MMR Information Systems, Inc. Acts to Protect Its Biotech Assets
LOS ANGELES, CA -- (Marketwire)
05/03/10
MMR Information Systems, Inc. (OTCBB: MMRF) (MMR) disclosed today that it has filed an action which seeks to protect a portion of the Company's intellectual property and related technology, including clinical data and biotech samples which it had recently discovered.
The assets represent a portion of the Company's biotech portfolio that came from its reverse merger with Favrille, Inc., a biopharmaceutical company, in January 2009. Over the past 12 months, the Company identified a portfolio of biotech assets which include materials that were unknown to post-merger MMR until February 2010. These assets were in the possession of the Lymphoma Research Foundation (LRF). They do not include other pre-merger biotech assets such as the Company's anti-CD20 monoclonal antibodies, results of clinical trials data, patents and other IP.
In February 2010, Robert H. Lorsch, MMR Chairman and CEO, received an inquiry from a laboratory at Stanford University asking the Company to donate portions of its pre-merger clinical vaccine trials data in the interest of science. After due diligence into this request, it was discovered that in the summer of 2008 a collection of tumor samples and other data from the Company's clinical trials had been transferred to the Lymphoma Research Foundation. It was further discovered the tumor samples were being stored at the University of Arizona.
It was ultimately determined by the Company that the data and samples could lead to for-profit ventures. Based on numerous conversations with LRF and representations that the samples and data had not been compromised, MMR proposed a collaborative relationship with LRF giving it the ability to make grant requests with the samples provided MMR benefited with the usual and customary licensing agreements and milestone payments as the terms are used in the biotech industry and that the samples would not be destroyed. MMR's proposal also included setting up an endowment to benefit LRF from proceeds from the use of the samples and data.
"As a cancer survivor and a philanthropist who has raised or contributed nearly ten million dollars to science education I was excited by the prospect of making a difference with this contribution," said Lorsch. "However, prior to entering into any agreement for a donation of the samples and data, the Company conducted due diligence to ensure MMR would not give up any assets that may have value to shareholders. As a result of that investigation, it was determined that there was no guarantee that the samples and data would be used exclusively and only in the interest of science and therefore MMR shareholders should benefit from these assets in the event and to the extent they generate revenue."
"Hundreds of millions of dollars were spent on the creation of these assets by shareholders and investors of pre-merger Favrille and MMR, and since it appears that recipients of the samples could potentially benefit financially, why should MMR shareholders be any different? Make no mistake; my purpose is to see that these assets are used to benefit science, however, in the process they should also benefit the Company's shareholders," added Lorsch.
Based upon numerous representations from LRF that no grants had been made, MMR entered into a written agreement with LRF regarding the assets on April 12, 2010. The agreement specifically stated that LRF would not directly transfer, release, sell or assign, grant or alter the samples which MMR contends is its property. The agreement goes on to say that MMR and LRF will work in good faith to resolve this matter. It was also specifically agreed that the parties would use mediation in the event an acceptable agreement could not be reached.
MMR believes the materials have potential significant financial value to the Company while LRF has advised MMR that LRF is not interested in financial participation from the samples.
Ten days after signing and prior to each party's management discussing this matter, LRF decided that it would no longer participate in resolving this dispute pursuant to the terms of the agreement. MMR had no alternative but to bring a Petition to force LRF to enforce the agreement and mediate with MMR.
Shortly after MMR served its Petition, LRF notified MMR's attorneys that it had filed a declaratory relief action also in the interests of resolving this matter. MMR understands that LRF is looking at this process as a way of seeking a resolution of this dispute. In the filing, LRF contends that pre-merger Favrille granted a royalty-free license to LRF for the use of the samples, however, MMR claims any such agreement is not enforceable. MMR believes the transfer to LRF was never properly entered into, consented to, or approved, amongst numerous other reasons. MMR also believes that LRF induced MMR into transferring the samples to LRF by suggesting the samples had no value.
"I believe both sides are working to get this matter resolved quickly," Lorsch said. "The samples and data were created by virtue of the Company's shareholders and therefore they should be entitled to a portion of any monetary gain that may be realized."
The Company plans on expanding its Boards of Advisors to include biotech financing and licensing expertise to help maximize the value of these assets. MMR understands that the samples and data may be of value in a possible successful reinterpretation of the pre-merger Favrille vaccine trials and that the IP may also unlock ways to create other "custom-made" cancer vaccines and be valuable in discovering additional opportunities in cancer research. The Company hopes to enter into additional licensing agreements with biopharmaceutical companies, academic institutions, research organizations and others regarding the use of its assets.
Although MMR will continue to maximize the value of its biotech assets to its shareholders, the Company remains focused on its primary business, which is specifically the development and distribution of the MyMedicalRecords Personal Health Record (www.MyMedicalRecords.com) MMRPro, an end-to-end document management solution for physicians which features an integrated patient portal (www.MyMedicalRecordsMD.com), and other related solutions in Health IT based on the Company's patented technologies. The Company also cautions shareholders that it is not a biotech company and there are significant risks, uncertainties and lead times associated with these biotech assets and related IP.
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