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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
Quarterly
Report Pursuant to Section 13 or 15(d)
of
the Securities Exchange Act of 1934
For
the Quarterly Period Ended
June 30,
2022
Commission
File Number:
001-27072
AIM IMMUNOTECH INC.
(Exact
name of registrant as specified in its charter)
Delaware |
|
52-0845822 |
(State
or other jurisdiction |
|
(I.R.S.
Employer |
of
incorporation or organization) |
|
Identification
No.) |
2117 SW Highway 484,
Ocala
FL
34473
(Address
of principal executive offices) (Zip Code)
(352)
448-7797
(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 |
Common Stock, par value $0.001 per share |
|
AIM |
|
NYSE American |
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.
☒
Yes ☐ No
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).
☒
Yes ☐ No
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 |
☒
Non-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 ☒
No
48,049,300 shares of common stock were outstanding, and 713
shares of series B preferred stock were outstanding as of August
11, 2022.
PART
I- FINANCIAL INFORMATION
ITEM
1: Financial Statements
AIM
IMMUNOTECH INC. AND SUBSIDIARIES
Consolidated
Balance Sheets
(in
thousands, except for share and per share amounts)
(Unaudited)
See
accompanying notes to consolidated financial statements.
AIM
IMMUNOTECH INC. AND SUBSIDIARIES
Consolidated
Statements of Comprehensive Loss
(in
thousands, except share and per share data)
(Unaudited)
See
accompanying notes to consolidated financial statements.
AIM
IMMUNOTECH INC. AND SUBSIDIARIES
Consolidated
Statements of Changes in Stockholders’ Equity
For
the Six Months Ended June 30, 2022 and 2021
(in
thousands except share data)
(Unaudited)
See
accompanying notes to consolidated financial
statements.
AIM
IMMUNOTECH INC. AND SUBSIDIARIES
Consolidated
Statements of Cash Flows
For
the Six Months Ended June 30, 2022 and 2021
(in
thousands)
(Unaudited)
See
accompanying notes to consolidated financial statements.
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”, “the
Company”,) 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. The Company has 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.
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 double-stranded RNA being developed for globally
important cancers, viral diseases and disorders of the immune
system.
The
Company is currently proceeding primarily in four areas:
|
● |
A
randomized controlled study to evaluate efficacy and safety of
Ampligen compared to a control group to treat locally advanced
pancreatic cancer patients. |
|
● |
Evaluate
Ampligen in other cancers, as a potential therapy that modifies the
tumor microenvironment with the goal of increasing anti-tumor
responses to check point inhibitors. |
|
● |
Exploring
Ampligen’s antiviral activities and potential use as a prophylactic
or treatment for existing viruses, new viruses and mutated viruses
thereof. |
|
● |
Ampligen
as a treatment for myalgic encephalomyelitis/chronic fatigue
syndrome (“ME/CFS”) and fatigue and/or Post-COVID conditions of
fatigue. |
The
Company is prioritizing activities in an order related to the stage
of development, with those clinical activities such as pancreatic
cancer, ME/CFS and Post-COVID conditions having priority over
antiviral experimentation. The Company intends that priority
clinical work be conducted in trials authorized by the FDA or
European Medicines Agency (“EMA”), which trials could support a
potential future New Drug Application (“NDA”). However, AIM’s
antiviral experimentation is designed to accumulate additional
preliminary data supporting their hypothesis that Ampligen is a
powerful, broad-spectrum prophylaxis and early-onset therapeutic
that may confer enhanced immunity and cross-protection.
Accordingly, AIM will conduct antiviral programs in those venues
most readily available and able to generate valid proof-of-concept
data, including foreign venues.
In May 2021, AIM exercised the option to re-purchase the New
Brunswick manufacturing facility, pursuant to the terms of the
March 2018 sale and lease-back agreement. The Company thereafter
sold certain equipment and machinery that it determined to be
obsolete and no longer needed for current or future manufacturing.
Then, on March 3, 2022, AIM entered into an Agreement of Sale and
Purchase with Acellories, Inc. as purchaser pursuant to which the
Company will sell the property for $3.9 million;
AIM will keep some space specifically for its Alferon activity. The
Closing Date was extended to August 31, 2022, subject to AIM’s
right to further extend the Closing Date as set forth in Section
4(b) of the Purchase Agreement.
AIM’s
business plan requires one or more Contract Manufacturing
Organizations (“CMO”) to produce Ampligen API. This includes
utilizing Polysciences Inc. (“Polysciences”) for the manufacture of
our Poly I and Poly C12U polynucleotides and associated test
methods. While AIM believes it has sufficient Ampligen API to meet
current needs, it is also continually exploring new efficiencies so
as to maximize its ability to fulfill future
obligations.
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, 2021 and 2020, contained in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2021, filed
with the SEC on March 31, 2022.
Note
2: Net Loss Per
Share
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 2,447,924
and 1,621,928,
are excluded from the calculation of diluted net loss per share for
the six months ended June 30, 2022, and 2021, respectively, since
their effect is antidilutive due to the net loss.
Note
3: Equity-Based
Compensation
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. During the six months ended June 30,
2022 there were 300,000 options granted and
no options granted in the six months ended June 30,
2021.
Stock
option for employees’ activity during the six months ended June 30,
2022, is as follows:
Stock
option activity for employees:
Schedule of Stock Option
Activity
|
|
Number
of
Options |
|
|
Weighted
Average
Exercise
Price |
|
|
Weighted
Average
Remaining
Contractual
Term
(Years) |
|
|
Aggregate
Intrinsic
Value |
|
Outstanding January 1,
2022 |
|
|
1,498,798 |
|
|
$ |
4.22 |
|
|
|
9.11 |
|
|
$ |
— |
|
Granted |
|
|
150,000 |
|
|
|
0.70 |
|
|
|
9.67 |
|
|
|
— |
|
Forfeited |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Expired |
|
|
(1,627 |
) |
|
|
106.03 |
|
|
|
— |
|
|
|
— |
|
Outstanding June 30,
2022 |
|
|
1,647,171 |
|
|
$ |
3.80 |
|
|
|
8.71 |
|
|
$ |
— |
|
Vested and
expected to vest June 30, 2022 |
|
|
1,647,171 |
|
|
$ |
3.80 |
|
|
|
8.71 |
|
|
$ |
— |
|
Exercisable June 30,
2022 |
|
|
1,368,006 |
|
|
$ |
2.89 |
|
|
|
6.30 |
|
|
$ |
— |
|
Unvested
stock option activity for employees:
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, 2022 |
|
|
412,500 |
|
|
$ |
4.15 |
|
|
|
5.85 |
|
|
$ |
— |
|
Granted |
|
|
150,000 |
|
|
|
0.70 |
|
|
|
9.67 |
|
|
|
— |
|
Expired |
|
|
(1,627 |
) |
|
|
106.03 |
|
|
|
— |
|
|
|
— |
|
Vested |
|
|
(281,708 |
) |
|
|
1.48 |
|
|
|
9.86 |
|
|
|
— |
|
Unvested
June 30, 2022 |
|
|
279,165 |
|
|
$ |
3.37 |
|
|
|
5.93 |
|
|
$ |
— |
|
Stock
option activity for non-employees:
Schedule of Stock Option
Activity
|
|
Number
of
Options |
|
|
Weighted
Average
Exercise
Price |
|
|
Weighted
Average
Remaining
Contractual
Term
(Years) |
|
|
Aggregate
Intrinsic
Value |
|
Outstanding January 1,
2022 |
|
|
279,723 |
|
|
$ |
6.12 |
|
|
|
7.93 |
|
|
$ |
— |
|
Granted |
|
|
150,000 |
|
|
|
0.70 |
|
|
|
9.67 |
|
|
|
— |
|
Forfeited |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Expired |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Outstanding June 30,
2022 |
|
|
429,723 |
|
|
$ |
4.23 |
|
|
|
8.21 |
|
|
$ |
— |
|
Vested and
expected to vest June 30, 2022 |
|
|
429,723 |
|
|
$ |
4.23 |
|
|
|
8.21 |
|
|
$ |
— |
|
Exercisable June 30,
2022 |
|
|
222,770 |
|
|
$ |
6.05 |
|
|
|
8.16 |
|
|
$ |
— |
|
Unvested
stock option activity for non-employees:
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, 2022 |
|
|
97,831 |
|
|
$ |
3.89 |
|
|
|
7.82 |
|
|
$ |
— |
|
Granted |
|
|
150,000 |
|
|
|
0.70 |
|
|
|
9.67 |
|
|
|
— |
|
Expired |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Vested |
|
|
(40,878 |
) |
|
|
1.35 |
|
|
|
— |
|
|
|
— |
|
Unvested
June 30, 2022 |
|
|
206,953 |
|
|
$ |
3.66 |
|
|
|
8.52 |
|
|
$ |
— |
|
Stock-based
compensation expense was approximately $517,000 and
$1,006,000 for the
six months ended June 30, 2022 and 2021.
As
June 30, 2022, and 2021, respectively, there was approximately
$454,000
and $434,000
of unrecognized equity-based compensation cost related to options
granted under the Equity Incentive Plan.
