD4 count in the treatment groups that was significantly greater than the control group at 6 months (p = 0.041) and marginally
at 9 months (p = 0.067) (Traore AK, Thiero O, Dao S, Kounde FF, Faye O, Cisse M, McCandless JB, Zimmerman JM, Coulibaly K, Diarra
A, et al. Impact of low dose naltrexone (LDN) on antiretroviral therapy (ART) treated HIV+ adults in Mali: A single blind randomized
clinical trial.
J. AID HIV Res
. 2011; 3(10):189-198). Results of the single prospective cohort study showed 71% of subjects
that completed the study did not show any indication of clinical AIDS symptoms, side effects or a loss of CD4 count that would
warrant initiation of ART medication (Traore AK, Thiero O, Dao S, Kounde FF, Faye O, Cisse M, McCandless JB, Zimmerman JM, Coulibaly
K, Diarra A, et al. Single cohort study of the effect of low dose naltrexone on the evolution of immunological, virological and
clinical state of HIV+ adults in Mali.
J. AID HIV Res
. 2011; 3(10):180-188).
A
12-week, placebo-controlled trial of LDN was conducted from 1985-1986 in 38 patients with AIDS by Dr. Bihari and his colleagues.
Patients who participated in this trial showed a significant difference in the incidence of opportunistic infections with 5 out
of 16 patients (31%) on placebo developing opportunistic infections in comparison to 0 of the 22 patients in the LDN group. Other
difference between placebo and LDN treated patients included: lymphocyte mitogen responses declined on placebo and not on LDN;
pathologically elevated levels of acid-labile alpha interferon declined significantly in the patients on LDN and not in those
patients on placebo (Bihari B. Low Dose Naltrexone in the Treatment of HIV Infection.
www.lowdosenaltrexon.org
. September
1996
http://www.lowdosenaltrexone.org/ldn_hiv_1996.htm
).
After
the conclusion of the above clinical trial, Dr. Bihari began to use LDN in his own medical practice. Of 158 patients in his practice
that were evaluated, only 10 (6%) were on antivirals. Patients of Dr. Bihari who had taken the drug regularly as prescribed showed
no drop in CD4 cells. The average CD4 number in these patients before starting LDN was 358, and the average 18 months later increased
to 368. There were 55 patients who had not taken the drug, or had taken it only sporadically (non-compliant) and these patients
showed a drop of CD4 cells from an average of 297 to 176 in 18 months. This represented a drop in CD4 of approximately 80 per
year, which corresponds to the average drop observed in patients with HIV receiving no treatment. The stabilization of CD4 cells
in patients who were administered LDN was also accompanied by disease stabilization. The 55 patients who were non-compliant experienced
25 opportunistic infections, in comparison to the 103 compliant patients who only experienced 8. Survival between the two groups
was also significantly different, 13 deaths occurred in the 55 non-compliant patients compared to only one death in the compliant
group of 103. At the time of this referenced article (1996), patients in Dr. Bihari’s practice had been on LDN for 7 to
8 years, with no disease progression, no drop in CD4 levels and no evidence of resistance to the beneficial effects of LDN. None
of the patients experienced side effects while on LDN.
Dr.
Bihari also examined CD4 changes in 19 patients who were on the combination treatment regimen of 3TC (Epivir), AZT and LDN. The
rise in CD4 counts at 6 months in Dr. Bihari’s patients was compared with the rise in CD4 counts reported by an investigator
working for Glaxo (New England Journal of Medicine, December 21, 1995, Vol. 333, number 25, pg. 1662). In both groups none of
the patients had taken AZT previously; however Dr. Bihari’s patients simultaneously were treated with LDN, which the Glaxo
group did not receive. The patients on LDN had an average baseline CD4 count of 88 while the Glaxo group had an average baseline
value of 352. The Glaxo patients experienced an average rise in CD4 of 40 at 6 months; or an increase of 11.3%. The LDN patients
experienced an average rise of 106 CD4’s at 6 months, representing a 128% increase. Of the 19 LDN patients, each patient
experienced an increase of at least 30%. In 18 of the 19 LDN patients, a significant increase in energy, appetite and mood was
observed. In those LDN patients who were severely underweight, weight gains of 10 to 50 pounds were observed in the first two
months of treatment.
