Stem cells made a brief splash on the politics pages of US newspapers last summer when the news broke that Texas governor Rick Perry had received an injection of autologous fat-derived “stem cells” as part of a spinal fusion procedure performed by his physician, Stanley Jones, using a technology developed by the notorious Korean company RNL Bio. The timing of this news was curious in that it preceded the announcement of his (now aborted) presidential campaign by less than 10 days. (The procedure itself apparently took place in late June.)



But that wasn’t the only intriguing bit of timing surrounding this unproven stem cell treatment. As Michael Isikoff laid out in a stellar piece of journalism for NBC last September, Perry had signed a bill to authorize the licensing of a state stem cell bank only weeks before undergoing the procedure. Looks like Perry’s tissue transplant wasn’t the only kind of graft (see Def. 2) being undertaken. 


Meanwhile, RNL was busy registering as a foreign corporation in Texas, which it managed to squeeze in just one day before the bill was submitted to the state legislature by Rep. Rick Hardcastle, a multiple sclerosis sufferer who has also received stem cell injections. Conveniently, Stan Jones and David G. Eller, a longtime friend and political backer of Perry’s, had established a company, now called CellTex Therapeutics, intended to launch just such a bank in March… 

Hardcastle, Perry and Jones

Their licensing agreement with RNL covers a whole range of “stem cell” technologies, and paid $30 million (!!) upfront, with provisions for up to a total of $300 million (!!!) in milestone payments, representing 20% of any future stem cell haul, meaning that the unnamed oil and gas industry investors who financed the deal figured the combination of “exclusive rights” + “political backing” + “stem cell hype” = $1.5 billion in revenue, or more.


This is not the first time RNL Bio has sold a regional license to its range of stem cell jabs and potions that have never been shown to work. I blogged in 2010 about its deal with the laughably named Dominican outfit, Regenobody, a venture established by a local hotel, casino and nightclub proprietor, Armando Casciati, himself ostensibly an RNL treatment survivor, who has been in the news for even more disturbing dealings as well….
Dr Regenobody? I don’t think that’s what they mean by “white coat”….
CellTex held its opening hoedown last month, with David Eller, Stanley Jones, and Dr. (meaning veterinarian) Jeong Chan Ra all in attendance. While not facing an investigation by the Korean national prosecutor’s office, Dr. Ra has been busy globe-trotting, opening RNL subsidiaries in Beijing and  Berlin, and a stem cell cosmetics boutique in Manhattan. The suspicious deaths of two RNL patients treated in Japan and China in 2010 have done nothing to hurt the company’s bottom line – the company reported a gross profit of over $18 million for FY2011. Unlike those unlucky patients, the company appears to be in extraordinarily rude health.


Compelling RNL data shows stem cells’ efficacy in boosting revenues, profits



RNL sailed through the initial media storm surrounding those deaths thanks in large part to a cosy “investigation” of the company’s practices led by current ICMS president Michael Freeman (a chiropractor and epidemiologist), and leading bioethicist (and then-ICMS board member) Glenn McGee. Their initial conclusions received widespread media coverage, after being posted relentlessly to free web PR sites and picked up by CNN, which proclaimed that the Korean company had been “cleared.” (What both ICMS and CNN failed to mention was that Dr. Ra was also a member of the ICMS Laboratory Advisory Board at the time the company’s patients died.)

Interestingly, McGee and Ra dropped off the ICMS website soon thereafter, but Freeman, who has been a co-author on nearly every paper (stem cell or otherwise) that ICMS founding president Christopher Centeno has listed on PubMed, remains on the job. And curiously, with Ra gone, the ICMS became “concerned” (shocked, I tell you!) when Ra’s company RNL announced the opening of “the world’s largest stem cell center” in the Yanda International Medical Research Institute in Beijing last November. 

McGee, however, may have a different opinion, as he is now the President of the Ethics Research Division at, wait for it…. CellTex Therapeutics! (For those of you just tuning in, this is in addition to his better-known position at editor in chief of the American Journal of Bioethics, the highest ranked journal in the field.) The Texas-born McGee has also reserved a space at http://bioethics.org for something called the Texas Association for Stem Cell Ethics and Policy. A less than auspicious start…


It’s complicated…

CellTex co-founder Stanley Jones, who injected Perry last year, got his own shot of stem cell juju from an obscure RNL-supplied clinic in Kyoto, Japan. His partner, David G. Eller, a serial oil and biotech executive and former chairman of the board at Texas A&M (where Gov. Perry was once a yell leader) is not the only Eller on the team. His son Erik is now CellTex vice-president, and has also launched a second firm, Anistem (sorry, couldn’t find a website), which apparently plans to market veterinary stem cell treatments. 


The elder Eller is no stranger to bio-industry controversy. He fought and lost an 11-year libel suit over a Forbes article that alleged that the 1991 revenue projections for Eller’s company Granada Biosciences were off by an order of magnitude (cheers to the Texas Supreme Court for keeping a .pdf of the story “The incredible shrinking empire” online). Interestingly, former Texas governor Mark White, who appointed Eller to the Texas A&M Board of Regents, was an attorney for Granada Biosciences at the time. (For the record, I have no reason to believe former governor White is involved in CellTex.) The SEC took much less than 11 years to pursue Eller for alleged violations of securities laws. (He paid $25,000 to settle the charges in 1995, while admitting no wrongdoing). Granada Biosciences’ investors, meanwhile, had to satisfy themselves for an $8.5 million payout on $350 million invested. What does this have to do with stem cells? Well, part of Granada’s business model involved trying to clone cows (this was several years before Dolly). Looks like Eller and Ra have more in common than it would seem – veterinary cloning to stem cell miracle cures, in two easy steps.


So, to recap: Texas backroom politics, cow and puppy cloning, a Dominican don, a bioethicist cashing in, faith-based stem cells, and a mysterious pile of oil money. Is this the “future of medicine” stem cells are heralding in the new Wild West? 


Maybe. Probably. Let’s hope not.

UPDATE: I received a correction from Glenn McGee regarding the review of the patient deaths at RNL Bio, which I blogged about here. He has alerted me that he was not the author of the report I linked to in the original post, but of a separate report on practices at the company, particularly with respect to the banking and processing of cells intended for unregulated clinical use. His comments can be found here. 
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I could not have written this post without the tremendous journalistic work of Michael Isikoff (NBC), William Barrett (Forbes), and many intrepid reporters at the Houston Chronicle.