Stirling is set to announce changes in the board, along with a progress update with funding and positioning for a planned UK AIM dual listing.

The company will also update the market on the appointment of a chief executive officer, and the HDA drug delivery license.

Stirling is set to announce changes in the board, along with a progress update with funding and positioning for a planned UK AIM dual listing.

The company will also update the market on the appointment of a chief executive officer, and the HDA drug delivery license.

The award will be presented at the Pharmacy Expo 2011, which is conducted jointly by The Pharmacy Guild of Australia and the Pharmaceutical Society of Australia.

What is so important about the award is the exposure the product will gain, with over 100 exhibitors and 3,000 pharmacy industry attendees at the Expo in Sydney.

KidneyVital™ will be launched at the Expo by the company's specialist marketing group Stirling Health.

Importantly the product has gained support from Kidney Health Australia, with the chief executive officer, Anne Wilson, saying, "Kidney Health Australia is delighted to deliver KidneyVital to the Australian pharmacy marketplace
in conjunction with our partners Stirling Products.

"This is a major initiative specifically designed for Australia’s 1.7 million people with chronic kidney disease.”

Stirling said based on available clinical studies, KidneyVital™ is the first multivitamin product tailored specifically to meet the nutritional needs of people with Chronic Kidney Disease and for those following transplantation.

Chronic Kidney Disease is a significant and growing public health problem that will cost the Australian taxpayer over an estimated $12 billion for the period 2009 to 2020, with the incidence of kidney disease increasing significantly.

This supports increased demand for KidneyVital™.

The HDA would be used for the pulmonary delivery of a proprietary form of deltaran, which has been approved in Russia to treat brain damage, dementia and Alzheimer's disease.

The agreement is subject to due diligence for exclusivity for the Russian Federation and all former Soviet Union States, and following the establishment in this region, the exclusivity will be extended to incorporate all global rights.

The Licensee will be responsible for regulatory approvals for both the use of deltaran for pulmonary delivery and for the HDA delivery service.

The Licensee’s lead scientist and CEO, Dr Boris Voitenkov commented, “It is our intention to have approvals for the use of the HDA device for deltaran delivery in Russia within 12 months as the drug is already approved here and we can aim at achieving annual sales of around $100 million."

Stirling will update the market on:

1. Company strategic review advice;
2. TeleMedCare and Stirling Pharma progress and developments;
3. First exclusive HDA platform licensing for the pulmonary delivery of a major drug; and
4. Proposed UK AIM listing and funding.

The trading halt will last to the earlier of the announcement(s), or trading on Wednesday 15 June.

Exclusive TeleMedCare rights for India will be granted to a special purpose company to be incorporated and publicly listed in India.

An Extraordinary Shareholders Meeting will be held before 30 June 2011, to gain approval from the Company’s Shareholders to consider the resolutions that will be required for the LOI.

If approved, existing shareholders of TeleMedCare are to receive a 40% interest in this company on establishment which is to be non dilutive for the first AUD$3 million raised. 

The LOI also is conditional upon Stirling entering into binding agreements in India by participating Indian subscribers and the exclusive licensing agreement between TeleMedCare and the Indian Licensee.

The company must also deliver 174 TeleMedCare vital signs monitoring devices to the Indian Licensee along with all necessary support and training at no added charge, the entire package is valued at A$870,000.

The parties to the LOI must also obtain all required or necessary approval and consents for the transactions, including to the consent and approval of all governmental, local and other authorities in India for the use of the TeleMedCare Clinical System in the country.

The closing of the transaction can be no later than 30 days following the approval by Stirling shareholders of the resolutions that will be required to be passed in order for the contemplated transaction to proceed.

The company has also advised that a number of the Indian investors to the TeleMedCare special purpose Indian company are also planning to invest directly into Stirling Products to gain a direct exposure to the global TeleMedCare and High Density Aerosol (HDA) pulmonary drug delivery growth.

The agreement has been conditionally approved for a subscription for the issue of a total 880 million shares in Stirling Products at an average of $0.0056 per share in to raise AUD$5 million.

Providing impetus for Stirling Product's initiatives in India, an emerging market report on the Indian healthcare industry by PriceWaterhouseCoopers, defined healthcare as one of the country’s largest sectors with a projection to grow to nearly $40 billion by 2012.

The pharmaceutical industry in India has a current valuation of US$20 billion with the expectation to double to US$40billion by 2015, with projected exports of US$8.2 billion.

Jeremy Cocks, Stirling’s new incoming chief executive offer, has previously held positions as a Director of Pfizer (NYSE: PFE) a US$163 billion valued company where he headed new products marketing and business development. He was recently Head of Marketing and Technical Services at Novartis (NYSE: NVS), valued at US$157 billion.

