The need to fight illness, injury or disease has resulted in a proliferation of medical devices, drugs and therapies designed to alleviate symptoms or cure diseases. Nowhere has the battle been more apparent than in our fight against cancer. Even though we’ve made great progress over the last decades fighting it in many of its manifestations, a cancer diagnosis strikes fear into the victim as one must begin the often long and grueling physical, emotional, philosophical, and financial battle that would now loom. Like any other area of technology, success builds upon success and can itself create additional needs as any invention needs improvement in some form or fashion. For our fight with cancer, the improvements desired commonly revolve around the seemingly formidable battle of efficacy versus safety for the treatment regimen. With many of our cancer treatment regimens, and most notably chemotherapy and radiotherapy, the more effective treatments are often the most toxic to the patients’ bodies. Conversely, the safest chemotherapy agents or radiotherapy sessions are often the least effective at treating cancer. However, as denoted above, success breeds success. Companies with novel treatment options continue to emerge trying to take the best of many existing treatments and utilize them via their own platforms to create more hope for patients and healthcare professionals in great need of more weapons in their arsenals. Following are summaries of companies and their platforms that not only hope to contribute to the ongoing battle against cancer, but hope to benefit in the process with highly-marketable products that will grow their bottom lines and reward investors who are wise enough, patient enough and lucky enough to be part of their successes.

Immunotherapy: Response to the Need for a Programmed Immune Response Against Cancer Recurrence

Galena Biopharma (GALE) has had an eventful year behind it beginning with its separation from RXi Pharmaceuticals as announced in September of 2011. The spinoff was to allow the two entities to focus on their own separate product lines, with Galena seemingly walking away with the most hopeful therapies in terms of blockbuster potential in an ongoing phase 2 breast cancer therapy, NeuVax®, and Folate Binding Protein E39, a therapy potentially utilized to target a host of cancers. The official separation occurred on March 8, 2012 with Galena retaining a minority interest in RXi. Although the specific terms of the deal were not declared, Galena is eligible to receive up to $45 million in milestone payments from RXi, most likely regulatory and marketing milestones of RXI-109 for the treatment of dermal scars associated with planned surgeries. RXi now trades under the ticker RXII.OB with a market capitalization of $17.5 million at the time of this article’s composition.

Galena’s NeuVax® has been generating a lot of buzz with promising efficacy and a good safety profile for the prevention of breast cancer recurrence. The therapy is an immunotherapy agent that teaches the immune system to target, oddly enough, low and intermediate expression HER2 antigens in cancer cells. Genentech’s (RHHBY.OB) Herceptin is the current blockbuster and standard of care for highly-expressed HER2 in breast cancer (in adjuvant setting after surgery to prevent recurrence). The therapy’s indication is for about 25% of breast cancer sufferers and generated revenue to the tune of about $6 billion in 2011. Herceptin’s mechanism actually makes logical sense by inhibiting the effects of overactive HER2 receptors in the highly-expressed setting. NeuVax’s indication, as determined from phase 2 data, will be for about 50% of breast cancer patients, those possessing the low and intermediate expressions only. While the reason for the higher efficacy for the low and intermediate expressions of HER2 is puzzling, it does provide for a therapy potentially targeting a larger portion of the market share for breast cancer patients (if Herceptin made $6 billion in 2011 for the highly-expressed HER2, then the potential market for NeuVax could be construed as $12 billion annually). It also makes it an ideal candidate to be given with Herceptin to cover a broader portion of the indication, or perhaps the therapies could enhance each other’s efficacy. As a matter of fact, Genentech and Galena are both providing money and their therapies through the Henry M. Jackson Foundation for a phase 2 trial expected to initiate enrollment soon targeting breast cancer recurrence. The trial not only provides for a potentially large target market, but it also lets investors know that Genentech’s parent company, Roche Holding Ltd., has full knowledge of the NeuVax® efficacy and potential which provides for a speculative future ahead for the company as a potential acquisition target as the trials progress.

In terms of upcoming catalysts, Galena’s phase 3 PRESENT trial is the follow-up to the promising phase 2 clinicals. The trial initiated enrollment in January of this year, and estimates for interim data look to be in 2Q or 3Q 2013. The final data analysis of the promising phase 2 NeuVax trials (separate node positive and node negative patient sets) is expected to occur in 4Q of this year and should provide a solid foundation for the company’s lead candidate going forward. A subset of 53 patients receiving booster shots in the phase 2 trial (once every six months) after the initial treatment regimen to keep the immune response from waning is the basis for the phase 3 trial design. At 60 months, the disease-free survival (DFS) of the booster subset was 96.2% versus 80.5% in the control group for a (P=0.01); and the recurrence rate for the booster group was 3.8% versus 18.9% in the control group. The SPA-designated trial’s primary endpoint will be disease-free survival at 3 years or 139 events (recurrence of cancer). Anticipation for this trial’s interim data could be a huge catalyst for 2013, not to mention the phase 2 trial with Herceptin enrollment initiation likely any day. The company also has a phase 1/2 trial underway that initiated in February using its Folate Binding Protein (E39) targeted peptide vaccine for ovarian and endometrial cancer. The company anticipates interim data for that trial sometime early in 2014, another significant catalyst as success there could help validate the vaccine for any of the several potential cancer types it could address including breast, lung, colorectal and renal cell carcinoma.

The company’s common shares are currently trading in a fairly tight consolidation range of $1.50 to $2.00 where it has traded since mid June with strong support at $1.50 and current SMA of $1.72. There appears to be short term weakness in the stock which could provide for entry at the SMA or even down at support level. According to Galena s 2Q earnings, the development-phase company had cash and equivalents at the end of the period of $19.2 million with a current quarterly burn rate of about $7.8 million. According to its financials, money is currently sufficient to fund operations through 2Q 2013.

Radiogel: Response to the Need for a Safer, Targeted Radiotherapy Agent Administered Directly to the Tumor Site

Advanced Medical Isotope Corporation (ADMD.OB) is a speculative medical isotopes provider that just recently entered the realm of cancer treatment via its own therapy for fighting cancer. On April 10, 2012, the company announced that it had obtained an exclusive license to 8 patents for injectable radiogel technology that will be used to fight solid tumors. The $16.4 million market capitalization company hasn’t yet provided an update on how it will proceed with the newly-acquired product, but the possibilities are intriguing as it could potentially be used for any solid tumors that are construed as inoperable, including many liver cancers, brain tumors, head and neck tumors, kidney tumors and pancreatic cancer. The science behind radiogel appears to be sound as it utilizes the widely-used yttrium-90 (Y-90) radioisotope in a polymer base that can be administered intradermally or intraoperatively as a viscous liquid. Once the polymer warms to the patient’s body temperature, it forms a lattice (cage-like structure) that holds the Y-90 at the site of administration where it effectively irradiates the targeted tissue while keeping marginal and system exposure of healthy cells to a minimum.

