Throne Biotechnologies is raising via equity at a valuation of $120 million. The company has been primarily focused on research and development efforts as it prepares for clinical trials. It has yet to earn any revenue given its pre-launch status within the pharmaceutical industry. Based on its current stage of development, $120 million is a hefty valuation. However, the amount reflects the years of research and level of scientific expertise that have gone into creating the company’s technology. Overall, Throne Biotechnologies’ valuation is fair given its early positive results and established partnerships for additional testing and eventual monetization. 

Throne Biotechnologies operates in the broad-ranging US stem cell therapy market. In recent years, this market has seen significant growth through increased investment in research activities, new genetic testing techniques, popularity in regenerative medicine, and a rise in public-private partnerships. An estimated 355 million people globally have an autoimmune disease, 23.5 million of whom are American — meaning America makes up about 6.7% of the global population of people with autoimmune diseases. The US stem cell market has an estimated value of $69 million with an annual growth rate of 36.2% from 2019 through 2027. A market with such a massive growth rate is an incredible opportunity for companies and investors alike. 

It is important to note that embryonic stem cell treatment has historically raised ethical concerns, as some people are morally opposed to destroying embryonic cells for the sake of research. Throne Biotechnologies addresses this concern by using only CB-SC stem cells, which are harvested from donated human umbilical cord blood. This process also ensures immune acceptance, as CB-SC stem cells treat patient immune cells outside of the body.  

While the stem cell therapy market is currently small, its growth rate indicates that the market is set to explode. Throne Biotechnologies will benefit from this growth as an early mover. The company has many opportunities ahead to expand into additional niches, as its technology could be applied to many additional autoimmune diseases and practices where stem cell therapy is helpful. 

Throne Biotechnologies founder, President, and CEO Yong Zhao is an internationally acclaimed scientist and doctor who specializes in immunology and stem cell biology. Zhao was the first to discover CB-SC stem cells and is the inventor of Stem Cell Educator therapy. Today, he holds nine patents and is mentioned or directly involved with more than 60 medical publications. Past  roles at Hackensack Meridian Health and the University of Illinois at Chicago prepare him to lead Throne Biotechnologies through clinical trial testing and into the market. 

Theodore Mazzone is Throne Biotechnologies’ chief medical officer. Mazzone is an endocrinologist and diabetologist by trade with more than 40 years of experience as a clinical physician and scientist. He boasts involvement in more than 135 publications and has held leadership roles at highly regarded medical centers. His career of prestigious work has helped him recently earn a top doctor award from Castle Connolly.      

Throne Biotechnologies is also guided by an experienced board of directors, a business advisor, and a scientific advisor. The board of directors includes Gerald Ostrov and Lee Dudka, who have experience in pharmaceutical development and advising. Edward Ludwig serves as the company’s business advisor, Rona Weinberg as the scientific advisor, Yechin Zhao as the director of business development, and Henry Lozano as the vice president of global relations. 

Overall, Throne Biotechnologies’ founders, advisors, and supporting team members have noteworthy educational and technical experience. This team is well qualified to create life-changing medical technology. However, Throne Biotechnologies suffers from a lack of significant business expertise as well as sales, marketing, branding, and legal skills. Throne Biotechnologies has the right team to develop its stem cell therapy, but it’s unclear if this team can then pivot to running a successful medical technology company. 

Throne Biotechnologies seems to offer a unique treatment within the autoimmune disease treatment industry. Its Stem Cell Educator therapy re-educates defective white blood cells, which retrain communication lines within the body to treat the root cause of the autoimmune disease rather than simply manage symptoms. 

The company currently focuses on type 1 diabetes and alopecia areata. Other type 1 diabetes treatments require patients to inject insulin, while some alopecia and other autoimmune disease treatments suppress the immune system and leave patients vulnerable to severe side effects and a disease relapse if they stop taking their immunosuppressants. Throne Biotechnologies’ therapy limits risk for patients, as there are no foreign cells entering the body and no drugs or stem cell injections required. No foreign cells entering the body means there is no risk of the body rejecting the treatment. And no drug or stem cell injections limits risk of injection site infection and additional symptoms like redness, swelling, itching, and changes in the feel of skin at the injection site. According to 10 years of research conducted by key members of the Throne Biotechnologies team, the company’s re-educator therapy seems safer and more effective than current treatments. The company also claims that because it doesn’t use embryonic or animal stem cells, it sidesteps ethical, safety and religious concerns some patients have about more traditional stem cell treatments. 

Throne Biotechnologies’ patented Stem Cell Educator therapy has helped to reduce or stop insulin dosage and improve blood sugar control, insulin production, beta cell function, and even stop or slow degeneration during recent trials. Having secured this patent opens up possibilities for licensing and widespread adoption in the coming years. Throne Biotechnologies could eventually expand into treatment of many other autoimmune diseases. Overall, the company’s unique stem cell treatment gives it an advantage over the competition.

Throne Biotechnologies has made solid progress since its founding, especially within the highly regulated pharmaceutical industry. It has secured an operation facility, cleanroom, and research laboratory for clinical trials. To date, Throne Biotechnologies boasts a portfolio of seven international patents, including the discovery of CB-SC stem cells, clinical applications through its Stem Cell Educator therapy, and disruptive technologies for additional diseases. This progress and early focus on patenting could enable revenue generation through royalties and licensing fees paid by other territories and institutions. Meanwhile, the company could refine other aspects of its technology and service offering. 

