o
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
|
Florida
|
|
59-3226705
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
|
|
|
618 East South Street
Suite 500
Orlando, Florida 32801
|
||
(Address of principal executive offices)
|
Large accelerated filer
|
|
o
|
|
Accelerated filer
|
|
o
|
|
|
|
|
|||
Non-accelerated filer
|
|
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
þ
|
Item No.
|
Description
|
Page
|
Cautionary Note Regarding Forward-Looking Statements
|
3 | |
PART I
|
||
Item 1.
|
Business.
|
6 |
Item 1A.
|
Risk Factors.
|
32 |
Item 1B.
|
Unresolved Staff Comments.
|
58 |
Item 2.
|
Properties.
|
59 |
Item 3.
|
Legal Proceedings.
|
59 |
Item 4.
|
Mine Safety Disclosures.
|
59 |
|
|
|
|
PART II
|
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
60 |
Item 6.
|
Selected Financial Data.
|
61 |
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
61 |
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
68 |
Item 8.
|
Financial Statements and Supplementary Data.
|
68 |
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
69 |
Item 9A.
|
Controls and Procedures.
|
69 |
Item 9B.
|
Other Information.
|
69 |
|
|
|
|
PART III
|
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
70 |
Item 11.
|
Executive Compensation.
|
74 |
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
76 |
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
78 |
Item 14.
|
Principal Accounting Fees and Services.
|
79 |
|
|
|
|
PART IV
|
|
Item 15.
|
Exhibits, Financial Statement Schedules.
|
80 |
Signatures
|
|
81 |
●
|
strategy;
|
●
|
new product discovery and development;
|
●
|
current or pending clinical trials;
|
●
|
our products' ability to demonstrate efficacy or an acceptable safety profile;
|
●
|
actions by the FDA and other regulatory authorities;
|
●
|
product manufacturing, including our arrangements with third-party suppliers;
|
●
|
product introduction and sales;
|
●
|
royalties and contract revenues;
|
●
|
expenses and net income;
|
●
|
credit and foreign exchange risk management;
|
●
|
liquidity;
|
●
|
asset and liability risk management;
|
●
|
the outcome of litigation and other proceedings;
|
●
|
intellectual property rights and protection;
|
●
|
economic factors;
|
●
|
competition; and
|
●
|
legal risks.
|
●
|
our lack of operating history;
|
●
|
our current and future capital requirements and our ability to satisfy our capital needs;
|
●
|
our inability to keep up with industry competition;
|
●
|
interpretations of current laws and the passages of future laws;
|
●
|
acceptance of our business model by investors and our ability to raise capital;
|
●
|
our drug discovery and development activities may not result in products that are approved by the applicable regulatory authorities. Even if our drug candidates do obtain regulatory approval they may never achieve market acceptance or commercial success;
|
●
|
our reliance on key personnel, including our ability to attract and retain scientists;
|
●
|
our reliance on third party manufacturing to supply drug for clinical trials and sales;
|
●
|
our limited distribution organization with no sales and marketing staff;
|
●
|
our being subject to product liability claims;
|
●
|
our reliance on key personnel, including our ability to attract and retain scientists;
|
●
|
legislation or regulation that may increase the cost of our business or limit our service and product offerings;
|
●
|
risks related to our intellectual property, including our ability to adequately protect intellectual property rights;
|
●
|
risks related to government regulation, including our ability to obtain approvals for the commercialization of some or all of our drug candidates, and ongoing regulatory obligations and continued regulatory review which may result in significant additional expense and subject us to penalties if we fail to comply with applicable regulatory requirements; and
|
●
|
our ability to obtain regulatory approvals in foreign jurisdictions to allow us to market our products internationally.
|
●
|
being permitted to present only two years of audited financial statements and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this annual report;
|
●
|
not being requested to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley Act”);
|
●
|
reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and
|
●
|
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
|
●
|
increasing proliferation and functional activities of CD4+T-cells and CD8+T-cells which will play a role in anti-virus and anti-tumor activities;
|
●
|
increasing maturation of dendritic cells which will initiate and intensify T-cell responses;
|
●
|
increasing secretion of cytokines such as IL-2, TNF, IL-12 and IFN-γ which will amplify
the T-cell response and mediate interaction among immune cells, forming a modulated and balanced immunity;
|
●
|
increasing functions of macrophages, resulting in enhanced cellular immunity through secreting a set of cytokines; and
|
●
|
increasing activity of NK cells which have the ability to kill cancer cells and virus-infected cells.
|
1.
|
Immune stimulation and regulation effects; and
|
2.
|
Direct anti-cancer inhibitory effects.
