UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
For
the fiscal year ended December 31, 2021
For
the transition period from to
Commission
file number 001-32188
ORAGENICS,
INC.
(Exact
name of registrant as specified in its charter)
(Address of Principal Executive Offices) (Zip Code)
813-286-7900
(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 $0.001 par value per share OGEN NYSE AMERICAN
SECURITIES
REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
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 ☒
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 for such shorter period that the registrant
was required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 ☒ 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 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 Exchange Act Rule 12b-2). Yes ☐ No ☒
The
aggregate market value of the voting and non-voting common equity stock held by non-affiliates of the registrant, was approximately $80,959,901
computed based upon a last sales price of $0.71 as reported by the NYSE American as of June 30, 2021.
As
of March 8, 2022, there were 116,394,806 shares of the registrant’s Common stock outstanding.
TABLE
OF CONTENTS
FORWARD-LOOKING STATEMENTS AND CERTAIN CONSIDERATIONS ii
PART I
ITEM 1. BUSINESS 1
ITEM 1A. RISK FACTORS 27
ITEM 1B. UNRESOLVED STAFF COMMENTS 72
ITEM 2. PROPERTIES 72
ITEM 3. LEGAL PROCEEDINGS 72
ITEM 4. MINE SAFETY DISCLOSURES 72
PART II
ITEM 6. RESERVED 73
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 87
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 87
ITEM 9A. CONTROLS AND PROCEDURES 88
ITEM 9B. OTHER INFORMATION 89
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 89
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 90
ITEM 11. EXECUTIVE COMPENSATION 94
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 110
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 111
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-2
CONSOLIDATED ALANCE SHEETS F-3
CONSOLIDATED STATEMENTS OF OPERATIONS F-4
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS F-6
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS F-7–F-21
i
FORWARD
LOOKING STATEMENTS AND CERTAIN CONSIDERATIONS
This
report, along with other documents that are publicly disseminated by us, contains or might contain forward-looking statements within
the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements included in this report
and in any subsequent filings made by us with the Securities and Exchange Commission (the “SEC”) other than statements of
historical fact, that address activities, events or developments that we or our management expect, believe or anticipate will or may
occur in the future are forward-looking statements. These statements represent our reasonable judgment on the future based on various
factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our
actual results and financial position to differ materially. We claim the protection of the safe harbor for forward-looking statements
provided in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act.
Examples of forward-looking statements include: (i) projections of revenue, earnings, capital structure and other financial items, (ii)
statements of our plans and objectives, (iii) statements of expected future economic performance, and (iv) assumptions underlying statements
regarding us or our business. Forward-looking statements can be identified by, among other things, the use of forward-looking language,
such as “believes,” “expects,” “estimates,” “may,” “will,” “should,”
“could,” “seeks,” “plans,” “intends,” “anticipates” or “scheduled to”
or the negatives of those terms, or other variations of those terms or comparable language, or by discussions of strategy or other intentions.
Forward-looking
statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially
from those contemplated by the statements. The forward-looking information is based on various factors and was derived using numerous
assumptions. Important factors that could cause our actual results to be materially different from the forward-looking statements include
the following risks and other factors discussed under the Item 1A “Risk Factors” in this Annual Report on Form 10-K. These
factors include:
● Our ability to successfully commercialize our product candidates;
ii
● Our ability to identify, recruit and retain key personnel and consultants;
● The safety, efficacy and benefits of our product candidates;
● Our ability to maintain our listing on the NYSE American;
● The impact of laws and regulations, including those that may not yet exist.
We
caution investors that actual results or business conditions may differ materially from those projected or suggested in forward-looking
statements as a result of various factors including, but not limited to, those described above and in the Risk Factors section of this
report. We cannot assure you that we have identified all the factors that create uncertainties. Moreover, new risks emerge from time
to time and it is not possible for our management to predict all risks, nor can we assess the impact of all risks on our business or
the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking
statements. Readers should not place undue reliance on forward-looking statements. Except as required by applicable law, we undertake
no obligation to publicly release the result of any revision of these forward-looking statements to reflect events or circumstances after
the date they are made or to reflect the occurrence of unanticipated events.
iii
PART
I
ITEM 1. BUSINESS.
This
description contains certain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially
from the results discussed in the forward-looking statements as a result of certain of the risks set forth herein. We assume no obligation
to update any forward-looking statements contained herein.
Overview
Oragenics,
Inc. is a development-stage company dedicated to fighting infectious diseases including coronaviruses and multidrug-resistant organisms.
Its lead product is an intranasal immunization vaccine candidate to prevent COVID-19 and variants of the SARS-CoV-2 virus. The
NT-CoV2-1 program leverages coronavirus spike protein research licensed from the National Institute of Health and the National
Research Council of Canada with a focus on reducing viral transmission and offering a more patient-friendly intranasal administration.
Our lantibiotics program features a novel class of antibiotics against bacteria that have developed resistance to
commercial antibiotics.
