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What changed in PharmaCyte Biotech, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PharmaCyte Biotech, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+752 added−580 removedSource: 10-K (2024-08-13) vs 10-K (2023-07-31)

Top changes in PharmaCyte Biotech, Inc.'s 2024 10-K

752 paragraphs added · 580 removed · 331 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

129 edited+240 added−161 removed64 unchanged
Biggest changeThe steps required before a new drug or biologic may be marketed in the U.S. generally include: · completion of preclinical studies and formulation studies in compliance with the FDA’s Good Laboratory Practices (“GLP”), protocols and regulations; · satisfactory completion of an FDA inspection of the manufacturing facilities at which the investigational product candidate is produced to assess compliance with cGMP and proof that the facilities, methods and controls are adequate; · submission to the FDA of an IND to support human clinical testing in the U.S.; · approval by an IRB at each clinical site before a trial may be initiated at that site; · performance of adequate and well-controlled clinical trials in accordance with federal regulations and with Good Clinical Practices (“GCP”) to establish the safety and efficacy of the investigational product candidate for each target indication; · Submission to the FDA of a New Drug Application (“NDA”) or a drug or Biologics License Application (“BLA”) for a biologic such as the therapies we are developing; · satisfactory completion of an FDA Advisory Committee review, if applicable; and · FDA review and approval of the NDA or BLA.
Biggest changeThe steps required before a new drug or biologic may be marketed in the U.S. generally include: · completion of preclinical studies and formulation studies in compliance with the FDA’s Good Laboratory Practices (“GLP”), protocols and regulations; · submission to the FDA of an IND to support human clinical testing in the U.S.; · approval by an IRB at each clinical site before a trial may be initiated at that site; · performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices (“GCP”) and other clinical-trial related regulations to evaluate the safety and efficacy of the investigational product candidate for each target indication; · submission to the FDA of a New Drug Application (“NDA”) for a drug or Biologics License Application (“BLA”) for a biologic for marketing approval, including payment of application user fees · satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the investigational product candidate is produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate to preserve the product candidate’s identity, strength, quality and purity; · potential FDA audit of the clinical trial sites to assure compliance with GCP and the integrity of the clinical data submitted in support of the NDA or BLA; · satisfactory completion of an FDA Advisory Committee review, if applicable; and · FDA review and approval of the NDA or BLA.
The downward pressure on healthcare costs in general, particularly prescription drugs, has become more intense. The marketability of any product for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement.
The downward pressure on healthcare costs in general, and particularly on prescription drugs, has become more intense. The marketability of any product for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement.
Although there are several statutory exemptions and regulatory safe harbors protecting some business arrangements from prosecution, the exemptions and safe harbors are drawn narrowly and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exemption or safe harbor.
Although there are several statutory exemptions and regulatory safe harbors protecting some business arrangements from prosecution, the exemptions and safe harbors are drawn narrowly and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exemption or safe harbor.
The accelerated approval pathway is most often used in settings in which the course of a disease is long, and an extended period of time is required to measure the intended clinical benefit of a drug, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly.
The accelerated approval pathway is most often used in settings in which the course of a disease is long, and an extended period of time is required to measure the intended clinical benefit of a drug or biologic, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly.
In order to address the clinical hold, the FDA has requested that we: · Provide additional sequencing data and genetic stability studies; · Conduct a stability study on our final formulated product candidate as well as the cells from our Master Cell Bank (“MCB”); · Evaluate the compatibility of the delivery devices (the prefilled syringe and the microcatheter used to implant the CypCaps™) with our product candidate for pancreatic cancer; · Provide additional detailed description of the manufacturing process of our product candidate for pancreatic cancer; · Provide additional product release specifications for our encapsulated cells; · Demonstrate comparability between the 1st and 2nd generation of our product candidate for pancreatic cancer and ensure adequate and consistent product performance and safety between the two generations; · Conduct a biocompatibility assessment using the capsules material; · Address specified insufficiencies in the Chemistry, Manufacturing and Controls information in the cross-referenced Drug Master File; · Conduct an additional nonclinical study in a large animal (such as a pig) to assess the safety, activity, and distribution of the product candidate for pancreatic cancer; and · Revise the Investigators Brochure to include any additional preclinical studies conducted in response to the clinical hold and remove any statements not supported by the data we generated. 2 The FDA also requested that we address the following issues as an amendment to our IND: · Provide a Certificate of Analysis for pc3/2B1 plasmid that includes tests for assessing purity, safety, and potency; · Perform qualification studies for the drug substance filling step to ensure that the product candidate for pancreatic cancer remains sterile and stable during the filling process; · Submit an updated batch analysis for the product candidate for the specific lot that will be used for manufacturing all future product candidates; · Provide additional details for the methodology for the Resorufin (CYP2B1) potency and the PrestoBlue cell metabolic assays; · Provide a few examples of common microcatheters that fit the specifications in our Angiography Procedure Manual; · Clarify the language in our Pharmacy Manual regarding proper use of the syringe fill with the product candidate for pancreatic cancer; and · Provide a discussion with data for trial of the potential for cellular and humoral immune reactivity against the heterologous rat CYP2B1 protein and potential for induction of autoimmune-mediated toxicities in our study population.
In order to address the clinical hold, the FDA has requested that we: · Provide additional sequencing data and genetic stability studies; · Conduct a stability study on our final formulated product candidate as well as the cells from our Master Cell Bank (“MCB”); · Evaluate the compatibility of the delivery devices (the prefilled syringe and the microcatheter used to implant the CypCaps™) with our product candidate for pancreatic cancer; · Provide additional detailed description of the manufacturing process of our product candidate for pancreatic cancer; · Provide additional product release specifications for our encapsulated cells; · Demonstrate comparability between the 1st and 2nd generation of our product candidate for pancreatic cancer and ensure adequate and consistent product performance and safety between the two generations; · Conduct a biocompatibility assessment using the capsules material; · Address specified insufficiencies in the Chemistry, Manufacturing and Controls information in the cross-referenced Drug Master File; · Conduct an additional nonclinical study in animals to assess the safety, activity, and distribution of the product candidate for pancreatic cancer; and · Revise the Investigators Brochure to include any additional preclinical studies conducted in response to the clinical hold and remove any statements not supported by the data we generated. 2 The FDA also requested that we address the following issues as an amendment to our IND: · Provide a Certificate of Analysis for pc3/2B1 plasmid that includes tests for assessing purity, safety, and potency; · Perform qualification studies for the drug substance filling step to ensure that the product candidate for pancreatic cancer remains sterile and stable during the filling process; · Submit an updated batch analysis for the product candidate for the specific lot that will be used for manufacturing all future product candidates; · Provide additional details for the methodology for the Resorufin (CYP2B1) potency and the PrestoBlue cell metabolic assays; · Provide a few examples of common microcatheters that fit the specifications in our Angiography Procedure Manual; · Clarify the language in our Pharmacy Manual regarding proper use of the syringe fill with the product candidate for pancreatic cancer; and · Provide a discussion with data for trial of the potential for cellular and humoral immune reactivity against the heterologous rat CYP2B1 protein and potential for induction of autoimmune-mediated toxicities in our study population.
The Manufacturing Framework Agreement requires us to pay Austrianova a one-time manufacturing setup fee in the amount of $647,000, of which 50% is required to be paid on the effective date of the Manufacturing Framework Agreement and 50% is required to be paid three months later. We have paid the full amount of the manufacturing setup fee.
The Manufacturing Framework Agreement required us to pay Austrianova a one-time manufacturing setup fee in the amount of $647,000, of which 50% is required to be paid on the effective date of the Manufacturing Framework Agreement and 50% is required to be paid three months later. We have paid the full amount of the manufacturing setup fee.
Patents, Intellectual Property and Trade Secrets Intellectual property and patent protection are of paramount importance to our business, as are the trade secrets and other strategies we have employed with Austrianova to protect the proprietary Cell-in-a-Box® technology.
Intellectual Property and Trade Secrets Intellectual property and patent protection are of paramount importance to our business, as are the trade secrets and other strategies we have employed with Austrianova to protect the proprietary Cell-in-a-Box® technology.
Our telephone number is (917) 595-2850. We maintain a website at www.pharmacyte.com to which we post copies of our press releases as well as additional information about us. Our filings with the SEC are available free of charge through our website as soon as reasonably practicable after being electronically filed with or furnished to the SEC.
Our telephone number is (917) 595-2850. We maintain a website at www.pharmacyte.com to which we post copies of our press releases as well as additional information about us. Our filings with the Commission are available free of charge through our website as soon as reasonably practicable after being electronically filed with or furnished to the Commission.
For more information, see Item 1A. “Risk Factors.” 15 U.S. Government Regulation The FDA is the main regulatory body that controls pharmaceuticals and biologics in the U.S. Its regulatory authority is based in the FDCA and the Public Health Service Act. Pharmaceutical products and biologics are also subject to other federal, state and local statutes and regulations.
For more information, see Item 1A. “Risk Factors.” 9 U.S. Government Regulation The FDA is the main regulatory body that controls pharmaceuticals and biologics in the U.S. Its regulatory authority is based in the FDCA and the Public Health Service Act. Pharmaceutical products and biologics are also subject to other federal, state and local statutes and regulations.
The FDA may review sections of the NDA or BLA for a fast-track product on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA or BLA, the FDA agrees to accept sections of the NDA or BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA or BLA.
In addition, the FDA may review sections of the NDA or BLA for a fast-track product on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA or BLA, the FDA agrees to accept sections of the NDA or BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA or BLA.
A failure to comply with any requirements during the product development, approval, or post-approval periods, may lead to administrative or judicial sanctions.
A failure to comply with any applicable requirements during the product development, approval, or post-approval periods, may lead to administrative or judicial sanctions.
The application includes all relevant data available from pertinent preclinical studies and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing and controls, as well as the proposed labeling for the product, among other things.
The application includes all relevant data available from pertinent preclinical studies and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing and controls, as well as proposed labeling, among other things.
This authorization is required before interstate shipping and administration can commence of any new drug or biologic product destined for use in humans in the U.S. A 30-day waiting period after the submission of each IND is required before commencement of clinical testing in humans.
This authorization is required before interstate shipping and administration can commence for any drug or biologic product candidate destined for use in humans in the U.S. A 30-day waiting period after the submission of each IND is required before commencement of clinical testing in humans.
A sponsor may be able to request a special protocol assessment (“SPA”), the purpose of which is to reach agreement with the FDA on the Phase 3 clinical trial protocol design and analysis that will form the primary basis of an efficacy claim.
A sponsor may be able to request a special protocol assessment (“SPA”), the purpose of which is to reach agreement with the FDA on the Phase 3 trial protocol design, clinical endpoints and statistical analysis that will form the primary basis of an efficacy claim.
In a laboratory setting, this proprietary live cell encapsulation technology has been shown to create a micro-environment in which encapsulated cells survive and flourish. They are protected from environmental challenges, such as the sheer forces associated with bioreactors and passage through catheters and needles, which we believe enables greater cell growth and production of the active molecules.
In a laboratory setting, this proprietary live cell encapsulation technology has been shown to create a micro-environment in which encapsulated cells survive and flourish. Encapsulated cells are protected from environmental challenges, such as the shear forces associated with bioreactors and passage through catheters and needles, which we believe enables greater cell growth and production of the active molecules.
If a written agreement is reached, it will be documented and made part of the record.
If a written agreement is reached, it will be documented and made part of the administrative record.
The restructuring resulted in us focusing our efforts developing a novel, effective and safe way to treat cancer and diabetes. In January 2015, we changed our name from Nuvilex, Inc. to PharmaCyte Biotech, Inc. to reflect the nature of our current business. Our corporate headquarters are located at 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169.
The restructuring resulted in us focusing our efforts to develop a novel, effective and safe way to treat cancer. In January 2015, we changed our name from Nuvilex, Inc. to PharmaCyte Biotech, Inc. to reflect the nature of our current business. Our corporate headquarters are located at 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169.
On January 6, 2015, we changed our name from “Nuvilex, Inc.” to “PharmaCyte Biotech, Inc.” to reflect the nature of our business. We are a biotechnology company focused on developing and preparing to commercialize cellular therapies for cancer, diabetes, and malignant ascites using our live cell encapsulation technology. This resulted from entering into the following agreements.
On January 6, 2015, we changed our name from “Nuvilex, Inc.” to “PharmaCyte Biotech, Inc.” to reflect the nature of our business. We are a biotechnology company focused on developing and preparing to commercialize cellular therapies for cancer using our live cell encapsulation technology. This resulted from entering into the following agreements.
If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to penalties.
If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to penalties or other enforcement actions.
The process of obtaining regulatory marketing approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations will require the expenditure of substantial time and financial resources and may not be successful.
The process of obtaining regulatory marketing approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations will require the expenditure of substantial time and financial resources and may not be successful.
Information contained in our website is not a part of, nor incorporated by reference into, this Report or our other filings with the SEC, and should not be relied upon.
Information contained in our website is not a part of, nor incorporated by reference into, this Report or our other filings with the Commission, and should not be relied upon.
The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a drug.
The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate long-term clinical benefit of a drug or biologic.
HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons. It also gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing these actions.
HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and individuals. It also gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing these actions.
Moreover, under the provisions of the Food and Drug Administration Safety and Innovation Act, or FDASIA, passed in July 2012, a sponsor can request designation of a product candidate as a “breakthrough therapy.” A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
Finally, under the provisions of the Food and Drug Administration Safety and Innovation Act, or FDASIA, enacted in July 2012, a sponsor can request designation of a product candidate as a “breakthrough therapy.” A breakthrough therapy is defined as a drug or biologic that is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug or biologic may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
ITEM 1. BUSINESS. We are a biotechnology company focused on developing cellular therapies for cancer, diabetes, and malignant ascites based upon a proprietary cellulose-based live cell encapsulation technology known as “Cell-in-a-Box®.” The Cell-in-a-Box® technology is intended to be used as a platform upon which therapies for several types of cancer, including LAPC, will be developed.
ITEM 1. BUSINESS. We are a biotechnology company focused on developing cellular therapies for cancer based upon a proprietary cellulose-based live cell encapsulation technology known as “Cell-in-a-Box®.” The Cell-in-a-Box® technology is intended to be used as a platform upon which therapies for several types of cancer, including LAPC, will be developed.
The Board has curtailed spending on our programs, including pre-clinical and clinical activities, until the review by the Business Review Committee and the Board is complete and the Board has determined the actions and plans to be implemented. The Business Review Committee’s recommendations will include potentially seeking a new framework for our relationship with SG Austria and its subsidiaries.
