October 8, 2012
New Cell Medium and Personalized Skin Care Sets Stage for Growth of American CryoStem
It would be inaccurate to ever say that stem cell therapies go out of focus at any time, but October 3 provided additional exposure as it was International Stem Storage Awareness Day. Only a few years ago, stem cells were the subject of intense debates as misperceptions about points of origin ran rampant. Today, however, they offer a virtually unparalleled upside to a portfolio across many verticals with companies like Regeneron Pharmaceuticals Inc. (NYSE: REGN), American CryoStem Corp. (OTCQB: CRYO) and StemCells Inc. (NASDAQ: STEM) offering different price points and positions in the sector for investment possibilities.
While Regeneron and StemCells are focused on more brick and mortar type of stem cell research for diseases like macular degeneration and Alzheimer’s, little American CryoStem has a diversified business model that can drive revenue from a variety of streams as stem cell usage continues to become more mainstream.
Utilizing its proprietary commercial platform, the Red Bank, New Jersey-based company markets clinical processing and cryopreservation services and patented products for adipose (fat) tissue and Adipose Derived Adult Stem Cells (ADSC). Simply, fat tissue contains an abundance of stem cells which can be used for stem cell therapies or cosmetic treatments ranging from small facial procedures to breast or buttock augmentations that are safer and clinically more effective that any therapies today.
Further, the current medium “cell growth solution” for cell cultures (growth) and in vitro diagnostics contains fetal bovine serum. American CryoStem has developed and patented a new medium, containing human proteins, for cells to survive, grow, and divide that is animal product free, suitable for human clinical and therapeutic uses. The granted patent also allows 12 additional types of animal product free cell culture media. The company has filed four additional patents that cover a broad base of clinical materials and methods necessary to the creation of cellular applications and therapies.
The use of human material to process and store human cells seems far more logical as well as providing a solution to ethical and biological concerns arising from the use of animal-based products. With about 750,000 liters of fetal bovine serum sold each year into the multibillion dollar cell culture media market, the potential for American CryoStem from this one business component alone is tremendous.
The company has also begun delivering revenues from employing its services, products and technology. For insistence, American CryoStem has hundreds of cosmetic surgeons in its network that are now offering clients access to Personal Cell Sciences’ U Autologous skin care line. Truly defined by its name, stem cells are processed from a person’s own fat tissue to harness the youth and power of each clients stem cells in probably the most unique, technologically-advanced skin care product available today.
American CryoStem and Personal Cell Sciences have conducted clinical studies that incorporated state-of-the-art technology to document before and after results of its products. In a phone conversation with John Arnone, he told us that prior to the clinical study he was the first patient. Twenty patients participated in the 8-week long clinical study showing an improvement in the appearance of fine lines and wrinkles.
Doctors in the network are also able to use the American CryoStem’s tissue storage technology in cosmetic fat grafting procedures. Stored fat tissue as a natural bio-compatible filler can replace a plethora of standards today, such as saline/silicone breast implants, or chemical based injectables that are used in smaller procedures. Through a one-time liposuction procedure to remove adipose tissue, the patient can store enough for a lifetime of cosmetic work. According to Arnone, the company is already getting a strong response to the newly launched products with sales starting to steadily come in.
Addressing another market, American CryoStem has partnered with privately-held Protein Genomics, a developer and manufacturer of unique products for the biotechnology industry. Through a collaborative agreement, the companies are working to develop novel cellular therapies for the wound healing, regenerative and cellular therapy markets. The company intends to continue its licensing and partnering programs to expand its intellectual property revenue opportunities.
So much more than “just another stem cell bank,” American CryoStem sits as a quiet leader of regenerative medicine in its own respect. The cosmetic components could easily drive millions in revenue given it’s a new product in the multi-billion-dollar cosmetic surgery industry, but it would seem to be more of a vehicle to even greater success with the media, cryostorage and wound care offerings. The new medium is particularly impressive and could set the industry on its side based upon its granted patent claims.
If that’s not enough to inspire further due diligence, the company has no debt and an impeccable team of thought leaders and experts in biotechnology, dermatology and cell biology. If they hit their goal of $3 million to $5 million in sales during 2013 as Arnone told us they are aiming for, the days of the $7.5 million market cap that they are currently carrying will be long gone.
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