On July 6, 2012 Celltex Therapeutics Corporation filed a Form D with the U.S. Securities and Exchange Commission. With RNL Bio, a South Korean company, Celltex runs a stem cell bank in Texas and is accused of providing adult autologous mesenchymal stem cells to patients seen in nearby clinics without first having submitted an Investigational New Drug Application to the FDA or obtained from FDA an approved Biologics License Application. Companies that file Form D with SEC do not have to register their securities with SEC but they are obliged to identify executive officers. With Celltex executives frequently declining to respond to questions posed by journalists and other parties interested in the company’s business activities, and no information about the company available on Celltex’s website, this filing provides a glimpse into Celltex’s executive suite and equity offering.
According to the filing, Celltex was incorporated in 2011. The filing confirms that Celltex was previously called BioLife Stem Cell Corporation. Celltex’s corporate office is located at 2401 Fountain View Drive, Suite 416, Houston, Texas, 77057. Celltex’s laboratory and stem cell bank is located in Sugar Land, Texas.
Six individuals are identified in the filing. David G. Eller is listed as Chairman and Chief Executive Officer. Stanley Jones is identified as an Executive Officer and Director. J. C. Ra, presumably Jeong Chan Ra, is identified as a Director. Lynn Graham, Andrea Ferrenz, and Donna Lee are all classified as Executive Officers.
David Eller has ties to numerous companies. According to Bizapedia, Eller is Chief Executive Officer and Director of Cobalt Broadband Corporation. Corporationwiki states that Eller is Director of Global Oilfield Services Inc., Manager of Limestone Cattle Company L.L.C, and Manager of Seadrift Environmental; L.L.C. Eller is also a Director at BiOWish Technologies. His biography on the website of BioWish states that he is “President of Eller Holding Company, a privately held family investment company.” The biography also notes that Eller previously held senior executive appointments at DuPont Pharmaceuticals Company, Europe, E.I. du Pont de Nemours and Company, Virbac Corporation, North American Energy Inc., Granada Biosciences and Granada Foods, American National Petroleum Company, Coquina Oil Corporation, and Baylor Company. In addition to being a familiar figure in Houston due to his many businesses enterprises, philanthropy, and ties to prominent political figures such as Governor Rick Perry, Eller is also known for prolonged litigation against Forbes Magazine and journalist William P. Barrett. Eller initiated several libel lawsuits against Forbes and Barrett following publication of a 1991 Forbes’ article about Granada Corporation.
In addition to his executive position at Celltex, Dr. Stanley Jones is Founder and Aesthetic Medicine Director of Persona Medical Spa as well as Founder and Medical Director of SpineCare USA. His hospital affiliations reportedly include Memorial Hermann Hospital, Southwest and Houston Orthopedic & Spine Hospital. Dr. Jones is an outspoken advocate of adult autologous stem cell procedures. Both he and his wife underwent adult autologous stem cell procedures at Kyoto Bethesda Clinic in Japan. This clinic has ties to RNL Bio. Though Jones’ stem cell procedure occurred in Japan, he visited RNL Bio’s stem cell laboratory in South Korea and met with senior RNL Bio executives in both South Korea and Japan during his trip overseas. Jones describes his experience in a video that apparently was posted to YouTube by RNL Bio. Dr. Jones is perhaps best known as the physician who controversially administered adult stem cells to Texas Governor Rick Perry in July 2011.
Jeong-Chan Ra, PhD, is Chief Executive Officer, President, and Director of Celltex’s business partner, RNL Bio. Ra is also Chief Executive Officer of R & L Natural Life Co, Ltd and RNL Sammi Co., Ltd. Both Jeong-Chan Ra and RNL Bio are named as defendants in a lawsuit, Ben Hang Lee et al v. Human Biostar Inc. et al, filed in the Central District of California.
Lynn Graham, in addition to being listed as an Executive Officer at Celltex, reportedly serves as an Office Manager and Manager at North American Energy.
Andrea Ferrenz joined Celltex in June 2012. Her LinkedIn account identifies her as Celltex’s Executive Vice President-Legal. Prior to joining Celltex Ferenz spent nearly fifteen years at Emord & Associates. Her profile on Emord & Associates (now removed from the company’s website) stated, “In addition to advising clients on regulatory compliance and business practices, Ms. Ferrenz represents clients in litigation before state and federal courts.” Before joining Celltex’s executive team Ferrenz provided legal services to Celltex as a Principal at Emord & Associates. (With her colleague, Jonathan W. Emord, she wrote to both Dr. Karen Midthun, Director of the FDA’s Center for Biologics Evaluation and Research, and Dr. Eric Kaler, President of the University of Minnesota, in response to a letter I sent to the FDA.) Ferrenz has considerable experience responding to Warning Letters issued by the FDA as well as otherwise representing clients involved with FDA in disagreements related to compliance with federal regulations.
Though not identified in the Form D submission to SEC as a member of Celltex’s management team, Jonathan Cisneros recently was hired by Celltex as a Quality Assurance Manager. Cisneros joined Celltex in June 2012. He previously worked as Quality Assurance Manager at SRI Surgical. Given timing of his appointment, it is possible that Cisneros was hired as result of the many observations identified in the 483 issued by FDA investigators at the end of their inspection of Celltex’s laboratory and stem cell bank (The facility was identified by the FDA investigators as a “biological drug manufacturer.)
Two individuals previously employed by Celltex are no longer with the company. On February 29, 2012, Glenn McGee, Celltex’s former President of Ethics and Strategic Initiatives, announced via Twitter that he resigned from the company February 28. On June 22, 2012, Jennifer Novak, a nurse, filed a lawsuit against Celltex. The complaint she filed with U.S. District Court, Western District of Texas stated that she was employed at Celltex for approximately six months. This complaint was settled and Novak’s agreement with Celltex is sealed.
The Form D filing states that Celltex issued an equity offering. The first sale of equities is dated June 21, 2012. (Of note, on June 25, 2012, four days after this first reported sale of equities, FDA released 483 inspection form identifying lengthy list of shortcomings with Celltex’s manufacturing processes. The inspection by FDA investigators took place between April 16, 2012 and April 27, 2012 and therefore occurred before Celltex’s reported first sale of equities.) The Form D reports that Celltex’s total offering amount was $45,600,000. Of this total, $34,063,000 was sold and $11,537,000 remains to be sold.
Celltex’s Form D indicates that ten investors participated in Celltex’s offering. In September 2011 NBC’s Michael Isikoff reported that Celltex signed a $30 million technology licensing agreement with RNL Bio. At that time Isikoff stated that Celltex was “backed by about 30 Texas oil and gas investors.” It is unclear whether Celltex’s recent filing with SEC is in any way related to the initial “backing” provided by the investors noted by Isikoff or constitutes a second wave of investors obtaining equity in Celltex.
Celltex’s filing with SEC provides little information concerning financial aspects of the company. However, appointment of a quality assurance manager as well as hiring of Ferrenz suggests that Celltex is both responding to numerous manufacturing and quality assurance problems observed during FDA inspection and possibly readying itself for whatever steps FDA takes following issuance of 483 form. It seems fair to speculate that Ferrenz’s experience working at Emord & Associates while that company provided legal counsel to Coast IRB, Patient Advocacy Council, and other organizations informed the decision to add her legal expertise to Celltex’s executive management team. Acknowledging the limited information provided by Form D submissions to the SEC, it appears Celltex has sold over $34 million in equity and obtained experienced in-house legal expertise. Given significant controversy surrounding Celltex’s business practices, this last step is unsurprising.