Entest BioMedical, Inc. (OTCBB: ENTB)

Entest BioMedical, Inc. (OTCBB: ENTB) is a biotechnology company focused on Veterinary Treatments that harness the animal’s reparative/ immunological mechanisms. Current market segments addressed by the Company’s treatments are:

1. Canine immuno-therapeutic cancer vaccines (dogs),
2. Expanded applications of immuno-therapeutic cancer vaccine for treating exotic species / zoo animals,
3. Development of Stem Cell related therapies for treating other veterinary maladies.

Entest also plans to acquire veterinary clinics for the marketing and distribution of its veterinary therapies. These clinics would provide immediate revenue and cash flow to fund development of the Company’s veterinary therapies. Entest believes it has the ability to self-fund R&D though internally generated cash flow.

The Company is also currently developing a stem cell therapy treatment for Chronic Obstructive Pulmonary Disease (COPD) in thoroughbred race horses, and Entest hopes to eventually sell/license/partner with large pharmaceutical company to bring this product to the much larger human market. Stem Cell Research has been in the news this past election season, and Entest is NOT subject to the recent court decisions as the Company has adopted a veterinary first approach, believing once efficacy in animals is established and near term revenue achieved, viability in transitioning to human applications can be made via joint ventures and license agreements.

CEO David Koos on ENTB Overview

Part II of David Koos Video Interview

ENTB

ENTB Stock Profile @ OTCBB

• Common Shares Outstanding: 19.5 M
• Insiders & Affiliates: 79% ownership
• Shares in the Float: N/A
• Stock Price as of 11/8/10: $1.09
• Market Capitalization: $21.2 M
• Total Assets: $143 K as of 5/31/10
• Equity: $(53K) as of 5/31/10

Investment Highlights:

• Veterinary Biotechnology: Entest is a developer of advanced medical therapies that address sizeable and underserved markets with the potential for faster commercialization than human therapies;
• Veterinary Oncology: Developing next generation veterinary oncology therapies with first product expected to hit the market within 8-12 month;
• Veterinary Clinic Acquisitions: Entest plans to generate near-term revenue by consolidating profitable independent veterinary clinics at low market multiples, and has signed a Letter of Intent for their first clinic;
• Ability to self-fund R&D though internally generated cash flow;
• 7 patents pending;
• The Entest BioMedical model of “Pets First” is historically an underserved market with a shorter path to regulatory approval;
• Ability to generate near-term cash flow will help fund long- term human trials;
• Management expects that successful clinical trials and commercialization may help attract interest from larger pharmaceutical companies for human development;
• One in every four dogs will develop cancer during its lifetime; kills nearly half of pet dogs over the age ten;
• $300 million veterinary cancer care market;
• 49.7% of pet owners consider their pets to be family member;
• Cancer in canines is stiil predominantly treated through surgical excision, chemotherapy and radiation which is highly invasive and can result in numerous unpleasant side-effects

COPD in humans is a progressive disease that makes it hard to breathe. "Progressive" means the disease gets worse over time. COPD can cause coughing that produces large amounts of mucus (a slimy substance), wheezing, shortness of breath, chest tightness, and other symptoms. Cigarette smoking is the leading cause of COPD. Most people who have COPD smoke or used to smoke. Long-term exposure to other lung irritants, such as air pollution, chemical fumes, or dust, also may contribute to COPD.

Capital Raise

 

Entest Veterinary Oncology Centers (VOC)

The goal of Entest is to become the "Cleveland Clinic of Veterinary Oncological Medicine" with revenue from established veterinary clinics. Entest management believes it has the ability to acquire small veterinary clinics for approximately 3 times net income, and the clinics acquired are intended to provide:

• Platform for clinical studies and marketing new “Vet First” drugs;
• Stable and predictable source of cash flow;
• 12 month target is to acquire 5 to 10 clinics producing $3 million in revenue;

After acquiring Vet Clinics, Entest would establish the Veterinary Oncology Center where they would either buy or build out a VOC's. Entest vet clinics’s would refer an average of 750 canine cancer cases per year to Entest VOC's which normally get referred to outside VOC's. Management estimates the VOC's could generate:

• 750 canine cancer cases @ $5,000 per dog = $3,750,000 in revenue;
• Expected revenue from VOC servicing 4 VetC’s after 12 months = $15,000,000;
• Establish national brand "Entest Veterinary Oncology Center";
• Currently there are only 20 Veterinary Onology Centers nationwide.

