Item
1. Business
Introduction
Nutra
Pharma is a holding company that owns intellectual property and operates in the biotechnology industry. Nutra Pharma was incorporated
under the laws of the state of California on February 1, 2000, under the original name of Exotic-Bird.com.
Nutra
Pharma conducts drug discovery research and development activities on its own and through its wholly-owned subsidiary, ReceptoPharm,.
In October 2009, Nutra Pharma launched its first consumer product called Cobroxin®, an over-the-counter pain reliever
designed to treat moderate to severe chronic pain. In May 2010, Nutra Pharma launched its second consumer product called Nyloxin®,
an over-the-counter pain reliever that is a stronger version of Cobroxin® and is designed to treat severe chronic pain.
In December 2014, we launched Pet Pain-Away, an over-the-counter pain reliever designed to treat pain in cats and dogs. In October 2019,
we launched Equine Pain-Away, an over-the-counter topical pain reliever designed to treat pain in horses. In March of 2021, we launched
Luxury Feet, an over-the-counter pain reliever and anti-inflammatory product that is designed for
women who experience pain or discomfort due to high heels and stilettos. In October of 2021 we began manufacturing a zeolite detoxifier
called Cell Defender for a third party distributor.
We
have conducted our operations since October 2003. We are a biopharmaceutical company that engages in the acquisition, licensing and commercialization
of pharmaceutical products and technologies as well as homeopathic and ethical drugs for the management of pain, neurological disorders,
cancer, autoimmune and infectious diseases. Homeopathic drugs are natural products that contain ingredients listed in the HPUS (Homeopathic
Pharmacopoeia of the United States). An ethical drug is a licensed drug that has obtained Federal Drug Administration (“FDA”)
approval after extensive pre-clinical and clinical testing. We seek strategic licensing partnerships to reduce the risks associated with
the drug development process.
Our
wholly owned subsidiary and drug discovery arm, ReceptoPharm, has carried out our homeopathic and drug discovery research and clinical
development and has fully developed four homeopathic drugs for the relief of pain:
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Nyloxin®
and Nyloxin® Extra Strength |
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Pet
Pain-Away: an over-the-counter pain reliever designed to relieve pain in cats and dogs |
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Equine
Pain-Away: an over-the-counter topical pain reliever designed to relieve pain in horses |
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Luxury
Feet: an over-the-counter pain reliever designed to relieve foot pain from high heels and stilettos |
Our
business plan will continue its efforts to produce, market and distribute our Nyloxin®, Pet Pain-Away™, Equine Pain-Away™
and Luxury Feet™ branded products both domestically and internationally.
From
October 2009 until December 31, 2021, our operations centered on the marketing of Cobroxin® (our discontinued product),
Nyloxin® and Nyloxin® Extra Strength. In December of 2014, we launched Pet Pain-Away and began actively
marketing the product. In October of 2021, we began manufacturing a Zeolite detoxification product and conducted some online sales. During
fiscal year 2021, we earned revenues of $97,735: $42,767 of it was from sales of Nyloxin®, $42,813 of it was from sales
of Pet Pain-Away, and $12,155 of it was from sales of Zeolite. We launched Equine Pain-Away in October of 2019 and Luxury Feet officially
launched distribution in March of 2021.
Additionally,
the Company has developed two drug candidates:
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RPI-78M,
to treat neurological diseases and autoimmune diseases, including; Multiple Sclerosis (MS), Adrenomyeloneuropathy (AMN), Amyotrophic
Lateral Sclerosis (ALS or Lou Gehrig’s disease), Rheumatoid Arthritis (RA) and Myasthenia Gravis; and |
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RPI-MN,
to treat viral diseases, including HIV/AIDS and Herpes. |
The
Company has developed proprietary therapeutic protein products primarily for the prevention and treatment of viral and neurological diseases,
including Multiple Sclerosis (MS), Adrenomyeloneuropathy (AMN), Human Immunodeficiency Virus (HIV) and pain in humans. These potential
products are subject to FDA approval.
The
Company is also pursuing the use of our technology as a potential nerve agent countermeasure that may protect war fighters from chemical
weapon attacks on the battlefield.
We
continue to identify biotechnology related intellectual property and companies with which we may potentially be able to enter into arrangements,
agreements or to potentially acquire.
Industry
Overview of the Pain Market
Pain
is the most common symptom for patients seeking medical attention. Acute and chronic pain affects large numbers of Americans, with approximately
100 million U.S. adults burdened by chronic pain alone. The annual national economic cost associated with chronic pain is estimated to
be $560-$635 billion. (Institute of Medicine, Relieving Pain in America, 2011).
According
to the American Academy of Pain Medicine (AAPM), chronic pain affects approximately 1.5 billion people worldwide, on account of the high
prevalence of cardiovascular disorders, cancer, and diabetes. Algomedix
estimated the global sales for the treatment of chronic pain were $60 billion in 2015; and according
to the market research report published by P&S Intelligence, the global chronic pain treatment market is expected to reach $105.9
billion by 2024. The market growth is primarily driven by the rising prevalence of chronic conditions, surging geriatric population,
and increasing government support toward chronic pain management.
Our
Products
Nyloxin®/Nyloxin®
Extra Strength
We
offer Nyloxin®/Nyloxin® Extra Strength as our over-the-counter (OTC) pain reliever that has been clinically
proven to treat moderate to severe (Stage 2) chronic pain.
Nyloxin®
and Nyloxin® Extra Strength are available as a two ounce topical gel for treating joint pain and pain associated
with arthritis and repetitive stress, and as a one ounce oral spray for treating lower back pain, migraines, neck aches, shoulder pain,
cramps, and neuropathic pain. Both the topical gel and oral spray are packaged and sold as a one-month supply.
Nyloxin®
and Nyloxin® Extra Strength offer several benefits as a pain reliever. With increasing concern about consumers using
opioid and acetaminophen-based pain relievers, the Nyloxin® products provide an alternative that does not rely on opiates
or non-steroidal anti-inflammatory drugs, otherwise known as NSAIDs, for their pain relieving effects. Nyloxin® also has
a well-defined safety profile. Since the early 1930s, the active pharmaceutical ingredient (API) of Nyloxin®, Asian cobra
venom, has been studied in more than 46 human clinical studies. The data from these studies provide clinical evidence that cobra venom
provides an effective treatment for pain with few side effects and has the following benefits:
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safe
and effective; |
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all
natural; |
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long-acting; |
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easy
to use; |
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non-narcotic; |
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non-addictive;
and |
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analgesic
and anti-inflammatory. |
Potential
side effects from the use of Nyloxin® are rare, but may include headache, nausea, vomiting, sore throat, allergic rhinitis
and coughing.
The
primary difference between Nyloxin® and Nyloxin® Extra Strength is the dilution level of the venom. The
approximate dilution levels for Nyloxin® and Nyloxin® Extra Strength are as follows:
Nyloxin®
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Topical
Gel: 30 mcg/mL |
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Oral
Spray: 70 mcg/mL |
Nyloxin®
Extra Strength
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Topical
Gel: 60 mcg/mL |
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Oral
Spray: 140 mcg/mL |
In
December 2011, we began marketing Nyloxin® and Nyloxin® Extra Strength at www.nyloxin.com. Both Nyloxin®
and Nyloxin®Extra Strength are packaged in a roll-on container, squeeze bottle and as an oral spray. Additionally,
Nyloxin® topical gel is available in an 8 ounce pump bottle.
We
are currently marketing Nyloxin® and Nyloxin® Extra Strength as treatments for moderate to severe chronic
pain. Nyloxin® is available as an oral spray for treating back pain, neck pain, headaches, joint pain, migraines, and
neuralgia and as a topical gel for treating joint pain, neck pain, arthritis pain, and pain associated with repetitive stress. Nyloxin®
Extra Strength is available as an oral spray and gel application for treating the same physical indications, but is aimed at treating
the most severe (Stage 3) pain that inhibits one’s ability to function fully.
The
Nyloxin products are available for sale on the www.Nyloxin.com website, the Nyloxin Amazon storefront at www.Amazon.com/nyloxin and on
the Walmart Marketplace. Nyloxin is also sold in physician offices. Clinics and small-chain pharmacies.
Nyloxin®
Military Strength
In
December 2012, we announced the availability of Nyloxin® Military Strength for sale to the United States Military and
Veteran’s Administration. Over the past few years, the U.S. Department of Defense has been reporting an increase in the use and
abuse of prescription medications, particularly opiates. In 2009, close to 3.8 million prescriptions for pain relievers were written
in the military. This staggering number was more than a 400% increase from the number of prescriptions written in the military in 2001.
But prescription drugs are not the only issue. The most common and seemingly harmless way to treat pain is with non–steroidal,
anti–inflammatory drugs (NSAIDS). But there are risks. Overuse can cause nausea, vomiting, diarrhea, heartburn, ulcers and internal
bleeding. In severe cases chest pain, heart failure, kidney dysfunction and life–threatening allergic reactions can occur. It is
reported that approximately 7,600 people in America die from NSAID use and some 78,000 are hospitalized. Ibuprofen, also an NSAID has
been of particular concern in the military. The terms “Ranger Candy” and “Military Candy” refer to the service
men and women who are said to use 800mg doses of Ibuprofen to control their pain. But when taking anti–inflammatory Ibuprofen in
high doses for chronic pain, there is potential for critical health risks; abuse can lead to serious stomach problems, internal bleeding
and even kidney failure. There are significantly greater health risks when abuse of this drug is combined with alcohol intake. Our goal
is that with Nyloxin®, we can greatly reduce the instances of opiate abuse and overuse of NSAIDS in high risk groups like
the US military. The Nyloxin® Military Strength represents the strongest version of Nyloxin® available
and is approximately twice as strong as Nyloxin® Extra Strength. We are working with outside consultants to register Nyloxin®
Military Strength and the other Nyloxin® products for sale to the US government and the various arms of the military
as well as the Veteran’s Administration. In February of 2018, Nyloxin was added to the Federal Supply Schedule but was subsequently
removed the following week without an adequate explanation. We have continued to work with our consultants to understand why our products
were improperly removed the Federal Supply Schedule and when we may be able to get re-listed on the Federal Supply Schedule for eventual
sales to governmental agencies or to the US Military.
International
Sales
We
are pursuing international drug registrations in Canada, Mexico, India, Australia, New Zealand, Central and South America and Europe.
Since European rules for homeopathic drugs are different than the rules in the US, we cannot estimate when this process will be completed.
On March 25, 2013 we announced the publication of our patent and trademark for Nyloxin® in India. We are actively seeking
new distribution partners in India.
On
May 14, 2015 we announced that we had engaged the Nature’s Clinic to begin the process of regulatory approval of our Company’s
Over–the–Counter pain drug, Nyloxin® for marketing and distribution in Canada. The Nature’s Clinic has
already begun setting up their Chatham, Ontario warehouse. Due to lack of funding and then the subsequent COVID crisis, we have waited
to complete the approval process to begin distributing Nyloxin® and expect to re-engage in the process in 2022.
On
February 1, 2018 we announced a Distribution Agreement with the Australian company, Pharmachal PTY LTD to market and distribute Nyloxin®
in Australia and New Zealand. Pharmachal has begun the registration process with the TGA (Therapeutic Goods Administration). At
this time, we do not know if our products will qualify for TGA registration and cannot provide a timeline for the eventual distribution
in Australia.
Additionally,
we plan to complete several human clinical studies aimed at comparing the ability of Nyloxin® Extra Strength to replace
prescription pain relievers. We have provided protocols to several hospitals and will provide details and timelines when those protocols
have been accepted. We cannot provide any timeline for these studies until adequate financing is available.
To
date, our marketing efforts have been limited due to lack of funding. As sales increase, we plan to begin marketing more aggressively
to increase the sales and awareness of our products.
Pet
Pain–Away™
During
June of 2013, we announced the launch of our new homeopathic formula for the treatment of chronic pain in companion animals, Pet Pain–Away™.
