PharmaGap Updates Lead Drug Status and Potential Sale
OTTAWA, June 5, 2012 /CNW/ - PharmaGap Inc. (TSXV: GAP) (OTC.BB: PHRGF) ("PharmaGap" or "the Company") today provides an update on the current developmental status of its lead drug program.
Animal studies completed in January 2012 tested the PharmaGap drug formulations in head to head comparisons against Carboplatin using ovarian cancer cell lines OCC-1, A2780cp, and ES-2 implanted into mouse subjects. These tests indicated GAP-107B8 reduced malignant ascites up to 88% compared to the Carboplatin control at 42%. Tumour burden was reduced by 62% in the OCC-1 model using GAP-107B8 compared with Carboplatin control at 72% reduction. The company expects that future test protocols in animals with refined dosing schedules can improve on these results.
However, while the test results provided strong indications of efficacy for the GAP-107B8 formulations, conditions of the control groups within the test were inadequate to generate statistical significance. To file for Clinical Trial Approval, the Company must repeat efficacy studies to demonstrate a statistically significant effect of the final lead drug product. The Company must produce clinical-grade drug product in amounts sufficient to complete final toxicology testing. For clinical trials the Company must generate and compile data and documents required for the application and make arrangements with clinics in Canada and the US and contract research organization to implement the trials.
Several significant investment funds invest only in private companies at this stage of development. As a public company, PharmaGap receives 10% cash refund of eligible R&D expenses under the Ontario SR&ED Program. These costs, if incurred by a private company, would receive 41.5% total cash refund under Federal and Ontario SR&ED Programs. Taken together, these factors indicate the sale of the lead drug by PharmaGap to a private company under satisfactory terms will provide enhanced value to PharmaGap shareholders. An Independent Committee of the Board of Directors of PharmaGap has concluded that the highest value potential for its lead drug technology can now be realized under the licensing proposal from Clinical Value Corporation ("CVC") the details of which were recently announced to the market.
The Board of Directors has accepted the recommendation of the Independent Committee for approval of the CVC proposal subject to receiving a fairness opinion and advice of independent legal counsel. (Mr. Bryden, who initially owns 100% of CVC and is Chairman of PharmaGap declared his interest in the transaction and did not participate in the deliberation or vote of the Board). Following receipt of the fairness opinion, the proposal shall be presented to and will be subject to a vote by shareholders excluding shares controlled by Mr. Bryden.
Under the CVC proposal, CVC will be granted a right of first refusal on any newly developed pipeline products (i.e. outside of the licensed technology) generated by PharmaGap in the future, representing additional potential value for PharmaGap shareholders. Under the CVC proposal, CVC will provide financial support for the pipeline research for a three year period at the rate of up to $40,000 per month.
About PharmaGap Inc.
PharmaGap Inc. (TSX-V: GAP), based in Ottawa, ON, is a biotechnology company with a core focus on developing novel peptide therapeutics for the treatment of cancer. PharmaGap's GAP-107B8 is a novel peptide drug that has been shown to be effective in numerous cancer types, including chemo-resistant cancers, in vitro. For more information on PharmaGap please visit the Company's website at www.pharmagap.com.
Forward Looking Statements
This news release contains certain statements that constitute forward-looking statements as they relate to the Company and its management. Forward-looking statements are not historical facts but represent management's current expectations of future events, and can be identified by words such as "believe", "expects", "will", "intends", "plans", "projects", "anticipates", "estimates", "continues", and similar expressions. Although management believes that expectations represented in such forward-looking statements are reasonable, there can be no assurance that they will prove to be correct.
By their nature, forward-looking statements include assumptions and are subject to inherent risks and uncertainties that could cause actual future results, conditions, actions or events to differ materially from those in the forward-looking statements. If and when forward-looking statements are set out in this news release, PharmaGap will also set out the material risk factors or assumptions used to develop the forward-looking statements. Except as expressly required by applicable securities laws, the Company assumes no obligation to update or revise any forward-looking statements. The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: results of ongoing product testing and development; regulatory approvals required to complete development of products; ability to manufacture product at quality and scale for human use on an economically sound basis; patient reimbursement by private and public health insurance programs; unintended side effects of products; competitive products; product liability; intellectual property; reliance on key personnel; risks of future legal proceedings; income tax matters; availability and terms of financing; distribution of securities; effect of market interest rates on price of securities, and potential dilution.
Note: Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. No Securities Commission or other regulatory authority having jurisdiction over PharmaGap has approved or disapproved of the information contained herein. This release contains forward looking statements that may not occur or may change materially.
Posted: June 2012