SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (date of earliest event reported): September 12,
2008.
BioTime,
Inc.
(Exact
name of registrant as specified in its charter)
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California
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1-12830
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94-3127919
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1301
Harbor Bay Parkway
Alameda,
California 94502
(Address
of principal executive offices)
(510)
521-3390
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Statements made in this Report that
are not historical facts may constitute forward-looking statements that are
subject to risks and uncertainties that could cause actual results to differ
materially from those discussed. Such risks and uncertainties include
but are not limited to those discussed in this report and in BioTime's Annual
Report on Form 10-KSB filed with the Securities and Exchange Commission. Words
such as “expects,” “may,” “will,” “anticipates,” “intends,” “plans,” “believes,”
“seeks,” “estimates,” and similar expressions identify forward-looking
statements.
Section
7 - Regulation FD
Item
7.01 - Regulation FD Disclosure
The
transcript filed as Exhibit 99.1 is incorporated by reference.
Section
9-Financial Statements and Exhibits
Item
9.01 Financial Statements and Exhibits.
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Exhibit
Number
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Description
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99.1
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Transcript
of telephone conference call held September 12,
2008
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| BIOTIME, INC. | ||
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Date: September
12, 2008
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By
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s/Steven Seinberg
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Chief
Financial Office
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Exhibit
Number
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Description
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99.1
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Press
release dated September 12, 2008
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BioTime,
Inc. Conference Call Transcript – Sept. 12, 2008
Dr.
Michael D. West, Chief Executive Officer
I’d like
to welcome all those participating in our conference call today. In the last few
weeks, we have received numerous requests for information regarding BioTime’s
recent technology acquisitions in the field of stem cell research, and for
clarification of BioTime’s business plan going forward. We therefore scheduled
today’s conference call to discuss our plans for building out our business in
this sector; specifically, the nature of the markets and opportunities in
regenerative medicine, the scope of our new intellectual property, the landscape
of competition, and lastly, our future plans relating to financing. We will be
making some forward looking statements in which we will seek safe harbor under
the SEC rules. We encourage those who have an interest in our company to
carefully read our filings with the SEC.
So, let
me begin with the rationale for the field of regenerative medicine in general.
For some perspective, it is important to remember that the human body is, after
all, a collection of billions of diverse cell types that cooperate to maintain
human life. If some of these cell types become old or dysfunctional, the result
can be chronic degenerative disease. As amazing as it sounds, we have a
sophisticated infrastructure in the US to overnight the delivery of a piston for
the repair of an antique car that breaks down, but we have no capacity to
deliver new heart muscle to a patient after a heart attack (which is, by the
way, the leading cause of death in the United States). Many of the degenerative
diseases of aging are like this. The list is too long to detail here, but
diseases like age-related macular degeneration, diabetes, stroke, Parkinson’s
disease, Alzheimer’s, and osteoarthritis are some examples of the chronic and
debilitating diseases that can lead to many years of expensive medical care.
Accentuating the growth of these markets is the aging of the baby boom
generation, a phenomenon known as the age wave. This tsunami of medical needs is
expected to break onto the shore of medical clinics shortly, with the first baby
boomers turning 65 in three years. The age wave is considered by many to be the
demographic and medical trend of our time. Parenthetically, the recent
appointment of Dr. Robert Butler to our Board of Directors, one of our nation’s
leaders in setting US policy on aging reflects BioTime’s plans to focus on
delivering new and important products in this sector.
Historically
the principal approaches to the treatment of degenerative disease have been
strategies such as small molecule drugs and surgery. Drugs are chemicals that
can target and alter certain chemical reactions in the body, hopefully to bring
a therapeutic benefit at a dose lower than that which would cause toxic effects.
Drugs have been a boon to medicine, but pharmaceutical companies are suffering
from a lack of product pipeline, in part due to the inability of chemicals to
repair the effects of degenerative disease.
In the
late 1970s, the revolution of recombinant DNA (the ability to cut and splice
DNA), led to a revolution in medicine we now call “biotechnology”. This opened
the door to the large-scale manufacture of proteins as drugs. Today, some of
those early companies have multi-billion dollar market capitalizations. But like
small molecule drugs, there are limits to therapies one can fashion from
recombinant proteins. No one, for instance has ever marketed a growth factor for
regenerating the heart after a heart attack.
