PLANTATION, Fla., May 25 /PRNewswire-FirstCall/ -- The following is a
letter from the President and CEO of Viragen, Inc. (Amex: VRA). In addition
to these comments, stockholders and potential investors are referred to the
Company's SEC filings, including Form 10-K and Form 10-Q (Annual and Quarterly
Reports); press releases; Website; and other publicly disseminated information
which is available upon request by contacting the Company.
Dear Stockholder,
Nearing the completion of my first 60 days as President and CEO, I would
like to report to you on some progress we are making at Viragen.
I believe there is an existing foundation here that is ripe to create
immediate and long-term value for our stockholders. While there are
significant challenges which need to be navigated to be successful, we are
making changes now that will direct us toward that success. I am establishing
a renewed focus to maximize the value of our assets for our stockholders.
Because some of our growth strategies are in the process of being
negotiated, I cannot discuss all of my plans in this letter. However, I would
like to update you on certain activities, including some new initiatives
designed to enhance and complement those which have been ongoing and
progressing. There are two things that we must do, these being: 1) increase
revenues and 2) continue to control expenses.
Multiferon(TM)
Manufacturing -- We have previously announced the ongoing process of
modernizing our production capabilities for the manufacturing of
Multiferon(TM) in Sweden. I am pleased to report that we are on schedule to
complete the validation of the new construction and subsequent inspection by
Swedish authorities before the end of this year. I would like to congratulate
our team for their excellent work on this important project.
I would also like to stress the importance of state-of-the-art and fully
compliant manufacturing facilities, equipment and processes for the production
of Multiferon. We can be very proud of our Ersboda and Umea sites.
Continuous improvement in our manufacturing systems is one of the best
possible uses of our capital.
Marketing -- There is no better short-term means to build value in Viragen
than to increase the sales of Multiferon. This is a great product but it has
been under the radar screen of high prescribers in territories where it is
approved. It requires new marketing initiatives to meet our expectations. I
am pleased to report that we have put into effect several changes in order to
achieve our new objective of making Multiferon the world's most prescribed
natural human alpha interferon.
First, our analysis of the current market situation in Sweden indicates
this is the opportune time to boost our sales activity. We recently announced
a new advertising campaign coupled with a sales strategy that we are confident
will result in sales increases over the coming months. We will ensure our
return on this reasonably small investment is accounted for in a very short
period of time. Sweden is the only territory, at the current time, where
Viragen or one of its subsidiaries is in direct control of selling Multiferon.
We must take advantage of this unique opportunity now.
Second, we are conducting a critical review, or "rationalization", of all
our international distribution agreements. As part of this review, we will be
making determinations as to whether to continue in certain territories or
whether to halt our activities. As our marketing and regulatory resources are
limited, we cannot afford to maintain product registrations in territories
unless the financial return justifies the expense. Our approach will be to
focus our attention on higher value opportunities.
Third, we are evaluating packaging alternatives for Multiferon in order to
improve our competitiveness. Our glass ampoule presentation represents a
classic approach to biological product manufacturing. However, most of our
competitors use pre-filled syringes, adding to end-user convenience. While
any such changes will require approvals by local authorities, this is a
necessary step in managing the expectations of physicians, nurses and patients
as well as positioning Multiferon for future growth.
Fourth, we are currently reviewing the regulatory alternatives for our
clinical assessment of Multiferon in malignant melanoma. We are in the
process of additional data collection and we expect to provide updates to you
later this year on this important part of our strategy.
Finally, there are discussions and negotiations currently in progress on
License and Supply Agreements for Multiferon in territories where we currently
do not have a market presence, and where significant opportunities exist.
These include selected areas of Asia, South America, Europe and North America.
We are changing our strategy on these agreements, including our selection of
collaborators. We are not going to be satisfied with merely signing
agreements. Performance and growth are our priority expectations.
Based upon these and other activities, I am confident that we will realize
significant improvements in revenues from Multiferon.
The U.S. Market -- With respect to the U.S. market, we have stated that,
upon closing our $20 million financing agreement, we intend to use a portion
of the proceeds to seek a market registration for Multiferon in the U.S.
While we recognize that this process will take time and money, we know there
are many different regulatory pathways available to us. We will be as
creative and innovative as possible in developing a U.S. strategy. Where
possible, we will make use of tools available to small businesses, tools
available for niche market opportunities, and potential partnerships, whereby
we may share costs of the registration processes.
If approved by Congress and the President, Project BioShield could provide
a new alternative for accelerated registration, provided our products
demonstrate utility in treating biological, chemical or radiation
contamination. Multiferon has been demonstrated to have significant anti-
viral activity in SARS in cell-based assays, and we may expect this to be
active against a variety of viruses that could be used in bio-terrorism. We
have been working on an international level to generate the necessary
scientific data in support of Multiferon just for these purposes, and this
work will continue. The critical parameter here is not just to talk about it,
but to find a way to do it, and we will.
