UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 40-F

 

(Check One)


x REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

OR

¨ ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended:  _______________ Commission File Number:  _________________

 

Immunovaccine Inc.
(Exact name of Registrant as specified in its charter)

 

Canada
(Province or other jurisdiction of incorporation or organization)

 

2834
(Primary Standard Industrial Classification Code Number (if applicable))

 

Not Applicable
(I.R.S. Employer Identification Number (if applicable))

 

1344 Summer Street, Suite 412

Halifax, Nova Scotia B3H 0A8

Canada

(902) 492-1819
(Address and telephone number of Registrant’s principal executive offices)

 

C T Corporation System

111 Eighth Avenue

New York, NY 10011

(212) 894-8800
(Name, address (including zip code) and telephone number (including area code)
of agent for service in the United States)

 

Copies to:

 

Pierre Labbé

Immunovaccine Inc.

1344 Summer Street, Suite 412

Halifax, Nova Scotia B3H 0A8

Canada

(902) 492-1819

Thomas M. Rose

Troutman Sanders LLP
401 9th Street, N.W., Suite 1000
Washington, D.C. 20004-2134

(757) 687-7715

 

Securities registered or to be registered pursuant to Section 12(b) of the Act:

 


Title of each class
Common Shares
Name of each exchange
on which registered
The NASDAQ Stock Market LLC

 

Securities registered or to be registered pursuant to Section 12(g) of the Act:

 

None
(Title of Class)

 

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

 

None
(Title of Class)

 

For annual reports, indicate by check mark the information filed with this Form:

 

¨   Annual information form             ¨  Audited annual financial statements

 

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: N/A

 

Indicate by check mark whether the Registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the “Exchange Act”). If “Yes” is marked, indicate the file number assigned to the Registrant in connection with such Rule.

 

YES ¨    NO x

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

 

YES ¨    NO ¨

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.

 

Emerging growth company x

 

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      ¨

 

 

 

 

 

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

Certain statements in this Registration Statement on Form 40-F are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). Additionally, the safe harbor provided in Section 21E of the Exchange Act and Section 27A of the Securities Act applies to any forward-looking information provided pursuant to “Off-Balance Sheet Arrangements” and “Disclosure of Contractual Obligations” in this Registration Statement on Form 40-F. Please see “Forward-Looking Statements” beginning on page 4 of the Management’s Report on Financial Position and Operating Results for the year ended December 31, 2017 of Immunovaccine Inc. (the “Registrant”), attached as Exhibit 99.92 to this Registration Statement on Form 40-F, and “Introduction and Forward Looking Statements” beginning on page 1 of the Annual Information Form for the fiscal year ended December 31, 2017 of the Registrant attached as Exhibit 99.88 to this Registration Statement on Form 40-F.

 

DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES

 

The Registrant is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare this Registration Statement on Form 40-F in accordance with Canadian disclosure requirements, which are different from those of the United States.

 

The Registrant prepares its consolidated financial statements, which are filed with this Registration Statement on Form 40-F, in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board (“IFRS”), and they may be subject to Canadian auditing and auditor independence standards. Such financial statements may not be comparable to financial statements prepared in accordance with United States generally accepted accounting principles.

 

DOCUMENTS FILED PURSUANT TO GENERAL INSTRUCTIONS

 

The documents filed or incorporated by reference as Exhibits 99.1 through 99.95, each of which is incorporated by reference in this Registration Statement on Form 40-F, contain all information material to an investment decision that the Registrant, since January 1, 2017: (i) made or was required to make public pursuant to the law of any Canadian jurisdiction; (ii) filed or was required to file with the Toronto Stock Exchange (the “TSX”) and which was made public by the TSX; or (iii) distributed or was required to distribute to its security holders.

 

In accordance with General Instruction D(9) of Form 40-F, the Registrant has filed written consents of certain experts named in the foregoing Exhibits as 99.95, as set forth in the Exhibit Index attached hereto.

 

DESCRIPTION OF COMMON SHARES

 

The disclosure containing a description of the securities to be registered is included under the heading “Description of Capital Structure” beginning on page 53 of the Registrant’s Annual Information Form, attached hereto as Exhibit 99.88.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

The Registrant does not have any “off-balance sheet arrangements” (as that term is defined in paragraph 11(ii) of General Instruction B to Form 40-F) that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

 -2- 

 

 

DISCLOSURE OF CONTRACTUAL OBLIGATIONS

 

The following table lists, as of December 31, 2017, information with respect to the Registrant’s known contractual obligations:

 

   Payments Due by Period (All amounts in Canadian dollars) 
Contractual Obligations 

Less than 1

year

   1-3 years   3-5 years  

More than

5 years

   Total 
Accounts payable and accrued liabilities   2,760,228    -    -    -    2,760,228 
Amounts due to directors   21,245    -    -    -    21,245 
Long-term debt   220,408    5,381,154    117,206    9,683,315    15,402,083 
Operating leases   253,193    497,585    481,412    1,304,225    2,536,415 
                          
Total   3,255,074    5,878,739    598,618    10,987,540    20,719,971 

 

UNDERTAKING

 

The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

 

CONSENT TO SERVICE OF PROCESS

 

Concurrently with the filing of the Registration Statement on Form 40-F, the Registrant has filed with the Commission a Form F-X.

 

Any change to the name or address of the Registrant’s agent and service shall be communicated promptly to the Commission by amendment to the Form F-X referencing the file number of the Registrant.

 

 -3- 

 

 

EXHIBIT INDEX

 

The following documents are being filed with the Commission as exhibits to this Registration Statement on Form 40-F.

 

Exhibit No. Title of Exhibit
99.1 News Release regarding participation in the 9th Annual Biotech Showcase Conference, dated January 4, 2017
99.2 News Release regarding participation in the BIO CEO & Investor Conference, dated February 2, 2017
99.3 News Release regarding the appointment of Pierre Labbé, as Chief Financial Officer, dated February 3, 2017
99.4 News Release regarding leading immuno-oncology candidate entering investigator-sponsored Phase 2 clinical trial in ovarian cancer in combination with approved Anti-PD-1 Drug, dated February 6, 2017
99.5 Notice of the Annual General and Special Meeting held on April 20, 2017, dated February 17, 2017
99.6 Notice of the Annual General and Special Meeting held on May 10, 2017, dated March 17, 2017
99.7 News Release regarding new pre-clinical combination therapy data being presented at the AACR annual meeting, dated March 24, 2017
99.8 News Release regarding announcement of positive interim clinical data from ovarian cancer study of DPX-Survivac in combination with Epacadostat, dated March 29, 2017
99.9 ON Form 13-502F1 Class 1 and Class 3B Reporting Issuers, dated March 30, 2017
99.10 Consolidated Financial Statements for years ended December 31, 2016 and 2015
99.11 AB Form 13-502F1 Class 1 and Class 3B Reporting Issuers, dated March 30, 2017
99.12 Annual Information Form for the year ended December 31, 2016
99.13 Management’s Report on Financial Position and Operating Results for the year ended December 31, 2016
99.14 Form 52-109F1 CEO and CFO Certifications of Annual Filings for the year ended December 31, 2016
99.15 News Release announcing 2016 Year-End Results, dated March 30, 2017
99.16 News Release regarding preclinical research being presented at AACR 2017 on ability of novel monoclonal antibodies to boost efficacy of DepoVaxTM-based cancer immunotherapy, dated April 5, 2017
99.17 News Release regarding presentation at Bloom Burton & Co. Healthcare Investor Conference, dated April 7, 2017
99.18 News Release regarding Princess Margaret Cancer Center receiving Canada clearance to begin investigator-sponsored Phase 2 ovarian cancer study evaluating Immunovaccine’s DPX-Survivac with Merck’s Pembrolizumab, dated April 11, 2017
99.19 News Release announcing positive year-long immunogenicity data from Phase 1 clinical trial for respiratory syncytial virus vaccine candidate, dated April 12, 2017

 

 

 

 

99.20 Letter to certain Canadian securities commissions dated April 13, 2017
99.21 Notice of Annual and Special Meeting of Shareholders held on May 10, 2017, dated March 31, 2017
99.22 Management Information Circular for the annual and special meeting of shareholders held on May 10, 2017, dated March 31, 2017
99.23 Form of Proxy for the annual and special meeting of shareholders held on May 10, 2017
99.24 News Release announcing dosing of first patient in investigator-sponsored Phase 1b/2 clinical trial evaluating immuno-oncology candidate targeting incurable HPV-related cancers, dated April 18, 2017
99.25 News Release regarding Immunovaccine Inc. presenting at 19th Annual TIDES: Oligonucleotide and Peptide Therapeutics Conference, dated May 2, 2017
99.26 Unaudited Interim Condensed Consolidated Financial Statements for quarter ended March 31, 2017
99.27 Management’s Report on Financial Position and Operating Results for the three months ended March 31, 2017
99.28 Form 52-109F2 CEO and CFO Certifications of Annual Filings for the quarter ended March 31, 2017
99.29 News Release announcing financial results for quarter ended March 31, 2017, dated May 10, 2017
99.30 Report on voting results of the annual and special meeting of shareholders held on May 10, 2017
99.31 News Release announcing Immunovaccine Inc.’s lead immuno-oncology candidate to enter investigator-sponsored Phase 2 clinical trial in DLBCL in combination with approved Anti-PD-1 drug, dated May 16, 2017
99.32 Deferred Share Unit Plan approved by the board of directors on December 21, 2016
99.33 Amended Stock Option Plan
99.34 News Release announcing Cdn$10 million bought deal offering, dated May 31, 2017
99.35 Underwriting Agreement dated June 6, 2017
99.36 Preliminary short form prospectus dated June 6, 2017
99.37 Receipt of the Nova Scotia Securities Commission dated June 6, 2017 for the preliminary short form prospectus dated June 6, 2017
99.38 Form 51-102F3 Material Change Report regarding the closing of the Cdn$10 million bought deal offering, dated June 9, 2017
99.39 News Release announcing formation of inaugural Scientific and Clinical Advisory Committee, dated June 14, 2017
99.40 Final short form prospectus for Cdn$10 million bought deal offering, dated June 15, 2017
99.41 Receipt of the Nova Scotia Securities Commission dated June 16, 2017 for the short form prospectus dated June 15, 2017
99.42 News Release announcing closing of Cdn$10 million bought deal offering, dated June 21, 2017

 

 

 

 

99.43 Form 51-102F3 Material Change Report announcing the closing of the Cdn$10 million bought deal offering, dated June 29, 2017
99.44 News Release announcing that Immunovaccine Inc. achieved breakthrough in support of developing personalized cancer immunotherapies, dated July 12, 2017
99.45 News Release announcing CEO Frederic Ors named to annual PharmaVOICE 100, dated August 4, 2017
99.46 Unaudited Interim Condensed Consolidated Financial Statements for six months ended June 30, 2017
99.47 Management’s Report on Financial Position and Operating Results for the six months ended June 30, 2017
99.48 Form 52-109F2 CEO and CFO Certifications of filings for the six months ended June 30, 2017
99.49 News Release announcing financial results for quarter ended June 30, 2017, dated August 8, 2017
99.50 News Release announcing Immunovaccine Inc.’s presentation at the 19th Annual Rodman & Renshaw Global Investment Conference, dated August 30, 2017
99.51 News Release announcing achievement of milestones in collaboration with Zoetis to develop veterinary vaccines, dated August 31, 2017
99.52 News Release announcing Immunovaccine Inc.’s presentations at certain investor conferences, dated September 29, 2017
99.53 News Release announcing an extension to the maturity date of a Cdn$5 million loan until 2020, dated October 17, 2017
99.54 News Release announcing regulatory clearance for Phase 2 clinical trial evaluating DPX-Survivac in combination with Merck’s checkpoint inhibitor Pembrolizumab in DLBCL, dated November 8, 2017
99.55 Unaudited interim condensed consolidated financial statements for the nine months ended September 30, 2017
99.56 Management’s Report on Financial Position and Operating Results for the nine months ended September 30, 2017
99.57 Form 52-109F2 CEO and CFO Certifications of filings for the nine months ended September 30, 2017
99.58 News Release announcing third quarter 2017 financial results, dated November 9, 2017
99.59 News Release announcing positive clinical data from collaborative combination immunotherapy trial in advanced ovarian cancer, dated December 5, 2017
99.60 News Release announcing Immunovaccine Inc. and UConn Health extended collaboration to support advancement of patient-specific immunotherapies to the clinic, dated December 7, 2017
99.61 News Release announcing presentation at 2018 Biotech Showcase Conference, dated January 3, 2018
99.62 News Release announcing appointment of Joseph Sullivan as Senior Vice President, Business Development, dated January 18, 2018
99.63 News Release announcing that Immunovaccine Inc. was named to 2018 OTCQX Best 50, dated January 24, 2018

 

 

 

 

99.64 News Release announcing Cdn$12.5 million bought deal offering, dated January 25, 2018
99.65 Underwriting Agreement, dated January 30, 2018
99.66 Preliminary short form prospectus for Cdn$12.5 million offering of common shares, dated January 30, 2018
99.67 Receipt of the Nova Scotia Securities Commission for the preliminary short form prospectus, dated January 30, 2018
99.68 News Release announcing that published study demonstrates the association between Immunovaccine Inc.’s proprietary immune-targeted delivery technology and enhanced efficacy in slowing tumor progression, dated January 31, 2018
99.69 News Release announcing presentation at 2018 BIO CEO & Investor Conference, dated February 2, 2018
99.70 Form 51-102F3 Material Change Report announcing the Cdn$12.5 million bought deal offering of common shares, dated February 2, 2018
99.71 Final Short Form Prospectus for Cdn$12.5 million offering of common shares, dated February 5, 2018
99.72 Receipt of the Nova Scotia Securities Commission for the short form prospectus, dated February 5, 2018
99.73 News Release announcing closing of Cdn$14.375 million bought deal offering with over-allotment option exercised in full, dated February 15, 2018
99.74 News Release announcing Immunovaccine and Leidos Expand Collaboration to Develop Malaria Vaccines Formulated in DepoVaxTM, dated November 21, 2017
99.75 Form 51-102F3 Material Change Report announcing the closing of the Cdn$14.375 million bought deal offering of common shares, dated February 21, 2018
99.76 News Release announcing presentation at the Oncology Meeting Innovations Annual Summit on hematologic malignancies, dated March 8, 2018
99.77 Notice of Annual General and Special Meeting of Shareholders to be held on May 1, 2018, dated March 13, 2018
99.78 News Release announcing Immunovaccine Inc. to host investor event on April 10, 2018 in New York City, dated March 13, 2018
99.79 Amended Notice of Annual General and Special Meeting of Shareholders to be held on May 1, 2018, dated March 14, 2018
99.80 News Release announcing Immunovaccine Inc. researchers to present new preclinical data at AACR annual meeting 2018, dated March 19, 2018
99.81 Annual Information Form for the year ended December 31, 2017
99.82 ON Form 13-502F1 Class 1 and Class 3B Reporting Issuers, dated March 15, 2018
99.83 Consolidated Financial Statements for the years ended December 31, 2017 and 2016
99.84 AB Form 13-501F1 Class 1 and Class 3B Reporting Issuers, dated March 15, 2018

 

 

 

 

99.85 Management’s Report on Financial Position and Operating Results for the year ended December 31, 2017
99.86 Form 52-109F1 CEO and CFO Certifications of Annual Filings for the year ended December 31, 2017
99.87 News Release announcing Immunovaccine Inc.’s year-end 2017 financial results, dated March 20, 2018
99.88 Amended Notice of Annual General and Special Meeting of Shareholders to be held on May 1, 2018, dated March 22, 2018
99.89 News Release announcing Immunovaccine Inc.’s webcast of R&D update and investor event, dated March 27, 2018
99.90 Notice of Annual and Special Meeting of Shareholders to be held on May 1, 2018, dated March 29, 2018
99.91 Notice of Annual and Special Meeting of Shareholders and Management Information Circular, dated March 29, 2018
99.92 Form of Proxy for Annual General and Special Meeting to be held on May 1, 2018
99.93 News Release announcing new preclinical studies based on Immunovaccine Inc.’s proprietary delivery platform, dated April 16, 2018
99.94 News Release announcing Immunovaccine Inc.'s expansion of clinical collaboration with Incyte Corporation in evaluating combination immunotherapies in advanced recurrent ovarian cancer, dated April 24, 2018
99.95 Consent of Independent Auditor – PricewaterhouseCoopers LLP

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Immunovaccine Inc.  
       
  By: /s/ Pierre Labbé  
    Name:  Pierre Labbé  
    Title: Chief Financial Officer  

 

Date: May 1, 2018

 

 

 

Exhibit 99.1

 

Media Release

 

 

FOR IMMEDIATE RELEASE

 

Immunovaccine to Present at 2017 Biotech Showcase Conference

 

Halifax, Nova Scotia January 4, 2017 – Immunovaccine Inc. (TSX: IMV; OTCQX: IMMVF), a clinical stage vaccine and immunotherapy company, today announced that it will participate in the 9th Annual Biotech Showcase Conference in San Francisco, CA. This event takes place January 9–11, 2017, at the Hilton San Francisco Union Square.

 

Chief Executive Officer Frederic Ors is scheduled to present a corporate overview and update on Monday, January 9, at 9:00 a.m. PT in Room 8. The presentation will be available on Immunovaccine’s website at www.imvaccine.com following the meeting.

 

About Immunovaccine

Immunovaccine Inc. is a clinical-stage biopharmaceutical company dedicated to making immunotherapy more effective, more broadly applicable, and more widely available to people facing cancer and infectious diseases. Immunovaccine develops cancer immunotherapies and infectious disease vaccines based on the Company’s DepoVax™ platform, a patented delivery agent that provides controlled and prolonged exposure of antigens and adjuvant to the immune system. Immunovaccine has advanced two T cell activation therapies for cancer through Phase 1 human clinical trials and is currently conducting a Phase 1/1b study with Incyte Corporation assessing lead cancer therapy, DPX-Survivac, as a combination therapy in ovarian cancer, as well as a Phase 2 study in recurrent lymphoma. The Company is also advancing an infectious disease pipeline including innovative vaccines for respiratory syncytial virus (RSV), and currently has clinical projects ongoing to assess the potential of DepoVax™ to address malaria and the Zika virus. Connect at www.imvaccine.com.

 

Contacts for Immunovaccine:

 

MEDIA

Mike Beyer, Sam Brown Inc.

T: (312) 961-2502 E: mikebeyer@sambrown.com

 

INVESTOR RELATIONS

Frederic Ors, Chief Executive Officer

T: (902) 492-1819 E: info@imvaccine.com

 

###

 

 

 

Exhibit 99.2

 

Media Release

 

 

FOR IMMEDIATE RELEASE

 

Immunovaccine to Present at 2017 BIO CEO & Investor Conference

 

Halifax, Nova Scotia February 2, 2017 – Immunovaccine Inc. (TSX: IMV; OTCQX: IMMVF), a clinical stage vaccine and immunotherapy company, today announced that it will participate in this year’s BIO CEO and Investor Conference in New York, NY. This event takes place February 13-14, 2017 at the Waldorf Astoria Hotel.

 

Chief Executive Officer Frederic Ors is scheduled to present a corporate overview and update on Tuesday, February 14, 2017 at 2:00 p.m. ET in the Duke of Windsor room. The presentation will be available on Immunovaccine’s website at www.imvaccine.com following the meeting.

 

Now in its 19th year, the BIO CEO & Investor Conference is one of the largest investor conferences focused on established and emerging publicly traded and select private biotech companies.

 

About Immunovaccine

Immunovaccine Inc. is a clinical-stage biopharmaceutical company dedicated to making immunotherapy more effective, more broadly applicable, and more widely available to people facing cancer and infectious diseases. Immunovaccine develops cancer immunotherapies and infectious disease vaccines based on the Company’s DepoVax™ platform, a patented delivery agent that provides controlled and prolonged exposure of antigens and adjuvant to the immune system. Immunovaccine has advanced two T cell activation therapies for cancer through Phase 1 human clinical trials and is currently conducting a Phase 1/1b study with Incyte Corporation assessing lead cancer therapy, DPX-Survivac, as a combination therapy in ovarian cancer, as well as a Phase 2 study in recurrent lymphoma. The Company is also advancing an infectious disease pipeline including innovative vaccines for respiratory syncytial virus (RSV), and currently has clinical projects ongoing to assess the potential of DepoVax™ to address malaria and the Zika virus. Connect at www.imvaccine.com.

 

Contacts for Immunovaccine:

 

MEDIA

Mike Beyer, Sam Brown Inc.

T: (312) 961-2502 E: mikebeyer@sambrown.com

 

INVESTOR RELATIONS

Frederic Ors, Chief Executive Officer

T: (902) 492-1819 E: info@imvaccine.com

 

###

 

 

 

 

Exhibit 99.3

 

Media Release

 

FOR IMMEDIATE RELEASE

 

Immunovaccine Appoints Seasoned Financial Executive
Pierre Labbé as CFO

 

Halifax, Nova Scotia; February 3, 2017 – Immunovaccine Inc. (“Immunovaccine” or the “Company”) (TSX: IMV; OTCQX: IMMVF), a clinical stage vaccine and immunotherapy company, today announced Pierre Labbé, CPA, CA, ICD, will join the Company as Chief Financial Officer (CFO), effective February 20, 2017. In this role, Mr. Labbé will be responsible for leading the company’s financial strategy and operations, with an emphasis on expanding financing and business development operations as the Company continues to advance its clinical program and expand its pipeline.

 

“We are entering a transformative period of growth at Immunovaccine, and are very pleased to have a financial veteran with Pierre’s experience on our leadership team,” said Frederic Ors, Immunovaccine’s Chief Executive Officer. “His track record includes an ideal combination of financial, operational and strategic leadership, and a proven ability to identify growth opportunities in both life sciences and technology companies. He will be a great fit to lead our financial operations as we continue to advance our immuno-oncology product candidates through the clinic, and expand the applications of our DepoVax™ enabling technology on a global scale.”

 

Mr. Labbé brings to Immunovaccine more than 15 years of experience in the role of chief financial officer, having served in that capacity with, among others, Medicago Inc. and Leddartech Inc. He was an integral part of the team that negotiated the acquisition of Medicago by Mitsubishi Tanabe Pharma in 2013 for an enterprise value of $357 million Canadian dollars. He has also been responsible for numerous rounds of private and public financing, initial public offerings preparation and execution, and establishment of key strategic alliances.

 

“I am very pleased to join Immunovaccine as the Company moves in a forward trajectory,” said Mr. Labbé. “I am excited about the opportunity to work with Fred and his team to bolster the financial and investor base as we continue the important work of improving treatment options for the many unmet medical needs in today’s medical landscape.”

 

 

 

 

Mr. Labbé currently serves on the Boards of Directors of several publicly traded, Canadian-based companies. He earned his Bachelor’s degree from Université Laval, and holds CA and ICD designations.

 

About Immunovaccine

Immunovaccine Inc. is a clinical-stage biopharmaceutical company dedicated to making immunotherapy more effective, more broadly applicable, and more widely available to people facing cancer and infectious diseases. Immunovaccine develops cancer immunotherapies and infectious disease vaccines based on the Company’s DepoVax™ platform, a patented delivery agent that provides controlled and prolonged exposure of antigens and adjuvant to the immune system. Immunovaccine has advanced two T cell activation therapies for cancer through Phase 1 human clinical trials and is currently conducting a Phase 1/1b study with Incyte Corporation assessing lead cancer therapy, DPX-Survivac, as a combination therapy in ovarian cancer, as well as a Phase 2 study in recurrent lymphoma. The Company is also advancing an infectious disease pipeline including innovative vaccines for respiratory syncytial virus (RSV), and currently has clinical projects ongoing to assess the potential of DepoVax™ to address malaria and the Zika virus. Connect at www.imvaccine.com.

 

Immunovaccine Forward-Looking Statements

This press release contains forward-looking information under applicable securities law. All information that addresses activities or developments that we expect to occur in the future is forward-looking information. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. However, they should not be regarded as a representation that any of the plans will be achieved. Actual results may differ materially from those set forth in this press release due to risks affecting the Company, including access to capital, the successful completion of clinical trials and receipt of all regulatory approvals. Immunovaccine Inc. assumes no responsibility to update forward-looking statements in this press release except as required by law.

 

Contacts for Immunovaccine:

 

MEDIA

Mike Beyer, Sam Brown Inc.

T: (312) 961-2502 E: mikebeyer@sambrown.com

 

INVESTOR RELATIONS

Frederic Ors, Chief Executive Officer

T: (902) 492-1819 E: info@imvaccine.com

 

###

 

 

 

Exhibit 99.4

 

Media Release

 

 

FOR IMMEDIATE RELEASE

 

Immunovaccine’s Lead Immuno-Oncology Candidate to Enter
Investigator-Sponsored Phase 2 Clinical Trial in Ovarian Cancer
in Combination with Approved Anti-PD-1 Drug

 

University Health Network (UHN) in Toronto to Launch Triple-Combination Study Evaluating the Potential for Enhanced Anti-Cancer Activity of Currently Marketed Checkpoint Inhibitor When Combined with DPX-Survivac

 

Halifax, Nova Scotia; February 6, 2017 – Immunovaccine Inc. (TSX: IMV; OTCQX: IMMVF), a clinical stage immuno-oncology company, today announced that the UHN’s Princess Margaret Cancer Centre (PM) will conduct a Phase 2 clinical trial to evaluate the use of a combination of immunotherapies from Immunovaccine and Merck (known as MSD outside the United States and Canada).

