AIM ImmunoTech Inc 10-Q for FY2021 Q3
AIM ImmunoTech Inc. (AIM)
About this 10-Q
AIM ImmunoTech Inc filed this 10-Q on November 15, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).
Headline figures
Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $33K
- down 8.3% from $36K a year earlier
- Net loss
- $3.83M
- compared with a net loss of $3.31M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For
the Quarterly Period Ended
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).
☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☐ | Large accelerated filer | ☐ | Accelerated filer |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒
shares of common stock were outstanding, and shares of series B preferred stock were outstanding as November 8, 2021.
PART I- FINANCIAL INFORMATION
ITEM 1: Financial Statements
AIM IMMUNOTECH INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except for share and per share data)
(Unaudited)
| September 30, 2021 | December 31, 2020 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Marketable securities | ||||||||
| Funds receivable from New Jersey net operating loss | ||||||||
| Accounts receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Right of use asset, net | ||||||||
| Patent and trademark rights, net | ||||||||
| Marketable securities, long term | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Current portion of operating lease liability | ||||||||
| Current portion of financing obligation | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Operating lease liability | ||||||||
| Financing obligation arising from sale leaseback transaction (Note 13) | ||||||||
| Redeemable warrants | ||||||||
| Commitments and contingencies (Notes 11, 12, 13, and 14) | ||||||||
| Stockholders’ equity: | ||||||||
| Series B Convertible Preferred Stock, stated value $ per share, shares designated, shares issued and outstanding | ||||||||
| Common Stock, par value $ per share, authorized shares: issued and outstanding , and , respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| 1 |
AIM IMMUNOTECH INC. AND SUBSIDIARIES
Consolidated Statement of Operations and Comprehensive Loss
(in thousands, except share and per share data)
(Unaudited)
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues: | ||||||||||||||||
| Clinical treatment programs - US | $ | $ | $ | $ | ||||||||||||
| Clinical treatment programs - Europe | ||||||||||||||||
| Total Revenues | ||||||||||||||||
| Costs and Expenses: | ||||||||||||||||
| Production costs | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total Costs and Expenses | ( | ) | ||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest and other income, net | ( | ) | ||||||||||||||
| Interest expense and other finance costs | ( | ) | ( | ) | ( | ) | ||||||||||
| Extinguishment of financing obligation and note payable | ( | ) | ||||||||||||||
| Gain on sale of fixed assets | ||||||||||||||||
| Redeemable warrants valuation adjustment | ( | ) | ||||||||||||||
| Gain from sale of Income tax operating losses | ||||||||||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive (loss), net of tax | ||||||||||||||||
| Reclassification adjustment for realized investment loss | ||||||||||||||||
| Change in unrealized loss on marketable securities available for sale | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares outstanding basic and diluted | ||||||||||||||||
See accompanying notes to consolidated financial statements.
| 2 |
AIM IMMUNOTECH INC. AND SUBSIDIARIES
Consolidated Statement of Changes in Stockholders’ Equity
For the Nine Months Ended September 30, 2021
(in thousands except share data)
(Unaudited)
| Series B Preferred | Common Stock Shares | Common Stock Par Value | Additional Paid-in Capital | Accumulated other Comprehensive
Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||
| Balance December 31, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Common stock issuances, net of costs | ||||||||||||||||||||||||||||
| Equity-based compensation | — | |||||||||||||||||||||||||||
| Shares issued to pay accounts payable | ||||||||||||||||||||||||||||
| Shares issued to pay accounts payable,shares | ||||||||||||||||||||||||||||
| Series B preferred shares converted to common shares | ( | ) | — | |||||||||||||||||||||||||
| Comprehensive loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Balance March 31, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Equity-based compensation | — | |||||||||||||||||||||||||||
| Comprehensive loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Balance June 30, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Common stock issuances, net of costs | ||||||||||||||||||||||||||||
| Equity-based compensation | — | |||||||||||||||||||||||||||
| Comprehensive loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Balance September 30, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
See accompanying notes to consolidated financial statements.
| 3 |
AIM IMMUNOTECH INC. AND SUBSIDIARIES
Consolidated Statement of Changes in Stockholders’ Equity
For the Nine Months Ended September 30, 2020
(in thousands except share data)
(Unaudited)
| Series B Preferred | Common Stock Shares | Common Stock Par Value | Additional Paid-in Capital | Accumulated other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||
| Balance December 31, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
| Common stock issuance, net of costs | ||||||||||||||||||||||||||||
| Warrant modification | — | |||||||||||||||||||||||||||
| Equity-based compensation | — | |||||||||||||||||||||||||||
| Shares issued to pay accounts payable | ||||||||||||||||||||||||||||
| Series B preferred shares converted to common shares | ( | ) | — | |||||||||||||||||||||||||
| Comprehensive loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Balance March 31, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Common stock issuance, net of costs | ||||||||||||||||||||||||||||
| Equity-based compensation | — | |||||||||||||||||||||||||||
| Series B preferred shares converted to common shares | ( | ) | — | |||||||||||||||||||||||||
| Comprehensive loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance June 30, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
| Common stock issuance, net of costs | ||||||||||||||||||||||||||||
| Equity-based compensation | — | |||||||||||||||||||||||||||
| Shares issued to pay accounts payable | ||||||||||||||||||||||||||||
| Series B preferred shares converted to common shares | ( | ) | — | |||||||||||||||||||||||||
| Comprehensive loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Balance September 30, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
See accompanying notes to consolidated financial statements.
| 4 |
AIM IMMUNOTECH INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2021 and 2020
(in thousands)
(Unaudited)
| 2021 | 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation of property and equipment | ||||||||
| Redeemable warrants valuation adjustment | ( | ) | ||||||
| Warrant modification | ||||||||
| Extinguishment of financing obligation and note payable | ||||||||
| Amortization of patent, trademark rights | ||||||||
| Changes in ROU assets | ( | ) | ||||||
| Gain on sale of property and equipment | ( | ) | ||||||
| Gain from sale of income tax operating losses | ( | ) | ||||||
| Equity-based compensation | ||||||||
| Realized (loss) gain on sale of marketable securities | ( | ) | ||||||
| Amortization of finance and debt issuance costs | ||||||||
| Change in assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Funds Receivable from New Jersey net operating loss | ||||||||
| Prepaid expenses and other current assets and other non-current assets | ||||||||
| Lease liability | ( | ) | ||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued interest expense | ||||||||
| Accrued expenses | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Proceeds from sale of marketable securities | ||||||||
| Purchase of marketable securities | ( | ) | ( | ) | ||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Proceeds from sale of property and equipment | ||||||||
| Purchase of patent and trademark rights | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payment on note payable | ( | ) | ||||||
| Payment of financing obligation | ( | ) | ||||||
| Financing obligation payments | ( | ) | ( | ) | ||||
| Proceeds from sale of stock, net of issuance costs | ||||||||
| Net cash provided by financing activities | ||||||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental disclosures of non-cash investing and financing cash flow information: | ||||||||
| Stock issued to settle accounts payable | $ | $ | ||||||
| Unrealized loss on marketable securities | $ | ( | ) | $ | ( | ) | ||
| Conversion of Series B preferred | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| 5 |
AIM IMMUNOTECH INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Business and Basis of Presentation
AIM ImmunoTech Inc. and its subsidiaries (collectively, “AIM”, “Company”, “we” or “us”) are an immuno-pharma company headquartered in Ocala, Florida, and focused on the research and development of therapeutics to treat multiple types of cancers, viral diseases and immune-deficiency disorders. We have established a strong foundation of laboratory, pre-clinical and clinical data with respect to the development of nucleic acids and natural interferon to enhance the natural antiviral defense system of the human body, and to aid the development of therapeutic products for the treatment of certain cancers and chronic diseases.
AIM’s flagship products are Ampligen (rintatolimod), a first-in-class drug of large macromolecular RNA (ribonucleic acid) molecules, and Alferon N Injection (Interferon Alfa-N3). Ampligen has not been approved by the FDA or marketed in the United States. Ampligen is approved for commercial sale in the Argentine Republic for the treatment of severe Chronic Fatigue Syndrome (“CFS”).
The Company’s primary present business focus involves Ampligen. Ampligen is a double-stranded RNA (“dsRNA”) molecule being developed for globally important cancers, viral diseases and disorders of the immune system.
AIM currently is proceeding primarily in three areas:
| ● | Ampligen plus Standard of Care (“SOC”) to treat pancreatic cancer patients, and in other cancers, as a potential therapeutic that modifies the tumor microenvironment with the goal of increasing anti-tumor responses to check point inhibitors and with SOC. | |
| ● | Exploring Ampligen’s antiviral activities and potential use as a prophylactic or treatment for existing viruses, mutations thereof or new viruses. | |
| ● | Ampligen as a treatment for myalgic encephalomyelitis/chronic fatigue syndrome (“ME/CFS”) and what we refer to as Post-COVID-19 Cognitive Dysfunction (“PCCD”). |
Today, some two years after COVID-19 first appeared, the world has a number of vaccines and some promising therapeutics. AIM’s quest to prove the antiviral activities of Ampligen continues. If Ampligen has the broad-spectrum antiviral properties that the Company believes that it has, it could be a very valuable tool in treating variants of existing viral diseases, including COVID-19, or novel ones that arise in the future. Unlike most developing therapeutics which attack the virus, Ampligen works differently. AIM believes that it activates antiviral immune system pathways that fight not just a particular virus or viral variant, but other similar viruses as well.
Alferon N Injection is approved in Argentina for a category of sexually transmitted disease infections and patients that are not responsive or are intolerant to recombinant interferon. Alferon is the only natural-source, multi-species alpha interferon currently approved for sale in the United States for the intralesional treatment of refractory (i.e., resistant to other treatment) or recurring external condylomata acuminata/genital warts in patients 18 years of age or older. Certain types of human papilloma viruses cause genital warts. AIM also has approval from ANMAT for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferon in Argentina.
The
Company owns and operates a
On May 13, 2021, the Company exercised its option to re-purchase the New Brunswick facility, pursuant to the terms of the March 16, 2018, sale and lease-back agreement. Subsequently, the Company sold certain equipment and machinery that it determined to be obsolete and no longer needed for current or future manufacturing (See Note 13: Financing Obligation Arising from Sale Leaseback Transaction).
| 6 |
In the opinion of management, all adjustments necessary for a fair presentation of such consolidated financial statements have been included. Such adjustments consist of normal recurring items. Interim results are not necessarily indicative of results for a full year.
The interim consolidated financial statements and notes thereto are presented as permitted by the Securities and Exchange Commission (“SEC”), and do not contain certain information which will be included in the Company’s annual consolidated financial statements and notes thereto.
These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the years ended December 31, 2020 and 2019, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 31, 2021.
Immaterial Revision of Previously Reported Amounts
Subsequent
to the preparation of the consolidated financial statements as of and for the period ended December 31, 2020, Management noted an error
in the Company’s previously issued Consolidated Financial Statements. The error related to the Company’s income taxes footnote disclosure
that resulted in the reduction of approximately $
Basic and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the period. Equivalent common shares, consisting of stock options and warrants which amounted to and , are excluded from the calculation of diluted net loss per share for the nine months ended September 30, 2021, and 2020, respectively, since their effect is antidilutive due to the net loss.
The fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing valuation model. Expected volatility is based on the historical volatility of the price of the Company’s stock. The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option and equity warrant. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. There were options granted in the nine months ended September 30, 2021, and 2020.
Stock option for employees’ activity during the nine months ended September 30, 2021, is as follows:
Schedule of Stock Option Activity
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding January 1, 2021 | $ | $ | ||||||||||||||
| Granted | — | |||||||||||||||
| Forfeited | ( | ) | — | |||||||||||||
| Expired | — | |||||||||||||||
| Outstanding September 30, 2021 | $ | $ | ||||||||||||||
| Vested and expected to vest September 30, 2021 | $ | $ | ||||||||||||||
| Exercisable September 30, 2021 | $ | $ | ||||||||||||||
Schedule of Unvested Stock Option Activity
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Unvested January 1, 2021 | $ | $ | ||||||||||||||
| Granted | — | |||||||||||||||
| Expired | ( | ) | — | |||||||||||||
| Vested | ( | ) | — | |||||||||||||
| Unvested September 30, 2021 | $ | $ | ||||||||||||||
| 7 |
Schedule of Stock Option Activity
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding January 1, 2021 | $ | $ | ||||||||||||||
| Granted | — | |||||||||||||||
| Forfeited | — | |||||||||||||||
| Expired | ( | ) | — | |||||||||||||
| Outstanding September 30, 2021 | $ | $ | ||||||||||||||
| Vested and expected to vest September 30, 2021 | $ | $ | ||||||||||||||
| Exercisable September 30, 2021 | $ | $ | ||||||||||||||
Schedule of Unvested Stock Option Activity
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Unvested January 1, 2021 | $ | $ | ||||||||||||||
| Granted | — | |||||||||||||||
| Expired | — | |||||||||||||||
| Vested | ( | ) | — | |||||||||||||
| Unvested September 30, 2021 | $ | — | $ | |||||||||||||
Stock-based compensation expense was approximately $and $for the nine months ended September 30, 2021, and 2020, resulting in an increase in general and administrative expenses, respectively.
As of September 30, 2021, and 2020, respectively, there was approximately $ and $ of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.
Note 4: Marketable Securities
Marketable
securities consist of debt securities. As of September 30, 2021, and December 31, 2020, it was determined that none of the
marketable securities had an other-than-temporary impairment. As of September 30, 2021, and December 31, 2020, all securities were
measured as Level 1 instruments under the fair value measurements standard (See Note 12: Fair Value). As of September 30, 2021, and
December 31, 2020, the Company held approximately $
| 8 |
Debt securities classified as available for sale consisted of:
Schedule of Available for Sale
September
30, 2021
(in thousands)
| Securities | Amortized Cost | Gross Unrealized Gains /(Losses) | Fair Value | Marketable Securities | ||||||||||||
| U.S. Treasury notes | $ | $ | ( | ) | $ | $ | ||||||||||
| U.S. Government mortgage-backed securities | ||||||||||||||||
| Corporate bonds | ( | ) | ||||||||||||||
| Totals | $ | $ | ( | ) | $ | $ | ||||||||||
December 31, 2020
(in thousands)
| Securities | Amortized Cost | Gross Unrealized Gains /(Losses) | Fair Value | Marketable Securities | ||||||||||||
| U.S. Treasury notes | $ | $ | ( | ) | $ | $ | ||||||||||
| U.S. Government mortgage-backed securities | ( | ) | ||||||||||||||
| Corporate bonds | ||||||||||||||||
| Totals | $ | $ | ( | ) | $ | $ | ||||||||||
The following presents available-for-sale securities’ gross unrealized losses and fair value aggregated by the short- and long-term maturity.
September
30, 2021
(in thousands)
| Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
| Securities | Fair Value | Gross Unrealized Gains | Fair Value | Gross Unrealized Gains /(Losses) | Fair Value | Gross Unrealized Gains | ||||||||||||||||||
| U.S. Treasury notes | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||
| U.S. Government mortgage-backed securities | ||||||||||||||||||||||||
| Corporate bonds | ( | ) | ( | ) | ||||||||||||||||||||
| Totals | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||
December
31, 2020
(in thousands)
| Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
| Securities | Fair Value | Gross Unrealized Gains | Fair Value | Gross Unrealized Gains/ (Losses) | Fair Value | Gross Unrealized Gains | ||||||||||||||||||
| U.S. Treasury notes | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||
| U.S. Government mortgage-backed securities | ( | ) | ( | ) | ||||||||||||||||||||
| Corporate bonds | ||||||||||||||||||||||||
| Totals | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||
| 9 |
Note 5: Accrued Expenses
Accrued expenses consist of the following:
Schedule of Accrued Expenses
| September 30, 2021 | December 31, 2020 | |||||||
| (in thousands) | ||||||||
| September 30, 2021 | December 31, 2020 | |||||||
| Compensation | $ | $ | ||||||
| Professional fees | ||||||||
| Other expenses | ||||||||
| $ | $ | |||||||
Note 6: Property and Equipment, net
Schedule of Property and Equipment
| September 30, 2021 | December 31, 2020 | |||||||
| (in thousands) | ||||||||
| September 30, 2021 | December 31, 2020 | |||||||
| Land, buildings and improvements | $ | $ | ||||||
| Furniture, fixtures, and equipment | ||||||||
| Total property and equipment | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Property
and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective
assets, ranging from to
On
March 16, 2018, the Company sold land and a building for $
In
April 2021, the Company sold some of the assets located at its facility at 783 Jersey Ave., New Brunswick, N.J. The assets sold consist
of equipment and machinery that the Company determined to be obsolete and no longer needed for current and future manufacturing. The
assets were sold for an aggregate of $
| 10 |
Note 7: Patents
Schedule of Patents, Trademark Rights
| (in thousands) | ||||
| December 31, 2019 | $ | |||
| Acquisitions | ||||
| Abandonments | ( | ) | ||
| Amortization | ( | ) | ||
| December 31, 2020 | $ | |||
| Acquisitions | ||||
| Amortization | ( | ) | ||
| September 30, 2021 | $ | |||
Patents
and trademarks are stated at cost (primarily legal fees) and are amortized using the straight-line method of the estimated useful life
of
Amortization of patents and trademarks for each of the next five years is as follows:
Schedule of Amortization of Patents and Trademarks
| Period Ending December 31, | ||||
| (in thousands) | ||||
| 2021 | $ | |||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| Thereafter | ||||
| Total | $ | |||
Note 8: Stockholders’ Equity
(a) Preferred Stock
The Company is authorized to issue shares of $ par value preferred stock with such designations, rights and preferences as may be determined by the Board of Directors. Of its authorized preferred stock, shares have been designated as Series A Junior Participating Preferred Stock and shares have been designated as Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock has a stated value $ per share.
The
Company is authorized to issue Series B Convertible Preferred Stock,
Pursuant
to a registration statement relating to a rights offering declared effective by the SEC on February 14, 2019, AIM distributed to its
holders of common stock and to holders of certain options and warrants as of February 14, 2019, at no charge, one non-transferable subscription
right for each share of common stock held or deemed held on the record date. Each right entitled the holder to purchase one unit, at
a subscription price of $
| 11 |
(b) Common Stock
The Company has authorized shares of common stock with specific limitations and restrictions on the usage of of the authorized shares.
On
July 7, 2020, the board of directors approved a plan pursuant to which all directors, officers, and employees could purchase from the
company up to an aggregate of $
During
the fiscal year ended December 31, 2020, the Company issued a total of shares of its common stock at prices ranging from $
to $ for a total of $
During
the nine months ended September 30, 2021, the Company issued a total of shares of its common stock at prices ranging from $
to $ for a total of $
On
September 27, 2019, the Company closed a public offering underwritten by A.G.P./Alliance Global Partners, LLC (the “Offering”)
of (i) shares of Common Stock; (ii) pre-funded warrants exercisable for
On
July 19, 2019, the Company entered into a new Equity Distribution Agreement (the “2019 EDA”) with Maxim Group LLC (“Maxim”),
pursuant to which it could sell, from time to time, shares of its Common Stock through Maxim, as agent (the “Offering”).
The 2019 EDA replaced a prior EDA with Maxim. For the year ended December 31, 2020, the Company sold shares under the 2019 EDA for total gross proceeds
of $
| 12 |
The 2018 Equity Incentive Plan, effective September 12, 2018, authorizes the grant of (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights, (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards. Initially, a maximum of shares of Common Stock is reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan. Unless sooner terminated, the 2018 Equity Incentive Plan will continue in effect for a period of from its effective date. On October 17, 2018, the Board of Directors issued options to the officers and directors at the exercise price of $expiring in years, and on November 14, 2018, the Board of Directors issued options to each employee, officer, and director at the exercise price of $expiring in . On January 28, 2019, options were issued to each of these officers with an exercise price of $for a period of with a vesting period of . In August 2020, options were issued to each of these officers with an exercise price range of $to $for a period of with a vesting period of . During December 2020, options were issued to employees with an exercise price range of $to $for a period of with a vesting period of .
As of September 30, 2021, and December 31, 2020, there were and shares outstanding, respectively.
Note 9: Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Note 10: Recent Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2020-06”). ASU 2020-06 reduces the number of models used to account for convertible instruments, amends diluted EPS calculations for convertible instruments, and amends the requirements for a contract (or embedded derivative) that is potentially settled in an entity’s own shares to be classified in equity. The amendments add certain disclosure requirements to increase transparency and decision-usefulness about a convertible instrument’s terms and features. Under the amendment, the Company must use the if-converted method for including convertible instruments in diluted EPS as opposed to the treasury stock method. ASU 2020-06 is effective for annual reporting periods beginning after December 15, 2023. Early adoption is allowed under the standard with either a modified retrospective or full retrospective method. The Company early adopted ASU 2020-06 on January 1, 2021, using the modified retrospective method. As a result of Management’s evaluation, the adoption of ASU 2020-06 did not have a material impact on the consolidated financial statements.
Note 11: Long-Term Debt
On
August 5, 2019, the Company issued a Secured Promissory Note (the “CV Note”) with Chicago Venture Partners, L.P. (the “CV”).
The Note had an original principal amount of $
During
the quarter ending June 30, 2020, the Holder made redemptions of $
Interest
expense associated with the CV Note was $
On
December 5, 2019, the Company issued a secured Promissory Note (the “AS Note”) to Atlas Sciences L.P. (“AS”).
The AS Note had an original principal amount of $
| 13 |
On
June 19, 2020, the Company paid off the outstanding AS note which consisted of original principal of $
Interest
expense associated with AS Note for the period ending September 30, 2021, was $
Note 12: Fair Value
The Company is required under U.S. GAAP to disclose information about the fair value of all the Company’s financial instruments, whether or not these instruments are measured at fair value on the Company’s consolidated balance sheets.
The
Company estimates that the fair values of cash and cash equivalents, other assets, accounts payable and accrued expenses approximate
their carrying values due to the short-term maturities of these items.
The Company recomputes the fair value of the Warrants at the issuance date and the end of each quarterly reporting period. Such value computation includes subjective input assumptions that are consistently applied each period. If the Company were to alter its assumptions or the numbers input based on such assumptions, the resulting fair value could be materially different.