Pet Pain–Away™ is a homeopathic, non–narcotic, non–addictive, over–the–counter pain reliever, primarily
aimed at treating moderate to severe chronic pain in companion animals. It is specifically indicated to treat pain from hip dysplasia,
arthritis pain, joint pain, and general chronic pain in dogs and cats. The initial product run was completed in December of 2014 and
launched through Lumaxa Distributors on December 19, 2014.
In
May of 2016, we signed a license agreement to begin the process of creating an infomercial (Direct Response) campaign for Pet Pain–Away™.
In November of 2016, we announced the license agreement with DEG Productions for the marketing and distribution of Pet Pain–Away
globally. DEG has the ability to earn the exclusive distribution rights for the product by reaching certain sales milestones. DEG has
created their own website (www.getpetpainaway.com) and began airing commercials in December of 2016.
In
February of 2020, we took back the marketing of Pet Pain-Away and are currently selling the product on Amazon.com and through www.petpainaway.com
Luxury
Feet
In
June of 2017, we announced the creation of Luxury Feet; an over–the–counter pain reliever and anti–inflammatory
product that is designed for women who experience pain or discomfort due to high heels and stilettos. We announced the official marketing
launch of Luxury Feet in March of 2021. The product is currently available through www.luxuryfeet.com and on Amazon.
Equine
Pain-Away (Formerly Equine Nyloxin)
In
October of 2013, we announced that we were in the process of launching the newest addition to our line of homeopathic treatments for
chronic pain, Equine Nyloxin. We had been working with trainers and veterinarians in the equine industry and have already identified
distributors for the product. The Equine Nyloxin® represents the Company’s first topical solution for the animal market.
Equine Nyloxin was rebranded as Equine Pain-Away™ and officially rolled into the market in October of 2019. Equine Pain-Away is
being marketed through several retailers and online at www.EquinePainAway.com and on Amazon.
Regulation
The
active pharmaceutical ingredient (API) in our over the counter products, Asian cobra venom, has an approved United States monograph under
the Homeopathic Pharmacopoeia of the United States (HPUS), which allowed us to register them with the FDA as homeopathic drugs. A United
States monograph is a prescribed formulation for the production of any drug or product that is recognized by law for a specific application
and that may be introduced into commerce. The FDA requires this registration process to maintain full compliance of companies marketing
and selling medicines classified as homeopathic. In August 2009, we successfully completed submission of final packaging and labeling
to the FDA to begin selling our over-the-counter pain reliever, Cobroxin®. In December 2009, we completed our submission
of final packaging and labeling to the FDA of Nyloxin® and Nyloxin® Extra Strength. In December 2016 we
completed our submission of final packaging and labeling to the FDA of Pet Pain-Away.
On
March 11, 2019, the United States Food and Drug Administration (FDA) sent us a warning letter regarding the claims and marketing materials
of our Nyloxin line of products. On April 10, 2019 we responded to the warning letter; addressing their concerns and outlining the actions
that we have taken and will take to comply with their requests for changes. The response goes on to commit to the FDA that the company
will make the changes necessary to properly and legally continue to market and distribute our products.
Manufacturing
ReceptoPharm
oversees Nyloxin’s and Pet Pain-Away’s manufacturing activities, both at its Good Manufacturing Practice (“GMP”)
certified facility and at a third-party manufacturing and bottling facility. ReceptoPharm is also responsible for acquiring appropriate
amounts of Asian cobra venom required to manufacture Nyloxin® and Pet Pain-Away.
Subject
to availability of funds, ReceptoPharm also plans to begin additional clinical studies for our pain relievers. These studies will be
designed to compare the efficacy of Nyloxin® Extra Strength to other prescription strength pain relievers. A ReceptoPharm
study published in Toxicon, which is the journal of the International Society of Toxinology, showed that ReceptoPharm’s
leading drug product for the treatment of pain (RPI-78) had pain-reducing effects that lasted four times as long as morphine without
the negative side effects associated with opioid-based pain relievers. Another study published in the journal Neuropharmacology showed
a new mechanism on the use of Alpha-Cobratoxin as a treatment for pain. Alpha-Cobratoxin is the main component of the cobra venom used
in Nyloxin® and Pet Pain-Away.
The
FDA requires those companies manufacturing homeopathic medicines to have their facilities certified as GMP. As of October 2005, ReceptoPharm’s
manufacturing and laboratory facility has been fully compliant with its GMP certification. In March 2009, ReceptoPharm received an ISO
Class 5 certification for its clean room facility. An ISO Class 5 certification is a type of classification granted for a clean room
facility according to the number and size of particles permitted per volume of air. An ISO Class 5 clean room has at most, 3,500 particles
per square meter.
Manufacturing
Nyloxin® and Pet Pain-Away entails a two-step process, the first of which consists of ReceptoPharm manufacturing the bulk
raw materials and completing the dilution levels of the active pharmaceutical ingredient (“API”) as provided for in the Homeopathic
Pharmacopeia of the United States, which is a compilation of continuously updated statements of Homeopathic Pharmacopoeia standards and
monographs as recognized by that organization. Once this process is completed, the second step entails transport of raw materials to
a third-party manufacturer that completes the final mixing, bottling and shipping processes.
We
began limited manufacturing of Nyloxin® in November 2010. We scaled up manufacturing in the first quarter of 2011. Our
production level is contingent upon product demand level and we can scale up as sales demand increases. We began manufacturing Pet Pain-Away
in late 2014 and completed the first run of products for distribution on December 19, 2014. We are currently expanding production capacity
in our facility to allow spot production of our products and future private label brands.
In
March of 2022 we announced that we had expanded our manufacturing capabilities to include liquid filling, tube filling as well as capsule
production. We also announced that we had begun scaling up in-house production of dietary supplements for third-party marketers in acting
as a contract manufacturer; with our first contract naming Avini Health.
Marketing
and Distribution
In
August 2009, we completed an agreement with XenaCare granting them the exclusive license to market and distribute Cobroxin®
within the United States. To maintain this market exclusivity, XenaCare was required to meet certain minimum performance requirements.
On April 1, 2011, we notified our Cobroxin® Distributor, XenaCare Holdings that they were in breach of our agreement.
As a result of this, the distribution agreement was terminated effective April 10, 2011. XenaCare had a large stock of the product that
they had ordered from us and we have allowed them to continue to market their existing inventory of Cobroxin®. In October
2011 we discontinued their website at www.Cobroxin.com. All current traffic to that website is now redirected to www.Nyloxin.com. It
is our plan to eventually re-launch Cobroxin® with an eventual return to retail stores.
In
December of 2013, we announced an agreement with MyNyloxin.com for the exclusive rights to market and distribute Nyloxin®
in the Network Marketing channel. In November of 2014, MyNyloxin.com changed their name to Lumaxa. They provide a business opportunity
to their Distributors to earn commissions on the sale of our products through their Distributor groups. In January of 2014, we announced
the first product shipments to the MyNyloxin Independent Entrepreneurs (MIEs). Lumaxa conducts webinars, conference calls and live meetings
to support recruitment of new distributors as well as to provide product and business education.
In
May of 2016, we signed a license agreement to begin the process of creating an infomercial (Direct Response) campaign for Pet Pain-Away™.
In November of 2016, we announced the license agreement with DEG Productions for the marketing and distribution of Pet Pain-Away globally.
DEG has the ability to earn the exclusive distribution rights for the product by reaching certain sales milestones. DEG has created their
own website (www.getpetpainaway.com) and began airing commercials in December of 2016. In February of 2020, we took back the marketing
of Pet Pain-Away and are currently selling the product on Amazon.com and through www.petpainaway.com
In
late 2019 we created our own storefront on Amazon at www.Amazon.com/nyloxin. In August of 2020, we added Pet Pain-Away to the Amazon
site. In March of 2021, we added Luxury Feet and Equine Pain-Away to our Amazon storefront. In November of 2020, our Nyloxin line of
products was added to the Walmart Marketplace and sold online at www.Walmart.com. In March of 2022 we announced that Avini Health would
market our products on a non-exclusive basis while we will act as their contract manufacturer for the rest of their product line.
We
are continuing our efforts to find strategic partnerships for the promotion, marketing, registration, licensing and sales of our products
domestically and internationally.
Dependence
on one or a Few Major Customers
With
respect to Nyloxin®, Nyloxin® Extra Strength and Pet Pain-Away, we have been distributing the products
online and to various retailers. We are seeking both domestic and international distributors for these products. It may be that a larger
distributor may require exclusivity in the US or any particular foreign market. If so, we would be dependent on that distributor for
those Nyloxin® sales.
International
Drug Registrations
We
are continuing our efforts to complete the registration process internationally. On March 25, 2013 we announced the publication of our
patent and trademark for Nyloxin® in India. We are currently working with potential Distributors in India. In February,
2015 we completed the first test shipments to India through our importer, S.Zhaveri Pharmakem. We are actively seeking new distribution
partners in India. In April of 2015 we announced the engagement of the Vancouver Commodity Group to identify potential distribution partners
in China. Later that month, we announced the acceptance of Nyloxin® by the China International Exchange and Promotive
Association for Medical and Healthcare (CPAM). With this approval, we have been working with several groups to find a large distributor
for our products in the People’s Republic of China. On May 14, 2015 we announced that we had engaged the Nature’s Clinic
to begin the process of regulatory approval of our Company’s Over-the-Counter pain drug, Nyloxin® for marketing
and distribution in Canada. The Nature’s Clinic has already begun setting up their Chatham, Ontario warehouse. Due to lack of funding,
we have waited to complete the approval process to begin distributing Nyloxin® and expect to re-engage in the process
in 2021. On February 1, 2018 we announced a Distribution Agreement with the Australian company, Pharmachal PTY LTD to market and distribute
Nyloxin® in Australia and New Zealand. Pharmachal has begun the registration process with the TGA (Therapeutic Goods Administration).
We will continue to work with them through the registration process but have no current timetable for distribution in Australia.
While
many countries adopt similar regulation to the United States for registering homeopathic drugs, the international application process
is more complex and may be lengthier. We will continue to seek qualified, well-funded distributors for the international distribution
of Cobroxin®, Nyloxin® and Pet Pain-Away. At this time, we have no way of knowing when we may begin the
process of marketing and distributing our products internationally as we navigate the regulatory process and seek qualified distributors.
ReceptoPharm’s
Homeopathic Drug Pain Relief Studies
Pending
adequate financing or revenues, we will continue our research and development into this area, with the ultimate goal of improving product
claims for Nyloxin® Extra Strength, which is a treatment for stage 3 pain. We have planned the following three studies
and will pursue these pending adequate financing:
MS
Neuropathic Pain Phase IV
This
is a planned 10-week patient trial period. We have thus far incurred costs of $5,000 with a total estimated budget of $130,000. We plan
to reinitiate this trial pending adequate funding.
Chronic
Back Pain Phase I
We
will continue our research and development in this area, with the ultimate goal of completing development of our future product, Recet,
which is an injectable version of Cobratoxin. This is a planned 4-week patient trial period. We have thus far incurred costs of $25,000
in prior years with a total estimated budget of $250,000. We plan to reinitiate this trial pending adequate funding.
Chronic
Back Pain Phase IV
We
will continue our research and development, with this ultimate goal of improving product claims for Nyloxin® Extra Strength,
which is a treatment for stage 3 pain. This is a planned 4-week patient trial period. We have an estimated budget of $250,000. We have
not yet incurred any costs associated with the Chronic Back Pain Phase IV project. We plan to reinitiate this trial pending adequate
funding.
All
of these studies have been delayed due to our lack of revenues and funding. We will reassess our start and completion dates upon generating
a sufficient amount of revenues, if ever.
ReceptoPharm
– Research and Development
ReceptoPharm
was engaged in the research and development of novel anticholinergic therapeutic protein products for the treatment of autoimmune and
neurologic disorders, including Human Immunodeficiency Virus (HIV), Multiple Sclerosis (MS) Adrenomyeloneuropathy (AMN), Rheumatoid Arthritis
(RA) and pain.
