📡 In this edition of Longevity Marketcap Telemetry

1. Notable Last Week

2. Longevity Futures

3. AgeX Therapeutics Deep Dive

4. Technical Analysis

None of this information should be taken as financial advice. It is for educational purposes only.

*Warning: Investing in biotech is risky!

- Nathan Cheng // LongevityMarketcap.com // LongevityList.com // BiohackStack.com

📝 Notable Last Week

What happened?

• AgeX Therapeutics (AGE) stock price soars 367%, Thursday. The stem cell regenerative medicine company helmed by CEO Mike West saw an incredible stock price boost after Juvenescence revealed it increased its stake in the company to 50%. Previously the stock had been sitting in penny stock territory and near all-time lows, down nearly 90% from its peak in 2018.
  
  The magnitude of the pop is a bit perplexing — even after it corrected more than 50% this week. It was already public knowledge that billionaire Jim Mellon’s Juvenescence owned 45% of AgeX so the increased stake was not so substantial. Perhaps Juvenescence’s public intentions to IPO attracted the attention of SEC filing bots?
  
  The alternative view is that 50% stake is a prelude to a full out acquisition by Juvenescence.

• Gensight Biologics (SIGHT.PA) positive LUMEVOQ (GS010) data for Leber hereditary optic neuropathy treatment (LHON). This gene therapy company’s stock has risen 75% over the last four weeks. On September 15, they announced the results of their analysis of Phase 3 data for LUMEVOQ a gene therapy for LHON — a rare genetic disease that causes blindness. LUMEVOQ showed a statistically and clinically meaningful sustained improvement in eyesight in LHON patients treated with LUMEVOQ.
  
  This is a big deal. I believe Gensight Biologics is the first to demonstrate evidence of a clinically successful (allotopic) expression of a mitochondrial gene in the cell nucleus. SENS Research foundation is using a similar strategy in their MitoSENS mouse project as a way to treat mitochondrial dysfunction caused by mtDNA mutations. This is an important repair strategy for defeating aging.

• ChromaDex (CDXC) positive Phase 2 COVID-19 trial. The maker of the popular nicotinamide riboside NAD+ boosting supplement announced results of a Phase 2 placebo controlled trial that showed a 30% reduction in recovery time in ambulatory covid-19 patients. Patients were treated with standard of care + metabolic factors supplements: L-serine, N-acetyl-L-cysteine (NAC), nicotinamide riboside (NR), and L-carnitine tartrate. The paper has not been peer reviewed yet. The stock popped 27% on the news.

• Unity Biotechnology (UBX) announces first dosing of UBX1325 in Phase 1 trial for Diabetic Edema. It’s good to see Unity back in the clinic after their failed osteoarthritis trial. Now the company is focussed on using a new senolytic target (inhibition of bcl-xL)to treat diseases of the eye. Data for Phase 1 is expected in 1H 2021.

• Longevity Industry 1.0: Defining the Biggest and Most Complex Industry in Human History book release. Written by Dmitry Kaminskiy and Margaretta Colangelo of Deep Knowledge Ventures. It covers a wide range of topics including: “Longevity Politics and Governance, the Longevity Financial Industry (including coverage of AgeTech, WealthTech, FinTech, and the coming rise of new financial instruments and derivatives), the current state and forecasts on the Global Industrialization of Longevity to Scale, and an overview of the near-future trajectory of the Longevity Industry’s evolution between 2020 and 2025.”

  I have already bought my copy and will write up a book summary in the near future.

📅 Longevity Futures

Upcoming events, IPOs, clinical trial readouts, etc in the longevity industry

• Metabesity 2020 Conference October 12 - 15, 2020. Don’t let the name fool you. This conference focuses on aging in addition to metabolic disorders (which is closely related anyway). The free conference features many of the most well known anti-aging speakers including: Aubrey de Grey, Steve Horvath, Laura Deming, Nir Barzilai, Alex Zhavoronkov, and many more.
  
  There will be a company showcase on October 15th which will feature short presentations by up and coming startups in the longevity industry.

