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QUARTERLY UPDATE
Business Update and Fourth Quarter and Year-End 2007 Financial Results
Snapshot
April 16, 2008
Pro-Pharmaceuticals, Inc. (“Pro-Pharmaceuticals” or “the Company”) is a
development-stage company engaged in the discovery, development, and
commercialization of first-in-class, targeted therapeutic compounds for advanced
treatment of cancer, liver, microbial and inflammatory diseases. The Company’s
initial focus is the development of a new generation of anti-cancer treatments using
carbohydrate polymers to increase survival and improve the quality of life for cancer
patients. Pro-Pharmaceuticals believes that the need to improve drug therapies,
particularly anti-cancer agents, is significant and represents a large market
®
opportunity. DAVANAT , the lead pipeline candidate, is a proprietary new chemical
entity that is currently in Phase II trials for first-line treatment of colorectal and biliary
cancer. The Company’s targeted therapeutic compounds can also be used to treat
other serious diseases, such as liver and kidney fibrosis. Pro-Pharmaceuticals has
entered into research collaborations with the Mt. Sinai School of Medicine in New
York to study the anti-fibrotic effects of the Company’s novel carbohydrate
compounds on liver fibrosis; with the Brigham and Women’s Hospital in Boston to
evaluate the anti-fibrotic effects of these compounds to treat acute and chronic
kidney disease; and with the University of California at Davis and Fudan University in
Shanghai to conduct anti-fibrosis tests. In animal models, the Company’s compounds
have shown to significantly reduce collagen expression and reverse fibrosis.
Whereas previous in vitro data has only indicated a reversal of fibrosis markers, in
proof-of-concept animal studies during October 2007, the compounds significantly
reduced collagen expression and reversed liver fibrosis.
P R O
P H A R M A C E U T I C A L S,
I N C.
Pro-Pharmaceuticals, Inc.
7 Wells Avenue
Newton, MA 02459
Phone: (617) 559-0033
Fax: (617) 928-3450
www.pro-pharmaceuticals.com
Recent Financial Data
Ticker (Exchange)
PRW (AMEX)
Recent Price (04/16/08)
$0.39
52-week Range
$0.25 - $0.95
Shares Outstanding*
~48 million
Market Capitalization
$18.7 million
Avg. 3-month Volume
150,562
Insider Owners + 5%
16%
Institutional Owners
~10%
EPS (Year ended 12/31/07)
($0.24)
Employees
7
* At March 28, 2008.
Key Points
Pro-Pharmaceuticals reported a net loss for 2007 of approximately $9.4 million, or ($0.24) per share basic and
fully diluted, versus $3.2 million, or ($0.11) per share basic and fully diluted, in 2006. The increase was largely
due to non-cash expense related to the change in the fair value accounting of the Convertible Debentures and
Warrants and non-cash interest expense of $3.1 million in 2007 versus roughly $3.7 million in income for 2006.
®
In March 2008, the FDA granted an Investigational New Drug (IND) application for the use of DAVANAT in
combination with chemotherapy and a biologic to treat a breast cancer patient. This is the third cancer indication
for which Pro-Pharmaceuticals has received a compassionate use IND approval.
In the ongoing Phase II colorectal cancer trial, 43% of evaluable patients have experienced tumor shrinkage of
greater than 30%, and four patients have been stabilized for up to seven months. In the ongoing Phase II biliary
cancer trial, one patient had 35% tumor shrinkage, and five patients had stabilized disease for up to six months.
No patients in either trial have had an increase in drug-related toxicity.
Pro-Pharmaceuticals recently reported that of the 20 patients who completed the Company’s Phase II trial in
end-stage metastatic colorectal cancer in 2006, three patients survived for more than a year, two patients lived
for more than two years, and one patient was still alive. These patients had previously failed a series of
®
®
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treatments, including Avastin , Erbitux , and multiple lines of chemotherapy. Data indicated that DAVANAT
extended median survival by 6.7 months and median progression-free survival by 8.4 weeks.
