About ProPhase Labs

ProPhase Labs, Inc. operates as a growth oriented and diversified company focused on diagnostic and genomic products and services, the development and commercialization of novel drugs, dietary supplements, and compounds, and contract manufacturing. The company offers a broad array of COVID-19 related clinical diagnostic and testing services including polymerase chain reaction (‘PCR’) testing for COVID-19 and Influenza A and B through the company’s wholly-owned subsidiary, ProPhase Diagnostics, Inc. (‘ProPhase Diagnostics’). The company also offers rapid antigen testing for COVID-19. The company offers whole genome sequencing and related services through the company’s wholly-owned subsidiary, Nebula Genomics, Inc. (‘Nebula Genomics’). The company’s wholly owned subsidiary, ProPhase BioPharma, Inc. (‘PBIO’) is focused on the licensing, development and commercialization of novel drugs, dietary supplements, and compounds. The company’s wholly-owned subsidiary, Pharmaloz Manufacturing, Inc. (‘PMI’), is a full-service contract manufacturer and private label developer of a broad range of non-GMO, organic and natural-based cough drops and lozenges and OTC drug and dietary supplement products. The company also develops and markets dietary supplements under the TK Supplements brand. ProPhase Diagnostics The company’s wholly-owned subsidiary, ProPhase Diagnostics, which was formed in October 2020, offers a broad array of COVID-19 related clinical diagnostic and testing services, including PCR testing for COVID-19 and Influenza A and B at its two Clinical Laboratory Improvement Amendments (‘CLIA’) certified laboratories, located in Old Bridge, New Jersey and Garden City, New York. The company also offers rapid antigen testing for COVID-19. The company is also in the process of validating for regulatory panel, viral panel, bacteria panel and monkey pox. Following receipt of the necessary validations, the company’s testing capabilities are expected to include: Chemistry and Immunoassay: general chemistry, diabetes, toxicology, therapeutic drug monitoring, auto-immune diseases, cardiac function, reproductive, endocrinology, STI and oncology. Hematology: complete blood county automated/manual, individual cell diferrential, retic analsyis and platelet assay. Hemostasis: coagulation function testing, including platelet count, bleeding time, partial thromboplastin time, prothrombin time and Factor Assays. Urinalysis: fully automated microscopic and complete urinalysis solution. Nebula Genomics Nebula Genomics focuses on genomics testing technologies, a comprehensive method for analyzing entire genomes, including the genes and chromosomes in DNA. The data obtained from genomic sequencing may help to identify inherited disorders and tendencies, help predict disease risk, help identify expected drug response, and characterize genetic mutations, including those that drive cancer progression. The company offers Nebula Genomics whole genome sequencing products direct-to-consumers online with plans to sell in food, drug and mass (FDM) retail stores and to provide testing for universities conducting genomic research. Nebula Genomics provides consumers access to affordable and secure whole genome sequencing. It also provides customers with access to over 300 personalized reports based on their genomic profile. These reports are created utilizing the latest scientific research and provide individual genetic commentary on a broad range of traits and characteristics. Customers can access their reports via Nebula Genomic’s secure online portal. As new scientific discoveries are made, customers receive new reports, as well as regular updates to their existing reports, through Nebula Genomic’s subscription model. In addition to the personalized reports, Nebula Genomics provides customers with access to a suite of exploration tools, including a gene browser and a gene analysis tool. These tools allow customers to browse their data, search for genetic variants, and analyze their genes. Nebula Genomic’s solution is powered by the innovations of George Church, Ph.D., Professor of Genetics at Harvard Medical School and Chairman of Nebula Genomic’s Scientific Advisory Board. Dr. Church has pioneered the development of multiple DNA sequencing methods, including molecular multiplexing approaches that enable next generation sequencing (NGS) as well as nanopore sequencing. Nebula’s whole genome sequencing DNA test decodes approximately 6.4 billion base pairs of the human genome, generating significant amounts of data, which exceeds the amount and quality of data widely offered by most competing services. Through the use of additional tools, the data that is generated can help identify rare genetic mutations and provide consumers other valuable insights into their genes and overall health and wellness. Nebula Genomics also provides consumers with weekly educational content to further their knowledge about the use of their genetic data. The company is also actively collaborating with G42 Healthcare, a leading Abu Dhabi-based artificial intelligence (AI) health-tech company, to explore several collaborative opportunities, including but not limited to, genomic sequencing, artificial intelligence, sharing of genomic data insights, and obtaining certain advanced certifications. ProPhase