Another stem cell lawsuit: Stemedica sued by board member over alleged mishandling of funds

Stem cell clinic biotech Stemedica has just been sued by one of its own board members based on allegations related to money the company raised, according to CourtHouseNews. The actual suit, filed by an investment company Tiara Holdings and board member Anthony Marlon, can be read here.

CourtHouseNews writes:

“Tiara Holdings II LLC sued Stemedica Cell Technologies Inc. and its top three officers on April 6 in Clark County Court. The officers are CEO and Chairman of the Board Roger Howe, Vice Chairman and CEO Maynard Howe and President and Chief Medical Officer Nikolai Yankovich.”…Dr. Anthony M. Marlon, a medical doctor and businessman, holds 430,000 shares of Stemedica through Tiara Holdings, where he is a member. He also is a member of the board of Stemedica, he says in the complaint.”


Note that “Yankovich” seems to be a typo as the Stemedica leader in question is Nikolai Tankovich.

The allegations in the suit are summarized by CourtHouseNews this way:

“Stemedica’s founders have operated a nearly 10-year investment scheme, wherein they have raised over $110 million dollars from various individual investors for the purported purpose of funding and establishing a stem cell company,” Tiara says in the lawsuit.

Tiara claims the Howes and Tankovich “have used these investor funds, in whole or in part, to benefit themselves and their associates through excessive compensation and lavish personal expenses and related party transactions.”

“Stemedica’s founds have concealed and perpetuated this fraud through purported operating subsidiaries, which permitted them to divert millions to benefit them without raising questions or concerns from Stemedica’s investors and shareholders,” Tiara says.”


“It also seeks damages and punitive damages for fraud, breach of fiduciary duty, unjust enrichment and bad faith.”

Maynard Howe reportedly told CourtHouseNews that the allegations are false.

Dr. Anthony M. Marlon Stemedica

The Stemedica website still lists Dr. Marlon as a board member (see screenshot above).

Stemedica has seen some other past controversy as in part noted in the new suit related to a KPBS investigation of the San Diego company and ties reported in that piece to the stem cell transplants received by patient Jim Gass, who later developed a spinal tumor. The origin of Gass’s tumor remains unknown to my knowledge and may have had nothing to do with Stemedica’s cells, but the stem cell community would benefit from more clarity on that situation. Stemedica also garnered major media attention further back for its role in a non-FDA-approved stroke treatment received outside the U.S. by hockey legend Gordie Howe (no relation to the company’s Howe brothers).

Another San Diego stem cell businesses, Stemgenex, is also the subject of a lawsuit, in its case related to allegations of improper marketing claims. Additional recent stem cell clinic-related lawsuits have been filed, settled, or remain active as I discuss here and here.

Big HT to Alexey Bersenev.

TGIF: Week’s Stem Cell Headlines, Papers, & Resources

TGIF science dart board

Modified Wikipedia image

What are the latest developments in stem cells and regenerative medicine in this first week of 2017 and right before the end of the past year? Here are some of the headlines and papers that have popped up that seem notable or surprising. Be sure to also check out our stem cell & regenerative medicine meeting hub for 2017.

Alexey’s review of Cell Therapy (including stem cells/regen med) in 2016. Must-read. This links to his part 2 and there is a link to part 1 there. This is on his Cell Trials blog.

A Rapid Pipeline to Model Rare Neurodevelopmental Disorders with Simultaneous CRISPR/Cas9 Gene Editing. Cool system described in Stem Cells article.

Scientists find link between maternal environment and neurodevelopment disorders. More on neurodevelopment. Environment and genetics do a tango in development.

NYSCF and PGP announce availability of unique new stem cell resource for scientific research. More stem cell resources the better.

What happens to rejected papers? Neuroskeptic takes a look. A little off topic, but very interesting.

Stem Cell Research: How Scientists Grew Stomach Tissue In A Lab. Does it get hungry?

How Trump Could Slow Medical Progress. Worries about Trump & biomedical sciences.

Will President Trump restrict embryonic stem cell research funding. More worries on Trump. 

Genetically engineered immune cells melt away deadly brain tumors (from CIRM blog) New approaches to brain tumors are urgently needed. Minor thing — not sure about the use of “melt away” as a metaphor here.

Top 10 stem cell stories of the year 2015

liver organoidWhat were the top 10 stem cell stories of the year?

