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Big Opportunity in Treating Cold Sores and Zika Virus

Peter Kennedy Peter Kennedy, Stockhouse Featured Writer
0 Comments| August 23, 2017


It is often said that one man’s problem can be another’s huge investment opportunity.

That may soon be the case for shareholders in The Jenex Corp. (TSX: V.JEN, Forum), a developer of proprietary medical technology designed to treat Herpes-related cold sores and to inactivate ailments that stem from insect bites, including the Zika Virus.

In the months leading up to the 2016 Olympic Games in Brazil, the Zika Virus was thrust into the spotlight as media reports focused on the horrific birth defects that result from the virus once pregnant women became infected.

Pictures of infants with shrunken heads prompted many tourists and some athletes to cancel plans to attend the Olympics in Brazil.

While the World Health Organization lifted its Zika Emergency last year, the risk of infection has been described as the new normal in large parts of the Caribbean, and Central and South America that are home to the kind of mosquitos that can spread the virus.

Recognizing the huge need for a solution, Jenex is working to apply its patented thermal therapy technology in devices that uses heat and light energy to deliver relief from pain and itching.

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One of those devices, TherOZap, is currently being tested to determine its effectiveness in inactivating Zika, the West Nile virus and other nasty mosquito-borne diseases.

The Techna Institute at the University Health Network (a teaching partner of the University of Toronto) is conducting the tests on a prototype model that was completed in April, 2017. The prototype is a hand held unit, which when pressed against the area of the insect bite, utilizes high temperature thermal therapy (in this case infrared heat) in a bid to reduce pain and inflammation.

It is anticipated that if the tests prove successful, Jenex will finalize the features for the consumer product and seek regulatory approvals where required.

 “Zika Virus is definitely the big opportunity that we are going after,’’ said Jenex Chief Executive Officer Rob Fia during a recent interview with Stockhouse.

The company already has a licensing partnership for the device with the Florida-based, Luminar Media Group Inc. (OTCMKTS: LRGR, Forum), which has agreed to market and distribute TheroZap. Subject to the ongoing tests, manufacturing will likely be outsourced to a third party in south Asia.

An experienced financier, Fia has worked to raise money for companies in the medical device, mining and oil and gas sectors through Kingsdale Capital Finance in Toronto. He is co-head of corporate finance at Kingsdale.

During the interview, Fia said investors have a rare opportunity to get in involved in Jenex at a time when the company is back on track after running into difficulty during the global economic meltdown in 2008.

As the shares were trading at $0.065 on August 17, 2017 in a 52-week range $0.14 and $0.005, he said investors should consider taking a position ahead of TherOZap test results which are expected to be announced in September.

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“We have a fantastic suite of medical device ideas and technology that we are moving ahead with,’’ he said.

Jenex began life in May 2001 as a capital pool company set up to acquire Thermolabile Technologies Corp. Inc., a Burlington, Ont.,  medical device research company which had developed and patented a thermal therapeutic device for the prevention of Herpes Simplex Virus (HSV-1), an ailment commonly referred to as cold sores.

At the time, Thermo said the still unnamed thermal therapy device delivered the precise amount of localized heat required to neutralize the cold sore virus and prevent an outbreak, without the risk of burning the skin.  Given that the HSV-1 is endemic in North America (affecting 80% of the population at the time), Thermo said its thermal therapy product had the potential to dominate a large and untapped market.

The aim was to offer its device as an alternative to expensive anti-viral drugs and make it available over the counter without the need for a prescription.

When Fia initially became involved with Jenex in 2006, the company was working with two devices which had been developed from Thermal Therapy technology. The first was Therapik, a hand-held and battery powered device that delivered heat to a localized area of the body in order to relieve pain associated with stings from species that deliver thermolabile venom.

Up to 20,000 species of insects and sea creatures fit into that category.

Therapik was approved as a Class 2 medical device in Canada and the United States. It also received CE Certification in Europe, meaning that the product was in compliance with all relevant Product Directives and Regulations in that region.