 

Clinical investigators will assess the safety and efficacy of Immunovaccine’s DPX-Survivac cancer vaccine candidate in combination with Merck’s checkpoint inhibitor Pembrolizumab in patients with recurrent, platinum-resistant ovarian cancer. Study participants will also receive metronomic cyclophosphamide, which is a low-dose regimen with immuno-modulating effects. PM listed the trial on www.clinicaltrials.gov and expects to initiate active enrollment following completion of the contract between Immunovaccine and UHN, and pending regulatory clearance from Health Canada.

 

“Ovarian cancer is a main focus for Immunovaccine as we continue to develop DPX-Survivac,” said Frederic Ors, Immunovaccine’s Chief Executive Officer. “Combination therapies — particularly those with anti-PD-1 activity — are emerging as increasingly promising approaches for hard-to-treat cancers. We believe that the robust immunogenic and safety clinical profile for DPX-Survivac, along with its unique complementary activity to anti-PD-1 agents, which may boost their response rates, position our immuno-oncology candidate as an optimal co-therapy in this disease area.”

 

The non-randomized, open-label trial is designed to evaluate the potential anti-tumor activity of the combination of Pembrolizumab, DPX-Survivac, and low-dose cyclophosphamide. It is expected to enroll 42 subjects with advanced epithelial ovarian, fallopian tube or primary peritoneal cancer. The study’s primary objective is to assess overall response rate (ORR). Secondary study objectives include progression free survival (PFS) rate, overall survival (OS) rate, and potential side effects, over a five-year period.

 

 

 

 

Amit M. Oza, Bsc (Hons), MBBS (Lon), MD (Lon), FRCPC, FRCP, Senior Staff Physician and Associate Professor of Medicine at PM is the lead investigator. Merck is funding this study and contributing materials. Immunovaccine is also contributing its product candidate as well as a related portion of analytical assays.

 

“Ovarian cancer is among the most challenging cancers to treat, as it is associated with poor response rates to currently available medical interventions,” said Dr. Oza. “To support the tens of thousands of women battling this disease, we need to develop new and novel approaches. With this trial, we have the opportunity to explore a novel combination of promising immunotherapies.”

 

DPX-Survivac is Immunovaccine’s lead immuno-oncology candidate, generated by its novel proprietary DepoVax™ adjuvanting technology platform. The DPX-Survivac target, survivin, is present in more than 20 types of solid tumor and hematologic cancers. It is involved in multiple critical pathways of cancer cell growth and survival. Prior results from a Phase 1/1b study indicated that DPX-Survivac combined with a low dose of cyclophosphamide was highly immunogenic in individuals with high-risk ovarian cancer, inducing survivin-specific T cell immune responses in most trial participants.

 

The company has shown in other studies that a combination immunotherapy using a DepoVax™-based vaccine could enhance the anti-tumor effects of a PD-1 blockade. Even tumors previously non-responsive to treatment with anti-PD-1 agents alone exhibited controlled cancer growth when combined with Immunovaccine’s DepoVax™-based compound.

 

In addition to this Phase 2 trial, Immunovaccine is conducting a Phase 1b trial with Incyte Corporation to evaluate the triple combination of DPX-Survivac with Incyte’s investigational oral indoleamine 2,3-dioxygenase 1 (IDO1) inhibitor, Epacadostat (INCB24360), and low-dose oral cyclophosphamide in patients with platinum sensitive or resistant ovarian cancer. Immunovaccine expects to announce top-line interim results for this Phase 1b trial by the end of March 2017.

 

About DPX-Survivac

DPX-Survivac consists of survivin-based peptide antigens formulated in the DepoVax™ adjuvanting platform. The National Cancer Institute (NCI) has recognized survivin as a promising tumor-associated antigen (TAA) because of its therapeutic potential and its cancer specificity. Survivin is broadly over-expressed in multiple cancer types in addition to ovarian cancer, including breast, colon and lung cancers. Survivin plays an essential role in antagonizing cell death, supporting tumor-associated angiogenesis, and promoting resistance to anti-cancer therapies. Survivin is also a prognostic factor for many cancers and it is found in a higher percentage of tumors than other TAA’s.

 

 

 

 

The DPX-Survivac vaccine is thought to work by eliciting a cytotoxic T-cell immune response against cells presenting survivin peptides. This targeted therapy attempts to use the immune system to search actively and specifically for tumor cells and destroy them. Survivin-specific T-cells have been shown to target and kill survivin-expressing cancer cells while sparing normal cells.

 

DPX-Survivac received Fast Track designation by the FDA as maintenance therapy in individuals with advanced ovarian, fallopian tube, and peritoneal cancer who have no measureable disease following surgery and front-line platinum/taxane chemotherapy to improve their progression-free survival. The FDA also granted orphan drug status to DPX-Survivac for the treatment of ovarian cancer. This designation is valid for all applications of DPX-Survivac in ovarian cancer without restriction to a specific stage of disease.

 

About the Princess Margaret Cancer Centre of the Toronto Hospital

The Princess Margaret Cancer Centre has achieved an international reputation as a global leader in the fight against cancer and delivering personalized cancer medicine. The Princess Margaret, one of the top five international cancer research centres, is a member of the University Health Network, which also includes Toronto General Hospital, Toronto Western Hospital, Toronto Rehabilitation Institute and the Michener Institute for Education; all affiliated with the University of Toronto. For more information, go to www.theprincessmargaret.ca or www.uhn.ca.

 

About Immunovaccine

Immunovaccine Inc. is a clinical-stage biopharmaceutical company dedicated to making immunotherapy more effective, more broadly applicable, and more widely available to people facing cancer and infectious diseases. Immunovaccine develops cancer immunotherapies and infectious disease vaccines based on the Company’s DepoVax™ platform, a patented delivery agent that provides controlled and prolonged exposure of antigens and adjuvant to the immune system. Immunovaccine has advanced two T cell activation therapies for cancer through Phase 1 human clinical trials and is currently conducting a Phase 1b study with Incyte Corporation assessing lead cancer therapy, DPX-Survivac, as a combination therapy in ovarian cancer, as well as a Phase 2 study in recurrent lymphoma. The Company is also advancing an infectious disease pipeline including innovative vaccines for respiratory syncytial virus (RSV) and currently has clinical projects ongoing to assess the potential of DepoVax™ to address malaria and the Zika virus. Connect at www.imvaccine.com.

 

 

 

 

Immunovaccine Forward-Looking Statements

This press release contains forward-looking information under applicable securities law. All information that addresses activities or developments that we expect to occur in the future is forward-looking information. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. However, they should not be regarded as a representation that any of the plans will be achieved. Actual results may differ materially from those set forth in this press release due to risks affecting the Company, including access to capital, the successful completion of clinical trials and receipt of all regulatory approvals. Immunovaccine Inc. assumes no responsibility to update forward-looking statements in this press release except as required by law.

 

Contacts for Immunovaccine:

 

MEDIA

Mike Beyer, Sam Brown Inc.

T: (312) 961-2502 E: mikebeyer@sambrown.com

 

INVESTOR RELATIONS

Frederic Ors, Chief Executive Officer

T: (902) 492-1819 E: info@imvaccine.com

 

###

 

 

 

Exhibit 99.5

 

February 17, 2017

1500 Robert-Bourassa Blvd., 7th Floor
Montreal QC, H3A 3S8
www.computershare.com

 

To: All Canadian Securities Regulatory Authorities

 

Subject: IMMUNOVACCINE INC

 

Dear Sir/Madam:

 

We advise of the following with respect to the upcoming Meeting of Security Holders for the subject Issuer:

 

Meeting Type :   Annual General and Special Meeting
Record Date for Notice of Meeting :   March 16, 2017  
Record Date for Voting (if applicable) :   March 16, 2017  
Beneficial Ownership Determination Date :   March 16, 2017  
Meeting Date :   April 20, 2017  
Meeting Location (if available) :   Halifax, Nova Scotia
Issuer sending proxy related materials directly to NOBO: Yes  
Issuer paying for delivery to OBO:   Yes  
       
Notice and Access (NAA) Requirements:      
NAA for Beneficial Holders   No  
NAA for Registered Holders   No  
       
Voting Security Details:      
     
Description CUSIP Number ISIN
COMMON SHARES 45254B103   CA45254B1031

 

Sincerely,
 
Computershare  
Agent for IMMUNOVACCINE INC

 

 

 

Exhibit 99.6

 

March 17, 2017

 

1500 Robert-Bourassa Blvd., 7th Floor
Montreal QC, H3A 3S8
www.computershare.com

 

To: All Canadian Securities Regulatory Authorities

 

Subject: IMMUNOVACCINE INC. AMENDED

 

Dear Sir/Madam:

 

We advise of the following with respect to the upcoming Meeting of Security Holders for the subject Issuer:

 

Meeting Type :   Annual General and Special Meeting
Record Date for Notice of Meeting :   March 16, 2017  
Record Date for Voting (if applicable) :   March 16, 2017  
Beneficial Ownership Determination Date :   March 16, 2017  
Meeting Date :   May 10, 2017  
Meeting Location (if available) :   Halifax, NS  
Issuer sending proxy related materials directly to NOBO: Yes  
Issuer paying for delivery to OBO:   Yes  
       
Notice and Access (NAA) Requirements:      
NAA for Beneficial Holders   No  
NAA for Registered Holders   No  
       
Voting Security Details:      
     
Description CUSIP Number ISIN
COMMON SHARES 45254B103   CA45254B1031
COMMON SHARES US 1933 LEGENDED C4578J109   CAC4578J1092
COMMON DATED LEG EXP OCT 09/16 45254B509 CA45254B5099
COMMON DATED LEG EXP APR/10/17 45254B707 CA45254B7079

 

Sincerely,
 
Computershare  
Agent for IMMUNOVACCINE INC

 

 

 

Exhibit 99.7

 

Media Release

 

 

FOR IMMEDIATE RELEASE

 

Immunovaccine to Present New Pre-clinical Combination
Therapy Data at the AACR Annual Meeting

 

Study Designed to Assess Synergies of Combining DepoVax™-based Cancer
Vaccines and Novel Monoclonal Antibody Immunotherapies

 

Halifax, Nova Scotia; March 24, 2017 – Immunovaccine Inc. (TSX: IMV; OTCQX: IMMVF), a clinical stage immuno-oncology company, today announced that new pre-clinical data on DepoVax™-based cancer vaccines will be presented at the American Association for Cancer Research (AACR) Annual Meeting 2017, which will be held in Washington, D.C., from April 1-5.

 

Immunovaccine conducted this research in collaboration with Peregrine Pharmaceuticals (NASDAQ: PPHM) with the goal of analyzing the potential enhanced anti-cancer activity of combining DepoVax™-based cancer immunotherapies with Peregrine’s lead clinical product candidate bavituximab, an investigational chimeric monoclonal antibody that targets phosphatidylserine (PS).

 

Details of the presentation are as follows:

 

Title: Phosphatidylserine-Targeting Antibodies Enhance Anti-tumor Activity of a Tumor Vaccine in a HPV-Induced Tumor Model

Date and time: Tuesday, April 4, 8:00 AM – 12:00 PM ET

Abstract number: 3657

Location: Section 26

Poster board number: 30

Immunovaccine Director of Research Dr. Genevieve Weir will present data analyzing the potential for enhanced anti-tumor responses of PS and PD-1 targeting antibody therapies when combined with an HPV16 peptide vaccine formulated in Immunovaccine’s proprietary DepoVax™ technology.

 

“Our work with Peregrine, and the research it has produced, fits squarely into our corporate objective of exploring clinical stage immunotherapies that may have synergistic effects when combined with our lead candidate, DPX-Survivac,” said Marianne Stanford, PhD Vice President, Research for Immunovaccine “We look forward to discussing the results of this study, and its potential implications, with our colleagues in the scientific community at this year’s AACR meeting.”

 

 

 

 

About Immunovaccine

Immunovaccine Inc. is a clinical-stage biopharmaceutical company dedicated to making immunotherapy more effective, more broadly applicable, and more widely available to people facing cancer and infectious diseases. Immunovaccine develops T cell activating cancer immunotherapies and infectious disease vaccines based on DepoVax™, the Company’s patented platform that provides controlled and prolonged exposure of antigens and adjuvant to the immune system. Immunovaccine has advanced two T cell activation therapies for cancer through Phase 1 human clinical trials and is currently conducting a Phase 1b study with Incyte Corporation assessing lead cancer therapy, DPX-Survivac, as a combination therapy in ovarian cancer. An investigator-sponsored Phase 2 study is currently assessing the safety and efficacy of DPX-Survivac combined with an approved anti-PD-1 drug in advanced ovarian cancer. The Company is also exploring additional applications of DepoVax™, including DPX-RSV, an innovative vaccine candidate for respiratory syncytial virus (RSV), which has recently completed a Phase 1 clinical trial. The Company also has ongoing clinical projects to assess the potential of DepoVax™ to address malaria and the Zika virus. Connect at www.imvaccine.com.

 

Immunovaccine Forward-Looking Statements

This press release contains forward-looking information under applicable securities law. All information that addresses activities or developments that we expect to occur in the future is forward-looking information. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. However, they should not be regarded as a representation that any of the plans will be achieved. Actual results may differ materially from those set forth in this press release due to risks affecting the Company, including access to capital, the successful completion of clinical trials and receipt of all regulatory approvals. Immunovaccine Inc. assumes no responsibility to update forward-looking statements in this press release except as required by law.

 

Contacts for Immunovaccine:

 

MEDIA

Mike Beyer, Sam Brown Inc.

T: (312) 961-2502 E: mikebeyer@sambrown.com

 

INVESTOR RELATIONS

Pierre Labbe, Chief Financial Officer

T: (902) 492-1819 E: info@imvaccine.com

 

###

 

 

 

Exhibit 99.8

 

Media Release

 

FOR IMMEDIATE RELEASE

 

Immunovaccine Announces Positive Interim Clinical Data from Ovarian
Cancer Study of DPX-Survivac in Combination with Epacadostat

 

Preliminary Analysis Supports the Ability of Immunovaccine’s Lead
Candidate to Induce T-Cell Infiltration

 

Early Data Reflect Tolerability and Clinical Potential of the Triple
Combination Immunotherapy in Recurrent Ovarian Cancer

 

Halifax, Nova Scotia; March 29, 2017 – Immunovaccine Inc. (“Immunovaccine” or the “Company”) (TSX: IMV; OTCQX: IMMVF), a clinical stage vaccine and immunotherapy company, today announced the first interim data analysis from its ongoing Phase 1b clinical study of its novel T-cell activating immuno-oncology candidate, DPX-Survivac, in combination with epacadostat and low-dose cyclophosphamide. The analysis included the results of blood tests, tumor biopsies and CT scans to assess safety, disease progression and T-cell response for the first four evaluable patients in the trial.

 

All patients enrolled in the trial have recurrent ovarian cancer with evidence of progressive disease. Based on the interim analysis, the combination therapy appears to have an acceptable safety profile, with a single grade 3 and single grade 4 event reported and no serious adverse events (SAEs) reported.

 

At the time of the interim analysis, three of four patients exhibited stable disease, while a fourth patient continued to progress and discontinued the trial. In addition, researchers observed:

·Signs of increased T cell activity in tumors in three of the four patients based on RNA sequencing
·Stable disease with signs of tumor shrinkage in the patient who has been in trial for the longest duration thus far (based on CT scan at day 140)

 

“We are very encouraged by these early data, which are tremendously important to Immunovaccine, as they help to validate the underlying clinical potential of DPX-Survivac,” said Frederic Ors, Immunovaccine’s Chief Executive Officer. “Research is consistently demonstrating that activating T cells is a crucial mechanism to improving tumor response ratesi. This desired mechanism of action is exactly what we have developed DPX-Survivac to address, and this data set has provided an encouraging first clinical demonstration of this effect.”

 

 

 

 

Immunovaccine is developing DPX-Survivac as a combination therapy that can significantly expand the range of cancers successfully treatable by novel immunotherapeutic agents. Emerging data from other studies have shown limited clinical efficacy of checkpoint inhibitor monotherapy in ovarian cancer, with response rates ranging from 10–15 percent.ii

 

Phase 1b Trial and Early Data

 

The Phase 1b company-sponsored clinical trial is a single-arm, open-label study of patients who have been diagnosed with platinum-resistant and sensitive ovarian cancer, and who have completed first-line treatment with measurable disease. Investigators plan to enroll up to 40 participants at up to ten sites in the U.S. and Canada. The study’s primary objective is to assess the safety and immunogenicity of the treatment, and to determine changes in the immune cell infiltration into tumors. Secondary objectives include objective response rate, duration of response, and time to progression.

 

Investigators are evaluating patients over a 12-month treatment schedule, collecting biopsy and blood samples before and after treatment. In addition, investigators are performing CT scans at the outset for each patient, repeating the scans every two months to evaluate status of the disease and to assess potential clinical benefit.

 

In addition to the early findings related to disease progression and the presence of survivin-antigen specific CD8+ T cells in the blood, analysis of the tumor revealed increases in multiple T cell markers, including cytotoxic markers and checkpoint inhibitor molecules.

 

“This readout, while from a limited number of patients, is important as it marks the first time DPX-Survivac has been tested in active progressive disease, where we can formally look at its impact on tumor progression and the tumor microenvironment, as well as assess potential clinical benefit,” said Marianne Stanford, PhD, Vice President, Research, at Immunovaccine. “The data set thus far has provided a preliminary indication of DPX-Survivac’s ability to induce T-cell infiltration in the tumor micro-environment. We are very encouraged by this information, and we look forward to the next opportunity to analyze the data and their related implications for this clinical program.”

 

Immunovaccine expects to complete enrollment and issue topline data by the end of 2017. Patients interested in enrolling in this trial can find more information via clinicaltrials.gov.

 

This triple combination study is the result of a collaboration between Immunovaccine and Incyte Corporation to assess the safety and effectiveness of DPX-Survivac, along with epacadostat, an investigational oral indoleamine 2,3-dioxygenase 1 (IDO1) enzyme inhibitor, and low-dose cyclophosphamide in patients with recurrent ovarian cancer who have measurable disease.

 

 

 

 

About Ovarian Cancer

According to the American Cancer Society (ACS)iii, ovarian cancer ranks fifth in cancer deaths among women, accounting for more deaths than any other cancer of the female reproductive system. Often diagnosed in its advanced stages, about 21,290 women received a new diagnosis of ovarian cancer in 2015; approximately 14,180 women would die from the disease, according to ACS estimates.

 

Ovarian cancer has a significant impact globally as well. The World Cancer Research Fundiv reports that ovarian cancer is the seventh most common cancer in women worldwide (18 most common cancer overall), with 239,000 new cases diagnosed in 2012.

 

About DPX-Survivac

DPX-Survivac consists of survivin-based peptide antigens formulated in the DepoVax™ platform, which is a patented formulation that provides controlled and prolonged exposure of antigens to the immune system, resulting in a strong, specific and sustained immune response. The National Cancer Institute (NCI) has recognized survivin as a promising tumor-associated antigen (TAA) because of its therapeutic potential and its cancer specificity. Survivin is broadly over-expressed in multiple cancer types in addition to ovarian cancer, including breast, colon and lung cancers. Survivin plays an essential role in antagonizing cell death, supporting tumor-associated angiogenesis, and promoting resistance to anti-cancer therapies. Survivin is also a prognostic factor for many cancers and it is found in a higher percentage of tumors than other TAA’s.

 

The DPX-Survivac vaccine is thought to work by eliciting a cytotoxic T-cell immune response against cells presenting survivin peptides. This targeted therapy attempts to use the immune system to search actively and specifically for tumor cells and destroy them. Survivin-specific T-cells have been shown to target and kill survivin-expressing cancer cells while sparing normal cells.

 

DPX-Survivac has been granted Fast Track designation by the U.S. FDA as maintenance therapy in individuals with advanced ovarian, fallopian tube, and peritoneal cancer who have no measureable disease following surgery and front-line platinum/taxane chemotherapy to improve their progression-free survival.

 

 

 

 

About Epacadostat (INCB24360)

Indoleamine 2,3-dioxygenase 1 (IDO1) is a key immunosuppressive enzyme that modulates the anti-tumor immune response by promoting regulatory T-cell generation and blocking effector T-cell activation, thereby facilitating tumor growth by allowing cancer cells to avoid immune surveillance. Epacadostat is a first-in-class, highly potent and selective oral inhibitor of the IDO1 enzyme that reverses tumor-associated immune suppression and restores effective anti-tumor immune responses. In single-arm studies, the combination of epacadostat and immune checkpoint inhibitors has shown proof-of-concept in patients with unresectable or metastatic melanoma. In these studies, epacadostat combined with the CTLA-4 inhibitor ipilimumab or the PD-1 inhibitor pembrolizumab improved response rates compared with studies of the immune checkpoint inhibitors alone. A Phase 3 study, ECHO -301, evaluating the combination of epacadostat with the anti-PD-1 antibody pembrolizumab for the first-line treatment of patients with advanced or metastatic melanoma is underway. Ongoing Phase 1 and Phase 2 studies are also investigating epacadostat in combination with PD-1 and PD-L1 inhibitors in a variety of other cancer histologies.

 

About Immunovaccine

Immunovaccine Inc. is a clinical-stage biopharmaceutical company dedicated to making immunotherapy more effective, more broadly applicable, and more widely available to people facing cancer and infectious diseases. Immunovaccine develops T-cell activating cancer immunotherapies and infectious disease vaccines based on DepoVax™, the Corporation’s patented platform that provides controlled and prolonged exposure of antigens and adjuvant to the immune system. Immunovaccine has advanced two T-cell activation therapies for cancer through Phase 1 human clinical trials and is currently conducting a Phase 1b study with Incyte Corporation assessing its lead cancer therapy, DPX-Survivac, as a combination therapy in ovarian cancer. An investigator-sponsored Phase 2 study will assess the safety and efficacy of DPX-Survivac and low dose cyclophosphamide combined with an approved anti-PD-1 drug in advanced ovarian cancer. The Corporation is also exploring additional applications of DepoVax™, including DPX-RSV, an innovative vaccine candidate for respiratory syncytial virus (RSV), which has recently completed a Phase 1 clinical trial. Immunovaccine also has ongoing clinical projects to assess the potential of DepoVax™ to address malaria and the Zika virus. Connect at www.imvaccine.com.

 

Immunovaccine Forward-Looking Statements

This press release contains forward-looking information under applicable securities law. All information that addresses activities or developments that we expect to occur in the future is forward-looking information. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. However, they should not be regarded as a representation that any of the plans will be achieved. Actual results may differ materially from those set forth in this press release due to risks affecting the Corporation, including access to capital, the successful completion of clinical trials and receipt of all regulatory approvals and the matters discussed under “Risk Factors and Uncertainties” in Immunovaccine’s Annual Information Form filed on Sedar. Immunovaccine Inc. assumes no responsibility to update forward-looking statements in this press release except as required by law.

 

 

 

 

###

 

Contacts for Immunovaccine:

 

MEDIA

Mike Beyer, Sam Brown Inc.

T: (312) 961-2502 E: mikebeyer@sambrown.com

 

INVESTOR RELATIONS

Pierre Labbé, Chief Financial Officer

T: (902) 492-1819 E: Plabbe@imvaccine.com

 

Patti Bank, Managing Director, Westwicke Partners

O: (415) 513-1284

T: (415) 515-4572 E: patti.bank@westwicke.com

 

 

i Patrick A. Ott, F. Stephen Hodi, Howard L. Kaufman, Jon M. Wigginton and Jedd D. Wolchok. Combination immunotherapy: a road map. Journal for ImmunoTherapy of Cancer (2017). 5:16 DOI 10.1186/s40425-017-0218-5

ii Gaillard SL, Secord AA, Monk B. 2016. The role of immune checkpoint inhibition in the treatment of ovarian cancer. Gynecologic Oncology Research and Practice. (3)11. DOI: 10.1186/s40661-016-0033-6

iii What Are the Key Statistics about Ovarian Cancer?” Cancer.org. The American Cancer Society, 12 Mar. 2015. Web. Accessed 29 Dec. 2015.

iv “Ovarian Cancer Statistics.” Cancer Facts and Figures – Data on Specific Cancers. World Cancer Research Fund International. Web. Accessed 29 Dec. 2015.

 

 

 

Exhibit 99.9

 

FORM 13-502F1

CLASS 1 AND CLASS 3B REPORTING ISSUERS – PARTICIPATION FEE

 

 

 

MANAGEMENT CERTIFICATION

 

I, Pierre Labbé, an officer of the reporting issuer noted below have examined this Form 13-502F1 (the Form) being submitted hereunder to the Ontario Securities Commission and certify that to my knowledge, having exercised reasonable diligence, the information provided in the Form is complete and accurate.

 
     

  /s/ Pierre Labbé      
  Name: Pierre Labbé   Date: March 30, 2017  
  Title: Chief Financial Officer      
         

 

Reporting Issuer Name: Immunovaccine Inc.  
     
