GENERAL OVERVIEW OF SGNC
After posting my transcript of conversation with Dr. Drees, more information has been posted by several people that attended the meeting last week of Dr. Drees (brokers, bankers, and investment community) and I've added their postings to the original transcript to bring things up to date. This report has been edited and verified by Thomas C. Drees Ph.D.
Synthetic Oxygen Therapeutic packed red blood cells would be Dr. Drees's preferred description of PHER-02, rather then Artificial Blood. It picks up oxygen in your lungs takes it through the heart and carries it through your body, giving up oxygen and starts picking up Carbon dioxide. It returns to the lungs where it gets rid of CO2 by exhaling. You do not metabolize this product!
The most important therapy for PHER-02 will be transfusions. Because it treats and replaces the lack of oxygen in the body, anytime there is a disease that has lack of oxygen connected with it, PHER-02 has the potential of being a cure for that disease. That includes, heart attack, stroke, cancer, sicklecell anemia, eye problems, shock, burn victims and others. There are about 150 applications that they are aware of.
So this will NOT end up being a ONE PRODUCT company. The world of
medicine badly needs a transfusion material that has a longer life than six weeks, ours has a 3 year shelf life, 27 times longer. (Courtesy of Profiteer)
There are four stages that the product will have to go through to come to market: (1) animal safety (2) animal efficacy (3) human safety (4) human efficacy. In the safety phase they will inject the subjects with the solution to see if there are any adverse reactions. In the efficacy stage they will induce a condition such as a heart attack to see the reactions. All of these phases are estimated to take 2 1/2 years before they receive an FDA approvable letter. The animal testing will take 9 - 12 mos and should begin in 1 - 1 1/2 months. (Courtesy of Gwolf)
I asked Dr. Drees if there was any way that Green Cross (When Dr. Drees was president of Alpha , the American subsidary of Green Cross, Alpha received FDA approval for the first generation version of this product.) could sell this product or the previous product that they had previously used on approximately 13,000 people. Dr. Drees replied that they could not. The reason why is that when they falsified the date (not data) that they had given one patient the drug, eventually they got caught, and were forced to withdraw their application for product approval in Japan. Green Cross also dropped their FDA approval in the United States.
Does Green Cross have the patent on the first generation drug?
No, the reason why is that the professors from Harvard, Pennsylvania
University, and the University of Cincinnati were the ones that started the research. When these professors applied to Washington to get funding they were denied 2 years in a row. Japan heard about the research and invested in it. However, it was not their (Green Cross) invention and therefore they never got a patent. (RG)
Sanguine has patents pending and is currently conducting research and development leading to FDA clinical trials of PHER-02. In 1994, Sanguine and Battelle Memorial Research Institute devoloped three additional unique proprietary synthetic blood compounds using newly developed surfactants. Battelle has completed extensive patent searches to insure the proprietary nature of these new compounds and Sanguine plans to file the necessary additional patent applications. The next phase will be gross animal testing (which is going on now) leading to an investigational new drug appliction to the FDA.
Sanguine and Battelle are very encouraged by these compounds as they eliminate many of the drawbacks of the first generation formula, developed by Alpha Therapeutics, which was approved by the FDA. (courtesy of Prospector)
Sanguine plans to conduct PHER-02 initial trials off-shore, which is customary for United States drug manufacturers, since these trials are less expensive and faster to complete. Arrangements have already been made to accomplish this in Europe. The United States FDA concluded that the same Perfluorocarbon (Decalin) red cell substitute used in the United States and Japanese trials is safe for human use. This represents a major regulatory hurdle, although human efficacy of PHER-02 in humans must be proved biostatistically. Approvals will also be required in the health ministries in England, France, Germany, Japan, Italy and Spain to open these markets for production penetration, although these will be easier than the U.S. (courtesy of Prospector)
At key development points of the program, members of the former Alpha Therapeutics research and management team will be brought back on board to handle the clinical trials that must be completed in the United States and offshore. They have the experience in medical, regulatory, manufacturing, marketing, quality assurance and the administration needed to accomplish the process. The Company believes that this team, combined with the information obtained from the Fluosol FDA approval process, will help shorten the approval process required for FHER-02.
