More discussion of resmed approach

RMS’ research tool arm is focused on developing and marketing RMS’ cell products to pharmaceutical companies, biotech companies, academics and government laboratories. RMS has recently established a partnership with industry leader Merck MilliporeSigma to enhance and expand its market footprint, leveraging their major ecommerce presence, existing relationships and global salesforce. RMS’ plated cells can be used mainly by large pharmaceutical companies to screen candidate therapies for beta cell efficacy, toxicity and drug discovery. Typically, candidate therapies for many diseases fail either due to lack of efficacy or due to undetected toxicity to human cells and tissues. This unfortunate outcome of discovering toxicity only after human trials begin may be avoided if human tissues and cells to test candidate therapies were readily available. Currently, toxicity studies are generally limited to animal models, which are often poor indicators of human toxicity. However, with the recent development of technologies to generate differentiated cells from pluripotent stem cells, specifically in RMS’ case the ProgenMix® product, we are able to develop cell-based testing platforms that enable customers to determine early on whether a candidate therapy is toxic to insulin secreting islet-like cells. RMS’ products address this issue, with an abundant and consistent supply of islet-like cells, which can be easily plated and housed in platforms ready for use in automated screening systems. RMS has optimized usage of its cell products in several formats tailored to major pharmaceutical customers, including standard 12, 24, 96 and 384-well culture plates. RMS has demonstrated that its cell products possess great hardiness and survivability in shipment, providing significant advantages. RMS has successfully shipped products throughout the United States, as well as internationally, including countries in Europe and Asia. 

RMS bases its cell product lines on human induced pluripotent stem cells (iPSC) (those extracted from blood or skin of an adult human), rather than controversial human embryonic stem cells (those derived from embryos), thus avoiding any ethical dilemmas. RMS has received feedback from several companies indicating that they will not utilize embryonic stem cell based products. 

RMS believes that its functional islet-like cells can be priced at a premium and that major pharmaceutical companies would need at least one or two vials per week. This estimate is based on a discussion with a major pharmaceutical company and their current usage of islet cells harvested from cadavers. The pricing of RMS cells compares favorably to cadaver islet cells, which cost around $37,000 per 100,000 islets (Prodo Labs). Additionally, RMS’ cells represent an abundant, reliable, and consistent source of islet-like cells, while cadaver islets are difficult to obtain, are available irregularly and at unpredictable times. Further, these islets are of inconsistent quality due to the unpredictability of the harvesting process and donor variability, whereas, RMS’ cell product is produced under strict quality controls in a lab setting, allowing for batch to batch consistency. 

The top five academic islet distribution centers in the United States have shipped an average of 17 million human cadaver islets per year on average over the past 14 years (with a peak year of 30 million islets shipped) for research, along with Prodo Labs (a commercial supplier) who has approximately 60 customers. In Europe, a five year study involving 13 countries found that there was a demand for 106 million islets in the timeframe and due to lack of supply, only 31 million islets were shipped. Subsequently, we are able to estimate the market size to be in excess of $100 million for research and toxicity testing purposes and is not 

being fulfilled by existing islet sources. The market size was determined through first hand interaction with pharma companies who stated they would require multiple vials of our cells on a per month basis for projects in screening, toxicity, efficacy and other drug discovery/testing projects, as well as in discussions with other biotech companies that market other types of stem cell derived cells (cardiomyocytes, neurons, hepatocytes). 

Through the use of human islet-like cells derived using RMS’ patented process; drugs can be more accurately evaluated for their effectiveness, along with their potential dangers. If a drug company makes an incorrect conclusion based on animal studies or unanticipated post-marketing toxicities are revealed, this can be even more costly to the company from both a financial and public relations perspective. RMS believes that ethically- derived human cells represent the future of drug testing, and would dramatically increase consumer safety and reduce the risk of litigation due to post-sales complications.