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May 28, 2013 ![](\"/Blog/2014/Seeking-Alpha-title.jpg\")
- RepliCel is a rare blend of upside potential and risk mitigation.
- The company has a multiple-product approach.
- Near-term catalysts should make the stock pop.
While it is rare to find companies that offer a truly disproportionate positive risk-return profile, RepliCel Life Sciences (OTCQB:REPCF, RP.V) is positioned to have significant upside that is well-justified by the associated risks. The opportunity exists largely because the company is small and essentially unknown – its small size and low daily trading volume represent the most serious risk factors for investors to consider. As the company stands on the cusp of several catalytic events, however, RepliCel is positioned for a meaningful move that will benefit investors.
Who is RepliCel?
RepliCel is in the business of “treating cellular deficiencies” through its proprietary cell reproduction technology, specifically cases of tendonitis, pattern baldness and skin damage. Beyond the technology the company has developed to rapidly reproduce cells for its various treatment protocols, it has developed a delivery injector with addition potential applications. I recently had the opportunity to participate in a meeting directly with company president and CEO David Hall, who emphasized the importance of the diversified product portfolio that his company offers. Because RepliCel is diversified across the fibroblast (collagen-producing), dermal sheath cup (hair producing) and injector lines of business, Hall sees investor risk to be reduced as different lines move ahead.
![](\"/Blog/2014/4311741-14114038831831753-Douglas-Ehrman.png\")
Source: RepliCel Corporate Presentation August 2013
The general basis of RepliCel’s products is that the company harvest specific cells from the patient, and then uses its proprietary technology to replicate them in sufficient numbers to address the specific deficit. In the case of the tendonitis treatments, this involves creating new collagen cells that allow the damaged area to see improved function and reduced pain by altering the tendon’s basic construction. In the case of baldness treatment, healthy dermal sheath cells allow hair to grow in the needed areas. In both cases, the company’s injector is used to properly introduce the cells into the affected region. RepliCel’s method allows it to produce these cells much faster than competitors.
In early clinical testing, patient safety has been a top concern. In all Phase 1 trials thus far conducted, results were achieved within the required safety parameters. RepliCel is not involved in tradition stem cell therapies, making it less clinically and commercially risky. Part of what makes RepliCel unique, and particularly attractive from an investment standpoint, is that because the company is not using adult stem cells in its protocols, the regulatory burden falls on the low-end of the spectrum. The primary thrust of RepliCel’s treatments are in cosmetic and non-critical areas. While these do not tend to be of huge medical significance – although they can be – the revenue generating potential is there. This is one of the hallmarks of its current mandate to prove up its products to attract a buyer.
The fibroblast protocols have had statistically significant early results in treating various types of tendonitis (See below). In the Phase 1 trial, cell growth increases while pain decreased. Similar tests and Phase 2 testing are moving ahead for tendonitis in the elbow as well. This same technology is moving to Phase 1 trials for treating skin damaged by aging, UV exposure and lifestyle factors. Ultimately, each of these conditions alone represent a significant advance against currently available options, and are in sizeable markets.
![](\"/Blog/2014/4311741-14114039028626666-Douglas-Ehrman_origin.png\")
Source: RepliCel Corporate Presentation August 2013
Improved Baldness Treatment
In terms of the company’s baldness treatment, Phase 1 showed positive results in less time than the currently available options. While micro-transplant surgery is the current gold standard – it is expensive and highly dependent on the surgeon – Rogaine and Propecia are the most commonly used options currently. Rogaine has shown 8%-16% density increases over 12 months with topical treatment, and Propecia has shown 7%-14% increases over 12 months with an oral regimen. The Phase 1 RepliCel treatment showed an average 11.3% density gain, with 70% achieving over a 10% gain, with the over 10% group averaging 14.3%. The most significant difference with the RepliCel protocol is the end point. Where Rogaine and Propecia require continued use to maintain gains, after the RepliCel injections, gains remain in place. This is a significant point of differentiation.
Catalysts
A highlight for RepliCel from the investment prospective is that the management team is keenly focused on building shareholder value. Hall is targeting and projecting a takeout scenario within 24 months, with major catalysts building value on that path. The biggest driving factor there is new results from the ongoing clinical trials. As each sets a small step-up for the company in terms of the development of a fully saleable product, share price should be significantly impacted.
Along this path, RepliCel already has a key partnership in place with Shiseido, the fourth-largest cosmetics company in the world. The agreement, inked in 2013, provided RepliCel with $35 million, with $4 million upfront and additional fundings at key sales targets. Beyond the capital, Shiseido has built a new cell processing facility that opened in May 2014. The company represents a key strategic partner in terms of both financial strength and reputation. Additionally, this allegiance will allow RepliCel to move quickly in the region as trials for U.S. sales continue. RepliCel continues to seek new partners for other products, each of which, when identified, can serve as a catalyst.