What were the biggest news and science headlines in the stem cell field in 2015, whether good or bad?

Below are mine. What are your top 10 stem cell stories of the past year? Let us know in the comments.

  • Organoids explode. Stem cell-based mini-organs (organoids) have exploded in terms of impact in the last couple years. 2015 had many examples of these super cool human organs in a dish made from stem cells. Organoid technology has huge potential for teaching us about human organ development and function as well as disease pathogenesis and treatment. I recommend this interview by Alexey with organoid pioneer Madeline Lancaster for more on this exciting trend.
  • Clinical trials pile up. More good news. The number of real, promising stem cell clinical trials continues to build. This is fantastic and shows the continuing maturation of the stem cell/regeneration medicine/cell therapy fields. Think about where things were 5-10 years ago with stem cell clinical trials and you see how much progress has been made.
  • Sale of CDI and Ocata to Japanese pharma. Japan continues to show leadership in commercializing stem cells and regenerative medicine, and this in part manifested in 2015 with the big-time purchases of two American stem cell biotechs by Japanese pharma companies. Does the nation of a biotech company matter in this day and age? Are pharma acquisitions of small stem cell biotech good news or bad or some combo of the two? We can expect more corporate acquisitions in the stem cell arena in the coming year. Stay tuned for my top predictions for the stem cell field in 2016.
  • Stopping of IPS cell clinical study in Japan with broader regulatory switch there to allogeneic IPS cell focus. The pioneering macular degeneration clinical study using IPS cells in Japan was stopped this year and now a second IPS cell study (Parkinson’s Disease) there has been delayed. Regulatory changes now mandate that IPS cell clinical work be done with allogeneic cells. This change still remains somewhat of a mystery given the big potential of IPS cells on the patient-specific front using an autologous approach. We’ll hear a lot more about this in 2016. Another regulatory change in Japan is the move to allow charging of patients for clinical trial participation. I’m not a fan of this change to put it mildly.
  • CRISPR. Of course CRISPR is not specific to stem cells, but it opens new doors to understanding stem cell biology and development, particularly in the human research sphere. The genetic research on human stem cells that has opened up because of CRISPR is very exciting.
  • Human genetic modification on the table. Related to the above, gene editing of human pluripotent stem and germ cells has big ethical and social implications. The potential future production of genetically modified human beings via primordial germ cell or pluripotent stem cell editing raises big, thorny questions. Whether we are talking about genetic modification of somatic cells for therapy or production of actual designer babies, this topic was a hot one in 2015. For more, check out my new book, GMO Sapiens.
  • Stem cell clinics continued to bloom. From Internet searches to patient contact, the data out there are consistent with a continued rapid growth of stem cell clinics pitching at best unapproved stem cell interventions to at worst stem cell snake oil.
  • FDA action absent still on predatory clinics. For two years the FDA has practically speaking done nothing to address the exploding problem of stem cell clinics (see above) selling unapproved stem cell “treatments” to tens of thousands of patients in the US. We cannot forget about stem cell tourism, but the stem cell clinic problem in the US is massive and growing, and only made worse by an FDA that appears to either have mixed feelings on it or simply be moving in slow motion. Something’s got to give on this and I thought that would happen in 2015. Maybe it will in 2016.
  • Celebrities as advertising for stem cell clinics. Also in the dubious sphere we saw in 2015 an acceleration of celebs being the top drivers of patient traffic to stem cell clinics. Gordie Howe made the biggest news, but then there was Bart Starr and many others. For every famous person who puts themselves at risk or who is put at risk by their families looking for hope from stem cells, how many ordinary people follow suit and how many people will lose precious savings and potentially be hurt?
  • CIRM 2.0 picks up pace. Ending with some good news, the new incarnation of The California Institute for Regenerative Medicine (CIRM) as CIRM 2.0 (a name I admittedly enjoy saying as I coined the term) continued to build momentum in 2015. CIRM 2.0 has a distinctly clinical focus. The agency is picking up the pace on issuing RFAs and new funding. 

Best stem cell blog of 2015: CIRM’s The Stem Cellar

Stem Cell BlogWhen I first started blogging here about stem cells in 2010, frankly it felt pretty lonely out there in cyberspace.

Nature‘s great blog by Monya Baker and Natalie DeWitt on stem cells had called it quits late in 2009. For the most part the stem cell blogs and other Internet outlets present early in 2010 were either anti-embryonic stem cell sites or a few predatory stem cell clinic sites.