First Acquisition McDonald Animal Hospital of Santa Barbara, CA

Entest filed an 8-K on October 28, 2010 in reference to their first acquision. Entest signed a LOI with the McDonald Animal Hospital which operates a full service veterinary clinic in Santa Barbara, California. The clinic has operated at its current location for approximately 12 years and has generated revenues in excess of $650,000 for the 12 months ended December 31, 2009. There are additional clinics which have been identified in the McDonald Animal Hospital, Inc.  geographical area which the Company anticipates attempting to acquire and merge into McDonald Animal Hospital. Entest has identified seven additional clinics for sale which have been represented to the Company as historically having produced average annual revenue of $500,000 per clinic.

Products

ImenVax (TM) - Immuno-Therapeutic Cancer Treatment for Canines

In the encapsulated ImenVax™ device, a “cocktail” of integral immuno-catalysts are enclosed. From this ImenVax™ device immuno-catalysts are released which activate the patient’s immune cell. These immune cells carry on their normal course of activity by entering the lymph nodes and cause T-Cell adaptation. These T-Cells are what attack and kill the tumor.

The initial focus is treatment of cancer in canines, and the data from canine treatment is used to support eventual use in humans. This does not result in the deleterious side effects associated with traditional therapies. It utilizes an animal’s own tumor cells to induce the immune system to attack remaining tumor cells. These cells are extracted from subject and are loaded into implantable device(s). The encapsulated tumor cells shed antigens as cells atrophy to induce anti‐tumor response that kills the remaining tumor.

ImenVax receives a "Veterinarian exemption" during the regulatory process as the veterinarian-client-patient (VCP) relationship under 9 CFR 107.1 allows use without veterinary biologics license once the Company completes a 10 dog safety study.

Entest has developed a microsphere/nanoparticle‐based method which provides for local controlled release of immuno-catalysts. This design avoids the typical limited effects and adverse responses believed due to current short term delivery methods.

Regulatory Process ImenVax™ II

• Veterinary Biologic regulated by USDA, under the 1913 Virus-Serum-Toxin Act;
• Exempt from USDA licensing if manufactured and dispensed in accordance with the Veterinary Safe Harbor;
• Veterinary Biologics Establishment License and Veterinary Biologics Product License are required for sales not exempted   under the Veterinary Safe Harbor.

Steps to Market ImenVax™ II

• Complete clinical trials (up to 18 months);
• Create sales through veterinary clinics (including ones acquired by Entest);
• Obtain Veterinary Biologics Establishment License and Veterinary Biologics Product License ( up to 24 months)
• Create wider distribution through sales not falling under “Veterinary Safe Harbor". ImenVax III is an “off the shelf” canine cancer vaccine that does not require tumor processing resulting in substantial cost savings. It treats existing tumors through stimulating immune responses to kill tumor cells directly and it indirectly kills tumor cells by cutting off the tumor blood supply. This blocks the ability of the tumor to suppress the immune system. In a published study by Dr. Thomas Ichim, ImenVax III demonstrated efficacy in treatment of mouse melanoma model.

The regulatory process for ImenVax™ III if for U.S. FDA approval of New Animal Drug Application since it is a combination product. Completed clinical trials are expected in 18 months with regulatory approval in 24 months. Entest will begin marketing immediately following regulatory approval, and will drive sales through veterinary clinics (including ones acquired by Entest).