BioPharma The company formed PBIO in June 2022 for the licensing, development and commercialization of novel drugs, dietary supplements and compounds. Licensed compounds under development include Equivir (dietary supplement) and Equivir G (Rx), two broad-based anti-virals, and Linebacker LB-1 and LB-2, two small molecule PIM kinase inhibitors. The company also owns the exclusive rights to the BE-Smart Esophageal Pre-Cancer Diagnostic Screening test and related IP assets. Equivir (dietary supplement) and Equivir G (Rx) The company has exclusive worldwide rights to develop and commercialize Equivir (dietary supplement) and Equivir G (Rx) pursuant to a license agreement with Global BioLife, Inc. (‘Global BioLife’), a wholly-owned subsidiary of DSS, Inc. Equivir is a blend of polyphenols, which are substances found in many nuts, vegetables and berries. The composition, which contains polyphenols that are Generally Recognized as Safe (GRAS), is projected to come in capsule form and be taken much like a multivitamin. The composition is believed to work by helping to improve proper immune function. The company plans to pursue commercialization of Equivir as a dietary supplement, leveraging the company’s distribution in over 40,000 food, drug and mass (FDM) retail stores and online direct to consumers. In March 2023, the company commenced patient enrollment in a randomized, placebo-controlled clinical trial of Equivir to evaluate its effect on upper respiratory tract infections. Vedic Lifesciences, a leading clinical research organization, is contracted to conduct the combination prophylactic and therapeutic study, which will be conducted at 12 sites. The company anticipates trial completion in the third quarter of 2023 and anticipate launching Equivir (dietary supplement) in the United States toward the end of 2023. Equivir G is a blend of polyphenols similar to Equivir (dietary supplement) with the addition of Gallic acid. The company is in the process of formulating its composition and preparing clinical studies. The company is pursuing the development of Equivir G as a prescription based antiviral treatment based on data related to the polyphenol formulation in Equivir. Evidence suggests that the blend of polyphenols in Equivir has the potential to block the entry of a virus into host cells, thereby preventing infection and replication in those host cells. Through the company’s development of Equivir G, a similar polyphenol formulation can be developed for the treatment of infection caused by various serotypes of influenza and Rhinovirus, a common viral infectious agent predominantly associated with the common cold in humans. This formulation may also have the potential to block the entry of Ebola virus into host cells, which could prevent Ebola Virus Disease (EVD) and Ebola Hemorrhagic fever (EHF). These diseases are rare, but severe and often fatal in humans, particularly in sub-Saharan Africa. Ebola has a 90% death rate, according to the World Health Organization. Equivir has also shown in in-vitro studies to combat SARS-COV2. The company plans to apply for an Investigational New Drug Application (‘IND’) for Equivir G as a prescription-based antiviral treatment. Planned antiviral applications include SARS-COV2, Influenza and Ebola, among others. Linebacker (LB-1 and LB-2) The company has exclusive worldwide rights to develop and commercialize LB-1 and LB-2 for the treatment of cancer, inflammatory diseases or symptoms and memory-related syndromes, diseases or symptoms, including dementia and Alzheimer’s disease, pursuant to a license agreement with Global BioLife. LB-1 and LB-2 were initially developed by Global BioLife in partnership with Global Research and Development Group Sciences (‘GRDG’). GRDG and Global BioLife created Linebacker, a multi-faceted therapeutic platform targeting metabolic, neurologic, cancer, and infectious diseases, to mirror the Panacea Project, a U.S. Defense Advanced Research Projects Agency (DARPA) program that provides novel, multi-target therapeutics for unmet physiological needs. Linebacker is a modified polyphenol. Linebacker compounds are modified Myricetin, which is a common plant-derived flavonoid. Myricetin exhibits a wide range of activities that include strong antioxidant, anticancer, antidiabetic and anti-inflammatory activities. It displays activities that are related to the central nervous system. Anecdotal evidence suggests that it may be beneficial to protect against diseases such as Parkinson’s and Alzheimer’s. LB-1 is being developed as a potential co-therapy to down-regulate PIM (proviral integration site for moloney murine leukemia virus) kinase, which plays a key role as an oncogene in various cancers, including myeloma, leukemia, prostate and breast cancers. In preclinical laboratory studies, LB-1 inhibited PIM, which could potentially slow the growth of the cancer and allow for better efficacy of the co-therapy drug or treatment being used. Chemotherapy drugs alone, like TAXOL (paclitaxel) injection, kill healthy cells alongside tumorous ones. LB-1 is being developed to focus directly on the PIM expressions potentially rendering the cancer cell transcription and replication significantly less effective, so that chemotherapy drugs, such as paclitaxel can effectively kill the existing tumor cells. LB-1 