Oncotelic Therapeutics, Inc. (Form: 8-K, Received: 09/03/2021 07:01:29)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

August 31, 2021

ONCOTELIC THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware

000-21990

13-3679168

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

29397 Agoura Road, Suite 107

Agoura Hills, CA 91301

(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code

(650) 635-7000

Not applicable.

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of class		Trading Symbols		Name of each exchange on which registered
N/A		OTLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01

Entry into a Material Definitive Agreement.

On August 31, 2021, Oncotelic Therapeutics, Inc. (the “Company”) entered into a binding term sheet (“Term Sheet”) with Autotelic, Inc. (“Autotelic”) whereby the Company will license AL-101, intranasal apomorphine, from Autotelic (the “License”). Pursuant to the Term Sheet, the Company will make payments to Autotelic, upon the achievement of certain financial and regulatory milestones in the development of AL-101, as shown below. The Term Sheet does not contemplate any upfront payment and all payments are planned to be made upon the achievement of the milestones. In addition, the payments of the milestones are for 3 indications of AL-101, namely erectile dysfunction (“ED”), Parkinson’s Disease (“PD”) and female sexual dysfunction (“FSD”).

Milestones	Transaction Value		Actions

Tranche 1	$	1,000,000	Upon the earlier to occur of: (i) the Company receiving an investment of at least $20 million, and (ii) the uplisting of the Company’s common stock to any NASDAQ market or the New York Stock Exchange.

Tranche 2	$	2,000,000	Upon approval by the United States Food and Drug Administration of the Company’s 505(b)2 application for purposes of treating PD.

Tranche 3	$	2,000,000	Upon first patient in (“FPI”) for any clinical trial supporting the use of AL-101 for the treatment of PD or ED.

Tranche 4	$	2,500,000	Upon FPI for phase 2 clinical trials supporting the use of AL-101 to treat FSD.

Tranche 5	$	2,500,000	Upon FPI for phase 3 clinical trials supporting the use of AL-101 to treat FSD

Tranche 6	$	10,000,000	Upon Marketing approval for the use of AL-101 to treat PD.

Tranche 7	$	10,000,000	Upon Marketing approval for the use of AL-101 to treat ED.

Tranche 8	$	10,000,000	Upon Marketing approval for the use of AL-101 to treat FSD

Tranche 9	$	10,000,000	Upon the earlier of: (i) the Company entering into a licensing agreement with a third party for the use of AL-101 for the treatment of PD, ED or FSD with an aggregate licensing value of at least $50 million; and (ii) the Company’s gross revenue derived from sales of AL-101 for the treatment of PD, ED or FSD reaches at least $50.0 million.

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The Company will also pay royalties to Autotelic, equal to an amount yet to be agreed upon, but such amount to be not less than 15% of the Company’s net sales of AL-101 once developed.

The Term Sheet is subject to certain conditions including, without limitation, the negotiation and approval of definitive documentation regarding the License (the “Definitive Agreement”), the Board of Directors of the Company approving the Definitive Agreement, completion of due diligence, and receipt of any necessary governmental approvals, if required. The Term Sheet is subject to termination within 30 days of execution, unless extended by mutual agreement of the Company and Autotelic.

The Company’s Chief Executive Officer, Mr. Vuong Trieu, is the majority owner of Autotelic.

The foregoing summary of the terms of the Term Sheet do not purport to be complete and is qualified in its entirety by reference to the Term Sheet, a copy of which is filed as Exhibit 10.1 to this Report and is incorporated herein by reference.

Item 7.01

Regulation FD Disclosure.

On September 1, 2021, the Company issued a press release announcing the entry into the Term Sheet with Autotelic. A copy of the press release is attached hereto as Exhibit 99.1.

Disclaimer.

The information in Section 7.01 of this Current Report on Form 8-K, including the information set forth in Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall Exhibit 99.1 filed herewith be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description	Incorporation by reference

10.1	Term Sheet between Oncotelic Therapeutics, Inc. and Autotelic, Inc., dated August 31, 2021	Filed herewith.
99.1	Press Release dated September 1, 2021	Filed herewith

104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Oncotelic Therapeutics, Inc.

