SCHEDULE 14A
INFORMATION
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240.14a-12
| BioTime, Inc. |
| (Name of Registrant as Specified In Its Charter) |
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Dear
Shareholders,
Since
we met last at our 2009 shareholder’s meeting, your Board of Directors and
management team have continued to build BioTime into a leading company in the
field of regenerative medicine. The term regenerative medicine refers to a new field of
medicine originating with the first isolation of human embryonic stem cells in
1998. Human embryonic stem (“hES”) cells have the potential of
developing into each type of cell found in the human body. This important
property of hES cells may one day allow the regeneration of portions of the
human body, so that tissues or organs that have become dysfunctional as a result
of degenerative disease or trauma can be replaced with new, healthy tissues or
organs. Regenerative medicine is therefore thought by many to have
the potential to bring about one of the larger revolutions in the history of
medicine. Examples of new regenerative therapies that may be
developed include cell-based solutions for macular degeneration, heart disease,
arthritis, neurodegenerative diseases, and cancer, as well as many other
potential applications.
We
are pursuing a plan to aggressively build the stem cell portion of our business
through the development and sale of stem cell products for the research market,
the development and acquisition of new stem cell technology and hES cell lines,
the development of advanced manufacturing technology, and the initiation of
programs to develop stem cell-based therapies. In order to support
these efforts we have also considerably strengthened BioTime's balance
sheet.
In
July 2009, we announced a co-marketing agreement with Millipore for the purpose
of marketing our stem cell products to university and biotechnology companies
for research use. We made our first shipments of BioTime's ACTCellerate™ cell
lines and ESpan™ growth media to Millipore in early 2010 and expect to report
increasing revenues from these products later in 2010. Millipore,
which is already a leading supplier of stem cell research reagents, is marketing
our product line through its direct sales force.
In
recognition that Asia is home to a large portion of the world’s aged population
in need of regenerative cell therapies, we have organized BioTime Asia, Limited,
a Hong Kong corporation. BioTime Asia will conduct research and development
programs in the People’s Republic of China, focusing on the treatment of cancer
and other diseases, and will work in collaboration with Dr. Lu Daopei, a leading
stem cell researcher and physician in China. BioTime Asia has already received
initial orders from four hospital-based stem cell research centers in China for
BioTime's stem cell products for research and development purposes.
Most
recently, we have announced the acquisition of the Singapore company ES Cell
International Pte Ltd (“ESI”). Since ESI was established in 2000, the government
of Singapore has invested approximately $35 million to build the company's
capabilities as a worldwide leader in the development of hES cell
technology. ESI's assets include patents, a bank of six new
clinical-grade human embryonic stem cell lines produced following the principles
of current Good Manufacturing Practice (“cGMP”), and a 49% equity stake in the
Israel-based stem cell therapeutics company Cell Cure Neurosciences,
Ltd. BioTime expects that the addition of ESI’s assets and scientific
team will enable it to more quickly develop its research products and potential
therapeutic products, and establish new commercial relationships.
We
have also initiated our first programs for the development of therapeutic
applications of stem cells, focusing primarily on the treatment of cancer and on
vascular, musculo-skeletal system, and hematologic diseases. Cancer
research and development programs will be conducted in the United States by our
subsidiary OncoCyte Corporation, which has been financed by an initial
investment of $4 million from private investors.
In
regard to intellectual property, we are continuing to file patent applications
relating to our licensed ACTCellerate™ technology and our stem cell
manufacturing technologies. Our acquisition of ESI also brought us a
portfolio of 20 patent families covering various aspects of hES cell
identification, propagation, genetic manipulation, storage, and directed
differentiation of hES cells into other cell types (for example differentiating
cells into neuronal progenitors, pancreatic progenitors, or cardiomyocytes). ESI
currently holds or licenses from others more than 50 issued patents in various
countries, including the United States, the UK, Australia, Israel, and
Singapore. Combined with BioTime’s existing intellectual property portfolio,
these patents now provide us with one of the leading stem cell patent portfolios
in the world. We expect that the value of our intellectual
property portfolio will continue to grow over time as the stem cell industry
expands, creating significant licensing revenue opportunities.
We
are also continuing to advance scientific knowledge in the stem cell
field. In March we announced the publication of a scientific paper
titled “Spontaneous Reversal of Developmental Aging in Normal Human Cells
Following Transcriptional Reprogramming” in the peer-reviewed journal Regenerative Medicine. The paper
explains the use of induced pluripotent stem cell or “iPS” technology to reverse
the developmental aging of normal human cells using precise genetic
modifications to reverse both the “clock” of differentiation (the process by
which an embryonic stem cell becomes the many specialized differentiated cell
types of the body), and the “clock” of cellular aging (telomere
length). Our study may open the door to the use of iPS technology to
manufacture young human cell types from a patient’s own cells. These
newly generated tissue cells might then be used to replace the patient’s damaged
or dysfunctional tissues, without the risk of rejection associated with
transplants of tissue or organs from organ donors.
