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Advanced Cell Technology (ACTC) has got to be one of the most kicked around, blatantly abused stocks of all time. And, although I can certainly cast a whole lot of blame on at least one of the "dearly departed", former CEO Gary Rabin, far too much of the positive developments simply gets passed over as though some of the seriously genius accomplishments have never occurred.
Look, I don't make a living pumping stocks, and I won't start here. What I will do, however, is to point out the pieces to a very complex and dynamic company. And yes, I am still talking about Advanced Cell Technology.
Don't misunderstand me, I have certainly had my frustrations, but I can also tell you that I have held this little, soon-to-be-gem in my crown stock, for a period longer than most would ever admit. No, I don't micromanage the price of the stock daily, and no, I don't throw stones at a penny stock that has had to turn to alternative financing to fund operations. Advanced Cell is not the first, and they will be far from the last to execute milestones off the backs of some of those vultures who offer those pesky little convertible debentures surrounded in a basket of beautiful flowers. Yeah, you know the ones because some of your other stocks have fallen prey to them as well, right? Well, in that case, take a deep breath and exhale that negativity, because I don't want to discuss that either.
Stocks are priced on "forward-looking" events and those that hold stocks based on past performance must have forgotten to read the boiler plate lingo at the end of each press release. I liked Apple (NASDAQ:AAPL) at $600.00 a share and I never truly believed the paragraph at the end of each press release, you know the one, "past performance is no guarantee… yada,yada,yada". I sold Apple at $625.00 and I have yet to fall back in love with them again even while they danced in the sub-$500.00 levels. Why? Because the future of Apple does not look as bright, although I absolutely love the past.
My point is this…every stock has a past, and most micro cap stocks have a past that many would not like to discuss. To be successful, investors need to "get over it" and start to look forward. Stocks are priced on forward P/E, forward free cash flow, forward guidance and I might add, forward thinking leadership. What we then do as investors is to rate the credibility of the source. And, what I am about to tell you is that the medical team at Advanced Cell Technology might just be the most credible, honest, forward-thinking scientists in the World. Did I say "World"? I surely did, and here is why.
Dr. Robert Lanza... if you have never heard of him, use your favorite search engine and allow yourself about two hours of good reading. This guy is an absolute genius in every sense. Perhaps that is why in March of 2013, Dr. Lanza was voted one of the Top 4 "Most Influential People on Stem Cells". As a child, this guy was doing medical experiments in his basement while his mother was making mac and cheese upstairs. To say that this man has science in his blood is an understatement. I would venture to say that Dr.Lanza is unlike any scientist I have ever studied, not only based on his intellect, but when you take the time to listen and read about this guy, you will understand that Dr. Lanza has the ability to explain the most critically important pieces of data in a way that is understood and meaningful to the masses. And, when I exhale a sigh of relief that Dr. Lanza has finally sent Gary Rabin packing, I simply draw back a fresh breath filled with Lanza-like greatness and accept the prior faults, dilution and all. After all, greatness comes at a cost.
This genius, the lead doctor and scientist of this six cent stock, has recently tweeted that he has completed filming for a stem cell special that is going to be narrated by Stephen Hawking, scheduled to be on a television in early February. What? Say it ain't so, Lanza is with ACTC... that little, good-for-nothing stock people love to hate. Oh, but it's true… Dr. Lanza will be conversing about regenerative science, which he is about to bring to the masses, and my gut instinct tells me that he will lead into that show in February with an announcement that will forever change the direction for ACTC.
We get instinct from many areas, but as an investor, I can sense when something is about to happen based on the actions or inactions of a company. Sometimes they are too loud and sometimes they are too quiet… too, too quiet, like ACTC has been during the prior several months. Far too quiet after Dr. Lanza let slip the fact that a test patient had gone from 20/400 sight to 20/40 sight. I am left to wonder why all of the sudden they go stealthy after such an unanticipated response is uncommon. So uncommon, in fact, that it sparkles my interest in a most favorable way.
But, my instinct also told me that some of the pieces had not yet been laid to turn the next page in the chapter. And what about the peer reviewed articles that have been published about ACTC, The Lancet for one and the newest volume of Principles of Tissue Engineering that hit the shelves in December. Instinct tells you to look at these things for what they are... fuses, I tell ya, fuses. You can elect to see them as one-off events, but if you don't see them as "lit" fuses, you are going to miss the fireworks in a few short days, weeks, or months.
