UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 25, 2002
Proteo, Inc.
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(Exact name of registrant as specified in its charter)
Nevada
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(State or other jurisdiction of incorporation)
000-30728 88-0292249
(Commission File Number) (IRS Employer Identification No.)
2775 Mesa Verde Drive East, #F101, Costa Mesa, CA 92626
________________________________________________________________________
(Address of principal executive offices) (Zip Code)
(949) 979-7074
Registrant's telephone number, including area code:
N/A
(Former name, address and telephone number)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 28, 2001, Proteo Marketing, Inc. (which at that time was known
as "Proteo, Inc.") acquired approximately 90% of the issued and outstanding
shares of the Registrant, Proteo, Inc. (which at the time was known as
Trivantage Group, Inc.). Subsequent to the acquisition, the Registrant changed
its name to Proteo, Inc. and old Proteo changed its name to Proteo Marketing,
Inc. ("Old Proteo").
On April 25, 2002, the Registrant and Old Proteo entered into an Agreement
and Plan of Share Exchange (the "Exchange Agreement") whereby the Registrant
acquired all of the outstanding shares of Old Proteo in exchange for 20,286,512
of the Registrant's newly issued shares of common stock (the "Share Exchange").
As a result, Old Proteo became a subsidiary of the Registrant's.
In evaluating Proteo as a candidate for the proposed acquisition, the
Registrant used criteria such as Old Proteo's business strategy which is focused
on the development of pharmaceuticals based on human protein (in particular
Elafin) (as set forth more fully below under "Business") and other anticipated
operations, and Old Proteo's and its principal's business name and reputation.
Following the Share Exchange, the Registrant intends to continue Old
Proteo's historical businesses and proposed businesses as set forth more fully
immediately below. The historical business and operations of the Registrant
shall no longer be continued.
BUSINESS
Proteo, Inc. ("Old Proteo") was incorporated in the State of Nevada and
began operations in November 2000. In December 2000, Old Proteo entered into a
Reorganization and Stock Exchange Agreement with Proteo Biotech AG, a German
corporation located in Kiel, Germany. Pursuant to the terms of the agreement,
all of the shareholders of Proteo Biotech AG exchanged their common stock for an
aggregate of 2,500,000 shares of Old Proteo's common stock. As a result, Proteo
Biotech AG (the "Subsidiary") is currently a wholly owned subsidiary of Old
Proteo, which is now a wholly owned subsidiary of the Registrant.
The Company and the Subsidiary intend to develop, manufacture, promote, and
market pharmaceuticals and other biotech products. However, we do not believe
that any of our planned products will produce sufficient revenues in the next
six years to support us financially. We currently expect to only sell small
quantities of these products in the first few business years. We intend to
identify and develop other potential products. To achieve profitable
operations, the Company, independently or in collaboration with others, must
successfully identify, develop, manufacture, and market proprietary products.
The products and technologies we intend to develop will require significant
commitments of personnel and financial resources.
Our business strategy is focused on the development of pharmaceuticals
based on human protein. Specifically, we intend to initially focus our research
on the development of drugs based on the human protein Elafin. We believe that
Elafin may be useful in the treatment of cardiac infarction, serious injuries
caused by accidents, post-surgery damage to tissue, and complications resulting
from organ transplantation.
Elafin is a human protein that naturally occurs in human skin, lungs and
the mammary gland. Elafin is an elastase inhibitor which inhibits the activity
of two enzymes called elastase and proteinase 3. Both of these enzymes are
known to be involved in the breakdown of tissue in various inflammatory
diseases. Elafin is believed to protect cells containing it against destruction
by these enzymes. We intend to utilize Elafin as a drug in the treatment of
various diseases and injuries.
We believe that Elafin may be useful as a drug in the treatment of cardiac
infarction. Cardiac infarction appears as a result of deficiencies in the blood
supply of heart muscles caused by damage to the supplying coronary vessels. As
an immediate result, the heart weakens and the heart muscles are destroyed.
Damage to tissue caused by cardiac infarction will slowly form scars. Current
methods of treatment are aimed at restoring the blood supply to the heart,
either by replacement with new blood vessels (bypass surgery) or by removal of
blood-clots in the coronary vessels (lyse therapy). Utilizing this methods, the
mortality of patients suffering from cardiac infarction is reduced from
approximately 8% to 12% during clinical treatment. The remaining deaths are
mainly a result of inflammation of the heart muscle after the cardiac
infarction, which causes the destruction of the affected muscle tissue. Animal
experiments have shown that Elafin may be effective in protecting the heart
muscles against destruction after blood supply was interrupted.
