| Significant Vendor Disclosure [Text Block] |
NOTE D - SIGNIFICANT VENDOR
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1)
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During the three and six months ended December 31, 2012,
the Company had four service arrangements with FhCMB for
research and development. The Company previously
disclosed that FhCMB was a related party since its former
Chief Scientific Officer was an employee and an executive
of FhCMB.
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A)
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In 2003, the Company entered into the TTA which requires
FhCMB to provide the Company with research and
development services related to the commercialization of
the Technology and allows FhCMB to apply the Technology
to the development and production of certain vaccines for
use in developing countries as defined in the agreement.
The most recent amendment to the TTA requires: 1) the
Company to make non-refundable payments to FhCMB
aggregating $10,000,000, in installments of $2,000,000
per year over a five year period commencing in November
2009; and 2) FhCMB to expend at least equal amounts
during the same timeframe for research and development
services related to the commercialization of the
Technology. Additionally, under the terms of the TTA and
for a period of 15 years: 1) the Company shall pay FhCMB
a defined percentage (per the agreement) of all receipts
derived by the Company from sales of products produced
utilizing the Technology and a defined percentage (per
the agreement) of all receipts derived by the Company
from licensing the Technology to third parties with an
overall minimum annual payment of $200,000 commencing on
December 31, 2010 and 2) FhCMB shall pay the Company a
defined percentage (per the agreement) of all receipts
from sales, licensing, or commercialization of the
Technology in developing countries as defined in the
agreement. All new intellectual property invented by
FhCMB during the period of the TTA is owned by and is
required to be transferred to iBio. The Company and FhCMB
are currently engaged in discussions to conclude a
further amendment of the TTA. Among other things, the
anticipated amendment is expected to have the effect of
focusing future FhCMB research activities on designated
product specific work that is mutually agreed by the
parties. In making this transition in research focus, the
Company will capitalize on the prior research activities
that broadly advanced the technology to a stage of
development that now enables product specific
applications to be further advanced. Pending completion
of such amendment, FhCMB and the Company have agreed to
reduce current work efforts which will have a
corresponding effect of temporarily lowering the research
and development expenses being incurred by the Company
The expense for the three months ended December 31, 2012
and 2011 was approximately $550,000 and $474,000,
respectively. The expense for the six months ended
December 31, 2012 and 2011 was approximately $1,100,000
in each period. The Company is charged interest by FhCMB
on certain outstanding balances at prime plus 2%.
Interest expense for the three months ended December 31,
2012 and 2011 was approximately $17,000 and $16,000,
respectively. Interest expense for the six months ended
December 31, 2012 and 2011 was approximately $32,000 and
$26,000, respectively. Amounts due to FhCMB respectively
accounted for approximately 89% and 87% of the
Company’s accounts payable at December 31, 2012 and
June 30, 2012. Additionally, amounts due to FhCMB
respectively accounted for approximately 39% and 43% of
the Company’s accrued expenses at December 31, 2012
and June 30, 2012, respectively.
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B)
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In December 2010, the Company and FhCMB entered into a
$1,660,000 research services agreement to evaluate gene
expression and protein production, focused on a series of
product candidates, using the iBioLaunch platform. Work
on this project has terminated. The expenses for the
three months ended December 31, 2012 and 2011 were $0 and
approximately $300,000, respectively. The expenses for
the six months ended December 31, 2012 and 2011 were $0
and approximately $564,000, respectively
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C)
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In March 2011, the Company and FhCMB entered into a
$432,000 research services agreement for the evaluation
of the mechanism of immune-potentiating activity of
lichenase (“LicKM”), which is a thermostable
bacterial enzyme used as a carrier molecule for vaccine
antigens. The value of LicKM is as an immunomodulator.
FhCMB completed its research obligations for this
project. The expenses for the three months ended December
31, 2012 and 2011 were $0 and approximately $60,000,
respectively. The expenses for the six months ended
December 31, 2012 and 2011 were $0 and approximately
$271,000, respectively.
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D)
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In January 2011, the Company announced that it granted to
Fundacão Oswaldo Cruz acting through its unit
Bio-Manguinhos, a public entity linked to the Health
Ministry of Brazil (“Fiocruz”) a commercial,
royalty-bearing license for the use of the
Company’s proprietary technology in connection with
the development, manufacture and commercialization by
Fiocruz of certain vaccine products. Fiocruz is expected
to bring the first product candidate, a new yellow fever
vaccine, through a Phase I clinical trial. iBio engaged
FhCMB, as an iBio subcontractor to perform certain
research and development services in conjunction with
this collaboration. The expected research and development
expense the Company will incur in connection with the
engagement of FhCMB as a subcontractor will be offset by
an equivalent amount of service revenue the Company will
earn from Fiocruz. The Company does not expect to earn a
profit until it receives royalties. The revenue and
expense for the three months ended December 31, 2012 and
2011 were $0 and approximately $234,000, respectively.
The revenue and expense for the six months ended December
31, 2012 and 2011 were approximately $390,000 and
$554,000, respectively.
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