In the near term, there are three different clinical trials beginning in 2014 that should yield the type of data results needed to see the stock move dramatically higher. For example, the planned Phase 2 study on pattern baldness will use a larger test group to establish the lasting efficacy of the treatment, confirming both the safety and effective end date relative to other options. As each of these steps move ahead, RepliCel is well-positioned to move. Hall reports that the company has plenty of cash to complete the clinical trials that are currently planned. He believes that the positive results expected from these will be sufficient to generate the buying interest needed, placing a takeout target within the next 24 months.
The Stock
A definite risk factor of the stock is the very low average trading volume (ADV) of shares. Between shares listed in the U.S. and on the Canadian Venture Exchange, the stock trades less than 100,000 shares per day. This means that the liquidity of any position must be a consideration for any investor making a larger play in the stock. On the other side of things, however, shares are near the bottom of the 52-week trading range. This means that a retracement of even 50% back to that high would represent a dramatic return.
![](\"/Blog/2014/4311741-1411403930670178-Douglas-Ehrman.png\")
Given the price of shares relative to the potential upside, I believe RepliCel offer an attractive risk-adjusted opportunity to shareholders. There are several catalysts tied to near-term expected milestones that should make the stock move higher. If management can achieve its ultimate goal of a takeout opportunity, shareholders will be well-rewarded. The liquidity risk is real, but the potential here justifies taking some risk.
Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
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life-scineces-report
Read below for an excerpt from Street Wise Reports on Alan Leong’s comments about RepliCel:
TLSR: You mentioned RepliCel in regenerative medicine. Tell me your growth theory for this company.
AL: RepliCel came onto our radar when we were at the Biotech Showcase and JP Morgan Healthcare Conference back in January. The company is very early in development and caught our eye for a couple of reasons.
One, the cells are derived from cells in the hair follicle. Two, the company is competing in less crowded niches—baldness or alopecia, and tendinosis. It’s very interesting that these hair follicle-derived cells appear to have advantageous properties when applied to healing tennis elbow, Achilles tendinosis and similar complaints. The early results are interesting and positive.
“The day is coming in which we will be able to pick a very specific niche or cluster and provide very effective treatments for more defined diseases.”
RepliCel is going to launch two Phase 2 trials this year. For those thinking of investing, the company is in a low-cash position, and is risky. RepliCel behaves like a private company in a lot of ways, because it is raising money to fund some of the next trials. One of the scientists involved with the technology, Kevin McElwee from the University of British Columbia, has an excellent reputation, not just among scientists but also among clinicians who are into hair restoration. Usually, companies joining the regenerative medicine space target major organs and systems. RepliCel, on the other hand, is going after niche indications that give it a much clearer playing field. There was one direct cell therapy competitor, the Aderans Research Institute, out there in the baldness space, but it abandoned the field a few months ago.
TLSR: RepliCel’s technology is autologous. The cells are harvested from the back of the patient’s scalp, and are expanded and processed ex vivo. The harvest and readministration of these cells by injection for alopecia, given that it is a two-step procedure, is about even in clinical complexity to hair plug therapy. Will this therapy for baldness be superior to hair plug therapy, which we know can be painful for the patient?
AL: All things being otherwise equal, patients will be more sold on RepliCel’s therapy than on the hair transplant procedure. With a hair transplant, the physician typically has to implant thousands of units from one part of the head to another. That requires incredible dexterity and takes several hours. In fact, that is why robotics are getting involved—the physician endures incredible repetitive strain. In addition, physicians are digging out not just follicles but a little bit of muscle, too, and placing that into the patient.
Another thing that makes RepliCel’s therapy attractive is that, if you look at surveys or talk to people who are losing hair, the concept of having these injections is very palatable. This possibly could expand the market. Finally, if you look at surveys, the percentage of men who say they would give up a significant portion of their wealth to have their hair restored is astounding.
TLSR: Back on May 20, the company said its licensing partner, Shiseido Company Ltd., was opening a new cell processing facility at the Kobe Biomedical Innovation Cluster in Japan. Does it make sense to process and expand those cells so far away?
AL: Shiseido, a major cosmetics company, is licensing RepliCel’s hair regeneration technology in the largest parts of Asia. It has more than $7B in revenue. In Japan, companies that get involved in pharmaceuticals aren’t like the ones here. For instance, you have major pharmaceutical companies that also make beer, and cosmetic companies doing major research. Shiseido’s new facility is not just a tiny laboratory. It represents a major cell therapy investment. Shiseido’s investment into the collaboration is a form of validation for RepliCel.
TLSR: In mid-June, RepliCel announced it had closed on the third and final tranche of a nonbrokered capital raising that it originally announced at the end of March. Each unit sold for $0.75, and that includes one warrant that could be exercised for $1/share in the first year and $1.25 in year two. The total of these tranches was only about $3.9M, which is not a lot of money. How much dilution are RepliCel investors in for in the future?
