- Quarterly Report (10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

R	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

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

For the transition period from __________ to ____________

Commission File Number: 333-06718

VIROPRO, INC.
	(Exact name of registrant as specified in its charter)

Nevada	13-3124057
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4199 Campus Drive, Suite 550, Irvine, CA	92612
(Address of principal executive offices)	(Zip Code)

(949) 783-6573

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 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 £ No R

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes £ No R

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	o	Accelerated Filer	o
Non-Accelerated Filer	o (Do not check if a smaller reporting company)	Smaller reporting company	þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes £ No R

As of June 30, 2011 the number of the Company's shares of par value $.001 common stock outstanding was 387,989,570.

VIROPRO, INC.

FORM 10-Q

June 30, 2011

		Page

PART I — FINANCIAL INFORMATION		3
Item 1:	Financial Statements	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations (Unaudited)	5
	Consolidated Statements of Cash Flows (Unaudited)	6
	Notes to Consolidated Financial Statements	7
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3:	Quantitative and Qualitative Disclosures about Market Risk	21
Item 4:	Controls and Procedures	21
PART II — Other Information		24
Item 1:	Legal Proceedings	25
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3:	Defaults Upon Senior Securities	25
Item 6:	Exhibits	26

VIROPRO, INC.

FORM 10-Q

June 30, 2011

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying financial statements have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders’ equity in conformity with generally accepted accounting principles. Except as disclosed herein, there has not been a material change in the information disclosed in the notes to the financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2010. These interim financial statements should be read in conjunction with the financial statements and accompanying notes included in such annual report. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the six months ended June 30, 2011 are not necessarily indicative of the results that can be expected for the year ended December 31, 2011.

VIROPRO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2011 (UNAUDITED) AND DECEMBER 31, 2010
(IN US$)

ASSETS

		June 30,			December 31,
		2011			2010
		(unaudited)
CURRENT ASSETS
Cash		$	191,090		$	58,932
Accounts receivable			52,892			103,904
Prepaid expenses			346,151			10,000
	Total current assets		590,133			172,836

Property and equipment,
net of accumulated depreciation			70,570			57,638
	Total other assets		70,570			57,638

Security deposits			5,593			5,593
Goodwill			1,877,479			1,877,479
			1,883,072			1,883,072

TOTAL ASSETS		$	2,543,775		$	2,113,546


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable and accrued expenses		$	649,666		$	461,086
Convertible debentures			67,500			100,000
Notes payable			73,556			75,556
Liability for stock to be issued			634,000			20,447
	Total current liabilities		1,424,722			657,089


TOTAL LIABILITIES			1,424,722			657,089

STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value, 1,000,000,000 shares authorized,
387,989,570 and 313,470,570 shares issued and outstanding			387,989			313,470
Additional paid in capital			19,194,409			18,549,836
Subscription receivable			-			(13,000	)
Accumulated deficit			(18,069,514	)		(17,000,035	)
Accumulated other comprehensive income (loss)			(393,831	)		(393,814	)
	Total stockholders' equity		1,119,053			1,456,457

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	2,543,775		$	2,113,546

VIROPRO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2011 AND 2010
(IN US $)


		SIX MONTHS ENDED						THREE MONTHS ENDED
		JUNE 30, 2011			JUNE 30, 2010			JUNE 30, 2011			JUNE 30, 2010

REVENUE		$	454,172		$	221,429		$	221,935		$	221,429


OPERATING EXPENSES
Wages, consulting and professional fees			1,210,285			116,895			818,692			68,895
Selling, general and administrative			310,366			802,551			144,984			759,273
	Total operating expenses		1,520,651			919,446			963,676			828,168

NON-OPERATING INCOME (EXPENSE)
Interest expense			(3,000	)		(12,883	)		(1,500	)		(11,899	)
	Total non-operating expenses		(3,000	)		(12,883	)		(1,500	)		(11,899	)

NET LOSS		$	(1,069,479	)	$	(710,900	)	$	(743,241	)	$	(618,638	)


WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING			351,799,531			201,423,683			370,302,757			235,428,887

NET LOSS PER SHARE		$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)



ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Net loss		$	(1,069,479	)	$	(710,900	)	$	(743,241	)	$	(618,638	)
Currency translation adjustments			(17	)		422,646			743			421,958

		$	(1,069,496	)	$	(288,254	)	$	(742,498	)	$	(196,680	)

VIROPRO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2011 AND 2010
(IN US $)



	SIX MONTHS ENDED
	JUNE 30, 2011			JUNE 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(1,069,479	)	$	(710,900	)

Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization expense		10,649			9,223
Consulting fees - non cash stock compensation		421,345			70,500

Change in assets and liabilities
Decrease in accounts receivable		51,012			(81,595	)
(Increase) decrease in prepaid expenses		(321,339	)		(37,757	)
Increase (decrease) in accounts payable and accrued expenses		188,563			(18,442	)
Total adjustments		350,230			(58,071	)
Net cash provided by (used in) operating activities		(719,249	)		(768,971	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(23,581	)		-
Deposit on equipment		(15,012	)		-
Net cash provided by (used in) investing activities		(38,593	)		-

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of stock for cash and liability for shares to be issued		892,000			-
Proceeds from convertible promissory note		-			35,000
Advance from Intas		-			170,000
Proceeds from notes payable - related parties, net of repayments		(2,000	)		25
Net cash provided by (used in) financing activities		890,000			205,025

Effect of exchange rate on cash flows		-			558,844


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		132,158			(5,102	)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		58,932			19,363

CASH AND CASH EQUIVALENTS - END OF PERIOD	$	191,090		$	14,261

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Organization and Basis of Presentation

The unaudited financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual statements and notes. Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the December 31, 2010 Form 10-K filed with the SEC, including the audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.

VIROPRO, INC. (formerly known as Food Concepts, Inc.) (“Viropro” or the “Company”) was organized under the laws of the State of Nevada on June 16, 1982. On October 27, 1995, the Company reorganized and acquired Savon Coffee, Inc. as a wholly owned subsidiary. On January 1, 1996, the Company acquired Palm Beach Gourmet Coffee, Inc. as a wholly owned subsidiary. On June 30, 1998, the Company divested itself of its coffee operations and simultaneously acquired Insecta Sales and Research, Inc. as a wholly owned subsidiary. Viropro and its subsidiaries are collectively referred to in the consolidated financial statements as the “Company”. The principal business of the Company, which had been the wholesale distribution of various insecticides, ceased during the year ended June 30, 2003. Subsequent to June 30, 2003, the Company changed its year-end to November 30 and became a development stage company in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915 “Accounting and Reporting for Development Stage Enterprises”. The Company is currently developing a generic version of a biopharmaceutical drug. On April 1, 2010, with the acquisition of Biologics Process Development Inc. outside of San Diego, California (“BPD”), the Company emerged from the development stage and is now a biotech consulting and lab services enterprise.

Effective July 1, 2009, the Company adopted ASC 105-10, Generally Accepted Accounting Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification superseded all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification is non-authoritative. The FASB will not issue new standards in the form of Statements, FASB Positions or Emerging Issue Task Force Abstracts. Instead, it will issue Accounting Standards Updates (“ASUs”). The FASB will not consider ASUs as authoritative in their own right. ASUs will serve only to update the Codification, provide background information about the guidance and provide the bases for conclusions on the change(s) in the Codification. References made to FASB guidance throughout this document have been updated for the Codification.