Head and Neck Cancer: There is no effective therapy for these difficult-to-treat tumors at the present time. The tumors can be detected, oxygenated and potentially reduced with PHER-02. It can also be used to target the cancer with chemotherapy by adding chemotherapeutic drugs to PHER-02 to carry the drug directly to the site of the malignancy and reduce the damage to the rest of the body. (courtesy of Prospector)
Cardioplegia ::: The first application for the Company's product is priming the heart-lung machine (in open heart surgery). There are appoximately 300,000 cases per year in the U.S. that require oxygenation of a heart-lung machine's priming solution. This appliction is non-controversial and is desired by all cardiac surgeons. Today there is not an adequate oxygen carrying product available in the marketplace. (courtesy of Prospector)
Heart attack::: Methods are being sought to reduce the damage to the heart muscle caused by heart attack. Due to the small size of the perflurocarbon molecule in PHER-02, it can bypass the blockage and perfuse the myocardium. This will allow the infarction to be treated in the home or ambulance, rather that waiting for arrival at the hospital and up to two-hour delays to type and cross-match the donor blood. There are approximately 6,000,000 heart attacks per year in the industrialized world.
Stroke::::The same treatment used for heart attack can be used for oxygen deprivation in the brain caused by stroke. PHER-02 can be infused in the bed or ambulance to enrich the oxygen-starved brain. (courtesy of Prospector)
One of the big questions is how much of the market share will SGNC have. At this point in time 10% in the first 5 years%. Dr. Drees said that they have a patent with the new surfactants already to go but that you want to do that at the last minute because then everyone can see what you are doing by reading the patent. He did say that because they have been at this so many years that their patent will cover everything soextensively that he it will take until the patent runs out before the competition can come into the market which would be 10 years. If someone was able to find some angle around their patents he still estimated that they would have at least a 7 year jump on any competition.
The fact is that this product has already undergone 20 years of testing and will only need a fraction of that amount. Again, this product has been in development from 1978. At that time, full product development cost co's 100+mill. Dr. Drees and Batelle have estimated 95-98% success on pher-02. FDA approval (since this will be approval on a 2nd generation improved product will be easier than the first time it was approved. (Courtesy of Chief Brody)
Difference between first generation and second generation drug.
Both drugs use an emulsion. In Japan's version 1st generation drug they used 2 flurocarbons, 8 adjuvent solutions, and 2 surfactants. Sanguine's 2nd generation drug uses 1 flurocarbon and 1 surfactant. This version is a much cleaner product. Another very important thing to remember is that with this being a 2nd generation drug the time frame for approval should be much shorter. It took about 10 years when Dr. Drees was head of Alpha ( US subsidiary of Green Cross) to get FDA approval. Now that the 1st generation drug has been tested on approximately 13,000 people and saved lives, the process should be quicker, cheaper, and smoother. He is hoping for FDA approval in 3 years.
Pre-Animal testing is the next major step. They have a contract signed with Batelle to do this. Sanguine has had a working relationship with Batelle since 1994.Dr. Drees has seen many animal testing facilities and he says Batelles is the best.
Dr. Drees said that there are 2 ways to proceed with animal testing.
First you can raise lots of money, build a facility,acquire equipment, hire technical people etc. Or you can hire Batelle.
Advantages of using Batelle:
1. With Batelle comes a high degree of credibility.
2. Even though they are more dollars per hour, in the long run it's
cheaper than building or buying your own facilities.
Battelle Website
battelle.org
Demand for product. Current estimate is that in the world each year,
there are 60 million transfusions of blood. According to the World
Health Organization (WHO), if there was not the shortage of donors,
refrigeration problems, typing and cross matching, availability of
testing equipment, etc. there could be 120-180 million transfusions per year. Average transfusion uses 2 pints of blood.
Availability of materials. Materials for the fluorocarbons can be
purchased from companies such as 3M and Dupont, they are plentiful and cost about $30.00 /pint of blood substitute.