 

ENT-576 (TM) - Stem Cell Therapy for Chronic Obstructive Pulmonary Disease (COPD)

ENT-576™ is a non-invasive therapy that mobilizes stem cells to the damaged areas of the lung to increase regenerative cell growth. After a patient is administered the FDA approved stem cell mobilizer, a “homing” device is used to attract these stem cells to the areas of the lungs affected by COPD. It is the presence of these stem cells that lung regeneration will occur.

Competition

Pfizer's PALLADIA is currently the only FDA approved veterinary drug for an oncology indication. Palladia (toceranib phosphate) is indicated for the treatment of Patnaik grade II or III, recurrent, cutaneous mast cell tumors with or without regional lymph node involvement in dogs.Potential Drawbacks to Palladia:

• Kinase inhibitors lead to drug resistance: temporary solution as tumor mutates,
• Targets pathways used by the body for healthy functions (kinases),
• Partial responses that often result in relapse,
• In mast cell tumors, 37-42% response rate, responses 12-18 weeks  (London et al. Clinical Cancer Research June 2009 15; 3856).

Oncept Merial is the only USDA approved biologic agent. Oncept is a transdermal  vaccine consisting of plasmid DNA encoding human tyrosinase protein.  The vaccine is indicated for the treatment of dogs with stage II or stage III oral melanoma.   The USDA has issued a conditional U.S. Veterinary Biological Product License for this therapeutic vaccine.

• Potential Drawbacks to Oncept: Every melanoma is different, tyrosinase expression only in proportion of tumors, tumors then can lose expression;Requirement for gene gun. 
• ImenVax™ Advantages: Managment believes ImenVax to be more effective than alternative treatments because as tumor mutates, the immune system also adapts (less possibility of resistance). ImenVax™ Tumor Vaccine reprograms immune system to only kill tumor cells (augmenting body’s own natural ability to fight cancer).

Entest BioMedical, Inc. Patent Applications

• 61/262,081  Use of an Implantable Chamber Device for Induction of Immune Tolerance
• 61/316,151  Method for Regeneration of Tissue with Mobilized Stem Cells
• 61/319,214  Improving Quality of a Cellular Graft
• 61/364,662  Method for Producing RBC from Immortalized Hematopoietic Lineage Cells
• 61/352,227  Treatment of Human and Companion Animal Tumors
• 61/367,521  Ex Vivo Treatments for Enhancing Anti-Tumor Effects of Autologous Vaccines
• 61/371,815  Implantable Device for In Vivo Drug Delivery

Management 

David R. Koos, PhD, DBA – Chairman & CEO - David Koos has over 26 years of investment banking and venture capital experience with a primary focus on medical and biotechnology ventures. He has authored / co‐authored peer reviewed journal articles on biotechnology and related subjects including immunotherapy and COPD. David has a Ph.D. degree in Sociology and a Doctor of Business Administration in Finance.

Tammy L. Reynolds, CPA – Chief Financial Officer, Director - Tammy previously worked with Science Applications International Corporation (SAIC) dealing in mergers and acquisitions, financial reporting, fixed asset reconciliation, compliance and budgeting / forecasting. She is a former Senior Accountant with Bruno Skorheim, LLP where she worked with corporate clients in the areas of financial reporting and tax compliance. Tammy has a Bachelor of Science degree from San Diego State University in Business.

Feng Lin, MD, PhD – Director of Research - Dr. Feng Lin has a strong background in cell biology, cancer biology and therapy. He also has extensive experience with tissue imaging, and stem cell differentiation. Previously, Dr. Lin was a Senior Research Scientist, Research & Development with Inovio BC, San Diego and Postdoctoral Fellow in the Burnham Institute for Medical Research, La Jolla. He received his M.D. from Central South University Xiangya School of Medicine, Changsha, China, along with a M.S. Biochemistry & Molecular Biology and a Ph.D. Hematology & Physiology from the same institution. Dr. Lin's research work has been widely published in international scientific journals.