Note 2: Going Concern

The Company conducts operations through its subsidiaries, Viropro International Inc. (“VPRI”) and Biologics Process Development Inc. of San Diego, California (”BPD”). The Company’s new mission is to “Make Quality Biotech Drugs for Clients - Economically and Efficiently.” Its principal objective is to provide high-end, cost-effective Contractual Research and Manufacturing Services to biotech and biopharmaceutical companies in global markets. Towards this end, Viropro will transfer its own and/or in-licensed technologies for the industrial-scale production of biotherapeutic proteins such as novel biological entities (NBEs), or biosimilars, or bio-betters – all of which are life-saving treatments for various diseases including cancer, diabetes, hepatitis or multiple sclerosis. Biotech and biopharma are cutting-edge industries calling for highly specialized installations, equipment, and highly-skilled and highly-educated personnel. Viropro owns and has access to such specialized resources.

Viropro draws most of its revenues from services rendered to the biotech and biopharma industries on a cost plus percentage basis. This percentage varies according to the type of services rendered.

Viropro enjoys close working relations with some of the leading biotech research institutes in North America, one of which is the Biotech Research Institute (“BRI”) in Montreal, Canada, a constituent of the National Research Council of Canada. Viropro has licensed from BRI a high-efficiency expression system platform for antibody production.

With the April 14, 2010 completion of our acquisition of BPD, Intas Biopharmaceuticals Ltd. (“Intas”) of India became our controlling shareholder. Intas is one of India’s leading biotechnology companies, with a “Products” business and a “Contract Services” business. It is the only biotech company in India that has a cGMP (current Good Manufacturing Practice) biologics facility approved by the European Medicines Agency and has brought four biopharmaceuticals to the market in as many years.

Our subsidiary BPD had total revenues of $454,172 for the six months ended June 30, 2011, in line with expectations. BPD conducted its business development not only for its core business near San Diego but also toward development of the entire Viropro structure encompassing Molecular Biology, Purification and Development and Clinical production.

Viropro’s strategic plan, the implementation of which started in late 2009, is to develop into a premier Biotechnology Contract Research and Manufacturing Services company within 5 years. The intention is to have our operating subsidiaries provide key services using modern biotechnology principles in the area of biologics process development and cGMP-based biologics contract manufacturing.

Since April 2008, cloning and sequencing operations have been subcontracted to Innium Technology with Viropro holding the exclusive rights on the research. Innium Technology, an independent and private company, bears the infrastructure and personnel costs leaving Viropro with minimal fixed costs and liabilities.

Currently, Viropro’s focus is primarily on generating contractual work and secondarily on research work. Contractual work, which typically involves cloning, sequencing, purifying, developing, validating and producing biopharmaceutical products and sub-products, typically generates steadier streams of revenues and cash flow than research work. This can reduce financial risk for companies who are also engaging in research and development by, amongst other things, providing the funding necessary to conduct R&D.

The Company’s consolidated financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company has experienced significant losses from operations. The accumulated deficit of the Company as of June 30, 2011 is $18,069,514. As of April 1, 2010, the Company acquired Biologics Process Development, Inc., as a wholly-owned subsidiary. Income generated from this subsidiary is consolidated into the Company and as a result, the Company emerged from the development stage.

Management’s plans to address these conditions include continued aggressive efforts to expand the Company’s current business. The Company has instituted a comprehensive communications and marketing plan, plans on expanding its networking through appointment of high level advisory boards and plans on hiring external business development personnel. Management believes that these combined efforts will significantly improve the success rate of sales. The Company continues to seek additional capital periodically through equity and debt financings. Additionally, the executive management team has put into place an aggressive cost and expense savings spending plan to identify and eliminate costs which are directly impacting profitability.

The Company’s ability to continue as a going concern is contingent upon its ability to secure additional financing, increase ownership equity and attain profitable operations. In addition, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by smaller companies attempting to enter established markets and the competitive environment in which the Company operates. These factors raise substantial doubt regarding the ability of the Company to continue as a going concern.

These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

Note 3: Goodwill

On April 14, effective April 1, 2010, Viropro acquired 100% ownership of the stock of Biologics Process Development, Inc. (“BPD”). The purpose of the acquisition was to have the capacity to provide contractual research and manufacturing services to biotech and biopharmaceutical companies. Biotech and biopharmaceutical companies are in need of specialized installations, equipment, and skilled personnel. BPD is positioned to provide these to Viropro.

The consideration for acquiring BPD’s stock totaled $2,932,500 paid in shares of Viropro’s stock. Certificates representing 97,750,000 shares of Viropro stock were issued to Intas Biopharmaceuticals LTD. Viropro acquired the assets and assumed the liabilities as noted below in consideration of the shares of common stock at a value of $2,832,750. Based on the fair values at the effective date of acquisition the purchase price was allocated as follows:

Cash	$	68,458
Accounts Receivable		67,096
Other current assets		39,586
Property and Equipment		82,875
Loans receivable		989,975
Other Assets		5,593
Goodwill		1,877,479
Accounts payable and accrued expenses		(125,057	)
Notes Payable		(73,505	)
	$	2,932,500

The goodwill will not be amortized but it will be tested annually for impairment. Goodwill in connection with this acquisition is stated at $1,877,479 in the books and records of BPD and is tax deductible.

The following table shows pro-forma results for the six months ended June 30, 2011 and 2010 as if the acquisition had occurred on January 1, 2010. These unaudited pro forma results of operations are based on the historical financial statements and related notes of each of the Company and BPD for the six months ended June 30, 2010, and contain adjustments to depreciation and amortization for the effects of the purchase price allocation, and to income tax expense to record income tax expense for the BPD.

	Six Months Ended June 30,
	2011		2010
	Pro forma
	(in thousands)
Revenues	$	454,172	$	212,470
Net Income (Loss)	$	(32,210)	$	979

The revenue and net income of BPD included in the consolidated statement of operations for the six months ended June 30, 2011 were approximately $454,172 and ($32,210) respectively.

The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time, nor is it intended to be a projection of future results.

The Company adopted ASC 805, Business Combinations (“ASC 805”). ASC 805 retains the fundamental requirements that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. ASC 805 defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. ASC 805 requires an entity to record separately from the business combination the direct costs, where previously these costs were included in the total allocated cost of the acquisition. ASC 805 requires an entity to recognize the assets acquired, liabilities assumed, and any non-controlling interest in the acquired at the acquisition date, at their fair values as of that date.

ASC 805 requires an entity to recognize as an asset or liability at fair value for certain contingencies, either contractual or non-contractual, if certain criteria are met. Finally, ASC 805 requires an entity to recognize contingent consideration at the date of acquisition, based on the fair value at that date. This will be effective for business combinations completed on or after the first annual reporting period beginning on or after December 15, 2008. Early adoption is not permitted and the ASC is to be applied prospectively only.

