UNITEDTable STATESof Contents

~~SECURITIES~~UNITED ~~AND~~STATES ~~EXCHANGE COMMISSION~~

~~WASHINGTON,~~SECURITIES ~~D.C.~~AND ~~20549~~EXCHANGE COMMISSION

~~FORM~~WASHINGTON, ~~10-K~~ D.C. 20549

xFORM ~~ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~10-K

~~For~~x ~~the~~ANNUAL ~~fiscal~~REPORT ~~year~~PURSUANT ~~ended~~TO ~~September 30,~~SECTION ~~2011~~13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

ORFor the fiscal year ended September 30, 2012

~~¨ TRANSITION REPORT PURSUANT TO SECTION 13~~ OR ~~15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For~~¨ ~~the~~TRANSITION ~~transition~~REPORT ~~period~~PURSUANT ~~from to .~~TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~Commission~~For ~~File~~the ~~Number~~transition ~~000-51383~~period from to .

~~ACCENTIA~~Commission ~~BIOPHARMACEUTICALS,~~File ~~INC.~~Number 000-51383

~~(Exact~~ACCENTIA ~~name~~BIOPHARMACEUTICALS, ofINC. ~~registrant as specified in its charter)~~

Florida		04-3639490
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

(Exact name of registrant as specified in its charter)

324 South Hyde Park Ave., Suite 350

Florida

04-3639490

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

~~Tampa~~324 South Hyde Park Avenue, ~~Florida~~Suite ~~33606~~350

~~(Address~~Tampa, ofFlorida ~~principal~~33606 ~~executive offices) (Zip Code)~~

(~~813~~Address of principal executive offices) ~~864-2554~~ (Zip Code)

(~~Registrant’s telephone number, including area code~~813) 864-2554

~~Securities~~(Registrant’s ~~registered~~telephone ~~pursuant~~number, toincluding ~~Section 12(g~~area code) ~~of the Act:~~

~~Common~~Securities ~~Stock,~~registered ~~par~~pursuant ~~value~~to ~~$0.001~~Section 12(g) ~~per~~of ~~share~~the Act:

~~(Title~~Common ofStock, ~~class)~~par value $0.001 per share

~~Indicate~~(Title ~~by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405~~ of ~~the~~class) ~~Securities Act. Yes ¨ No x~~

Indicate by check mark if the registrant is ~~not~~a ~~required~~well-known toseasoned ~~file~~issuer, ~~reports~~as ~~pursuant~~defined toin ~~Section 13~~Rule or405 ~~Section 15(d)~~ of the Securities Act. Yes ¨ No x

Indicate by check mark ~~whether~~if the registrant ~~(1) has~~is ~~filed~~not ~~all reports~~ required to befile ~~filed~~reports bypursuant to Section 13 or Section 15(d) of the ~~Securities Exchange~~ Act ~~of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days~~. Yes x¨ No ¨x

Indicate by check mark whether the registrant (1) has ~~submitted~~filed ~~electronically~~all ~~and~~reports ~~posted on its corporate Web site, if any, every Interactive Data File~~ required to be ~~submitted~~filed ~~and~~by ~~posted~~Section 13 ~~pursuant~~or to15(d) ~~Rule~~of ~~405~~the ofSecurities ~~Regulation~~Exchange ~~S-T~~Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to ~~submit~~file such reports), and ~~post~~ (2) has been subject to such ~~files)~~filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark ifwhether ~~disclosure~~the ofregistrant ~~delinquent~~has ~~filers~~submitted ~~pursuant~~electronically toand ~~Item 405~~posted ofon ~~Regulation S-K~~its iscorporate ~~not~~Web ~~contained~~site, ~~herein~~if any, ~~and~~every ~~will~~Interactive ~~not~~Data beFile ~~contained,~~required to ~~the~~be ~~best~~submitted ofand ~~registrant’s~~posted ~~knowledge,~~pursuant into ~~definitive~~Rule ~~proxy~~405 orof ~~information~~Regulation ~~statements~~S-T ~~incorporated~~during bythe ~~reference~~preceding in12 months ~~Part~~(or ~~III~~for ofsuch ~~this~~shorter ~~Form 10-K~~period orthat ~~any~~the ~~amendment~~registrant was required to ~~this~~submit and post ~~Form 10-K~~such files). Yes x No ¨

Indicate by check mark ~~whether~~if ~~the~~disclosure ~~registrant~~of isdelinquent afilers ~~large accelerated~~pursuant ~~filer,~~to anItem 405 ~~accelerated~~of ~~filer,~~Regulation S-K ais ~~non-accelerated~~not ~~filer~~contained herein, orand awill ~~smaller reporting~~not ~~company.~~be ~~See~~contained, to the ~~definitions~~best of ~~“large~~registrant’s ~~accelerated filer”~~knowledge, in ~~“accelerated~~definitive ~~filer”,~~proxy ~~and~~or ~~“smaller~~information ~~reporting~~statements ~~company”~~incorporated by reference in ~~Rule~~ Part III of this Form ~~12b~~10-2K ofor ~~the~~any ~~Exchange~~amendment ~~Act~~to this Form 10-K. x

~~Large~~Indicate by check mark whether the registrant is a large accelerated filer, ¨an ~~Accelerated~~accelerated filer, ¨a ~~Non~~non-accelerated filer, ¨or ~~Smaller~~a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” xin Rule 12b-2 of the Exchange Act.

~~Indicate~~Large byaccelerated ~~check~~filer ~~mark~~¨ ~~whether~~Accelerated ~~the~~filer ~~registrant~~¨ isNon-accelerated afiler ~~shell~~¨ ~~company~~Smaller ~~(as~~reporting ~~defined~~company ~~in Rule 12b-2 of the Act). Yes ¨ No~~ x

Indicate by check mark whether the registrant ~~has~~is ~~filed~~a ~~all~~shell ~~documents~~company ~~and reports required to be filed by Section 12, 13 or 15~~(d)as ofdefined ~~the~~in ~~Securities~~Rule ~~Exchange~~12b-2 ~~Act~~ of ~~1934 subsequent to~~ the ~~distribution~~ ~~of securities under a Bankruptcy Plan confirmed by the Bankruptcy Court~~Act). Yes x¨ No ¨ x

AsIndicate ofby ~~March 31,~~check ~~2011,~~mark whether the ~~aggregate~~registrant ~~market~~has ~~value~~filed ofall ~~the~~documents ~~voting~~and ~~common~~reports ~~stock~~required ~~held~~to bybe ~~non–affiliates~~filed ofby ~~the registrant~~Section 12, ~~computed~~13 ~~by reference~~or to15(d) of the ~~last~~Securities ~~sale~~Exchange ~~price~~Act of ~~such~~1934 ~~stock~~subsequent asto the distribution of ~~such~~securities ~~date~~under ona ~~the~~Bankruptcy ~~OTCQB™,~~Plan ~~was~~confirmed ~~approximately~~by ~~$30,662,663.~~the Bankruptcy Court. Yes x No ¨

As of ~~December 15~~March 30, ~~2011~~2012, ~~there~~ ~~were~~the ~~75,238,376~~aggregate ~~shares~~market value of the ~~registrant’s~~voting common stock ~~outstanding~~held by non–affiliates of the registrant, computed by reference to the last sale price of such stock as of such date on the OTCQB™, was approximately $26,700,000.

~~DOCUMENTS~~As of November 30, ~~INCORPORATED~~2012, BYthere ~~REFERENCE:~~were 89,755,901 shares of the registrant’s common stock outstanding.

~~The information required by Part III of this Annual Report on Form 10-K, to the extent not set forth herein,~~DOCUMENTS isINCORPORATED ~~incorporated~~BY ~~herein~~REFERENCE: byNONE reference to the registrant’s Proxy Statement for the 2012 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the registrant’s fiscal year.

Forward-LookingTable Statementsof Contents

~~Statements in this Annual Report on Form 10~~Forward-KLooking ~~that~~Statements are not strictly historical in nature are forward-looking statements. These statements may include, but are not limited to, statements about: the timing of the commencement, enrollment, and completion of our clinical trials for our product candidates; the progress or success of our product development programs; the status of regulatory approvals for our product candidates; the timing of product launches; our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others; and our estimates for future performance, anticipated operating losses, future revenues, capital requirements, and our needs for additional financing. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” “goal,” or other variations of these terms (including their use in the negative) or by discussions of strategies, plans or intentions. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties. The underlying information and expectations are likely to change over time. Actual events or results may differ materially from those projected in the forward-looking statements due to various factors, including, but not limited to, those set forth in “ITEM 1A. RISKS FACTORS” in this Annual Report on Form 10-K for the fiscal year ended September 30, 2011 and those set forth in our other filings with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

~~PART~~Statements Iin this Annual Report on Form 10-K that are not strictly historical in nature are forward-looking statements. These statements may include, but are not limited to, statements about: the timing of the commencement, enrollment, and completion of our clinical trials for our product candidates; the progress or success of our product development programs; the status of regulatory approvals for our product candidates; the timing of product launches; our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others; and our estimates for future performance, anticipated operating losses, future revenues, capital requirements, and our needs for additional financing. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” “goal,” or other variations of these terms (including their use in the negative) or by discussions of strategies, plans or intentions. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties. The underlying information and expectations are likely to change over time. Actual events or results may differ materially from those projected in the forward-looking statements due to various factors, including, but not limited to, those set forth under the caption “Risk Factors” in “ITEM 1A. RISKS FACTORS” in this Annual Report on Form 10-K for the fiscal year ended September 30, 2012 and those set forth in our other filings with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEMTable 1.of BUSINESSContents

InPART ~~this~~I Annual Report on Form 10-K, unless the context indicates otherwise, references to “Accentia,” “the Company,” “our company,” “we,” “us,” and similar references refer to Accentia Biopharmaceuticals, Inc. and its subsidiaries. All references to years in this Annual Report on Form 10-K, unless otherwise noted, refer to our fiscal years, which end on September 30. For example, a reference to “2011” or “fiscal 2011” means the 12-month period ended September 30, 2011.

~~General~~ITEM 1. BUSINESS

~~Headquartered~~In inthis ~~Tampa,~~Annual ~~Florida,~~Report ~~Accentia~~on ~~Biopharmaceuticals~~Form 10-K, ~~Inc.~~unless ~~(OTCQB:~~the ~~“ABPI”)~~context isindicates aotherwise, ~~biotechnology~~references ~~company~~to ~~that~~“Accentia,” is“the ~~developing~~Company,” ~~Cyrevia™~~“our ~~(formerly~~Company,” ~~named~~“we,” ~~Revimmune™)~~“us,” asand ~~a comprehensive~~similar ~~system~~references ofrefer ~~care~~to ~~for~~Accentia ~~the~~Biopharmaceuticals, ~~treatment~~Inc. ofand ~~autoimmune diseases~~its subsidiaries. WeAll ~~are~~references ~~also~~to ~~developing~~years ~~the~~in ~~SinuNasal™~~this ~~Lavage~~Annual ~~System~~Report ason aForm ~~medical~~10-K, ~~device~~unless ~~for~~otherwise ~~the~~noted, ~~treatment~~refer ofto ~~chronic~~our ~~sinusitis.~~fiscal ~~Additionally~~years, ~~through~~which ~~our~~end ~~majority-owned~~on ~~subsidiary, Biovest International, Inc~~September 30. ~~(“Biovest”),~~For ~~we are developing BiovaxID®~~example, as a ~~personalized~~reference ~~therapeutic~~to ~~cancer vaccine for the treatment of non-Hodgkin’s lymphoma (~~“~~NHL~~2012”), ~~specifically,~~or ~~follicular lymphoma (~~“~~FL”),~~fiscal ~~mantle cell lymphoma (“MCL~~2012”) ~~and~~means ~~potentially other B-cell cancers and AutovaxID® an instrument for~~ the ~~production of a broad range of patient~~12-~~specific medicines, such as BiovaxID and potentially~~month ~~for~~period ~~various~~ended ~~vaccines~~September 30, ~~including vaccines for influenza and other contagious diseases~~2012.

~~Cyrevia™~~Overview is being developed to treat various autoimmune diseases. Cyrevia’s active ingredient is cyclophosphamide, which is already approved by the Food and Drug Administration (“FDA”) to treat disorders other than autoimmunity. We are seeking to repurpose cyclophosphamide to treat autoimmune disease as part of a comprehensive system of care.

~~BiovaxID®~~Accentia is ~~being~~a ~~developed~~biotechnology bycompany ~~our~~focused ~~majority-owned~~on ~~subsidiary~~discovering, ~~Biovest~~developing asand ancommercializing ~~active~~innovatative ~~immunotherapy~~therapies tothat ~~treat~~address ~~certain~~the ~~forms~~unmet medical needs of patients by utilizing therapeutic clinical ~~lymphoma.~~products ~~BiovaxID~~including ~~has~~personalized ~~completed~~immunotherapies ~~two~~designed ~~Phase~~to 2treat ~~clinicial~~autoimmune ~~trials~~related diseases and ~~one~~cancer. ~~Phase~~We 3were ~~clinical~~incorporated ~~trial~~in the State of Florida in 2002.

~~AutovaxID®~~Cyrevia™ is ~~automated~~a ~~cell~~potential ~~culture~~comprehensive ~~production~~system ~~instrument~~of ~~being~~care ~~developed~~for ~~and~~the ~~commercialized~~treatment byof ~~our~~various ~~majority~~autoimmune ~~owned~~diseases. ~~subsidiary~~Cyrevia seeks to eliminate virtually all circulating white blood cells, including those driving ~~Biovest~~autoimmunity, ~~for~~while seeking to spare the ~~production~~patient’s stem cells. The therapeutic theory of ~~cancer~~Cyrevia ~~vaccines~~is ~~and~~that ~~other~~as ~~personalized~~the ~~medicines~~patient’s eliminated white blood cells are replenished with new white blood cells derived from these stem cells, the patient’s immune system becomes effectively replaced or “rebooted”. Cyrevia’s active ingredient is cyclophosphamide. We are repurposing cyclophosphamide and ~~potentially~~administering ~~for~~it aas ~~wide~~part ~~range~~of our integrated risk-management system designed to assure consistency in use and to minimize the risks of treatment. Cyclophosphamide is currently U.S. Food and Drug Administration (“FDA”) approved to treat disorders other ~~vaccines~~than autoimmune disease, including various forms of cancer.

~~The SinuNasal~~BiovaxID™ ~~Lavage~~is ~~System~~being developed by our majority-owned subsidiary, Biovest International, Inc. (“~~SinuNasal~~Biovest”), isas ~~being~~an ~~developed~~active immunotherapy, aspersonalized atherapeutic ~~medical~~cancer ~~device~~vaccine for the treatment of ~~patients~~non-Hodgkin’s ~~with~~lymphoma ~~refractory~~(“NHL”), ~~post~~a B-~~surgical~~cell ~~chronic~~cancer; ~~sinusitis~~specifically, follicular lymphoma (“CSFL”) and mantle cell lymphoma (“MCL”), ~~also~~and potentially ~~sometimes~~other ~~referred~~B-cell cancers. Both FL and MCL are generally considered to asbe ~~chronic~~incurable ~~rhinosinusitis~~with currently approved therapies. ~~SinuNasal~~ isThese ~~believed~~generally tofatal ~~provide~~diseases ~~benefit~~arise from the lymphoid tissue and are characterized by ~~delivering~~an uncontrolled proliferation and spread throughout the body of mature B-cells, which are a ~~proprietary~~type ~~buffered~~of ~~irrigation~~white ~~solution~~blood ~~(patent~~cell. ~~pending~~Three clinical trials conducted under Biovest’s investigational new drug application (“IND”) tohave ~~mechanically~~studied ~~flush~~BiovaxID ~~the~~in ~~nasal~~NHL. ~~passages~~These tostudies ~~improve~~include ~~the~~a Phase ~~symptoms~~2 ofclinical ~~refractory~~trial ~~post~~and a Phase 3 clinical trial in patients with FL, as well as a Phase 2 clinical trial in patients with MCL. BiovaxID has demonstrated statistically significant Phase 3 clinical benefit by prolonging disease-~~surgical~~free CSsurvival in FL patients treated with BiovaxID. Biovest believes that these clinical trials demonstrate the safety and efficacy of BiovaxID.

~~Since~~Based ~~1997,~~on scientific ~~through~~advice ~~our~~meetings ~~wholly~~conducted by Biovest with multiple European Union (“EU”)-~~owned~~Member ~~subsidiary,~~national ~~Analytica~~medicines ~~International~~agencies, ~~Inc.~~Biovest filed its formal notice of intent to file a marketing authorization application (“~~Analytica~~MAA”) with the European Medicines Agency (“EMA”), ~~Analaytica~~which ~~has~~begins the EU marketing approval application process. Additionally, based on a scientific advice meeting conducted with Health Canada, Biovest has announced plans to file a ~~global~~new ~~research~~drug ~~and~~submission ~~strategy~~application ~~consulting~~(“NDS”) ~~business~~seeking ~~that~~regulatory ~~provides~~approval ~~services~~in toCanada. Biovest could receive a decision regarding EU marketing and Canadian regulatory approval for BiovaxID within 12 months after the ~~pharmaceutical~~submission of Biovest’s MAA and ~~biotechnology~~NDS ~~industries~~assuming that the rigorous review process advances forward in a timely and positive manner and no substantial regulatory issues or problems are encountered. OnBiovest ~~December~~conducted ~~15,~~a ~~2011,~~formal weguidance ~~closed~~meeting onwith the ~~definitive~~FDA in order to define the path for Biovest’s filing of a biologics licensing agreement ~~selling~~(“BLA”) for BiovaxID’s U.S. regulatory/marketing approval. Further in its guidance, the ~~assets~~FDA required that Biovest conduct a second Phase 3 clinical trial to complete the clinical data gained through Biovest’sfirst Phase 3 clinical trial and ~~business~~Biovest’s BiovaxID development program to support the filing of ~~Analytica~~its BLA for BiovaxID. Biovest is preparing, subject to arequired ~~third-party~~funding, to initiate this second Phase 3 clinical trial to advance BiovaxID toward the U.S. market.

~~Corporate~~To ~~Overview~~support Biovest’s planned commercialization of BiovaxID and to support the products of personalized medicine and particularly, patient specific oncology products, Biovest developed and commercialized a fully automated, reusable instrument that employs a fully disposable, closed-system cell-growth chamber incorporating a hollow fiber cell-growth cartridge called AutovaxID. Since it is fully enclosed, computer controlled and automated, AutovaxID requires limited supervision and manpower to operate, compared to manual instruments. AutovaxID is suitable for growing antibody-secreting cell lines, including hybridomas and Chinese hamster ovary (“CHO”) cells, which are among the leading kinds of cell lines used for commercial therapeutic protein manufacture. AutovaxID has a small footprint and supports scalable production. Biovest plans to utilize the AutovaxID technology to streamline the commercial manufacture of BiovaxID. Biovest believes that AutovaxID is the first cell culture system that enables production of personalized cell-based treatments economically. AutovaxID uses a disposable production unit which provides for robust and dependable manufacturing while complying with the industry current good manufacturing practices (“cGMP”) standards. Biovest is

We1 ~~were organized in 2002 to develop and commercialize biopharmaceutical products.~~

WeTable commenced business in April 2002 with the acquisition of Analytica. We acquired Analytica in a merger transaction for $3.7 million cash, $1.2 million of convertible promissory notes, and the issuance of 8.1 million shares of our Series B preferred stock. Analytica was founded in 1997 and has offices in New York and Germany. On December 15, 2011, we closed on the definitive agreement to selling the assets and business of Analytica for a combination of fixed and contingent payments aggregating up to $10.0 million. Contents

In collaborating ~~June~~with ~~2003,~~the weU.S. ~~acquired~~Department anof ~~81%~~Defense ~~interest~~(“DoD”) inand ~~Biovest~~others ~~pursuant~~ to anfurther ~~investment~~develop ~~agreement~~AutovaxID ~~for~~and anrelated ~~initial~~hollow ~~investment~~fiber ofsystems ~~$20~~and ~~million. Biovest~~to isexplore apotential ~~biologics~~production ~~company~~of ~~that~~additional vaccines, isincluding ~~developing~~vaccines ~~BiovaxID®,~~for viral indications such as ainfluenza ~~personalized~~and ~~therapeutic~~other ~~cancer~~contagious ~~vaccine~~diseases. ~~for the~~Biovest ~~treatment~~also ofmanufactures ~~non-~~instruments ~~NHL~~and ~~specifically,~~disposables ~~FL,~~used ~~MCL~~in ~~and~~the ~~potentially~~hollow ~~other~~fiber B-production of cell ~~blood~~culture ~~cancers~~products. AsBiovest ofmanufactures ~~September 30~~mammalian cell culture products such as whole cells, ~~2011~~recombinant and secreted proteins, weand ~~owned~~monoclonal ~~approximately~~antibodies ~~62%~~for ofthird ~~Biovest’s~~parties, ~~issued~~primarily ~~and~~researchers. ~~outstanding~~Biovest ~~capital~~has ~~stock~~produced ~~with~~over ~~the~~7,000 ~~minority~~cell ~~interest~~based ~~being~~products ~~held~~for ~~by approximately~~an ~~400~~estimated ~~shareholders~~2,500 ofresearchers ~~record~~around the world. Biovest ~~common~~considers ~~stock~~its isvast ~~registered~~experience ~~under~~in ~~Section 12(g)~~manufacturing ofsmall ~~the~~batches ~~Securities~~of ~~Exchange~~different ~~Act~~cell ofbased ~~1934~~products, ~~and~~together ~~therefore~~with ~~files~~Biovest’s ~~periodic~~expertise in designing and ~~other~~manufacturing ~~reports~~instruments ~~with~~for ~~the~~personalized ~~Securities~~medicines ~~and~~as ~~Exchange~~important ~~Commission~~competencies ~~(“SEC”)~~supporting its development of patient specific immunotherapies.

2We anticipate developing the SinuNasal™ Lavage System (“SinuNasal”) as a medical device for the treatment of patients with refractory, post-surgical chronic sinusitis (“CS”). SinuNasal is believed to provide benefit by delivering a proprietary patented buffered irrigation solution to mechanically flush the nasal passages to improve the symptoms of refractory post-surgical CS patients.

OnCorporate ~~November 10, 2008, we along with all of our subsidiaries filed a voluntary petition for~~Overview reorganization under Case No. 8:08-bk-17795-KRM. On August 16, 2010, we filed our First Amended Joint Plan of Reorganization, and, on October 25, 2010, we filed the First Modification to the First Amended Joint Plan of Reorganization (collectively and as amended and supplemented, the “Plan”). On October 27, 2010, the Bankruptcy Court held a Confirmation hearing and confirmed the Plan, and, on November 2, 2010, the Bankruptcy Court entered an Order Confirming Debtors’ First Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the “Confirmation Order”). We emerged from Chapter 11 protection, and the Plan became effective, on November 17, 2010 (the “Effective Date”).

~~PRODUCTS~~In April 2002, we commenced business with the acquisition of Analytica International, Inc. (“Analytica”). Analytica conducted a global research and strategy consulting business that provided services to the pharmaceutical and biotechnology industries. We acquired Analytica in a merger transaction for $3.7 million cash, $1.2 million of convertible promissory notes, and the issuance of 8.1 million shares of our Series B preferred stock. Analytica was founded in 1997 and has offices in New York and Germany. On December 15, 2011, we closed on the sale of substantially all of the assets and business of Analytica to a third-party, for a combination of fixed and contingent payments aggregating up to $10 million. The purchase agreement included the name “Analytica International, Inc.” Accordingly, we changed the name of our subsidiary from Analytica International, Inc. to Accentia Biotech, Inc.

~~CYREVIA~~In June 2003, we acquired an 81% interest in Biovest pursuant to an investment agreement for an initial investment of $20 million. Biovest’s business consists of three primary business segments: the development of BiovaxID™ for B-cell blood cancers; the manufacture and sale of AutovaxID® and other instruments and disposables; and the commercial sale and production of cell culture products and services. As of September 30, 2012, we owned approximately 59% of Biovest’s outstanding common stock with the minority interest being held by approximately 400 shareholders of record. Following our investment, Biovest continued to be a reporting company under Section 12(~~formerly~~g) ~~named~~of ~~Revimmune™~~the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Biovest files periodic and other reports with the Securities and Exchange Commission (“SEC”).

WeIn ~~are~~November ~~developing~~2010, ~~Cyrevia~~our Company and Biovest completed reorganizations and formally exited Chapter 11 of the U.S. Bankruptcy Code (“Chapter 11”) as fully restructured companies. Through the provisions of our respective bankruptcy plans (as amended) (the “Plan” and the “Biovest Plan”, respectively), both of which were effective on November 17, 2010 (the “Effective Date”), our Company and Biovest restructured our debt into a combination of new debt and equity. On March 19, 2012, the ~~comprehensive~~Bankruptcy ~~system~~Court entered a Final Decree closing Biovest’s Chapter 11 proceedings. Notwithstanding the effectiveness of ~~care~~the ~~for~~Plan, the ~~treatment~~Bankruptcy Court retains jurisdiction to adjudicate any remaining issues regarding, inter alia, the validity, amount, and method of ~~various~~payment ~~autoimmune~~of ~~diseases~~claims filed in connection with our Chapter 11 proceeding. Accordingly, we anticipate that there may be ongoing proceedings before the Bankruptcy Court to resolve any filed objections or disputes as to claims filed in our Chapter 11 proceeding.

On November 17, 2012, an aggregate of approximately $14.1 million in principal became due under our convertible debentures issued in November 2010 (the “Matured Obligations”). Because we were unable to pay the amount due on November 17, 2012, an event of default occurred under the Matured Obligations. As a result of this event of default, interest has begun accruing on the Matured Obligations at a default rate of 18% and the holders of the Matured Obligations have the right to an additional default payment of 30% on the outstanding balance due. The ~~Immune~~holders ~~System~~of the Matured Obligations could also cause all amounts outstanding, to be immediately due and ~~Autoimmunity~~payable. At present, the holders of the Matured Obligations have not taken any action to secure monetary judgment(s) against us for the outstanding principal and interest owed to them.

~~The~~Also, ~~immune~~on ~~system~~November is17, ~~the~~2012, ~~body’s~~an ~~natural~~aggregate ~~defense~~of ~~mechanism~~approximately ~~for~~$27.7 ~~identifying~~million ~~and~~in ~~killing~~principal orbecame ~~eliminating~~due ~~disease-causing~~under ~~pathogens~~ (~~such~~1) asa ~~bacteria,~~secured ~~viruses,~~convertible orpromissory ~~other~~note ~~foreign~~issued ~~microorganisms)~~to ~~and~~Corps ~~tumor~~Real, ~~cells.~~LLC In(“Corps ~~humans,~~Real”) ~~the~~with ~~primary~~an ~~disease~~aggregate ~~fighting~~principal ~~function~~balance of $3.0 million (the “Biovest ~~immune~~Corps ~~system~~Real isNote”), ~~carried~~(2) ~~out~~secured byconvertible ~~white~~promissory ~~blood~~notes ~~cells~~issued to Laurus Master Fund, Ltd. (~~leukocytes~~in liquidation), ~~which~~PSource ~~mediate~~Structured ~~two~~Debt ~~types~~Limited, ofValens ~~immune~~U.S. ~~responses:~~SPV ~~innate~~I, ~~immunity~~LLC, Valens Offshore SPV I, Ltd., Valens Offshore SPV II, Corp., and ~~adaptive~~ ~~immunity~~Erato Corp. ~~Innate~~(collectively, ~~immunity~~“Laurus/Valens”) ~~refers~~with toan ~~the~~aggregate ~~broad~~principal ~~first-line~~balance ~~immune~~of ~~defense~~$23.5 million ~~that~~(the ~~recognizes~~“Term A Notes”), and ~~eliminates~~(3) unsecured ~~certain~~convertible ~~pathogens~~promissory ~~prior~~notes (the “Exchange Notes”) issued to the ~~initiation~~holders of athe ~~more~~Exit ~~specific~~Financing ~~adaptive~~with ~~immune~~an ~~response~~aggregate principal balance of $1.2 ~~While~~million (collectively, the “Biovest ~~cells~~Matured Obligations”). Because Biovest was unable to pay the amount due on November 17, 2012, an event of default occurred under the ~~innate~~Biovest ~~immune~~Matured ~~system provide~~Obligations. As a ~~first~~result ~~line~~ of ~~defense~~Biovest’s default under the Exchange Notes issued in the Exit Financing, ~~they~~interest ~~cannot~~has ~~always~~begun ~~eliminate~~accruing oron ~~recognize~~those ~~infectious~~Exchange ~~organisms~~Notes at rate of 15% per annum. InOn ~~some~~December ~~cases~~19, 2012, a majority of the ~~innate~~holders ~~immune~~(Whitebox ~~system~~Credit ~~may~~Arbitrage ~~not~~Partners, ~~always~~LP, ~~recognize~~Whitebox orSpecial ~~detect~~Opportunities ~~infections.~~Fund InSeries ~~these~~B Partners, ~~cases~~LP, Pandora Select Partners, LP, Whitebox Multi-Strategy Partners, LP, Whitebox Concentrated Convertible Arbitrage Partners, LP, (collectively, the ~~adaptive~~“Whitebox ~~immune~~Entities”)) ~~response~~of ~~evolved~~the tooutstanding ~~provide~~Exchange ~~a highly~~Notes ~~specific~~issued ~~and~~in ~~versatile~~the ~~means~~Exit Financing commenced a breach of ~~defense~~contract ~~which~~action ~~also~~to ~~provides~~secure ~~long-lasting~~monetary ~~protection~~judgment(s) against Biovest for the outstanding principal and interest owed to them (~~immune~~the ~~memory~~“Whitebox Litigation”). ~~against~~With ~~subsequent~~the ~~re-infection~~exception of the Whitebox Litigation, Biovest has not been notified of an event of default by the ~~same~~other ~~pathogen~~holders of the outstanding Exchanges Notes.

~~Autoimmune~~2 diseases are the result of white blood cells in the body recognizing and injuring or destroying normal (self) organs or tissues. In affected patients, the adaptive immune response (normally targeted against foreign antigens) becomes aberrantly targeted against self-tissues, leading to tissue damage, and chronic inflammation of affected organs. In severe cases patients may experience loss of function leading to disability or death. Autoimmune diseases are generally considered manageable in their early stages with immunosuppressive therapies or immunomodulating therapies. These therapies, however, are rarely considered “curative,” and even with modern standards of care, patients may suffer from chronic disease progression.

AutoimmuneTable diseases pose a major burden to society. According to the National Institutes of Health and its Autoimmune Diseases Coordinating Committee at least 14 million Americans suffer from the more than 80 illnesses caused by autoimmunity. Many autoimmune diseases occur among young to middle-aged adults, leading to life-long disease and often life-changing disability. These conditions therefore also pose a disproportionate economic burden to healthcare systems in the industrialized world. Women are especially susceptible and comprise approximately 75% of diagnosed cases. Autoimmune diseases are among the ten leading causes of death among women in all age groups up to age 65. Contents

~~Although~~Pursuant ~~many~~to ~~of these~~cross-default ~~diseases~~provisions ~~can~~contained bein ~~treated~~certain ~~clinically~~of byBiovest’s ~~currently~~other ~~available~~outstanding ~~conventional~~notes ~~immunosuppressive~~in ~~regimens,~~the aggregate ~~important~~of ~~problems~~approximately ~~remain:~~$0.3 ~~some~~million ~~patients~~and ~~are~~$4.2 ~~refractory~~million, may be declared to ~~standard~~be ~~immunotherapy,~~in ~~and~~default ~~others~~as ~~respond~~well, ~~only~~and ~~partially.~~were Inissued ~~many~~to ~~cases, immunosuppressive~~(a) ~~therapies~~the orEconomic ~~therapies~~Development toAuthority ~~control~~for the ~~symptoms~~City of Coon Rapids (“EDA”) and the ~~disease~~Minnesota ~~must~~Investment beFund (“MIF”) ~~continued~~and ~~indefinitely~~(b) Laurus/Valens, ~~maintaining~~respectively. Biovest has not been notified of an ~~impaired~~event ~~immune~~of ~~system,~~default by the EDA and/or ~~often~~MIF ~~resulting~~and inthe ~~increased~~standstill ~~risk~~agreement of(discussed ~~infections~~below) ~~and~~precludes ~~other~~Laurus/Valens ~~serious~~from ~~health~~declaring ~~problems~~a cross-default under its Term B Notes.

3Effective November 17, 2012, Biovest entered into a standstill agreement with Corps Real and Laurus/Valens, pursuant to which (i) the maturity dates of the Biovest Corps Real Note and the Term A Notes were extended from November 17, 2012 to January 31, 2013 and (ii) Corps Real and Laurus/Valens granted Biovest a forbearance (until January 31, 2013) from their exercise of the rights and/or remedies available to them under the Biovest Corps Real Note, Term A Notes and Term B Notes. The standstill agreement allows Biovest the time and opportunity to negotiate with Corps Real and Laurus/Valens a potential restructuring of the Biovest Corps Real Note, Term A Notes, and Term B Notes. If Biovest defaults under the Biovest Corps Real Note following the expiration of the period covered by the standstill agreement, Corps Real will have the right to foreclose upon its first priority security interest in all of Biovest’s assets. If Biovest defaults under the Term A Notes following the expiration of the period covered by the standstill agreement, Laurus/Valens (a) will have right to foreclose upon their lien on all of Biovest’s assets (which is subordinate only to the security interest of Corps Real) and (b) may appoint one-third of the total membership of Biovest’s Board of Directors. The outcome of the negotiations relating to the restructuring of the Biovest Matured Obligations, which may include the remainder of Biovest’s outstanding debt, may negatively affect our ownership interest in Biovest and cause our potential deconsolidation/loss of control in Biovest.

~~Cyrevia™~~Effective ~~for~~December 3, 2012, Biovest issued an additional secured promissory note to Corps Real, which provides Biovest with a revolving line of credit in the ~~Treatment~~principal amount of ~~Autoimmune~~up ~~Disease~~to $1.5 million (the “Biovest Corps Real LOC”). The advances under the Biovest Corps Real LOC can only be used to sustain Biovest’s business operations. The Biovest Corps Real LOC accrues interest at the rate of 16% per annum and matures on the first anniversary of the closing of the Biovest Corps Real LOC. The Biovest Corps Real LOC is secured by a first priority lien of all Biovest’s assets and the Laurus/Valens Term A Notes and Term B Notes are now subordinate in right of payment and priority to the payment in full of the Biovest Corps Real LOC.

InOn ~~contrast~~December 20, to2012, ~~currently~~we ~~approved~~issued ~~therapies~~an ~~available~~additional tosecured ~~treat~~promissory ~~autoimmune~~note ~~disease~~to Pabeti, ~~Cyrevia~~the ~~seeks~~principal amount of up to ~~eliminate~~$0.125 million ~~virtually~~(the ~~all~~“Pabeti ~~circulating~~Note ~~white~~II”). ~~blood~~The ~~cells, including~~Pabeti ~~those~~Note ~~driving~~II ~~autoimmunity,~~can ~~while~~only ~~seeking~~be used to ~~spare~~sustain ~~the~~our ~~patient’s~~business ~~stem cells~~operations. AsThe Pabeti Note II accrues interest at the ~~patient’s~~rate ~~eliminated~~of ~~white~~16% ~~blood~~per ~~cells~~annum ~~are~~and ~~replenished~~matures ~~with~~on ~~new~~December ~~white~~20, ~~blood~~2013. ~~cells~~The ~~derived~~Pabeti ~~from~~Note ~~these~~is ~~stem~~secured ~~cells~~by a security interest in all of our assets and 6,666,666 ~~the~~shares ~~patient’s~~of ~~immune~~Biovest ~~system becomes~~common ~~effectively~~stock ~~replaced~~owned orby ~~“rebooted”~~us.

~~Cyrevia~~PRODUCTS consists of an active drug, Cytoxan® (cyclophosphamide), administered as part of an integrated risk-management system designed to assure its consistent use and minimize the risks of treatment. Cytoxan is currently FDA approved to treat disorders other than autoimmune disease, including various forms of cancer.

~~To facilitate our development and commercialization of Cyrevia, we have entered into an agreement (the “Baxter Agreement”) with Baxter Healthcare Corporation (“Baxter”), which we~~CYREVIA™ believe is the only current good manufacturing practice (“cGMP”) manufacturer approved in the U.S. by the FDA of injectable/infusion cyclophosphamide (under the brand name, Cytoxan) as referenced in the FDA Orange Book. The Baxter Agreement grants us the exclusive right to use Baxter’s regulatory file and drug history (“Drug Master File”) for Cytoxan, which we believe will advance our planned clinical trials and anticipated communications with the FDA. Additionally, the Baxter Agreement grants to us the exclusive right to purchase Baxter’s Cytoxan for the treatment of various autoimmune diseases, including autoimmune hemolytic anemia, multiple sclerosis, systemic sclerosis and the prevention of graft-versus-host disease following bone marrow transplant.

Cytoxan is a nitrogen mustard alkylating agent (it destroys target cells by binding to DNA and interfering with cell division and function) which is converted by the liver into an active chemotherapeutic agent. Cytoxan’s effects are dose-dependent. As used in Cyrevia, ~~Cytoxan~~ is ~~planned to be administered at~~ a ~~dose~~potential ~~of 50~~comprehensive ~~mg/kg,~~system ~~which is a unit~~ of ~~measurement~~care ~~where~~for ~~drug dosage is measured in milligrams based on~~ the ~~patient’s~~treatment ~~body weight measured in kilograms delivered in a series~~ of ~~four~~various ~~daily~~autoimmune ~~infusions (which is generally referred to as “Pulsed”) corresponding to a total dose of 200 mg/kg~~diseases. This dose represents an ultra-high-dose of Cytoxan, which is generally administered to cancer patients in total doses ranging from approximately 40 to 50 mg/kg or less over a period of two to five days. We refer to the dosing schedule of Cytoxan, as used in Cyrevia as “High-Dose Pulsed Cytoxan”.

Cyrevia includes a comprehensive risk-management system to restrict the use of High-Dose Pulsed Cytoxan to those patients anticipated to most benefit from the drug and to exclude patients for whom the drug is contraindicated. The ~~risk-management~~Immune ~~system~~System ~~includes pre-~~ and ~~post-treatment~~Autoimmunity drugs combined with careful monitoring during and after administration of Cytoxan to avoid or minimize infections and other adverse side effects which may result from the therapy. This computerized central risk-management system, which we refer to as “Cyrevia Bolstering Outcomes Of Therapy” or “REBOOTSM”, is intended to assist physicians and other Cyrevia care providers to maintain a consistent risk management approach when administering Cyrevia. We anticipate that this system will incorporate a number of safety questionnaires, protocols, and other educational materials for patients and providers; in addition, we anticipate the system will provide a series of computer-verified diagnostic assays and compliance checks integrated with patients’ treatment. The REBOOT system may also include a patient and physician registry to enable long-term follow-up and research to improve outcomes and minimize risk in treated patients. Furthermore, we expect to enhance patient safety by packaging, labeling and distributing the Cyrevia therapy only as part of the REBOOT system.

WeThe ~~anticipate~~immune ~~that our REBOOT~~ system ~~will~~is ~~be at~~ the ~~core~~body’s ofnatural adefense ~~formal~~mechanism ~~risk~~for ~~evaluation~~identifying and ~~mitigation~~killing ~~strategy~~or eliminating disease-causing pathogens (~~“REMS”)~~such ~~subject~~as tobacteria, viruses, ~~approval~~or byother ~~the~~foreign ~~FDA~~microorganisms) and tumor cells. AsIn ~~such~~humans, the ~~REBOOT~~primary ~~system~~disease ~~forms~~fighting afunction ~~critical~~of ~~part~~the ofimmune ~~our~~system ~~planned~~is ~~clinical~~carried ~~trial(s)~~out ~~and~~by ~~investigational~~white ~~new~~blood ~~drug~~cells ~~application~~(sleukocytes), which mediate two types of immune responses: innate immunity and ~~(“IND”)~~adaptive immunity. ~~REMS~~Innate ~~was~~immunity ~~authorized~~refers byto the ~~Food~~broad first-line immune defense that recognizes and ~~Drug~~eliminates ~~Administration~~certain ~~Amendments~~pathogens ~~Act~~prior to the initiation of ~~2007~~a ~~(the~~more ~~“FDAAA”)~~specific adaptive immune response. ~~REMS~~While ~~are~~the ~~frequently~~cells ~~and~~of ~~increasingly~~the ~~included~~innate asimmune ~~part~~system provide a first line of ~~INDs~~defense, ~~approvals~~they ~~and/~~cannot always eliminate or ~~labels~~recognize toinfectious ~~assure~~organisms. ~~safety~~In ~~and~~some tocases, ~~maximize benefit~~the innate immune system may not always recognize or detect infections. ~~REMS~~In ~~are~~these ~~subject~~cases, the adaptive immune response evolved to ~~enforcement~~provide bya highly ~~the~~specific ~~FDA~~and ~~through~~versatile ~~civil~~means ~~penalties~~of defense which also provides long-lasting protection (immune memory) against subsequent re-infection by the same pathogen.

4Autoimmune diseases are the result of white blood cells in the body recognizing and injuring or destroying normal (self) organs or tissues. In affected patients, the adaptive immune response (normally targeted against foreign antigens) becomes aberrantly targeted against self-tissues, leading to tissue damage, and chronic inflammation of affected organs. In severe cases patients may experience loss of function leading to disability or death. Autoimmune diseases are generally considered manageable in their early stages with immunosuppressive therapies or immunomodulating therapies. These therapies, however, are rarely considered “curative,” and even with modern standards of care, patients may suffer from chronic disease progression.

~~Previous~~Autoimmune ~~Clinical~~diseases ~~Studies~~pose ina ~~Cyclophosphamide~~major burden to ~~Treat~~society. According to the National Institutes of Health and its Autoimmune ~~Disease~~Diseases Coordinating Committee at least 14 million Americans suffer from the more than 80 illnesses caused by autoimmunity. Many autoimmune diseases occur among young to middle-aged adults, leading to life-long disease and often life-changing disability. These conditions therefore also pose a disproportionate economic burden to healthcare systems in the industrialized world. Women are especially susceptible and comprise approximately 75% of diagnosed cases. Autoimmune diseases are among the ten leading causes of death among women in all age groups up to age 65.

A3 number of small, single-arm, open label, uncontrolled trials that have been conducted at various institutions have suggested the effect of cyclophosphamide on the disease course of certain autoimmune diseases. These prior studies form the basis of our belief that Cyrevia, which incorporates High-Dose Pulsed Cytoxan, may potentially represent a new treatment option for certain autoimmune diseases and support our decision to pursue the development of Cyrevia. These prior studies are considered to be preliminary, and we believe that significant additional development is required before High-Dose Pulsed Cytoxan can be widely accepted as a therapeutic option for autoimmune disease. These additional developments, which are part of our Cyrevia development plan, include: (i) conducting a definitive controlled and randomized clinical trial for each specific autoimmune disease sufficient to demonstrate safety and efficacy to the satisfaction of the FDA as required to support potential marketing approval and (ii) developing a REMS for High-Dose Pulsed Cytoxan to assure that the therapy properly balances risks and benefits in a manner which is sufficient to obtain the approval of the FDA under the FDAAA.

Table 1. Published preliminary studies investigating High-Dose Pulsed Cytoxan for treatment of Autoimmune Diseases listed by disease. Contents

Autoimmune Disease	Study Site	Number ofPatientsTreated
Aplastic Anemia	JHU1, Hahnemann2, Wayne State		82
Systemic Sclerosis (diffuse cutaneous)	JHU		6
Systemic Lupus Erythematosus	JHU, Hahnemann		43
Multiple Sclerosis	JHU, Hahnemann, Stony Brook3		47
Myasthenia Gravis	JHU, Stanford University		13
Autoimmune Hemolytic Anemia (AIHA)	JHU, Hahnemann, University of Milan		12
CIDP	Hahnemann		5
Rheumatoid Arthritis	JHU, Queen Elizabeth Hospital4		5
Pemphigus	JHU, University of Miami		4
Graft-versus-host disease (bone marrow transplant)	JHU, Sidney Kimmel Cancer Center		117
	TOTAL		334

Although many of these diseases can be treated clinically by currently available conventional immunosuppressive regimens, important problems remain: some patients are refractory to standard immunotherapy, and others respond only partially. In many cases, immunosuppressive therapies or therapies to control the symptoms of the disease must be continued indefinitely, maintaining an impaired immune system, and often resulting in increased risk of infections and other serious health problems.

1Cyrevia™ ~~Johns~~for ~~Hopkins~~the ~~University,~~Treatment of Autoimmune Disease

2In ~~Medical~~contrast ~~College~~to ofcurrently approved ~~Pennsylvania-Hahnemann~~therapies ~~Hospital~~available atto ~~Drexel~~treat ~~University~~autoimmune disease, Cyrevia seeks to eliminate virtually all circulating white blood cells, including those driving autoimmunity, while seeking to spare the patient’s stem cells. As the patient’s eliminated white blood cells are replenished with new white blood cells derived from these stem cells, the patient’s immune system becomes effectively replaced or “rebooted”.

3Cyrevia ~~State~~consists ~~University~~of an active drug, Cytoxan® (cyclophosphamide), administered as part of ~~New~~an ~~York~~integrated atrisk-management ~~Stony~~system ~~Brook~~designed to assure its consistent use and minimize the risks of treatment. Cytoxan is currently FDA approved to treat disorders other than autoimmune disease, including various forms of cancer.

4To ~~Queen~~facilitate ~~Elizabeth~~our anticipated ~~Hospital~~development and potential commercialization of Cyrevia, ~~Adelaide~~we have entered into an agreement (the “Baxter Agreement”) with Baxter Healthcare Corporation (“Baxter”), ~~South~~which ~~Australia~~we believe is the only cGMP manufacturer approved in the U.S. by the FDA of injectable/infusion cyclophosphamide (under the brand name, Cytoxan) as referenced in the FDA Orange Book. The Baxter Agreement grants us the exclusive right to use Baxter’s regulatory file and drug history (“Drug Master File”) for Cytoxan, which we believe will advance our planned clinical trials and anticipated communications with the FDA. Additionally, the Baxter Agreement grants to us the exclusive right to purchase Baxter’s Cytoxan for the treatment of various autoimmune diseases, including autoimmune hemolytic anemia, multiple sclerosis, systemic sclerosis and the prevention of graft-versus-host disease following bone marrow transplant.

5Cytoxan is a nitrogen mustard alkylating agent (it destroys target cells by binding to DNA and interfering with cell division and function) which is converted by the liver into an active chemotherapeutic agent. Cytoxan’s effects are dose-dependent. As used in Cyrevia, Cytoxan is planned to be administered at a dose of 50 mg/kg, which is a unit of measurement where drug dosage is measured in milligrams based on the patient’s body weight measured in kilograms delivered in a series of four daily infusions (which is generally referred to as “Pulsed”) corresponding to a total dose of 200 mg/kg. This dose represents an ultra-high-dose of Cytoxan, which is generally administered to cancer patients in total doses ranging from approximately 40 to 50 mg/kg or less over a period of two to five days. We refer to the dosing schedule of Cytoxan, as used in Cyrevia as “High-Dose Pulsed Cytoxan”.

Cyrevia™ ~~Development~~includes ~~Plan~~a comprehensive risk-management system to restrict the use of High-Dose Pulsed Cytoxan to those patients anticipated to most benefit from the drug and to exclude patients for whom the drug is contraindicated. The risk-management system includes pre- and post-treatment drugs combined with careful monitoring during and after administration of Cytoxan to avoid or minimize infections and other adverse side effects which may result from the therapy. This computerized central risk-management system, which we refer to as “CyREvia Bolstering Outcomes Of Therapy” or “REBOOTSM”, is intended to assist physicians and other Cyrevia care providers to maintain a consistent risk management approach when administering Cyrevia. We anticipate that this system will incorporate a number of safety questionnaires, protocols, and other educational materials for patients and providers; in addition, we anticipate the system will provide a series of computer-verified diagnostic assays and compliance checks integrated with patients’ treatment. The REBOOT system may also include a patient and physician registry to enable long-term follow-up and research to improve outcomes and minimize risk in treated patients. Furthermore, we expect to enhance patient safety by packaging, labeling and distributing the Cyrevia therapy only as part of the REBOOT system.

~~Rationale~~We anticipate that our REBOOT system will be at the core of a formal risk evaluation and mitigation strategy (“REMS”) subject to approval by the FDA. As such, the REBOOT system forms a critical part of our planned clinical trial(s) and INDs. REMS was authorized by the Food and Drug Administration Amendments Act of 2007 (the “FDAAA”). REMS are frequently and increasingly included as part of INDs, approvals and/or labels to assure safety and to maximize benefit. REMS are subject to enforcement by the FDA through civil penalties.

~~Notwithstanding~~4 the prior reports of High-Dose Pulsed Cytoxan as a potential therapy for certain autoimmune diseases, Cytoxan is not currently FDA-approved for the treatment of any autoimmune diseases. These prior studies of High-Dose Pulsed Cytoxan in the U.S. were conducted at a limited number of large academic research hospitals and have featured non-uniform inclusion criteria and/or administration schedules. It is generally recognized that there may be significant potential risks of infection or other side effects when High-Dose Pulsed Cytoxan is not administered by highly-qualified personnel in a controlled and regulated clinical setting. While the previous studies are important to our Cyrevia development plan, they are largely not considered sufficient to support regulatory approval, although we plan to explore expedited regulatory pathways that may be available for the prevention of graft-versus-host disease following bone marrow transplant and/or mucositis based on current data generated to date. At the core of our Cyrevia development plan is a recognition that controlled and randomized clinical trials will be necessary to demonstrate the efficacy of High-Dose Pulsed Cytoxan to the satisfaction of the FDA and that safety will be an important regulatory and clinical concern which we believe will require an FDA approved formal REMS.

WhileTable there are approximately eighty recognized autoimmune diseases, we plan, based on availability of resources, to initially target the following autoimmune indications: the prevention of graft-versus-host disease following bone marrow transplant; mucositis; multiple sclerosis; systemic sclerosis; and autoimmune hemolytic anemia. Contents

WePrevious ~~are~~Clinical ~~preparing~~Studies ~~for pre-IND discussions with the FDA~~ in ~~order~~Cyclophosphamide to ~~determine~~Treat ~~the~~Autoimmune next steps necessary to seek approval for Cyrevia for the prevention of graft-versus-host disease following bone marrow transplant, an indication for which the FDA granted us Orphan Drug designation in June 2011Disease. Based on published Phase 2 open label clinical trial results, and the urgent need to improve the success rate of bone marrow transplants, including the ability to enable transplant from partially-matched donors, we intend to pursue all potential expedited regulatory pathways that the FDA may allow for this indication, including the accelerated approval process. In addition, we also intend to conduct pre-IND discussions with the FDA with regards to our planned clinical trial strategy and study protocol for the treatment of multiple sclerosis (“MS”). Based on FDA input, we anticipate filing an IND under which we expect to conduct our planned MS clinical trials. Furthermore, we plan to discuss with the FDA our plans for a REMS to be developed and mandated to accompany treatment with Cyrevia under the FDAAA. Further, we also anticipate conducting meetings with the FDA to discuss our planned regulatory strategy and clinical trials for Cyrevia for the treatment of autoimmune hemolytic anemia and systemic sclerosis, both indications were granted FDA Orphan Drug designation in February 2011 and June 2011, respectively.

~~Provided~~A number of small, single-arm, open label, uncontrolled trials that have been conducted at various institutions have suggested the effect of cyclophosphamide on the disease course of certain autoimmune diseases. These prior studies form the basis of our ~~planned~~belief that Cyrevia, ~~clinical~~which ~~trials,~~incorporates ~~once~~High-Dose ~~completed~~Pulsed Cytoxan, ~~demonstrate~~may ~~clinical~~potentially ~~benefit~~represent a new treatment option for certain autoimmune diseases and ~~safety~~support our decision to pursue the development of Cyrevia. These prior studies are considered to be preliminary, and we ~~would~~believe ~~anticipate~~that ~~discussing~~significant ~~next~~additional ~~steps~~development ~~with~~is ~~the~~required ~~FDA~~before High-Dose Pulsed Cytoxan can be widely accepted as a therapeutic option for autoimmune disease. These additional developments, which ~~could~~are part of our Cyrevia development plan, include: (i) conducting a definitive controlled and randomized clinical trial for each specific autoimmune disease sufficient to demonstrate safety and efficacy to the ~~suitability~~satisfaction of ~~seeking~~the ~~conditional~~FDA ~~and/or~~as ~~accelerated~~required ~~approvals~~to support potential marketing approval and~~/or~~ (ii) developing a REMS for High-Dose Pulsed Cytoxan to assure that the ~~appropriateness~~therapy properly balances risks and ~~design~~benefits in a manner which is sufficient to obtain the approval of ~~additional~~the ~~clinical~~FDA ~~trial(s)~~under the FDAAA.

~~Graft~~Table 1. Published preliminary studies investigating High-~~Versus-Host-Disease~~Dose Pulsed Cytoxan for treatment of Autoimmune Diseases listed by disease.

Disease Background


Autoimmune Disease	Study Site	Number of Patients Treated
Aplastic Anemia	JHU¹, Hahnemann², Wayne State		82
Systemic Sclerosis (diffuse cutaneous)	JHU		6
Systemic Lupus Erythematosus	JHU, Hahnemann		43
Multiple Sclerosis	JHU, Hahnemann, Stony Brook³		47
Myasthenia Gravis	JHU, Stanford University		13
Autoimmune Hemolytic Anemia (AIHA)	JHU, Hahnemann, University of Milan		12
CIDP	Hahnemann		5
Rheumatoid Arthritis	JHU, Queen Elizabeth Hospital⁴		5
Pemphigus	JHU, University of Miami		4
Graft-versus-host disease (bone marrow transplant)	JHU, Sidney Kimmel Cancer Center		117

	TOTAL		334

~~Graft-versus-host disease~~1 ~~(“GVHD”)~~Johns isHopkins a complication that can occur after a stem cell or bone marrow transplant in which the newly transplanted material attacks the transplant recipient’s body. GVHD occurs in a bone marrow or stem cell transplant involving a donor and a recipient. The bone marrow is the soft tissue inside bones that helps form blood cells, including white cells that are responsible for the immune response. Stem cells are normally found inside bone marrow. Since only identical twins have identical tissue types, a donor’s bone marrow is normally a close, but not perfect, match to the recipient’s tissues. The differences between the donor’s cells and recipient’s tissues often cause T-cells (a type of white blood cells) from the donor to recognize the recipient’s body tissues as foreign. When this happens, the newly transplanted cells attack the transplant recipient’s body. In June 2011, we were granted by the FDA Orphan Drug designation for Cyrevia™ for the prevention of GVHD following bone marrow transplant. University

~~Unmet~~2 Medical ~~Need~~College of Pennsylvania-Hahnemann Hospital at Drexel University

~~Acute~~3 ~~GVHD~~State ~~usually~~University ~~happens~~of ~~within~~New ~~the~~York ~~first~~at ~~three~~Stony ~~months after transplant. Chronic GVHD typically occurs more than three months after transplant, and can last a lifetime.~~ Brook

~~Rates~~4 ofQueen ~~GVHD~~Elizabeth ~~are reported to vary between 30 - 40% among related donors and recipients~~Hospital, ~~to 60 - 80% between unrelated donors and recipients. Greater mismatch between donor and recipient relates to an increased risk of GVHD. After a transplant~~Adelaide, ~~the~~South recipient usually takes drugs that suppress the immune system, which helps reduce the chances (or severity) of GVHD. While Cytoxan is often used off-label in such GVHD regimens, there is currently no standardized approved use of Cytoxan to prevent GVHD. Australia

6Cyrevia™ Development Plan

~~Cyrevia™~~Rationale ~~Experience~~

~~Expected~~Notwithstanding tothe beprior ~~administered~~reports of High-Dose Pulsed Cytoxan as ana ~~essential~~potential ~~post-transplant~~therapy ~~agent~~for ifcertain ~~approved~~autoimmune diseases, ~~Cyrevia~~Cytoxan ~~would~~is ~~represent~~not currently FDA-approved for the treatment of any autoimmune diseases. These prior studies of High-Dose Pulsed Cytoxan in the U.S. were conducted at a limited number of large academic research hospitals and have featured non-uniform inclusion criteria and/or administration schedules. It is generally recognized that there may be significant potential ~~therapeutic~~risks ~~approach~~of infection or other side effects when High-Dose Pulsed Cytoxan is not administered by highly-qualified personnel in a controlled and regulated clinical setting. While the previous studies are important to our Cyrevia development plan, ~~which~~they are largely not considered sufficient to support regulatory approval, although we ~~believe~~plan ~~might~~to ~~hold~~explore expedited regulatory pathways that may be available for the ~~potential~~prevention of graft-versus-host disease following bone marrow transplant and/or mucositis based on current data generated to ~~reduce~~date. At the ~~incidence~~ core of ~~GVHD~~our Cyrevia development plan is a recognition that controlled and ~~potentially~~randomized ~~enable~~clinical ~~both~~trials will ~~fully~~be necessary to demonstrate the efficacy of High-~~matched~~Dose Pulsed Cytoxan to the satisfaction of the FDA and ~~half-matched~~that ~~allogenic~~safety ~~bone~~will ~~marrow~~be ~~transplants,~~an ~~thus~~important ~~potentially~~regulatory ~~increasing~~and ~~transplant~~clinical ~~success~~concern ~~rates~~which we believe will require an FDA approved formal REMS.

~~Because~~While ofthere ~~its~~are ~~potent~~approximately ~~immunosuppressive~~80 ~~yet~~recognized ~~stem~~autoimmune ~~cell–sparing activity~~diseases, ~~Cyrevia~~we has been tested as sole prophylaxis of GVHD after fully-matched myeloablative allogeneic bone marrow transplantation (“alloBMT”). Clinicians at Johns Hopkins University (“JHU”) treated 117 patients (median ageplan, 50based years; range, 21-66 years) with advanced hematologic malignancies; 78 had partially human leukocyte antigen (“HLA”)–matched related donors and 39 had HLA-matched unrelated donors. All patients received conventional myeloablation with busulfan/Cytoxan (“BuCy”) and T-cell replete bone marrow followed by 50 mg/kg/d of Cytoxan on ~~days three~~availability ~~and four after transplantation. The incidences~~ of ~~acute grades II through IV and grades III through IV~~resources, ~~GVHD~~to ~~for~~initially ~~all~~target ~~patients~~the ~~were 43% and 10%, respectively. The non-relapse mortality at day 100 and two years after transplantation were 9% and~~following ~~17%,~~autoimmune ~~respectively.~~indications: ~~The~~multiple ~~actuarial~~sclerosis; overall survival and event-free survivals at two years after transplantation were 55% and 39%, respectively, for all patients and 63% and 54%, respectively, for patients who underwent transplantation while in remission. With a median follow-up of 26.3 months among surviving patients, the ~~cumulative~~prevention ~~incidence~~ of ~~chronic GVHD is 10%. These results suggest that Cyrevia, as a high~~graft-~~dose post~~versus-~~transplantation~~host ~~Cytoxan~~disease ~~regimen,~~following isbone anmarrow ~~effective~~transplant; ~~single-agent prophylaxis~~mucositis; ofsystemic ~~acute~~sclerosis; and ~~chronic~~autoimmune ~~GVHD~~hemolytic ~~after BuCy conditioning and HLA-matched BMT~~anemia. ~~Sources: (www.clinicaltrials.gov no. NCT00134017). (Blood. 2010;115(16):3224-3230).~~

Cyrevia also demonstrated highly encouraging results when administered to enable partially matched transplants. Historically, HLA-mismatched alloBMT has been associated with high rates of graft failure, severe GVHD and non-relapse mortality (mortality not related to the underlying condition). Increasing HLA-mismatch between donor and recipient has been associated with worse event-free survival (“EFS”), especially when donors are mismatched by two or more HLA antigens. Subsequently, two multicenter studies demonstrated that Cyrevia therapy resulted in chronic GVHD incidences after haplo-BMT that were similar to those seen after a fully matched BMT. Physicians at JHU and the Fred Hutchinson Cancer Research Center treated 68 patients with nonmyeloablative conditioning and partially HLA-mismatched bone marrow transplantation (“mini-haploBMT”). Patients received High-Dose Pulsed Cytoxan following the transplant on Day 3 or Days 3 and 4. The probabilities of grades II–IV and III–IV (serious) acute GVHD by day 200 were 34% and 6%, respectively. Furthermore, the group receiving 2 days of post-transplant High-Dose Pulsed Cytoxan experienced a reduced incidence of chronic GVHD as compared with the group receiving only one dose of High-Dose Pulsed Cytoxan (5% vs 25%, p=0.05). A more recently published study conducted through the Bone Marrow Transplant Clinical Trials Network reported the outcomes of nonmyeloablative conditioning and transplantation of partially HLA-mismatched marrow for patients with hematologic malignancies. GVHD prophylaxis consisted of intravenous High-Dose Pulsed Cytoxan 50 mg/kg over 1-2 hours on days +3 and +4. In addition, patients received tacrolimus and myceophenolate mofetil initiated day +5 after transplantation. Fifty-five patients enrolled, of whom fifty were treated and included in the analysis. After transplantation, the cumulative incidence of Grade II-IV acute GVHD at day +100 was 32% and there was no reported case of Grade III-IV acute GVHD. At 1-year, the cumulative incidence of chronic GVHD was 13%. The primary endpoint, 6-month overall survival (“OS”), was 84% and the 1-year cumulative incidence of non-relapse mortality was 7%.

