PART II
PART III
PART IV
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NANOANTIBIOTICS, INC.
This Annual Report on Form 10-K and the documents incorporated herein by reference contain forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates and projections about Turbine Truck Engines Inc.’s industry, management beliefs, and assumptions made by management. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results and outcomes may differ materially from what is expressed or forecasted in any such forward-looking statements.
PART I
Introduction
We are an early developmental stage biotechnology company engaged in the discovery, development and commercialization of new classes of broad spectrum antibiotics for gram-negative and gram-positive bacterial infections, including some of the most difficult-to-treat Multi Drug Resistant Bacteria, also called “Superbugs” The Company plans on developing the following eight (8) pharmaceutical compounds:
Our drug discovery platform currently provides a multi-pronged level understanding of interactions between drug candidates and their bacterial targets and enables us to engineer antibiotics with enhanced characteristics to attack a Drug Resistant Bacteria with a multi-targeted approach. The Company plans on developing eight (8) pharmaceutical compounds. Our drug candidates are in the development stage. Our pharmaceutical compounds originated at Kard, a preclinical contract research organization founded by our President Rajah Menon in 2002 and of which Mr. Menon is its principal shareholder. These compounds were composed and formulated by researchers at Kard who then conducted in-vitro studies. On October 3, 2013, Kard and Mr. Menon assigned all of their rights, formulations, and all studies and data related to efflux pump antibiotics to the Company. The candidates have been studied in cell-based assays (in-vitro), but have not been studied in small animals (in-vivo) or animals with drug resistant bacteria for efficacy, efficiency and toxicity. We currently own all development and marketing rights to our products. We are contracting research and development of our technologies to third parties. The Company intends to file patent applications for each of these candidates as studies advance and funds become available. As of the date of this filing we have not yet achieved our goal of creating an effective and safe efflux pump blocker and further research and development is necessary.
The Need for New Broad Range Antibiotics
According to an October 2010 market research report by Global Industry Analysts, Inc., or GIA, entitled “Antiobiotics: A Global Strategic Business Report”, or the GIA Report, the global market for antibiotics is forecast to reach US $40.3 billion by the year 2015, propelled by intensive research in new areas of treatment, a favorable regulatory environment and the emergence of new drug classes. In addition, according to the GIA Report, huge investments in R&D aid in new breakthroughs and technological developments.
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There has been a steady growing demand for anti-bacterials across the world. A continuing increase in the elderly population has also contributed substantially to the rising severity and incidence of bacterial infections. Of the total affected population, nearly one-fifth of the patients suffer from hospital-acquired infections. In the US alone, approximately 90,000 people die each year due to such infections. The growing resistance of pathogens, leading to virulent forms of infection that are difficult to treat, further complicates the situation (source: GIA Report).
About Bacteria
The Gram stain test, developed in the 1800s by Hans Christian Gram, is a method for classifying different types of bacteria using a chemical stain and viewing through a microscope the results on the bacteria’s protective cell wall. Most bacteria are classified into two groups: Gram-positive or Gram-negative, depending on whether they retain a specific stain color. Gram-positive bacteria retain a purple-colored stain in their thick cell walls, while Gram-negative bacteria appear pinkish or red.
Gram-positive bacteria normally found on the skin, such as Staphylococcus epidermidis or Staphylococcus aureus, are the most common bacterial contaminants of blood products. This type of contamination is thought to occur when the bacteria on the skin is passed into the collected blood through the collection needle. Gram-negative bacteria can cause infections including pneumonia, bloodstream infections, wound or surgical site infections, and meningitis. Examples include Acineobacter, Klebsiella, and Escherichia coli (E.coli). Gram-negative bacteria are resistant to multiple drugs and are increasingly resistant to most available antibiotics. Bacteria, such as E. coli, may contaminate the donation when blood is collected from donors who have bacterial infection without symptoms (source: Center for Disease Control and Prevention article entitled “Blood Safety”, 2013).
Antibiotics and Drug Resistance
An antibiotic is given for the treatment of an infection caused by bacteria. The discovery of penicillin in 1928 was followed by the discovery and commercial production of many other antibiotics. We now take for granted that any infectious disease is curable by antibiotic therapy. Antibiotics are manufactured at an estimated scale of about 100,000 tons annually worldwide, and their use had a profound impact on the life of bacteria on earth. More strains of pathogens have become antibiotic resistant, and some have become resistant to many antibiotics and chemotherapeutic agents, the phenomenon of multidrug resistance (source: Nikaido, H., “Multidrug Resistance in Bacteria” in Annual Review of Biochemistry, 2009, or Nikaido 2009).
