That line about the Pope was my favorite of the several different ads I saw on this from Rogue Capitalists Daily when I waded into the teaser pits to start my day this morning — there were others, they appear to be testing which headline works best with investors, so I was also enticed by the same ad pitched under the subject line “You, the Next Ground Floor Millionaire?”

Either of which catches your attention quite nicely, I think — do you want the direct appeal to greed, or the odd and attention-getting statement about the Pope? Either way, I read through the presentation so we could get some answers for the Gumshoe faithful today.

The ad is from Sara Nunnally, who along with Sandy Franks has been the core of what is now Contrarian Profits for a few years now (they were called Taipan in the past, then Insiders Strategy Group, other names have drifted in and out at this Agora-affiliated publisher), and she’s got a spiel designed to get us to subscribe to her Tipping Point Prospector, a newsletter that will run you $750. “On sale,” of course.

Her ad is all about a biotech stock, so we’re continuing our medical focus so far this week — appropriate, I think, since we just brought on a new contributor for biotech and medicine topics here at Stock Gumshoe and, well, because the biotech market is everyone’s favorite these days. It might be a bubble, particularly after even the large caps and the big biotech indices came close to doubling in the past year, but there’s always a hot new company that can quadruple based on good results in the clinic … and bubbles are sure fun until they pop.

And what is the stock this time? Well, the short answer is, it’s a stem cell company that’s partnered with the Vatican.

Whaaaat? OK, there really is such a company — but I don’t want to spoil the surprise, let’s see how Nunnally spins her web:

“This could be the market story of the century…

“The Pope’s Discreet Investment

“REVEALED: How a small tech company – backed by the pope – could change the world and hand you 331% gains in the process….

“Few people know the Catholic Church is one of the wealthiest institutions in the world.

“It’s a $170 BILLION annual business.

“The Vatican even has its own bank….

“The Catholic Church invests its money just like big Wall Street institutions do… Not only does it trade bonds and shares of companies, but it owns assets like gold, rare coins and even a real estate company based in Rome….

“But what I’m going to share with you today marks an unprecedented event…

“Historic, in fact.

“That’s because it’s the first investment partnership EVER by the Vatican with this type of small-scale technology company.

“In other words, it’s the ONLY company in this realm that the Vatican endorses exclusively.

“This tiny company has a unique technology with the power to change our lives.”

That $170 billion number, incidentally, is just an estimate of the annual spending by the Catholic Church in the United States, based on an analysis by The Economist … most of it goes to fund hospitals and colleges.

The Church isn’t very forthcoming about its finances, but presumably the global operation is bigger. Not that this makes much difference, we can just stipulate that they’re huge and influential.

Here’s some more from the ad to help us get our juices flowing … and, of course, a few hints to help us identify the company:

“With this company’s blockbuster product, it could capture a major chunk of a market worth $55 BILLION.

Are you getting our free Daily Update
"reveal" emails? If not,
just click here...

“I believe you could conservatively see gains of 331%.

“But if history is any guide, the gains could go higher. Much higher. In fact I’ve seen similar companies at the forefront of emerging tech breakthroughs soar 1,075% in two years… 1,268% in less than a month… and as much as 9,292%.

“And right now, you can scoop up shares of this small company for around $7 a share… a small biotech company.

“With a market cap just shy of $200 million.”

Then we get to the big “reveal” that it’s a stem cell company:

“This tiny company’s technology has the potential to ‘cure’ by rebuilding damaged cells and generating new tissue.

“How exactly can it do this?

“By using the amazing healing power of adult stem cells.

“Now, I know what you’re thinking when you hear the words “stem cells.”

“But that’s EXACTLY what makes this tiny company so revolutionary… and also why it’s endorsed by the Vatican…

“It Doesn’t Use Controversial Human Embryos! ….

“The Vatican is excited about the power of adult stem cells to cure degenerative diseases without the ethical issues of having to kill a fetus to get stem cells.

“It’s excited about this company’s ability to take science and new technology to extend life without being in violation of faith.”

