10-K
1
form10-k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020
FOR THE TRANSITION PERIOD FROM TO
Commission
File Number 001-37603
BIORESTORATIVE
THERAPIES, INC.
(Exact
name of registrant as specified in its charter)
40 Marcus Drive, Melville, New York 11747
(Address of principal executive offices) (Zip Code)
(631)
760-8100
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
None Not applicable Not applicable
Securities
registered pursuant to Section 12(g) of the Act:
Common
Stock, par value $0.0001 per share
(Title
of Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No
[X]
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ]
No [X]
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 [X] 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes [X] 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 the definitions 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 [X] Smaller reporting company [X]
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 provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. [ ]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
State
the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s
most recently completed second fiscal quarter.
As
of June 30, 2020, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $159,424
based on the closing sale price as reported on the OTC market.
APPLICABLE
ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [X] No [ ]
As
of April 27, 2021, there were 3,175,977,710 shares of common stock outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None
INDEX
Page No.
Forward-Looking Statements 3
PART I
Item 1. Business. 3
Item 1A. Risk Factors. 27
Item 1B. Unresolved Staff Comments. 27
Item 2. Properties. 27
Item 3. Legal Proceedings. 27
Item 4. Mine Safety Disclosures. 27
PART II
Item 6. Selected Financial Data. 38
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 57
Item 8. Financial Statements and Supplementary Data. 57
Item 9A. Controls and Procedures. 57
Item 9B. Other Information. 58
PART III
Item 10. Directors, Executive Officers and Corporate Governance. 59
Item 11. Executive Compensation. 62
Item 14. Principal Accountant Fees and Services. 68
PART IV
Item 15. Exhibits and Financial Statement Schedules. 69
Signatures 72
PART
I
Forward-Looking
Statements
This
Annual Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking
statements contained in this Annual Report may not occur. Generally these statements relate to business plans or strategies, projected
or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made
by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words “may,”
“will,” “expect,” “believe,” “anticipate,” “project,” “plan,”
“intend,” “estimate,” and “continue,” and their opposites and similar expressions are intended to
identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are
subject to a number of uncertainties, risks and other influences, many of which are beyond our control, that may influence the accuracy
of the statements and the projections upon which the statements are based. Factors which may affect our results include, but are not
limited to, the risks and uncertainties discussed in Item 7 of this Annual Report (“Management’s Discussion and Analysis
of Financial Condition and Results of Operations - “Factors That May Affect Future Results and Financial Condition”).
Any
one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking
statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from
those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking
statements, whether from new information, future events or otherwise.
Intellectual
Property
This
Annual Report includes references to our federally registered trademarks, BioRestorative Therapies and Dragonfly design, BRTX-100,
ThermoStem and Stem Pearls. We also own an allowed trademark application for BRTX. The Dragonfly Logo is also registered with
the U.S. Copyright Office. This Annual Report also includes references to trademarks, trade names and service marks that are the property
of other organizations. Solely for convenience, trademarks and trade names referred to in this Annual Report appear without the ®,
SM or TM symbols, and copyrighted content appears without the use of the symbol ©, but the absence of use of these
symbols does not reflect upon the validity or enforceability of the intellectual property owned by us or third parties.
ITEM 1. BUSINESS.
(a) Business Development
As
used in this Annual Report on Form 10-K (the “Annual Report”), references to the “Company”, “we”,
“us”, or “our” refer to BioRestorative Therapies, Inc. and its subsidiaries.
We
were incorporated in Nevada on June 13, 1997. On August 15, 2011, we changed our name from “Stem Cell Assurance, Inc.” to
“BioRestorative Therapies, Inc.” Effective January 1, 2015, we reincorporated in Delaware.
In
January 2017, we submitted an Investigational New Drug (“IND”) application to the U.S. Food and Drug Administration (the
“FDA”) to obtain authorization to commence a Phase 2 clinical trial investigating the use of BRTX-100, our lead cell
therapy candidate, in the treatment of chronic lower back pain arising from degenerative disc disease. In February 2017, we received
such authorization from the FDA.
Material
Events During 2020
In
March 2020, our collaboration with the University of Pennsylvania resulted in a publication in Cell Reports, a respected peer
reviewed journal, with regard to our ThermoStem Program.
In
March 2020, a United States patent related to our ThermoStem Program was issued to us.
In
April 2020, a European patent related to our ThermoStem Program was issued to us. This European patent was validated in Belgium,
France, Germany, Italy, Poland, Spain, Sweden, Switzerland, and the United Kingdom.