AL: It’s a good question, because the dilution could be serious. RepliCel is trying to raise cash in fits and gulps to get it through the next set of trials and raise the company’s valuation. I think that’s part of the rationale behind why the Phase 2 trials are confined in terms of geography. The company wants to put out strong proof of concept and raise the valuation while still making progress on the commercial side. There’s no doubt about it: There’s a balancing act going on here. RepliCel is also trying to raise money through unconventional sources, including governmental sources of funding. We shall see.
TLSR: Alan, I have read that 11 of 12 patients in the Phase 1 Achilles tendinosis trial had what the company calls “satisfactory outcomes,” but those were with adipose-derived cells and not with cells derived from the patient’s hair follicles, which will be used in Phase 2.
AL: That’s correct. The tendinosis indication has had the Phase 1 proof-of-concept study performed, but the Phase 2 study will incorporate some tweaks to the procedure.
TLSR: Is the lead indication at RepliCel Achilles tendinosis or alopecia?
AL: If you asked the company’s CEO, David Hall, I think he would say he’s looking at both of them. Right now, you would have to pick alopecia as positioned to be RepliCel’s lead indication, because a) it has the Phase 2 data, and b) it has the alliance with Shiseido, which also will be advancing work in its labs back in Japan.
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“Shiseido has been working diligently on the construction of their facility and we congratulate them on their efficiency and commitment to building a world-class cell research and development centre capable of handling all aspects of the RCH-01 technology from hair follicle biopsy through to cell replication and patient treatment,” commented David M. Hall, CEO of RepliCel Life Sciences. “We continue to support Shiseido with its highly focused development towards commercialization of RCH-01 as a treatment for pattern baldness.”
The KBIC is a complex of medical-related industries located on the 833-hectare man-made island of Port Island in Kobe, Japan. Working in cooperation with academic research institutions, government organisations, and industry, the island has been developed as a focal point for research and development of highly advanced medical technologies with the goal of streamlining processes from research to clinical application and commercialization.
Regenerative medicine in Japan is an emerging industry which the government has designated as an important part of its economic reform. Legislative support has come from the introduction of new laws to expedite otherwise lengthy clinical research and trial application processes to promote competitive advantage in the international market. In November 2013, as one of the new economic reform strategies, the Japanese government passed the Regenerative Medicine Law, which ensures safety of regenerative medicine, and approved revisions to its existing Pharmaceutical Affairs Law to improve the timelines for the development of regenerative medicine and to promote commercialization. Shiseido has entered into this field via its licensing agreement with RepliCel and is committed to its advancement and success.
Licensing Agreement
On July 11, 2013, RepliCel and Shiseido announced the completion of a Collaboration and Technology Transfer Agreement, giving Shiseido an exclusive geographic license to use RCH-01 hair regeneration technology in Japan, China, South Korea, Taiwan and the ASEAN countries Shiseido and RepliCel will collaborate on the continued improvement of the technology and will conduct human clinical trials in each of their territories with the goal of commercializing a safe and effective hair regenerative treatment to help those suffering from pattern baldness and thinning hair.
RCH-01 has been developed over 10 years of scientific research, and safe application in humans was validated during RepliCel’s phase 1 clinical trial. RepliCel has patents issued for hair follicle mesenchymal stem cells and their usage in Japan, the United States, Australia and the EU. RCH-01 is an autologous cell-based hair regenerative technology whereby specific hair follicle cells are isolated from a scalp biopsy, expanded in culture at a cell processing facility and injected back into patients.
About the Kobe Biomedical Innovation Cluster and Shiseido’s Facility
More than 260 domestic and international companies have built R&D facilities focusing on regenerative medicine, pharmaceuticals, medical equipment and devices in the research park, taking advantage of the opportunities for collaboration and synergy that the KBIC fosters. Centralised support services facilitate clinical research, commercialisation, consultations on pharmaceutical development issues and financing, and the establishment of comprehensive platforms for biomedical research and development. The Business Support Centre for Biomedical Research Activities has been built to support and to provide space for research and commercialization of regenerative medicine. This facility is divided into two sections, research and cell-processing. Shiseido’s Cell-Processing and Expansion Centre (SPEC) is located in the cell processing section, Room 620, 1-5-5 Minamimachi, Minatojima, Chuoku, Kobe, 650-0047, Japan.
About RepliCel Life Sciences
RepliCel is a regenerative medicine company focused on developing autologous cell therapies that treat functional cellular deficits including chronic tendinosis, pattern baldness and skin aging. Initiation of Phase 2 trials are planned for 2014 on RepliCel’s RCT-01 treatment for Achilles tendinosis and RCH-01 treatment for pattern baldness. Shiseido Company, Limited has an exclusive geographic license for RCH-01 in certain Asian countries including Japan, China and South Korea. Both product candidates are based on RepliCel’s innovative technology which utilizes cells isolated from a patient’s own healthy hair follicles to address specific cellular deficits. These products are built on the company’s proprietary manufacturing platforms. For additional information please visit www.replicel.com.