Avian Transgenic Biomanufacturing Technology
The most obvious question is, "When will the flocks of our genetically-
engineered chickens be capable of producing therapeutic proteins faster,
cheaper and more efficiently than conventional methods?" There is no simple
answer. This is a major research project that aims to revolutionize a drug
manufacturing process. The market opportunity appears to be enormous and the
competition fierce. So, while we, with our partners, strive to meet internal
deadlines, it is important to realize that this is discovery research. It is
difficult to predict and it is not guaranteed. We are extremely encouraged by
our accomplishments to date, and we believe these are but a precursor of
achievements to come. We have some of the most outstanding people, partners
and patents in this field, and our team is working hard to prove commercial
viability. We are determined to provide our research team with the resources
necessary to deliver this important technology.
Anti-Cancer Projects
We have three promising anti-cancer candidates that are being developed in
collaboration with four separate and prestigious institutions, each recognized
leaders in fields of cancer and immunology research. The recent grant from
the Scottish Executive confirms both the credibility and innovative nature of
our anti-CD55 Antibody and provides incremental funding ($833,000 over 3
years) so that we can move forward with development. Whenever possible, we
will continue to utilize creative financing efforts for all of our projects.
The industry is quite crowded with product candidates for the treatment of
cancers. It is important that we develop sound scientific data on our
candidates on as timely a basis as practical so that we can either move
forward with development or stop spending money on them if they do not work.
In order to realize value from these projects, we have to invest in them.
Financing
We are currently seeking stockholder approval to complete a $20 million
financing agreement and to effect a 1-for-10 reverse stock split. Our Board
believes these actions are necessary to enable the Company to meet its goals
and build stockholder value. The intent is to recapitalize the Company in
order to make our capital structure more attractive to institutional investors
and professional fund managers. Adding these types of investors to our
stockholder mix can help to reduce the volatility that we experience now.
Coupled with improving business conditions, such as increasing sales, we
expect this new financing to provide sufficient funding to allow us to move
forward on our projects and ultimately build value. I believe the financing
and reverse split are necessary to adequately fund our operations and to
advance our development projects and I fully support these actions.
The Future
I am focused on building the business. To my knowledge, there are no
sales or marketing initiatives that can be guaranteed to generate immediate
revenues, short of introducing a completely new product. It will take a
number of months for us to realize significant increases in sales revenues,
but I am confident it will happen.
In the past two months, I have had the opportunity to meet only a few of
our stockholders. Some of you have been holding shares for many years and
some of you are new investors, but all of you are keenly interested in seeing
your investment grow. In the coming months, I hope to be able to announce a
number of events that could represent major advancements in our business.
As part of our communications, I intend to ensure that we maintain an
active investor information program to report to you, the stockholder, our
progress -- good or bad -- factually, accurately and as timely as possible,
within the laws that govern our business.
Approaching my first 60 days as the President and CEO of Viragen, I am
excited about the prospects for our Company. I also believe that tangible
business accomplishments will speak louder than any predictions, and that is
what you can expect from Viragen management.
Sincerely yours,
Charles A. Rice
President & CEO
About Viragen, Inc.:
Viragen is a biotechnology company specializing in the research,
development and commercialization of natural and recombinant protein-based
drugs designed to treat a broad range of viral and malignant diseases. These
protein-based drugs include natural human alpha interferon, monoclonal
antibodies and a peptide drug. Viragen's strategy also includes the
development of Avian Transgenic Technology as a biomanufacturing platform for
the large-scale, cost-effective production of therapeutic proteins.
Viragen is publicly traded on the American Stock Exchange (VRA).
Viragen's majority owned subsidiary, Viragen International, Inc., is publicly
traded on the Over-The-Counter Bulletin Board (VGNI). Viragen's key partners
and licensors include: Roslin Institute, Memorial Sloan-Kettering Cancer
Center, Cancer Research UK, University of Nottingham (U.K.), University of
Miami, America's Blood Centers and the German Red Cross.
For more information, please visit: http://www.Viragen.com
Viragen, Inc. Corporate Contact:
Douglas Calder, Director of Communications
Phone: (954) 233-8746; Fax: (954) 233-1414; E-mail: dcalder@viragen.com
The foregoing President's Letter contains forward-looking statements that
can be identified by such terminology such as "expect," "potential,"
"suggests," "may," "will," "should," "could" or similar expressions. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results to be materially different
from any future results, performance or achievements expressed or implied by
such statements. In particular, management's expectations regarding future
research, development and/or commercial results could be affected by, among
other things, uncertainties relating to clinical trials and product
development; availability of future financing; unexpected regulatory delays or
government regulation generally; the Company's ability to obtain or maintain
patent and other proprietary intellectual property protection; and competition
in general. Forward-looking statements speak only as to the date they are
made. The Company does not undertake to update forward-looking statements to
reflect circumstances or events that occur after the date the forward-looking
statements are made.
SOURCE Viragen, Inc.
 back to top
Related links:
http://www.viragen.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20010426/HSTH018LOGO-b
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Douglas Calder, Director of Communications,
Viragen, Inc., +1-954-233-8746, or fax, +1-954-233-1414, or
e-mail, dcalder@viragen.com
|
