Cats are expected to be able to get the new vaccine by the fall of 2021, if approved by the USDA.
In November, a Covid-19 outbreak in Denmark’s vast mink farms led to the culling of more than 17 million of the ferret-like animals to halt the spread of a new mutated strain of the virus back to humans. Months earlier, the Bronx Zoo in New York made headlines when it revealed a tiger had tested positive for Covid-19. Since then, dozens of cats and dogs have been diagnosed with mild cases of the disease, in places ranging from Texas to Hong Kong. Now, two tiny biotech companies — one in Italy and the other in Long Island, New York — are working together on a Covid-19 vaccine for cats that could prevent reinfection from animals back to humans and soothe the fears of pet owners worldwide.
Developed by Italian startup Takis Biotech’s veterinary arm EvviVax, in partnership with New York-based Applied DNA Sciences, the vaccine will consist of two doses and will enter clinical trials on cats this month in New York. It’s based on the same technology used for Takis’ Covid-19 vaccine for humans, in development since early 2020, which uses fragments of DNA to produce proteins that induce an immune response against the virus. The trials are expected to last six months, with the goal of receiving approval from the U.S. Department of Agriculture by the summer.
The first animals to be inoculated with this vaccine will be cats. Most of the 54 cats in the U.S. diagnosed with Covid-19 have had mild symptoms ranging from sneezing to runny noses, compared to the high death rates in infected minks. Beyond protecting cats from infection, the primary objective is to prevent them from developing a mutant strain that could reinfect humans. While there haven’t been any cases of cats infecting humans with the virus, the potential for transmission still exists.
“I find it viscerally hard to believe that the cat sleeping at the foot of my bed, infected with Covid, does not provide a risk to humans somehow,” says Applied DNA Sciences CEO James Hayward, cautioning that there is still little reason for cat owners to worry about getting infected by their pets. “I don’t think the notion of having a reservoir of the same virus that can infect and devastate humans in the household cat is a good concept. In the course of protecting domestic cats, we protect humans at the same time.”
STONY BROOK, N.Y. January 5, 2021. Applied DNA Sciences, Inc. (NASDAQ: APDN) (the “Company”), a leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing, announced that Dr. James A. Hayward, president and CEO, will participate in a fireside chat at the virtual H.C. Wainwright BIOCONNECT 2021 Conference to be held January 11-14, 2021. The fireside chat will be hosted by Yi Chen, Managing Director, H.C. Wainwright Equity Research, and Applied DNA covering analyst.
The fireside chat will be available for on-demand listening beginning on Monday, January 11, 2021, at 6:00 a.m. Eastern Standard Time on the IR Calendar section of the Applied DNA website at www.adnas.com. An archived replay of the fireside chat will be available on the Company’s website for 90 days.
About Applied DNA Sciences Applied DNA is a provider of molecular technologies that enable supply chain security, anti-counterfeiting and anti-theft technology, product genotyping, and pre-clinical nucleic acid-based therapeutic drug candidates.
The Company’s common stock is listed on NASDAQ under ticker symbol ‘APDN’, and its publicly traded warrants are listed on OTC under ticker symbol ‘APPDW’.
Applied DNA is a member of the Russell Microcap® Index.
Investor contact: Sanjay M. Hurry, Applied DNA Sciences, 917-733-5573, sanjay.hurry@adnas.com
STONY BROOK NY. January 4. 2021.Applied DNA Sciences, Inc. (NASDAQ: APDN) (“Applied DNA” or the “Company”), a leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing, announced today that it expects revenues for the first fiscal quarter of 2021 ended December 31, 2020, to be in the range of $1.3 million to $1.6 million compared to revenues of $314,000 in the fourth quarter of fiscal 2020. The strong sequential growth in quarterly revenues is driven principally by demand for safeCircle™, the pooled COVID-19 surveillance testing program offered by the Company’s wholly-owned subsidiary, Applied DNA Clinical Laboratories, LLC (ADCL), and from sales of its Linea™COVID-19 Assay Kit under U.S. Food and Drug Administration (FDA) Emergency Use Authorization (EUA).
“Fiscal first-quarter revenues surged over fiscal fourth quarter, reflecting the first full quarter of revenue contribution from our safeCircle program. New client acquisitions drove a sequential improvement in ADCL revenues during each month of the quarter. We believe we are tapping into an unmet need for an accurate, painless, and fast COVID-19 risk mitigation option that can deliver ongoing, consistent, and highly accurate COVID-19 surveillance testing proactively. We expect continued uplift to revenues over the coming weeks as new clients ramp up their testing volumes, including Suffolk County (N.Y.) Government that signed on just two weeks ago with a six-month contract valued at up to $2.0 million, and as we onboard more new clients,” said Dr. James A. Hayward, president and CEO, Applied DNA.
“Interest in our pooled surveillance testing modality is strong and growing. In the months ahead, our ADCL team is intensely focused on increasing testing throughput, developing new COVID-19 assays to detect mutations in SARS-CoV-2, offering expanded services via the Cleared4 return-to-work health safety platform, and client acquisition and retention through direct sales efforts and channel partners,” concluded Dr. Hayward.
These preliminary unaudited results are based on management’s initial analysis of operations for the first fiscal quarter of 2021 ended December 31, 2020, and are subject to review and revision. The Company expects to issue full financial results for the first fiscal quarter of 2021 in mid-February.
About safeCircle™ ADCL’s pooled surveillance testing program, known as safeCircle™, utilizes frequent, high-sensitivity pooled testing to help prevent virus spread by quickly identifying infections within a community, school, or workplace. safeCircle provides 24-hour results using real-time PCR (RT-PCR) testing.
Click through to learn more about how safeCircle can help your community, school, and workplace: safeCircle
About the Linea™COVID-19 Assay Kit and Pooled Surveillance Testing The Linea™COVID-19 Assay Kit is authorized by FDA EUA for the qualitative detection of nucleic acid from SARS-CoV-2 in respiratory specimens, including anterior nasal swabs, self-collected at a healthcare location or collected by a healthcare worker, and nasopharyngeal and oropharyngeal swabs, mid-turbinate nasal swabs, nasopharyngeal washes/aspirates or nasal aspirates, and bronchoalveolar lavage (BAL) specimens collected by a healthcare worker from individuals who are suspected of COVID-19 by their healthcare provider. The scope of the Linea™COVID-19 Assay Kit EUA, as amended, is expressly limited to use consistent with the Instructions for Use by authorized laboratories, certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) to perform high complexity tests. The EUA will be effective until the declaration that circumstances exist justifying the authorization of the emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 is terminated or until the EUA’s prior termination or revocation. The diagnostic kit has not been FDA cleared or approved, and the EUA’s limited authorization is only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens.
The Company is offering surveillance testing in compliance with current CDC, FDA, and CMS guidances. The use of saliva and pooled sampling for surveillance testing, which has been internally validated by the Company in compliance with current surveillance testing guidances, is not included in the Company’s EUA authorization for the Linea™COVID-19 Assay Kit.
About Applied DNA Sciences Applied DNA is a provider of molecular technologies that enable supply chain security, anti-counterfeiting and anti-theft technology, product genotyping, and pre-clinical nucleic acid-based therapeutic drug candidates.
The Company’s common stock is listed on NASDAQ under ticker symbol ‘APDN’, and its publicly traded warrants are listed on OTC under ticker symbol ‘APPDW’.
Applied DNA is a member of the Russell Microcap® Index.