End date of last completed fiscal year: December 31, 2016  

 

Type of Reporting Issuer: x Class 1 reporting issuer ¨ Class 3B reporting issuer

 

Highest Trading Marketplace: Toronto Stock Exchange  

(refer to the definition of “highest trading marketplace” under OSC Rule 13-502 Fees)

 

Market value of listed or quoted securities:

(in Canadian Dollars – refer to section 7.1 of OSC Rule 13-502 Fees)

   
     
Equity Symbol IMV  
     

1st Specified Trading Period (dd/mm/yy)

(refer to the definition of “specified trading period” under OSC Rule 13-502 Fees)

01/01/2016 to 31/03/2016

 

Closing price of the security in the class or series on the last trading day of the specified trading period in which such security was listed or quoted on the highest trading marketplace   $ 0.44
      (i)
       
Number of securities in the class or series of such security outstanding at the end of the last trading day of the specified trading period     92,075,670
      (ii)
       
Market value of class or series (i) x (ii) $ 40,513,294.80
      (A)
       

2nd Specified Trading Period (dd/mm/yy)

(refer to the definition of “specified trading period” under OSC Rule 13-502 Fees)

01/04/2016 to 30/06/2016
       
Closing price of the security in the class or series on the last trading day of the specified trading period in which such security was listed or quoted on the highest trading marketplace   $ 0.62
      (iii)
       
Number of securities in the class or series of such security outstanding at the end of the last trading day of the specified trading period     106,773,790
      (iv)
       
Market value of class or series (iii) x (iv) $ 66,199,749.80
      (B)

 

   

 

 

FORM 13-502F1

CLASS 1 AND CLASS 3B REPORTING ISSUERS – PARTICIPATION FEE

 

 

 

MANAGEMENT CERTIFICATION

 

I, [To be completed], an officer of the reporting issuer noted below have examined this Form 13-502F1 (the Form) being submitted hereunder to the Ontario Securities Commission and certify that to my knowledge, having exercised reasonable diligence, the information provided in the Form is complete and accurate.

 
     

  (s)      

         
         
  Name: [To be completed]   Date: March ·, 2017  
  Title: [To be completed]      
         

 

Reporting Issuer Name: Immunovaccine Inc.  
     
End date of last completed fiscal year: December 31, 2016  

 

Type of Reporting Issuer: x Class 1 reporting issuer ¨ Class 3B reporting issuer

 

Highest Trading Marketplace: Toronto Stock Exchange  

(refer to the definition of “highest trading marketplace” under OSC Rule 13-502 Fees)

 

Market value of listed or auoted securities:

(in Canadian Dollars – refer to section 7.1 of OSC Rule 13-502 Fees)

     
       
Equity Symbol IMV    
       

1st Specified Trading Period (dd/mm/yy)

(refer to the definition of “specified trading period” under OSC Rule 13-502 Fees)

01/01/2016 to 31/03/2016

 

Closing price of the security in the class or series on the last trading day of the specified trading period in which such security was listed or quoted on the highest trading marketplace   $ 0.44
      (i)
       
Number of securities in the class or series of such security outstanding at the end of the last trading day of the specified trading period     92,075,670
      (ii)
       
Market value of class or series (i) x (ii) $ 40,513,294.80
      (A)
       

2nd Specified Trading Period (dd/mm/yy)

(refer to the definition of “specified trading period” under OSC Rule 13-502 Fees)

01/04/2016 to 30/06/2016
       
Closing price of the security in the class or series on the last trading day of the specified trading period in which such security was listed or quoted on the highest trading marketplace   $ 0.62
      (iii)
       
Number of securities in the class or series of such security outstanding at the end of the last trading day of the specified trading period     106,773,790
      (iv)
       
Market value of class or series (iii) x (iv) $ 66,199,749.80
      (B)

 

   

 

 

3rd Specified Trading Period (dd/mm/yy)

(refer to the definition of “specified trading period” under OSCRule 13-502 Fees)

01/07/2016 to 30/09/2016
       
Closing price of the security in the class or series on the last trading day of the specified trading period in which such security was listed or quoted on the highest trading marketplace   $ 0.73
      (v)
       
Number of securities in the class or series of such security outstanding at the end of the last trading day of the specified trading period     106,861,508
      (vi)
       
Market value of class or series (v) x (vi) $ 78,008,900.84
      (C)
       

4th Specified Trading Period (dd/mm/yy)

(refer to the definition of “specified trading period” under OSC Rule 13-502 Fees)

01/10/2016 to 31/12/2016
       
Closing price of the security in the class or series on the last trading day of the specified trading period in which such security was listed or quoted on the highest trading marketplace   $ 0.68
      (vii)
       
Number of securities in the class or series of such security outstanding at the end of the last trading day of the specified trading period     117,815,405
      (viii)
       
Market value of class or series (vii) x (viii) $ 80,114,475.40
      (D)
       

5th Specified Trading Period (dd/mm/yy)

(if applicable – refer to the definition of “specified trading period” under OSC Rule 13-502 Fees)

to
       
Closing price of the security in the class or series on the last trading day of the specified trading period in which such security was listed or quoted on the highest trading marketplace   $ N/A
      (ix)
       
Number of securities in the class or series of such security outstanding at the end of the last trading day of the specified trading period     N/A
      (x)
       
Market value of class or series (ix) x (x) $ N/A
      (E)
       

Average Market Value of Class or Series

(Calculate the simple average of the market value of the class or series of security for each applicable specified trading period (i.e. A through E above))

  $ 66,209,105.21
      (1)

 

(Repeat the above calculation for each other class or series of equity securities of the reporting issuer (and a subsidiary pursuant to paragraph 2.8(1)(c) of OSC Rule 13-502 Fees, if applicable) that was listed or quoted on a marketplace at the end of the previous financial year)

 

Fair value of outstanding debt securities:

(See paragraph 2.8(1)(b), and if applicable, paragraph 2.8(1)(c) of OSC Rule 13-502 Fees)

  $ N/A
      (2)
(Provide details of how value was determined)      
       
Capitalization for the previous financial year (1) + (2) $ 66,209,105.21

 

   

 

 

Participation Fee      
(For Class 1 reporting issuers, from Appendix A of OSC Rule 13-502 Fees, select the participation fee)   $ 6,390.00
       
(For Class 3B reporting issuers, from Appendix A.1 of OSC Rule 13-502 Fees, select the participation fee)      
       

Late Fee, if applicable

(As determined under section 2.7 of OSC Rule 13-502 Fees)

  $ N/A
       

Total Fee Payable

(Participation Fee plus Late Fee)

  $ 6,390.00

 

   

 

 

Exhibit 99.10

 

 

Consolidated Financial Statements

December 31, 2016

 

 

 

 

March 30, 2017

 

Management’s Responsibility for Financial Reporting

 

The accompanying consolidated financial statements of Immunovaccine Inc. (the “Corporation”) are the responsibility of management and have been approved by the Board of Directors. The consolidated financial statements have been prepared by management in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The consolidated financial statements include some amounts and assumptions based on management’s best estimates which have been derived with careful judgment.

 

In fulfilling its responsibilities, management has developed and maintains a system of internal accounting controls. These controls are designed to ensure that the financial records are reliable for preparation of the consolidated financial statements. The Audit Committee of the Board of Directors reviewed and approved the Corporation’s consolidated financial statements, and recommended their approval by the Board of Directors.

 

(signed) “Frederic Ors (signed) “Pierre Labbé”
Chief Executive Officer Chief Financial Officer

 

 

 

 

 

March 30, 2017

 

Independent Auditor’s Report

 

To the Shareholders of Immunovaccine Inc.

 

We have audited the accompanying consolidated financial statements of Immunovaccine Inc. and its subsidiary, which comprise the consolidated statements of financial position as at December 31, 2016 and December 31, 2015 and the consolidated statements of changes in equity, loss and comprehensive loss and cash flows for the years then ended and the related notes, which comprise a summary of significant accounting policies and other explanatory information.

 

Management’s responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

 

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

 

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

 

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Immunovaccine Inc. and its subsidiary as at December 31, 2016 and December 31, 2015 and their financial performance and cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

 

(signed) “PricewaterhouseCoopers LLP”

 

Chartered Professional Accountants, Licensed Public Accountants

 

 PricewaterhouseCoopers LLP

Summit Place, 1601 Lower Water Street, Suite 400, Halifax, Nova Scotia, Canada B3J 3P6

T: +1 (902) 491 7400, F: +1 (902) 422 1166

 

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

  

 

 

 

Immunovaccine Inc.
Consolidated Statements of Financial Position
As at December 31, 2016 and 2015

 

(Expressed in Canadian dollars)

 

   2016   2015 
   $   $ 
Assets          
           
Current assets          
Cash and cash equivalents   13,546,899    3,842,408 
Amounts receivable (note 4)   268,765    328,868 
Prepaid expenses   469,261    226,965 
Investment tax credits receivable   500,108    1,048,946 
           
    14,785,033    5,447,187 
           
Intangible asset (note 5)       207,173 
           
Property and equipment (note 6)   315,843    297,708 
           
    15,100,876    5,952,068 
           
Liabilities          
           
Current liabilities          
Accounts payable and accrued liabilities (note 7)   1,705,289    1,909,755 
Amounts due to directors (note 8)   40,101    57,084 
Deferred revenue       138,635 
Current portion of long-term debt (note 9)   57,627    59,196 
           
    1,803,017    2,164,670 
           
Deferred share units (note 20)   224,250     
           
Long-term debt (note 9)   6,090,400    3,718,040 
           
    8,117,667    5,882,710 
           
Equity   6,983,209    69,358 
           
Commitments (note 16)   15,100,876    5,952,068 

 

The accompanying notes form an integral part of these consolidated financial statements.

 

Approved on behalf of the Board of Directors

 

(signed) “James W. Hall”, Director (signed) “Wayne Pisano”, Director

 

 

 

 

Immunovaccine Inc.
Consolidated Statements of Changes in Equity
For the years ended December 31, 2016 and 2015

 

(Expressed in Canadian dollars)

 

   Share   Contributed             
   Capital   Surplus   Warrants   Deficit   Total 
   $   $   $   $   $ 
   (note 10)   (note 11)   (note 12)         
Balance, December 31, 2014   43,274,716    4,883,103    777,852    (41,121,828)   7,813,843 
                          
Net loss and comprehensive loss for the year               (8,774,849)   (8,774,849)
Exercise of warrants   121,707        (24,477)       97,230 
Employee share options:                         
Value of services recognized       845,817            845,817 
Exercise of options   204,134    (116,817)           87,317 
                          
Balance, December 31, 2015   43,600,557    5,612,103    753,375    (49,896,677)   69,358 
                          
Net loss and comprehensive loss for the year               (8,895,821)   (8,895,821)
Issuance of shares in private placements   15,566,000                15,566,000 
Share issuance costs   (1,479,912)               (1,479,912)
Issuance of warrants in a private placement           436,500        436,500 
Warrant issuance costs           (40,912)       (40,912)
Issuance of broker warrants           268,710        268,710 
Exercise of warrants   50,700        (3,900)       46,800 
Expiry of warrants       753,375    (753,375)        
Employee share options:                         
Value of services recognized       812,501            812,501 
Exercise of options   416,918    (216,933)           199,985 
                          
Balance, December 31, 2016   58,154,263    6,961,046    660,398    (58,792,498)   6,983,209 

 

The accompanying notes form an integral part of these consolidated financial statements.

 

 

 

 

Immunovaccine Inc.
Consolidated Statements of Loss and Comprehensive Loss
For the years ended December 31, 2016 and 2015

 

(Expressed in Canadian dollars)

 

   2016   2015 
   $   $ 
Revenue   129,703    129,702 
           
Expenses          
General and administrative   3,165,448    2,709,948 
Research and development   3,481,043    4,570,047 
Business development and investor relations   678,323    1,223,171 
Impairment loss   194,987     
Accreted interest (note 9)   1,505,723    401,385 
           
    9,025,524    8,904,551 
           
Net loss and comprehensive loss for the year   (8,895,821)   (8,774,849)
           
Basic and diluted loss per share   (0.09)   (0.10)
           
Weighted-average shares outstanding   101,128,759    91,873,227 

 

The accompanying notes form an integral part of these consolidated financial statements.

 

 

 

 

Immunovaccine Inc.
Consolidated Statements of Cash Flows
For the years ended December 31, 2016 and 2015

 

(Expressed in Canadian dollars)

 

   2016   2015 
   $   $ 
Cash provided by (used in)          
           
Operating activities          
Net loss for the year   (8,895,821)   (8,774,849)
Charges to operations not involving cash          
Amortization of intangible asset   12,186    27,623 
Depreciation of property and equipment   92,978    72,084 
Impairment loss on intangible asset   194,987     
Stock-based compensation   812,501    845,817 
Deferred share unit compensation   224,250     
Accreted interest   1,505,723    401,385 
           
    (6,053,196)   (7,427,940)
           
Net change in non-cash working capital balances related to operations          
Decrease (increase) in amounts receivable   60,103    (78,089)
(Increase) decrease in prepaid expenses   (242,296)   37,320 
Decrease (increase) in investment tax credits receivable   548,838    (261,591)
(Decrease) increase in accounts payable and accrued liabilities   (204,466)   504,960 
(Decrease) increase in amounts due to directors   (16,983)   19,322 
(Decrease) increase in deferred revenue   (138,635)   138,635 
           
    (6,046,635)   (7,067,383)
Financing activities          
Proceeds from issuance of share capital and warrants in private placements   16,002,500     
Share and warrant issuance costs in private placements   (1,252,114)    
Proceeds from the exercise of stock options   199,985    87,317 
Proceeds from the exercise of warrants   46,800    97,230 
Proceeds from long-term debt   936,000    253,700 
Repayment of long-term debt   (70,932)   (69,909)
           
    15,862,239    368,338 
Investing activities          
Acquisition of property and equipment   (111,113)   (121,010)
           
Net change in cash and cash equivalents during the year   9,704,491    (6,820,055)
           
Cash and cash equivalents – Beginning of year   3,842,408    10,662,463 
           
Cash and cash equivalents – End of year   13,546,899    3,842,408 
           
Supplementary cash flow          
           
Interest received   79,214    93,194 

 

The accompanying notes form an integral part of these consolidated financial statements.

 

 

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

1Nature of operations

 

Immunovaccine Inc. (the “Corporation”) is, through its 100% owned subsidiary, a clinical-stage biopharmaceutical company dedicated to making immunotherapy more effective, more broadly applicable, and more widely available to people facing cancer and infectious diseases. Immunovaccine develops T cell activating cancer immunotherapies and infectious disease vaccines based on DepoVax™, the Corporation’s patented platform that provides controlled and prolonged exposure of antigens and adjuvant to the immune system. The Corporation has research collaborations with companies and research organizations, including Merck, Incyte Corporation and Leidos Inc. (“Leidos”) in the U.S. The Corporation has licensed the delivery technology to Zoetis, formerly the animal health division of Pfizer, Inc. (“Pfizer”), for the development of vaccines for livestock. The Corporation has one reportable and geographic segment. Incorporated under the Canada Business Corporations Act and domiciled in Halifax, Nova Scotia, the shares of the Corporation are listed on the Toronto Stock Exchange (“TSX”) with the symbol “IMV” and trade on the OTCQX under the symbol “IMMVF”. The address of its principal place of business is 1344 Summer Street, Suite 412, Halifax, Nova Scotia, Canada.

 

2Basis of presentation

 

The Corporation prepares its consolidated financial statements in accordance with Canadian generally accepted accounting principles (“GAAP”) as set out in the Chartered Professional Accountants of Canada Handbook - Accounting - Part 1 (“CPA Canada Handbook”), which consist of International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

 

These consolidated financial statements were approved by the Board of Directors on March 30, 2017.

 

3Significant accounting policies, judgments and estimation uncertainty

 

New standards and interpretations not yet adopted

 

IAS 12 - Income Taxes

 

The IASB issued amendments to IAS 12, “Income Taxes” (“IAS 12”) regarding the recognition of deferred tax assets for unrealized losses, effective for annual periods beginning on or after January 1, 2017. The amendments clarify how to account for deferred tax assets related to debt instruments measured at fair value. The Corporation is currently evaluating the impact of these amendments on its consolidated financial statements.

 

IFRS 15 - Revenue from Contracts with Customers

 

The IASB issued IFRS 15, “Revenue from Contracts with Customers” (“IFRS 15”) effective for annual periods beginning on or after January 1, 2018. IFRS 15 establishes a new control-based revenue recognition model and replaces IAS 18, “Revenue”, IAS 11, “Construction Contracts”, and some revenue related interpretations. The new standard is intended to enhance disclosures about revenue, provide more comprehensive guidance for transactions that were not previously addressed and improve guidance for multiple-element arrangements. The Corporation is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

 

(1)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

3Significant accounting policies, judgments and estimation uncertainty (continued)

 

New standards and interpretations not yet adopted (continued)

 

IFRS 9 - Financial Instruments

 

IFRS 9, Financial Instruments (“IFRS 9”) introduces new requirements for the classification and measurement of financial assets. IFRS 9 requires all recognized financial assets that are within the scope of International Accounting Standards (“IAS”) 39, Financial Instruments: Recognition and Measurement, (“IAS 39”) to be measured at amortized cost or fair value in subsequent accounting periods following initial recognition. Specifically, financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of subsequent accounting periods. All other financial assets, including equity investments, are measured at their fair values at the end of subsequent accounting periods.

 

Requirements for classification and measurement of financial liabilities were added in October 2010 and they largely carried forward existing requirements in IAS 39, except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss would generally be recorded in other comprehensive income.

 

IFRS 9 was amended in November 2013 to: (i) include guidance on hedge accounting; and (ii) allow entities to early adopt the requirement to recognize changes in fair value attributable to changes in an entity’s own credit risk, from financial liabilities designated under the fair value option, in other comprehensive loss, without having to adopt the remainder of IFRS 9. The final version of IFRS 9 was issued in July 2014 and includes: (i) a third measurement category for financial assets-fair value through other comprehensive income; (ii) a single forward-looking expected loss impairment model; and (iii) a mandatory effective date for IFRS 9 of annual periods beginning on or after January 1, 2019, with early adoption permitted. The Corporation is currently evaluating the impact of the adoption of this standard on the consolidated financial statements.

 

IFRS 16 - Leases

 

IFRS 16, “Leases” (“IFRS 16”) a new standard on lease accounting, was issued on January 13, 2016 and replaces the current guidance in IAS 17. The new standard results in substantially all lessee leases being recorded on the statement of financial position. IFRS 16 is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted. The Corporation is currently evaluating the impact of this new standard on the Corporation’s financial statement measurements and disclosures. The Corporation does not anticipate early adoption of this standard.

 

Basis of measurement

 

The consolidated financial statements have been prepared under the historical cost convention.

 

Consolidation

 

The financial statements of the Corporation consolidate the accounts of Immunovaccine Inc. and its subsidiary. All intercompany transactions, balances and unrealized gains and losses from intercompany transactions are eliminated on consolidation. There are no non-controlling interests, therefore all loss and comprehensive loss is attributable to the shareholders of the Corporation.

 

(2)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

3Significant accounting policies, judgments and estimation uncertainty (continued)

 

Foreign currency translation

 

i)Functional and presentation currency

 

Items included in the consolidated financial statements of the Corporation are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in Canadian dollars, which is the Corporation’s functional currency.

 

ii)Transactions and balances

 

Foreign currency translation of monetary assets and liabilities, denominated in currencies other than the Corporation’s functional currency, are converted at the rate of exchange in effect at the consolidated statement of financial position date. Income and expense items are translated at the rate of exchange in effect at the transaction date. Translation gains or losses are included in determining income or loss for the year. Foreign exchange gain of $4,019 for the year ended December 31, 2016 (2015 - $98,670 loss) is included in general and administrative expenses.

 

Cash and cash equivalents

 

Cash and cash equivalents include cash on hand, balances with banks, and highly liquid temporary investments that are readily convertible to known amounts of cash.

 

Financial Instruments

 

Financial assets and liabilities are recognized when the Corporation becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Corporation has transferred substantially all risks and rewards of ownership.

 

Financial assets and liabilities are offset and the net amount is reported in the consolidated statement of financial position when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.

 

The Corporation recognizes financial instruments based on their classification. Depending on the financial instruments’ classification, changes in subsequent measurements are recognized in net loss and comprehensive loss.

 

The Corporation has implemented the following classifications:

 

·Cash and cash equivalents and amounts receivable are classified as loans and receivables. After their initial fair value measurement, they are measured at amortized cost using the effective interest method; and

 

·Accounts payable and accrued liabilities, amounts due to directors and long-term debt are classified as other financial liabilities. After their initial fair value measurement, they are measured at amortized cost using the effective interest method.

 

(3)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

3Significant accounting policies, judgments and estimation uncertainty (continued)

 

Impairment of financial assets

 

At each reporting date, the Corporation assesses whether there is objective evidence that a financial asset is impaired. If such evidence exists, the Corporation recognizes an impairment loss for financial assets carried at amortized cost. The loss is the difference between the amortized cost of the loan or receivable and the present value of the estimated future cash flows, discounted using the instrument’s original effective interest rate. The carrying amount of the asset is reduced by this amount either directly or indirectly through the use of an allowance account.

 

Impairment losses on financial assets carried at amortized cost are reversed in subsequent years if the amount of the loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized.

 

Property and equipment

 

Property and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Corporation and the cost can be measured reliably. The carrying amount of a replaced asset is derecognized when replaced. Repairs and maintenance costs are charged to the consolidated statement of loss and comprehensive loss during the year in which they are incurred.

 

Depreciation of property and equipment is calculated using the declining-balance method at the following annual rates:

 

Computer equipment   30%
Furniture and fixtures   20%
Laboratory equipment   20%

 

Residual values, method of depreciation and useful lives of the assets are reviewed annually and adjusted if appropriate.

 

Gains and losses on disposals of property and equipment are determined by comparing the proceeds with the carrying amount of the asset and are included as part of general and administrative expenses in the consolidated statement of loss and comprehensive loss.

 

Impairment of non-financial assets

 

Property and equipment and intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units or CGUs). The recoverable amount is the higher of an asset’s fair value less the costs to sell, and value in use (being the present value of the expected future cash flows of the relevant asset or CGU). An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount.

 

(4)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

3Significant accounting policies, judgments and estimation uncertainty (continued)

 

Impairment of non-financial assets (continued)

 

The Corporation evaluates impairment losses for potential reversals when events or circumstances warrant such consideration.

 

Income tax

 

Income tax is comprised of current and deferred income tax. Income tax is recognized in the consolidated statement of loss and comprehensive loss except to the extent that it relates to items recognized directly in equity, in which case the income tax is also recognized directly in equity.

 

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous years.

 

In general, deferred income tax is recognized in respect of temporary differences including non-refundable investment tax credits, arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined on a non-discounted basis using tax rates and laws that have been enacted or substantively enacted at the consolidated statement of financial position date and are expected to apply when the deferred income tax asset or liability is settled. Deferred income tax assets are recognized to the extent that it is probable that the assets can be recovered.

 

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except, in the case of subsidiaries, where the timing of the reversal of the temporary difference is controlled by the Corporation and it is probable that the temporary difference will not reverse in the foreseeable future.

 

Deferred income tax assets and liabilities are presented as non-current.

 

Research and development

 

All research costs are expensed in the period incurred. Development costs are expensed in the period incurred, unless they meet the criteria for capitalization, in which case they are capitalized and then amortized over the useful life. Development costs are written off when there is no longer an expectation of future benefits.

 

Revenue recognition

 

In general, revenues are recognized to the extent that it is probable that the economic benefits will flow to the Corporation and the amount can be measured reliably. Revenues comprise the fair value of the consideration received or receivable for services in the ordinary course of the Corporation’s activities.

 

Revenues related to research agreements are bound to milestone agreements and are recorded as the milestones are reached and upon customer acceptance. Under these agreements, the payments received in advance are recognized as deferred revenue in the consolidated statement of financial position, and then as revenue when milestones are reached and upon customer acceptance. Revenues from research agreements are recognized using the percentage-of-completion method.

 

(5)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

3Significant accounting policies, judgments and estimation uncertainty (continued)

 

Revenue recognition (continued)

 

The existing licensing agreements usually foresee one-time payments (upfront payment) and milestone payments. Revenues associated with those multiple-element arrangements are allocated to the various elements based on their relative fair value. The consideration received is allocated among the separate units based on each unit’s fair value or using the residual method, and the applicable revenue recognition criteria are applied to each of the separate units.

 

License fees representing non-refundable payments received upon the execution of license agreements are recognized as revenue upon execution of the license agreements when the Corporation has no significant future performance obligations and collectability of the fees is assured. Upfront payments received at the beginning of licensing agreements are not recorded as revenue when received but are amortized based on the progress of the related research and development work. This progress is based on estimates of total expected time or duration to complete the work which is compared to the period of time incurred to date in order to arrive at an estimate of the percentage or revenue earned to date.

 

Deferred revenue

 

Revenue that has been paid for by customers but did not qualify for recognition at the end of the year under the Corporation’s policies is reflected as deferred revenue.

 

Share capital

 

Common shares are classified as equity. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from share capital.

 

Loss per share

 

Basic loss per share (“LPS”) is calculated by dividing the net loss for the year attributable to equity owners of the Corporation by the weighted average number of common shares outstanding during the year.

 

Diluted LPS is calculated by adjusting the weighted average number of common shares outstanding for dilutive instruments. The number of shares included with respect to options, warrants and similar instruments is computed using the treasury stock method. Diluted LPS is equal to the LPS as the Corporation is in a loss position and all securities, comprised of options and warrants, would be anti-dilutive.

 

Stock-based compensation plan

 

The Corporation grants stock options to certain employees and non-employees. The majority of the stock options vest over 18 months (33 1/3% per six months) and expire after five years. Each tranche in an award is considered a separate award with its own vesting period and grant date fair value. Fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model. Compensation expense is recognized over the tranche’s vesting period by increasing contributed surplus based on the number of awards expected to vest. The number of awards expected to vest is reviewed at least annually, with any impact being recognized immediately.

 

(6)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

3Significant accounting policies, judgments and estimation uncertainty (continued)

 

Stock-based compensation plan (continued)

 

A holder of an option may, rather than exercise such option, elect a cashless exercise of such option payable in common shares equaling the amount by which the value of an underlying share at that time exceeds the exercise price of such option or warrant to acquire such share.