In
May 2020, an Israeli patent related to our ThermoStem Program was issued to us.
During
the period from January 1, 2020 through March 19, 2020 (prior to the commencement of the Chapter 11 reorganization discussed below),
we received aggregate equity and debt financing of $10,000 and $441,762, respectively.
During
the Chapter 11 reorganization proceeding, we received debtor-in-possession financing of $1,189,413 as well as debt financing in the aggregate
amount of $3,848,548 at the effective date of our plan of reorganization. We have not received any equity financing since the commencement
of our Chapter 11 reorganization proceeding and have not received any debt financing following the effective date of our plan of reorganization.
Material
Events During 2021
In
January 2021, a European patent related to our ThermoStem Program was issued to us. This European patent was validated in France,
Germany, Italy, Spain, and the United Kingdom.
In
March 2021, a United States patent related to our ThermoStem Program was issued to us.
In
March 2021, a notice of allowance was issued for a separate United States patent application in the ThermoStem Program. This application
is expected to issue as a United States patent in the next few months.
On
March 18, 2021, Nickolay Kukekov, Ph.D. was elected as one of our directors.
Chapter
11 Reorganization
On
March 20, 2020 (the “Petition Date”), we filed a voluntary petition commencing a case under chapter 11 of title 11 of the
U.S. Code in the United States Bankruptcy Court for the Eastern District of New York (the “Bankruptcy Court”).
On
August 7, 2020 we and Auctus Fund, LLC (“Auctus”), our largest unsecured creditor and a stockholder as of the Petition Date,
filed an Amended Joint Plan of Reorganization (the “Plan”) and on October 30, 2020, the Bankruptcy Court entered an order
(the “Confirmation Order”) confirming the Plan, as amended. Amendments to the Plan are reflected in the Confirmation Order.
On November 16, 2020 (the “Effective Date”), the Plan became effective.
Reference
is made to Item 1.03 of our Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 20, 2020 (https://www.sec.gov/Archives/edgar/data/1505497/000102177120000081/0001021771-20-000081-index.htm)
for a description of the Plan, as amended and confirmed by the Confirmation Order, and the events that had occurred as of the filing
date, which Item 1.03 is incorporated herein by reference.
Effective
as of the Effective Date, as contemplated by the Plan, Mark Weinreb, A. Jeffrey Radov, Paul Jude Tonna and Robert B. Catell resigned
as directors of the Company and Mr. Weinreb resigned as our President, Chief Executive Officer and Chairman of the Board.
Effective
as of the Effective Date, as contemplated by the Plan, Lance Alstodt was elected President, Chief Executive Officer, Chairman of the
Board and a director of the Company and Francisco Silva, our Vice President, Research and Development, was elected a director of the
Company. See Item 10 of this Annual Report (“Directors, Executive Officers and Corporate Governance”).
(b) Business
General
We
are a life sciences company focused on the development of regenerative medicine products and therapies using cell and tissue protocols,
primarily involving adult (non-embryonic) stem cells. Our two core developmental programs, as described below, relate to the treatment
of disc/spine disease and metabolic disorders:
We
have also licensed an investigational curved needle device designed to deliver cells and/or other therapeutic products or material to
the spine and discs (and other parts of the body). We anticipate that FDA approval or clearance will be necessary for this device prior
to commercialization. We do not intend to utilize this device in connection with our contemplated Phase 2 clinical trial with regard
to BRTX-100. See “Curved Needle Device” below.
The
patents and patent applications for the Disc/Spine Program, the ThermoStem Program and the curved needle device are listed
below under “Technology; Research and Development.”
Overview
Every
human being has stem cells in his or her body. These cells exist from the early stages of human development until the end of a person’s
life. Throughout our lives, our body continues to produce stem cells that regenerate to produce differentiated cells that make up various
aspects of the body such as skin, blood, muscle and nerves. These are generally referred to as adult (non-embryonic) stem cells. These
cells are important for the purpose of medical therapies aiming to replace lost or damaged cells or tissues or to otherwise treat disorders.
Regenerative
cell therapy relies on replacing diseased, damaged or dysfunctional cells with healthy, functioning ones or repairing damaged or diseased
tissue. A great range of cells can serve in cell therapy, including cells found in peripheral and umbilical cord blood, bone marrow and
adipose (fat) tissue. Physicians have been using adult stem cells from bone marrow to treat various blood cancers for more than 60 years
(the first successful bone marrow transplant was performed in 1956). Recently, physicians have begun to use stem cells to treat various
other diseases. We intend to develop cell and tissue products and regenerative therapy protocols, primarily involving adult stem cells,
to allow patients to undergo cellular-based treatments.