Drug
Applications
We
have set forth below a summary of ReceptoPharm’s proposed drugs and their potential applications.
| Drug |
|
Potential
Applications |
| RPI-78M |
|
MS,
AMN, Rheumatoid Arthritis (RA), Myasthenia Gravis (MG) and Amyotrophic Lateral Sclerosis (ALS) |
| RPI-MN |
|
HIV,
Herpes, general anti-viral applications |
| RPI-78 |
|
Pain,
Arthritis |
| RPI-70 |
|
Pain |
We
believe that ReceptoPharm’s pharmaceutical products have a wide range of applications in a number of chronic, inherited and/or
life-threatening viral, autoimmune and neuromuscular degenerative diseases, even though none of these products have FDA or other approval
for the treatment of such diseases. These disorders target nerve cells, especially one specific type of cell receptor that is sensitive
to the neurotransmitter, acetylcholine, which plays an important role in the transmission of nerve impulses at synapses and myoneural
(muscle-nerve) junctions.
Primary
Disease Targets
Through
ReceptoPharm’s research program, our goal is to obtain required regulatory approvals of ReceptoPharm’s HIV, MS, and AMN products,
so that they can be marketed. In September of 2015 we were granted Orphan Designation by the US-FDA for the treatment of Pediatric Multiple
Sclerosis. The Orphan designation may greatly reduce the costs of clinical trials and shorten the timeline to potential drug approval.
ReceptoPharm secures confidentiality agreements prior to initiating contract research in order to protect any patentable opportunities.
Human
Immunodeficiency Virus (HIV) Infection
The
analytic firm ResearchAndMarketing.com reported in March 2021 that the HIV therapeutics market
was valued at $22.9B in 2019. The launch of long-acting injectable therapies and continued success of single-tablet regimens (STRs) will
drive growth in the market, which will expand at a Compound Annual Growth Rate (CAGR) of 2%. By 2029, sales of anti-HIV therapeutics
will reach $28B. According to UNAIDS, an estimated 38 million people were living with HIV in 2019. There were 1.7 million new
infections in 2019 and 690,000 people died of AIDS-related illnesses. Since the beginning of the epidemic, more than 75.7 million people
have contracted HIV and nearly 33 million have died of HIV-related causes. Experts say that the drugs currently available may extend
life as much as 40 years, but all of these therapies have negative side effects and fail over time as the virus mutates. These facts
make new therapies a necessity. The foregoing information was obtained from the World Health Organization website at www.who.int and
the UNAIDS website at www.unaids.org.
To
cause infection, HIV needs to gain entry into cells through the attachment to receptors on the cell membrane. These receptors are called
chemokine receptors. There are two principal types, CCR5 and CXCR4. Different HIV strains use one of these types. A single drug
that would block all of the chemokine receptors (“tropism-independent”) could be more useful, for several reasons, than a
mixture of molecules that would have to be used to do the same.
HIV
infection therapy currently uses antiviral drug therapies that are associated with the virus’s attachment, fusion with and entry
into the host cell. At the present time, there are over 40-licensed antiretroviral drugs employed to combat HIV-1 infection and two licensed
by the FDA that act as binding/entry inhibitory drugs.
New
drugs and adjunct therapies with novel mechanisms of action or unique resistance profiles are needed in the fight against HIV. Constant
innovation, in terms of efficacy, side effect profile and dosing are occurring. Current research and development for HIV is focused on
adjunctive therapy, which when combined with existing HAART (Highly Active Anti-Retroviral Therapy) regimens reduce side effects, enhance
the efficacy of existing treatments and delay the progression of the HIV virus.
Both
of ReceptoPharm’s drugs inhibited HIV replication in MAGI cells by 50-60% and peripheral mononuclear cells by 90% in testing conducted
by Dr. Juan Lama of the La Jolla Institute for Molecular Medicine in San Diego, California. Separate Phase I studies by Cure Aids Now
of Miami, Florida, were conducted by Dr. Jamal with orally and parentally administered RPI-78M in HIV patients confirmed safety, tolerability
and provided preliminary evidence of efficacy.
RPI-MN
demonstrated the ability to inhibit the replication of highly drug-resistant strains of HIV isolates. Drug resistance has become a critical
factor in long-term management of HIV infection with some viral strains developing resistance in as little as 3 weeks.
Multiple
Sclerosis (MS)
Multiple
Sclerosis (MS) is thought to be an autoimmune disease that primarily causes central nervous system problems. In MS, the insulating fatty
material surrounding the nerve fibers, also known as myelin, which functions to speed signaling from one end of the nerve cell to the
other, is attacked by cells of the immune system causing problems in signal transduction. MS is the most common of demyelinating disorders,
having a prevalence of approximately 1 per 1,000 persons in most of the United States and Europe. According to the Accelerated Cure Project
for Multiple Sclerosis, a national nonprofit organization, 400,000 people in the US are affected by MS and another 2.1 million globally,
with 10,000 new cases diagnosed in the US every year. According to the National Multiple Sclerosis Society, although MS occurs most commonly
in adults, it is also diagnosed in children and adolescents. Estimates suggest that 8,000-10,000 children (up to 18 years old) in the
United States have MS, and another 10,000-15,000 have experienced at least one symptom suggestive of MS. Studies suggest that two to
five percent of all people with MS have a history of symptom onset before age 18.
People
with MS may experience diverse signs and symptoms. MS symptoms may include pain, fatigue, cognitive impairment, tremors, loss of coordination
and muscle control, loss of touch sensation, slurred speech and vision impairment. The course of the disease is unpredictable and for
most MS patients, the disease initially manifests a “relapsing-remitting” pattern. Periods of apparent stability are punctuated
by acute exacerbations that are sudden unpredictable episodes that might involve impaired vision, diminished ability to control a limb,
loss of bladder control, or a great variety of other possible neurologic deficits. In relapsing-remitting MS, some or all of the lost
function returns, however, the patient sustains an unceasing, often insidious, accumulation of neuronal damage. As the burden of neural
damage grows, new lesions are more likely to produce irreversible impairment of function. Typically, about eight to fifteen years after
onset, MS patients enter the secondary-progressive phase. Eventually, progressive MS sufferers become wheelchair-bound, and may become
blind and even incapable of speech. There is currently no FDA approved drug that reverses the course of the progressive form of MS.
RPI-78M
has shown efficacy in animal models (EAE) for MS and ReceptoPharm is planning new animal studies to gain more insight into the levels
of protection that the drugs afford. In one study conducted in August 2007, all members of an untreated animal control group developed
signs of disease with different levels of paralysis/muscle weakness. A similar group in the August 2007 study treated with RPI-78M showed
no disease in 90% of the animals in both acute and chronic applications of the test. Moreover, there were no toxicities reported though
the animals which received doses the equivalent of 280 times a human dose.
Furthermore,
we believe that the ability to modulate the host immunostimulatory environment could form the basis of an effective strategy for the
long-term control of autoimmunity in diseases like MS and Myasthenia gravis (MG) and is being studied as a therapeutic model for other
neuromuscular diseases. Also, we believe our data suggest that it is possible that our novel therapeutic proteins could have a general
application in autoimmune diseases based on human studies in Rheumatoid Arthritis and anecdotal reports from patients with Multiple Sclerosis.
In
August of 1984, Biogenix applied for and received an Intrastate Investigational Drug (FSDHRS Protocol RA-1 (002)) from the Department
of Health and Rehabilitation (HRS) in Florida that permitted the 4-week study of RPI-MN in 13 patients with Rheumatoid arthritis ranging
in age from 49 to 81. Patients were enrolled for a period of 4 weeks; the results showed 30% to 49% improvement in range of joint motion,
early morning stiffness and stamina (this data, along with other supporting intellectual property was acquired by ReceptoPharm from Biogenix).
We believe that the data obtained from the examination of clinical efficacy in these three diseases can augment information from prior
clinical studies and lead to the future investigation of treatments for other chronic conditions.
Adrenomyeloneuropathy
(AMN), Pediatric MS and other Orphan Indications
Adrenoleukodystrophy,
or ALD, is a genetically determined neurological disorder that, according to the Adrenoleukodystrophy Foundation, affects 1 in every
17,900 boys worldwide. The presentation of symptoms occurs between the ages of 4 and 10, and affects the brain with demyelination, which
is the stripping away of the fatty coating that keeps nerve pulses confined and maintains the integrity of nerve signals. This process
inhibits the nerves’ ability to conduct properly, which causes neurological deficits, including visual disturbances, auditory discrimination,
impaired coordination, dementia and seizures. Demyelination is an inflammatory response and nerve cells throughout the brain are destroyed.
Adrenomyeloneuropathy
(AMN) is the most common form of X-ALD, a maternally inherited type of ALD. AMN affects about 40-45% of X-ALD patients and usually presents
itself in adolescence or adult life and may be preceded by hypoadrenalism. It is characterized by spastic paraplegia and a peripheral
neuropathy, often being diagnosed as Multiple Sclerosis (MS). Nerve conduction studies in AMN show a predominant axonal neuropathy and
show a loss of all axons. Lorenzo’s oil, a mixture of glyceryltrioleate and glyceryltrierucate, has been used for over a decade
in an open, unblinded fashion with mixed results.
RPI-78M
has been utilized in two clinical studies, which were completed at the Charles Dent Metabolic Unit located in London, England. The last
trial was classified as a Phase IIb/IIIa study. These studies provided important safety data, showing RPI-78M to be well tolerated by
the patients. Further study is warranted to provide data on the potential efficacy of RPI-78M to treat the symptoms of AMN.
In
September of 2015, we were granted Orphan Designation by the US-FDA for the treatment of Pediatric Multiple Sclerosis. We are currently
working with potential sites of care to conduct a Phase I/II in Pediatric MS. The designation of RPI-78M as an Orphan Drug provides Nutra
Pharma with a 7-year period of market exclusivity in the U.S. once the drug is approved. Additional benefits over conventional drug applications
include: tax credits for clinical research costs, the ability to apply for grant funding, clinical trial design assistance, plus assistance
from the FDA in the drug development process and the waiver of Prescription Drug User Fee Act (PDUFA) filing fees which could be in excess
of $2.5 million. The granting of Orphan Drug Designation allows the Company to move forward with their preparation of an Investigative
New Drug Application and proposal of clinical trials. The FDA grants Orphan Drug Designation status to products that treat rare diseases,
providing incentives to sponsors developing drugs or biologics. According to the FDA, the Orphan Drug program has successfully enabled
the development and marketing of more than 400 drugs and biologic products for rare diseases since 1983. Evaluate Ltd., in its 2020 EvaluatePharma
Orphan Drug Report, estimated that orphan drug sales will constitute more than 18% of the total share of prescription drug sales by 2024,
totaling $217bn.
In
December of 2015, we announced that we had applied for an Orphan Drug designation from the US-FDA for the Company’s RPI-78M drug
candidate for the treatment of Myasthenia Gravis (MG). The application was subsequently rejected with an offer to re-file in the future
as more data becomes available.
Pain
and Arthritis
Protein
or peptide-based drugs are penetrating the pain market with neurotoxins taking the lead. Botox (Allergan) and Prialt (Elan) have the
potential to substitute over the long-term for morphine and other opiates in chronic pain indications. Opiates, though potent painkillers,
suffer from drawbacks because they are addictive, short acting, and drug-resistance inducing. We plan to assess the effects of several
peptides in animal models of pain in association with Soochow University in China. Several peptides have demonstrated positive effects
and the research and development continues.
August
2007 studies at Soochow University proved the potential of ReceptoPharm’s drug candidates, RPI-78 and RPI-70. When compared to
Dolantin, an opiate-based drug subordinate to morphine, the effects were very encouraging. While Dolantin provided immediate pain relief
it began wearing off just as RPI-70 began to take effect. The effects of RPI-70 do not seem dramatic in contrast to Dolantin, considering
the quantity of drug employed in this animal model. The concentration of RPI-70 was approximately 100 times less than the opiate product.
Also, RPI-70 showed real potential for combining with other pain killing medications. RPI-78 was calculated to be 150,000 times more
potent than aspirin. This product can be injected systemically providing evidence of a more practical application than Prialt, which
must be administered intrathecally (into the spinal cord). Opiate drugs induce tolerance and dependence. This problem is not encountered
with RPI-70 and RPI-78.