Pro-Pharmaceuticals had cash and cash equivalents of approximately $1.3 million at December 31, 2007, and
raised additional net proceeds of $3.4 million in a registered direct offering in February 2008.
PLEASE REFER TO THE EXECUTIVE INFORMATIONAL OVERVIEW® (EIO®), JUL. 23, 2007, FOR A FULL COMPANY REPORT.
P R O
P H A R M A C E U T I C A L S,
I N C.
Financial Results and Recent Events
Fourth Quarter Financial Results
Pro-Pharmaceuticals reported financial results for its fourth quarter (ended December 31, 2007) on March
28, 2008. For the three months ended December 31, 2007, Pro-Pharmaceuticals had a net operating loss
of approximately $1.4 million versus a net operating loss of $1.3 million for the same period in 2006.
At December 31, 2007, the Company had cash and cash equivalents of approximately $1.3 million.
Subsequent to the quarter’s end, in February 2008, Pro-Pharmaceuticals raised net proceeds of
approximately $3.4 million from a registered direct offering. Including the funding raised subsequent to the
quarter’s end, Pro-Pharmaceuticals believes that its current cash position is sufficient to support
operations into October 2008.
Year-End 2007 Financial Results
On March 28, 2008, Pro-Pharmaceuticals also reported financial results for its full year 2007. Research
and development (R&D) expense for the year ended December 31, 2007, was approximately $2.1 million
versus $3.0 million for 2006. The decrease in R&D expense during 2007 was primarily due to the
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completion of two clinical trials in 2006 (Phase I and II colorectal cancer trials of DAVANAT ) and the
discontinuation in 2007 of a Phase lll clinical trial in Europe. Pro-Pharmaceuticals had initiated a Phase III
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colorectal cancer trial of DAVANAT in Europe at the end of 2006, but did not begin dosing patients due
to financial constraints.
General and administrative expense for 2007 was approximately $4.4 million versus $4.0 million for the
full year 2006. The increase was largely the result of higher legal expense, which was offset by a
reduction in payroll that occurred as employees took voluntarily reduced salaries to conserve cash.
Net loss for 2007 was approximately $9.4 million, or ($0.24) per share basic and fully diluted, versus
roughly $3.2 million, or ($0.11) per share basic and fully diluted, in 2006. Approximately $3.1 million of the
2007 results was non-cash expense related to the change in the fair value accounting of the Convertible
Debentures and Warrants and non-cash interest expense versus approximately $3.7 million in income for
2006.
Recent Events
An overview of the Company’s recent press releases is provided below and on page 3, referring the
reader to Pro-Pharmaceuticals’ website for complete press releases (www.pro-pharmaceuticals.com).
On April 14, 2008, Pro-Pharmaceuticals announced that it selected Vitale Caturano & Company Ltd.
to serve as the Company’s independent registered public accounting firm for the fiscal year ending
December 31, 2008. Vitale Caturano replaces the Company’s previous independent registered public
accountants, Deloitte & Touche LLP.
On April 7, 2008, Pro-Pharmaceuticals announced it signed a Letter of Intent with Yiaco Medical
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Company K.S.C.C. (YIACO-KUW) of Kuwait for the commercialization of DAVANAT for the
treatment of colorectal and biliary cancer. YIACO serves 18 countries and represents 80 healthcare
companies in the Middle East and North Africa.
On March 24, 2008, the Company announced that the U.S. Food and Drug Administration (FDA)
®
granted an Investigational New Drug (IND) application for the use of DAVANAT to treat a breast
cancer patient. This was the third cancer indication for which Pro-Pharmaceuticals received a
compassionate use IND approval. Prior indications were biliary and colorectal cancer.
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QUARTERLY UPDATE
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P H A R M A C E U T I C A L S,
I N C.