CORPORATE CONTACTS:
David M. Hall, Chief Executive Officer
Tammey George, Director of Communications
RepliCel Life Sciences
604-248-8696
tg@replicel.com
INVESTOR CONTACT:
Westwicke Partners, LLC
Robert H. Uhl
Managing Director
858-356-5932
robert.uhl@westwicke.com
Neither the TSX Venture Exchange Inc. nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this press release.
This press release contains forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of RepliCel, such as the statement that RepliCel is seeking additional financing. There are numerous risks and uncertainties that could cause actual results and RepliCel’s plans and objectives to differ materially from those expressed in the forward-looking information, including: (i) adverse market conditions; (ii) the inability of RepliCel to complete the private placement at all or on the terms announced; or (iii) the TSX Venture Exchange not approving further private placements. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, RepliCel does not intend to update these forward-looking statements.
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This patent approval is an important milestone as RepliCel’s licensing partner, Shiseido Company, prepares to conduct human clinical trials using RCH-01. Shiseido has an exclusive license to use RCH-01 in Japan, China, South Korea, Taiwan and the ASEAN countries representing a population of approximately 2.1 billion people. According to the International Society of Hair Restoration (ISHR), the leading authority on hair loss treatment and restoration, almost one million patients sought treatment for hair loss in 2012. Of this number, 41% of the patients were from Asia, representing the largest single region, surpassing the United States by 15%.
David Hall, CEO of RepliCel stated, “The allowance of our first patent in Japan is significant as it protects RepliCel’s licensing partner, Shiseido Company, as they move forward with their clinical trial program in Japan. In addition, recently adopted legislation in Japan governing regenerative medicine underlines the country’s commitment to accelerate R&D and clinical pathways which could be beneficial to our Japanese partner.”
About RepliCel Life Sciences
RepliCel is a clinical stage biopharmaceutical company focused on developing autologous cell therapies that treat functional cellular deficits. RepliCel Tendon-01 (RCT-01) is a cell therapy for the treatment of chronic tendon injuries. RepliCel Hair-01 (RCH-01) is a cellular treatment for androgenetic alopecia (pattern baldness). Shiseido Company, Limited has an exclusive geographic license for RCH-01 in certain Asian countries including Japan, China and South Korea. Both product candidates are based on RepliCel’s innovative technology which utilizes cells isolated from a patient’s own healthy hair follicles to address specific cellular deficits. For additional information please visit www.replicel.com.
About Shiseido Company, Limited
Shiseido was established in 1872 as Japan’s first Western-style pharmacy. Since then, the company has led the cosmetic technology and culture in Japan over more than 100 years. The company now aspires to become a “global player to represent Asia with origins in Japan” and operate businesses all over the world, including Europe, the U.S. and Asia. Its representative global brand, “SHISEIDO” is now sold in 89 countries and regions as of April 2013.
CORPORATE CONTACT:
Tammey George
Director of Communications
RepliCel Life Sciences Inc.
604-248-8696
tg@replicel.com
INVESTOR CONTACTS:
Westwicke Partners, LLC
Stefan Loren, Ph.D.
Managing Director
(443) 213-0507
sloren@westwicke.com
Robert H. Uhl
Managing Director
(858) 356-5932
robert.uhl@westwicke.com
Notice Regarding Forward Looking Statements
This press release contains projections and forward-looking statements, as that term is defined under applicable securities laws. Statements in this press release, which are not purely historical, are forward-looking statements and include the following: (i) that the Company will conduct further human clinical trials; (ii) that ongoing research collaboration will be conducted by the Company and Shiseido for the continued improvement of the technology; (iii) that a commercial, safe and effective hair regenerative treatment will be developed and commercialized; (iv) that the Company and Shiseido will develop further improvements to the technology; (v) that the Company will undertake and enter into development and collaboration agreements for the development of its technologies; and (vi) and that the Company’s technology will rejuvenate damaged hair follicles leading to the growth of new healthy hair fibers. These statements are only predictions and involve known and unknown risks which may cause actual results and the Company’s plans and objectives to differ materially from those expressed in the forward-looking information, including: that negative results from the Company’s clinical trials may impact further clinical trials, development, approval and commercialization of the technology; the effects of government regulation on the Company’s business, including the future development of the technology; risks associated with the Company’s ability to obtain and protect rights to its intellectual property; risks and uncertainties associated with the Company’s ability to raise additional capital; that the Company may not be able to find other parties will to participate in the development and collaboration of its technologies, and other factors beyond the Company’s control. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity or performance. Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of such factors on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. Readers should consult all of the information set forth herein and should also refer to the risk factor disclosure outlined in the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2012 and other periodic reports filed from time-to-time with the Securities and Exchange Commission on Edgar at www.sec.gov and with the British Columbia Securities Commission on SEDAR at www.sedar.com.
