ALDA Pharmaceuticals Corp.
TSX VENTURE : APH

ALDA Pharmaceuticals Corp.

February 29, 2008 18:28 ET

Letter to the Shareholders of ALDA Pharmaceuticals Corp.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 29, 2008) - Since the last letter to shareholders was provided on November 15, 2007, a lot of progress has occurred at ALDA Pharmaceuticals Corp. (TSX VENTURE:APH). For example, the Company completed a third financing in 2007, received patents for China and Australia and the issue notification for the US patent, continued the process of introducing its products to consumers, made progress on the manufacturing of its products in China and the registration of the company's securities in the US, received the first results from testing T36® formulation for therapeutic markets and observed the share price rise to new highs and increase by nearly 4-fold. Here are the highlights and our expectations.

Financing activities

The private placement for $525,000, arranged in October, was completed in December with the sale of 3.5 Million Units consisting of one common share and one warrant priced at $0.30 for the first year and $0.45 for the second year. Due to the increase in the Company's share price from $0.37 in November to a high of $1.47 in February on a volume of nearly 60 Million shares over the same period, over 5 million warrants have been exercised, resulting in a cash position of approximately $2.4 million. The company is now in a position to pursue a number of activities well ahead of the original plan. In anticipation of future activities, such as the testing, registration and marketing of the therapeutic and commercial products discussed below, further financings will be required but the Company is now in a position to assess its opportunities and seek the best terms possible.

Retail Products

Brand Institute, Inc. was added to the team working on "re-branding" which has now created new identities for the Company's products. During this process, more than one identity was developed and it became clear that one was particularly suited to commercial products and two others were appropriate for retail products. Trade marking of all three is in progress and the new identities will be revealed when the marketing programs are in place. Containers, graphics, labels and other marketing materials will also be prepared.

The new retail identity will also be used for the new, superior hand rub that is in the process of being registered with Health Canada, as announced by the company on October 30, 2007. Although the Company had been advised that the new DIN would be provided within 60 days, the process has taken longer than expected due to staffing issues at Health Canada and lost e-mails. The Company is in close contact with Health Canada and providing as much assistance as possible to speed the process along. This new product is expected to have an advantage in the market because it is more powerful than typical alcohol hand sanitizers and also kills a wider variety of infectious organisms. A third product, the "Ready to Use" Disinfectant Cleaner that was announced by ALDA on November 1, 2005, will be incorporated into a wipe for the retail market under the same new identity using the wipes provided by He-Yi She Ye Limited. These three retail products will provide a unique combination of infection control products to the consumer that will be effective, versatile and safe.

Manufacturing and marketing in China

Progress is also being made in establishing manufacturing facilities in China. The Company has received samples wipes in canisters that have been manufactured in China and can be used with T36® Disinfectant and T36® "Ready to Use" Disinfectant Cleaner. No firm start date has been established as yet, but the target is to have product on the market in China before the start of the 2008 Olympics that are being hosted in Beijing.

European Union ("EU")

The Company's consultant in the UK, Tincali Tech Consulting ("Tincali"), has just completed a report on the process required for ALDA to market T36® Personal Disinfectant in both the EU and the Middle East using the existing EU registration. The Company is in the process of reviewing the report to determine the most suitable path for initiating sales in the EU. Tincali will then assist ALDA in coordinating the clinical trials that are required for EU, US and Canadian registration of ALDA's therapeutic products.

Therapeutic Products

The patent-pending T36® formulation is versatile, powerful and safe. It consists of a unique combination of four active ingredients in very low concentrations that act in concert to disrupt the physical structure of all infectious organisms rather than interfering with their metabolic pathways or genetic makeup. The competitive advantage is a high degree of effectiveness and safety while preventing microbial resistance, side effects or toxicity. A number of therapeutic applications have been identified and registrations for these purposes are being actively pursued as funding becomes available. All of the applications are topical and, therefore, the extended and highly expensive clinical trials that are associated with drugs taken internally do not apply to the products planned by ALDA. Global markets for the products described below have been estimated to exceed $10 Billion per year.

Clinical testing - Studies are in progress at a US certified lab that will allow T36® therapeutic products to be registered in Canada, the EU and the US are in progress. Positive results for bacteria and fungi were disclosed by the Company in news releases dated January 25, 2008 and January 30, 2008, respectively. It was observed in these tests that the T36® formulation killed all of the bacteria, including antibiotic resistant stains of MRSA and VRE (both serious bacterial infections with few treatments available), within 30 seconds, and Candida albicans, the organism responsible for yeast infections, within 5 minutes. For both the bacteria and C. albicans, the T36® formulation was completely effective within the shortest time tested under the FDA testing protocols. Based on these positive results, the Company is moving forward to start testing the T36® formulation against the organisms responsible for Athlete's Foot so that a product for treating this condition can enter into human testing as soon as possible.

On completion of this first round of tests, the Company will be approaching Health Canada and the European Medicines Agency ("EMeA") with the test results and the toxicology studies for the T36® formulation. If the toxicology studies are deemed to be satisfactory by these agencies, human clinical trials can be started using the protocols that have been prepared for the Company by Bioscience Laboratories Inc.