On March 3, 2008, the Company announced that data of all end-stage colorectal cancer patients from
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its Phase II trial showed that DAVANAT extended median survival by 6.7 months or 29 weeks after
all other treatments were exhausted. The data for the 20 patients who completed the trial revealed
that three patients survived more than one year, two patients survived more than two years, and one
patient was still alive.
On February 28, 2008, Pro-Pharmaceuticals reported that it closed its previously announced
registered direct equity offering of Common Stock and Warrants. The Company received net
proceeds of approximately $3.4 million.
On February 15, 2008, the Company announced that it entered into definitive agreements with new
and existing investors to raise gross proceeds of $3.775 million though a registered direct offering.
Under terms of the agreements, the Company sold 7,550,000 shares of Common Stock at $0.50 per
share. As part of the transaction, investors also received Warrants, with a five-year term, to purchase
7,550,000 shares of Common Stock at an exercise price of $0.70. Investors also received Warrants,
with a term of four months, to purchase a total of 3,020,000 shares of Common Stock with an
exercise price of $0.67 per share. The Warrants are not exercisable until August 16, 2008.
On February 11, 2008, Pro-Pharmaceuticals announced that new data of 14 end-stage colorectal
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cancer patients from its Phase II trial showed that DAVANAT extended median survival by more
than six months. The Company tracked these patients and gathered data after they left the trial. The
patients entered the trial with disease that progressed despite previously being treated with standard
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chemotherapies and biologics, such as Avastin and Erbitux .
On February 6, 2008, the Company announced that the U.S. Securities and Exchange Commission
(SEC) declared its shelf registration statement effective relating to the offer and sale of up to $10
million of securities.
On January 29, 2008, Pro-Pharmaceuticals announced that it finalized the statistical analysis of its
completed Phase II colorectal cancer trial for 20 previously treated patients. The study demonstrated
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the benefit of DAVANAT for colorectal cancer patients refractory to approved chemotherapies.
Also on January 29, 2008, the Company announced it filed a shelf registration statement on Form S-3
with the SEC.
CRYSTAL RESEARCH ASSOCIATES, LLC
QUARTERLY UPDATE
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P R O
P H A R M A C E U T I C A L S,
I N C.
Company Background
Pro-Pharmaceuticals, Inc. (“Pro-Pharmaceuticals” or “the Company”) is a development-stage company
engaged in the discovery, development, and commercialization of first-in-class, targeted therapeutic
compounds for advanced treatment of cancer, liver, microbial, and inflammatory diseases. The
Company’s initial focus is the development of a new generation of anti-cancer treatments using
carbohydrate polymers to increase survival and improve the quality of life for cancer patients. ProPharmaceuticals believes that the need to improve drug therapies, particularly anti-cancer agents, is
®
significant and represents a large market opportunity. DAVANAT , the Company’s lead pipeline
candidate, is a proprietary new chemical entity that is currently in Phase II trials for first-line treatment of
colorectal and biliary cancer.
The Company’s targeted therapeutic compounds can also be used to treat other serious diseases, such
as liver and kidney fibrosis. To this extent, Pro-Pharmaceuticals has entered into research collaborations
with the Mount Sinai School of Medicine in New York to study the anti-fibrotic effects of its carbohydrate
compounds on liver fibrosis; with the Brigham and Women’s Hospital in Boston to evaluate the antifibrotic effects of these compounds at treating acute and chronic kidney disease; and with the University
of California at Davis and Fudan University in Shanghai to conduct further anti-fibrosis tests. The
Company’s novel compounds have shown to reduce collagen expression and reverse fibrosis in animal
models. Whereas previous in vitro data has only indicated a reversal of fibrosis markers, in a recent proofof-concept animal study, the compounds both significantly reduced collagen expression and reversed
liver fibrosis.
The Company employs proprietary, non-toxic carbohydrate compounds that bind to specific sites (lectins)
on the surface of cancer cells. Lectins are cell-surface proteins that recognize carbohydrates. When a
specific lectin receptor (Galectin) is targeted by a side chain (galactose) attached to a mannose
backbone, it creates an approach that may allow for higher doses of chemotherapy with substantially
reduced toxicity.