The Company utilized the following assumptions to estimate the fair value of the February 2017 Warrants:
Schedule of Assumptions to Estimate Fair Value of Warrants
| September 30, 2021 | December 31, 2020 | |||||||
| Underlying price per share | $ | $ | ||||||
| Exercise price per share | $ | – | $ | - | ||||
| Risk-free interest rate | % | % | ||||||
| Expected holding period | ||||||||
| Expected volatility | % | % | ||||||
| Expected dividend yield | ||||||||
The Company utilized the following assumptions to estimate the fair value of the June 2017 Warrants:
| September 30, 2021 | December 31, 2020 | |||||||
| Underlying price per share | $ | $ | ||||||
| Exercise price per share | $ | $ | ||||||
| Risk-free interest rate | % | % | ||||||
| Expected holding period | ||||||||
| Expected volatility | % | % | ||||||
| Expected dividend yield | ||||||||
| 14 |
The Company utilized the following assumptions to estimate the fair value of the August 2017 Warrants:
| September 30, 2021 | December 31, 2020 | |||||||
| Underlying price per share | $ | $ | ||||||
| Exercise price per share | $ | |||||||
| Risk-free interest rate | % | % | ||||||
| Expected holding period | ||||||||
| Expected volatility | % | % | ||||||
| Expected dividend yield | ||||||||
The Company utilized the following assumptions to estimate the fair value of the April 2018 Warrants:
| September 30, 2021 | December 31, 2020 | |||||||
| Underlying price per share | $ | $ | ||||||
| Exercise price per share | $ | $ | ||||||
| Risk-free interest rate | % | % | ||||||
| Expected holding period | ||||||||
| Expected volatility | % | % | ||||||
| Expected dividend yield | ||||||||
The Company utilized the following assumptions to estimate the fair value of the March 2019 Warrants:
| September 30, 2021 | December 31, 2020 | |||||||
| Underlying price per share | $ | $ | ||||||
| Exercise price per share | $ | $ | ||||||
| Risk-free interest rate | % | % | ||||||
| Expected holding period | ||||||||
| Expected volatility | % | % | ||||||
| Expected dividend yield | ||||||||
The significant assumptions using the Monte Carlo Simulation approach for valuation of the Warrants are:
| (i) | Risk-Free Interest Rate. The risk-free interest rates for the Warrants are based on U.S. Treasury constant maturities for periods commensurate with the remaining expected holding periods of the warrants. |
| (ii) | Expected Holding Period. The expected holding period represents the period of time that the Warrants are expected to be outstanding until they are exercised. The Company utilizes the remaining contractual term of the Warrants at each valuation date as the expected holding period. |
| (iii) | Expected Volatility. Expected stock volatility is based on daily observations of the Company’s historical stock values for a period commensurate with the remaining expected holding period on the last day of the period for which the computation is made. |
| (iv) | Expected Dividend Yield. Expected dividend yield is based on the Company’s anticipated dividend payments over the remaining expected holding period. As the Company has never issued dividends, the expected dividend yield is $0.00 and this assumption will be continued in future calculations unless the Company changes its dividend policy. |
| (v) | Expected Probability of a Fundamental Transaction. The possibility of the occurrence of a Fundamental Transaction triggering a Put right is extremely remote. As discussed above, a Put right would only arise if a Fundamental Transaction (1) is an all cash transaction; (2) results in the Company going private; or (3) is a transaction involving a person or entity not traded on a national securities exchange. The Company believes such an occurrence is highly unlikely because: |
| a. | The Company only has one product that is FDA approved but which will not be available for commercial sales for 18 months at the earliest; |
| b. | The Company flagship product is approved only in Argentina for Severely Debilitated Chronic Fatigue Syndrome patients; |
| c. | The Company may have to perform additional clinical trials for FDA approval of its flagship product; |
| d. | Industry and global market conditions continue to include uncertainty, adding risk to any transaction; |
| e. | Available capital for a potential buyer in a cash transaction continues to be limited; |
| f. | The nature of a life science company is heavily dependent on future funding and high costs, including research & development; |
| g. | The Company has minimal revenue streams which could be insufficient to meet the funding needs for the cost of operations or construction at their manufacturing facility; and |
| h. | The Company’s Rights Agreement and Executive Agreements make it less attractive to a potential buyer. |
| 15 |
With the above factors utilized in analysis of the likelihood of the Put’s potential Liability, the Company estimated the range of probabilities related to a Put right being triggered as:
Schedule of Range of Probabilities
| Range of Probability | Probability | |||
| Low | % | |||
| Medium | % | |||
| High | % | |||
The Monte Carlo Simulation has incorporated a 5.0% probability of a Fundamental Transaction to date for the life of the securities.
| (vi) | Expected Timing of Announcement of a Fundamental Transaction. As the Company has no specific expectation of a Fundamental Transaction, for reasons stated above, the Company used a discrete uniform probability distribution over the Expected Holding Period to model the potential announcement of a Fundamental Transaction occurring during the Expected Holding Period. |
| (vii) | Expected
100 Day Volatility at Announcement of a Fundamental Transaction. An estimate of future volatility is necessary as there is no
mechanism for directly measuring future stock price movements. Daily observations of the Company’s historical stock values
for the 100 days immediately prior to the Warrants’ grant dates, with a floor of |
| (viii) | Expected Risk-Free Interest Rate at Announcement of a Fundamental Transaction. The Company utilized a risk-free interest rate corresponding to the forward U.S. Treasury rate for the period equal to the time between the date forecast for the public announcement of a Fundamental Transaction and the Warrant expiration date for each simulation. |
| (ix) | Expected Time Between Announcement and Consummation of a Fundamental Transaction. The expected time between the announcement and the consummation of a Fundamental Transaction is based on the Company’s experience with the due diligence process performed by acquirers and is estimated to be six months. The Monte Carlo Simulation approach incorporates this additional period to reflect the delay Warrant Holders would experience in receiving the proceeds of the Put. |
While the assumptions remain consistent from period to period (e.g., using historical stock prices), the numbers input change from period to period (e.g., the actual historical prices input for the relevant period).
The Company applies FASB ASC 820 that defines fair value, establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. The guidance does not impose any new requirements around which assets and liabilities are to be measured at fair value, and instead applies to asset and liability balances required or permitted to be measured at fair value under existing accounting pronouncements. The Company measures its warrant liability for those warrants with a cash settlement feature at fair value.
FASB ASC 820-10-35-37 establishes a valuation hierarchy based on the transparency of inputs used in the valuation of an asset or liability. Classification is based on the lowest level of inputs that is significant to the fair value measurement. The valuation hierarchy contains three levels:
| ● | Level 1 – Quoted prices are available in active markets for identical assets or liabilities at the reporting date. Generally, this includes certain U.S. and government agency debt and equity securities that are traded in an active market. |
| ● | Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Generally, this includes debt and equity securities that are not traded in an active market. |
| ● | Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. As of September 30, 2021, the Company has classified the warrants with cash settlement features as Level 3. Management evaluates a variety of inputs and then estimates fair value based on those inputs. As discussed above, the Company utilized the Monte Carlo Simulation Model in valuing these warrants. |
| 16 |
The table below presents the balances of assets and liabilities measured at fair value on a recurring basis by level within the hierarchy as:
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis
| (in thousands) As of September 30, 2021 | ||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Assets: | ||||||||||||||||
| Marketable securities | $ | $ | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||||
| Redeemable warrants | $ | $ | | |||||||||||||
| (in thousands) As of December 31, 2020 | ||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Assets: | ||||||||||||||||
| Marketable securities | $ | $ | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||||
| Redeemable warrants | $ | $ | | |||||||||||||
The changes in Level 3 Liabilities measured at fair value on a recurring basis are summarized as follows (in thousands):
Schedule of Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis
| Redeemable warrants: | ||||
| Balance at December 31, 2020 | $ | |||
| Fair value adjustment | ( | ) | ||
| Balance at September 30, 2021 | $ | |||
Note 13: Financing Obligation Arising from Sale Leaseback Transaction
On
March 16, 2018, the Company sold land and a building for $
On
May 13, 2021, the Company completed its repurchase of the property for cash of $
For
the nine months ended September 30, 2021, the loss on extinguishment was $
| 17 |
Note 14: Leases
The
Company entered into a Lease Agreement for a term of
On
June 13, 2018, the Company entered into a Lease Agreement for a term of
On
May 1, 2019, the Company entered into a Lease Agreement for a term of
The
expected lease term includes both contractual lease periods and, when applicable, cancelable option periods when it is reasonably certain
that the Company would exercise such options. The Company’s leases have remaining lease terms between
The Company has determined that the incremental borrowing rate is 10% as of September 30, 2021, based upon the most recently completed financing transaction in December 2019.
Schedule of Operating lease Future Payments
| Period December 31, | ||||
| (in thousands) | ||||
| 2021 | $ | |||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| Less imputed interest | ( | ) | ||
| Total | $ | |||
As
of September 30, 2021, the balance of the right of use assets was $
Note 15: Research, Consulting and Supply Agreements
In
July 2021, the Company executed a Reservation and Start-Up Agreement (the “Agreement”) with hVIVO Services Limited (“hVIVO”),
and subsequently signed a clinical trial agreement (“CTA”) in September. The Company has paid hVIVO approximately $
In
January 2021, the Company entered into a Sponsor Agreement with the Centre for Human Drug Research (“CHDR”) for a Phase 1
clinical study to assess the safety, tolerability, and biological activity of Ampligen as a potential intranasal therapy. The Company
has paid CHDR approximately $
Note 16: Subsequent Events
None.
| 18 |
ITEM 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
Special Note Regarding Forward-Looking Statements
Certain statements in this Report contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act. These statements are based on our management’s current beliefs, expectations and assumptions about future events, conditions and results and on information currently available to us. Discussions containing these forward-looking statements may be found, among other places, in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section; Part II, Item 1 “Legal Proceedings”; and Part II, Item 1A “Risk Factors”.
All statements, other than statements of historical fact, included or incorporated herein regarding our strategy, future operations, financial position, future revenues, projected costs, plans, prospects and objectives are forward-looking statements. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “think,” “may,” “could,” “will,” “would,” “should,” “continue,” “potential,” “likely,” “opportunity” and similar expressions or variations of such words are intended to identify forward-looking statements but are not the exclusive means of identifying forward-looking statements.
Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties inherent in our business including, without limitation: the potential therapeutic effect of our products, the possibility of obtaining regulatory approval, our ability to find senior co-development partners with the capital and expertise needed to commercialize our products and to enter into arrangements with them on commercially reasonable terms, our ability to manufacture and sell any products, our ability to enter into arrangements with third-party vendors, market acceptance of our products, our ability to earn a profit from sales or licenses of any drugs, our ability to raise additional capital should we encounter unexpected expenses or deplete our current reserves, our ability to discover new drugs in the future, changing market conditions, changes in laws and regulations affecting our industry, and issues related to our New Brunswick, New Jersey facility.
We are in various stages of seeking to determine whether Ampligen will be effective in the treatment of multiple types of cancers, immune-deficiency disorders and viral diseases. We discuss in this Report our current and anticipated future activities, all of which are subject to change for a number of reasons. Significant additional testing and trials will be required to determine whether Ampligen will be effective in the treatment of these conditions. Results obtained in animal models do not necessarily predict results in humans. Human clinical trials will be necessary to prove whether or not Ampligen will be efficacious in humans. No assurance can be given as to whether current or planned clinical trials will be successful or yield favorable data and the trials are subject to many factors including lack of regulatory approval(s), lack of study drug, or a change in priorities at the institutions sponsoring other trials. In addition, initiation of planned clinical trials may not occur due to many factors including lack of regulatory approval(s) or lack of study drug. Even if these clinical trials are initiated, we cannot assure that the clinical studies will be successful or yield any useful data or require additional funding. We recognize that all cancer centers, like all medical facilities, must make the COVID-19 pandemic their priority. Therefore, there is the potential for delays in clinical trial enrollment and reporting in ongoing studies. No assurance can be given that future studies will not result in findings that are different from those reported in the studies we refer to.
Additionally, the pandemic is disrupting world health and world economies and most likely will continue to do so for a long time. Many countries are dealing with COVID-19 and have made that their primary health focus. While we are able to continue to operate, like all businesses we are unable to gauge how bad this pandemic will affect our operations in the future (e.g. in Argentina, where we believe COVID-19 is affecting our commercialization efforts). Operating in foreign countries carries with it a number of risks, including potential difficulties in enforcing intellectual property rights. We cannot assure that our potential operations in foreign countries will not be adversely affected by these risks. We have filed a number of provisional patent applications. No assurance can be given that our current or future patent applications ultimately will be granted.
Our overall objectives include plans to continue seeking approval for commercialization of Ampligen in the United States and abroad as well as seeking to broaden commercial therapeutic indications for Alferon N Injection presently approved in the United States and Argentina. We continue to pursue senior co-development partners with the capital and expertise needed to commercialize our products and to enter into arrangements with them on commercially reasonable terms. Our ability to commercialize our products, widen commercial therapeutic indications of Alferon N Injection and/or capitalize on our collaborations with research laboratories to examine our products are subject to a number of significant risks and uncertainties including, but not limited to our ability to enter into more definitive agreements with some of the research laboratories and others that we are collaborating with, to fund and conduct additional testing and studies, whether or not such testing is successful or requires additional testing and meets the requirements of the FDA and comparable foreign regulatory agencies. We do not know when, if ever, our products will be generally available for commercial sale for any indication.
| 19 |
We conduct testing and have produced limited quantities of active pharmaceutical ingredients (“API”) for our products at our N.J. facility. We are in the planning stages of updating the manufacturing and laboratory suites with state-of-the-art, mobile-ready equipment that can be used either there or in future alternate space. While we believe we have sufficient API to meet our current needs, we also are continually exploring new efficiencies so as to maximize our ability to fulfill future obligations. In lieu of modernizing the facility or in addition thereto, our current and active production plan is to shift to the utilization of Contract Manufacturing Organizations (“CMO”), while maintaining on-site teams for QC, QA, R&D, bench and small-batch manufacturing.
The production of new Alferon API inventory at the facility cannot begin until the validation phase is complete. While the facility has already been approved by the FDA under the Biological License Application (“BLA”) for Alferon, this status will need to be reaffirmed through revalidation of our revised process and systems, submission of a supplemental application and, potentially, a successful Pre-Approval Inspection by the FDA prior to commercial sale of newly produced inventory product. If we determine that we need expanded capacity, and/or we determine not to move forward with re-validating the facility, we will need to move forward with other possibilities to produce API. If we are unable to gain the necessary FDA approvals related to the manufacturing process and/or final product of new Alferon inventory, our operations most likely will be materially and/or adversely affected. In light of these contingencies, there can be no assurances that the approved Alferon N Injection product will be returned to production on a timely basis, if at all, or that if and when it is again made commercially available, it will return to prior sales levels.
We believe, and are investigating, Ampligen’s potential role in enhancing the activity of influenza vaccines. While certain studies involving rodents, non-human primates (monkeys) and healthy human subjects indicate that Ampligen may enhance the activity of influenza vaccines by conferring increased cross-reactivity or cross-protection, further studies will be required, and no assurance can be given that Ampligen will assist in the development of a universal vaccine for influenza or other viruses.
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
This Report also refers to estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk.
Overview
General
AIM ImmunoTech Inc. and its subsidiaries (collectively, “AIM”, “Company”, “we” or “us”) are an immuno-pharma company headquartered in Ocala, Florida, and focused on the research and development of therapeutics to treat multiple types of cancers, viral diseases and immune-deficiency disorders. We have established a strong foundation of laboratory, pre-clinical and clinical data with respect to the development of nucleic acids and natural interferon to enhance the natural antiviral defense system of the human body, and to aid the development of therapeutic products for the treatment of certain cancers and chronic diseases.
| 20 |
Our flagship products are Ampligen (rintatolimod), a first-in-class drug of large macromolecular RNA (ribonucleic acid) molecules, and Alferon N Injection (Interferon Alfa-N3). Ampligen has not been approved by the FDA or marketed in the United States. Ampligen is approved for commercial sale in the Argentine Republic for the treatment of severe Chronic Fatigue Syndrome (“CFS”).
Our primary present business focus involves Ampligen. Ampligen represents a dsRNA being developed for globally important cancers, viral diseases and disorders of the immune system.
We currently are proceeding primarily in three areas:
| ● | Ampligen plus Standard of Care (“SOC”) to treat pancreatic cancer patients, and in other cancers, as a potential therapeutic that modifies the tumor microenvironment with the goal of increasing anti-tumor responses to check point inhibitors and with SOC. | |
| ● | Exploring Ampligen’s antiviral activities and potential use as a prophylactic or treatment for existing viruses, mutations thereof or new viruses. | |
| ● | Ampligen as a treatment for myalgic encephalomyelitis/chronic fatigue syndrome (“ME/CFS”) and what we refer to as Post-COVID-19 Cognitive Dysfunction (“PCCD”). |
We are prioritizing our activities in an order related to the stage of development, with those clinical activities such as pancreatic cancer, ME/CFS and PCCD having priority over antiviral experimentation. We intend that priority clinical work be conducted in FDA- or EMA-authorized trials which could support a potential future New Drug Application (“NDA”). However, our antiviral experimentation is designed to accumulate additional preliminary data supporting our hypothesis that Ampligen is a powerful, broad-spectrum prophylaxis and early-onset therapeutic that may confer enhanced immunity and cross-protection. Accordingly, we will conduct our antiviral programs in those venues most readily available and able to generate valid proof-of-concept data, including foreign venues.
Pancreatic Cancer and Immuno-Oncology.
We are focused on pancreatic cancer because testing results, to date, primarily conducted in the Netherlands, have been very promising. The Netherlands study generated statistically significant data indicating that Ampligen extended survival well beyond the SOC. These data support the proposition that Ampligen, when administered in patients with locally advanced or metastatic pancreatic cancer after systemic chemotherapy showed a statistically significant increase in survival rate. In October 2021, we and our Contract Research Organization, Amarex Clinical Research LLC (“Amarex”), submitted an Investigational New Drug (“IND”) application and an accompanying application for Fast Track status to the U.S. Food and Drug Administration (“FDA”) for a planned Phase 2 study of Ampligen as a therapy for locally advanced or metastatic late-stage pancreatic cancer. We believe that the potential benefits for patients with late-stage pancreatic cancer, a terminal disease, well outweighs any risks involved in administering Ampligen. Assuming this trial and subsequent planned clinical trials confirm the existing data, our goal is to then submit an NDA for use of Ampligen in pancreatic cancer patients.
Ampligen has also demonstrated in the clinic the potential for standalone efficacy in a number of solid tumors. We have also seen success in increasing survival rates and efficacy in the treatment of animal tumors when Ampligen is used in combination with checkpoint blockade therapies. These successes in the field of immuno-oncology have guided our efforts toward the potential use of Ampligen as a combinational therapy for the treatment of a variety of solid tumor types. The first of our patent applications in this space was granted by the Netherlands on March 15, 2021.
Please see “Immuno-Oncology and Pancreatic Cancer” below.
Ampligen as an Antiviral.
We have a research and pre-clinical history that indicates broad-spectrum antiviral capability of Ampligen in animals. We hope to demonstrate that it has the same effect in humans. To do this, among other things, we need a population infected with a virus. That is why we have spent significant resources on COVID-19 (the disease caused by SARS-CoV-2) which is active and still infecting many subjects. While much would need to be done to get Ampligen to market as a broad-spectrum antiviral, we believe that it is important to focus our efforts on first and thoroughly proving the concept, especially while there is still a large COVID-19-infected population. Previously, we conducted animal studies that yielded positive results utilizing Ampligen to treat Western Equine Encephalitis Virus, Ebola and SARS-CoV-1. We have conducted experiments in SARS-CoV-2 showing Ampligen has a powerful impact on viral replication. We believe that prior studies of Ampligen in SARS-CoV-1 animal experimentation may predict similar protective effects against SARS-CoV-2.
| 21 |
We have conducted and designed studies both in the United States and abroad and sought guidance from the FDA. In our communications with the FDA, the FDA has requested that we provide additional data to assist the agency in evaluating the potential risks and benefits of administering Ampligen to asymptomatic and mild COVID-19 individuals. However, as discussed in more detail below, where the threat to the patient from COVID-19 is high, the FDA has already authorized Ampligen in a clinical trial of patients with COVID-19 who have a pre-existing cancer. That Phase 1/2a study utilizing Ampligen is underway. We have also elected to conduct studies (initially with healthy volunteers) outside the United States, primarily in the Netherlands and the United Kingdom.
In this regard, the Centre for Human Drug Research (“CHDR”), a foundation located in Leiden in the Netherlands, managed a Phase 1 randomized, double-blind study for us to evaluate the safety, tolerability and biological activity of repeated administration of Ampligen intranasally. A total of 40 healthy subjects received either Ampligen or a placebo in the trial, with the Ampligen given at four escalating dosages across four cohorts, to a maximum level of 1,250 micrograms. All patients had completed treatment by June 2021 and the Final Safety Report reported no Serious or Severe Adverse Events at any dosage level.
Following the completion of the Phase 1 dosing in the CHDR managed study, and based on its positive interim results, we engaged hVIVO to conduct a Human Challenge Trial (“HCT”) at their quarantine facility in the U.K. to test Ampligen as a potential intranasal antiviral therapy using a human Rhinovirus hRV (common cold virus) and Influenza. In an HCT, subjects are intentionally exposed to particular diseases to test how the diseases will respond to potential therapeutics. We believe that an HCT will allow us to expedite the development process for Ampligen by ensuring full exposure of both the control group and the Ampligen group, so as to assess whether Ampligen has a prophylactic effect. We have submitted a study protocol to the Oxford Research Ethics Committee (“REC”)/Medicines and Healthcare Regulatory Agency (“MHRA”) on September 10, 2021. The REC approved the protocol, but the MHRA provided a response outlining areas of the submission where it requires additional information. We intend to re-submit its proposed protocol as soon as possible.
Today, some two years after COVID-19 first appeared, the world has a number of vaccines and some promising therapeutics. Our quest to prove the antiviral activities of Ampligen continues. If Ampligen has the broad-spectrum antiviral properties that we believe that it has, it could be a very valuable tool in treating variants of existing viral diseases, including COVID-19, or novel ones that arise in the future. Unlike most developing therapeutics which attack the virus, Ampligen works differently. We believe that it activates antiviral immune system pathways that fight not just a particular virus or viral variant, but other similar viruses as well.
Please see “Ampligen as a Potential Antiviral” below.
Ampligen as a treatment for ME/CFS and PCCD
We have long been focused on seeking the FDA’s approval for the use of Ampligen to treat ME/CFS. In fact, in February 2013, we received a Complete Response letter (“CRL”) from the FDA for our Ampligen NDA for ME/CFS, stating that we should conduct at least one additional clinical trial, complete various nonclinical studies and perform a number of data analyses.
