2. GOING CONCERN AND MANAGEMENT'S PLANS (Notes)
|9 Months Ended|
Jan. 31, 2014
|Going Concern And Management's Plans [Abstract]|
|Going Concern And Management's Plans||
The Company's financial statements are prepared using GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established a regular source of revenue sufficient to maintain its operating costs and allow it to continue as a going concern. As of January 31, 2014, the Company has an accumulated deficit of $52,229,316 and incurred a net loss for the nine months ended January 31, 2014 of $10,783,209.
Over the past year, funding was provided by management and investors to maintain and expand the Company and acquire Bio Blue Bird. As of January 31, 2014, new investors enabled the completion of the acquisition of Bio Blue Bird which provided the Company the ability to begin preparations toward further clinical trials in patients with advanced, inoperable pancreatic cancer. The remaining challenges, beyond the regulatory and clinical aspects, include accessing funding for the Company to cover its future cash flow needs. The Company continues to acquire additional funds through management's efforts. On February 14, 2014, the Company entered into a stock purchase agreement with Lincoln Park Capital Fund, LLC (Lincoln Park Capital), an institutional investor. Lincoln Park Capital initially purchased 8 million shares of Common Stock at $0.25 per share for $2 million and has committed to invest up to an additional $25 million of equity capital over the term of the stock purchase agreement. The proceeds from this investment will be used for the Companys late-stage clinical trials in advanced inoperable pancreatic cancer, for research into the use of constituents of marijuana in the emerging medical marijuana arena and for general operating purposes. See Note 11 for further discussion on the Lincoln Park Capital transaction.
The Company requires substantial additional capital to finance its planned business operations and expects to incur operating losses in future periods due to the expenses related to the Companys core businesses. The Company has not realized material revenue since it commenced doing business in the biotechnology sector, and it is not without doubt that it will be successful in generating revenues in the future in this sector.
If the Company is not able to raise substantial additional capital in a timely manner, the Company may not be able to complete its required clinical trials and may be forced to cease operations.
The Company will continue to be dependent on outside capital to fund its research and operating expenditures for the foreseeable future. If the Company fails to generate positive cash flows or fails to obtain additional capital when required, the Company may need to modify, delay or abandon some or all of its business plans.
The Company continues to work with the Executive Officers of SG Austria and Austrianova Singapore across a number of areas in an effort to advance the use of its cellulose-based live-cell encapsulation technology for the development of treatments for all forms of cancer and for diabetes.
The Company's initial strategy was to ensure that the previously successful Phase 1/2 pancreatic cancer trials move forward to their next logical steps a Phase 2b, two-armed, clinical trial in a relatively small number of patients where the Companys pancreatic cancer treatment will be compared head to head with the best available chemotherapy for the disease in order to validate the results of the previous Phase 1/2 clinical trials. This will be closely followed by a large-scale Phase 3 clinical trial to obtain the large amounts of data required by drug regulatory authorities so that the Companys pancreatic cancer treatment can be considered for marketing approval by those authorities. The Companys acquisition of Bio Blue Bird was the first step in moving this strategy forward because it afforded the Company the exclusive, worldwide license to use the cellulose-based live-cell encapsulation technology for the development of treatments for all forms of cancer.
The Companys planned treatment for advanced, inoperable pancreatic cancer couples the anti-cancer prodrug, ifosfamide, with encapsulated live cells that effectively convert ifosfamide into a cancer-killing form. Briefly, the encapsulated ifosfamide-activating cells are implanted, using radiography, in close proximity to the pancreas, and hence to the tumor itself. A single, one-time implantation is used. Following this, ifosfamide is administered by its usual route of administration, but only one-third of the usual dose of the chemotherapeutic agent is given. By using this combination treatment, significantly fewer side effects from ifosfamide can be realized than with standard administration of the prodrug.
The Company has acquired certain cells that will be utilized in the late-stage clinical trials in advanced pancreatic cancer and is in the process of cloning them to obtain the large numbers of cells that will be needed for encapsulation to conduct and complete future clinical trials. When this initial cloning process is completed, the clones will be amplified with the goal of having a Master Cell Bank and a Working Cell Bank to utilize in connection with the Phase 2b and Phase 3 clinical trials. The cells will be stored at several locations around the world, including at a Fisher BioServices, Inc. facility in Rockville, Maryland, so that adverse effects of any unforeseen consequences that could occur during the cloning and expansion processes can be minimized.
The Company and Austrianova Singapore are finalizing a manufacturing agreement pursuant to which Austrianova Singapore will perform the cellulose-based cell encapsulation process and supply the Company with sufficient numbers of encapsulated ifosfamide-activating cells to conduct its Phase 2b and Phase 3 clinical trials.
The Companys next logical step in its plans to become a major biotechnology company capable of providing dramatic changes in the way diseases will be treated in the future, through the use of the cellulose-based live-cell encapsulation technology, was to acquire from Austrianova Singapore the exclusive, worldwide license to use this technology for the treatment of diabetes. The acquisition of these licensing rights was a critical step for the Company to create a pipeline of products for additional clinical trials that may lead to a major medical breakthrough utilizing the cellulose-based live-cell encapsulation technology. The Company plans to perform preclinical research in the diabetes area using encapsulated insulin-producing cells with the goal of using the data obtained from such studies for the design and conduct of clinical trials in those suffering from insulin-dependent diabetes.
Management's objective is to become a world-class and industry leading biotechnology company with a multi-part strategy. The Company's efforts to carry out this strategy include several components:
1. Elimination of the remaining operating debt of the Company and all of its subsidiaries;
2. Continuation of preparations for late-stage clinical trials in advanced, inoperable pancreatic cancer;
3. Enhancement of the Company's ability to expand the biotechnology through research and partnering;
4. Acquisition of new contracts and revenue utilizing newly acquired biotechnology licensing rights;
5. Further development of uses of the cellulose-based live-cell encapsulation technology platform through contracts, licensing and joint ventures with other companies; and
6. Expansion of the use of the cellulose-based live-cell encapsulation technology to address the vast opportunities emerging in the medical marijuana arena through the Companys subsidiary Medical Marijuana Sciences, Inc.
In August 2013, the Company restructured corporate operations in an effort to focus on its biotechnology core businesses. The restructuring was precipitated by the Third Addendum to the SG Austria APA and the Companys acquisition of Bio Blue Bird. The Company restructured itself and created three new divisions, two of which are biotechnology divisions. The first of these houses the cellulose-based live-cell encapsulation (Cell-in-a-Box®) technology and all of its associated licenses in the Company. The second division, Medical Marijuana Sciences, Inc., focuses on ways to exploit the benefits of the Cell-in-a-Box® technology in optimizing the anticancer effectiveness of cannabinoids against cancers while minimizing or outright eliminating the debilitating side effects usually associated with cancer treatments. This strategy provides Medical Marijuana Sciences a unique opportunity to develop "green" approaches to fighting deadly cancers, such as those of the pancreas, brain, breast, and prostate that affect hundreds of thousands of individuals worldwide every year. The third division consists of the Companys nutraceutical formulations and their associated product names and information technology. This plan for this division is to sell its names, nutraceutical formulations and associated information technology to one or more third parties.