Crohn’s
Disease
Crohn’s
disease is an inflammatory bowel disease (“IBD”) marked by chronic inflammation potentially involving any location
of the gastrointestinal tract (“GI”) causing abdominal pain, diarrhea, GI bleeding, and weight loss. Crohn’s
disease can be both painful and debilitating, and sometimes may lead to life-threatening complications. Current therapies for
the condition reduce the inflammation but can be expensive and may incur rare but serious side effects, including infections and
lymphoma. Prior research has suggested that endorphins and enkephalins may play a role in the development or continuation of inflammation.
References
are as follows (conducted by Penn State University Hershey Medical Center (“PSU”)):
|
1.
|
Smith
JP, Bingaman SI, Ruggiero F, Mauger DT, Mukherjee A, McGovern CO, Zagon IS. Therapy with the Opioid Antagonist Naltrexone
Promotes Mucosal Healing in Active Crohn’s Disease: A Randomized Placebo-Controlled Trial. Dig Dis Sci. 2011 July; 56(7):
2088-2097.
|
|
|
|
|
2.
|
Smith
JP, Field D, Bingaman SI, Evans R, Mauger DT. Safety and Tolerability of Low dose Naltrexone Therapy in Children With Moderate
to Severe Crohn’s Disease A Pilot Study. J Clin Gastroenterol. 2013 Apr; 47(4):339-45.
|
|
|
|
|
3.
|
Smith
JP, Stock H, Bingaman SI, Mauger DT, Rogosnitzky M, Zagon IS. Low dose Naltrexone Therapy Improves Active Crohn’s Disease.
Am J Gastroenterol. 2007; 102:820-828.
|
To
date the comparator used in the clinical trials has been stable doses of standard of care in combination with LDN or with placebo.
However, patients enrolled in these trials had significantly elevated CDAI (Crohn’s Disease Activity Index) and PCDAI (Pediatric
Crohn’s Disease Activity Index) scores upon enrollment despite maintenance standard of care drugs and other concomitant
medications. CDAI is an index utilized to determine an adult patient’s progress, or lack of progress with their disease
state and PCDAI is the corresponding pediatric index. The CDAI and PCDAI are utilized to provide a common scoring method of disease
state across multiple sites. This scoring method takes into account symptoms such as abdominal pain and frequency of liquid or
very soft stools. In addition to the CDAI or PCDAI, the Simple Endoscopic Score for Crohn’s Disease (SES-CD) will be utilized
to determine endoscopic disease state and changes in endoscopic activity pre- and post-treatment.
LDN
has been shown to be effective to date as is detailed in the publications below:
Randomized,
Double-Blind, Placebo-Controlled Study in Adults (Smith
et al
., 2011)
Results:
88% 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 a 28% response in placebo-treated
controls (p = 0.008), and 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.
Randomized,
Double-Blind, Placebo-Controlled Study in Children (Smith
et al
., 2013)
Results:
When contrasting the condition end points, we observed a significantly greater reduction of baseline pain in those taking low
dose naltrexone than in those taking placebo (28.8% reduction versus 18.0% reduction; P = 0.016). Low dose naltrexone was also
associated with improved general satisfaction with life (P = 0.045) and with improved mood (P = 0.039), but not improved fatigue
or sleep. Thirty-two percent of participants met the criteria for response (defined as a significant reduction in pain plus a
significant reduction in either fatigue or sleep problems) during low dose naltrexone therapy, as contrasted with an 11% response
rate during placebo therapy (P = 0.05). Low dose naltrexone was rated equally tolerable as placebo, and no serious side effects
were reported.
Regulatory
Status
The
Company holds the following IND Applications:
IND
#
|
|
Indication
|
|
Product
Name
|
|
Status
|
34,442
|
|
HIV/AIDS
|
|
MENK
|
|
Inactive
|
67,442
|
|
Crohn’s
Disease
|
|
Naltrexone
HCL
|
|
Active
|
50,987
|
|
Pancreatic
Cancer
|
|
MENK/OGF
|
|
Active
|
Clinical
trials under the INDs are anticipated to be conducted in the United States with the potential for global Phase III studies.
IRT-101
:
The Company had an End-of-Phase 1 Meeting with the FDA in August 2013 to discuss its development plan and protocol designs. Based
on the guidance from the FDA, the Company plans to initiate a Phase II dose response/dose-confirmation study in patients with
advanced cancer. Possible indications include MENK as an adjuvant therapy for the treatment of advanced ovarian cancer, advanced
hepatocellular cancer or advanced head and neck cancer.
IRT-103
:
A Type C meeting was held with the FDA on June 26, 2013. Based on the guidance from the FDA, the Company plans to initiate a Phase
II dose-response/dose-confirmation study in patients with active Crohn’s disease. Possible indications include Multiple
Sclerosis, Crohn’s disease, fibromyalgia or HIV (in combination with antivirals in asymptomatic HIV patients).
