In an attempt to position its stem cell division for an initial public offering, U.S. BioDefense Inc. has formed a new subsidiary that will boost transplantation research in areas such as liver failure and brain and spinal cord injury.
The plan first is to form Stem Cell Research Institute of California Inc., and then to file for an IPO, possibly later this year, but the company has not disclosed a timeline.
Proceeds from that IPO then would be used to establish the first - with more to follow - Stem Cell Center of Excellence in Southern California. The center would focus on in-licensed research of the liver cell progenitor and its use for the treatment of liver diseases.
Earlier this year, U.S. BioDefense, of City of Industry, Calif., licensed world patents covering the research from UCL BioMedica plc, a subsidiary of University College of London. Researchers said that the repopulation of a diseased liver with healthy cells enables patients, particularly those with acute liver failure, to develop an artificial liver. By collaborating with area hospitals and university researchers, the center will develop a system that isolates and expands stem cells that could be used in liver disease patients.
As a new subsidiary, Stem Cell Research Institute will leverage U.S. BioDefense's current resources in the areas of accounting, marketing, management, lab researchers and scientific advisers. Following the Southern California Center of Excellence, the company will establish several other centers to further collaborations involving university research.
Those agreements, some of which still are being negotiated, are for research that could lead to treatments for brain and spinal cord injuries, diabetes and other conditions.
In addition to its agreement with Biomedica on liver cell progenitor, U.S. BioDefense is working with the University of British Columbia on a human neural crest stem cell line and its use in human transplantation possibly to cure brain and spinal cord injuries. With the University of Minnesota, it is studying a method for selective engraftment of drug-resistant hematopoietic stem cells to allow for a higher dosage of chemotherapeutic agents in cancer patients.
U.S. BioDefense also has an interest in research from the University of Michigan and the University of Texas M.D. Anderson Cancer Center. The first is focused on the isolation and characterization of a human oral keratinocyte that might help with chronic conditions such as diabetes or hemophilia. The second centers on the use of non-marrow stem cells for cardiac regeneration, which allows a person to serve as his or her own source of donor cells.
To get ahead of the funding game, U.S. BioDefense already filed with the National Institutes of Health a research grant proposal called "Center for Excellence in Translational Human Stem Cell Research." That filing was made in March in response to a $4.5 million grant RFA, or request for applications.
Within the next 10 years, U.S. BioDefense said, as much as $14.2 billion will be invested in stem cell research worldwide and the U.S. will take a share of about $3.6 billion. By forming the new subsidiary and establishing the Centers of Excellence, the company hopes to lead the stem cell industry in California.
The company's CEO, David Chin, who could not be reached for comment, said in a prepared statement that U.S. BioDefense will open the IPO door to large and small investors in an attempt to model the auction process used by Google.
"If successful," he said, "the Stem Cell Research Institute IPO will benchmark the industry, accelerate research and benefit humankind."
U.S. BioDefense's stock (OTC BB:UBDE) surged Monday, rising 98 cents, or 19.5 percent, to close at $6. On Friday, the day the news was announced, the stock rose 50 cents, or 11 percent, to close at $5.02.