PLANTATION, Fla., Jan. 25 /PRNewswire-FirstCall/ -- The following is Part II of a letter from Charles A. Rice, President and CEO of Viragen, Inc. and Viragen International, Inc. . In addition to these comments, stockholders and potential investors are referred to: the Company’s SEC filings, including Form 10-K and Form 10-Q (Annual and Quarterly Reports); press releases; website; and other publicly disseminated information, which is available free of charge upon request by contacting the Company. Part I of Mr. Rice’s letter was issued yesterday.
Dear valued Stockholder,
In Part I of my letter, I focused on our plans for Multiferon(R), which will remain a priority for the Company due to its potential to generate licensing and sales revenues in the immediate term. Now I will review our plans for our anti-cancer candidates and the OVA(TM) System.
VG102: Anti-CD55 Antibody
In April 2005, we entered into an exclusive global license agreement with Cancer Research Technology (CRT), the technology transfer arm of Cancer Research UK, the largest not-for-profit cancer research organization in the United Kingdom.
VG102 is an antibody to the CD55 antigen, which is over-expressed on up to 80% of solid tumors, and may play an important role in hematological cancers as well. The CD55 antigen acts as a protective mechanism, as it effectively blocks the human body’s immune system from destroying cancer cells. VG102 binds to the antigen in such a way that reduces this protective mechanism.
Because of its expected versatility in targeting many cancers, we continue to receive many scientific and licensing inquiries related to VG102. We are evaluating such early-stage opportunities, with the understanding that this antibody’s value should increase substantially, to the extent we report additional positive in vitro and in vivo data, supporting its progress into human clinical trials. Such studies are currently ongoing with reports expected throughout the latter half of 2007. Although early in development, VG102 truly has “blockbuster” potential as an anti-cancer therapeutic, whether used alone or in combination therapy. It is critical that we move this candidate through development as effectively and expeditiously as possible.
The next milestone expected will be results reported from ongoing binding specificity and efficacy studies later in 2007. If successful, we will then advance into animal models to demonstrate efficacy in comparison to a positive and negative control and to identify a most likely first indication for the product. Toward the end of 2007, we would hope to be ready to request scheduling of preliminary meetings with regulatory agencies, including the U.S. Food and Drug Administration (FDA), for the purpose of identifying appropriate toxicology and clinical studies necessary for registration.
Again, the market opportunity for VG102 may very well eclipse all of our other product candidates, so this is among our highest priorities. We expect to raise the visibility of this program this year, as we anticipate more frequent public communications, including press releases and presentations at prominent cancer research conferences and biotechnology industry meetings.
VG101: Anti-GD3 (R24) Antibody:
We have been working with Memorial Sloan-Kettering Cancer Center, as part of a Collaborative Research Agreement, to further develop a monoclonal antibody known in the literature as “R24" for the treatment of patients with Stage IV melanoma. Viragen’s obligation under this agreement has been to develop humanized versions of the antibody that will be more suitable than the original mouse form, for use as a human therapeutic. One of these humanized VG101 constructs was expressed using our OVA(TM) System technology.
Under this research agreement, Viragen has an exclusive option to license this antibody for commercialization, and that option expires in February 2007. Due to this imminent deadline, I will defer providing a detailed update on VG101 until a final decision on whether to exercise this option has been made in the coming weeks.
OVA(TM) System: Avian Transgenic Biomanufacturing
The concept of efficiently and cost-effectively producing therapeutic proteins in the eggs of transgenic chickens is certainly revolutionary, and the OVA(TM) System is receiving much attention with the successful production of three functional protein-based drugs in hen’s eggs thus far. We continue to work closely with our partners at Roslin Institute, creators of “Dolly the Sheep”, to make this vision a reality. Earlier this week, we reported the recovery of our third OVA(TM)-expressed protein, interferon alpha-2a, and we expect to report on a fourth protein later this year.
With each OVA(TM)-expressed protein, we are evaluating the consistency, quality and quantities of each product candidate expressed over multiple generations of hens. These data will help us determine which types of proteins are best suited for this manufacturing platform. The next important step for our development plan will be to select a first product candidate that we will take into production and into the registration process.