Scientific Advisors

Dr Gregory McDonald 

Dr. Gregory McDonald was added to the Scientific Advisory Board (SAB) in November 2010. The Company views this as a major step in moving forward with its immuno-therapeutic cancer vaccine for dogs, as Dr. McDonald is a practicing veterinarian and typically treats more than 700 dogs per year that have various forms of cancer. Dr. McDonald joins Entest with a strong background in both clinical and research aspects of cancer therapy. He has authored numerous publications on many aspects of veterinary medicine. He received his Doctor of Veterinary Medicine degree (DVM) from Ohio State University in 1979. Additionally, Dr. McDonald has been involved with veterinary applications of stem cell therapies, focusing on leading edge treatments for his patients.

Brian Koos, M.D., D.Phil.

Professor of Obstetrics and Gynecology

David Geffen School of Medicine

University of California at Los Angeles (UCLA)

 

Dr. Koos is an internationally-recognized clinician-scientist who has published in diverse areas ranging from gestational diabetes to circulating endothelial progenitor cells, to adenosine receptors.  To date he has 52 publications on Pubmed.  He is board certified in maternal and fetal medicine, as well as obstetrics and gynecology.  Dr. Koos has a clinical interest in Amniocentesis, Chorionic Villi Sampling, Clinical Trials, Early Amniocentesis, External Cephalic Version, Fetal Diagnostic, General Obstetrics, Genetics, High Risk Pregnancy, Maternal Fetal Medicine, Obstetrical Ultrasound, and Recurrent Pregnancy Loss.  He obtained his MD from Loma Linda University in 1974, his internship and residency were at the Harvard Affiliate Brigham and Women’s Hospital from 1975-1979.  He received a Doctor of Philosophy (D.Phil.) degree in 1982 from Oxford University and a Fellowship in Maternal-Fetal Medicine at USC from 1982-1983.

 

Ewa Carrier, M.D.

Associate Professor of Clinical Medicine and Pediatrics

University of California San Diego (UCSD)

Blood and Marrow Transplant Program 

Dr. Carrier’s research focuses on stem cell biology and its transplantation to cancer and organ repair. She focuses on the properties of pluripotent stem cells, including embryonic, fetal, mesenchymal and bone marrow stem cells, to generate differentiation protocols for the treatment of a variety of disorders. Clinically, Dr. Carrier works on multiple protocols related to stem cell transplant for cancers, such as leukemias, lymphomas and multiple myeloma as well as autoimmune diseases. She participates in the protocols within the NIH-sponsored Clinical Trial Network, and is a member of NIH-funded national consortium to treat autoimmune diseases with stem cells. 

Steven Josephs, Ph.D.

Chief Science Officer

Therinject LLC, San Diego, CA 

Dr. Josephs has 34 years of experience in research and clinical product development and production for biologics, gene therapy and medical devices. He has previously served as Director of Research and Development for Therapheresis, Inc., Head of Virology and Senior Research Scientist for Baxter Healthcare Corporation, and Director of Molecular Biology at Universal Biotechnology, Inc. where Dr. Josephs directed a group performing contract molecular biology services for government and private industry. Dr. Josephs has also served for the National Cancer Institute, where his duties included studies of the human T-cell leukemia virus as well as sequence determination and functional analyses of HIV. Dr. Josephs holds a B.A. in Chemistry, a Ph.D. in Chemistry and has been granted a Professional Certificate in Drug Development and an ADMET process certificate by the University of California, San Diego. He has also earned a Master of Science in Science Teaching.

Vladimir Bogin MD.

