Business plus politics equals science: The underworld of regenerative medicine

Science is big business. Johnson & Johnson the pharmaceutical and cosmetics giant is worth trillions of pounds. Another, GlaxoSmithKline, owning brands from Panadol to Sensodyne toothpaste also worth trillions. Astellas Pharma, one of Japan’s major drug companies has recently made big news. They have bought out Ocata, a Massachusetts based company for £247million.

Image: Christiaan Botha

Image: Christiaan Botha

The company’s focus is regenerative medical treatments using human embryonic stem cells (ES). There is widespread controversy about their use, many of you will know and have a different opinion regarding how and when, if ever their use is justified. The very creation of therapeutic stem cells is central to the debate as it involves destruction of embryos. The debate is complex and multisided. Some argue that a life is created therefore termination is unjust. Whereas others feel that a life is formed at a later developmental stage and therapeutic value of these early pluripotent cells is too great not to utilize.

Ocata published promising results of a small scale study in the medical journal The Lanced, attracting world wide attention. The report provides data from four patients. Two with Stargardt’s macular degeneration, affecting vision in children and young adults and two with dry age-related macular degeneration, the leading cause of vision loss in people over the age of 50. The company developed a retinal cell line that one-year after implantation improved vision with no apparent safety issues. Implantation of stem cells can be dangerous as there is potential for adverse proliferation, tumorigenic behaviour and ectopic tissue formation.

However, this data is tentative. The company’s business history is plagued with political and economic set backs. In 2001 a media storm kicked off after the company claimed to have created the first cloned human embryo. Cloning experiments with human embroys are restricted to the private sector, limiting funding. Ocata claims that their products can avoid use of embryonic cells by using induced pluripotent cells (iPS). Discouragingly, this technique is in a turbulent infancy. The genetics of stem cells are not well understood, extensive experimentation with non-viral delivery of pluripotency genes needs to be developed and most scientists believe that embryonic stem cells cannot be replaced in basic research. A scandal in which unregistered shares were sold resulted in another economic setback to settle a civil law suit.

After changing its name and publishing promising results, coaxing ES cells into retinal cells, the company has taken on a more hopeful profile. Japan has a fast-track approval system for clinical trails allowing commercialization of this stem-cell treatment after less rigorous testing. In huge contrast to the US system where limited trials significantly hamper commercialisation. This only illustrates the disparity in policy surrounding science. How is it that in Japan, Ocata, the US born company may thrive due to fewer constraints? Why are there discrepancies in research protocol around the world which limit development, particularly in the medical field? Should there not be a standard procedure for medical trials that provides a unified standard of ethics and care?


  1. Anything (within reason) to get this to the people who need it now is within reason to do and in the great scheme of things must be done. However, I thought that Ocata had discovered how to get embryonic cells without harming the embryo. I guess now that they meant the iPS cells. But please hurry! My sister’s vision is getting worse with AMD. My best friend’s vision is even worse with AMD. I don’t know many people so if I know of 2 people with AMD who can’t drive anymore or do what they want, then this is a huge problem that needs a good solution!

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    • ps I am a long-term investor in Ocata. I have been through 3 name changes.

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    • They are able to produce embryonic stem cells without harming they embryo. As usual, an author fails to do due diligence on the company they are writing about. It is the same process fertility clinics use to screen for disorders before implantation.

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  2. The valuation, if it holds, shows investors that Wall Street is rigged, with companies off the market to retail investors when they are most profitable. OCAT was a great trading stock: not a single rally since 2009 held long-term. Hopefully the shares are being scooped up by a fund like Blackrock, who can afford to wait for a proper bid so they (and the longs) can profit.

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  3. The lack of credible and salient research behind this article is indicative of the lack educational training given to the students at the University of York and their Nouse publication.
    Your disinformation is transparent. To start:
    1. Astellas has not bought out Ocata but has made a tender offer of $8.50 per share.
    2. the safety profile is strong with no evidence, after 4 years, of adverse clinical effects

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  4. The last time Ocata used an embryo was well over 10 years ago. They have long since developed methods to extract a stem cell from an embryo WITHOUT HARMING THE EMBRYO, a point of fact that is repeatedly ignored by so-called journalists, most likely because it doesn’t fit their agenda of creating controversy in their articles.