|
Title
|
Indication(s)
|
Dose
|
ClinicalTrials.gov Identifier / Status
|
Low Dose Naltrexone for Metastatic Melanoma, Castrate Resistant Prostate Cancer and Renal Cancer
|
Metastatic Melanoma, Castrate Resistant Prostate Cancer and Renal Cancer
|
5 mg/day
|
NCT01650350 /
Currently Recruiting
(verified May 2013)
|
Effects of Low Dose Naltrexone in Fibromyalgia
|
Fibromyalgia
|
3-4.5 mg/day
|
NCT00568555 / Completed June 2012
(verified June 2012)
|
Low Dose Naltrexone in Symptomatic Inflammatory Bowel Disease
|
Inflammatory Bowel Disease
|
4.5 mg/day
|
NCT01810185 /
Not yet recruiting
(verified June 2013)
|
Low-Dose Naltrexone for Glioma Patients
|
Malignant Glioma
|
4.5 mg/day
|
NCT01303835 /
Active, not recruiting
(verified January 2014)
|
Low-Dose Naltrexone for Depression Relapse and Recurrence
|
Major Depressive Disorder
Depression, Unipolar
Recurrence
Relapse
|
1 mg/day
|
NCT01874951 /
Recruiting
(verified September 2013)
|
Adverse Event
|
|
Phase 1 Open-label Study in Adults
N=17
|
|
Phase 2 Randomized, double-blind, placebo-controlled study in Adults
N=40
|
|
Phase 2 Pilot study in Children
N=12 a
|
||||
|
LDN
|
|
Placebo
|
|
LDN
|
|
Placebo
|
|
LDN
|
|
Sleep disturbance
|
|
7
|
|
5
|
|
5
|
|
2
|
|
2
|
Unusual dreams
|
|
1
|
|
3
|
|
2
|
|
0
|
|
2
|
Insomnia
|
|
5
|
|
0
|
|
0
|
|
0
|
|
0
|
Nausea
|
|
1
|
|
4
|
|
4
|
|
0
|
|
1
|
Hair thinning/ Hair loss
|
|
1
|
|
1
|
|
0
|
|
1
|
|
0
|
Hair growth
|
|
0
|
|
0
|
|
1
|
|
0
|
|
0
|
Blurred vision
|
|
1
|
|
0
|
|
0
|
|
0
|
|
0
|
Irritability
|
|
1
|
|
0
|
|
0
|
|
0
|
|
0
|
Mood swings
|
|
1
|
|
0
|
|
0
|
|
0
|
|
0
|
Mild disorientation
|
|
1
|
|
0
|
|
0
|
|
0
|
|
0
|
Twitching
|
|
0
|
|
0
|
|
0
|
|
1
|
|
1
|
Headaches
|
|
0
|
|
2
|
|
4
|
|
1
|
|
0
|
Decreased appetite/ Loss of appetite
|
|
0
|
|
0
|
|
2
|
|
1
|
|
0
|
Fatigue
|
|
0
|
|
3
|
|
0
|
|
1
|
|
0
|
Flushed ears
|
|
0
|
|
0
|
|
0
|
|
0
|
|
1
|
Papules, rash
|
|
0
|
|
0
|
|
0
|
|
1
|
|
0
|
Double vision
|
|
0
|
|
0
|
|
0
|
|
0
|
|
1
|
Flatulence
|
|
0
|
|
5
|
|
6
|
|
0
|
|
0
|
Vomiting
|
|
0
|
|
1
|
|
3
|
|
0
|
|
0
|
Diarrhea
|
|
0
|
|
5
|
|
7
|
|
0
|
|
0
|
Abdominal Pain
|
|
0
|
|
5
|
|
5
|
|
0
|
|
0
|
Constipation
|
|
0
|
|
0
|
|
2
|
|
0
|
|
0
|
Patent:
|
|
Title:
|
|
Expiration:
|
|
License:
|
|
Product or Use:
|
||||||||
U.S. Patent Number 6,586,443
(Related to US 5,356,900, 5,013,739 and 4,888,346 – all expired)
(No related foreign patents)
|
|
Multiple sclerosis in a human patient is treated by the administration preferably via a pharmacologically effective route of an essentially pure opiate receptor antagonist.
|
|
January 3, 2019
|
|
Exclusive License from Jacqueline Young.
|
|
IRT-103 (LDN)
|
||||||||
U.S. Patent Number 6,384,044
(No related foreign patents)
|
|
Cancer of the prostate in human male patients even at an advanced state with metastasis to other organs is preferably treated by administration.
|
|
November 8, 2019
|
|
Exclusive License from Jacqueline Young.
|
|
IRT-103 (LDN)
|
||||||||
U.S. Patent Number 6,288,074
(No related foreign patents)
|
|
Lymphoproliferative syndrome, including such diseases as malignant lymphoma, chronic lymphocytic leukemia, Hodgkin's lymphoma, and non-Hodgkin's lymphoma, are treated in human patients via administration.
|
|
November 15, 2019
|
|
Exclusive License from Jacqueline Young.
|
|
IRT-103 (LDN)
|
||||||||
US Patent Number 6,136,780
(Related to US 6,737,397)
(No related foreign applications)
|
|
Control of cancer growth through the interaction of [Met5] - Enkephalin and the zeta (s) receptor.
|
|
May 17, 2021
|
|
Exclusive License: Penn State University.
|
|
IRT-101 (MENK)
and IRT-103 (LDN)
|
||||||||
US Patent No. 6,737,397
(Related to US 6,136,780)
(No related foreign applications)
|
|
Control of cancer growth through the interaction of [Met5]-Enkephalin and the zeta receptor.
|
|
May 17, 2021
|
|
Exclusive license: Penn State University.
|
|
IRT-101 (MENK)
and IRT-103 (LDN)
|
||||||||
US Patent No. 7,879,870
(US PgPub 2008/0015211)
(No related foreign patents)
|
|
Treatment of inflammatory and ulcerative diseases of the bowel with opioid antagonists.
|
|
February 1, 2028
|
|
License with Dr. Jill Smith and LDN Research Group, LLC.
|
|
IRT-103 (LDN)
|
|
|
Treatment of inflammatory and ulcerative diseases of the bowel with opioid antagonists.
|
|
Pending
|
|
License with Dr. Jill Smith and LDN Research Group, LLC.
|
|
Treatment of Crohn’s disease
|
||||||||
US Application Number: 11/061,932
(Claims Priority to US60/548,021)
Canadian Application Number: 2,557,504 (Pending)
|
|
Combinatorial therapies for the treatment of neoplasias using the opioid growth factor receptor.
