In dark augur for clinic industry, court allows class action suit by 100s against Stemgenex

StemGenex court order class action lawsuit
StemGenex case court order awarding class action status to the lawsuit.

In the latest blow to the unproven stem cell clinic industry, a California federal district court judge just granted class status to a lawsuit against the fat stem cell clinic Stemgenex. (update: Stemgenex has since filed for bankruptcy).

What this means in practical terms is that the lawsuit alleging fraud in marketing by the clinic firm amongst other allegations will proceed and may have 100s of patients involved.

Many of these people paid nearly $15K per treatment to the company. Presumably some customers got numerous treatments from the company. As a result, millions could be at stake here if the plaintiffs prevail and if StemGenex, et al. must return payments to customers.

This is a huge deal and a somber warning of a sort to many other clinics selling unproven and non-FDA approved stem cells.

You can see a screenshot of the top portion of page 1 of the court order here in this blog post, which begins, “This is a complex and troubling case.

The firm representing the plaintiffs in this case Mulligan, Banham, & Findley, put up an announcement about the class certification on their website here.

From the news item, they wrote:

“On June 24, 2019, a class action was certified against a San Diego stem cell clinic, StemGenex, Inc., its owners and related entities.  The lawsuit claims fraud, false advertising and violations of consumer law relating to stem cell treatments aggressively marketed to people with a variety of diseases and medical conditions. Moorer v. StemGenex Medical Group Inc., et al., United States District Court for the Southern District of California, Case No.: 16-cv-2816-AJB-NLS, Hon. Anthony J. Battaglia.”

and further:

“The class is comprised of hundreds of customers throughout the United States, all of whom had the same type of treatment, a stem cell process which used each person’s own belly fat, and all of whom paid Defendants the same amount – $14,900 per treatment.   The Court ultimately agreed with the patients that their claims were suited for a class action, stating, “The questions asserted are common questions of fact and, as Plaintiffs acknowledge, the answers can apply to all class members in one swoop.”

You can see an example of the type of customer satisfaction infographic that was up at one time some years back on the StemGenex website at right indicating in my view a claim of 100% customer approval, but the plaintiffs argue that some customers including the plaintiffs themselves, told the company they weren’t happy.

Past screenshot from Stemgenex website of claimed 100% customer satisfaction.

In my opinion this class action lawsuit certification is terrible news for Stemgenex, but good news for patients and the stem cell field. The year isn’t even half over and already 2019 is in some ways the worst ever for unproven stem cell clinics more generally.

For instance, another fat stem cell clinic firm U.S. Stem Cell, Inc. just recently lost a federal lawsuit and had a permanent injunction placed on it. A strikingly similar case by the FDA is pending in California against a number of co-defendants including a network of scores of clinics called Cell Surgical Network. The suits are both focused at least in part on whether stromal vascular fraction (SVF) is a drug, its alleged misbranding and adulteration, and the scope of FDA authority. In my opinion (as a non-attorney I could be wrong), the clinic network is likely to lose its case to the FDA as well.

A variety of other patient lawsuits are in the works against many clinics and the suppliers of the clinics too.

So even as the number of clinics likely has never been higher, a tide of governmental and patient lawsuits and many resulting court victories or expensive settlements makes the future outlook darker for the clinic firms.

Note that StemGenex may be trying to put the past behind itself as it recently appeared to have reincarnated as a clinic firm by another name, Advanced Cell Medicine.

7 thoughts on “In dark augur for clinic industry, court allows class action suit by 100s against Stemgenex”

  1. Don ‘t throw out the baby with bath water. There are unscrupulous people in medical field but that does not mean stem cells do not work . They simply need to be tested for viability, efficacy, proliferation , differentiation and ,of course, not all stem cells are created equal in their regenerative capacity.

  2. Neil McManus allogeneic peripheral blood stem cell transplant recipient for AML leukemia July 2016

    4/27/18 YouTube interview of Donna Skerrett MD CMO for Mesoblast Ltd.: 

    Dr Skerrett has more than 20 years of combined experience in transfusion medicine, cellular therapy, and transplantation. She was Director of Transfusion Medicine and Cellular Therapy at Weill Cornell Medical Center in New York from 2004 to 2011, and previously served as Associate Director of Transfusion Medicine and Director of Stem Cell Facilities at Columbia University’s New York-Presbyterian Hospital. From 2004, she held various roles at Mesoblast in clinical and regulatory affairs and was Chief Medical Officer from 2011 to 2019.

  3. Neil McManus allogeneic peripheral blood stem cell transplant recipient for AML leukemia July 2016

    A copy of my latest message to Dr. Ryotaro Nakamura (I am under his care with regard to my cGVHD) at City of Hope.

    Nov 8, 2013 Biology of Blood and Marrow Transplantation: “Allogeneic human mesenchymal stem cell therapy (remestemcel-L, prochymal) as a rescue agent for severe refractory acute graft-versus-host disease in pediatric patients”  Kutzberg J., Et al.  