Pro-Pharmaceuticals leverages its technology in a diverse development pipeline, shown in Figure 1. The
Company initially seeks to extend survival and improve the quality of life for cancer patients, but is also
addressing other diseases, such as liver fibrosis and microbial disease.
Figure 1
Pro-Pharmaceuticals, Inc.
PRODUCT DEVELOPMENT PIPELINE
PRODUCT
INDICATION
DAVANAT®/5-FU
line IV
All Solid Tumors
Completed
DAVANAT®/5-FU
line IV
Colorectal Cancer
Completed
DAVANAT®/5-FU
line I
Biliary Cancer
Ongoing
DAVANAT®/5-FU/
LV/Avastin® line I
Colorectal Cancer
Ongoing
PRO-GR 300
Liver Disease
PRO-NAC 050
Microbial Disease
Discovery
Pre-clinical
Phase I
Phase II
Phase III
Source: Pro-Pharmaceuticals, Inc.
CRYSTAL RESEARCH ASSOCIATES, LLC
QUARTERLY UPDATE
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DAVANAT
P H A R M A C E U T I C A L S,
I N C.
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DAVANAT , the Company’s lead product candidate, is a complex sugar derived from plant sources with a
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precisely defined chemical structure. Employing the Company’s Carbosome™ technology, DAVANAT
has a mechanism of action that is based upon the management of lectins—specific receptors that bind
only to a particular type of carbohydrate. The product is formulated to attach to lectins on tumor cells,
while selectively avoiding surrounding healthy tissue.
In 2007, the U.S. Food and Drug Administration (FDA) granted compassionate use Investigational New
®
Drug (IND) applications for DAVANAT to treat patients with unresectable cholangiocarcinoma (bile duct
cancer that is unable to be surgically removed) that progressed after initial chemotherapy. In March 2008,
®
the FDA also granted a compassionate use IND for DAVANAT to treat a breast cancer patient.
Clinical Trials for DAVANAT
®
Pro-Pharmaceuticals is currently dosing patients in a Phase II clinical trial for first-line treatment of biliary
cancer and a Phase II trial for first-line treatment of chemo-sensitive patients with metastatic colorectal
®
cancer. To date, the Company has dosed 76 patients with DAVANAT . Details of Pro-Pharmaceuticals’
®
pre-clinical and clinical trials are provided on pages 30-40 of the Executive Informational Overview
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(EIO ), located on Crystal Research Associates’ website at www.crystalra.com.
Phase I Trial for Third- and Fourth-line Patients with Solid Tumors. In 2005, the Company completed
®
a Phase l study to evaluate DAVANAT , alone and in combination with chemotherapy, as a treatment
for solid tumors. The trial included 40 end-stage patients with advanced solid tumors who had already
failed chemotherapy, radiation therapy, and/or surgical treatments. The objective of the open-label
®
2
study was to evaluate the safety and tolerability of escalating doses of DAVANAT (30 mg/m to 280
2
mg/m ) when administered alone and in combination with chemotherapy. When they entered the
study, the third- and fourth-line cancer patients had advanced metastatic tumors that averaged more
than 100 mm, progressive disease, and were refractory to chemotherapeutic agents.
Based on objective tumor assessment, disease was stabilized in 14 of 26 evaluable patients with
measurable disease. Furthermore, 7 of 10 patients were stabilized at the highest dose level of
®
DAVANAT administered in the sixth and final cohort. Efficacy results were analyzed based on
Response Evaluation Criteria in Solid Tumors (RECIST) following completion of the second cycle of
treatment. RECIST defines stable disease as “[n]either sufficient shrinkage to qualify for partial
response (more than 30% shrinkage) nor sufficient increase to qualify for progressive disease
(greater than 20% increase) taking as reference the smallest sum longest diameter since the
treatment started.”