While awaiting news of regulatory and marketing plans for radiogel, investors should note the diversification in the company’s product line as it provides multiple isotopes for both diagnostic and therapeutic purposes. Although the product line appears to just be getting off the ground, an April 19, 2012 press release noted a contract with its newest customer, Kennewick General Hospital of Kennewick, Washington, for the supply of radioisotopes to be used for its PET (positron emission tomography) imaging system as well as other imaging and therapeutic indications. In an industry where networking can play a large role via “word of mouth” advertising, this and other such contracts could have a huge effect on growing the fledgling medical isotopes business.

Investment in ADMD is a risky venture and is not for all investors as it’s currently traded on the OTCBB and is subject to the volatility, limitations and risks therein implied. Although it is marketing radioisotope products, the company is still in the early stages of development which should be considered when making investment decisions. Potential investors should consider the qualifications of its management group and its April 2012 corporate update via a slide show to get more of an idea of the company’s current and future highlights and projections. The company’s common stock is trading with short term weakness after hitting its’ 52-week high back on August 1st. It is currently trading at support of $0.19 which is also at the lower Bollinger. The next solid support level is at $0.15, about 21% away. 2Q 2012 financials reveal the risk in investment in the company which is why it’s currently trading at these levels (but also offers much upside depending on any upcoming catalysts). The company had just under $13.8 thousand in cash on June 30th with a current average quarterly burn rate of about $17.1 thousand. Asubsequent financing announced on September 4th of about 35 million shares (including warrants) gave the company approximately $5.2 million in additional funding which should help them get through at least 2013 depending on regulatory costs associated with radiogel.

Chemosaturation: Response to the Need for a Much More Aggressive Means for Fighting Metastatic Melanoma of the Liver While Keeping Safety Profile Intact

Delcath Systems’ (DCTH) novel chemosaturation platform is a seemingly simple concept with far-reaching ramifications. The basic premise behind the device is to isolate the targeted organ’s blood supply and then infuse a high dose of a chemotherapy agent that would be highly efficous. Normally, the higher dose of the agent (several times more at the targeted site than normally administered) would be systemically toxic and have an extremely poor safety profile. However, Delcath’s chemosaturation device spares the body from exposure to the agent. Delcath’s most advanced candidate is its chemosaturation device, termed “percutaneous hepatic perfusion” (PHP), which utilizes melphalan hydrochloride as its agent of choice to fight metastatic melanoma of the liver. Isolation balloons are placed at strategic locations in a patient’s vessels bringing blood to and from the liver. A high dose of melphalan hydrochloride is then fed into the inferior vena cava via the patient’s femoral vein. The agent is fed directly into the liver and its associated tumor(s) where it is allowed to work for 30 minutes at the elevated dose. The isolation-aspiration catheter then collects the agent-saturated blood as it exits the liver between two inflated balloons (in the blood vessels) and then filters most of the melphalan from the blood via an external filtration device. The blood is then returned to the patient’s bloodstream via a third catheter in the jugular vein. The isolation balloons are then deflated and the catheters removed.

Delcath has already had one regulatory chance with the FDA which resulted in not a complete response letter (CRL), but rather a rejection of filing for the new drug application (NDA) in February of 2011. The company noted statistical, safety and sterilization issues as the reasons for the rejected NDA. However, it has taken a long time for the company to get back around to refiling an NDA, approximately 18 months to be exact. Although the company doesn’t give a lot of details about the amendment to the NDA this time around, Eamonn P. Hobbs, President and CEO of Delcath Systems, stated in the press release “We believe that our chemosaturation system provides the opportunity to satisfy a high unmet medical need to treat patients with unresectable metastatic melanoma in the liver. We also believe including our Generation 2 filter in the CMC module represents the fastest regulatory review path for the Generation 2 system, and that it is in the best interest of U.S. patients that we accelerate the potential availability of Generation 2.” According to a previous release, the Generation 2 filter has demonstrated much greater efficiency in removing the melphalan from patient’s blood before it is returned to the body. Although investors have reason to be concerned about the delayed resubmission of the NDA, trial data as reported by the company was impressive, with median hepatic progression free survival (hPFS) of 6.4 months longer than the best alternative care (BAC) in their phase 3 trial according to reported blinded intent-to-treat (ITT) analysis. A subsequent independent review committee (IRC) ITT analysis had a somewhat different outcome (likely related to the “statistical issues in the CRL”) with a 5.4 month extension of hPFS, somewhat less but still an obvious improvement over BAC.

Delcath expects a PDUFA date sometime in February 2013 if the NDA is accepted this time. Investors are advised to more deeply research the Generation 2 data along with the IRC analysis of the original data in order to make determinations of probability of acceptance of the NDA and the chance of marketing approval. Is there enough data available from the Generation 2 filter to support approval that will be primarily based on the phase 3 trial which utilized the older-generation filter? Are there any additional underlying statistical issues which the IRC has already either fully or partly evaluated? To the company’s credit, it did receive a CE Mark approval for its device two months after the FDA rejected its NDA. It also received marketing approval in 1Q of this year for its Generation 2 filter, somewhat confirming the device’s upgrade. The European approval to market the device was significant, not only to begin generating some revenue with the platform ($106,000 in Q2, 2012), but also to help generate some much needed additional data that may be required to keep progressing through the regulatory process here in the U.S.

Delcath’s common shares are currently trading at short term weakness at $1.71 at the lower Bollinger, just 4% above its next support level of $1.65. With the PDUFA possible in early 2013, this support should hold unless the NDA is once again rejected. The stock traded well above $4 earlier in the year, but that was before substantial financing occurred.2Q 2012 financials noted $29.3 million in cash and equivalents with a current quarterly burn rate of about $15 million. On August 31st, the company filed additional financing of up to $100 million. Although financing was expected, the amount was surprising although share price was not particularly affected. The stock dilution for 2012 was substantial but should provide new shareholders with a good entry point at current levels. However, the downside risk of a rejected NDA or complete response letter from the FDA even if the NDA is accepted should be taken into consideration for new and existing shareholders.