We
intend to concentrate initially on therapeutic areas in which risk to the patient is low, recovery is relatively easy, results can be
demonstrated through sufficient clinical data, and patients and physicians will be comfortable with the procedure. We believe that there
will be readily identifiable groups of patients who will benefit from these procedures. We also believe that these procedures will be
significantly less expensive than the most common surgical procedure alternatives and will compare favorably, over the long-term, to
conservative treatment costs which may persist for years.
Accordingly,
we have focused our initial developmental efforts on cellular-based therapeutic products and clinical development programs in selective
areas of medicine for which the treatment protocol is minimally invasive. Such areas include the treatment of the disc and spine and
metabolic-related disorders. Upon regulatory approval, we will seek to obtain third party reimbursement for our products and procedures;
however; patients may be required to pay for our products and procedures out of pocket in full and without the ability to be reimbursed
by any governmental and other third party payers.
We
have undertaken research and development efforts in connection with the development of investigational therapeutic products and medical
therapies using cell and tissue protocols, primarily involving adult stem cells. See “Disc/Spine Program,” “Metabolic
Brown Adipose (Fat) Program” and “Curved Needle Device” below. As a result of these programs, we have obtained five
United States patents and seven foreign patents related to research regarding our ThermoStem Program, we have obtained licenses
for one patent application related to our Disc/Spine Program and we have obtained a license for one United States patent related
to a curved needle device.
We
have established a laboratory facility and will seek to further develop cellular-based treatments, products and protocols, stem cell-related
intellectual property (“IP”) and translational research applications. See “Laboratory” below.
We
have not generated any significant revenues from our operations. The implementation of our business plan, as discussed below, will require
the receipt of sufficient equity and/or debt financing to purchase necessary equipment, technology and materials, fund our research and
development efforts, including our contemplated clinical trials, retire our outstanding debt (if such debt is not converted into equity)
(see Item 7 of this Annual Report - “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity
and Capital Resources—Availability of Additional Funds”) and otherwise fund our operations. We intend to seek such financing
from current stockholders and debtholders as well as from other investors. We also intend to seek to raise capital through investment
bankers and from biotech funds, strategic partners and other financial institutions. We anticipate that we will require approximately
$12,000,000 in financing to complete a Phase 2 clinical trial investigating the use of BRTX-100 in the treatment of chronic lower
back pain arising from degenerative disc disease and that we will require approximately $45,000,000 in further additional funding to
complete such clinical trials, as further described in this section (assuming the receipt of no revenues from operations). We will also
require a substantial amount of additional funding to implement our other programs described in this section, repay our outstanding debt
(assuming such debt is not converted into equity) and fund general operations. No assurance can be given that the anticipated amounts
of required funding are correct or that we will be able to accomplish our goals within the timeframes projected. In addition, no assurance
can be given that we will be able to obtain any required financing on commercially reasonable terms or otherwise. We may also seek to
have our debtholders convert all or a portion of their debt into equity. No assurance can be given that debtholders will convert such
debt into equity. If we are unable to obtain adequate funding, we may be required to significantly curtail or discontinue our proposed
operations. See Item 7 of this Annual Report (“Management’s Discussion and Analysis of Financial Condition and Results of
Operations - Factors That May Affect Future Results and Financial Condition – We will need to obtain a significant amount of financing
to initiate and complete our clinical trials and implement our business plan. – We may need to obtain additional financing to satisfy
debt obligations. An event of default pursuant to our outstanding debt obligations could trigger an acceleration of the due date of such
obligations, including our secured debt.”).
Disc/Spine
Program
General
Among
the initiatives that we are currently pursuing is our Disc/Spine Program, with our initial product candidate being called BRTX-100.
We have obtained a license (see “License” below) that permits us to use technology for adult stem cell treatment of disc
and spine conditions. The technology is an advanced stem cell culture and injection procedure into the intervertebral disc (“IVD”)
that may offer relief from lower back pain, buttock and leg pain, and numbness and tingling in the leg and foot.
