Gary Rabin – Chairman & CEO
Matt Vincent – Director, Business Development
Kathy Singh – Corporate Controller
Advanced Cell Technology Inc. (OTCQB:ACTC) Q3 2012 Earnings Conference Call November 8, 2012 4:30 PM ET
Good day ladies and gentlemen, and welcome to today’s webcast. Today’s webcast is being recorded and you’re currently in a listen-only mode. Following the presentation, we’ll have a short question-and-answer session. You can ask questions at any time during the presentation. (Operator Instructions).
It is now my pleasure to turn the webcast over to the host of our call today, Gary Rabin, Chairman and CEO. Mr. Rabin, the floor is yours.
Thank you and good afternoon. My name is Gary Rabin and I’m Advanced Cell Technology’s Chairman and CEO. I’m joined today by Matt Vincent, Director of Business Development and Kathy Singh, Corporate Controller.
Before we begin, I’ve asked Kathy to read the following statement. Kathy?
Thank you, Gary and good afternoon. Certain statements we are going to make on this conference call regarding future financial and operating results, future growth and Research & Development programs, potential applications of our technology, opportunities for the company and any other statements about the future expectations, beliefs, goals, plans, or prospects expressed today constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Any statements that are not statements of historical fact, including statements containing the words will, believes, plans, anticipates, expects, estimates, and similar expressions shall also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including limited operating history, need for future capital, risk inherent in the development and commercialization of potential products, protection of our intellectual property, risks associated with clinical trials and economic conditions generally.
Additionally, information on potential factors that could affect our results and other risks and uncertainties are detailed from time to time in the company’s periodic reports, including the report on Form 10-K for the year ended December 31, 2011. Forward-looking statements are based on the beliefs, opinions, and expectations of the company’s management at the time they are made, and the company does not assume any obligation to update its forward-looking statements if those beliefs, opinions, expectations, or other circumstances should change.
Now I’d like to review our financial results, which are discussed in greater detail in the 10-Q we recently filed with the Securities and Exchange Commission. I’m sure many of you also saw the press release we issued a short while ago.
For the 2012 third quarter, ACT had revenue totaling $68,184 compared to revenue of $132,805 in the year earlier period. Revenue was generated through license fees and royalty payments.
Research & Development expenses for the three months ended September 30, 2012 and 2011 were $2.8 million and $4.0 million respectively. Research & Development expenses decreased due to restricted stock issued to an executive in 2011 which vested immediately as opposed to over a period of quarters in 2012.
The company reported a loss from operations of $5.0 million compared to a loss from operations of $6.9 million in the 2011 third quarter. ACT reported a net loss of $8.5 million or $0.00 per share compared to net loss in the same period of 2011 of $52.5 million or $0.03 per share.
Net cash used in operations for the 2012 third quarter was $3.8 million compared to net cash used in operations of $4.1 million in the same period in 2011.
The company ended the 2012 third quarter with cash and cash equivalents of $8.3 million.
The company plans to fund operations for the foreseeable future from cash reserves and the recent $35 million funding commitments from Lincoln Park. It is important to stress the groundbreaking nature this financing commitment delivered to ACT. I have been with the company for eight years and this is the first time that we have heard a financial backer that didn’t require warrant massive discounts to market pricing and complicated structuring to fund our operation. This deal carries no got you provisions, no pricing look backs or recess. It is straight equity and it puts the company in a completely different place.
Now, I would like to turn the call over to Gary. Gary?
Thank you, Kathy. Like the last earnings call, I’d like to spend some time talking about the significant progress we have made in our clinical activities. As you can see from the press release we issued this afternoon, in addition to the release on the financial results, we are very encouraged by the results we are seeing from the patients we have treated today.
We have posted several photos depicting the regeneration of an RPE layer in the area of patients’ eyes where we injected ourselves. These shops are now scrolling on the webcast. These images were the topic of much discussion from our first ever gathering three weeks ago of our Ophthalmic Advisory Board, which consists of all of our principal investigators as well as two independent members.