TakenTable together, we believe these results demonstrate that Cyrevia may facilitate partially HLA-mismatched hematopoietic stem cell transplantation (“HSCT”) without severe GVHD consequences and can potentially mitigate the negative impact of HLA-disparity on transplantation outcome. Contents

~~Planned~~In ~~Regulatory~~addition, ~~Strategy~~we intend to ~~Advance~~conduct pre-IND discussions with the FDA with regards to our planned clinical trial strategy and study protocol for the treatment of multiple sclerosis. Based on FDA input, we anticipate filing an IND under which we expect to conduct our planned multiple sclerosis clinical trials. Furthermore, we plan to discuss with the FDA our plans for a REMS to be developed and mandated to accompany treatment with Cyrevia™ under the FDAAA. We also are preparing for pre-IND discussions with the ~~Prevention~~FDA in order to determine the next steps necessary to seek approval for Cyrevia for the prevention of ~~GVHD~~graft-versus-host ~~Following~~disease ~~Bone~~following ~~Marrow~~bone ~~Transplant~~marrow transplant. Based on published Phase 2 open label clinical trial results, and the urgent need to improve the success rate of bone marrow transplants, including the ability to enable transplant from partially-matched donors, we intend to pursue all potential expedited regulatory pathways that the FDA may allow for this indication, including the accelerated approval process. Provided that our planned Cyrevia clinical trials, once completed, demonstrate clinical benefit and safety, we would anticipate discussing next steps with the FDA which could include the suitability of seeking conditional and/or accelerated approvals and/or the appropriateness and design of additional clinical trial(s).

~~Based~~Multiple onSclerosis multiple published Phase 2 open label clinical trial results, the potential risk of non-strandardized off-label use of High-Dose Pulsed Cytoxan in GVHD, and the urgent need to improve the success rate of bone marrow transplants, including the ability to enable transplant from partially-matched donors, we intend to pursue all potential expedited regulatory pathways for Cyrevia that the FDA may allow for this indication, including the acclerated approval process. Therefore, we are preparing for pre-IND discussions with the FDA which we anticpate will occur in 2012. We plan to coordinate future GVHD clinical trials and their design based upon the FDA’s feedback and guidance.

7Disease Background

~~Multiple~~Approximately ~~Sclerosis~~400,000 people in the U.S. have multiple sclerosis (“MS”) with a prevalence rate of approximately 1 in 700 people and approximately 200 new patients diagnosed every week. MS is generally considered to be an autoimmune neurodegenerative disease in which local inflammation and autoimmune destruction of myelin (a fatty tissue which surrounds and protects the nerve fibers of the central nervous system) leads to acute injury and progressive nerve degeneration. Although the exact cause of MS remains unknown, most researchers and clinicians believe that the myelin is damaged due to an abnormal response by the body’s immune system. MS is a heterogeneous disease with a clinical course that varies with each patient; however, over time most patients inevitably lose significant neurological and physical function often including difficulty in walking leading to dependence on a cane and ultimately a wheelchair. Young adults between the ages of 20 and 30 are most at risk for MS, and women have a significantly higher risk than men. According to the Cleveland Clinic, there are multiple distinct clinical forms of MS, the most common of which is characterized by relapses followed by remissions, commonly referred to a relapsing-remitting multiple sclerosis (“RRMS”). Approximately 85% of MS patients have RRMS at disease onset, though approximately 50% of those will ultimately convert to a more aggressive form of MS referred to as secondary progressive MS (“SPMS”). Patients with RRMS experience flare-ups (also termed as relapses or attacks) and episodes of acute worsening and exacerbations of clinical neurological symptoms. These episodes are then typically followed by a period of recovery or remission. Several features predict the ultimate conversion to SPMS, including frequency of clinical attacks, accrual of disability, and the presence of gadolinium enhancing lesions which are frequently revealed on MRI. There are currently multiple approved drugs for the treatment of RRMS; however, MS is considered to be an uncured disease and even with currently approved therapies, most patients will experience progressive accrual of disability. In some cases, patients may eventually die of their disease. Current FDA approved disease modifying agents are only partially effective in controlling disease progression, and despite treatment with current agents, many patients experience disease breakthrough or progression. Furthermore, use of these therapies often imposes a life-long compliance burden on patients and leads to increased risks of infection, including instances of progressive multifocal leukoencephalopathy and other complications due to chronic immunosuppression. We believe that there is a large unmet medical need, and we are developing Cyrevia™, as a potential new therapeutic approach to treat MS.

~~Disease~~Cyrevia™ ~~Background~~Experience in the Treatment of MS

~~Approximately~~In ~~400,000~~contrast ~~people~~to incurrently ~~the~~approved ~~U.S.~~therapies ~~have~~available ~~multiple~~to ~~sclerosis (“MS”)~~treat ~~with a prevalence rate of approximately 1 in 700 people and approximately 200 new patients diagnosed every week.~~ MS, isCyrevia ~~generally~~seeks ~~considered~~ to beeliminate anvirtually ~~autoimmune~~all ~~neurodegenerative~~circulating ~~disease~~white inblood ~~which~~cells, ~~local~~including ~~inflammation~~those ~~and autoimmune~~responsible ~~destruction~~for ~~of myelin (a fatty tissue which surrounds and protects~~ the ~~nerve fibers of the central nervous system) leads to acute injury and progressive nerve degeneration. Although the exact cause of MS remains unknown~~autoimmunity, ~~most~~while ~~researchers~~sparing ~~and clinicians believe that~~ the ~~myelin is damaged due to an abnormal response by the body~~patient’s ~~immune~~stem ~~system~~cells. MSAs isthe ~~a heterogeneous disease with a clinical course that varies with each~~ patient;’s ~~however,~~eliminated ~~over~~white ~~time~~blood ~~most~~cells patients inevitably lose significant neurological and physical function often including difficulty in walking leading to dependence on a cane and ultimately a wheelchair. Young adults between the ages of 20 and 30 are ~~most~~replenished atwith ~~risk~~new ~~for~~white ~~MS,~~blood ~~and~~cells ~~women~~derived ~~have~~from athese ~~significantly higher~~stem ~~risk than men. According to the Cleveland Clinic~~cells, ~~there are multiple distinct clinical forms of MS,~~ the ~~most~~patient’s ~~common~~immune ofsystem ~~which~~becomes iseffectively ~~characterized~~replaced byor ~~relapses followed by remissions, commonly referred to a relapsing-remitting multiple sclerosis (~~“~~RRMS~~rebooted”). ~~Approximately~~The goal ~~eighty-five percent (85%)~~ of MSCyrevia ~~patients~~is ~~have RRMS at disease onset, though approximately fifty percent (50%) of those will ultimately convert~~ to apartially ~~more~~restore ~~aggressive form of MS referred~~ to asthe ~~secondary progressive~~extent MSpossible ~~(“SPMS”).~~neurologic ~~Patients with RRMS experience flare-ups (also termed as relapses or attacks)~~ and ~~episodes~~physical offunction ~~acute~~that ~~worsening~~has ~~and~~been ~~exacerbations~~lost ofdue ~~clinical neurological symptoms. These episodes are then typically followed by a period of recovery or remission. Several features predict the ultimate conversion~~ to SPMS, including frequency of clinical attacks, accrual of disability, and the presence of gadolinium enhancing lesions which are frequently revealed on MRI. There are currently multiple approved drugs for the treatment of RRMS; however, MS iswhile ~~considered~~delaying tofurther ~~be an uncured~~ disease and even with currently approved therapies, most patients will experience progressive accrual of disability. In some cases, patients may eventually die of their disease. Current FDA approved disease modifying agents are only partially effective in controlling disease progression~~, and despite treatment with current agents, many patients experience disease breakthrough or progression~~. Furthermore, use of these therapies often imposes a life-long compliance burden on patients and leads to increased risks of infection, including instances of progressive multifocal leukoencephalopathy and other complications due to chronic immunosuppression. We believe that there is a large unmet medical need, and we are developing Cyrevia™, as a potential new therapeutic approach to treat MS.

Three independent studies (see Table 2) conducted at three research universities formed the basis of our opinion that the proof of principle has been established that Cyrevia™ ~~Experience~~is both safe and effective in the treatment of MS and offers the ~~Treatment~~potential to reduce disease progression and restore neurological and physical function. The publications of these three studies, conducted at Stony Brook University (Stony Brook, NY), Drexel University (Philadelphia, PA), and Johns Hopkins University (Baltimore, MD) (“JHU”), form the basis and rationale for our planned clinical trial(s) to study Cyrevia for the treatment of MS.

In6 contrast to currently approved therapies available to treat MS, Cyrevia seeks to eliminate virtually all circulating white blood cells, including those responsible for the autoimmunity, while sparing the patient’s stem cells. As the patient’s eliminated white blood cells are replenished with new white blood cells derived from these stem cells, the patient’s immune system becomes effectively replaced or “rebooted”. The goal of Cyrevia is to partially restore to the extent possible neurologic and physical function that has been lost due to MS while delaying further disease progression.

Three independent studies (see Table 2) conducted at three research universities formed the basis of our opinion that the proof of principle has been established that Cyrevia is both safe and effective in the treatment of MS and offers the potential to reduce disease progression and restore neurological and physical function. The publications of these three studies, conducted at Stony Brook University (Stony Brook, NY), Drexel University (Philadelphia, PA), and Johns Hopkins University (Baltimore, MD), form the basis and rationale for our planned clinical trial(s) to study Cyrevia for the treatment of MS. Contents

8Table 2: Published Reports of the Use of High-Dose Pulsed Cyclophosphamide for Treatment of MS

~~Table 2~~Abbreviations: ~~Published~~RRMS=relapsing-remitting ~~Reports~~multiple ofsclerosis; ~~the~~EDSS=expanded ~~Use~~disability status scale; SPMS=secondary progressive multiple sclerosis; PPMS=primary progressive multiple sclerosis; MSQOL-54=Multiple Sclerosis Quality of ~~High~~Life-~~Dose~~54 ~~Pulsed~~Instrument; ~~Cyclophosphamide~~GEL=gadolinium-enhancing lesion; MSFC=Multiple Sclerosis Functional Composite a three-part, standardized, quantitative, assessment instrument for ~~Treatment~~use in clinical studies, particularly clinical trials, of MS. MSFC z-Score = a standardized score computed from components of the MSFC.

Study Site

Publication

Patients Treated

~~Patients~~Median ~~Treated~~Followup Reported

Primary Outcomes after High-Dose PulsedCyclophosphamide Treatment

~~Median Followup Reported~~

~~Primary Outcomes after High-Dose PulsedCyclophosphamide Treatment~~

Johns Hopkins University, Baltimore, MD

Krishnan, et al. Reduction of disease activity and disability with high-dose cyclophosphamide in patients with aggressivemultiple sclerosis. Arch Neurol. Aug 2008;65(8):1044-1051.

923 months

Primary endpoint: • 56% (5 of 9) of patients showed statistically-significant reduction in disability as measured by EDSS. • 2.11 point mean decrease in EDSS for 9 treated patients. • No deaths or unexpected serious adverse events were observed. • 2 patients worsened in EDSS (0.5 points). Secondary endpoints: • 81% mean reduction of GEL’s in MRI • Mean MSFC z-score improved.

~~23 months~~

Primary endpoint: • 56% (5 of 9) of patients showed statistically-significant reduction in disability as measured by EDSS • 2.11 point mean decrease in EDSS for 9 treated patients • No deaths or unexpected serious adverse events were observed. • 2 patients worsened in EDSS (0.5 points) Secondary endpoints: • 81% mean reduction of GEL’s in MRI • Mean MSFC z-score improved.

Stony Brook University, Stony Brook, NY

Gladstone, et al. High-dose cyclophosphamide for moderate to severe refractory multiple sclerosis. Arch Neurol. Oct 2006;63(10):1388-1393.

13 (12 evaluated)

1315 ~~(12 evaluated)~~months

Primary outcomes reported: • 75% (9 of 12) reported improvement in bladder function; 50% with complete symptom resolution. • 42% (5 of 12) of patients showed a statistically significant reduction in disability of as measured by EDSS score 1.04 point mean decrease in EDSS for 12 evaluated patients. • 0% of patients showed worsening in EDSS score. Other outcomes reported: • No significant change seen in GEL count in treated patients. • 44% (4 of 9 patients evaluated) report improved visual acuity. • 88% (7 of 8 patients evaluated) report reduction in fatigue. • 100% (10 of 10 patients evaluated) report improvement in SF-36 quality of life score

~~15 months~~

Primary outcomes reported: • 75% (9 of 12) reported improvement in bladder function; 50% with complete symptom resolution • 42% (5 of 12) of patients showed a statistically significant reduction in disability of as measured by EDSS score 1.04 point mean decrease in EDSS for 12 evaluated patients • 0% of patients showed worsening in EDSS score Other outcomes reported: • No significant change seen in GEL count in treated patients • 44% (4 of 9 pt’s evaluated) report improved visual acuity • 88% (7 of 8 pt’s evaluated) report reduction in fatigue • 100% (10 of 10 pt’s evaluated) report improvement in SF-36 quality of life score

9(continued)

Study Site

Publication

Patients Treated

Median Followup Reported

Primary Outcomes after High-Dose PulsedCyclophosphamide Treatment

Stony Brook University, Stony Brook, NY

Gladstone, et al. High-dose Cyclophosphamide for Moderate to Severe Refractory Multiple Sclerosis: 2-Year Follow-up (Investigational New Drug No. 65863). Am J Ther. Oct 14 2009.

13 (from 2006 study cohort above) 2 additional patients

24 months

Primary outcomes measured: • 73% (11 of 15) of patients showed statistically-significant reduction in disability as measured by EDSS • 1.1 mean decrease in EDSS for 15 evaluated patients • 75% (6 of 8) SPMS patients treated had stable disease or improvement at 2 years • 4 of 15 (27%) of patients showed disease progression Other outcomes reported: • No significant change seen in GEL count in treated patients

Drexel University, Philadelphia, PA

Schwartzman, et al. High-dose cyclophosphamide in the treatment of multiple sclerosis. CNS Neurosci Ther. Summer 2009;15(2):118-127.

3.5 years

Primary endpoint: • 78% (7 of 9) pt’s with RRMS improved at least one point in EDSS for >6 months. 1 of the two patients who did not meet the endpoint had a sustained improvement of 0.5 points on EDSS for 1.5 years. • 39% (9 of 23) pt’s overall, including patients with SPMS improved at least one point in EDSS for >6 months. Secondary and Tertiary Endpoints: • 44% of patients had no progression as of the study conclusion. • 78% (7 of 9) RRMS patients experienced reduced MS flare frequency • All RRMS patients experienced a significant increase in physical health, emotional well-being, and social functioning categories of quality of life as measured by the MS-QOL 54 survey.

Total

4 published articles of High-Dose Pulsed Cyclophosphamide for Treatment of MS

47 MS patients treated

AbbreviationsTable : RRMS=relapsing-remitting multiple sclerosis; EDSS=expanded disability status scale; SPMS=secondary progressive multiple sclerosis; PPMS=primary progressive multiple sclerosis; MSQOL-54=Multiple Sclerosis Quality of Life-54 Instrument; GEL=gadolinium-enhancing lesion; MSFC=Multiple Sclerosis Functional Composite a three-part, standardized, quantitative, assessment instrument for use in clinical studies, particularly clinical trials, of MS. MSFC z-Score = a standardized score computed from components of the MSFC. Contents

10Table 2: Published Reports of the Use of High-Dose Pulsed Cyclophosphamide for Treatment of MS

~~Planned~~(continued) ~~Regulatory Strategy to Advance Cyrevia™ for the Treatment of MS~~

While published studies suggest that Cyrevia may be safe and effective to treat MS, the use of this promising therapy has been limited to relatively small pilot studies conducted at a limited number of academic research hospitals. Because High-Dose Pulsed Cytoxan is generally considered to be an aggressive treatment with significant potential risks associated with its uses, we believe that this therapy will not become generally available to MS patients unless a pivotal, well-controlled Phase 3 clinical trial is conducted to determine safety and efficacy. Additionally, without marketing approval from the FDA, third-party reimbursement for this therapy will likely remain unavailable and the standard of care for MS will remain unchanged.


Study Site	Publication	Patients Treated	Median Followup Reported	Primary Outcomes after High-Dose Pulsed Cyclophosphamide Treatment
Stony Brook University, Stony Brook, NY	Gladstone, et al. High-dose Cyclophosphamide for Moderate to Severe Refractory Multiple Sclerosis: 2-Year Follow-up (Investigational New Drug No. 65863). Am J Ther. Oct 14 2009.	13 (from 2006 study cohort above) 2 additional patients	24 months	Primary outcomes measured: • 73% (11 of 15) of patients showed statistically-significant reduction in disability as measured by EDSS • 1.1 mean decrease in EDSS for 15 evaluated patients • 75% (6 of 8) SPMS patients treated had stable disease or improvement at 2 years • 4 of 15 (27%) of patients showed disease progression Other outcomes reported: • No significant change seen in GEL count in treated patients

Drexel University, Philadelphia, PA	Schwartzman, et al. High-dose cyclophosphamide in the treatment of multiple sclerosis. CNS Neurosci Ther. Summer 2009;15(2):118-127.	23	3.5 years	Primary endpoint: • 78% (7 of 9) patients with RRMS improved at least one point in EDSS for >6 months. 1 of the two patients who did not meet the endpoint had a sustained improvement of 0.5 points on EDSS for 1.5 years. • 39% (9 of 23) patients overall, including patients with SPMS improved at least one point in EDSS for >6 months. Secondary and Tertiary Endpoints: • 44% of patients had no progression as of the study conclusion. • 78% (7 of 9) RRMS patients experienced reduced MS flare frequency • All RRMS patients experienced a significant increase in physical health, emotional well-being, and social functioning categories of quality of life as measured by the MS-QOL 54 survey.

Total	4 published articles of High-Dose Pulsed Cyclophosphamide for Treatment of MS	47 MS patients treated

In8 September 2007, we conducted an initial meeting with the FDA regarding our proposed design of a clinical trial in MS for Cyrevia. Since our initial meeting with the FDA, a number of studies of High-Dose Pulsed Cytoxan in MS have reported follow-up data (see Table 2) which we expect will provide support and guide the design of future planned clinical trial(s). We intend to conduct follow-up pre-IND meetings with the FDA in 2012 to discuss our planned clinical trial strategy and study protocol(s) for the treatment of MS. Based on FDA input and availability of resources, we anticipate filing an IND under which we plan to conduct MS clinical trials. Further, we plan to discuss with the FDA our plans for a REMS to be developed and mandated to accompany treatment with Cyrevia under the FDAAA.

SystemicTable Sclerosisof Contents

~~Disease~~Planned ~~Background~~Regulatory Strategy to Advance Cyrevia™ for the Treatment of MS

~~Systemic~~Prior ~~sclerosis~~studies isof ahigh-dose ~~chronic,~~pulsed ~~multisystem~~cyclophosphamide ~~autoimmune~~in ~~disease characterized by hardening of~~ the ~~skin~~U.S. ~~and~~have ~~affected~~been ~~tissues,~~conducted ~~blood~~at ~~vessel~~a ~~(vascular)~~limited ~~alterations,~~number ~~and the presence~~ of ~~autoimmune~~large ~~antibodies~~academic ~~(autoantibodies)~~research inhospitals ~~the~~and ~~blood. Patients with systemic sclerosis often experience Raynaud’s phenomenon, a~~have ~~condition~~featured ~~associated~~non-uniform ~~with~~inclusion ~~discoloration~~criteria ~~of fingers~~ and/or ~~toes~~administration ~~when~~schedules. ~~exposed~~While tothe ~~changes~~previous instudies ~~temperature~~are orimportant ~~emotional~~to ~~events.~~our ~~Systemic~~Cyrevia ~~sclerosis~~development isplan, ~~most~~the ~~common~~studies inare ~~females~~likely ~~who~~not ~~are~~sufficient 30 to 50support ~~years~~regulatory ~~of age~~approval.

~~The~~We ~~underlying~~conducted ~~disease~~an ~~etiology,~~initial ormeeting ~~cause,~~with ofthe ~~systemic~~FDA ~~sclerosis~~regarding ~~remains~~our ~~largely~~proposed ~~unknown~~design ~~but~~of a clinical trial in ~~affected~~MS ~~patients,~~for ~~prolonged~~Cyrevia. ~~activation~~Since ofour initial meeting with the ~~immune~~FDA ~~system~~a ~~and~~number ~~inflammation~~of ~~results~~studies utilizing high-dose pulsed cyclophosphamide in ~~extensive~~MS, ~~tissue~~have ~~damage~~reported ~~and~~follow-up ~~repair.~~data, ~~Continuous~~which ~~remodeling~~we ~~and~~expect ~~repair~~will ~~and~~provide ansupport ~~inability~~for toand ~~terminate~~guide the ~~reparative~~design ~~processes~~of ~~leads~~future toplanned ~~persistent~~clinical ~~connective~~trial(s). ~~tissue~~We ~~remodeling,~~intend ~~scarring,~~to ~~and~~conduct ~~fibrosis.~~follow-up ~~Some~~pre-IND ~~patients~~meetings ~~may~~with ~~have~~the ~~only~~FDA ain ~~few~~calendar ~~affected~~year ~~areas,~~2013 ~~but~~to ~~others~~discuss ~~suffer~~our ~~from~~planned ~~progressive~~clinical ~~skin~~trial ~~involvement~~strategy ~~that~~and ~~becomes~~study protocol(s) for the ~~source~~treatment of ~~much~~MS, ~~affliction~~graft-versus-host asdisease ~~the~~following ~~condition~~bone ~~worsens.~~marrow ~~Systemic~~transplant, systemic sclerosis ~~can~~and beautoimmune ~~divided~~hemolytic ~~into~~anemia. ~~two~~Based ~~primary~~on the ~~forms:~~FDA’s ~~diffuse~~input ~~cutaneous~~and ~~systemic sclerosis~~our ~~(“dcSSc”)~~analyses ~~and~~of ~~limited~~available ~~cutaneous~~data, ~~systemic~~we ~~sclerosis~~anticipate ~~(“lcSSc”)~~filing an IND under which we expect to conduct our planned clinical trials. ~~Approximately~~Further, ~~60%~~we ofplan ~~systemic~~to ~~sclerosis~~discuss ~~patients~~with ~~have~~the ~~lcSSc~~FDA our plans for a REMS, ~~while~~which ~~approximately~~we ~~35% have~~developed and mandated to accompany the ~~dcSSC~~treatment regimen for Cyrevia.

~~dcSSc~~Graft-Versus-Host-Disease typically presents as skin manifestations affecting the hands, arms and face. Additionally, pulmonary arterial hypertension may occur in up to one third of patients and is the most serious complication for this form of systemic sclerosis. dcSSc comprises a very severe form of systemic sclerosis which progresses rapidly and affects a large area of the skin and one or more internal organs, frequently the kidneys, esophagus, heart and lungs. dcSSc leads to substantial disability and/or death. We are planning clinical trials to study dcSSc, which has an estimated U.S. prevalence of approximately 30,000 cases with an estimated incidence of approximately 2100 annually. In June 2011, we were granted by the FDA, Orphan Drug designation for Cyrevia™ for the treatment of systemic sclerosis.

~~Unmet~~Disease ~~Medical~~Background ~~Need~~

~~dsSSc~~Graft-versus-host disease (“GVHD”) is a ~~severe~~complication ~~disease~~that ~~with~~can occur ~~the~~after ~~highest~~a ~~case-specific~~stem ~~mortality~~cell ~~of any~~or ~~rheumatic~~bone ~~disorder,~~marrow ~~with~~transplant ~~50%~~in ofwhich ~~patients~~the ~~dying~~newly ortransplanted ~~developing~~material ~~major~~attacks ~~organ~~the ~~complications~~transplant ~~within~~recipient’s 3body. ~~years~~GVHD ofoccurs ~~diagnosis~~in ~~(Denton~~a bone marrow or stem cell transplant involving a donor and ~~Black~~a ~~2005)~~recipient. ~~Currently~~The ~~there~~bone marrow is nothe soft ~~treatment~~tissue inside bones that ~~has~~helps ~~been~~form ~~proven~~blood tocells, ~~prevent~~including ~~progression~~white ofcells ~~disease~~that are responsible for the immune response. Stem cells are normally found inside bone marrow. Since only identical twins have identical tissue types, ~~underscoring~~a donor’s bone marrow is normally a close, but not perfect, match to the recipient’s tissues. The differences between the donor’s cells and recipient’s tissues often cause T-cells (a type of white blood cells) from the donor to recognize the ~~huge~~recipient’s ~~unmet~~body ~~medical~~tissues ~~need~~as inforeign. When this ~~disease~~happens, the newly transplanted cells attack the transplant recipient’s body. In June 2011, we were granted by the FDA Orphan Drug designation for Cyrevia™ for the prevention of GVHD following bone marrow transplant.

~~Autologous~~Unmet ~~stem~~Medical ~~cell~~Need transplantation can significantly improve the skin score, a measure of disease progression in dcSSc. However, reported transplant-related mortality ranges from 8.7%-17%. Other immune modulatory agents have been studied with varying results; either the trials were too small or uncontrolled to definitively determine the efficacy of the treatment or randomized, controlled trials were conducted without demonstrating a clinically significant benefit.

11Acute GVHD usually happens within the first three months after transplant. Chronic GVHD typically occurs more than three months after transplant, and can last a lifetime.

~~Cyrevia™~~Rates ~~Experience~~of GVHD are reported to vary between 30-40% among related donors and recipients, to 60-80% between unrelated donors and recipients. Greater mismatch between donor and recipient relates to an increased risk of GVHD. After a transplant, the recipient usually takes drugs that suppress the immune system, which helps reduce the chances (or severity) of GVHD. While Cytoxan is often used off-label in ~~dsSSc~~such GVHD regimens, there is currently no standardized approved use of Cytoxan to prevent GVHD.

An open-label trial of High-Dose Pulsed Cytoxan in patients with clinically active dsSSc patients was conducted at JHU (Tehlirian et.al. published these results in 2008). This study forms the basis of our planned clinical trial of Cyrevia™ ~~for dcSSc.~~ Experience

InExpected ~~this~~to ~~study,~~be ~~six~~administered ~~patients~~as ~~with~~an ~~diffuse~~essential ~~cutaneous~~post-transplant ~~systemic~~agent ~~sclerosis~~if ~~were~~approved, ~~treated.~~Cyrevia ~~One~~would ~~patient died~~represent of a ~~pulmonary~~potential ~~infection~~therapeutic ~~(seven weeks after treatment) that was acquired after the absolute neutrophil count had normalized~~approach, which ~~indicating~~we ~~that~~believe ~~the~~might ~~infection~~hold ~~was not acquired during~~ the ~~immune~~potential ~~ablation~~to ~~period.~~reduce ~~This patient experienced acute respiratory distress syndrome associated with a fungal infection and a decline in kidney function. This patient had extensive lung disease at~~ the ~~time~~incidence of ~~entry~~GVHD ~~into~~and ~~the~~potentially ~~study.~~enable ~~This~~both ~~highlights the need for a robust system of care during High~~fully-~~Dose Pulsed~~matched ~~Cytoxan treatment~~ and ~~the~~half-matched ~~requirement~~allogenic ~~for~~bone ~~highly~~marrow ~~selective inclusion criteria~~transplants, ~~especially~~thus inpotentially ~~patients~~increasing ~~with~~transplant ~~organ~~success ~~involvement and damage as a result of their autoimmune disease~~rates.

~~The~~Because ~~primary~~of ~~endpoint~~its ~~was~~potent ~~the~~immunosuppressive ~~modified~~yet ~~Rodnan~~stem ~~skin~~cell–sparing ~~score~~activity, Cyrevia has been tested as sole prophylaxis of GVHD after fully-matched myeloablative allogeneic bone marrow transplantation (“~~mRSS~~alloBMT”). Clinicians at Johns Hopkins University (“JHU”) treated 117 patients (median age, a50 ~~typical~~years; ~~efficacy~~range, ~~endpoint~~21-66 ~~for~~years) ~~systemic~~with ~~sclerosis~~advanced ~~trials.~~hematologic ~~The~~malignancies; ~~mRSS~~78 ~~measures~~had partially ~~skin~~human ~~thickness~~leukocyte antigen (“HLA”)-matched related donors and ~~collagen~~39 ~~content~~had ofHLA-matched ~~skin~~unrelated donors. ~~In dcSSc,~~All ~~increasing~~patients ~~skin~~received ~~thickness~~conventional ismyeloablation ~~associated~~ with ~~increased~~busulfan/Cytoxan ~~disease~~(“BuCy”) ~~activity,~~and T-cell replete bone marrow followed by 50 mg/kg/d of Cytoxan on days three and afour ~~reduction~~after intransplantation. ~~mRSS~~The isincidences ~~associated~~of ~~with~~acute agrades ~~more~~II ~~favorable~~through ~~outcome~~IV and grades III through IV, ~~with~~GVHD afor ~~reduction~~all ofpatients 25were 43% ~~considered~~and ~~clinically~~10%, ~~significant~~respectively. The ~~study~~non-relapse ~~reported~~mortality ~~that~~at inday ~~five~~100 ~~evaluable patients,~~and ~~mRSS~~2 ~~was~~years ~~reduced~~after transplantation bywere 609% and 17%, respectively. The actuarial overall survival and event-free survivals at 2 years after transplantation were 55%, 41and 39%, ~~31%~~respectively, for all patients and 063% and 54%, respectively, for patients who underwent transplantation while in remission. ~~The~~With ~~study~~a ~~further~~median ~~reported~~follow-up ~~that~~of ~~four~~26.3 months among surviving patients, ~~out~~the cumulative incidence of ~~five~~chronic ~~responded~~GVHD ~~initially~~is 10%. These results suggest that Cyrevia, ~~while~~as ~~one~~a ~~responded~~high-dose ~~but~~post-transplantation ~~relapsed~~Cytoxan atregimen, 6is ~~months~~an effective single-agent prophylaxis of acute and chronic GVHD after BuCy conditioning and HLA-matched BMT. Sources: www.clinicaltrials.gov no. NCT00134017 and Blood 2010; 115(16):3224-3230.

~~The~~Cyrevia ~~physician’s~~also ~~global~~demonstrated ~~assessment~~highly encouraging results when administered to enable partially matched transplants. Historically, HLA-mismatched alloBMT has been associated with high rates of graft failure, severe GVHD and non-relapse mortality (mortality not related to the underlying condition). Increasing HLA-mismatch between donor and recipient has been associated with worse event-free survival (“~~PGA~~EFS”), ~~was~~especially ~~reported~~when todonors ~~have~~are ~~improved~~mismatched ~~for~~by ~~four~~two ofor ~~five~~more ~~patients~~HLA ~~47%,~~antigens. ~~69%~~Subsequently, ~~56%,~~two ~~and~~multicenter ~~59%~~studies ~~within~~demonstrated ~~first~~that ~~month~~Cyrevia therapy resulted in chronic GVHD incidences after ~~treatment,~~haplo-BMT that were similar to those seen after a fully matched BMT. Physicians at JHU and ~~80%~~the ~~for~~Fred ~~one~~Hutchinson ofCancer ~~five~~Research ~~within~~Center treated 68 patients with nonmyeloablative conditioning and partially HLA-mismatched bone marrow transplantation (“mini-haploBMT”). Patients received High-Dose Pulsed Cytoxan following the ~~first~~transplant ~~three~~on ~~months~~Day 3 or Days 3 and 4. The ~~forced~~probabilities ~~vital~~of ~~capacity~~grades II–IV and III–IV (~~“FVC”~~serious) acute GVHD by day 200 were 34% and 6%, respectively. Furthermore, the group receiving 2 days of post-transplant High-Dose Pulsed Cytoxan experienced a ~~measure~~reduced incidence of ~~lung~~chronic ~~function~~GVHD as compared with the group receiving only one dose of High-Dose Pulsed Cytoxan (5% vs 25%, ~~also~~p=0.05). ~~stabilized~~A inmore ~~four~~recently published study conducted through the Bone Marrow Transplant Clinical Trials Network reported the outcomes of ~~six~~nonmyeloablative conditioning and transplantation of partially HLA-mismatched marrow for patients with hematologic malignancies. ~~One~~GVHD ~~patient’s~~prophylaxis ~~FVC~~consisted ~~worsened~~of ~~due~~intravenous toHigh-Dose Pulsed anCytoxan ~~infection,~~50 mg/kg ~~then~~over ~~returned~~1-2 tohours ~~baseline~~on days +3 and +4. ~~Five~~In ofaddition, patients received tacrolimus and myceophenolate mofetil initiated day +5 after transplantation. Fifty-five patients ~~improved~~enrolled, of whom fifty were treated and included in the onanalysis. After transplantation, the ~~Health~~cumulative ~~Assessment~~incidence ~~Questionnaire~~of ~~Disability~~Grade ~~Index~~II-IV acute GVHD at day +100 was 32% and there was no reported case of Grade III-IV acute GVHD. At 1-year, the cumulative incidence of chronic GVHD was 13%. The primary endpoint, 6-month overall survival (“OS”), was 84% and the 1-year cumulative incidence of non-relapse mortality was 7%.

~~Planned~~9 ~~Clinical Trial of Cyrevia™ in dcSSc~~

AsTable resources permit, we plan to conduct pre-IND meetings with the FDA to discuss clinical trials of Cyrevia in patients who have evidenced moderately severe organ damage and clinical evidence of active disease. Contents

~~Autoimmune~~Taken ~~Hemolytic~~together, ~~Anemia~~we believe these results demonstrate that Cyrevia may facilitate partially HLA-mismatched hematopoietic stem cell transplantation (“HSCT”) without severe GVHD consequences and can potentially mitigate the negative impact of HLA-disparity on transplantation outcome.

~~Disease~~Planned ~~Background~~Regulatory Strategy to Advance Cyrevia™ for the Prevention of GVHD Following Bone Marrow Transplant

WeBased ~~plan~~on tomultiple ~~study autoimmune~~published ~~hemolytic~~Phase ~~anemia~~2 ~~(“AIHA”),~~open alabel ~~disease~~clinical intrial ~~which~~results, the ~~body’s~~potential ~~immune~~risk ~~system~~of ~~attacks~~non-strandardized ~~its~~off-label ~~own~~use ~~red~~of ~~blood~~High-Dose ~~cells~~Pulsed ~~(“RBCs”)~~Cytoxan in GVHD, ~~leading~~and tothe ~~their~~urgent ~~destruction,~~need orto ~~hemolysis.~~improve ~~While~~the ~~studies~~success rate of ~~prevalence~~bone ofmarrow ~~AIHA~~transplants, inincluding the ~~U.S.~~ability ~~are~~to ~~few~~enable transplant from partially-matched donors, we ~~estimate~~intend ~~the~~to ~~U.S.~~pursue ~~prevalence~~all ofpotential ~~AIHA~~expedited atregulatory ~~approximately~~pathways ~~50,000~~for ~~cases~~Cyrevia ~~based~~that onthe ~~epidemiological~~FDA ~~studies~~may inallow ~~other~~for ~~countries.~~this ~~The~~indication, Uincluding the acclerated approval process.S. ~~incidence~~Therefore, ofwe ~~AIHA~~are ispreparing ~~approximately~~for ~~2,400 per~~pre-IND ~~year.~~discussions Inwith ~~February~~the ~~2011,~~FDA which we ~~were~~anticipate ~~granted~~will byoccur ~~FDA~~in ~~Orphan~~2013. ~~Drug designation~~We ~~for~~plan ~~Cyrevia™~~to ~~for~~coordinate future GVHD clinical trials and their design based upon the ~~treatment~~FDA’s ofguidance ~~AIHA.~~and feedback.

InSystemic ~~affected~~Sclerosis patients, a process of increased destruction of RBCs takes place mediated by the formation of anti-RBC autoantibodies (an autoantibody is an antibody produced by the body in reaction to the body’s own cells). AIHA can occur at any age and affects women more often than men. About half of the time, the cause of AIHA cannot be determined (idiopathic AIHA). AIHA can also be caused by or occur with another disorder, such as systemic lupus erythematosus (lupus), and rarely it follows the use of certain drugs, such as penicillin.

~~AIHA~~Disease ~~frequently~~Background commences as an acute, sometimes life-threatening disease often requiring hospitalization, but is considered a chronic disease. In some people, the destruction may stop after a period of time. In other people, red blood cell destruction persists and becomes chronic. There are two main types of AIHA: warm antibody hemolytic anemia (“WAIHA”) and cold antibody hemolytic anemia (“CAIHA”). In the warm antibody type, the autoantibodies attach to and destroy red blood cells at temperatures equal to or in excess of normal body temperature. In the cold antibody type, the autoantibodies become most active and attack red blood cells only at temperatures well below normal body temperature. Rarely, patients have both cold- and warm-reactive autoantibodies and are classified as mixed-type AIHA.

~~AIHA~~Systemic assclerosis ~~the~~is a ~~cause~~chronic, multisystem autoimmune disease characterized by hardening of ~~hemolysis~~the isskin ~~confirmed~~and ~~when~~affected tissues, blood ~~tests~~vessel ~~detect~~(vascular) ~~increased~~alterations, ~~amounts~~and the presence of ~~certain~~autoimmune antibodies, ~~either~~(autoantibodies) ~~attached~~in tothe ~~red~~ blood. ~~cells~~Patients ~~(“RBCs”)~~with ~~(direct~~systemic ~~antiglobulin~~sclerosis often orexperience ~~Coombs~~Raynaud’ ~~test)~~s orphenomenon, ina ~~the~~condition ~~liquid~~associated ~~portion~~with discoloration of ~~the~~fingers ~~blood~~and/or ~~(indirect~~toes ~~antiglobulin~~when exposed to changes in temperature or ~~Coombs’~~emotional ~~test)~~events. ~~Other~~Systemic ~~tests~~sclerosis ~~sometimes~~is ~~help~~most ~~determine~~common ~~the~~in ~~cause~~females ofwho ~~the~~are ~~autoimmune~~30 ~~reaction~~to ~~that~~50 isyears ~~destroying~~of ~~RBCs~~age.

12The underlying disease etiology, or cause, of systemic sclerosis remains largely unknown but in affected patients, prolonged activation of the immune system and inflammation results in extensive tissue damage and repair. Continuous remodeling and repair and an inability to terminate the reparative processes leads to persistent connective tissue remodeling, scarring, and fibrosis. Some patients may have only a few affected areas, but others suffer from progressive skin involvement that becomes the source of much affliction as the condition worsens. Systemic sclerosis can be divided into two primary forms: diffuse cutaneous systemic sclerosis (“dcSSc”) and limited cutaneous systemic sclerosis (“lcSSc”). Approximately 60% of systemic sclerosis patients have lcSSc, while approximately 35% have the dcSSC.

IfdcSSc ~~symptoms~~typically ~~are~~presents ~~mild~~as orskin ifmanifestations ~~destruction~~affecting ofthe ~~RBCs~~hands, ~~seems~~arms toand beface. ~~slowing~~Additionally, onpulmonary ~~its~~arterial ~~own,~~hypertension nomay ~~treatment~~occur isin ~~needed.~~up Ifto ~~RBCs~~one-third ~~destruction~~of patients and is ~~increasing,~~the amost ~~corticosteroid~~serious ~~such~~complication asfor ~~prednisone~~this isform ~~usually~~of ~~the~~systemic ~~first~~sclerosis. ~~choice~~dcSSc ~~for~~comprises ~~treatment~~a ~~for~~very ~~WAIHA.~~severe ~~High~~form ~~doses~~of ~~are~~systemic ~~used~~sclerosis atwhich ~~first,~~progresses ~~followed~~rapidly byand affects a ~~gradual~~large ~~reduction~~area of the ~~dose~~skin ~~over~~and ~~many~~one ~~weeks~~ or ~~months.~~more ~~When~~internal ~~WAIHA~~organs, frequently ~~patients~~the dokidneys, ~~not respond~~esophagus, toheart ~~corticosteroids~~and orlungs. ~~when~~dcSSc ~~the~~leads ~~corticosteroid~~to ~~causes~~substantial ~~intolerable~~disability ~~side~~and/or ~~effects,~~death. ~~surgery~~We toare ~~remove~~planning ~~the~~clinical ~~spleen~~trials ~~(splenectomy)~~to isstudy ~~often~~dcSSc, ~~the~~which ~~next~~has ~~treatment~~an estimated U.S. ~~The~~prevalence ~~spleen~~of isapproximately ~~removed~~30,000 ~~because~~cases itwith isan ~~one~~estimated incidence of ~~the~~approximately ~~places~~2100 ~~where antibody-coated RBCs are destroyed~~annually. ~~When~~In ~~destruction~~June of2011, ~~RBCs~~we ~~persists~~were ~~after~~granted ~~removal~~by of the ~~spleen~~FDA orOrphan ~~when~~Drug ~~surgery~~designation ~~cannot~~for beCyrevia™ ~~done,~~for ~~immunosuppressive~~the ~~drugs~~treatment ~~may~~of besystemic ~~used~~sclerosis.

~~When~~Unmet ~~RBC~~Medical ~~destruction~~Need ~~is severe, blood transfusions are sometimes needed, but they do not treat the cause of the anemia and provide only temporary relief.~~

~~Unmet~~dsSSc ~~Medical~~is ~~Need~~a severe disease with the highest case-specific mortality of any rheumatic disorder, with 50% of patients dying or developing major organ complications within 3 years of diagnosis (Denton and Black 2005). Currently there is no treatment that has been proven to prevent progression of disease, underscoring a huge unmet medical need in this disease.

~~We believe~~Autologous ~~that~~stem ~~there~~cell istransplantation acan ~~need~~significantly ~~for~~improve ~~additional~~the ~~therapeutic~~skin ~~options~~score, toa ~~treat~~measure ~~both~~of ~~warm~~disease progression ~~and~~in ~~cold AIHA~~dcSSc. ~~Only~~However, 15reported transplant-~~20%~~related ofmortality ~~patients~~ranges ~~achieve~~from ~~complete~~8.7%-17%. ~~remission~~Other ~~with~~immune ~~standard~~modulatory ~~first~~agents ~~line~~have ~~therapy,~~been ~~corticosteroids.~~studied ~~Adverse~~with ~~events~~varying ~~related~~results; toeither ~~corticosteroid~~the ~~therapy include~~trials ~~excessive~~were ~~weight~~too ~~gain,~~small ~~skin~~or ~~flushing,~~uncontrolled ~~neuropsychiatric~~to ~~disorders,~~definitively ~~sleep~~determine ~~disturbances,~~the ~~increased~~efficacy of ~~risk~~the oftreatment ~~cardiovascular~~or ~~events~~randomized, ~~cataracts,~~controlled ~~and~~trials ~~myopathy.~~were ~~Co-morbidities~~conducted ~~exacerbated~~without bydemonstrating ~~corticosteroids~~a ~~include~~clinically ~~diabetes,~~significant ~~hypertension, hyperlipidemia, heart failure, glaucoma, and peptic ulcer disease~~benefit.

~~Usually splenectomy, the surgical removal of the spleen, is used as a~~Cyrevia™ ~~second-line~~Experience ~~therapy,~~in ~~which~~dsSSc elicits a 50% response rate. Options for patients unresponsive or refractory to corticosteroids and splenectomy are limited. In WAIHA, the chance of spontaneous or drug-induced remission or cure is extremely low. An urgent need exists for new, better treatments of WAIHA, especially for steroid-refractory or unresponsive patients. CAIHA does not respond to either steroids or splenectomy and therefore remains a significant clinical challenge.

~~Cyrevia™~~An ~~Experience~~open-label trial of High-Dose Pulsed Cytoxan in patients with ~~AIHA~~clinically active dsSSc patients was conducted at JHU (Tehlirian et.al. published these results in 2008). This study formed the basis of our planned clinical trial of Cyrevia for dcSSc.

~~Following~~In this ~~studies~~study, insix ~~other~~patients ~~severe~~with ~~autoimmune~~diffuse ~~disorders,~~cutaneous ~~High-Dose~~systemic ~~Pulsed~~sclerosis ~~Cytoxan~~were ~~was~~treated. ~~studied~~One inpatient ~~patients~~died ~~with~~of ~~severe~~a ~~AIHA~~pulmonary infection (seven weeks after treatment) that was ~~refractory~~acquired toafter ~~standard therapies~~the ~~(Moyo~~absolute neutrophil count had normalized, ~~Smith~~indicating etthat ~~al.~~the infection ~~2002).~~was ~~Nine~~not ~~patients~~acquired ~~were~~during ~~treated~~the atimmune ~~Hahnemann~~ablation ~~University,~~period. ~~Medical~~This ~~College~~patient ofexperienced ~~Pennsylvania~~acute ~~and~~respiratory ~~JHU.~~distress ~~Seven)~~syndrome ~~patients~~associated ~~displayed~~with ~~WAIHA,~~a ~~one~~fungal ~~(1) CAIHA,~~infection and ~~one~~a ~~(1) patient~~decline ~~was~~in ~~mixed~~kidney ~~warm/cold~~function. ~~These~~This ~~patients~~patient had ~~preciously~~ ~~failed~~extensive lung disease at ~~least~~the ~~two~~time ~~standard~~of entry ~~therapies~~into ~~(primary~~the ~~AIHA)~~study. orThis ~~one~~highlights ~~standard~~the ~~therapy~~need ~~(secondary~~for ~~AIHA)~~a robust system of care during High-Dose Pulsed Cytoxan treatment and the requirement for highly selective inclusion criteria, especially in patients with organ involvement and ~~were~~damage ~~steroid~~as ~~dependent~~a result of their autoimmune disease.

~~The studies~~10 reported that Cyrevia was well-tolerated in these patients. All patients were reported to have experienced transfusion independence following treatment. The study reported that six patients underwent a complete response (“CR”), and the remaining three achieved a partial remission (“PR”). At last follow-up (median follow-up duration 15 months, ranging from 4-29 months), only one patient in CR was still receiving doses of corticosteroids (although these were tapering) and one patient in PR was receiving a low dose of corticosteroids. All others discontinued steroids and no patient experienced relapse at a median of 15 months after treatment.

ThreeTable other patients with AIHA have been treated with Cyrevia in one small study (Brodsky 1998) and one case report (Panceri 2002). Of the two patients in the former study, one had Evan’s syndrome (a combination of AIHA and another disease). The AIHA patient experienced a complete recovery for 16 months but then came down with immune thrombocytopenic purpura, another autoimmune disease and subsequently died. The other patient experienced no symptomatic manifestations of disease after treatment and was independent of transfusion for more than ten months. The case report (Panceri 2002) described the striking sudden improvement in a child with severe AIHA, who was unresponsive to four other treatments. However, due to the absence of defined inclusion criteria as used in the Moyo study, these three patients have extremely heterogeneous characteristics and may not be comparable to the larger Moyo study in which patients were more similar. Contents

~~Planned~~The ~~Clinical~~primary ~~Trial~~endpoint was the modified Rodnan skin score (“mRSS”), a typical efficacy endpoint for systemic sclerosis trials. The mRSS measures skin thickness and collagen content of ~~Cyrevia™~~skin. In dcSSc, increasing skin thickness is associated with increased disease activity, and a reduction in ~~AIHA~~mRSS is associated with a more favorable outcome, with a reduction of 25% considered clinically significant. The study reported that in five evaluable patients, mRSS was reduced by 60%, 55%, 41%, 31%, and 0%. The study further reported that four patients out of five responded initially, while one responded but relapsed at 6 months.

AsThe ~~resources~~physician’s ~~permit,~~global weassessment ~~plan~~(PGA) was reported to ~~conduct~~have ~~clinical~~improved ~~trials~~for infour of five patients ~~with~~47%, 69%, a56%, ~~diagnosis~~and of59% ~~severe~~within ~~AIHA.~~first Wemonth ~~expect~~after ~~that~~treatment, ~~these~~and ~~patients~~80% ~~will~~for ~~have~~one ~~had~~of afive ~~failure~~within ofthe atfirst ~~least~~three ~~two~~months. ~~standard~~The ~~treatment~~forced ~~approaches~~ vital capacity (~~e.g.~~“FVC”), ~~prednisone~~a ~~therapy,~~measure ~~splenectomy,~~of ~~intravenous~~lung ~~immunoglobulin~~function, oralso ~~other~~stabilized ~~immunosuppressants~~in four of six patients.), orOne anpatient’s ~~inability~~FVC worsened due to ~~taper~~an ~~prednisone~~infection, ~~dose~~then returned to ~~less~~baseline. ~~than~~Five 10of ~~mg/day~~five patients improved on the Health Assessment Questionnaire Disability Index.

13Planned Clinical Trial of Cyrevia™ in dcSSc

~~Proprietary~~As ~~Rights~~resources permit, we plan to ~~CyreviaTM~~conduct pre-IND meetings with the FDA to discuss clinical trials of Cyrevia in patients who have evidenced moderately severe organ damage and clinical evidence of active disease.

~~Because~~Autoimmune ~~Cyrevia~~Hemolytic ~~represents~~Anemia the repurposing of a drug which is off-patent, we have developed a multi-faceted strategy to seek to maintain and protect our proprietary interests consisting of a combination of patents and non-patent based protection such as exclusive commercial agreements.

WeDisease ~~hold~~Background the exclusive world-wide rights to commercialize High-Dose Pulsed Cytoxan to treat MS and certain other autoimmune diseases through a sublicense (the “Cyrevia Sublicense”) from Revimmune, LLC, which obtained its rights by license from JHU (the “JHU License”). Revimmune, LLC is an affiliate of one of our directors and shareholders. Our license, which is exclusive and worldwide, affords additional protection for our commercialization strategy. Under the Cyrevia Sublicense, we are obligated to pay a royalty of eight percent (8%) of net sales of Cyrevia which is equally split between JHU and Revimmune, LLC until the later of the expiration of the last to expire patent under the JHU License on a country by country basis, or ten years following the first commercial sale of a regulatory approved product regardless of the issuance of any such patents. We believe that our Cyrevia Sublicense creates an important relationship between our company, JHU, and the JHU faculty who pioneered the development of High-Dose Pulsed Cytoxan. JHU has filed patent applications in the U.S. and several foreign countries with claims pertaining to the use of High-Dose Pulsed Cytoxan to treat MS and certain other autoimmune diseases which are covered by our Cyrevia Sublicense. Some of these licensed patent applications are undergoing examination and are subject to pending patent office objections and/or rejections.

~~Additionally,~~We weplan ~~have~~to ~~filed~~study ~~patent~~autoimmune ~~applications~~hemolytic ~~for~~anemia ~~our~~(“AIHA”), ~~REBOOT~~a ~~risk~~disease ~~management~~in which the body’s immune system ~~and~~attacks ~~certain~~its ~~screening~~own ~~protocols~~red ~~that~~blood ~~maximize~~cells (“RBCs”), ~~the~~leading ~~safety~~to ~~and~~their ~~effectiveness~~destruction, or hemolysis. While studies of ~~High-Dose~~prevalence ~~Pulsed~~of ~~Cytoxan~~AIHA ~~treatment regimens~~in the U.S. ~~Further~~are few, we ~~anticipate~~estimate ~~that~~the ~~our~~U.S. ~~computer~~prevalence ~~software~~of ~~program~~AIHA ~~being~~at ~~developed~~approximately to50,000 ~~implement~~cases ~~our~~based ~~REBOOT™~~on epidemiological studies in other countries. The ~~system~~U.S. ~~will~~incidence beof ~~proprietary~~AIHA ~~and~~is ~~protected~~approximately ~~through~~2,400 per ~~trademark~~year. ~~and~~In ~~copyright~~February ~~filings~~2011, we were granted by FDA Orphan Drug designation for Cyrevia™ for the treatment of AIHA.

ToIn ~~further~~affected ~~extend our proprietary rights to Cyrevia~~patients, wea ~~entered~~process ~~into~~of anincreased ~~agreement~~destruction ~~with~~of ~~with~~RBCs ~~Baxter,~~takes ~~which~~place wemediated ~~believe~~by is the ~~only~~formation ~~FDA approved cGMP, manufacturer~~ of ~~injectable~~anti-RBC ~~cyclophosphamide~~autoantibodies in(an autoantibody ~~the~~is ~~U.S.,~~an ~~known~~antibody ~~under~~produced by the ~~brand~~body ~~name,~~in ~~Cytoxan®.~~reaction ~~The Baxter Agreement grants our Company~~ to the ~~exclusive right to use Baxter~~body’s ~~Drug~~own ~~Master~~cells). ~~File~~AIHA ~~for~~can ~~Cytoxan which,~~occur weat ~~believe~~any ~~will~~age ~~facilitate~~and ~~our~~affects ~~planned~~women ~~clinical~~more ~~trials~~often ~~and~~than ~~anticipated~~men. ~~dealings~~About ~~with~~half of the ~~FDA. Additionally~~time, the ~~Baxter~~cause ~~Agreement~~of ~~grants~~AIHA tocannot ~~our~~be ~~Company~~determined ~~the~~(idiopathic ~~exclusive~~AIHA). ~~right~~AIHA tocan ~~purchase~~also ~~Cytoxan~~be ~~from~~caused ~~Baxter~~by ~~for~~or ~~the~~occur ~~treatment~~with ofanother ~~various~~disorder, ~~autoimmune~~such as ~~diseases~~systemic ~~including:~~lupus ~~the~~erythematosus ~~prevention~~(lupus), ofand ~~GVHD~~rarely ~~following~~it ~~bone~~follows ~~marrow~~the ~~transplant;~~use ~~MS;~~of ~~systemic~~certain ~~sclerosis;~~drugs, ~~and~~such ~~AIHA~~as penicillin.

~~Additionally,~~AIHA wefrequently ~~have~~commences ~~been~~as an ~~granted~~acute, ~~Orphan~~sometimes ~~Drug~~life-threatening ~~designation~~disease byoften requiring hospitalization, but is considered a chronic disease. In some people, the ~~FDA~~destruction ~~for~~may stop after a ~~number~~period of ~~autoumminue~~time. ~~diseases~~In ~~providing~~other ~~seven~~people, ~~years~~red blood cell destruction persists and becomes chronic. There are two main types of ~~market~~AIHA: ~~exclusivity~~warm antibody hemolytic anemia (“WAIHA”) and cold antibody hemolytic anemia (“CAIHA”). In the warm antibody type, the autoantibodies attach to and destroy red blood cells at temperatures equal to or in excess of normal body temperature. In the Ucold antibody type, the autoantibodies become most active and attack red blood cells only at temperatures well below normal body temperature.S ~~for~~Rarely, ~~those~~patients ~~diseases~~have both cold- and warm-reactive autoantibodies and are classified as mixed-type AIHA.

~~BIOVAXID®~~AIHA -as ~~Therapeutic~~the ~~Cancer~~cause ~~Vaccine~~of hemolysis is confirmed when blood tests detect increased amounts of certain antibodies, either attached to RBCs (direct antiglobulin or Coombs’ test) or in the liquid portion of the blood (indirect antiglobulin or Coombs’ test). Other tests sometimes help determine the cause of the autoimmune reaction that is destroying RBCs.

~~Our~~If ~~majority-owned~~symptoms ~~subsidiary~~are mild or if destruction of RBCs seems to be slowing on its own, ~~Biovest~~no treatment is ~~developing~~needed. ~~BiovaxID~~If asRBCs destruction is increasing, a ~~personalized~~corticosteroid ~~therapeutic~~such ~~cancer~~as ~~vaccine~~prednisone ~~for~~is usually the first choice for treatment for WAIHA. High doses are used at first, followed by a gradual reduction of ~~non-Hodgkin’s~~the dose over many weeks or months. When WAIHA patients do not ~~lymphoma~~respond ~~(“NHL”),~~to ~~specifically,~~corticosteroids ~~follicular~~or ~~lymphoma~~when ~~(“FL”)~~the corticosteroid causes intolerable side effects, ~~mantle~~surgery ~~cell~~to ~~lymphoma~~remove the spleen (~~“MCL”~~splenectomy) ~~and~~is ~~potentially~~often ~~other~~the Bnext treatment. The spleen is removed because it is one of the places where antibody-~~cell~~coated ~~cancers~~RBCs are destroyed. When destruction of RBCs persists after removal of the spleen or when surgery cannot be done, immunosuppressive drugs may be used.

~~The~~When ~~Human~~RBC ~~Immune~~destruction ~~System~~is severe, blood transfusions are sometimes needed, but they do not treat the cause of the anemia and provide only temporary relief.

~~The~~11 immune system functions as the body’s natural defense mechanism for identifying and killing or eliminating disease-causing pathogens, such as bacteria, viruses, or other foreign microorganisms. However, with regard to cancer, including lymphomas, the immune system’s natural defense mechanism is believed to be largely thwarted by natural immune system mechanisms which seek to protect “self-cells” from attack. In humans, the primary disease fighting function of the immune system is carried out by white blood cells (leukocytes), which mediate two types of immune responses: innate immunity and adaptive immunity. Innate immunity refers to the broad first-line immune defense that recognizes and eliminates certain pathogens prior to the initiation of a more specific adaptive immune response. While the cells of the innate immune system provide a first line of defense, they cannot always eliminate or recognize infectious organisms. In some cases, new infections may not always be recognized or detected by the innate immune system. In these cases, the adaptive immune response has evolved to provide a highly-specific and versatile means of defense which also provides long-lasting protection (immune memory) against subsequent re-infection by the same pathogen. This adaptive immune response facilitates the use of preventative vaccines that protect against viral and bacterial infections such as measles, polio, diphtheria, and tetanus. Biovest believes that BiovaxID creates an adaptive immune response to cancerous B-cells.

14Table of Contents

~~Adaptive~~Unmet ~~immunity~~Medical isNeed mediated by a subset of white blood cells called lymphocytes, which are divided into two types: B-cells and T-cells. In the bloodstream, B-cells and T-cells recognize antigens, which are molecules that are capable of triggering a response in the immune system. Antigens are molecules from bacterial, viral, or fungal origin, foreign (non-self) proteins, and in some cases, tumor-derived proteins that can stimulate an immune response. The human body makes millions of different types of B-cells that circulate in the blood and lymphatic systems and perform immune surveillance. Each B-cell has a unique receptor protein (immunoglobulin) on its surface that binds to one particular antigen. Once a B-cell recognizes its specific antigen and receives additional signals from a T-helper cell, it can proliferate and become activated in order to secrete antibodies (immunoglobulins; Ig) which can neutralize the antigen and target it for destruction. T-cells may also recognize antigens on foreign cells, whereby they can promote the activation of other white blood cells or initiate destruction of the targeted cells directly. A person’s B-cells and T-cells can collectively recognize a wide variety of antigens, but each individual B-cell or T-cell will recognize only one specific antigen. Consequently, in each person’s bloodstream, only a relatively few lymphocytes will recognize the same antigen.

~~Since~~We ~~B-cell~~believe ~~cancers~~that ~~such~~there asis ~~NHL~~a ~~are~~need ~~tumors~~for ~~arising~~additional ~~from~~therapeutic ~~a single~~options ~~malignant~~to ~~transformed~~treat ~~B-cell,~~both ~~the~~warm ~~tumor~~and ~~cells~~cold inAIHA. ~~NHL~~Only ~~maintain~~15-20% onof ~~their~~patients ~~surface~~achieve ~~the~~complete ~~original~~remission ~~malignant~~with ~~B-cell’s~~standard ~~immunoglobulin~~first ~~(collectively~~line ~~referred~~therapy, corticosteroids. Adverse events related to ~~as,~~corticosteroid ~~the~~therapy ~~“tumor~~include ~~idiotype”)~~excessive ~~that~~weight isgain, ~~distinct~~skin ~~from~~flushing, ~~those~~neuropsychiatric ~~found~~disorders, onsleep ~~normal B-cells.~~disturbances, ~~The~~increased ~~idiotype~~risk ~~maintained~~of oncardiovascular ~~the~~events, ~~surface~~cataracts, ofand ~~each~~myopathy. BCo-~~cell~~morbidities ~~lymphoma~~exacerbated ~~serves~~by corticosteroids asinclude ~~the~~diabetes, ~~tumor-specific~~hypertension, ~~antigen~~hyperlipidemia, ~~for~~heart ~~the~~failure, ~~BiovaxID~~glaucoma, ~~cancer~~and ~~vaccine~~peptic ulcer disease.

