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The Business | 3 Months Ended
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Mar. 31, 2015
The Business [Abstract] |
Nature of Operations [Text Block] | The Business Overview NeoStem, Inc. (“we,” “NeoStem” or the “Company”) is a vertically integrated, clinical-stage biopharmaceutical company that is pursuing the preservation and enhancement of human health through the development of individualized cell-based therapeutics that leverage the body’s natural ability to heal and fight disease. Our diversified pipeline and unique capabilities for innovative, cost-effective and efficient in-house development set us apart in this emerging industry as we work to fundamentally change the treatment paradigm for several serious diseases. In the coming weeks, NeoStem intends to change its corporate name and brand identity. The new corporate name is another step in the evolution of the Company, emphasizing our unique integrated approach to cell therapy and our therapeutic development focus on immune therapy. Our most advanced clinical program is based on our dendritic cell/cancer cell technology. It is focused on the development of an innovative cancer treatment that is designed to target the cells responsible for tumor growth and metastasis, known as cancer or tumor initiating cells (CICs), using purified CICs from a patient’s own tumor as an antigen source to induce or enhance an anti-tumor immune response in the patient. Our lead product candidate based on this platform technology, NBS20, targets malignant melanoma as an initial indication. NBS20 is being studied in patients with recurrent Stage III or Stage IV metastatic melanoma. The program has been granted Fast Track and Orphan designation by the Food and Drug Administration (FDA) as well as Advanced Therapeutic Medicinal Product classification by the European Medicines Agency (EMA). The protocol for the Phase 3 study, known as the Intus study, is the subject of a Special Protocol Assessment (SPA) by FDA. Our SPA letter states that our Phase 3 clinical trial is adequately designed to provide the necessary data that, depending on outcome, could support a Biologics License Application (BLA) seeking marketing approval of NBS20. This protocol calls for randomizing 250 patients. Patient screening began in the first quarter of 2015 and randomization of the first patient was announced in April 2015. Interim analysis of the data is targeted for the fourth quarter of 2017. We are also evaluating other clinical indications for which we may advance this program, including ovarian, liver, colon and lung cancers. We are also developing therapies that are designed to utilize CD34 cells to regenerate tissue impacted by ischemia. Ischemia occurs when the supply of oxygenated blood in the body is restricted, causing local tissue distress and death. Results of ischemia include conditions such as acute myocardial infarction (heart attack) (AMI), chronic heart failure (CHF) and critical limb ischemia (CLI). We seek to improve oxygen delivery to affected tissues through the development and formation of new blood vessels. Initial investigations for this therapeutic platform have focused on NBS10, our most clinically advanced product candidate in our ischemic repair program. NBS10 is designed to prevent heart failure and major adverse cardiac events following a severe heart attack, known as an ST segment elevation myocardial infarction (STEMI). At the American Heart Association’s Scientific Sessions in November 2014, we reported six month data from the primary analysis of our 161 patient PreSERVE AMI study, and at the American College of Cardiology's 64th Annual Scientific Sessions and Expo in March 2015, we presented updated safety and exploratory efficacy results from the 12 month follow-up for the PreSERVE AMI trial. Our interim conclusions based on the six and twelve month results, which represent twelve and eighteen months median of patient follow-up respectively, are that (i) there is a CD34 does-dependent trend in reduction of major adverse cardiac events (MACE), including a signal for a mortality benefit based on the 12 month data; (ii) there is a signal for reduction in frequency in serious adverse events (SAEs) in higher dose groups based on the 12 month data; (iii) there is a CD34 cell dose-dependent trend in improvement of left ventricular ejection fraction and reduction in infarct size; and (iv) there is no correlation between experimental endpoint of perfusion and treatment. We expect to complete the PreSERVE AMI study as defined through the final three-year follow-up and, in the meantime, plan to refine our development plan in consultation with our medical advisory board and relevant authorities in the second half of 2015. We also are evaluating other clinical indications that involve ischemia into which we may advance this program, including CLI and CHF. We are also developing a therapy that is designed to utilize Regulatory T Cells (Tregs) to treat diseases caused by imbalances in an individual's immune system. This novel approach seeks to restore immune balance by enhancing Treg cell number and function. Tregs are a natural part of the human immune system and regulate the activity of T effector cells, the cells that are responsible for protecting the body from viruses and other foreign antigens. When Tregs function properly, only harmful foreign materials are attacked by T effector cells. In autoimmune disease, it is thought that deficient Treg activity permits the T effector cells to attack the body's own tissues. We have received a letter from the FDA stating that we may proceed on a Phase 2 study of NBS03D, a Treg based therapeutic being developed to treat type 1 diabetes mellitus (T1DM) in adolescents, and we plan to initiate the trial in late 2015 or 2016 depending on resource availability. We are evaluating other clinical indications into which we may advance this program, including steroid resistant asthma, multiple sclerosis, chronic obstructive pulmonary disease, inflammatory bowel disease, graft versus host disease, lupus, and rheumatoid arthritis. . Finally, we are actively exploring means to