®
The Phase I data also demonstrated that DAVANAT was well tolerated by patients. The maximum
®
tolerated dose was not reached, indicating that DAVANAT was safe and has the potential for further
dose escalation. Adverse side effects were primarily disease related. Additionally, results showed that
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DAVANAT remained significantly longer in the bloodstream of cancer patients, increasing efficacy
with no increase in toxicity.
Phase II Trial for End-Stage Patients with Third- and Fourth-line Metastatic Colorectal Cancer. In
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2004, the Company initiated a Phase II clinical trial to further evaluate DAVANAT for end-stage
patients with third- and fourth-line metastatic colorectal cancer. The multi-center, open-label, singledose level study was designed to evaluate up to 15 patients in stage one, and up to 18 patients in
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stage two. The study, which was designed to evaluate the efficacy and safety of DAVANAT in
combination with chemotherapy when administered in monthly cycles, had two objectives: (1) to
document the rate of response and stabilization of patients with advanced colorectal cancer; and
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(2) to continue evaluating the safety of DAVANAT in combination with chemotherapy. Dosing of
patients began in May 2005, and in May 2006, the Company stopped recruiting for the study because
it achieved its objectives.
CRYSTAL RESEARCH ASSOCIATES, LLC
QUARTERLY UPDATE
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P H A R M A C E U T I C A L S,
I N C.
Data indicates that based on objective tumor assessment, one patient experienced a partial tumor
response and 6 of 20 patients had stabilized disease. The patients entered the trial with disease that
progressed despite previous treatment with standard chemotherapies and biologics. New data of 20
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patients from this trial also showed that DAVANAT extended median survival by more than six
months. Pro-Pharmaceuticals tracked these patients and gathered data after they left the trial. Two
®
patients survived more than two years. In addition, results indicate that DAVANAT extended median
progression-free survival to 8.4 weeks.
Phase II Trial for First-line Treatment of Patients with Biliary Cancer. In 2007, the Company initiated a
Phase ll trial for the first-line treatment of patients with biliary cancer. Biliary cancer may represent an
opportunity for Orphan Drug status. The multi-center, open-label, single-dose level study is designed
®
to enroll up to 42 patients. Pro-Pharmaceuticals is evaluating the efficacy and safety of DAVANAT
when administered for at least two monthly cycles or until disease progression. The trial has two
objectives: (1) achieve a complete or partial tumor response in 20% of patients (17% in the first
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stage); and (2) validate the safety of the DAVANAT regimen in this patient population.
Phase II Trial for First-line Patients with Colorectal Cancer. In 2006, Pro-Pharmaceuticals initiated a
Phase II trial for first-line treatment of colorectal cancer patients. The multi-center, open-label, singledose level study is designed to evaluate up to 50 patients who are unable to bear the high toxicity of
current intensive combination chemotherapy. The study is expected to evaluate the efficacy and
®
safety of DAVANAT when administered in combination with the current standard of care in two
monthly cycles or until disease progression or toxicity. The primary objectives of the study are as
follows: (1) achieve a complete or partial response in 33% of patients; and (2) document a secondary
measurement of progression-free survival at 6 and 12 months.
Research Collaboration for DAVANAT
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In December 2007, Pro-Pharmaceuticals entered into a research collaboration with the University of
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Massachusetts Lowell (UML) to evaluate DAVANAT with chemotherapy drugs. This collaboration is
®
expected to help further DAVANAT ’s potential as a first-in-class, targeted therapeutic compound. UML
has capabilities in nanotechnology and polymer characterization, as well as a national reputation in
science, engineering, and technology.
Submission of a Drug Master File (DMF) for DAVANAT
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Pro-Pharmaceuticals is collaborating with SAFC™, the custom manufacturing services division of Sigma®
Aldrich Corp. (SIAL-NASDAQ), to submit a Drug Master File (DMF) to the FDA for DAVANAT .
®
Submission of a DMF is a significant milestone in the Company’s path to FDA approval of DAVANAT .
The DMF provides confidential, detailed information about facilities, processes, or articles used to
manufacture, process, package, and store substances intended for human consumption. In the case of
®
DAVANAT , Pro-Pharmaceuticals anticipates that its DMF can support the filing of a New Drug
®
Application (NDA) with the FDA for use of DAVANAT as an excipient to treat cancer.
SAFC™ is considered to be a leader in current Good Manufacturing Practices (cGMP), process
development, and analytical methods development for small, organic, active pharmaceutical ingredients
(APIs). It is partnered with Pro-Pharmaceuticals in order to provide support for three batches of
®
DAVANAT , while also working to facilitate an efficient submission process for the product candidate.
Additional Carbohydrate-Based Cancer Product Formulations
®
In addition to DAVANAT , Pro-Pharmaceuticals is testing a library of products—carbohydrate derivatives
of marketed chemotherapeutics and biologics, including doxorubicin, irinotecan, oxaliplatin, cisplatin,
paclitaxel, and bevacizumab—in a series of pre-clinical efficacy studies on cancer-carrying animals and
®
toxicity studies on healthy animals. Pre-clinical data indicates that DAVANAT exhibits broad-spectrum
enhancement of anti-tumor drugs in human colon and breast tumors. Research is being conducted at
facilities in the U.S., Russia, England, and Italy.
CRYSTAL RESEARCH ASSOCIATES, LLC
QUARTERLY UPDATE
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P H A R M A C E U T I C A L S,
I N C.
In October 2007, the Company reported that its novel carbohydrate compounds were able to significantly
reduce collagen expression and reverse fibrosis in animal models. Previous in vitro data had indicated
that the compounds could reverse fibrosis markers, but in a proof-of-concept animal study, the
compounds also clearly reduced collagen expression and reversed liver fibrosis. Collagen production is
central to the fibrotic process, affecting many organs and leading to scar tissue. Pro-Pharmaceuticals’
primary carbohydrate compound in pre-clinical development as a treatment for fibrosis is called PRO-GR
300, which has specifically shown to both arrest and reverse disease progression. These results, as
demonstrated through a proof-of-concept rat fibrosis model, are illustrated in Figure 2. Additional
experiments are planned to further validate the Company’s initial findings and to expand the use of these
carbohydrate compounds in other fibrotic diseases.
Figure 2
Pro-Pharmaceuticals, Inc.
RAT FIBROSIS MODEL: PROOF OF CONCEPT
Liver fibrosis, induced by injection of chemical
toxin for eight weeks
Reversal of fibrosis with PRO-GR 300 after four
weeks of treatment
Source: Pro-Pharmaceuticals, Inc.
Fibrosis
Fibrosis is the reason patients develop liver failure and require transplants. According to the Liver Fibrosis
Society, more than 25 million U.S. citizens have liver or biliary disease. Of the 4 million-plus individuals
with the hepatitis C virus in the U.S., many will likely develop severe fibrosis and liver failure. Worldwide,
over 170 million people are infected with chronic hepatitis C (Source: the World Health Organization
[WHO]). There is no treatment available for fibrosis, which Pro-Pharmaceuticals estimates could
represent a global market of over $4 billion.
Potential Milestones
During 2008, Pro-Pharmaceuticals seeks to complete the following milestones:
®
Complete the NDA submission to the FDA for the marketing and sales of DAVANAT to be used as
an adjuvant therapy (functional excipient) for the treatment of cancer;
Report additional results from the ongoing Phase ll biliary and colorectal cancer trials;
Scale-up production of DAVANAT ;
Continue pre-clinical development of the Company’s fibrosis compound for IND submission;
Actively pursue corporate partnerships; and
Continue to complete research agreements.
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Regarding the NDA submission for DAVANAT , Pro-Pharmaceuticals has already begun submitting data
®
to file for DAVANAT as a functional excipient to treat cancer. In August 2007, the Company retained
Camargo Pharmaceutical Services, LLC, a strategic outsourcing partner that aims to provide efficient,
cost-effective, and comprehensive services for regulatory affairs as well as drug and clinical program
development. Camargo is assisting the Company with its DMF filing.
CRYSTAL RESEARCH ASSOCIATES, LLC
QUARTERLY UPDATE
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P H A R M A C E U T I C A L S,
I N C.
Headquarters and Employees
Located in Newton, Massachusetts, the Company has seven full-time employees and retains part-time
contractors and consultants on an as-needed basis. At present, there are two part-time contract
employees, one who provides financial management services and one who serves as medical director.
Pro-Pharmaceuticals appointed Theodore D. Zucconi, Ph.D., as the Company’s new president and as a
director on the Board of Directors. Former president, David Platt, Ph.D., continues to serve as chief
executive officer (CEO) and chairman of the Board of Directors. In addition, Anthony D. Squeglia, MBA,
was named chief financial officer (CFO) and Steven Schubert, MBA, was named vice president, finance
on a consulting basis.
CRYSTAL RESEARCH ASSOCIATES, LLC
QUARTERLY UPDATE
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P R O
P H A R M A C E U T I C A L S,
I N C.
Key Points to Consider
Pro-Pharmaceuticals, Inc. is a development-stage pharmaceutical company initially focused on
extending survival of cancer patients and improving their quality of life. The Company employs
proprietary, non-toxic targeted carbohydrate compounds that bind to specific binding sites, known as
lectins, on the surface of cancer cells.
Four of the Company’s Phase II colorectal cancer patients have had stable disease up to seven
months, and five Phase II biliary cancer patients have had stable disease up to six months. Moreover,
43% of evaluable patients in the colorectal cancer trial have tumor shrinkage of over 30%, with no
patient experiencing hematological or gastrointestinal severe adverse events of Grade 3 or higher.
In March 2008, Pro-Pharmaceuticals reported that of the 20 patients who completed the Company’s
Phase II trial in end-stage metastatic colorectal cancer in 2006, three patients survived for more than
a year, two patients lived for more than two years, and one patient was still alive. Data indicated that
®
DAVANAT extended median survival for end-stage colorectal cancer patients by 6.7 months (29
weeks) and extended median progression-free survival to 8.4 weeks.
Pro-Pharmaceuticals began New Drug Application (NDA) filings for DAVANAT as a functional
excipient to treat cancer. The Company expects to complete its NDA filing in 2008, and has entered
into a collaboration with SAFC™, a division of Sigma-Aldrich, to submit a Drug Master File (DMF) for
®
DAVANAT that is anticipated to support the filing.
The U.S. Food and Drug Administration (FDA) has granted compassionate use Investigational New
®
Drug (IND) applications for DAVANAT to treat patients with unresectable cholangiocarcinoma that
®
had progressed after initial chemotherapy and for DAVANAT in combination with a chemotherapy
and a biologic to treat a breast cancer patient.
Pro-Pharmaceuticals is developing carbohydrate polymers as new chemical entities (NCEs).
The Company’s PRO-GR 300, a novel carbohydrate compound, has shown to both arrest and
reverse disease progression in a proof-of-concept rat fibrosis model. The Company reported data in
October 2007 that its pre-clinical carbohydrate compounds significantly reduced collagen expression
as well as reversed liver fibrosis.
Pro-Pharmaceuticals’ business strategy is to pursue license agreements with established
pharmaceutical companies, which could provide broad infrastructure and commercialization
capabilities to further the development of proprietary technologies. The Company also contracts with
independent organizations to assist in the pre-clinical and clinical development of its products.
Pro-Pharmaceuticals could become eligible for FDA Fast Track or Orphan Drug designation, which
could expedite the development of its investigational drugs.
The Company has been granted five U.S. patents and has patent applications pending. ProPharmaceuticals also has international foreign patents and pending foreign patent applications.
Pro-Pharmaceuticals had cash and cash equivalents of approximately $1.3 million at December 31,
2007, and raised additional net proceeds of $3.4 million in a registered direct offering in February
2008. The Company believes that this cash position is sufficient to fund operations into October 2008.
On September 14, 2007, the American Stock Exchange (AMEX) notified Pro-Pharmaceuticals that it
had accepted the Company’s plan of compliance and granted an extension until October 13, 2008, to
regain compliance with continued listing standards. This follows a notice from June 22, 2007, that
Pro-Pharmaceuticals was below certain of the AMEX’s continued listing standards.
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CRYSTAL RESEARCH ASSOCIATES, LLC
QUARTERLY UPDATE
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P R O
P H A R M A C E U T I C A L S,
I N C.
Risks
Some of the information in this Quarterly Update relates to future events or future business and financial
performance. Such statements can only be predictions and the actual events or results may differ from
those discussed due to, among other things, the risks described in Pro-Pharmaceuticals’ reports on
Forms 10-K, 10-Q, 8-K, and other forms filed from time to time. The content of this update with respect to
Pro-Pharmaceuticals has been compiled primarily from information available to the public released by the
Company through news releases and SEC filings. Pro-Pharmaceuticals is solely responsible for the
accuracy of that information. Information as to other companies has been prepared from publicly available
information and has not been independently verified by Pro-Pharmaceuticals. Certain summaries of
scientific activities and outcomes have been condensed to aid the reader in gaining a general
understanding. For more complete information about Pro-Pharmaceuticals, please refer to the Company’s
website at www.pro-pharmaceuticals.com. Additionally, please refer to Crystal Research Associates’ base
®
®
report, the Executive Informational Overview (EIO ) dated July 23, 2007, and located on Crystal
Research Associates’ website at www.crystalra.com for more comprehensive details of ProPharmaceuticals’ risk factors.
CRYSTAL RESEARCH ASSOCIATES, LLC
QUARTERLY UPDATE
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P H A R M A C E U T I C A L S,
I N C.
Intentionally Blank.
CRYSTAL RESEARCH ASSOCIATES, LLC
QUARTERLY UPDATE
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P H A R M A C E U T I C A L S,
I N C.
Jeffrey J. Kraws or Karen B. Goldfarb
Phone: (609) 306-2274
Fax: (609) 395-9339
Email: [email protected]
Web: www.crystalra.com
Legal Notes and Disclosures: This Quarterly Update has been prepared by Pro-Pharmaceuticals, Inc. (“ProPharmaceuticals” or “the Company”) with the assistance of Crystal Research Associates, LLC (“CRA”) based
upon information provided by the Company. CRA has not independently verified such information. In addition,
CRA has been compensated by the Company in cash of fifty-one thousand five hundred dollars for its services in
®
®
creating the original EIO , an updated EIO , follow-on Quarterly Updates, and for printing costs.
Some of the information in this update relates to future events or future business and financial performance. Such
statements constitute forward-looking information within the meaning of the Private Securities Litigation Act of
1995. Such statements can be only predictions and the actual events or results may differ from those discussed
due to, among other things, the risks described in Pro-Pharmaceuticals’ reports on Forms 10-K, 10-Q, 8-K, and
other forms filed from time to time. The content of this report with respect to Pro-Pharmaceuticals has been
compiled primarily from information available to the public released by Pro-Pharmaceuticals through news
releases and SEC filings. The Company is solely responsible for the accuracy of that information. Information as
to other companies has been prepared from publicly available information and has not been independently
verified by Pro-Pharmaceuticals or CRA. Certain summaries of scientific activities and outcomes have been
condensed to aid the reader in gaining a general understanding. For more complete information about ProPharmaceuticals, the reader is directed to the Company’s website, www.pro-pharmaceuticals.com. This report is
published solely for information purposes and is not to be construed as an offer to sell or the solicitation of an
offer to buy any security in any state. Past performance does not guarantee future performance. Free additional
information about Pro-Pharmaceuticals and its public filings, as well as free copies of this report can be obtained
in either a paper or electronic format by calling (617) 559-0033.
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QUARTERLY UPDATE
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