What changed in this filing

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Item 2. Management’s Discussion and Analysis

2017-09-15 compared with 2017-06-13 · 107 added, 70 removed, 143 unchanged (55% of the section changed)

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Inc., our wholly owned subsidiary, IndUS and Sindu Research Laboratories Pvt Ltd.

As consideration for the purchase, we issued 4,512,500 shares of common stock on November 23, 2015 and 237,500 shares of common stock on December 4, 2015.

We will also be granting 41,833 stock options pursuant to the Agreement and Plan of Merger.

As consideration for the purchase, we issued 4,512,500 shares of common stock on November 23, 2015 and 237,500 shares of common stock on December 4, 2015 and granted 41,833 stock options pursuant to the Agreement and Plan of Merger.

As part of the acquisition, we appointed Dr.

Pravin Chaturvedi as our new Chief Executive Officer and Director.

IndUS is an emerging United States-India cross-border pharmaceutical company located in the Greater Boston area, which is engaged in conducting research and development activities for advancing novel therapeutics in the areas of oncology, infectious diseases and diabetes.

On September 11, 2017, we completed an exchange agreement whereby the Company exchanged with Dr.

Chaturvedi 100% of its shares of common stock of IndUS for 3,800,000 shares of common stock of Pivot, upon which Dr.

Chaturvedi resigned as Chief Executive Officer and Director.

On September 12, 2017, we entered into a licensing agreement with Altum Pharmaceuticals Inc.

(“Altum”) whereby we were granted worldwide rights to BiPhasix Transdermal Drug Delivery Technology (“BiPhasix Technology”) for the delivery and commercialization of cannabinoids, cannabidiol (“CBD”), and tetrahydrocannabinol (“THC”) based products.

Financial consideration included:

· Issuance of 2,500,000 shares of common stock on closing of the licensing agreement (issuable as at September 15, 2017);

· Issuance of 2,500,000 shares of common stock of the Company upon Health Canada Natural Product Number (“NPN”) approval for a CBD product developed using the BiPhasix Technology;

· Five percent (5%) royalties on annual net sales;

· For pharmaceutical products:

o $1,000,000 payable upon first Investigative New Drug Application approval;

o $1,000,000 payable upon positive outcome of Phase II trial in first indication;

o $2,000,000 payable upon New Drug Application approval..

Our principal executive office is located at 1275 West 6th Avenue, Vancouver, B.C.

Canada V6H 1A6, with another office at 25 Olympia Avenue, Suite K-300, Woburn, MA 01801, USA.

Canada V6H 1A6.

Our telephone number is (604) 805-7783.

Our Current Business

We are a development stage biopharmaceutical company engaged in the development and commercialization of therapeutic pharmaceutical products, focused on the strategy of identifying new therapeutic treatments to address unmet medical needs in women’s health including but not limited to urological and/or gynecological disturbances;

and advancing novel anticancer drug candidates to provide new treatment options for metastatic cancers in women that do not have adequate treatment options or have poor response to existing treatment options due to inherent or acquired mutations.

Our research and development activities are focused on i) advancing novel drug candidates for the treatment of women’s cancers including, but not limited to metastatic endometrial cancer and triple-negative breast cancer, which have limited treatment options;

and ii) leveraging novel drug delivery treatment options to allow ‘targeted’ delivery of drugs to address women’s health needs in urological and/or gynecological indications, and iii) opportunistically in-licensing later-stage drug candidates to augment our drug pipeline.

Where appropriate, we intend to depart from these strategies to opportunistically acquire additional novel treatment options to address unmet or under-served medical needs in women’s health.

Our business model currently includes the following activities:

identifying novel drug delivery technologies that will allow targeted drug delivery for drugs;

securing and developing intellectual property rights to such products;

conducting appropriate laboratory tests and clinical trials;

advancing novel drug candidates to treat women’s cancers from our acquisition of IndUS to support Investigational New Drug application to allow first-in-human trials;

opportunistically acquiring later-stage drug candidates that provide new treatment options to address unmet medical needs in women’s health in cancer and lower urinary tract symptoms;

establishing partnerships with large and specialty pharmaceutical companies and/or biotechnology companies to collaboratively develop and/or commercialize our products.

One of our areas of focus includes developing therapeutic applications for existing drugs using novel delivery technologies for the treatment of diseases and conditions specific to cancer and/or urological disturbances in women.

