written by reader $BSTG – Anyone interested in taking this very interesting company forward?

October 8, 2017

OK, if you’ve followed the threads on Biostage you’re no doubt aware of the recent bull”crap” on financing the company.
I want to tell the Gummimmune community that this is a VERY interesting technology that includes one patient who has survived in a trial-sponsored implant of their trachea for at least 5 months. It’s my understanding he would have been long-dead. Recall there are ALSO about 6+ patients (most in Europe) who, using an older version of this technology (and a highly controversial Italian surgeon) are still alive today (I think one patient died who was near death before the transplant and not related to the transplant).

With all of the bull shit around Pecos and Goldblatt, Biostage has run out of money. I think Dr. KSS might agree that the science was strong. They simply lacked the financial resources to get to the end point. I believe they currently need about $15M to $20M (million) to complete the current FDA PH 2 study. As I said, the one patient enrolled in the study is STILL ALIVE.

Full disclosure, I know this team personally and have helped recruit several key people to the team at the HIGHEST LEVELS for Biostage (and it’s predecessor, Harvard Apparatus Regenerative Technology). I’ve personally known the CEO (Jim mcgorry) since 1975 and can tell you he is morally and ethically 100% sound. I would give him my last shirt/dollar if he asked (I’m happy to explain this if needed). Bottom line, I have literally trusted McGorry with my life in years past. This is a company we could, as a group, think about funding, especially if Dr. KSS and Cleveland agree the tech is sound. I believe this could be the first regenerative technology play to get a product (trachea) through to approval. Note, I also recruited Tengion’s ENTIRE senior management team and, had they not squandered about $140 million stupidly building a manufacturing plant, they might have had the first regenerated autologous-organ (bladder) the FDA approved (google Tony Atala M.D., former Harvard and now at UNC who’s technology was behind our efforts at Tengion where I owned a lot of founding stock). I also did work at Histogenics and a few other regentech co’s. Sadly, the path through to approval, dependant on the combined branch at the FDA has struggled to develop a process, which cost these pioneering companies too much for them to succeed. While funding remains a challenge for Biostage, at least they have an ongoing clinical trial and initial path forward.

IF we could fund Biostage and IF they can create and succeed in a path forward, this could be a SIGNIFICANT investment with a HUGE MULTIPLE. Of course, it could be a zero.

One added thought is that the company needs to be private. Public status at this stage is ridiculous. I’ve been telling McGorry that since before recruiting him there.

Next step is to find a chief medical officer If Saverio won’t return. I am uncertain whether Saverio LaFrancesca and McGorry are the right combo going forward. Saverio probably has the right background but may have burned too many bridges. With solid funding, we can recruit the right chief medical officer.

I’d welcome everyone’s reactions.

Wanting to remain in the background (for now), my brief self-description is 20+ years as a high level recruiter with several of the world’s top executive search firms (Spencer Stuart, Heidrick & Struggles, Russell Reynolds). I led the global recruiting practices for 2 of these firms, was second in-command for a third and started and ran two of my own boutiques. I’ve done about 700 searches – all in biotech and medtech. I don’t know everyone, but humbly can say my life sciences network is solid. For example, Dr. KSS knows Bill Rice at Aptose – as do I, all the way back to Bill’s first company. Beyond that, I’ve known a good percentage of management at companies Dr. KSS has recommend.

Anyone have any thoughts?

kb

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Cleveland
Irregular
October 10, 2017 5:33 am

$BSTG Wow what a tangled mess now. As you know the CFO chose to go the Biostage route and has the largest stock position. To me a great person.

It is a tangled mess because of the legal agreements with Goldblatt.

Why o why did they not sell out when they said they were gong to????

Goldblatt said he would purchase all the rights not exercised !!!

So very sad. When you get in bet with a shark you sometimes get eaten alive !!

Your vantage point is unique !! I have asked before who are the best CEO”S??

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analog68
Irregular
analog68
October 10, 2017 6:23 am
Reply to  Cleveland

Thanks for the input Cleveland! Keep it up, please!

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Bren
Irregular
Bren
October 10, 2017 9:36 am

Yes, this was in my head too.

I’ll bet there are others thinking the same way. So I don’t have huge spare resources, but would definitely put in a FP into this. Not impossible to get this going I’d say. Maybe not VERY likely, but not impossible…

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arbrnrngr
Irregular
October 10, 2017 10:17 pm

$BSTG
Cleveland, I thought I replied re: the best bio CEOs – too complicated for a brief post but happy to initiate a discussion topic on this if there is support for that topic (I promise I would be brief). I made a few comments at the end of this.

To be clear, I have several thousand shares of $BSTG (Biostage) stock – not enough to be a huge investor – I invested because I too am a believer. IT ABSOLUTELY WORKS. I was also a believer in Tengion and Histogenics – two companies I also invested in and owned over 1/2% of the common…

Back to Biostage, and apologies if I’m repeating old news, but:
1. pretty certain there was never an actual deal to sell out that made sense
2. In addition to the current FDA trial authorized implant, I think at least 6 prior patients SUCCESSFULLY received an earlier (less advanced) version of their trachea. Further, those trachea’s were (I am pretty sure) based on a cadaver scaffold. Using donor’s have issues (lack of control over supply) so $BSTG wanted to use an autologous scaffold, which the current system uses. It works – which is why CMO Saverio made that big investment recently.
3. Goldblatt is a shady character and was the reason Saverio made that big purchase – assuming Goldblatt was coming in. (Hint: What’s the definition of the word “Assume”?)
4. The trachea alone is roughly a $500million revenue product is approved.

Yes, Tom (CFO) has a lot invested (too much I’ll suggest) BUT there is a story there I’d rather not get into. Let me suggest just ‘cuz you own stock doesn’t mean you’re the right man for the job…

Am close to CEO and board if the “Gummunity” wanted to make an approach. While not peanuts, to get this over the next goal line is probably $16-20 million. Not bad considering you have a $500million dollar product with probably a $2-6 BILLION market cap. That seems to make sense to me. And this technology is applicable to other organs, so that $6 bn could be much more.

The goal line for BSTG isn’t a full blown Ph3 but I’m confident it gets BSTG to a major inflection point, and possibly all they need to an approval.

LMK if anyone wants my 10 pence on what makes a great CEO. Spoiler alert – it’s about 90% luck and not many are lucky sequentially… Sure, great talent can make a great difference, but how many great teams succeed with ‘dog’ drug candidates?

Kevin Tang has done “it”several times but even Kevin can’t make pigs fly – look at Heron. Adrian Adams did it a few times (KOS and Sunovion) but I wouldn’t be buying Aralez any time soon and he’s had several misses in meantime (having helped build KOS’s team, they got lucky)… It’s not hard for a half decent team to take a great molecule over the goal line. Patrick Soon-Shiong, M.D. has his billions from Abraxis but nothing much yet on Nant. Phil Frost did Key and Ivax but he’s not done much since either. Does anyone think Zuckerberg actually knew what he was creating? Bezos maybe, Zuckerberg unlikely. I can go on…

I’d probably put 90% of my money on luck over skill every time. Apologies to anyone I’ve offended.

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Walsh
Walsh
October 10, 2017 10:53 pm