|
|
Pending application
|
|
Exclusive license: Penn State University.
|
|
IRT-101 (MENK)
|
||||||||
US Patent No. 8,003,630 (Application Number: 11/510,682)
(US PgPub 2007/0053838)
(Claims Priority to US60/548,021)
|
|
Combinatorial therapies for the treatment of neoplasias using the opioid growth factor receptor.
|
|
May 22, 2028
|
|
Exclusive license: Penn State University.
|
|
IRT-101 (MENK)
|
||||||||
US PgPub 2013/0084242 A1
(Application Number: 13/660,129)
(Claims Priority to US60/548,021)
Patent Cooperation Treaty (PCT) application:
PCT/US2010/030967
(Claims priority to US61/173,351)
|
|
Combinatorial therapies for the treatment of neoplasias using the opioid growth factor receptor.
|
|
Pending
|
|
Exclusive license: Penn State University.
|
|
IRT-101 (MENK)
|
||||||||
US 7,807,368
(US PgPub 2008-0146512 A1)
(No related foreign applications)
|
|
Cyclin-dependent kinase inhibitors as targets for opioid growth factor treatment.
|
|
October 4, 2027
|
|
Exclusive license: Penn State University.
|
|
IRT-101 (MENK)
|
||||||||
US 7,576,180
(Claims priority to US60/106,879)
(There is a related PCT application PCT/US1999/025802, claiming priority to the US60/106,879, but no National Phase applications were filed)
|
|
Opioid growth factor receptors.
|
|
August 17, 2026
|
|
Exclusive license: Penn State University.
|
|
IRT-101 (MENK)
|
||||||||
US 7,122,651
(No related foreign applications)
|
|
Novel nucleic acid molecules encoding opioid growth factor receptors.
|
|
October 17, 2023
|
|
Exclusive license: Penn State University.
|
|
Treatment of cancer
|
||||||||
US 7,517,649
(US PgPub 20060073565)
(No related foreign applications)
|
|
Methods of detecting opioid growth factor receptor (OGFr) in tissue.
|
|
April 13, 2026
|
|
Exclusive license: Penn State University.
|
|
IRT-101 (MENK)
|
CN 200910011030
(No related US applications)
|
|
Shan Fengping, Nikola Polonikov, Lu Changlong: Application of naloxone and composition thereof in preparing drug for treating cancer. Shan Fengping: August 26, 2009.
|
|
August 23, 2026
|
|
Exclusive license: Nicholas Plotnikoff and Fengping Shan.
|
|
IRT-101 (MENK)
and IRT-103 (LDN)
|
CN 200710051586
(No related US applications)
|
|
Huang Jianyin, Zhang Ding, Shan Fengping, Luo Zhinong: Application of methionine enkephalin in preparing human or animal vaccination. Huang Jianyin: August, 20 2008.
|
|
August 20, 2025
|
|
Exclusive license: Nicholas Plotnikoff and Fengping Shan.
|
|
IRT-101 (MENK)
|
CN 200710158742
(No related US applications)
|
|
Shan Fengping, Lv Changlong, Nikola Polonikov, Huang Jianyin: Application of compounds Methionine Enkephalin for preparing medicine for curing blood medulla hematopoietic system cancer. Dan Fengping: May 14, 2008.
|
|
May 13, 2025
|
|
Exclusive license: Nicholas Plotnikoff and Fengping Shan.
|
|
IRT-101 (MENK)
|
CN 200610046249
(No related US applications)
|
|
Shan Fengping, Lv Changlong, Huang Jianyin, Zhang Ding, Luo Zhinong: Aerosol containing Met-Enkephalin. Shan Fengping: November 15, 2006.
|
|
November 14, 2023
|
|
Exclusive license: Nicholas Plotnikoff and Fengping Shan.
|
|
IRT-101 (MENK)
|
CN 200310120896
(No related US applications)
|
|
Shan Fengping, Li Li: Integrated health food for regulating human body immune balance. Liaoning Academy of Microorganism Sciences: July 6, 2005.
|
|
July 5, 2022
|
|
Exclusive license: Nicholas Plotnikoff and Fengping Shan.
|
|
Oncology treatments
and cancer treatment
|
WO 2007/067753
(PCT/US2006/046925
|
|
Huang John, Chang Ding, Lo Shi-Lung, Shan Fengping: Methods of reducing side effects in cancer therapy. Penta Biotech: June 14, 2007.
|
|
Pending
|
|
Exclusive license: Fengping Shan.
|
|
IRT-101 (MENK)
|
CN 200510019964
|
|
Huang Jianyin, Zhang Ding, Luo Zhinong, Shan Fengping: Use of Methionine Enkephalin in preparation of medicine for reducing toxic side effects of chemical or radioactive therapy. Huang Jianyin: August 9, 2006.
|
|
August 8, 2023
|
|
Exclusive license: Fengping Shan.
|
|
IRT-101 (MENK)
|
US PgPub 2003/0148942 A1
(Application Number: 10/146,999)
Our Docket #6463-0101PUS1
(Claims Priority to US60/291,237)
|
|
Methods for inducing sustained immune response.
|
|
May 16, 2022
|
|
Assigned and licensed: Nicholas Plotnikoff.
|
|
IRT-101 (MENK)
|
Russian Application 2003136161/14
(Claims Priority to US60/291,237)
|
|
Methods for inducing sustained immune response.
|
|
May 16, 2022
|
|
Assigned and licensed: Nicholas Plotnikoff.
