May 13, 2010 |
Recent article about ISCO's Cornea Program |
The following is an excerpt from the May 11, 2010 Breakthrough Technology Alert, published by Agora Financial. Agora Financial is a fully independent publisher and has no financial connections to companies listed below. Breakthrough Technology Alert's editor is industry expert Patrick Cox. Patrick is renowned for his innovative forecasts and keeping readers "ahead of the story".
For more information about Patrick Cox and Breakthrough Technology Alert please visit www.agorafinancial.com
A Fascinating Story and Critical News about ISCO!
Dear Breakthrough Technology Reader,
Scientific knowledge is advancing so fast, I think there's no point trying to plan these weekly alerts even a week ahead. For several weeks, I've been saying that I was going to give you an overview on the economy in general. Last week, as you know, I put it off but did tell you to get ready for a buying opportunity caused by general market tumult, which I believed was inevitable.
As you know, within an hour of the mailing, the markets started down. You also know about the "mystery dip." I hope that you did as I recommended and made a list of stocks you would have bought when they were cheaper. In fact, we've seen a number of stocks in our portfolio dip into bargain territories for no rational reason. I want to spend some time talking about them now.
So, I'm going to delay giving you my macro view again. Not only do I have more pressing scientific news, but this last week was particularly busy – and incidentally relevant – for me. My wife, who spent years in ballet, underwent her second knee surgery. Ballet, incidentally, ranks alongside football as a hazardous physical activity. Regardless, I've been taking care of a lot more of the shopping, cooking and general childcare duties, so I'm running behind.
Her surgery, incidentally, was vastly superior to the same basic procedure, which she had done about 15 years ago. During the operation, while she was under anesthesia, blood was extracted. Blood stem cells were isolated and the rest of the extracted blood returned to her. When the surgery was completed, the concentrated platelets containing blood stem cells were injected into the area of the surgery.
This is, by the way, basically the same procedure that Hines Ward, the Pittsburgh Steeler MVP, had before last year's Super Bowl. At the time, he had to go to Korea to have the procedure done. It is much more widely available today.
There are a lot of misconceptions regarding this procedure, which was honed by veterinarians who have used it successfully on valuable racehorses for years. Blood stem cells do not actually become anything but blood cells. They can't become cartilage, for example. They do, however, produce growth factors. These messenger molecules seem to mobilize the production of healing agents and other stem cells appropriate to the area of the injury.
Sooner than most people think, we will be able to inject stem cells that will become cartilage and repair damaged joints. Until then, however, stem cell growth factor therapy is the state of the art. We wouldn't even have that if it were not the patient's own cells that are used. This has allowed doctors to escape the most onerous aspects of FDA regulation.
A number of companies in our portfolio are positioned to bring cartilage therapies to market. These will be cells programmed to become cartilage and other connective tissue. BioTime (BTIM: AMEX) CEO Dr. Michael West, who will be speaking at the Agora Financial conference in Vancouver, already knows how to do this programming. Another company with its own IP library covering cartilage stem cells, is International Stem Cell Corporation (ISCO: OTCBB).
ISCO has just announced a major breakthrough validating their roadmap. I'd like to tell you about that great news now…
International Stem Cell Corporation Passes Critical Eye Tests
A real buying opportunity for investors who don't own ISCO has taken place due to this most recent market turn down. It may be that some investors were also spooked by the company's announced financing deal. While the details are actually extremely positive, it is simply the case that some traders will always interpret the issuance of additional stock as a bad thing.
In this case, it clearly was not. ISCO issued preferred stock, which cannot be converted to common stock. It cannot, therefore, dilute shareholders' equity. Moreover, the details of the deal, which are available on the Website, show that the company has locked in a current cost of debt but built in the possibility of reducing it in the future. Few companies are run as responsibly as ISCO and I have no concerns in that department.
The thing about ISCO that I think is over the heads of most analysts is that they own an entire stem cell platform that is equivalent to the sum of all other stem cell companies combined. While various companies share rights to embryonic stem cells and induced pluripotent stem cells, ISCO has the parthenogenic SC market to itself.
