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MediStem Laboratories (OTC BB: MDSM): The
Nike of Stem Cell Technology
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Today's edition is a "first look"
at an exciting new company. Admittedly, there isn't a wealth of information
on MDSM's technology. Over the next two months a lot more will be
known. On October 12, 2005, Medistem completed a reverse take over,
and became a publicly traded company.
We do know this: MDSM now
possesses the technology to treat patients with Stem Cells, and
plans to begin doing so through an International licensee in the next couple
of months. I've looked at several stem cell opportunities, all of whom
claimed they had the greatest IP on the planet. This company is planning
on actually using their IP to treat patients in the near term. That fact
makes them very unique.
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What
Are Stem Cells? |
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In preparing for this edition, I
did a little research and learned there is a wealth of misinformation and
misconception about what Stem Cells actually are and why they are controversial.
In short, Stem Cells are cells from which other types of cells can develop.
Stem cells are cells capable, by successive divisions, of producing specialized
cells on many different levels.
Stem cells have two important characteristics
that distinguish them. First, they are unspecialized cells that renew themselves
for long periods through cell division. The second is that under certain
physiologic or experimental conditions, they can be induced to become cells
with special functions. They can actually seek out a damaged area, and
morph into the required cells to replace damaged or defective cells.
There are two kinds of stem cells:
Adult and embryonic. Each of us still has stem cells, and they can easily
be extracted from our blood. However, fetal stem cells are far more robust
and active.
Within fetal stem cells there are
controversial and non controversial versions. The controversial stem cells
come from aborted fetuses- it's the moral issue that makes them controversial.
Non controversial stem cells come from the placentas and umbilical chords
of healthy births.
MDSM works only with non controversial
stem cells for both ethical and scientific reasons. On the moral side,
as a public company they want to avoid the issue. On the scientific side,
the company believes it stands a better chance of getting a good result
for patients using stem cells from a healthy birth rather than an unknown.
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Medistem's
Technology |
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MDSM possesses some very interesting
technology. First and foremost, they have technology which allows them
to significantly multiply the number of stem cells in the lab. They can
take a sampling and use it to literally "farm" millions more. There are
no animal proteins involved the process, so the stem cells are replicated
in an untainted manner. MDSM has the ability to turn 1 million stem
cells into upwards of 500 million.
Early treatments indicate it can
require vast quantities of stem cells to get a result for a subject. Therefore,
the ability to reproduce the cells in the lab puts the company in a position
to offer treatments at a reasonable cost.
Today, after the market closed, MSDM
announced it acquired the world wide rights to a cancer therapy using stem
cells. According to the patent application for this new therapy, these
stem cells "have demonstrated anticancer effects by inducing cancer cells
to differentiate into benign, non-malignant cells". The MDSM portfolio
of available stem cell technology is growing.
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The
"Nike" of the Stem Cell World |
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When I think of Nike the phrase
"Just
Do It" is imbedded in my brain. In the stem cell treatment world,
MDSM
has
devised a way to "Just Do It". There is enough clinical data around
to support the thesis that stem cells can be highly effective treatments,
particularly for untreatable neurological disorders such as Parkinson's,
Cerebral Palsy, and strokes. They have proved effective in treating blood
disorders such as Leukemia. These little guys get into your body, go find
the defective cells, and turn into the healthy cells that should be there.
Here's where this story becomes really
interesting. MDSM has a licensee arrangement with the Institute
for Cellular Medicine (ICM) in Costa Rica. ICM is a licensee
of MDSM technology. Within the next two months, ICM will
be open for business in San Juan, Costa Rica, and be treating stroke victims
with Stem Cells. MDSM will provide its technology, and collect licensing
fees for each treatment.
The Costa Rican government views
Stem
Cell therapy as akin to blood transfusions vs viewing the treatment
as a new drug. Therefore, the standard protocols of screening for bacteria,
aids, or any other agent that might taint blood are all that apply.
Once the Costa Rican clinic is operational,
MDSM
will be pursuing other international opportunities, and hopes to license
9 to 12 more clinics worldwide over the course of the next year.
I can't find any other public company
that is pursuing this course. Two possible outcomes could prove valuable
to shareholders: 1. Revenues would be generated in the near term, and 2.
The company will be able to accumulate a wealth of intellectual property
and data on individual patients who have been treated. The data could become
a valuable asset to the company.
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Conclusion |
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Here's a chart showing the price
performance of MDSM since completing the RTO. As you can
see, there is nothing technical we can derive from this chart besides noting
that the stock is at the very low end of its trading range. However, since
it is still virtually unknown and under followed by investors, the price
and volume action don't mean much.
Of far greater interest is the fact
that MDSM possesses the ability to reproduce stem cells in large
enough quantities for treatments at a reasonable cost to the patient. The
company anticipates being in a position to see the treatments in action
within the next two months. Not only will this generate revenues, it will
also generate valuable data.
Market value wise, the bar has been
set fairly high on this one. The former company issued 100 million shares
of stock to acquire MediStem. The founder of MediStem, Dr.
Neil Riordan, now owns 80% of the company. According to one report I have,
there are now 125 million shares I&O, but anecdotally I have heard
estimates that the available free trading shares are in the 9 million range.
With the limited history, the roughly $60 million market value is pricey,
but some of the market caps in the Stem Cell sector are completely off
the charts.
I expect the story to develop over
the next two months. We will have a better idea of the proprietary nature
of their stem cell technology, names for advisory panels, clinics opening
and patients being treated, and a myriad of other unpredictable developments
to explore.
