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Note 5 - License, Sublicense, Manufacturing, Research and Supply Agreements
12 Months Ended
Dec. 31, 2013
License Sublicense Manufacturing Research And Supply Agreements [Abstract]  
License Sublicense Manufacturing Research And Supply Agreements [Text Block]

5. License, Sublicense, Manufacturing, Research and Supply Agreements


Manufacturing and Supply Agreements:


The Company was a party to the following manufacturing and supply agreements at December 31, 2013.


On March 13, 1992, we entered into a Joint Development and Manufacturing/Supply Agreement with HBL (the “Development Agreement”). As of February 1, 2012, HBL began operating under the name Hayashibara Company, Ltd. (“HBC”) as a wholly-owned subsidiary of Nagase Corporation. On September 23, 2012, a 90-day notice of termination letter was received, and the Development Agreement was officially terminated as of December 22, 2012.


Among other things, the Development Agreement provided ABI with a source of natural human interferon alpha for use in the Company’s interferon alpha-containing products. Termination of the Development Agreement leaves the Company without a current source of interferon with which to conduct clinical trials and ultimately commercialize a product. The Company is exploring its options and is talking with alternate suppliers of interferon.


On October 26, 2006, we entered into a Supply Agreement Anhydrous Crystalline Maltose with HBL (the “ACM Supply Agreement”). In correspondence received September 23, 2013, HBC informed us that, in accordance with Section 3 of the ACM Supply Agreement, it would be terminated as of October 26, 2013.


Historically, the research and development was conducted by ABI using a unique form of natural human interferon supplied by HBL. This interferon no longer provides a competitive edge insomuch as the industry as a whole is rapidly moving toward the use of recombinant interferon rather than natural human interferon. ABI’s thirty years of data has been generated from the numerous studies performed using natural human interferon. Since human interferon is virtually impossible to obtain, those studies will have to be repeated using recombinant interferon. Repeating the studies will be both costly and time consuming. While the pharmaceutical industry is creating and marketing new and effective anti-viral medications, ABI believes that there is still sufficient time to develop and commercialize low dose interferon for treatment of such diseases as Influenza, Chronic Cough in COPD, Hepatitis B, C, and D, and Thrombocytopenia caused by other diseases and as a side effect of treatment of other diseases.


Strategic Alliance with CytoPharm


On May 15, 2013, the Company entered into a CIT Patents Agreement with CytoPharm, Inc. (“CP”) a former licensee for oral IFN technology in Taiwan and China. This agreement establishes the ownership, inventorship, prosecution, maintenance, use and commercialization of a patent regarding treatment of thrombocytopenia with oral IFN that developed out of a study conducted by CP under a previous License and Supply Agreement.


Strategic Alliance with Bumimedic


In January 2006, a license and distribution agreement was executed with Bumimedic (Malaysia) Sdn. Bhd, a Malaysian pharmaceutical company that is a part of the Antah HealthCare Group, to market the Company’s low-dose interferon (natural human IFN) in Malaysia. Given the problems associated with the natural human interferon supply, it is likely that the agreement with Bumimedic will be terminated as the Company can no longer supply Bumimedic with natural human IFN produced by Hayashibara. Once the problems associated with the interferon supply are solved, the Company will most likely endeavor to enter into another such agreement with Bumimedic.


Strategic Alliance with Intas Pharmaceuticals


On January 7, 2010, the Company entered into a License and Supply Agreement with Intas Pharmaceuticals Ltd., an India-based pharmaceutical company with three decades of experience in the healthcare industry and a global presence in 42 countries worldwide. Given the problems associated with the natural human interferon supply, it is likely that the agreement with Intas will be terminated as the Company can no longer supply them with natural human IFN produced by Hayashibara. Once the problems associated with the interferon supply are solved, the Company will most likely endeavor to enter into another such agreement with Intas Pharmaceuticals.


License and Sublicense Agreements:


The Company holds patent rights for which the Company has paid certain license fees under a license agreement with Texas A&M University System. Under this agreement, the Company will pay the licensor a portion of any sublicense fee received by the Company with respect to the manufacturing, use or sale of a licensed product, as well as a royalty fee based on the net selling price of licensed products, subject to a minimum annual royalty.


The minimum cash royalty owed to Texas A&M University System as of December 31, 2013 is $22,500.


Even though the license agreement with HBL has been terminated, a total of $78,360 in sublicense fees are owed to HBL based on sublicense fee income earned by the Company during 2008 and 2009 and are included in accrued expenses – related party. There were no sublicense fees due to HBL for 2012 or 2013.


The Company has also entered into various sublicense agreements under which the Company is entitled to receive royalties based on the net sales value of licensed products. However, given the termination of the Development Agreement with HBL, some of these sublicense agreements have been canceled, and it is likely that the rest will be terminated in the near future.


Research Agreements:


The Company currently has no ongoing studies so there are no obligations to pay third parties in 2014 for expenses related to clinical studies.