While developing a comprehensive response to the FDA and a plan for a confirmatory trial for the FDA NDA, we proceeded independently in Argentina and, in August 2016, we received approval of an NDA from Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica (“ANMAT”) for commercial sale of Ampligen in the Argentine Republic for the treatment of severe CFS. In September 2019, we received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales. On June 10, 2020, we received import clearance from ANMAT to import the first shipment of commercial grade vials of Ampligen into Argentina. The next steps in the commercial launch of Ampligen include ANMAT conducting a final inspection of the product and release tests before granting final approval to begin commercial sales. This testing and approval process is currently delayed due to the COVID-19 pandemic and ANMAT’s internal processes. The ongoing impact of COVID-19 in Argentina is taxing the nation’s health care system and is, understandably, the main priority of its regulators. Once final approval by ANMAT is obtained, GP Pharm will begin distributing Ampligen in Argentina.
The FDA authorized an open-label treatment protocol (“AMP-511”) allowing patient access to Ampligen for treatment in a study under which severely debilitated CFS patients have the opportunity to be on Ampligen to treat this very serious and chronic condition. The data collected from the AMP-511 protocol through a consortium group of clinical sites provide safety information regarding the use of Ampligen in patients with CFS. The AMP-511 protocol is ongoing. In October 2020, we received Institutional Review Board (“IRB”) approval for the expansion of the AMP-511 protocol to include patients previously diagnosed with SARS-CoV-2 following clearance of the virus, but who still demonstrate chronic fatigue-like symptoms that we refer to as Post-COVID-19 chronic fatigue. As of September 30, 2021, there are 14 patients enrolled in this open-label expanded access treatment protocol (including 3 post-COVID-19 patients with cognitive dysfunction).Early data from the ongoing AMP-511 Expanded Access Program has indicated that patients with cognitive function deficiency have reported improvements in cognitive function after Ampligen treatment.
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We plan on a comprehensive follow through with the FDA regarding the use of Ampligen as a treatment for ME/CFS. We have learned a great deal since the FDA’s CRL and plan to adjust our approach to concentrate on specific ME/CFS symptoms. Responses to the CRL and a proposed confirmatory trial are being worked on now by our R&D team and consultants.
Please see “Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (“ME/CFS”)” below.
OUR PRODUCTS
Our primary pharmaceutical product platform consists of Ampligen® (rintatolimod), a first-in-class drug of large macromolecular double-stranded (ds) RNA (ribonucleic acid) molecules, and our FDA-approved natural alpha-interferon product, Alferon N Injection®.
Ampligen®
Ampligen is approved for sale in Argentina for severe Chronic Fatigue Syndrome (“CFS”) and is an experimental drug in the United States currently undergoing clinical development for the treatment of certain cancers and ME/CFS. Over its developmental history, Ampligen has received various designations, including Orphan Drug Product Designation (FDA and European Medicines Agency (“EMA”)), Treatment protocol (e.g., “Expanded Access” or “Compassionate” use authorization) with Cost Recovery Authorization (FDA) and “promising” clinical outcome recognition based on the evaluation of certain summary clinical reports (“AHRQ” or Agency for Healthcare Research and Quality). Ampligen represents the first drug in the class of large (macromolecular) dsRNA molecules to apply for NDA review. Based on the results of published, peer-reviewed pre-clinical studies and clinical trials, we believe that Ampligen may have broad-spectrum antiviral and anti-cancer properties.
We believe that nucleic acid compounds represent a potential new class of pharmaceutical products designed to act at the molecular level for treatment of many human diseases. There are two forms of nucleic acids: deoxyribonucleic acid (“DNA”) and ribonucleic acid (“RNA”). DNA is a group of naturally occurring molecules found in chromosomes, the cell’s genetic machinery. RNA is a group of naturally occurring informational molecules which orchestrate a cell’s behavior which, in turn, regulates the action of groups of cells, including the cells which comprise the body’s immune system. RNA directs the production of proteins and regulates certain cell activities including the activation of an otherwise dormant cellular defense against viruses and tumors. Our drug technology utilizes specifically-configured RNA and is a selective Toll-like Receptor 3 (“TLR3”) agonist that can be administered intravenously, intranasally and intraperitoneally. Ampligen has been assigned the generic name rintatolimod by the United States Adopted Names Council (“USANC”) and has the chemical designation poly(I):poly(C12U).
Expanded Access Program/Early Access Programs/clinical trials of Ampligen that have been conducted or that are ongoing include studies of the potential treatment of patients with renal cell carcinoma, malignant melanoma, non-small cell lung cancer, ovarian cancer, breast cancer, colorectal cancer, prostate cancer, pancreatic cancer, ME/CFS, Hepatitis B, HIV, COVID-19, Long COVID and Post-COVID-19 Cognitive Dysfunction.
We have received approval of our NDA from ANMAT for the commercial sale of Ampligen in the Argentine Republic for the treatment of severe CFS. The product will be marketed by GP Pharm, our commercial partner in Latin America. Shipment of the drug product to Argentina was initiated in 2018 to complete the release testing by ANMAT needed for commercial distribution. On September 19, 2019, we received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales. On June 10, 2020, we received import clearance from ANMAT to import the first shipment of commercial grade vials of Ampligen into Argentina. We are currently working with GP Pharm on the commercial launch of Ampligen in Argentina. Commercialization in Argentina will require, among other things, GP Pharm to establish disease awareness, medical education, creation of an appropriate reimbursement level, design of marketing strategies and completion of manufacturing preparations for launch and ANMAT conducting a final inspection of the product and release tests before granting final approval to begin commercial sales. AIM has supplied GP Pharm with the Ampligen required for testing and ANMAT release. This testing and approval process is currently delayed due to the COVID-19 pandemic and ANMAT’s internal processes. The ongoing impact of COVID-19 in Argentina is taxing the nation’s health care system and is, understandably, the main priority of its regulators. Once final approval by ANMAT is obtained, GP Pharm will begin distributing Ampligen in Argentina. We continue to pursue our Ampligen NDA, for the treatment of CFS with the FDA.
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The FDA has authorized an open-label expanded access treatment protocol (“AMP-511”) allowing patient access to Ampligen in a study under which severely debilitated CFS patients have the opportunity to be on Ampligen to treat this very serious and chronic condition. The AMP-511 protocol started in the 1990s and is ongoing. The data collected from the AMP-511 protocol through clinical sites provide safety information regarding the use of Ampligen in patients with CFS. We are establishing an enlarged database of clinical safety information which we believe will provide further documentation regarding the absence of autoimmune disease associated with Ampligen treatment. We believe that continued efforts to understand existing data, and to advance the development of new data and information, will ultimately support our future filings for Ampligen and/or the design of future clinical studies that the FDA requested in a CRL. The FDA approved an increased reimbursement level from $200 to $345 per 200 mg vial of Ampligen, due to increased production costs; which was re-authorized in 2021. At this time, we do not plan on passing this adjustment along to the patients in this program. As of September 30, 2021, there are 14 patients enrolled in this open-label expanded access treatment protocol (including 3 post-COVID-19 patients with cognitive dysfunction). In October 2020, we received IRB approval for the expansion of the AMP-511 Expanded Access Program clinical trial for ME/CFS to include patients previously diagnosed with SARS-CoV-2 following clearance of the virus, but who still demonstrate chronic fatigue-like symptoms; three of the 13 patients enrolled have post-COVID chronic-fatigue-like symptoms. Early data from the ongoing AMP-511 Expanded Access Program has indicated that patients with cognitive function deficiency have reported improvements in cognitive function after Ampligen treatment.
In May 2016, we entered into a five-year agreement with myTomorrows, a Netherlands based company, for the commencement and management of an Early Access Program (“EAP”) in Europe and Turkey (the “Territory”) related to ME/CFS. Pursuant to the agreement, as amended, myTomorrows also is managing all Early Access Programs and Special Access Programs in Europe, Canada and Turkey to treat pancreatic cancer and ME/CFS patients. The agreement was automatically extended for a period of 12 months on May 20, 2021.
In April 2018, we completed data analysis of an intranasal human safety study of Ampligen-plus-FluMist®, known as AMP-600. The study was previously closed after the U.S. Centers for Disease Control and Prevention (“CDC”) made a general recommendation against the use of FluMist® at that time. Intranasal Ampligen in combination with FluMist® was generally well-tolerated in the study.
In June 2018, Ampligen was cited as outperforming two other TLR3 agonists — poly IC and natural double stranded RNA — in creating an enhanced tumor microenvironment for checkpoint blockage therapy in the journal of Cancer Research (http://cancerres.aacrjournals.org/content/early/2018/05/31/0008-5472.CAN-17-3985). In a head-to-head study in explant culture models, Ampligen activated the TLR3 pathway and promoted an accumulation of killer T cells but, unlike the other two TLR3 agonists, it did so without causing regulatory T cell (Treg) attraction. These findings were considered important because they indicate that Ampligen selectively reprograms the tumor microenvironment by inducing the beneficial aspects of tumor inflammation (attracting killer T cells), without amplifying immune-suppressive elements such as regulatory T cells. The study was conducted at the University of Pittsburgh and Roswell Park as a part of the NIH-funded P01 CA132714 and Ovarian Cancer Specialized Program of Research Excellence (“SPORE”).
In 2018, we completed production of two commercial-size batches of more than 16,000 vials of Ampligen, following its “Fill & Finish” at Jubilant HollisterStier, the Contract Manufacturing Organization. These lots passed all required testing for regulatory release for human use and are being used for multiple programs, including the treatment of ME/CFS, the pancreatic cancer EAP in the Netherlands, and will continue to be used for ongoing and future clinical studies in oncology. Additionally, two lots of Ampligen were manufactured in December 2019 and January 2020 at Jubilant. The current manufactured lots of Ampligen have been fully tested and released for commercial product launch in Argentina and for clinical trials. Additionally, in December 2020, we added Pharmaceutics International Inc. (“Pii”) as a “Fill & Finish” provider to enhance our capacity to produce Ampligen. This addition amplifies our manufacturing capability by providing redundancy and cost savings. The contracts augment our existing fill and finish capacity.
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Alferon N Injection®
Alferon N Injection is the registered trademark for our injectable formulation of natural alpha interferon. Alferon is the only natural-source, multi-species alpha interferon currently approved for sale in the United States and Argentina for the intralesional (within lesions) treatment of refractory (resistant to other treatment) or recurring external genital warts in patients 18 years of age or older. Alferon is also approved in Argentina for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferons. Certain types of human papilloma viruses (“HPV”) cause genital warts, a sexually transmitted disease (“STD”). According to the CDC, HPV is the most common sexually transmitted infection, with approximately 79 million Americans — most in their late teens and early 20s — infected with HPV. In fact, the CDC states that “HPV is so common that nearly all sexually active men and women get the virus at some point in their lives.” Although they do not usually result in death, genital warts commonly recur, causing significant morbidity and entail substantial health care costs.
Interferons are a group of proteins produced and secreted by cells to combat diseases. Researchers have identified four major classes of human interferon: alpha, beta, gamma and omega. Alferon N Injection contains a multi-species form of alpha interferon. The worldwide market for injectable alpha interferon-based products has experienced rapid growth and various alpha interferon injectable products are approved for many major medical uses worldwide. Alpha interferons are manufactured commercially in three ways: by genetic engineering, by cell culture, and from human white blood cells. All three of these types of alpha interferon are or were approved for commercial sale in the United States. Our natural alpha interferon is produced from human white blood cells. The potential advantages of natural alpha interferon over recombinant (i.e., synthetic) interferon produced and marketed by other pharmaceutical firms may be based upon their respective molecular compositions. Natural alpha interferon is composed of a family of proteins containing many molecular species of interferon. In contrast, commercial recombinant alpha interferon products each contain only a single species. Researchers have reported that the various species of interferons may have differing antiviral activity depending upon the type of virus. Natural alpha interferon presents a broad complement of species, which we believe may account for its higher activity in laboratory studies. Natural alpha interferon is also glycosylated (i.e., partially covered with sugar molecules). Such glycosylation is not present on the currently U.S.-marketed recombinant alpha interferons. We believe that the absence of glycosylation may be in part responsible for the production of interferon-neutralizing antibodies seen in patients treated with recombinant alpha interferon. Although cell culture-derived interferon is also composed of multiple glycosylated alpha interferon species, the types and relative quantity of these species are different from our natural alpha interferon.
Alferon N Injection [Interferon alfa-n3 (human leukocyte derived)] is a highly purified, natural-source, glycosylated, multi-species alpha interferon product. There are essentially no neutralizing antibodies observed against Alferon N Injection to date and the product has a relatively low side-effect profile. The recombinant DNA derived alpha interferon formulations have been reported to have decreased effectiveness after one year of treatment, probably due to neutralizing antibody formation (See “Manufacturing” and “Marketing/Distribution” sections below for more details on the manufacture and marketing/distribution of Alferon N Injection).
Immuno-Oncology and Pancreatic Cancer
The potential of Ampligen as an immuno-oncology therapeutic has been a major focus of AIM since the company’s current leadership took over in 2016. We have been working with the University of Pittsburgh’s chemokine modulation research initiative, which includes the use of Ampligen as a potential adjuvant to modify the tumor microenvironment (“TME”) with the goal of increasing anti-tumor responses to check point inhibitors (“CPI”). As part of this collaboration, we have supplied Ampligen to the University. The study, under the leadership of Robert P. Edwards, MD, chair of gynecologic services at Magee-Women’s Hospital of the University of Pittsburgh School of Medicine, and Professor of Surgery Pawel Kalinski, M.D., Ph.D., at Roswell Park, Buffalo, N.Y., involved the chemokine modulatory regimen developed by Dr. Kalinski’s group and successfully completed the Phase 1 dose escalation in patients with resectable colorectal cancer. In the 1st quarter of 2017, Dr. Kalinski relocated to Roswell Park in Buffalo, NY and has established a cancer program which will continue to require a supply of Ampligen.
Additionally, in October 2018 we signed a clinical trial agreement with Roswell Park to evaluate Ampligen in combination with checkpoint inhibitors. However, after several years of successful studies and trials, we are now strategically narrowing our focus to trials and activities that have the shortest potential path to FDA and EMA drug approval – in other words, to put our energy into the tasks where clinical results suggest an opportunity for expedited success. These potential trials would be AIM-sponsored and AIM-funded.
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Multiple Ampligen clinical trials are underway at major university cancer centers testing whether tumor microenvironments can be reprogrammed to increase the effectiveness of cancer immunotherapy, including checkpoint inhibitors, The underway trials are:
| ● | Advanced Recurrent Ovarian Cancer - A follow-up Phase 2 study of advanced recurrent ovarian cancer using cisplatin, pembrolizumab, plus Ampligen; up to 45 patients to be enrolled; enrollment has commenced, and numerous patients have commenced treatment. https://clinicaltrials.gov/ct2/show/NCT03734692 | |
| ● | Stage 4 Metastatic Triple Negative Breast Cancer - Phase 1/2 study of metastatic triple-negative breast cancer using chemokine modulation therapy, including Ampligen and pembrolizumab. Eight patients were enrolled and treated. https://www.clinicaltrials.gov/ct2/show/NCT03599453 | |
| ● | Stage 4 Colorectal Cancer Metastatic to the Liver - Phase 2a study of Ampligen as a component of chemokine modulatory regimen on colorectal cancer metastatic to liver; 15 patients were enrolled and treated. https://clinicaltrials.gov/ct2/show/NCT03403634 | |
| ● | Early-Stage Prostate Cancer - Phase 2 study investigating the effectiveness and safety of aspirin and Ampligen with or without interferon-alpha 2b (Intron A) compared to no drug treatments in a randomized three-arm study of patients with prostate cancer before undergoing radical prostatectomy. Patient enrollment has been initiated in this study designed for up to 45 patients. https://clinicaltrials.gov/ct2/show/NCT03899987 | |
| ● | Early-Stage Triple Negative Breast Cancer - Phase 1 study of chemokine modulation plus neoadjuvant chemotherapy in patients with early-stage triple negative breast cancer has received FDA authorization; the objective of this study is to evaluate the safety and tolerability of a combination of Ampligen, celecoxib with or without Intron A, when given along with chemotherapy; the goal of this approach is to increase survival. This study is recruiting patients designed for up to 24 patients. https://clinicaltrials.gov/ct2/show/NCT04081389 | |
| Additionally, we are awaiting publication of the results of a Phase 1/2 study of intraperitoneal chemo- immunotherapy in advanced recurrent ovarian cancer. The Phase 1 portion was designed to establish intraperitoneal safety. https://clinicaltrials.gov/ct2/show/NCT02432378 | ||
| The below Ampligen clinical trials and related activities are planned for initiation in 2021-22: | ||
| ● | Phase 2 Pancreatic Cancer Trial / FDA Fast Track Designation - In October 2021, AIM and Amarex, submitted an IND application and an accompanying application for Fast Track status with the FDA for a planned Phase 2 study of Ampligen as a therapy for locally advanced or metastatic late-stage pancreatic cancer. | |
| ● | Ovarian Cancer - We plan to develop a Phase 2 Cisplatin Resistant Advanced Recurrent Ovarian Cancer Clinical Study utilizing Ampligen at the University of Pittsburgh. | |
| ● | Refractory Melanoma — Phase 2 study that will evaluate polarized dendritic cell vaccine, interferon alpha-2, Ampligen and celecoxib for the treatment of HLA-A2+ refractory melanoma at Roswell Park. Up to 24 patients to be enrolled (See: https://www.clinicaltrials.gov/show/NCT04093323). |
As part of this business and scientific strategy, and after lengthy discussions with Roswell Park Comprehensive Cancer Center, we have determined that it is not in our stockholders’ best interests to relinquish “Third-Party Beneficiary” rights to any of our pre-existing intellectual property without appropriate compensation and licensing terms. This business decision has created an impasse which means we will not be moving forward with certain planned trials at Roswell Park. These trials are:
| ● | A colorectal carcinoma trial; | |
| ● | A proposed brain metastatic triple-negative breast cancer trial; | |
| ● | A proposed non-small cell lung cancer trial; and | |
| ● | A urothelial, melanoma and renal cell carcinoma trial. |
Furthermore, unlike pancreatic cancer and advanced recurrent ovarian cancer, these previous planned studies are not on our near-term critical path for future NDAs. Therefore, these will only become a priority after we accomplish our near-term goals related to pancreatic cancer and advanced recurrent ovarian cancer where data supports priority status.
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Pancreatic Cancer
In January 2017, the EAP established under our agreement with myTomorrows to enable access of Ampligen to ME/CFS patients was extended to pancreatic cancer patients beginning in the Netherlands. myTomorrows is our exclusive service provider in Europe and Turkey and will manage all EAP activities relating to the pancreatic cancer extension of the program. In February 2018, the agreement with myTomorrows was extended to cover Canada to treat pancreatic cancer patients, pending government approval. There have been no physician requests to date that would cause the program to move forward with the approval process.
A total of 42 pancreatic cancer patients received treatment with Ampligen immuno-oncology therapy under the EAP program at Erasmus MC in the Netherlands. Supervised by Prof. Casper van Eijck, MD, the team at Erasmus MC in September 2020 reported data which demonstrated a statistically significant positive survival benefit when using Ampligen in patients with locally advanced or metastatic pancreatic cancer after systemic chemotherapy, compared with historical control patients. We will work with our Contract Research Organization, Amarex Clinical Research LLC, to seek FDA “fast-track” and to obtain IND authorizations to conduct follow-up pancreatic cancer Phase 2 clinical trials with potential sites in the Netherlands at Erasmus MC under Prof. van Eijck, and also at major cancer research centers in the United States. Additionally:
| ● | In December 2020, the FDA granted Ampligen Orphan Drug Designation status for the treatment of pancreatic cancer. The Orphan Drug Designation program provides orphan status to drugs and biologics which are defined as those intended for the treatment, prevention or diagnosis of a rare disease or condition, which is one that affects less than 200,000 persons in the United States or meets cost recovery provisions of the act. The status helps incentivize the treatment of therapies to treat unmet medical needs by providing a company with seven years of exclusivity rights once a drug reaches market. | |
| ● | In February 2021, our subsidiary, NV Hemispherx Biopharma Europe, received formal notification from the European Commission (“EC”) granting Orphan Medicinal Product Designation for Ampligen as a treatment for pancreatic cancer. Orphan products, once commercially approved in the European Union (“EU”), receive benefits including up to ten years of protection from market competition from similar medicines with similar active component and indication for use that are not shown to be clinically superior. |
In June 2021, Ampligen was featured in a publication containing state-of-the-art methodologies in the peer-reviewed medical journal Cancers as a potential treatment option for cancer patients who are infected with SARS-CoV-2. The study’s authors stated that Ampligen has the potential to reduce the severity of the deadly respiratory disease COVID-19. According to laboratory data presented in the publication, “Rintatolimod [Ampligen] activated the innate and the adaptive immune systems by activating a cascade of actions in human pancreatic cancer cells”, including:
| ● | Stimulation of interferon regulatory factors and activation of the interferon signaling pathway, | |
| ● | Production of immunomodulatory activity and | |
| ● | Induction of the expression of MHC class I and II histocompatibility |
The full journal article is titled: “Rintatolimod Induces Antiviral Activities in Human Pancreatic Cancer Cells: Opening for an Anti-COVID-19 Opportunity in Cancer Patients?” Cancers is a peer-reviewed, open access journal of oncology published semimonthly online by MDPI. The study’s authors include Prof. C.H.J. van Eijck, MD, PhD, the lead investigator for an EAP at Erasmus Medical Center in the Netherlands.
In March 2021, we were granted a patent by the Netherlands Patent Office. The granted patent claims include, but are not limited to, the use of Ampligen as a combination cancer therapy with checkpoint blockade inhibitors (e.g. pembrolizumab, nivolumab).
In October 2021, we and Amarex submitted an IND application and an accompanying application for Fast Track status with the FDA for a planned Phase 2 study of Ampligen as a therapy for locally advanced or metastatic late-stage pancreatic cancer. The Buffett Cancer Center at UNMC and Erasmus MC in the Netherlands are expected to be the primary study sites, although additional sites are anticipated. The planned AMP-270 clinical trial of approximately 250 subjects will be a Phase 2, randomized, open-label, controlled, parallel-arm study with the primary objective of comparing the efficacy of Ampligen when added to SOC versus SOC alone for subjects with advanced pancreatic carcinoma recently treated with FOLFIRINOX chemotherapy regimen (secondary objectives include comparing safety and tolerability).
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Myalgic Encephalomyelitis/Chronic Fatigue Syndrome
Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (“ME/CFS”), also known as Chronic Fatigue Immune Dysfunction Syndrome (“CFIDS”) and Chronic Fatigue Syndrome (“CFS”), is a serious and debilitating chronic illness and a major public health problem. ME/CFS is recognized by both the government and private sector as a significant unmet medical need, including the U.S. National Institutes of Health (“NIH”), FDA and the CDC. The CDC states on its website at https://www.cdc.gov/me-cfs/ that “Myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS) is a serious, long-term illness that affects many body systems. People with ME/CFS are often not able to do their usual activities. At times, ME/CFS may confine them to bed. People with ME/CFS have severe fatigue and sleep problems. ME/CFS may get worse after people with the illness try to do as much as they want or need to do. This symptom is known as post-exertional malaise (PEM). Other symptoms can include problems with thinking and concentrating, pain, and dizziness.”
