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†BOLD WORDS ARE REFERENCED IN THE GLOSSARY ON PAGES 59-62.

U.S. FDA-Cleared IVD Cancer Test Marketed Globally

Snapshot October 25, 2010

Radient Pharmaceuticals Corp. (“Radient” or “the Company”), together with its wholly owned subsidiary AMDL Diagnostics Inc. (ADI), is an in vitro diagnostics (IVD)† company commercializing Onko-Sure® (formerly DR-70®)—a non-invasive, IVD test kit that detects and monitors up to 19 types of cancer. Onko-Sure® helps physicians answer important clinical questions related to early disease detection and progression in order to ultimately improve patient outcomes and survival. The Onko-Sure® blood test measures the accumulation of specific breakdown products in serum (blood) called fibrin and fibrinogen degradation products (FDPs). Research has found that FDP levels rise dramatically as cancer progresses. Onko-Sure® is currently cleared to monitor colorectal cancer (CRC) treatment/recurrence in the U.S.; to detect and monitor lung cancer in Canada; for use as a general cancer marker in Australia, Europe, India, Taiwan, and Vietnam; and for use in CRC patients in South Korea. Radient is working to obtain additional regulatory clearances for indications in the U.S. and abroad. Radient’s subsidiary, ADI, operates research and development and quality control laboratories and an ISO 13485:2003-certified manufacturing facility for Onko-Sure® production.

Recent Financial Data

Key Points

Radient recently repositioned its business to focus solely on the IVD market—a strategy that could enable the Company to monetize the value of other assets through new partnerships, separate initial public offerings (IPOs), or possible sales. Radient’s assets include 98% ownership in a China-based pharmaceuticals business, Jade Pharmaceuticals Inc., and a proprietary cancer vaccine therapy technology.

Radient believes that the market for Onko-Sure® could be as high as $1.5 billion annually. The international and domestic CRC monitoring test market alone is approximately $450 million per year and growing at 10%. A government-backed general cancer screening market could represent a $1 billion annual market that is currently in its infancy. Health Canada’s approved use of Onko-Sure® as a lung cancer screening and monitoring test represents an estimated $50 million annual market, which is in its initial stages as well.

Radient has signed a Letter of Intent to acquire Provista Diagnostics Inc., a wholly owned subsidiary of Provista Life Sciences. Provista Diagnostics’ product line includes the BT Test® for early breast cancer detection, which could broaden Radient’s base of IVD products.

As of June 30, 2010, Radient’s cash position was $2.5 million, which the Company believes is sufficient to fund operations through February 2011.

Ticker (Exchange) RPC (NYSE Amex)

Recent Price (10/22/2010) $0.58

52-week Range $0.20 - $2.59

Shares Outstanding 31.4 million

Market Capitalization ~$18.2 million

Average 3-month Volume 783,768

Insider Owners* ~6.6%

Institutional Owners ~10%

EPS (Qtr. ended 06/30/2010) ($1.00)

Employees 9

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Radient Pharmaceuticals Corp.

2492 Walnut Avenue, Suite 100 Tustin, California 92780 Phone: (714) 505-4461

Fax: (714) 505-4464 www.radient-pharma.com

* Source: Company Form S-1 filed 05/03/2010.

CRYSTAL RESEARCH ASSOCIATES, LLC EXECUTIVE INFORMATIONAL OVERVIEW® PAGE 2

Table of Contents

Snapshot ....................................................................................................................................................... 1

Recent Financial Data ................................................................................................................................... 1

Key Points ..................................................................................................................................................... 1

Executive Overview ....................................................................................................................................... 3

Growth Strategy .......................................................................................................................................... 10

Distribution Partnerships ............................................................................................................................. 12

Intellectual Property .................................................................................................................................... 13

Company Leadership .................................................................................................................................. 14

Core Story ................................................................................................................................................... 19

Limitations of Current Cancer Diagnostics ........................................................................................... 19

Onko-Sure®: A Test Kit for Various Cancers ........................................................................................ 24

Repositioning Radient as an In Vitro Diagnostics Company ................................................................ 34

Competition ................................................................................................................................................. 36

Milestones ................................................................................................................................................... 39

Key Points to Consider ................................................................................................................................ 41

Historical Financial Results ......................................................................................................................... 43

Risks ............................................................................................................................................................ 46

Recent Events ............................................................................................................................................. 53

Appendix ..................................................................................................................................................... 58

Glossary ...................................................................................................................................................... 59


Executive Overview Radient Pharmaceuticals Corp. (“Radient” or “the Company”) is an in vitro diagnostics (IVD) company focused on developing a simple, effective, and non-invasive IVD test to detect and monitor up to 19 types of cancer. Radient’s test kit, called Onko-Sure® (formerly DR-70®), is cleared for monitoring the treatment and/or recurrence of colorectal cancer (CRC) in the U.S. and for the detection and monitoring of lung cancer in Canada. As well, the Company is cleared to market Onko-Sure® in Europe, various countries in Asia, and in Australia as a general cancer screen. In the U.S., Onko-Sure® is also supplied under a Clinical Laboratory Improvement Amendments (CLIA) waiver, which allows Radient to offer the product as a service performed by laboratories that meet CLIA standards. Going forward, the Company is focused on gaining additional marketing clearances for Onko-Sure® in the U.S. and abroad for further cancer indications. In late 2009, Radient began repositioning its various business segments to become solely an IVD company. As a result, the Company may be able to monetize its assets unrelated to the IVD space (including a Chinese pharmaceutical investment) via new partnerships, separate initial public offerings (IPOs), or possible sales. Greater details of these assets are provided on pages 34-35. Cancer Overview Cancer is a malignant growth or tumor caused by abnormal and uncontrolled cell division. It is the second most common cause of death in the U.S. The American Cancer Society (ACS) estimates that over 1,500 individuals succumb to cancer daily, totaling nearly 570,000 cancer-related deaths annually (Source: the ACS’s Cancer Facts & Figures 2010). From an economic standpoint, the U.S. National Institutes of Health (NIH) estimates that the annual cost of cancer in 2010 is approximately $263.8 billion (which accounts for direct medical expenses as well as lost productivity due to illness or premature death). Many types of cancer can be detected in the early stages, before the tumor cells have metastasized (spread). When detected early, more treatment options are available to the patient and survival rates are generally higher since the cancer can often be contained or eliminated before it spreads to other organs. Many common forms of cancer (e.g., lung, colorectal, prostate, and breast cancer) develop in areas that allow the tumor to be completely or partially removed by surgery. Although removing such organs may have negative effects, these procedures can often cure patients if the cancer has not spread. When cancer cannot be fully eliminated through surgery, patients may receive radiation or chemotherapy, which can help slow or stop the growth of cancer, but are associated with numerous harmful side effects. Once cancer has advanced to the later stages, it can cause many serious consequences, particularly if it has spread to an essential part of the body, such as the brain. Cancerous tissues that remain in the body after treatment—even in small quantities—can continue to proliferate, generating new tumor cells and increasing the patient’s risk of relapse. In an effort to prevent cancer recurrences, patients can be routinely monitored after treatment for the presence of tumor markers—any of a number of substances expressed on cancer cells or created by the body’s immune system in response to cancer cells—as a rise in these levels could signal a return of the cancer. Likewise, oncologists may use diagnostic cancer tests, such as Onko-Sure®, during treatment to assess a patient’s response to therapy and to evaluate appropriate future treatments. Depending upon the patient and the type of cancer, follow-up tests may be continued for life. Regular screening increases the chances of detecting certain cancers early, when they are most likely to be curable (Source: ACS). Similarly, monitoring programs to test for cancer recurrence is a critical part of an effective treatment plan for post-surgical cancer patients. IVD tests are a type of cancer screening method that entail testing bodily fluids and tissues for cancer markers. IVD tests are used in oncology to detect cancer, monitor the effects of treatment and possible recurrence, indicate the likelihood of progression, and assist with a prognosis. Radient’s IVD test, Onko-Sure®, measures the accumulation of fibrin and fibrinogen degradation products (FDPs) in a patient’s serum (blood). FDPs are overproduced in a cancerous environment; thus, levels of FDPs are often higher in cancer patients (as described on page 25). Radient estimates that FDP levels can be up to 38 times higher in the blood of cancer patients versus non-cancer patients.


Although significant improvements in cancer diagnostics have been made in recent years and various therapies have been developed to treat the disease, cancer continues to be a leading healthcare challenge worldwide. Contributing to this challenge are the limitations associated with existing IVD tests, which may only detect a single type of cancer or cancer marker and may be less indicative in the lower levels. Onko-Sure® is a novel approach since it measures all FDPs in a patient’s serum, is more sensitive in the lower tumor marker levels, and can detect a variety of cancers. Onko-Sure® Technology Onko-Sure® is a simple and effective IVD test kit, which is used to detect and monitor up to 19 cancer types. As the Onko-Sure® test kit is non-invasive, the Company has not identified any side effects to administering the test. Onko-Sure® can be used for several purposes in the clinic: (1) to pre-screen patients for cancer; (2) to manage treatment strategy; or (3) to monitor cancer recurrence in patients who were previously treated for cancer. A pre-screen is a preliminary test used to determine whether or not to proceed with a more detailed, invasive, and costly evaluation. In oncology, a pre-screen may be used first to determine a patient’s likelihood of cancer before a more costly or invasive test is performed. As with other cancer diagnostic products, it is important to follow the Onko-Sure® test with other clinically relevant diagnostic modalities in order to properly diagnose the cancer and determine an appropriate treatment strategy. Onko-Sure® cancer test kits (shown in Figure 1) are sold in the form of a 96-well test plate, which, after standards are applied, allows up to 41 individual tests to be performed simultaneously (in duplicate). These tests are typically run in a clinical reference laboratory with test results determined by using a microtiter reading analyzer. Results are sent to a patient’s attending physician, who relays the information to the patient. Typically, a patient can receive results within three to five days from the blood draw date.

To date, Onko-Sure® has been used to evaluate nearly 7,500 patients. In 2008, the U.S. Food and Drug Administration (FDA) granted Radient clearance to market Onko-Sure® as a safe and effective blood test for monitoring patients previously diagnosed with CRC. As well, Onko-Sure® is cleared by Health Canada to detect and monitor lung cancer. Internationally, Radient has received regulatory clearances to market Onko-Sure® as a general cancer marker in Australia, Europe, India, Taiwan, and Vietnam. The test is also used in South Korea for CRC.

ONKO-SURE® TEST KIT

Radient Pharmaceuticals Corporation

Figure 1

Source: Radient Pharmaceuticals Corporation.


How Onko-Sure® Works The Onko-Sure® test kit functions by measuring the level of FDPs in serum using a polyclonal antibody (DR-70) as a tumor marker. While the production of FDPs is restricted in healthy individuals, FDPs are overproduced by cancer cells. Onko-Sure® acts as a “barometer for cancer” by simultaneously measuring the multiple FDP species that may be underestimated on other tests. Whereas current assays for FDP typically measure a specific FDP component as representative of this group (e.g., D-dimer), the Onko-Sure® test kit detects the full range of FDPs. Greater details on how the test functions are provided on page 25. Cleared in the U.S. to Monitor the Treatment and/or Recurrence of Colorectal Cancer (CRC) To the Company’s knowledge, the Onko-Sure® test kit is the first new cancer test to receive FDA clearance to monitor CRC treatment and/or recurrence in over 25 years (since the carcinoembryonic antigen [CEA] test was approved in 1982). CRC occurs when cells in these regions reproduce rapidly and uncontrollably. These cells fail to function properly and usually begin as a polyp (a small growth of non-cancerous tissue) in the colon or rectum. The cells develop systematically over a period of years and can eventually change beyond tissue growth into a tumor. According to the Globocan 2002 database (an International Agency for Research on Cancer [IARC] project to estimate cancer incidence and mortality), an estimated one million new cases of CRC are diagnosed worldwide each year. If detected early, the survival rate for CRC exceeds 90%. However, more than half of all diagnoses occur at late stages, leading to a poor prognosis. Globally, CRC is the third leading cause of cancer-related deaths (Source: World Health Organization [WHO]). The population that could benefit by using Onko-Sure® to monitor CRC treatment and/or recurrence is quite broad in the U.S. In 2006, the National Cancer Institute (NCI) estimated that nearly 1.2 million people were living with CRC. Under the CLIA waiver (described in greater detail on page 31), Onko-Sure® may be used as a general cancer screen to monitor and detect a range of cancers, including CRC. Presently, the ACS recommends that individuals over age 50 should be screened regularly for polyps and other indications of CRC. Current testing methods, such as sigmoidoscopy, double contrast barium enema, and colonoscopy, can be invasive, inconvenient, costly, or uncomfortable, which can deter patient compliance. Furthermore, these tests as well as existing non-invasive methods (e.g., computerized tomographic [CT] colonography) may not detect all small polyps, nonpolypoid lesions, and cancers. Current estimates indicate that one in four individuals age 50 or older are tested annually in the U.S., suggesting that the total population being screened for CRC is approximately 20 million. Current Standard to Monitor CRC: Carcinoembryonic Antigen (CEA) The majority of physicians who currently treat CRC employ the CEA test to monitor CRC treatment and/or recurrence or to assess a patient’s response to treatment. CEA is a simple blood test similar to Onko-Sure®; however, while CEA can typically detect cancer recurrence in later stages, when the CEA level is higher, Onko-Sure® is able to diagnose cancer in the early stages, even with low levels of the DR-70 tumor marker. As well, in early CRC stages (Dukes Stages A and B), between 68% and 97% of biopsy-positive patients have negative CEA values and are unable to be monitored with CEA (Source: Journal of Immunoassay and Immunochemistry April 2010, 31[2]:131-147). When CEA was first developed, it was not immediately accepted by most of the medical community. Dr. Robert Beart, Jr. (a recent addition to Radient’s Board of Directors [biography on page 18]) conducted a pilot study and examined the available data for CEA tests. In particular, a study evaluating post-operative screening methods of 149 CRC patients compared periodic history, physical examination, chest radiograph, liver function tests, complete blood count, CEA radioimmunoassay, barium enema, and endoscopic studies. The study suggested that, out of available screening methods, a patient’s history and the CEA test were the most sensitive methods to detect recurrent tumors. Thus, as a low-cost approach with some evidence of utility at detecting later-stage cancers, the test was adopted for the monitoring of CRC. However, the study’s authors, who included Dr. Beart, also noted that these methods were unlikely to indicate recurrence at a “therapeutically advantageous” stage (Source: Diseases of the Colon and Rectum 1981, 24[8]:585-588).


American Society of Clinical Oncology (ASCO) literature associated with monitoring CRC demonstrates that CEA is a reasonable test for this objective. Nevertheless, Radient believes that its Onko-Sure® test kit has shown to be more effective at detecting CRC recurrence than the current standard (CEA) in patients with low CEA values (Source: Journal of Immunoassay and Immunochemistry April 2010, 31[2]:131-147). Approximately 50% of biopsy-positive CRC patients are believed to have low CEA values (Source: Journal of Immunoassay and Immunochemistry April 2010, 31[2]:131-147). Therefore, Onko-Sure® is thought to provide significant clinical value for treatment and/or recurrence monitoring of CRC patients. Laying the Groundwork for Physician Acceptance Whenever a new IVD test is developed and passes through the commercialization process, there is a level of acceptance that must be established among clinicians who prescribe these tests in order for the product to be commercialized successfully. As such, a company’s development pathway for garnering physician acceptance must involve an understanding of the value proposition associated with the test. Importantly, most physicians do not change their behavior quickly, as it is dictated by medians of care from either the American Medical Association (AMA) or, in the case of cancer, ASCO, since these groups determine how doctors should respond to certain types of disease or, if they believe the disease exists, what types of tests should be performed. Despite clinical evidence supporting the benefits of employing the Onko-Sure® test kit, many members of the medical community are unaware of the Company’s technology. To address this issue, Radient is focused on driving industry awareness and educating the medical community on the value of Onko-Sure®, given its low cost and increased accuracy versus CEA. Accordingly, Radient has recently added Dr. Beart to its Board of Directors as a key advocate in helping Radient legitimize its test and technology across the medical community. Radient has also submitted Onko-Sure® to the AMA and ASCO to be considered for inclusion in the literature/guidelines regarding the process of care for CRC patients, such that using Onko-Sure® and CEA (in combination) is recommended to monitor treatment and/or recurrence. Radient believes that inclusion in AMA and ASCO literature as a standard of care is a crucial element to legitimizing the test to physicians. Cleared in Canada to Detect and Monitor Lung Cancer In addition to CRC in the U.S., Onko-Sure® is cleared by Health Canada to detect lung cancer and to monitor lung cancer treatment and/or recurrence. Lung cancer causes more deaths than any other type of cancer in both men and women (Source: Cancer Facts & Figures 2010). In Canada, approximately 24,200 individuals may be diagnosed with lung cancer in 2010, with roughly 20,600 succumbing to the disease (Source: the Canadian Cancer Society). In the U.S. during 2010, the ACS forecasts 222,520 new cases of lung cancer, with roughly 157,300 deaths attributable to this disease (Source: Cancer Facts & Figures 2010). Radient is currently working with Health Canada on several programs for lung cancer and CRC, which are intended to increase the use of Onko-Sure® with the idea of testing high-risk patients (considering factors such as smoking and a personal or family history of cancer). If a patient exhibits any of these risk factors, testing with Onko-Sure® is recommended in order to detect lung cancer or the lung cancer recurrence as early as possible. If the test results convey a very low reading, it is recommended that the patient return for re-testing in three to five years. A moderate test reading may indicate a growth, and accordingly patients are then referred by a general physician to a cancer facility where they can meet with an oncologist for additional testing to determine the location of the tumor.


Disadvantages of Current Monitoring Techniques for Lung Cancer There is currently no standard for monitoring lung cancer patients to facilitate detection in the earliest stages of the disease—before symptoms are present. Typically, upon learning of a patient’s symptoms, a healthcare provider often formulates a list of possible diagnoses and questions the patient with regard to symptoms, medical and surgical history, smoking, work history, and other questions related to lifestyle, overall health, and medications. This is generally followed by a chest x-ray to determine the cause of the respiratory symptoms. In the majority of patients, a computed tomography (CT) scan or Magnetic Resonance Imaging (MRI) exam of the chest further defines the problem. However, none of these imaging techniques are confirmatory. Presently, histological assessment of the cells or tissue taken by invasive techniques is necessary to confirm lung cancer. Should the chest x-ray film or scan suggest a tumor, the patient undergoes a diagnostic procedure. Sputum testing may be performed to detect cancer in the lungs, where cells in the sputum can be examined to see if they are cancerous. Following treatment, patients often undergo regular checkups, including a physical exam, blood tests, chest x-rays, CT scans, and bronchoscopy, to evaluate the treatment’s efficacy and to monitor for potential cancer recurrence. In contrast to current monitoring and detection techniques, a simple blood test, such as Onko-Sure®, may be used to evaluate at-risk patients on a regular basis in order to diagnose lung cancer earlier, monitor response to therapy, and detect residual disease in patients after treatment. For patients who receive positive Onko-Sure® results, it is recommended that they undergo further investigations to properly diagnose the disease and to determine an appropriate treatment strategy. Radient believes that Onko-Sure® has lower costs and fewer complications than invasive techniques that are routinely used to diagnose lung cancer. As well, it could increase the patient survival rate as cancer is detected at an earlier stage. Onko-Sure® as a General Cancer Screen With an ability to detect the presence of up to 19 cancer types, Onko-Sure® could be used as a general cancer screening tool. This has been supported by several studies worldwide (N=4,982) (references listed in Table 16 [page 58]). To date, the kit has been cleared for use as a general cancer marker in Australia, Europe, India, Taiwan, and Vietnam. Overall, Radient believes that the clinical evidence obtained thus far has supported the broad utility of Onko-Sure® as a general cancer screening test. How a General Cancer Screening Test Can Be Used Implementing a cancer screening program in high-risk populations where individuals have had a history of cancer in their family, are smokers, or have other high-risk behaviors (where they are led to believe that they could have cancer) can be a useful preliminary tool to detect the disease in the early stages, before the cancer has spread. Radient estimates that if cancer can be caught in Stage I, the cost of treatment decreases significantly and the level of morbidity declines by approximately 50%. The Company anticipates that the potential cost reduction associated with screening and detecting cancer in the early stages outweighs the costs associated with implementing a nationwide program with Onko-Sure®. Ultimately, Radient’s objective is to have the government underwrite the cost of cancer screening for high-risk populations.


Clinical Laboratory Improvement Amendments (CLIA) The Clinical Laboratory Improvement Amendments (CLIA) of 1988 are U.S. federal regulatory standards that apply to all clinical laboratory testing performed on humans in the U.S. (except clinical trials and basic research). In accordance with CLIA regulations, the CLIA Program sets standards and issues certificates for clinical laboratory testing. An objective of CLIA is to ensure the accuracy, reliability, and timeliness of test results regardless of where the test is performed. The CLIA Program is funded by user fees collected from approximately 189,000 laboratories—many of which are located in the U.S. CLIA defines a clinical laboratory as any facility that performs laboratory testing on specimens derived from humans for the purpose of providing information related to the following: (1) to diagnose, prevent, or treat disease or impairment; and (2) to assess health. In the U.S. today, general cancer screening must be performed under a CLIA waiver at an approved laboratory. Radient is currently working with two groups on a CLIA basis: (1) GenWay Biotech, Inc. of San Diego, California, which sells the Onko-Sure® test under the You Test You™ brand via www.youtestyou.com; and (2) Provista Life Sciences of Phoenix, Arizona. Through the GenWay partnership, consumers may apply online to receive a kit for testing at a CLIA-approved facility. Presently, Provista Life Sciences provides CLIA-certified laboratory support services to Radient, including supporting ongoing product development for Onko-Sure® and securing insurance reimbursement, among other initiatives. Provista Life Sciences has independently validated Onko-Sure® as a potential screening tool for breast cancer detection. Additionally, Provista Life Sciences aims to collect essential clinical data through a validation study of DR-70 to facilitate the commercialization of Onko-Sure® as a general cancer screening tool, which may be completed in the fourth quarter 2010. The Company believes that the likelihood of Onko-Sure® being implemented on a broader scale through a CLIA waiver in the U.S. is high. As a result, the CLIA Program could become a significant business segment for the Company. As well, Provista Life Sciences is expected to launch LC Sentinel™, a new lung cancer detection assay based on Radient’s antigens for fibrinogen degradation products, for use in high-risk lung cancer patient populations in the U.S. by the end of the fourth quarter 2010. The launch follows the completion of a study validating the accuracy of LC Sentinel™ in lung cancer patients, as announced on October 13, 2010, and overviewed on page 31. Manufacturing and Sales of Onko-Sure® Onko-Sure® is manufactured at Radient’s Good Manufacturing Practice (GMP)-regulated and International Organization for Standardization (ISO) 13485:2003-certified facility in Tustin, California, and sold to third-party distributors, which then sell directly to CLIA-certified reference laboratories in the U.S. as well as clinical reference laboratories, hospital laboratories, and physician-operated laboratories in international markets. The Company also provides Onko-Sure® to other international markets through various distribution agreements (further detailed on page 12). Repositioning Radient as an IVD-focused Company The Company is transitioning its business to focus solely on the IVD space. As part of this initiative, Radient is repositioning several business segments that it believes may enable the Company to monetize the value of some of its assets through new partnerships, separate IPOs, or sales, including 98% ownership in a China-based pharmaceuticals business, Jade Pharmaceuticals Inc., and a proprietary cancer vaccine therapy technology. Each of these assets is summarized on page 9 and described in greater detail on pages 34-35. In line with the Company’s strategy of being an IVD-focused business, Radient has entered into a Letter of Intent to acquire Provista Diagnostics Inc., which is presently a wholly owned subsidiary of Provista Life Sciences. The goal of the proposed merger is to build a more identifiable and profitable IVD testing business by expanding CLIA testing services beyond one test as well as increasing test kit commercialization and research and development efforts. Greater details of the proposed acquisition are provided on page 31.