Elafin may also be useful in the treatment of the seriously injured.
Similar to damage of heart muscles as described above, much of the damage caused
by serious injuries appear after the injury causing event (e.g.: traffic
accidents). In emergency treatment following accidents, the blood supply, nerve
fibers and the stability of bones and joints are given priority. Due to blood
supply deficiencies, inflammation will occur in injured muscles and in injured
vessels. Because muscles may be destroyed by the inflammation, limbs may have
to be amputated despite successful surgeries. Elafin may protect muscles
against damage caused by inflammation. In animal experiments, rat legs treated
with Elafin remained almost unaffected, although the blood supply of the leg was
cut off for six hours.
Elafin may also be used in the course of heart transplantation. To
transplant hearts successfully, simultaneous treatment with anti-inflammatory
drugs is necessary. Inflammations of transplanted organs are mainly caused
either by rejection of the organ by the immune system or by blood supply
deficiencies during the transplantation. Although various drugs are used today
to avoid the rejection of the organ, such rejections still occur quite often.
Therefore, additional anti-inflammatory drugs are needed, which may potentially
prevent damages caused by blood supply deficiencies. Animal experiments have
shown that treatment solely with Elafin may avoid rejection of transplanted
hearts.
Other preliminary data indicate that Elafin may be useful in a broad range
of other applications whether pharmaceutical or not. Therefore, we will attempt
to encourage other scientists, research centers as well as other companies to do
research and development on Elafin for other applications than described above.
For example, Elafin may also be effective in the treatment of dermatological
diseases and defects, or as ingredient in cosmetics.
Proteo owns licenses to exclusively develop products based on patents and
filings relating to Elafin, including nine patents already issued and another
four patent applications already in the process of patent office reviews. Of
the issued patents, two patents were issued in the U.S.
Further, Proteo intends to engage in the research and development of other
drugs and biotechnical products based on human protein. We may also be able to
implement unique technologies and biotechnological production procedures that
may enable the Company to offer related services to other companies.
We have received a grant in the amount of 766,000 Euro (approximately
$700,000) from the government of the German state Schleswig-Holstein for the
research and pre-clinical development of the our pharmaceuticals based on the
human protein Elafin. Such grant required that the Company prove its economical
ability to cover at least 50.1% of the project costs on its own as well as the
achievement of milestones. The grant will be paid as reimbursement of 49.9% of
related expenses over the next two years.
Initially, Proteo will focus on the development of a production procedure
for Elafin and the initiation of clinical trials to achieve governmental
approval for the use of Elafin as a drug. After development of production
procedures have been achieved, we will initiate pre-clinical and subsequently,
Phase 1, 2, and 3 clinical trials to determine the safety and effectiveness of
Elafin as a drug.
Our goals for German (CE Mark) approval on our initial product designed for
patients suffering from serious injuries is targeted for 2007 and U.S. (FDA)
approval in 2010. It should be noted that this specialized application, if
successfully developed, would have a market potential substantially smaller than
the overall market of Elafin for more widespread applications such as for the
treatment of cardiac infarction.
THE SUBSIDIARY
In December 2000, Old Proteo entered into a stock exchange agreement with
the shareholders of Proteo Biotech AG and acquired all of the issued and
outstanding capital stock of Proteo Biotech AG, a German corporation, with its
principal place of business located in Kiel, Germany. Proteo Biotech AG will be
the only subsidiary of Proteo.
Proteo Biotech AG was formed in Kiel, Germany, on April 6, 2000. Proteo
Biotech AG is in the business of developing a pharmaceutical based on the human
protein called Elafin and possible by-products thereof as well as related
technologies. The President and CEO of Proteo Biotech AG is currently Ulrich
Glaeser. The directors of Proteo Biotech AG are Prof. Oliver Wiedow, MD., Birge
Bargmann and Barbara Kahlke, MD.
To date, our Subsidiary has not had any profitable operations.
Furthermore, we do not anticipate that we will have profitable operations in the
near future.
COLLABORATION WITH OTHER COMPANIES
In an effort to provide the Company with some revenue which will be
utilized in the implementation of our business plan, our Subsidiary plans
periodically to provide research and development and manufacturing services as a
sub-contractor and/or consultant to unaffiliated companies which do not compete
with the Company. We plan to explore such opportunities if deemed advantageous
to the Company.