Lower
back pain is the most common, most disabling, and most costly musculoskeletal ailment faced worldwide. According to a recent market report,
of the 250 million American adults, nearly 25 million have chronic lower back pain of which approximately 12 million have been diagnosed
with and treated for disc degeneration and approximately 5.6 million have pain caused by a protruding or injured disc. We believe that
between 500,000 and 1 million invasive surgical procedures are performed each year to try to alleviate the pain associated with these
lower back conditions and that such procedures cost approximately $40 billion. Clinical studies have documented that the source of the
pain is most frequently damage to the IVD. This can occur when forces, whether a single load or repetitive microtrauma, exceed the IVD’s
inherent capacity to resist those loads. Aging, obesity, smoking, lifestyle, and certain genetic factors may predispose one to an IVD
injury. Current surgical approaches to back pain are extremely invasive (often altering the spine’s biomechanics unfavorably and
predisposing it to further disc degeneration) and are associated with unacceptably low success rates (with a second operation occurring
10% to 20% of the time). In addition, current surgical approaches are costly with spinal fusion surgery costing approximately $110,000,
discectomy costing approximately $20,000 to $50,000 and disc replacement surgery costing approximately $80,000 to $150,000. Even conservative
treatments can be costly, with oral medications costing between $1,000 and $2,000 per year, injection treatments costing approximately
$8,000 per year and physical therapy costing approximately $20,000 annually. We anticipate that the cost of a single treatment using
BRTX-100 will compare favorably to conservative treatments which may continue for years and will be less expensive than the most common
surgical procedures.
While
once thought to be benign, the natural history of lower back pain is often one of chronic recurrent episodes of pain leading to progressive
disability. This is believed to be a direct result of the IVD’s poor healing capacity after injury. The IVD is the largest avascular
(having few or no blood vessels) structure in the body and is low in cellularity. Therefore, its inherent capacity to heal after injury
is poor. The clinical rationale of BRTX-100 is to deliver a high concentration of the patient’s own cultured MSCs into the
site of pathology to promote healing and relieve pain.
We
have developed a mesenchymal stem cell product candidate, BRTX-100, derived from autologous (or a person’s own) human bone
marrow, cultured and formulated, in a proprietary method, specifically for introduction into a painful lumbar disc. As described below
under “BRTX-100” and “Production and Delivery,” BRTX-100 is a hypoxic (low oxygen) stem
cell product. In order to enhance the survivability of our bone marrow-derived MSCs in the avascular environment of the damaged disc,
BRTX-100 is designed to expand under hypoxic conditions. This process is intended to result in a large cell count population with
enhanced viability and therapeutic potential following injection into the injured disc.
We
submitted an IND application to the FDA to obtain authorization to commence a Phase 2 clinical trial investigating the use of BRTX-100,
our lead cell therapy candidate, in the treatment of chronic lower back pain arising from degenerative disc disease. We received such
authorization from the FDA in February 2017. We intend to commence such clinical trial during 2021 (assuming the receipt of necessary
funding).
In
addition to developing BRTX-100, we may also seek to sublicense the technology to a strategic third party, who may assist in gaining
FDA approval for a lumbar disc indication, or third parties for use in connection with cellular-based developmental programs with regard
to disc and spine related conditions.
We
have established a laboratory, which includes a clean room facility, to perform the production of cell products (possibly including BRTX-100)
for use in our clinical trials, for third party cell products or for general research purposes. We may also use this laboratory to develop
our pipeline of future products and expand our stem cell-related IP. See “Laboratory” and “Technology; Research and
Development” below.
BRTX-100
Our
lead product candidate, BRTX-100, is an autologous hypoxic (low oxygen) cultured mesenchymal stem cell product derived from a
patient’s own bone marrow and formulated with a proprietary biomaterial carrier (platelet lysate) to increase potency, viability
and survivability. We have designed the cryopreserved sterile cellular product candidate to be provided in vials for injection into painful
lumbar discs. We anticipate the product candidate will be delivered using a standard 20 gauge 3.5 inch introducer needle and a 25 gauge
6 inch needle that will extend into the disc center upon delivery. Upon regulatory approval, we plan to provide training to medical practitioners
with regard to the approved injection procedure. It is anticipated that the delivery of the product candidate will be a 30 minute procedure.
Mesenchymal
stem cells used in BRTX-100 are similar to other MSCs under development by others; however, in order to enhance the survivability
of our bone marrow-derived MSCs in the avascular environment of the damaged disc, BRTX-100 is designed to expand under hypoxic
conditions for a period of approximately three weeks. This process is intended to result in an approximate 40 million cell count population
with enhanced viability and therapeutic potential following injection locally into injured spinal discs. Publications and scientific
literature have indicated that MSCs preconditioned in hypoxic environment show enhanced skeletal muscle regeneration properties and improved
impacts upon circulation and vascular formation compared to MSCs cultured under normoxic (normal oxygen) conditions.