InUsually ~~many cases~~splenectomy, ~~including~~the surgical inremoval ~~NHL,~~of ~~cancer~~the ~~cells~~spleen, ~~produce~~is ~~molecules~~used ~~known~~ as ~~tumor~~a second-~~associated~~line ~~antigens~~therapy, which ~~may~~elicits ora ~~may~~50% ~~not~~response ~~be present in normal cells but may be over-produced in cancer cells~~rate. ~~B-cells~~Options ~~and~~for ~~T-cells~~patients ~~have~~unresponsive ~~receptors~~or onrefractory ~~their surfaces that enable them~~ to ~~recognize~~corticosteroids ~~the~~and ~~tumor~~splenectomy ~~associated~~are ~~antigens~~limited. ~~While~~In ~~cancer~~WAIHA, ~~cells~~the ~~may~~chance ~~naturally~~of ~~trigger~~spontaneous ~~a B-~~ or Tdrug-~~cell-based immune response during the initial~~induced ~~appearance~~remission ~~of the disease, this response may be only weakly specific~~ or ~~attenuated~~cure inis ~~such~~extremely ~~a way that it does not fully eradicate all tumor cells~~low. ~~Subsequently,~~An ~~tumor~~urgent ~~cells~~need ~~gradually~~exists ~~evolve~~for ~~and escape from this weak immune response and are able to grow into larger tumors. In addition~~new, ~~because~~better ~~cancer~~treatments ~~cells~~of ~~arise from normal tissue cells~~WAIHA, ~~they~~especially ~~are~~for ~~often~~steroid-refractory ~~able to exploit~~ or ~~increase~~unresponsive ~~existing immune tolerance mechanisms to suppress the body’s immune response which would normally destroy them~~patients. In ~~other~~CAIHA ~~cases,~~does ~~chemotherapy~~not orrespond ~~other treatment regimens used~~ to ~~treat~~either ~~the~~steroids ~~cancer~~or ~~may~~splenectomy ~~themselves weaken the immune response~~ and ~~render~~therefore itremains ~~unable~~a ~~to reject and kill tumor cells. Even with an activated immune system; however, the number and size of~~significant ~~tumors~~clinical ~~can often overwhelm the immune system~~challenge.

InCyrevia™ ~~the~~Experience case of cancer and other diseases, immunotherapies are designed to activate a person’s immune system in an attempt to combat the disease. There are two forms of immunotherapy used to treat diseases: passive and active. Passive immunotherapy is exemplified by the intravenous infusion into a patient of antibodies specific to the particular antigen. While passive immunotherapies have shown clinical benefits in some cancers, they require repeated infusions and can cause the destruction of normal cells in addition to cancer cells. An example of passive immunotherapy to treat lymphoma is monoclonal antibodies such as rituximab. An active immunotherapy, on the other hand, seeks to generate a durable adaptive immune response by introducing an antigen into a patient, often in combination with ~~other~~AIHA components that can enhance an immune response to the antigen. BiovaxID is an example of active specific immunotherapy. Although active immunotherapies have been successful in preventing many infectious diseases, their ability to combat cancers of various types has been limited by a variety of factors, including the inability of tumor antigens to elicit an effective immune response, difficulty in identifying suitable target tumor antigens, inability to manufacture tumor antigens in sufficiently pure form, and inability to manufacture sufficient quantities of tumor antigens.

~~Nevertheless,~~Following studies in ~~2010~~other ~~one~~severe ~~active~~autoimmune ~~immunotherapy~~disorders, ~~Provenge®~~ ~~(sipuleucel~~High-T)Dose ~~developed~~Pulsed byCytoxan ~~Dendreon~~was ~~Corporation,~~studied ~~received~~in ~~marketing~~patients ~~approval~~with ~~from~~severe ~~the~~AIHA ~~FDA~~that ~~for~~was ~~the treatment~~refractory ~~asymptomatic~~to orstandard ~~minimally~~therapies ~~symptomatic~~(Moyo, ~~metastatic~~Smith ~~castrate~~et ~~resistant~~al. ~~(hormone refractory~~2002) ~~prostate cancer~~. ~~This~~Nine ~~represents~~patients were ~~the~~treated ~~first~~at ~~case~~Hahnemann ofUniversity, anMedical ~~active~~College ~~immunotherapy~~of toPennsylvania ~~successfully~~and ~~gain marketing approval in the U~~JHU.S. InSeven ~~March~~patients ~~2011,~~displayed ~~a second active immunotherapy~~WAIHA, ~~Yervoy™~~one ~~(ipilimumab)~~CAIHA, ~~developed~~and byone ~~Bristol-Myers~~patient ~~Squibb,~~was ~~received~~mixed ~~marketing~~warm/cold. ~~approval~~These ~~from~~patients ~~the~~had ~~FDA~~preciously ~~approved~~failed ~~for~~at ~~the~~least ~~treatment~~two ofstandard ~~late-stage~~therapies ~~metastatic~~(primary ~~melanoma.~~AIHA) Inor ~~addition to BiovaxID, there are a number of other active~~one ~~immunotherapeutics~~standard ~~for~~therapy ~~cancer~~(secondary inAIHA), ~~various~~and ~~stages~~were ofsteroid ~~clinical trials that have demonstrated promising results~~dependent.

AThe ~~number~~studies ofreported ~~features~~that ofCyrevia ~~the~~was ~~NHLs make~~well-tolerated in these ~~tumors~~patients. ~~particularly~~All patients ~~suitable~~were ~~for~~reported ~~treatment~~to ~~with~~have aexperienced ~~therapeutic~~transfusion ~~cancer~~independence ~~vaccine~~following treatment. The ~~malignant~~study ~~B-cell~~reported ~~lymphocytes~~that ofsix ~~NHL~~patients ~~express~~underwent a ~~unique,~~complete ~~identifiable~~response ~~tumor-specific~~(“CR”), ~~antigen~~and ~~which~~the isremaining ~~not~~three ~~expressed~~achieved bya ~~other~~partial remission (~~healthy~~“PR”). ~~cells~~At last infollow-up ~~the~~(median ~~body.~~follow-up ~~In contrast~~duration 15 months, ~~the~~ranging ~~majority~~from of4-29 ~~human~~months), ~~cancers~~only ~~typically~~one ~~lack~~patient ~~strong~~in ~~ubiquitous~~CR ~~expression~~was still receiving doses of ~~tumor-specific~~corticosteroids ~~antigens~~(although tothese ~~distinguish~~were ~~them~~tapering) ~~from~~and ~~normal~~one ~~cells,~~patient orin ~~they~~PR ~~express~~was receiving a ~~potentially~~low ~~widely-varying~~dose ~~mix~~ of ~~antigens~~corticosteroids. ~~which~~All others ~~can~~discontinued besteroids ~~difficult~~and tono ~~identify~~patient ~~and formulate~~experienced ~~into~~relapse at a ~~successful~~median ~~therapeutic~~of ~~vaccine~~15 months after treatment.

15Three other patients with AIHA have been treated with Cyrevia in one small study (Brodsky 1998) and one case report (Panceri 2002). Of the two patients in the former study, one had Evan’s syndrome (a combination of AIHA and another disease). The AIHA patient experienced a complete recovery for 16 months but then came down with immune thrombocytopenic purpura, another autoimmune disease and subsequently died. The other patient experienced no symptomatic manifestations of disease after treatment and was independent of transfusion for more than ten months. The case report (Panceri 2002) described the striking sudden improvement in a child with severe AIHA, who was unresponsive to four other treatments. However, due to the absence of defined inclusion criteria as used in the Moyo study, these three patients have extremely heterogeneous characteristics and may not be comparable to the larger Moyo study in which patients were more similar.

~~Non-Hodgkin’s~~Planned ~~Lymphoma~~Clinical Trial of Cyrevia™ in AIHA

~~Non-Hodgkin’s~~As ~~lymphoma~~resources ~~(“NHL”)~~permit, iswe aplan ~~heterogeneous group of malignancies of the lymphatic system with differing clinical behaviors and responses~~ to ~~treatment. BiovaxID® has been studied in two distinct forms of NHL, namely, FL and~~conduct ~~MCL.~~clinical ~~NHL~~trials ~~is the fifth most common type of cancer~~ in ~~the~~patients ~~U.S.,~~ with ana ~~estimated~~diagnosis ~~prevalence~~ of ~~454,378~~severe ~~cases~~AIHA. inWe ~~2008~~expect inthat ~~the~~these ~~U.S.~~patients ~~NHL~~will ~~accounts~~have ~~for~~had ~~3.4%~~a failure of ~~all~~at ~~cancer~~least ~~deaths~~two instandard ~~the~~treatment ~~U.S.~~approaches (~~Siegel et al~~e.g., ~~2011:~~prednisone ~~Cancer statistics 2011~~therapy, ~~CA: A Cancer Journal for Clinicians). NHL is one of the few malignancies in which there continues to be a rise in incidence. Since the early 1970’s~~splenectomy, ~~incidence~~intravenous ~~rates for NHL have nearly doubled. Moreover~~immunoglobulin, inor ~~spite of recent advances in the standard~~other ~~of care~~immunosuppressants.), ~~the~~or ~~overall~~an ~~five-year~~inability ~~survival~~to ~~rate~~taper ~~remains~~prednisone atdose ~~approximately 63%. According~~ to ~~the~~less ~~NCI,~~than in10 ~~2009 it is estimated that 65,980 new cases of NHL will be diagnosed and 19,500 Americans will die from the disease, with a comparable number estimated in Europe~~mg/day.

~~NHL~~Proprietary isRights ~~usually classified for clinical purposes as being either “indolent” or “aggressive,” depending on how quickly the cancer cells are likely~~ to ~~grow and spread. The indolent, or slow-growing, form of NHL has a very slow growth rate and may need little or no treatment for months or possibly years. Aggressive, or fast-growing, NHL tends~~ toCyrevia™ ~~grow and spread quickly and cause severe symptoms, and patients with aggressive NHL have shorter OS.~~

~~Follicular~~Because ~~Lymphoma~~Cyrevia represents the repurposing of a drug which is off-patent, we have developed a multi-faceted strategy to seek to maintain and protect our proprietary interests consisting of a combination of patents and non-patent based protection, such as exclusive commercial agreements.

~~Indolent~~We hold ~~(slow~~the ~~growing)~~exclusive ~~and~~worldwide ~~aggressive~~rights ~~NHL~~to ~~each~~commercialize ~~constitute~~High-Dose ~~approximately~~Pulsed ~~half~~Cytoxan ofto ~~all~~treat ~~newly~~MS ~~diagnosed~~and ~~B-cell~~certain ~~NHL,~~other ~~and~~autoimmune ~~roughly~~diseases ~~half~~through ofa sublicense agreement (the ~~indolent~~ ~~B-cell~~“Cyrevia ~~NHL~~Sublicense”) isfrom ~~follicular~~Revimmune, ~~lymphoma~~LLC, which obtained its rights by license from JHU (the “FLJHU License”). ~~Accordingly~~Revimmune, ~~approximately~~LLC ~~22%~~is ofaffiliated ~~new~~with ~~cases~~one of ~~NHL~~our ~~fall~~directors ~~into~~and ~~the~~shareholders. ~~category~~The ofCyrevia ~~disease~~Sublicense ~~known~~and asJHU ~~indolent~~License ~~FL.~~grants ~~The~~us ~~U.S.~~exclusive ~~prevalence~~and ~~(number~~worldwide ofrights ~~cases)~~and, affords additional protection for FLour commercialization isstrategy. ~~estimated~~Under tothe ~~be 100~~Cyrevia Sublicense,~~000 cases~~ inwe ~~2006.~~are ~~Biovest~~obligated ~~has~~to ~~conducted~~pay a ~~Phase~~royalty 2of ~~clinical~~8% ~~trial~~of ~~followed~~net bysales aof ~~Phase~~Cyrevia 3which ~~clinical~~is ~~trial~~equally insplit FLbetween ~~under~~JHU ~~Biovest’s~~and ~~IND.~~Revimmune, FLLLC isuntil athe ~~form~~later of ~~NHL~~the ~~that~~expiration isof ~~derived~~the ~~from~~last to expire patent under the JHU License on a ~~type~~country ofby ~~cell~~country ~~known~~basis, asor ten years following the first commercial sale of a ~~follicle~~regulatory ~~center~~approved ~~cell.~~product ~~Despite~~regardless ~~its~~of ~~slow progression,~~the FLissuance isof ~~almost~~any ~~invariably~~such ~~fatal~~patents. ~~The~~We ~~median~~believe OSthat ~~reported~~our ~~for~~Cyrevia FLSublicense ~~patients~~creates ~~ranges~~an important relationship between 8our Company, JHU, and 10the ~~years,~~JHU ~~although~~faculty ~~these~~who ~~figures~~pioneered ~~may~~the ~~have~~development ~~become~~of ~~slightly~~High-Dose ~~higher~~Pulsed ~~within~~Cytoxan. JHU has filed patent applications in the ~~last~~U.S. ~~decade~~and asseveral aforeign ~~result~~countries ofwith ~~improvements~~claims inpertaining to the ~~standard~~use of ~~care~~High-Dose ~~for~~Pulsed Cytoxan to FLtreat MS and certain other autoimmune diseases which are covered by our Cyrevia Sublicense. Some of these licensed patent applications are undergoing examination and are subject to pending patent office objections and/or rejections.

~~The~~12 current standard of care for treatment of advanced, bulky FL (bulky Stage II, Stage III-IV) as specified by the National Comprehensive Cancer Network (“NCCN”) includes initial treatment of newly-diagnosed patients with rituximab-containing chemotherapy. Rituximab is a monoclonal antibody (an immune protein capable of selectively recognizing and binding to a molecule) which targets a protein primarily found on the surface of both healthy and cancerous B cells, known as CD20. Accordingly, rituximab seeks to bind and destroy all B-cells, including healthy B-cells, as a means of controlling the progression of FL in treated patients.

RituximabTable and other biologics currently approved for lymphoma are characterized as “passive immunotherapies”. Following administration, rituximab exerts its effects primarily through an unselective and near total destruction of a patient’s B-cells, including malignant as well as healthy B-cells. Rituximab and other passive immunotherapies are often administered in sequential, repeated doses to achieve their effect, and following cessation of administration are over time eliminated from the patient’s circulation by normal bodily functions. Rituximab is characterized as a targeted therapy since it targets CD20, which is present on both healthy and tumor cells. Rituximab is manufactured in bulk and is not considered to be a personalized therapy. Contents

~~By comparison~~Additionally, ~~BiovaxID®~~we ishave ~~characterized~~filed aspatent anapplications ~~“active~~for ~~immunotherapy”.~~our ~~Active~~REBOOTSM ~~immunotherapies~~risk ~~attempt~~management ~~to stimulate the patient’s immune~~ system ~~to respond to a disease. “Specific active immunotherapies” such as BiovaxID specifically, seek to induce cellular~~ and~~/or~~ ~~humoral~~certain ~~immune~~screening ~~responses~~protocols ~~focused~~that ~~on specific antigens present on a diseased cell (such as a tumor cell). As a specific, active immunotherapy,~~maximize ~~BiovaxID~~the ~~targets~~safety ~~only~~and ~~the~~effectiveness ~~cancerous~~of BHigh-~~cells~~Dose ~~while~~Pulsed ~~sparing~~Cytoxan ~~healthy~~treatment ~~B-cells~~regimens. ~~Accordingly~~Further, ~~BiovaxID~~we isanticipate ~~highly~~that ~~targeted.~~our ~~BiovaxID~~computer issoftware ~~manufactured~~program ~~specifically~~being ~~and~~developed ~~entirely for each patient and is considered~~ to beimplement aour ~~highly~~REBOOT ~~“personalized therapy”.~~system ~~If approved, BiovaxID~~ will ~~represent~~be ~~the~~proprietary ~~only~~and ~~specific~~protected ~~active~~through ~~immunotherapeutic~~trademark ~~approved for the treatment of FL~~ and ~~therefore will represent a new class of drugs that provide a new therapeutic option for patients with lymphoma.~~copyright filings.

16To further extend our proprietary rights to Cyrevia, we entered into the Baxter Agreement, which we believe is the only FDA approved cGMP, manufacturer of injectable cyclophosphamide in the U.S., known under the brand name, Cytoxan®. The Baxter Agreement grants our Company the exclusive right to use Baxter’s Drug Master File for Cytoxan which, we believe will facilitate our planned clinical trials and anticipated dealings with the FDA. Additionally, the Baxter Agreement grants to us the exclusive right to purchase Cytoxan from Baxter for the treatment of various autoimmune diseases including: the prevention of GVHD following bone marrow transplant, MS, systemic sclerosis and AIHA.

~~In February 2011~~Additionally, ~~the~~we ~~NCCN~~have ~~issued~~been ~~treatment~~granted ~~guidelines~~Orphan ~~recognizing~~Drug ~~“consolidation therapy”~~designation ~~as a defined treatment category for FL in first remission. Current consolidation therapy options differ from induction therapies in that they primarily seek to prolong first remission duration~~ by ~~consolidating~~ the ~~effects~~FDA ~~of induction~~for ~~therapy,~~a ~~which~~number ~~primarily~~of ~~seeks~~autoumminue ~~to reduce active~~diseases, ~~bulky~~as ~~tumor~~previously ~~masses.~~discussed ~~The~~providing ~~following~~seven ~~anti-CD20~~years ~~monoclonal~~of ~~antibody~~market ~~drug~~exclusivity ~~products~~in ~~are currently approved consolidation treatment options for~~ the ~~treatment of FL: Rituxan®; Bexxar®; and Zavalin® (See Figure 1)~~U. ~~All~~S offor ~~these~~those ~~treatment options are passive immunotherapies that result in profound B-cell depletion~~diseases.

~~Figure~~BIOVAXID™ 1:– ~~BiovaxID®~~Personalized ~~targets~~Therapeutic ~~tumor-specific~~Cancer ~~idiotype,~~Vaccine a protein unique to the tumor and not found on healthy (non-malignant) B-cells. In contrast, current monoclonal antibody-based therapies for NHL, including rituximab (Rituxan®), tositumomab (Bexxar®), and ibritumomab tiuxetan (Zevalin®) target CD20, a cell-surface protein expressed by both tumor and healthy B-cells. As such, through its unique mode of action, BiovaxID represents a new therapeutic approach to treating FL.

~~Current~~Our ~~U.S.~~majority-owned ~~Approved~~subsidiary, ~~Consolidation~~Biovest ~~Therapies~~is ~~for~~developing ~~NHL~~BiovaxID, ~~and~~as ~~Urgent~~an ~~Need~~active immunotherapy personalized therapeutic cancer vaccine for ~~Alternative~~the ~~Treatment~~treatment ~~Options~~of non-Hodgkin’s lymphoma (“NHL”), a B-cell cancer, specifically, follicular lymphoma, mantle cell lymphoma and potentially other B-cell cancers.

~~Rituxan®~~The ~~(Rituximab):~~Human ~~Rituximab~~Immune ~~maintenance consists of administration of the anti-CD20 antibody rituximab administered at a dose of 375 mg/m2 every 8 weeks for 24 months~~System (12 injections) administered by IV infusion every 8 weeks starting 8 weeks ± 7 days afer the last induction treatment (whether immuno-chemotherapy or rituximab, whichever is later). Administration of rituximab (and other anti-CD20 agent) maintenance extends the profound immunosuppression achieved by induction therapy, as it targets the pan-B-cell CD20 protein. This continued dosing of the induction agent induces profound B-cell depletion for the two-year duration of the regimen.

~~Zevalin®~~The ~~(ibritumomab~~immune ~~tiuxetan):~~system ~~Zevalin~~functions isas anthe ~~immunoconjugate~~body’s ~~resulting~~natural ~~from~~defense ~~covalently-bonded~~mechanism ~~anti~~for identifying and killing or eliminating disease-~~CD20~~causing pathogens, ~~antibody~~such ~~ibritumomab~~as ~~and~~bacteria, viruses, or other foreign microorganisms. However, with regard to cancer, including lymphomas, the ~~linker-chelator~~immune ~~tiuxetan~~system’s natural defense mechanism is believed to be largely thwarted by natural immune system mechanisms [Nwhich seek to protect “self-~~[2-bi(carboxymethyl)amino]-3-(p-isothiocyanatophenyl)-propyl]-[N-[2-bis(carboxymethylamino]-2-(methyl)-ethyl]glycine~~cells” from attack. ~~This~~In ~~linker-chelator~~humans, ~~provides~~the aprimary ~~high~~disease ~~affinity~~fighting function of the immune system is carried out by white blood cells (leukocytes), ~~conformationally~~which ~~restricted~~mediate ~~chelation~~two ~~site~~types ~~for~~of ~~Indium-111~~immune orresponses: ~~Yttrium-90.~~innate immunity and ~~Administration~~adaptive ~~follows~~immunity. ~~induction~~Innate ~~rituximab~~immunity ~~and~~refers ~~requires~~to ~~preliminary~~the ~~dosimetry~~broad first-line immune defense that recognizes and ~~imaging~~eliminates ~~administration~~certain pathogens prior to the initiation of ~~In-111~~a ~~(Day~~more 1)specific ~~followed~~adaptive byimmune ~~administration~~response. While the cells of ~~Y-90~~the ~~Zevalin~~innate onimmune ~~Day~~system provide 7a first line of defense, 8they cannot always eliminate or recognize infectious organisms. In some cases, new infections may not always be recognized or 9detected by the innate immune system. ~~The~~In ~~maximum~~these ~~allowable~~cases, ~~dose~~the adaptive immune response has evolved to provide a highly-specific and versatile means of Ydefense which also provides long-90lasting ~~Zevalin~~protection is(immune 32memory) against subsequent re-infection by the same pathogen.0 ~~mCi~~This adaptive immune response facilitates the use of preventative ~~(1184) MBq~~vaccines ~~and~~that ~~physicians~~protect against viral and ~~patients~~bacterial ~~receiving~~infections ~~the~~such ~~agent~~as ~~must~~measles, ~~exercise~~polio, ~~radiation~~diphtheria, ~~exposure~~and ~~precautions~~tetanus. ~~upon~~Biovest ~~administering~~believes orthat ~~handling~~BiovaxID ~~the~~creates ~~agent~~an adaptive immune response to cancerous B-cells.

~~BEXXAR®~~Adaptive ~~therapeutic~~immunity ~~regimen~~is ~~(Tositumomab~~mediated ~~and~~by ~~Iodine~~a Isubset ~~131 Tositumomab):~~of ~~BEXXAR~~white isblood ancells ~~anti-CD20~~called lymphocytes, ~~anti~~which are divided into two types: B-~~neoplastic~~cells ~~radioimmunotherapeutic~~and ~~monoclonal~~T-cells. ~~antibody~~In the bloodstream, B-~~based~~cells ~~regimen~~and ~~composed~~T-cells recognize antigens, which are molecules that are capable of triggering a response in the ~~monoclonal~~immune ~~antibody~~system. Antigens are molecules from bacterial, ~~Tositumomab~~viral, ~~and~~or ~~the~~fungal ~~radiolabeled~~origin, ~~monoclonal~~foreign ~~antibody~~(non-self) proteins, ~~Iodine~~and Iin ~~131Tositumomab~~some cases, tumor-derived proteins that can stimulate an immune response. AsThe ~~with~~human ~~Zevalin, the~~body ~~BEXXAR~~makes ~~therapeutic~~millions ~~regimen~~of isdifferent ~~administered~~types inof ~~two~~B-cells ~~discrete~~that ~~steps:~~circulate in the ~~dosimetric~~blood and ~~therapeutic~~lymphatic ~~steps~~systems and perform immune surveillance. Each ~~step~~B-cell ~~consists~~has of a ~~sequential~~unique ~~infusion~~receptor ofprotein (immunoglobulin) ~~Tositumomab~~on ~~followed~~its bysurface ~~Iodine~~that Ibinds ~~131~~to ~~Tositumomab~~one particular antigen. ~~The~~Once ~~therapeutic~~a ~~step~~B-cell isrecognizes ~~administered~~its 7specific antigen and receives additional signals from a T-14helper cell, it can proliferate and become activated in order to secrete antibodies ~~days~~(immunoglobulins; ~~afer~~Ig) which can neutralize the ~~dosimetric~~antigen ~~step~~and target it for destruction. AsT-cells ~~with~~may ~~ibritumomab~~also ~~tiuxetan~~recognize antigens on foreign cells, ~~physicians~~whereby ~~and~~they ~~patients~~can ~~receiving~~promote ~~this~~the ~~agent~~activation ~~must~~of ~~also~~other ~~exercise~~white ~~stringent~~blood ~~radiation~~cells ~~exposure~~or ~~precautions~~initiate ~~prior~~destruction toof the targeted cells directly. A person’s B-cells and ~~following~~T-cells ~~administration~~can collectively recognize a wide variety of antigens, but each individual B-cell or T-cell will recognize only one specific antigen. Consequently, in each person’s bloodstream, only a relatively few lymphocytes will recognize the same antigen.

17Since B-cell cancers such as NHL are tumors arising from a single malignant transformed B-cell, the tumor cells in NHL maintain on their surface the original malignant B-cell’s immunoglobulin (collectively referred to as, the “tumor idiotype”) that is distinct from those found on normal B-cells. The tumor idiotype maintained on the surface of each B-cell lymphoma serves as the tumor-specific antigen for the BiovaxID cancer vaccine.

~~Urgent~~13 Need for New Consolidation Treatment Option for NHL: BiovaxID® has a unique mechanism of action when compared to all other agents approved for FL maintenance therapy. BiovaxID vaccination represents a non-immunosuppressive alternative to rituximab maintenance as a consolidation therapy for FL and MCL. Thus, BiovaxID represents a potential novel option for consolidation therapy that has demonstrated to be safe and effective, and unlikely to interfere with future therapies while potentially increasing the utility of other therapies.

MantleTable Cell Lymphomaof Contents

~~Mantle~~In ~~cell~~many ~~lymphoma~~cases, ~~(“MCL”)~~including isin ~~a rare~~NHL, ~~aggressive~~cancer ~~subtype~~cells ofproduce ~~NHL~~molecules ~~characterized~~known byas ~~short~~tumor-associated ~~remissions~~antigens, ~~rapid progressions~~which ~~and~~may ~~successive~~or ~~relapses,~~may ~~reflecting~~not ~~incurability~~be present in normal cells but may be over-produced in cancer cells. ~~The~~T-cells ~~median~~and OSB-cells ~~for~~have ~~MCL~~receptors ~~has~~on ~~been~~their ~~cited~~surfaces asthat 3enable them to 5recognize ~~years~~the tumor associated antigens. ~~MCL~~While ~~represents~~cancer ~~approximately~~cells 6%may naturally trigger a B- or T-cell-based immune response during the initial appearance of the disease, this response may be only weakly specific or attenuated in such a way that it does not fully eradicate all ~~NHL~~tumor ~~cases~~cells. Subsequently, tumor cells gradually evolve and ~~worldwide~~escape from ~~there~~this weak immune response and are ~~approximately~~able ~~7,800~~to ~~new~~grow ~~cases~~into ~~each~~larger ~~year~~tumors. ofIn ~~which~~addition, ~~approximately~~because ~~one~~cancer ~~half~~ cells arise from normal tissue cells, they are inoften able to exploit or increase existing immune tolerance mechanisms to suppress the Ubody’s immune response which would normally destroy them.S. ~~(see~~In ~~“Current~~other cases, chemotherapy or other treatment ~~approaches~~regimens ~~for~~used ~~mantle-cell~~to ~~lymphoma”.~~treat Jthe ~~Clin~~cancer ~~Oncol.~~may ~~Sep~~themselves 10weaken ~~2005~~the immune response and ~~“New~~render ~~approach~~it unable to ~~classifying~~reject ~~non-Hodgkin’s~~and ~~lymphomas:~~kill ~~clinical~~tumor ~~features~~cells. ofEven with an activated immune system; however, the ~~major~~number ~~histologic~~and ~~subtypes.” J~~size ~~Clin~~of ~~Oncol.~~tumors ~~Aug~~can ~~1998)~~often overwhelm the immune system.

~~The~~In ~~majority~~the case of ~~MCL~~cancer ~~patients~~and ~~have~~other diseases, ~~disseminated~~immunotherapies ~~disease~~are ~~and~~designed ~~bone~~to ~~marrow~~activate ~~involvement~~a ~~at diagnosis. Patients~~person’s ~~clinical~~immune ~~outcomes~~system ~~from~~in ~~currently~~an ~~available~~attempt ~~therapies~~to ~~are~~combat ~~poor~~the disease. ~~Although~~There ~~many~~are ~~therapeutic~~two ~~regimens~~forms ~~are~~of ~~capable~~immunotherapy ofused ~~rendering~~to ~~high~~treat ~~initial~~diseases: ~~response~~passive ~~rates,~~and ~~these~~active. ~~responses~~Passive ~~are~~immunotherapy is exemplified by the intravenous infusion into a patient of ~~short~~antibodies ~~duration~~specific (ito the particular antigen.e. While passive immunotherapies have shown clinical benefits in some cancers, ~~about~~they 20require ~~months)~~repeated infusions and can cause the ~~relative~~destruction of normal cells in ~~survival~~addition ~~rates~~to cancer cells. An example of ~~MCL~~passive ~~patients~~immunotherapy ~~are~~to ~~among~~treat lymphoma is monoclonal antibodies such as rituximab. An active immunotherapy, on the ~~lowest~~other ~~compared~~hand, seeks to generate a durable adaptive immune response by introducing an antigen into a patient, often in combination with other ~~types~~components ofthat ~~NHL.~~can ~~The~~enhance ~~prognostic~~an ~~after~~immune response to the ~~first~~antigen. ~~relapse~~BiovaxID is ~~very~~an ~~poor~~example of active specific immunotherapy. Although active immunotherapies have been successful in preventing many infectious diseases, ~~with~~their anability ~~expected~~to ~~median~~combat OScancers of ~~about~~various ~~1-2~~types ~~years.~~has Nobeen ~~currently~~limited ~~available~~by ~~therapeutic~~a ~~regimens~~variety ~~are~~of ~~curative.~~factors, including the inability of tumor antigens to elicit an effective immune response, difficulty in identifying suitable target tumor antigens, inability to manufacture tumor antigens in sufficiently pure form, and inability to manufacture sufficient quantities of tumor antigens.

~~While~~Nevertheless, ~~several~~in ~~therapeutic~~2010 ~~regimens~~one ~~are~~active ~~available~~immunotherapy, toProvenge® ~~treat~~(sipuleucel-T) ~~MCL~~developed ~~patients,~~by ~~there~~Dendreon ~~currently~~Corporation, ~~exists~~received nomarketing ~~consensus~~approval ~~standard~~from ofthe ~~care~~FDA for the treatment of asymptomatic or minimally symptomatic metastatic castrate resistant (hormone refractory) prostate cancer. This represents the first~~-line~~ ~~relapsed~~case ~~MCL~~of an active immunotherapy to successfully gain marketing approval in the U.S. AsIn ~~such~~March 2011, ~~MCL~~a ~~remains~~second ~~incurable~~active ~~and~~immunotherapy, itYervoy® (ipilimumab), isdeveloped ~~generally~~by ~~considered~~Bristol-Myers ~~that~~Squibb ~~additional~~received marketing approval from the FDA, for the treatment ~~options~~of late-stage metastatic melanoma. In addition to BiovaxID, there are ~~required~~a ~~given~~number ~~this~~of ~~significant~~other ~~unmet~~active ~~medical~~immunotherapeutics ~~need~~for cancer in various stages of clinical trials that have demonstrated promising results.

~~Currently~~A ~~upon~~number ~~first~~of ~~diagnosis,~~features ~~MCL~~of ~~patients~~the ~~are~~NHLs ~~often~~make ~~evaluated~~these ~~for~~tumors ~~eligibility~~particularly suitable for ~~autologous~~treatment ~~stem~~with ~~cell~~a ~~transplantation~~therapeutic ~~(autoSCT)~~cancer vaccine. ~~Stem~~The malignant B-cell ~~transplantation,~~lymphocytes ~~an aggressive treatment protocol consisting~~ of ~~high-dose~~NHL ~~chemotherapy,~~express ~~immunotherapy~~a ~~and full-body radiation~~unique, ~~aims~~identifiable ~~to treat the patient’s~~ tumor ~~and purge the bone marrow of lymphoma cells. MCL patients who are eligible for autoSCT receive either R~~-~~CHOP~~specific ~~(rituximab,~~antigen ~~cyclophophamide, doxorubicin,~~which ~~vincristine,~~is ~~prednisone)~~not ~~followed~~expressed by ~~autoSCT~~other ~~or R-HyperCVAD~~ (~~rituximab, cyclophosphamide, vincristine, doxorubicin, and dexamethasone alternating with rituximab plus high-dose methotrexate and cytarabine~~healthy) ~~followed~~cells byin ~~observation~~the body. ~~Although~~ ~~these~~In ~~therapeutic approaches do yield high response rates~~contrast, ~~they~~the ~~are~~majority ~~associated with high rates~~ of ~~adverse~~human ~~events and treatment discontinuation, high risk of myelodysplastic syndrome, and high mortality rates. Consequently, the considerable~~cancers ~~toxicity~~typically ~~associated~~lack ~~with~~strong ~~these~~ubiquitous ~~regimens~~expression ~~largely limits these options primarily to a select subset~~ of ~~the~~tumor-specific ~~MCL~~antigens ~~patients who are younger and better fit~~ to ~~tolerate~~distinguish ~~these~~them ~~high-intensity~~from ~~treatments.~~normal ~~However~~cells, ~~even~~or ~~this~~they ~~subset~~express ~~ultimately~~a ~~gains~~potentially ~~only~~widely-varying ~~modest benefits~~mix ~~from existing treatment options. Moreover, the use~~ of ~~these~~antigens ~~more~~which ~~aggressive~~can ~~regimens~~be ~~appears~~difficult ~~not~~ to ~~result~~identify inand ~~superior~~formulate OSinto asa ~~compared~~successful ~~to standard therapies. Given that the median age for newly diagnosed MCL patients is 60 years, less aggressive~~ therapeutic ~~approaches are needed~~ vaccine.

~~Development~~Non-Hodgkin’s ~~Status~~Lymphoma ~~of BiovaxID®~~

~~Introduction~~Non-Hodgkin’s lymphoma (“NHL”) is a heterogeneous group of malignancies of the lymphatic system with differing clinical behaviors and responses to treatment. BiovaxID™ has been studied in two distinct forms of NHL, namely, FL and MCL. NHL was the seventh most common type of cancer in the U.S. in 2011 (Lymphoma and Leukemia Society- Facts 2012), with an estimated prevalence of 484,336 cases in 2011 in the U.S (Surveillance, Epidemiology, and End Results- SEER Stat Fact Sheets: Non-Hodgkin’s Lymphoma). NHL accounts for 3% of all cancer deaths in the U.S (American Cancer Society- Facts and Figures 2012). NHL is one of the few malignancies in which there continues to be a rise in incidence. Since the early 1970’s, incidence rates for NHL have nearly doubled. Moreover, in spite of recent advances in the standard of care, the overall five-year survival rate remains at approximately 63%. In 2012, it is estimated that 70,130 new cases of NHL will be diagnosed and 18,940 Americans will die from the disease (American Cancer Society- Facts and Figures 2012), with a comparable number estimated in Europe.

~~Preliminary studies demonstrated that treatment of patients with~~ NHL ~~with~~is anusually ~~active~~classified ~~immunotherapy~~for ~~stimulates~~clinical apurposes ~~patient’s~~as ~~immune~~being ~~system~~either to“indolent” ~~generate~~or ~~clinically~~“aggressive,” ~~significant~~depending ~~immune~~on ~~responses.~~how ~~These~~quickly ~~studies provided~~ the ~~rationale~~cancer ~~for large-scale trials of active~~cells ~~specific~~are ~~immunotherapy~~likely ofto ~~this~~grow ~~disease. These studies have been published in The New England Journal of Medicine (October 1992), Blood (May 1997),~~ and ~~Nature Medicine (October 1999)~~spread. InThe ~~the treatment of cancer~~indolent, ~~residual tumor cells remaining in the patient after completion of surgery~~ or ~~anti~~slow-~~tumor~~growing, ~~therapy~~form ~~are often the cause~~ of ~~tumor~~NHL ~~relapse.~~has ~~These~~a ~~residual~~very ~~tumor~~slow ~~cells~~growth ~~cannot~~rate ~~always~~and bemay ~~detected~~need bylittle ~~standard~~or ~~imaging~~no ~~techniques~~treatment ~~but~~for ~~their~~months ~~destruction~~or ~~may~~possibly ~~be feasible by active immunotherapy~~years. The ~~use~~aggressive, ofor ~~such~~fast-growing, ~~vaccines~~form ~~differs from traditional cancer treatment in that the ultimate mechanism~~ of ~~action~~NHL ~~against~~tends ~~the~~to ~~tumor~~grow isand ~~indirect:~~spread ~~the~~quickly ~~anti-tumor~~and cause ~~immunity~~severe ~~induced by vaccination~~symptoms, ~~rather~~and ~~than~~patients ~~the~~with ~~vaccine~~aggressive ~~itself,~~NHL ~~is ultimately~~have ~~responsible~~shorter ~~for~~overall ~~treatment~~survival ~~benefit~~(“OS”).

In14 1994, the NCI filed for initiation of an IND for the purpose of conducting clinical trial(s) investigating the use of BiovaxID in NHL. Under this IND, the NCI began in 1994 a Phase 2 clinical trial in FL; in 1999, the Phase 3 clinical trial in FL; and in 2000 a Phase 2 clinical trial in MCL. The NCI selected Biovest to produce the vaccine for the initial Phase 2 clinical trial in FL. In 2001, Biovest entered into a formal CRADA with the NCI which formalized Biovest’s collaboration with the NCI. The IND filed by the NCI was formally transferred to Biovest in April 2004, which made Biovest the exclusive sponsor of the IND with full rights to complete the NCI-initiated Phase 3 clinical trial in FL and the NCI-initiated Phase 2 clinical trial in MCL, to communicate and negotiate with the FDA relating to marketing approval for BiovaxID and to conduct other clinical studies in NHL under the IND.

18Table of Contents

~~BiovaxID®~~Follicular ~~Clinical~~Lymphoma ~~Trials~~

Indolent (slow growing) and aggressive (fast growing) NHL each constitute approximately half of all newly diagnosed B-cell NHL, and roughly half of the indolent B-cell NHL is follicular lymphoma (“FL”). Accordingly, approximately 22% of new cases of NHL fall into the category of disease known as indolent FL, which translates in about 106,550 cases in 2011 in the U.S. (Surveillance, Epidemiology, and End Results- SEER Stat Fact Sheets: Non-Hodgkin’s Lymphoma). We have conducted a Phase 2 ~~Clinical~~clinical ~~Trial~~trial followed by a Phase 3 clinical trial in FL under our IND. FL is a form of ~~BiovaxID®~~NHL that is derived from a type of cell known as a follicle center cell. Despite its slow progression, FL is almost invariably fatal. The median OS reported for ~~Treatment~~FL patients ranges between 8 and 10 years, although these figures may have become slightly higher within the last decade as a result of improvements in the standard of care for FL.

InThe ~~1994,~~current ~~the~~standard ~~Phase~~of 2care ~~clinical~~for ~~trial (NCT00878488)~~treatment ~~was commenced by the NCI to evaluate the ability~~ of ~~BiovaxID~~advanced, tobulky ~~eradicate residual lymphoma cells in 20 patients with~~ FL ~~who were in chemotherapy-induced first clinical complete remission~~ (~~“CR”).~~bulky ~~All~~Stage 11II, ~~patients~~Stage ~~with a detectable lymphoma gene sequence (translocation~~III-IV) inas ~~their~~specified ~~primary~~by ~~tumors had cells from~~ the ~~malignant~~National Comprehensive ~~clone~~Cancer ~~detectable~~Network ~~in their blood by DNA polymerase chain reaction~~ (“~~PCR~~NCCN”) ~~analysis~~includes ~~both~~initial attreatment ~~diagnosis~~of ~~and~~newly-diagnosed ~~after~~patients ~~chemotherapy,~~with ~~despite being~~rituximab-containing ~~in CR~~chemotherapy. InRituximab ~~this~~is ~~clinical trial, molecular remission was defined as patients lacking any detectable residual cancer cells bearing the translocation as determined by~~ a ~~very~~monoclonal ~~sensitive~~antibody ~~PCR~~(an ~~technique.~~immune ~~After~~protein ~~vaccination,~~capable 8 of 11selectively ~~patients~~recognizing ~~converted~~and binding to a ~~lacking~~molecule) ~~cells~~which intargets ~~their~~a ~~blood~~protein ~~from~~primarily ~~the malignant lymphoma clone detectable by PCR. Anti-tumor T-cell responses were~~ found inon the ~~vast~~surface ~~majority~~ of ~~the~~both ~~patients~~healthy ~~(19~~and ofcancerous ~~20 patients), whereas anti~~B-~~tumor antibodies were detected~~cells, ~~but~~known ~~apparently~~as ~~were not required for molecular remission~~CD20. ~~Vaccination~~Accordingly, ~~was~~rituximab ~~thus~~seeks ~~associated~~to ~~with~~bind ~~clearance~~and ofdestroy ~~residual~~all ~~tumor~~ B-cells, ~~from~~including ~~the~~healthy ~~blood and long~~B-~~term disease-free survival. The demonstration of molecular remissions and uniform~~cells, ~~specific T-cell responses against lymphoma tumor targets,~~ as ~~well~~a asmeans ~~the addition~~ of ~~granulocyte–monocyte~~controlling ~~colony-stimulating factor (“GM-CSF”) to~~ the ~~vaccine formulation provided the rationale for the initiation of a larger Phase 3 clinical trial at the NCI in 2000.~~progression ~~These results were published in Nature Medicine (October 1999). The latest follow-up, after a median~~ of ~~9.17~~FL ~~years, 45% of these patients are still~~ in ~~continuous~~treated ~~first CR, the median disease free survival (“DFS”) for the cohort is 96~~patients.5 ~~months, and OS is 95% (Santos et al., ASH 2005)~~

~~Phase~~Rituximab 2and ~~Clinical~~other ~~Trial~~biologics ofcurrently ~~BiovaxID®~~approved for ~~Treatment~~lymphoma are characterized as “passive immunotherapies”. Following administration, rituximab exerts its effects primarily through an unselective and near total destruction of ~~MCL~~a patient’s B-cells, including malignant as well as healthy B-cells. Rituximab and other passive immunotherapies are often administered in sequential, repeated doses to achieve their effect, and following cessation of administration are over time eliminated from the patient’s circulation by normal bodily functions. Rituximab is characterized as a targeted therapy since it targets CD20, which is present on both healthy and tumor cells. Rituximab is manufactured in bulk and is not considered to be a personalized therapy.

InBy ~~2000~~comparison, ~~the NCI initiated a Phase 2 open-label clinical trial (NCT00020215) of~~ BiovaxID™ ~~for~~is ~~the~~characterized ~~treatment~~as ofan ~~MCL~~“active immunotherapy”. ~~This~~Active ~~Phase~~immunotherapies 2attempt ~~clinical~~to ~~trial~~stimulate ~~was based upon~~ the ~~NCI~~patient’s immune ~~Phase~~system 2to ~~clinical~~respond ~~trial~~to ina FLdisease. ~~The~~ ~~primary~~“Specific ~~objective~~active ofimmunotherapies” ~~this~~such ~~Phase~~as 2BiovaxID, ~~clinical~~specifically ~~trial~~seek ~~was~~ to ~~study~~induce ~~BiovaxID~~cellular inand/or ~~treatment-naïve~~humoral ~~patients~~immune ~~with~~responses ~~MCL~~focused ~~and~~on tospecific ~~determine~~antigens ~~the~~present ~~safety~~on ~~and~~a ~~efficacy~~diseased ofcell ~~BiovaxID~~(such ~~following~~as a ~~rituximab-based~~tumor ~~immunotherapy~~cell). As ~~Twenty-six~~a ~~patients with untreated~~specific, ~~mostly~~ ~~(92%) stage~~active ~~IV MCL~~immunotherapy, ~~were~~BiovaxID ~~enrolled.~~targets ~~All~~only ~~patients~~the ~~received~~cancerous ~~six cycles of EPOCH~~B-Rcells ~~(which~~while issparing anhealthy ~~chemo~~B-~~immunotherapy~~cells. ~~consisting~~Accordingly, ofBiovaxID ~~etoposide,~~is ~~prednisone,~~highly ~~vincristine,~~targeted. ~~cyclophosphamide,~~BiovaxID ~~doxorubicin,~~is ~~rituximab);~~manufactured ~~92%~~specifically ofand ~~the~~entirely ~~patients~~for ~~achieved~~each CR patient and 8%is ~~achieved~~considered ~~partial~~to ~~response~~be (a highly “PRpersonalized therapy”). ~~All~~If ~~but~~approved, 3BiovaxID ~~patients~~will ~~(i.e.,~~represent ~~due~~the toonly ~~disease~~specific ~~progression~~active orimmunotherapeutic ~~inability~~approved tofor ~~manufacture~~ the ~~vaccine)~~treatment ~~received~~of ~~BiovaxID~~FL; ~~together~~and ~~with KLH on day 1~~therefore, ~~along~~will ~~with~~represent ~~GM-CSF~~a ~~(100 µg/m2/day) on~~new ~~days 1-4~~class atof 1,drugs 2,that 3,provides 4,a ~~and~~new ~~six~~therapeutic ~~months~~option ~~starting~~for patients atwith ~~least 3 months post-chemotherapy~~lymphoma.

~~The~~In ~~results~~February of2011, ~~NCI’s~~the ~~MCL~~NCCN ~~Phase~~issued 2treatment ~~clinical~~guidelines ~~trial~~recognizing ~~were reported~~“consolidation intherapy” ~~Nature~~as ~~Medicine~~a ~~(August~~defined treatment ~~2005).~~category Asfor ~~reported~~FL in ~~Nature~~first ~~Medicine,~~remission. ~~after~~Current aconsolidation ~~median~~therapy ~~follow-up~~options ofdiffer 46from ~~months,~~induction ~~the~~therapies OSin ~~was~~that ~~89%,~~they ~~the~~primarily ~~median~~seek ~~event-free~~to ~~survival~~prolong ~~(“EFS”) was 22 months, and five patients remained in continuous~~ first ~~CR.~~remission ~~Antibody~~duration ~~responses~~by toconsolidating ~~immunization~~the ~~were~~effects ~~detected in 30%~~ of ~~the~~induction ~~patients~~therapy, ~~following~~which aprimarily seeks ~~delayed~~to ~~pattern~~reduce ~~(i.e.~~active, ~~detected~~bulky ~~mostly~~tumor ~~after~~masses. ~~the~~The ~~4-5th~~following ~~vaccination) which paralleled the peripheral blood B~~anti-~~cell~~CD20 ~~recovery.~~monoclonal ~~Most~~antibody ~~importantly,~~drug ~~specific~~products ~~CD4+ and~~are ~~CD8+~~currently ~~T-cell~~approved ~~responses~~consolidation ~~were~~treatment ~~detected~~options infor ~~87%~~the treatment of ~~patients~~FL: ~~post-vaccine,~~Rituxan® and inZevalin® 7(See ofFigure 91). ~~patients~~All ~~tested~~of these treatment ~~responses~~options ~~were~~are ~~detected~~passive ~~after~~immunotherapies ~~the~~that ~~3rd~~result ~~vaccination~~in ~~when~~profound ~~peripheral~~ B-~~cells~~cell ~~were by and large undetectable~~depletion. ~~The~~Following ~~detected~~the ~~cytokine~~results ~~release response~~of ~~included~~the ~~GM-CSF,~~Eastern ~~INF-g,~~Cooperative ~~and~~Oncology ~~TNF-a~~Group ~~(type~~E4402 ~~I). In this study~~protocol, ~~BiovaxID~~also ~~induced~~called ~~both~~RESORT ~~humoral~~(Rituximab ~~and~~Extended ~~cellular~~Schedule ~~immune~~or ~~responses following almost complete depletion of B~~Re-~~cells~~treatment ~~following~~Trial), ~~rituximab-containing~~reported at ~~chemotherapy.~~the ~~The~~2011 ~~adverse~~Annual ~~events~~Meeting ~~observed in~~of ~~this~~the ~~trial~~American ~~are~~Society ~~considered~~of byHematology, usthe toNCCN berevised ~~minimal~~its ~~and~~clinical ~~were~~practice ~~limited~~guidelines ~~mostly~~on ~~to injection site reactions~~FL. The ~~results~~revised of2012 ~~the~~NCCN ~~latest~~guidelines ~~follow-up~~consider ofRituxan ~~these~~maintenance ~~patients~~therapy ~~performed~~and inZevalin ~~2011~~consolidation ~~were~~therapy ~~presented~~as ‘optional’ attherapeutic ~~the~~approaches ~~2011~~post-induction ~~Annual~~therapy, ~~Meeting~~rather ofthan ~~the~~‘recommended’ ~~American~~therapeutic ~~Society of Hematology (Grant et al~~approaches., ~~ASH 2011) (Abstract #2707).~~

19Figure 1

LOGO

~~With~~Figure ~~122~~1. ~~months~~BiovaxID™ oftargets ~~median potential follow~~tumor-~~up,~~specific ~~the median OS is 104 months. In this study~~idiotype, ~~MIPI~~a ~~was associated~~protein ~~with~~unique OSto ~~(P= 0.01), where median OS estimates were not reached for~~ the ~~low~~tumor ~~risk MIPI group, 84 months for the intermediate risk MIPI group,~~ and 44not ~~months for the high risk MIPI group. The eleven year follow-up data presented at ASH helps~~found ~~define~~on ~~how~~healthy ~~BiovaxID works by demonstrating that the mechanism of action of BiovaxID is T-cell~~ (GMnon-~~CSF cytokine~~malignant) ~~mediated and not~~ B-~~cell (humoral) mediated~~cells. ~~There~~ ~~was~~In acontrast, ~~significant~~current ~~association~~monoclonal ~~between~~antibody-based ~~the~~therapies ~~increase~~for inNHL, ~~the~~including ~~amount~~rituximab ~~of specific anti-Id T-cell~~ (~~GM-CSF cytokine~~Rituxan®), ~~immune response following vaccination~~ and ~~OS.~~ibritumomab Intiuxetan ~~patients with normalized T-cell~~ (~~GM-CSF cytokine~~Zevalin®) ~~levels~~target ~~above the median value for the cohort (>4.3mg)~~CD20, ~~median~~a OScell-surface ~~was~~protein ~~not~~expressed ~~reached~~by asboth ~~compared~~tumor toand ~~79 months in~~healthy ~~patients with T~~B-~~cell (GM-CSF cytokine) levels below the median (<4~~cells.~~3mg)~~ ~~(P=~~As ~~0.015~~such, ~~unadjusted;~~through P=its ~~0.045~~unique ~~Bonferroni~~mode ~~adjusted).~~of ~~There~~action, ~~was~~BiovaxID norepresents ~~association~~a ~~between~~new OStherapeutic ~~and~~approach ~~specific~~to ~~anti-Id~~treating ~~B-Cell (humoral) responses or any other type of specific cellular responses~~FL.

~~Figure~~15 ~~2: Overall Survival by GM-CSF Cytokine Response (< and > than median)~~

20Table of Contents

~~Phase~~Current 3U.S. ~~Clinical~~Approved ~~Trial~~Consolidation ofTherapies ~~BiovaxID®~~ for ~~Treatment~~NHL ofand FLUrgent Need for Alternative Treatment Options

~~Overview~~Rituxan® ~~and~~(Rituximab): ~~Objectives.~~Rituximab ~~In January~~maintenance ~~2000,~~consists of administration of the ~~Phase~~anti-CD20 3antibody ~~clinical~~rituximab administered ~~trial~~at ina FLdose of 375 mg/m2 every 8 weeks for 24 months (~~NCT00091676~~12 injections) ~~was~~administered ~~initiated~~ by ~~the~~IV ~~NCI.~~infusion ~~The~~every ~~Phase~~8 3weeks ~~clinical~~starting ~~trial~~8 ~~was~~weeks a± ~~multi~~7 days after the last induction treatment (whether immuno-~~center~~chemotherapy or rituximab, ~~double~~whichever is later). Administration of rituximab (and other anti-~~blind,~~CD20 ~~randomized,~~agent) ~~controlled~~maintenance ~~clinical~~extends ~~trial~~the ~~that~~profound ~~was~~immunosuppression ~~designed~~achieved toby ~~confirm~~induction therapy, as it targets the ~~results~~pan-B-cell ~~reported~~CD20 inprotein. This continued dosing of the induction agent induces ~~NCI’s~~profound ~~Phase~~B-cell 2depletion ~~clinical~~for ~~trial~~the two-year duration of the regimen.

AsZevalin® ~~studied~~(ibritumomab intiuxetan): ~~the~~Zevalin ~~Phase~~is 3an ~~clinical~~immunoconjugate resulting ~~trial,~~from ~~BiovaxID~~covalently-bonded ~~consisted of the patient~~anti-~~specific~~CD20 ~~idiotype~~antibody ~~protein (“Id”)~~ibritumomab ~~derived~~and ~~from~~ the ~~patient’s~~linker-chelator ~~cancer~~tiuxetan ~~cells conjugated or combined with keyhole limpet hemocyanin~~ [N-[2-bi(~~“KLH”~~carboxymethyl),amino]-3-(p-isothiocyanatophenyl)-propyl]-[N-[2-bis(carboxymethylamino]-2-(methyl)-ethyl]glycine. anThis ~~immunogenic carrier protein and administered with GM~~linker-~~CSF,~~chelator ~~which~~provides is a ~~biological response enhancer. The~~ ~~comparator~~high ~~studied~~affinity, inconformationally ~~the~~restricted ~~Phase~~chelation 3site ~~clinical~~for ~~trial~~Indium-111 ~~was~~or ~~a control vaccine consisting of KLH and administered with GM~~Yttrium-~~CSF~~90. ~~Accordingly,~~Administration ~~the~~follows ~~only~~induction ~~difference~~rituximab ~~between BiovaxID~~ and ~~the~~requires ~~control~~preliminary ~~vaccine~~dosimetry ~~was~~and ~~the~~imaging ~~inclusion~~administration of ~~the~~In-111 ~~idiotype protein from the patient’s own tumor in BiovaxID. BiovaxID or the control vaccine was administered following chemotherapy~~ (~~also~~Day ~~referred to as induction therapy~~1) ~~with~~followed aby ~~drug~~administration ~~combination~~ of ~~prednisone, doxorubicin, cyclophosphamide, etoposide referred to as~~Y-90 ~~“PACE”.~~Zevalin ~~Induction~~on ~~therapy~~Day ~~represents~~7, ~~the~~8, ~~“first-line”~~or ~~treatment for FL patients and attempts to induce complete tumor remission as defined by radiological evidence (CT scans)~~9. InThe ~~FL,~~maximum ~~patients~~allowable ~~treated~~dose ~~with the current standard~~ of ~~care often achieve complete remission but these remissions almost always are of limited duration and most treated patients must eventually be re~~Y-~~treated~~90 ~~for~~Zevalin ~~their~~is ~~disease~~32.0 InmCi ~~the~~(1184) MBq ~~majority of cases, however, even with re-treatment, the disease often relapses~~ and ~~develops~~physicians ~~resistance to therapy, leading to a need for bone marrow transplant~~ and ~~eventually resulting in the death of the patient. In the Phase 3 clinical trial,~~ patients ~~who~~receiving ~~achieved complete response following induction therapy were assigned to a limited waiting period prior to vaccination to allow for immune reconstitution following~~ the ~~induction~~agent ~~chemotherapy.~~must ~~Patients~~exercise ~~who~~radiation ~~relapsed~~exposure ~~during~~precautions ~~this~~upon ~~immune~~administering ~~reconstitution period did not receive either BiovaxID~~ or ~~control treatment.~~handling ~~Patients~~the who maintained their complete remission following this immune recovery period received either BiovaxID or control administered as 5 subcutaneous injections monthly over a six month period (one month was skipped)agent.

Urgent Need for New Consolidation Treatment Option for NHL: The ~~primary~~currently ~~objectives~~approved consolidation agents are no longer recommended therapeutic options post-induction therapy by the NCCN clinical practice guidelines. Following the results of the ~~Phase~~Eastern 3Cooperative ~~clinical~~Oncology ~~trial~~Group ~~were~~E4402 toprotocol, ~~confirm~~also called RESORT (Rituximab Extended Schedule or Re-treatment Trial), reported at the ~~safety~~2011 Annual Meeting of the American Society of Hematology, the 2012 NCCN revised guidelines include rituximab maintenance and ~~efficacy~~radioimmunotherapy as ‘optional’ therapeutic options post-induction. BiovaxID™ is expected to offer a non-immunosuppressive alternative to rituximab maintenance as a consolidation therapy for FL and MCL. By its mechanism of action, BiovaxID inis ~~two~~believed ~~predefined~~to ~~groups:~~eliminate the risk of development of rituximab-resistance. Thus, BiovaxID represents a potential novel option for consolidation therapy that has demonstrated to be safe and effective and, unlikely to interfere with future therapies while potentially increasing the utility of other therapies.

~~(1)~~Mantle ~~All~~Cell ~~Randomized~~Lymphoma ~~Patients (the “Randomized Patients”): The Randomized Patients including patients who completed initial chemotherapy but relapsed and did not receive either BiovaxID or control.~~

Mantle cell lymphoma (2“MCL”) ~~All~~is ~~Treated~~a ~~Patients~~rare, aggressive subtype of NHL characterized by short remissions and rapid progression similar to aggressive lymphomas and successive relapses, reflecting incurability similar to indolent lymphomas. The median OS for MCL has been cited as 5-7 years (Perez-Galan et al. Mantle cell lymphoma: biology, pathogenesis, and the ~~Randomized~~molecular ~~Patients~~basis ~~who~~of ~~were~~treatment ~~disease~~in the genomic era. Blood, 2011, 117:26-~~free~~38). atMCL ~~the~~represents ~~time~~approximately 6% of ~~vaccination~~all NHL cases and ~~consequently~~worldwide there ~~received~~are atapproximately ~~least~~7,800 1new ~~dose~~cases each year of ~~BiovaxID~~which, orapproximately, ~~control~~one half are in the U.S. (see “Current treatment approaches for mantle-cell lymphoma” J Clin Oncol. Sep 10 2005 and “New approach to classifying non-Hodgkin’s lymphomas: clinical features of the major histologic subtypes” J Clin Oncol. Aug 1998).

The ~~secondary~~majority ~~objectives~~of MCL patients have disseminated disease and bone marrow involvement at diagnosis. Patients’ clinical outcomes from currently available therapies are poor. Although many therapeutic regimens are capable of rendering high initial response rates, these responses are of short duration (i.e., about 20 months) and the ~~Phase~~relative 3survival ~~clinical~~rates ~~trial~~of ~~included:~~MCL patients are among the lowest compared to other types of NHL. After a patient’s first relapse, the expected disease course and prognosis is very poor, with an expected median OS of about 1-2 years. No currently available therapeutic regimens are curative.

~~(1)~~While there are several therapeutic regimens available to ~~determine~~treat ~~the~~MCL ~~ability~~patients, ofthere ~~BiovaxID~~currently toexists ~~produce~~no aconsensus ~~molecular~~standard CRof incare ~~subjects~~for intreatment ~~clinical~~of CRfirst-line relapsed MCL. As such, ~~but~~MCL ~~with~~remains ~~PCR~~incurable ~~evidence~~and ofit ~~residual~~is ~~disease~~generally ~~after~~considered ~~standard~~that ~~chemotherapy;~~additional treatment options are required given this significant unmet medical need.

Currently, upon first diagnosis MCL patients are often evaluated for eligibility for autologous stem cell transplantation (2“autoSCT”). Stem cell transplantation, an aggressive treatment protocol consisting of high-dose chemotherapy, immunotherapy and full-body radiation, aims to ~~determine~~treat the ~~impact~~patient’s tumor and purge the bone marrow of ~~BiovaxID~~lymphoma oncells. ~~molecular~~MCL ~~remission~~patients who are eligible for autoSCT receive either R-CHOP (rituximab, cyclophophamide, doxorubicin, vincristine, prednisone) followed by autoSCT or R-HyperCVAD (rituximab, cyclophosphamide, vincristine, doxorubicin, and dexamethasone alternating with rituximab plus high dose methotrexate and cytarabine) followed by observation. Although these therapeutic approaches do yield high response rates, they are associated with high rates of adverse events and treatment discontinuation, high risk of myelodysplastic syndrome, and high mortality rates. Consequently, the considerable toxicity associated with these regimens largely limits these options primarily to a select subset of the MCL patients who are younger and better fit to tolerate these high-intensity treatments. However, even this subset ultimately gains only modest benefits from existing treatment options. Moreover, the use of these more aggressive regimens appears not to result in superior FLOS as compared to standard therapies. Given that the median age for newly diagnosed MCL patients; is 60 years, less aggressive therapeutic approaches are needed.