The diseases and conditions that are the subject of our research and development program include addressing resistant cancers affecting women’s health and developing new treatment options using novel drugs and/or novel delivery approaches to address oncological and urological conditions such as various gynecological and breast cancers as well as lower urinary tract symptoms such as overactive bladder.

Our current pipeline addresses the therapeutic areas of cancer and potentially other indications such as lower urinary tract symptoms (LUTS) and pain:

Metastatic endometrial cancer (PVT-005)

Triple-negative breast cancer (PVT-006)

PVT-005 and PVT-006 are novel and patented anticancer small molecule drug candidates acquired through the acquisition of IndUS.

These molecules are novel DNA damage response inhibitors and belong to the chemical class of pyrrolobenzodiazepine dimers (PBDs).

These molecules have shown preclinical activity in cancers that have mutations in their tumor suppression and/or DNA repair abilities and have shown ‘synthetic lethality’ when dosed as monotherapy in such resistant cancers and/or in combination with standard-of-care drugs that are used in chemotherapeutic regimens for such patients.

PVT-005 and PVT-006 have shown excellent activity in tumor cells that have genetic or epigenetic mutations in DNA mismatch repair (mlh1, MSH2), tumor suppression functions (p53, PTEN) and/or homologous recombination (HR) functions.

They have shown significant synergies with platinum-based drugs such as cisplatin, and other drugs like topoisomerase II and I inhibitors (doxorubicin and camptothecin, respectively) and receptor tyrosine kinase (RTK) inhibitors – all or some of which are part of standard-of-care chemotherapeutic regimens to treat ovarian, breast, colorectal, non-small cell lung and other cancers that affect women’s health.

Our research and development strategy is focused on developing novel treatment options to address various unmet medical needs in women’s health, including but not limited to urological issues and breast and gynecological cancers such as metastatic endometrial or triple-negative breast cancer that have inherent or acquired mutations rendering them resistant to existing treatment options and represent orphan drug designation opportunities.

We are an emerging biopharmaceutical company engaged in the development and commercialization of therapeutic pharmaceuticals and nutraceuticals, as well as drug delivery platform technologies.

On the pharmaceutical side, Pivot focuses on development of proprietary drug delivery technologies for multiple indications using small molecules, biological and botanical (e.g.

cannabinoids) products to treat unmet medical needs.

Pivot has in-licensed a patented topical transdermal drug delivery technology platform, BiPhasix, for delivery of cannabinoids.

On the nutraceutical side, Pivot focuses on the research, development, and commercialization of cannabinoid based nutraceuticals.

We will generate data to support the safety and efficacy of cannabinoids as Natural Health Product (“NHPs”) as outlined in Health Canada Regulations in order to make particular health claims.

Health Canada publishes the Natural Health Products Regulations (“NHPR”) which set out the requirements governing the sale, manufacture, packaging, labelling, importation, distribution and storage of NHPs.

According to Health Canada, the objective of the NHPR is to provide reasonable assurance that products offered for sale in Canada are safe, efficacious and of high quality.

Pivot may also follow applicable and harmonized regulations for product development and commercialization in the US, European Union and Asia Pacific regions.

Alternatively, we will commercialize certain cannabinoid products with a Licensed Producer and/or Licensed Distributor as per the regulations concerning Access to Cannabis for Medical Purposes Regulations (“ACMPR”) since certain active ingredients in cannabinoids remain restricted until new legislation permits ease of development and distribution in 2018.

Lastly, Pivot may also develop products containing cannabinoid active ingredients obtained from industrial hemp according to the Industrial Hemp Regulations (“IHR”) permitting such products provided they are sourced from industrial hemp.

Otherwise stated, this means that the plants and plant parts of the genera Cannabis, the leaves and flowering heads of which do not contain more than 0.3% THC w/w, and includes the derivatives of such plants and plant parts.

Our pipeline targets indications such as cancer supportive care, pain and inflammation, women’s sexual dysfunction, dermatology and eye disease.