CEO

Cromos Pharma LLC

 

Dr. Bogin is currently the President and CEO of Cromos Pharma, a contract research organization that specializes in biopharmaceutical clinical outsourcing into areas with the most compelling environment for biopharmaceutical research: Russia and Eastern Europe. From 2008 to 2009 he was also the Director of Boehringer Ingelheim (a privately held pharmaceutical company) where he was in charge of the phase IV program for Dabigatran Etexilate. While first being published in 1995 on the subject of liver care, he has continuously spanned his focus and research capturing the therapies for HIV, liver failure, Budd-Chirari Syndrome, Nontropical Pyomyositis, donor transplantations, endometrial regenerative cells (ERC),  exosomes as a tumor immune escape mechanism, atrial fibrillation, COPD, and most recently left atrial enlargement. Dr. Bogin studied medicine at the Yale University School of Medicine and the University of Rochester School of Medicine and Dentistry.

Update on Wednesday, December 15, 2010 at 9:15AM by Editor

Comparison Shopping – ENTB versus WOOF in the GROWING Pet Market

Not even the fragile economy of the last 2-3 years could slow down the billions spent by Americans on their beloved pets. According to the American Pets Products Association, owners spent $45.5 billion on their pets in 2009, up from $43.2 billion in 2008. It is currently projected that pet owners will spend around $48 billion in 2010. Today, 62% of households in the US have at least one pet, and there are 51,000 Vets in the US alone.

ENTB trades on the OTCBB today, and people are beginning to understand its marketspace best by comparing the stock to WOOF, which has a similar business model. VCA Antech (Nasdaq:WOOF) operates in three divisions:

1. Animal Hospitals,
2. Laboratories, and
3. Medical Technology.

WOOF’s 523 animal hospital’s are operated throughout 40 states, and they own veterinary diagnostic laboratories throughout the US and Canada. WOOF also sells Veterinary medical technology to their own hospitals and labs along with outside hospitals and labs.

WOOF has rolled up veterinary clinics into a $2.0 Billion market cap, and the Company is trading at a 17.6 forward P/E ratio. Volume is roughly 900,000 shares per day. WOOF closed on Friday December 10, 2010 at $23.18 and there were unconfirmed rumors at Seeking Alpha that WOOF will be acquired by PetSmart, Inc. (PETM) at $32.00 a share.

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The Rollup - WOOF has gotten so large and now it is only interested in vet clinics generating $1.5 million+, which leaves a large gap in the market for ENTB as there are 22,000 vet hospitals today in the US alone. Entest is not only looking to roll up vet clinics but is interested in geographical penetration as well (buy one clinic and vend in other smaller clinics in the same area resulting in economies of scale).

Benefits both WOOF and ENTB would share:

• Seasonal fluctuations – warmer months animals are outdoors more and susceptible to fleas, heartworms and ticks (WOOF 10K).
• Administrative cost advantage,
• Cost of equipment/upgrading,
• Operational ease, less time managing,
• Diversify facility investment, and
• Flexible schedules.

ENTB should be able to improve operating efficiencies with all operations utilizing enterprise-wide information systems. These provide:

• More effective management of key operating matrices that drive the vet business,
• Standardize pricing,
• The ability to expand services,
• The ability to captured unbilled services, and

 Additional Benefits of ENTB over WOOF:

• Entest has ImenVax (immuno-therapeutic cancer vaccine for dogs).
• WOOF is fully valued while ENTB is just beginning its growth. 

ENTB - Growing Into Its Valuation

ENTB expects to have very good margins of 60+% on their clinics. Currently they have their first clinic in process and they have a 12 month target to acquire up to 10 clinics producing $5.0 million in revenue sand and show roughly $3.3 million in earnings.

As mentioned in the original article, after acquiring Vet Clinics, Entest would establish the Veterinary Oncology Center where they would either buy or build out a VOC's. Entest vet clinics’s would refer an average of 750 canine cancer cases per year to Entest VOC's which normally get referred to outside VOC's. Management estimates the VOC's could generate:

• 750 canine cancer cases @ $5,000 per dog = $3,750,000 in revenue;
• Expected revenue from VOC servicing 4 VetC’s after 12 months = $15,000,000;
• On $15 million, ENTB would potentially show $9 million in earnings. Assuming 25 millions shares outstanding (currently 19.5 million), ENTB would show earnings per share of $0.36;
• At 15X earnings, ENTB would trade at roughly $5.40.

