Stem cell company Intellicell facing new financial wrinkles

IntellicellIt’s difficult to make it as a biotech company, I would say stem cell biotechs in general may have an even rougher time, and one such company,  Intellicell (Intellicell Biosciences, Inc), is showing a number of signs of distress in my opinion.

An online financial tool predicts the probability of companies going bankrupt within the next 24 months. For Intellicell it estimates a greater than 96% chance of bankruptcy. By comparison another stem cell biotech, Stem Cells Inc., has a less than 1% change of going bankrupt.

How accurate are such tools?

I don’t know, but in a general sense perhaps they can point to concerns about instability.

What’s up with Intellicell these days?

By way of background, in March of 2012 Intellicell received a warning letter from the FDA.

The letter, addressed to Intellicell CEO Dr. Steven Victor, indicated many concerns including more than minimal manipulation of the company’s stem cell product.

I’m not aware of any info indicating that Intellicell has resolved its issues with the FDA. (Intellicell, please fill us in on the status of this situation please!) Note that I have made several attempts to contact Intellicell for comment on their situation before posting this, but have not received any reply.

Intellicell has made a number of filings of events with the SEC recently including one about a week ago detailing (A) departure of an important leader, John Pavia (Senior VP) and (B) a possible eviction notice.

Further, a search of the New York State Supreme Court Records found 5 current or recent cases in which Intellicell is a defendant.

The plaintiffs include CRAGMOONT CAPITAL LLC, MARC J GOLDSTEIN LITIGATION &, EINWOHNER ETHAN, SHERB & CO LLP, and JKT CONSTRUCTION INC. They are asserting that Intellicell owes them money.

One plaintiff, JKT/Corcon construction, alone claims to be owed “$442,344.03” by Intellicell for services it provided.Dr LookGood Victor

Defendants in the cases include Intellicell, Dr. Victor, Angela Metelitsa (apparently Vice President of business administration at Intellicell), and Anna Rhodes Victor (Dr. Victor’s wife).

SEC filings indicate yet another case beyond the 5 above with a plaintiff “Menachem M. Bluming” seeking $680,000 in damages. Dr. Bluming appears to be another physician.

What does the future hold?

Of course in any legal case the defendants, for example Intellicell, Dr. Victor, and others here, are innocent unless proven otherwise. In addition, another reason not to count him (or Intellicell) out by any means is that Victor has persisted despite past lawsuits. For instance, New York Magazine did a feature on lawsuits against Victor way back in 2008 (see pic above from that piece).

Let’s see how the company navigates these waters in the coming months. I think there will be lessons for the stem cell field no matter how it goes.

Disclaimer: this post is not intended as financial advice.

6 thoughts on “Stem cell company Intellicell facing new financial wrinkles”

  1. Pingback: Wall Street Weirdness Over Stem Cell Biotech Intellicell (SVFC) | Knoepfler Lab Stem Cell Blog

  2. Pingback: Intellicell Inspected By FDA: What Does It Mean? | Knoepfler Lab Stem Cell Blog

  3. Thanks to the Author…and also thanks to the post by ‘Willis Reed’ dated the 7th May 2013. I was just about to pay a large sum for stem cell treatment at a clinic that used this same process. The reason I picked this clinic is because of the high yield of stem cells they could offer over other clinics.

    It appears to me now that this is clearly false advertising on Intellicell’s part. Yet if such a procedure were to prove clinically beneficial without adverse effects then perhaps we would still hail this as some kind of breakthrough…perhaps its all in the mix! For me I will keep my money for now….and suffer a bit longer and watch to see how this all pans out.

  4. Intellicell claims their patent-pending non-enzymatic ultrasound fat dissociation procedure yields many more stromal cells from fat tissue than well-established enzymatic methods. They state that they can isolate between 500 million and 1.4 billion stromal cells from 60 cc (54 grams) of fat tissue. The following statements come from a press release on January 11, 2012, “IntelliCell’s process is a patent-pending non-enzymatic method for deriving stromal vascular fraction from 60cc’s of adipose tissue. This process dramatically increases the yield in manufacturing stromal vascular fraction compared to the present enzymatic methods in use today. IntelliCell’s process generates between half billion – 1.4 billion SVFC cells from 60 ccs from a patient’s own adipose tissue. This is approximately 10-20 times greater than enzyme based methods.”