In
February 2009, ReceptoPharm filed a patent application with the United States Patent and Trademark Office for the use of RPI-78 as a
novel method for treating arthritis in humans. Also in February 2009, ReceptoPharm, in collaboration with Soochow University in China
published positive data from its recent animal studies on the use of RPI-78 (Cobratoxin) as a method for treating arthritis. In March
of 2011, ReceptoPharm was issued a patent for the use of cobratoxin as an analgesic (US patent #7,902,152). In February of 2012, ReceptoPharm,
in collaboration with Soochow University published another study that demonstrated a novel mechanism of action for the use of RPI-78
as a treatment for pain.
Nerve
Agent Countermeasures
In
February of 2018, we announced that we had filed a new provisional patent to protect our intellectual property surrounding the development
of nerve agent counter measures. In much the same way that our therapies protect the nerves of patients with disease, our findings indicate
that we may protect against – or at least mitigate the damage caused by - nerve agents that are utilized as chemical weapons; such
as sarin gas and VX. We will be working with experts in the field to have our products in testing shortly.
Nerve
agents are identified as a class of phosphorus-containing organic chemicals (organophosphates) that may disrupt the transfer of messages
to organs through the nerves. This disruption is caused by the over-stimulation of certain receptors on the surface of the neurons. These
same receptors are the target of Nutra Pharma’s drugs, which may block the action of the nerve agents or minimize the damage that
they may cause.
The
company has very encouraging preclinical data, a demonstrated molecular mechanism of action and a robust scientific rational for the
continued commercial development of its nerve agent counter measure. Organophosphate nerve agents such as VX and Sarin remain a troubling
threat to American service people and civilians as evidenced by the recent attacks in Syria, Malaysia and London. Supply chain issues
with existing counter measures and the safety and effectiveness of these drugs is a great concern. Based on our pre-clinical studies
and experience in neurobiology products, we believe that we have a superior product ready for testing in the near term.
On
September 22, 2020, Dr. Dale VanderPutten, our Chief Scientific Officer was invited by the Defense Threat Reduction Agency (DTRA) to
present our nerve agent countermeasure technology in a Tech Watch talk to an audience of military and civilian experts in chem/bio defense.
The talk titled “A Nicotinic Acetylcholine Receptor (nAChR) Directed Organophosphate Countermeasure” was presented in a virtual
internet meeting to a select expert audience invited by DTRA. The consensus of the comments and questions on the presentation supported
the idea that despite past efforts, there remains an unmet need for nAChR directed defenses and that our demonstration of human safety
in the clinic and pre-clinical proof of concept deserves aggressive follow up.
According
to a BBC report, chemical weapons remain a real threat to the West. In the nine-year period since
the beginning of the Syrian conflict there have been over a thousand documented uses of chemical weapons; making this issue a major topic
of concern in the US department of Defense and the United Nations. We will continue working with the Department of Defense and DTRA on
potential funding for these applications.
Market
Values
Human
Immunodeficiency Virus (HIV)
The
analytic firm ResearchAndMarketing.com reported in March 2021 that the HIV therapeutics market
was valued at $22.9B in 2019. The launch of long-acting injectable therapies and continued success of single-tablet regimens (STRs) will
drive growth in the market, which will expand at a Compound Annual Growth Rate (CAGR) of 2%. By 2029, sales of anti-HIV therapeutics
will reach $28B. According to UNAIDS, an estimated 38 million people were living with HIV in 2019. There were 1.7 million new
infections in 2019 and 690,000 people died of AIDS-related illnesses. Since the beginning of the epidemic, more than 75.7 million people
have contracted HIV and nearly 33 million have died of HIV-related causes. Experts say that the drugs currently available may extend
life as much as 40 years, but all of these therapies have negative side effects and fail over time as the virus mutates. These facts
make new therapies a necessity. The foregoing information was obtained from the World Health Organization website at www.who.int and
the UNAIDS website at www.unaids.org.
Multiple
Sclerosis (MS)
MS
affects an estimated 2.5 million people globally with approximately 400,000 sufferers in the United States. There are 12 approved drugs
for the treatment of this disease. According to an April 2015 article published in the journal Neurology, the average annual cost
of these drugs has increased to over $60,000 per person. In 2013, sales by one manufacturer, Teva, were reported to be $4.328 billion
for its drug, Copaxone. Biogen has the largest market share in the MS drug category; bringing in $8 billion from the sales of Avonex,
Tysabri and Tecfidera. The global multiple sclerosis therapeutics market is expected to reach USD 24.8 billion by 2024 according to a
May, 2016 report by Grand View Research, Inc.
Adrenomyeloneuropathy
(AMN)
AMN/ALD
affects an estimated 30,000 people in the US with some estimates exceeding this number.
Pediatric
Multiple Sclerosis (pediatric-MS)
According
to the National Multiple Sclerosis Society, although MS occurs most commonly in adults, it is also diagnosed in children and adolescents.
Estimates suggest that 8,000-10,000 children (up to 18 years old) in the United States have MS, and another 10,000-15,000 have experienced
at least one symptom suggestive of MS. Studies suggest that two to five percent of all people with MS have a history of symptom onset
before age 18.
Myasthenia
Gravis (MG)
According
to the Myasthenia Gravis Foundation of America, the prevalence of MG in the United States is estimated to be about 64,000 patients. However,
MG is probably under diagnosed and the prevalence may be higher.
Current
Technologies
ReceptoPharm,
operating in its capacity as a clinical stage biotechnology company, created a process that safely modifies proteins derived from cobra
venom. ReceptoPharm also has rights to a drug delivery method that uses an aerosol formulation, which is administered under the tongue.
By using this shared aerosol delivery technology, oral delivery is attainable, an important step for a biologic product. The system is
50% efficient and affects drug delivery in approximately 40% of patients in which it was tested. Topical preparations are being examined
for future applications in treatment of such conditions as pain and Rheumatoid Arthritis (RA).
Business
Strategy
Pending
adequate financing or revenues, ReceptoPharm seeks to develop proprietary pharmaceutical products for human illnesses that qualify for
“Fast-Track” or “Orphan Drug” status under FDA regulations, which can expedite regulatory review. For some conditions,
the FDA has created the “two animal rule” which permits ReceptoPharm to collect data from ongoing animal research for human
treatment applications.
We
believe the results from ReceptoPharm’s research will assist in getting its applications processed through the FDA’s “Fast-Track”
approval process and enable ReceptoPharm to plan the commercialization of each product independently and/or through joint ventures, partnerships
and licensing arrangements. “Fast-Track” denotes life-threatening illnesses, while “Orphan” status refers to
serious ailments affecting less than 200,000 individuals nationwide. AMN qualifies under both labels because it is considered an orphan
disease and has no known cure. Pediatric MS and Myasthenia Gravis are also considered “Orphan” diseases because of the disease
prevalence as well as the lack of effective therapies.
In
the areas of HIV and MS, ReceptoPharm plans to conduct clinical studies of its HIV and MS drugs under development. These “Phase
II” studies will either prove or disprove the preliminary efficacy of ReceptoPharm’s HIV and MS drugs under development.
ReceptoPharm is in the process of attempting to secure agreements with third parties to conduct such clinical studies.
We
believe that ReceptoPharm’s proposed unique pharmaceutical products can be used alone or licensed for use in combination with other
therapeutic products and may be of interest to other established pharmaceutical companies as a means of extending the patent life of
their proprietary products.
Short-term
Goal
Although
we focused our drug development efforts from 2006 to 2008 on clinical trials for ReceptoPharm’s HIV drug, RPI-MN, our primary focus
now is on RPI-78M for the treatment of MS and MG. With the recent Orphan designation for Pediatric MS, we expect to move into Phase I/II
clinical studies by the end of 2021.
Mid-term
Goal
Our
midterm strategy is to license ReceptoPharm’s AMN, MS and HIV technologies in our attempt to bring these technologies to market
within 5 years, should we obtain adequate financing.
Long-Term
Goal
Our
long-term goal is the use of drugs developed by ReceptoPharm in the field of neurological diseases, infectious diseases and autoimmune
disorders. Due to our limited financial and operational resources, this goal will require us to establish strategic partners or alliances
with pharmaceutical companies, academic institutions, biotechnology companies, and clinical diagnostic laboratories, which will: (a)
complement ReceptoPharm’s research and development efforts; (b) reduce the risks associated with undertaking the entire process
of drug development and marketing; and (c) generate licensing based revenue streams. Additionally, we plan to continue identifying intellectual
property and companies in the biotechnology arena as potential acquisition candidates.
Compassionate
Release Programs
Certain
countries, such as Canada and the United Kingdom, permit their citizens to have access to investigational medications without being approved
for any applications by their respective “FDA type” agencies, and permit physicians to prescribe drugs they believe are of
possible benefits to the patients. Through these “Compassionate Release Programs”, ReceptoPharm has supplied RPI-78M, its
drug under investigation for MS and AMN, to physicians in the United Kingdom. The FDA does not offer this program.
Clinical
Trial Applications
ReceptoPharm
has developed Common Technical Documents (CTD) for both RPI-78M and RPI-MN that are used to support any clinical trial application. The
CTD is a complete history of the individual drug, including all of the in-vitro and in-vivo work accomplished to date, as well as pre-clinical
development work on the drug. Having these completed documents allows for expedited due diligence from regulatory bodies reviewing ReceptoPharm’s
applications for trials and approvals. With these documents, ReceptoPharm has successfully applied for approval to conduct a clinical
investigation in the United Kingdom under the regulation of the Medicines Health and Regulatory Agency (MHRA), which is the British equivalent
of the US-FDA.
Current
Research and Development Projects
Neurological
Studies
Pain
Studies
In
an effort to further support Nyloxin® Extra Strength, ReceptoPharm had planned to complete two human clinical studies
aimed at comparing the ability of Nyloxin® Extra Strength to replace prescription pain relievers. ReceptoPharm originally
estimated that these studies would begin during the second quarter of 2010; however, these studies have been delayed because of lack
of funding. We have no way of knowing at this time, if or when we will have adequate funding to reinitiate these trials.
AMN
Phase II
ReceptoPharm
has been conducting research and development in this area since February 2006 with an original expected completion date of September
2010, which includes a 12-month patient trial period that has already been completed. We have thus far expended approximately $400,000,
because ReceptoPharm has completed its AMN Phase II project, there is no further budget for this project.
AMN
Phase III
ReceptoPharm
had planned to continue research and development, with the ultimate goal of completing development of its future drug, RPI-78M. ReceptoPharm’s
originally estimated start and completion dates are July 2010 and December 2011, respectively, which includes a 12-month patient trial
period. ReceptoPharm has thus far incurred costs of $5,000. ReceptoPharm has an estimated budget of $500,000. We have no way of knowing
at this time, if or when we will have adequate funding to reinitiate these trials.
MS
Phase II (Pediatric MS Phase I/II)
We
are working with our Chief Scientific Officer, Dale Vanderputten, PhD; along with consultants to begin our Phase I/Phase II studies in
pediatric Multiple Sclerosis. Pending adequate financing or revenues, ReceptoPharm will continue its research and development, with the
ultimate goal of commencing these trials with RPI-78M under its Orphan Designation. ReceptoPharm has thus far incurred costs of $40,000.
ReceptoPharm has an estimated budget of $2,000,000. Our goal is to initiate these trials in 2022.
Currently,
ReceptoPharm’s total estimated costs for all of the above projects are approximately $3,000,000.
Since
receiving Orphan designation for the treatment of Pediatric MS, our plans have changed. We are now working with potential sites of care
to initiate a Phase I/II clinical trial in Pediatric MS. Our next step is to have a pre-IND meeting with the FDA to go over the proposed
trial protocols. It is our goal to begin these trials in 2022.
Dependence
on one or a Few Major Customers
We
have no customers with respect to our research and development projects since we have not received FDA approval for our drug candidates
and have not licensed any of our technologies.
Marketing
We
currently do not have a marketing program for our drug candidates because none of ReceptoPharm’s products have received FDA approval.
Our lack of financing has hampered our efforts to navigate the regulatory process in a timely fashion; however, if and when we have FDA-approved
drug treatments, we plan to develop a marketing strategy to market ReceptoPharm’s products through pharmaceutical companies, other
biotechnology companies, and diagnostic laboratories. Our Chief Executive Officer will market the treatments to licensing and development
officers of those companies and will otherwise direct our marketing program. Additionally, we will attempt to secure consulting agreements
with marketing consultants who will actively market our products to such companies and/or provide our Chief Executive Officer with marketing
guidance.
