ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our primary mission is to develop and commercially exploit novel medical device technologies to improve the delivery of healthcare. We do not currently employ our own manufacturing or distribution channels but rather rely on relationships with sub-contractors and/or partner companies. We develop technology protected by strong intellectual property targeted at specific markets within the medical technology sector.
During the three-month period ended November 30, 2007, we have accomplished the following:
· On October 5, we closed a transaction to sell a subset of our intellectual property portfolio to Medtronic for $11 million. The portion that was sold was limited to technologies covering MRI safety of implantable devices such as pacemakers and neurostimulators. We received $500,000 upon execution on August 6, $500,000 on September 6 and the balance of the $11 million was paid upon closing on October 5. Under this agreement, we maintain our license with Boston Scientific, including the $250,000 annual minimum payments, as well as any royalties for vascular implants such as stents, as well as MRI visible devices such as catheters and guidewires.
· We have continued collaboration with Myotech, LLC on development of the Myotech Circulatory Support System (CSS), a life-saving device that provides benefits and competitive advantages not possible with other circulatory support devices. In the past, first generation prototype versions of this technology (Direct Mechanical Ventricular Actuation) have saved human lives and hold tremendous promise of the treatment of acute heart failure. On October 5, 2007, we announced a new agreement with Myotech putting Biophan in control of Myotech, increasing our ownership to 68 percent, from 44 percent prior to the deal, in exchange for $1.2 million in funding. Upon achieving certain milestones, Biophan will commit an additional $2 million in funding in exchange for additional equity.
· In addition to the sale of intellectual property rights to Medtronic, we recognized $159,706 in revenue from licensing, grants, development payments, MRI testing, and consulting fees.
· Our subsidiary, Biophan Europe, has continued development of an MRI image compatible stent, capable of being imaged with MRI to detect the presence of restenosis (blood vessel narrowing) and blood clots after implantation. Biophan Europe is also developing an MRI visible heart valve, including the ability to place the valve under MRI guidance, which provides significant advantages over existing imaging procedures. Our technologies to enable stent and heart valve visibility are licensed exclusively to Boston Scientific (NYSE:BSX). Biophan Europe is also continuing development of an MRI image compatible vena cava filter, which allows MR imaging of blood clots that may be present in the filter to help ensure the safe removal of the device, in addition to an occluder device that can also be imaged and implanted under MRI guidance to treat conditions such as PFO (patent foramen ovale) and atrial septal defects.
· We have continued working under a Cooperative Research and Development Agreement (CRADA) with the FDA's Office of Science and Engineering Laboratories (OSEL) to research and define methods for measuring MRI safety of medical implants by examining the leads of cardiac rhythm management and neurostimulation devices.
We have determined that the technology that we control which is the most proven and most likely to produce revenues within the near term is the Myotech CSS. This technology is our primary areas of focus. Work on MRI visibility is centered in Europe in our Biophan Europe subsidiary.
Other programs, such as the biothermal power supply that we have been developing with NASA, will take longer to develop, and we have decided to fund these projects through either government grants, strategic partners, or other structures that do not divert focus and resources from our short-term goals of capitalizing on our core business.
The work done to date at NASA on the biothermal power supply has indicated that it may require an additional 18 months to determine if we can develop a significant improvement in performance of thermoelectric materials over the current state of the art adequate to generate power from the available heat in the human body. We have secured one SBIR Phase 1 grant from the Department of Homeland Security, and another from the Department of Energy, for the development of the biothermal power supply, and we are pursuing additional grant and matching fund opportunities with other Federal agencies.
As of August 31, 2007, we were in default of our obligations to make payments of principal, interest and liquidated damages to holders of our Senior Secured Convertible Notes. However, on October 3, 2007, we entered into Amendment No. 1 to the Securities Purchase Agreement, Senior Secured Convertible Notes, Warrants and Security Agreement with the independent private investors. Pursuant to the Amendment and related agreements, the aforementioned defaults were cured. In addition, the investors released certain intellectual property for the Security Agreement, allowing the Company to transfer and sell certain intellectual property to Medtronic, Inc. Further, in the Amendment, we agreed to certain spending covenants in connection with the proceeds we received from the sale of the intellectual property under the Intellectual Property Assignment Agreement dated as of August 6, 2007 by and between Biophan and Medtronic.