The group was universally and overwhelmingly pleased by the definitive proof of the increased pigmentation on these fundus photography images. To observe clinically significant and regularly greater pigmentation within the area of the surgical blub is proof of the survival, persistence and performance of our RPE cells.
The patients we have treated have had an extraordinary degree of atrophy within the photo receptor layer with extremely limited visual acuity and limited options. With such a compromised patient population, we did not approach our trials with the expectation of restoring significant amounts of their sight. But we were hoping to see some biological impact.
We have however had evidence of both in many of our patients. Obviously our entire group of experts who are key opinion leaders in this field are very excited about what has been observed. This gives us encouragement that when we treat patients with greater visual acuity, we will see a significant disease impact. As we discussed in this evening’s press release, we’ve had a thorough view of the existing patients with our ophthalmic advisory board, including all of the participating surgeons.
We had complete unanimity within the group about the next steps to take to ascertain the likely power of treating this massive unmet medical need. We look forward to sharing details of this plan with the investment community and intend to do so after we discuss it with the FDA in the near future.
It is important for our investors to understand that the entire team of these highly elite vitreoretinal surgeons, have sufficient confidence in our treatment to be willing to endorse a plan that entails treating much earlier stage patients. We have developed a strategy to move the program forward in a least risky but most functionally significant means possible. It is remarkable to have such a prestigious team of retinal specialists supporting our platform. We and they are surprised and encouraged by what we have seen so far from this very impaired patient population.
Now I’d like to discuss where we are specifically on our clinical programs. Our Phase 1/2 clinical trials for Dry Age-Related Macular Degeneration and Stargardt’s Macular Dystrophy, using human embryonic stem cell derived retinal pigment epithelial cells are progressing smoothly, having now received approval from the Data Safety and Monitoring Board, to proceed with the entirety of the second cohorts of each trial.
In the third quarter, we treated the first patients in the second cohort from both trials following the completion of the first cohort in the US and European studies. Patients in the second cohort are receiving double the dosage administered in the first cohort up from 50,000 cells to 100,000. We have seen no issues with safety or tolerability and we continue to note improvements in patient’s visual acuity.
Dose escalation analysis is an important part of most early stage studies as it will help us to determine the optimal level at which to treat patients and often measure safety and efficacy of various treatment regimens. In addition to accelerating patient enrollment we’ve also added another additional site for the European Clinical Trial, Scotland’s NHS Lothian in Edinburg. We’ll be enrolling patients in EU trial for treating Stargardt’s Macular Dystrophy.
We’ve now treated 13 patients in our Macular Degeneration Program and we have been accelerating our patient enrollment. We currently expect to treat the remaining five patients in the first two cohorts before the end of November though one patient may fall into early December. So our schedule is very full.
This will include the first AMD patient to be treated at Harvard’s Mass Eye and Ear, as well as the first UK’s Stargardt’s patient to be treated in Edinburg. These aggregate treatments will put us halfway through the Phase 1 patient set and clearly we are accelerating the treatments. Observations from the study indicate that the improvements in visual acuity we initially reported in the Lancet have continued for those patients now for more than 15 months.
Across this patient population, we are consistently observing improvements in subjective and objective acuity results. We’ve observed advancement even after immune suppression is ended. We observe clearly biological signals in patients. All of this has happened like I said in these extraordinarily late stage patients with very limited visual acuity and with the low dosing of cells.
Importantly, there have been no significant adverse safety events and especially none that are related to our cells. We continue to be encouraged by these results, and we are looking at ways to treat earlier stage patients, as I mentioned earlier from changing inclusion requirements in this trial.
We continue to invest in our intellectual property. In the third quarter, we announced that the company has been issued a patent in Australia. Patent number 200-532-5753, improved modalities for the treatment of degenerative diseases of the retina.
This patent broadly covered the use of human retinal pigment epithelial cells generated from any pluripotent stem cells in the manufacture of pharmaceutical preparations of RPE cells and the use of those preparations to treat patients with degenerative diseases such as AMD.
