Item 405 of
Regulation S-B contained in this Form, and no disclosure will be contained, to
the best of Registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes [ ] No [X]
The
Registrant’s revenues for the fiscal year ended December 31, 2007 were
$Nil.
The
aggregate market value of the voting stock held by non-affiliates of the
Registrant as of April 9, 2008 was approximately $4,465,509
based upon the average bid and ask price on that date.
The
Registrant had 23,502,681
shares of common stock outstanding as of April 9, 2008.
__________
FORWARD
LOOKING STATEMENTS
This
Annual Report on Form 10-KSB (the “Annual Report”) contains forward-looking
statements within the meaning of the United States Private Securities Litigation
Reform Act of 1995. These statements are not historical or current
facts and are made pursuant to the safe harbor provisions of Section 27A of the
United States Securities Act of 1933, as amended (the “Securities Act”), and
Section 21E of the United States Securities Exchange Act of 1934, as amended
(the “Exchange Act”). These statements often can be identified by the
use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,”
“estimate,” “approximate” or “continue,” or the negative thereof or other
comparable terms. Forward-looking statements represent management’s
best judgment as to what may occur in the future and speak only as of the date
made. However, forward-looking statements are subject to risks and
uncertainties beyond the control of the company, including those set forth in
this Annual Report under “Risk Factors” in the section entitled “Management’s
Discussion and Analysis or Plan of Operations”, that could cause actual results
and events to differ materially from historical results and events and those
presently anticipated or projected. Accordingly, readers are
cautioned not to place undue reliance on any such forward-looking statements.
The company disclaims any obligation to update any forward-looking statements to
reflect events or circumstances after the date of any such statement or to
reflect the occurrence of anticipated or unanticipated events.
AVAILABLE
INFORMATION
TapImmune
Inc files annual, quarterly and current reports, proxy statements and other
information with the United States Securities and Exchange Commission (the
“Commission”). You may read and copy documents referred to in this
Annual Report that have been filed with the Commission at the Commission’s
Public Reference Room, at 100 F Street, NE, Washington, D.C.
20549. You may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. You can
also obtain copies of our Commission filings by accessing the Commission’s
website at http://www.sec.gov.
REFERENCES
In this
Annual Report, unless the context suggests otherwise, references to “we,” “us,”
“our”, “TapImmune”, the “Company” or the “company” refer to TapImmune Inc. and
its subsidiaries. All amounts in this Annual Report are in United
States dollars, unless otherwise indicated, and references to “dollars” or “$”
are to United States dollars.
__________
TABLE
OF CONTENTS
Item Page#
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ITEM 1.
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DESCRIPTION OF
BUSINESS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL
PROCEEDINGS
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ITEM 4.
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SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS
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ITEM 5.
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MARKET FOR COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
SECURITIES
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ITEM 6.
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MANAGEMENT’S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION
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ITEM 7.
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FINANCIAL
STATEMENTS
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ITEM 8.
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CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS OF ACCOUNTING AND FINANCIAL
DISCLOSURE
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ITEM 8A.CONTROLS AND
PROCEDURES
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ITEM 8B.OTHER
INFORMATION
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ITEM 9.
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DIRECTORS AND EXECUTIVE OFFICERS
OF THE REGISTRANT
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ITEM 10.EXECUTIVE
COMPENSATION
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ITEM 11.SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
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ITEM 12.CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
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ITEM 13.EXHIBITS
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ITEM 14.PRINCIPAL ACCOUNTANT FEES AND
SERVICES
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ITEM 15.FINANCIAL
STATEMENTS
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__________
PART I
ITEM
1. DESCRIPTION
OF BUSINESS
Company
Overview
We are a
biotechnology company whose strategic vision is to develop and market products
specializing in the application of the latest discoveries in cellular and
molecular immunology and cancer biology to the development of proprietary
therapeutics aimed at the treatment and eradication of cancer and prevention of
infectious diseases. Our technologies are based on an understanding
of the function of a protein “pump,” known as “TAP”, which is located within
cells and which is essential to the processing of foreign (microbial) or
autologous antigens, and subsequent presentation to the immune system for
eradication of the cancer or infected cell. We currently have none of
our product candidates on the market and are focusing on the development and
testing of our product candidates.
The
current standard therapies for cancer treatment include surgery, radiation
therapy and chemotherapy. However, we believe that these treatments
are not precise in targeting only cancerous cells and often fail to remove or
destroy all of the cancer. The remaining cancer cells may then grow
into new tumors, which can be resistant to further chemotherapy or radiation,
which may result in death. In the United States the American Cancer
Society estimates that in 2007 cancer will be the second leading cause of death
with an estimated 600,000 deaths from cancer annually.
Company
History
We
currently trade on the OTC Bulletin Board under the symbol “TPIM”.
We were
incorporated under the laws of the State of Nevada in 1991 under the name
“Ward’s Futura Automotive Ltd”. We changed our name a number of times
since 1991 and, in July 2002, we completed the acquisition of GeneMax
Pharmaceuticals Inc. (“GeneMax Pharmaceuticals”), a Delaware corporation, in a
reverse merger and changed our name to “GeneMax Corp”. As a result of
this transaction the former stockholders of GeneMax Pharmaceuticals then owned
75% of the total issued and outstanding shares of GeneMax
Corp. GeneMax Pharmaceuticals is now a wholly owned subsidiary of
TapImmune, and GeneMax Pharmaceuticals Canada Inc. (“GPCanada”), a British
Columbia corporation, is a wholly owned subsidiary of GeneMax
Pharmaceuticals. On June 28, 2007, we approved a name change to
TapImmune Inc.