Cocks has expertise in the pharmaceutical animal health sector and has proven sales, marketing and management experience in Australia, the US and the UK.

The appointment will be formalised by 6 June 2011 and remains subject to a probationary term of three months and Board approval.

The company has also appointed John Botten to act as an advisor and consultant to Stirling.

Botten will advise and assist the company in the global commercialisation of its TeleMedCare e – Health vital signs monitoring business.

He has multi-national experience including 31 years at IBM (NYSE: IBM) and acted as Director at the computer hardware giant for 12 year including four years at IBM's European Headquarters in France as the Product Director resposible for the marketing of IBM's large systems across EMEA.

Botten also spent six years on the Board of the UK Forensic Science Service and is currently chairman of The Learning Machine, an open source education technology company.

Stirling has entered advanced stages of discussion with a UK broker and institutions regarding the potential dual listing of the company on the London Stock Exchange Alternative Investment Market, and subject to this, Botten has offered his services as a UK independent director.

Peter Boonen, managing director, said “Stirling is indeed fortunate to have the opportunity of securing the services of a new CEO who has proven management skills within the industry and can lead the company in the next phase of business development.”

The commencement of manufacturing operations in Nova Scotia is a defining milestone for Stirling.  It opens the door for additional contract manufacturing agreements to be won by Stirling and burgeoning cash flows to build.  Today's announcement has the potential to change the fortunes for Stirling.

The freehold plant in Nova Scotia was acquired by Stirling at a discount to replacement value in 2010 and is over 4,300 square metres on 20,000 square metres of land and is a near new state-of the art pharmaceutical plant.

In addition, Stirling is repositioning its 65% controlled TeleMedCare business following expressions of participation interest from the US,  Canada, Russia, EU and UK with further strong interest also from India and China.

The TeleMedCare business unit will require further significant investment to harness its potential. A number of expressed interests from global parties are negotiating exclusive license and operational rights to major global regions.

Stirling intends to spin out the majority of its TeleMedCare interests, to a number of operational entities that would be independently funded and in some cases also possibly separately listed within their respective licensed territories.

The first of these spin outs, which will beon a pro-rata basis to all Stirling shareholders, is expected to be finalised during the current quarter.

The company's recent share placement closed successfully with a total of $3,143,218 subscribed. Shares have been issued totalling  $1,790,818 in subscriptions.

A further $458,400 has been issued as 18 month convertible notes bearing interest at 8% per annum with these Notes being, subject to shareholder approval able to be converted to shares at $0.004.

The company requires a shareholders meeting to issue additional shares required to satisfy the final placement balance of $894,000.

Stirling has also announce today that it will offer a share purchase plan providing the opportunity for shareholders to subscribe for a minimum of $2,000 up to a maximum of $15,000 worth of new shares without occuring any brokeridge fees.

As part of a strategic review Stirling has commenced an in depth review of all assets, capital requirements and business operations and focus. The company is seeking to secure its  operational activities through cash flow generation.

Stirling stated, '... pending an announcement by the Company in relation to the acquisition of a rapidly growing pathology business with current revenues of approximately $7,500,000.'

Boots is the UK’s leading pharmacy with 2,500 outlets throughout the UK and a member of Alliance Boots, an international pharmacy, health and beauty group.

Although the company did not disclose the detail of the pharmacy chain at the time of the information release to the market, the UK publication Chemist and Druggist in its current edition has published that it had confirmation that it was Boots taking part in the trial.

The four year framework agreement grants TeleMedCare approval to bypass the traditional tender and lengthy procurement process that is generally associated with product sales to government departments, NHS Trusts and other public bodies.

Stirling Products managing director, Peter Boonen said it was a great endorsement of the TeleMedCare range of products and services to be approved by the UK Department of Commerce lead procurement agency as a Framework Agreement partner.

The award follows the prior establishment of product capability and performance.

He said, "It is also heartening to see the UK government recognising the efficiencies and savings that e-health solutions can provide to the community and further, being one of the world’s first major active implementers of proven e-health solutions."

"Ultimately, these early initiatives and the removal of the red tape process for procurement of proven product will see the direct benefit flow through to, not only the chronically ill and aged, but also directly to the taxpayer in due course.”

The pilot phase, to be concluded within two months is designed to assess the effectiveness and benefits of the multi-awarded TeleMedCare units from a client, clinical & commercial perspective.

If successful, Stirling expects TeleMedCare would be incorporated in a major UK national roll-out of specialist health clinics within many of the UK pharmacies. There are over 4,000 pharmacies in the UK and internationally in the chain.

Six TeleMedCare fully interactive monitoring and diagnostic units have been purchased for the pilot program, which has a further two months to run.

On successful deemed completion of the pilot program, a formal roll-out agreement would be expected to be executed between the parties.

