Shocking News in the World of Medicine

Two weeks ago, General Electric shocked me.

It was during a presentation in New York. Stephen Minger, the chief scientist of cellular sciences for General Electric’s Life Sciences division, walked up to a lectern and calmly said, “GE is a stem cell company.”

Amusing, I thought.

But I was stunned when he went on to say that GE, the company I think of when I think of locomotives and jet engines, had placed “a really big bet on embryonic stem cell technology.”

Clearly, this isn’t your grandfather’s GE.

And it is not staffed by guys in white shirts and red power ties a la former GE CEO Jack Welch.

Dr. Minger’s a perfect example.

Dr. Minger will shock you and bring a smile to your face. He has a graying, lightly braided ponytail that extends down his back to below his belt line.

GE’s younger, hipper, and making a huge bet on where medicine is going.

But this isn’t a bet on traditional stem cell therapies.

GE’s not cloning sheep or growing hearts for transplants.

Instead, GE has a plan to make drugs going to market safer, and potentially cheaper, using stem cells.

A Whole New World

For the last 20 years, we’ve basically been human guinea pigs for Big Pharma and the FDA.

Despite rigorous FDA testing, dozens of drugs prove toxic in the real world.

Just take a look at the chart below:

Cardiotoxicity

These are all drugs that were yanked off the shelf because they proved to be toxic to human hearts despite the fact that they sailed through Phase 1, 2 and 3 clinical trials and were FDA approved.

Collectively, they cost pharmaceutical companies tens, if not hundreds, of billions of dollars. Minger estimates that each drug on this list cost $2-5 billion just to get through clinical trials.

Not only did the companies lose the return on capital invested, but these drugs produced legal costs when those who suffered from them sued.

So it’s no small statement when Minger says: “Pharma cannot afford this anymore.”

GE realized, as Minger said, “that pharma is using really antiquated tools to determine toxicity” of drugs, including studying the drugs in animals before they reach human trials.

“Frankly, it just fails too often.”

The answer?

Test drugs against human stem cells, instead of animal cells.

To test if a drug was toxic to, say, heart cells, GE developed heart stem cells that were the same as your heart when you were in utero.

Then it continued to develop those cell lines until they matured into adult human cardiomyocytes. “We are doing this on an industrial scale,” Minger said.

“No one anywhere else in the world is doing this on this scale.”

So far, GE Life Sciences has made “something on the order of 300 batches of these cells,” Minger says. And they can be frozen and shipped anywhere. “These cells are really durable.”

They develop in a lab to be just like cells in human hearts: They look like human heart cells. They act like human heart cells. And they seem to be the answer to the dog, rabbit and mouse problem that has allowed so many drugs to get to market without a whisper of toxicity.

And they work. All the drugs on the chart showed up as toxic in these cells.

That’s good news for patients, and good news for Big Pharma, who will save billions of dollars in lawsuits and testing expenses every year.

And GE has shared all these findings with the FDA. The plan is to slowly convert the pharmaceutical industry to using stem cell testing to discover toxicity to drugs long before the expense of putting them through human trials.

“This is information you can give pharma years and years before they get into Phase 1,” Minger says. And he believes it will become mandatory soon: “You’re going to have to use human cells to assess toxicity or your drug will not get approved.”

He sees an especially useful role for the technology with cancer drugs, which often do not cause toxicity in animals but are later found to be deadly in humans.

This is a big leap.

For 40 years, the FDA has been testing drugs the same way. And the level of complaints about the cost and effectiveness of its methods has been increasing.

Today, we’re on the verge of getting lifesaving drugs on the market sooner and cheaper.

Stem cells are the answer.

But there’s a surprising twist to this situation. The company to invest in is not General Electric. There’s a $4 company that could be a much bigger winner in this trend.

Regards,

Stephen Petranek
for The Daily Reckoning

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