|
|
IRT-101 (MENK)
|
PCT application PCT/US2002/018529
(Claims priority to the US60/291,237)
|
|
Methods for inducing sustained immune response.
|
|
May 16, 2022
|
|
Assigned and licensed: Nicholas Plotnikoff.
|
|
IRT-101 (MENK)
|
National Phase entries filed off the PCT/US2002/018529
China 02814327.2
(Pending)
EP App 2002746503 Granted: November 29, 2006
India Patent No. 220265 (App 01627/KOLNP/2003)
Japan App Withdrawn
|
|
Methods for inducing sustained immune response.
|
|
May 16, 2022
|
|
Assigned and licensed: Nicholas Plotnikoff.
|
|
IRT-101 (MENK)
|
China Patent 200810229085
|
|
The invention belongs to the technical field of treating tumors by immunization therapy. In particular, a method for treating intestinal cancer and pancreatic cancer cells by Methionine Enkephalin under conditions of in-vivo injection and in-vitro cell culture so as to achieve the treating aim.
|
|
March 21, 2026
|
|
Licensed: Fengping Shan.
|
|
IRT-101 (MENK)
|
|
●
|
Active Immunotherapy by which drugs or vaccines stimulate the body’s own defenses to fight disease;
|
|
●
|
Adoptive Immunotherapy which uses immune system components (e.g., antibodies, cytokines, or immune cells) created outside the body and then administered to patients; and
|
|
●
|
Non-Specific Immunotherapies which stimulate the body’s immune system in general ways, including activity against cancer cells or virus-infected cells.
|
●
|
Autoimmune diseases or immune disorders such as Crohn’s disease and multiple sclerosis;
|
●
|
As an adjunct to antivirals in the treatment of HIV/AIDS; and
|
●
|
In cancer patients undergoing chemotherapy, radiation treatments or surgery.
|
1.
|
Smith JP, Bingaman SI, Ruggiero F, Mauger DT, Mukherjee A, McGovern CO, Zagon IS. Therapy with the Opioid Antagonist Naltrexone Promotes Mucosal Healing in Active Crohn’s Disease: A Randomized Placebo-Controlled Trial. Dig Dis Sci . 2011 July; 56(7): 2088-2097.
|
2.
|
Smith JP, Field D, Bingaman SI, Evans R, Mauger DT. Safety and Tolerability of Low-dose Naltrexone Therapy in Children With Moderate to Severe Crohn’s Disease A Pilot Study. J Clin Gastroenterol . 2013 Apr; 47(4):339-45.
|
3.
|
Smith JP, Stock H, Bingaman SI, Mauger DT, Rogosnitzky M, Zagon IS. Low-Dose Naltrexone Therapy Improves Active Crohn’s Disease. Am J Gastroenterol . 2007; 102:820-828.
|
IND #
|
Indication
|
Product Name
|
Status
|
34,442
|
HIV/AIDS
|
MENK
|
Inactive
|
67,442
|
Crohn’s Disease
|
Naltrexone HCL
|
Active
|
50,987
|
Pancreatic Cancer
|
MENK/OGF
|
Active
|
●
|
Commencing by the end of the second quarter of 2014, the distribution of IRT 103 LDN to support the large scale treatment in emerging nations, initially in Africa and Central/South America as an immune-stimulating therapy for HIV/AIDS, cancer, autoimmune disease and immune disorders;
|
●
|
Commencing by the end of the second quarter of 2014, the distribution of IRT-103 LDN marketed under the name Lodonal™ through various distribution agreements;
|
●
|
Outsourcing of the manufacturing of IRT-103 LDN to Laboratorios Ramos in Managua, Nicaragua to provide LDN in capsule, tablet and/or cream form, throughout Africa and expanding to other developing nations. Work on the outsourcing commenced in the last quarter of 2013. Laboratorios Ramos has already produced LDN, and the Company will commence shipments when all regulatory approvals have been received in Africa for the importation of LDN; and
|
●
|
A cooperative venture with the Hubei Qianjiang Pharmaceutical Company (“Qianjiang”), to be in operation by the end of 2014, pursuant to which Qianjiang will provide the funding required for the clinical trials of the Company’s products in China in exchange for the Company providing exclusive licensing rights in China. The Company will also receive 6% of the gross revenue from sales of those products in China.
|
●
|
The Community MA is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee for Medicinal Products for Human Use of the EMA, and is valid throughout the entire territory of the EEA. The Centralized Procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products, and medicinal products indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases. The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU.
|
●
|
National MAs, which are issued by the competent authorities of the member states of the EEA and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized Procedure. Where a product has already been authorized for marketing in a member state of the EEA, this National MA can be recognized in another member state through the Mutual Recognition Procedure. If the product has not received a National MA in any member state at the time of application, it can be approved simultaneously in various member states through the Decentralized Procedure.
|
1.
|
Drug use naltrexone (4.5 mg) in the treatment of diseases requiring immune system stimulating cancer, HIV infection, multiple sclerosis, etc., as demonstrated by the Company, at a cost of $1/day or 450 x F.CFA/day.
|
2.
|
Management – laboratory for quality control and to analyze drugs imported in to Equatorial Guinea.
|
|
3.
|
The implementation of local production of quality essential medicines.