And we learn a little bit more about this secret company … like the fact that it actually has revenues:

“This company also operates a manufacturing unit that provides services for the regenerative medical industry.

“It provides manufacturing, regulatory and marketing expertise for some of the biggest cell therapy companies in the world.

“It was responsible for developing the manufacturing process for Dendreon’s breakthrough prostate cancer vaccine Provenge.

“It’s also worked with pharmaceutical giant Pfizer and more than 100 other clients.

“So not only does this company have its own dynamic cell therapy product development business, but it has a revenue-generating service business…

“… this unit generates steady cash flow for the business to fund its robust stem cell therapy product pipeline.

“It’s got several robust cell therapy products in the pipeline to treat a variety of diseases, including autoimmune disorders such as asthma, multiple sclerosis and Type 1 diabetes.”

And there are a few more clues, including institutional holdings (they’re a few quarters out of date in the teaser, but that’s not unusual — and they do match some older holdings exactly), but I won’t bore you with all of them … not now that we’ve got plenty of fuel for the Mighty, Mighty Thinkolator, which chugged for but a nonce before alerting us that this is Neostem (NBS)

Neostem is not brand new to the pages of Gumshoe, it was touted by Manny Backus back in 2012 at about $4.50 (split adjusted — it’s had three 1:10 share consolidations over the past decade to keep the stock out of penny territory, not that unusual for a long-lived biotech that’s been through several hype and hope cycles). The market cap has risen from $60 million to just over $200 million since that pitch, in June of 2012, but the stock has not quite doubled — that’s because they have, also not uncommon for a biotech, sold a bunch more stock in the interim to keep the lights on and the research going.

You can get a good idea of what they’re trying to become by checking out their Investor Presentation on their website here. That basically tells us that yes, their core focus is on stem cell therapies for heart disease and for diabetes right now, with some initial results from the phase 2 PreServe Acute Myocardial Infarction (AMI) heart “shot” trial expected in the third quarter being the highlighted expectation (that’s their lead drug, AMR-001, they explain the Phase 1 results and current status here). And they say their cash position is enough to fund current operations “into 2015” … which probably means they’re waiting for some (hopefully good) results to help the stock rise later in the year before they have to raise more money.

They have had pretty solid revenues from their contract development and manufacturing division, called Progenitor Cell Therapy, and it lets them post gross profits, but it’s not really growing revenue and the small gross profit inflow is dwarfed by the large operating and R&D costs … so they post losses of between $8-10 million per quarter. They have sold stock every year since 2010, though they’ve also had some substantial transactions over the years to change their balance sheet (they sold a Chinese subsidiary a couple years ago, for example, which let them get rid of debt and preferred stock), and they do seem like they’re in OK shape for the time being as long as the cash “burn rate” doesn’t accelerate with new clinical trials late in the year — so far these look like they’re pretty small trials so the costs may be manageable.

And the headline-generating stuff with the Vatican and the Defense Department is some combination of PR and early-stage grant funding — the Vatican has provided some grant funding, I think, but from what I can tell they’re not equity investors, and the Defense Department or related entities have provided grant funding for battlefield wound research initiatives, the kind of thing they fund at hundreds of small companies. Neither is going to move the needle for Neostem, from what I can tell, they may be able to grow their contract manufacturing business if and when demand increases from these kinds of advanced cell therapies, but real growth will depend on their therapies advancing through clinical trials and bringing on well-heeled partners to push through to approval in the next few years. Which is obviously an area of substantial uncertainty, since all we really have so far is Phase 1 results from their lead candidate.

That’s about all I know about Neostem — they haven’t come up much in discussions or reader questions in the years since I last mentioned the stock, and the search for stem cell therapies has certainly been a long slog, with many companies looking at “repair of heart tissue” as the most obvious place to test their therapies. I also have no sense of Sara Nunnally’s expertise in this area, I’ve covered her pitches before but they’ve generally been for commodities related stocks (mostly silver and LNG in recent years), but it’s certainly possible that she knows the sector better than I do.

So … any renegerative medicine mavens out there want to chime in on the prospects for Neostem? Let the comments fly using the friendly little box below.