Note
4: Marketable
Securities
Marketable
securities consist of mutual funds. As of June 30, 2022 and
December 31, 2021, it was determined that none of the marketable
securities had an other-than-temporary impairment. As of June 30,
2022 and December 31, 2021, all securities were measured as Level 1
instruments of the fair value measurements standard (See Note 11:
Fair Value). As of June 30, 2022, and December 31, 2021 the Company
held $7,320,000 and $16,175,000 in mutual
funds.
Mutual
Funds classified as available for sale consisted of:
Schedule
of Available for Sale
|
|
June 30,
2022
(in thousands) |
|
Securities |
|
Fair
Value |
|
|
Short-Term
Investments |
|
Mutual
Funds |
|
$ |
7,320 |
|
|
$ |
7,320 |
|
Totals |
|
$ |
7,320 |
|
|
$ |
7,320 |
|
Schedule of Equity
Securities
|
|
|
|
|
Securities |
|
June 30,
2022
(in thousands) |
|
Net losses
recognized during the period on equity securities |
|
$ |
(1,404 |
) |
Less: Net
gains and losses recognized during the period on equity securities
sold during the period |
|
|
(583 |
) |
Unrealized
gains and losses recognized during the reporting period on equity
securities still held at the reporting date |
|
$ |
(821 |
) |
Note
5: Accrued
Expenses
Accrued
expenses consist of the following:
Schedule of Accrued
Expenses
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
June 30,
2022 |
|
|
December
31, 2021 |
|
Compensation |
|
$ |
28 |
|
|
$ |
1 |
|
Professional
fees |
|
|
344 |
|
|
|
169 |
|
Clinical
trial expenses |
|
|
— |
|
|
|
61 |
|
Other
expenses |
|
|
130 |
|
|
|
207 |
|
Accrued
expenses |
|
$ |
502 |
|
|
$ |
438 |
|
Note
6: Property and
Equipment, net
Schedule of Property and
Equipment
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
June 30,
2022 |
|
|
December
31, 2021 |
|
Land,
buildings and improvements |
|
$ |
— |
|
|
$ |
3,900 |
|
Furniture,
fixtures, and equipment |
|
|
2,353 |
|
|
|
2,353 |
|
Total
property and equipment |
|
|
2,353 |
|
|
|
6,253 |
|
Less:
accumulated depreciation |
|
|
(2,226 |
) |
|
|
(2,206 |
) |
Property
and equipment, net |
|
$ |
127 |
|
|
$ |
4,047 |
|
Property
and equipment are recorded at cost. Depreciation and amortization
are computed using the straight-line method over the estimated
useful lives of the respective assets, ranging from three to
thirty-nine years. Depreciation expense for the six months ending
June 30, 2022 and June 30, 2021 was $20,000 and $325,000, respectively.
The
Company made a strategic shift on in-house manufacturing and
recorded an impairment of the facility in the amount of $1,800,000 during the year ended
December 31, 2021. During the period ending June 30, 2022, the
Company reported assets held for sale related to the pending sale
of the manufacturing facility located at 783 Jersey Avenue (See
Note 11 Fair Value).
Note
7: Patents
Schedule
of Patents, Trademark Rights
December
31, 2020 |
|
$ |
1,498 |
|
Acquisitions |
|
|
592 |
|
Amortization |
|
|
(116 |
) |
December 31,
2021 |
|
$ |
1,974 |
|
Acquisitions |
|
|
76 |
|
Amortization |
|
|
(38 |
) |
June 30,
2022 |
|
$ |
2,012 |
|
Patents
and trademarks are stated at cost and are amortized using the
straight-line method of the estimated useful life of 17
years.
Amortization
of patents and trademarks for each of the next five years and
thereafter is as follows:
Schedule of Amortization of Patents and
Trademarks
|
|
|
|
|
Year
Ending December 31, |
|
|
|
2022 |
|
$ |
40 |
|
2023 |
|
|
156 |
|
2024 |
|
|
180 |
|
2025 |
|
|
203 |
|
2026 |
|
|
240 |
|
Thereafter |
|
|
1,193 |
|
Total |
|
$ |
2,012 |
|
Note
8: Stockholders’
Equity
(a)
Preferred Stock
The
Company is authorized to issue 5,000,000 shares
of $0.01 par value
preferred stock with such designations, rights and preferences as
may be determined by the Board of Directors. Of our authorized
preferred stock, 250,000 shares
have been designated as Series A Junior Participating Preferred
Stock and 8,000 shares have
been designated as Series B Convertible Preferred Stock. The Series
B Convertible Preferred Stock has a stated value $1,000 per
share.
The
Company is authorized to issue 8,000 Series B
Convertible Preferred Stock, no par value, stated
value $1,000 per share. As of
June 30, 2022, and December 31, 2021, the Company had 713 and
715 shares of
Series B Convertible Preferred Stock outstanding, respectively.
Holders shall be entitled to receive, and the Company shall pay,
dividends on shares of Series B Preferred Stock equal (on an
as-if-converted-to-Common-Stock basis) to and in the same form as
dividend actually paid on shares of Common Stock when as and if
such dividends are paid on shares of the Common Stock. Each such
Preferred Share is convertible into 114
shares of common stock. Upon any liquidation, dissolution or
winding-up of the Company, whether voluntary or involuntary, the
Holders shall be entitled to receive out of the assets, whether
capital or surplus of the Company the same amount that a holder of
Common Stock would receive if the Preferred Stock was fully
converted. The Series B Convertible Preferred Stock shall have no
voting Rights.
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 $1,000 per unit, consisting of
one share of Series B Convertible Preferred Stock with a face value
of $1,000 (and immediately
convertible into common stock at an assumed conversion price of
$8.80) and 114
warrants with an assumed exercise price of $8.80. The warrants are
exercisable for five years
after the date of issuance. The net proceeds realized from the
rights offering were approximately $4,700,000. During the six
months ending June 30, 2022 and June 30, 2021, 2 and
7 shares, respectively, of Series B Convertible Preferred
Stock were converted into common stock.
(b)
Common Stock
The
Company has authorized shares of 350,000,000 with
specific limitations and restrictions on the usage of 8,000,000
of the 350,000,000
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 $500,000 worth of
shares at the market price. Pursuant to NYSE American rules, this
plan was effective for a sixty-day period commencing upon the date
that the NYSE American approved the Company’s Supplemental Listing
Application. When this plan expired, the board of directors
approves subsequent similar $500,000 plans for
all directors, officers and employees to buy Company shares from
the Company at the market price. Subsequent plans were approved by
the board of directors upon the expiration of prior plans. The
latest plan was approved by the board of directors on March 2,
2022.
During
the six months ended June 30, 2022, the Company issued a total of
53,922 with
shares of its common stock at price of $1.02 for a total of
$55,000 as part of
the employee stock purchase plan, not from the 2018 Equity
Incentive Plan.
During
the twelve months ended December 31, 2021, the Company issued a
total of 132,238
shares of its common stock at prices ranging from $1.16 to $2.35 for a total of
$205,000.
On September 27, 2019, the Company closed a public offering
underwritten by A.G.P./Alliance Global Partners, LLC (the
“Offering”) of (i) 1,740,550
shares of Common Stock; (ii) pre-funded warrants exercisable for
7,148,310 shares of Common Stock
(the “Pre-funded Warrants”), and (iii) warrants to purchase up to
an aggregate of 8,888,860
shares of Common Stock (the “Warrants”). In conjunction with the
Offering, a
Representative’s Warrant to purchase up to an aggregate of
266,665
shares of common stock (the “Representative’s Warrant”). The shares of Common Stock and Warrants
were sold at a combined Offering price of $0.90, less
underwriting discounts and commissions. Each Warrant sold with the
shares of Common Stock represents the right to purchase one share
of Common Stock at an exercise price of $0.99 per share. The
Pre-Funded Warrants and Warrants were sold at a combined Offering
price of $0.899, less
underwriting discounts and commissions. The Pre-Funded Warrants
were sold to purchasers whose purchase of shares of Common Stock in
the Offering would otherwise result in the purchaser, together with
its affiliates and certain related parties, beneficially owning
more than 4.99% of the Company’s outstanding Common Stock
immediately following the consummation of the Offering, in lieu of
shares of Common Stock. Each Pre-Funded Warrant represents the
right to purchase one share of Common Stock at an exercise price of
$0.001 per share. The Pre-Funded Warrants are exercisable
immediately and may be exercised at any time until the Pre-Funded
Warrants are exercised in full. A registration statement on Form
S-1, relating to the Offering was filed with the SEC and was
declared effective on September 25, 2019, the net proceeds were
approximately $7,200,000.
As of June 30, 2022, there are 15,000 Warrants
outstanding.
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 2019 EDA replaced a prior EDA
with Maxim. For the year ended December 31, 2020, the Company sold
20,444,807
shares under the 2019 EDA for total gross proceeds of $53,936,615,
which includes a 3.5% fee to Maxim of
$1,888,727. During the period
ended December 31, 2021, the Company sold 5,665,731
shares under the 2019 EDA for total gross proceeds of $13,301,526,
which includes a 3.5% fee to Maxim of
$465,533. The 2019 EDA was
terminated in early February 2021.