Our
SARS-CoV-2 Vaccine Product Candidate— NT-CoV2-1
Following
our May 2020 acquisition of one hundred percent (100%) of the total issued and outstanding common stock of Noachis Terra, Inc. (“Noachis
Terra”) we are focused on the development and commercialization of a vaccine product candidate to provide long lasting immunity
from the novel Severe Acute Respiratory Syndrome coronavirus (“SARS-CoV-2”), which causes the coronavirus disease 2019 (“COVID-19”).
Noachis Terra is a party to a worldwide, nonexclusive intellectual property and biological materials license agreement with the National
Institute of Allergy and Infectious Diseases (“NIAID”), an institute within the National Institutes of Health (“NIH”),
relating to certain research, patent applications and biological materials involving pre-fusion stabilized coronavirus spike proteins
and their use in the development and commercialization of a vaccine to provide specific, long lasting immunity from SARS-CoV-2. Since
the acquisition we have conducted testing in animal models, including SARS-CoV-2 challenge studies in hamsters, using specific formulations
for intramuscular administration (our Terra CoV-2 vaccine candidate) and intranasal administration (our NT-CoV2-1 vaccine candidate),
both based on the NIAID pre-fusion stabilized spike protein antigens. Following consideration of a number of factors, including but not
limited to the competitive landscape, we determined to bring the intranasal vaccine candidate NT-CoV2-1 into further development due
to the greater differentiation versus current COVID-19 vaccines and the potential benefits of intranasal over intramuscular administration.
We believe these benefits could include a higher reduction of transmission of SARS-CoV-2 and would offer a needle-free delivery option.
We therefore are currently focusing our development efforts on our more highly differentiated NT-CoV2-1 vaccine candidate.
Coronaviruses
are a family of viruses that can lead to upper-respiratory infections in humans. Recent clinical reports also suggest that the SARS-CoV-2
virus can affect other body-systems, including the nervous, cardiovascular, gastrointestinal and renal systems. Among the recent iterations
of coronaviruses to move from animal to human carriers is SARS-CoV-2 (often referred to as COVID-19), which, beginning in Wuhan, China,
in late 2019, caused a global pandemic due to its rapid spread and the relatively high mortality rate (as compared to the seasonal influenza).
In late January of 2022, the World Health Organization’s estimates indicate the number of worldwide COVID-19 infections have exceeded
365 million and the number of deaths directly attributed to COVID-19 have exceeded 5.6 million. Pfizer/-BioNTech received FDA approval
for their COVID-19 vaccines in August of 2021 and the Moderna vaccine in January 2022. The Janssen vaccine is currently available in
the United States under Emergency Use Authorizations (“EUA”) by the FDA. We believe given the size of the worldwide pandemic
that even with additional vaccines projected to be available in the months ahead, there will be demand for the highly differentiated
NT-CoV2-1 vaccine, once development is successfully completed. We intend to combine the research, patent applications and biological
materials covered by our NIAID license with our existing clinical research and manufacturing capabilities to respond rapidly to this
ongoing, global, public health crisis. We believe our NT-CoV2-1 vaccine holds the possibility of playing an important role in addressing
this crisis.
Coronaviruses,
such as SARS-CoV-2, possess signature protein spikes on their outer capsule. The NIAID license covers patents and data on a vaccine candidate
that were created based on a stabilized pre-fusion spike trimeric protein. By stabilizing the spike protein in the pre-fusion state,
the number of immunogenic centers is increased thereby allowing for a greater likelihood of successful antibody binding, resulting in
an improved immunogenic response. The genetic code, acquired from the NIH, for the stabilized pre-fusion spike protein was provided to
Aragen Bioscience, Inc. (“Aragen”) for the purpose of insertion of the spike protein gene sequence into a Chinese Hamster
Ovary (“CHO”) cell line. Aragen is a leading contract research organization focused on accelerating pre-clinical biologics
product development, has extensive experience building CHO cell lines for recombinant proteins, such as monoclonal antibodies. Aragen
has successfully inserted the NIH pre-fusion spike protein gene sequence into a CHO cell line and is currently developing both the analytical
tests and identifying preliminary cell line growth conditions to optimize the spike protein titers. Currently, “mini-pool”
production and analytical development is underway. The process to transfer to full-scale manufacture has begun.
The
NIH’s pre-clinical study shows that this spike protein, adjuvanted with the mouse specific TLR-4-agonist Sigma Adjuvant System
(“SAS”, a TLR-4 agonist) that induces T cell activation), generates neutralizing antibody titers in both a pseudovirus neutralization
assay and a plaque reduction neutralization titer (PRNT) assay. Recently released information indicated that pretreatment of mice with
the NIH-created COVID-19 spike protein in combination with the SAA adjuvant completely inhibited viral growth in the nasal cavities and
lungs of infected animals compared to unvaccinated control animals. In October 2020, we received feedback to our Type B Pre-Investigational
New Drug (“IND”) Meeting Request from the FDA. The response indicated that the FDA broadly supported our planned approach
to the pre-clinical program that would support the clinical development of the Terra CoV-2 vaccine. Due to our focus on our intranasal
vaccine product we expect to meet with the FDA in connection with our IND filing.