Potential
Revenue Segments
Our
potential revenue segments are composed of our attempt to generate revenues from license agreements, joint ventures in foreign countries
and drug sales.
To
date, we have not earned any revenues regarding any FDA drug candidate.
Product
Liability
We
maintain product liability insurance for our commercial products. Even so, product liability claims may result in significant legal costs
related to our defense of such actions if damage amounts exceed our product liability insurance coverage. The design, development, and
manufacture of drug products or diagnostic tests involves an inherent risk of product liability claims and corresponding damage to our
brand name reputation, including claims of product failure or harm caused by the drug product.
Sources
and Availability of Raw Materials
ReceptoPharm
uses the raw material, cobra venom, for the drugs that it studies and in the production of all of our over-the-counter products. We currently
have two US suppliers of cobra venom that we use according to product demand. In addition, there are other suppliers in China, Thailand
and India. ReceptoPharm’s management is responsible for locating cobra venom suppliers on an as-needed basis, which involves obtaining
a small test amount from a supplier for scientific validation of that raw material prior to purchase. Apart from cobra venom, we do not
currently use raw materials in our business.
Compliance
with Government Regulations and Need for Government Approval
The
production and marketing of potential drug products as well as research and development activities generally are subject to regulation
by numerous governmental authorities in the United States and other countries. In the United States, vaccines, drugs and certain diagnostic
products are subject to FDA review of safety and efficacy. The Federal Food, Drug and Cosmetic Act, the Public Health Service Act and
other federal statutes and regulations govern or influence the testing, manufacture, safety, labeling, storage, record keeping, approval,
advertising and promotion of such products. Noncompliance with applicable requirements can result in criminal prosecution and fines,
recall or seizure of products, total or partial suspension of production, or refusal of the government to approve Biological License
Applications (“BLAs”), Product License Applications (“PLAs”), New Drug Applications (“NDAs”) or refusal
to allow a company to enter into supply contracts. The FDA also has the authority to revoke product licenses and establishment licenses
previously granted.
In
order to obtain FDA approval to market a new biological or pharmaceutical product, proof of product safety, purity, potency and efficacy,
and reliable manufacturing capability must be submitted. This requires companies to conduct extensive laboratory, pre-clinical and clinical
tests. This testing, as well as preparation and processing of necessary applications, is expensive, time-consuming and often takes several
years to complete. There is no assurance that the FDA will act favorably in making such reviews. Our potential partners, or we, may encounter
significant difficulties or costs in their efforts to obtain FDA approvals, which could delay or preclude from marketing any products
that may be developed. The FDA may also require post-marketing testing and surveillance to monitor the effects of marketed products or
place conditions on any approvals that could restrict the commercial applications of such products. Product approvals may be withdrawn
if problems occur following initial marketing, such as, compliance with regulatory standards is not maintained. Delays imposed by governmental
marketing approval processes may materially reduce the period during which a company will have the exclusive right to exploit patented
products or technologies. Refusals or delays in the regulatory process in one country may make it more difficult and time consuming to
obtain marketing approvals in other countries.
The
FDA approval process for a new biological or pharmaceutical drug involves completion of preclinical studies and the submission of the
results of these studies to the FDA in an Initial New Drug application, which must be approved before human clinical trials may be conducted.
The results of preclinical and clinical studies on biological or pharmaceutical drugs are submitted to the FDA in the form of a BLA,
PLA or NDA for product approval to commence commercial sales. In responding to a BLA, PLA or NDA, the FDA may require additional testing
or information, or may deny the application. In addition to obtaining FDA approval for each biological or chemical product, an Establishment
License Application (“ELA”) must be filed and the FDA must inspect and license the manufacturing facilities for each product.
Product sales may commence only when both BLA/ PLA/ NDA and ELA are approved. In certain instances in which a treatment for a rare disease
or condition is concerned, the manufacturer may request the FDA to grant the drug product Orphan Drug status for a particular use. “Orphan
Drug” status refers to serious ailments affecting less than 250,000 individuals. In this event, the developer of the drug may request
grants from the government to defray the costs of certain expenses related to the clinical testing of such drug and be entitled to marketing
exclusivity and certain tax credits.
In
order to gain broad acceptance in the marketplace of a medical device, our partners or we will need to receive approval from the FDA
and other equivalent regulatory bodies outside of the United States. This approval will be based upon clinical testing programs at major
medical centers. Data obtained from these institutions will enable us, or our partners, to apply to the FDA for acceptance of its technology
as a “device” through a 510(k) application or exemption process. Once the data have been fully gleaned, it is expected that
this process would take ninety days.
According
to the FDA, a “device” is: “an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or
other similar or related article, including a component part, or accessory which is recognized in the official National Formulary, or
the United States Pharmacopoeia, or any supplement to them, intended for use in the diagnosis of disease or other conditions, or in the
cure, mitigation, treatment, or prevention of disease, in man or other animals, or intended to affect the structure or any function of
the body of man or other animals, and which does not achieve any of its primary intended purposes through chemical action within or on
the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its primary intended
purposes.”
The
FDA classifies devices as either Class I/II-exempt, Class II, or Class III.
Class
III: Pre-Marketing Approval, or PMA: A Pre-Marketing Approval or PMA is the most stringent type of device marketing application required
by FDA. A PMA is an application submitted to FDA to request clearance to market, or to continue marketing of a Class III medical device.
A PMA is usually required for products with which FDA has little previous experience and in such cases where the safety and efficacy
must be fully demonstrated on the product. The level of documentation is more extensive than for a 510(k) application and the review
timeline is usually longer. Under this level of FDA approval, the manufacturing facility will be inspected as well as the clinical sites
where the clinical trials are being or have been conducted. All the appropriate documents have to be compiled and available on demand
by the FDA. The manufacturing facility is registered with the FDA and the product or device is registered with the FDA.
Class
II: 510(k). This is one level down from the PMA and it is applied to devices with which the FDA has had previous experience. A 510(k)
is a pre-marketing submission made to FDA to demonstrate that the device to be marketed is as safe and effective, that is, substantially
equivalent, to a legally marketed device that is not subject to pre-market approval. Applicants must compare their 510(k) device to one
or more similar devices currently on the U.S. market and make and support their substantial equivalency claims. The legally marketed
device to which equivalence is drawn is known as the “predicate” device. Applicants must submit descriptive data and, when
necessary, performance data to establish that their device is SE to a predicate device. Again, the data in a 510(k) is to show comparability,
that is, substantial equivalency (SE) of a new device to a predicate device. Under this level of approval, the manufacturing facility
is registered with the FDA and the product or device is registered with the FDA. Inspections under this classification are possible.
All the appropriate cGMP and clinical data backing the claims made must be on file and available on demand by the FDA.
Class
I/II Exemption: This is the lowest level of scrutiny. Most Class I devices and a few Class II devices are exempt from the pre-marketing
notification requirements subject to the limitations on exemptions. However, these devices are not exempt from other general controls.
All medical devices must be manufactured under a quality assurance program, be suitable for the intended use, be adequately packaged
and properly labeled, and have establishment registration and device listing forms on file with the FDA. However, as described above,
all the appropriate documentation including cGMP and clinical data supporting the claims being made has to be on hand and available on
demand by the FDA. The data must be available to support all the product claims.
Sales
of biological and pharmaceutical products and medical devices outside the United States are subject to foreign regulatory requirements
that vary widely from country to country. Whether or not FDA approval has been obtained, approval of a product or a device by a comparable
regulatory authority of a foreign country must generally be obtained prior to the commencement of marketing in that country.
Effect
of Compliance with Federal, State, and Local Provisions for the Protection of the Environment
We
have no present or anticipated direct future costs associated with environmental compliance, since we are not and will not be directly
involved in manufacturing drug products as result of our research and development; however, we may be affected in the percentage licensing
fees we receive, since a company may consider the environmental expense as an offset to a determination of the percentage amount we receive.
ReceptoPharm produces a drug that has limited waste issues and related costs, but handles environmentally related matters through the
FDA’s Good Manufacturing Practices, the FDA mandated guidelines pertaining to the production of drugs in the United States.
Ability
to Compete
The
biotechnology research and development field is extremely competitive and is characterized by rapid change. Our competitors have substantially
greater financial, scientific, and human resources, and as a result greater research and product development capabilities. Our competitors
have competitive advantages with greater potential to develop revenue streams. Our competitors are located in the United States as well
as around the world. We will attempt to compete by establishing strategic partners or alliances with pharmaceutical companies, academic
institutions, biotechnology companies, and clinical diagnostic laboratories, which will enter into joint ventures, emphasizing that the
drugs RPI-MN and RPI-78M possess the following properties:
| |
● |
They
lack measurable toxicity but are still capable of attaching to and affecting the target site on the nerve cells. This means that
patients cannot overdose. |
| |
● |
They
display no significant adverse side effects following years of investigations in humans and animals. |
| |
● |
The
products are stable and resistant to heat, which gives the drug a long shelf life. The drugs’ stability has been determined
to be over 4 years at room temperature. |
RPI-78M
can be administered orally; however, ReceptoPharm has not yet developed an orally administered RPI-78M. RPI-78M has been routinely delivered
by injection in a manner similar to insulin, but research over the past two years has given rise to administration by mouth. Oral delivery
presents patients with additional “quality of life” benefits by eliminating or decreasing the requirements for routine injections.
Should we receive adequate funding, ReceptoPharm plans to develop an orally administered RPI-78M by initiating new trials with an oral
version of that drug.
Main
Competitors (Biologics)
Competition
is intense among companies that develop and market products based on advanced cellular and molecular biology. ReceptoPharm’s competitors,
including Amgen, Sanofi-Aventis, Biogen-Idec, Cephalon, Genetech, Genzyme, Novartis, Regeneron and Bayer, which have far superior financial,
technological and operational resources. We face significant competition from these and other biotechnology and pharmaceutical firms
in the United States, Europe and elsewhere. Certain specialized biotechnology firms have also entered into cooperative arrangements with
major companies for development and commercialization of products, creating an additional source of competition.
Any
products or technologies that successfully address viral or neurological indications could negatively impact the market potential for
RPI-78M or RPI-MN. These include products that could receive approval for indications similar to those for which RPI-78M or RPI-MN seeks
approval, development of biologic or pharmaceutical treatments that are more effective than existing treatments and the development of
other modalities with reduced toxicity and side effects.
Interferon-based
drugs and their indications represent target markets for ReceptoPharm. Sales of interferon-based drugs annually exceed $8 billion and
have attracted the participation of several major drug companies, including Bayer and Roche. Currently, there are eight interferon-based
drugs licensed in Canada and the U.S.; five for the treatment of the milder Relapsing-Remitting form of MS, one for Hepatitis C, one
for granulomatous disease and one for genital warts. These interferons are also used in the treatment of other conditions where treatment
options are limited. The interferons for MS are Betaseron (Bayer), Avonex (Biogen), Plegridy (Biogen), Extavia (Novartis) and Rebif (EMD
Serono). Since the launch of these drugs, the number of patients undergoing treatment has stabilized at current levels, indicating that
there is a high turnover rate of patients in the administration of these individual drugs due to cost and side effects. Biogen developed
Avonex in the early 1990’s and has been shipping the drug since late 1996. In the United Kingdom, the National Institute for Clinical
Efficiency (NICE) has called for the withdrawal of Betaseron and another unrelated drug, Copaxone (Teva), from the market based on poor
cost/effectiveness.
Gilead
Sciences markets Harvoni as a ‘cure’ for Hepatitis C. It combines two drugs: Sovaldi (sofosbuvir) and ledipasvir. Harvoni
is taking over the market as Gilead has turned Hepatitis C into a curable illness and has generated over $25B in sales.