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 7,000,000
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 10 years from its effective
date. During first quarter of 2022, 300,000 options were
issued to employees with an exercise price of $.70 for a period of
ten years with a vesting period of
one year. During fourth quarter of 2021, 613,512 options were
issued to employees with an exercise price range of $1.11 to $1.71 for a period of
ten years with a vesting period of
one year.
As of
June 30, 2022, and December 31, 2021, there were 48,048,822 and
47,994,672 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
During
the second quarter of 2022 accounting pronouncements issued by the
FASB did not or are not believed by management to have a material
impact on the Company’s present or future financial
statements.
Note
11: Fair
Value
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 also has certain warrants with a cash
settlement feature in the occurrence of a Fundamental Transaction.
The fair value of the redeemable warrants (“Warrants”) related to
the Company’s February 2017, April 2018, and March 2019 common
stock and warrant issuance, are calculated using a Monte Carlo
Simulation. While the Monte Carlo Simulation is one of a number of
possible pricing models, the Company has determined it to be
industry accepted and fairly presented the fair value of the
Warrants. As an additional factor to determine the fair value of
the Put’s liability, the occurrence probability of a Fundamental
Transaction event was factored into the valuation.
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
|
|
June
30, |
|
|
December
31, |
|
|
|
2022 |
|
|
2021 |
|
Underlying
price per share |
|
$ |
0.78 |
|
|
$ |
0.92 |
|
Exercise price per
share |
|
$ |
30.25-$33.00 |
|
|
$ |
30.25-$33.00 |
|
Risk-free
interest rate |
|
|
1.29%-1.32 |
% |
|
|
0.22%-0.23 |
% |
Expected holding
period |
|
|
0.09-0.10 |
|
|
|
0.58-0.60 |
|
Expected
volatility |
|
|
45 |
% |
|
|
45 |
% |
Expected
dividend yield |
|
|
— |
|
|
|
— |
|
The
Company utilized the following assumptions to estimate the fair
value of the April 2018 Warrants:
|
|
|
|
|
|
|
|
|
|
|
June
30, |
|
|
December
31, |
|
|
|
2022 |
|
|
2021 |
|
Underlying
price per share |
|
$ |
0.78 |
|
|
$ |
0.92 |
|
Exercise price per
share |
|
$ |
17.16 |
|
|
$ |
17.16 |
|
Risk-free
interest rate |
|
|
2.84 |
% |
|
|
0.67 |
% |
Expected holding
period |
|
|
1.32 |
|
|
|
1.81 |
|
Expected
volatility |
|
|
65 |
% |
|
|
120 |
% |
Expected
dividend yield |
|
|
— |
|
|
|
— |
|
The
Company utilized the following assumptions to estimate the fair
value of the March 2019 Warrants:
|
|
|
|
|
|
|
|
|
|
|
June
30, |
|
|
December
31, |
|
|
|
2022 |
|
|
2021 |
|
Underlying
price per share |
|
$ |
0.78 |
|
|
$ |
0.92 |
|
Exercise price per
share |
|
$ |
8.80 |
|
|
$ |
8.80 |
|
Risk-free
interest rate |
|
|
2.88 |
% |
|
|
0.78 |
% |
Expected holding
period |
|
|
1.69 |
|
|
|
2.19 |
|
Expected
volatility |
|
|
70 |
% |
|
|
125 |
% |
Expected
dividend yield |
|
|
— |
|
|
|
— |
|
Measurement input |
|
|
— |
|
|
|
— |
|
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% 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: |
1. |
The
Company only has one product that is FDA approved but is currently
not available for commercial sales. |
2. |
The
Company will have to perform additional clinical trials for FDA
approval of its flagship product. |
3. |
Industry
and market conditions continue to include uncertainty, adding risk
to any transaction. |
4. |
Available
capital for a potential buyer in a cash transaction continues to be
limited. |
5. |
The
nature of a life sciences company is heavily dependent on future
funding and high fixed costs, including Research &
Development. |
6. |
The
Company has minimal revenues streams which are insufficient to meet
the funding needs for the cost of operations or construction at
their manufacturing facility; and |
7. |
The
Company’s Rights Agreement and Executive Agreements make it less
attractive to a potential buyer. |
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 |
|
|
0.5 |
% |
Medium |
|
|
1.0 |
% |
High |
|
|
5.0 |
% |
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 elucidated above, the Company utilized a discrete
uniform probability distribution over the Expected Holding Period
to model in 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 100%,
were utilized as a proxy for the future volatility. |
|
(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.,
utilizing historical stock prices), the numbers input change from
period to period (e.g., the actual historical prices input for the
relevant period). The carrying amount and estimated fair value of
the above Warrants was approximately $1,000 and
$35,000 as of June
30, 2022 and December 31, 2021, respectively.
The
Company applies FASB ASC 820 (formerly Statement No. 157 Fair
Value Measurements) that defines fair value, establishes a
framework for measuring fair value in generally accepted accounting
principles, 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 (formerly SFAS No. 157) 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:
1. |
Level
1 – Quoted prices are available in active markets for identical
assets or liabilities at the reporting date. Generally, this
includes debt and equity securities that are traded in an active
market. |
2. |
Level
2 – Observable inputs other than Level 1 prices such as quote
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. |
3. |
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 June
30, 2022, 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 the warrants. |
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 June 30, 2022 |
|
|
|
Total |
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable
securities |
|
$ |
7,320 |
|
|
$ |
7,320 |
|
|
$ |
— |
|
|
$ |
— |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
warrants |
|
$ |
1 |
|
|
|
— |
|
|
|
— |
|
|
$ |
1 |
|
|
|
(in
thousands)
As of December 31, 2021 |
|
|
|
Total |
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable
securities |
|
$ |
16,175 |
|
|
$ |
16,175 |
|
|
$ |
— |
|
|
$ |
— |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
warrant |
|
$ |
35 |
|
|
|
— |
|
|
|
— |
|
|
$ |
35 |
|
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, 2021 |
|
$ |
35 |
|
Fair value
adjustments |
|
|
(34 |
) |
Balance at
June 30, 2022 |
|
$ |
1 |
|
The
table below presents the balances of assets and liabilities
measured at fair value on a nonrecurring basis by level within the
hierarchy as:
Schedule of Assets and Liabilities Measured
at Fair Value on a NonRecurring Basis
|
|
(in
thousands)
As of December 31, 2021 |
|
|
|
Total |
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
|
Total
Gains
(Losses) |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
lived assets held and used(a) |
|
$ |
3,900 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,900 |
|
|
$ |
(1,800 |
) |
|
(a) |
In
accordance with Subtopic 360-10, long-lived assets held and used
with a carrying amount of $5,700,000
were written down to their fair value of $3,900,000,
resulting in an impairment charge of $1,800,000,
which was included in earnings for the period ending December 31,
2021. |
Note
12: Financing
Obligation Arising from Sale Leaseback
Transaction
On
March 16, 2018, the Company sold land and a building for $4,080,000 and concurrently entered
into an agreement to lease the property
back for ten years at $408,000 per year for two years through March
31, 2020. The lease payments would increase 2.5% per year for the
next three years through March 31, 2023, and the lease payments
would increase 3% for the remaining five years through March 31,
2028. As part of the sale of this building, warrants were
provided to the buyer for the purchase of up to 73,314 shares of
Company common stock for a period of five years at an exercise price of
$17.05 per share,
125% of the
closing price of the common stock on the NYSE American on the date
of execution of the letter of intent for the purchase. The sale of
the property included an option to repurchase the property based on
a contractual formula which does not permanently transfer all the
risks and rewards of ownership to the buyer. Because the sale of
the property included the option to repurchase the property and
included the above attributes, the transaction was accounted for as
a financing transaction whereby the Company recorded the cash
received and a financing obligation. The warrants cannot be
exercised to the extent that any exercise would result in the
purchaser owning in excess of 4.99% of our issued and outstanding
shares of common stock.
On
May 13, 2021, the Company completed its repurchase of the property
for cash of $4,732,637. The repurchase
resulted in the related liability recorded upon sale being
extinguished on the date of the repurchase. A loss on the
extinguishment was recorded based on the difference between the
carrying value of the financing obligation including unamortized
debt discount and the amount exchanged to extinguish the
debt.
Interest
expense relating to this financing agreement was $0 for the period ended June 30,
2022 and $67,000 for the six months ended
June 30, 2021.
Note
13: Leases
The
Company leases office and storage space, and other equipment under
non-cancellable operating leases with initial terms typically
ranging from 1 to 5 years. At contract inception,
the Company reviews the facts and circumstances of the arrangement
to determine if the contract is or contains a lease. The Company
follows the guidance in Topic 842 “Leases” to evaluate
whether the contract has an identified asset; if the Company has
the right to obtain substantially all economic benefits from the
asset; and if the Company has the right to direct the use of the
underlying asset. When determining if a contract has an identified
asset, the Company considers both explicit and implicit assets, and
whether the supplier has the right to substitute the asset. When
determining if the Company has the right to direct the use of an
underlying asset, the Company considers if it has the right to
direct how and for what purpose the asset is used throughout the
period of use and if it controls the decision-making rights over
the asset.