For the US, a pre-IND ("Investigational New Drug") meeting will be scheduled with the FDA and all of the results obtained by the Company to date will be presented. This meeting will determine if any additional studies are required by the FDA. It is known that other laboratory tests and certain animal studies are required by the FDA before human trials can begin. The objective is to be able to use the data from the human trials to be conducted for the EU and Canada for the FDA submissions once the additional preliminary tests required by the FDA are completed.

T36® "Complete" Hand Sanitizer - The T36® formulation in gel form can be used in hospitals as a superior hand antiseptic in nursing stations, patient rooms, hallways, washrooms, etc. to completely kill all bacteria, fungi and viruses, including resistant infectious organisms such as MRSA and VRE. The T36® formulation is many times more powerful than the leading hand sanitizers and it will also be marketed to consumers under the new identity that has been established by ALDA's marketing team. Registration of an interim product, a superior hand rub, is in progress, as discussed above. Although the registration had been expected within 60 days, some delays have been encountered. These delays do not reflect on the validity of the product or the application, but are internal matters encountered at Health Canada.

T36® Antiseptic - The T36® formulation, both with and without a biological dye, will be registered for use as pre-operative and pre-injection antiseptic in hospitals and clinics. Studies for the US, the EU and Canada have started. The bacterial and fungal testing discussed above will also be used in the registration of this product.

T36® First-Aid Ointment and Topical Treatment - The T36® formulation in a spray and in ointment form can be used on cuts, scrapes, insect bites, topical infections and other conditions that require a safe and effective anti-microbial treatment. The bacterial and fungal testing discussed above will also be used for the registration of this product. One of the first indications intended for this formulation is a treatment for Athlete's Foot mentioned above.

T36® Vulvo-Vaginitis ("VVI") Treatment - Yeast infections account for only one-third of all vulvovaginal infections, yet most products are only effective against yeast. The T36® formulation can be used for treatment of all vulvovaginal infections including yeast, bacteria, parasitic and combinations of all infectious organisms. Studies for the registration of this product will be started on closing of additional funding.

T36® Microbicidal Gel - A diluted form of the VVI Treatment has been developed as a personal lubricant to prevent Sexually Transmitted Infections ("STI's"). This product was introduced to the attendees of the 4th Canadian Microbicides Symposium that took place on January 28, 2008, in Ottawa. The event was attended by a select group of approximately 40 invitees from government departments, research organizations, the private sector and community organizations. The goal of the symposium was to implement the Canadian Microbicide Action Plan (CMAP), which is a commitment from Canada to contribute to microbicides both domestically and internationally, with an emphasis on the urgent need for improved products. The AIDS epidemic is in its third decade and it is now very evident that the scale of the AIDS crisis outstrips even the worst case scenarios of a decade ago. Since 1981, 25 million people have died of AIDS worldwide. The CMAP is an important initiative because, globally, it is estimated that 33.2 million people are now infected with HIV or have AIDS with 6,800 new cases being reported every day. A round table discussion at this conference on the current status of microbicide research revealed that no microbicidal products available to date have proven to be effective against the spread of HIV and AIDS, a conclusion that is supported by statements from the World Health Organization.

After participating in the symposium, the ALDA team met with Senator Celine Hervieux-Payette and the Hon. Robert Thibault, Member of Parliament. In these meetings, discussions took place about Canada's position domestically and on the global stage of HIV and AIDS prevention and how ALDA might contribute to this effort. A meeting was also held with Health Canada to determine the best path to follow to obtain regulatory approval of T36® Microbicide.

By attending and participating in the symposium and the subsequent meetings, the Company found support for continuing its investigation of T36® Microbicide as a means of preventing the spread of HIV and AIDS. Dr. Brian Conway, who is a member of ALDA's Scientific Advisory Board and is also Co-Chair of The Ministerial Advisory Council on the Federal Initiative to Address HIV/AIDS in Canada, has agreed to assist the Company with the design and completion of preliminary clinical trials.

Commercial Products

As announced by the Company on November 1, 2005, ALDA received Drug Identification Number ("DIN") 02272989 from Health Canada for T36® "Ready to Use" Disinfectant Cleaner which is a safe, non-corrosive, disinfecting cleaner suitable for industrial, commercial, institutional and consumer use. In addition to its use in a wipe for retail markets, this product and T36® Disinfectant Wipes will be introduced to commercial customers through the distributors that currently sell the Company's products.

As announced by the Company on March 16, 2006, DIN 02278820 was received for T36® Disinfectant Cleaner CONCENTRATE. This product is safer than competing products and is expected to be very price competitive. It is intended for use on large areas, such as floors and walls that need to be cleaned and disinfected. The Concentrate will be suitable for use in institutions, commercial establishments, cruise ship lines and domestic use. Manufacturing of this product is being arranged and if it sells well in Canada, EPA registration in the US will be investigated.

