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Shaping the Future of Regenerative Medicine Today

Dave Jackson Dave Jackson, Stockhouse
6 Comments| February 11, 2021

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(Click image to play video)

Hemostemix Inc. (TSX-V: HEM, OTC: HMTXF, Forum) is a clinical-stage biotechnology company focused on developing and commercializing a proprietary autologous cell therapy to treat ischemic diseases. The Company’s proprietary platform technology is based on more than 10 years of clinical data demonstrating the ability of our autologous cell product to regenerate diseased and damaged tissue.
When Stockhouse last caught up President & CEO and Co-Founder, Thomas Smeenk, in December, amongst other newsworthy items, the company had just announced 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.”

Stockhouse Media’s Dave Jackson was joined again by Mr. Smeenk to update shareholders on the latest company happenings and to discuss a wide range of topics that biotech investors need to know.


SH: To start off, Thomas, can you update our investor audience and your Hemostemix shareholders on any new company developments since we last spoke in December?

TS: Yes, we announced our last press release was announcing the repricing of warrants from $1 warrant to 55 cents a warrant. And it is probably best explained in the context that we raised about $8 million in 2020 each raise included a warrant and the warrants were priced at a dollar or in the 5 cent equivalent post roll back a dollar, the that was at a 500% premium to the unit price. So we're now repricing those to a 55 cent exercise price. This is the March 5th and the March 25th warrants. We also increased the time period that the warrants can be exercised for two years they are subject to an accelerator which means that if they trade at a 20% premium to the 55 cent price, essentially 66 cents for 10 consecutive days, then the company can notify the warrant holders of the early exercise of the warrants calling those warrants in to be exercised within 30 days of the press release.

SH: And any updates on you plans moving forward through 2021?

TS: Yes, we've got an exciting year ahead of us. We have just announced this, this restructuring of the warrants we have approximately $34 million of financing that is extent in the warrants that can be called. And that, that really sets up the company to move forward. In terms of the phase two clinical trial, a phase three clinical trial, following the successful close out of the phase two commencement of production in a manufacturing facility that will be established for the benefit of all shareholders here in Ontario, in a region of Ontario that is economically disadvantaged, which gives us an opportunity to not only grow the business, but grow in an area of Ontario where we are open to receive government, low interest loans and grants and to access capital in that structure as well. And so that, those, those milestones will be certainly I think, achievable around the fourth quarter of 2021 and perhaps into the first quarter of 2022.

SH: For our audience that might be new to Hemostemix, can you tell us a bit about the history of the company?

TS: Yeah. As I mentioned in our last intercourse, there is a very interesting history. I would encourage, I would encourage investors to go back Dave to our first interview where we, I think did a very good job of describing the history of the company, suffice it to say that the company has come through a very difficult period. We did a workout in 2020, that was a rescue of a company that has a very promising technology. I did that workout because again, this was the second time that the shareholders were getting screwed out of their equity. Unfortunately, by a rogue management team who attempted to structure a loan to own, to take the assets for their own account. We prevented that from happening paid back their loan to own and raised $8 million in 2020 to move the company forward.

SH: You’ve just announced that all follow-up visits of the subjects enrolled in the HS 12-01 clinical trial will be completed by March 31st and company warrants will be extended and repriced. Can you walk us through this?

TS: Yes. By all means. So the clinical trial is focused on critical limb ischemia. That's a disease that end-stage diabetic suffers from where they lose circulation to the toes, feet, and legs, and that results in ulcerating wounds that eventually turn gangrenous and that results in limb amputation. There are over 1 million people that lose a limb to amputation here in North America and the ACP. The treatment that we have as a company is an injection in to the lower limb in up to 22 injection sites, typically around the wound and what we are witnessing in the clinic and in the results that the university of British Columbia and university of Toronto announced where they announced that 83% of the patients they had followed in our clinical trial for up to four and a half years had healing of ulcers that would otherwise not heal cessation of pain related to those ulcerating ones that would otherwise not heal and had ultimately saved their limb from amputation.

So what we're seeing is the is the results that, where this is a viable treatment, the six, there are two patients in follow-up in January, two patients, and follow up in February or patients and follow up in March for a total of 65 patients who will then have gone through a 12 month follow-up. And for this, this disease and, and our therapeutic that will be concluded at the end of March, we will then be in a position to close out the study, do the statistical analyses to prove scientifically what we have seen in the clinic. And what we have seen as an interim result is announced by UBC and University of Toronto.

SH: You’ve also recently announced a ‘Bread’ contract with the Federal Department of Foreign Affairs, Trade & Development. What can your shareholders and would-be investors glean from this initiative?

TS: Yes, the trade commissioners of Canada are like a sales team for a company like Hemostemix. So if you go to a jurisdiction like Japan or South Korea, for me to engage a CEO to CEO with a company that may be interested in licensing a technology like ACP is at least a year long process. When you go through the trade commission of Canada, they have already established a protocol with the, of these companies. They have established a short list of companies that are interested in licensing or in licensing technologies like ACP. And they're really a very effective arm of a company like Hemostemix where they will create a short list of companies that have expressed interest and then set up calls, see how to CEOs that we can, we can talk about business rather than me spinning my wheels for a year to try and get to try and get the appointment.

So that is the trade commission of Canada and how they work in foreign jurisdictions for companies like Hemostemix. And this is being done now in Japan and South Korea simultaneously. And in the US, they gave us an entree into Biocon sponsored us as one of seven companies that are very promising Canadian biotech companies to get us in front of the US audience that that we, you know, very much want to engage with. Again, that speaks to really what I would call the Canadian way of government working with business and, and really getting business done.

SH: It would be remiss of me not to mention your stock has had a very nice bump over the last six months up over 500% since early October. What can you tell our investor audience regarding the current valuation of your stock and why you think it’s still a good buy right now?