We
also entered into a material transfer agreement with Biodextris Inc. for the use of three intranasal mucosal adjuvants in our Terra CoV-2
and NT-CoV2-1 vaccine candidates. BDX100, BDX300 and BDX301 are proteosome-based adjuvants comprised of proteins and lipopolysaccharides
with improved attributes including enhanced immune response, manufacturing efficiency and the benefits of intranasal vaccine administration.
The agreement allows for the future collaboration regarding the intranasal delivery of vaccine during clinical development with the opportunity
to enter into a commercial agreement upon regulatory approval of the intranasal vaccine.
The
NT-CoV2-1 vaccine containing Inspirevax’s intranasal mucosal adjuvant BDX301 has been studied in pre-clinical animal studies, including
hamster viral challenge studies and mouse immunogenicity studies. A rabbit toxicology study has been initiated and is required for regulatory
approval prior to the Phase 1 clinical study. We believe the NT-CoV2-1 vaccine has the potential to lead to a higher reduction of transmission
of SARS-CoV-2 and offers a needle-free delivery option. This vaccine could also permit cost effective storage and distribution at refrigerated
temperatures, which should facilitate distribution.
On
July 26, 2021, we entered into a licensing agreement with the NRC that enables us to pursue the rapid development of next-generation
vaccines against the SARS-CoV-2 virus and its variants. The license was subsequently extended to include the Omicron variant. In addition,
we broadened the non-exclusive field of use to include all diseases caused by coronaviruses and any genetic variants thereof. The NRC
technologies, in combination with the U.S. NIH elements found in our NT-CoV2-1 vaccine candidates, provide us with a platform that can
generate cell lines for high-yield production of spike protein antigens for existing and emerging variants of concern. This platform
should allow production of cell lines within six to eight weeks of spike gene sequence availability, compared with six to nine months
for traditional production of such cell lines. The NRC technologies, developed with support from the NRC’s Pandemic Response Challenge
Program, are expected to expedite the evaluation of SARS-CoV-2 antigen candidates in pre-clinical and clinical studies.
We
began pre-clinical studies in June of 2021 through our collaboration and material transfer agreement with the NRC. We initiated an immunogenicity
study in mice to evaluate several adjuvant candidates. On August 30, 2021, we announced the successful completion of these mouse immunogenicity
studies that supported further development using either the intramuscular or intranasal routes of administration. A hamster challenge
study was initiated in September of 2021 to assess inhibition of viral replication using adjuvants specific for intramuscular and intranasal
administration. In December of 2021, we announced that both formulations generated robust immune responses and reduced the SARS-CoV-2
viral loads to undetectable levels in the nasal passages and lungs five days following a viral challenge. By contrast, hamsters in the
control groups that had received saline or adjuvants alone had no detectable immune response and substantial viral loads. The vaccines
delivered by intranasal and intramuscular routes generated immune responses as measured by multiple assays.
Through
assessment of a variety of factors including evolving variants and available vaccines in use, we have determined to focus our development
efforts on the intranasal delivery of our vaccine product candidate, NT-CoV2-1, which is more highly differentiated than the currently
available and late-stage COVID-19 vaccines. As a result, we expect to file an IND application with the FDA in the third quarter of 2022
and immediately upon receipt of approval from the FDA to commence a Phase 1 clinical study with NT-CoV2-1, the protocol for which is
currently under development.
We
expect to use our currently available cash resources to continue to advance the development of NT-CoV2-1 through IND-enabling studies,
including immunogenicity, viral challenge studies, toxicology studies, and the Phase 1 trial with further clinical development being
contingent upon the receipt of additional funding, including non-dilutive government grant funding which we continue to pursue or partnering
or out-licensing opportunities.
Our
Antibiotic Product Candidate-Oragenics Derived Compound (ODC-x)
Members
of our scientific team discovered that a certain bacterial strain of Streptococcus mutans, produces Mutacin 1140 (MU1140), a molecule
belonging to the novel class of antibiotics known as lantibiotics. Lantibiotics, such as MU1140, are highly modified peptide antibiotics
made by a small group of Gram-positive bacterial species. Over 60 lantibiotics have been discovered, to date. We believe lantibiotics
are generally recognized by the scientific community to be potent antibiotic agents.
In
nonclinical testing, MU1140 has shown activity against all Gram-positive bacteria against which it has been tested, including those responsible
for a number of healthcare associated infections, or HAIs. A high percentage of hospital-acquired infections are caused by highly antibiotic-resistant
bacteria such as methicillin-resistant Staphylococcus aureus (MRSA) or multidrug-resistant Gram-negative bacteria. We believe
the need for novel antibiotics is increasing as a result of the growing resistance of target pathogens to existing FDA approved antibiotics
on the market.
Lantibiotics
have been difficult to investigate for their clinical usefulness as therapeutic agents in the treatment of infectious diseases due to
a general inability to produce or synthesize sufficient quantities of pure amounts of these molecules. Traditional fermentation methods
can only produce minute amounts of the lantibiotic.