IRT-103
is currently our lead candidate.
An
End-of-Phase 1 meeting occurs with the FDA after completion of Phase 1 studies, where guidance is sought prior to moving into
Phase 2 clinical trials. This type of meeting is also considered a Type B meeting. Type B meetings are typically scheduled to
occur within 60 days of FDA receipt of the official written meeting request.
A
Type C meeting is any meeting requested with the FDA that does not fall into the category of a Type A or Type B meeting. Type
C meetings are typically scheduled to occur within 75 days of FDA receipt of the official written meeting request.
A
Type A meeting is a meeting needed to help an otherwise stalled product development program proceed.
Type
B meetings are: (i) pre-investigational new drug application (pre-IND) meetings; (ii) certain End-of-Phase 1 meetings; (iii) End-of-Phase
2 meetings; and (iv) pre-new drug application (NDA)/biologics license application (BLA) meetings.
The
FDA review staff participates in meetings with sponsors and applications who seek guidance relating to the development and review
of INDs and drug or biological product marketing applications. These meetings are often at critical points in the regulatory process
and are helpful for applicants to help them continue to make progress toward FDA approval.
The Company has recently retained Cote Orphan to submit
an expanded briefing package to the FDA for both Pediatric and Adult Crohn’s Disease. Once we obtain final protocol approval
from the FDA, subject to availability of funding, we hope to begin the trials in 2016.
Business
Strategy
The
Company’s short-term business strategy focuses on several key areas described below, all of which are being undertaken simultaneously.
Conference
Attendance:
The Company will participate in a number of conferences both domestically and internationally in 2016 about the
value of LDN as an immunomodulator for the treatment of autoimmune diseases and cancer. These conferences include SeeThu Equity
Conference February 22, 2016; South Florida Investment Forum Luncheons & Corporate Presentations on March 7th in Miami and
March 8
th
, 2016 in Boca Raton, Florida; BIO Int. Convention San Francisco, CA June, 6–9, 2016; Global Biotechnology
Congress 2016 (4th in the Series) August 22nd - 25
th
, 2016, Boston, MA, USA. The Company will add conferences as they
come available and funds are available.
International Regulatory Approval in 2016:
The Company has been in discussions with drug regulators regarding the regulatory and approvals process for sale of its products
in 2016 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 2015, the Company presented the final
results of a bridging trial in Nigeria. As of March 30, 2016, 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.
Establish
Partnerships in Africa:
The Company’s goal is 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 KRS Global Biotechnology, Inc., which is described in detail below under “Agreements to Promote Development and Sale
of Company Products,” we believe that in 2016 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 IRT-103 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 2015, 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 2015, and we are now awaiting final NAFDAC approval to commence sales in Nigeria. The Company also expects to commence
a bridging trial for cancer in 2016 in the Republic of Malawi.
On
the regulatory front, Cytocom Inc. has held constructive dialogue with the FDA with respect to appropriate trial designs and study
protocols for IRT-103 LDN 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 second quarter of
2016.
Cytocom
Inc.’s immediate focus will be on Crohn’s Disease both in children and adults and the Company expects recruitment
in both pharmacokinetic (PK) and Dosing Trials for IRT-103 LDN to begin in 2016 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 2016 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.
Strategy
for Growth:
Since
2014, 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
$2.66 million in 2015. The Company anticipates generating revenues in 2016 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 2015 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 IRT-103 LDN 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), IRT-103 LDN 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.
South
Africa:
Based on a wide range of data including the household and antenatal studies, UNAIDS 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, IRT-103 LDN 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 2016. The Company has issued the Brewer Group
a total of 1,000,000 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.
On
July 14, 2012, GBOIG in partnership with the Company signed a letter of intent agreement to collaborate with the Government of
Malawi to assist in expanding the treatment of cancer, HIV/AIDS and other 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.
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The
first protocol, submitted jointly with The Jack Brewer Foundation (“JBF Worldwide”), received PMPB approval on
November 11, 2015. 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 second quarter of 2016. Lodonal™ pills have been produced in Nicaragua
in anticipation of the trial. Shipments will commence once the trial is approved.
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b.
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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, and the Company expects a final protocol to be submitted for approval by year end.
