November 28, 2020

The Niche

Knoepfler lab stem cell blog

Wall Street Weirdness Over Stem Cell Biotech Intellicell (SVFC)

Intellicell SVFC volume 2013

What the heck is going on with Intellicell Biosystems, Inc. (SVFC, also SVFCE), a stem cell corporation run by Dr. Steven Victor?

Why are some on Wall Street seeming so bullish on the company lately?

What’s the real story and the facts?

What is the key background on this company?

Wall Street has been buying and selling this stock in a frenzy of activity pushing volume up dramatically (see bottom chart above from in the last month even as the company has faced mostly bad news from my view and a collapsing stock price (upper chart).

An example of the bad news is that Intellicell has had to deal with some litigation (more here) and has in addition been facing FDA scrutiny including a serious action called an “FDA warning letter”.

More recently, Intellicell was reportedly again inspected by the FDA in May-June of this year.  About a month ago, I contacted Victor to ask for the release of a recent FDA inspection report of Intellicell or to see if he’d answer some questions, but he did not reply.

While the price per share (PPS) has fluctuated day-to-day a great deal, overall it has not substantially recovered from a broad perspective. For the past 12 months, the stock PPS has tanked, down more than 6-fold. Investors in the company in some cases have lost a lot of money.

However, over the last month the stock has bounced up somewhat, up 2-3 fold (although down a great deal the last two days).

What the heck is up with that?

There has been some very up-beat talk on Wall Street including an interview piece featuring Jason Kolbert of the Maxim Group, who seems bullish on the company:

“I’d like to talk about IntelliCell BioSciences—and I know this will be controversial, only because its CEO, Dr. Steven Victor, is also the founder of ReGen Medical. ReGen Medical is a state-of-the-art hospital in midtown Manhattan that provides stromal vascular fraction cellular therapy, which contains stem cells, to patients today. The hospital is a beautiful, brand-new facility that treats high-end patients.”

This seems like very enthusiastic talk considering the overall picture for Intellicell is quite complicated.

Kolbert goes on to make very definitive statements regarding regulatory compliance matters for the company that to me seem overly simplistic and surprisingly upbeat:

“The therapy is provided to patients through physicians (orthopedists, urologists, plastic surgeons, etc.) that have practicing rights at ReGen Medical. The clinicians are allowed to put a patient’s own cells back into his or her own body, provided the cells are not manipulated, processed or expanded. This is in accordance with the FDA’s “minimal manipulation and homologous use” rule.”

That sounds like company boiler plate verbiage to me.

In fact, the question of whether Intellicell’s product is compliant with the FDA’s minimal manipulation definition seems, at least based on publicly available information, to be far from resolved. It is quite possible the FDA will determine the product is more than minimally manipulated. Update: I would also note in regards to the issue over whether Intellicell’s product is a drug/more than minimally manipulated that in the FDA warning letter last year to the company, the FDA stated that Intellicell’s product was a 351 drug and was more than minimally manipulated.

It is also not at all clear that the FDA will view the use of the Intellicell stem cell product as homologous use. Thus, in my opinion, Kolbert’s statements about Intellicell seem too cheery and could end up being flat out wrong. We just don’t know.

Interestingly, Kolbert also says the company uses stromal vascular fraction (SVF; emphasis mine):

“The IntelliCell process, branded IntelliSonics, is similar to the Cytori process in that they both use lipoaspirate. But the IntelliCell process produces a different cellular population because, with its sonification (ultrasound) process, the blood components are not washed out. The stromal vascular fraction of IntelliCell contains the hematopoietic cells. The final product is quality-controlled, checked for any contamination and cell viability is measured.”

That is a big can of worms.

You see, the FDA has defined SVF as more than minimally manipulated (aka a drug; see actual FDA letter to address this question at the bottom of the page at this link)) and that would suggest that Intellicell’s stem cell product is a drug, which could be very problematic for the company, which argues its product is not a biological drug.

It seems that the eventual release (hopefully sooner rather than later) of the most recent 2013 FDA inspection report will tell us a great deal about where this company really stands and the prospects for the future.

Disclosure: I have no financial interest in Intellicell.

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