In
June 2012, we entered into a worldwide exclusive channel collaboration agreement with Precigen, Inc (formerly known as Intrexon Corporation),
ILH Holdings, Inc. (n/k/a Eleszto Genetika, Inc. (“EGI”), for the development and commercialization of the native strain
of MU1140 and related homologs to use its advanced transgene and cell engineering platforms. In
September of 2021, we and EGI, mutually terminated the amended and restated worldwide exclusive channel collaboration agreement
dated March 1, 2021 (the “Lantibiotic ECC”) pursuant to which we were pursuing the development of OG716 as a lead product
candidate for the treatment of C. diff. As a result of the mutual termination of the Lantibiotic ECC, we ceased pre-clinical development
of our product candidate OG716 and other compounds covered by the Lantibiotic ECC, all licenses provided pursuant to the Lantibiotic
ECC between the parties were terminated and there are no continuing obligations between the parties, except as to confidentiality. We
made no payments to EGI in connection with the mutual termination. Each party retained all right and title to their own respective intellectual
property. The termination of the Lantibiotic ECC was to enable us to focus on our continuing independent research and development efforts
relative to lantibiotics in order to identify new compounds to pursue.
The
timing of the filing of an IND regarding any future lantibiotic candidate is subject to our having sufficient available human, material
and financing capital, which includes research subjects, both animal and human, given all of our anticipated needs and expected requirements
in connection with our ongoing research and development initiatives. We expect to continue to advance our lantibiotics program to an
IND filing based on the availability of both human and financial capital. Based upon the current funding we expect to continue to focus
on the identification of new potential product lantibiotic candidates, efficient and cost-effective improvements in the manufacturing
processes and pre-clinical studies required to support a first in human Phase 1 clinical study.
We
recently announced that we were awarded a small business innovation research grant in the amount of $250,000 (“Computer-aided Design
for Improved Lantibiotics” R41GM136034) for the Company’s continued research and development of lantibiotics, including its
collaborative program with the Biomolecular Sciences Institute at Florida International University (FIU). The grant provides the Company
with funding to develop novel lantibiotics for the treatment of ESKAPE pathogens (defined as Enterococcus faecium, Staphylococcus
aureus, Klebsiella pneumoniae, Acinetobacter baumannii, Pseudomonas aeruginosa, and Enterobacter spp.).
Product
Candidates.
Through
our wholly-owned subsidiary, Noachis Terra, we began the research and development stage for our new Terra CoV-2 and NT-CoV2-1 vaccine
product candidate. We hold a nonexclusive, worldwide intellectual property license agreement for certain research, patent applications
and biological materials relating to the use of pre-fusion coronavirus spike proteins for the development and commercialization of a
vaccine against SARS-CoV-2.
Additionally,
we are developing semi-synthetic lantibiotic analogs that may be effective against systemic Gram-positive multidrug infections, and analogs
that may be effective in treating Gram negative infections. We seek to protect our product candidates through patents and patent applications.
Product/Candidate Description Application Status
Our
Business Development Strategy
Success
in the biopharmaceutical and product development industry relies on the continuous development of novel product candidates. The large
majority of product candidates do not make it past all clinical trials which forces companies to look externally for innovation.
Accordingly,
we expect from, time to time, to seek strategic opportunities through various forms of business development, which can include strategic
alliances, licensing deals, joint ventures, collaborations, equity or debt-based investments, dispositions, mergers and acquisitions.
We view these business development activities as a necessary component of our strategies, and we seek to enhance shareholder value by
evaluating business development opportunities both within and complementary to our current business as well as new and separate from
the development of our existing product candidates due to the experience we are acquiring.
Our
SARS-CoV-2 Vaccine Product Candidate-NT-CoV2-1
Market
Opportunity
The
worldwide revenues for the Pfizer and Moderna mRNA COVID-19 vaccines in 2021 were $37 billion and $18 billion, respectively. Pfizer projects
revenues of $32 billion and Moderna projects $22 billion for their COVID-19 vaccines in 2022. In late January of 2022, the World Health
Organization’s estimates indicate the number of worldwide COVID-19 infections have exceeded 356,000,000 and the number of deaths
directly attributed to COVID-19 have exceeded 5,610,000.
The
overall disease burden has continued to increase in the US despite 88% of those 65 years of older being fully vaccinated and 68% of those
5 years of age or older. The current vaccines have reduced the rates of hospitalization and death due to COVID-19 in vaccinated individuals
but the transmission levels even in vaccinated individuals has allowed the SARS-CoV-2 variants to continue to circulate, especially the
Omicron variant since it emerged in late 2021. We believe an intranasally administered COVID-19 vaccine has the potential to reduce transmission
more effectively than intramuscularly administered vaccines because the intranasal vaccine could induce mucosal immunity in the nose
and throat, which are the early entry points for SARS-CoV-2. Label expansions to include children down to five years of age have already
been implemented and Pfizer/BioNTech are submitting data to the FDA requesting use in those 6 months of age or older. The inclusion of
COVID-19 vaccines in the routine childhood immunization schedule may be anticipated assuming COVID-19 enters an endemic phase. Intranasal
COVID-19 vaccines could play an important role in routine pediatric immunization since they create less anxiety in needle-phobic children
and can more easily fit into an increasingly crowded schedule of injected vaccines.
COVID-19
disease epidemiology is closely monitored and as such recommendations as to vaccinations and treatments have been evolving accordingly.
The identification of new COVID-19 variants including Delta and Omicron, and the spread of such variants have altered the dynamics of
disease spread and led to the requirement of booster shots in the US and other countries to help facilitate control of the newer viral
strains.
