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News from International
Stem Cell
This
newsletter is intended to update our International Stem Cell
(“ISC”) stockholders and friends to our current progress and
future plans.
ISC is
making what we think is excellent progress in bringing the
extraordinary possibilities of parthenogenetic stem cells
into clinical applications and building ISC’s future value
by strengthening each of the three elements of our business
strategy. However because of the technical nature of the
industry, a basic review of parthenogenetic stem cells is
probably in order.
Parthenogenetic Stem Cells:
• uniquely avoid
immune rejection in large segments of the world’s
population,
• have the
potential to become any cell in the human body,
• can be created
and expanded efficiently for economic production that opens
the door for lowering health care costs,
and
• are created from
unfertilized human eggs, lowering ethical objections and
expanding the acceptance for research and clinical use.
Our
model for using our parthenogenetic cells to bring the
benefits of stem cell therapy to patients throughout the
world has two key elements.
Element One: Use collaborations to increase
our probability of success:
ISC will
place our parthenogenetic stem cells into emerging clinical
trials and collaborative research across the world. The goal
of such collaborations is to multiply the number of clinical
trials in which we can participate, accelerate our pace
toward finding cures, and minimize our costs of bringing
therapies to market. In so doing, we also build our
intellectual property capital by retaining all critical
rights to commercialize the resulting products.
Although
collaborative efforts allow our cells to be used for any
disease for which cellular implants promise a cure, our
initial focus is on four disease targets: blinding diseases
(such as macular degeneration and corneal blindness), liver
disease, diabetes, and nerve diseases such as Parkinson’s.
Progress in
Blinding Diseases:
1. The Retina. Through
collaboration with Dr. Hans Keirstead at the University of
California at Irvine (UCI), retinal pigment epithelial cells
have been derived in the laboratories of both UCI and ISC.
Pre-clinical trials for treating macular degeneration are
scheduled in 2008 and phase one human trials in 2009.
2. The Cornea. ISC has
perfected and patented a process of creating multi-layered
living human corneal tissue using parthenogenetic stem
cells. Over thirty “corneal constructs” are currently in
culture. Studies are underway by pathologists and corneal
experts to characterize these corneal constructs for
eventual clinical use. These constructs are also being
studied as toxicology models for use by chemical and
consumer products companies for eye damage and eye
irritation testing as alternatives to the living animal
models used today.
In addition, Paul H. Chen, MD,
is working with ISC’s corneal cells derived from
parthenogenetic stem cells to design and conduct clinical
trials to accelerate corneal healing after laser vision
correction PRK, using techniques that may be safer and more
effective than LASIK.
Progress in Liver Disease:
1. Creating Liver Cells from
Parthenotes.
Parthenogenetic stem cells
have been differentiated into endoderm tissue and liver-like
cells in ISC’s Oceanside research laboratory. This
represents the first step towards creating liver cells and
cells for the treatment of diabetes and will be part of the
collaboration with Dr. Willingbring (see below). The data
and results are being consolidated for future publication.
2. Treating Liver Disease
with the Cells.
Holgar Willingbring, MD, PhD
at the University of California San Francisco, and a leading
expert in the use of stem cells to treat liver disease, is
using ISC’s parthenogenetic stem cells in a mouse model of
human liver disease. These tests, if successful, will
represent a major breakthrough in the field of stem cell
research and generate proof of the principle that liver
cells grown in the laboratory from human stem cells can cure
liver disease. It will be the first major step toward human
clinical trials.
Progress in Diabetes:
Pancreatic Islet Cells are in the same “branch” of the
developmental tree as liver cells, so all the work we are
doing in liver cells also has applicability to the creation
of Islet Cells to treat diabetes. In addition, we are
currently negotiating the terms of a collaborative research
program with a private company that is one of the world
leaders in differentiating stem cells into islet cells for
diabetes, a relationship that we expect to accelerate our
own progress toward this goal.
Progress
in
Nerve Diseases:
Parthenogenetic stem cells are being changed into cell types
useful for the treatment of brain and nerve diseases such as
Parkinson’s by leading stem cell expert
Dr. Albrecht Müller at the
Institute for Medical Research and Cell Biology, University
of Würzburg Germany. ISC has entered into an agreement with
the University to use our cells in their work.
Element Two: Create a “Cell Bank” of
parthenogenetic stem cells
containing specific lines that, as a group, constitute a
resource from which doctors may “prescribe” therapeutic
cells that avoid immune rejection by a majority of the
world’s population.