However, the intellectual property for the Therapik has expired and the company no longer holds the patent or trademark.

The second device was the InterceptCS, a non-invasive instrument comprised of an ergonomically designed hand held unit and disposable treatment activator. Clinically proven and approved in Canada for the prevention of cold sores it was made available for sale in Shopper Drug Mart and Pharmaprix stores.

InterceptCS uses heat treatment to penetrate deep into the skin cells affected by the HSV-1 virus. The treatment causes a microbial heat shock response, where the targeted viral cells release heat shock proteins to cause them to essentially self-destruct.

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Jenex says InterceptCS remains the only product in Canada that has been granted permission to use a prevention claim in dealing with cold sores.

However, the global financial meltdown in 2008 made it challenging for the previous management group to finance the worldwide commercialization of Jenex products.

The company also failed to build on an arrangement with Shoppers Drug Mart, which agreed in 2004 to act as an exclusive partner for the launch of InterceptCS, and to distribute the product exclusively for a predetermined period of time in stores across Canada.

The shares were cease traded in December 2009 after the company failed to file financial statements with regulatory authorities in Canada and the United States.

Under Fia’s leadership (he was elected to the Board during late 2009 and became CEO in May 2016), Jenex has been able to get the cease trade order removed and wipe about $4.6 million of debt and over $2 million in payables from the balance sheet.

In June, 2017, the company said it has completed (subject to acceptance by the TSX Venture Exchange) an oversubscribed non-brokered private placement financing comprised of 6.3 million units priced at $0.05 per unit, raising $317,500.

This is money that was provided by investors who believe in the company, said Fia, adding that the proceeds will provide Jenex with “a lot of runway” as it tries to achieve its strategic goals.

Now that the company is relaunched, it plans to develop a product platform in the acne, anti-aging and cold sore market and implement a renewed digital marketing effort that would focus on social media channels, online advertising and a dynamic renewal of the company’s online presence.

In keeping with that plan, the company has obtained conditional acceptance in relation to an application to reactivate its shares as a Tier 2 Life Science Issuer on the TSX Venture Exchange, marking an upgrade from TSX Venture’s NEX trading forum.

Acceptance by the TSXV is subject to the following conditions:
  • The exchange’s final acceptance of a proposed private placement of 6.3 million units priced at $0.05 each that the company said has raised $317,500.
  • The exchange’s final acceptance of an $800,432 debt settlement deal that will be achieved through the issuance of 16 million common share at $0.05 per share. This is also subject to the requisite disinterested shareholder approval.

Aside from Ther0Zap, Jenex is working to relaunch InterceptCS to treat Herpes Simplex Virus (HSV-1), a virus that affects 3.7 billion people under the age of 50, according to the World Health Organization.

A key part of the strategy is to re-establish the company’s relationship and distribution agreement for InterceptCS with major Canadian retailers.

Fia said Jenex still has approximately 19,800 units of the InterceptCS in storage, which it eventually hopes to sell in order to generate cash.

The newly developed InterceptCS product will feature a new Thermo Engine for multi-treatment capabilities and a more compact size.

The company is also conducting tests on Cannabidiol oil derived from hemp to determine its effectiveness in inactivating both the Zika and West Nile viruses

“There is a growing body of clinical research demonstrating CBD’s potential therapeutic uses against viruses,” the company said.

It said this is because CBD increases nitric oxide levels in the human body which may prove to be an effective treatment to combat viral infections such as the Zika and West Nile viruses.

It is worth noting that there are high levels of CBD in hemp but almost no tetrahydrocannabinol  (THC), the psychoactive component that is prevalent in cannabis.

Meanwhile the company reached a key milestone by announcing that it has passed the renewal audit for ISO 1345:2003 medical device certification. The audit was conducted by SGS North America, the world’s leading inspection, verification, testing and certification company. SGS North America is recognized as the global benchmark for quality and integrity.
 
FULL DISCLOSURE: The Jenex Corporation is a client of Stockhouse Publishing Ltd.

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