Jade Pharmaceuticals Inc. Jade is engaged in the manufacture and distribution of generic and homeopathic pharmaceutical products. While acquiring the Chinese business was a profitable venture for Radient, it also diverted resources away from the Company’s primary objective of developing and commercializing its IVD product. As such, effective September 29, 2009, Radient deconsolidated all of Jade’s activities. In connection with the deconsolidation, the Company reclassified its Chinese pharmaceutical manufacturing and distribution business (conducted through the Jade subsidiary) as a business investment rather than a consolidated operating subsidiary. Radient intends to monetize its Chinese assets through either a sale or an IPO, participating initially as a majority shareholder and subsequently becoming a minority stakeholder in the Chinese pharmaceutical business. Combination Immunogene Therapy (CIT) CIT is a patented combination gene therapy technology designed to build the body’s immune system and destroy cancer cells. Radient is actively seeking strategic joint ventures or other licenses for its CIT technology with pharmaceutical or biotechnology partners. In April 2010, Radient entered into an exclusive five-year collaboration agreement with a multinational biotechnology company, Jaiva Technologies, Inc., under which Jaiva is working with clinical laboratories, hospitals, and physicians in India to conduct clinical trials for Radient’s CIT technology. Jaiva is assisting Radient in obtaining government approval in India to use CIT technology as a cancer therapy and vaccine. Corporate Information In 1987, AMDL, Inc. (now Radient) began developing Onko-Sure® (formerly called DR-70®). In October 2008, AMDL transferred the assets surrounding its IVD technology to a newly formed subsidiary, AMDL Diagnostics Inc. (ADI), to better focus on the continued research, development, manufacture, and sale of the IVD cancer test. On September 25, 2009, the Company changed its name from AMDL, Inc. to Radient Pharmaceuticals Corp., believing Radient as a brand name holds market appeal and more accurately reflects the new corporate direction and branding statements. Radient is headquartered in Tustin, California. At June 30, 2010, the Company employed nine full-time individuals in the U.S. Radient supplements its permanent staff with temporary personnel. The Company also employs consultants for safety testing, regulatory and legal compliance, and other services. ADI remains a wholly owned subsidiary of Radient, with corporate offices, a laboratory, and an ISO 13485-certified manufacturing facility in Tustin. ADI has 20 employees and consultants who are directly engaged in Company initiatives.


Growth Strategy The Company is pursuing a “bottom-up” market entry and penetration model for Onko-Sure® through global distribution partnerships, where distributors market and sell the test kits directly to medical laboratories, medical centers, hospitals, clinical laboratories, universities, and biotechnology and pharmaceutical companies. Primary target markets include the U.S., Canada, Europe, Korea, Taiwan, non-harmonized countries in Asia-Pacific, India, Middle East, Latin America, and South America. As well, Radient aims to be a part of government-sponsored general cancer screening programs, where the government underwrites the cost of cancer screening for high-risk populations. In conjunction with a strategic partner, Radient seeks to operate a U.S.-based CLIA laboratory. By year-end 2011, the Company also expects to expand its sales strategy to include a direct-to-consumer (DTC) model, where it could leverage e-commerce channels as well as provide product fulfillment currently handled by third-party vendors. Target Markets for Onko-Sure® Radient began commercializing Onko-Sure® after receiving FDA clearance in 2008. Since that time, Radient has focused on creating a domestic and international distribution network and validating Onko-Sure® among oncologists, gastroenterologists, and laboratory directors. In particular, the Company has added several necessary validation tools, including publishing the first edition of the Onko-Sure® Reference Guide for physicians, oncologists, clinicians, consumers, and patients to help gain sales traction for Onko-Sure® in North America and other international markets. Radient is also pursuing additional clinical trials and inclusion in industry publications concerning the standard of care for cancer diagnosis and targeting additional validation tools, which are anticipated to be in place by year-end 2010. The Company believes that it is now in a position to begin making significant headway in commercializing Onko-Sure® in four key target markets (listed below and on page 11). (1) FDA-approved Use as a CRC Monitoring Test in the U.S. and Canada. Radient estimates that this

represents potentially a $200 million annual market (at the wholesale level) that could increase 10% per year. The competing test for Onko-Sure® is the CEA test, which typically only identifies cancer in the later stages when the probability of treating the disease is lower. In contrast, Onko-Sure® has been clinically shown to identify cancer in earlier stages. Radient is implementing an aggressive commercialization strategy in the U.S. specifically targeted toward physicians, oncologists, clinicians, consumers, patients, and reference laboratories that show demand for the test.

(2) FDA-approved Use as a CRC Monitoring Test in International Markets. Radient believes that this is a

$250 million annual market (at the wholesale level) that is also increasing 10% per year. Radient expects sales of Onko-Sure® in North America to help create new market share in the international CRC monitoring market.

(3) Government-backed General Cancer Screening Test Predominately Outside of the U.S. The

Company estimates that government-backed general cancer screening represents a $1 billion annual potential market. International recognition and demand for government-backed general cancer screening is relatively new to the market. Radient expects government-backed general cancer screening for high-risk populations in the U.S. to become widely used by 2015. Based on Radient’s market analysis, the Company anticipates driving solid adoption and sales of Onko-Sure® in high-risk populations, specifically in India and Colombia, by the fourth quarter 2010 and Brazil by the second quarter 2011. Radient is actively targeting other countries and expects sales to increase as its commercialization program in the above markets is implemented. Additionally, through the Company’s U.S.-based CLIA laboratory partner, Radient has initiated product sales for Onko-Sure® as a general cancer screen in the U.S. and Canada in addition to selling Onko-Sure® as a general cancer screen in Korea and Taiwan. The Company must sell approximately 1.5 million kits annually in order to achieve up to $1 billion in Onko-Sure® sales from government-backed general cancer screening initiatives (focused on patients with a high risk of developing cancer).


(4) Health Canada-approved Use as a Lung Cancer Screening and Monitoring Test. Although relatively new to the market, Radient believes that lung cancer screening and monitoring represents a $50 million annual market. More Canadians are diagnosed with lung cancer than any other cancer type. Mortality caused by lung cancer is higher than breast, colorectal, and prostate cancer combined. In 2010, 1 in 12 Canadians may develop lung cancer. While smoking causes the majority of lung cancers, 15% of patients diagnosed have never smoked and 35% are former smokers. Most lung cancers are diagnosed in late stages due, in part, to a lack of effective screening procedures. Radient believes that this is a primary factor, leading the Company to believe that Onko-Sure® could become an important and high-demand test for cancer screening. Radient is seeking Canadian government support for a lung cancer screening program for high-risk segments of the population.

Targeting Primary Physicians Radient’s physician-targeting strategy is “V”-shaped—starting very narrowly and broadening quickly—beginning with the medical community in the larger teaching hospitals. In these hospitals, the Company’s goal is to substantiate its claims among physicians that using Onko-Sure® is a part of good care based on support from ASCO and the AMA. While on the surface it may make sense for the Company to begin targeting oncologists, Radient’s market research has shown that once an oncologist removes the cancer from the patient, the patient returns to the primary physician to be monitored on a regular basis (every three to six months). Then, if the cancer reappears, the patient makes a new appointment with his/her oncologist. Thus, the majority of CEA tests are prescribed by general practitioners. The Laboratory’s Role Radient is researching laboratories such as Quest Diagnostics Inc. (DGX-NYSE), Laboratory Corporation of America® Holdings (LH-NYSE), the Mayo Clinic, and ARUP Laboratories—some of the largest laboratories in the U.S.—and has begun working closely with the Mayo Clinic on studies. Radient seeks to ensure that its literature and the novelty of its test have been highlighted by ASCO as well as other groups, including the ACS and National Cancer Institute (NCI), as this is critical to gaining acceptance by the general physician population. The Company believes that it could take a year or more to gain endorsement from ASCO. During the summer of 2010, ASCO conducted a review of CRC monitoring tests and other diagnostic devices. Radient has made an active submission to the related committee and is currently performing outreach to its members. Thus, the Company believes that it is doing all that it can in order to ensure that information and publications with regard to Onko-Sure® are broadly available. Physician’s Desk Reference Guide Radient has also published a Physician’s Desk Reference Guide for Onko-Sure®, which is a 94-page document detailing the value and applications of the Onko-Sure® test kit. The reference includes all of the scientific literature validating the Company’s suppositions. Potential Product Enhancement A next-generation Onko-Sure® test—one that has proven more accurate with even fewer false positives and greater accuracy in the laboratory—could become available over the next two to three years. In 2009, the Company entered into a collaborative agreement with the Mayo Clinic to conduct a clinical study to determine whether the new version of the kit can lead to improved accuracy in the detection of early-stage cancer. As well, Radient intends to advance engagements with other internationally recognized hospitals and universities (e.g., the Royal North Beach Hospital in Australia and the University of Pennsylvania) to assist in the development of a next-generation product.


Distribution Partnerships Onko-Sure® is currently being manufactured at the Company’s Tustin, California-based facilities and is sold to third-party distributors, which sell directly to CLIA-certified reference laboratories in the U.S. as well as clinical reference, hospital, and physician-operated laboratories internationally. The Company has implemented 11 worldwide distribution agreements with large-scale IVD distributors. Current distribution relationships are in place in the U.S., Canada, Colombia, Korea, Taiwan, Australia, India, Russia, Vietnam, Laos, and Cambodia, with existing distributors continually looking to broaden their territories. Because physicians are financially incentivized differently in each country for the prescription of certain drugs and tests, products are marketed on a country-specific basis. Depending on the country, a laboratory may push to market a new and novel test versus in the U.S., where a doctor may encourage the use of a novel test. During 2009 and 2010, the Company entered into the following distribution agreements: an exclusive five-year distribution agreement allowing Grifols USA, LLC to market and sell Onko-

Sure® to hospitals, clinical laboratories, clinics, and other healthcare organizations for monitoring CRC;

an exclusive two-year distribution agreement with Tarom Applied Technologies Ltd. for the marketing

and sale of Onko-Sure® in Israel; two distinct, exclusive five-year distribution agreements with GenWay Biotech, Inc., allowing GenWay

to market and sell Onko-Sure® for uses other than CRC to CLIA-certified laboratories in the U.S. and as a lung cancer screen to laboratories in Canada, as well as a five-year marketing, sales, and distribution agreement to commercialize Onko-Sure® in Russia and the former Soviet Republics;

an agreement with Perceptive Imagineering LLC to expand the commercialization of Onko‐Sure® in

Latin America (www.perceptive-imagineering.com/onko-sure); an exclusive five‐year sales, marketing, and distribution agreement with Jaiva Technologies, Inc., a

U.S. multinational biotechnology company, and its affiliate, Gaur Diagno (New Delhi); and

an exclusive five-year full-service distribution agreement with Phu Gia Trading Co. Ltd. to expand Onko-Sure® into the Vietnam, Laos, and Cambodia healthcare markets.

These agreements have various pricing points from roughly $300 per kit or more to revenue sharing agreements, where Radient could net over $1,500 per kit. As well, these agreements require the Company’s distributors to set up outreach programs and participate in various industry events, including ASCO or other major meetings, where the distributors staff and fund a booth and conduct advertising among other programs. As well, distributors are required to conduct marketing efforts to reach hospitals and clinics, including providing dedicated marketing resources, marketing communications, advertising, website development (depending on the market), sales collateral, direct sales outreach, events, and public relations. Radient is in discussions with other potential distributors beyond its current 11 U.S. and international distribution agreements in place. The Company is seeking to complete an additional four agreements during the remainder of 2010. Radient’s sales strategy is to sell approximately 17,500 test kits through mid-2011 based on commitments made by distributors—most of which are not expected until late 2010. These agreements employ escalating quarterly sales targets that must be met by the distributor in order for the distributor to maintain territorial exclusivity.


Intellectual Property Onko-Sure® Radient holds two issued U.S. patents describing methods for measuring ring-shaped particles in extracellular fluid as a means of detecting cancer. These patents expire in 2012 and 2014. Three additional U.S. patent applications and one European patent application are currently pending, which relate to the Company’s methodology for using the Onko-Sure® tumor marker as an indicator of tumorigenesis. Table 1 summarizes a selection of the Company’s intellectual property (e.g., trademarks and patent applications) that Radient holds for Onko-Sure®.

CIT Technology Radient’s patented CIT technology (described on pages 34-35) was purchased in August 2001 from Dr. Lung-Ji Chang, who developed it while at the University of Alberta (Edmonton, Canada). The Company acquired rights to three kinds of patents: (1) an animal model to test CIT; (2) vector composition; and (3) mode of action. Multiple versions have been accepted in the U.S. and through the Patent Cooperation Treaty (PCT), excluding mode of action. The Company has also filed a Continuation Patent Application on the CIT methodology, which is under review by the U.S. Patent and Trademark Office (USPTO). Radient expects a response within six months. The issued U.S. patent, which expires in 2017, relates to a vector composition comprising a gene encoding the B7-2 protein in combination with an additional modulating protein, granulocyte macrophage colony-stimulating factor (GM-CSF). The CIT technology entails combining the GM-CSF gene with the B7-2 gene with the intent of enhancing the antitumor immune response. Radient has also been issued patents for the CIT technology in Singapore and Australia. A further U.S. patent has been issued relating to a technology acquired from Dr. Chang. This technology, for which the patent expires in 2017, entails the evaluation of vaccines in animals. Humanized Mouse Model Technology Additionally, Radient also acquired a humanized mouse model technology from Dr. Chang, which has been granted a patent in Australia and Israel. This technology can be used as a research tool for evaluating anti-human tumor immunity and identifying immunomodulating genes. Patent applications for this technology are pending in Canada, Europe, Japan, and Singapore.

U.S. Trademark 05/23/2000

U.S. Trademark Application 02/05/2009

U.S. Patent Application 11/30/2007

U.S. Patent Application 03/30/2009

World Intellectual Property Organization PCT* Application 03/30/2009


Table 1

Source: Radient Pharmaceuticals Corporation (www.onko-sure.com).

2,351,152

Filing DatePatent/Trademark/ Application No.

Type

SNAPSHOT OF INTELLECTUAL PROPERTY FOR ONKO-SURE®

* A unified procedure for filing patent applications to protect inventions in over 140 countries. A single filing results in a single search accompanied by a written opinion, after which the examination and grant procedures are handled by the relevant national or regional authorities.

PCT/US2009/038833

12/414,518

11/948,703

77/664,344


Company Leadership Management Team Table 2 summarizes Radient’s key management, followed by detailed biographies.

Douglas C. MacLellan, Chairman and Chief Executive Officer Mr. MacLellan is chairman of the Board of Directors and chief executive officer (CEO) of Radient. With over 25 years of international business management and active Board experience, Mr. MacLellan has been a catalyst for the development, growth, and success of many public and closely held businesses worldwide. Throughout his professional career, Mr. MacLellan has served on the Board of 18 separate companies, where he has had instrumental roles in strategic planning, general operations, corporate finance activities, economic policy, asset allocation, and mergers and acquisitions. In addition, he has supported the raise of over $715 million in capital financing for development, early-stage, start-up, and mid-cap companies. Mr. MacLellan has extensive business experience in the People’s Republic of China, including with the Chinese government, regulatory, and compliance system; Chinese joint ventures; and wholly foreign-owned enterprise (WFOE) structuring. Leadership roles where Mr. MacLellan has served include MacLellan Group, Inc., a closely held business incubator and financial advisory firm Mr. MacLellan founded in 1992; Board member of Edgewater Foods International, Inc. (now Ocean Smart, Inc. [OCSM-OTC]); vice chairman of the Board of AXM Pharma, Inc. (AXJ-NYSE Amex), a Chinese biopharmaceutical company; vice chairman of the Board of Asia American Telecommunications (now Metromedia China Corporation), a majority-owned subsidiary of Metromedia International Group, Inc.; co-chairman and Investment Committee member of the Strategic East European Fund; president, CEO, and director of PortaCom Wireless, Inc., a company engaged as a developer and operator of cellular and wireless telecommunications ventures in selected developing world markets; Board member and co-founder of FirstCom Corporation, an international telecommunications company that operated an access fiber and satellite network in Latin America (now AT&T Latin America); and principal and co-founder of Maroon Bells Capital Partners, Inc., a U.S.-based merchant bank specializing in corporate finance services for international and domestic telecommunications and media companies. Mr. MacLellan received advanced training in classical economic theory and international relations from the University of Southern California (USC) and was a student of Arthur Laffer, Ph.D., who later employed him as an economist. Mr. MacLellan has also authored numerous industry-specific research papers and portfolio strategy and economic forecasts over the past 25 years.

Douglas C. MacLellan Chairman and Chief Executive Officer

Akio Ariura Chief Financial Officer and Chief Operating Officer

Afsaneh Motamed-Khorasani, Ph.D. Director of Oncology

Andrea Small-Howard, Ph.D. Vice President, Scientific Oversight

Mathi Senapathi Director of Manufacturing

Christopher Gee Director of International Sales and Marketing

Gary Giarratano Director of North American Sales and Marketing



Table 2

MANAGEMENT


Akio Ariura, Chief Financial Officer and Chief Operating Officer Mr. Ariura was named chief operating officer (COO) of Radient in 2008 and continues to serve in the role of chief financial officer (CFO), a senior role Mr. Ariura has held with the Company since 2006. His experience spans over 30 years in both private and publicly held companies across various industries. In his current position, Mr. Ariura has worldwide responsibility for Radient’s business operations and finances, including special projects such as Sarbanes-Oxley Compliance, U.S. SEC filings, and project management of mergers and acquisitions. Prior to joining Radient, Mr. Ariura was vice president of Sunvest Industries, LLC, in Lake Forest, California, where he oversaw the review, development, and implementation of yearly budgets and developed internal controls for the company’s operating manufacturing entities. Mr. Ariura also served as CFO for U.S. operations for Derlan Industries, Inc., a Canadian manufacturer with subsidiaries in the U.S. Mr. Ariura holds a B.S. in business administration from USC. Dr. Afsaneh Motamed-Khorasani, Ph.D., Director of Oncology As director of oncology, Dr. Motamed-Khorasani is responsible for medical affairs for Onko-Sure®, including product research and development; collaboration with the Mayo Clinic; ongoing clinical trial work; authorship and publication of scientific white papers, articles, abstracts, posters, medical information letters, and peer-reviewed papers related to Onko-Sure® and future developed products; and representing Radient at various oncology, medical, and financial conferences, tradeshows, and events. She has tenured a diverse range of experience in medical affairs, basic and industrial research and development, clinical trials, and intellectual property. Prior to joining Radient, Dr. Motamed-Khorasani served as a senior scientist and senior medical analyst at Amgen, Inc. (AMGN -NASDAQ) , Microbix Biosystems Inc. (MBX-TSX), Samuel Lunenfeld Research Institute at Mount Sinai Hospital, Neometrix Consulting Inc., Princess Margaret Hospital, and Vancouver General Hospital. She has over 15 years of experience and national certificates in Good Laboratory Practice (GLP), Good Manufacturing Practice (GMP), International Conference on Harmonisation (ICH) Good Clinical Practice (GCP), and FDA regulatory compliance for clinical trials and is a member of professional associations that include the Endocrine Society, Iranian-American Medical Association (IAMA), Biotech and Pharma Professionals Network (BPPN), American Medical Writers Association (AMWA), and Intellectual Property Institute of Canada (IPIC). Dr. Motamed-Khorasani’s research has focused on high-throughput approaches in the context of cancer informatics with a particular interest in the use of comparative analysis for the mining of integrated oncology datasets that include protein-protein interaction and gene expression profiling. She has published and presented more than 25 peer-reviewed papers, abstracts, and articles in scientific journals, and presented at many high-profile conferences and scientific meetings. Dr. Motamed-Khorasani offered significant contribution in the field of ovarian cancer when she found two genes that may be involved in the prognosis of ovarian cancer. The results of this finding are published in the 2006 edition of Oncogene. Dr. Motamed-Khorasani received a Ph.D. in reproductive endocrinology with a focus on epithelial ovarian cancer from the University of Toronto, Canada. Andrea Small-Howard, Ph.D., Vice President, Scientific Oversight Dr. Small-Howard joined Radient in 2006 and serves as the Company’s vice president of scientific oversight. In this role, she is responsible for the oversight of Radient’s research and development functions. Prior to joining Radient, Dr. Small-Howard served as assistant researcher/research assistant professor in the Department of Cell and Molecular Biology at the John A. Burns School of Medicine at the University of Hawaii. Dr. Small-Howard earned a Ph.D. in biological sciences at USC and an A.B. (with honors) in biology from Occidental College, Los Angeles. She completed her education as a postdoctoral research fellow at the Queen’s Center for Biomedical Research at The Queen’s Medical Center, Honolulu, Hawaii. Dr. Small-Howard has been involved in research for more than 20 years, with areas of expertise that include biochemistry, molecular biology, pharmacology, and immunology. She is the author of numerous articles in peer-reviewed journals and has made presentations at national scientific meetings.