The above-mentioned companies each have novel approaches to meet the need of greater efficacy for various types of cancers while additionally attempting to address the issue of increasing the safety profiles of the agents involved. They are each in varied stages of development with none generating significant revenue at this time. With varying market capitalizations, differing targeted indications and often-scary financial conditions, the upside and corresponding downside risk for each of these possible investments is typical of the small pharma sector with its infamous risk/reward tradeoffs.

Osiris Therapeutics (OSIR) obviously tops the list for 1H 2012 accomplishments with its May 17th approval for Prochymal® for GvHD. The approval is generally accepted as a significant accomplishment as it is only the 2nd stem cell therapy to successfully navigate the regulatory path. However, Prochymal®’s approval has met recent criticism as many refer back to the January 26, 2012 Canadian Expert Advisory Panel in which the panel noted that the efficacy was not definitive but rather suggested by the trial data. Apparently, some members of the advisory panel had first-hand experience in seeing dramatic improvement in some children due to the Prochymal® treatment regimen. These observations and the panel’s determination that the treatment was safe and “most probably effective” won the “thumbs up” from the committee. Although approved for marketing, the Health Canada’s market authorization does require Osiris to further evaluate Prochymal® in a case matched confirmatory trial in which all patients would be encouraged to participate in a data collection pool to monitor the therapy’s long term effects. The company received additional good news on June 14th with Prochymal®’ssecond approval for GvHD treatment, this time in New Zealand.

Osiris announced its 2Q 2012 financials and company update on July 30th. At the end of the quarter, the company had no debt and $40 million in cash, a good financial condition relative to most of the stem cell companies. The company’s growing Biosurgery product line had a revenue increase of 43% relative to 1Q 2012, growing to $1.63 million. With theglobal incidence of GVHD ranging from 26% to 34% in recipients of full matched sibling donor grafts, to 42% to 52% in recipients of matched unrelated donor grafts, the GvHD indication is an unmet need with each marketing approval adding to Prochymal®’s potential revenue generation. Although the therapy’s approval is currently only for New Zealand and Canada, it is available in seven other countries, including the U.S., under the Expanded Access Program. This allows the treatment to be used within those countries for individuals who do not have approved treatment options and are not eligible for clinical trials for their life-threatening disease. This gives the novel therapy a “foot in the door” with additional revenue and clinical data support while not actually performing a clinical in that country yet.

Aastrom Biosciences (ASTM) had an eventful 1H 2012 highlighted by the initiation of its phase 3 REVIVE-CLI trial of ixymyelocel-T for the treatment of patients with critical limb ischemia (CLI). The primary end-point will be amputation-free survival at 12 months with an additional 6 month follow-up to evaluate safety. Per that time frame, interim and final data could come within a couple of years depending on enrollment rate. The FDA has assigned the trial a Special Protocol Assessment (SPA) as well as a Fast Track designation to guide the company through the regulatory process with clear-cut guidelines and an expedited regulatory process, respectively. The phase 3 trial follows a successful phase 2 trial with final data presented on April 5th involving 48 patients, half of which received ixymyelocel-T and the other half a placebo. The safety profile was similar for both patient sets. As for efficacy, the treatment group had a 62% reduction in risk relative to the placebo for first treatment failure occurrence with a (p=.0032) indicating strong efficacy correlation for the treatment group. Additional post hoc analyses of a subgroup of 45 patients with wounds at baseline yielded a 77% risk reduction in time to first occurrence of treatment failure (p=0.0002). There was also a positive correlation in the phase 3 endpoint of amputation-free survival (61% risk reduction, p=0.0915). However, the company needs to have a better correlation for this particular endpoint in its now-underway phase 3 trial for a successful regulatory path moving forward.

Aastrom will have a conference call on August 7th for 2Q highlights and financials. The company ended 1Q with $36.7 million in cash and cash equivalents after a $40 million financing with favorable terms and no warrants issued. With the phase 3 trial now well underway, 2Q results will give a strong indication of the company’s current cash burn rate. The late-stage trial initiated in late February, so the 1Q cash burn of about $9.5 million may mean a 2Q burn rate of $10-$14 million due to the additional time for expenditures because of this trial (assuming other 1Q expenses were fixed and still in place). If this is the case, the company’s cash position may begin to wane yet again in late 2012 emphasizing the need for a partnership or additional funding in the coming months.

NeoStem, Inc. (NBS) has had a tumultuous year for traders with the company’s stock hitting its year-to-date low of $0.30 on April 10th after its March 30th announcement of a $6 million offering, and it is now trading near its 2012 high of $0.80. As indicated by the share price extremes, the offering frustrated investors enough to cause a shareholder exodus, but recent events have improved the company’s financial condition resulting in the almost-daily new highs for 2012 recently. NeoStem announced on June 18th that it was selling its 51% interest in its generic Chinese pharmaceutical company, Suzhou Erye Pharmaceutical, for $12.3 million in cash and a cancellation of 1.2 million options and 640 thousand warrants. Not only did this give the company’s financials a shot in the arm, but it also streamlined the company to better enable it to focus on its two remaining divisions, Amorcyte andProgenitor Cell Therapy (PCT). Each of these two divisions had productive 1H activities and will be co-drivers for the company’s increasing growth in the coming months.

NeoStem’s Amorcyte division has the company’s lead product in the form of AMR-001, an autologous (derived from the patient’s own cells) bone marrow derived cell therapy enriched for CD34+ cells. The company initiated enrollment on January 25th of this year for a phase 2 trial, termed the PreSERVE trial, for acute myocardial infarction. The trial is a double-blind, placebo-controlled trial that evaluates AMR-001 administered 5-11 days after stent placement in patients diagnosed with an ST segment elevation myocardial infarction (STEMI). This is a condition in which blood flow restriction or total blockage result in heart muscle tissue dying. The targeted patient set is about 160,000 Americans annually and represents a large market set and area of need. The trial will enroll 160 patients over the next year with interim data being reported 6 months after enrollment completion, giving a likely 3Q or 4Q 2013 interim data date. The PCT division is the cell therapy manufacturing division that not only produces cells for NeoStem’s Amorcyte division but also a host of other companies that have contracted the company’s resources including Baxter, Johnson & Johnson, Hospira and even Dendreon during its phase 3 trial for Provenge (the author suggests that Dendreon should have retained PCT’s services through the manufacturing period until Dendreon more closely analyzed Provenge’s actual revenue generation which may have saved them some of the financial issues they re now dealing with). So far in 2012, PCT has added to its client base with Islet Sciences being added on January 12th for a diabetes therapy and SOTIO, LLC on July 16th for its phase 3 trial utilizing an autologous dendritic cell vaccine for prostate cancer (trial set to initiate in early 2013 pending FDA clearance).