The patent covers pharmaceutical formulation made from a variety of pluripotent stem cells, including human embryonic stem cells and human induced pluripotent stem cells. We believe by increasing our patent estate that we continue to create ever greater barriers to competition and increase the likelihood in ultimately successfully licensing and partnering our programs with others.
We’ve also used our experience as first in the clinic with stem cell derived RPE cells to bolster our patent estate with filings directed to what we believe are commercially significant improvements for optimizing RPE cell therapy generally.
I also want to comment on getting our cells listed on the NIH registry. When we met with the NIH in the summer, they had told us that they had nearly completed their review and response to the tens of thousands of comments that had come in on a proposed revision to the stem cell guidelines. It was their expectation that they would be able to promulgate the final revised regulations as effective rules sometime this month hopefully in time for our stem cell applications to be considered at their December advisory board meeting.
With the election now behind us we are awaiting a quick resolution of this matter for both our NAO -9 line as well as our NED-7 line. NED-7 is our embryo sparing enzyno free line. We now have the master cell bank in place for this line and we plan to use it in future clinical trials as well as for the commercial production of our RPE therapy.
There’s been a lot of discussion about the promise of IPS or induced in pluripotent stem cells in the past few weeks. Shinya Yamanyaka won the Nobel Prize for his advancements in developing these cells. Many people assume that ACT is solely an embryonic stem cell company. That is simply not true. Before the end of 2012 we will be submitting preliminary materials to the FDA toward our filing and what we expect to be the first IPS derived tissue in a human clinical trial in the world and we will be using IPS cells to create blood platelets.
Additionally, I want to discuss an editorial that was posted yesterday on the Huffington Post about embryonic stem cells contrasted to adult derived stem cells. That piece was literally filled with inaccuracies about the power of ESCs. The simple fact is, there are many people that believe adult stem cells derived tissue can be equivalent to ESC derived tissue. From the perspective of our research, that is simply not true. The potency and life expectancy of those kind of cells is materially different than ESC derived tissue.
The ability to replicate those cells in scale is completely different from ESC derived tissue. The potential of ESCs of course is not fully defined yet. The market does not however understand that the creation and derivation of embryonic stem cells does not require embryonic destruction. But in the coming years, the market will understand this. Moreover, ACT has created a product through our clinical RPE lot that can be a true off the shelf therapy at a cost point and within global scalability highly similar to or maybe even favorable to the leading monoclonal antibodies available in the market today. We see no such near or intermediate term opportunities anywhere in the adult stem cell market.
I know many of you are curious about our NASDAQ listing. During the second quarter when we filed a proxy seeking shareholder approval for a reverse split in order to facilitate a NASDAQ listing, we received approval to complete such an event prior to year end. As that time approaches I want to reiterate what I said previously. We will pursue a reverse split and a NASDAQ listing at the appropriate time when ACT is in a position of strength.
In order to qualify, we must settle a litigation with our warrant holders in the SEC. With respect to the Warrant holders, we have settled with one of the holders. We continue to negotiate with the remaining investor with a goal of reaching a settlement, but we are not going to make a bad deal for shareholders for the sole reason of listing on the NASDAQ.
Likewise, we look forward to settling with the SEC and resolving the previously disclosed litigation relating to a financing done by the former CEO, who will do so in the context of reaching an appropriate deal for our investors. In the history of ACT, too many times the operating decisions were made as a result of short term needs of the company. We will not do that. We need to make the right decisions for the long term benefit of the company.
In summary, we are very excited by the progress we’re making clinically and in making progress toward our corporate goals for 2012. With a strong balance sheet and the recent additional funding commitment from Lincoln Park, we look forward to reaching many of our discussed goals in the near term.
Now, I would like to open the call for questions.
I’ll take a question first from the web. Please give us some updates on the status of hiring a CFO?
That is a very high priority for us. It is actually our highest priority hire. We actually have a handful of good candidates, some of whom have met the entirety of the senior management team, some of whom are in the process of meeting with certain members of our board of directors. So it is a very high priority for us, but just like with the NASDAQ listing, this is a critical hire for this company and we will do so when we find the exact right candidate that fits with the cultural needs of the company as well as a person that can provide us with the skill set that we’re looking for in a CFO.
