CEO Letter, April, 2016
Greetings from the CEO and staff at Premier Biomedical, Inc.
There have been significant developments since I last, communicated with you, and I will proceed immediately into the exciting developments.
COMPANY BALANCE SHEET & SHARE STRUCTURE.
- Our debt obligation to Redwood Management, LLC has been cut from $1.6 Million to $525,000 via amendment to the loan agreement. We are grateful to Redwood for having stood behind us and their ongoing support of our company.
- Premier originally had five toxic loans at one time. These five toxic lenders sold BIEI stock down to a fraction of its value starting in June/July 2015 through October, 2015. Redwood is not one of these toxic lenders and their financial support has enabled us to get through this crisis period.
- Four of these toxic lenders have either been bought out or have already liquidated their convertible notes. One lender has refused a buy-out and has begun converting their note into stock. We contemplated legal action to force them to accept repayment, but decided that the legal costs would exceed the benefit. We expect them to conclude their conversions in the near future
- Reducing the future debt obligation will significantly benefit BIEI’s balance sheet, shareholder equity and the long-term share price. In the near term, we may have to take some future short term loans to continue our R&D programs and patent work, but, we have been doing everything in our power to develop a new revenue stream via a partnering strategy to minimize and/or mitigate, if possible, further dilution of the company’s stock. We cannot quote a specific date when our alternate revenue stream will become active, thus eliminating the need for dilutive borrowing.
- Our partnering strategy in Asia, Europe and North America requires up-front cash payments from potential partners to us to gain access to our technology products. These moves should benefit shareholder equity through the elimination of Premier’s debt structure.
- We fully expect to see the true intrinsic value of BIEI reflected in the share price once our newly patented treatments & drugs are marketed and begin saving lives around the world.
BRAZILIAN JOINT VENTURE
- We made application to the U.S. FDA in the third quarter of 2015 to certify our patented medication, Feldetrex™ to treat the symptoms of neuropathic pain, fibromyalgia, neuropathy, MS Symptoms, chemical and alcohol addiction.
- As part of our application, we supplied extensive data in the form of previous tests conducted by the University of Toronto as well as Stanford University verifying the safety of the principal ingredients in Feldetrex. Moreover, we supplied documentation that these same ingredients had been approved by the FDA some 70-80 years ago.
- The FDA thanked us for the thoroughness of our application, but ruled that the principal ingredients had not been tested in combination; therefore, we must conduct extensive laboratory and clinical tests on our unique combination. We received quotes from Clinical Research Organizations (CROs) that performs such studies, and the cost to conduct these tests in the U.S. was prohibitive. However, the cost estimate to conduct the exact same studies in Brazil, to the same standards as in the U.S., was estimated at less than one tenth the cost.
- The International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH) was established to bring drugs to market in a more resource-efficient manner. This allows testing to ICH guidelines in most countries to be used to support regulatory requirements in many other countries, including the US, Canada, Japan, Europe and many others.
- For the above reasons, we travelled to Brazil in August, 2015 and met with the officers of Auramedi, a large pharmaceutical firm headquartered in Sao Paulo. They demonstrated interest in potentially pursuing a joint venture to seek local testing and certification of selected PBI products as well as potentially manufacturing and marketing these products in Brazil and the rest of South America.
- Recent political events in Brazil, associated with their economic downturn, have slowed the negotiations between PBI and Auramedi. We have forwarded definitive documents outlining the principles of the proposed joint venture to them, and they have indicated that their counter-proposal will be sent to us by mid-April.
- Our original strategy was to implement the Brazilian JV, learn from the experience, and then proceed with other JV’s in other parts of the world. The unforeseen delays in implementing the Brazilian JV have caused us to revise our strategy and to now seek other JV’s in Asia, Europe, Africa, and the United States. More information on these efforts will follow.
ASIAN AND EUROPEAN JOINT VENTURES
- The potential Asian partner we initially contacted in late December has experienced problems in raising the necessary capital. We have decided to wait no longer and have proceeded with a search for other potential partners through a new team of agents.
- PBI has authorized a new team of agents in Asia affiliated with India and China to seek potential JV partners. One of the agents is also affiliated with a pharmaceutical firm in the U.K. Two of these agents have indicated that they have identified potential JV partners who have expressed interest in receiving proposed joint venture definitive documents from our attorney. We supplied these just a few days ago and are awaiting their response.