    Scientific Questions
    A comprehensive analysis of fat tissue published in the International Journal of Obesity described absolute cell numbers (from both adipose and stromal cells) found in fat from breast reduction surgery. The data were from 189 subjects. The mean stromal cell number per gram of fat was 289,632 with a standard deviation of 120,369. This translates into around 15.6 million stromal cells from 60 ccs of fat tissue (density of 0.9g/ml 60cc=54 grams). Using the 500 million to 1.4 billion numbers in the press release means that the company is claiming to derive 32 to 89 times greater cell yield than found in this study.

    In a press release dated September 26, 2011 the company stated that they had “executed an exclusive supply and sale agreement with Millipore Corporation, a global leader in innovative tools and technologies for bio-manufacturing and life science research, to sell and distribute the guava® flow cytometry platform into the area of SVF.”

    An assumption can be drawn that the company is using Millipore’s Guava® flow cytometer to measure the number of cells they are claiming to isolate from fat tissue. There is a youtube video showing a doctor in Texas with a Guava PCA EasyCyte flow cytometer in his lab. The video also shows a close up of an ultrasound device that the doctor says is used for “a mechanical agitation to release the stem cells from the fat.” The device has the name Hielscher on it—model number UP200S. Found on the website is this description: “The ultrasonic lab devices UP200H (200W, 24kHz) and UP200S (200W, 24kHz) are well suited for all general ultrasonic applications in small and medium scale. The applications include: Homogenization, disintegration, emulsification, cell disruption, degassing or sonochemistry.”

    The UP200S is sold to industry for the creation of liposomes for cosmetic and pharmaceutical uses. The company recently put out the following white paper: “Hielscher Ultrasonics: Ultrasonic Liposome Preparation for Pharmaceuticals and Cosmetics.”

    Mechanical or ultrasound disruption of fat tissue will produce liposomes. Mechanical or ultrasound agitation of lecithin (a combination of fatty acids, triglycerides and phospholipids) will also produce liposomes. Liposomes are made of the same materials (phospholipid bilayer) as cell membranes and have the same laser light scattering characteristics. Liposomes known as multi-lamellar vesicles have a diameter of 0.1-10 microns. Stromal cells from adipose tissue have diameters between 5 and 12 microns.

    Recently an analysis of purported stromal cells isolated from 60cc of adipose tissue using a mechanical dissociation in the presence of lecithin was performed. After mechanical dissociation and centrifugation the “cell” pellet was analyzed using a Guava PCA flow cytometer along stained using the Guava ViaCount Reagent. The following is a description of the reagent on the Millipore website: “The ViaCount Assay distinguishes viable and non-viable cells based on differential permeabilities of two DNA-binding dyes in the Guava ViaCount® Reagent. The nuclear dye stains only nucleated cells, while the viability dye brightly stains dying cells. This proprietary combination of dyes enables the Guava ViaCount Assay to distinguish viable, apoptotic, and dead cells. Debris is excluded from results based on negative staining with the nuclear dye.”

    The cell count after this process was 1.2 billion cells at 98% viability—in line with Intellicell’s claims. The cells were then examined under using a fluorescence microscope. Most of the “cells” were liposomes with the membrane slightly staining with the dye that is supposed to stain the nuclei of all cells. There were a few true cells containing nuclei that were more intensely stained.

    Subsequently another experiment was performed which did not use fat, but only lecithin. 0.5 grams of lecithin was suspended in 5 cc of PBS. That was added to another 10 cc of PBS and vigorously agitated by repeated robust passage of the emulsion from a syringe through a luer lock fitting. The emulsion was centrifuged and the cell pellet was washed twice and resuspended in 1ml of PBS and stained using the ViaCount Assay and analyzed using the Guava PCA flow cytometer. The result was 10 million “cells” per ml with a viability of 97%. 9.7 million viable “cells” without a cell in sight.

    If a machine is counting non-nucleated liposomes as “cells” and counting dead cells as those that have stained nuclei, the “viable” cell count would be falsely high. For example, if the machine reports 1 million events as cells, and only 2.4% of those events are cells and the remaining 97.6% are liposomes, even if every true cell is dead, the viability will be reported at 97.6% because none of the liposomes have nuclei.

    In another study by an independent laboratory (using a different flow cytometer) of lecithin/mechanically extruded “cell” isolation found that 2.4% of the events found in area of the laser light scattering characteristics (forward and side scatter) where cell populations are normally gated.

    2.4% of 500 million and 1.4 billion is 12 and 33.6 million respectively—falling in that range is 15.6 million—the number of stromal cells expected from 60cc or 54grams of fat tissue according the International Journal of Obesity paper.

  5. Three years ago online analysts were foretelling the doom of ACT a few weeks from their prediction. I don’t know much about intellicell, but in general I tend to put little faith in these kind of rumors

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