The Board has reduced spending on our programs, including pre-clinical and clinical activities, until the review by the Scientific Committee and the Board is complete and the Board has determined the actions and plans to be implemented. The Scientific Committee’s recommendations will include potentially seeking a new framework for our relationship with SG Austria and its subsidiaries.
These sanctions could include the imposition by the FDA or by an Institutional Review Board (“IRB”) of a hold on clinical trials, refusal to approve pending marketing applications or supplements, withdrawal of approval, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution.
These sanctions could include, among other things, the imposition by the FDA or by an Institutional Review Board (“IRB”) of a hold on clinical trials, FDA refusal to approve pending marketing applications or supplements, withdrawal of previously granted approval, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution.
We believe there will be no therapy comparable to our Cell-in-a-Box ® plus low dose of ifosfamide combination therapy when it is used in these patients. 8 We face intense competition in the field of treating pancreatic cancer.
For these patients, there is currently no effective therapy. We believe there will be no therapy comparable to our Cell-in-a-Box ® plus low dose of ifosfamide combination therapy when it is used in these patients. We face intense competition in the field of treating pancreatic cancer.
Moreover, the intent standard under the Anti-Kickback Statute was amended by the Affordable Care Act to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it to have committed a violation.
Moreover, the intent standard under the Anti-Kickback Statute was amended by the ACA to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it to have committed a violation.
For example: · Cancerous diseases may be treated by placing encapsulated drug-converting cells that convert a chemotherapy prodrug near the cancerous tumor; · Confinement and maintenance of therapeutic cells that activate a chemotherapy prodrug may be placed at the site of implantation in a blood vessel near the cancerous tumor results in “targeted chemotherapy”; · Increased efficacy of a chemotherapy prodrug may allow for lower doses of the prodrug to be given to a patient, significantly reducing or even eliminating side effects from the chemotherapy; · Encapsulating genetically modified live cells has the potential for the treatment of systemic diseases of various types, including diabetes; · Multi-layered trade secret protection and marketing exclusivity for our technology exists and is being expanded; · Cell-in-a-Box ® capsules can prevent immune system attack of functional cells inside them without the need for immunosuppressive drug therapy; and · Promising data with the Cell-in-a-Box ® technology and the cells used with our technology from animal and initial human clinical trials.
For example: · Cancerous diseases may be treated by placing encapsulated drug-converting cells that convert a chemotherapy prodrug near the cancerous tumor; · Confinement and maintenance of therapeutic cells that activate a chemotherapy prodrug may be placed at the site of implantation in a blood vessel near the cancerous tumor results in “targeted chemotherapy”; · Increased efficacy of a chemotherapy prodrug may allow for lower doses of the prodrug to be given to a patient, significantly reducing or even eliminating side effects from the chemotherapy; · Multi-layered trade secret protection and marketing exclusivity for our technology exists and is being expanded; · Cell-in-a-Box ® capsules can prevent immune system attack of functional cells inside them without the need for immunosuppressive drug therapy; and · Promising data with the Cell-in-a-Box ® technology and the cells used with our technology from animal and initial human clinical trials.
The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on IMM, and that is reasonably likely to predict an effect on IMM or other clinical benefit, considering the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
The FDA may also grant accelerated approval for such a drug or biologic when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality(“IMM”) and that is reasonably likely to predict an effect on IMM or other clinical benefit, considering the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
The timepoints were 3, 6, 9, 12, 18 and 24 months of our product candidate for pancreatic cancer being stored frozen at -80C. These studies included container closure integrity testing for certain timepoints. · Additional Studies Requested by the FDA .
We have successfully completed the required product stability studies. The timepoints were 3, 6, 9, 12, 18 and 24 months of our product candidate for pancreatic cancer being stored frozen at -80C. These studies included container closure integrity testing for certain timepoints. · Additional Studies Requested by the FDA .
The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, to induce or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare program.
The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order, or the referral to another for the furnishing or arranging for the furnishing of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare program.
A payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. 23 Different pricing and reimbursement schemes exist in other countries.
A payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.
The Third Addendum also requires us to make future royalty and milestone payments as follows: · Two percent royalty on all gross sales received by us or our affiliates; · Ten percent royalty on gross revenues received by us or our affiliates from a sublicense or right to use the patents or the licenses granted by us or our affiliates; · Milestone payments of $100,000 within 30 days after enrollment of the first human patient in the first clinical trial for each product; $300,000 within 30 days after enrollment of the first human patient in the first Phase 3 clinical trial for each product; and $800,000 within 60 days after having a NDA or a BLA approved by the FDA or a MAA approved by the EMA in Europe, or its equivalent based on the country in which it is accepted for each product; and · Milestone payments of $50,000 due 30 days after enrollment of the first veterinary patient in the first trial for each product and $300,000 due 60 days after having a BLA, a NDA or a MAA or its equivalent approved based on the country in which it is accepted for each veterinary product.
The fees under the Manufacturing Framework Agreement are subject to annual increases according to the annual inflation rate in the country in which the encapsulated cell products are manufactured. 7 The Third Addendum also requires us to make future royalty and milestone payments as follows: · Two percent royalty on all gross sales received by us or our affiliates; · Ten percent royalty on gross revenues received by us or our affiliates from a sublicense or right to use the patents or the licenses granted by us or our affiliates; · Milestone payments of $100,000 within 30 days after enrollment of the first human patient in the first clinical trial for each product; $300,000 within 30 days after enrollment of the first human patient in the first Phase 3 clinical trial for each product; and $800,000 within 60 days after having a NDA or a BLA approved by the FDA or a MAA approved by the EMA in Europe, or its equivalent based on the country in which it is accepted for each product; and · Milestone payments of $50,000 due 30 days after enrollment of the first veterinary patient in the first trial for each product and $300,000 due 60 days after having a BLA, a NDA or a MAA or its equivalent approved based on the country in which it is accepted for each veterinary product.
We license technology and trademarks relating to three areas: (i) live cell encapsulation with cells that express cytochrome P450 where the capsule is permeable to prodrug molecules and the cells are retained within the capsules; (ii) treatment of solid cancerous tumors and (ii) encapsulation of cells for producing retroviral particles for gene therapy.
We license technology and trademarks relating to two areas: (i) live cell encapsulation with cells that express cytochrome P450 where the capsule is permeable to prodrug molecules and the cells are retained within the capsules and (ii) treatment of solid cancerous tumors.
The federal Civil Monetary Penalties Law imposes penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent. 24 The federal False Claims Act prohibits any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government.
The federal Civil Monetary Penalties Law imposes fines against any person or entity that, among other things, is determined to have knowingly presented, or caused to be presented, a claim to a federal healthcare program that the person knows, or should know, is for an item or service that was not provided as claimed or is false or fraudulent. 29 The federal civil False Claims Act (“FCA”) prohibits, among other things, any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to, or approval by, the federal government, knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government, or avoiding, decreasing, or concealing an obligation to pay money to the federal government.
Accelerated Approval Pathway The FDA may grant accelerated approval to a drug for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination that the drug or biologic has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit.
Accelerated Approval Pathway The FDA may grant accelerated approval to a drug or biologic that is intended to treat a serious or life-threatening condition and that provides meaningful therapeutic advantage to patients over existing treatments based upon adequate and well-controlled clinical trials establishing that the drug or biologic has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit.
The FDA has 60 days from its receipt of an NDA or BLA to determine whether the application will be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review. After the NDA or BLA submission is accepted for filing, the FDA begins an in-depth review.
The FDA will initially review the NDA or BLA for completeness before it accepts the application for filing. The FDA has 60 days from its receipt of an NDA or BLA to determine whether the application will be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review.
We have long-lived assets, other than financial instruments, located in the following geographical areas: FY 2023 FY 2022 United States: $ 5,129,308 $ 5,129,308 All foreign countries, in total: $ 0 $ 0 We operate globally and are attempting to develop products in multiple countries.
We have long-lived assets, other than financial instruments, located in the following geographical areas: FY 2024 FY 2023 U.S.: $ 1,557,115 $ 5,129,308 All foreign countries, in total: $ 0 $ 0 We operate globally and are attempting to develop products in multiple countries.
Information related to the product, patient population, phase of investigation, study sites and investigator involved, and other aspects of the clinical trial are made public as part of the registration. A sponsor is also obligated to disclose the results of a clinical trial after completion.
Information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial. Sponsors are also obligated to disclose the results of their clinical trials after completion.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Advertising and Promotion The FDA and other federal regulatory agencies tightly regulate the marketing and promotion of drugs and biologics through, among other things, standards and regulations for direct-to-consumer advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities and promotional activities involving the internet. A product cannot be commercially promoted before it is approved.
Advertising and Promotion The FDA and other federal regulatory agencies tightly regulate the marketing and promotion of drugs and biologics through, among other things, standards and regulations for direct-to-consumer advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities and promotional activities involving the internet.
Having a SPA does not guarantee that a product candidate will receive FDA approval. 17 Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, detailed investigational product candidate information is submitted to the FDA in the form of an NDA or BLA to request regulatory approval for the product in the specified indication.
Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, detailed investigational product candidate information is submitted to the FDA in the form of an NDA or BLA to request regulatory approval for the product in the specified indication.
It is calculated as half of the testing phase (the time between the IND submission becoming effective and the NDA, BLA or premarket approval (“PMA”) submission) and all the review phase (the time between NDA, BLA or PMA submission and approval) up to a maximum extension of five years.
It is calculated as half of the period of time comprising the testing phase (the time between the IND becoming effective and the NDA or BLA submission date) plus all the FDA review phase (the time between NDA or BLA submission and approval dates), up to a maximum extension of five years.
In Europe and in the U.S., the 4-drug combination FOLFIRINOX has also found use as a first-line treatment for advanced pancreatic cancer.
This is the primary FDA-approved combination of drugs for treating advanced pancreatic cancer. In Europe and in the U.S., the 4-drug combination FOLFIRINOX has also found use as a first-line treatment for advanced pancreatic cancer.
In addition, the Affordable Care Act codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act, as discussed below.
In addition, the ACA codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute is grounds for the government or a whistleblower to assert that a claim for payment of items or services resulting from such violation constitutes a false or fraudulent claim for purposes of the federal False Claims Act, as discussed below.
The Third Addendum requires us to make the following payments for the purchased assets; these payments were timely made in full under the payment deadlines set forth in the Third Addendum: · A $60,000 payment due under the SG Austria APA; · A payment of Stamp Duty estimated to be $10,000-17,000 to the Singapore Government; · $500,000 to be used to pay off the existing debt of Bio Blue Bird; and · $1,000,000 to SG Austria. 10 Pursuant to the Third Addendum, we agreed to and have entered a manufacturing agreement with SG Austria for the manufacture of the pancreatic cancer clinical trial product to treat LAPC.
The Third Addendum required us to make the following payments for the purchased assets; these payments were timely made in full under the payment deadlines set forth in the Third Addendum: · A $60,000 payment due under the SG Austria APA; · A payment of Stamp Duty estimated to be $10,000-17,000 to the Singapore Government; · $500,000 to be used to pay off the existing debt of Bio Blue Bird; and · $1,000,000 to SG Austria.
On October 1, 2020, we received notice from the FDA that it had placed our IND on clinical hold. On October 30, 2020, the FDA sent us a letter setting forth the reasons for the clinical hold and providing specific guidance on what we must do to have the clinical hold lifted.
On October 30, 2020, the FDA sent us a letter setting forth the reasons for the clinical hold and providing specific guidance on what we must do to have the clinical hold lifted.
These include criminal and civil monetary penalties, damages, fines, imprisonment, exclusion from participation in government programs, injunctions, recall or seizure of products, total or partial suspension of production, denial or withdrawal of pre-marketing product approvals, private “qui tam” actions brought by individual whistleblowers in the name of the government or refusal to allow us to enter supply contracts and the curtailment or restructuring of our operations.
These include criminal and civil monetary penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government healthcare programs, corporate integrity agreements, suspension and debarment from government contracts and non-procurement transactions such as grants, injunctions, recall or seizure of products, total or partial suspension of production, denial or withdrawal of pre-marketing product approvals, private “qui tam” actions brought by individual whistleblowers in the name of the government or the curtailment or restructuring of our operations.
The analysis confirmed that the cytochrome P450 2B1 and the surrounding sequence has remained stable with no changes detected at the DNA level. · Biocompatibility Studies . We have been involved with 10 biocompatibility studies requested by the FDA, eight of which have been completed successfully. The remaining studies are underway or about to start.
The analysis confirmed that the cytochrome P450 2B1 and the surrounding sequence has remained stable with no changes detected at the DNA level. · Biocompatibility Studies . We have been involved with 10 biocompatibility studies requested by the FDA, eight of which have been completed successfully. To enable the biocompatibility studies to be performed, we had Austrianova Singapore Pte. Ltd.
The BPCIA bars the FDA from approving biosimilar applications for 12 years after an innovator biological product receives initial marketing approval. 19 Depending upon the timing, duration and specifics of the FDA approval of the use of our product candidates, some of our U.S. patents, if granted, may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 (“Hatch-Waxman Act”).
Patent Extension Depending upon the timing, duration and specifics of the FDA approval of the use of our product candidates, some of our U.S. patents, if granted, may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 (“Hatch-Waxman Act”).
This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and/or agreements that materially restrict the manner in which a company promotes or distributes drug and biologics. U.S.
Such enforcement action may lead to a range of penalties that could have a significant commercial impact, including civil and criminal fines and/or agreements that materially restrict the manner in which a company promotes or distributes its approved drug and biological products. 17 U.S.
Thus, accelerated approval has been used extensively in the development and approval of drugs for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large trials to demonstrate a clinical or survival benefit. 22 The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit.
Thus, accelerated approval has been used extensively in the development and approval of drugs or biologics for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large trials to demonstrate a clinical or survival benefit.
In addition, the Board is reviewing risks associated with our development programs and our relationship with SG Austria Pte. Ltd (“SG Austria”), including that all licensed patents have expired, that know-how relating to our Cell-in-a-Box® technology solely resides with SG Austria, and that the incentives of SG Austria and its management may not be currently aligned with ours.
The Scientific Committee and our independent consultants are reviewing many of the risks relative to our business. In addition, the Board is reviewing risks associated with our development programs and our relationship with SG Austria Pte. Ltd (“SG Austria”), including that all licensed patents have expired and that know-how relating to our Cell-in-a-Box® technology solely resides with SG Austria.
Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on IMM.
An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug or biologic, such as an effect on IMM.
We expect that additional federal, state and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services.
Our goal is to satisfy a clear unmet medical need for patients with LAPC whose tumors no longer respond after 4-6 months of treatment with the chemotherapy combination of Abraxane ® plus gemcitabine or the four-drug combination known as FOLFIRINOX. For these patients, there is currently no effective therapy.
