Cardium Therapeutics Inc. (NYSE MKT: CXM)

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July 16, 2012 Issue

The Most Powerful Name In Corporate News and Information


With their Regenerative Medicine Product Generx® for Coronary Artery Disease in Phase 3 Registration Study for International Markets, Cardium Therapeutics Inc. is Leading the Evolution of a Revolution

Company Profile

Cardium Therapeutics is a health sciences and regenerative medicine company focused on the acquisition and strategic development of new and innovative bio-medical product opportunities and businesses with the potential to address significant unmet medical needs that have definable pathways to commercialization, partnering and other economic monetizations. The Company's asset-based business model acquires “diamond in the rough” products and technologies from big pharma, venture capital and institutional investors and entrepreneurs on favorable economic terms that have turnaround and repositioning potential. Cardium’s strategy is to create a portfolio of multiple opportunities for success that carry differing development pathways and addressable markets, have continuing news flow opportunities and monetization cycles, while avoiding reliance on any single technology platform or product.


Cardium's current medical opportunities portfolio includes: (1) Excellagen®, a recently FDA-cleared and marketed professional use advanced wound care product for the treatment of diabetic foot ulcers and a broad array of other dermal wounds; (2) Generx®, a disease-modifying regenerative medicine product candidate for patients with coronary artery disease, which is currently in a Phase 3 registration study for international markets; and (3) MedPodium Nutra-Apps®, a healthy lifestyle brand platform designed for today’s highly mobile and technology-driven millennial consumers. In addition, consistent with its long-term business strategy, Cardium continues to identify and evaluate businesses, product opportunities and technologies for potential acquisition on favorable economic terms.

Christopher J. Reinhard

Co-Founder, Executive Chairman and CEO

Mr. Reinhard is a co-founder of Cardium Therapeutics and has been the company’s Chairman and Chief Executive Officer since it began operations in 2006. Mr. Reinhard also served as Chairman and Chief Executive Officer of Cardium’s InnerCool Therapies operating unit, which Royal Philips Electronics acquired in July 2009. For almost 15 years, Mr. Reinhard has focused on the commercial development of cardiovascular growth factor therapeutics and the development of new and innovative medical products and technologies. Before co-founding Cardium, he was a co-founder of Collateral Therapeutics, Inc., and served as a director (from 1995) and President (from 1999) until its 2002 acquisition by the Schering Group A.G (Germany; now part of Bayer HealthCare). Following the Schering acquisition, he worked for Schering as Chief Executive of Collateral through 2004. Mr. Reinhard also served as Executive Chairman of Artes Medical from 2004 to 2008. Prior to founding Collateral, Mr. Reinhard was Vice President and Managing Director of the Henley Group, a publicly-traded diversified industrial and manufacturing group, and served as an executive officer of various public and private companies created by the Henley Group through spin-out and monetization transactions, including Fisher Scientific Group (now Thermo Fisher Scientific) and IMED Corporation, a medical device company. Mr. Reinhard received a B.S. in Finance and an M.B.A. from Babson College.


Cardium Therapeutics Inc.
12255 El Camino Real, Suite 250
San Diego, CA 92130
Phone: 858-436-1000

CXM-Print Version


Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – July 16, 2012


CEOCFO: Mr. Reinhard, would you give us a little history on Cardium Therapeutics; how you came to be and your vision?


Chris Reinhard: Cardium Therapeutics was formed to re-acquire and commercialize the advanced clinical stage product candidate, Generx, and the growth factor technology platform developed at Collateral Therapeutics, which we sold to Schering AG (Berlin) following the successful completion of the Generx Phase 2a clinical study. My colleagues and I had worked in concert with Schering AG under a strategic development agreement for over half a decade during which time we successfully shepherded Generx from initial scientific discoveries and pre-clinical studies by academic researchers at the University of California San Diego, into late stage clinical studies and commercial scale manufacturing. Based on Schering and Collateral’s over five-year clinical development investment in Generx, and Schering’s $160 million acquisition of Collateral, well over $200 million had been invested to clinically develop and commercially advance Generx prior to the formation of Cardium.