Note 4: Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates, including, but not limited to, those related to investment tax credits, bad debts, income taxes and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with an initial maturity of three months or less to be cash equivalents.

Comprehensive Income

The Company adopted ASC 220-10, Reporting Comprehensive Income , (formerly SFAS No. 130). ASC 220-10 requires the reporting of comprehensive income in addition to net income from operations.

Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of information that historically has not been recognized in the calculation of net income.

Fair Value of Financial Instruments

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. For the loans payable, the carrying amount reported is based upon the incremental borrowing rates otherwise available to the Company for similar borrowings.

Currency Translation

For subsidiaries outside the United States that prepare financial statements in currencies other than the U.S. dollar, the Company translates income and expense amounts at average exchange rates for the year, translates assets and liabilities at year-end exchange rates and equity at historical rates. The Company’s functional currency is the Canadian dollar, while the Company reports its currency in the US dollar. The Company records these translation adjustments as accumulated other comprehensive income (loss). Gains and losses from foreign currency transactions are included in other income (expense) in the results of operations.

Revenue Recognition

The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The Company generates revenues from consulting services as well as lab services they perform. They generally bill for these services at the end of each month or in accordance with the individual arrangements with their customers. All revenue recognized is for services that have been rendered, and the Company does not pre-bill for any services.

In addition, the Company enters into development agreements for the development of monoclonal antibody-based therapeutics. The terms of these agreements contain multiple deliverables. Payments to the Company under these agreements may include payments for the manufacture of preclinical or clinical materials, payments based upon the achievement of certain milestones and royalties on product sales. The Company follows the provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 605-25, Revenue Recognition—Multiple-Element Arrangements , and ASU No. 2010-17, Revenue Recognition—Milestone Method , in accounting for these agreements. In order to account for these agreements, the Company must identify the deliverables included within the agreement and evaluate which deliverables represent separate units of accounting based on if certain criteria are met, including whether the delivered element has standalone value to the collaborator. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units.

Accounts Receivable

The Company conducts business and extends credit based on an evaluation of the customers’ financial condition, generally without requiring collateral.

Exposure to losses on receivables is expected to vary by customer due to the financial condition of each customer. The Company monitors exposure to credit losses and maintains allowances for anticipated losses considered necessary under the circumstances. The Company has no allowance for doubtful accounts as of June 30, 2011.

Accounts receivable are generally due within 30 days and collateral is not required. Unbilled accounts receivable represents amounts due from customers for which billing statements have not been generated and sent to the customers.

Income Taxes

The Company accounts for income taxes utilizing the liability method of accounting. Under the liability method, deferred taxes are determined based on differences between financial statement and tax bases of assets and liabilities at enacted tax rates in effect in years in which differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are expected to be realized.

Fixed Assets

Fixed assets are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets; office and computer equipment – 5 years.

When assets are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments are capitalized. Deduction is made for retirements resulting from renewals or betterments.

Depreciation expense for the six months ended June 30, 2011 and 2010 was $10,649 and $9,223 respectively.

Long-lived assets and fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. The Company does perform a periodic assessment of assets for impairment in the absence of such information or indicators. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and estimated fair value.

Loss Per Share of Common Stock

Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents were not included in the computation of diluted earnings per share when the Company reported a loss because to do so would be antidilutive for periods presented.

The following is a reconciliation of the computation for basic and diluted EPS:

	June 30,		June 30,
	2011		2010

Net (loss)	$	(1,069,479)	$	(710,900)

Weighted-average common shares Outstanding (Basic)		351,799,531		201,423,683

Weighted-average common stock Equivalents
Stock options		-		-
Warrants		1,550,000		-

Weighted-average common shares Outstanding (Diluted)		353,349,531		201,423,683

Stock-Based Compensation

In 2006, the Company adopted the provisions of ASC 718-10 “Share Based Payments” for its year ended December 31, 2008. The adoption of this principle had no effect on the Company’s results of operations.

The Company has elected to use the modified–prospective approach method. Under that transition method, the calculated expense in 2006 is equivalent to compensation expense for all awards granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair values. Stock-based compensation expense for all awards granted after January 1, 2006 is based on the grant-date fair values. The Company recognizes these compensation costs, net of an estimated forfeiture rate, on a pro rata basis over the requisite service period of each vesting tranche of each award. The Company considers voluntary termination behavior as well as trends of actual option forfeitures when estimating the forfeiture rate.

The Company measures compensation expense for its non-employee stock-based compensation under ASC 505-50, Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services . The fair value of the option issued is used to measure the transaction, as this is more reliable than the fair value of the services received.

The fair value is measured at the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital.

Segment Information

The Company follows the provisions of ASC 280-10, Disclosures about Segments of an Enterprise and Related Information . This standard requires that companies disclose operating segments based on the manner in which management disaggregates the Company in making internal operating decisions.

Uncertainty in Income Taxes

The Company follows ASC 740-10, Accounting for Uncertainty in Income Taxes (“ASC 740-10”). This interpretation requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. ASC 740-10 is effective for fiscal years beginning after December 15, 2006. Management has adopted ASC 740-10 for 2009, and they evaluate their tax positions on an annual basis, and has determined that as of June 30, 2011, no additional accrual for income taxes other than the federal and state provisions and related interest and estimated penalty accruals is not considered necessary.

Fair Value Measurements

In September 2006, FASB issued ASC 820, Fair Value Measurements (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosure about fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. Early adoption is encouraged. The adoption of ASC 820 is not expected to have a material impact on the financial statements.

In February 2007, FASB issued 825-10, The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of ASC 320-10 , (“ASC 825-10”) which permits entities to choose to measure many financial instruments and certain other items at fair value at specified election dates. A business entity is required to report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. This statement is expected to expand the use of fair value measurement. ASC 825-10 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.

Recent Accounting Pronouncements

In May 2011, FASB issued Accounting Standards Update (ASU) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs . FASB ASU 2011-04 amends and clarifies the measurement and disclosure requirements of FASB ASC 820 resulting in common requirements for measuring fair value and for disclosing information about fair value measurements, clarification of how to apply existing fair value measurement and disclosure requirements, and changes to certain principles and requirements for measuring fair value and disclosing information about fair value measurements. The new requirements are effective for fiscal years beginning after December 15, 2011. The Company plans to adopt this amended guidance on October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s results of operations, cash flows or financial position.

In June 2011, FASB issued ASU No. 2011-05, Presentation of Comprehensive Income , which amends the disclosure and presentation requirements of Comprehensive Income. Specifically, FASB ASU No. 2011-05 requires that all nonowner changes in stockholders’ equity be presented either in 1) a single continuous statement of comprehensive income or 2) two separate but consecutive statements, in which the first statement presents total net income and its components, and the second statement presents total other comprehensive income and its components. These new presentation requirements, as currently set forth, are effective for the Company beginning October 1, 2012, with early adoption permitted.

The Company plans to adopt this amended guidance on October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s results of operations, cash flows or financial position.

In September 2011, FASB issued ASU 2011-08, Testing Goodwill for Impairment , which amended goodwill impairment guidance to provide an option for entities to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. After assessing the totality of events and circumstances, if an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, performance of the two-step impairment test is no longer required. This guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. Adoption of this guidance is not expected to have any impact on the Company’s results of operations, cash flows or financial position.

