Hofseth Biocare ASA: SPIN-OFF OF PROSTATE CANCER CO-TREATMENT PROJECT
Hofseth Biocare ASA (“HBC” or the “Company”) today announces the decision to transfer its prostate cancer co-treatment project (the “Project”) to a new US entity to be called HBC Immunology Inc. (“HBCI”). HBCI will develop a co-therapeutic treatment for prostate cancer as well as other potential indications related to abnormal cellular iron regulation. The transfer is subject to final agreements.
This Project is a result of HBC’s core R&D focus on the health benefits of its products and ingredients resulting from gene expression modulation mechanism of action (GEMM™)
Further discovery work at HBC has resulted in several potential pharmaceutical drug leads, as summarized in the 5th November 2021 stock exchange notice (New potential pharmaceutical drug lead by HBC) and the Project was derived from peptides contained in ProGo® (also known as SPH – Soluble Protein Hydrolysate). From these peptides two lead peptide candidates for preclinical trial work have been identified and these lead peptides have been modified to enhance their overall profile.
HBC will transfer a provisional patent and a patent application to HBCI and will provide a license to use certain of HBC’s intellectual property in the oncology space. In exchange for these contributions, HBC will receive 75 % of the initial equity shares in HBCI.
Dr. Bomi Framroze, who is the Chief Scientific Officer at HBC, will through his company, GPH Biotech LLC., also contribute relevant IP to HBCI for the Project and will in exchange for this IP own 25 % of the initial equity shares in HBCI. HBC and HBCI will also enter an agreement under which HBCI will lease certain personnel that are considered key for the positive development of the Project at cost. HBCI will grant options to certain personnel of HBC that will contribute to the Project as well establish a stock option program for future employees, directors and consultants that shall vest over a four-year period.
Following the initial share issuances and equity grants, it is contemplated that HBCI shall seek to consummate financing from external investors on terms mutually agreeable to HBC and GPH Biotech LLC. HBC expects to continue to hold more than 50 % of the equity in HBCI on a fully diluted basis following the first two rounds of external financing.
While HBC expects to continue to own a majority of the issued shares and financial interest in HBCI, corresponding to its ownership share, HBCI will not be consolidated with HBC for accounting purposes.
HBC has consulted external advisors, GPH Biotech LLC. and other key stakeholders and concluded on an initial value of HBCI including transferred IP of MUSD 12.5 based on a risk-adjusted royalty method. HBC has booked approx. MNOK 1.8 in costs on the patent and patent application as of 31 December 2022. This means that the spin-off of the Project to HBCI will generate approximately 21 MNOK in financial gain for HBC in Q2 2023.
The current status of the Project is that HBC has successfully completed the invitro analysis of the newly identified individual peptides that modulate iron metabolism in prostate cancer cells, in combination with standard of care hormone therapy (bicalutamide and enzalutamide) to enhance the kill rate of prostate cancer cell lines representing different stages of prostate cancer. The initial results were published in Marine Drugs (28 March 2022) and the completed in-vitro work was presented at Pharma R&D, February 2023.
HBC considers that the spin out of the Project into a separate entity in the US increases the likelihood of succeeding with developing commercial applications of the Project. HBCI’s close proximity to Stanford University and the Bay Area, California, should facilitate access to competent personnel and R&D resources and future funding.
Jon Olav Ødegård, HBC CEO, said: “I am delighted to see that after years of hard discovery science work from Professor Bomi Framroze and his team, we are now starting a new journey to demonstrate the possibility of finding novel pharmaceutical drug leads for large areas of unmet health needs in Oncology. At HBC, we believe the sustainability story is second to none. Particularly if we are able to show we can take fresh Atlantic salmon by-products, that some would regard as waste, and turn them in new drugs. It has been an ambitious goal, but we now see extraordinary potential from the early published data on the co-therapeutic efficacy of our peptides taken with existing “best-standard-of-care” (BSC) in early and late-stage Prostate Cancer. The idea is for this peptide to improve quality of life, extend life and indeed help reduce overall mortality in Prostate Cancer patients.”
Dr. Bomi Framroze, HBC CSO, said: “Cancer iron metabolism is becoming increasingly recognised as an important driver of tumour growth and spread and a means by which cancers escape from the effects of treatment. The modulation of FTH1 with our peptide lead structures holds an exciting potential to enhance the effectiveness of cancer therapy to improve the health and wellness of cancer patients.”
For further information, please contact:
James Berger, CCO at HBC
Phone: +41 79 950 1034
E-mail: jb@hofsethbiocare.no
Jon Olav Ødegård, CEO at HBC
Phone: +47 936 32 966
E-mail: joo@hofsethbiocare.no
About HBC:
HBC is a Norwegian consumer and pet health ingredient supplier and an incubator for new pharmaceutical drug leads. Research is ongoing to identify the individual elements within its ingredients that modulate inflammation and the immune response with pre-clinical studies ongoing in multiple clinics and university research labs. Lead clinical and pre-clinical candidates are focused on developing an oral treatment for inflammatory disease driven by eosinophils (a type of white blood cell). Clinical trial work with the oil is ongoing to ameliorate lung inflammation in eosinophilic asthma and COPD (“smokers lung”) as well as in COVID. Other leads are focused on the protection of the Gastro-Intestinal (GI) system against inflammation (including ulcerative colitis and the orphan condition necrotising enterocolitis) and using a special formula of soluble protein hydrolysate (SPH also known as ProGo®) as a Medical Food to help treat IBD, and for Iron Deficiency Anemia.
The company is founded on the core values of sustainability, optimal utilization of natural resources and full traceability. Through an innovative hydrolysis technology, HBC can preserve the quality of the lipids, proteins and calcium from fresh salmon off-cuts. HBC’s headquarters are in Ålesund, Norway with branches in Oslo, London, Zürich, Ningbo, New Jersey and Palo Alto.
HBC is listed on Oslo Børs with ticker “HBC”. More information about HBC at hofsethbiocare.com
This information is considered to be inside information pursuant to the EU Market Abuse Regulation (MAR) and is subject to the disclosure requirements pursuant to MAR article 17 and section 5-12 of the Norwegian Securities Trading Act.