Next question from the audio?
Yes, your first question comes from the line of Jim (inaudible). I’m sorry, your first question comes from Jerry Grover.
Hello Gary, how are you doing?
Good, how are you doing?
Good. Two quick questions. One is whatever happened to Roslin cells in Europe I believe it is or in Scotland I believe it was? And the second question was, I know you said something you were attempting to approach human trials for the blood platelets, but wasn’t there a second, for people that have diabetes for opening up the blood vessels so they can get blood and oxygen into the area so they don’t have to have an amputation?
Okay. So, that latter piece was discussing ischemic limb disease?
That involves the hemangioblast. That is a program that we have ongoing, but I think the next I&D filling you will see from us is actually related to Myopia which is another RPE indication. The Myopic Macular Dystrophy indication that we’re going to be filling for occurs when there is extreme distension in the back of the retina putting pressure on and creating fissures within the RPE layer. So that’s the next indication we are pursuing.
That I&D is merely completely written and we expect it to be submitted very soon. I actually was on phone with the person who is working on writing that just before this call to get a final update. So I expect something we’ll be doing pretty quickly. In terms of the platelets, that will be the next I&D that we’ll be filling. We’re talking about a filing there where we’re going to use IPS cells to derive the platelets. We’ve had some very exciting results in the derivation of platelets. One of the advantages to platelets in their derivation is that they’re not myopically active, they do not have a nucleus and so we are not concerned about tumorigenicity there.
But we don’t know quite yet what the FDA will be requiring in the way of pre-clinical study and in information. So we’re putting together pretty hefty package of materials for them to review and we’ll let that shape how we’re going to work that I&D filling but like I said we’ll be submitting materials to the FDA on that before the end of this year.
In terms of Roslin, what we’ve found lately is that people are most interested in using cells that are already been approved by the FDA and have GMT manufacturing and of course that’s our MAO-9 line. So we’re actually talking to Roslin about doing something completely similar, but completely different in a different area and I think we’ll be talking about that again in the next couple of months. We do see a lot of interest though and there are about four or five centers out there that are using our MAO-9 line, which is the same line that we are using for our PE lots to look at a variety of different disease indications.
So there are plenty of license opportunities for us within that. I think we’ll just have to just kind of see where the Roslin piece fits into all that and how much scale we need, how much production of cells we’ll need before we decide how big an opportunity that will be because obviously getting those cells through the MHRA and the FDA will be critical for anybody who wants to bridge from early development research into something clinical and commercial.
You bet. Next question from the operator please.
The next question is from Jim Coon.
Thanks for the update, a lot of things going on. I’m really happy to hear about what’s going on with the NIH. I’m going to keep my fingers crossed for you. A couple of questions, first one real quick, just from the images that were rolling across the screen here in your presentation, you’re showing the Startgardt’s patient there, correct?
Okay. You made some statements there about increased pigmentation and engraftment. Is that holding true also?
Sorry. It’s actually a couple of different Startgardt’s patients just so you’re clear.
Okay, so that kind of goes to my question. Is this holding true, increased pigmentation and engraftment for the AMD patients as well?
Well of course we treated fewer AMD patients than Startgardt’s patients and I think one of the things that we did in our Ophthalmic Advisory Board meeting, was we did some refinements and some sort of best practices changes to some of the ways that the surgical procedures are being done to make them more uniform across all the centers. So we don’t have much in the way of really good pigmentation images from the AMD patients, but we think that that is really a factor more toward the surgical and pre-surgical things that are done as well as the fact that the degree of atrophy within this area of the retina in the AMD population is much more acute than it is in the Stargardt’s patients.