As of the publish date of this article, NeoStem hasn’t yet announced a 2Q financials or company conference call date. At the end of 1Q, the company, including its soon-to-be-divested Erye division, had $21.8 million in cash and cash equivalents. The actual closing of the Erye sale is set to occur in 4Q 2012, so that money is not “in the bank” yet but likely on the way. That money and the $6 million from the March offering help to stabilize the company’s finances which should be in much better condition with additional customers added to its revenue-generating PCT division in 2012. The company also recently received a 2-year granttotaling just under $600,000 from the National Institute of Allergy and Infectious Diseases (NIAID) for evaluating NeoStem’s VSEL stem cells to shore up the immune system for patients exposed to radiation due to a nuclear accident or terrorist event. The company’s total revenue was $22.1 million in 1Q 2012 versus $19.6 million in the same period in 2011. Its net loss for the quarter was $9.2 million versus $9.7 for 1Q 2011. NeoStem’s financials seem stable but obviously need to improve. It would be interesting to see the company’s three current divisions’ contributions to both the revenue stream and debt to better ascertain the long-term ramifications of the Suzhou Erye sale. Perhaps the company could more fully address this in the coming months as the sale’s completion nears.

StemCells, Inc (STEM) was fairly quiet in 1H 2012 but deserves to be included as it had an exciting June/July period. This propels it into the list despite being a month late with significant news. The company initiated a phase 1/2 trial in June for dry AMD, the leading cause of blindness in people over 55 years of age with 30 million patients being affected worldwide. StemCells’ announced preclinical trial data on July 17thsuggesting possible efficacy in patients with Alzheimer’s, another large market indication with over 18 million currently affected globally. The company’s HuCNS-SC cells were transplanted into two animal models’ hippocampi with brain neural profiles relevant to Alzheimer’s. Researchers observed increased synaptic density and memory function in the models with no reduction of beta-amyloid or tau protein, the hallmarks of the disease which are believed to cause the pathology of the disease. This is significant with Pfizer recently announcing failure in its phase 3 trial of Bapineuzumab, which targets beta-amyloid, for Alzheimer’s. It appears more and more that the mere removal of this plaque, though thought to be the cause of the neural damage in Alzheimer’s, does not cure the disease but hopefully will at least stop its progression. With that in mind, approaches of either plaque removal or therapies stopping the buildup of the plaque may be supplemented with a stem cell approach, like HuCNS-SC, to stop/decrease the plaque buildup and then repair the neural damage already taken place. Yes, this is a very early stage clinical, but it is significant by targeting the 6th leading cause of death in Americans. With the two huge markets targeted for dry AMD and Alzheimer’s and arecent grant of $20 million to be used to evaluate HuCNS-SC in spinal cervical cord damage from CIRM, StemCells is having a very promising year and is contributing greatly to the stem cell sector.

StemCells announced its Q2 results and highlights on August 2nd. The company had $18.2 million in cash and cash equivalents with operating expenses down 24% and revenue from SC Proven® product sales up 14% relative to the same period in 2011. With an anticipated 2012 cash burn rate of $18-$20 million, the CIRM grant helps to provide much-needed income (although they receive the grant as part of a collaboration, so the true amount they receive hasn’t yet been noted).

Like StemCells, Pluristem Therapeutics (PSTI) just missed 1H with trade volume and share price increasing in July due to anticipation of its upcoming phase 2 trial for Peripheral Arterial Disease (PAD). Affecting 10 million Americans with projections of 23 million by 2014, PAD is a vascular disease causing circulatory issues in the legs resulting in pain in the early stages of the disease with blood flow restrictions progressing and causing CLI, dying arterial tissue, in latter stages resulting in gangrene and ulcers often requiring amputation. Current treatments either thin the blood or increase circulation but don’t address the root causes of the disease. Arecent press release by analyst Sharon Stefano mentioned several blockbuster or near blockbuster drugs currently utilized to treat the symptoms of the disease including Bristol-Myers Squibb’s and Sanofi’s Plavix®, Teva Pharmaceuticals’ Pletal®, AstraZeneca’s Atacand®, Bristol-Myers’ Avapro® and Merck’s Cozaar®/Hyzaar®. Each or any of these could potentially be replaced by or supplemented with Pluristem’s PLX (Placental eXpanded) cells. Pluristem received FDA permission to initiate a phase 2 trial to treat Intermittent Claudication (IC), a subset of PAD, on April 17th. A July 18th update announced that the company has partnered with CPC Clinical Research to use its resources to leverage its clinical study expertise, including patient enrollment, study monitoring, pharmacovigilance, site audits, QA, statistical analyses, data management/control and medical writing. The news, along with the press release from the analyst, has spurred a flurry of buying with a share price increase from July 16th’s $2.41 to the closing price on Friday, August 3rd of $3.31.

The company hasn’t yet announced Q2 earnings or a corporate update but ended 1Q with $43 million in cash and deposits. It has been receiving grants from the Israeli government for 6 consecutive years, greatly shoring up the company’s financials with its most recent receipt of $3.1 million on April 30th to cover expenses through the remainder of 2012. An interesting arrangement, Pluristem will be required to pay the Office of the Chief Scientist (OCS) royalties from 3%-5% of sales and services derived from the company’s technology until 100% of all grants are paid back, plus interest. If no such sales or services occur, no payment would be required.

Although making many promises in its early days of research, the stem cell sector had been unable to live up to many of those promises until the last 2-3 years. Three regulatory approvals (two for Osiris with Canada and then New Zealand) have helped to validate the technology with much more hope potentially on the way as seen in the aforementioned companies. Each of these has had an impressive 2012 so far with more ahead in the immediate future. Potential investors should review the companies’ websites for financials, pipeline progression, market potential targeted and recent developments to ascertain which of these, if any, are good fits into their portfolios. Additionally contributing to their futures, NeoStem and Aastrom have their own cell manufacturing facilities in addition to the clinicals with NeoStem’s greatly contributing to the company’s financial condition. This gives them diversification not seen in most companies in the sector. Pluristem does have a manufacturing facility under construction in Haifa, Israel, with plans to complete it sometime in 2013. StemCells does offer some diversification of its own with its own SC Proven® product line, which generated $249,000 in Q2.

The stem cell sector has grown and matured and should continue to do such, benefiting shareholders and the healthcare sector badly in need of a means to cure and prevent disease by novel cell regeneration technologies. This is a critical time for stem cell technology with some approvals in place and late-stage data due in the coming months that will further validate, or again bring into question, the legitimacy of the technology and the entire sector.

Leaders in this group are Pluristem, Advanced Cell Technology and Cytori Therapeutics.  Pluristem’s pipeline is advancing with a phase II/III for critical limb ischemia (CLI) being planned and a manufacturing facility currently being completed.  Although they have a long way to go to catch up with the revenue generating (and therefore networking capability) divisions of NeoStem, they are advancing with strong science and $43 million in cash at the end of 2011.  Advanced Cell Technology’s single-blastomere technology of extracting stem cells from embryonic stem cells without the destruction of the embryos has huge implications if it can be fully proven with no effects on developing fetuses (so far so good per published reports).  The company recently announced intentions of uplisting to the NASDAQ stock exchange, but this does require a reverse split in order to be eligible for the uplisting.  Shareholders were to vote on a 1:20 to 1:80 reverse split on April 26, so new potential investors should consider this when making their investment decisions.  Cytori Therapeutics has applied for the CE Mark for its Celution System in no-option chronic myocardial ischemia.  The company is expecting to hear a decision from the regulatory body in 1H 2012.  They appear to be very conservative with their cash and hope to further reduce spending in 2012 after a headcount reduction in sales and marketing in late 2011.

Osiris Therapeutics (OSIR) with an MCAP of $156.9 million reported its 2011 update on March 9^th.  Osiris reported $42.4 million for 2011 with $40.0 million from a Genzyme collaboration agreement, $1.0 million from the research, development and commercialization agreement with the JDRF and $1.3 million of revenues from their Biosurgery products. Results were comparable to 2010 in which they saw $43.2 million in revenue, including another $40.0 million from a Genzyme collaboration agreement.  R&D expenses for 2011 were $19.2 million compared to $23.5 million in 2010. General and accounting expenses in 2011 were $7.9 million, which included $2.4 million of non-cash share based payments. G&A expenses in 2010 were $6.5 million, including $0.7 million of share-based payments.

The following pertinent 2011 stem cell research highlights were noted:

• Expanded the company’s commercial infrastructure for our lead products Grafix® and Ovation®, increasing Biosurgery revenue in the fourth quarter more than 130% over the previous quarter.
• Achieved top scoring abstract at the 24^th Annual Symposium on Advanced Wound Care for one of three abstracts the company presented describing the science and initial clinical results of Grafix, a living skin substitute.
• Fully filed response to inquiries from the Biologics and Genetic Therapies Directorate of Health Canada regarding the Prochymal New Drug Submission (NDS) and post marketing commitments.
• Completed enrollment in a 220-patient phase II trial of Prochymal for patients experiencing their first heart attack.
• Reported update on first-of-a-kind phase II trial evaluating Prochymal for newly diagnosed type 1 diabetes, conducted in partnership with JDRF.

Pluristem Therapeutics (PSTI) with an MCAP of $103.3 million reported its 2011 update on February 29^th.  Pluristem’s fiscal year actually ends on June 30^th, but the CEO did note that the company had $43 million in cash and cash deposits on its 10Q.  They also noted recently receiving its sixth consecutive payment from the Israeli government in the form of a grant “in support of our innovative technology” this time for $2.4 million.

The following pertinent 2011 stem cell research highlights were noted:

• Pluristem plans to initiate a phase II dose escalation trial using our PLX cells in muscle injury. Our cells will be administered into muscle routinely traumatized during hip replacement surgery in an effort to improve and shorten the rehabilitation time for the patient. 
• Pluristem is planning a phase II/III pivotal trial at multiple sites in the USA and Europe for CLI (critical limb ischemia), the most severe form of PAD that afflicts approximately 3 million patients worldwide. The endpoint for this pivotal trial will be amputation free survival (AFS).
• Pluristem recently announced the expansion of our activity in using PLX cells for the treatment of radiation exposure following discussions with several governmental authorities seeking effective radiation countermeasures that are readily available and easily administered.
• We are on schedule with the build-out of our new manufacturing facility; which we believe will be one of the largest state-of-the-art, commercial-grade-capacity, good manufacturing practice (GMP) cell facilities in the world. We expect that our three dimensional (3D) expansion technology for manufacturing mass quantities of cells will give Pluristem competitive advantages for future product commercialization and potential collaborations. These advantages include being able to efficiently produce PLX cells in a controlled manner and the ability to manufacture specific PLX cell products for each indication we pursue.
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Advanced Cell Technology (ACTC.OB) with an MCAP of $163.2 million announced its 2011 review on March 1^st.  In the update, they noted expenditures of $13.6 million for 2011 versus $8.8 million for 2010.  The company ended 2011 with $13.1 million in cash and equivalents relative to $15.9 million for 2010.

The following pertinent 2011 stem cell research highlights were noted:

• Secured patent covering the single-blastomere technology allowing cultivation of human embryonic stem cells without embryo destruction
• The Company also announced today that it expects to shortly file a preliminary proxy statement with the Securities and Exchange Commission in which it will seek shareholder approval for a reverse split of between 1-for 20 and 1-for 80 shares. The Company is pursuing the reverse split for the sole purpose of meeting the requirements necessary for a listing on the Nasdaq Global Market. 
• FDA and MHRA clearance for clinical trials using human embryonic stem cell (hESC)-derived retinal pigment epithelium (RPE) to treat dry age-related macular degeneration (AMD) and Stargardt’s Macular Dystrophy (SMD) in the US and Europe.
• Commencement and dosing of patients in the first ever clinical trials using (hESC)-derived RPE cells to treat dry AMD and SMD.          
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ThermoGenesis Corp. (KOOL) with an MCAP of $14.6 million announced its 2Q 2012 fiscal update on February 9^th (Fiscal year started July 1, 2012).  For H1 2012, ThermoGenesis reported revenues of $9.6 million compared to revenues of $12.9 million in H1 in fiscal 2011. The Company reported a net loss of $2.5 million ($0.15 per share) compared to a net loss of $554,000 ($0.04 per share) in the same period a year ago.  The Company ended H1 with $8.7 million in cash compared with $12.3 million at the end of fiscal 2011.