The
Company’s lease terms may include options to extend or terminate
the lease. The Company exercises judgment to determine the term of
those leases when extension or termination options are present and
include such options in the calculation of the lease term when it
is reasonably certain that it will exercise those
options.
The
Company has elected to include both lease and non-lease components
in the determination of lease payments. Payments made to a lessor
for items such as taxes, insurance, common area maintenance, or
other costs commonly referred to as executory costs, are also
included in lease payments if they are fixed. The fixed portion of
these payments are included in the calculation of the lease
liability, while any variable portion would be recognized as
variable lease expenses, when incurred. Variable payments made to
third parties for these, or similar costs, such as utilities, are
not included in the calculation of lease payments.
At
lease commencement, lease-related assets and liabilities are
measured at the present value of future lease payments over the
lease term. As most of the Company’s leases do not provide an
implicit rate, the Company exercises judgment in determining the
incremental borrowing rate based on the information available when
the lease commences to measure the present value of future
payments.
Operating
leases are included in other assets, current operating lease
obligations, and operating lease obligations (less current portion)
on the Company’s consolidated balance sheet. Short term leases with
an initial term of 12 months or less are not presented on the
balance sheet with expense recognized as incurred.
The
Company entered into a Lease Agreement for a term of five years commencing on
September 14, 2020 pursuant to
which the Company agreed to lease two Sharp copiers. The base of
$1,415 per month.
On
June 13, 2018, the Company entered into a Lease Agreement for a
term of six years commencing on
July 1, 2018 pursuant to which
the Company agreed to lease approximately 3,000 rentable square feet. The base
rent increases by 3% each year, and ranges
from $2,100 per month for the first
year to $2,785 per month for the sixth
year.
On
May 1, 2019, the Company entered into a Lease Agreement for a term
of
three years commencing
on
May 1, 2019,
pursuant to which the Company agreed to lease approximately
3,000 rentable
square feet. The base rent is $2,500
per
month for the term of the lease. On October 4, 2021, the Company
executed a request to renew the lease for a one-year term as
defined in the Lease Agreement. The request was accepted and the
one-year term commenced on April 30, 2022.
On
February 17, 2022, the Company entered into a Lease Agreement for a
term of
two years commencing on
March 1, 2022, pursuant to which the Company agreed to lease
a Canon copier. The base rent is $322
per month for the term of the lease.
On
June 16, 2022, the Company entered into a Lease Agreement for a
term of
five years commencing on
July 1, 2022 pursuant to which the Company agreed to lease
approximately
5,210 rentable square feet. The base rent increases by
3% each year, and ranges from $15,630
per month for the first year to $18,118
per month for the fifth year.
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 11 months and
5 years. As of
June 30, 2022, and December 31, 2021, the weighted-average
remaining term is 2.67 and 2.72 years,
respectively.
The
Company has determined that the incremental borrowing rate is
10% as of June 30,
2022, and December 31, 2021, respectively, based upon the recently
completed financing transaction in December 2019.
Future
minimum payments as of June 30, 2022, are as follows:
Schedule of Operating lease Future
Payments
|
|
|
|
|
Year
Ending December 31, |
|
|
|
2022 |
|
$ |
54 |
|
2023 |
|
|
153 |
|
2024 |
|
|
174 |
|
2025 |
|
|
158 |
|
Thereafter |
|
|
373 |
|
Less
imputed interest |
|
|
(23 |
) |
Total |
|
$ |
889 |
|
As of
June 30, 2022, and December 31, 2021, the balance of the right of
use assets was $889,000 and $149,000, respectively, and the
corresponding lease liability balance was $889,000 and $149,000, respectively. The
total rent expense for the six months ended June 30, 2022, and June
30, 2021 amounted to approximately $34,000 and $22,000, respectively. Total rent
expense for short term leases for the six months ended June 30,
2022 and June 30, 2021 amounted to approximately $10,000 for both
periods.
Note
14: Research,
Consulting and Supply Agreements
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 $1,066,000.
In
April 2021, the Company approved a proposal from 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. The Company is working with Polysciences to negotiate and
finalize both a Service Agreement and a Quality Agreement. For the
year ended December 31, 2021 the Company has incurred an expense
and paid Polysciences approximately $250,000. For the period
ended June 30, 2022, the Company paid Polysciences $102,780.
In
April 2022, AIM executed a work order with Amarex Clinical Research
LLC (“Amarex”), our contract research organization, pursuant to
which Amarex will manage a Phase 2 clinical trial in advanced
pancreatic cancer patients designated AMP-270. Per the work order,
AIM anticipates that the study will cost approximately $8.2 million, which
includes pass through costs of approximately $1.0 million and
excludes certain third-party costs and escalations. AIM anticipates
that the study will take approximately 4.6 years to complete.
On
June 13, 2022, AIM executed a work order with Amarex, pursuant to
which Amarex will manage a Phase 2 trial in patients with
Post-COVID Conditions, once FDA authorization to proceed is
received. It is planned that the study will be conducted at up to
10 sites in the United States. AIM is sponsoring the study. AIM
anticipates that the study will cost approximately $4.4
million, which includes pass through costs of approximately
$125,470, investigator costs
estimated at about $2.4 million and excludes certain
other third-party costs and escalations.
In
December 2020, AIM added Pharmaceutics International Inc. (“Pii”)
as a “Fill & Finish” provider to enhance its capacity to
produce Ampligen. This addition amplifies AIM’s manufacturing
capability by providing redundancy and cost savings. The contracts
augment our active and in-process fill and finish capacity. For the
period ended December 31, 2021, the Company has incurred an expense
and paid Pii approximately $89,000.
For the six months ended June 30, 2022, the Company incurred an
expense and paid Pii approximately $243,000.
Note 15: Subsequent
Events
AIM received a notice of nominations, dated July 8, 2022 (the
“Purported Nomination Notice”), from Jonathan Thomas Jorgl,
purporting to give notice of his intent, as a holder of 1,000
shares of AIM common stock, to nominate two director candidates for
election to AIM’s board of directors (the “Board”) at AIM’s 2022
annual meeting of stockholders (the “Annual Meeting”). As the Board
currently comprises three members, Mr. Jorgl is seeking to change
control of the Board. On July 14, 2022, the Board unanimously
determined that the Purported Nomination Notice was defective for
noncompliance with the advance notice provisions of AIM’s Amended
and Restated Bylaws (the “Bylaws”) and should be rejected and
disregarded. The Board also determined that AIM should institute
legal action against Mr. Jorgl and those believed to be acting in
concert with him as an activist group to prevent further harm to
the Company.
On July 15, 2022, the Company filed a lawsuit in the United States
District Court for the Middle District of Florida, Ocala Division,
against Mr. Jorgl and six other defendants (his nominees Robert
Chioini and Michael Rice as well as Franz Tudor, Todd Deutsch, Ted
Kellner and Walter Lautz), seeking to enjoin the seven defendants
from committing any further violations of various federal
securities laws. AIM’s lawsuit alleges that these seven individuals
have failed to register as a group pursuant to U.S. securities laws
and have committed other unlawful actions in the context of their
attempt to effectuate a takeover of the Board. On July 19, 2022,
AIM notified Mr. Jorgl that the Board had determined the Purported
Nomination Notice was invalid and failed to satisfy the Bylaws and
that any purported nominations thereunder would be disregarded at
the Annual Meeting.
On July 29, 2022, Mr. Jorgl sued AIM and each of its three
directors in the Court of Chancery of the State of Delaware,
seeking a declaratory judgement that the Purported Nomination
Notice was valid and that AIM must include Mr. Jorgl’s two
purported nominees in AIM’s proxy materials to be distributed in
connection with the Annual Meeting. In his lawsuit, Mr. Jorgl also
seeks certain injunctive relief against AIM. On August 12, 2022, a
hearing was held in the Court of Chancery concerning a motion for a
temporary restraining order (“TRO”) sought by Mr. Jorgl. Absent a
stipulation of the parties resolving certain issues, the Vice
Chancellor expects to rule on the motion for a TRO on Monday,
August 15, 2022.
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 Report in Part I, Item 7.
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations”; Part II, Item 1. “Legal Proceedings”; and
Part II, Item 1A. “Risk Factors”, as well as the following sections
of our Annual Report on Form 10-K for the year ended December 31,
2021: Item 1. “Business”, Part I; Item 1A. “Risk Factors”, Part I;
Item 3. “Legal Proceedings”, Part I and Part II; Item 7.
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations”.
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 and their absence does not
mean that a statement is not forward-looking. Our forward-looking
statements are not guarantees of performance, and actual results
could vary materially from those contained in or expressed by such
statements due to risks and uncertainties.
