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Note 5 - License, Sublicense, Manufacturing, Research and Supply Agreements
12 Months Ended
Dec. 31, 2012
License Sublicense Manufacturing Research And Supply Agreements [Text Block]
5. License, Sublicense, Manufacturing, Research and Supply Agreements

Manufacturing and Supply Agreements:

The Company was a party to the following manufacturing and supply agreements at December 31, 2012.

On March 13, 1992, we entered into a Joint Development and Manufacturing/Supply Agreement with HBL (the “Development Agreement”). As of February 1, 2012, HBL began operating under the name Hayashibara Company, Ltd. (HBC) as a wholly-owned subsidiary of Nagase Corporation.. On September 23, 2012, a 90-day notice of termination letter was received, and the Development Agreement was officially terminated as of December 22, 2012.

In January 2006, a license and distribution agreement was executed with Bumimedic (Malaysia) Sdn. Bhd, a Malaysian pharmaceutical company that is a part of the Antah HealthCare Group, to market our low-dose interferon (natural human IFN) in Malaysia. Bumimedic was to have sought registration for our natural human IFN and to have commenced marketing the product after approval. Pursuant to the agreement, the Company was to have received a series of payments, in three stages: upon formal execution of the distribution agreement, upon regulatory approval, and upon production. The Company was to have received a royalty on the sale of the natural human IFN. Given the termination notice received from HBC, it is likely that the agreement with Bumimedic will be terminated as the Company can no longer supply Bumimedic with natural human IFN produced by Hayashibara.

On January 7, 2010, the Company entered into a License and Supply Agreement with Intas Pharmaceuticals Ltd., an India-based pharmaceutical company. Under the terms of the agreement, Intas was to pay the Company a royalty on net sales in India and Nepal after marketing approval was obtained. Given the termination notice received from HBC, it is likely that the agreement with Intas will be terminated as the Company can no longer supply Intas with natural human IFN produced by Hayashibara.

The Company has a supply agreement with HBL under which the Company gained an exclusive right to purchase and distribute anhydrous crystalline maltose for the treatment of dry mouth (xerostomia). This exclusive supply agreement, which is worldwide excluding Japan, remains in force.

License and Sublicense Agreements:

The Company holds patent rights for which the Company has paid certain license fees under a license agreement with Texas A&M University System. Under this agreement, the Company will pay the licensor a portion of any sublicense fee received by the Company with respect to the manufacturing, use or sale of a licensed product, as well as a royalty fee based on the net selling price of licensed products, subject to a minimum annual royalty.

The minimum cash royalty owed to Texas A&M University System for 2012 is $7,500, $7,500 for 2011, and $7,500 for 2010.

Even though the license agreement with HBL has been terminated, a total of $78,360 in sublicense fees are owed to HBL based on sublicense fee income earned by the Company during 2008 and 2009 and are included in accrued expenses – related party. There were no sublicense fees due to HBL for 2011 or 2012.

The Company has also entered into various sublicense agreements under which the Company is entitled to receive royalties based on the net sales value of licensed products. However, given the termination of the Development Agreement with HBL, some of these sublicense agreements have been canceled, and it is likely that the rest will be terminated in the near future.

Research Agreements:

The Company currently has no ongoing studies so there are no obligations to pay third parties in 2013 for expenses related to clinical studies.