Preliminary Financial Information The preliminary information and estimates in respect of the Company’s first fiscal quarter of 2021 performance set forth herein constitute forward-looking statements, upon which you should not place undue reliance because they may prove to be materially inaccurate. The preliminary information and estimates have not been compiled or examined by the Company’s independent auditors and they are subject to revision as the Company prepares its quarterly financial statements, and as the Company’s auditors conduct their review thereof. While the Company believes that such preliminary information and estimates are based on reasonable assumptions, actual results may vary, and such variations may be material. Factors that could cause our preliminary information and estimates to differ from the information and estimates presented herein include, but are not limited to: (i) additional adjustments in the calculation of, or application of accounting principles for, the financial results for the first fiscal quarter of 2021, and (ii) discovery of new information that impacts these results.
Forward-Looking Statements The statements made by Applied DNA in this press release may be “forward-looking” in nature within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe Applied DNA’s future plans, projections, strategies, and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of Applied DNA. Actual results could differ materially from those projected due to its history of net losses, limited financial resources, limited market acceptance, the possibility that pooled surveillance testing and assay kits could become obsolete or have their utility diminished, the uncertainties inherent in research and development, future clinical data and analysis, including whether any of Applied DNA’s or its partner’s diagnostic candidates will advance further in the preclinical research or clinical trial process, including receiving clearance from the U.S. Food and Drug Administration or equivalent foreign regulatory agencies to conduct clinical trials and whether and when, if at all, they will receive final approval from the U.S. FDA or equivalent foreign regulatory agencies, the unknown outcome of any applications or requests to U.S. FDA, equivalent foreign regulatory agencies and/or the New York State Department of Health, the unknown limited duration of any Emergency Use Authorization (EUA) approval from U.S. FDA, changes in guidances promulgated by the CDC, FDA and/or CMS relating to COVID-19 surveillance testing, disruptions in the supply of raw materials and supplies, and various other factors detailed from time to time in Applied DNA’s SEC reports and filings, including our Annual Report on Form 10-K filed on December 17, 2020, and other reports we file with the SEC, which are available at www.sec.gov. Applied DNA undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless otherwise required by law.
Investor contact: Sanjay M. HurryApplied DNA Sciences,917-733-5573, sanjay.hurry@adnas.com
Applied DNA’s safeCircle™ Program Integrates with CLEARED4 Digital Platform for Online Health Safety Management and Reporting, Option Geared for Scaling of High-Volume Testing Clients
STONY BROOK, N.Y. December 29, 2020 – Applied DNA Sciences, Inc. (NASDAQ: APDN) (“Applied DNA” or the “Company”), a leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing, announced today that its wholly-owned subsidiary, Applied DNA Clinical Laboratories, LLC (ADCL) has entered into a reseller and sales referral partnership with CLEARED4, a field-proven, New York-based provider of return-to-work health safety solutions. Under the terms of the partnership, ADCL can resell subscriptions to CLEARED4’s platform as part of ADCL’s safeCircle™ pooled COVID-19 surveillance testing program, and CLEARED4 can refer its clients seeking pooled COVID-19 surveillance testing to ADCL.
The companies have integrated ADCL’s safeCircle laboratory testing operations with CLEARED4’s return-to-work health safety platform as a value-added option for current and prospective ADCL clients. CLEARED4 has also integrated ADCL’s cost-effective pooled surveillance testing solution into its HIPAA-compliant platform and can offer safeCircle to its existing and prospective clients to enhance their COVID-19 safety protocols. The CLEARED4 platform recently issued its one-millionth return-to-work Access Pass to its national client base that is attracted by the platform’s highly customizable user experience: mobile text and email messaging; a suite of health-centric modules for surveys and contact tracing and reporting; on-site kiosks; and now integrated with safeCircle’s PCR-based pooled surveillance testing and reporting to manage valuable COVID-19 clearance and to help empower safe re-openings. ADCL can now offer clients new platform management features following safeCircle’s integration with CLEARED4, including the ability to automate the management and monitoring of clients’ surveillance testing programs and ensure timely communication of valuable testing program results and quarantine compliance.
ADCL’s newest safeCircle client, the Suffolk County (N.Y.) Government, is utilizing CLEARED4 to manage the reporting of COVID-19 pooled surveillance testing for portions of its workforce. Applied DNA also recently purchased an end-user license to deploy the CLEARED4 platform for its own internal pooled surveillance testing program for its employees.
Dr. James A. Hayward, president and CEO, Applied DNA, said, “Partnering with CLEARED4 aligns with our growth expectations for the safeCircle platform and is especially functional for scaling high-volume clients. Identifying potential infections early and in a cost-efficient and rapid manner is how pooled surveillance testing gets workers back to work, students back to school, and communities to reopen. With business momentum increasing, we look to grow and service our safeCircle client base with partners who offer value-added features.”
Dr. Soumi Eachempati, CEO of Chelsea Health Solutions and Cleared4, and former Professor of Surgery and Public Health at Weill Cornell Medical School, stated, “The partnership between Applied DNA and CLEARED4 offers an unmatched level of COVID-19 risk mitigation and management to schools and businesses. CLEARED4’s medically-based software platform has already yielded over one million access passes. We are poised to create millions more through this partnership and expansion into entertainment and sporting venues, as well as dining and travel uses, with our novel vaccine verification technique.”
About safeCircle™ ADCL’s pooled surveillance testing program, known as safeCircle™, utilizes frequent, high-sensitivity pooled testing to help prevent virus spread by quickly identifying infections within a community, school, or workplace. safeCircle provides 24-hour results using real-time PCR (RT-PCR) testing.
Click through to learn more about how safeCircle can help your community, school, and workplace: safeCircle
About the Linea™ COVID-19 Assay Kit and Pooled Surveillance Testing The Linea™ COVID-19 Assay Kit is authorized by FDA EUA for the qualitative detection of nucleic acid from SARS-CoV-2 in respiratory specimens, including anterior nasal swabs, self-collected at a healthcare location or collected by a healthcare worker, and nasopharyngeal and oropharyngeal swabs, mid-turbinate nasal swabs, nasopharyngeal washes/aspirates or nasal aspirates, and bronchoalveolar lavage (BAL) specimens collected by a healthcare worker from individuals who are suspected of COVID-19 by their healthcare provider. The scope of the Linea™ COVID-19 Assay Kit EUA, as amended, is expressly limited to use consistent with the Instructions for Use by authorized laboratories, certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) to perform high complexity tests. The EUA will be effective until the declaration that circumstances exist justifying the authorization of the emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 is terminated or until the EUA’s prior termination or revocation. The diagnostic kit has not been FDA cleared or approved, and the EUA’s limited authorization is only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens.
The Company is offering surveillance testing in compliance with current CDC, FDA, and CMS guidances. The use of saliva and pooled sampling for surveillance testing, which has been internally validated by the Company in compliance with current surveillance testing guidances, is not included in the Company’s EUA authorization for the Linea™ COVID-19 Assay Kit.
About Applied DNA Sciences Applied DNA is a provider of molecular technologies that enable supply chain security, anti-counterfeiting and anti-theft technology, product genotyping, and pre-clinical nucleic acid-based therapeutic drug candidates.
The Company’s common stock is listed on NASDAQ under ticker symbol ‘APDN’, and its publicly traded warrants are listed on OTC under ticker symbol ‘APPDW’.
Applied DNA is a member of the Russell Microcap® Index.