The
Immunotherapy Industry for Cancer
Management
believes that there is a critical need for more effective cancer
therapies. Management further believes that the global market for
effective cancer treatments is large, and that immunotherapies representing
potential treatments for metastatic cancer are an unmet need in the area of
oncology.
The human
immune system appears to have the potential to clear cancers from the body,
based on clinical observations that some tumors spontaneously regress when the
immune system is activated. Most cancers are not very “immunogenic”,
however, meaning that the cancers are not able to induce an immune response
because they no longer express sufficient levels of key proteins on their cell
surface, known as Major Histocompatability Class I or MHC Class I
proteins. In healthy cells, these proteins provide the information to
the immune system that defines whether the cell is healthy or, in the case of
cancer or viral infection, abnormal. If the MHC Class I proteins
signal that the cells are abnormal, then the immune system’s T-cells are
activated to attack and kill the infected or malignant cell.
In many
solid cancer tumors the TAP protein system does not function and, therefore, the
immune system is not stimulated to attack the cancer. Management
believes that although a number of cancer therapies have been developed that
stimulate the immune system, these approaches have often proven ineffective
because the cancers remain invisible to the immune system due to this apparent
lack of or low expression of the TAP protein.
By
restoring TAP expression to TAP-deficient cells, the MHC Class I protein peptide
complexes could signal the immune system to attack the cancer. The
strategic vision of TapImmune is to be a product-driven biotechnology company,
focusing primarily on use of its patented TAP technology to restore the TAP
function within cancerous cells, thus making them immunogenic, or more “visible”
to cancer fighting immune cells. As part of its overall strategy, and
with additional funding, the company also intends to pursue the development of
prophylactic vaccines against infectious microbes. The company
intends to develop the TAP technology for use as a therapeutic cancer vaccine
that management believes will restore the normal immune
recognition. Management further believes that this cancer vaccine
strategy is the only therapeutic approach that addresses this problem of
“non-immunogenicity” of cancer. Management believes that this therapy
may have a strong competitive advantage over other cancer therapies, since
restoring the TAP protein will direct the immune system to specifically target
the cancerous cells without damaging healthy tissue.
TapImmune’s
Target Market and Strategy
We are
currently pursuing product development in oncology. With additional
funding, we will also pursue product development in prophylactic vaccines. The
initial development process is the same for both therapeutic and prophylactic
vaccines, so some parallel development will take place. Cancer
encompasses a large number of diseases that affect many different parts of the
human body. The diversity of cancer types and their overall
prevalence create a large need for new and improved
treatments. Management believes that there is a significant market
opportunity for a cancer treatment that utilizes the highly specific defense
mechanisms of the immune system to attack cancers. Based upon recent
market reports, management believes that the market for cancer vaccines could be
approximately $6 billion by 2010, with a compounded annual growth rate of
104%. Our goal is to have the FDA approve our cancer vaccine within
the next few years so that we can secure a portion of this market.
Management
also believes that our prophylactic vaccine adjuvant will improve the creation
of new vaccines and enhance the efficacy of current vaccines. It will be a key
business development strategy to pursue partnerships and joint research &
development ventures with vaccine manufacturers and pharmaceutical companies to
bring new and improved vaccines to market. The market for
prophylactic vaccines is around $6 Billion and is expected to reach $11 Billion
in 2010 (Frost & Sullivan). Management believes that our adjuvant
will increase the potency of many of the currently available vaccines and lead
to the creation of better, more effective new vaccines, thereby allowing us to
participate in this large market through novel new products and in combination
with existing vaccines.
Research
and Development Efforts
We direct
our research and development efforts towards the development of
immunotherapeutic and prophylactic vaccine products for the treatment of cancer
and protection against pathogenic microbes respectively, using our proprietary
TAP technology. We have focused our efforts initially on the
development of a therapeutic vaccine for applications in cancer treatment while
demonstrating the breadth of the TAP technology for the development of
prophylactic vaccines and its ability to complement currently approved and
emerging products in both cancer therapeutics and prophylactic vaccines against
microbes. This approach allows us to pursue our own internal product
development while positioning us to enter into multiple partnerships and
licensing agreements. We previously produced, and still plan
to
produce
in the future, our TAP vaccines by inserting the TAP gene material into a
proprietary, modified adeno virus licensed from Crucell Holland B.V. (“Crucell”)
or a generic HEK293 adenovirus, and it will and has been used as the
prototype vaccine product for performing in-vitro immunological and animal
preclinical studies. We have organized our research and development
efforts to take advantage of our partners’ capabilities while reducing our
overhead costs. Our relationship with the University of British
Columbia (“UBC”) has allowed us to conduct contract research and development by
employing highly skilled scientists at UBC. The research and
development team performs the basic research on the biological function of TAP
and related licensed technology as well as preclinical animal studies in cancer
and infectious diseases. We also receive technical support from our
licensing partner, Crucell, in the development of our TAP adeno virus based
vaccine product. Further, we will initiate our contract with SAFC
Pharma (Sigma Aldrich), formerly, Molecular Medicine BioServices, Inc.
“(Molecular Medicine”) for the production of clinical grade vaccine product to
be used in preclinical and clinical studies that require production facilities
with Good Manufacturing Practices (“GMP”) and Good Laboratory Practices (“GLP”)
certification.
