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 52 years ago 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 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: “Hey, 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.”

Chronic obstructive pulmonary disease (COPD) is characterized by chronic bronchitis and emphysema, which lead to a progressive loss of air flow.  The causes of COPD include tobacco smoke, occupational dusts, chemicals, vapors and environmental pollutants.  COPD occurs in approximately 10% of the population over the age of 40. People with COPD usually experience depression.  There are no effective therapies for emphysema, nor are there efficient clinical management strategies for COPD.

In a pilot study of the treatment of idiopathic pulmonary fibrosis (IPF), oral IFN treatment resulted in significant improvement in chronic cough.  In double-blind, placebo-controlled studies in Ohio and Canada, chronic cough in horses with inflammatory airway disease (which is similar to human COPD) was relieved by oral IFN.  These observations in man and animals provide support for conducting a study of oral IFN to treat chronic cough in people with COPD.

Texas Tech University (TTU) is funding a follow-up Phase 2 study to test oral IFN against placebo in the treatment of chronic cough in COPD and IPF patients. This clinical research study is evaluating the ability of oral IFN to reduce the frequency and severity of chronic cough in up to 40 patients with COPD or IPF.

CytoPharm, Inc., our licensee for Taiwan and China, has launched a Phase 2, placebo-controlled, dose-ranging study of 165 hepatitis C virus-infected patients in Taiwan.  The study, which has been approved by both the US FDA and the Taiwanese Department of Health, is 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 will represent a major breakthrough in the management of hepatitis C. Treatment time is 6 months with 6 months of follow-up observation; preliminary results are expected by the end of 2010.

The University of Western Australia in Perth received a grant from the Department of Health, Government of Western Australia for a Phase 2 clinical study of oral IFN as prevention/treatment of respiratory illnesses, including influenza.  Two hundred (200) healthy volunteers in Perth Australia have been enrolled to take oral IFN or placebo lozenges once daily for 16 weeks.  Once per week, the study volunteers will submit a report detailing the severity of any cold/flu symptoms experienced, any medications taken, number of days of work missed, etc.  The aim of the study is to determine whether the volunteers who take oral IFN experience fewer respiratory illnesses and/or less severe symptoms during the winter cold/flu season in Australia (June-October). Final results of the study are expected in the 1^st quarter of 2010.

In the future, oral IFN could become a “blockbuster” drug as it has the potential to treat diseases such as chronic cough, influenza, and hepatitis C, which affect tens of millions of people around the world.

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, 2008.