About CLEARED4 CLEARED4 is one of a suite of health-safety solutions from Chelsea Health Solutions, a NY company, enabling businesses, schools, stadiums and municipalities across America to return safely during this pandemic. CLEARED4 is a patent-pending, HIPAA compliant platform that provides a higher level of safety, compliance and automation where communicable health issues could occur and afflict other individuals. Pioneered from advanced technology, CLEARED4 includes advanced symptom monitoring, integrated access control, automated contract tracing, Covid-19 testing and vaccination verification.Chelsea Health Solutions launched the CLEARED4 platform in April 2020 with CLEARED4WORK, and more recently launched additional vertical specific health-safety solutions including CLEARED4CLASS, CLEARED4FANS, CLEARED4DINING and CLEARED4TRAVEL.
CLEARED4 is easy to implement and can be integrated into the reopening plan of a new client within 24 hours.
Forward-Looking Statements The statements made by Applied DNA in this press release may be “forward-looking” in nature within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe Applied DNA’s future plans, projections, strategies, and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of Applied DNA. Actual results could differ materially from those projected due to, its history of net losses, limited financial resources, limited market acceptance, the uncertainties inherent in research and development, future clinical data and analysis, including whether any of Applied DNA’s or its partner’s diagnostic candidates will advance further in the preclinical research or clinical trial process, including receiving clearance from the U.S. Food and Drug Administration or equivalent foreign regulatory agencies to conduct clinical trials and whether and when, if at all, they will receive final approval from the U.S. FDA or equivalent foreign regulatory agencies, the unknown outcome of any applications or requests to U.S. FDA, equivalent foreign regulatory agencies and/or the New York State Department of Health, the unknown limited duration of any Emergency Use Authorization (EUA) approval from U.S. FDA, changes in guidances promulgated by the CDC, FDA and/or CMS relating to COVID-19 surveillance testing, disruptions in the supply of raw materials and supplies, and various other factors detailed from time to time in Applied DNA’s SEC reports and filings, including our Annual Report on Form 10-K filed on December 17, 2020, and other reports we file with the SEC, which are available at www.sec.gov. Applied DNA undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless otherwise required by law.
Investor contact: Sanjay M. Hurry, Applied DNA Sciences, 917-733-5573, sanjay.hurry@adnas.com Program contact: Mike Munzer, Applied DNA Sciences, 631-240-8814, mike.munzer@adnas.com
Receives Second Warrant Exercise Subsequent to Year-End for Net Proceeds of $1.05 Million Company to Hold Conference Call and Webcast Today, Thursday, December 17, 2020 at 4:30 PM ET
STONY BROOK, N.Y. – December 17, 2020 – Applied DNA Sciences, Inc. (NASDAQ: APDN) (“Applied DNA” or the “Company”), a leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing, today announced consolidated financial results for the full fiscal year and quarter ended September 30, 2020.
“Our activities in fiscal 2020 were principally devoted to the establishment of our diagnostic and surveillance testing programs for COVID-19 and to further positioning our proprietary LinearDNA™ manufacturing platform as what we believe to be a cleaner and higher-performing alternative to traditional vaccine development technologies in an environment moving at pandemic speeds to bring efficacious COVID-19 vaccines to market,” said Dr. James A. Hayward, president and CEO, Applied DNA. “With the shutdown in global supply chains severely affecting the performance of our supply chain security business, we redirected resources to our Biotherapeutics and Diagnostics markets: we initiated our own human and veterinary linear DNA COVID-19 vaccine development programs with partner Takis Biotech/EvviVax. While having clear public health goals, these programs also serve to validate our linear DNA manufacturing platform and its manufacturing advantages over plasmid DNA production that underpins current vaccine manufacturing technology; having acquired virus expertise as a result of our vaccine development work, we launched our Linea™COVID-19 Assay Kit (the “COVID-19 test”) and related testing services as part of a multi-pronged approach to the pandemic to establish new revenue streams.
“The result of these efforts was the development of a highly sensitive, highly specific, EUA-authorized diagnostic test that, when paired with safeCircle™, our pooled surveillance testing platform, is in the marketplace today as a cost-effective, and convenient means to help break the chain of virus transmission. We ended the fiscal year having secured our first customer of size for our kit, established an initial base of recurring revenue for our safeCircle platform, and initiated a clinical path for our lead veterinary vaccine candidate with an end goal of enabling commercial veterinary sales for domestic felines.”
Continued Dr. Hayward, “Our development efforts in fiscal 2020 have laid the groundwork for multiple inflection points in fiscal 2021. The sales pipelines for our COVID-19 test and safeCircle offerings are building. In particular, safeCircle is experiencing resonance in the marketplace that, together with a recently established ‘return-to-work’ partnership, enables us to target market niches we believe we can exploit profitably, such as local governments, private and enterprise clients, schools, and higher education athletics departments. We anticipate both offerings to scale up their contributions to our top-line over the coming quarters.
“Our own human linear DNA COVID-19 vaccine development program has not progressed as anticipated; however, the preclinical work we have conducted to date serves as the basis for a veterinary COVID-19 vaccine candidate that we believe offers a shorter and less costly regulatory path to commercialization. Domestic cats are a known virus reservoir and can easily transmit the virus to other felines. If all trial endpoints are met, we will apply for conditional licensure from the U.S.D.A., which we project to be in the latter half of the fiscal year. With about 58 million1 domestic cats in the U.S. and a likely first-mover advantage, we believe that a veterinary vaccine could be commercially significant to us if approved. We would then seek to expand the addressable market for our veterinary vaccine to include the farmed mink industry globally that has been ravaged by the virus, resulting in substantial commercial losses.
“As human COVID-19 vaccines obtain regulatory approval, we believe they evidence shortcomings in their manufacture and distribution that we believe are solvable by linear DNA forms of their vaccines. We believe our LinearDNA platform can produce PCR-based linear DNA at large scale enzymatically and likely with an improved safety profile, modify vaccines reliant on plasmids to address mutations in weeks, not months or years, and offer stability in distribution that potentially eliminates the need for expensive cold-chain requirements. This value proposition can benefit not only COVID-19 vaccines but also every nucleic acid-based program under development today. Concurrently, we see an uptick in contract research activity for biotherapeutic applications that we take to reflect the increasing value being placed on linear DNA by drug developers. Today, we are proud to count leading biotechnology and pharmaceutical companies working in the field of nucleic acid-based medicine as contract research customers. As manufacturing and distribution increasingly become key issues in advancing nucleic-acid-based therapeutic development pipelines, we expect that our LinearDNA platform will become increasingly relevant to existing and prospective customers.
“Finally, we await the return of increased demand patterns in our supply chain security market. The need for brand assurance and supply chain integrity remains as evidenced by our new supply agreement for our CertainT® platform with Pillar Technologies as it relates to the authenticity of personal protective equipment being consumed by our front-line healthcare workers, and by Nutrition21 who has transitioned its portfolio of IP-protected ingredients to CertainT. We remain cautiously optimistic on the prospects in this business in the new fiscal year,” concluded Dr. Hayward.
Fiscal Fourth Quarter 2020 Financial Results:
Revenues decreased 81% for the fourth quarter of fiscal 2020 to $314 thousand, compared with $1.7 million reported in the same period of the prior fiscal year and decreased 27% from $432 thousand for the third quarter of fiscal 2020. The decrease in revenues year over year was due primarily to a decrease in product revenues of approximately $1.1 million, which was primarily from shipments of DNA concentrate to protect the cotton supply chain during the prior fiscal year. The year over year decrease is also due to a decrease of $231 thousand in service revenues. The decrease in revenue quarter over quarter was due to a decrease in service revenue of $183 thousand, primarily related to the textile industry.