In 1995 a
new era of medicine was born now commonly called “regenerative medicine”. A
cornerstone of this new technology is the discovery of the controversial cells
known as “human embryonic stem cells”. Stem cells are cells that like the
branches of a tree, can change into multiple cell types. There are some stem
cells in the adult human. For example, there are stem cells in our bone marrow
that can branch out to become the red and white blood cells and continually
regenerate those cell compartments throughout our lifetime. However, these
“adult stem cells” are generally very restricted in their potential. For
example, there is little evidence to support the view that there are stem cells
in you or me capable of regenerating the heart after a heart attack, or the
brain after a stroke. Embryonic stem cells are cells that exist in a human
embryo shortly after the egg is fertilized by sperm, but before any body cell
types appear. Because these preimplantation embryos are routinely made to
assist in reproduction and excess embryos are often discarded, an
effort was initiated in 1995 to use the discarded embryos to isolate cultures of
these all-powerful stem cells that could be expanded in number and kept
permanently in the laboratory (what are known as cell lines). The exciting thing
about these cells is that unlike adult stem cells, ES cells are capable of
becoming any of the thousands of cell types in the human body. The first
isolation of these cells in 1998 opened the door to the day when companies can
see a path to manufacturing any of the cell types in the human body for the
first time in history. The patent on human ES cells is held by the Wisconsin
Alumni Research Foundation and is licensed nonexclusively to BioTime. This
revolution of regenerative medicine is gaining steam and several companies have
started up with a goal of becoming an industry leader. Only a handful of
companies however, are focused on embryonic stem cell technology. The majority
of companies utilize adult stem cell technology.
Because
ES cells were cultured from human embryos, President Bush initially banned any
federal funds to be used in the research. Then, on August 9, 2001, the President
authorized a small amount of federal funding on ES cell lines that were made
prior to his national address. These severe restrictions on research and the
enormous debate over their use boiled over to reservations in the private sector
to fund research or the companies advancing the new therapies. As a response to
the President’s restrictions, the State of California formed the California
Institute for Regenerative Medicine to fund $3 billion of research in the next
ten years to speed the development of novel human therapies.
The
cloning of a sheep named Dolly in 1997 suggested to stem cell researchers that
it might be possible to take another major leap forward. The Dolly experiment
showed that it was possible to transplant the nucleus of an aged body cell back
into an egg cell and thereby reprogram the DNA back into a young all-powerful
embryonic cell capable of making a pregnancy, and then an identical copy of the
original animal. The question then was, could we develop a technology to
transport an aged human cell back in time to the embryonic cells from which we
are made, and then rather than make a cloned human being, could we divert the
resulting embryonic cells into cloned embryonic stem cells and use them to
regenerate function in aged and diseased tissues. While “therapeutic
cloning” was never intended to be used to clone human beings, it has been one of
the most controversial technologies in regenerative medicine.
Early on
it became clear that cloning would become obsolete if a means could be found to
reprogram human cells synthetically, that is, by using defined molecules and
without using controversial methods involving egg cells or creating embryos.
Over the years at Advanced Cell Technology I and my colleagues filed a series of
patent applications on how this could be done. Then in 2007 came international
news first from Japan and then in the US that such reprogramming had been
demonstrated in the laboratory. The US group reported that a mere four genes
appeared to substitute for the egg cell in cloning. Specifically, they showed
that the genes OCT4, SOX2, NANOG, and LIN28 when packaged into viruses and then
used to infect human skin cells, could transport the cells back in time into
embryonic stem cells. While virtually identical to embryonic stem cells, these
cells were renamed “induced Pluripotent Stem” (iPS) cells to distinguish them
from embryo-derived cells. In addition to being an early filing on iPS
technology, the patents we licensed describe a means of making these cells in a
viral-free manner, unlike the published papers. This improvement would
facilitate the use of the cells in human therapy.
The
importance of this technology needs to be understood and appreciated. First,
such a technique could supply ES cells and hence any cell of the human body
identical to the patient, and therefore not expected to be rejected by the
immune system. Second, the technique could be performed relatively easily, at
low cost, and high throughput. Third, since no embryos are made and destroyed,
and no egg cell donors are required, the use of this technique avoids many
ethical issues associated with stem cell research. Speaking on the
subject of iPS technology in his 2008 State of the Union Address, President Bush
said, "This breakthrough has the potential to move us beyond the divisive
debates of the past by extending the frontiers of medicine without the
destruction of human life. So we are expanding funding for this type of ethical
medical research." Many people are asking how the current political season and
the debate over stem cells will influence our business. Senator Obama has been
very clear about his support of stem cell research. In regard to Senator
McCain’s position, he has publicly stated and indeed voted in support of the
research. I have spent some time face-to-face with the Senator specifically
about iPS technology, and he expressed in that meeting a willingness to advocate
a bill to advance iPS as our national resolution of the stem cell
debate.
Patents
were filed or licensed by Advanced Cell Technology on iPS technology, and one
patent in particular (PCT/US2006/030632) describes the use of the four genes
OCT4, SOX2, NANOG, and LIN28 to reprogram human cells, and was filed
approximately two years before the first published reports of iPS. We
were happy to announce on August 21 of this year that we obtained two licenses
to this family of patents for many human therapeutic uses. These licenses permit
us to use a bundle of stem cell technology, including the right to use patent
(PCT/US2006/030632) in conjunction with other licensed technology. The licenses
were obtained on terms very favorable to BioTime.