~~(3)~~16 ~~to evaluate the ability of BiovaxID to generate an immune response against autologous tumor;~~

(4)Table to determine and compare the OS of subjects randomized to receive either treatment assignment; andContents

~~(5)~~Development toStatus ~~evaluate the safety~~ of BiovaxID™ ~~administered with GM-CSF.~~

~~Biopsy~~Preliminary studies demonstrated that treatment of patients with NHL with an active immunotherapy could allow a patient’s immune system generate clinically significant immune responses. These studies have been published in The New England Journal of Medicine (October 1992), ~~Chemotherapy~~Blood (May 1997), and ~~Immune~~Nature ~~Recovery~~Medicine (October 1999). ~~Prior~~In tothe ~~chemotherapy~~treatment of cancer, aresidual ~~small~~tumor cells remaining in the patient after completion of surgery or anti-tumor ~~biopsy~~therapy ~~was~~are ~~performed~~often tothe ~~obtain~~cause ~~tissue~~of ~~for~~tumor relapse. These residual tumor ~~classification~~cells ~~and~~cannot ~~characterization,~~always ~~and~~be todetected ~~provide~~by ~~starting~~standard ~~material necessary~~imaging totechniques ~~manufacture~~but ~~BiovaxID.~~their ~~Following~~destruction ~~this~~may ~~biopsy~~be ~~patients~~feasible ~~were~~by ~~initially~~active ~~treated~~immunotherapy. ~~with~~The ~~PACE~~use ~~chemotherapy~~of such vaccines differs from traditional cancer treatment in ~~order~~that tothe ~~induce~~ultimate amechanism CRof oraction aagainst ~~complete~~the ~~response~~tumor ~~unconfirmed~~is ~~(“CRu”)~~indirect: asthe ~~measured~~anti-tumor immunity induced by CTvaccination, ~~radiological~~rather ~~scans.~~than the vaccine itself, is ultimately responsible for treatment benefit.

~~The~~In ~~trial~~1994, ~~protocol~~the ~~stipulated~~National ~~that~~Cancer Institute (“NCI”) filed for ~~all~~initiation ~~patients,~~of an ~~immune~~IND ~~recovery~~for ~~period~~the purpose of ~~approximately~~conducting 6clinical ~~months~~trial(s) investigating ~~following~~the ~~completion~~use of ~~chemotherapy~~BiovaxID ~~was required~~in NHL. Under this IND and also in 1994, the NCI began a Phase 2 clinical trial in FL; in 1999, the Phase 3 clinical trial in FL; and in 2000 a Phase 2 clinical trial in MCL. The NCI selected Biovest to beproduce BiovaxID ~~completed~~for ~~without~~the ~~relapse~~initial ~~(“Immune~~Phase ~~Recovery~~2 ~~Period~~clinical trial in FL. In 2001, we entered into a formal cooperative research and development agreement (“CRADA”) ~~before~~with ~~vaccination~~the NCI which formalized our collaboration with the NCI. ~~The~~In ~~Immune~~April ~~Recovery~~2004, ~~Period~~the IND filed by the NCI was ~~required~~formally intransferred ~~order~~to us, which made Biovest the exclusive sponsor of the IND with full rights to ~~maximize~~complete the ~~potential~~NCI-initiated ~~for~~Phase ~~immune~~3 ~~response~~clinical trial in FL and the NCI-initiated Phase 2 clinical trial in MCL, to ~~vaccine~~communicate and negotiate with the FDA relating to ~~avoid~~marketing ~~confounding~~approval ~~factors~~for ~~from~~BiovaxID, ~~any potential~~and ~~lingering~~to ~~immunosuppressive~~conduct ~~effects~~other ofclinical ~~chemotherapy~~studies in NHL under the IND.

21BiovaxID™ Clinical Trials

~~Randomization to Immune Recovery Followed by BiovaxID or Control. When the NCI designed the~~ Phase ~~3 clinical~~2 ~~trial~~Clinical ~~protocol,~~Trial ~~a decision was made to randomize patients, immediately after completion~~ of ~~chemotherapy~~BiovaxID™ ~~and not to wait~~ for ~~the~~Treatment ~~completion~~ of ~~the~~FL Immune Recovery Period in an effort to avoid expending NCI resources to manufacture patient-specific vaccines for patients who were not anticipated to receive the vaccine (e.g., control patients). In the Phase 3 clinical trial, of 234 patients initially enrolled into the clinical trial, 177 patients completed chemotherapy successfully and were randomized.

AsIn ~~per~~1994, the ~~design~~Phase 2 clinical trial (NCT00878488) was commenced by the NCI to evaluate the ability of BiovaxID to eradicate residual lymphoma cells in 20 patients with FL who were in chemotherapy-induced first clinical complete remission (“CR”). All 11 patients with a detectable lymphoma gene sequence (translocation) in their primary tumors had cells from the ~~Phase~~malignant 3clone detectable in their blood by DNA polymerase chain reaction (“PCR”) analysis both at diagnosis and after chemotherapy, despite being in CR. In this clinical trial, molecular remission was defined as patients ~~who~~lacking ~~relapsed~~any ~~during~~detectable residual cancer cells bearing the ~~Immune~~translocation ~~Recovery~~as ~~Period~~determined by a very sensitive PCR technique. After vaccination, 8 of ~~were~~these ~~excluded~~11 ~~from~~patients ~~treatment~~converted ~~with~~to ~~BiovaxID~~lacking orcells ~~control~~in ~~notwithstanding~~their blood from the ~~fact~~malignant ~~that~~lymphoma ~~they~~clone ~~had~~detectable ~~been~~by ~~randomized~~PCR. InAnti-tumor ~~the~~T-cell ~~Phase~~responses 3were ~~clinical~~found ~~trial,~~in the vast majority of the ~~177~~patients ~~initially~~(19 ~~randomized~~of 20 patients), ~~117~~whereas ~~remained~~anti-tumor ~~eligible~~antibodies towere detected, bebut ~~treated~~apparently were not required for molecular remission. Vaccination was thus associated with ~~either~~clearance ~~BiovaxID~~of ~~(76~~residual tumor cells from the blood and long-term disease-free survival. The demonstration of molecular remissions besides uniform, ~~patients)~~specific orT-cell ~~control~~responses ~~(41~~against ~~patients~~lymphoma tumor targets, as well as the addition of granulocyte-monocyte colony-stimulating factor (“GM-CSF”) atto the ~~end~~vaccine formulation provided the rationale for the initiation of a larger Phase 3 clinical trial at the ~~Immune~~NCI ~~Recovery~~in ~~Period~~2000. ~~Sixty~~These ~~patients~~results were published in Nature Medicine (October 1999). After a median of ~~the~~9.17 ~~177~~years, ~~randomized~~45% of these patients ~~relapsed~~were ~~during~~still in continuous first CR, the ~~Immune~~median ~~Recovery~~disease ~~Period~~free ~~and~~survival ~~were~~(“DFS”) ~~not~~for the ~~treated~~cohort ~~with~~is ~~either~~96.5 ~~BiovaxID~~months, orand ~~control~~OS is 95% (~~see~~Santos ~~Figure~~et 3al., ASH 2005).

~~Figure 3: Flow Diagram of~~ Phase 3,2 ~~double-blind,~~Clinical ~~randomized~~Trial ~~clinical trial~~ of ~~patient-specific vaccination with~~ BiovaxID™ ~~+ GM-CSF in first CR. 234 patients were enrolled at 14 centers and assessed~~ for ~~eligibility.~~Treatment ~~Of those enrolled, 57 were excluded from randomization for reasons indicated. 177 patients were randomized (ITT population),~~ of which 118 were allocated to the BiovaxID (Id-KLH + GM-CSF) arm (treatment) and 59 were allocated to the KLH + GM-CSF arm (control). Patients that failed to remain in CR/CRu (60 total) did not receive either vaccine. As a result, 76 patients wereMCL vaccinated with Id-KLH + GM-CSF and 41 were vaccinated with KLH + GM-CSF, comprising the modified ITT (mITT) population. Patients receiving less than 5 immunizations either withdrew from the study or relapsed before completion.

~~Trial~~In ~~Enrollment~~2000, ~~and~~ the ~~Use~~NCI ofinitiated ~~Rituximab~~a Phase 2 open-~~Containing~~label ~~Induction~~clinical ~~Chemotherapy.~~trial ~~During~~(NCT00020215) of BiovaxID for the ~~course~~treatment of ~~the~~MCL. This Phase 32 clinical trial, was based upon the ~~standard~~NCI’s ofPhase ~~care for~~2 ~~induction~~clinical ~~chemotherapy~~trial in FL. ~~changed~~The toprimary ~~include~~objective ~~rituximab,~~of ~~which~~this ~~reduced~~Phase ~~the~~2 ~~ability~~clinical trial was to ~~recruit~~study ~~and~~BiovaxID ~~enroll~~in treatment-naïve patients ~~into~~with MCL and to determine the ~~study.~~safety Inand ~~order~~efficacy toof ~~facilitate~~BiovaxID ~~enrollment~~following ina rituximab-based ~~the~~immunotherapy. ~~clinical~~Twenty-six ~~trial~~patients with untreated, wemostly ~~amended~~(92%) stage ~~the~~IV ~~study~~MCL, ~~protocol~~were inenrolled. ~~2007~~All topatients ~~permit~~received ~~the~~6 ~~use~~ cycles of EPOCH-R (which is a ~~rituximab~~chemo-~~containing~~immunotherapy ~~chemotherapy~~consisting ~~regimen~~of etoposide, prednisone, vincristine, cyclophosphamide, doxorubicin, rituximab); 92% of the patients achieved CR and 8% achieved partial response (“~~CHOP-R~~PR”),. asAll ~~induction~~but ~~therapy.~~3 ~~However~~patients (i.e., due ~~the~~to ~~FDA~~disease ~~requested~~progression ~~that~~or weinability ~~abstain~~to ~~from~~manufacture ~~vaccinating~~the ~~any~~vaccine) ~~patients~~received ~~who~~BiovaxID together ~~received~~with ~~CHOP-R~~keyhole ~~and~~limpet wehemocyanin ~~did~~(“KLH”), ~~not~~an ~~vaccinate~~immunogenic ~~any~~carrier ofprotein, ~~the~~on ~~patients~~day ~~who~~1, ~~received~~along ~~CHOP~~with GM-~~R chemotherapy~~CSF ~~under~~(100 µg/m2/day) on ~~the~~days ~~Phase~~1-4 at 1, 2, 3, ~~clinical~~4, ~~trial~~and ~~protocol~~6 months starting at least 3 months post-chemotherapy.

The results of Biovest’s MCL Phase 2 clinical trial were reported in Nature Medicine (August 2005). As reported in Nature Medicine, after a median follow-up of 46 months, the OS was 89%, the median event-free survival (“EFS”) was 22 months, and 5 patients remained in continuous first CR. Antibody responses to immunization were detected in 30% of the patients, following a delayed pattern (i.e., detected mostly after the 4-5th vaccination) which paralleled the peripheral blood B-cell recovery. Most importantly, specific CD4+ and CD8+ T-cell responses were detected in 87% of patients post-vaccine, and in 7 of 9 patients tested these responses were detected after the 3rd vaccination when peripheral B-cells were by and large undetectable. The detected cytokine release response included GM-CSF, INF-g, and TNF-a (type I). In this study, BiovaxID induced both humoral and cellular immune responses following almost complete depletion of B-cells following rituximab-containing chemotherapy. The adverse events observed in this clinical trial were minimal and were limited mostly to injection site reactions. The results of the latest follow-up of these patients performed in 2011 were presented at the 2011 annual meeting of the American Society of Hematology (“ASH”) (Grant et al., ASH 2011 Abstract #2707).

~~Due~~17 to the protracted enrollment, the Phase 3 clinical trial’s Independent Data Monitoring Committee (“DMC”; a committee responsible for reviewing the available unblinded clinical trial data in the study and responsible for recommendations to the sponsor and the FDA) recommended an interim analysis of the clinical trial’s endpoints and overall safety profile which resulted in the termination and halting of the trial in 2008.

AsTable of April 15, 2008, when the Phase 3 clinical trial was officially closed, a total of 234 subjects had been enrolled and 177 subjects had been randomized, which was less than the original planned sample size which called for 629 subjects to be enrolled and 540 to be randomized. While the termination of the Phase 3 clinical trial before completion of the planned accrual resulted in a smaller sample size than was originally intended, we believe that the randomized nature of our Phase 3 clinical trial yields a valid conclusion because the baseline characteristics of the patients in the 2 groups were balanced, the allocation to treatment arms was concealed, and the study was double-blinded. Contents

~~Results~~With 122 months of ~~Phase~~median 3follow-up, ~~Clinical~~the ~~Trial~~median OS was 104 months. AsIn ~~reported~~this study, the Mantle Cell Lymphoma International Prognostic Index (“MIPI”) was associated with OS (P= 0.01), where median OS estimates were not reached for the low risk MIPI group, 84 months for the intermediate risk MIPI group, and 44 months for the high risk MIPI group. This long term follow-up data presented at the ~~plenary~~2011 ~~session~~annual meeting of the ~~Annual~~ASH ~~Meeting~~and at the 2012 annual meeting of the American Society of Clinical Oncology (“ASCO ~~2009~~”), ~~the~~provided ~~patient~~clinical ~~cohort~~data ofsuggesting that the ~~177~~mechanism ~~Randomized~~of action ~~Patients~~of ~~(which~~BiovaxID ~~included~~is ~~117~~T-cell mediated and not B-cell (~~66%~~humoral) mediated. ~~Treated~~There ~~Patients~~was a significant association between the production of specific anti-tumor T-cell (GM-CSF cytokine induction) immune response following vaccination and 60 OS and time to next treatment (~~35%~~TTNT). The NCI investigators reported at ASH that in patients ~~who~~with ~~were~~normalized ~~not~~GM-CSF ~~treated~~cytokine production levels above the median value for the cohort (>4.3pg/mL), ~~did~~median OS was not ~~demonstrate~~reached ~~statistically~~as ~~significant~~compared ~~difference~~to 79 months in patients with GM-CSF cytokine levels below the median ~~DFS~~value ~~from~~(<4.3pg/mL) ~~randomization~~(P= 0.015 unadjusted; P= 0.045 Bonferroni adjusted) (Fig. 2). There was no association between ~~treatment~~OS and ~~control~~specific ~~arms~~anti-Id B-cell (humoral) responses or any other type of specific cellular responses. Similarly, patients with normalized GM-CSF cytokine production levels above the median value for the cohort (>4.3pg/mL) had a median TTNT of 51.9 months as compared to 5.5 months in patients with GM-CSF cytokine levels below the median value (<4.3pg/mL) (P= 0.003) (Fig 3).

LOGO

Figure 42. ~~Disease-free~~Overall ~~survival~~Survival ~~(DFS)~~by ~~according to study group for the All Randomized Patients (N = 177). Kaplan-Meier actuarial curves for DFS for the Randomized Patients are shown according to their study group of Id-KLH+~~GM-CSF (NCytokine =Response ~~118) or KLH+GM-CSF~~ (N< =and ~~59).~~> ~~The~~than ~~number of events,~~ median,) ~~and 95% confidence intervals for each group are also presented.~~

2318

AtTable ASCO, we further reported the median DFS data for the patients who received at least one vaccination either with BiovaxID or control. In this cohort of 117 patients they represent a modified intent-to-treat population, median DFS was 13.6 months longer in patients who received BiovaxID compared to patients who received control. This analysis reflects the prospectively defined primary clinical trial objective. Accordingly, there were 60 patients who were randomized but who did not receive either BiovaxID or control and who are not included in this analysis. Of these 117 treated patients, 76 patients received at least one dose of BiovaxID (the “BiovaxID Arm”) and 41 patients received at least one dose of control (the “Control Arm”). No serious adverse events were reported in either the BiovaxID Arm or the Control Arm. At the median follow-up of 56.6 months (range 12.6-89.3 months), a statistically significant improvement of 13.6 months was observed in DFS between patients in the BiovaxID Arm (44.2 months), versus the Control Arm (30.6 months) (log-rank p-value = 0.045; HR = 1.6). Using a Cox proportional-hazard model, a statistically significant hazard ratio (HR) of 0.62 was achieved (p=0.048; 95% CI: 0.39, 0.99). This means that patients receiving BiovaxID experienced an approximately 61% (1/0.62) lower risk of cancer recurrence compared to patients who received the control vaccine. The Phase 3 clinical trial’s secondary endpoint of OS has not yet been reached for either group due to the length of follow-up to date. Contents

LOGO

Figure 53. ~~Disease-free~~Time ~~survival (DFS) according~~ to ~~study~~next ~~group~~treatment ~~for~~by ~~the Randomized Patients who received blinded vaccinations (N = 117). Kaplan-Meier actuarial curves for DFS for the Randomized Patients who received at least one dose of the Id-KLH+~~GM-CSF (NCytokine =Response ~~76) or KLH+GM-CSF~~ (N< =and ~~41)~~> ~~are~~than ~~shown. The number of events,~~ median,) ~~and 95% confidence intervals for each group are also presented.~~

24Phase 3 Clinical Trial of BiovaxID™ for Treatment of FL

~~Analysis~~Overview ~~of Patients by Isotype. A typical antibody (“immunoglobulin”), including the lymphoma idiotype expressed on the surface of each cancerous lymphoma cell, is composed of protein “heavy chains”~~ and ~~“light chains”~~Objectives. In ~~humans,~~January ~~the heavy chains are classified as IgG~~2000, ~~IgM, IgA, IgD and IgE, and~~ the ~~light~~Phase ~~chains are~~3 ~~classified~~clinical astrial either kappa or lambda. The Id protein expressed on the surface of FL cells is an immunoglobulin protein characteristic of the single B-cell from which the tumor arose. The immunoglobulin protein contains a region known as the “heavy chain” and a region known as the “light chain” (see Figure 6). Almost always in FL, the heavy chain region is characterized as either an IgM-isotype or an IgG-isotype. Figure 6 below illustrates the dramatic differences in the structure of immunoglobulin protein characterized as an IgM-isotype as opposed that characterized as an IgG-isotype. Accordingly, an antibody may be referred to as IgG-isotype or IgM-isotype depending on its heavy-chain classification. In the normal immune response, antibody isotypes may have different roles and may help direct the appropriate immune response. The small region at the tip of the antibody is known as the “variable region”, or antibody binding site, and the balance of the isotype is known as the “constant region”. When Biovest manufactures BiovaxID, Biovest screens each patient’s tumor cells obtained by biopsy for the isotype. Approximately, 60% of patients with FL are diagnosed with tumors expressing an IgM isotype and approximately 40% of patients bear tumors expressing an IgG isotype. In rare cases (~~<1%~~NCT00091676), ~~patients~~was ~~are~~initiated diagnosed with another isotype (e.g. IgA). Infrequently, the patient’s tumor also contains cells with one or more isotype (a heterogenous or “mixed” isotype); in these patients we select either an IgG or IgM isotype for manufacture of BiovaxID. Each patient’s tumor isotype can be readily determined by ~~standard analytical techniques (flow cytometry) at~~ the ~~time of the patient’s tumor biopsy~~NCI. InThe ~~both the~~ Phase ~~2 and Phase~~ 3 clinical ~~trials,~~trial ~~the~~was ~~determination~~a ~~of tumor heavy~~multi-~~chain~~center, ~~isotype determined the specific manufacturing and purification process used to make that patient’s vaccine. For patients who have tumors expressing an IgG (or an IgG~~double-~~containing “mixed” isotype)~~blind, ~~Biovest manufactures an IgG isotype vaccine and for patients determined to have tumors expressing an IgM (or an IgM-containing~~randomized, ~~“mixed”~~controlled ~~isotype),~~clinical ~~Biovest~~trial ~~manufacture~~that anwas ~~IgM~~designed ~~vaccine. Due~~ to ~~Biovest’s~~confirm ~~manufacturing process (rescue fusion hybridoma),~~ the ~~isotype~~results ~~(IgG~~reported ~~or IgM) of the tumor is directly reproduced~~ in ~~each patient’s vaccine so that each patient’s BiovaxID vaccine matches~~ the ~~patient~~NCI’s ~~original~~Phase ~~tumor~~2 ~~isotype~~clinical ~~(IgG or IgM)~~trial.

~~Figure~~As 6:studied ~~The~~in the Phase 3 clinical trial, BiovaxID consisted of the patient-specific idiotype protein (Id) derived from the patient’s cancer cells conjugated or combined with KLH and administered with GM-CSF which is a biological response enhancer. The comparator studied in the Phase 3 clinical trial was a control vaccine consisting of KLH and administered with GM-CSF. Accordingly, the only difference between BiovaxID and the control vaccine was the inclusion of the idiotype protein ~~expressed~~from onthe patient’s own tumor in BiovaxID. BiovaxID or the ~~surface~~control vaccine was administered following chemotherapy (also referred to as induction therapy) with a drug combination, of prednisone, doxorubicin, cyclophosphamide, etoposide (referred to as “PACE”). Induction therapy represents the “first-line” treatment for FL ~~cells~~patients isand anattempts ~~immunoglobulin~~to ~~protein~~induce complete tumor remission as defined by radiological evidence (“CT scans”). In FL, patients treated with the ~~characteristic~~current standard of care often achieve complete remission but these remissions almost always are of limited duration and most treated patients must eventually be re-treated for their disease. In the ~~single~~majority Bof cases, however, even with re-~~cell~~treatment, ~~from~~the ~~which~~disease often relapses and develops resistance to therapy, leading to a need for bone marrow transplant and eventually resulting in the ~~tumor~~death ~~arose~~of the patient. In the Phase 3 clinical trial, patients who achieved complete response following induction therapy were assigned to a limited waiting period prior to vaccination to allow for immune reconstitution following the induction chemotherapy. Patients who relapsed during this immune reconstitution period did not receive either BiovaxID or control treatment. Patients who maintained their complete remission following this immune recovery period received either BiovaxID or control administered as 5 subcutaneous injections monthly over a six month period (one month was skipped).

~~Preclinical~~19 data indicates that the ability to develop an immune response differs between IgM-isotype and IgG-isotype idiotypes. The IgG-isotype idiotype was reported to be tolerogenic, meaning that the immune response against the specific tumor target is suppressed. On the other hand, the IgM-isotype idiotype was reported to be highly immunogenic, meaning that it induces an ample, persistent immune response against the specific tumor target. The unique feature of Biovest’s Phase 3 clinical trial was the manufacturing and administration of tumor-matched isotype idiotype vaccines which, allowed Biovest to investigate whether these preclinical data translate into differential clinical efficacy of the two isotype vaccines.

25Table of Contents

~~Figure 7.~~ The ~~vaccines~~primary ~~produced~~objectives ~~for each individual patient consist~~ of the ~~tumor~~Phase ~~idiotype~~3 ~~with~~clinical ~~the same~~trial ~~isotype~~were asto ~~the~~confirm ~~tumor cells from which~~ the ~~vaccine~~safety ~~was produced. Therefore, patients with IgM isotype tumors received IgM vaccine,~~ and ~~patients~~efficacy ~~with~~of ~~IgG~~BiovaxID ~~isotype~~in two ~~tumors~~predefined ~~received~~groups: ~~IgG vaccine manufactured from their own tumor cells.~~

~~Biovest~~(1) ~~analyzed~~All ~~differences~~Randomized inPatients ~~median~~(the ~~DFS~~“Randomized inPatients”): ~~vaccinated~~The ~~patients~~Randomized inPatients ~~its~~including ~~Phase 3 clinical trial separately by tumor isotype. There were 35 IgM isotype~~ patients who ~~received~~completed ~~BiovaxID~~initial ~~and~~chemotherapy 25but ~~IgM~~relapsed ~~isotype patients who received control. There were 40 IgG isotype patients who received BiovaxID~~ and 15did ~~IgG~~not ~~isotype~~receive ~~patients who received control. Two patients had mixed IgM/IgG biopsy isotypes and were excluded from this analysis. The baseline characteristics of the patients who received~~ either ~~IgM~~BiovaxID or ~~IgG~~control; ~~vaccine were balanced between each respective BiovaxID Arm~~ and ~~Control Arm groups.~~

~~In the IgM isotype group we observed that patients who were treated with isotype-matched BiovaxID had significantly longer DFS~~ (~~52.9 months, versus 28.7 months~~2) ~~than~~All ~~patients~~Treated ~~with~~Patients: ~~IgM isotype tumors who received control vaccine (see Figure 8). In contrast, in~~ the ~~IgG~~Randomized ~~isotype~~Patients ~~group, there was no difference in median DFS between the patients~~ who ~~received~~were ~~isotype~~disease-~~matched~~free ~~BiovaxID~~at ~~and~~ the ~~patients~~time ~~with IgG~~of ~~isotype~~vaccination ~~tumors~~and ~~who~~consequently received ~~control~~at ~~vaccine~~least ~~(see~~1 ~~Figure~~dose ~~9).~~of ~~Although~~BiovaxID aor separate manufacturing process is prescribed for the IgM isotype and for the IgG isotype, the Phase 3 clinical trial protocol did not include planned analyses to address a subset efficacy analysis by isotypecontrol.

26The secondary objectives of the Phase 3 clinical trial included:

~~Figure 8: Disease-free survival~~ (~~DFS~~1) ~~for~~to ~~the~~determine ~~Randomized Patients with tumor IgM heavy chain isotype who received blinded vaccinations. Kaplan-Meier actuarial curves for DFS for~~ the Idability ~~vaccinated~~of ~~[igM-id-KLH~~BiovaxID +to ~~GM-CSF]~~produce ~~and~~a ~~control~~molecular ~~[KLH+GM-CSF]~~CR ~~groups~~in ~~for~~subjects ~~the~~in ~~IgM~~clinical ~~isotype~~CR, ~~are~~but ~~shown.~~with ~~The~~PCR ~~number~~evidence of ~~events,~~residual ~~median,~~disease ~~and~~after ~~95%~~standard ~~confidence intervals for each group are also presented.~~ chemotherapy;

27(2) to determine the impact of BiovaxID on molecular remission in FL patients;

~~Figure 9: Disease-free survival~~ (~~DFS~~3) ~~for~~to ~~the~~evaluate ~~Randomized Patients with tumor IgG heavy chain isotype who received blinded vaccinations. Kaplan-Meier actuarial curves for DFS for~~ the Idability ~~vaccinated [igM-id-KLH + GM-CSF] and control [KLH+GM-CSF] groups for the IgG isotype are shown. The number~~ of ~~events,~~BiovaxID ~~median,~~to ~~and~~generate ~~95%~~an ~~confidence~~immune ~~intervals~~response ~~for~~against ~~each group~~autologous ~~are also presented.~~ tumor;

28(4) to determine and compare the OS of subjects randomized to receive either treatment assignment; and

~~Figure 10: Shown is a standard statistical analysis~~ (~~Kaplan-Meier survival curves~~5) ~~used~~ to ~~measure~~evaluate the ~~fraction~~ ofsafety ~~patients free~~ of ~~disease~~BiovaxID ~~for~~administered ~~a certain amount of time after treatment. In this Figure, IgM-isotype patients who receive an IgM-isotype vaccine are compared~~ with ~~IgG~~GM-~~isotype patients who received an IgG-isotype vaccine compared with all control patients (patients with both IgM-isotype and IgG-isotype)~~CSF.

~~Our Phase 3 clinical trial has two unique manufacturing features~~Biopsy, ~~where: (a) the vaccine consists of the full structure of the idiotype protein (that is~~Chemotherapy, ~~both the variable~~ and ~~the~~Immune ~~constant~~Recovery. ~~regions~~Prior ofto ~~the~~chemotherapy, ~~immunoglobulin)~~a ~~and~~small ~~(b) the idiotype of the vaccine matches the idiotype of the patient’s own~~ tumor~~. These~~ ~~unique~~biopsy ~~features~~was ~~allowed~~performed ~~Biovest~~ to beobtain ~~the~~tissue ~~first~~for ~~to investigate the clinical efficacy implications of the two~~ tumor ~~isotypes.~~classification ~~The prior Phase 3 clinical trials of FL idiotype vaccines conducted by Genitope Corporation~~ and ~~Favrille~~characterization, ~~Inc.~~and ~~used a manufacturing process known as recombinant manufacturing that universally linked the patient’s variable region of the idiotype into an IgG isotype without regard~~ to ~~the~~provide ~~actual~~starting ~~isotype of each patient’s tumor. Biovest believes that the use~~material ofnecessary ~~an IgG isotype was due~~ to ~~the comparative ease of~~ manufacture ~~and purification of IgG proteins as well as to their relatively long half-life~~BiovaxID. ~~There~~Following ~~are~~this ~~two~~biopsy ~~implications~~patients ofwere ~~the~~initially ~~manufacturing~~treated ~~processes~~with ~~used~~PACE bychemotherapy ~~these~~in ~~prior~~order ~~clinical~~to ~~trials: (1) clinical~~induce ~~efficacy~~a ~~cannot~~CR beor ~~compared~~a bycomplete ~~isotype~~response ~~group~~unconfirmed ~~and~~ (2“CRu”) ~~the~~ ~~lack~~as ofmeasured ~~clinical efficacy observed in these clinical trials may be due to the tolerogenic effect of the universal IgG isotype used in the vaccine manufacturing. As such, Biovest believes that its analysis~~ by ~~tumor~~CT ~~isotype may provide profound insight into the efficacy of BiovaxID and may also suggest methods by which cancer vaccines in general could be developed in the future~~scans.

29The clinical trial protocol stipulated that for all patients, an immune recovery period of approximately 6 months following completion of chemotherapy was required to be completed without relapse (“Immune Recovery Period”) before vaccination. The Immune Recovery Period was required in order to maximize the potential for immune response to vaccine and to avoid confounding factors from any potential lingering immunosuppressive effects of chemotherapy.

Randomization to Immune Recovery Followed by BiovaxID® ~~Regulatory~~or ~~Status~~Control. When the NCI designed the Phase 3 clinical trial in FL protocol, a decision was made to randomize patients, immediately after completion of chemotherapy and not to wait for the completion of the Immune Recovery Period in an effort to avoid expending NCI resources to manufacture patient-specific vaccines for patients who were not anticipated to receive the vaccine (e.g., control patients). In the Phase 3 clinical trial, of the 234 patients initially enrolled into the clinical trial, 177 patients completed chemotherapy successfully and were randomized.

~~Biovest~~As isper in the ~~process~~design of ~~conducting~~ ~~clinical~~the ~~pre-filing~~Phase ~~discussions~~3 ~~with~~clinical ~~domestic~~trial, ~~and~~patients ~~international~~who relapsed ~~regulatory~~during ~~agencies to discuss~~ the ~~potential~~Immune ~~regulatory~~Recovery ~~approval~~Period ~~pathway~~were ~~for~~excluded ~~BiovaxID.~~from ~~Biovest~~treatment iswith ~~focusing on its plans to seek regulatory approval for~~ BiovaxID ~~for~~or ~~the treatment~~control ofnotwithstanding ~~FL and these clinical pre-filing regulatory agency meetings are anticipated to confirm~~ the ~~next~~fact ~~steps~~that ~~and~~they ~~requirements~~had inbeen ~~the regulatory process~~randomized. In ~~preparing~~the ~~for~~Phase ~~these~~3 ~~meetings~~clinical trial, ~~Biovest is continuing its analyses~~ of the ~~data~~177 initially ~~available from~~randomized ~~Biovest’s~~patients, ~~Phase~~117 2remained eligible ~~and~~to ~~Phase~~be 3treated ~~clinical~~with ~~trials,~~either soBiovaxID ~~that~~(76 ~~Biovest~~patients) ~~can~~or ~~have~~control as(41 ~~comprehensive~~patients) asat ~~possible~~the ~~discussions~~end ~~regarding~~of the ~~safety~~Immune ~~and~~Recovery ~~efficacy results for BiovaxID~~Period. InSixty ~~addition,~~patients ~~Biovest~~of ~~continues~~the to177 ~~advance~~randomized ~~its~~patients ~~efforts~~relapsed toduring ~~comply~~the ~~with various~~Immune ~~regulatory~~Recovery ~~validations~~Period and ~~comparability~~were ~~requirements~~not ~~related~~treated towith ~~Biovest’s~~either BiovaxID ~~manufacturing~~or ~~process~~control ~~and~~(see ~~facility~~Figure 4).

~~Additionally, Biovest~~20 anticipates conducting discussions with various regulatory agencies regarding regulatory approval for BiovaxID for the treatment of MCL and Waldenstrom’s Macroglobulinemia (“WM”), a rare B-cell subtype of NHL.

ProprietaryTable Rightsof to BiovaxID® Contents

LOGO

AsFigure a4. ~~result~~Enrolment, ofrandomization, ~~the~~and ~~FDA’s~~treatment, ~~Orphan~~234 ~~Drug~~patients were enrolled, and 177 patients were ~~designation~~randomized ~~for~~to ~~the~~receive ~~treatment~~at least one dose of ~~FL,~~the ~~MCL~~blinded vaccine; 76 patients received Id-vaccine and ~~WM,~~41 ~~Biovest~~received ~~has~~control ~~seven~~vaccine. ~~years~~Patients ofreceiving ~~market~~fewer ~~exclusivity~~than in5 ~~the~~blinded ~~U.S.~~immunizations either withdrew from the ~~date~~study of ~~FDA~~relapsed ~~marketing~~before ~~approval~~completion. Left: ~~for~~The ~~these~~primary ~~three~~prospectively-defined ~~subtypes~~cohorts offor ~~B-cell~~survival ~~NHL.~~analysis ~~Biovest~~(ITT: ~~has~~all ~~ten~~randomized ~~years~~patients ofincluding ~~market~~patients ~~exclusivity~~who indid ~~Europe~~not asreceive ~~a result~~active ofor ~~Orphan~~control ~~Medicinal~~treatment; ~~Product~~and ~~designation~~mITT: ~~for~~randomized ~~the~~patients ~~treatment~~excluding ofpatients FLwho ~~and~~did ~~MCL~~not byreceive ~~the~~active ~~EMA.~~or control treatment)

InTrial ~~addition~~Enrollment toand ~~market exclusivity~~the ~~based~~Use ~~on governmental regulation, Biovest relies on proprietary rights provided by a combination~~ of ~~an exclusive world~~Rituximab-~~wide~~Containing ~~license~~Induction ~~to the cell line that is used in the production of BiovaxID, patent protection, trade secret protection, and Biovest’s ongoing innovation~~Chemotherapy. ~~Although~~During the ~~composition~~course of ~~matter of~~ the ~~BiovaxID~~Phase ~~vaccine is not patentable, Biovest has filed an international patent application (“PCT”) relating to methods of treatment using Biovest’s~~3 ~~vaccine.~~clinical ~~In addition~~trial, ~~Biovest has filed U.S. and foreign patent applications relating to certain features of~~ the ~~AutovaxID®~~ ~~instrument~~standard ~~used in the production~~ of ~~the~~care ~~vaccine.~~for ~~Biovest’s~~induction ~~proprietary~~chemotherapy ~~production~~in ~~system~~FL ~~will use~~changed ~~fully~~to ~~enclosed~~include ~~and disposable components for each patient’s vaccine. Biovest believes that~~rituximab, ~~without~~which ~~the~~reduced ~~availability of an automated production system,~~ the ~~methods~~ability ~~used~~ to ~~produce~~recruit ~~a patient-specific immunotherapy are time-consuming~~ and ~~labor-intensive,~~ ~~resulting~~enroll inpatients ainto ~~very~~the ~~expensive process that would be difficult to scale up~~study. ~~Following~~In ~~the~~order ~~finds related~~ to ~~the~~facilitate ~~apparent~~enrollment ~~role~~in of the ~~IgM isotype in~~ clinical ~~benefit from vaccine~~trial, Biovest ~~filed~~amended ~~a broad range of patent applications~~the ~~covering~~study ~~various~~protocol ~~aspects~~in of2007 ~~this~~to ~~finding.~~permit ~~Biovest has been granted~~ the ~~registration~~use of ~~the trademark BiovaxID. BiovaxID is manufactured with~~ a ~~proprietary cell line, which Biovest has licensed on a world~~rituximab-~~wide~~containing ~~exclusive~~chemotherapy ~~basis~~regimen ~~from Stanford University~~ (“~~Stanford~~CHOP-R”)., ~~This~~as ~~may~~induction betherapy. ~~significant~~However, ~~because~~the ~~Biovest~~FDA ~~believes~~requested that ~~the~~Biovest ~~use~~abstain offrom vaccinating any ~~cell~~patients ~~line~~who ~~other~~received ~~than~~CHOP-R and Biovest’s ~~exclusively~~did ~~licensed~~not vaccinate ~~cell~~any ~~line,~~of in the ~~production~~patients ofwho areceived ~~similar~~CHOP-R ~~idiotype~~chemotherapy ~~vaccine~~under ~~would~~the ~~require~~Phase ~~filing~~3 ~~a separate IND application and undergoing~~ clinical ~~testing~~trial ~~evaluation by the FDA~~protocol.

~~BiovaxID®~~Due ~~Manufacturing~~to ~~Process~~the protracted enrollment, the Phase 3 clinical trial’s Independent Data Monitoring Committee (“DMC”; a committee responsible for reviewing the available unblinded clinical trial data in the study and ~~Facility~~responsible for recommendations to the sponsor and the FDA) recommended an interim analysis of the clinical trial’s endpoints and overall safety profile which resulted in the termination and halting of the trial in 2008.

~~Manufacturing~~As ~~Process~~of April 15, 2008, when the Phase 3 clinical trial was officially closed, a total of 234 subjects had been enrolled and 177 subjects had been randomized. The total number of subjects was less than the original planned sample size which called for 629 subjects to be enrolled and 540 to be randomized. While the termination of the Phase 3 clinical trial before completion of the planned accrual resulted in a smaller sample size than was originally intended, Biovest believes that the randomized nature of its Phase 3 clinical trial yields a valid conclusion because the baseline characteristics of the patients in the 2 groups were balanced, the allocation to treatment arms was concealed, and the study was double-blinded.

~~The~~21 BiovaxID manufacturing production process begins when a sample of the patient’s tumor is extracted by a biopsy and the sample is shipped refrigerated to Biovest’s facility in Minneapolis (Coon Rapids), Minnesota. At Biovest’s facility, Biovest identifies the idiotype that is expressed on the surface of the patient’s tumor cells through laboratory analysis. Additionally, Biovest identifies whether the isotype is IgM or IgG. In NHL, the tumor B-cells bear the surface idiotype (immunoglobulin or antibody) derived from the original transformed malignant B-cell, but do not typically secrete it in an amount suitable for vaccine production. In order to make sufficient quantities of idiotype for vaccination, the patient’s tumor cells are then fused with an exclusively licensed cell line (mouse/human heterohybridoma cell line K6H6) from Stanford to create a hybridoma or hybrid cell.

AfterTable the creation of the hybridoma, we determine which hybridoma cells display the same antigen idiotype as the patient’s tumor cells, and those cells are selected to produce the vaccine. The selected hybridoma cells are then seeded into our proprietary hollow-fiber bioreactors, where they are cultured and where they secrete or produce idiotype antigen. The secreted idiotype is then collected from the cells growing in the hollow-fiber reactor. After a sufficient amount of idiotype is collected for the production of an appropriate amount of the vaccine, the patient’s idiotype is purified using multi-step purification processes. Contents

30Results of Phase 3 Clinical Trial. As reported at the plenary session of the 2009 annual meeting of ASCO, the patient cohort of the 177 randomized patients (which included 117 (66%) treated patients and 60 (35%) patients who were not treated) did not demonstrate statistically significant difference in median DFS from randomization between treatment and control arms.

LOGO

Figure ~~11a:~~5. ~~Individualized~~Disease-free ~~Manufacturing~~survival ~~Process for BiovaxID Immunotherapy:~~ (~~Clockwise~~DFS) ~~Beginning with~~according ~~an excisional (>2cm) lymph node biopsy, tumor cells are fused with our proprietary mouse/human heterohybridoma in order~~ to ~~induce~~study ~~secretion~~group offor ~~normally~~All ~~surface-bound~~Randomized ~~tumor~~Patients ~~immunoglobulin~~ (~~idiotype~~N = 177). Id Kaplan-~~secreting~~Meier ~~clones~~actuarial ~~are~~curves ~~identified~~for ~~by comparing~~DFS ~~their~~for ~~unique idiotype sequence to~~ the ~~tumor’s~~Randomized ~~after~~Patients ~~which they~~ are ~~cultured (expanded) in a proprietary hollow-fiber bioreactor system (not~~ shown). ~~During~~according ~~culture, supernatant (containing idiotype) is collected until sufficient amounts have been produced~~ to ~~yield~~their ~~adequate~~study ~~dosage~~group of ~~vaccine.~~Id-KLH+GM-CSF ~~This~~(N ~~supernatant~~= ~~is purified by affinity chromatography and conjugated (bonded~~118) toor KLH+GM-CSF ~~carrier~~(N ~~protein,~~= ~~resulting in a finished vaccine that can be shipped and administered to patients~~59). In ~~the~~The ~~Phase~~number 3of ~~clinical~~events, ~~trial~~median, ~~manufacturing~~and ~~success was approximately~~ 95% ofconfidence ~~treated~~intervals ~~patients.~~for ~~(Fig.~~each ~~reprinted~~group ~~from~~are ~~Neelapu, et al~~also presented. ~~Exp. Opin Biol Ther 2007).~~

~~Figure~~22 ~~11b: Hollow-fiber perfusion to produce the cell cultures used in the manufacture of BiovaxID.~~

31Table of Contents

~~Biovest~~At ~~uses~~the a2009 ~~method~~annual ~~known~~meeting asof ~~“hollow-fiber~~ASCO, ~~perfusion”~~Biovest tofurther ~~produce~~reported the ~~cell~~median ~~cultures~~DFS ~~used~~data infor the patients who ~~manufacture~~received ofat least one vaccination either with BiovaxID ~~(see Figure 11b)~~or control. ~~Hollow-fiber~~In ~~perfusion,~~this ascohort ~~compared~~of to117 ~~other~~patients ~~cell~~they ~~culture~~represent ~~methods,~~a ~~seeks~~modified intent-to-treat ~~grow~~population, ~~cells~~median toDFS ~~higher~~was ~~densities~~13.6 ~~more~~months ~~closely~~longer ~~approaching~~in ~~the~~patients ~~density~~who ofreceived ~~cells~~BiovaxID ~~naturally~~compared ~~occurring~~to inpatients ~~body~~who received ~~tissue~~control. ~~The hollow-fiber~~This ~~perfusion~~analysis ~~method~~reflects ~~involves~~the ~~using~~prospectively ~~hair-like~~defined ~~plastic~~primary ~~fibers~~clinical ~~with~~trial ~~hollow~~objective. ~~centers~~Accordingly, ~~which~~there ~~are~~were ~~intended~~60 topatients ~~simulate~~who ~~human~~were ~~capillaries.~~randomized ~~Thousands~~but ofwho ~~these~~did ~~fibers~~not ~~are~~receive ~~inserted~~either inBiovaxID aor ~~cartridge,~~control ~~which~~and wewho ~~refer~~are tonot asincluded ain ~~bioreactor~~this analysis. ~~The~~Of ~~cells~~these ~~are~~117 ~~grown on~~treated ~~the~~patients, ~~outside~~76 ofpatients ~~the~~received ~~hollow~~at ~~fibers~~least ~~while~~one ~~nutrient~~dose ~~media~~of ~~used~~BiovaxID to(the “BiovaxID ~~support~~Arm”) ~~cell~~and ~~growth~~41 ispatients ~~delivered~~received ~~through~~at ~~the~~least ~~hollow~~one ~~centers~~dose of control (the ~~fibers~~“Control Arm”). ~~The~~No ~~fiber~~serious ~~walls~~adverse ~~have~~events ~~small~~were reported ~~pores,~~in ~~allowing~~either ~~nutrients~~the toBiovaxID ~~pass~~Arm ~~from~~or the ~~hollow~~Control ~~center~~Arm. toAt the ~~cells~~median follow-up of 56.6 ~~The~~months ~~fibers act~~(range as12.6-89.3 ~~filters~~months), ~~and~~a ~~yield~~statistically ~~concentrated~~significant ~~secreted~~improvement ~~products~~of 13.6 months ~~Because~~was ~~the~~observed ~~cells~~in ~~are~~DFS ~~immobilized~~between patients in the ~~bioreactor~~BiovaxID Arm (44.2 months), versus the ~~concentrated~~Control ~~product~~Arm ~~can~~(30.6 bemonths) ~~harvested~~(log-rank ~~during~~p-value ~~the~~= ~~ongoing~~0.045; ~~cell~~HR ~~growth~~= ~~process~~1.6). ~~Biovest~~Using ~~believes~~a ~~that~~Cox ~~hollow~~proportional-~~fiber~~hazard ~~technology~~model, ~~permits~~a ~~the harvest~~statistically ofsignificant ~~cell~~hazard ~~culture~~ratio ~~products~~(HR) ~~with~~of ~~generally~~0.62 ~~higher~~was ~~purities~~achieved ~~than~~(p=0.048; ~~stirred-tank~~95% ~~fermentation~~CI: 0.39, a0.99). ~~common~~This ~~alternative~~means ~~cell~~that patients ~~culture~~receiving ~~method,~~BiovaxID ~~thereby~~experienced ~~reducing~~an ~~the~~approximately ~~cost~~61% (1/0.62) lower risk of ~~purification~~cancer asrecurrence compared to ~~stirred~~patients ~~tank~~who ~~fermentation.~~received ~~Additionally,~~ the ~~technology~~ ~~associated~~control ~~with~~vaccine. ~~the~~The ~~hollow-fiber~~Phase ~~process~~3 ~~generally~~clinical ~~minimizes~~trial’s ~~the~~secondary ~~amount~~endpoint of ~~costly~~OS ~~nutrient~~has ~~media~~not ~~required~~yet ~~for~~been ~~cell~~reached ~~growth~~for either asgroup ~~opposed~~due to ~~other~~the ~~cell~~length ~~culturing~~of ~~techniques~~follow-up to date.

LOGO

~~After~~Figure ~~manufacture~~6. ~~and~~Disease-free ~~purification,~~survival ~~the~~(DFS) ~~resulting~~according ~~purified~~to ~~idiotype~~study isgroup ~~then~~for ~~conjugated,~~the orRandomized ~~joined~~Patients ~~together,~~who received ~~with~~blinded ~~KLH,~~vaccinations to(N ~~create~~= ~~the vaccine~~117). ~~KLH~~Kaplan-Meier isactuarial acurves ~~foreign~~for ~~carrier~~DFS ~~protein~~for ~~that is used to improve~~ the ~~immunogenicity,~~ orRandomized ~~ability~~Patients towho ~~evoke~~received anat ~~immune~~least ~~response,~~one dose of the ~~tumor~~Id-~~specific~~KLH+GM-CSF ~~idiotype.~~(N ~~The~~= ~~BiovaxID~~76) ~~vaccine~~or isKLH+GM-CSF ~~then~~(N ~~frozen~~= ~~and~~41) ~~shipped~~are ~~to the treating physician~~shown. AtThe ~~the~~number ~~treating~~of ~~physician’s~~events, ~~office~~median, ~~the~~and ~~vaccine~~95% confidence isintervals ~~thawed~~for ~~and~~each ~~injected~~group ~~into~~are ~~the patient~~also presented.

~~The~~23 BiovaxID vaccine is administered in conjunction with GM-CSF, a natural immune system growth factor that is administered with the idiotype vaccine to stimulate the immune system and increase the response to the idiotype vaccine. In the Phase 2 and Phase 3 clinical trials patients were administered 5 monthly BiovaxID injections in the amount of 0.5 milligram of idiotype per injection, with the injections being given over a 6-month period of time in which the fifth month is skipped. Through this process, the patient-specific idiotype is used to stimulate the patient’s immune system into targeting and destroying malignant B-cells bearing the same idiotype.

BiovestTable estimates that an average of 3 months is required to manufacture each vaccine, which for most patients may overlap the time period when induction chemotherapy is being administered. While the manufacturing process for the BiovaxID vaccine is highly personalized to each patient, Biovest considers it to be highly controlled and predictable. The most common reason for a failure to successfully produce a patient’s vaccine was the presence of rare idiotype variants as opposed to the failure of a step in the manufacturing process. During the Phase 3 clinical trial, Biovest experienced approximately 95% success rate in manufacturing vaccines. Contents

~~Manufacturing~~Analysis ~~Facility~~of Patients by Isotype. A typical antibody (“immunoglobulin”), including the lymphoma immunoglobulin expressed on the surface of each cancerous lymphoma cell, is composed of protein “heavy chains” and “light chains”. In humans, the heavy chains are classified as IgG, IgM, IgA, IgD and IgE, and the light chains are classified as either kappa or lambda. The Id protein expressed on the surface of FL cells is characteristic of the single B-cell from which the tumor arose. The immunoglobulin protein contains a region known as the “heavy chain” and a region known as the “light chain” (see Figure 7). Almost always in FL, the heavy chain region is characterized as either an IgM-isotype or an IgG-isotype. Figure 7 illustrates the dramatic differences in the structure of immunoglobulin protein characterized as an IgM-isotype as opposed that characterized as an IgG-isotype. Accordingly, an antibody may be referred to as IgG-isotype or IgM-isotype depending on its heavy-chain classification. In the normal immune response, antibody isotypes may have different roles and may help direct the appropriate immune response. The small region at the tip of the antibody is known as the “variable region”, or antibody binding site, and the balance of the isotype is known as the “constant region”. When Biovest manufactures BiovaxID, Biovest screens each patient’s tumor cells obtained by biopsy for the isotype. Approximately, 60% of patients with FL are diagnosed with tumors expressing an IgM isotype and approximately 40% of patients bear tumors expressing an IgG isotype. In rare cases (<1%), patients are diagnosed with another isotype (e.g. IgA). Infrequently, the patient’s tumor also contains cells with one or more isotype (a heterogenous or “mixed” isotype); in these patients Biovest selects either an IgG or IgM isotype for manufacture of BiovaxID. Each patient’s tumor isotype can be readily determined by standard analytical techniques (flow cytometry) at the time of the patient’s tumor biopsy. In both the Phase 2 and Phase 3 clinical trials in FL patients, the determination of tumor heavy-chain isotype determined the specific manufacturing and purification process used to make that patient’s vaccine. For patients who have tumors expressing an IgG (or an IgG-containing “mixed” isotype), Biovest manufactures an IgG isotype vaccine and for patients determined to have tumors expressing an IgM (or an IgM-containing “mixed” isotype), Biovest manufactures an IgM vaccine. Due to Biovest’s manufacturing process (rescue fusion hybridoma), the isotype (IgG or IgM) of the tumor is entirely reproduced in each patient’s vaccine so that each patient’s BiovaxID vaccine matches the patient’s original tumor isotype (IgG or IgM).

LOGO

~~BiovaxID®~~ Figure is7. aThe ~~personalized~~Id ~~medicine~~protein ~~which~~expressed ~~is produced separately for each individual patient through a laboratory process based~~ on the ~~patient’s~~surface ~~own~~of ~~tumor~~FL cells derived by biopsy. Following regulatory approval of BiovaxID, Biovest plans to initially produce BiovaxID in Biovest’s existing leasehold space located in Minneapolis (Coon Rapids), Minnesota. In order to facilitate the regulatory process, Biovest has completed a dedicated suite of laboratory clean rooms especially designed to produce BiovaxID. As the regulatory process advances toward completion, Biovest anticipates expanding its current lease hold space or adding new manufacturing facilities as required to meet Biovest’s anticipated commercialization requirements. During the Phase 3 clinical trial, BiovaxID was produced at Biovest’s facility in Worcester, Massachusetts. Because Biovest has relocated the site of the manufacturing process to its Minneapolis (Coon Rapids) facility following the clinical trials and because Biovest is ~~expanding~~an ~~that~~immunoglobulin ~~facility, Biovest is currently in the process of attempting to demonstrate to the FDA that the product under these new conditions is comparable to the product that was the subject of earlier~~protein ~~clinical~~characteristic ~~testing. This requirement will also apply to future expansions~~ of the ~~manufacturing~~single ~~facility,~~B-cell ~~such~~from aswhich the ~~possible~~tumor ~~expansion to additional facilities that may be required for successful commercialization of BiovaxID~~arose. There is also a requirement for validation of the manufacturing process for BiovaxID utilizing our AutovaxID® instrument. A showing of comparability requires data demonstrating that the product continues to be safe, pure, and potent and may be based on chemical, physical, and biological assays and, in some cases, other non-clinical data.

3224

InstrumentsTable andof Disposables Contents

~~Biovest~~Preclinical ~~sells~~data ~~hollow~~indicates that the ability to develop an immune response differs between IgM-~~fiber~~isotype ~~perfusion~~and IgG-isotype ~~instruments~~idiotypes; ~~used~~however, ~~for~~we do not currently have immune response data from human clinical trials to confirm this preclinical data. The IgG-isotype idiotype was reported to be tolerogenic, meaning that the ~~production~~immune response against the specific tumor target is suppressed. On the other hand, the IgM-isotype idiotype was reported to be highly immunogenic, meaning that it induces an ample, persistent immune response against the specific tumor target. The unique feature of ~~significant~~Biovest’s ~~quantities~~Phase 3 clinical trial was the manufacturing and administration of ~~cell~~tumor-matched ~~culture~~isotype ~~products.~~idiotype ~~This~~vaccines ~~product~~which, ~~line~~allowed ~~includes:~~Biovest to investigate whether these preclinical data translate into differential clinical efficacy of the two isotype vaccines in its clinical trial.

~~AUTOVAXID®:~~In ~~The~~an ~~AutovaxID~~unplanned ~~is a fully automated~~analysis, ~~reusable~~Biovest ~~instrument~~compared ~~that~~DFS ~~employs~~of ~~a fully disposable, closed~~Id-~~system~~vaccinated ~~cell-growth~~patients ~~chamber~~with ~~incorporating~~control apatients ~~hollow-fiber cell-growth~~by ~~cartridge.~~tumor ~~Since~~Ig itisotype is analysis ~~fully~~was ~~enclosed,~~highly ~~computer~~consistent ~~controlled~~with ~~and~~the ~~automated~~manufacturing process, ~~AutovaxID~~which requires ~~limited~~isotype ~~supervision~~identification ~~and~~prior ~~manpower~~ to ~~operate~~initiation ~~compared to manual instruments. AutovaxID is suitable for growing antibody-secreting cell lines, including hybridomas and Chinese hamster ovary (CHO) cells which are among the leading kinds~~ of ~~cell~~vaccine ~~lines used for commercial therapeutic protein~~ manufacture. Wedue ~~plan~~ to ~~utilize~~ the ~~AutovaxID~~need ~~technology~~for toisotype ~~streamline~~specific ~~commercial manufacture of our proprietary anti-cancer~~ vaccine, ~~BiovaxID®~~purification. ~~AutovaxID~~To isaddress ~~the~~whether ~~first~~there ~~cell~~was ~~culture~~a ~~system that enables production~~differential oftreatment ~~personalized~~effect ~~cell-based~~on ~~treatments~~DFS ~~economically~~depending ~~and~~on inIg ~~compliance~~isotype, ~~with~~Biovest ~~U.S.~~used ~~Food~~Cox ~~and~~proportional ~~Drug~~hazards ~~Administration~~modeling ~~Good~~where ~~Manufacturing~~the ~~Practices~~interaction ~~(“GMPs”).~~term Webetween ~~are~~treatment ~~collaborating~~and ~~with~~Ig ~~the~~isotype ~~U.S.~~was ~~Department~~estimated ofadjusting ~~Defense~~for ~~(“DoD”)~~main toeffect ~~further develop AutovaxID~~ and tofor ~~explore~~International ~~potential~~PrognosticIndex ~~production~~and number of chemotherapy ~~additional~~cycles ~~vaccines, including vaccines for viral indications such~~ as ~~influenza~~covariates.

~~PRIMER~~Biovest ~~HF®:~~also ~~The~~analyzed ~~Primer~~DFS HFof isvaccinated apatients ~~low~~by ~~cost~~tumor ~~hollow~~Ig heavy and light chain isotypes. For IgM and IgG heavy chain isotype groups, there were no statistically significant differences in baseline patient characteristics between experimental and control arms (IgM isotype, N= 35 vs N= 25; IgG-~~fiber~~isotype, N= 40 vs. N= 15 for Id-vaccine and control arms, ~~cell~~respectively). ~~culture~~In ~~system~~patients ~~capable~~presenting ofwith ~~producing~~an ~~small~~IgM ~~quantities~~tumor ofisotype ~~monoclonal~~and ~~antibody~~receiving an IgM-Id vaccine, median time to relapse after randomization was 52.9 ~~This~~months ~~system~~versus ~~also~~28.7 months ~~provides~~in aIgM ~~relatively~~tumor ~~inexpensive~~isotype ~~option~~control-treated patients (P= 0.001) and 30.6 months in all controls (Figure 7). Among patients receiving IgG-Id vaccine, median time to ~~evaluate~~relapse ~~the~~after ~~efficacy~~randomization ofwas ~~new~~35.1 ~~cell~~months ~~lines~~versus 32.4 months in ~~perfusion~~IgG ~~technology~~tumor isotype control-treated patients (P= 0.807) (Figure 8). Cox proportional hazard modeling supports an interaction between treatment arm and Ig isotype (P=0.039). When patients were grouped by light chain type, there was no difference in DFS (data not shown).

LOGO

~~MINI MAX®:~~Figure ~~The miniMax provides the flexibility and technology needed to support optimization studies and research scale production of mammalian cell secreted proteins~~8. ~~The~~Disease ~~miniMax~~free issurvival anin ~~automated~~IgM ~~cell~~isotype ~~culture~~patients system, a table-top unit complete with microprocessor controller, self-contained incubator, and pump panel. The miniMax is an economical tool for researching scale-up processes and producing small quantities of protein of up to 10 grams per month.

~~MAXIMIZER®:~~25 The Maximizer provides maximum flexibility to support optimization studies and pilot scale production of mammalian cell secreted proteins. The Maximizer is an automated cell culture system, a table-top unit complete with validated microprocessor controller, self-contained incubator, and pump panel. With production rates up to one gram a day, the Maximizer is a tool for process development and production.

XCELLERATOR™:Table The XCellerator is a self-standing floor system containing an incubator and refrigerator section, control fixtures and pump panel. Each Xcellerator supports two independent flowpaths, is controlled by a process control computer and has the capability of remote monitoring. The combined features of the XCellerator support production of 60-500 grams of protein per month, per XCellerator unit. Contents

LOGO

~~MULTI-6™:~~Figure ~~The Multi-6 is a low–cost cell culture system capable of simultaneously producing six monoclonal antibodies (or other secreted proteins) at up to 1 gm/month each or a single mAb at up to 6 gm/month~~9. ~~Multi-6~~Disease isfree ~~also~~survival ~~useful to simultaneously evaluate multiple cell lines or media formulations before scaling up to our larger AutovaxID or other systems. Like the Primer HF, Multi-6 requires no investment~~ in ~~custom~~IgG ~~equipment~~isotype ~~and~~patients ~~supports culturing a variety of suspension and adherent cell lines.~~

InBiovest’s ~~addition~~Phase to3 ~~instrument~~clinical ~~sales~~trial had two unique manufacturing features, ~~Biovest~~where ~~has~~(a) the ~~recurring~~vaccine ~~revenue~~consists ~~from~~of the ~~sale~~full structure of ~~hollow-fiber~~the ~~bioreactors,~~idiotype protein ~~cultureware~~(that is, ~~tubing~~both ~~sets~~the variable and ~~other~~the ~~disposable products~~constant regions of the immunoglobulin) and ~~supplies~~(b) the ~~for~~idiotype ~~use~~of ~~with~~the vaccine matches the idiotype of the patient’s own tumor. These unique features allowed Biovest to be the first to investigate the clinical efficacy implications of the two tumor isotypes. The prior Phase 3 clinical trials of FL idiotype vaccines conducted by Genitope Corporation and Favrille, Inc. used a manufacturing process known as recombinant manufacturing that universally linked the patient’s ~~instrument~~variable ~~production~~region ~~lines~~of the idiotype into an IgG isotype without regard to the actual isotype of each patient’s tumor. ~~Revenues~~Biovest ~~from~~believes ~~such~~that ~~disposable~~the ~~products~~use ~~represented~~of ~~approximately~~an ~~36%~~IgG isotype was due to the comparative ease of manufacture ~~our~~and ~~total~~purification ~~revenue~~of ~~from~~IgG ~~this~~proteins, ~~business~~as ~~for~~well ~~both~~as to their relatively long half-life. There are two implications of the ~~fiscal~~manufacturing ~~years~~processes ~~ended~~used ~~September~~by these prior clinical trials: (1) ~~30,~~clinical ~~2011~~efficacy cannot be compared by isotype group; and (2) the lack of clinical efficacy observed in these clinical trials may be due to the tolerogenic effect of the universal IgG isotype used in the vaccine manufacturing. As such, Biovest believes that its analysis by tumor isotype may ~~2010~~provide profound insight into the efficacy of BiovaxID and may also suggest methods by which cancer vaccines in general could be developed in the future.

