Key holders of BioPulse file to sell
The San Diego Union - Tribune; San Diego, Calif.; Oct 31, 2001; Penni
Crabtree;
Copyright SAN DIEGO UNION TRIBUNE PUBLISHING COMPANY Oct 31, 2001
Amid new warnings about financial problems, major shareholders in the
company that operates a controversial Tijuana clinic told federal regulators
they may try to sell a large portion of their holdings.
BioPulse International, which has offices in Chula Vista, filed a registration
statement late Friday with the Securities and Exchange Commission on behalf
of 11 shareholders who propose to sell 45 million shares "as soon as
practicable from time to time."
The shareholders, not the company, will receive proceeds if the sales occur.
BioPulse's over-the-counter stock, which traded for as much as $12 in
December, closed yesterday at 13 cents.
The proposed stock sale comes at a difficult time for the company, whose
unproven alternative cancer treatments drew the attention of U.S. and
Mexican authorities earlier this year.
In February, Baja California health officials ordered BioPulse to cease
providing desperately ill cancer patients with some alternative therapies,
including insulin-induced comas and cancer "vaccines" derived from human
urine.
Baja authorities said BioPulse had not filed for permits to provide alternative
therapies or conduct experimental research on patients. Many in the
established medical community dismiss the treatments as ineffective and
dangerous.
BioPulse also learned in February that the Federal Trade Commission had
started an inquiry into its advertising practices -- including whether it could
prove the claims of success it made for its treatments.
Since then, BioPulse's stock has lost most of its value and the clinic -- which
provides 90 percent of BioPulse's revenue -- most of its patients.
In its SEC filing, BioPulse offered a bleak picture for potential investors. The
company said it has reduced its staff to officers and directors "whom we are
not able to pay on a regular basis," and that BioPulse is "having difficulty
generating revenues."
Revenue for the quarter ended April 30, the last period that BioPulse
reported, was $265,360, compared with $1.1 million the same period a year
ago.
The regulatory climate in Mexico and uncertainty about the future of its
therapies and products "raises a substantial possibility of our being unable to
continue as a going concern," according to the filing.
Under Mexican law, the only way a clinic can offer many alternative therapies
is through a research license granted by Mexico's federal health department.
The clinics must submit a detailed protocol detailing their investigation, and
they can't charge patients to take part in the research studies.
But corruption and a laissez-faire attitude toward enforcing the law have
allowed alternative clinics to operate for decades. Only recently have
Mexico's health officials cracked down on illegal clinics, forcing them to seek
research permits or face closure.
In BioPulse's SEC filing, it outlined some business strategies that still appear to
contradict Mexico's health-care regulations -- posing a potential for new
problems.
BioPulse said in its filing that it was notified Oct. 17 that Mexican authorities
had approved licenses that allow the company to treat patients with three
alternative therapies, including a controversial insulin treatment. A fourth
license, to provide cancer vaccines, was approved provisionally, pending a
six-month review, the company said.
The company also said in its filing that it will charge patients "on a
fee-for-service" basis to take part in BioPulse's "clinical studies" in Tijuana.
BioPulse officials did not return telephone calls.
Dr. Alfredo Gruel Culebro, who oversees clinics and hospitals for the Baja
California Health Department, said yesterday that BioPulse has not yet been
approved for any license to provide alternative therapies.
He said the company will likely win permission to offer chelation therapy and
enemas, the latter because "while not effective, it isn't considered very
dangerous," Gruel said.
Gruel said BioPulse requested a license to use insulin in conjunction with
chemotherapy, but not in a way intended to induce a coma, Gruel said. If the
protocol for the study is approved, BioPulse will not be allowed to charge
patients for it, he said.
A license to offer cancer vaccines also has not been approved, nor can the
company charge patients for it, Gruel said.
"If it is proven that they are charging patients, the protocol will be suspended,"
said Gruel. |