A
remaining challenge to the field of regenerative medicine relates to the
complexity of cell types originating from ES cells. Few appreciate the
complexity of the thousands of cell types that these cells turn into. In the
last few years, Advanced Cell Technology developed a novel technology called
“ACTCellerate” which allows the isolation of over 140 human cell types in a
highly purified and scalable form. The purity of these cells should lessen
concerns about the transplantation of undesired cell types. The
scalability of the cells is anticipated to be useful in the manufacture of large
quantities of the cells for sale to research scientists in the near term, and as
therapeutic products in the long term. On July 16th of this
year, we announced the exclusive license of the ACTCellerate technology,
including all of the existing cell lines. The license allows ACT the opportunity
to purchase back human therapeutic uses in its core business areas should it
elect to do so in the future. Otherwise the license is for all uses. The
economics of the deal were on very reasonable terms and outlined in our
8-K.
These and
other patents licensed by BioTime from Wisconsin Alumni Research Foundation and
International Stem Cell Corporation and its subsidiary Lifeline Cell Technology,
LLC, and patent applications owned and filed by BioTime give the company some of
the most advanced technologies in the field of regenerative medicine,
technologies that allow the production of all human cell types without using
human embryos.
It has
been estimated that the cell therapy markets will exceed $8 billion within the
next decade (http://www.stemcellsummit.com/2007/stem-cell-fact-sheet.pdf).
Regardless of the accuracy of such predictions, it is clear that an estimated
3,000 people die every day in the United States from degenerative diseases that
could potentially be treated with the new technology of regenerative medicine.
Being well positioned to become a leader in this new area of medicine through
the creation of an intellectual property portfolio that we believe will lead the
field in the coming decade, BioTime plans to aggressively leverage its
intellectual property, through corporate partnerships to become the first
profitable biotechnology company in the emerging field of regenerative medicine.
Our focus will initially be on near-term research products sold from our online
database Embryome.com. These include the diverse array of human cell types we
have made with the ACTCellerate technology, the cell culture media used to
culture the cells in the laboratory dish, a variety of media we call ESpanTM, cell
lines genetically modified to emit light when certain genes are activated useful
in basic research and in drug discovery, a product called ESpyTM, as
well as an array of differentiation factors useful in turning stem cells into
various kinds of cells, the first such product being specific pathogen free
(SPF) chick embryo extract. We anticipate that the SPF product line will grow to
include a wide array of products useful in both basic research and in the
manufacture of human therapeutic products in the coming years. For the
development of numerous of therapeutic products deriving from our stem cell
technology, we will likely collaborate with other companies,
preferably in exchange for compensation in cash up front payments, milestone
payments, and royalties on the sale of any products we collaboratively develop.
This will leverage the larger capital resources of pharmaceutical companies for
expensive human clinical trials. Since our internal product development will be
focused largely on near-term research products, we anticipate any future
financings to be relatively small in scale compared to the financings required
by small companies attempting to perform human clinical trials on their own.
This strategy should help reduce the dilution of ownership for our
shareholders.
Well,
thank you for the opportunity to describe in brief detail some of our plans. Now
I would like to directly address some of the questions you have sent
us.
The first
question is:
1. “Do
you have a continuing association with Advanced Cell Technology?
What is the history between you, BioTime, and ACT? Are both BioTime and
ACT located in Alameda, CA”?
Answer:
Neither I or any of BioTime’s employees have any relationship with ACT. I became
the CEO of ACT in 1998 after I left Geron in order to develop cloning
technologies in human medicine. I left ACT last year, and currently have no
relationship with them. ACT used to have a laboratory in Alameda, near BioTime,
but that is mere coincidence. As I just mentioned, BioTime has licensed a
portfolio of patents from ACT, but does not collaborate with them in any other
way.
The next
question is:
2. “I
notice Dr. Thompson and a lab in Japan have published their work on
iPS. Since they did the work and published on it, isn’t all the
intellectual property theirs? How does the license that BTIM has recently
acquired relate to this work?”
Answer:
That’s a good question. Actually, patents are awarded on the basis of who first
filed or invented a patent, not on who was the first to publish a scientific
paper. We will see how the patent office decides inventorship on iPS, but we are
very comfortable that the licensed intellectual property is among the earliest
filed patents in the area of iPS.
Another
question is:
3. “With
the $3 billion stem cell initiative going on in California, is BioTime filing
any grants? Are “for-profit” companies eligible for money?”
Answer:
Initially, in the first round of grants, companies were not allowed to compete.