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On
September 25, 2012, GBOIG, in partnership with the Company, signed an agreement with the Government of Malawi to open an outpatient
clinic at Queen Elizabeth Central Hospital (in Malawi) for the treatment of cancer and infectious disease. The duration of the
Agreement shall be for 25 years with an optional 10-year renewal to be indicated by the Government of Malawi at least three years
prior to the expiration of the term. The Government of Malawi shall bear the upfront costs for the agreement of $2,500,000. Due
to a change in the Government the Company has abandoned this contract.
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 second quarter of 2016. 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 30, 2016 the Company is still awaiting approval
for distribution of Lodonal™ in Nigeria.
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.
On
December 8, 2014, the Company entered into a Contract for the Compounding of Pharmaceutical Products with KRS Global Biotechnology,
Inc. (“KRS”) pursuant to which KRS will carry out the services of compounding, packaging and distributing tablets
of IRT-103 LDN for sale in the United States in accordance with the agreement. The agreement has an initial term of three years
starting on December 8, 2014. The parties may agree to extend the initial term for one year. KRS will pay the Company for every
tablet it compounds, packages and sells, calculated in accordance with a formula set forth in the agreement. The Company has agreed,
(i) to provide sales and marketing assistance necessary to allow KRS to fulfill its obligations, (ii) that the rights provided
to KRS in the agreement to provide IRT-103 LDN are exclusive only to KRS and will not be provided to any other party during the
term, (iii) to provide KRS with specifications for raw materials and the necessary technical specifications for the compounding
and packaging processes of IRT-103 LDN, as available, (iv) in the event of termination by the Company for any reason, to reimburse
KRS for all unused packaging materials, (v) in the event that KRS does not receive and ship at least 1,000 orders (prescriptions)
for LDN, to reimburse KRS for 100% of the “ramp up costs” of compounding our product, even in the case where the Company
cancels/terminates the agreement, and (vii) to provide the design of secondary packing and instructions in any language needed
to sell IRT-103 LDN. KRS is required to order and have shipped directly to KRS the active pharmaceutical ingredient necessary
for the production of IRT-103 LDN and to submit a purchase order to the Company for such active pharmaceutical ingredient. The
Company has agreed to pay such purchase order directly to the supplier of the active pharmaceutical ingredient. Upon KRS receiving
a minimum of 10,000 orders (prescriptions) per month, KRS will pay for the active pharmaceutical ingredient for each such 10,000
orders month.
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 IRT-103 LDN 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
2015, the Company recorded Lodonal sales totaling $16,197 to individuals in the USA under its agreement with KRS. The Company
had no sales to customers in 2014.
The
Company has made final applications for the importation of Lodonal™ into the Republic of Nigeria, Republic of Equatorial
Guinea where the company obtained approval for the drug the government to date has not allocated any funds to complete the purchase.
The Company has received approval from the Republic of Malawi and has received approval for the importation of Lodonal™,
subject to completion of a 6 month clinical trial as an adjunct treatment for cancer. In December 2014, 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 2015,
and as of March 30, 2016 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 2016.
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 Authorisation 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 significant 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.
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 SADC published Guidelines for Submitting Application for Registration of a Medicine are available at: http://www.ich.org/fileadmin/Public_Web_Site/ABOUT_ICH/Organisation/SADC/Guideline_for_Medicine_
Registration.pdf.
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.
http://www.sadc.int/about-sadc/overview/strategic-pl/regional-indicative-strategic-development-plan/.
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.
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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China
In
terms of the Company’s cooperative venture with its China Partner, the Partner is required to obtain all approvals and permits
required for the importation and sale of the Company’s products in China.
China’s
drug registration process is administered by the China Food and Drug Administration (“CFDA”) (formerly known as China
State Food and Drug Administration or “SFDA”). The process includes two applications, before and after a clinical
trial.
The
first step is to submit an application to the CFDA for a Clinical Trial Application (“CTA”). The CFDA will conduct
a preliminary review of the submission package and then transfer the dossier to the Center for Drug Evaluation (“CDE”).
Reviewers with background in pharmaceuticals, pharmacology and clinical study will run a technical review, while local sample
testing will also be conducted in parallel. Few CTAs pass through the CDE review in one round. However, most applications will
receive supplement notice(s) in writing to request additional information for further assessment. In such case, CDE will allow
a 4-month period for the applicant to gather and submit additional requested information to CDE. This entire CTA step usually
takes at least 125 working days. A CTA is similar to an IND in the United States.
The
second step in drug registration is Production Application (or Imported Drug License Application), which involves submitting a
clinical report and other relevant files to obtain an imported drug license. The process itself is basically the same as the CTA
step. This second step will take approximately 145 days. A Product Application is similar to an NDA.
