Item 1. Business
Item
1. Business.
General
As
used in this Annual Report, references to the “Company,” “Propanc,” “we,” “our,”
and “us” refer to Propanc Biopharma, Inc. and its consolidated subsidiary, unless otherwise indicated. In addition,
references to our “financial statements” are to our consolidated financial statements included elsewhere in this Annual
Report except as the context otherwise requires.
We
prepare our consolidated financial statements in United States dollars and in accordance with generally accepted accounting
principles as applied in the United States, (“U.S. GAAP”). In this Annual Report, references to “$” and
“dollars” are to United States dollars.
Overview
We
are a development-stage healthcare company that is currently focused on developing new cancer treatments for patients suffering
from pancreatic, ovarian and colorectal cancer. Utilizing our scientific and oncology consultants, we have developed a rational,
composite formulation of anti-cancer compounds, which together exert a number of effects designed to control or prevent tumors
from recurring and spreading through the body. Our lead product candidate, PRP, is a variation upon our novel formulation and
involves proenzymes, the inactive precursors of enzymes. As a result of positive early indications of the anti-cancer effects
of our technology, over the last year we have conducted successful pre-clinical studies on PRP and subject to us receiving adequate
financing, hope to submit a clinical trial application in the first half of 2021. We intend to develop our PRP to treat early-stage
cancer and pre-cancerous diseases and as a preventative measure for patients at risk of developing cancer based on genetic screening.
Key
Research and Development Highlights:
●
Potential
cancer treatment : We are developing PRP, an intravenous once-daily proenzyme treatment as a therapeutic option in cancer
treatment and prevention. PRP is a combination of the pancreatic proenzymes trypsinogen and chymotrypsinogen.
●
Multiple
mechanisms of action on cancerous or carcinogenic cells : PRP produces multiple effects on cancerous cells intended to
inhibit tumor growth and potentially stop a tumor from spreading through the body. This is in contrast to current cancer treatments
that lack sufficient efficacy to achieve a durable clinical response. As our research progresses, we intend to explore further
these multiple mechanisms of action in order to identify opportunities to expand our intellectual property portfolio. Furthermore,
we hope to uncover the molecular targets of the proenzymes to identify their potential for developing new compounds.
●
Encouraging
data from patient treatment : We began our development efforts by analyzing scientific research undertaken over the last
15 years, including clinical data from patients in the UK and Australia. We concluded that there is at least indirect evidence
that a formulation such as PRP may be an effective treatment against cancer and warranted further development.
4
●
Pre-Clinical
Efficacy Studies : In November 2015, we completed animal efficacy studies in mice through our contract research partner,
vivoPharm, demonstrating proof of concept in vivo . During the course of these studies, we discovered a new target therapeutic
dose range using proenzymes for treating cancer. That month, we filed a patent application in support of this discovery, as
described further herein.
●
Pre-Clinical
Toxicology Studies : In October 2016, we completed an animal study for PRP, in which we evaluated its toxicokinetic parameters
as well as its distribution and bioavailability, both before and after repeat dosages. We then initiated a second such study
in December 2016. That study escalated the dosage levels in different phases and was completed in April 2017. We observed
no major toxicological findings after PRP was administered by intravenous injection once daily throughout the study period.
●
Anticipated
Clinical Trial Application : With the successful completion of the studies described above, we believe we have accumulated
sufficient data to establish a safe and effective dosage level for PRP and advance our product development to the clinical
stage. We are currently working with our manufacturer to create the finished product that will be part of our Investigational
Medicinal Product Dossier to be submitted in connection with our anticipated first clinical trial for PRP, which we expect
will be conducted in Australia.
●
Orphan
Drug Designation : In June 2017, we received notification from the U.S. Food and Drug Administration (FDA) that PRP had
been conferred Orphan Drug Designation. This special status is granted when a rare disease or condition is implicated and
a potential treatment qualifies under the Orphan Drug Act and applicable FDA regulations. Orphan Drug status qualifies us
for various development incentives, including protocol assistance, the potential for research grants, the waiver of future
application fees, and tax credits for clinical testing if we choose to host future clinical trials in the U.S.
●
Unique
intellectual property : In addition to our pre-clinical studies, we have also focused on building a significant portfolio
of intellectual property around the use of proenzymes in the treatment of cancer, identifying new formulations, alternative
routes of administration and potential new therapeutic targets. We have filed numerous patent applications relating to PRP,
several of which have been granted while others remain pending. In the U.S., we have been issued two patents to date
(No. 9,636,359 and 10,350,239). A further application has been filed and an Examiner’s first report expected by May
31, 2022. Our patent protection extends to both PRP’s mechanism of action and the new compositions of proenzymes.
●
Research
and development expenses: During the fiscal years ended June 30, 2020 and 2019, we have spent $179,987 and $260,335, respectively,
on research and development expenses. Historically, we have assumed all of the costs associated with research and development.
In September 2018, the Company entered into a two-year collaboration agreement with the University of Jaén (the “University”)
to provide certain research services to the Company. In consideration of such services, the Company agreed to pay the University
approximately 52,000 Euros ($59,508 USD) in year one of which 31,754 Euros ($36,117 USD) was paid in fiscal 2019
and 15,410 Euros ($17,331 USD) was accrued in fiscal 2020; and a maximum of 40,000 Euros ($45,775 USD) in year two.
Additionally, in exchange for full ownership of the intellectual property the Company agreed to pay royalties of 2% of net
revenues to the University.
In August 2019, we announced that we have
developed a method to quantify the active ingredients of our lead product candidate, PRP, in preparation for the
company’s First-In-Human (“FIH”) study, planned for the second half of 2021 calendar year. The work
was conducted by Propanc’s research partner based in Berlin, Germany, who has extensive experience in the development
of functional assays for unique bio-therapeutics. This bioanalytical method development and validation plays a significant
role in evaluation and interpretation of the systemic absorption of PRP in clinical studies including its distribution, and
clinical effects throughout the body. The development of the bioanalytical assay is also an important step for the clinical
development of PRP, as Propanc evaluates sites to conduct the FIH study in advanced cancer patients, such as the Peter Mac
Center, Australia’s largest cancer hospital, which has significant experience in early stage clinical development.
Validation of the bioanalytical method will be undertaken in 2021.
5
In
November 2019, we announced today that our POP1 research and drug discovery program has made significant advancements towards
producing synthetic versions of the two proenzymes, trypsinogen and chymotrypsinogen. With the aim of producing large quantities
of trypsinogen and chymotrypsinogen for commercial use, exhibiting minimal variation between lots and without sourcing the proenzymes
from animals, the Company is undertaking a challenging research project in collaboration with the universities of Jaén
and Granada. The two active ingredients are currently naturally derived from animal sources, which combine to form our lead product
candidate, PRP. Our vision is to produce a backup product candidate to PRP which can further stabilize and enhance the effects
of the proenzymes when administered to patients. At the research laboratories at the universities of Jaén and Granada,
scientific researchers are in the process of optimizing conditions to achieve high titers of recombinant trypsinogen and chymotrypsinogen
with this expression system.
In
January 2020, we announced that a Certificate for Advance Overseas Finding was received from the Board of Innovation and Science
Australia to receive up to a 43.5% “cash back” benefit from overseas R&D expenses. The finding relates to the
planned Phase 1 clinical trial – Multiple Ascending Dose Studies of proteolytic proenzymes for the treatment of pancreatic
cancer. Overseas activities to be undertaken include the development of an analytical assay for the quantification of active pharmaceutical
ingredients in the Company’s lead product candidate, PRP, and its manufacture of the finished product for the Phase 1 clinical
trial.
Company
History
We
were originally incorporated in Melbourne, Victoria Australia on October 15, 2007 as Propanc PTY LTD and continue to be based
in Camberwell, Victoria Australia. Since our inception, substantially all of our operations have been focused on the development
of new cancer treatments targeting high-risk patients, particularly cancer survivors, who need a follow-up, non-toxic, long-term
therapy designed to prevent the cancer from returning and spreading. We anticipate establishing global markets for our products.
On
November 23, 2010, our Company was incorporated in the state of Delaware as Propanc Health Group Corporation. In January 2011,
to reorganize our Company, we acquired all of the outstanding shares of Propanc PTY LTD on a one-for-one basis and Propanc PPY
LTD became our wholly-owned subsidiary. Effective April 20, 2017, we changed our name to “Propanc Biopharma, Inc.”
to better reflect our stage of operations and development. On the same date, we also effected a 1-for-250 reverse stock split
whereby we (i) decreased the number of authorized shares of our common stock to 100,000,000 (ii) decreased the number of authorized
shares of our preferred stock to 1,500,005 and (iii) decreased, by a ratio of 1-for-250 the number of retroactively issued and
outstanding shares of our common stock.
On
January 23, 2018, we filed a Certificate of Amendment to our Certificate of Incorporation to increase the number of authorized
shares of our common stock from 100,000,000 to 400,000,000. On September 21, 2018, we filed a Certificate of Amendment to our
Certificate of Incorporation to increase the number of authorized shares of our common stock from 400,000,000 to 4,000,000,000.
On June 11, 2019, we filed a Certificate of Amendment, as amended, to our Certificate of Incorporation to decrease the number
of authorized shares of our common stock from 4,000,000,000 to 100,000,000 in connection with the 1-for-500 reverse stock split
that occurred on June 24, 2019.
On
February 4, 2020, we filed a Certificate of Amendment to our Certificate of Incorporation to increase the number of
authorized shares of our common stock from 100,000,000 to 1,000,000,000 which was effected on March 13,
2020.
Important
Milestones for Propanc
●
From
the late 1990s, work from other scientists and clinicians, including Dr. Josef Novak in the U.S., and a since retired oncologist
from the Czech Republic, Dr. Frantisek Trnka, shed new light on the therapeutic potential of Professor John Beard’s
insights. Extensive laboratory work undertaken over a number of years by Novak and Trnka was reported in the journal Anticancer
Research in 2005 in the paper entitled Proenzyme Therapy of Cancer . The conclusion of Novak and Trnka from this
work was the discovery “that proenzyme therapy mandated first by John Beard nearly one hundred years ago, shows remarkable
selective effects that result in growth inhibition of tumor cells with metastatic potential.” Today, these important
scientific observations support our view that proenzymes are selective and effective in targeting malignant tumor cells and
could become an effective tool in the fight against metastatic cancer.