Products
and Technology in Development
TAP
Cancer Vaccine
We
previously developed our TAP Cancer Vaccine at the UBC Biomedical Research
Centre under an agreement we refer to in this Annual Report as our
“Collaborative Research Agreement”. This therapeutic cancer vaccine
candidate, to be tested in preclinical toxicology studies, will, if successfully
developed, include the patented use of the TAP-1 gene to restore the TAP
protein, with the objective being to develop the TAP technology as a therapeutic
cancer vaccine that will restore the normal immune recognition of cancer
cells. The TAP Cancer Vaccine will be targeted at those cancers that
are deficient in the TAP protein, which include breast cancer, prostate cancer,
lung cancer, liver cancer, melanoma, renal cancer and colorectal
cancer.
Management
believes that the TAP Cancer Vaccine will deliver the genetic information
required for the production of the TAP protein in the target cancer
cell. This will trigger the cancer cell’s ability to effectively
identify itself to the body’s immune system by transporting the cancer antigen
peptides to the cell surface using the individual’s specific MHC Class I
proteins. As a result, we believe that the immune response could be
targeted to the entire repertoire of cancer antigen peptides produced by the
cancer cell, rather than just to a single cancer antigen, as delivered by
current cancer vaccines. The TAP Cancer Vaccine could allow the
immune response to respond to the cancer even if the TAP protein and genetic
information were only delivered to a small portion of the cancer
cells. In addition, the TAP Cancer Vaccine would generate an immune
response to any TAP-deficient cancer, regardless of the patient’s individual
genetic variability either in the MHC Class I proteins or in the cancer-specific
proteins and resultant peptides.
In
general, a “cancer vaccine” is a therapy whose goal is to stimulate the immune
system to attack tumors. Management believes that most current cancer
vaccines contain either cancer-specific proteins that directly activate the
immune system or contain genetic information, such as DNA, that encodes these
cancer-specific proteins. Management believes that there are a number
of key conditions that must be met before a cancer vaccine can be effective in
generating a therapeutic immune response: (i) the cancer antigen peptide
delivered by the vaccine has to be recognized by the immune system as “abnormal”
or “foreign” in order to generate a strong and specific T-cell response; (ii)
the same cancer antigen peptide has to be displayed on the surface of the cancer
cells in association with the MHC Class I proteins; and (iii) these cancer
antigen peptides then have to be sufficiently different from normal proteins in
order to generate a strong anti-tumor response.
If these
conditions are all met, then management believes that such cancer vaccines
should generate a sufficiently strong immune response to kill the cancer
cells. However, the identification of suitable cancer-specific
antigen proteins to use in these therapeutic vaccines has proven extremely
complex. In addition, the MHC Class I proteins are highly variable,
with over 100 different types in humans and, as a result, any one-cancer antigen
peptide will not produce an immune response for all
individuals. Cancers are “genetically unstable” and their proteins
are highly variable, so that the selected cancer antigen protein may result in
the immune system only attacking a small subset of the cancerous
cells.
Laboratory
Testing of the TAP Cancer Vaccine
Management
believes that the key milestone of efficacy in animal models of cancer has been
attained and that other scientific research teams have validated the
experimental data from these animal studies. The proof of principle
for the TAP technology as a cancer vaccine was established in research conducted
during the last ten years at UBC. The initial studies were conducted
using a small-cell lung cancer cell line that was derived from an aggressive,
metastatic cancer. These cells have multiple defects in the “antigen
presentation pathway” in that they are not detected by the immune
system. When the TAP protein was introduced into these cells, antigen
presentation was restored. In addition, a series of animal studies
have demonstrated the ability of TAP to restore an immune
response. This study was published in Nature Biotechnology (Vol. 18,
pp. 515-520, May 2000). Management believes that the TAP
technology has been further validated in melanoma, where animal studies similar
to the small-cell lung cancer studies described above were performed and similar
results were achieved.
Pre-Clinical
Testing
We have
completed pre-clinical animal testing of our TAP Cancer Vaccine to the extent
that is required as a prerequisite for further preclinical toxicology analysis
and Investigational New Drug (or “IND”) application to the FDA. The
pre-clinical testing of the TAP Cancer Vaccine to date included the evaluation
of several strains of vaccinia and adenovirus vectors to assess their respective
ability to deliver the correct genetic information allowing expression of the
TAP protein in tumors, the selection and licensing of the vector from Crucell
and the identification and entering into an agreement, that we refer to in this
Annual Report as our “Production Services Agreement”, with Molecular Medicine,
now SAFX Pharma, a GMP manufacturer, for subsequent production of the TAP Cancer
Vaccine. We have to complete the performance of toxicology studies
using the TAP Cancer Vaccine on at least two animal species to confirm its
non-toxicity. In addition, we must complete initial vaccine
production, and develop internal and external clinical trials, support personnel
and infrastructure before commencing clinical trials.
Once the
formal pre-clinical testing is completed, we intend to compile and summarize the
data and submit it to the United States Federal Drug Administration (or “FDA”)
and/or the Canadian Health Canada (or “HC”), and/or other national regulatory
agencies, in the form of an investigational new drug application. We
anticipate that these applications would include data on vaccine production,
animal studies and toxicology studies, as well as proposed protocols for the
Phase I human clinical trials, described below.
