US Stem Cell Inc (OTCMKTS:USRM) had been looking promising, in gear, and in control of one of the more promising narratives bouncing around on the OTC in recent months following the successful extrication from some legal issues a few months ago. However, that narrative was powerfully dependent on one critical piece of the puzzle – a fact which became clear in the stock’s reaction to the company’s press release on Monday morning of this week.
Couched in the clothes of a message about expansion in its stem cell treatment centers and clinics, the company dropped the bomb that it is giving up on its strategy of obtaining Regenerative Medicine Advanced Therapy (RMAT) Designation from the FDA for its Myocell product. We got an update from the company a couple months ago that it was awaiting a decision from the FDA on this through its MARVEL trial. One can imagine that the market takes Monday’s press release as an indication that the FDA provided the company with a sense that there was no point in staying with the application process, for one reason or another.
US Stem Cell Inc (OTCMKTS:USRM) bills itself as a company committed to the development of effective cell technologies to treat a variety of diseases and injuries. By harnessing the body’s own healing potential, we may be able to reverse damaged tissue to normal function.
U.S. Stem Cell’s discoveries include multiple cell therapies in various stages of development that repair damaged tissues throughout the body due to injury or disease so that patients may return to a normal lifestyle.
USRM is focused on regenerative medicine. While most stem cell companies use one particular cell type to treat a variety of diseases, U.S Stem Cell utilizes various cell types to treat different diseases. It is our belief that the unique qualities within the various cell types make them more advantageous to treat a particular disease.
According to company materials, “US Stem Cell, Inc. (formerly Bioheart, Inc.) is an emerging enterprise in the regenerative medicine / cellular therapy industry. We are focused on the discovery, development and commercialization of cell based therapeutics that prevent, treat or cure disease by repairing and replacing damaged or aged tissue, cells and organs and restoring their normal function. We believe that regenerative medicine / cellular therapeutics will play a large role in positively changing the natural history of diseases ultimately, we contend, lessening patient burdens as well as reducing the associated economic impact disease imposes upon modern society.”
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As noted above, USRM shares tanked on Monday in response to the company’s indication that hope for an RMAT designation from the FDA was ill-placed. We’ve witnessed just shy of -50% ripped out of prices for shareholders of the name during the trailing week. What’s more, the listing has seen interest climb, with an increase in recent trading volume of 63% beyond what we have been seeing over the larger time frame.
As also noted, the company did include an announcement of a strategic expansion of its treatment clinic approach. Specifically, the company announced an aggressive plan to expand an additional 12 stem cell treatment centers and clinics in the US.
In the release, the company further clarified its new reality once again: “To be clear, U.S. Stem Cell will focus on our revenue generating programs that are treating patients NOW–which have successfully helped over 7000 patients thus far. Our company was founded in 1999 and has completed more clinical treatments (for both humans and animals) than any other regenerative medicine company in the world. In addition to our efforts at US Stem Cell Training and VetBiologics, our focus will be expanding and opening additional clinics throughout the U.S. to offer these cutting-edge technologies to more patients.”
At this time, carrying a capital value in the market of $13.7M, USRM has a store ($619K) of cash on the books, which is balanced by about $3.3M in total current liabilities. One should also note that debt has been growing over recent quarters. USRM is pulling in trailing 12-month revenues of $3.5M. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 62.5%. We will update the story again soon as further details emerge. For continuing coverage on shares of $USRM stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!