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We are a biopharmaceutical company that was originally formed to explore new methods of use of alpha-1 antitrypsin, a naturally occurring protein that can be purified from human blood and is often referred to as "plasma-derived AAT" (“p-AAT”). AAT has been shown in a variety of animal models to have profound anti-inflammatory and tissue protective properties. Plasma-derived AAT has a greater than 25-year safety record as an approved treatment for emphysema in AAT-deficient patients. The Company’s early strategy was based on licensing "method- of-use" patents that cover new treatment indications for AAT and commercializing these through royalty agreements with existing p-AAT manufacturers. More recently our focus has shifted to the pharmaceutical development of a novel recombinant version of AAT for use in a variety of inflammatory and immune-modulated diseases. Clinical experience with new uses of p-AAT is growing. In 2012, we released initial findings of our own clinical study of p-AAT for the treatment of patients with recent onset Type 1 diabetes. The study has now been completed and shows stabilization of c‑peptide levels (a measure of the ability of pancreatic beta cells to produce insulin) in certain patients and suggests correlation of these effects with reductions in the pro-inflammatory mediator, IL-1β. During the past three years, other organizations, such as the Immune Tolerance Network and Kamada, Ltd. (Israel), have also conducted early clinical trials in Type 1 diabetes using plasma-derived AAT with similar results. Recently, Grifols and Kamada, two of the p-AAT manufacturers, have begun Phase 2/3 placebo-controlled trials in Type 1 diabetic patients in the US and Europe. We are currently supporting two new multicenter trials of the use of plasma-derived AAT in patients suffering from acute steroid-refractory GvHD. A clinical solution for this life-threatening condition would represent a significant medical breakthrough and may even allow the broader use of bone marrow transplants to treat patients with otherwise lethal leukemias. We are also monitoring a pilot study of AAT in acute myocardial infarction being conducted at Virginia Commonwealth University. While we continue to support potential new uses of p-AAT, our focus is now on the research and development of recombinant “Fc fusion” forms of AAT. These forms are created by fusing naturally occurring human AAT to the Fc portion of an immunoglobulin antibody in order to increase potency and provide for longer lasting blood levels (“Fc-AAT”). To date, a large number of in vitro and in vivo studies suggest that Fc-AAT may be roughly 50x more potent than p-AAT and may also have a longer duration of effect. If borne out in clinical trials, this could lead to a product that can be made rapidly and in large quantities, is able to be self-administered subcutaneously and is able to be given less often than once per week. Each of these represents a significant competitive improvement over existing plasma-derived products which must be given intravenously, once per week in a doctor’s office or infusion clinic, and are very expensive due to both product and infusion procedure costs. We have recently placed the first of these Fc-AAT molecules on a formal development track and are organizing preclinical activities to enable the initial clinical trials in 2015/16. A patent covering our lead molecule was issued in the US in late 2013 and corresponding applications are under review in Europe and Canada. We now expect to have market exclusivity for a minimum of 12 years from the time of introduction in the US and, if successful, for at least 10 years in Europe
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