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: our ability to adequately fund our projects as
we will need additional funding to proceed with our objectives; 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 discover new drugs in the future, changing market conditions,
changes in laws and regulations affecting our industry; and future
matters related to our New Jersey facility, which by definition we
cannot define at this time.
We
are in various stages of seeking to determine whether Ampligen will
be effective in the treatment of multiple types of viral diseases,
cancers, and immune-deficiency disorders. We discuss in this Report
our current and anticipated future activities, all of which are
subject to change for a number of reasons. Significant 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.
We cannot assure that the clinical studies will be successful or
yield any useful data or require additional funding.
With
the outbreak of the COVID-19 coronavirus and our prior research
into Ampligen’s antiviral activity against Severe Acute Respiratory
Syndrome, or SARS, we now are focusing on the potential of Ampligen
to serve as a protective prophylaxis and an early-onset therapeutic
for severe respiratory viruses, including SARS-CoV-2. Our beliefs
rely on a number of 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. The pandemic is disrupting
world health and world economies and most likely will continue to
do so for a long time. While we are able to continue to operate,
clearly, like all businesses, we are unable to gauge how bad this
pandemic will affect our operations in the future. We reached out
to numerous foreign governments related to COVID-19 and, if
successful, may be working in these countries. 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 provisional
patent applications related to the COVID-19 coronavirus. However,
these filings do not assure that patents will ultimately be
granted.
In
February 2013, we received a Complete Response Letter (CRL) from
the Food and Drug Administration, or FDA, for our Ampligen New Drug
Application, or NDA, for the treatment of CFS. The FDA communicated
that we should conduct at least one additional clinical trial,
complete various nonclinical studies and perform a number of data
analyses. Accordingly, the remaining steps to potentially gain FDA
approval of the Ampligen NDA, the final results of these and other
ongoing activities could vary materially from our expectations and
could adversely affect the chances for approval of the Ampligen
NDA. These activities and the ultimate outcomes are subject to a
variety of risks and uncertainties, including but not limited to
risks that (i) the FDA may ask for additional data, information or
studies to be completed or provided; and (ii) the FDA may require
additional work related to the commercial manufacturing process to
be completed or may, in the course of the inspection of
manufacturing facilities, identify issues to be resolved. A
proposed confirmatory trial and responses to the CRL are being
worked on now by our R&D team and consultants.
In
August 2016, we received approval of our NDA from Administracion
Nacional de Medicamentos, Alimentos y Tecnologia Medica (“ANMAT”),
for commercial sale of rintatolimod (U.S. tradename: 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. We believe, but cannot assure, that this approval provides
a platform for potential sales in certain countries within the
European Union under regulations that support cross-border
pharmaceutical sales of licensed drugs. In Europe, approval in a
country with a stringent regulatory process in place, such as
Argentina, should add further validation for the product as the
Early Access Program, or EAP, as discussed below and underway in
Europe in pancreatic cancer. ANMAT approval is only an initial, but
important, step in the overall successful commercialization of our
product. There are a number of actions that must occur before we
could be able to commence commercial sales in Argentina. In
September 2019, we received clearance from the FDA to ship Ampligen
to Argentina for the commercial launch and subsequent sales. In
June 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 Pharma on the
commercial launch of Ampligen in Argentina. Commercialization in
Argentina will require, among other things, an appropriate
reimbursement level, appropriate marketing strategies, 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. This testing and approval
process is currently delayed due to the COVID-19 pandemic and
ANMAT’s internal processes. Approval of rintatolimod for severe CFS
in the Argentine Republic does not in any way suggest that the
Ampligen NDA in the United States or any comparable application
filed in the European Union or elsewhere will obtain commercial
approval.
In
May 2016, we entered into a five-year agreement with myTomorrows, a
Netherlands based company, for the commencement and management of
an EAP in Europe and Turkey related to CFS. Pursuant to the
agreement, myTomorrows, as our exclusive service provider and
distributor in this territory, is performing EAP activities. In
January 2017, the EAP was extended to pancreatic cancer patients
beginning in the Netherlands. In February 2018, we signed an
amendment to extend the territory to cover Canada to treat
pancreatic cancer patients, pending government approval. In March
2018, we signed an amendment to which myTomorrows will be our
exclusive service provider for special access activities in Canada
for the supply of Ampligen for the treatment of CFS. MyTomorrows
provides services related to the supply and distribution of
Ampligen to patients in Early Access Programs (EAP) which is
initiated through a physician’s request; there have been no
physician requests that have led to government approval, therefore
no patients have been treated under an EAP for either pancreatic
cancer or CFS in Canada. No assurance can be given that we can
sufficiently supply product should we experience an unexpected
demand for Ampligen in our clinical studies, the commercial launch
in Argentina or pursuant to the EAPs. No assurance can be given
that Ampligen will prove effective in the treatment of pancreatic
cancer. The agreement was automatically extended for a period of 12
months on May 20, 2021, and again for an additional period of 12
months on May 20, 2022.
Multiple
Ampligen clinical trials are underway, in various phases of
development and activity, with a number of subjects enrolled at
university cancer centers testing whether tumor microenvironments
can be reprogrammed to increase the effectiveness of cancer
immunotherapy, including checkpoint blockade. One site of clinical
trials is Roswell Park and the other is the University of
Pittsburgh Medical Center. (See: “Research and Development;
Immuno-oncology”). No assurance can be given as to the results of
these underway trials. No assurance can be given as to whether some
or all of the planned additional oncology clinical trials will
occur and they are subject to many factors, including lack of
regulatory approval(s), lack of study drug, or a change in
priorities at the sponsoring universities or cancer centers. Even
if these additional clinical trials are initiated, as we are not
the sponsor, we cannot assure that these clinical studies or the
studies underway will be successful or yield any useful data. In
addition, initiation of planned clinical trials may not occur
secondary 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.
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.
We
strived to maximize the outsourcing of certain components of our
manufacturing, quality control, marketing and distribution while
maintaining control over the entire process through our quality
assurance and regulatory groups. We cannot provide any guarantee
that the facility or our contract manufacturers will pass an FDA
pre-approval inspection for Alferon N Injection
manufacturing.
In May 2021, we exercised our option to re-purchase the New
Brunswick manufacturing facility, pursuant to the terms of the
March 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. Then, on
March 3, 2022, we entered into an Agreement of Sale and Purchase
with Acellories, Inc. as purchaser pursuant to which we will sell
our property for $3.9 million; AIM will keep some space
specifically for its Alferon activity. The Closing Date was
extended to August 31, 2022, subject to AIM’s right to further
extend the Closing Date as set forth in Section 4(b) of the
Purchase Agreement.
In
June 2022 we entered into a lease agreement with the New Jersey
Economic Development Authority for a 5,210 square-foot,
state-of-the-art R&D facility at the New Jersey Bioscience
Center (“NJBC”), primarily consisting of two separate laboratory
suites. The facility is AIM’s operations, research and development
center.
The
production of new Alferon N Injection Active Pharmaceutical
Ingredient, or API, is currently on hold. While the New Brunswick
facility is approved by the FDA under the Biological License
Application, or BLA, for Alferon N Injection. While we are selling
the New Brunswick facility, we intend to maintain a certain amount
of space at that facility, the sale of the facility will move up
the timeline for contracting with a CMO, or CMOs, capable of
producing Alferon, and receiving FDA approval to do so, prior to
commercial sale of newly produced inventory product. If and when we
obtain a reaffirmation of FDA BLA status and have begun production
of new Alferon N Injection API, it will need FDA approval as to the
quality and stability of the final product before commercial sales
can resume. We may need additional funds to finance the validation
process. If we are unable to gain the necessary FDA approvals
related to the manufacturing process and/or final product of new
Alferon N Injection 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.
In
December 2020, we added 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 active and in-process fill and
finish capacity.
Due
to continuing delays and other obstacles related to importing
Ampligen to China, on August 10, 2022, we ended our contract with
Shenzhen Smoore Technology for the development of an Ampligen
delivery device for the treatment of SARS-CoV-2.
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.
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 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 four areas:
|
● |
A
randomized controlled study to evaluate efficacy and safety of
Ampligen compared to a control group to treat locally advanced
pancreatic cancer patients. |
|
● |
Evaluate
Ampligen in other cancers, as a potential therapy that modifies the
tumor microenvironment with the goal of increasing anti-tumor
responses to check point inhibitors. |
|
● |
Exploring
Ampligen’s antiviral activities and potential use as a prophylactic
or treatment for existing viruses, new viruses and mutated viruses
thereof. |
|
● |
Ampligen
as a treatment for ME/CFS and fatigue and/or Post-COVID conditions
of fatigue. |
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 Post-COVID conditions 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 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.
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 Standard
of Care (“SOC”), when compared to well-matched historical controls.
These data support the proposition that Ampligen, when administered
to either 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, submitted an
Investigational New Drug (“IND”) application 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. The FDA placed the study on Clinical Hold in
November 2021 and provided valuable feedback on the study design.
