By JULIE GALLANT

Stem cells are versatile enough to have shown promise in treating a variety of conditions from neurodegenerative diseases to cardiac, ophthalmic, autoimmune and skin diseases. One largely untapped market segment, which is being explored by locally based Animal Cell Therapies, Inc., is the development of a stem cell therapy for orthopedic conditions in dogs.

Animal Cell Therapies, Inc. CEO Adam Irving said the company is partnering with veterinarian orthopedic surgeons across the United States to develop its technology, which is expected to come to fruition in the next 12 to 18 months. Irving anticipates being able to commercialize a product for veterinarians and pet owners by January 2014.

The market potential is promising. Of the thousand or so companies in the world working with stem cells, only about 10 of them focus on therapies for animals, Irving says. Yet, 39 percent of American households own a dog, and an estimated 78 million dogs are in the U.S., according to American Pet Products Association 2011-12 data. Targeting orthopedic ailments is a potentially lucrative venture, according to Irving, who says 16 million
dogs have arthritis. Secondarily, Irving sees opportunity in providing a therapy for tendon and ligament ailments.

“There’s a significant unmet need,” Irving said. “In some cases, the orthopedic opportunity in dogs is bigger than it is in human medicine.”

Few Competitors

Competition is also scarce, according to Irving, who says that among the animal biotech companies focused on stem cells only a few have an orthopedic product for animals: Vet-Stem Inc. of Poway, MediVet of Kentucky and StemLogix of Florida. “None of them have even 1 percent share of the market,” Irving says. “It’s a testament to the opportunity for all of us.”

Founded in 2008, Animal Cell Therapies is currently on the cusp of growth at its business office in La Jolla and laboratory in Sorrento Valley. The company just added three members to its staff to bring its employee count to eight. Joining the firm are Preston Munsch, head of business development; Dr. Chih-Min Lin, senior director of research and development; and Dr. Zhongling Feng, director of product development. The company’s goal is to double the size of its team in the next six to 12 months. And Animal Cell Therapies initiated a private placement offering last quarter that is expected to bring in $5 million when it closes in the next 30 to 60 days, Irving said.

Among the 30 or so individual angel investors in the company is Gary Petrucci, who is also on the company’s board of directors. Petrucci said he convinced his daughter, veterinarian Kathryn Petrucci, to found Animal Cell Therapies after seeing the work done with human stem cell therapy at Stemedica Cell Technologies Inc., where he is a board member. Gary Petrucci said Stemedica, a San Diego biopharmaceutical company that develops and manufactures adult stem cell products for use in clinical and pre-clinical trials, started a half dozen years ago utilizing Russian technology in the field, which he described as far superior to U.S. technology.

Legs to Stand On

While Gary Petrucci sees great potential for the human market as well as the animal market, he said focusing on treating ligaments in the hind legs of dogs alone is a $3 billion market.

“To me, it’s investing in a brand new technology that has enormous value in size and scale,” Gary Petrucci said. “I’ve invested a lot of venture capital in the past but stem cell research is probably the most exciting one in terms of outside potential.”

Gary Petrucci said the company believes there are other ailments that can be treated with stem cell therapy and is hopeful of proving stem cell therapy as a good alternative to surgery.

Dr. Roger Kuhn, a veterinarian who owns three veterinary hospitals in the San Francisco Bay Area, said up-to-date knee surgery for dogs costs in the range of $3,000 to $5,000, although it can be less for small dogs and less advanced surgeries. He added that more than half the dogs that injure their knee will wind up injuring their other knee within six to nine months.

The availability of stem cell injections would not only eliminate the need for surgery but it would also cancel the need for hospitalization, anesthesia, nursing care and physical therapy, Kuhn said.

“It’s probably the number one surgery that’s performed other than spays or neuters,” he said.

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Adam M. Irving

Hometown: Baton Rouge, La.

Education: Louisiana Tech University, bachelor of arts speech communication

Work Experience: Eighteen years in medical device and pharmaceutical industries; various leadership roles with Pfizer, Boston Scientific, Guidant, FoxHollow, Cardiovascular Systems Inc. and Animal Cell Therapies. The experience launching breakthrough medical technology and delivering record-setting commercial efforts has been invaluable. The last two ventures were successful IPOs.