Date: September 3, 2021		/s/ Vuong Trieu
	By:	Vuong Trieu
		Chief Executive Officer

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Exhibit 10.1

Oncotelic Therapeutics, Inc.

29397 Agoura Rd., Suite 107 Agoura Hills, CA 91301

STRICTLY CONFIDENTIAL

Oncotelic Therapeutics, Inc (Oncotelic) and Autotelic Inc. (Autotelic) Term Sheet

The following term sheet (“Term Sheet”) sets forth a summary of the basic terms of a contemplated licensing transaction (“Transaction”), wherein Oncotelic, a Delaware Corporation with its shares traded on OTCQB (OTLC) and Autotelic, a California Corporation, would enter into a licensing transaction, with an anticipated closing date no later than the 4^th quarter of 2021. This Term Sheet is binding on the parties and shall survive termination as defined.

Consideration	Autotelic will out-license its product comprising of the intra-nasal drug and delivery system related to, but not limited to, nasal apomorphine (the “Product”) to Oncotelic. Oncotelic shall in-license the Product for the indications and for the consideration as shown in Schedule A below.

Structure	Subject to U.S. tax laws and other considerations, the Transaction will be structured as a standard licensing transaction.

Conditions to Closing	Principal conditions to the consummation of the Transaction will include, among others:

	1.	Completion of a due diligence review to the satisfaction of both parties
	2.	No material adverse change at Autotelic or Oncotelic.
	3.	Approval of the licensing transaction by the respective Board of Directors of Oncotelic and of Autotelic prior to signature of the Definitive Agreement(s).
	4.	Receipt of all necessary approvals, including governmental consents, if any.

Covenants	Each party shall continue to maintain and operate its business in the ordinary course prior to closing.

Publicity	By joint approvals from both parties.

Execution and exclusivity	The parties agree to not take more than five (5) days for the execution of this Term Sheet and 30 days from signing the term sheet to enter into a definitive agreement.

ONCOTELIC / OTLC Term Sheet -- Strictly Confidential

Intellectual Property	Autotelic owns, or has the right to use under license, all Intellectual Property Rights necessary for the operation of its business as conducted prior to the execution of the Term Sheet.

Representations Warranties	Absence of Litigation by either Party.

Confidentiality	The Parties signed a mutual non-disclosure agreement on August 12, 2021.

Termination	This Term Sheet will terminate if and when (a) the Definitive Agreement(s) are signed (b) mutual agreement of the parties to terminate any further discussions or (b) the date that is 30 calendar days after the date of this Term Sheet unless the parties mutually agree to extend.

Governing Law	California, without regard to conflict of laws principles.

[Remainder of Page Intentionally Left Blank; Next Page is Signature Page]

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ONCOTELIC / OTLC Term Sheet -- Strictly Confidential

[SIGNATURE PAGE TO TERM SHEET]

Autotelic Inc.		Oncotelic Therapeutics, Inc.

By:	/s/ Chulho Park	By:	/s/ Saran Saund
Name:	Chulho Park PhD	Name:	Saran Saund
Title:	Chief Scientific Officer	Title:	Chief Business Officer
Date:	08/31/2021	Date:	08/31/2021

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ONCOTELIC / OTLC Term Sheet -- Strictly Confidential

EXHIBIT A

Schedule of Oncotelic Payments by Milestone to Autotelic

Milestones	Transaction Value		Actions

Tranche 1	$	1,000,000	Upon fund raising of $20M or more by Oncotelic or uplisting to Nasdaq/NYSE.

Tranche 2	$	2,000,000	Upon FDA acceptance of 505(b)2 pathway for Parkinson’s Disease (PD)

Tranche 3	$	2,000,000	Upon first patient in (FPI) for any clinical trial supporting PD or erectile dysfunction (ED)

Tranche 4	$	2,500,000	Upon first patient in (FPI) for phase 2 clinical trial supporting female sexual dysfunction (FSD)

Tranche 5	$	2,500,000	Upon first patient in (FPI) for phase 3 clinical trial supporting FSD

Tranche 6	$	10,000,000	Upon Marketing approval for PD

Tranche 7	$	10,000,000	Upon Marketing approval for ED

Tranche 8	$	10,000,000	Upon Marketing approval for FSD

Tranche 9	$	10,000,000	When either or all of the assets for PD, ED or FSD achieves licensing deal of value of $50M or over OR when either or all of the assets for PD, ED or FSD achieves gross revenues of $50M or over.

In Addition, Royalties on net sales at a rate to be defined in the Definitive Agreement(s) but not less than 15%.

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ONCOTELIC / OTLC Term Sheet -- Strictly Confidential

EXHIBIT B

Intellectual Property Listing

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Exhibit 99.1

Oncotelic to Acquire LATE-STAGE drug candidate for Parkinson Disease, Erectile Dysfunction, and Female Sexual Dysfunction.

AGOURA HILLS, Calif., September 1, 2021 - Oncotelic Therapeutics, Inc. (“Oncotelic” or the “Company”) (OTCQB:OTLC), executed a binding term sheet with Autotelic Inc. to license AL-101 (intranasal apomorphine). Oncotelic intends to develop AL-101 via fast-to-market 505(b)2 regulatory pathway for Parkinson Disease (“PD”) and Erectile Dysfunction (“ED”), especially phosphodiesterase 5 (“PDE5”) non-responders. AL-101 will also be developed as a new drug against Female Sexual Dysfunction (“FSD”), including Hypoactive Sexual Desire Disorder (“HSDD”). AL-101 has a favorable safety and efficacy profile and is phase 3 ready with six clinical trials completed and over 200 patients (2,200 doses) treated.

“The acquisition of AL-101, expands Oncotelic’s product portfolio to the fast to market 505(b)2 regulatory pathway. AL-101 has many of the same properties necessary to replicate the successes I had with the 505(b)2 route for Abraxane at Abraxis and Cynviloq at Igdrasol. I am impressed with its marked improvement on quality of life for PD patients and look forward to working with pts and healthcare professionals in PD.” said Dr. Vuong Trieu, CEO and Chairman of Oncotelic.

About Parkinson Disease (PD):

Over 60,000 new patients being diagnosed with PD in the United States and currently there are over 1 million patients in the US and expected to increase to over 1.2 million by 2030. In addition, approximately 10 million suffer from this disease globally. https://www.parkinson.org/Understanding-Parkinsons/Statistics.

On May 2020, KYNMOBI™ (apomorphine HCI) sublingual film developed by Sunovion Pharmaceuticals was approved through the 505(b)2 pathway for acute, intermittent treatment of OFF episodes in patients with Parkinson’s disease (PD) dissolves under the tongue. Per Suniovion Pharmaceuticals, Kynmobi is expected to generate $219 million annually. https://www.pharmaceutical-technology.com/comment/sunovion-pharmaceuticals-kynmobi-parkinsons/

About Erectile Dysfunction (ED)

ED is the most prevalent male sexual disorder globally. The market will continue to grow due to increased vascular disorders followed by the aging population across the world. Furthermore, rising psychological problems, followed by chronic diseases like diabetes, alcohol, and smoking habits are also considered as one of the major driving factors for the growth of the market. Oral PDE5 inhibitors, especially Viagra, Cialis, and Levitra, dominated the market with around US$3.8 billion of revenue in 2020.

The percentages of men affected by ED are as follows: 14.3-70% of men aged ≥60 years, 6.7-48% of men aged ≥70 years, and 38% of men aged ≥80 years (Geerkens MJM et al. (2019). Eur Urol Focus. pii: S2405-4569(19)30079-3). However, with the increasing administration of PDE5 inhibitors in clinical practice, it was found that approximately 30-35% of ED patients are treatment failures (McMahon CN et al. (2006). BMJ, 332: 589-92). AL-101 is designed to target treatment failure ED patients who do not respond to PDE5 inhibitors.

About Female Sexual Dysfunction (FSD):

Female sexual dysfunction is a prevalent problem, afflicting approximately 40% of women and there are few treatment options. FSD is more typical as women age and is a progressive and widespread condition. (Allahdadi, KJ et al. (2009) Cardiovascular & hematological agents in medicinal chemistry, 7(4), 260–269).

HSDD is characterized by a low sexual desire, that causes marked distress or interpersonal difficulty, and is not due to a co-existing medical or psychiatric condition, problems within the relationship or the effects of a medication or other drug substance. HSDD affects approximately 5.8 million U.S. premenopausal women (1 in 10 premenopausal women). Almost 98%, approximately 5.7 million of affected premenopausal women are not on any therapy for HSDD, either due to lack of education or lack of therapies available. One in 10 premenopausal women have low desire with associated distress.

There is no available drug for the treatment of FSD. In June 2019, the U.S. Food and Drug Administration approved Vyleesi (bremelanotide) to treat acquired, generalized hypoactive sexual desire disorder in premenopausal women. This is the only available drug treatment. Vyleesi has essentially replaced the only other drug for HSDD - however, it has a long list of drug-drug interactions, including commonly used antidepressants, such as fluoxetine and sertraline. In addition, it has a black box warning regarding its use with alcohol, a combination that has been associated with hypotension and syncopal episodes. Therefore there is an urgent need for effective therapy against FSD and HSDD.

About Oncotelic Therapeutics

Oncotelic Therapeutics, Inc. (f/k/a Mateon Therapeutics, Inc.) (“Oncotelic”), was formed in the State of New York in 1988 as OXiGENE, Inc., was reincorporated in the State of Delaware in 1992, and changed its name to Mateon Therapeutics, Inc. in 2016, and Oncotelic Therapeutics, Inc. in November 2020.

Oncotelic was created by the 2019 merger with Oncotelic Inc., which became a wholly owned subsidiary of Mateon, thereby creating an immuno-oncology company dedicated to the development of first in class RNA therapeutics, as well as small molecule drugs against cancer and infectious diseases. OT-101, the lead immuno-oncology drug candidate of Oncotelic, is a first-in-class anti-TGF-β RNA therapeutic that exhibited single agent activity in some relapsed/refractory cancer patients in clinical trial settings. Oncotelic is seeking to leverage its deep expertise in oncology drug development to improve treatment outcomes and survival of cancer patients with a special emphasis on rare pediatric cancers. Oncotelic also has rare pediatric designation for DIPG (OT-101), melanoma (CA4P), and AML (OXi 4503). The Company acquired PointR Data Inc. (“PointR”) in November 2019. The PointR Acquisition was intended to create a publicly traded artificial intelligence driven immuno-oncology company with a robust pipeline of first in class TGF-β immunotherapies for late-stage cancers such as gliomas, pancreatic cancer and melanoma.

For more information, please visit www.oncotelic.com.

Oncotelic’s Cautionary Note on Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this communication regarding strategy, future operations, future financial position, prospects, plans and objectives of management are forward-looking statements. Words such as “may”, “expect”, “anticipate” “hope”, “vision”, “optimism”, “design”, “exciting”, “promising”, “will”, “conviction”, “estimate,” “intend,” “believe”, “quest for a cure of cancer”, “innovation-driven”, “paradigm-shift”, “high scientific merit”, “impact potential” and similar expressions are intended to identify forward-looking statements. Forward looking statements contained in this press release include, but are not limited to, statements about future plans, the progress, timing, clinical development, scope and success of future clinical trials, the reporting of clinical data for the company’s product candidates and the potential use of the company’s product candidates to treat various cancer indications. Each of these forward-looking statements involves risks and uncertainties, and actual results may differ materially from these forward-looking statements. Many factors may cause differences between current expectations and actual results, including unexpected safety or efficacy data observed during preclinical or clinical studies, clinical trial site activation or enrollment rates that are lower than expected, changes in expected or existing competition, changes in the regulatory environment, failure of collaborators to support or advance collaborations or product candidates and unexpected litigation or other disputes. These risks are not exhaustive, the company faces known and unknown risks, including the risk factors described in the Company’s annual report on Form 10-K filed with the SEC on May 20, 2020 and in the company’s other periodic filings. Forward-looking statements are based on expectations and assumptions as of the date of this press release. Except as required by law, the company does not assume any obligation to update forward-looking statements contained herein to reflect any change in expectations, whether as a result of new information future events, or otherwise.

Contact Information:

For Oncotelic Therapeutics, Inc.:

Amit Shah

ashah@oncotelic.com