Pancreatic cancer accounts for about 3% of all cancers in the U.S. and about 7% of all cancer deaths. 6 Our goal is to satisfy a clear unmet medical need for patients with LAPC whose tumors no longer respond after 4-6 months of treatment with the chemotherapy combination of Abraxane ® plus gemcitabine or the four-drug combination known as FOLFIRINOX.
Under a centralized procedure in the European Union, the maximum timeframe for the evaluation of a MAA is 210 days (excluding “clock stops,” when additional written or oral information is to be provided by the applicant in response to questions asked by the Committee for Medicinal Products for Human Use (“CHMP”)).
Under the centralized procedure the maximum timeframe for the evaluation of an MAA by the EMA is 210 days, excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP.
We are dependent on business relationships with parties in multiple countries, as disclosed in Item 1A. “Risk Factors—Risks Related to Our Dependence on Third Parties.” Our Corporate Information We are a Nevada corporation incorporated in 1996. In 2013, we restructured our operations to focus on biotechnology.
We are dependent on business relationships with parties in multiple countries, as disclosed in Item 1A. “Risk Factors—Risks Related to Our Dependence on Third Parties.” 32
Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter.
If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA or BLA, the FDA will issue an approval letter. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.
The Federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) created additional federal criminal statutes that prohibit knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
The Federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud payors or to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, a healthcare benefit program, including private third-party payors, in connection with the delivery or payment for healthcare benefits, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying, concealing, or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items, or services relating to healthcare matters.
Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to the FDA as part of the IND. 16 The product candidates in our pipeline are at various stages of preclinical development.
Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to the FDA as part of the IND.
Also, changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. In addition, FDA regulations require investigation and correction of any deviations from cGMP standards and impose reporting and documentation requirements upon a company and any third-party manufacturers that a company may decide to use.
In addition, FDA regulations require investigation and correction of any deviations from cGMP standards and impose reporting and documentation requirements upon a company and any third-party manufacturers that a company may decide to use.
Before approving an NDA or a BLA, the FDA will inspect the facilities at which the product is manufactured. The FDA will not approve the product candidate unless it determines that the manufacturing processes and facilities follow cGMP requirements and are adequate to assure consistent production of the product within required specifications.
The FDA will not approve the product candidate unless it determines that the manufacturing processes and facilities substantially comply with cGMP requirements and are adequate to assure consistent production of the product within required specifications.
We have successfully completed various additional studies requested by the FDA, including a stability study on the cells from our MCB used to make our CypCaps™. We are already at the 36-month stability timepoint for the cells from our MCB.
We have successfully completed various additional studies requested by the FDA, including a stability study on the cells from our MCB used to make our CypCaps™. · Determination of the Exact Sequence of the Cytochrome P450 2B1 Gene .
The decision to terminate development of an investigational product candidate may be made by either a health authority body, such as the FDA, by IRB/ethics committees, or by the sponsor for various reasons.
Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur. The decision to terminate development of an investigational product candidate may be made by either a health authority body, such as the FDA, by IRB/ethics committees, or by the sponsor for various reasons.
The clinical trial studies a product candidate’s safety profile and may include a preliminary determination of a product candidate’s safe dosage range. The Phase 1 clinical trial can also determine how a drug is absorbed, distributed, metabolized and excreted by the body and, therefore, the potential duration of its action.
A Phase 1 clinical trial also determines how a drug is absorbed, distributed, metabolized and excreted by the body and, therefore, the potential duration of its action.
The Cell-in-a-Box ® capsules are comprised of cotton’s natural component – cellulose. Other materials used by competitors include alginate, collagen, chitosan, gelatin and agarose. Alginate appears to be the most widely used of these. We believe the inherent strength and durability of our cellulose-based capsules provides us with advantages over the competition.
Other materials used by competitors include alginate, collagen, chitosan, gelatin and agarose. Alginate appears to be the most widely used of these. We believe the inherent strength and durability of our cellulose-based capsules provides us with advantages over the competition. They do so with no evidence of rupture, damage, degradation, fibrous overgrowth or immune system response.
If Austrianova is unwilling or unable to perform such manufacturing for us, we may not be able to locate a replacement manufacturer for our product candidates.
Austrianova from time to time has experienced significant supply chain delays, and we believe Austrianova may also be experiencing liquidity issues as well. If Austrianova is unwilling or unable to perform such manufacturing for us, we may not be able to locate a replacement manufacturer for our product candidates.
The capsules are largely composed of cellulose (cotton) and are bioinert. We have been developing therapies for pancreatic and other solid cancerous tumors by using genetically engineered live human cells that we believe are capable of converting a cancer prodrug into its cancer-killing form.
We have been developing therapies for pancreatic tumors by using genetically engineered live human cells that we believe are capable of converting a cancer prodrug into its cancer-killing form. We encapsulate those cells using the Cell-in-a-Box® technology and place those capsules in the body as close as possible to the tumor.
Drugs granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit but is not itself a measure of clinical benefit.
For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints.
Healthcare Laws and Compliance Requirements In the U.S., our activities are potentially subject to additional regulation by various federal, state and local authorities in addition to the FDA, including the CMS, other divisions of the HHS and its Office of Inspector General, the Office for Civil Rights that has jurisdiction over matters relating to individuals’ privacy and protected health information, the DOJ, individual U.S.
Healthcare Laws and Compliance Requirements In the U.S., our activities are potentially subject to additional regulation by various federal, state and local authorities in addition to the FDA, including the CMS, other divisions of the U.S.
They do so with no evidence of rupture, damage, degradation, fibrous overgrowth or immune system response. The cells within the capsules also remained alive and functioning during these studies. Other encapsulating materials degrade in the human body over time, leaving the encapsulated cells open to immune system attack.
The cells within the capsules also remained alive and functioning during these studies. Other encapsulating materials degrade in the human body over time, leaving the encapsulated cells open to immune system attack. Damage to surrounding tissues has also been reported to occur over time when other types of encapsulation materials begin to degrade.
In October 2016, Bavarian Nordic/GSF and Bio Blue Bird further amended the Bavarian Nordic License Agreement (“Second Amendment to Bavarian Nordic/GSF License Agreement”) in order to: (i) include the right to import in the scope of the license; (ii) reflect ownership and notification of improvements; (iii) clarify which provisions survive expiration or termination of the Bavarian Nordic License Agreement; (iv) provide rights to Bio Blue Bird to the clinical data after the expiration of the licensed patent rights; and (v) change the notice address and recipients of Bio Blue Bird.
Bavarian Nordic/GSF and Bio Blue Bird amended the Bavarian Nordic License Agreement in December 2006 (“First Amendment to Bavarian Nordic/GSF License Agreement”) to reflect that: (i) the license granted was exclusive; (ii) a royalty rate increased from 3% to 4.5%; (iii) Bio Blue Bird assumed the patent prosecution expenses for the existing patents; and (iv) to make clear that the license will survive as a license granted by one of the licensors if the other licensor rejects performance under the Bavarian Nordic License Agreement due to any actions or declarations of insolvency. 5 In October 2016, Bavarian Nordic/GSF and Bio Blue Bird further amended the Bavarian Nordic License Agreement (“Second Amendment to Bavarian Nordic/GSF License Agreement”) in order to: (i) include the right to import in the scope of the license; (ii) reflect ownership and notification of improvements; (iii) clarify which provisions survive expiration or termination of the Bavarian Nordic License Agreement; (iv) provide rights to Bio Blue Bird to the clinical data after the expiration of the licensed patent rights; and (v) change the notice address and recipients of Bio Blue Bird.
In certain circumstances, violations could lead to criminal prosecution. 27 Smaller Reporting Company We qualify as a smaller reporting company in accordance with Rule 12b-2 under the Exchange Act, and have elected to follow certain of the scaled back disclosure accommodations within this Annual Report on Form 10-K.
Smaller Reporting Company We qualify as a smaller reporting company in accordance with Rule 12b-2 under the Exchange Act, and have elected to follow certain of the scaled back disclosure accommodations within this Annual Report on Form 10-K. 31 Financial Information Concerning Geographic Areas We had no revenues in the fiscal years ended April 30, 2024, and 2023, including no revenues from foreign countries.
The purpose of these programs is to provide important new drugs or biologics to patients earlier than under standard FDA review procedures.
The designation programs are intended to expedite the process for the development and review of such products, and ultimately, to provide important new drugs or biologics to patients earlier than under standard FDA review procedures.
In addition, we may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business. HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) and its implementing regulations, imposes requirements relating to the privacy, security and transmission of individually identifiable health information.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) and its implementing regulations, imposes requirements on covered entities relating to the privacy, security, and transmission of individually identifiable health information, known as protected health information.
The results of these studies must be submitted to the FDA as part of an IND which must be reviewed by the FDA for safety and other considerations before testing can begin in humans. An IND is a request for authorization from the FDA to administer an investigational product candidate to humans.
The results of these studies must be submitted, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of an IND which must be reviewed by the FDA for safety and other considerations and become effective before testing can begin in humans.
The current generation of our product candidate is referred to as “CypCaps™.” On August 15, 2022, we entered into a Cooperation Agreement (the “Cooperation Agreement”) with Iroquois Master Fund Ltd. and its affiliates, pursuant to which we elected a reconstituted board of directors (the “Board”).
On August 15, 2022, we entered into a Cooperation Agreement (the “Cooperation Agreement”) with Iroquois Master Fund Ltd. and its affiliates, pursuant to which we elected a reconstituted board of directors (the “Board”). On November 17, 2023, the Board formed the Strategic Scientific Committee (the “Scientific Committee”), chaired by Dr. Michael Abecassis.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may expend our limited resources on programs that do not yield a successful product candidate and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success. · We currently have no commercial revenue and may never become profitable. · If we are unable to obtain, or if there are delays in obtaining, required approval from the applicable regulatory agencies, we will not be able to commercialize our product candidates and our ability to generate revenue will be materially impaired. · If allowed to proceed with our clinical development program, we intend to conduct clinical trials for certain of our product candidates at sites outside of the U.S., and the U.S. regulatory agencies may not accept data from trials conducted in such locations. · Promising results in previous clinical trials of our encapsulated live cell and ifosfamide combination for advanced pancreatic cancer may not be replicated in future clinical trials which could result in development delays or a failure to obtain marketing approval. · We may not be able to protect our intellectual property rights throughout the world. · We rely and expect to continue to rely heavily on third parties to conduct our preclinical studies, plan to rely on third parties to conduct our and clinical trials, assuming they are allowed to proceed, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such studies and trials. · Disruptions in the global economy and supply chains may have a material adverse effect on our business, financial condition and results of operations and the financial condition of the third parties on which we rely, including Austrianova. · You may experience future dilution as a result of future equity offerings. · If we fail to comply with the continuing listing standards on Nasdaq, our securities could be delisted which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. 30 · We may experience volatility in our stock price, which may adversely affect the trading price of our common stock. · A large number of shares may be issued and subsequently sold upon the exercise of existing options and warrants and the conversion of preferred shares. · We are a “smaller reporting company” under the SEC’s disclosure rules and have elected to comply with the reduced disclosure requirements applicable to smaller reporting companies. · As a non-accelerated filer, we are not required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act.
Biggest changeWe may expend our limited resources on programs that do not yield a successful product candidate and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success. · We currently have no commercial revenue and may never become profitable. · If we are unable to obtain, or if there are delays in obtaining, required approval from the applicable regulatory agencies, we will not be able to commercialize our product candidates and our ability to generate revenue will be materially impaired. · If allowed to proceed with our clinical development program, we intend to conduct clinical trials for certain of our product candidates at sites outside of the U.S., and the U.S. regulatory agencies may not accept data from trials conducted in such locations. · Promising results in previous clinical trials of our encapsulated live cell and ifosfamide combination for advanced pancreatic cancer may not be replicated in future clinical trials which could result in development delays or a failure to obtain marketing approval. · We may not be able to protect our intellectual property rights throughout the world. · We rely and expect to continue to rely heavily on third parties to conduct our preclinical studies, plan to rely on third parties to conduct our and clinical trials, assuming they are allowed to proceed, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such studies and trials. · Disruptions in the global economy and supply chains may have a material adverse effect on our business, financial condition and results of operations and the financial condition of the third parties on which we rely, including Austrianova. · You may experience future dilution as a result of future equity offerings. · If we fail to comply with the continuing listing standards on Nasdaq, our securities could be delisted which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. · We may experience volatility in our stock price, which may adversely affect the trading price of our common stock. · A large number of shares may be issued and subsequently sold upon the exercise of existing options and warrants and the conversion of preferred shares. · We are a “smaller reporting company” under the Commission’s disclosure rules and have elected to comply with the reduced disclosure requirements applicable to smaller reporting companies. · As a non-accelerated filer, we are not required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act. 34 Risks Related to Our Financial Position, FDA Clinical Hold, Need for Additional Capital and Overall Business We are a biotechnology company with limited resources, a limited operating history, and no products approved for clinical trials or commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability.
The clinical development of our product candidates is susceptible to the risk of failure inherent at any stage of drug development, including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, the occurrence of severe or medically or commercially unacceptable adverse events, failure to comply with protocols or applicable regulatory requirements or determination by the regulatory agencies that a drug or biologic product is not approvable.
The clinical development of our product candidates is susceptible to the risk of failure inherent at any stage of drug development, including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, the occurrence of medically or commercially unacceptable or severe adverse events, failure to comply with protocols or applicable regulatory requirements or determination by the regulatory agencies that a drug or biologic product is not approvable.
The following examples are illustrative: · others may be able to make compositions that are the same as or like our product candidates, but that are not covered by the claims of any patents that we may own or exclusively license; · others may be able to make product that is like the product candidates we intend to commercialize that is not covered by any patents that we might own or exclusively license and have the right to enforce; · we, our licensors or any collaborators might not have been the first to make the inventions covered by issued patents or pending patent applications that we may own; · we, our licensors or any collaborators might not have been the first to file patent applications covering certain of our inventions; · others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; · it is possible that our pending patent applications will not lead to issued patents; · issued patents that we may own may not provide us with any competitive advantages, or may be held invalid or unenforceable because of legal challenges; · our competitors might conduct research and development activities in the U.S. and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; and · we may not develop additional proprietary technologies that are patentable.
The following examples are illustrative: · others may be able to make compositions that are the same as or like our product candidates, but that are not covered by the claims of any patents that we may own or exclusively license; · others may be able to make product that is like the product candidates we intend to commercialize that is not covered by any patents that we might own or exclusively license and have the right to enforce; · we, our licensors or any collaborators might not have been the first to make the inventions covered by issued patents or pending patent applications that we may own; 67 · we, our licensors or any collaborators might not have been the first to file patent applications covering certain of our inventions; · others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; · it is possible that our pending patent applications will not lead to issued patents; · issued patents that we may own may not provide us with any competitive advantages, or may be held invalid or unenforceable because of legal challenges; · our competitors might conduct research and development activities in the U.S. and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; and · we may not develop additional proprietary technologies that are patentable.