Our
Strategy
We
seek to develop NT-CoV2-1 vaccine candidate to the point of entering into a licensing deal or strategic partnership. In connection with
the development of our NT-CoV2-1 vaccine candidate we expect to focus on differentiation of our vaccine product candidate by using intranasal
administration, which none of the currently available intramuscular vaccines can offer. We believe that development of a vaccine that
has differentiated attributes to those currently being used will be beneficial in helping to control the SARS–CoV-2 pandemic. We
anticipate that the main use of NT-CoV2-1 will be as a booster dose for those already vaccinated with a different COVID -19 vaccine,
since the vaccination coverage rates in developed countries is already very high. A potential longer-term objective would be to offer
NT-CoV2-1 as an intranasal vaccine for the primary immunization of infants or children in the routine childhood immunization schedule.
Should
the current COVID-19 pandemic be brought under control quickly and thereby potentially impact our efforts to commercialize our NT-CoV2-1
as a vaccine candidate, we believe we could identify and pursue other vaccines to develop that are capable of preventing new infectious
disease threats.
Regulatory
We
held a pre- IND meeting with the FDA on our Terra CoV-2 vaccine candidate. The broad support for our approach by the FDA included a number
of activities, including: (i) use of the Research Cell Bank in the early manufacturing process development; (ii) Use of early pilot batch
manufacture under Good Manufacturing Processes (GMP) for the anticipated Phase 1 clinical trials; and, (iii) submission of draft toxicology
reports during IND filing. We have conducted the pre-clinical studies including the Syrian Hamster virus challenge study, the mouse immunogenicity
study with positive results for both the intramuscular formulation (Terra CoV-2) and the intranasal formulation (NT-CoV2-1). Due to the
potential for greater differentiation with the intranasal vaccine NT-Cov2-1, we are moving that candidate forward into a rabbit toxicology
study. Data from the hamster and mouse studies and the rabbit toxicology study will be submitted as part of the IND filing prior to initiation
of the Phase 1 human clinical trial for NT-CoV2-1.
Manufacturing
The
creation of a stable pool Master Cell Bank is complete and GMP manufacturing of the bulk drug substance has been completed by our Phase
1 biologics contract development and manufacturing organization, Biodextris, Inc. Creation of the clonal Research Cell Bank, required
for later stage manufacturing, is completed and will be followed by manufacturing of the clonal Master Cell Bank prior to Phase 2 GMP
manufacturing. We use third-party suppliers for the development of our vaccine product candidate, including with respect to the manufacturing
of our vaccine candidate for use in pre-clinical studies and expected clinical trials. We enter into agreements with these third-party
suppliers as part of, and in connection with, our product development plans and timing. In order to have sufficient product available
for anticipated future clinical trials we need to enter into agreements with GMP certified manufactures that have the capability and
capacity to meet our expected product needs and timing in advance of when our actual needs will arise in order for us to be positioned
to continue development without delays due to the manufacturing process and capabilities of qualified manufacturers.
In
March 2022 we entered into an agreement with KBI Biopharma, Inc. for the process transfer, process optimization and cGMP manufacturing
of our vaccine candidate in anticipation of a future Phase 2 clinical trial. This agreement obligates us to make certain payments to
KBI in connection with the manufacture of our vaccine product candidate based upon our current expected timing. If the timing of our
current development plans changes, we could be required to make additional payments to KBI associated with such delays and/or associated
with the cancellation of the agreement without achieving the benefits anticipated from the agreement. Additionally, a fill/finish, packaging
and labeling company has been identified to support the Phase 1 program and is scheduled for GMP manufacturing of clinical material in
2Q22.
Homologs
of MU1140 and Other Lantibiotics
In
the course of research and development, MU1140 was found to be a potent antibiotic that is naturally produced by the parent of the SMaRT
strain. MU1140 shows antibacterial activity against all Gram-positive bacteria against which it has been tested, including those responsible
for a variety of multi-drug resistant organisms and healthcare-associated infections, or HAIs.
We
intend to develop lantibiotics, a novel class of antibiotics, as active pharmaceutical ingredients toward the goal of commercialization
for the treatment of infectious diseases in humans, focusing on infections caused by the most dangerous bacteria identified by the WHO
and CDC priority list. Antibiotic resistance is spurred by overuse and misuse of antibiotics and worsened by the lack of scientific innovation.
The timing of the filing of an IND regarding homologs of MU1140 is subject to our having sufficient available capital given all of our
anticipated needs and expected requirements in connection with our ongoing research and development initiatives. We expect to continue
to advance our lantibiotics program to an IND filing based on the availability of both human and financial capital. Based upon the current
funding we expect to continue to focus on the identification of new potential product lantibiotic candidates, efficient and cost-effective
improvements in the manufacturing processes and pre-clinical studies required to support a first in human Phase 1 clinical study. In
addition, we have undertaken research programs to expand our capabilities to improve the physical chemical characteristics (i.e., solubility
and stability) of lantibiotics for use to treat systemic Gram-positive infections and also exploring lantibiotics that may be efficient
against Gram negative bacteria.