The atrophy in Startgardt’s patients is spread out a little bit more but because AMD is a little bit more centralized in terms of how the atrophy spreads and because of the general aging of the tissue and the advanced stage of the decline of the RPE in these patients, keeping in mind that the RPE is secreting and grooming that brooks membrane layer, we think that that’s really a big factor in this. So because the end is so small, we are only looking at a few AMD patients ,we haven’t seen this kind of pigmentation in the AMD patients. But we think that that is like I said, more surgery specific and degree of atrophy specific than it is any other thing and that’s the consensus that was agreed to by the entirety of the advisory board.
So it’s safe to say then the board still thinks that, and I’m assuming based on the results through Freeman your first patient is still seeing better after 16 months.
Oh yeah and in fact the AMD patients are for the most part reporting increased visual acuity and so forth. It’s just this issue of the pigmentation and how much the cells are managing to persist and grow and get to this kind of rich pigment color that we’re showing you in these fondus photographs. I think that that’s something that we expect to see as we bolster fine surgical procedure and go into earlier stage patients.
As well as the ability to photograph this, this is macroscopic rather than microscopic. So you do have the potential of the AMD patients but you still have a lot of resurfacing, but it doesn’t form as many cell with surround where the cells are attached that you’d visualize it as well by fondus photography as we are seeing in the SMD patients.
Thank you, Matt. Okay that gives me and I think probably a lot of other people answers some questions on what was going on within the eye there with the AMD patients, so thanks guys. But that was actually my one other question if you will. Looking at your energies, so I guess my main question here is the great news on the RPE program in the patients treat. A bunch of them here in November, but what do you tell long term shareholders? I’ve been here a couple of years.
We’re sitting here, PPS annual low right now and RPE trials are going to go Phase 1, hopefully we’ll be moving to Phase 2 but still a long way getting there and per your earlier comments I agree with the strategy of not partnering the RPE program too early. So say it doesn’t partner early and if we went and partnered further into Phase 2, what do you say to long term shareholders here in terms of are there other deals, value adding deals you guys are looking to do to do something for the PPS in the market capital while we wait here for another two or three years for things to play out? And specifically I was asking things around, you know you and Matt made comments about possibly licensing the MAO line, the MAO-9 line or possibly an auto immune indication of the MSC program? Anything you can tell the shareholders here to get us to stay put?
You bet. This is critical. The company has what we perceive to be an extraordinarily valuable Macular Degenerative Program in the RPE here. We also have, and that’s where the vast majority of the corporate resources go to, scaling up the manufacturing, working on end points for Phase 2, managing the clinical trials, that’s where the vast majority of course of the resources of the company go to. By the same token, we have these very promising programs not only in the platelets but also we’ve created mega carrier sites from the same line of cells. Mega-carrier sites are a predecessor cell and they are quite powerful. So we think there are some very important wound healing things that we can do with the Mega-carrier sites and the platelets and we think that can be a very big market and that is absolutely a market that you should expect you will see some kinds of partnering opportunities in and because that’s such a big high scale significant amount of sales needed. It’s a different situation than RPE where we can crank out a million doses out of our little a thousand square foot manufacturing facility.
So the scale is different and I think as a result that’s something you could expect to see there. In terms of the MSCs, we are quite convinced based on our work that the embryonic stem derived MSCs are a world apart from the bone marrow derived MSCs and not only in their replica capacity but also in the factors that are expressed by them. And many of the diseases that are potential indications there are things that require a lot of money and a lot of resources to get into tracks. And so I think you should expect that in the case of most of the indications for the use of MSCs, they are not things that we will be going into ourselves, but we will doing through partnerships, that is in agreement and the like.
I think that there’s a lot there that you can look forward to and you can expect. But by the same token in terms of sitting here saying, “What can we expect and we’re long term holders?” I think one thing you have to understand and appreciate is that people who have been invested in this stock for a long time, by the way including me, I invested in this company for the first time in 2005. This is a Phase 1 Biotech Company and the developments that occur, occur over very long periods of time and so we recognize that people have been patient but this is a long term business. It is not like Apple cranking out a new version of the iPhone. This is a long term project that takes an incredible amount of resources and time.
