VG Life Sciences (OTC Pink: VRALD) (formerly known as Viral Genetics)
has released its November 2012 Letter to Shareholders, published in its
entirety below. In the letter as released to account for certain new
developments, the Company’s President, Haig Keledjian, offers insight
into the Company’s name change, recent restructuring, and an important
milestone update into the Company’s Phase 1 physician-initiated clinical
trial for ovarian cancer, and also other operational details.
Fall 2012 President’sLetter to Shareholders
Dear fellow shareholders:
Let me bring you up to date on several significant recent developments
that ultimately, were derived from, and designed to harness the strength
of, the science that undergirds the value of the intellectual property
portfolio that we have amassed over the past 15 years, and which
provides the foundation for our future evolution and development. As we
continue our transition from a pure science and R&D company toward a
revenue-generating business, we have also taken the steps that we
believe are necessary to meet our requirements now and in the future.
Driven by the broadening scope of our efforts we have changed our name
to VG Life Sciences Inc. Our Board of Directors and I believe
this better captures our reach into not only pharmaceutical development
but bio-fuels, agricultural technology and the other high growth target
markets we are now focused on.
We have also announced several major changes to our capital structure
including a reverse stock split and the restructuring of elements of our
debt obligations. We believe this results in a capital structure that
enhances our credibility and better positions us with potential
strategic partners, institutional funding sources and the new executive
management talent that we are seeking to hire as we now go forward on
this stronger foundation.
Operationally, we just reached an important milestone in our Phase 1
physician-initiated clinical trial for ovarian cancer, and we have also
introduced yet another drug candidate (Lyme) to the FDA in a pre-IND
submission, while our VG Energy subsidiary launched a research-sized
version of its first product, LipidMax™.
Let’s discuss these, and more, in further depth. First the recent
Capital Structure and Related Changes
Since we first met Dr. Karen Newell Rogers in 2008, started
collaborating with her and her team and entering into the two Exclusive
License Agreements that now form the core of our efforts, we have spent
the better part of 5 years building a portfolio of intellectual property
that we believe has tremendous potential value going forward in drug
discovery and development, as well as the agricultural, energy and food
In building this portfolio, we also overcame legacy issues, litigation,
raised several million dollars in financing and settled several million
more in debts. While all of the above was necessary in order for us to
move forward with the portfolio of assets we now control, a byproduct
was a very high share count and, for lack of a better word, a ‘messy’
It was our belief that this created significant obstacles to raising the
capital and attaining the other resources we now need as we transition
from relatively small-scale lab tests to clinical trials.
We believe that the changes we have made will better position the
Company to obtain the necessary capital required to build real value for
shareholders. There is no question in my mind that with these changes,
and with taking the steps to deal with our balance sheet – in particular
paying down our debt – we are in a much
better position to attract interest from the sophisticated
institutional investors, strategic partners, and executive talent that
we now need.
In 2013 we plan to present at a number of investment conferences, which
are attended by institutional investors, which specialize in biotech and
life sciences companies. As we have entered into Phase 1 trials, the
audience of potential investors has greatly expanded and will continue
to, with each graduation along the FDA approval process. We are now in
the position to share our trial results and progress with institutional
investors who are very familiar with the mechanics behind the FDA
approval process, but who may be prohibited from investing in biotech
companies, before they enter FDA Phase 1 trials.
Full details of this and related changes are available in the
Company’s November 19, 2012 press release.
Other significant steps in our transition from basic discovery and R&D
towards clinical development and ultimately revenue:
University of Texas Ovarian Cancer Clinical Trial
Quick background: this clinical trial is a multi-stage process. It uses
different combinations of one of our Metabolic Disruption Technology
(MDT) compounds called hydroxychloroquine (HCQ) and an existing cancer
drug called sorafenib (marketed as Nexavar™) on patients suffering from
Stage IV ovarian cancer, and monitors for “dose limiting toxicity.” The
protocol first measures safety, and then effectiveness with the primary
target of identifying safe dosage levels at multiple stages along the
Update: The first group of patients has completed two 28-day cycles:
first of sorafenib alone and then sorafenib combined with HCQ. There
have been no major safety concerns in this first stage and enrollment
has now opened for the second group of patients who will receive an
increased dosage of sorafenib plus the same dose of HCQ. If the protocol
continues to present no major toxicity or safety issues while the
investigators increase dosages on additional patients, we expect to
identify optimum dosage of the combination. If successful, we intend for
these positive results to carry us into broader applications.