~~Currently,~~26 Biovest assembles, validates and packages the instruments and disposables which Biovest sells. Customers for Biovest’s instruments and disposables are the same potential customers targeted for its contract production services which include biopharmaceutical and biotechnology companies, medical schools, universities, research facilities, hospitals and public and private laboratories.

33Table of Contents

~~Cell~~BiovaxID™ ~~Culture~~Regulatory ~~Products~~ and ~~Services~~Marketing Status

Under Biovest’s ~~manufactures~~IND ~~mammalian~~for ~~cell~~BiovaxID, ~~culture~~two ~~products~~Phase ~~such~~2 ~~as,~~clinical ~~whole~~trials ~~cells, recombinant~~ and ~~secreted~~one ~~proteins,~~Phase ~~and~~3 ~~monoclonal~~clinical ~~antibodies.~~trial ~~Additionally,~~have ~~Biovest~~been ~~provides~~completed ~~related~~studying ~~services~~BiovaxID asfor athe ~~contract~~indication ~~resource~~of toFL ~~assist~~and ~~customers~~MCL. inBiovaxID ~~developing~~has ~~cell~~demonstrated ~~production~~statistically ~~process~~significant ~~protocols,~~Phase ~~cell~~3 ~~line~~clinical ~~optimization,~~benefit ~~cell~~by ~~culture~~prolonging ~~production~~disease-free ~~optimization,~~survival ~~media~~in ~~evaluation~~FL ~~and~~patients ~~other~~treated ~~related~~with ~~services.~~BiovaxID ~~This~~compared ~~component~~to ofvaccinated controls. Biovest’s ~~business~~believes ~~represented approximately~~that ~~$1.3~~these ~~million~~clinical ~~(approximately~~trials demonstrate ~~33%)~~the safety and ~~$1.2~~efficacy ~~million~~of ~~(approximately~~BiovaxID ~~22%)~~and inBiovest ~~revenues~~has ~~for~~presented comprehensive summaries of the ~~fiscal~~clinical ~~years~~development ~~ended~~and ~~September 30~~clinical data to regulatory authorities in the EU, ~~2011~~Canada and ~~2010,~~the ~~respectively~~U.S.

~~Customers~~Based ~~include~~on ~~biopharmaceutical~~Biovest’s ~~and~~scientific ~~biotechnology~~advice ~~companies~~meetings with multiple EU-Member national medicines agencies, ~~medical~~on ~~schools~~June 13, ~~universities~~2012, ~~research~~Biovest ~~facilities~~filed its formal notice of intent to file a MAA with the EMA, ~~hospitals~~which ~~and~~begins ~~public~~the ~~and~~EU ~~private~~marketing ~~laboratories~~approval application process. In response to Biovest’s ~~generally~~notice ~~produces~~of ~~cell~~intent ~~culture products~~to ~~pursuant~~file for marketing approval, the EMA notified Biovest that Biovest is eligible to ~~contracts~~submit its ~~which~~planned ~~specify~~MAA for BiovaxID under the ~~customer~~EMA’s ~~requirements~~centralized procedure, as an orphan medicinal product for the ~~cell~~treatment ~~culture~~of ~~products~~FL. toUnder the EMA centralized procedure, the marketing approval of BiovaxID can be ~~produced~~simultaneously orobtained throughout all EU-member countries with a single MAA. Also, as part of the ~~services~~EMA’s tocentralized procedure, Biovest’s planned MAA for BiovaxID will be ~~performed~~assessed by the EMA’s Committee for Medicinal Products for Human Use (“CHMP”), which designates from within its membership, a Rapporteur and Co-Rapporteur, as well as a Pharmacovigilance Risk Assessment Committee (“PRAC”) Rapporteur and Co-Rapporteur. The Rapporteur and Co-Rapporteur are assigned with the primary responsibility of preparing and delivering an approvability evaluation report, supported by a team of assessors from their National Authority. In 2012, the PRAC Rapporteur and Co-Rapporteur was implemented after the latest revisions to the EMA safety requirements on Pharmacovigilance and Risk Assessment Plan, with the primary responsibility of preparing and delivering an approvability evaluation report specifically with regards to safety. The EMA has also notified Biovest regarding the EMA’s official designation of the Rapporteur and Co-Rapporteu, and PRAC Rapporteur and Co-Rapporteur to our planned MAA for BiovaxID. Biovest conducted its EMA Pre-submission Meeting for the MAA on September 12, 2012, during which Biovest’s planned application dossier was validated. Biovest could receive a decision regarding EU marketing approval for BiovaxID within 12 months after the submission of Biovest’s MAA, assuming the that rigorous review process advances forward in a timely and positive manner and no substantial regulatory issues or problems are encountered.

~~There~~Additionally, ~~are~~based ~~various~~on ~~processes~~a ~~commonly~~scientific advice ~~used~~meeting toconducted ~~produce~~with ~~mammalian~~Health ~~cells generally used in the production of antibodies. These may include hollow-fiber bioreactor perfusion~~Canada, ~~stirred tank fermentation, roller bottle and other processes.~~ Biovest ~~primarily~~has ~~uses~~announced ~~hollow-fiber~~plans ~~bioreactor technology~~ to ~~expand~~file ~~customer~~a ~~provided~~NDS ~~cell~~seeking ~~lines~~marketing ~~and~~approval ~~produce~~in ~~the respective monoclonal antibodies~~Canada. ~~This technology grows cells to higher densities which more closely mimics mammalian physiology.~~ Biovest ~~has~~could ~~significant~~receive ~~expertise~~a ~~with~~decision inregarding ~~vitro~~Canadian ~~(outside~~marketing ~~the~~approval ~~living body) cell culture methods~~ for aBiovaxID ~~wide~~within ~~variety~~12 months ofafter ~~mammalian cells. Mammalian cells are complicated and dynamic, with constantly changing needs. A primary~~the ~~component~~submission of ~~hollow-fiber~~Biovest’s ~~bioreactors~~NDS, isassuming ~~fibers~~that ~~made~~the ofrigorous ~~plastic~~review ~~polymers.~~process ~~The~~advances ~~fibers~~forward ~~are hair-like with hollow centers which simulate human capillaries. Thousands of these fibers are inserted~~ in a ~~cartridge,~~timely ~~which~~and wepositive ~~refer~~manner to as a bioreactor. The cells are grown on the outside of the hollow fibers while nutrient media used to support cell growth is perfused through the lumen of the fibers. The fiber walls have small pores, allowing nutrients to pass from the hollow center to the cells. The fibers act as filters and ~~yield~~no ~~concentrated~~substantial ~~secreted~~regulatory ~~products.~~issues ~~Because~~or ~~the~~problems ~~cells~~ are ~~immobilized in the bioreactor, the concentrated product can be harvested during the on-going cell growth process~~encountered. Hollow-fiber technology permits harvests of cell culture products with generally higher purities thereby reducing the cost of downstream purification processes. This technology generally minimizes the amount of costly nutrient media required for cell growth.

~~The~~Biovest ~~most~~conducted ~~generally~~a ~~used~~formal ~~process~~clinical ~~for~~meeting ~~mammalian~~with ~~cell~~the ~~production~~FDA isin ~~stirred~~order ~~tank~~to ~~fermentation.~~define ~~Hollow-fiber bioreactor technology can be contrasted with~~ the ~~competitive~~path ~~stirred~~for ~~tank~~BiovaxID’s ~~fermentation~~filing ~~process~~of ~~which~~a ~~takes~~BLA ~~place~~for inBiovaxID’s ~~tanks~~U.S. ofregulatory/marketing ~~various sizes~~approval. ~~Cells~~Further ~~are~~in ~~grown~~its ~~inside~~ guidance, the ~~tanks~~FDA inrequired ~~culture~~that ~~medium~~Biovest ~~which~~conduct isa ~~maintained~~second ~~under~~Phase ~~controlled~~3 ~~conditions~~clinical ~~and~~trial ~~continuously stirred~~ to ~~stimulate growth.~~complete At the ~~end~~clinical ofdata ~~the~~gained ~~growing~~through ~~process,~~Biovest’s asfirst ~~opposed~~Phase to3 ~~incrementally~~clinical ~~during~~trial ~~the growth process, cells are separated from the medium~~ and ~~the~~Biovest’s ~~protein~~BiovaxID ofdevelopment ~~interest~~program isto ~~isolated~~support ~~through~~its afiling ~~series~~ of ~~complex purification processes. The size of~~ the ~~tanks~~BLAfor ~~generally~~BiovaxID. ~~result~~Biovest inis ~~stirred~~preparing, ~~tank~~subject ~~fermentation~~to ~~facilities~~required ~~requiring~~funding, ~~significantly~~to ~~more~~initiate ~~start-up~~this ~~costs,~~second ~~space~~Phase ~~and~~3 ~~infrastructure~~clinical ~~than~~trial ~~comparable~~to ~~production~~advance ~~facilities~~BiovaxID ~~using~~toward ~~hollow-fiber~~the ~~technology~~U.S. ~~While~~market. ~~stirred~~Concurrent ~~tank~~with ~~fermentation~~complying ~~and~~with ~~hollow~~the ~~fiber technology~~FDA’s ~~are both used for cell production of various quantities~~guidance, Biovest ~~believes~~plans ~~that~~to ~~the~~continue ~~stirred~~to ~~tank~~advance marketing ~~fermentation~~and ~~process~~regulatory isapprovals ~~currently more commonly used~~ for ~~larger~~BiovaxID ~~scale~~in ~~commercial~~the ~~production~~EU ~~requirements.~~and ~~Biovest~~Canada ~~believes~~with ~~that~~those ~~hollow-fiber technology~~planned ~~has~~filings ~~advantages~~of ina ~~scalability,~~MAA ~~start-up time~~ and ~~cost~~NDS, inrespectively, ~~the~~supported ~~early~~by ~~development~~evidence of ~~antibody~~clinical ~~production.~~benefit Infrom the ~~expanding~~three ~~field~~clinical oftrials ~~personalized~~conducted ~~medicine~~to ~~where~~date ~~patient~~in ~~specific~~collaboration ~~drugs~~with ~~and therapeutics are frequently envisioned, such as Biovest’s personalized vaccine, BiovaxID®, Biovest believes that hollow-fiber technology may be~~ the ~~appropriate~~ ~~cell culture production technology~~NCI.

~~CONSULTING~~As ~~SERVICES~~Biovest -continues ~~ANALYTICA~~to ~~INTERNATIONAL~~advance its efforts to comply with various regulatory validations and comparability requirements related to its manufacturing process and facility, ~~INC.~~no assurances can be given that substantial additional requirements will not be imposed by any regulatory agencies, including the EMA, Health Canada, and the FDA for the regulatory/marketing approval of BiovaxID.

InSubsequent ~~December~~regulatory/marketing ~~15,~~approval ~~2011~~of BiovaxID, weif ~~closed on the definitive agreement~~any, ~~selling~~may ~~all~~require ofBiovest ~~the~~to ~~assets~~perform ~~and~~additional ~~business~~clinical ofstudies ~~our~~as ~~wholly-owned~~a ~~subsidiary,~~condition ~~Analytica~~ to a ~~third-party~~approval ~~for~~or upcontinued tomarketing ~~$10~~of ~~million~~BiovaxID, towhich bemay ~~paid~~result in aadditional ~~combination~~clinical oftrial ~~$4 million in fixed payments and $6 million in contingent payments~~expenses. ~~Since~~Once ~~1991~~received, ~~Analytica,~~there ~~has~~can ~~provided~~be ano ~~broad~~assurances ~~range~~that ofBiovest ~~consulting~~will ~~services~~receive ~~through~~continued ~~its~~regulatory/marketing ~~offices~~approval. Biovest’s inability ~~New~~to ~~York and Germany~~timely toaccess ~~companies~~required ~~and~~financing ~~institutions~~will incontinue ~~the~~to ~~pharmaceutical,~~be ~~biotechnology,~~essential ~~and medical markets, including some of the world’s largest pharmaceutical companies. Analytica provides these services~~ to ~~clients~~support ~~throughout~~ the ~~world,~~ongoing ~~and we also utilize these services for our own product development~~ efforts ~~in order~~ to, ~~among~~pursue ~~other things, evaluate and analyze~~ the ~~market~~development and potential ~~pricing~~regulatory/marketing ofapproval ~~our product candidates. Analytica’s development and commercialization services include outcomes research on the economic profiles~~ of ~~pharmaceuticals and biologics, pricing and market assessment on these products, and various services designed to expedite clinical trials~~BiovaxID. ~~We also use these services to evaluate the payor reimbursement prospects of our products and to develop reimbursement strategies.~~

3427

SINUNASAL™Table LAVAGEof SYSTEM Contents

~~The~~Proprietary ~~SinuNasal™~~Rights ~~Lavage System (“SinuNasal”) is being developed by us as a medical device for the treatment of patients with refractory, post-surgical chronic sinusitis, also sometimes referred~~ to asBiovaxID™ chronic rhinosinusitis, and upon clearance or approval with the FDA, we intend to market this device under the name SinuNasal. SinuNasal is believed to provide benefit by delivering a proprietary buffered irrigation solution (patent pendng) to mechanically flush the nasal passages to improve the symptoms of refractory chronic sinusitis patients post-surgery.

~~SinuNasal™~~As ~~Market~~a ~~Opportunity~~result of the FDA’s Orphan Drug designation of BiovaxID for the treatment of FL, MCL and Waldenstrom’s Macroglobulinemia, a rare B-cell subtype of NHL, Biovest has 7 years of market exclusivity in the U.S. from the date of the FDA’s marketing approval for these three B-cell subtypes of NHL. Biovest also has 10 years of market exclusivity in the EU as a result of the EMA’s Orphan Medicinal Product designation of BiovaxID for the treatment of FL and MCL.

~~Chronic~~In ~~sinusitis~~addition, ~~is one of~~ the ~~more~~regulations ~~prevalent~~adopted ~~chronic illnesses~~ in both the U.S., ~~affecting~~and ~~persons~~the ofEU ~~all~~governing ~~age groups. The overall prevalence of chronic sinusitis (~~“CSbiosimilar”) products in (the ~~U.S.is~~term ~~146 per~~adopted ~~1,000~~to ~~population,~~describe ~~with~~generic ~~approximately~~biologic ~~31 million~~pharmaceutical ~~Americans~~products) ~~suffering~~provide ~~from~~Biovest ~~rhinosinusitis~~with ~~every~~“data ~~year,~~exclusivity” ~~and an estimated 90% of these cases being chronic~~(i. ~~For unknown reasons~~e., ~~the~~no ~~incidence~~biosimilar ~~of this~~could ~~disease~~reference ~~appears~~the toBiovaxID beclinical ~~increasing~~data) ~~yearly.~~for ~~This results in a conservative estimate of 18-22~~12 ~~million~~years ~~physician visits~~ in the U.S. ~~each year~~ and a8 ~~direct~~years ~~treatment~~in ~~cost of $3 to $4.5 billion annually. CS is~~ the ~~fifth most common disease~~ ~~treated with antibiotics, and up to 64% of patients with AIDS develop CS~~EU. Those ~~The~~same ~~lack~~biosimilar ofregulations anmake ~~effective~~it ~~treatment~~extremely ~~for~~difficult ~~CS has historically been due~~ to anqualify ~~inability~~as ofa ~~the~~“biosimilar”, ~~medical~~and ~~community~~even tofor ~~identify~~those ~~the~~products ~~underlying~~which ~~cause~~can ofclear ~~the~~that ~~condition. Due to lack of knowledge regarding the cause of CS~~hurdle, ~~most~~independent ~~treatment~~clinical ~~methods~~data ~~for~~is CSrequired ~~have~~prior ~~focused~~to ~~only on the symptoms of the disease~~licensure.

~~Historically~~In addition to market exclusivity based on governmental regulation, ~~the treatment~~Biovest relies on proprietary rights provided by a combination of CSan ~~has~~exclusive world-wide ~~largely~~license ~~focused~~to onthe cell line that is used in the ~~use~~production of ~~antibiotics~~BiovaxID, ~~intranasal~~patent orprotection, ~~orally~~trade ~~administered~~secret ~~corticosteroids~~protection, and ~~sinus~~our ~~surgery~~ongoing innovation. ~~While~~Although ~~antibiotics~~the ~~are~~composition ~~useful~~of BiovaxID, in ~~treating~~its ~~the~~current ~~acute~~form, ~~exacerbations~~is ~~that~~not ~~result~~patentable, ~~from~~Biovest ~~the~~has ~~bacterial~~filed U.S. ~~invasion~~and foreign patent applications relating to methods of ~~the~~treatment using BiovaxID. Biovest has also filed an international patent application (“PCT”) and a provisional application relating to methods for producing and selecting idiotype ~~damaged~~vaccines ~~paranasal~~for ~~tissue~~treatment of CSB-cell ~~patients~~cancers. Also, noBiovest ~~antibiotic~~ has ~~proven~~filed ~~effective~~a inprovisional ~~eradicating~~application covering the ~~underlying~~use ~~cause~~ of ~~CS.~~a ~~Intranasal~~biomarker for predicting cancer vaccine effectiveness and ~~orally~~patient ~~administered~~outcomes. In ~~corticosteroids~~addition, ~~which~~Biovest ~~are~~has ~~potent~~filed ~~anti-inflammatory~~U.S. ~~hormones,~~and ~~have~~foreign ~~been~~patent applications ~~used~~relating to ~~reduce~~certain features of the ~~inflammation~~ ~~and~~AutovaxID® ~~immune~~instrument ~~response~~used ~~that~~in ~~play~~the aproduction ~~role~~of inBiovaxID. ~~CS,~~The ~~but~~AutovaxID ~~oral~~instrument ~~corticosteroids~~is ~~can~~Biovest’s ~~cause~~proprietary ~~serious~~production ~~side~~system ~~effects~~which is fully enclosed, automated and ~~must~~has bedisposable ~~avoided~~components for oreach ~~cautiously~~patient’s ~~used~~personalized ~~with~~vaccine. ~~patients~~Biovest believes that, ~~have~~without ~~certain~~the ~~conditions,~~availability ~~such~~of asan ~~gastrointestinal~~automated ~~ulcers~~production system, ~~renal~~the ~~disease, hypertension,~~methods ~~diabetes,~~used ~~osteoporosis,~~to ~~thyroid~~produce ~~disorders,~~a ~~and~~patient-specific ~~intestinal~~immunotherapy ~~disease.~~are ~~Surgery~~time-consuming isand ~~frequently~~labor-intensive, ~~used~~resulting in CSa ~~patients~~very expensive process that would be difficult to ~~improve~~scale up. Following the ~~drainage~~findings ofrelated ~~their~~to ~~sinuses~~the ~~based~~apparent onrole of the ~~assumption~~IgM ~~that~~isotype in clinical benefit from the ~~disease~~vaccine, ~~can~~Biovest befiled ~~reversed~~a bybroad ~~identifying~~range ~~and~~of patent applications covering various applications of ~~correcting~~these findings. Biovest has re-filed for U.S. registration of the ~~obstruction~~trademark ~~associated~~BiovaxID™ ~~with~~and has registered BiovaxID® as a Community Trademark in the ~~condition~~EU. BiovaxID is manufactured with a proprietary cell line, ~~but~~which ~~while~~Biovest ~~such~~has licensed ~~surgery~~on ~~usually~~a ~~offers~~worldwide ~~temporary~~exclusive ~~relief~~basis from Stanford University (“Stanford”). Biovest believes that the use of ~~symptoms~~any cell line other than Biovest’s exclusively licensed cell line, ~~studies~~in ~~have~~the ~~shown~~production ~~that~~of ita issimilar ~~typically~~idiotype ~~not~~vaccine ~~curative~~would require filing a separate IND application and undergoing clinical testing evaluation by the FDA.

~~SinuNasal~~BiovaxID™ ~~Development~~Manufacturing ~~Status~~Process and Facility

~~SinuNasal~~Manufacturing isProcess intended to act as a buffered irrigation solution to flush sinus passages in patients with refractory, post-surgical CS and to improve symptoms associated with CS. The device consists of a reusable soft silicone-tipped 35cc plastic syringe and a patent-pending packet of ingredients including powder sodium phosphate buffer, calcium carbonate buffer and a coloring agent. To use SinuNasal, the user reconstitutes 1 packet in water to create a buffered solution of neutral pH (sodium phosphate buffer ~ 2.5%), and administers the solution to each nostril with the soft-tip syringe nozzle two times per day. To administer the solution, the nostril is occluded with the tip of the syringe, the user tilts his/her head to the side being irrigated, and applies gentle pressure to the plunger. The solution immediately flows out of the contralateral, unobstructed nostril and does not remain in the sinus or nasal passages.

~~We believe~~The ~~that~~BiovaxID ~~SinuNasal~~manufacturing ~~should~~production beprocess ~~regulated~~begins bywhen ~~the~~a ~~Center~~sample ~~for~~of ~~Devices~~the ~~and~~patient’s ~~Radiological~~tumor ~~Health~~is asextracted by a ~~prescription~~biopsy ~~medical~~and ~~device~~the ~~for~~sample ~~the~~is ~~treatment~~shipped ofrefrigerated ~~patients~~to ~~with~~Biovest’s ~~refractory,~~facility ~~post-surgical~~in ~~CS.~~Minneapolis (Coon ~~However~~Rapids), inMinnesota. ~~April~~At ~~2010~~its facility, Biovest identifies the ~~Office~~idiotype ofthat ~~Combination~~is ~~Products (“OCP”)~~expressed ~~within~~on the ~~FDA~~surface ~~ruled~~of ~~that~~the ~~SinuNasal~~patient’s istumor ~~not~~cells athrough ~~medical~~laboratory ~~device~~analysis. Additionally, ~~but~~Biovest ~~rather~~identifies whether the isotype is aIgM ~~combination~~or ~~product~~IgG. ~~with~~In aNHL, the ~~drug~~tumor ~~primary~~B-cells ~~mode~~bear ofthe ~~action~~surface ~~requiring~~idiotype ~~regulation~~(immunoglobulin byor antibody) derived from the ~~Center~~original ~~for~~transformed ~~Drug~~malignant ~~Evaluation~~B-cell, ~~and~~but ~~Research.~~do ~~The~~not ~~effect~~typically ofsecrete ~~this~~it ~~OCP determination~~in isan toamount ~~subject~~suitable ~~SinuNasal~~for vaccine production. In order to ~~regulatory~~make ~~requirements~~sufficient asquantities aof idiotype ~~drug~~for ~~product~~vaccination, ~~likely~~the ~~including~~patient’s ~~submission~~tumor ofcells aare ~~NDA,~~then ,fused ~~typically~~with aan ~~much~~exclusively ~~more~~licensed ~~difficult,~~cell ~~lengthy,~~line ~~and~~(mouse/human ~~expensive~~heterohybridoma ~~pathway~~cell toline, ~~market~~K6H6) asfrom ~~compared~~Stanford to ~~clearance~~create ora ~~approval~~hybridoma ofor ahybrid ~~medical device~~cell.

InAfter ~~July~~the ~~2010,~~creation ~~after~~of the ~~OCP~~hybridoma, ~~reconsidered~~Biovest ~~and~~determines ~~affirmed~~which ~~its~~hybridoma ~~decision,~~cells wedisplay ~~appealed~~ the ~~ruling~~same toantigen aidiotype ~~higher~~as ~~office~~the ~~within~~patient’s ~~the~~tumor ~~FDA~~cells, ~~that~~and ~~supervises~~those ~~the~~cells ~~OCP.~~are Inselected ~~March~~to ~~2011,~~produce wethe ~~presented~~vaccine. ~~our~~The ~~case~~selected inhybridoma ancells ~~appeal~~are ~~meeting~~then ~~that~~seeded ~~SinuNasal~~into Biovest’s ~~mechanical~~proprietary ~~mode~~hollow offiber ~~action~~bioreactors, ~~meets~~where ~~the~~they ~~definition~~are ofcultured ~~a medical device~~ and ~~that~~where itthey issecrete ~~not a combination product~~ or, ifproduce itidiotype ~~is,~~antigen. ~~that~~The ~~the~~secreted ~~device mode of~~idiotype ~~action~~ is ~~primary.~~then Oncollected ~~December 1,~~from ~~2011,~~the ~~FDA~~cells ~~issued~~growing ~~its~~in ~~decision upholding~~ the ~~ruling~~hollow offiber ~~the OCP~~bioreactor. WeAfter ~~are~~a ~~now~~sufficient ~~considering~~amount ~~options~~of ~~such~~idiotype asis ~~commencing~~collected afor ~~lawsuit~~the ~~against~~production ~~the~~of ~~FDA~~an ~~seeking~~appropriate ~~reversal~~amount of the ~~OCP~~vaccine, ~~ruling~~the ~~and FDA~~patient’s ~~affirmation~~idiotype ofis ~~that~~purified using multi-step ~~decision~~purification processes (see Figure 10a).

~~There~~28 can be no assurance, however, as to the final outcome. Pending such determination, we are unable to determine the next potential development and/or regulatory steps to advance our SinuNasal product. If the litigation is not successful, our potential future development and commercialization plans for SinuNasal will require greater expense and a longer timeline than would have been the case if device regulation applied, possibly resulting in discontinuation of the project altogether.

35Table of Contents

LOGO

~~COMPETITION~~Figure 10a. Individualized Manufacturing Process for BiovaxID™ Immunotherapy: (Clockwise) Beginning with an excisional (>2cm) lymph node biopsy, tumor cells are fused with Biovest’s proprietary mouse/human heterohybridoma in order to induce secretion of normally surface-bound tumor immunoglobulin (idiotype). Id-secreting clones are identified by comparing their unique idiotype sequence to the tumor’s after which they are cultured (expanded) in a proprietary hollow fiber bioreactor system (not shown). During culture, supernatant (containing idiotype) is collected until sufficient amounts have been produced to yield adequate dosage of vaccine. This supernatant is purified by affinity chromatography and conjugated (bonded) to KLH carrier protein, resulting in a finished vaccine that can be shipped and administered to patients. In Biovest’s Phase 3 clinical trial, manufacturing success was approximately 95% of treated patients. (Fig. reprinted from Neelapu, et al. Exp. Opin Biol Ther 2007).

LOGO

~~Biotechnology~~Figure ~~has experienced, and is expected to continue to experience, rapid and significant change~~10b. ~~The~~Hollow ~~use~~fiber ofperfusion monoclonal antibodies as initial or induction therapy, and increasingly for maintenance therapy, has become well-established and generally accepted. Products that are well-established or accepted, including monoclonal antibodies such as Rituxan®, may constitute significant barriers to ~~market~~produce ~~penetration~~the ~~and~~cell ~~regulatory~~cultures ~~approval~~used ~~which may be expensive, difficult or even impossible to overcome. New developments~~ in ~~biotechnological~~the ~~processes~~manufacture ~~are expected to continue at a rapid pace in both industry and academia, and these developments are likely to result in commercial applications competitive with~~ of BiovaxID®™. We expect to encounter intense competition from a number of companies that offer products in our targeted application area. We anticipate that our competitors in these areas will consist of both well-established and development-stage companies and will include:

•29 ~~healthcare companies;~~

•Table chemicalof and biotechnology companies;Contents

•Biovest ~~biopharmaceutical~~uses ~~companies;~~a method known as “hollow fiber perfusion” to produce the cell cultures used in the manufacture of BiovaxID (see Figure 10b). Hollow fiber perfusion, as compared to other cell culture methods, seeks to grow cells to higher densities more closely approaching the density of cells naturally occurring in body tissue. The hollow fiber perfusion method involves using hair-like plastic fibers with hollow centers which are intended to simulate human capillaries. Thousands of these fibers are inserted in a cartridge, which we refer to as a bioreactor. The cells are grown on the outside of the hollow fibers while nutrient media used to support cell growth is delivered through the hollow centers of the fibers. The fiber walls have small pores, allowing nutrients to pass from the hollow center to the cells. The fibers act as filters and yield concentrated secreted products. Because the cells are immobilized in the bioreactor, the concentrated product can be harvested during the ongoing cell growth process. Biovest believes that hollow fiber technology permits the harvest of cell culture products with generally higher purities than stirred-tank fermentation, a common alternative cell culture method, thereby reducing the cost of purification as compared to stirred tank fermentation. Additionally, the technology associated with the hollow fiber process generally minimizes the amount of costly nutrient media required for cell growth as opposed to other cell culturing techniques.

•After ~~companies~~manufacture ~~developing~~and ~~drug~~purification, ~~discovery~~the ~~technologies~~resulting purified idiotype is then conjugated, or joined together, with KLH, to create the vaccine. KLH is a foreign carrier protein that is used to improve the immunogenicity, or ability to evoke an immune response, of the tumor-specific idiotype. The BiovaxID vaccine is then frozen and shipped to the treating physician. At the treating physician’s office, the vaccine is thawed and injected into the patient.

WeThe ~~expect~~BiovaxID tovaccine ~~compete~~is ~~on,~~administered ~~among~~in ~~other~~conjunction ~~things~~with GM-CSF, a natural immune system growth factor that is administered with the idiotype ~~safety~~vaccine ~~and~~to ~~efficacy~~stimulate ofthe ~~our~~immune ~~products~~system and ~~more~~increase ~~desirable~~the ~~treatment~~response ~~regimens,~~to ~~combined~~the ~~with~~idiotype vaccine. In the ~~effectiveness~~FL ofPhase ~~our~~2 ~~experienced~~and ~~management~~Phase ~~team.~~3 ~~Competing successfully~~clinical ~~will~~trials ~~depend~~patients onwere ~~our~~administered ~~continued~~5 ~~ability~~monthly toBiovaxID ~~attract~~injections ~~and~~in ~~retain~~the ~~skilled~~amount ~~and~~of ~~experienced~~0.5 ~~personnel~~milligram of idiotype per injection, towith ~~identify~~the ~~and~~injections ~~secure~~being given over a 6-month period of time in which the ~~rights~~fifth tomonth ~~and~~is ~~develop~~skipped. ~~pharmaceutical~~Through ~~products~~this ~~and~~process, ~~compounds~~the ~~and~~patient-specific idiotype is used to ~~exploit~~stimulate ~~these~~the ~~products~~patient’s ~~and~~immune ~~compounds commercially~~system ~~before~~into ~~others~~targeting ~~are~~and ~~able~~destroying malignant toB-cells ~~develop~~bearing ~~competitive~~the ~~products~~same idiotype.

~~Competition~~Biovest estimates that an average of 2 to 3 months is required to manufacture each BiovaxID vaccine, which for ~~Cyrevia™~~most patients may overlap the time period when induction chemotherapy is being administered. While the manufacturing process for BiovaxID is highly personalized to each patient, Biovest considers it to be highly controlled and predictable. The most common reason for a failure to successfully produce a patient’s vaccine was the presence of rare idiotype variants as opposed to the failure of a step in the manufacturing process. During the Phase 3 clinical trial, Biovest experienced approximately 95% success rate in manufacturing its BiovaxID vaccines.

WeManufacturing ~~expect~~Facility to initially target the following autoimmune indications: MS, the prevention of GVHD following bone marrow transplant; systemic sclerosis, primarily dsSSc; AIHA and mucositis. Notwithstanding the prior reports of High-Dose Pulsed Cytoxan as a potential therapy for certain autoimmune diseases, Cytoxan is currently FDA-approved to treat disorders other than autoimmune diseases, including various forms of cancer.

~~There~~BiovaxID™ ~~are~~is ~~currently~~ a ~~number~~personalized ofmedicine ~~FDA-approved~~which ~~drugs~~is produced separately for each individual patient through a laboratory-type process based on the patient’s ~~treatment~~own tumor cells derived by biopsy. Following regulatory/marketing approval of MSBiovaxID, ~~including:~~Biovest ~~interferon~~plans ~~ß-1b~~ to initially produce BiovaxID in its existing leasehold space in Minneapolis (~~Betaseron~~Coon Rapids), ~~interferon~~Minnesota. ~~ß-1a~~In ~~(Avonex~~order to facilitate the regulatory/marketing approval process, Biovest has completed a dedicated pilot scale suite of laboratory clean rooms especially designed to produce BiovaxID. As the regulatory/marketing approval process advances toward completion and ~~Rebif)~~subject ~~glatiramer~~to availability ~~acetate~~of ~~(Copaxon)~~funding, ~~mitoxantrone~~Biovest ~~(Novantrone)~~anticipates expanding its current leasehold space or adding new manufacturing facilities as required, ~~Tysabri~~to meet the anticipated commercialization requirements. During the Phase 3 clinical trial, BiovaxID was produced at Biovest’s facility in Worcester, Massachusetts. Because, Biovest has relocated the site of the manufacturing process to Biovest’s Minneapolis (~~natalizumab~~Coon Rapids), Minnesota facility following the Phase 3 clinical trials and webecause ~~anticipate~~Biovest is expanding this facility, ~~additional~~Biovest ~~drugs~~is ~~are~~currently ~~being~~in the process of demonstrating to the national and/or ~~will~~international beregulatory ~~developed~~agencies that the BiovaxID vaccine produced under these new conditions is comparable to the BiovaxID vaccine produced that was the subject of earlier clinical testing. ~~Accordingly~~This requirement will also apply to future expansions of the facility, wesuch ~~expect~~as ~~competition~~the possible expansion to additional facilities that may be required for ~~Cyrevia~~successful commercialization of BiovaxID. There is inalso ~~all~~a ~~autoimmune~~requirement ~~diseases~~for validation of the manufacturing process for BiovaxID utilizing Biovest’s AutovaxID® instrument. A showing of comparability requires data demonstrating that the BiovaxID vaccine produced continues to be ~~significant~~safe, pure, and potent and may be based on chemical, physical, and biological assays and, in some cases, other non-clinical data.

~~Competition~~30 ~~for BiovaxID®~~

IfTable approved, BiovaxID will be required to compete with currently approved therapies, as well as therapies which may be approved in the future. There are currently no approved active immunotherapeutic drugs which seek to induce an adaptive, specific and durable immune response to identify and eradicate the residual lymphoma cells remaining after a patient achieves remission in an effort to extend that remission or avoid relapse. BiovaxID is a therapy designed to be administered to lymphoma patients who have achieved complete remission after initial chemotherapy treatment. If approved, BiovaxID would represent a new class of drugs available to treat FL potentially offering a new treatment option for FL patients. Contents

~~BiovaxID~~INSTRUMENTS isAND ~~the~~DISPOSABLES only personalized cancer vaccine for treatment of FL that has demonstrated significant clinical benefit in a Phase 3 clinical trial. Two other vaccines, MyVaxTM developed by Genitope Corporation and Specifid™ developed by Favrille, Inc. which were studied in Phase 3 trials in FL patients did not report statistically significant clinical benefit and Biovest believes are no longer under development. There are fundamental structural differences between BiovaxID and the personalized cancer vaccines developed by Genitope Corporation and Favrille, Inc.; Genitope and Favrille manufactured their respective vaccines with IgG isotypes without regard to the patient’s actual isotype and the clinical trial designs under which the clinical efficacy of these vaccines were tested were different, which Biovest believes explain why BiovaxID achieved significant clinical benefit while the other vaccines did not.

~~Chemotherapy~~Biovest ~~and~~provides ~~monoclonal~~a ~~antibodies~~range ~~are~~of ~~widely~~cell culture systems that are used ~~for~~to ~~the~~produce ~~treatment~~small, research and development-scale through large, production-scale quantities of FL cell culture products. ~~Although~~Biovest’s ~~chemotherapy~~cell culture systems all incorporate perfusion technology and ~~monoclonal~~hollow ~~antibodies~~fiber cartridges. Because of these shared characteristics, all of Biovest’s cell culture systems listed below can ~~substantially~~be ~~reduce~~used ~~the~~to ~~tumor~~culture ~~mass~~a ~~and~~variety inof ~~most~~cell ~~instances~~lines ~~achieve~~(hybridomas, ~~clinical~~CHO, ~~remission~~MDCK, BHK ~~the~~and ~~remission~~others) isto ~~generally~~produce a range of ~~limited~~cell-based ~~duration.~~products, FLsuch ~~patients~~as ~~generally~~monoclonal ~~relapse~~antibodies, ~~and~~other ~~the~~secreted ~~cancer~~proteins, ~~usually becomes~~virus, ~~increasingly~~virus-like ~~resistant~~particles, tovaccines, ~~further~~and ~~chemotherapy~~whole ~~treatments~~cells. ~~The patient~~Biovest’s ~~response~~smaller cell culture systems can be scaled-up to ~~therapy~~any ~~becomes~~of Biovest’s ~~briefer~~larger ~~and~~cell ~~weaker~~culture ~~with~~systems. ~~each~~Biovest ~~additional~~utilizes ~~course~~scaled-up ofmethods ~~therapy,~~in ~~that~~its ~~eventually~~hollow ~~further~~fiber ~~chemotherapy~~systems ~~would~~because ~~offer~~they noare ~~clinical~~linear ~~benefit~~and predictable, which is not true of competing technologies. Biovest’s cell culture system product line, in order of increasing capacity, includes:

36HF PRIMER™: The HF Primer is a low-cost cell culture system capable of producing small, research and development quantities of the cell culture products from mammalian cell lines. The HF Primer also provides a relatively inexpensive option to evaluate the efficacy of new cell lines or applications in perfusion technology that can then be scaled-up to any of Biovest’s larger cell culture systems. HF Primer is a single-use, fully disposable product that requires no investment in custom equipment.

AMULTI-6™: ~~number~~The ofMulti-6 ~~passive~~is ~~immunotherapies,~~a ~~such~~low-cost ascell ~~rituximab~~culture ~~and~~system ~~radioimmunotherapeutic~~capable ~~agents~~of ~~(radioisotopes linked~~simultaneously toproducing ~~monoclonal antibodies)~~small, ~~are~~research ~~approved~~and bydevelopment ~~the~~-scale ~~FDA~~quantities ~~for the treatment~~ of ~~FL.~~six Adifferent ~~monoclonal~~cell ~~antibody~~culture isproducts. Optionally, athe ~~type~~Multi-6 ofcan ~~antibody~~be ~~produced~~used into ~~large~~produce ~~quantity~~one ~~that~~cell isculture ~~specific~~product toat ana ~~antigen~~rate that is ~~expressed~~six-fold byhigher ~~tumor~~than ~~cells~~the ~~but~~HF ~~may also be expressed by at least some normal cells~~Primer. ~~These~~This ~~therapies~~flexibility ~~have~~allows ~~been~~a ~~used~~researcher asto ~~primary~~operate ~~treatment~~one ~~and~~Multi-6 ~~also~~instead ~~as part~~ of ~~combination~~managing ~~induction~~six ~~therapy~~separate ~~including~~HF ~~chemotherapy~~Primer ~~and~~systems ~~rituximab~~running side-by-side. ~~based~~Multi-6 ~~therapy~~applications iscan ~~considered~~be scaled-up to beBiovest’s ~~the~~larger ~~standard~~AutovaxID® ofor ~~care~~other tocell ~~treat~~culture ~~FL.~~systems Inlisted anbelow, ~~effort~~if ~~to prolong~~ the ~~duration~~need ofarises. ~~the~~Multi-6 ~~clinical~~is ~~remission~~a ~~monoclonal~~single-use, ~~antibodies~~fully ~~have~~disposable ~~increasingly~~product ~~been~~that ~~used~~requires asno ~~maintenance~~investment ~~therapies~~in custom equipment.

IfAUTOVAXID®: ~~approved~~The toAutovaxID is Biovest’s most advanced, fully automated cell culture system. Its set-up and ~~treat~~operation FLrequires very little technician expertise and labor in comparison to competing cell culture system technologies, ~~BiovaxID~~and ~~will~~even ~~face~~Biovest’s ~~competition~~other cell culture systems listed below. The AutovaxID was designed from ~~other~~the ~~approved~~beginning ~~drugs~~to: enable multi-product facilities, ~~including~~capture ~~rituximab~~most ~~maintenance.~~all ~~Penetrating~~production information into its CFR 21 Part 11-compliant electronic records system, and operate as a ~~market~~fully closed-system biologics-manufacturing platform. The AutovaxID allows supervisors to implement built-in software controls to ensure technicians adhere to strictly defined production protocols for cGMP environments or remove this feature when it is not needed, such as in research and ~~achieving~~development ~~usage~~operations. byThere ~~physicians~~are four single-use AutovaxID disposables to provide researchers the needed flexibility to go from research and ~~patients~~development inthrough pilot-scale production. One of the ~~face~~disposable options even allows the simultaneous culturing of anthree ~~established~~different ~~standard~~cell lines to produce three different products in small quantities. When needed, one cell line can then be scaled-up to AutovaxID’s larger-capacity disposables. Biovest plans to utilize AutovaxID’s advanced capabilities to streamline commercial manufacture of BiovaxID™. ~~care~~AutovaxID is ~~anticipated~~the tofirst ~~represent~~cell aculture system that enables production of personalized cell-based treatments economically and in compliance with cGMP standards. Additionally, Biovest has contracted with the DoD and others to further ~~significant~~develop ~~marketing~~the ~~challenge~~AutovaxID and related Biovest’s other hollow fiber bioreactor systems to explore potential production of additional vaccines, including vaccines for viral indications such as influenza and other contagious diseases.

IfACUSYST-MINIMAX®: ~~BiovaxID~~The miniMax® is ~~approved~~an ~~for~~economical ~~treatment~~system ofthat ~~MCL,~~provides itthe ~~will~~flexibility beand ~~required~~technology needed to ~~compete~~support ~~with~~optimization ~~other~~studies and ~~approved~~research ~~and/or development~~through ~~therapies~~pilot-scale ~~for~~production of the ~~treatment~~cell ofculture ~~MCL~~products listed above. ~~There~~The miniMax is ~~currently~~a notabletop ~~consensus~~instrument ~~standard~~that ofuses ~~care~~simple, ~~for~~but ~~the~~robust, ~~first~~microprocessors ~~line~~to ~~treatment~~automatically ofcontrol ~~MCL;~~pH, ~~however~~incubator ~~there~~temperature, ~~are~~fluid-flow adynamics, ~~number~~and seven ofprocess ~~FDA~~pumps. This system offers two single-~~approved~~use ~~agents~~disposables ~~used~~options ~~for~~to ~~the~~meet ~~treatment~~varying ofproduction ~~MCL~~requirements. ~~both~~Optimization results determined in ~~first~~the ~~line~~miniMAX ~~settings~~can ~~and~~be intransferred to Biovest’s larger systems listed below. The production ~~patients~~capacity inis ~~relapse~~equivalent to an AutovaxID, but the miniMAX does not have the advanced features, controls, simpler setup and ease of operation available through the AutovaxID.

~~Competition~~ACUSYST-MAXIMIZER®: The Maximizer is an economical system with a design that is similar to the miniMAX system. This system has all of the features of miniMAX, using single-use disposables that either match or double the production capacity of the miniMAX system. The Maximizer is an economical system for ~~SinuNasal™~~process development and routine productions. The Maximizer offers the flexibility of four single-use disposables to meet varying production requirements. Production processes determined in the Maximizer can be scaled-up to Biovest’s largest cell culture system, AcuSyst-Xcellerator®.

CSACUSYST-XCELLERATOR®: The Xcellerator® is ~~one~~a offreestanding, ~~the~~production-scale ~~more~~cell ~~prevalent~~culture ~~chronic~~system ~~illnesses~~that inhas ~~the~~been ~~U.S.,~~used ~~affecting~~for ~~persons~~production of ~~all~~a ~~age~~FDA-licensed ~~groups~~biologic. ~~Approximately~~The ~~31 million~~Xcellerator ~~Americans~~contains ~~are found to be suffering from rhinosinusitis every year~~an incubator, ~~with an~~a ~~estimated 90% of these cases being chronic. For unknown reasons~~refrigerator, ~~the~~a ~~incidence~~built-in ofcomputer ~~this~~that ~~disease~~has ~~appears to be increasing yearly. This results in~~ a ~~conservative~~CFR ~~estimate~~21 ofPart 1811-~~22 million~~compliant ~~CS-related~~electronic ~~physician~~records ~~visits~~system, innumerous ~~the~~process ~~U.S.~~pumps, ~~each year~~ and a ~~direct~~ ~~treatment~~touch ~~cost~~screen offor $3local ~~to $4~~control.5 ~~billion~~The ~~annually.~~Xcellerator CSsupports isremote ~~the~~monitoring ~~fifth most common disease treated with antibiotics,~~ and/or upcontrol tovia ~~64%~~standard ~~of patients with AIDS develop CS~~web browsers. The ~~lack~~system ofsupports antwo ~~effective~~independent ~~treatment~~single-use ~~for~~disposables CSand, ~~has~~therefore, ~~historically~~can ~~been~~simultaneously ~~due~~culture totwo andifferent ~~inability of~~cell ~~the~~lines ~~medical community~~ to ~~identify~~produce ~~the~~two ~~underlying cause of the condition~~products. ~~Due~~The toXcellerator ~~lack~~has ofa ~~knowledge~~production ~~regarding~~capacity ~~the~~that ~~cause~~is ofequivalent ~~CS,~~to ~~most~~a ~~treatment~~20x ~~methods~~scale-up ~~for CS have focused only on the symptoms~~ of AutovaxID’s ~~the disease~~capacity.

~~Historically,~~31 the treatment of CS has largely focused on the use of antibiotics, intranasal or orally administered corticosteroids, and sinus surgery. While antibiotics are useful in treating the acute exacerbations that result from the bacterial invasion of the damaged paranasal tissue of CS patients, no antibiotic has proven effective in eradicating the underlying cause of CS. Intranasal and orally administered corticosteroids, which are potent anti-inflammatory hormones, have been used to reduce the inflammation and immune response that play a role in CS, but oral corticosteroids can cause serious side effects and must be avoided or cautiously used with patients that have certain conditions, such as gastrointestinal ulcers, renal disease, hypertension, diabetes, osteoporosis, thyroid disorders, and intestinal disease. Surgery is frequently used in CS patients to improve the drainage of their sinuses based on the assumption that the disease can be reversed by identifying and correcting the obstruction associated with the condition, but while such surgery usually offers temporary relief of symptoms, studies have shown that it is typically not curative.

IfTable approvedof as a prescription medical device, SinuNasal will compete with over-the-counter nasal irrigation devices. Accordingly, if approved, we expect SinuNasal to face significant competition. Contents

~~GOVERNMENT~~In ~~REGULATION~~addition to instrument and disposables sales, Biovest has recurring revenue from the sale of hollow fiber bioreactors, cultureware, tubing sets and other disposable products and supplies for use with its cell culture system instrument product line. Revenues from such disposable products represented approximately 73% and 59% of Biovest’s total revenue from this business segment for both the years ended September 30, 2012 and 2011, respectively.

~~Government authorities in the U.S. at the federal~~Currently, ~~state,~~Biovest ~~and local levels and in foreign countries extensively regulate~~assembles, ~~among other~~ ~~things,~~validates ~~the research, development, testing, manufacture, labeling, promotion, advertising, distribution, sampling, marketing,~~ and ~~import~~packages ~~and~~the ~~export~~instruments ~~of pharmaceutical products, biologics,~~ and ~~medical devices. All of our products in development will require regulatory approval by government agencies prior to commercialization. In particular~~disposables, ~~human~~cell ~~therapeutic~~culture products ~~are subject to rigorous preclinical~~ and ~~clinical~~services ~~trials~~which ~~and~~it ~~other approval procedures of the FDA and similar regulatory authorities in foreign countries~~sells. ~~Various~~Customers ~~federal,~~for ~~state,~~Biovest’s ~~local,~~instruments and ~~foreign~~disposables ~~statutes~~are ~~and~~the ~~regulations~~same ~~also~~potential ~~govern~~customers ~~testing,~~targeted ~~manufacturing,~~for ~~safety,~~Biovest’s ~~labeling,~~contract ~~storage,~~cell ~~and record-keeping related to such~~ culture products and ~~their~~services ~~marketing.~~which ~~The~~include ~~process~~biopharmaceutical ~~of obtaining these approvals~~ and ~~the~~biotechnology ~~subsequent process of maintaining substantial compliance with appropriate federal~~companies, ~~state,~~medical ~~local~~schools, ~~and foreign statutes and regulations require the expenditure of substantial time and financial resources. In addition~~universities, ~~statutes,~~ ~~rules,~~research ~~regulations~~facilities, hospitals and ~~policies~~public ~~may change~~ and ~~new~~private ~~legislation or regulations may be issued that could delay such approvals~~laboratories.

37Proprietary Rights to Instruments and Disposables

~~Pharmaceutical~~Biovest ~~Product~~owns ~~Regulation~~several patents covering various aspects of its hollow fiber perfusion process, instruments and proprietary cell culturing methods. Biovest owns U.S. Patent No. 6,001,585, which protects the HF Primer ™ cell culture systemand its use in screening cell lines and process conditions. Although the HF Primer micro hollow fiber bioreactor is impractical for large-scale vaccine production, it may be used as an efficient screening tool to cost-effectively determine how well a cell line will perform in a hollow fiber system, such as the AutovaxID® instrument, which is used in the production of BiovaxID™. U.S. Patent No. 6,001,585 will expire in November 2017.

InBiovest ~~the~~has also filed U.S., ~~the FDA regulates drugs~~ and ~~well-characterized~~foreign ~~biologics~~patent ~~under~~applications ~~the~~relating ~~Federal~~to ~~Food,~~certain ~~Drug,~~features ~~and Cosmetic Act (“FDCA”), and implementing regulations that are adopted under the FDCA. In the case~~ of ~~biologics,~~ the ~~FDA~~AutovaxID ~~regulates such products under the Public Health Service Act~~instrument. IfSeveral wepatents ~~fail~~have tobeen ~~comply~~granted ~~with~~in the ~~applicable~~EU ~~requirements~~covering ~~under these laws and regulations at any time during~~ the ~~product development process, approval process, or after approval, we may become subject to administrative or judicial sanctions. These sanctions could include the FDA~~AutovaxID’s extra-capillary ~~refusal~~(EC) tofluid ~~approve~~cycling ~~pending applications~~system, ~~withdrawals~~which ofenables ~~approvals,~~control ~~clinical~~of ~~holds,~~fluid ~~warning~~volumes ~~letters,~~in ~~product~~the ~~recalls, product~~hollow ~~seizures,~~fiber ~~total~~bioreactor orduring ~~partial~~manufacture ~~suspension~~ of ~~its~~BiovaxID ~~operations,~~in ~~injunctions,~~a ~~fines~~closed, ~~civil~~contamination-free ~~penalties or criminal prosecution~~environment. ~~Any~~These ~~agency~~EU ~~enforcement~~patents ~~action~~will ~~could~~remain ~~have~~in aforce ~~material~~until ~~adverse effect on us~~2027. ~~The FDA also administers certain controls over~~ ~~the export of drugs and biologics from the U.S.~~

~~Under~~Biovest has filed (a) a PCT application covering the ~~U.S.~~use ~~regulatory~~of ~~scheme~~AutovaxID instrument for rapid, ~~the~~large-scale ~~development~~production ~~process~~of virus, virus-like particles, and viral vaccines at a high yield, (b) a PCT application concerning an integrated apparatus and method for ~~new~~production ~~pharmaceutical~~and ~~products~~purification ~~can~~of antibodies and (c) a provisional application concerning cultureware modules and bebiomanufacturing ~~divided~~suites ~~into~~for ~~three~~large-scale ~~distinct~~production ~~phases:~~of cells and cell-derived products such as antibodies, proteins, virus, and virus-like particles.

•CELL ~~Preclinical~~CULTURE ~~Phase.~~PRODUCTS ~~The~~AND ~~preclinical~~SERVICES phase involves the discovery, characterization, product formulation and animal testing necessary to prepare an IND, for submission to the FDA. The IND must be accepted by the FDA before the drug can be tested in humans.

•Biovest ~~Clinical~~manufactures ~~Phase.~~mammalian ~~The~~cell ~~clinical~~culture products ~~phase~~such ~~follows~~as, awhole ~~successful~~cells, ~~IND~~recombinant ~~submission~~ and ~~involves~~secreted ~~the~~proteins, ~~activities~~and ~~necessary~~monoclonal toantibodies. ~~demonstrate the safety~~Additionally, ~~tolerability,~~Biovest ~~efficacy,~~provides ~~and~~related ~~dosage~~services ofas ~~the~~a ~~substance~~contract inresource ~~humans,~~to asassist ~~well~~Biovest’s ascustomers ~~the~~in ~~ability~~developing tocell ~~produce~~production ~~the~~process ~~substance~~protocols, cell inline ~~accordance~~optimization, ~~with~~cell ~~the~~culture ~~FDA’s~~production ~~cGMP~~optimization, ~~requirements.~~media ~~Data~~evaluation ~~from~~and ~~these~~other ~~activities~~related ~~are~~services. This ~~compiled~~segment inof aBiovest’s ~~NDA~~business orrepresented ~~for~~approximately ~~biologic~~$0.8 ~~products~~million a(approximately ~~Biologics~~22%) ~~License~~and ~~Application~~$1.3 million (~~“BLA”~~approximately 33%), in revenues for ~~submission to~~ the ~~FDA~~years ~~requesting~~ended ~~approval~~September 30, to2012 ~~market~~and ~~the~~2011, ~~drug~~respectively.

•With ~~Post-Approval~~Biovest’s ~~Phase.~~focus ~~The~~on ~~post~~pre-~~approval~~launch ~~phase~~therapeutics ~~follows FDA approval of the NDA or BLA,~~ and marketed ~~involves~~diagnostics ~~the~~ production, ~~and~~Biovest ~~continued~~serves ~~analytical~~all ~~and~~the ~~clinical~~manufacturing ~~monitoring~~needs of ~~the~~our ~~product~~customers. ~~The~~From ~~post-~~process ~~approval~~development ~~phase~~to ~~may~~regulatory ~~also~~support, ~~involve~~Biovest’s ~~the~~one-stop ~~development~~comprehensive ~~and~~approach ~~regulatory~~provides ~~approval~~solutions offor ~~product~~clients ~~modifications~~that ~~and~~have ~~line~~chosen ~~extensions,~~to temporarily ~~including~~or ~~improved~~permanently ~~dosage~~outsource ~~forms,~~any or all stages of ~~the~~drug ~~approved~~development. ~~product~~If needed, ascommercial ~~well~~production ascapacity for ~~generic~~product ~~versions~~launch ofis ~~the~~seamless, ~~approved~~Biovest ~~drug,~~provides asall the ~~product~~required ~~approaches~~regulatory ~~expiration~~support, ofincluding ~~patent~~biocompatibility ~~or other exclusivity protection~~studies.

~~Each~~With nearly 30 years of expert experience in cell culture, Biovest formulates the optimal strategy for its customers’ biologics ~~these~~manufacturing. ~~three~~By ~~phases~~accurately ismatching ~~discussed~~the ~~further~~level ~~below~~of hollow fiber bioreactor production technology to Biovest’s customers’ phase of product development, Biovest’s customers can manage their overall investment risk. Only as products advance to the next stage of development does Biovest scale to higher-output production systems. Customers of Biovest’s cell culture products and services are biopharmaceutical and biotechnology companies, medical schools, universities, research facilities, hospitals and public and private laboratories. Biovest generally produces cell culture products pursuant to contracts which specify the customer’s requirements for the cell culture products to be produced or the services to be performed.

~~Preclinical~~32 ~~Phase~~

TheTable development of a new pharmaceutical agent begins with the discovery or synthesis of a new molecule or well-characterized biologic. These agents are screened for pharmacological activity using various animal and tissue models, with the goal of selecting a lead agent for further development. Additional studies are conducted to confirm pharmacological activity, to generate safety data, and to evaluate prototype dosage forms for appropriate release and activity characteristics. Once the pharmaceutically active molecule is fully characterized, an initial purity profile of the agent is established. During this and subsequent stages of development, the agent is analyzed to confirm the integrity and quality of material produced. In addition, development and optimization of the initial dosage forms to be used in clinical trials are completed, together with analytical models to determine product stability and degradation. A bulk supply of the active ingredient to support the necessary dosing in initial clinical trials must be secured. Upon successful completion of preclinical safety and efficacy studies in animals, an IND submission is prepared and provided to the FDA for review prior to commencement of human clinical trials. The IND consists of the initial chemistry, analytical, formulation, and animal testing data generated during the preclinical phase. In general, the review period for an IND submission is 30 days, after which, if no comments are made by the FDA, the product candidate can be studied in Phase 1 clinical trials. Contents

~~The~~There ~~process~~are ~~for~~various ~~the development~~processes ofcommonly ~~biologic~~used ~~products,~~to ~~such~~expand asmammalian ~~our~~cells ~~BiovaxID®~~generally ~~product,~~used ~~parallels~~for the ~~process~~production ~~outlined above.~~of ~~Biologics,~~antibodies. inThese ~~contrast~~may toinclude ~~drugs~~hollow ~~that~~fiber ~~are~~bioreactor ~~chemically synthesized~~perfusion, ~~are~~stirred ~~derived~~tank ~~from living sources~~fermentation, ~~such~~roller asbottle ~~humans, animals,~~ and ~~microorganisms~~other processes. ~~Most~~Biovest ~~biologics~~primarily ~~are~~uses ~~complex~~hollow ~~mixtures~~fiber ~~that~~bioreactor ~~are~~technology ~~not~~to ~~easily~~expand ~~identified~~customer orprovided ~~characterized~~cell lines and ~~have~~produce ~~activity that~~the isrespective ~~different~~monoclonal ~~from~~antibodies. ~~the~~This ~~activity~~technology ofgrows ~~small,~~cells ~~organic~~to ~~molecules~~higher ~~normally~~densities ~~found~~which inmore ~~drugs~~closely mimics mammalian physiology. ~~Because~~Biovest ofhas ~~the~~significant ~~diversity~~expertise ofwith ~~the~~in ~~nature~~vitro of(outside ~~biologic~~the ~~products~~living ~~and~~body) ~~their~~cell ~~substantial~~culture ~~molecular~~methods ~~size~~for ~~(usually~~a ~~hundreds~~wide variety of mammalian ~~times~~cells. ~~larger~~Mammalian ~~than~~cells ~~small,~~are ~~organic~~complicated ~~molecules associated~~and dynamic, with ~~drugs),~~constantly ~~special~~changing ~~technology~~needs. isA ~~often~~primary ~~required~~component ~~for~~of ~~their~~hollow ~~production~~fiber ~~and~~bioreactors ~~subsequent~~is ~~analysis.~~fibers ~~Biologic~~made ~~products,~~of ~~especially~~plastic ~~proteins,~~polymers. ~~may~~The befibers ~~produced~~are hair-like with ~~living~~hollow ~~cells.~~centers ~~Purity~~which ~~testing~~simulate human capillaries. Thousands of ~~biologics~~these ~~can~~fibers beare ~~complex~~inserted ~~since~~in ~~living~~a ~~cells~~cartridge, ~~may harbor~~which ~~viruses~~we ~~and~~refer ~~other~~to ~~agents~~as a bioreactor. The ~~potential~~cells ~~presence~~are ofgrown ~~these~~on ~~agents~~the ~~and~~outside of the ~~requirement~~hollow tofibers ~~establish~~while ~~degradation~~nutrient ~~profiles~~media ~~and~~used ~~identify~~to ~~impurities~~support ~~associated~~cell ~~with~~growth ~~production~~is ~~and~~perfused ~~purification,~~through ~~further~~the ~~require~~lumen ~~establishing,~~of ~~validating, and~~the ~~conducting~~fibers. ~~specialized~~The ~~tests~~fiber ~~and~~walls ~~analyses.~~have ~~Formulation~~small ~~development~~pores, inallowing ~~this~~nutrients ~~area~~to ispass ~~often~~from ~~more~~the ~~complex~~hollow ~~than~~center ~~for~~to ~~small,~~the ~~organic~~cells. ~~drug~~The ~~substances.~~fibers ~~For~~act ~~example,~~as ~~molecules~~filters ~~produced~~and ~~using~~yield ~~recombinant~~concentrated ~~DNA~~secreted ~~technology,~~products. ~~are~~Because ~~inherently~~the ~~less~~cells ~~stable~~are ~~than~~immobilized ~~their organic~~in ~~counterparts~~the ~~because~~bioreactor, ~~structural~~the ~~integrity~~concentrated product ~~must~~can be ~~maintained~~harvested ~~through~~during ~~administration~~the ~~and~~ongoing ~~distribution~~cell ofgrowth ~~the product~~process. ~~Accordingly,~~Hollow ~~certain~~fiber ~~aspects~~technology permits harvests of ~~the~~cell ~~development~~culture ~~process~~products ~~for~~with ~~biologic~~generally ~~products~~higher ~~may~~purities bethereby ~~more~~reducing ~~challenging~~the ~~than~~cost ~~similar~~of ~~aspects~~downstream purification processes. This technology ~~encountered~~generally inminimizes the ~~development~~amount of ~~drugs~~costly nutrient media required for cell growth.