- The good news from this experience is that the question of which partner and which country can best initially certify our drugs through the regulatory process, and who can best manufacture and distribute our products, remains a decision left to the best option available, since we have made no prior commitments based on limited knowledge.
NORTH AMERICAN JOINT VENTURE
- Our patent on Feldetrex™ lists a potential connection to an ingredient that could not only increase the efficacy of our drug, but could be the basis for an ingredient in an entire series of pain killers globally. This potential ingredient would remove the addictive substance in certain prescription pain killers known as “Opioids”.
- Over 19,000 people died from pain killer addiction last year according to the Centers for Disease Control.
- We have been approached by an outside company in North America to investigate the potential formation of a joint venture to develop this specific new molecule. The proposal would exclude PBI’s other existing and future products and drugs as well as theirs. The specific agreement would pertain only to the new molecule to be developed as well as its derivatives.
- The proposal discussions thus far would place PBI as responsible for development of the technology with a yet-to-be-determined university under the sponsorship of the partner. This agreement would provide much needed R&D capital to PBI and could revolutionize the company. Due to a high degree of interest by the potential partner and the availability of capital, we expect this agreement to progress very rapidly with a goal of having a Letter of Intent signed by May, 2016.
ANTI-CANCER DRUG PROGRESS
- Two years ago, PBI, along with UTEP, our partner in R&D, demonstrated an anti-breast cancer antibody at the American Association for Cancer Research Conference held in San Diego on April 5-9, 2014.
- Our presentation consisted of experiments on 72 mice divided into three groups: 1) A control group with no remediation; 2) A chemo group that received relatively large doses of chemo on day #5 and day #11 with smaller doses of chemo in their water to simulate the typical doses of chemo given to human beings; and 3) A group that received our antibody at day #5. The results were stunning to say the least. Their pictures after the test period of 24 days are shown here.
- For a lot of technical reasons, that antibody was not patentable. As a benchmark, that antibody was demonstrated to block 36% of available CTLA-4 antigens (the cancer-causing material) in a laboratory experiment. We believe that the performance of that antibody approximately approached a current product marketed by Bristol Meyers Squibb with projected sales of $14 billion by 2018.
- In the intervening two years since that initial demonstration on 72 mice, we have been successful in developing a new antibody that has been demonstrated to be successful in blocking 98.9% of available CTLA-4 breast cancer antigens versus 36% with the prior antibody. A total of 90 mice were involved in this most recent experiment. The test was concluded at day #24, clearly demonstrating how our antibody was successful in eliminating the breast cancer that was previously injected in all mice at day #0. Moreover, and most astounding, subsequent attempts to re-inject breast cancer into the mice protected by our antibody demonstrated that these mice had become immune to breast cancer re-introduction!!
- A patent application on this remarkable breast cancer antibody drug has been filed.
- We have also developed antibodies against two other cancer antigens—PD-1 and BTLA.
- Following a previous press release regarding our anti-cancer developments, we received e-mails and telephone calls requesting more information about our developments from the heads of two of the largest pharmaceutical companies in the world. In order to protect our intellectual property until the patent is issued, we politely refused to convey any additional information that might jeopardize our position.
- Our most recent anti-breast cancer antibody test results will be presented at the AACR Conference to be held April 16-20, 2016 in New Orleans. We have been advised that some 20,000 people will be at the conference. We will provide an update after the conference.
- Over the last several months, stories about the Zika virus have been dominating the news. Although we previously issued press releases affirming our belief that our patented Sequential Antigen Therapy could be effectively applied to the treatment of Zika, as well as numerous other viruses, we have decided not to pursue development of a Zika treatment at this time. We felt that it would take too long for us to develop an effective treatment, and unwise to divert critical resources from our other projects (potential joint ventures and the stunning progress we have been making on breast cancer treatment).
- We believe the actions we have taken recently to improve our balance sheet will put us in a much better financial position in the near future. We also believe that shareholder equity will be positively impacted as share price improves to more accurately reflect the company’s true potential.
- We are excited about our potential JV’s for our core products in Asia and Europe. We hope to be able to sign a Letter of Intent very soon, thus putting pressure on a potential JV in Brazil, either with the existing potential partner or with another.
- We are most excited about the pending JV regarding the development of a new molecule to add to existing pain medications, thus significantly increasing our patent portfolio and potential revenue worldwide. Again, we expect the negotiations to be wrapped up soon, with a target date of May, 2016. We will keep you, our stockholders, posted as events are concluded.
I remain respectfully yours,
William A. Hartman
President & CEO
Premier Biomedical, Inc.