Sorafenib (brand name Nexavar™) in addition to being one of the top
selling liver and kidney cancer related drugs of all time has extended
the quality of life of thousands of patients globally and we are proud
and excited to explore enhancing the effectiveness to potentially
enhance the quality of life of thousands more. If successful in our
current efforts with ovarian cancer, it seems logical that we would
initiate discussions in creating a compound for the treatment of other
cancers, as well.
Sorafenib was approved by the FDA on December 20, 2005 for treating
certain types of kidney cancer and on November 16th, 2007 for certain
types of liver cancer which cannot be treated with surgery.
Sorafenib is co-developed and co-marketed by Bayer and Onyx
Pharmaceuticals as Nexavar. In February of 2012, Onyx reported Global
Nexavar net sales which are recorded by Onyx’s collaborator, Bayer, were
$1.008 billion and $276.8 million for the full year and fourth quarter
2011, respectively, an increase of 8% in both periods, compared to
$934.0 million and $257.4 million in the same periods in 2010. Nexavar®
(sorafenib) tablets, is an anticancer therapy currently approved for the
treatment of unresectable liver cancer and advanced kidney cancer in
over 100 countries worldwide.
Both HCQ and Sorafenib have separately been extensively studied in
humans for safety and toxicity, and they have fairly well-understood
individual safety profiles. This will be the first study to examine them
in combination using the MDT research suggesting that such a
dual-pronged approach may significantly enhance results of single agents
Ovarian cancer is a particularly lethal form of the disease afflicting
approximately 20,000 women each year in the United States. Amongst
women, it is the most lethal of the gynecological cancers and the fifth
leading cause of cancer death.
This marks the first time human patients have received one of our MDT
compounds in combination with an existing and proven cancer therapy.
This is significant for our development efforts to ascertain how our MDT
compounds, when used with existing drug therapies, enhance the results
of those therapies. I extend fulsome congratulations to our science and
medical teams. Successful completion of the next stages in this protocol
should enable us to broaden the use of this compound to other cancer
Lyme Disease Pre-IND Meeting
Earlier this quarter we embarked on our pre-IND submission to the FDA
for our Lyme disease drug candidate, which is the same molecule –
APi1177 – we are studying for the HIV/AIDS indication and had earlier
presented to the FDA in another pre-IND meeting. APi1177 is a new
molecule so there are a series of initial steps before we obtain final
approval for our protocol. Indeed, at the pre-IND meeting it was
confirmed that we must first complete a standard series of pharmacology
and toxicology animal studies prior to receiving feedback on a Lyme
protocol. Second, we were asked to provide certain follow up lab test
results – some of which are already completed, and others are now being
worked on – to the FDA. We are on a clear pathway forward.
Significantly, because we are using the same APi1177 molecule for the
Lyme disease indication as for HIV/AIDS, completion of the pharmacology
and toxicity studies would potentially enable us to move ahead with both
clinical development programs towards human trials simultaneously
(provided we meet any other applicable guidelines).
Because we are also exploring other potential indications of APi1177 in
addition to Lyme and HIV/AIDS which could further enhance the value of
the molecule itself, the value of completing these pharmacology and
toxicity studies could potentially increase even further.
We are now arranging for completion of the pharmacology and toxicology
Launch of LipidMax™ for Research
Our majority-owned subsidiary, VG Energy launched a research-sized
version of LipidMax™ for use in lab testing of LipidMax for enhancing
yields of plant and related oils. The purpose of this launch is to allow
potential industrial-scale users and buyers of LipidMax to obtain it
relatively easily under our terms and conditions, which includes a
limited license for the underlying intellectual property.