In
August 2018, the Journal of Translational Medicine published the results of our study evaluating the benefits of long-term hypoxic
culturing of human bone marrow-derived MSCs.
Production
and Delivery
The
production of our product candidate, BRTX-100, begins with the physician collecting bone marrow from the patient under local anesthesia.
Peripheral blood is also collected from the patient. The physician will then send the patient’s bone marrow and blood samples to
our laboratory (or a contract laboratory) for culturing and formulation. The hypoxic culturing process is intended to result in the selection
of a cell population that is suitable for an improved possibility of survival in the internal disc environment. We anticipate that the
cell culturing process and product formulation will take approximately three weeks, with an additional two weeks required for quality
control testing required to meet product release criteria. We will then send the therapeutic cryopreserved stem cells (BRTX-100)
in a sterile vial back to the physician’s offices where it will undergo a controlled thaw prior to the procedure. The price structure
for the procedure and our services has not been determined and no assurances can be given as to the effect that such price structure
will have on the marketability of such procedure and services. The following illustrates the process:
License
Pursuant
to our license agreement with Regenerative Sciences, LLC (“Regenerative”) that became effective in April 2012 (the “Regenerative
License Agreement”) we have obtained, among other things, a worldwide (excluding Asia and Argentina), exclusive, royalty-bearing
license from Regenerative to utilize or sublicense a certain method for culturing cells for use in our developmental program involving
disc and spine conditions, including protruding or painful discs and the treatment of avascular zones. The investigational technology
that has been licensed is an advanced stem cell culture and injection procedure that may offer relief from lower back pain, buttock and
leg pain, and numbness and tingling in the leg and foot. Pursuant to the Regenerative License Agreement, we have also obtained a worldwide,
exclusive, royalty-bearing license from Regenerative to utilize or sublicense a certain investigational curved needle device for the
administration of specific cells and/or cell products to the disc and/or spine (and other parts of the body). It will be necessary to
advance the design of this investigational device to facilitate the delivery of substances, including living cells, to specific locations
within the body and minimize the potential for damage to nearby structures.
The
Regenerative License Agreement currently provides for the requirement that we complete our Phase 2 clinical trial by a certain date (which
we believe to be February 2022) in order to maintain the exclusive nature of the licenses. The Regenerative License Agreement also provides
for a royalty-bearing sublicense of certain aspects of the technology to Regenerative for use for certain purposes, including in the
United States and the Cayman Islands. Further, the Regenerative License Agreement requires that Regenerative furnish certain training,
assistance and consultation services with regard to the licensed technology. The patents that are the subject of the Regenerative License
Agreement have been assigned to Regenexx, LLC which we have been advised is an affiliate of Regenerative.
Animal
Study
The
efficacy and safety of our product candidate, BRTX-100, has been tested in a degenerative intervertebral rabbit disc model. In
this study, 80 rabbits underwent surgery to create a puncture in the discs. Four weeks post surgery, each rabbit had either contrast,
a biomaterial carrier or BRTX-100 injected into the discs. In order to study the biodistribution and efficacy of BRTX-100,
the rabbits were evaluated at day 56 and day 120.
The
key safety findings of the animal study are as follows:
The
key efficacy findings of the animal study are as follows:
Clinical
Trial
We
submitted an IND application to the FDA to obtain authorization to commence a Phase 2 clinical trial investigating the use of BRTX-100,
our lead cell therapy candidate, in the treatment of chronic lower back pain arising from degenerative disc disease. We have received
such authorization from the FDA. We intend to commence such clinical trial during 2021 (assuming the receipt of necessary funding).
The
following describes the Phase 2 clinical trial authorized by the FDA:
A
Phase 2 Prospective, Double-Blinded, Placebo Controlled, Randomized Study
● General
● 99 patients; randomized 2:1, BRTX-100 to control, 40 million cells/dose
● 10-20 clinical trial sites
● Primary efficacy endpoint at 12 months
● Patient safety and efficacy follow up at 24 months
● Included subjects must have only one symptomatic diseased disc
● Primary Efficacy Endpoint
● Additional or Secondary Endpoints
● Clinical response at 12 months
The
FDA approval process can be lengthy, expensive and uncertain and there is no guarantee that the clinical trial(s) will be commenced or
completed or that the product will ultimately receive approval or clearance. See “Government Regulation” below and Item 7
of this Annual Report (“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Factors That
May Affect Future Results and Financial Condition – Risks Related to Our Cell Therapy Product Development Efforts; and –
Risks Related to Government Regulation.”).