|
NEW DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT
|
||
CANDIDATE
|
INDICATION
|
REGULATORY ACTIONS
|
IRT-101
|
Pancreatic Cancer
|
End-of-Phase 1 Meeting with FDA Complete 3Q 2013
|
IRT-103
|
Crohn’s Disease
|
Type C Meeting with FDA Complete 2Q 2013
Scientific Advice with EMA Complete 1Q 2014
|
●
|
The Company may be unable to successfully complete the clinical development of IRT-103 (LDN);
|
●
|
The Company must comply with any possible additional requests and recommendations from the United States Food and Drug Administration (“FDA”), including additional clinical trials;
|
●
|
The Company may not obtain all necessary approvals from the FDA and similar foreign regulatory agencies;
|
●
|
The Company may not commit sufficient resources to the development, regulatory approval, marketing and distribution of IRT-103 (LDN);
|
●
|
IRT-103 (LDN) must be manufactured in compliance with requirements of the FDA and similar foreign regulatory agencies and in commercial quantities sufficient to meet market demand;
|
●
|
IRT-103 (LDN) may not achieve market acceptance by physicians, patients and third party payers;
|
●
|
IRT-103 (LDN) may not successfully compete against alternative products and therapies; and
|
●
|
The Company or any other pharmaceutical organization may independently develop products that compete with IRT-103 (LDN).
|
●
|
delays or failures in obtaining sufficient quantities of the API and/or drug product;
|
●
|
delays or failures in reaching an agreement on acceptable clinical trial agreement terms or clinical trial protocols with prospective sites and with the FDA or other foreign regulatory bodies;
|
●
|
delays or failures in obtaining Institutional Review Board (“IRB”) or Ethics Committee (“EC”) approvals to conduct a clinical trial at a prospective site;
|
●
|
the need to successfully complete, on a timely basis, preclinical safety pharmacology studies (for IRT-101 (MENK));
|
●
|
the limited number of, and competition for, suitable sites to conduct the clinical trials;
|
●
|
the limited number of, and competition for, suitable patients for enrollment in the clinical trials; and
|
●
|
delays or failures in obtaining regulatory approval to commence a clinical trial.
|
●
|
slower than expected rates of patient recruitment and enrollment;
|
●
|
failure of patients to complete the clinical trials;
|
●
|
failure of our third party vendors to timely or adequately perform their contractual obligations relating to the clinical trials;
|
●
|
inability or unwillingness of patients or medical investigators to follow our clinical trial protocols;
|
●
|
inability to monitor patients adequately during or after treatment;
|
●
|
termination of the clinical trials by one or more clinical trial sites;
|
●
|
unforeseen safety issues;
|
●
|
lack of efficacy demonstrated during clinical trial results;
|
●
|
lack of adequate funding to continue the clinical trials;
|
●
|
the need for unexpected discussions with the FDA or other foreign regulatory agencies regarding the scope or design of our clinical trials or the need to conduct additional trials;
|
●
|
unforeseen delays by the FDA or other foreign regulatory agencies after submission of our results;
|
●
|
an unfavorable FDA inspection of our contract manufacturers of APIs or drug products; and/or
|
●
|
inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities resulting in the imposition of a clinical hold.
|
●
|
the efficacy and safety of our drug candidates as demonstrated in clinical trials;
|
●
|
the clinical indications for which the drug is approved;
|
●
|
acceptance by physicians, major operators of clinics and patients of the drug as a safe and effective treatment;
|
●
|
the potential and perceived advantages of our drug candidates over alternative treatments;
|
●
|
the safety of drug candidates seen in a broader patient group, including its use outside the approved indications;
|
●
|
the cost of treatment in relation to alternative treatments;
|
●
|
the availability of adequate reimbursement and pricing by third parties and government authorities;
|
●
|
relative convenience and ease of administration;
|
●
|
the prevalence and severity of adverse side effects; and
|
●
|
the effectiveness of our sales and marketing efforts.
|
●
|
we may be unable to successfully complete the clinical development of IRT-103;
|
●
|
our lack of experience in commercializing and marketing drug products;
|
●
|
we may not have or be able to obtain sufficient financial resources to develop and commercialize IRT-103;
|
●
|
we may not be able to identify a suitable co-development partner;
|
●
|
we, or any of our future partners, may fail to fulfill our responsibilities in a timely manner or fail to commit sufficient resources to the development, regulatory approval, and commercialization efforts related to IRT-103;
|
●
|
we, or any of our future partners, must comply with additional requests and recommendations from the FDA, including additional clinical trials;
|
●
|
we, or any of our future partners, may not obtain all necessary approvals from the FDA and similar foreign regulatory agencies;
|
●
|
IRT-103 must be manufactured in compliance with requirements of the FDA and similar foreign regulatory agencies and in commercial quantities sufficient to meet market demand;
|
●
|
IRT-103 may not achieve market acceptance by physicians, patients and third party payers;
|
●
|
IRT-103 may not compete successfully against alternative products and therapies; and
|
●
|
we, or any pharmaceutical company, may independently develop products that compete with IRT-103.
|
●
|
regulatory authorities may withdraw approval of the drug or seize the drug;
|
●
|
we may be required to recall the drug or change the way the drug is administered;
|
●
|
additional restrictions may be imposed on the marketing or the manufacturing processes of the particular drug;
|
●
|
we may be subject to fines, injunctions or the imposition of civil or criminal penalties;
|
●
|
regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;
|
●
|
we may be required to create a medication guide outlining the risks of such side effects for distribution to patients;
|
●
|
we could be sued and held liable for harm caused to patients;
|
●
|
the drug may become less competitive; and
|
●
|
our reputation may suffer.