Total operating expenses increased to $4.2 million for the fourth fiscal quarter of 2020, compared with $3.2 million in the prior fiscal year’s fourth quarter. This increase is primarily attributable to an approximate $313 thousand increase in payroll. This increase in payroll is primarily attributable to a reversal of voluntary salary reductions and increased staffing at Applied DNA Clinical Laboratories, LLC., as well as an increase in research and development expense of $353 thousand centered on the Company’s Linea™COVID-19 assay kit.
Net loss applicable to common stockholders for the quarter ended September 30, 2020 was $4.1 million, or $0.82 per share, compared with a net loss of $1.5 million, or $1.44 per share, for the quarter ended September 30, 2019
Excluding non-cash expenses, Adjusted EBITDA was negative $3.8 million and negative $1.6 million for the quarters ended September 30, 2020 and 2019, respectively. See below for information regarding non-GAAP measures.
Cash and cash equivalents stood at $7.8 million on September 30, 2020. Subsequent to the fiscal quarter, the Company received two exercises of warrants associated with its November 15, 2019 underwritten public offering (the “2019 Warrants”). The first exercise totaled net proceeds of approximately $1.7 million to the Company that was used to repay all outstanding secured convertible notes of $1.7 million. In accordance with the 2019 Warrants exercise agreement entered into in October 2020, the Company issued approximately 159,000 replacement warrants at an exercise price of $7.52. The second exercise totaled approximately $1.05 million in net proceeds to the Company. Also, in accordance with the 2019 Warrant exercise agreement and the second warrant exercise, the Company issued approximately 100,000 replacement warrants at an exercise price of $6.57 for 50,000 replacement warrants and $6.46 for 50,000 replacement warrants. Approximately 460,000 2019 Warrants are outstanding as of December 10, 2020.
Full Fiscal Year 2020 Financial Results:
Revenues for fiscal 2020 totaled $1.9 million, a decrease of 64% from $5.4 million from the prior fiscal year. The decrease in revenues was due to a decrease in service revenues of $1.9 million, or 60%, and a decrease in product revenues of $1.5 million, or 71%. The decrease in service revenue was primarily attributable to a decrease of $1 million from a cannabis licensing agreement (now terminated), as well as an additional decrease of $613 thousand for a government contract award that ended during the second half of fiscal 2019. The decrease in product revenues relates to a decrease in textiles of $1.35 million for shipments of DNA concentrate to protect the cotton supply chain that occurred during the prior fiscal year. This decrease in textiles revenue is primarily as result of the global shut down related to the COVID-19 pandemic adversely impacting the textile industry.
Operating expenses for the fiscal year ended September 30, 2020 increased slightly by $110 thousand, or 1% as compared to the prior fiscal year.
Net loss applicable to common stockholders for the twelve months ended September 30, 2020 was $13.0 million or $3.32 per share, compared with a net loss of $8.9 million or $9.69 per share for the twelve months ended September 30, 2019.
Excluding non-cash expenses and interest, Adjusted EBITDA for the fiscal year ended September 30, 2020 was a negative $11.6 million as compared to a negative $7.6 million for the prior fiscal year. See below for information regarding non-GAAP measures.
On November 25, 2020, Applied DNA was granted an amendment to its Emergency Use Authorization by the U.S. FDA that expanded the installed base of RT-PCR platforms that can process the assay kit to include the Applied Biosystems™ 7500 Fast Dx Real-Time PCR System, a system found in the majority of clinical laboratories nationally.
On November 12, 2020, the Company received a blanket purchase order from Stony Brook University Hospital (SBUH) for assay kits and consumables to power SBUH’s newly-launched surveillance testing program that aims to cover testing of 9,000 individuals per week with 1,800 pooled (5 individuals per pool) tests per week. The Company anticipates recurring purchase orders from SBUH to support SBUH’s ongoing surveillance testing needs.
On September 29, 2020, the Company and SBUH signed a one-year Master Service Agreement (MSA) to supply the Company’s COVID-19 assay on an as-needed basis to SBUH. The Company also designed and implemented an automated, high-throughput COVID-19 testing workflow in the SBUH clinical lab that is now being used to enable SBUH’s surveillance testing program. Concurrently, the Company received an initial purchase order under the MSA.
Applied DNA Clinical Labs, LLC (ADCL)
On December 11, 2020, the Company stated that it is experiencing growing demand for its safeCircle pooled COVID-19 surveillance testing program that is being primarily driven by New York State schools moving to comply with the State’s Winter COVID-19 Plan. Applied DNA has secured new agreements with schools and colleges that represent a potential weekly testing population of >5,000 individuals, from which a varying percentage are tested each week. Several contracts are contingent on the schools’ ability to secure funding.
On December 1, 2020, Applied DNA announced that it is providing its pooled surveillance testing program, safeCircle™ , to the Stony Brook University Seawolves men’s and women’s basketball teams – student-athletes and coaching staff – for the balance of the calendar year.
On November 25, 2020, the Company announced the results of New York State Department of Health’s (DoH) initial inspection report of ADCL that highlighted deficiencies at the clinical lab that were present at the time of the inspection that require remediation prior to the submission of a re-inspection request. The Company expects to complete remediation actions during the first calendar quarter of 2021. The Company’s safeCircle platform and its ability to conduct pooled surveillance testing is not impacted by the DoH’s report.
On November 10, 2020, Applied DNA announced that its assay was selected by SBUH for use in SBUH’s newly launched COVID-19 surveillance testing program that is modeled after the Company’s safeCircle™ platform, a pooled surveillance testing program. At peak operations, SBUH will test its 9,000-member faculty and staff of SBUH and Renaissance School of Medicine every week that would equate to 1,800 (5 individuals per pooled test) of the Company’s tests per week.
On October 30, 2020, the Company announced that it was boosting its surveillance testing capacity through the expanded use of robotic automation. The Company’s expansion plans support the reception to ADCL’s surveillance testing-as-a-service offering enhanced by ongoing sales and marketing outreach efforts.
On October 12, 2020, announced that it secured COVID-19 surveillance testing contracts that are estimated to generate more than $1.0 million in total annualized revenue beginning October 1, 2020.
Vaccine Candidates
On November 30, 2020, Applied DNA and its development partner, EvviVax, announced the receipt of regulatory approval from the New York State Department of Agriculture and Markets and the U.S. Department of Agriculture (USDA) to initiate a veterinary clinical trial of its lead LinearDNA™ COVID-19 vaccine candidate in domestic companion felines. The goal of the trial is to evaluate the vaccine candidate as a strategy for the prevention of SARS-CoV-2, the virus that causes COVID-19, in feline companions of humans that would mitigate the animals as a potential reservoir for infections in humans. Domestic felines are a known COVID-19 reservoir and can transmit the virus to other felines.