But if you’re asking me, are there significant value creating hurdles that the company will be anticipating rolling over the course of the next year? You bet. I mean we’ve got a lot of stuff going on. Matt and I are working very hard on this. So there are a lot of potential indications here but we’ve got to do these things in a logical and thoughtful progression because.
Okay and so you’re talking more about, in terms of rolling things out, because in my mind it’s if for the MSC program for example if you got to the point say where even if you did an I&D on that, mind you I’ve been around for 3 years now investing. I&Ds, you’ll get a little bump and then we’re right back down because it’s a long road. So is this something like you said we can, you guys are working on extra getting the deal done where we could get some undiluted funding coming in and kind of give us really a leg up in terms of market cap?
I think the things that we’re talking about doing are things that will prove the credibility of these company signs and I’m not going to comment now on whether or not it’s going to create significant amounts of non-diluted capital to come in. Certainly that would be an objective of ours, but you have to understand that every licensed deal that this company has ever done has been a colossal nightmare. I mean we gave away the rights to the Korean RPE program for like $100,000. The abject failure of this company to plan for the long term and make good decisions for the long term has hemorrhaged value out of this company. We’re just not going to do that. We’re not going to rush into making a deal just because somebody is slashing a little bit of green on the table. That’s just not the right way to do it. We are clearly focused on demonstrating to the investor community the validation of our work and that can mean a variety of different kinds of partnerships.
That can mean non-diluted funding, but whatever deal we make, when we make one will be a well thought out deal and that’s why I’ve turned over the entire board of directors here. That’s why you see that we’re much less promotional in terms of the things that we’re going out. We’re not trying to speed up and acquire some program that’s got the right to go into Phase 2 when it’s science that is irrelevant to the future of this company and irrelevant to the future of regenerative medicine. That’s not what we’re doing. We will be thoughtful, but we understand that the investor community at large and including the cores our shareholders who’ve been very patient with this company over the years are properly rewarded for their patience here. I think that’s all I can really say.
Gary used that wonderful word relevance, in terms of the mistakes we made in the past of not picking relevant programs that we’ve acquired, but the reality is right now in terms of the way that global pharma industry views regenerative medicine, we are extremely relevant to them in so many different ways.
No, that’s great. I think you guys are -- I like what I’m hearing, I like where you’re going. It’s just we all, investors here we talk about things and one of the perceptions out there was that perhaps you’re waiting for the perfect deal where maybe by doing, getting 75% of what you want or 60% of what you want, partnering with one of the MSC auto-immune indications, you could get $25 million coming in, partner up with a big firm or get some credibility and we’re rolling. So it was kind of the debate or is Gary and Matt, are they waiting for the best deal or could we get a deal that’s good enough to get us out and away from $0.06 and up to a more cap worth.
We are very cognizant of the fact that, look we think that at $0.07 we are surprised that the stock has traded to this low level. On the other hand, if I had told you a year ago that we were going to have to issue 600 million shares to a bunch of warrant holders, that we’re going to blow out of the shares for the most part pretty much indiscriminately you might be happy to be at $0.07.
The unfortunate reality is, cleaning up this mess has taken just longer than we would have hoped and we would have loved to settle with the 51st warrant holder and we would have to settle with SEC and we would love to have the Aronson-Gorton matter resolved and cleaned up and put away by now, but the good news is that we’ve looked under every rock and if we think that that’s the last of the rocks so I think we’re really almost there in terms of cleaning the company up and we’re really at a real crossroads now because of the potential of these programs and the fact that a year a change ago, big cap pharma did not have any interest in our programs and that has changed dramatically.
There isn’t a big cap pharma of biotech in the world that has an interest in the ophthalmology area that isn’t completely aware of what’s going on in these trials, hasn’t seen all the data. So we are very proud of that and we see the opportunities here in the MSC and the platelets to be very profound and very value creating and we recognize that the company has never done any kind of partnering deal and the Board which is now a very sophisticated board, the Board is saying look, in 2013 partnering is a high priority and in fact in the executive compensation checklist for 2013, one of the items that is at the top of their list is some form of partnering program.
So it’s important to the management team to do this and it’s important for the creation of value for the shareholders to do this. So our interests are completely aligned with yours.
