-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C/BcwpKKRkhXS4InyesyxCJ25JiJYt4zTBAG2BDHTU/17/dTUBIOfC76Ia+wAvs0 B3lnnRu0geo8T/u71SWrGQ== 0000943403-02-000005.txt : 20020430 0000943403-02-000005.hdr.sgml : 20020430 ACCESSION NUMBER: 0000943403-02-000005 CONFORMED SUBMISSION TYPE: ARS PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IXION BIOTECHNOLOGY INC CENTRAL INDEX KEY: 0000943403 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 593174033 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: ARS SEC ACT: 1934 Act SEC FILE NUMBER: 333-34765 FILM NUMBER: 02627318 BUSINESS ADDRESS: STREET 1: 13709 PROGRESS BLVD STREET 2: BOX 13 CITY: ALACHUA STATE: FL ZIP: 32615 BUSINESS PHONE: 9044181428 MAIL ADDRESS: STREET 1: 13709 PROGRESS BLVD STREET 2: BOX 13 CITY: ALACHUA STATE: FL ZIP: 32615 ARS 1 ixannualreport2002.txt IXION ANNUAL REPORT TO SHAREHOLDERS 2002 IXION [GRAPHIC OMITTED] [Picture of facility location.] Ixion Biotechnology, Inc. 2001 Annual Report FINANCIAL HIGHLIGHTS [GRAPHIC OMITTED] Tangible Assets, net: 2000 2001 $308,257.50 $346,979.70 [GRAPHIC OMITTED] Liabilities: 2000 2001 $1,033,254.00 $497,334.50 [GRAPHIC OMITTED] Intellectual Property, net: 2000 2001 $414,647.70 $453,202.20 [GRAPHIC OMITTED] Revenues: 2000 2001 $403,782.00 $231,740.00 [GRAPHIC OMITTED] 2001 2000 2000 2001 G&A 28% 31% $598,330 $937,933 R&D 70% 62% $1,209,698 $2,308,171 Interest 2% 7% $127,096 $61,691 100% 100% $1,935,124 $3,307,795 Our 2002 average burn rate is close to $225,000 per month, mostly for operating activities. Letter To Shareholders This letter, accompanied by the attached SEC filing on Form 10-KSB is your annual report for the year 2001. Overview The key event of 2001 was that we made the transition from preclinical company to a clinical stage company. After the long years of research, we are finally in a position to put our lead oxalate product, IxOC-2, into clinical trials. The pre-IND meeting with the FDA in November 2001 went well, and we filed the IND (Investigative New Drug) application early in April 2002. If the IND is approved, we hope to initiate a Phase I/II, placebo controlled, trial in 35 hyperoxaluric patients in June 2002. In addition, we plan a small, pilot study of the effect of IxOC-2 in primary hyperoxaluria, cystic fibrosis, and idiopathic hyperoxaluria patients in Germany with our collaborator, Dr. Berndt Hoppe of the University of Cologne. In moving to the clinical stage, we have refined our structure to emphasize product and process development in the oxalate business unit to accelerate the day when we have a product to sell to treat oxalate-related diseases. That means that an increased proportion of our resources are being devoted to the oxalate business unit, where our lead compound, is closest to the market. Of course, the diabetes business unit is continuing to work on research and development of our adult stem cell diabetes product. Financing Until we have a product for sale, there is nothing more important to us than raising capital. There were three significant financial events during 2001. o In July, we received the second payment, totaling $3,353,303 million, from our partner, Q-Med, in the final closing of the July 2000 transaction in which they purchased a total of 3.9 million of our shares for $7.8 million. They currently own about 54% of the total shares outstanding. o Last year, $787,270 of unsecured convertible notes, originally issued in 1996, matured. We successfully converted all but $128,608 of the principal amount into common stock, issuing 288,936 new shares. All but two note holders converted - a nice vote of confidence in Ixion. The successful conversion campaign, assisted by our financial advisors, Kendall Capital Associates, also strengthened our balance sheet, both by converting debt to equity, and by eliminating the threat to our cash in that we did not have to redeem the major portion of the unsecured convertible notes. o Lastly, we were awarded two additional research grants, totaling approximately $1.3 million (to be received over a two year period) for our oxalate research. The good news about research grants, aside from the credibility it confers on our science, is that the funds received are non-dilutive, meaning we do not have to give up any shares in exchange. It's as close as we can get to free money. Our next challenge is to complete successfully the next round of financing to take the Company through 2003. The funds will allow us to further strengthen our product development team, complete our initial clinical studies and process development in the oxalate control area, complete preclinical development in the diabetes area, and pay for needed capital equipment and patent prosecution. We intend to commence our efforts to raise $10,000,000 from venture capitalists or other institutions, assisted by Kendall Capital Associates, specialists in private equity, later this month. New Personnel and Facilities The Company has now grown to 23 employees, 20 of whom are full time. In addition, we have acquired additional lab space, so that we now occupy over 12,100 square feet in our facility in Alachua, Florida. The most interesting aspect of our new additions to the management team is the biopharmaceutical product development experience they bring to the Company. Key new personnel added were o Louis G. Kessler, Ph.D., who joined us in the beginning of last year as Vice President, Corporate Development. Since joining us, Dr. Kessler has managed our external contracts and collaborations as well. as our growing intellectual property portfolio. He has 13 years of experience in the biopharmaceutical industry, most recently with Nabi Biopharmaceuticals. He holds a Ph.D. in molecular and population genetics from the University of Georgia. o Jon Heimer, our new Vice President, Operations, joined on the first day of 2002. He comes to us from Q-Med, where he held various project management and senior