Phase
I Human Clinical Trials
Management
believes that, subject to the completion of remaining pre-clinical work and
financing, estimated at approximately $5,000,000, the Phase I human clinical
trials could commence in the first half of 2009. The Phase I human
clinical trials will be designed to provide data on the safety of the TAP Cancer
Vaccine when used in humans. We intend to conduct the Phase I
human clinical trials at the British Columbia Cancer Agency in Vancouver,
British Columbia, or other locations under evaluation. These trials
will be conducted in respect of certain carcinomas. We have presented
information on the
TAP
Cancer Vaccine to members of the Department of Advanced Therapeutics of the
British Columbia Cancer Agency, with the intent of obtaining their assistance in
the design and execution of the clinical study.
Clinical
trials to support new drug applications are typically conducted in three
sequential phases, although the phases may overlap. During Phase
I there is an initial introduction of the therapeutic candidate into healthy
human subjects or patients. The drug is tested to assess metabolism,
pharmacokinetics and pharmacological actions and safety, including side effects
associated with increasing doses. Phase II usually involves studies
in a limited patient population to assess the clinical activity of the drug in
specific targeted indications, assess dosage tolerance and optimal dosage and
continue to identify possible adverse effects and safety risks. If
the therapeutic candidate is found to be potentially effective and to have an
acceptable safety profile in Phase II evaluations, Phase III trials are
undertaken to further demonstrate clinical efficacy and to further test for
safety within an expanded patient population at geographically dispersed
clinical trial sites.
Future
Products and Technology
Peptide
Transfer Assay
We are
attempting to develop potential products that may stimulate or interrupt the
chain of events involved in certain immune system-related
diseases. One such potential product, referred to in this Annual
Report as the “Peptide Transfer Assay”, would be used to identify compounds
effective in the treatment of cancer, infectious diseases, autoimmune diseases
and transplant rejection. Autoimmune diseases include, but are not
limited to, psoriasis, rheumatoid arthritis, multiple sclerosis, myasthenia
gravis and diabetes. T cells and antibodies in the body’s immune
system normally identify and destroy foreign substances and cancerous
cells. Autoimmune diseases are generally caused by the abnormal
destruction of healthy body tissues when T cells and antibodies react against
normal tissue.
The
Peptide Transfer Assay is ready for development for high-throughput screening
and partnering. High-throughput screening is the use of robotics and
automated industrial processes used to speed up the drug discovery process,
testing large number of compounds against certain targets. Additional
funding will be required to exploit this opportunity, however, the technology
has been licensed and will continue to be protected by us. This technology is
not currently a focus for development.
Screen
for Regulators of Antigenicity
We
recently acquired via our agreement with UBC a drug discovery technology that
can be used to identify small molecule regulators of the immune
response. We refer to this technology in this Annual Report as the
Screen for Regulators of Antigenicity Technology. Management believes
that the Screen for Regulators of Antigenicity Technology can be used to screen
and select new drugs that regulate immune responses, and that it has relevance
to both cancers and viral diseases and in modulating transplant rejection and
autoimmune diseases. This technology is of interest but will only be
developed after successful development of the cancer and prophylactic
vaccines.
Strategic
Relationships
UBC
Collaborative
Research Agreement
In
September of 2000, through our wholly owned subsidiaries, GeneMax
Pharmaceuticals and GeneMax Canada, entered into a Collaborative Research
Agreement with the UBC to carry out further development of the TAP technologies
as a cancer vaccine and other commercial products, and to provide GeneMax
Pharmaceuticals with the option to acquire the rights to commercialize any
additional technologies developed under the agreement. Pursuant to
the Collaborative Research Agreement UBC retained all rights and title to all
inventions, improvements and discoveries that are conceived by employees of UBC
during the term of the Collaborative Research Agreement; however, UBC therein
granted us an option to obtain a royalty-bearing license to use such inventions,
improvements and discoveries that were not covered under the existing license
agreement and included improvements and enhancements of the licensed
technologies.
The
Collaborative Research Agreement, as amended, provided for payments to UBC in
the aggregate of $2,973,049 (CDN). In addition, we reimbursed UBC a
total of $55,812 (CDN) of patent expenditures in connection with technologies
licensed to us.
The
parties to the Collaborative Research Agreement had agreed to the principal
terms of a renegotiated agreement which would provide for an estimated annual
budget of $295,000 (CDN) (in quarterly installments of $73,750 (CDN)) to allow
for funding for one Ph.D. scientist and two support technicians. In
addition, UBC continued to provide us with access to university laboratories and
equipment at UBC.
License
Agreement
In March
of 2000 we entered into a license agreement with UBC and Dr. Wilfred A.
Jefferies, then our Chief Scientific Officer and a director, which is referred
to in this Annual Report as the License Agreement, providing us with an
exclusive world-wide license to use certain technology developed by UBC and
Dr. Jefferies. The License Agreement allowed us to use the
technology associated with the patents entitled “Method for Enhancing Expression
of MHC-Class 1 Molecules Bearing Endogenous Peptides” and “Method of Identifying
MHC-Class 1 restricted Antigens Endogenously Processed by a Cellular Secretory
Pathway” and to
manufacture, distribute, market, sell, lease and license or sub-license products
derived or developed from the above licensed technologies until the later of
March 6, 2015 or the expiration of the last patent obtained under the License
Agreement, including the expiration of patents obtained from modifications to
existing patents. As consideration for entering into the License
Agreement we paid an initial license fee of $113,627.32 (CDN) and issued 500,000
GeneMax Pharmaceutical shares to the University of British Columbia; which were
subsequently exchanged for 500,000 (pre reverse stock split) shares of our
restricted common stock.