Patents

Progress has been made on the protection of the Company's intellectual property as described below.

China - Chinese Patent Number ZL02829642.7 has been issued by the State Intellectual Property Office of the People's Republic of China. The patent provides protection for the composition and production methods for ALDA's T36® formulation until August 20, 2022 which is 20 years from the date of filing the original patent application.

Australia - Australian Patent Number 2002322916 has been issued by the Australia Patent Office. The patent provides protection for the composition and production methods for ALDA's T36® formulation, also for 20 years until August 20, 2022.

United States - The United States Patent and Trademark Office ("USPTO") has provided ALDA with an "Issue Notification" stating that US Patent Application No. 10/525,110 is projected to be issued on March 4, 2008 as U.S. Patent No. 7,338,927. The patent provides protection for the composition and production methods for ALDA's T36® formulation.

Europe - The Company will be filing additional information with the European Patent Office. Once this is completed, it is anticipated that the European patent will be issued in due course since the patents have been granted in the US, China and Australia with no significant modifications required to the claims.

Singapore - A Request for Examination was submitted to the Intellectual Property Office of Singapore on May 18, 2007.

Canada - A Request for Examination was submitted to the Canadian Intellectual Property Office on September 19, 2007. An accelerated Request for Examination will be submitted so that this review is completed in months rather than years.

The issued patents are the result of more than 5 years of effort and are important assets of the Company. The original patent application was filed with the European Patent Office ("EPO") under the Patent Cooperation Treaty ("PCT") on August 20, 2002. The PCT application was reviewed and accepted by the EPO in April, 2004. The PCT application was then submitted to the intellectual property office of each separate country and the EU for "national review" and examined again. Each patent office asked its own questions, requested its own modifications and required its own response. A patent in any country is material because each country acts totally independently. A patent in any one country does not automatically lead to a patent in any other countries except that the EU reviews and issues patents on behalf of its member countries. Often, companies like ALDA have an opportunity to sell rights to technologies, like the T36® formulation, and having a patent in place is important validation of the technology.

The Company is also in the process of preparing new patent applications and seeking expanded claims for the original patent.

Foreign securities registrations

As announced in a news release dated September 13, 2007, ALDA is continuing its work towards registration of its securities and reporting in the US and has appointed HLB Cinnamon Jang Willoughby, Chartered Accountants as its auditors so that the financial statements will continue to be prepared and audited in accordance with US requirements. As announced in a subsequent news release dated October 2, 2007, the company retained the services of Stanislaw Ashbaugh, LLP, located in Seattle, Washington, to assist the Company with US securities law. In March 2006, the Company had completed the filing of its initial 20-F registration statement, dated June 30, 2005 with the SEC in the US but then management let the matter rest while contemplating foreign registration strategies for ALDA. A new filing, dated June 30, 2006, is nearing completion and should be filed with the SEC fairly soon. After that, the SEC responds within 30 days with questions, comments and requests for further information. In the meantime, US residents can purchase ALDA shares through US brokers who can place orders with Canadian brokers. The Company trades in the US under the symbol "APCSF". The Company is still contemplating the possibility of obtaining a Frankfurt listing but no decision has been made yet on whether or not to proceed.

Summary

It has been a busy few months at ALDA with the completion of a private placement just before the end of the year, selection of new identities for both the retail and commercial application of the T36® formulation, seeing new supporters coming into the market leading to a substantial increase in the price and liquidity of the Company's shares, issuance of patents in Australia, China and the US, progress on new and expanded patents, clinical testing, accelerated regulatory plans and the US registration of the Company's securities. As we proceed toward the 2008 fiscal year end, the initiatives described above are expected to generate new interest in the company both in Canada and abroad.

I also offer my thanks and gratitude to our dedicated employees, directors and shareholders who have all helped with the growth and development of ALDA into a product-based company with great potential.

Sincerely yours,

Terrance G. Owen, Ph.D., M.B.A., President & CEO

The content and information on this report is for informational purposes only and is intended for use by persons resident in jurisdictions where such use is permitted by law (including applicable securities laws). and is not, and under no circumstances is to be construed as, a prospectus or a public offering or advertisement of securities of ALDA. The statements contained in this report that are not purely historical are forward-looking statements. "Forward looking statements" include statements regarding our expectations, hopes, intentions or strategies regarding the future. Forward looking statements include: statements regarding future products or products or product development; statements regarding future selling, general and administrative costs and research and development spending; and our product development strategy; statements regarding future capital expenditures and financing requirements; and similar forward looking statements. It is important to note that such forward looking statements involve known and unknown risks, uncertainties and other factors (including by not limited to lack of additional financing; risks associated with clinical trials and regulatory approvals; loss of, or challenges to, our intellectual property; changes in management; competition; changes in markets in which we operate) that may cause our actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. These statements and information are only predictions and actual events or results may differ materially. Forward-looking statements are based on our current expectations and ALDA does not assume any obligation to update such information to reflect later events or developments, except as may be required by law.

Contact Information

  • Scott Young
    (604) 288-7222