As Schering was advancing toward the eventual merger with Bayer AG, we engaged Schering in discussions to re-acquire the Generx product opportunity and formed Cardium as the financing vehicle to drive the transaction. We settled on an upfront payment of $5.0 million and a patent-based royalty payment based on commercial success. Cardium’s upfront acquisition value of $5.0 million represented only a fraction of the $200 million of invested capital and validated our thesis that we could acquire novel and compelling “diamond in the rough” products and technologies on very favorable economic terms from within non-strategic portfolios of big pharma, biotech companies and venture capital players. Of course, with our Generx acquisition, we had a competitive advantage, having worked on its clinical development for over a decade. We consider ourselves the leading experts in the field of DNA-based cardiac angiogenic therapy. Because of our efforts, Generx has always been in a leadership position in this important field, and my team and I are look forward to crossing the finish line in order to offer millions of patients an important new class of therapy. Following our acquisition of Generx from Schering, which validated our investment strategy, in relative short order we also cost-effectively acquired two venture-funded companies: (1) InnerCool Therapies, a catheter-based medical device product platform focused on therapeutic hypothermia, and its cGMP manufacturing operations; and (2) The Tissue Repair Company, a company focused on developing advanced wound care products.


CEOCFO: Where is Cardium Therapeutics today?


Mr. Reinhard: We have made significant progress with the development of products from these acquisitions. I believe through our creative and diligent efforts, we have engineered, clinically developed and commercially advanced new and innovative best in class medical products.


Following our InnerCool acquisition, we developed and received FDA clearance for a next generation, catheter-based therapeutic hypothermia medical device system (RapidBlue™), licensed and repositioned a companion surface cooling system (CoolBlue™), and established a new high capacity cGMP manufacturing system. In 2009, we sold our InnerCool operation to Phillips HealthCare, a division of Phillips Electronics, considered one of the largest electronics companies in the world employing over 100,000 employees across more than 60 countries.


From Cardium’s Tissue Repair Company technology platform, we completed the multi-center, U.S.-based Matrix clinical study, and received FDA clearance to market and sell Excellagen, an advanced wound care product for the treatment of diabetic foot ulcers and other dermal wounds. Excellagen is uniquely positioned as the only ready-use, syringe-based, professional use, formulated collagen for the treatment of diabetic foot ulcers that is specifically engineered for surgical debridement and platelet activation. As part of this commercialization process, we engineered a new manufacturing process with our contract manufacturer (now the U.K.-based Angel Biotechnology). We recently introduced Excellagen in the U.S. market to support physician-relationship building, provide sampling and assist in practice integration. Consistent with our strategy, and much like InnerCool as I just mentioned, we plan to strategically partner Excellagen to support a product launch and build a meaningful marketing and sales platform.


Likewise, we have made significant advances with our Generx gene therapy product candidate. Internationally, we recently initiated a 100-patient Phase 3 registration study, the ASPIRE study, in Russia as a new treatment alternative for patients with myocardial ischemia due to coronary artery disease who are considering mechanical interventions (like by-pass surgery and angioplasty and stents). 


We have also developed our in-house MedPodium Nutra-Apps® product line, a healthy lifestyle brand platform designed for today’s highly mobile and technology-driven millennial consumers. 


CEOCFO: Please provide some additional insight into Generx?


Mr. Reinhard: I consider Generx to be a remarkable product candidate. We are leading the evolution of a revolution as we focus on developing a new regenerative biological tool for physicians and their patients. Generx is a gene therapy for use by interventional cardiologists that leverages the body’s natural healing potential to grow microvascular blood vessels in the hearts of patients suffering from coronary artery disease. Generx is designed as a one-time, non-surgical treatment that delivers a DNA-based biologic to the heart using an angiographic catheter. Generx has been engineered to bind to certain receptors found in the heart, and turn on the localized production of FGF-4 proteins and other processes to stimulate the growth of microvascular circulation. The process by which these blood vessels are grown is “angiogenesis”. Angina chest pain occurs when plaque build-up progressively narrows the three major arteries of the heart requiring the use of anti-angina medications, angioplasty and stenting and coronary artery bypass surgery to provide relief. The ASPIRE study will represent the fifth clinical study under Generx's clinical development program that when completed will have enrolled more than 750 patients at over 100 medical centers throughout the U.S., Canada, South America, Western Europe and Russia. To learn more about Generx, please visit our popular YouTube video entitled “Generx Cardio-Chant.”


CEOCFO: Why did Cardium choose to start with Russia?


