Celltex Therapeutics is on shaky ground once again as it struggles with key business partners Human Biostar and RNL Bio over money, lab procedures and human tissue. The Texas biotech firm provided Rick Perry with stem cells for his 2011 back surgery.
According to Celltex spokesperson Nurha Hindi, the dispute hinges on a $30 million licensing agreement the company secured to use technology created by RNL Bio, a Korean stem cell firm known for its role in creating the world's first cloned dog.
Through the arrangement, RNL was to provide laboratory "start up" services that included the building of a facility near Houston that would be transferred to Celltex. Court documents note that RNL is not registered to do business in Texas and thus fulfilled its lab services through Human Biostar — a company formerly headquartered in California under the name RNL Life Science.
The dispute hinges on a $30 million licensing agreement Celltex secured to use technology created by RNL Bio, a Korean stem cell firm known for its role in creating the first cloned dog.
"RNL is now saying that Human Biostar is a separate entity from RNL and that Celltex must pay Human Biostar for those same services, separate from RNL’s obligations under the licensing agreement to provide these same services, for fees in excess of the licensing fees," Hindi told CultureMap in an email.
On November 29, Celltex filed a Fort Bend County lawsuit against its two partners to gain possession of stem cells currently being held by Human Biostar. That same day, Human Biostar counter-sued in Harris County with a claim that Celltex owes more than $1 million in unpaid invoices.
Human Biostar's attorney, Lee Kaplan with Houston's Smyser Kaplan & Veselka, could not be reached for comment.
The background story
This summer and fall, Celltex made national headlines after the FDA inspected its Sugar Land facilities and issued a stern warning for infractions ranging from lackluster record-keeping to unclean manufacturing conditions.
The company issued a statement saying it would work with the agency but disagreed with its decision to regulate stem cells procedures as "drugs." During a recent Celltex-sponsored stem cell summit, Rick Perry said he also disagreed with the FDA's regulation decision.
As per a joint press release from Human Biostar and RNL Bio, the two companies invited their customers to the Sugar Land complex on November 21 to hear a "comforting message" about how the facility has revised its practices to satisfy the FDA. Curiously, Celltex was never named in the statement.
Celltex says Human Biostar is charging "exorbitant sums" to process and store stem cells, fees that go far beyond its $30 million agreement with RNL.
Eight days later, the three companies all filed legal paperwork.
Nurha Hindi of Celltex says Human Biostar is charging "exorbitant sums" to process and store stem cells, fees that go far beyond its $30 million agreement with RNL. Celltex, as legal custodians of their clients' biological material, wants Biostar to return all cells.
Human Biostar, meanwhile, wants its invoices paid and claims that "Celltex's demand for possession of the human stem cell products poses a significant and immediate risk of damaging and contaminating the products," according to the lawsuit.
In May, Human Biostar was slapped with a lawsuit claiming that it misrepresented the efficacy of its experimental stem cell procedures when it operated from an office at the Koreatown Galleria shopping center in Los Angeles.
Court documents posted on Health in the Global Village — a blog run by University of Minnesota bioethicist Leigh Turner, who filed the initial FDA complaint against the Celltex lab — list the plaintiffs as six elderly patients who underwent Human Biostar treatments in 2009 and 2010.
The plaintiffs say they were mislead by Human Biostar, which allegedly assured them that the surgeries "would cure not only all known ailments, but also would reverse aging, thereby improv[ing] overall health and quality of life and prevent future illness."