On October 5, 2007, we closed the transaction contemplated by the Intellectual Property Assignment Agreement, sold the foregoing intellectual property to Medtronic and received an aggregate of $11,000,000 as the sale price.
At November 30, 2007, we have a cash balance $8,116,791and a working capital position of $4,060, 637.
...The complete letter gives greater detail on the strategic positioning of the company and the milestones management has set by which shareholders can gauge Biophan?s progress during the year. The letter can be viewed in its entirety at the Biophan website at www.biophan.com under ?Items of Interest.?
As we begin a new year, let me take the opportunity to review the important steps we have taken during the latter part of 2007 to position our company to meet critical challenges and to take advantage of significant opportunities, particularly for the treatment of acute heart failure.
More importantly, I want to provide a roadmap for our investors to understand the strategic direction we have charted for Biophan and to gage our progress as we reach some critical milestones for the company in the coming year.
Since I was named CEO in September, we have taken a number of initiatives to strengthen the focus and financials of Biophan, and allow the company to pursue a clear and consistent direction. Central to that direction, we completed the sale of a portion of our patents to Medtronic for $11 million, which brought much needed capital into the Company.
We now have the opportunity to develop, with an eye toward commercializing, a number of technologies covered by Biophan's existing 45 issued patents, as well as numerous pending patent applications. In addition, Biophan has become the majority shareholder in Myotech, which is developing the Myotech Circulatory Support System (CSS) - a novel medical device designed to quickly restore full cardiac output to an arrested heart.
Biophan is seeking to develop its emerging technologies through grants and strategic partnerships. As an example, the biothermal power supply is being co-developed with the NASA Ames Research Center and has already received two grants totaling $200,000 to support projects for the Departments of Energy and Homeland Security. In addition, the company is working on developing some of its other early stage technologies, such as pulsewidth modulation for tissue stimulation, which can be used to excite nerve tissues in a manner that is far more energy efficient than any existing stimulation device. This technology may have the capability to take the efficiency of pacemakers, ICDs, and neurostimulators to a new level, and we are seeking grant funding to support further development.
In terms of the Myotech CSS, it is important to fully understand the scope of this unmet medical need and the large market opportunity that is crying for a solution.
Over 260,000 patients suffer in-hospital cardiac arrest every year, and about 80% of those patients do not survive. The Myotech CSS is capable of returning full cardiac output to an arrested heart in under three minutes, doing so without any contact with circulating blood. We believe this approach is superior and will dramatically improve outcomes for this patient population.
In addition to prioritizing our product development pipeline, Biophan also put in place a disciplined spending plan for the company. The road toward regulatory approval and product introduction is a marathon, not a sprint. And at the early stages of the race, Biophan must be prudent yet inventive with its resources.
On November 1, 2007, we named a number of seasoned professionals to the Myotech Board of Directors, whose experience in and understanding of our industry can provide solid counsel and direction as we move down the regulatory path toward approval.
On December 18th, James Goldberg, a respected executive with vast experience in all areas of running early- and mid-stage healthcare companies, agreed to become President of Myotech. His experience and contacts within the industry will provide steady leadership.
In a few short months we have sharpened our focus, strengthened our financial position, and named a solid leader and a strong Board of Directors for Myotech. Our goal is to begin clinical trials in Europe for the Myotech CSS in 2009.
What can our shareholders look for in 2008 to indicate we are making solid progress and gaining traction in reaching that goal?
We will continue to build an operational team at Myotech with the requisite experience and expertise to navigate the various clinical and regulatory hurdles. We should be making a number of organizational announcements in the first half of 2008.
This team will undertake a number of important steps in moving toward our goal to initiate clinical trials in 2009. We will be laying out a detailed plan and milestones, including timelines for further animal testing for the Myotech CSS, initial meetings with the FDA regarding the regulatory pathway for the device, plans for engaging with development partners to finalize and enhance the design of the Myotech CSS, and ultimately for filing for regulatory approval.
