This news release constitutes a "designated news release" for the purposes of the Company's prospectus supplement dated April 9, 2021 to its short form base prospectus dated March 31, 2021
Halifax, Nova Scotia--(Newsfile Corp. - November 8, 2021) - Sona Nanotech Inc. (CSE: SONA), (OTCQB: SNANF) (the "Company" or "Sona"), a developer of rapid, point-of-care diagnostic tests, is pleased to announce that it has entered into a binding licensing agreement with U.S. Food and Drug Administration ("FDA") registered Arlington Scientific Inc. ("ASI" or "Arlington") of Springville, Utah, an in-vitro diagnostics developer, manufacturer and distributor, to bring Sona's rapid saliva COVID-19 test to market. Under the terms of the agreement, Sona licenses the intellectual property for its rapid saliva COVID-19 test and ASI undertakes to secure an FDA Emergency Use Authorization ("EUA") for point-of-care and at-home use for the test and any necessary associated activities, including medical ethics review board approval, the coordination and underwriting of US-based clinical and any other studies, and FDA EUA application submissions and follow-up. If an FDA EUA is granted, Arlington will coordinate manufacturing and distribution of the test in the U.S. exclusively on a profit-sharing basis by which it would also earn a share of any of Sona's profits from international sales.
Over the past few months, the Company undertook a thorough analysis and optimization work for its rapid saliva COVID-19 test which resulted in modifications being made to its design. A preliminary evaluation of the resulting test, run by Arlington, compared thirty-seven live viral samples from patients that had generated a positive result with a BinaxNow COVID-19 rapid antigen test. Of the thirty-seven samples tested, thirty-four generated a positive result on both tests. Further testing in a independent lab using PCR confirmed frozen positive samples with CT cut-off of 30 cycles and frozen, pre-COVID-19 negative samples, generated 93% sensitivity (14/15) and 100% specificity (30/30). Further evaluation against PCR test-confirmed COVID-19 positive samples will be required for any regulatory submission or declaration.
Under the terms of the licensing agreement which was signed today, Sona provides ASI with a license to the test technology, its documentation and ancillary support, as well as providing key biological materials for the test at its cost. ASI is responsible for securing an FDA EUA and all associated data required as outlined in the FDA EUA templates or requested by the FDA during the review and approval process. If ASI secures an FDA EUA for the test within six months, ASI will be permitted to manufacture and distribute the test in the US exclusively, subject to certain conditions, and will pay Sona a set percentage of profits from its test sales under a formula that accounts for certain costs of goods sold from each party. Further, ASI will receive from Sona a set percentage of its profits of other sales not facilitated by ASI. The agreement has a term of five years, after which it is annually renewable by mutual agreement of the Parties, and provides both parties with customary audit rights.
Sona's CEO, David Regan, commented: "We are pleased that we took the time necessary to undertake the highly uncertain process of reconfiguring our rapid saliva COVID-19 test to the point that it has achieved these encouraging, preliminary results. Our collaboration with Arlington has been instrumental in evaluating the test with live samples and we now look forward to working together with this leading U.S. test developer to advance our easy-to-use rapid saliva COVID-19 test to market. While there are many further hurdles to clear before we have a marketable product, no rapid saliva test has yet received an FDA EUA so Sona would look forward to making this contribution to the ongoing efforts to mitigate the continuing pandemic."
Arlington Scientific CEO, Ben Card added, "As a leading FDA-registered developer with over 35 years of in-vitro diagnostic device regulatory and manufacturing expertise and longstanding agreements with the major U.S. medical device distributors, Arlington is pleased to partner with Sona on a test that can offer such ease of use, particularly for children and the infirm. We believe that rapid testing will continue to play an important role in reducing infection transmissions and this saliva test, if approved, would be the first of its kind in the U.S. market, adding to the series of innovative products introduced by Arlington."
The Company is not making any express or implied claims that its product has the ability to eliminate, cure or contain the COVID-19 virus (or SARS-2 Coronavirus) at this time. Regulatory approvals for the product will be required before sales may be permitted.