If your leaky roof needed repairing, would you use old dried up shingles? Of course not. You'd get brand new materials compatible with the old stuff. Take that principle and apply it to regenerative medicine, and you have a rough idea of what a biotech company called NeoStem (NBS) is up to.
The company calls it cell therapy, but think of it as tissue repair, replacing bad cells with good cells. Imagine Uncle Bob having better vision because his macular degeneration was reversed, or Aunt Millie having a few more years because she bounced back from her radiation treatments enough to beat cancer.
The idea is simple. Supply a patient with massive amounts of friendly, unrejectable, and replenishable cells, which originated in their own body. These "autologous" cells are created then furnished to patients as needed. NeoStem is poised to fully implement this model.
At a glance NeoStem might look like a biotech preoccupied with research. But a closer look reveals big plans. NeoStem has been quietly completing a series of acquisitions that will give the company some very impressive products, plus the pipeline to deliver them.
Take Progenitor Cell Therapy (PCT), a manufacturer with lab facilities in New Jersey and California. Now a wholly owned NeoStem subsidiary, PCT has had significant revenue growth over the last several quarters with an A-list clientele that has chosen them for their contract manufacturing needs. PCT had revenues of $8 million for the year ended Dec 31st 2012, representing an increase of 46% YOY. NeoStem has already announced new client agreements earlier this year, so further growth of this division is expected going forward.
Want more proof of big plans? Try the two-year research grant from the National Institutes Of Health's NIAID division (National Institute Of Allergy And Infectious Diseases) just delivered. This grant recognizes the potential value of regenerative cell therapy, and specifically, the promise of NeoStem's VSELs ("very small embryonic-like" stem cells) as a countermeasure to radiological damage. Simply put, cancer survivability may soon increase dramatically once recovery from radiation therapy is made easier. There's even a potential application for gum disease. According to Dr. Robin L. Smith, Chairman and CEO of NeoStem, the company plans to file an IND (investigational new drug) with the FDA in late 2013 or early 2014 in hopes of initiating a NIH-funded human clinical study treating periodontitis with VSELs.
"VSELs might be an ideal cell therapy," says Dr. Denis Rodgerson, Director Of Stem Cell Science at NeoStem, "to regenerate the body's immune system and repair other tissues damaged by radiation exposure. Early studies show VSELs are resistant to lethal radiation, which destroys other immune system-restoring stem cells in the body."
"Those exposed to acute high-dose radiation," Rodgerson continues, "have compromised immune systems such that the virulence and infectivity of biological agents is dramatically increased. Death can occur within one to six weeks following radiation exposure. Currently there is only one intervention that saves a fatally irradiated person - a rescue through stem cell transplantation." NeoStem has received multiple research and funding grants of over $4 million dollars to continue development of this technology. These grants assist in keeping the company's cash reserves high and allows for continued progress.
The company's Amorcyte subsidiary is in the midst of a phase 2 trial of a promising heart-healer called AMR-001, which also utilizes autologous cells, but actually injects them directly into the heart in the critical days after a heart attack when tissue is still raw. The costs associated with heart disease are staggering, according to the American Heart Association the current medical cost associated with cardiovascular disease is $273 billion and that number is expected to triple over the next 20 years.
NeoStem's been shaping up its balance sheet, too. Last year the company sold its half interest in China's Suzhou Erye pharmaceutical division. The company board of directors recently got a star in Stephen Potter, formerly of Osiris Therapeutics, the first company to have an approved cell therapy product. His presence speaks volumes about NeoStem's chances of success.
"A decade ago everything was about the future promise of what cells could do," Potter states. "Now there are thousands of clinical investigations and trials."
The month of April 2013 has been quite eventful, perhaps will be the "watershed" for the upcoming year. NeoStem has made the rounds of some high-profile industry events such as the Cancer Immunology Conference in Washington and the Tenth Stem Cell Summit in Boston.
And then there's the Vatican. The Roman Catholic Church has embraced autologous stem cell production, as an ethical alternative to the morally challenged embryonic variety. They've reconsidered antiquated views, and now they're partnering with NeoStem.
Monsignor Tomasz Trafny, who heads up a newly formed Vatican body called the Science and Faith Foundation, just hosted the Second International Vatican Adult Stem Cell Conference in Rome with 2012 Nobel Prize Winner Dr. John Gurdon as keynote speaker. A CNN headline summed up the effort, "Vatican Seeks To Rebrand Its Relationship With Science."
"This unusual marriage of church and biotech," wrote CNN s Florence Davey-Attlee, "is a targeted public affairs initiative. The Vatican aims to use the partnership to show people there is an alternative to embryonic stem cell research - which it vehemently opposes - that doesn't involve the destruction of human embryos."
The Vatican has invested a million dollars in this collaborative effort, which is a huge endorsement that could blow away clouds of doubt in cultures unsure about cell therapy. This could be a worldwide stamp of approval that could put NeoStem's lab savvy into hospitals and clinics all over the globe. Monsignor Trafny keeps the focus on ethics and the advancement of science for the benefit of mankind, not dollars.
"We had a very tough time trying to find who would be our partner and meet our requirements," said the Monsignor. "We were looking for companies and institutions who had never been involved in embryonic stem cells and who have very clear statements on their work."
"Secondly," Trafny continues, "we looked for someone who would share knowledge with us and give us access to their labs and be trained by their experts. The third part, which is important, is that we looked for someone
who was interested in the cultural issues. NeoStem met all of our needs."
By "cultural issues" Trafny, of course, means the dynamic between Church and public, and the Vatican's ability to shift credibly to a pro-science stance.
"We want people to know," Trafny clarified, "that the Church is supporting research AND science and that they (Catholics) don't need to make a choice."
If NeoStem's business model succeeds, countless lives could be saved and improved. Within several years physicians could be e-mailing PCT for a new batch of John or Jane Doe's cells, then having them infused in that same doctor's office the very next day.
NeoStem is set up nicely for success, however the company is still in the development stages of its treatments that offer the largest potential returns to investors. Certain risk factors are present and will remain an issue in the near term. Clinical trials take time and a large capital investment, and although data has been positive thus far, it does not mean that the FDA will grant final approval. Investors need to adequately weigh their risk tolerance prior to the purchase of any equity.
But we'll still have to climb a ladder to fix that leaky roof.
Disclosure: I am long NBS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.