Dear Fellow Shareholder:
Since our last update in December 2011, we would like to comment on several important developments that have occurred and recap their implications on the successful execution of our business plan:
1. Launching of RECOVER-ERC Phase II Heart Failure Clinical Trial.
In collaboration with the Bakoulev Scientific Center for Cardiovascular Surgery of the Russian Academy of Medical Sciences http://www.bakulev.ru/en/ and ERCell OOO, Medistem has successfully begun administering the universal donor Endometrial Regenerative Cells (ERC) stem cell product in patients with end stage heart failure.
The procedure is performed using a catheter-based retrograde administration technique which allows for localized delivery of cells without the need for surgery. The technique was invented by Dr. Amit Patel (International Principle Investigator of the Study), and safety and efficacy data of the procedure in heart failure patients has already been published (http://www.translational-medicine.com/content/pdf/1479-5876-9-183.pdf). The current trial uses this new procedure in combination with the company’s ERC product in order to develop a practical “off the shelf” stem cell therapy for heart failure that can be practiced by cardiologists world-wide. The trial is double-blind, placebo controlled, and comprises of a total of 60 patients. To date patient dosing has not been associated with any adverse events. The study is on track for completion within 18 months after initiation.
2. FDA Clearance for Phase I Critical Limb Ischemia Clinical Trial.
Medistem has received FDA clearance to initiate a 15 patient clinical trial with Dr. Michael Murphy in critical limb ischemia patients. We are currently working with Dr. Murphy and his staff preparing for initiation of the study. We are anticipating to be open for patient recruitment this May. That trial is expected to be completed in 12-18 months.
3. Collaborative Commercialization Agreement in China.
Medistem recently entered into a collaborative agreement with the Shanghai Jia Fu Medical Apparatus Corporation, a Chinese-based conglomerate with an existing cell therapy division. Under the agreement the two companies will jointly commercialize ERC in China.
4. Clinical Trials to Begin for Liver, Kidney and Lung Diseases.
A formal collaboration agreement was made with the S.M. Kirov Military Medical Academy in St. Petersburg, Russia to enter clinical trials in liver, kidney, and lung diseases.
5. Recruitment of Dr. Alan Lewis to Advisory Board.
Dr. Lewis is the previous CEO of Novocell/Viacyte, as well as the former CEO of the Juvenile Diabetes Research Foundation.
6. International Exclusivity for Yale Diabetes Technology.
Medistem signed an exclusive license agreement with Yale University covering published data and a patent application in which endometrial stem cells are used to generate insulin producing cells, as well as to treat animal models of diabetes.
7. Annual “Evening with Medistem” Event.
The company continued its annual tradition of hosting an informational event for investors and stakeholders in the field. Attendees included Dr. Warren Sherman from Columbia University, Dr. Alan Lewis, Dr. Amit Patel (via Skype) and Dr. Michael Murphy (via Skype).
8. Update on Medistem’s Stock Position.
In January 2009, Medistem made the strategic decision to voluntarily delist its stock. The rationale behind this decision was to focus company funds on developing the science and advancing our product development ahead of maintaining a public company listing. This decision alone has saved us $500,000 in annual expenses.
As a result of our voluntary delisting, outstanding shares of stock are currently trading on the PINKSHEETS under the “non-reporting” category, meaning there is no legal requirement that we file quarterly or annual reports.
Executive management of Medistem strongly believes in full transparency especially if shares are being traded on the open market. We know it is important for investors to know the total number of shares outstanding. As of March 20, 2012, the number of common shares outstanding is 6,480,440. There is no preferred stock outstanding. Because our delisting was voluntary, we will be able to relist easily when the timing for the company is right.