OxyFile #319
CTC Inc. Advisory
4665 Cornell Road
Suite 167
Cincinnati, OH 45241
513-4469-0202
MEDIZONE INTERNATIONAL, INC.
(MZEI.U)
The Company:
Medizone International, Inc. is a development stage company founded in
1986 to scientifically explore the effectiveness of ozone in the
decontamination of blood and blood products of lipid enveloped viruses
and in the treatment of certain virally caused diseases, including
Acquired Immunodeficiency Syndrome (AIDS) and Hepatitis B.
Medizone holds US patent No. 4,632,980 entitled "Ozone Decontamination
of Blood and Blood Products" which covers a procedure for the
decontamination of blood and blood products of lipid enveloped viruses
while permitting the physiological characteristics of the blood or
blood component to be retained. This procedure describes a method of
treatment of blood and blood components with a precise mixture of
ozone and oxygen ("MEDIZO3NE"). The use of MEDIZO3NE as a therapeutic
drug in the treatment of certain human viral based diseases and as a
procedure to decontaminate blood and blood components are applications
covered under this patent. The Company also owns similar patents
(based on the U.S. patent) in Canada, Europe (EPC), Australia, Hong
Kong, Japan and Malaysia, with pending applications in other
countries, including Singapore.
The Company has also developed an apparatus specifically designed to
produce and deliver MEDIZO3NE. Patent No. 5,052,382 has been issued
in the U.S. Foreign patents based upon this equipment patent have
been granted in Australia and Europe and an application for a similar
patent has been submitted in Canada.
Medizone has financed its research and process development with equity
offerings and funding grants. The Company has not recorded revenue to
date and is considered a "development stage company." The Company has
not received regulatory approval in any country to license or market
its products.
The Product:
MEDIZO3NE a precise mixture of ozone and oxygen, is produced by an
apparatus developed by the Company, which is designed to generate,
dose and monitor this gaseous drug. This apparatus includes a
disposable hollow fiber device which interfaces MEDIZO3NE with a
patient's blood or unit of donor blood. As the blood comes into
contact with the ozone/oxygen mixture, lipid enveloped viruses present
are inactivated, while the integrity of the blood (including both
cells and proteins) is retained.
Applications:
MEDIZO3NE is currently being investigated for two separate
applications:
* A technology for the decontamination of blood and blood products
As a process for the decontamination of the blood supply, donor blood
is infused with MEDIZO3NE using Medizone's patented apparatus. When
the mixture of ozone and oxygen (MEDIZO3NE) comes into contact with
the donor blood, lipid enveloped viruses present in the donor blood
(both free and cell-incorporated) are rendered inactive.
* A drug treatment for certain virally caused diseases
As a drug for the treatment of certain virally caused diseases, small
amounts of patients blood, about eight ounces, are treated outside the
body (extracorporeally) and reintroduced into the patient in a
treatment program repeated on alternate days for a finite period of
time (projected to be 12 weeks). In part, the biological "shelf life"
of lipid peroxides, a residual active product of ozone's reaction with
lipids, requires the treatment to be completed within one hour.
Immediately upon contact MEDIZO3NE inactivates the lipid enveloped
viruses present and thereby makes them unable to infect other healthy
cells. Although MEDIZO3NE is exhausted almost instantaneously, the
lipid peroxides generated by MEDIZO3NE exhibit antiviral activity
themselves, and continue to inactivate both free virus and virally
infected cells for relatively longer periods of time.
What is Ozone?:
Ozone is a naturally occurring triatomic form of oxygen and is not
only present in the earth's atmosphere, but is also created as a
byproduct of any electrical discharge. Ozone's healing properties
were first described in the late 1880's. By 1910, several methods of
using ozone to treat wounds were being used in North America and
Europe. In the early 1900's, ozone was manufactured in North America
using compressed air (which includes nitrogen) rather than pure
oxygen. The resulting products of this process, including ozone and
other highly reactive nitrogen based compounds, coupled with dangerous
delivery methods then used, eventually discredited ozone as a medical
treatment in North America. However, ozone continues to be
extensively used throughout Europe, specifically in Austria, Germany
and Italy, and studies dating back to 1930 anecdotally document its
benefit in treating a myriad of medical conditions. In the U.S., the
non-medical applications for ozone include waste water treatment and
water purification as an alternative to chlorine.
