Sorrento Therapeutics, Inc. (SRNE-OTC: BB)

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February 19, 2010 Issue

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Ready To Finalize The Construction Of The First Fully Human Antibody Library And An Alliance With Scripps Research To License Their Technology For A Program That Uses Antibodies To Treat MRSA Infections, Sorrento Therapeutics, Inc. Has Reached A Couple Of Big Milestones

Company Profile:

Sorrento Therapeutics, Inc. is a development-stage biopharmaceutical company focused on applying its proprietary technology platform for the discovery and development of human therapeutic antibodies for the treatment of a variety of disease conditions, including cancer, inflammation, metabolic disease and infectious disease. The Company constructs a fully human antibody library which is designed to facilitate the rapid identification and isolation of highly specific and fully human antibody therapeutic product candidates.

Sorrento Therapeutics, Inc. (STI) offers access to its novel and proprietary technology platform for the construction of fully human antibody libraries, the STI Technology.

The STI Technology applies RNA transcription for the amplification of human immunoglobin variable domain sequences.

STI was formed in 2006 in San Diego, California. In September 2009, STI and Quikbyte Software, Inc., a publicly traded shell company, merged and adopted STI’s name.

Dr. Antonius P. Schuh Ph.D.
Chairman and CEO

Antonius Schuh, Ph.D., age 46, co-founded STI in January 2006 and has served as its Chairman since such time and as its Chief Executive Officer since November 2008. From April 2006 to September 2008 Dr. Schuh served as Chief Executive Officer of AviaraDx, Inc. (now bioTheranostics, Inc., a bioMerieux company), a molecular diagnostic testing  company that is focused on clinical applications in oncology. From March 2005 to April 2006, Dr. Schuh was Chief Executive Officer of Arcturus Bioscience, Inc. (now part of MDS), a developer of laser capture microdissection and reagent systems for microgenomics. From December 1996 to February 2005, Dr. Schuh was employed by Sequenom Inc., a publicly traded diagnostic testing and genetics analysis company. He started with Sequenom as a Managing Director and was promoted to Executive Vice President, Business Development, and from May 2000 to February 2005, served as Sequenom’s President and Chief Executive Officer. He also previously served as the Head of Business Development at Helm AG, an international trading and distribution corporation for chemical and pharmaceutical products, and in medical and regulatory affairs positions with Fisons Pharmaceuticals (now part of Sanofi-Aventis). Since March 2009, Dr. Schuh has been appointed to the board of Diogenix, Inc., a privately held molecular diagnostic company, and since May 2009, Dr. Schuh has served as a director of Transgenomic, Inc., a public biotechnology company focused on genetic analysis and molecular diagnostics. Dr. Schuh is a certified pharmacist and earned his Ph.D. in pharmaceutical chemistry from the University of Bonn, Germany.

Healthcare
Biopharmaceutical - Antibody Libraries
(SRNE-OTC: BB)

Sorrento Therapeutics, Inc.
6042 Cornerstone Ct. West, Suite B
San Diego, CA 92121
Phone: 858-210-3703

Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published – February 19, 2010

CEOCFO: Dr. Schuh, what was your vision when you founded Sorrento and where are you today?

Dr. Schuh: Sorrento has been formed on the basis of a novel technology to make large fully human antibody libraries. If you follow the biopharmaceutical industry a little bit, you will see that antibodies are a major component of the biopharmaceutical industry overall. Platform technologies that allow pharmaceutical companies to come up with antibody development candidates are considered very valuable. Established antibody platform technologies are heavily patented and companies that control these platform technologies have been M&A targets. Over the past few years, we have seen significant M&A activity in the antibody space. As a result, access to such technology platforms that allow you to identify novel human antibodies for targets that you are interested in are quite limited, particularly in the United States. We are well positioned to address this void with our proprietary platform.

CEOCFO: Are other technologies available internationally?

Dr. Schuh: Patented technologies or platforms, methods and procedures may not be protected offshore. However, in the US, on one side by far the largest investment has been made in biological research that should yield novel drug targets, while, on the other side, access to antibody technology platforms suitable to deliver fully human antibodies against such targets is most limited. And – the US is the most important healthcare market. So, whatever technology platform you have, if this platform doesn’t allow you to conduct your research and development in the US and to move materials in the US, then this is a major handicap.

CEOCFO: What is special about the technology you have developed?

Dr. Schuh: Our technology is free of any third party intellectual property burden and the technology is also very cost effective. The way you make an antibody library is in simple terms as follows: You isolate white blood cells from a human donors. These white blood cells contain the genetic code for the building blocks of all the different antibodies that humans can make, and there are many millions. You then amplify these gene sequences, which is essentially a copying process. Then you transfer these copied gene sequences in a microorganism and the microorganism will produce the desired antibody building blocks, which can be assembled into antibodies.