6
●
In
2007, Dr. Julian Kenyon, Medical Director of the Dove Clinic in the UK, and Dr. Douglas Mitchell further developed the therapeutic
concepts of Beard and identified strategies that could improve upon the therapeutic potential of Beard’s original ground-breaking
work. A suppository formulation was developed by Mandeville Medicines in Buckinghamshire, UK, at the request of, and in consultation
with, Drs. Kenyon and Mitchell, in an effort to improve on results reported in the literature pertaining to the potential
therapeutic use of proenzymes in cancer treatment. Patients were first treated with the suppository formulation in April 2007
at The Dove Clinic in the UK, and in July 2007 at the Opal Clinic in Australia. Drs. Kenyon and Mitchell, through The Dove
Clinic and Opal Clinic respectively, treated cancer patients in the United Kingdom and Australia with a suppository formulation
of proenzymes. The treatment was undertaken under special UK and Australian regulatory provisions. In the UK it was undertaken
under the regulations of the Medicines and Healthcare Products Regulatory Agency (the “MHRA”), designed for patients
who have special clinical needs that cannot be met by licensed medicinal products, and in Australia under the Therapeutic
Goods Administration (“TGA”) Special Access Scheme, a mechanism that provides for the import and/or supply of
an unapproved therapeutic good for a single patient, on a case by case basis. In both jurisdictions, patients are permitted
to receive treatment on an individual basis for compassionate use as long it is supplied by a recognized, licensed manufacturer
who is able to meet certain guidelines for unapproved products, and individual case files are maintained for patients should
the regulatory authorities require this information. No prior approval was required by either the MHRA or TGA prior to the
commencement of treatment. No suppository formulation of the proenzymes was available and it was necessary for a novel suppository
formulation to be manufactured specifically for these patients by a suitably licensed manufacturer.
●
Forty-six
late stage cancer patients suffering from a range of malignancies in the UK and Australia received treatment with the proenzyme
suppositories over periods of time ranging from one month to in excess of 17 months. Inspired by their observations in clinical
practice, Drs. Kenyon and Mitchell resolved to develop proenzyme therapy for cancer patients worldwide.
●
In
late 2007, Drs. Kenyon and Mitchell and Mr. James Nathanielsz, our Chief Executive Officer and Chief Financial Officer, developed
a strategy to commercialize the newly developed proenzyme formulation, now designated PRP. Propanc PTY LTD. was established
in Australia as a vehicle to refine, develop and commercialize novel, patented proenzyme therapeutics for the treatment of
cancer.
●
In
2008, our Scientific Advisory Board (the “Scientific Advisory Board”) comprising Professor John Smyth (Edinburgh
University), Professor Klaus Kutz (Bonn University) and Professor Karrar Khan (De Montfort University) was established. Today,
the expertise of the Scientific Advisory Board in oncology research and development will be relied upon as we initiate patient
trials and advance our products down the requisite regulatory pathways to commercialize our proenzyme therapies.
●
In
2009, a retrospective review of the patient notes from the 46 patients treated in the UK and Australia with the proenzymes
suppositories (as described above) was undertaken by Dr. Kenyon. This report was subject to analysis by Professor Klaus Kutz
who, at the time of the review, was an independent consultant in clinical pharmacology and safety, specializing in oncology.
Professor Kutz observed that no patients were reported as living for a period less than that predicted by the treating clinician
and a number of terminally ill patients lived marginally longer than predicted, particularly those suffering from pancreatic,
colorectal, ovarian and gastro-intestinal cancers. As a result of the observations made by Dr. Kenyon and Professor Kutz,
we are targeting the development of proenzyme therapy for the treatment of colorectal and pancreatic cancers for clinical
trials, and in the future targeting other cancer types as our product candidate progresses to commercialization.
7
●
In early 2008, a research collaborative partnership
was established with Professor David Tosh at the Center for Regenerative Medicine, Department of Biology and Biochemistry
at Bath University, to investigate the molecular mechanisms by which the proenzyme formulation is acting, which resulted in
us filing two provisional patents a year later. We undertook additional scientific research with Professor Tosh, Dr. Macarena
Perán, Department of Health Sciences at Jaén University, and Dr. Juan Antonio Marchal, Biopathology and Regenerative
Medicine Institute at Granada University. Important anti-cancer effects of the proenzymes were discovered, including triggering
cell necrosis (cell death) and apoptosis (programmed cell death) and significantly, the induction of cell differentiation
(i.e. inducing cancer cells to exhibit normal cell behavior). This led to us increasing our intellectual property base and
patent new pharmaceutical compositions designed to enhance the effects of proenzymes. Subsequently, two provisional patents
were combined into one Patent Cooperation Treaty (“PCT”) Application, filed on October 22, 2010 (PCT Application),
and then a year later, we completed a 30 month national phase filing deadline for an international patent and commenced entering
the national phase in countries around the world. Thus far, we have received grant status in Australia, China, Japan, Indonesia,
Israel, New Zealand, Singapore and South Africa and our application remains under examination in Brazil, Canada, the European
Union, Malaysia, Mexico and the Republic of Korea. In the United States, two patents have been issued
to date by the United States Patent and Trademark Office (No. 9,636,359 and No. 10,350,239) while another remains pending.
We also have another 3 PCT applications for proenzyme compositions that have entered national phase in major global jurisdictions.
●
In
late 2010, we made important discoveries and scientific observations, resulting in additional composition claims, which were
included in the original PCT Application, further protecting the company’s proenzyme formulation. Collaboration with
vivoPharm Pty Ltd. (“vivoPharm”), located in Melbourne, Australia, with research facilities in Hershey, Pennsylvania,
United States, identified a highly synergistic ratio of the proenzymes when combined together, resulting in increased anti-cancer
effects in several tumor cell lines. Furthermore, although α-Amylase was previously included in the early days of enzyme
therapy and in the suppository formulation developed by Dr. Kenyon and Dr. Mitchell, after evaluating the synergistic interaction
between the two proenzymes and α-Amylase, we concluded that α-Amylase did not contribute to the anti-tumor activity
of the formulation, and so it was removed. By 2011, further work completed by vivoPharm confirmed the anti-metastatic effects
of the newly combined ratio of the proenzymes in various cell line assays, and anti-angiogenic (inhibition of blood vessel
formation) properties of the proenzyme treatment in mice.
●
At
this time, we decided to access the U.S. markets in order to raise the capital needed
to finance the Company’s proenzyme treatment for future preclinical testing and
clinical trials. We incorporated as Propanc Health Group Corporation in the state of
Delaware in November 2010 and in January 2011, we acquired all of the outstanding shares
of Propanc PTY LTD on a one-for-one basis making and Propanc PTY LTD became our wholly-owned
subsidiary. In mid-2012, our common stock began trading on the Over-the-Counter Bulletin
Board and it currently trades on OTCQB.
●
In
May 2013, it was observed that proenzymes enforce the re-entry of cancer cells back into normal cellular pathways and this
may represent a novel approach to the treatment of cancer. These findings were published in Cellular Oncology , a peer
reviewed journal of the International Society for Cellular Oncology.
●
In
2014, after conducting a detailed strategic review of our scientific and preclinical research, our development team determined
that parenteral drug administration is the preferred route for the Company’s lead product, PRP. This approach is expected
to maximize results in future patient trials, by ensuring maximum exposure of the drug to the tumor site.
●
In
mid-2015, Dr. Joseph Chalil joined our Scientific Advisory Board as an independent expert to provide advice on the Company’s
drug development programs, in particular, our lead product, PRP. Dr. Chalil is a physician and executive at Boehringer Ingelheim,
one of the world’s largest privately held pharmaceutical companies.
●
Between
July 2015 and February 2016, several scientific research findings were announced demonstrating significant anti-tumor efficacy
in several animal models, including pancreatic and ovarian cancers at higher doses when administering proenzymes by intravenous
injection, dramatic suppression of cancer stems cells in cell culture by altering several key pathways involved with invasion
and metastasis, and identification of a synergistic response in a broad range of cancer types including kidney, melanoma,
brain, prostate, liver, uterine and lung cancers.
8
●
In
2016, we added additional members from our partner universities and hospital to our Scientific Advisory Board, including Dr.
Macarena Perán, who is currently Reader in Anatomy at the University of Jaén in Spain, Professor Juan Antonio
Marchal Corrales, Professor of Anatomy and Embryology at the Faculty of Medicine at the University of Granada, and Dr. Maria
García, Head of Translational Research at the University Hospital of Granada.
●
In
August 2016, we entered into a Manufacturing Services Agreement and Quality Assurance Agreement with Amatsigroup NV, formally
known as Q-Biologicals NV, a contract manufacturing organization located in Belgium. Pursuant to the Manufacturing Services
Agreement, Amatsigroup produces for us certain drug substances and product containing certain enzymes at its facility in Belgium.
We use these substances and products for development purposes, including but not limited to future clinical trials.
●
In
October 2016, we completed an animal study for PRP, in which we evaluated its toxicokinetic parameters as well as its distribution
and bioavailability, both before and after repeat dosages. We then initiated a second such study in December 2016. That study
escalated the dosage levels in different phases and was completed in April 2017. We observed no major toxicological findings
after PRP was administered by intravenous injection once daily throughout the study period.
●
On
April 20, 2017, we changed our corporate name to “Propanc Biopharma, Inc.” to better reflect our stage of operations
and development.
●
In
June 2017, we received notification from the FDA that PRP had been granted Orphan Drug Designation, a special status that
will enable us to qualify for tax credits for our future clinical trials, among other benefits.
●
In
October 2017, we published key findings relating to a combination of two proenzymes trypsinogen and chymotrypsinogen A with
potent in vitro and in vivo anti-tumor efficacy in Scientific Reports , a peer reviewed scientific journal
covering all areas of the natural sciences. It was concluded that PRP could have relevant oncological clinical applications
for the treatment of advanced or metastatic adenocarcinoma and advanced epithelial ovarian cancer.
●
In
February 2018, we announced allowance of our key patent application from the European Patent Office (EPO) covering a pharmaceutical
composition for treating cancer comprising trypsinogen and chymotrypsinogen within the European Union. The allowed patent
application is the first approval for the Company in the EU, which protects the Company’s lead product candidate, PRP,
a solution for once-daily intravenous administration of a combination of two pancreatic proenzymes trypsinogen and chymotrypsinogen.
●
In
March 2018, we completed the successful reproduction run of the manufacturing process for the Company’s two drug substances
trypsinogen and chymotrypsinogen. The successful reproduction run demonstrated scalability of our proprietary manufacturing
process to enable routine production of the two active substances for PRP. The process was developed in collaboration with
a European Contract Manufacturing Organization (CMO) experienced in the production of biopharmaceuticals.
●
In
July 2018, we entered national phase for two of our key patent applications from our intellectual property portfolio. The
first patent application, which entered national phase in July 2018, describes a method to eradicate cancer stem cells, and
a second patent application, covering proenzyme compositions for the treatment of solid tumors, completed national phase entry
mid-July 2018. National phase is a process whereby applicants file a patent application in each individual jurisdiction or
country, according to where intellectual property protection is sought.
●
In
September 2018, we entered into a two-year collaboration agreement with the University
of Jaén to provide certain research services to us. In consideration of such services,
we agreed to pay the university approximately 52,000 Euros ($59,508 USD) in year
one and a maximum of 40,000 Euros ($45,775 USD) in year two. Additionally, in
exchange for full ownership of the intellectual property we agreed to pay royalties of
2% of net revenues to the University.