As
an alternative to undertaking the Phase 3 clinical trial ourselves, we may explore the licensing of our rights with respect to our product
candidate, BRTX-100, to a strategic partner. Such an arrangement could possibly eliminate or significantly reduce the need to
raise the substantial capital needed to commence and complete the clinical trials and undertake the commercialization of BRTX-100
and would provide licensing-related revenue to us. No assurance can be given that any licensing agreement will be entered into, whether
upon commercially reasonable terms or otherwise.
Defined
Health Report
In
March 2018, we engaged Defined Health, a business development and strategy consulting firm, to conduct an independent review of BRTX-100.
Defined Health has worked with many of the leading companies in the pharmaceutical, biotech and healthcare industries for over 25 years.
The
review was intended to collect informed, independent opinions regarding BRTX-100 among key opinion leaders (“KOLs”)
(i.e., orthopedic surgeons specializing in back and spine surgery with experience in stem cell therapy), who, upon studying applicable
clinical material, could offer opinions regarding the future therapeutic potential of BRTX-100.
As
noted in the Defined Health report, the KOLs indicated that stem cell therapies have great potential to treat chronic lumbar disc disease
and other therapeutic areas. The KOLs reacted positively to the value proposition of our product candidate, BRTX-100, and were
optimistic that the clinical data presented to date is likely to be mirrored in future clinical investigations. Given the opportunity,
the KOLs indicated that they would likely participate in a clinical trial should it be offered at their center and that they would recommend
the study to appropriately eligible patients. The report indicated that, if BRTX-100 were to be granted FDA approval, the KOLs
anticipate that it would be integrated into the standard of care for eligible chronic lumbar disc disease patients.
Similar
Therapies
Human
data from studies of therapies comparative to BRTX-100 have shown reduced pain, increased function, and an absence of significant
safety issues with a durable response, as shown below:
Impact
on Public Health
The
United States is the world’s leading consumer of hydrocodone (99%) and oxycodone (83%) and leads the world in per capital consumption
of such drugs (twice as much as second ranked Canada). Each year 42,000 Americans die from overdoses and in 2012 there were enough pain
prescriptions in the United States for every adult to obtain a bottle of pills.
Total
annual healthcare and lost productivity costs in the United States related to pain, including headache, back pain and neck pain, are
estimated to be $600 billion, which is twice the annual costs related to heart disease and greater than the combined annual costs related
to cancer and diabetes.
Metabolic
Brown Adipose (Fat) Program
Since
June 2011, we have been engaging in pre-clinical research efforts with respect to an investigational platform technology utilizing brown
adipose (fat) derived stem cells (“BADSCs”) for therapeutic purposes. We have labeled this initiative our ThermoStem Program.
Brown
fat is a specialized adipose (fat) tissue found in the human body that plays a key role in the evolutionarily conserved mechanisms underlying
thermogenesis (generation of non-shivering body heat) and energy homeostasis in mammals - long known to be present at high levels in
hibernating mammals and human newborns. Recent studies have demonstrated that brown fat is present in the adult human body and may be
correlated with the maintenance and regulation of healthy metabolism, thus potentially being involved in caloric regulation. The pre-clinical
ThermoStem Program involves the use of a cell-based (brown adipose tissue construct) treatment for metabolic disease, such as
type 2 diabetes, obesity, hypertension and other metabolic disorders, as well as cardiac deficiencies. The diseases, disorders and syndromes
that may be targeted by our ThermoStem Program are as follows:
We
have had initial success in transplanting the brown adipose tissue construct in animals, and we are currently exploring ways to deliver
into humans. Even though present, BAT mass is very low in healthy adults and even lower in obese populations. Therefore, it may not be
sufficient to either naturally impact whole body metabolism, or to be targeted by drugs intended to increase its activity in the majority
of the population. Increasing BAT mass is crucial in order to benefit from its metabolic activity and this is what our ThermoStem
Program seeks to accomplish. We may also identify other naturally occurring biologics and chemically engineered molecules that may
enhance brown adipose tissue performance and activity.
Obesity,
the abnormal accumulation of white fat tissue, leads to a number of metabolic disorders and is the driving force behind the rise of type
2 diabetes and cardiovascular diseases worldwide. Pharmacological efforts to alter metabolic homeostasis through modulating central control
of appetite and satiety have had limited market penetration due to significant psychological and physiological safety concerns directly
attributed to modulating these brain centers. Adipose tissue is one of the largest organs in the human body and plays a key role in central
energy balance and lipid homeostasis. White and brown adipose tissues are found in mammals. White adipose tissue’s function is
to store energy, whereas BAT specializes in energy expenditure. Recent advancements in unraveling the mechanisms that control the induction,
differentiation, proliferation, and thermogenic activity of BAT, along with the application of imaging technologies for human BAT visualization,
have generated optimism that these advances may provide novel strategies for targeting BAT activation/thermogenesis, leading to efficacious
and safe obesity targeted therapies.