|
●
|
the rate of progress and cost of our clinical trials, preclinical studies and other discovery and research and development activities;
|
●
|
the timing of, and costs involved in, seeking and obtaining FDA and other regulatory approvals;
|
●
|
the continuation and success of our strategic alliances and future collaboration partners;
|
●
|
the exercise of remaining options under current collaborative agreements;
|
●
|
the costs of preparing, filing, prosecuting, maintaining and enforcing any patent claims and other intellectual property rights, including litigation costs and the results of such litigation;
|
●
|
our ability to enter into additional collaboration, licensing, government or other arrangements and the terms and timing of such arrangements;
|
●
|
potential acquisition or in-licensing of other products or technologies; and
|
●
|
the technologies or other adverse market developments.
|
●
|
manage our clinical trials effectively, including our clinical trials for IRT-103 (LDN) which will be conducted at numerous trial sites throughout the world;
|
●
|
manage our internal development efforts effectively while carrying out our contractual obligations to licensors, contractors, collaborators, government agencies and other third parties;
|
●
|
manage operations in both regulated and unregulated businesses
|
●
|
continue to improve our operational, financial and management controls and reporting systems and procedures; and
|
●
|
identify, recruit, maintain, motivate and integrate additional employees.
|
●
|
withdrawal of clinical trial volunteers, investigators, patients or trial sites;
|
●
|
the inability to commercialize our drug candidates;
|
●
|
decreased demand for our drug candidates;
|
●
|
regulatory investigations that could require costly recalls or product modifications;
|
●
|
loss of revenues;
|
●
|
substantial costs of litigation;
|
●
|
liabilities that substantially exceed our product liability insurance, which we would then be required to pay ourselves;
|
●
|
an increase in our product liability insurance rates or the inability to maintain insurance coverage in the future on acceptable terms, if at all;
|
●
|
the diversion of management’s attention from our business; and
|
●
|
damage to our reputation and the reputation of our products.
|
●
|
not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;
|
●
|
taking advantage of an extension of time to comply with new or revised financial accounting standards;
|
●
|
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and
|
●
|
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
|
●
|
problems assimilating the purchased technologies, products or business operations;
|
●
|
issues maintaining uniform standards, procedures, controls and policies;
|
●
|
unanticipated costs associated with acquisitions;
|
●
|
diversion of management’s attention from our core business;
|
●
|
adverse effects on existing business relationships with suppliers and customers;
|
●
|
risks associated with entering new markets in which we have limited or no experience;
|
●
|
potential loss of key employees of acquired businesses; and
|
●
|
Increased legal and accounting compliance costs.
|
●
|
the degree and range of protection any patents will afford us against competitors, including whether third parties will find ways to make, use, sell, offer to sell or import competitive products without infringing our patents;
|
●
|
if and when patents will issue;
|
●
|
whether or not others will obtain patents claiming inventions similar to those covered by our patents and patent applications; or
|
●
|
whether we will need to initiate litigation or administrative proceedings in connection with patent rights, which may be costly whether we win or lose.
|
●
|
For IRT - 103 for Crohn’s disease, Patent Number 7879870, filed April 16, 2007, issued February 1, 2011, Methods for the treatment of inflammatory and ulcerative diseases of the bowel (e.g., Crohn’s disease and ulcerative colitis) with low dose opioid antagonists (e.g., naltrexone, nalmefene or naloxone), pharmaceutical compositions for use in such methods, and methods for the manufacture of such pharmaceutical compositions.
|
●
|
Our license agreement with Dr. Jill Smith and LDN Research owned by Dr. Ian S. Zagon, Dr. Patricia J. McLaughlin and Moshe Rogosnitzky. The license may be terminated if we materially breach the agreement and fail to cure our breach during an applicable cure period. Our failure to use commercially reasonable efforts to develop and commercialize naltrexone (oral) and IRT-103 in the United States and certain other specified countries or to perform our other diligence obligations under the license agreement would constitute a material breach of the license agreement. In the event our license agreement with Dr. Jill Smith and LDN Research is terminated, we will lose all of our rights to develop and commercialize the drug candidates covered by such license, which would significantly harm our business. TNI BioTech owns a number of other patents having to do with the development of naltrexone in low dose which would allow us to continue our development of those indications.
|
●
|
We depend significantly on our license agreement with Pennsylvania State University for the development of IRT-101 for pancreatic cancer covered by patents US Patent Numbers 6,737,397, CA 2,557,504, US 20010046968 , US 6737397 , US 6136780 , US 20080015211 , US 20070053838 , US 8003630 , US 20110123437 , US 7807368 , US 7576180 , US 7517649 , US 20080146512 , US 7122651 , US 20060073565 , US 20050191241 , Patent No 8,003,630. issued between 2001 and 2011. Our license agreement with Pennsylvania State University may be terminated if we materially breach the agreement and fail to cure our breach during an applicable cure period. Our failure to use commercially reasonable efforts to develop and commercialize OGF sometimes referred to as MENK (intravenous) and IRT-101 in the United States and certain other specified countries or to perform our other diligence obligations under the license agreement would constitute a material breach of the license agreement. In the event our license agreement with Pennsylvania State University is terminated, we will lose all of our rights to develop and commercialize the drug candidates covered by such license, which would harm our business and future prospects. TNI BioTech owns a number of other patents having to do with the development of MENK which would allow us to continue our development of those indications.
|
●
|
warning letters;
|
●
|
civil and criminal penalties;
|
●
|
injunctions;
|
●
|
withdrawal of approved products;
|
●
|
product seizure or detention;
|
●
|
product recalls;
|
●
|
total or partial suspension of production; and
|
●
|
refusal to approve pending NDAs or supplements to approved NDAs.
|
●
|
a drug candidate may not be deemed safe or effective;
|
●
|
FDA officials may not find the data from preclinical studies and clinical trials sufficient;
|
●
|
the FDA might not approve our or our third party manufacturer’s processes or facilities; or
|
●
|
the FDA may change its approval policies or adopt new regulations.