Mathi Senapathi, Director of Manufacturing Mr. Senapathi has over 18 years of diverse pharmaceutical industry experience, including roles in laboratory quality control and research, quality assurance, advanced clinical and anatomic pathology, regulatory compliance, and systems monitoring and control for GLP, GMP, and GCP as well as program monitoring for ISO 9001 and ISO 13485:2003 drug safety evaluation. Most recently, Mr. Senapathi worked as director of quality assurance at Pathogenesys LLC. In this position, Mr. Senapathi’s responsibilities included establishing and overseeing quality systems and compliance programs as they related to GLP, ISO 9001, and ISO 13485:2003. He also held the role of FDA and research compliance audit liaison. Prior to this, Mr. Senapathi was employed with Allergan, Inc. (AGN -NYSE) and Meyer Pharmaceuticals LLC, where he held positions of increasing responsibility in manufacturing, risk management, regulatory and standard operating procedure (SOP) training, assay development, validation and data collection and maintenance, and clinical trials. Mr. Senapathi holds a Master’s degree in philosophy; a Master’s degree in arts; and a B.S. in biology and chemistry from Madras University, India. In addition, he has extensive training in risk management systems and medical devices from Virginia Polytechnic Institute and State University. Christopher Gee, Director of International Sales and Marketing Mr. Gee is a technology and biotechnology industry veteran with extensive international sales, marketing, and distribution management experience. Since 2004, he has held executive positions and managed projects in the U.S., China, Hong Kong, and Taiwan, including product development, marketing, sales, and distribution partnership planning. His oversight spanned U.S. and Asian business operations and included negotiating agreements with top-tier distribution companies in Asia. Mr. Gee’s background includes three years as a senior analyst at New York University’s Stern School of Business. He has also served as principal in various start-up companies. While at Apple Inc. (AAPL-NASDAQ), he successfully managed business development and enterprise computing projects. Mr. Gee obtained a Master’s degree from King’s College, University of London, and a Bachelor’s degree from New York University. Gary Giarratano, Director of North American Sales and Marketing Mr. Giarratano is Radient’s director of North American sales and marketing, responsible for managing the Company’s sales and marketing strategy, operations, and Onko‐Sure® product sales within North America. Mr. Giarratano brings over 20 years of healthcare, sales, and marketing leadership experience to Radient. He is recognized for his contributions in new market development for carcinoembryonic antigen (CEA), prostate-specific antigen (PSA), and human papillomavirus (HPV), and has led sales for the first company to secure FDA approval for each of these assays. Throughout his career, Mr. Giarratano has gained industry experience from a variety of sales positions with both established and emerging healthcare and pharmaceutical companies, including QIAGEN N.V. (QGEN-NASDAQ), Roche Diagnostics, AutoGenomics, Inc., Sebia, Inc., Esoterix, Inc., PerkinElmer, Inc. (PKI-NYSE), and Hybritech, Inc. While each opportunity offered new challenges, Mr. Giarratano’s top priorities focused on advancing corporate growth and market share through effective and profitable sales planning, management, and program execution. Mr. Giarratano has professional industry affiliations with major healthcare companies, such as Quest Diagnostics, Laboratory Corporation of America® Holdings, Mayo Clinic, Kaiser Permanente, Metropolitan Pathologists (MetroPath), UniPath, LLC, Summit Pathology, TriCore Reference Laboratories, Intermountain Healthcare, and other regional reference laboratories. Mr. Giarratano received a B.S. in biology from the University of Southern Colorado and completed graduate work in coral reef ecology at Fairleigh Dickinson University, West Indies Laboratory, Christiansted, St. Croix, U.S. Virgin Islands. He also received a secondary education teaching certificate from Metropolitan State College in Denver, Colorado.


Board of Directors Radient’s Board of Directors oversees the conduct of and supervises the Company’s management. Table 3 provides a summary of Radient’s Board members, followed by detailed biographies.

Douglas C. MacLellan, Chairman and Chief Executive Officer Biography on page 14. Michael Boswell, MBA, Independent Director/Chairman, Audit and Compensation Committee Mr. Boswell is a co-founder of the TriPoint family of companies and co-founder and member of TriPoint Capital Advisors, LLC, a boutique merchant bank focused on small- and mid-sized growth companies. Specifically active with companies in China, Mr. Boswell provides high-level financial services and executive guidance to start-up businesses and small- to mid-sized companies. Currently, he is acting CFO and director of Ocean Smart, Inc., and a financial advisor and consultant to Tianyin Pharmaceutical Co, Inc. (TPI-NYSE) and JPAK Group Inc. (JPAK-OTC). He specializes in corporate finance, structure, and governance; mergers and acquisitions; Sarbanes-Oxley Act Section 404 compliance; SEC rules, reporting, and disclosure; Financial Accounting Standards Board (FASB) Emerging Issues Task Force issues specifically as they relate to private placements; employee option programs; and the reverse merger strategy and process. Prior to co-founding the TriPoint family of companies, Mr. Boswell held various executive positions with business development and management consulting firms. Mr. Boswell holds the Series 24, 82, and 63 licenses and is COO of TriPoint Global Equities. Mr. Boswell also spent eight years as a senior analyst and senior engineer in various branches of the U.S. government. He earned an MBA from John Hopkins University and a B.S. in mechanical engineering from the University of Maryland. William M. Thompson III, M.D., J.D., Director/Chairman, Governance Committee Dr. Thompson has been one of Radient’s directors since June 1989, chairman from 1991 to 2008, and CEO from 1992 to 1994. Dr. Thompson has practiced medicine for over 40 years in general practice, general surgery, and trauma surgery. Previously, he had practiced patent law and worked in the pharmaceutical industry in research, law, and senior management for 13 years. During his medical career, he was founding medical director of Beech Street and August Healthcare Companies in a 25-year association with the managed care (PPO) industry. Also, he served on the OSCAP Board of SCPIE, the malpractice insurance carrier, for 20 years and chaired its Claims Committee for many years. In addition, he has been involved over many years with organized medicine and with hospital medical staff management. Moreover, he was a principal architect of the paramedic and emergency medical systems of Orange County, California. He has been a member of the clinical surgical faculty at the University of California, Irvine (UCI) School of Medicine for over 30 years.

Douglas C. MacLellan Chairman and Chief Executive Officer

Michael Boswell, MBA Independent Director/Chairman, Audit and Compensation Committee

William M. Thompson III, M.D., J.D. Director/Chairman, Governance Committee

Minghui (Henry) Jia Managing Director and Co-founder of Jade Pharmaceuticals Inc.

Robert Beart, Jr., M.D. Independent Director


Table 3


BOARD OF DIRECTORS


Minghui (Henry) Jia, Managing Director and Co-founder of Jade Pharmaceuticals Inc. Mr. Jia has over 10 years of investment banking, venture capital, marketing institutional trading, and senior corporate management experience. Mr. Jia is familiar with all procedures for manufacturing and marketing with respect to the Asian pharmaceutical market and has an in-depth understanding of the industry. In recent years, Mr. Jia has helped several Chinese domestic pharmaceutical companies list and obtain financing on the Chinese stock exchange (Shenzhen) and in Hong Kong. Prior to founding Jade Capital Group Ltd and Jade Pharmaceuticals Inc., Mr. Jia served as marketing director for China Real Estate Corporation, one of the largest Chinese property corporations, between 1999 and 2003. Between 1989 and 1998, Mr. Jia served as general manager of several branches of China Resource Co. Ltd, the largest China export and import corporation. From 1987 to 1989, Mr. Jia worked for the China National Machinery import and export corporation, where he served as manager of the Import Department for Medical Instruments. In addition to his business and entrepreneurial activities, Mr. Jia is a senior editor of China Finance. Mr. Jia is fluent in Mandarin, Cantonese, English, and Vietnamese. Mr. Jia received a B.A. in economics from the University of International Business and Economics of China in 1987. Robert Beart, Jr., M.D., Independent Director Dr. Beart is an independent member of Radient’s Board of Directors. He is currently the medical director of the Glendale Memorial Hospital and Health Center’s Colorectal Surgery Institute. Previously, he had been with the USC since 1992, establishing the Division of Colorectal Surgery in the USC Department of Surgery as well as launching the USC Center for Colorectal Diseases at USC University Hospital and USC Norris Comprehensive Cancer Center. Dr. Beart is a recognized specialist in CRC diseases and cancer, and a thought leader in the medical, scientific, and research communities. His primary experience and research includes continence preservation, colostomy avoidance, and the identification and management of recurrent CRC. He has broad and deep clinical involvement in colorectal diseases, covering key areas such as CRC, chronic constipation and diarrhea, anorectal healthcare issues, diverticulitis, fecal incontinence, recurrent rectal cancer, inflammatory bowel disease, and polyps. From 1976 through 1992, Dr. Beart worked at the Mayo Clinic in Rochester, Minnesota, where he was chairman of the Department of Colorectal Surgery and pioneered ileal pouch-anal anastomosis. He is a past president of the American Society of Colon and Rectal Surgeons, the Society of Surgery of the Alimentary Tract, and the International Society of University Colorectal Surgeons. He had surgical training at the University of Colorado and the Mayo Clinic. Dr. Beart graduated from Harvard Medical School in 1971 and is board certified and recertified in general and colorectal surgery.


Core Story Radient Pharmaceuticals Corp. (“Radient” or “the Company”) is an in vitro diagnostics (IVD) company focused on developing a simple and effective non-invasive IVD test to detect and monitor up to 19 types of cancer. IVD entails testing bodily fluids and tissues for markers of diseases. As it relates to oncology, IVD tests can be used to detect cancer, monitor the effects of treatment and possible recurrence, indicate the likelihood of progression, and assist with a prognosis. A cancer marker, also called a tumor marker, serum marker, or biomarker, can be any of a number of substances expressed on cancer cells or created by the body’s immune system in response to cancer cells. These substances can appear in body tissue, blood, or urine. Onko-Sure® (formerly DR-70®) measures the accumulation of fibrin and fibrinogen degradation products (FDPs) in a patient’s serum (blood). While FDP production is highly regulated in healthy individuals, FDPs are overproduced by cancer cells, even in the early stages of the disease before symptoms are present. Onko-Sure® is cleared for monitoring patients who have been previously diagnosed with colorectal cancer (CRC) in the U.S. and for the monitoring and detection of lung cancer in Canada. As well, the Company is cleared to market Onko-Sure® in Europe, various countries in Asia, and Australia as a general cancer screen. In the U.S., Onko-Sure® is also offered as a general cancer screen through two partnerships under a Clinical Laboratory Improvement Amendments (CLIA) waiver. Radient is focused on gaining further clearance for Onko-Sure® in the U.S. and abroad for additional cancer indications. Recently, the Company has repositioned its various business segments to focus solely on being an IVD company, a strategy Radient expects could enable it to monetize the value of some of its assets—including 98% ownership in a China-based pharmaceuticals business, Jade Pharmaceuticals Inc., and a proprietary cancer vaccine therapy technology—through new partnerships, separate initial public offerings (IPOs), or possible sales. LIMITATIONS OF CURRENT CANCER DIAGNOSTICS Although significant improvements in cancer diagnostics have been made in recent years and various therapies have been developed to treat the disease, cancer continues to be a leading healthcare challenge worldwide. In the U.S., there are nearly 570,000 cancer-related deaths expected in 2010 (representing over 1,500 fatalities per day), making cancer the second leading cause of death in the U.S. following cardiovascular disease (Source: the U.S. Centers for Disease Control and Prevention [CDC]). Globally, the incidence of cancer is forecast to increase approximately 69% to 21 million by 2030, with related annual deaths increasing from 7.6 million in 2008 to 13 million by 2030 (Source: the BMJ [British Medical Journal], June 2010). Contributing to this challenge are the limitations associated with existing diagnostics, in particular IVD, including those listed below. Currently available tumor markers are not 100% specific to a particular type of cancer, indicating that

other, non-cancerous conditions can also cause an increase in certain cancer markers. Many IVD tests are restricted to only certain cancers. The same marker is not always expressed on every patient’s cancer, even if it is related to the same

organ. The detection of “normal” levels of a cancer marker can be ambiguous as certain patients express

relatively normal levels of known cancer markers in the early stages of cancer, thereby evading detection from current screens until the disease is more advanced.


Cancer testing is dominated by serum-based cancer markers, including carcinoembryonic antigen (CEA), prostate-specific antigen (PSA), CA-125, and bladder tumor antigen (BTA), among others. Table 4 lists several common cancer markers, their specific target, and associated data. A more complete marker list is available on the American Cancer Society’s (ACS) website at www.cancer.org.

An Unmet Need for Improved Detection A considerable portion of cancer-related morbidity and mortality is caused by tumor metastases, suggesting that patients who are able to catch their cancer or cancer recurrences early—before they spread—may have a better outcome. When cancer is detected early on, there are often more treatment options available and survival rates are generally higher since the cancer can often be contained and eliminated before it has spread to other organs. It is estimated that anywhere from 3% to 35% of premature cancer-related deaths could be avoided through early and effective screening (Source: GenWay Biotech, Inc.’s www.youtestyou.com). Many common forms of cancer (e.g., prostate, breast, colon, and lung cancer) develop in organs that, if necessary, can be completely or partially removed by surgery. Although removing such organs has negative effects, these procedures may be able to cure patients if the cancer has not spread. When cancer cannot be fully eliminated through surgery, patients may receive radiation or chemotherapy—two treatments that are associated with significant side effects, including immunosuppression, anemia, vomiting, hair loss, fatigue, decreased blood cell counts, infertility, and damage to the heart, lungs, nerves, kidneys, or reproductive organs. Later-stage tumors may also cause many serious consequences, particularly if they spread to an essential part of the body, such as the brain. Onko-Sure® is a non-invasive blood test designed to improve the detection and monitoring of up to 19 tumor types. Table 5 (page 21) summarizes current screening methodologies for many of Radient’s targeted indications based on standards for early cancer detection created by the ACS, National Cancer Institute (NCI), American Society of Clinical Oncologists (ASCO), and American Association of Family Practice (AAFP).

Cancer Marker Indication Related Data

Alpha-Fetoprotein (AFP) Liver Cancer Only ~60% of HCC patients have elevated AFP.

Carcinoembryonic Antigen (CEA)*

Tissue polypeptide antigen (TPA)

Cancer Antigen (CA)-125 Ovarian Cancer

Cancer Antigen (CA) 15-3 Breast Cancer

Only ~3 of 100 women with elevated CA-125 have ovarian cancer, and ~20% of women with the cancer never have detectable CA-125.

CA 15-3 is elevated in <10% of women with early breast cancer and in ~70% of women with advanced disease. Also, 25% to 30% of women with advanced breast cancer have tumors that do not shed CA 15-3.

Sources: MedicineNet, Inc., NCI, WebMD, Inc., MedlinePlus, and Crystal Research Associates, LLC.

Table 4

A SNAPSHOT OF CURRENTLY AVAILABLE MARKERS TO MONITOR SELECT CANCER TYPES

Colon, Rectal, Pancreas, Breast, Ovary, or Lung Cancers

CEA's sensitivity and specificity varies depending on the indication and whether CEA is combined with another marker.

Lung, Bladder, Breast, and Other Cancers

TPA has a 70% to 90% sensitivity for Stage IV breast cancer and ~70% for lung cancer.

* It is important to note that, like Onko-Sure ®, CEA is not used to diagnose or screen for CRC. However, the CEA test is a preferred test to help predict outlook in patients with CRC.


Table 6 (page 22) depicts the ACS’s current estimates, delineated by cancer type and patient gender, of new diagnoses and annual deaths from common cancers. As well, it highlights tumor types that are suitable for screening with Onko-Sure®. Following Table 6, page 23 overviews the need for improved CRC and lung cancer monitoring options—two of the principal cancer types that Radient seeks to address through the use of Onko-Sure®.

Blood Based Non-blood Based

Brain

Breast 40 and over Monthly SBE, Annual CBE

Annual mammogram

Cervical 21 and over Annual PE Annual PAP test or every 3 years PAP plus HPV DNA testing

Colorectal 50 and over Annual DRE FSIG or CT every 5 years or colonoscopy every 10 years

Annual FOBT or FIT

Esophageal

Gastrointestinal

Liver

Lung 40 and over Smokers only: annual chest x-ray

Smokers only: annual sputum cytology

Non-hodgkins Lymphoma

Oral

Ovarian Annual PE

Pancreatic

*Based on guidelines published by the ACS, NCI, ASCO, and AAFP in patients without special high-risk factors.

Table 5

DRE = Digital Rectal Exam; PE = Pelvic Exam; SBE = Self Breast Exam; CBE = Clinical Breast Exam; FSIG = Flexible Sigmoidoscopy; CT = Computerized Tomography; FOBT = Fecal Occult Blood Test (blood in stool); FIT = Fecal Immunochemical Test; PAP = Papanicolaou Test; HPV = Human Papillomavirus

Source: GenWay Biotech, Inc.'s www.youtestyou.com.

ImagingPhysical ExamAgeCancers by Type IVD Testing

GENERALLY ACCEPTED* SCREENING METHODOLOGIES BASED ON CANCER TYPE


Both Sexes Male Female Both Sexes Male Female

All Sites 1,529,560 789,620 739,940 569,490 299,200 270,290

Oral cavity & pharynx 36,540 25,420 11,120 7,880 5,430 2,450

Tongue 10,990 7,690 3,300 1,990 1,300 690

Mouth 10,840 6,430 4,410 1,830 1,140 690

Pharynx 12,660 9,880 2,780 2,410 1,730 680

Other oral cavity 2,050 1,420 630 1,650 1,260 390

Digestive system 274,330 148,540 125,790 139,580 79,010 60,570

Esophagus 16,640 13,130 3,510 14,500 11,650 2,850

Stomach 21,000 12,730 8,270 10,570 6,350 4,220

Small intestine 6,960 3,680 3,280 1,100 610 490

Colon† 102,900 49,470 53,430 51,370 26,580 24,790

Rectum 39,670 22,620 17,050

Anus, anal canal, & anorectum 5,260 2,000 3,260 720 280 440

Liver & intrahepatic bile duct 24,120 17,430 6,690 18,910 12,720 6,190

Gallbladder & other biliary 9,760 4,450 5,310 3,320 1,240 2,080

Pancreas 43,140 21,370 21,770 36,800 18,770 18,030

Other digestive organs 4,880 1,660 3,220 2,290 810 1,480

Respiratory system 240,610 130,600 110,010 161,670 89,550 72,120

Larynx 12,720 10,110 2,610 3,600 2,870 730

Lung & bronchus 222,520 116,750 105,770 157,300 86,220 71,080

Other respiratory organs 5,370 3,740 1,630 770 460 310

Bones & joints 2,650 1,530 1,120 1,460 830 630

Soft tissue (including heart) 10,520 5,680 4,840 3,920 2,020 1,900

Skin (excluding basal & squamous) 74,010 42,610 31,400 11,790 7,910 3,880

Melanoma-skin 68,130 38,870 29,260 8,700 5,670 3,030

Other nonepithelial skin 5,880 3,740 2,140 3,090 2,240 850

Breast 209,060 1,970 207,090 40,230 390 39,840

Genital system 311,210 227,460 83,750 60,420 32,710 27,710

Uterine cervix 12,200 12,200 4,210 4,210

Uterine corpus 43,470 43,470 7,950 7,950

Ovary 21,880 21,880 13,850 13,850

Vulva 3,900 3,900 920 920

Vagina & other genital, female 2,300 2,300 780 780

Prostate 217,730 217,730 32,050 32,050

Testis 8,480 8,480 350 350

Penis & other genital, male 1,250 1,250 310 310

Urinary system 131,260 89,620 41,640 28,550 19,110 9,440

Urinary bladder 70,530 52,760 17,770 14,680 10,410 4,270

Kidney & renal pelvis 58,240 35,370 22,870 13,040 8,210 4,830

Ureter & other urinary organs 2,490 1,490 1,000 830 490 340

Eye & orbit 2,480 1,240 1,240 230 120 110

Brain & other nervous system 22,020 11,980 10,040 13,140 7,420 5,720

Endocrine system 46,930 11,890 35,040 2,570 1,140 1,430

Thyroid 44,670 10,740 33,930 1,690 730 960

Other endocrine 2,260 1,150 1,110 880 410 470

Lymphoma 74,030 40,050 33,980 21,530 11,450 10,080

Hodgkin lymphoma 8,490 4,670 3,820 1,320 740 580

Non-Hodgkin lymphoma 65,540 35,380 30,160 20,210 10,710 9,500

Myeloma 20,180 11,170 9,010 10,650 5,760 4,890

Leukemia 43,050 24,690 18,360 21,840 12,660 9,180

Acute lymphocytic leukemia 5,330 3,150 2,180 1,420 790 630

Chronic lymphocytic leukemia 14,990 8,870 6,120 4,390 2,650 1,740

Acute myeloid leukemia 12,330 6,590 5,740 8,950 5,280 3,670

Chronic myeloid leukemia 4,870 2,800 2,070 440 190 250

Other leukemia‡ 5,530 3,280 2,250 6,640 3,750 2,890

Other & unspecified primary sites‡ 30,680 15,170 15,510 44,030 23,690 20,340

Note: Estimated new cases are based on 1995-2006 incidence rates from 44 states and the District of Columbia as reported by the North American Association of Central Cancer Registries, representing about 89% of the U.S. population. Estimated deaths are based on data from U.S. Mortality Data, 1969 to 2007, National Center for Health Statistics, CDC, 2010.

Source: American Cancer Society, Inc., Surveillance and Health Policy Research, 2010.

Table 6

ESTIMATED NEW CANCER CASES AND DEATHS BY SEX, U.S., 2010*

Estimated New Cases Estimated Deaths

* Rounded to the nearest 10; estimated new cases exclude basal and squamous cell skin cancers and in situ carcinomas except urinary bladder. About 54,010 female carcinoma in situ of the breast and 46,770 melanoma in situ will be newly diagnosed in 2010. † Estimated deaths for colon and rectum cancers are combined. ‡ More deaths than cases may reflect lack of specificity in recording underlying cause of death on death certificates or an undercount in the case estimate.