may also be developed as a potential standalone post therapy to ensure cancer cells do not regenerate. The company’s initial focus for LB-1 is as a potential co-therapy for the following four drugs: Paclitaxel: a drug used to treat breast, ovarian, lung, bladder, prostate, melanoma, esophageal, as well as other types of solid tumor cancers. Doxorubicin: a drug used to treat used to treat various forms of cancer, including breast cancer, bladder cancer, Kaposi's sarcoma, lymphoma, and acute lymphocytic leukemia. Topotecan: a drug used to treat ovarian cancer. Cisplatin: a drug used to treat testicular, ovarian, bladder, head and neck, lung and cervical cancer. In vitro studies from the initial LB-1 cell line demonstrated the following findings: LB-1 Co-Therapy with Paclitaxel: LB-1 alone inhibited cell proliferation at 69.94% at 100uM, TAXOL alone inhibited cell proliferation at 41.96% at 200nM, and LB-1 and TAXOL combined inhibited cell proliferation at 75.5% (100uM of LB1 + 200nM Taxol). LB-1 Co-Therapy with Doxorubicin: LB-1 alone inhibited cell proliferation at 69.66% at 100uM, Doxorubicin alone inhibited cell proliferation at 51.6% at 2000nM, and LB-1 and Doxorubicin combined inhibited cell proliferation at 86.95% (100uM of LB1 + 2000nM Doxorubicin). LB-1 Co-Therapy with Topotecan: LB-1 alone inhibited cell proliferation at 69.54% at 100uM, Topotecan alone inhibited cell proliferation at 58.27% at 2000nM, and LB-1 and Topotecan combined inhibited cell proliferation at 97.18% (100uM of LB1 + 2000nM Topotecan). LB-1 Co-Therapy with Cisplatin: LB-1 alone inhibited cell proliferation at 72.33% at 100uM, Cisplatin alone inhibited cell proliferation at 22.74% at 30uM, and LB-1 and Cisplatin combined inhibited cell proliferation at 82.48% (100uM of LB1 + 30uM Cisplatin). Additional preclinical studies of the Linebacker portfolio with each of the four drugs described above is being conducted by a major U.S. university. In January 2023, REPROCELL completed an independent review of LB-1, which included testing of 25 cell lines with LB-1, and confirmed previous in vitro studies conducted by Charles River. These cell lines confirmed efficacy of LB-1 on ovarian, kidney, colon and lung adenocarcinoma/small cells. PBIO is also party to a two-year collaborative agreement with Dana-Farber Cancer Institute and Harvard Medical School to further the research LB-1. This collaboration provides for year 1 and year 2 research plans. The ongoing studies are focused on identifying the most effective combination of cancer cell lines and agents with LB-1. Initial focus areas include hepatic, colon and breast cancer, and initial therapy agents include Topotecan and Doxorubicin. Additionally, selection has been confirmed for animal studies. Dana-Farber/Harvard will deploy two animal xenograft models, with and without radiation. The intention for the completion of the animal studies is the end of second quarter of 2023, with data expected to be published in the third quarter of 2023. Initial Good Manufacturing Practices (‘GMP’) for LB-1 is expected to commence in the third quarter of 2023, in tandem with toxicology studies. The company anticipates initiating the preclinical requirements for an IND application submission for LB-1 in the fourth quarter of 2023. These requirements include: Study Protocol Design: select optimized co-therapy combo from animal study and complete the protocol design for IND submission; Toxicity Testing: toxicological studies on small animals according to study protocol; Dosing Studies: dosing studies on small animals according to study protocol; and Large Animal Studies: combined therapy studies on large animals according to study protocol. The company intends to submit its IND application for LB-1 in mid-2024. The company plans to operate its own Phase 1 safety study for LB-1 and will seek a strategic partner for future development following Phase 1. ProPhase BioPharma has formed an advisory board with Daryl Thompson as its founding member. Daryl Thompson is President and Director of Scientific Initiatives at GRDG and is a biochemist twice nominated for the Nobel Prize in 2015 and 2016 for his work in cutting-edge organic and carbohydrate chemistry. BE-Smart Esophageal Pre-Cancer Diagnostics Screening Test The company also owns the worldwide exclusive rights to the BE-Smart Esophageal Pre-Cancer diagnostics screening test and related intellectual property assets. The BE-Smart test is aimed at early detection of esophageal cancer. It remains under development but has already been tested by an independent test lab, mProbe, Inc. (‘mProbe’), on over 200 human samples and has shown greater than 99% sensitivity and specificity to detect protein expressions in cells that are at high risk of becoming cancerous. mProbe, Inc., a precision health and medicine company utilizing clinical proteomics in the oncology space in conjunction with Dr. Christopher Hartley of the prestigious Mayo Clinic, has been utilizing a small sample of tissue collected during endoscopies to help the company confirm and optimize the BE-Smart Test. The initial data appears to demonstrate accuracy and reproducibility, as well as identification of potential biomarkers for therapeutic drug discovery to treat esophageal cancer. In March 2023, the company announced a collaboration with mProbe and