I told you so: Eat your Bioheart out

(UPDATED: See below.)

I’m not usually one to gloat — oh, who are we kidding? The news today that Bioheart, an oddball “adult” stem-cell company based in Sunrise, Fla., has slashed its IPO price range — essentially halving the company’s value — and fired its underwriters may not be exactly what I predicted when I hazed the company back in July— but it’ll certainly do for now.

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For Bioheart — which, I just realized, is backed by the noted biotech investor Dan Marino (yes, that Dan Marino) — today’s admission is basically the equivalent of seeing a Hail Mary pass in the last seven seconds intercepted and run back for a touchdown. It may or may not kill the IPO dead — I suspect it will — but it’s definitely a huge vote of no-confidence in a company that looked pretty shaky to begin with. (The company’s latest SEC filing is here.)

Bioheart’s main claim to fame is MyoCell, a stem-cell treatment intended to reverse the damage that oxygen starvation causes in heart muscle during a heart attack. The company harvests precursors to muscle cells called myoblasts from a patient’s thigh, cultures them for 21 days and then injects them into scar tissue in the heart. This is not too different from other attempts to use various types of stem cells to repair the heart, although none of them have actually ever been proven to work.

For MyoCell, the picture is even murkier. None of Bioheart’s data so far seems to suggest the treatment does what it is supposed to do, and the company can’t even offer a plausible theory as to why it should work. (A 40 patient trial called Seismic is expected to yield some fresh results by the first quarter of next year.) Worse, the existing data suggests that MyoCell might actually be contributing to declines in heart efficiency, multiple organ failure and irregular heartbeats. On top of all that, Bioheart’s primary patent on MyoCell is set to expire the year after next, giving the company exactly no commercial protection should it ever bring MyoCell to market.

So the only surprise in today’s meltdown is that Bioheart apparently expects to carry on with its IPO, which was initially scheduled to hit the market last week. Odds seem good to me that the company will still pull the offering — it’s kind of hard to recover from a screwup like the one the company has effectively just admitted, and the smell of desperation in the new IPO terms is almost palpable. But who knows — maybe they can still find some investors, somewhere, who believe in stem cells so much that they’ll be willing to set aside their better judgment and pony up.

Bioheart now plans to offer 4.2 million shares at a price of $6 to $8 apiece. Counting the overallotment, that could yield the company a maximum take of $38.3 million, which is fairly pathetic by recent standards. Pricing at $8 would value the company at $140 million, or almost exactly half of the $270 million market cap Bioheart might have fetched before the cataclysm. (The company previously planned to sell as many as 4.1 million shares at $14 to $16 apiece, for a maximum take of $65.8 million.)

According to VentureWire (subscription required), Bioheart has raised $51 million from investors that include Ascent/Meredith Asset Management, Getz Medical, Guidant, Tyco Ventures, Getz Bros., St. Jude Medical, Advent-Morro-Guayacan Private Equity Fund, Astri Group, Dan Marino Investments, Minnesota Bio-Med Partners, New World Angels, Presidential Capital Partners and individuals.

UPDATE: On Feb. 19, 2008, Bioheart finally made it across the goal line in what is arguably one of the worst IPOs ever — it netted the company only $1.5 million, of which $600,000 came directly from Bioheart founder Henry Leonhardt. See our coverage here.