9
●
In
December 2018, we announced that our foundation patent application has been granted by the Office of the Controller General
of Patents, Design and Trademarks, India. The foundation patent, which covers our lead product candidate, PRP, pioneers the
discovery of a pharmaceutical composition for treating cancer via a combination of trypsinogen and/or chymotrypsinogen pancreatic
proenzymes. As of June 30, 2020, the foundation patent has been granted in the United States, Belgium, Czech Republic,
Denmark, France, Germany, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, Switzerland, Liechtenstein, Turkey, United
Kingdom, Australia, China, Japan, Indonesia, Israel, New Zealand, Singapore, Malaysia, South Africa, Mexico, Republic of Korea
and India. It is presently under examination in Brazil and Canada.
●
In
January 2019, we announced that a cooperation agreement has been entered into between the University of Jaén and our
Company to commence the POP1 joint drug discovery program to be co-funded by both parties. The agreement coincides with the
appointment of research scientist, Mr. Aitor González, to lead the drug discovery and research activities over the
next 3 to 4 years. The objective of the program is to identify and develop suitable backup compounds to our lead product candidate,
PRP. As part of the agreement, Macarena Perán, Ph.D. and Julian Kenyon, M.D. have been appointed as joint supervisors,
representing the University and our Company, respectively. The program involves advancing new compounds through a drug screening
process, followed by preclinical and early stage clinical development. As the drug candidate progresses along the development
pathway, the collaboration will also involve the Universities of Granada and Jaén, as well as Granada and Almeria Hospitals,
which are members of FIBAO, a Public Health Foundation, based in Granada, Spain, committed to assisting commercial partners
with the development and commercialization of innovative technologies designed to benefit humankind.
●
In
March 2019, we announced that we received a notification of allowance from the United States Patent and Trademark Office (“USPTO”)
confirming both methods of treatment and composition of matter claims involving trypsinogen and chymotrypsinogen for our foundation
patent in the U.S. that covers PRP. The notification of allowance from the USPTO signifies that a USPTO examiner has determined
that PRP’s patent application is complete and meets all relevant statutory requirements.
●
In
March 2019, we announced that we have initiated development of a bio-analytical assay
intended to quantify the active ingredients of RPR in preparation for human trails. The
necessary work performed in connection with this development will be conducted by a specialist
Contract Research Organization with extensive knowledge in the development of functional
assays for different bio-therapeutics.
●
In
July 2019, we appointed Mr. Carlo Campiciano as Chief Financial Officer. Mr. Campiciano brings significant experience
to the Company across a broad range of financial disciplines in the healthcare sector, including taxation, finance, operations,
planning and financial strategy. Mr. Campiciano will assist with the transformational stage into a clinical development company,
along with the goal of up-listing to a U.S. national stock exchange.
●
In
November 2019, we announced that the POP1 research and drug discovery program has made significant advancements towards
producing synthetic versions of the two proenzymes, trypsinogen and chymotrypsinogen. With the aim of producing large quantities
of trypsinogen and chymotrypsinogen for commercial use, exhibiting minimal variation between lots and without sourcing the
proenzymes from animals, the Company is undertaking a challenging research project in collaboration with the universities
of Jaén and Granada. So far, the Company’s scientific researchers have developed a novel expression system. At
the research laboratories at the universities of Jaén and Granada, scientific researchers are in the process of optimizing
conditions to achieve high titers of recombinant trypsinogen and chymotrypsinogen with this expression system.
10
●
In
January 2020, we announced that a Certificate for Advance Overseas Finding was received from the Board of Innovation and Science
Australia to receive up to a 43.5% “cash back” benefit from overseas R&D expenses. The finding relates to
the planned Phase 1 clinical trial – Multiple Ascending Dose Studies of proteolytic proenzymes for the treatment of
pancreatic cancer, for 2018/19 and the two following financial years. Overseas activities to be undertaken include the development
of an analytical assay for the quantification of active pharmaceutical ingredients in the Company’s lead product candidate,
PRP, and its manufacture of the finished product for the Phase 1 clinical trial. The finding from the Board agreed there is
a significant link between the two supporting activities and the planned Phase 1 clinical trial, and the two activities cannot
be conducted solely in Australia. The Phase 1 clinical trial is planned to be conducted at the Peter Mac Center, one of the
world’s leading cancer research, education and treatment centers, globally and is Australia’s only public hospital
solely dedicated to caring for people affected by cancer.
●
Today,
after deepening our scientific knowledge of the anti-cancer effects of proenzymes through
our ongoing efforts with our research partners and strengthening our intellectual property
portfolio by filing our patents in countries around the world, we believe we are ready
to undertake human clinical trials and subject to receiving adequate financing, we hope
to submit a clinical trial application in the second quarter of 2021 calendar
year.
The
Problem
In
the early phases of tumor progression, cancer cells multiply near the site where their predecessors first began uncontrolled proliferation.
The result, usually over a long period of time, is a primary tumor mass. Tumors often need to reach a large size before they make
themselves apparent to the individual concerned, or the clinician screening for them.
Eventually,
tumors of substantial size may begin to compromise the functioning of organs in which they have arisen and begin to evoke symptoms.
In many cases, the effects on normal tissue function come from the physical pressure exerted by the expanding tumor masses. For
example, large tumors in the colon may obstruct digestion products through the lumen, or in the lungs, airways may be compromised.
As
dangerous and threatening as these primary tumors are, they are ultimately responsible for only about 10% of deaths. A far greater
threat often arises for the patient, even after a primary tumor has been identified and removed. This threat involves cancerous
growths that are discovered at sites far removed from the locations in their bodies where their primary tumors first appeared.
These cancerous growths, called metastases, are responsible for approximately 90% of patient deaths from cancer. Metastases are
formed by cancer cells that have left the primary tumor mass and traveled by the body’s blood and lymphatic vessels (a vein-like
vessel carrying lymph, or white blood cells, from the tissues) to seek new sites and form new colonies. For example, breast cancers
often spawn metastatic colonies in many tissues throughout the body including the brain, liver, bones, and lungs.
For
primary tumors that have not yet metastasized, current treatments for cancer can be effective in initially reducing tumor burden.
However, for many forms of cancer, current treatments lack sufficient efficacy to achieve a long lasting clinical response. Therefore,
a vast majority of patients who succumb to cancer are killed by tumors that have metastasized. According to the National Cancer
Institute’s SEER Cancer Statistics Review (2001 – 2007), of the patients diagnosed with late stage metastatic breast
cancer, only 23% are expected to live longer than five years. This is compared to a 98% five-year survival rate for an early stage
breast cancer patient when the cancer is confined to the primary site.
The
invasion-metastasis cascade
The
great majority of life-threatening cancers occur in epithelial tissues, yielding carcinomas. Epithelial cells generally have a
multi-sided, uniform shape. They have well defined contact points with neighboring cells and a strong attachment to the underlying
connective tissue, or stroma, which creates a framework for solid tumors in the body. Separating the two is the specialized type
of extracellular matrix, known as the basement membrane.
11
By
definition, carcinomas that originate on the epithelial side of the basement membrane are considered to be benign ; as long
as the cells forming them remain on the same side. However, many carcinomas acquire the ability to penetrate the basement membrane,
and individual cancer cells or groups of cancer cells begin to invade the stroma. This mass of cells is now reclassified as malignant .
Often, many pathologists and surgeons reserve the label “cancer” for those epithelial tumors that have acquired this
invasive ability.
Thereafter,
carcinoma cells may invade into lymphatic or blood micro vessels. The latter may then transport these cancer cells to distant
sites in the body where they may be trapped and subsequently form new metastases.
It
is important to note, that even before cells penetrate the basement membrane, they often stimulate angiogenesis (blood
vessel formation) on the stromal side of the membrane, by expressing angiogenic proteins through the porous barrier. Not only
does this enhance the ability of malignant cells to circulate into the blood, but also provides an important feedback loop for
the cancer cell to maintain its invasiveness.
Understanding
the mechanism by which benign cells change to a malignant state is therefore pivotal to developing anti-cancer treatments that
have sufficient efficacy to achieve a long lasting clinical response.
The
epithelial-mesenchymal transition and associated loss of E-cadherin expression enable carcinoma cells to become invasive.
Epithelial
cells can undergo a transformation to a different cell type, called mesenchymal cells, through a process called the epithelial-to-mesenchymal
transition (“EMT”). Mesenchymal cells have an elongated spindle shape, lack orderly contacts with neighboring cells
and can survive without contact with a surface or connective tissue. The EMT process is a series of events that normally occur
during the development of tissues and organs prior to birth, and also apply to normal wound healing processes. However, the same
EMT process can also be applied to epithelial cancer cells, or carcinomas. When epithelial carcinoma cells residing in a solid
tumor undergo the EMT process, the resulting mesenchymal cancer cells can invade through local barriers and metastasize to other
parts of the body.
In
addition to becoming invasive and motile after undergoing the EMT process, the resulting mesenchymal cells have significantly
increased resistance to current cancer treatments. For example, in Cancer Research in 2005, it was reported that lung cancer
cells expressing mesenchymal biomarkers appeared to be resistant to Tarceva and other targeted anti-cancer agents when transplanted
into mice.
12
At
the center of this critical process for transforming benign cells into carcinomas, is the protein Epithelial Cadherin (“E-Cadherin”).
In normal cells, E-cadherin is located in the membrane and involved in maintaining cell to cell contact, which is critical to
normal function and structure of epithelial tissues. The individual E-Cadherin molecules are attached to the actin (scaffolding,
or cytoskeleton structure) within the cell, anchored by β-catenin, a protein which helps form the junction between epithelial
cells. As well as forming an anchor between epithelial cells, β-catenin is also involved in gene transcription, a process
by which DNA (deoxyribose nucleic acid) is converted into RNA (ribose nucleic acid) within the nucleus of a cell for the purpose
of producing new proteins normally associated with routine cell function.
In
the case of tumors, when cells become invasive, E-Cadherin expression decreases substantially, and β-catenin becomes free
within the cell, which may then migrate to the nucleus and induce expression of the EMT program. Furthermore, once cells undergo
an EMT, they begin to produce their own cytokines (cell signaling molecules), such as Transforming Growth Factor β, (“TGF-β”).
This protein plays a critical multi-functional role in promoting angiogenesis, immunosuppression (suppressing the immune system
from recognizing and attacking cancer cells), and maintaining their mesenchymal cell structure for prolonged periods via a feedback
mechanism. Studies also suggest that TGF-β works with β-catenin to cause epithelial cancer cells to undergo an EMT.
13
A
study in the British Journal of Cancer in 2011 demonstrated that in cholangiocarcinoma (bile duct cancer) cell lines, treatment
of TGF-β increased cell migration, invasion and mesenchymal changes. Furthermore, expression of E-cadherin and N-cadherin
was measured from resected (cut out) specimens from extra-hepatic (outside the liver) cholangiocarcinoma patients. Patients with
low E-cadherin expression had a significantly lower survival rate than patients with high E-cadherin expression. They concluded
the cadherin switch via TGF-β induced EMT in extra-hepatic cholangiocarcinoma leads to cancer progression.