Let's put the pieces together and see where we are taken. Remember, we never live in the past, we have become forward-looking investors, searching for opportunity, not excuses. And, it's okay to take the foundation pieces along in our process because they too, add to our forward thinking. A short while back, in 2011, ACTC announced some early results from its stem cell tests in a Phase I trial. They were somewhat stellar in the world of regenerative medicine. In fact, the European Commission was so pleased, they awarded Orphan drug status for the treatment of Stargardt's disease . This is huge and will be a part of the puzzle later on in my rambles.
Forward now to 2012, ACTC had a review published in The Lancet , I suggest that you read it. The article substantiates a great deal of data that Dr. Lanza, et al, is doing in the clinic. Company data does not get published in The Lancet without some serious challenge, fact audits, and serious medical debate among colleagues. It's like getting a Doctorate degree, you can ace the course, but, if you fail to defend your thesis, you don't graduate. Same with The Lancet, you can ace the exam but your data better hold up to some serious scrutiny or it won't get published.
Next, ACTC gets real quiet, as though they need to get the house in order before they release the gold. So, they arrange some financing, not great terms, but it gets them thirty five dollars and the chance to fight several more years. With this in the bank, they forge on and keep the laboratory busy. Having no debt is a beautiful thing. I inhale that positivity. Yes, the financing is dilutive, BUT, it is a necessary evil for almost every micro biotech stock in the business. So, I accept the pain .
Now, things are looking a bit better and it remains quiet, but, there is a sense, by me, at least, that things are going well. So well, in fact, that Dr. Lanza can no longer contain himself and during a casual chance interview in May of 2013, he chimes in with a little something, to let me paraphrase, the blind can now see. At least one man can. Then, things get quiet again, after ACTC gets covered in just about every national news outlet in the USA about his slip of the lip. But, after the filings to the SEC about this slip of the lip, in which they opine on that fact, ACTC goes quiet again.
Now, we are brought forward again, a few more months and we get this former CEO telling investors that he can most likely sign a joint venture, but the time just isn't right. Well, I was never a fan of the guy, but even if he was wrong about his timing, I never had much doubt that the opportunities exist. Let's face it, ACTC has some published data, a blind man that can now see, and a lead doctor that is going to join Stephen Hawking in a few short weeks. Hmmm, I like where we are heading. The stars are starting to align, now. And a big chunk of asteroid that was in the way was just terminated. Different orbits, well, let's leave it there because I don't like to kick a man when he is down. But, I will speculate that his orbit was rotating on a different axis than Lanza, et al.
I am a firm believer that the medical team is ready for a joint venture or a partner. These guys are less about money and more about saving lives and sight. Seriously? A group of Wall Street guys that put strong science before the good 'ole American dollar? Yep, that is exactly what I am telling you. But, you know this because you listened to and read Dr. Lanza's work. At least you should have before you began badmouthing my piece.
I pull information from all sources, from the bar owner in Europe who had the first reported success based on ACTC science, to the SEC settlement, recently announced. That was the second piece of my puzzle setting us up for the groundbreaking news I expect. ACTC needed to be quiet, even loose-lips Lanza, until the company is positioned to run unimpeded.
So, where are we now…a patient can see a whole lot better, cells are being restored, Lanza is gong on television with Stephen Hawking, SEC issues settle, old CEO is gone, speculation that there is interest from major pharmas about a joint venture/partnership, access to money, no debt, a new senior-level management position, a new facility, a newly published, peer reviewed article, a medical team less focused on personal wealth than they are with the science, and a receptive audience from the regulatory offices, both here and overseas.
Well, too much for me to not have a gut instinct. Remember, I forgot the past and it does not bother me because I refuse to dwell in it. I live this stock in forward momentum, watching the trail from officers past get smaller and smaller in the rear view mirror. I plug together the pieces that everyone can see, but not take the time to assemble. And I then read the results. You want to know what the results of my assembled puzzle tell me? Well, you get it for free and if you read this far, you might as well complete the journey.
My instinct is this. ACTC is about to get bestowed upon them one of the greatest allowances in FDA prizes... BREAKTHROUGH STATUS. That is: Section 902 of the FDASIA articulates two general criteria according to which the FDA may designate an investigational drug as a breakthrough therapy. First, this designation can be applied only within the context of a "serious or life-threatening disease or condition." Second, it must be predicated on "preliminary clinical evidence indicat[ing] that the drug may demonstrate substantial improvement over existing therapies on 1 or more clinically significant endpoints." The FDA has interpreted the second criterion to mean that data from studies in animals or conducted in vitro showing that a drug has promise are not sufficient to justify this designation; data from clinical trials in humans are needed.(1)
Remember from our reading, a patient can see, layers of RPE cells regenerate in mice and man, and zero safety issues to date. Does ACTV fit the criteria? How about a one word answer: absolutelyyes, a made-up word to describe my anxiousness.