 

Deferred share unit plan

 

The Corporation grants deferred share units (“DSUs”) to Members of its Board of Directors, who are not employees or officers of the Corporation. All DSUs awarded vest immediately and cannot be redeemed until the holder is no longer a director of the Corporation. All services received in exchange for the grant of DSUs are measured at their fair values. The redemption value of a DSU will be based on the market value of the Corporation’s common shares at the time of redemption. On an ongoing basis, the Corporation values its liability with respect to DSUs at the current market value of a corresponding number of common shares and records any increase or decrease in the DSU obligation. Compensation expense is recognized at each grant date in general and administrative expenses on the consolidated statement of loss and comprehensive loss.

 

Government assistance

 

Non-repayable government assistance is recorded in the period earned as a reduction in the related qualifying expenditure. During the year ended December 31, 2016, the Corporation recorded $412,541 of non-repayable government grants, from a number of government agencies, as a reduction in related research salaries (2015 - $168,610). At December 31, 2016, $38,185 (2015 - $43,183) of government assistance, including government loans, is included in amounts receivable. Repayable government loans are recorded initially at fair value, with the difference between the book value and fair value recorded as a reduction of the related expenditures. During the year ended December 31, 2016, the Corporation recorded $314,000 as a reduction of general and administrative expenditures (2015 - $nil) and $nil as a reduction of research expenditures (2015 - $52,126).

 

Research and development tax credits

 

Refundable investment tax credits relating to scientific research and experimental development expenditures are recorded in the accounts in the fiscal period in which the qualifying expenditures are incurred provided there is reasonable assurance that the tax credits will be realized. Refundable investment tax credits, in connection with research and development activities, are accounted for using the cost reduction method which recognizes the credits as a reduction of the cost of the related expenses.

 

Amounts recorded for refundable investment tax credits are calculated based on the expected eligibility and tax treatment of qualifying scientific research and experimental development expenditures recorded in the Corporation’s consolidated financial statements.

 

(7)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

3Significant accounting policies, judgments and estimation uncertainty (continued)

 

Critical accounting estimates and judgments

 

The Corporation makes estimates and assumptions concerning the future that will, by definition, seldom equal actual results. The following are the estimates and judgments applied by management that most significantly affect the Corporation’s consolidated financial statements. The following estimates and judgments have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

 

Calculation of initial fair value and carrying amount of long-term debt

 

Atlantic Innovation Fund (“AIF”) loans

 

The initial fair value of the AIF loans is determined by using a discounted cash flow analysis for each of the loans, which require a number of assumptions. The difference between the face value and the initial fair value of the AIF loans is recorded in the consolidated statement of loss as government assistance. The carrying amount of the AIF loans requires management to adjust the long-term debt to reflect actual and revised estimated cash flows whenever revised cash flow estimates are made or new information related to market conditions is made available. Management recalculates the carrying amount by computing the present value of the estimated future cash flows at the original effective interest rate. Any adjustments are recognized in the consolidated statement of loss as accreted interest after initial recognition.

 

The significant assumptions used in determining the discounted cash flows include estimating the amount and timing of future revenue for the Corporation and the discount rate. As the AIF loans are repayable based on a percentage of gross revenue, if any, the determination of the amount and timing of future revenue significantly impacts the initial fair value of the loan, as well as the carrying value of the AIF loans at each reporting date. The Corporation is in the early stages of research for its infectious diseases and cancer vaccine product candidates; accordingly, determination of the amount and timing of revenue, if any, requires significant judgment by management. If the Corporation expected no future revenues, no repayments would be required on the AIF loans and the amounts recorded for the AIF loans would be $nil. Management’s estimates of future revenues assume no significant revenue in the near future. The discount rate determined on initial recognition of the AIF loans is used to determine the present value of estimated future cash flows expected to be required to settle the debt. In determining the appropriate discount rates, the Corporation considered the interest rates of similar long-term debt arrangements, with similar terms. The AIF loans are repayable based on a percentage of gross revenue, if any; accordingly, finding financing arrangements with similar terms is difficult and management was required to use significant judgment in determining the appropriate discount rates. Management used a discount rate of 35% to discount the AIF loans.

 

(8)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

3Significant accounting policies, judgments and estimation uncertainty (continued)

 

Critical accounting estimates and judgments (continued)

 

Calculation of initial fair value and carrying amount of long-term debt (continued)

 

Atlantic Innovation Fund (“AIF”) loans (continued)

 

If the weighted average discount rate used in determining the initial fair value and the carrying value at each reporting date of all AIF loans, with repayment terms based on future revenue, had been determined to be higher by 10%, or lower by 10%, the carrying value of the long-term debt at December 31, 2016 would have been an estimated $525,000 lower or $883,400 higher, respectively. As there is no significant revenue forecasted in the near future, a 10% increase or decrease in the total forecasted revenue would not have a significant impact on the amount recorded for the AIF loans. If the total forecasted revenue were reduced to $nil, no amounts would be forecast to be repaid on the AIF loans, and the AIF loans payable at December 31, 2016 would be recorded at $nil, which would be a reduction in the AIF loans payable of $1,647,300. If the timing of the receipt of forecasted future revenue was earlier or later by 2 years, the carrying value of the long-term debt at December 31, 2016 would have been an estimated $955,500 higher or $739,400 lower, respectively.

 

Province of Nova Scotia (“The Province”)

 

The initial fair value of the Province loan is determined by using a discounted cash flow analysis for the loan. The interest rate on the loan is below the market rate for a commercial loan with similar terms. The significant assumption used in determining the discounted cash flows is the discount rate. Any changes in the discount rate would impact the amount recorded as initial fair value of the long-term debt and the carrying value of the long-term debt at each reporting date. In determining the appropriate discount rate, the Corporation considers the interest rates of similar long-term debt arrangements, with similar terms. The Province loan is a government loan with principal payments only required at the end of five years; accordingly, finding financing arrangements with similar terms is difficult and management was required to use significant judgment in determining the appropriate discount rates. Management used a discount rate of 15% to discount the Province loan.

 

If the discount rate used for the Province loan had been determined to be higher or lower by 5% (resulting in discount rates of 20% or 10%, respectively), the carrying value of the long-term debt at December 31, 2016 would have been an estimated $455,000 lower or $514,000 higher, respectively. The difference between the book value and the initial fair value of the Province loan is recorded in the consolidated statement of loss as government assistance on initial recognition. Any changes in the amounts recorded on the consolidated statement of financial position for the Province loan result in an offsetting charge to accreted interest after initial recognition in the consolidated statement of loss.

 

(9)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

4Amounts receivable

 

   2016   2015 
   $   $ 
Amounts due from government assistance and government loans   38,185    43,183 
Sales tax receivable   140,193    82,070 
Other   90,387    203,615 
           
    268,765    328,868 

 

5Intangible asset

 

On November 7, 2016, the Corporation terminated its exclusive world-wide license for the use of certain patented antigens as this approach is not in line with the business strategy of combination therapy with checkpoint inhibitors. DPX-0907 is no longer expected to reach commercial production, therefore, the recoverable amount of the intangible asset was determined to be nil. The Corporation has recognized an impairment loss of $194,987 during the period ended December 31, 2016 (December 31, 2015 - $nil).

 

   License 
   $ 
Year ended December 31, 2015     
Opening net book value   234,796 
Amortization for the year   (27,623)
      
Closing net book value   207,173 
      
At December 31, 2015     
Cost   446,765 
Accumulated amortization   (239,592)
      
Net book value   207,173 
      
Year ended December 31, 2016     
Opening net book value   207,173 
Amortization for the year   (12,186)
Impairment loss   (194,987)
      
Closing net book value    

 

(10)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

6Property and equipment

 

   Computer   Furniture and   Laboratory     
   equipment   fixtures   equipment   Total 
   $   $   $   $ 
Year ended December 31, 2015                    
Opening net book value   31,356    27,356    190,070    248,782 
Additions   20,105        100,905    121,010 
Depreciation for the year   (18,508)   (5,471)   (48,105)   (72,084)
                     
Closing net book value   32,953    21,885    242,870    297,708 
                     
At December 31, 2015                    
Cost   202,056    70,319    833,001    1,105,376 
Accumulated depreciation   (169,103)   (48,434)   (590,131)   (807,668)
                     
Net book value   32,953    21,885    242,870    297,708 
                     
Year ended December 31, 2016                    
Opening net book value   32,953    21,885    242,870    297,708 
Additions   42,836        68,277    111,113 
Disposals                    
Cost   (104,080)       (18,042)   (122,122)
Accumulated depreciation   104,080        18,042    122,122 
Depreciation for the year   (33,200)   (4,376)   (55,402)   (92,978)
                     
Closing net book value   42,589    17,509    255,745    315,843 
                     
At December 31, 2016                    
Cost   140,812    70,319    883,236    1,094,367 
Accumulated depreciation   (98,223)   (52,810)   (627,491)   (778,524)
                     
Net book value   42,589    17,509    255,745    315,843 

 

7Accounts payable and accrued liabilities

 

   2016   2015 
   $   $ 
Trade payables   954,208    838,924 
Accrued liabilities   725,657    1,053,250 
Payroll taxes   25,424    17,581 
           
    1,705,289    1,909,755 

 

8Amounts due to directors

 

During the year ended December 31, 2016, the Corporation incurred $283,100 (2015 - $298,436) of directors’ fees and attendance fees earned by the members of the Board of Directors who are not employees or officers of the Corporation. At December 31, 2016, $40,101 (2015 - $57,084) was due to these individuals. These costs are included in general and administrative expenses in the consolidated statements of loss and comprehensive loss.

 

(11)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

9Long-term debt

 

   2016   2015 
   $   $ 
Atlantic Canada Opportunities Agency (“ACOA”) Atlantic Innovation Fund interest-free loan with a maximum contribution of $3,786,474. Annual repayments, commencing December 1, 2008, are calculated as a percentage of gross revenue for the preceding fiscal year, at 2% when gross revenues are less than $5,000,000 and 5% when gross revenues are greater than $5,000,000. As at December 31, 2016, the amount drawn down on the loan, net of repayments, is $3,749,531 (2015 - $3,749,531).   764,500    230,200 
ACOA Atlantic Innovation Fund interest-free loan with a maximum contribution of $3,000,000.  Annual repayments, commencing December 1, 2011, are calculated as a percentage of gross revenue for the preceding fiscal year, at 2% when gross revenues are less than $5,000,000 and 5% when gross revenues are greater than $5,000,000.  As at December 31, 2016, the amount drawn down on the loan is $3,000,000 (2015 - $3,000,000).   656,400    192,900 
ACOA Business Development Program interest-free loan with a maximum contribution of $245,625, repayable in 72 equal monthly payments of $3,411 beginning September 1, 2011.  As at December 31, 2016, the amount drawn down on the loan, net of repayments, is $27,321 (2015 - $68,253).   25,061    64,013 
ACOA Business Development Program interest-free loan with a maximum contribution of $394,826, repayable in monthly payments beginning October 1, 2015 of $2,500 until October 2017 and $5,850 until September 2022. As at December 31, 2016, the amount drawn down on the loan is $357,326 (2015 - $387,326).   318,666    333,723 
ACOA Atlantic Innovation Fund interest-free loan with a maximum contribution of $2,944,000, annual repayments commencing September 1, 2014, are calculated as a percentage of gross revenue from specific product(s) for the preceding fiscal year, at 5% for the first 5 year period and 10%, thereafter.  As at December 31, 2016, the amount drawn down on the loan is $2,944,000 (2015 - $2,944,000).   226,400    146,400 
Province of Nova Scotia “The Province” secured loan with a maximum contribution of $5,000,000, interest bearing at a rate equal to the Province’s cost of funds plus 1%, compounded semi-annually and payable monthly. The loan is made available in four equal installments based on the Corporation meeting certain milestones, and is repayable on the fifth anniversary date of the first disbursement. The Corporation and its subsidiary have provided a general security agreement granting a first security interest in favour of the Province of Nova Scotia in and to all the assets of the Corporation and its subsidiary, including the intellectual property.  As at December 31, 2016, the amount drawn down on the loan is $5,000,000 (2015 - $3,750,000).   4,157,000    2,810,000 
           
    6,148,027    3,777,236 
           
Less:  Current portion   57,627    59,196 
           
    6,090,400    3,718,040 

 

(12)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

9Long-term debt (continued)

 

Total contributions received less amounts that have been repaid as at December 31, 2016 is $15,078,178 (December 31, 2015 - $13, 899,110).

 

Certain ACOA loans and the Province loan require approval by ACOA or the Minister for the Province before the Corporation can pay management fees, bonuses, dividends or other distributions, or before there is any change of ownership of the Corporation. The Province loan requires the Corporation to obtain the written consent of the Province prior to the sale, disposal or abandon of possession of the intellectual property of the Corporation or its subsidiary. If during the term of the Province loan, the head office, research and development facilities, or production facilities of the Corporation are moved from the Province, the Corporation is required to repay 40% of the outstanding principal of the loan.

 

The Province loan requires certain early repayments if the Corporation’s subsidiary, or the Corporation on a consolidated basis, has cash flow from operations in excess of $1,500,000. The Province loan also requires repayment of the loan under certain circumstances, such as changes of control, sale or liquidation of the Corporation or the sale of substantially all of the assets of the Corporation.

 

The minimum annual principal repayments of long-term debt over the next five years, excluding the Atlantic Innovation Fund repayments for 2019 and beyond which are not determinable at this time, are as follows:

 

   $ 
Year ending December 31, 2017   57,627 
2018   4,217,652 
2019   58,143 
2020   60,821 
2021   63,499 

 

   2016   2015 
   $   $ 
Balance – Beginning of year   3,777,236    3,192,060 
Borrowings, net of $314,000 (2015 - $52,126) allocated to government assistance   936,000    253,700 
Accreted interest   1,505,723    401,385 
Repayment of debt   (70,932)   (69,909)
           
Balance – End of year   6,148,027    3,777,236 
Less:  Current portion   57,627    59,196 
           
Non-current portion   6,090,400    3,718,040 

 

(13)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

10Share capital

 

Authorized

 

Unlimited number of common shares and preferred shares, issuable in series, all without par value.

 

   Number of     
   common shares   Amount 
       $ 
Issued and outstanding          
           
Balance – December 31, 2014   91,722,677    43,274,716 
           
Stock options exercised   206,668    204,134 
Warrants exercised   111,325    121,707 
           
Balance – December 31, 2015   92,040,670    43,600,557 
           
Issued for cash consideration, net of issuance costs   25,216,667    14,086,088 
Stock options exercised   493,068    416,918 
Warrants exercised   65,000    50,700 
           
Balance – December 31, 2016   117,815,405    58,154,263 

 

As at December 31, 2016, a total of 15,324,555 shares (December 31, 2015 – 10,809,828) are reserved to meet outstanding stock options, warrants and deferred share units.

 

On June 8, 2016, the Corporation completed a bought deal private placement of 14,550,000 units at a price of $0.55 per unit, for aggregate proceeds of $8,002,500. Each unit consisted of one common share and one-half of one common share purchase warrant, with each whole warrant entitling the holder to acquire one common share of the Corporation at an exercise price of $0.72 for a period of 24 months, expiring on June 8, 2018. The value allocated to the common shares issued was $7,566,000 and the value allocated to the warrants was $436,500. Total costs associated with the offering were $750,054, including cash costs for commissions of $479,549, professional fees and regulatory costs of $174,595 and 871,908 compensation warrants issued as commissions to the agents valued at $95,910. Each compensation warrants entitles the holder to acquire one common share of the Corporation at an exercise price of $0.60 for a period of 24 months, expiring on June 8, 2018. The Corporation has allocated $709,142 of the issue costs to the common shares and $40,912 of the issue costs to the warrants.

 

On December 9, 2016, the Corporation completed a bought deal private placement of 10,666,667 shares at a price of $0.75 per share, for aggregate proceeds of $8,000,000. Total costs associated with the offering were $770,770, including cash costs for commissions of $480,000, professional fees and regulatory costs of $117,970 and 640,000 compensation warrants issued as commissions to the agents valued at $172,800. Each compensation warrant entitles the holder to acquire one common share of the Corporation at an exercise price of $0.79 for a period of 24 months, expiring on December 9, 2018. The warrants and compensation warrants issued on June 8, 2016 and December 9, 2016 represent the only outstanding warrants of the Corporation as at December 31, 2016.

 

(14)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

11Contributed surplus

 

   Amount 
   $ 
Contributed surplus     
      
Balance – December 31, 2014   4,883,103 
      
Share-based compensation – stock options vested   845,817 
Stock options exercised   (116,817)
      
Balance – December 31, 2015   5,612,103 
      
Share-based compensation – stock options vested   812,501 
Warrants expired   753,375 
Stock options exercised   (216,933)
      
Balance – December 31, 2016   6,961,046 

 

Stock options

 

The Board of Directors of the Corporation has established a stock option plan (the “Plan”) under which options to acquire common shares of the Corporation are granted to directors, employees and other advisors of the Corporation. The maximum number of common shares issuable under the Plan shall not exceed 9,100,000, inclusive of all shares presently reserved for issuance pursuant to previously granted stock options. If any option expires or otherwise terminates for any reason without having been exercised in full, or if any option is exercised in whole or in part, the number of shares in respect of which option expired, terminated or was exercised shall again be available for the purposes of the Plan.

 

Stock options are granted with an exercise price determined by the Board of Directors, which is not less than the market price of the shares on the day preceding the award. The term of the option is determined by the Board of Directors, not to exceed ten years from the date of grant, however the majority of options expire in five years. The vesting of the options is determined by the Board and is typically 33 1/3% every six months after the date of grant.

 

In the event that the option holder should die while he or she is still a director, employee or other advisor of the Corporation, the expiry date shall be 12 months from the date of death of the option holder, not to exceed the original expiry date of the option. In the event that the option holder ceases to be a director, employee or other advisor of the Corporation other than by reason of death or termination, the expiry date of the option shall be the 90th day following the date the option holder ceases to be a director, employee or other advisor of the Corporation, not to exceed the original expiry date of the option.

 

(15)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

11Contributed surplus (continued)

 

Stock options (continued)

 

The fair values of stock options are estimated using the Black-Scholes option pricing model. During the year ended December 31, 2016, 1,993,200 stock options (2015 - 1,527,500) with a weighted average exercise price of $0.71 (2015 - $0.70) and a term of 5 years (2015 - 5 years), were granted to employees and consultants. The expected volatility of these stock options was determined using historical volatility rates. The value of these stock options has been estimated at $938,940 (2015 - $887,623), which is a weighted average grant date value per option of $0.47 (2015 - $0.58), using the Black-Scholes valuation model and the following weighted average assumptions:

 

   2016   2015 
Risk-free interest rate   2.70%   2.98%
Expected volatility   111%   129%
Expected life (years)   4.3    4.3 
Forfeiture rate   5%   4%

 

Option activity for the year ended December 31, 2016 and 2015 was as follows:

 

   2016   2015 
       Weighted       Weighted 
       average       average 
   Number   exercise price   Number   exercise price 
       $       $ 
Outstanding - Beginning of year   5,112,382    0.69    4,733,050    0.69 
Granted   1,993,200    0.71    1,527,500    0.70 
Exercised   (628,785)1   0.46    (206,668)   0.42 
Expired   (152,583)   0.78    (891,500)   0.91 
Forfeited   (46,567)   0.67    (50,000)   0.66 
                     
Outstanding - End of year   6,277,647    0.70    5,112,382    0.66 

 

1Of the 628,785 options exercised, 213,840 elected the cashless exercise, under which 78,123 shares, having a value of $92,275 on the exercise date, were issued.

 

The weighted average exercise price of options exercisable at December 31, 2016 is $0.69 (2015 - $0.65).

 

(16)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

11Contributed surplus (continued)

 

Stock options (continued)

 

At December 31, 2016, the following options were outstanding:

 

                            Exercise       Average 
                            price per       years 
Opening   Issued   Exercised   Expired   Forfeited   Closing   Exercisable   share   Expiry   remaining 
                            $         
 54,750            (54,750)               0.67    March 31, 2016     
 7,500            (7,500)               0.67    July 1, 2016     
 50,000        (50,000)                   0.55    August 26, 2016     
 50,000        (50,000)                   0.45    November 8, 2016     
 622,500        (260,000)           362,500    362,400    0.40    March 9, 2017    0.19 
 79,000            (10,000)       69,000    69,000    1.00    March 31, 2017    0.25 
 10,000                    10,000    10,000    1.00    July 1, 2017    0.50 
 129,000            (17,000)       112,000    112,000    1.00    March 31, 2018    1.25 
 366,732        (118,785)           247,947    247,947    0.28    April 30, 2018    1.33 
 1,676,500        (75,000)   (20,000)       1,581,500    1,581,500    0.74    January 17, 2019    2.05 
 138,900            (20,000)       118,900    118,900    1.00    March 31, 2019    2.25 
 400,000                    400,000    400,000    0.71    August 14, 2019    2.62 
 50,000                    50,000    50,000    0.79    September 25, 2019    2.73 
 1,227,500        (75,000)   (23,333)   (41,667)   1,087,500    1,087,500    0.66    February 2, 2020    3.09 
 250,000                    250,000    250,000    0.88    April 27, 2020    3.32 
     1,393,200            (4,900)   1,388,300    462,767    0.74    January 21, 2021    4.06 
     400,000                400,000    133,333    0.62    August 29, 2021    4.66 
     200,000                200,000        0.69    November 7, 2021    4.85 
                                                
 5,112,382    1,993,200    (628,785)   (152,583)   (46,567)   6,277,647    4,885,447                

 

(17)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

12Warrants

 

Warrant activity for the years ended December 31, 2016 and 2015 was as follows:

 

   2016   2015 
       Weighted           Weighted     
       average           average     
       exercise           exercise     
   Number   price   Amount   Number   price   Amount 
       $   $       $   $ 
Opening balance   5,697,446    0.66    753,375    5,808,771    1.17    777,852 
Expired   (5,697,446)   0.66    (753,375)            
Granted   8,786,908    0.71    664,298             
Exercised   (65,000)   0.72    (3,900)   (111,325)   0.87    (24,477)
                               
Closing balance   8,721,908         660,398    5,697,446         753,375 

 

The fair values of warrants are estimated using the Black-Scholes option pricing model. The weighted average grant date value per warrant of warrants issued in 2016 was $0.08, determined using the Black-Scholes valuation model and the following weighted average assumptions:

 

Risk-free interest rate   2.70%
Expected volatility   28%
Expected dividend yield    
Expected life (years)   2 

 

No warrants were issued during 2015.

 

13Deferred income taxes

 

a)Reconciliation of total tax recovery

 

The effective rate on the Corporation’s loss before income tax differs from the expected amount that would arise using the statutory income tax rates. A reconciliation of the difference is as follows:

 

   2016   2015 
   $   $ 
Loss before income taxes   (8,895,821)   (8,774,849)
           
Income tax rate   31.0%   31.0%
           
    (2,758,000)   (2,720,000)
           
Effect on income taxes of:          
Non-deductible share-based compensation   321,000    262,000 
Unrecognized deductible temporary difference and carry forward amounts and experimental development expenditures   2,424,000    2,440,000 
Other non-deductible items   13,000    18,000 
           
Income tax recovery        

 

(18)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

13Deferred income taxes (continued)

 

b)Deferred income tax

 

The significant components of the Corporation’s deferred income tax are as follows:

 

   2016   2015 
   $   $ 
Deferred income tax liabilities:          
Intangibles       (59,000)
           
Deferred income tax assets:          
Non-capital losses       59,000 
           
Net deferred income tax liability        

 

The following reflects the balance of temporary differences for which no deferred income tax asset has been recognized:

 

   2016   2015 
   $   $ 
Non-capital losses   39,400,000    33,100,000 
Scientific research and experimental development expenditures   8,981,000    8,360,000 
Non-refundable investment tax credits   2,139,000    2,077,000 
Deductible share issuance costs   1,604,000    820,000 
Long-term debt   5,804,000    3,458,000 
Property and equipment   746,000    210,000 

 

c)Non-capital losses

 

As at December 31, 2016, the Corporation had approximately $39,400,000 in losses available to reduce future taxable income. The benefit of these losses has not been recorded in the accounts as realization is not considered probable. These losses may be claimed no later than:

 

   $     
For the year ending December 31, 2025   1,000,000      
2026   1,100,000      
2027   1,470,000      
2028   1,770,000      
2029   660,000      
2030   2,640,000      
2031   5,180,000      
2032   4,110,000      
2033   4,270,000      
2034   3,400,000      
2035   7,700,000      
2036   6,100,000      
           
    39,400,000      

 

(19)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

13Deferred income taxes (continued)

 

d)Scientific research and experimental development expenditures

 

The Corporation has approximately $8,941,000 of unclaimed scientific research and development expenditures, which may be carried forward indefinitely and used to reduce taxable income in future years. The potential income tax benefits associated with the unclaimed scientific research and experimental development expenditures have not been recognized in the accounts as realization is not considered probable.

 

e)Non-refundable investment tax credits

 

The Corporation also has approximately $2,139,000 in non-refundable federal investment tax credits which may be carried forward to reduce taxes payable. These tax credits will be fully expired by 2035. The benefit of these tax credits has not been recorded in the accounts as realization is not considered probable.