|
●
|
warning letters;
|
●
|
civil or criminal penalties;
|
●
|
injunctions;
|
●
|
suspension of or withdrawal of regulatory approval;
|
●
|
suspension of any ongoing clinical trials;
|
●
|
voluntary or mandatory product recalls and publicity requirements;
|
●
|
refusal to approve pending applications for marketing approval of new drugs or supplements to approved applications filed by us;
|
●
|
restrictions on operations, including costly new manufacturing requirements; or
|
●
|
seizure or detention of our products or import bans.
|
●
|
lack of adequate protection from intellectual property rights in foreign countries, which could occur if we do not have issued patents in force in such foreign countries covering our products, their methods of use and methods of manufacture;
|
●
|
the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices (for instance, because the goods have patent protection in such country), opts to import goods from a foreign market (with low or lower prices) rather than buy them locally;
|
●
|
unexpected changes in tariffs, trade barriers and regulatory requirements
|
●
|
economic weakness, including inflation, or political instability in particular foreign economies and markets;
|
●
|
compliance with laws for employees traveling abroad;
|
●
|
foreign taxes, including withholding of payroll taxes;
|
●
|
foreign currency fluctuations, which could result in increased operating expenses and reduced revenues;
|
●
|
workforce uncertainty in countries where labor unrest is more common than in the U.S.;
|
●
|
production shortages resulting from any events affecting the API and/or finished drug product supply or manufacturing capabilities abroad;
|
●
|
business interruptions resulting from geo-political actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires; and
|
●
|
failure to comply with Office of Foreign Asset Control rules and regulations and the Foreign Corrupt Practices Act
|
●
|
the federal healthcare program Anti-Kickback Statute, which prohibits, among other things, any person from knowingly and willfully offering, soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;
|
●
|
the federal False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, false claims, or knowingly using false statements to obtain payment from the federal government, and which may apply to entities like us which may provide coding and billing advice to customers;
|
●
|
federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; and
|
●
|
the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information; and state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers.
|
●
|
delaying, deferring or preventing a change in control of our company;
|
●
|
impeding a merger, consolidation, takeover or other business combination involving our company; or
|
●
|
causing us to enter into transactions or agreements that are not in the best interests of all stockholders
|
●
|
results from, and delays in, clinical trial programs relating to our drug candidates, including the ongoing and planned clinical trials for IRT-103 (LDN), IRT-101 (MENK) and other drug candidates;
|
●
|
announcements of regulatory approvals or disapprovals of our drug candidates including IRT-103 (LDN) and IRT-101 (MENK) or delays in any regulatory agency review or approval processes;
|
●
|
failure or discontinuation of any of our research programs;
|
●
|
loss of significant clients or customers;
|
●
|
loss of significant strategic relationships;
|
●
|
announcements relating to future collaborations or our existing collaborations;
|
●
|
our failure to achieve and maintain profitability;
|
●
|
changes in earnings estimates and recommendations by financial analysts;
|
●
|
changes in market valuations of similar companies;
|
●
|
wholesalers’ buying patterns;
|
●
|
addition or termination of clinical trials or funding support;
|
●
|
regulatory developments affecting our drug candidates or those of our competitors;
|
●
|
the Company’s sales decrease internationally;
|
●
|
variations in the level of expenses related to our drug candidates or future development programs;
|
●
|
ability to secure new government contracts and allocation of our resources to or away from performing work under government contracts; and
|
●
|
general economic conditions in the United States and abroad;
|
●
|
acquisitions and sales of new products, technologies or business;
|
●
|
delays
|
●
|
market conditions in the pharmaceutical, biopharmaceutical and biotechnology sectors;
|
●
|
the issuance of new or changed securities analysts’ reports or recommendations regarding us, our competitors or our industry in general;
|
●
|
actual and anticipated fluctuations in our quarterly operating results;
|
●
|
disputes concerning our intellectual property or other proprietary rights;
|
●
|
introduction of technological innovations or new products by us or our competitors;
|
●
|
manufacturing issues related to our drug candidates for clinical trials or future products for commercialization;
|
●
|
market acceptance of our future products;
|
●
|
deviations in our operating results from the estimates of analysts;
|
●
|
third party payor coverage and reimbursement policies;
|
●
|
new legislation in the United States relating to the sale or pricing of pharmaceuticals;
|
●
|
FDA or other U.S. or foreign regulatory actions affecting us or our industry;
|
●
|
product liability claims or other litigation or public concern about the safety of our drug candidates or future drugs;
|
●
|
our ability to obtain necessary intellectual property licenses including, if necessary, those relating to IRT-103 (LDN) and other drug candidates;
|
●
|
the outcome of any future legal actions to which we are a party;
|
●
|
sales of our common stock by our officers, directors or significant stockholders;
|
●
|
frequent, irregular, under market, or large sales of shares of our common stock by any shareholder;
|
●
|
additions or departures of key personnel; and
|
●
|
external factors, including natural disasters and other crises.