I led you on this journey for a reason, a message that ACTC just might make you rich. Well, I have held this stock for 5 years and I am more excited now than I have ever been for the future of this company, its medical and management team, and for its shareholders.
All of the positive pieces of the puzzle have always been in the box ready for assembly. They just needed to be laid out on the table, fitted to each cut, and then read the message on top of the assembled pieces.
There is not one piece, GOING FORWARD, that provides any doubt as to what we as shareholders are about to witness. The bottom line is this: I like ACTC for many reasons, all of them positive. And if you follow the time line, perhaps you can speculate on the next logical milestone for the company:
1 /22/2014 Advanced Cell Technology Announces Change in Management
12/12/2013 Advanced Cell Technology Appoints Eddy Anglade M.D. Executive Vice President of Clinical Development
9/24/2013 ACT's Dr. Robert Lanza to Receive the Il Leone di San Marco Award in Medicine
9/19/2013 ACT Files Investigational New Animal Drug (INAD) Application with FDA to Treat 10 Different Disease Indications Using Pluripotent Stem Cells
7/17/2013 ACT Secures Approval from Data Safety Monitoring Board to Complete Third Patient Cohort in All Three Clinical Trials
5/23/2013 ACT Appoints Edward Myles as Chief Financial Officer
5/16/2013 ACT Confirms Clinical Trial Participant Showed Improvement in Vision from 20/400 to 20/40 Following Treatment
3/14/2013 Advanced Cell Technology Receives Approval from Data Safety Monitoring Board (DSMB) to Initiate Treatment of Third Patient Cohort in All Three Clinical Trials
3/12/2013 ACT's Dr. Robert Lanza Voted Top 4 "Most Influential People on Stem Cells"
12/20/2012 New Scientist Magazine Selects ACT's Induced Pluripotent Stem (IPS) Cell-Derived Human Platelet Program As One of '10 Ideas That Will Shape The Year'
9/28/2012 New Edition of Definitive (Two-Volume) Resource in Stem Cells Released
9/20/2012 Advanced Cell Technology Secures New $35 Million Funding Commitment from Lincoln Park Capital
7/26/2012 ACT Issued Broad Patent for Human RPE Cells Derived From All Types of Pluripotent Stem Cells
7/9/2012 ACT Secures Approval to Proceed with Increased RPE Dosage for Patients in Clinical Trial for Dry AMD
4/24/2012 ACT Announces Data and Safety Monitoring Board (DSMB) Approval to Increase RPE Dosage for Stargardt's Disease Patients in U.S. Trial
9/19/2011 ACT Secures First Patent for Generating Hemangioblast Cells to Treat a Broad Spectrum of Vascular and Hematopoietic Disorders
6/27/2011 ACT Granted EU Orphan Medicinal Product Designation for hESC-Derived RPE Cells for Treatment of Stargardt's Disease
4/20/2011 ACT Files European Clinical Trial Application for Phase 1/2 Study Using Embryonic Stem Cells to Treat Macular Degeneration
3/23/2011 ACT to Be Issued Broad Patent for Human ES Cell-derived RPE Cells in China
3/1011 ACT Receives Positive Opinion for Orphan Drug Designation from European Medicines Agency for hESC-Derived RPE Cells for Treatment of Stargardt's Disease (2)
As you can see, except for some mistakes by two former CEOs and some dilutive financing, I can't find a single negative aspect of Advanced Cell Technology.
It might be days, it might be weeks, or it might be months. But, I believe that in 2014, Advanced Cell Technology will finally BREAKTHROUGH.
Stay long and pay attention. Instinct tells me we are in for one heck of a ride.
Footnotes: (1) Expediting Drug Development - The FDA's New "Breakthrough Therapy" Designation Rachel E. Sherman, M.D., M.P.H., Jun Li, J.D., Ph.D., Stephanie Shapley, M.B.A., Melissa Robb, R.N., and Janet Woodcock, M.D. N Engl J Med 2013; 369:1877-1880November 14, 2013DOI: 10.1056/NEJMp1311439. (2) Sourced from Advanced Cell Technology
Disclosure: I am long ACTC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.