|1||Set up a lab & produced 1,000 doses of a COVID-19 vaccine via pilot scale manufacturing – in just 4 weeks|
|2||Initiated a preclinical study to evaluate the vaccine, which is based on a successful SARS vaccine candidate|
|3||Prepared to scale to 100,000+ doses in mere weeks pending trial results|
|4||Poised to launch a study to evaluate our genetic based therapy for type II diabetes with support from Michigan State Uni|
|5||Applying premiere biotech techniques (Adeno-associated virus and interference RNA technologies)|
|6||Raised $50K from XX for competitive "Fight the Virus" challenge|
Stark is developing a vaccine for COVID-19 targeting the nucleocapsid protein (N-protein), a well-studied vaccine target from the original SARS outbreak, but surprisingly a target that current vaccine efforts have overlooked. By leveraging the vast amount of research on the original SARS nucleocapsid, we believe Stark has identified a safe vaccine target with a low variance rate and a predictable immunogenetic response. Stark is moving at breakneck speed as they have partnered with a manufacturer, set up a lab for target production, and are looking at initiating animal trials in the next six weeks. Couple this with Anthony’s endless energy, passion, brilliance, and domain expertise, we believe Stark is a major contender to develop a COVID-19 vaccine.
We're working on two treatments right now: a novel Covid-19 vaccine, STK-Vax, and a gene therapy for type II diabetes, STK-AVi1. We’ll address each treatment in depth below.
What's your mission? How does this make you different?
I hold innovation to be the core driving force behind Stark Therapeutics. This may not sound novel, but the pharmaceutical and biotech industries have not yet applied gene editing tech to chronic conditions like T2DM. Changing the way these conditions are treated is a key goal to what we’re doing.
While there are a number of vaccines being developed, most are using technologies that haven't proven effective before. In an emergency situation, a "tried and true" approach might prove more favorable. Additionally, most of these vaccine efforts are extremely similar in their actual approach– what if this biological tactic falls short? Now is not the historical moment to be putting all of our eggs in one basket.
Type II Diabetes
Type II diabetes (T2DM) is a lifelong disease which afflicts over 30 million people in the US alone. Current treatment requires continual lifestyle changes, medical monitoring, and medication intake. While there are multiple therapeutic options, each has its drawbacks in the form of limited effectiveness, side effects, or cost. For example, metformin is a popular T2DM drug that can be effective if taken correctly. However, a cumulative analysis of 1.6 million T2DM patients found that >30% of patients discontinued metformin chiefly due to painful gastrointestinal side effects. If you can’t take effective treatments because of side effects, you really don't have a treatment at all.
Our vaccine is simple: use a protein from the SARS-CoV-2 virus to train the body to fight the virus. We are making a subunit vaccine based on one of the Covid-19 viral proteins known as the nucleocapsid. Previous work from the SARS outbreak in 2003 showed that subunit vaccines based on the nucleocapsid were both safe and effective candidates. These vaccines work by activating a T cell response that helps clear the virus from the body. The nucleocapsid proteins from SARS and Covid-19 are 90% identical, suggesting this approach could translate well. This type of vaccine is relatively easy to produce/scale and the type of processes used are widely used for other types of vaccines and biologics.
Type II Diabetes
Our diabetes therapy is more complex: using a non-pathogenic virus, known as adeno-associated virus or AAV, and gene inhibiting tech, interference RNA or RNAi, we “knockdown” two regulators of cell growth and metabolism. These two genes have been previously targeted (imperfectly) by currently approved T2DM medications. We apply a muscle specific genetic level therapy using AAV and RNAi to 1) directly increase insulin to insulin receptor binding and 2) enhance energy usage through modifying mitochondrial function. Both of these functions are essential in treating and reversing T2DM. Not only is this approach vastly more targeted (ie. may reduce the likelihood of side effects), but this technology creates change in skeletal muscle which may persist for >10 years following a single administration. In other words, we hope that this approach reduces the chance of side effects for patients and represents a much more long-term solution. A solution that effective would disrupt the entire chronic disease treatment space.
What we've done so far...
We received $50,000 from XX to make our vaccine and do an initial preclinical proof of concept study in animals. In the biotech world, 50k would be a rounding error. Long story short, very few would think it possible to either make a vaccine or test it for 50k... doing both would likely be deemed impossible. Well, not only did we accomplish those goals, we also did it in less than 7 weeks with our preclinical study wrapping up in the next few days. To do the animal study portion of the project, we worked with Bioanalytical Systems (BASi) as they have decades of experience in conducting this type of research.
Type II Diabetes
While most of our previous work has been on problem solving outside of the lab, we've managed to get things into a succinct plan of attack by partnering with existing institutions that routinely handle the studies necessary for our next steps. Specifically, we're working with Michigan State University's In Vivo facility which conducts research and supports the development of groundbreaking therapeutics such as STK-AVi1. Intrigued by our approach, we also have the support of Dr. Karl Olson who has over 70 publications and >35 years experience in type II diabetes research. Dr. Olson has since become an advisor irrespective of our work with Michigan State University.
With our funding from this campaign, we're moving right into the next phases of development for both our vaccine and our T2DM therapeutic with most things in place to start in the next 3-5 weeks. Depending on the results of each study, we may make a few tweaks to keep us on time and on target.
