Replies to post #5149 on Biostax Corp (BTAX)

[noreen]

Dr. Smith is one of the major patent owners that IMUN bought IP from. She likely was paid partly in equity in IMUN.

This is a quote from the 10-k in response to this...

Dr. Jill Smith



On December 24, 2012, the Company signed an agreement for the acquisition of patent rights (the “Smith Agreement”) for the intellectual property of Dr. Jill Smith and LDN Research Group, LLC (collectively, the “Licensor Parties”), whose members are Dr. Ian S. Zagon, Dr. Patricia J. McLaughlin and Moshe Rogosnitzky and orphan drug designation by the FDA to a novel late-stage drug, trademarked “LDN,” for the treatment of Pediatric Crohn’s disease. The patent covers methods and formulations for treatment of the inflammatory and ulcerative diseases of the bowel, using naltrexone in low doses as an opioid antagonist. These patents were acquired in exchange for the purchase of 300,000 shares of our common stock with a fair market value of $2,715,000 and an up-front payment of $165,384 (consisting of a $100,000 initial license fee and payment of $65,384 of expenses), which totaled $2,880,384.



The Smith Agreement requires the Company to (i) use commercially reasonable efforts to develop, commercialize, market and sell licensed products in a manner consistent with a business plan, (ii) expend a minimum amount of funds per annum to develop and commercialize licensed products as soon as practicable, (iii) obtain all requisite regulatory approvals needed to use or sell licensed products in the field of use, and (iv) make the first commercial sale of a licensed product by March of 2017.



In addition to the above stated 300,000 shares with a fair market value of $2,715,000 at the time of signing with the Company, it was agreed that 1,000,000 shares of common stock at the time of signing of a licensing agreement with Cytocom Inc, with all fees paid by the Company, on behalf of the contract until such time as Cytocom is funded.



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The aggregate amounts paid to date under the agreement are: $100,000 in 2014, $100,000 in 2015, and $100,000 set to be paid in December of 2016. The aggregate future potential milestone payments to be paid are: $250,000 upon the initiation of a phase III trial by the FDA, $250,000 upon acceptance of a NDA by the FDA, and $750,000 upon marketing approval by the FDA. The royalty rates for the transactions are 4% on Crohn’s Disease in the United States and 1% on sales in Emerging Markets.



Unless terminated sooner pursuant to the Agreement, the Agreement will terminate upon the later of: (a) the expiration or abandonment of the last patent to expire or become abandoned of the Patent Rights; or (b) Ten (10) years after the first Sale of the first Licensed Product. The Company may terminate the Smith Agreement upon 90 days’ written notice, provided all sublicenses are terminated and all amounts due and owing are paid to the Licensor Parties. The Licensor Parties may terminate the agreement ten days’ after notice to the Company if the Company is ten days late in payment or there is a breach that remains uncured for ten days after written notice of such breach.



The Company is required to pay an annual license fee, an annual running royalty on net sales of each licensed product or a minimum royalty, whichever is greater, and a sublicense fee on payments received by the Company from sublicensees. The Company has an exclusive, worldwide license to make, have made, use, lease, import, offer for sale and sell licensed products and to use the method under the patent rights.



The Company is also required to pay milestone payments after substantial achievement of certain milestone events for each licensed product including payment: upon initiation of each Phase III trial; upon positive completion of each Phase III clinical trial of the therapeutic use of an LDN compound in the field of use; when a New Drug Application (“NDA”) is accepted for review by the FDA; and when FDA approval to market the NDA is approved. The Company will issue shares upon reaching certain milestones including upon the first dosing of the first patient in a Phase III clinical trial for each licensed product, upon the first sale of each licensed product, and upon the achievement of a set dollar amount in cumulative sales for each licensed product covered by NDAs.



As part of the Smith Agreement, the Company has the right to apply to the FDA for the transfer of the orphan drug status for the use of naltrexone for the treatment of pediatric Crohn’s disease and ulcerative colitis, the Investigation New Drug Application (“IND”), and the right to acquire the relevant clinical data set from Dr. Jill Smith. Dr. Jill Smith made arrangements to transfer the IND to the Company as well as the relevant clinical data set, and the FDA has acknowledged that the Company is now the sponsor for this IND.