Another
important strategic step in building our capacity for manufacturing human
cell-based therapeutics was our acquisition of ESI’s bank of six GMP human ES
cell lines. The development of clinical-grade human therapeutic
products requires high standards of quality control. The U.S. Food
and Drug Administration (“FDA”) enforces cGMP regulations with respect to the
manufacturing of human therapeutics for use in the U.S., and virtually every
country across the globe maintains some analogous standards for quality control
in the manufacture of human therapeutic products.
In
2007, ESI announced the world’s first hES cell lines derived according to the
principles of cGMP. ESI and scientists from Sydney IVF Limited, Australia's
leading center for infertility and in vitro fertilization (“IVF”) treatment,
also published a scientific report titled, “The Generation of Six Clinical-Grade
Human Embryonic Stem Cell Lines.” The paper outlined the procedures used to
document the production of clinical-grade hES cell lines derived on human feeder
cells obtained from an FDA approved source, produced in a licensed cGMP
facility, with donor consent and medical screening of donors. Combined with our
ACTCellerate™ technology that allows the derivation of human embryonic
progenitor clonal cell lines with high levels of purity and scalability, ESI’s
clinical-grade master cell banks may potentially be used to generate clonal
clinical-grade embryonic progenitor cell lines with a level of purity and
quality unsurpassed in the industry. We expect that the
acquisition of ESI’s clinical-grade hES cell bank will save us years of
development time and thereby accelerate the development of clinical-grade
progenitor cells for potential use in research products and therapeutic
products.
In
regard to strengthening our balance sheet, we recently received $8 million from
the early exercise of warrants by two of our largest
shareholders. This brings our current cash reserves to approximately
$19 million. We intend to offer to all holders of our outstanding
common share purchase warrants exercisable for $2.00 per share and expiring on
October 31, 2010 the opportunity, for a limited period of time, to exercise
their warrants at the same discounted exercise price of $1.818 per
share. If all of the warrants subject to the planned discount offer
are exercised, we will receive an additional $13.8 million and will have more
than $30 million of cash on hand and virtually no debt.
In
order to fund basic research, we sought and were awarded a $4.7 million grant
from the California Institute for Regenerative Medicine (“CIRM”) to fund
research related to our ACTCellerate™ technology that aims to “industrialize”
the manufacture of purified cell types for patient-specific therapeutic
products. The CIRM grant covers the period of September 1, 2009 through August
31, 2012.
We
are continuing to receive royalties from the sale of Hextend®, our
physiologically balanced blood plasma volume expander indicated for the
treatment of hypovolemia or low blood volume caused by blood loss during surgery
or injury. Hextend is marketed and distributed in the United States
by Hospira, Inc. and in South Korea by CJ CheilJedang Corp. under exclusive
licensing agreements. We received more than $1 million in royalties
from the sale of Hextend during 2009.
Recently,
the results of the first independent study prospectively evaluating the use of
Hextend in hemodynamically unstable trauma patients was published in the May
2010 issue of the Journal of the American
College of Surgeons. The 1,714 patient study, conducted at the University
of Miami Ryder Trauma Center, reported that initial resuscitation with Hextend
was associated with no obvious coagulopathy along with a reduced mortality of
5.2% in the Hextend group compared to 8.9% in the group that received fluid
resuscitation without Hextend.
Looking
forward to the rest of 2010, our goals include increasing revenue from the sale
of our stem cell research products, developing stem cell therapeutic products
through our subsidiaries OncoCyte and BioTime Asia, and pursuing research,
product development, and marketing opportunities through our recently acquired
subsidiary ESI.
At
the Annual Meeting of Shareholders, one of our incumbent directors, Valeta A.
Gregg, Ph.D., will be retiring from the Board of Directors after over five years
of service. As a biochemist, patent attorney, and biotechnology executive for
many years, Dr. Gregg brought to our Board talents and experience in both patent
law and science, with particular emphasis in the field of pharmaceutical
products. We thank Dr. Gregg for her years of service on our
Board.
We
would like to thank each shareholder of BioTime for your support since our
founding in 1990 as we now celebrate our progress over the past twenty
years. We believe that our late founding CEO, Dr. Paul Segall, would
be pleased that we are continuing the mission he established to improve human
health throughout people’s lives as we now endeavor to develop the potential of
regenerative medicine. We hope that you can join us on June 10 at our
Annual Meeting of Shareholders, which for the first time in many years will be
held in New York City. We look forward to seeing you
there.
| Sincerely, | |||
 |
 |
||
| Michael D. West, Ph.D. |
Alfred
D. Kingsley
|
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| Chief Executive Officer |
Chairman
of the Board
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| May 14, 2010 | |||