Colorectal and Lung Cancers While advances in early detection have improved the prognosis of many cancers, the Company believes that both CRC and lung cancer are still characterized by inadequate screening methods. For example, despite the carcinoembryonic antigen (CEA) test being in use since the early 1980s to detect CRC, only 40% of CRC patients between 1996 and 2004 were diagnosed when their tumors were still localized (i.e., at an early stage). Lung cancer claims more lives than colon, breast, and prostate cancers combined (accounting for approximately 28% of all cancer deaths [Source: ACS]); yet Radient believes that there is no effective lung cancer screen on the market today. CRC is the third most common cancer in both men and women and is expected to cause 9% of all cancer-related deaths in 2010 (Source: the ACS’s Cancer Facts & Figures 2010). Radient believes that its Onko-Sure® test kit may offer significant advantages over the traditional CRC screen—CEA tests (described in greater detail on pages 29-30). Onko-Sure® has been developed to identify CRC at an earlier stage than CEA, having demonstrated that it can detect this tumor type at Stage I, which is associated with a considerably higher likelihood of survival than at later stages (as listed in Table 7). Radient’s Onko-Sure® test has been cleared by the U.S. Food and Drug Administration (FDA) for use in the U.S. to monitor patients who have been previously diagnosed with CRC. Lung cancer is the leading cause of cancer death for both men and women, which is believed to be due to the lack of early detection methods. By the time of diagnosis, only approximately 15% of lung cancer patients have tumors that are still at an early, localized stage. For these patients, the five-year survival rate is 53% versus only 16% when more advanced tumors are also included (Source: Cancer Facts & Figures 2010). As such, lung cancer is an indication targeted by Onko-Sure®, and Onko-Sure® is presently cleared in Canada for this tumor type. An Expanding Market Requiring Consistent Monitoring In the U.S., nearly one out of two men and roughly one out of three women develop cancer in their lifetime (Source: Cancer Facts & Figures 2010). In 2010 alone, the ACS estimates that over 1.5 million new cases of cancer will likely be diagnosed in the U.S. Over the next 20 years, the global incidence of cancer is projected to increase by 50% (Source: the World Health Organization [WHO]). With global sales of over $47 billion, oncology is considered to be one of the largest, fastest growing markets in the pharmaceutical sector (Source: Business Insights’ The Cancer Market Outlook to 2014, December 2009). Moreover, the oncology field was forecast to surpass $78 billion by 2010 (Source: RNCOS, an industry research firm, 2009). Enhanced tumor detection may be able to substantially reduce the billions of dollars spent on cancer treatment each year. In the U.S. during 2010, the overall costs of cancer were estimated at $263.8 billion, comprising the following: $102.8 billion for direct medical costs (total of all health expenditures); $20.9 billion for indirect morbidity costs (cost of lost productivity due to illness); and $140.1 billion for indirect mortality costs (cost of lost productivity due to premature death) (Source: the National Institutes of Health [NIH]). As a result of rising healthcare costs, there may be greater demand for more cost-effective approaches to disease management, specifically for cancer, as well as increased emphasis on screening and accurate diagnostic testing to facilitate improved detection of potentially very costly, severe afflictions. Radient believes that it is well positioned to capitalize on the IVD market for oncology with its Onko-Sure® test kit, specifically benefitting from the following growth factors listed below and on page 24: demographic shifts due to an aging population; technological innovation;

0 > 92%

I 80 to 95%

II 55 to 80%

III 33 to 55%

IV < 15%

5-year Survival Rate

Stage

Source: the NCI's Surveillance, Epidemiology, and End Results (SEER) Database, 2007.

SURVIVAL RATES FOR CRC BY STAGE

Table 7


reimbursement, third-party payers, and financing for companies developing diagnostics; government funding for basic and disease-related research; biotechnology and pharmaceutical companies’ research and development spending; and an increased focus on lowering healthcare spending via improved diagnostic testing and patient

monitoring that can reduce the costs of misdiagnosis and ineffective treatment. In addition, as the prevalence of high-risk behaviors or characteristics increase (e.g., smoking, age, and a family history of cancer), the number of people who are recommended to have a general cancer screen or who are diagnosed with cancer and require subsequent monitoring will likely also increase. For example, male smokers are approximately 23 times more likely to develop lung cancer than non-smokers (Source: ACS). While risk factors for cancer are known to include tobacco and alcohol use, diet, obesity, and sun exposure, one of the most significant factors to developing cancer is age. To this extent, approximately 78% of all cancers are diagnosed in individuals 55 years and older (Source: Cancer Facts & Figures 2010). In developed countries, the number of individuals over 60 years old exceeded the number of children under 15 years old for the first time in 1998. The effects of the aging population are expected to be seen globally (in developing countries as well as developed nations) by 2047, with nearly two billion older persons expected to be alive by 2050. In comparison, there were only 700 million people over 60 alive in 2006 (Source: World Population Ageing 2007 from the United Nations’ Department of Economic and Social Affairs, Population Division). ONKO-SURE®: A TEST KIT FOR VARIOUS CANCERS

Radient’s Onko-Sure® test kit (formerly DR-70®) is a non-invasive IVD blood test that may facilitate the detection and monitoring of up to 19 cancer types, including those listed in Table 8. Onko-Sure® can be used for several different purposes in the clinic: (1) to pre-screen patients for cancer; (2) to monitor the treatment strategy for cancer; or (3) to monitor for cancer recurrence in patients who were previously treated for cancer. Onko-Sure® is cleared as a monitoring tool for previously diagnosed CRC patients in the U.S., as a lung cancer tumor marker in Canada, and as a general cancer screen in Europe and other countries worldwide.

Onko-Sure® is currently sold in the form of a 96-well test plate. Of the 96 wells, 14 are used as “standard wells” for accuracy measures. The remaining 82 wells can be used in one of two ways: (1) to test 41 individual patients in duplicate (as a “fail-safe” measure); or (2) to test up to 82 individual patients in a single format. Typically, these tests are performed in a clinical reference laboratory, with test results obtained using a tool to analyze microtiter readings and sent to the attending physician for further review. Patients often receive results three to five days after the blood draw. Presently, Radient sells the full kit in a distributor sales model. In July 2009, Radient changed the brand name of its IVD cancer test from “DR-70®” to “Onko-Sure®,” which the Company believes is more consumer friendly and more accurately represents the product as a high-quality, innovative consumer cancer detection test.

▪ Bladder ▪ Colon ▪ Hematological ▪ Ovarian ▪ Thyroid

▪ Brain ▪ Esophageal ▪ Hepatocellular (Liver) ▪ Pancreatic ▪ Tongue

▪ Breast ▪ Gastrointestinal ▪ Lung ▪ Prostate ▪ Trophoblast

▪ Cervical (Stomach) ▪ Malignant Lymphoma ▪ Rectal ▪ Uterine

CANCER TYPES SCREENED FOR BY ONKO-SURE®


Table 8



How Onko-Sure® Works Onko-Sure® determines the presence of various cancers by using a polyclonal antibody (DR-70) as a tumor marker to measure the accumulation of specific breakdown products called fibrin and fibrinogen degradation products (FDPs) in a patient’s serum. While FDP production is highly regulated in healthy individuals, FDPs are overproduced by cancer cells, which release protease (protein-cleaving) enzymes such as plasmin and thrombin. Levels of FDPs are often higher in cancer patients as FDP is both a byproduct of cancer-related processes and is overproduced by enzymes released from tumor cells. When cancer is present, FDP levels are increased in the body above the normal level, even in the early stages when the symptoms usually are not visible. As illustrated in Figure 2, cancer causes a dramatic increase in protease activator molecules, which are released by tumor cells and activate the protease enzymes to break down extracellular molecules. These proteases, such as plasmin, cleave fibrinogen and fibrin to form FDPs. Radient estimates that FDP levels can be up to 38 times higher in the blood of cancer patients versus non-cancer patients. Onko-Sure® measures the FDP levels that are freely diffusible in the blood. Radient believes that competing tests—which detect a restricted antigen or antigen pool—may underestimate the levels of FDPs in the blood of cancer patients. Traditional FDP assays typically measure a specific FDP component that is believed to be representative of the group, such as D-dimer. In contrast, the Onko-Sure® test kit detects the full complement of FDPs, including a novel Initial Plasmin Degradation Product (IPDP) cancer-related breakdown product. IPDP is defined and included in the Company’s patents based on its specific molecular weight characteristics in non-denaturing SDS-PAGE analysis as well as through amino acid sequencing analyses. As well, because the Onko-Sure® blood test is non-invasive, there are no side effects associated with administering the test.

To monitor cancer patients with Onko-Sure®, physicians take an initial measurement to establish a patient-specific, post-operative baseline. In CRC patients, subsequent measurements showing an increase of 15% or more from the baseline are considered to be significant for cancer progression. Other cancers may have a higher or lower significant percentage relative to clinically significant changes. It is important to note that a positive result from an Onko-Sure® test does not necessarily indicate the presence of cancer. Acute infections, autoimmune disorders, thrombotic disease or trauma may contribute to temporarily high levels of the marker used in Onko-Sure®. If the test results are positive, a patient undergoes follow-up tests (e.g., imaging or biopsy) to determine if, in fact, a tumor is present and, if so, the type and stage of the cancer. Once these variables are determined, the physician can establish an appropriate treatment course for the patient.

HOW ONKO-SURE® WORKS


Figure 2


Cancer CellProducts Activators Un-Activated

Enzymes

Activated Enzymes

Fibrinogen or Fibrin

D-Dimer

IPDPFDP

Activated Enzymes Cleave Fibrinogen or

FibrinD

E Y


Additionally, in some cases, a patient may have cancer and receive a negative Onko-Sure® result, which could occur during chemotherapy. As such, it is important to regularly monitor patients. Radient believes that the relatively low cost of the Onko-Sure® test kit allows high-risk individuals, such as those who smoke or have a family history of cancer, to be tested with Onko-Sure® on a regular basis. Regulatory Clearances Onko-Sure® is cleared for various diagnostic purposes worldwide. Internationally, Onko-Sure® has received regulatory clearance as a general cancer marker in Australia, Europe (CE Mark), India, Taiwan and Vietnam. In addition, the Canadian federal health department (Health Canada) has cleared Onko-Sure® as a means to detect and monitor lung cancer in Canada. In South Korea, Onko-Sure® is cleared for use in CRC patients. In the U.S., the FDA has cleared Onko-Sure® for monitoring treatment and/or recurrence in patients who have been previously diagnosed with CRC. To Radient’s knowledge, Onko-Sure® is the only test in the U.S. to be cleared for monitoring CRC in over 25 years (since the introduction of the CEA test in 1982). As well, the Company believes that Onko-Sure® is the only blood test cleared for the detection and monitoring of lung cancer as well as the only test cleared as a general cancer screen. Radient’s subsidiary, AMDL Diagnostics Inc. (ADI), plans to apply for additional clearances in the U.S. and internationally. Clinical Trial Results To date, Onko-Sure® has been evaluated in nearly 7,500 patients. Published literature to date supports the utility of Onko-Sure® in colon, rectal, cervical, uterine, breast, ovarian, esophageal, tongue, gastrointestinal, thyroid, bladder, pancreatic, liver, brain, hematological, and lung cancers. In total, the published studies describe the detection of up to 16 cancer types. Although the numbers of patients representing several cancer types—including lymphoma, trophoblast, and prostate cancers—were not statistically significant, overall, Radient believes that the clinical evidence obtained to date supports the broad utility of Onko-Sure® as a cancer screening test. Colorectal Cancer (CRC) There are 11 journal publications covering a total of 5,519 patients that directly/indirectly support the use of Onko-Sure® in CRC detection and monitoring. Independent studies performed in the U.S. and Germany using Onko-Sure® showed that the serum FDP levels of CRC patients were significantly higher than in control groups of healthy individuals. At a serum FDP cutoff level of 1 µg/ml, Onko-Sure® demonstrated 99% and 88% sensitivity and specificity in the German and U.S. studies, respectively. The sensitivity levels of Onko-Sure® were 70% in the German study and 71% in the U.S. study (Source: Analytical Letters 2004, 37[14]:2965-2976). Sensitivity and specificity are measures of tumor marker accuracy. Sensitivity is the ability of a test to detect cancer. Thus, if each person who actually has cancer tests positive with a particular test, the test’s sensitivity would be 100%. Specificity measures how well the test detects cancer (i.e., whether it identifies patients who have cancer when they do not). If a test does not return any false positives, it has 100% specificity. Onko-Sure® has also recently been evaluated against current monitoring techniques. In a study of 113 CRC monitoring patients, Onko-Sure® had 12% to 100% greater positive concordance rates (i.e., ability to monitor patients) than CEA in patients with low CEA values (Source: Journal of Immunoassay and Immunochemistry, April 2010, 31[2]:131-147). Lung Cancer There are nine journal publications evaluating a total of 1,271 patients, which directly/indirectly support the utility of Onko-Sure® in lung cancer detection and monitoring. A multicenter study in the U.S. and China investigated the utility of Onko-Sure® to detect lung cancer using 393 healthy subjects and 203 lung cancer patients. In the Chinese study, 87% sensitivity was obtained using a 95% specificity requirement. In the U.S., a 96% specificity requirement resulted in 85% sensitivity. As well, the


researchers reported that patients with pneumonia, lung infection, burns, trauma due to surgery, arthritis, renal failure, and sepsis, among others, should not take the Onko-Sure® test as these conditions may lead to false positive results (Source: Analytical Letters 1999, 32[7]:1351-1362). Ovarian Cancer Twelve journal publications spanning 734 patients directly/indirectly support the use of Onko-Sure® in ovarian cancer. The immunoassay has also been evaluated against current diagnostic tests used in ovarian cancer patients. In a study comparing Radient’s IVD cancer test to CA-125, a tumor marker for the detection of ovarian cancer, Onko-Sure® demonstrated sensitivity and specificity levels that compared favorably to those measured with CA-125 in ovarian cancer patients (Source: German Journal of Obstetrics and Gynecology 2006, 66[1]:68-75). Tongue Cancer There is one journal publication covering 134 patients that directly supports the use of Onko-Sure® in tongue cancer. Researchers have studied Onko-Sure® in tongue cancer. In the study, 39 of 52 tongue cancer patients (75%) had results above 6 mg/L (75%) versus 3 of 40 healthy controls (7%) and 4 of 42 individuals with benign tumors (10%) (Source: British Journal of Oral and Maxillofacial Surgery 2005, 43:513-515). Multiple Cancer Types Onko-Sure® has also been tested for its ability to serve as a general cancer screen. There are 47 journal publications spanning 2,162 patients that directly/indirectly support the use of Onko-Sure® in multiple cancers, including gastrointestinal, liver, pancreatic, bladder, brain, cervical, uterine, esophageal, hematological, prostate, breast, thyroid, lymphoma, and trophoblast cancers. A clinical study evaluating the immunoassay’s ability to detect 13 cancer types was performed in 277 healthy individuals and 136 cancer patients. Results showed that Onko-Sure® was able to detect cancers with high specificity and sensitivity. Using 95% specificity, the assay’s sensitivity was 87.8%, 92.6%, 65.2%, and 66.7% for lung, stomach, breast, and rectal cancers, respectively (Source: Journal of Immunoassay & Immunochemistry 1998, 19[1]:63-72). In a study of 85 cancer patients—including 30 colorectal, 19 hepatocellular, 10 cholangiocellular carcinoma, 13 pancreatic, 10 stomach, and 3 esophageal cancer patients—and 100 healthy blood donors, analysis revealed <0.7 lg/mL as the optimal cut-off value to distinguish between patients with cancer and healthy controls. Using this cut-off value, Onko-Sure® showed a sensitivity of 91% and a specificity of 93%, indicating that it may be a useful test to detect cancer in clinical practice (Source: Alimentary Pharmacology & Therapeutics, August 2004, 20:983-987). The potential of Onko-Sure® to screen for malignant tumors was also evaluated in a study of 4,169 subjects. Mean Onko-Sure® values were significantly higher in the cancer group, including thyroidal, gastric, breast, hepatic, and ovarian cancers versus the control group. The specificity and sensitivity of Radient’s immunoassay was particularly elevated in breast, gastric, and thyroidal cancer patients (Source: Official Journal of the Korean Association of Immunologists, March 2006, 6[1]:43-50). The investigators of the study noted that further analysis on a large quantity of cancer patients would be necessary to determine how Onko-Sure® levels adjust depending on a tumor’s differentiation grade and postoperative prognosis. Table 9 (page 28) summarizes the data collected from clinical trials using Onko-Sure® to detect or monitor various cancer types, highlighting the product’s average sensitivity and specificity for each cancer type.


Onko-Sure® Provides Significant Advantages over Available Detection and Monitoring Options Radient believes that Onko-Sure® has several advantages over tests that are currently available, including other FDP tests and D-dimer tests, which only measure one or two of the selected FDPs and may not provide an accurate depiction of the total FDP produced by a cancer cell. As illustrated in Figure 3, cancer causes elevated levels of both urokinase-type plasminogen activator (u-PA) and tissue factor (TF)—two pathways that affect the production of FDP in cancer cells. Different FDP types are produced by cancer cells depending upon which substrate is digested by plasmin. The u-PA pathway (identified as “1A” and “1B” in Figure 3) activates plasmin by transforming the inactive precursor of plasmin, called plasminogen, into functional plasmin. The TF pathway (labeled “2” in Figure 3) leads to the activation of thrombin (“3”), which converts fibrinogen to fibrin. When fibrinogen is the substrate for plasmin (“4”), fragments D and E are the resulting FDPs (with fragments X and Y as intermediate products). When fibrin is the substrate of plasmin (“5”), the end product is D-dimer.

* A normalized average was used when reporting multiple papers.

ONKO-SURE® CLINICAL TRIAL RESULTS


Table 9

Cancer Type Effectiveness

Specificity*Sensitivity*


Breast

Tongue

Colorectal

Ovarian

Pancreatic

95.0%

92.5%

93.4%

95.0%

100.0%

65.2%

73.0%

75.6%

80.0%

84.0%

Lung

Stomach

Liver

92.0%

95.0%

96.7%

85.5%

92.0%

96.5%

CANCER ELEVATES FDP LEVELS THROUGH TWO PATHWAYS

Figure 3

Source: Journal of Immunoassay and Immunochemistry, April 2010, 31(2):131-147.


Because the balance between the two pathways may change as cancer progresses, it is important to capture and measure all FDPs from both pathways. Tests that measure only one FDP (e.g., D-dimer tests) may underestimate the patient’s FDP levels. In contrast, Onko-Sure® measures the FDPs regardless of the pathway and substrate digested by plasmin. As well, the D-dimer test, which is approved for monitoring diseases and conditions that cause blood clotting, is not cleared for marketing as a tool to detect or monitor cancer. Onko-Sure® as a Colorectal Cancer Treatment and/or Recurrence Monitoring Tool CRC is a disease in which cancer cells are found in the colon or rectum. Typically, CRC begins as a polyp (a small growth of tissue) inside the colon or rectum. Over time, these cells develop and can eventually transform from a tissue growth to a tumor. Treatment for CRC is most effective when the disease is diagnosed in the early stages. CRC is most frequently detected by diagnostic and screening procedures, such as a sigmoidoscopy or colonoscopy, where a physician looks for polyps or signs of cancer. If a polyp is deemed cancerous, surgery is recommended to remove the tumor. Radiation therapy, chemotherapy, and targeted pharmaceutical therapies may also be used in combination or sequentially, depending on the stage of cancer. Following treatment for CRC, patients are monitored regularly to evaluate the efficacy of the surgery or therapy and to check for potential disease recurrence. In 2008, the FDA cleared Radient’s Onko-Sure® assay to monitor post-surgical CRC patients for cancer recurrence. Radient believes that monitoring CRC patients who have had a surgical procedure to remove the tumor is an important aspect of a post-surgical treatment plan. The FDA also cleared Onko-Sure® as a tool to monitor CRC patients during treatment with adjuvant therapies to evaluate the therapy’s efficacy. An overview of available options, including Onko-Sure®, to monitor the effectiveness of CRC treatment as well as potential disease recurrence is provided in Table 10.

Onko-Sure® Versus CEA Radient believes that Onko-Sure® provides significant advantages over available monitoring technologies for CRC, including the CEA test. CEA is a protein that is typically found in the tissues of a baby developing in the womb. After birth, CEA levels decline significantly or even return to zero. In adults, an abnormal amount of CEA can serve as an indicator for some cancers; however, measuring CEA levels may not be an entirely accurate method for diagnosing cancer as high levels can be found in people without cancer, including heavy smokers and individuals with inflammatory bowel diseases, diverticulitis, or pancreatitis, among other conditions (Source: MedlinePlus, a service of the U.S. National Library of Medicine and the NIH). Additionally, as an adhesion molecule, CEA is only released into the blood when it is produced in higher levels and thus is not detectable at lower amounts of the tumor marker. For this reason, the CEA test’s most accurate use is how well a patient is responding to cancer treatment.

* A combination of these monitoring techniques is recommended for CRC patients.

Table 10


A simple blood test that detects a change in the levels of FDPs in the bloodstream to determine the progression of CRC.

A blood test used to measure the CEA level in a patient previously diagnosed with CRC.

A digital rectal exam and related physical inspections performed in a physician’s office.

Detailed photos taken of areas inside a patient’s body from different angles to determine cancer status.

A procedure where a physician injects gadolinium into a CRC patient through a vein. A physician then uses a magnet, radiowaves, and a computer to photograph the patient’s colon to determine the presence of cancer.

A procedure where a portion of a suspected tumor is removed and analyzed to determine if the sample contains identifiable cancer cells.

Magnetic Resonance Imaging (MRI) Exam

Onko-Sure®

CEA

Physical Exam

Computed Tomography (CT) Scan

Biopsy

MONITORING OPTIONS* FOR CRC PATIENTS


It is important to note that while CEA can identify CRC recurrence at higher stages, Radient believes that Onko-Sure® may detect the disease in earlier stages and with lower concentrations of the DR-70 tumor marker, which can have a significant impact on a patient’s prognosis and likelihood of survival. To this extent, the five-year survival rate for patients with Stage I CRC is between 80% and 95% versus individuals diagnosed with Stage III CRC, which have a 33% to 55% rate of survival. Radient further believes that CEA may not be the most suitable target for a blood test as the antigen is often firmly attached to cancer cells as a result of its role as an adhesion molecule. In contrast, the FDP antigen targeted by Onko-Sure® is freely diffusible in the blood. In early CRC stages—before the cancer has spread beyond the muscular wall of the colon to the lymph nodes—it is estimated that 68% to 97% of biopsy-positive patients have negative CEA values and cannot be monitored with CEA (Source: Journal of Immunoassay and Immunochemistry, April 2010, 31[2]:131-147). In patients with low CEA values (e.g., below 30), Radient reports that Onko-Sure® is more effective at detecting CRC recurrence than CEA (as referenced on page 26). Approximately 50% of biopsy-positive CRC patients are believed to have low CEA values (Source: Journal of Immunoassay and Immunochemistry, April 2010, 31[2]:131-147). As such, the Company believes that Onko-Sure® could add significant clinical value to the monitoring of CRC patients. Researchers have compared the concordance rates (i.e., ability to monitor patients) for monitoring CRC patients using CEA or Onko-Sure® in a U.S.-based study where patients were grouped based on their CEA values. As shown in Figure 4, Onko-Sure® showed increased positive concordance relative to CEA in CRC patients with CEA values less than 30 and equivalent positive concordance for individuals with CEA values greater than 30. As well, negative concordance rates were also equivalent.

Manufacturing, Marketing, and Distribution Radient’s manufacturing facility for Onko-Sure® is located in Tustin, California, and meets Good Manufacturing Practice (GMP) and International Organization for Standardization (ISO) 13485:2003 standards. The Company sells Onko-Sure® to third-party distributors, which then sell directly to CLIA-certified reference laboratories in the U.S. as well as clinical reference, hospital, and physician-operated laboratories worldwide. Radient also reaches other international markets through distribution agreements.