AgeX Therapeutics Due Diligence

In light of the big moves in the AgeX’s stock price, I thought it would be prudent to do a basic due diligence on the company. My strategy for this is to use the 5 Questions Framework laid out by Juvenescence’s CEO, Gregory Bailey:

1. Does the science make sense? 

2. Is there IP protection? 

3. Do I agree with the business plan?

4. Do I think the management can execute on the plan?

5. Does the company have enough capital to get to the “light switch moment”. This is the most important question.

Incidentally, Juvenescence owns 50% of the AgeX so I imagine the company passed the test in Gregory Bailey’s eyes.

But let’s dig deeper.

AgeX Therapeutics (AGE) basic company info:

• Ticker: NYSE:AGE

• Year founded: 2017

• Market cap: 76.128M

• CEO: Michael D. West

• Category: Regenerative medicine

• SENS Category: Cell loss, tissue atrophy

• Hallmarks of Aging: Stem cell exhaustion

A bit of company history is needed here.

AgeX was launched as a subsidiary of BioTime — a company formerly CEO’d by Mike West. Juvenescence (Jim Mellon’s company) bought BioTime’s AgeX shares in 2018.

BioTime was renamed to Lineage Cell Therapeutics (LCTX, listed on Longevity Marketcap) in 2019.

AgeX and Lineage Cell Therapeutics have many partnership and technology licensing agreements with each other.

1. Does the science make sense?

• AgeX Therapeutics is a regenerative medicine company whose goal is to reverse aging through stem cell therapies and cellular reprogramming.

• Their science is based on the notion that humans in early development (< 8 weeks) are naturally able to regenerate. Cells in early development also have increased proliferative potential. In contrast adult somatic cells can only divide a finite number of times before they become senescent (Hayflick limit). And in general adult tissues have limited generative potential. More about AgeX’s macroview of aging and regeneration can be found in their paper in Regenerative Medicine.

• AgeX’s technology aims to rejuvenate tissues by returning the constituent cells to a regenerative and proliferative state (but not all the way back to pluripotency).

• AgeX Therapeutics has two main technological approaches:

  • Allogenic off-the-shelf cellular therapy using PureStem + UniverCyte + HyStem. Deliver differentiated stem cells / progenitor cells that still have regenerative and proliferative potential to degenerated old tissues. Ideally, these new cells will then regrow into healthy tissues. UniverCyte is a method of genetically engineering their PureStem cells to have have low immunological rejection. HyStem is a biomimetic extracellular hydrogel matrix that will be used to engraft the PureStem cells inside patients.

  • Induced Tissue Regeneration (iTR) Cellular Reprogramming: Use mRNA or small molecules to revert in-vivo aged cells back to an early, regenerative, and proliferative state. Similar to induced pluripotency — but reverting to a young state without losing cell identity.

Cellular Therapy: PureStem + UniverCyte + HyStem

• PureStem is a class of commercially available stem cell lines sold by ESI Bio — a subsidiary of Lineage Cell Therapeutics.

  • The cells are human embryonic stem cell-derived clonal embryonic progenitors. Basically, they are identical cells created from embryonic stem cells (can differentiate into any type of somatic cell) that have passaged ~15 times under certain cell culture conditions to show some phenotypic differentiation.

  • Researchers can buy different types of PureStem cells for specific research purposes based on what kind of proteins they express. For example ES-101 PureStem cells express transthyretin, which is commonly found in Blood Brain Barrier cells. Therefore ES-101 cells might then be used for Alzheimer’s research.

  • PureStem cells are clonally pure. And because they are derived from pluripotent cells they are scalable for manufacturing.

  • PureStem cells do not express telomerase. They are not immortal cells. They can only divide ~ 70 times according to their spec sheets.

  • PureStem cells display what is believed to be a regenerative (pre-fetal) pattern of gene expression, namely the absence of COX7A1 expression. This marker was discovered in work done by AgeX in collaboration with Alex Zhavoronkov’s Insilico Medicine. In the paper, they used deep learning on the transcriptomic profile (gene expression) of thousands of samples from different stages of development (embryonic cells, induced pluripotent cells, embryonic progenitor cells, adult stem cells, and adult cells) to find the COX7A1 biomarker.

  • AgeX’s cellular therapies plan on using PureStem differentiated cells into aged tissues in order to regenerate them.