VANCOUVER, BC – December 19, 2013 – RepliCel Life Sciences Inc. (OTCQB: REPCF) (CNSX: RP) today reported on the progress of its technology transfer agreement with its partner, Shiseido Company, Limited.
Recently, a group from Shiseido met with RepliCel management and advisors in Vancouver, BC to continue the technology transfer between the two companies as outlined in the July 9, 2013 licensing agreement. The Shiseido team spent three weeks in the lab with RepliCel’s Chief Scientific Officer, Dr. Kevin McElwee and Director, Research and Development, Dr. Hisae Nakamura learning techniques of specific hair follicle cell isolation and replication methods for RCH-01. Furthermore, RepliCel’s Vice-President of Clinical Affairs, Darrell Panich reviewed progress to date in the clinical development program of RCH-01 and discussed the plans for future development in the companies’ respective regions.
During this past quarter, Dr. Nakamura and representatives from the Shiseido team visited RepliCel’s contract Good Manufacturing Practice compliant facility in Innsbruck, Austria. It was during this visit that the transfer of RCH-01 manufacturing technology between the two companies and its contract manufacturer was initiated.
“These meetings have done much to foster the collaborative relationship between RepliCel and Shiseido and both companies are committed to working very closely on the successful development of RCH-01,” said Chief Scientific Officer, Dr. Kevin McElwee. “Both teams will continue in-depth research and development in the laboratory and clinical trials with the goal of commercializing a safe and effective hair regenerative treatment to help those suffering from pattern baldness and thinning hair.” In this regard, RepliCel expects to initiate a Phase 2 clinical trial for RCH-01 in the EU in the first half of 2014. In addition, both companies will work towards establishing a clinical research program in Asia with the goal of increasing the available human clinical data on RCH-01. Collaborative technology transfer will continue between the companies as any new improvements to the RCH-01 technology are developed by either party.
As per the agreement, Shiseido will have an exclusive geographic license to use RepliCel’s RCH-01 hair regeneration technology in Japan, China, South Korea, Taiwan and the ASEAN countries representing a population of approximately 2.1 billion people.
New Regenerative Medicine Legislation Passed in Japan
On November 20, 2013 the Japanese Legislature approved new legislation targeted at improving the development and regulatory processes for regenerative medicine therapies. The Regenerative Medicine Law directs the Ministry of Health, Labour and Welfare to adopt new procedures and rules that will accelerate the clinical development of regenerative medicine and cell therapies. The Japanese Pharmaceutical Affairs Law will now become the Pharmaceuticals and Medical Devices Act that will include a new branch specifically for Regenerative Medicine Products, which will be regulated on a fast track process that focuses primarily on product safety. Under the law, the government is responsible for mapping out and implementing measures to safely accelerate research and development projects and make regenerative medicine widely available in the country. The law specifically stipulates that the government must make basic plans for the promotion of regenerative medicine and change such plans if necessary by reviewing them at least every three years in light of any changes in external conditions that may occur. This news positively impacts RepliCel and its licensing partner, Shiseido, as it looks to conduct human clinical trials on RCH-01.
About RepliCel Life Sciences
RepliCel is a clinical stage biopharmaceutical company focused on developing autologous cell therapies. RepliCel Tendon-01 (RCT-01) is a cell therapy for the treatment of chronic tendon injuries. RepliCel Hair-01 (RCH-01) is a cellular treatment for androgenetic alopecia (pattern baldness). Shiseido Company, Limited has an exclusive geographic license for RCH-01 in certain Asian countries including Japan, China and South Korea. Both product candidates are based on RepliCel’s innovative technology which utilizes cells isolated from a patient’s own healthy hair follicles to address specific cellular deficits. For additional information please visit www.replicel.com.
About Shiseido Company, Limited
Shiseido was established in 1872 as Japan’s first Western-style pharmacy. Since then, the company has led the cosmetic technology and culture in Japan over more than 100 years. The company now aspires to become a “global player to represent Asia with origins in Japan” and operate businesses all over the world, including Europe, the U.S. and Asia. Its representative global brand, “SHISEIDO” is now sold in 89 countries and regions as of April 2013.