Consider this a "first look" at a
very exciting company in one of the hottest sectors in the market. The
stock has plenty of upside from current levels, especially if the float
is limited. An opening position in the $.50 to $.60 range is suggested,
holding back some capital for market volatility and a maturing story. If
you own the stock in the $.50 to $.60 range, a stop loss at $.40 is suggested
and prudent.
Here is the complete text of today's
press release for your review:
| Press Release Source:
Medistem Laboratories, Inc.
Medistem Acquires
Worldwide Patent Pending Rights to Potential Stem Cell Treatment for a
Variety of Cancers
Wednesday February 1,
4:01 pm ET
Proprietary Stem Cell Technology
has Demonstrated Ability to Trigger Cancer Cells to Behave Like Normal
Cells
SCOTTSDALE, Ariz.--(BUSINESS
WIRE)--Feb. 1, 2006--Medistem Laboratories, Inc. (OTCBB:MDSM - News; FWB:S2U),
committed to the ethical development of next-generation medical therapies
from non-controversial adult stem cell sources, announced it has acquired
exclusive worldwide rights to a potential treatment for cancer that uses
stem cells to reprogram malignant cells to behave like normal cells.
The patent pending technology
has the potential to lead to the development of anticancer treatments for
a variety of the most serious and widespread cancers. The invention was
discovered by Dr. Thomas Ichim, a Medistem consultant.
"This new patent pending
strengthens Medistem's intellectual property portfolio," said Neil Riordan,
Ph.D., CEO of Medistem. "It is an example of the promise of stem cell-based
technology to enable the creation of medical therapies that could revolutionize
the treatment of cancer and other serious medical conditions."
The technology described
in the patent application focuses on stem cell therapies that have demonstrated
anticancer effects by inducing cancer cells to differentiate into benign,
non-malignant cells. The patent pending pertains specifically to the use
of stem cells derived from adult sources, such as umbilical cords and placentas
from healthy, full-term births.
Medistem believes the
newly acquired patent pending may provide doctors and cancer patients with
an entirely new avenue of treatment options. "While chemotherapy and radiation
therapy induce severe side effects through collateral damage to non-cancerous
cells and organs, the present invention utilizes the ability of cancer
cells to be 'reprogrammed' into benign, non-cancerous progeny," said Dr.
Ichim.
Recently published research
conducted at Northwestern University with federally approved human embryonic
stem cell lines has demonstrated the ability of stem cells to successfully
reprogram malignant melanoma cells into cells that behave like normal skin
cells. This work adds credence to the newly acquired patent pending.
About Medistem Laboratories,
Inc.
Medistem Laboratories
is an innovative biotechnology company committed to the creation and commercialization
of advanced medical therapies based on non-controversial adult stem cells.
Medistem's corporate mission is to transform these stem cells into valuable
medical treatments. The Company intends to create these treatments from
adult stem cells derived from muscle, bone marrow and fat of adult patients
seeking treatment, as well as from full-term, healthy placentas and umbilical
cords, but not the controversial embryonic or fetal stem cells that are
the focus of ethical and moral debates in some communities. The Company's
business strategy calls for the establishment of a series of clinics and
laboratories around the world to deliver unprecedented, next-generation
cell therapies to help millions of patients. Initial development and treatment
focus will use proprietary technology and cells sourced from umbilical
cords, fat, bone marrow, and muscle for advanced treatment of cerebral
palsy, stroke, cardiovascular disease and orthopedic diseases, primarily
for the international marketplace. Additional applications, ultimately
be targeted to the treatment of neurological disorders such as Parkinson's,
Alzheimer's and certain types of cancer. Medistem believes it may hold
a substantial competitive edge in the worldwide emerging market for stem
cell-sourced medical solutions, positioning it to become a leading global
provider of stem cell treatments on a fee-for-service basis, while accumulating
intellectual property based on clinical and laboratory findings. For more
information, please visit http://www.trilogy-capital.com/tcp/medistem/.
To read or download Medistem's Investor Fact Sheet, please visit http://www.trilogy-capital.com/tcp/medistem/factsheet.html.
To obtain daily and historical Company stock quote data, and recent Company
news releases, visit http://www.trilogy-capital.com/tcp/medistem/quote.html.
Medistem is traded on the Frankfurt, Germany, stock exchange under the
symbol S2U.
Cautionary Statement
This document does not
constitute an offer to sell or a solicitation of an offer to buy any of
our securities. This document contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. The
forward looking statements contained herein can be identified by the use
of forward-looking terminology such as "believes," "expects," "may," "will,"
"should," or "anticipates," or the negative thereof or other variations
thereon or comparable terminology, or by discussions of strategy that involve
risks and uncertainties. We wish to caution the reader that these forward-looking
statements that are not historical facts, are only predictions. No assurances
can be given that the future results indicated, whether expressed or implied,
will be achieved.
Contact:
Medistem Laboratories,
Inc.
Neil Riordan, Ph.D,
954-727-3662
riordan@medisteminc.com
Source: Medistem Laboratories,
Inc. |
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Comments in the BLOG
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Between KAL, HDY, DXCM,
and TLPE it's been a big picnic lately. However, a black cloud hovered
over the picnic this morning in the form of a major negative event for
Dermisonics
(OTC BB: DMSI). There is a new BLOG covering the event. In the
microcap arena, sometimes things don't go your way. If you have an interest,
read the BLOG.
To use the BLOG, simply go
to the home page at www.otcjournal.com
- the BLOG will scroll down automatically on the right side of your
screen. The most current journal entries appear in the middle of your screen.
Check back frequently for updates particularly when stocks are moving to
overbought or oversold levels or in volatile markets. Your questions and
postings do not automatically appear, so don't bother posting the same
question multiple times. I personally go through to moderate and respond
to every reasonable question.
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