|Veritas Medical Technologies, Inc.
138 Main Street, Suite 101
Princeton, NJ 08540
Thomas Gifford, CFO
Benjamin Belinka, Director,Chemistry
Product Line or Service
Veritas Medical Technologies, Inc. (“VMT”) is focused on developing a new generation of site-directed sustained release formulations of pharmaceutical and biotechnology agents. Through application of its tissue-activated drug delivery technology (TADDTM), drugs can be delivery directly to the site of disease. The TADD dosage forms can decrease systemic toxicity, improve drug performance, and can last from days to weeks. The initial products being developed by VMT are derived from FDA-approved drugs for chronic inflammatory diseases (such as rheumatoid arthritis) and cancer. The Company is also developing TADD formulations of novel anti-fibrotic compounds for indications such as post-surgical adhesions, pulmonary hypertension, and sclerodermas. The Company markets its technology directly to the pharmaceutical and biotechnology companies through an aggressive business development strategy for each clinical indication relevant to its TADD technology.
The Company’s platform technology is a novel chemistry that couples pharmaceutical agents to water-soluble carriers via an enzyme-cleavable linker group to create a tissue-activated drug delivery formulation. The key to the technology (company-owned; patent pending) is the link between the drug and the water-soluble carrier. When the drug is linked to the carrier, it resides in the body as a “pro-drug”; that is, the drug is not active until it is released from the carrier by enzyme activity of the diseased tissue itself. This characteristic allows the carrier-drug combination to circulate through the body until it reaches the site where it is most needed. In this manner, highly potent drugs can be used in smaller concentrations, and toxicity is greatly diminished. When the drug is released due to a metabolic response, then it is free to react. The Company has linked a number of important pharmaceutical agents to its water soluble carriers using the TADD technology, including anti-cancer, anti-inflammatory, and anti-fibrotic agents. The drugs are released in a sustained, controlled manner, with increased efficacy and decreased toxicity. In addition to its own proprietary technology, the Company has entered into an option agreement to license a bioresorbable gel from West Pharmaceutical Services, Inc., and has rights from Rutgers University (Rutgers) and University of Medicine and Dentistry of New Jersey (UMDNJ) to license a series of
The TADD technology is used to: (1) enhance performance; (2) improve ease of use for the patients; (3) decrease the frequency of dosage, and (4) lower drug toxicity. Using its core technology, the VMT development program is progressing along two tracts: (a) providing a sustained release formulation for previously FDA-approved drugs and late-stage novel therapeutics; and (b) coupling early-stage novel pharmaceutical agents to the Company’s proprietary sustained release technology in order to fully develop a number of applications. VMT will use its drug delivery technology with: in-licensed novel pharmaceuticals from academic institutions; novel agents from biopharmaceutical companies in co-development agreements; and, in-licensed novel pharmaceuticals from pharmaceutical companies. However, VMT will initially focus on partnering with established pharmaceutical companies to provide its drug delivery technology for previously approved or generic drugs.
The market opportunity for VMT within the drug delivery sector is significant. Total U.S. sales for pharmaceutical products developed by utilizing drug delivery technology has grown from $8.3 billion in 1994 to over $17.5 billion in 1999, a growth rate of 15% annually. In addition, total revenue for drug delivery companies has grown at an average rate of 29% per annum since 1991, generating an estimated $4.5 billion in revenue (including product sales, royalties and contract research) for 1999. VMT’s specific market segment within the drug delivery industry (sustained release drug delivery via implantation, injection, or aerosol delivery) accounts for about 37% of the total drug delivery market. With a large number of biopharmaceutical products in the development pipeline, and numerous blockbuster drugs coming off patent, certain industry analysts predict that the market for drug delivery technology could triple in the next five years. The Company believes that its pharmaceutical areas, which include anti-cancer, anti-inflammatory, and anti-fibrotic drugs, can access market segments worth currently over $5 billion.
Marketing/Sales and Distribution
It is anticipated that the majority of the products from the TADD technology will be licensed to corporate partners. Therefore, the Company’s early stage marketing efforts are directed towards establishing corporate partner relationships. Revenues are generated from research and development agreements, licensing revenues, milestone payments, and royalties.
Currently, the Company’s needs for manufacturing the TADD formulations are met by using laboratory-scale equipment. This scale is sufficient for product development through the pre-clinical stage. The Company will use its laboratory facilities in its current incubator space for the next twelve months, then move the synthesis work to a modest facility upon receiving financing. The Company anticipates using a contract manufacturing facility for clinical production and for initial product sales.
The drug delivery industry has evolved to the point that Alkermes, Alza, Dura Pharmaceuticals, Elan, and R.P. Scherer are considered top tier companies (market valuations over $1 billion). There are at least an additional twelve public companies that are valued between $300 million to $1 billion. However, the most important fact to note is that Veritas has a unique focus on site-directed sustained release formulations or pro-drug strategies. Drug delivery companies competitive with VMT can be categorized by the platform technologies that are used to develop their formulations: Liposomes (Liposome Co., NeXstar, Sequus), polymeric microencapsulation for injection or implantation (Advanced Polymer Sciences, Alkermes, Alza, Elan, Emisphere, Fuisz), implantable gel (Atrix, Elan, Matrix), pulmonary (Aradigm, Inhale, Dura Pharmaceuticals). Transdermal, tranmucosal, and oral delivery are not considered as directly competing with the VMT platform technology. It is important to note that each of these competing companies can also become VMT corporate partners.
The Company believes that the TADD technology has a number of inherent advantages over the current competition: (1) offers both stained release and site directed release; (2) yields a pro-drug approach, which can decrease drug toxicity and increase drug efficacy; (3) provides a means of stabilizing biotech drugs; (6) provides a means of increasing the solubility of drugs, and therefore providing expanded delivery formats.
In summary, the key goals and objectives for the next 18 months are:
- Expand the technical development team for applying the drug delivery platform to more compounds.
- Further develop the anti-fibrotic products to the point of receiving two product approvals and beginning clinical trials on two additional products.
- Complete efficacy studies on anti-inflammatory and anti-cancer TADD formulations.
- Establish a modest centralized facility (offices and labs).
- Secure additional strategic partners.