38The most generally used process for mammalian cell production is stirred tank fermentation. Hollow fiber bioreactor technology can be contrasted with the competitive stirred tank fermentation process which takes place in tanks of various sizes. Cells are grown inside the tanks in culture medium which is maintained under controlled conditions and continuously stirred to stimulate growth. At the end of the growing process, as opposed to incrementally during the growth process, cells are separated from the medium and the protein of interest is isolated through a series of complex purification processes. The size of the tanks generally result in stirred tank fermentation facilities requiring significantly more start-up costs, space and infrastructure than comparable production facilities using hollow fiber technology. While stirred tank fermentation and hollow fiber technology are both used for cell production of various quantities, Biovest believes that the stirred tank fermentation process is currently more commonly used for larger scale commercial production requirements. Biovest believes that hollow fiber technology has advantages in scalability, start-up time and cost in the early development of antibody production.

~~Clinical~~Biovest’s patented hollow fiber technology is the key to optimizing its customers’ biologics manufacturing. For Phase I, Phase II and Phase III cGMP production, Biovest’s hollow fiber bioreactor perfusion technology provides economic advantages through largely automated culture of a relatively large, densely packed population of cells in a small space. Additionally, the low molecular weight cut-off of the fiber membrane allows more expensive media components to be conserved, while less expensive basal media is continuously perfused through the bioreactor. As a result, this automated approach can be more cost-effective than conventional platforms generally used for maintenance of large cell populations. In the expanding field of personalized medicine where patient specific drugs and therapeutics are frequently envisioned, such as BiovaxID™, Biovest believes that hollow fiber technology may be the appropriate cell culture production technology.

~~Following~~SINUNASAL™ ~~successful~~LAVAGE ~~submission~~SYSTEM of an IND, the sponsor is permitted to conduct clinical trials involving the administration of the investigational product candidate to human subjects under the supervision of qualified investigators in accordance with good clinical practice. Clinical trials are conducted under protocols detailing, among other things, the objectives of the study and the parameters to be used in assessing the safety and the efficacy of the drug. Each protocol must be submitted to the FDA as part of the IND prior to beginning the trial. Each trial must be reviewed, approved and conducted under the auspices of an independent Institutional Review Board, and each trial, with limited exceptions, must include the patient’s informed consent. Typically, clinical evaluation involves the following time-consuming and costly three-phase sequential process:

•We ~~Phase~~anticipate 1.developing ~~Phase~~the 1SinuNasal™ ~~human~~Lavage ~~clinical~~System ~~trials~~(“SinuNasal”) ~~are~~as ~~conducted~~a inmedical adevice ~~limited~~for ~~number~~the treatment of ~~healthy~~patients ~~individuals~~with torefractory, post-surgical ~~determine~~chronic ~~the~~sinusitis, ~~drug’s~~also ~~safety~~sometimes ~~and~~referred ~~tolerability~~to as chronic rhinosinusitis, and ~~includes~~upon ~~biological~~clearance ~~analyses~~or toapproval ~~determine~~with the ~~availability~~FDA, we intend and ~~metabolization~~anticipate ofto ~~the~~market ~~active~~this ~~ingredient~~device ~~following~~under ~~administration~~the name SinuNasal. ~~The~~SinuNasal ~~total~~is ~~number~~believed ofto ~~subjects~~provide ~~and~~benefit ~~patients~~by delivering ~~included~~a inproprietary ~~Phase~~buffered 1irrigation ~~clinical~~solution ~~trials~~(patent ~~varies,~~pending) ~~but~~to ismechanically ~~generally~~flush inthe nasal passages to improve the ~~range~~symptoms of 20refractory tochronic 80sinusitis ~~people~~patients post-surgery.

•SinuNasal™ ~~Phase~~Market 2.Opportunity Phase 2 clinical trials involve administering the drug to individuals who suffer from the target disease or condition to determine the drug’s potential efficacy and ideal dose. These clinical trials are typically well controlled, closely monitored, and conducted in a relatively small number of patients, usually involving no more than several hundred subjects. These trials require scale up for manufacture of increasingly larger batches of bulk chemical. These batches require validation analysis to confirm the consistent composition of the product.

•Chronic ~~Phase~~sinusitis 3.is ~~Phase~~one 3of ~~clinical~~the ~~trials~~more ~~are~~prevalent ~~performed~~chronic illnesses ~~after~~in ~~preliminary~~the ~~evidence~~U.S., ~~suggesting~~affecting ~~effectiveness~~persons of aall ~~drug~~age ~~has~~groups. ~~been~~The ~~obtained~~overall ~~and~~prevalence ~~safety~~of chronic sinusitis (~~toxicity~~“CS”) in the U.S. is 146 per 1,000 ~~tolerability~~population, with approximately 31 million Americans suffering from rhinosinusitis every year, and an ~~ideal~~estimated ~~dosing~~90% ~~regimen~~of ~~have~~these ~~been~~cases ~~established~~being chronic. ~~Phase~~For 3unknown ~~clinical~~reasons, ~~trials~~the ~~are~~incidence ~~intended~~of this disease appears to ~~gather~~be ~~additional~~increasing ~~information~~yearly. ~~about~~This results in a conservative estimate of 18-22 million physician visits in the ~~effectiveness~~U.S. each year and ~~safety~~a direct ~~that~~treatment iscost ~~needed~~of $3 to ~~evaluate~~$4.5 billion annually. CS is the ~~overall~~fifth ~~benefit-risk~~most ~~relationship~~common ofdisease ~~the~~treated ~~drug~~with antibiotics and up to ~~complete~~64% ~~the~~of ~~information~~patients ~~needed~~with toAIDS ~~provide~~develop ~~adequate~~CS. ~~instructions~~The lack of an effective treatment for ~~the~~CS ~~use~~has historically been due to an inability of the medical community to identify the ~~drug,~~underlying ~~also~~cause ~~referred~~of the condition. Due to aslack of knowledge regarding the ~~Official~~cause ~~Product~~of ~~Information.~~CS, ~~Phase~~most 3treatment ~~clinical~~methods ~~trials~~for ~~usually~~CS ~~include~~have ~~from~~focused ~~several~~only ~~hundred~~on tothe ~~several~~symptoms ~~thousand~~of ~~subjects~~the disease.

~~Throughout~~33 the clinical phase, samples of the product made in different batches are tested for stability to establish shelf life constraints. In addition, large-scale production protocols and written standard operating procedures for each aspect of commercial manufacture and testing must be developed.

PhaseTable 1, 2, and 3 testing may not be completed successfully within any specified time period, if at all. The FDA closely monitors the progress of each of the three phases of clinical trials that are conducted under an IND and may, at its discretion, reevaluate, alter, suspend, or terminate the testing based upon the data accumulated to that point and the FDA’s assessment of the risk/benefit ratio to the patient. The FDA may suspend or terminate clinical trials at any time for various reasons, including a finding that the subjects or patients are being exposed to an unacceptable health risk. The FDA can also request additional clinical trials be conducted as a condition to product approval. Additionally, new government requirements may be established that could delay or prevent regulatory approval of our products under development. Furthermore, institutional review boards, which are independent entities constituted to protect human subjects in the institutions in which clinical trials are being conducted, have the authority to suspend clinical trials at any time for a variety of reasons, including safety issues. Contents

~~New~~Historically, ~~Drug~~the ~~Application~~treatment ~~(NDA)~~of CS has largely focused on the use of antibiotics, intranasal or ~~Biologics~~orally administered ~~License~~corticosteroids, ~~Application~~and ~~(BLA)~~sinus surgery. While antibiotics are useful in treating the acute exacerbations that result from the bacterial invasion of the damaged paranasal tissue of CS patients, no antibiotic has proven effective in eradicating the underlying cause of CS. Intranasal and orally administered corticosteroids, which are potent anti-inflammatory hormones, have been used to reduce the inflammation and immune response that play a role in CS, but oral corticosteroids can cause serious side effects and must be avoided or cautiously used with patients that have certain conditions, such as gastrointestinal ulcers, renal disease, hypertension, diabetes, osteoporosis, thyroid disorders, and intestinal disease. Surgery is frequently used in CS patients to improve the drainage of their sinuses based on the assumption that the disease can be reversed by identifying and correcting the obstruction associated with the condition, but while such surgery usually offers temporary relief of symptoms, studies have shown that it is typically not curative.

~~After~~SinuNasal™ ~~the~~Development ~~successful completion of Phase 3 clinical trials, the sponsor of the new drug submits a NDA or BLA, in the case of biologics, to the FDA requesting approval to market the product for one or more~~Status indications. A NDA, or BLA, is a comprehensive, multi-volume application that includes, among other things, the results of all preclinical and clinical studies, information about the drug’s composition, and the sponsor’s plans for producing, packaging, and labeling the drug. Under the Pediatric Research Equity Act of 2003, an application also is required to include an assessment, generally based on clinical study data, on the safety and efficacy of drugs for all relevant pediatric populations before the NDA is submitted. The statute provides for waivers or deferrals in certain situations. In most cases, the NDA or BLA must be accompanied by a substantial user fee. In return, the FDA assigns a goal of 10 months from acceptance of the application to return of a first “complete response,” in which the FDA may approve the product or request additional information.

39SinuNasal is intended to act as a buffered irrigation solution to flush sinus passages in patients with refractory, post-surgical CS and to improve symptoms associated with CS. The device consists of a reusable soft silicone-tipped 35cc plastic syringe and a patent-pending packet of ingredients including powder sodium phosphate buffer, calcium carbonate buffer and a coloring agent. To use SinuNasal, the user reconstitutes 1 packet in water to create a buffered solution of neutral pH (sodium phosphate buffer ~ 2.5%), and administers the solution to each nostril with the soft-tip syringe nozzle two times per day. To administer the solution, the nostril is occluded with the tip of the syringe, the user tilts his/her head to the side being irrigated, and applies gentle pressure to the plunger. The solution immediately flows out of the contralateral, unobstructed nostril and does not remain in the sinus or nasal passages.

~~The~~We ~~submission~~believe ofthat ~~the~~SinuNasal ~~application~~should isbe noregulated ~~guarantee~~by ~~that~~ the ~~FDA~~Center ~~will~~for ~~find~~Devices itand ~~complete~~Radiological Health ~~and~~as ~~accept~~a itprescription medical device for ~~filing.~~ ~~The~~the ~~FDA~~treatment ~~reviews~~of ~~all~~patients ~~NDAs~~with ~~and~~refractory, ~~BLAs~~post-surgical ~~submitted~~CS. ~~before~~However, itin ~~accepts~~April ~~them~~2010, ~~for~~the ~~filing.~~Office Itof ~~may~~Combination ~~refuse~~Products to(“OCP”) ~~file~~within the ~~application~~FDA ~~and~~ruled ~~request~~that ~~additional~~SinuNasal ~~information~~is not a medical device, but rather, ~~than~~is ~~accept~~a ~~the~~combination ~~application~~product ~~for~~with ~~filing,~~a indrug ~~which~~primary ~~case,~~mode ~~the~~of ~~application~~action ~~must~~requiring ~~be resubmitted~~regulation ~~with~~by the ~~supplemental~~Center ~~information~~for Drug Evaluation and Research. ~~After~~The ~~application~~effect of this OCP determination is ~~deemed~~to ~~filed~~subject bySinuNasal ~~the~~to ~~FDA~~regulatory requirements as a drug product, likely including the ~~FDA~~submission ~~reviews~~of ana NDA, ortypically ~~BLA~~a tomuch ~~determine~~more difficult, ~~among~~lengthy, ~~other~~and ~~things,~~expensive ~~whether~~pathway ato ~~product~~market isas ~~safe~~compared ~~and~~to ~~effective~~clearance ~~for~~or ~~its~~approval ~~intended~~of ~~use~~a medical device. ~~The~~In ~~FDA~~July 2010, ~~has~~after ~~substantial~~the OCP reconsidered and affirmed its decision, we ~~discretion~~appealed inthe ruling to a higher office within the ~~approval~~FDA ~~process~~that supervises the OCP. In March 2011, we presented written and ~~may~~oral ~~disagree~~argument in connection with an ~~applicant~~appeal meeting that SinuNasal’s ~~interpretation~~mechanical mode of action meets the ~~data~~definition ~~submitted~~of ina medical ~~its~~device ~~NDA~~and orthat ~~BLA.~~it ~~Drugs~~is ~~that~~not ~~successfully~~a ~~complete~~combination ~~NDA~~product or, ~~BLA~~if ~~review~~it ~~may~~is, bethat ~~marketed~~the indevice ~~the~~mode ~~U.S.,~~of ~~subject~~action tois ~~all~~primary. ~~conditions~~On ~~imposed~~December 1, ~~by the~~2011, FDA. ~~Prior~~issued toits ~~granting~~decision ~~approval,~~upholding the ~~FDA~~ruling ~~generally~~of ~~conducts~~the anOCP. ~~inspection~~We ofare ~~the~~now ~~facilities,~~considering ~~including~~options ~~outsourced~~such ~~facilities,~~as ~~which~~discussing with ~~will~~the beregulatory ~~involved~~agency in the ~~manufacture,~~appropriate ~~production,~~regulatory ~~packaging,~~program ~~testing~~required ~~and~~to ~~control~~ultimately ofseek ~~the~~approval ~~drug~~or ~~product~~alternatively ~~for~~to ~~cGMP compliance.~~potentially ~~The~~commence a lawsuit against the FDA ~~will~~seeking ~~not~~reversal ~~approve~~of the ~~application~~OCP ~~unless~~ruling ~~cGMP~~and ~~compliance~~FDA’s isaffirmation ~~satisfactory~~of that decision. There Ifcan ~~the~~be ~~FDA~~no ~~determines~~assurance that ~~the~~we ~~marketing~~will ~~application,~~pursue ~~manufacturing~~any ~~process,~~specific option or ~~manufacturing~~what ~~facilities~~the ~~are~~outcome ~~not~~of ~~acceptable,~~such itoption will ~~outline~~ultimately ~~the deficiencies~~prove into ~~the~~be. ~~submission~~Pending ~~and~~such ~~will~~determination, ~~often~~we ~~request~~are ~~additional~~unable ~~testing~~to determine the next potential development and/or ~~information~~regulatory steps to advance SinuNasal. ~~Notwithstanding~~If the ~~submission~~litigation ofis ~~any~~not ~~requested~~pursued ~~additional~~or ~~information~~is not successful, ~~the~~our ~~FDA~~potential ~~ultimately~~future ~~may~~development ~~decide~~and ~~that~~commercialization ~~the~~plans ~~marketing~~for ~~application~~SinuNasal ~~does~~will ~~not~~require ~~satisfy~~greater ~~the regulatory~~expense ~~criteria~~and ~~for~~a ~~approval~~longer ~~and~~timeline ~~refuse~~than towould ~~approve~~have been the ~~application~~case byif ~~issuing~~device regulation aapplied, ~~“not~~possibly ~~approvable”~~resulting ~~letter.~~in discontinuation of the project altogether.

~~Post-Approval~~CONSULTING SERVICES – ANALYTICA INTERNATIONAL, ~~Phase~~INC.

IfOn ~~the~~December 15, ~~FDA~~2011, ~~approves~~we, ~~the~~along ~~NDA,~~with ~~BLA~~Analytica, orclosed ~~abbreviated~~on ~~new~~the ~~drug~~sale ~~application~~of ~~(ANDA)~~substantially ~~application,~~all asof ~~applicable,~~Analytica’s ~~the~~assets ~~pharmaceutical~~and ~~product~~business ~~becomes~~to ~~available~~a purchaser for ~~physicians~~a tomaximum ~~prescribe~~aggregate inpurchase ~~the~~price ~~U.S.~~of ~~After~~up ~~approval~~to $10.0 million, ~~the~~consisting ~~product~~of isfixed ~~still~~and ~~subject~~contingent topayments. ~~continuing~~As ~~regulation~~part byof ~~FDA~~the purchase, ~~including~~the ~~record~~purchaser ~~keeping~~agreed ~~requirements,~~to ~~submitting~~grant ~~periodic~~to ~~reports~~us, tofor ~~the~~no ~~FDA~~additional consideration, ~~reporting~~up ofto $0.6 million ~~any~~worth ~~adverse experiences~~of ~~with~~research ~~the~~services ~~product,~~at ~~and~~our ~~complying~~request ~~with~~to ~~drug~~support ~~sampling~~our ~~and~~ongoing ~~distribution~~biotechnology ~~requirements~~activities. In ~~addition,~~consideration for the ~~sponsor~~sale isof ~~required~~the toassets ~~maintain~~ and ~~provide~~business, ~~updated~~the ~~safety~~purchaser ~~and~~paid ~~efficacy information to the FDA~~$4.0 ~~The~~million ~~sponsor~~for isour ~~also~~benefit ~~required~~directly to ~~comply~~Laurus/Valens for the ~~with~~pre-payment ~~requirements~~of ~~concerning~~the ~~advertising~~Laurus/Valens ~~and~~Term ~~promotional~~Notes ~~labeling~~(described below). InOn ~~that~~March 30, ~~regard~~2012, ~~advertising~~the ~~and~~purchaser ~~promotional~~paid ~~materials~~us ~~must~~$1.5 bemillion, ~~truthful~~based ~~and~~upon ~~not~~a ~~misleading.~~formula ~~The~~involving ~~sponsor~~the isaggregate ~~also~~gross ~~prohibited~~revenue ~~from~~of ~~promoting~~the ~~any~~purchaser’s ~~non~~wholly-~~FDA~~owned ~~approved~~subsidiary, orAnalytica ~~“off~~LA-~~label”~~SER ~~indications~~International, ~~of products~~Inc. ~~Failure~~from toDecember 15, ~~comply~~2011 ~~with~~through ~~those~~March 31, ~~requirements~~2012, ~~could~~as ~~result~~well inas ~~significant~~the ~~enforcement~~aggregate ~~action~~backlog byof ~~the~~Analytica ~~FDA~~LA-SER International, ~~including~~Inc.’s ~~warning~~business ~~letters~~as of March 31, ~~orders~~2012. toThe ~~pull~~remainder of the ~~promotional~~purchase ~~materials~~price, ~~and~~up ~~substantial~~to ~~fines~~a maximum of $4.5 ~~Also~~million will be calculated based upon a multiple of Analytica LA-SER International, ~~quality~~Inc.’s ~~control~~earnings before interest, taxes, depreciation and amortization (EBITDA) for specified periods, with certain adjustments for the amount of research ~~manufacturing~~services ~~procedures~~actually ~~must~~acquired ~~continue~~by tous ~~conform~~up to ~~cGMP~~$0.6 ~~after approval~~million.

~~Drug~~34 and biologics manufacturers and their subcontractors are required to register their facilities and products manufactured annually with FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA to assess compliance with cGMP regulations. Facilities may also be subject to inspections by other federal, foreign, state, or local agencies. In addition, approved biological drug products may be subject to lot-by-lot release testing by the FDA before these products can be commercially distributed. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance. We use, and will continue to use, third-party manufacturers, to produce certain of our products in clinical and commercial quantities, and future FDA inspections may identify compliance issues at its facilities or at the facilities of its contract manufacturers that may disrupt production or distribution, or require substantial resources to correct.

InTable addition, following FDA approval of a product, discovery of problems with a product or the failure to comply with requirements may result in restrictions on a product, manufacturer, or holder of an approved marketing application, including withdrawal or recall of the product from the market or other voluntary or FDA-initiated action that could delay further marketing. Newly discovered or developed safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications. Also, the FDA may require post-market testing and surveillance to monitor the product’s safety or efficacy, including additional clinical studies, known as Phase 4 clinical trials, to evaluate long-term effects. Contents

~~Orphan~~COMPETITION ~~Drug Designation and Exclusivity~~

~~Some~~Biotechnology ~~jurisdictions,~~has ~~including~~experienced ~~the U.S.~~ and ~~the~~ ~~EU,~~is ~~designate~~expected ~~drugs~~to ~~intended~~continue ~~for~~to ~~relatively~~experience, ~~small~~rapid ~~patient~~and ~~populations~~significant aschange. ~~“orphan~~New ~~drugs.”~~developments ~~The~~in ~~FDA,~~biotechnological ~~for~~processes ~~example,~~are ~~grants~~expected ~~Orphan~~to ~~Drug~~continue ~~designation~~at toa ~~drugs~~rapid ~~intended~~pace toin ~~treat~~both industry ~~rare~~and ~~diseases~~academia, orand ~~conditions~~these ~~that~~developments ~~affect~~are ~~fewer~~likely ~~than~~to ~~200,000 individuals~~result in ~~the~~commercial ~~U.S.~~applications orcompetitive ~~drugs~~with ~~for~~any ~~which~~of ~~there~~our isproduct nocandidates. ~~reasonable~~We ~~expectation~~expect ~~that~~to ~~the~~encounter ~~cost~~intense ofcompetition ~~developing~~from ~~and~~a ~~making~~number ~~the~~of ~~drugs~~companies ~~available~~that inoffer ~~the~~products ~~U.S.~~in ~~will~~our betargeted application ~~recovered~~areas. InWe ~~the~~anticipate ~~U.S.,~~that ~~Orphan~~our ~~Drug~~competitors ~~designation~~in ~~must~~these beareas ~~requested~~will ~~before~~consist ~~submitting~~of ~~an application~~both ~~for~~well-established ~~approval~~and ofdevelopment-stage ~~the~~companies ~~product.~~and will include:

~~Orphan~~• ~~Drug~~healthcare designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. If a product which has an orphan drug designation subsequently receives the first FDA approval for the indication for which it has such designation, the product is entitled to a marketing exclusivity. For seven years, the FDA may not approve any other application, including NDAs or ANDAs, to market the “same drug” for the same indication. The only exceptions are i) where the second product is shown to be “clinically superior” to the product with Orphan Drug exclusivity, as that phrase is defined by the FDA and ii) if there is an inadequate supply. companies;

40• chemical and biotechnology companies;

~~Manufacturing~~• biopharmaceutical companies; and

~~With~~• ~~regard~~companies todeveloping ~~Biovest’s~~drug ~~development~~discovery ~~of BiovaxID®, Biovest has completed the construction of a new manufacturing suite for BiovaxID located within Biovest’s existing facility in Minneapolis (Coon Rapids), Minnesota~~technologies. If it receives FDA or other regulatory approval of BiovaxID, Biovest may continue to manufacture the vaccine at its facility in Minnesota, although Biovest will likely need to expand this existing facility and/or develop additional facilities to fully support commercial production for the U.S. markets. Changes to the manufacturing process or site during or following the completion of clinical trials requires sponsors to demonstrate to the FDA that the product under new conditions is comparable to the product that was the subject of earlier clinical testing. This requirement applies to relocations or expansions of manufacturing facilities, such as Biovest’s relocation of its BiovaxID production process and planned expansion of such facilities or additional facilities that may be required upon successful commercialization of the vaccine. A showing of comparability requires data demonstrating that the product continues to be safe, pure, and potent and may be based on chemical, physical, and biological assays and, in some cases, other non-clinical data. If Biovest demonstrates comparability, additional clinical safety and/or efficacy trials with the new product may not be needed. If the FDA requires additional clinical safety or efficacy trials to demonstrate comparability, its clinical trials or the FDA approval of BiovaxID may be delayed.

~~Pursuant~~We expect to ~~the~~compete ~~Baxter Agreement~~on, ~~Baxter~~among ~~granted~~other usthings, the ~~exclusive~~safety ~~right~~and toefficacy ~~purchase Cytoxan~~of ~~from~~our ~~Baxter~~product ~~for~~candidates ~~the~~and more desirable treatment regimens, combined with the effectiveness of ~~various~~our ~~autoimmune~~experienced ~~diseases~~management team. Competing Wesuccessfully ~~anticipate~~will ~~that~~depend ~~under~~on ~~the~~our ~~Baxter~~continued ~~Agreement~~ability to attract and retain skilled and experienced personnel, weto ~~will~~identify ~~have~~and ~~access~~secure the rights to ~~acquire~~and ~~sufficient~~develop ~~supplies~~pharmaceutical ofproducts ~~Cytoxan~~and ~~for~~compounds, ~~use~~and into ~~our~~exploit ~~clinical~~these ~~trials~~pharmaceutical products and ~~our~~compounds ~~commercialization~~commercially before others are able to develop competitive products.

~~Medical~~Competition ~~Device~~for ~~Regulation~~Cyrevia™

~~New medical~~We ~~devices~~expect ~~are also subject~~ to ~~FDA~~initially ~~approval~~target ~~and extensive regulation under~~ the ~~FDCA.~~following ~~Under~~autoimmune ~~the~~indications: ~~FDCA~~MS, ~~medical~~the ~~devices~~prevention ~~are~~of ~~classified~~GVHD ~~into~~following ~~one~~bone ofmarrow ~~three~~transplant; ~~classes:~~systemic ~~Class I~~sclerosis, primarily ~~Class~~dsSSc; ~~II,~~AIHA orand ~~Class III~~mucositis. ~~The~~Notwithstanding ~~classification~~the ofprior areports ~~device into one~~ of ~~these three~~High-Dose ~~classes~~Pulsed ~~generally~~Cytoxan ~~depends~~as ona ~~the~~potential ~~degree~~therapy offor ~~risk~~certain ~~associated~~autoimmune ~~with~~diseases, ~~the~~Cytoxan ~~medical~~is ~~device~~currently ~~and~~FDA-approved ~~the~~to ~~extent~~treat ofdisorders ~~control~~other ~~needed~~than toautoimmune ~~ensure~~diseases, ~~safety~~including various ~~and~~forms ~~effectiveness~~of cancer.

~~Class~~There ~~I devices~~ are ~~those~~currently ~~for which safety and effectiveness can be assured by adherence to~~ a ~~set~~number of ~~general~~FDA-approved ~~controls.~~drugs ~~These~~for ~~general controls include compliance with~~ the ~~applicable~~treatment ~~portions~~ of ~~the FDA’s Quality System Regulation~~MS, ~~which~~including: ~~sets~~interferon ~~forth good manufacturing practice requirements; facility registration and product reporting of adverse medical events listing; truthful and non~~ß-~~misleading labeling; and promotion of the device only~~1b ~~for its cleared or approved intended uses. Class II devices are also subject to these general controls~~(Betaseron®), ~~and~~interferon ~~any~~ß-1a ~~other~~(Avonex® ~~special controls as deemed necessary by the FDA to ensure the safety~~ and ~~effectiveness~~Rebif®) ofglatiramer ~~the~~acetate ~~device.~~(Copaxon®), ~~Review~~mitoxantrone ~~and~~(Novantrone®), ~~clearance~~natalizumab ~~by the FDA for these devices is typically accomplished through the so-called 510~~(kTysabri®) ~~pre-market~~and ~~notification~~we ~~procedure.~~anticipate, Aadditional ~~Class~~drugs ~~III~~are ~~device~~being ~~requires~~or ~~approval~~will ofbe adeveloped. ~~premarket application (“PMA”)~~Accordingly, anwe expect ~~expensive,~~competition ~~lengthy~~for ~~and~~Cyrevia ~~uncertain~~in ~~process~~all ~~requiring many~~autoimmune ~~years~~diseases to ~~complete~~be significant.

~~When~~Competition 510(k) clearance is sought, a sponsor must submit a pre-market notification demonstrating that the proposed device is substantially equivalent to a previously approved device. If the FDA agrees that the proposed device is substantially equivalent to the predicate device, then 510(k) clearance to market will be granted. After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could require pre-market approval. Our instruments and disposables used for ~~the~~BiovaxID™ ~~production of cell cultures are generally regulated as Class I devices exempt from the 510(k) clearance process.~~

~~Clinical~~The ~~trials~~use ~~are~~of ~~almost~~monoclonal ~~always~~antibodies ~~required~~as toinitial ~~support~~or ainduction ~~PMA~~therapy, and ~~are~~increasingly ~~sometimes~~for ~~required~~maintenance ~~for~~therapy, ahas ~~510(k)~~become ~~pre~~well-~~market~~established ~~notification.~~and ~~These clinical trials~~ generally accepted. ~~require~~Products ~~submission~~that ofare anwell-established ~~application~~or ~~for~~accepted, anincluding ~~investigational~~monoclonal ~~device~~antibodies ~~exemption~~such ~~(“IDE”).~~as AnRituxan®, ~~IDE~~may ~~must~~constitute besignificant ~~supported~~barriers byto ~~pre-clinical~~market ~~data,~~penetration ~~such as animal~~ and ~~laboratory~~regulatory ~~testing~~approval ~~results,~~ which ~~show~~may ~~that~~be ~~the~~expensive, ~~device~~difficult isor ~~safe~~even toimpossible ~~test in~~to ~~humans~~overcome. ~~and~~New ~~that~~developments ~~the~~in ~~study~~biotechnological ~~protocols~~processes are ~~scientifically~~expected ~~sound.~~to ~~The~~continue ~~IDE~~at ~~must~~a berapid ~~approved~~pace in ~~advance~~both byindustry ~~the~~and ~~FDA for a specified number of patients~~academia, ~~unless~~and ~~the~~these ~~product~~developments isare ~~deemed~~likely ato ~~non-significant~~result ~~risk~~in ~~device~~commercial ~~and~~applications iscompetitive ~~eligible~~with ~~for more abbreviated IDE requirements~~BiovaxID.

~~Both~~If ~~before~~approved, ~~and~~BiovaxID ~~after~~will abe ~~medical~~required ~~device~~to iscompete ~~commercially~~with ~~distributed~~currently approved therapies, ~~manufacturers~~as ~~and~~well ~~marketers~~as oftherapies ~~the~~which ~~device~~may ~~have~~be ~~ongoing responsibilities~~approved ~~under~~in ~~FDA~~the ~~regulations~~future. ~~The~~There ~~FDA~~are currently ~~reviews~~no ~~design~~approved ~~and~~active ~~manufacturing~~immunotherapeutic ~~practices,~~drugs ~~labeling~~which ~~and~~seek ~~record~~to ~~keeping~~induce an adaptive, specific and ~~manufacturers’~~durable ~~required~~immune ~~reports~~response ofto ~~adverse~~identify ~~experiences~~ and ~~other~~eradicate ~~information~~the toresidual ~~identify~~lymphoma ~~potential~~cells ~~problems~~remaining ~~with marketed~~after ~~medical~~a ~~devices.~~patient ~~Device~~achieves ~~manufacturers~~remission ~~are~~in ~~subject~~an effort to ~~periodic~~extend that ~~and~~remission ~~unannounced~~or ~~inspection~~avoid byrelapse. ~~the~~BiovaxID ~~FDA~~is ~~for~~a ~~compliance~~therapy ~~with~~designed ~~the~~to ~~QSR,~~be ~~cGMP~~administered ~~requirements~~to ~~that~~lymphoma ~~govern~~patients ~~the~~who ~~methods~~have ~~used~~achieved ~~in,~~complete ~~and~~remission ~~the~~after ~~facilities~~initial ~~and~~chemotherapy ~~controls~~treatment. ~~used~~If ~~for~~approved, ~~the~~BiovaxID ~~design, manufacture,~~would ~~packaging,~~represent ~~servicing,~~a ~~labeling,~~new ~~storage,~~class ~~installation,~~of ~~and~~drugs ~~distribution~~available to oftreat ~~all~~FL ~~finished~~and ~~medical~~potentially ~~devices~~offering ~~intended~~a new treatment option for ~~human~~FL ~~use~~patients.

41BiovaxID is the only personalized cancer vaccine for treatment of FL that has demonstrated significant clinical benefit in a Phase 3 clinical trial. Two other vaccines, MyVaxTM developed by Genitope Corporation (“Genitope”) and Specifid™ developed by Favrille, Inc. (“Favrille”) which were studied in Phase 3 clinical trials in FL patients did not report statistically significant clinical benefit and we believe are no longer under development. There are fundamental structural differences between BiovaxID and the cancer vaccines developed by Genitope and Favrille; Genitope and Favrille manufactured their respective vaccines with IgG isotypes without regard to the patient’s actual isotype and their clinical trial designs under which the clinical efficacy of these vaccines were tested were different, which we believe explains why BiovaxID achieved significant clinical benefit while Genitope and Favrille’s vaccines did not.

If35 the FDA finds that a manufacturer has failed to comply or that a medical device is ineffective or poses an unreasonable health risk, it can institute or seek a wide variety of enforcement actions and remedies, ranging from a public warning letter to more severe actions such as:

•Table fines,of injunctions, and civil penalties;Contents

•Chemotherapy ~~recall~~and ormonoclonal ~~seizure~~antibodies are widely used for the treatment of ~~products;~~FL. Although chemotherapy and monoclonal antibodies can substantially reduce the tumor mass and in most instances achieve clinical remission, the remission is generally of limited duration. FL patients generally relapse and the cancer usually becomes increasingly resistant to further chemotherapy treatments. The patient’s response to therapy becomes briefer and weaker with each additional course of therapy, such that eventually further chemotherapy would offer no clinical benefit.

•A ~~operating~~number ~~restrictions~~of passive immunotherapies, ~~partial~~such ~~suspension~~as orrituximab ~~total~~and ~~shutdown~~radioimmunotherapeutic agents (radioisotopes linked to monoclonal antibodies), are approved by the FDA for the treatment of ~~production;~~FL. A monoclonal antibody is a type of antibody produced in large quantity that is specific to an antigen that is expressed by tumor cells and also by some normal cells. These therapies have been used as primary treatment and also as part of combination induction therapy including chemotherapy and rituximab based therapy is considered to be the standard of care to treat FL. In an effort to prolong the duration of the clinical remission monoclonal antibodies have increasingly been used as maintenance therapies.

•If ~~refusing~~approved ~~requests~~to ~~for~~treat ~~510(k)~~FL, ~~clearance~~BiovaxID orwill ~~PMA~~face ~~approval~~competition from other approved drugs, including rituximab maintenance. Penetrating a market and achieving usage by physicians and patients in the face of ~~new~~an ~~products;~~established standard of care is anticipated to represent a significant marketing challenge.

•If ~~withdrawing~~approved ~~510(k)~~to ~~clearance~~treat MCL, BiovaxID will be required to compete with other approved and/or ~~PMA~~development ~~approvals~~therapies ~~already~~for ~~granted~~the treatment of MCL. There is currently no consensus standard of care for the first line treatment of MCL; however, there are a number of FDA-approved agents used for the treatment of MCL both in first line settings and in patients in relapse.

•Competition ~~criminal~~for ~~prosecution.~~AutovaxID®

~~The~~There ~~FDA~~are ~~also~~many ~~has~~kinds of technologies for the ~~authority~~manufacture of cell-based products. The technology relied upon by Biovest’s instruments and disposables are referred to ~~require~~as ~~repair~~hollow fiber perfusion, ~~replacement~~which oris ~~refund~~not ofwidely accepted for large-scale manufacturing and, notwithstanding Biovest’s development efforts, may not become widely accepted in the ~~cost~~future. Biovest’s hollow fiber bioreactors must compete with many other kinds of ~~any~~cell-based ~~medical~~manufacturing ~~device~~instruments including, but not limited to, stirred-tank reactors; airlift fermentors; roller bottles; packed bed reactors; two-chamber reactors; ceramic matrix systems; batch fermentation techniques; and WAVE bioreactors. There can be no assurance that Biovest’s hollow fiber systems will gain widespread acceptance competing with other established technologies marketed by industry leaders such as General Electric, Lonza, 3M, Sartorius Stedim, Thermo Scientific and Sandoz Biopharmaceuticals.

~~The~~Competition ~~FDA~~for ~~also~~cell-based ~~administers~~instruments ~~certain controls~~is ~~over~~intense. ~~the~~Most ~~export~~ of ~~medical devices from~~ the ~~U.S.~~developers, asmanufacturers ~~international~~and ~~sales~~marketers of ~~medical~~cell-based ~~devices~~manufacturing ~~that~~instruments ~~have not received FDA approval~~ are ~~subject to FDA export requirements. Additionally~~much larger, ~~each~~more ~~foreign~~entrenched ~~country~~with ~~subjects~~potential ~~such~~customers ~~medical~~and ~~devices~~better tofinanced ~~its own~~than ~~regulatory~~Biovest ~~requirements.~~which Inplaces ~~the~~Biovest ~~EU,~~at a ~~single~~competitive ~~regulatory approval process has been created, and approval is represented by the “CE” Mark~~disadvantage.

~~Combination~~Competition ~~Product~~for ~~Regulation~~SinuNasal™

~~Combination~~CS ~~products~~is one ~~are comprised~~ of ~~two~~the or more ~~regulated~~ ~~components,~~prevalent ~~e.g.,~~chronic aillnesses ~~drug~~in ~~and~~the ~~a device~~U.S., aaffecting ~~biologic~~persons ~~and~~of aall ~~device,~~age orgroups. aApproximately ~~biologic~~31 million ~~and~~Americans ~~a drug, that~~ are ~~physically~~found ~~combined~~to ~~and~~be ~~produced~~suffering asfrom arhinosinusitis ~~single~~every ~~product~~year, orwith ~~are~~an ~~packaged~~estimated ~~together,~~90% orof ~~are~~these ~~cross-labeled~~cases ~~for~~being ~~use with one another~~chronic. ~~In the~~For ~~U.S.~~unknown reasons, athe ~~combination~~incidence ~~product~~of isthis ~~assigned~~disease byappears ~~the FDA~~ to ~~one~~be ofincreasing ~~the~~yearly. ~~Agency’s~~This ~~centers,~~results ~~such~~in asa ~~the~~conservative ~~Center~~estimate ~~for~~of ~~Drug~~18-22 million ~~Evaluation~~CS-related ~~and~~physician ~~Research~~visits ~~(“CDER”)~~in or the ~~Center~~U.S. ~~for~~each ~~Devices~~year and ~~Radiological Health (“CDRH”). FDA identifies the center with primary authority over~~ a ~~combination~~direct ~~product~~treatment ~~based~~cost ~~on an assessment~~ of ~~the~~$3 ~~combination~~to ~~product’s~~$4.5 ~~“primary~~billion annually. ~~mode~~CS ofis ~~action” defined as~~ the ~~single~~fifth ~~mode~~most ofcommon ~~action~~disease oftreated awith ~~combination~~antibiotics, ~~product~~and ~~that~~up ~~provides~~to ~~the~~64% ~~most~~of ~~important therapeutic~~patients ~~action~~with ofAIDS ~~the~~develop ~~combination product~~CS. The ~~“most~~lack ~~important~~of ~~therapeutic~~an ~~action”~~effective istreatment ~~the~~for ~~mode~~CS ofhas ~~action~~historically ~~expected~~been todue ~~make the greatest contribution~~ to ~~the~~an ~~overall~~inability ~~intended therapeutic effects~~ of the ~~combination~~medical ~~product.~~community ~~The center~~ to ~~which~~ ~~the~~identify ~~product is assigned will have primary jurisdiction over~~ the underlying ~~regulation~~cause of the ~~combination product~~condition. ~~For~~Due ~~instance,~~to iflack ~~FDA~~of ~~assigns~~knowledge aregarding ~~product to CDRH,~~ the ~~appropriate~~cause ~~pathway~~of toCS, ~~market~~most ~~pathway~~treatment ~~would~~methods ~~likely~~for beCS ahave ~~510(k)~~focused ~~clearance~~only oron athe ~~PMA approval.~~symptoms Ifof ~~FDA assigns a product to CDER,~~ the ~~appropriate pathway to market would likely be an NDA approval~~disease.

~~Other~~Historically, ~~Regulation~~the treatment of CS has largely focused on the use of antibiotics, intranasal or orally administered corticosteroids, and sinus surgery. While antibiotics are useful in treating the acute ~~United~~exacerbations ~~States~~that result from the bacterial invasion of the damaged paranasal tissue of CS patients, no antibiotic has proven effective in eradicating the underlying cause of CS. Intranasal and orally administered corticosteroids, which are potent anti-inflammatory hormones, have been used to reduce the inflammation and immune response that play a role in CS, but oral corticosteroids can cause serious side effects and must be avoided or cautiously used with patients that have certain conditions, such as gastrointestinal ulcers, renal disease, hypertension, diabetes, osteoporosis, thyroid disorders, and intestinal disease. Surgery is frequently used in CS patients to improve the drainage of their sinuses based on the assumption that the disease can be reversed by identifying and correcting the obstruction associated with the condition, but while such surgery usually offers temporary relief of symptoms, studies have shown that it is typically not curative.

~~The~~If ~~Biologics~~approved Price Competition and Innovation Act (2010) establishes an abbreviated approval pathway for “biosimilar” biological products. Among the provisions potentially applicable to our products are: (1) innovator manufacturers of reference biological products (such as ~~BiovaxID®) are granted 12 years of exclusive use before biosimilars can be approved for marketing in the U.S. and (2) an application for~~ a ~~biosimilar~~prescription ~~product~~medical ~~may~~device, ~~not~~SinuNasal bewill ~~submitted~~compete towith over-the-counter ~~FDA~~nasal ~~until~~irrigation 4devices. ~~years~~Accordingly, ~~after~~if ~~the date on which the BLA for the reference product was first~~ approved~~. FDA~~, iswe ~~still~~expect SinuNasal ~~early in the process of developing regulations~~ to ~~implement~~face ~~the provisions~~significant ~~of this legislation~~competition.

~~Toxic~~36 Substances Control Act. The Environmental Protection Agency (“EPA”), has promulgated regulations under Section 5 of the Toxic Substances Control Act (“TSCA”), which require notification procedures for review of certain so-called intergeneric microorganisms before they are introduced into commerce. Intergeneric microorganisms are those formed by deliberate combinations of genetic material from organisms classified in different taxonomic genera, which are types of animal or plant groups. The regulations provide exemptions from the reporting requirements for new microorganisms used for research and development when the researcher or institution is in mandatory compliance with the National Institutes of Health Guidelines for Research Involving Recombinant DNA Molecules (“NIH Guidelines”). Those researchers voluntarily following the NIH Guidelines can, by documenting their use of the NIH Guidelines, satisfy EPA’s requirements for testing in contained structures. The EPA may enforce the TSCA through enforcement actions such as seizing noncompliant substances, seeking injunctive relief, and assessing civil or criminal penalties. We believe that our research and development activities involving intergeneric microorganisms comply with the TSCA, but there can be no assurance that restrictions, fines or penalties will not be imposed on us in the future.

42Table of Contents

~~Health Care Coverage and Reimbursement. Commercial success in marketing and selling our products depends~~PATENTS, inTRADEMARKS ~~part,~~AND onPROTECTION ~~the~~OF ~~availability~~PROPRIETARY ofTECHNOLOGY adequate coverage and reimbursement from third-party health care payers, such as government and private health insurers and managed care organizations. Third-party payers are increasingly challenging the pricing of medical products and services. Government and private sector initiatives to limit the growth of health care costs, including price regulation, competitive pricing, coverage and payment policies, and managed-care arrangements, are continuing in many countries where we do business, including the U.S. These changes are causing the marketplace to put increased emphasis on the delivery of more cost-effective medical products.

~~Government~~We ~~programs,~~are ~~including~~pursuing ~~Medicare~~a ~~and~~number ~~Medicaid,~~of ~~private~~methods ~~health~~to ~~care~~establish ~~insurance~~ and ~~managed-care~~maintain ~~plans~~market ~~have~~exclusivity ~~attempted to control costs by limiting the amount of reimbursement they will pay~~ for ~~particular procedures or treatments. This has created an increasing level of price sensitivity among customers for~~ our ~~products.~~product ~~Examples~~candidates ofto ~~how~~the ~~limits~~greatest onextent ~~drug~~possible, ~~coverage and reimbursement in the U.S. may~~including ~~cause~~seeking ~~drug~~patent ~~price~~protection, ~~sensitivity include~~ the ~~growth~~use of ~~managed~~statutory ~~care,~~market ~~changing~~exclusivity ~~Medicare reimbursement methodologies~~provisions, and ~~drug~~otherwise ~~rebates~~protecting ~~and~~our ~~price~~intellectual ~~controls~~property. Some third-party payors must also approve coverage for new or innovative devices or therapies before they will reimburse health care providers who use the medical devices or therapies. Even though a new medical product may have been cleared for commercial distribution, we may find limited demand for the product until reimbursement approval has been obtained from governmental and private third-party payors.

~~Anti-Kickback~~Our success ~~Laws.~~depends Inin ~~the~~part ~~U.S.,~~on ~~there~~our ~~are~~ability ~~federal~~to obtain and ~~state~~maintain ~~anti-kickback laws~~proprietary ~~that~~protection ~~prohibit~~for ~~the~~our ~~payment~~product orcandidates, ~~receipt of kickbacks~~technology, ~~bribes~~and orknow-how; ~~other~~to ~~remuneration~~operate towithout ~~induce~~infringing the ~~purchase,~~proprietary ~~order~~rights ~~or recommendation~~ of ~~health~~others; ~~care products~~ and ~~services.~~to ~~These~~prevent ~~laws~~others ~~constrain~~from ~~the~~infringing ~~sales,~~on ~~marketing and other promotional activities of~~our ~~pharmaceutical~~proprietary ~~companies, such as us, by limiting the kinds of financial arrangements we may have with prescribers, purchasers, dispensers and users of drugs and biologics~~rights. ~~The~~Our ~~HHS~~policy ~~Office~~is ofto ~~Inspector~~seek ~~General~~to ~~(“OIG”)~~protect ~~has~~our ~~issued “Compliance~~proprietary ~~Guidance”~~position ~~for pharmaceutical manufacturers which~~by, among other ~~things~~methods, ~~identifies~~filing ~~manufacturer practices implicating the federal anti-kickback law (42~~ U.S.C. ~~§ 1320a-7b(b))~~ and ~~describes~~foreign ~~elements~~patent ofapplications anwhen ~~effective~~possible ~~compliance program.~~relating ~~The~~to ~~OIG~~our ~~Compliance~~proprietary ~~Guidance~~technology, ~~is voluntary~~inventions, and weimprovements ~~have~~that ~~not~~are ~~adopted~~important to aour ~~formal compliance program modeled after the one described in the OIG Compliance Guidance~~business. ~~Although~~We ~~none~~also ofrely ~~our~~on ~~practices~~trade ~~have~~secrets, ~~been subject to challenge under any anti~~know-~~kickback laws~~how, ~~due~~continuing totechnological ~~the breadth of the statutory provisions of some of these laws~~innovation, itand ~~is possible that some of our practices might be challenged under one or more of these laws~~ in-licensing ~~the~~opportunities ~~future. Violations of these laws can lead~~ to ~~civil~~develop and ~~criminal~~ ~~penalties,~~maintain ~~including imprisonment, fines and exclusion from participation in federal health care programs. Any such violations could have a material adverse effect on~~ our ~~business,~~proprietary ~~financial condition, results of operations or cash flows~~position.

~~Health~~We ~~Information~~have ~~Privacy~~implemented ~~and~~a ~~Security.~~multi-faceted ~~Individually~~strategy ~~identifiable health information is subject~~ to anmaintain ~~array of federal~~ and ~~state regulation.~~protect ~~Federal~~our ~~rules~~proprietary ~~promulgated~~interests ~~pursuant~~in toCyrevia™, ~~the~~involving ~~Health~~various forms ~~Information Portability and Accountability Act~~ of ~~1996~~intellectual ~~(“HIPAA”)~~property, ~~regulate~~including ~~the~~patent ~~use~~exclusivity. ~~and~~We ~~disclosure~~have ofexclusively ~~health~~licensed ~~information by “covered entities” (which includes individual and institutional providers~~ from ~~which~~JHU weseveral ~~may~~patent ~~receive~~applications ~~individually~~covering ~~identifiable health information). These regulations govern, among other things,~~ the use ~~and disclosure~~ of ~~health~~high-dose ~~information~~cyclophosphamide ~~for research purposes, and require the covered entity~~ to ~~obtain~~ ~~the~~treat ~~written~~autoimmune ~~authorization~~diseases ofand ~~the~~we ~~individual~~recently ~~before~~received ~~using~~an orAdvanced ~~disclosing health information for research. Failure~~ Notice of ~~the~~Allowance ~~covered entity to obtain such authorization (absent obtaining a waiver of the authorization requirement~~ from ~~an Institutional Review Board) could subject~~ the ~~covered~~European ~~entity~~Patent toOffice ~~civil~~for ~~and~~an ~~criminal~~application ~~penalties. As the implementation of this regulation is still in its early phases, we may experience delays and complex negotiations as we deal~~ with ~~each~~claims ~~entity’s differing~~covering ~~interpretation of~~ the ~~regulations~~use ~~and~~of ~~what~~high-dose iscyclophosphamide ~~required~~to ~~for~~treat ~~compliance~~MS. ~~Further,~~We ~~HIPAA’s~~will ~~criminal~~continue ~~provisions are not limited in their applicability~~ to ~~“covered~~aggressively ~~persons,”~~pursue ~~but~~intellectual ~~apply~~property toprotection ~~any~~around ~~“person”~~Cyrevia.In ~~that~~addition ~~knowingly and~~to in-licensed ~~violation~~patent ~~of the statute obtains or discloses individually identifiable health information. Also~~applications, ~~where~~we ~~its~~own ~~customers~~several orpatent ~~contractors~~applications ~~are~~covering ~~covered~~modified ~~entities,~~cyclophosphamide ~~including~~treatment ~~hospitals~~regimens, ~~universities,~~patient ~~physicians~~screening orprotocols ~~clinics,~~that wemaximize ~~may be required by~~ the ~~HIPAA regulations~~safety toand ~~enter~~effectiveness ~~into~~of ~~“business~~cyclophosphamide ~~associate”~~treatment ~~agreements that subject us to certain privacy and security requirements~~regimens, ~~including making its books~~ and ~~records available for audit and inspection by HHS and implementing certain health~~our ~~information~~computerized ~~privacy~~central ~~and~~risk-management ~~security~~system, ~~safeguards~~REBOOTSM. ~~In addition, many states~~ We have ~~laws~~applied ~~that~~for ~~apply~~U.S. ~~to the use~~ and ~~disclosure~~Canadian registration of ~~health~~the ~~information,~~trademark REBOOTSM and ~~these laws could~~ also ~~affect~~have ~~the~~applied ~~manner~~for inEU ~~which we conduct its research~~ and ~~other~~Canadian ~~aspects~~registration of ~~its business. Such state laws are not preempted by~~ the ~~federal~~trademark ~~privacy law where they afford greater privacy protection to the individual~~Cyrevia™. While activities to assure compliance with health information privacy laws are a routine business practice, we are unable to predict the extent to which its resources may be diverted in the event of an investigation or enforcement action with respect to such laws.

~~Foreign~~A ~~Regulation~~list of published U.S. and foreign patent applications within the Cyrevia™ portfolio, which are licensed or wholly or jointly owned by us are as follows:

Whether or not we obtain FDA approval for a product, we must obtain approval of a product by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the product in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing, and reimbursement also vary greatly from country to country. Although governed by the applicable country, clinical trials conducted outside of the U.S. typically are administered under a three-phase sequential process similar to that discussed above for pharmaceutical products. Clinical trials conducted in the EU must comply with the EU Clinical Trials Directive.


Application Publication No.	Title and Inventor(s)	Filing Date/Publication Date	Countries/Regions
US2007/0202077	USE OF HIGH-DOSE OXAZAPHOSPHORINE DRUGS FOR TREATING IMMUNE DISORDERS by Robert A. Brodsky et al.	Dec. 4, 2006/Aug. 30, 2007	United States

WO2007/065167	USE OF HIGH-DOSE OXAZAPHOSPHORINE DRUGS FOR TREATING IMMUNE DISORDERS by Robert A. Brodsky et al.	Dec. 4, 2006/Jun. 7, 2007	Australia, Canada, Europe, Mexico

WO2008/034071	METHOD OF IDENTIFYING PATIENTS SUITABLE FOR HIGH-DOSE CYCLOPHOSPHAMIDE TREATMENT by Robert A. Brodsky et al.	Sept. 14, 2007/Mar. 20, 2008	United States

WO2008/034074	USE OF HIGH-DOSE CYCLOPHOSPHAMIDE IN COMBINATION WITH ANTI-IDIOTYPIC VACCINES IN ANTI-CANCER THERAPY by Robert A. Brodsky et al.	Sept. 14, 2007/Dec 14, 1999	United States

WO2008/156494	USE OF HIGH-DOSE OXAZAPHOSPHORINE DRUGS IN COMBINATION WITH MONOCLONAL ANTIBODIES FOR TREATING IMMUNE DISORDERS by Robert A. Brodsky et al.	Oct. 17, 2007/Dec. 24, 2008	United States

WO2009/094456	USE OF HIGH-DOSE, POST-TRANSPLANTATION OXAZAPHOSPHORINE DRUGS FOR REDUCTION OF TRANSPLANT REJECTION by Ephraim Fuchs et al.	Jan. 22. 2009/Jul. 30, 2009	United States

US 2011/0097426	METHODS FOR SAFE AND EFFECTIVE TREATMENT USING OXAZAPHOSPHORINE DRUGS by Francis E. O’Donnell, Jr. et al.	May 21, 2010/Apr. 28, 2011	United States

US 2011/0117050	METHODS FOR PROVIDING A SYSTEM OF CARE FOR AN OXAZAPHOSPHORINE DRUG REGIMEN by Francis E. O’Donnell, Jr. et al.	May 21, 2010/May 19, 2011	United States

4337

UnderTable EU regulatory systems, we may submit marketing authorization applications either under a centralized or decentralized procedure for most products. The centralized procedure, which is available for medicines produced by biotechnology or which are highly innovative, provides for the grant of a single marketing authorization that is valid for all EU member states. Under European Commission Regulation 726/2004, the centralized authorization procedure is required for all biotechnology-derived medicinal products developed through recombinant DNA technology, controlled expression of genes coding for biologically active proteins, and hybridoma and monoclonal antibody methods. It is also required for designated orphan medicinal products and all new active substances indicated for the treatment of AIDS, cancer, neurodegenerative disorder, or diabetes. This authorization is a marketing authorization approval. The decentralized procedure provides for mutual recognition of national regulatory authority approval decisions. Under this procedure, the holder of a national marketing authorization granted by one member state may submit an application to the remaining member states. Within 90 days of receiving the applications and assessment report, each member state must decide whether to recognize approval. This procedure is referred to as the mutual recognition procedure. Contents

In addition, regulatory approval of prices is required in most countries other than the U.S. We face the risk that the prices which result from the regulatory approval process would be insufficient to generate an acceptable return to us or our collaborators.


Application Publication No.	Title and Inventor(s)	Filing Date/Publication Date	Countries/Regions
US 2011/0082115	METHODS FOR PROVIDING A SYSTEM OF CARE FOR AN OXAZAPHOSPHORINE DRUG REGIMEN by Francis E. O’Donnell, Jr. et al.	May 27, 2010/Apr. 7, 2011	United States

US 2007/0202077	USE OF HIGH-DOSE OXAZAPHOSPHORINE DRUGS FOR TREATING IMMUNE DISORDERS by Robert A. Brodsky et al.	Dec. 4, 2006/Aug. 30, 2007	United States

US 2011/0092462	USE OF HIGH-DOSE OXAZAPHOSPHORINE DRUGS FOR TREATING IMMUNE DISORDERS by Robert A. Brodsky et al.	May 11, 2010/Apr. 21, 2011	United States

US 2012/0128685	USE OF HIGH-DOSE OXAZAPHOSPHORINE DRUGS IN COMBINATION WITH MONOCLONAL ANTIBODIES FOR TREATING IMMUNE DISORDERS by Carlos Santos et al.	Sept. 22, 2011/May 24, 2012	United States

US 2012/0148577	USE OF HIGH-DOSE, POST-TRANSPLANTATION OXAZAPHOSPHORINE DRUGS FOR REDUCTION OF TRANSPLANT REJECTION by Ephraim J. Fuchs et al.	Oct. 13, 2011/Jun. 14, 2012	United States

US 2012/0148611	CYCLOPHOSPHAMIDE IN COMBINATION WITH ANTI-IDIOTYPIC VACCINES by Robert A. Brodsky et al.	Sept. 12, 2011/Jun. 14, 2012	United States

~~Intellectual~~Although ~~Property~~our Phase 3 clinical trial for SinuNase™, a drug candidate to treat CS, was not considered to be successful and we which have discontinued development;. However, from our analyses of the SinuNase™ Phase 3 clinical trial data, we identified a potential new medical device for the treatment SinuNasal for CS. We have been granted U.S. Patent No. 8,211,460, which covers this treatment, and applied for U.S. registration of the trademark SinuNasal™, as we continue to investigate the development potential of this product candidate. U.S. Patent No. 8,211,460 was granted on July 3, 2012 and will expire February 12, 2030.

WeThe ~~are~~following ~~pursuing~~is ainformation ~~number~~regarding ofBiovest’s ~~methods~~owned toand ~~establish~~licensed patents and ~~maintain market~~patent ~~exclusivity~~applications ~~for~~that ~~our~~Biovest ~~product~~considers ~~candidates~~material to ~~the~~its ~~greatest~~business: ~~extent possible, including seeking patent protection, the use of statutory market exclusivity provisions, and otherwise protecting our intellectual property.~~

~~Our~~Biovest ~~success~~owns ~~depends~~several inpatents ~~part~~covering onvarious ~~our~~aspects ~~ability~~of toits ~~obtain~~hollow fiber ~~and~~perfusion ~~maintain~~process, ~~proprietary~~instruments ~~protection~~and ~~for~~proprietary ~~our~~cell ~~product~~culturing ~~candidates,~~methods. ~~technology,~~Biovest’s ~~and~~patents ~~know-how;~~also tocover ~~operate without~~aspects ~~infringing~~of ~~the~~its ~~proprietary~~therapeutic ~~rights~~vaccine ofproduction ~~others;~~process. ~~and~~Biovest plans to ~~prevent~~continue ~~others~~pursuing ~~from~~patent ~~infringing~~and ~~our~~other proprietary ~~rights.~~protection ~~Our~~for ~~policy~~its product iscandidates, ~~to seek to protect~~ its ~~proprietary~~technology ~~position~~and byknow-how. Currently, ~~among~~Biovest ~~other~~has ~~methods,~~two ~~filing~~issued U.S. ~~and~~patents. ~~foreign~~Additionally, Biovest has several patent applications ~~when possible~~that ~~relating~~are topending. ~~its~~Biovest ~~proprietary~~presently ~~technology,~~issued ~~inventions,~~U.S. ~~and~~patents ~~improvements~~will ~~that~~expire ~~are~~in ~~important~~July to2013 ~~its~~and ~~business~~November 2017. WeA ~~also~~list ~~rely~~of onBiovest’s ~~trade~~U.S. ~~secrets,~~and ~~know-how,~~foreign ~~continuing~~patents ~~technological innovation,~~ and ~~in-licensing~~published ~~opportunities~~patent toapplications ~~develop~~are ~~and~~as ~~maintain our~~follows: ~~proprietary position.~~

We have implemented a multi-faceted strategy to maintain and protect our proprietary interests in Cyrevia™, involving various forms of intellectual property, including patent exclusivity. We have exclusively licensed from JHU several patent applications covering the use of high-dose cyclophosphamide to treat autoimmune diseases and we recently received an Advanced Notice of Allowance from the European Patent Office for an application with claims covering the use of high-dose cyclophosphamide to treat MS. In addition to in-licensed patent applications, we own several patent applications covering modified cyclophosphamide treatment regimens, patient screening protocols that maximize the safety and effectiveness of cyclophosphamide treatment regimens, and our computerized central risk-management system, REBOOTSM. We have also applied for registration of the trademark REBOOTSM and will continue to aggressively pursue intellectual property protection around Cyrevia™.


