Amarillo Biosciences, Inc. (AMAR) is a public company that is working to bring low-dose oral interferon (IFN) to America's pharmacies.  IFN is a protein that was discovered in 1957 as the substance that was "interfering" with the growth of influenza virus in chicken embryos.  This interfering substance was isolated and called interferon.

Interferon (IFN) is not just an antiviral protein; it is now recognized as a key component of the immune system.  Not only does IFN act to trigger, amplify and sustain different phases of the immune response, it also promotes a balance between the infection and the inflammatory response when an infection is declining, and shuts down the immune system when the infection has ended.  Depending on dosage, IFN can boost the immune system or suppress the immune system, which is why IFN is called an "immune modulator."

More than twenty years ago, IFN was first approved by the US Food and Drug Administration (FDA) for use by injection in high doses to treat hairy cell leukemia.  Since then, injectable IFN has been approved to treat other kinds of cancer, as well as hepatitis B, hepatitis C and genital warts.  A form of IFN has been approved to treat multiple sclerosis, an autoimmune disease.  Despite all the benefits of injectable IFN, it has severe side effects that many patients cannot tolerate, causing them to discontinue its use.

AMAR's technology involves the low-dose oral administration of IFN, not an injection of large toxic doses.  We can achieve the benefits of IFN therapy without the toxicity of injectable IFN by placing tiny amounts of IFN in the mouth so the IFN comes in contact with the oral-pharyngeal mucosa (the lining of the mouth and throat).  Oral IFN activates beneficial effects throughout the body, not just in the mouth.  The mechanism of action is believed to be, at least partly, due to upregulation of IFN-stimulated genes. 

Besides being non-toxic, AMAR's low-dose oral IFN product is stable at room temperature, unlike high-dose injectable IFN, which must be kept refrigerated.  Low-dose oral IFN is taken by mouth in the form of a small tablet (lozenge), so it is easier for patients to take than high-dose IFN, which must be injected using a needle and syringe.  Finally, AMAR's product is less expensive because IFN is effective at lower doses when given orally, compared to the high doses which must be injected to overcome the body's efficient mechanisms for clearing IFN from the bloodstream.

People and animals produce IFN naturally in their nasal secretions in tiny (nanogram) amounts.  This IFN trickles down the throat to activate an immune response.  If pathogens such as viruses, rickettsia, chlamydia or mycoplasma are inhaled, the tissue of the nose and throat responds by producing IFN in the nasal and pharyngeal secretions, which sends a message to the immune system: "What was just inhaled is worthy of an immune response; it wasn't dust or pollen.   What was inhaled induced IFN, so a systemic immune response is needed."

A Phase 2, placebo-controlled, dose-ranging study of 169 hepatitis C virus-infected patients was conducted in Taiwan.  The study, which was approved by both the US FDA and the Taiwanese Department of Health, was designed to test the ability of oral IFN to reduce the virologic relapse rate of patients who have completed standard therapy with pegylated IFN plus ribavirin.  Up to 50% of patients with certain genotypes of HCV relapse after receiving standard therapy. Reduction of the relapse rate by oral IFN would represent a major breakthrough in the management of hepatitis C. Treatment time in the study was 6 months with another 6 months of untreated follow-up observation.

The overall rate of virologic relapse was lower in both IFN groups (~30%), compared to placebo (33%), but the difference was not statistically significant. The study failed to achieve the hoped for 50% reduction in relapse rate. However in the sub-group of subjects who started the study with a low level of liver fibrosis (scarring) as indicated by their FibroIndex score (about 40% of the evaluable study population), the rate of virologic relapse was reduced by more than half in the 500 IU group (12%), compared to the placebo group (32%). Due to small numbers, this difference was not highly significant (P=0.14), so this finding will need to be confirmed in a larger study of HCV patients with mild fibrosis.

In the sub-group of subjects who started the study with a low platelet count (about 60% of the evaluable study population), statistically significant increases in platelets were observed in the 500 IU group during both the treatment and post-treatment observation phases, compared to the placebo group. By the end of the study, 81% of subjects in the 500 IU group who had a low platelet count at entry experienced normalization of their platelet count, compared to only 42% of the subjects in the placebo group (P=0.005). The apparent ability of oral IFN to reverse thrombocytopenia has implications, not only for use as HCV maintenance therapy, but in a number of other indications in which the underlying disease or commonly used treatments lead to depressed platelet counts.

While this study did not achieve its primary goal of reducing relapse by 50% in HCV patients who entered viral remission following standard therapy, there are reasons to be optimistic. First, this study detected that maintenance therapy with oral IFN can potentially lower the virologic relapse rate in HCV patients with mild fibrosis. It also appears that oral IFNα could be useful in restoring depressed platelet counts in HCV patients who have undergone treatment with injectable IFN.  This latter important finding has application in a number of other diseases and treatment regimens that cause thrombocytopenia. Further studies to confirm and expand the beneficial findings from this study are clearly warranted.

Safety of oral IFN was excellent in this study. There were no increases in adverse event incidence or severity in the IFN groups, compared to placebo, and there was no increase in the rate of early study drop-outs.

The University of Western Australia in Perth conducted a Phase 2 clinical study of oral IFN as prevention/treatment of respiratory illnesses, including influenza during the winter cold/flu season in 2009.  A total of 200 healthy volunteers were enrolled to take oral IFN or placebo lozenges once daily for 16 weeks.  Once per week, the study volunteers completed a questionnaire detailing the severity of any cold/flu symptoms experienced, any medications taken, number of days of work missed, etc. Results will be published in the Journal Influenza and Other Respiratory Viruses in early 2013.

Overall, the incidence of serologically confirmed viral infections (influenza and non-influenza) was the same in both the interferon-alpha and placebo groups. However, the proportion of seropositive participants who reported moderate to severe cold/flu symptoms was 76.2% in the placebo group, compared to only 23.8% in the interferon-alpha group (p=0.0082), indicating that, while prophylaxis with interferon-alpha lozenges did not reduce the incidence of infection, it did significantly reduce the incidence of moderate to severe viral respiratory illness.

Interferon prophylaxis had a significant impact on the reporting of moderate to severe feverishness by the study population. For moderate to severe symptoms, feverishness was significantly reduced from an incidence of 23.3% in the placebo group to only 11.7% in the IFN group (p=0.036). Similar trends were observed in the reduction of moderate to severe head congestion (p=0.053) and sore throat (p=0.056).

Post hoc analysis identified significant reductions in the incidence of acute respiratory illness reported by participants who were male, aged 50 years or more, or received the 2009 seasonal influenza vaccine. The apparent beneficial effect in study participants who had received the seasonal vaccine suggests that treatment with interferon-alpha lozenges may have improved cross-protection against the pandemic influenza A (H1N1) 2009 strain following seasonal influenza vaccination.

The positive results from this study indicate the need for further studies to help clarify whether prophylaxis with interferon-alpha lozenges reduces the severity of illness and complications of influenza and other respiratory infections in the elderly and other high risk groups, and to explore the potential for interferon-alpha lozenges to enhance vaccine-induced protection against influenza.

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, including uncertainties related to product development, uncertainties related to the need for regulatory and other government approvals, dependence on proprietary technology, uncertainty of market acceptance of oral IFN or the Company's other product candidates and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. In particular, see "Item 1. Description of Business" and "Item 7A. Qualitative and Quantitative Disclosures About Market Risk" of the Company's Form 10-K for the year ended December 31, 2011.

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