(Click image to play video)
Envision a chest pain that feels like the most severe form of heartburn you ever experienced before.
This is one of the main symptoms of
ischemia – a disease which millions of people around the globe live with every day. Treating this disease is one of the main causes that drives the business behind publicly traded autologous stem cell therapy Company
Hemostemix Inc. (HEM) (
TSX-V:HEM,
OTC:HMTXF,
Forum) – a clinical-stage biotechnology company focused on developing and commercializing a proprietary cell therapy to treat ischemic diseases.
Hemostemix’s technology uses a patient’s own cells to treat that patient’s disease. The cornerstone of this autologous technology is a novel cell population within the blood called the synergetic cell population (SCP). The synergetic cell population, which can be collected from a simple blood draw, consists of progenitor and other supporting cells that are being developed for the treatment of ischemic diseases.
The Company’s proprietary platform technology is based on more than 10 years of clinical data demonstrating the ability of their autologous cell product to regenerate diseased and damaged tissue. Hemostemix’ efficient, scalable, and cost-effective platform has the potential to generate therapies for a broad range of ischemic diseases. Their lead clinical stage candidate is called ACP-01, and is currently a Phase 2 clinical trial that uses a patient’s own cells to restore blood flow to ischemic limbs.
In this intriguing video podcast, Stockhouse Media’s Dave Jackson was joined by company President & CEO and Co-Founder, Thomas Smeenk, to discuss a wide range of topics that biotech investors will want to pay close attention to.
SH: To start off, can you update our investor audience and your Hemostemix shareholders on any recent company developments, especially in the wake of the COVID-19 pandemic?
TS: With our most recent press release, it was the announcement that we regained control of our clinical trial data and announced a, a non brokered private placement of up to $2 million in the form of a unit consists of a share and a full warrant. It's a 1 cent unit, which is a phenomenal opportunity. The warrants are exercisable at 5 cents. We've been we've been financing the company at this price for the last year. So this is an opportunity for shareholders and credited investors to join management and the board and existing shareholders with, at the point where we've regained control of the clinical trial data, which is it's again, a significant opportunity in my view, I'm investing a hundred thousand dollars in this round.
SH: And to the big news just released…your announcement that – after lengthy litigation – the Company has “obtained from Medrio Inc. possession of all clinical trial data and $2.5 million dollars in unit financing.” Can you walk us through this and what it means for the HS 12-01 clinical trial for ACP-oh-1 therapy and for investors?
TS: Yes. So the clinical trial data is really the foundation of the company. It's it will prove scientifically what we know to be the case based on the treatment of more than 500 patients on a compassionate basis. As well as the clinical trials that have been conducted previously, and this verifies across North America in a 17 hospital setting that that ACP is safe and very effective in the treatment of critical limb ischemia. The to put it in perspective, the university of British Columbia and the university of Toronto announced on October 21st that and they presented this actually to the 41st meeting of vascular surgeons in Colona that 83% of the patients they had followed for four and a half years in our clinical trial had healing of ulcers that would otherwise not heal, had cessation of pain associated to critical limb ischemia and effectively save their limb from amputation.
That is in keeping with the results that we have seen in the clinic, in the treatment of these patients, as well as in an earlier trial which was a 20 patient randomized trial, 10 patients received a placebo, 10 patients received a CP of the 10 patients that received a placebo. After two years, there were two deaths and six of eight of remaining patients lost their limb to amputation in the ACP group. There were no deaths and seven of 10 save their limb from amputation. So the that's the that's the, the essentially the data that we have and the data basically it will enable us to move the company through the phase two clinical trial obtain approval from the FDA of that the closing out of the trial. And that's a significant milestone for a biotech company. And, you know, from a valuation perspective to put it into valuation terms, we're trading at a seven, seven and a half million dollar market cap today. Typically biotechs that have achieved a phase two, a trial result that is a world-class trial result will trade at a $250 million market. So we're, we're talking about a 35 times you know, multiple which makes, which is why this investment at one cent, this private placement at one cent is, is such a great opportunity.
SH: I briefly mentioned ACP-oh-1 is in Phase 2 of its clinical trial. Can you explain to our audience a bit more about the trial and walk us through how it works?
TS: So the, the, the therapeutic is a STEM cell that comes from the patient themselves. And what we do is we draw a cup of blood from the patient's arm. We fractionated out their STEM cells from that cup of blood. And in, in five days we culture those STEM cells and convert them into angiogenic cell precursors, hence ACP there's approximately up to 200 million ACPS that are at the end of the five day process. And we put those 200 million ACPS into a 15 CC syringe. And send that back to the physician who injects the STEM cells into the toes, foot and lower leg of the critical limb. That is you know…it has these ulcerating wounds. What the ACPS do is they, they create angiogenesis. Another word for that is they create new circulation where the old circulation is no longer working so new plumbing to bring blood to the wounds so that the wounds heal.
And they also recruit other STEM cells that are circulating in the blood to the wound which helps that wound heal. And so that's really the power of using a STEM cell that comes from your own body as compared to a STEM cell that comes from a donor. It's not as effective when it comes from a donor because the, the cell that comes from your own body already knows your body's electrical chemical processes and uses those electrical chemical processes to home, to the site of need, to embed at the site of need and to regenerate plumbing to that site of need so that it regenerates itself.
