EastGate Biotech Signs Definitive Investment and European Licensing Agreement With Nico Innovagroup S.r.l. for Liquid Insulin Mouth Rinse Solution
Aug. 27, 2018
Non-Dilutive Investment and Product License Includes Licensing Fee and Development Costs
WEST CALDWELL, NJ and TORONTO, ON / ACCESSWIRE / August 27, 2018 / EastGate Biotech Corp. (OTC PINK: ETBI), a pharmaceutical company that focuses on innovative technological developments specifically in insulin drug delivery for the treatment of type 2 diabetes, signed a definitive agreement effective August 10th, 2018 with Nico Innovagroup S.r.l. with its principal headquarters in Brescia, Italy. The definitive agreement encompasses the license of the company's liquid insulin mouth rinse solution for a period of 15 years in the European market in exchange for milestone payments and a royalty up to a 10% of the drug sales.
The terms of the definitive agreement mirror the previously announced Memorandum of Understanding and are related to the European licensing and distribution of the liquid insulin mouth rinse. The European license included 28 countries. Additionally, Nico Innovagroup will be responsible for the manufacturing and distribution of EastGate's nutraceutical products. Nico Innovagroup's licensing agreement is assignable, and Nico Innovagroup is already proceeding to transfer the agreement to the new incorporated subsidiary company Nico Innovapharma S.r.l., that will operate with a consortium of several mid-sized European pharmaceutical companies with the aim to approach much larger pharmaceuticals and to form a distribution framework capable of quickly bringing to market the oral insulin mouth rinse after receiving regulatory approval.
According to the terms of the definitive agreement, milestone payments will commence immediately.
1. The first milestone payment is an equity offering for 2.0 million preferred stock with priority position in the intellectual property of the liquid insulin mouth rinse. The preferred stock pays no dividend and simply gives the preferred shareholders priority treatment in the event of dissolution of the company and is convertible into common on a 1 for 1 basis. $2.0 million is due within 60 days of signing in exchange for 2.0 million preferred shares of ETBI at a price of $1.00/ share.
2. $8.0 million upon the successful completion of a phase 2 study on the liquid insulin mount rinse from the Philippines or any other market in which EastGate or is partner are able to conduct a trial.
3. $20 million investment for the purposes of funding the clinical trial expenses necessary to secure EMA regulatory approval. In the event the budget exceeds $20 million Nico Innovagroup will be granted additional shares at the price of $.50/share.
4. $8 million milestone payment no later than 60 days after EMA approval of a marketing license provided the budget is not exceeded. In no case will the milestone payments be less than $4.0 million
5. This is a 15-year agreement
6. Up to 10% Royalty Fee
"We are pleased to be working with Nico Innovagroup S.r.l, a private European investor, who recognizes the important role that oral insulin will play increasing patient compliance," said Anna Gluskin, CEO of EastGateBiotech. "We think we have found the ideal partner that can not only go after the underserved markets in the European region, but also go after the mainstream market controlled by big pharma. These entrenched relationships with big pharma are immeasurable. This sort of blanket coverage should have a profound impact on market penetration and patient compliance. The only real way existing pharmaceuticals can grow the diabetes market is through patient compliance. Studies have shown that patient compliance which results in glycemic controls is only 55%*. This means that 45% of type 2 diabetes (T2D) patients fail to achieve glycemic control and are primarily not taking their medicine as directed. With our oral insulin mouth rinse our partners feel confident that they will be able to target this non-compliant market including those with needle phobia. In general needle phobia effects over 20%** of the general population and our partners recognize the paradigm shift that will occur when oral insulin is available."
Rose, President of EastGate said, "Our overall game plan for the global market is growth through licensing and we believe this investment validates our licensing strategy going forward. The International Diabetes Foundation estimates that 66 million people in Europe have diabetes and 41 million people have impaired glucose intolerance. This is a very serious market and our partners are resolute that after 90 years trying to come up with an oral version of insulin that the timing is perfect for a widespread rollout of the oral Insulin mouth rinse should we achieve regulatory approval. Details of our clinical development are soon to follow."
"At Nico Innovagroup, we have been eyewitness to the effect of diabetes in the European continent," said Nicola Commisso, CEO of the group. "The drugs today, trying to address patient compliance with a once a week injectable are grossly inadequate, and might actually have a deleterious effect on the patients. We are delighted to work with EastGate which brings a fresh new approach to treating diabetes. We are so pleased to partner with EastGate because this agreement gives us the tools to develop the distribution network throughout Europe and allows us to capitalize on long-term existing relationships in manufacturing and distribution."
About EastGate Biotech
EastGate Biotech focuses on innovative technological developments and produces and distributes innovative drug compounds and healthy nutraceuticals that are based on natural therapies absorbed by the body. We utilize advanced nanotechnologies and alternative delivery systems that take difficult to deliver compounds and deliver them using our nanotechnology platform which ultimately increases the bioavailability to the body. Using our methods of delivery provides healthy alternatives to conventional pharmaceuticals that all-too-often create dangerous side-effects and unexpected consequences for those trying to attain and maintain a healthy lifestyle. EastGate's wholly owned subsidiary Omni Surgery and Anti-Aging Centre is the first of many surgery centers to come under the Omni umbrella as we plan to roll up existing business under the Omni brand and expand our footprint globally.
About Nico Innovagroup
Nico Innovagroup S.r.l. ( www.nicoinnovagroup.com ) is an Italian innovative start-up that operate in the healthcare and biotech field with a diversified approach and activities in genomics, pharma, precision and regenerative medicine, IVD and medical devices, both directly and through related and subsidiary companies.
The company is now incorporating the subsidiary Nico Innovapharma S.r.l., which was specifically conceived for the purpose of joint development with EastGate Biotech, and is signing cooperation and distribution agreements with mid-sized European pharmaceutical companies that will be responsible for activities in each European country.
Cautionary statement on forward-looking information
All statements, other than statements of historical fact, contained or incorporated by reference in this news release constitute "forward-looking information" or "forward-looking statements" within the meaning of certain securities laws, including the provisions for "safe harbor" under the United States Private Securities Litigation Reform Act of 1995 and are based on expectations, estimates and projections as of the date of this news release.
The words "anticipates,'' "plans,'' "expects,'' "indicate,'' "intend,'' "scheduled,'' "estimates,'' "forecasts,'' "focus,'' "guidance,'' "initiative,'' "model,'' "methodology,'' "outlook,'' "potential,'' "projected,'' "pursue,'' "strategy,'' "study,'' "targets,'' or "believes,'' or variations of or similar such words and phrases or statements that certain actions, events or results "may,'' "could,'' "would,'' or "should,'' "might,'' or "way forward,'' "will be taken,'' "will occur" or "will be achieved" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies. The risks, estimates, models and assumptions contained or incorporated by reference in this release, include those identified from time to time in the reports filed by EastGate with the SEC, which should be considered together with any forward-looking statement. EastGate undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE: EastGate Biotech Corp.