Many severe ME/CFS patients become completely disabled or totally bedridden and are afflicted with severe pain and mental confusion even at rest. ME/CFS is characterized by incapacitating fatigue with profound exhaustion and extremely poor stamina, sleep difficulties and problems with concentration and short-term memory. It is also accompanied by flu-like symptoms, pain in the joints and muscles, tender lymph nodes, sore throat and new headaches. A distinctive characteristic of the illness is a worsening of symptoms following physical or mental exertion, which do not subside with rest.
The high number of younger people being hospitalized for COVID-19 suggests considerable numbers of people in the prime of their lives may have a COVID-induced ME/CFS-like illness in their future. According to a 2016 journal article, the estimated annual cost of lost productivity related to ME/CFS was $9-37 billion in the United States, and for direct medical costs it was $9-14 billion.
In June of 2020, we filed a provisional patent application for, among other discoveries, the use of Ampligen as a potential early-onset therapy for the treatment of COVID-19 induced chronic fatigue.
Many survivors of the first SARS-CoV-1 epidemic in 2003 continued to report chronic fatigue, difficulty sleeping and shortness of breath months after recovering from the acute illness. “After one year, 17% of patients had not returned to work and 9% more had not returned to their pre-SARS work levels,” according to Simmaron Research. Now there is increasing evidence that patients with COVID-19 can develop a similar, ME/CFS-like illness. These patients are commonly referred to as “Long Haulers.”
In October 2020, we received IRB approval for the expansion of the AMP-511 Expanded Access Program clinical trial for ME/CFS to include patients previously diagnosed with SARS-CoV-2 following clearance of the virus, but who still demonstrate chronic fatigue-like symptoms. For more information on our AMP-511 Expanded Access Program, please see “OUR PRODUCTS: Ampligen” above.
In November 2020, we announced the publication of statistically significant data detailing how Ampligen could have a considerable positive impact on people living with ME/CFS when administered in the early stages of the disease. The data were published in PLOS ONE, a peer-reviewed open access scientific journal published by the Public Library of Science. AIM researchers found that the TLR3 agonist Ampligen substantially improved physical performance in a subset of ME/CFS patients.
Ampligen as a Potential Antiviral
Following the SARS-CoV-1 outbreak in 2002-03, Ampligen exhibited excellent antiviral properties and protective survival effect in NIH-contracted studies of SARS-CoV-1-infected mice, which is very similar to SARS-CoV-2, the novel virus that causes COVID-19.
| ● | The Barnard 2006 study (https://journals.sagepub.com/doi/abs/10.1177/095632020601700505) found that Ampligen reduced virus lung levels to below detectable limits. | |
| ● | The Day 2009 study (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2787736/) found that, instead of 100% mortality, there was 100% protective survival using Ampligen. |
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We compared key transcription regulatory sequences of SARS-CoV-1 to SARS-CoV-2 and found significant similarities, suggesting highly probable extension of the antiviral effects of Ampligen in the earlier NIH-contracted SARS experiments to COVID-19. The SARS-CoV-2 virus – which causes COVID-19 – shares important genomic and pathogenic similarities with SARS-CoV-1 (hence its name). Since Ampligen has shown antiviral activity against more distantly related coronaviruses, there was a reasonable probability that the antiviral effects of Ampligen against SARS-CoV-1 will likely extend to SARS-CoV-2, and as discussed below, recently, Ampligen has demonstrated ex vivo antiviral activity against SARS-CoV-2. We believe that this creates a compelling case for clinical trials to evaluate Ampligen as a potential tool in the fight against COVID-19.
Since the late 2019 outbreak of SARS-CoV-2, we have been actively engaged in determining whether Ampligen could be an effective treatment for this virus or could be part of a vaccine. We believe that Ampligen has the potential to be both an early-onset treatment for and prophylaxis against SARS-CoV-2. We believe that prior studies of Ampligen in SARS-CoV-1 animal experimentation may predict similar protective effects against the new virus.
In February 2020, we filed three provisional patent applications related to Ampligen in our efforts toward joining the global health community in the fight against the deadly coronavirus (See: https://aimimmuno.com/press-release/aim-immunotech-files-provisional-patent-application-for-the-use-of-ampligenr-as-a-potential-therapy-for-covid-19-induced-chronic- fatigue/). Our three provisional patent applications include: 1) Ampligen as a therapy for the coronavirus; 2) Ampligen as part of a proposed intranasal universal coronavirus vaccine that combines Ampligen with inactivated coronavirus, conveying immunity and cross-protection and; 3) a high-volume manufacturing process for Ampligen. Under the Patent Cooperation Treaty of 1970, which provides international protections for patents, these three provisional patent applications were converted in to two international patent applications based on the date of their filings.
On April 1, 2020, we entered into a Material Transfer and Research Agreement (“MTA”) with Shenzhen Smoore Technology to study the utilization of an innovative Smoore inhalation delivery device and Ampligen as a potential treatment approach for the SARS-CoV-2 pandemic. The MTA was extended for two years in May 2021. There have been obstacles related to importing Ampligen to China. We have been working with Smoore to alleviate these issues and to identify a mutually beneficial course of action that would allow us to move forward with the proposed testing of Ampligen outside of China. On parallel paths, over the past year, Smoore focused on the development of a personal inhalation device designed to administer Ampligen, given temperature parameters of dsRNA. Contemporaneously, we have studied the safety and efficacy of Ampligen using an ex vivo 3D model in primary human respiratory epithelial cells at Utah State University, which showed that Ampligen was able to decrease SARS-CoV-2 infectious viral yields by 90% at clinically achievable intranasal Ampligen dosage levels, and conducted intranasal safety testing. AIM and Smoore signed a two-year extension of the MTA in May 2021. We are exploring avenues to further test Ampligen as an inhalation therapy in the United States and Europe, while Smoore continues to work toward receiving authorization to import Ampligen to China.
On August 6, 2020, we contracted Amarex Clinical Research LLC (“Amarex”) to act as our Clinical Research Organization and provide regulatory support with regard to a possible clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via intranasal delivery.
Beginning in April 2020, we entered into confidentiality and non-disclosure agreements with numerous companies for the potential outsourcing of the production of polymer, enzyme, placebo as well as Ampligen, and one Contract Research Organization, Amarex, which will provide regulatory and monitoring support related to a clinical trial testing Ampligen’s intranasal safety and potential as a COVID-19 prophylaxis via intranasal delivery.
In addition, we joined with ChinaGoAbroad (“CGA”) to facilitate the entry of Ampligen into the People’s Republic of China (“PRC”) for use as a prophylactic/early-onset therapeutic against COVID-19. CGA is a member-based online information platform and offline advisory firm serving to facilitate two-way international transactions relating to the PRC in collaboration with the China Overseas Development Association (“CODA”). The relationship with ChinaGoAbroad is ongoing.
On May 11, 2020, the FDA authorized an IND for Roswell Park to conduct a Phase 1/2a study of a regimen of Ampligen and interferon alpha in cancer patients with COVID-19 infections. This clinical trial, sponsored by Roswell Park in collaboration with us, will test the safety of this combination regimen in patients with cancer and COVID-19, and the extent to which this therapy will promote clearance of the SARS-CoV-2 virus from the upper airway. Several subjects have been treated and recruitment continues. It is planned that the phase 1/2a study will enroll up to 44 patients in two stages. Phase 1 will see 12-24 patients receiving both Ampligen and interferon alfa-2b at escalating doses. Once that initial phase is complete, further study participants will be randomized to two arms: one receiving the two-drug combination and a control group who will not receive Ampligen or interferon alfa but will receive best available care. We are a financial sponsor of the study and will provide Ampligen at no charge for this study.
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On July 6, 2020, we entered into a clinical trial agreement with Roswell Park pursuant to which Roswell Park will conduct a Phase 1/2a trial of Ampligen (rintatolimod) in combination with interferon alfa, in cancer patients with COVID-19, the disease caused by the SARS-CoV-2 coronavirus. We and the National Cancer Institute are supporting this trial. We reported in September 2020 that recruitment in the trial had begun (See clinicaltrials.gov/NCT04379518). On November 25, 2020, the first patient in the study had been enrolled and treated. This study was amended to add 20 patients, with 10 randomized to receive a single dose of Ampligen and 10 patients to receive current best therapies.
We also entered into a specialized services agreement with Utah State University and have supplied Ampligen to support the University’s Institute for Viral Research in its research into SARS-CoV-2. The Utah State results show that Ampligen was able to decrease SARS-CoV-2 infectious viral yields by 90% at clinically achievable intranasal Ampligen dosage levels.
On October 6, 2020, we received IRB approval for the expansion of the AMP-511 Expanded Access Program clinical trial for ME/CFS to include patients previously diagnosed with SARS-CoV-2, but who still demonstrate chronic fatigue-like symptoms. Patients in the trial are treated with our flagship pipeline drug Ampligen. On January 6, 2021, we commenced with the treatment of the first previously diagnosed COVID-19 patient with long-COVID symptoms (i.e., Long Hauler) in the AMP-511 study. Enrollment of Long Hauler patients continues in the study.
On November 29, 2020, we entered into a Material Transfer and Research Agreement with Leyden Laboratories, B.V., (“Leyden Lab”) to facilitate two proposed studies/research projects:
| ● | An assessment of protective potential of intranasal administration of Ampligen in SARS-CoV-2 Syrian hamster challenge model; and | |
| ● | An assessment of protective potential of intranasal Ampligen in lethal influenza mouse challenge model. |
On January 11, 2021, we entered into a Sponsor Agreement with the Centre for Human Drug Research (“CHDR”), a foundation located in the Leiden in the Netherlands, to manage a Phase 1 randomized, double-blind study to evaluate the safety and activity of repeated intranasal administration of Ampligen. AIM funded and sponsored the study. This study was designed to assess the safety, tolerability and biological activity of repeated administration of Ampligen intranasally. A total of 40 healthy subjects received either Ampligen or a placebo in the trial, with the Ampligen given at four escalating dosages across four cohorts, to a maximum level of 1,250 micrograms. All patients had completed treatment by June 2021 and the interim results reported no Serious or Severe Adverse Events at any dosage level. We believe that the trial is a critical step in our ongoing efforts to develop Ampligen as a potential prophylaxis or treatment for COVID-19 and other respiratory viral diseases. Amarex provided us with monitoring support during the trial.
Following the completion of the Phase 1 dosing, and based on its positive interim results in June 2021 (which have since been publicly supported in a CHDR-created data visualization published in October 2021), we signed a Reservation and Start-Up Agreement with hVIVO, reserving space in hVIVO’s quarantine facility to sponsor a Phase 2a Human Challenge Trial (“HCT”) to test Ampligen as a potential intranasal antiviral therapy using a human Rhinovirus hRV (common cold virus) and Influenza. This antiviral study will be conducted by hVIVO, a subsidiary of Open Orphan plc, a rapidly growing specialist pharmaceutical services clinical research organization and world leader in vaccine and antiviral testing using human challenge clinical trials. We have submitted its study protocol to the Oxford Research Ethics Committee (“REC”)/Medicines and Healthcare Regulatory Agency (“MHRA”) on September 10, 2021. The REC approved the protocol, but the MHRA provided a response outlining areas of the submission where it requires additional information. We intend to re-submit our proposed protocol as soon as possible.
In an HCT, subjects are intentionally exposed to particular diseases to test how the diseases will respond to potential therapeutics. An HCT will allow us to expedite the development process for Ampligen by ensuring full exposure of both the control group and the Ampligen group, so as to assess whether there is a prophylactic effect. A successful Phase 2a study could also establish Ampligen as a potential prophylaxis against future viral variants and future novel respiratory viruses for which there are no current therapies, as well as known viruses such as SARS-CoV-2, which causes COVID-19.
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We reached two important milestones in the HCT in September 2021. One, we submitted the study protocol to the MHRA. Two, we and hVIVO executed the Clinical Trial Agreement.
Additionally, we filed two COVID-19-related provisional patent applications in the third quarter of 2021. In August, we filed an application for Ampligen as both an intranasal and an intravenous therapy for what we describe as Post-COVID-19 Cognitive Dysfunction (“PCCD”). The people suffering from PCCD, including some young adults, can be afflicted with severe difficulties in concentrating; serious memory problems; and the inability to live an active lifestyle, to work and even to perform everyday tasks. Early data has demonstrated that patients with symptoms of PCCD being treated with Ampligen in the ongoing AMP-511 Expanded Access Program have reported improvements in cognitive function. Similarly, in ME/CFS, data supports the claim that Ampligen improves cognitive function. Then in September, we filed a patent application for Ampligen as a potential early-onset intranasal therapy designed to enhance and expand infection-induced immunity, epitope spreading, cross-reactivity and cross-protection in patients exposed to a wide range of RNA respiratory viruses, such as influenza, Rhinoviruses and SARS-CoV-2.
We believe that these two provisional patent applications were important steps that allowed us to move forward with proposed studies in these areas. We followed both with Pre-Investigational New Drug Applications in September. One pre-IND was for a Phase 2, two-arm, randomized, double-blind, placebo-controlled, multicenter study to evaluate the efficacy and safety of Ampligen in patients experiencing PCCD. Eighty subjects will be randomized 1:1 to receive twice weekly infusions of Ampligen or placebo for a period of 12 weeks. Amarex Clinical Research, an NSF International company, is managing the FDA submission and will manage the clinical trial. The pre-IND meeting request was transferred to the FDA’s Division of Neurology by the FDA’s Covid Scientific Technical Triage Team.
On September 24, 2021, we submitted another pre-IND meeting request for two separate Phase 2 clinical studies to study the potential of Ampligen as both an infusion and an intranasal therapy for early-onset COVID-19. The two clinical trials would be Phase 2, randomized, double-blind, placebo-controlled studies to evaluate the efficacy and safety of Ampligen as an:
| ● | Intravenous therapy – 200 mg of Ampligen or placebo, with five doses over a treatment period of 17 days; and an | |
| ● | Intranasal therapy – 1,250 μg spray (625 μg per nostril), with seven doses over a treatment period of 15 days. |
The FDA responded that it was premature and denied our meeting request, noting the primary reason that we first needed to address its comments on two prior similar pre-IND submissions related to the potential risks of administering Ampligen to patients with asymptomatic or mildly symptomatic COVID-19 were justified by potential benefits . We plan on responding to the FDA regarding the early onset COVID-19 submission. The FDA has already authorized Ampligen for a clinical trial in cancer patients, and subjects have been and will be treated in the investigator-sponsored Phase 2 trial at the Roswell Park Comprehensive Cancer Center. Our plans to study Ampligen in asymptomatic and mild COVID-19 cases await further consideration of the different risks and benefits associated with those trials.
Other Diseases
In Europe, the EMA has approved the Orphan Medicinal Products Designation for Ampligen as a potential treatment of Ebola virus disease and for Alferon N Injection as a potential treatment of MERS.
We concluded our series of collaborations designed to determine the potential effectiveness of Ampligen and Alferon N as potential preventive and/or therapeutic treatments for Ebola related disorders. Although we believe that the threat of both MERS and Ebola globally may reemerge in the future, it appears that the spread of these disorders has somewhat diminished. As a result, we have elected to focus our research and development efforts on other areas at this time.
On April 5, 2021, we entered into an MTA with the University of Cagliari Dipartimento di Scienze della Vita e dell’Ambiente (“UNICA”), an educational institution, under the laws of Italy, located in Monserrato (Cagliari), Italy. The MTA relates to the research and development of the effects of Ampligen and its ability to induce interferon production in several cell lines, and also on the ability of the Ebola virus protein VP35 to bind to viral dsRNA and impede interferon’s upregulation and activity, and on Ampligen’s ability to reverse VP35 inhibition of interferon production in biological systems.
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On May 5, 2021, we filed a U.S. Provisional Patent Application for Ampligen as a potential therapeutic to possibly slow, halt, or reverse the progression of Alzheimer’s disease.
MANUFACTURING
The Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica (“ANMAT”) in Argentina approved Ampligen for commercial distribution for the treatment of Chronic Fatigue Syndrome (“CFS”) in 2016. Shipment of the drug product to Argentina was initiated in 2018 to complete the release testing by ANMAT needed for commercial distribution. On September 19, 2019, we received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales. On June 10, 2020, we received import clearance from ANMAT to import the first shipment of commercial grade vials of Ampligen into Argentina. We are currently working with GP Pharm on the commercial launch of Ampligen in Argentina (See “Our Products; Ampligen” above).
Jubilant HollisterStier (“Jubilant”) is our authorized CMO for Ampligen for our approval in Argentina. Since the 2017 engagement of Jubilant to manufacture Ampligen, two lots of Ampligen consisting of more than 16,000 units were manufactured and released in 2018. These lots have been designated for human use in the United States in the cost recovery CFS program and for expanded oncology clinical trials. The production of additional polymer (Ampligen intermediates) took place in 2019 at our New Brunswick facility. Additionally, two lots of Ampligen were manufactured in December 2019 and January 2020 at Jubilant. The current manufactured lots of Ampligen have been fully tested and released for commercial product launch in Argentina and for clinical trials. In addition, we have supplied GP Pharm with the Ampligen required for testing and ANMAT release. Once final approval by ANMAT is obtained, we anticipate that GP Pharm will begin distributing Ampligen in Argentina.
In December 2020, we added Pharmaceutics International Inc. (“Pii”) as a “Fill & Finish” provider to enhance our capacity to produce Ampligen. This addition amplifies our manufacturing capability by providing redundancy and cost savings. The contracts augment our existing fill and finish capacity.
Alferon is approved by the FDA for commercial sales in the United States for the treatment of genital warts. It is also approved by ANMAT in Argentina for commercial sales for the treatment of genital warts and in patients who are refractory to treatment with recombinant interferons.
Commercial sales of Alferon in the United States will not resume until new batches of commercial filled and finished product are produced and released by the FDA. While our facility is approved by the FDA under the Biologics License Application (“BLA”) for Alferon, we will need the FDA’s approval to release commercial product once we have submitted satisfactory stability and quality release data, FDA has conducted an inspection, if required, and FDA has approved our new manufacturing process. Currently, we are not manufacturing Alferon and there is no definitive timetable to resume production at the facility.
We have reviewed our operations at the New Brunswick facility and determined that some of the equipment should be upgraded to realize greater efficiencies. This may include ensuring a state-of-the-art facility capable of meeting potential increased demand for Ampligen. If we determine that we need expanded capacity, and/or we determine not to move forward with upgrading the facility, we will need to move forward with other possibilities to produce API. We are exploring engaging a Contract Manufacturing Organization (“CMO”) to produce API. While we believe we have sufficient API to meet our current needs, we are also continually exploring new efficiencies so as to maximize our ability to fulfill future obligations. In this regard, on April 5, 2021, we approved a proposal from Polysciences Inc. (“Polysciences”) for the manufacture of our Poly I and Poly C12U polynucleotides and associated test methods at Polysciences’ Warrington, PA location to enhance our capacity to produce the polymer precursors to the drug Ampligen. We are working with Polysciences to finalize a Service Agreement and a Quality Agreement. We continue to search for additional CMOs so as to create redundancy and, additionally, to meet the potential need for larger quantities of API.
On May 13, 2021, we exercised our option to re-purchase the New Brunswick manufacturing facility, pursuant to the terms of the March 16, 2018 sale and lease-back agreement. We thereafter sold certain equipment and machinery that we determined to be obsolete and no longer needed for current or future manufacturing.
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Licensing/Collaborations/Joint Ventures
To enable potential availability of Ampligen to patients on a worldwide basis, we have embarked on a strategy to license the product and/or to collaborate and/or create a joint venture with companies that have the demonstrated capabilities and commitment to successfully gain approval and commercialize Ampligen in their respective global territories of the world. Ideal partners would have the following characteristics: well-established global and regional experience and coverage; robust commercial infrastructure; a strong track record of successful development and registration of in-licensed products; and a therapeutic area fit (ME/CFS, immuno-oncology, e.g.).
MARKETING/DISTRIBUTION
In May 2016, we entered into a five-year exclusive Renewed Sales, Marketing, Distribution and Supply Agreement (the “Agreement”) with GP Pharm. Under this Agreement, GP Pharm was responsible for gaining regulatory approval in Argentina for Ampligen to treat severe CFS in Argentina and for commercializing Ampligen for this indication in Argentina. We granted GP Pharm the right to expand rights to sell this experimental therapeutic into other Latin America countries based upon GP Pharm achieving certain performance milestones. We also granted GP Pharm an option to market Alferon N Injection in Argentina and other Latin America countries (See “Our Products; Ampligen” above). The GP Pharm contract was extended in May 2021, and will now end on May 24, 2024.
In January 2017, the ANMAT granted a five-year extension to a previous approval to sell and distribute Alferon N Injection (under the brand name “Naturaferon”) in Argentina. This extends the approval until 2022. In February 2013, we received the ANMAT approval for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferon, with Naturaferon in Argentina.
In May 2016, we entered into a five-year agreement (the “Impatients Agreement”) with Impatients, N.V. (“myTomorrows”), a Netherlands-based company, for the commencement and management of an EAP in Europe and Turkey (the “Territory”) related to ME/CFS. Pursuant to the agreement, myTomorrows, as our exclusive service provider and distributor in the Territory, is performing EAP activities. These activities will be directed to (a) the education of physicians and patients regarding the possibility of early access to innovative medical treatments not yet the subject of a Marketing Authorization (regulatory approval) through named-patient use, compassionate use, expanded access and hospital exemption, (b) patient and physician outreach related to a patient-physician platform, (c) the securing of Early Access Approvals (exemptions and/or waivers required by regulatory authorities for medical treatments prior to Marketing Authorization) for the use of such treatments, (d) the distribution and sale of such treatments pursuant to such Early Access Approvals, (e) pharmacovigilance (drug safety) activities and/or (f) the collection of data such as patient-reported outcomes, doctor-reported experiences and registry data. We are supporting these efforts and supplying Ampligen to myTomorrows at a predetermined transfer price. In the event that we receive Marketing Authorization in any country in the Territory, we will pay myTomorrows a royalty on products sold. Pursuant to the Impatients Agreement, the royalty would be a percentage of Net Sales (as defined in the Impatients Agreement) of Ampligen sold in the Territory where Marketing Authorization was obtained. The formula to determine the percentage of Net Sales will be based on the number of patients that are entered into the EAP. We believe that disclosure of the exact maximum royalty rate and royalty termination date could cause competitive harm. However, to assist the public in gauging these terms, the actual maximum royalty rate is somewhere between 2% and 10% and the royalty termination date is somewhere between five and fifteen years from the First Commercial Sale of a product within a specific country. The parties established a Joint Steering Committee comprised of representatives of both parties to oversee the EAP. No assurance can be given that activities under the EAP will result in Marketing Authorization or the sale of substantial amounts of Ampligen in the Territory. The agreement was automatically extended for a period of 12 months on May 20, 2021.