Funds raised will be used for working capital and to support the initial funding of the Company’s recently acquired TeleMedCare business.

The previous Mezzanine facility agreement has been terminated by mutual consent. A new agreement has been entered into on the same key terms but providing for an increase in the facility from $1.2 million to $2.1 million and for the convertibility of any shares to be subject to and conditional upon prior shareholder approval.

Details of the replacement funding facility are:

- A $2.1 million private funding facility over an 18 month period has been secured with interest payable at 1% per month, only on funds drawn down
- An establishment fee of $20,000 is payable together with legal fees
- Subject to and conditional upon having received shareholder approval any or all of the drawn facility may be convertible to shares at an average $0.01 per share ($0.008 for the first $700,000 conversion, $0.01 for the next $700,000 and the balance at $0.012) at the lender’s option at anytime
before 31 December, 2011
- The Company shall seek shareholder approval for the above provision for conversion to shares at a shareholder meeting before 31 December 2010
- The facility may have a charge over the Company’s O’Connell Street properties until the sale of the properties (If so charged, the funding facility will continue following any sale).

The Company also has commitment to a further $1.8 million in loan funds to be provided by a number of sophisticated investors, that subject to shareholder approval will be subject to conversion to shares at the same conversion basis as the Mezzanine funding.

Subject to shareholder approval, to be sought within 90 days, these loan funds may be converted at anytime prior to December 31, 2011 at an average $0.01 per share ($0.008 for the first $600,000 conversion, $0.01 for the next $600,000 and $0.012 for the balance $600,000) at the lender’s option. No interest is payable and placement fees of 5% will be payable following shareholder approval.

The Company’s properties in Sydney CBD are expected to be sold at auction realizing further funds. The funds advanced and the funds expected to be realized through the Company’s property sale will be used as working capital and to support the initial funding of the Company’s recently acquired TeleMedCare business.

The Company further advises that it is in advanced negotiation with institutional interests to secure further substantive funding and will advise the market accordingly in due course.

Stirling recently acquired a 65% controlling interest in TeleMedCare Holdings Pty Limited, a leading brand in remote patient monitoring equipment and services.

TeleMedCare is currently operational in Australia and the UK and intends to expand operations in other countries. Distribution Agreements are in process of being finalised with interests in the UK and NZ.

TeleMedCare has tendered for significant government contracts and trials and the TeleMedCare products are also being trialled by a number of potential user bases.

Stirling Products is continuing to assesses the current sales opportunities as the integration of TeleMedCare operations into the company progresses and operations resume their expected global scale-up.

The Patent is for use of the Company’s R-Salbutamol as a method of decreasing fat deposits and is valid until 12 November 2024.

Salbutamol has been safely used in humans in the treatment of respiratory disease for over 30 years, and in its purified form, R-Salbutamol, for over 15 years. Its application to obesity does not require any drug discovery work but rather the re-purposing of an existing approved drug, which is a common practice within the pharmaceutical industry.

The company had earlier advised that investigations of R-Salbutamol in its application as an obesity drug have been favourable.

Peter Boonen, managing director of Stirling Products said the proof of concept conducted by the company in beagle dogs had achieved weight loss results of two per cent per week, "which is a good indicator of the potential in humans."

Stirling will seek a major industry partner for further development of the obesity drug candidate at an appropriate time.

The company has advised that its pharmaceutical plant re-validation of all plant, equipment and processes is ahead of schedule and application for inspection will be forwarded to Health Canada this week.

Following receipt of application, Health Canada then has 90 days within which to arrange an inspection following which the plant licensing is expected to issue and production can then commence.

The Company is hopeful that this inspection will be at the earlier end of the 90 period and will keep the market advised as soon as inspection is arranged.

The current fit-out and configuration of the plant provides for an annual capacity to manufacture and package over 550 million tablets, 5 million bottles and blend up to 1.5 million kg of product.

New findings that emerged from these studies now indicate that:

- ImmunoXel did not show any sign of toxicity in the in vitro studies on the peripheral blood mononuclear cells from Rh-macaques in advanced stage of SIV-disease. This finding further supports all the previous clinical data demonstrating the safety of ImmunoXel in patients with HIV and TB.

- ImmunoXel increases the production of cytokine IL2 and proliferation marker K167 in response to exposure to a viral antigen (SIVenv peptides) in vitro in T-cells from chronically SIV-infected monkeys. This could be one of the mechanisms supporting the restoration of depleted CD4 cell counts in patients
with HIV/AIDS.

- ImmunoXel amplifies the in vitro vaccine-specific T-cell proliferation response in a monkey model of HIV vaccination.

