Offering: 40 Membership Units in USCIM Fund XXII (“Fund XXII”), a pooled investment vehicle on a “best efforts” basis. Fund XXII will be managed by San Francisco-based asset management firm (the “Manager”), investing in a senior secured convertible note of a stem sell processing, manufacturing and banking company (the “Company”). The Company will use the new financing to provide working capital, expand sales and marketing activities, debt retirement and meet other current and future business needs. The convertible note will carry an 11% annual accrued interest.
The Company is a revenue-generating stem cell processing, manufacturing, and banking company with a leading position in dental stem cell storage and related services. Its primary service, Store-A-Tooth™, provides private banking of stem cells from children’s teeth for future use in the child’s personalized regenerative medicine. Store-A-Tooth™ is similar to cord blood stem cell banks like ViaCord (purchased by PerkinElmer) and Cord Blood Registry (purchased by AMAG Pharma). The Company has a proven and proprietary set of protocols for cell processing, expansion, validation, and cryopreservation. The Company’s laboratory provides these services under FDA guidelines for Current Good Manufacturing Practice (cGMP) human cell and tissue products. In addition, the Company team has expertise and protocols for stem cells from cord blood, adipose tissue, bone marrow, amniotic fluid, placenta, and peripheral blood, allowing for future expansion of its stem cell banking operation as well as for processing cells for autologous (cells from the patient, processed and used for that patient) cell/tissue products and therapies.
In 2000, scientists at the National Institute of Health discovered stem cells (non-controversial, adult mesenchymal stem cells – MSCs) in teeth. There are over 300 clinical trials studying MSCs to treat diabetes, spinal cord injury and other life-threatening and orphan conditions. With the discovery of MSCs in teeth, combined with highly specialized collection and storage services, clients can access an immediately available set of genetically matched stem cells for their own future personalized regenerative medicine.
Company’s Target Market
Approximately 30 million children will lose a tooth each year in the U.S. alone. About 7 million of them will have a scheduled extraction (e.g. wisdom teeth removals) and over 20 million children will lose an exfoliating baby tooth. Comparatively, while cord blood banking is a $1B industry in the U.S., it has an opportunity base of only 4 million babies born (cord samples available) each year, with only one chance for parents to make a purchase decision (as opposed to a purchase opportunity with each lost tooth for dental stem cells).
Company’s Product Offering
The Company has a consumer business and a commercial business. The consumer business is the processing, storage, and distribution of a patient’s tissue and/or stem cells for future autologous (from you, for you) use – Store-A-Tooth™. The commercial business includes products and services that support cell and tissue research and therapy. On the commercial business side, the company sells the Proviasette™. The product is the Company’s patented specimen storage container used to store frozen human tissue specimens. The company currently does not actively market the Proviasette, but through word of mouth, it has over 40 pharmaceutical and biotech customers using them. The Company provides cell-processing services for autologous cell/tissue therapy – currently developing protocols for the delivery of processed autologous adipose tissue for plastic surgeons. Additionally, the Company collects donated dental, cord, adipose, and placenta specimens, expands the MSCs from these specimens into multiple vials for MSC research use. Through distribution partners, these vials are sold to academic and commercial stem cell researchers.
Company’s Revenue Model
The Company’s initial tissue and stem cell banking service is Store-A-Tooth™ which is the collection, processing, and storage of the stem cells found inside the dental tissue for future personalized cell therapy. Store-A-Tooth includes a one-time processing component and a recurring annual storage component Parents enroll in Store-A-Tooth for an initial fee of $1,749 and $120 per year for continued storage (comparable to cord blood stem cell banking). The Company generates a 63% profit margin on initial processing and 95% on perpetual storage services on an ongoing basis. Payment plans, lower price service options, need-based grants, family plans, etc. are all commonly used components of the pricing model.
Company’s Value Proposition
The fields of regenerative medicine and cellular therapeutics show great promise. According to research by TriMark Publications, the regenerative medicine market, which includes stem cell therapies, is expected to grow rapidly to over $35 billion by 2019.1 According to Frost and Sullivan, the broader cell therapy market will grow to $180B by 2030. The use of dental pulp as a source for versatile and potent stem cells continues to gain momentum in the research literature and as a source for therapeutics.2,3 Dental pulp mesenchymal stem cells (DPSC) have advantages in growth potential and plasticity over other mesenchymal sources.4 This has led to discoveries strongly suggesting similarities between dental pulp stem cells and neural stem cells found in the central nervous system. A number of researchers have shown that DPSCs can be used to treat spinal cord injury and hypoxic brain damage.5,6 The utility of DPSCs, in particular their ability to differentiate into endocrine tissue, has made them valuable in a number of diabetes research programs. Recent studies have shown that DPSCs can be efficiently turned into pancreatic cell types and can reverse diabetes in mice.7,8
2. La Noce M., et al. Dental pulp stem cells: State of the art and suggestions for a true translation of research into therapy. J Dent. 2014 Feb 28.
3. Martin-Piedra MA., et al. Cell viability and proliferation capability of long-term human dental pulp stem cell cultures. Cytotherapy. 2014. 16(2):266-77
4. Stanko P., et al. Comparison of human mesenchymal stem cells derived from dental pulp, bone marrow, adipose tissue, and umbilical cord tissue by gene expression. Biomed Pap Med Fac Univ Palacky Olomouc Czech Repub. 2013. 157:1-5.
5. Yamamoto A, et al. Multifaceted neuro-regenerative activities of human dental pulp stem cells for functional recovery after spinal cord injury. Neurosci Res. 2014. 78:16-20.
6. Fang CZ, et al. Intraventricular injection of human dental pulp stem cells improves hypoxic-ischemic brain damage in neonatal rats. PLoS One. 2013. 8(6):e66748.
7. Ishkitiev N., et al. Pancreatic differentiation of human dental pulp CD117 stem cells. Regen Med. 2013. (5):597-612.
8. Kanafi MM., et al. Transplantation of islet-like cell clusters derived from human dental pulp stem cells restores normoglycemia in diabetic mice. Cytotherapy. 2013. (10):1228-36.
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