SH: Can you update us on the clinical trial to date and what are some things we should be looking out for moving forward?
TS: So the clinical trial to date, we're still we're at the mid point of the clinical trial and, and at the midpoint, the midpoint in our cases where 42 patients have of, of 95, we're 42 patients have been followed for at least 26 weeks. And we're able to do a statistical analysis of those 42 patients and prove scientifically that ACP is you know, 80% productive or 70% productive in the healing of these, of these wounds. So we have regained our data. We're going to analyze that data and we'll release in the next 30 to 45 days, the midpoint results which we, I expect to be in keeping with the earlier clinical trial results that that I mentioned.
SH: For our investor audience that might be new to Hemostemix, can you tell us a bit about the history of the company?
TS: Yes. It's a very interesting story. So I'm a co-founder. I started the company in 2005 here in North America as a licensee of an Israeli-based company. We amalgamated in 2008. I ran it for the first five years here in North America is a private company and raised the company about $10.8 million with the team that I put together, we treated about 500 patients in the first five years. The I stepped away the company moved to Calgary, which is where we raise most of the money from. And I stepped away for 10 years. Last in you know, I read, I was still a shareholder of course, and the company picked up a new management team and a new board in December of 2016, they raised about $8 million in the public market to complete the clinical trial. They got the, they got the clinical trial to its midpoint in the summer of 2019 announced in announced on October 21, the results that UBC and U of T I mentioned. And then and then they structured a loan to own. They essentially were structured a loan to own to strip the asset out of the company and, and pardon the French, but, you know, screw the shareholders out of 34 and a half million dollars of equity.
Part of their scheme required them to resign from management and the board in order to show up in court as the lender of last resort and not as the management team who had structured the loan to own. So they showed up in court and I announced I stepped back in November late November of 2019 became CEO again in December announced January 2nd, that we would raise $3 million to pay back the loan to own. And thereby regain clear title to the assets rather than work with management, which was their fiduciary duty. The previous management team put the company into a receivership. And I showed up in court and explained to the judge that, well, this man, well, these people, you know, in front of her were really, they were telling her half the story that, that they were the secure creditor.
Yes. But what they weren't telling her is that they were also the management team that structured the note. And so I asked her you know, got a couple of three week extension. We closed that private placement on March 10th and paid back the secure debt thereby regaining control of the assets. Now in the middle of the, the, of that closing on January 28th the, you know, Jed would the financial backer have come the cough. The former CEO started a lawsuit in Florida in an attempt to prevent the company from, and prevent me from closing a financing essentially playing hardball. So it's you know, it was a nonsense lawsuit and started just really to prevent the shareholders from regaining control, clear title to the asset.
SH: Advanced biotech can sometimes be challenging for retail investors to get their heads around. Can you encapsulate some of the other technology that Hemostemix is bringing to market?
TS: So ACP is really the lead product it's been used in the treatment of part diseases, such as angina and ischemic cardiomyopathy. It's also been used as a treatment for C O P D chronic obstructive pulmonary disease. It's been used for a similar lung disease, idiopathic pulmonary hypertension. It's been used to treat critical limb ischemia, which is the subject of the current trial. And it's been used to treat peripheral arterial disease. And so typically a biotech company will have a product that will treat one medical indication. It's rare that it was that the therapeutic will work in three, four, five different indications. What all each of those indications have in common is that they're diseases of the ischemia, the D the ischemia is in the heart, or the ischemias in the lungs to the ischemias in the limb. So we have an opportunity Dave to really license the technology for critical limb ischemia and peripheral arterial disease.
And then completed a phase two trial and license it for heart disease and then complete a physical a phase two clinical trial and license for lung COPD. And, and so that's really going to be the focus immediate focus. The reason this is a unique company is because it's a, this is a platform it's a patented platform technology. In other words, we can, we can not only derive angiogenic cell precursors from the patient's own blood, but we can also derive neuronal cell precursors NCP from the patient's own blood. And NCPS have been used in an animal model, a stroke model and demonstrate the same properties that ACPS generate in the heart model. And that is that the NCPS home to the site of stroke. They embed at the site of stroke and they regenerate functionality at the site of stroke. So there's, there's a, in addition to the three or four different markets that ACP address, we have a very good candidate in NCP to address diseases such as stroke such as a spinal cord injury a L S and you know, that's really quite exciting as well.
SH: Can you tell us about any other projects, clinical trials, milestones, etc. that Hemostemix has in development that might be of interest to investors?
TS: Well, the, the, the release of the phase two midpoint data will be the, will be the ultimate game changer for this company. And, and that, again, in the next 30 to 45 days from there, we will, we will work on licensing ACP and, and the, with respect to NCP that's that, that is a product that can, can come forward in terms of next animal study before we would, we would do a human trial of it NCP because ACP has been, been used in 500 patients to date. And because we have the clinical trial data, not only CLI, but also of angina, ischemic cardiomyopathy, that we can fast-track ACP into the into clinical trials. One, one thing I would like to point out is a comparable, if you will.
