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.”

stemedica

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.”

and

“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.

KPBS piece sheds new light on Jim Gass stem cell case, ties to San Diego firms

KPBS reporter David Wagner has an important new piece out today on for-profit investigational stem cell treatments and he focuses to a large extent on a stem cell business in San Diego called Stemedica. If you’ve heard of this company it might be in part because they were involved in the Gordie Howe stem cells for stroke story that got so much buzz.

At a personal level the KPBS story is about the experience of patient Jim Gass, who received a number of non-FDA approved stem cell treatments outside the U.S. and ultimately ended up with a tumor on his spine. 

To be clear, Gass was not directly treated by Stemedica, but Wagner’s article makes the case that there are two relevant links with the stem cell business: a referral of Gass by a Stemedica director to a doctor in Mexico who did a treatment and the use of an MSC product made by Stemedica in that treatment.

Gass was brave enough to go public with his overall stem cell story a few months back. As part of her New York Times piece on Gass earlier this summer, Gina Kolata just briefly mentioned a possible indirect tie to Stemedica:

“I began doing research on the internet,” Mr. Gass said. He was particularly struck by the tale of the former football star and professional golfer John Brodie who had a stroke, received stem cell therapy in Russia and returned to playing golf again.

So Mr. Gass contacted a company, Stemedica, that had been involved with the clinic, and learned about a program in Kazakhstan. When Mr. Gass balked at going there, the Russian clinic referred him to a clinic in Mexico. That was the start of his odyssey.”

In the new piece on Jim Gass’ experience, Wagner provides additional concrete material on this situation in the form of emails to/from Gass, new information in the written part of the article, and via a startling video interview with Stemedica spokesman Dave McGuigan (below).

Wagner writes about how Gass’ treatment took shape:

“Gass traveled to Hospital Angeles in Tijuana, Mexico with the hope of recovering from a debilitating stroke. He received stem cells from Dr. Cesar Amescua based on a referral from Stemedica Cell Technologies, Inc., a San Diego company known for reportedly helping famous former athletes like hockey legend Gordie Howe make “miraculous” recoveries from strokes.”

What is the evidence for that referral that is mentioned?

The email documentation included with the article indicates that Marcie Frank of Stemedica referred Gass to Amescua (see image of part of the email below) in the form of saying, “Please contact Dr. Cesar Amescua”.

jim-gass-stemedica-email

Screenshot of part of Jim Gass email with Stemedica’s Marcie Frank

There are also Jim Gass’ own recollections of his experiences and his photo/video of being injected.

What happened next?

Gass went forward with the treatment, writes Wagner, which involved two kinds of stem cells:

cesar-anescua-jim-gass

Image from KPBS and Jim Gass

“Gass said he followed Stemedica’s referral and got in touch with Dr. Amescua. He said further down the line, he was told that for $30,000, he could receive a round of treatment involving two different types of stem cells.

The first type, Gass said he was told, would be mesenchymal stem cells. He said he was informed that they would be manufactured by Stemedica, and would be injected into a vein in his arm. Stemedica said its mesenchymal stem cells are derived from adult bone marrow.

Gass said he was told that the other type of stem cell would be fetal in origin, and would be injected directly into his cerebrospinal fluid. These fetal neural stem cells, Gass recalled being told, would be procured from Russia not by Stemedica, but by a different company, Global Stem Cell Health (GSCH).”

It’s not at all clear how Gass developed a spinal tumor nor for sure which of the several stem cell treatments he got around the world over the years might have contributed to the tumor.

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Weekend reads: ES cell research polls well, Gordie Howe, MS, IPS cells, and more

Here are some headlines & articles worth a look and some thought on stem cells and biomedical science more generally.Gallup Poll stem cells

Gallup finds in a new poll that 60% of Americans surveyed find human embryonic stem cell research “largely acceptable”.

On the other hand human reproductive cloning is highly frowned upon, sandwiched in the “highly unacceptable category between suicide, polygamy, and infidelity. Notably, even cloning of animals was viewed pretty negatively.

Time Magazine’s piece Friday on Gordie Howe, who just passed away, and his controversial stem cell treatment.

This isn’t hype: Canadian doctors just reversed severe MS using stem cells from Vox. These kinds of “I’m not a….” statements are tricky to read.

Japan to begin transplants using donor iPS cells

Mitochondrial Dynamics Impacts Stem Cell Identity and Fate Decisions by Regulating a Nuclear Transcriptional Program from Cell Stem Cell.

EZH2 and HDAC9c regulate age-dependent mesenchymal stem cell differentiation into osteoblasts and adipocytes from Stem Cells.

Boris Becker tweets joining flood of unproven stem cell sports medicine

We are seeing a flood of professional athletes getting stem cell treatments in the past few years. Just recently it was Ronaldo and now Boris Becker too. Before that Nadal had one. Gordie Howe. Bart Starr.

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More info on Bart Starr’s experimental stem cell treatment

Bart StarrBoth current and former professional sports stars are lining up to get stem cell “treatments” of various kinds for all sorts of injuries and medical conditions.

The aging stars who have received stem cell interventions include former San Francisco 49ers quarterback John Brodie (age 79) and more recently hockey legend, Gordie Howe.

In fact, Howe’s treatment caused a media frenzy of a sort in which now ex-ESPN broadcaster Keith Olbermann pretty much pitched the stem cell company selling the treatment. It felt like Dr. Oz.

The most recent legendary star to get such a treatment is Bart Starr, who it appeared like Howe got treatment via stem cell operation Stemedica and its partner, Novastem, in Tijuana, Mexico. Not much information has been available about Starr’s treatment and we were left to guess/predict that he had turned to Stemedica.

More details emerged today in a nice, interesting USATODAY piece by Brent Schrotenboer. The article confirmed that Stemedica was indeed the clinic that facilitated Starr’s treatment in Mexico:

“Both Brodie and Howe received stem cell treatments at a clinic in nearby Tijuana, Mexico. Cherry Starr said she agreed not to talk about the companies and location involved in her husband’s treatment until a later time. But she described a treatment pattern similar to Brodie’s and Howe’s.”

The Starr family is also quoted about how well Bart is doing, which is great news.

Like Howe, it appears that Starr will be getting a second treatment from Stemedica according to Starr’s wife Cherry. The other thing to keep in mind is that the Howe family has reportedly invested in Stemedica.

What is not clear is whether Starr, like Howe, got free or discounted treatment from Stemedica presumably with the company calculating that they would get plenty of free publicity out of it. From the Schrotenboer piece:

“Cherry Starr declined to say what the procedure cost. “It is an expensive procedure — that I will say,” she said. “And I’ll be glad when it’s more affordable for more people.”

I imagine more details will gradually come out about this case as time goes on. I wish Starr and his family all the best.