There were other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Note 5: Property and Equipment

Equipment as of June 30, 2011 (unaudited) and December 31, 2010 were as follows:

Estimated Useful Lives
	Years		June 30, 2011		December 31, 2010
Computer Equipment		3-5	$	332,633	$	316,052
Less : Accumulated Depreciation				262,063		258,414
Equipment, net			$	70,570	$	57,638

There was $10,649 and $0 charged to operations for depreciation expense for the six months ended June 30, 2011 and 2010, respectively.

Note 6: Income Taxes

As of June 30, 2011, the Company has a net operating loss carry forward of approximately $9,780,000. This loss will be available to offset future taxable income. If not used, this carry forward will expire through 2031. Components of net deferred tax assets, including a valuation allowance, are as follows:

	2011
Deferred tax assets:
Net operating loss carryforward	$	3,325,200
Total deferred tax assets		3,325,200
Less: Valuation Allowance		(3,325,200	)

Net Deferred Tax Assets	$	-

The valuation allowance for deferred tax assets as of June 30, 2011 was approximately $3,325,200. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of June 30, 2011 and, accordingly, recorded the full valuation allowance.

Reconciliation between the statutory rate and the effective tax rate is as follows at June 30, 2011:

	2011			2010

Federal statutory tax rate		(34.0	)%		(34.0	)%
Change in valuation allowance		34.0	%		34.0	%

Effective tax rate		0.0	%		0.0	%

Note 7: Convertible Debentures

On March 1, 2006, the Company commenced an offering of convertible debentures. The offering consisted of a minimum of 700 and a maximum of 1,300 debentures at a price of $1,000 per debenture. The debentures were convertible into common shares at $0.20 per share through March 1, 2009, and bear interest at 6% per annum. In conjunction with the sale of each $1,000 debenture, the Company would issue 5,000 warrants to purchase common shares at $0.25 per share expiring on March 1, 2009. Through November 30, 2006, an aggregate of $713,429 had been received in cash.

As of May 31, 2007, the entire subscription of $1,300,000 had been collected. The Company had determined the debentures to have a beneficial conversion feature totaling $420,527. The beneficial conversion feature had been recorded as a debt discount which was being amortized over the life of the loans. The beneficial conversion feature was valued under the Black-Scholes options pricing model using the following assumptions: a stock price between $0.19 and $1.19; estimated life of 3 years; historical volatility rate ranging between 205% and 251% and debt discount rate of 6.00%. The investors had 3 years from March 1, 2006 to exercise up to 6,500,000 warrants. The warrant strike price was $0.25 per share of restricted stock. The Company had determined the warrants to have a value of $838,587 which had been reflected as a financing cost and was amortized over the life of the loans. The warrants were valued under the Black-Scholes options pricing model.

On October 2007, the Company announced an expected $1.5 Million financing. On December 21, 2007, the Company informed its Stockholders that the first tranche of $300,000 related to the $1.5 Million financing was not closed due to unfavorable market conditions. As of November 30, 2007, the Company raised only $70,000 from this first tranche of $300,000, and this $70,000 was outstanding as of December 31, 2010. In March 2011, an individual investor purchased a portion of these debentures for $32,500 and this amount was converted into 6,500,000 shares. $37,500 remains outstanding at June 30, 2011.

In early 2008, Viropro issued up to $1,300,000 of convertible debentures to 9188- 5400 Québec Inc. a private holding company.

From March 1, 2007 to March 1, 2009 investors converted $630,490 in private debenture financing which included accumulated interest of $74,490 into 3,032,112 common shares. In addition, debentures totaling $56,000 were settled with cash.

At the maturity date of the debentures, the Company offered to the owners to exchange the debentures for common shares instead of cash. The Company has thus issued 13,661,600 common shares to convert $603,000 of debentures, cumulated interest of $43,424 and a premium valued at $36,656. In addition, debentures totaling $25,000 were settled with $5,000 in cash. At June 30, 2011 outstanding debentures of $30,000 relating to four debenture holders were still unpaid and are in default. The Company is involved in litigation regarding this outstanding total (See Note 12).

The total of the convertible debentures from all financings is $67,500 at June 30, 2011.

Note 8: Convertible Promissory Note

On June 14, 2010, the Company issued a $35,000, 8% Convertible Promissory Note to Asher Enterprises, Inc., which was to mature on March 16, 2011. The Convertible Promissory Note was convertible into shares of common stock at 58% of the 10 day average trading price of the common stock on the date of conversion. The note was converted into 3,448,276 shares of common stock on July 27, 2010. There was no change in the value of the common stock from date of issuance of the Convertible Promissory Note through July 27, 2010. There was no discount associated with this note.

Note 9: Notes Payable – Related Parties

The Company consolidated a $60,000 note payable to Scott Brown who is our founder of BPD and is currently the Chief Science Officer of the Company. The note is non-interest bearing and due on demand. The amount is included in current liabilities on the consolidated balance sheet at June 30, 2011.

The Company has also been advanced $13,556 (net of repayments of $2,000 in the six months ended June 30, 2011) from other officers of the Company, through June 30, 2011. The advance is also non-interest bearing and due on demand. This advance is included in current liabilities on the consolidated balance sheet at June 30, 2011.

Note 10: Stockholders’ Deficit

The issuances of common stock for the six months ended June 30, 2011 and year ended December 31, 2010 are as follows:

In March 2010, 3,200,000 shares were issued to Cansim Minas SA de CV for services, valued at $48,000 or $0.015 per share.

On April 20, 2010, 79,166,666 shares issued to BPD to acquire VIROPRO, INC. were cancelled and reissued with an additional 27,750,000 to Intas Biopharmaceuticals Ltd and a 70,000,000 issuance to IBP LLC as payment for the acquisition of BPD, for a total of 97,750,000 shares valued at $2,932,500. The Company recorded $1,877,479 in goodwill in this transaction.

On May 27, 2010, 2,000,000 shares were issued to Claude Gingras and 2,500,000 to Serge Beausoleil under a Form S-8 Registration Statement, for a value of $22,500.

On July 8, 2010, 10,500,000 restricted shares were issued to management at a price of $0.005 per share for services rendered; 2,500,000 to Serge Beausoleil, 2,500,000 to Dr. Rajiv Datar, 2,000,000 to Claude Gingras, 2,000,000 to Dr Scott M. Brown, and 1,500,000 to Jeff Hale for an aggregate value of $52,500.

On July 27, 2010, the Company converted the $35,000 convertible note held by Asher Enterprises Inc. into 3,448,276 shares of common stock.

On November 20, 2010, 20,000,000 shares were issued under a private placement agreement of $20,000.

On December 22, 2010, 9,000,000 shares were issued under a private placement agreement of $18,000.

On January 14, 2011 a total of 13,669,000 were issued to Serge Beausoleil and Claude Gingras as payment for their regular consulting fees payable at a value of $68,345.

On January 27, 2011, 4,000,000 shares were issued in a private placement for $20,000.

On January 27, 2011, 1,550,000 shares were issued in a private placement for $20,447, which proceeds were received in 2010 and this was reflected as a liability for stock to be issued at December 31, 2010.