COMPETITION
The market for our planned products and technologies is highly competitive,
and we expect competition to increase. We will compete with many other health
care research product suppliers, most of which will be larger than Proteo. Some
of our anticipated competitors offer a broad range of equipment, supplies,
products and technology, including many of the products and technologies
contemplated to be offered by us. To the extent that customers exhibit loyalty
to the supplier that first supplies them with a particular product or
technology, our competitors may have an advantage over Proteo with respect to
such products and technologies. Additionally, many of our competitors have, and
will continue to have, greater research and development, marketing, financial
and other resources than us and, therefore, represent and will continue to
represent significant competition in our anticipated markets. As a result of
their size and the breadth of their product offering, certain of these companies
have been and will be able to establish managed accounts by which, through a
combination of direct computer links and volume discounts, they seek to gain a
disproportionate share of orders for health care products and technologies from
prospective customers. Such managed accounts present significant competitive
barriers for us. It is anticipated that we will benefit from their
participation in selected markets, which, as they expand, may attract the
attention of our competitors. The business of research and development of
pharmaceuticals for the treatment of cardiac infarction is intensely
competitive. Major companies with immense financial and personal resources are
also engaged in this field.
Currently, we are not aware of any substance available in the market with
similar effectiveness to Elafin. Elastase inhibitors such as Elafin, which may
be applied to humans, have been under research and development in the
pharmaceutical industry for more than ten years. Currently, there have been
more than 200 related patents granted. Most of these substances are produced
synthetically, and are not applicable in the treatment of cardiac infarctions.
Three other elastase inhibitors, secretory leukoprotease inhibitor (SLPI),
alpha-1-antitrypsin and recombinant monocyte/neutrophil elastase inhibitor
(rM/NEI), are similar to Elafin in that they are of human descent and may be
applied like Elafin principally. Three other substances under development,
ZD8321, ZD0892 and ONO-5046 are artificial elastase inhibitors, which may have
comparable effectiveness to that of Elafin.
Secretory Leukoprotease Inhibitor (SLPI)
Amgen, Inc. is the owner of the patent for SLPI. Amgen purchased this
patent by acquiring Synergen, Inc. SLPI is quite similar to Elafin.
Nevertheless, SLPI has some disadvantages in its intended application in the
treatment of cardiac infarctions and in the treatment of serious injuries. It
is only effective against one (leukocyte-elastase) of the two
(leukocyte-elastase and proteinase 3) major enzymes which destroy tissue, while
Elafin has shown effectiveness against both. Therefore, Elafin is probably of
higher effectiveness. Furthermore, SLPI is not as stable as Elafin, which is a
disadvantage in its distribution as a drug. SLPI was discovered much earlier
than Elafin, therefore, the remaining term of the covering patent should be
shorter than that related to Elafin. Amgen does not mention the development of
SLPI as a drug in its annual report of 1998.
Alpha-1-antitrypsin
Human blood contains relatively large amounts of alpha-1-antitrypsin
naturally. Research into the use of alpha-1-antitrypsin for the treatment of
cardiac infarctions, shock and of other serious inflammations has been ongoing
for the last twenty years. Compared to Elafin, however, there are some
substantial problems related to alpha-1-antitrypsin. For example,
alpha-1-antitrypsin is not as stable as Elafin, and therefore, from the
scientific point of view it is probably not as effective as Elafin.
Additionally, alpha-1-antitrypsin is very difficult to produce. The existing
biotechnological procedure to produce alpha-1-antitrypsin is to use genetically
manipulated sheep, which produce 1-Antitrypsin in their milk. Existing flocks
of sheep do not produce sufficient amounts of alpha-1-antitrypsin. As a result,
experiments involving cloning of sheep (such as "Dolly") have been performed to
produce a better flock of sheep compatible with the production of
alpha-1-antitrypsin.
Recombinant monocyte/neutrophil elastase inhibitor (rM/NEI)
This compound of human descent is currently under development for the use
in cystic fibrosis and to be applied by inhalation devices. IVAX Corporation has
entered into a license option agreement with the Center for Blood Research, Inc.
(CBR), an affiliate of the Harvard Medical School, which holds the rights for
this compound.
ZD8321 and ZD0892
Both ZD8321 and ZD0892 have been developed by AstraZeneca with the
intention of treating lung diseases. However, AstraZeneca has recently
suspended both inhibitors from their research and development pipeline.
ONO-5046 (Sivelestat)
Ono Pharmaceutical Co. Ltd., Japan is currently developing the synthetic
elastase inhibitor ONO-5046 (Sivelestat) for the use in adult respiratory
distress syndrome and acute lung injury. In 2000 Eli Lilly has signed a letter
of intent with ONO Pharmaceutical Co., Ltd., on the development, manufacturing
and marketing of Sivelestat.
