Newsletter

Fall Profile - Astralis LLC/Hercules Development Group

September 28, 2001
Volume IV, Issue 82
Email : info@otcjournal.com
URL : http://www.otcjournal.com

To OTC Journal Members:


 
Here is the OTC Journal we promised with a new profile on a company, which has the potential to make you rich. It is a once-in-a-lifetime ground floor opportunity with Billion Dollar Potential over the next several years. As part of our agreement to cover this unique situation, Members of the OTC Journal Investment Community have the Exclusive First Look. No other publication has featured this situation yet. You will have a competitive edge on the rest of the investment community. Information is Power, and it is our mission to make you powerful.

New breakthrough drugs yield profits for investors with little regard for market conditions. Therefore, we have decided to introduce Astralis LLC to our Members. We believe this stock will trade well despite the recessionary market environment as more information unfolds to the investing public and the pharmaceutical community.

In our opinion, a perception will form that this new drug could generate billions in world wide annual sales. This level of demand could place the market value of the drug into the stratosphere. Eight years of clinical trials on three thousand patients provides evidence that this vaccine is truly a revolutionary breakthrough with enormous market potential.
 

Recommended Trading Strategy

After reading our profile, if you find you agree with our conclusions, we would like to offer our opinion on a prudent investment strategy. Decide how many risk dollars you are prepared to commit to the investment, and start with only 25% to 50%. If you are opposed to risk read no further. This investment opportunity is not for you.

Over the next 60 days, more evidence should unfold concerning the potential for this new drug. This could come in the form of investments or alliances with major pharmaceutical names, which would act as confirmation of the commercial potential. As each of these events occur, the risk factor diminishes.

If you make additional purchases at higher prices, your average cost will still be below the market. If the stock has traded lower it will provide a more attractive entry level. This is only a suggested strategy; the choice is yours.
 

Fall Profile: Hercules Development Group (OTC BB: HDVG)
  • Stock Listing: OTC BB: HDVG (HDVG.OB on Yahoo!)
  • Shares Issued and Outstanding: 37.5 million
  • Estimated Public Float: 5 million
  • Closing Price and Volume: $3.66 on 2.2 million shares
  • Market Capitalization: $137 Million
  • Web Site: http://www.astralis.cc (under development)
Today, shortly after the market opened, Hercules Development Group issued a press release indicating the company had signed a definitive agreement to acquire Astralis LLC, a New Jersey based Biotechnology Company. Click Here to read the entire text of the press release. The full text is available at the end of this profile.

Astralis has developed PSORAXINE (Psoriasis Vaccine), a new drug to treat the skin condition known as Psoriasis. According to the press release, 3,000 patients have been treated to date with PSORAXINE. 638 have experienced total remission, 1,000 have experienced 70% to 90% remission, and 96% have responded positively with no significant side effects.

The press release goes on to say Psoriasis affects 7 million people in the US and 180 million people worldwide, or about 3% of the population.
 

Very Important Risk Factor- Today, you can invest in shares of Hercules Development, but you are not buying shares of Astralis yet. Until this merger closes Hercules Development does not own Astralis or its major asset, the new vaccine PSORAXINE. The Editors of the OTC Journal have spoken with the Presidents of both Hercules and Astralis, and both have told us they are in complete agreement. It is only a matter of completing the paperwork, which will require approximately 30 days. This adds an additional risk factor, which only reinforces our suggestion for starting with 25% to 50% of the dollars you allocate for this stock.

 
The Discovery Of PSORAXINE- A Truly Remarkable Accident


In 1992, Dr. José Antonio O'Daly was working to develop a vaccine for leishmaniasis in Venezuela. Leishmaniasis is a potentially fatal disease spread by parasites. It is at epidemic proportions in 21 countries with 650 million people at risk world wide.

Dr. O'Daly was working with a Peptide injection he invented, which is a protein derived directly from the parasites, which carry the disease.

As Dr. O'Daly was making house-to-house calls to check on his test subjects in his field study, he came across one patient who, after having received a third dose of the vaccine, experienced complete remission of the psoriasis on her leg that had plagued her for 12 years.

This amazing day in 1992 could be considered the birth of PSORAXINE.
 

PSORIASIS- A Widespread Disease of the Skin


It is estimated Psoriasis effects about 3% of the population worldwide, which includes about 7 million potential patients in the United States and about 180 million people worldwide.

Symptoms range from a slight irritation to severe conditions associated with the onset of arthritis. Extreme cases can result in patients being confined to wheelchairs.

Psoriasis results from an overproduction of skin by blood cells associated with the immune system. Blood cells become confused and act as if the skin is damaged, manufacturing new skin cells at a much faster rate than required by undamaged skin.

Current treatments include locally applied corticosteroids, methotrexate, coal-tar ointment, or ultraviolet light. Each has varying degrees of success and some harmful side effects can occur. Approximately 56 million hours of work are lost each year by people who suffer from Psoriasis. About $2 billion is spent annually on treatment.

