Celltex and former partner RNL Bio/Biostar sue each other: what’s going on?

Celltex is a stem cell company in Texas most well known for Guv Rick Perry’s stem cell transplant.

The Celltex business model is to isolate, amplify, and bank patients’ stem cells for subsequent treatment by physicians (for more background including on the FDA role see here and here).

Until the last few weeks, an important element of Celltex’s stem cell model was their partnership with a Korean company called RNL Bio, which ran the Celltex lab in Sugarland Texas that processed, grew, and stored the stem cells of Celltex patients.

RNL Bio, independent of Celltex, has been sued earlier this year for stem cell fraud in California.

Just Monday we in the stem cell field learned that RNL Bio or at least a highly related company called Human Biostar Inc (HBI) (for simplicity I will call these parties collectively “Biostar” from here forward, unless in a specific circumstance it is important to distinguish the entities) was suing Celltex for $1 million. The lawsuit filing can be read here (hat tip to Leigh Turner). Biostar alleges that Celltex owes them $1 million in unpaid bills and expresses concern that if they turn over the bank of human cells to Celltex, which lacks needed expertise according to Biostar, the cells will be at risk of being ruined.

Celltex has also filed suit against Biostar.

Celltex kindly provided me with a copy of their court filing against Biostar (PDF copy here.)

According to the filing, Celltex alleges that Biostar is holding more than 200 patients’ stem cells in a new facility inaccessible to Celltex. Biostar is, according to Celltex, asking for $1 million in return for the cells. One of the puzzling aspects here is that it would seem that Celltex and RNL Bio were in a contractual relationship for the stem cell business, but Celltex alleges that RNL Bio transferred the stem cells to the possession of Biostar and that Biostar says that RNL Bio and Biostar are independent companies. Thus, Biostar now has the cells, but since Biostar is apparently not RNL Bio, Biostar has no contractual obligations to Celltex. Confusing, huh?

In this regard, Celltex alleges that Biostar and RNL engaged in a conspiracy (see page 11, bottom, Count Two: Conspiracy to Convert Against RNL and HBI) to transfer and unlawfully hold the cells.

In addition Biostar is allegedly, according to Celltex, demanding (page 8 ) the firing of a specific former high level Biostar employee who is now employed by Celltex: Hyeonggeun Park.Not only that, Celltex claims that Biostar is requiring that Celltex aid in the deportation of Park.

Celltex goes so far in the filing to argue (bottom of page 8 ) “RNL and HBI’s conduct amounts to extortion.”

In the filing Celltex is asking for injunction to surrender the stem cells and at least $1.5 million in damages.

I am not a lawyer and I do not know the facts in these lawsuits so I can make no judgment on the cases. I believe that both parties must be presumed innocent of each other’s charges until proven otherwise.

However, I will say that a bunch of innocent patients are caught in the middle of what is a very messy situation.