In January 2017, the EAP through our agreement with myTomorrows designed to enable access of Ampligen to ME/CFS patients has been extended to pancreatic cancer patients beginning in the Netherlands. myTomorrows is our exclusive service provider in the Territory and will manage all EAP activities relating to the pancreatic cancer extension of the program.
In February 2018, we signed an amendment to the EAP with myTomorrows. This amendment extended the territory to cover Canada to treat pancreatic cancer patients, pending government approval. In March 2018, we signed an amendment to the EAP with myTomorrows, pursuant to which myTomorrows will be our exclusive service provider for special access activities in Canada for the supply of Ampligen for the treatment of ME/CFS.
In December 2020, we entered into a signed Letter of Agreement with myTomorrows for the delivery of Ampligen for the treatment of up to 16 pancreatic cancer patients.
In August 2017, we extended our agreement with Asembia LLC, formerly Armada Healthcare, LLC, to undertake the marketing, education and sales of Alferon N Injection throughout the United States. This agreement has expired and we are currently in discussions with Asembia exploring the continuation and expansion of this relationship.
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401(k) Plan
Each participant immediately vests in his or her deferred salary contributions, while our contributions will vest over one year. Our 6% matching contribution was reinstated effective January 1, 2021. For the nine months ended September 30, 2021, our contributions towards the 401(k) Plan were approximately $106,000.
New Accounting Pronouncements
See “Note 10: Recent Accounting Pronouncements”.
Disclosure About Off-Balance Sheet Arrangements
None.
Critical Accounting Policies
There have been no material changes in our critical accounting policies and estimates from those disclosed in Part II; Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations; Critical Accounting Policies” contained in our Annual Report on Form 10-K for the year ended December 31, 2020.
RESULTS OF OPERATIONS
Three months ended September 30, 2021, versus three months ended September 30, 2020
Net Loss
Our net loss was approximately $3,826,000 and $3,306,000 for the three months ended September 30, 2021, and 2020, respectively, representing an increase in loss of approximately $520,000 or 16%. This increase in loss was primarily due to the following:
| ● | an increase in research and development cost of $904,000; | |
| ● | an increase in a gain from sale of income tax operating tax operating losses of $72,000; offset by | |
| ● | an increase of $20,000 from the 2020 quarterly reevaluation of certain redeemable warrants; | |
| ● | a decrease in production costs of $47,000; | |
| ● | a decrease in selling general and administrative cost of $286,000; | |
| ● | a decrease in interest expense and other finance cost of $51,000; and | |
| ● | a decrease in interest income of $89,000. |
Net loss per share was $(0.08) and $(0.08) for the three months ended September 30, 2021, and 2020, respectively. The weighted average number of shares of our common stock outstanding as of September 30, 2021, was 47,846,074 as compared to 38,907,546 as of September 30, 2020.
Revenues
Revenues from our Ampligen Cost Recovery Program were $33,000 and $36,000 for the quarters ended September 30, 2021 and 2020, respectively. There was a decrease in revenues of $3,000. The revenue was generated from the Expanded Access Program and our FDA-approved, open-label treatment protocol (“AMP-511”) that allows patient access to Ampligen for treatment in an open-label safety study.
Production Costs
Production costs were approximately $157,000 and $204,000, respectively, for the three months ended September 30, 2021, and 2020, representing a decrease of $47,000 in production costs in the current period. These costs primarily represent reduced utility cost for decreased production levels in the three months ending September 30, 2021.
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Research and Development Costs
Research and Development (“R&D”) costs for the three months ended September 30, 2021, were approximately $2,006,000 as compared to $1,102,000 for the quarter ended September 30, 2020, reflecting an increase of approximately $904,000 or 82%. The reason for the increase in research and development costs was due to increases in clinical research of $807,000 and clinical expenses of $130,000 offset by decreases in Ampligen compliance and stability of $35,000.
General and Administrative Expenses
General and Administrative (“G&A”) expenses for the three months ended September 30, 2021, and 2020 were approximately $1,799,000 and $2,085,000, respectively, reflecting a decrease of approximately $286,000 or 14%. The decrease in G&A expenses during the current period was mainly due to professional fees of $305,000, and offset by an increase in salaries, benefits, and other compensation of $78,000.
Interest Income
Interest income decreased $89,000 in the three months ended September 30, 2021, compared to the three months ended September 30, 2020, the decrease is primarily related to the reclassification out of other comprehensive income of debt securities sold at a loss during the period.
Interest Expense and Other Finance Costs
Interest and other finance costs in the three months ending September 31, 2021 was zero due to no outstanding debt compared to $51,000 in the period ending September 30, 2020.
Redeemable Warrants
The quarterly revaluation of certain redeemable warrants resulted in a non-cash adjustment to the redeemable warrants liability for the three months ended September 30, 2021, which amounted to a gain of approximately $51,000 compared to a gain of $31,000 for September 30, 2020 (See Note 12: Fair Value - for the various factors considered in the valuation of redeemable warrants).
Income Tax Operating Losses
The quarterly income tax benefit for the three months ended September 30, 2021, amounted to a gain of approximately $72,000 due primarily to the provision of the 2020 New Jersey NOL.
Nine months ended September 30, 2021 versus nine months ended September 30, 2020
Net Loss
Our net loss was approximately $13,281,000 and $10,466,000 for the nine months ended September 30, 2021, and 2020, respectively, representing an increase in loss of approximately $2,815,000 or 27%. This increase in loss was primarily due to the following:
| ● | an increase in extinguishment of financing obligation and note payable of $2,843,000; | |
| ● | an increase in research and development expenses of $1,304,000; | |
| ● | an increase in production costs of $66,000; | |
| ● | an increase in income tax operating tax of $542,000; offset by | |
| ● | a decrease in selling, general and administrative cost of $15,000; | |
| ● | a decrease in interest income of $31,000; | |
| ● | a decrease in revenue of $36,000; offset by | |
| ● | a decrease of $142,000 from the 2020 quarterly reevaluation of certain redeemable warrants; | |
| ● | a gain on sale of assets of $216,000; | |
| ● | a decrease in interest expense and other finance cost of $550,000. |
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Net loss per share was $(0.28) and $(0.36) for the nine months ended September 30, 2021, and 2020, respectively. The weighted average number of shares of our common stock outstanding as of September 30, 2021, was 47,156,158 as compared to 28,826,283 as of September 30, 2020.
Revenues
Revenues from our Ampligen Cost Recovery Program were $85,000 and $121,000 for the nine months ended September 30, 2021, and 2020, respectively. There was a decrease in revenues of $36,000. The change in revenue is related to timing of orders and shipments in the nine months ended September 30, 2020. The revenue was generated from the Expanded Access Program and our FDA approved open-label treatment protocol, (“AMP-511”), that allows patient access to Ampligen for treatment in an open-label safety study.
Production Costs
Production costs were approximately $674,000 and $608,000, respectively, for the nine months ended September 30, 2021, and 2020, representing an increase of $66,000 in production costs in the current period. These costs primarily represent production expenses related to increased maintenance costs, offset by reduced utility costs in the nine months ended September 30, 2021.
Research and Development Costs
Research and Development (“R&D”) costs for the nine months ended September 30, 2021, were approximately $4,749,000 as compared to $3,445,000 for the quarter ended September 30, 2020, reflecting an increase of approximately $1,304,000 or 38%. The reason for the increase in research and development costs was due to increases in clinical expenses of $1,345,000, offset by decreases in Ampligen compliance and stability test costs of $41,000.
General and Administrative Expenses
General and Administrative (“G&A”) expenses for the quarters ended September 30, 2021, and 2020 were approximately $6,055,000 and $6,070,000, respectively, reflecting a decrease of approximately $15,000. The decrease in G&A expenses during the current period was mainly due to an increase in salaries, benefits and other compensation of $842,000, offset by decreases in stock compensation of $723,000, public relations of $43,000 and professional fees of $91,000.
Interest Income
Interest income decreased $31,000 in the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, driven by a decrease primarily the reclassification out of other comprehensive income of debt securities sold of $126,000, offset by the increase in interest income from investments.
Interest Expense and Other Finance Costs
Interest and other finance costs decreased $550,000 in the nine months ended September 30, 2021, mostly due to the costs associated with the long-term debt which were in effect in the nine months ended September 30, 2020. The long-term debt was extinguished in the second quarter of 2020.
Redeemable Warrants
The quarterly revaluation of certain redeemable warrants resulted in a non-cash adjustment to the redeemable warrants liability for the nine months ended September 30, 2021, which amounted to a gain of approximately $22,000 compared to a loss of $120,000 for September 30, 2020 (See Note 12: Fair Value - for the various factors considered in the valuation of redeemable warrants).
Extinguishment of Financing Obligation and Note Payable
During the nine months ended September 30, 2020, there was a gain of $142,000 related to the prepayment of the note payable.
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During the nine months ended September 30, 2021, there was a loss on the extinguishment of debt of $2,701,000 related to the repurchase of the manufacturing facility (See note 13 Financing Obligating Arising from Sales Leaseback Transaction).
Income Tax Operating Losses
The quarterly income tax benefit for the nine months ended September 30, 2021, amounted to a gain of approximately $542,000 due primarily to the provision of the 2020 New Jersey NOL.
Liquidity and Capital Resources
As of September 30, 2021, we had approximately $53,659,000 in cash, cash equivalents and marketable securities. As of December 31, 2020, we had approximately $54,378,000 in cash, cash equivalents and marketable securities. Cash used in operating activities for the nine months ended September 30, 2021, was $8,220,000 compared to $7,514,000 for the nine months ended September 30, 2020. The change of $706,000 was a decrease in prepaid and other current assets of $700,000, a decrease in accrued interest of $230,000, tax benefit from the gain on the sale of New Jersey NOL of $542,000, offset the increase in stock compensation of $724,000.
Cash used in investing activities for the nine months ended September 30, 2021, was approximately $995,000 compared to cash used in investing activities of approximately $8,982,000 for the same period in 2020, representing a change of $7,987,000. The primary reason for the change during the current period is the purchase and sale of marketable securities of $762,000 compared to the $8,672,000 for the same period in 2020, and by the proceeds from the sale of property and equipment of $245,000.
Cash provided by financing activities for the nine months ended September 30, 2021, was approximately $8,063,000 compared to approximately $53,522,000 for the same period in 2020, a decrease of $45,459,000. The primary reason for the decrease in the nine months ended September 30, 2021, is our receipt of net proceeds of approximately $12,917,000 from the sale common stock pursuant to our 2019 EDA with Maxim Group compared to $58,066,000 for the same period in 2020.
In July 2021, we executed a Reservation and Start-Up Agreement (the “Agreement”) with hVIVO Services Limited (“hVIVO”), and subsequently signed a clinical trial agreement (“CTA”) in September. We have paid hVIVO approximately $672,000, representing half of the booking fee for use of its quarantine facility. The balance of the agreement is approximately $3,398,000. (See “COVID19” above).
In January 2021, we entered into a Sponsor Agreement with the Centre for Human Drug Research (“CHDR”) for a Phase 1 clinical study to assess the safety, tolerability and biological activity of Ampligen as a potential intranasal therapy. We have paid CHDR approximately $1,010,000. The balance of the agreement is approximately $70,000.
We are committed to a focused business plan oriented toward finding senior co-development partners with the capital and expertise needed to commercialize the many potential therapeutic aspects of our experimental drugs and our FDA approved drug Alferon.
The development of our products requires the commitment of substantial resources to conduct the time-consuming research, preclinical development and clinical trials that are necessary to bring pharmaceutical products to market. We believe, based on our current financial condition, that we have adequate funds to meet our anticipated operational cash needs and fund current clinical trials over approximately the next twenty-four months from the issuance of the financial statements. At present we do not generate any material revenues from operations, and we do not anticipate doing so in the near future. We may need to obtain additional funding in the future for new studies and/or if current studies do not yield positive results, require unanticipated changes and/or additional studies. If we are unable to commercialize and sell Ampligen and/or recommence material sales of Alferon N Injection, our operations, financial position and liquidity may be adversely impacted, and additional financing may be required. There can be no assurances that, if needed, we will be able to raise adequate funds or enter into licensing, partnering or other arrangements to advance our business goals. We may seek to access the public equity market whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. We are unable to estimate the amount, timing or nature of future sales of outstanding common stock or instruments convertible into or exercisable for our common stock. Any additional funding may result in significant dilution and could involve the issuance of securities with rights, which are senior to those of existing stockholders.
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The proceeds from our financings have been used to fund infrastructure growth including manufacturing, regulatory compliance and market development along with our efforts regarding the Ampligen manufacturing and the Ampligen NDA.
ITEM 3: Quantitative and Qualitative Disclosures About Market Risk
We had approximately $53,659,000 in cash, cash equivalents and marketable securities as of September 30, 2021, as compared to $54,378,000 at December 31, 2020.
To the extent that our cash and cash equivalents exceed our near-term funding needs, we intend to invest the excess cash in money market accounts, high-grade corporate bonds or fixed-income type bond funds. We employ established conservative policies and procedures to manage any risks with respect to investment exposure.
ITEM 4: Controls and Procedures
Our Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) performed an evaluation of the effectiveness of our disclosure controls and procedures, which have been designed to permit us to effectively identify and timely disclose important information. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our CEO and CFO concluded that the controls and procedures were effective as of September 30, 2021, to ensure that material information was accumulated and communicated to our management, including our CEO and CFO, is appropriate to allow timely decisions regarding required disclosure.
During the nine months ended September 30, 2021, we made no change in our internal controls over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
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Part II – OTHER INFORMATION
ITEM 1: Legal Proceedings
Nothing new during the quarter ended September 30, 2021. Please see Part I, Item 3. Legal Proceedings in our Annual Report on Form 10-K for the year ended December 31, 2020.
ITEM 1A: Risk Factors
Please carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 31, 2021 and our subsequent Quarterly Reports on Form 10-Q, which could materially affect our business, financial condition, or future results. The risks described in the above reports are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results. Please also see “Special Note Regarding Forward-Looking Statements” above.
ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds
On July 16, 2021, we sold, 15,625 shares of our common stock in private transactions at purchase prices, respectively, of $1.92 per share. No commissions were paid with regard to these sales. The sales were made pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.
ITEM 3: Defaults upon Senior Securities
None.
ITEM 4: Mine Safety Disclosures
Not Applicable.
ITEM 5: Other Information
In September 2021, Ellen Lintal informed us that she intended to retire as Chief Financial Officer effective March 31, 2022 and, therefore, would not be renewing her contract. The retirement date permits her to prepare and file our next annual report on Form 10-K for the year ending December 31, 2021. Ms. Lintal has agreed to remain available to us after her retirement — on a contractual basis — to assist with future annual and quarterly filings with the SEC.
ITEM 6: Exhibits
| (a) | Exhibits |
| 39 |
| 101.INS | XBRL Instance Document ** *** | |
| 101.SCH | XBRL Taxonomy Extension Schema Document ** *** | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document ** *** | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document ** *** | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document ** *** | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document ** *** | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed with the Securities and Exchange Commission as an exhibit to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2021 filed August 16, 2021 and is hereby incorporated by reference.
** Filed herewith.
*** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities and Exchange Act of 1934, as amended and otherwise are not subject to liability under those sections.
| 40 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| AIM IMMUNOTECH INC. | |
| /s/ Thomas K. Equels | |
| Thomas K. Equels, Esq. | |
| Chief Executive Officer & President | |
| /s/ Ellen M. Lintal | |
| Ellen M. Lintal | |
| Chief Financial Officer | |
| Date: November 15, 2021 |
| 41 |
Exhibit 10.2
EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT
THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.
Confidential
(1) hVIVO Services Ltd
– and –
(2) AIM ImmunoTech Inc
Clinical Trial Agreement
EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT
THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.
Confidential
THIS CLINICAL TRIAL AGREEMENT (the “Agreement”) is made by and between hVIVO Services Limited, a company registered in England (company registration number 02326557) whose registered office is at QMB Innovation Centre, 42 New Road, London E1 2AX, UK (“hVIVO”); and AIM ImmunoTech Inc., a company registered in Delaware USA, whose principle place of business is at 2117 SW Highway 484 Ocala, FL 34473, USA (the “Sponsor”).
RECITALS:-
| (A) | The Sponsor is a company involved in the research and development of medicines for use in humans. |
| (B) | hVIVO is a specialty biopharma company with discovery and clinical testing capabilities, pioneering a human disease models technology platform in respiratory and infectious diseases. |
| (C) | The Sponsor wishes to access hVIVO’s human viral challenge model to conduct a clinical study in connection with Sponsor’s product Ampligen®, and hVIVO is willing to provide such access and associated services, in accordance with and subject to the provisions set forth in this Agreement. |
| (D) | This Agreement shall supersede the Reservation and Start-Up Agreement, entered into by the Parties on 08 July 2021. |
THE PARTIES HERBY AGREE AS FOLLOWS:
1. DEFINITIONS
In this Agreement, the following terms shall have the following meanings:
| 1.2 “Affiliate” | in relation to a Party, means any entity that directly or indirectly controls, is controlled by, or is under common control with that Party, for so long as such control exists. In the case of companies and corporations “control” and “controlled” means beneficial ownership of more than fifty percent (50%) of the voting stock, shares or equity in an entity. In the case of any other legal entity, “control” and “controlled” shall exist through the ability to directly or indirectly control the management and/or business of the legal entity. |
| 1.3 “Agreement” | means this agreement including any schedules attached to it. |
| 2 |
EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT
THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.
Confidential
| 1.4 “Applicable Law (s)” | means the laws, rules and regulations that are in force at the Effective Date or may come into force at any time after the Effective Date and which are applicable to the conduct of the Study, which may include: |
| (a) | the European Union Directive 2001/20/EEC, Directive 2005/28/EEC and implementing and/or amending legislation and guidelines; | |
| (b) | relevant laws and statutes of the UK including the Medicines Act 1968, the Medicines for Human Use (Clinical Trial) Regulations 2004, and all relevant guidance; | |
| (c) | the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) and all guidelines published or issued hereunder; and | |
| (d) | the Data Protection Legislation |
| For the avoidance of doubt, Sponsor acknowledges that hVIVO does not operate under the United States Food and Drug Administration (“FDA”) regulations. |
| 1.5 “Bed Day” | means each twenty-four (24) hour period for which a bed is reserved in hVIVO’s clinical facility for the conduct of the Clinical Phase of the Study. For example, a ten (10) day quarantine with ten (10) subjects would equal one hundred (100) Bed Days. |
| 1.6 “Change Order” | means a document, effective when signed by both Parties, detailing any agreed changes to the scope of the Study along with any associated changes to the budget, timelines, deliverables, responsibilities and payment schedule. |
| 1.7 “Change Order Request” | shall have the meaning given to it in Clause 8.1. |
| 1.8 “Clinical Phase” | means a fixed time period within the Study from the point of first subject enrolled to last subject discharged, not including any follow up period. |
| 3 |
EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT
THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.
Confidential
| 1.9 “Confidential Information” | means any and all information, data and material of any nature, including trade secrets, Technology, forecasts, analyses, evaluations, research, technical information, business information, financial information, business plans, and/or strategies, owned or controlled by either Party or its Affiliates, which either Party may receive or obtain in connection with any Study and/or this Agreement whether in writing, or in any other form. |
| 1.10 “Data Protection Legislation” | means all privacy laws applicable to any Personal Data processed under or in connection with this Agreement, including, without limitation, the Data Protection Act 2018 as amended, updated and re-enacted from time to time, the EC Directive on the protection of individuals with regard to the processing of personal data and on the free movement of such data (95/46/EC), the General Data Protection Regulation (EU) 2016/679 (GDPR) and all local laws or regulations giving effect to the Directive and Regulation (as any such legislation, directive or regulation may be amended, extended or re-enacted). |
| 1.11 “Deliverables” | means the outputs to be delivered by hVIVO, as specified in Schedule 1. |
| 1.12 “Effective Date” | means the date of the signature of the last Party to sign this Agreement. |
| 1.13 “hVIVO Property” | means (i) property, materials and Technology owned by or licensed to hVIVO or its Affiliates prior to the Effective Date (including any information relating to the hVIVO’s human challenge model, methodologies or processes) and all improvements, modifications, or enhancements thereto; (ii) virus and viral inoculum; and (iii) any property, materials or Technology resulting from any violation by Sponsor, its officers, employees, agents and contractors of the limitation on uses of samples set forth in Clause 5.8. hVIVO Property does not include any Sponsor Property. |
| 4 |
EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT
THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.
Confidential
1.14 “Intellectual Property Rights” or “IPRs” |
means patents, any extensions of the exclusivity granted in connection with patents, trade secrets, trademarks, registered designs, trade names, service marks, applications for any of the foregoing (including provisionals, continuations, continuations-in-part and divisional applications), the right to apply for any of the foregoing, domain names, copyrights, moral rights, rights in and to databases (including rights to prevent the extraction or reutilization of information from a database), design rights, topography rights, and all rights or forms of protection of a similar nature or having equivalent or the similar effect to any of them which may subsist anywhere in the world, whether or not any of them are registered. |
| 1.15 “Material Scope Reduction” | means a reduction in the required number of Study Subjects for the Clinical Phase, where such reduction is greater than or equal to ten (10) percent of the original number of Study Subjects. |
| 1.16 “Non-Drug Data” | means all data generated from the Study Subjects, excluding Study Drug Data. Non-Drug Data expressly includes any data related to the Virus, and data from Study Subjects exposed to Virus prior to dosing of such Study Subjects with Study Drug. |
| 1.17 “Non-Drug Samples” | means samples generated during the Study, with the exception of samples from Study Subjects who have been dosed with Study Drug. |
| 1.18 “Party” | means the Sponsor or hVIVO and “Parties” shall mean both of them. |
| 1.19 “Personnel” | any of the employees, sub-contractors, agents and/or other personnel of hVIVO or its Affiliates (including investigators, sub-investigators, clinical research coordinators and other personnel). This definition will include the Principal Investigator(s) where the context requires. |
| 5 |
EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT
THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.