Well that’s good. Thanks, I really appreciate the detailed response and everything. Gary, can I ask just one thing that you touched on there in terms of almost getting the last of the lawsuits resolved? Because I agree, you guys have made great progress getting them cleaned up, but you still got what? Aronson-Gorton, Camofi and the SEC out there, right?
So I guess where my antenna is really up and probably a lot of other people is what Aronson or Gorton has recently claimed of what they’ve seen in the FCC suit looking at those point 002, I think is their claim and resets in there and what impact that would have in terms of shares going out. Anything you can tell us in terms of your level of confidence or what kind of risk we have there of how that’s going to go?
I cannot discuss anything about level of confidence, but what I can say is that those transactions that Paul Well did, there is more to them than meets the eye obviously. Those are not the true sense of the transactions. There was additional consideration that the company got out of those transactions. But I obviously can’t comment on my level of confidence. I can’t in any way comment on those open litigation matters. Next question please.
Yes, your next question comes from the line of Michael Price.
Gary, I want you to know I’m extremely optimistic with what you folks are doing and I really appreciate your holding this conference call. My question is this, how many patents does ATC have worldwide? And this maybe more difficult to answer and I understand, what’s the potential financial return to ATC shareholders? Could this really come in the multi millions of dollars over the years?
The first question I’ll direct to Matt. How many patents do we have tested, Matt?
Thank you. I was afraid you were going to turn that over to me. Off the top of my head, I don't know the exact number these days. We do have a vast portfolio and the management of it is being done by a couple of different law firms. Off the top of my head, we probably have at a range of 50 or more issued patents worldwide and probably 3 to 4 times that many pending applications. We keenly go through to find what’s relevant, what’s not relevant in terms of what to keep. We’ve also been able to find that applications we filed years ago in areas such as what's now called induced pluripotency have yielded opportunities for us to have controlling patent position. So that’s a long winded way of getting to how many we have and I’ll stick by them and see if Gary will interject the value of them.
And then in terms of the value of our patent portfolio, look, we think that the patent position that we’re creating around just for example the RPE program which has a few issued patents and lots more filings and pending things, we think that that could be the cornerstone of a multibillion dollar per year self therapy program. So, how do you quantify the value of that? I don’t know, but I think we clearly are very optimistic about our intellectual property around this and I think that we’ve got this team of leading vitreoretinal surgeons that are really supportive of us that are key opinion leaders in the vitreoretinal surgical field. It sort of tells you that we’re really on to something good here. But I couldn’t begin to put numbers together for what the value of the patent portfolio is.
That’s fine. I understand that and I’m not going dwell on it. I’m a big time investor with you guys and I continue to be and I have several members of my family as well as relatives who are shareholders of ACT.
Right. Well thank you very much. Next question operator.
Yes, your next question comes from the line of Adam (inaudible).
I had a question, last year at this time was the first time you brought about the China potential GV and you’d returned from your trip there and going back the annual shareholder meeting in April, you had as one of your 2012 corporative objectives finalizing that JV. I’m curious on any updates you can provide on that. And secondly, looking back retrospectively, whether it could have been a little premature in bringing that about a year ago today without having knowledge of the governing factor regarding shipping cells into the country. I was just curious on an update regarding China.
You bet. Well, we actually just got back from China and we continue to be in discussions with our potential partners there, their significant interests. Unfortunately there’s no legal framework right now for us to do this in China. So we are working with the Chinese FDA, the SFDA to try to put together a framework under which we could carry out this program, but subsequent to our meetings there essentially these kinds of therapies became un-approvable.
So that sort of put us on the fence, otherwise we would have certainly had this done by now. But we are spending time. We do think it’s a very fruitful area for us. It’s certainly one of the world’s largest Macular Degeneration markets and the hospital partners that we’re talking to there, you simply cannot believe how large their ophthalmology divisions are. So the opportunity there for us is vast.