Conversely,
in studies of several types of carcinoma cells that had lost E-cadherin expression, re-expression of this protein strongly suppressed
the invasiveness and motility of these cancer cells.
Together,
these observations indicate that E-Cadherin levels is a key determinant of the biological behavior of epithelial cancer cells
and that the cell to cell contact constructed by E-cadherin molecules impede invasiveness and hence metastasis.
Our
Solution
Our
solution is to develop and commercialize a long-term therapy to prevent tumor recurrence and metastases, the main cause of patient
death from cancer. We believe this problem can be addressed by developing a proenzyme formulation specifically targeting malignant
carcinoma cells to create a long-lasting clinical benefit to the patient.
Propanc’s
Theory Proenzymes Regulate Cell Proliferation
More
than 100 years ago, Professor John Beard, a comparative embryologist, made an observation that the pancreas develops in most vertebrates
at the time when the placenta begins to slow its rate of growth. He hypothesized that enzymes produced by the developing pancreatic
gland curtail trophoblastic invasion (a rare condition in which abnormal cells grow inside the uterus from tissue that forms after
conception) and suggested that pancreatic extracts should have a similar inhibitory effect on invasive tumors.
Subsequently
in the late 1990s, after following Professor Beard’s recommendations, Drs. Novak and Trnka hypothesized that administration
of proenzymes, rather than the enzymes, was of crucial importance to the clinical effectiveness of the treatment approach first
developed by Professor Beard, and that the precursor nature of the active enzymes may offer protection against numerous serpins
(proteins which can inhibit proenzymes) in the blood.
As
knowledge of tumor cell and molecular cell biology has increased over the years, our scientists and research partners have made
important scientific discoveries identifying that proenzymes suppress the EMT program and induce cell differentiation, i.e., return
cancerous cells towards normal cell behavior, or a benign state.
After
more than 100 years, the initial observations made by Professor Beard may have a potential common link between embryogenesis and
cancer, by which cells are able to become motile and invasive, via the EMT program, where the administration of proenzymes may
regulate cell proliferation as a means to controlling carcinomas.
PRP
Our
lead product, PRP, is a novel, patented formulation consisting of two proenzymes, trypsinogen and chymotrypsinogen, combined at
a ratio of one-to-six (1:6), to be administered intravenously. After establishing proof of concept in vivo as described
earlier, supplemented by laboratory research at the Universities of Jaén and Granada on the mechanism of action of the
proenzyme mixture, evidence suggests PRP may be effective against a range of solid tumors.
14
Selectivity
Research
published by Novak and Trnka in Anticancer Research (2005) suggests that the proenzymes in our product, trypsinogen and chymotrypsinogen,
exhibit specificity for tumor cells and not normal cells. Once activated, they in turn activate Protease Activated Receptors Type
2 (“PAR2”), which are located on the cell membrane and involved with cancer cell proliferation. Activation of PAR2
results in a cascade of intracellular activities, including activation of a major component of the cell which controls its structure
and architecture, the actin cytoskeleton. In a cancer cell, proenzymes have the effect of converting globular actin into filamentous
actin, which causes the cell structure to collapse and induce cell death. This reduces tumor volume and is often seen in clinical
practice.
Anti-Cancer
Effects and Mechanism of Action
PRP
consists of proenzymes which are known to influence a number of pathways critical for cancer cells to invade, grow and metastasize.
Research published in collaboration with our research partners at Jaén and Granada Universities in the Journal of Cellular
Oncology in 2013 shows the clinical benefits of PRP appear to result from enhanced differentiation of tumor cells, which inhibits
proliferation and consequently reduces their ability to invade and metastasize.
Specifically,
the research showed that proenzymes:
●
induce
a dose-dependent inhibition of cell growth, triggering apoptosis and cell necrosis;
●
enhance
expression of epithelial markers, such as E-cadherin and β-catenin;
●
decrease
expression of EMT transcription factors responsible for coding specific gene sequences from DNA, associated with TGF-β
cell signaling pathways; and
●
induce
malignant cells to differentiate to benign forms.
Once
activated, proenzymes influence the micro-immune environment around the cell, altering a number of pathways critical for supporting
cancer cell growth, invasion and metastasis. This includes interacting with proteinases and cell signaling pathways in the extracellular
matrix, whilst also interacting directly with cell surface proteins that effect the internal pathways of the cancer cell, triggering
re-expression of epithelial markers, reducing important EMT markers, and inducing a series of cellular activities which alters
the cancer cell’s morphology (structure) from a malignant to a benign state. Up to four pathways related to cancer spread
and metastasis, including TGFΒ, Hippo, Wnt and Notch pathways were regulated by proenzymes.
15
Planned
Clinical Development
PRP
recently completed preclinical development. A First-In-Human (FIH), Phase Ib study in patients with advanced solid tumors, evaluating
the safety, pharmacokinetics and anti-tumor efficacy of PRP is planned to commence in the second half of 2021 calendar year in
a jurisdiction to be selected by us, subject to us receiving adequate financing, and is hoped to be completed within twelve months.
The study will be an open-label, multicenter, non-comparative study of PRP administered at increasing dose levels, with once daily
intravenous injections over a 28-day cycle, with at least 20 and up to 40 patients enrolled.
The
Phase Ib study is planned to be followed by two open Phase IIa studies evaluating the safety, pharmacokinetics and anti-tumor
efficacy of PRP administered intravenously to patients with locally advanced or metastatic pancreatic adenocarcinoma, or to patients
with advanced epithelial ovarian cancer who have failed prior anti-cancer therapy regimen. These studies are envisioned to start
in parallel, shortly after the FIH Phase IIa study, and are hoped to be finalized in 2022. Both studies will be open, multicenter
phase II studies measuring overall survival of patients having received once daily intravenous administrations of PRP.
Preclinical
Development
We
have extensive in vitro and in vivo studies demonstrating the anti-tumor efficacy of a novel proenzyme formulation consisting
of a combination of trypsinogen and chymotrypsinogen in a synergistic ratio. The preclinical work was undertaken in collaboration
with our contract research organization, vivoPharm, in both Melbourne, Australia and Hummelstown, PA, United States, together
with universities we partnered with, including the Biopathology and Regenerative Medicine Institute, Center for Biomedical Research,
at the University of Granada in Granada, Spain, and the Department of Health Sciences at the University of Jaén in Jaén,
Spain. We funded both vivoPharm and the universities to carry out this research and retained the intellectual property rights
within the field relating to any discoveries based on the mechanism of action and anti-tumor effects of the proenzymes.
The
following preclinical development activities have been undertaken to date:
●
We
tested the anti-proliferative effects of trypsinogen and chymotrypsinogen in 24 cancer cell lines and determined a synergistic
ratio of 1:6, which we used to formulate PRP;
●
We
evaluated the in vitro anti-angiogenic effects of PRP, by soft-agar formation assay, and in vivo using the AngioChamber ™
assay, which is based on the normal physiological process of wound healing, to promote fibrous capsule formation around
an implanted growth factor-releasing Teflon chamber;
●
To
analyze the anti-metastatic effects of proenzymes, we studied the effects of PRP in cell invasion, cell migration, and in
the modulation of EMT related genes in pancreatic and ovarian cancer cells; and
●
We
also performed in vivo a pharmacokinetic study and assessed the anti-tumor efficacy of PRP in murine cancer models.
To accomplish this, we treated mice that were orthotopically inoculated with A2780 human ovarian cancer cells, or with Pan02
mouse pancreatic tumor cells, with PRP.
16
Determination
of Optimal Proenzyme Ratio
In
this study, we determined first the half-maximal inhibitory concentrations (IC 50 ) trypsinogen and chymotrypsinogen
to measure their effect as single test articles in an extended panel of 24 human cancer cell lines. The IC 50 values
of trypsinogen ranged from 2.5 to 17.5 mg/ml and from 1.4 to 25.2 mg/ml for chymotrypsinogen. The IC 50 values of trypsinogen
were the basis for the calculation of concentration ratios for the combination of trypsinogen and chymotrypsinogen at 1:1, 1:2,
1:4, 1:6, 1:8, and 1:10. At these ratios, the growth inhibitory properties of the combination were evaluated in 24 cancer cell
lines. Based on the coefficient of drug interaction (CDI) values, the combination of trypsinogen and chymotrypsinogen demonstrated
greater growth inhibition at ratios of 1:4, 1:6, and 1:8, compared to the 1:1 ratio in most cell lines tested. Finally, a ratio
of trypsinogen to chymotrypsinogen of 1:6 was determined to be the optimal formulation and used for later experiments.
Determination
of the Coefficient of Drug Interaction
The
representative graphs show an optimal pro-enzyme synergistic ratio of the Trypsinogen to Chymotrypsinogen as 1:6
17
Anti-angiogenic
efficacy of pancreatic proenzyme formulation
To
determine whether PRP affects angiogenesis, we used a soft-agar tube formation assay. Dispersed human umbilical vein endothelial
cells (HUVEC) organized into clusters after three hours and began to form tube-like structures after five hours that were clearly
evident after 24 hours. In contrast, PRP treated HUVECs presented a marked reduction in the number and length of closed capillary
tubes in a concentration dependent manner, with a total disappearance of the structures after treatment with trypsinogen to chymotrypsinogen
(T/C) 0.07/0.42 mg/ml.
18
To
assess if the inhibition of the tubule-like structures formation could be due to cell death caused by PRP treatment, CellTracker
Green/CMFDA staining was used to identify viable cells. Both control and PRP treated cells showed green staining, indicating that
the inhibition of cellular cords was independent from cell viability.
Furthermore,
quantification of the number of capillary-like structures at different areas of the cell revealed a dramatic and significant difference
between the number of structures formed by non-treated cells when compared with PRP-treated cells (p <0.01 vs. Control).
The
anti-angiogenic effect of PRP was additionally investigated in vivo using the AngioChamber™ assay, a model used to
assess the efficacy of anti-angiogenic treatments by measuring fibrous capsule formation in mice. In this assay the inclusion
of basic fibroblast growth factor (bFGF) in the chamber supports the induction of blood vessels development and formation of a
fibrous capsule. AngioChamber™ were excised from all post-mortem mice on the termination day, 24 hours following final treatment
(Day 5).
The
results show that fibrous capsule formation was significantly greater in the vehicle control group with bFGF captured in the chamber
(Group 2, Induction Control) than in the vehicle control group without bFGF loaded into the chamber (Group 1, Baseline Control)
(p<0.05) indicating that bFGF adequately and significantly stimulated capsule formation. Furthermore, treatment with PRP (Group
3) resulted in a significant reduction in angiogenesis compared to the induction control (Group 2), as indicated by the difference
in capsule weight (p < 0.05) with a 57% of fibrous capsule formation inhibition. Thus, PRP inhibits fibrous capsule formation
showing significant in vivo anti-angiogenic effects.