    Sep 19, 2016 Stem Cell Investigation: “Mesenchymal stem cell therapy for refractory scleroderma: a report of 2 cases” Terek Wehbe, Et al. 
    Nov 28, 2017 Therapeutic Advances in Hematology “New and emerging therapies for acute and chronic graft versus host disease” LaQuisa Hill, Et al. excerpt: “Mesenchymal stromal Cells.  Response rates in treatment of SR-cGVHD have been less robust,86,165,166 except notably in patients with sclerodermatous GVHD. The best reported response rate was seen in four patients with extensive skin scleroderma and ulceration who had significant improvement after four to eight treatments with MSCs.167 Lack of clear benefit in cGVHD may be due to significant heterogeneity in multiple aspects between studies.81 Well-designed randomized studies with standardized methods of source procurement, expansion techniques, and dosing schedules are needed to further clarify the role of MSCs in the treatment of GVHD. There are currently three trials underway evaluating MSCs for treatment of cGVHD (Table 5).”

    May 21, 2019 Case Reports in Transplantation: “Mesenchymal Stem Cell Therapy Overcomes Steroid Resistance in Severe Gastrointestinal Acute Graft-Versus-Host Disease”  Kyoko Moritami Et al.  
    So that one doesn’t need to use the link a quick quote follows below.The following from the beginning of the Abstract: “The authors describe the high effectiveness of human mesenchymal stem cell (hMSC) therapy to treat steroid-refractory gastrointestinal acute graft-versus-host Disease (aGVHD) in a 15-year-old boy with acute lymphoblastic leukemia (ALL). He received allogeneic hematopoietic stem cell transplantation due to high-risk hypodiploid ALL. Around the time of engraftment, he developed severe diarrhea following high-grade fever and erythema.  ……”
    The conclusion text: “While hMSC therapy for severe steroid-refractory GVHD is approved for coverage by the national health insurance system in Japan, the therapy itself is quite expensive, and physicians should take care when selecting cases to receive MSC therapy. In our experience, MSC therapy should be strongly considered for administration in pediatric patients with severe gastrointestinal GVHD, even after steroid pulse therapy.”
    “In conclusion, we had an excellent outcome when treating a steroid-refractory gastrointestinal GVHD patient using hMSC therapy. Even though the patient had life-threatening watery diarrhea, steroids were successfully tapered without a recurrence of symptoms. The immunomodulation and regeneration induced by MSC therapy might be more effective for the pediatric population because of their rapid tissue restoration. When encountering a pediatric patient with severe gastrointestinal GVHD resistant to steroid pulse therapy, MSC therapy administration should be given active consideration following stool-serum test and endoscopy to exclude the possibility of infection.”

    Latest development at Mesoblast Ltd. symbol on NASD: MESO 

    2018 annual report: 

    9/9/19 latest business development: 

    excerpt from annual report:   4.B Business Overview page: 42 of the annual reportMesoblast’s leadership in the development and commercialization of allogeneic cellular medicines is based on its disruptive technology platform, proprietary manufacturing processes and multiple Phase 3 assets.Our off-the-shelf product candidates target advanced stages of diseases with high, unmet medical needs.Three product candidates are being evaluated in Phase 3 clinical trials for approval by the United States Food and Drug Administration (FDA):MSC-100-IV (remestemcel-L) for steroid refractory acute graft versus host disease;MPC-150-IM for advanced heart failure; andMPC-06-ID for chronic low back pain due to degenerative disc disease.We also have a promising emerging pipeline of products for follow-on indications.Two allogeneic mesenchymal stem cell products commercialized by Mesoblast licensees have been approved in Japan and Europe, with both licensees the first to receive full regulatory approval for an allogeneic cellular medicine in these major markets.Mesoblast’s goal is for MSC-100-IV to be the first commercially available allogeneic mesenchymal stem cell product in the United States.

  4. What about Regenexx?
    They shows trials adult stem cells works in orthopedic disease and show results ?
    Can you illustrate us ?

  5. Very interesting development. Nothing talks louder than COLD CARD CASH. Money was the primary force that pushed these clinics to sell unproven stem cell treatments in violation of FDA regulations. Now 💰, by the threat of class action lawsuits, will put an effective end to this industry.

    At the same time, there are many legitimate companies trying to do this the right way with placebo controlled trials under the FDA framework and protocols.

    1. Arthur Bruce Robertson

      Too bad WST didn’t choose to list two or three examples of “many legitimate companies trying to do this the right way with placebo controlled trials under the FDA framework and protocols.” I’d love to hear about them and research what they are presently conducting trials on and the exact nature of the studies allegedly under way.

      1. Please look into Mesoblast Ltd. NASDAQ symbol: MESO, the CEO is a MD, has been developing impressive precursor cell lines from MSCs. The 2018 company report is full of background information on the development of their products. The FDA has warmed up to the potential of their researched developed products now on market in Japan and Canada. FDA granted fast track, and orphan drug, plus now they are testing one of their products to see if it might be effective with lessening the inflammation caused by Covid-19 in patients with SRD. Phase 2 trial in US for steroid refractory acute GVHD in children. 2 products approved for Japan medical market: acute GVHD in children, and congestive heart condition cellular rejuvenation (just recently the US FDA is in process of approving clinical trials using MESO product for congestive heart failure. The company recently opened an office in Austin TX. 3 months ago it signed a marketing agreement with a German company to market the MESO product for lower back tissue repair/regeneration in Europe and South America. This is a very interesting company, and seems to be on the correct path with their developed products.

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