Our overall strategy includes the following:

Acquire market-ready natural health products from third-parties for rebranding and re-sale;

Acquire cannabinoid-based food additives for consumer sales;

Develop cannabinoid-based natural health products using our BiPhasix topical platform technology;

Develop pharmaceutical products delivered using our BiPhasix topical platform technology;

Obtain partnerships with Health Canada approved Authorized Licensed Producers and/or Licensed Distributors, which can provide restricted and non-restricted cannabinoids as per the ACMPR or the IHR;

Acquire novel proprietary drug delivery technologies, for example, metered dose, intra-nasal, suppositories;

Make an application at the appropriate time to acquire Health Canada’s Authorized Licensed Producers and Licensed Dealers licenses as per the ACMPR;

Out-license our platform technologies to Licensed Producers or Licensed Distributors and other drug developers;

Secure and develop further intellectual property;

Opportunistically acquire later‑stage drug candidates that provide new treatment options to address unmet medical needs in health care;

Establish partnerships with large and specialty pharmaceutical companies and/or biotechnology companies to collaboratively develop and/or commercialize our products.

Our Research and Development Strategy

Our management team has implemented a business minded and cost conscious approach to product research and development by focusing on development of novel therapies to address unmet needs in women’s health.

Our research and development strategy will apply novel delivery options for new and/or existing drugs to address unmet medical needs affecting women’s health as well as advance some of its patented and proprietary novel anticancer drugs in gynecological and/or breast cancers through its recent acquisition of IndUS.

In order for a drug to be successful, it must be both efficacious and acceptably safe.

Before a drug may be commercially marketed, it must be scrutinized and approved by applicable health authorities (such as Health Canada and the Food and Drug Administration (“FDA”) in the United States) in each country or jurisdiction where it is sought to be sold.

Our research and development strategy will apply novel drug delivery options for new and/or existing drugs or NHPs.

For a drug to be successful it must be both efficacious and acceptably safe.

Before a drug may be commercially marketed, it must be scrutinized and approved by applicable health authorities (such as Health Canada and the FDA in the United States) in each country or jurisdiction where it is sought to be sold.

In pharmaceutical research and development, clinical trials are conducted to assess the safety and efficacy of the drug and the data to be collected for such new drugs.

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Furthermore, approval rates for new drugs at each clinical trial stage are prohibitively low, which may require the sponsor to finance additional trials or abandon the drug under development altogether.

Our research and development strategy includes the development of novel anticancer drugs targeting subsets of women’s cancer patients that have metastatic endometrial, triple-negative breast and/or ovarian cancer, to explore the opportunity of securing an orphan drug designation (intended for patient populations <200,000 in the US).

Since our anticancer portfolio has novel drugs that will require the conduct of nonclinical and clinical studies for new molecular entities (NMEs);

we may also use targeted delivery options for approved (generic) drugs to avoid the higher cost of repeating one or more pre-clinical or clinical, safety, pharmacokinetic or other tests by applying novel drug delivery approaches to get targeted delivery of drugs and get a quicker time to market by leveraging a US regulatory pathway termed 505b2 applications.

In doing so, a company may reduce the time required to complete the necessary research and development activities, which can typically take in excess of ten years, by more than half, as well as reduce the corresponding development costs.

Our acquisition of Greater Boston-based IndUS has provided us with a portfolio of novel, patented and proprietary, novel anticancer drug candidates from multiple chemical classes of molecules referred to as pyrrolobenzodiazepine dimers (PBDs).

These molecules have shown excellent anticancer potential during their initial biological testing conducted at the National Cancer Institute in Bethesda, MD.

Subsequent to their initial biological evaluation, chemical scale-up and formulation studies were conducted to evaluate their pharmacokinetics in rats and two novel and patented pyrrolobenzodiazepine dimers were prioritized for advancement through preclinical studies to support first-in-human studies.

PVT-005 and PVT-006 provide novel treatment options in combination with existing chemotherapeutic regimens to address unmet medical needs in women’s cancers.

Our initial focus for PVT-005 is in patients with metastatic endometrial cancer, which harbors microsatellite (genomic) instability mutations in DNA replication and repair pathways that render the cancer resistant to many existing chemotherapy options.

It is estimated that approximately 43,000 women in the United States have metastatic endometrial cancer that would become eligible for new therapy options following their initial treatments and PVT-005 will be added to the standard chemotherapeutic regimen(s) that will be used to treat metastatic endometrial cancer.

Similarly, PVT-006, a novel and patented pyrrolobenzodiazepine dimer, distinct from PVT-005, has been identified as a lead candidate to address unmet medical needs of women with triple-negative breast cancer.

Triple-negative breast cancer is a very aggressive form of breast cancer that affects younger women, predominantly of African-American descent.

It is estimated that approximately 170,000 women in the United States have triple-negative breast cancer.

Five different molecular subtypes of triple-negative breast cancer have been identified and the basal-like subtype of triple-negative breast cancer (BL-TNBC) affects at least 40,000 women in the United States.

