Imagenetix Inc. (IAGX)
Interview with:
William P. Spencer, President, CEO and Director
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their
Celadrin® product; developed to provide support for healthy joint function and mobility, reducing pain and stiffness, improving supine range of motion of the osteoarthritic knee with less postural sway.

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Imagenetix’s Celadrin® product is offering relief to individuals suffering from arthritis

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Consumer Non-Cyclical
Personal and Household Products

Imagenetix Inc.

16935 West Bernardo Drive, Suite #101
San Diego, CA 92127
Phone: 858-674-8455

William P. Spencer
President, CEO and Director

Interview conducted by:
Walter Banks
May 2004

William P. Spencer has served as Imagenetix’s President and C.E.O. since January 1999. From January 1986 until December 1996, he served as chief operating officer, chief financial officer, and executive vice-president of Natural Alternatives International, Inc. (“NAI”), a company engaged in the formulation and production of encapsulated vitamins and nutrients. He was president of NAI from December 1996 until October 1998 and was a director from January 1986 until October 1998. During the time Mr. Spencer assumed management positions at Natural Alternatives, the company’s sales and earnings grew approximately 50 fold and its market valuation grew approximately 100 fold. From 1976 to 1988, he was a regional vice president for San Diego Trust and Savings Bank. Mr. Spencer earned a B.S. degree in finance and an MBA degree from San Diego State University.

Company Profile:
San Diego based Imagenetix, Inc., (OTC Bulletin Board: IAGX), is an innovator of scientifically tested, natural-based, proprietary bioceutical products developed to enhance human and animal health on a global basis. The company develops, formulates, and private-labels proprietary and leading health products to be marketed globally through multiple channels of distribution. For patented products, Imagenetix explores licensing arrangements with appropriate pharmaceutical partners.

Imagenetix’s lead natural based, scientifically tested, University researched uniquely formulated product Celadrin® (a complex of cetylated fatty acids), is developed to provide support for healthy joint function and mobility, reducing pain and stiffness, improving supine range of motion of the osteoarthritic knee with less postural sway.

The Company has several proprietary products and formulations in various stages of marketing, development and clinical testing. A few of the Company’s additional products include:

Celadrin® Cream – a topical cream designed for relief of joint pain. The Company has completed a double-blind, placebo-controlled, matched pair clinical trial to determine the scientific efficacy of Celadrin® cream. This study was published in the Journal of Rheumatology in April of 2004. The Company believes the market for an effective cream could be larger then the market for its oral product which is targeted to provide support for healthy joint function and mobility.

Anti-Wrinkle Cream – a revolutionary age-defying skin cream. This cream is designed to diminish the appearance of wrinkles. The Company is currently conducting a placebo-controlled clinical study to determine the scientific efficacy of Imagenetix’s anti-wrinkle cream.

Psoriasis Cream - The Company has successfully completed a clinical trial to determine the scientific efficacy of a skin cream designed to provide relief to those who suffer from psoriasis.

Whole Food Fruit and Vegetable Concentrates – These whole food concentrates containing a full array of whole food actives are in capsule form designed to increase oxidative stress protection and provide an array of health benefits. Imagenetix has completed and received publication of a clinical study measuring improvement in multiple immune system markers and positive influence on diabetes.

Genepril™ bioceutical composition - Imagenetix is seeking claims for the prevention and treatment of various types of inflammatory diseases such as psoriasis, lupus, periodontal and cardiovascular conditions. The patent application states that Genepril may be used in humans and canines, is applied topically or taken orally and can be administered effectively once or twice a day. The Genepril composition may reduce or avoid many of the side effects associated with conventional treatments. The application also notes that the Genepril composition can be used as a sole treatment or in conjunction with other drugs or therapies.

CEOCFOinterviews: Mr. Spencer, will you give us a brief history of Imagenetix?

Mr. Spencer: “I am co-founder of the company, which was founded in 1999, and we started out on the quest of developing what we call a bioceutical. These products have pharmacological impact, in which there are no side affects, so they provide specific health benefits without the side affects of other products.”

CEOCFOinterviews: I know you do clinical studies, what is the reason behind that?

Mr. Spencer: “There are multiple reasons why we conduct first class clinical studies. One, scientific credibility; One can always get testimonials on any type of compound or product, particularly in the natural arena. If you subject your product to a well designed, double blinded placebo study your product has specifically validated health benefits. These type of studies Imagenetix conducts are the gold standard clinical and medical type, again which are double blind, placebo controlled and conducted in a top university setting, then published in premier medical, peer reviewed journals. Also these studies when done right provide the consumer and our clients with justifiable confidence in the product. For example, a leading Pharma Company in India Cipla Ltd. (NSE: CIPLA) will be selling a topical cream and pills using our Celadrin® compound as a prescriptive drug to medical doctors and pharmacies throughout India. Great science leads to the generation of new clients and expanding channels of distribution.”

