Development

Integrated Pharmaceuticals, Inc. (“IntePharm,” “we” or the “Company”) was incorporated in Idaho in August 1969 as an exploratory mining company. In the late 1990s, our mining prospects appeared dim, and our board of directors decided to change our business focus. In 2000, we acquired Advanced Process Technologies, Inc., a Massachusetts corporation (“APTI”), in a share exchange in which 6,000,000 shares of IntePharm common stock were issued to the founders and a director of APTI, resulting in their ownership of about 82.5% of our common stock. As a result, we were transformed from a mining exploration company with no business activity or prospects into a biotechnology company with strong research and development capabilities. From 2001 through January 2003, we engaged in contract research and development related to the production of pre-clinical therapeutic proteins for treatment of cancer, angiogenesis and osteoporosis. In January 2003, we decided to concentrate primarily on the development of our own technology and production capacity. We changed our business model in this manner so that we could retain for our own use the intellectual property we develop and commercialize our proprietary technologies with production facilities that we hoped to develop. During 2003 and 2004, we directed our efforts towards the establishment of a production facility and raising capital to finance that facility and its operations. During 2005, we completed construction of our production facility and focused on sales and new product development. As of the date of this Form 10-KSB, we have few customers and have not yet generated meaningful cash flow from operations.

We have not been involved in any bankruptcy, receivership or similar proceedings during the last three years.

Business of the Issuer

We are a biotechnology company dedicated to the production of pharmaceuticals, specialty chemicals and compounds and food products for sale to businesses in the pharmaceutical, neutraceutical, food and agriculture industries. We focus on compounds and food products that have proven therapeutic or nutritional value in humans, plants and/or animals, but our products also have industrial uses. We use new technologies to make our products. We expect to be a bulk supplier of our products, and to sell them principally to businesses, not to individual consumers.



We create our products by using biotechnology and pharmaceutical science to manipulate basic materials — typically carbohydrates — to alter their structure and interactive characteristics. Our intellectual property helps us to manipulate these materials chemically, altering their size, purity, shape, solubility, interactivity and chemical characteristics to produce a wide range of functionality with important business uses.

We look for ways to engineer production processes so that they consume less energy and generate less waste than conventional production processes. We strive to reduce the need for production equipment and waste handling equipment. Our goal is to develop processes that are less capital-intensive and less polluting. If we are successful in achieving these objectives, we can make products at lower cost than our competitors, sell our products at competitive prices, and maintain good margins.

Our officers have experience in building and operating biopharmaceutical and chemical production facilities. Using their scientific backgrounds, they have developed an expertise in improving production processes. We have two U.S. patents and nine pending patent applications in this field.

We have in-house research and development capabilities with expertise in advanced biology, chemistry, chemical engineering, metabolic engineering, bioprocess engineering, and computer simulation science. By “metabolic engineering”, we mean the quantitative understanding of cell functions as integrated molecular systems. By “bioprocess engineering”, we mean the design of cellular systems for use in bioreactors, taking into account the special challenges of technical production processes. And by “computer simulation science,” we mean the discipline of designing a model of an actual or theoretical physical system, executing the model on a digital computer, and analyzing the execution output. We use the results obtained through the application of this expertise for the development of efficient production programs.

Principal Products

Currently, our product line consists of carbohydrate derivatives, especially gluconates and lactates. Our patented production processes results in carbohydrate-derived products of exceptional purity. Carbohydrate derivative products are used in a wide range of pharmaceutical, nutraceutical, food and industrial products. Our product mix includes:

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Glucono-delta lactone, a substance that is used in the pharmaceutical, neutraceutical, bakery and dairy industries. For example, this product is used to extend the shelf life of doughnuts.