Mechanisms of Drug Resistance
Mutation of Target Protein
Bacteria can become resistant through mutations that make the target protein less susceptible to the agent. High-level production of drug-resistant target enzymes from plasmids can make the bacteria resistant, and the resistant genes spread on plasmids. A plasmid is a small, circular, double-stranded DNA molecule that is distinct from a cell's chromosomal DNA and naturally exists in bacterial cells (source: Nikaido 2009).
Most drug resistance genes are effective when expressed from plasmids. Often, many genes are present on a single plasmid, so that multidrug resistance can be transferred to a bacterium in a single conjugation event. Resistance plasmids are not only stably maintained, but also transferred between bacterial cells at a very high efficiency, in many cases approaching 100% (source: Nikaido 2009).
Bypassing the Target
Vancomycin, an antibiotic used in the treatment of infections caused by Gram-positive bacteria, has an unusual mode of action. Instead of inhibiting an enzyme, it binds to a substrate, a precursor of the cell wall.. Because of this mechanism, it was assumed that it would be impossible to generate resistance against vancomycin. However, vancomycin resistance is now prevalent among certain bacteria normally present in the intestinal tract (source: Nikaido 2009).
Bacterial Efflux Pumps
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In Gram-negative bacteria, access can be generally reduced by decreasing the influx across the outer membrane barrier. Drug access to the target can be reduced by active efflux processes. Drug-specific efflux pumps produce drug resistance by active efflux of a specific drug. Multi-drug efflux pumps produce resistance to multiple bacteria-cides and were causing hospital-acquired bacterial (S. aureus) infections (source: Nikaido 2009).
Major Targets of our Candidates
The following paragraphs summarize the major targets of our candidates:
Methicillin-Resistant Staphylococcus Aureus (MRSA)
Methicillin-resistant Staphylococcus aureus (MRSA) is resistant not only to methicillin (which was developed to fight against penicillinase-producing S. aureus) but also to many antibiotics (such as aminoglycosides, macrolides, tetracycline, chloramphenicol, and lincosamides). Such strains are also resistant to disinfectants. MRSA can be a major source of hospital-acquired infections. An old antibiotic, vancomycin, was resurrected for treatment of MRSA infections. However, transferable resistance to vancomycin is now quite common in Enterococcus and found its way to MRSA in 2002, although such strains are still rare. An even more serious threat may be the emergence of Gram-negative pathogens that are resistant to essentially all of the available agents. Research had time to react against the threat by MRSA. Thus, there are newly developed antibiotic agents that are active against vancomycin-resistant MRSA, such as linezolid and quinupristin/dalfopristin (source: Nikaido 2009).
Drug-Resistant Tuberculosis (MDR-TB and XDR-TB)
With 1.4 million deaths in 2011 resulting from tuberculosis (TB), a chronic disease resulting from infection with a slow-growing pathogen, Mycobacterium tuberculosis, the disease competes with the human immunodeficiency virus (HIV) as the top cause of death from an infectious agent. Following neglect of the disease during the 1980s the recognition of its substantial burden has kept TB control high on the international public health agenda since the early 1990s. The dramatic effect of the HIV epidemic on numbers of TB cases and deaths in Africa, evidence that short-course chemotherapy is among the most cost-effective of all healthcare interventions, and most recently the global concerns about the emergence of multidrug-resistant TB (MDR-TB) and extensively drug resistant TB (XDR-TB) have emphasized the need to address TB more effectively on a global scale (source: Glaziou, P., Floyd, K, Raviglione, M., “Global Burden and Epidemiology of Tuberculosis” in Clinics in Chest Medicine, 2009).
Enterococcus are normal inhabitants of the gastrointestinal tract of humans and animals. Two species cause the most enterococcal infections: Enterococcus faecalis and E. faecium. The relative importance of E. faecium as a pathogen has increased with the occurrence of high-level resistance to multiple antimicrobial drugs, such as ampicillin and vancomycin. The rapid increase of vancomycin resistance compromises physicians' ability to treat infections caused by many of these strains because often no other antimicrobial drugs are available. The emergence of Vancomycin-Resistant Enterococci (VRE) was first identified in 1987 in Europe and within 10 years VRE represented >25% of Enterococci associated with bloodstream infections in hospitalized patients in the United States (source: Center for Disease Control and Prevention, Emerging Infectious Disease article entitled “Global Spread of Vancomycin-resistant Enterococcus faecium from Distinct Nosocomial Genetic Complex, 2005).
Drug-Resistant Streptococcus Pneumoniae
Gram-positive Streptococcus pneumonia is one of the most virulent human pathogens and causes a wide range of infections, including invasive and non-invasive diseases. There are about one million new pneumococcal infections every year, majority of which occur among children <5 years, and the organism is responsible for 10–20% of all deaths in this age group. A distinct population of S. pneumonia showed significantly higher levels of resistance against various antibiotics (penicillin, erythromycin, tetracycline, chloramphenicol, and cefotaxime) compared to other pneumococcal sub-populations that did not show evidence of recombination (source: Donkor, ES, “Understanding the Pneumococcus: Transmission and Evolution” in Frontiers in Cellular and Infection Microbiology, 2013).