Market
Opportunity
Many
Gram-positive related HAIs are caused by drug-resistant bacteria, including methicillin-resistant Staphylococcus aureus, or MRSA;
vancomycin-resistant Enterococcus faecalis, or VRE; and Clostridium difficile, or C. diff. According to the most
recent Centers for Disease Control and Prevention, (CDC) report on Antibiotic Resistance Threats in the US (2019), the number of people
facing antibiotic resistance in the United States is too high. More than 2.8 million antibiotic-resistant infections occur in the United
States each year, and more than 35,000 people die as a result. In addition, nearly 223,900 people in the United States required hospital
care for C. difficile and at least 12,800 people died in 2017.
Antimicrobial
resistance is one of the greatest threats to global health. Without innovation, we risk falling into a post-antimicrobial era in which
minor infections will become life threatening, and routine medical procedures will be nearly impossible to perform. The World Health
Organization predicts that by 2050, antimicrobial resistance could cause 10 million deaths each year, surpassing the projected number
of deaths due to cancer. Notably, antimicrobials have a prominent role in the treatment of secondary bacterial infection complications
of viral respiratory infections, such as the novel coronavirus.
The
literature review findings indicate that the cost of AMR across the globe is extremely high. The CDC estimated that the cost of antimicrobial
resistance is $55 billion every year in the United States, $20 billion for health care and about $35 billion for loss of productivity.
Recent research by the World Bank indicates that antimicrobial resistance would elevate the rate of poverty and impact low-income countries
compared to the rest of the world. Studies show that annual global GDP could decrease by approximately 1% and there would be a 5–7%
loss in developing countries by 2050. This percentage ultimately translates into $100-210 trillion.
The
need for novel antibiotics is increasing but unfortunately, the worldwide rise of bacterial pathogens resistant
to antibacterial agents cannot be counteracted by the current low development pace of therapeutics with new mode(s) of action. While
there are nearly 4,000 immuno-oncology agents in development, only about 30–40 new antibacterial compounds are currently in the
clinical trial phases of development, and, notably, those candidates targeting World Health Organization (WHO) priority pathogens are
derivatives of existing classes. Less than 25% of current drugs in the clinical development pipeline represent a novel class or act through
a novel mechanism, and none of these are potentially active against Gram-negative ESKAPE or WHO critical threat pathogens. Only
a small fraction of the antibiotics approved over the past 40 years represents new compound classes, while
the majority were derived from already known chemical structures, and the most recent new class of antibiotics was discovered during
the 1980s. According to Nature.com,no new class of Gram-negative antibiotics has been launched
for more than 50 years.
Lantibiotics
such as MU1140 are highly modified peptide antibiotics made by a small group of Gram-positive bacterial species. Over 60 lantibiotics
have been discovered since the first lantibiotic, nisin, was discovered. Lantibiotics are generally known to be potent antibiotic agents;
however, attempts to investigate their clinical usefulness have generally met with failure due to the inability to produce sufficient
pure amounts of any of these molecules to be able to test them as a therapeutic agent for the treatment of infectious diseases. Standard
fermentation methods, such as those used to make a variety of other antibiotics, have historically resulted in the production of only
minute amounts of the lantibiotic.
Our
Solution
To
develop homologs of MU1140 and, engineered in parallel, high producing strains to the point of partnership, and to develop additional
lantibiotics in connection with our work on MU1140. MU1140 has demonstrated activity against a wide variety of disease-causing Gram-positive
bacteria, including MRSA, VRE, and C. difficile.
To
develop homologs of MU1140 paired with high producing strains to the point of partnership, and to develop additional lantibiotics in
connection with our work on MU1140. MU1140 has demonstrated activity against a wide variety of disease-causing Gram-positive bacteria,
including MRSA, VRE, C. diff, Mycobacterium tuberculosis and Bacillus anthracis.
Our
Strategy
We
are developing and testing recombinantly derived homologs of the native MU1140 molecule and its chemical derivative with improved therapeutic
profiles and physical-chemical characteristics. The data generated over the past few years enabled us to engineer hundreds of homologs
of MU1140, and select those homolog candidates with improved profiles, including homologs of higher activity and stability, lower toxicity
and with a scalable manufacturability. The best homolog candidates were further developed internally and through the use of several Contract
Research Organizations (“CROs”). We believe that this strategy represented the best and most efficient path to produce sufficient
quantities of MU1140 homologs, to support continued research, selection of a lead candidate, nonclinical studies, clinical studies and
ultimately commercialization. We intend to continue to follow this proven discovery path to identify novel MU1140 derivatives to treat
other multi-drug resistant infections and HAIs.
Regulatory
Status
We
have performed nonclinical testing on MU1140 and several of its homologs, which has demonstrated the molecule’s novel mechanism
of action. We expect to continue our research and pre-clinical development activities on derivatives of MU1140 subject to the availability
of adequate financing as we move towards the filing of an IND.
Manufacturing
While
we have been able to produce a significant increase in the fermentation titer of homologs of MU1140, we continue to work to improve on
the manufacturing through collaborations with fermentation and purification experts and third party CROs. We will need to further optimize
and scale up the production/purification scheme internally and through third party vendors. The need to examine many new homologs of
MU1140 has resulted in the need to reproduce the fermentation and purification steps on each individual homolog candidate being studied.