Main
Competitors (Venom-Based Drugs)
We
view our main competitors as those who also engage in the development of protein-based neurotoxins as therapeutics. Employing venoms
as therapeutics is not new. A large number of well-known pharmaceutical companies are developing novel therapies derived from
snake venoms and other reptiles. Most of those using snake venoms employ the anticoagulant enzymes usually from viperids (adders and
rattlesnakes) though elapids (cobra family) are also being investigated.
We
have set forth below a summary of venom-based drugs and their potential applications.
| Company |
|
Drug |
|
Application |
| Pentapharm |
|
Batroxobin |
|
Anticoagulant
from Lancehead viper |
| Knoll
Pharmaceutical |
|
Ancrod |
|
Anticoagulant
from rattlesnakes |
| Bristol-Myers
Squibb |
|
Capoten |
|
Antihypertensive
from Brazilian Pit Viper |
| Medicure |
|
Aggrastat |
|
Antiplatelet
drug from vipers |
| Millennium
Pharmaceutical |
|
Integrilin |
|
Antiplatelet
drug from rattlesnakes |
| Amylin
Pharmaceuticals |
|
Byetta |
|
Treatment
for type 2 diabetes and obesity from Gila Monster |
| Elan
Pharmaceuticals |
|
Prialt |
|
Intrathecal
drug from cone snails for intractable pain |
Current
cobra venom-based therapies include Keluoqu, a pain-killing drug on the market in China since 1978. Keluoque contains cobrotoxin as its
primary ingredient and is used to control severe pain in advanced cancer patients and for post-operative pain.
Bio-Therapeutics,
Inc.
On
October 3, 2003, we entered into a non-assignable license agreement between Bio-Therapeutics, Inc. (“ Bio-Therapeutics”)
and us, which was then amended to make the license agreement assignable. This agreement was in settlement of a lawsuit that we filed
against Bio-Therapeutics alleging that Bio-Therapeutics owed us $850,000 in connection with a merger agreement between Bio-Therapeutics
and us that was cancelled.
The
2003 license agreement provides that for a non-exclusive license to certain intellectual property of Bio-Therapeutics, which consists
of the following two distinct technology platforms:
| |
● |
Alteration
of Proteins and Peptides - These include patented methods for altering the 3-Dimensional structure of certain proteins and peptides.
The natural peptides bind to receptors in the body with toxic effects. This technology allows us to alter the structure of these
peptides, preserving their receptor-binding characteristics, while making them non-toxic and therapeutic. Different receptors have
various functions in many disease states. By the peptides binding to these receptors in a controlled fashion, certain disease symptoms
may be treated. In connection with MS, binding to the acetylcholine receptor on the nerves allows for more efficient nerve conduction.
With HIV, binding to chemokine receptors may prevent the virus from entering and infecting new cells. |
| |
|
|
| |
● |
Non-
Exclusive License for “Buccal Delivery System” (“Buccal”) – An innovative aerosolized drug delivery
system that is patent pending. Many therapeutic agents cannot be effectively delivered by aerosol formulation due to their large
size and/or irregular shapes. Since these therapeutic agents cannot be ingested orally without being degraded by the digestive system,
patients have no alternative but to directly inject these drugs. We have a non-exclusive license to the Buccal patent pending proprietary
aerosol formulation, which greatly enhances the permeability of the mucous membranes found on the roof of the mouth and the back
of the throat. This allows for the easy and efficient systemic delivery into the bloodstream of a much wider variety of proteins
and peptides. This non-exclusive license for “Buccal Delivery System” and patent pending application includes claims
that identify the active mucosal enhancer, its combination with therapeutic agents and the mode of delivery through aerosol. This
may allow for the effective and pain-free delivery of peptide and protein therapeutics for the treatment of HIV and MS. |
Patents,
Trademarks, Licenses and Intellectual Property
In
July of 2021, we announced that we had filed a new provisional patent to protect our intellectual
property surrounding our development of nerve agent counter measures. We will continue to prosecute that patent as well as several
other patent applications.
We
have the following patents expiring at various dates indicated below:
Bio-Therapeutics
Patents
We
hold the license to certain intellectual property belonging to Bio-Therapeutics that has either been granted a patent or is in the patent
application process as follows:
U.S.
Patent No. 5,989,857, Polypeptide compositions and methods was granted in November 1999 with 10 claims. The patent outlines a method
of preparing a bioactive polypeptide in a stable, inactivated form, the method comprising the step of treating the polypeptide with ozonated
water in order to oxidize and/or stabilize the cysteine residues, and in turn, prevent the formation of disulfide bridges necessary for
bioactivity. This patent expired on May 10, 2016.
U.S.
Patent No. 6,670,148, Compositions comprising bioactive peptides prepared without formation of native disulfide bonds was granted in
December 2003, with 9 claims. The patent further describes a method of preparing a bioactive polypeptide in a stable, inactivated form,
the method comprising the step of treating the polypeptide with ozonated water in order to oxidize and/or stabilize the cysteine residues,
and in turn, prevent the formation of disulfide bridges necessary for bioactivity. The method can involve the use of ozonated water to
both oxidize the disulfide bridges in a bioactive polypeptide, and to then stabilize the resultant cysteine residues. Optionally, and
preferably, the method can involve the use of ozonated water to stabilize the cysteine residues, and thereby prevent the formation of
disulfide bridges, in a polypeptide produced by recombinant means in a manner that allows the polypeptide to be recovered with the disulfide
bridges unformed. This Patent expired on May 10, 2016.
U.S.
Patent Application Number 11/415377, Buccal Delivery System, with 20 claims. The patent describes a delivery formulation and system for
delivering inactivated bioactive peptides to the body. The formulation includes effective amounts of the peptide as well as a mucosal
permeation enhancer selected from the group consisting of quaternary ammonium salts. The system can be used by spraying the formulation
into the buccal cavity, e.g., to the roof of the mouth. This application is currently listed as abandoned as of December 2009.
U.S.
Patent Application Number 11/431126, Immunokine composition and method with 31 claims. The patent describes a composition and method
for preventing HIV infection of mammalian cells. One aspect of the invention relates to an anti-immunodeficiency virus immunokine capable
of binding to a cellular protein in a manner that prevents HIV infection of that cell. The compositions can include either an active
bioactive polypeptide, such as native cobratoxin, and/or an inactivated bioactive polypeptide, such as cobratoxin in which one or more
of the native disulfide bridges have been prevented from forming. The term “immunokine” is used to refer to an inactivated
bioactive polypeptide, whether inactivated by chemical, genetic, and/or synthetic means as described herein, with the proviso that a
corresponding active bioactive polypeptides can be included where applicable (e.g., for in vitro use). This application is currently
listed as abandoned as of June 2009.
ReceptoPharm
Patents
ReceptoPharm
has three issued and several patents pending with the United States Patent and Trademark Office. These patents include:
U.S.
Patent No. 8,034,777, Modified Anticholinergic Neurotoxins as Modulators of the Autoimmune Reaction was granted in October 2011with 7
claims. The patent describes a method of treatment of a human patient suffering from Multiple Sclerosis comprising the administration
of a disease-mitigating amount of a composition consisting of detoxified and modified alpha-cobratoxin in a saline solution. This patent
is meant to protect and support our work in the production of drugs for the treatment of auto-immune diseases.
U.S.
Patent No. 7,902,152, Use of cobratoxin as an analgesic was granted in March 2011 with 16 claims. The patent describes a composition
of matter for an analgesic and its method of use is disclosed. The method of use is for the treatment of chronic pain, especially to
the treatment of heretofore intractable pain as associated with advanced cancer. The pain associated with neurological conditions, rheumatoid
arthritis, viral infections and lesions is also contemplated. The method includes administering to a host an alpha-neurotoxin that is
characterized by its ability to blocking of the action of acetylcholine at nicotinic acetylcholine receptors. Currently, this would be
applied to the Company’s current and future drugs for the treatment of pain.
U.S.
Patent No. 7,758,894, Modified elapid venoms as stimulators of the immune reaction was granted in July, 2010 with 14 claims. The patent
describes a method of protection from infections by administering a detoxified and neurotropically active modified venom containing alpha-cobratoxin.
Protection includes bacterial, viral and parasitic infections. This patent is meant to protect and support our work in our production
of anti-infective treatments. Currently, this would be applied to RPI-MN and RPI-78.
U.S.
Patent Application Number 11/217,713, Modified venom and venom components as anti-retroviral agents with 10 claims was filed in September
2005. The present invention describes a method of treatment of human subject suffering from infection with HIV, comprising administering
a disease mitigating amount of a detoxified, modified cobra venom composition in an amount effective to ameliorate at least one symptom
of said infection. This patent is meant to protect and support our work in the production of anti-viral treatments. Currently, this would
be applied to RPI-MN and RPI-78.
U.S.
Patent Application Number 11/784,607, Treatment of Autoimmune Disorders Using Detoxified Cobratoxin was filed in April 2007. The patent
describes a method of treating patients suffering from autoimmune disorders comprising the administration of detoxified cobra venom.
This patent is meant to protect and support our work in the production of drugs for the treatment of auto-immune diseases. Currently,
this would be applied to RPI-78MN.
U.S.
Patent Application Number 12/317,115, Alpha-neurotoxin Proteins with Anti-inflammatory Properties and Uses Thereof was filed in December
2008. The patent describes a method of treating an arthritic condition comprising the administration to a subject in need thereof an
effective amount of a pharmaceutical composition comprising an isolated alpha-neurotoxin protein or an effective fragment thereof. This
patent is meant to protect and support our work in the production of drugs for the treatment of inflammatory diseases.
Patents
Assigned to Us by Nanologix, Inc.
Because
we have focused on our drugs, we have not continued any activity in our former Designer Diagnostics division since June 2011. As results
become available through the validation process taking place at National Jewish Hospital in Denver and funding becomes available, we
may revisit the technology and re-engage our efforts in Designer Diagnostics.
On
January 24, 2006, we entered into an Agreement with NanoLogix whereby we exchanged our entire holding of NanoLogix common stock for intellectual
property pertaining to the manufacture of test kits for the rapid isolation, detection and antibiotic sensitivity testing of certain
mycobacteria. The agreement provides that: (a) NanoLogix has reassigned to us 11 key patents protecting the diagnostics test kit technology
in exchange for our entire holding of NanoLogix stock represented by 4,556,174 shares of that stock; (b) NanoLogix has licensed to us
the remaining 18 patents that protect the diagnostics test kit technology in exchange for a 6% royalty on the gross sales of the products
based on the licensed technology or escalating minimum payments starting at $20,000 annually; (c) we issued to NanoLogix 1 million options
of our restricted common stock at $.20 per share; and (d) we will allow NanoLogix to continue their use of these patents for development
of their hydrogen technology and other technologies unrelated to medical diagnostic test kits.
On
or about July 2009, we ceased paying the minimum royalties to Nanologix for the licensed patents and have allowed full rights to those
patents to revert back to Nanologix.
We
own 11 issued U.S. patents covering technologies related to growing, detecting, identifying, defining antibiotic sensitivity and designing
apparatus for the detection of 32 different paraffin-eating microorganisms that were assigned to us by Nanologix, Inc. These patents
will be used by our wholly owned subsidiary, Designer Diagnostics, should it again become operational.
U.S.
Patent No. 5,989,902, Method for determining the antimicrobial agent sensitivity of a nonparaffinophilic hydrophobic microorganism and
an associated apparatus was granted in November 1999 with 3 claims. The patent describes a method for determining a sensitivity of a
nonparaffinophilic hydrophobic microorganism to an antimicrobial agent. The method includes providing at least one receptacle containing
an aqueous broth including a carbon source and introducing the nonparaffinophilic hydrophobic microorganism into the receptacle. The
method further includes placing into the receptacle (i) a slide coated with a hydrophobic material and (ii) a predetermined quantity
of the antimicrobial agent to be tested. By observing the nonparaffinophilic hydrophobic microorganism growth or lack thereof on the
slide, it can be determined whether the predetermined quantity of the antimicrobial agent is effective in inhibiting growth of the nonparaffinophilic
hydrophobic microorganism on the slide. An associated apparatus is also disclosed. This Patent expired on November 13, 2017.
U.S.
