Manufacturing Considerations for NeoStem’s Acquisition of California Stem Cell

Recently, NeoStem made the very exciting announcement that it has signed a definitive agreement to acquire California Stem Cell, Inc. (“CSC”) and with it, its innovative cancer immunotherapy Melapuldencel-T.  This acquisition is significant to the company for a number of reasons, but, as the Chief Scientific Officer of NeoStem and the President of Progenitor Cell Therapy (“PCT”) I am personally excited to tell you how I see great synergy between this acquisition and our own manufacturing capabilities.

First, a bit about me, I have served on the Stem Cell Banking Committee and Cord Blood Subcommittee of the New York State Department of Health and on the New Jersey State Department of Health’s Blood Bank Advisory Committee, chairing the Hematopoietic Progenitor Cell Processing Subcommittee. In addition, I have served in a leadership capacity for many professional organizations, including treasurer and founding member of the International Society of Hematotherapy and Graft Engineering, now called ISCT (International Society for Cellular Therapy). I recently completed a five year term as a director for AABB, and am currently an Executive Committee member for the Alliance for Regenerative Medicine (ARM), where, among other activities, I co-chair the Standards and Technology Committee.

PCT, which I co-founded more than a decade ago, was originally built in response to a recognized need for high quality manufacturing and development services in an emerging industry. As the cell therapy field has grown, so too has PCT— the company has now served over 100 clients and performed more than 30,000 cell therapy procedures.  Since PCT was acquired by NeoStem in 2011, we have found unique synergies and efficiencies in being a single company paving the way in this industry. As with the acquisition of PCT, NeoStem believes in seeking growth by way of strategic procurement and we have continued to remain opportunistic as the field matures and consolidation presents opportunities for those like us with the specialized knowledge base and expertise associated with this industry.

As part of our due diligence for this transaction, the NeoStem team, including representatives from our scientific, technical, manufacturing and quality teams, evaluated  CSC’s entire manufacturing process as it has been developed over the years.  We studied both the current and previous processes for generation of DC-TC (autologous dendritic cells pulsed with irradiated tumor cells) and have satisfied ourselves that improvements to the manufacturing process for the generation of the patient-specific cancer initiating cells used to load the dendritic cells and direct the immunotherapy towards the patients’ cells expressing that unique antigen profile both reduced the time to manufacture the cell line and significantly improved the success rate to generate the TC line for patients enrolled in the trial.   CSC scientists and product development personnel recognized a few years ago the need to improve on the success rate of TC line generation, and we were pleased to conclude that  they have  overcome this limitation through enhancements in the tumor cell collection and handling, the transport media, and adaptations in the manufacturing process itself through the use of microsphere formation ahead of cell line expansion.  Importantly, FDA has agreed that these changes have been implemented in a way that  maintains comparability between the previous process and the current process.

Our diligence convinced me that CSC’s products and processes are a natural fit with NeoStem’s unique clinical, regulatory and manufacturing expertise.  Here are just some of the reasons:

  • Using PCT’s in-house manufacturing services for Melapuldencel-T allows for efficient and cost effective manufacturing at all stages of development, including for this late stage product candidate.
  • PCT’s Engineering & Innovation Center, focusing on automation and cost reduction strategies, is expected to be valuable to advancing Melapuldencel-T through its Phase 3 clinical trial and beyond in a way that results in high product quality with a reasonable cost of goods over the commercial life of the product.
  • PCT’s expertise will be invaluable as we have helped many clients in their development for immunotherapy products, including Provenge for which PCT performed the manufacturing process during the development process through BLA submission.
  • PCT has in place the additional capabilities CSC will need for robust product manufacturing and logistics for a multi-center Phase 3 trial and cost effective production for commercial sales if the CSC product is approved.
  • Additionally, NeoStem can leverage CSC’s expertise in immunotherapy and the capacity in Irvine, both infrastructural and human, to do additional manufacturing and/or development work to advance CSC’s (NeoStem’s once the acquisition is complete) platform technology as well as those of PCT’s client base.

I am excited to welcome CSC’s management and staff into our growing company, and look forward to integrating and moving ahead with Melapuldencel–T and other cancer immunotherapy products.

 

Robert “Bob” Preti is the Chief Scientific Officer of NeoStem where he is involved in directing the development and expansion of NeoStem’s cell therapy pipeline, as well as participating in setting NeoStem’s strategic direction.

