Summary
Advanced Cell Technology has made great strides, especially in the last several months.
ACT plans on "rebranding" itself thus breaking ties with its negative financial past.
The reverse split, NASDAQ up listing, and institutional financing are said to be a linked set of activities.
ACT continues to add to their industry leading patent portfolio.
ACT plans to up list to NASDAQ and move to Phase II this year.
Advanced Cell Technology (OTCQB:ACTC) has made great strides, especially in the last several months. When Paul Wotton decided to leave a secure high paying CEO position at Antares Pharma to come aboard a financially strapped company with a history of bad financing decisions it was a turning point at ACT (soon to be known as Ocata Therapeutics). There have been many exciting new developments recently, almost all of which are positive.
I will begin with two events which have recently received a lot of negative reaction but are really both minor. The closed investigation concerning the former CEO, which to anyone following ACT knows is old news, and the sales by Dr. Lanza, which were likely not only set up at least 6 months in advance but triggered by pre-planned price points. The company closed the book on the Rabin era almost a year ago along with the other legacy issues that loyal shareholders have paid for already. ACT can finally move the science forward. Dr. Lanza's sales were likely caused by the recent run up in price. These types of pre-planned sales are common so that no one can accuse an officer of a company of insider trading. Besides these two non-events many other events have transpired in the last two months that in my opinion show a company on the verge of transforming itself into what its long-term investors believe will finally become a world class regenerative medicine company.
If you follow ACT you know they have submitted a proxy to change their name to Ocata Therapeutics. This is a positive step because it goes along with a Re-IPO and up list where ACT plans on "rebranding" itself thus breaking ties with its negative financial past. In an article written by Paul Knoepfler the word "Ocata", according to Dr. Lanza, means "Medicine Man" in the Native American Huron tribe.
In my opinion, the age of regenerative medicine is almost here and according to Dr. Lanza in the last conference call it is about to be delivered to us in the form of a peer reviewed journal. He states;
We are hopeful that we will be in a position to share our interim results with you all soon when the data is published in a peer-reviewed journal.
If the results of their AMD and SMD trials are as good as the company has presented, Ocata could blow the doors off the field. Even if the data in the journal is half as good as what the company suggests it would still be a blockbuster. There are more than 30 million Dry AMD patients in North America and Europe alone, with no approved treatments currently available.
There is no other company involved in regenerative medicine that is using the "gold standard", single-blastomere derived, pluripotent cells. ACT says that they are not only more potent than adult stem cells but they are also an inexhaustible source of cells that will replicate forever. We are told by the company that unlike adult stem cells they are commercially scalable which means they will cost much less to produce. The attached is an unprecedented article on how Human ESC-Derived MSCs Outperform Bone Marrow MSCs in the Treatment of an EAE Model of Multiple Sclerosis.
There are lines of cells called NED "No Embryo Destroyed" cells which ACT created that should end any controversy over how they are produced. According to the company they will never again have to go back to the clinic for a new source of cells. ACT has also stated they have a thick patent wall with over 150 patents which gets thicker every few months.
Since Paul Wotton came aboard ACT has nicely positioned itself to become the company that its loyal shareholders have been waiting for. But why did he come to ACT? Dr.Wotton best sums it up in his first words to shareholders on the last conference call:
Many of my former colleagues, business associates and friends have asked me what I saw to prompt my move to ACT. The answer is a simple one. At ACT we have an opportunity to change the face of medicine. The scientific platform here is world class based on the work of Dr. Robert Lanza and his team...
In between Dr. Wotton's arrival and waiting for the peer-reviewed journal to come out multiple articles about the company have been published.
On 8/14/14 an article was published about Dr. Lanza in The Pennsylvania Gazette in which this was stated about the patient whose vision went from 20/400 to 20/40:
When Lanza saw him last year, the rancher was crying. He gave Lanza a hug, then quickly said he'd never hugged another man before. But he couldn't help himself. According to Lanza, stem cells had saved the man's sight... "We could be treating very large numbers of patients within a few years, easily, if all goes well," he adds.
Now if what Dr. Lanza says comes to fruition it would most likely mean we received a pivotal trial designation for one or both SMD and AMD. A pivotal designation would speed up the trials considerably making commercialization not only more likely but happen much sooner.