Patent No.	Title and Inventor(s)	Filing Date/Issue Date	Expiration Date
5,541,105	METHOD OF CULTURING LEUKOCYTES by Georgiann B. Melink	Apr. 26, 1994/Jul. 30, 1996	July 30, 2013

6,001,585	MICRO HOLLOW FIBER BIOREACTOR by Michael J. Gramer	Nov. 14, 1997/Dec 14, 1999	Nov. 14, 2017

A38 ~~list of published U.S. and foreign patent applications within the Cyrevia™ portfolio, which are licensed or wholly or jointly owned by us are as follows:~~

Application Publication No.	Title and Inventor(s)	Filing Date/PublicationDate	Countries/Regions
US2007/0202077	USE OF HIGH-DOSE OXAZAPHOSPHORINE DRUGS FOR TREATING IMMUNE DISORDERS by Robert A. Brodsky et al.	Dec. 2, 2006/Aug. 30,2007	United States
WO2007/065167	USE OF HIGH-DOSE OXAZAPHOSPHORINE DRUGS FOR TREATING IMMUNE DISORDERS by Robert A. Brodsky et al.	Dec. 2, 2006/June 7,2007	Australia,Canada, Europe,Mexico
WO2008/034071	METHOD OF IDENTIFYING PATIENTS SUITALE FOR HIGH-DOSE CYCLOPHOSPHAMIDE TREATMENT by Robert A. Brodsky et al.	Sept. 14, 2007/Mar. 20,2008	United States
WO2008/034074	USE OF HIGH-DOSE CYCLOPHOSPHAMIDE IN COMBINATION WITH ANTI-IDIOTYPIC VACCINES IN ANTI-CANCER THERAPY by Robert A. Brodsky et al.	Nov. 14, 1997/Dec 14,1999	United States
WO2008/156494	USE OF HIGH-DOSE OXAZAPHOSPHORINE DRUGS IN COMBINATION WITH MONOCLONAL ANTIBODIES FOR TREATING IMMUNE DISORDERS by Robert A. Brodsky et al.	Sept. 14, 2007/Mar. 20,2008	United States


Foreign Patent No.	Title and Inventor(s)	Filing Date/Issue Date	Expiration Date
EP 2027247 (UK)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26, 2011	May 21, 2027

DE602007012238D (Germany)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26, 2011	May 21, 2027

AT2027247 (Austria)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26, 2011	May 21, 2027

P2027247 (Switzerland)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26, 2011	May 21, 2027

FR2027247 (France)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26, 2011	May 21, 2027

GB2027247 (Great Britain)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	May 21, 2007/Jan. 26, 2011	May 21, 2027

Application Publication No.	Title and Inventor(s)	Filing Date/~~PublicationDate~~Publication Date	Countries/Regions
WO2009/094456	USE OF HIGH-DOSE, POST-TRANSPLANTATION OXAZAPHOSPHORINE DRUGS FOR REDUCTION OF TRANSPLANT REJECTION by Ephraim Fuchs et al.	Jan. 22. 2009/July 30,2009	United States
US 2009/0215022	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Aug. 27, 2009	United States
US 2011/0097426	METHODS FOR SAFE AND EFFECTIVE TREATMENT USING OXAZAPHOSPHORINE DRUGS by Francis E. O’Donnell, Jr. et al.	May 21, 2010/April 28,2011	United States
US 2009/0269841	METHOD AND SYSTEM FOR THE PRODUCTION OF CELLS AND CELL PRODUCTS AND APPLICATIONS THEREOF by Robert J. Wojciechowski et al.	Nov. 20, 2008/Oct. 29, 2009	United States
US 2011/0117050	METHODS FOR PROVIDING A SYSTEM OF CARE FOR AN OXAZAPHOSPHORINE DRUG REGIMEN by Francis E. O’Donnell, Jr. et al.	May 21, 2010/May 19,2011	United States
EP 2029722	METHOD AND SYSTEM FOR THE PRODUCTION OF CELLS AND CELL PRODUCTS AND APPLICATIONS THEREOF by Robert J. Wojciechowski et al.	May 21, 2007/Mar. 4, 2009	Europe
US 2011/0082115	METHODS FOR PROVIDING A SYSTEM OF CARE FOR AN OXAZAPHOSPHORINE DRUG REGIMEN by Francis E. O’Donnell, Jr. et al.	May 27, 2010/April 7,2011	United States
EP240991	METHOD AND SYSTEM FOR THE PRODUCTION OF CELLS AND CELL PRODUCTS AND APPLICATIONS THEREOF by Robert J. Wojciechowski et al.	May 21, 2007/Dec. 6, 2007	Europe
US 2012/0114634	METHODS FOR INDUCING A SUSTAINED IMMUNE RESPONSE AGAINST A B-CELL IDIOTYPE USING AUTOLOGOUS ANTI-IDIOTYPIC VACCINES THEREOF by Angelos M. Stergiou et al.	Nov. 21, 2011/May 10, 2012	United States
CA 2,739,918	METHODS FOR INDUCING A SUSTAINED IMMUNE RESPONSE AGAINST A B-CELL IDIOTYPE USING AUTOLOGOUS ANTI-IDIOTYPIC VACCINES THEREOF by Angelos M. Stergiou et al.	Oct. 7, 2009/Apr. 15, 2010	Canada
EP 2344184	METHODS FOR INDUCING A SUSTAINED IMMUNE RESPONSE AGAINST A B-CELL IDIOTYPE USING AUTOLOGOUS ANTI-IDIOTYPIC VACCINES THEREOF by Angelos M. Stergiou et al.	Oct. 7, 2009/Jul/ 20, 2011	Europe

~~Our~~39 Phase 3 clinical trial for SinuNase™, a drug candidate to treat CS, was not considered to be successful and we have discontinued development of this drug. However, from the analyses of the SinuNase’s Phase 3 clinical trial data, we identified a potential new treatment SinuNasal™ Lavage System (SinuNasal) for CS. We have filed a U.S. patent application to protect this treatment and applied for U.S. registration of the trademark SinuNasal™, as we continue to investigate the development potential of this product.

TheTable followingof is information regarding Biovest’s owned and licensed patents and patent applications that we consider material to its business: Contents

Biovest owns several patents covering various aspects of its hollow fiber perfusion process, instruments and proprietary cell culturing methods. The patents also cover aspects of our therapeutic vaccine production process. Biovest plans to continue pursuing patent and other proprietary protection for our cancer vaccine technology and instrumentation. Currently, Biovest has two (2) issued U.S. patents and patents granted in several European countries under the European Patent Convention. Additionally, Biovest has filed several U.S. and foreign patent applications that are pending. Biovest’s presently issued U.S. patents will expire in July 2013 and November 2017. A list of Biovest’s U.S. and foreign patents and published patent applications are as follows:


Application Publication No.	Title and Inventor(s)	Filing Date/Publication Date	Countries/Regions
JP 2012-505229	METHODS FOR INDUCING A SUSTAINED IMMUNE RESPONSE AGAINST A B-CELL IDIOTYPE USING AUTOLOGOUS ANTI-IDIOTYPIC VACCINES THEREOF by Angelos M. Stergiou et al.	Oct. 7, 2009/Mar. 1, 2012	Japan

US 2011/0212493	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	Apr. 22, 2011/Sep. 1, 2011	United States

AU 2009308354	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	Oct. 22, 2009/Apr. 29, 2009	Australia

CA 2,741,481	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	Oct. 22, 2009/Apr. 29, 2009	Canada

EP 2346984	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	Oct. 22, 2009/Jul. 27, 2011	Europe

IL 212387	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	Oct. 22, 2009/Apr. 29, 2009	Israel

JP 2012-506257	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	Oct. 22, 2009/Mar. 15, 2012	Japan

WO 2012/021840	MATERIALS AND METHODS FOR DESIGNING AUTOLOGOUS IDIOTYPE VACCINES AND TREATMENT OF B-CELL MALIGNANCIES by Carlos Santos et al.	Aug. 12, 2011/Feb. 16, 2012	International

WO 2012/064760	MATERIALS AND METHODS FOR DIRECTING AN IMMUNE RESPONSE AGAINST AN EPITOPE by Carlos Santos et al.	Nov. 9, 2011/May 18, 2012	International

U.S. Patent No.	Title and Inventor(s)	Filing Date/Issue Date	ExpirationDate
5,541,105	METHOD OF CULTURING LEUKOCYTES by Georgiann B. Melink	Apr. 26, 1994/Jul. 30, 1996	July 30, 2013
6,001,585	MICRO HOLLOW FIBER BIOREACTOR by Michael J. Gramer	Nov. 14, 1997/Dec 14, 1999	Nov. 14, 2017

Biovest has filed PCT applications based on or related to various aspects of its analyses of clinical benefit based on isotype, and to sequencing results matching vaccine to antigen coverage for the development of a companion diagnostic and to use of the AutovaxID® instrument for the production of viruses, virus-like particles, and antiviral vaccines such as those targeting influenza and other contagious diseases. In addition to Biovest’s independent research and development programs, it is anticipated that Biovest’s collaborations with industry and research partners will generate additional valuable intellectual property, which will be wholly-owned, jointly owned and/or licensed to Biovest.

Foreign Patent No.	Title and Inventor(s)	Filing Date/Issue Date	ExpirationDate
EP 2027247 (UK)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26,2011	May 21, 2027
DE602007012238D (Germany)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26,2011	May 21, 2027
AT2027247 (Austria)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26,2011	May 21, 2027
P2027247 (Switzerland)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26,2011	May 21, 2027
FR2027247 (France)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26,2011	May 21, 2027

Biovest also possesses licensed intellectual property used in the development and manufacture of BiovaxID™. BiovaxID is manufactured with a proprietary cell line, which Biovest has licensed on a world-wide exclusive basis from Stanford. This is significant, because Biovest believes that the use of any cell line other than its exclusively licensed cell line, in the production of a similar idiotype vaccine, would require filing a separate IND application and undergoing clinical testing evaluation by the FDA.

4540

ApplicationPublication No.	Title and Inventor(s)	Filing Date/Publication Date	Countries/Regions
US 2009/0215022	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Aug. 27,2009	United States
US 2009/0269841	METHOD AND SYSTEM FOR THE PRODUCTION OF CELLS AND CELL PRODUCTS AND APPLICATIONS THEREOF by Robert J. Wojciechowski et al.	Nov. 20, 2008/Oct. 29,2009	United States
EP 2029722	METHOD AND SYSTEM FOR THE PRODUCTION OF CELLS AND CELL PRODUCTS AND APPLICATIONS THEREOF by Robert J. Wojciechowski et al.	May 21, 2007/Mar. 4, 2009	Europe
EP11173373.9	METHOD AND SYSTEM FOR THE PRODUCTION OF CELLS AND CELL PRODUCTS AND APPLICATIONS THEREOF by Robert J. Wojciechowski et al.	May 21, 2007/December 6,2007	Europe
US 13/081,426	METHODS FOR INDUCING A SUSTAINED IMMUNE RESPONSE AGAINST A B-CELL IDIOTYPE USING AUTOLOGOUS ANTI-IDIOTYPIC VACCINES THEREOF by Angelos M. Stergiou et al.	April 6, 2011/not yetpublished	United States
CA 2,739,918	METHODS FOR INDUCING A SUSTAINED IMMUNE RESPONSE AGAINST A B-CELL IDIOTYPE USING AUTOLOGOUS ANTI-IDIOTYPIC VACCINES THEREOF by Angelos M. Stergiou et al.	October 7, 2009/April 15,2010	Canada
EP 2344184	METHODS FOR INDUCING A SUSTAINED IMMUNE RESPONSE AGAINST A B-CELL IDIOTYPE USING AUTOLOGOUS ANTI-IDIOTYPIC VACCINES THEREOF by Angelos M. Stergiou et al.	October 7, 2009/April 15,2010	Europe
JP 2011-531150	METHODS FOR INDUCING A SUSTAINED IMMUNE RESPONSE AGAINST A B-CELL IDIOTYPE USING AUTOLOGOUS ANTI-IDIOTYPIC VACCINES THEREOF by Angelos M. Stergiou et al.	October 7, 2009/April 15,2010	Japan
US 2011/0212493	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	April 22, 2011/September 1,2011	United States
AU 2009308354	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	October 22, 2009/April 29,2010	Australia
CA 2,741,481	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	October 22, 2009/April 29,2010	Canada
EP 2346984	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	October 22, 2009/April 29,2010	Europe
IL 212387	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	October 22, 2009/April 29,2010	Israel
JP 2011-533338	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	October 22, 2009/April 29,2010	Japan

46Additionally, Biovest considers trademarks to be important to its business. Biovest has established trademarks covering various aspects of its hollow fiber perfusion process, instruments and proprietary cell culturing methods (AutovaxID®, Primer HF®, Mini Max®, Xcellerator®, Acusyst-Maximizer® and Acusyst-Xcell®). Biovest has applied for the U.S. and foreign registration of the trademarks BiovaxID™ and Biovax™ in connection with its therapeutic cancer vaccine and Autovax™ in connection with its instrument used in the manufacture of BiovaxID. Biovest plans to continue aggressively pursuing trademark and other proprietary protection for its therapeutic vaccine technology and instrumentation, both nationally and internationally.

~~Biovest~~Our ~~has~~ability ~~also~~to ~~filed~~maintain aand ~~number~~solidify ofour ~~provisional~~proprietary ~~patent~~position ~~applications~~for ~~based~~our technology will depend on orour ~~related~~success in obtaining effective claims and toenforcing ~~various~~those ~~aspects~~claims once granted. We do not know whether any of ~~Biovest’s~~our ~~analysis~~patent applications or those patent applications that we license will result in the issuance of ~~clinical~~any ~~benefit~~patents. ~~based~~Our onissued ~~isotype,~~patents and tothose ~~use~~that ofmay issue in the ~~AutovaxID®~~future, or those ~~instrument~~licensed ~~for~~to us, may be challenged, invalidated, or circumvented, which could limit our ability to stop competitors from marketing related products or the ~~production~~length of ~~antiviral~~term ~~vaccines~~of ~~such~~patent asprotection ~~those~~that ~~targeting~~we ~~influenza~~may have for our product candidates. In addition, the torights ~~its~~granted ~~independent~~under ~~research~~any ~~and~~issued patents may not provide us with proprietary protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies or duplicate any technology developed by us. Because of the extensive time required for development, ~~programs~~testing and regulatory review of a potential product, it is ~~anticipated~~possible that, ~~Biovest’s~~before ~~collaborations~~any ~~with~~of ~~industry~~our ~~and~~product ~~research~~candidates ~~partners~~can ~~will~~be commercialized, any related ~~generate~~patent ~~additional~~may ~~intellectual~~expire ~~property~~or ofremain ~~value,~~in ~~which~~force ~~will~~for beonly ~~wholly~~a ~~owned~~short period following commercialization, ~~jointly~~thereby ~~owned~~reducing ~~and/or~~any ~~licensed~~advantage toof ~~Biovest~~the patent.

~~Biovest~~We rely ~~also~~in ~~possesses~~some ~~licensed~~circumstances ~~intellectual~~on ~~property~~trade ~~used~~secrets into ~~the~~protect ~~development~~our ~~and~~technology, ~~manufacture~~particularly with respect to certain aspects of ~~the~~Biovest’s BiovaxID® ~~vaccine~~manufacturing process. ~~The~~ ~~BiovaxID~~However, ~~vaccine~~trade issecrets ~~manufactured~~are ~~with~~difficult ato protect. We seek to protect our proprietary technology ~~cell~~and ~~line~~processes, ~~which~~in wepart, ~~have~~by ~~licensed~~confidentiality onagreements ~~a world-wide~~with ~~exclusive~~our ~~basis~~employees, ~~from~~consultants, ~~Stanford~~scientific advisors, and other contractors. ~~This~~ isThese ~~significant~~agreements may be breached, ~~because~~and ~~Biovest~~we ~~believes~~may ~~that~~not ~~the~~have ~~use~~adequate ofremedies for any ~~cell~~breach. ~~line~~In ~~other~~addition, ~~than~~our trade ~~Biovest’s~~secrets ~~exclusively~~may ~~licensed~~otherwise ~~cell~~become ~~line,~~known inor ~~the~~be ~~production~~independently ofdiscovered aby ~~similar~~competitors. ~~idiotype~~To ~~vaccine,~~the ~~would~~extent ~~require filing~~that aour ~~separate~~employees, ~~IND~~consultants, ~~application~~or ~~and~~contractors ~~undergoing~~use ~~clinical~~intellectual ~~testing~~property ~~evaluation~~owned by others in their work for us, disputes may arise as to the ~~FDA~~rights in related or resulting know-how and inventions.

~~Additionally,~~GOVERNMENT ~~Biovest~~REGULATION considers trademarks to be important to its business. Biovest has established trademarks covering various aspects of its hollow fiber perfusion process, instruments and proprietary cell culturing methods (Acusyst-Maximizer® and Acusyst-Xcell®). Biovest has registered the trademarks BiovaxID® in connection with its therapeutic cancer vaccine and AutovaxID® in connection with its instrument used in the manufacture of BiovaxID. Biovest plans to continue aggressively pursuing trademark and other proprietary protection for Biovest’s therapeutic vaccine technology and instrumentation, including seeking protection of its trademarks internationally.

~~Our ability~~Government toauthorities ~~maintain~~in the U.S. at the federal and ~~solidify~~state ~~our~~levels ~~proprietary~~and ~~position~~in ~~for~~foreign ~~our~~countries ~~technology~~extensively ~~will~~regulate, ~~depend~~among onother ~~our~~things, ~~success~~the inresearch, ~~obtaining~~development, ~~effective~~testing, ~~claims~~manufacture, labeling, promotion, advertising, distribution, sampling, marketing, and ~~enforcing~~import ~~those~~and ~~claims~~export ~~once~~of ~~granted.~~pharmaceutical Weproducts, dobiologics, ~~not~~and ~~know~~medical ~~whether~~devices. ~~any~~All of our ~~patent~~product ~~applications~~candidates orin ~~those~~development ~~patent applications~~will ~~that~~require weregulatory/marketing ~~license~~approval ~~will~~by ~~result~~government inagencies ~~the~~prior ~~issuance~~to commercialization. ofIn ~~any~~particular, ~~patents.~~human ~~Our~~therapeutic ~~issued~~products ~~patents~~are subject to rigorous preclinical and ~~those~~clinical ~~that~~trials ~~may~~and ~~issue~~other inapproval procedures of the ~~future,~~FDA orand ~~those~~similar ~~licensed~~regulatory toauthorities ~~us,~~in ~~may~~foreign becountries. ~~challenged~~Various federal, ~~invalidated~~state, orlocal, ~~circumvented~~and foreign statutes and regulations also govern testing, ~~which~~manufacturing, ~~could~~safety, ~~limit~~labeling, ~~our~~storage, ~~ability~~and record-keeping related to ~~stop competitors~~such ~~from~~products and their marketing. ~~related~~The ~~products~~process orof obtaining these approvals and the ~~length~~subsequent process of ~~term~~maintaining substantial compliance with appropriate federal, state, local, and foreign statutes and regulations require the expenditure of ~~patent~~substantial ~~protection~~time ~~that~~and wefinancial ~~may~~resources. ~~have~~The ~~for~~FDA ~~our~~regulates ~~products~~drugs and well-characterized biologics under the Federal Food, Drug, and Cosmetic Act (“FDCA”), and implementing regulations that are adopted under the FDCA. In ~~addition~~the case of biologics, the ~~rights~~FDA ~~granted~~regulates such products under ~~any~~the ~~issued~~Public ~~patents~~Health ~~may~~Service ~~not~~Act. ~~provide~~If uswe fail to comply with ~~proprietary~~the ~~protection~~applicable requirements under these laws and regulations at any time during the product development process, approval process, or ~~competitive advantages~~after ~~against~~approval, ~~competitors~~we ~~with~~may ~~similar~~become ~~technology~~subject to administrative or judicial sanctions. ~~Furthermore~~These sanctions could include the FDA’s refusal to approve pending applications, ~~our~~withdrawals ~~competitors~~of ~~may~~approvals, ~~independently~~clinical ~~develop~~holds, ~~similar~~warning ~~technologies~~letters, product recalls, product seizures, total or ~~duplicate~~partial ~~any~~suspension ~~technology~~of ~~developed~~its byoperations, injunctions, fines, civil penalties or criminal prosecution. Any agency enforcement action could have a material adverse effect on us. ~~Because~~The FDA also administers certain controls over the export of drugs and biologics from the ~~extensive~~U.S. ~~time~~Any ~~required~~failure ~~for~~by ~~development~~us, ~~testing~~our ~~and regulatory~~suppliers ~~review~~ of amanufactured ~~potential~~drug product, itcollaborators isor licensees ~~possible~~to ~~that~~obtain or maintain, ~~before~~or any delay in obtaining, regulatory approvals could adversely affect the marketing of our ~~products~~product ~~can~~candidates beand ~~commercialized,~~our ~~any~~ability ~~related~~to ~~patent~~receive ~~may~~product ~~expire~~revenue, license revenue or ~~remain~~profit insharing ~~force~~payments. ~~for~~In ~~only~~addition, statutes, arules, ~~short~~regulations, ~~period~~and ~~following~~policies ~~commercialization,~~may ~~thereby~~change ~~reducing~~and ~~any~~new ~~advantage~~legislation ~~of the~~or ~~patent~~regulations may be issued that could delay such approvals.

WeThe FDA ~~rely~~has inextensive ~~some~~regulatory ~~circumstances~~authority onover ~~trade~~biopharmaceutical ~~secrets~~products to(drugs ~~protect~~and ~~our~~diagnostic ~~technology,~~products ~~particularly~~produced ~~with~~from ~~respect~~biologic toprocesses). ~~certain~~The ~~aspects~~principal ~~of Biovest’s~~FDA ~~BiovaxID~~regulations ~~manufacturing~~that ~~process.~~pertain ~~However,~~to ~~trade~~our ~~secrets~~cell production activity include, but are ~~difficult~~not limited to ~~protect.~~21CFR Parts We600 ~~seek~~and to610 ~~protect~~– ~~our~~General ~~proprietary~~Biological ~~technology~~Products and ~~processes,~~Standards; in21 ~~part,~~CFR byParts ~~confidentiality~~210 ~~agreements~~and ~~with~~211 ~~our~~– ~~employees,~~current ~~consultants,~~Good ~~scientific~~Manufacturing ~~advisors, and~~Practices ~~other~~for ~~contractors.~~Finished ~~These~~Pharmaceuticals; ~~agreements~~21 ~~may~~CFR bePart ~~breached,~~820 – Quality System Regulations (medical devices); and we21 ~~may~~CFR ~~not~~Part ~~have~~58 ~~adequate~~– ~~remedies~~Good Laboratory Practice for ~~any~~Non-Clinical ~~breach~~Laboratory Studies. InFDA’s ~~addition,~~guidelines ~~our~~include ~~trade~~controls ~~secrets~~over ~~may~~procedures ~~otherwise~~and ~~become~~systems ~~known~~related orto bethe ~~independently~~production ~~discovered~~of bymammalian ~~competitors.~~proteins Toand ~~the~~quality ~~extent~~control testing ~~that~~of ~~our~~any ~~employees, consultants,~~new biological drug or ~~contractors~~product ~~use~~intended ~~intellectual~~for ~~property~~use ~~owned~~in byhumans ~~others~~(including, into ~~their~~a ~~work~~somewhat ~~for~~lesser usdegree, ~~disputes~~in ~~may~~vivo ~~arise~~biodiagnostic asproducts). FDA guidelines are intended to ~~the~~assure ~~rights~~that inthe ~~related~~biological drug or ~~resulting~~product ~~know-how~~meets the requirements through rigorous testing with respect to safety, efficacy, and ~~inventions.~~meet the purity characteristics for

~~Third-Party~~41 ~~Reimbursement and Pricing Controls~~

InTable the U.S. and elsewhere, sales of pharmaceutical products depend in significant part on the availability of reimbursement to the consumer from third-party payors, such as government and private insurance plans. Third-party payors are increasingly challenging the prices charged for medical products and services. It will be time-consuming and expensive for us to go through the process of seeking reimbursement from Medicare and private payors. Our products may not be considered cost effective, and coverage and reimbursement may not be available or sufficient to allow us to sell our products on a competitive and profitable basis. The passage of the Medicare Prescription Drug and Modernization Act of 2003 imposes new requirements for the distribution and pricing of prescription drugs which may affect the marketing of our products. Contents

In identity ~~many~~and ~~foreign~~strength. ~~markets,~~FDA ~~including~~approvals for the ~~countries~~use inof ~~the~~new ~~EU,~~biological ~~pricing~~drugs ~~of pharmaceutical~~or products is(that ~~subject~~can tonever ~~governmental~~be ~~control.~~assured) Inrequire ~~the~~several ~~U.S.,~~rounds ~~there~~of ~~have~~extensive ~~been,~~preclinical testing and weclinical investigations ~~expect~~conducted ~~that~~by ~~there~~the ~~will~~sponsoring ~~continue~~pharmaceutical company prior to ~~be,~~sale aand ~~number~~use of ~~federal~~the ~~and~~product. ~~state~~At ~~proposals~~each tostage, ~~implement~~the ~~similar~~approvals ~~governmental~~granted ~~pricing~~by ~~control~~the FDA include the manufacturing process utilized to produce the product. ~~While~~Accordingly, weour ~~cannot~~cell culture ~~predict~~systems ~~whether~~used ~~such~~for ~~legislative~~the production of therapeutic or ~~regulatory~~biotherapeutic ~~proposals~~products ~~will~~(biological bedrug ~~adopted,~~or ~~the~~product) ~~adoption~~are ofsubject ~~such~~to ~~proposals~~significant ~~could~~regulation ~~have~~by athe ~~material~~FDA ~~adverse~~under ~~effect~~the onFederal ~~our~~Food, ~~business~~Drug and Cosmetic Act, ~~financial~~as ~~condition~~amended ~~and~~(the ~~profitability.~~“FD&C Act”).

47Biovest’s cell culture systems used to produce cells for diagnostic uses are regulated under the FD&C Act as Class I medical devices. Medical devices are classified by the FDA into three classes (Class I, Class II and Class III) based upon the potential risk to the consumer posed by the medical device (Class I medical devices pose the least amount of risk, while Class III medical devices and “new” devices are presumed to inherently pose the greatest amount of risk). As Class I medical devices, Biovest’s systems must be manufactured in accordance with cGMP guidelines. Sales of such systems to customers using them to manufacture materials for clinical studies and licensure do not require prior FDA approval.

~~Insurance~~The process of complying with FDA guidelines and obtaining approvals from the FDA of applications to market biopharmaceutical drugs and products is costly, time consuming and subject to unanticipated delays. There is no assurance that Biovest’s customers will be able to obtain FDA approval for biological drugs and products produced with Biovest’s systems, and failure to receive such approvals may adversely affect the demand for our services.

WeUnder ~~may~~the beFD&C ~~exposed~~Act, toBiovest’s ~~potential~~customers ~~product~~must ~~liability~~establish ~~claims~~and byvalidate ~~users~~standard ofoperating procedures (“SOPs”) utilizing our ~~products~~cell culture technologies in their drug master files. WeBiovest provides ~~presently~~assistance ~~maintain~~in ~~product~~operational, ~~liability~~validation, ~~insurance~~calibration ~~coverage~~and preventive maintenance SOPs to customers, inas ~~connection~~needed, ~~with~~to ~~our~~support ~~systems~~their product development and ~~other~~commercialization ~~products~~processes. For example, Biovest will typically provide existing and prospective customers who are utilizing Biovest’s contract production services, inor ~~amounts~~constructing ~~which~~production wefacilities ~~believe~~based on Biovest’s cell culture technologies with information to beenable ~~adequate~~such customers to comply with the FDA’s guidelines required for facility layout and ondesign. ~~acceptable~~This ~~terms~~information may be provided either in a drug/biologic master file that Biovest gives permission to customers to cross reference in their submission to the FDA, or provided to customers to include in their FDA submissions.

~~Although,~~As weBiovest ~~believe~~currently ~~that~~does ~~our current level of coverage is adequate to protect our~~ business ~~from~~in ~~foreseeable~~a ~~product~~significant ~~liability~~number ~~and~~of ~~clinical trial claims~~countries, wein ~~may~~addition ~~seek~~ to ~~increase our insurance coverage in~~ the ~~future~~requirements ~~in the event that we significantly increase our level~~ of ~~contract production services. There~~ ~~can~~the ~~be no assurance; however~~FDA, ~~that~~Biovest weis ~~will~~subject ~~be able~~ to ~~maintain~~the ~~our~~regulations ~~existing~~of ~~coverage~~other orcountries ~~obtain~~and ~~additional~~governmental ~~coverage~~agencies onwhich ~~acceptable~~apply ~~terms, or that such insurance will provide adequate coverage against all potential claims~~ to ~~which we may be exposed. A successful partially or completely uninsured claim against us could have a material adverse effect on our operations.~~ Biovest’s ~~cell~~goods ~~culture~~and ~~production~~ services ~~may~~when ~~expose~~sold us to potential risk of liability. We seek to obtain agreements from contract production customers to mitigate such potential liability and to indemnify us under certain circumstances. There can be no assurance, however, that we will be successful in ~~obtaining~~their ~~such agreements or that such indemnification, if obtained, will adequately protect us against potential claims~~jurisdiction.

~~The~~Biovest ~~terms~~is subject to various regulations regarding handling and ~~conditions~~disposal of ~~our~~potentially ~~sales~~hazardous materials, wastes and ~~instruments~~chemicals ~~include~~such ~~provisions~~as ~~which~~cells and their secreted waste products, including those enforced ~~are~~by ~~intended~~the toU.S. ~~limit~~Environmental ~~our~~Protection ~~liability~~Agency ~~for~~(“EPA”) ~~indirect,~~and ~~special,~~various ~~incidental~~state orand ~~consequential~~local ~~damages~~agencies.

~~Executive~~Pharmaceutical ~~Officers~~Product ~~of the Registrant, as~~Regulation ~~of September 30, 2011~~

Name	Age	Position
Francis E. O’Donnell, Jr., M.D.	61	Chief Executive Officer (“CEO”), Chairman and Director
Samuel S. Duffey, Esq.	66	President and General Counsel
Garrison J. Hasara, CPA	42	Acting Chief Financial Officer (“CFO”) and Controller
James A. McNulty, CPA	61	Secretary and Treasurer
Carlos F. Santos, Ph.D.	34	Chief Science Officer (“CSO”)
Douglas W. Calder	44	Vice President, Strategic Planning & Capital Markets

Regulation by governmental authorities in the U.S. and other countries is a significant factor in the manufacture and marketing of pharmaceuticals and in our ongoing research and development activities. Most, if not all, of our product candidates require regulatory approval by governmental agencies prior to commercialization. In the case of biologics, they are subject to rigorous preclinical testing and clinical trials and other pre-marketing approval requirements by the FDA and foreign regulatory authorities.

~~Francis E.~~Each ~~O’Donnell, Jr., M.D. has served as our Chairman~~ of ~~the~~these ~~Board~~three ~~since~~phases our Company’s founding in March 2002 and has served as our CEO since September 2003. Dr. O’Donnell also served as our President from September 2003 through November 2004. Since February 2009, Dr. O’Donnell has been Chief Executive Officer and Chairman of Biovest. Since 2003, Dr. O’Donnell had been a Director and Vice-Chairman (non-executive) of Biovest. Since May 2002, Dr. O’Donnell has also been the Chairman and a Director of BioDelivery Sciences International, Inc. (“BDSI”), a publicly traded drug delivery technology company. Since 1999, Dr. O’Donnell has served as manager of Hopkins Capital Group, LLC (“Hopkins”), an affiliation of limited liability companies which engage in business development of disruptive healthcare technologies. The Hopkins entities are also significant stockholders of Biovest and BDSI. Dr. O’Donnell is adiscussed ~~1975,~~further ~~summa cum laude graduate of the Johns Hopkins School of Medicine~~below. He received specialty training at the Wilmer Ophthalmological Institute, Johns Hopkins Hospital. He is the former Professor and Chairman, Department of Ophthalmology, St. Louis University School of Medicine. Dr. O’Donnell has published over 30 peer-reviewed scientific articles and has been awarded over 34 U.S. patents. He is the recipient of the 2000 Jules Stein Award from Retinitis Pigmentosa International. He is a Trustee for St. Louis University. We believe that Dr. O’Donnell’s experience and skills make him a qualified and valuable member of our management team and Board of Directors.

~~Effective~~Preclinical asPhase ~~of December 20, 2011, Dr. O’Donnell was appointed by our Board of Directors to serve in the position of Executive Chairman of the Board.~~

~~Samuel~~The S.activities ~~Duffey,~~required ~~Esq.~~before ~~was~~a ~~appointed~~product ~~our~~may ~~President~~be marketed in ~~December 2008~~the U.S. and ~~continues~~other tocountries ~~serve~~begin aswith ~~our~~preclinical ~~General~~testing ~~Counsel,~~not ainvolving ~~position~~human ~~that~~subjects. heThe ~~has held~~development ~~since~~of ~~2003.~~a ~~Mr. Duffey~~new ~~served~~pharmaceutical aagent ~~director~~begins with the discovery or synthesis of ~~our~~a ~~Company~~new ~~from~~molecule ~~2003~~or towell-characterized ~~2005~~biologic. ~~Since~~These ~~February~~agents ~~2009,~~are ~~Mr. Duffey~~screened for ~~has~~pharmacological ~~been~~activity ~~President~~using various animal and ~~General~~tissue ~~Counsel~~models, with the goal of ~~Biovest~~selecting a lead agent for further development. ~~Prior~~Additional studies are conducted to ~~that,~~confirm ~~Mr. Duffey~~pharmacological ~~practiced~~activity, ~~business~~to ~~law~~generate ~~with~~safety ~~Duffey~~data, and ~~Dolan~~to evaluate ~~P.A.~~prototype ~~beginning~~dosage informs ~~1992~~for appropriate release and activity characteristics. ~~From~~Once ~~February~~the ~~2000~~pharmaceutically toactive ~~September~~molecule ~~2003~~is fully characterized, ~~Mr. Duffey~~an ~~served~~initial aspurity profile of the ~~non-executive~~agent ~~chairman~~is ~~and~~established. asDuring athis ~~member~~and subsequent stages of development, the ~~Board~~agent ofis ~~Directors~~analyzed ofto ~~Invisa,~~confirm ~~Inc.,~~the aintegrity ~~small~~and ~~publicly~~quality ~~held~~of ~~safety~~material ~~company~~produced. In addition, development and ~~from~~optimization ~~October 2001~~of the initial dosage forms to ~~May 2004~~be used in clinical trials are completed, ~~Mr. Duffey~~together ~~also~~with ~~served~~analytical asmodels ~~the~~to ~~non-executive~~determine ~~chairman~~product stability and asdegradation. aA ~~member~~bulk supply of the ~~Board~~active ofingredient ~~Directors~~to ofsupport ~~FlashPoint~~the ~~International,~~necessary ~~Inc~~dosing in initial clinical trials must be secured., ~~a publicly~~Upon ~~held~~successful ~~automotive~~completion ~~parts~~of ~~company~~preclinical ~~which~~safety isand ~~currently~~efficacy ~~named~~studies ~~Navitrak~~in ~~International~~animals, ~~Corporation. Mr. Duffey~~an ~~received~~IND ~~his~~submission ~~B.A.~~is prepared and ~~J.D.~~provided ~~degrees~~to ~~from~~the ~~Drake~~FDA ~~University.~~for Wereview ~~believe~~prior ~~that~~to Mrcommencement of human clinical trials. ~~Duffey’s~~ ~~experience~~The ~~and~~IND ~~skills~~consists ~~make~~of ~~him~~the ainitial ~~qualified~~chemistry, analytical, formulation, and ~~valuable~~animal ~~member~~testing ofdata ~~our~~generated ~~management~~during ~~team.~~the Mrpreclinical phase. ~~Duffey~~ ~~has~~In ~~been~~general, ~~instrumental~~the inreview ~~facilitating~~period ~~our~~for ~~capital~~an ~~raises~~IND ~~and~~submission ~~was~~is ~~instrumental~~30 days, inafter ~~managing~~which, ~~our~~if ~~Company~~no ~~through~~comments are made by the ~~very~~FDA, ~~complex~~the ~~Chapter~~product 11candidate ~~process~~can be studied in Phase 1 clinical trials.

~~Effective~~42 as of December 20, 2011, Mr. Duffey was appointed to serve in the position as our Chief Executive Officer, in addition to continuing his responsibilities as our President and General Counsel. Mr. Duffey was also designated to serve as our Company’s Principal Executive Officer in connection with our dealings with our independent audit firm and filings with the SEC.

48Table of Contents

~~Garrison~~Clinical J.Phase Hasara, CPA was appointed our Acting Chief Financial Officer in January 2011, and continues to serve as our Controller, a position that he has held since June 2005. From November 2003 to June 2005, Mr. Hasara served as our Compliance Specialist. Prior to that time and prior to joining our company, from 2000 to 2003, Mr. Hasara was the Chief Financial Officer of Automotive Serivce Centers, Inc., a franchisee of Midas, Inc. In addition, from 1996 to 1999, Mr. Hasara served in various accounting roles at KForce Inc., a publicly traded staffing services company. Mr. Hasara has been a licensed Certified Public Accountant since 1993 and received his B.S. from the University of South Florida in 1991. We believe that Mr. Hasara’s experience and skills make him a qualified and valuable member of our management team.

~~James~~Following A.successful ~~McNulty,~~submission ~~CPA~~of ~~was~~an appointed and has served as our Secretary and Treasurer since Our company’s founding in March 2002. Mr. McNulty also served as our Chief Financial Officer from 2003 through 2004. From 2003 through 2007IND, ~~Mr. McNulty~~the ~~was~~sponsor ~~Chief~~is ~~Financial~~permitted ~~Officer,~~to ~~Secretary~~conduct ~~and~~clinical ~~Treasurer~~trials ~~for~~involving ~~our~~the ~~majority-owned subsidiary,~~administration ~~Biovest. Since 1999, Mr. McNulty has served as Chief Financial Officer~~ of ~~Hopkins~~the ~~Capital~~investigational ~~Group,~~product ~~LLC.~~candidate ~~Since~~to ~~2000,~~human ~~Mr. McNulty~~subjects ~~has~~under ~~served~~the ~~as Chief Financial Officer of BioDelivery Sciences International, Inc. Mr. McNulty~~supervision ~~practiced public accounting from 1971 through 1997 and co-founded Pender McNulty & Newkirk, which became one~~ of ~~Florida’s~~qualified ~~largest~~investigators ~~regional CPA firms and was a founder/principal~~ in ~~two~~accordance ~~other~~with ~~CPA~~good ~~firms.~~clinical ~~He served as Chief Financial Officer of Star Scientific, Inc~~practice., ~~from October 1998 to May 2000. From June 2000 through January 2002~~Typically, heclinical ~~served~~evaluation asinvolves Chief Financial Officer and Chief Operating Officer of American Prescription Providers, Inc. Mr. McNulty is a graduate of University of South Florida, a licensed Certified Public Accountant and a member of the ~~American~~following ~~and~~time-consuming ~~Florida Institutes of CPAs. He serves on the Board of the Tampa Chapter of Financial Executives International. We believe that Mr. McNulty’s experience~~ and ~~skills~~costly ~~make~~three-phase ~~him~~sequential aprocess: ~~qualified and valuable member of our management team.~~

~~Carlos~~• F.Phase ~~Santos, Ph~~1.~~D. was~~ ~~appointed~~Phase as1 ~~our~~clinical ~~Chief~~trials ~~Science~~are ~~Officer~~conducted in ~~March~~a ~~2009.~~limited ~~Since~~number ~~March~~of ~~2009,~~healthy ~~Dr. Santos~~individuals ~~has served as Senior Vice President, Product Development & Regulatory Affairs for our majority-owned subsidiary, Biovest. Dr. Santos manages responsibilities related~~ to ~~pharmaceutical~~determine ~~product~~the ~~development,~~drug ~~intellectual~~or ~~property~~biologics’ ~~design,~~safety ~~regulatory~~and ~~strategy~~tolerability and ~~corporate~~include ~~development~~biological ~~planning~~analyses ~~activities~~to ~~for~~determine ~~us. Dr. Santos holds~~ the ~~role~~availability ofand ~~Chief~~metabolization ~~Science Officer~~ of ~~Hopkins Capital~~the ~~Group,~~active ~~LLC,~~ingredient ~~contributing~~following ~~to its portfolio of companies since 1998~~administration. ~~Dr. Santos~~The istotal anumber ~~graduate~~ of ~~the~~subjects ~~University of Michigan where he earned a Ph.D. in Bioinformatics,~~ and ~~Washington~~patients ~~University~~included ~~(St. Louis) where he earned a B.S.~~ in ~~Computer~~ ~~Science.~~Phase At1 ~~the~~clinical ~~University~~trials ~~of Michigan~~varies, hebut ~~developed~~are ~~automated~~generally ~~natural language processing systems to integrate high-throughput genomic experimental data with known protein interaction pathways~~ in ~~metastatic prostate cancer progression. He also led~~ the ~~development~~range of a20 ~~large-scale automated search and summarization engines for biomedical documents at the University of Michigan’s National Center for Integrative Biomedical Informatics (NCIBI). From 1998~~ to ~~2001,~~80 ~~he was a researcher at Washington University’s Institute for Biomedical Computing (now the Center for Computational Biology)~~people. ~~We believe that Dr. Santos’ experience and skills make him a qualified and valuable member of our management and product development teams.~~

~~Douglas~~• W.Phase ~~Calder was appointed as our Vice President, Strategic Planning & Capital Markets in January 2011~~2. ~~Also,~~Phase in2 ~~January 2011,~~clinical ~~Mr. Calder~~trials ~~was~~involve ~~appointed~~administering ~~Vice~~the ~~President,~~drug ~~Strategic~~to ~~Planning &~~individuals ~~Capital~~who ~~Markets~~suffer ~~for~~from ~~our~~the ~~majority-owned~~target ~~subsidiary,~~disease ~~Biovest.~~or ~~From~~condition ~~December 2007~~ to ~~January~~determine ~~2011,~~the ~~Mr. Calder~~drug ~~was~~or ~~our Director~~biologics’ ofpotential ~~Investor~~efficacy ~~Relations,~~and asideal ~~well as for Biovest~~dose. ~~From~~These ~~1999~~clinical totrials ~~2007,~~are ~~Mr. Calder~~typically ~~was~~well ~~the Investor Relations Officer for Viragen~~controlled, ~~Inc.,~~closely ~~an AMEX-listed~~monitored, ~~publicly-traded~~and ~~biotechnology~~conducted ~~company.~~in ~~From 1989 to 1999, Mr. Calder was~~ a ~~financial~~ ~~portfolio~~relatively ~~manager~~small ~~with~~number aof ~~biotechnology focus working for the New York Stock Exchange Member Firms: Dean Witter Reynolds~~patients, ~~Gruntal &~~usually ~~Co.~~involving ~~and~~no ~~Moors & Cabot. Mr. Calder brings~~ more than ~~20-years~~several ofhundred ~~life~~subjects. ~~science~~These ~~executive experience~~clinical astrials arequire ~~financial~~scale ~~portfolio~~up ~~manager and investor relations professional in managing corporate communications, business development, media strategies and capital markets responsibilities~~ for usmanufacture ~~and~~of ~~Biovest.~~increasingly ~~Mr. Calder~~larger ~~received~~batches ~~his~~of ~~B.A. from~~bulk ~~Florida State University~~chemical. WeThese ~~believe~~batches ~~that~~require ~~Mr. Calder’s~~validation ~~experience~~analysis ~~and~~to ~~skills~~confirm ~~make~~the ~~him~~consistent acomposition ~~qualified and valuable member~~ of ~~our~~the ~~management~~drug ~~team.~~or biologics.

~~Employees~~• Phase 3. Phase 3 clinical trials are performed after preliminary evidence suggesting effectiveness of a drug or biologics has been obtained and safety (toxicity), tolerability, and an ideal dosing regimen have been established. Phase 3 clinical trials are intended to gather additional information about the effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the drug or biologics and to complete the information needed to provide adequate instructions for the use of the drug or biologics, also referred to as the Official Product Information. Phase 3 clinical trials usually include from several hundred to several thousand subjects.

AsThroughout ofthe ~~September 30,~~clinical ~~2011~~phase, wesamples ~~had~~of 68the ~~employees,~~product ~~two~~made ofin ~~whom~~different batches are ~~part-time employees~~tested ~~and~~for ~~one~~stability ofto ~~whom~~establish isshelf alife ~~temporary employee~~constraints. ~~None~~In ofaddition, ~~our~~large-scale ~~employees~~production isprotocols ~~represented~~and bywritten ~~labor~~standard ~~unions~~operating orprocedures ~~covered~~for byeach ~~collective~~aspect ~~bargaining~~of ~~agreements.~~commercial Wemanufacture ~~supplement our staff with temporary employees~~ and ~~consultants~~testing asmust ~~required.~~be ~~We believe that our relations with employees are satisfactory~~developed.

~~Our~~Phase ~~ability~~1, to2, ~~continue~~and to3 ~~develop~~testing ~~and~~may ~~improve~~not ~~marketable~~be ~~products~~completed successfully within any specified time period, if at all. The FDA closely monitors the progress of each of the three phases of clinical trials that are conducted under an IND and may, at its discretion, reevaluate, alter, suspend, or terminate the testing based upon the data accumulated to ~~establish~~that point and ~~maintain~~the FDA’s assessment of the risk/benefit ~~our~~ratio ~~competitive~~to ~~position~~the inpatient. ~~light~~The FDA may suspend or terminate clinical trials at any time for various reasons, including a finding that the subjects or patients are being exposed to an unacceptable health risk. The FDA can also request additional clinical trials be conducted as a condition to product approval. Additionally, new government requirements may be established that could delay or prevent regulatory/marketing approval of ~~technological~~our ~~developments~~product ~~will~~candidates ~~depend~~under development. Furthermore, institutional review boards, which are independent entities constituted to protect human subjects in ~~part~~the institutions in which clinical trials are being conducted, ~~upon~~have ~~our~~the ~~ability~~authority to ~~attract~~suspend ~~and~~clinical ~~retain~~trials ~~qualified~~at ~~technical~~any ~~personnel~~time for a variety of reasons, including safety issues.

49New Drug Application or Biologics License Application

~~Corporate~~After ~~Information~~the successful completion of Phase 3 clinical trials, the sponsor of the new drug submits a NDA or a BLA, in the case of biologics, to the FDA requesting approval to market the product for one or more indications. A NDA or BLA, is a comprehensive, multi-volume application that includes, among other things, the results of all preclinical and clinical studies, information about the drug’s composition, and the sponsor’s plans for producing, packaging, and labeling the drug. Under the Pediatric Research Equity Act of 2003, an application also is required to include an assessment, generally based on clinical study data, on the safety and efficacy of drugs for all relevant pediatric populations before the NDA is submitted. The statute provides for waivers or deferrals in certain situations. In most cases, the NDA or BLA must be accompanied by a substantial user fee. In return, the FDA assigns a goal of 10 months from acceptance of the NDA or BLA to return of a first “complete response,” in which the FDA may approve the product or request additional information.

WeThe ~~were~~submission ~~incorporated~~of inthe application is no guarantee that the ~~State~~FDA ofwill ~~Florida~~find init ~~2002~~complete and accept it for filing. ~~Our~~The ~~principal~~FDA ~~executive~~reviews ~~offices~~all ~~are~~NDAs ~~located~~and atBLAs ~~324~~submitted ~~South~~before ~~Hyde~~it ~~Park~~accepts ~~Avenue~~them for filing. It may refuse to file the application and request additional information rather than accept the application for filing, ~~Suite 350~~in which case, ~~Tampa~~the application must be resubmitted with the supplemental information. After application is deemed filed by the FDA, ~~Florida~~the ~~33606~~FDA reviews an NDA or BLA to determine, among other things, whether a product is safe and ~~our~~effective ~~telephone~~for ~~number~~its atintended ~~that~~use. The FDA has substantial discretion in the approval process and may disagree with an applicant’s interpretation of the data ~~address~~submitted isin ~~(813) 864-2554~~its NDA or BLA. ~~Our~~Drugs ~~website~~that issuccessfully ~~www~~complete NDA or BLA review may be marketed in the U.~~accentia~~S.~~net~~, subject to all conditions imposed by the FDA. Prior to granting approval, the FDA generally conducts an inspection of the facilities, including outsourced facilities, which will be involved in the manufacture, production, packaging, testing

~~Additional~~43 ~~Information and Where to Find It~~

OurTable Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available on our website (www.accentia.net) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. Contents

~~ITEM~~ and 1Acontrol of the drug product for cGMP compliance. ~~RISK~~The ~~FACTORS~~FDA will not approve the application unless cGMP compliance is satisfactory. If the FDA determines that the marketing application, manufacturing process, or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and will often request additional testing or information. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the marketing application does not satisfy the regulatory criteria for approval and refuse to approve the application by issuing a “not approvable” letter or a “complete response” letter requiring additional steps to be completed before approval.

~~Risk~~Biologics ~~Factors~~(such as BiovaxID™) differ from other drugs for human use in that they must include more detailed chemistry and manufacturing information. This is necessary to help ensure the purity and quality of the product, for example to help ensure that it is not contaminated by an undesired microorganism or by another contaminant. The sponsoring company’s manufacturing facility must also supply product specific facility information that outlines the method of manufacture of the biologic in significant detail, since slight variations can result in a different final product. Further, an inspection of the manufacturing facility is completed to assess the production process and facility since these aspects also have a significant impact on the safety and efficacy of the product.

~~Statements in this Annual Report on Form 10~~Post-KApproval ~~that~~Phase are not strictly historical in nature are forward-looking statements. These statements include, but are not limited to, statements about: the timing of the commencement, enrollment, and completion of our clinical trials for our product candidates; the progress or success of our product development programs; the status of regulatory approvals for our product candidates; the timing of product launches; our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others; and our estimates for future performance, anticipated operating losses, future revenues, capital requirements, and our needs for additional financing. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” “goal,” and similar expressions intended to identify forward-looking statements. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties. The underlying information and expectations are likely to change over time.

~~Factors~~If ~~that~~the ~~could~~FDA approves ~~cause~~the ~~actual~~NDA ~~results~~or BLA application, as applicable, the pharmaceutical product becomes available for physicians to ~~differ~~prescribe ~~materially~~in ~~from~~the U.S. After approval, the product is still subject to continuing regulation by FDA, including record keeping ~~what~~requirements, submitting periodic reports to the FDA, reporting of any adverse experiences with the product, and complying with drug sampling and distribution requirements. In addition, the sponsor is ~~expressed~~required orto ~~forecasted~~maintain inand ~~our~~provide ~~forward-looking~~updated ~~statements~~safety and ~~include~~efficacy information to the FDA. The sponsor is also required to comply with requirements concerning advertising and promotional labeling. In that regard, ~~but~~advertising ~~are~~and promotional materials must be truthful and not ~~limited~~misleading. The sponsor is also prohibited from promoting any non-FDA approved or “off-label” indications of products. Failure to comply with those requirements could result in significant enforcement action by the FDA, including warning letters, orders to pull the promotional ~~following:~~materials, and substantial fines. Also, quality control and manufacturing procedures must continue to conform to cGMP after approval.

~~Risks~~Drug ~~Related~~and biologics manufacturers and their subcontractors are required to ~~Our~~register their facilities and products manufactured annually with FDA and certain state agencies and are subject to periodic ~~Business~~unannounced inspections by the FDA to assess compliance with cGMP regulations. Facilities may also be subject to inspections by other federal, foreign, state, or local agencies. In addition, approved biological drug products may be subject to lot-by-lot release testing by the FDA before these products can be commercially distributed. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

WeIn ~~have~~addition, following FDA approval of a ~~history~~product, discovery of ~~operating~~problems ~~losses~~with ~~and~~a ~~expect~~product or the failure to ~~incur~~comply with requirements may result in restrictions on a product, manufacturer, or holder of an approved marketing application, including withdrawal or recall of the product from the market or other voluntary or FDA-initiated action that could delay further ~~losses~~marketing. Newly discovered or developed safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications. Also, the FDA may require post-market testing and surveillance to monitor the product’s safety or efficacy, including additional clinical studies, known as Phase 4 clinical trials, to evaluate long-term effects.

WeOrphan ~~have~~Drug ~~never~~Designation ~~been profitable~~ and weExclusivity have incurred significant losses and cash flow deficits. For the fiscal years ended September 30, 2011 and 2010, we reported net losses of $15.7 million, and $48.2 million respectively and negative cash flow from operating activities of $6.1 million, and $0.4 million, respectively. As of September 30, 2011, we have an aggregate accumulated deficit of $333.9 million. We anticipate that operations may continue to show losses and negative cash flow, particularly with the anticipated expenses associated with the initial clinical trial of Cyrevia™ and Biovest’s efforts to seek regulatory approval for BiovaxID®. There is no assurance that, the additional required funds can be obtained on terms acceptable or favorable to us, if at all. The audit opinion issued by our independent auditors with respect to our consolidated financial statements for the 2011 fiscal year indicates that there is substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. We expect to receive a similar audit opinion from our independent auditors with respect to our consolidated financial statements for the 2012 fiscal year.

~~Our~~Pursuant ~~ability~~to the U.S. Orphan Drug Act, a sponsor may request that the FDA designate a drug intended to ~~achieve~~treat ~~and~~a ~~sustain~~“rare ~~profitability~~disease or condition” as an “orphan drug”. The term “orphan drug” can refer to either a drug or biologic. A rare disease or condition is defined as one which affects less than 200,000 people in the U.S., or which affects more than 200,000 people, but for which the cost of developing and making available the product is not expected to be recovered from sales of the product in the U.S. In the U.S., Orphan Drug designation must be requested before submitting a ~~large~~NDA ~~degree~~or ~~dependent~~BLA. onUpon the ~~success~~approval of ~~our~~the ~~development~~first ~~efforts~~NDA ~~with~~or ~~regard~~BLA for a drug designated as an orphan drug for a specified indication, the sponsor of that NDA or BLA is entitled to ~~Cyrevia~~seven years ~~and~~of exclusive marketing rights in the ~~development~~U.S. for the orphan drug for the same indication unless the sponsor cannot assure the availability of sufficient quantities of the drug to meet the needs of persons with the disease. However, orphan drug status is particular to the approved indication and ~~commercialization~~does ~~efforts~~not prevent another company from seeking approval of ~~Biovest~~an off-patent drug that has other labeled indications that are not under orphan or other exclusivities. The period of orphan exclusivity is concurrent with ~~regard~~any patent or other exclusivity that relates to ~~BiovaxID~~the drug or biologic. WeOrphan drugs may ~~not~~also be ~~successful~~eligible infor ~~our~~federal ~~efforts~~income ~~and~~tax ~~even~~credits iffor ~~successful,~~costs weassociated ~~may not~~with bethe ~~able~~drugs’ development. In order to ~~profitably~~increase ~~commercialize~~the ~~any~~development and marketing of ~~our~~drugs ~~drug~~for ~~products~~rare ~~candidates~~disorders, regulatory agencies outside the U.S., such as the EU (which has a ten year exclusivity marketing period) have enacted regulations similar to the Orphan Drug Act.

~~Our~~44 ~~independent registered public accountants have expressed substantial doubt as to our ability to continue as a going concern.~~

AsTable of September 30, 2011, we had a working capital deficit of $28.4 million. We expect to continue to incur substantial net operating losses for the foreseeable future. Continued operating losses would impair our ability to continue operations. We may not be able to generate sufficient product revenue to become profitable on a sustained basis, or at all. We have operating and liquidity concerns due to our significant net losses and negative cash flows from operations. As a result of these and other factors, our independent registered certified public accountants, Cherry, Bekaert, and Holland, L.L.P., have indicated, in their report to our 2011 consolidated financial statements, that there is substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon generating sufficient cash flow to conduct operations and obtaining additional capital and financing. Any financing activity is likely to result in significant dilution to current shareholders. Contents

50Orphan Drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. If a product which has an Orphan Drug designation subsequently receives the first FDA approval for the indication for which it has such designation, the product is entitled to a marketing exclusivity. For seven years, the FDA may not approve any other application, including NDAs or BLAs, to market the “same drug” for the same indication. The only exceptions are (i) where the second product is shown to be “clinically superior” to the product with Orphan Drug exclusivity, as that phrase is defined by the FDA and (ii) if there is an inadequate supply.

~~Our consolidated financial statements have been prepared assuming we will continue as a going concern and do~~Manufacturing not include any adjustments that might result from the outcome of this uncertainty. We incurred net losses of $15.7 million, and $48.2 million in 2011 and 2010, respectively. We have also experienced negative cash flows from operations for the past three fiscal years. In addition, our projected cash receipts from operations for fiscal 2012 are anticipated to be insufficient to finance operations without funding from other sources. Historically, we have had difficulty in meeting our cash requirements. There can be no assurances that we will obtain the necessary funding, reduce the level of historical losses and achieve successful commercialization of any of our drug product candidates. Continuation as a going concern is ultimately dependent upon achieving profitable operations and positive operating cash flows sufficient to pay all obligations as they come due.

WeAmong the conditions for regulatory/marketing approval, the regulatory agency, such as the FDA, the EMA and Health Canada, requires ~~will~~that ~~need~~the prospective manufacturer’s quality control and manufacturing procedures continually conformto cGMP regulations (which are regulations governing the manufacture, processing, packing, storage and testing of drugs and biologics intended for human use). In complying with cGMP, manufacturers must devote extensive time, money and effort in the area of production and quality control and quality assurance to maintain full technical compliance. Manufacturing facilities and company records are subject to periodic inspections by the regulatory agency to ensure compliance. If a manufacturing facility is not in substantial ~~additional~~compliance ~~financing~~with ~~but~~these ~~our~~requirements, ~~access~~regulatory enforcement action may be taken by the regulatory agency, which may include seeking an injunction against shipment of products from the facility and recall of products previously shipped from the facility. Changes to ~~capital~~the ~~funding~~manufacturing process or site during or following the completion of clinical trials requires sponsors to demonstrate to the regulatory agency that the product under new conditions is ~~uncertain~~comparable to the product that was the subject of earlier clinical testing. This requirement applies to relocations or expansions of manufacturing facilities, or additional facilities that may be required upon successful commercialization of the product. A showing of comparability requires data demonstrating that the product continues to be safe, pure, and potent and may be based on chemical, physical, and biological assays and, in some cases, other non-clinical data.

WeMedical ~~have~~Device ~~limited~~Regulation cash or other liquid assets on hand. During prior years, we met our cash requirements through the use of cash on hand, revenue, the sale of common stock, and loans. We have significant outstanding indebtedness which as of December 1, 2011 aggregated approximately $48.1 million of which $32.9 million will be automatically converted into stock at various intervals and approximately $8.7 million that is voluntarily convertible into stock. Some of our debt is secured by our assets and may make procuring additional debt or equity financing more difficult or uncertain. Furthermore, our secured creditors may be able to foreclose on our assets if we are unable to meet our obligations as they become due. We are required by certain loan covenants to allocate 30% of the net proceeds from the sale of our capital stock under certain circumstances to re-pay certain indebtedness which may make future capital raises more difficult.

~~Our~~New ~~ability~~medical todevices ~~continue~~are ~~present~~also ~~operations~~subject isto ~~dependent~~FDA ~~upon~~approval ~~our~~and ~~ability~~extensive toregulation ~~obtain~~under ~~significant~~the ~~external funding when required~~FDCA. ~~Additional~~Under ~~sources of funding have not been established; however, we anticipate that in~~ the ~~future we will seek additional financing from a number of sources~~ FDCA, ~~including,~~medical ~~but~~devices ~~not~~are ~~limited~~classified ~~to,~~into ~~the~~one ~~sale~~ of three ~~equity~~classes: orClass ~~debt securities~~I, ~~strategic~~Class ~~collaborations~~II, ~~recognized research funding programs and domestic and/~~or ~~foreign~~ ~~licensing.~~Class ~~There can be no assurance that we will be successful in securing needed financing at acceptable terms, if at all~~III. IfThe ~~adequate~~classification ~~funds~~of ~~are~~a ~~not~~device ~~available,~~into orone ~~if we determine it to otherwise be in our best interests, we may consider additional strategic financing options, including sales~~ of ~~assets~~these orthree ~~business~~classes ~~units~~generally ~~that~~depends ~~are~~on ~~non-essential to~~ the ~~ongoing~~degree ~~development or future commercialization~~ of ~~our~~ ~~drug~~risk ~~candidates~~associated inwith ~~development~~the ormedical wedevice ~~may~~and ~~be required to delay, reduce~~ the ~~scope~~ ~~of,~~extent ~~or eliminate one or more~~ of ~~our~~control ~~research~~needed orto ~~development~~ensure ~~programs~~safety ~~or curtail some of our commercialization efforts~~and effectiveness.

IfClass weI devices are ~~successful~~ inthose ~~procuring~~for ~~additional~~which ~~financing~~safety ~~when~~and ~~required~~effectiveness itcan ~~will~~be ~~most~~assured ~~likely~~by ~~result~~adherence into ~~our~~a ~~issuing~~set ~~additional~~of ~~shares~~general ~~and/or~~controls. ~~rights~~These general tocontrols ~~acquire~~include ~~shares~~compliance with the applicable portions of ~~our~~the ~~capital~~FDA’s ~~stock~~Quality orSystem inRegulation ~~the~~(“QSR”), ~~alternative~~which itsets ~~may~~forth ~~result~~good inmanufacturing ~~our~~practice ~~selling~~requirements; ~~shares~~facility registration and product reporting of ~~our~~adverse medical ~~majority~~events listing; truthful and non-~~owned~~misleading ~~subsidiary,~~labeling; ~~Biovest,~~and ~~which~~promotion weof ~~currently~~the ~~own~~device only for its cleared or approved intended uses. ~~Accordingly~~Class II devices are also subject to these general controls, ~~our~~and ~~access~~any other special controls as deemed necessary by the FDA to ~~additional~~ensure ~~financing~~the ~~when~~safety ~~needed~~and effectiveness of the device. Review and clearance by the FDA for these devices is ~~anticipated~~typically toaccomplished bethrough ~~dilutive~~the toso-called ~~existing~~510(k) ~~shareholders~~pre-market notification procedure. A Class III device requires approval of a premarket application (“PMA”), an expensive, lengthy and uncertain process requiring many years to complete.