    As other(s) have said, Ocata has not been bought out. Astellus has tendered an offer of $8.50 per share. A majority is required for Astellus to complete this merger.

    Any long term shareholder could tell you how severely undervalued this offer is – a little over 6 months ago Ocata was targeted by vicious short selling and the share price plummeted by ~50%. CEO Wotton stated at the time there were no fundamental changes in the company that could explain the sharp drop, nor any reason he could see for it. The Share price has been held at that level by heavy shorting and multiple articles designed to trash Ocata and the positive progress they were making. It is becoming increasingly clear Ocata and shareholders were being set up for this hugely undervalued take over.

    While Astellus trumpets an allegedly generous premium of ~90%, the reality is that this tender will leave many shareholders underwater – the same shareholders that supported this research for years and kept the doors open and the research going forward.

    At this stage the company is worth easily double this offer, and if allowed to continue with research to interim Phase II results, which by all accounts were expected to be positive, a valuation many times current value would be likely.

    If you want a real story, research how big pharmas routinely destroy company value intentionally in order to take over and gain huge profits for themselves, and in some cases ultimately shelf incredible advances in science because developing a cure is a not a good business model – ongoing treatment creates FAR more revenue for these huge pharmaceutical companies.

    The only positive outcome is that, as mentioned, Japanese regulatory agencies try to work with the companies to forward science, rather than work against them like US agencies, sometimes with apparently no other reason than to try to legitimize their own existence.

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  5. 23 Nov ’15 at 4:06 pm


    1. Ocata has a non-destructive method of producing embryonic stem cells that is patented. Once you take ONE CELL from ANY SINGLE EMBRYO, you no longer need any embryos. That one cell becomes a STEM CELL LINE, which means that the cell provides unlimited resources for treating UNLIMITED patients. Once cell, from one embryo, non-destructively, treats most everyone via Ocata’s chosen treatments, which are allogeneic.
    2. All treatments at Ocata, that are for any treatment are derived either from that one single line of stem cells MA09, or they are INDUCED PLURIPOTENT CELLS, which they have a special, non-viral technology using RNA, which does not modify the DNA of the cell, unlike the Japanese method, which results in MUTATIONS.
    3. The author here is not very accurate in her reporting, but gets the general negative posts of some very political posters quite well.
    4. I’m a long-term holder of Ocata equity. I’m not happy with the Japanese company coming in just as we were about to get Phase II results. Ocata’s Phase I results had 44 patients treate. Not one negative reaction to the cells. Over 90% had their disease halted, and over 60% who should have seen NO benefit because RPE cells do not restore rods and cones, but just nurse them, STILL HAD SIGNIFICANT RESTORATION OF EYESIGHT.
    5. Compared to almost any other biotech, Ocata should be priced between 1B, and 5B based upon those results alone. Phase II’s cohort, was intended to bring that to the next level as it was a PIVOTAL trial for SMD, in both the EU and US, though they were waiting for SPA designation in the US.
    6. So the Japanese company came and took the juicy company, just at it’s most opportune time, at the lowest price possible.
    7. It’s because of nonsensical, misinformed articles like the one above, that shareholders have continuously suffered. The ignorance and repeating of nonsense and old news, constantly, about this company, and not in the instance of other people, is what is the problem. For instance, it was CEO Michael West who was a big part of the first, less than ideal claims about “cloning”, and if you look in the news, Ocata’s Dr. Lanza actually did ultimately create adult therapeutically cloned cells, which are not for reproduction at all, but just for tissue creation. Michael West is CEO of Biotime. But these accusations have stuck with Ocata. This kind of anti-science ignorance from a science writer, and it’s happened at a few other disappointing publications, is part of what is wrong with the US biotech industry and regenerative medicine. Honestly, your piece severely dissapoints many of your readers for its inaccurate and political tone, which you may or may not be aware of, but which comes from article after article, initially posted by people who claimed that companies like Ocata are killing babies. An incredible, non-sceintific, unethical lie.

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