There are 42 drugs in various stages of approval process with the FDA. 25 are designed to relieve symptoms. 17 are systemic, but none is generating results even close to Psoraxine.

Currently, there is no cure for Psoriasis, only treatment to relieve the symptoms. Severe symptoms can be triggered by high stress periods within a patient's life as we described in our September 26th Edition. Lesions can become so painful that sufferers cannot function. The psychological damage associated with appearance is also crippling. Alongside are pictures of several different types of Psoriasis, which speak for themselves.
 

Eight Years of Study on Three Thousand Patients

Dr. O'Daly financed an eight-year study on 2,770 patients out of his own pocket. The studies followed strict FDA guidelines going through all three phases. It is now approved by the Venezuelan version of the FDA, and US clinical trials will begin soon.

In the world of pharmaceutical efficacy, the results have been startling. Of the 2,770 people in the study, results were as follows:

  • 638 had 100% clinical remission.
  • 1,000 patients had 70-99% remission.
  • 2,660 had some time of positive response, anywhere from 10% to 90% remission.

The table depicted alongside shows the results of the study group using PASI (Psoriasis Area and Severity Index), commonly used by dermatologists to measure the extent of the disease.

Note that 74% of treated patients experienced over 70% reduction in symptoms, which falls well within FDA efficacy guidelines for the future. Only 4% of patients in the sample experienced less than 10% reduction in severity. These are considered exceptional results for a new drug.

Of the 2,770 patients in the study, 1,200 experienced no side effects, 1,000 experienced minor pain at the inoculation site, and about 1,000 had other types of minor discomfort. There were no detectable side effects aside from discomfort at the site of the injection.

Dr. O'Daly and Mike Ajnsztajn, the President of Astralis, believe the vaccine causes a cellular response, which "wakes up" the affected skin cells to their errant behavior.
 

One Picture Tells A Thousand Words- Look At Pictures of the Cases

Note: each picture contains information about age, disease history, previous treatment history, triggers, PASI values, treatment, and results. Here are several others for your review, and we have access to hundreds more of these:
 


 
Market Size

According to the table, 1.6 million patients will be treated for Psoriasis in the US in 2001. This would translate into 12.8 million dosages of Psoraxine, if it were available now. The company estimates the course of 8 doses will cost approximately $1600 or $200 per dose. This would equate to nearly $2.5 billion in sales for US patients being treated for Psoriasis today.

The table suggests the worldwide market for Psoraxine could be 32 million dosages by 2006. At $200 per dosage the numbers and profits go off the charts. If this product is eventually deployed on a worldwide basis, the numbers are staggering, and the market value of the vaccine far exceeds $1 billion.

Astralis has filed for patent protection in the US. In the next 12 months, Astralis will be filing many International patents. During the US Patent process, their technology is protected by International law.
 

Market Value and Commercial Introduction

To date, Psoraxine has only been approved for commercial use in Venezuela. To market the product in the US an FDA Approval is required. Astralis estimates this process will take five to six years and cost approximately $30 million.

Not surprisingly, the FDA will require an entirely new study following FDA guidelines. As a result of the Venezuelan data, the FDA has indicated a willingness to give the company 1B status upon filing of its NDA (New Drug Application). 1B will allow the company to test the vaccine on 20 to 80 humans to determine effect and toxicity. This will shorten the process by about 2 years.

However, the market will  value this revolutionary new drug many years before it is commercially available in the United States. The value will be determined by partnerships and alliances with major pharmaceutical companies. 
 

"Competition to license pharmaceutical compounds is becoming fierce. Drug companies used to rely solely on their own discoveries to deliver the next miracle cure. Nowadays, they are increasingly likely to license compounds discovered by others."
-McKinsey & Co. Copyright Year 2000

Because this vaccine is already fully developed with eight years of testing data, we are expecting arrangements with several major pharmaceutical household names. In most cases, large drug companies are investing in technology theories that could take years to develop. This case is unique as the drug is already developed, and it is being used everyday and working.

If every patient that seeks treatment for Psoriasis in the United States were to receive this vaccine, it would generate about $2.5 billion in sales. Only 22% of people with Psoriasis in the US actually seek treatment as therapies are expensive and relatively ineffective.
 

Conclusion

Despite rumors to the contrary, speculation is alive and well and living in the United States today. Speculation is what it's all about. If you're not afraid to take a risk, this investment opportunity is for you.

This is a dream opportunity for investors. How often do you get the chance to invest in technology that has the potential to go from $0 in revenues to tens of billions in several short years?

How much will pharmaceutical companies be willing to pay to be involved with this revolutionary new break through? More importantly, how much of this stock will you still own in 5 or 6 years when Psoraxine is commercially available worldwide and generating $3 billion in high margin sales? Where will the market value this company?

Of course this is all future speculation, which is why this opportunity is attractive. Those willing to take the risk at these levels, will enjoy the rewards if Psoraxine is commercially successful. An eight-year study on 3,000 patients reduces the risk significantly.