  • Nobody else really uses PureStem. I was hoping to find a sizeable body of literature showing the use of PureStem cells in other research labs, which would confirm the reliability of their use and specs. A brief search in Google Scholar for PureStem yielded very few results. This isn’t a dealbreaker but something to keep in mind.

• UniverCyte is used to genetically modify cells to have low immunological rejection

  • PureStem cells are allogenic and off the shelf. This means there is a high chance that implantation of the cells may cause an immune reaction in a patient.

  • AgeX’s proprietary UniverCyte aims to genetically modify PureStem cells so they are not rejected by a patient’s immune system.

  • According to AgeX’s patent, UniverCyte uses a retrovirus vector to genetically modify their stem cells to express the HLA-G gene. HLA-G is a well-studied surface antigen / protein that plays a role in immune tolerance during pregnancy.

  • Genetically engineering stem cells to avoid the immune system raises the problem of cancer and infection risk. This probably needs to be addressed, though others are working on designing cancer safety checkpoints for immune evasive stem cells.

• AgeX’s HyStem is a biomimetic extracellular hydrogel matrix that is designed to support their transplanted PureStem cells. Transplanted stem cells generally have limited viability alone.

  • AgeX claims that “current research at leading medical institutions has shown that HyStem® is compatible with a wide variety of cells and tissue types including those of the brain, bone, skin, cartilage, vascular system, and heart.”

  • A brief search for HyStem on Google Scholar shows that it is used by other researchers. Even specifically for stem cell engraftment in mice.

  • HyStem’s underlying technology uses thiol crosslinks to create hyaluronan-based matrices/hydrogels.

  • Hydrogels are being researched by many organizations for use in stem cell transplantation and delivery of other cellular therapies. The science here looks reasonable.

Induced Tissue Regeneration: iTR

• AgeX has a program that aims to reprogram cells back to a younger regenerative and proliferative state without completely losing their identity.

• This approach is very similar to Yamanaka’s induced pluripotency stem cells (iPSC) pioneered in 2006. The combination of the four Yamanaka transcriptional factors (Myc, Oct3/4, Sox2 and Klf4) are able to revert somatic adult cells back to a young embryonic-like dedifferentiated pluripotent stem cell state. Unfortunately, the loss of cell identity and ability for self-renewal makes iPSCs a risk for cancer. In one study, human iPSCs implanted into a spinal chord injury mouse model caused tumor formation.

• AgeX’s method does not aim to revert cells back all the way to pluripotency. Instead they wish to revert cells back to a state further along the developmental timeline (more differentiated), but before they lose their regenerative capacity (the 8 week embryo-fetal transition / Weissman Barrier). Essentially they want to reprogram somatic adult cells to turn into something similar to a differentiated PureStem progenitor cell.

• AgeX has two approaches to induced tissue regeneration:

  1. Use transcription factors delivered by exosomes (extracellular vesicles) to reprogram cells.

  2. Use a cocktail of small molecule drugs to reprogram cells (iTR1547). This drug has evidence of returning cells to a regenerative young state as shown by the lack of biomarker COX7A1.

• Other groups (like Belmonte at Salk Institute) are also attempting partial epigenetic reprogramming.

Does the science make sense? Verdict: Mostly, yes.

AgeX’s cellular therapy (PureStem + UniverCyte + HyStem) and induced Tissue Regeneration (iTR) are interesting approaches related to well-researched areas.

Some big questions remain. AgeX will need to figure out immunogenicity / effectiveness of UniverCyte / how to control reprogramming without cancer risk.

But I don’t see any red flags that should disqualify their attempt. Mike West is a well known pioneer in stem cells so the risk of Theranos-level fraud is low.

2. Is there IP protection?

• Here is a list of the four US patents owned by AgeX Therapeutics. They include:

  • Using exosomes generated from host embryonal carcinoma or embryonic progenitor cell lines to deliver induced tissue regeneration therapy.

  • A screen for cardiotoxicity using cardiomyocytes

  • HLA-G modification of cells (to suppress immunogenicity)

• AgeX has significant licensed technology from BioTime / Lineage Cell and Advanced Cell Technologies / Ocata Therapeutics. The details of their patents and agreements can be found in their 10-K SEC filings (starting on page 16). Most of those patents expire in 2030 - 2035.

