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new company, NeuralStem....


Neuralstem set for OTC listing
Rockville firm working to develop treatments using fetal stem cells
By Tricia Bishop
Sun reporter
Originally published December 21, 2006

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The five-person company, founded a decade ago, has developed technology to isolate and multiply neural stem cells in commercial-sized quantities as well as control their development into particular cells, which it believes could be used to treat various diseases, including Alzheimer's.

Garr plans to file a investigational new drug application with the Food and Drug Administration early next year and, soon after, hopes to begin clinical trials of a treatment for ischemic spastic paraplegia, a form of leg paralysis affecting about 10,000 people in the United States.

Neuralstem has already shown the ability to reverse such paralysis in certain animals. But human trials are costly, and funding for stem cell companies - particularly those based on the young and controversial science of embryonic stem cells - has been spotty.

Venture capitalists prefer to wait for drugs to develop before investing, and federal sources have been steering clear of projects perceived as ethically controversial.

The public, however, seems to support the work - at least in attitude. A report in August from the Pew Research Center in Washington says 56 percent of the population favors stem cell research of all kinds.

"The appetite's there in the public, so we should go directly to the public," said Garr, an attorney who co-founded the company with Chief Scientific Officer Karl Johe. Johe developed Neuralstem's technology while working at the National Institute of Neurological Disease and Stroke within the National Institutes of Health.

"It's exciting to have more shareholders and investors who believe in our story," Johe said of the stock offering.

The company received its proceeds from the stock sale in March, before it even filed plans to become public with the Securities and Exchange Commission. Typically, businesses register with the SEC, then sell their shares in an initial public offering.

Neuralstem instead sold $5 million worth of shares at a dollar apiece, along with warrants potentially worth $8.75 million, in a private placement and then registered with the SEC. The company won't receive any funds from investments made from resale of its stock today.

"[The method is] atypical, but it's not the first of its kind," said Steve Chizzik, whose New Jersey firm is handling Neuralstem's investor relations. "It's more expeditious."

At least one financial analyst expects a strong interest in shares traded today.

"This stock might trade substantially higher" than anticipated, financial analyst and former University of Virginia professor Michael A. Berry wrote on his investment Web site last week.

He based the prediction on the types of questions analysts asked of Neuralstem at a New York investor conference last month and the "significant potential" for the company to treat diseases such as Parkinson's.