On
February 16, 2004, UBC granted us an exclusive, worldwide license to use a novel
assay technology to screen and select new drugs that regulate immune
responses. As consideration for entering into this license, which we
refer to in this Annual Report as the “Immune Response License”, we issued UBC
10,000 (pre reverse stock split) shares of our common stock and were required to
pay UBC an annual maintenance fee of $500 (CDN). The term for the
Immune Response License was the longer of either 20 years or the expiration of
the last patent licensed under the Immune Response License, including the
expiration of patents obtained from modifications to existing
patents.
Option
and Settlement Agreements
On
January 24, 2006, and in accordance with the terms and conditions of a certain
Option and Settlement Agreement (the “Option and Settlement Agreement”), dated
for reference January 23, 2006, as entered among each of us, UBC, Dr. Jefferies
and each of our predecessor and subsidiary companies, GeneMax Pharmaceuticals
and GPCanada, the parties thereto reached a definitive agreement pursuant to
which all existing financial claims by UBC (collectively, the “UBC Financial
Claims”) as against us under each of those certain “License Agreement” among us,
UBC and Dr. Jefferies dated March 6, 2000, as amended February 28, 2003
(“License Agreement #1”), and “License Agreement” between us and UBC dated
February 16, 2004 (“License Agreement #2” and, collectively, the “License
Agreements”), and under that certain “Collaborative Research Agreement” between
UBC and GPCanada dated May 6, 2005 (the “CRA”), are satisfied (the “Settlement”)
in consideration of UBC providing us with the consequent right to acquire,
outright, by way of assignment (the “Option to Purchase”), all of UBC’s right
title and interest in the technologies licensed to us under the terms of the
License Agreements, including the “Technology” as that term is defined in the
License Agreements, and all “Improvements” made prior to the date of execution
of the Option and Settlement Agreement in furtherance of the same (collectively,
the “Technology” thereunder); a copy of the Option and Settlement Agreement
having been attached as an Exhibit to the company’s Current Report on Form 8-K
which was filed on January 24, 2006.
In
accordance with the terms and conditions of the Option and Settlement Agreement,
and in order to keep the right and Option to Purchase the Technology granted to
us by UBC in good standing and in force and effect; and in order to maintain the
Settlement of all UBC Financial Claims consequent therein; we were obligated to
provide cash payment (“Purchase Price Payment”) and to maintain the current
status of UBC’s existing patent and patent pending applications respecting the
Technology (the “Purchase Price Patent Obligations”; and the Purchase Price
Payments and the Purchase Price Patent Obligations being, collectively, the
“Purchase Price”) to the order and direction of UBC in the aggregate amount of
$556,533 (CDN) (which also equate to the present UBC Financial Claims) prior to
December 31, 2006 (the end of the “Option Period”), and in due complete
satisfaction of the settlement of the UBC Financial Claims.
The
Option and Settlement Agreement replaced our previous disclosed (by way of
Current Report on Form 8-K dated December 23, 2005) “Letter of Intent” as
previously entered into between us and UBC.
On
December 18, 2006 we negotiated an extension with UBC of the January 24, 2006
Option and Settlement Agreement. Under the terms of the extension we
were obligated to pay UBC $216,533 (CDN) as follows:
|
|
(a)
|
$72,177
(CDN) on or before December 31, 2006;
(paid);
|
|
|
(b)
|
$72,178
(CDN) plus interest of $3,362 (CDN) on or before March 20, 2007; (paid);
and
|
|
|
(c)
|
$72,178
(CDN) plus interest of $1,423 (CDN) on or before May 31, 2007
(paid).
|
As of May
31, 2007 we completed our obligation with UBC and the technology assignment and
transfer was completed in the current fiscal year.
Crucell
On
August 7, 2003, we entered into an agreement with Crucell, which we refer
to in this Annual Report as the “Research License and Option
Agreement”. Pursuant to that agreement, Crucell granted us a
non-exclusive, worldwide license for Crucell’s adenovirus technology and an
option for a non-exclusive, worldwide commercial license to manufacture, use,
offer for sale, sell and import products using the licensed technology in the
therapy of human subjects by administering a modified and proprietary
adeno
virus
vector (used to package our TAP gene technology and deliver it to the target
cancer cell in the patient) including, but not limited to, therapeutic gene
sequence(s).
The
Research License and Option Agreement provided for bi-annual license maintenance
fees of 50,000 Euros, exclusive of applicable taxes, during the first two years
of the agreement, and an annual license maintenance fees of 75,000 Euros,
exclusive of applicable taxes, starting on the third anniversary until the
expiration of the agreement on August 7, 2008. Total obligations
under this agreement are 450,000 Euros.
To
December 31, 2005, we had made payments required totaling $115,490
(€100,000) to Crucell pursuant to the terms of the Research License and Option
Agreement. Pursuant to the terms of the Research License and Option
Agreement, a further $60,864 (€ 50,000) was due and payable on February 7,
2004 and a further $60,103 (€ 50,000) was due and payable on August 7, 2004
leaving $120,967 owing as of December 31, 2004 under the terms of the
agreement. Pursuant to the Research License and Option Agreement, if
a party defaults in the performance of or fails to be in compliance with any
material condition of this agreement, the Research License and Option Agreement
may be terminated if the default or noncompliance is not remedied or steps
initiated to remedy three months after receipt in writing to the defaulting
party. Effective June 6, 2005, Crucell gave us notice of default
whereby we had three months to remedy the default. On November 16,
2005, Crucell provided notice of Termination by Default due to our failure to
remedy the default within the required three month period.