This reliance on Austrianova increases the risk that we will not have sufficient quantities of our product candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts. 29 · Disruptions in the global economy and supply chains may have a material adverse effect on our business, financial condition and results of operations and the financial condition of the third parties on which we rely, including Austrianova. · The recent and ongoing COVID-19 pandemic has affected and could continue to affect our operations, as well as the business or operations of third parties with whom we conduct business.
This reliance on Austrianova increases the risk that we will not have sufficient quantities of our product candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts. · Disruptions in the global economy and supply chains may have a material adverse effect on our business, financial condition and results of operations and the financial condition of the third parties on which we rely, including Austrianova. · The recent and ongoing COVID-19 pandemic has affected and could continue to affect our operations, as well as the business or operations of third parties with whom we conduct business.
Factors that may affect the market price include the following: · Announcements of regulatory developments or technological innovations by us or our competitors; · Changes in our relationship with our licensors and other strategic partners; · Our quarterly operating results; · Litigation involving or affecting us; · Shortfalls in our actual financial results compared to our guidance or the forecasts of stock market analysts; · Developments in patent or other technology ownership rights; · Acquisitions or strategic alliances by us or our competitors; · Public concern regarding the safety of our products; and · Government regulation of drug pricing.
Factors that may affect the market price include the following: · Announcements of regulatory developments or technological innovations by us or our competitors; · Changes in our relationship with our licensors and other strategic partners; · Our quarterly operating results; · Litigation involving or affecting us; · Shortfalls in our actual financial results compared to our guidance or the forecasts of stock market analysts; 73 · Developments in patent or other technology ownership rights; · Acquisitions or strategic alliances by us or our competitors; · Public concern regarding the safety of our products; and · Government regulation of drug pricing.
Our business could be adversely affected by the effects of other future health pandemics in regions where we or third parties on which we rely have significant business operations. · If we are unable to successfully raise sufficient capital, our future clinical trials and product development could be limited, and our long-term viability may be threatened. · Due to the significant resources required for the development of our programs, and depending on our ability to access capital, we must prioritize development of certain product candidates.
Our business could be adversely affected by the effects of other future health pandemics in regions where we or third parties on which we rely have significant business operations. 33 · If we are unable to successfully raise sufficient capital, our future clinical trials and product development could be limited, and our long-term viability may be threatened. · Due to the significant resources required for the development of our programs, and depending on our ability to access capital, we must prioritize development of certain product candidates.
If approved by the FDA, the EMA or comparable foreign regulatory agencies, we expect to license our encapsulated live cell plus ifosfamide product candidate for pancreatic cancer to a large pharmaceutical company with greater resources and experience than us. We may not be able to license our encapsulated live cell plus ifosfamide product candidate on reasonable terms, if at all.
If approved by the FDA, the EMA or comparable foreign regulatory agencies, we expect to license our encapsulated live cell plus ifosfamide product candidate for pancreatic cancer to a large pharmaceutical company with greater resources and experience than us. 57 We may not be able to license our encapsulated live cell plus ifosfamide product candidate on reasonable terms, if at all.
Even if we obtain regulatory approval for any of our product candidates, there is no assurance that either we or our third-party manufacturers will be able to manufacture the approved product to specifications acceptable to the FDA, EMA or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the product, or to meet potential future demand.
Even if we obtain regulatory approval for any of our product candidates, there is no assurance that either we or our third-party manufacturers will be able to manufacture the approved product to specifications acceptable to the FDA, EMA or other comparable regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the product, or to meet potential future demand.
Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future. If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our product candidates and technology.
Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future. 65 If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our product candidates and technology.
The risk of dilution from issuances of shares of common stock underlying existing options and warrants may cause shareholders to sell their common stock, which could further decline in the market price. 65 The requirement that we redeem the Series B Preferred Stock in cash could adversely affect our business plan, liquidity, financial condition, and results of operations.
The risk of dilution from issuances of shares of common stock underlying existing options and warrants may cause shareholders to sell their common stock, which could further decline in the market price. The requirement that we redeem the Series B Preferred Shares in cash could adversely affect our business plan, liquidity, financial condition, and results of operations.
If the clinical hold is not lifted or if the lifting takes an extended period of time, our business and prospects will likely suffer material adverse consequences. We contract with Austrianova for the manufacture of our product candidates for preclinical studies and clinical trials, if allowed to proceed, and expect to continue to do so for commercialization.
If the clinical hold is not lifted or if the lifting takes an extended period of time, our business and prospects will likely suffer material adverse consequences. 35 We contract with Austrianova for the manufacture of our product candidates for preclinical studies and clinical trials, if allowed to proceed, and expect to continue to do so for commercialization.
We cannot guarantee that COVID-19 or any other public health crisis will not cause delays or impact on our business or proposed clinical trial. 33 If we are unable to successfully raise additional capital, our future clinical trials and product development could be limited, and our long-term viability may be threatened.
We cannot guarantee that COVID-19 or any other public health crisis will not cause delays or impact on our business or proposed clinical trial. If we are unable to successfully raise additional capital, our future clinical trials and product development could be limited, and our long-term viability may be threatened.
If we are unable to arrange for such a third-party manufacturing source or fail to do so on commercially reasonable terms and in a timely manner, we may not be able to successfully produce and market our encapsulated live cell and ifosfamide product or any other product candidate or may be delayed in doing so.
If we are unable to arrange for such a third-party manufacturing source or fail to do so on commercially reasonable terms and in a timely manner, we may not be able to successfully produce and market our encapsulated live cell and ifosfamide product, if approved, or any other product candidate or may be delayed in doing so.
Even if we do receive Fast Track or similar designation, we may not experience a faster development process, review or approval compared to conventional procedures adopted by a regulatory agency. In addition, a regulatory agency may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program.
Even if we do receive Fast Track or similar designation, we may not experience a faster development process, review or approval compared to conventional procedures adopted by a regulatory agency. In addition, a regulatory agency may withdraw Fast Track or any similar designation if it believes that the designation is no longer supported by data from our clinical development program.
If, following approval of a product candidate, we or others discover that the product candidate is less effective than previously believed or causes undesirable side effects that were not previously identified, any of the following adverse events could occur: · A regulatory agency may withdraw its approval of the product candidate or seize the product candidate; · We may be required to recall the product candidate or change the way the product is administered; · Additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the product candidate; · We may be subject to fines, injunctions or the imposition of civil or criminal penalties; · A regulatory agency 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 the previously unidentified side effects for distribution of our product candidate to patients; · We could be sued and held liable for harm caused to patients; · The product candidate may become less competitive; and · Our reputation may suffer.
If, following approval of a product candidate, we or others discover that the product candidate is less effective than previously believed or causes undesirable side effects that were not previously identified, any of the following could occur: · A regulatory agency may withdraw its approval of the product candidate or seize the product candidate; · We may be required to recall the product candidate or change the way the product is administered; · Additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the product candidate; · We may be subject to fines, injunctions or the imposition of civil or criminal penalties; · A regulatory agency 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 the previously unidentified side effects for distribution of our product candidate to patients; · We could be sued and held liable for harm caused to patients; · The product candidate may become less competitive; and · Our reputation may suffer.
Furthermore, because of the substantial amount of discovery required in intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure. 58 If we breach any of our license or collaboration agreements, it could compromise our development and commercialization efforts for our product candidates.
Furthermore, because of the substantial amount of discovery required in intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure. If we breach any of our license or collaboration agreements, it could compromise our development and commercialization efforts for our product candidates.
We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. We incur increased costs because of operating as a public company, and our management is required to devote substantial time to new compliance initiatives.
We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. 70 We incur increased costs because of operating as a public company, and our management is required to devote substantial time to new compliance initiatives.
Our future arrangements with third-party payors and customers may expose us to applicable federal and state fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute any products for which we obtain marketing approval.
Our future arrangements with third-party payors and customers may expose us to broadly applicable federal and state fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute any products for which we obtain marketing approval.
For example, the Melligen cells are protected by patents only in the U.S. and Europe and we are only pursuing patent protection for our pancreatic cancer product candidate in the U.S., Australia and Canada. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
For example, the Melligen cells are protected by patents only in the U.S. and Europe and we are only pursuing patent protection for our pancreatic cancer product candidate in the U.S., Australia and Canada. 61 Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
If any disruptions occur, they could have a material adverse effect on our business. 70 We are subject to legal, regulatory, financial and other risks with our operations outside the U.S. We operate globally and are attempting to develop products in multiple countries.
If any disruptions occur, they could have a material adverse effect on our business. We are subject to legal, regulatory, financial and other risks with our operations outside the U.S. We operate globally and are attempting to develop products in multiple countries.
We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our product candidates in any market. 45 Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market.
We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our product candidates in any market. Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market.
These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities. 59 In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.
These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.
Many drugs that initially showed promise in clinical or earlier stage testing have later been found to cause undesirable or unexpected side effects that prevented further development of the drug. 48 Even if one of our product candidates receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third party payors and others in the medical community necessary for commercial success and the market opportunity for the product candidate may be smaller than we anticipated.
Many drugs that initially showed promise in clinical or earlier stage testing have later been found to cause undesirable or unexpected side effects that prevented further development of the drug. 55 Even if one of our product candidates receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third party payors and others in the medical community necessary for commercial success and the market opportunity for the product candidate may be smaller than we anticipated.
If not converted, we are required to redeem some or all of the outstanding shares of Series B Preferred Stock for cash under certain circumstances. These obligations could have important consequences on our business.
If not converted, we are required to redeem some or all of the outstanding shares of Series B Preferred Shares for cash under certain circumstances. These obligations could have important consequences on our business.
Any of these factors could harm our operating results. 34 Due to the significant resources required for the development of our programs, and depending on our ability to access capital, we must prioritize development of certain product candidates.
Any of these factors could harm our operating results. Due to the significant resources required for the development of our programs, and depending on our ability to access capital, we must prioritize development of certain product candidates.
If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited. 69 Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited. Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
If we or our third-party manufacturers are unable to reliably produce products to specifications acceptable to the FDA, EMA or other regulatory authorities, we may not obtain or maintain the approvals we need to commercialize such products.
If we or our third-party manufacturers are unable to reliably produce products to specifications acceptable to the FDA, EMA or other comparable regulatory authorities, we may not obtain or maintain the approvals we need to commercialize such products.
Healthcare providers, physicians and third-party payors will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval.
Physicians, other healthcare providers, and third-party payors will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval.
International operations are subject to a variety of risks, including: · foreign currency exchange rate fluctuations; · greater difficulty in overseeing foreign operations; · logistical and communications challenges; · potential adverse changes in laws and regulatory practices, including export license requirements, trade barriers, tariffs and tax laws; · burdens and costs of compliance with a variety of foreign laws; · political and economic instability; · increases in duties and taxation; · foreign tax laws and potential increased costs associated with overlapping tax structures; · greater difficulty in protecting intellectual property; · the risk of third-party disputes over ownership of intellectual property and infringement of third-party intellectual property by our products; and · general social, economic and political conditions in these foreign markets.
International operations are subject to a variety of risks, including: · foreign currency exchange rate fluctuations; · greater difficulty in overseeing foreign operations; · logistical and communications challenges; · potential adverse changes in laws and regulatory practices, including export license requirements, trade barriers, tariffs and tax laws; · burdens and costs of compliance with a variety of foreign laws; · political and economic instability; · increases in duties and taxation; · foreign tax laws and potential increased costs associated with overlapping tax structures; · greater difficulty in protecting intellectual property; · the risk of third-party disputes over ownership of intellectual property and infringement of third-party intellectual property by our products; and · general social, economic and political conditions in these foreign markets. 78 ITEM 1B.
Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory agencies. 38 Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use.
Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory agencies. 41 Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use.
Even after an Orphan Drug is approved and granted exclusivity, the regulatory agency can subsequently approve the same drug in a different drug product for the same condition if they conclude that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.
Even after an Orphan Drug is approved and granted exclusivity, the regulatory agency can subsequently approve the same drug or biological substance in a different product for the same condition if they conclude that the later product is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.
Even if we are able to fully respond to the FDA’s requests, they may subsequently make additional requests that we would need to fulfill prior to the lifting of the clinical hold and we may never be able to begin our clinical trial in LAPC, obtain regulatory approval or successfully commercialize our product candidates.
Even if we are able to fully respond to the FDA’s requests, the agency may subsequently make additional requests that we would need to fulfill prior to the lifting of the clinical hold and we may never be able to begin our clinical trial in LAPC, obtain regulatory approval or successfully commercialize our product candidates.
Enrollment delays may also delay or jeopardize our ability to commence sales and generate revenues from our product candidates. Any of the foregoing could cause the value of our company to decline and limit our ability to obtain additional financing, if needed. We may request priority review for our product candidates in the future.
Enrollment delays may also delay or jeopardize our ability to commence sales and generate revenues from our product candidates., if approved Any of the foregoing could cause the value of our company to decline and limit our ability to obtain additional financing, if needed. 47 We may request priority review for our product candidates in the future.
If we are unable to make the required cash payments or otherwise comply with the Certificate of Designations: · dividends will accrue on the Series B Preferred Stock at 15% per annum; · the holders of the Series B Preferred Stock could foreclose against our assets; and/or · we could be forced into bankruptcy or liquidation.
If we are unable to make the required cash payments or otherwise comply with the Certificate of Designations: · dividends will accrue on the Series B Preferred Shares at 15% per annum; · the holders of the Series B Preferred Shares could foreclose against our assets; and/or · we could be forced into bankruptcy or liquidation.
If the FDA allows us to begin a clinical trial by lifting its clinical hold on our IND, we have determined that the data contained in previous clinical trial reports using the Cell-in-a-Box ® and its Associated Technologies are not enough to advance the program to a Phase 3 pivotal trial.
If the FDA allows us to begin a clinical trial by lifting its clinical hold on our IND, we have determined that the data contained in previous clinical trial reports using the Cell-in-a-Box ® and its Associated Technologies are not sufficient to advance the program to a Phase 3 pivotal trial.
Accordingly, even if we believe, after completing early clinical trials, that one of our product candidates meets the criteria for designation as a Breakthrough Therapy or other similar designation, a regulatory agency may disagree and instead determine not to make such designation.
Accordingly, even if we believe, after completing early clinical trials, that one of our product candidates meets the criteria for designation as a Breakthrough Therapy or other similar designation, a regulatory agency may disagree and instead determine not to grant such designation.