Type II Diabetes
Market Size & Impact
This is one of the few times where someone can confidently say everyone is a customer. We’re not entirely sure what the market for a Covid-19 vaccine will look like aside from the obvious fact that it is critical to any reopening strategy and that billions of dollars are being poured into development.
Type II Diabetes
Approximately 30M Americans have T2DM with an additional 88M at risk for developing diabetes (prediabetes). In 2015, US healthcare costs associated with treating T2DM were >$200B. As a “cure” for Type II diabetes, we expect to capture a significant portion of this market, especially for those with more severe complications.
What's the vision for this startup?
As we move forward, I would like to expand our therapy beyond T2DM as there is a clear use case in muscle preservation and in applications beyond therapeutics such as long duration space flight.
Stark Therapeutics has financial statements ending July 17 2020. Our cash in hand is $20,627, as of July 2020. Over the three months prior, revenues averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $9,800/month.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Currently, Stark Tx is working on developing more patents and assembling a team that will serve as the core for clinical trial operations. We are also in the process of developing manufacturing agreements with FDA compliant facilities.
By 2024, Stark Tx plans on being having released or be in the process of releasing our first line of type II diabetic therapies. With patients paying around 10k per year on treatment and over 30M diabetics in the US, Stark Tx plans to offer patients vastly superior outcomes an no need for maintenance. Our goal is to make obesity something only remembered in history books. These projections cannot be guaranteed.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
Stark Therapeutics Corporation was incorporated in the State of Delaware in December 2018.
Since then, we have:
Historical Results of Operations
Our company was organized in December 2018 and has limited operations upon which prospective investors may base an evaluation of its performance.
Liquidity & Capital Resources
To-date, the company has been financed with $50,000 in SAFEs.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 4 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 4 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
Stark Therapeutics Corporation cash in hand is $20,627, as of July 2020. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $9,800/month, for an average burn rate of $9,800 per month. Our intent is to be profitable in 12 months.
Developments since July 17, 2020 include expenditure on sample storage and continued related costs to the conduct of Stark Therapeutic's vaccine proof of concept study. At this point, our burn rate has been reduced dramatically, as our only current expenses are our website and mail service.
In order to go to market and generate revenues, we would likely need tens of millions of dollars depending on what the vaccine scape looks like in the next few months and what sort of partnerships may be available with larger Pharma companies for things like production and regulatory affairs. For a timeline, it is likely to be 6+ months for the vaccine and 2-4 years for the diabetes therapy (I’m considering grants not as capital; FDA approval is required before selling anything and these timelines reflect that process). Both spaces are fluid in that timelines for clinical trials are being slashed, so these estimates are subject to changes in the regulatory space.
While these projections cannot be guaranteed, we hope that post approval, our annual revenue would be in the hundreds of millions for a vaccine (potentially billions depending on market entry point) and billions for the diabetes drug depending on how well we are able to justify it’s vs standard of care ($300B spent in the US on direct diabetes care in 2015). It’s been common for “cures” to capture some degree of the reoccurring costs that patients would have to pay otherwise. For expenses, this is highly variable as taking on manufacturing vs outsourcing would add continual need for lab/cGMP/regulatory upkeep. That being said, expenses (not including R&D) would likely be anywhere from 10-30% of revenue (though margins of >97% are reasonably common in biotech for approved drugs).
As a therapeutics based biotechnology company, financial resources are limited outside of venture capital and government grants. At this time, Stark Therapeutics is solely venture funded.
Research and development in biotechnology is not a sure bet. Hypotheses can be null and proof of concepts can fail. There is no sure bet that Stark Therapeutics can generate a vaccine or therapy that will rival the current standard of care.
The Company may never receive a future equity financing or elect to convert the Securities upon such future financing. In addition, the Company may never undergo a liquidity event such as a sale of the Company or an IPO. If neither the conversion of the Securities nor a liquidity event occurs, the Purchasers could be left holding the Securities in perpetuity. The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Company’s assets or profits and have no voting rights or ability to direct the Company or its actions.
Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
We have performed "freedom to operate" scans, but there can be no guarantee that our portfolio of technology is free from being subjected to licensing fees, taking money out of our bottom dollar and the ability to grow revenue to the levels we aim for.
This Wefunder campaign allows us to complete two primary objectives: complete an efficacy study of our vaccine candidate (and basic toxicity study if our maximum funding goal is reached); conduct a proof of concept study for our diabetes therapy. This campaign does not get us to market and does not guarantee we will ever get to market.
Both Covid-19 vaccines and gene therapy are among the hottest areas in biotech today. Headlines, both positive and negative, have potential to impact our business.
Stark Therapeutics’s diabetes therapy uses two technologies that are on the bleeding edge of the biotechnology and pharmaceutical industry: Adeno-associated viral based gene therapy and interference RNA. As they have not been applied to a common chronic condition before, there are likely more challenges for approval compared to other drugs more inline with the current standard of care. This can increase the time to market and the overall success of the proposed therapeutic.
Temporary Rule 201(z)(2) provides temporary relief from certain financial information requirements by allowing issuers to omit the financial statements required by Rule 201(t) in the initial Form C filed with the Commission. This offering has commenced in reliance of Temporary Rule 201(z)(2) and, as a result, the following must be disclosed: (i) the financial information that has been omitted is not otherwise available and will be provided by an amendment to the offering materials; (ii) the investor should review the complete set of offering materials, including previously omitted financial information, prior to making an investment decision; and (iii) no investment commitments will be accepted until after such financial information has been provided.
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