Introduction
Humanetics was founded in 1988 to develop new drugs to treat urgent and unmet medical needs. The Company's first product was 7-Keto DHEA ("7-Keto") developed by researchers at the University of Wisconsin in Madison. 7-Keto was intended to improve immune function and was initially marketed to the US Dept of Defense ("DOD") to improve warfighter readiness for battle. Humanetics conducted small common stock offerings in the 1990s to fund development of 7-Keto.
It was later discovered that 7-Keto was a great weight loss product as demonstrated in a clinical trial. The Company pivoted the indication for 7-Keto to weight loss and began selling it on a wholesale basis to GNC and all other major dietary supplement companies. Humanetics expanded its 7-Keto business over a period of 12 years and ultimately sold it in 2014. 7-Keto is currently available through all major dietary supplement companies, and represents a $150M consumer product business at retail pricing.
Based on its long term relationship with the DOD, Humanetics was able to exclusively license a more potent immune enhancing drug discovered by DOD. That drug is called BIO 300 and was developed to protect soldiers from the damaging effects of radiation on the battlefield. It is the current focus of Humanetics business. Since first licensing the initial DOD patent for the drug, Humanetics has received over 30 new patents owned solely by the Company. It has also expanded its use into a much larger oncology market to protect healthy tissues and organs from the harmful effects of radiation used in cancer radiation therapy.
DOD is funding a majority of the development of BIO 300 as a medical countermeasure (MCM). To date, the Company has received over $45M in non-dilutive funding from federal agencies to develop and commercialize BIO 300.
Opportunity
Humanetics RadioProtectant Drug
Revenue/Range
$4,000,000
EBITA (Range)
$ (1,225,000)
Company General Business Specialty/Industry (Description: What does the company do)
Specialty
BIO 300 is intended to prevent radiation toxicities and mitigate acute and chronic inflammatory diseases. It is a small molecule originally in-licensed from the U.S. Department of Defense. Activation of the drug’s molecular target promotes DNA protection and repair and activates anti-inflammatory pathways at the cellular level.
It was originally developed to protect the military, first responders and civilians from harmful levels of radiation on the battlefield or resulting from a dirty bomb or nuclear detonation. It is being developed for military use under the FDA Animal Rule.
BIO 300 is also being tested in Phase 2 clinical trials to improve treatment outcomes following lung cancer radiotherapy; and to mitigate long-term pulmonary damage in COVID-19 survivors. The Company is further exploring product line extensions for other diseases associated with an inflammatory response such as fatty liver disease, pancreatitis, and myocarditis.
General Business Model and Market
Humanetics' customers for BIO 300 as a medical countermeasure will initially be the U.S. Dept of Defense and domestic First Responder organizations. This will be followed by other governmental and first responder buyers in NATO and other close ally countries such a South Korea and Japan. Countries not considered to be friendly to the U.S. like Iran, North Korea, Russia would not be provided access to BIO 300 and are not our customers.
Humanetics commercial strategy with respect to oncology and inflammatory disease markets is to partner or out-license the drug to one or more larger pharmaceutical companies with established sales and marketing infrastructure. Partnerships may vary by indication and geography. Significant revenues can be achieved prior to FDA approval through licensing fees and milestone payments. On-going revenues would be achieved through royalties or a potential M&A transaction.
The total market for cancer radiation therapy is approximately $3.5B, and the total market for MCMs is $2.25B. The competitive advantage of BIO 300 is that it is shelf-stable, portable, self-administered drug to overcome burden of necessity for needles and syringes, facilities and staff to administer drug, cold storage and lack of portability.
Revenue Range Stratification (Product Lines/Service)
Medical countermeasures for military and civilian protection = $2.25B
Cancer radiation therapy for cancer patients = $3.5B
Geographic Location(s) and Big Business Line Categories
Humanetics is headquartered in Minneapolis, and all manufacturing and distribution would be conducted through domestic contract manufacturers only.
Additional Summary Success/Growth/History “Details” Bullets i.e. Growth, track record, Growth Potential
Humaneitcs is In advanced stages of clinical testing
It has received over $45 million in non-dilutive funding
The Company has the potential for near-term commercial revenues under Emergency Use Authorizations
It is eligible to receive $100M FDA Priority Review Voucher upon FDA approval
It has received FDA Orphan Drug Designation and Fast Track Approval for its MCM drug
Transition Plan
Our exit strategy is to sell or license each of the two distinct components of our business: medical countermeasures for radiation and cancer radiation therapy.
There are several public companies like Emergent BioSolutions that specialize in supplying medical countermeasures to the U.S. government. Our objective is to sell or license our MCM asset directly to one of these companies through a merger or acquisition transaction within the next 18-24 months.
Similarly, upon completion of our Phase 2b clinical trial in non-small cell lung cancer, we intend to license or sell our oncology assets to a large pharmaceutical company for final development and approval to cancer radiation therapy.
Reason for Selling or Seeking Capital
Humanetics intends to license or sell its oncology assets to big pharma upon completion of a Phase 2b clinical trial demonstrating efficacy in cancer radiation therapy. We anticipate an exit for these assets within 3-5 years based on results from the clinical trial.
In order to maximize valuation of acquisition, the Company must complete Phase 2b clinical trials in non-small cell lung cancer, prostate cancer and head and neck cancer. Once efficacy is demonstrated in these double blind, placebo controlled trials, the Company can move forward with M&A transactions to maximize shareholder returns.
Final Standard Comments
Humanetics does not anticipate having to establish a large commercial sales force or marketing campaign for its medical countermeasure products. We intend to complete regulatory approval of its BIO 300 drug as a medical countermeasure to protect against radiation damage, and then sell it directly to U.S. and foreign governments and first responder organizations.
At the same time, Humanetics intends to demonstrate the efficacy of BIO 300 in a large Phase 2b clinical trials in non-small cell lung cancer, prostate cancer and head and neck cancer with the expectation that positive results in that trial will support an acquisition transaction by big pharma.
We have engaged Ducera Partners (NYC) in a financial advisory capacity to guide us in merger and acquisition processes to sell or license both our MCM and oncology assets.