On February 18, 2011 a payment in shares of 4,500,000 shares was processed to a non related third party for services rendered valued at $18,000.

On March 15, 2011, 200,000 shares were cancelled as per Court Order received by the transfer agent.

On March 17, 2011, 5,000,000 shares were issued pursuant to a Private Placement for $125,000 and 6,500,000 from the conversion of a debenture in the amount of $32,500.

On February 22, 2011, Company announced it had acquired Alpha Biologics Sdn Bhd of Penang Malaysia for payment in share representing 21 million dollars. This transaction allowed acquisition of a Clinical Production Facility in Malaysia and a Process Development Lab in Cambridge UK. Transaction was closed in July 2011.

On April 26, 2011, 7,500,000 were issued pursuant to a private placement.

On May 2, 2011, 17,000,000 shares were issued to Rajiv Datar and 4,000,000 Claude Gingras to offset due fees and expense accounts.

On June 2, 2011, 5,000,000 shares were issued to a consultant.

June 16, 2011, 6,000,000 shares were issued to Innium Technologies as payment in shares for services rendered.

Warrants

The Company issued 1,550,000 warrants to individuals investors in connection with a $31,000 private placement of 1,550,000 common shares at $0.02 in July 2010. The common shares were issued in January 2011, however the warrants were issued in July 2010. The warrants have an exercise price of $0.025 per share and term of 2 years. The Company valued the warrants at $14,043, and have reflected this in additional paid in capital.

The following is a breakdown of the warrants:

		Exercise		Date
Warrants		Price		Issued	Term
	1,550,000	$	0.025	07/01/2010	2 years
	1,550,000

Note 11: Commitments and Contingencies

During the periods covered by these financial statements, the Company issued shares of common stock and subordinated debentures without registration under the Securities Act. Although the Company believes that the sales did not involve a public offering of its securities and the Company did comply with the “safe harbor” or other exemptions from registration under rules and regulations of the Securities Act, if such exemptions were found not to apply, this could have a material impact on the Company’s financial position and results of operations. In addition, the Company issued shares of common stock pursuant to Form S-8 registration statements and pursuant to Regulation S. The Company believes that it complied with the requirements of Form S-8 and Regulation S in regard to these issuances; however, if it were determined that the Company did not comply with these provisions, this could have a material impact on the Company’s financial position and results of operations. The Company cannot otherwise estimate the potential loss or range of loss it might experience if it were determined that the Company had violated the Securities Act by failing to comply with Securities Act safe harbors, Regulation S, other Securities Act exemptions or the requirements for use of Form S-8.

In April 2008, the Company awarded Innium Technologies of Montreal all its research and development on the Anti-CD20 project. Viropro will fund the R&D costs but will retain the entire intellectual property and all rights relating to the project; in so doing, Viropro has further reduced its fixed costs but all advances made prior to this agreement have been expensed so as to reflect the arm’s length relation with Innium.

On December 23, 2010, the Company announced it had retained the services of Gilford Securities Inc. of New York City to act as strategic advisors.

On January 5, 2011, the Company announced it had entered into an agreement with Spectrum Pharmaceuticals Inc. for the development of a biosimilar of Rituximab.

On February 22, 2011, the Company announced it had entered into an agreement to acquire Alpha Biologics Sdn Bhd in a share exchange transaction that was completed on July 12, 2011. Alpha Biologics Sdn Bhd operates a clinical production facility in Penang, Malaysia and its 100% owned subsidiary in Cambridge UK operates a protein purification and development facility. For additional information, please see “Management’s Discussion and Analysis – Subsequent events” in Item 2 of Part 1 of this quarterly report.

Note 12: Legal Proceedings

On July 13, 2009 HKDP, a supplier to Viropro initiated procedures claiming $37,991.95 for an unpaid bill. Management entered into discussions with the claiming party in January 2011 and believes a settlement could be reached by the end of 2011.

On June 21, 2009 a $5,000 Securecap convertible debenture holder initiated procedures against the Company to recover capital due at maturity. Management of the Company had offered to the holder, as it had done will all Securecap Convertible Debenture holders, to convert its debenture into common shares at a lower price than the initially set price. The claim was filed in the Small Claims Court of Montreal, district of Longueuil, Province of Quebec, Canada under file no 505-32-025648-099. On February 10, 2011, the Company settled litigation with Securcap Debenture holders; the Company agreed to convert all outstanding debentures into common shares in exchange for the holders dismissing all claims.

Note 13: Subsequent Events

·	July 5, 2011, 100,000 shares were issued to Bernard Twyford Raymond for services rendered

·	July 11, 2011:

o	340,097,124 shares were issued to Springhill Bioventures Sdn Bhd

o	183,844,211 issued to THG Capital Sdn Bhd

o	1,058,665 issued to Michelle Leanne Peake

Under the share purchase agreement for Alpha Biologics Sdn Bhd

·	On July 22, 2011, Cynthia Tsai and Andrew Boico were issued both 1,000,000 shares for services rendered.

·	October 2011, 1,000,000 shares were issued to Cooper Global Communication under the Investors Relations Agreement.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

THE FOLLOWING DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF VIROPRO, INC. SHOULD BE READ IN CONJUNCTION WITH THE UNAUDITED CONDENSED FINANCIAL STATEMENTS AND NOTES INCLUDED ELSEWHERE IN THIS REPORT.

THIS DISCUSSION AND ANALYSIS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES . YOU CAN IDENTIFY OUR FORWARD-LOOKING STATEMENTS BY WORDS SUCH AS “ANTICIPATE,” “BELIEVE,” “ESTIMATE,” “EXPECT,” “FORECAST,” “GOAL,” “INTEND,” “PLAN,” “PREDICT,” “PROJECT,” “SEEK,” “TARGET,” “COULD,” “MAY,” “SHOULD” OR “WOULD” OR OTHER SIMILAR EXPRESSIONS THAT CONVEY THE UNCERTAINTY OF FUTURE EVENTS OR OUTCOMES. IN ACCORDANCE WITH “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, THESE STATEMENTS ARE ACCOMPANIED BY CAUTIONARY LANGUAGE IDENTIFYING IMPORTANT FACTORS, THOUGH NOT NECESSARILY ALL SUCH FACTORS, WHICH COULD CAUSE FUTURE OUTCOMES TO DIFFER MATERIALLY FROM THOSE SET FORTH IN FORWARD-LOOKING STATEMENTS.

Overview

VIROPRO, INC. (“Viropro” or the “Company”) conducts operations through its subsidiaries, Viropro International Inc. (“VPRI”) and Biologics Process Development Inc. of San Diego, California (”BPD”), and specializes in the transfer of its technologies for industrial production of biogeneric therapeutic proteins for the treatment of various diseases including cancer, diabetes, hepatitis or multiple sclerosis. The Company’s principal objective is to provide Contractual Research and Manufacturing Services to biotech and biopharmaceutical companies in global markets. Biotech and biopharma are cutting edge industries calling for highly specialized installations, equipments, and highly skilled and highly educated personnel. Viropro owns and has access to such specialized resources.

Viropro draws most of its revenues from services biotech and biopharma industries on a cost plus percentage basis. This percentage varies according to the type of services rendered.