Now there are more stem cell blogs out there. It’s a welcome change. People interested in stem cells and regenerative medicine have quite a few different blogs they can read for information and commentary. That’s a great thing.

So what was the best stem cell blog in 2015?

Kevin McCormack

The prize goes to CIRM’s The Stem Cellar. While this is a tough choice (see more below on other stem cell blog), CIRM’s blog has continued from year to year to step up its game. They post very often, sometimes daily. Their posts are composed of compelling content that includes reports on papers and other developments, but also commentary. I really appreciate the latter and that is fairly unique. They have also gone well beyond just focusing on CIRM-related matters to include broader issues for the stem cell field.

They have a whole great team of regular contributors and that brings a nice level of diversity to the writing. The team includes Kevin McCormack (pictured), Todd Dubnicoff, Don Gibbons, and Karen Ring. Confession time. I’m jealous of this team. I have great guest posters on this blog, but I can only imagine how awesome it would be to have a full team of regular contributors.

Congrats to the CIRM stem cell blog team for having the best stem cell blog of 2015.

There are other blogs out there that I highly recommend and finishing a close second was Alexey Bersenev’s blog StemCellAssays. It continues to be incredible. Alexey regularly posts on the more technical side of stem cells, regenerative medicine, cellular medicine, and more. StemCellAssays is a much read for those interested in this field from any number of angles.

Update: By way of disclosure, I am a past recipient of CIRM funding for my lab, which has also had and has student funding support.

Here’s the full list of recommended stem cell blogs including two new ones you should check out:

More tough FDA draft guidance on stem cells…still no action

FDA logoThe FDA released more draft guidance with strong relevance to the stem cell field.

This October 2015 new draft guidance follows about a year after three other previous draft guidances that made it clear the current FDA thinking on various issues including stromal vascular fraction (SVF; fat stem cells) was much more restrictive than generally thought in the for-profit stem cell clinic field.

“Industry” apparently hasn’t been happy about this.

For instance, December 2014 FDA draft guidance very clearly indicated that fat-related stem cell products like SVF are more than minimally manipulated and hence are drugs requiring pre-approval and licensing. Another draft guidance on the same day surgical exemption issued a few months earlier also seemed (appropriately) to point toward more stem cell products being drugs requiring pre-marketing approval.

Still, to my knowledge the FDA has not actually finalized these guidances or taken any action based on them.

The new 2015 draft guidance aims to provide clarity and answer questions on the issue of homologous use. My sense is that this draft guidance, if ever finalized, would limit the unapproved uses of specific human tissues including amnion.

One particularly telling phrase from the new guidance stood out to me:

Generally, if an HCT/P is intended for use as an unproven treatment for a myriad of diseases or conditions, the HCT/P is likely not intended for homologous use only.

This sure sounds like how hundreds of stem cell clinics are using unapproved adipose and amniotic “stem cells”. Thousands of patients are spending millions of dollars right now on interventions violating multiple FDA perspectives mentioned in the various draft guidances.

Yet despite all this “tough talk” in draft guidances, by all accounts the FDA seems to be doing nothing to back it up in the way of actual actions on stem cell clinics violating these proposed rules or via finalized guidances. For instance, the CBER branch of the FDA suddenly stopped taking actions on stem cell clinics almost 2 years ago and since has done little if anything.  In the same period of time the number of stem cell clinics has roughly doubled. That is an equation for trouble and risks to patients.

What gives with the FDA?

In part I think they are just unbelievably slow in how they take steps on things, but that glacial slowness isn’t working to protect patients in the context of the warp-speed stem cell clinic world. They may also be getting political pushback on what seems to be emerging as a firming up path to regulating adipose stem cell products as drugs.

A big HT to Alexey Bersenev for pointing out the new draft guidance (see #5 in his post and another post). I recommend reading his post for another valuable view on this. He also points out that stocks have dropped for some companies related to this draft guidance and the FDA will hold a public hearing next year on these new draft guidances.

At this snail-like pace from the FDA we can expect these guidances might be finalized (assuming they ever are) in some revised form in…about 2-3 more years. By then there will probably be more than 1,000 stem cell clinics in the US selling unapproved stem cell drugs…

I’m all for public engagement by the FDA and responsiveness to feedback, but the FDA doesn’t have time to move so slowly.