19
Anti-invasion,
anti-migration and anti-EMT effect of PRP
To
analyze the in vitro anti-metastatic effect of the proenzyme treatment, we studied the effect of PRP in cell invasion,
cell migration and the modulation of EMT related genes in cancer cells. First, to evaluate the effect of PRP on cell migration,
a key event in carcinogenesis, we performed a wound-healing assay on human pancreatic BxPC3 and human ovarian A2780 cells. Migration
is defined as the directed movement of cells on a substrate such as plastic plates occurring on 2D surfaces.
Results
show that non-treated cells migrated faster to close the gap of a scratch in the cell monolayer than PRP treated cells. PRP significantly
reduced cell migration of pancreatic BxPC3 cells and compared with control cells even enhanced the width of the wound.
Although
the A2780 ovarian tumor cell line does not grow forming a homogeneous monolayer like BxPC3, it can be observed that PRP treatment
significantly reduces the ability of the ovarian cells to migrate. Data showed significant cell migration inhibition after 24
hours and 48 hours of treatment with PRP compared to control cells.
Secondly,
we tested the inhibitory effect of the proenzyme formulation on cell invasion of colon and pancreatic tumor cells. Invasion is
defined as cell movement through an extracellular 3D matrix. The principle of this assay is based on two medium containing chambers
separated by a porous membrane through which cells transmigrate. Here, we tested different concentrations of PRP on MIA PaCa-2
pancreatic and HCT-15 colon human cancer cell lines. PRP showed a marked and significantly dose-dependent inhibition of invasion
in both cell lines. Total inhibition of cell migration was achieved from PRP concentrations of T/C 0.015/0.093 mg/ml and so on
with the other increasing concentrations tested.
20
Finally,
to investigate whether the exposure of PRP has a potential regulation in the transcriptional machinery that drives EMT in cancer
cells, expression of EMT genes were studied in BxPC3 pancreatic and A2780 ovarian human cancer cells. EMT markers in both BxPC3
and A2780 cells were affected by PRP treatment at T/C 0.07/0.42 mg/ml. Results show that PRP treatment increased the expression
of E-Cadherin (0.4 fold) (p < 0.05), whilst reduced the expressions of N-cadherin, Slug and vimentin (0.9, 0.5 and 0.6 fold,
respectively) (p < 0.01) in BxPC3 cells.
In
addition, PRP significantly up-regulated the expression of E-Cadherin (0.9 fold) (p < 0.01) and significantly down-regulated
the expression of N-cadherin and Slug (0.4 and 0.6 fold, respectively) (p < 0.01) and induced a slight, but not significant,
decrease of vimentin expression in A2780 cells.
PRP
pharmacokinetic study
To
evaluate the pharmacokinetics and organ distribution of trypsinogen and chymotrypsinogen, non-tumor bearing female athymic Nude-Foxn1nu
mice were treated with IRDye® 800CW labeled trypsinogen (5 mg/kg) plus unlabeled trypsinogen (50 mg/kg), or IRDye® 800
CW labeled chymotrypsinogen (7 mg/kg) plus unlabeled Chymotrypsinogen (300 mg/kg). Animals were euthanized at specified time-points
post-dose and plasma along with organ homogenates was prepared, then imaged via IVIS imaging system.
21
Fluorescence
was measured in organ homogenates. Mice treated with labeled T, presented a fluorescence peak in all organs between 15 minutes
and 2 hours post-dose. While mice treated with labeled C showed the maximum fluorescent emission between 15 minutes and 6 hours
post-dose. For both highest readings were observed in the kidneys and liver. Maximum levels of both IRDye®800CW labeled trypsinogen
and chymotrypsinogen A in mouse plasma occurred at 15 minutes post dose (7.5 and 72.2 ìg/ml, respectively). Levels of both
IRDye® 800CW labeled proenzymes decreased rapidly after this time.
Anti-tumor
efficacy of PRP in orthotropic mice models
The
effect of the proenzyme formulation PRP at different doses on tumor weight in orthotopically implanted pancreatic and ovary tumors
was assessed. In the pancreatic tumor control group, there was significant (*P < 0.05) reduction in mean tumor weight in animals
treated for 26 days with trypsinogen/chymotrypsinogen at 83.3/500 mg/kg (30.2 mg; 85.9% inhibition) compared with control (PBS;
214.8 mg), but not between trypsinogen/chymotrypsinogen at 27.5/165 mg/kg (196.5 mg; 8.5% inhibition) and the control (as shown
in the figure below).
Furthermore,
ovary tumor-bearing mice (as shown in the figure below) showed a significant (p < 0.05) reduction in mean tumor weight in animals
treated for 21 days with two different doses of trypsinogen/chymotrypsinogen, 9.1/54 mg/kg and 27.5/165 mg/kg, compared with control
(PBS). The mean weight of control group tumors was 2062.2 mg while the treated groups presented a mean tumor weight of 1074.2
mg and 957.3 respectively, ranging in a 50% tumor inhibition (52% - 46%).
22
Oral
pancreatic enzymes have been administered previously in a variety of circumstances and are in current clinical use in conditions
where the pancreas is unable to produce sufficient enzymes for the digestion of food. A number of oral pancreatic enzyme products
are presently approved in the U.S. for use in patients who do not produce enough pancreatic enzymes. Approved pancreatic enzyme
products include Pancreaze™ from Johnson & Johnson, CREON® from Abbott Laboratories, and ULTRASE® from Axcan
Pharma US.
PRP
is a combination of two proenzymes, trypsinogen and chymotrypsinogen, specifically formulated within a specific ratio (1:6, as
described above) designed to synergistically enhance their anti-cancer effects based on the mechanism of action. Patent protection
for PRP has been secured in multiple jurisdictions, including the United States, and continues to be sought for similar compositions
and mechanisms of action.
Oral
enzymes have also been investigated previously for the treatment of cancer and, while generating encouraging results, their widespread
use has been hampered by the very large quantities that have been considered necessary for effective treatment – 130 or
more tablets per day. The high dose used with oral delivery is considered necessary due to the oral enzymes being broken down
in the stomach and duodenum, the first part of the small intestine and very little actually being absorbed into the general circulation.
By administering a proenzyme parenterally, and using a specific proenzyme formulation, the normal breakdown of the enzymes when
taken orally is avoided and the drug can potentially be absorbed into the general circulation intact. It is also suggested that
proenzymes are resistant to inactivation by numerous protein digesting enzymes, like serpins, which are circulating in the blood.
Together with our scientific consultants, we believe that the development of a parenteral proenzyme formulation will lead to improved
efficacy in the treatment of cancer compared with oral enzyme preparations, and will substantially reduce the dose in comparison
to that used previously for oral enzyme therapy for the treatment of cancer.
Target
Indications
The
management of cancer differs widely, with a multitude of factors impacting the choice of treatment strategy. Some of those factors
include:
●
the
type of tumor, usually defined by the tissue in the body from which it originated;
●
the
extent to which it has spread beyond its original location;
23
●
the
availability of treatments, driven by multiple factors including cost, drugs approved, local availability of suitable facilities,
etc.;
●
regional
and geographic differences;
●
whether
the primary tumor is amenable to surgery, either as a potentially curative procedure, or as a palliative one; and
●
the
balance between potential risks and potential benefits from the various treatments and, probably most importantly, the patient’s
wishes.
For
many patients with solid cancers, such as breast, ovarian, colorectal, lung and pancreatic cancer, surgery is frequently the first
treatment option, often followed by first line chemotherapy with or without radiotherapy. While hopefully such procedures are
curative, in many instances the tumor returns, and second line treatment strategies are chosen in an effort to achieve a degree
of control over the tumor. In most instances, the benefit is temporary, and eventually the point is reached where the patient’s
tumor either fails to adequately respond to treatment, or the treatment has unacceptable toxicity which severely limits its usefulness.
Should
the planned Phase I, II and III clinical trials confirm the efficacy of PRP, along with the favorable safety and tolerability
profile suggested by pre-clinical studies conducted to date, we believe our product will have utility in a number of clinical
situations including:
●
in
the early stage management of solid tumors, most likely as part of a multi-pronged treatment strategy in combination with
existing therapeutic interventions;
●
as
a product that can be administered long term for patients following standard treatment approaches, such as surgery, or chemotherapy,
in order to prevent or delay recurrence; and
●
as
a preventative measure for patients at risk of developing cancer based on genetic screening.
In
the near term as part of our planned Phase I, II and III clinical trials, we plan to target patients with solid tumors, most likely
ovarian and pancreatic, for whom other treatment options have been exhausted. This is a common approach by which most new drugs
for cancer are initially tested. Once efficacy and safety has been demonstrated in this patient population, exploration of the
potential utility of the drug in earlier stage disease can be undertaken, together with investigation of the drug’s utility
in other types of cancers, such as gastro-esophageal tumors, colon or rectal carcinoma might be conducted. A Phase II study in
a back-up indication, such as advanced therapy refractant prostate cancer will also be considered. This indication is based on
positive preclinical pharmacology studies.
Development
Strategy
Our
goal is to undertake early stage clinical development of PRP through to a significant value inflection point, where the commercial
attractiveness of a drug in development, together with a greater likelihood of achieving market authorization, may attract potential
interest from licensees seeking to acquire new products. Such value inflection points in the context of cancer drugs are typically
at the point where formal, controlled clinical trials have demonstrated either ‘efficacy’ or ‘proof of concept’
– typically meaning that there is controlled clinical trial evidence that the drug is effective in the proposed target patient
population, has an acceptable safety profile, and is suitable for further development. From a ‘big picture’ perspective,
it is our intention to progress the development of our technology through the completion of our planned Phase IIa clinical trials
and then to seek a licensee for further development beyond that point.
As
part of that commercial strategy, we will:
●
continue
research and development to build our existing intellectual property portfolio, and to seek new, patentable discoveries;
24
●
seek
to ensure all product development is undertaken in a manner that makes its products approvable in the major pharmaceutical
markets, including the U.S., Europe, the UK, Australia and Japan;
●
aggressively
pursue the protection of our technology through all means possible, including patents in all major jurisdictions, and potentially
trade secrets; and
●
make
strategic acquisitions to acquire new companies that have products or services that complement our future goals.
Development
Plan and Milestones
PRP
We
plan to progress PRP down a conventional early stage clinical development pathway for:
●
regulatory
and/or ethics approval to conduct a Phase Ib study, and submit it with the applicable government agency for approval; and
●
Phase
IIa multiple escalating dose studies to investigate the safety, tolerability, and pharmacokinetics of PRP administered intravenously
to patients.
We
are currently evaluating Australia, UK and Europe as the potential destination where we may commence the Phase Ib trial. In particular,
we are closely evaluating Australia because of its research and development tax incentives, as well as a simplified regulatory
environment. As part of such incentives, eligible companies conducting clinical trials in Australia receive up to 43.5% “cash-back”
benefit in the form of a refund of their qualified research and development costs and expenses. The Company received a refund
of $199,834 AUD ($134,728 USD) and $161,383 AUD ($115,437 USD) in the years ended June 30, 2020 and 2019 respectively. We
are continuing to evaluate all options to conduct our planned clinical trials in the most cost-efficient manner, while
striving to minimize dilution to our stockholders.