Confidential
| 1.20 “Postponement” | means any suspension, rescheduling or material delay (greater than one week) of part or all of the Clinical Phase of the Study, except where such suspension, rescheduling or material delay is due to (i) any circumstance within the reasonable control of hVIVO; or (ii) a Sponsor Force Majeure event. |
| 1.21 “Principal Investigator” | means the individual named by hVIVO as the principal investigator and leader of that team of individuals, comprising Study Personnel. |
| 1.22 “Protocol” | the protocol detailed in Schedule 1, as may be amended from time to time in accordance with this Agreement. |
| 1.23 “Reasonable Endeavours” | means an obligation to do whatever should reasonably be done in the circumstances by a responsible and reasonably funded service provider (in the case of hVIVO) or a responsible customer receiving the Services (in the case of Sponsor) to fulfill the obligation concerned and the commitment to the other party. |
| 1.24 “Regulatory Authority” | means any government authority, body or agency designated under the laws of the relevant country which is responsible for the regulation of clinical trials and/or activities undertaken in connection with clinical trials in the relevant country. This definition shall include the European Medicines Agency or the US Food and Drug Administration or any similar authority of any jurisdiction applicable to the Study where the context requires; |
| 1.25 “Research Ethics Committee” | an independent body in the United Kingdom (or other applicable jurisdiction) whose responsibility it is to protect the rights, safety, and well-being of human subjects involved in a clinical trial. |
| 1.26 “Services” | the services to be provided by hVIVO in respect of the Study, as described in Schedule 1. |
| 1.27 “Site File” | means for the Study, the file maintained by the Principal Investigator containing the documentation specified in section 8 of ICH GCP (Good Clinical Practice) (edition CPMP/ICH/135/95) or otherwise required by Applicable Law. |
| 6 |
EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT
THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.
Confidential
| 1.28 “Sponsor Materials” | means intellectual property, property, materials and Technology owned by or licensed to Sponsor or its Affiliates prior to the Effective Date and all improvements, modifications, or enhancements thereto. “Sponsor Materials” also include materials which are to be provided to hVIVO in order to conduct the Study, including Study Drug, placebo and comparator (where applicable). |
| 1.29 “Sponsor Property” | means Sponsor Materials and Technology and all improvements, modifications, or enhancements thereto, together with Study Data, Study Samples including Study Drug Samples and Non-Drug Samples, always excluding hVIVO Property. |
| 1.30 “Standard Operating Procedures” or “SOPs” | means, in respect of the Study, the standard operating procedures, agreed to by the Parties prior to the commencement of the Study, under which the Study shall be conducted. |
| 1.31 “Reservation and Start-Up Agreement” | means the agreement entered into by the Parties relating to Sponsor’s reservation of hVIVO’s facility and the initial activities conducted by hVIVO to the Sponsor in connection with the Study. |
| 1.32 “Study” | means the specific investigation as described in the Protocol. |
| 1.33 “Study Completion” | means, for the purposes of this Agreement, completion of clinical study report. |
| 1.34 “Study Data” | means all reportable data generated from the Study Subjects, i.e., Study Drug Data and Non-Drug Data. |
| 1.35 “Study Drug” | means Ampligen®, also known as rintatolimod, the medicinal product to be used in the Study. Ampligen and rintatolimod shall have the same meaning in this Agreement. |
| 7 |
EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT
THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.
Confidential
| 1.36 “Study Drug Data” | means all data generated from the Study Subjects following dosing of such Study Subjects with Study Drug and is documented in the case report forms or is otherwise reportable to Sponsor under the terms of the Protocol and this Agreement. |
| 1.37 “Study Drug Samples” | means samples generated during the Study from Study Subjects who have been dosed with Study Drug. |
| 1.38 “Study Samples” | means all samples generated from the Study Subjects, i.e., Study Drug Samples and Non-Drug Samples. Study Samples include, at least, all nasal washes and serum samples from Study Subjects. |
| 1.39 “Study Records” | means files and documents (electronic or otherwise) which (i) individually and collectively permit evaluation of the conduct of a trial and the quality of the data produced; and (ii) detail the Services performed. |
| 1.40 “Study Site” | means the premises in which the Study will be conducted. For the avoidance of doubt, this includes the site where the Study Drug is administered to a Study Subject and, where the context requires, the quarantine facility where the Study Subjects are infected with the virus inoculum. |
| 1.41 “Study Subject” | means a person recruited to participate in the Study. |
| 1.42 “Table of Responsibilities” | means the table allocating responsibilities of both Parties in relation to the Study, as set out in Schedule 1. |
| 1.43 “Technology” | means all technical and other information which is not in the public domain (other than as a result of a breach of confidence), including information comprising or relating to concepts, discoveries, data, designs, formulae, ideas, inventions, methods, models, procedures, designs for experiments and tests and results of experimentation and testing processes, specifications and techniques, laboratory records, clinical data, minutes of meetings, status reports, clinical trial reports, manufacturing data and information contained in submissions to regulatory authorities, whether or not protected by Intellectual Property Rights. |
| 1.44 “Virus” | means hVIVO’s virus, A/Perth/16/2009 (H3N2) and human rhinovirus (HRV-16). |
| 8 |
EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT
THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.
Confidential
| 1.45 | Any reference to a statute or statutory provision is a reference to it as it is in force for the time being, taking account of any amendment, extension, or re-enactment and includes any subordinate legislation for the time being in force made under it. |
| 1.46 | The headings to clauses are inserted for convenience only and shall not affect the interpretation or construction of this Agreement. |
| 1.47 | Unless the context otherwise requires, words denoting the singular shall include the plural and vice versa and the masculine includes the feminine and vice versa. |
| 1.48 | In this Agreement, “including” means including without limitation; “includes” and “include” shall be construed accordingly. |
| 2. | COMPLIANCE |
| 2.1 | The Parties shall adhere to the prevailing industry professional and ethical standards in the conduct of the Study and shall comply with all Applicable Laws. |
| 2.2 | Sponsor and hVIVO shall comply with the Association of the British Pharmaceutical Industry guidelines that relate to compensation of Study Subjects. hVIVO shall be solely responsible for the compensation of Study Subject. A copy of the British Pharmaceutical Industry guidelines shall be provided by hVIVO to Sponsor. |
| 3. | APPROVALS |
| 3.1 | hVIVO, on behalf of the sponsor, shall apply for all approvals from each Regulatory Authority in respect of the Study and shall use its best endeavours to procure the grant of all such approvals. Unless otherwise agreed in writing by the Parties, all approvals from the Regulatory Authorities shall be applied for and issued in the name of the Sponsor. hVIVO shall keep Sponsor fully informed of the progress of any submissions made to the Regulatory Authority and provide Sponsor, as soon as reasonably practicable, copies of any correspondence between the Regulatory Authority and hVIVO in respect of such submissions. |
| 9 |
EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT
THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.
Confidential
| 3.2 | If a Regulatory Authority issues any notification to hVIVO in respect of submissions made to the Regulatory Authority in respect of the Study, hVIVO shall notify the Sponsor in sufficient time to allow the Sponsor to consider and respond to such notification. The Sponsor shall have the sole right to determine any response to any such notification from the Regulatory Authority and hVIVO shall not respond to any such notification without the prior written approval of the Sponsor. Nothing in this Clause 3.2 shall prevent hVIVO from responding to any notification from the Regulatory Authority to the extent that (i) such notification relates to hVIVO business other than the conduct of the Study; or (ii) hVIVO is obliged to do so in order to comply with any and all Applicable Laws. |
| 3.3 | Unless otherwise agreed in writing by the Parties, hVIVO shall ensure that (i) the Principal Investigator submits an application in respect of the Study to the Research Ethics Committee and (ii) if a favourable opinion is issued by the Research Ethics Committee, the Principal Investigator complies with the terms of the said opinion. In addition, hVIVO shall ensure that the Principal Investigator keeps the Parties fully informed of the progress of all Research Ethics Committee submissions and provides the Sponsor with all correspondence relating to such submissions, should the Sponsor make such a request |
| 3.4 | The Sponsor shall not supply the Study Drug to hVIVO until the Sponsor has obtained all required documentation from the Regulatory Authority and also received a favourable opinion from the Research Ethics Committee. hVIVO shall ensure that neither administration of the Study Drug to any Study Subject nor any other clinical intervention mandated by the Protocol in any Study Subject takes place until it is satisfied that the approval from the Regulatory Authority and the favourable opinion from the Research Ethics Committee have been obtained. |
| 4. | hVIVO’S OBLIGATIONS |
| 4.1 | hVIVO shall perform the Services in accordance with: |
| 4.1.1 | this Agreement; |
| 4.1.2 | the Protocol; |
| 4.1.3 | the conditions set by the Regulatory Authority and the Research Ethics Committee in respect of the Study; |
| 4.1.4 | the SOPs which will be shared with the Sponsor; and |
| 4.1.5 | Applicable Law. |
| 10 |
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Confidential
| 4.2 | hVIVO shall ensure that the Principal Investigator (i) performs all duties in accordance with this Agreement, the Protocol and all Applicable Laws; (ii) is aware of, acknowledges and agrees to the obligations applicable to the Principal Investigator as set out in this Agreement; (iii) is under an obligation to assign all Sponsor Property to Sponsor. |
| 4.3 | hVIVO shall notify the Sponsor if the Principal Investigator (i) is debarred; (ii) ceases to be employed or engaged by hVIVO for any reason; or (iii) is otherwise unavailable to continue as Principal Investigator, and shall provide a replacement investigator of appropriate experience, seniority and qualification. |
Infectivity Rate and Recruitment of Study Subjects
| 4.4 | Prior to the commencement of the Study, hVIVO shall provide Sponsor with hVIVO’s estimate of the likely infectivity rate of the virus inoculum for the Study (the “Predicted Infectivity Rate”). The Sponsor acknowledges that hVIVO may in certain circumstances be subject to confidentiality obligations in relation to viral infectivity rates that hVIVO predicted for other clinical studies. While hVIVO shall use reasonable endeavours to estimate the infectivity rate of the virus inoculum, the Sponsor acknowledges and agrees that (i) hVIVO cannot guarantee that the Predicted Infectivity Rate shall be achieved during the Study as a result of inherent, natural variations of infectivity; and (ii) Sponsor’s acceptance of, reliance on, or use of the Predicted Infectivity Rate shall be at Sponsor’s sole risk. Sponsor hereby agrees to release, waive and forever discharge any demands, claims, suits or actions against hVIVO arising out of or in connection with Sponsor’s acceptance, reliance on, or use of the Predicted Infectivity Rate. |
| 4.5 | hVIVO shall use commercially reasonable efforts to recruit and screen the number of individuals that in the sole discretion of hVIVO, taking into account the study-specific inclusion and exclusion requirements set forth in the Protocol, will be sufficient to provide the requisite number of Study Subjects. |
| 4.6 | hVIVO shall ensure that the informed consent form is approved by Sponsor before its use. |
| 4.7 | hVIVO shall, or ensure that the Principal Investigator shall, obtain the required informed consent of each of the Study Subjects participating in the Study, by way of obtaining completed informed consent forms from the aforementioned Study Subjects, in a form agreed by the Parties. |
| 4.8 | The Sponsor agrees that where, the Sponsor recommends to hVIVO that hVIVO includes one or more specific individuals in the group of volunteers to be screened for eligibility to serve as Study Subjects, and such individual(s) after undergoing screening is/are deemed not to be eligible to participate in the Study, the Sponsor shall reimburse hVIVO for any prior written Sponsor approved reasonable costs incurred by hVIVO when processing such volunteers. |
| 11 |
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THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND
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Confidential
Use of Affiliates and Third-Party Subcontractors by hVIVO
| 4.9 | hVIVO may subcontract the provision of any Services to its Affiliates or subcontractors, provided that hVIVO shall remain responsible for all acts or omissions of its Affiliates and subcontractors in connection with the performance of the Services, as if said acts or omissions were its own. hVIVO shall ensure, before engaging its Affiliates or subcontractors, that the Affiliates or subcontractors is under an obligation to assign all Sponsor Property to Sponsor. Notwithstanding the foregoing, for the avoidance of doubt, hVIVO shall not be responsible for acts or omissions of subcontractors that are selected by the Sponsor for use in provision of Services in connection with the Study. |
| 4.10 | Any failure of hVIVO to perform its obligations or any delay by hVIVO in performing its obligations shall not be considered a breach of such obligations to the extent that such failure or delay was caused by any act or omission of the Sponsor, including the Sponsor’s failure to provide, in a timely manner, documents, materials or information necessary for hVIVO to perform its obligations under this Agreement. |
| 5. | THE SPONSOR’S OBLIGATIONS |
| 5.1 | Sponsor assigns to hVIVO to fulfill all regulatory obligations unless otherwise stated in this agreement. Sponsor warrants that it will cooperate with hVIVO in taking any actions that hVIVO reasonably believes are necessary to comply with the regulatory obligations. Notwithstanding the foregoing, Sponsor hereby acknowledges and accepts that it shall remain the ultimate responsible party for the quality and integrity of all Study Data and for the Study as a whole as per Applicable Laws. The Parties acknowledge and agree that Sponsor shall at all times be deemed to be the “sponsor” of the Study pursuant to the terms of all Applicable Laws. |
| 5.2 | The Sponsor shall perform its obligations under this Agreement in accordance with: |
| 5.2.1 | this Agreement; |
| 5.2.2 | the Protocol; |
| 5.2.3 | the conditions set by the Regulatory Authority and the Research Ethics Committee in respect of the Study; |
| 5.2.4 | the SOPs; and |
| 5.2.5 | Applicable Law. |
| 5.3 | The Sponsor shall provide hVIVO, in a timely manner, all documents, data and information in the Sponsor’s possession or control that (i) are reasonably necessary for hVIVO to conduct the Study, including without limitation evidence of any approvals from any applicable Regulatory Authority; and (ii) are reasonably required by hVIVO to access, use and exploit Non-Drug Data and hVIVO Samples. |
| 12 |
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| 5.4 | The Sponsor shall provide hVIVO, free of charge, any Sponsor Materials in such quantities as are required for the Study. Title and risk in Sponsor Materials shall at all times remain with Sponsor. Sponsor, at its sole discretion, is responsible for maintaining adequate insurance to cover any loss, damage or theft of Sponsor Materials. The Sponsor shall comply with all Applicable Laws that relate to the shipment of the Sponsor Materials. |
| 5.5 | The Sponsor shall provide hVIVO with all information in its possession or control relating to known or potential hazards associated with the use of the Sponsor Materials which is reasonably required to enable hVIVO to comply with the Health and Safety at Work Act 1974 and any other Applicable Law. With respect to the Study Drug, Sponsor shall provide batch certificates and release certificates, from a suitably qualified person within the United States, certifying that the Study Drug can be used in the Study. Sponsor assigns release of the Study Drug within the UK to hVIVO. |
| 5.6 | Should Sponsor either: (i) ship, mail or have delivered, any materials or documents to hVIVO; or (ii) request that hVIVO, ship, mail or have delivered any materials or documents to Sponsor or any third party; Sponsor alone shall be responsible for such items in transit before they arrive at their destination, including any cost of insurance, risk in transit and risks associated with customs delays. |
| 5.7 | The Sponsor shall, if, as and when required by any Applicable Law: |
| 5.7.1 | submit information about the Study for listing in a free, publicly accessible clinical trial registry within twenty-one (21) days (or within such time as specified by Applicable Law at the time) of initiation of enrolment of the Study Subjects; and |
| 5.7.2 | shall publish the results of the Study on a free, publicly accessible clinical trial results database within one (1) year (or within such time period as specified by any Applicable Law at the time) of the Study Drug being approved and made commercially available in any country, or for a post-approval clinical trial, within one (1) year (or within such time period as specified by the relevant Applicable Law at the time) of completion the clinical trial. In respect of a clinical trial that is under review by peer-reviewed journals that prohibit disclosure of results pre-publication, the results will be posted at the time of publication. |
| 13 |
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| 5.8 | Sponsor shall only use Study Samples for Protocol specified analyses and re-analyses to determine and to secure Intellectual Property Rights to the effects of Study Drug on a Study Subject, as provided for in the Protocol and not for any other purpose whatsoever, including without limitation, further exploratory studies. Notwithstanding the foregoing, in no event shall Sponsor use the Study Samples to attempt to (i) reverse engineer or determine in any way the chemical or biological structure or genetic sequence of the Virus; (ii) determine the progression or characteristics of infection or disease resulting from exposure of a human, including the Study Subject, to the Virus; (iii) determine the nature of the interaction of the Virus with human tissue or fluids; or (iv) conduct research on Study Samples which is not related to the determination of the effect of Study Drug on a Study Subject. |
| 5.9 | In no event shall hVIVO use the Study Samples or Sponsor Material to attempt to (i) reverse engineer or determine in any way the chemical or biological structure of the Sponsor Material; (ii) determine the distribution and size of the Sponsor Material; or (iii) conduct research on Study Samples containing Sponsor Material, or Sponsor Material which is not specified in the protocol and which is not directly related to the determination of the effect of Study Drug on a Study Subject. |
| 5.10 | Sponsor and hVIVO acknowledge and agree that: |
| 5.10.1 | Sponsor shall, as soon as reasonably practicable, provide hVIVO with details of any third-party vendors that Sponsor wishes to engage in relation to the Study who would require access to hVIVO Property or Confidential Information. |
| 5.10.2 | hVIVO, should it have commercially reasonable grounds to do so (for example where the third party vendor is a competitor or potential competitor of hVIVO), shall have the right to object to the choice of such third-party vendors and in such an event, shall provide Sponsor with the reason(s) for said objection. |
| 5.10.3 | hVIVO shall, as soon as reasonably practicable, provide Sponsor with details of any Affiliates or Subcontractors that hVIVO wishes to engage in relation to the Study who would require access to Sponsor Property or Confidential Information. |
| 5.10.4 | Sponsor, should it have commercially reasonable grounds to do so (for example, where the Affiliates or Subcontractors is a competitor or potential competitor of Sponsor), shall have the right to object to the choice of such Affiliates or subcontractors. |
| 5.10.5 | The Parties shall enter into discussions to find an amicable way of overcoming any objection made by hVIVO to Sponsor’s choice of third party vendors or by Sponsor to hVIVO’s choice of Affiliates or Subcontractors. |
| 5.10.6 | In the event that the Parties cannot reach agreement, hVIVO or Sponsor shall have the right to terminate this Agreement at any time, upon provision of written notice to each other. |
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| 6. | INSPECTIONS |
| 6.1 | hVIVO shall permit representatives of the Sponsor who are authorized to carry out an independent examination of the Study, to visit the Study Site to observe the conduct of the Study by hVIVO or its Personnel and to examine any procedures relating to the Study. Each such audit or inspection shall be conducted upon reasonable prior notice to hVIVO and during regular business hours. Sponsor will comply with all reasonable rules and requirements of hVIVO with respect to its presence at hVIVO’s facility in connection with such audits, and all information made available to Sponsor in connection with such audit will be deemed Confidential Information of hVIVO. After the first such audit, should Sponsor request any further audits, hVIVO reserves the right to charge for the time of the hVIVO personnel involved in the additional audits, provided such audits are not “for cause”. |
| 6.2 | The Parties acknowledge that either Party may respond independently to any correspondence or inquiry from the Regulatory Authorities in which such Party or its Affiliates is named. Each Party shall promptly notify the other Party if either Party receives notice of or otherwise becomes aware of any proposed investigation, intended or actual inspection, written enquiry and/or visit to the Study Site by any Regulatory Authority in connection with the Study and forward to the other Party copies of any correspondence with any such Regulatory Authority relating to the Study. |
| 6.3 | Each Party shall keep the other Party fully informed of the progress of any inspection, investigation or examination by the Regulatory Authority and shall inform the other Party of the results of such inspection, investigation or examination, to the extent the result directly concerns or affects the past or future performance by either Party of its obligations under this Agreement. |
| 7. | INFORMATION SHARING AND PHARMACOVIGILANCE |
| 7.1 | Each Party shall promptly report to the other Party any new information arising during the Study which, in its reasonable opinion, could affect (i) the safety of any Study Subject or hVIVO Personnel and/or (ii) the Study Subjects’ consent or their willingness to continue participation in the Study. In such circumstances hVIVO shall (i) revise the informed consent forms and any other written information provided to Study Subjects and obtain Sponsor’s approval of revised documentation before its use and shall submit the same to the relevant Research Ethics Committee for approval; and/or (ii) notify the Study Subjects of such new information. |
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| 7.2 | If hVIVO reasonably believes that the Study should be discontinued on safety or ethical grounds, hVIVO shall provide Sponsor a written statement of its reasons. The Parties will discuss in good faith and attempt to resolve any issues by modification of the Protocol. In the event that such modification cannot be achieved, or hVIVO’s reasonable concerns are not addressed, hVIVO may terminate this Agreement, upon provision of written notice to Sponsor. |
| 7.3 | hVIVO shall notify the Sponsor of any suspected unexpected serious adverse reaction (“SUSAR”) arising during the Study in accordance with the procedure specified in the Protocol. |
| 7.4 | hVIVO shall promptly notify Sponsor of all serious adverse events (“SAE”), as specified in the Protocol. Following such notification, hVIVO shall provide the Sponsor with a detailed written report in relation to the SAE. Additionally, hVIVO shall report to Sponsor any adverse events and/or laboratory abnormalities as required by the Protocol. |
| 7.5 | The Sponsor, or hVIVO on the sponsor’s behalf, shall notify the Regulatory Authority and the Research Ethics Committee of any SUSAR which occurs during the Study and is fatal or life-threatening within seven (7) days of being notified by hVIVO or the Principal Investigator and any SUSAR which is not fatal or life-threatening within fifteen (15) days of being notified by hVIVO or the Principal Investigator, unless a shorter period is required by any Applicable Law, in which case the time required by any Applicable Law will apply. |
| 7.6 | hVIVO shall promptly notify the Sponsor of any serious breach of the Protocol or good clinical practice (including ICH GCP). For the purposes of this provision, a serious breach is a breach which is likely to effect to a significant degree: (i) the safety or physical or mental integrity of the Study Subjects; or (ii) the scientific value of the Study. The Sponsor shall notify the Regulatory Authority of the serious breach as soon as it becomes aware of it and in any event no later than seven (7) days after receiving notification of the serious breach. |
| 7.7 | Either Party shall promptly advise the other Party of adverse reactions or side-effects related to the Study Drug which may become known to either Party during the course of the Study. |
| 7.8 | The Sponsor shall inform hVIVO and the Principal Investigator of the name and telephone number of the person who will be available as the Sponsor’s point of contact. The Sponsor shall also provide hVIVO and Principal Investigator with an emergency telephone number to enable SUSAR event reporting at any time. |
| 8. | CHANGES TO STUDIES |
| 8.1 | Either Party may request changes to the Protocol or changes to this Agreement, each a “Change Order Request”. |
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| 8.2 | When a Change Order Request is made by either Party, hVIVO shall, as soon as is reasonably practicable, provide Sponsor with details of the impact which the proposed amendment will have on the Study including impact on costs and/or timelines. The Parties shall negotiate in good faith thereafter to agree the Change Order. |
| 8.3 | hVIVO shall not be obligated to provide Services modified by a Change Order Request until a Change Order is fully executed. In the event that any Change Order Request which materially affects hVIVO’s ability to perform the ongoing Services is not agreed within thirty (30) days of the Change Order Request being made, hVIVO reserves the right to suspend performance of any portion of the affected Services. Notwithstanding the foregoing, hVIVO, at its sole discretion, may agree to continue with the amended Services pending Change Order execution, provided Sponsor provides email approval of the additional services and commitment to pay the associated costs. Sponsor acknowledges and agrees that any such email provided by Sponsor’s personnel will be legally binding on Sponsor. |
| 9. | COMPLETION OF THE STUDY |
| 9.1 | At Study Completion: |
| 9.1.1 | The responsible Party (as defined in Schedule 1) shall notify the Regulatory Authority and Research Ethics Committee in respect of the completion of the Study, as required by Applicable Law and the Protocol. |
| 9.1.2 | hVIVO is responsible for the study database, and hVIVO shall provide to Sponsor copies of the Drug and Non-Drug Data. |
| 9.1.3 | hVIVO shall, at the Sponsor’s behest, ensure that any unused or partially used Study Drug in the control or possession of hVIVO, its Affiliates and subcontractors and/or any Personnel is either returned to the Sponsor or destroyed in accordance with the Protocol. Sponsor shall bear the costs of any such return or destruction. |