Patent No. 5,981,210, Method for determining a presence or absence of a nonparaffinophilic hydrophobic microorganism in a body specimen
by using a DNA extraction procedure and a novel DNA extraction procedure was granted in November 1999 with 17 claims. The method of the
invention involves providing a first receptacle and a second receptacle. The first receptacle contains a sterile aqueous broth and the
second receptacle contains an aqueous broth including a carbon source. The method then includes placing into the first receptacle a first
support surface having a paraffin wax coating thereon and placing into the second receptacle a second support surface having a hydrophobic
material coating thereon. A body specimen, such as sputum, is then introduced into each of the first and second receptacles. The presence
of a nonparaffinophilic hydrophobic microorganism in the body specimen is determined by observing (i) a lack of microorganism growth
on the paraffin coated material of the first support surface and (ii) a presence of microorganism growth on the hydrophobic material
coating of the second support surface. The presence of the nonparaffinophilic hydrophobic microorganism can be further confirmed by performing
a DNA extraction. An associated DNA extraction procedure is also provided. This Patent expired on November 13, 2017.
U.S.
Patent No. 5,935,806, Method and apparatus for speciating and identifying MAI (Mycobacterium Avium Intracellulare) and testing the same
for antibiotic sensitivity was granted in August 1999 with 3 claims. The patent describes a method of speciating and identifying MAI
in a specimen comprises placing a paraffin coated slide in a receptacle containing a sterile aqueous solution inoculated with the specimen,
analyzing the slide after exposure to the specimen to determine the presence or absence of atypical Mycobacteria, and after the analysis
step, if atypical Mycobacteria are determined to be present, performing at least one speciation assay to ascertain if the atypical Mycobacteria
are MAI. A related apparatus is also disclosed for speciating and identifying MAI in a specimen comprising a paraffin-wax coated slide,
a tube having a sterile aqueous solution contained therein, the tube adapted to hold the slide, and at least one speciation assay means
for performing an assay to determine the presence or absence of MAI in the specimen after the specimen is introduced into the tube holding
the solution and the slide. An apparatus and method for determining the sensitivity of MAI to different antibiotics and dosages thereof
is also provided. This Patent expired on October 24, 2009 for failure to timely pay maintenance fees.
U.S.
Patent No. 5,882,920, Apparatus for determining the presence or absence of a paraffinophilic microorganism was granted in March 1999
with 4 claims. The patent describes a method of determining the presence of a paraffinophilic microorganism in a specimen taken from
a patient. The method includes providing a receptacle containing an aqueous solution and adjusting the solution to mimic the in vivo
clinical conditions of the patient. The method then further includes inoculating the solution with the specimen and then placing in the
receptacle a paraffin coated slide to bait the paraffinophilic microorganism. The slide is then analyzed after exposure to the specimen
to determine the presence or absence of the paraffinophilic microorganism. An associated apparatus is also disclosed. This Patent expired
on November 9, 2015.
U.S.
Patent No. 5,854,014, Apparatus for testing paraffinophilic microorganisms for antimicrobial sensitivity was granted in December 1998
with 2 claims. The patent describes an apparatus for determining the antimicrobial agent sensitivity of a paraffinophilic microorganism
from a specimen obtained from a patient. The apparatus includes a receptacle containing an aqueous solution, an amount of antimicrobial
agent to be tested and the specimen. The apparatus further consists of a paraffin coated slide placed into the receptacle. This Patent
expired October 24, 2009 for failure to timely pay maintenance fees.
U.S.
Patent No. 5,846,760, Method for determining a presence or absence of a nonparaffinophilic hydrophobic microorganism in a body specimen
and an associated kit was granted in December 1998 with 15 claims. The method of the invention involves providing a first receptacle
and a second receptacle. The first receptacle contains a sterile aqueous broth and the second receptacle contains an aqueous broth including
a carbon source. The method then includes placing into the first receptacle a first support surface having a paraffin wax coating thereon
and placing into the second receptacle a second support surface having a hydrophobic material coating thereon. A body specimen, such
as sputum, is then introduced into each of the first and second receptacles. The presence of a nonparaffinophilic hydrophobic microorganism
in the body specimen is determined by observing (i) a lack of microorganism growth on the paraffin coated material of the first support
surface and (ii) a presence of microorganism growth on the hydrophobic material coating of the second support surface. An associated
kit is also disclosed. This Patent expired on November 13, 2017.
U.S.
Patent No. 5,776,722, Method of testing a body specimen taken from a patient for the presence or absence of a microorganism and a further
associated method and associated apparatus was granted in July 1998 with 40 claims. The patent describes a method of testing a body specimen
taken from a patient for the presence or absence of a microorganism. A transport/isolator assembly is provided which includes a receptacle
and a baiting assembly including a baiting section having disposed thereon a coating material. A baiting liquid and the body specimen
are then introduced into the receptacle. The method further comprises securing the baiting assembly to the receptacle so that at least
a portion of the coated section is introduced into the baiting liquid. The transport/isolator assembly containing the baiting liquid
and the body specimen are then transported to a laboratory for subsequent observation of the coated section for growth or lack thereof
of the microorganism. A further method of processing the body specimen and an associated isolator/transport assembly kit as well as an
associated isolator/transport assembly are also disclosed. This Patent expired on September 25, 2017.
U.S.
Patent No. 5,569,592, Apparatus for testing MAI (Mycobacterium Avium Intracellulare) for antimicrobial agent sensitivity was granted
in October 1996 with 3 claims. The patent describes an apparatus for determining the sensitivity of MAI to different antimicrobial agents
and dosages thereof is provided. The apparatus comprises a plurality of test tubes adapted to contain an amount of an antimicrobial agent
to be tested and MAI complex organisms to be assayed and a separate paraffin coated slide adapted for placement in each of the test tubes.
The growth of the MAI complex organisms on the slide can be used to determine the concentration of the antimicrobial agent necessary
to resist MAI complex organism growth on the slide. An associated method is also disclosed. This Patent expired on October 29, 2013.
U.S.
Patent No. 5,472,877, Apparatus for determining the presence or absence of MAI (Mycobacterium Avium Intracellulare) was granted in December
1995 with 6 claims. The patent describes a method of speciating and identifying MAI in a specimen comprises placing a paraffin coated
slide in a receptacle containing a sterile aqueous solution inoculated with the specimen, analyzing the slide after exposure to the specimen
to determine the presence or absence of atypical Mycobacteria, and after the analysis step, if atypical Mycobacteria are determined to
be present, performing at least one speciation assay to ascertain if the atypical Mycobacteria are MAI. A related apparatus is also disclosed
for speciating and identifying MAI in a specimen comprising a paraffin-wax coated slide, a tube having a sterile aqueous solution contained
therein, the tube adapted to hold the slide, and at least one speciation assay means for performing an assay to determine the presence
or absence of MAI in the specimen after the specimen is introduced into the tube holding the solution and the slide. An apparatus and
method for determining the sensitivity of MAI to different antibiotics and dosages thereof is also provided. This Patent expired on December
5, 2012.
U.S.
Patent No. 5,316,918, Method and apparatus for testing MAI (Mycobacterium Avium Intracellulare) for antimicrobial agent sensitivity was
granted in May 1994 with 7 claims. The patent describes an apparatus and method for determining the sensitivity of MAI to different antimicrobial
agents and dosages thereof is provided. The apparatus comprises a plurality of test tubes adapted to contain an amount of an antimicrobial
agent to be tested and MAI complex organisms to be assayed and a separate paraffin coated slide adapted for placement in each of the
test tubes. The growth of the MAI complex organisms on the slide can be used to determine the concentration of the antimicrobial agent
necessary to resist MAI complex organism growth on the slide. An associated method is also disclosed. This Patent expired on May 31,
2011.
U.S.
Patent No. 5,153,119, Method for speciating and identifying MAI (Mycobacterium Avium Intracellulare) was granted in October 1992 with
15 claims. The patent describes a method of speciating and identifying MAI in a specimen comprises placing a paraffin coated slide in
a receptacle containing a sterile aqueous solution inoculated with the specimen, analyzing the slide after exposure to the specimen to
determine the presence or absence of atypical Mycobacteria, and after the analysis step, if atypical Mycobacteria are determined to be
present, performing at least one speciation assay to ascertain if the atypical Mycobacteria are MAI. A related apparatus is also disclosed
for speciating and identifying MAI in a specimen comprising a paraffin-wax coated slide, a tube having a sterile aqueous solution contained
therein, the tube adapted to hold the slide, and at least one speciation assay means for performing an assay to determine the presence
or absence of MAI in the specimen after the specimen is introduced into the tube holding the solution and the slide. An apparatus and
method for determining the sensitivity of MAI to different antibiotics and dosages thereof is also provided. This Patent expired on October
24, 2009.
Our
business is dependent upon our ability to protect our proprietary technologies and processes. Despite our efforts to protect our proprietary
rights, unauthorized parties may attempt to obtain and use proprietary information. We will rely on patent and trade secret law and nondisclosure
and other contractual arrangements to protect such proprietary information. We will file patent applications for our proprietary methods
and devices for patient treatments. Our efforts to protect our proprietary technologies and processes are subject to significant risks,
including that others may independently develop equivalent proprietary information and techniques, gain access to our proprietary information,
our proprietary information being improperly disclosed, or that we may ineffectively protect our rights to unpatented trade secrets or
other proprietary information.
Employees
We
employ a total of 4 employees, consisting of: (a) our Chief Executive Officer (b) Our Director of Marketing (c) our Chief Scientific
Officer, and (d) our Warehouse Manager. We utilize outside consultants, legal and accounting personnel as necessary and as funding permits.
Report
to Security Holders
We
are subject to the informational requirements of the Securities Exchange Act of 1934. Accordingly, we file annual, quarterly and other
reports and information with the Securities and Exchange Commission. You may read and obtain a copy of these reports in Washington, D.C.
Our filings are also available to the public from commercial document retrieval services and the Internet world wide website maintained
by the Securities and Exchange Commission at www.sec.gov.
Item
1A. Risk Factors
You
should carefully consider the risks described below regarding our operations, financial condition, financing, our common stock and other
matters. If any of the following or other material risks actually occur, our business, financial condition, or results or operations
could be materially adversely affected.
Our
ability to continue as a going concern is in doubt absent obtaining adequate new debt or equity financing and achieving sufficient sales
levels.
We
incurred net losses of $13,095,521 and $769,184 for the years ended December 31, 2021 and 2020. We anticipate that these losses will
continue for the foreseeable future. We have a significant working capital deficiency, and have not reached a profitable level of operations,
which raises substantial doubt about our ability to continue as a going concern. Our continued existence is dependent upon our achieving
sufficient sales levels of our Nyloxin® and Pet Pain Away products and obtaining adequate financing. Unless we can begin
to generate material revenue, we may not be able to remain in business. We cannot assure you that we will raise enough money or generate
sufficient sales to meet our future working capital needs.
We
have a limited revenue producing history with significant losses and expect losses to continue for the foreseeable future.
We
have yet to establish any history of profitable operations. We have incurred annual losses of $13,095,521 and $769,184 during the fiscal
years of operations ended December 31, 2021 and 2020, respectively. As a result, at December 31, 2021, we had an accumulated deficit
of $81,728,989. Our revenues have been insufficient to sustain our operations and we expect our revenues will be insufficient to sustain
our operations for the foreseeable future. Our potential profitability will require the successful commercialization of our Nyloxin®
and Pet Pain-Away products; or a potential licensing of our therapies under development.
We
will require additional financing to sustain our operations and without it will be unable to continue operations.
At
December 31, 2021, we had a working capital deficit of $20,606,665. Our recurring losses from operations and working capital deficiency
raise substantial doubt about our ability to continue as a going concern. We have a negative cash flow from operations of approximately
$1.74 million and $0.88 million for the years ended December 31, 2021 and 2020, respectively. We have insufficient financial resources
to fund our operations.
We
have a history of failed distributors, which has negatively affected our revenues and may continue to do so if we fail to locate a successful
distributor.
Due
to poor performance, we cancelled our distribution agreement with our Cobroxin® distributor, XenaCare in April 2011. We
plan to re-launch Cobroxin®, but we have not yet ordered product or provided planned sales. To date, we have only limited
sales of Nyloxin® and Pet Pain-Away through outside distributors. If we fail to improve our own marketing and distribution
or fail to find a competent outside distributor our operations and financial condition will be negatively affected.