We
anticipate reaching the Phase IIa proof of concept milestone in approximately three to four years, subject to regulatory approval
in Europe, and the results from our research and development and licensing activities.
Our
overhead and expenses are likely to increase from its current level as PRP progresses down the development pathway. This increase
will be driven by the need to increase our internal resources in order to effectively manage our research and development activities.
Anticipated
timelines
Below
is the timeline and a detailed discussion of our anticipated milestones and steps that we plan to take in preparation for our
planned Phase Ib clinical trial.
25
In
first quarter of 2021 calendar year, we anticipate the submission of the Clinical Trial Application for PRP in a jurisdiction
to be determined by us that would suit the best interests of the trial and our Company. We anticipate receiving approval of such
application in the first half of 2021. Following the clinical trial application, we plan to commence our Study Preparation, including
CRO Selection and Contracts, Analytical Lab Selection Contracts and Trial Sites Selection and Contracts. In connection with the
Clinical Trial Application, this product will be part of our Investigation Medicinal Product Dossier, Study Protocol and Investigator’s
Brochure. In the first half of 2021 calendar year, we hope to complete the Study Preparation with the Preparation of Logistics
and Trial Sites Initiation Visits and complete our clinical trial application review.
Commencing
in the second half of 2021 calendar year, we intend to initiate a Phase Ib study in advanced cancer patients with solid tumors
and the anticipated costs will be approximately $6.5 million. We will need to raise additional financing to fund our planned Phase
I, II and III clinical trials and for working capital.
Financial
Objectives
Multiple
factors, many of which are outside of our control, can impact our ability to achieve our target objectives within the planned
time and budgetary constraints. Subject to these caveats, our objective is to complete our planned Phase IIa study for PRP within
the proposed budget.
26
Corporate
Strategy
We
primarily outsource services, skills and expertise to third parties as required to achieve our scientific and corporate objectives.
As the business grows and gains more personnel, outsourcing will continue to be the preferred model, where fixed and variable
costs are carefully managed on a project-by-project basis. This means our research and development activities are carried out
by third parties. Additional third parties with specific expertise in research, compound screening and manufacturing (including
raw material suppliers) have been contracted as required.
Our
initial focus is to organize, coordinate and finance the various parts of our drug development pipeline. New personnel will be
carefully introduced into our Company over a period of time as our research and development activities expand. They will have
specific expertise in product development, manufacture and formulation, regulatory affairs, toxicology, clinical operations and
business development (including intellectual property management, licensing and other corporate activities).
In
the first instance, additional clinical management and development expertise is likely to be required for our lead product. Therefore,
we anticipate an increase in employees in order to effectively manage our contractors as the projects progress down the development
pathway.
This
outsourcing strategy is common in the biotechnology sector, and is an efficient way to obtain access to the necessary skills required
to progress a project, in particular as the required skills change as the project progresses from discovery, through manufacturing
and non-clinical development and into clinical trials. We anticipate that we will continue to use this model, thereby retaining
the flexibility to contract in the appropriate resource as and when required.
We
intend to seek and identify potential licensing partners for our product candidates as they progress through the various development
stages, reaching certain milestones and value inflection points. If a suitable licensee is identified, a potential licensing deal
could consist of payments for certain milestones, plus royalties from future sales if the product is able to receive approval
from the relevant regulatory authorities where future product sales are targeted. We intend to seek and identify potential licensees
based on the initial efficacy data from Phase II clinical trials. To accomplish this objective, we have commenced discussions
with potential partners in our current preclinical phase of development.
As
part of our overall expansion strategy, from time to time, we investigate potential intellectual property acquisition opportunities
to expand our product portfolio. While our initial focus is on the development of PRP as the lead product candidate, potential
product candidates may also be considered for future preclinical and clinical development. These potential opportunities have
arisen from other research and development organizations, which either own existing intellectual property or are currently developing
new intellectual property, which may be of interest to us. These opportunities are possible new cancer treatments that are potentially
less toxic than existing treatment approaches and are able to fill an existing gap in the treatment process, such as a systemic
de-bulking method which could reduce the size and threat of metastases to a more manageable level for late stage cancer patients.
We believe these potential treatment approaches will be complementary to existing treatment regimens and our existing product
candidate, PRP. No formal approaches have been made at this stage and it is unknown whether we will engage in this discussion
in the near future. However, we remain hopeful that as PRP progresses further down the development pathway, future opportunities
may arise to use the expertise of our management and scientific personnel for future prospective research and development projects.
Current
Operations
We
are at a pre-revenue stage. We do not know when, if ever, we will be able to commercialize our products and begin generating revenue.
We are focusing our efforts on organizing, coordinating and financing the various aspects of the drug research and development
program outlined earlier in this document. In order to commercialize our products, we must complete preclinical development, Phase
Ib, IIa and IIb clinical trials in Europe, the U.S., United Kingdom, Australia or elsewhere, and satisfy the applicable regulatory
authority that PRP is safe and effective. If the results from the Phase II trials are convincing, we will seek conditional approval
from the regulatory authorities sooner. Therefore, from the time we commence clinical trials, we estimate that this will take
approximately three to four years if we seek conditional approval upon completion of Phase II trials, or up to seven years if
we determine that Phase III trials are needed. As described previously, when we advance our development projects sufficiently
down the development pathway and achieve a major increase in value, such as obtaining interim efficacy data from Phase II clinical
trials, we will seek a suitable licensing partner to complete the remaining development activities, obtain regulatory approval
and market the product.
27
Current
Therapies
We
are developing a therapeutic solution for the treatment of patients with advanced stages of cancer targeting solid tumors, which
is cancer that originates in organs or tissues other than bone marrow or the lymph system. Common cancer types classified as solid
tumors include lung, colorectal, ovarian cancer, pancreatic cancer and liver cancers. In each of these indications, there is a
large market opportunity to capitalize on the limitations of current therapies.
Current
therapeutic options for the treatment of cancer offer, at most, a few months of extra life or tumor stabilization. Some experts
believe that drugs that kill most tumor cells do not affect cancer stem cells, which can regenerate the tumor (e.g. chemotherapy).
Studies are revealing the genetic changes in cells that cause cancer and spur its growth. This research is providing scientific
researchers with many potential targets for drugs. Tumor cells, however, can develop resistance to drugs.
Limitations
of Current Therapies
PRP
was developed because of the limitation of current cancer therapies. While surgery is often safe and effective for early stage
cancer, many standard therapies for late stage cancer urgently need improvement; current treatments generally provide modest benefits,
and frequently cause significant adverse effects. Our focus is to provide oncologists and their patients with therapies for metastatic
cancer which are more effective than current therapies, and which have a substantially reduced side effect profile.
While
progress has been made within the oncology sector in developing new treatments, the overall cancer death rate has only improved
by 7% over the last 30 years. Most of these new treatments have some limitations, such as:
●
significant
toxic effects;
●
expense;
and
●
limited
survival benefits.
We
believe that our treatment will provide a competitive advantage over the following treatments:
●
Chemotherapeutics :
Side effects from chemotherapy can include pain, diarrhea, constipation, mouth sores, hair loss, nausea and vomiting, as well
as blood-related side effects, which may include a low cell count of infection fighting white blood cells (neutropenia), low
red blood cell count (anemia), and low platelet count (thrombocytopenia). Our goal is to demonstrate that our treatment will
be more effective than chemotherapeutic and hormonal therapies with fewer side effects.
●
Targeted
therapies : The most common type is multi-targeted kinase inhibitors (molecules which inhibit a specific class of enzymes
called kinases). Common side effects include fatigue, rash, hand–foot reaction, diarrhea, hypertension and dyspnoea
(shortness of breath). Furthermore, tyrosine kinases inhibited by these drugs appear to develop resistance to inhibitors.
While the clinical findings with PRP are early and subject to confirmation in future clinical trials, no evidence has yet
been observed of the development of resistance by the cancer to PRP.
●
Monoclonal
antibodies : Development of monoclonal antibodies is often difficult due to safety concerns. Side effects that are most
common include skin and gastro-intestinal toxicities. For example, several serious side effects from Avastin, an anti-angiogenic
cancer drug, include gastrointestinal perforation and dehiscence (e.g. rupture of the bowel), severe hypertension (often requiring
emergency treatment) and nephrotic syndrome (protein leakage into the urine). Antibody therapy can be applied to various cancer
types, but can also be limited to certain genetic sub populations in many instances.
●
Immunotherapy :
There is a long history of attempts to develop therapeutic cancer vaccines to stimulate the body’s own immune system
to attack cancer cells. While these products generally do not have the poor safety profile of standard therapeutic approaches,
only a relatively small number of them are FDA-approved and available as compared to the number of patients diagnosed with
cancer. Furthermore, only a relatively small number of the patient population is eligible to receive and subsequently respond
to treatment, as defined by preventing tumor growth.
28
License
Agreements
We
previously sponsored a collaborative research project at Bath University to investigate the cellular and molecular mechanisms
underlying the potential clinical approach of our proprietary proenzyme formulation. As a result of this undertaking, we entered
into a Commercialization Agreement with University of Bath (UK), dated November 12, 2009 (the “Commercialization Agreement”),
where, initially, we held an exclusive license with Bath University, and where we and Bath University co-owned the intellectual
property relating to our proenzyme formulations. The Commercialization Agreement originally provided for Bath University to assign
the Patents (as defined therein) to Propanc in certain specified circumstances, such as successful completion of a clinical trial
and commencement of a Phase II (Proof of Concept) clinical trial.
On
June 14, 2012, Propanc and Bath University agreed to an earlier assignment to us of the patents pursuant to an Assignment and
Amendment Deed, on the proviso that Bath University retains certain rights arising from the Commercialization Agreement, as follows:
●
Bath
University reserves for itself (and its employees and students and permitted academic sub-licensees with respect to research
use) the non-exclusive, irrevocable, worldwide, royalty free right to use the patents for research use;
●
The
publication rights of Bath University specified in the contract relating to the original research made between the parties
with an effective date of July 18, 2008 shall continue in force;
●
Propanc
shall pay to Bath University a royalty of two percent of any and all net revenues;
●
Propanc
shall use all reasonable endeavors to develop and commercially exploit the patents for the mutual benefit of Bath University
and Propanc to the maximum extent throughout the covered territory and in any additional territory and to obtain, maintain
and/or renew any licenses or authorizations that are necessary to enable such development and commercial exploitation. Without
prejudice to the generality of the foregoing, Propanc shall comply with all relevant regulatory requirements in respect of
its sponsoring and/or performing clinical trials in humans involving the administration of a product or materials within a
claim of the patents; and
●
Propanc
shall take out with a reputable insurance company and maintain liability insurance coverage prior to the first human trials.
In
consideration of such assignment, we agreed to pay royalties of 2% of net revenues to Bath University. Additionally, we agreed
to pay 5% of each and every license agreement subscribed for. The contract is cancellable at any time by either party. To date,
no amounts are owed under the agreement.