The following pertinent 2011 stem cell research highlights were noted:

• Signing a five-year collaboration with Arthrex, Inc., under which ThermoGenesis, in consultation with Arthrex’s on staff clinicians, has developed two line extensions of Res-Q®, specifically formulated to produce a proprietary composition of platelet rich plasma (PRP) and bone marrow concentrate. Arthrex has global exclusive distribution rights for this proprietary, private-labeled product. The Company expects to record initial revenues from this agreement in its fourth fiscal quarter.
• Presenting data from Critical Limb Ischemia and long bone fracture clinical evaluations using concentrates prepared by the Res-Q that demonstrate initial positive outcomes.
• Being selected by Canadian Blood Services to provide the BioArchive System for a new public cord blood bank that will commence operations a year from now.

Cytori Therapeutics (CYTX) with an MCAP of $135.0 million announced its 2011 review on March 8^th.  The company announced Product revenues were $8.0 million in 2011 compared to $8.3 million in 2010.  Gross profit on product sales was $4.1 million in 2011 compared to $4.3 million in 2010. Total operating expenses were $35.6 million in 2011, compared to $32.0 million in 2010.  The company ended the year with $36.9 million in cash and equivalents along with an additional $2.3 million in accounts receivable.

The following pertinent 2011 stem cell research highlights were noted:

• The company achieved important objectives towards validating Celution® technology in multiple large market indications (and) clarified the U.S. cardiovascular pathway with FDA.
• The Company reported positive long-term outcomes from two clinical trials, initiated a European pivotal heart attack trial, and in January 2012 received FDA approval to initiate a U.S. clinical trial for chronic myocardial ischemia (CMI).
• Cytori’s progress in 2011 has resulted in several visible milestones early in 2012, including approval to initiate our U.S. ATHENA trial, strengthening of our global patent position, and positive guidance by a UK reimbursement authority regarding breast reconstruction.
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BioLife Solutions, Inc. (BLFS.OB) with an MCAP of $5.6 million reported its 2011 review on March 26^th.  The company reported 2011 revenue of $2.8 million relative to $2.1 million for 2010.  The company reported a net loss of $1.96 million ($0.03 per share) for 2011 relative to $1.98 million ($0.03 per share) for 2010.

The following pertinent 2011 stem cell research highlights were noted:

• Revenue and customer base continued to grow with shipments of CryoStor^®, HypoThermosol^®, and BloodStor^®, to dozens of new and to existing customers in strategic direct markets of regenerative medicine, biobanking, and drug discovery. The Company’s estimated direct and indirect customer base now totals more than 400.
• Revenue from distributors grew more than 150% over 2010 and was 20% of total revenue.
• The Company executed a significant confidential multi-year contract manufacturing services agreement to perform aseptic media formulation, fill, and finish of several biopreservation solutions for a new multinational customer.
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BioTime, Inc. (BTX) with an MCAP of $191.2 million reported its 2011 review on March 14^th.  The company reported 2011 revenue of $4.4 million relative to $3.7 million for 2010.  Net loss for the year was $16.5 million ($0.35 per share) relative to $11.2 million loss ($0.28 per share) for 2010.  Cash and equivalents for year end 2011 were $22.2 million relative to

$33.3 million for 2010.

The following pertinent 2011 stem cell research highlights were noted:

• Successfully completed ISO 10993 biocompatibility studies for HyStem^®-Rx. The results of these preclinical studies demonstrated the safety and biocompatibility of HyStem^®-Rx. The first clinical application of HyStem^®-Rx will be for use with autologous adipose cells to restore subcutaneous tissue lost as a result of injury, oncologic resection, or congenital defects.
• Published in the peer-reviewed journal Stem Cell Research the complete genome sequence analysis of five clinical-grade human embryonic stem cell lines. “Evaluating the Genomic and Sequence Integrity of Human ES Cell Lines: Comparison to Normal Genomes” is the first such analysis of the entire genome of human embryonic stem cell lines and further establishes BioTime’s lead in developing fully characterized cell lines intended for use in the manufacture of therapeutics.
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BrainStorm Cell Therapeutics (BCLI) with an MCAP of $31.0 million announced its 2011 review on March 29^th.  The company reported a loss for 2011 of $3.92 million ($0.03 per share) relative to $2.40 million ($0.03 per share) in 2010.  The company noted that they have “financed our operations since inception primarily through private sales of our common stock and warrants and the issuance of convertible promissory notes. At December 31, 2011, we had $2,304,000 in total current assets and $1,135,000 in total current liabilities.”

The following pertinent 2011 stem cell research highlights were noted:

• In June 2011, we initiated a phase I/II clinical study for ALS patients using our autologous NurOwn™ stem cell therapy, after receiving final approval from the Israel MOH.
• In February 2011, the FDA granted Orphan Drug designation to our NurOwn™ autologous adult stem cell product candidate for the treatment of ALS. Orphan Drug status entitles us to seven years of marketing exclusivity for NurOwn™ upon regulatory approval.
• As a result of limited cash resources and the desire to take a faster path to clinical trials, since the fourth quarter of 2008 we have focused all of our efforts on ALS, and are currently not allocating resources towards PD, MS or other neurodegenerative diseases.  Other indications are currently being evaluated.
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Author’s Comments:

2011 was an exciting year for the stem cell biotechs culminating with the FDA’s first approval of a stem cell therapy through New York Blood Center’s allogeneic cord-blood product, Hemacord.  Helping to legitimize the stem cell therapy approach, 2012 and beyond could witness other approvals and trial successes to further validate the stem cell approach for treating many conditions.  Although the sector is still taking “baby steps” as it progresses through the laborious and expensive clinicals, the knowledge gained will never be lost and will continue building to levels allowing ever-increasing efficacy and safety profiles as the sector continues to mature.  Success and failure with both lead to future success and help to further legitimize the field.  Large pharmaceuticals, investors, the medical community and patients in need with be watching the sector’s progression with great interest and hope as this exciting technology and its implications are more fully realized.

