Biotech: BioPulse May Focus on Developing Drugs Vs. Treating Patients
An officer of BioPulse International Inc., the controversial Tijuana cancer clinic recently shut down by Mexican authorities, said the firm is considering selling its interest in the clinic to the Mexican doctors who run it.
If the sale is successful, BioPulse would then revamp its business and focus on cancer therapeutics and diagnostic tests, for which it would seek U.S. Food and Drug Administration approval, said Michael Jones, BioPulse’s CFO.
BioPulse was shut down by Mexican authorities Feb. 15, because it treated patients with an unlicensed cancer treatment, according to Bloomberg News.
On Feb. 20, BioPulse made headlines again when it replaced its CEO and co-founder Jonathan Neville with director Reid Jilek. That day, it was also reported that cancer researcher Howard Soule disputed BioPulse’s claim that he joined the firm’s board.
BioPulse stock fell 46 percent to $2.94 on trading of 348,100 shares after news of the closure. The firm’s stock is traded on the over-the-counter bulletin board.
On Feb. 21, BioPulse stock closed at $2.24, down 25 percent from the previous day.
Jones said Feb. 21 BioPulse officials are considering selling office and medical equipment worth $650,000 (the figure came from an SEC filing) to Dr. Jesus Omar Sanchez Tiznaod, who owns the clinic.
Then again, BioPulse may continue to manage the clinic, Jones said.
March Announcement
Neville, who is now in charge of product development at BioPulse, said the firm will announce future plans next month.
Meanwhile, shareholders received a letter postponing a conference call because Jilek is traveling on business in Europe, BioPulse reported Feb. 21.
This marks the second time in two weeks the firm delayed a conference call with its shareholders.
Meanwhile, the Tijuana clinic, which was first opened in January 1999, and then moved to its current location in April, continues to operate with 50 employees, Jones said.
Under the agreement with doctors, BioPulse receives a management fee for its efforts and, in return allows the clinic to carry the BioPulse name to identify treatment programs.
The Tijuana clinic provides more than 90 percent of the firm’s revenue, according to SEC filings.
Revenue for the fiscal year ended July 31 was $3.1 million, Jones said.
Hundreds Treated
Since the clinic opened, some 200 patients have been treated with various experimental drugs, Jones said.
The majority of these patients received the unauthorized cancer treatment, Jones said. Critics contend the treatment, an insulin-based therapy that induces a coma, and others given to patients, may be harmful.
But Neville said the treatments are safe.
“The critics haven’t asked us what we are doing,” Neville said. “We haven’t had any injuries or harmed patients.”
Neither Neville nor Jones could explain how the insulin treatment is administered to patients and how it works.
Both men said they are working with the Mexican Health Department to obtain a license for the therapy.
Jones speculated the insulin therapy was given to patients in the United States years ago to treat depression. Neville didn’t confirm this.
He said as product manager he’ll be focusing on developing licensed technology from Brigham Young University in Utah , that is a diagnostic test to detect cancer in the blood.
Revamp As A Biotech
Jones said BioPulse wants to revamp itself into a biotechnology firm, developing diagnostic and therapeutic products for which it hopes to seek approval by the U.S. Food and Drug Administration.
“In order to focus on the new product exclusively, we would sell our interest in the clinic, so it wouldn’t be a distraction from the new product,” Jones said.
He added the name change to “California BioScience,” would reflect the new direction.
In a company statement dated Feb. 21, BioPulse said that “despite the attacks of critics,” it has “no debt,” “cash in the bank,” and “ongoing revenues.”
“We believe we will be able to continue the development of our technology and continue to expand our revenue and profitability,” BioPulse reported.
In an earlier news release, BioPulse said it was moving to a new 17,000-square-foot facility on Kenamar Drive in San Diego.
However, Dean Asaro, vice president of CB Richard Ellis, a San Diego commercial real estate broker, said the deal fell through.
Asaro said BioPulse refused to provide a letter of credit as requested by the landlord.
CB Richard Ellis is no longer in negotiations with BioPulse, Asaro said.
The president of BioPulse, Loran Swensen, did not return phone calls.