We submitted our response to the Clinical Hold in February 2022. In
March 2022, we received notification from the FDA that the Clinical
Hold was released and cleared, meaning that we are now able to
proceed with the study. 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. In fact, in March 2022 we announced interim
data from an investigator-initiated, Phase 2, single-arm,
efficacy/safety trial to evaluate the effectiveness of combining
intensive locoregional intraperitoneal (IP) chemoimmunotherapy of
cisplatin with IP Ampligen (TLR-3 agonist) and IV infusion of the
checkpoint inhibitor pembrolizumab for patients with recurrent
platinum-sensitive ovarian cancer. We believe that data from the
study, which is being conducted by the University of Pittsburgh
Medical Center and funded by a Merck grant, demonstrated that when
combining three drugs – Ampligen and pembrolizumab, which are both
immune therapies, with cisplatin, a chemotherapy – evidence of
increased biomarkers associated with T cell chemotaxis and
cytolytic function has been seen. Importantly, increases of these
biomarkers in the tumor microenvironment have been correlated with
favorable tumor responses. 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” 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 first and foremost on thoroughly
proving the concept, especially while there is still a large
COVID-19-infected population. Previously, animal studies were
conducted that yielded positive results utilizing Ampligen to treat
numerous viruses, such as Western Equine Encephalitis Virus, Ebola,
Vaccinia Virus (which is used in the manufacture of smallpox
vaccine) and SARS-CoV-1. We have conducted experiments in
SARS-CoV-2 showing Ampligen has a powerful impact on viral
replication. The prior studies of Ampligen in SARS-CoV-1 animal
experimentation may predict similar protective effects against
SARS-CoV-2.
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 explore studies
(initially with healthy volunteers) outside the United States and
have already conducted an intranasal safety study in the
Netherlands.
In
this regard, 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.
Today,
over 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 Post-COVID
Conditions
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
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 conditions. As of June 30,
2022, there were 11 patients enrolled in this open-label expanded
access treatment protocol (including three patients with
Post-COVID-19 Conditions). To date, there have been five such
Post-COVID patients treated. In July 2022, AIM reported positive
preliminary results based on data from the first four Post-COVID
Condition patients enrolled in the study. The data show that, by
week 12, compared to baseline, there was what the investigators
considered a clinically significant decrease in fatigue-related
measures.
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 (to 2026) for severe 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 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). 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. Ampligen represents the first
drug in the class of large (macromolecular) dsRNA molecules to
apply for NDA review. 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 and Post-COVID
conditions.
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. In September 2019, we
received clearance from the FDA to ship Ampligen to Argentina for
the commercial launch and subsequent sales. In June 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.
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 and
again in 2022. At this time, we do not plan on passing this
adjustment along to the patients in this program. 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 that
we refer to as Post-COVID conditions. As of June 30, 2022, there
are 11 patients enrolled in this open-label expanded access
treatment protocol (including three Post-COVID-19 patients). To
date, there have been five such Post-COVID patients treated. In
July 2022, AIM reported positive preliminary results based on data
from the first four Post-COVID Condition patients enrolled in the
study. The data show that, by week 12, compared to baseline, there
was what the investigators considered a clinically significant
decrease in fatigue-related measures.
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 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, and again for an additional period of 12
months on May 20, 2022.
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 HollisterStier. 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 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 active and in-process fill and finish
capacity.
Immuno-Oncology
The
potential of Ampligen as an immuno-oncology therapeutic has been a
major focus of AIM since our 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.
Multiple
Ampligen clinical trials are underway or recently completed 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 include:
|
● |
Advanced
Recurrent Ovarian Cancer |
|
○ |
Results
of the Phase 1 portion of a Phase 1/2 study of intraperitoneal
chemo-immunotherapy in advanced recurrent ovarian cancer were
published in the American Association for Cancer Research
publication, Clinical Cancer Research (Clin Cancer Res January 19,
2022 DOI: 10.1158/1078-0432.CCR-21-3659). The study results
represent an important extension of prior studies using human tumor
explants that showed Ampligen’s potentially important role as a
TLR3 agonist acting synergistically with high-dose IFNα and
celecoxib to selectively enhance Teff cell-attractants while
suppressing Treg-attractants in the tumor microenvironment with a
concomitant increase in the Teff/Treg ratio. The importance of
boosting the Teff/Treg ratio in the tumor microenvironment is that
it is associated with the conversion of ‘cold’ tumors into ‘hot’
tumors, which have an increased sensitivity to chemo-immunotherapy
and an improved chance of showing tumor regression. The Phase 1
portion was designed to establish intraperitoneal safety. The Phase
2 portion of the study is planned to be conducted in the future.
https://clinicaltrials.gov/ct2/show/NCT02432378 |
|
○ |
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. We
announced interim data from the study demonstrating that
evidence of increased biomarkers associated with T cell chemotaxis
and cytolytic function was seen when combining Ampligen,
pembrolizumab and cisplatin. Increases of these biomarkers in the
tumor microenvironment have been correlated with favorable tumor
responses. Interim results announced March 2022 detailed an
observed clinical response rate of 61% includes two complete and
three partial tumor responses, plus three patients with stable
disease among the 13 evaluable patients. An important priority will
be to confirm these findings through continuing to enroll patients
onto this study. https://clinicaltrials.gov/ct2/show/NCT03734692 |
In
March 2021, we were granted a patent by the Netherlands Patent
Office with granted patent claims that include, but are not limited
to, the use of Ampligen as a combination cancer therapy with
checkpoint blockade inhibitors (e.g. pembrolizumab, nivolumab).
Interim data from an investigator-initiated, Phase 2, single-arm,
efficacy/safety trial demonstrated that evidence of increased
biomarkers associated with T cell chemotaxis and cytolytic function
was seen when combining Ampligen, pembrolizumab and cisplatin. It
is critical to note that increases of these biomarkers in the tumor
microenvironment have been correlated with favorable tumor
responses. All told, the study has seen an Objective Response Rate
(ORR) 38.5%; a study of
pembrolizumab alone in the treatment of advanced recurrent ovarian
cancer found ORR of 8.1% and 9.9% across two cohorts. The
positive data makes this patent have heightened potential. Similar
patents are pending in other counties.
|
● |
Stage
4 Metastatic Triple Negative Breast Cancer - Phase 1 study of
metastatic triple-negative breast cancer using chemokine modulation
therapy, including Ampligen and pembrolizumab. Eight patients were
enrolled and 6 patients were evaluable. https://www.clinicaltrials.gov/ct2/show/NCT03599453.
The key findings announced April 2022 included: |
|
○ |
The
pre-determined primary endpoint of efficacy was met (increase in
CD8 in TME). |
|
○ |
Uniform
increase of immune markers upon treatment was observed: CD8 mRNA
(6.1-fold; p-0.034), GZMB mRNA (3.5-fold; p=0.058), ratios of CD8
/FOXP3 and GZMB/FOXP3 (5.7-fold; p=0.036, and 7.6-fold; p=0.024
respectively), thus successfully meeting the pre-determined primary
endpoint in the study (increase in CD8 in TME). |
|
○ |
In
addition, an increase in CTL attractants CXCL10 (2.6-fold; p=0.104)
and CCL5 (3.3-fold; p=0.019) was observed. In contrast, Treg marker
FOXP3 or Treg attractants CCL22 or CXCL12 were not
enhanced. |
|
○ |
Three
patients had stable disease lasting 2.4, 2.5 and 3.8 months, as of
data cut off September 1, 2021. |
|
○ |
An
additional patient (non-evaluable) had a partial response (breast
tumor autoamputation) with massive tumor necrosis in the post-CKM
biopsy. |
● |
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; recruitment has been
completed; 19 patients were enrolled and 12 patients were evaluable
for the primary endpoint https://clinicaltrials.gov/ct2/show/NCT03403634.
The key findings announced April 2022 included: |
|
○ |
The
study’s primary endpoint was met, evidenced by increased CD8a
expression post-treatment (p=0.046). |
|
|
|
|
○ |
Saw
increase in the CD8a/CD4 (p=0.03), CD8a/FOXP3 (p<0.01) and
GZMB/FOXP3 (p<0.01) ratios. |
|
|
|
|
○ |
The
expression of CTL-attracting chemokines CCL5 (p=0.08), CXCL9
(p=0.05), and CXCL10 (p=0.06) were increased, while expression of
the Treg/MDSC attractant CXCL12 (p=0.07) was decreased
post-treatment. |
|
|
|
|
○ |
Median
OS was 10.5 (90% CI 2.2-15.2) months, and the median PFS was 1.5
(90% CI 1.4, 1.8) months. |
|
|
|
|
○ |
No
tumor responses were seen. The treatment was well tolerated. Of all
enrolled patients (N=19), adverse events were noted in 74% of
patients, with the most common being fatigue (58%). Grade 3 or
higher adverse events were rare (5%). |
|
● |
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. Interim results
announced in March 2022 detailed data gathered from evaluating
paclitaxel’s impact on chemokine production in the human breast
tumor microenvironment (TME) and the ability of a chemokine
modulatory regimen (CKM) of Ampligen and Interferon-α to mitigate
potentially undesirable aspects of taxane chemotherapy. Based on
the results, we believe that the combination chemokine modulatory
regimen including Ampligen has the potential to mitigate
undesirable aspects of taxane chemotherapy. Investigators are
currently analyzing data. https://clinicaltrials.gov/ct2/show/NCT04081389 |
The
below Ampligen clinical trials are in the planning
stages:
|
● |
Phase
2 Pancreatic Cancer Trial - The AMP-270 clinical trial is
planned to be a randomized, open-label, controlled, parallel-arm
study with the primary objective of comparing the efficacy of
Ampligen versus a no treatment control group following FOLFIRINOX
for subjects with locally advanced pancreatic adenocarcinoma.