CORPORATE CONTACT:
Tammey George, Director of Communications
RepliCel Life Sciences<
604-248-8696
tg@replicel.com
INVESTOR CONTACTS:
Westwicke Partners, LLC
Stefan Loren, Ph.D., Managing Director
(443) 213-0507
sloren@westwicke.com
Robert H. Uhl, Managing Director
(858) 356-5932
robert.uhl@westwicke.com
Notice Regarding Forward Looking Statements
This press release contains projections and forward-looking statements, as that term is defined under applicable securities laws. Statements in this press release, which are not purely historical, are forward-looking statements and include the following: (i) that the Company will conduct further human clinical trials; (ii) that ongoing research collaboration will be conducted by the Company and Shiseido for the continued improvement of the technology; (iii) that a commercial, safe and effective hair regenerative treatment will be developed and commercialized; (iv) that the Company and Shiseido will develop further improvements to the technology; (v) that the Company will undertake and enter into development and collaboration agreements for the development of its technologies; and (vi) and that the Company’s technology will rejuvenate damaged hair follicles leading to the growth of new healthy hair fibers. These statements are only predictions and involve known and unknown risks which may cause actual results and the Company’s plans and objectives to differ materially from those expressed in the forward-looking information, including: that negative results from the Company’s clinical trials may impact further clinical trials, development, approval and commercialization of the technology; the effects of government regulation on the Company’s business, including the future development of the technology; risks associated with the Company’s ability to obtain and protect rights to its intellectual property; risks and uncertainties associated with the Company’s ability to raise additional capital; that the Company may not be able to find other parties will to participate in the development and collaboration of its technologies, and other factors beyond the Company’s control. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity or performance. Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of such factors on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. Readers should consult all of the information set forth herein and should also refer to the risk factor disclosure outlined in the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2012 and other periodic reports filed from time-to-time with the Securities and Exchange Commission on Edgar at www.sec.gov and with the British Columbia Securities Commission on SEDAR at www.sedar.com.
VANCOUVER, BC – July 11, 2013 – RepliCel Life Sciences Inc. (the “Company” or “RepliCel”) (OTCBB: REPCF) (CNSX:RP) is pleased to report that it has completed the previously announced Collaboration and Technology Development Transfer Agreement (the “Agreement”) with Shiseido Company, Limited (“Shiseido”). A joint steering committee will now be formed to oversee the transfer of the technology, knowhow and standard operating procedures. As defined by the Agreement, Shiseido will pay RepliCel an upfront fee of ¥400,000,000 (approx. CDN $4,200,000). In addition, Shiseido will pay RepliCel sales milestones amounts of up to ¥3,000,000,000 (approx. CDN $31,500,000) and royalties.
The Agreement gives Shiseido an exclusive geographic license to use RepliCel’s RCH-01 hair regeneration technology in Japan, China, South Korea, Taiwan and the ASEAN countries representing a population of approximately 2.1 billion people. Shiseido and RepliCel will collaborate on the continued improvement of the technology and will conduct human clinical trials in each of their territories with the goal of commercializing a safe and effective hair regenerative treatment to help those suffering from pattern baldness and thinning hair.
David Hall, CEO of RepliCel commented, “This agreement gives RepliCel’s RCH-01 hair regeneration technology important third-party validation from one of the most respected cosmetic companies in the world. In addition, the Japanese government has recently committed to establish a new approval process for regenerative medicine products focused on accelerating approval timelines. This changing regulatory environment enhances the strategic nature of our collaboration with Shiseido. In parallel with RepliCel’s planned Phase II trial in Europe, the Shiseido license represents a second clinical pathway for the development of our RCH-01 technology.”
“We look forward to working with Shiseido with its deep expertise in hair research. We anticipate that our collaborative efforts will support the continued improvement of our technology,” stated Dr. Rolf Hoffmann, Chief Medical Officer of RepliCel. “This license represents the first of many development and collaboration agreements we intend to undertake around our broader platform of addressing cellular deficits in diseases such as pattern baldness and tendinosis,” concluded Dr. Hoffmann.
Asia’s Hair Loss Market
With the increasing awareness of baldness as a medical condition that can be treated; the demand for hair loss treatments has sharply risen; especially in the Asian market. For example, a study by the Peking University People’s Hospital published in the British Journal of Dermatology in 2010 found that 21 percent of adult males and six percent of females in China suffer from hormone-driven hair loss. Furthermore, the International Society of Hair Restoration Surgery’s (ISHRS) biennial survey of hair restoration physicians found that the number of hair restoration patients in Asia grew 345% from 2004 to 2010. Shiseido has also conducted research on hair and scalp concerns. Their survey of women living in Tokyo, Shanghai, Chengdu and Bangkok found that women aged 40+ commented that their hair was thinning.
RCH-01 Procedure
RCH-01 is a patented cellular replication and implantation technology designed to rejuvenate damaged and miniaturized hair follicles in balding scalp. This technology has been developed over ten years of research, experimentation and clinical trials. The mechanics of this technology involve the extraction of as few as 20 hair follicles from the back of a patient’s scalp where healthy cycling hair follicles reside. Specific cells are isolated from hair follicles and are cultured in a current Good Manufacturing Practice compliant facility using the Company’s proprietary cellular replication process. The cultured cells are reintroduced back into balding areas on a patient’s scalp and are expected to rejuvenate damaged hair follicles leading to the growth of new healthy hair fibers.
