PharmaCyte Biotech, Inc. (“Company”) is a clinical stage biotechnology company focused on developing and preparing to commercialize cellular therapies for cancer and diabetes based upon a proprietary cellulose-based live cell encapsulation technology known as “Cell-in-a-Box^®.” The Cell-in-a-Box^® technology is intended to be used as a platform upon which therapies for several types of cancer, including locally advanced, non-metastatic inoperable pancreatic cancer, and diabetes will be developed.

The Company is developing therapies for pancreatic and other solid cancerous tumors by using the encapsulation of live cells which are surgically implanted at appropriate sites in the body to enable the delivery of cancer-killing chemotherapy drug at the source of the cancer.

The Company is also developing a therapy for Type 1 diabetes and insulin-dependent Type 2 diabetes. The Company’s diabetes therapy consists of encapsulating genetically modified human cells and/or beta islet cells using the Cell-in-a-Box^® technology and then implanting them in the body to act as a bio-artificial pancreas for insulin production.

In addition, the Company is examining ways to exploit the benefits of the Cell-in-a-Box^® technology to develop therapies for cancer based upon the constituents of the Cannabis plant, known as “Cannabinoids.”

Cancer Therapy

Targeted Chemotherapy

The Company’s live-cell encapsulation technology consists of encapsulating different types of genetically modified living cells, depending on the disease being treated. For its leading product candidate, a therapy for pancreatic cancer, about 10,000 genetically modified live cells that produce an enzyme, which converts the chemotherapy prodrug ifosfamide into its cancer-killing form, are encapsulated in porous, pinhead-sized capsules using the Cell-in-a-Box^® technology. In each patient to be treated, about 300 of these capsules will be surgically implanted in the blood supply as close to the pancreas tumor as possible. Once that is completed, the chemotherapy prodrug ifosfamide is given to the patient intravenously at one-third the normal dose. The prodrug is normally activated in the patient’s liver. By activating the prodrug near the tumor using the Cell-in-a-Box^® capsules, the Company’s cellular therapy acts as a type of “artificial liver.” Using this “targeted chemotherapy” the Company is seeking to create an environment that enables optimal concentrations of the “cancer-killing” form of ifosfamide at the site of the tumor. Because the cancer-killing form of ifosfamide has a short half-life, the Company believes that by using this treatment approach it results in little to no collateral damage to other organs in the body. The Company believes this treatment significantly reduces tumor size with no treatment-related side effects.

Pancreatic Cancer Therapy

A critical unmet medical need exists for patients with pancreatic cancer whose tumors are locally advanced, non-metastatic and inoperable but no longer respond to Abraxane^® plus gemcitabine, the current standard of care for advanced pancreatic cancer. These patients have no effective treatment alternative once their tumors no longer respond to this combination therapy. Commonly used treatments for these types of patients include 5-fluorouracil (“5-FU”) or capecitabine (a prodrug of 5-FU) with or without radiation. However, such treatments are only marginally effective in treating the tumor and result in serious side effects. The Company is developing a therapy that it believes can serve as a “consolidation therapy” with Abraxane^® plus gemcitabine that addresses the critical unmet medical need.

Subject to FDA approval, the Company plans to commence a Phase 2b clinical trial involving locally advanced, inoperable non-metastatic pancreatic cancer. The Company had a Pre-Investigational New Drug Application (“Pre-IND”) meeting with the Center for Biologics Evaluation and Research of the FDA on January 17, 2017. At the Pre-IND meeting, the FDA informed the Company it agreed with certain aspects of the Company’s development plan, charged the Company with completing numerous tasks and provided the Company with the guidance the Company needs to complete what it expects will be a successful Investigational New Drug Application (“IND”) process, although no assurance can be given whether the FDA will approve the Company’s IND once it is submitted. The proposed clinical trial is designed to show that the Company’s Cell-in-a-Box^® plus low-dose ifosfamide therapy can serve as an effective and safe consolidation chemotherapy for patients whose tumors no longer respond after four to six months of therapy with Abraxane^® plus gemcitabine. The trial will take place in the United States with possible study sites in Europe.

