We are a regenerative medicine company (a medical area that focuses on developing therapies that regenerate damaged or diseased tissues or organs) that incorporated in 1989 and focuses on the clinical development of autologous cell products (cells collected from a patient and returned to that same patient) for the repair or regeneration of multiple human tissues, based on our proprietary Tissue Repair Cell (TRC) technology. Our preclinical and clinical product development programs utilize patient-derived bone marrow stem and early progenitor cell populations, and are being investigated for their ability to aid in the regeneration of tissues such as cardiac, vascular and bone. TRC-based products have been used in over 350 patients, and are currently in the following stages of development:
Cardiac regeneration — Cardiac Repair Cells (CRCs):
Dilated cardiomyopathy (DCM) (severe heart failure):
U.S.: Phase II IMPACT-DCM clinical trial began treating patients in November 2008; to date, 21 patients enrolled in trial and all five clinical sites are open for patient enrollment (Methodist DeBakey Heart &Vascular Center, Houston, TX, Baylor University Medical Center, Dallas, TX, The University of Utah School of Medicine, Salt Lake City, UT, Cleveland Clinic Heart & Vascular Institute, Cleveland, OH, and Emory University Hospital Midtown, Atlanta, GA); Orphan Drug Designation from the FDA for use in treatment of DCM; all 40 patients expected to be enrolled by December 31, 2009, and a report of preliminary interim data expected once all patients have completed 6 month follow-up visits
Germany: Encouraging data reported April 2008 from compassionate use treatment in two patients which provided supporting information considered critical to success of U.S. Phase II IMPACT-DCM IND application.
Vascular regeneration — Vascular Repair Cells (VRCs):
Critical limb ischemia (CLI):
U.S.: Phase IIb RESTORE-CLI clinical trial has enrolled 73 patients to date; interim analysis of clinical data expected to occur during the 4th quarter of calendar year 2009; patient enrollment continues
Germany: Phase I/II investigator-sponsored clinical trial completed enrollment and patient follow-up ongoing; positive interim data reported October 2007; investigator report of final data expected during the second half of calendar year 2009
Spain: 2 compassionate use cases have been treated with AEMPS (Spanish Drug Agency) approval to date
Bone regeneration — Bone Repair Cells (BRCs):
Osteonecrosis of the femoral head:
U.S.: Phase III ON-CORE clinical trial active with 7 patients enrolled; no longer enrolling additional patients; Orphan Drug Designation from the FDA for use in treatment of osteonecrosis of the femoral head
Spain: Enrollment completed with 9 hips (7 patients treated); 24 month follow-up for all patients ongoing
Germany: Encouraging data reported October 2007 from compassionate use treatment cases; follow-up ongoing
Non-union fractures:
U.S.: Final Phase I/II clinical study report issued in December 2008; TRC product showed an excellent safety profile and the efficacy data indicated a high non-union healing rate, with bridging callus formation rates reported in over 90% of patients 12 months post-surgery compared to 50% historically
Spain: Final 24-month follow-up complete for 10-patient investigator-sponsored Phase II clinical trial; the final investigator report indicates that 7 of 10 cases resulted in healing at 24 months
Spain: 9 compassionate use cases of non-union long bone fracture have been treated; follow-up ongoing
Maxillofacial:
U.S.: Investigator-sponsored controlled study in the treatment of alveolar bone defects fully enrolled; follow-up ongoing
Spain: 3 patients with craniofacial defects have been treated under compassionate use; early bone formation resulted in healing, including peripheral nerve regeneration or repair, new skin formation and proliferation in blood vessels in ischemic areas
Our platform TRC technology is based on 1) autologous cell products, which are a unique cell mixture containing large numbers of stem and early progenitor cells produced outside of the body from a small amount of bone marrow taken from the patient, and 2) the ability to produce these products in an automated process that meets Good Manufacturing Practice (GMP) guidelines.
We have developed a manufacturing system to produce human cells for clinical use. This automated cell manufacturing system enables the “single-pass perfusion” cell culture process. Single-pass perfusion is our patented manufacturing technology for growing large numbers of human cells. The cellular components of TRC-based products include adult stem and early progenitor cell populations which are capable of forming tissues such as cardiac, vascular, bone, neural, and the hematopoietic and immune system.
All TRC-based products are produced using our cell manufacturing system in centralized manufacturing facilities. We have one manufacturing site in the U.S. located at our headquarters in Ann Arbor, MI, and two contract facilities in the EU located in Stuttgart, Germany (Fraunhofer Institute for Interfacial Engineering and Biotechnology) and Bad Oeynhausen, Germany (Institute of Laboratory and Transfusion Medicine at the Heart Center).
Since our inception, we have been in the development stage and engaged in research and product development, conducted principally on our own behalf. Our initial business plan was to pursue our targeted markets by commercializing our cell manufacturing system and supplies; however, since 2004 we have phased out our marketing efforts promoting the cell manufacturing system as a commercial product. Currently, we have minimal product sales consisting of manufacturing supplies to academic collaborators in the U.S. and cell-based products to EU-based physicians.