In May of
2006 we negotiated a reinstatement of the original Research and License Option
Agreement with Crucell and paid Crucell on April 20, 2006 €123,590 (US$151,521)
in connection with the reinstatement. Under the revised terms of the
agreement, we will pay Crucell 12 monthly payments of €10,300 starting May 2006
(paid to October 31, 2006 as of December 31, 2007) and a €75,000 annual license
fee (not paid as of December 31, 2007, adjusted for CPI) in order to keep the
reinstated agreement in good standing. In January, 2008 we paid
$40,000 to the outstanding balance of €136,800, and are currently working with
Crucell to maintain our license and relationship as well as reaching a new
payment schedule for the outstanding fees.
SAFC
Pharma (Molecular Medicine)
On
March 18, 2003, we entered into a production service agreement; referred to
in this Annual. Report as the “PSA”, with Molecular Medicine of the United
States. The PSA provides for the performance of certain production
services by Molecular Medicine relating to the adenoviral vector product
containing our TAP gene technology. The product is required to
conduct pre-clinical toxicology studies and subsequent human clinical
trials.
We were
in breach of our contractual obligations with Molecular Medicine in respect of
payments due for Phase I of the project. The parties have agreed that
advance payments that had been made for subsequent phases could be allocated to
the Phase I deficiency so that all payments that were due under the PSA have now
been paid in full and we have a $78,000 surplus which can be applied towards
subsequent phases of the project.
In August
2005 we postponed production of our clinical grade TAP adeno based vaccine for
pre-clinical toxicology analysis with Molecular Medicine due to technical
difficulties related to the yields of vaccine. Crucell is currently
in the process of solving technical issues associated with production yields of
the vaccine. We have developed a second option and are preparing to initiate
viral construction on the best and most suitable cell line. We have a credit of
approximately $78,000 valid until the end of 2008 with Molecular Medicine
towards future vaccine production. Despite the technical difficulties
we anticipate production of a clinical grade TAP based vaccine to be produced
utilizing the adeno vector from Crucell
or our
in-house adeno virus vector to allow us to meet our milestones for completing
toxicology analysis by the end of 2008/early 2009.
National
Institute of Allergy and Infectious Diseases
On
October 21, 2003, we entered into an agreement, which we refer to in this
Annual Report as the “Biological Materials Transfer Agreement”, with the
National Institute of Allergy and Infectious Diseases (or “NIAID”), a division
of the Public Health Service (or “PHS”). The Biological Materials
Transfer Agreement provides for the license of NIAID’s Modified Vaccinia Ankara
virus for use in our research and product development. The licensed
technology and virus material will be used with the goal of developing a vaccine
platform capable of generating superior protective immune responses against
smallpox. Pursuant to the Biological Materials Transfer Agreement we
pay a non-refundable annual royalty of $2,500 per year. The
Biological Materials Transfer Agreement expires on November 5,
2008. PHS may terminate this agreement if we are in default in the
performance of any material obligation under this Agreement, and if the default
has not been remedied within ninety days after the date of written notice by PHS
of such default.
Other
Technology
On
February 16, 2004, we added to our technology portfolio by expanding the
License Agreement (now assigned under the purchase agreement) with UBC to
include a technological method that identifies agonists or antagonists antigen
presentation to the immune system by normal and cancerous
cells. Management believes that this technology can be used to screen
and select new drugs that regulate immune responses.
Intellectual
Property, Patents and Trademarks
Patents
and other proprietary rights are vital to our business operations. We
protect our technology through various United States and foreign patent filings,
and maintain trade secrets that we own. Our policy is to seek
appropriate patent protection both in the United States and abroad for its
proprietary technologies and products. We require each of our
employees, consultants and advisors to execute a confidentiality agreement upon
the commencement of any employment, consulting or advisory relationship with
us. Each agreement provides that all confidential information
developed or made known to the individual during the course of the relationship
will be kept confidential and not be disclosed to third parties except in
specified circumstances. In the case of employees, the agreements provide that
all inventions conceived of by an employee shall be our exclusive
property.
Patent
applications in the United States are maintained in secrecy until patents are
issued. There can be no assurance that our patents, and any patents
that may be issued to us in the future, will afford protection against
competitors with similar technology. In addition, no assurances can be given
that the patents issued to us will not be infringed upon or designed around by
others or that others will not obtain patents that we would need to license or
design around. If the courts uphold existing or future patents containing broad
claims over technology used by us, the holders of such patents could require us
to obtain licenses to use such technology.
Pursuant
to the acquisition agreement from The UBC we acquired the a portfolio of
intellectual property as follows:
Method of
Enhancing Expression of MHC Class I Molecules Bearing Endogenous
Peptides
On
March 26, 2002, the United States Patent and Trademark Office issued US
Patent No. 6,361,770 to UBC for the use of TAP-1 as an immunotherapy
against all cancers. The patent is titled “Method of Enhancing
Expression of MHC Class I Molecules Bearing Endogenous Peptides” and provides
comprehensive protection and coverage to both in vivo and ex vivo applications
of TAP-1 as a therapeutic against all cancers with a variety of delivery
mechanisms. The inventors were Dr. Jefferies, Dr. Reinhard
Gabathuler, Dr. Gerassinmoes Kolaitis and Dr. Gregor S.D. Reid, who
collectively assigned the patent to UBC under an assignment
agreement. The patent expires March 23, 2014. We have
pending applications for patent protection for this patent in Europe and in
Japan.
