Thalio,
Thanks for stopping by and help me launch this new board & thanks also for your contribution to the new "board intro!"
And, thanks ONCE MORE for the following from last month's MUCL shareholder's meeting, transplanted from RB:
CENT^$^
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More Notes From Shareholders Meeting
This is from notes taken by Ms. Thalio. Added emphasis is mine. My comments are in italics.
IN ATTENDANCE
Gerald Newmin, Ron Faris, Andrew Parkinson, Barbara Corbett, the board of directors, the scientific advisory board, the auditor, their intellectual property attorney, a representative from the transfer agent.
SAB was meeting all day. They took a break to join shareholder meeting.
GERALD NEWMIN’S PRESENTATION
Impressions: Extremely professional, competent, serious, straightforward.
92% of shares were voted. This is considered very good.
Newmin announced a press release would be forthcoming in a couple of days
Delisted from Berlin Exchange June 11
Name change to Multicell approved by Rhode Island two days ago.
S-3 being re-submitted as SB-2 per SEC rules. (SB-2 is for Bulletin Board companies)
New ticker will be announced in a couple of days. NASDAQ will pick from a list submitted by the company.
Extremely optimistic about the future of the company.
Pfizer invested close to $1 million. They have a 15-year non-exclusive use of 2 cell lines for internal research. Pfizer has been instrumental in promoting the cells by publishing research and attending scientific conferences.
When Pfizer puts the cells into ‘production’ use in drug discovery/testing, they will have to purchase materials, and perhaps sign an additional license for this purpose.
Also the current agreement only covers two cell lines and not any future, improved lines.
Drug screening is the quickest route to profitability for Multicell (MCT).
RON FARIS’ PRESENTATION
Impressions: Intelligent, honest, enthusiastic, really charged up about the science at Multicell and the potential impact on health of public and growth of MCT. Affable, funny guy. Hard not to like.
Mission Statement: “Develop liver cell technology to change the traditional approach to drug discovery, therapeutic proteins and treatment of liver disease.”
Three Platforms:
(the market estimates are by Dr. Faris)
1) Short term: Cell lines for drug discovery, revenue generation for MCT. Estimated $500 million market
2) Medium term: Protein Biofactories ™ (therapeutic proteins). Estimated $5 billion market
3) Long term:
Cell based therapies/Liver assist $2 billion
stem cells $3 billion.
The Scientific Advisory Board (SAB) is looking at everything Faris has done. Making priority recommendations.
87% of drugs fail in clinical trials mostly because of lack of reliable in vitro models.
According to XT, the market for in vitro testing is expected to grow in part because MCT’s cells improve effectiveness of in vitro testing
80% of available livers are not useful for testing – yet another shortcoming of old method.
MCT’s current cell lines are best suited for enzyme induction assay. Initial data shows cells are good for hepatoxcicity testing.* Awaiting further validation, but initial findings are encouraging.
*some here will remember the e-mail from a Pfizer scientist who stated that the cells could do more than one function they would be “a hot commodity”. Well, here’s you second function.
It takes two years to develop an immortalized cell line. (one reason that even if the competition could find another method not covered by our patents, they would be far behind us)
Goals for cell development - improve functionality and marketability:
1. Validate hepatoxicity assay
2. Develop transporter assay (some drugs activate or deactivate cell membrane transporter and this is important data for ADME/tox work)
3. Create new liver cell lines (more cell lines means pharmas can better model population diversity)
THERAPEUTIC PROTEINS:
Some proteins that MCT cells can produce:
albumin (market $1.2 billion)
Factor VIII ($1 billion)
Factor IX ($5 million)
MCT is focusing on a unique protein not currently made by other cells. It addresses an ‘acute disease’ for which there is no treatment.
The estimated market size for treating this acute disease is $1 billion. He can not say more at this time as they intend to apply for a patent. He referred to it as the “magic x protein.”
Liver Assist Device:
Dr. Faris acknowledged that many early investors bought in because of liver assist device. But other company’s attempts at liver assist have failed: Circe (pig), Vitagen (tumor) Hemotherapies (filtration).
Faris wants to compare MCT cells to pig and tumor cells. Best way to do this is put MCT cells in competitors’ devices.
ANDREW PARKINSON’S PRESENTATION
Impressions: Serious, precise, thorough, hardworking, dry sense of humor.
Xenotech is actively marketing cells in US, Japan, Europe. USA is primary effort.
Japan is expected to be big because there are no organ transplants there and liver cells are much harder to come by. Has met with someone highly placed in Japan’s FDA who is very positive on use of MCT cells in Japan’s pharmas. [!!!]
Europe expected to follow US. Xenotech trained European distributor in Feb 2004.
Xenotech is required to pay the minimum amounts as detailed in their $18 million contract with MCT in order to maintain exclusive rights to distribute. Andrew fully intends to maintain exclusivity.
Most amusing part of meeting: In a mild Scottish brogue Parkinson described competing cells as CRAP!
Parkinson detailed his marketing efforts: presenting at conferences, road shows, direct mail, and advertising. The reprint of the Pfizer publication is a key tool.
The contract process:
Customers generally want to evaluate the cells for their own projects
First step is an evaluation license. It’s good for 120 days. There’s no cost for the license itself, but Andrew knows that if you give something away people don’t appreciate its worth.
He is charging for the materials:
Vials $340
Plated cells $540
MFE medium $140 liter
Once a customer has decided to go forward, there are two types of contracts to choose from:
A) Use and propagation license. $60,000 per site* per year. A discounted rate on supplies.
B) Use only license. Can not propagate. Buy cells from Xenotech as follows: Vials $680, Plates $1080, MFE medium $190 liter.
Most med-large pharmas have several sites. Amgen has eight sites. Roche has nine sites in the US alone (this is from Ms. Thalio’s own research. Bigger companies would be expected to have even more sites. Not all sites will be doing ADME/tox work )
Andrew has met with and had interest from three of the Roche site: Nutley NJ, Pennsylvania, Palo Alto.
Decrease in old license fee to new structure is offset by site by site and yearly charge. Also, more mid-sized companies interested, so the potential customer base is bigger.
It has taken longer than was first anticipated for sales to ramp up. Parkinson believes this was due to an overly burdensome contract. To alleviate this challenge, the contract has been reduced from 12 pages to 4.
Andrew described Big Pharmas as typically skeptical and slow to change by nature. But his experience has shown that once a few companies adopt a method, everyone else tends to jumps in very quickly.
He anticipates that Xenotech may not be able to manufacture enough to keep up with demand and is considering outsourcing additional capacity with a large supplier in Kansas City.
The following five companies have already signed the old (12 page) evaluation license: Amgen, Bristol Myers Squibb, Eisai, Lilly, Novartis (USA).
These two are actively reviewing the first license agreement: Astra Zeneca (USA), Aventis. (contract is with their legal departments)
These 15 US companies are waiting for the revised, streamlined (four page) contract: Abbott, Bayer, Boehringer Ingleheim, Biogen, Genzyme, Glaxo Smith Kline, Johnson & Johnson, Hoffman LaRoche, Lexicon, Merck, Millenium, Neurogen, Shering Plough, Wyeth.
Ten companies in Japan are awaiting streamlined contract: Daiichi, Takeda (Japan’s largest pharma), Fujisawa, Ono, Mitsubishi, Shinogi, Sumitomo, Japan Tobacco, and a few others.
NOTE ON OTC MANIPULATION
Interesting remark from Newmin after meeting. Dateline is preparing an expose on naked shorting that will be scandalous on the order of Enron.
Mr. and Ms. Th
(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy) |