PVT-006 is more likely to be effective in combination with existing anticancer agents, in basal-like triple-negative breast cancer subtype due to their mutations in DNA repair and replication pathways, which PVT-006 targets as its mechanism of action.

Preclinical safety studies will be conducted over the next 12 months to advance at least one of these candidates to an IND-stage to allow initiation of clinical studies in these highly unmet medical needs in women’s cancer.

We will also develop products regulated under Canada’s Natural Health Products Guidance and support claims with clinical based data as per current regulations.

Preclinical safety studies for pharmaceutical or NHP product development will be conducted over the next 12 months to advance at least one of our product candidates.

Our Product Candidates

PGS-N005 (Female Sexual Dysfunction CBD Topical Cream)

Using our BiPhasix platform technology, we will develop and commercialize a topical cream containing CBDs (“PGS-N005”) for perimenopausal, menopausal and post-menopausal women who have noticed a decline in sexual desire and response, known as hypoactive sexual desire disorder.

Up to 63% of sexually active women in the U.S.

might be affected by female sexual dysfunction (“FSD”).

While erectile dysfunction in men has been extensively researched, very little has been completed on FSD which can involve reduced sex drive, difficulty becoming aroused, vaginal dryness, lack of orgasm and decreased sexual satisfaction.

The FSD market in the U.S.

is estimated to exceed $4 billion with over 50 million potential sufferers.

PGS-N007 (Psoriasis BiPhasix CBD Topical Cream)

Using our BiPhasix platform technology, we will develop and commercialize a topical cream containing CBDs (“PGS-N007”) for psoriasis.

Preclinical research has shown that CBD has potent anti-inflammatory properties suggesting that cannabinoids may be helpful for inflammation-related skin conditions like psoriasis and eczema.

CBD, THC and other cannabinoids are anti-psoriasis agents.

Under a psoriasis condition, skin cells are replaced every three to five days rather than the normal 30 days.

This excessive and rapid growth of the epidermal layer of the skin generates red, itchy and scaly patches, which may be localized or completely cover the body.

Psoriasis is generally considered an autoimmune and genetic disease triggered by environmental factors.

Cold, medications, infections, traumas, body and psychological stress may play a role in starting the disease.

Psoriasis is not contagious and there is no current cure for it.

However, various treatments can control the symptoms.

Psoriasis is associated with an increased risk of psoriatic arthritis, lymphomas, cardiovascular disease, Crohn's disease and depression.

Psoriatic arthritis affects up to 30% of individuals with psoriasis.

1 https://www.researchgate.net/publication/7977139_Female_sexual_dysfunction

2 https://www.royalqueenseeds.com/blog-cbd-can-relieve-psoriasis-by-balancing-immune-systems-response-n423

Results of Operations

The following summary of our results of operations should be read in conjunction with our financial statements for the period ended April 30, 2017, which are included herein.

Our operating results for the three months ended April 30, 2017 and 2016 are summarized as follows:

The following summary of our results of operations should be read in conjunction with our financial statements for the period ended July 31, 2017, which are included herein.

Our operating results for the three and six months ended July 31, 2017 and 2016 are summarized as follows:

Three Months Ended

Six Months Ended

Foreign exchange (gain) loss

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Net Income (Loss)

For the three months ended April 30, 2017, our net loss decreased by $3,012,000 as compared to the three months ended April 30, 2016.

During the three months ended April 30, 2016, $3,030,288 of stock options vested as compared to $773 for the three months ended April 30, 2017.

$ (1,179,398 )

$ (4,511,210 )

For the three months ended July 31, 2017, our net loss decreased by $1,173,842 as compared to the three months ended July 31, 2016.

During the three months ended July 31, 2016, $795,248 of share-based compensation was recognized related to vesting of stock options granted to management, directors, consultants and advisors compared to $4 for the three months ended July 31, 2017.

In addition, during the three months ended July 31, 2017, we recognized $160,000 of gain on settlement of debts related to accrued consulting fees forgiven.

For the six months ended July 31, 2017, our net loss decreased by $4,185,842 as compared to the six months ended July 31, 2016 due to $3,858,395 of share-based compensation recognized during the six months ended July 31, 2016 related to vesting of stock options as compared to $773 recognized during the six months ended July 31, 2017.

In addition, during the six months ended July 31, 2017, we recognized $160,000 of gain on settlement of debts related to accrued consulting fees forgiven.