Method
of Identifying MHC Class I Restricted Antigens Endogenously Processed by a
Secretory Pathway
On
August 11, 1998, the U.S. Patent and Trademark Office issued US Patent
No. 5,792,604 to UBC, being a patent for the use of bioengineered cell
lines to measure the output of the MHC Class I restricted antigen presentation
pathway as a way to screen for immunomodulating drugs. The patent is
titled “Method of Identifying MHC Class I Restricted Antigens Endogenously
Processed by a Secretory Pathway.” This patent covers the assay which
can identify compounds capable of modulating the immune system. The
inventors were Dr. Jefferies, Dr. Gabathuler, Dr. Kolaitis and
Dr. Reid, who collectively assigned the patent to UBC under an assignment
agreement. The patent expires on March 12, 2016. We
have been granted patent protection for this patent in Finland, France, Germany,
Italy, Sweden Switzerland and the United Kingdom, and have applied for patent
protection in Canada and Japan.
TAP
Vaccines and other filings
On July
9, 2004, UBC filed a patent application with the U.S. Patent and Trademark
Office for patent protection for TAP vaccines as a method for increasing immune
responses. As of the date of this Annual Report we have received a
‘Notice of Allowance’ but the order granting a patent has not been
received. Other patent applications have been filed by us and UBC in
respect of our technologies and those currently under assignment. In
December 2006 , January, November and December 2007 , we made
additional filings as continuations or new filings with regard to the same
technologies as well as their applications in infectious diseases. We
also filed for a continuation and had reinstated a previously ‘unintentionally
abandoned’ patent. A clerical error at our previous patent counsel
caused a filing date to be erroneously missed. That patent is now in
good standing and notice of allowance has been received on a number of
claims. We intend to continue to work with UBC to file additional
patent applications with respect to any novel aspects of our technology to
further protect our intellectual property portfolio.
Competition
The
oncology industry is characterized by rapidly evolving technology and intense
competition. Many companies of all sizes, including a number of large
pharmaceutical companies as well as several specialized biotechnology companies,
are developing various immunotherapies and drugs to treat
cancer. There may be products on the market that will compete
directly with the products that we are seeking to develop. In
addition, colleges, universities, governmental agencies and other public and
private research institutions will continue to conduct research and are becoming
more active in seeking patent protection and licensing arrangements to collect
license fees and royalties in exchange for license rights to technologies that
they have developed, some of which may directly compete with our technologies
and products. These companies and institutions may also compete with
us in recruiting qualified scientific personnel. Many of our
potential competitors have substantially greater financial, research and
development, human and other resources than us. Furthermore, large
pharmaceutical companies may
have
significantly more experience than we do in pre-clinical testing, human clinical
trials and regulatory approval procedures. Such competitors may
develop safer and more effective products, obtain patent protection or
intellectual property rights that limit our ability to commercialize products,
or commercialize products earlier than we do.
Management
expects technology developments in the oncology industry to continue to occur at
a rapid pace. Commercial developments by any competitors may render
some or all of our potential products obsolete or non-competitive, which could
materially harm the company’s business and financial condition.
Management
believes that the following companies, which are developing various types of
similar immunotherapies and therapeutic cancer vaccines to treat cancer, could
be our major competitors: CellGenSys Inc., Corixa Corp., Dendreon Corp., Genzyme
Molecular Oncology, Therion Biologics Corp. and Transgene S.A.
Government
Regulation
United
States
The
design, research, development, testing, manufacturing, labeling, promotion,
marketing, advertising and distribution of drug products are extensively
regulated by the FDA in the United States and similar regulatory bodies in other
countries. The regulatory process is similar for a new drug
application, or NDA. The steps ordinarily required before a new drug
may be marketed in the United States, which are similar to steps required in
most other countries, include: (i) pre-clinical laboratory tests,
pre-clinical studies in animals, formulation studies and the submission to the
FDA of an initial NDA; (ii) adequate and well-controlled clinical trials to
establish the safety and effectiveness of the drug for each indication;
(iii) the submission of the NDA to the FDA; and (iv) review by an FDA
advisory committee and approval by the FDA.
Pre-clinical
tests include laboratory evaluation of product chemistry, preparation of
consistent test batches of product to what is known as GLP, toxicology studies,
animal pre-clinical efficacy studies and manufacturing pursuant to what is known
as GMP. The results of pre-clinical testing are submitted to the FDA
as part of an initial NDA. After the filing of each initial NDA, and
assuming all pre-clinical results have been approved, a thirty-day waiting
period is required prior to the commencement of clinical testing in
humans. At any time during this thirty-day period or at any time
thereafter, the FDA may halt proposed or ongoing clinical trials until the FDA
authorizes trials under specified terms. The initial NDA process may
be extremely costly and substantially delay development of
products. Moreover, positive results of pre-clinical tests will not
necessarily indicate positive results in subsequent clinical
trials.
After
successful completion of the required clinical trials, a NDA is generally
submitted. The NDA is usually reviewed by an outside committee
consisting of physicians, scientists, and at least one consumer
representative. The advisory committee reviews, evaluates and
recommends whether the application should be approved, but the FDA is not bound
by the recommendation of an advisory committee. The FDA may request
additional information before accepting a NDA for filing, in which case the
application must be resubmitted with the additional information. Once
the submission has been accepted for filing, the FDA or the advisory committee
reviews the application and responds to the applicant. The review
process is often extended by FDA requests for additional information or
clarification. The FDA cites 24 months as the median time for NDA
review.
