I asked Ocata CSO, Bob Lanza, for a comment on the big news of the acquisition of the company by Astellas.
Here’s what he had to say:
“I can say that this is an exciting time for regenerative medicine. The merger should greatly accelerate the pace of discovery, and, I hope, lead to treatments for a long list of diseases.”
The day after hearing the news, I myself feel a bit more optimistic that Astellas will continue this important work and help patients with vision impairment as well as other diseases.
Lawsuits resolved by dilution. Endless stock option dilution right up to the buy out ( buyout bonus for insiders ) . 100:1 stock splits. Stock holders retain no ownership in any way whatsoever of research they paid for. The only logical takeaway is that there was no one in the Boardroom representing us peons on the street.
Lanza addressing issues here. Currently he can not. Federal security and exchange laws prohibit him from commenting on any of this.
This isn’t especially surprising to me. And to play devil’s advocate, why should a biotech company with a middle-of-road tech (maybe I should say “gud enuff” instead) and a somewhat “meh” trial care about its outside stockholders? (Honestly, I don’t particularly care what John Gurdon thinks.)
As a more serious comment regarding the tech and the science here, please keep in mind that one of the things Asterias (Geron, but resurrected with you know, the actual original management that actually cared about stem cell therapies) is working on is generating RPE sheets for transplantation in combination with BioTime. Given the relative costs of such a therapy and that Ocata was already pretty far along when Asterias started on this project, one infers that Asterias/BioTime did not view Ocata as even a serious rival.
Last thing, perhaps something that the investor and layperson type folk aren’t aware of,we in bioscience (academic side) make an absurdly small amount of money for the time we put in. Grad students are roughly 34k a year, which is taxed, postdocs roughly 44k a year starting. Some areas, yeah, you can live on that. Some areas, you can’t. In my area, being a grad student qualifies you for food stamps. The point is, we don’t go into this for the money. The other point, we as a whole don’t go into to this necessarily to specifically help patients. Some people do. For a lot of others, that’s just another box to tick off when you apply for grants (which also at this time have basically become a lottery).
If I was in Lanza’s place, I would have done exactly the same thing.
Hi Jeanne,
I hope you are right about this being a good move. As I just posted, Astellas is part of a multi-trillion dollar holding company…more financial stability, but awfully huge.
Paul
Paul-
As a scientist I loved being in biotech- being an academic is sometimes like living on an island alone and having to kill what you eat. But in a small company, no matter how noble your intentions, the only important thing is to make money for the investors. That is a tremendous burden for the scientists.
I think this move is good for the science and for the patients. It takes the pressure off the scientists to make money, and it’s hard to both do good science and make a profit.
Jeanne
Plain and simple – the company was cheaply valued, and Astellas wanted it – $379 MM is a drop in the bucket for a company like them – keep in mind they’ve made upfront payments in licensing deals in that range in recent months – the bigger issue to be concerned with is now that is becomes an internal asset, will it get lost in the current pipeline, which has dozens of other candidates vying for resources and $$ – time will tell
Really interesting quote and discussion on this. Hopefully Dr. Lanza will be able to fully address the issues being raised here.
Knoepflerr, you seem to have no idea about the dynamics of the transactions and its players inside and outside…and you still rush head-on to blog about the deal as if you have some profound insights, which you do not. Saying Ocata is a prime target for acquisition is stating the obvious, given its troubles to keep the lights on for some years now.
But what American public will be interested is how the research/technology output funded by millions and millions of US tax payers’ dollars, in the form of federal research grants and business grants, are now benefiting Japanese company and their share holders, not to talk about the intellectual property funded by American citizens. Do you not think the money should be returned to NIH and other funding agencies in such an acquisition scheme and the IP should be retained by NIH or the funding agency? Plenty people walked away with heavy pockets stuffed with shareholders money in this deal, but the real people who funded this company’s executive management and the research have no future in this company or in the deal made. Do you think this is greed and lining their own pockets?? or do you think this is perfectly justified. Do you think you would support it of Stem cell Inc also follows a similar road?? How do you think this will effect the cost of treatment to our fellow Americans if this were to become a successful treatment? These are the issues patients and common people are most interested in, IMO, and not patting the back of Robert Lanza, who I am quite certain will do just fine.
I hope the new company will spend much, much money into research, because we need much more research in the stem cell field to see the biggest revolution in medicine. If the do so, this will be a great deal for all.
@Cathy – there must have been many factors in the pricing and that surely includes competition, but I don’t think we need to lay it wholly at the feet of US industry fearing the “unholy ESC”. Nobody was asking why no US companies came in for CDI when Fujifilm holdings acquired them.
That Ocata was ready to enter into such a deal in the first place says something about their capital reserves, development timeline and overall vision – after all they are still in a very early stage if they want to transplant photoreceptors and RPE together (according to Lanza).