• AgeX has licenses for BioTime’s / Lineage’s:

  • PureStem pluripotent stem cell asset,

  • HyStem extracellular hydrogel matrix, and

  • Tissue Regeneration technology (iTR).

• AgeX cannot develop their tech for certain applications due to licensing agreements. AgeX and Lineage recently amended their license agreement to allow AgeX to sublicense their technology to 3rd as long as Lineage maintains exclusivity in spinal cord injury and certain oncology applications. According to their website, AgeX is also prohibited from using PureStem in orthopedics, medical aesthetics, and certain ophthalmological applications. This is worth keeping in mind.

Is there IP protection? Verdict: Probably. No red flags.

I’m not a patent lawyer. I don’t know the strength of AgeX’s patent claims nor do I know the intricacies of their numerous licensing agreements. It is worthy to note that many of the patents that they licensed will expire in ~10 - 15 years. So there is a maybe a timeline for them to go to market.

3. Do I agree with the business plan?

• AgeX is currently a pre-clinical company. There is no solid timeline announced for clinical trials.

• It is likely they will need to partner with a bigger pharma company to conduct clinical trials.

• The plan seems to be to try and get as much convincing pre-clinical data in order to raise enough interest for a clinical development partnership.

Are the targets in their pipeline good business models? Let’s take a look:

AGEX-VASC1 Pipeline

• AgeX wants to develop their PureStem + Univercyte technology as an off-the-shelf allogenic cellular therapy targeting ischemic heart disease (blocked coronary arteries).
  
  The hope is differentiated PureStem cells can be cultured into vascular progenitor cells that would be delivered in-vivo to regenerate heart blood vessels. Their Univercyte technology is designed to stop patients’ immune systems from rejecting the cells. AgeX’s HyStem biomimetic hydrogel will act as a delivery vehicle to support engraftment and stem cell survival.

• The global cardiovascular disease market is projected to reach $146 billion by 2022. Heart disease is the number one cause of death in most wealthy nations.

• Treatments for ischemic heart disease include:

  • Medications: Aspirin, beta blockers, nitrates, ACE inhibitors, statins

  • Procedures: Angioplasty, stents, coronary bypass surgery

• According to one meta-analysis published in the Lancet, statins, the most common treatment for high cholesterol (and thus cardiovascular disease) might not have much benefit for patients over 75. Perhaps AGEX-VASC1 could have a significant impact on extending healthy lifespan of older adults, where rejuvenation becomes the only really effective treatment.

AGEX-BAT1 Pipeline

• Similar treatment method as AGEX-VASC1, but using PureStem lineages to generate brown adipocytes as a treatment for Type 2 Diabetes. Brown Fat tissues have thermoregulation function in the body and are also implicated in insulin sensitivity.

• According to one research report, the global diabetes drugs market is expected to reach $62 B by 2026.

AGEX-iTR1547 Pipeline

• This is a small molecule approach to induce cells back to a younger regenerative state. Partial reprogramming, not full induced pluripotency.

• iTR1547 will target chronic heart failure as an indication. This is a large market as cardiovascular disease is the number one cause of death in most wealthy nations.

• Small molecule approaches are easier to manufacture than cellular therapies.

• Small molecules also have a more established history of regulatory approval at the FDA.

Business Plan Risks

• High risk, high reward. There are already a number of clinical therapeutics for heart disease and T2 diabetes. These are large markets and AgeX will have a higher bar to clear for FDA approval versus a disease indication that has no approved therapies. Lineage Cell Therapeutics for example is using similar cellular therapy technology to target Dry Age-related Macular Degeneration, which has no approved treatments.

• Regulatory risk. The FDA is not very kind to stem cell therapies. Aside from cord blood stem cells and some blood / marrow related cell therapies, there are no FDA approved cellular therapies. Many believed that Mesoblast’s Ryoncil would be the first FDA approved stem cell therapy. But it was surprisingly rejected by the FDA at the end of September.
  