If the
FDA evaluations of the NDA and the manufacturing facilities are favorable, the
FDA may issue an approval letter. An approval letter will usually
contain a number of conditions that must be met in order
to secure
final approval of the NDA and authorization of commercial marketing of the drug
for certain indications. The FDA may also refuse to approve the NDA
or issue a not approval letter, outlining the deficiencies in the submission and
often requiring either additional testing or information or withdrawal of the
submission.
The
manufacturers of approved products and their manufacturing facilities are
subject to continual review and periodic inspections. We have entered
into a contract with Molecular Medicine for commercial scale manufacturing of
the TAP Cancer Vaccine, therefore our ability to control compliance with FDA
manufacturing requirements will be limited.
Approved
drugs are subject to ongoing compliance requirements and identification of
certain side effects after any of the drug products are on the
market. This could result in issuance of warning letters, subsequent
withdrawal of approval, reformulation of the drug product, and additional
pre-clinical studies or clinical trials.
Canada
In
Canada, the Therapeutic Products Directorate and the Biologics and Genetic
Therapies Directorate of HC ensure that clinical trials are properly designed
and undertaken and that subjects are not exposed to undue
risk. Regulations define specific Investigational New Drug Submission
(or IND) application requirements, which must be complied with before a new drug
can be distributed for trial purposes. The Directorates currently
review the safety, efficacy and quality data submitted by the sponsor and
approve the distribution of the drug to the investigator. The sponsor
of the trial is required to maintain accurate records, report adverse drug
reactions, and ensure that the investigator adheres to the approved
protocol. Trials in humans should be conducted according to generally
accepted principles of good clinical practice. Management believes
that these standards provide assurance that the data and reported results are
credible and accurate, and that the rights, integrity, and privacy of clinical
trial subjects are protected.
Sponsors
wishing to conduct clinical trials in Phases I to III of development must
apply under a 30-day default system. Applications must contain the
information described in the regulations, including: a clinical trial
attestation; a protocol; statements to be contained in each informed consent
form, that set out the risks posed to the health of clinical trial subjects as a
result of their participation in the clinical trial; an investigator’s brochure;
applicable information on excipients (delivery vehicles); and chemistry and
manufacturing information.
The
sponsor can proceed with the clinical trial if the Directorates have not
objected to the sale or importation of the drug within 30 days after the date of
receipt of the clinical trial application and Research Ethics Board approval for
the conduct of the trial at the site has been obtained. Additional
information is available on Health Canada’s website -
www.hc-sc.gc.ca.
Other
Jurisdictions
Outside
the United States and Canada the company’s ability to market drug products is
contingent upon receiving marketing authorization from the appropriate
regulatory authorities. Management believes that the foreign
regulatory approval process includes all of the complexities associated with FDA
approval described above. The requirements governing the conduct of
clinical trials and marketing authorization vary widely from country to
country. At present, foreign marketing authorizations are applied for
at a national level, although within the European Union procedures are available
to companies wishing to market a product in more than one member
country.
Product
Liability and Insurance
Once we
commence the sale of our products into the market, we will face the risk of
product liability claims. Because we are not yet selling our
products, we have not experienced any product liability claims to date and we do
not yet maintain product liability insurance. Management intends to
maintain product liability insurance consistent with industry standards upon
commencement of the marketing and distribution of the TAP Cancer
Vaccine. There can be no assurance that product liability claims will
not exceed such insurance coverage limits, which could have a materially adverse
effect on our business, financial condition or results of operations, or that
such insurance will continue to be available on commercially reasonable terms,
if at all.
Employees
and/or Consultants
Mr. Denis
Corin is our President, Chief Executive Officer and Principal Executive Officer,
Mr. Patrick McGowan is our Secretary, Treasurer, Chief Financial Officer and
Principal Accounting Officer, and Dr. Wilfred Jefferies is our Principle
Scientist. These individuals are primarily responsible for all our
day-to-day operations. Other services are provided by outsourcing and
consultant service agreements. As of December 31, 2007, we did not
have any employees.
ITEM
2. PROPERTIES
We do not
own any real estate or other properties. Our registered office is
located at Unit 2, 3590 West 41st Avenue, Vancouver, British Columbia Canada,
V6N 3E6. On March 1, 2007, the Company entered into a five year lease
agreement for lab facilities in Vancouver, British Columbia,
Canada. The agreement requires monthly payments of $2,671 (CDN) plus
a share of operating costs during the first two years of the term, and monthly
payments of $2,820 (CDN) plus a share of operating costs for the final three
years.
ITEM
3. LEGAL
PROCEEDINGS
Management
is not aware of any legal proceedings contemplated by any government authority
or any other party involving the Company. As of the date of this
Annual Report, no director, officer or affiliate is (i) a party adverse to us in
any legal proceeding, or (ii) has an adverse interest to us in any legal
proceeding. Management is not aware of any other legal proceedings
pending or threatened against the Company.
ITEM
4. SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
|
ITEM
5.
|
MARKET
FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
PURCHASES OF EQUITY SECURITIES
|
Our
common stock is traded on the Over The Counter Bulletin Board (“OTCBB”) under
the symbol “TPIM.OB” and on the Frankfurt and Berlin Stock Exchanges under the
symbol “GX1.” The listing on the Berlin Stock Exchange was done
without the company’s knowledge and consent. The company has
attempted to have the Berlin Stock Exchange listing terminated, however, it has
not been able to do so.