Stem cell therapy is quietly entering areas where it provides improved or alternative therapeutic results. Cytori is showing continually improved study and anecdotal results in breast reconstruction with adipose stem cells, a result which implicitly includes the creation of new blood vessels. If positive results continue, breast reconstruction is going to be an excellent market for Cytori, one already generating the lion's share of its current revenues, and one in which it is clearly establishing a leadership position.
One of the things that has impressed us about Cytori is its reasonably successful drive to brand itself and its Celution machine as THE source of adipose stem cells. Cytori is trying to identify itself with adipose stem cell solutions, whatever they might be and wherever they might be found. While research and tests with adipose cells have had favorable results in a variety of areas, there are not yet any broadly accepted clinical applications -- breast reconstruction being the closest.
Cytori's is a broad brush approach to branding and is probably the result of the early partnership with Olympus. which company should soon be the sole manufacturer of the Celution device through their joint venture. Whatever the motivation, the company is to be congratulated for doing an excellent job of identifying itself with potential adipose stem cell therapeutic applications, at least in the eyes of investors, even if occasionally management's eye on branding results in press releases that are a bit of a stretch as to the potential significance of the results.
Because regenerative medicine is an entirely new field of research and therapeutic application, companies are following many different avenues to get from the laboratory to the doctor's office or operating room.
Some go the FDA clinical trial route. Others go after the easier to obtain CE Mark in Europe. Still others affiliate with Asian companies for therapuetic application in Asia. Some culture cells with a variety of growth factors to create scalable products. Others manufacture equipment that extracts, processes, places, or preserves stem cells. The only point of care products which remove stem cells, process and make them available for immediate therapeutic placement back in the body, whether in a doctor's office or the operating room, are the equipment makers or distributors. Within our Stem Cell Sector, this includes Cytori Therapeutics, Thermogenesis Corp., and BioHeart Inc., all of which distribute and sell a point of care therapeutic device.
Cytori and Bioheart sell equipment that extracts and processes adipose stem cells for point of care therapeutic application. Bioheart Inc. has the exclusive right to distribute Tissue Genesis's (a privately held company partnering, so far, with Bioheart Inc.,VetCell, and Spine Smith LLC in defined "field of use" applications including specifically heart, veterinary and orthopedic therapies) cell processing device, the TGI 1200. Bioheart's license is limited to heart related applications, VetCell's to veterinary, and Spine Smith's to orthopedic. Thermogenesis Corp. is also partnering with a subsidiary of SpineSmith's, Celling Technologies, in orthopedic applications.
While Cytori sells the Celution System for adipose stem cell processing, Tissue Genesis's TGI 1200 system does basically the same thing. It is a "compact, fully automated cell isolation system for the rapid processing of patient-derived fat tissue to separate, isolate and produce large yields of endothelial progenitor cells and stem cells. The fat tissue is extracted from the patient using a minor liposuction-like procedure and processed using the TGI 1200. TGI 1200. The TGI 1200 system produces stem cells from adipose tissue in about 1 hour."
At this stage no one knows which type of cell, cultured, adipose derived and processed at point of care, or peripheral blood or bone marrow derived and processed at the point of care, will be the most medically effective and cost efficient for broad applications. Perhaps all will be, that is yet to be determined.
So covering all the bases, the Cytori historical approach, seems to be a good idea. That said, so far, no one has stepped forward to make a deal with Tissue Genesis in the arena of adipose stem cells for cosmetic application. And this would seem to be a logical opportunity for both Tissue Genesis and Thermogenesis to explore.
Tissue Genesis, being a privately held company, has limited ability to take advantage of world wide sales and distribution, especially given Cytori's head start in marketing and the Olympus partnership. Wisely, they've gone the route of partnering with companies exploring commercial distribution for various therapeutic applications. At the recent Rodman and Renshaw presentation, Thermogenesis' new CEO, Mel Engle, made it clear that Thermogenesis is also interested for the first time in looking at partnering opportunities. Cosmetic surgery would seem to be a logical avenue for a partnership since Thermogenesis' blood and bone marrow stem cells are least likely to find an appplication there. We'll be glad to make the phone calls for a small fee guys!
Thermogenesis entered the stem cell arena by providing top of the line equipment for cryopreserving cord blood stem cells. About three years ago, it came out with a completely automated system for processing cord blood called the AXP AutoXpress which was a very successful seller until it ran into quality control problems in its single-use bags (a problem that has been solved). The bag issue, among other things, resulted in a managment shake up and the CEO was replaced about six months ago. Just before Mel Engle arrived on scene as the new CEO, the company introduced the MarrowXpress, a device based on the AXP that processes bone marrow.
In July, the company introduced RES-Q, a point point of care device which processes bone marrow stem cells in about fifteen to thirty minutes. According to the new CEO this product can easily be adapted for platelet rich plasma, cardiovascular and oral applications. In other words, Thermogenesis has announced to the world that it is moving outside the cord blood market into the universe of potential blood and bone marrow stem cell applications.
As noted, Tissue Genesis is trying to reach commercialization through partnering. So far that is Bioheart, Vetcell and Spine Smith. Bioheart, like many development stage companies, has to raise capital fairly regularly, which isn't easy in the post Lehman environment. Right now its resources are being concentrated on the beginning of a stage one trial for MyoCell SDF-1, which is a composition of myogenic stem cells derived from a patient's own thigh muscle that has been modified to over express the SDF-1 protein and does not include the use of Tissue Genesis's TGI 1200 adipose processing system. Thermogenesis and Tissue Genesis are competing in the Spine Smith orthopedic arena. A partnership with Thermogenesis might prove very interesting to the future of both companies.
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