management positions. He has over 10 years of experience in the biotech industry and holds degrees in engineering and business administration from Uppsala University and earned a masters degree from IHM business school in Stockholm. o Albert Fosmoe II, joined in March 2002 as Senior Manager Regulatory Affairs and Quality Assurance. He has 13 years of biotech experience, most recently at USBiomaterials. He holds BS and ACS degrees in chemistry from the University of Florida. o Chris Setina joined us in April 2002, as a Process Development Scientist to work on process development for the lead oxalate compound. He was previously a fermentation expert with ICI/Quest International. He earned his BS in Biology from Millikin University. o Marlo Walpole also joined us in April 2002, as a Project Manager in the oxalate business unit. She has particular expertise in quality assurance/quality systems. She comes to us from positions with USBiomaterials and Regeneration Technologies. She earned her BS in Biology from Loyola Marymount University and an MS in Biomedical Engineering from the University of Memphis. We also added Hakan Edstrom to the board of directors in July 2001. He is one of two directors nominated by Q-Med. Mr. Edstrom is President and Chief Operating Officer of MannKind Corporation, a California-based biotechnology company. He has held a variety of senior executive positions with Bausch & Lomb and Pharmacia & Upjohn. He strengthened an already impressive board of experience biopharmaceutical executives. Other Milestones During 2001, we had several other successes, including: o Vijay Ramiya, Ph.D., Director of Research of the Diabetes Business Unit, was appointed to the Research Grant Review Panel of the American Diabetes Association. o As mentioned above, we were awarded two Phase II NIH grants for a total of approximately $1.3 million for oxalate research, and in March 2002, we were awarded a Phase I NIH grant for $100,000 to study trans-differentiation of stem cells into insulin-producing cells. (With the award of the latest grant, Ixion has received 10 grants since 1999, for a total of over $2 million in federal research funds.) o Our relationship with Q-Med has continued to be very beneficial, with several Q-Med persons visiting Ixion and providing their expertise and insights in process development, marketing, and regulatory affairs to augment our management team. Intellectual Property Finally, since our last letter to you, we have received three additional US patents, all in the oxalate area. We filed two US patent continuation applications in the oxalate area, as well as a new patent application relating to oxalate-resistant catheters. We are clearly the world leader in oxalate research and development. On the diabetes front, we filed two new US applications: one application was for a method of committing non-pancreatic stem cells to the pancreatic pathway, and the second for the conversion of liver stem and progenitor cells into the pancreatic pathway. If last year was a critical year, 2002 will be even more critical. Thank you again for your wonderful support. Sincerely yours, Weaver H. Gaines Chairman & Chief Executive Officer Annual Report on form 10-KSB for the year ended December 31, 2001 inserted here Officers, Board, Advisors, Staff... Scientific Advisory Board Ammon B. Peck, Ph.D. Chairman, Professor of Pathology, University of Florida College of Medicine Milton J. Allison, Ph.D. Professor, Microbiology, Immunology and Preventive Medicine, Iowa State Karl-E. Arfors, Ph.D. President, Experimental Medicine, Inc. Marguerite Hatch, Ph.D. Assoc. Professor of Pathology, University of Florida College of Medicine Ross P. Holmes, Ph.D. Assoc. Professor, Surgical Sciences-Urology, Wake Forest School of Medicine Saeedur R. Khan, Ph.D. Professor of Pathology, University of Florida College of Medicine Desmond A. Schatz, M.D. Medical Director, Diabetes Center at the University of Florida. Sheldon M. Schuster, Ph.D. Biotechnology Program Director at the University of Florida Hans Wigzell, M.D., D. Sci. Rector, Karolinska Institute, Stockholm, Sweden Executive Staff Weaver H. Gaines Chairman and Chief Executive Officer Ammon B. Peck, Ph.D. Senior Vice President and Chief Scientist Jon Heimer Vice President, Operations Harmeet Sidhu, Ph.D. Vice President & Director of Research, Oxalate Business Unit Vijay K. Ramiya, Ph.D. Director of Research, Diabetes Business Unit Kimberly A. Ramsey Vice President & Controller Louis G. Kessler, Ph.D. Vice President, Corporate Development Albert G. Fosloe II Senior Manager, Regulatory Affairs and Quality Control Board of Directors Bengt Agerup Chairman, Q-Med AB (publ) Hakan Edstrom Chief Operating Officer, MannKind Corporation Weaver H. Gaines Chairman and Chief Executive Officer, Ixion David M. Margulies, M.D. Chairman and Chief Executive Officer, Correlagen, Inc. Vincent P. Mihalik Leader, Lilly USA Diabetes Care Business Unit, Eli Lilly & Co. David C. Peck Chief Executive Officer, BACOMPT Thomas P. Stagnaro President and Chief Executive Officer, Agile Therapeutics, Inc. Corporate Information Headquarters: 13709 Progress Blvd., Box 13, Alachua, FL 32615 Tel: 386-418-1428 x 301 Fax: 386-418-1583 Email:info@ixion-biotech.com Web Site: http://www.ixion-biotech.com Shareholder Relations: Ted Snow, Director of Administration Tel: 386-418-1428 x 301 Fax: 386-418-1583 Email: teds@biotech.ufl.org Transfer agent & registrar: Questions about stockholdings, certificate replacement, and address changes: Sun Trust Bank, Central Florida, N.A. 58 Edgewood Avenue, Room 225 Atlanta, Georgia 30303 Tel: 404-581-1579 Fax: 404-332-3875 Customer Service 800-568-3476 Independent accountants: PricewaterhouseCoopers L.L.P., Orlando, Florida
Ixion Biotechnology, Inc. 13709 Progress Blvd., Box 13 Alachua, FL 32615 386-418-1428, Ext. 301 386-418-1583 (fax) Internet Web Site: http://www.ixion-biotech.com -----END PRIVACY-ENHANCED MESSAGE-----