While there is considerable industry and public interest in the OVA(TM) System, this is still pioneering science with much to prove. It appears likely that we should have an OVA(TM)-expressed product candidate at a more advanced stage in clinical development, at least through the initial regulatory processes in the U.S. or the EU, in order to generate realistic licensing opportunities. This will require significant additional funding and a number of years of work by our avian transgenics team. However, we will strive to choose a first commercial product candidate that permits us to take advantage of “expedited” regulatory processes that may be available to us, so that the overall time required can be reduced.
VG106: A Novel Anti-Cancer Therapeutic
From our own databases, Viragen scientists have identified and filed patent applications on potential new products based on our internal research. The first of these, VG106, is the subject of a number of early pre-clinical studies, and these data have been accepted for presentation at a major upcoming cancer research conference. We are unable at this time to disclose the identity of this product or the results, due to restrictions imposed on presentation materials by this particular research organization. We will report much more on this important new development in the coming months.
In Closing:
The Management of Viragen expresses our sincere thanks to our stockholders, for your patience and perseverance, even in the face of dissatisfaction with our share valuation and past sales results. We have positioned our projects and resources in expectation that 2007 and future years will yield vastly improved results.
Our success is dependent upon our ability to secure adequate funding to support our activities. We are exploring various alternatives including financings, grants and new strategic initiatives. Additionally, we aim to execute a funding strategy that will return Viragen to compliance with the Amex’s maintenance criteria, as we must do so by March 20, 2007 to remain compliant with the plan we submitted to the Amex. While we intend to become compliant by this deadline, our ability to do so will be dependent upon the availability of funding on satisfactory terms and other factors outside of our control, and we cannot provide assurances that our efforts in this regard will be successful.
Our plans are ambitious, but also flexible, so that we can react quickly should changes be necessary, and we are highly confident that we will be able to build the kind of Company our stockholders can be proud of.
Sincerely yours, Charles A. Rice President and CEO About Viragen, Inc.:
With international operations in the U.S., Scotland and Sweden, we are a bio-pharmaceutical company engaged in the research, development, manufacture and commercialization of therapeutic proteins for the treatment of cancers and viral diseases. Our product and product candidate portfolio includes: Multiferon(R) (multi-subtype, human alpha interferon) which is uniquely positioned in valuable niche indications, such as high-risk malignant melanoma, other niche cancer indications and selected infectious diseases; VG101, a humanized monoclonal antibody that binds selectively to an antigen over-expressed on Stage IV malignant melanoma tumors; and VG102, a highly novel humanized monoclonal antibody that binds selectively to an antigen that is over-expressed on nearly all solid tumors. We are also pioneering the development of the OVA(TM) System (Avian Transgenics), with the renowned Roslin Institute, the creators of “Dolly the Sheep”, as a revolutionary manufacturing platform for the large-scale, efficient and economical production of human therapeutic proteins and antibodies, by expressing these products in the egg whites of transgenic hens.
For more information, please visit: http://www.Viragen.com Viragen, Inc. Corporate Contact: Douglas Calder, Director of Communications Phone: (954) 233-8746; Fax: (954) 233-1414 E-mail: dcalder@viragen.com
The foregoing letter contains forward-looking statements that can be identified by such terminology such as “believes,” “expects,” “potential,” “plans,” “suggests,” “may,” “should,” “could,” “intends,” or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. In particular, management’s expectations regarding future research, development and/or commercial results could be affected by, among other things, uncertainties relating to clinical trials and product development; availability of future financing; unexpected regulatory delays or government regulation generally; the success of third- party marketing efforts; our ability to retain third-party distributors; our ability to obtain or maintain patent and other proprietary intellectual property protection; and competition in general. Forward-looking statements speak only as to the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
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CONTACT: Douglas Calder, Director of Communications of Viragen, Inc.,+1-954-233-8746, or Fax, +1-954-233-1414, or dcalder@viragen.com
Web site: http://www.viragen.com//