We just have to kind of wait out the legal and regulatory framework to be developed for us to be able to carry on our programs there. So I hate to say that it’s a wait and see because we are being proactive. We have a couple of ideas in meeting with some of the regional FDA people. We think we have a couple of potential angles that we could pursue that could make this happen, but things don’t move overnight in China as you can appreciate.
Next question please. Operator?
Yes, your next question comes from Kenny (inaudible).
Oh yeah, hey Gary. Thanks for taking my call. I just want to talk a little bit more and see what you can expand on the lawsuit. It’s a public lawsuit. You could probably into a little about what you’re seeking and also as a former hedge fund guy I can’t help but to remain really cynical about the way the stock is treated and the trading patterns, some of the asker hour block trade’s going through. Might there be incentive by the people that you are in litigation with not to settle in order maybe not to expose various possible naked short positions or other positions that they really wouldn’t want to reconcile.
I ask you that because based on your experience as a hedge fund manager, what do you think is actually going on with the trading pattern of this stock? And I know you’ve commented in the past that we’ve got a shareholder base of 45,000, but it still seems that there’s some games being played and there might be incentive not to settle. Do you see that as a possibility? Thanks for taking the question.
You bet. You are correct. I am a former hedge fund manager and not only me but also different advisors to ACT. I’ve looked at this and being on the bulletin board is an extraordinarily frustrating situation. The SEC doesn’t reserve the highest amount of their man hours available to review complaints about naked shorting and bulletin board stocks.
Truthfully, when you go talk to serious institutional investors about the company, you have to spend the first 10 minutes trying to convince them that the thing isn’t a big sham because so many companies are bulletin board companies whose stock trade for $0.07 looks like scams. So it is very frustrating, I have heard all manner of conspiracy theories both go through my head and be articulated to me by shareholders and outside parties.
We are investigating all of them. But I wouldn’t begin to suggest that any of our counterparties in these lawsuits are engaging in illegal activity. I wouldn’t suggest that and we are operating under the assumption that we are trying to come to resolution with these people. One would expect that settling these lawsuits would be a value creating opportunity for the last two of these counterparties here. I mean obviously the SEC is not getting shares or warrants.
So in terms of Aronson-Gorton and Centercourt, obviously it would take a lot of pressure off the company to have this chapter closed and so we are hopeful that we’ll be able to do that. But like I said in my prepared remarks we are simply not going to rush into a settlement just to get the NASDAQ listing and just to be done because we don’t want to be held for ransom here. We think that we have very colorable arguments in our cases here and we’re working hard to try and settle. So that’s all I can really say. I’ll take one more question please.
Yes, we do have time for one final question from Fred Waldeman.
Gary, how are you doing?
Great thanks, Fred.
Good. As you know I’ve sent the emails to you asking you certain questions and maybe we can get this thing answered. As you know the FDA is letting one of the other stem cell companies who were treating ADMD, they’ve given them a protocol where after four patients, they can then start treating patients that have vision loss of 2200. So since they’re letting them do that, isn’t that what data help accelerate that we can go ahead and do the same thing?
We have a highly detailed and very specific plan that we are filing with the FDA to treat patients with significantly better vision than those we’re treating right now and that plan has been fully endorsed by all of the surgical partners and the OAV as well as the two independent members of the OAV.
I can’t think of any higher testament to the likelihood of success of this than having those people behind us. So I’m obviously not going to disclose what our plan is because I don’t want to get ahead of myself with the FDA, but I think it is safe to say that our objective is identical to what you just described which is to treat earlier stage patients as soon as we can and we’re doing it with like I said with the complete support of the leading minds in the vitreoretinal surgeon world.
Alright, that is all the time we have right now. I really would like to thank everybody for their time and continued support of the company. I desperately tried to respond to non-duplicative questions that are emailed to me or our investor relations team and I will continue to do so. I think the transparency that we have here speaks volumes about this company and we really are trying to put the last of the past behind us so we can look happily at 2013.
So with that I look forward to speaking with you when we report our fourth quarter and full year results early next year. Have a good afternoon. Thank you.
This ends our formal presentation. Thank you for joining us. You may now disconnect.