 

14Capital management

 

The Corporation views capital as the sum of its cash and cash equivalents, long-term debt and equity. The Corporations’ objectives when managing capital is to safeguard its ability to continue as a going concern in order to provide an adequate return to shareholders and maintain a sufficient level of funds to finance its research and development activities, general and administrative expenses, working capital and overall capital expenditures, including those associated with patents and trademarks. To maintain or adjust the capital structure, the Corporation may attempt to issue new shares, issue new debt, acquire or dispose of assets, all of which are subject to market conditions and the terms of the underlying third party agreements. The Corporation is not subject to any regulatory capital requirements imposed.

 

   2016   2015 
   $   $ 
Total debt   6,148,027    3,777,236 
Less: Cash and cash equivalents   (13,546,899)   (3,842,408)
           
Net debt   (7,398,872)   (65,172)
Equity   6,983,209    69,358 
           
Total capital   (415,663)   4,186 

 

The Corporation is in compliance with its debt covenants.

 

(20)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

15Financial instruments

 

Fair value of financial instruments

 

Financial instruments are defined as a contractual right or obligation to receive or deliver cash on another financial asset.

 

The following table sets out the approximate fair values of financial instruments as at the consolidated statements of financial position date with relevant comparatives:

 

   2016   2015 
   Carrying       Carrying     
   value   Fair value   value   Fair value 
   $   $   $   $ 
Cash and cash equivalents   13,546,899    13,546,899    3,842,408    3,842,408 
Amounts receivable   128,572    128,572    246,798    246,798 
Accounts payable and accrued liabilities   1,679,865    1,679,865    1,892,174    1,892,174 
Amounts due to directors   40,101    40,101    57,084    57,084 
Long-term debt   6,148,027    6,148,027    3,777,236    3,777,236 

 

Assets and liabilities, such as commodity taxes, that are not contractual and that arise as a result of statutory requirements imposed by governments, do not meet the definition of financial assets or financial liabilities and are, therefore excluded from amounts receivable and amounts payable and accrued liabilities in this table.

 

Fair value of items, which are short-term in nature, have been deemed to approximate their carrying value. The above noted fair values, presented for information only, reflect conditions that existed only at December 31, 2016, and do not necessarily reflect future value or amounts which the Corporation might receive if it were to sell some or all of its assets to a willing buyer in a free and open market.

 

The fair value of the long-term debt is estimated based on the expected interest rates for similar borrowings by the Corporation at the consolidated statements of financial position dates. At December 31, 2016, the fair value is estimated to be equal to the carrying amount.

 

Risk management

 

The Corporation, through its financial assets and liabilities, has exposure to the following risks from its use of financial instruments: interest rate risk; credit risk; liquidity risk; and currency risk. Management is responsible for setting acceptable levels of risk and reviewing risk management activities as necessary.

 

a)Interest rate risk

 

The Corporation has limited exposure to interest rate risk on its lending and borrowing activities. The Corporation has a significant loan in which the interest rate is dependent on the cost of funds from the lender plus 1%. This interest rate is fixed at the time that each loan disbursement is made, resulting in limited variability to the interest rate. The total amount drawn down on the loan as at December 31, 2016 is $5,000,000 (2015 - $3,750,000) and the Corporation is required to make interest payments in fiscal 2017 of $148,340.

 

(21)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

15Financial instruments (continued)

 

Risk management (continued)

 

a)Interest rate risk (continued)

 

The Corporation also has interest-free debt that is repayable over 60, 72, or 84 months periods, resulting in required principal debt payments in fiscal 2017 of $66,561. The remaining outstanding debt as at December 31, 2016 is interest-free, only becoming repayable when revenues are earned. The Corporation is required to make principal debt payments in fiscal 2017 of $5,108.

 

b)Credit risk

 

Credit risk arises from cash and cash equivalents and amounts receivable. The Corporation invests excess cash in high-interest savings accounts or in highly liquid temporary investments of Schedule 1 Canadian Banks. The credit risk of cash and cash equivalents is limited because the counter-parties are banks with high credit-ratings assigned by international credit-rating agencies.

 

The total of amounts receivable disclosed in the consolidated statements of financial position as at December 31, 2016 of $268,765 (2015 - $328,868) is comprised mainly of current period advances due to the Corporation for government assistance programs and cost-recoveries from third party partners, as well as sales taxes recoverable. If required, the balance is shown net of allowances for bad debts, estimated by management based on prior experience and their assessment of the current economic environment. Historically, there have been no collection issues and the Corporation does not believe it is subject to any significant concentration of credit risk.

 

c)Liquidity risk

 

Liquidity risk represents the possibility that the Corporation may not be able to gather sufficient cash resources, when required and under reasonable conditions, to meet its financial obligations.

 

Since the Corporation’s inception, operations have been financed through the sale of shares, issuance of debt, revenue and cost-recoveries from license agreements, interest income on funds available for investment, government assistance and income tax credits. The Corporation has incurred significant operating losses and negative cash flows from operations since inception and has an accumulated deficit of $58,792,498 as at December 31, 2016.

 

While the Corporation has $13,546,899 in cash and cash equivalents at December 31, 2016, it continues to have an ongoing need for substantial capital resources to research and develop, commercialize and manufacture its products and technologies. The Corporation is currently not yet receiving a significant ongoing revenue stream from its license agreements, nor can it be certain that it will receive significant revenue from these agreements before additional cash is required. As a result, there can be no assurance that the Corporation will have sufficient capital to fund its ongoing operations, and develop or commercialize any of its products without future financing.

 

(22)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

15Financial instruments (continued)

 

Risk management (continued)

 

c)Liquidity risk (continued)

 

The following table outlines the contractual maturities for long-term debt repayable based on a percentage of revenues for the Corporation’s financial liabilities. The long-term debt is comprised of the contributions received described in note 9, less amounts that have been repaid as at December 31, 2016:

 

   Total   Year 1   Years 2 to 3   Years 4 to 5   After 5 years 
   $   $   $   $   $ 
Accounts payable and accrued liabilities   1,705,289    1,705,289             
Amounts due to directors   40,101    40,101             
Long-term debt   15,337,773    220,009    5,250,283    133,920    9,733,561 
Operating leases   540,613    223,735    316,878         
                          
    17,623,776    2,189,134    5,567,161    133,920    9,733,561 

 

The above amounts include interest payments, where applicable.

 

d)Currency risk

 

The Corporation incurs some revenue and expenses in U.S. dollars, and as such, is subject to fluctuations as a result of foreign exchange rate variation. The Corporation does not have in place any tools to manage its foreign exchange risk, as these U.S. dollars transactions are not significant to overall operations.

 

Foreign exchange gain of $4,019 for the year ended December 31, 2016 (2015, foreign exchange losses - $98,670) are included in general and administrative expenses. If the foreign exchange had been 1% higher/lower, with all other variables held constant, it would have had an immaterial impact on the foreign exchange gain/loss.

 

16Commitments

 

The minimum annual payments under long-term lease agreements for office premises and equipment expiring over the next three years are as follows:

 

   $ 
Year ending December 31, 2017   223,735 
2018   223,388 
2019   93,490 

 

On July 12, 2010, the Corporation entered into a License Agreement with Merck KGaA to in-license EMD 640744, an investigational therapeutic Survivin-based cancer antigen designed to target multiple solid tumors and hematological malignancies. Should the Corporation’s research using these antigens continue and prove successful through clinical trials and on to commercialization, the Corporation would be required to pay certain future milestones and royalty payments along the way. The likelihood and timing of these payments is not known at this time.

 

(23)

 

 

Immunovaccine Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2016 and 2015
(expressed in Canadian dollars)

 

17Related party transactions

 

During the year ended December 31, 2016, there were no related party transactions (2015 - $nil).

 

18Expenses by nature

 

   2016   2015 
   $   $ 
Salaries, wages and benefits   2,670,068    2,489,519 
Other research and development expenditures, including clinical costs   2,201,999    3,027,404 
Professional and consulting fees   1,009,775    1,026,689 
Travel   174,669    353,811 
Office, rent and telecommunications   329,013    325,998 
Insurance   67,428    80,373 
Marketing, communications and investor relations   536,221    525,065 
Amortization   12,186    27,623 
Depreciation   92,978    72,084 
Impairment loss   194,987     
Stock-based compensation   812,501    845,817 
Deferred share unit compensation   224,250     
Other   198,822    266,119 
Accreted interest   1,505,723    401,385 
Research and development tax credits   (278,555)   (316,600)
Government assistance   (726,541)   (220,736)
           
    9,025,524    8,904,551 

 

19Compensation of key management

 

Key management includes the Corporation’s Directors, the Chief Executive Officer, the Chief Financial Officer, the Chief Medical Officer, the former Chief Business Officer and the former Chief Executive Officer. Compensation awarded to key management is summarized as follows:

 

   2016   2015 
   $   $ 
Salaries and other benefits   1,204,188    1,033,741 
Stock-based compensation   885,955    558,247 
           
    2,090,143    1,591,988 

 

20Deferred share units

 

On December 21, 2016, the Board of Directors adopted, subject to ratification by the shareholders at the 2017 Annual and Special Meeting of the shareholders, a DSU plan. Members of the Board of Directors who are not employees or officers of the Corporation may elect to receive all or a portion, but not less than 50%, of his or her fees in DSUs with the balance to be paid in cash. The maximum number of common shares which the Corporation will be entitled to issue from treasury in connection with the redemption of DSUs granted under the DSU plan will be 1,500,000 common shares. The Corporation will grant, in respect of each participant, that number of DSUs as is determined by dividing the amount of fees that, but for an election, would have been paid to the participant, by the volume-weighted average trading price calculation per common share for the five trading days immediately preceding the grant date. At December 31, 2016, there were 325,000 (2015 - $nil) DSUs outstanding and the total carrying amount of the liability was $224,250 (2015 - $nil). During the year ended December 31, 2016 the compensation expense was $224,250 (2015 - $nil).

 

(24)

 

Exhibit 99.11

 

FORM 13-501F1

CLASS 1 REPORTING ISSUERS AND CLASS 3B REPORTING ISSUERS –

PARTICIPATION FEE

 

MANAGEMENT CERTIFICATION

 

     
  I, Pierre Labbé, an officer of the reporting issuer noted below have examined this Form 13-501F1 (the Form) being submitted hereunder to the Alberta Securities Commission and certify that to my knowledge, having exercised reasonable diligence, the information provided in the Form is complete and accurate.  
  /s/ Pierre Labbé        
  Name: Pierre Labbé   Date: March 30, 2017  
  Title: Chief Financial Officer      
         

 

Reporting Issuer Name: Immunovaccine Inc.  
     
End date of previous financial year: December 31, 2016  
     
Type of Reporting Issuer: x  Class 1 reporting issuer ¨  Class 3B reporting issuer
     
Highest Trading Marketplace: Toronto Stock Exchange  

 

 

Market value of listed or quoted securities:          
           
Equity Symbol  IMV       
           
1st Specified Trading Period (dd/mm/yy)  01/01/2016  to  31/03/2016 
            
Closing price of the security in the class or series on the last trading day of the specified trading period in which such security was listed or quoted on the highest trading marketplace     $  0.44 
         (i) 
            
Number of securities in the class or series of such security outstanding at the end of the last trading day of the specified trading period        92,075,670 
         (ii) 
            
Market value of class or series  (i) x (ii)  $  40,513,294.80 
         (A) 
            
2nd Specified Trading Period (dd/mm/yy)  01/04/2016  to  30/06/2016 
           
Closing price of the security in the class or series on the last trading day of the specified trading period in which such security was listed or quoted on the highest trading marketplace     $  0.62 
         (iii) 
            
Number of securities in the class or series of such security outstanding at the end of the last trading day of the specified trading period        106,773,790 
         (iv) 
            
Market value of class or series  (iii) x (iv)  $  66,199,749.80 
         (B) 

 

 

 

3rd Specified Trading Period (dd/mm/yy)  01/07/2016  to  30/09/2016 
           
Closing price of the security in the class or series on the last trading day of the specified trading period in which such security was listed or quoted on the highest trading marketplace     $  0.73 
         (v) 
           
Number of securities in the class or series of such security outstanding at the end of the last trading day of the specified trading period        106,861,508 
         (vi)
           
Market value of class or series  (v) x (vi)  $  78,008,900.84 
         (C) 
           
4th Specified Trading Period (dd/mm/yy)  01/10/2016  to  31/12/2016 
           
Closing price of the security in the class or series on the last trading day of the specified trading period in which such security was listed or quoted on the highest trading marketplace     $  0.68 
         (vii) 
           
Number of securities in the class or series of such security outstanding at the end of the last trading day of the specified trading period        117,815,405 
         (viii) 
           
Market value of class or series  (vii) x (viii)  $  80,114,475.40 
         (D) 
           
5th Specified Trading Period (dd/mm/yy)    To   
           
Closing price of the security in the class or series on the last trading day of the specified trading period in which such security was listed or quoted on the highest trading marketplace     $  N/A 
         (ix) 
           
Number of securities in the class or series of such security outstanding at the end of the last trading day of the specified trading period        N/A 
         (x)
            
Market value of class or series  (ix) x (x)  $  N/A 
         (E) 
Average Market Value of Class or Series          
 (Calculate the simple average of the market value of the class or series of security for each applicable specified trading period (i.e. A through E above))     $  66,209,105.21 
         (1) 
           
(Repeat the above calculation for each other class or series of equity securities of the reporting issuer (and a subsidiary, if applicable) that was listed or quoted on a marketplace at the end of the previous financial year)          
           
Fair value of outstanding debt securities:      $  N/A 
         (2) 
(Provide details of how value was determined)          
           
Capitalization for the previous financial year  (1) + (2)  $  66,209,105.21 

 

 

 

 

Participation Fee       $  3,000.00 
              
Late Fee, if applicable       $  N/A 
              
Total Fee Payable       $  3,000.00 
(Participation Fee plus Late Fee)             

 

 

 

 

Exhibit 99.12

 

 

 

ANNUAL INFORMATION FORM

 

FOR THE YEAR ENDED DECEMBER 31, 2016

 

March 30, 2017

 

 

 

 

CONTENTS

 

I. INTRODUCTION AND FORWARD LOOKING STATEMENTS 1
     
II. CORPORATE STRUCTURE 2
     
III. GENERAL DEVELOPMENT OF THE BUSINESS 2
     
  Overview 2
     
  History 3
     
  Recent Developments 3
     
  Overview of the Last 3 Years 4
     
  Year ended December 31, 2016 4
     
  Year ended December 31, 2015 6
     
  Year ended December 31, 2014 8
     
IV. DESCRIPTION OF THE BUSINESS 9
     
  Business Model and Strategy 9
     
  Intellectual Property 16
     
  Markets and Competition 17
     
  Safety Profile 21
     
  Manufacturing and Scalability 21
     
  Facilities 22
     
  Regulatory Process 22
     
  Specialized Skill and Knowledge 23
     
  Scientific Advisory Board 23
     
  Regulatory Affairs Advisor 24
     
  Equipment and components required to conduct activities 25
     
  Environmental Protection 25
     
  Employees 25
     
V. RISK FACTORS AND UNCERTAINTIES 25
     
VI. DIVIDENDS 49
     
VII. DESCRIPTION OF CAPITAL STRUCTURE 49
     
VIII. MARKET FOR SECURITIES 49
     
  Trading Price and Volume 49
     
  Prior Sales 50

 

 

 

 

IX. DIRECTORS AND OFFICERS 51
     
  Directors 51
     
  Executive Officers 54
     
  Shareholding, Cease Trade Orders, Bankruptcies, Penalties or Sanctions 55
     
  Conflicts of Interest 55
     
X. CORPORATE GOVERNANCE 56
     
  Board of Directors 56
     
XI. LEGAL PROCEEDINGS AND REGULATORY ACTIONS 59
     
XII. INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS 59
     
XIII. TRANSFER AGENT AND REGISTRAR 59
     
XIV. MATERIAL CONTRACTS 60
     
XV. INTEREST OF EXPERTS 60
     
XVI. ADDITIONAL INFORMATION 60

 

 - 2 - 

 

 

I.INTRODUCTION AND FORWARD LOOKING STATEMENTS

 

The information contained in this Annual Information Form is stated as at December 31, 2016, unless otherwise indicated. Unless otherwise indicated or if the context otherwise requires, “Immunovaccine”, “IMV”, “the Corporation”, “we”, “us” and “our” refer collectively to Immunovaccine Inc., #53-1344 Summer Street, Suite 412, Halifax, Nova Scotia, Canada, B3H 0A8 and to its subsidiary, ImmunoVaccine Technologies Inc. (“IVT”).

 

Unless otherwise indicated, all dollar amounts are expressed in Canadian dollars and references to “$” are Canadian dollars.

 

Certain statements in this Annual Information Form (“AIF”) may constitute “forward-looking” statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this AIF, such statements use such words as “will”, “may”, “could”, “intends”, “potential”, “plans”, “believes”, “expects”, “projects”, “estimates”, “anticipates”, “continue”, “potential”, “predicts” or “should” and other similar terminology. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this AIF. Forward looking statements include, among others:

 

-the Corporation’s business strategy;
-statements with respect to the sufficiency of the Corporation’s financial resources to support its activities;
-potential sources of funding;
-the Corporation’s ability to obtain necessary funding on favorable terms or at all;
-the Corporation’s expected expenditures and accumulated deficit level;
-the Corporation’s expected outcomes from its ongoing and future research and research collaborations;
-the Corporation’s exploration of opportunities to maximize shareholder value as part of the ordinary course of its business through collaborations, strategic partnerships and other transactions with third parties,
-the Corporation’s plans for the research and development of certain product candidates;
-the Corporation’s strategy for protecting its intellectual property;
-the Corporation’s ability to identify licensable products or research suitable for licensing and commercialization;
-the Corporation’s ability to obtain licences on commercially reasonable terms;
-the Corporation’s plans for generating revenue;
-the Corporation’s plans for future clinical trials; and
-the Corporation’s hiring and retention of skilled staff.

 

Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under the heading “Risk Factors and Uncertainties”. Although the forward-looking statements contained in this AIF are based upon what management of the Corporation believes are reasonable assumptions, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements and should not be unduly relied upon by investors.

 

 

 

 

Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this AIF. Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about:

 

-obtaining additional funding on reasonable terms when necessary;
-positive results of pre-clinical studies and clinical trials;
-the Corporation’s ability to successfully develop existing and new products;
-the Corporation’s ability to hire and retain skilled staff;
-the products and technology offered by the Corporation’s competitors;
-general business and economic conditions;
-the Corporation’s ability to protect its intellectual property;
-the Corporation’s ability to manufacture its products and to meet demand; and
-regulatory approvals.

 

These statements reflect management’s current beliefs and are based on information currently available to management. A more detailed assessment of the risks that could cause actual results to materially differ from current expectations is contained in the section entitled “Risk Factors and Uncertainties” of this AIF.

 

Statistical information and other data relating to the pharmaceutical and biotechnology industry included in this AIF are derived from recognized industry reports published by industry analysts, industry associations and/or independent consulting and data compilation organizations. Market data and industry forecasts used throughout this AIF were obtained from various publicly available sources. Although the Corporation believes that these independent sources are generally reliable, the accuracy and completeness of the information from such sources are not guaranteed and have not been independently verified.

 

II.CORPORATE STRUCTURE

 

The Corporation was incorporated on May 18, 2007 under the name of Rhino Resources Inc. pursuant to the Canada Business Corporations Act. On September 2009, the Corporation changed its name to Immunovaccine Inc. and consolidated its outstanding share capital on a 5 to 1 basis. The Corporation’s head and registered office is located at #53-1344 Summer Street, Suite 412, Halifax, Nova Scotia, Canada, B3H 0A8.

 

The Corporation has one wholly-owned subsidiary, ImmunoVaccine Technologies Inc., which is incorporated under the laws of Nova Scotia.

 

III.GENERAL DEVELOPMENT OF THE BUSINESS

 

Overview

 

Immunovaccine is a clinical stage biopharmaceutical company that develops products based on its proprietary vaccine enhancement platform with a primary focus on T cell activating therapies for cancer. The Corporation also capitalizes on licensing opportunities of its platform for other applications, including infectious diseases. The Corporation’s proprietary DepoVaxTM delivery platform is believed to produce a strong, high-quality immune response that has a specific and sustained immune effect and enables the Corporation to pursue vaccine candidates in cancer, infectious diseases and other applications.

 

   2

 

 

The DepoVaxTM platform is being used in multiple vaccine candidates, including a cancer immunotherapy candidate that has completed Phase 1/1b clinical trials. The Corporation’s cancer immunotherapy, DPX-Survivac, is currently being tested in a co-funded Phase 1b trial with Incyte Corporation (“Incyte”), which will evaluate the combination of DPX-Survivac with Incyte’s investigational oral indoleamine 2,3-dioxygenase 1 (“IDO1”) inhibitor, epacadostat, in ovarian cancer patients. DPX-Survivac is also being tested in a company-sponsored Phase 2 trial in Lymphoma and in an investigator-sponsored Phase 2 clinical trial in ovarian cancer in combination with Merck’s checkpoint inhibitor Pembrolizumab in patients with recurrent, platinum-resistant ovarian cancer. The Corporation’s infectious disease vaccine against respiratory syncytial virus (“RSV”) is completing a Phase 1 clinical trial in Halifax, Nova Scotia. The Corporation is also conducting several research and clinical collaborations, including ones with the Dana Farber Cancer Institute for the Human Papillomavirus (“HPV”) and Leidos, Inc. (“Leidos”) in the United States for the development of vaccine candidates for malaria and the Zika virus.

 

The common shares of the Corporation are currently listed on the Toronto Stock Exchange under the symbol “IMV” and trade on the OTCQX under the symbol “IMMVF”.

 

History

 

The Corporation commenced operations in March 2000, based on animal health research pioneered at Dalhousie University in Halifax, Nova Scotia, when it was contracted by the Department of Fisheries and Oceans to develop a contraceptive vaccine to control the seal population. The Corporation was able to develop a vaccine delivery system that demonstrated effectiveness such that 90% of seals, 10 years after vaccination, were still contracepted after a single dose.

 

From 2000 to 2004, the Corporation concentrated its research efforts on animal contraception for both wildlife and companion animals, while also working on vaccines for infectious diseases in livestock with CSL Animal Health, a division of CSL Limited, which was subsequently acquired by Pfizer Inc. (“Pfizer”). The Pfizer Animal Health division was later spun out into Zoetis, Inc. (“Zoetis”). In 2004 and continuing through 2008, the Corporation began establishing its VacciMax® platform for various human applications, while simultaneously developing a scalable manufacturing process for the VacciMax® platform.

 

The Corporation continued its research and by 2008, developed a lipid depot-based vaccine delivery and enhancement technology called the DepoVaxTM platform, an improvement on the Corporation’s original VacciMax® platform. The patented DepoVaxTM platform is a combination of antigens plus adjuvanting immune enhancers formulated in lipid nanoparticles, and then in oil. The DepoVaxTM platform creates a unique “depot effect” that holds the vaccine components at the site of injection, prolonging the immune system’s interaction with them and resulting in rapid, potent and long-lasting cellular and/or antibody immune responses.

 

The DepoVaxTM platform is easy to use, chemically stable, scalable and is very versatile. The Corporation demonstrated the applicability of the DepoVaxTM in pre-clinical studies using antigens for H5N1 pandemic influenza, hepatitis B, melioidosis, cocaine, anthrax, and Ebola virus. The pre-clinical studies in animals demonstrated significantly higher immune responses after a single dose with the DepoVaxTM platform when compared to two or three doses of a control vaccine.

 

Recent Developments

 

Since January 1, 2017, the Corporation has announced it had:

 

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·announced in March 2017, the first interim data analysis from the triple combination Phase 1b clinical trial in ovarian cancer, in combination with Incyte’s epacadostat and low-dose cyclophosphamide. The analysis included the results of blood tests, tumor biopsies and CT scans to assess safety, disease progression and T-cell response for the first four evaluable patients in the trial. All patients enrolled in the trial have recurrent ovarian cancer with evidence of progressive disease. Based on the interim analysis, the combination therapy appears to have an acceptable tolerable safety profile, with a single grade 3 and single grade 4 event reported and no serious adverse events (SAEs). At the time of the interim analysis, three of four patients exhibited stable disease, while a fourth patient progressed and exited the trial. In addition, researchers observed an increased T-cell activity in tumors in three of the four patients based on RNA sequencing and indications of early tumor shrinkage in the patient who has been in trial for the longest duration thus far (based on CT scan at day 140);

 

·announced in February 2017, an investigator-sponsored Phase 2 clinical trial in ovarian cancer in combination with Merck’s checkpoint inhibitor Pembrolizumab in patients with recurrent, platinum-resistant ovarian cancer. University Health Network’s (“UHN”) Princess Margaret Cancer Centre (PM) will conduct the Phase 2 non-randomized, open-label trial designed to evaluate the potential anti-tumor activity of the combination of Pembrolizumab, DPX-Survivac, and low-dose cyclophosphamide; and

 

·appointed in February 2017, Pierre Labbé as Chief Financial Officer replacing Kimberly Stephens. In this role, Mr. Labbé will be responsible for leading the Corporation’s financial strategy and operations, with an emphasis on expanding financing and business development operations.