We
continue to learn the properties of proenzymes with the long-term aim of screening new compounds for development. We anticipate
engaging in future discussions with several technology companies who are progressing new developments in the oncology field as
potential additions to our product line. Initially targeting the oncology sector, our focus is to identify and develop novel treatments
that are highly effective targeted therapies, with few side effects as a result of toxicity to healthy cells.
Intellectual
Property
We
have filed multiple patent applications relating to our lead product, PRP. The first application was filed in October 2010 in
each of the countries listed in the table below. This patent has been granted and remains in force in the United States,
Belgium, Czech Republic, Denmark, France, Germany, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, Switzerland, Liechtenstein,
Turkey, United Kingdom, Australia, China, Japan, Indonesia, Israel, New Zealand, Singapore, Malaysia, South Africa, Mexico, Republic
of Korea and India. In Brazil and Canada, the patent application remains under examination.
29
In
2016 and 2017 we filed other patent applications, as indicated below. Three applications were filed under the PCT. The PCT assists
applicants in seeking patent protection by filing one international patent application under the PCT, which allows the applicants
to seek protection for an invention in over 150 countries. Once national or regional applications are filed, the application is
placed under the control of the national or regional patent offices, as applicable, in what is called the national or regional
phase. One PCT application, filed in November 2016, entered the national phase in July 2018 in each of the countries listed in
the table below. A second application filed in January 2017 entered the national phase commencing July 2018. A third application
filed in April 2017 entered the national phase in October 2018.
No.
Title
Country
Case
Status
Date
Filed
1.
A
pharmaceutical composition for treating cancer comprising trypsinogen and/or chymotrypsinogen and an active agent selected
from a selenium compound, a vanilloid compound and a cytoplasmic reduction agent.
USA,
Belgium, Czech Republic, Denmark, France, Germany, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, Switzerland, Liechtenstein,
Turkey, United Kingdom, Australia, China, Japan, Indonesia, Israel, New Zealand, Malaysia, Singapore, Malaysia, South Africa,
Mexico, Republic of Korea and India
Granted
Oct-22-2010
Brazil
and Canada
Under
Examination
USA
Two
divisional applications granted and also under examination in Mexico and China
2.
Proenzyme
composition
Australia
Granted
Nov-11-2016
Canada,
China, Europe, Hong Kong, India, Indonesia, Israel, Japan, Malaysia, New Zealand, Singapore, South Africa and USA
Application
filed and pending
Nov-11-2016
3.
Cancer
Treatment
Australia
Accepted
Jan-27-2017
Canada,
China, Europe, Hong Kong, Israel, Japan, Malaysia, New Zealand, Singapore and USA
Application
filed and pending
Jan-27-2017
4.
Composition
of proenzymes for cancer treatment
Australia,
China, Europe, Japan, and USA
Application
filed and pending
Apr-12-2017
Further
patent applications are expected to be filed to capture and protect additional patentable subject matter based on our field of
technology relating to pharmaceutical compositions of proenzymes for treating cancer.
30
The
basis of our intellectual property protection will be built around the following elements:
●
Method
of use : Understanding the mechanism of action of the PRP proenzyme formulations, enabling the identification of new molecular
targets, potential new therapeutic compounds and identification of new formulations that are adapted to enhance activity.
●
Formulation :
We have developed an enhanced formulation containing the proenzyme trypsinogen in combination with at least one of two types
of identified compounds considered effective for providing synergistic enhancement of the proenzyme-based formulations. A
patentability assessment, based on an international prior art search, has indicated that strong potential exists for successfully
obtaining patent claims covering the formulation.
●
Composition
of Matter : Synthetic recombinant proteins designed to improve the quality, safety and performance of proenzymes used in
the proposed formulations form part of the research and development program.
Regulatory
Matters
United
States
Government
oversight of the pharmaceutical industry is usually classified into pre-approval and post-approval categories. Most of the therapeutically
significant innovative products marketed today are the subject of New Drug Applications (“NDA”). Preapproval activities,
based on these detailed applications, are used to assure the product is safe and effective before marketing. In the United States,
The Center for Drug Evaluation and Research (“CDER”), is the FDA organization responsible for over-the-counter and
prescription drugs, including most biological therapeutics, and generic drugs.
Before
approval, the FDA may inspect and audit the development facilities, planned production facilities, clinical trials, institutional
review boards and laboratory facilities in which the product was tested in animals. After the product is approved and marketed,
the FDA uses different mechanisms for assuring that firms adhere to the terms and conditions of approval described in the application
and that the product is manufactured in a consistent and controlled manner. This is done by periodic unannounced inspections of
production and quality control facilities by FDA’s field investigators and analysts.
Federal
Food, Drug and Cosmetic Act and Public Health Service Act
Prescription
drug and biologic products are subject to extensive pre- and post-market regulation by the FDA, including regulations that govern
the testing, manufacturing, safety, efficacy, labelling, storage, record keeping, advertising and promotion of such products under
the Federal Food, Drug and Cosmetic Act, the Public Health Service Act, and their implementing regulations. The process of obtaining
FDA approval and achieving and maintaining compliance with applicable laws and regulations requires the expenditure of substantial
time and financial resources. Failure to comply with applicable FDA or other requirements may result in refusal to approve pending
applications, a clinical hold, warning letters, civil or criminal penalties, recall or seizure of products, partial or total suspension
of production or withdrawal of the product from the market. FDA approval is required before any new drug or biologic, including
a new use of a previously approved drug, can be marketed in the United States. All applications for FDA approval must contain,
among other things, information relating to safety and efficacy, stability, manufacturing, processing, packaging, labelling and
quality control.
New
Drug Applications (“NDAs”)
The
FDA’s NDA approval process generally involves:
●
Completion
of preclinical laboratory and animal testing in compliance with the FDA’s good laboratory practice, or GLP, regulations;
●
Submission
to the FDA of an investigational new drug (“IND”) application for human clinical testing, which must become effective
before human clinical trials may begin in the United States;
●
Performance
of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed product
for each intended use;
31
●
Satisfactory
completion of an FDA pre-approval inspection of the facility or facilities at which the product is manufactured to assess
compliance with the FDA’s “current good manufacturing practice” (“CGMP”) regulations; and
●
Submission
to and approval by the FDA of a NDA.
The
preclinical and clinical testing and approval process requires substantial time, effort and financial resources, and we cannot
guarantee that any approvals for our product candidates will be granted on a timely basis, if at all. Preclinical tests include
laboratory evaluation of toxicity and immunogenicity in animals. The results of preclinical tests, together with manufacturing
information and analytical data, are submitted as part of an IND application to the FDA. The IND automatically becomes effective
30 days after receipt by the FDA, unless the FDA raises concerns or questions about the conduct of the clinical trial, including
concerns that human research subjects will be exposed to unreasonable health risks. In such a case, the IND sponsor and the FDA
must resolve any outstanding concerns before clinical trials can begin. Our submission of an IND may not result in FDA authorization
to commence clinical trials. A separate submission to an existing IND must also be made for each successive clinical trial conducted
during product development. Further, an independent institutional review board (“IRB”) covering each medical center
proposing to conduct clinical trials must review and approve the plan for any clinical trial before it commences at that center
and it must monitor the study until completed. The FDA, the IRB or the sponsor may suspend a clinical trial at any time on various
grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk. Clinical testing
also must satisfy extensive “good clinical practice” (“GCP”) regulations, which include requirements that
all research subjects provide informed consent and that all clinical studies be conducted under the supervision of one or more
qualified investigators.
For
purposes of an NDA submission and approval, human clinical trials are typically conducted in the following sequential phases,
which may overlap:
●
Phase
I: Initially conducted in a limited population to test the product candidate for safety and dose tolerance;
●
Phase
II: Generally conducted in a limited patient population to identify possible adverse effects and safety risks, to determine
the initial efficacy of the product for specific targeted indications and to determine optimal dosage. A Phase IIa trial is
a non-pivotal, exploratory study that assesses biological activity as its primary endpoint. A Phase IIb trial is designed
as a definite dose finding study with efficacy as the primary endpoint. Multiple Phase II clinical trials may be conducted
by the sponsor to obtain information prior to beginning larger and more extensive Phase III clinical trials;
●
Phase
III: Commonly referred to as pivotal studies. When Phase II evaluations demonstrate that a dose range of the product is effective
and has an acceptable safety profile, Phase III clinical trials are undertaken in large patient populations to further evaluate
dosage, to provide substantial evidence of clinical efficacy and to further test for safety in an expanded and diverse patient
population at multiple, geographically-dispersed clinical trial sites. Generally, replicate evidence of safety and effectiveness
needs to be demonstrated in two adequate and well-controlled Phase III clinical trials of a product candidate for a specific
indication. These studies are intended to establish the overall risk/benefit ratio of the product and provide adequate basis
for product labelling; and
●
Phase
IV: In some cases, the FDA may condition approval of a NDA on the sponsor’s agreement to conduct additional clinical
trials to further assess the product’s safety, purity and potency after NDA approval. Such post-approval trials are
typically referred to as Phase IV clinical trials.
Progress
reports detailing the results of the clinical studies must be submitted at least annually to the FDA and safety reports must be
submitted to the FDA and the investigators for serious and unexpected adverse events. Concurrent with clinical studies, sponsors
usually complete additional animal studies and must also develop additional information about the product and finalize a process
for manufacturing the product in commercial quantities in accordance with CGMP requirements. The manufacturing process must be
capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop
methods for testing the identity, strength, quality and purity of the final product. Moreover, appropriate packaging must be selected
and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration
over its shelf life.
32
The
results of product development, preclinical studies and clinical trials, along with the aforementioned manufacturing information,
are submitted to the FDA as part of a NDA. NDA’s must also contain extensive manufacturing information. Under the Prescription
Drug User Fee Act (“PDUFA”), the FDA agrees to specific goals for NDA review time through a two-tiered classification
system, Standard Review and Priority Review. Standard Review is applied to products that offer at most, only minor improvement
over existing marketed therapies. Standard Review NDAs have a goal of being completed within a ten-month timeframe, although a
review can take significantly longer. A Priority Review designation is given to products that offer major advances in treatment,
or provide a treatment where no adequate therapy exists. A Priority Review takes the FDA six months to review a NDA. It is likely
that our product candidates will be granted Standard Reviews. The review process is often significantly extended by FDA requests
for additional information or clarification. The FDA may refer the application to an advisory committee for review, evaluation
and recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory
committee, but it generally follows such recommendations.
The
FDA may deny approval of a NDA if the applicable regulatory criteria are not satisfied, or it may require additional clinical
data or additional pivotal Phase III clinical trials. Even if such data is submitted, the FDA may ultimately decide that the NDA
does not satisfy the criteria for approval. Data from clinical trials is not always conclusive and the FDA may interpret data
differently than Propanc. Once issued, product approval may be withdrawn by the FDA if ongoing regulatory requirements are not
met or if safety problems occur after the product reaches the market. In addition, the FDA may require testing, including Phase
IV clinical trials, Risk Evaluation and Mitigation Strategies (“REMS”), and surveillance programs to monitor the effect
of approved products that have been commercialized, and the FDA has the power to prevent or limit further marketing of a product
based on the results of these post-marketing programs. Products may be marketed only for the approved indications and in accordance
with the provisions of the approved label. Further, if there are any modifications to the drug, including changes in indications,
labelling or manufacturing processes or facilities, approval of a new or supplemental NDA may be required, which may involve conducting
additional preclinical studies and clinical trials.