A COMPARISON OF POSITIVE CONCORDANCE RATES FOR MONITORING CRC PATIENTS USING ONKO-

SURE® OR CEA WHEN THE PATIENTS ARE GROUPED BASED ON THEIR CEA VALUES


Figure 4



Clinical Laboratory Improvement Amendments (CLIA)-Certified Testing In 1988, the U.S. Congress passed CLIA to establish quality standards for laboratory testing. These amendments are designed to ensure that test results are delivered to patients in an accurate, reliable and timely manner, regardless of where the test is administered. Laboratories working under the program are regulated and are responsible for the costs of tests administered under a CLIA waiver, which is authorized by the FDA if a product meets certain requirements established by the statute. A product typically qualifies for a CLIA waiver if it is approved explicitly in the regulation or if it meets one of the following three requirements: (1) it is a simple laboratory examination or procedure that is cleared by the FDA for home use; (2) it employs methodologies that are simple and accurate as to render the likelihood of erroneous

results negligible; or (3) it poses no reasonable risk of harm to the patient if the test is performed incorrectly. In mid-2010, Radient expanded its global commercialization strategy for Onko-Sure® to include CLIA laboratory testing services in the U.S. and Canada through corporate partnerships established through its U.S.-based subsidiary, AMDL Diagnostics Inc. (ADI). In May 2010, ADI signed a collaboration agreement with Provista Life Sciences, a diagnostics development and commercialization firm, under which Provista Life Sciences is providing CLIA laboratory support services to Radient, including supporting ongoing product development for Onko-Sure® and securing insurance reimbursement, among other initiatives, and potentially running a similar test to GenWay’s You Test You™ program. ADI also works with GenWay Biotech Inc. to provide Onko-Sure® testing services under a CLIA waiver. Greater details of the Company’s relationship with GenWay are provided on page 12. Provista Life Sciences has independently validated Onko-Sure® as a potential screening tool for breast cancer detection. As well, as announced in June 2010, Provista Life Sciences is collecting essential clinical data through a validation study of DR-70 reagents to facilitate the commercialization of Onko-Sure® as a general cancer screen. The trial is ongoing. As of June 2010, Provista Life Sciences had acquired over 350 blood samples from breast, lung, and uterine cancer patients, among others. In October 2010, Radient and Provista Life Sciences announced the results of a study using a blood test for the early detection of lung cancer. The study demonstrated that Provista Life Sciences’ test—which is based on Radient’s antigens for fibrinogen degradation products—can accurately detect lung cancer. The study included men and women 20 to 76 years old. The data generated in this final study were consistent with previous findings and produced positive clinical performance marks of 87% sensitivity, 95% specificity, and an ROC accuracy of 0.97. Radient believes that the study was successful by industry standards and supports Provista Life Sciences’ efforts in commercializing a new lung cancer detection assay called LC Sentinel™. Provista Life Sciences is expected to launch LC Sentinel™ as a CLIA-laboratory-developed test in the U.S. for use in high-risk lung cancer patient populations by the end of the fourth quarter 2010 through its standard clinical channels (e.g., physicians, medical clinics, and hospitals). The company may also seek FDA registration for LC Sentinel™ in 2011. Potential Provista Diagnostics Inc. Acquisition In July 2010, Radient signed a Letter of Intent to acquire Provista Diagnostics Inc., a wholly owned subsidiary of Provista Life Sciences. The goal of the proposed merger is to build a more identifiable and profitable IVD testing business by expanding CLIA testing services beyond one test as well as increasing test kit commercialization and research and development efforts. Provista Diagnostics has an approved molecular test for breast cancer (called the BT Test®) and as well as a CLIA laboratory facility. Radient intends to acquire Provista Diagnostics in a stock-for-stock transaction after due diligence for both companies is successfully completed and customary closing conditions are met (e.g., Radient’s shareholder approval). In September 2010, Radient and Provista Diagnostics revised the original merger agreement dated July 13, 2010, in order to extend the contract through December 31, 2010.


The Potential of Including Onko-Sure® in a National or Regional Cancer Screening Program Radient believes that the implementation of national or regional cancer screening programs using the Onko-Sure® test kit could significantly reduce cancer-related patient care costs and improve the quality of life and prognosis of cancer patients. Cancer screening programs enable patients to detect cancers as early as possible, when treatment is most effective. Although many countries have implemented national screening programs for breast, cervical, bowel, prostate, and ovarian cancers, these programs traditionally screen patients for a single, specific cancer type. Radient believes that a more effective screening strategy is to use a low-cost test capable of detecting multiple cancers. To the Company’s knowledge, Onko-Sure® is the only cancer test shown to detect up to 19 types of cancer in early stages. Under potential government-supported general cancer screening programs, Radient estimates that the total cost per patient tested with Onko-Sure® could be as low as $30 (due to a large scale of patients), which will likely cover the test, blood draw, and testing process. In a White Paper entitled “National & Regional Cancer Screening Programs,” author Douglas C. MacLellan, Radient’s chairman and chief executive officer (biography on page 14), reports that a properly implemented cancer screening program could result in 25% savings in annual cancer treatment costs by detecting and treating cancer in the early stages. Table 11 overviews the potential savings in healthcare costs under a cancer screening program in various countries, assuming the following: (1) that 30% of people who are considered at a high-risk or over age 50 are screened once every two years (i.e., 15% of the population is screened annually); (2) that the test costs $30 per patient tested in duplicate; and (3) that the program reduces cancer treatment costs by 25%.

Radient is pursuing distribution partnerships in various countries as a means to support national and regional cancer screening programs. In countries that have national healthcare programs, Radient requires new distribution partners to make an initial order of 1,000 Onko-Sure® cancer test kits to offer free cancer testing to up to 41,000 at-risk individuals (those who have previously been diagnosed with cancer or are over age 50) at various national testing laboratories and hospitals in conjunction with a robust public relations outreach program.

Implementing a General Cancer Screening Program in India to Increase Awareness and Acceptance In June 2010, Radient’s exclusive distributor in India, Gaur Diagno, Pvt Ltd, released its plans to implement a government-supported general cancer screening program using Onko-Sure® for select populations with high cancer rates. To qualify for a cancer screen using an Onko-Sure® test kit, patients must answer a 67-point general health screening questionnaire. Patients who answer “yes” to any major risk factor questions or “yes” to at least two low-level risk factor questions can have blood drawn, collected, and sent to Gaur Diagno’s central laboratory to run an Onko-Sure® test. If the results indicate positive for cancer, the patient is referred to a regional cancer hospital for further testing and potential treatment.

Australia 22.19 million 3.3 million $99 million $2.45 billion $612 million $513 million

Canada 30.04 million 4.5 million $135 million $14.2 billion $3.55 billion $3.41 billion

France 65.44 million 9.8 million $288 million $6.2 billion $1.55 billion $1.26 billion

U.K. 62.04 million 9.3 million $279 million $3.2 billion $800 million $521 million

U.S. 308 million 46.2 million $1.3 billion $209 billion $52.2 billion $50.9 billion

Table 11

15% Annual Individuals Screened

Annual Savings After Deducted Screening Cost

Potential Cancer Screening Savings***

Annual Costs for Cancer Treatment

Annual Screening

Costs**

Source: Radient’s White Paper "National & Regional Cancer Screening Programs," March 2010.

Population*Country

* According to the United Nations Department of Economic and Social Afffairs, July 1, 2009. ** All figures are in U.S. dollars and are calculated at $30.00 per patient tested in duplicate. *** Potential cancer screening savings is based upon a 25% reduction in cancer treatment costs due to implementing a cancer screening program.

ANNUAL SAVINGS OF CANCER TREATMENT COSTS FROM SCREENING


The program is designed to target two specific segments of the population via the following approaches: (1) a proactive outreach to in-demand populations through the deployment of mobile mini-buses, which travel to various small towns and villages; and (2) a physician-referred general cancer screen conducted at government hospitals. The companies estimate that roughly 50% of patients contacted through either approach may qualify for an Onko-Sure® screening. Gaur Diagno is also actively marketing to private hospitals in India. The goal of the program is to increase market awareness and acceptance of the Onko-Sure® test kit and to secure the product as a routine cancer test offered by Indian health institutions. In October 2010, Guar Diagno and its parent company Jaiva Technologies, Inc. announced the launch of a cancer education and screening program in India. Future Product Enhancement While Radient has clinical data supporting the accuracy (i.e., sensitivity and specificity) of the current version of Onko-Sure® in diagnosing and monitoring various cancers (described on pages 26-28), the Company has proven in the laboratory that it can produce a test that has fewer false positives and higher accuracy. While not critical to Radient’s business model, the Company may seek clearance for this next-generation candidate within two to three years. Market Opportunity for Onko-Sure® Onko-Sure® and other IVD tests in the oncology sector provide important information about the physiological state of cancer, which can aid in diagnosing and monitoring the disease. As well, these tests provide details that may facilitate physicians’ determination of treatment options for patients. Factors such as an aging population and increasing cancer prevalence rates in established and emerging markets are fueling the IVD sector. In the U.S., the current IVD market is estimated at $17.6 billion and is forecast to increase 5.4% annually through 2013 (Source: Freedonia Group’s In Vitro Diagnostics to 2013, March 2009). Worldwide, the IVD market is expected to expand at 6% annually, potentially reaching $50 billion by 2012 (Source: Business Insights’ The Top 10 Global In Vitro Diagnostics Companies, March 2009). Based on data from Kalorama Information (a market research provider for medical markets), Radient estimates the oncology segment of the IVD market is $5.6 billion, and expects this area to have an 11% compound annual growth rate (CAGR) through 2014, when it could rearch $10.1 billion (as illustrated in Figure 5). The Company believes that an increasing appreciation of early diagnosis—both for the patient’s quality of life and healthcare cost efficiences—may be fueling the growth of the market segment. With an ability to detect up to 19 cancer types, Onko-Sure® may have the ability to access a significant portion of this sector.

POTENTIAL MARKET OPPORTUNITY FOR ONKO-SURE®

Figure 5

Sources: Radient Pharmaceuticals Corporation and Kalorama Information.

$5.6 Billion

Estimated $10.1 Billion

Market by 2014


REPOSITIONING RADIENT AS AN IN VITRO DIAGNOSTICS COMPANY In the third quarter 2009, the Company’s management team determined that, going forward, it was best for Radient to return to its core principles and focus solely on the IVD space. To reflect this change, the Company changed its corporate name from “AMDL, Inc.” to “Radient Pharmaceuticals Corporation.” As part of this initiative, Radient is repositioning several business segments that it believes may benefit from new partnerships, separate potential IPOs, or possible sales: (1) 98% ownership in a China-based pharmaceuticals business, Jade Pharmaceuticals Inc., which is

engaged in the manufacture and distribution of generic and homeopathic pharmaceutical products; and

(2) 100% ownership of a proprietary cancer vaccine therapy technology, Combination Immunogene

Therapy (CIT). While not the Company’s main focus, Radient feels these assets remain substantive opportunities. As well, in line with the Company’s strategy to return to an IVD-focused company, Radient has signed a Letter of Intent to acquire Provista Diagnostics Inc. as a wholly owned subsidiary. Provista Diagnostics owns rights, patents, and trademarks for diagnostic technologies that Radient believes could strengthen and complement its core IVD business. In particular, Provista Diagnostics has an approved molecular test for breast cancer and a CLIA laboratory facility as well. Jade Pharmaceuticals Inc. In 2006, Radient acquired Jade Pharmaceuticals Inc. Currently, Jade is one of the leading providers of domperidone—an antiemetic used to prevent nausea and vomiting caused by chemotherapy and other medications—in China. Jade has afforded Radient with a positive cash flow business that is differentiated from the IVD cancer screening and diagnostic business but supports its overall business strategy. Currently, Radient owns approximately 98% of Jade. While acquiring the Chinese business was a profitable venture for Radient, it also diverted resources away from the Company’s primary objective of developing and commercializing its IVD product. As such, effective September 29, 2009, Radient deconsolidated all of Jade’s activities. In connection with the deconsolidation, the Company reclassified its Chinese pharmaceutical manufacturing and distribution business (conducted through the Jade subsidiary) as a business investment rather than a consolidated operating subsidiary. Radient intends to monetize its Chinese assets either through a sale or an IPO, participating initially as a majority shareholder and subsequently becoming a minority stakeholder in the Chinese pharmaceutical business. In July 2010, Radient announced that Jade signed a Letter of Intent to acquire Shanxi BaoTai Pharmaceutical Co., Ltd. (“BaoTai”), a closely held pharmaceutical manufacturing company located in Taiyuan, China, through a nontaxable merger of business assets. The merger is intended to combine the strengths of Jade and BaoTai to form a sole oncology business. The transaction is expected to close in late 2010. Once merged, the companies plan to seek listing on the NYSE Amex. Combination Immunogene Therapy (CIT) CIT is a patented combination gene therapy technology designed to build the body’s immune system and destroy cancer cells. Specifically, the CIT technology simultaneously incorporates two genes into a patient’s tumor cells to enhance the immune system’s natural ability to destroy cancer cells. Radient believes that the CIT technology may have utility against several cancer types, potentially treating those already diagnosed with cancer or, for patients with a family history of a certain type of cancer, protecting patients from acquiring cancer by preparing the individual’s immune system to destroy that particular type of tumor cell before cancer develops. In addition to its use as a standalone candidate, CIT may also be used with conventional chemotherapy and radiation therapy to exert a cooperative anticancer effect.


CIT was developed by Lung-Ji Chang, Ph.D., at the University of Alberta, Edmonton, Canada, and acquired by Radient in 2001. Preclinical studies evaluating CIT in mice injected with human skin and brain cancers indicated that the technology can be effective. As well, the Company reports that the CIT technology has also been evaluated in Phase I clinical trials, which have demonstrated that the two genes used in CIT and tumor cells carrying these genes do not cause toxicity (Source: Gee Consulting Services’ Gene Therapy Cancer Treatment: U.S./China Market Snapshot, February 2008). As well, with the goal of ultimately developing a vaccine using the CIT technology, Radient has sponsored a study conducted by Dr. Chang at the University of Florida using CIT to target breast cancer. Dr. Chang continues to serve as the Company’s consultant for gene therapy in the development of CIT. In April 2010, Radient entered into an exclusive five-year collaboration agreement with a multinational biotechnology company, Jaiva Technologies, Inc., under which Jaiva is working with clinical laboratories, hospitals, and physicians in India to conduct clinical trials for Radient’s CIT technology. Jaiva is assisting Radient in obtaining government approval in India to use CIT technology as a cancer therapy and vaccine. In June 2010, Radient announced Jaiva’s plans to submit a clinical trial application to the Central Drugs Standard Control Organization (CDSCO) in India to commence human Phase II trials with Radient’s CIT technology as a vaccine therapy for non-small cell lung carcinoma (NSCLC). As part of the agreement, Jaiva has agreed to absorb all costs associated with commercializing the CIT technology in India, which could exceed $1.4 million. The Company is currently engaged in litigation regarding certain intellectual property and equitable interests in the CIT technology (greater details are provided in the Risks section on pages 46-52).


Competition Radient believes that Onko-Sure® represents a novel approach to monitoring cancer as it is designed to detect recurrent CRC at an earlier stage than comparable IVD tests and can be applicable in up to 19 cancer types, allowing its use as a general cancer screen. The Company does not believe that there is a direct competitor to Onko-Sure® currently in the marketplace, although Radient may face indirect competition from a number of companies within the IVD industry. It is important to note that the CEA test, a commonly employed method for detecting and monitoring CRC, is off-patent. Thus, most large pharmaceutical companies with diagnostics divisions manufacture and supply CEA, along with their other diagnostics tests. These entities include F. Hoffmann-La Roche, Abbott Laboratories, and Siemens Healthcare, as well as an array of other companies that may have greater resources than Radient. Table 12 summarizes a selection of companies that currently manufacture CEA assays among other enzyme-linked immunosorbent assay (ELISA) tests. ELISA test kits function by linking an antibody or an antigen to an enzyme for the purpose of identifying an antibody-antigen match. Then, they detect certain antigens in a biological sample and antibodies that have attached to specific antigenic sites on proteins or other molecules in the sample. ELISA tests are widely used in medical laboratory settings, including for the detection of tumor markers in liver, ovarian, breast, prostate, and gastrointestinal cancers. While Radient may compete with suppliers of standard ELISA diagnostics tests, it is important to note that diagnostics is a broad industry and the Company does not presently conduct molecular diagnostics or DNA/RNA sequencing, which are often employed for IVD cancer tests at several of the entities listed in Table 12.

As Radient seeks to increase commercialization efforts for Onko-Sure®, the Company may compete with medical device manufacturers and the diagnostics divisions of large healthcare companies as well as with private, government, or educational institutions that are researching new technologies for improved cancer detection beyond ELISA test kits. The entities listed in Table 12 and those summarized on pages 37-38 are not intended as an exhaustive collection of Radient’s potential competitors but are believed to be representative of the type of competition comprising the IVD sector. To exemplify the breadth of technologies in this arena, the following entities are using a variety of methods to detect and monitor cancers that are also being targeted by Onko-Sure®.

Abbott Diagnostics International, Ltd. ABT-NYSE Various CEA Assays

Ameritek USA, Inc. Private CEA Test Kit

Beckman Coulter, Inc. BEC-NYSE CEA Enzyme Immunoassay (EIA)

Biocheck, Inc. Private CEA EIA Test Kit

Bio-Rad Laboratories, Inc. BIO-NYSE Various EIA Assays

Covance Inc. CVD-NYSE CEA, Polyclonal Antibody

CTK Biotech, Inc. Private CEA ELISA Kit

Monobind, Inc. Private CEA ELISA

Roche Diagnostics RHHBY-OTC CEA; Various

Siemens Healthcare Diagnostics Inc. SI-NYSE System, Test, CEA Assay; Various

Tosoh Bioscience, Inc. 4042-TSE CEA; Various

* Stated tickers may apply to the parent company of the referenced diagnostic division.

Table 12

A SELECTION OF IVD MANUFACTURERS

Sources: ZapConnect.com's Medical Device Industry Portal and Crystal Research Associates, LLC.

Generic Tests (Emphasizing CEA Products)

Ticker Symbol*Company


Abbott Diagnostics Abbott Diagnostics is part of Abbott Laboratories, a global healthcare company headquartered in Illinois with products that range from nutritional care and laboratory diagnostics to medical devices and pharmaceutical therapies. Abbott is credited with developing the first automated prostate-specific antigen (PSA) test, a common blood test used to help detect prostate cancer in men, in 1991. Immunodiagnostics (measuring the body’s antigen/antibody reactions to detect disease) continues to be at the forefront of Abbott Diagnostics. The company manufactures immunoassay systems that test for cancer, cardiovascular disease, infectious disease, drug abuse, and fertility, among many other conditions. Two of Abbott’s primary immunoassay product lines are the Architect® and AxSYM® platforms. Both platforms include the CEA test. Additional regents offered on either the Architect® or AxSYM® systems entail alpha-fetoprotein ([AFP] for testicular and hepatocellular carcinomas), CA-125 (ovarian cancer), and CA 15-3 (breast cancer) tests, among others. As with the CEA test in general, Abbott’s CEA assay kit can aid in the prognosis and management of cancer patients who have changing concentrations of CEA. In January 2010, Abbott’s Molecular Diagnostics division received a CE mark for a new gene-based test for CRC, called Abbott RealTime mS9 Colorectal Cancer. This test is a non-invasive DNA assay to detect a certain gene that has been linked to CRC in blood specimens. Roche Diagnostics Headquartered in Basel, Switzerland, Roche Holdings AG is a global healthcare company with products addressing oncology, virology, inflammation, metabolism, the central nervous system, IVD, tissue-based cancer diagnostics, and diabetes, among others. Roche is presently divided into two operating units: pharmaceuticals and diagnostics. Roche Diagnostics offers products and services for all fields of medical testing, including IVD. Its products range from at-home blood glucose monitoring devices, point-of-care devices, and IVD tests for cancer screening/monitoring to high-throughput laboratory systems and state-of-the-art instruments for genetic research. The company’s hemo FEC® test offers preventive screening for intestinal cancer that can obtain results within 30 seconds. With a 20% market share in 2009, Roche believes that its Diagnostics division is a global leader in the $40 billion IVD market, which entails a number of healthcare segments beyond oncology, such as cardiology (Source: Roche’s 2009 Annual Report). Life Technologies Corp. Life Technologies (LIFE-NASDAQ) of Carlsbad, California, is a global biotechnology tools company providing systems, consumables, and services. Life Technologies was created in November 2008 through the combination of Invitrogen Corp. and Applied Biosystems Inc. Prior to becoming Life Technologies, Invitrogen acquired BioSource™ (formerly BioSource International, Inc.) in 2005. BioSource™ products, which are now a part of Life Technologies, include ELISA tests, Luminex® assays, recombinant proteins, and antibodies for analysis of multiple proteins and pathways. Prior to becoming an Invitrogen company, BioSource supplied the worldwide biomedical research community with assay solutions and immunological reagents for over 15 years. Monobind, Inc. California-based Monobind is a closely held company that has been manufacturing immunoassays since 1978. In addition, the company supplies biological raw materials to biotechnology researchers, distributors, laboratories, and manufacturers worldwide. Monobind’s immunoassays for over 40 analytes are made entirely in-house, in either ELISA or CLIA formats. The ELISA product line, called AccuBind®, addresses IVD in the areas of thyroid and reproductive endocrinology, cancer diagnosis, cardiovascular malfunctions, autoimmune disorders, diabetes, infectious diseases, growth deficiencies, and therapeutic monitoring. The company’s cancer markers include AFP, CEA, CA-125, CA 15-3, PSA, and a next-generation CEA (a modified version of CEA launched in December 2009), among others. Monobind’s CEA tests are supplied under the AccuBind® (ELISA) and AccuLite® (CLIA) brands. Monobind meets ISO 9001:2000 and ISO 13485:2003 requirements.