However, as of now, companies as well as universities are allowed to compete
side-by-side. And BioTime has grant applications pending and will likely
continue to file for grant funding in the coming years. As we have mentioned,
the California Institute for Regenerative Medicine bought a subscription to our
online database Embryome.com on behalf of the scientists residing in the
State.
The next
question is:
4. “The
listing of patents you have recently licensed is quite long. Why did
you need to license all this technology?”
Answer:
The list is indeed long. The good news here is that the timing was right for us
to get what we think are the home run patents and bargain prices, and not to
have the excess baggage of older outdated intellectual property. Our bet is that
these patents will give us important leverage to generate significant cash
payments and royalties in the coming years in our planned corporate
collaborations.
The next
question is:
5.
“When will BTIM see some revenue from this new research products
emphasis?”
Answer:
We have already begun the role out of our first products. Our ACTCellerate cell
lines and media are being added to our website as we speak. If you visit our
website Embryome.com, you will see how we are marketing the products. Our
revenues will be modest, of course, in 2008, but with anticipated marketing
partnerships in the coming year, we anticipate sales to increase in
2009.
The next
question is:
6. “I
notice in your public filings that BioTime is low on cash. Where are you
going to get more money to operate?”
Answer:
We will likely do a capital raise shortly to fund operations over the coming
year. We will likely announce the terms of that financing within the next six
months.
The next
question is:
8. “Why
did the stock drop so far on 9/10/08?”
Answer:
We are not aware of any news that caused the drop in price. In the coming weeks
we will be presenting the Company’s technology in a variety of public venues
with the goal of attracting new investors and broadening our investor base,
which will hopefully provide more volume to help reduce day-to-day volatility in
the stock price.
The next
question is:
9. Given
the downturn in the stock on 9/10 due to the recent news of Advanced Cell
Technology’s continuing financial struggles, how will ACT’s current
struggles affect your ability to use what has been licensed from
them?
Answer:
We don’t believe ACT’s problems will affect us in a negative way. Our business
relationship with them is limited to our technology licenses. There is no
day-to-day collaboration. And the fact that they abandoned their California lab
actually worked to our advantage in that we acquired on favorable terms
equipment they left behind. Also, we built into the contract terms that allow us
to take over the management of licensed patents that they abandon. Lastly, there
are federal statutes that were designed to protect technology licenses in the
worse case scenario of a company like ACT going out of business or filing
bankruptcy. So we have no concerns in that regard.
10. “What
is unique about BioTime? How do you differ from the other companies out
there?”
Answer:
Our goal is to build one of the leading companies in the emerging field of
regenerative medicine. We believe embryonic stem cells have enormous potential
for medicine and the aging of our population will be creating unprecedented
demand for these products. We intend to focus our company on these large markets
of age-related disease. We have a demonstrated history of leadership in the
field, having previously built the leading ES cell companies. We have built one
of the finest GMP-compliant cell manufacturing facilities for embryonic stem
cell products. Our recent license of the critical and valuable technologies of
ACTCellerate and viral-free iPS technology, as well as other important
technologies give our company what we believe is the state of the art technology
that will be highly sought after by the pharmaceutical industry in the coming
years. The majority of other companies are focused on adult stem cell technology
that in our opinion will underperform compared to ES cell technology. We are
unique in having a real product pipeline, a product approved by the FDA and
marketed in the US called Hextend, Pentalyte that has completed Phase II, and a
long list of over 140 cell types made using the new technologies of regenerative
medicine, that we believe will change the face of medicine. Lastly, we are
focused on aggressively launching products that can be marketed in the near-term
with the goal of being the first profitable ES cell company.
If you
didn’t hear your question read it was because we believe we had already
addressed it in response to another question. So, with that we will conclude our
conference call. Thank you for participating. If any of you have further
questions, please feel free to call BioTime at (510) 521-3390. Have a good
day.
Forward
Looking Statements
Statements
pertaining to future financial and/or operating results, future growth in
research, technology, clinical development and potential opportunities for the
company and its subsidiary, along with other statements about the future
expectations, beliefs, goals, plans, or prospects expressed by management
constitute forward-looking statements. Any statements that are not historical
fact (including, but not limited to statements that contain words such as
"will," "believes," "plans," "anticipates," "expects," "estimates,") should also
be considered to be forward-looking statements. Forward-looking statements
involve risks and uncertainties, including, without limitation, risks inherent
in the development and/or commercialization of potential products, uncertainty
in the results of clinical trials or regulatory approvals, need and ability to
obtain future capital, and maintenance of intellectual property rights. Actual
results may differ materially from the results anticipated in these
forward-looking statements and as such should be evaluated together with the
many uncertainties that affect the company's business, particularly those
mentioned in the cautionary statements found in BioTime's Securities and
Exchange Commission filings. BioTime disclaims any intent or obligation to
update these forward-looking statements.