Now ENTB is not there today, but the model is in place and the first aquistion is in place. We will continue to report on progress by ENTB over the next quarter.

Recently The Konlin Letter confirmed similar thoughts about Entest:

“The stock broke out of an up formation, and we would use weakness to purchase for an initial target of $2.50-3.00, especially since ENTB has unrestricted access to the laboratory facilities of its major shareholder BMSN which houses two secure Cryogenic stem cell banks. ENTB has a clean capital structure and no long-term debt. Of the 17.6 million shares outstanding, insiders and affiliates own 68.4%. ENTB is a developer of advanced medical therapies addressing sizeable and underserved markets for pets and animals. Ultimate target 7-9.”

Update on Friday, January 21, 2011 at 9:30PM by Editor

Entest BioMedical (OTCBB: ENTB) closed today at $3.50 and the stock was traded below $1.50 before the end of 2010. So what happened?

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Entest announced the acquisition of the McDonald Animal Hospital (MAH) in Santa Barbara, California. Entest officially took control of MAH on January 4, 2011. The McDonald Animal Hospital represents the first of several anticipated acquisitions by ENTB, and they are focusing on veterinary acquisition candidates in California. Thus, Entest has successfully completed its first move from a “emerging growth company” to a revenue producing business with significant upside potential from ImenVax™, which is the company's immuno-therapeutic cancer vaccine that utilizes an encapsulation device as the vaccine delivery system and requires a simple implant procedure. ImenVax was outlined in our ENTB Report @ Waterville Research. ENTB stated in their recent 8-K filing that they:

“currently plan to raise additional funds by obtaining governmental and non-governmental grants as well as offering securities for cash.”

This can often cause concerns for investors, but people are starting to see that David Koos and his management team are delivering results with limited capital on hand. Assuming the Company has capital, ENTB should be in a stronger position.

After our comparison of ENTB versus WOOF, VCA Antech (WOOF) has traded down the past few days despite a strong overall market. We will continue to post updates on ENTB.

Update on Wednesday, February 2, 2011 at 6:05AM by Editor

The Company put out a press release last week informing investors of "Veterinary Clinic Acquisitions, Business Expansion and ImenVax(TM) Safety Study."

In the release, Entest BioMedical David Koos covered a number of updates:,

• The acquisition of McDonald Animal Hospital by ENTB was closed;
• Entest is examining two more veterinary facilities that have a combined annual revenue of $1.5 million with room for expansion."
• The McDonald facility is in the process of adding additional veterinarians, developing advertising campaigns to drive business, expanding the hours of operation and providing emergency services on weekends. Koos stated that he expects "to double the revenue at MAH over the next 18 months."
• Jennifer Hammervold is the new Director of Veterinary Practice Management. She will oversee future acquisition candidates and coordinate their integration into the Company.  
• Entest is currently recruiting dogs with cancer to participate in the ImenVax™ 10 Dog Safety Study. ImenVax™ is an immuno-therapeutic cancer vaccine being developed for dogs. Everyone involved with this research is anticipating strong results in the treatment of oral melanoma.

Since that announcement, the ENTB stock has made a steady climb to yesterday's close at $4.07.



Update on Sunday, February 6, 2011 at 7:14PM by Editor

Difficult to prevent and treat, canine hip dysplasia is among the most studied and the most frustrating diseases in veterinary medicine.  Canine hip dysplasia is a developmental orthopedic disease in which an abnormal formation of the hip leads to looseness in the hip joints, causing cartilage damage.  Progressive arthritis can result, and when it does, it can be crippling. 

• One out of every four dogs will get hip dysplasia;
• Entest and RenovoCyte are researching the use of Medistem's Canine Endometrial Regenerative Cells (CERCs) as part of a treatment for canine hip dysplasia;
• Entest's McDonald Animal Hospital will serve as clinical base for studies.