Signature Diagnostics AG Germany-based Signature Diagnostics is a closely held company performing oncogenomics and other forms of clinical oncology diagnostics. At present, the company is focused on developing products to aid physicians in monitoring treatment responses for cancer patients and predicting outcome. Specifically, Signature Diagnostics is emphasizing CRC diagnostics. In June 2010, the company announced that it entered into an agreement to use Affymetrix, Inc.’s (AFFX-NASDAQ) microarray technology in the development of diagnostic and prognostic CRC tests. Signature Diagnostics aims to launch two IVD tests in Europe during late 2010/early 2011, with U.S. registration to follow: (1) Detector C, a non-invasive, blood-based early detection test for CRC in asymptomatic individuals; and (2) Predictor C, a prognostic tissue test to predict disease progression in Stage II and III CRC. Detector C has shown a sensitivity of 90% and a specificity of 88% for CRC. Signature Diagnostics believes that Detector C can be used prior to a colonoscopy and as an alternative to stool-based tests due to its low percentage of false negatives. Predictor C is intended to discriminate between high-risk and low-risk patients for more personalized clinical disease management. This test has been found to identify half of all Stage II/III patients with a high risk of disease progression. Epigenomics AG Epigenomics (ECX-Frankfurt Prime Standard) is developing IVD tests for the early detection of cancer. Epigenomics’ tests are intended to be performed on patients’ plasma before symptoms occur. Its technology is based on detecting differences in DNA methylation patterns between healthy and sick individuals or between subgroups of patients for disease classification. The company’s programs target colorectal, lung, and prostate cancer, with lead products as follows: (1) an IVD test called Epi proColon, a CE-marked, blood-based molecular diagnostic test for CRC; and (2) Epi proLung, a diagnostic test for lung cancer. While not available in the U.S., Epi proColon has been sold in Europe since October 2009. Epigenomics non-exclusively licensed the biomarker for this IVD test to Canadian life sciences company Warnex Medical Laboratories in May 2010, and expects Warnex to launch a CRC blood test in the near term. The company further received a U.S. patent for the biomarker in July 2010, and plans to initiate a campaign for regulatory approval of the Epi proColon test in the U.S. Epigenomics’ second IVD test, Epi proLung is also CE marked and available in Europe. This test may aid lung cancer diagnosis and help pathologists confirm the diagnosis of malignant lung disease when current diagnostic procedures fail to establish the presence of malignancy in patients with suspected lung cancer. Epigenomics maintains strategic partnerships with several firms, including Abbott and Quest Diagnostics Inc. (DGX-NYSE). Headquartered in Berlin, Germany, the company also has a wholly owned subsidiary in Seattle, Washington. Beckman Coulter, Inc. Beckman Coulter creates products to simplify, automate, and innovate complex biomedical testing. Its products are used by physicians to diagnose disease, make treatment decisions, and monitor patients. The company’s core IVD customers are hospital laboratories. Beckman Coulter estimates that it has an installed base of more than 200,000 clinical and research systems in laboratories worldwide and that it is capable of meeting 100% of a laboratory’s routine testing needs. Beckman Coulter’s clinical laboratory offerings comprise automation and information systems, blood banking, immunoassays, chemistry, immunochemistry, and molecular diagnostics, among others. Specifically, the company’s tumor marker immunoassay systems include a CEA test as well as other standard IVD oncology tests.


Milestones Recent Milestones Radient has achieved numerous key milestones in its efforts to commercialize the Onko-Sure® test kit in the U.S. and globally, validate the kit within the medical community, and transition to an IVD-focused business. Secured regulatory and healthcare clearances from authorities in the U.S., Canada, EU, India,

Korea, and Taiwan for Onko-Sure® as a cancer monitoring or cancer screening test Signed long-term distribution agreements in approximately 15 key global markets Launched CLIA laboratory testing services in the U.S. and Canada Secured U.S. GMP certification for the Onko-Sure® test kit manufacturing facility at the Company’s

facilities in Tustin, California Appointed Dr. Afsaneh Motamed-Khorasani (biography on page 15), who brings over 15 years of

R&D, marketing, and medical communication experience, as director of oncology Appointed Mr. Gary Giarratano (biography on page 16) as director of North American sales and

marketing, who brings over 20 years of healthcare, sales, and marketing leadership experience to Radient

Hired Mr. Mathi Senapathi (biography on page 16), who has over 18 years of diverse

pharmaceutical industry experience, as Radient’s director of manufacturing for Onko-Sure® Named Dr. Robert Beart, Jr. (biography on page 18), a recognized specialist in CRC diseases and

cancer, to Radient’s Board of Directors, increasing the number of independent directors to three Published a peer-reviewed journal article co-authored by Dr. Andrea Small-Howard (Radient’s vice

president, scientific oversight [biography on page 15]), entitled “Advantages of the AMDL ELISA DR70 (FDP) Assay Over Carcinoembryonic Antigen (CEA) for Monitoring Colorectal Cancer Patients”

Received independent validation of Onko-Sure® as a potential screening tool for breast cancer

detection from Provista Life Sciences Published a White Paper written by Mr. Douglas C. MacLellan (Radient’s chairman and CEO

[biography on page 14]), entitled “National and Regional Cancer Screening Programs” Presented Onko-Sure® at the 2010 American Society of Clinical Oncology (ASCO) Annual Meeting Presented Onko-Sure® at the 2010 American Association of Chemical Chemistry (AACC) Annual

Meeting and Clinical Lab Expo Presented Onko-Sure® at the 2010 National Comprehensive Cancer Network (NCCN) Annual

Meeting Completed a corporate name change to Radient Pharmaceuticals Corp. and commenced trading

under the ticker symbol “RPC” on the NYSE Amex as part of its transition to become a IVD-focused company

Launched a newly designed corporate website (www.radient-pharma.com), including an investor

video channel, as well as an Onko-Sure® product website (www.onko-sure.com) Signed a Letter of Intent to acquire Provista Diagnostics Inc., a wholly owned subsidiary of Provista

Life Sciences, to expand its IVD product line


Announced that its business investment, Jade, had signed a Letter of Intent to acquire Shanxi Baotai Pharmaceuticals Co., Ltd. (“Baotai”) to form a single entity focused on oncology products

Completed the fourth and final closing of convertible Promissory Note financing (net proceeds for

the four financings were nearly $6.4 million Potential Milestones Radient aims to achieve the following milestones to support the continued development of the Onko-Sure® product line as well as the commercialization and sale of the Onko-Sure® test kit in the U.S. and abroad: Continue publishing peer-reviewed articles, white papers, and progress reports on current research

studies and other related Onko-Sure® materials to underwrite product validation and drive market awareness and education;

Initiate and complete international regulatory clinical trials with Onko-Sure® to validate detection of

additional cancer types in order to broaden the test kit’s use into other areas of oncology; Secure at least four new distribution partnerships during 2010; Sell a minimum of 17,500 Onko-Sure® test kits (an estimate that is based on existing distributor

commitments), which could result in roughly $7.5 million in sales; Supplement sales by offering the Onko-Sure® test kit through government-sponsored programs as

well as by selling directly to consumers and to CLIA laboratories; Advance engagements with the Mayo Clinic, University of Pennsylvania, Royal North Beach

Hospital in Australia, and other internationally recognized hospitals for the development of a next-generation Onko-Sure® product;

Initiate the FDA clearance process for the next-generation product; and Complete the monetization of 100% of Radient’s non-IVD assets and reinvest sales proceeds into

the Onko-Sure® product line.


Key Points to Consider Radient Pharmaceuticals Corp. is focused on developing a simple and effective non-invasive in vitro

diagnostic (IVD) test kit, called Onko-Sure®, to detect and monitor up to 19 cancer types. Onko-Sure® is a blood test that measures the levels of specific breakdown products in patients’ serum (blood), called fibrin and fibrinogen degradation products (FDPs). FDP levels rise dramatically as cancer progresses. FDP levels can be up to 38 times higher in cancer patients versus non-cancer patients.

IVD entails testing bodily fluids and tissues for markers of diseases (e.g., cancer) in order to detect

the disease, monitor the effects of treatment and possible recurrence, indicate the likelihood of progression, and assist with a prognosis. In the U.S., the current IVD market is estimated at $17.6 billion and forecast to increase 5.4% annually through 2013. Worldwide, the IVD market is expected to expand at 6% annually, potentially reaching $50 billion by 2012.

To date, the Onko-Sure® IVD cancer test kit has been evaluated in nearly 7,500 patients. Clinical data

collected to date supports the medical utility of Onko-Sure® at detecting and monitoring colorectal, lung, liver, gastrointestinal, ovarian, breast, and tongue/oral cavity cancers, among others.

The FDA has cleared Onko-Sure® for monitoring colorectal cancer (CRC) treatment and/or

recurrence in the U.S. Radient believes that Onko-Sure® can detect CRC and other cancers in the early stages before it has metastasized (spread), an advantage over existing methods, such as carcinoembryonic antigen (CEA) tests. Whereas a CEA test identifies cancer recurrence in later stages, Onko-Sure® can detect cancer in earlier stages (with lower concentrations of the DR-70 tumor marker in the blood), allowing physicians to implement a treatment program early in the disease progression, which could have a significant impact on a patient’s prognosis.

o The American Cancer Society (ACS) expects there to be over 140,000 new cases of CRC in the

U.S. in 2010. The five-year survival rate for patients with Stage I CRC is between 80% and 95% versus a 33% to 55% likelihood of survival for individuals diagnosed with Stage III CRC.

o The international and domestic CRC monitoring test market is approximately $450 million per

year and growing at 10%. Despite improvements in cancer diagnostics and the development of numerous treatments, cancer

remains a leading healthcare challenge worldwide. In the U.S., cancer is the second leading cause of death behind cardiovascular disease. Globally, cancer cases are predicted to rise 69% to 21 million by 2030, with related deaths climbing from 7.6 million in 2008 to 13 million by 2030. Accordingly, oncology is one of the largest and most rapidly expanding markets, forecast to surpass $78 billion in 2010.

Radient believes that the implementation of national or regional cancer screening programs using the

Onko-Sure® test kit to pre-screen high-risk populations could significantly reduce the billions of dollars spent on cancer treatment each year while reducing morbidity and improving patients’ quality of life. Radient believes that government-backed general cancer screening could represent a $1 billion annual market that is currently in its infancy.

Radient is focused on validating the use of Onko-Sure® to the medical community by providing

submissions to the American Medical Association (AMA) and American Society of Clinical Oncology (ASCO) for inclusion in literature regarding the process of care for CRC such that using Onko-Sure® or Onko-Sure® and CEA (in combination) is recommend to detect disease recurrence.

Onko-Sure® is also cleared in Canada to detect and monitor lung cancer. The Canadian Cancer

Society forecasts that 24,200 individuals may be diagnosed with lung cancer in 2010, with roughly 20,600 deaths attributable to the disease. Radient believes that this represents an estimated $50 million annual market, which is in its initial stages.


In total, Radient believes that the market for Onko-Sure® could be as high as $1.5 billion annually.

In the U.S., Radient is working with two companies to offer Onko-Sure® as a general cancer screening or cancer-specific testing service under a Clinical Laboratory Improvement Amendments (CLIA) waiver: (1) GenWay Biotech, Inc.; and (2) Provista Life Sciences.

In late 2009, Radient began to reposition its business segments to focus on IVD. As a result, the

Company may be able to monetize the value of its other assets that are unrelated to the IVD space (including a Chinese pharmaceutical investment) via new partnerships, separate initial public offerings (IPOs), or possible sales.

As of June 30, 2010, Radient’s cash position was $2.5 million, which the Company believes is

sufficient to fund operations through February 2011.


Historical Financial Results Tables 13, 14, and 15 summarize Radient’s key historical financial statements: its Condensed Consolidated Statements of Operations and Comprehensive Loss, Balance Sheets, and Statements of Cash Flows. Radient believes that it has adequate capital to fund operations through February 2011. In the second half of 2010, Radient expects to convert approximately $6 million to $7 million in Warrants, which could provide the Company with additional cash. As well, Radient considers itself to be on-track for monetizing its Chinese operations; the Company has stated that it does not expect to sell Jade’s stock during 2010. Any further capital requirements are expected to be conducted through a raise.

2010 2009 2010 2009

Net revenues 45,552$ 3,181,043$ 82,394$ 5,892,780$

Cost of sales 8,178 2,150,405 30,113 3,735,978

Gross profit 37,374 1,030,638 52,281 2,156,802

Operating expenses:

Research and development 243,779$ 332,779 294,815 425,463

Selling, general, and administrative 2,768,978 3,784,801 4,124,160 6,375,570

3,012,757 4,117,580 4,418,975 6,801,033

Loss from operations (2,975,383) (3,086,942) (4,366,694) (4,644,231)

Other income (expense):

Interest expense (33,149,910)$ (332,034) (34,312,584) (566,251)

Gain on change in fair value of derivative

instruments 9,136,558 — 9,093,564 —

Impairment on investment in Jade ("JPI") (2,299,705) — (2,299,705) —

Other expense, net (1,614) (36,721) (1,877) (72,830)

Total other expense, net (26,314,671) (368,755) (27,520,602) (639,081)

Loss before provision for income taxes

and discontinued operations (29,290,054) (3,455,697) (31,887,296) (5,283,312)

Provision for income taxes — 417,165 — 527,667

Loss from continuing operations (29,290,054) (3,872,862) (31,887,296) (5,810,979)

Loss from discontinued operations, net — (4,222,696) — (3,975,670)

Net loss (29,290,054)$ (8,095,558)$ (31,887,296)$ (9,786,649)$

Other comprehensive loss:

Foreign currency translation loss — (54) — (42,485)

Comprehensive loss (29,290,054)$ (8,095,612)$ (31,887,296)$ (9,829,134)$

Basic and diluted loss per Common Share:

Loss from continuing operations (1.00)$ (0.24)$ (1.19)$ (0.37)$

Loss from discontinued operations $ — (0.27)$ $ — (0.25)$

Net loss (1.00)$ (0.51)$ (1.19)$ (0.61)$

Weighted average Common Shares

outstanding — basic and diluted 29,245,417 15,851,815 26,729,016 15,916,133

Table 13

Three Months Ended June 30, Six Months Ended June 30,


(Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS



June 30, 2010 December 31, 2009

(Unaudited) Audited

ASSETS

Current assets:

Cash 2,522,135$ 12,145$

Inventories 74,367 79,255

Debt issuance costs 1,528,750 1,288,910

Prepaid expenses and other current assets 10,094 57,778

Prepaid consulting 835,767 358,667

Total current assets 4,971,113 507,845

Property and equipment, net 81,670 83,547

Intangible assets, net 1,108,333 1,158,333

Receivable from JPI, net of allowance 2,675,000 2,675,000

Investment in JPI 18,200,295 20,500,000

Other assets 22,409 105,451

Total assets 27,058,820$ 26,319,086$

LIABILITIES AND STOCKHOLDERS’ DEFICIT (EQUITY)

Current liabilities:

Accounts payable and accrued expenses 1,291,315$ 1,542,974$

Accrued salaries and wages 340,910 738,331

Accrued interest expense 777,240 432,337

Derivative liabilities 22,119,563 354,758

Deferred revenue 103,128 103,128

Convertible Notes, net of discount 5,351,316 240,482

Current portion of Notes payable, net of discount 2,312,578 1,316,667

Total current liabilities 32,296,050 4,728,677

Other long-term liabilities — 295,830

Notes payable, net of current portion and debt discount — 601,819

Total liabilities 32,296,050 5,626,326

Commitments and contingencies

Stockholders’ deficit:

Preferred Stock, $0.001 par value; 25,000,000 shares

authorized; none issued and outstanding — —

Common Stock, $0.001 par value; 100,000,000 shares

31,141 22,265

Additional paid-in capital 79,057,478 73,109,048

Accumulated deficit (84,325,849) (52,438,553)

Total stockholders’ (deficit) equity (5,237,230) 20,692,760

Total liabilities and stockholders’ (deficit) equity 27,058,820$ 26,319,086$

CONDENSED CONSOLIDATED BALANCE SHEETS


Table 14


authorized; 31,380,278 and 22,682,116 shares issued at June 30, 2010, and December 31, 2009, respectively; 31,140,804 and 22,265,441 shares outstanding at June 30, 2010, and December 31, 2009, respectively


2010 2009

Cash flows from operating activities:

Net loss (31,887,296)$ (9,786,648)$

Less: income from discontinued operations — (3,975,670)

(31,887,296) (5,810,978)

Adjustments to reconcile net loss before discontinued operations to net

cash provided by (used in) operating activities:

Depreciation and amortization 67,000 1,300,413

Amortization of debt discount and debt issuance costs 5,344,166 194,291

Impairment on investment in JPI 2,299,705 —

Interest expense related to fair value of derivative instruments granted 24,053,345 —

Incremental value of Shares and Warrants issued to former Note holders 81,780 —

Additional principal added for triggering events 2,877,295 —

Share-based compensation related to Options granted to employees

and directors for services 173,758 154,056

Share-based compensation related to Common Stock and Warrants

expensed for services 1,620,789 314,310

Provision for bad debts — 1,932,384

Change in fair value of derivative instruments (9,093,564) 35,557

Changes in operating assets and liabilities:

Accounts receivable — 5,116,069

Inventories 4,888 275,284

Prepaid expenses and other assets 130,726 (5,674,930)

Accounts payable and accrued expenses, salaries, and wages (273,967) 539,155

Income taxes payable — (412,035)

Deferred revenue — (87,720)

Net cash used in operating activities of continuing operations (4,601,375) (2,124,145)

Net cash provided by operating activities of discontinued operations — 1,853,502

Net cash used in operating activities (4,601,375) (270,643)

Cash flows from investing activities:

Purchase of property and equipment (15,123) (2,034,324)

Net cash used in investing activities of continuing operations (15,123) (2,034,324)

Net cash used in investing activities (15,123) (2,034,324)

Cash flows from financing activities:

Proceeds from issuance of Senior Notes, net of cash issuance costs

of $656,426 — 2,088,593

Proceeds from issuance of convertible debt, net of cash offering costs

of $4,748,565 6,308,000 —

Proceeds from the exercise of Warrants 818,488 —

Net cash provided by financing activities 7,126,488 2,088,593

Effect of exchange rates on cash — 1,996

Net change in cash 2,509,990 (214,379)

Cash, beginning of period 12,145 2,287,283

Cash, end of period 2,522,135$ 2,072,904$

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


Table 15

Six Months Ended June 30,


(Unaudited)


Risks Some of the information in this Executive Informational Overview® (EIO®) relates to future events or future business and financial performance. Such statements can only be predictions and the actual events or results may differ from those described due to the risks presented below. The content of this report with respect to Radient has been compiled primarily from information available to the public released by the Company. Radient is solely responsible for the accuracy of this information. Information as to other companies has been prepared from publicly available information and has not been independently verified by the Company. Certain summaries of activities have been condensed to aid the reader in gaining a general understanding. Investors should carefully consider the risks and information about Radient’s business described below and should not interpret the order in which these considerations are presented as an indication of their relative importance. The risks and uncertainties described below are not the only risks that the Company faces. Additional risks and uncertainties not presently known to Radient or that the Company currently believes to be immaterial may also adversely affect its business. If any of the following risks and uncertainties develops into actual events, Radient’s business, financial condition, and results of operations could be materially and adversely affected. Radient has limited product development activities. The Company’s product development efforts may not result in commercial products. Radient intends to continue to pursue approval of the Onko-Sure® test kit by the Shanghai Food and Drug Administration (SFDA) and licensing of its CIT technology. The Company is limited in the number of additional products it can develop at this time. Successful cancer detection and treatment product development is highly uncertain, and very few research and development projects produce a commercial product. Product candidates, like the Onko-Sure® test kit or the CIT technology, that appear promising in the early phases of development, such as in early animal or human clinical trials, may fail to reach the market for a number of reasons: the product candidate did not demonstrate acceptable clinical trial results even though it

demonstrated positive preclinical trial results; the product candidate was not effective in treating a specified condition or illness; the product candidate had harmful side effects on humans; the necessary regulatory bodies, such as the SFDA, did not approve its product candidate for an

intended use; the product candidate was not economical for the Company to manufacture and commercialize;

and the product candidate is not cost effective in light of existing therapeutics. There may be other factors that prevent Radient from commercializing a product, such as the availability of sufficient cash to develop and market the product. The Company cannot guarantee it will be able to produce commercially successful products. Further, clinical trial results are frequently susceptible to varying interpretations by scientists, medical personnel, regulatory personnel, statisticians, and others, which may delay, limit, or prevent further clinical development or regulatory approvals of a product candidate. Also, the length of time that it takes for Radient to complete clinical trials and obtain regulatory approval in multiple jurisdictions for a product varies by jurisdiction and by product. The Company cannot predict the length of time to complete necessary clinical trials and obtain regulatory approval.


Jade’s operations in China involve significant risk. Jade’s operations in China are conducted as wholly foreign-owned enterprises (WFOEs), including a wholly owned subsidiary Jiangxi Jiezhong Bio-Chemical Pharmacy Company Limited (JJB). Risks associated with operating as a WFOE include unlimited liability for claims arising from operations in China and potentially less favorable treatment from governmental agencies in China than if operated through a joint venture with a Chinese partner. Jade’s Chinese operations are subject to the Pharmaceutical Administrative Law, which governs the licensing, manufacture, marketing, and distribution of pharmaceutical products in China and sets penalty provisions for violations of provisions of the Pharmaceutical Administrative Law. Compliance with changes in law may require Jade to incur additional expenditures or could impose additional regulation on the prices charged for its pharmaceutical products, which could have a material impact on Jade’s financial position, results of operations, and cash flows, and ultimately impair Radient’s investment in Jade. The Chinese government has the right to annex or take facilities it deems necessary. Currently, a portion of JJB’s facility that produces large- and small-volume parenteral solutions has been identified for annexation by the Chinese Military Department. The outcome of this event cannot be predicted at this time but, if the Chinese government takes this facility (although Jade expects that JJB will be compensated fairly for the facility), JJB will have to spend significant time and resources finding another location and restarting those operations in another area. Jade intends to consolidate JJB and any operations related to product lines retained after the sale of its wholly owned subsidiary, Yangbian Yiqiao Bio-Chemical Pharmacy Company Limited (YYB), into a single facility in a new location. This may in turn negatively affect the ability to monetize Radient’s investment in Jade. Any such new location will need to obtain GMP certification. Such annexation, or the threat of such annexation, may also negatively impact the Company’s ability to monetize its investment in Jade, affect the timing of any public listing in China, and negatively impact Jade’s results of operation and financial condition, and ultimately impair Radient’s investment in Jade. The value of China’s renminbi (RMB) fluctuates and is subject to changes in China’s political and economic conditions. Historically, the Chinese government has benchmarked the RMB exchange ratio against the U.S. dollar, thereby mitigating the associated foreign currency exchange rate fluctuation risk; however, no assurances can be given that the risks related to currency deviations of the RMB will not increase in the future. Additionally, the RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. Radient’s business is capital intensive and the Company may need additional operating capital. The Company’s business and operations are substantially dependent on the availability of enough cash to finance the costs of sales and marketing of the Company’s Onko-Sure® cancer test kits and fund ongoing selling, general, and administrative expenses of the Company’s business. Radient’s existing cash resources may be insufficient to meet its long-term needs. As of June 30, 2010, Radient had cash of approximately $2.5 million. The Company requires approximately $300,000 per month to fund the costs associated with its financing activities; SEC and NYSE reporting; legal and accounting expenses of being a public company; other general administrative expenses; research and development, regulatory compliance, and distribution activities related to Onko-Sure® test kit; the operation of a FDA-approved pharmaceutical manufacturing facility; and compensation of executive management. Accordingly, in the future the Company may require additional operating capital to meet these needs. No assurances can be given that Radient will be able to obtain additional financing in the future, if needed, for its operations. Radient’s independent registered public accounting firm has included a going concern paragraph in their report on the Company’s financial statements. While the Company’s independent registered public accounting firm expressed an unqualified opinion on its consolidated financial statements, Radient’s independent registered public accounting firm did include an explanatory paragraph indicating that there is substantial doubt about its ability to continue as a going


concern due to the Company’s significant operating loss in 2009, its negative cash flows from operations through December 31, 2009, and its accumulated deficit at December 31, 2009. Radient’s ability to continue as an operating entity currently depends, in large measure, upon its ability to generate additional capital resources. In light of this situation, it is not likely that the Company will be able to raise equity. While it seeks ways to continue to operate by securing additional financing resources or alliances or other partnership agreements, other than the exercise of outstanding Warrants, the Company does not at this time have any other commitments or agreements that provide for additional capital resources. The Company’s financial condition and the going concern emphasis paragraph may also make it more difficult for it to maintain existing customer relationships and to initiate and secure new customer relationships. Radient’s current products cannot be sold in certain countries if it does not obtain and maintain regulatory approval. The Company manufactures, distributes, and market its products for their approved indications. These activities are subject to extensive regulation by numerous state and federal governmental authorities in the U.S., such as the FDA and the Centers for Medicare and Medicaid Services (formerly Health Care Financing Administration) as well as the SFDA in China and by certain foreign countries, including some in the EU. Currently, Radient (and its distributors) are required in the U.S. and in foreign countries to obtain marketing clearance from those countries’ regulatory authorities before it can market and sell its products. Obtaining regulatory approval is costly and may take many years and, after it is obtained, remains costly to maintain. The FDA and foreign regulatory agencies have substantial discretion to terminate any clinical trials, require additional testing, delay or withhold registration and marketing approval, and mandate product withdrawals. In addition, later discovery of unknown problems with Radient’s products or manufacturing processes could result in restrictions on such products and manufacturing processes, including potential withdrawal of the products from the market. If regulatory authorities determine that the Company has violated regulations or if they restrict, suspend, or revoke its prior approvals, they could prohibit Radient from manufacturing or selling its products until the Company complies, or indefinitely. The Company’s future prospects will be negatively impacted if it is unsuccessful in pending litigation over the CIT technology. As detailed in Radient’s amended Annual Report (Form 10-K/A) filed on May 5, 2010, the Company is engaged in litigation with AcuVector Group, Inc. and with the Governors of the University of Alberta over its CIT technology. Radient believes that both actions are without merit. Radient believes that it will be able to settle this case during the fourth quarter 2010. Yet, if either AcuVector or the University is successful in their claims, the Company may be liable for substantial damages, its rights to the technology will be adversely affected, and its future prospects for exploiting or licensing the CIT technology will be significantly impaired. The value of intangible assets may not be equal to the Company’s carrying values. Radient’s intangible asset is the CIT technology, which it acquired from Dr. Chang in August 2001. Whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, the Company is required to evaluate the carrying value of this asset, including the related amortization periods. Whenever events or changes in circumstances indicate that the carrying value of an intangible asset may not be recoverable, the Company determines whether there has been an impairment by comparing the anticipated undiscounted cash flows from the operation and eventual disposition of the product line with its carrying value. If the undiscounted cash flows are less than the carrying value, the amount of the impairment, if any, will be determined by comparing the carrying value of this intangible asset with its fair value. Fair value is generally based on either a discounted cash flows analysis or market analysis. Future operating income is based on various assumptions, including regulatory approvals, patents being granted, and the type and nature of competing products.