In late February and March, publicly-traded stem cell biotechs presented their financials and accomplishments for 2011 along with their goals for 2012.  Investors interested in diversifying their portfolios and gaining entry-level positions into one of the most exciting sectors in the biotech field may view the recent updates and filings below to assist them in ascertaining what types of investments they might consider in this budding sector.  Market capitalizations (MCAP) for each company at market close on May 4th are noted for comparative purposes.  Although the sector is still developing, a notable few companies maturing with pipeline development and/or manufacturing capabilities (and revenue generation) are beginning to stand out.

Of the list below, NeoStem and Aastrom are true standouts for various reasons.  Both companies have recently completed financing which should allow each to progress well into their current trials.  Each also possesses more than ample manufacturing capabilities with NeoStem gaining an advantage via its Progenitor division serving multiple pharmaceutical customers and its Suzhou Erye Pharmaceutical also generating revenue with the latter being marketed for sale.  Suzhou Erye’s tentative sale along with NeoStem’s recent financing will give the company a firm financial footing to stand on, especially impressive for a budding biotech with a $41 million market cap.  Aastrom currently leads with regard to pipeline as a phase III trial of its Ixmyelocel-T cell therapy, termed the REVIVE trial, for critical limb ischemia (CLI) initiated in February 2012.  The trial has the benefit of a Fast Track designation by the FDA along with a Special Protocol Assessment (SPA) from them as well for the trial’s design.  NeoStem’s third division (one of two it acquired in 2011) has the company’s lead product in the form of Amorcyte Inc’s AMR-001 with a phase II trial initiating in January 2012 for the treatment of acute myocardial infarction (heart attack), a potentially huge market group.  AMR-001 is autologous (made the patient’s own cells, in this case from their bone marrow) greatly reducing the probability of rejection by the patient’s immunity system and adding to the treatment’s safety profile.  Showing its own manufacturing strength and expertise, NeoStem’s Progenitor division will be providing manufacturing, supply and logistics for the trial.

International Stem Cell Corp. (ISCO.OB) with an MCAP of $36.6 million released its corporate update on March 20^th.  For the year ending December 31^st, the company reported $4.5 million in revenue, an increase of 189% over 2010.  The increases in revenues in both periods were reported as driven by strong sales at ISCO’s wholly-owned subsidiary Lifeline Skin Care (LSC).  Steady growth in sales from ISCO’s other wholly-owned subsidiary, Lifeline Cell Technology (LCT), also contributed to the increase in revenue.

Two key highlights in its stem cell research program were noted:

• “A number of donors willing to provide oocytes for research purposed were enrolled in ISCO’s program to establish a bank of clinical grade hpSC capable of being immune-matched to millions of patients.
• The Research and Development team successfully completed the first series of preclinical studies that supports the therapeutic use of hepatocytes (liver cells) and neuronal cells derived from human parthenogenetic stem cells (hpSC). These in vivo experiments demonstrated that the derived cells are able to survive in targeted location in mice without causing tumors.”

NeoStem, Inc. (NBS) with an MCAP of $44.1 million gave its 2011 update on March 20^th, 2012.  The company reported consolidated revenue of $73.7 million for 2011 relative to $69.8 million for 2010. The Company’s consolidated net loss for 2011 was $56.6 million including $10.3 million of non-cash equity-based compensation expense, $19.4 million of goodwill impairment charges and $9.0 million of depreciation and amortization.  NeoStem’s consolidated cash loss for 2011 was $15.5 million (see reconciliation below). Net loss attributable to NeoStem common shareholder interests for 2011 was $47.8 million, or $0.54 per share. At year end, the company reported cash and cash equivalents of $12.7 million with an additional $2.5 million in cash held in escrow. The company’s financials were additionally shored up with a $6.8 million ($6 million plus an over-allotment) offering of 15 million shares priced at $0.40 per unit with each unit consisting of a share of common stock and a warrant to purchase an additional share with an exercise price of $0.51.

The following pertinent 2011 stem cell research highlights were significant and noted:

• NeoStem believes that the opportunities that exist today in cell therapy are robust and growing despite a persistently difficult financial environment, making this an opportunistic time to pursue the monetization of the Company’s 51% ownership of Suzhou Erye Pharmaceutical Co., Ltd. and bolster its cell therapy business.  In June 2011, the Company engaged a financial advisor to lead the effort to pursue the possible divesture of the Company’s interest in Erye.  Marketing efforts are underway and have generated interest from both financial and strategic buyers.
• NeoStem is also developing pre-clinical assets, including its VSEL™ Technology platform for regenerative medicine, which NeoStem believes is an endogenous pluripotent non-embryonic cell that has the potential to change the paradigm of cell therapy as we know it today. These activities have received awards in excess of $2.5 million which funds support the work of prestigious researchers who are pioneering this science with NeoStem.
• Behind the development of these therapeutic assets is the NeoStem cell therapy contract manufacturing business (PCT) which itself continues to grow. New clients have engaged PCT to assist them in the development of their products, including a global, diversified healthcare company who recently selected PCT to provide stem cell processing in our two GMP manufacturing facilities in the United States (California and New Jersey). PCT’s prominence in the marketplace continues to grow and that is reflected by both client satisfaction and the revenues the company generates. (Acquired January 20th, 2011).
• NeoStem now has a pipeline of assets that includes October 2011 acquired Amorcyte (phase II trial for preservation of heart function after a heart attack), Athelos (physician sponsored phase I trials for a range of auto-immune conditions) and pre-clinical development work on its VSEL™ technology. The Company’s most advanced asset is AMR-001for the treatment of acute myocardial infarction for which enrollment for a phase II study in the United States commenced in January. AMR-001 is administered 5 to 11 days post-stent placement in patients diagnosed with an ST segment elevation myocardial infarction (“STEMI”) with ejection fraction less than or equal to 48%.  The manufacturing, product supply, and logistics for the trial will be supported by Progenitor Cell Therapy, LLC, NeoStem’s contract manufacturing company. 

StemCells, Inc. (STEM) with an MCAP of $21.6 million reported its 2011 update on March 13^th.  StemCells reported a net loss of $21.3 million or $1.50 per share, compared to a net loss of $25.2 million, or $2.05 per share, for 2010.  Total revenue in 2011 was $1.2 million compared to total revenue of $1.4 million for 2010. Other income in 2011 was $6.8 million relative to $4.1 million for 2010.