Even if we believe that the results of clinical trials for our product candidates warrant marketing approval, the regulatory agencies may disagree and may not grant marketing approval of our product candidates or may require that we conduct initial clinical studies; the latter would require that we incur significantly increased costs and would significantly extend the clinical development timeline for our product candidates.
Even if we believe that the results of clinical trials for our product candidates warrant marketing approval, the regulatory agencies may disagree and may not grant marketing approval of our product candidates or may require that we conduct additional clinical studies; the latter would require that we incur significantly increased costs and would significantly extend the clinical development timeline for our product candidates.
As of April 30, 2023, we had 2 full-time employees and numerous consultants. We are highly dependent on the R&D, clinical and business development expertise of the principal members of our management, scientific and clinical teams, specifically, on our Interim Chief Executive Officer and Chief Financial Officer.
As of April 30, 2024, we had 2 full-time employees and numerous consultants. We are highly dependent on the R&D, clinical and business development expertise of the principal members of our management, scientific and clinical teams, specifically, on our Interim Chief Executive Officer and Chief Financial Officer.
The degree of market acceptance of our encapsulated live cell plus ifosfamide product candidate or any of our other product candidates, if approved for commercial sale, will depend on several factors, including: · The efficacy and safety of the product; · The potential advantages of the product compared to alternative treatments; · The prevalence and severity of any side effects; · The clinical indications for which the product is approved; · Whether the product is designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy; · Limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling; · Our ability to offer the product for sale at competitive prices; · Our ability to establish and maintain pricing sufficient to realize a meaningful return on our investment; · The product’s convenience and ease of administration compared to alternative treatments; · The willingness of the target patient population to try, and of physicians to prescribe, the product; 49 · The strength of sales, marketing and distribution support; · The approval of other new products for the same indications; · Changes in the standard of care for the targeted indications for the product; · The timing of market introduction of our approved products as well as competitive products and other therapies; · Availability and amount of reimbursement from government payors, managed care plans and other third-party payors; · Adverse publicity about the product or favorable publicity about competitive products; and · Potential product liability claims.
The degree of market acceptance of our encapsulated live cell plus ifosfamide product candidate or any of our other product candidates, if approved for commercial sale, will depend on several factors, including: · The efficacy and safety of the product; · The potential advantages of the product compared to alternative treatments; · The prevalence and severity of any side effects; · The clinical indications for which the product is approved; · Whether the product is designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy; · Limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling; · Our ability to offer the product for sale at competitive prices; · Our ability to establish and maintain pricing sufficient to realize a meaningful return on our investment; · The product’s convenience and ease of administration compared to alternative treatments; · The willingness of the target patient population to try, and of physicians to prescribe, the product; · The strength of sales, marketing and distribution support; · The approval of other new products for the same indications; · Changes in the standard of care for the targeted indications for the product; · The timing of market introduction of our approved products as well as competitive products and other therapies; · Availability and amount of reimbursement from government payors, managed care plans and other third-party payors; · Adverse publicity about the product or favorable publicity about competitive products; and · Potential product liability claims. 56 The potential market opportunities for our product candidates are difficult to estimate precisely.
Restrictions under applicable healthcare laws and regulations include the following: The Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing any remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; The False Claims Act imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the Federal governments; and HIPAA imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.
Restrictions under applicable healthcare laws and regulations include the following: 51 The Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing any remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; The False Claims Act imposes criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the Federal governments; and HIPAA imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.
The terms of the Series B Preferred Stock could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests.
The terms of the Series B Preferred Shares could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests.
Receiving priority review from the regulatory agencies does not guarantee approval within an accelerated timeline or thereafter. 43 In some instances, we believe we may be able to secure approval from the regulatory agencies to use accelerated development pathways.
Receiving priority review from the regulatory agencies does not guarantee approval within an accelerated timeline or thereafter. In some instances, we believe we may be able to secure approval from FDA to use accelerated development pathways.
Additionally, in many countries outside the U.S., the health care providers who prescribe pharmaceuticals are employed by the government and the purchasers of pharmaceuticals are government entities; therefore, our interactions with these prescribers and purchasers would be subject to regulation under the FCPA and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate.
Additionally, in many countries outside the U.S., the healthcare providers who prescribe pharmaceuticals are employed by the government and the purchasers of pharmaceuticals are government entities; therefore, our interactions with these prescribers and purchasers would be subject to regulation under the FCPA and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate.
Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. Specifically, there are numerous companies developing or marketing therapies for cancer, diabetes and malignant ascites, including many major pharmaceutical and biotechnology companies.
Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. Specifically, there are numerous companies developing or marketing therapies for cancer, including many major pharmaceutical and biotechnology companies.
If Eurofins, Austrianova or we are unable to purchase these raw materials after regulatory approval has been obtained for our product candidates, the commercial launch of our product candidates would be delayed or there would be a shortage in supply, which would impair our ability to generate revenues from the sale of our product candidates.
If we are unable to purchase these raw materials after regulatory approval has been obtained for our product candidates, the commercial launch of our product candidates, if approved, would be delayed or there would be a shortage in supply, which would impair our ability to generate revenues from the sale of our product candidates.
This reliance on Austrianova increases the risk that we will not have sufficient quantities of our product candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts. We do not currently own or operate manufacturing facilities to produce our encapsulated live cell product candidates for cancer, diabetes and malignant ascites.
This reliance on Austrianova increases the risk that we will not have sufficient quantities of our product candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts. We do not currently own or operate manufacturing facilities to produce our encapsulated live cell product candidates for cancer.
The regulatory agencies may not grant priority review for any of our product candidates. Moreover, even if the regulatory agencies designated such products for priority review, that designation may not lead to a faster regulatory review or approval process and, in any event, does not assure approval by the regulatory agencies.
FDA may not grant priority review for any of our product candidates. Moreover, even if FDA designated such products for priority review, that designation may not lead to a faster regulatory review or approval process and, in any event, does not assure regulatory approval of the product.
We have licensed rights to intellectual property from third parties to commercialize our product candidates, including our Cell-in-a-Box ® Technology for LAPC and diabetes.
We have licensed rights to intellectual property from third parties to commercialize our product candidates, including our Cell-in-a-Box ® Technology for LAPC.
Marketing exclusivity for a product designated as an Orphan Drug may not effectively protect the product candidate from competition because different drugs can be approved for the same condition, and the same drug may be approved for a different condition that may be used off label for an orphan indication.
Marketing exclusivity for a product designated as an Orphan Drug may not effectively protect the product candidate from competition because different drugs can be approved for the same rare disease or condition, and the same drug may be approved for a different condition that may be used off-label for an orphan indication.
The information is to be made publicly available on a searchable website. Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.
Such information reported to CMS is made publicly available on a searchable website. Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.
Our product candidates and the activities associated with their development and commercialization, including their testing, manufacture, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by regulatory agencies.
Our product candidates and the activities associated with their development and commercialization, if approved, including their testing, manufacture, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive and ongoing regulation by regulatory agencies.
If our brand-marketing efforts are unsuccessful, growth prospects, financial condition and results of operations would be adversely affected. Our brand awareness efforts have required, and will most likely continue to require, additional expenses and time of the current senior management team. 61 Any weakness in our internal controls could have a material adverse effect on us.
If our brand-marketing efforts are unsuccessful, growth prospects, financial condition and results of operations would be adversely affected. Our brand awareness efforts have required, and will most likely continue to require, additional expenses and time of the current senior management team. Any weakness in our internal controls could have a material adverse effect on us. As discussed in Item 9A.
Filing, prosecuting and defending patents or establishing other intellectual property rights to our product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States or non-existent.
Filing, prosecuting and defending patents or establishing other intellectual property rights to our product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the U.S. can be less extensive than those in the U.S. or non-existent.
As of April 30, 2023, we had an accumulated deficit of approximately $116 million. Substantially all our losses have resulted from expenses incurred relating to our research and development programs and from general and administrative expenses and operating losses associated with our business. We expect to continue to incur significant expenses and operating losses for the foreseeable future.
As of April 30, 2024, we had an accumulated deficit of approximately $115.6 million. Substantially all our losses have resulted from expenses incurred relating to our research and development programs and from general and administrative expenses and operating losses associated with our business. We expect to continue to incur significant expenses and operating losses for the foreseeable future.
If we are required to enter alternative arrangements because of any such termination, the introduction of our product candidates to market could be delayed. 51 Our reliance on these third parties for R&D activities will reduce our control over these activities but will not relieve us of our responsibilities.
If we are required to enter alternative arrangements because of any such termination, the development, marketing authorization, or introduction of our product candidates to market could be delayed. Our reliance on these third parties for R&D activities will reduce our control over these activities but will not relieve us of our responsibilities.
Also, geopolitical tensions and the conflict between Russia and Ukraine continue to escalate, and numerous jurisdictions have imposed harsh sanctions on certain industry sectors and parties in Russia, as well as enhanced export controls on certain products and industries.
Also, geopolitical tensions and the conflicts between Russia and Ukraine and between Israel and Palestine continue to escalate, and numerous jurisdictions have imposed harsh sanctions on certain industry sectors and parties in Russia, as well as enhanced export controls on certain products and industries.
In any event, the receipt of a Breakthrough Therapy or other similar designation for a product candidate may not result in a faster development process, review or approval compared to drugs or biologics considered for approval under conventional procedures of a regulatory agency and does not assure their ultimate approval.
In any event, the receipt of a Breakthrough Therapy or other similar designation for a product candidate may not result in a faster development process, review or approval compared to drugs or biologics considered for approval under conventional procedures of a regulatory agency and does not ensure the designated product’s ultimate approval.
Under Sections 382 and 383 of the United States Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change taxable income or taxes will be limited to approximately $19 million and $6 million for federal and state, respectively.
Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change taxable income or taxes will be limited to approximately $20 million and $11 million for federal and state, respectively.
If we fail to enter collaborations and do not have sufficient funds or expertise to undertake the necessary development activities, we may not be able to further develop our product candidates or continue to develop our product candidates and our business may be materially and adversely affected. 52 Future collaborations we may enter may involve the following risks: · Collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations; · Collaborators may not perform their obligations as expected; · Changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, may divert resources or create competing priorities; · Collaborators may delay discovery and preclinical development, provide insufficient funding for product development of targets selected by us, stop or abandon preclinical or clinical development of a product candidate or must repeat or conduct new preclinical and clinical development of a product candidate; · Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed than ours; · Product candidates may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the development of our product candidates; · Disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development might cause delays or termination of the preclinical or clinical development or commercialization of product candidates.
Future collaborations we may enter may involve the following risks: · Collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations; · Collaborators may not perform their obligations as expected; · Changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, may divert resources or create competing priorities; 59 · Collaborators may delay discovery and preclinical development, provide insufficient funding for product development of targets selected by us, stop or abandon preclinical or clinical development of a product candidate or must repeat or conduct new preclinical and clinical development of a product candidate; · Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed than ours; · Product candidates may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the development of our product candidates; · Disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development might cause delays or termination of the preclinical or clinical development or commercialization of product candidates.
Market prices for our shares of common stock will be influenced by several factors, including, but not limited to: · The issuance of new shares pursuant to future offering; · Changes in interest rates; · New services or significant contracts and acquisitions; · Variations in quarterly operating results; · Change in financial estimates by securities analysts; · The depth and liquidity of the market for the shares; · Investor perceptions of us and of investments based in the countries where we do business or conduct research; and · General economic and other national and international conditions. 64 You may experience future dilution as a result of future equity offerings.
Market prices for our shares of common stock will be influenced by several factors, including, but not limited to: · The issuance of new shares pursuant to future offering; · Changes in interest rates; · New services or significant contracts and acquisitions; · Variations in quarterly operating results; · Change in financial estimates by securities analysts; · The depth and liquidity of the market for the shares; · Investor perceptions of us and of investments based in the countries where we do business or conduct research; and · General economic and other national and international conditions.
We have limited resources, a limited operating history, no products approved for clinical trials or commercial sale and therefore have not produced any revenues. We have generated significant operating losses since our inception. Our net losses for the years ended April 30, 2023, and 2022 were approximately $4.3 million and $4.2 million, respectively.
We have limited resources, a limited operating history, no products approved for clinical trials or commercial sale and therefore have not produced any revenues. We have generated significant operating losses since our inception. Our net losses attributable to common stockholders for the years ended April 30, 2024, and 2023 were approximately $17.2 million and $4.3 million, respectively.
Patient enrollment is a significant factor in the overall duration of a clinical trial and is affected by many factors, including: · The size and nature of the patient population; · The severity of the disease under investigation; · The proximity of patients to clinical sites; · The eligibility criteria for the trial; · The design of the clinical trial; · Efforts to facilitate timely enrollment; · Competing clinical trials for the same patient population; and · Clinicians’ and patients’ perceptions as to the potential advantages and risks of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating.
Patient enrollment is a significant factor in the overall duration of a clinical trial and is affected by many factors, including: · The size and nature of the patient population; · The severity of the disease under investigation; · The proximity of patients to clinical sites; · The eligibility criteria for the trial; · Our ability to recruit clinical trial investigators with the appropriate competencies and experience; · The design of the clinical trial; · Efforts to facilitate timely enrollment; · The patient referral practices of physicians; · Competing clinical trials for the same patient population; and · Clinicians’ and patients’ perceptions as to the potential advantages and risks of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating.
Clinical trials of our product candidates, if allowed to proceed, will be conducted in carefully defined subsets of patients who have agreed to enter a clinical trial.
Clinical trials of our product candidates, if allowed to proceed, will be conducted in carefully defined subsets of patients who have provided informed consent to enter a clinical trial.
Our ability to generate revenue from our product candidates also depends on numerous additional factors, including our ability to: · successfully complete development activities, including the remaining preclinical studies and planned clinical trials for our product candidates; · complete and submit NDAs or BLAs to the FDA and MAAs to the EMA, and obtain regulatory approval for indications for which there is a commercial market; · complete and submit applications to, and obtain regulatory approval from, other foreign regulatory authorities; · manufacture any approved products in commercial quantities and on commercially reasonable terms; · develop a commercial organization, or find suitable partners, to market, sell and distribute approved products in the markets in which we have retained commercialization rights; · achieve acceptance among patients, clinicians and advocacy groups for any products we develop; · obtain coverage and adequate reimbursement from third parties, including government payors; and · set a commercially viable price for any products for which we may receive approval. 35 We are unable to predict the timing or amount of increased expenses, or when or if we will be able to achieve or maintain profitability.