 

Overview of the Last 3 Years

 

The following events significantly influenced the general development of the business of the Corporation:

 

Year ended December 31, 2016

 

During the year ended December 31, 2016, the Corporation announced that it had:

 

·completed, in December 2016, a bought-deal private placement (the “December 2016 Private Placement”) of common shares (the “Common Shares”), for gross proceeds of approximately $8 million, to be used for general corporate and working capital purposes;

 

·been granted, in November 2016, “Orphan Drug Designation” status by the European Medicines Agency (EMA) for the use of DPX-Survivac for the treatment of ovarian cancer in the European Union;

 

·received positive results, in November 2016, from preclinical studies completed in collaboration with UConn Health for Immunovaccine’s DPX-NEO program, which is designed to develop patient-specific neoepitope immunotherapies to further expand the immuno-oncology applications for its DepoVaxTM -based vaccines. Results from the first study in mouse tumor models have shown positive anti-cancer activity;

 

·appointed, in November 2016, Gabriela Rosu, M.D. as the Corporation’s first Chief Medical Officer. In this newly created executive role, Dr. Rosu will oversee the strategy and execution of the Corporation’s expanding clinical portfolio of programs;

 

·received positive topline results, in October 2016, from its Phase 1 trial evaluating the safety and immunogenicity of its DepoVaxTM -based small B cell epitope peptide vaccine candidate for RSV (“DPX-RSV”). The results, six months after vaccination, confirmed earlier-reported interim data on the ability of DepoVaxTM -formulated antigens to generate a relevant, durable immune response, that the vaccine had a positive safety profile and was well tolerated with no serious adverse events (“SAEs”) among all study participants. Also, antigen-specific immune responses were detected at least six months after the last vaccination in 93 percent (15/16) of patients receiving DPX-RSV, in both low-dose (8/8 participants) and high-dose (7/8 participants) cohorts;

 

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·received, in October 2016, the presentation by malarial researcher J. Alexandra Rowe, D Phil, of The University of Edinburgh, of topline preclinical data for Immunovaccine’s DepoVaxTM -based malarial vaccine which was presented at the World Vaccine Congress Europe in Barcelona, Spain on October 10, 2016. Results from studies in mice, conducted in collaboration with the University of Edinburgh’s Centre for Immunity, Infection and Evolution (“CIIE”) as part of a preclinical collaboration announced in June 2016, indicated that the novel CIIE-identified targets, when formulated in the DepoVaxTM targeting platform, generated strong, sustained, antibody responses that could prevent, after a single injection, a process in severe malaria known as ‘rosetting’;

 

·begun, in September 2016, the treatment of the first patient with recurrent ovarian cancer in a Phase 1b clinical study of Immunovaccine’s novel T cell activating therapy, DPX-Survivac, in combination with epacadostat and low-dose cyclophosphamide. This triple combination study is the result of collaboration between Immunovaccine and Incyte to assess the safety and effectiveness of DPX-Survivac, along with Incyte’s investigational oral indoleamine IDO1 inhibitor, epacadostat, and low-dose cyclophosphamide in patients with recurrent ovarian cancer who have measurable disease;

 

·obtained, in August 2016, new data from its Phase 1/1b trial in ovarian cancer, which reinforced previously reported results showing that DPX-Survivac was well tolerated, with no unexpected treatment-related SAEs and that it demonstrated the ability to generate a relevant, sustained immune response. New data from the Phase 1/1b trial yielded positive findings on tumor clinical response, including the presence of relevant circulating T cells and increased expression of several checkpoint inhibitor molecules;

 

·received, in July 2016, results from an interim analysis of the safety and immunogenicity of DPX-RSV in a Phase 1 clinical trial in healthy older adult volunteers completed by a team of investigators. The safety analysis indicates that the DPX-RSV was well tolerated among all study participants, with no SAEs recorded. Furthermore, immunogenicity data supported DPX-RSV’s ability to generate a relevant immune response; the vaccine candidate obtained antigen-specific antibody responses in 75 percent (%) of subjects vaccinated with the lower dose, and 100 percent (%) of those vaccinated with the higher dose;

 

·been awarded in June 2016 a subcontract by Leidos to evaluate Immunovaccine’s DepoVaxTM platform for the development of peptide based malaria vaccine targets. The subcontract is funded through Leidos’ prime contract from the U.S. Agency for International Development (USAID) to provide vaccine evaluations in the preclinical, clinical and field stages of malaria vaccine development. Leidos and Immunovaccine will work together to identify adjuvant and antigen combinations that can be used to protect against malaria and with the DepoVaxTM delivery system, formulate promising vaccine candidates for potential clinical testing;

 

·completed, in June 2016, a bought deal private placement (the “June 2016 Private Placement”) of units, for gross proceeds of approximately $8 million used to advance the research and development and clinical advancement of the Corporation’s cancer and infectious vaccine candidates and for general corporate and working capital purposes. Each unit was comprised of one Common Share and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant entitles its holder to acquire one additional Common Share at a price of $0.72 per Common Share until June 8, 2018;

 

·appointed, in June 2016, Shermaine Tilley, PhD, Managing Partner of CTI Life Sciences Fund, to its board of directors;

 

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·presented, in April 2016, new preclinical data at the American Association for Cancer Research (AACR) Annual Meeting 2016. The investigators’ findings showed that a combination immunotherapy using a DepoVax™-based vaccine could enhance the anti-tumor effects of a PD-1 blockade, controlling growth in advanced HPV-expressing tumors in animal models;

 

·appointed Andrew Sheldon to the board of directors, in April 2016. Mr. Sheldon was also appointed Chairman of the Board of Directors following the annual meeting of shareholders of the Corporation held on April 14, 2016;

 

·appointed, in April 2016, Frederic Ors as Chief Executive Officer, replacing Marc Mansour, Ph.D., who, prior to stepping down in March 2016, was Chief Executive Officer since June 2014, and a member of the Board of directors since December 2013. Mr. Ors had been with the Corporation since April 2015 as Chief Business Officer;

 

·begun, in April 2016, collaboration with Leidos on developing a vaccine against the mosquito-borne Zika virus and infection, which may be linked to neurological birth defects. This collaboration is the first to expand on Immunovaccine’s previously announced research project in which the Corporation will apply its DepoVax™ platform to development of a Zika virus vaccine candidate. The project builds upon earlier promising results with DepoVax™ vaccines targeting the Ebola virus, anthrax and RSV; and

 

·obtained, in January 2016, clearance from the U.S. Food and Drug Administration (“FDA”) and Health Canada to initiate a clinical study of DPX-Survivac in combination with low-dose cyclophosphamide and epacadostat. The Phase 1b clinical trial will assess the safety and effectiveness of Immunovaccine’s novel T cell activating therapy, DPX-Survivac, along with Incyte’s IDO1 inhibitor, epacadostat (INCB24360), and low-dose cyclophosphamide in patients with recurrent ovarian cancer who have measurable disease.

 

Year ended December 31, 2015

 

During the year ended December 31, 2015, the Corporation announced that it had:

 

·published research in December 2015, that used magnetic resonance imaging (MRI) to predict and optimize the efficacy of its cancer vaccines by measuring size changes in vaccine-draining lymph nodes. The preclinical study demonstrated that the increase in size of lymph nodes after vaccination with DepoVax™ technology indicated the strength of the immune response to the vaccine, and could help monitor and predict therapy success;

 

·initial results in November 2015, from a Phase 2 study demonstrated that DPX-Survivac can induce a strong immune response in diffuse large B cell lymphoma (“DLBCL”) tumors. This early result demonstrates that DPX-Survivac, Immunovaccine’s lead cancer immune therapy, can induce immune responses in hematologic cancers, such as DLBCL. Researchers observed changes in tumor-infiltrating T cells following administration of the DPX-Survivac therapy, which correlated with an immune response produced by DPX-Survivac and detected in the blood;

 

·safety data from a Phase 1 clinical study in October 2015, which showed that DPX-RSV was well tolerated in the Phase 1 study’s first 20 volunteers, of whom 8 subjects received the DPX-RSV vaccine. This data marks an important milestone for Immunovaccine as it provides the first safety profile of the DepoVax™-based vaccines for infectious diseases in healthy adults. Based on the vaccine candidate’s safety and immunogenicity demonstrated in the study, the independent Safety Review Committee (SRC) has allowed the study to proceed to its next step, which includes vaccinating volunteers with DPX-RSV at a higher dose;

 

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·obtained approval in July 2015, from the FDA for orphan drug status to DPX-Survivac for the treatment of ovarian cancer. This designation is valid for all applications of DPX-Survivac in ovarian cancer without restriction to a specific stage of disease;

 

·entered into an exclusive worldwide license agreement with PharmAthene, Inc. (“PharmAthene”) in July 2015 to develop and commercialize a Recombinant Protective Antigen Anthrax vaccine (“rPA”) candidate utilizing Immunovaccine’s proprietary DepoVax™ vaccine platform. Under the terms of this agreement, PharmAthene would work exclusively with Immunovaccine to develop an adjuvanted non-alum based rPA vaccine. In return, Immunovaccine granted PharmAthene exclusive worldwide rights to use DepoVax™ for the development and commercialization of the novel single-dose anthrax vaccine. This agreement was subsequently terminated in August 2016;

 

·data from its completed Phase 1 clinical trial in July 2015 with lead cancer immunotherapy candidate, DPX-Survivac, was published in the peer-reviewed journal Oncoimmunology. The manuscript “Survivin targeted immunotherapy drives robust polyfunctional T cell generation and differentiation in advanced ovarian cancer patients,” which was published in the June 26, 2015, edition of the journal, outlines the safety and immunogenicity of DPX-Survivac when combined with a low dose of cyclophosphamide taken orally by patients;

 

·enrolled the first healthy adult volunteer in June 2015 in a Phase 1 clinical study of its RSV vaccine. The Phase 1 study, for which the Corporation received Health Canada clearance in January 2015, will evaluate the safety and immune response profile of the DPX-RSV vaccine candidate in healthy adults. The study, conducted at the Canadian Center for Vaccinology (“CCfV”) in Halifax and led by Joanne Langley, M.D., will enroll 40 healthy adults who are 50 to 64 years of age. The vaccine will be tested at two different vaccine dose levels and study investigators will assess the vaccine’s safety and immune response profile following one or two immunizations of each dose level. Immunovaccine and the Canadian Institutes of Health Research (“CIHR”) are co-funding the trial;

 

·entered into a non-exclusive clinical trial collaboration with Incyte Corporation in June 2015 to evaluate the combination of Immunovaccine’s novel T cell activating immunotherapy, DPX-Survivac, with Incyte’s investigational oral indoleamine 2,3-dioxygenase 1 (IDO1) inhibitor, epacadostat (INCB24360). Immunovaccine and Incyte will co-fund and conduct a multicenter, open-label Phase 1B study to evaluate the safety, tolerability and efficacy of the novel combination in platinum-sensitive ovarian cancer patients who are at high risk of recurrence;

 

·received approval to trade its common shares on the OTCQX® Best Marketplace in the United States under the symbol “IMMVF” in April 2015;

 

·treated the first patient in March 2015, with DLBCL in a Phase 2 clinical study of its lead cancer immunotherapy DPX-Survivac. The Corporation-sponsored trial is evaluating DPX-Survivac in combination with oral cyclophosphamide, an immune modulating agent, in patients with recurrent DLBCL. DPX-Survivac is designed to activate killer T cells of the immune system against the survivin antigen found in a wide variety of solid tumors and blood cancers; and

 

·results that three different rPA vaccines formulated with its novel DepoVax™ enhancement technology protected animals against a lethal anthrax challenge after a single vaccination in March 2015. The National Institute of Health (“NIH”) led study demonstrates the potential of DepoVax™ as a universal enabler of single dose rPA-based anthrax vaccines. The anthrax challenge study was designed to evaluate the early protection potential of single dose DepoVax™/rPA vaccines. A very low dose of rPA that is known to provide partial protection in the rabbit model was used. This allowed a comparison of the potency of the various rPA vaccines formulated in DepoVax™.

 

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Year ended December 31, 2014

 

During the year ended December 31, 2014, the Corporation announced that it had:

 

·been granted, in December 2014, Fast Track designation by the FDA for DPX-Survivac as maintenance therapy in subjects with advanced ovarian, fallopian tube, and peritoneal cancer who have no measureable disease following surgery and front-line platinum/taxane chemotherapy to improve their progression-free survival. The FDA’s Fast Track program is designed to facilitate the development and expedite the review of new drugs with the potential to treat serious or life-threatening conditions and address an unmet medical need. This designation provides companies the opportunity for more frequent interactions with FDA during clinical development and the “rolling” submission of individual sections of a Biologics License Application (“BLA”) as they are completed for review by FDA. Additionally, therapies with Fast Track designation are eligible for priority review and/or accelerated approval, which have the potential to reduce the time required for FDA review and make a therapy available to patients earlier than would be traditionally possible;

 

·received final approval from Toronto Stock Exchange (“TSX”) to graduate from TSX Venture Exchange and list its Common Shares on TSX. The Common Shares commenced trading on TSX effective as of the opening of markets on November 26, 2014 and continue to trade under the symbol “IMV”. In conjunction with the listing of the Common Shares on TSX, the Common Shares were delisted from TSX Venture Exchange upon commencement of trading on TSX on November 26, 2014;

 

·received, in November 2014, clearance from Health Canada to conduct a Phase 2 clinical study of DPX-Survivac in patients with DLBCL. The Corporation-sponsored trial will evaluate DPX-Survivac, Immunovaccine’s lead cancer vaccine candidate, in combination with oral cyclophosphamide, an immune modulating agent, in patients with recurrent DLBCL. The study will be the first Phase 2 clinical trial specifically designed to evaluate the efficacy of DPX-Survivac. The open label trial will enroll up to 24 patients with recurrent survivin-expressing DLBCL with measurable disease. This will allow investigators to evaluate the clinical effect of DPX-Survivac in combination with oral cyclophosphamide and determine the clinical response rate in patients receiving the DPX-Survivac therapy. Investigators will also monitor immune responses and changes in tumor biopsies from these patients;

 

·positive results for a vaccine formulated in its DepoVax™ technology in an Ebola virus challenge study performed by the National Institute of Allergy and Infectious Diseases (“NIAID”). In a preliminary study using cynomolgus monkeys, which are particularly sensitive to the Ebola virus, all vaccinated subjects survived exposure to a lethal dose of the wild type Zaire strain of the virus. All unvaccinated control animals succumbed to the disease;

 

·positive results from anthrax challenge studies showing that non-human primates (monkeys), that were given a single dose of the DepoVax™-based vaccine were protected against a lethal anthrax challenge. Results from the studies, performed by NIAID, support the potential of a rapid acting, single dose DepoVax™-based vaccine for protection in the event of an anthrax bioterrorism threat;

 

·raised a total of $11.2 million in a public offering and private placement of securities the proceeds of which were used to advance the research and development and clinical advancement of the Corporation’s cancer and infectious disease vaccine candidates and for general corporate and working capital purposes;

 

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·appointed Wade K. Dawe and Alfred A. Smithers to its board of directors. to replace both Ms. Stephanie Léouzon and Dr. Llew Keltner who had stepped down from their respective position as directors of the Corporation;

 

·positive results from a Phase 1/1b clinical study of the Corporation’s lead cancer vaccine candidate, DPX-Survivac in ovarian cancer patients. One patient, who experienced a 43% reduction in tumor size, was classified as a partial response (PR) as measured by Response Evaluation Criteria In Solid Tumors (RECIST 1.1). The partial response, which persisted following discontinuation of treatment, was accompanied by reduction in levels of a commonly used ovarian cancer biomarker (“CA125”) and a significant increase in vaccine-induced immune responses. The patient’s tumor and CA125 levels remained stable for a year following initiation of the DPX-Survivac therapy demonstrating a potentially durable effect of the therapy;

 

·DepoVax™ was selected by the Dana-Farber Cancer Institute as the underlying adjuvanting technology for a new cancer vaccine that will be evaluated in a study in patients with cervical and head and neck cancer. Dana-Farber has been awarded a three-year, $1.2 million research grant from Stand Up To Cancer (SU2C) and the Farrah Fawcett Foundation to fund a Phase 1 clinical trial of the group’s peptide cancer antigen formulated in DepoVax™ in patients with HPV-related cervical and head and neck cancers; and

 

·positive results from anthrax challenge studies showing that rabbits which were administered a vaccine containing mutant recombinant Protective Antigen (“mrPA”) formulated in DepoVax™, were protected against a lethal anthrax challenge. All animals vaccinated with a single dose of mrPA-DepoVax™ containing as little as one third of a microgram of antigen were protected from anthrax infection. Four out of five animals vaccinated with mrPA-DepoVax™ containing one tenth of a microgram of antigen were also protected. These findings indicated that DepoVax™ can rapidly produce protection against anthrax with single doses of very little antigen.

 

IV.DESCRIPTION OF THE BUSINESS

 

Business Model and Strategy

 

Operating Strategy

 

Immunovaccine is a clinical-stage immuno-oncology company dedicated to making immunotherapy more effective, more broadly applicable and more widely available to people facing cancer. The Corporation’s lead product, DPX-Survivac has demonstrated the ability to induce robust immune responses with the potential of tumor shrinkage in advanced ovarian cancer and is currently being used in clinical trials in combination with Checkpoint inhibitors from the Corporation’s collaborators, Incyte and Merck. The target of this T cell stimulating therapeutic cancer vaccine is broadly applicable to many different cancers. The novel mechanism of action of the underlying delivery platform, DepoVaxTM is to promote uptake and extend exposure of antigens and adjuvants to cells of the immune system, which enhances and sustains immune responses. This allows Immunovaccine to leverage this technology to become a preferred partner in combination trials in hard to treat cancers, and to explore additional immune-oncology targets, such as HPV related cancers and neoepitopes. In addition, this platform is being used in other market indications, such as infectious disease vaccines, where the Corporation has demonstrated safety and immunogenicity with a novel proprietary vaccine to prevent RSV infections. The Corporation is currently collaborating with partners such as Incyte, Merck, Leidos and the Dana Farber Cancer Institute to explore novel applications for the DepoVaxTM platform.

 

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The Corporation has a clinical-stage cancer immunotherapy, DPX-Survivac. Immunovaccine believes the principles behind a successful cancer immunotherapy should include a targeted antigen and an effective adjuvanting and vaccine delivery technology, combined with a complementary therapeutic strategy. Antigens used in DPX-Survivac are believed to specifically target tumor cells without harming normal, healthy cells. These antigens are combined with the Corporation’s DepoVax™ platform in an effort to optimize the presentation of these antigens to the immune system, resulting in an enhanced immune response. To be successful against cancer, the Corporation believes the vaccine must be administered in the right therapeutic setting, which includes a combination of therapies that help target various aspects of cancer. Immunovaccine also believes that the effect of the vaccine may be enhanced if an immune modulator is used simultaneously to prevent a patient’s immune system from overriding the positive response to the vaccine. The Corporation’s goal in immuno-oncology is to advance its proprietary vaccines in combination trials with pharmaceutical and large biotechnology companies to establish strategic partnerships and support further development and commercialization.

 

In collaboration with commercial and academic partners, the Corporation is also expanding the application of DepoVax™ as a delivery platform for vaccines targeted against infectious diseases. Pre-clinical studies have indicated that the platform may allow the development of enhanced vaccines for a wide range of infectious diseases by generating a stronger and more durable immune response more quickly than is possible with existing delivery methods. For vaccine targets that are poorly immunogenic, the platform may significantly reduce the number of immunizations required. The Corporation’s goal in infectious diseases is to out-license the DepoVax™ platform to selected partners. The Corporation is also exploring new applications of the DepoVax™ platform on its own and with partners.

 

Financing and Partnering Strategy

 

Immunovaccine relies on equity financing and non-dilutive private and public partnerships to fund its development programs. Applying this strategy, the Corporation has obtained more than $15 million in government funding, including interest-free loans and government grants, from both the Province of Nova Scotia and from the Federal government through the Atlantic Canada Opportunities Agency (“ACOA”). The Corporation has raised more than $64 million in equity through prospectus offerings, private placement offerings and the exercise of stock options and warrants. Most recently, the Corporation completed two private placement offerings for an aggregate of approximately $16 million in 2016.

 

In addition to using its own resources to develop its products through clinical trials, the Corporation is also involved in various collaborations and licensing deals to accelerate the development of its DepoVax™ platform and immuno-oncology products. The Corporation is conducting a collaboration with Incyte, to evaluate the combination of the Corporation’s lead cancer immunotherapy, DPX-Survivac, with their IDO1 inhibitor epacadostat in a co-funded Phase 1b clinical trial in ovarian cancer patients. Results from this study may lead to an expansion of the clinical collaboration to investigate other cancers. In February 2017, the Corporation announced an Investigator-Sponsored Phase 2 Clinical Trial in Ovarian Cancer in combination with Merck’s checkpoint inhibitor Pembrolizumab in patients with recurrent, platinum-resistant ovarian cancer. UHN’s Princess Margaret Cancer Centre will conduct the Phase 2 non-randomized, open-label trial designed to evaluate the potential anti-tumor activity of the combination of Pembrolizumab, DPX-Survivac, and low-dose cyclophosphamide.

 

Other programs include: a clinical research collaboration with the CCfV for the Phase 1 clinical trial funded by the CIHR of an RSV vaccine; a collaboration with the Dana Farber Cancer Institute funded by Stand Up 2 Cancer-Farrah Fawcett Foundation for producing a DepoVax™-based vaccine for HPV related cancers; and a collaboration with UConn Health on a pre-clinical study to evaluate the immunologic and anti-tumor activity of patient specific neoepitopes. The underlying goal of these types of partnerships is to produce pre-clinical and clinical data that could lead to licensing agreements, either to allow the use of the Corporation’s DepoVax™ platform by others or provide access to specific pipeline product candidates.

 

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Immunovaccine is also collaborating with Leidos on the development of a Zika virus vaccine and a malaria vaccine. The Corporation also maintains a commercial relationship with Zoetis, which has licensed the Corporation’s delivery technology platform to develop vaccines for livestock. These license agreements include upfront signing fees, milestone payments and royalties from future vaccine sales.

 

The Corporation intends to be opportunistic in the development of its products by exploring a variety of avenues, including co-development through potential collaborations, strategic partnerships or other transactions with third parties, and merger and acquisitions opportunities. The Corporation may seek additional equity and non-dilutive funding and partnerships to advance the development of its vaccine product candidates.

 

Corporation’s Product Pipeline

 

DepoVax™ Vaccine Enhancement Platform

 

The DepoVax™ platform is a unique and patented formulation providing a new way to present active ingredients to the immune system. It is a combination of antigens, plus adjuvant (immune enhancers) formulated in lipid nanoparticles and, after freeze drying, suspended directly into oil. DepoVax™ has a novel mechanism of action whereby it promotes uptake and extends exposure of active antigens and adjuvants, which enhances and sustains the body’s own immune system responses. The DepoVax™ platform forms the basis of Immunovaccine’s therapeutic cancer and infectious diseases vaccine candidates.

 

The Corporation believes the ability of DepoVax™ to induce robust cellular immune responses makes the platform uniquely suitable for cancer immunotherapies, which are designed to target tumor cells. DepoVax™ can induce antigen-specific “poly-functional” cellular responses, which are postulated to be required for effective tumor control.

 

DepoVax™-formulated vaccines have shown an ability to induce rapid and robust immune responses that may protect against disease agents with as little as one dose. The single-dose capability could be a key factor for developing rapid response vaccines for pandemics and infectious disease outbreaks. The DepoVax™ platform can be combined with a variety of antigens, including recombinant proteins, synthetic peptides and nucleic acids, viruses and a wide range of adjuvants, which provides both versatility and flexibility to develop many different vaccine products using a single platform.

 

This unique formulation provides extended chemical stability. DepoVax™-based products are lyophilized and stored in a dry format, which provides the added benefit of an extended shelf life. The DepoVax™ formulation is designed to be easy to re-suspend and administer.

 

The ongoing clinical studies with DepoVax™ based vaccines for the treatment of cancer and for protection from infectious diseases are expected by the Corporation to demonstrate the competitive advantages of this platform.

 

DPX- Survivac

 

Product Overview

 

DPX-Survivac uses survivin-based antigens licensed from Merck KGaA, on a world-wide exclusive basis, formulated in DepoVax™. Survivin is a major tumor-associated antigen over-expressed in many cancers, making it a viable target for a broadly applicable immunotherapy. DepoVax™ delivers the survivin-based antigens in a lipid depot-based format designed to generate a strong and prolonged immune response.

 

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Survivin is essential for the survival of cancer cells and functions as an inhibitor of cell death, known as apoptosis. The presence of high levels of survivin in cancer cells is believed to make them susceptible to a survivin-targeted vaccine. The Corporation’s survivin-based vaccine candidate, DPX-Survivac, aims to train the immune system to recognize and kill survivin-containing cancer cells. This could provide a clinical benefit to patients by delaying cancer progression and/or increasing overall survival. The United States National Cancer Institute has recognized survivin as a promising antigen for cancer treatment based on its specificity, over-expression in cancer cells and immunogenicity potential.

 

The Corporation believes DPX-Survivac could have broad commercial potential as a cancer immunotherapy because it may be applicable for the treatment of multiple solid tumors and hematological cancers, including ovarian, glioblastoma, breast, pancreatic, multiple myeloma, B-cell lymphoma, and melanoma, among other cancers. The Corporation intends to continue the development of DPX-Survivac in a broader range of cancer indications to evaluate additional opportunities.

 

Clinical Trial Development – Current and Planned Trials

 

In February 2017, the Corporation announced an Investigator-Sponsored Phase 2 Clinical Trial in ovarian cancer in combination with Merck’s checkpoint inhibitor Pembrolizumab in patients with recurrent, platinum-resistant ovarian cancer. UHN’s Princess Margaret Cancer Centre will conduct the Phase 2 non-randomized, open-label trial designed to evaluate the potential anti-tumor activity of the combination of Pembrolizumab, DPX-Survivac, and low-dose cyclophosphamide. It is expected to enroll 42 subjects with advanced epithelial ovarian, fallopian tube or primary peritoneal cancer. The study’s primary objective is to assess overall response rate. Secondary study objectives include progression free survival rate, overall survival rate, and potential side effects, over a five-year period.