Patent approval for eight original claims related to the CIT technology was obtained in May 2004 and a continuation patent application was filed in 2004 for a number of additional claims. No regulatory approval has been requested for Radient’s CIT technology and the Company may not have the funds to conduct the clinical trials required to obtain regulatory approval for its CIT technology. Accordingly, the Company entered into a five-year collaboration agreement to create one or more clinical trials that could lead to government approval in India. If the Company’s CIT technology is unable to pass the clinical trials required to obtain regulatory approval, or if regulatory approvals or patents are not obtained or are substantially delayed, or other competing technologies are developed and obtain general market acceptance, or market conditions otherwise change, Radient’s CIT technology and other intangible technology may have a substantially reduced value, which could be material. As intangible assets represent a substantial portion of assets in the Company’s consolidated balance sheet, any substantial deterioration of value could significantly impact its reported consolidated financial position and its reported consolidated operating results. If Radient’s intellectual property positions are challenged, invalidated, or circumvented, or if the Company fails to prevail in future intellectual property litigation, its business could be adversely affected. The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and often involve complex legal, scientific, and factual questions. To date, there has emerged no consistent policy regarding breadth of claims allowed in such companies’ patents. Third parties may challenge, invalidate, or circumvent Radient’s patents and patent applications relating to its products, product candidates, and technologies. In addition, the Company’s patent positions might not protect it against competitors with similar products or technologies because competing products or technologies may not infringe the Company’s patents. Radient faces substantial competition and others may discover, develop, acquire, or commercialize products before or more successfully than the Company does. Radient operates in a highly competitive environment. Its products compete with other products or treatments for diseases for which the Company’s products may be indicated. Additionally, some of Radient’s competitors market products or are actively engaged in research and development in areas where the Company is developing product candidates. Large pharmaceutical corporations have greater clinical, research, regulatory, and marketing resources than the Company does. In addition, some of its competitors may have technical or competitive advantages over it for the development of technologies and processes. These resources may make it difficult for Radient to compete with them to successfully discover, develop, and market new products. Radient has limited sales of the Onko-Sure® test kit and is reliant on its distributors for sales of the Company’s products. Virtually all of the Company’s operating revenues in the U.S. came from the sale of Onko-Sure® to distributor research users in foreign markets or from sales to a few domestic customers of certain original equipment manufacturer (OEM) products. Historically, Radient has not received any substantial orders from any of its customers or distributors for its Onko-Sure® test kits. For the year ended December 31, 2009, virtually all of the Company’s U.S. revenues were derived from sales of Onko-Sure® test kits to the Company’s distributors. In 2009, its U.S. sales substantially increased in comparison to prior years. To maintain exclusive rights in assigned territories, distribution partners must provide product marketing, sales management, logistics support, and meet contractual product minimums. Failing that, it is the Company’s prerogative to downgrade distribution partners to non-exclusive status or terminate agreements. Although Radient’s distributor network is increasing, any projection of future orders or sales of Onko-Sure® test kits is unreliable. In addition, the amount of Onko-Sure® test kits purchased by the Company’s distributors can be adversely affected by a number of factors, including market challenges of commercializing a recently approved biotechnology product, budget cycles, and the amount of resources available for marketing programs, demand creation activities, and outreach to appropriate healthcare professionals and targeted markets.


The Company has a significant amount of relatively short-term indebtedness that is in default and may be unable to satisfy its obligations to pay interest and principal thereon when due. As of April 14, 2010, the Company had the following approximate amounts of outstanding short-term indebtedness: (1) accounts payable of approximately $2 million; (2) an $85,000 unsecured bridge loan bearing interest at 12% per annum, which was due October 9,

2009, and obligations under a consulting agreement aggregating $144,000 due to Cantone Research, Inc. and Cantone Asset Management, LLC under a consulting agreement;

(3) approximately $2.5 million in unsecured Convertible Notes bearing interest at 10% per annum due

September 15, 2010; (4) roughly $3.6 million senior unsecured Promissory Notes bearing interest at 18% per annum

payable quarterly in cash, portions of which principal are due in December 2010 and the balance of the principal is due at varying dates through 2012;

(5) approximately $11 million represented by a series of 12% Convertible Notes, which are due at

various dates in March and April 2012; Radient is attempting to obtain stockholder approval to restructure and convert a significant portion of the indebtedness referred to in (2), (3), and (4) above; however, there can be no assurance that such indebtedness will be restructured, converted into equity, or that the requisite approvals therefore can be obtained. Without approval of the Company’s stockholders and the NYSE Amex to restructure these obligations or the receipt of a new financing or series of financings, the Company’s current operations do not generate sufficient cash to pay the interest and principal on these obligations when they become due. Accordingly, there can be no assurance that the Company will be able to pay these or other obligations that it may incur in the future. The Company is subject to risks associated with its foreign distributors. Radient’s business strategy includes the continued dependence on foreign distributors for its Onko-Sure® test kits. To date, the Company has not been successful in generating a significant increase in sales for Onko-Sure® test kits through distribution channels in existing markets or in developing distribution channels in new markets. Radient is also subject to the following risks associated with its distributor’s operations: (1) fluctuations in currency exchange rates; (2) compliance with local laws and other regulatory requirements; (3) restrictions on the repatriation of funds; (4) inflationary conditions; (5) political and economic instability; (6) war or other hostilities; (7) overlap of tax structures; and (8) expropriation or nationalization of assets. The inability to manage these and other risks effectively could adversely affect the Company’s business. Radient does not intend to pay dividends on its Common Stock in the foreseeable future. The Company currently intends to retain any earnings to support its growth strategy and does not anticipate paying dividends in the foreseeable future. If the Company fails to comply with the rules under the Sarbanes-Oxley Act related to accounting controls and procedures or if the material weaknesses or other deficiencies in its internal accounting procedures are not remediated, the Company’s stock price could decline significantly. Section 404 of the Sarbanes-Oxley Act required annual management assessments of the effectiveness of the Company’s internal controls over financial reporting commencing December 31, 2007. Radient’s management has concluded that the consolidated financial statements included in its Annual Report on Form 10-K as of December 31, 2009 and 2008 and for the two years ended December 31, 2009, fairly present in all material respects its consolidated financial condition, results of operations, and cash flows in conformity with accounting principles generally accepted in the U.S.


The Company’s management has evaluated the effectiveness of its internal control over financial reporting as of December 31, 2009 and 2008, based on the control criteria established in a report, entitled “Internal Control—Integrated Framework” and issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, Radient’s management has concluded that its internal control over financial reporting was not effective as of December 31, 2009 and 2008. During its evaluation, as of December 31, 2009, Company management identified material weaknesses in its internal control over financial reporting and other deficiencies. As a result, the Company’s investors could lose confidence in Radient, which could result in a decline in its stock price. Radient is taking steps to remediate its material weaknesses. If the Company fails to achieve and maintain the adequacy of its internal controls, it may not be able to ensure that it can conclude in the future that it has effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for the Company to produce reliable financial reports and are important to helping prevent financial fraud. If Radient cannot provide reliable financial reports or prevent fraud, its business and operating results could be harmed, investors could lose confidence in its reported financial information, and the trading price of its stock could decline significantly. In addition, the Company cannot be certain that additional material weaknesses or other significant deficiencies in the Company’s internal controls will not be discovered in the future. Radient’s stock price is volatile, which could adversely affect one’s investment. The Company’s stock price, like that of other international biopharmaceutical and/or cancer diagnostic and treatment companies, is highly volatile. Radient’s stock price may be affected by the following factors: clinical trial results; product development announcements by Radient or its competitors; regulatory matters; announcements in the scientific and research community; intellectual property and legal matters; broader industry and market trends unrelated to the Company’s performance; economic markets in Asia; and competition in local Chinese markets where Jade participates. In addition, if Radient’s revenues or operating results in any period fail to meet the investment community’s expectations, there could be an immediate adverse impact on the Company’s stock price. Radient’s stock price and financing may be adversely affected by outstanding Warrants and convertible securities. The Company has a significant number of Warrants outstanding and a large amount of Convertible Notes which overhang the market for the Company’s Common Stock. As of April 29, 2010, Radient had Warrants outstanding that are currently exercisable for up to an aggregate of approximately 22,268,929 shares of Common Stock at a weighted average exercise price of $1.03 per share; approximately 46,016,626 shares of Common Stock potentially issuable on conversion of its 10% Convertible Notes at $1.20 per share; and its various issues of 12% Convertible Notes exercisable at varying fixed prices and formula prices. The existence of and/or potential exercise of all or a portion of these securities create a negative and potentially depressive effect on Radient’s stock price because investors recognize that they over hang the market at this time.


In September 2008, Radient held a closing pursuant to which the Company issued Convertible Promissory Notes. The Note holders were also entitled to receive Warrants to purchase shares of Radient’s Common Stock upon conversion of the Notes. As of October 5, 2010, $217,268 principal of Notes were outstanding. Although the Notes matured on September 15, 2010, the cure period pursuant to the Notes required Radient to pay by September 29, 2010, to avoid a default. The Company did not pay by such time. Failure to do so constituted a default under the Notes, pursuant to which the Note holders could declare the full amount of the Notes immediately due and payable. Based on the Company’s current need for additional financing, the Company submitted a letter agreement to the Note holders to waive the default and extend the maturity date to November 15, 2010. Greater details of this agreement are provided in Radient’s Form 8-K filed with the SEC on October 5, 2010. As of the date of the filing, the Company had only received informal communications from the outstanding Note holders inquiring about payment on their Notes and had not received any formal default notices. Radient has limited product liability insurance. The Company currently produces products for clinical studies and for investigational purposes. It is producing its products in commercial sale quantities, which is expected to increase as the Company receives various regulatory approvals in the future. There can be no assurance, however, that users will not claim that effects other than those intended may result from the Company’s products including, but not limited to, claims alleged to be related to incorrect diagnoses leading to improper or lack of treatment in reliance on test results. In the event that liability claims arise out of allegations of defects in the design or manufacture of Radient’s products, one or more claims for damages may require the expenditure of funds in defense of such claims or one or more substantial awards of damages against it, and may have a material adverse effect on the Company by reason of its inability to defend against or pay such claims. Radient carries product liability insurance for any such claims, but only in an amount equal to $2 million per occurrence and $2 million aggregate liability, which may be insufficient to cover all claims that may be made against the Company.


Recent Events 10/19/2010—Radient Pharmaceuticals Corp.—together with its India-based distribution partner, Jaiva Technologies, Inc., and Jaiva’s subsidiary, Gaur Diagno, Pvt Ltd—announced the launch of a cancer education and screening program in India. India is a key international market where Gaur Diagno is actively commercializing Radient’s Onko-Sure® in vitro diagnostic (IVD) cancer test kit. The goal of the program is to drive public education, raise market awareness, and offer Onko-Sure® as a commercialized cancer screening test that can potentially help stop the rising cancer epidemic in India. 10/13/2010—Announced, together with Provista Life Sciences, the validation study results of a blood test for the early detection of lung cancer. The study completed the analyses and data evaluation necessary to demonstrate that Provista Life Sciences’ test—which is based on Radient’s antigens for fibrinogen degradation products—can accurately detect lung cancer. Greater details of this study are provided on page 31. Radient also announced that, on September 27, 2010, the Company signed an extension of its original agreement dated July 13, 2010, to merge with Provista Diagnostics Inc., making the agreement between Provista Diagnostics and Radient effective through December 31, 2010. Provista Diagnostics Inc. is currently a wholly owned subsidiary of Provista Life Sciences. As well, Radient reported that both companies had confirmed continued interest in the merger, with plans to pursue completion of the agreement within a timeframe that suits the needs of both entities and shareholders. 09/28/2010—Announced, through its subsidiary AMDL Diagnostics Inc. (ADI), that Radient had entered into an exclusive five-year full-service distribution agreement with Phu Gia Trading Co. Ltd. to expand Onko-Sure® into the Vietnam, Laos, and Cambodia healthcare markets. Phu Gia is expected to work directly with the Vietnam Ministry of Health and other government officials to secure approvals and regulatory clearances. Phu Gia committed to purchase a minimum of 2,425 Onko-Sure® kits over the duration of the agreement. 09/07/2010—Announced that it planned to reschedule its annual shareholders’ meeting originally planned for August 31, 2010. As noted in Radient’s Form 8-K filed September 7, 2010, due to the continuing U.S. Securities and Exchange Commission (SEC) review of the Company’s proxy statement and periodic reports that Radient is required to submit to its shareholders with the proxy statement, the Company was unable to give shareholders proper notice of the meeting. Radient filed its response to the SEC’s most recent letter on August 31, 2010, and was working diligently with its outside securities counsel and independent auditors and communicating with the SEC reviewers handling these filings to reschedule the meeting as soon as possible. Due to the ongoing comment period with the SEC, Radient intended to wait until it was closer to clearing the comments before setting a new meeting date. As a result of the Shareholders’ meeting delay, Radient was not in compliance with certain terms contained in the Notes from the March and April 2010 financing, and the Company was negotiating with Note holders to remediate this issue. Further details are provided in Radient’s Form 8-K filed on September 7, 2010. 08/31/2010—Announced that the Company had resumed collaborations with Mayo Collaborative Services, Inc. to conduct a clinical study for the validation of Radient’s FDA-cleared Onko-Sure® IVD cancer test kit as a useful tool in colorectal cancer (CRC) recurrence and/or treatment monitoring. The companies planned to test over 1,000 CRC patient samples in various disease stages to directly compare the results of the Onko-Sure® test versus the carcinoembryonic antigen (CEA) test. The primary goal of the study is to determine whether Onko-Sure® is more effective than CEA at detecting early stage CRC. This study is scheduled to be completed in the fourth quarter 2010. Radient expects to provide data generated from the study to Mayo Collaborative Services physicians and investigators for publication in medical journals. 08/26/2010—Announced target market details for the domestic and international commercialization of Onko-Sure®. The Company is focusing on four target markets: (1) FDA-approved use and sales of Onko-Sure® as a CRC monitoring test in the U.S. and eventually Canada; (2) FDA-approved use and sale of Onko-Sure® as a CRC monitoring test in various international markets; (3) use and sale of Onko-Sure® as a general cancer screening test predominately outside the U.S. (currently in Taiwan and Korea); and (4) Health Canada-approved use and sales of Onko-Sure® as a lung cancer screening and monitoring test.


08/24/2010—Announced availability of its 2010 Reference Guide for Onko-Sure®. The guide provides oncologists, physicians, and clinicians with current information and clinical data related to Onko-Sure® and serves as a comprehensive reference for other healthcare professionals, consumers, and patients. 08/17/2010—Announced that it filed a Notification of Late Filing under Rule 12b25 of the Securities Exchange Act of 1934, as amended, with SEC for its Quarterly Report on Form 10-Q for the second quarter ended June 30, 2010. The Company has now filed its unaudited results and the filing of its Form 10-Q with the SEC for the fiscal year (FY) second quarter 2010. For the three month period ending June 30, 2010, Radient reported revenues of approximately $45,000 versus corporate segmented revenues of $3,181,043 in the second quarter of FY2009. Radient reported a comprehensive second quarter loss of $29,290,054 ($1.00 per share) in FY2010 versus $8,095,558 ($0.51 per share) in FY2009. Interest expense, the fair value of debt conversions, and impairment on investment in its China-based subsidiary, Jade Pharmaceuticals Inc., contributed roughly $26.3 million (or nearly 90%) to this loss during the period ended June 30, 2010. 08/16/2010—Announced that Mr. Mathi Senapathi had joined the Company’s executive management team as director of manufacturing, responsible for the manufacturing of Radient’s Onko‐Sure® cancer test kits. Mr. Senapathi has over 18 years of diverse pharmaceutical industry experience, including roles in laboratory quality control and research, quality assurance, advanced clinical and anatomic pathology, regulatory compliance and systems monitoring and control for Good Laboratory Practice (GLP), Good Manufacturing Practice (GMP), Good Clinical Practice (GCP), and program monitoring for International Organization for Standardization (ISO) 9001 and ISO 13485:2003 drug safety evaluation.

08/12/2010—Announced plans to present its Onko‐Sure® IVD cancer test kit to distribution partners at the annual Vietnam international medical, hospital, and pharmaceutical exhibition—Vietnam Medi‐Pharm Expo 2010—held August 18‐21, 2010, at the Tan Binh International Exhibition and Convention Center in Ho Chi Minh City, Vietnam. 08/12/2010—Announced the appointment of Mr. Gary Giarratano as director of North American sales and marketing, responsible for managing the Company’s sales and marketing strategy, operations, and Onko‐Sure® sales for North America. 07/29/2010—Announced that Perceptive Imagineering LLC, Radient’s distribution partner for Central America, South America, Mexico, and the Caribbean, launched a Spanish language website (www.perceptive-imagineering.com/onko-sure) adapted for the Latin American culture in support of the product commercialization of Onko-Sure®. 07/28/2010—Announced that its China-based subsidiary, Jade, signed a Letter of Intent to acquire Shanxi BaoTai Pharmaceutical Co., Ltd. (“BaoTai”), a privately owned pharmaceutical manufacturing company located in Taiyuan, China, through a nontaxable merger of business assets. The Company expected the transaction to close in mid-November 2010 assuming all closing conditions are satisfied or waived. The transaction was designed to combine the strengths of Jade and BaoTai, two Chinese pharmaceutical companies, into a single formidable enterprise focused on developing cancer-centric products recognized for quality, branded product names, and technical leadership. 07/22/2010—Announced plans to present at the 2010 American Association for Clinical Chemistry (AACC) Annual Meeting and Clinical Lab Expo held at the Anaheim Convention Center on July 25-29, 2010. The annual AACC meeting is the world’s largest gathering of clinical laboratory professionals dedicated to improving laboratory science and healthcare in all facets. The Expo provided Radient the opportunity to meet with conference attendees and showcase Onko-Sure®. The Company also provided attendees with the latest clinical studies and product information on Onko-Sure®. 07/20/2010—Announced the appointment of Robert Beart, Jr., M.D., as an independent member of Radient’s Board of Directors to fill the vacancy of the late Dr. Edward Arquilla, increasing the number of independent directors to three. Dr. Beart is currently the medical director of the Glendale Memorial Hospital and Health Center’s Colorectal Surgery Institute. Previously, he had been with the University of Southern California (USC) since 1992, establishing the Division of Colorectal Surgery in the USC Department of Surgery as well as launching the USC Center for Colorectal Diseases at USC University Hospital and USC Norris Comprehensive Cancer Center.


