Stem Cell Stock Review, Monday, 03/23/2015.
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1. Initiating Coverage on Accurexa (ACXA) $2.50.
1. Initiating Coverage on Accurexa (ACXA) $2.50.
201 Spear Street
San Francisco, CA 94105
"Drug delivery remains a major issue in brain tumor treatment…treatment failures can be expected on the basis of inadequate drug delivery alone, regardless of the effectiveness of the drug." Mir J. Ali MD, Northwestern University Medical School.
"Failures expected, regardless of the effectiveness of the drug?"
Them's some fighting words to the billion dollar brain cancer drug industry. But it is what it is and we've found the company that believes it has come up with a bigger and better trap (a device called BranchPoint) to deliver drugs to the brain - that could become the new standard for brain drug delivery - and make tens, if not hundreds of millions along the way if they are successful at doing it.
This very exciting (some might say butt-kicking) medical device, which was developed at the UC San Francisco and initially funded with a $1.8 million grant from California's Institute for Regenerative Medicine (CIRM) and "rolled" into a publicly traded shell last summer - enabling investors (should they choose) to participate.
Photo of BranchPoint: www.accurexa.com/technology.html
CIRM, if you're unfamiliar is the nation's model of technology funding for "society's benefit" created by the kindness of the heavily taxed citizens of California, when they voted Proposition 71 though. The passage allocated $3 billion to establish the CIRM and created a biotech (stem cell) research hub rivaling Silicon Valley. So a shout out to California's taxpayers.
This is an enticing, yet simple story to follow.
Failures expected: Way back in 2006, Dr Mir from Northwestern University Medical School took task to the recurring question "Is treatment failure of the brain's malignant tumors due to inadequate delivery or ineffective drugs?" Without going into details (see link to follow), he concluded that treatment failures are likely due to high interstitial fluid pressure. Because the infusion rates being used in the treatment of human brain tumors are low and the tumors are larger, treatment failures can be expected on the basis of inadequate drug delivery alone, regardless of the effectiveness of the drug.
What this means to the stem cell industry, is if the delivery system fails - we risk total clinical trial failures - even if the biological reaction was valid. We cannot (should not) risk a $100 million clinical trail process to a $2.00 syringe. That's clearly unacceptable. End of that story. And beginning of Accurexa story.
Dr. Mir's study:
Failures averted: Fast forward to 2010 when Dr. Daniel Lim, a genius neurosurgeon and assistant professor at the University of California, San Francisco, who regularly uses a surgical device (a regular syringe with a steel needle developed in 1986) to deliver potentially life-changing treatments into patients' brains comes up with self described "crazy sounding idea" to improve the delivery of therapeutics (aka drugs) to the brain. It was after a using the standard device during a study of an experimental stem cell therapy at UCSF, Lim thought "...there must be a better way."
In a San Francisco Business Journal article Lim stated, "...every time Parkinson's disease patients, for example, need cells transplanted into the brain, some must endure upwards of 10 injections because implanted cells don't spread through brain tissue. Every penetration, risks setting off bleeding in the brain."
"Every time you put a needle into the brain, you run the risk of a hemorrhage and raise the risk of unwanted effects," says Ian Duncan, a neuroscientist at the University of Wisconsin-Madison.
"As experimental stem cell treatments progress, it only makes sense to use a tool built to deliver those cells rather than one designed nearly three decades ago. This could cut down on clinical trial failures at a critical time for scientists developing those treatments."
So what does he do?
Lim sketched his new device and turned it over to a group of UC Berkeley engineering students, who created a prototype. Then he won a $1.8 million grant in 2010 from the California Institute for Regenerative Medicine, the state's stem cell research funding organization, to push it through preclinical testing. Remember this "funding" point, because while our upcoming report will talk a lot about the deliver of stem cells to the brain (after-all that's where the until funding came from) we believe that the BranchPoint needle platform will be developed to deliver much more than just stem cells.
Not unlike current delivery methods, Lim's instrument sits in a massive frame that is mounted on the head of a patient. A hole is drilled in the skull and doctors deliver cells or direct brain stimulation or other treatments to the brain.
