Advanced Cell Technology 10Q Financial Warning

Stem cell research, like any new technology, moves forth like a car with square wheels.  The companies in our stem cell sector are at various stages of either trying to bring stem cell treatments to market, develop stem cell research products to sell to big pharma and each other, or develop and market equipment to extract and preserve stem cells.  With much of the research unproven (outside of blood and bone marrow stem cell applications that have been used in treatment of blood cancers for decades, most research has happened in the last few years), companies are at various stages of trying to produce a positive cash flow and most must raise money from time to time.

A lot of venture capital money has gone into research on stem cell development and application, and it is still happening. For example, we recently posted about the Kleiner Perkins entry into the new field of Induced Pluripotent Stem Cell development. This, however, is not an easy time to raise venture capital if you're in this field.  And Advanced Cell Technology, one of our sector companies, and one with the ambition to be among the first to go to clinical trial with an embryonic stem cell derived application, is running out of cash.

The following is from Advanced Stem Cell's 10Q filed on July 14, 2008:

"Our human embryonic stem cell programs are in the pre-clinical stage, and our adult stem cell myoblast program has completed Phase I and Ib FDA clinical trials. Our prospects must be considered speculative in light of the risks, expenses and difficulties frequently encountered by companies in their early stages of development, particularly in light of the uncertainties relating to the new, competitive and rapidly evolving markets in which we anticipate we will operate. To attempt to address these risks, we must, among other things, further develop our technologies, products and services, successfully implement our research, development, marketing and commercialization strategies, respond to competitive developments and attract, retain and motivate qualified personnel.

"We will require substantial additional funds to continue operating which may not be available on acceptable terms, if at all.  We have losses from operations, negative cash flows from operations and a substantial stockholders’ deficit that raise substantial doubt about our ability to continue as a going concern. We do not believe that our cash from all sources, including cash, cash equivalents and anticipated revenue stream from licensing fees and sponsored research contracts is sufficient for us to continue operations beyond July 31, 2008 without raising additional funds." Italics and underlining are ours.

We will keep you posted as events develop.

From the Advanced Cell Technology SEC filed 10Q available here.