To many negatives, page-3

First impressions?
I was under the impression that because VitroGro is a device that an official double blind placebo trial would not be required and that the trials done by Prof Keith Harding would be sufficient to allow for CE mark approval, this impression was founded on research into the requirements for CE mark approval for a device and via inference from the company as well as their high expectation that approval would be granted. How mistaken I was…

How long?
At this stage to me it is quite apparent that further clinical studies need to be undertaken confirmed by the only applicable SAWP objective and mandate in this scenario. “The SAWP shall provide advice on the design of trials to assess safety and efficacy in a new indication for a well-established substance in accordance with Article 10(5) of Directive 2001/83/EC as amended as by Directive 2004/27/EC.” These directives are attached, they don’t paint a pretty picture. In some cases scientific literature will suffice which is what I believe the company was relying on for the component of VitroGro being called into question by the EMA, so the only other alternative is to undertake clinical studies.

Basically we are back to square one where at least VitroGro’s safety is being called into question thus the purpose of a clinical trial; I say only safety at this stage and not efficacy because the company has said that the EMA has not questioned VitroGro’s performance. To me the risk of failure in a clinical trial is too high a risk than one is prepared to take.

If we are to take the timeline given by the company to complete FDA trials being two years then I believe this is at least how long we are looking at for approval in Europe as I believe the company intend to start the FDA trials and use the same data obtained from those trials to complete their application in Europe. As why would you run two separate trials at the same time to obtain the same set of data? This scenario seems ever more likely as upon reflection the company gave inference when they said it’s time to uncouple sales from the EMA process. This seems like an odd thing to say given it has been their sole objective for the last 4 years to do the opposite.

Where are the funds going to come from to support our future capital requirements?
If we take the most recent investor presentation we only have enough funds to get us through to July 2015 as the expectation was that CE mark would be granted and we could raise additional funds from strategic investors at a higher price. Obviously we are still going to need funds for 12 months of working capital or $8million and if FDA trials are to go ahead as was implied in the most recent announcement then we need funds in the order of $15 to $22 million. All up in the order of $30million will be required; if we are to raise these funds at current prices we are looking at up to 300 million shares or a dilutive factor of 50%

http://ec.europa.eu/health/files/eudralex/vol-1/dir_2001_83_consol_2012/dir_2001_83_cons_2012_en.pdf

http://ec.europa.eu/health/files/eudralex/vol-1/dir_2004_27/dir_2004_27_en.pdf

Too many unanswered questions but enough to piece together an answer for where this thing is headed.