Company Information

Company Website: http://www.neostem.com/
Company Headquarters

420 Lexington Avenue, Suite 350
New York, New York 10170
Phone: (212) 584-4180
Fax: (646) 514-7787

Media Contact

Eric Powers, Manager of Communications and Marketing
Phone: (212) 584-4173
epowers@neostem.com

Investor Relations Contact

LifeSci Advisors, LLC
Michael Rice, Founding Partner
Phone: (646) 597-6979
mrice@lifesciadvisors.com

Forward Looking Statements

This blog contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as well as historical information. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from anticipated results, performance or achievements expressed or implied by such forward-looking statements. When used in this blog, statements that are not statements of current or historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “plan,” “intend,” “may,” “will,” “expect,” “believe,” “could,” “anticipate,” “estimate,” or “continue” or similar expressions or other variations or comparable terminology are intended to identify such forward-looking statements, although some forward-looking statements are expressed differently. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity or our achievements or industry results, to be materially different from any future results, performance levels of activity or our achievements or industry results expressed or implied by such forward-looking statements. Such forward looking statements appear in this blog. Factors that could cause our actual results to differ materially from anticipated results expressed or implied by forward-looking statements include, among others:

• our ability to obtain sufficient capital or strategic business arrangements to fund our operations and expansion plans, including meeting our financial obligations under various licensing and other strategic arrangements, the funding of our clinical trials for product candidates in our development programs for our Targeted Caner Immunotherapy Program, our Ischemic Repair Program and our Immune Modulation Program, and the commercialization of the relevant technology;
• our ability to build and maintain the management and human resources infrastructure necessary to support the growth of our business;
• our ability to integrate our acquired businesses successfully and grow such acquired businesses as anticipated, including expanding our PCT business internationally;
• whether a large global market is established for our cellular-based products and services and our ability to capture a meaningful share of this market;
• scientific and medical developments beyond our control;
• our ability to obtain and maintain, as applicable, appropriate governmental licenses, accreditations or certifications or comply with healthcare laws and regulations or any other adverse effect or limitations caused by government regulation of our business;
• whether any of our current or future patent applications result in issued patents, the scope of those patents and our ability to obtain and maintain other rights to technology required or desirable for the conduct of our business; our ability to commercialize products without infringing the claims of third party patents;
• whether any potential strategic or financial benefits of various licensing agreements will be realized;
• the results of our development activities, especially:
• the results of our planned Intus Phase 3 clinical trial of DC/TC being developed to treat metastatic melanoma;
• the results of our PreSERVE Phase 2 clinical trial of NBS10 (AMR-001) being developed to treat acute myocardial infarction for which we released initial data on November 17, 2014 and for which all 6 month data has been collected; however it is subject to ongoing analysis, and currently reported results, although promising, are preliminary and there can be no assurance that further analysis may not reveal negative, or less promising, results;
• our ability to complete our other planned clinical trials (or initiate other trials) in accordance with our estimated timelines due to delays associated with enrolling patients due to the novelty of the treatment, the size of the patient population and the need of patients to meet the inclusion criteria of the trial or otherwise;
• the other factors discussed in “Risk Factors” in our Form 10-K filed with the Securities and Exchange Commission (“the SEC”) on March 13, 2014, and elsewhere in the Annual Report on Form 10-K; and
• the Company’s acquisition of California Stem Cell, Inc. (“CSC Acquisition”) and the ongoing operations associated with this new business will subject the Company to additional risks. Our Current Report on Form 8-K filed on May 8, 2014 reporting the closing of the CSC Acquisition contains a discussion of the risk factors related to the CSC Acquisition and our new Targeted Immunotherapy Program.

The factors discussed herein, including those risks described in Item 1A. “Risk Factors” in the Company's Annual Report on Form 10-K filed with the SEC on March 13, 2014, the "Risk Factors" described in the Current Report on Form 8-K filed by the Company on May 8, 2014 and in the Company's other periodic filings with the Securities and Exchange Commission (the “SEC”) which are available for review at www.sec.gov under “Search for Company Filings” could cause actual results and developments to be materially different from those expressed or implied by such statements. All forward-looking statements attributable to us are expressly qualified in their entirety by these and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by law, the Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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