Acting with god working on our side

How’s this for a combination of innovation and partnership: a stem cell company not only making a commitment to investing in China but also winning the backing and support of the Vatican. As combinations go, that’s pretty unique.

Stem cell research is a fast-moving area that is increasingly forging its own niche within the healthcare sector. NeoStem has, in a very short time, garnered the backing of Goldman Small Cap Research Division.

“We view NeoStem,” said Goldman recently, “as a stock that offers a rare opportunity to participate in two of the most exciting and fastest-growing segments in all of the health care space: stem cells and the domestic pharmaceutical industry in China.”

Who, what, why?
But let’s rewind briefly: what is NeoStem? Very simply, it’s a pioneer in the collection and storage of adult stem cells and a leader in stem cell therapy development. “We specialise in adult stem cell technology,” says NeoStem CEO Robin Smith. “Currently there are almost 3,000 clinical trials studying the impact of using stem cells to repair tissue. Stem cells have been used for 30 years in the treatment of certain cancer and blood disorders. What’s exciting is the potential to use stem cell technology for things like heart disease, MS, lupus and macular degeneration.”

And that’s likely to be just the tip of the iceberg. Crucially, this technology has the support of the Vatican – a major milestone in overcoming ethical concerns about the technology. “Through educational initiatives with NeoStem,” Reverend Tomasz Trafny of the Pontifical Council for Culture recently told News∞Medical.net, “and sponsorship of scientific research programmes involving cutting∞edge adult stem cell science which does not hurt human life, we come one step closer to a breakthrough that can relieve needless human suffering.”

Trafny and the Vatican are particularly excited about NeoStem’s VSEL™ technology and believe that mutual collaboration between NeoStem and the Pontifical Council for Culture will lead to significant financial commitment to support it.

The power of two
Clearly this company is going places fast. The shift towards China is a major strategy shift that bodes well for the long term. “Stem Cells are governed by different regulatory environments and we want to encourage, support and advance stem cell therapy in all of them,” says Dr. Smith. “So by putting the two cultures together, we’re hoping to move adult stem cell therapy forward more quickly and more cost-effectively.”

“NeoStem,” says Dr. Smith, “is a terrific platform to build cutting∞edge cellular companies and Neostem will be looking at new technologies as well as acquisitions of revenue∞generating companies in the stem cell space.”

Plus there’s its impressive sales growth. NeoStem saw sales growth of a staggering 34,977.3 percent during the last fiscal year. It reported more than $35m in sales during the first half of 2010 and is expected to report more than $75m in sales this year. Impressive.

Crown jewels
But let’s dig deeper into this company. At the heart of NeoStem’s R&D lies its crown jewels: VSEL™ technology.  Recent biological research supports the notion that stem cells can play an increasingly important role in supporting the body after attack.

The significance of VSEL™ technology is that each person has a population of very primitive “embryonic like” stem cells that can be harvested for potential therapeutic use says Robin Smith. “This is possible because very small embryonic like stem cells are also released into the peripheral blood by using an FDA approved drug, which functions as a mobilising agent.”

VSEL™ are thought to share some properties with embryonic stem cells – and could be used, it’s increasingly thought, in cardiac repair for example, not to mention a huge range of other uses. Retinal degenerative diseases such as age-related macular degeneration (AMD) and Glaucoma are other examples of how VSEL™ technology could help repair tissue in the eye.

Investor support
Plainly huge strides have been made by a company that commenced trading in 2006 with just $3.75m of backing support. But support for NeoStem has been encouragingly solid, despite the worst the credit crunch could throw at it.

In 2007 and 2008 it raised a further $10.25m, listing on the US stock exchange and licensing its VSEL™ technology from the University of Louisville. Operations in China followed in 2009, helped by a partnership with Enhance Biomedical – a treatment network in the People’s Republic of China and Taiwan for stem cell therapeutics. It also managed to raise another $16m and was awarded a National Institutes Health Grant to study stem cell therapy for bone defects. A further $13m was raised this year.

“We’re growing very quickly, both abroad and in the US,” affirms Robin Smith. “This really is just the beginning for us and investors will see a lot more activity in the future.”

VSEL technology in depth
Very small embryonic like stem cells have many physical characteristics typically found in embryonic stem cells, including the ability to differentiate into specialised cells and tissue throughout the body, and which have the potential to improve the diagnosis and treatment of many common diseases and conditions, including neural, cardiac and ophthalmic disorders, as well as to stimulate bone regeneration and wound healing. The significance of VSEL™ technology is that each person has a population of very primitive embryonic-like stem cells that can be harvested for potential therapeutic use. This is possible because very small embryonic like stem cells are also released into the peripheral blood by using FDA approved drugs, which function as a mobilising agent.

On the right side of god?
Certainly the Vatican tie-up is a fascinating venture. NeoStem and The Vatican are planning a range of collaborative activities with the goal of increasing scientific research on adult stem cells. The field of regenerative medicine and the cultural relevance of such a shift in potential medical treatment options also brings to the table, of course, huge theological and ethical issues. But NeoStem and the Vatican have both agreed that examining the issues together has to be the way forward.

It’s hardly an area short of controversy. A senior Vatican official recently criticised the US Food and Drug administration for allowing clinical trials using stem cells derived from human embryos. However the Catholic Church does support stem cell use where extracted from the umbilical cord or other parts of the body. And it knows it would rather be part of the debate, rather than stand outside it – hence the joint initiative with NeoStem to expand research of adult stem cell therapies.

However NeoStem’s direction appears to be strongly supported by the Obama administration. The US state-funded stem cell institute is shortly to increase the amount of taxpayer dollars it invests in the technology. If definite research results can be demonstrated, then even more taxpayer dollars will flow. A recent decision by the US government to restrict funding for embryonic stem cell research should differentiate the company further.

***
Further information: www.neostem.com