The following pertinent 2011 stem cell research highlights were noted:

• In February 2011, the fourth and final patient in our phase I clinical trial in Pelizaeus-Merzbacher Disease, was enrolled and transplanted with our proprietary HuCNS-SC(R) cells (purified human neural stem cells). This trial is the first to evaluate neural stem cells as a potential treatment for a myelination disorder.
• In March 2011, we initiated a phase I/II clinical trial of our HuCNS-SC human neural stem cells in chronic spinal cord injury.
• In September 2011, the first patient in our phase I/II clinical trial in chronic spinal cord injury was enrolled and successfully transplanted with our HuCNS-SC cells. 
• In December 2011, we successfully completed the enrollment and dosing of the first cohort of patients in our phase I/II clinical trial in chronic spinal cord injury. 
• In January 2012, the U.S. Food and Drug Administration (FDA) authorized the initiation of a phase I/II clinical trial of our HuCNS-SC cells in dry AMD, the most common form of AMD.

Aastrom Biosciences (ASTM) with an MCAP of $91.9 million reported its 2011 update on March 12^th.  Aastrom reported a net loss of $19.7 million, or $0.51 per share, for 2011 compared to a net loss of $25.5 million, or $0.90 per share, for 2010. As of December 31, 2011, the company had a total of $5.5 million in cash and cash equivalents, relative to $31.2 million in cash and cash equivalents on December 31, 2010.

The following pertinent 2011 stem cell research highlights were noted:

• Initiated patient enrollment in the phase III REVIVE-CLI clinical study of ixmyelocel-T in patients with critical limb ischemia.
• Reported and presented positive 12-month results from the phase IIb RESTORE-CLI clinical study at the American Heart Association Scientific Sessions.
• Received a notice of issuance of a key composition-of-matter patent from the European Patent Office for ixmyelocel-T.
• The company also noted “we now have the momentum and financial resources to advance our clinical programs in critical limb ischemia and dilated cardiomyopathy and pursue productive discussions with a number of potential partners this year”.

Nueralstem Inc. (CUR) with an MCAP of $51.7 million announced its 2011 review on March 29^th.  The company announced a net loss for 2011 of $12.5 million ($0.26 per share) relative to a net loss of $18.4 million ($0.42 per share) for 2010.  Net cash used in operating activities decreased to $8 million in 2011 from $9.98 million in 2010. Cash and cash equivalents on December 31^st were $2.35 million relative to $9.26 million for the same period in 2010.  The company had $5.7 million in cash as of March 8, 2012.

The following pertinent 2011 stem cell research highlights were noted:

• We also received notices of allowance for our proprietary surgical spinal platform and floating spinal cannula as well as the method for delivering a therapeutic agent to a spinal cord target
•  We believe this breakthrough surgical device, invented by our ALS surgeon, Dr. Nicholas M. Boulis, and for which Neuralstem holds the exclusive worldwide license, will be the industry standard for such intraspinal procedures.
• In February 2011, Neuralstem received FDA orphan drug designation for the treatment of ALS with its human spinal cord derived neural stem cells (NSI-566RSC).
• The first patient of the final six cervical transplantation phase I ALS patients received the world’s first neural stem cell injections in the gray matter of the upper spinal cord region in November 2011, at Emory University. It was reported that the entire 18-patient trial will conclude six months after the final surgery.
• Neuralstem was selected as the principal subcontractor under a U.S. Department of Defense contract to develop its human neural stem cell technology for the treatment of cancerous brain tumors…… The contract award was $1.6 million for the first year of the project, of which Neuralstem received $625,000. In this new approach to oncology, it was reported that the neural stem cells will be engineered to attack brain cancer in three ways: by expressing an antibody known to suppress tumor growth; by expressing an enzyme that selectively kills tumor cells; and by expressing an antiangiogenic protein that will starve the tumors by preventing the formation of the blood vessels that feed them.

Athersys, Inc. (ATHX) with an MCAP of $39.1 million reported its 2011 review on March 27^th.  For year ending December 31sth, the company reported revenues of $10.3 million relative to $8.9 million for 2010.  Net loss was reported at $13.7 for the year relative to $11.4 for 2010.  Cash and equivalents for year end 2011 totaled $12.8 million relative to $15.2 million for 2010.

The following pertinent 2011 stem cell research highlights were noted:

• Announced positive results from phase I clinical trial evaluating MultiStem^® treatment for individuals undergoing allogeneic hematopoietic stem cell transplants (HSCTs) for the treatment of leukemia and related conditions and the risk for graft-versus-host disease.
• Published in Circulation Research the results from a successful phase I clinical study of MultiStem treatment of patients who had recently suffered an acute myocardial infarction.
• Granted a patent covering the use of non-embryonic multipotent stem cells for the treatment of cardiovascular conditions, capping a productive year for our stem cell patent prosecution.

Author’s Comments:

The stem cell sector, like all biotechs or small pharmaceuticals, is a volatile and risky venture for investors.  Most of the sector is construed as “development phase” with no marketable products to generate revenue via sales or licensing.  As these companies grow, progress through clinicals, and advance by trial and error during various stages of the clinicals, much data is generated and much knowledge is gained.  These are expensive ventures requiring much company capital and time.  While most of these biotechs rely on shareholder contributions and larger pharmaceutical partnerships, these can detract from the existing shareholders’ value via stock dilution and sharing of potential earnings, respectively.

NeoStem and Aastrom, although both still requiring recent financing through stock offerings, present shareholders the unique opportunity of investment in stem cell companies with current manufacturing capabilities.  NeoStem’s advantage over Aastrom is particularly appealing as its manufacturing capabilities not only benefit the company directly as a direct source of its stem cell therapies, but the company has also been supplying well-known companies such as ImmunoCellular Therapeutics and Baxter International through revenue-generating manufacturing contracts.  Although not contributing enough to enable the company to generate a profit at this time, the revenue does serve the purpose of off-setting some of the clinicals costs and also improves the company’s networking abilities and exposure to potential future suitors.  In a sector struggling to blossom and yield fruit, the early stage stem cell companies generating revenue and networking with larger pharmaceuticals can offer investors something to consider as they look to diversify their biotech holdings.  2012 and beyond could prove to be exciting and hopefully profitable times for stem cell biotechs and those investors fortunate enough to gain entry-level positions into one of biotech’s most exciting sectors.