The trial allows for immunologic data to be gathered across the clinical trial cohort that may also support the initiation of a near-concurrent challenge trial, which is under development. Achievement of both trials’ primary endpoints we believe would enable the Company and EvviVax to apply for a USDA APHIS conditional license (9 CFR 102.6) for a LinearDNA COVID-19 vaccine candidate for domestic felines.The Company believes that an efficacious vaccine for domestic felines would be similarly efficacious to mink, another known COVID-19 reservoir. SARS-CoV-2 has severely impacted the farmed mink industry and mink-linked virus mutations now present in humans in at least 7 countries. Applied DNA believes that should its veterinary COVID-19 vaccine candidate gain conditional licensure for the vaccine candidate, it could have significant utility in mitigating the spread of the virus in commercial animal populations and from animal populations to humans.
LineaRx
On November 2, 2020, the Company announced orders for its linear DNA to be evaluated in an RNA vaccine and Adeno-Associated Virus (AAV) production from two new contract research customers, respectively. The Company also announced a follow-on order from a repeat customer for a preclinical CAR T therapy. All orders are expected to ship during the quarter ending December 30, 2020.
On August 17, 2020, Applied DNA filed for a nonprovisional patent application with the United States Patent and Trademark Office (USPTO) entitled “Methods and Systems of PCR-Based Recombinant Adeno-Associated Virus Manufacture” (the “Patent”). The Patent claims priority to a previously filed provisional patent application filed with the USPTO in August of 2019.
Supply Chain Security
On December 7, 2020, the Company announced that Nutrition21 has transitioned to the Company’s CertainT platform to secure its IP-protected portfolio of dietary supplement ingredients. Concurrently, the Company received two follow-on orders for a second year of commercial production, the majority of which is expected to be shipped in the quarter ending December 31, 2020.
On September 21, 2020, Applied DNA entered into a supply agreement for its CertainT™ platform with Pillar Technologies (Pillar), a subsidiary of ITW (Illinois Tool Works). The Company will supply SigNature® molecular tags and SigNify® in-field authentication devices to Pillar for use on materials and products treated with Pillar’s patented plasma deposition technology. The supply agreement supports Pillar’s strategy to combat the growing issue of counterfeit PPE entering the healthcare supply chain as the COVID-19 pandemic increases demand and has grown to include other materials and products manufactured by Pillar’s customers.
On August 12, 2020, the Company received a Notice of Allowance for its U.S. Patent Application No. 14/572,552 (US 2016/0168781 A1) entitled “Method and Device for Marking Fibrous Materials.” The allowed claims cover methods of DNA-tagging cotton fibers while they travel through the forced air systems found at cotton gins, and later authenticating the DNA-tagged cotton fibers to prove their provenance and/or authenticity all the way to finished goods. The allowed patent application extends the Company’s patent protection for its proprietary DNA Transfer System, a key component of its CertainT® platform for cotton
Corporate
On October 8, 2020, Applied DNA announced the repayment of secured convertible notes in an aggregate amount of approximately $1.7 million, representing the outstanding amount of the Notes plus interest through the scheduled maturity of the Notes. The repayment was funded by the exercise of warrants issued as part of the Company’s November 15, 2019 underwritten public offering for total proceeds to Applied DNA of approximately $1.7 million.
Fiscal Fourth Quarter 2020 Conference Call Information The Company will hold a conference call and webcast to discuss its fiscal fourth quarter-end 2020 results on Thursday, December 17, 2020 at 4:30 PM ET. To participate on the conference call, please follow the instructions below. While every attempt will be made to answer investors’ questions on the Q&A portion of the call, due to the large number of expected participants, not all questions may be answered.
To Participate:
Participant Toll Free:1-844-887-9402
Participant Toll: 1-412-317-6798
Please ask to be joined to the Applied DNA Sciences call
For those investors unable to attend the live call, a copy of management’s PowerPoint presentation will be available for review under the ‘IR Calendar’ portion of the Company’s Investor Relations web site: https://adnasprod.wpengine.com/molecular-based-security/investors/
About the Linea™ COVID-19 Assay Kit The Linea™ COVID-19 Assay Kit is authorized by FDA EUA for the qualitative detection of nucleic acid from SARS-CoV-2 in respiratory specimens, including anterior nasal swabs, self-collected at a healthcare location or collected by a healthcare worker, and nasopharyngeal and oropharyngeal swabs, mid-turbinate nasal swabs, nasopharyngeal washes/aspirates or nasal aspirates, and bronchoalveolar lavage (BAL) specimens collected by a healthcare worker from individuals who are suspected of COVID-19 by their healthcare provider. The scope of the Linea™ COVID-19 Assay Kit EUA, as amended, is expressly limited to use consistent with the Instructions for Use by authorized laboratories, certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) to perform high complexity tests. The EUA will be effective until the declaration that circumstances exist justifying the authorization of the emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 is terminated or until the EUA’s prior termination or revocation. The diagnostic kit has not been FDA cleared or approved, and the EUA’s limited authorization is only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens.The Company is offering surveillance testing in compliance with current CDC, FDA, and CMS guidances. The use of saliva and pooled sampling for surveillance testing, which has been internally validated by the Company in compliance with current surveillance testing guidances, is not included in the Company’s EUA authorization for the Linea™ COVID-19 Assay Kit.
Information about Non-GAAP Financial Measures As used herein, “GAAP” refers to accounting principles generally accepted in the United States of America. To supplement our condensed consolidated financial statements prepared and presented in accordance with GAAP, this earnings release includes Adjusted EBITDA, which is a non-GAAP financial measure as defined in Rule 101 of Regulation G promulgated by the Securities and Exchange Commission. Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or future performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information presented in accordance with GAAP. We use this non-GAAP financial measure for internal financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons of the performance and results of operations of our core business. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the performance of our business by excluding non-cash expenses that may not be indicative of our recurring operating results. We believe this non-GAAP financial measure is useful to investors as they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.
“EBITDA”- is defined as earnings (loss) before interest expense, income tax expense and depreciation and amortization expense.
“Adjusted EBITDA”- is defined as EBITDA adjusted to exclude (i) stock-based compensation and (ii) other non-cash expenses.
About Applied DNA Sciences Applied DNA is a provider of molecular technologies that enable supply chain security, anti-counterfeiting and anti-theft technology, product genotyping, and pre-clinical nucleic acid-based therapeutic drug candidates.
The Company’s common stock is listed on NASDAQ under ticker symbol ‘APDN’, and its publicly traded warrants are listed on OTC under ticker symbol ‘APPDW’.
Applied DNA is a member of the Russell Microcap® Index.
Forward-Looking Statements The statements made by Applied DNA in this press release may be “forward-looking” in nature within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe Applied DNA’s future plans, projections, strategies, and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of Applied DNA. Actual results could differ materially from those projected due to, its history of net losses, limited financial resources, limited market acceptance, the uncertainties inherent in research and development, future clinical data and analysis, including whether any of Applied DNA’s or its partner’s diagnostic or therapeutic candidates will advance further in the preclinical research or clinical trial process, including receiving clearance from the U.S. Food and Drug Administration (U.S. FDA), the U.S. Department of Agriculture (USDA) or equivalent foreign regulatory agencies to conduct clinical trials and whether and when, if at all, they will receive final approval from the U.S. FDA, the USDA or equivalent foreign regulatory agencies, the unknown outcome of any applications or requests to U.S. FDA, USDA, equivalent foreign regulatory agencies and/or the New York State Department of Health, the unknown limited duration of any Emergency Use Authorization (EUA) approval from U.S. FDA, changes in guidances promulgated by the CDC, FDA and/or CMS relating to COVID-19 surveillance testing, disruptions in the supply of raw materials and supplies , and various other factors detailed from time to time in Applied DNA’s SEC reports and filings, including our Annual Report on Form 10-K filed on December 17, 2020, and other reports we file with the SEC, which are available at www.sec.gov. Applied DNA undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless otherwise required by law.