We are currently focused on utilizing our TRC technology to produce autologous cell-based products for use in regenerative medicine applications. At such time as we satisfy applicable regulatory approval requirements, we expect the sales of our TRC-based products to constitute nearly all of our product sales revenues. We do not expect to generate positive cash flows from our consolidated operations for at least the next several years and then only if significant TRC-based cell product sales commence. Until that time, we expect that our revenue sources from our current activities will consist of only minor sales of our cell products and manufacturing supplies to our academic collaborators, grant revenue, research funding and potential licensing fees or other financial support from potential future corporate collaborators.
In May 2008, we reprioritized our clinical development programs to focus primarily on cardiovascular applications, including dilated cardiomyopathy and critical limb ischemia. We have discontinued further patient enrollment into our Phase III ON-CORE (osteonecrosis) bone regeneration trial. We do not anticipate initiating new clinical bone activity, reactivating the Phase III ON-CORE trial or initiating formal clinical trials in the neural area without additional financial resources. While the decision to reprioritize was driven by economic factors, the clinical programs were prioritized based on anticipated time to market and the perceived relative clinical and market potential. We are also exploring the possibility of entering into complementary regenerative medicine business activities, whether through acquisition or otherwise. In addition to reprioritizing our development and clinical programs, we also made reductions in our staff and reduced our overhead expenses.
We expect that we will need to raise significant additional funds or pursue strategic transactions or other strategic alternatives in order to complete our product development programs, complete clinical trials needed to market our products, and commercialize our products. To date, we have financed our operations primarily through public and private sales of our equity securities, and we expect to continue to seek to obtain the required capital in a similar manner. As a development stage company, we have never been profitable and do not anticipate having net income unless and until significant product sales commence. With respect to our current activities, this is not likely to occur until we obtain significant additional funding, complete the required clinical trials for regulatory approvals, and receive the necessary approvals to market our products. Through June 30, 2009, we have accumulated a net loss of approximately $195 million. We cannot provide any assurance that we will be able to achieve profitability on a sustained basis, if at all, obtain the required funding, obtain the required regulatory approvals, or complete additional corporate partnering or acquisition transactions.
We believe, based on our current projections of cash utilization (which is expected to average approximately $1.4 million per month) available cash and cash equivalents on hand as of June 30, 2009 (which equaled approximately $17 million) are adequate to finance our planned operations at least until June 30, 2010. However, we will need to raise a significant amount of additional funds in order to complete our product development programs, complete clinical trials needed to market our products, and commercialize these products. We cannot be certain that such funding will be available on favorable terms, if at all. Some of the factors that will impact our ability to raise additional capital and our overall success include: the rate and degree of progress of our product development, the rate of regulatory approval to proceed with clinical trial programs, the level of success achieved in clinical trials, fulfillment of the requirements for marketing authorization from regulatory bodies in the U.S., EU and other countries, the liquidity and market volatility of our equity securities, regulatory and manufacturing requirements and uncertainties, technological developments by competitors, the U.S. economic conditions regarding the availability of investment capital and other factors. If we cannot raise such funds, we may not be able to develop or enhance products, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements, which would likely have a material adverse impact on our business, financial condition and results of operations.
Clinical Development
Currently, our clinical development programs are focused primarily on the utilization of our TRC technology for cardiac and vascular regeneration. An improved formulation for storage of our TRC-based cell product has been developed to extend the shelf-life of our product. The extended shelf-life provides additional flexibility in transport of the product and in scheduling of patient administration. The extended shelf-life product has been qualified and implemented at our centralized manufacturing sites in the U.S. and EU. It is used for all cardiac and vascular regeneration clinical trials in the U.S. and is available for supply to all active EU treatment sites.
In May 2008, we reprioritized our clinical development programs to focus on cardiovascular applications, including our Phase II IMPACT-DCM (dilated cardiomyopathy) trial and our Phase IIb RESTORE-CLI (critical limb ischemia) trial. We have discontinued further patient enrollment into our Phase III ON-CORE (osteonecrosis) bone regeneration trial. We do not anticipate initiating new clinical bone activity, reactivating the Phase III ON-CORE trial or initiating formal clinical trials in the neural area without additional financial resources. While the decision to reprioritize was driven by economic factors, the clinical programs were prioritized based on anticipated time to market and the perceived relative clinical and market potential.
The preclinical data for our TRC-based products have shown that the large numbers of the stem and early progenitor cells obtained through application of our TRC technology can develop into a variety of tissues including blood, bone, vascular and fat, as well as the potential to form tissues characteristic of certain internal organs. We have demonstrated in the laboratory that TRC-based products can differentiate into both endothelial (blood vessel) and osteoblast (bone cell) lineages. Based on these preclinical observations, clinical trials have been initiated in the U.S. and European Union (EU) for cardiac tissue regeneration in patients with dilated cardiomyopathy, for vascular tissue regeneration in patients with critical limb ischemia and for bone regeneration in patients with osteonecrosis of the femoral head and severe long bone fractures.
The preliminary results of our current clinical trials may not be indicative of results that will be obtained from subsequent patients in those trials or from future clinical trials. Further, our future clinical trials may not be successful, and we may not be able to obtain the required Biologic License Application (BLA) registration in the U.S. or required foreign regulatory approvals for our TRC-based products in a timely fashion, or at all.