WeWhen ~~are~~510(k) ~~largely~~clearance ~~dependent~~is onsought, a sponsor must submit a pre-market notification demonstrating that the ~~success~~proposed ofdevice ~~Cyrevia™~~is ~~and~~substantially ~~BiovaxID®~~equivalent ~~and~~to wea ~~may~~previously ~~not~~approved bedevice. ~~able~~If the FDA agrees that the proposed device is substantially equivalent to ~~successfully~~the ~~commercialize~~predicate ~~these~~device, ~~therapies~~then 510(k) clearance to market will be granted. After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could require pre-market approval. Our instruments and disposables used for the production of cell cultures are generally regulated as Class I devices exempt from the 510(k) clearance process.

WeClinical ~~have~~trials ~~expended~~are ~~and~~almost ~~will~~always ~~continue~~required to ~~expend~~support ~~significant~~a ~~time,~~PMA ~~money,~~ and ~~effort~~are onsometimes ~~the~~required ~~development~~for ofa ~~Cyrevia~~510(k) ~~and/or~~pre-market ~~BiovaxID~~notification. ~~which~~These isclinical ~~owned by our~~trials ~~majority~~generally ~~owned~~require ~~subsidiary.~~submission Weof ~~will~~an ~~incur~~application ~~significant~~for ~~costs~~an ~~and~~investigational ~~may~~device ~~never~~exemption ~~generate~~(“IDE”). ~~significant~~An ~~revenues~~IDE ~~from~~must ~~commercial~~be ~~sales~~supported ofby ~~these~~pre-clinical ~~products~~data, ifsuch ~~approved.~~as ~~None~~animal ofand ~~these~~laboratory ~~products~~testing isresults, ~~approved~~which ~~for~~show ~~marketing~~that inthe ~~any~~device ~~jurisdiction,~~is ~~and~~safe ~~they~~to ~~may~~test ~~never be~~in ~~commercialized.~~humans ~~Before~~and wethat ~~can~~the ~~market~~study ~~and~~protocols ~~sell~~are ~~these~~scientifically ~~products,~~sound. weThe ~~will~~IDE ~~need~~must tobe ~~demonstrate~~approved in ~~clinical~~advance ~~trials~~by ~~that~~the ~~these~~FDA ~~products~~for ~~are~~a ~~safe~~specified ~~and~~number ~~effective~~of ~~and~~patients, ~~will~~unless ~~also~~the ~~need~~product tois ~~obtain~~deemed ~~necessary~~a ~~approvals~~non-significant ~~from~~risk ~~the~~device ~~FDA,~~ and ~~similar~~is ~~foreign~~eligible ~~regulatory~~for more abbreviated IDE ~~agencies~~requirements.

IfBoth webefore ~~fail~~and toafter ~~successfully~~a ~~commercialize~~medical ~~any~~device oris ~~all~~commercially distributed, manufacturers and marketers of ~~these~~the ~~product~~device ~~candidates~~have ongoing responsibilities under FDA regulations. The FDA reviews design and manufacturing practices, welabeling ~~may~~and berecord ~~unable~~keeping, toand ~~generate~~manufacturers’ ~~sufficient~~required ~~revenue~~reports of adverse experiences and other information to identify potential problems with ~~sustain~~marketed medical devices. Device manufacturers are subject to periodic and ~~grow~~unannounced ~~our~~inspection ~~business~~by the FDA for compliance with the QSR, cGMP requirements that govern the methods used in, and ~~our~~the ~~business~~facilities and controls used for, ~~financial~~the ~~condition~~design, manufacture, packaging, servicing, labeling, storage, installation, and ~~results~~distribution of ~~operations~~all ~~will~~finished bemedical ~~adversely~~devices ~~affected~~intended for human use.

If45 ~~we fail to obtain FDA approval of Cyrevia™, BiovaxID®, SinuaNasal™ or any of our future product candidates, we will be unable to commercialize these products.~~

Development,Table testing, manufacturing and marketing of pharmaceutical products are subject to extensive regulation by numerous governmental authorities in the U.S. and other countries. The process of obtaining FDA approval of pharmaceutical products is costly and time consuming. Any new pharmaceutical product must undergo rigorous preclinical and clinical testing and an extensive regulatory approval process mandated by the FDA. Such regulatory review includes the determination of manufacturing capability and product performance. Contents

51If the FDA finds that a manufacturer has failed to comply or that a medical device is ineffective or poses an unreasonable health risk, it can institute or seek a wide variety of enforcement actions and remedies, ranging from a public warning letter to more severe actions such as: fines, injunctions, and civil penalties; recall or seizure of products; operating restrictions, partial suspension or total shutdown of production; refusing requests for 510(k) clearance or PMA approval of new products; withdrawing 510(k) clearance or PMA approvals already granted; and criminal prosecution.

InThe ~~addition to seeking approval from the~~ FDA ~~for~~also ~~Cyrevia~~has ~~and BiovaxID, we intend to seek~~ the ~~governmental approval~~authority ~~required~~ to ~~market~~require ~~our products in the EU~~repair, ~~and~~replacement ~~potentially additional countries and territories. We anticipate commencing the applications required in some~~ or ~~all~~refund of ~~these countries simultaneously with or following application for approval by~~ the ~~FDA; however, we may determine to file applications in advance of the FDA approval if we determine such filings to be both time and~~ cost ~~effective. Marketing~~ of ~~our~~any ~~products~~medical ~~in these countries, and in most other countries, is not permitted until we have obtained required approvals or exemptions in each individual country~~device.

InThe ~~addition,~~FDA ~~patient-specific~~also ~~active~~administers ~~immunotherapies~~certain ~~such as~~controls ~~BiovaxID~~over ~~are~~the ~~complex,~~export ~~and~~of ~~regulatory~~medical ~~agencies~~devices ~~have~~from ~~limited~~the ~~experience with them~~U. ~~To date~~S., ~~the~~as ~~FDA~~international ~~has~~sales ~~only~~of ~~approved~~medical ~~for~~devices ~~marketing~~that ~~two~~have ~~active~~not received ~~immunotherapies~~FDA ~~for~~approval ~~treating~~are ~~cancer.~~subject ~~This~~to ~~limited~~FDA ~~precedent~~export ~~and~~requirements. ~~experience~~Additionally, ~~may~~each ~~lengthen~~foreign ~~the~~country ~~regulatory review~~subjects ~~process~~such ~~and~~medical ~~impede~~devices ~~our ability~~ to ~~obtain~~its ~~timely~~own ~~FDA~~regulatory ~~approval for BiovaxID, if at all~~requirements. ~~Even~~In ~~if BiovaxID is approved by~~ the ~~FDA~~EU, ~~the FDA’s limited precedent and experience with respect to~~ a ~~patient-specific~~single ~~active~~regulatory ~~idiotype~~approval ~~vaccine~~process ~~may increase~~has ~~our~~been ~~development~~created, ~~costs~~ and ~~otherwise~~approval ~~delay~~is represented orby ~~prevent~~the ~~commercialization~~“CE” Mark.

~~Further,~~Combination weProduct ~~have~~Regulation not commenced any clinical trials in Cyrevia and the development of our product candidates based on Cyrevia should be considered to be in an early stage. The structure, size, design, cost and/or length of future clinical trials in Cyrevia have not been established and remain uncertain.

~~FDA~~Combination ~~has~~products ~~ruled~~are ~~that~~comprised itof ~~will~~two ~~regulate~~or ~~SinuNasal™~~more asregulated components, e.g., a ~~combination~~drug ~~product~~and ~~with~~a device, a biologic and a device, or a biologic and a drug, ~~primary~~that ~~mode~~are ofphysically ~~action~~combined ~~rather~~and ~~than~~produced as a ~~medical~~ ~~device~~single product, or are packaged together, or are cross-labeled for use with one another. In the ~~event~~U.S., ~~the~~a ~~company~~combination ~~elects~~product tois ~~pursue~~assigned ~~litigation~~by the FDA to ~~overturn~~one of the ~~FDA~~Agency’s ~~determination~~centers, such as the ~~outcome~~Center isfor ~~uncertain~~Drug Evaluation and Research (“CDER”) or the Center for Devices and Radiological Health (“CDRH”). IfFDA weidentifies ~~choose~~the ~~not~~center towith ~~litigate,~~primary orauthority ifover wea ~~litigate~~combination ~~and~~product dobased ~~not~~on ~~prevail,~~an assessment of the ~~FDA~~combination product’s ~~decision~~“primary ~~will~~mode ~~significantly increase~~of action” defined as the ~~cost~~single ~~and~~mode ~~time~~of ~~needed~~action toof ~~bring~~a ~~SinuNasal~~combination toproduct ~~market~~that provides the most important therapeutic action of the combination product. WeThe ~~may~~“most ~~choose~~important therapeutic action” is the mode of action expected to ~~discontinue~~make the greatest ~~effort~~contribution to ~~market~~the ~~SinuNasal~~overall ~~rather~~intended ~~than~~therapeutic ~~acquiesce~~effects inof the combination product. The center to which the product is assigned will have primary jurisdiction over the regulation of ~~this~~the combination product. asFor instance, if FDA assigns a product ~~drug~~to CDRH, the appropriate pathway to market pathway would likely be a 510(k) clearance or a PMA approval. If FDA assigns a product to CDER, the appropriate pathway to market would likely be an NDA approval.

~~There~~Other ~~can~~Regulation ~~be no assurance that the products currently~~ in ~~development, or those products acquired or in-licensed by us, will be approved by~~ the ~~FDA.~~United InStates addition, there can be no assurance that all necessary approvals will be granted for future products or that FDA review or actions will not involve delays caused by the FDA’s request for additional information or testing that could adversely affect the time to market and sale of the products.

~~Any~~The ~~delay~~Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (2010) (collectively, the “PPACA”). Enacted in ~~any~~March 2010, ~~approval~~the orPPACA ~~any~~makes ~~failure~~changes that could significantly impact the development and commercialization of our product candidates. Significant measures contained in the PPACA include, for example, coordination and promotion of research on comparative clinical effectiveness of different technologies and procedures, initiatives to ~~obtain~~revise ~~approval~~Medicare payment methodologies, such as bundling of payments across the continuum of care by providers and physicians, and initiatives to promote quality indicators in payment methodologies. The PPACA also includes significant new fraud and abuse measures, including required disclosures of financial arrangements with physician customers, lower thresholds for violations and increasing potential penalties for such violations. In addition, the PPACA establishes an Independent Payment Advisory Board (“IPAB”), to reduce the per capita rate of growth in Medicare spending. The IPAB has broad discretion to propose policies to reduce expenditures, which may have a ~~product~~negative ~~could~~impact ~~delay~~on payment rates for services or ~~impair~~therapeutics, ~~our~~including ~~ability~~therapeutics like BiovaxID™. In addition to ~~commercialize~~the ~~that~~PPACA, the effect of which cannot presently be fully quantified given its relatively recent ~~product~~enactment, various healthcare reform proposals have also emerged from federal and tostate ~~generate~~governments. ~~revenue~~Changes in healthcare policy could substantially impact the development and commercialization of any of product candidates. We cannot predict whether future healthcare initiatives will be implemented at the federal or state level or in countries outside of the U.S. in which we may do business, asor ~~well~~the aseffect ~~increase~~any ~~costs~~future legislation or regulation will have on us. The taxes imposed by the new federal legislation and the expansion in government’s role in the U.S. healthcare industry may result in decreased profits to us, lower reimbursements by payers for ~~that~~our product candidates or reduced medical procedure volumes, all of which may adversely affect our business, financial condition and results of operations, possibly materially.

~~Before~~The ~~regulatory~~Biologics Price Competition and Innovation Act (2010). The Biologics Price Competition and Innovation Act, establishes an abbreviated approval pathway for “biosimilar” biological products. Among the provisions potentially applicable to our product candidates are (1) innovator manufacturers of reference biological products (such as BiovaxID™) are granted 12 years of exclusive use before biosimilars can be ~~sought~~ approved for ~~Cyrevia™~~marketing orin ~~BiovaxID®~~the weU.S. and (2) an application for a biosimilar product may ~~need~~not be submitted to ~~successfully~~the ~~complete~~FDA ~~clinical~~until ~~trials,~~4 ~~outcomes~~years ofafter the date on which ~~are~~ ~~uncertain~~the BLA for the reference product was first approved. FDA is still early in the process of developing regulations to implement the provisions of this legislation.

~~Conducting~~46 clinical trials is a lengthy, time-consuming, and expensive process, and the results of these trials are inherently uncertain. The time required to complete necessary clinical trials is often difficult, if not impossible, to predict. Our commencement and rate of completion of clinical trials may be delayed by many factors, including:

•Table ineffectiveness of our product candidate or perceptions by physicians that the product candidate is not safe or effective for a particular indication;Contents

•Toxic ~~inability~~Substances toControl ~~manufacture~~Act. ~~sufficient~~The ~~quantities~~EPA has promulgated regulations under Section 5 of the ~~product~~Toxic Substances ~~candidate~~Control Act (“TSCA”), which require notification procedures for review of certain so-called intergeneric microorganisms before they are introduced into commerce. Intergeneric microorganisms are those formed by deliberate combinations of genetic material from organisms classified in different taxonomic genera, which are types of animal or plant groups. The regulations provide exemptions from the reporting requirements for new microorganisms used for research and development when the researcher or institution is in mandatory compliance with the National Institutes of Health Guidelines for Research Involving Recombinant DNA Molecules (“NIH Guidelines”). Those researchers voluntarily following the NIH Guidelines can, by documenting their use of the NIH Guidelines, satisfy EPA’s requirements for testing in ~~clinical~~contained ~~trials;~~structures. The EPA may enforce the TSCA through enforcement actions such as seizing noncompliant substances, seeking injunctive relief, and assessing civil or criminal penalties. We believe that our research and development activities involving intergeneric microorganisms comply with the TSCA, but there can be no assurance that restrictions, fines or penalties will not be imposed on us in the future.

•Health ~~delay~~Care orCoverage ~~failure~~and Reimbursement. Commercial success in ~~obtaining~~marketing and ~~approval~~selling our product candidates depends, in part, on the availability of ~~our~~adequate ~~clinical~~coverage ~~trial~~and ~~protocols~~reimbursement from third-party health care payers, such as government and private health insurers and managed care organizations. Third-party payers are increasingly challenging the ~~FDA~~pricing orof ~~institutional~~medical ~~review~~products ~~boards;~~and services. Government and private sector initiatives to limit the growth of health care costs, including price regulation, competitive pricing, coverage and payment policies, and managed-care arrangements, are continuing in many countries where we do business, including the U.S. These changes are causing the marketplace to put increased emphasis on the delivery of more cost-effective medical products.

•Government ~~slower~~programs, ~~than~~including ~~expected~~Medicare ~~rate~~and Medicaid, private health care insurance and managed-care plans have attempted to control costs by limiting the amount of ~~patient~~reimbursement ~~recruitment~~they will pay for particular procedures or treatments. This has created an increasing level of price sensitivity among customers for our product candidates. Examples of how limits on drug coverage and ~~enrollment;~~reimbursement in the U.S. may cause drug price sensitivity include the growth of managed care, changing Medicare reimbursement methodologies, and drug rebates and price controls. Some third-party payers must also approve coverage for new or innovative devices or therapies before they will reimburse health care providers who use the medical devices or therapies. Even though a new medical product may have been cleared for commercial distribution, we may find limited demand for the product until reimbursement approval has been obtained from governmental and private third-party payers.

•Anti-Kickback ~~inability~~Laws. In the U.S., there are federal and state anti-kickback laws that prohibit the payment or receipt of kickbacks, bribes or other remuneration to ~~adequately~~induce ~~follow~~the purchase, order or recommendation of health care products and ~~monitor~~services. ~~patients~~These laws constrain the sales, marketing and other promotional activities of pharmaceutical companies, such as us, by limiting the kinds of financial arrangements we may have with prescribers, purchasers, dispensers and users of drugs and biologics. The The U.S. Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) has issued “Compliance Guidance” for pharmaceutical manufacturers which, among other things, identifies manufacturer practices implicating the federal anti-kickback law (42 U.S.C. § 1320a-7b(b)) and describes elements of an effective compliance program. The OIG Compliance Guidance is voluntary, and we have not adopted a formal compliance program modeled after ~~treatment;~~the one described in the OIG Compliance Guidance. Although none of our practices have been subject to challenge under any anti-kickback laws, due to the breadth of the statutory provisions of some of these laws, it is possible that some of our practices might be challenged under one or more of these laws in the future. Violations of these laws can lead to civil and criminal penalties, including imprisonment, fines and exclusion from participation in federal health care programs. Any such violations could have a material adverse effect on our business, financial condition, results of operations or cash flows.

•Health ~~difficulty~~Information Privacy and Security. Individually identifiable health information is subject to an array of federal and state regulation. Federal rules promulgated pursuant to the Health Information Portability and Accountability Act of 1996 (“HIPAA”) regulate the use and disclosure of health information by “covered entities” (which includes individual and institutional providers from which we may receive individually identifiable health information). These regulations govern, among other things, the use and disclosure of health information for research purposes, and require the covered entity to obtain the written authorization of the individual before using or disclosing health information for research. Failure of the covered entity to obtain such authorization (absent obtaining a waiver of the authorization requirement from an Institutional Review Board) could subject the covered entity to civil and criminal penalties. As the implementation of this regulation is still in ~~managing~~its ~~multiple~~early ~~clinical~~phases, ~~sites;~~we may experience delays and complex negotiations as we deal with each entity’s differing interpretation of the regulations and what is required for compliance. Further, HIPAA’s criminal provisions are not limited in their applicability to “covered persons,” but apply to any “person” that knowingly and in violation of the statute obtains or discloses individually identifiable health information. Also, where its customers or contractors are covered entities, including hospitals, universities, physicians or clinics, we may be required by the HIPAA regulations to enter into “business associate” agreements that subject us to certain privacy and security requirements, including making its books and records available for audit and inspection by HHS and implementing certain health information privacy and security safeguards. In addition,

•47 ~~unforeseen safety issues;~~

•Table governmentof or regulatory delays; andContents

• many ~~clinical~~states ~~trial~~have ~~costs~~laws that apply to the use and disclosure of health information, and these laws could also affect the manner in which we conduct its research and other aspects of its business. Such state laws are not preempted by the federal privacy law where they afford greater ~~than~~privacy protection to the individual. While activities to assure compliance with health information privacy laws are a routine business practice, we ~~currently~~are ~~anticipate~~unable to predict the extent to which its resources may be diverted in the event of an investigation or enforcement action with respect to such laws.

52Foreign Regulation

~~Even~~Whether ifor not we ~~achieve~~obtain ~~positive~~FDA ~~interim~~approval ~~results~~for ina ~~clinical trials~~product, ~~these~~we ~~results~~may dochoose ~~not~~to ~~necessarily~~seek ~~predict final~~approval ~~results,~~of ~~and~~our ~~positive~~product ~~results~~candidates inby ~~early~~the ~~trials~~comparable ~~may~~regulatory ~~not~~authorities ~~be indicative~~ of ~~success~~foreign countries. Like in ~~later~~the ~~trials~~U.S., Abefore ~~number~~we can commence clinical trials or marketing of ~~companies~~a product candidate in ~~the~~a ~~pharmaceutical~~foreign ~~industry~~country, ~~have~~we ~~suffered~~must ~~significant~~submit ~~setbacks~~a new drug application in ~~advanced~~that country. The requirements governing the conduct of clinical trials, ~~even~~product ~~after~~licensing, ~~promising~~pricing, ~~results in~~and ~~earlier~~reimbursement ~~trials.~~vary ~~Negative~~greatly orfrom ~~inconclusive~~country ~~results~~to orcountry. ~~adverse~~Although ~~medical~~governed by ~~events~~the ~~during~~applicable acountry, clinical ~~trial~~trials ~~could~~conducted ~~cause~~outside usof tothe ~~repeat~~U.S. ortypically ~~terminate~~are aadministered ~~clinical~~under ~~trial~~a orthree-phase ~~require~~sequential usprocess similar to ~~conduct~~that ~~additional~~discussed ~~trials.~~above Wefor dopharmaceutical ~~not~~products. Clinical ~~know~~trials ~~whether~~conducted ~~our~~in ~~existing~~the orEU ~~any~~must ~~future~~comply ~~clinical~~with ~~trials~~the ~~will~~EU ~~demonstrate~~Clinical ~~safety~~Trial Regulations and ~~efficacy~~are ~~sufficiently~~monitored toand ~~result~~inspected inby ~~marketable~~each ~~products.~~EU ~~Our~~Member ~~clinical~~State. Clinical trials ~~may~~conducted bein ~~suspended~~Canada atmust ~~any~~comply ~~time~~with ~~for~~the aHealth ~~variety~~Canada Regulations and are approved and monitored by an independent committee of ~~reasons~~doctors, ~~including~~scientists, ifadvocates ~~the~~and ~~FDA~~others orto weensure ~~believe~~safety and ethical standards. In addition, regulatory approval of pricing/marketing of the ~~patients~~product ~~participating~~candidate ~~in our~~is ~~trials~~required ~~are~~in ~~exposed~~most tocountries ~~unacceptable~~other ~~health~~than ~~risks~~the orU.S. ifWe face the ~~FDA~~risk ~~finds~~that ~~deficiencies~~the pricing, inwhich results from the ~~conduct~~regulatory ofapproval ~~these~~process, ~~trials~~would be insufficient to generate an acceptable return to us or our collaborators.

~~Failures~~The orregulatory/ ~~perceived failures~~marketing inapproval ~~our~~process ~~clinical~~varies ~~trials~~from ~~will~~country ~~directly~~to ~~delay~~country, ~~our~~and ~~product~~the ~~development~~approval ~~and~~time ~~regulatory~~may ~~approval~~be ~~process,~~longer ~~damage~~or ~~our~~shorter ~~business~~than ~~prospects~~that required for FDA approval. However, ~~make~~foreign itcountries ~~difficult~~are ~~for~~similar usin tothat ~~establish~~they ~~collaboration~~generally ~~and~~require, ~~partnership~~as ~~relationships~~part of any new drug submission/application process, ~~and~~sufficient ~~negatively~~evidence ~~affect~~to ~~our reputation~~support ~~and~~the ~~competitive~~safety, ~~position~~efficacy inand quality of the ~~pharmaceutical~~product ~~community~~candidate.

WeUnder ~~have~~EU ~~incurred~~regulatory ~~significant~~systems, ~~costs~~the manufacture and sale of new drugs are controlled by the EMA. MAAs are submitted for marketing approval in ~~our~~the ~~development~~EU, under ~~efforts~~either toa centralized or decentralized procedure for most products. The centralized procedure, which is the pathway for BiovaxID, is available for medicines produced by biotechnology or which are highly innovative and provides single marketing ~~date~~authorization that is valid for all EU member states. Under European Commission Regulation 726/2004, the centralized authorization procedure is required for all biotechnology-derived medicinal products developed through recombinant DNA technology, controlled expression of genes coding for biologically active proteins, and ~~may~~hybridoma ~~never~~and ~~generate~~monoclonal ~~significant~~antibody ~~revenue~~methods. It is also required for designated orphan medicinal products and all new active substances indicated for the treatment of AIDS, cancer, neurodegenerative disorder, or diabetes. Under the EMA centralized procedure, the marketing approval of BiovaxID™ can be simultaneously obtained throughout all EU-member countries with a single MAA. As part of the EMA’s centralized procedure, the MAA is assessed by the EMA’s CHMP, which designates from ~~commercial~~within ~~sales~~its membership, a Rapporteur and Co-Rapporteur, as well as a PRAC Rapporteur and Co-Rapporteur. The Rapporteurs and Co-Rapporteurs are assigned with the primary responsibility of ~~our~~preparing ~~product~~and ~~candidates~~delivering an approvability evaluation report, ifsupported ~~approved~~by a team of assessors from their National Authority.

WeUnder ~~expended~~Canadian ~~significant~~regulatory ~~time~~systems, the manufacture and ~~funds~~sale toof ~~conduct~~new adrugs ~~Phase~~are 3controlled ~~clinical~~by ~~trial~~Health Canada. NDSs are submitted for regulatory approval in ~~SinuNase™~~Canada. Upon sufficient evidence to support safety, efficacy or quality claims for a ~~drug~~NDS, ~~candidate~~a toproduct ~~treat~~is issued a ~~sinus~~Notice ~~condition.~~of ~~The~~Compliance ~~clinical~~(“NOC”) ~~trial~~and ~~was~~a ~~not~~Drug ~~considered~~Identification toNumber be(“DIN”) ~~successful,~~indicating ~~and~~that wethe biologic is approved for sale in Canada. All drugs that are ~~not~~marketed ~~continuing~~in Canada are subject to ~~develop~~the ~~this~~Food ~~drug,~~and ~~although~~Drugs ~~this~~Act ~~trial~~and ~~spawned~~Regulations. aThe ~~potential~~Biologics ~~new~~and ~~medical~~Genetic ~~device~~Therapies ~~called~~Directorate ~~SinuNasal™~~is ~~which~~responsible ~~could~~for ~~become~~the areview ~~marketed~~and ~~product.~~approval ~~Nevertheless,~~of weall ~~expended~~types ~~significant~~of ~~time~~drug submissions for Biological (Schedule D) and Radiopharmaceutical ~~funds~~(Schedule inC) ~~the~~drug ~~development~~products, ofincluding, ~~SinuNase~~but not limited to NDSs. ~~In addition,~~For wethe ~~will~~regulatory ~~continue~~requirements specific to ~~expend~~Biological ~~significant~~(Schedule ~~sums~~D into the ~~development~~Act) ~~efforts~~drugs, ~~for~~please ~~Cyrevia™~~refer ~~and BiovaxID®~~to Divisions 4, of Part C of the Regulations. WeFor ~~expect~~general regulatory torequirements ~~continue~~concerning all drugs, including Good Manufacturing Practices, please refer to ~~incur~~Divisions ~~significant~~1, ~~operating~~1a, ~~expenses~~2, 5 and ~~capital~~8 ~~expenditures~~of asPart ~~we:~~ C of the Regulations.

•Third-Party ~~conduct~~Reimbursement ~~clinical~~and ~~trials;~~Pricing Controls

•In ~~conduct~~the ~~research~~U.S. and ~~development~~in international markets, sales of pharmaceutical products depend in significant part on ~~existing~~the availability of reimbursement to the consumer from third-party payers, such as government and private insurance plans. Third-party payers are increasingly challenging the prices charged for medical products and services. It will be time-consuming and expensive for us to go through the process of seeking reimbursement from Medicare and private payors. Our product candidates may not be considered cost effective, and coverage and reimbursement may not be available or sufficient to allow us to sell our product candidates on a competitive and profitable basis. The passage of the Medicare Prescription Drug and Modernization Act of 2003 imposes new requirements for the distribution and pricing of prescription drugs which may affect the marketing of our product candidates;.

•In ~~seek~~many foreign markets, including the member states in the EU, pricing of pharmaceutical products is subject to governmental control. In the U.S., there have been, and we expect that there will continue to be, a number of federal and state proposals to implement similar governmental pricing control. While we cannot predict whether such legislative or regulatory ~~approvals~~proposals ~~for~~will be adopted, the adoption of such proposals could have a material adverse effect on our ~~product~~business, ~~candidates;~~financial condition and profitability.

•48 ~~commercialize our product candidates, if approved;~~

•Table hireof additional clinical, scientific, sales and marketing and management personnel; andContents

•Liability ~~identify~~Insurance ~~and license additional product candidates.~~

IfWe ~~product~~may ~~candidates~~be ~~fail~~exposed into ~~clinical~~potential ~~trials~~product orliability doclaims ~~not~~by ~~gain~~users ~~regulatory~~of ~~approval~~our orproduct ~~gain~~candidates. ~~regulatory~~Biovest’s ~~approval~~business ~~for~~segments ~~more~~may ~~restricted~~expose ~~indications~~Biovest ~~than~~to wepotential ~~have~~risk ~~anticipated,~~of weliability. ~~may~~Biovest ~~not~~seeks ~~generate~~to ~~significant~~obtain ~~revenues~~agreements from ~~any~~contract ofproduction ~~our~~customers ~~product~~to ~~candidates.~~mitigate Insuch ~~addition,~~potential weliability ~~may~~and ~~continue~~ to ~~experience~~indemnify ~~net~~Biovest ~~losses~~under ~~for~~certain ~~the~~circumstances. ~~foreseeable~~The ~~future,~~terms inand ~~which~~conditions ~~case~~of ~~our~~Biovest’s ~~accumulated~~sales ~~deficit~~and ~~will~~instruments ~~continue~~include provisions which are intended to ~~increase~~limit Biovest’s liability for indirect, ~~and~~special, weincidental ~~may~~or ~~exhaust~~consequential ~~our~~damages. ~~resources~~There ~~and~~can be ~~unable~~no toassurance, however, that Biovest will be successful in obtaining such agreements or that such indemnification, if obtained, will adequately protect ~~complete~~Biovest ~~the~~against ~~development~~potential claims. The terms and conditions of ~~our~~Biovest’s ~~product~~sales ~~candidates.~~and Ifinstruments weinclude provisions which are ~~unable~~intended to ~~fund~~limit ~~the~~Biovest’s ~~continuing~~liability ~~development~~for ofindirect, ~~our~~special, ~~product~~incidental ~~candidates~~ or ifconsequential wedamages. ~~fail~~We, toalong ~~generate~~with Biovest, ~~significant~~presently ~~revenues~~maintain ~~from~~product ~~any~~liability insurance coverage in the aggregate and per occurrence of $2.0 million, in connection with our product candidates and our products and services, ~~you~~in ~~could~~amounts ~~lose~~which ~~all~~we orbelieve ~~part~~to ofbe ~~your~~adequate and on ~~investment~~acceptable terms.

WeAlthough, ~~anticipate~~we believe that our current level of coverage is adequate to protect our business from foreseeable product liability claims, we ~~will~~may ~~need~~seek ~~substantial~~to ~~additional~~increase ~~funding~~our insurance coverage in the future, ~~and~~in ifthe event that we ~~are~~significantly ~~unable~~increase toour ~~raise~~level ~~capital~~of ~~when~~contract product and services and/or the initiation of any clinical trial program. There can be no assurance; ~~needed~~however, that we ~~would~~will be ~~forced~~able to ~~delay,~~maintain ~~reduce~~our existing coverage or obtain additional coverage on acceptable terms, or ~~eliminate~~that ~~our~~such ~~product~~insurance ~~development~~will ~~programs~~provide adequate coverage against all potential claims to which we may be exposed. A successful partially or ~~commercialization~~completely ~~efforts~~uninsured claim against us could have a material adverse effect on our operations.

~~Developing~~EMPLOYEES biopharmaceutical products, conducting clinical trials, establishing manufacturing capabilities, and marketing developed products is expensive. We anticipate that we will need to raise substantial additional capital in the future in order to complete the commercialization of our product candidates, to continue to pursue the submission of NDAs for our product candidates and to fund the development and commercialization of our specialty pharmaceutical product candidates. Further, we anticipate that Biovest will need to raise substantial additional capital from other sources in order to continue the clinical trials for BiovaxID®. Additional sources of funding have not been established by us or Biovest; however, additional financing is currently being sought from a number of sources, including the sale of Biovest equity or debt securities, strategic collaborations, recognized research funding programs, as well as domestic and/or foreign licensing of BiovaxID.

~~Based~~As onof ~~our~~September 30, ~~current operating plans~~2012, we ~~expect~~had ~~that~~54 ~~our~~employees, ~~existing~~two ~~capital~~of ~~and~~whom ~~cash~~are ~~flow~~part-time ~~from~~employees ~~operations,~~and ~~together~~one ~~with proceeds~~ of ~~one~~whom oris ~~more anticipated~~a ~~equity~~temporary ~~financing~~employee. ~~transactions,~~Advanced ~~will~~degrees beand certifications ~~sufficient~~of ~~to fund~~ our ~~operations~~staff ~~and~~include ~~development~~five ~~activities~~Ph.D.s, ~~for~~one aM.D., ~~limited period~~Ph.D., ~~assuming~~three ~~Biovest~~CPAs, ~~receives~~and ~~its~~three ~~own funding~~JDs. WeNone ~~have~~of ~~received~~our aemployees ~~report~~is ~~from~~represented ~~our~~by ~~independent~~labor ~~auditors~~unions onor ~~our consolidated~~covered ~~financial~~by ~~statements~~collective ~~for~~bargaining ~~our~~agreements. ~~fiscal~~From ~~years~~time ~~ended~~to ~~September 30~~time, ~~2011~~we employ and ~~2010,~~supplement inour ~~which~~staff with ~~our~~temporary ~~auditors~~employees ~~have~~and ~~included~~consultants ~~explanatory~~as ~~paragraphs~~required. ~~indicating~~We believe that our ~~significant~~relations ~~net~~with ~~losses~~employees ~~and~~are ~~working~~satisfactory. ~~capital~~Each ~~deficiency~~of ~~cause~~our ~~substantial doubt~~employees ~~about~~has ~~our~~entered ~~ability~~into toconfidentiality, ~~continue~~intellectual asproperty aassignment ~~going~~and ~~concern.~~non-competition agreements with us.

53Our ability to continue to develop and improve marketable products and to establish and maintain our competitive position in light of technological developments will depend, in part, upon our ability to attract and retain qualified technical personnel.

~~We expect to seek additional financing from a number of sources, including but not limited to public or~~CORPORATE ~~private~~INFORMATION equity offerings, debt financings, or corporate collaboration and licensing arrangements. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional dilution, and debt financing, if available, may involve restrictive covenants. If we sell shares of Biovest stock which are currently owned by us, we will reduce our ownership interest in Biovest. As part of prior financings and our Plan of Reorganization, we have granted warrants to purchase an aggregate of up to 14.4 million common stock shares of Biovest owned by us which if fully exercised would provide an aggregate of approximately $21.6 million in additional financing for us. If our Biovest subsidiary raises funds through the issuance of equity securities, our equity interest in Biovest could be substantially diminished. If Biovest raises additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to our technologies or our product candidates or grant licenses on terms that are not favorable to us. We cannot be certain that additional funding will be available on acceptable terms, or at all. If adequate funds are not available from the foregoing sources, we may consider additional strategic financing options, including sales of assets or business units that are non-essential to the ongoing development or future commercialization of Cyrevia or BiovaxID, or we may be required to delay, reduce the scope of, or eliminate one or more of our research or development programs or curtail some of our commercialization efforts. We may seek to access the public or private equity markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at this time.

~~There~~We isare aincorporated ~~high~~in ~~risk~~the State of ~~failure~~Florida. ~~because~~Our wecorporate ~~are~~and ~~trying~~principal toexecutive ~~develop~~offices ~~both~~are alocated ~~novel~~at 324 South Hyde ~~autoimmune~~Park ~~disease~~Avenue, ~~treatment~~Suite 350, Tampa, Florida 33606, and aour ~~new~~telephone ~~anti~~number is (813) 864-~~cancer~~2554. ~~vaccine~~Our website is www.accentia.net.

WeADDITIONAL ~~are~~INFORMATION ~~pursuing~~AND ~~novel~~WHERE ~~therapeutic~~TO ~~treatments, including~~FIND aIT new autoimmune disease treatment approach and a patient specific cancer therapy. Commercialization requires governmental approval, establishment of cost effective production capability, distribution capability and market acceptance. Our Cyrevia™ treatment and our BiovaxID® vaccine are subject to all of the risks of failure that are inherent in developing products based on new technologies and the risks associated with drug development generally. These risks include the possibility that:

•Our ~~our~~Annual ~~technology~~Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the ~~product~~Exchange ~~based~~Act are filed with the “SEC. Such reports and other information that we file with the SEC are available free of charge on our ~~technology~~website ~~will~~(www.accentia.net) beas ~~ineffective~~soon oras ~~toxic~~reasonably practicable after we electronically file such material with, or ~~otherwise~~furnish it ~~fail~~to, the SEC. The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100F Street, NE, Washington, DC 20549, on official business days during the hours of 10:00 a.m. to ~~receive~~3:00 ~~necessary~~p.m. ~~regulatory~~The ~~approvals;~~public may obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. The contents of these websites are not incorporated into this filing. Further, the foregoing references to the URLs for these websites are intended to be inactive textual references only.

•49 ~~future products based on our technology will be difficult to manufacture on a large scale or at all or will prove to be uneconomical to produce or market;~~

•Table proprietary rights of third parties will prevent us or our collaborators from marketing products;Contents

•ITEM ~~third~~1A. ~~parties~~RISK ~~will market superior or equivalent products;~~FACTORS

•Statements ~~technology~~in ~~advances~~this ~~which~~Annual Report ~~render~~on Form 10-K are not strictly historical in nature are forward-looking statements. These statements may include, but are not limited to, statements about: the timing of the commencement, enrollment, and completion of our ~~technology~~clinical ortrials for our product ~~outdate~~candidates; the progress or ~~less~~success ~~attractive~~of our product development programs; the status of regulatory approvals for our product candidates; the timing of product launches; our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others; and our estimates for future performance, anticipated operating losses, future revenues, capital requirements, and our needs for additional financing. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” “goal,” or other variations of these terms (including their use in the negative) or by discussions of strategies, plans or intentions. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties. The underlying information and expectations are likely to change over time.

•Factors ~~the~~that ~~products~~could ~~will~~cause actual results to differ materially from what is expressed or forecasted in our forward-looking statements include, but are not limited ~~attain~~to, ~~market~~the ~~acceptance.~~following:

~~Drug~~Risks ~~development,~~Related including clinical trials required for governmental approval, is expensive and new drugs have a high risk of failure. Based on results at any stage of development, including later-stage clinical trials and our inability to ~~bear~~Our ~~the~~Business ~~related costs associated with product development or product production or marketing, we may decide to discontinue development or clinical trial at any time.~~

~~Conducting~~We have a ~~clinical~~history ~~trial~~of ~~for~~operating ~~Cyrevia~~losses and ~~preparing~~expect ~~for and processing the BLA for BiovaxID will be expensive and time consuming. The FDA response~~ to ~~any~~ ~~application~~incur isfurther ~~uncertain and the FDA may reject or deny the application, or may impose additional requirements~~losses. ~~Such additional requirements may be expensive and/or time consuming, and meeting these additional requirements may be difficult or impossible.~~

We ~~might~~have never been profitable and we have incurred significant losses and cash flow deficits. For the years ended September 30, 2012 and 2011, we reported net losses of $9.2 million, and $15.7 million, respectively, and negative cash flow from operating activities of $6.1 million for both years ending September 30, 2012 and 2011. As of September 30, 2012, we have an aggregate accumulated deficit of $338.2 million and an aggregate accumulated stockholders’ deficit of $79.7 million. We anticipate that operations may continue to show losses and negative cash flow, particularly with the anticipated expenses associated with the initial clinical trial of Cyrevia™ and Biovest’s expenses associated with its interim analyses and efforts to seek regulatory approval for BiovaxID™. There is no assurance that, the additional required funds can be ~~unable~~obtained on terms acceptable or favorable to ~~manufacture~~us, if at all. The audit opinion issued by our ~~drug~~independent auditors ~~candidates~~with onrespect to our consolidated financial statements for fiscal 2012 indicates that there is substantial doubt about our ability to continue as a ~~commercial~~going ~~scale~~concern. ~~even~~The ifconsolidated ~~approved~~financial statements do not include any adjustments that might result from the outcome of this uncertainty. We expect to receive a similar audit opinion from our independent auditors with respect to our consolidated financial statements for fiscal 2013.

~~Assuming~~Our ~~approval~~ability ofto ~~Cyrevia™~~achieve and~~/or~~ ~~BiovaxID®,~~sustain ~~manufacturing,~~profitability ~~supply~~is ~~and~~to ~~quality~~a ~~control~~large ~~problems~~degree ~~could~~dependent ~~arise~~on asthe ~~we,~~success ~~either~~of ~~alone~~our ordevelopment efforts with ~~subcontractors,~~regard ~~attempt~~ to ~~scale-up~~Cyrevia ~~manufacturing~~and Biovest’s ~~capabilities~~efforts ~~for products~~to ~~under~~develop ~~development~~and commercialize BiovaxID. We ~~might~~may not be ~~unable~~successful ~~to scale-up~~ in aour ~~timely~~efforts ~~manner~~and oreven atif asuccessful, ~~commercially~~we ~~reasonable~~may ~~cost.~~not ~~Problems~~be ~~could~~able ~~lead~~ to ~~delays~~profitably orcommercialize ~~pose~~any ~~a threat to the ultimate commercialization~~ of our ~~product~~drug ~~and cause us to fail~~products.

~~Manufacturing~~Our ~~facilities,~~failure ~~and those of any future contract manufacturers, are or will be subject~~ to ~~periodic~~timely ~~regulatory~~repay ~~inspections~~principal bydue ~~the~~undercertain ~~FDA~~of ~~and~~our ~~other federal~~secured and ~~state~~unsecured ~~regulatory~~debt ~~agencies,~~instruments ~~and~~has ~~these~~resulted ~~facilities~~in ~~are~~events ~~subject to QSR, requirements~~ of ~~the~~default ~~FDA.~~pursuant ~~If we or our third-party manufacturers fail~~ to such ~~maintain~~debt ~~facilities~~instruments, inwhich ~~accordance~~could ~~with~~materially ~~QSR~~and ~~regulations,~~adversely ~~other~~affect ~~international~~our ~~quality~~operating ~~standards~~results, ~~or other~~our ~~regulatory~~financial ~~requirements,~~condition ~~then~~and ~~the~~our ~~manufacture~~access ~~process~~to ~~could~~capital ~~be suspended or terminated, which would harm us~~funding.

54On November 17, 2012, an aggregate of approximately $14.1 million in principal became due under our convertible debentures issued in November 2010 (the “Matured Obligations”). Because we were unable to pay the amount due on November 17, 2012, an event of default occurred under the Matured Obligations. As a result of this event of default, interest has begun accruing on the Matured Obligations at a default rate of 18% and the holders of the Matured Obligations have the right to an additional default payment of 30% on the outstanding balance due. The holders of the Matured Obligations could also cause all amounts outstanding, to be immediately due and payable. At present, the holders of the Matured Obligations have not taken any action to secure monetary judgment(s) against us for the outstanding and interest principal owed to them.

~~Because~~Also, ~~the~~on ~~product~~November ~~development~~17, ~~and~~2012, an aggregate of approximately $27.7 million in principal became due under (1) a secured convertible promissory note issued to Corps Real, LLC (“Corps Real”) with an aggregate principal balance of $3.0 million (the “Biovest ~~regulatory~~Corps ~~approval~~Real ~~process~~Note”), ~~for~~(2) secured convertible promissory notes issued to Laurus Master Fund, Ltd. (in liquidation), PSource Structured Debt Limited, Valens U.S. SPV I, LLC, Valens ~~Cyrevia™~~Offshore SPV I, Ltd., Valens Offshore SPV II, Corp., and ~~BiovaxID®~~Erato ~~will~~Corp. be(collectively, ~~expensive~~“Laurus/Valens”) with an aggregate principal balance of $23.5 million (the “Term A Notes”), and ~~its~~(3) unsecured ~~outcome~~convertible ispromissory ~~uncertain~~notes (the “Exchange Notes”) issued to the holders of the Exit Financing with an aggregate principal balance of $1.2 million (collectively, wethe ~~must~~“Biovest ~~incur~~Matured ~~substantial~~Obligations”). ~~expenses~~Because Biovest was unable to pay the amount due on ~~that~~November ~~might~~17, ~~not~~2012, an event of default occurred under the Biovest Matured Obligations. As a result of Biovest’s default under the Exchange Notes issued in ~~any~~the ~~viable~~Exit ~~product~~Financing, interest has begun accruing on those Exchange Notes at rate of 15% per annum. On December 19, 2012, a majority of the holders (Whitebox Credit Arbitrage Partners, LP, Whitebox Special Opportunities Fund Series B Partners, LP, Pandora Select Partners, LP, Whitebox Multi-Strategy Partners, LP, Whitebox Concentrated Convertible Arbitrage Partners, LP, (collectively, the “Whitebox Entities”)) of the outstanding Exchange Notes issued in the Exit Financing commenced a breach of contract action to secure monetary judgment(s) against Biovest for the outstanding principal and interest owed to them (the ~~process~~“Whitebox ~~could~~Litigation”). ~~take~~With ~~longer~~the ~~than~~exception ~~expected~~of the Whitebox Litigation, Biovest has not been notified of an event of default by the other holders of the outstanding Exchanges Notes.

~~Regulatory~~50 approval of a pharmaceutical product is a lengthy, time-consuming and expensive process. Before obtaining regulatory approvals for the commercial sale of either Cyrevia and/or the BiovaxID vaccine, we must demonstrate to the satisfaction of applicable regulatory agencies that Cyrevia and/or BiovaxID are safe and effective for use in humans. This is expected to result in substantial expense and require significant time.

Historically,Table the results from pre-clinical testing and early clinical trials often have not been predictive of results obtained in later clinical trials. A number of new drugs have shown promising results in clinical trials, but subsequently failed to establish sufficient safety and efficacy data to obtain necessary regulatory approvals. Data obtained from pre-clinical and clinical activities are susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. In addition, regulatory delays or rejections could be encountered as a result of many factors, including changes in regulatory policy during the period of product development. Contents

~~Clinical~~Pursuant ~~trials~~to ~~conducted~~cross-default byprovisions uscontained orin bycertain ~~third~~of ~~parties~~Biovest’s onother ~~our~~outstanding ~~behalf~~notes ~~might~~in ~~not~~the aggregate ~~demonstrate~~of ~~sufficient~~approximately ~~safety~~$0.3 million and $4.2 million, ~~efficacy~~may orbe ~~statistical~~declared ~~significance~~to be in default as well, and were issued to ~~obtain~~ (a) the ~~requisite~~Economic ~~regulatory~~Development ~~approval~~Authority for ~~our~~the ~~products.~~City ~~Regulatory~~of ~~authorities~~Coon ~~might~~Rapids (“EDA”) and the Minnesota Investment Fund (“MIF”) and (b) Laurus/Valens, respectively. Biovest has not ~~permit~~been usnotified toof ~~undertake~~an ~~any~~event ~~additional~~of ~~clinical~~default ~~trials~~by ~~for~~the ~~our~~EDA ~~product~~and/or ~~candidates~~MIF and the standstill agreement (discussed below) precludes Laurus/Valens from declaring a cross-default under its Term B Notes.

WeEffective ~~may~~November 17, ~~experience~~2012, ~~difficulties~~Biovest inentered ~~manufacturing~~into ~~Cyrevia™~~a standstill agreement with Corps Real and Laurus/orValens, pursuant to ~~BiovaxID®~~which (i) the maturity dates of the Biovest Corps Real Note and the Term A Notes were extended from November 17, 2012 to January 31, 2013 and (ii) Corps Real and Laurus/Valens granted Biovest a forbearance (until January 31, 2013) from their exercise of the rights and/or inremedies ~~obtaining~~available ~~approval~~to them under the Biovest Corps Real Note, Term A Notes and Term B Notes. The standstill agreement allows Biovest the time and opportunity to negotiate with Corps Real and Laurus/Valens a potential restructuring of the ~~change~~Biovest Corps Real Note, Term A Notes, and Term B Notes. If Biovest defaults under the Biovest Corps Real Note following the expiration of the period covered by the standstill agreement, Corps Real will have the right to foreclose upon its first priority security interest in ~~manufacturing~~all ~~site~~of orBiovest’s ~~process~~assets. ~~from~~If Biovest defaults under the ~~FDA~~Term orA ~~international~~Notes following the expiration of the period covered by the standstill agreement, Laurus/Valens (a) will ~~regulatory~~have ~~agencies~~right to foreclose upon their lien on all of Biovest’s assets (which is subordinate only to the security interest of Corps Real) and (b) may appoint one-third of the total membership of Biovest’s Board of Directors. The outcome of the negotiations relating to the restructuring of the Biovest Matured Obligations, which ~~could~~may ~~prevent~~include orthe ~~delay~~remainder usof Biovest’s outstanding debt, may negatively affect our ownership interest in ~~the~~Biovest ~~commercialization~~and cause our potential deconsolidation/loss of control in Biovest.

~~Manufacturing~~Effective December 3, 2012, Biovest issued an ~~approved~~additional ~~drug~~secured ispromissory ~~complex~~note ~~and~~to ~~requires~~Corps Real, ~~coordination~~which ~~internally~~provides ~~among~~Biovest ~~our~~with ~~employees,~~a asrevolving ~~well~~line ~~as,~~of ~~externally~~credit ~~with~~in ~~physicians,~~the ~~hospitals~~principal ~~and~~amount ~~third-party~~of ~~suppliers~~up ~~and~~to ~~carriers~~$1.5 ~~This~~million ~~process~~(the ~~involves~~“Biovest ~~several~~Corps ~~risks~~Real ~~that~~LOC”). ~~may~~The ~~lead~~advances under the Biovest Corps Real LOC can only be used to ~~failures~~sustain orBiovest’s ~~delays~~business operations. inThe ~~manufacturing~~Biovest ~~Cyrevia~~Corps Real LOC accrues interest at the rate of 16% per annum and~~/or~~ ~~BiovaxID,~~matures on the first anniversary of the closing of the Biovest Corps Real LOC. The Biovest Corps Real LOC is secured by a first priority lien of all ~~including:~~Biovest’s assets and the Laurus/Valens Term A Notes and Term B Notes are now subordinate in right of payment and priority to the payment in full of the Biovest Corps Real LOC.

•On ~~difficulties~~December 20, 2012, we issued an additional secured promissory note to Pabeti, the principal amount of up to $0.125 million (the “Pabeti Note II”). The Pabeti Note II can only be used to sustain our business operations. The Pabeti Note II accrues interest at the rate of 16% per annum and matures on December 20, 2013. The Pabeti Note is secured by a security interest in ~~obtaining~~all ~~adequate~~of ~~tumor~~our ~~samples~~assets ~~from~~and ~~physicians;~~6,666,666 shares of Biovest common stock owned by us.

•Ours ~~difficulties~~and inBiovest’s ~~timely~~liquid ~~shipping~~assets ofand ~~tumor~~cash ~~samples~~flow are not sufficient to fully repay the principal owed under the outstanding debt instruments owed by us and Biovest. Further, we cannot assure our shareholders that we can extend or inrestructure the ~~shipping~~Matured ofObligations ~~Cyrevia~~ and/ the Biovest Matured Obligations. We have not established access to additional capital or ~~BiovaxID~~debt to repay the ~~treating~~Matured ~~physicians~~Obligations ~~due~~and tothe ~~errors~~Biovest byMatured ~~third-party~~Obligations. ~~carriers~~Further, ~~transportation~~we ~~restrictions~~cannot assume our shareholders that we will be able to obtain needed funding to repay or ~~other~~restructure ~~reasons;~~our Matured Obligations and the Biovest Matured Obligations. Biovest’s negotiations in and the potential of Biovest restructuring of its debt obligations may negatively affect our ownership interest and cause a potential deconsolidation/loss of control in Biovest.

•We ~~destruction~~have limited cash or other liquid assets on hand. During prior years, we met our cash requirements through the use of cash on hand, orrevenue, ~~damage~~the sale of common stock, and loans. We have significant outstanding indebtedness which as of September 30, 2012 aggregated approximately $39.3 million of which $1.8 million will be automatically converted into common stock at various intervals and approximately $26.5 million that is voluntarily convertible into common stock. Our ability to continue present operations is dependent upon our ability to obtain significant external funding when required. Additional sources of funding have not been established; however, ~~tumor~~we ~~samples~~anticipate that in the future we will seek additional financing from a number of sources, including, but not limited to, the sale of equity or ~~Cyrevia~~debt securities, strategic collaborations, recognized research funding programs and domestic and/or ~~BiovaxID~~foreign ~~during~~licensing ~~the~~of ~~shipping~~our ~~process~~product ~~due~~candidates. There can be no assurance that we will be successful in securing needed financing at acceptable terms, if at all. If adequate funds are not available, or if we determine it to otherwise ~~the~~be ~~improper~~in ~~handling~~our bybest ~~third~~interests, we may consider additional strategic financing options, including sales of assets or business units that are non-~~party~~essential ~~carriers~~to the ongoing development or future commercialization of our drug candidates in development or we may be required to delay, ~~hospitals~~reduce the scope of, ~~physicians~~or eliminate one or ~~us;~~more of our research or development programs or curtail some of our commercialization efforts.

•If ~~destruction~~we ~~of,~~are successful in procuring additional financing when required it will most likely result in our issuing additional shares and/or ~~damage~~rights to acquire shares of our capital stock, ~~tumor~~in ~~samples~~the oralternative ~~Cyrevia~~it may result in our selling shares of our majority-owned subsidiary, Biovest, which we currently own, and/or ~~BiovaxID~~selling, ~~during~~licensing ~~storage~~or atpartnering of our ~~facility;~~other ~~and~~assets. Accordingly, our access to additional financing when needed is anticipated to be dilutive to existing shareholders.

•51 ~~difficulties in ensuring the availability, quality, and consistency of materials provided by our suppliers.~~

IfTable weof experience any difficulties in manufacturing Cyrevia and/or BiovaxID, commercialization may be delayed, resulting in delays in generating revenue and increased costs. Contents

InIf, ~~addition~~as or when required, ~~because~~we ~~Biovest~~are ~~has~~unable ~~relocated~~to ~~the~~repay, ~~site~~refinance ofor ~~the~~restructure ~~manufacturing~~our ~~process~~indebtedness ~~for~~under ~~BiovaxID~~our tosecured ~~Biovest’s,~~or ~~Minneapolis~~unsecured ~~(Coon~~debt ~~Rapids)~~instruments, ~~facility~~or ~~following~~amend the ~~clinical~~covenants ~~trials~~contained therein, wethe ~~are~~lenders ~~required~~and/or toholders ~~demonstrate~~under tosuch ~~the~~secured ~~FDA~~or ~~that~~unsecured ~~the~~debt ~~product~~instruments ~~developed~~could ~~under~~elect ~~new~~to ~~conditions~~terminate istheir ~~comparable~~commitments tothereunder, ~~the~~cease ~~product~~making ~~that~~further ~~was~~loans ~~the~~and ~~subject~~institute foreclosure ofproceedings ~~earlier~~or ~~clinical testing~~other actions against our assets. ~~This~~Under ~~requirement~~such ~~applies~~circumstances, towe ~~the~~could ~~relocation~~be atforced ~~the~~into ~~Minneapolis~~bankruptcy ~~(Coon~~or ~~Rapids)~~liquidation. ~~facility~~In addition, asany ~~well~~event asof ~~future~~default ~~expansion~~or declaration of ~~the~~acceleration ~~manufacturing~~under ~~facility,~~one ~~such~~of asour ~~the~~debt ~~possible~~instruments ~~expansion~~could toalso result ~~additional~~in ~~facilities~~an ~~that~~event of default under one or more of our other debt instruments. We may behave ~~required~~to ~~for~~seek ~~successful regulatory~~protection ~~approvals~~under orthe ~~commercialization~~U.S. ofBankruptcy Code from the ~~vaccine~~Matured Obligations. We cannot assure our shareholders that such a proceeding, ~~resulting~~if voluntarily or involuntarily instituted, would be successful in ~~increased~~protection ~~costs~~our shareholders. ~~There~~This iswould ~~also~~have a ~~requirement~~material ~~for~~adverse ~~validation~~impact ofon ~~the~~our ~~manufacturing~~liquidity, ~~process~~financial ~~for~~position ~~BiovaxID~~and ~~utilizing~~results ~~our~~of ~~AutovaxID® instrument~~operations.

AOur ~~showing~~independent ofregistered ~~comparability~~public ~~requires~~accountants ~~data demonstrating~~have ~~that~~expressed ~~the~~substantial ~~product~~doubt isas ~~consistent with that produced for the clinical trial and continues~~ to beour ~~safe,~~ability pure, and potent and may be based on chemical, physical, and biological assays and, in some cases, other non-clinical data. If we demonstrate comparability, additional clinical safety and/or efficacy trials with the new product may not be needed. The FDA will determine if comparability data are sufficient to ~~demonstrate~~continue ~~that~~as ~~additional~~a ~~clinical~~going ~~studies are unnecessary~~concern. If the FDA requires additional clinical safety or efficacy trials to demonstrate comparability, our clinical trials or FDA approval of Cyrevia and/or BiovaxID may be delayed, which would cause delays in generating revenue and increased costs.

As of September 30, 2012, we had a working capital deficit of $55.0 million. We have a significant amount of debt, approximately $14.1 million of which matured on November 17, 2012 discussed above. We expect to continue to incur substantial net operating losses for the foreseeable future. Continued operating losses would impair our ability to continue operations. We may not be able to generate sufficient product revenue to become profitable on a sustained basis, or at all. We have operating and liquidity concerns due to our significant net losses and negative cash flows from operations. As a result of these and other factors, our independent registered certified public accountants, Cherry, Bekaert, and Holland, L.L.P., have indicated, in their report to our 2012 consolidated financial statements, that there is substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon generating sufficient cash flow to conduct operations and obtaining additional capital and financing. Any financing activity is likely to result in significant dilution to current shareholders.

~~Because~~Our weconsolidated financial statements have ~~limited~~been ~~experience,~~prepared assuming we will continue as a going concern and do not include any adjustments that might result befrom ~~unsuccessful~~the outcome of this uncertainty. We incurred net losses of $9.2 million, and $15.7 million in 2012 and 2011, respectively. We have also experienced negative cash flows from operations for the past three fiscal years. In addition, our ~~efforts~~projected cash receipts from operations for fiscal 2013 are anticipated to ~~develop~~ be insufficient to finance operations without funding from other sources. Historically, we have had difficulty in meeting our cash requirements. There can be no assurances that we will obtain ~~approval~~the ~~for~~necessary funding, ~~commercially~~reduce ~~produce~~the orlevel ~~successfully~~of ~~market~~historical ~~Cyrevia™~~losses ~~and/~~or ~~BiovaxID®~~achieve successful commercialization of any of our product candidates. Continuation as a going concern is ultimately dependent upon achieving profitable operations and positive operating cash flows sufficient to pay all obligations as they come due.

~~The~~Our ~~extent~~operating toresults ~~which~~may wefluctuate widely ~~develop~~between ~~and~~reporting ~~commercialize~~periods. ~~Cyrevia and BiovaxID will depend on our ability to:~~

•Our ~~complete~~operating ~~required~~results ~~clinical~~may ~~trials;~~vary significantly from quarter-to-quarter or year-to-year, depending on factors such as timing of biopharmaceutical development and commercialization of products by our customers, the timing of increased research and development and sales and marketing expenditures, the timing and size of contracts and whether we introduce to the market new products or processes. Consequently, revenues, profits or losses may vary significantly from quarter-to-quarter or year-to-year, and revenue, profits or losses in any period will not necessarily be indicative of results in subsequent periods. These period-to-period fluctuations in financial results may have a significant impact on the market price, if any, of our securities.

•Our ~~obtain~~business ~~necessary~~could ~~regulatory~~be ~~approvals;~~adversely affected or we could fail, if we are unable to service our obligations under our incurred indebtedness.

•Our ~~establish,~~ability to pay interest and principal amounts when due or ~~contract~~to ~~for~~comply with debt covenants will depend upon, among other things, continued commercial success of our product candidates, access to funding when required, ~~manufacturing~~the ~~capacity;~~ability to enter into business or strategic relationships, and other factors that affect our future financial and operating performance, including, without limitation, prevailing economic conditions and financial, business, and regulatory factors, many of which are beyond our control. As previously discussed on November 17, 2012, approximately $14.1 million of our debt matured and accordingly we are currently in default under a portion of those debt instruments.

•If ~~establish,~~we orare ~~contract~~unable ~~for~~to generate sufficient cash flow to meet the debt service requirements under our incurred indebtedness, ~~sales~~we ~~and~~may ~~marketing~~be ~~resources.~~forced to take actions such as:

We• ~~have~~restructuring ~~limited experience with these activities and might not be successful in the trials, product development~~ or ~~commercialization.~~refinancing our debt;

~~FDA’s~~• ~~determination~~seeking ~~that~~additional ~~SinuNasal™~~debt isor toequity be regulated as a combination product with a drug primary mode of action rather than as a medical device will, if not overturned, adversely affect our ability to commercialize SinuNasal, and may cause us to discontinue the project.

Filing Compare · ACCENTIA BIOPHARMACEUTICALS INC