NVUS 2018 Annual Report

Novus conducted four clinical trials of its first generation, antibiotic only formulation (OP0101), which it believes supported the utility of the foam platform in AOE. Data from the most recent clinical trial was announced in January 2015. The study was a 220 patient, phase 2, randomized, multicenter, parallel, active comparator trial in 220 AOE patients ages six months and older. During this trial, OP0101, which contains 0.3% ciprofloxacin, was administered once-daily for 7 days (7 doses) while the active comparator (CIPRODEX), which contains 0.3% ciprofloxacin and 0.1% dexamethasone, was administered twice-daily for 7 days (14 doses). The primary endpoint of the study was clinical cure, defined as score = 0 for erythema, edema, tenderness, ear discharge (otorrhea), and no further antibiotic required. Safety and efficacy of OP0101 was found to be non-inferior to CIPRODEX, even though OP0101 contained no steroid and utilized 50% fewer doses over the week-long course of therapy. Although OP0101 proved to be effective in treating AOE infection, the product is not sufficiently differentiated from other products in the market. Novus believes that none of the currently marketed products adequately address the greatest unmet need, which is rapid pain relief. Therefore, in 2016, Novus began development of OP0102, a second-generation formulation designed to rapidly relieve ear pain and eradicate infection with less than seven days of treatment. Novus subsequently paused OP0102 development to focus resources on the surfactant program. The competitive conditions faced by the Company are described in greater detail in Part I, Item 1A. Risk Factors in this Annual Report on Form 10- . XQGHU WKH FDSWLRQ ³ We face substantial competition, which may result in others discovering, developing or commercializing competing products before o U PRUH VXFFHVVIXOO\ WKDQ ZH GR ´ Intellectual Property 1RYXV¶V VXFFHVV GHSHQGV LQ SDUW RQ LWV DELOLW\ WR REWDLQ DQG PDLQWDLQ SURSULHWDU\ SURWHFWLRQ IRU LWV SURGXFW FDQGLGDWHV novel discoveries, product technologies and other know-how, to operate without infringing on the proprietary rights of others DQG WR SUHYHQW RWKHUV IURP LQIULQJLQJ 1RYXV¶V SURSULHWDU\ ULJKWV 1RYXV VHHNV WR SURWHFW LWV SURGXFW FDQGLGDWHV E\ DPRQJ other methods, filing U.S. and foreign patent applications related to its proprietary technology, inventions and improvements that are important to the development and implementation of its business. Novus also relies on trademarks, trade secrets, know-how, continuing technological innovation and potential in-licensing opport XQLWLHV WR GHYHORS DQG PDLQWDLQ 1RYXV¶V SURSULHWDU\ SURWHFWLRQ IRU 1RYXV¶V SURGXFW FDQGLGDWHV 1RYXV¶V LQWHOOHFWXDO SURSHUW\ SRUWIROLR LQFOXGHV issued patents and patent applications directed towards products derived from 1RYXV¶V foam platform (OP01xx) and surfactant platform (OP02xx) with claims to pharmaceutical preparations as well as to methods of treatment. For OP0101 and OP0102, Novus owns or has exclusive rights to two families of patents, one with three U.S. and seven foreign patents (Canada, France, Germany, Israel, Italy, Spain, and the United Kingdom), and a second with two U.S. and five foreign patents (France, Germany, Italy, Spain and the United Kingdom). In the first family the last to expire issued patent in the U.S. will expire in September 2027, including patent term adjustment. In the second family the last to expire issued patent in the U.S. will expire in December 2033. For OP0201, Novus has exclusive rights to seven U.S. and three foreign patents (Canada, Mexico, and Europe). The last to expire patent in the U.S. will expire in November 2019. In addition, Novus owns or has exclusive rights to two U.S. patent applications and seven foreign patent applications. If allowed. the last to expire patent application will expire in December 2039, absent any adjustments or extensions. Patents extend for varying periods according to the date of patent filing or grant and the legal term of patents in various countries where patent protection is obtained. The actual protection afforded by a patent, which can vary from country to country, depends on the type of patent, the scope of its coverage and the availability of legal remedies in the country. Novus also protects its proprietary information by requiring its employees, consultants, contractors and other advisors to execute nondisclosure and assignment of invention agreements upon commencement of their respective employment or engagement. In addition, Novus also requires confidentiality or service agreements from third parties that receive confidential information or materials. License Agreement with Otodyne, Inc. In November 2015, Novus entered into a license agreement with Scientific Development and Research, Inc. and Otodyne, Inc. granting Novus exclusive worldwide rights to develop and commercialize surfactant-based products. Under the terms of the agreement, Novus is obligated to use commercially reasonable efforts to seek approval for and commercialize at least one product for otitis media in the U.S. and key European markets (France, Germany, Italy, Spain, and the United Kingdom). Novus is responsible for prosecuting, maintaining, and enforcing all intellectual property and will be the sole owner of improvements.

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