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Our Drug Candidates are Designed to Block Efflux Pumps and Destroy Drug Resistant Bacteria
We are designing drug candidates to block efflux pumps by mechanisms such as (1) interference with the regulatory steps needed for the expression of the efflux pump, (2) chemical changes in the antibiotic structure hence hindering its attachment as the specific substrate, (3) disruption of the assembly of the efflux pump-components, (4) inhibition of the substrate (antibiotic) binding by either competitive or non-competitive binding using other compounds, (5) blocking the outer most pores responsible for the efflux of antibiotic compound and (6) interference with the energy required for the pump activity.
A bactericidal antibiotic, such as Penicillin kills the bacteria. A bactericidal usually either interferes with the formation of the bacterium's cell wall or its cell contents. A bacteriostatic, such as tetracyclines, stops bacteria from multiplying. Our drug candidates are designed to inhibit infection acting as both bactericidal and bacteriostatic agents. By using nano technology to deliver an efflux pump blocker and antibiotic into the bacteria, it enables the antibiotics to maintain a high concentration at their target inside the bacteria greatly improving the efficacy of the antibiotics.
Research and Development
For the year ended June 30, 2014, the Company spent $49,419 in research and development activities, however prior to the Company’s incorporation, research on efflux pump blockers and in-vitro studies were performed at Kard, a preclinical contract research organization founded by our President Mr. Menon in 2002 and of which Mr. Menon is its principal shareholder.
Outsourcing
We outsource the manufacture of our research materials to outside vendors. We incurred $9,600 in outsourced costs for the year ended June 30, 2014.
Government Regulation
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Government authorities in the United States, at the federal, state and local level, and in other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of products such as those we are developing. Any pharmaceutical candidate that we develop must be approved by the FDA before it may be legally marketed in the United States and by the appropriate foreign regulatory agency before it may be legally marketed in foreign countries.
United States Drug Development Process
In the United States, the FDA regulates drugs under the Federal Food, Drug and Cosmetic Act, or FDCA, and implementing regulations. Drugs are also subject to other federal, state and local statutes and regulations. Biologics are subject to regulation by the FDA under the FDCA, the Public Health Service Act, or the PHSA, and related regulations, and other federal, state and local statutes and regulations. Biological products include, among other things, viruses, therapeutic serums, vaccines and most protein products. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable United States requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions. FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us.
The process required by the FDA before a drug or biological product may be marketed in the United States generally involves the following:
• Completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices or other applicable regulations;
• Submission to the FDA of an Investigational New Drug Application, or an IND, which must become effective before human clinical trials may begin;
• Performance of adequate and well-controlled human clinical trials according to the FDA's current good clinical practices, or GCPs, to establish the safety and efficacy of the proposed drug or biologic for its intended use;
•Submission to the FDA of a New Drug Application, or an NDA, for a new drug product, or a Biologics License Application, or a BLA, for a new biological product;
•Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the drug or biologic is to be produced to assess compliance with the FDA's current good manufacturing practice standards, or cGMP, to assure that the facilities, methods and controls are adequate to preserve the drug's or biologic's identity, strength, quality and purity;
• Potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the NDA or BLA; and
• FDA review and approval of the NDA or BLA.
The lengthy process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations require the expenditure of substantial resources. There can be no certainty that approvals will be granted.
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Before testing any compounds with potential therapeutic value in humans, the drug or biological candidate enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the drug or biological candidate. The conduct of the preclinical tests must comply with federal regulations and requirements including good laboratory practices. The sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA places the clinical trial on a clinical hold within that 30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. The FDA may also impose clinical holds on a drug or biological candidate at any time before or during clinical trials due to safety concerns or non-compliance. Accordingly, we cannot assure that submission of an IND will result in the FDA allowing clinical trials to begin, or that, once begun, issues will not arise that suspend or terminate such trial.
Clinical trials involve the administration of the drug or biological candidate to healthy volunteers or patients having the disease being studied under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor's control. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety. Each protocol must be submitted to the FDA as part of the IND. Clinical trials must be conducted in accordance with the FDA's good clinical practices requirements. Further, each clinical trial must be reviewed and approved by an independent institutional review board, or IRB, at or servicing each institution at which the clinical trial will be conducted. An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial until it is completed.
Human clinical trials prior to approval are typically conducted in three sequential Phases that may overlap or be combined:
• Phase 1. The drug or biologic is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients having the specific disease.