We have not earned any revenues since our inception and we do not anticipate earning revenues in the upcoming quarter.

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Working Capital (Deficit)

Our total current assets as of April 30, 2017 were $63,502 as compared to total current assets of $129,758 as of January 31, 2017.

$ (1,287,374 )

$ (1,477,221 )

Our total current assets as of July 31, 2017 were $33,138 as compared to total current assets of $129,758 as of January 31, 2017.

The decrease was primarily due to operating expenditures paid during the period.

Our total current liabilities as of April 30, 2017 were $1,799,395 as compared to total current liabilities of $1,606,979 as of January 31, 2017.

The increase in current liabilities was primarily attributed to the accrual of management fees pursuant to management agreements during the period.

Three Months Ended

Our total current liabilities as of July 31, 2017 were $1,320,512 as compared to total current liabilities of $1,606,979 as of January 31, 2017.

The decrease in current liabilities was primarily attributed to forgiveness of accrued management and consulting fees during the three months ended July 31, 2017.

Six Months Ended

Net Cash Used In Operating Activities

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Operating Activities

During the three months ended April 30, 2017, our cash used by operating activities decreased by $11,343 when compared to cash used in operating activities during the three months ended April 30, 2016.

The decrease in cash used for operating activities was a result of continued efforts at cash conservation.

During the six months ended July 31, 2017, our cash used by operating activities increased by $14,444 when compared to cash used in operating activities during the six months ended July 31, 2016.

The increase in cash used for operating activities was a result of payments made related to professional fees.

Investing Activities

We did not have any investing activities during the three months ended April 30, 2017 and 2016.

We did not have any investing activities during the six months ended July 31, 2017 and 2016.

Financing Activities

During the three months ended April 30, 2017, we received $3,000 (2016 - $nil) in cash from financing activities.

We will require additional funds to fund our budgeted expenses over the next 12 months.

These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares.

During the six months ended July 31, 2017, we received $25,500 (2016 - $33,000) in cash from financing activities.

In order for our company to expand its operations, we will require additional funds.

The required additional funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares.

There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock.

Further, we may continue to be unprofitable.

We need to raise additional funds in the immediate future in order to proceed with our budgeted expenses.

Specifically, we estimate our operating expenses and working capital requirements for the next 12 months to be as follows:

Estimated Expenses

Further, we have negative cash flows from operating activities and may continue to be unprofitable.

We will need to raise additional funds in the immediate future in order to proceed with our expanded operations.

We have negative cash flows from operating activities.

If we cannot generate sufficient revenues to operate with positive cash flows from operating activities or are unable to raise additional funds, we may suspend or cease our operations.

In order for the Company to expand its operations and pursue its business plans related to development of its product candidates, we will require additional funds.

Specifically, we estimate our operating expenses and working capital requirements for the next 12 months for our expanded operations to be as follows:

Research and Development Costs:

Studies and manufacture of active product ingredient

R&D headcount

Studies of active pharmaceutical ingredient

Stage 1 – BiPhasix cream development without active pharmaceutical ingredient

Stage 2 – BiPhasix creadm development with active pharmaceutical ingredient

Scientific data

Supply of active pharmaceutical ingredient

Sales and Marketing Costs:

Market commercialization

Entertainment and promotion

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Operating Expenses:

Director fees

Office and laboratory lease

Professional fees

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Vehicles and transportation

Based on our planned expenditures, we will require additional funds of approximately $9.9 million to proceed with our business plan over the next 12 months.

Based on our expanded planned expenditures, we will require additional funds of approximately C$1.9 million to proceed with our expanded business plan over the next 12 months.

If we secure less than the full amount of financing that we require, we will not be able to carry out our complete business plan and we will be forced to proceed with a scaled back business plan based on our available financial resources.

Funds raised will be used towards the recruitment of appropriate management and research and development personnel, as well as towards product development expenditures.

Specifically, the funds will be used to cover research and development expenses associated with 1) manufacturing scale-up of both PGS-N005 and PGS-N007 at a Good Manufacturing Practices (“GMP”) certified, high potency drug manufacturing facility;

2) development and manufacture of formulation of PGS-N005 and PGS-N007 at a GMP-certified product manufacturing facility for administration of the drug candidates in animals (for safety evaluation) and subsequently to humans;

and 3) submission to appropriate regulatory authorities for NHP registration.

The amounts presented in the consolidated financial statements do not provide for the effect of inflation on our operations or financial position.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis