IBIO, INC. (IBIO) SPO
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|Company Name||IBIO, INC.|
|Company Address||600 MADISON AVENUE, SUITE 1601
NEW YORK, NY 10022-1737
|Company Phone||302 355-0650|
|CEO||Robert B. Kay|
|Employees (as of 9/15/2017)||43|
|State of Inc||DE|
|Fiscal Year End||6/30|
|Shares Over Alloted||0|
|Shareholder Shares Offered||--|
|Lockup Period (days)||180|
|Quiet Period Expiration||1/9/2018|
We currently intend to use the net proceeds of this offering for working capital and general corporate purposes. We may invest a portion of the proceeds in iBio CDMO to be used by iBio CDMO for its working capital and general corporate purposes. As of the date of this prospectus supplement and except as explicitly set forth herein, we cannot specify with certainty all of the particular uses of the proceeds from this offering. Accordingly, we will retain broad discretion over the use of such proceeds. Pending use of the net proceeds of this offering as described above, we intend to invest the net proceeds in short-term interest-bearing investment grade instruments.
The manufacture of biologics and the methods of such manufacture are intensely competitive fields. Each of these fields is characterized by extensive research efforts, which result in rapid technological progress that can render existing technologies obsolete or economically noncompetitive. If our competitors succeed in developing more effective technologies or render our technologies obsolete or noncompetitive, our business will suffer. Many universities, public agencies and established pharmaceutical, biotechnology, and other life sciences companies with substantially greater resources than we have are developing and using technologies and are actively engaging in the development of products similar to or competitive with our technologies and products. To remain competitive, we must continue to invest in new technologies and improve existing technologies. To make such renewing investment we will need to obtain additional financing. If we are unable to secure such financing, we will not have sufficient resources to continue such investment. Our competitors may devise methods and processes for protein expression that are faster, more efficient or less costly than that which can be achieved using iBioLaunch. There has been and continues to be substantial academic and commercial research effort devoted to the development of such methods and processes. If successful competitive methods are developed, it would undermine the commercial basis for iBioLaunch and iBioModulator.
iBio is a biotechnology company focused on using our proprietary technologies and production facilities to provide product development and manufacturing services to clients, collaborators and third-party customers as well as developing and commercializing our own product candidates. Our assets
and capabilities include proprietary and transformative methods for the development, improvement, and production of biologics in hydroponically grown, transiently-transfected green plants. We harness the natural protein production capability plants use to sustain their own growth, and direct it, instead, to produce proteins for a range of applications including vaccines, biopharmaceuticals and commercial intermediates, and also to create and produce proprietary derivatives of pre-existing products with improved properties. We and our collaborators have used our technologies successfully with a diverse range of product candidates including products against fibrotic diseases, vaccines, enzyme replacements, monoclonal antibodies, and recombinant versions of marketed products that are currently derived from human blood plasma. However, we presently intend to further develop products only in certain of those categories. Our current pipeline is comprised of proprietary candidates for the treatment of a range of fibrotic diseases, including systemic scleroderma and idiopathic pulmonary fibrosis. IBIO-CFB03, based on exclusively in-licensed university patents and newer patent applications filed by iBio, is our lead therapeutic candidate being advanced for Investigational New Drug Application (“IND” development. On an ongoing basis, we evaluate product candidate opportunities originating in both academic institutions and corporate research programs, to which iBio technologies can add value, as potential opportunities for iBio. In 2003, we engaged the Fraunhofer-Gesellschaft organization through an agreement with Fraunhofer USA, Inc., acting through its Center for Molecular Biotechnology (“Fraunhofer”), in Newark, Delaware, an unincorporated unit of Fraunhofer USA, Inc. that is operated as part of an institute of the German organization, the Fraunhofer Institute for Molecular Biology and Applied Ecology, as our outsourced research and development contractor. Fraunhofer was contractually obligated to provide research and development services in the field of plant-based gene expression and protein products exclusively pursuant to agreements with us and our predecessor companies through 2014, and to use commercially reasonable efforts to enhance, improve and expand the technology for us. With the structural foundation of Fraunhofer’s exclusive obligations to us, we established a business model that we expected to enlarge and broaden the scope of applications of our platform technology and enhance the value of our retained commercial rights by leveraging certain funding received by Fraunhofer from governmental entities, NGOs and other similar organizations. Fraunhofer was obligated to use its best efforts to obtain funding from governments and NGOs for continuing development of our technology and to support iBio’s efforts to commercialize its technology. Based on the Fraunhofer commitments, our business model and plan contemplated licensing our technology to third parties and collaborating with third-party licensees, with Fraunhofer’s assistance as our research and development contractor, for product development using our proprietary technology and Fraunhofer’s pilot plant facilities in Newark, Delaware for production of pre-clinical and clinical materials required for product approvals. In 2014, however, we discovered conduct by Fraunhofer that we believed constituted breaches of our contracts, and after efforts to amicably resolve these matters ended unsuccessfully, we initiated litigation against Fraunhofer based upon such breaches. Fraunhofer also refused to conduct technology transfers in further breach of our contracts, for which we also sought relief in the lawsuit against Fraunhofer. As additional allegations of misconduct by Fraunhofer emerged, we sought, and were permitted by the Court in 2017, to amend the lawsuit to include claims of fraud, conversion of our property by Fraunhofer for its own benefit, and other state law claims. Discovery of these matters and Fraunhofer’s continued unwillingness to provide access and perform technology transfers, despite resolution efforts both within and outside the confines of the litigation, required us to eventually adopt a new business plan that was not dependent on Fraunhofer and its services, but rather would rely on our own manufacturing capabilities, together with access to and the use of other technology and other technology development capabilities independent of Fraunhofer. This new business plan is being accomplished, in part, by the acquisition of the large manufacturing facility now controlled and operated by our subsidiary, iBio CDMO LLC (“iBio CDMO” or “CDMO”) (formerly known as iBio CMO, LLC), which includes human resources, laboratories, independent technology, and development and manufacturing facilities that enable us to develop and practice new plant-made biopharmaceutical technologies and self-develop experience without depending on Fraunhofer and without continuing to rely upon the earlier technologies covered by or relating to the patents filed and issued during the period of our contracts with Fraunhofer. iBio and its contractors and collaborators have since been developing, acquiring and using new technology, instead of the Fraunhofer-derived technology that we had originally intended to use for the development and production of therapeutic proteins and vaccines and other recombinant proteins using transient gene expression in green plants. iBio has rights to novel manufacturing methods and processes developed by iBio CDMO, as well as to certain patented and unpatented technologies developed for iBio by Novici Biotech LLC, which is in the business of performing laboratory feasibility analyses of gene expression and protein purification and preparing research samples. iBio’s investment in the creation of these new inventions and novel processes is ongoing and has led to the implementation of a new business model that is not dependent on further performance of Fraunhofer’s obligations to iBio. First, our new business model is dependent on our subsidiary, iBio CDMO, which controls and operates a large-scale development and manufacturing facility. In addition to laboratory and pilot-scale operations, the iBio CDMO facility includes large-scale automated hydroponic systems capable of growing over four million plants as “in process inventory” and delivering over 300 kilograms of therapeutic protein active pharmaceutical ingredient (API) per year. The facility capacity can also be doubled by adding additional plant growth equipment in a space already available for that purpose. Second, iBio CDMO’s capabilities enable us to commercially advance select product candidates, whether through partnering with collaborators or developing iBio-select product candidates. Such collaborations with others offer us the opportunity not only to receive financial resources in return for providing services and licensing our technologies to third parties, but we also believe that successful development by third parties of iBio’s technology-enhanced product candidates will further validate our technologies, increase awareness of the advantages that can be realized by the use of our technologies and promote broader adoption of our technologies by additional third parties. We expect to develop iBio-select product candidates through investments we make in their acquisition or development. We are currently internally focused on further developing a proprietary recombinant protein product candidate, IBIO-CFB03, for the treatment of systemic scleroderma, idiopathic pulmonary fibrosis, and other fibrotic diseases. Third, our new model is based on designing and developing facilities for others based on our new technologies and our experience with the iBio CDMO facility, as well as providing technology transfer. iBio CDMO, LLC On December 16, 2015, we formed iBio CMO LLC (“iBio CMO”), a Delaware limited liability company, to develop and manufacture plant-made pharmaceuticals. Effective July 1, 2017, iBio CMO changed its name to iBio CDMO LLC (“iBio CDMO”). As of December 31, 2015, we owned 100% of iBio CDMO. On January 13, 2016, we entered into a contract manufacturing joint venture with an affiliate of Eastern Capital Limited (“Eastern”), a stockholder of the Company (the “Eastern Affiliate”), pursuant to which the Eastern Affiliate contributed $15 million in cash in return for a 30% interest in iBio CDMO. We retained a 70% interest in iBio CDMO and granted iBio CDMO a non-exclusive license to use our proprietary technologies for research purposes and an exclusive U.S. license for manufacturing purposes. We retained the exclusive right to grant product licenses to those who wish to sell or distribute products made using our technology. On February 23, 2017, the Company entered into an exchange agreement with the Eastern Affiliate, pursuant to which the Company acquired substantially all of the interest held by the Eastern Affiliate in iBio CDMO and issued to the Eastern Affiliate one share of the Company’s iBio CMO Preferred Tracking Stock, par value $0.001 per share. As a result of such transaction, the Company currently owns 99.99% of iBio CDMO. iBio CDMO’s operations take place in Bryan, Texas in a facility controlled by another affiliate of Eastern (the “Second Eastern Affiliate”) as sublandlord. The facility is a Class A life sciences building located on the campus of Texas A&M University, and is designed and equipped for plant-made manufacture of biopharmaceuticals. On January 13, 2016, iBio CDMO entered into a 34-year capital lease with the Second Eastern Affiliate for the facility. iBio’s commercial activities commenced in January 2016, with the large majority of its efforts directed towards recommissioning the facility to help meet current good manufacturing practice (cGMP) standards. iBio CDMO expects to operate on the basis of three parallel lines of business: (1) development and manufacturing of third-party products; (2) development and production of iBio’s proprietary product(s) for treatment of fibrotic diseases and/or other proprietary iBio products; and (3) commercial technology transfer services, including facility design, as needed. Proprietary iBio technologies have been used to advance development of certain products that have been commercially infeasible to develop with conventional technologies, such as Chinese hamster ovary cell systems and microbial fermentation methods. We believe iBio technologies can be used to create and operate manufacturing facilities at substantially lower capital and operating costs. These include development and manufacture of both vaccine and therapeutic product candidates. iBio CDMO is promoting commercial collaborations with third parties on the basis of these technology advantages and plans to work with customers to achieve laboratory scale technical milestones that can form the basis of longer-term manufacturing business arrangements. iBio itself is a client of iBio CDMO for further IND advancement of its proprietary products, beginning with IBIO-CFB03 for the treatment of a range of fibrotic diseases. Dependent upon the success of IND advancement, iBio will then work with iBio CDMO on the production of IBIO-CFB03 for clinical trials and, with clinical success, for commercial launch. Due to the lower capital and operating cost requirements for pharmaceutical production using technologies already developed by iBio instead of using legacy methods, corporations and governments that have not already established manufacturing capacity for biologic products are client prospects for both development and commercial technology transfer services which could enable such prospects to use autonomous manufacturing in the market being served. For example, in Brazil, iBio has been collaborating with the Oswaldo Cruz Foundation (“Fiocruz”) to develop a recombinant yellow fever vaccine based on iBio technology. iBio’s contract with Fiocruz provides for commercial technology transfer services as the product candidates enter human clinical trials. Over time, iBio expects to work closely with iBio CDMO to provide such technology transfer services for a variety of both commercial and government clients. --- We are a Delaware corporation. Our principal executive offices are located at 600 Madison Avenue, Suite 1601, New York, NY 10022, and our telephone number is (302) 355-0650. Our website address is www.ibioinc.com.
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