What price are you planning on selling a pint of this product for? Same as a pint of donated tested,typed and cross matched blood, about $300.00 to begin with. Donated blood is tested, typed and cross matched 4 times on average before use.
Other significant points.
1. No testing need be done for AIDS, hepatitis B&C, CJD., or any future
diseases.
2. This is a universal donor product--it doesn't need to be typed and
crossmatched.
3. . Product could be made readily available for every medical facility,
ambulance, armed services medic,etc. (R>G>)
4. Dr.. Drees also point out that there will be published medical papers on the progress of the trials. I asked him if this wouldn't acclerate how fast the major drug companies would be knocking at his door and he said yes it will. Based on these published accounts of the effectiveness of the trials there could be interest in as little time as 3 months after the trials begin. (Courtesy of Gwolf)
5. Just an update on the total funding requirements. The actual animal and human testing will require $20 million in total. Dr Drees included another $10-$12 million to fully bring the product to market. That additional $10-$12 million would include raw material and manufacturing cost, marketing and administrative expenses. So the actual funding would be $30 million, this would come from joint venturing with the major drug companies that he mentioned, through an additional underwriting of stock or a complete buyout of thecompany. (Courtesy of Gwolf)
6. Possibility of a buyout? There is always the possibility that a drug company will make an offer. Dr. Drees would prefer not to sell. However, depending on what the offer is, considerations for the shareholders would have to be evaluated and considered. Positives about buyout include:
1. They would have a large sales force in place.
2. Have specialist to deal with regulations and FDA.
3. Medical and technical professionals in place.
7. I asked Dr. Drees how he supported himself considering the fact that the company is not producing any income. He told me that he is known internationally as an expert in this field and does consulting for companies around the globe. In addition to that he has personal
retirement funds from the major drug companies where he worked. He was the president of various divisions for Ely Lilly and Abbott labs
One thing that impressed me is that Dr. Drees has a doctorate in
business management and has as I mentioned actually been the president of several divisions for large drug companies. The doctor has been with these companies and knows how to take the product to the market from start to finish. He also know how to manage the business once it gets to market, this should be of major importance to investors. (Courtesy of Gwolf)
8. That is exactly what he said,, He (Dr Drees) will be the first one in line for the human testing.....(Courtesy of Prospector)
9. Dr. Drees on Cancer: PHER-02 was able to help identify Cancer tumors.
Tumors to small to be seen on X-ray. When the productwas administered, it was attracted around the outside of the tumor. This was because tumors being a solid hard mass, has what is called "oxygen tension" or lack of oxygen. So what would happen, is this product would form a halo around the tumor and you could see a tumor 5 millimeters in diameter.
Shortly after that happened, the tumor began to open up. It is well know in medicine that if you oxygenate a tumor, it opens up and radiation therapy works better!. Also when they opened up, the tumors got smaller in size. Dr. Drees thinks it would be a great idea, but has not yet been able to try it, to take a particle of this material and attach to it a particle of Chemo-therapy. This way when it went into the body, instead of poisoning the whole body, it goes right to the tumor and penetrates the tumor with the Chemo-therapy. This way you would get more and stronger Chemo to the tumor to kill it. It's cal led Targeting. We haven't had time to finish this theory, but I'm sure it would work.
Competition
The competition mainly uses outdated blood. They try and clean it up,
cross link it, etc. to create artificial blood. Another problem is that there is not enough outdated blood in the world to produce enough for 60 million transfusions let alone 120-180 million transfusions/per year. Dr. Drees, author and noted expert, who lectures 2-3 times a year in the field, had prophesied from the beginning that the competitors would have problems. And problems they have had. There were about a dozen companies in blood substitutes about 10 years ago. Here's what is going on with some of the few survivors.
1. Baxter: In a 100 person trial, 40 people died (in the U.S.A.).
European trials have also been stopped.
2. Alliance: Used fluorocarbons like Sanguine does but a different form.
Had strategic alliance with Johnson & Johnson and the German company
Hoescht. Both companies canceled their funding.
3. Somatogen: Uses recombinant DNA. Had agreement with Eli Lilly. Eli
Lilly canceled agreement. Baxter has recently acquired Somatogen.
