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.”

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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.

Where does stem cell business Stemedica go from here after KPBS investigative report?

stemedicaFor quite a while there San Diego-based stem cell business Stemedica had a good run of publicity with reports of high-profile professional sports legends getting stem cells and the media reporting apparent good outcomes for stroke recovery, but more recent times have yielded some different publicity. An investigative report by KPBS reporter David Wagner raised some issues regarding the company. Here my take on Wagner’s report.

In his two-part piece (here and here), Wagner in part chronicled the story of stroke patient Jim Gass who ended up with a tumor on his spine after receiving several different stem cell interventions around the world over a period of years including one recently down in Tijuana administered by Dr. Cesar Amescua, who is not an employee of Stemedica.

According to Wagner’s report that last treatment involved two kinds of stem cells, one of which (adult stem cells) was reportedly manufactured by Stemedica. The other cells, fetal neural stem cells, were produced by Global Stem Cell Health. A Stemedica director was reportedly the one who referred Gass to the doctor down in Tijuana.

Many questions remain unanswered.

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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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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.

Muddier stem cell waters: Stemedica teams up with UCSD doc?

stemedicaAn increasing trend in the stem cell arena is the teaming up of clinical partners with very different backgrounds and priorities. For instance, academic institutions are more often working together with for-profit stem cell clinics.

Another branch of this larger trend is the observation that some publicly traded stem cell biotechs such as Bioheart are increasingly turning to non-traditional means of raising cash such as through dubious stem cell training for doctors or other unexpected ventures.

It seems that in the past things were clearer in terms of who is compliant and who isn’t, who is following the spirit of FDA regs and who isn’t, and so forth.

The waters of the stem cell world are getting far muddier today as I predicted in my top 20 predictions for stem cells in 2015.

It’s a somewhat radioactive topic.

Why?

On the one hand such team efforts between academic and industry could be beneficial by speeding translation to patients, which is what the field needs. Cheers for that.

However, on the other hand for-profit stem cell clinics and academics do not always see eye to eye on how to do things, how to report findings, bioethics, patient consent, stem cell tourism, the proper way to handle public relations, and such.

Increasingly the commercialization of stem cells is making for strange bedfellows.

A good recent example is the work just announced that Stemedica indicates links it with UC San Diego (UC) for a stem cell trial for Alzheimer’s Disease:

“The study is sponsored by Stemedica International, S.A. and will start at the University of California, San Diego (UCSD) under Principle Investigator Douglas Galasko, M.D. and expand to other sites.”

You may recall Stemedica from the media frenzy over the last half a year on their role in the treatment of hockey legend Gordie Howe for stroke. In fact, Howe reportedly just got a second treatment from Stemedica and its partner Novastem in Mexico.

I found some aspects of the whole Howe-Stemedica story to be of great concern. For example, there is some question over whether the free treatment of Howe has led to stem cell tourism via more patients traveling to Mexico for non-FDA approved interventions. Football great Bart Starr may also have recently gotten such a treatment via Stemedica as well.

Of this new Alzheimer’s trial, Stemedica says in a PR:

“This study was approved based on the excellent safety profile of Stemedica’s cGMP-manufactured, hypoxically-grown stem cells and on solid pre-clinical data obtained by Stemedica International in cooperation with the École Polytechnique Fédérale de Lausanne of Switzerland and with a grant from the Swiss government,” said Lev Verkh, Ph.D. Stemedica’s Chief Regulatory & Clinical Development Officer. He continued “We are very proud of Stemedica’s clinical program under U.S. INDs for several indications including ischemic stroke, acute myocardial infarction, chronic heart failure, cutaneous photoaging and Alzheimer’s disease. At the study’s conclusion we will understand if our approach is efficacious versus placebo in subjects with Alzheimer’s-related dementia, as evidenced by neurologic, functional, and psychiatric endpoints.”

Now in principle some definite good could come from Stemedica working with academics and notably they have an FDA-approved IND for this, which is great. At the same time there may well be different priorities at work. I guess we’ll have to wait and see how it goes.

Other stem cell clinics raise more concerns and claim university affiliations too. For example, earlier this year we saw an odd stem cell clinic with their NIH-like name (National Institutes of Regenerative Medicine; NIRM) turn out to be affiliated with Cell Surgical Network, the largest chain of stem cell clinics in the US, which sells non-FDA approved “therapies”. NIRM had claimed a UCSD affiliation as well, but I no longer see that apparent on their website today.

Notably, Stemedica is different in some key ways from the dubious stem cell clinics we often talk about. They have a growing number of FDA-approved INDs and by all accounts I’ve heard through the grapevine that the stem cells that Stemedica produces are cGMP quality. Still their actions have raised concerns on some levels and the promotion of stem cell tourism to Mexico is a worry.

Overall, as the stem cell waters continue to muddy and with essentially zero apparent regulatory action by the FDA’s CBER specifically on stem cell clinics more broadly in the last couple years, I predict it will be increasingly difficult to know what is going on with any particular stem cell offering. Instead of getting clearer, things are getting grayer.