Viropro’s strategic plan, which implementation started in 2009 is to develop into a premier Biotechnology Contract Research and Manufacturing Services company within 5 years. The intention is to have our operating subsidiaries provide key services using modern biotechnology principles in the area of biologics process development and cGMP-based biologics contract manufacturing.

Since April 2008, cloning and sequencing operations have been subcontracted to Innium Technology with Viropro holding the exclusive rights on the research. Innium Technology, an independent and private company bears the infrastructure and personnel costs leaving Viropro with minimal fixed costs and liabilities.

Currently, Viropro’s focus is primarily on generating contractual work and secondarily on research work. Contractual work, which typically involves cloning, sequencing, purifying, developing, validating and producing biopharmaceutical products and sub-products, typically generates steadier streams of revenues and cash flow than research work. This can reduce financial risk for companies who are also engaging in research and development by, among other things, providing the funding necessary to conduct R&D. Viropro typically generates the larger portion of its revenues from contractual work. For the quarter ended June 30, 2011, these revenues represented 100% of Viropro’s revenues.

The biotech industry

Viropro believes that the fundamentals of the biotech industry, from a US perspective, continue to be strong (in spite of recent global economic challenges) for the following reasons:

·	The biotech industry has had more than twenty-five years of building the necessary infrastructure for sustained growth.

The pricing power of smaller biotech firms in deals with pharmaceutical manufacturers has steadily improved. In the 1990s biotech companies were unable to negotiate high royalty percentages and settled for a low double-digit royalty from a pharmaceutical company to obtain sufficient funding for a drug’s development. Currently, it is common for biotech companies and their pharmaceutical partners to enter into 50:50 profit sharing arrangements, representing at least a 3-fold increase in the industry’s pricing power.

·	The biotech/biopharma industry is typically noncyclical, which tends to shelter the industry from economic downturns.

·	Biotech has produced real results, with an increasing number of products coming to market. Based upon the number of biotech drugs currently in the US FDAs approval pipeline, it can be said that the biotech industry has reached critical mass.

Viropro's analysis of the US biotech market is summarized below from the perspective of opportunities for Indo-US Biotech companies. The availability of highly skilled, but low-cost scientific manpower in India – a situation not too different from the niche carved out by Indian software companies-provides the following avenues:

·	The increasing trend towards Contract R&D by biopharmaceutical companies due to the ever-expanding cost of bringing biopharmaceuticals to the market.
·	A noticeable trend towards contract manufacturing (in US FDA-approved GMP facilities).
·	The production of off-patent biopharmaceuticals (a.k.a. Biosimilars / Biogenerics / Follow-on biologics-FOBs ).

The worldwide biopharmaceutical market was estimated at over $50 billion in 2004 (Biopharma). Biopharmaceuticals are a growing field. The rate of new products being approved has increased steadily, more than doubling from the 1990s through 2005 (Bioplan 2006 and Nature 2004). A series of key products developed in the 1980s and 1990s and selling of over $30 billion are predicted to remain the dominant revenue generators over the coming years (Nature Biotech., 2004). All of Viropro’s targeted biogenerics are among these key products.

Technology and strategic alliances

Viropro now holds a versatile technology platform with an exclusive license portfolio. This is a result of strong partnerships with the BRI through an agreement that includes the use of a proprietary promoter that significantly enhances the yield of recombinant proteins.

Viropro's platform technology allows it to develop manufacturing processes for common biotech products that are already off patent or for which patent expiry is imminent. The platform also allows the Company to undertake contractual development for biotechnology and biopharmaceutical manufacturing companies, and develop or co-develop new products with partnering companies.

We believe our strength is in our technological platform, i.e. the intellectual property and know-how and rights that allows us to quickly develop high quality biopharmaceutical manufacturing processes at low cost. We believe our technological platform will allow us to develop more efficient manufacturing processes than those of our competitors who most often use technologies dating to the 1980s and 90s. Additionally, Viropro’s leadership team has a strong international network of contacts, which enables Viropro to acquire and out-license technologies and furthers the development goals of the Company.

In order to strengthen and expand Viropro's manufacturing and development capabilities, a partnership agreement was signed in 2007 with the BRI for scale-up of process development. This agreement allows the Company to benefit from BRI's proven expertise in recombinant protein process development and scale-up. With this agreement, the Company has an advantageous R&D leverage that minimizes its R&D expenditure and allows for a greater focus on development of novel products such as monoclonal antibodies. Viropro’s collaboration with the BRI is a productive one, and the Company enjoys the advantages of the BRI’s infrastructure and expertise, its highly specialized equipment for applied biotech, and a local network of skilled scientists and technicians to complement Viropro’s own. On October 26, 2006, Viropro signed a second agreement with the BRI for the use of powerful inducible expression systems developed and patented by the BRI. Viropro is also planning to sign new licenses with the BRI in the near future for the production of other therapeutic human proteins including cytokines and monoclonal antibodies.

In consideration of such licenses, the BRI has agreed to the following schedule of fees:

·	License Fee :

o	$50,000 for the C-Switch technology

o	$60,000 for the Reverse C-Switch

o	$25,000 for the pMPG Vector and CMV5 Promoter

·	License Royalties:

o	0.4% for the C-Switch technology

o	0.6% for the Reverse C-Switch

o	0.2% for the pMPG Vector and CMV5 Promoter

A memorandum of understanding, or MOU, was signed on April 26, 2007 with Intas for the production of an undisclosed high value therapeutic product. Intas was to pay Viropro a licensing fee for the development and technological transfer of the manufacturing process and Viropro would receive royalties based on net sales. On September 21, 2007, the Final Collaborative Research, Development and License Agreement relating to the Intas MOU was signed. Development of the product is now being conducted by Intas and no time for production and marketing as yet been set.

In December 2008, BPD purchased a majority stake in Viropro in a $1.0 million private placement. In the course of the 2009 fiscal year, Intas, BPD and the Company sought to make VIROPRO, INC. a holding company with VPRI and BPD as operating subsidiaries. Thus the prior transaction giving control to BPD was rescinded and all shares previously issued to BPD were issued to Intas, making Intas the direct controlling shareholder of VIROPRO, Inc. and making BPD a wholly-owned subsidiary of VIROPRO, INC.

Additional industry data

The size of the pharmaceutical industry was estimated at approximately $820 billion in 2009 according to the US National Association of Pharmaceutical Representatives NAPRx . Of this, biopharmaceutical products made up about $100 billion as of the end of 2009 (Source Hospira). The biopharmaceutical segment is one of the fastest growing segments and is commonly said to be the future of the pharmaceutical industry.