  Thankfully, AgeX has a mRNA / small molecule approach for induced Tissue Regeneration.

Competitors

• There are many stem cell therapeutics companies in the industry. Though not many are working directly on regenerative medicine approaches.

• BioRestorative Therapies is a private company working on a brown adipose tissue stem cell therapy for diabetes like AgeX. BioRestorative’s progress seems less clear.

• AgeX has at least two other competitors in the cellular reprogramming (iTR) approach: David Sinclair’s Life Biosciences and Turn Bio. Neither are in clinical trials yet, though Turn Bio is aiming to get to the clinic in 6 months according to co-founder, Vittorio Sebastiano.

Do I agree with the business plan? Verdict: Maybe.

This is a high risk, high reward approach using novel paradigms to tackle large competitive markets with existing therapeutics.

My concern is that even if the AgeX approaches work they might not be better than existing therapies in the first iteration of the technology. This could mean difficulty in getting FDA approval.

Choosing a smaller disease market that has no approved treatments might be a preferable first stepping stone.

4. Do I think the management can execute on the plan?

• Mike West is a pioneering scientist CEO who has been at the head of Geron (NASDAQ:GERN - $630 M), Advanced Cell Technologies (acquired by Astellas for $379 M), and BioTime (now Lineage Cell Therapeutics, NYSE:LCTX). He’s been leading cutting edge biotech companies for ~ 30 years now.

• The rest of the management team seems fine. However, it is notable their Chief Financial Officer is listed as inactive.

• The management team is very small. Also major key-man risk if anything were to happen to Mike West — God forbid.

• There is no team in place for clinical development. They will either need to raise money and hire or partner with another pharma company (more likely).

Verdict: Probably. But they need to partner with someone to get to clinical trial.

5. Does the company have enough capital to get to the “light switch moment”?

• According to their most recent Q2 financial reports AgeX has ~ $2M in current assets (cash + accounts etc).

• Q2 operating loss was ~ $2.6 M.

• At the end of Q2, AgeX had a remaining ~ $5.5 million credit available from Juvenescence (at Juvenescence’s discretion).

• AgeX reduced its workforce in May 2020, but the company admits that there is a concern they will not have enough cash to last them 12 months.

• AgeX recently required a cash injection from Juvenescence (its largest shareholder).

• AgeX is able to license / sub-license some of its technology. Their September 2020 agreement with Lineage Cell Therapeutics paves the way for this. It is possible they could generate some much needed revenue from this — but it likely won’t be enough.

Verdict: Maybe.

Cash is clearly a concern here. We don’t know how much time they need since there is no clear timeline to go to the clinic. The only saving grace here is that Juvenescence increased its stake to 50% of the company and doesn’t seem keen on letting it implode any time soon. So more loans or a buy out are probably coming.

My Overall Verdict

I think AgeX Therapeutics is worth betting on — but at this stage it only makes a very small percentage of my portfolio. Announcement of a date for a Phase 1 trial would raise my confidence.

My biggest concerns are the ongoing need for cash and lack of timeline for getting to the clinic.

Biotechnology is risky.

My base case for basically every longevity company that I research is that it will fail. This due diligence is done only to weed out the companies that are fraudulent or have obvious flaws.

After a blizzard of failures eventually some of the longevity companies will begin to succeed. And the reward, the promise of ending aging, will be ginormous. Not just for portfolios, but for the entire future of our species.

-NATHAN CHENG

Technical Analysis

This is the section of the newsletter where I use numerology and other questionable superstitions to diagnose momentum in stock prices.

Unity Biotechnology (UBX)

*No chart. Email too long.

Unity’s stock is up 30% ever since it bottomed after their osteoarthritis trial failure. Now that they already announced the first dose of their UBX1325 senolytic in Phase 1 and TD sequential has hit a 9 daily sell, I would expect a bit of a pullback.

CRISPR Therapeutics (CRSP)

*No chart. Email too long.

I’ve been contemplating adding this stock to LongevityMarketcap.com ever since I discovered they have a regenerative medicine pipeline.

All the CRISPR stocks saw nice gains when the Nobel Prize announcement was made last week. But now the TD 9 daily sell and horrible looking candle calls for a pullback