|Interim CEO, Gary Rabin updates ACTC shareholders|
|By Staff and Wire Reports|
|Monday, 20 December 2010 07:57|
Writes Rabin, who replaced William Caldwell last week after Caldwell passed away unexpectedly:
"I am sure you were as stunned and saddened as I was by the news of the untimely passing of ACT’s beloved Chairman and CEO, Bill Caldwell. Everyone at ACT is mourning the loss of a great man.
"I would like to start by introducing myself. I have been a member of ACT’s Board of Directors since 2007. I have been in the field of finance for over 20 years, primarily in investment management and capital-raising, targeting small-cap and emerging growth companies, but I also have operating experience in the technology industry. I am the Managing Partner of GR Advisors, LLC, a hedge fund, and of Villetta Management, LLC, a restaurant management company, both based in Los Angeles. I have served in senior positions in a variety of capacities in my career, and have worked with governments and private companies in every corner of the world, and I see taking the helm as Interim Chairman and CEO of ACT as a natural fit for my talents.
"ACT achieved a number of its most important milestones in the past few months, including the following two in just the past month:
• In November we announced that we had received FDA approval to initiate the first-ever human Clinical Trial using retinal pigment epithelial (RPE) cells derived from embryonic stem cells (hESCs) to treat eye disease (specifically, Stargardt’s Macular Dystrophy, or SMD). We plan to initiate this clinical trial in early 2011.
• Later that month we announced the filing of an investigational new drug application (IND) with the FDA to conduct a Phase I/II Clinical Trial using our RPE cells to treat Dry Age-Related Macular Degeneration (Dry AMD). This Clinical Trial would use the same cells and the same approach as our approved Clinical Trial for SMD.
It is difficult to overstate the size of the market for Dry AMD — at roughly $25-30 billion in the U.S. and Europe alone, the opportunity is simply massive. I know of very few cases in which a biotech company the size of ACT has realistically targeted such a massive market for such a common indication, which currently has no known treatment!
Dry AMD afflicts more than 25 million people in the U.S. and Europe alone. Think about that for a minute: more than 25 million people in wealthy countries with large middle classes and well-developed medical infrastructure and coverage whose doctors are presently not able to offer them a treatment for their debilitating condition.
We expect to receive feedback on our AMD IND filing from the FDA, and potentially approval to proceed with a Phase I/II Clinical Trial in the U.S., in the coming weeks.
Moreover, ACT is now the only firm to have two INDs with the FDA for hESC-based therapies. Indeed, only four such INDs have been filed, total. The only other one from a publicly-traded company, as you are no doubt aware, is from Geron (Nasdaq: GERN). With a market capitalization of over $500 million, Geron is more than double the size of ACT, yet little ACT has double the number of INDs filed for indications using hESCs.
Meanwhile, we continue to develop and seek partnerships for our “embryo-safe” blastomere program. This program is revolutionary in its implications: it directly addresses the main ethical objections to embryonic stem cell research, i.e. that such research necessitates the destruction of embryos.
You may have seen the headlines from a few months back about political machinations and the potential for a new ban on federal funding of embryonic stem cell research. While ACT is not dependant on federal funds, this potential cloud for the field may well have a silver lining for ACT: because of its blastomere technology, the company is uniquely positioned as one of the few sources of hESCs that could actually still qualify for federal funding, even if such a ban were to be put in place.
We hope to make an announcement regarding our blastomere program in the near future.
We hope to start a Phase II clinical trial with our Myoblast adult stem cell program for heart disease in the first half of 2011. We are also continuing to develop our hemangioblast program. Additionally, we have published some of the most pioneering studies involving iPS cells, ahead of much better known entities.
Moreover, we are actively developing projects in Europe. Bill Caldwell spent a large portion of his time in recent months in Europe, presenting at conferences and blazing trails for the company in a variety of areas. He was steadfastly determined to open up opportunities for ACT in the EU and elsewhere in Europe, and we are confident that we will have news about the company from across the pond to share with you in the very near future.
So, ACT is continuing to move forward on all fronts. Whichever path will most effectively bring regenerative medicine into the mainstream and revolutionize healthcare, we are there. These two recent developments with our RPE program, combined with our other path-breaking programs, mean that ACT is, in my humble opinion, now the translational research company in regenerative medicine. Put another way, ACT is now arguably the leader in translating the science of embryonic stem cell research from the lab bench to the bedside. There is simply no one else out there with the depth and breadth of programs.
As we announced on December 2, and as Bill discussed in his December 6 blog post, we have also significantly strengthened our balance sheet since September of 2009, eliminating approximately $33 million in indebtedness. Significantly, our convertible debentures have been reduced to only less than $900,000. The monthly amortization of these debentures and conversion to equity of other indebtedness clearly had a deleterious effect on ACT stock. We hope that with the near-elimination of such debt, our stock can begin to reflect the true fundamental value of our many recent and expected accomplishments.
On Friday, December 17th, we wrapped up an exhaustive two-day series of management presentations to the Board of Directors where the entire management team updated the Board (and me) on recent developments covering our regulatory, manufacturing, research & development, business development/partnerships, and budgeting and administration business units. I was simply amazed by the strength and depth of our management team, and I’m certain that the investment community does not realize how many exceptional people are in our employ. Certainly, many people are aware of the incredible talents of Dr. Robert Lanza, our Chief Scientific Officer, but I want to educate the investor community on our other leaders in the coming weeks and months.
Bill Caldwell’s passing is a great loss to all of us at ACT, but he left the company with a valuable legacy, and we are aggressively pushing forward on the initiatives he spearheaded. In summary, we plan to start our historic clinical trial for using hESCs to treat Stargardt’s Disease in coming weeks. We hope to secure approval from the FDA to initiate our Phase I/II Clinical Trial using hESCs to treat Dry AMD in coming weeks. We plan to initiate our Phase II Clinical Trial in our Myoblast program in coming months. We have many irons in the fire and feel that this fire is finally primed to start burning brightly in coming months.
I would like to thank our many investors and supporters who have stood with us over the years. It has been a rocky road, with many challenges. However, we have finally overcome our most significant hurdles and are ready to start firing on all cylinders. For those who have supported us, I thank you and encourage you to keep the faith and recognize that the best days for the company are ahead of us. For those whose interest to ACT is new, I am pleased to introduce you to the company, arguably the leader in regenerative medicine. You are joining us at a historic moment in the life of the company, in regenerative medicine, and indeed, in medical science overall. It is going to be one heck of a ride."