We
are developing a cell-based product candidate to target obesity and metabolic disorders using BADSCs. Our goal is to develop a bioengineered
implantable brown adipose tissue construct intended to mimic ones naturally occurring in the human body. We have isolated and characterized
a human multipotent stem cell population that resides within BAT depots. We have expanded these stem cells to clinically relevant numbers
and successfully differentiated them into functional brown adipocytes. We intend to use adult stem cells that may be differentiated into
progenitor or fully differentiated brown adipocytes, or a related cell type, which can be used therapeutically in patients. We are focusing
on the development of treatment protocols that utilize allogeneic cells (i.e., stem cells from a genetically similar but not identical
donor).
In
order to deliver these differentiated cells into target locations in vivo, we seeded BADSCs onto 3-dimensional biological scaffolds.
Pre-clinical animal models of diet-induced obesity, that were transplanted with differentiated BADSCs supported by a biological scaffold,
presented significant reductions in weight and blood glucose levels compared to scaffold only controls. We are identifying technology
for in vivo delivery in small animal models. Having completed our proof of concept using our BAT in small animals, we are currently
developing our next generation BAT. It is anticipated that this next version will contain a higher purity of BADSC and a greater percent
of functional brown adipocytes, which is expected to increase the therapeutic effect compared to our first generation product. In addition,
we are exploring the delivery of the therapeutic using encapsulation technology, which will only allow for reciprocal exchange of small
molecules between the host circulation and the BAT implant. We expect that encapsulation may present several advantages over our current
biological scaffolds, including prevention of any immune response or implant rejection that might occur in an immunocompetent host and
an increase in safety by preventing the implanted cells from invading the host tissues. We have developed promising data on the loading
of human stem cell-derived tissue engineered brown fat into an encapsulation device to be used as a cell delivery system for our metabolic
platform program for the treatment of type 2 diabetes, obesity, hyperlipidemia and hypertension. This advancement may lead to successful
transplantation of brown fat in humans. We are evaluating the next generation of BAT constructs that will first be tested in small animal
models. No assurance can be given that this delivery system will be effective in vivo in animals or humans. Our allogeneic brown
adipose derived stem cell platform potentially provides a therapeutic and commercial model for the cell-based treatment of obesity and
related metabolic disorders.
In
June 2012, we entered into an Assignment Agreement with the University of Utah Research Foundation (the “Foundation”) and
a Research Agreement with the University of Utah (the “Utah Research Agreement”). Pursuant to the Assignment Agreement, which
provides for royalty payments, we acquired the rights to two provisional patent applications that relate to human brown fat cell lines.
No royalty amounts are payable to date. The applications have been converted to a utility application in the United States and several
foreign jurisdictions. Pursuant to the Utah Research Agreement, the University of Utah provided research services relating to the identification
of brown fat tissue and the development and characterization of brown fat cell lines. The Utah Research Agreement provides that all inventions,
discoveries, patent rights, information, data, methods and techniques, including all cell lines, cell culture media and derivatives thereof,
are owned by us. In February 2019, we entered into a Services Agreement with the University of Utah pursuant to which the university
has been retained to provide research services with regard to the ThermoStem Program. Pursuant to this agreement, we will initiate
preclinical models to study the efficacy of our generation 2 encapsulated brown adipose tissue construct.
In
February 2014, our research with regard to the identification of a population of brown adipose derived stem cells was published in Stem
Cells, a respected stem cell journal.
In
March 2014, we entered into a Research Agreement with Pfizer Inc., a global pharmaceutical company (“Pfizer”). Pursuant to
the Research Agreement with Pfizer, we were engaged to provide research and development services with regard to a joint study of the
development and validation of a human brown adipose cell model. The Research Agreement with Pfizer provided for an initial payment to
us of $250,000 and the payment of up to an additional $525,000 during the two-year term of the Agreement, all of which has been received.
In
August 2015, we entered into a one year research collaboration agreement with the University of Pennsylvania with regard to the understanding
of brown adipose biology and its role in metabolic disorders. In September 2018, we entered into a one year material transfer agreement
with the University of Pennsylvania pursuant to which the university was provided access to our proprietary brown adipose tissue cells
for research purposes. No amounts were payable by or to us pursuant to either agreement.