Other
U.S. Regulatory Requirements
After
approval, products are subject to extensive continuing regulation by the FDA, which include company obligations to manufacture
products in accordance with GMP, maintain and provide to the FDA updated safety and efficacy information, report adverse experiences
with the product, keep certain records, submit periodic reports, obtain FDA approval of certain manufacturing or labeling changes
and comply with FDA promotion and advertising requirements and restrictions. Failure to meet these obligations can result in various
adverse consequences, both voluntary and FDA-imposed, including product recalls, withdrawal of approval, restrictions on marketing
and the imposition of civil fines and criminal penalties. In addition, later discovery of previously unknown safety or efficacy
issues may result in restrictions on the product, manufacturer or NDA holder.
Propanc,
and any manufacturers of our products, are required to comply with applicable FDA manufacturing requirements contained in the
FDA’s GMP regulations. GMP regulations require, among other things, quality control and quality assurance as well as the
corresponding maintenance of records and documentation. The manufacturing facilities for our products must meet GMP requirements
to the satisfaction of the FDA pursuant to a pre-approval inspection before Propanc can use them to manufacture products. Propanc
and any third-party manufacturers are also subject to periodic inspections of facilities by the FDA and other authorities, including
procedures and operations used in the testing and manufacture of our products to assess our compliance with applicable regulations.
With
respect to post-market product advertising and promotion, the FDA imposes complex regulations on entities that advertise and promote
pharmaceuticals, which include, among others, standards for direct-to-consumer advertising, promoting products for uses or in
patient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored
scientific and educational activities and promotional activities involving the Internet. Failure to comply with FDA requirements
can have negative consequences, including adverse publicity, enforcement letters from the FDA, mandated corrective advertising
or communications with doctors and civil or criminal penalties. Although physicians may prescribe legally available drugs for
off-label uses, manufacturers may not market or promote such off-label uses.
Changes
to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing
processes or facilities, require submission and FDA approval of a new NDA or NDA supplement before the change can be implemented.
A NDA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA
uses the same procedures and actions in reviewing NDA supplements as it does in reviewing a NDA.
Adverse
event reporting and submission of periodic reports is required following FDA approval of a NDA. The FDA also may require post-marketing
testing, known as Phase IV testing, risk mitigation strategies and surveillance to monitor the effects of an approved product
or to place conditions on an approval that could restrict the distribution or use of the product.
33
Orphan
Drug Designation
In
June 2017, we were notified by the FDA that PRP had been granted orphan drug designation for the treatment of pancreatic cancer.
Orphan drug designation may be granted by the FDA when a rare disease or condition is implicated and a potential treatment qualifies
under the Orphan Drug Act and applicable FDA regulations. This qualifies us for various developmental incentives, including protocol
assistance, the potential for research grants, the waiver of future application fees, and tax credits for clinical testing if
we choose to host future clinical trials in the United States.
In
October 2017, we submitted a request for a second orphan drug designation for PRP, this time for ovarian cancer.
On
November 2, 2017, we were notified by the FDA that our request was not granted. The Office of Orphan Products Development (“OOPD”)
stated that complete prevalence is used as a measure of disease in ovarian cancer, as this reflects the number of women who have
been diagnosed with disease and may be eligible for treatment with the proposed therapy. Therefore, on the date of the submission
of our application, the OOPD estimated that the prevalence of ovarian cancer was 228,110 cases. Since the prevalence exceeds the
threshold of 200,000 to qualify for orphan drug designation, they could not grant our request. We may consider resubmitting our
application if we can identify a suitable sub population in ovarian cancer, which may meet the target threshold.
European
Union
In
addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials,
commercial sales and distribution of our products. Whether or not we obtain FDA approval for a product, we must obtain approval
of a product by the comparable regulatory authorities of foreign countries before we can commence clinical trials or market our
product in those countries. The approval process varies from country to country and the time may differ than that required for
FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly
from country to country. Despite these differences, the clinical trials will be conducted according to international standards
such as Good Clinical Practice (GCP), Good Manufacturing Practice (GMP) and Good Laboratory Practice (GLP), which is recognized
by each foreign country under the International Conference of Harmonization (ICH) Guidelines. We will conduct our trials in each
foreign jurisdiction according to these standards, undertaking a First-In-Human (FIH) Phase I study in patients with advanced
solid tumors, evaluating the safety, pharmacokinetics, and anti-tumor efficacy of PRP. This will be followed by two Phase II studies
evaluating the efficacy and safety of PRP. To ensure harmonization between the jurisdictions, we intend to conduct regulatory
meetings in the country where trials are conducted, as well as the FDA and European Medicines Agency. A pre-IND (Investigational
New Drug) meeting will be held with the FDA once initial patient data has been collected from the FIH study to ensure acceptability
of future planned Phase II trials.
Under
European Union regulatory systems, we must submit and obtain authorization for a clinical trial application in each member state
in which we intend to conduct a clinical trial. After we have completed clinical trials, we must obtain marketing authorization
before it can market its product. We must submit applications for marketing authorizations for oncology products under a centralized
procedure. The centralized procedure provides for the grant of a single marketing authorization that is valid for all European
Union member states. The European Medicines Agency (the “EMA”) is the agency responsible for the scientific evaluation
of medicines that are to be assessed via the centralized procedure.
34
UK
On June 23, 2016, the
UK government held a referendum to gauge voters’ support to remain or leave the European Union. The referendum resulted
in 51.9% of UK voters in favor of leaving the European Union, commonly referred to as “Brexit.” On March 29, 2017,
the UK invoked Article 50 of Lisbon Treaty to initiate complete withdrawal from the European Union, which was effected on January
31, 2020. The center for the EMA was based in London but the European Union has relocated the center
to The Netherlands.
The
impact of Brexit on the drug approval process in the UK is uncertain, which could significantly impact Propanc as we may elect
to conduct our clinical trials for PRP in the UK. Companies based in the UK and operating in the drug industry are urging the
European Union and the UK to reach an agreement to harmonize the regulatory process once the UK officially exits the European
Union. We hope to commence our Phase IIa trials in 2021, and we are hopeful that there will be greater clarity on the regulatory
process for drug approvals in UK in the near future.
Australia
In
Australia, the relevant regulatory body responsible for the pharmaceutical industry is the Therapeutics Goods Administration (the
“TGA”). Prescription medicines are regulated under the Therapeutic Goods Act 1989. Under the Therapeutic Goods Act,
the Therapeutic Goods Administration evaluates new products for quality, safety and efficacy before being approved for market
authorization, according to similar standards employed by the FDA and EMA in the United States and European Union, respectively.
However, receiving market authorization in one or two regions does not guarantee approval in another.
Third-Party
Payor Coverage and Reimbursement
Although
none of our product candidates have been commercialized for any indication, if they are approved for marketing, commercial success
of our product candidates will depend, in part, upon the availability of coverage and reimbursement from third-party payors at
the federal, state and private levels. In addition, in many countries outside the United States, a drug must be approved for reimbursement
before it can be approved for sale in that country.
Eligibility
for reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research,
development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient
to cover costs and may not be made permanent. Reimbursement rates may vary according to the use of the drug and the clinical setting
in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing
payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare
programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where
they may be sold at lower prices than in the United States. Third-party payors often rely upon Medicare coverage policy and payment
limitations in setting their own reimbursement policies.
In
many countries outside the United States, a drug must be approved for reimbursement before it can be approved for sale in that
country. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval
by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA.
The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval. We may not obtain
foreign regulatory approvals on a timely basis, if at all. We may not be able to file for regulatory approvals and may not receive
necessary approvals to commercialize our products in any foreign market.
35
Marketing
Approvals, Pricing and Reimbursement Regulations
The
regulations that govern marketing approvals, pricing and reimbursement for new drug products vary widely from country to country.
In the United States, recently passed legislation may significantly change the approval requirements in ways that could involve
additional costs and cause delays in obtaining approvals. Some countries require approval of the sale price of a drug before it
can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted.
In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial
approval is granted.
Government
authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications
they will pay for and establish reimbursement levels. A primary trend in the U.S. healthcare industry and elsewhere is cost containment.
Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement
for particular medications. Increasingly, third-party payors are requiring that drug companies provide them with predetermined
discounts from list prices and are challenging the prices charged for medical products.
Other
Regulations
We
are also subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing
practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances. We may
incur significant costs to comply with such laws and regulations now or in the future.
Competition
The
biotechnology and pharmaceutical industries are characterized by continuing technological advancement and significant competition.
While we believe that our technology platforms, product candidates, know-how, experience and scientific resources provide us with
competitive advantages, we face competition from major pharmaceutical and biotechnology companies, academic institutions, governmental
agencies and public and private research institutions, among others. Any product candidates that we successfully develop and commercialize
will compete with existing therapies and new therapies that may become available in the future. Key product features that would
affect our ability to effectively compete with other therapeutics include the efficacy, safety and convenience of our products.
The level of generic competition and the availability of reimbursement from government and other third-party payers will also
significantly impact the pricing and competitiveness of our products. Our competitors also may obtain FDA or other regulatory
approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing
a strong market position before we are able to enter the market.
Many
of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical
testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Smaller or early-stage
companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established
companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and
establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary
to, or necessary for, our programs.
Employees
As
of September 14, 2020, we have one full-time employee and two part-time employees. In addition to our employees, we engage
key consultants and utilize the services of independent contractors to perform various services on our behalf. Some of our executive
officers and directors are engaged in outside business activities that we do not believe conflict with our business. Over time,
we may be required to hire additional employees or engage independent contractors to execute various projects that are necessary
to grow and develop our business. These decisions will be made by our officers and directors, if and when appropriate.
Our
Corporate Information
Our
principal executive office is located at 302, 6 Butler Street, Camberwell, VIC, 3124 Australia.
Available
Information
Copies
of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents that we will
file with or furnish to the SEC will be available free of charge by sending a written request to our Corporate Secretary at our
corporate headquarters. Additionally, the documents we file with the SEC are or will be available free of charge at the SEC’s
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Other information on the operation of the Public Reference
Room may be obtained by calling the SEC at (800) SEC-0330. The SEC maintains a website that contains reports, proxy and information
statements and other information regarding registrants that file electronically with the SEC. The SEC’s website is www.sec.gov .
36
We
maintain a corporate website at www.propanc.com . You will be able to access our Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports, proxy statements and other information to be
filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website as soon as
reasonably practicable after such material will be electronically filed with, or furnished to, the SEC. The information contained
in, or that can be accessed through, our website is not part of this Annual Report.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.