Then there is this from the same article:
"We're able to put in new photoreceptors and actually reverse the blindness after they're already blind," he adds. "that's huge. No one's ever done that. If you'd asked me a few years ago whether that was even biologically possible, I would have said probably not."
Using photoreceptors (rods and cones) to cure those that are totally blind from retinitis pigmentosa will add another product to the already deep and growing pipeline. These products could possibly be used in combination. A person who lost their RPE and photoreceptors because of AMD could receive RPE cells to correct the original underlying problem along with photoreceptors to restore their sight. The patients in the AMD and SMD trials receiving RPE cells that have improved visual acuity likely have some photoreceptors which are still viable. Later I will discuss how ACT is taking strides to make this a reality.
There is another article published recently called "Heal Thyself". This article reconfirms our Tufts Dog Trials and their unbelievable potential. ACT's stem cell trials underway at Tufts can be found here: Tufts Stem Cell Trials. The article states:
Stem cell therapy is considered by many to be the most important breakthrough in the life sciences since genetic engineering. Researchers in human medicine are exploring the use of these cells to regenerate cardiac tissue in patients with heart failure and brain tissue in stroke patients, for example. Because stem cells send out signals that regulate immune system function, they also hold great promise as biological repair kits for diseases in which the immune system is out of whack, as in lupus or multiple sclerosis; chronic inflammation (rheumatoid arthritis); or dangerous scar tissue, such as the kind that develops after some heart attacks.....At Cummings School, stem cell research is focusing on several canine diseases for which traditional treatments often fail. The work could speed the development of stem cell therapies for humans with similarly difficult diseases. "We are gravitating toward patients that are pretty dire," says Andrew Hoffman, director of the school's Regenerative Medicine Laboratory.
These MSC Tufts Dog trials will provide investors with a pipeline that is unmatched. You see, they have already tested these human MSC cells in rodents, and they worked. They are now testing in dogs. I expect ACT to come out with a paper on every indication they are testing. These papers will prove that human MSC's work in both rodents and dogs. And if human MSC's work in both rodents and dogs, well....
On 8/27/14 the 100:1 reverse split was announced. According to the company it is the first step in the Re-IPO and up list process that the company has repeatedly referred to in the past. According to the CFO Ted Miles:
We remain committed to our previously stated plan of reverse splitting the stock, uplisting to a national exchange such as NASDAQ, and attracting fundamental based institutional biotech investors who can fund the company through the next several milestones.
On 9/2/14 ACT then announced: Distinguished Scientists Join Advanced Cell Technology's New Scientific Advisory Board
ACT was able to bring in these scientists because they are the tip of the spear when it comes to regenerative medicine. I would say their resumes speak for themselves.
This group represents some of the best minds in stem cell research and regenerative medicine," stated Robert Langer, ScD, Chairman of the Scientific Advisory Board. "Their knowledge and expertise will help guide the Company's strategic direction and identify the most promising scientific programs ranging from discovering new therapeutic cell types to developing treatments that could significantly improve the lives of those suffering from debilitating diseases.
On 9/5/14 ACT added another patent to its portfolio: U.S. patent 8822218 covering methods of manufacturing dendritic cells using a highly scalable processing involving a readily renewable stem cell source as the starting materials. Why is this patent so important? Dendritic Cells (DC) are cells that will tell T Cells which cells are cancerous so that they can be targeted and destroyed. The patent states that these cells are not only more potent, but many times more scalable than adult stem cells. In other words they will be not only be a more effective treatment, they will be much less expensive to produce.
On 9/18/14 a patent called Methods For Production Of Platelets From Pluripotent Stem Cells And Compositions Thereof is published. It states that they have found a way to mass produce platelets.
The yield and/or purity can be greater than has been reported for prior methods of producing platelets from pluripotent stem cells.
This was a major impediment to moving forward with this program that ACT seemingly has solved. Being able to produce blood and platelets will be an extremely expensive undertaking. Scaling up this process is essential.
As many know there is a proxy for an increase of authorized shares.... This is the reason ACT dropped from $12 to $8. Whether some like it or not an increase in shares had to happen in order to move us forward, so that we can up list to NASDAQ. As discussed above the company had talked about it as "linked set of events" that will go along with a Re-IPO. We do not know at this point how the shares will be used or how many shares they will need. What it will do is give us a good balance sheet going onto NASDAQ so that institutions will invest in Ocata and not have to worry when the next capital raise will occur. I choose to look at this as a positive event because I expected some sort of capital raise and it follows the company plan of up listing to NASDAQ.
