Trial to decide ownership of cancer drug
By Mike Clary - Staff Writer - Posted June 2 2005
With their industrial solvent company teetering on the brink of insolvency, Harvey Katz and Claudia Iovino were praying for a financial miracle when along came something that sounded even better: a would-be miracle drug.
T-19 Holistic Nasal Spray promised not only to save International Foam Solutions of Delray Beach from bankruptcy, but cure cancer and make everyone rich as well.
"I told Harvey to go for it," said Iovino, 67, who had recently survived a life-or-death bout with lymphoma.
"Anything to fight cancer sounded like a good thing to me."
And so in the spring of 2003 began a convoluted tale of money and medicine that may be sorted out in U.S. District Court in Fort Lauderdale this week in a battle over licensing rights to a product that some believe could be worth billions of dollars to drug manufacturers. A jury trial was scheduled to start today before U.S. District Judge Daniel T.K. Hurley.
"This is a classic case of deception ...," said Miami attorney John Arrastia, representing the plaintiff in the federal lawsuit. "Researchers want to work with this [drug]. They say, `God, I could get like a Nobel Prize.' But greed is keeping it off the market."
The drug at issue is called Tubercin, a patented compound derived from live tuberculosis cells that is said to stimulate the body's immune system.
The drug has not been approved by the Food & Drug Administration and is not available for sale.
But for several years the inventor of Tubercin, physician Dr. Tai Ho Chung, has prescribed it for his patients in South Korea, including some who credit the drug for halting the spread of their cancers.
Until the spring of 2003, Katz and Iovino had never heard of Tubercin. In a warehouse district south of Linton Boulevard, they made products such as Dumpster Fresh, a deodorant for trash bins, and StyroSolve, which reduces polystyrene to tiny beads.
Then a broker introduced Katz and Iovino to Ronald Shinn, a former chief of research for the California prison system, and Gerry Knight, a onetime administrator with the Oklahoma Insurance Department. Having acquired the rights to Tubercin outside of South Korea, Shinn and Knight were looking for an existing publicly traded company through which to raise capital quickly.
And International Foam Solutions was struggling to stay afloat. "We didn't know anything about the drug business," admitted Iovino. "We needed more money, and this was a way for us to continue."
International Foam Solutions became Hard To Treat Diseases Inc., and Shinn and Knight became its top officers. Katz and Iovino were issued stock, saw about $700,000 in debt paid off, and continued to manufacture StyroSolve.
But in November 2003, Shinn and Knight asked that the merger with International Foam Solutions be rescinded, and announced that the rights to Tubercin were held by ArTec Inc., a Reno-based company in which they had interest.
Katz and Iovino responded by bringing in Plantation accountant Colm King to take over Hard To Treat Diseases.
King then filed suit against Shinn and Knight, alleging the pair misused corporate funds and interfered with company business. King, on behalf of some 5,000 shareholders, is asking for $33 million in damages, and a declaratory judgment granting him the rights to Tubercin.
"We haven't made a penny off of Tubercin," King said. "But the drug is for real."
Dr. Leland Shapiro is one of the few researchers outside South Korea to have worked with Tubercin. An infectious disease specialist at the Denver Veterans Affairs Medical Center, Shapiro was hired by King to conduct tests last year.
The drug "does have promise," Shapiro said.
King said four major pharmaceutical companies have expressed interest in Tubercin. "But they won't deal with me pending litigation," he said.
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