Clinic biz US Stem (USRM) may be kaput in matter of weeks or months

In a surprising development, the United States government (FDA and DOJ) and the stem cell clinic firm, US Stem Cell (USRM), Inc., that it has sued seeking a permanent injunction, have agreed on something!

According to new court records on Pacer (see screenshot), they have both given up on mediation in the federal lawsuit.

Further, they are both filing motions asking for summary judgment and asked for more pages to make their respective arguments.

Things are moving fast now. Everything is due tomorrow to the court.

A decision could be announced within a matter of weeks or months.

I bet that USRM will ask for dismissal of the case and the feds will ask for summary judgment in favor of a permanent injunction.

What will actually happen?

I believe USRM is probably going to lose. There are 2 reasons why. First, attorney Richard Jaffe, very experienced in stem cell legal matters and one usually representing clinic firms in the past,  already made the same prediction back on March 7 and has some important insights there as well as in his past posts regarding this case. Second, the FDA has prevailed in past similar cases such as US v. Regenerative Sciences, Inc.

Even with a likely appeal coming after that summary judgment, I predict USRM will be subject to a permanent injunction before the end of this year. No more fat stem cell injections. In fact, if as expected the government wins this case in weeks or a few months, USRM’s clinic biz could then be nearly immediately subject to the injunction so it could be done as a fat stem cell clinic within months.

In my opinion that would be a good thing given the risks to patients and other issues. Recall that USRM is a publicly-traded company that has been linked to the blinding of several patients, and is facing other problems such as an SEC investigation.

What if USRM unexpectedly wins this particular court case? Stranger things have happened in the stem cell world, but even if USRM pulls a rabbit out of a hat on this case, I’d imagine FDA would appeal and probably win there.  I’m no lawyer though so what do I know? Maybe a year from now USRM will still be selling fat stem cells for a host of health conditions and I’ll just be scratching my head.

While USRM has shown signs of maybe branching out into other unproven (but not technically noncompliant) areas of healthcare, it’s hard to imagine those efforts are going to generate much income. I’m going to do a separate post on what likely comes next for the company and its leadership after the anticipated shutdown. There could be more bad news for the company coming soon too that impacts their future.

What about the other big case, U.S. vs. California Stem Cell Treatment Center, Cell Surgical Network, et al.? That case has been quiet for months. But things aren’t looking good overall for the clinic defendants.

Also, if USRM loses, then Cell Surgical and friends will be facing even longer odds in their case. If they lose too, since Cell Surgical is a chain of around 100 fat stem cell clinics, a big question is whether they will all be subject to permanent injunction. We’ll see.

In the bigger picture, this precedent may give the FDA far more momentum to rein in some of the riskiest of the hundreds of other fat stem cell clinics selling unapproved stem cell drug products.

In my view, this is all heading in a more positive direction for patients and the stem cell field.

(Side note: Does the impending departure of Commissioner Scott Gottlieb have any impact or bearing on this? I don’t think so.)

Note: This post has been updated to fix a few inaccuracies and to be clearer.