Leading Biological Products 2009

Brand	Generic	Company	2009 Sales		2008 Sales
Enbrel	Etanercept	Amgen / Wyeth	$	6,580	$	6,490
Remicade	Infliximab	Centocor / Schering Plough	$	5,934	$	5,335
Avastin	Bevacizumab	Genenetech / Roche	$	5,777	$	4,484
Rituxan / MabThera	Rituximab	Genenetech / Roche /Biogen-IDEC	$	5,653	$	5,099
Humira Pen	Adalimumab	Abbott / Eisai	$	5,488	$	4,521
Epogen / Procrit / ESPO	Epoetin Alpha	Amgen / Ortho / Janssen-Cilag / Kyowa Hakko	$	5,033	$	5,123
Herceptin	Trastuzumab	Genentech / Roche / Chugai	$	4,890	$	4,384
Lantus	Insulin glargine	Sanofi-Aventis	$	4,185	$	3,130
Neulasta	Pegfilgrastim	Amgen	$	3,355	$	3,318
Aranesp	Darbopoetin	Amgen / Kyowa Hakko	$	2,871	$	3,334
			$	49,766	$	45,218

Source: La Merie report – Top 20 Biologics 2009

Products, goals and objectives

Therapeutic protein products are the primary reason for the boom in biotech that occurred during the mid-1990s to late 2000s. Monoclonal antibodies (a specific class of therapeutic proteins) posted sales of $14.5 billion in 2005 (The Future of Monoclonal Antibody Therapeutics, Business Insights, 2006), and it is estimated that in 2008 they accounted for 32% of all biotech revenue. With a considerable portion of the therapeutic protein sector having lost patent protection prior to or during 2010, there is a major opportunity in the technology transfer of therapeutic proteins throughout the world.

Viropro’s goals and objectives are as follows:

·	To develop and out-license manufacturing processes for biogenerics already in the public domain as soon as patent protection expires for various biopharmaceuticals;

·	To develop new biopharmaceutical products with various partners (conditional to total development cost coverage);

·	In the short term, to obtain recurring revenue;

·	To obtain 15 contracts for product development from clone to clinic by 2015;

Viropro is focused on the development and transfer of “in licensing” leading technological processes for the manufacturing of high quality biopharmaceuticals. The business strategy being developed since 2005 is to target emerging, unserved markets with high potential development by transferring technologies and know-how to pharmaceutical partners in various local markets worldwide. The main markets that Viropro has focused on are South America and Asia (primarily India).

Administrative overhead

The Company plans to maintain low administrative and overhead costs with the intention toensure the funds are available for the development activities and accordingly create the maximum value for its shareholders. Research and Development work will be subcontracted to BRI, and is expected to subcontract university laboratories for experimental studies or to specialized companies for GMP manufacturing, toxicology and clinical studies. By selecting the optimal research and development work structure between VPRI and BPD seeks to minimize capital expenditures, generate results quickly and assure a high degree of confidence in results. Corporate overhead remains unchanged in the quarter in spite of appointment of new CEO Rajiv Datar and relocation of former CEO to consultant.

Development

All the research and development procedures, from the build-up of biological systems to the industrial production on a large-scale are done in close collaboration with key partners with whom Viropro has established strategic alliances:

As indicated above (see “—Technology and strategic alliances”), an alliance was formed with the Biotechnology Research Institute of the National Research Council Canada (“BRI” located in Montreal, Canada). This alliance gives Viropro access to expertise as well as state-of-the-art equipment and facilities for bio-process innovation and purification process development as well as the scalability of bioprocesses under industrial scale conditions.

An agreement similar to our agreement with Intas was signed by the Company in January 2011 with Spectrum Pharmaceuticals of Irvine, California.

Other negotiations are ongoing with companies specialized in providing clients and partners with industrially adapted biological material as well as offering high level scientific consulting services for the optimization of specific steps in the development of bioprocesses.

Viropro believes that market share for locally implemented companies will grow considerably; knowledge and access to market in specific geographic areas will represent a considerable strategic advantage. Viropro has identified certain products that it believes are capable of generating short to medium-term profits. These products are well proven in developed markets but are not yet manufactured at large scale in the emerging markets, where there is an important and growing demand.

Competition

Viropro’s management team has chosen to actively intervene in the biotechnology emergent sector by entering into geographic markets not serviced by large multinational pharmaceutical companies. The Company searches for partners in countries where it has identified a market potential. This gives the Company the opportunity to assure an active presence in the target countries and to have a thorough knowledge of these markets, namely potential customers, suppliers, investors and government regulatory agencies.

Second quarter events

In April 2011, the Company initiated a private placement offering of restricted common shares at 0,01 for a maximum of 750,000. As the Company was not current at time of offering, shares offered were not eligible to regulation 144 through which they could have been registered and restriction lifted.

Use of proceeds from this funding effort was primarily targeted at the return to full disclosure status which meant payment of dues to Auditors, accountants and legal counsels. In April 2011, new accountants were appointed to handle the production of consolidated financial statements. In June 2011, management appointed Jones Day as legal counsels to the Company and part of their mandate was to ensure production of quality financial reports.

Dr Rajiv Datar was granted 17 million restricted shares for his appointment as President and CEO and for his ability to close the Spectrum agreement and the acquisition of Alpha Biologics.

Claude Gingras was awarded 4 million shares for unpaid salary and for performance.

During the second quarter, the Company also announced it was increasing the size of its San Diego facility for it is nearing full capacity. It is expected that the expansion will be completed in 2012.

Company also announced it will change name to better reflect its involvement in the biopharmaceutical industry. Change will happen with a change in status and by laws to be performed once shareholders approval is received.

Subsequent events

In October 2011, Cynthia Ekberg Tsai was appointed Chairman of the Board.

Results of Operations

Six months Ended June 30, 2011

Until June 30, Biologics Process Development has been Viropro’s only operating subsidiary and it’s only source of operating income.

Revenues and Operating Loss — Revenues were $454,172 for the first six months of 2011 compared to $221,429 for the same period in 2010. Revenues of 2010 only reflected BPD’s revenue for one quarter. Operating expenses increased as a result of the professional and consulting fees incurred as a result of the Company working towards fully reporting status. The Company incurred $1,520,651 in 2011 versus $919,446 in 2010.

Balance Sheet - A liability for stock to be issued was recorded as shares from the private placement previously disclosed are not issued at time of their purchase but will rather be issued when the Company is current on its filing of financial statements.

Three Months Ended June 30, 2011

Revenues remained at same level as in 2010 for as mentioned, BPD is nearing full capacity. This is what triggered the decision to expand BPD’s facility.

Liquidity and Capital Resources — Material Changes In Financial Condition and Longevity

As of June 30, 2011, the Company had a working capital deficiency of $834,589 and $191,090 in cash. Starting in April 2011, Viropro initiated a private placement of $750,000. At this point, as the revenues are not sufficient to cover expenses, the only alternative for the company is to raise funds through equity issues.

We will require substantial additional funding in order to attain profitability; our facilities in California and the UK require expansion to be able to bid for more important service requests. We expect 3.9 million dollars will be required from April 2012 to upgrade the Malaysian operation to the cGMP certification; from there, the first client contracts will not immediately generate cash flow and continued cash deficiency is expected to continue until middle of 2013 requiring an additional 1.5 million dollars. We nevertheless believe we would have available cash to fund our operations at least through 2012 based on our current business and operational plans assuming new financings and collaborations are entered. Our capital requirements beyond that will depend on a number of factors, including cost of new technology and development programs and additional personnel costs. Further, these requirements may change at any time due to technological advances or competition from other companies.

