NNVC - Annual Report

NanoViricides filed their Annual Report today. I am reproducing the most relevant information stated in the Report (emphasis in bold added). This Summary is meant to be only a cursory overview of progress in the development of a product pipeline and is in no means a substitute of reading the entire Report.

A
-------------------------------------------------------------------------------

Collaborative Agreements and Contracts

On December 23, 2005, the Company signed a Memorandum of Understanding (MOU) with the National Institute of Hygiene and Epidemiology in Hanoi (NIHE), a unit of the Vietnamese Government's Ministry of Health. This Memorandum of Understanding calls for cooperation in the development and testing of certain nanoviricides. The parties agreed that NanoViricides will retain all intellectual property rights with respect to any resulting product and that the initial target would be the development of drugs against H5N1 (avian influenza). NIHE thereafter requested that we develop a drug for rabies, a request to which we agreed. The initial phase of this agreement called first for laboratory testing, followed by animal testing of several drug candidates developed by the Company. Preliminary laboratory testing of FluCide(TM)-I, AviFluCide-I(TM) and AviFluCide-HP(TM) were successfully performed at the laboratories of the National Institute of Hygiene and Epidemiology in Hanoi (NIHE), against both clade 1 and clade 2 of H5N1 virus isolated in Vietnam. Successful animal testing of RabiCide-I(TM), the company's rabies drug, was performed in Vietnam during the first half of 2007, and reproducibly repeated in 2008. Rabies testing can safely be done at their BSL2 facility. The H5N1 animal testing requires a BSL3 (biological safety laboratory level 3) laboratory. NIHE has acquired a BSL3 animal testing capacity during 2008. The work with NIHE will likely continue through calendar year 2009. While the MOU provides for a final agreement between the Company and NIHE, we have not yet discussed a "final agreement" with NIHE and continue to work under the existing MOU. There are no financial obligations or responsibilities for either the Company or NIHE pursuant to the provisions of the MOU.

We have finalized execution of a Materials Cooperative Research and Development Agreement (M-CRADA) with the Centers for Disease Control and Prevention (CDC), Atlanta, GA in July, 2008. This agreement was initiated based on our success against Rabies in the animal studies conducted at NIHE Vietnam. Preliminary animal studies against Rabies are expected to start in the last quarter of calendar year 2008 or first quarter of calendar year 2009. Subsequent to the agreement execution, the Company has supplied certain materials to CDC for testing. This testing, if successful, is expected to expand to involve potential use of nanoviricides as (1) a post-infection therapeutic drug against rabies, possibly in conjunction with a rabies vaccine, and (2) a post-exposure prophylactic drug against rabies, to replace costly human or monoclonal antibodies, possibly in conjunction with a rabies vaccine. To date, there is no effective post-infection therapeutic against rabies. Post-exposure prophylaxis market has been estimated to be as much $300M to $500M worldwide.

We have finalized a CRADA with Walter Reed Army Institutes of Research (WRAIR) to develop collaboratively antiviral agents against all four types of dengue viruses in April, 2007. Preliminary work has commenced under this CRADA. This CRADA is expected to be renegotiated due to changes in funding requirements at WRAIR.

We have finalized a Materials Transfer Agreement (MTA) with the United States Army Institute of Infectious Diseases (USAMRIID) to develop antiviral agents against Ebola, Marburg and other hemorrhagic viruses in October 2007. Preliminary studies began in February, 2008. Certain nanoviricides candidates were found to be highly successful against Ebola virus in pre-clinical cell culture studies. Ebola virus is known to produce, in vivo, a soluble decoy protein that is a portion of its surface glycoprotein. If the nanoviricides that were successful in the in vitro studies bind to the decoy protein portion of the Ebola virus envelope, then we would expect that the nanoviricides would be neutralized in vivo by the decoy protein. We are therefore developing novel ligands that would potentially bind to the Ebola virus glycoprotein portion that is known to be not a part of the decoy protein. The MTA was extended for another year in October, 2008 to continue these studies.

We have finalized a CRADA with Armed Forces Institute of Pathology (AFIP) to perform animal studies against H5N1 in March, 2008. The animal protocols are in review for final approval by their animal care committee.

We have finalized an agreement with a major Medical Institute to perform animal studies of our eye drop formulation of nanoviricides against viral EKC (viral Epidemic Kerato-conjunctivitis) in March, 2008. The first EKC-Cide(TM)-I animal study was completed in June, 2008. Biochemical testing of the samples is continuing. The study indicated that the best nanoviricide drug candidate showed excellent clearance of clinical signs of the disease, viz. redness of the eye as well as sticky exudates, in a short time after treatment. We have received significant interest from certain Pharmaceutical companies in this drug candidate.

We have a continuing job-based subcontract relationship with KARD Scientific, Inc., Beverly, MA. KARD Scientific is owned and operated by Dr. Krishna Menon, who also serves as Chief Regulatory Officer to NanoViricides, Inc. in a consulting capacity. KARD Scientific has performed repeated studies of nanoviricides against common influenza. KARD Scientific also conducted certain efficacy studies of nanoviricides drug candidates against HIV in SCID-hu/Thy/Liv mouse model beginning in March, 2008. The results from this study are being compiled. Significantly, the best nanoviricide drug candidate showed viral load reduction that was superior to that of animals treated with the oral HAART 3-drug cocktail. This drug candidate also showed superior survival of mice as compared to those given the standard cocktail. If these preliminary results continue to hold in further studies, and later in humans, the Company believes that, either alone or conjunction with existing anti-HIV drugs, it should be possible to develop a "Functional Cure" for HIV/AIDS as defined by NIAID, using our anti-HIV nanoviricides. Our belief is based on the excellent efficacy profile of these drug candidates, their excellent safety profile, and the understanding that the mechanism of nanoviricide action is complementary to that of the other anti-HIV drugs.

The Company's Drug Pipeline

Management believes that it has achieved significant milestones in the development of a number of antiviral nanoviricide drug candidates. We now have high efficacy lead drug candidates against (1) common Influenza (FluCide-I), (2) all High Path Avian Influenzas including H5N1 (FluCide-HP), (3) Rabies (RabieCide-I), (4) viral EKC (EKCCide-I), and (5) HIV (HIVCide-I). In addition, the Company has also established the technology feasibility for (a) broad-spectrum nanoviricides, and (b) Just-in-Time ADIF technology; both of which are well suited for stockpiling to defend against known as well as novel infectious diseases.