Applied DNA Sciences, Inc. Consolidated Balance Sheets September 30, 2020 and 2019
June 30,2020 (unaudited)
September 30, 2019
ASSETS
Cash and cash equivalents
$7,786,743
$558,988
Accounts receivable, net of allowance of $11,968 and $4,500 atSeptember 30, 2020 and 2019, respectively
194,319
839,951
Inventories
497,367
142,629
Prepaid expenses and other current assets
599,296
604,740
Total current assets
9,077,725
2,146,308
Property and equipment, net
1,277,655
226,221
Other assets:
–
–
Deferred offering costs
–
109,698
Deposits
95,083
62,351
Goodwill
285,386
285,386
Intangible assets, net
605,330
734,771
Total Assets
$11,341,179
$3,564,735
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities
$1,926,427
$1,616,997
Promissory notes payable-current portion
329,299
–
Secured convertible notes payable , net of debt issuance costs
1,499,116
–
Deferred revenue
511,036
628,993
Total current liabilities
4,265,878
2,245,990
Long term accrued liabilities
848,307
621,970
Promissory notes payable-long term portion
517,488
–
Secured convertible notes payable, net of debt issuance costs
–
1,442,497
Secured convertible notes payable, recorded at fair value
–
102,777
Total liabilities
5,631,673
4,413,234
Commitments and contingencies (Note K)
Applied DNA Sciences, Inc. Stockholders’ Equity (Deficit) :Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of September 30, 2020 and 2019, respectively
–
–
Series A Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- issued and outstanding as of September 30, 2020 and 2019, respectively
–
–
Series B Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- issued and outstanding as of September 30, 2020 and 2019, respectively
–
–
Common stock, par value $0.001 per share; 200,000,000 and 500,000,000 shares authorized as of September 30, 2020 and 2019, respectively; 5,142,779 and 1,207,993 shares issued and outstanding as of September 30, 2020 and 2019, respectively
5,144
1,208
Additional paid in capital
275,548,737
255,962,922
Accumulated deficit
(269,835,650)
(256,805,589)
Applied DNA Sciences, Inc. stockholders’ equity (deficit):
5,718,231
(841,459)
Noncontrolling interest
(8,725 )
(7,040 )
Total equity (deficit)
5,709,506
(848,499 )
Total liabilities and equity (deficit)
$11,341,179
$3,564,735
Applied DNA Sciences, Inc. Consolidated Statements of Operations Year Ended September 30, 2020 and 2019
2020
2019
Revenues:
Product
$615,430
$2,136,055
Service
1,316,067
3,253,034
Total revenues
1,931,497
5,389,089
Cost of revenues
720,900
877,613
Operating expenses:
Selling, general and administrative
10,138,103
10,278,045
Research and development
3,321,763
2,967,278
Depreciation and amortization
285,730
390,424
Total operating expenses
13,745,596
13,635,747
LOSS FROM OPERATIONS
(12,534,999)
(9,124,271)
Other (expense) income:
Interest expense (including related party interest of $46,586 for the year ended September 30, 2019)
(115,830)
(162,432)
Other expense, net
(378,075)
(43,299)
Loss on extinguishment of debt
–
(1,260,399)
Unrealized gain on change in fair value of secured convertible notes payable
–
1,972,955
Loss before provision for income taxes
(13,028,904)
(8,617,446)
Provision for income taxes
–
15,000
NET LOSS
(13,028,904)
(8,632,446)
Less: Net loss (income) attributable to noncontrolling interest
1,685
9,323
NET LOSS attributable to Applied DNA Sciences, Inc.
(13,027,219)
(8,623,123)
Deemed dividend related to warrant modifications
2,842
(309,607)
NET LOSS applicable to common stockholders
$(13,030,061)
$(8,932,730)
Net loss per share applicable to common stockholders-basic anddiluted
$(3.32)
$(9.69)
Weighted average shares outstanding-basic and diluted
3,919,072
921,809
Applied DNA Sciences, Inc. Calculation and Reconciliation of Adjusted EBITDA (unaudited)
STONY BROOK, N.Y. – December 17, 2020 – Applied DNA Sciences, Inc. (NASDAQ: APDN) (“Applied DNA” or the “Company”), a leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing, today announced that its wholly-owned subsidiary, Applied DNA Clinical Laboratories, LLC (ADCL), has secured a safeCircle™ pooled COVID-19 surveillance testing program (the “Program”) award with a potential value of up to $2.0 million from the Suffolk County (N.Y.) Government (the “County”). The 6-month term and award value may be increased at the County’s discretion to meet additional testing demand.
“In Suffolk, we know that testing is key to containing the virus, and this new partnership with ADCL will provide all of our employees with the peace of mind they need to continue their critical work, as we are now fully embraced in the second wave of the COVID-19 pandemic,” said Suffolk County Executive Steve Bellone. “Our goal is to give our employees access to fast and convenient testing to ensure a healthy and safe work environment, and I encourage all County employees to take advantage of this new testing program.”
ADCL has partnered with N.Y.-based CLEARED4 to administer value-added services to the County by integrating CLEARED4’s platform with safeCircle’s surveillance testing modality to automate health safety. CLEARED4, a market-leading COVID-19 safety platform, is now integrated with ADCL’s laboratory operations. The partnership enables safeCircle’s clients to automate the management and monitoring of their testing programs and improve the communication of valuable health clearance information, thereby ensuring the adoption of and compliance with Centers for Disease Control and Prevention and local COVID-19 regulations.
Commenting on the award with the County, Dr. James A. Hayward, president and CEO, Applied DNA, said, “40% of individuals who develop COVID-19 are asymptomatic, and as an essential workforce, County employees do not always have the luxury of working from home. Ongoing, consistent, and proactive pooled surveillance testing can help identify infected populations sooner and help protect co-workers, family members, and communities. As Suffolk County residents ourselves, we are honored to have the opportunity to contribute to the well-being of our neighbors.”
Weekly pooled surveillance testing is being conducted using anterior nasal swab collection systems pooled in groups of up to five individuals per test. Individuals in positive pools identified by the Program are referred for follow-on diagnostic testing under a referral testing agreement between ADCL and a certified laboratory. Per the current Centers for Disease Control guidelines, the result of all samples testing under the Program will be reported only in the aggregate and only to the County. Samples referred for follow-on diagnostic testing will be reported by the certified laboratory as per applicable laws and regulations.
About safeCircle™ ADCL’s pooled surveillance testing program, known as safeCircle™, utilizes frequent, high-sensitivity pooled testing to help prevent virus spread by quickly identifying infections within a community, school, or workplace. safeCircle provides 24-hour results using real-time PCR (RT-PCR) testing.
Click through to learn more about how safeCircle can help your community, school, and workplace: safeCircle
About the LineaTM COVID-19 Assay Kit The Linea™ COVID-19 Assay Kit is authorized by FDA EUA for the qualitative detection of nucleic acid from SARS-CoV-2 in respiratory specimens, including anterior nasal swabs, self-collected at a healthcare location or collected by a healthcare worker, and nasopharyngeal and oropharyngeal swabs, mid-turbinate nasal swabs, nasopharyngeal washes/aspirates or nasal aspirates, and bronchoalveolar lavage (BAL) specimens collected by a healthcare worker from individuals who are suspected of COVID-19 by their healthcare provider. The scope of the Linea™ COVID-19 Assay Kit EUA, as amended, is expressly limited to use consistent with the Instructions for Use by authorized laboratories, certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) to perform high complexity tests. The EUA will be effective until the declaration that circumstances exist justifying the authorization of the emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 is terminated or until the EUA’s prior termination or revocation. The diagnostic kit has not been FDA cleared or approved, and the EUA’s limited authorization is only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens.