Malignant Ascites Fluid Therapy

The Company is also developing a therapy to delay the production and accumulation of malignant ascites fluid that results from many types of abdominal tumors. Malignant ascites fluid is secreted by an abdominal tumor into the abdomen after the tumor reaches a certain stage of growth. This fluid contains cancer cells that can seed and form new tumors throughout the abdomen. This fluid accumulates in the abdominal cavity, causing swelling of the abdomen, severe breathing difficulties and extreme pain.

Malignant ascites fluid must be removed by paracentesis on a periodic basis. This is painful and costly. There is no therapy that prevents or delays the production and accumulation of malignant ascites fluid. The Company has been involved in a series of preclinical studies conducted by Translational Drug Development to determine if the combination of Cell-in-a-Box^® encapsulated cells plus ifosfamide can delay the production and accumulation of malignant ascites fluid. The Company plans to conduct another preclinical study in Germany. If the preclinical studies are successful and the Company receives approval to do so from the FDA, the Company plans to conduct a clinical trial in the United States. The Company also plans to have additional study sites in Europe if it receives approval to do so from the European Medicines Agency.

Diabetes Therapy

Bio-Artificial Pancreas for Diabetes

The Company plans to develop a therapy for Type 1 diabetes and insulin-dependent Type 2 diabetes. It is developing a therapy that involves encapsulation of human cells that have been genetically engineered to produce, store insulin and release insulin on demand at levels in proportion to the levels of blood sugar (glucose) in the human body. It also plans to explore the encapsulation of beta islet cells as an alternative to using genetically modified human cells. The encapsulation will be done using the Cell-in-a-Box^® technology.

Cannabis Therapy

Cannabinoids

The Company plans to use Cannabinoids to develop therapies for cancer, with the initial target of brain cancer. The Company is focusing on developing specific therapies based on carefully chosen molecules rather than using complex Cannabis extracts. The Company’s therapy will use the Cell-in-a-Box^® technology in combination with genetically modified cell lines designed to activate cannabinoid molecules for the treatment of diseases and their related symptoms.

To further its Cannabis therapy development plans, the Company entered into a Research Agreement in May 2014 with the University of Northern Colorado. The goal of the research is to develop methods for the identification, separation and quantification of constituents of Cannabis, some of which are prodrugs, that may be used in combination with the Cell-in-a-Box^® technology to treat cancer. Studies have been undertaken using cannabinoids to identify the appropriate cell type that can convert the selected cannabinoid prodrugs into metabolites with anticancer activity. Once identified, the genetically modified cells which are expected to produce the appropriate enzyme to convert that cannabinoid prodrug will be encapsulated using the Cell-in-a-Box^® technology. The encapsulated cells and cannabinoid prodrugs identified by these studies will then be combined and used for future studies to evaluate their anticancer effectiveness.

Company Background and Material Agreements

The Company is a Nevada corporation incorporated in 1996. In 2013, the Company restructured its operations to focus on biotechnology. The restructuring resulted in the Company focusing all its efforts upon the development of a novel, effective and safe way to treat cancer and diabetes. On January 6, 2015, the Company changed its name from Nuvilex, Inc. to PharmaCyte Biotech, Inc. to better reflect the nature of its restructured business.

In 2011, the Company entered into an Asset Purchase Agreement (“APA”) with SG Austria Private Limited (“SG Austria”) to purchase 100% of the assets and liabilities of SG Austria. Austrianova Singapore Pte. Ltd. (“Austrianova”) and Bio Blue Bird AG (“Bio Blue Bird”), wholly-owned subsidiaries of SG Austria, were to become wholly-owned subsidiaries of the Company on the condition that the Company pay SG Austria $2.5 million and 100,000,000 shares of common stock of the Company. The Company was to receive 100,000 shares of common stock of Austrianova and nine bearer shares of Bio Blue Bird representing 100% of the ownership of Bio Blue Bird.

Through addenda to the APA, the closing date of the APA was extended twice by agreement between the parties.