Our ability to generate revenue from our product candidates also depends on numerous additional factors, including our ability to: · successfully complete development activities, including the remaining preclinical studies and planned clinical trials for our product candidates; · complete and submit NDAs or BLAs to the FDA and MAAs to the EMA, and obtain regulatory approval for indications for which there is a commercial market; · complete and submit applications to, and obtain regulatory approval from, other foreign regulatory authorities; · manufacture any approved products in commercial quantities and on commercially reasonable terms; · develop a commercial organization, or find suitable partners, to market, sell and distribute approved products in the markets in which we have retained commercialization rights; · achieve acceptance among patients, clinicians and advocacy groups for any products we develop; · obtain coverage and adequate reimbursement from third parties, including government payors; and · set a commercially viable price for any products for which we may receive approval.
A large number of shares may be issued and subsequently sold upon the exercise of existing options and warrants and upon the conversion of the Series B Preferred Stock.
A large number of shares may be issued and subsequently sold upon the exercise of existing options and warrants and upon the conversion of the Company’s Series B convertible preferred stock (the “Series B Preferred Shares”).
Private payors tend to follow CMS to a substantial degree. It is difficult to predict what CMS will decide with respect to reimbursement for fundamentally novel products such as ours, as there is no body of established practices and precedents for these new products. Reimbursement agencies in Europe may be more conservative than CMS.
It is difficult to predict what CMS will decide with respect to reimbursement for fundamentally novel products such as ours, as there is no body of established practices and precedents for these new products. Reimbursement agencies in Europe may be more conservative than CMS.
They also impose stringent restrictions on manufacturers’ communications regarding use of their products. If we promote our product candidates beyond their approved indications, we may be subject to enforcement action for off-label promotion.
They also impose stringent restrictions on manufacturers’ communications regarding use of their products. If we promote any of our product that may receive regulatory approval beyond their approved indications, we may be subject to enforcement action for off-label promotion.
Moreover, regulatory agencies require us to comply with current good manufacturing practices (“cGMP”) for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
Moreover, regulatory agencies require us to comply with GCP for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
We do not currently have Breakthrough Therapy designation by the FDA or similar designation by another regulatory agency for any of our product candidates but intend seek such designation based upon the data we generate during our clinical trials, if successful. A Breakthrough Therapy or similar designation is within the discretion of the FDA and other regulatory agencies.
We do not currently have Breakthrough Therapy designation by the FDA or similar designation by another regulatory agency for any of our product candidates but intend seek such designation based upon the data we generate during our clinical trials, if successful.
If issued, such patents would expire in March 2038. We cannot estimate the financial or other impact of the expiration of the Bavarian Nordic/GSF patents or the failure of the USPTO or similar regulatory authorities in other countries denying the claims we pursue in the U.S. and other countries. The patent prosecution and/or patent maintenance process is expensive and time-consuming.
We cannot estimate the financial or other impact of the expiration of the Bavarian Nordic/GSF patents or the failure of the USPTO or similar regulatory authorities in other countries denying the claims we pursue in the U.S. and other countries. The patent prosecution and/or patent maintenance process is expensive and time-consuming.
Also, later discovery of previously unknown adverse events or other problems with our product candidates, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including: · Restrictions on such products, manufacturers or manufacturing processes; · Restrictions on the labeling or marketing of a product; · Restrictions on product distribution or use; · Requirements to conduct post-marketing studies or clinical trials; · Warning or untitled letters or Form 483s; · Withdrawal of the products from the market; · Refusal to approve pending applications or supplements to approved applications that we submit; · Recall of products; · Fines, restitution or disgorgement of profits or revenues; · Suspension or withdrawal of marketing approvals; · Refusal to permit the import or export of our product candidates; · Product seizure; or · Injunctions or the imposition of civil or criminal penalties 46 Non-compliance with European requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties.
Also, later discovery of previously unknown adverse events or other problems with our product candidates or any products that may receive regulatory approval, or our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including: · Restrictions on such products, approved manufacturers or manufacturing processes; · Restrictions on the labeling or marketing of a product; 50 · Restrictions on product distribution or use; · Requirements to conduct post-marketing studies or clinical trials; · Notices of noncompliance, such as warning or untitled letters from the FDA, or inspectional observations; · Withdrawal of the products from the market; · Refusal to approve pending applications or supplements to approved applications that we submit; · Recall of products; · Fines, restitution or disgorgement of profits or revenues; · Suspension or withdrawal of marketing approvals; · Clinical hold or suspension of any of our ongoing clinical trials; · Refusal to permit the import or export of products; · Product seizure; or · Injunctions, consent decrees, or the imposition of civil or criminal penalties Non-compliance with European requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties.
The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage.
Intellectual property rights do not necessarily address all potential threats to our competitive advantage. The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage.
Until we cease to be a smaller reporting company, the scaled-back disclosure in our SEC filings will result in less information about our company being available than for other public companies.
We have elected to adopt the accommodations available to smaller reporting companies. Until we cease to be a smaller reporting company, the scaled-back disclosure in our Commission filings will result in less information about our company being available than for other public companies.
Even if we can establish such arrangements with another third-party manufacturer, reliance on a new third-party manufacturer entails additional risks, including: · Reliance on the third party for regulatory compliance and quality assurance; · The possible breach of the manufacturing agreement by the third party; · The possible misappropriation of our proprietary information, including our trade secrets and know-how; and · The possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. 32 A new third-party manufacturer may not be able to comply with cGMP standards or the requirements of a regulatory agency.
Even if we can establish such arrangements with another third-party manufacturer, reliance on a new third-party manufacturer entails additional risks, including: · Reliance on the third party for regulatory compliance and quality assurance; · The possible breach of the manufacturing agreement by the third party; · The possible misappropriation of our proprietary information, including our trade secrets and know-how; and · The possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.
In addition, the manufacturing process for any products that we may develop is subject to FDA, EMA and foreign regulatory authority approval processes and continuous oversight, and we will need to contract with manufacturers who can meet all applicable FDA, EMA and foreign regulatory authority requirements, including complying with current good manufacturing processes, or on an ongoing basis.
In addition, the manufacturing process for any products that we may develop is subject to FDA, EMA and other comparable foreign regulatory authority approval processes and continuous oversight, and we will need to contract with manufacturers who can meet all applicable legal and regulatory requirements, including compliance with cGMP, on an ongoing basis.
Moreover, even if one of our product candidates is designated for priority review, such a designation does not necessarily mean a faster overall regulatory review process or necessarily confer any advantage with respect to approval compared to conventional procedures of the regulatory agencies.
Moreover, even if one of our product candidates is designated for priority review, such a designation does not change the standards for product approval and does not necessarily mean a faster overall regulatory review process or necessarily confer any advantage with respect to approval compared to the standard FDA review process.
Similarly, there can be no assurance that after subsequent feedback from regulatory agencies that we will continue to pursue or apply for accelerated approval or any other form of expedited development, review or approval, even if we initially decide to do so.
Similarly, there can be no assurance that after subsequent feedback from the FDA that we will continue to pursue or apply for accelerated approval or any other form of designation or expedited program, even if we initially decide to do so.
There can also be no assurance that after our evaluation of the feedback and other factors we will decide to pursue or submit an NDA, a BLA or an MAA for accelerated approval or any other form of expedited development, review or approval.
There can also be no assurance that after our evaluation of the feedback and other factors we will decide to pursue or submit an NDA or a BLA, as applicable, for accelerated approval or any other form of designation or program intended to expedite the product development, review or approval processes.
The patents are issued in the U.S. and Europe and expire in August 2028. Currently, we do not have any issued patents in any countries covering our product candidate for the treatment of cancer; we have pending applications in the U.S., Australia and Canada and relating to our product candidate for the treatment of pancreatic cancer.
Currently, we do not have any issued patents in any countries covering our product candidate for the treatment of cancer; we have pending applications in the U.S., Australia and Canada and relating to our product candidate for the treatment of pancreatic cancer. If issued, such patents would expire in March 2038.
The potential market opportunities for our product candidates are difficult to estimate precisely. Our estimates of the potential market opportunities are predicated on many assumptions, including industry knowledge and publications, third party research reports and other surveys.
Our estimates of the potential market opportunities are predicated on many assumptions, including industry knowledge and publications, third party research reports and other surveys.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS There is no material litigation currently pending against us or any of our subsidiaries or to which any of our or our subsidiaries’ property is subject. To our knowledge, there is no material litigation against any of our officers or directors in their capacity as such, and no such litigation is contemplated by any governmental authorities.
Biggest changeTo our knowledge, there are no other material legal proceedings pending against us or any material litigation against any of our officers or directors in their capacity as such, and no such litigation is contemplated by any governmental authorities.
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ITEM 3. LEGAL PROCEEDINGS From time to time, the Company is subject to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business.
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While the outcome of pending claims cannot be predicted with certainty, the Company does not believe that the outcome of any pending claims will have a material adverse effect on our financial condition or operating results. On December 4, 2023, H.C.
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Wainwright & Co., LLC (“Wainwright”) filed a complaint against us in the Supreme Court of the State of New York, County of New York, asserting a single cause of action for breach of contract and alleging that we breached an April 2021 engagement agreement with Wainwright by failing to pay a purported “tail fee” allegedly due in connection with a private placement transaction that closed in 2023.
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Wainwright seeks damages of not less than $1,950,000, warrants to purchase an aggregate of 656,250 shares of our common stock at an exercise price of $5.00 per share, and attorney’s fees. On February 28, 2024, we responded to the complaint with an answer and affirmative defenses.
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We intend to vigorously defend against Wainwright’s complaint and do not believe that any potential loss is reasonably probable at this time.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs February 1, 2023 – February 28, 2023 711,131 $ 2.9905 711,131 $ 8,615,102 March 1, 2023 – March 31, 2023 94,433 $ 2.9205 94,433 $ 8,337,421 April 1, 2023 – April 30, 2023 609,474 $ 2.9989 609,474 $ 6,497,474 Total 1,415,038 $ 2.9895 1,415,038 $ 6,497,474 On June 2, 2022, the Company announced that the Board had authorized a share repurchase program to acquire up to $10 million of the Company’s outstanding common stock (the “First Repurchase Program”).
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs May 1, 2023 – May 31, 2023 – – – $ 6,439,377 June 1, 2023 – June 30, 2023 – – – $ 6,439,377 July 1, 2023 – July 31, 2023 – – – $ 6,439,377 August 1, 2023 – August 31, 2023 – – – $ 6,439,377 September 1, 2023 – September 30, 2023 – – – $ 6,439,377 October 1, 2023 – October 31, 2023 78,109 $ 2.1118 78,109 $ 6.272.775 November 1, 2023 – November 30, 2023 60,695 $ 2.1863 60,695 $ 6.138.751 December 1, 2023 – December 31, 2023 60,072 $ 2.2901 60,072 $ 5.999.807 January 1, 2024 – January 31, 2024 58,066 $ 2.2465 58,066 $ 5.868.058 February 1, 2024 – February 29, 2024 36,482 $ 2.1610 36,482 $ 5,788,433 March 1, 2024 – March 31, 2024 353,480 $ 2.4701 353,480 $ 4,906,583 April 1, 2024 – April 30, 2024 93,573 $ 2.3797 93,573 $ 4,681,682 Total 740,477 $ 2.3502 740,477 $ 4,681,682 On June 2, 2022, the Company announced that the Board had authorized a share repurchase program to acquire up to $10 million of the Company’s outstanding common stock (the “First Repurchase Program”).
Under the Second Repurchase Program, the shares may be repurchased from time to time in open market transactions, privately negotiated block transactions or other means in accordance with applicable securities laws. For more information on the Repurchase Programs, see “Note 12 – Treasury Stock.” 73 ITEM 6. [RESERVED]
Under the Second Repurchase Program, the shares may be repurchased from time to time in open market transactions, privately negotiated block transactions or other means in accordance with applicable securities laws. For more information on the Repurchase Programs, see “Note 13 – Treasury Stock.” ITEM 6. [RESERVED]
The number of shares of common stock repurchased on any given trading day is determined by a formula, which is based on the market price of the common stock and average daily volumes. The First Repurchase Program expires on May 30, 2024.
The number of shares of common stock repurchased on any given trading day was determined by a formula, which was based on the market price of the common stock and average daily volumes. The First Repurchase Program expired on May 30, 2024.
In addition, the terms of the certificate of designations governing our Series B convertible preferred stock presently restricts our ability to pay dividends. Our Board will decide any future payment of dividends, depending on the results of operations, financial condition, capital requirements and other relevant factors.
In addition, the terms of the certificate of designations governing our Preferred Shares presently restricts our ability to pay dividends. Our Board will decide any future payment of dividends, depending on the results of operations, financial condition, capital requirements and other relevant factors.
Bid Price FY 2023 HIGH LOW First Quarter $ 2.51 1.95 Second Quarter $ 3.02 2.33 Third Quarter $ 3.10 2.70 Fourth Quarter $ 3.04 2.78 FY 2022 First Quarter $ 27.16 5.56 Second Quarter $ 12.01 2.25 Third Quarter $ 3.05 1.89 Fourth Quarter $ 2.51 1.79 As of July 25, 2023, there were approximately 1,400 stockholders of record of our common stock.
Bid Price FY 2024 HIGH LOW First Quarter $ 3.23 $ 2.66 Second Quarter $ 2.73 $ 1.94 Third Quarter $ 2.39 $ 1.92 Fourth Quarter $ 2.58 $ 1.94 FY 2023 First Quarter $ 2.51 $ 1.95 Second Quarter $ 3.02 $ 2.33 Third Quarter $ 3.10 $ 2.70 Fourth Quarter $ 3.04 $ 2.78 As of August 8, 2024, there were approximately 1,400 stockholders of record of our common stock.
Securities Authorized for Issuance under Equity Compensation Plans See Item 12 of Part III of this Report regarding information about securities authorized for issuance under our equity compensation plans. 72 Recent Sales of Unregistered Securities On May 2, 2022, we issued options to purchase an aggregate of 334 unregistered shares of common stock to one of our directors pursuant to their letter agreements with us.
Securities Authorized for Issuance under Equity Compensation Plans See Item 12 of Part III of this Report regarding information about securities authorized for issuance under our equity compensation plans.
All recipients received or had, through their relationships with us, adequate access to information about us. Issuer Purchases of Equity Securities The table below summarizes information about the Company’s purchases of its equity securities during the three months ended April 30, 2023.
Recent Sales of Unregistered Securities None. 81 Issuer Purchases of Equity Securities The table below summarizes information about the Company’s purchases of its equity securities during the year ended April 30, 2024.
The prices reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
The following table sets forth the high and low bid quotations reported on Nasdaq through April 30, 2024 for our shares for each quarter during the two fiscal years (“FYs”) ended April 30, 2024 and 2023. The prices reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
Removed
Prior to that, shares of our common stock were quoted on the OTC Link™ quotation platform of OTC Markets Group, Inc.