Many people including myself believed Mr. Aronson ACT's largest shareholder would be dumping at least some of his newly acquired shares. As most know the large settlement paid by the company for its past financing issues was paid to Mr. Aronson in the form of shares. The 8-K release on 9/23 shows that ACT's largest shareholder as of 9/1/14 had not sold a single share. Not one.
ACT released Form 4's issuing options to company officers (including Dr. Lanza). They set the strike price for officers of the company. We now have time frame for when their stock options vest telling us they believe the stock price will appreciate in the future. Awarding options to its officers aligns their interest with shareholders. If the price of the stock is not above the strike price for these employees at their expiration dates the options expire worthless.
Other steps that ACT has taken indicate a company that is about to be "reborn" on the NASDAQ. They have recently trademarked Ocata and acquired domain names for the new website. They upgraded their independent accounting firm to BDO and retained the investor relations firm Westwicke Partners. Both are very reputable companies who just happen to specialize in the Re-IPO process. They additionally reconfigured their board of directors and filled key managements positions which are other signs of a company moving toward a Re-IPO.
On 9/25/14 the company announced Advanced Cell Technology Announces Final Patient Treated in Stargardt's Macular Degeneration Phase 1 Trial in the United Kingdom. They have once again verified that plans to begin Phase II this year in the United Kingdom are lining up and that all the trials have been 100% safe.
The completion of enrollment and treatment of all patients in the Phase 1 portion of our U.K. clinical trial is a significant milestone for ACT and its RPE programs," said Eddy Anglade, M.D., ACT's Chief Medical Officer. "We look forward to analyzing the data as we continue to advance our clinical programs. To date, no cell or immune-related adverse events have been reported in any of the patients treated; indicating that our RPE cell therapy appears to be safe and well-tolerated at all of the doses planned for the study."
On 10/1/14 this article was published: Eye On the Prize. The article states:
ACT is also preparing to launch clinical trials based on hESC-derived photoreceptors, says Vincent, possibly also early next year. "I think the photoreceptor progenitors will likely be the next 'IND-able'... program for the company."
To go along with this on 10/2/14 ACT filed this patent application: Photoreceptors And Photoreceptor Progenitors Produced From Pluripotent Stem Cells.
This is more verification that ACTC does in fact plan on moving ahead with its photoreceptor progenitors program. They will now have the "best in class" RPE cells to go along with photoreceptors (rods and cones) and neural progenitors. Recapitulation of the eye is becoming a reality.
Many shareholders have speculated about why Dr. Lanza did not have a signed contract since last year. As of 10/6/14 we know that he is now under contract. Speculation can now begin about why he waited until now to sign it. This is yet another sign that ACT is getting its "ducks in a row" before they release news.
ACT has given us a lot of good news in the last two months even though there are those who would like you to believe otherwise. Paul Wotton is now in a position to move this company forward to the next level. I am more confident than ever in the plan laid out by the company to up list this year and move to Phase II at the beginning of next year. Both of which are stated company objectives. I am looking forward to the next two months, seeing a groundbreaking paper, and listing on the NASDAQ.
One last note… Many people have questioned over the years why ACT has such a loyal group of active shareholders. I will tell you the reason. Many of us found ACT and Dr. Lanza in search of treatment for one of any number of diseases. Whether it was AMD, SMD, MMD or Glaucoma. Iritis, Colitis, MS, lupus or any other immune system disorder, Parkinson's heart disease or cancer. Many of us have loved ones or they themselves have these diseases. We firmly believe that supporting Ocata is a struggle that is bigger than $$. The future of regenerative medicine lies in the hands of not only some of the best scientific minds of our time, but its shareholders as well. If Ocata fails so will regenerative medicine. That is why the peer-reviewed paper is so important. It would tell the world once and for all that regenerative medicine works and is here to stay. I, for one, look forward to the day when Dr. Wotton's words come to fruition and our "medicine man" Ocata Therapeutics, "changes the face of medicine."
Disclosure: The author is long ACTC. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.
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