Each homolog requires different optimizations for both the fermentation, purification and chemical derivatization steps and in some cases
requires a new approach. As such, our work on the research and development of new lantibiotic homologs using genetically modified bacteria
continues. We believe these developments represent progress toward our goal of commercial production of sufficient quantities of our
MU1140 homologs and deliver a step in validating the lantibiotics platform targeting infectious diseases.
We
are working with a third-party manufacturer to produce additional quantities of designated homologs, based upon the developments achieved
from our work with our outside contractors. The production of additional quantities of designated homologs, that are needed for the consummation
and pursuit of our nonclinical testing activities supporting the IND filing, are ongoing. We will continue to explore improved methods
of manufacturing and synthesis to improve our yields and ultimately, potentially reduce our cost of manufacture.
Our
License Agreements
Our
NIH License Agreement
Through
our wholly-owned subsidiary, Noachis Terra, we are party to a Patent License and Biological Materials License Agreement (the “License
Agreement” or “NIH License”), dated March 23, 2020, with the United States Department of Health and Human Services
(the “HHS”), as represented by the NIAID, an Institute of the NIH. Under the terms of the License Agreement, we hold a nonexclusive,
worldwide license to certain specified patent rights (including patent applications, provisional patent applications and Patent Cooperation
Treaty (“PCT”) patent applications) and biological materials relating to the use of prefusion coronavirus spike proteins
to exploit products (“Licensed Products”) and practice processes (“Licensed Processes”) that are covered by the
licensed patent rights and biological materials for the purpose of developing and commercializing a vaccine product candidate for SARS-CoV-2.
The License Agreement is subject to certain statutory limits and reserved rights, as required under federal law and NIH requirements,
including the requirement to provide reasonable quantities of Licensed Products or materials made through the Licensed Processes for
NIH research and to manufacture Licensed Products or materials made through the Licensed Processes substantially in the United States.
We may not sublicense the intellectual property or biological materials licensed to us under the License Agreement.
Pursuant
to the License Agreement, we must use reasonable commercial efforts to manufacture, practice or operate the Licensed Products and the
Licensed Processes, including adhering to a commercial development plan and achieving certain benchmarks. Additionally, following the
first commercial sale of any Licensed Products or the practice of any Licensed Processes, we must use reasonable commercial efforts to
make the Licensed Products and the Licensed Processes reasonably accessible to the United States public and reasonable quantities of
the Licensed Products and the Licensed Processes available to patient assistance program, among other educational support activities.
The NIAID has agreed to assume responsibility for the preparation, filing, prosecution and maintenance of all patent applications and
patents covered by the licensed patent rights.
Under
the terms of the License Agreement, the NIAID is entitled to receive a non-creditable, nonrefundable upfront license issue royalty (which
has already been paid), as well as reimbursement for our pro rata share of the NIAID’s past and future patent prosecution-related
expenses. Additionally, the NIAID is entitled to receive nonrefundable minimum annual royalties, which increase each year after the first
commercial sale of any Licensed Products or the practice of any Licensed Processes, as well as benchmark royalties following our completion
of certain commercial development and sales-related benchmarks. The NIH is entitled to receive earned royalties on the annual net sales
of Licensed Products and the practice of any Licensed Processes (subject to certain reductions), at certain low- to mid-single digit
royalty rates, which rates vary based on the total amount of annual net sales and the geographic market in which those sales occur. We
must provide regular written reports to the NIAID on the development status of and royalty payments relating to the Licensed Products
and the Licensed Processes.
We
must indemnify and hold the NIAID and its associates harmless from and against all liability and damages in connection with or arising
out of (a) the use or beneficial use of the Licensed Patent rights by us, our directors, employees or third parties and (b) the design,
manufacture, distribution or use of any Licensed Products or Licensed Processes, including other products or processes developed in connection
with the Licensed Patent Rights.
Unless
terminated earlier, the License Agreement will terminate upon the earlier of (a) twenty (20) years from the first commercial sale where
no licensed patent rights exist or have ceased to exist or (b) the expiration of the last to expire of any licensed patent rights. At
this time, no patents covered by the licensed patent rights have been issued. We may terminate the License Agreement at any time, subject
to advance notice. Subject to certain cure and appeal rights, the NIAID may terminate or modify the License Agreement in the event of
a material breach or default, including, among others, the following:
(i) We become insolvent or the subject of a bankruptcy petition;
(iv) We cannot reasonably satisfy public health and safety needs; or
Our
NRC License Agreement
On
July 26, 2021, we entered into a non-exclusive Technology License Agreement (the “License Agreement”) with the National Research
Council of Canada (“NRC”) pursuant to which the NRC granted us a license to use NRC’s inventions, patents, trade secrets,
know-how, copyright, biological material, designs, and/or technical information created by or on behalf of the NRC (the “NRC Technologies”)
relating to the derivatives of CHO 2353 TM Cell Line listed in the License Agreement (the “Stable Cells”) to: (i) make, research,
and develop SARS-CoV-2 spike protein manufactured by a Stable Cell (the “Drug Substance”) within Canada, Australia, the United
Kingdom, the European Union and the United States (U.S.) (collectively the “Territory”); (ii) file regulatory approval, export
and sell the final formulation of the Drug Substance (“Products”) and (iii) engage contractors to use the Stable Cells to
make Drug Substance or Products on our behalf to be used and sold, worldwide, by us. The License Agreement was subsequently amended to
include the Delta and Omicron variants. In addition, we subsequently amended the License Agreement to broaden the non-exclusive field
of use to include all diseases caused by coronaviruses and any genetic variants thereof.