4. Biopure: Had contract with Upjohn. Upjohn canceled contract. Biopure
uses cow's blood.
The good thing is that the competition has had numerous troubles. The
bad thing is that this gives the product line a negative image. Remember that Sanguine's technology is different from the competitors. Sanguine's technology does not use outdated blood, cow's blood,etc. Also, Sanguine's technology is second generation, i.e. there was a successful 1st generation, but it was dropped by Japanese drug company, Green Cross Corp., due to false dates. Green Cross Corp. had no patents, so Sanguine patent application is effective.
ADDITIONAL KEY INFORMATION: I questioned Dr. Drees extensively on why no one else has brought a Flurocarbon product to market considering the fact that major universities and foreign governments are working on it. The real key to the product, come to find out, is the surfactants. Without the surfactants you don't have a complete product. The PHER-02 is 80% of the product and the surfactant is 20%, but no one else has been able to develop a surfactant to mix with the Flurocarbon to complete the product. I just felt like there was a piece of the puzzle missing here, I couldn't completely understand why no one else was working on this. Other companies can use the Flurocarbon but they have no workable surfactant to complete the product. So at least for me the picture becomes clear why no competition. Dr. Drees has been keeping this surfactant issue very close to the vest, this is his secret weapon so to speak. This also is why he doesn't want to file a patent right now, if he did everyone could see how he has finally accomplished what no one else has been able to do. The major drug companies don't know that he has found a surfactant, that's why they,re not knocking the doors down right now. When the animal trials are under way and medical reviews have been written then they will figure out that he has found a solution and come knocking. This is why the stock is undiscovered at this point in time. (Courtesy of Gwolf
Sanguine's Advisory Board
Herbert J. Meiselman Sc.D He is Professor of Physiology and Biophysics at the University of Southern California School of Medicine and authority on surfactant and the rheology of blood. He has published many articles relating to synthetic blood, including "Hemorheological Effects of a Nonionic Copolymer Surfactant,"Clinical Hemorheology, 1992: Effects of Cellular Morphology on the Viscoelastic Behavior of High Hematocrit Red Blood Cell Suspensions, 26 Biorheology 153,1989; and Osmolality-mediated Fahraeus and Fahraeus-Lindquist Effects for Human Red Blood Cell Suspensions." 254 American Journal of Physiology H238, 1988.
Kevin Tremper MD Dr temper is the Chairman of the Department of Anesthesiology at the University of Michigan and a leader in the field of synthetic blood research. His published articles on this subject include "Hemodynimic and Oxygen Transport Effects of a Perfluorochemical Blood Substitute, Fluosol DA-20" 8 Critical Care Medicine 738 1980 , rationale for the Clinical Studies of Anemia Treated with the Perfluorochemical Emulsion Fluosol, Advances in Blood Subtitute Research International Symposium, San Francisco, September 1982.
Dr. Thomas C. Drees M.B.A. PhD.. The company's founder and President, has been in the forefront of the artificial blood products for over twenty years. He was the President and CEO of Alpha Therapeutics, the only company to have abtained FDA approval of synthetic blood to date.. he brings to Sanguine many years of experience with the FDA approval process and all other aspects of the artificial blood industry. Dr Drees has written the extensively on the subject of artifical Blood. His publications include the book "Blood Plasma: The Promise and the Politics, published in 1983.
Milestone's-Time-lines
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Sanguine and Dr. Drees phone number: 626-405-0079
Shares Authorized 100 Million
Shares Issued 21 Million
Shares Restricted 14 Million
Float 7Million
Trading Symbol SGNC
Information Board
Subject 21537
07/07/98 Dr.Drees meeting with brokers, bankers, and investors. Courtesy of
Gwolf, Profiteer, Prospector, GeneralJ, LT-Z
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Sanguine & Dr. Drees additional postings
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Special Thanks to the members who keep posting the information.
CHIRODOC, DR.DAN, GWOLF, PROFITEER, PROSPECTOR, MIKE ANKLEY
CHIEF BRODY, GENERALJ, and all the others.
I apologize to those that were left out,
I assume all the above to be true but can not guarantee it.
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