Removed
(“OTCQB”) as an Over-The-Counter Bulletin Board company under the classification of OTCQB utilizing the trading symbol “PMCB.” The following table sets forth the post reverse stock split (1:1500) high and low bid quotations reported on the OTCQB through August 9, 2021 and Nasdaq through April 30, 2023 for our shares for each quarter during the two fiscal years (“FYs”) ended April 30, 2023 and 2022.
Removed
The options are exercisable for $2.29 per share and vest immediately upon issuance. The non-cash expense for the share issuances totaled $765. On May 16, 2022, we issued options to purchase an aggregate of 334 unregistered shares of common stock to one of our directors pursuant to their letter agreements with us.
Removed
The options are exercisable for $2.29 per share and vest immediately upon issuance. The non-cash expense for the share issuances totaled $765. On July 1, 2022, we issued options to purchase an aggregate of 334 unregistered shares of common stock to one of our directors pursuant to their letter agreements with us.
Removed
The options are exercisable for $2.24 per share and vest immediately upon issuance. The non-cash expense for the share issuances totaled $748. The foregoing transactions did not involve any underwriters or any public offering.
Removed
The sale of the above securities was deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act (and Regulation D promulgated thereunder) or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering.
Removed
The recipients of the securities in the transaction represented their intentions to acquire the securities for investment only and not with a view to, or for sale in connection with, any distribution thereof, and appropriate legends were affixed to the securities issued in these transactions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAll warrants, option, share and per share information in this Report gives retroactive effect to such 1:1500 reverse stock split. Increase in Authorized Shares On March 14, 2023, we filed a Certificate of Change with the State of Nevada, Secretary of State, to increase the number of authorized shares of our common stock to 133,333,334 shares effective immediately.
Biggest changeIncrease in Authorized Shares On September 6, 2023, pursuant to stockholder approval received at a special meeting of stockholders, we filed with the Secretary of State of the State of Nevada a Certificate of Change to our Articles of Incorporation, as amended, to increase the number of authorized shares of common stock from 133,333,334 to 200,000,000.
GAAP”). We are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our Consolidated Financial Statements are prepared.
We are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our Consolidated Financial Statements are prepared.
For more information on the Repurchase Programs, see “Note 12 – Treasury Stock.” Other Liquidity Matters We have no other off-balance sheet arrangements that could have a material current effect or that are reasonably likely to have a material adverse effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
For more information on the Second Repurchase Program, see “Note 13 – Treasury Stock.” Other Liquidity Matters We have no other off-balance sheet arrangements that could have a material current effect or that are reasonably likely to have a material adverse effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Performance Indicators Non-financial performance indicators used by management to manage and assess how the business is progressing will include, but are not limited to, the ability to: (i) acquire appropriate funding for all aspects of our operations; (ii) acquire and complete necessary contracts; (iii) complete activities for producing genetically modified human cells and having them encapsulated for our preclinical studies and the planned clinical trial in LAPC; (iv) have regulatory work completed to enable studies and trials to be submitted to regulatory agencies; (v) complete all required tests and studies on the cells and capsules we plan to use in our clinical trial in patients with LAPC; (vi) ensure completion of the production of encapsulated cells according to cGMP regulations to use in our planned clinical trial; (vii) complete all of the tasked the FDA requires of us in order to have the clinical hold lifted; and (viii) obtain approval from the FDA to lift the clinical hold on our IND that we may commence our planned clinical trial in LAPC.
The Certificate of Change had no impact on the number of authorized shares of preferred stock, which remains at 10,000,000. 85 Performance Indicators Non-financial performance indicators used by management to manage and assess how the business is progressing will include, but are not limited to, the ability to: (i) acquire appropriate funding for all aspects of our operations; (ii) acquire and complete necessary contracts; (iii) complete activities for producing genetically modified human cells and having them encapsulated for our preclinical studies and the planned clinical trial in LAPC; (iv) have regulatory work completed to enable studies and trials to be submitted to regulatory agencies; (v) complete all required tests and studies on the cells and capsules we plan to use in our clinical trial in patients with LAPC; (vi) ensure completion of the production of encapsulated cells according to cGMP regulations to use in our planned clinical trial; (vii) complete all of the tasked the FDA requires of us in order to have the clinical hold lifted; and (viii) obtain approval from the FDA to lift the clinical hold on our IND that we may commence our planned clinical trial in LAPC.
Other Income (Expenses), Net Other income, net for the year ended April 30, 2023, was $2,139,501, as compared to other income, net of $152,853 in the year ended April 30, 2022.
Other Income (Expenses), Net Other income, net for the year ended April 30, 2024, was $8,853,771, as compared to other income, net of $2,139,501 in the year ended April 30, 2023.
That team has been working to complete the list of items requested by the FDA. For a complete discussion of what the FDA requires of us and the efforts we have undertaken to lift the clinical hold, see Item 1. Business under the Section entitled, “Clinical Hold” of this Report.
That team has been working to complete the list of items requested by the FDA. For a complete discussion of what the FDA requires of us and the efforts we have undertaken to lift the clinical hold, see Item 1.
“Risk Factors” and under the caption “Cautionary Note Regarding Forward-Looking Statements.” Overview We are a biotechnology company focused on developing and preparing to commercialize cellular therapies for cancer, diabetes and malignant ascites based upon our proprietary cellulose-based live cell encapsulation technology we refer to as Cell-in-a-Box ® .
“Risk Factors” and under the caption “Cautionary Note Regarding Forward-Looking Statements.” Overview We are a biotechnology company focused on developing and preparing to commercialize cellular therapies for cancer based upon our proprietary cellulose-based live cell encapsulation technology we refer to as Cell-in-a-Box ® . We are working to advance clinical research and development of new cellular-based therapies in oncology.
On September 1, 2020, we submitted an IND to the FDA for our planned clinical trial in LAPC. On October 1, 2020, we received notice from the FDA that it had placed our IND on clinical hold.
We are engaged preparing for a clinical trial in LAPC using encapsulated live cells. On September 1, 2020, we submitted an IND to the FDA for our planned clinical trial in LAPC. On October 1, 2020, we received notice from the FDA that it had placed our IND on clinical hold.
The increase is mainly attributable to increases in director fees and legal and professional expenses, and consulting expenses in 2023 from 2022, net of decreases in R&D costs and compensation expense. See the table under “ Operating Expenses ” above for more detail.
The increase is mainly attributable to increases in compensation expenses, director fees and general and administrative expense, impairment of asset, net of decreases in R&D and legal and professional expenses. See the table under “ Operating Expenses ” above for more detail.
We do not believe there are factors which will cause materially different amounts to be reported than those presented in this Report.
We do not believe there are factors which will cause materially different amounts to be reported than those presented in this Report. We aim to assess this regularly to provide accurate information to our shareholders.
Investing Activities : We had no investing activities for the years ended April 30, 2023, and 2022.
We had no investing activities for the year ended April 30, 2023.
Our future capital requirements are difficult to forecast and will depend on many factors, but we believe that our cash on hand will enable us to fund operating expenses for at least the next 12 months following the issuance of our consolidated financial statements.
Our future capital requirements are difficult to forecast and will depend on many factors, but we believe that our cash on hand will enable us to fund operating expenses for at least the next 12 months following the issuance of our consolidated financial statements. 86 Year ended April 30, 2024, compared to year ended April 30, 2023 Revenue We had no revenues in the fiscal years ended April 30, 2024, and 2023.
During the year ended April 30, 2022, we received approximately $87.4 million from the First 2021 Offering, the Second 2021 Offering and the 2021 Warrant Exercises. 76 Repurchase Programs Pursuant to the First Repurchase Program, we may acquire up to $10 million of our outstanding shares of common stock, as determined by a formula based on the market price of the common stock and average daily volumes.
Repurchase Programs Pursuant to the First Repurchase Program, we may acquire up to $10 million of our outstanding shares of common stock, as determined by a formula based on the market price of the common stock and average daily volumes.
Discussion of Operating, Investing and Financing Activities The following table presents a summary of our sources and uses of cash for the years ended April 30, 2023 and 2022.
See Note 2 of the Consolidated Financial Statements to this Report for more information. Discussion of Operating, Investing and Financing Activities The following table presents a summary of our sources and uses of cash for the years ended April 30, 2024 and 2023.
Financing Activities: The cash used in financing activities for the year ended April 30, 2023 was mainly attributable to the Repurchase Programs, and the cash provided for the year ended April 30, 2022, is mainly attributable to the proceeds from the First 2021 Offering and the Second 2021 Offering. 78 Critical Accounting Estimates and Policies Our Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S.
For the year ended April 30, 2023, the cash and cash equivalents used is mainly attributable to the Repurchase Programs of approximately $13,561,000. 88 Critical Accounting Estimates Our Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
The decrease in cash is attributable to the repurchase of our common stock pursuant to the Repurchase Programs, recorded as treasury stock and an increase in our operating expenses. 2021 Underwritten Offering On August 9, 2021, we entered into an underwriting agreement with H.C. Wainwright & Co.
The decrease in cash is attributable to the repurchase of our common stock pursuant to the Repurchase Programs, recorded as treasury stock and an increase in our operating expenses.
Year Ended April 30, 2023 Year Ended April 30, 2022 Net cash used in operating activities: $ (3,793,731 ) $ (4,117,319 ) Net cash used in investing activities: $ – $ – Net cash provided by (used in) financing activities: $ (13,559,743 ) $ 87,311,244 Effect of currency rate exchange $ (7,246 ) $ 4,625 Increase (decrease) in cash $ (17,360,720 ) $ 83,198,550 Operating Activities: The cash used in operating activities for the years ended April 30, 2023 and 2022 is a result of our net losses offset by securities issued for services and compensation, changes to prepaid expenses, accounts payable and accrued expenses.
Year Ended April 30, 2024 Year Ended April 30, 2023 Net cash used in operating activities: $ (2,151,457 ) $ (3,793,731 ) Net cash used in investing activities: $ (5,000,000 ) $ – Net cash used in financing activities: $ (10,708,003 ) $ (13,559,743 ) Effect of currency rate exchange $ (508 ) $ (7,246 ) Increase (decrease) in cash $ (17,859,968 ) $ (17,360,720 ) Operating Activities: The cash and cash equivalents used in operating activities for the years ended April 30, 2024 and 2023 is a result of our net losses from operations offset by securities issued, assets impaired, changes in fair values of warrant liability, derivative liability, note receivable, warrant asset, changes to prepaid expenses, accounts payable and accrued expenses.
The Placement Agent Warrants have an exercise price of $6.25 per share, were exercisable immediately upon issuance, and expire five years following the date of issuance.
The Series A Warrants are exercisable for Femasys Shares immediately at an exercise price of $1.18 per share and expire five years from the date of issuance.
Other income, net for the year ended April 30, 2023 is attributable to interest income of $1,937,499 net settlement of accounts payable of $152,976 and net of other income and expense of $49,026. Other income, net for the year ended April 30, 2022 is attributable to interest income of $157,645 net of interest expense and other expenses of $4,792.
Other income, net for the year ended April 30, 2023 is attributable to interest income of $1,937,499 net settlement of accounts payable of $152,976 and net of other income and expense of $49,026. 87 Loss on write-off of long-term asset For the year ended April 30, 2024, the Company recorded an asset loss of $1,572,193, related to the Company’s investment in SG Austria, reducing the carrying value of such investment to zero.
We aim to assess this regularly to provide accurate information to our shareholders. 75 Liquidity and Capital Resources As of April 30, 2023, our cash and cash equivalents totaled approximately $68 million, compared to approximately $85.4 million as of April 30, 2022.
Liquidity and Capital Resources As of April 30, 2024, our cash and cash equivalents totaled approximately $50.2 million, compared to approximately $68 million as of April 30, 2023. Working capital was approximately $43 million as of April 30, 2024, and approximately $67.6 million as of April 30, 2023.
The increase is mainly attributable to increases in director fees and legal and professional expenses, net of decreases in R&D costs and compensation expense.
Operating Expenses Our total operating expenses during the year ended April 30, 2024 were $8,520,008, representing an increase of $2,064,514 compared to the year ended April 30, 2023. The increase is mainly attributable to increases in compensation expenses, director fees and general and administrative expenses, net of decreases in R&D and legal and professional expenses.
Operating expenses: Year ended April 30, 2023 Change - Increase (Decrease) and Percent Year ended April 30, 2022 R&D $ 468,536 $ (222,401 ) $ 690,937 (32% ) Compensation expense $ 1,234,956 $ (309,795 ) $ 1,544,751 (20% ) Director fees $ 951,347 $ 694,857 $ 256,490 271% General and administrative, legal and professional $ 3,800,655 $ 1,900,819 $ 1,899,836 100% 77 Loss from Operations Loss from operations during the year ended April 30, 2023 was $6,455,494, an increase of $2,063,480 compared to the year ended April 30, 2022.
Operating expenses: Year ended April 30, 2024 Change - Increase (Decrease) and Percent Year ended April 30, 2023 R&D $ 407,431 $ (61,105 ) $ 468,536 (13% ) Compensation expense $ 1,322,414 $ 87,458 $ 1,234,956 7% Director fees $ 1,141,215 $ 189,868 $ 951,347 20% Impairment of asset $ 2,000,000 $ 2,000,000 – – General and administrative, legal and professional $ 3,648,948 $ (151,707 ) $ 3,800,655 (4% ) Loss from Operations Loss from operations during the year ended April 30, 2024 was $8,520,008, an increase of $2,064,514 compared to the year ended April 30, 2023.
The common warrants sold in the First 2021 Offering have an exercise price of $4.25 per share, were exercisable immediately upon issuance, and expire five years following the date of issuance. The pre-funded warrants sold in the First 2021 Offering have an exercise price of $0.001 per share, were exercisable immediately upon issuance, and do not have an expiration date.
The Long-Term Warrants are exercisable for TNF Common Shares immediately, at an exercise price of $1.816 per share and expire five years from the date of issuance. The Short-Term Warrants are exercisable for TNF Common Shares immediately, at an exercise price of $1.816 per share and expire 18 months from the date of issuance.
On November 17, 2021, our Registration Statement on Form S-3 registering the resale of the shares of common stock underlying the Series A Warrants and the Placement Agent Warrants was declared effective by the U.S. Securities and Exchange Commission (“Commission”).
In connection with the PIPE, we entered into a registration rights agreement, pursuant to which we filed a Registration Statement on Form S-3 (File No. 333-272569) to register the resale of the shares underlying the Series B Preferred Shares and the PIPE Warrants. Such Registration Statement was declared effective by the Commission on September 29, 2023.
Removed
We are working to advance clinical research and development of new cellular-based therapies in oncology and diabetes. We are actively engaged preparing for a clinical trial in LAPC using encapsulated live cells like those used in the previous Phase 1/2 and Phase 2 clinical trials discussed above.
