Russian Stem Cell Innovations – Waiting for Investments

THIS POST WAS ORIGINALLY PUBLISHED JUNE 20, 2007

 Russian Stem Cell Innovations – Waiting for Investments

In April and March this year I had a series of post regarding stem cell therapy in Russia:
STEM CELL THERAPY RUSSIAN IPO – CERTAIN CONSIDERATIONS – PART I
STEM CELL THERAPY RUSSIAN IPO – CERTAIN CONSIDERATIONS – PART II
STEM CELL THERAPY RUSSIAN IPO – CERTAIN CONSIDERATIONS – PART III
STEM CELL THERAPY RUSSIAN IPO – CERTAIN CONSIDERATIONS – PART IV - A RUSSIAN STEM CELL THERAPY BREAKTHROUGH

A few days ago I have visited the company that is referred to in the last post. This is IBMED - the Institute of Biological Medicine – the company that is the first in Russia to receive the license from the Federal Inspectorate for Healthcare and Social Development for the use of stem cell therapy.

 

“We turn the clock back” – that motto is right at the entrance of a new office of the company.
The company has a small clinic and each of the patients gets a symbolic souvenir - the clock that runs back – just to remind of the motto.

It had been 6 month ago that Bloomberg produced a story on IBMED and here we are again with the chief of Moscow bureau of one of the world’s top business magazines. Academician Alexander Kovalenko, the man behind the scenes, agreed to speak to us on various matters regarding IBMED. 

In what may sound like a cheap newspaper story, IBMED idea was conceived at the friendly party - way back in 2001 at the summer house (datcha) of Alexander Kovalenko. As it was usual at those times the family and friends got together to celebrate the next anniversary of the Bolshevik revolution. During late night discussions the sons of Alexander cited Bill Gates and lamented on the missed opportunities and lack of suitable business ideas. But Kovalenko was of a different opinion – he pointed to Gennady Sukhih, a member of the Russian Academy of Medical Sciences (RAMN) – and old friend, who was heavily engaged in stem cell research. “Here is a real chance and new opportunity – stem cells! That will overshadow Bill Gates.” And this was the beginning. 

Alexander Kovalenko through all his life proved to be a gifted businessman (if we may apply this label to a Soviet times functionary). Before 2001 he was the Deputy Director of the Chernobyl Nuclear Power Station (in the aftermath of the disaster), responsible for the nuclear security. He managed to built efficient structure that prevented the personnel from being exposed to excessive radiation. He than tried a new venture with nanotechnology, but that was way too early. At the time of our story Mr. Kovalenko was the prominent leader of the International Foundation for Assistance to Chernobyl Victims. And it was natural that IBMED was formed under the auspices of this Foundation. A number of well known world leaders were involved with the Foundation including Mikhail Gorbachev.

Since its inception in 2002 IBMED attracted the top Russian medical scientists. Currently IBMED is an international research, development and applied medicine company specializing in development of stem cell therapy and its applications, principally focused on differentiation of growth factors of stem cells and associated technologies. The Company presently has a substantial portfolio of medicinal products and patent applications in stem cell fields. These include technologies to produce stem cells products for use in therapy of a number of diseases. In fact I gave a general outline of company’s business in my post of March 1. From the applied medical side IBMED has a very appealing story to tell. As to the current patients’ list, Mr. Kovalenko did not elaborate. However he mentioned Vladimir Bryntsalov, a Moscow pharmaceutical tycoon, you may read about it in the Moscow News piece.

What differentiates IBMED from its peers: (a) scientific research in stem cell therapy; (b) a proven track record of sales of IBMED products in Europe; (c) efficient operational small scale clinical unit. 

“ Americans lost a lot of time in their fight with (President) Bush. They lost substantial momentum in scientific stem cell research. I guess a great input is being made by Governor Arnold Schwarzenegger. However, in these research activities it is next to impossible for one country to become a leader. Only international cooperation may bring success.”

From business point of view IBMED is a small venture project. But this venture has already some good things in it stock. There are about 70 preparations developed with 15 of them ready for immediate sales. (By the way some of them are already approved for conditional sales in the USA by the U.S. Food & Drug Administration). You may find the list on the company’s Web-site. There are virtually unlimited list of applications: food supplements, cosmetics, sports, veterinary, etc.

“ I am looking for strategic investor that may help me to set up proper sales mechanism; would assist IBMED in its medical treatment management, and would bring high class business expertise.” The company now is in preparation for initial public offering and possible private placement. The money is required to straighten out all appropriate legal and IP issues and expand development of new medicinal products.

We also interviewed Yuri Bloshansky, Chief Physician, Director of IBMED, Doctor of Medical Sciences, Professor. 

“Presently stem cell therapy may be compared with analog/digital communications systems. Current conventional therapy is an obsolete analog system. In a few years it shall be transformed to a new advanced “digital stage”. We should not treat a man, rather a cell.”

This is compete different approach that is now rapidly expanding. Within 4-5 years conventional medicinal products will be replaced with the new ones – the ones that are targeted towards stem cells, and these cells would cure a lot of diseases.

As an example Academician cited IBMED’s success in treatment of cancer patients. While the stem cell injections do not cure cancer, they substantially reduce pain and all side effects of chemotherapy. Right now IBMED helps its patents to withstand such illnesses as multiocular sclerosis, autoimmune diseases, Parkinson's disease, pancreatic illnesses, diabetes, sexual potency diseases. Just recently IBMED was approached by the German doctors to introduce stem cell methodology in treatment of “beer hepatitis” that is widespread in the country. And Academician Bloshansky was very direct – we need money to expand our services, and of course scientific research – to make the people happy.

This is a good example of the way Russian scientists grab the opportunity and develop new innovative projects. We do hope that within a few years IBMED would be the Russian leader in therapy worldwide.