CEOCFOinterviews: Do you actually have the universities do this or do you do it yourselves?

Mr. Spencer: “We have Universities do our clinical studies. The University puts it through their review board to obtain study approval, and they begin the process of recruiting the patients and subject them to a double-blind, placebo-controlled study. We use the most professional academicians and pharmaceutical researchers to conduct our clinical studies. The most recent study was published, in a top flight international medical journal, The Journal of Rheumatology. The University of Connecticut conducted this study and it showed 100% of the subjects that were on the Celadrin® cream, had significant benefit and we quantified that benefit with five different measurements. These are all Quality of Life type of measurements. It is truly a landmark study, particularly when you look at the significance between the Celadrin® cream and the placebo. I think the entire health movement is toward people demanding credibility and integrity in the products they use. We have validated our compound with medical studies as well as having them published in premier medical journals."

CEOCFOinterviews: How does your product Celadrin®, stand up to some of the other products that are out there, in the biotech arena as well as other areas?

Mr. Spencer: “We have a unique positioning. We have had sixteen or seventeen scientific presentations or medical publications on the Celadrin® compound alone. The speed in which the Celadrin® compound seems to provide efficacy, combined with long-term duration of providing efficacy is what makes Celadrin® unique. Remember, Celadrin® has demonstrated exceptional levels of efficacy in both oral and topical form of delivery. There are unique attributes of how Celadrin® allows the body to restore itself and get better. In a matter of a short time benefit is delivered, you are not just masking over the pain center to enable people to move freely.”

CEOCFOinterviews: What differentiates it from glucosamine?

Mr. Spencer: “If you look at the entire spectrum of pain you would include a number of pain areas, such as arthritis, bursitis, tendonitis, osteoarthritis and rheumatoid arthritis. When it falls into a topical cream, it falls in the over-the-counter non-prescriptive category. Another product on the market, glucosamine, works on osteoarthritis through the rebuilding of cartilage and that constitutes a small percentage of the pain spectrum, whereas our Celadrin® topical cream works on the entire spectrum, which includes arthritis, tendonitis, bursitis etc."

CEOCFOinterviews: How does Celadrin® alleviate the pain?

Mr. Spencer: “Theoretically, Celadrin® topical cream enhances cell membrane permeability, which  allows for rapid cell communication and restoration to take place. The clinical topical cream study showed 100% efficacy in 30 minutes with cumulative benefits taking place over the next 30 days. You can set your watch to it and in a matter of fifteen minutes, even if you have had chronic pain for a number of years, in just fifteen minutes, you will receive benefit. A quick review of some of our studies: We did a pioneering study with the University of Minnesota, showing that the topical gets into the bloodstream, so within that fifteen minute period of time it penetrates then signals that the cell membranes have received Celadrin, and flexibility is restored. I am jumping around from a pill to a topical cream a bit so I want to clarify: Celadrin® is an over-the-counter product in the area of a topical cream, so we can make a pain claim, whereas with a pill, we make structure function claims of providing flexibility and mobility and the promotion of joint health in the United States. In India for example, we have arranged with Cipla Ltd. (NSE: CIPLA), to market and sell Celadrin® as a prescriptive drug. Cipla is the number one pharmaceutical company in India. The Celadrin® compound is going to be sold in the pharmacies, through Cipla’s brand name called MOBIX.”

CEOCFOinterviews: In the United States, will Celadrin® be sold as an over-the-counter?

Mr. Spencer: “Yes, it is classed as an over-the-counter topical cream."

CEOCFOinterviews: Are there any side effects with Celadrin®?

Mr. Spencer: “The beauty with Celadrin® is that there have been no known side effects, so it is extremely safe. We have conducted multiple safety studies and the compound has been shown to be extremely safe. Celadrin provides for fast efficacy that has been validated through top flight medical studies and is very safe.”

CEOCFOinterviews: How big is the market for this product?

Mr. Spencer: “The muscle skeletal cost on an annual basis is in excess of 250 billion dollars a year.”

CEOCFOinterviews: When most people have pain in their joints, do they tend to go to the doctor, drug store or local department store?

Mr. Spencer: “It depends upon the severity or the perceived severity. We talked about glucosamine and a lot of people that are in pain may have other forms of arthritis and they think glucosamine can help with that. Glucosamine deals with osteoarthritis and mainly in oral form and people recognize it on the store shelf. We always recommend people should visit their doctor on a regular basis and ask questions of what is best. Doctors would be impressed with the science we have accumulated on Celadrin."