Secondary objectives include comparing safety and tolerability. The
AMP-270 is expected to enroll approximately 90 subjects in up to 30
centers across the U.S. and Europe. The Buffett Cancer Center at
the University of Nebraska Medical Center (UNMC) and Erasmus MC in
the Netherlands are expected to be the primary study sites. In
March 2022, we received notification from the FDA that the Clinical
Hold was released and cleared, meaning that we are now able to
proceed with the study. In April 2022, we executed a work order
with Amarex to manage the clinical trial. |
|
|
|
|
● |
Refractory
Melanoma — Phase 2 study planned to 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). |
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 initially received treatment
with Ampligen immuno-oncology therapy under the EAP program at
Erasmus MC in the Netherlands; that initial program has since
continued to expand and proceed with additional patients to be
treated with Ampligen Supervised by Prof. C.H.J. 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 are working with our Contract
Research Organization, Amarex Clinical Research LLC, to seek FDA
“fast-track.” We have applied for fast-track status; have received
denials to date; and are currently working through the FDA process
to provide all the materials and information required to achieve
fast-track status. The IND authorization to proceed with the Phase
2 pancreatic cancer clinical trial has been received with potential
sites in the Netherlands at Erasmus MC under Prof. C.H.J. van
Eijck, and also at major cancer research centers in the United
States such as The Buffett Cancer Center at the University of
Nebraska Medical Center (UNMC).
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
October 2021, we and Amarex submitted an IND application with the
FDA for a planned Phase 2 study of Ampligen as a therapy for
locally advanced or metastatic late-stage pancreatic cancer. In
December 2021, the FDA responded with a Clinical Hold on the
proposed study. We submitted our response to the FDA in February
2022. In March 2022, we received notification from the FDA that the
Clinical Hold was released and cleared, meaning that we are now
able to proceed with the study. The AMP-270 clinical trial is
planned to be a randomized, open-label, controlled, parallel-arm
study with the primary objective of comparing the efficacy of
Ampligen versus a no treatment control group following FOLFIRINOX
for subjects with locally advanced pancreatic adenocarcinoma.
Secondary objectives include comparing safety and tolerability. We
plan to enroll approximately 90 subjects across up to 30 centers in
the U.S. and Europe. The Buffett Cancer Center at the University of
Nebraska Medical Center (UNMC) and Erasmus MC in The Netherlands
are expected to be the primary study sites. In April 2022, we
executed a work order with Amarex to manage the Phase 2 clinical
trial. In March 2022, we announced the publication of positive data
in a manuscript titled, “Rintatolimod (Ampligen®) enhances
numbers of peripheral B cells and is associated with longer
survival in patients with locally advanced and metastasized
pancreatic cancer pre-treated with FOLFIRINOX: a single-center
named patient program,” in Cancers Special Issue:
Combination and Innovative Therapies for Pancreatic Cancer. In
the single-center, named-patient program, patients with locally
advanced pancreatic cancer (LAPC) or metastatic disease were
treated with Ampligen for 6 weeks, at 2 doses per week with 400 mg
per infusion. The study found that Ampligen improved the median
survival of these patients. The study’s primary endpoints were the
Systemic Immune-Inflammation Index (SIII), the Neutrophils to
Lymphocyte Ratio (NLR), and absolute counts of 18 different
populations of circulating immune cells as measured by flow
cytometry. Secondary endpoints were progression-free survival (PFS)
and overall survival (OS). The median overall survival in the
Ampligen group was 19 months, compared to a historical control
group and subgroup (7.5 and 12.5, respectively) that did not
receive Ampligen.
Also
in March 2022, we announced that study data evaluating the direct
effects of Ampligen on human pancreatic ductal adenocarcinoma
(PDAC) cells was accepted for presentation at the 15th Annual
International Hepato-Pancreato-Biliary Association World Congress
in New York, NY. For the study, three PDAC cell lines (CFPAC-1,
MIAPaCa-2, and PANC-1) were treated with various concentrations of
Ampligen and their corresponding vehicle control. The proliferation
and migration effects were examined using in-vitro assays and the
molecular effect was examined by targeted gene expression
profiling. Additionally human PDAC samples were used to validate
the expression of toll-like receptor 3 (TLR3) by
immunohistochemistry. Results from the study demonstrated Ampligen
decreased the proliferation and migration ability of CFPAC-1 cells.
In addition, it decreased the proliferation of MIAPaCa-2 cells and
the migration of PANC-1 cells. However, it did not have a dual
effect in MIAPaCa-2 and PANC-1 cells. Interestingly, TLR3 was
highly expressed in CFPAC-1 cells, low expressed in MIAPaCa-2 and
not expressed in PANC-1. Gene expression analysis revealed the
upregulation of interferon-related genes, chemokines, interleukins
and cell cycle regulatory genes. The heterogeneity of TLR3
expression was confirmed in human PDAC samples. Based on these
results, treating pancreatic cancer with Ampligen may have a direct
anti-tumor effect in pancreatic cancer cells expressing
TLR-3.
Myalgic
Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS)
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.
As
noted above in Overview; General; Ampligen as a treatment for
ME/CFS and Post-COVID Conditions, 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 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
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.
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.
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.sciencedirect.com/science/article/pii/S0042682209005832)
found that, instead of 100% mortality, there was 100% protective
survival using Ampligen. |
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.
In
April 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. Due to
continuing delays and other obstacles related to importing Ampligen
to China, we ended our contract with Smoore on August 10,
2022.
In
August 2020, we contracted 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, in February 2020 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”). While
this relationship is currently inactive, we remain open to
utilizing ChinaGoAbroad if and when an opportunity
arises.
In
May 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 alpha-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 alpha but will receive
best available care. We are a financial sponsor of the study and
will provide Ampligen at no charge for this study.
In
July 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 alpha, 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).
In November 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.
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, but who
still demonstrate chronic fatigue-like symptoms. Patients in the
trial are treated with our flagship pipeline drug Ampligen. In
January 2021, we commenced with the treatment of the first
previously diagnosed COVID-19 patient with long-COVID symptoms
(i.e., Long Hauler) also known as Post-COVID Conditions in the
AMP-511 study. Enrollment of post-COVID patients continues in the
study.
In
November 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. |
In
January 2021, we entered into a Sponsor Agreement with CHDR 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 Final Safety Report
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 was to be conducted
by hVIVO, a subsidiary of Open Orphan plc. We submitted a study
protocol to the Oxford Research Ethics Committee (“REC”)/Medicines
and Healthcare Regulatory Agency (“MHRA”) in September 2021. The
REC approved the protocol, but the MHRA provided a response
outlining areas of the submission where it requires additional
information. A response was submitted to MHRA in October 2021. The
REC provided a “favorable opinion” to proceed, but the MHRA issued
a Non-Acceptance response in November 2021. A full revised
application was resubmitted in December 2021. The MHRA issued
Grounds for Non-Acceptance and requested additional data before
moving forward. As the request would require us to first conduct an
animal experiment that we believe would take at least six months to
complete, we determined that continuing with the HCT application
process would not be a prudent use of our resources, so we
terminated our agreement with hVIVO and officially notified the
MHRA of our decision to withdraw our application. As the MHRA’s
Grounds for Non-Acceptance had already been issued, our withdrawal
was technically recognized as a rejection of the proposed
study.
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 conditions. The people suffering from
Post-COVID conditions, 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 Post-COVID conditions being treated
with Ampligen in the ongoing AMP-511 Expanded Access Program have
reported improvements in fatigue symptoms. Similarly, in ME/CFS,
data supports the claim that Ampligen improves fatigue symptoms.
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.
In
addition to securing these two provisional patent applications, we
also moved forward with proposed studies in these areas and with
Pre-Investigational New Drug Applications in September 2021. 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 Post-COVID conditions
(originally referred to as Post-COVID Cognitive Dysfunction (PCCD)
and being revised to Post-COVID conditions). 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. In November 2021, the FDA
responded that there was insufficient information to support the
proposed indication of Post-COVID Cognitive Dysfunction (PCCD). We
are working with Amarex to revise the study and resubmit it to the
FDA as Post-COVID conditions.
In
September 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 to respond 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.
In
June 2022, we announced that the Netherlands Patent Office
(Octrooicentrum Nederland) had issued Patent No. 2027383 – a
utility patent – covering Ampligen® (rintatolimod) and other AIM
developed dsRNA products for use in the prevention or treatment of
COVID-19, with a base patent term extending until 2041.
