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It's About Time, IND Filed (NASDAQ:ACTC.OB)

Advanced Cell Technology (ACTC.OB or ACT) filed an Investigational New Drug (NYSE:IND) application on 11/18/09 to conduct a PI/II trial using hESCs to treat a genetic eye disease.

  • The “proposed” trial aims to treat patients with Stargardt’s Macular Dystrophy (SMD);  a genetic eye disease for which there is currently – NO – treatment and one of the most common causes of “juvenile” blindness,
  • The disease results in the degeneration of the retinal pigment epithelium (RPE) cells that support the photoreceptors needed for vision — which in turn causes the degeneration of the photoreceptors and leads to vision impairment.

Bottom Line: Referencing our post on 10/27/09;  ACTC.OB “proposes” to transplant hESCs that have been “differentiated” into retinal pigment epithelial cells into SMD patients in hopes of improving visual acuity. Previous work at ACT has shown dramatic improvement in the visual performance of animal models that received implants of these differentiated RPE cells according. Furthermore, they had found no adverse effects (such as teratomas) in hundreds of treated animals and the cells are “almost 100%  RPE”, meaning there are virtually no undifferentiated cells that “could” potentially behave “differently” after implantation.

  • The treatment for eye disease uses stem cells to recreate a “type of cell” in the retina that supports the photoreceptors needed for vision. These cells form the retinal pigment epithelium – which keep the light-sensing cells of the retina alive – which are often the first to die off in macular degeneration, which in turn leads to loss of vision,
  • This trial will involve a total of 12 patients at 3 clinical sites,
  • Given the “similar” pathology between Stargardt’s Macular Dystrophy and Age-related Macular Degeneration (NASDAQ:AMD); ACTC.OB “hopes” to file “another” IND with the FDA for Retinal Pigment Epithelium (RPE) cell program for the treatment of various eye diseases,
  • “If and when” the FDA signs off on ACT’s trial, it will be only the 2nd stem cell study to be approved in the US. ACT’s P I/II trial in human would enroll 12 subjects to test the “proposed” therapy,
  • Reiterating, AMD represents a “tremendous” market opportunity given the size of the patient population and the lack of treatment alternatives. Diseases of the eye affect more than 30 M people worldwide and represent a $20+B market. While existing therapies “only” treat the condition, are not curative but palliative and do not regenerate cells of the macula that have been damaged.  Additionally, existing therapies only treat Wet AMD not Dry AMD hence leaving a significant unmet need for an effective treatment for the 90% of AMD patients who have the dry variety,
  • SMD and AMD are clearly “target markets”; there are some 200 different types of retinal diseases that ACTC might/could find an Orphan Drug Designation,
  • ACT closed on 11/16/09, 3 private placements with institutional, accredited investors while also entering into amended agreements with an “existing” investor receiving $15 M. The 3 investments provide are sufficient to fund general operations and working capital for the next 2 years to support the RPE program in addition to other “certain” pre-clinical programs; 1 new joint venture formed with a “Korean” biotech has contributed a non-dilution investment of $400 K,
  • ACT trades at $0.108 with a market cap of $74.96 M, an enterprise value of $99.87 M but, the shares outstanding are “HUGE” at 695.05 M  (love to digest the fully diluted value from the latest financings) with a float of 690.9 M,
  • For ACT to “truly” become a viable and sustainable share price; they MUST resolve their capital structure to reflect the fair, true and comparable stock pricing,
  • Understand, Geron’s (NASDAQ:GERN) study of stem cell treatment for spinal cord injury involving hESCs has been on “hold” (while the FDA evaluates safety data in animal models) since August and doesn’t expect to resume until Q3/10,
  • ACT gained 8% on 2x average volume following the announcement last week; but, shares only gained $0.008,
  • Look for short gains, the IND approval “should/could” add $0.10  ”maybe” $0.15 to the share price and a 2nd IND filing and approval “would” drive the “current” valuation higher – an Orphan Drug Designation ruling  is a still a “wild card”; incrementally – my  conservative “guess” without a model is $0.35 to $0.40 post the 2nd IND,
  • ACT is still a “story” stock, entirely dependent on PR (from an IND filings) to support its share price (marginal); as,  news flow is always good for an individual company and the sector,
  • ACTC.OB has been in, out and “so” close to collapsing that it NEEDS a clinical success;  filings are nice but acceptance is what matters – time will tell!  Note, this technology is far newer than stem cell technology and many are not entirely sure it is safe,

For the record, re: Reg. AC, Analyst Certification: I, Henry W. McCusker, hereby certify that all the views expressed in this blog accurately reflect my personal views about ACTC.OB or companies and its or their securities.