07/15/2010—Announced that it had launched a new investor video channel on its corporate website (www.radient-pharma.com) to deliver regularly scheduled, dynamic video content to Wall Street and the investing community. 07/14/2010—Announced the launch of its newly designed corporate website and video located at www.radient-pharma.com as well as its recently launched Onko-Sure® product website (www.onko-sure.com). 07/13/2010—Announced that it entered into a Letter of Intent to acquire Provista Diagnostics Inc., a wholly owned subsidiary of Provista Life Sciences (a diagnostics development and commercialization firm based in Phoenix, Arizona). Radient intends to acquire Provista Diagnostics as a wholly owned subsidiary in a stock‐for‐stock transaction following the completion of respective due diligence for both companies. Provista Diagnostics owns rights, patents, and trademarks for diagnostic technologies that Radient believes could strengthen and complement its core business. 06/24/2010—Announced Jaiva’s plans to submit a clinical trial application to the Central Drugs Standard Control Organization (CDSCO) in India to commence human Phase II trials for Radient’s Combination Immunogene Therapy (CIT) technology as a vaccine therapy for non-small cell lung carcinoma (NSCLC). 06/22/2010—Announced a conference call to update investors on its 2010 commercialization strategy for Onko-Sure® at 1:00 p.m. PST on June 24, 2010. 06/14/2010—Through its U.S.-based subsidiary, ADI, Radient released an update regarding its Onko-Sure® commercialization efforts in India. The Company’s exclusive distributor in India, Gaur Diagno, planned to implement a government-supported general cancer screening program for select populations with high cancer rates. 06/11/2010—Launched a new interactive website for Onko‐Sure® (www.onko-sure.com), which offers detailed information on Radient’s proprietary, FDA‐cleared Onko‐Sure® IVD cancer test kit, CLIA laboratory testing resources, and general information on cancer screening, testing, and treatment. 06/07/2010—Announced that its partner, Provista Life Sciences, was developing requisite clinical data through a validation study of DR‐70 reagents to support the introduction of Radient’s Onko‐Sure® as a laboratory-developed test for general cancer screening. 06/02/2010—Announced that it had entered into a strategic partnership agreement with Perceptive Imagineering LLC to expand the commercialization of Onko‐Sure® in Latin America. 05/25/2010—Announced unaudited results and the filing of its Form 10‐Q with the SEC for the first quarter FY2010 ended March 31, 2010. For the three‐month period, Radient reported revenues of $37,000 versus corporate segmented revenues of $23,000 in the first quarter FY2009. Radient reported a comprehensive first quarter loss of roughly $2.60 million ($0.11 per share) in FY2010 versus approximately $1.65 million ($0.12 per share) in FY2009. Roughly $870,000 of the first quarter FY2010 losses from operations were due to amortization of debt discount and accretion of debt issuance costs. 05/14/2010—Announced through ADI that its executive management would be in India on May 20-25, 2010, with the goal of accelerating the commercialization of Onko‐Sure® in India through distribution partnerships with Gaur Diagno. 05/05/2010—Announced through ADI that it had signed a collaboration agreement with Provista Life Sciences, under which Provista Life Sciences provides CLIA laboratory support services to Radient, including support for the ongoing product development of Onko-Sure® and securing insurance reimbursement and Current Procedural Terminology (CPT) code assignments for clinical laboratories. 05/04/2010—Announced through ADI that Provista Life Sciences had independently validated the Onko-Sure® test kit as a potential screening tool for breast cancer detection. The validation follows Provista Life Sciences’ completion of a 37-patient Phase I trial designed to provide a preliminary evaluation of the use of Onko-Sure® as a complement to the company’s existing BT Test® breast cancer screen. The Phase I trial was run by Provista Life Sciences in the company’s Arizona‐based CLIA laboratory.


04/29/2010—Announced the fourth and final closing of a 12% Convertible Promissory Note and Warrant financing for the sale of additional Notes in the aggregate principal amount of $685,170 and Warrants to purchase 814,798 shares of Radient’s Common Stock. When combined with the first three closings, the total aggregate principal amount of Notes was approximately $11,057,000 with Warrants to purchase up to roughly 13,149,000 shares of Radient’s Common Stock. Net proceeds for the four financings were nearly $6.4 million.

04/26/2010—Announced through ADI that it had established a cancer‐specific Medical Advisory Board with plans to secure an oncology expert as Radient’s director of oncology. In this role, Radient’s director of oncology directs and oversees clinical studies to support product efficacy for Onko-Sure®. 04/22/2010—Announced through ADI that it planned to expand its worldwide commercialization strategy for Onko-Sure® to include CLIA laboratory testing services in the U.S. and Canada through corporate partnerships. 04/21/2010—Announced through ADI that it planned to present at the 2010 American Society of Clinical Oncology (ASCO) Annual Meeting in Chicago from June 4‐8, 2010. ASCO is the world’s leading professional organization representing physicians who care for people with cancer. With more than 28,000 members, ASCO is committed to improving cancer care through scientific meetings, educational programs, and peer‐reviewed journals. 04/16/2010—Announced the third closing of its 12% Convertible Promissory Note and Warrant financing. In the third closing, Radient sold an additional $3,957,030 in aggregate principal amount of Notes. When combined with the first and second closings, that total aggregate principal amount of Notes exceeded $10.4 million. The net proceeds for the third closing were approximately $2.31 million. Warrants to purchase 4,705,657 shares of Radient’s Common Stock were also issued as a part of the third closing. The terms of the Notes and the Warrants are substantially similar to the terms of the Notes and Warrants issued in the first and second closings, with the exception the exercise price of the Warrants issued in the third closing was $0.69 per share. 04/14/2010—Announced that the Journal of Immunoassay and Immunochemistry (April 2010, Volume 31) published a peer‐reviewed journal article written by Dr. Andrea Small‐Howard (Radient’s vice president, scientific oversight) and Mr. Holden Harris entitled “Advantages of the AMDL‐ELISA DR‐70 (FDP) Assay Over Carcinoembryonic Antigen for Monitoring Colorectal Cancer Patients.” The article introduced Onko‐Sure® and discussed the importance of screening and monitoring tools in enhancing survival in post‐operative CRC patients. 04/13/2010—Announced the second closing of a 12% Convertible Promissory Note and Warrant financing for the sale of additional Notes in the aggregate principal amount of $5,524,425. The first financing, which closed on March 26, 2010, included one Note in the original principal amount of $925,000 and Warrants to purchase up to 1,100,000 shares of Radient’s Common Stock. Net proceeds for the first financing were approximately $540,000. 04/09/2010—Announced through ADI that it extended its partnership with GenWay Biotech Inc., signing an exclusive five-year marketing, sales, and distribution agreement to commercialize Onko-Sure® in Russia and the former Soviet Republics.

04/08/2010—Announced through ADI that it had signed an exclusive five‐year sales, marketing, and distribution agreement with Jaiva and its affiliate, Gaur Diagno.

04/07/2010—Announced that it had entered into an exclusive five‐year collaboration agreement with Jaiva. Under the terms of the agreement, Jaiva is collaborating with clinical laboratories, hospitals, and physicians in India to conduct clinical trials for Radient’s Combination Immunogene Therapy (CIT) technology. Additionally, Jaiva is supporting Radient in securing Indian government approval for the use of CIT as a cancer therapy and vaccine throughout the country. 03/26/2010—Announced that on March 24, 2010, it received notice from NYSE Amex indicating it had accepted the Company’s business plan of compliance, which was timely submitted on January 25, 2010, and granted Radient an extension until June 23, 2010, to regain compliance with the Exchange’s continued listing standards.


03/26/2010—Announced the completion of a Convertible Promissory Note and Warrant financing in the original principal amount of $925,000 and the right to purchase up to 1,100,000 shares of Radient’s Common Stock. The Note was issued with a 20% original issue discount and significant fees were charged by the lender. Accordingly, the net proceeds of the financing were approximately $540,000. 03/23/2010—ADI announced that it made available its whitepaper, entitled “Radient Pharmaceuticals Corporation National and Regional Cancer Screening Programs.” The paper introduced Radient’s general cancer screening program designed to accelerate government support for general cancer screening in Australia, Brazil, Canada, China, Colombia, France, Germany, India, Spain, Saudi Arabia, the UK, and the U.S. The paper also outlined the economic and healthcare benefits of routine cancer screening, including the potential to detect cancer in its earliest stages and the qualities of Onko‐Sure® that enable physicians and patients to effectively detect and monitor solid tumor cancers. 01/26/2010—Announced it had submitted a business plan to the NYSE Amex demonstrating its ability to achieve compliance with continued listing standards. 12/28/2009—Announced that it had received notice from the NYSE Amex that the Company is not in compliance with the continued listing standard in Section 1003(a)(iv) of the Exchange’s Company Guide. 12/18/2009—Announced that Jade signed a strategic advisory agreement with Security Research Associates, Inc. (SRA). Under the terms of the agreement, SRA provides advisory services to Radient for the sale and/or financing of Jade, with the goal of maximizing the monetization of this operating asset. As of Radient’s third quarter 2009 financial statements, Jade was valued at approximately $20.5 million. 11/30/2009—Announced that it had entered into definitive agreements to sell an aggregate of 3,289,472 shares of its Common Stock at a price per share of $0.28 pursuant to a registered direct offering to institutional investors, resulting in gross proceeds of approximately $1 million. 11/30/2009—Announced that, due to requirements related to the Company’s registered direct finance offering and shareholder requests, it changed the date of its previously announced third quarter earnings results conference call from November 30, 2009, to December 3, 2009.

11/24/2009—Announced unaudited results and the filing of its Form 10‐Q for the third quarter 2009.

11/16/2009—Announced that it filed a Notification of Late Filing under Rule 12b‐25 of the Securities Exchange Act of 1934, as amended, with the SEC for its Quarterly Report on Form 10‐Q for the third quarter ended September 30, 2009. 10//15/2009—Announced it entered into a collaboration agreement through ADI with CeTeCancer, a Chilean‐based research laboratory, to validate the effectiveness of Onko‐Sure® as an early detection and prevention test for lung cancer.

10/08/2009—Announced through ADI that it had entered into an exclusive five‐year marketing and distribution agreement with Grifols USA, LLC. Under the terms of the agreement, Grifols can market and sell Onko‐Sure® to hospitals, clinical labs, clinics, and other healthcare organizations throughout the U.S. as a tool to monitor CRC.

10/06/2009—Announced through ADI that it entered into a two‐year distribution agreement with Tarom Applied Technologies Ltd. to market and sell Onko-Sure®. Tarom is a privately owned distributor of products in the biomedical sector with over 20 years of exclusive representation for OEM diagnostic systems and reagents, biotech, and research products and veterinary systems. Tarom is the exclusive distributor to the Israeli market and sells outside of Israel to leading worldwide manufacturers in the diagnostic and biomedical fields. 09/29/2009—Announced that it had fully completed its corporate name change to Radient Pharmaceuticals Corp. and commenced trading on the NYSE Amex under the ticker symbol “RPC.” 09/18/2009—Announced that its stockholders approved the name change and rebranding of the Company as “Radient Pharmaceuticals Corp.” with the new ticker symbol on the NYSE Amex as “RPC.” The Company filed an amendment to its Articles of Incorporation to implement this change effective prior to the open of the markets on September 25, 2009.


Appendix

N=79 (Control=20, Cancer=59 [20 liver, 18 lung, 7 ovarian, 6 breast, 5 stomach, 2 lymhoma, 1 brain])

2.) Ding L, Ping S, Jingmei Y. "Application of tumor marker of DR-70 in the diagnosis of malignant tumors." Chongqing Medical Journal 28.5 (1999).

PUBLISHED CLINICAL STUDIES SUPPORTING ONKO-SURE® AS A GENERAL CANCER SCREEN


Table 16

N=413 (Control=136, Cancer=277 [41 lung, 27 stomach, 23 breast, 15 rectum, 6 colon, 5 liver, 6 ovary, 5 esophagous, 3 cervical, 2 trophoblast, 1 thyroid, 1 lymphoma, 1 pancreatic])

1.) Wu D, Zhou X, Yang G, et al. "Clinical performance of the AMDL DR-70 immunoassay kit for cancer detection." Journal of Immunoassay and Immunochemistry 19.1 (1998): 63-72.

Source: Radient Pharmacueticals Corporation.

N=4,169 (Control=4,127, Cancer=42 [5 colorectal, 7 ovarian, 19 breast, 2 hepatocellular, 5 stomach, 4 thyroid])

N=136 (Control=0, Cancer=136)

3.) Kerber A, Trojan J, Herrlinger K, Zgouras D, Caspary WF, Braden B. "The new DR-70 immunoassay detects cancer of the gastrointestinal tract: a validation study." Alimentary Pharmacology & Therapeutics 20 (2004): 983-098.

N=185 (Control=100, Cancer=85 [30 colorectal, 19 hepatocellular, 10 cholargiocellular, 13 pancreatic, 10 stomach, 3 esophageal])

4.) Lee KH, Cho DH, Kim KM, et al. "Meaning of the DR-70 immunoassay for patients with the malignant tumor." Immune Network 6.1 (2006): 43-51.

5.) Gieseler F, Luhr L, Kunze T, et al. "Activated coagulation factors in human malignant effusions and their contribution to cancer cell metastatsis and therapy." Journal of Thrombosis and Haemostasis 97.6 (2007): 1023-1030.


Glossary Antiemetic—A drug that prevents or alleviates nausea and vomiting. Biopsy—A small sample of tissue that is taken and examined under a microscope for the presence of cancer. Bronchoscopy—A medical procedure where a scope is put through the nose or mouth, down the throat, and into the lung to examine the lung and help diagnose various lung diseases. Cancer Marker—A substance produced by tumor cells or by other cells of the body in response to cancer or certain benign (non-cancerous) conditions. These substances can be found in the blood, urine, tumor tissue, or other tissues. Different tumor markers are found in different types of cancer, and levels of the same tumor marker can be altered in more than one type of cancer. Also called “tumor markers.” Carcinoembryonic Antigen (CEA)—A glycoprotein in fetal gastrointestinal tissue and in the cells or serum of adults who have certain cancers. A blood test using CEA as a tumor marker can be useful in monitoring the treatment of CEA-rich tumors, including intestinal cancer. The normal CEA range is <2.5 ng/ml in an adult non-smoker and <5.0 ng/ml in a smoker. The most common cancers that elevate CEA are in the colon and rectum. Others include cancer of the pancreas, stomach, breast, lung, and certain types of thyroid and ovarian cancer. Levels over 20 ng/ml before therapy are associated with cancer that has already metastasized. Benign conditions that can increase CEA include smoking, infection, inflammatory bowel disease, pancreatitis, cirrhosis of the liver, and some benign tumors (in the same organs which have cancers with increased CEA). CE Mark—Conformité Européenne. A mandatory European marking for certain product groups to indicate conformity with the essential health and safety requirements set out in European Directives. To permit the use of a CE Mark on a product, proof that the item meets the relevant requirements must be documented. Cleaving—Splitting a complex molecule into simpler molecules. Clinical Laboratory Improvement Amendments (CLIA)—Passed by Congress in 1988, the CLIA regulations were designed to establish quality standards for all laboratory testing to ensure the accuracy, reliability, and timeliness of patient test results regardless of where a test is performed. The Centers for Medicare & Medicaid Services (CMS) assumes primary responsibility for financial management operations of the CLIA program, which is user fee funded. The FDA is responsible for categorizing commercially marketed IVD tests under CLIA, including the process of assigning commercially marketed IVD test systems to one of three CLIA regulatory categories based on their potential for risk to public health: (1) waived tests; (2) tests of moderate complexity; and (3) tests of high complexity. Clinical Reference Laboratory—A laboratory where tests directly related to the care of patients are performed. Such laboratories use material obtained from patients for testing versus research laboratories, where animal and other sources of test material are also used. Colonoscopy—In this test, the rectum and entire colon are examined using a lighted instrument called a colonoscope. During a colonoscopy, precancerous and cancerous growths throughout the colon can be found and either removed or biopsied, including growths in the upper part of the colon, where they would be missed by a sigmoidoscopy. However, it is not yet known for certain whether a colonoscopy can help reduce the number of deaths from CRC. A thorough cleansing of the colon is necessary before this test, and most patients receive some form of sedation.


Computerized Tomographic (CT) Colonography—Also called virtual colonoscopy, this test uses special x-ray equipment to produce pictures of the colon and rectum. A computer then assembles these pictures into detailed images that can show polyps and other abnormalities. Because it is less invasive than standard colonoscopy and sedation is not needed, virtual colonoscopy may cause less discomfort and take less time to perform. As with standard colonoscopy, a thorough cleansing of the colon is necessary before this test. Whether virtual colonoscopy can reduce the number of deaths from CRC is not yet known. Computed Tomography (CT) Scan—A diagnostic imaging technique where an x-ray machine and a computer are used to create detailed images of tissues and structures in the body. Continuation Patent Application—A U.S. patent application that claims priority from a previously filed application. A continuation application is usually filed when the Patent Office has responded to the parent application with a “final” office action (rejecting the claims in the application), but the applicant wishes to revise the claims again. A continuation application receives the priority date of its parent application. D-dimer—A fragment produced during the degradation of a clot. D-dimer results from complete breakdown of the clot. D-dimer concentration may be determined by a blood test. D-dimer tests are ordered, along with other laboratory tests and imaging scans, to help rule out, diagnose, and monitor diseases and conditions that cause hypercoagulability, which is a tendency to clot inappropriately. DNA—Genetic material of all living organisms (except for RNA-carrying viruses, such as HIV), which is a double-stranded, helical molecular chain found within each cell. DNA contains the information necessary for cells to produce proteins, which enable cells to reproduce and carry out their functions. Double Contrast Barium Enema—In this test, a series of x-rays of the entire colon and rectum are taken after the patient is given an enema with a barium solution and air is introduced into the colon. The barium and air help to outline the colon and rectum on the x-rays. Research shows that this test may miss small polyps. It detects about 30% to 50% of the cancers that can be found with standard colonoscopy. Dukes Stages A and B—Dukes A means the cancer is only affecting the innermost lining of the colon or rectum or slightly growing into the muscle layer. Dukes B means the cancer has grown through the muscle layer of the colon or rectum. The Dukes stages were formerly used as a classification system for CRC, although this method has been replaced by a more detailed staging system and is no longer recommended for use in clinical practice. Enzyme-linked Immunosorbent Assay (ELISA)—A sensitive immunoassay that uses an enzyme linked to an antibody or antigen as a marker for the detection of a specific protein, especially an antigen or antibody. It is often used as a diagnostic test to determine exposure to a particular infectious agent, such as the AIDS virus, by identifying antibodies present in a blood sample. False Positives—A test result that is read as positive but is actually negative; a test that shows evidence of a disease when it is not present. Fibrin and Fibrinogen Degradation Products (FDPs)—The substances left behind when clots dissolve in the blood. Fibrinogen is a protein present in blood plasma that converts to fibrin when blood clots. Fibrin makes a clot harder to break up. It forms the mesh or net that holds platelets in place. Good Manufacturing Practice (GMP)—Regulations established by the FDA for all domestic and foreign manufacturers requiring the establishment of a quality system that includes stipulations related to the methods, controls, and facilities used for designing, manufacturing, packaging, labeling, storing, installing, and servicing products and medical devices intended for human use. Humanized—Carrying functioning human genes, cells, tissues, or organs. In Vitro Diagnostics (IVD)—Tests performed in vitro (outside the body) that can detect or monitor diseases, conditions, or infections.


ISO 13485:2003—Specifies requirements for a quality management system where an organization needs to demonstrate its ability to provide medical devices and related services that consistently meet customer and regulatory requirements applicable to medical devices and related services. Magnetic Resonance Imaging (MRI)—The use of a powerful magnetic field and radio waves to alter the natural alignment of hydrogen atoms within the body. Computers record the activity of the hydrogen atoms and translate that into images to obtain two-dimensional views of an internal organ or structure, especially the brain and spinal cord. These images are used to assess response to treatment, especially cancer chemotherapy or radiation therapy. Microtiter—A flat plate with many “wells” used as small test tubes. Used mostly in laboratories and pharmacies, a microtiter plate may have 6, 24, 96, 384, 1,536, or up to 9,600 wells arranged in rows. Nonpolypoid—Not resembling a polyp. Conventional CRC prevention techniques have focused on detecting and removing polypoid (resembling a polyp) neoplasms (new and abnormal growths). Recent studies, however, have demonstrated that CRC can also arise from nonpolypoid colorectal neoplasms, which are more difficult to detect by colonoscopy or computed tomographic (CT) colonography because the findings are subtle and can be difficult to distinguish from those of normal mucosa (membrane). Pre-screen—A preliminary test used to determine whether or not to proceed with a more detailed evaluation. In oncology, a cancer pre-screen may be used first to determine a patient’s likelihood of cancer before a more costly or invasive test is performed. However, cancer pre-screens typically do not provide any information about the location of the tumor and must be followed by other diagnostic tests. Onko-Sure® is a non-invasive, low-cost pre-screening tool used to assess a patient’s risk of having cancer. A positive result may warrant follow-up tests by the physician to diagnose the patient and, if cancer is present, to determine an appropriate treatment regimen. Plasmin—An enzyme that dissolves the fibrin of blood clots. Polyp—An abnormal, often precancerous growth of tissue (colorectal polyps are growths of tissue inside the intestine). Radioimmunoassay—A very sensitive, specific laboratory test (assay) using radioactively labeled (and unlabeled) substances in an immunological (antibody-antigen) reaction. RNA—A molecule that is chemically similar to DNA and carries the same code. When DNA is biochemically read or transcribed, the transcription product is composed of RNA. This RNA is read, in turn, by the cell’s biochemical machinery and converted into a corresponding protein. SDS-PAGE—A technique widely used in biochemistry, forensics, genetics, and molecular biology to separate proteins according to their electrophoretic mobility (a function of length of polypeptide chain or molecular weight). Serum—The watery fluid of the blood that resembles plasma but contains fibrinogen. Sigmoidoscopy—In this test, the rectum and lower colon are examined using a lighted instrument called a sigmoidoscope. During sigmoidoscopy, precancerous and cancerous growths in the rectum and lower colon can be found and either removed or biopsied. Studies suggest that regular screening with sigmoidoscopy after age 50 can help reduce the number of deaths from CRC. A thorough cleansing of the lower colon is necessary for this test. Sputum Testing—Microscopic examination of the cells that are either coughed up from the lungs or are collected through a bronchoscope. Sputum analyses can diagnose at least 30% of lung cancers, some of which do not show up on chest x-rays. This laboratory test can help detect cancer in the early stages, before it spreads to other regions. The sputum test does not, however, provide any information about the location of the tumor and must be followed by other diagnostic tests.


Stage I—In general, Stage I tumors are relatively small and contained within the organ where they originate. Stage II—A tumor that has grown larger and may begin to spread into surrounding tissue. Stage III—Larger tumors that may have started to spread into surrounding tissues. As well, cancer cells may be present in the lymph nodes. Thrombin—An enzyme that acts on fibrinogen in blood causing it to clot.


Intentionally Blank.


Jeffrey J. Kraws and Karen B. Goldfarb

Phone: (609) 306-2274 Fax: (609) 395-9339

Email: [email protected] Web: www.crystalra.com

Legal Notes and Disclosures: This report has been prepared by Radient Pharmaceuticals Corp. (“Radient” or “the Company”) with the assistance of Crystal Research Associates, LLC (“CRA”) based upon information provided by the Company. CRA has not independently verified such information. In addition, CRA has been compensated by the Company in cash of sixty-one thousand U.S. dollars and four hundred thousand, four-year warrants for its services in creating this report, for updates, and for printing costs. Some of the information in this report relates to future events or future business and financial performance. Such statements constitute forward-looking information within the meaning of the Private Securities Litigation Act of 1995. Such statements can be only predictions and the actual events or results may differ from those discussed due to, among other things, the risks described in Radient’s reports on its 10-K, 10-Q, press releases, and other forms filed from time to time. The content of this report with respect to Radient has been compiled primarily from information available to the public released by Radient. The Company is solely responsible for the accuracy of that information. Information as to other companies has been prepared from publicly available information and has not been independently verified by Radient or CRA. Certain summaries of scientific activities and outcomes have been condensed to aid the reader in gaining a general understanding. For more complete information about Radient, the reader is directed to the Company’s website at www.radient-pharma.com. This report is published solely for information purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any state. Past performance does not guarantee future performance. Additional information about Radient and its public filings, as well as copies of this report, can be obtained in either a paper or electronic format by calling (714) 505-4461.

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