| 9.1.4 | Each Party shall promptly destroy or deliver to the other Party any non-electronic forms of Confidential Information of the other Party that it is holding, except that each Party shall be entitled to retain one (1) copy of the other Party’s Confidential Information to the extent necessary for the Party to comply with its legal obligations. | |
| 9.1.5 | hVIVO will store Study Samples for a period of three (3) months following final laboratory data upload being the date on which the final laboratory data transfer occurs. |
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| 9.1.5.1 | Study Drug Samples. Prior to the conclusion of the three (3) month period, hVIVO shall contact Sponsor for instructions as to whether (i) to destroy the Study Drug Samples, (ii) ship them to Sponsor, or (iii) extend the period of storage, in each case at Sponsor’s cost. In the event that Sponsor fails to respond within 30 days, hVIVO shall ship the Study Drug Samples to Sponsor and notify by providing shipping details (including Courier and tracking numbers) to AIM no later than at time of shipment and invoice Sponsor for the cost of shipment. In case Sponsor chooses to extend the period of storage, the parties will enter a separate agreement to that effect. |
| 9.1.5.2 | Non-Drug Samples. At the conclusion of the three (3) month period, hVIVO shall ship the Non-Drug Samples to Sponsor and invoice Sponsor for the cost of shipment. In case Sponsor chooses to extend the period of storage, the parties will enter a separate agreement to that effect. |
| 9.1.6 | hVIVO shall send Sponsor a copy of the Study Records and also retain Study Records for a period of five (5) years from the date of completion of the Study. At the conclusion of the five (5) year period, hVIVO shall notify Sponsor. Should Sponsor require continued archiving, Sponsor shall notify hVIVO and the Parties will enter into a separate Archiving Contract, detailing the responsibilities of each Party and the fees payable by Sponsor. In the absence of such notification, hVIVO may at its sole discretion destroy the Study Records, provided however that hVIVO has provided thirty (30) days notice to the Sponsor of its intent to destroy the Study Records. On written request by the Sponsor, the Study Records will be destroyed, at the Sponsor’s cost, provided that the destruction of such Study Records is consistent with the archive and data storage requirements under the Applicable Laws. |
| 10. | PAYMENTS |
| 10.1 | In consideration of hVIVO providing the Services, the Sponsor shall pay hVIVO the sums set out in the budget, in accordance with the invoicing schedule (both attached in Schedule 2). |
| 10.2 | In order to ensure the health and safety of the participating Study Subjects, the Sponsor agrees to pay the cost of any emergency and/or acute medical care, treatment, consultation, tests, and procedures (together “Emergency Care”) incurred by or in connection with Study Subjects that may become necessary during the conduct of the Study. The Sponsor recognises that although hVIVO and/or the Principal Investigator shall make every effort to notify the Sponsor before incurring costs in relation to such Emergency Care, it may not always be possible for hVIVO to provide such advance notice to the Sponsor. Where in the reasonable opinion of hVIVO and/or the Principal Investigator, one (1) or more Study Subjects require additional medical care, treatment, consultation, tests and procedures on a non-emergency basis (“Non-Emergency Care”), hVIVO shall notify the Sponsor in advance. The Sponsor shall only reimburse hVIVO for any Non-Emergency Care for which it has provided hVIVO with prior written approval, or which is to be provided to Study Subjects under the terms of the Protocol and/or any informed consent form. hVIVO will submit invoices relating to the Emergency Care and Non-Emergency Care, including any third-party invoices, to the Sponsor which the Sponsor shall pay in accordance with the provisions of this Clause 10. |
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| 10.3 | All sums stated in this Agreement are stated exclusive of any value added tax (VAT) or any other sales tax or duties where applicable. hVIVO shall present the Sponsor with a VAT invoice for all such VAT payments which shall be paid by the Sponsor to hVIVO in addition to the charges specified under this Agreement. Before execution of this Agreement, hVIVO shall provide the Sponsor with a good faith estimate of any value added tax (VAT) that may occur under this Agreement. |
| 10.4 | The Sponsor shall pay hVIVO within thirty (30) days of the date of an invoice. If payment is not made within the thirty (30) day period hVIVO reserves the right to (i) charge interest on a daily basis on the amount outstanding at the expiry of the thirty (30) day period at a rate that is the higher of the interest rate of the Bank of England Base Rate plus 5% and the statutory interest for late payments as specified in the Late Payment of Commercial Debts (Interest) Act (1998); and/or (ii) suspend performance of the Services until such time as the outstanding amount is paid in full. |
| 10.5 | Payment shall be made in British pounds sterling by BACS payable to hVIVO Services Ltd or directly to the following bank account (or the bank account specified by the in writing from time to time): |
[***]
| 10.6 | If any deductions or withholdings in respect of duties, taxes, taxation or charges otherwise of a taxation nature are required to be made under any Applicable Law in relation to sums payable to hVIVO under this Agreement, hVIVO will include said taxes in invoices to Sponsor and Sponsor shall be responsible for and promptly pay said taxes to hVIVO or the appropriate taxing authority without any deduction to any amount or fees owed by Sponsor to hVIVO. |
| 11. | INTELLECTUAL PROPERTY |
| 11.1 | The Sponsor grants to hVIVO and its Affiliates, between the Effective Date and the Termination of this Agreement, a worldwide, non-exclusive, royalty-free license to use the Sponsor Property relevant to the Study solely for the purpose of conducting the Study and fulfilling its obligations in respect of the Study as specified in this Agreement. |
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| 11.2 | hVIVO acknowledges and agrees that the Sponsor shall own all right, title and interest in all Sponsor Property which includes all Study Drug and Non-Study Drug data generated from this study (including all related Intellectual Property Rights and including Intellectual Property Rights, to the extent related to the Study Drug, that is developed or invented during this Study). hVIVO, including its Affiliates and subcontractors, assign, and agree to assign, all of their rights, title and interest in Sponsor Property to Sponsor. hVIVO agrees not to use any Affiliates, Personnel or Subcontractors who is not under an obligation to assign all Sponsor Property to Sponsor. hVIVO, including its Affiliates agree that any materials, compositions, medicaments, methods including methods of treatment, and processes involving the use of Study Drug belongs to Sponsor. |
| 11.3 | If requested by Sponsor, hVIVO will assist Sponsor, at a pre-approved Sponsor’s cost, in applying for Intellectual Property Rights related to Sponsor Property. Such assistance may include, for example, signing assignments and declarations for filing in various countries and during prosecution. |
| 11.4 | Sponsor grants hVIVO, a worldwide, non-exclusive, irrevocable, fully paid up, royalty-free license to use the Non-Drug Data solely (i) to the extent necessary for hVIVO to understand, develop and analyze its Human Challenge Model(s), and (ii) for the purpose of documenting the safety and efficacy of the virus, including but not limited to the ethical and regulatory virus dossier package; any such use subject always to the terms of the Informed Consent. hVIVO agrees that any Intellectual Property Rights comprising Sponsor Property or the use of Sponsor Property belongs to Sponsor. |
| 11.5 | Sponsor grants hVIVO, a worldwide, non-exclusive, fully paid up, royalty-free license to use the Study Drug Data solely to the extent necessary for hVIVO to understand, develop and analyze its Human Challenge Model(s), any such use subject always to the terms of the Informed Consent. hVIVO agrees that any Intellectual Property Rights comprising Sponsor Property or the use of Sponsor Property belongs to Sponsor. |
| 11.6 | Sponsor acknowledges and agrees that hVIVO shall own all right, title and interest in all hVIVO Property (including any and all related Intellectual Property Rights) except for Sponsor Materials. Nothing contained in this Agreement shall be interpreted to grant Sponsor any title, interest, license or other rights to or in the Virus. Nothing contained in this Agreement shall be interpreted to grant hVIVO any title, interest, license or other rights to or in Sponsor Material including, at least, Ampligen; double stranded RNA; therapeutic double stranded RNA; compositions comprising the same (Ampligen, double stranded RNA; therapeutic double stranded RNA); medicaments comprising the same; treatments comprising the same; methods comprising the same; or methods of manufacturing the same. |
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| 12. | DATA PROTECTION AND CONFIDENTIALITY |
Data Protection
| 12.1 | Both parties will comply with the Data Protection Legislation (as defined in Schedule 4). This Clause 12 and the requirements in Schedule 4 are in addition to and do not relieve, remove or replace a party’s obligations under the Data Protection Legislation. |
| 12.2 | The parties acknowledge and agree that, notwithstanding any other provision contained in this Agreement, they are Joint Controllers with respect to any personal data collected or otherwise obtained in connection with the Study. |
| 12.3 | The Parties shall comply with the data processing requirements in Schedule 4 which defines the principles and procedures that the parties shall adhere to. |
| 12.4 | The Parties shall adhere to the principle of medical confidentiality in relation to Study Subjects. hVIVO shall not disclose Study Subjects Personal data (as defined in the Data Protection Legislation) to the Sponsor except where permitted by Applicable Law and where strictly necessary, for example where required to satisfy the requirements of the Protocol for the purpose of monitoring or adverse event reporting, or in relation to a claim or proceeding brought by a Study Subject in connection with the Study. Neither Party shall disclose the identity of Study Subjects to third parties without prior written consent of the Study Subject, except in accordance with any Applicable Law, or in relation to a claim or proceeding brought by the Study Subject in connection with the Study. |
| 12.5 | Without prejudice to Section 6.1 of Schedule 4, hVIVO shall act as the primary contact for the Study Subjects as outlined in the Informed Consent Form. |
| 12.6 | hVIVO shall ensure that all Study Data transferred to Sponsor or its designee or any third party pursuant to this Agreement is pseudonymised and sent to Sponsor or its designee or any third party without any additional information that would enable it to be re-identified by the recipient(s). |
| 12.7 | If a Data Protection Representative is required for the Study, the Parties shall enter a separate agreement pertaining to the appointment of such Data Protection Representative on Sponsor’s behalf. |
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Confidential Information
| 12.8 | The Parties shall ensure that only those of their Personnel directly concerned with carrying out each Party’s obligations under this Agreement shall have access to the Confidential Information of the other Party. Each Party undertakes to treat as strictly confidential and not to disclose to any third party any Confidential Information of the other Party, save where disclosure is required by a Regulatory Authority or by law or allowed under this Agreement. The Party required to make a disclosure required by a Regulatory Authority or by law shall inform the other within a reasonable time prior to being required to make the disclosure, of the requirement to disclose and the information required to be disclosed. Each Party undertakes not to make use of any Confidential Information of the other Party, other than in accordance with performance of obligations under this Agreement, without the prior written consent of the other Party. |
| 12.9 | The obligations of confidentiality set out in Clause 12.7 shall not apply to Confidential Information of a disclosing Party which is: (i) published or becomes generally available to the public other than as a result of a breach of the undertakings hereunder by the receiving Party; (ii) prior to its receipt, in the possession of the receiving Party without any obligations of confidentiality or restrictions on its use as evidenced by contemporaneous written evidence; (iii) independently developed by or on behalf of the receiving Party by individuals that do not have any knowledge of the information and/or materials of the Party disclosing the Confidential Information; or (iv) obtained by the receiving Party from a third party not subject to a duty of confidentiality to the Party that owns the Confidential Information. |
| 12.10 | Where the Sponsor visits or inspects the facilities of hVIVO (including the Study Site) in accordance with the provisions of Clause 6, the Sponsor shall treat any information of hVIVO that comes to its knowledge during such visit or inspection as the Confidential Information of hVIVO subject to the provisions of this Clause 12. |
| 12.11 | It is acknowledged and agreed between the Parties that the hVIVO Property, and particularly any information relating to the viral challenge model, other models, methodologies or processes of hVIVO comprises business critical and commercially sensitive information of hVIVO and that no disclosure of such information may be made by Sponsor without the prior written consent of hVIVO. Any unauthorised disclosure may result in hVIVO protecting its rights by obtaining an injunction and/or claiming damages. |
| 12.12 | The provisions of this Clause 12 shall apply to any Confidential Information disclosed by either Party under the Reservation and Start-Up Agreement. |
| 12.13 | This Clause 12 shall survive termination or expiry of this Agreement. |
| 13. | PUBLICATIONS AND PUBLICITY |
| 13.1 | Each Party shall be permitted to present at conferences, symposia and professional meetings, and to publish in journals, theses or dissertations, or otherwise of their own choosing, in relation to the Study (each, a “Publication”). |
| 13.2 | Sponsor shall note the participation of the Principal Investigator and/or other representatives of hVIVO in all Sponsor Publications by acknowledgement or co-authorship, as appropriate. |
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| 13.3 | hVIVO shall note the participation of the AIM representatives who have contributed to the study design and protocol development and/or review in all hVIVO Publications by acknowledgement or co-authorship, as appropriate. |
| 13.4 | Each Party shall submit a Publication to the other Party for review and comment at least sixty (60) days (or the time limit specified in the Protocol if longer) prior to publication. |
| 13.5 | Each Party agrees that all reasonable comments made by the other Party in relation to possible compromise of Confidential Information and/or IPRs will be addressed and incorporated prior to publication. This Clause 13 does not limit in any way the obligations of either Party with respect to the Confidential Information of the other Party. |
| 13.6 | Either Party shall be entitled to make a reasoned request that a Publication be delayed for a period of up to six (6) months from the date of first submission in order to enable the Party to take steps to protect its Intellectual Property Rights. A Party shall not unreasonably withhold or delay its consent to a further request for an exceptional additional delay if the Party requesting the delay has reasonable grounds to believe its Intellectual Property Rights might otherwise be compromised or lost. |
| 13.7 | Once a Party has produced a publication in accordance with the process described above, any subsequent publication which includes materially the same data and/or information shall not require further review or consent by the other Party. |
| 13.8 | For the avoidance of doubt, hVIVO shall not require the Sponsor’s consent nor shall the above requirements apply to any publication of hVIVO Property or anonymized Non-Drug Data in so far as such publication does not include any reference to the Sponsor, any Study identifier, or any Property or other Confidential Information of the Sponsor, other than the anonymized Non-Drug Data. |
| 13.9 | Neither Party may use the other Party’s name in any form of advertising, promotion or publicity, including press releases, without the prior written consent of the other Party. This term does not restrict a Party’s ability to use the other Party’s name in filings with the Securities and Exchange Commission, FDA, MHRA or other governmental agencies, when required to do so. |
| 13.10 | Each Party agrees that it will not disclose the terms of this Agreement to any third party without the written consent of the other Party, which shall not unreasonably be withheld taking into account all relevant circumstances and the legitimate interests of both parties, provided that nothing in this Agreement shall prevent either Party from disclosing the terms of this Agreement to any Regulatory Authority (for any purpose connected to the Study or the Study Drug) or as required to comply with any Applicable Laws or any order of any court of competent jurisdiction. |
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| 14. | WARRANTIES |
| 14.1 | Each Party warrants to the other that: (i) it has the full power and right to enter into this Agreement; and (ii) it does not have any prior or ongoing obligations and/or commitments to a third party that might interfere and/or conflict with the performance of the Study or that Party’s obligations under this Agreement. |
| 14.2 | hVIVO warrants that, any employees of hVIVO involved in the Study (including the Principal Investigator) will have the expertise relevant to the Study and will have the training, licenses, approvals or certifications necessary for conducting the Study and hVIVO shall ensure that all such training, licenses, approvals and/or certifications are properly maintained throughout the Study. |
| 14.3 | hVIVO warrants that to the best of its knowledge the individuals employed by hVIVO or with whom hVIVO has contracted to participate in the performance of the Services have not been debarred or suspended from providing, and otherwise have all necessary registrations to provide, the Services (or the relevant part thereof that they are engaged to provide) under any Applicable Law. |
| 15. | INDEMNITY AND LIABILITY |
Indemnity to hVIVO
| 15.1 | The Sponsor shall indemnify, defend and hold harmless hVIVO, its Affiliates and subcontractors, and their Personnel, directors and officers (each, a “hVIVO Indemnified Party”) against any and all losses, damages, penalties, expenses and/or costs (including reasonable legal and expert costs, expenses and any settlements or ex gratia payments) (collectively “Losses”) resulting or arising from or otherwise incurred by hVIVO Indemnified Party, in connection with: (i) any actions, litigation, claims and/or proceedings made or brought by a third party (including by or on behalf of Study Subjects or their dependents) (collectively “Third Party Claims”); or (ii) any regulatory investigation brought by the Regulatory Agency, in each case arising out of or in relation to the conduct of the Study and/or the performance of hVIVO of its obligations under this Agreement. |
| 15.2 | The indemnity provided by the Sponsor under Clause 15.1 shall not apply to the extent that the Loss is caused by the: |
| 15.2.1 | grossly negligent act or omission of, or breach of statutory duty, by a hVIVO Indemnified Party; or |
| 15.2.2 | failure of hVIVO to conduct the Study, in accordance with the Protocol. |
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Indemnity to the Sponsor
| 15.3 | hVIVO shall indemnify, defend and hold harmless the Sponsor, its Affiliates, and their employees, directors and officers (each, a “Sponsor Indemnified Party”) against Losses resulting or arising from or otherwise incurred by the Sponsor Indemnified Party, in connection with any Third Party Claims arising out of or in relation to the willful misconduct or gross negligence of hVIVO in the performance of its obligations under this Agreement or the conduct of any Study. |
| 15.4 | The indemnity provided by hVIVO under Clause 15.3 shall not apply to the extent that the Loss is caused by the: |
| 15.4.1 | grossly negligent act or omission of, breach of statutory duty, or willful misconduct by a Sponsor Indemnified Party; or |
| 15.4.2 | failure of a Sponsor Indemnified Party to conduct the Study in accordance with the Protocol. |
| 15.5 | Each Party shall indemnify, hold harmless and defend the other Party against any and all claims, demands, actions, awards, judgments, settlements, costs, expenses, liabilities, damages and losses arising from indemnifying party’s failure to comply with the Data Protection Legislation. |
Indemnification Procedure
| 15.6 | A Person seeking recovery under this Clause 15 (the “Indemnified Party”) in respect of a Claim shall give prompt notice of such Third Party Claim to the Party from which indemnification is sought (the “Indemnifying Party”) and, provided that the Indemnifying Party is not contesting its obligation under this Clause 15, shall permit the Indemnifying Party to control any litigation relating to such Third Party Claim and the disposition of such Third Party Claim; provided that the Indemnifying Party shall (a) act reasonably and in good faith with respect to all matters relating to the settlement or disposition of such Third Party Claim as the settlement or disposition relates to such Indemnified Party and (b) not settle or otherwise resolve such claim without the prior written consent of such Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed taking into account all relevant circumstances and the legitimate interests of both parties). Each Indemnified Party shall cooperate with the Indemnifying Party in its defense of any such Third Party Claim in all reasonable respects and shall have the right to be present in person or through counsel at all legal proceedings with respect to such Third Party Claim. |
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Limitation of Liability
| 15.7 | Nothing in this Agreement is intended to restrict or exclude the liability of any Party in relation to death or personal injury caused by the gross negligence of that Party or its Personnel or to restrict or exclude any other liability of either Party which cannot be so restricted or excluded in law. |
| 15.8 | In no circumstances shall hVIVO have any liability to Sponsor, howsoever arising and in each case whether direct or indirect for any: |
| (i) | loss of bargain, revenue, profit or anticipated savings. |
| (ii) | loss of production or use. |
| (iii) | loss of business or business opportunity. |
| (iv) | loss of goodwill or reputation. |
| (v) | loss or waste of staff and/or management time. |
| (vi) | replacement or replacement cost of Sponsor Materials. |
| (vii) | action, inaction, error or omission of any third-party delivery services or carriers. |
| (viii) | special, indirect or consequential loss or damage of any nature. |
| 15.9 | Subject to Clause 15.6 and without prejudice to the limitation of liability set out in Clause 15.7, in no event shall the aggregate liability of hVIVO (including its liability under the indemnity in Clause 15.3) exceed the amount of fees payable by the Sponsor to hVIVO in respect of the Study. |
Insurance
| 15.10 | Each Party shall maintain during the term of this Agreement adequate insurance consistent with industry practice and if applicable with all legal or regulatory obligations as may be required to fulfill its obligations under this Agreement and insure its foreseeable risks related to this Agreement. This will include but not be limited to the specific requirements detailed hereinafter. |
| 15.11 | hVIVO shall maintain professional liability insurance in respect of its liability under the Study in relation to acts or omission of hVIVO, its employees and the Principal Investigator, of a value not less than the sum of £[***] GBP. At the Sponsor's request, hVIVO will provide a copy of such insurance coverage to the Sponsor. |
| 15.12 | The Sponsor will take out clinical trial insurance sufficient to cover any claims arising under the Study and such cover shall be of a value not less than £[***] GBP in respect of any one occurrence or series of occurrences arising from one event, and shall name hVIVO as an additional insured party. The Sponsor shall provide hVIVO with copies of insurance certificates together with a written statement that the policies to which they refer (i) remain in full force and effect, (ii) provide adequate cover for the intended Study and (iii) do not exclude any of the anticipated Study Subjects. On request, Sponsor will provide copies of the full insurance policies for hVIVO to review, in order for hVIVO to fulfill its expected regulatory due diligence. The terms of any insurance or the amount of cover shall not relieve the Sponsor of any liabilities under this Agreement. |
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| 16. | TERM AND TERMINATION |
| 16.1 | This Agreement shall commence on the Effective Date and, unless earlier terminated in accordance with provisions of this Agreement, will terminate six (6) months after Study Completion. |
| 16.2 | Either Party may terminate this Agreement without cause at any time during the term of the Agreement on provision of sixty (60) day’s written notice to the other Party. |
| 16.3 | Either Party may terminate this Agreement upon provision of written notice: |
| 16.3.1 | if the other Party commits a material breach of this Agreement, and where such breach is capable of remedy, fails to remedy such breach within twenty-eight (28) days of receiving notice in writing to do so. |
| 16.3.2 | if the other Party is declared insolvent or has an administrator or receiver appointed over all or any part of its assets or ceases or threatens to cease to carry on its business; |
| 16.3.3 | pursuant to the provisions of Clause 18.7 (Force Majeure); or |
| 16.3.4 | if a Regulatory Authority directs that the Study be terminated or revokes or cancels any approval required to conduct the Study. |
| 16.3.5 | if the Parties fail to reach agreement in relation to a Change Order submitted by either Party in accordance with the provisions of Clause 8. |
| 16.4 | hVIVO may terminate this Agreement subject to the provisions of Clause 5.10, or Clause 7.2 herein. |
| 17. | CONSEQUENCES OF TERMINATION |
| 17.1 | Upon termination of this Agreement by either Party for any reason, the relevant post-completion obligations of the Parties set out in Clause 9.1 shall apply. |
| 17.2 | Upon termination of this Agreement by either Party for any reason other than termination pursuant to Clause 16.3.1 or 16.3.2: |
| 17.2.1 | the Parties shall promptly discuss a close-out schedule in relation to the Study and hVIVO shall cease performing any work that is not necessary for the orderly close-out of the Study or not required by the Applicable Law; |
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| 17.2.2 | Sponsor shall pay hVIVO: |
| (i) | all fees, costs and expenses incurred up to the date of termination. |
| (ii) | all third party costs and/or expenses and all out of pocket costs, charges and/or expenses incurred by hVIVO as a result of termination. |
| (iii) | hVIVO’s reasonable out of pocket costs incurred for the purposes of completing activities set out in the close-out schedule referred to in Clause 17.2.1, including those that are in connection with the fulfillment of any legal or regulatory requirements relating to such close-out activities. |
| (iv) | all expenditure falling due for payment after the date of termination which arises from commitments reasonably and necessarily incurred by hVIVO for the performance of the Study prior to the date of termination. |
| (v) | a cancellation charge equating to any unused Bed Day fees. |
hVIVO will prepare an invoice detailing the total amount due minus any payments already made by Sponsor. Sponsor will pay said invoice within thirty (30) days of receipt. In the event that the amount already paid by Sponsor exceeds the total amount due, hVIVO shall issue a credit note and refund the overpayment within 30 days of issue of credit note.