In June 2013, the Company and SG Austria entered a Third Addendum to the APA (“Third Addendum”). The Third Addendum changed materially the transaction contemplated by the APA. Under the Third Addendum, the Company acquired 100% of the equity interests in Bio Blue Bird and received a 14.5% equity interest in SG Austria. In addition, the Company received nine bearer shares of Bio Blue Bird to reflect its 100% ownership of Bio Blue Bird. The Company paid: (i) $500,000 to retire all outstanding debt of Bio Blue Bird; and (ii) $1.0 million to SG Austria. The Company also paid SG Austria $1,572,193 in exchange for the 14.5% equity interest of SG Austria. The Third Addendum required SG Austria to return the 100,000,000 shares of common stock held by SG Austria and for the Company to return the 100,000 shares of common stock of Austrianova that the Company held.

Effective as of the same date of the Third Addendum, the parties entered a Clarification Agreement to the Third Addendum (“Clarification Agreement”) to clarify and include certain language that was inadvertently left out of the Third Addendum. Among other things, the Clarification Agreement confirmed that the Third Addendum granted the Company an exclusive, worldwide license to use, with a right to sublicense, the Cell-in-a-Box^® technology for the development of treatments for cancer and use of Austrianova’s Cell-in-a-Box^® trademark and associated technology.

Bio Blue Bird licensed certain types of genetically modified human cells from Bavarian Nordic A/S (“Bavarian Nordic”) and GSF-Forschungszentrum für Umwelt u. Gesundheit GmbH (collectively, “Bavarian Nordic/GSF”) pursuant to a License Agreement (“Bavarian Nordic/GSF License Agreement”) to develop a therapy for cancer using a certain type of encapsulated cells (“Cells”). The licensed rights to the Cells pertain to the countries in which Bavarian Nordic/GSF obtained patent protection. Hence, facilitated by the acquisition of Bio Blue Bird, the Third Addendum provides the Company with an exclusive, worldwide license to use the Cell-in-a-Box^® technology and trademark for the development of a therapy for all forms of cancer using these encapsulated Cells.

In June 2013, the Company acquired from Austrianova an exclusive, worldwide license to use the Cell-in-a-Box^® technology and trademark for the development of a therapy for Type 1 and insulin-dependent Type 2 diabetes (“Diabetes Licensing Agreement”). The Company paid Austrianova $2.0 million to secure this license.

In October 2014, the Company entered into an exclusive, worldwide license agreement (“Melligen Cell License Agreement”) with the University of Technology Sydney (“UTS”) in Australia to use insulin-producing genetically engineered cells (“Melligen Cells”) developed by UTS to treat Type 1 diabetes and insulin-dependent Type 2 diabetes. The Company plans to develop an effective therapy for diabetes by encapsulating the Melligen Cells using the Cell-in-a-Box^® technology.

In December 2014, the Company acquired from Austrianova an exclusive, worldwide license to use the Cell-in-a-Box^® technology in combination with genetically modified non-stem cell lines which are designed to activate Cannabinoid prodrug molecules for development of therapies for diseases and their related symptoms using of the Cell-in-a-Box^® technology and trademark (“Cannabis Licensing Agreement”).

In July 2016, the Company entered into a Binding Memorandum of Understanding with Austrianova (“Austrianova MOU”). Pursuant to the Austrianova MOU, Austrianova agreed to actively work with the Company to seek an investment partner in territories not covered by the Bavarian Nordic/GSF License Agreement. The plan is for the investment partner to finance clinical trials and further develop products for the Company’s therapy for cancer, in exchange for which the Company, Austrianova and any future investment partner will each receive a portion of the net revenue of cancer products.

In October 2016, the parties amended the Bavarian Nordic/GSF License Agreement to include the right to import, reflect ownership and notification of improvements, clarify which provisions survive expiration or termination of the Bavarian Nordic/GSF License Agreement, to provide rights to Bio Blue Bird to the clinical data after expiration of the licensed patent rights and to change the notice address and recipients of Bio Blue Bird.

In August 2017, the Company entered into a Binding Term Sheet with SG Austria and Austrianova pursuant to which the parties reached an agreement to amend certain provisions in the APA, the Diabetes Licensing Agreement and the Cannabis Licensing Agreement. See Note 10, Commitments and Contingencies, for additional information.