 

In June 2015, the Corporation announced it had entered into a non-exclusive clinical trial collaboration with Incyte to evaluate the combination of Immunovaccine’s novel T cell activating immunotherapy, DPX-Survivac, with Incyte’s investigational oral IDO1 inhibitor, epacadostat. Immunovaccine and Incyte are co-funding and conducting a multicenter, open-label, Phase 1b study to evaluate the safety, tolerability and efficacy of the novel combination in platinum resistant or sensitive ovarian cancer patients who are at high risk of recurrence. The investigational new drug (“IND”) application for the study, which will test the triple combination of DPX-Survivac, epacadostat and low dose oral cyclophosphamide, was approved by the FDA and Health Canada in January 2016. The study was initiated on September 8, 2016 and is anticipated to enroll up to 40 patients. Results from this study may lead to an expansion of the clinical collaboration to investigate other cancers. The Corporation announced in March 2017 the first interim data analysis from this clinical study. The analysis included the results of blood tests, tumor biopsies and CT scans to assess safety, disease progression and T-cell response for the first four evaluable patients in the trial. All patients enrolled in the trial have recurrent ovarian cancer with evidence of progressive disease. Based on the interim analysis, the combination therapy appears to have an acceptable tolerable safety profile, with a single grade 3 and single grade 4 event reported and no serious adverse events (SAEs). At the time of the interim analysis, three of four patients exhibited stable disease, while a fourth patient progressed and exited the trial. In addition, researchers observed an increased T-cell activity in tumors in three of the four patients based on RNA sequencing and indications of early tumor shrinkage in the patient who has been in trial for the longest duration thus far (based on CT scan at day 140).

 

The Corporation initiated a Phase 2 clinical trial in 2015, in DLBCL at the Ottawa Hospital Research Institute and the Odette-Sunnybrook Cancer Centre. The first patient was dosed in March 2015. Researchers are seeking to enroll up to 24 patients. The open label study is designed to determine the objective response rate of patients with recurrent survivin-expressing DLBCL when treated with DPX-Survivac in combination with low dose oral cyclophosphamide. The Corporation announced in November 2015 that the initial results from a Phase 2 study demonstrated that DPX-Survivac can induce an immune response in DLBCL tumors. This early result demonstrates that DPX-Survivac, Immunovaccine’s lead cancer immune therapy, can induce immune responses in hematologic cancers, such as DLBCL. Researchers observed changes in tumor-infiltrating T cells following administration of the DPX-Survivac therapy, which correlated with an immune response produced by DPX-Survivac and detected in the blood.

 

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The Corporation is in the process of completing a Phase 1b dose-optimizing trial in ovarian cancer. Interestingly, a patient enrolled in the Phase 1b trial with stable disease and rising blood levels of the cancer biomarker CA125 experienced a 43% reduction in the size of her tumor within five months, and the tumor remained stable for more than a year. The partial response, defined as a shrinking of tumor size by at least 30%, using RECIST, was accompanied by reduction in levels of a commonly used ovarian cancer biomarker CA125 and a significant increase in vaccine-induced immune responses in this patient. This durable clinical response highlights the therapeutic potential of DPX-Survivac for ovarian cancer patients.

 

The Corporation announced additional data from its Phase 1b dose-optimizing trial in ovarian cancer in 2016, which reinforced previously reported results showing that DPX-Survivac was well tolerated with no unexpected treatment-related SAEs and that it demonstrated the ability to generate a relevant, sustained immune response. This has allowed the Corporation to select a preferred dosing schedule of DPX-Survivac for upcoming studies. New data from the Phase 1/1b trial also demonstrated increased expression of several checkpoint inhibitor molecules.

 

The Corporation has terminated the agreement with Professor Marianna Nuti, Ph.D., Department of Experimental Medicine at the University of Rome, who was going to conduct an investigator-sponsored trial on DPX-Survivac in patients with glioblastoma. Due to the delay in obtaining approval by the European regulatory agency to test this vaccine candidate in Europe, there was a significant delay in initiating this planned trial and in the process, access to the funding grant had expired. As this trial is not in line with the current business strategy of combination therapy with checkpoint inhibitors, it was determined to cease all efforts regarding this planned trial.

 

The Corporation is pursuing opportunities for additional trials with biotechnology and pharmaceutical companies, including combination therapies with DPX-Survivac as well as other applications of the DepoVax™ platform.

 

Clinical Trial Development – Completed Trials

 

Immunovaccine completed a Phase 1 clinical trial of DPX-Survivac in ovarian cancer patients, which was conducted at six clinical sites in the United States and Canada. The Phase 1 trial was an open-label clinical trial designed to evaluate sequentially, the safety of two DPX-Survivac dosing regimens in 18 patients. This Phase 1 clinical trial established the safety and immunogenicity of DPX-Survivac in patients with advanced ovarian cancer.

 

The Corporation released interim results in October 2012, further interim results in January 2013 and final detailed positive results in June 2013 on the Phase 1 clinical trial. The analysis, which included all 18 patients enrolled in the study, confirmed that 12 of the 18 patients who received the DPX-Survivac combination therapy demonstrated antigen-specific immune responses. They were measured by at least one of the study’s three immune monitoring assays (ELISpot, tetramer analysis and multi-parametric intracellular cell staining). In 11 of 12 patients, the immune responses were confirmed by two of the assays (five patients) or three of the assays (six patients) performed. These immune responses were established with one or two vaccinations and further increased or maintained with follow-up booster vaccinations. Importantly, poly-functional CD8 responses were reported, indicating the activation of high quality CD8 T cells, and the responses were maintained with booster vaccinations. The activation and maintenance of these specific immune cells is of particular interest in immunotherapy since CD8 T cells are implicated in identifying cancer cells, infiltrating tumors and killing cancer targets.

 

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Also, in the Phase 1 clinical trial, DPX-Survivac was deemed well-tolerated with no significant systemic adverse events reported in any patients recruited in this study. Reported adverse events were related primarily to grade 1-2 injection site reactions, which were experienced by the majority of patients after repeated vaccinations. Those patients presenting the strongest immune responses were more likely to exhibit more pronounced injection site reactions. Grade 3 injection site ulcerations, which were an expected adverse event with this vaccine, were experienced by three patients during the trial. Upon a six-month follow-up for the majority of patients, a trend of delayed progression was observed in patients who had strong immune responses to DPX-Survivac. The trend of delayed cancer progression, which was not statistically significant, may be attributed to the therapy or may be attributed to other unrelated factors. The results from this clinical trial were published in the peer-reviewed scientific journal Oncoimmunology in May 2015.

 

Immunovaccine highlighted results demonstrating that metronomic cyclophosphamide (“mCPA”), an immune modulating agent, enhanced the immunogenicity of DepoVax™-based vaccines in preclinical cancer models consistent with previously reported Phase 1 data showing a similar enhancement of DPX-Survivac in patients. Importantly, the animal studies demonstrated the combination therapy’s ability to eliminate advanced tumors that could not be treated with vaccine or mCPA alone. Tumors exposed to the combination therapy specifically exhibited an increase in T cell activation markers, suggesting increased immune-mediated anti-tumor activity at the tumor site with the vaccine/mCPA therapy and further supporting the use of the combination therapy in clinical trials. This work was published in the peer reviewed scientific journal Oncoimmunology in November 2014.

 

Orphan Drug Status and Fast Track Designation

 

The Corporation announced in November 2016 that the European Medicines Agency (“EMA”) granted orphan drug designation status to Immunovaccine’s DPX-Survivac in ovarian cancer. The EMA grants orphan designation to medicines intended to treat, prevent or diagnose life threatening and debilitating disease, with a prevalence no greater than five in 10,000 in the European Union and where no satisfactory method of treatment, prevention or diagnosis exists, unless the proposed medicine offers a significant benefit to those with the condition.

 

The Corporation announced in July 2015 that the FDA had granted orphan drug status to DPX-Survivac for the treatment of ovarian cancer. This designation is valid for all applications of DPX-Survivac in ovarian cancer without restriction to a specific stage of disease.

 

Immunovaccine had previously received FDA fast track designation for DPX-Survivac. The designation is intended for patients with no measurable disease after their initial surgery and chemotherapy.

 

DPX-0907

 

Product Overview

 

DPX-0907 combines the Corporation’s DepoVax™ delivery technology with seven HLA-A2-restricted cancer-specific antigens licensed from Immunotope Inc. (“Immunotope”).

 

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Clinical Trial Development – Completed Trials

 

The Corporation completed a Phase 1 clinical trial of DPX-0907 and the results of the trial were released in June 2011, with more detailed results published in the Journal of Translational Medicine in August 2012. The Phase 1 trial was conducted at five centers in the United States. In this open-label, dose-escalating trial, patients received three injections (0.25 mL or 1 mL doses) of the active immune therapy DPX-0907, three weeks apart.

 

Immunovaccine also terminated its exclusive world-wide licence with Immunotope for the use of certain patented antigens that were being used in DPX-0907 as this approach is not in line with the current business strategy of combination therapy with checkpoint inhibitors.

 

DPX- RSV

 

Product Overview

 

A significant component of the Corporation’s business strategy is licensing the DepoVax™ platform within infectious and other diseases. The DepoVax™ adjuvanting platform has the potential to generate a rapid and robust immune response, often in a single dose. The unique vaccine enhancement and single-dose capability could prove to be beneficial in targeting difficult infectious and other disease candidates.

 

The Corporation has performed pre-clinical research activities for a vaccine targeting RSV, which is the second leading cause of respiratory illness in infants, the elderly and the immunosuppressed. Currently, there is no vaccine available for this virus and Immunovaccine is seeking to develop a novel vaccine formulation to be used in elderly and healthy adults, including women of child-bearing age. Immunovaccine has in-licensed the RSV antigen exclusively from VIB, a non-profit life sciences research institute funded by the Flemish government, to expand its pipeline of vaccine candidates. The novel RSV antigen being evaluated in DepoVax™ is based on the short hydrophobic protein present at low levels on the surface of the RSV virion but more importantly also present on the surface of RSV-infected cells. This vaccine has a unique mechanism of action, in that the resultant antibodies bind to and destroy infected cells rather than directly bind to and neutralize free virus.

 

Clinical Trial Development – Current Trial

 

A Phase 1 clinical study is being conducted in Canada with the Corporation’s RSV vaccine in healthy adults. The RSV vaccine is formulated in Immunovaccine’s proprietary DepoVax™ adjuvanting platform and is initially being developed to protect the elderly population from infection. The Phase 1 study, which is the first clinical trial of a DepoVax™-based vaccine in an infectious disease indication, is evaluating the safety and immune response profile of the RSV vaccine candidate in 40 healthy adults. The first patient was enrolled on June 30, 2015, at the Canadian Center for Vaccinology in Halifax. The trial is being co-funded by Immunovaccine.

 

On July 6, 2016, the Corporation announced positive interim results from this trial. The DPX-RSV trial included 40 healthy older adult volunteers (age 50-64 years) and two dose cohorts, with 20 subjects in each cohort. Investigators analyzed the safety and immune response data of all participants up to study day 84. The safety analysis indicates that the DPX-RSV was well tolerated among all study participants, with no SAEs recorded. Furthermore, immunogenicity data supported DPX-RSV’s ability to generate a relevant immune response; the vaccine candidate obtained antigen-specific antibody responses in 75 percent (%) of subjects vaccinated with the lower dose and 100 percent (%) of those vaccinated with the higher dose.

 

On October 13, 2016, the Corporation announced positive topline results from this trial. The report outlined that more than six months after the last vaccination, 15 of 16 participants (93%) who received DPX-RSV demonstrated antigen-specific immune responses. The vaccine candidate also continued to have a positive safety profile and was well tolerated with no SAEs among all study participants.

 

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Immunovaccine has exclusive worldwide licenses on applications that target the SH ectodomain antigen in RSV. The Corporation intends to explore opportunities to out-license this product to potential partners.

 

Zika Virus Vaccine Antigen

 

Immunovaccine and Leidos, a health, national security and infrastructure solutions company, are collaborating on developing a vaccine against the mosquito-borne Zika virus and infection, which may be linked to neurological birth defects. This collaboration, amended on June 23, 2016, is the first to expand on Immunovaccine’s research project in which the Corporation will apply its DepoVax™ platform to development of a Zika virus vaccine candidate. Under the terms of the agreement, Leidos will utilize its Virtual Pharmaceutical Development Program to lead an antigen discovery and development team to identify the best candidate antigens for protecting against infection by the Zika virus. Immunovaccine will then formulate new antigens in its DepoVax™ delivery system for pre-clinical testing. The parties expect that this project could serve as a replicable model for expediting the development and manufacture of vaccines to address current and future health emergencies.

 

Licensing Agreements

 

While the Corporation is focused on developing a pipeline of cancer immunotherapies, it is also pursuing opportunities to license the Corporation’s platform technology to other parties interested in creating enhanced vaccines on an application-by-application basis.

 

Intellectual Property

 

The Corporation strives to protect its intellectual property in established, as well as emerging, markets around the world. The Corporation’s intellectual property portfolio relating to its vaccine platform technology includes nine patent families, the first of which contains eight patents issued in five jurisdictions (United States, Europe, Canada, Japan and Australia). The eight other families collectively contain twenty patents issued in nine jurisdictions (United States, Europe, Canada, Australia, Japan, India, Singapore, China and separately Hong Kong) and thirty-nine pending patent applications in eleven jurisdictions. U.S. Patent 6,793,923, issued in 2004, contains claims to the Corporation’s platform, covering “any antigen, any adjuvant in any liposome and any oil”. The platform name is protected by trademarks in the United States, Canada and Europe.

 

Additional granted patents include:

 

·European Patent 1,333,858, granted February 8, 2006;
·Australian Patent 2002214861, granted January 11, 2007;
·Japanese Patent 4164361, granted August 1, 2008;
·United States Patent 7,824,686, granted November 2, 2010;
·Australian Patent 2006301891, granted December 20, 2012;
·Chinese Patent 200680036783, granted September 18, 2013;
·European Patent 1,948,225, granted December 11, 2013;
·United States Patent 8,628,937, granted January 14, 2014;
·Australian Patent 2008303023, granted April 24, 2014;
·Japanese Patent 5528703, granted April 25, 2014;
·Australian Patent 2008307042, granted May 15, 2014;

 

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·Singaporean Patent 166901, granted May 27, 2014;
·Japanese Patent 5591705, granted August 8, 2014;
·European Patent 2,296,696, granted August 27, 2014;
·Australian Patent 2009253780, granted November 27, 2014;
·Japanese Patent 5715051, granted March 20, 2015;
·Japanese Patent 5731198, granted April 17, 2015;
·Indian Patent 266563, granted May 18, 2015;
·Canadian Patent 2,428,103, granted June 9, 2015;
·Hong Kong Patent 115642, granted July 24, 2015;
·United States Patent 9,114,174, granted August 25, 2015;
·Chinese Patent 200880110239.7, granted March 9, 2016;
·Chinese Patent 200980120883.7, granted April 6, 2016;
·European Patent 2,197,497, granted June 1, 2016;
·Japanese Patent 6016970, granted October 7, 2016;
·United States Patent 9,498,493, granted November 22, 2016; and
·Canadian Patent 2,700,828, granted January 24, 2017.

 

Since 2008, the Corporation has filed seven Patent Cooperation Treaty (“PCT”) applications relating to the Corporation’s technologies, some or all of which have now been filed in the United States, Europe, Japan, Canada, Australia, China, India, Brazil, Israel, Hong Kong and Singapore. These PCT applications cover specific DepoVax™ compositions with broad utility for infectious diseases and cancer applications. Some of these applications have issued to patent as listed above. These patents, together with the other pending applications if allowed, extend patent protection for some or all DepoVax™-based vaccines, and/or uses thereof, approximately up to the year 2036. The latest published PCT application covers methods for potentiating an immune response using a combined approach of a depot-forming vaccine (e.g. DepoVax™) and a non-depot-forming vaccine.

 

The Corporation also has a licensing agreement with VIB in relation to patent applications for a Respiratory Synctial Virus Vaccine (PCT/EP2011/070161) that were filed in Australia, Canada, China, Europe, Japan, and the United States. The licensing agreement stipulates that the Corporation will assume the cost of prosecuting and maintaining the fees associated with the patent applications and issued patents. These applications if allowed, could provide patent protection for a RSV vaccine formulated in DepoVax™, thereby extending patent protection for DepoVax™-based vaccines. To date, a patent on this RSV vaccine technology was issued in China, Japan and the United States.

 

Markets and Competition

 

Therapeutic cancer vaccines

 

Cancer is considered one of the most widespread and prevalent diseases globally. According to Global Cancer Facts & Figures, 3rd edition (released February 2015 by the American Cancer Society), it is predicted that new cancer cases will rise to 21.7 million and the number of cancer deaths to 13 million by 2030. Conventional cancer treatment involves surgery to remove the tumor when possible, as well as chemotherapy and radiation. Chemotherapies are widely used despite their associated toxicities because they interfere with the ability of cancer cells to grow and spread. However, tumors often develop resistance to chemotherapies, limiting their efficacy in preventing tumor recurrence. Despite recent advances, independent sources note a high unmet medical need in cancer therapy, noting the median survival rate remains poor. Cancer immunotherapies, including therapeutic cancer vaccines, may provide a new and effective treatment. Transparency Market Research issued a report in December 2016 estimating the 2015 global cancer immunotherapy market at USD$37.50 billion. With its revenue expected to progress at a very strong compound annual growth rate (“CAGR”) of 14.6% within a forecast period from 2016 to 2024, the global cancer immunotherapy market is expected to reach USD$124.88 billion by the end of 2024 based on their study.

 

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Cancer immunotherapy seeks to harness the immune system to assist in the destruction of tumors and to prevent their recurrence. There has been significant interest in the field of cancer immunotherapy stemming from recent clinical success in prolonging patient survival with novel compounds. The ability to apply these appropriately has resulted from a greater understanding of the immune dysfunction that is characteristic of cancer. One area in which there have been breakthroughs has been in the area of checkpoint inhibitors, compounds that target key regulatory molecules of the immune system. Yervoy (anti-CTLA-4, or ipilumumab, developed by Bristol-Myers Squibb) was the first compound in this class to be approved for use in advanced metastatic melanoma. In cancer, these regulators (CTLA-4 and more recently PD-1 and its ligand PD-L1) act to inhibit CD8 T cell mediated anti-tumor immune responses that are crucial for tumor control. Monoclonal antibodies that target PD-1 and PD-L1 have shown unusual efficacy in cancer patients, with a significant percentage of patients experiencing durable response to these therapies. Several of these compounds are in advanced clinical trials, with one compound, Merck’s Keytruda (pembrolizumab), having received FDA approval in September of 2014 for advanced melanoma patients who have stopped responding to other therapies. Bristol-Myers Squibb’s compound nivolumab (Opdivo) has also been approved in the United States and Japan.

 

In addition to clinical development of the above compounds utilized alone, there also has been additional development using these compounds in combination. Notably, the use of the PD-1 inhibitor, Opdivo, in combination with the anti-CTLA-4 inhibitor, Yervoy, has entered Phase 3 clinical trials in metastatic melanoma and renal cell carcinoma, after promising data in earlier trials. At the 2015 American Association of Cancer Research meeting and simultaneously published in the New England Journal of Medicine, it was reported that the combination in metastatic melanoma demonstrated an objective response rate of 61% as compared to 11% for Yervoy alone. This combination received approval from the FDA for use in BRAF V600 Wild-Type unresectable or metastatic melanoma in October 2015, signalling the first FDA approved combination of immune-oncology agents. There are also a number of other inhibitors in clinical development that are currently being studied in combination with these inhibitors, many at an early clinical stage.

 

Despite significant interest regarding the clinical potential of these inhibitors, there is an acceptance that more will be needed in a majority of patients. It will not be enough just to block the ability of tumors to inhibit the immune system. Key opinion leaders in the field have indicated that the ideal combination, with checkpoint inhibitors, is likely to be a therapy that drives tumor specific immune responses. These include novel cancer vaccines and T cell based therapies. These therapies fit well with checkpoint inhibition therapy because they simultaneously activate strong tumor specific immune responses, while releasing the brakes on immune suppression. The success of such combinations should allow pharmaceutical companies to significantly expand the market of their checkpoint inhibitors, which are currently effective in approximately 10% to 30% of patients.

 

Pharmaceutical companies, including Merck & Co., Inc. and AstraZeneca PLC, are becoming more receptive to combining their checkpoint inhibitors with clinical compounds belonging to other pharmaceutical and biotechnology companies. Recently, several pharmaceutical companies and large NASDAQ listed biotechnology companies have announced collaborations to test combination immunotherapies in clinical trials.

 

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The Corporation believes that cancer vaccines will become an important component of these novel combination immunotherapies, the synergistic benefits with other T cell activation therapies, could become an essential part of a multi-pronged approach for the treatment of cancer.

 

According to a BCC Research Report released in January 2015, the global market for cancer vaccines, including both prophylactic and therapeutic vaccines, was USD$4.5 billion in 2013, reached USD$4.0 billion in 2014 and is expected to reach USD$4.3 billion by 2019. While the majority of this reflects sales of prophylactic vaccines, the area of therapeutic cancer vaccines is projected by some industry analysts to experience significant growth. Major pharmaceutical players, such as GlaxoSmithKline plc and Merck KGaA, have therapeutic cancer vaccines currently advancing in Phase 3 clinical trials.

 

Infectious Diseases

 

Vaccines are credited with saving millions of lives since their introduction into medical practice and the healthcare system. The reduction in morbidity and mortality caused by many infectious diseases world-wide can be directly correlated to currently available vaccines. According to data from the U.S. Centers for Disease Control and Prevention, ten infectious diseases have been at least 90% eradicated in the United States thanks to vaccines.

 

However, during the past decade, diseases thought to be under control or retreating, such as measles, mumps and pertussis have re-emerged, mostly due to decline in childhood vaccination rates. In addition, infectious diseases such as influenza, meningitis and yellow fever continue to be a significant public health concern, despite the availability of vaccines. Other diseases without a suitable vaccine, such as dengue and malaria have extended their geographical reach, due to expansion of the insects which carry them. While the effort to control these known infectious diseases continues, more than 30 additional emerging diseases have been identified in humans for the first time over the past two decades, such as severe acute respiratory syndrome (SARS) and Middle East respiratory virus (MERS) coronaviruses.

 

There is an increased awareness of the impact of current and emerging infectious diseases. Demand for newer treatments and vaccines are growing globally. Decision Resources reports that the world-wide market for vaccines against infectious diseases more than doubled between 2005 and 2011. The global market for infectious diseases treatment was valued in January 2016 by analyst Peggy Lehr of BCC Research at USD$108.4 billion in 2015, should reach USD$126.2 billion in 2016 and USD$183.2 billion in 2021, demonstrating a CAGR of 7.7% from 2016 to 2021. According to TechNavio’s analysts, the global preventable vaccines market is expected to grow at a CAGR of 10.16% from 2014-2019.

 

Many infectious diseases lack effective prophylactic vaccines, and the industry faces a variety of challenges in vaccine design and production. Adjuvants and delivery methods are viewed as key technologies for the success of future vaccines. Efforts to decrease treatment duration and develop single-dose vaccines are a strong focus at the research level to improve patient compliance and decrease monitoring of therapy by the healthcare provider. Better diagnostics are being sought for many infectious diseases. This advance could result in additional market expansion by increasing the number of patients identified for vaccine treatment. The Corporation believes this current market landscape offers significant commercial opportunities for both its technology platform and vaccines.

 

Pharmaceutical companies dominating this infectious diseases vaccine market include Sanofi Pasteur, GSK, Merck and Pfizer. Additionally, government and non-profit institutions play a significant role in vaccine development in both industrialized and developing markets. Support for infectious disease vaccine development and commercialization is also available through government and non-profit funding and granting mechanisms.

 

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Respiratory Syncytial Virus (RSV)

 

RSV is a respiratory virus that infects the lungs and breathing passages. It can be severe in infants, the elderly, and patients with compromised immune systems. RSV is the single most common cause of severe respiratory illness in infants under the age of one and is more often being recognized as an important cause of respiratory illness in older adults. Globally, it is estimated that 64 million cases of RSV infection occur annually, with 160,000 deaths. A vaccine that strengthens the immunity of adults to this virus would lower their risk of contracting infection later in life. It would also create a cocoon of protection in the adult population (i.e. parents, grandparents and caregivers) to protect vulnerable infants from contracting this virus.

 

There is currently no vaccine available for the prevention of RSV.

 

The World Health Organization (“WHO”) has designated RSV as a high-priority target for vaccine development. RSV is a significant problem in the elderly, particularly if they reside in a long-term care facility or participate in other senior day-care programs. RSV attack rates in nursing homes in the United States are approximately 5% to 10% per year with a 2% to 8% case fatality rate, amounting to approximately 10,000 deaths per year among persons greater than 64 years of age.

 

A vaccine would likely provide patients with a stronger efficacy profile and a more sustained immune response. The Corporation expects that the development of a vaccine with these improved characteristics could expand the market potential, adding the elderly and immunocompromised patients. With these new patient populations, market forecasts could approach $1 billion.

 

Although there have been relatively few developments related to RSV over the past decade, a renewed interest in the area due to new technologies and early research into new methods of addressing immunity, such as maternal immunity transfer for pediatric RSV, could result in new transactions or alliances over the next several years. Most transactions and alliances that have taken place in this sector have minimized the risk with a relatively modest upfront payment, followed by larger milestone payments subject to successful progression through clinical development and commercialization.