As
consideration for the grant of the license, we will pay to the NRC an annual (low five digits) license fee, with the initial portion
of the fee covering the first three years of the license. Additionally, we will pay certain milestone payments (a) upon transfer of each
Stable Cell listed in the Agreement and (b) with regard to each of the first three Products, (i) upon submission of the IND application
related thereto, (ii) upon dosing the first patient in a Phase 1 or Phase 2 clinical trial, (iii) upon dosing the first patient in a
Phase 3 clinical trial and (iv) upon first regulatory approval. Milestone payments range from the low five digits to high six digits.
In addition, Oragenics will pay a low single-digit royalty to the NRC for the sale of Products, based on sales revenue, commencing after
the first commercial sale.
Pursuant
to the License Agreement, the NRC is required to bear the responsibility and pay the costs to obtain and maintain patents related to
the NRC Technologies in the U.S., Canada, Brazil, European Union, Japan, South Korea, Singapore, Australia, China, and India, and the
NRC shall use reasonable efforts to obtain and maintain those patents. Additional countries may be requested by us, in which event, the
NRC will file and maintain such patents, at our expense.
Pursuant
to the License Agreement, we are required to indemnify and hold the NRC and its employees and agents harmless from and against all liability
and damages in connection with or arising out of all claims, demands, losses, damages, costs including solicitor and client costs, actions,
suits or proceedings brought by any third party that are in any manner based upon, arising out of, related to, occasioned by, or attributable
to the manufacturing, distribution, shipment, offering for sale, sale, or use of Products, services based on the NRC Technologies and
product liability and infringement of intellectual property rights other than copyright, if any, licensed under the License Agreement.
Unless
terminated earlier, the License Agreement will terminate twenty (20) years from the effective date of the License Agreement. Either party
may terminate the License Agreement, by giving written notice to the other party, if the other party defaults or is in breach of the
License Agreement, provided that if the defaulting party cures the breach within 60 days after the notice is given, the License Agreement
shall continue in full force and effect. The NRC may terminate the License Agreement if we become bankrupt, or insolvent, or has a receiver
appointed to continue its operations, or passes a resolution for winding up. The License Agreement contains customary confidentiality
obligations.
Other
Product Candidates and Technologies
We
have historically developed other product candidates and potential product candidates. For example, we developed a weight loss candidate,
LPT3-04, and a topical treatment to prevent dental carries which we refer to as SMaRT Replacement Therapy. We out licensed LPT3-04 to
a third party and continue to monitor our licensee’s performance under the license. We do not expect the LPT3-04 license to have
a material effect on our business or operations. While we retain certain intellectual property rights with respect to homologs through
our (i) prior relationship with Texas A&M University Systems and (ii) ILH Holdings (as assignee of Precigen) that could allow for
the continued research and development of compounds for the SMaRT replacement Therapy, we do not intend to pursue further development
of SMaRT Replacement Therapy and as such we do not consider these rights to be a material part of our business and operations.
Government
Regulations
In
the United States, foods (including dietary supplements), drugs (including biological products), medical devices, cosmetics, tobacco
products and radiation-emitting products are subject to extensive regulation by the FDA. The FDC Act and other federal and state statutes
and regulations govern, among other things, the manufacture, distribution and sale of these products. These laws and regulations prescribe
criminal and civil penalties that can be assessed, and violation of these laws and regulations can result in enforcement action by the
FDA and other regulatory agencies.
FDA
Regulation of Drugs-New Drug Approval Process
Pharmaceutical
products are subject to extensive regulation by the FDA. The FDC Act, and other federal and state statutes and regulations, govern, among
other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution,
post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products. Failure to comply with applicable
U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending
NDAs or BLAs, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution,
injunctions, fines, civil penalties and criminal prosecution.
Pharmaceutical
product development for a new product or certain changes to an approved product in the United States typically involves the following
steps before a biological product or new drug may be marketed in the United States:
● FDA approval of the NDA or BLA; and
● payment of user and establishment fees, if applicable.
Satisfaction
of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the
type, complexity and novelty of the product or disease.
Pre-clinical
tests include laboratory evaluation of product chemistry, formulation and toxicity, as well as animal trials to assess the characteristics
and potential safety and efficacy of the product. The conduct of the pre-clinical tests must comply with federal regulations and requirements,
including good laboratory practices. The results of pre-clinical testing are submitted to the FDA as part of an IND along with other
information, including information about product chemistry, manufacturing and controls, and a proposed clinical trial protocol. Long
term pre-clinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue after the IND is submitted.
A
30-day waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA
has neither commented on nor questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin.