Reuters report on ICX

Stem cell; cell based hair therapy
1

A 12 page report was issued yesterday. It costs $20 to view it, so I have no idea what it says.
http://reports.finance.yahoo.com/w0?r=42129267:1

But today, ICX stock went down $10.00, and the volume went from an average of 286 thousand to 4.3 million. I’m guessing there must be some pretty bad news in that report.

2

Oops. Not down $10. I guess it’s down 10p. But down over 23%.

3

» news in that report.
» Symbol Lookup from Yahoo Finance

4

That Reuters report was pretty standard. Here are excerpts from a recent research report:
Piper Jaffray March 25, 2008
ICX-TRC is a cell therapy-based hair regeneration product being developed for the treatment of male pattern baldness and female diffuse alopecia. This autologous therapy uses dermal papilla cells from the base of a patient’s hair. These are multiplied over a period of six weeks and then injected into the bald or thinning areas of the scalp. Over the next three to six months, hair regrows from the injected cells which form new follicles. A pilot Phase I trial, which completed in 2005, showed growth in five out of seven patients.

This is significantly greater success than has been seen by any other group to date, the unfolding Phase II data is confirming these results.

The Phase II trial has treated 19 subjects, although 5 have been lost to follow up, subjects were treated with some injections into a totally bald area of the scalp and also with a larger number of injections into a thinning area to assess the use of the product for thickening thinning hair. We believe treatment of a thinning area is likely to be the earliest application of the product, either in patients as the hair thins or as an adjunct to a traditional hair transplantation allowing transplanted hairs to be used to cover a wider area with better coverage.

The Phase II trial had a rolling protocol with different injection techniques and scalp pre-stimulation techniques used. The first six
patients were treated without pre-stimulation whilst the remaining 13 patients had pre-stimulation of the scalp prior to delivery of the
dermal papilla (DP) cells. The trial has a 48 week follow up as this is roughly how long it takes for a standard hair transplantation to
produce terminal hairs, at earlier time points vellus (fine) hairs are more commonly seen. The interim data, announced this week,
shows that at 24 weeks in the 6 patients without stimulation of the scalp 3 had an increased hair count and two had a reduced hair
count, one has been lost to follow up. In the 5 with pre-stimulation of the scalp who have reached 12 week follow up all had an
increased hair count at 12 weeks, and the 3 who had reached 24 weeks had maintained this increased count. This is very encouraging
data and we watch the development of this trial with interest.
Intercytex does not expect to fund the development of ICX-TRC beyond the current trial. We expect the company to sign a
commercial agreement with an aesthetics company to continue product development. Intercytex already has an agreement with Bosley,
the largest chain of hair transplant clinics in the US, to negotiate distribution rights to the product. However, we believe that ICX-TRC
may also be of interest to more of the aesthetic medicine companies, hair transplantation is currently the third most common cosmetic
procedure for men with 20,473 transplants being performed in 2006 (American Society Plastic Surgeons). The primary hurdle to
increased use of transplantation is finding sufficient hair to transplant; hence the procedure cannot be used in bald or severely afflicted
patients. Although ICX-TRC does require some hairs from the patient the sample required is only around one tenth of that needed for a
traditional transplantation and the cells acquired can, in principle, be expanded indefinitely.

Commercial Strategy for early portfolio: Intercytex has clarified the strategy for each of its products outlining a route to market, either through partnership or direct sales. Negotiations are already underway for ICX-PRO, we expect a partner to be identified post the Phase III trial data. Intercytex also plans to stop spending on ICX-TRC, post the ongoing Phase II trial, and license out for further development. This reduces the cash requirement of the company. We also believe it is likely that Intercytex will partner ICX-SKN, but after completion of the Phase II trial in treatment of basal cell carcinoma.

5

Another research excerpt:

ICX-TRC: Data from the hair restoration trial announced today shows that
ICX-TRC generates hair growth when used in conjuction with stimulation of the
scalp, with increased hair count at 12 weeks in the 5 subjects treated. Data from patients without scalp stimulation is less conclusive. Intercytex has announced its intention to partner ICX-TRC and not fund further trials internally. This strategy focuses Intercytex on its skin portfolio, leaving funding for development of these core products.

As for the stock taking a dive today on heavy volume, it looks like management sold quite a bit…not a good sign usually.

24/04/08

                          Intercytex Group plc

                       Block listing application

Intercytex Group plc (LSE: ICX) (“Intercytex” or the “Company”), the leading
cell therapy company, announces that application has been made to AIM, a market of the London Stock Exchange, for a block listing, of 2,000,000 ordinary shares of 1 pence each.

The application is in respect of shares to be allotted pursuant to the exercise of options under the Intercytex Group plc Share Incentive Plan.

However, a hedge fund just bought a large chunk of stock as well. This interest might be from one of their other products though:

Intercytex Group plc announced that it has received notification from River and Mercantile Asset Management LLP for the interest in 7,446,154 shares representing 9.38% of the issued share capital of the Company.

6

Hey Mroiz,

I saw that PJ report too, but didn’t bother posting it here because it was so superficial. I’m not sure what your thoughts are on the report, but to me it looks so superficial. I can’t believe that the analyst (Julie Simmonds) can get away with producing such a shallow report and then slapping a buy recommendation on it.

For those of you who haven’t seen the report, it is simply a regurgitation of the company press releases. It’s not worth reading in my opinion.

» Another research excerpt:
»
» ICX-TRC: Data from the hair restoration trial announced today shows that
» ICX-TRC generates hair growth when used in conjuction with stimulation of
» the
» scalp, with increased hair count at 12 weeks in the 5 subjects treated.
» Data from patients without scalp stimulation is less conclusive. Intercytex
» has announced its intention to partner ICX-TRC and not fund further trials
» internally. This strategy focuses Intercytex on its skin portfolio, leaving
» funding for development of these core products.
»
» As for the stock taking a dive today on heavy volume, it looks like
» management sold quite a bit…not a good sign usually.
»
» 24/04/08
»
» Intercytex Group plc
»
» Block listing application
»
» Intercytex Group plc (LSE: ICX) (“Intercytex” or the “Company”), the
» leading
» cell therapy company, announces that application has been made to AIM, a
» market of the London Stock Exchange, for a block listing, of 2,000,000
» ordinary shares of 1 pence each.
»
» The application is in respect of shares to be allotted pursuant to the
» exercise of options under the Intercytex Group plc Share Incentive Plan.
»
»
»
»
» However, a hedge fund just bought a large chunk of stock as well. This
» interest might be from one of their other products though:
»
» Intercytex Group plc announced that it has received notification from
» River and Mercantile Asset Management LLP for the interest in 7,446,154
» shares representing 9.38% of the issued share capital of the Company.

7

They announced some dillution for employee compensation of 2MM shares. The drop had nothing to do with fundamentals, the drop was technical from dillution etc.

8

" Although ICX-TRC does require some hairs from the patient the sample required is only around one tenth of that needed for a
traditional transplantation and the cells acquired can, in principle, be expanded indefinitely. "

What does this mean?

9

» " Although ICX-TRC does require some hairs from the patient the sample
» required is only around one tenth of that needed for a
» traditional transplantation and the cells acquired can, in principle, be
» expanded indefinitely. "
»
» What does this mean?

Not much. Because the whole TRC program does not seems to be working as well as they are implying in these reports.

They take a small skin biopsy (like a couple of square centimeteres at the most) and then they grow a whole lot of cells for re-injection from that small sample. They’re saying they think they could grow 10 times the number of new hair follicles as what you lost from the small biopsy sample.

10

» »
»
»“They take a small skin biopsy (like a couple of square centimeteres at the
» most) and then they grow a whole lot of cells for re-injection from that
» small sample. They’re saying they think they could grow 10 times the
» number of new hair follicles as what you lost from the small biopsy sample.”

I still dont understand exactly why this hasnt worked. I’m kind of new to these forums, but I know that scientists can duplicate just about anything biological these days…what exactly has been the difficulty with HM?

11

» » »
» »
» »“They take a small skin biopsy (like a couple of square centimeteres at
» the
» » most) and then they grow a whole lot of cells for re-injection from
» that
» » small sample. They’re saying they think they could grow 10 times the
» » number of new hair follicles as what you lost from the small biopsy
» sample.”
»
»
» I still dont understand exactly why this hasnt worked. I’m kind of new to
» these forums, but I know that scientists can duplicate just about anything
» biological these days…what exactly has been the difficulty with HM?

I think the problem is with the condition of the DP cells they are harvesting. They are old. You are essentially taking an old worn out cell and duplicating it. Now if it was a DP cell that was fresh and young it would probably have more “power” to revive those old hair follicles. That is why I like the science of Follica better. It is essentially creating HF’s that are similar to an embryonic state…They’re brand new hair follicles- not old ones revived by old DP seeds.

12

AK,

the overall answer to your question is this:

Creating hair follicles is a whole lot more complex than regrowing skin itself. It’s frustrating because they’re so small and the job seems so simple, but that’s the situation.

The individual follicles basically function like individual little organs. Science can’t easily regrow a whole new hair follicle for the same reason that they can’t regrow you a new heart or lung or arm yet either. Regenerating a big amount of skin for grafting is actually a lot easier than doing one tiny little follicle for this reason.

The best we’ve had with full-blown cloning of hair follicles didn’t work very well. They basically came out looking more like little body hairs than the big long shiny scalp hairs they were sourced from.

So science has basically turned to other ways of beating the problem. The ICX project was supposed to harvest the certain kinds of cells that were most affected by MPB inside the follicle, and then clone & reinject them everywhere. This hasn’t been working as well as hoped.

The hopes now are resting on Follica. Their plan involves basically wounding the scalp skin (just cosmetic dermabrasion, nothing serious), and then tricking it into healing back up in a “younger” form than when it was injured.

Doctors have known for years that there are random weird cases of bald guys having hair regrowth at the wound after a scalp injury. The principle can work, it’s just a matter of whether or not we have figured out a decent way to control the process yet.

Acell’s wound-healing powder (the fingertip-regenerating stuff) is the last hope if Follica’s deal falls through. We don’t know if it will regrow hair yet but the idea seems plausible. And the manufacturer has said the idea is worth trying.

13

» That Reuters report was pretty standard. Here are excerpts from a recent
» research report:
» Piper Jaffray March 25, 2008

Stock research analysts are there to get people to trade. They are not medical experts and know very little about the industries they cover.

Intercytex in the past three years has made very little progress. They’ve burned through millions in cash, lost a majority of the value of the company stock, and diluted the outstanding shares by granting stock to executives more than once.

Intercytex is a joke. Anyone who bought in early lost a bundle. I don’t know why anyone would invest another cent into that turkey.