Preliminary results from this study indicate the specific profile of ImmunoXel’s immunomodulation that results in its clinical efficacy. First, ImmunoXel restores the ability of T-cells in chronic disease to proliferate, as demonstrated in a chronic HIV model in macaque monkeys. Second, ImmunoXel amplifies antigen-specific immune response in a HIV vaccine model in rhesus monkeys.

Stirling Products managing director, Peter Boonen said: “We are very pleased with the results of these studies which were initiated independently to the Company through one of the world’s leading research institutes in the USA."

"The continuing studies are designed to better understand the ImmunoXel structural, molecular and cellular mechanics. The preliminary study results provided to us strongly support the use of ImmunoXel in the treatment of HIV, and possibly as an adjuvant to certain HIV vaccines under development. This is a particularly important finding as the successful treatment of HIV still currently represents a major unmet challenge with over 35 million people globally living with the condition, he said."

"The situation with TB is equally as urgent and to our knowledge there is no other product development in
either the treatment of HIV or TB that has demonstrated the profile of efficacy that ImmunoXel demonstrates comparative to current treatment regimes.”

With a number of blockbuster products coming off patent during an end of product cycle period, Stirling is looking to leverage opportunities to commercialise its device as a superior drug delivery platform for selected drugs.

In a series of meetings around the world, Stirling is now introducing its commercialisation approach to the market and to a potential major Big Pharma partnership.

Stirling has revealed the Stirling device provides benefits not matched in the market:

- Drug transport velocity - matched to natural breathing cycle
- Less deposition on drug delivery pathways
- Aerosol concentration - ~3x other ultrasonic devices
- Delivered drugs have much better & faster absorption – bioavailability due to improved particle size distribution
- Proven to require substantively LESS active drug (10-15% of oral) for the same benefit – potentially less side-effects
- Active drug packaged in unique single-use disposable capsules – IP protection

Pulmonary delivery of drugs has been acknowledged as a more efficient way of drug and vaccine delivery, however development of an optimal pulmonary delivery device has to date eluded the industry despite many hundreds of millions having been spent on delivery device development.

Stirling’s device and patents address the shortcomings that industry has encountered and it believes it its device can provide for improved delivery of existing blockbusters – thereby enhancing the respective products and retaining "premium blockbuster value and status."

A study has forecast an $80-100bn decline in pharma revenue worldwide through to 2014, caused by patients switching to cheaper generic versions of current blockbuster drugs coming off patent. A switch to generics short-term will affect six of the world's ten best selling drugs facing patent loss in the US in the next 2-3 years.

Inhalation and intra-nasal drugs had sales exceeding US$20 billion in 2009, including: Seretide/Advair – GlaxoSmithKline US$7.8 billion (2009) - the patent expires in US Sept 2010 and Europe 2013 – revoked
in UK.

Stirling also has an “in-house” strategy to develop the device in parallel with the big pharma route. Whereby, Stirling would manufacture the device and obtains regulatory approvals. Stirling would source generic versions of off-patent blockbusters from its generics partner – CIPLA (India).  Stirling would manufacture ‘safer’ generic drugs in patented “key locked” capsules, locking in a greater share of revenues.

The event was attended by around 3,000 plus industry attendees of which some 65% are historically pharmacists.

Stirling formalised an agreement with Rose-Hip Vital to represent the product to pharmacies nationally in Australia.

Rose-Hip Vital is used as an adjunct for arthritis, rheumatism and osteoarthritis. It has been triaded in over 30 clinical studies, including double-blind placebo controlled trials. The product has a patented active compound, Galactolipid (GOPO®) which acts as a natural anti-inflammatory, helping to discourage the white blood cells from reaching the inflamed joint.

"Stirling Health" continued to introduce new products into its Australian pharmacy range at the Expo. Stirling Health director Neil Covey said the company reported a strong interest in the "Stirling Health" line at the Expo.

Harricks worked as marketing executive for the Nucleus Group, then Australia's leading international
medical technology group, Telectronics - pacemakers; Cochlear - bionic ear, Ausonics - ultrasound and Medtel - distribution.

Harricks has been involved at all levels of development and raised funds, guided the design of products, obtained regulatory approvals worldwide (FDA, CE Mark) and built widespread technology adoption and endorsement with leading medical institutions and opinion leaders in US and Europe.

Stirling Products' delivery devices are designed to provide for a dramatically improved safety profile of "blockbuster drugs" when many of these drugs move off patents to become generic products.

Drugs like the Pfizer drug Lipitor is moving off patent to generic next year.  Despite a decline, it had global sales of US$11.4 billion in 2009, providing a large opportunity for companies with a unique and differentiated drug delivery platform.

This creates an opportunity for Stirling Products to package the generic version with its drug delivery device to provide a new proprietary package that can be marketed at a significant premium to the other generic versions due to an expected improved safety profile in many cases.