 

The established or market-leading technologies to amplify antibody gene sequences use a first generation amplification technology that is widely known as PCR (Polymerase Chain Reaction) and was introduced in the 1980’s. We use a second generation amplification technology, which is called RNA transcription. We believe RNA transcription is more suitable for the amplification of the very diverse pool of antibody gene sequences, when compared to PCR. PCR is an amplification technology that is perfect if you want to make very good copies from one specific gene. However, if you want to make copies from many different sequences at the same time, it is simply not that good a tool. For this type of application RNA transcription is better. We believe we will not only deliver fully human antibody libraries that are free and clear from third party intellectual property burden, we also believe that our human libraries will be more faithful and more complete and have less clutter and noise due to the use of an amplification technology that is better suited for the purpose.

CEOCFO: Where are you in the process today?

Dr. Schuh: We are about to finalize the construction of our first library, which will be a large fully human antibody library, comparable to the libraries offered by industry leaders such as Cambridge Antibody Technologies, which has been acquired by AstraZeneca.

We have also acquired our first therapeutic development program, which is focused on the treatment of MRSA infections. MRSA, which stands for Methicillin-resistant Staphylococcus aureus, is a major health concern. CDC data indicate that in 2005 about 20,000 people died in the US from acute MRSA infections. Conventional antibiotics are not sufficiently effective in these patients. The Scripps Research Institute in La Jolla has developed a novel strategy to treat these MRSA infections: By scrambling the communication system of S. aureus, one can inhibit the activation of biological processes that drive the bacterias’ virulence, and the the infection can be cleared by the host’s immune system. Simply put, if a person is infected with S. aureus, the bacteria will release signaling molecules, indicating their presence to each other. Once the concentration of these signaling peptides reaches a certain threshold, i.e. the S. aureus population has reached a critical strength, biological pathways which drive an acute infection are activated.

What we now propose is to use human antibodies to capture or intercept these signaling molecules. As a result, S. aureus bacteria are not able to “talk” to each other, as a result the will not happen and the fulminant outbreak of an acute infection is suppressed. The animal data Scripps Research has generated to demonstrate that this approach works are very powerful and show that you can completely protect mice from an otherwise lethal dose of MRSA, if you give the animals an antibody which quenches the signaling molecules we talked about.

 

By the way, the bacterial communication process based on the release of signaling molecules is referred to as ‘quorum sensing’, and the suppression of this communication process, by neutralization or interception of these signaling molecules, is called ‘quorum quenching’.

CEOCFO: What is ahead for Sorrento?

Dr. Schuh: The key milestones for us for the first quarter of 2010 is the completion of our fully human antibody library. We are looking at additional in-licensing opportunities, but it is too early to talk about specifics. We have also started to roll out a business development effort to offer access to our library technology to other biopharmaceutical and pharmaceutical companies. We are working towards revenue generation in2010.

CEOCFO: Is the industry aware that they need a better method or have they been satisfied with the current method they have been using?

Dr. Schuh: I would say there is a clear recognition in the pharmaceutical industry that there is a shortage of platforms for the development of fully human antibodies. This, I would argue, is best evidenced by the strong appetite of large pharmaceutical companies for antibody platform companies. One example is the very recent acquisition of Medarex by Bristol-Myers Squibb. Medarex applies a so-called ‘human’ mouse to generate fully human antibodies. Another company applying a ‘human’ mouse platform is Abgenix, which has been acquired by Amgen. The leading human antibody library company, Cambridge Antibody Technologies, which was based on the so-called Winter II intellectual property estate for the construction of said human antibody libraries, has been acquired by AstraZeneca a few years ago and shortly thereafter, Glaxo SmithKline bought Domantis, which controlled a certain portion of the Winter II intellectual property mentioned before. Then Novartis signed a very large collaborative deal with the one provider of large human antibody libraries left, Morphosys of Germany. To our understanding, Novartis has a pretty firm grip on Morphosys library capacity for any novel targets that would be proposed for screening. Given the significant appetite in the pharmaceutical and biopharmaceutical industry for powerful antibody platforms, and the fact that essentially one after another antibody company gets acquired, I think there is an acute awareness in the industry that it is important to have access to a powerful, unfettered human antibody platform.

CEOCFO: You mentioned having income flowing in 2010; what is the financial picture today and are you funded enough to get where you need to be?

Dr. Schuh: We received initial funding in mid 2009. We are a relatively small organization burning about $200,000 a month, and our initial funding provides for about 2 years of runway, net of potential revenues. As stated, we expect to generate revenues in 2010. We anticipate that we will be able to generate meaningful revenues going forward. We are a Bulletin Board listed public company, and we have not given any specific guidance as to what our income situation would be for 2010.

CEOCFO: In closing, why should and why does Sorrento Therapeutics stand out from the crowd?

Dr. Schuh: Sorrento Therapeutics’ business model is a very commercial business model in an otherwise very scientific marketplace. We are focused on a proven class of therapeutic biomolecules, namely antibodies and we address a proven market. This allows us to generate revenues quickly. If you look at antibody platform companies like the ones that I have mentioned before, these companies have been financially in a very strong position compared to a more typical biopharmaceutical company, which faces high burn rates and high technology risk over a very long period of time. So I think that is quite unique and I think we are the right company for the time.

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We believe we will not only deliver fully human antibody libraries that are free and clear from third party intellectual property burden, we also believe that our human libraries will be more faithful and more complete and have less clutter and noise due to the use of an amplification technology that is better suited for the purpose. - Dr. Antonius P. Schuh Ph.D.

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