About RepliCel Life Sciences
The Company is developing two autologous cell therapies; the first being a cellular treatment for androgenetic alopecia (pattern baldness); RCH-01; and the other being a cell therapy for the treatment of chronic tendon injuries (RCT-01). Both products are based on RepliCel’s innovative technology which utilizes cells isolated from a patient’s own healthy hair follicles to address specific cellular deficits. Each program is in the regulatory process of preparing for Phase II clinical trials. RepliCel’s business model is to develop and license its technologies to fully integrated life science companies.
About Shiseido Company, Limited
Shiseido was established in 1872 as Japan’s first Western-style pharmacy. Since then, the company has led the cosmetic technology and culture in Japan over more than 100 years. The company now aspires to become a “global player to represent Asia with origins in Japan” and operate businesses all over the world, including Europe, the U.S. and Asia. Its representative global brand, “SHISEIDO” is now sold in 89 countries and regions as of April 2013.
For more information please contact:
RepliCel Life Sciences Inc.
Tammey George, Director of Communications
Tel: 604-248-8696
tg@replicel.com
www.replicel.com
Notice Regarding Forward Looking Statements
This press release contains projections and forward-looking statements, as that term is defined under applicable securities laws. Statements in this press release, which are not purely historical, are forward-looking statements and include the following: (i) that the Company will conduct further human clinical trials; (ii) that ongoing research collaboration will be conducted by the Company and Shiseido for the continued improvement of the technology; (iii) that a commercial, safe and effective hair regenerative treatment will be developed and commercialized; (iv) that the Company and Shiseido will develop further improvements to the technology; (v) that the Company will undertake and enter into development and collaboration agreements for the development of its technologies; and (vi) and that the Company’s technology will rejuvenate damaged hair follicles leading to the growth of new healthy hair fibers. These statements are only predictions and involve known and unknown risks which may cause actual results and the Company’s plans and objectives to differ materially from those expressed in the forward-looking information, including: that negative results from the Company’s clinical trials may impact further clinical trials, development, approval and commercialization of the technology; the effects of government regulation on the Company’s business, including the future development of the technology; risks associated with the Company’s ability to obtain and protect rights to its intellectual property; risks and uncertainties associated with the Company’s ability to raise additional capital; that the Company may not be able to find other parties will to participate in the development and collaboration of its technologies, and other factors beyond the Company’s control. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity or performance. Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of such factors on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. Readers should consult all of the information set forth herein and should also refer to the risk factor disclosure outlined in the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2012 and other periodic reports filed from time-to-time with the Securities and Exchange Commission on Edgar at www.sec.gov and with the British Columbia Securities Commission on SEDAR at www.sedar.com.
Tokyo, Japan and Vancouver, Canada – May 29, 2013 – RepliCel Life Sciences Inc. (the “Company” or “RepliCel”) (OTCBB: REPCF) (CNSX:RP) and Shiseido Company, Limited (“Shiseido”) (Tokyo Stock Exchange Code: 4911) (ADR Receipts: SSDOY) announced today that they have entered into a Collaboration and Technology Development Transfer Framework Agreement (“the Agreement”) for an exclusive geographic license for RepliCel’s RCH-01 hair regeneration technology. Under the final agreement, Shiseido will pay RepliCel an upfront fee of ¥400,000,000 (Approx. USD $4 Million). In addition, Shiseido will pay RepliCel sales milestones up to ¥3,000,000,000 (Approx. USD $30 Million). Replicel is also entitled to royalties on sales.
David Hall, CEO and President of RepliCel states, “Shiseido is one of the oldest and most respected cosmetics companies in the world with annual sales in excess of US$6.7 billion. Since its inception in 1872, they have stood at the forefront of science, innovation and beauty. They are known throughout the industry for their research and development in skin and hair biology as well as expertise in formulation and manufacturing. This Agreement for our RCH-01 autologous cell therapy for pattern baldness is consistent with our goal to partner with the leading companies in the field of hair regeneration. The Agreement also represents a key validation of our technology platform being built around the concept of addressing cellular deficits in human conditions.”
“Shiseido’s corporate mission is a research driven focus on human beauty and wellness,” stated Mr. Youchi Shimatani, Shiseido’s corporate officer in charge of research and development. “Our hair cell related research is to support those people suffering with pattern baldness. With this focus, I am delighted to be entering into a technical partnership with RepliCel which is a leader in hair regenerative technology,” concluded Mr. Shimatani.
Professor Rolf Hoffmann, RepliCel’s Chief Medical Officer commented, “The Agreement will ultimately see further human clinical trials being conducted by Shiseido in its territory. In addition, the Agreement anticipates ongoing research collaboration for the continued improvement of the technology. As Shiseido has world-class technical expertise in hair biology, we anticipate that together we will develop further improvements to the technology. As a co-founder of the Company, I am extremely pleased to be partnering with a leader in hair science.”