Entest BioMedical Inc. (OTCBB: ENTB) announced last week their collaboration with RenovoCyte LLC and Medistem Inc. to explore the development of a stem cell therapy for treating hip dysplasia in dogs.

Pfizer pioneered the market for dog painkillers when it introduced Rimadyl in 1997. Nearly 15 million dogs have taken it, many for pain from degenerative joint disease, or osteoarthritis. Rimadyl now has four competitors with more likely. The market for dog arthritis pain medications tops $130 million a year and is growing about 13% a year, consulting firm Wood Mackenzie says.

Entest's Chairman & CEO, David Koos, stated in the press release:

"Our Company is extremely excited about clinically applying Medistem's Canine Endometrial Regenerative Cells (CERCs) and RenovoCyte's Investigational New Animal Drug (INAD) protocols at our McDonald Animal Hospital. Entest views this collaboration as a major step in developing veterinary therapeutics that increase the quality of life for our pets."

Both RenovoCyte's CEO Dr. Erik Woods and Medistem's Chairman Vladimir Bogin, M.D., stated they anticipate these CERCs will reduce the inflammation and the degenerative nature of hip dysplasia in dogs.

Entest noted that once efficacy is demonstrated in treating hip dysplasia, the door will be wide open for collaboration to expand its focus to treating other veterinary conditions that are lacking a good treatment model. The Entest BioMedical model continues to focus on the development of regenerative and immunological therapies for veterinary applications. ENTB is focused on:

• Veterinary therapies that harness the animal's own reparative and immunological mechanisms.
• An immuno-therapeutic cancer vaccine for canines (ImenVax™).
• Acquiring veterinary hospitals as both a source of near term revenue and as a distribution channel for its veterinary therapies and treatments. As part of this mission, Entest purchased the McDonald Animal Hospital on January 4, 2011, which serves to both generate revenue and provide the initial part of Entest's distribution channel.

Update on Wednesday, February 23, 2011 at 12:16PM by Editor

Entest BioMedical Inc. (OTCBB: ENTB) has signed a letter of intent (LOI) to acquire three veterinary hospitals located in Southern California. These three veterinary hospitals are sister businesses which Entest has been informed generated a combined historic revenue stream of $900,000 per year.

David Koos, CEO of Entest, stated yesterday in a press release:

"Based on historical performance, the successful acquisition of these three hospitals could result in a potential $900,000 per year increase in our overall revenue. This veterinary hospital group's three Orange County area facilities are located in extremely affluent communities whose strong economic base should support business expansion."

Mr. Koos also noted the potential revenue stream from the three hospitals combined with potential revenue from an unrelated previously disclosed pending acquisition "could put Entest on pace to produce $2 million per year in revenue once these transactions are closed."

This acquisition follows on from a press release earlier in the month when Entest announced the Company has entered into escrow on the proposed purchase of a veterinary hospital located in Southern California.

Mr. Koos stated at that time:

"I'm excited about this potential acquisition. Not only does it represent a second spoke in our distribution wheel for ImenVax™ and other potential products but we believe it should bring us approximately $500,000 per year in near term revenue. We have already acquired the McDonald Animal Hospital and, once this new acquisition is made, we expect our near term revenue from these two veterinary hospitals to exceed $1.1 million on an annualized basis."

ImenVax™ is an immuno-therapeutic cancer vaccine for dogs currently under development by Entest. The Company recently announced the initiation of a collaboration with RenovoCyte LLC and Medistem Inc. to explore the development of a stem cell therapy for treating hip dysplasia in dogs..

Entest has increased the number of veterinarians at the McDonald Animal Hospital ("MAH") located in Santa Barbara, California, and has begun an aggressive marketing campaign in the Santa Barbara area to create public awareness of MAH's involvement with stem cell therapy for animals and immuno-therapeutic cancer vaccines for dogs. Entest acquired the McDonald Animal Hospital on January 4, 2011.