Family: Wife, Shawn; sons, Davis, 12, and Brady, 2

Favorite quote: “If you think you can or think you can’t, in either case you are right.” – Henry Ford

How did you get involved with Animal Cell Therapies?

Interestingly, I was recruited by a good friend and mentor. There were also strong influences from a key director on the ACT board who I respect. He is a hardworking pioneer who has built many successful companies. It is an excellent fit.

“These three talented professionals add significant experience and capability fueling more pace and quality against our key development milestones,” said Adam Irving, CEO of Animal Cell Therapies. “Our founder, Dr. Kathy Petrucci, and myself are thrilled to welcome Preston, Dr. Lin and Dr. Feng to the team, and know their stem cell experience, knowledge and hard work will benefit investors and customers.”

Munsch brings 14 years of experience to the role, most recently leading Cheetahlink, a consulting firm for the animal health industry. As the founder, he provided expertise in market channel strategies, product development, online marketing initiatives, business development and market position branding for a wide range of clients. Munsch launched his career in the animal health industry in 1998, when he was hired as the national sales manager for the newly formed Specialty Products Division for Loomix, LLC. In that role, he expanded the company beyond their existing market by developing an equine and companion animal nutraceutical line of products.

Dr. Lin (PhD) joins ACT as a stem cell scientist with a track record leading research teams in the biotechnology industry and also brings extensive experience in research and developmental biology. As a research scientist with Stemedica Cell Technologies, Lin developed stem cell validation assays for characterizing stem cell potency and safety, stem cell isolation methods and large–‐scale stem cell production methods. He was also involved with filing an Investigational New Drug (IND) for stem cell therapies. Lin received a PhD from the University of Southern California’s Keck School of Medicine in 2006.

Dr. Feng (MD, PhD) brings to ACT a unique blend of academic and industry experience in translational stem cell and cancer research and development. Feng received his MD in China in 1993, completed his residency training in radiation oncology and earned a PhD in Oncology in 2000. In 2001, sponsored by a fellowship from Harvard Medical School, Feng conducted research at the Center for Biochemical and Biophysical Sciences and Medicine (CBBSM) and the Department of Medicine at Brigham and Women’s Hospital. Before ACT, Feng worked at Nitto Denko Technical Corporation as chief scientist. Feng serves on the editorial board of the World Journal of Stem Cells.
About Animal Cell Therapies, Inc.

Founded in January 2008 in San Diego, California, Animal Cell Therapies (ACT) is the manifestation of veterinarian Dr. Kathryn Petrucci, whose vision is to improve the lives of animals through thoughtful research and development, innovation and strategic partnerships. At the Company’s California–‐based stem cell research and development facility, the ACT team is focused on developing and delivering revolutionary cellular treatment and services to their customers.

When Animal Cell Therapies was created, the company partnered with a select group of researchers, scientists and collaborators from the U.S. and abroad to create an in-house program to grow and expand well-characterized animal stem cells in a scientific setting.  The company’s founder, Dr. Kathryn Petrucci, recognized that in order to provide pure, potent, reliable, pathogen-free animal stem cells, ACT must optimize stem cell storage while improving stem cell transportation procedures and delivery techniques.

“This valuation essentially validates that the foundation we’ve set for this company – in the creation and maintaining of this stem cell inventory – is sound and will support the next steps in our strategy,” said Adam Irving, chief executive officer of Animal Cell Therapies. “Our capabilities are far reaching with broad applications.”

In maintaining its stem cell inventory, Animal Cell Therapies conducts specific cell assays, characterization processes and procedures to assess potential toxicity and consistently assure safety, purity, potency and a stable finished stem cell product or stem cell derivative. In addition, Animal Cell Therapies monitors processes with standardized, rigorous quality control specifications and testing parameters.

About Animal Cell Therapies

Founded in January 2008 in San Diego, California, Animal Cell Therapies (ACT) is the manifestation of veterinarian, Dr. Kathryn Petrucci, whose vision is to improve the lives of animals through thoughtful research and development, innovation and strategic partnerships. At the Company’s California-based stem cell research and development facility, the ACT team is focused on developing and delivering revolutionary cellular treatment and services to their customers.