Nicaragua
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.
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, 2014, we had two compounds (IRT-101 and IRT-103) in research and development. In 2014 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
|
|
Crohn’s
Disease
|
|
Type
C Meeting with FDA Complete 2Q 2013
Scientific
Advice with EMA Complete 1Q 2014
|
The
Company has incurred, and expects to continue incurring, substantial research, development and other costs in connection with
compound partnering agreements. In 2015, the Company incurred cash expenses of $xxx for research and development. The Company
estimates it will spend approximately $15,000,000 in cash for research and development costs in 2016.
Employees
As
of December 31, 2015, 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, 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 significant 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 $345 million 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 the current and/or future pivotal 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 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 it will spend in excess of $15,000,000 on clinical trials in the 12 months following the date of this Report.
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 annual report, although we have not observed significant 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:
|
●
|
the
efficacy and safety of our drug candidates as demonstrated in clinical trials;
|
|
|
|
|
●
|
the
clinical indications for which the drug is approved;
|
|
|
|
|
●
|
acceptance
by physicians, major operators of clinics and patients of the drug as a safe and effective treatment;
|
|
|
|
|
●
|
the
potential and perceived advantages of our drug candidates over alternative treatments;
|
|
●
|
the
safety of drug candidates seen in a broader patient group, including its use outside the approved indications;
|
|
|
|
|
●
|
the
cost of treatment in relation to alternative treatments;
|
|
|
|
|
●
|
the
availability of adequate reimbursement and pricing by third parties and government authorities;
|
|
|
|
|
●
|
relative
convenience and ease of administration;
|
|
●
|
the
prevalence and severity of adverse side effects; and
|
|
|
|
|
●
|
the
effectiveness of our sales and marketing efforts.
|
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 significantly 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:
|
●
|
we
may be unable to successfully complete the clinical development of IRT-103;
|
|
|
|
|
●
|
our
lack of experience in commercializing and marketing drug products;
|
|
|
|
|
●
|
we
may not have or be able to obtain sufficient financial resources to develop and commercialize IRT-103;
|
|
|
|
|
●
|
we
may not be able to identify a suitable co-development partner;
|
|
●
|
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;
|
|
|
|
|
●
|
we,
or any of our future partners, must comply with additional requests and recommendations from the FDA, including additional
clinical trials;
|
|
|
|
|
●
|
we,
or any of our future partners, may not obtain all necessary approvals from the FDA and similar foreign regulatory agencies;
|
|
|
|
|
●
|
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;
|
|
●
|
IRT-103
may not achieve market acceptance by physicians, patients and third party payers;
|
|
|
|
|
●
|
IRT-103
may not compete successfully against alternative products and therapies; and
|
|
|
|
|
●
|
we,
or any pharmaceutical company, may independently develop products that compete with IRT-103.
|
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. In particular, we rely on outside sources and our own revenue to fund and conduct the current pivotal
Phase III trials with respect to IRT-103 (LDN). 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:
|
●
|
regulatory
authorities may withdraw approval of the drug or seize the drug;
|
|
|
|
|
●
|
we
may be required to recall the drug or change the way the drug is administered;
|
|
|
|
|
●
|
additional
restrictions may be imposed on the marketing or the manufacturing processes of the particular drug;
|
|
|
|
|
●
|
we
may be subject to fines, injunctions or the imposition of civil or criminal penalties;
|
|
|
|
|
●
|
regulatory
authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;
|
|
|
|
|
●
|
we
may be required to create a medication guide outlining the risks of such side effects for distribution to patients;
|
|
|
|
|
●
|
we
could be sued and held liable for harm caused to patients;
|
|
|
|
|
●
|
the
drug may become less competitive; and
|
|
●
|
our
reputation may suffer.
|
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, 2015, we had $23,149 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. Our future financing requirements will depend on many factors, some of which are beyond our control, including:
|
●
|
the
rate of progress and cost of our clinical trials, preclinical studies and other discovery and research and development activities;
|
|
|
|
|
●
|
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;
|
|
|
|
|
●
|
our
ability to enter into additional collaboration, licensing, government or other arrangements and the terms and timing of such
arrangements;
|
|
|
|
|
●
|
potential
acquisition or in-licensing of other products or technologies; and
|
|
|
|
|
●
|
the
technologies or other adverse market developments.
|
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 (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 KRS 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 KRS 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 KRS 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 KRS pursuant to which KRS 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 KRS, 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 KRS 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, KRS 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 KRS 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.
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 significantly
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 significant 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
significant 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
13.7% 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.