|
●
|
Investors may have difficulty buying and selling or obtaining market quotations;
|
●
|
Market visibility for our common stock may be limited; and
|
●
|
A lack of visibility for our common stock may have a depressive effect on the market price for our common stock
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Period |
|
|||||||
Price Range | ||||||||
High | Low | |||||||
Quarter Ended December 31, 2013:
|
$ |
3.20
|
$
|
1.01
|
||||
Quarter Ended:
|
||||||||
September 30, 2013
|
|
$
|
3.45
|
$
|
0.68
|
|
||
June 30, 2013
|
|
$
|
5.25
|
|
|
$
|
2.99
|
|
March 31, 2013
|
$
|
10.20
|
|
|
$
|
4.00
|
Quarter Ended December 31, 2012:
|
$ | 9.70 | $ | 1.40 | ||||
Quarter Ended
|
||||||||
September 30, 2012
|
$ | 2.75 | $ | 0.72 | ||||
June 30, 2012
|
$ | 8.00 | $ | 2.60 | ||||
March 31, 2012
|
$ | 10.01 | $ | 9.00 |
Item 6.
|
Selected Financial Data
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operation
|
2013
|
2012
|
|||||||
Selling, general and administrative
|
$
|
71,104
|
$
|
48,558
|
||||
Increase from prior year
|
$
|
22,546
|
$
|
48,558
|
||||
Percent increase from prior year
|
133.4
|
%
|
100
|
% |
●
|
consulting services obtained to assist the Company in raising capital, manage investor relations, and develop business in new markets, in the amount of $1,269,973 in 2013, an increase of $997,365 or 366% over the $272,608 spent in 2012;
|
●
|
professional fees for legal, tax and accounting services in the amount of $1,096,652 in 2013, an increase of $792,460 or 261% over the $304,192 spent in 2012;
|
●
|
payroll in the amount of $1,004,447 in 2013, an increase of $538,995 or 116% over the $465,452 spent in 2012;
|
●
|
and travel in the amount of $427,860 in 2013, an increase of $362,790 or 557% over the $65,070 spent in 2012.
|
2013
|
2012
|
||||||||||
Research and development
|
$
|
22,024
|
$
|
4,960
|
|||||||
Increase/ (decrease) from prior year
|
$
|
17,064
|
$
|
4,960
|
|||||||
Percent increase from prior year
|
344
|
%
|
100
|
%
|
●
|
payments for contracted technical services ($1,446,723 in 2013, an increase of $1,424,723 or 1,556% over the $42,000 spent in 2012), reflecting the increased use of contractors to perform some of our research activities;
|
●
|
patent expenses ($122,633 in 2013, compared to $0 for 2012), reflecting increased costs incurred in 2013 to maintain licenses and patents acquired in 2012 and 2013,
|
●
|
legal fees ($83,495 in 2013, compared to $0 in 2012), incurred mainly to document new licenses and patents;
|
●
|
payroll ($438,648 in 2013, an increase of $281,682 or 359% over the $78,483 spent in 2012), reflecting the hire of three new R&D employees in 2013; and
|
●
|
travel ($42,013 in 2013, an increase of $38,939 or 1,267% over the $3,074 in 2012).
|
2013
|
2012
|
|||||||
Depreciation expense
|
$
|
1
|
$
|
0.1
|
||||
Amortization expense
|
$
|
2,852
|
$
|
1,570
|
||||
Increase from prior year
|
$
|
1,283
|
$
|
1,570
|
||||
Percentage increase from prior year
|
45%
|
100%
|
2013
|
2012
|
|||||||
Interest expense
|
$
|
1,437
|
$
|
27
|
||||
Increase from prior year
|
$
|
1,410
|
$
|
69
|
||||
Percentage increase from prior year
|
5,222%
|
256%
|
Item 7A.
|
Quantitative and Qualitative Disclosure About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Name
|
Age
|
Date of Appointment
|
Position
|
|||
Noreen Griffin
|
62
|
March 2012
|
Chief Executive Officer and Director
|
|||
Dr. Nicholas Plotnikoff
|
86
|
March 2012
|
Non-Executive Chairman of the Board and Director
|
|||
Christopher Pearce
|
70
|
March 2012
|
Chief Operating Officer and Director (*)
|
|||
Dr. Eugene Youkilis
|
75
|
March 2012
|
President and Director
|
|||
Peter Aronstam
|
61
|
January 2013
|
Chief Financial Officer
|
|||
Dr. Fengping Shan
|
55
|
March 2012
|
Chief Science Officer and Director
|
|||
Dr. Gloria B. Herndon
|
63
|
March 2012
|
Director
|
|||
Dr. Angus Dalgleish
|
64
|
June 2013
|
Chief Medical Officer and Director of Research and Development (#)
|
|||
Dr. Joseph M. Fortunak
|
59
|
April 2013
|
Vice President of Global Research and Development and Chemical Development
|
Item 11.
|
Executive Compensation
|
Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | All Other Compensation | Total ($) | |||||||||||||||||||
Noreen Griffin
|
2013
|
$ | 341,667 | (5 | ) | $ | — | $ | — | $ | — | $ | 18,000 | (2 | ) | $ | 359,667 | |||||||||
Chief Executive Officer
|
2012
|
$ | 213,643 | (5 | ) | $ | — | $ | 5,000 | (1 | ) | $ | — | $ | 18,000 | (2 | ) | $ | 236,643 | |||||||
Christopher Pearce
|
2013
|
$ | 259,375 | (5 | ) | $ | — | $ | — | $ | — | $ | 18,000 | (4 | ) | $ | 267,375 | |||||||||
Chief Operating Officer, Director (*)
|
2012
|
$ | 195,860 | (5 | ) | $ | 4,000 | (3 | ) | $ | — | $ | — | $ | 18,000 | (4 | ) | $ | 217,8600 | |||||||
Eugene Youkilis
|
2013
|
$ | 85,118 | $ | — | $ | — | $ | — | $ | — | $ | 85,118 | |||||||||||||
President, Director
|
2012
|
$ | 15,983 | $ | — | $ | — |