CEOCFOinterviews: What is your marketing strategy?

Mr. Spencer: “We currently sell via network marketing, direct sales and through Avon Products, Inc. (NYSE: AVP) under our trade name of Celadrin®. There are other multi-billion dollar companies that have taken the product on and are selling it. Another vehicle is through infomercials; we think that channel has great promise."

CEOCFOinterviews: Are there infomercials already on the air?

Mr. Spencer: “There is one successful infomercial out right now by a company called Newport Bioceuticals. Test marketing has been quite successful. It will be launched aggressively in the fall under the brand name Zylogen.”

CEOCFOinterviews: How many companies are you working with to present your product through an infomercial?

Mr. Spencer: “There could be three to four companies that put it out there from an infomercial standpoint, and from there, it will progress to the mass market. Dick Van Patten is the spokesperson for Zylogen. All of the companies have their own brand name of the product. This is going to be a product that will absolutely revolutionize health and the infomercial channel is a great way to receive information on this unique product."

CEOCFOinterviews: How many countries are you in?

Mr. Spencer: “Besides the U.S. and India, we are selling in Japan, Taiwan, and Germany via the networking marketing companies we do business with. This will be our first launch with a pharmaceutical company that will be selling to pharmacies and medical doctors. This summer Cipla is going to be launching a ten-city tour and conducting seminars to medical doctors in India. They do a first class job and you can see how it could be just the beginning once the news spreads and people start experiencing the benefits of the product.

 Additionally, derivations of this product have so many other applications like periodontal, cardiovascular, and other maladies. With the modification of the compound, we move it into a drug category. We have filed a patent with Burns, Doane, Swecker and Mathis LLP, which is a topflight intellectual property law firm. The patents cover periodontal to cardiovascular and other inflammatory conditions as well."

CEOCFOinterviews: We have become a world where everyone is interested in fighting the aging process and you always hear one of the most important ways to fight breast cancer and other diseases is to get some exercise, but if your joints don’t feel good you can’t get exercise!

Mr. Spencer: “Particularly in the area of a weight management program. If I were a company that specialized in weight management, this would be my frontline product. Everybody is advertising diet products, but if you aren’t mobile and you can’t get around I believe they won’t work. This is an ideal product for being able to freely exercise and be very limber so you can successfully meet your short and long term weight management goals."

CEOCFOinterviews: How does it react with other drugs, is it a product you can take along with other drugs?

Mr. Spencer: “Celadrin® is well tolerated with other drugs. One of our initial studies was published in The Journal of Rheumatology in August of 2002. With this study, we had to show improvement of the oral, over and above the arthritic medications that the subjects were taking. Results showed the product is well tolerated with other medications. We showed improvement beyond their arthritic medications the patients were taking. We have had no report of side affects with the products. The cream goes on nicely and penetrates rapidly and it works so well. In the University of Connecticut study, we did a 30 minute test and people that couldn’t walk stairs before they applied Celadrin®; were walking stairs for time after only the first application."

CEOCFOinterviews: If you need to, can you ramp up production easily?

Mr. Spencer: “Yes, we could ramp up production. We have great flexibility to expand our business to meet the potential demand.

CEOCFOinterviews: Let’s talk about your revenues and how are you situated financially to continue to grow the business?

Mr. Spencer: “We are a public company and are having good growth in terms of sales and profits. It is the kind of business where we can achieve great growth and with that we have a wide variety of financing alternatives for growing our business. We are selling product now, and there is the potential of licensing the Genepril™ compound with pharmaceutical companies. I think that Cipla is just the beginning so that we can have a diversity of revenue sources, from the mass market to every health related market.”

CEOCFOinterviews: Who would broker a deal with the mass market?

Mr. Spencer: “It could be a combination of us directly, but for the near future it would be the companies with successful infomercials, who establish a brand and then place the product on the mass market shelves and attractive point of purchase displays. From there, other opportunities present themselves for us because we have proprietary control of our compound. One of the magical features of our business model includes our ability to keep our overhead low so we have good margins and we can bring a lot of the incremental sales and associated profit margins right to the bottom line. It has the potential of being an economic and cash generating juggernaut for our shareholders.”

CEOCFOinterviews: In closing, what would you like to say to potential investors?

Mr. Spencer: “I think it is a unique opportunity in that there are not many companies that can have an impact on helping and changing mankind and the world of health. Imagenetix is at the forefront of potential world-wide growth opportunities. We could become a dynamic company that has a unique opportunity of making the world a healthier place, help many millions of people and provide superior and potentially galactic returns to our shareholders.”


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