Our 2008 progress can be measured as we grow and strengthen our operational team, prudently manage our costs-including funding our emerging technologies through grants and partnerships-and most importantly, reach critical milestones in the development of the Myotech CSS.
Strengthened by a focused strategic direction and more solid financial footing, Biophan has a renewed purpose and vitality. 2008 should prove to be an eventful and productive year for our company.
John Lanzafame Chief Executive Officer
OTC:BIPH www.biophan.com Biophan Technologies, Inc. 15 Schoen Place Pittsford, NY 14534 Tel +1.585.267.4800 Fax +1.585.267.4830
harry - und ich "liebe" diese Firmengeschichte immer noch, weil so seit Stan Yakatan (ca. Ende 2005 in kontakt mit biophan) spielbar wie ein gutes Schachspiel (mancher lieber wie Texas hold`em) - hier am 04.11.2007 franzjoseph
"Stan Yakatan ? seit 7.12.2006 bei biophan ? für mich eindeutig im letzten Jahr der Mann für Klarheit im Unternehmen (und vielleicht auch eine treibende karft für die Veränderungen), durch Klarheit und Realitätssinn bei den Zahlen ? und vielleicht noch mehr (ein wenig hatte ich ihn eigentlich an einer noch zentraleren Stelle gesehen, aber vielleicht, hat er viel zu tun und vielleicht ist Dr. Jaentsch nicht nur ein Fachmann, sondern auch eine gute Integrationsfigur in den letzten Monaten ? ist aber auch nicht mehr der Jüngste??)
heute folgende Meldung: Stan Yakatan Chairman of the board
jetzt würde mich langsam auch mal interessieren, was es so für Gedanken zum Brief von lanzafame so in den boards gibt - der Inhalt war doch so unverständlich nicht, aber warum äußert sich keiner - wollen alle pokern??
was du an der Firmengeschichte so gut findest. Falls du das noch nicht bemerkt hast, die Firmengeschichte fängt nicht vor einem Jahr an, das sind ein paar Jahre mehr, und jetzt leg mal los, so ab 2003 vielleicht?
also gut harrys, ich probiers mal - es war einmal der user harrys39, der schrieb am 12.06.2006
".... man was für eine Scheißaktie. Ich verabschiede mich e n d g ü l t i g von dem Laden."
dann erschien hier am 04.01.2007 franzjoseph - und plötzlich war auch harrys wieder bei ariva und biophan - und war es aus neu erwachter Liebe zu biophan? oder warum hatten wir das Glück bei ariva harrys Gedanken auschließlich immer mal wieder bei biophan lauschen zu dürfen - vielleicht eine Haß l i e b e ?? man weiß es nicht
ansonsten erwarte im Augenblick keine ernsthaften Analysen und Gedanken von mir - das erst wieder, wenn ich ernsthaft irgendwelche Probleme sehe - jetzt werde ich mal versuchen ein wenig Spaß zu haben!!
Scheißaktie oder nicht, warum soll ich nicht weiter eine Aktie beobachten in der ich mal investiert war, aber du hast es immer noch nicht geschafft weiter als 1 Jahr zurück das Gute darzustellen. Kann es sein, daß es daran liegt das es nichts gibt?
"ein bisschen Spaß muss sein ... tra la tra la .."
wenn ich selbst das ganze nicht (auch) ein wenig mehr oder weniger lustig finden würde, würde ich hier überhaupt nicht mitmachen!! - leider ist es mir nicht gegeben (wie sicherlich auch harrys) die ernsten Fragen dieser Foren zu stellen, wie z.B. - wie ist rt?, gibt es news?
Danke harrys für deine gelegentlichen Anregungen - ich hab einfach nur keine Lust öffentlich dazu zu schreiben!!
: Die Luftnummer erreicht neue Allzeittiefs
und Oberpusher franzjoseph hatte wohl seine Aufgabe mit dem Sprung um 100% im Januar erledigt. Ist schon auffallend, daß von ihm mit dem erreichen des Tops im kurzen Hiph Funkstille herrscht. So was gibt es immer wieder bei den OTC Nullnummern, da mußte wohl dringend jemand sein Paket loswerden.