Dr. Christopher Hartley of Mayo Clinic for the continued development of its BE-Smart Esophageal Pre-Cancer diagnostic screening test. The company is pursuing initial commercialization of the BE-Smart test as an LDT (Laboratory Developed Test) and RUO (Research Use Only) for the third quarter of 2023 with full commercialization backed by insurance expected by mid-2024. According to the National Institute of Health, over 20 million endoscopies are performed every year in the United States; approximately 2 million of these procedures are done on patients with Barret’s Esophagus, which is a condition in which the flat pink lining of the swallowing tube that connects the mouth to the stomach (esophagus) becomes damaged by acid reflux, which causes the lining to thicken and become red. In patients with Barrett’s Esophagus, one in two hundred will develop esophageal adenocarcinoma. Esophageal cancer is highly lethal and deemed as the sixth cause of cancer death worldwide. The overall five-year survival rate is less than 20%. The BE-Smart test is being developed to provide health care providers and patients with data to help determine treatment options, including whether patients not believed to be at risk for esophageal cancer should continue to be monitored or, alternatively, to provide patients who might otherwise have been undiagnosed early treatment before esophageal cells become cancerous. The goal of widespread adoption of the BE-Smart test would allow health care providers to initiate potentially lifesaving early treatment processes, such as an ablation procedure to remove the precancerous cells. This diagnostic test, once fully validated, could also significantly reduce unnecessary endoscopies, as well as offer peace of mind to patients who are suffering with Barret’s syndrome who are at greater risk of esophageal cancer. Pharmaloz Contract Manufacturing The company’s wholly-owned subsidiary, PMI, is a full-service contract manufacturer and private label developer of a broad range of non-GMO, organic and natural-based cough drops and lozenges and OTC drug and dietary supplement products. PMI provides consumer product development, pre-commercialization services, production, warehousing and distribution services for its customers. The company’s manufacturing facility, which is located in Lebanon, Pennsylvania, is registered with the U.S. Food and Drug Administration (the ‘FDA’) and is certified organic and kosher. As part of the sale of the company’s former Cold-EEZE business in March 2017, PMI entered into a manufacturing agreement with Mylan Consumer Healthcare Inc. (formerly known as Meda Consumer Healthcare Inc.) (‘MCH’) and Mylan Inc. (together with MCH, ‘Mylan’) to supply various Cold-EEZE lozenge products to Mylan following the sale for a period of five years with annual renewal options. Pursuant to the terms of the manufacturing agreement, Mylan (or an affiliate or designee) purchased the inventory of the Company’s Cold-EEZE brand and product line, and PMI agreed to manufacture certain products for Mylan, as described in the manufacturing agreement, at prices that reflect current market conditions for such products and include an agreed upon mark-up on the company’s costs. On May 1, 2021, the manufacturing agreement was assigned by Mylan to Meda Consumer Healthcare, Inc. (‘Meda’) in connection with Meda’s acquisitions of certain assets from Mylan, including the Cold-EEZE brand and product line. In November 2022, Meda provided a notice to extend the original agreement for another year through March 2024. In February 2023, the company announced the acquisition of new equipment, which is expected to double the company’s current capacity for pouch packaging by the second quarter of 2023, to meet the growing demand for the company’s products and services. PMI is also planning for expansion of its lozenge manufacturing business. PMI had two new customers enter full production in 2022, resulting in the addition of over 3.5 million units, mostly in the fourth quarter of 2022. PMI formulated and launched seven new products for new and existing customers, totaling 1.75 million units in 2022. Additionally, PMI added three new customers, which are expected to enter full production in 2023, representing an estimated 1.0 million additional units. TK Supplements The company’s TK Supplements product line is dedicated to promoting better health, energy and sexual vitality. Each of the company’s herbal supplements is researched to determine the optimum blend of ingredients to ensure the company’s customers receive premium quality products. To achieve this, the company formulate with the highest quality ingredients derived from nature and ingredients enhanced by science. The company’s TK Supplements product line includes Legendz XL, a male sexual enhancement and Triple Edge XL, an energy and stamina booster. Legendz XL has distribution in Rite Aid, Walgreens and other retailers, and via ecommerce, and is now achieving broader distribution at CVS and Walmart. Triple Edge XL, is now gaining retailer acceptance as well. In 2022 the company restaged Triple Edge XL from a 56ct to a 20ct at CVS making the retail price more in line with competition. The result has been a double digit increase in consumer sales and a 40% expansion increase in the number of stores carrying