But instead of drilling multiple holes in the skull, the Accurexa device allows doctors to use a single entry point. They then can insert the hollowed, drug-bearing "plunger" - the diameter of hair - multiple times to multiple locations delivering treatments to as much as six locations in an hour.
Unlike other needles used for cell therapies, Lim's device contains no ferromagnetic metals and so is compatible with MRI. The imaging enables researchers to monitor patients for signs of hemorrhaging and to combine cell therapy with other techniques, such as depositing electrodes for deep brain stimulation, an experimental therapy for Parkinson's disease.
In fact, that's part of the beauty of the device: It could deliver cells, an electrode and gene therapy in a single session.
"As a clinician, I tried to think it all the way through," Lim said. Ultimately, he said, the device could convince some drug developers to look anew at experimental treatments that had been developed as oral drugs but which may be hundreds of times more effective when delivered directly into the brain.
"Up till now," Ivar Mendez, a neurosurgeon at Dalhousie University in Halifax, Canada says, "The way the injection has been done was with very primitive systems."
In our view, the Accurexa was essentially born, when they announced that they entered into their exclusive letter of intent (LOI) with the University of California, SF in regards to the exclusive global licensing of the BranchPoint device intended for the delivery of stem cells into the human brain. The LOI in July of 2014 became an actual license agreement in September of 2015.
Prior to the UCSF agreement, Accurexa's primary mission was to usher through technology licensed from the University of Arkansas for Medical Sciences, focused on detecting metastatic cancer cells. That technology could take another three or four years to win FDA approval, whereas Accurexa plans the filing of its 510(k) marketing clearance application this summer or fall, before its "small business status" qualification status, which was granted by the FDA last week expires in September of this year.
The agreement came after Lim was introduced to George Yu, the president and CEO of Accurexa. George whose background includes stints at Bain & Company, with small-cap hedge and venture capital funds and in investment banking at Lehman Brothers. Mr. Yu holds a Medical Doctor Degree from the University of Tuebingen, Germany, and a Master in Business Administration in Finance and Economics from Columbia Business School.
An equally impressive resume is that of board member, Anchie Kuo. Dr. Kuo was a Managing Partner and co-Founder of Genaissance Capital Group, a top quartile healthcare focused hedge fund. He was also Managing Director of BankAmerica Ventures (Scale Ventures Partners), a venture group that managed approximately $1.2 billion of assets. He is a physician, venture capitalist and entrepreneur with over 25 years of experience in the healthcare industry, serving on the board of over 15 companies.
In mid-January, Lim Development was awarded a two-year contract with the company for $200,000 which may be converted into stock at $0.20 a share or one million shares. So he has skin in the game to see this through to commercialization. If this works to dream status and the stock goes to $20 four or five years from now, he'll be worth $20 million, a fair reward for his genius - and something we can all benefit from, if it results in a safer more effective delivery of drugs to the brain.
Accurexa submitted its application for Small Business qualification to the FDA in preparation of the filing of our 510(k) marketing clearance application last week.
FDA Approves Accurexa's Small Business Qualification:
Great Technology Video (only nine minutes):
Devices Aim to Deliver on Stem-Cell Therapies.
It's Not Brain Surgery - Well it is for Accurexa and Dr. Daniel Lim.
University of California Breaks out of the Lab.
Cell Transplantation Into the Brain With Radially Branched Deployment
"New To The Street" to Air First of a 6 Part Series Featuring Accurexa.
This is the first installment of a six part series set to be aired nationwide to over 95 million homes on the History Channel.
Basic Financial Statistics.
Shares outstanding, 5.7 million as of 9/30/2014. Market value @ $2.50 - $14.2 million.
Cash & Equivalents, $748,000 (calling all investment bankers)
Of course they're a client.
This release contains certain "forward-looking statements" relating to the business of the Company. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding: the ability of the Company to successfully develop and commercialize novel neurological therapies based on its BranchPoint device, ACX-31 and execute its business plan; the business strategy, plans, and objectives of the Company; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions and involve known and unknown risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume any duty to update these forward-looking statements. Institutional Analyst Inc., publisher of the Stem Cell Stock Review has been compensated with twenty-thousand shares for IR services including providing ongoing coverage of their progress and reporting in both the Biotech and Stem Cell Stock Review.
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