I hope you will agree that the Company has significant, credible
opportunities immediately in front of us and has taken the required
steps needed to move forward with them. We will look to accelerate our
drug pipeline and, separately and on its own terms, to support the
development of our majority-owned subsidiary, VG Energy.
We believe we have the science and the intellectual property portfolio
secured, and we have addressed some significant issues with our capital
structure – now we need to implement the plan to take the portfolio
forward into the marketplace through partnering, commercialization or
other ultimately revenue-generating activity. For this reason, I am now
focused on across-the-board changes to enhance our operations and
management team, beginning with additions to our clinical development
team at VG Life Sciences, and formalizing our ongoing global search for
seasoned senior executive level talent at VG Energy.
These are very exciting times for VG Life Sciences and VG Energy. The
more focused direction of the Company has revitalized our efforts and we
are moving toward a very promising future in a reenergized fashion. As a
major shareholder of this Company, my focus is on continuing to build
value in the shares of the Company.
As always, thank you for your ongoing support.
Haig KeledjianPresidentVG Life Sciences Inc.
The Letter to Shareholders is also available at: http://www.viralgenetics.com/shareholder-letters/Letter-to-Shareholders-Nov-12.PDF
About VG Life Sciences Inc.
San Marino, California-based VG Life Sciences Inc. discovers and
develops drug therapies from two exclusively-licensed platform
technologies based on over 60 patents: Metabolic Disruption (MDT) and
Targeted Peptides (TPT). A physician-initiated Phase I clinical trial of
an MDT compound in combination with Nexavar™ on Stage III and IV ovarian
cancer patients is ongoing at the Cancer Therapy and Research Center of
The University of Texas Health Science Center at San Antonio. A
majority-owned subsidiary, VG Energy (www.vgenergy.net),
is dedicated to exploring biofuel and agricultural applications for the
MDT platform. Founded in 1994, the biotech company is researching
treatments for drug resistant cancer, Lyme disease, Strep, Staph and
Sepsis, and HIV/AIDS. For more information, visit www.viralgenetics.com.
About VG Energy
VG Energy Inc. is an alternative energy and agricultural biotech company
that is a majority-owned subsidiary of VG Life Sciences Inc. VG Energy
holds the exclusive worldwide license to the Metabolic Disruption
Technology (MDT) patent rights for use in the increase of production of
various oils from algae, plants and seeds. VG Energy’s pivotal
discoveries could allow the biofuel industry to overcome its major
obstacle in the area of production efficiency: namely, an increase in
production yields leading to feasible economic returns on investment,
allowing renewable biodiesel to be competitive with fossil fuels. For
more information, please visit http://www.vgenergy.net.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS:
This news release contains forward-looking statements that involve risks
and uncertainties associated with financial projections, budgets,
milestone timelines, clinical development, regulatory approvals, and
other risks described by VG Life Sciences from time to time in its
periodic reports, including statements about its VG Energy, Inc.
subsidiary. None of VG Life Sciences’ drug compounds are approved by the
US Food and Drug Administration or by any comparable regulatory agencies
elsewhere in the world, nor are any non-pharmaceutical products of VG
Energy, Inc. commercialized. While VG Life Sciences believes that the
forward-looking statements and underlying assumptions are reasonable,
any of the assumptions could be inaccurate, including, but not limited
to, the ability of VG Life Sciences to establish the efficacy of any of
its drug therapies in the treatment of any disease or health condition,
the development of studies and strategies leading to commercialization
of those drug compounds in the United States, the obtaining of funding
required to carry out the development plan, the completion of studies
and tests on time or at all, the successful outcome of such studies or
tests, or the successful commercialization of VG Energy, Inc.’s
non-pharmaceutical products. Therefore, there can be no assurance that
the forward-looking statements included in this release will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the forward-looking
statements should not be regarded as a representation by VG Life
Sciences or any other person that the objectives and plans of VG Life
Sciences will be achieved.