Added
Business under the Section entitled, “Clinical Hold” of this Report. 82 Private Placement On May 9, 2023, we entered into a securities purchase agreement with certain accredited investors, pursuant to which we issued and sold, in a private placement (the “PIPE”), an aggregate of (i) 35,000 Series B Preferred Shares, initially convertible into up to 8,750,000 shares of common stock at a conversion price of $4.00 per share, and (ii) warrants (the “PIPE Warrants”) to acquire up to 8,750,000 shares of common stock at an exercise price of $4.00 per share.
Removed
We are also developing a way to delay the production and accumulation of malignant ascites that results from many types of abdominal cancerous tumors. Our therapy for malignant ascites involves using the same encapsulated cells we employ for pancreatic cancer but placing the encapsulated cells in the peritoneal cavity of a patient and administering ifosfamide intravenously.
Added
Each Series B Preferred Share and accompanying PIPE Warrants were sold together at a combined offering price of $1,000. The terms of the Preferred Shares are as set forth in the Certificate of Designations of Series B Convertible Preferred Stock of PharmaCyte Biotech, Inc.
Removed
In addition to these cancer programs, we have also been considering ways to exploit the benefits of the Cell-in-a-Box ® technology to develop therapies for cancer that involve prodrugs based upon certain constituents of the Cannabis plant.
Added
(the “Certificate of Designations”), which was filed and became effective with the Secretary of State of the State of Nevada on May 10, 2023. The PIPE Warrants are immediately exercisable and expire 5 years from issuance.
Removed
However, until the FDA allows us to commence our clinical trial in LAPC and we are able to validate our Cell-in-a-Box ® encapsulation technology in a clinical trial, we are not spending any further resources developing our Cannabis Program.
Added
For descriptions of the Series B Preferred Shares and the PIPE Warrants, see “Note 12 – Preferred Stock” and Note 6 – Stock Options and Warrants,” respectively. Femasys Transaction On November 14, 2023, we entered into a securities purchase agreement (the “Femasys Purchase Agreement”) with Femasys Inc.
Removed
Finally, we have been developing a potential therapy for Type 1 diabetes and insulin-dependent Type 2 diabetes Our product candidate for the treatment of diabetes consists of encapsulated genetically modified insulin-producing cells. The encapsulation will be done using the Cell-in-a-Box ® technology.
Added
(“Femasys”), pursuant to which we purchased from Femasys (i) senior unsecured convertible notes (the “Notes”) in an aggregate principal amount of $5,000,000, convertible into shares of Femasys common stock, par value $0.001 per share (the “Femasys Shares”) at a conversion price of $1.18 per share, (ii) Series A Warrants (the “Series A Warrants”) to purchase up to an aggregate of 4,237,288 Femasys Shares at an exercise price of $1.18 per share, and (iii) Series B Warrants (the “Series B Warrants” and, together with the Series A Warrants, the “Femasys Warrants”) to purchase up to an aggregate of 4,237,288 Femasys Shares at an exercise price of $1.475 per share (collectively, the “Femasys Transaction”).
Removed
Implanting these encapsulated cells in the body is designed to function as a bio-artificial pancreas for purposes of insulin production. 74 Reverse Stock Split Effective July 12, 2021, we filed a Certificate of Change to our Articles of Incorporation, as amended (the “Articles of Incorporation”) with the Nevada Secretary of State that authorized a 1:1500 reverse stock split of our common stock.
Added
The Femasys Purchase Agreement contains certain representations and warranties, covenants and indemnities customary for similar transactions.
Removed
The reverse stock split resulted in reducing the authorized number of shares of our common stock from 50 billion to thirty-three million three hundred thirty-three thousand three hundred thirty-four with a par value of $0.0001 per share. Any fractional shares resulting from the reverse stock split were rounded up to the next whole share.
Added
Pursuant to the Femasys Purchase Agreement, we have the right to nominate one individual to serve on Femasys’ board of directors (the “Femasys Board”) until the earlier of (a) when the Company beneficially owns less than 4.99% of the number of Femasys Shares outstanding and (b) the repayment of the Notes in full (such time, the “Investor Board Seat Fall-Away”).
Removed
The par value remained $0.0001 per share. COVID-19 Impact on Our Financial Condition and Results of Operations We face the ongoing risk that the coronavirus pandemic may slow our operations, our preclinical studies or the eventual enrollment of our planned clinical trial.
Added
In addition, we agreed to a standstill until the later of (a) our nominee remaining on the Femasys Board and (b) 12 months after the Investor Board Seat Fall-Away, during which period we may not, among other things, acquire additional securities of Femasys other than pursuant to the Notes or Femasys Warrants.
Removed
In order to prioritize patient health and that of the investigators at clinical trial sites, we may need monitor enrollment of patients in our clinical study. In addition, some patients may be unwilling to enroll in our trials or be unable to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services.
Added
The Notes are senior unsecured obligations of Femasys and accrue interest at a rate of 6.00% per annum, payable annually, in cash or Femasys Shares at Femasys’ option, and mature two years after the date of issuance. The Notes are convertible into Femasys Shares at our election at any time at an initial conversion price of $1.18.
Removed
These and other factors outside of our control could delay our ability to conduct clinical trials or release clinical trial results.
Added
The conversion price is subject to customary adjustments for stock dividends, stock splits, reclassifications and similar corporate events. Femasys agreed in the Femasys Purchase Agreement and the Notes not to issue or sell any of its equity securities at a price below the then-current conversion price for a period of 18 months after closing, subject to certain exceptions.
Removed
In addition, the effects of the ongoing coronavirus pandemic may also increase non-trial costs such as insurance premiums, increase the demand for and cost of capital, increase loss of work time from key personnel, and negatively impact our key clinical trial vendors.
Added
Beginning six months after issuance, Femasys may require us to convert our Notes into Femasys Shares if the closing price of the Femasys Shares exceeds $2.36 per share (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events) for 10 consecutive trading days and the daily dollar trading volume of the Femasys Shares exceeds one million dollars ($1,000,000) per day during the same period and certain equity conditions described in the Notes are satisfied. 83 The Notes provide for certain events of default, including, among other things, Femasys’ failure to file and maintain an effective registration statement covering the sale of the securities registrable pursuant to a registration rights agreement and Femasys’ failure to pay any amounts due to us when due.
Removed
Working capital was approximately $67.6 million as of April 30, 2023, and approximately $84.8 million as of April 30, 2022.
Added
In connection with an event of default, we will be able to require Femasys to redeem in cash any or all of our Notes at a premium of 115%.
Removed
(“Wainwright”), pursuant to which we offered and sold an aggregate of 2,630,385 shares of common stock, and 899,027 pre-funded warrants to purchase common stock, and common warrants to purchase 4,028,528 shares of common stock (the “First 2021 Offering”).
Added
Under the terms of the Notes, Femasys is subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition and investment transactions, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends, distributions or redemptions, and the transfer of assets, among other matters.
Removed
The gross proceeds of the First 2021 Offering were $15 million, before deduction of underwriting discounts, commissions, and estimated offering expenses. Wainwright acted as the exclusive placement agent for the Second 2021 Offering pursuant to an engagement letter with the Company dated April 26, 2021 (the “Wainwright Engagement Letter”).
Added
Femasys has the right to call the exercise of the Series A Warrants if the closing price of the Femasys Shares exceeds 200% of the exercise price for 10 consecutive trading days and the daily dollar trading volume of the Femasys Shares exceeds one million dollars ($1,000,000) per day during the same period and certain equity conditions are satisfied.
Removed
Pursuant to the Wainwright Engagement Letter and in connection with the First 2021 Offering, we paid Wainwright a placement agent fee equal to 7.5% of the aggregate gross proceeds and a management fee equal to 1.0% of the gross proceeds, and we issued Wainwright warrants to purchase up to [ ] shares of common stock (the “Placement Agent Warrants”).
Added
The Series B Warrants are exercisable for Femasys Shares immediately at an exercise price of $1.475 per share and expire one year from the date of issuance.
Removed
In August 2021, we received twenty-seven (27) exercise notices from holders of the common warrants issued in the First 2021 Offering, pursuant to which we received approximately $10,720,000 and issued 2,522,387 shares of common stock (the “2021 Warrant Exercises”). 2021 Registered Direct Offering and Concurrent Private Placement On August 19, 2021, we entered into a securities purchase agreement with certain institutional investors, pursuant to which we sold (i) 8,430,000 shares of common stock and pre-funded warrants to purchase up to 5,570,000 shares of common stock in a registered direct offering and (ii) unregistered warrants to purchase up to 7,000,000 shares of common stock (the “Series A Warrants”) in a concurrent private placement (collectively, the “Second 2021 Offering”).
Added
Femasys has the right to call the exercise of the Series B Warrants if the closing price of the Femasys Shares exceeds 200% of the exercise price for 10 consecutive trading days and the daily dollar trading volume of the Femasys Shares exceeds one million dollars ($1,000,000) per day during the same period and certain equity conditions are satisfied.
Removed
The pre-funded warrants sold in the Second 2021 Offering have an exercise price of $0.001 per share, were exercisable immediately upon issuance, and do not have an expiration date. The Series A Warrants have an exercise price of $5.00 per share, were exercisable immediately upon issuance, and expire five years following the date of issuance.
Added
In connection with the Femasys Transaction, we entered into a registration rights agreement with Femasys, pursuant to which Femasys was required to file a resale registration statement with the Commission, registering 100% of the shares issuable pursuant to the Notes and the Femasys Warrants.
Removed
Wainwright acted as the exclusive placement agent for the Second 2021 Offering pursuant to the Wainwright Engagement Letter.
Added
In connection with the Femasys Transaction, we entered into a collaboration agreement with Femasys, dated November 14, 2023, whereby, if the Company and Femasys agree to conduct research activities or enter into a research plan in connection with discussing, evaluating and seeking technology that may be available to in-license or acquire with a view to enhancing the existing products of Femasys or adding new complementary products, we will establish a joint research committee with two representatives of Femasys and one representative of the Company to oversee the execution of the research plan and coordinate research activities.
Removed
Pursuant to such engagement letter and in connection with the Second 2021 Offering, we paid Wainwright a placement agent fee equal to 7.5% of the aggregate gross proceeds and a management fee equal to 1.0% of the gross proceeds, and we issued Wainwright an additional 1,050,000 Placement Agent Warrants.
Added
TNF Transaction On May 20, 2024, we entered into a securities purchase agreement (the “TNF Purchase Agreement”) with TNF Pharmaceuticals, Inc.
Removed
We received gross proceeds from the Second 2021 Offering, before deducting placement agent fees and other estimated offering expenses payable by the Company, of approximately $70 million.
Added
(f/k/a MyMD Pharmaceuticals, Inc.) (“TNF”), pursuant to which we purchased from TNF (i) shares of TNF’s Series G Convertible Preferred Stock (the “TNF Preferred Shares”), convertible into 3,854,626 shares of TNF’s common stock, par value $0.001 per share (the “TNF Common Shares”), (ii) warrants to purchase up to 3,854,626 TNF Common Shares with a five-year term (the “Long-Term Warrants”) and (iii) warrants to purchase up to 3,854,626 TNF Common Shares with an 18-month term (the “Short-Term Warrants” and, together with the Long-Term Warrants, the “TNF Warrants”) for an aggregate purchase price of $7,000,000 (the purchase of the TNF Preferred Shares, the Long-Term Warrants and the Short-Term Warrants, the “TNF Transaction”).
Removed
Year ended April 30, 2023, compared to year ended April 30, 2022 Revenue We had no revenues in the fiscal years ended April 30, 2023, and 2022. Operating Expenses Our total operating expenses during the year ended April 30, 2023 were $6,455,494, representing an increase of $2,063,480 compared to the year ended April 30, 2022.
Added
Pursuant to the TNF Purchase Agreement, we have the right to participate in future sales of TNF’s equity and equity-linked securities until the second anniversary of the closing or the date on which no TNF Preferred Shares remain outstanding, whichever is earlier.
Removed
Research and Development Expenses R&D expenses consist of costs incurred for direct and overhead-related research expenses and are expensed as incurred. Costs to acquire technologies, including licenses, which are utilized in R&D and that have no alternative future use are expensed when incurred.
Added
Additionally, we have the right to nominate one individual to serve on TNF’s board of directors until the Company no longer beneficially owns 20% of the TNF Common Shares on an as-converted basis. 84 The terms of the TNF Preferred Shares are as set forth a certificate of designations (the “TNF Certificate of Designations”), which TNF filed with the Secretary of State for the State of Delaware on May 21, 2024.
Removed
Technology developed for use in our product candidates is expensed as incurred until technological feasibility has been established. Stock-Based Compensation Our stock-based compensation plans are described in Note 4 and 5 of the Notes of the Consolidated Financial Statements to this Report.
Added
The TNF Preferred Shares are convertible into TNF Common Shares at our election at any time at an initial conversion price of $1.816.
Removed
We follow the provisions of ASC 718, Compensation - Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees. Net Income (Loss) Per Share Basic net income (loss) per share of common stock is computed using the weighted-average number of shares of common stock outstanding.
Added
The conversion price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of TNF Common Shares, or securities convertible, exercisable or exchangeable for TNF Common Shares, at a price below the then-applicable conversion price (subject to certain exceptions).
Removed
Diluted net income (loss) per share of common stock is computed using the weighted-average number of shares of common stock and shares of common stock equivalents outstanding.
Added
At any time after the issuance date of the TNF Preferred Shares, TNF has the option to redeem in cash all or any portion of the outstanding TNF Preferred Shares then outstanding at a premium upon notice to the Company.
Removed
Potentially dilutive stock options and warrants to purchase 10,172,116 and 10,813,635 post reverse stock split shares of common stock at April 30, 2023 and 2022, respectively, were excluded from the computation of diluted net income (loss) per share because the effect would be anti-dilutive.
Added
Pursuant to the TNF Certificate of Designations, we will be entitled to dividends of 10% per annum, compounded monthly, which will be payable in cash or in TNF Common Shares at our option.
Removed
New Accounting Pronouncements During the current and prior year, there were no new accounting pronouncements that need to be disclosed in the Company’s consolidated financial statements.
Added
Upon the occurrence and during the continuance of a Triggering Event (as defined in the TNF Certificate of Designations), the TNF Preferred Shares will accrue dividends at the rate of 15% per annum. Upon conversion or redemption, we are entitled to receive a dividend make-whole payment.
Added
We will be entitled to vote with holders of the TNF Common Shares on as as-converted basis, with the number of votes to which we are entitled to be calculated assuming a conversion price of $2.253 per share.
Added
TNF’s ability to settle conversions and make dividend make-whole payments by issuing TNF Common Shares is subject to certain limitations set forth in the TNF Certificate of Designations.

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