On September 24, 2014, the Company and the Licensor Parties jointly agreed to terminate the Smith Agreement, and in place thereof, have the Licensor Parties grant a similar license in their patent rights to Cytocom Inc. pursuant to a Patent License Agreement between the Licensor Parties, Cytocom Inc. and the Company with substantially similar terms as set forth in the Smith Agreement. Pursuant to this agreement, the Company issued 1,000,000 shares of its common stock valued at $270,000, upon execution to the Licensor Parties and the Company guaranteed the obligations of Cytocom Inc. to the Licensor Parties under the agreement.



The Penn State Research Foundation



On January 18, 2013, the Company signed an exclusive licensing agreement with The Penn State Research Foundation to license all of the intellectual property developed by Dr. Ian S. Zagon, Dr. Patricia J. McLaughlin and Dr. Jill P. Smith for the treatment of cancer titled “Opioid Growth Factor and Cancer” and “Combination Therapy with Opioid Growth Factor and Taxanes for the Treatment of Cancer” (the “Foundation Agreement”).



The Foundation Agreement requires the Company to: (a) use commercially reasonable efforts to develop, commercialize, market and sell licensed products in a manner consistent with a business plan; (b) expend a minimum amount of funds per annum to develop and commercialize licensed products as soon as practicable; (c) obtain all requisite regulatory approvals needed to use or sell licensed products in the field of use; and (d) make the first commercial sale of a licensed product by December 31, 2016.



The Foundation Agreement provides that the Company must pay to the licensor an initial license fee, a license maintenance fee on each anniversary of the effective date of the Foundation Agreement, and an annual running royalty on net sales for each licensed product or a minimum royalty, whichever is greater. In addition, the Company must pay a sublicense fee on payments received by the Company from sublicensees.



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The Foundation Agreement also requires the Company to make payments upon the achievement of certain milestone events including: initiation of each Phase II trial; initiation of each Phase III trial; when the NDA is accepted for review by the FDA; and when FDA approval to market is approved. The Company must also issue shares upon certain milestones including upon the first dosing of the first patient in a Phase II clinical trial for each licensed product, upon the first dosing of the first patient in a Phase III clinical trial for each licensed product, upon the first sale of each licensed product, and upon the achievement of a set dollar amount of cumulative sales for each licensed product covered by NDAs.



The Foundation Agreement terminates on the expiration or abandonment of the last patent to expire or become abandoned. The Company may terminate the Foundation Agreement at any time upon 60 days’ prior written notice and ceasing to make and sell all licensed products, the termination of all sublicenses and payment of all monies owed under the Foundation Agreement. The licensor may terminate the agreement 30 days after notice to the Company if the Company is 30 days late in payment or a breach that remains uncured for 45 days after written notice of such breach



The Penn State Agreement included an upfront execution payment of $100,000 that was previously paid.



Each year the Company incurs $10,000 in annual payments and maintenance fees on the patents as well as the legal fees in connection with the pending patents.



The aggregate future potential milestone payments to be paid are as follows:



? One Hundred Thousand Dollars ($100,000) upon initiation of each Phase II trial.
Two Hundred Fifty Thousand Dollars ($250,000) upon initiation of each Phase III trial.
? One Million Dollars ($1,000,000) to be paid as follows: Two Hundred Fifty Thousand ($250,000) when the NDA is accepted for review by the FDA and Seven Hundred Fifty Thousand ($750,000) when FDA approval to market is approved.
? First dosing of first patient in a Phase II trial for each Licensed Product 250,000 shares
? First dosing of first patient in Phase III trial 50,000 shares for each Licensed Product.
? First Sale of each Licensed Product in the United States and/or Canada 100,000 shares.
? Achievement of Twenty Million Dollars ($20,000,000) in cumulative Sales for each Licensed Product covered by NDA’s 200,000 shares of common stock.


Royalty rates are equal to four percent (4%) of Net Sales of US and Canadian sales.

[Herold]

Thank you! I've actually watched this video before and your right its a great watch for anyone interested in LDN & IMUN. Thank you for posting on this board so others can view it for the first time.