I believe that it will be possible to do almost anything with parthenogenic stem cells that you can do with any other stem cell. That includes rebuilding hearts, cardiovascular systems, cartilage, livers, eyes and so forth. This is true "rejuvenative" medicine with the power to radically increase healthy life spans, what Dr. Michael West calls "health span."
There are now two main tracks to true rejuvenative medicine. BioTime is the clear leader in the induced pluripotent stem cell space. ISCO is the parthenogenic equivalent. Both their potentials are so huge as to be practically incalculable.
We can, for example, calculate the market for cancer therapies. There is no way to calculate the value of increased health span. If people are willing to pay almost $100,000 for a few more months of non-healthy life, what will the market price for decades of healthy life be? That's what a new heart and vascular tree will deliver for most people. For that reason, I unabashedly consider BioTime and ISCO the two most important companies on the planet; even in history.
Certainly, they still have to prove themselves. For example, skeptics of the parthenogenic platform doubted that their retinal cells would graft naturally to normal retinas. ISCO proved that they do. Skeptics also pointed out quite accurately that these corneal tissues had not been proven to function the same as tissue from eSCs or ipSCs.
This is why ISCO's testing of the corneas is important. New tests have demonstrated several critical attributes of these parthenogenic cornea. Two sets of experiments conducted in collaboration with Absorption Systems proved that corneal tissue cultured by ISCO exhibits "topical drug absorption barrier properties and tissue-appropriate enzymatic activity, making it a promising model for studying human ocular drug absorption as an alternative to live animal testing."
In fact, we are talking about replacing Draize testing, the use of rabbits to test drugs, cosmetics, cleaning supplies and other substances for safety. It's difficult to overestimate the size of this market because it's basically impossible to tell how large it is right now. The reason is that nobody will talk about how many rabbits endure having chemicals inserted into their eyes. It's not good P.R.
Not only are animal activists aligned against the practice, the public at large really doesn't like it. No one wants to hear about this procedure. It's not, in fact, pleasant. Rabbits are bred and kept in captivity, then restrained in unpleasant bondage devices while irritating substances are inserted into their open eyes. You might remember that scene from Clockwork Orange. Regardless, though industry does try to minimize the test animal's discomfort, it is not pleasant to contemplate.
Until now, there's not been a practical alternative. ISCO's artificial human eyes, however, help clear the path to ending the use of millions of rabbits around the world for toxicity testing. This is a true transformational technology; better and cheaper. Artificial human cornea will provide more accurate tests of irritants. Moreover, ISCO's corneas cost a fraction of the total spent raising, keeping, feeding, and disposing of rabbits.
While no one would give me an estimate of the market size, I did find one indication. Europe's version of the FDA, the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), has stated publicly that it needs to spend about €270M and use 160,000 animals for eye testing just to catch up with the back-log of insufficiently tested agents.
With the validation that comes from this round of tests, ISCO is ready to move on to a final phase of validation. That should prove, once and for all, that ISCO has a more accurate, more humane and far less expensive alternative to the Draize test. Given the option of buying artificial corneas instead of live rabbits, I do not believe a company in the world would do otherwise.
ISCO has also announced a third party validation of the optical characteristics of their corneas. They now have evidence that corneas derived from parthenogenic stem cells bend light in the same manner as transplant corneas. This clears the path to exploiting the huge international need for corneas. In Asia alone, six million people are blind due to the lack of transplant corneas. North Americans can usually find a transplant, but ISCO's product will be cheaper when all the costs of acquiring transplants are considered. They will also be young, less subject to failure than an adult's cornea and grown in sterile lab conditions, guaranteeing their purity.
This market, like the Draize test market, is huge. I've also been hearing excellent things about the company's cosmeceutical development. ISCO's relentless methodical advance toward the marketing of stem cell products and true transformational status continues.
I'm so over my word limit. I'm going to cut this short now but I'll have much more for you next week. Who knows, I might even get around to some economic analysis.
For transformational profits,
Patrick Cox
To learn more about Patrick Cox and Breakthrough Technology Alert please click here. © 2010 by Agora Financial, LLC. 808 St. Paul Street, Baltimore, MD 21202. All rights reserved. No part of this report may be reproduced by any means or for any reason without the consent of the publisher. The information contained herein is obtained from sources believed to be reliable; however, its accuracy cannot be guaranteed.
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