Because it, it, this really helps investors on understand the similarities of ACP to other therapeutics on evaluation basis that are treating heart disease. So the comparable is Miocardia, it's symbol Is MYOK, last week, Bristol-Myers Squibb paid $13.1 billion cash for Miocardia. And they did so because it brought a new drug to market called MAVACAMTEM may the CA Mavacamtem, which is a pill that treats cardiomyopathy. Now Hemostemix also treats cardiomyopathy. There are different forms of cardiomyopathy, but I want to draw the investor's attention to the valuation of, of, of Miocardia and the, and the valuation difference of Hemostemix and do so in terms of the comparison of the efficacy or effectiveness of Mavacamtem as compared to ACP in the treatment of cardiomyopathy. So maybe a Mavacamtem completed a phase three clinical trial, and it was demonstrated to be 37% effective in the treatment of hypertrophy, cardiomyopathy, ACP.
He was trialed by Dr. Kitt Arum one of the co-founders of the Minnesota heart Institute, a world renowned thoracic surgeon, and he did a trial on 41 patients suffering from ischemic cardiomyopathy, and he demonstrated that ACP had the uptake of over 80% in patients suffering from ischemic cardiomyopathy. Both patient groupings were studied on using the same criteria, namely the N Y H a classification of their heart disease, the higher the classification, the worse, your heart disease, both maybe Mavacamtem and ACP resulted in a whole decrease of each and Y H a classification. So while you, while the business model of an autologous STEM cell therapy company is different than a pill, a form of business model, the, you know, you can compare the results again, ACP 80% effective. And which makes sense when you're using your own body to heal itself as compared to a pill that is demonstrated to be 37% effective, 13.1 billion seven and a half million there in lies the opportunity for investors.
SH: Can you talk a little bit about your corporate management team, along with the experience and innovative ideas they bring to the biotech space?
TS: Yes, we were I was able to, you know when I started the company, we had put together a really effective team and I've been able to reconstitute a number of the people that were on the team now some 10 years ago. So we have the Dr. Ina Sarel [Is the incoming chief scientific officer. She's a co-founder of the company. And she's joined by Dr. Mary Argent Katwala a PhD in in molecular biology, who is our manager of clinical trials, Dr. Pierre Leimgruber an interventional cardiologist of some 32 years experience is our Chief Medical Officer and David Reese is rejoining as, as the incoming chief financial officer. David was previously the CEO of the company 2008 to 2011. He's got a very successful career behind him on Bay street, where he's literally raised tens of billions of dollars as an investment banker at CIBC, TD and National Bank.
SH: I touched on it briefly at the beginning. And you did as well, but Thomas, what can you tell our investor audience regarding the current valuation of your stock and why it is such a solid value buy right now?
TS: It's it really does come down to the data and the release of the interim results. The company was financially engineered into a corner by the previous management team who attempted to steal the assets from shareholders who put up 34 and a half million dollars. Part of that financial engineering was to take the stock from 12 cents a share down to one to share. We've been working the company out of the corner that, that that management team engineered it into. And we've been using the 1 cent, a share price in a COVID environment with litigation overhang to, to finance the company to this point where we can release the interim results. And again, prove to the world that 70 to 80% of patients who are about to lose their limb can save their limb from amputation by using their own STEM cells to salvage that limb that, that represents you know, that is a world-class result. If you compare ACP to as STEM cell, that's generated from a donor and read the literature on this it's it is half as effective to use a donor cell than it is to use ACP.
SH: And lastly, Thomas, if there’s anything else that I’ve neglected to ask and you’d like to add, please feel free to elaborate.
TS: Sure. Thanks, Dave. I would encourage investors brokers to give me a call and discuss this in more detail. My number is (905) 580-4170. It sounds like a complex technology, but at the heart of it, it really is taking a cup of blood from your arm, generating your STEM cells. From that we, we convert those into angiogenic cell precursors. And if you're, if you're suffering from a heart disease, your heart your, your heart doctor will inject them into your heart. If you're suffering from lung disease, it'll be you know, your physician that will be injecting them into your lungs. And if you're suffering from end-stage critical limb ischemia, it'll be your vascular surgeon that will be injecting them into your leg. There is our publications tab on our website is very informative.
It is worth reading. There is one paper in particular that I find I find very compelling which was written by Dr. Supachai. He is the former he's the late Dr. Supachai he's a former cardiologist to the, the late King of Thailand. And Dr. Supachai treated 109 patients who were end-stage heart patients. These, these patients had two or three heart attacks. They had they were suffering from typically two or three other co-morbidities and were, you know, these were the, of the sick patients. They've exhausted all pharmaceutical options, all medical locks, options, all surgical options. And they were treated with ACP and 91% of them were alive two years post-treatment whereas the normal morbidity rate is 25% in that two year timeframe reaching 55% at the, at the three-year timeframe. So this is as you know, indicative of the power of ACP. So I would encourage investors to read, read the publications there you know, published in the scientific journals and are well worth a read.
For more on this Company, visit
Hemostemix.com or call Thomas Smeenk, President, CEO, Co-Founder, 905-580-4170.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.