I agree with most that the price seems low, but the stem cell bubble is a science bubble not an investment bubble – not yet.
Is it just me,or does Dr. Bob’s statement sound more like it was written by his new Japanese attorney?
Just a few more thoughts about dis.
My first thought was disbelief,my second was disgust.I consider Dr.Bob and Ocata a National Treasure,not something you sell off to some foreign entity like it’s a loaf of bread.This is also a National economic security issue because Ocata’s technology is groundbreaking and would of most certainly helped control our out of control medical cost well into the future.Blindness,platelets,blood,M.S.,Crohns and Lupus for just a few.Hopefully for me a treatment for Parkinsons.
Sayonara I guess?
My next dis is disrespect for the thousands of investors who for all these years invested and supported ACTC and their numerous crooked management teams who helped themselves to a lot of those millions and who led us to this most disastrous result.Tens if not hundred of millions of AMERICAN’S dollars will now benefit a foreign corporation.Right wing conservatives must be dancing the Irish jig.
\ And finally our governments disregard for it’s citizens and their health.Stopped progression in 17/18 patients,improved vision in 10/18 even though they were almost beyond blind.And no safety issues whatsoever except for the immune suppression which Bob says is not needed,yet the regulators (FDA and NIH)impose even more draconian measures to slow or stop this technology from helping patients.
You really can’t blame them I guess,disregarded by the very people he’s trying to help.
Paul and some of you other well known scientists need to man the phones and call everyone you can think of to try and stop this travesty.Certainly there must be patriotic American with the means and the forward vision to not let this happen.
I feel like my grandfather died and some 22 year old gold digger secretly married him and stole my inheritance.
Thanks Paul for all you do,
Edward
It’s posted on the ICELL board, check posts for Anise.
Dr. Knoepfler. I agree that stakeholders and leadership have only partially aligning objectives. However, stakeholders finance and make possible these wonderful advances in medicine.
The actions of the Board of Directors at Ocata Therapeutics are self-enriching and another slap in the face to long-term shareholders. Not only does this mentally deter stakeholders from investing in other biotech companies, financially we are now do not have the funds to do so.
I am glad the science will continue and will hopefully benefit those who need it.
@Scott,
I definitely see your points.
Investors and their goodwill also are indeed key to all this great stuff we are trying to achieve collectively in the stem cell field and the work at specific biotechs.
It may take some time, but I expect at some point we will have a much clearer picture of what went into the decision-making process for the sale of Ocata and we can evaluate the decisions that were made.
Best,
Paul
A company such as Ocata as well as numerous others like it have many stakeholders and leadership with only partially aligning objectives.
If you play the share market it is all about risk and rewards. You tell me any company where the management has looked after it shareholders on an equal basis as it has them selves. They pull the strings and we are the pawns and pick up the crumbs while the big boys make the money.
If Ocata cared about the Long term shareholder….give us shares in the new company and the premium.
Thanks Paul
I’m going to quote what I wrote on this subject on the ICELL board, because I think it sums the entire thing up at this point:
“Because this thread moves SO fast, I’m probably going to repeat this a few times. here it is again. for anyone wondering if Ocata’s science really is all that great– the answer is yes. Here’s a quote from BF that exemplifies the question:
“2) The science was just OK or something else popped up in the results and in the end 8.50 was the best management felt they could get?”
I don’t blame anyone else for not doing the DD I did on the science end— it’s taken literally HUNDREDS of hours over the past few years, huge chunks of time invested in research and reading, constant searching, long trips to university libraries, etc etc etc. I’m not in the hard sciences. I do have an MSW, which means that I know how to do research, but the amount of work has been unbelievable.
But I have done the work and the DD, and I can tell you that the science just does not get better than this. The current situation is NOT happening because of problems with the science… which is why I will personally follow that science wherever it goes. So why did it happen? Lots of reasons, I’m sure, but the main one is fundamentally something I try to never ever talk about on forum boards unless that is specifically the point of the entire forum. I think I’m going to write a long post on my blog and link to it. So there’s a reason, all right, and it’s a very sad one, but it has nothing to do with the basic quality of the science and research involved. And IMHO, it’s the reason why Dr. Lanza went along with this thing. I’ve read so much of what he’s written, and I really think he’s doing it for the patients. Okay, I’m lacing up the Nikes and starting to run now… don’t throw things until I get a head start! ;)”
Hi Cathy,
What is the main reason in a nutshell?
Paul
I have the utmost respect for Dr. Lanza, but if I could, I would ask him “What do you think about the LONG term investors in ACTC and OCAT that kept the lights on and your “water cooler” in place? I know many who are way under water while OCAT executives and BOD walk away with millions, some in only a year or two or three. No wonder people don’t trust Wallstreet. I am happy to see the science progress for the sake of mankind, but I feel the company has been disingenuous (at the very least) with the shareholders, treating them with such disdain.