In addition to a focus on patenting efforts, Throne Biotechnologies has been approved to conduct phase 2 clinical trials on its Stem Cell Educator therapy. This testing will explore the technology’s effectiveness in directly treating type 1 diabetes and alopecia areata. This approval and anticipated testing is a monumental step in the company’s journey to secure FDA approval. Interestingly, Throne Biotechnologies has already gathered some phase 1 and 2 data from testing in Spain, China, and the US. However, the company still must complete a full phase 2 US clinical trial according to FDA approval guidelines. Given past testing and data collection indicating positive results, Throne Biotechnologies is fairly confident that the testing data will be very similar and that securing FDA approval in the near future will be very doable. 

It is important to note that Throne Biotechnologies is still a pre-revenue company. As it previously raised $360,000 in 2020, the company has a proven ability to obtain some capital. However, with a high monthly burn of $40,000, the company could prove unsustainable if its technology does not progress through trials in a timely manner. 

Throne Biotechnologies is a very risky investment, particularly because it operates in the highly regulated pharmaceutical industry. The company also faces serious financial, performance, and price risks. 

Financially, Throne Biotechnologies might be considered to be behind other companies who can develop, launch, and gain traction immediately. Throne Biotechnologies faces testing, patenting, and regulatory hurdles before it can reap financial rewards from its technology. It is currently in a pre-revenue stage and suffers a monthly burn rate of a little more than $40,000. While the company has made progress to mitigate risk and gain FDA approval as quickly as possible, there are no guarantees as to its timeline, launch, or success within the market. The company will continue to need capital as it conducts clinical trials and brings its technology to market.

Performance risks are closely tied to financial risk, as the company’s market performance can’t be tested until it receives FDA approval. While testing so far has shown promising results, it is difficult to say how well Throne Biotechnologies will do within the market upon launch, how quickly it will be able to scale, and how it will manage other possible roadblocks. 

Finally, the company’s price risk comes from its limited financials, pre-revenue stage, and disruptive technology. Given its pre-launch status, it is difficult to determine if Throne Biotechnologies can achieve product-market fit and build a strong user base that trusts its technology. With this missing puzzle piece, the company might be overvalued or undervalued within the pharmaceutical treatment market. If it’s aggressively overvalued, Throne Biotechnologies will not be a strong investment opportunity for investors. 

Throne Biotechnologies’ biggest concerns are rooted in its early stage, regulatory hurdles, and limited market traction. The company has had to commit considerable time to developing its technology, and now it must achieve FDA approval assuming a successful phase 2 clinical trial.  Throne Biotechnologies will likely be challenged in new and possibly unexpected ways despite having completed past research and testing. If the company is unable to complete testing and the full trial, its Stem Cell Educator technology could fail to make it to the market. If the company is unable to launch, it could shut down. Additionally, if the company completes its trials but fails to gain FDA approval for a variety of reasons, it will have to rework its technology and begin trials again. This is a considerable time risk for investors, and there is no guarantee that its technology will be embraced by the market. 

If Throne Biotechnologies does complete testing and receives FDA approval, it is still possible that patients would be unwilling to use its stem cell education technology. Patients could be concerned with the ethics of using stem cells in general, disinterested in the long dialysis-like treatment, or wary of new technology. Investors face many uncertainties surrounding launch, product-market fit, and operational success — particularly as the Throne Biotechnologies team lacks business acumen.

Throne Biotechnologies is developing cutting-edge stem cell treatment technology, growing its team, and working toward FDA approval. Despite being in the heavily regulated pharmaceutical industry, the company has made strides to patent its technology, test to the best of its ability, secure a facility, and gain approval to begin FDA trials. This commitment to progress and growth should be encouraging for investors.

While there is competition in the pharmaceutical industry to treat autoimmune diseases, it is not a winner-take-all industry. If Throne Biotechnologies can gain FDA approval quickly, find product-market fit, and move into a licensing model quickly, its revenue could skyrocket shortly after launch. There’s also ample room for the company to develop products that treat other autoimmune diseases. 

Throne Biotechnologies is aiming to transform the way patients navigate autoimmune diseases through its patented Stem Cell Educator therapy. Its technology has the power to “re-educate” cells to reverse autoimmune diseases rather than simply treat their symptoms. Unlike existing insulin injections and immunosuppressant drugs, Throne Biotechnologies’ Stem Cell Educator therapy poses no risk of immune rejection, as no foreign cells enter the body. Additionally, the therapy requires no drugs or stem cell injections. The market is growing rapidly, and Throne Biotechnologies’ team is accomplished and supported by industry professionals. With a focus on clinical trials and securing FDA approval, the company could quickly attain commercial success and market adoption. 

Throne Biotechnologies is a young company, though, and it faces many regulatory hurdles. Being in such a highly regulated industry could prove to be challenging and limit immediate financial returns for investors. The company has yet to fully launch its service, meaning its performance and product-market fit are largely unproven. With no revenue or financial traction, investors can’t be sure they will receive favorable returns, especially considering the company’s high valuation. Finally, the team lacks business expertise. Overall, Throne Biotechnologies is a Neutral Deal. 

For questions regarding the KingsCrowd analyst report or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written by Carolyn Price, April 13, 2022.