TS: The company of market cap today is 25 to $27 million. And that's up from as you said up five times, that's still less than one 10th of what our peers are trading at. And the, as I mentioned in our last the last time we got together what is really critical for a biotech company is the data. And of course the end results of a phase two clinical trial that is coming up at the we'll have the data by the end of March, we'll be able to analyze that data in April. I hope to have a release of that report either by the end of April or in the first weeks of May. And if it isn't keeping with the results that U of T and UBC released on an interim basis, if it's in keeping with the results of the previous clinical trials that the company has conducted in peripheral arterial disease you know, you've got you've got a stock that should be trading at $250 million market cap up to, I would argue up to a billion dollar market cap. And so, you know, therein lies anywhere from a 10 to a 40 a bagger. And I think that, you know, it behooves risk investors to take put Hemostemix in the risk on a category.

SH: How do you envision Hemostemix positioning itself to become a global market leader and what does the road to profitability look like?

TS: So we recognized early on that the company had to be able to scale its production process in order to achieve a profit and ultimately a global reach a global opportunity. So in 2008, we contracted burn engineering to complete an analysis, essentially, a feasibility analysis of what off the shelf components we could they could take assemble into a manufacturing device that would enable us to produce one batch, then 10 batches, then a hundred batches, and then a thousand batches, then 10,000 batches a week. How do you do that? And so we, we did that exercise. We patented that that process after completing that analysis. And I've got the engineers that did that analysis ready to rejoin the team to implement that as a production method.

So we are going to put a lot of resources into automating the production process to enable us to scale up to 10,000 batches a week. And at I'll let you do the math here at $25,000 a bad you know, at a thousand batches a week, that's 25 million a year, right? So that's a week. And, and that describes the opportunity here. You know, this is a there are 200 million people that are walking around with peripheral arterial disease. There are a million amputations every year due to critical limb ischemia at $25,000 a limb, people will spend $25,000 to purchase a car. You would think they would spend $25,000 to save a limb. And you know at a million that's a $25 billion market in and of itself just critical limb ischemia and what my pitch to investors here is that if you want to think about team systemics as a global company think about Amazon as a global company in the retail space.

Well, my positioning of Hemostemix is we have an opportunity to become an Amazon equivalent in the autologous healthcare space, treating critical limb ischemia, peripheral, arterial disease, heart failure angina critic C O P D. And all of these are diseases of ischemia, which we have already clinical evidence of safety and efficacy. So this is really a global opportunity. I've got the team that has come together to address this as a global opportunity. And we're just getting started.

SH: Can you tell our audience a little bit about your corporate management team, along with the experience and innovative ideas they bring to biotech market?

TS: Sure. Well, it starts with the independence of our board of advisors and then the independence of our board of directors, and then you know, a very well-regarded management team. So our board, I, I recruited on purpose, a very independent board of advisors who would be able to advise the, the, the board and the management team on creating a global company that includes Sheila Copps, the former deputy prime minister of Canada, David Sam, the former solicitor general of Ontario, Tim Chang, a former managing director of private equity investment for service in AIG and Hong Kong. And the board of directors includes a chairman, Peter Lacey, who is also the was the executive. The CEO and exec is now the executive chairman of service corporation, a company he built from one John Deere dealership to now 63 company owned John Deere and Peterbilt dealerships that are profitable doing greater than $1.1 billion a year, not just in North America, but in in Australia and New Zealand as well. So Peter is joined by Dr. Ronnie Hershman, a cardiologist out of New York who invested over a million dollars in the company and did so when he saw the results that ACP regenerating in the heart patients. And, and he's joined by Mr. Swanberg of the, one of the Swanberg brothers of the Swanberg brothers trucking company as a very esteemed businessmen out of Lethbridge, Alberta, and then myself on the board. And then on the management team, what I did was I recreated some to some extent the management team we had that was running the company as a private company. Dr. Ina Sarel is the chief scientific officer. She's a co-founder of the company. She's a mother of NCP. We haven't even talked about NSC.

Yeah. She's joined by Dr. Pier Lyme grouper, an interventional cardiologist with some 32 years’ experience. He's the chief medical officer David recency, incoming chief financial officer, who is raised literally tens of billions of dollars on Bay street as an investment banker, Dr. Mary Argent-Katwala is our manager of clinical trials, a PhD, and in biology someone who has a very, a good grasp, not only of the clinical trial space, but of the marketing space as well. She spent she led a team that did over 65 market analyses to bring new products, new biotech products to market globally. And she did that with a small team that was really just focused on marketing, pure marketing. And then we have an engineer that's coming yet to be named who did the work workup for us on the automation of production someone who has got a really he's got his feet on the ground and is very experienced manufacturing engineer.

SH: And lastly, Thomas, if there’s anything else that I’ve overlooked and you’d like to add, please feel free to elaborate.

TS: Sure. Well, it is worthwhile to talk about NCP. So while ACP is a an angiogenic cell precursor, NCP is a neuronal cell precursor. And you know, this week I've been talking to two surgeons who are the brain surgeons, they're neuronal surgeons, neurosurgeons about NCP and how they would help us design studies of NCP that would enable us to move quickly through the phase one phase two phase three trials of NCP. So we do have a platform technology we've been able to not only derive ACP from peripheral blood, we've been able to drive derive NCP from peripheral blood, and we have derivations

That we believe we can patent to increase the patent portfolio and patent life of the company. Well, Thomas, it's always a pleasure speaking with you, please be well and stay safe. And we hope to talk to you again very soon. Thank you very much, Dave. Great to see you again. And I look forward to speaking with you in the very near future.

For more information, Contact:
Thomas Smeenk, Co-Founder, President & CEO

FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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February 11, 2021

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