Research:
The status of Medizone's sponsored research supporting the potential
use of its process and drug related technology as a blood
decontamination process and as a human therapeutic drug is as follows:
Research involving a preliminary animal model, human HIV target cells,
a limited feline model, human peripheral blood, and Factor VIII spiked
with HIV-l, have all evidenced the relatively low toxicity of
MEDIZO3NE.
Blood plasma purification studies are underway with funded costs
totally sponsored by the Canadian Defense Department Blood Forces
Program. The first and second stage of these studies have been
successfully completed. In May 1994, the Canadian Blood Forces Program
finalized funding of the third stage of research investigating
MEDIZO3NE's ability to prevent transmission related disease in a live
Simian Immunodeficiency Viral animal model in macaque monkeys. This
stage of study is being conducted at the New York State College of
Veterinarian Medicine, Cornell University. These Canadian studies
have been expanded with the goal of the Company to gain regulatory
approval to license Medizone's patented process for the sterilization
of blood derivatives and potentially whole blood prior to
fractionation.
Medizone has a submission pending with the U.S. FDA for human clinical
Phase I trials for its drug in the treatment of HIV infection. The
Company's Canadian subsidiary has a similar submission with Health and
Welfare, Canada, with both regulatory agencies requesting large animal
toxicity data prior to considering approval. A pig model has been
developed by the Company and submitted to both agencies to meet their
large animal toxicity data requirements. The Company will require
additional funding to commence this portion of its research, a
necessary prerequisite for either agency to approve the commencement
of human testing.
Clinical human trials (Phase I) studying Medizone's proprietary
process as a treatment for both HIV infected and chronic, active
Hepatitis B patients, are being conducted in an Italian multi-site
University Hospital based program sponsored by the Italian Ministry of
Health. On May 30, 1994, Medizone announced the commencement of the
first site of these Phase 1 clinical trials with its Italian
collaborators at the University of Naples to study the effect of
MEDIZO3NE therapy on human patients infected with either HIV or
Hepatitis B.
Potential Markets:
There is obviously an important market for an effective drug that
provides therapeutic treatment for AIDS and other virally caused
diseases. However, an attempt to quantify a revenue and earnings
contribution from this source would be premature given the Company's
present stage of regulatory development.
The blood decontamination market, if regulatory approval is obtained,
would be a significant income and revenue source which is more readily
quantified.
It is estimated that 25 - 26 million units of blood and blood products
are collected, processed and transfused annually in the United States
with an estimated $5 billion market. The worldwide market for
transfusions is projected at an additional $10 billion.
Cost to decontaminate each unit of blood is estimated at about $60 per
unit -- a potential annual market of $450 million estimating a 10
percent market share of the worldwide market.
Investment Considerations:
Medizone International, Inc. is attempting to evolve from a
development stage company focused solely on rigorous scientific
research investigating the medical applications of ozone to a stage
where its products receive regulatory approval for licensing and
marketing.
There appears to be renewed interest in ozone's potential as a bona
fide medical treatment which has attracted the attention of
governments and the scientific community.
As a true "penny stock", with an excess of 119 million shares
outstanding, Medizone has a present market value of $18 million.
Management believes this is modest considering the potential market
for the Company's products if regulatory approval(s) are obtained.
Since its founding in 1986, Medizone has financed its research and
product development with equity offerings and funding grants. Up to
this time, the Company has not yet recorded any revenues and is
considered a "development stage company."
Medizone has no sales, no earnings and limited capital. Although its
reported research to date has been positive, Medizone must be
considered a highly speculative investment suitable only for accounts
with a high risk/reward profile.
MEDIZONE INTERNATIONAL
Approximate Shares Outstanding (as of 4/28/95) 119,000,000
Estimated Float 58,000,000
Recent price (as of 4/28/95) Bid $0.14 Ask $0.16
52 Week High/Low Bid $0.31 - $0.07
Average Daily Volume Not Available
Market Makers 12
CTC, Inc. serves as the investor relations counsel to Medizone
International Inc. It is acting on the Company's behalf in issuing
this newsletter and is receiving compensation in return. The
information contained in this newsletter is furnished to inform the
brokerage community and is not an offer to buy or sell securities.