If
we cannot sell a sufficient volume of our products, we will be unable to continue in business.
From
October 2009 until December 31, 2021, our operations centered on the marketing of Cobroxin® (our discontinued product),
Nyloxin® and Nyloxin® Extra Strength. In December of 2014, we launched Pet Pain-Away and began actively
marketing the product. During fiscal year 2021, we earned revenues of $97,735, $42,767 of it was from sales of Nyloxin®,
$42,813 of it was from sales of Pet Pain-Away, and $12,155 of it was from sales of Zeolite. During fiscal year 2020, we earned revenues
of $51,897, $48,242 of it was from sales of Nyloxin® and $3,655 of it was from sales of Pet Pain-Away. If we cannot achieve
sufficient sales levels of our Nyloxin® and Pet Pain-Away products or we are unable to secure financing our operations
will be negatively affected.
We
have a limited history of generating revenues on which to evaluate our potential for future success and to determine if we will be able
to execute our business plan; accordingly, it is difficult to evaluate our future prospects and the risk of success or failure of our
business.
You
must consider our business and prospects in light of the risks and difficulties we will encounter as an early-stage revenue producing
company. These risks include:
| |
● |
our
ability to effectively and efficiently market and distribute our products; |
| |
● |
our
ability to obtain market acceptance of our current products and future products that may be developed by us; and |
| |
● |
our
ability to sell our products at competitive prices which exceed our per unit costs. |
We
may be unable to address these risks and difficulties, which could materially and adversely affect our revenue, operating results and
our ability to continue to operate our business.
Our
growth strategy reflected in our business plan may be unachievable or may not result in profitability.
We
may be unable to implement our growth strategy reflected in our business plan rapidly enough for us to achieve profitability. Our growth
strategy is dependent on a number of factors, including market acceptance of our Nyloxin® and Pet Pain-Away products and
the acceptance by the public of using these products as pain relievers. We cannot assure you that our products will be purchased in amounts
sufficient to attain profitability.
Among
other things, our efforts to expand our sales of Nyloxin® and Pet Pain-Away will be adversely affected if:
| |
● |
we
are unable to attract sufficient customers to the products we offer in light of the price and other terms required in order for us
to attain the level of profitability that will enable us to continue to pursue our growth strategy; |
| |
● |
adequate
penetration of new markets at reasonable cost becomes impossible limiting the future demand for our products below the level assumed
by our business plan; |
| |
● |
we
are unable to scale up manufacturing to meet product demand, which would negatively affect our revenues and brand name recognition; |
| |
● |
we
are unable to meet regulatory requirements in the intellectual marketplace that would otherwise allow us for wider distribution;
and |
| |
● |
we
are unable to meet FDA regulatory requirements that would potentially expand our product base and potential revenues. |
If
we cannot manage our growth effectively, we may not become profitable.
Businesses,
which grow rapidly often, have difficulty managing their growth. If we grow rapidly, we will need to expand our management by recruiting
and employing experienced executives and key employees capable of providing the necessary support. We cannot assure you that our management
will be able to manage our growth effectively or successfully.
Among
other things, implementation of our growth strategy would be adversely affected if we were not able to attract sufficient customers to
the products and services we offer or plan to offer in light of the price and other terms required in order for us to attain the necessary
profitability.
If
we are unable to protect our proprietary technology, our business could be harmed.
Our
intellectual property, including patents, is our key asset. We currently have 21 patents that we either own or have the rights to from
third parties. 16 of these patents have been approved and 5 are pending. Competitors may be able to design around our patents for our
Cobroxin®, Nyloxin® and Pet Pain-Away products and compete effectively with us. The cost to prosecute infringements
of our intellectual property or the cost to defend our products against patent infringement or other intellectual property litigation
by others could be substantial. We cannot assure you that:
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pending
and future patent applications will result in issued patents, |
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patents
licensed by us will not be challenged by competitors, |
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our
patents, licensed and other proprietary rights from third parties will not result in costly litigation; |
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pending
and future patent applications will result in issued patents, |
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the
patents or our other intellectual property will be found to be valid or sufficiently broad to protect these technologies or provide
us with a competitive advantage, |
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if
we are sued for patent infringement, whether we will have sufficient funds to defend our patents, and |
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we
will be successful in defending against future patent infringement claims asserted against our products. |
Should
any risks pertaining to the foregoing occur, our brand name reputation, results of operation and revenues will be negatively affected.
We
are subject to substantial FDA regulations pertaining to Nyloxin® and Pet Pain-Away, which may increase our costs or otherwise
adversely affect our operations.
Our
Nyloxin® and Pet Pain-Away products are subject to FDA regulations, including manufacturing and labeling, approval of
ingredients, advertising and other claims made regarding Nyloxin® and Pet Pain-Away, and product ingredients disclosure.
If we fail to comply with current or future regulations, the FDA could force us to stop selling Nyloxin® and Pet Pain-Away
or require us to incur substantial costs from adopting measures to maintain FDA compliance.
The
inability to provide scientific proof for product claims may adversely affect our sales.
The
marketing of Nyloxin® and Pet Pain-Away involves claims that they assist in reducing Stage 2 chronic pain, while Nyloxin®
Extra Strength and Nyloxin® Military Strength involves claims that they assist in reducing Stage 3 chronic pain.
The marketing of Pet Pain-Away involves claims that they assist in relieving pain in dogs and cats. Under FDA and Federal Trade Commission
(“FTC”) rules, we are required to have adequate data to support any claims we make concerning Nyloxin® and
Pet Pain-Away. We have scientific data for our Nyloxin® and Pet Pain-Away product claims; however, we cannot be certain
that these scientific data will be deemed acceptable to the FDA or FTC. If the FDA or FTC requests supporting information and we are
unable to provide support that it finds acceptable, the FDA or FTC could force us to stop making the claims in question or restrict us
from selling the products.
None
of our ethical drug candidates have received FDA approval.
Our
non-homeopathic or ethical products require a complex and costly FDA regulation process that takes several years for drug approval, if
ever. None of the drug applications we have submitted to the FDA have received FDA approval. If we do not receive FDA approval for our
drug applications, our operations and financial condition will be negatively affected.
If
we are unable to secure sufficient cobra venom from available suppliers, our operating results will be negatively affected.
We
secure cobra venom on an as-needed basis. If we do not have an available supplier to fill customer orders, there will be distribution
delays and/or our failure to fulfill purchase orders, either of which will negatively affect our brand name reputation and operating
results.
Our
Nyloxin® and Pet Pain-Away products may be unable to compete against our competitors in the pain relief market.
The
pain relief market is highly competitive. We compete with companies that have already achieved product acceptance and brand recognition,
including multi-billion dollar private label manufacturers and more established pharmaceutical and health products companies, or low
cost generic drug manufacturers. Most such companies have far greater financial and technical resources and production and marketing
capabilities than we do. Additionally, if consumers prefer our competitors’ products, or if these products have better safety,
efficacy, or pricing characteristics, our results could be negatively impacted. If we fail to develop and actualize strategies to compete
against our competitors we may fail to compete effectively, which will negatively affect our operations and operating results.
If
we incur costs resulting from product liability claims, our operating results will be negatively affected.
If
we become subject to product liability claims for Nyloxin® and Pet Pain-Away that exceed our product liability policy
limits, we may be subject to substantial litigation costs or judgments against us, which will negatively impact upon our financial and
operating results.
Loss
of any of our key personnel could have a material adverse effect on our operations and financial results.
We
are dependent upon a limited number of our employees: (a) our Chief Executive Officer who directs our operations; and (b) our Chief Scientific
Officer who conducts our research and development activities. Our success depends on the continued services of our senior management
and key research and development employees as well as our ability to attract additional members to our management and research and development
teams. The unexpected loss of the services of any of our management or other key personnel could have a material adverse effect upon
our operations and financial results.
We
may be unable to maintain and expand our business if we are not able to retain, hire and integrate key management and operating personnel.
Our
success depends in large part on the continued services and efforts of key management personnel. Competition for such employees is intense
and the process of locating key personnel with the combination of skills and attributes required to execute our business strategies may
be lengthy. The loss of key personnel could have a material adverse impact on our ability to execute our business objectives. We do not
have any key man life insurance on the lives of any of our executive officers.
Risks
Related to Our Common Stock
Because
the market for our common stock is limited, persons who purchase our common stock may not be able to resell their shares at or above
the purchase price paid by them.
Our
common stock trades on the OTC-Market, which is not a liquid market. There is currently only a limited public market for our common stock.
We cannot assure you that an active public market for our common stock will develop or be sustained in the future. If an active market
for our common stock does not develop or is not sustained, the price may decline.
Because
we are subject to the “penny stock” rules, brokers cannot generally solicit the purchase of our common stock, which adversely
affects its liquidity and market price.
The
SEC has adopted regulations, which generally define “penny stock” to be an equity security that has a market price of less
than $5.00 per share, subject to specific exemptions. The market price of our common stock on the OTC has been substantially less than
$5.00 per share and therefore we are currently considered a “penny stock” according to SEC rules. This designation requires
any broker-dealer selling these securities to disclose certain information concerning the transaction, obtain a written agreement from
the purchaser and determine that the purchaser is reasonably suitable to purchase the securities. These rules limit the ability of broker-dealers
to solicit purchases of our common stock and therefore reduce the liquidity of the public market for our shares.
Because
the majority of our outstanding shares are freely tradable, sales of these shares could cause the market price of our common stock to
drop significantly, even if our business is performing well.
As
of December 31, 2021, we had 7,330,985,964 outstanding shares that were subject to the limitations of Rule 144 under the Securities Act
of 1933. In general, Rule 144 provides that any non-affiliates, who have held restricted common stock for at least six-months, are entitled
to sell their restricted stock freely, provided that we stay current in our SEC filings. After one year, a non-affiliate may sell without
any restrictions.
An
affiliate may sell after one year with the following restrictions: (i) we are current in our filings, (ii) certain manner of sale provisions,
(iii) filing of Form 144, and (iv) volume limitations limiting the sale of shares within any three-month period to a number of shares
that does not exceed 1% of the total number of outstanding shares. A person who has ceased to be an affiliate at least three months immediately
preceding the sale and who has owned such shares of common stock for at least one year is entitled to sell the shares under Rule 144
without regard to any of the limitations described above.
An
investment in our common stock may be diluted in the future as a result of the issuance of additional securities or the exercise of options
or warrants.
In
order to raise additional capital to fund our strategic plan, we may issue additional shares of common stock or securities convertible,
exchangeable or exercisable into common stock from time to time, which could result in substantial dilution to any person who purchases
our common stock. Because we have a negative net tangible book value, purchasers will suffer substantial dilution. We cannot assure you
that we will be successful in raising funds from the sale of common stock or other equity securities.
Since
we intend to retain any earnings for development of our business for the foreseeable future, you will likely not receive any dividends
for the foreseeable future.
We
have not and do not intend to pay any dividends in the foreseeable future, as we intend to retain any earnings for development and expansion
of our business operations. As a result, you will not receive any dividends on your investment for an indefinite period of time.
Due
to factors beyond our control, our stock price may continue to be volatile.
The
market price of our common stock has been and is expected to be highly volatile. Any of the following factors could affect the market
price of our common stock:
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our
failure to generate revenue, |
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our
failure to achieve and maintain profitability, |
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short
selling activities, |
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the
sale of a large amount of common stock by our shareholders including those who invested prior to commencement of trading, |
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actual
or anticipated variations in our quarterly results of operations, |
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announcements
by us or our competitors of significant contracts, new products, acquisitions, commercial relationships, joint ventures or capital
commitments, |
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the
loss of major customers or product or component suppliers, |
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the
loss of significant business relationships, |
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our
failure to meet financial analysts’ performance expectations, |
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changes
in earnings estimates and recommendations by financial analysts, or |
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changes
in market valuations of similar companies. |
In
the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has
often been instituted. A securities class action suit against us could result in substantial costs and divert our management’s
time and attention, which would otherwise be used to benefit our business.