RCH-01 is a patented hair follicle cell replication and implantation technology designed to rejuvenate damaged, miniaturized hair follicles in balding scalp skin. This technology has been developed over ten years of research, experimentation and trials. The mechanics of this technology involve the extraction of as few as 20 hair follicles from the back of a patient’s scalp where healthy cycling hair follicles reside. Specific cells are isolated from the hair follicles and are then replicated in a current Good Manufacturing Practice compliant facility through the Company’s proprietary cellular replication process, and are then reintroduced back into balding areas on a patient’s scalp. The implanted cells are expected to rejuvenate damaged hair follicles leading to the growth of new healthy hair fibers.
“The Shiseido agreement represents another significant step in the development of RCH-01”, stated Dr. Kevin McElwee, Chief Scientific Officer. “We are excited to be collaborating with such a skilled group of scientists.”
The Agreement encompasses a geographic area including Japan, China, South Korea, Taiwan and the ASEAN countries representing a population of approximately 2.1 Billion people. Joint steering committees will be established to oversee the transfer of the technology, knowhow and standard operating procedures.
About RepliCel Life Sciences
The Company is developing two autologous cell therapies. The first is a cellular treatment for androgenetic alopecia (pattern baldness) named RepliCel Hair-01 (RCH-01). The second is a cell therapy for the treatment of chronic tendon injuries named RepliCel Tendon-01 (RCT-01). Both treatments are based on RepliCel’s innovative technology which utilizes cells isolated from a patient’s own healthy hair follicles to address specific cellular deficits. Phase II clinical trials, for both technologies, are planned for the later part of 2013.
About Shiseido Company, Limited
Shiseido started business in Ginza, Tokyo in 1872 as the first Western-style pharmacy in Japan. Since then, the company has led the cosmetic technology and culture in Japan over more than 100 years. The company now aspires to become a “global player to represent Asia with origins in Japan” and operate businesses all over the world, including Europe, the U.S. and Asia. Its representative global brand, “SHISEIDO” is now sold in 89 countries and regions as of April 2013.
For more information please contact:
RepliCel Life Sciences Inc.
Tammey George, Director of Communications
Tel: 604-248-8696
tg@replicel.com
www.replicel.com
Shiseido Company, Limited
Public Relations Department
Tatsuyoshi Endo
Tel: +81-3-6218-5200
tatsuyoshi.endo@to.shiseido.co.jp
www.shiseido.com
Notice Regarding Forward Looking Statements
This press release contains projections and forward-looking statements, as that term is defined under applicable securities laws. Statements in this press release, which are not purely historical, are forward-looking statements and include the following: (i) that the Company and Shiseido will enter into a definitive license agreement for an exclusive geographic license for RepliCel’s RCH-01 hair regeneration technology and receive the payments set out above; (2) that the Company will partner with the leading companies in the field of hair regeneration, including Shiseido; (3) that the Company will ultimately see further human clinical trials being conducted; (4) that ongoing research collaboration will be conducted by the Company and Shiseido for the continued improvement of the technology; (5) that the Company and Shiseido will develop further improvements to the technology; (6) that the Company’s technology will rejuvenate damaged hair follicles leading to the growth of new healthy hair fibers; and (7) Phase II clinical trials, for both the hair technology and the tendon technology, will be conducted in the later part of 2013. These statements are only predictions and involve known and unknown risks which may cause actual results and the Company’s plans and objectives to differ materially from those expressed in the forward-looking information, including: that the Company and Shiseido may not be able to negotiate and enter into a definitive license agreement pursuant to which the Company will license to Shiseido an exclusive geographic license for RepliCel’s RCH-01 hair regeneration technology; that the Company and Shiseido may not be able to agree on the research and development to be conducted in connection with the Company’s technology; that negative results from the Company’s clinical trials may impact further trials and development of the technology; the effects of government regulation on the Company’s business, including the future development of the technology; risks associated with the Company’s ability to obtain and protect rights to its intellectual property; risks and uncertainties associated with the Company’s ability to raise additional capital; and other factors beyond the Company’s control. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity or performance. Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of such factors on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. Readers should consult all of the information set forth herein and should also refer to the risk factor disclosure outlined in the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2012 and other periodic reports filed from time-to-time with the Securities and Exchange Commission on Edgar at www.sec.gov and with the British Columbia Securities Commission on Sedar at www.sedar.com.
by Topic
DISCLAIMER:
The information in these press releases is historical in nature, has not been updated, and is current only to the date indicated in the particular press release. This information may no longer be accurate and therefore you should not rely on the information contained in these press releases. To the extent permitted by law, RepliCel Life Sciences Inc. and its employees, agents and consultants exclude all liability for any loss or damage arising from the use of, or reliance on, any such information, whether or not caused by any negligent act or omission.
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