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 Injection 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 diminished.
In
April 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. The research is active and ongoing.
In
May 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.
Alferon
N Injection®
Alferon
N Injection is the registered trademark for our injectable
formulation of natural alpha interferon. Alferon N Injection 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 N Injection 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).
MANUFACTURING
ANMAT in Argentina approved Ampligen for commercial distribution
for the treatment of 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. In September 2019, we
received clearance from the FDA to ship Ampligen to Argentina for
the commercial launch and subsequent sales. In June 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).
Following
our approval in Argentina, in 2017 we engaged Jubilant
HollisterStier (“Jubilant”) to be our authorized CMO for 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, Jubilant manufactured two
more lots of Ampligen in December 2019 and January 2020. 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 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. We are prepared to initiate the production of additional
Ampligen when and if needed.
In May 2021, we exercised our option to re-purchase the New
Brunswick manufacturing facility, pursuant to the terms of the
March 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. Then, on
March 3, 2022, we entered into an Agreement of Sale and Purchase
with Acellories, Inc. as purchaser pursuant to which we will sell
our property for $3.9 million; AIM will keep some space
specifically for its Alferon activity. The Closing Date was
extended to August 31, 2022, subject to AIM’s right to further
extend the Closing Date as set forth in Section 4(b) of the
Purchase Agreement.
In
June 2022 we entered into a lease agreement with the New Jersey
Economic Development Authority for a 5,210 square-foot,
state-of-the-art R&D facility at the NJBC, primarily consisting
of two separate laboratory suites. The lease commences on July 1,
2022, and runs through August 31, 2027, but can be extended for an
additional five-year period. The facility is AIM’s operations,
research and development center.
Our
business plan calls for the utilization of one or more CMO to
produce Ampligen API. While we believe we have sufficient Ampligen
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, in April 2021, we approved a proposal
from 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
utilizing Polysciences’s expertise to refine our approach to
polymer production. Additionally, we continue to be open to the
possibility of agreements with other CMOs, so as to create
redundancy and to meet the potential need for larger quantities of
API.
Our
second product, Alferon N Injection, 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 N Injection 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 New Brunswick facility
has FDA approval under the Biologics License Application (“BLA”)
for Alferon N Injection, and we intend to maintain a certain amount
of space at the to-be-sold facility, we will need the FDA’s
approval to release commercial product once we have identified our
new manufacturing approach and submitted satisfactory stability and
quality release data; the FDA has conducted any required
inspections; and the FDA has approved our new manufacturing
process. Currently, we are not manufacturing Alferon N Injection
and there is no definitive timetable to resume
production.
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 August 2021, the
ANMAT granted a five-year extension to a previous approval to sell
and distribute Ampligen to treat severe CFS in Argentina. This
extends the approval until 2026.
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, and again for an additional 12 months on
May 20, 2022.
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. A request to extend the approval beyond 2022 has been
filed and is under review. 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
January 2017, the EAP through our agreement with myTomorrows
designed 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 the
Territory and will manage all EAP activities relating to the
pancreatic cancer extension of the program.
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. We also are seeking other potential
sources.
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 November 2021, we entered into a
signed Letter of Agreement with myTomorrows for the delivery of
Ampligen for the treatment of up to an additional 5 pancreatic
cancer patients. In March 2022, we entered into a signed Letter of
Agreement with myTomorrows for the delivery of Ampligen for the
treatment of up to an additional 10 pancreatic cancer
patients.
401(k) Plan
We
have a defined contribution plan, entitled the AIM ImmunoTech
Employees 401(k) Plan and Trust Agreement (the “401(k) Plan”). Our
full-time employees are eligible to participate in the 401(k) Plan
following one year of employment. Subject to certain limitations
imposed by federal tax laws, participants are eligible to
contribute up to 15% of their salary (including bonuses and/or
commissions) per annum. Participants’ contributions to the 401(k)
Plan may be matched by us at a rate determined annually by the
Board of Directors.
Each
participant immediately vests in his or her deferred salary
contributions, while our contributions will vest over one year. A
6% matching contribution by us was reinstated effective January 1,
2021. For the period ending June 30, 2022 we made $72,000 in
contributions and for the period ending December 31, 2021 $139,000
contributions were made.
New Accounting Pronouncements
See
“Note 10: Recent Accounting Pronouncements”.
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,
2021
RESULTS
OF OPERATIONS
Three months ended June
30, 2022 versus three months ended June 30,
2021
Net Loss
Our
net loss was approximately $4,851,000 and $5,876,000 for the three
months ended June 30, 2022, and 2021, respectively, representing a
decrease in loss of approximately $1,025,000 or 18%. This decrease
in loss was primarily due to the following:
|
● |
a
decrease of the quarterly revaluation of certain redeemable
warrants of $4,000; |
|
● |
a
decrease in gain from sale of Income tax operating of
$56,000; |
|
● |
a
decrease in interest expense and finance cost of
$2,720,000; |
|
● |
a
decrease in production costs of $210,000; offset by |
|
● |
an
increase in loss on investments, net of $470,000; |
|
● |
an
increase in interest and other income of $28,000; |
|
● |
an
increase in general and administrative expenses of
$36,000; |
|
● |
an
increase in research and development expenses of
$1,158,000. |
Net
loss per share was $(0.10) and $(0.12) for the three months ended
June 30, 2022, and 2021, respectively. The weighted average number
of shares of our common stock outstanding as of June 30, 2022, was
48,034,100 as compared to 47,832,997 as of June 30,
2021.
Revenues
Revenues
from our Ampligen® Cost Recovery Program were $30,000 and $23,000
for the three months ended June 30, 2022 and 2021, respectively.
The change was due primarily to the increase in drug utilization
for the AMP-511 study for the two sites that are open and treating
patients.
Production Costs
Production costs were approximately $69,000 and $279,000,
respectively, for the three months ended June 30, 2022, and 2021,
representing a decrease of $210,000 in production costs in the
current period. The decrease was due primarily to a reduction in
depreciation for the building that is held for sale.
Research and Development Costs
Overall
Research and Development (“R&D”) costs for the three months
ended June 30, 2022, were approximately $2,475,000 as compared to
$1,317,000 for the same period a year ago, reflecting an increase
of approximately $1,158,000. The primary reason for the increase in
research and development costs was largely due to an increase in
clinical trials expense of $1,092,000 of which $1,026,000 is with
Amarex, consulting fees of $11,000, salaries and employee benefits
of $68,000; net with a decrease of expenses for outside consulting
of $35,000.
General and Administrative Expenses
General
and Administrative (“G&A”) expenses for the three months ended
June 30, 2022, and 2021, were approximately $2,181,000 and
$2,145,000, respectively, reflecting an increase of approximately
$36,000. The increase in G&A expenses during the current period
was mainly due to an increase in insurance expense of $54,000 and
professional fees of $242,000, offset by a decrease in salaries,
benefits, and other compensation of $44,000, travel expenses of
$15,000 and stock compensation of $206,000.
Loss on Investments, net
Loss on investments for the three months ended June 30, 2022, and
2021 was approximately $470,000 and $0 respectively. This loss for
the three months ended June 30, 2022 was due to the change in fair
value of equity investments.
Interest and Other Income
Interest
and other income for the three months ended June 30, 2022, and 2021
was approximately $79,000 and $51,000, respectively. This
represents a net increase of approximately $28,000.
Interest Expense and Other Finance Costs
Interest
and other finance costs decreased $2,720,000 primarily due to the
extinguishment of debt and notes payable of $2,701,000 in the three
months ended June 30, 2021. We had no debt in the three months
ended June 30, 2022.
Redeemable Warrants
The
quarterly revaluation of certain redeemable warrants resulted in a
non-cash adjustment to the redeemable warrants liability amounted
to a gain of $3,000 for the three months ended June 30, 2022,
compared to a gain of approximately $7,000 for the three months
ended June 30, 2021 (see “Financial Statements: Note 11: Fair
Value” for the various factors considered in the valuation of
redeemable warrants).
Gain from sale of income tax operating losses
The
quarterly income tax benefit for the three months ended June 30,
2022 amounted to a gain of approximately $232,000 compared to a
gain of $289,000 for the three months ended June 30, 2021 due
primarily to a change in the deferred tax asset recorded for the
New Jersey NOL to be sold.
Six months ended June 30,
2022 versus six months ended June 30,
2021
Net Loss
Our
net loss was approximately $8,671,000 and $9,455,000 for the six
months ended June 30, 2022, and 2021, respectively, representing a
decrease in loss of approximately $784,000 or 8%. This decrease in
loss was primarily due to the following:
|
● |
a
decrease in interest expense and finance cost of
$2,768,000; |
|
● |
a
decrease in general and administrative expenses of
$3,000; |
|
● |
a
decrease in production costs of $370,000; |
|
● |
a
decrease in gain from sale of Income tax operating of $47,000;
offset by |
|
● |
an
increase in loss on investments, net of $1,404,000; |
|
● |
an
increase of the quarterly revaluation of certain redeemable
warrants of $63,000; |
|
● |
an
increase in interest and |