We believe that if and when the pharmaceutical industry accepts and recognizes Psoraxine, it will view its worth at $1 billion minimum. This could take 2 to 3 years, but it would put the stock at about $26.50 per share based on the current number of shares issued and outstanding. How much risk capital do you have available for a potential 7 bagger? The choice is yours.


For More Information Contact:
The Investor Relations Group
1-800-689-2966

Here is the complete text of the news release for your review:
 

Friday September 28, 9:33 am Eastern Time
Press Release
SOURCE: Hercules Development Group

Announces Execution of Definitive Agreement to Acquire Biotech Company
New drug PSORAXINE Achieves Clinical Remission of the Skin Condition Psoriasis in Trials

FLORHAM PARK, N.J.--(BUSINESS WIRE)--Sept. 28, 2001--Hercules Development Group (OTC:HDVG - news) announced today that it has executed a definitive agreement to acquire Astralis LLC, a New Jersey-based start-up biotech company. 

The first drug to be developed by Astralis, PSORAXINE, has brought about clinical remission of the skin condition known as Psoriasis during clinical trials conducted in Venezuela. The Company has conducted clinical trials in Venezuela and treated 3,000 patients with Psoraxine to-date. Of these, 638 experienced complete remission and 1,000 have experienced between 70% and 90% remission. 

The primary end point was the reduction of the Psoriasis Area and Severity Index (PASI) before and after treatment with Psoraxine. Overall, 96% of patients have responded positively to Psoraxine, with few adverse effects, although these results were not independently verified. 

``The market potential for Psoraxine is staggering,'' said Mike Ajnsztajn, CEO of Astralis. ``Psoriasis affects 7 million people in the United States alone, and conservative estimates indicate that up to 3% of the world population also suffer from this condition--as many as 180 million people.'' 

Psoriasis results due to an overproduction of skin by blood cells associated with the immune system. These blood cells become confused and act as though the skin was damaged, manufacturing skin cells at a much faster rate than is required by undamaged skin. This overproduction of skin can cause everything from itchy rash-like patches to painful pustules and massive inflammation. 

Most current treatments are sub-optimal and some systematic treatments can cause serious side effects. In fact, of the 7 million people living with Psoriasis in the US today, only 1.6 million choose treatment. 

``We are impressed with Psoraxine's clinical results so far,'' said Dr. Jose Antonio O'Daly, MD, PhD, Chairman and President of Research and Development for Astralis. Dr. O'Daly, a graduate of Johns Hopkins University, added: ``Discussions to date with the FDA have been positive and encouraging. Although Astralis has not yet filed an Investigation of New Drug Application (IND) with the US FDA, the FDA had recommendations for submitting our IND for a PHASE 1-B, which should be filed shortly. The recommendations took into account the existing Venezuelan data, which we hope will significantly reduce the number of first-stage studies required and ultimately speed up the approval process.'' 

In addition, patent protection has been applied for composition of matter, method of use, DNA sequence of peptides, and the new gene sequence that fuels Psoraxine. Although there can be no assurance that a patent will be granted, Astralis hopes to have the patent granted in the first quarter of 2002. In the next 12 months, Astralis expects to file patents in overseas patent offices. During this period, this discovery is protected in other countries as per international patent law. 

The agreement provides for the issuance of 28,000,000 shares of newly issued Hercules shares in exchange for 100% of the outstanding shares of Astralis. Simultaneous with the issuance of the Hercules shares to the Astralis shareholders, existing shareholders of Hercules will cancel into treasury a total of 23,500,000 shares of Hercules. Hercules will also undertake a private placement of equity in the amount of $3,200,000 in conjunction with the acquisition. 

The closing of the agreement is contingent upon the completion of the private placement. 

Based on the completion of the definitive agreement with Astralis, Hercules also announced termination of discussions to acquire the Bauer Partnership. 
--------------------------------------------------------------------------------
Contact:
     Hercules Development Group
      by
     Richard Genovese
     The Investor Relations Group
     800/689-2966


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The OTCjournal.com Newsletter is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward  maximizing the upside potential for investors while minimizing the downside risk, whenever possible. Moreover, as detailed below, this publication accepts compensation from certain of the companies which it features.  Likewise, this newsletter is owned by MarketByte, LLC. To the degrees enumerated herein, this newsletter should not be regarded as an independent publication.

Click Here to view our compensation on every company we have ever covered, or visit the following web address:  http://www.otcjournal.com/disclaimer.html for our full profiles and http://www.otcjournal.com/trading-alerts/disclaimer.html for Trading Alerts. MarketByte LLC has been paid a fee of $100,000 in cash and 100,000 options exercisable at $2.50 by the Investor Relations Group for publishing information on Astralis LLC for a period of one year. Fifty thousand options are exercisable immediately, and fifty thousand become eligible on April 1, 2002.

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