 

Animal Health Market

 

According to industry sources, the world animal health market, defined as a sector spanning veterinary pharmaceuticals, biologics and medicated feed additives, was approximately USD$23 billion in 2013. The animal vaccine market, subdivided into livestock, companion animal and smaller segments including equine, poultry and aquatic, makes up approximately 20% of the total animal health market. Europe is the leading market for veterinary vaccines followed closely by North America. Asia-Pacific is the fastest growing market for veterinary vaccines.

 

The world-wide livestock vaccine market is comprised primarily of cattle and swine vaccines, along with, to a lesser extent, vaccines for sheep, poultry and other food animals. There are only a few players in the animal vaccine market including Zoetis, Boehringer Ingelheim, Merck Animal Health (MSD Animal Health), Novartis AG and AgriLabs, LLC. The majority of today’s vaccines for the livestock market require a booster administration, which increases the handling. Therefore, a vaccine that requires fewer doses (one dose, in some cases) for efficacy could be a significant innovation and have the potential to replace existing products.

 

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Safety Profile

 

The Corporation has demonstrated the safety and immunogenicity potential of the DepoVax™ platform in humans by completing the Phase 1 clinical trial of DPX-0907. In the Phase 1 clinical trial, 23 patients were vaccinated with DPX-0907, with no dose limiting toxicities. The most common adverse events were grades 1 and 2 injection site reactions. A grade 3 local site reaction was reported after repeat injections of 1 mL of the vaccine. Such local site reactions are expected and the severity of the injection site reactions were related to the volume of vaccine administered.

 

In the Phase 1 clinical trials with DPX-Survivac, 18 patients were vaccinated with 3 doses of the vaccine, with or without low dose oral cyclophosphamide, with no vaccine-related systemic adverse events reported. The most common adverse events were grades 1 and 2 injection site reactions. Grade 3 local site reactions were reported in three patients receiving the combination therapy after repeat injections of the vaccine, with resolution over time. Such local site reactions were expected and the severity of the injection site reactions were related to the volume of vaccine administered. The vaccine, therefore, was considered well-tolerated.

 

In August 2016, the Corporation announced additional positive topline results from 54 evaluable patients treated in the Phase 1 and Phase 1b clinical trial program with DPX-Survivac in ovarian cancer. The data reinforced previously reported results showing that DPX-Survivac was well tolerated, with no unexpected treatment-related serious adverse events (SAEs) and that it demonstrated the ability to generate a relevant, sustained immune response. Researchers concluded an optimal dosing schedule for upcoming clinical studies involving DPX-Survivac in ovarian cancer, consisting of two “priming” injections with a booster administered every eight weeks over the duration of up to one year of treatments.

 

Extensive pre-clinical safety testing for both DPX-0907 and DPX-Survivac has also been conducted. The results show that both vaccine candidates were well-tolerated by the animal models. In addition, survivin antigens used in DPX-Survivac have already been tested in Phase 1 human clinical trials with encouraging safety results.

 

Studies conducted by the NIH in monkeys demonstrated that one or two doses of a Depovax™ vaccine designed for infectious diseases applications was well-tolerated with visible site reactions observed and no microscopic finding of major concern. The recently announced data in the Phase 1 study with DPX-RSV has confirmed this safety profile in normal human volunteers aged 50-64.

 

Also, the Corporation’s contraceptive vaccine has been safely used in at least 8 different mammals for 10 years. For example, multi-year trials with macaque monkeys in Hong Kong demonstrate the efficacy and safety of the Corporation’s technology in a non-human primate.

 

The Corporation has conducted a progressive series of safety studies in-house using some of the most common animal models including mice, rabbits, rats and ferrets. Extensive evaluation of the platform in these animal models and comparisons with other commonly used delivery technologies such as a combination of Granulocyte–Macrophase Colony Stimulating Factor and mineral oil suggests a good safety profile for the Corporation’s technology.

 

Manufacturing and Scalability

 

The Corporation has developed and implemented the commercial scale manufacturing process for the DepoVax™ platform, which is applicable to all of the Corporation’s subsequent human health vaccines. The scale-up methods have been transferred to, and manufacturing has been contracted out to, a reputable contract GMP development and manufacturing facility licensed from Health Canada to manufacture sterile products for clinical and commercial purposes. The Corporation has purchased and installed dedicated equipment at the site.

 

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Historically, large-scale production of lipid nanoparticles has been a challenge. Therefore, the Corporation manufactured commercial scale pilot vaccine batches, including 50 liters (200,000 doses) of a hepatitis B vaccine as a test basis at the contract manufacturing facility. The Corporation has confirmed the stability of the vaccine manufactured there and also confirmed that the biological activity of the batch is equivalent to the Corporation’s laboratory batches.

 

Immunovaccine has also completed the lyophilization process for its vaccines. Lyophilization (freeze-drying) is the final step in manufacturing of the product, making it easily reconstituted for injection. The lyophilization parameters have been established and transferred to a GMP filling and lyophilization facility.

 

The product-specific manufacturing process for DPX-Survivac and DPX-0907 was successfully implemented at a GMP contract manufacturing facility in the United States. In preparing for Phase 1 and 2 clinical trials, the Corporation has successfully produced clinical batches for both therapeutic cancer vaccine candidates as well as producing the first clinical batch of an infectious disease candidate. The Corporation is also ready to develop and implement manufacturing processes for other DepoVax™-based vaccine products.

 

Facilities

 

The Corporation’s laboratory is located at 1344 Summer Street, Suites 411 and 309, Halifax, Nova Scotia where the Corporation is currently renting premises of approximately 4,200 sq. ft. The Corporation believes that its facilities are satisfactory given its current state of development.

 

Regulatory Process

 

The FDA and Health Canada share similar processes by which new products are approved. In both cases, development and approval can be a lengthy process, in some cases over five to 10 years. The FDA approves products for the United States market and Health Canada does so for the Canadian market. Though the processes are generally similar, each regulatory body has its own unique requirements for a product. In order to sell a product in each market, it has to be approved by the appropriate governing body. In most cases, early studies conducted in one jurisdiction will be accepted in the other; however, further and somewhat modified studies may be required in order to have a product approved in another jurisdiction.

 

All products typically go through the following steps in order to be approved:

 

·discovery: early laboratory work to show that a compound can have unique chemical medicinal properties;

 

·pre-clinical proof-of-concept studies: studies usually conducted in laboratory animals (mice, etc.) to show that a compound is active in a living creature and retains its medicinal properties;

 

·Phase 1 clinical trial: a small study in human subjects which looks mainly at safety of the compound in humans. In order to be eligible to do a Phase 1 clinical trial, an IND application in the United States or a Clinical Trial Application (“CTA”) in Canada must be filed and approved by the regulatory body. This application must contain information about the safety and efficacy of the compound in laboratory animals, any manufacturing information and chemical analysis. This is a lengthy process, requiring much involved research, conferences with regulatory authorities, clinicians, etc. At the conclusion of a successful Phase 1 clinical trial, a compound is shown safe in humans and further studies are warranted to show its efficacy to treat an illness;

 

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·Phase 2 clinical trial: in a Phase 2 clinical trial, a larger population is used in order to establish appropriate dosing for the compound. This and any other clinical studies are also approved by the regulatory agencies. At the end of a successful Phase 2 clinical trial, the compound is shown to be active in the correct population and a relevant dose is chosen to continue its development;

 

·Phase 3 clinical trial: a large and sometimes multi-level trial, involving a statistically significant sample of the population for which the compound is designed. Stringent Chemistry, Manufacturing and Controls (CMC) are required which may delay the initiation of the trial. Phase 3 trials are designed to establish the efficacy of the compound and identify potential safety issues that may surface in the general population in order for the regulatory agency to better assess the risk/benefit of the compound when a registration application is made;

 

·registration application: a New Drug Application (NDA) or BLA has to be filed with the regulatory body describing all of the clinical trials conducted to date, the relevant population, safety data, the label which will be placed on the pharmaceutical product, the sales/marketing information, etc. The regulatory body looks at the package and decides whether approval should be granted; and

 

·approval: once received, the pharmaceutical product may be sold to the target population. However, clinical studies may continue for the pharmaceutical product for a different segment of population (e.g. children vs. adults).

 

Specialized Skill and Knowledge

 

The business of the Corporation requires personnel with specialized skills and knowledge in the fields of basic and applied immunology. Researchers must be able to design and implement studies to assess the efficacy of DepoVax™ in generating humoral and cellular responses. Specialized knowledge and skills relating to chemistry and formulation process development are also needed. Such knowledge and skills are needed to develop product specific analytical methods and formulation processes. The Corporation has trained scientists with broad experience in these fields.

 

Clinical and regulatory expertise and knowledge is currently accessed by the Corporation through arrangements with well-respected consultants with experience in regulatory affairs or clinical research relating specifically to vaccines.

 

The Corporation has subcontracted out several key functions to conduct the clinical program for its Phase 1 and 2 trials. However, the Corporation utilizes the services of consultants and internal resources, such as a Chief Medical Officer, Vice President of Clinical Research, Clinical and Regulatory Affairs Manager and Clinical Research Associate, to ensure proper and timely completion of the required activities. The Corporation also continues to conduct internal discovery and proof-of-concept work for the other potential vaccine indications, some of which is anticipated to be done with a partner organization.

 

Scientific Advisory Board

 

The Corporation has retained experienced scientific advisors to assist its management in dealing with industry-related issues and how these issues may affect the Corporation’s scientific research and product development.

 

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The Scientific Advisory Board consists of the following members:

 

Dr. Scott Halperin: Dr. Halperin’s numerous professional positions include Professor of Pediatrics and Microbiology and Immunology at Dalhousie University; Head of Infectious Diseases at the IWK Health Centre in Halifax, Nova Scotia; and, Director of the Canadian Center for Vaccinology, a joint collaboration of the IWK Health Centre, Capital Health, and Dalhousie University. As one of the world’s leading authorities on the development of vaccines, his research focuses on the diagnosis, treatment, and prevention of pertussis (whooping cough) and other vaccine-preventable diseases such as influenza. His research in the area of pertussis has sparked improved diagnosis, treatment and prevention of this life-threatening disease and his team is credited with developing one of the pertussis vaccines that is now used around the world. Dr. Halperin is also principal investigator of the Canadian Immunization Research Network (CIRN). This group connects most of the major medical research institutions and universities across Canada, in an effort to ensure the safety and effectiveness of vaccination programs and to train the next generation of clinical vaccine researchers. He earned his undergraduate degree in biology from Stanford University and his medical degree from Cornell University. He conducted his postgraduate residency training in pediatrics at the University of Virginia and his fellowship in pediatric infectious diseases at the University of Virginia and the University of Minnesota.

 

Dr. W. Martin Kast: Dr. Kast is the Walter A. Richter Cancer Research Chair and a Professor of Molecular Microbiology & Immunology, Obstetrics & Gynecology and Urology. He is also the Director of the Beckman Center for Immune Monitoring, the Medical Biology Graduate Program and the Tumor Microenvironment Program at the Norris Comprehensive Cancer Center of the University of Southern California in Los Angeles, CA. He has published over 260 peer reviewed articles that have been quoted over 19,000 times, leading to a publication h-index of 73. In 2010 he was named Eminent Scientist and North American Immunologist of the Year. In 2012 he won the Landsteiner Prize, in 2014 he got the Mellon award and in 2015 he won the BeHEARD prize. He currently serves as the Secretary/Treasurer of the International Papillomavirus Society.

 

Dr. Michel Klein: Dr. Klein is Chairman of VaxiBio Inc., a new vaccine biotechnology company registered in Canada. His experience includes Vice President Biotechnology Research – Pasteur Mérieux Connaught Canada; Professor of Immunology – University of Toronto; Corporate Vice President, Science and Technology – Aventis Pasteur Group and Chief Executive Officer, CANVAC (Canadian Network for Vaccines and Immunotherapeutics).

 

Dr. Walter Storkus: Dr. Storkus is a Professor in the Departments of Dermatology, Immunology, Bioengineering and Pathology at the University of Pittsburgh School of Medicine. He is also a member of the University of Pittsburgh Cancer Institute.

 

Regulatory Affairs Advisor

 

Irene Clement, Senior Regulatory Advisor: Ms. Clement is a founding partner of Clement Strategies Inc., a regulatory and biotechnology business consulting company. She has more than 30 years’ experience in regulatory affairs in the biologics industry, including work with Health Canada, FDA, and European and WHO agencies. Ms. Clement’s previous positions include Vice President Regulatory Affairs for ID Biomedical (subsequently part of GSK), Vice President of Regulatory Affairs at Shire Biologics, and Director Regulatory Affairs at Aventis Pasteur Ltd (now Sanofi Pasteur Ltd). She has been responsible for numerous successful clinical trial applications (CTA & IND) and has also obtained numerous license approvals in Canada, the United States, European Union, Japan, Australia and other countries. For the past eight years, Ms. Clement has provided consulting services to a number of biotechnology companies.

 

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Equipment and components required to conduct activities

 

Standard raw materials, component parts, and products required by the Corporation in pursuing its research and development activities are supplied from reputable companies active in the biotechnology industry. Pricing is predictable as there are many alternatives of such supplies that are readily available. In the event where a custom product is required, such materials are obtained from custom synthesis and/or purification manufacturers which operate in accordance with their respective regulations (ISO). These manufacturers are reputable and have been supplying such materials for the biotechnology/ pharmaceutical industry for a long time. There may be a lead time of weeks/months for such custom materials which is known and anticipated. The Corporation has identified the necessary providers of raw materials and services required for producing clinical grade vaccine for its clinical trial activities.

 

Environmental Protection

 

The Corporation’s discovery and development processes involve the controlled use of hazardous and radioactive materials and, accordingly, the Corporation is subject to federal, provincial and local laws and regulations governing the use, manufacture, storage, handling and disposal of such materials and certain waste products. To the knowledge of the Corporation, compliance with such environmental laws and regulations does not and will not have any significant impact on its capital spending, profits or competitive position within the normal course of its operating activities. There can be no assurance, however, that the Corporation will not be required to incur significant costs to comply with environmental laws and regulations in the future or that its operations, business or assets will not be materially adversely affected by current or future environmental laws or regulations.

 

Employees

 

As at December 31, 2016, the Corporation had 26 full-time and part-time employees and two part-time consultants, including six employees holding PhD degrees, including one MD, and a number of other employees holding M.Sc. or MBA degrees. The Corporation’s employees are not governed by a collective bargaining agreement. The Corporation depends on certain key members of its management and scientific staff and the loss of services of one or more of these persons could adversely affect the Corporation. See “Risk Factors and Uncertainties”.

 

V.RISK FACTORS AND UNCERTAINTIES

 

Investing in the Corporation’s securities involves a high degree of risk. Prospective investors should carefully consider the risks described below, together with all of the other information included or referred to in this Annual Information Form. There are numerous and varied risks, known and unknown, that may prevent the Corporation from achieving its goals. The risks described below are not the only ones that the Corporation will face. If any of these risks actually occur, the Corporation’s business, financial condition or results of operations may be materially adversely affected. In that case, the trading price of the Corporation’s securities could decline and investors in the Corporation’s securities could lose all or part of their investment.

 

Risks Related to the Financial Position and Need for Additional Capital

 

The Corporation has incurred significant losses since inception and expects to incur losses for the foreseeable future and may never achieve or maintain profitability.

 

Since inception, the Corporation has incurred significant operating losses. The net loss was $8.9 million for the year ended December 31, 2016, $8.8 million for the year ended December 31, 2015 and, $6.6 million for the year ended December 31, 2014. As of December 31, 2016, the Corporation had an accumulated deficit of $58.8 million.

 

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To date, the Corporation has financed operations primarily through public offerings in Canada, private placements of securities, grants and license and collaboration agreements. The Corporation has devoted substantially all efforts to research and development, including clinical trials. IMV expects to continue to incur significant expenses and increasing operating losses for at least the next several years. The Corporation anticipates that the expenses will increase substantially if and as the Corporation:

 

·initiates or continues the clinical trials of DPX-Survivac and other product candidates;

 

·seeks regulatory approvals for the product candidates that successfully complete clinical trials;

 

·establishes a sales, marketing and distribution infrastructure to commercialize products for which the Corporation may obtain regulatory approval;

 

·maintains, expands and protects the Corporation’s intellectual property portfolio;

 

·continues other research and development efforts;

 

·hires additional clinical, quality control, scientific and management personnel; and

 

·adds operational, financial and management information systems and personnel, including personnel to support product development and planned commercialization efforts.

 

To become and remain profitable, the Corporation must develop and eventually commercialize a product or products with significant market potential. This development and commercialization will require the Corporation to be successful in a range of challenging activities, including successfully completing preclinical testing and clinical trials of the product candidates, obtaining regulatory approval for these product candidates and marketing and selling those products that obtain regulatory approval. The Corporation is only in the preliminary stages of some of these activities. The Corporation may never succeed in these activities and may never generate revenues that are significant or large enough to achieve profitability. Even if profitability is achieved, the Corporation may not be able to sustain or increase profitability on a quarterly or annual basis. Failure to become and remain profitable would decrease the value of the Corporation and could impair the Corporation’s ability to raise capital, expand the business, maintain research and development efforts or continue operations. A decline in the value of the Corporation could also cause shareholders to lose all or part of their investment.

 

The Corporation will need substantial additional funding. If the Corporation is unable to raise capital when needed, the Corporation would be forced to delay, reduce, terminate or eliminate product development programs, potentially including the ongoing and planned clinical trials of DPX-Survivac or commercialization efforts.

 

The Corporation expects expenses to increase in connection with the ongoing activities, particularly as the Corporation continues the research, development and clinical trials of, and seeks regulatory approval for, the product candidates. In addition, if the Corporation obtains regulatory approval of any of the product candidates, the Corporation expects to incur significant commercialization expenses for product sales, marketing, manufacturing and distribution. Furthermore, the Corporation will need to obtain additional funding in connection with continuing operations. If the Corporation is unable to raise capital when needed or on attractive terms, the Corporation would be forced to delay, reduce, terminate or eliminate the product development programs, potentially including the ongoing and planned clinical trials of DPX-Survivac.

 

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As of December 31, 2016, the Corporation had cash and cash equivalents of $13.5 million and working capital of $13 million.

 

The Corporation will need to obtain significant financing prior to the commercialization of DPX-Survivac, including funding to complete all of the required clinical trials of DPX-Survivac. The Corporation does not currently have funds available to enable the Corporation to complete all of the required clinical trials for the commercialization of DPX-Survivac and to fund operating expenses through the completion of these trials. The Corporation expects that it will require up to$50 million or more to conduct the clinical trials and fund operating expenses through the completion of these trials.

 

The Corporation’s future capital requirements will depend on many factors, including:

 

·the progress and results of the clinical trials of DPX-Survivac;

 

·the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for other product candidates;

 

·the costs, timing and outcome of regulatory review of the product candidates;

 

·the costs of commercialization activities, including product sales, marketing, manufacturing and distribution, for any of the product candidates for which regulatory approval is received;

 

·revenue, if any, received from commercial sales of the Corporation’s product candidates, should any of the product candidates be approved by the FDA or a similar regulatory authority outside the United States;

 

·the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing the Corporation’s intellectual property rights and defending intellectual property-related claims;

 

·the extent to which the Corporation acquires or invests in other businesses, products and technologies;

 

·the Corporation’s ability to obtain government or other third-party funding; and

 

·the Corporation’s ability to establish collaborations on favorable terms, if at all, particularly arrangements to market and distribute product candidates on a worldwide basis.

 

Conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and the Corporation may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, the Corporation’s product candidates, if approved, may not achieve commercial success. The Corporation’s commercial revenues, if any, will be derived from sales of products that the Corporation does not expect to be commercially available for several years, if at all. Accordingly, the Corporation will need to continue to rely on additional financing to achieve the Corporation’s business objectives. Additional financing may not be available on acceptable terms to the Corporation, or at all.

 

Raising additional capital may cause dilution to existing shareholders, restrict operations or require the Corporation to relinquish rights to its technologies or product candidates.

 

Until such time, if ever, as the Corporation can generate substantial product revenues, the Corporation expects to finance the cash needs through a combination of equity offerings, debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. Currently, the Corporation does not have any committed external source of funds. The Corporation will require substantial funding to complete the ongoing and planned clinical trials of DPX-Survivac and to fund operating expenses and other activities. To the extent that the Corporation raises additional capital through the sale of equity or convertible debt securities, the shareholders ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the shareholders rights as a stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting the Corporation’s ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If the Corporation raises additional funds through government or other third-party funding, marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, the Corporation may have to relinquish valuable rights to its technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable.

 

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Risks Related to the Development and Commercialization of the Corporation’s Product Candidates

 

The Corporation depends heavily on the success of DPX-Survivac and other product candidates. All of the product candidates are still in preclinical or clinical development. Clinical trials of the product candidates may not be successful. If the Corporation is unable to commercialize the product candidates or experiences significant delays in doing so, the business may be materially harmed.

 

The Corporation has committed significant human and financial resources to the development of DPX-Survivac, and the DepoVax™ Platform. The ability to generate product revenues, which is not expected to occur for at least the next several years, if ever, will depend heavily on the successful development and eventual commercialization of these product candidates, especially DPX-Survivac, the most advanced product candidate. The success of these product candidates will depend on several factors, including the following:

 

·successful completion of preclinical studies and clinical trials;

 

·receipt of marketing approvals from the FDA and similar regulatory authorities outside the United States;

 

·establishing commercial manufacturing capabilities by identifying and making arrangements with third-party manufacturers for the product candidates;

 

·maintaining patent and trade secret protection and regulatory exclusivity for the product candidates;

 

·launching commercial sales of the products, if and when approved, whether alone or in collaboration with others;

 

·acceptance of the products, if and when approved, by patients, the medical community and third-party payors;

 

·effectively competing with other therapies; and

 

·a continued acceptable safety profile of the products following approval.

 

If the Corporation does not achieve one or more of these factors in a timely manner or at all, the Corporation could experience significant delays or an inability to successfully commercialize its product candidates, which would materially harm its business.

 

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If clinical trials of the product candidates, such as the ongoing and planned clinical trials of DPX-Survivac, fail to demonstrate safety and efficacy to the satisfaction of the FDA or similar regulatory authorities outside the United States or do not otherwise produce positive results, the Corporation may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of the product candidates.

 

Before obtaining regulatory approval for the sale of the product candidates, the Corporation must conduct extensive clinical trials to demonstrate the safety, purity and potency, or efficacy, of the product candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more of the Corporation’s clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.

 

The Corporation may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent the Corporation’s ability to receive regulatory approval or commercialize its product candidates. Unforeseen events that could delay or prevent the Corporation’s ability to receive regulatory approval or commercialize its product candidates include:

 

·regulators or institutional review boards may not authorize the Corporation or its investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;

 

·the Corporation may have delays in reaching or fail to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;

 

·clinical trials of the product candidates may produce negative or inconclusive results, and the Corporation may decide, or regulators may require, additional clinical trials be conducted or product development programs be abandoned;

 

·the number of patients required for clinical trials of the product candidates may be larger than anticipated, enrollment in these clinical trials may be slower than anticipated or participants may drop out of these clinical trials at a higher rate than anticipated;

 

·the Corporation’s third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations in a timely manner, or at all;

 

·the Corporation might have to suspend or terminate clinical trials of its product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks;

 

·regulators or institutional review boards may require that the Corporation or its investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks;

 

·the cost of clinical trials of the product candidates may be greater than anticipated;

 

·the supply or quality of the product candidates or other materials necessary to conduct clinical trials of the product candidates may be insufficient or inadequate; and

 

·the Corporation’s product candidates may have undesirable side effects or other unexpected characteristics, causing the Corporation or its investigators, regulators or institutional review boards to suspend or terminate the trials.

 

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In addition, the patients recruited for clinical trials of the product candidates may have a disease profile or other characteristics that are different than expected and different than what the clinical trials were designed for, which could adversely impact the results of the clinical trials.

 

If the Corporation is required to conduct additional clinical trials or other testing of its product candidates beyond those that are currently contemplated, if the Corporation is unable to successfully complete clinical trials of its product candidates or other testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, the Corporation may:

 

·be delayed in obtaining marketing approval for its product candidates;

 

·not obtain marketing approval at all;

 

·obtain approval for indications or patient populations that are not as broad as intended or desired;

 

·obtain approval with labeling that includes significant use restrictions or safety warnings, including boxed warnings;

 

·have the product removed from the market after obtaining marketing approval;

 

·be subject to additional post-marketing testing requirements; or

 

·be subject to restrictions on how the product is distributed or used.

 

The Corporation’s product development costs will also increase if delays in testing or approvals are experienced. The Corporation does not know whether any clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant clinical trial delays could also shorten any periods during which the Corporation may have the exclusive right to commercialize its product candidates or allow the Corporation’s competitors to bring products to market before the Corporation does and impair the Corporation’s ability to commercialize its product candidates and may harm the business and results of operations.

 

If the Corporation experiences delays or difficulties in the enrollment of patients in clinical trials, receipt of necessary regulatory approvals could be delayed or prevented.

 

The Corporation may not be able to initiate or continue clinical trials for its product candidates, if the Corporation is unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside the United States. In addition, many of the Corporation’s competitors have ongoing clinical trials for product candidates that could be competitive with the Corporation’s product candidates, and patients who would otherwise be eligible for the Corporation’s clinical trials may instead enroll in clinical trials of the Corporation’s competitors’ product candidates.

 

Patient enrollment is affected by other factors including:

 

·severity of the disease under investigation;

 

·eligibility criteria for the study in question;

 

·