facilitate development in Japan, including filing an IND in Japan for one or more programs under Japan’s regenerative medicine law. Japan’s regenerative medicine law enables an expedited path to conditional approval for regenerative medicine products that show sufficient safety evidence and signals of efficacy. Potential indications for this unique opportunity include, among others, our immune-oncology program in liver cancer and our ischemic repair program in CLI. We believe that cell-based therapies have the potential to create a paradigm change in the treatment for a variety of diseases and conditions and we are evaluating other programs that we view as holding particular promise, including an aesthetics program for a topical skin application and a very small embryonic like (VSEL TM) stem cell program for the treatment of retinal degeneration, bone restoration and wound healing. Through our wholly owned subsidiary, Progenitor Cell Therapy, LLC ( PCT), we are recognized as a world industry leader in providing high quality innovative and reliable manufacturing capabilities and engineering solutions (e.g., process development) in the development of cell-based therapies. We currently operate three facilities qualified under Good Manufacturing Practices (cGMPs) in Allendale, NJ, Mountain View, CA and Irvine, CA, and are poised to expand our facilities internationally. In addition to leveraging this core expertise in the development of our own products, we partner opportunistically with other industry leaders who recognize our unique ability to significantly improve their manufacturing processes and supply clinical and commercial material. We look forward to further advancement of our cell-based therapies to the market and to helping patients suffering from life-threatening medical conditions. Coupling our development expertise with our strong process development and manufacturing capability, we believe the stage is set for us to realize meaningful clinical development of our own proprietary platform technologies and manufacturing advancements, further positioning NeoStem as a leader in the cell therapy industry. We anticipate requiring additional capital in order to fund the development of cell therapy product candidates and to grow the PCT business. To meet our short and long term liquidity needs, we currently expect to use existing cash and cash equivalents balances, our revenue generating activities, and a variety of other means, including the continued use of a common stock purchase agreement with Aspire Capital (see Note 15). Other sources of liquidity could include additional potential issuances of debt or equity securities in public or private financings, additional warrant exercises, option exercises, partnerships and/or collaborations, and/or sale of assets. In addition, we will continue to seek as appropriate grants for scientific and clinical studies from various governmental agencies and foundations. We believe that our current cash, cash equivalents and marketable securities balances and revenue generating activities, along with access to funds under our agreement with Aspire Capital, will be sufficient to fund the business through the next 12 months. While we continue to seek capital through a number of means, there can be no assurance that additional financing will be available on acceptable terms, if at all. If we are unable to access capital necessary to meet our long-term liquidity needs, we may have to delay or discontinue the acquisition and development of cell therapies, and/or the expansion of our business or raise funds on terms that we currently consider unfavorable. Basis of Presentation The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying Consolidated Financial Statements of the Company and its subsidiaries, which are unaudited, include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of March 31, 2015 and the results of its operations and its cash flows for the periods presented. The unaudited consolidated financial statements herein should be read together with the historical consolidated financial statements of the Company for the years ended December 31, 2014, 2013 and 2012 included in our Annual Report on Form 10-K for the year ended December 31, 2014. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company makes critical estimates and assumptions in determining the fair values of goodwill for potential goodwill impairments for our reporting units, fair values of In-Process R&D assets, fair values of acquisition-related contingent considerations, useful lives of our tangible and intangible assets, allowances for doubtful accounts, and stock-based awards values. Accordingly, actual results could differ from those estimates and assumptions. An accounting policy is considered to be critical if it is important to the Company’s financial condition and results of operations and if it requires management’s most difficult, subjective and complex judgments in its application. Reclassifications Certain reclassifications have been made to the Consolidated Financial Statements and Notes to the Consolidated Financial Statements for the three months ended March 31, 2014 to conform to the presentation for the three months ended March 31, 2015. Principles of Consolidation The Consolidated Financial Statements include the accounts of NeoStem, Inc. and its wholly-owned and partially-owned subsidiaries and affiliates as listed below.
Entity |  | Percentage of Ownership |  | Location
NeoStem, Inc. |  | 100% |  | United States of America
NeoStem Therapies, Inc. |  | 100% |  | United States of America
Stem Cell Technologies, Inc. |  | 100% |  | United States of America
Amorcyte, LLC |  | 100% |  | United States of America
Progenitor Cell Therapy, LLC (PCT) |  | 100% |  | United States of America
NeoStem Family Storage, LLC |  | 100% |  | United States of America
Athelos Corporation (1) |  | 96.6% |  | United States of America
PCT Allendale, LLC |  | 100% |  | United States of America
NeoStem Oncology, LLC |  | 100% |  | United States of America
(1) As of March 31, 2015, Becton Dickinson's ownership interest in Athelos was 3.4%.

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