| 17.3 | If following termination or expiry of this Agreement, hVIVO has ongoing obligations under this Agreement and the cost of performing those obligations increases as a result of changes in the Applicable Laws, hVIVO shall notify the Sponsor of such increases and the Sponsor shall reimburse hVIVO for such additional costs on reasonable commercial terms. |
| 17.4 | Expiry or termination of this Agreement shall be without prejudice to any rights or remedies that Parties may have in law or equity in relation to the expired or terminated Agreement. |
| 17.5 | Clauses 1, 2.2, 3.2, 4.4, 4.9, 5.1, 5.3, 5.6, 6.2, 6.3, 7.7, 9, 10.2 to 10.6, 11, 12, 13, 15, 17 and 18 shall continue in full force and effect on termination or expiry of this Agreement. |
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| 18. | GENERAL |
No Agency
| 18.1 | The Parties are independent contractors and nothing in this Agreement will create or imply any agency relationship between the Parties, nor will the Agreement be deemed to constitute a joint venture or partnership between the Parties. Neither Party will have authority to bind the other in any manner whatsoever. |
Agreement
| 18.2 | This Agreement constitutes the entire agreement and understanding of the Parties relating to the Study and supersedes any other prior agreement or understanding between the Parties. |
| 18.3 | The Parties acknowledge that by entering into this Agreement they do not rely on any statement, representation, warranty, course of dealing, custom or understanding except for those expressly set out in this Agreement. |
| 18.4 | The Parties irrevocably and unconditionally waive any rights and/or remedies they may have to the fullest extent permitted by law (including the right to claim damages and/or to rescind this Agreement) in respect of any misrepresentation other than a misrepresentation which is expressly set out in this Agreement or a misrepresentation which was made fraudulently. |
| 18.5 | Except as expressly set forth in this Agreement, neither Party grants to the other by implication, estoppel or otherwise, any right, title, license or interest in any Intellectual Property Right owned by either Party. |
| 18.6 | No change shall be made to this Agreement except in writing and signed by the duly authorised representatives of both Parties. |
Force Majeure
| 18.7 | Neither Party shall be liable to the other Party or shall be in default of its obligations hereunder if such default is the result of war, hostilities, terrorist activity, revolution, civil commotion, strike (other than that of the Party’s workforce), epidemic, accident, fire, wind, flood or because of any act of God or other similar cause beyond the reasonable control of the Party affected and which by the exercise of reasonable diligence, said party is unable to foresee, prevent or provide against. The Party affected by such circumstances shall promptly notify the other Party in writing when such circumstances cause a delay or failure in performance (a “Delay”) and also when they cease to do so. In the event of a Delay lasting for four (4) weeks or more the non-affected Party shall have the right to terminate this Agreement immediately by giving notice in writing to the other Party. |
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Inconsistency
| 18.8 | To the extent that there are any inconsistencies between the provisions of the Protocol and the provisions of this Agreement: |
| (i) | the provisions of Protocol shall prevail in matters of medicine, subject safety and conduct of the clinical trial, to the extent that the relevant provisions of the Protocol are in accordance with all Applicable Laws. |
| (ii) | this Agreement takes precedence in other conflicts, in particular any conflicts with respect to general legal terms and conditions and specifically Intellectual Property and ownership rights. |
Assignment
| 18.9 | Neither Party may assign its rights or obligations under this Agreement or any part thereof without the prior written consent of the other Party, such consent not to be unreasonably withheld or delayed taking into account all relevant circumstances and the legitimate interests of both parties, except that either Party may assign this Agreement and the rights, obligations and interests of such Party, (i) in whole or in part, to any of its Affiliates, or (ii) in whole, but not in part, to any purchaser of all of its assets or all of its assets to which this Agreement relates or shares representing a majority of its common stock voting rights or to any successor corporation resulting from any merger, consolidation, share exchange or other similar transaction. |
Further Assurance
| 18.10 | Each Party shall, as and when requested by the other Party and at the cost of the requesting Party, perform all acts and execute all documents as may be reasonably necessary to give effect to the provisions of this Agreement. |
Notices
| 18.11 | Notice hereunder must be in writing and given to the other Party by hand delivery; by first class mail, postage prepaid; by air courier or by overnight courier to the postal address set forth above or to such other address as either Party may designate. Notices shall be deemed to have been received when (a) if delivered by hand, on the date of delivery if delivered by hand prior to 5:00 pm on a business day, otherwise on the next business day following the date of delivery; (b) if sent by first class mail or air courier, three (3) business days after deposit in the mail (excluding the day of posting); or (c) if sent by overnight courier, the next business day. For purposes of this Agreement, “business days” means each Monday through Friday except for such days deemed to be a legal holiday in the United Kingdom. |
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Severability
| 18.12 | If any provision of the Agreement is held to be invalid, void or unenforceable, then the remaining provisions of this Agreement shall continue in full force and effect. The judicial or other competent authority making such determination shall have the power to limit, construe or reduce the duration, scope, activity and/or area of such provision, and/or delete specific words or phrases as necessary to render, such provision enforceable. |
Waiver
| 18.13 | No failure or delay by either Party in exercising any right or remedy conferred on such Party by this Agreement shall operate as a waiver of such right or remedy, nor shall any single or partial exercise of any such right nor any single failure to do so, preclude any other or future exercise of it, or the exercise of any other right under this Agreement. |
| 18.14 | No printed standard terms appearing on any purchase order, invoice, or other documentation relating to Services shall be effective in adding to or changing the terms of this Agreement. |
Governing Law, Dispute Resolution and Jurisdiction
| 18.15 | In the event of a dispute arising under this Agreement, authorised representatives of the Parties will discuss and meet as appropriate to try to resolve the dispute within twenty-one (21) days of being requested in writing by any Party to do so. If the dispute remains unresolved, it will then be referred to a senior manager from each of the Parties who will use reasonable endeavours to resolve the dispute within a further fourteen (14) days. |
| 18.16 | If the dispute remains unresolved at the conclusion of the process described in Clause 18.15, then the parties may (but for the avoidance of doubt are not obligated to) refer such matter for settlement by arbitration administered by the International Chamber of Commerce (“ICC”) under its International Rules of Arbitration, and judgment on the award rendered by the arbitrator shall be binding and may be entered in any court having jurisdiction thereof. Such arbitration shall be conducted in English by one arbitrator mutually acceptable to the parties selected in accordance with ICC Rules. |
| 18.17 | The laws of England and Wales shall govern the interpretation, construction and validity of this Agreement and the Parties hereby submit to the exclusive jurisdiction of the courts of London, England. |
Non-Solicitation
| 18.18 | Neither Party may, during the term of this Agreement and for one (1) year thereafter, approach, induce with offers of employment or engage as a contractor, subcontractor, employer, joint venturer or otherwise, whether directly or indirectly, any of the employees of the other Party that it may come into contact with in performing its duties under this Agreement or a Work Order, without first obtaining the prior written agreement of the other Party. |
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Third Party Rights
| 18.19 | The Contracts (Rights of Third Parties) Act 1999 and any legislation amending or replacing this Act shall not apply in relation to this Agreement and nothing in this Agreement shall confer on any third party the right to enforce any provision of this Agreement. |
Counterparts
| 18.20 | This Agreement shall not be effective until signed by a duly authorized representative of each Party. This Agreement may be executed and delivered electronically in Portable Document Format (PDF) and/or in any number of counterparts, each of which when executed and delivered shall constitute an original of this Agreement, but all the counterparts shall together constitute the same agreement. If this Agreement is executed in counterparts, it shall not be effective unless and until each Party has executed a counterpart. |
IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of the Effective Date.
| hVIVO Services Ltd | AIM ImmunoTech Inc. |
| Signature | /s/ Dori Kadmon | Signature | /s/ Thomas K Equels | |
| Name | Dori Kadmon | Name | Thomas K. Equels | |
| Title | Head of Legal | Title | Chief Executive Officer | |
| Date | September 24, 2021 | Date | September 27, 2021 |
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SCHEDULE 1
DELIVERABLES, PROTOCOL, ASSUMPTIONS AND RESPONSIBILITIES
| 1. | DELIVERABLES |
As a result of performing the Services, the deliverables to be provided by hVIVO under this Agreement are as follows, subject to the assumptions detailed in Section 3 below:
| 1) | Final agreed protocol |
| 2) | Ethics submission package |
| 3) | 64 subjects inoculated |
| 4) | A quality controlled data set with all queries resolved |
| 5) | Clinical Study Report |
| 2. | PROTOCOL |
Incorporated by reference.
| Protocol Title | A Phase 2a, Randomised, Double-blind, Placebo-controlled Study to Evaluate the Prophylactic Efficacy, Safety, and Tolerability of Ampligen® in Healthy Adult Participants Subsequently Challenged with Either Influenza A/Perth/16/2009 (H3N2) Virus or Human Rhinovirus-16 (HRV-16) | |
| Protocol Number | AMP-COV-101 | |
| Version | 1.0 | |
| Date | 27 Aug 2021 |
| 3. | ASSUMPTIONS |
| Screening Assumptions | ||
| Anticipated Serosuitability rate* | [***]% | |
| Start of V2 Screening | October 2021 | |
| Estimated No. of Screening visits | 200 | |
| Quarantine Phase Assumptions | ||
Start of Challenge Phase (date from which subjects may be admitted) |
November 2021 | |
| Duration of Challenge Phase | 2 months | |
| Number of Subjects in Challenge Phase | 64 | |
| Subject Participation Fee (Challenge Phase) | £[***] | |
| Project Management Assumptions | ||
| Number of Sponsor/hVIVO Face to Face Project Meetings | NA | |
| Frequency of Sponsor/hVIVO Conference Calls | 1 per week | |
| Data Assumptions | ||
| No of Data Transfers | 1 |
*Sponsor acknowledges and agrees that the serosuitablity rate is not within hVIVO’s control. Serosuitability will be monitored on a weekly cycle. If the average combined serosuitability rate drops below [***]%, hVIVO may initiate a Change Order Request reflecting changes to the Services necessitated by the change in such assumption.
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TABLE OF RESPONSIBILITIES
Roles and Responsibilities
| Area | Activity | AIM Immuno TechInc | hVIVO | n/a |
[***]
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SCHEDULE 2
BUDGET AND INVOICING SCHEDULE
| 1. | BUDGET |
The budget herein is provided on a fixed price basis, subject to the Protocol, Assumptions and Responsibilities detailed in Schedule 1.
In the event of a material change in the scope of the Study, the Assumptions, the Responsibilities or the Protocol, hVIVO may initiate a Change Order Request pursuant to Clause 8.1. Sponsor shall only be liable for any fees and charges in excess of those set forth in the budget in the event that there is a material change in the scope of the Study, the Assumptions, the Responsibilities or the Protocol.
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INVOICING SCHEDULE
| Total Study Budget | [***] | |
| Start Up Agreement Fees (paid) | -£[***] | |
| Remainder to Pay | £[***] |
The remaining fees will be invoiced according to the following schedule:
| Milestone payments | % | Contract | Advance Fees | Net Payment | ||||
| SUA Activities (Paid) | £[***] | £[***] | ||||||
| Quarantine Booking Fee (Paid) | £[***] | £[***] | ||||||
| On contract signature | [***]% | £[***] | [***] | £[***] | ||||
| Commencement of Screening | [***]% | £[***] | £[***] | |||||
| 1st Inoculation | [***]% | £[***] | £[***] | |||||
| 30th Inoculation | [***]% | £[***] | [***] | £[***] | ||||
| Last Inoculation | [***]% | £[***] | [***] | £[***] | ||||
| Data Lock | [***]% | £[***] | £[***] | |||||
| Clinical Study Report or 60 Days after 1st Draft) | [***]% | £[***] | £[***] | |||||
| Total | 100% | £[***] | £[***] | £[***] |
Key Assumptions
| Data Management is based on initial quote and is confirmed on finalisation of Statistical Analytical Plan |
| IMP Destruction will be a pass through and is not included |
| Clinical Monitoring will contracted directly by client |
| Data & Legal Services assumed to run from Nov 21 (Protocol approval) to Jul 22 inclusive (CSR) |
| Medical Monitor is not included |
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SCHEDULE 3
POSTPONEMENT AND MATERIAL SCOPE REDUCTION
The date of the Clinical Phase forming part of the Study, as agreed by the Parties is as set out in Schedule 1. Sponsor acknowledges and agrees that hVIVO will incur expenses and lost revenue because of any Postponement or Material Scope Reduction that occurs before or during the Clinical Phase. Therefore, in such an event, without prejudice to any other right or remedy of hVIVO, the Sponsor shall pay hVIVO compensation for unused Bed Days as detailed below:
| Event | Compensation | |
| Postponement notified less than 12 weeks prior to, or after initiation of, the Clinical Phase | [***]% of unused Bed Day Fees | |
| Postponement notified more than 12 weeks prior to initiation of Clinical Phase | [***]%of unused Bed Day Fees | |
| Material Scope Reduction notified less than 12 weeks prior to, or after initiation of, the Clinical Phase | [***]% of unused Bed Day Fees | |
| Material Scope Reduction notified more than 12 weeks prior to initiation of Clinical Phase | [***]% of unused Bed Day Fees |
In addition to the Postponement Charge, Sponsor shall pay:
|
(i) | hVIVO’s fees and expenses associated with the Postponement and the rescheduling of the Clinical Phase; |
| (ii) | any non-reimbursable third-party costs that hVIVO has incurred or is committed to incur in relation to the postponed Clinical Phase. |
| (iii) | any additional fees and fees related to services performed that would need to be repeated in relation to the rescheduled Clinical Phase; |
| (iv) | hVIVO shall use Reasonable Endeavours to minimize such costs. hVIVO shall submit an itemized invoice to the Sponsor identifying all of the costs, charges and expenses to be reimbursed. |
In the event of a Postponement hVIVO shall, within a reasonable time frame, assess such Postponement with respect to (i) the timing of event; and (ii) the impact on hVIVO’s business and may at its sole discretion, choose to waive part or all of the compensation payments due.
The Parties shall use Reasonable Endeavours to negotiate a rescheduled date for initiation or resumption of the Clinical Phase. The Clinical Phase shall be deemed be rescheduled when the Parties have agreed upon a Change Order pursuant to the provisions of Clause 8. If (i) such Change Order is not agreed within twelve (12) weeks of the date of Postponement; or (ii) the rescheduled date proposed by Sponsor is not within one year of the original date of initiation of the Clinical Phase, hVIVO may terminate this Agreement upon written notice to Sponsor.
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SCHEDULE 4
DATA PROTECTION
| 1. | Definitions and Purpose |
| 1.1 | Unless otherwise defined elsewhere in this Agreement, capitalized terms in this Schedule shall have the definitions given to them in the Data Protection Legislation. |
| 1.2 | This Schedule sets out the framework for the collecting and sharing of Personal Data between the parties as Joint Controllers. It defines the principles and procedures that the parties shall adhere to and the responsibilities the parties owe to each other. |
| 2. | Compliance with legislation |
| 2.1 | Each party shall maintain valid and up to date registrations or notifications required to process the Personal Data. |
| 2.2 | Each party warrants and undertakes that, in respect of Personal Data collected or shared by that party: |
| 2.2.1 | those Personal Data have been collected, processed and transferred in accordance with the Data Protection Legislation; |
| 2.2.2 | the Data Subjects have been provided with all information required by the Data Protection Legislation; and, |
| 2.2.3 | where necessary, it has obtained, recorded and can produce evidence of freely given, specific, informed, unambiguous and explicit consent from Data Subjects for their Personal Data including their Special Category Personal Data to be processed in order to fulfil the Purpose. |
| 3. | Obligations |
| 3.1 | Each party shall have in place appropriate technical and organisational measures to protect the Personal Data against accidental or unlawful destruction or accidental loss, alteration, unauthorised disclosure or access, and which provide a level of security appropriate to the risk represented by the processing and the nature of the data to be protected. |
| 3.2 | The parties agree to provide reasonable and prompt assistance as is necessary to each other to enable them to comply with the Data Protection Legislation. |
| 3.3 | Each party will inform the other immediately upon becoming aware of any actual or threatened data breach involving the Personal Data. Any such notification shall contain at least the nature of, the likely consequences of, and the measures taken or proposed to be taken to mitigate, the data breach. Information shall also contain the required elements as defined under Articles 33 and 34 of GDPR. Any liability for the data breach will be determined in accordance with Article 82 of GDPR |
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| 3.4 | Each party will provide clear and comprehensive privacy notices to Data Subjects whose data is collected by that party. Such privacy notices will comply with any requirements for information to be provided to Data Subjects under the Data Protection Legislation. |
| 4. | Transfers |
Neither party shall transfer any Personal Data outside of the European Economic Area unless such transfer is subject to appropriate safeguards so as to ensure both parties’ compliance with the Data Protection Legislation.
| 5. | Sub-Processors |
| 5.1 | Where a party is to engage a sub-contractor to process the Personal Data on its behalf as a data processor (or sub-processor) that party must comply with, and ensure that such sub-contractor also complies with, the Data Protection Legislation. Each party shall be fully liable for the acts and/or omissions of its sub-contractors (including data processors and/or sub-processors) as though they were that party's acts or omissions. |
| 5.2 | A party shall only use data processors (or sub-processors) providing sufficient guarantees to implement appropriate technical and organisational measures in such a manner that the processing will meet the requirements of the Data Protection Legislation and ensure the protection of the rights of the data subjects. |
| 5.3 | Each party shall have in place procedures so that any third party it authorises to access the Personal data, including data processors, will respect and maintain the confidentiality of the Personal Data. Any person acting under the authority of either party shall be obligated to process the Personal Data only on instructions from that party. |
| 6. | Data subject rights |
| 6.1 | Each party will be responsible for responding to Subject Access Requests received by that party. |
| 6.2 | Each party will maintain a record of Subject Access Requests, the decisions made and any information that was exchanged. Records will include copies of the request for information, details of the data accessed and where relevant, notes of any meeting, correspondence or phone calls relating to the request. |
| 6.3 | Each party will be responsible for the rectification of any inaccurate or incomplete Personal Data held by that party. |
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| 6.4 | Each party will be responsible for the erasure of Personal Data held by that party where erasure is required under Data Protection Legislation (including without limitation, the requirements of Article 17 GDPR). |
| 6.5 | Each party will be responsible for the restriction of processing of Personal Data held by that party where such restriction is required under Data Protection Legislation (including without limitation, the requirements of Article 18 GDPR). |
| 6.6 | Each party will be responsible for providing Personal Data held by that party to Data Subjects or third parties where such provision is required under Data Protection Legislation (including without limitation, the requirements of Article 20 GDPR). |
| 6.7 | Each party will be responsible for responding to any objections that party receives from Data Subjects to the processing of Personal Data carried on by that party. |
| 6.8 | Each party will notify the other without undue delay, if: |
| 6.8.1 | they are informed of any inaccurate or incomplete Personal Data; |
| 6.8.2 | they become aware of an obligation to erase Personal Data; |
| 6.8.3 | they become aware of an obligation to restrict the processing of Personal Data; or |
| 6.8.4 | they receive an objection to the processing of Personal Data from a Data Subject on any grounds. |
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EXHIBIT 31.1
CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002
I, Thomas K. Equels, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of AIM ImmunoTech Inc. (the “Registrant”); | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; | |
| 4. | The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| 5. | The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
| Date: November 15, 2021 | |
| /s/ Thomas K. Equels | |
| Thomas K. Equels, Esq. | |
| Chief Executive Officer & President |
EXHIBIT 31.2
CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002
I, Ellen M. Lintal, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of AIM ImmunoTech Inc. (the “Registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
| 4. | The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| 5. | The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
| Date: November 15, 2021 | |
| /s/ Ellen M. Lintal | |
| Ellen M. Lintal | |
| Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of AIM ImmunoTech Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas K. Equels, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| Date: November 15, 2021 | |
| /s/ Thomas K. Equels | |
| Thomas K. Equels, Esq. | |
| Chief Executive Officer & President |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of AIM ImmunoTech Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ellen M. Lintal, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| Date: November 15, 2021 | |
| /s/ Ellen M. Lintal | |
| Ellen M. Lintal | |
| Chief Financial Officer |