Stem Cell Therapy Moves to Reinvent Itself, Raise Value
By Brian Orelli
BioWorld Insight Contributing Writer
After seeing its clinical program stall following the failure of a Phase IIb trial testing NTx-265 in acute stroke, Stem Cell Therapeutics Corp. is reinventing itself. (See BioWorld Today, May 26, 2010.)
The first step was hiring David Allan as the executive chairman of the Toronto, Canada-based company. Allan was the founding CEO and chairman of YM BioSciences Inc., which was recently sold to Gilead Sciences Inc. for $510 million (See BioWorld Today, Dec. 13, 2012.)
"The Stem Cell board called me about redefining the company," Allan told BioWorld Insight. After spending some time analyzing the field, Allan decided not to do a 180 like Geron Corp. and drop stem cells entirely.
Instead Stem Cell Therapeutics took more of a 90 degree turn, moving to therapies for cancer stem cells. Last November, the company obtained an option on the rights to tigecycline from University Health Network (UNH), through its commercialization agent MaRS Innovation.
Tygacil (tigecycline) is an FDA-approved antibiotic that Aaron Schimmer of University of Toronto, part of UNH, has shown selectively targets leukemia cells and leukemic stem cells by shutting down their energy supply through the inhibition of mitochondrial protein synthesis. Stem Cell Therapeutics is working on a proprietary formulation of tigecycline with improved stability that could allow for home treatment.
A Phase I dose-escalating trial with the original formula is expected to be completed in the first half of the year. Stem Cell Therapeutics has until April 30 to exercise its option to license the program.
Earlier this month, the company announced that it was merging with privately held Trillium Therapeutics Inc., adding another cancer stem cell therapy. Stem Cell Thereaputics will pay Trillium's shareholders $2.85 million, comprised of $1.2 million in cash and $1.65 million in common shares.
Trillium brings with it preclinical compound TTI-621, a SIRPaFc fusion protein that blocks the activity of CD47, which cancer stem cells often over express to avoid being engulfed by macrophages.
Also coming along in the deal is much of Trillium's senior management, including Trillium's CEO Niclas Stiernholm, who will become the new CEO after the merger is complete. Stem Cell Therapeutics and Trillium are no strangers; Stiernholm sits on the board of directors at Stem Cell Therapeutics. And Stiernholm worked under Allan at YM as executive vice president and chief scientific officer.
For Trillium, the merger brings a public listing and the potential to raise more capital to fund its preclinical programs. "Trillium concluded that it couldn't continue with just venture capital financing," Stiernholm told BioWorld Insight.
"We were looking at a number of scenarios," Stiernholm said, "What moved [the merger with Stem Cell Therapeutics] over the wall was that they had the option to tigecycline."
As a last piece of the transformation puzzle, Stem Cell Therapeutics announced last week that it was spinning out its fizzled clinical-stage program into a joint venture with ReNeu Inc. and NexGen Medical Systems Inc. of Melbourne, Fla.
Calgary, Canada-based ReNeu hopes to combine NexGen Medical Systems' intracranial delivery system EViTAR with Stem Cell Therapeutics' drugs for the regeneration of endogenous neural stem cells. Stem Cell Therapeutics will own 50 percent of the new joint venture.
In order to close the merger with Trillium and execute the option with UNH, Stem Cell Therapeutics needs to raise some cash. Allan and Stiernholm are doing a cross country tour, hoping to close the financing shortly.
Once the transformation is complete, Allan plans on following in YM's footsteps listing on an exchange in the U.S. to make it easier for Americans to buy shares. Maybe eventually Stem Cell Therapeutics will follow in YM's footsteps and be acquired by an American company.