In
September 2015, a United States patent related to the ThermoStem Program was issued to us.
In
April 2017, an Australian patent related to the ThermoStem Program was issued to us.
In
December 2017, a Japanese patent related to the ThermoStem Program was issued to us.
In
January 2019, a United States patent related to the ThermoStem Program was issued to us.
In
October 2019, an Australian patent related to the ThermoStem Program was issued to us.
In
October 2019, an Israeli patent related to the ThermoStem Program was issued to us.
In
March 2020, a United States patent related to our ThermoStem Program was issued to us.
In
March 2020, our collaboration with the University of Pennsylvania resulted in a publication in Cell Reports, a respected peer
reviewed journal, with regard to our ThermoStem Program.
In
April 2020, a European patent related to our ThermoStem Program was issued to us. This European patent was validated in Belgium,
France, Germany, Italy, Poland, Spain, Sweden, Switzerland, and the United Kingdom.
In
May 2020, an Israeli patent related to our ThermoStem Program was issued to us.
In
January 2021, a European patent related to our ThermoStem Program was issued to us. This European patent was validated in France,
Germany, Italy, Spain, and the United Kingdom.
In
March 2021, a United States patent related to our ThermoStem Program was issued to us.
In
March 2021, a notice of allowance was issued for a separate United States patent application in the ThermoStem Program. This application
is expected to issue as a United States patent in the next few months.
We
have completed proof of concept preclinical animal studies using our first generation brown adipose derived stem cells. We intend to
undertake additional preclinical animal studies in order to optimize delivery and explore the feasibility of targeting additional indications.
Such studies are planned to begin by the third quarter of 2021 (assuming the receipt of necessary financing). Following the completion
of such studies, we intend to file an IND with the FDA and initiate a clinical trial. See “Government Regulation” below and
Item 7 of this Annual Report (“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Factors
That May Affect Future Results and Financial Condition – Risks Related to Our Cell Therapy Product Development Efforts; and –
Risks Related to Government Regulation.”). The FDA approval process can be lengthy, expensive and uncertain and there is no guarantee
of ultimate approval or clearance.
We
anticipate that much of our development work in this area will take place at our laboratory facility, outside core facilities at academic,
research or medical institutions, or contractors. See “Laboratory” below.
Curved
Needle Device
Pursuant
to the Regenerative License Agreement discussed under “Disc/Spine Program-License” above, we have licensed and further developed
an investigational curved needle device (“CND”) that is a needle system with a curved inner cannula to allow access to difficult-to-locate
regions for the delivery or removal of fluids and other substances. The investigational CND is intended to deliver stem cells and/or
other therapeutic products or material to the interior of a human intervertebral disc, the spine region, or potentially other areas of
the body. The device is designed to rely on the use of pre-curved nested cannulae that allow the cells or material to be deposited in
the posterior and lateral aspects of the disc to which direct access is not possible due to outlying structures such as vertebra, spinal
cord and spinal nerves. We anticipate that the use of the investigational CND will facilitate the delivery of substances, including living
cells, to specific locations within the body and minimize the potential for damage to nearby structures. The investigational device may
also have more general use applications. In August 2015, a United States patent for the CND was issued to the licensor, Regenerative.
We anticipate that FDA approval or clearance will be necessary for the investigational CND prior to commercialization. We do not intend
to utilize the CND in connection with our contemplated Phase 2 clinical trial with regard to BRTX-100. See “Government Regulation”
below and Item 7 of this Annual Report (“Management’s Discussion and Analysis of Financial Condition and Results of Operations
- Factors That May Affect Future Results and Financial Condition – Risks Related to Our Cell Therapy Product Development Efforts;
and – Risks Related to Government Regulation.”). The FDA review and approval process can be lengthy, expensive and uncertain
and there is no guarantee of ultimate approval or clearance.
Laboratory
We
have established a laboratory in Melville, New York for research purposes and have built a cleanroom within the laboratory for the possible
production of cell-based product candidates, such as BRTX-100, for use in a clinical trial, for third party cell products or general
research purposes.
As
operations grow, our plans include the expansion of our laboratory to perform cellular characterization and culturing, protocol and stem
cell-related IP development, translational research and therapeutic outcome analysis. As we develop our business and our stem cell product
candidates and obtain regulatory approval, we will seek to establish ourselves as a key provider of adult stem cells for therapies and
expand to provide cells in other market areas for stem cell therapy. We may also use outside laboratories specializing in cell therapy
services and manufacturing of cell products.
Technology;
Research and Development