the item. Based on performance Triple Edge XL is being reviewed for authorization in other major pharmacies. Fluctuations in the company’s Business The company’s diagnostic services revenues are subject to fluctuations in COVID-19 testing demand. The demand for COVID-19 tests has been, and ProPhase expects it to continue to be, highly volatile, primarily driven by the emergence and severity of new variants, which are unpredictable. The company’s personal genomics kit sales are impacted by seasonal holiday demand. The company expects to generate greater revenues from this business during the first quarter of the company’s fiscal year. While kits sales increase during the holiday season (fourth quarter), the company will generally recognize revenue when the customer sends in their kit to the company’s laboratory for processing and a genetic report is delivered, which the company expects will occur in the following fiscal quarter. The company’s contract manufacturing revenues are subject to seasonal fluctuations. As the majority of products that the company manufactures for the company’s customers are OTC healthcare and cold remedy products, the company’s revenues tend to be higher in the first, third and fourth quarters during the cold season. Generally, a cold season is defined as the period from September to March when the incidence of the common cold rises as a consequence of the change in weather and other factors. Revenues are generally at their lowest levels during the second quarter when contract manufacturing demand generally declines. Intellectual Property The company maintains various trademarks for its TK Supplements products including Legendz XL and Triple Edge XL. The company maintains a trademark for the company’s genomic testing, Nebula Genomics. Licensing Agreements Licensing Agreement with Global BioLife, Inc. for Equivir and Equivir G The company is party to a license agreement with Global BioLife, dated March 17, 2022, pursuant to which the company acquired from Global BioLife a worldwide exclusive right and license (the ‘Equivir License’) under certain patents identified in the license agreement and know-how (collectively, the ‘Equivir Licensed IP’) to exploit any product comprising or containing Equivir Licensed Compound (as defined in the license agreement) (‘Equivir Licensed Products’) for all uses (the ‘Equivir Field’). Under the terms of the license agreement, Global BioLife reserves the right, solely for itself to use the Equivir Licensed IP to research and develop, including modify, enhance, improve, Equivir Licensed Products in the Equivir Field. Licensing Agreement with BioLife, Inc. for Linebacker LB-1 and LB-2 The company is also party to a license agreement with Global BioLife, dated July 19, 2022, pursuant to which the company acquired from Global BioLife a worldwide exclusive right and license under certain patents identified in the License Agreement (the ‘Linebacker Licensed Patents’) and know-how (collectively, the ‘Linebacker Licensed IP’) to exploit any compound covered by the Linebacker Licensed Patents (the ‘Linebacker Licensed Compound’), including Linebacker LB-1 and LB-2, and any product comprising or containing a Linebacker Licensed Compound (‘Linebacker Licensed Products’) in the treatment of cancer, inflammatory diseases or symptoms, memory-related syndromes, diseases or symptoms including dementia and Alzheimer’s Disease (the ‘Linebacker Field’). Under the terms of the license agreement, Global BioLife reserves the right, solely for itself and for GRDG Sciences, LLC (‘GRDG’) to use the Linebacker Licensed Compound and Linebacker Licensed IP solely for research purposes inside the Linebacker Field and for any purpose outside the Linebacker Field. Government Regulation The company is subject to the Dietary Supplement and Nonprescription Drug Consumer Protection Act, which was passed in 2006 to amend the FFDCA with respect to serious adverse event reporting for dietary supplements and nonprescription drugs, among other things. Advertising of the company’s products in the United States is subject to regulation by the Federal Trade Commission (the ‘FTC’) under the Federal Trade Commission Act (the ‘FTC Act’). The company is in compliance in all material respects with each of the HIPAA Rules. The company is in compliance in all material respects with the requirements of the HIPAA Privacy Rule. The company’s policies and procedures are fully compliant with HIPAA as modified by the HITECH requirements. The company is in compliance with the HIPAA National Provider Identifier Rule in all material respects. The company has implemented processes to manage compliance with the CCPA and continue to assess the impact of the CPRA on the company’s business as additional information and guidance becomes available. Research and Development The company’s research and development costs were $0.7 million for the year ended December 31, 2022. Competition The company’s principal competition for the company’s lab diagnostic services are commercial laboratories, such as Quest Diagnostics Incorporated and Laboratory Corporation of America Holdings. History ProPhase Labs, Inc. was founded in Nevada in 1989. The company was incorporated in 1989. It changed the company’s state of incorporation from the state of Nevada to the state of Delaware.