Apr 20, 2020 in Diagnostics, Press Releases

COVID-19 Screening Test, Oral Thin Film Biosensor Products and Identification Platform

Vancouver, Canada (April 20, 2020) – XPhyto Therapeutics Corp. (CSE:XPHY / FSE:4XT / OTC:XPHYF) (“XPhyto” or the “Company”) is pleased to announce that it has signed a definitive development, technology purchase and licence agreement (the “Agreement”) with 3a-Diagnostics GmbH (“3a”) for the development and commercialization of real-time, low-cost and easy-to-use oral dissolvable thin film (“ODF”) screening tests for the rapid detection of infectious diseases.

3a is a research-based biotechnology company located approximately 50 kilometers Southeast of Stuttgart, Germany, specializing in the development, production and marketing of point-of-care test systems. 3a refers to their approach as “anywhere” (no power or additional equipment required), “anytime” (decentralized and rapidly deployable), and “anyone” (no specialized training required). “Rapid low-cost screening tools allow for unprecedented identification of symptomatic and asymptomatic patients from larger populations,” said Dr. Heinrich Jehle, Managing Director of 3a. “Our partnership with XPhyto has the potential to add significant value to 3a’s existing product portfolio, address a critical near-term need, COVID-19, and prepare 3a for the next pandemic threat through platform enhancement.”

The Agreement sets out the framework for multiple development and commercialization programs (the “Programs”) to be carried out between XPhyto and 3a: 1) further development and commercialization of 3a’s existing product pipeline (the “Products”) which includes the use of XPhyto’s ODF platform to administer 3a’s biosensors; 2) development of a high-throughput biosensor screening platform for rapid identification of new biosensor targets; and 3) development of a dissolvable oral thin film COVID-19 screening test. In consideration for funding the Programs and for share and sales-based compensation, XPhyto will retain an exclusive global licence for commercialization of all new products developed by 3a or using their development platforms and a non-exclusive global licence for the current Products in development.

Engineered using a proprietary biosensor development platform (“Platform 1.0”), 3a has developed a pipeline of peptide-based biosensor screening tests for bacterial and viral infectious diseases which include: stomatitis, periimplantitis, periodontitis, scarlet fever, and influenza. Positive detection of the causative pathogen results in enzymatic release of an extreme (but safe) bitter compound. The most advanced Product, for detection of stomatitis, is expected to be commercially available in Germany in late 2020. 3a has also designed a scalable next generation microbial-enzyme screening tool (“Platform 2.0”) for high-throughput identification of biosensor targets to facilitate rapid development of new tests in response to pandemic outbreaks, such as COVID-19.

The Programs will be carried out by 3a and Vektor Pharma TF GmbH (“Vektor”), a wholly owned subsidiary of XPhyto. Vektor is a German thin film drug delivery researcher and manufacturer located approximately 140 kilometers Southeast of Stuttgart, Germany. The company and its team specialize in the design, testing and manufacture of oral and transdermal thin film systems. Vektor also holds a number of licences issued by the German Federal Institute for Drugs and Medical Devices (BfArM), including import and manufacturing permits, as well as EU GMP lab certification and thin film manufacturing equipment.

“XPhyto and 3a-Diagnostics have recognized a natural synergy between our technologies. 3a owns a proprietary biosensor platform with multiple products in development and XPhyto’s wholly owned subsidiary, Vektor, specializes in research, development and manufacture of oral dissolvable thin film medical products. By working together, we create the opportunity to quickly develop critical new products, adapt 3a’s biosensor technology to Vektor’s dissolvable oral delivery system and carry out EU GMP manufacturing as required,” said Hugh Rogers, CEO of XPhyto.

Pursuant to the Agreement and subject to certain development milestones with respect to Platform 2.0 activities and COVID-19 evaluation work, XPhyto has committed to fund 3a’s research and development work up to 1,073,000 € over an eleven-month period. XPhyto has committed to fund the adaption of 3a’s biosensor Products to Vektor’s ODF platform up to a total of 250,000 € over approximately five months.

Also pursuant to the Agreement, XPhyto will issue 50,000 common shares to 3a immediately and 200,000 common shares upon achieving certain COVID-19 development milestones. An additional 250,000 common shares will be issued to 3a upon achieving 25M € in gross sales within 24 months. 3a will retain a 5% royalty on net sales of all products sold by XPhyto.

Shares issued pursuant to the Agreement will be subject to a statutory four month hold period.

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