The last few years for the publicly-traded stem cell clinic biz, US Stem Cell, Inc., which goes by the ticker $USRM, have seemed like a rollercoaster to me as an observer.
I can see four main areas of news that to me make the future seem uncertain for this firm.
First, the US Stem was linked to the alleged blinding of some of its customers in 2016, faced two lawsuits (now settled) on that front, and now has to deal with a third lawsuit.
Second, probably in part because of the above, the company was visited by the FDA last year. Following the inspection, it received a warning letter (to its direct-to-consumer clinic business US Stem Cell Clinic) from the agency detailing a number of observations (FDA-speak for issues it sees after a visit as needing to be addressed). The uncertainty from this letter is still kind of hanging out there. US Stem Cell has some important philosophical differences with the FDA on certain points such as whether fat stem cells are a drug requiring pre-market approval.
Third, USRM was prominently mentioned in a letter a few days ago from powerful U.S. Senator Chuck Grassley addressed to the Dept. of HHS and to the FDA. The letter asked 7 probing questions in part related to the issues raised by the first two points I mentioned above in this post. The deadline that Grassley asked for a response is in less than a week so this adds more acute uncertainty.
Fourth, the company reported in its recent corporate filing that it recently received a subpoena from the SEC:
“On or about March 1, 2018, the U.S. Securities and Exchange Commission (“Commission”), Miami Regional Office (“Commission Staff”), served a subpoena upon U.S. Stem Cell, Inc., which seeks production of certain documents and communications including, among other things, minutes and other documents relating to the Company’s board and audit committee meetings, financial statements, and press releases. The Commission Staff is conducting a formal non-public, fact-finding inquiry of U.S. Stem Cell, Inc. This investigation is neither an allegation of wrongdoing nor a finding that any violation of law has occurred. The Company is cooperating with the Commission Staff and has provided, and will continue to provide, information and documents to the Commission Staff.At this juncture, the Company is not able to predict the duration, scope, results, or consequences of the Commission Staff’s investigation. There can be no assurance that this inquiry will be resolved in a manner that is not adverse to the Company.”
It’s hard to say without more information what the deal is with this SEC subpoena. Anyone know concretely what is going on with this?
Also, in the bigger picture what do these 4 recent events mean?
We’ll probably have a better sense in the next 3-6 months about the company’s future.
Disclosure: I have no financial stake in USRM or any of its competitors.
Senator Grassley has used his powerful position to move the FDA, SEC, Dept. HHS, U.S. Department of Justice because of the treatment of three elderly ladies suffering from macular degeneration, while Harvard Medical School has admitted outright that their internal investigation has shown that millions of dollars of taxpayer dollars have been spent producing fraudulent research. “This body of work has, for better or worse, been hugely influential,” said Eduardo Marbán, director of the Smidt Heart Institute at Cedars-Sinai Medical Center. “Despite the fact that several prominent laboratories failed to confirm key findings, c-kit positive heart cells were rapidly translated to clinical testing in heart failure patients. … One can only hope that no patients have been placed at risk in clinical trials based upon fraudulent data.”. Read the article published by The Washington Post titled “Harvard investigation finds fraudulent data in papers by heart researcher” by Carolyn Y. Johnson October 15, 2018 at 6:00 AM
Where does Senator Grassley stand on the fraud committed by Harvard Medical School, the misuse of millions of Federal dollars, and the possible harm caused to untold number of patients? Will the good Senator engage the Food and Drub Administration, the U.S. Department of Health and Human Services and the U.S. Department of Justice?
I think the FDA’s response was to bring in the DOJ. From the SEC filing, just below the statement about the SEC subpoena:
“Government Inquiry
By letter dated March 22, 2018 and provided to the Company on March 25, 2018, the Company received correspondence from the U.S. Department of Justice explaining that the U.S Food and Drug Administration believes that the Company (along with U.S. Stem Cell Clinic, LLC and Kristin Comella) violated the Federal Food, Drug, and Cosmetic Act. In this correspondence, the U.S. Department of Justice offered to settle the purported violation if the Company agreed to terms, including an injunctive action. The Company has retained counsel and authorized counsel to commence discussions with the U.S. Department of Justice and believes, but cannot guarantee, that a favorable settlement will be reached. The Company is not able to predict the duration, scope, results, or consequences of the U.S. Department of Justice discussions. There can be no assurance that this matter will be resolved in a manner that is not adverse to the Company.”
https://www.prnewswire.com/news-releases/market-demand-for-stem-cell-treatments-driving-steady-increase-in-usrm-sales-300635305.html
Earlier this month, USRM opened its third partially owned standalone clinic in the United States, the newest location at The Villages in North Central Florida (the two existing clinics are in Sunrise and West Palm Beach, Florida). The Company continues to identify opportunities for clinical operations worldwide.
What can you do, Bill? Our 30th President of these United States (Calvin Coolidge) once opined that the business of America is business. And medicine as well as research seems primarily driven by money. I wish it wasn’t. I wish there was something believable about watching Doctors and laboratory types in action on television with the health of the patient and public safety as their primary motivating factors. But money seems the driving force more often than not. I think of war in a similar light. A purpose of medicine may be to serve the patient. But the very nature of medicine/and research (as well as war) in this economic system seems best poised to serve itself.
Where’s the letter written by US Stem Cell Clinic’s CSO Kristin Comella, PhD to the FDA in response to their “Warning Letter’? Just a little research on your end should uncover the letter. In fact, here is the link http://usstemcellclinic.com/fda-response
David,
I embedded that same link in this passage in this post in those bolded words:
‘The uncertainty from this letter is still kind of hanging out there. US Stem Cell has some important philosophical differences with the FDA on certain points such as whether fat stem cells are a drug requiring pre-market approval.’
Paul
It is sad that the FDA never responded to Dr. Comella’s letter. If the FDA really wants to expedite treatment solutions to American’s suffering from medical issues, you’d think that they would engage one of the world’s most prominent scientists in the stem cell space.