We will continue to explore and consider new opportunities for funding our operations and activities through business partnerships involving our knowledge, human resources and intellectual property, as well as selling equity securities and possibly borrowings from financial institutions. We cannot assure you that adequate funding will be available to us or, if available, that it will be available on acceptable terms. Any shortfall in funding could result in our having to curtail the services we offer.

We expect to continue to incur substantial losses through at least the next two years and may incur losses in subsequent periods. The amount and timing of our future losses are highly uncertain. Our ability to achieve and thereafter sustain profitability will be dependent upon, among other things, increasing cash flow from service agreements, generating economies of scale from central purchasing procedures, a general increase in business undertakings from increased exposure of both our streamlined services and work synergy. We believe this synergy can be generated by constant exchange of information on work procedures between our operating subsidiaries.

Plan of Operations

As indicated above, the Company will focus on the development and transfer of “in licensing” leading technological processes for the manufacturing of high quality biopharmaceutical products. Viropro focuses on one main line of therapeutic proteins, monoclonal antibodies such as Anti-CD20.

At the same time, the Company will be implementing its new business model that calls for Contractual Research and Manufacturing Services offered through complementary subsidiaries. Typically, microbiology will be performed at our Montreal facility then development will be switched to either our Cambridge or San Diego units before going into clinical production in Malaysia. All research and development procedures are to be done in collaboration with the partners with whom Viropro has established its strategic alliances. Priority will be given to further development of these alliances, establishing the optimal product line, methods of manufacturing, distribution, and signing joint venture partnerships in the markets we are targeting.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of June 30, 2011, our management, under the direction of our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended. Based on this evaluation, and the identification of material weaknesses in internal control over financial reporting as described below, our chief executive officer and chief financial officer each concluded that our disclosure controls and procedures were not effective as of June 30, 2011.

Internal Control over Financial Reporting

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements for external purposes in accordance with generally accepted accounting principles defined in the Exchange Act.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

A material weakness is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses in the Company’s internal control over financial reporting as of September 30, 2010:

The Company acquired Biologics Process Development, Inc. (“BPD”) in April 2010. The Company’s management began to integrate BPD into the Company and enhance the internal controls structure and policies and procedures. Prior to our acquisition of BPD, BPD operated on a cash basis of accounting rather than an accrual basis. Following the acquisition, we hired an external accountant specifically to assist us with BPD and began the process of changing BPD to accrual basis accounting . Since December 31, 2010, we have also implemented a number of other changes in internal control over financial reporting, as described in the next paragraph, to remediate material weaknesses. Management believes that our internal control over financial reporting has improved.

Changes in Internal Control Over Financial Reporting

There were a number of changes in our internal control over financial reporting during the quarter ended September 30, 2010 and thereafter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting as a result of the BPD acquisition and the material weaknesses described above. As explained above, prior to the acquisition, BPD used cash basis accounting, and we undertook the process of changing BPD to accrual basis accounting. Additionally, since the acquisition of BPD was consummated in April 2010, we have made changes to the internal control procedures of BPD to strengthen such controls. For example, among other things, during 2011 we (i) hired an external accounting firm from San Diego to handle accounting data coming from BPD, (ii) hired a US CPA firm established in Long Island, New York, to collect and assemble accounting information coming from us and each of our operating subsidiaries, VPRI and BPD, (iii) increased the oversight provided by Viropro’s executives over BPD’s operations and financial activities and (iv) instituted procedures to more accurately identify direct costs incurred for each subsidiaries contracts.

Also, following the acquisition of Alpha Biologics Sdn Bhd, other changes were implemented during the 3 rd quarter of 2011. These changes addressed the transfer of information from Alpha’s Malaysian and UK operations to Viropro Inc., access to banking information and general ledger entries; all such information is now supervised directly by the Chief Financial Officer before being submitted to our external CPA to produce the quarterly statements and to our external auditor for quarterly review.

In addition, the Company is planning to hire another full time employee to further strengthen these functions, which will assist in the process of implementing additional effective internal controls over processes at the corporate level as well as in each subsidiary.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

On June 21, 2009 a $5,000 Securecap convertible debenture holder initiated procedures against the Company to recover capital due at maturity. Management of the Company had offered to the holder, as it had done will all Securecap Convertible Debenture holders, to convert its debenture into common shares at a lower price than the initially set price. The claim was filed in the Small Claims Court of Montreal, district of Longueuil, Province of Quebec, Canada under file no 505-32-025648-099. Company has entered into agreement with plaintiff for a settlement by issuance of 166,667 shares. However these shares have not yet been issued.

On July 13, 2009 HKDP, a supplier of Public Relations Services to Viropro, filed a lawsuit claiming $37,991.95 for an unpaid bill. Management had contested the claim for stay of execution, however the Company is in discussions with representatives of HKDP and believes the terms of a settlement can be negotiated.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On April 26, 2011, 7,500,000 were issued pursuant to a private placement.

On May 2, 2011, 17,000,000 shares were issued to Rajiv Datar and 4,000,000 Claude Gingras to offset due fees and expense accounts.

On June 2, 2011, 5,000,000 shares were issued to a consultant.

June 16, 2011, 6,000,000 shares were issued to Innium Technologies as payment in shares for services rendered.

Item 3. Defaults Upon Senior Securities.

The convertible debenture issued on March 1, 2007 came to maturity on March 1, 2009. Whereas all but $30,000 of this debenture was converted, this amount remains outstanding and is payable to the holders (see Note 7 of the Financial Statements).

Item 4. Submission of Matters to a Vote of Security-Holders.

None.

Item 5. Other Information.

The disclosures set forth in Part II , Item 2 of this quarterly report are incorporated by reference under this Item 5.

Item 6. Exhibits


Number		Title of Exhibit
31.1		Certification pursuant to Rule 13a-14(a) and Rule 15d-14(a)
31.2		Certification pursuant to Rule 13a-14(a) and Rule 15d-14(a)
32.1		Certification pursuant to 1350, Chapter 63, Title 18 of United States Code
101.INS		XBRL Instance
101.SCH		XBRL Schema
101.CAL		XBRL Calculation
101.DEF		XBRL Definition
101.LAB		XBRL Label
101.PRE		XBRL Presentation

In accordance with the requirements of the Security Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, duly authorized.

VIROPRO, INC.

/s/ Rajiv Datar

Rajiv Datar, President & CEO

Dated: February 16 , 2012

Viropro (CE) (USOTC:VPRO)
Historical Stock Chart
Von Nov 2024 bis Dez 2024

Click Here for more Viropro (CE) Charts.

Viropro (CE) (USOTC:VPRO)
Historical Stock Chart
Von Dez 2023 bis Dez 2024

Marktdaten

News

Werkzeuge

Märkte

Entdecken

Hot Features

Follow Feed

Optionen-Flow

Watchlist

VPRO Viropro Inc (CE)

News Viropro (QB)

Kürzlich von Ihnen besucht

Unternehmen

Geschäft

Popular

App herunterladen

Trends

Toplisten

Marktdaten

News

Werkzeuge

Märkte

Entdecken

Hot Features

Follow Feed

Optionen-Flow

Watchlist

VPRO Viropro Inc (CE)

News Viropro (QB)

Kürzlich von Ihnen besucht

Unternehmen

Geschäft

Popular

App herunterladen