Chris Reinhard: Russia has a four-time greater cardiovascular death rate than in the United States. Life expectancy for a Russian male is 64 years old, so it is a very significant opportunity. We have a study approved for the United States as well. It is a Phase 3 program (Fast Track) but the registration pathway in the United States would be for patients who are refractory. These are end-stage patients and it is a small patient population, which is quite difficult to recruit. Therefore, we decided we would go forward into international markets and then come back to the United States. There is a very large patient population outside the United States and we think there is a greater opportunity there. As you know, the internationalization of medicine has become profound. Equally profound is what we now see in social media, whereas there are 900 million Facebook people worldwide there are only 200 million users in the United States. That leaves about 700 million outside the United States. With new therapies, such as our Generx product candidate, which is designed as a cost-effective, one-time non-surgical treatment for coronary artery disease, we now have the ability to reach larger populations that are now becoming much more aware of new and more progressive medical therapies. 


CEOCFO: When making an acquisition, how much is based on gut-feeling and how much is science?


Chris Reinhard: We have specific criteria upon which we base our decisions. First, there needs to be a substantial amount of capital already invested in the asset by smart people, such as institutional investors or pharmaceutical investors. Secondly, it needs to be in the field of health sciences or regenerative medicine. There has to be a proprietary position that we can understand and normally we require safety and some efficacy studies that can provide us insight into the mechanism of action of what makes these products and technologies work. We then have to develop a new commercialization pathway, determine how to re-energize the asset and what are the capital costs involved. Finally, the asset has to be interesting and have a significant impact on the practice of medicine.

CEOCFO: How many products do you look at annually?


Chris Reinhard: We typically see 10 or 20 different opportunities a year, maybe more.

CEOCFO: What is the financial picture like for Cardium Therapeutics to allow you to work on all the developing technologies and products?


Chris Reinhard: For a small cap company, we have no outstanding debt, good trading liquidity and access to capital through various mechanisms. We have an at-the-market financing in place, a shelf registration statement, and we are nationally listed. We use our equity to make acquisitions and then through the sale of assets and equity we are able to support our businesses. We are turning a corner in the company as we now have commercial products. Our Excellagen wound care product and in-house MedPodium nutraceutical platform are currently being introduced to the market and we look forward to increasing revenues and to the future sale or partnering of the various assets in our portfolio.

CEOCFO: Nutraceuticals is a crowded field; what is special about Cardium’s products?


Chris Reinhard: We took a good bit of time to understand how to compete in the nutraceutical space. We learned that nutraceuticals are typically sold to baby boomers, aged 45 to 65, who have health issues, metabolic issues, joint issues and so forth. They represent the largest population of nutraceuticals consumers. We are always looking for market niches and market opportunities. We determined that there was a large underserved consumer population who did not understand nutraceuticals. This is what we call millennial consumers and they are between the ages of 20-35. Millennial consumers do not have common physical or medical issues, such as heart health or joint problems. We also made note of the very successful nutraceutical product called Five Hour Energy®. It represents the first billion dollar nutraceutical in the marketplace. We started to study the energy arena and we developed Nutra-Apps, which are characterized by concentrated ingredients in small, easy to swallow capsules. The first Nutra-App was our Neo-Energy, which is under our MedPodium product portfolio and we later introduced Neo-Carb Bloc and Neo-Chill. We expect to introduce a sleep product, Neo-Sleep and other products over the next year. Our Nutra-Apps are designed as an impulse purchase item and we are initially marketing to convenience stores with plans to later broaden into the food, drug and mass marketplace.


CEOCFO: Going forward, will you build a sales force, partner or look to sell or license your products; what is your strategy?


Chris Reinhard: We do not build sales forces. We engineer, build, register, and identify market opportunities and bring capital to those market opportunities. We do not have the in-house skill set or financial resources to build large medical sales forces. We will use some distributors and establish a strategic partner relationship to market and sell our Excellagen product. We have already announced an initial strategic partner in South Korea for that international market.


CEOCFO: Why should investors pay attention to Cardium Therapeutics today?


Mr. Reinhard: Cardium Therapeutics is a health sciences and regenerative medicine company with over $250 million invested capital by our investors and other investors in our products and technologies. We have an FDA-cleared wound care product and a nutraceutical product line that we are now moving forward into the marketplace. In addition, we have our unique cardiovascular product candidate that is within 100 patients of completing its Phase 3 registration study.


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I consider Generx to be a remarkable product candidate. We are leading the evolution of a revolution as we focus on developing a new regenerative biological tool for physicians and their patients. - Christopher J. Reinhard does not purchase or make
recommendation on stocks based on the interviews published.