GOVERNMENT REGULATION
Proteo and the Subsidiary are, and will continue to be, subject to
governmental regulation under the Occupational Safety and Health Act, the
Environmental Protection Act, the Toxic Substances Control Act, and other
similar laws of general application, as to all of which Proteo believes it and
the Subsidiary are in material compliance. Any future of, and the cost of
compliance with, these laws and regulations could have a material adverse effect
on the business, financial condition, and results of operation of Proteo and the
Subsidiary.
Because of the nature of the operations of Proteo and the Subsidiary and
the use of hazardous substances and their ongoing research and development and
manufacturing activities, Proteo and the Subsidiary are subject to stringent
federal, state and local laws, rules, regulations and policies governing the
use, generation, manufacturing, storage, air emission, effluent discharge,
handling and disposal of certain materials and wastes. Although it is believed
that Proteo and the Subsidiary are in material compliance with all applicable
governmental and environmental laws, rules, regulations and policies, there can
be no assurance that the business, financial conditions, and results of
operations of Proteo and the Subsidiary will not be materially adversely
affected by current or future environmental laws, rules, regulations and
policies, or by liability occurring because of any past or future releases or
discharges of materials that could be hazardous.
Additionally, the clinical testing, manufacture, promotion and sale of a
significant majority of the products and technologies of Proteo and the
Subsidiary, if those products and technologies are to be offered and sold in the
United States, are subject to extensive regulation by numerous governmental
authorities in the United States, principally the FDA, and corresponding state
regulatory agencies. Additionally, to the extent those products and technologies
are to be offered and sold in markets other than the United States, the clinical
testing, manufacture, promotion and sale of those products and technologies will
be subject to similar regulation by corresponding foreign regulatory agencies.
In general, the regulatory framework for biological health care products is more
rigorous than for non-biological health care products. Generally, biological
health care products must be shown to be safe, pure, potent and effective. There
are numerous state and federal statutes and regulations that govern or influence
the testing, manufacture, safety, effectiveness, labeling, storage, record
keeping, approval, advertising, distribution and promotion of biological health
care products. Non-compliance with applicable requirements can result in, among
other things, fines, injunctions, seizures of products, total or partial
suspension of product marketing, failure of the government to grant pre-market
approval, withdrawal of marketing approvals, product recall and criminal
prosecution.
PATENTS, LICENSES & ROYALTIES
The Subsidiary owns licenses to exclusively develop products based on
patents and filings including nine (9) patents already issued and another four
(4) patent applications already in the process of patent office reviews. Of the
issued patents are two (2) patents which have been issued in the U.S.
Prof. Wiedow, a director of the Company, will receive three percent (3%) of
the gross revenues of Proteo and the Subsidiary from products based on patents
of which he was the principal inventor. Further, Prof. Wiedow will receive
license fees in the amount of approx. $ 100,000 ( 110,000) per year and a
refund for all expenses to maintain the patents (patent fees, lawyers fees,
etc.)
AstraZeneca Inc. (formerly Zeneca Inc., formerly ICI Pharmaceuticals Inc.)
had held the patents for elafin for several years and has significantly
contributed to the current knowledge. Therefore, AstraZeneca Inc. will receive
two percent (2%) of the gross revenues of Proteo and the Subsidiary from
products based on patents in which Prof. Wiedow was the principal inventor.
Proteo holds an exclusive license of those patents:
USA US 5464822
USA US 6245739
EU EP 0402068
Japan JP 2989853
Australia AU 636148
Canada CA 2018592
Finland FI 902880
Ireland IE 070520
Israel IL 094602
New Zealand NZ 233974
Norway NO 177716
Portugal PT 094326
South Africa ZA 9004461
EMPLOYEES
Currently, Proteo has one full time employee, and Proteo Biotech AG has
five employees. We expect the number of employees in the Subsidiary to increase
to six in 2002.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company for the period from inception
until December 31, 2001 and the financial statements of Old Proteo from
inception until December 31, 2001, as well as applicable pro forma financial
information, will be filed by amendment to this Form 8-K within the time period
required pursuant to SEC regulations.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable
EXHIBITS
2.1 Agreement and Plan of Share Exchange
3.1 Articles of Share Exchange
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 8-K to be signed on its behalf by
the undersigned hereunto duly authorized.
PROTEO, INC.
/s/ Joerg Alte
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President
Date: May 2, 2002