It’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.
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).
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.