Progress:
ISC has already created a parthenogenetic stem cell line
with the most common immune-type found in the United States
population.
ISC is
currently working on deriving parthenogenetic stem cell
lines that cover the second and third most common
immune-types found in the United States population. These
immune types are also common world-wide.
The stem
cell lines mentioned above are not contaminated with
non-human cells.
In May
2008, Jeffrey Janus, ISC’s president, presented to the FDA’s
Stem Cell Working Groups ISC’s findings and opinions
regarding the derivation of and advantages of
parthenogenetic stem cells and the need to create such a
Cell Bank.
Revenue Generation:
Unlike
most companies in the development phase of human therapies,
ISC is developing an ongoing source of revenue that we
believe will eventually support our research efforts to
reduce the need for further investment capital. Instead of
spending all our efforts on research into therapeutic
products that will require a lengthy development and
regulatory path, ISC has created an alternative pathway to
revenue and is working on additional sources.
Progress in
Research Products: We have begun the process of
generating revenue though the sale of human cell culture
research products (the picks and shovels of stem cell
research) through our wholly owned subsidiary, Lifeline Cell
Technology.
Although
sales of Lifeline brand products are still small, they have
increased at an average month-to-month rate of 100% between
January and May 2008 and have already exceeded 2007’s entire
year’s revenue by 193%. Lifeline plans on more than
doubling its product offerings before the end of July 2008.
New distribution channels are being opened in Japan and
first sales are expected in Japan this month.
We expect
soon to expand our business to include research products
derived from stem cells. Lifeline recently announced a
letter of intent to create and sell unique human stem cell
lines using both our proprietary parthenogenetic stem cells
and US-government approved stem cell lines through a
collaboration with BioTime, Inc., led by leading stem cell
researcher Dr. Michael West. Lifeline and BioTime are
actively producing lines at this time.
Progress in Toxicity Testing:
Lifeline’s human corneal toxicology model has the
potential to measure corneal damage caused by products
splashed into the eye in a manner not available to the
market today. The product prototype is in development and
will require validation that will take place in 2008. This
product addresses a test method that will be required by the
European Union in 2009 and addresses a market need estimated
to exceed one hundred million dollars annually.
We also
hope soon to be able to introduce a toxicity-testing model
for testing the impact on the human liver of drugs being
developed by major pharmaceutical companies. When developed,
this would eliminate the need to use test cells derived from
cadaver livers (which are often of poor quality or diseased
and therefore unusable) and addresses another market that we
estimate exceeds one hundred million dollars per year.
Summary:
The technical environment in the stem
cell field can be confusing. New technologies, discoveries
and claims seem to arise weekly in the stem cell field. The
uniqueness of ISC is that it is the only company that can
routinely and economically produced pluripotent stem cells
that generate cells that will not be immune rejected by
large segments of the population and do not involve the
destruction of fertilized embryos. ISC also has the
manufacturing knowledge and capacities to take advantage of
its discoveries and it is actually generating revenue today.
As a
reading of our published financial statements will reveal,
ISC has suffered from the lack of available capital for
micro-cap companies, which has severely impacted our cash
reserves. This is a significant risk to our company and
management is keenly aware of the need to strengthen our
balance sheet and is using its very best efforts to address
this issue. Although we have no control over the capital
markets and have no way of knowing what factors ultimately
affect the stock market, we believe that these capital
issues have also contributed significantly to ISC’s
currently disappointing market valuation and have caused the
achievements we have made be largely ignored by the market.
As this
update shows, ISC is making huge strides and is very focused
on becoming the leading source of cells for therapy. We
appreciate your support and welcome your questions.
Sincerely,
Jeffrey
Janus
President
This newsletter includes
forward looking statements, including without limitation
statements, estimates and projections with respect to the
anticipated future business and performance of the Company,
product development goals and strategies, and clinical trial
expectations. Forward-looking statements reflect various
assumptions of management, which assumptions may or may not
prove to be correct, and are intended solely to convey our
current expectations or predictions about the future
performance of the Company. These forward-looking statements
are inherently subject to risks and uncertainties, including
the uncertainties inherent in clinical trials and product
development programs, competitive and regulatory
developments, the availability of capital and the
application of available capital among competing uses, and
other risks described in our filings with the SEC. This is
not an offer to sell, nor a solicitation to buy, any
security.
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