The Company is offering surveillance testing in compliance with current CDC, FDA, and CMS guidances. The use of saliva and pooled sampling for surveillance testing, which has been internally validated by the Company in compliance with current surveillance testing guidances, is not included in the Company’s EUA authorization for the Linea™ COVID-19 Assay Kit.
About Applied DNA Sciences Applied DNA is a provider of molecular technologies that enable supply chain security, anti-counterfeiting and anti-theft technology, product genotyping, and pre-clinical nucleic acid-based therapeutic drug candidates.
The Company’s common stock is listed on NASDAQ under ticker symbol ‘APDN’, and its publicly traded warrants are listed on OTC under ticker symbol ‘APPDW’.
Applied DNA is a member of the Russell Microcap® Index.
Forward-Looking Statements The statements made by Applied DNA in this press release may be “forward-looking” in nature within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe Applied DNA’s future plans, projections, strategies and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of Applied DNA. Actual results could differ materially from those projected due to, its history of net losses, limited financial resources, limited market acceptance, the uncertainties inherent in research and development, future clinical data and analysis, including whether any of Applied DNA’s or its partner’s diagnostic candidates will advance further in the preclinical research or clinical trial process, including receiving clearance from the U.S. Food and Drug Administration or equivalent foreign regulatory agencies to conduct clinical trials and whether and when, if at all, they will receive final approval from the U.S. FDA or equivalent foreign regulatory agencies, the unknown outcome of any applications or requests to U.S. FDA, equivalent foreign regulatory agencies and/or the New York State Department of Health, the unknown limited duration of any Emergency Use Authorization (EUA) approval from U.S. FDA, changes in guidances promulgated by the CDC, FDA and/or CMS relating to COVID-19 surveillance testing, disruptions in the supply of raw materials and supplies, and various other factors detailed from time to time in Applied DNA’s SEC reports and filings, including our Annual Report on Form 10-K filed on December 12, 2019 and our subsequent quarterly reports on Form 10-Q filed on February 6, 2020, May 14, 2020 and August 6, 2020, and other reports we file with the SEC, which are available at www.sec.gov. Applied DNA undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless otherwise required by law.
Investor contact: Sanjay M. Hurry, Applied DNA Sciences, 917-733-5573, sanjay.hurry@adnas.com Program contact: Mike Munzer, Applied DNA Sciences, 631-240-8814, mike.munzer@adnas.com
Leading excipient and film coating manufacturer Colorcon has developed a solution to help in the fight against fake drugs through the inclusion of taggants embedded onto individual pills … and the use of smart readers to track and verify branded/authentic products
By Kevin Robinson
The issue of counterfeit drugs is moving higher up the pharmaceutical agenda owing to COVID-19; the ongoing pandemic is massively increasing the rate of online drug sales through illegal websites.In the UK, for example, the problem will only get worse when we leave the EU and the Falsified Medicines Directive ceases to apply. Manufacturing Chemist’s Dr Kevin Robinson caught up with Colorcon’s Chief Scientific Officer, Dr Ali Rajabi-Siahboomi, and Global Product Authentication Lead, Gary Pond, to discuss the latest developments.
KSR: Wasn’t the serialisation and widespread implementation of track and trace legislation, which is now in place around the globe, intended to combat the problem of counterfeit drugs?
ARS: Manufacturing companies have put huge resources into meeting the legal requirements for serialisation and have seen benefits in terms of track and trace, but the supply of counterfeit drugs continues to rise.
KSR: In the case of DNA, how stable is it, for how long and in what conditions?
ARS: DNA molecules are proteins and their sensitivity to environmental conditions is well understood. There’s a large amount of data that demonstrates the stability of DNA for very long periods, and DNA technology has been used for many years in courts of law for legal cases.
We’ve tested coated tablets to demonstrate that the detectability and integrity of the DNA remain consistent throughout the shelf-life of the product and we have supporting data to confirm that standard manufacturing procedures don’t damage the DNA.
Also, we have developed know-how around the application process and cleaning procedures to ensure that no residues of DNA taggants are left, which could contaminate the next product in manufacturing lines. The same goes for the silica taggants, which are equally stable throughout a typical manufacturing process.
ADCL Signs Agreements with Schools and Colleges with a Potential Weekly Testing Population of >5,000 Individuals, Some Agreements Contingent on Funding; Sales Pipeline Exceeds 20 Schools
STONY BROOK, N.Y. December 11, 2020 – Applied DNA Sciences, Inc. (NASDAQ: APDN) (“Applied DNA” or the “Company”), a leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing, announced that its Applied DNA Clinical Laboratories, LLC (ADCL) subsidiary is experiencing growing demand for its safeCircle™ pooled COVID-19 surveillance testing program that is being primarily driven by New York State (the “State”) schools moving to comply with the State’s Winter COVID-19 Plan (the “Plan”) that allows for pooled COVID-19 testing of their student, faculty, and staff populations based on infection rate thresholds. The Company has secured new agreements with schools and colleges that represent a potential weekly testing population of >5,000 individuals, from which a varying percentage are tested each week. Several contracts are contingent on the schools’ ability to secure funding. The Plan is also contributing to a substantial expansion in safeCircle’s sales pipeline that currently exceeds 20 schools.
The Plan targets micro-clusters to keep school infection rates under control and under their respective communities’ infection rates by requiring schools in Orange and Red micro-cluster zones to conduct weekly testing. Schools in Orange zones will be required to test 20% of in-person students, faculty, and staff over the course of a month, and schools in Red Zones will be required to test 30% of in-person students, faculty, and staff over a month1. Schools can make use of rapid tests offered by the State, though such tests either recommend that negative results be confirmed with a PCR-based test or are low throughput, thereby increasing the amount of time needed to make informed decisions to prevent outbreaks from occurring and adding further complexity to the testing process.safeCircle is a proprietary COVID-19 pooled surveillance testing program that utilizes the Company’s PCR-based, Linea™ COVID-19 Assay Kit in conjunction with an automated, high-throughput testing workflow and equipment, software, and services to return de-identified aggregate pooled surveillance test results within 24 hours.Dr. James A. Hayward, president and CEO, Applied DNA, said, “What we hear from schools and school districts is that they know they need to test educators and students for COVID-19, but they do not know how to access testing. Our safeCircle program is a highly customizable solution that can be easily administered to deliver ongoing, consistent, and highly accurate surveillance testing proactively to protect schools and classrooms. With safeCircle, educators can identify infections early and in a cost-efficient and expedient manner. With safeCircle, educators and students can return to the business of education.”
For Educators: The safeCircle program for schools, pre-K through high school, is designed to minimize COVID-19 clusters in the classroom. It utilizes the Company’s high-sensitivity assay in periodic pooled testing of students, faculty, and staff using saliva or non-invasive anterior (lower) nasal swabs and can detect as little as two copies of the SARS-CoV-2 virus in the pool. Participation does not require a prescription, and aggregate results are typically returned to a school within 24 hours.With the assay’s sensitivity, the platform is capable of detecting the virus in infected individuals, potentially before they become infectious. The program uses testing in pools of 5 individuals to avoid the potential for the dilution of an early positive sample. This compares to the pooling of up to 25 individuals by other surveillance testing providers at the cost of accuracy that could result in virus spread.
Educator Testimonials
John Cissel, Head of School at Harbor Country Day School in St. James, NY, stated: “The safeCircle team of nurses, technicians, and scientists have made our students, their parents, and our faculty and staff very comfortable with their testing program, and our weekly surveillance testing of everyone in the building has given all of us a sense of security. Their informative approach has increased our awareness and helped us to keep the COVID virus at bay as we have had only one positive case to date.”
Robert Stark, Headmaster of the Laurel Hill School in East Setauket, NY, stated, “The safeCircle program recently identified a very early infection in our population, so early in fact, that we were able to take the appropriate steps to prevent any spread. Surveillance testing works, and our students, their families and our faculty and staff are safer because of it.”
Joshua Crane, Head of School at the Stony Brook School, NY, summarized: “We contacted Applied DNA after learning of a small cluster of students who tested positive. The safeCircle team was on campus by that afternoon, sampled our entire residential population of students and faculty into the evening, and had aggregate results to us by morning. In an era where speed and accuracy are paramount, Applied DNA delivered both, enabling us to continue school safely. I can’t say enough about their customer service and ability to make a potentially stressful process stress free.”
safeCircle – A Customized Approach ADCL designs customized proactive surveillance programs for schools and other organizations based on their risk tolerance and budget, ranging from testing every individual once weekly to every day or other audit plan appropriate to the client’s population profile. This allows administrators to respond to risk elevations wherein a subset of the population can be serially tested at a higher frequency. Surveillance testing is done anonymously with administrators at the school or other organization tracking the identity of the encoded samples. No protected health information is transferred, no prescription is required, and aggregate de-identified results are reported only to the school or other organization. In the event of a positive pool, safeCircle scientists analyze the individual samples to confirm the presence of COVID-19 RNA. Infected member(s) of the pool are then directed by their program coordinator for the next steps, which may include consultation with their healthcare provider referral to a local certified reference laboratory partner for diagnostic confirmatory testing with an authorized RT-PCR test.
About safeCircle™ADCL’s pooled surveillance testing program, known as safeCircle™, utilizes frequent, high-sensitivity pooled testing to help prevent virus spread by quickly identifying infections within a community, school, or workplace. safeCircle provides 24-hour results using real-time PCR (RT-PCR) testing.
Click through to learn more about how safeCircle can help your community, school, and workplace: safeCircle
About the LineaTM COVID-19 Assay Kit The Linea™ COVID-19 Assay Kit is authorized by FDA EUA for the qualitative detection of nucleic acid from SARS-CoV-2 in respiratory specimens, including anterior nasal swabs, self-collected at a healthcare location or collected by a healthcare worker, and nasopharyngeal and oropharyngeal swabs, mid-turbinate nasal swabs, nasopharyngeal washes/aspirates or nasal aspirates, and bronchoalveolar lavage (BAL) specimens collected by a healthcare worker from individuals who are suspected of COVID-19 by their healthcare provider. The scope of the Linea™ COVID-19 Assay Kit EUA, as amended, is expressly limited to use consistent with the Instructions for Use by authorized laboratories, certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) to perform high complexity tests. The EUA will be effective until the declaration that circumstances exist justifying the authorization of the emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 is terminated or until the EUA’s prior termination or revocation. The diagnostic kit has not been FDA cleared or approved, and the EUA’s limited authorization is only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens.
The Company is offering surveillance testing in compliance with current CDC, FDA, and CMS guidances. The use of saliva and pooled sampling for surveillance testing, which has been internally validated by the Company in compliance with current surveillance testing guidances, is not included in the Company’s EUA authorization for the Linea™ COVID-19 Assay Kit.
About Applied DNA Sciences Applied DNA is a provider of molecular technologies that enable supply chain security, anti-counterfeiting and anti-theft technology, product genotyping, and pre-clinical nucleic acid-based therapeutic drug candidates.
The Company’s common stock is listed on NASDAQ under ticker symbol ‘APDN’, and its publicly traded warrants are listed on OTC under ticker symbol ‘APPDW’.
Applied DNA is a member of the Russell Microcap® Index.
Forward-Looking Statements The statements made by Applied DNA in this press release may be “forward-looking” in nature within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe Applied DNA’s future plans, projections, strategies and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of Applied DNA. Actual results could differ materially from those projected due to, its history of net losses, limited financial resources, limited market acceptance, the uncertainties inherent in research and development, future clinical data and analysis, including whether any of Applied DNA’s or its partner’s diagnostic candidates will advance further in the preclinical research or clinical trial process, including receiving clearance from the U.S. Food and Drug Administration or equivalent foreign regulatory agencies to conduct clinical trials and whether and when, if at all, they will receive final approval from the U.S. FDA or equivalent foreign regulatory agencies, the unknown outcome of any applications or requests to U.S. FDA, equivalent foreign regulatory agencies and/or the New York State Department of Health, the unknown limited duration of any Emergency Use Authorization (EUA) approval from U.S. FDA, changes in guidances promulgated by the CDC, FDA and/or CMS relating to COVID-19 surveillance testing, disruptions in the supply of raw materials and supplies, and various other factors detailed from time to time in Applied DNA’s SEC reports and filings, including our Annual Report on Form 10-K filed on December 12, 2019 and our subsequent quarterly reports on Form 10-Q filed on February 6, 2020, May 14, 2020 and August 6, 2020, and other reports we file with the SEC, which are available at www.sec.gov. Applied DNA undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless otherwise required by law.
Investor contact: Sanjay M. Hurry, Applied DNA Sciences, 917-733-5573, sanjay.hurry@adnas.com Program contact: Mike Munzer, Applied DNA Sciences, 631-240-8814, mike.munzer@adnas.com
With the World Health Organisation reporting that over half of all drugs purchased from online pharmacies are suspected counterfeit, and the number of illegal online pharmacies increasing dramatically since the start of the COVID-19 pandemic, there is a growing recognition that serialisation alone will not solve the problem of falsified medicines.
The Royal Pharmaceutical Society is also warning that the UK could see “an influx of counterfeit medicines” after the Falsified Medicines Directive ceases to apply at the end of the Brexit transition period on January 1, 2021.
In addition to the use of security tags on packaging, there is now a move towards ‘on dose authentication’, which is achieved by incorporating microtags into the core ingredients or coatings of pharmaceutical and nutraceutical products. These covert microtags can be detected using either field or lab-based equipment to mitigate counterfeiting and product diversion, assist quality control, returns monitoring and product recall. A further innovation is leading to the introduction of associated phone apps, enabling simplified field-based authentication by patients and caregivers.
Through on-dose authentication, microtags that are customised with unique information for product verification and traceability are embedded into each pill. For example, theTruTag platform uses microscopic silica particles, each of which bears a unique spectral signature, while Applied DNA Sciences uses unique molecular tags that can be detected at parts per billion or trillion. These covert taggants can be incorporated directly into the tablet coatings or inks used on tablets, capsules, vials and even the excipients used in the dosage form. Crucially this requires no additional manufacturing equipment or processes. The materials have ‘generally recognised as safe’ (GRAS) status and are resilient for the entire product lifetime, providing an individual ‘barcode’ that cannot be broken.
