The Rule of Halves

By: Richard Mills | Fri, Dec 2, 2011
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As a general rule, the most successful man in life is the man who has the best information

The World Economic Forum (WEF) and the Harvard School of Public Health report entitled "The Global Economic Burden of Non-communicable Diseases" estimates global diseases kill 36 million people every year and will cost upwards of US$47 trillion by 2030.

The World Health Organization's four biggest killers; cancer, heart disease, diabetes and chronic respiratory disease are dominant in non-communicable disease (NCD) mortality and morbidity. All four are increasing in prevalence and the cost of treatment is spiraling out of control.

"The numbers indicate that non-communicable diseases have the potential to not only bankrupt health systems but to also put a brake on the global economy." Olivier Raynaud, senior director of health at the WEF

Exactly what is Diabetes?

Diabetes is a condition in which blood sugar levels are too high.

Much of the food you eat is broken down into a simple sugar called glucose. In response to a rise in glucose levels after a meal the islets beta-cells in the pancreas read blood glucose levels and secrete insulin into the blood. Insulin acts to open the gates of cells allowing the glucose to move from the blood stream into the cells where it can be utilized for energy.

A Type 1 diabetes diagnosis means the pancreatic beta cells that read glucose levels and secrete insulin have been damaged or destroyed. Thus glucose cannot move from the bloodstream into the cells.

A Type 2 (insulin resistance) diabetes diagnosis is a far more common verdict for people than Type 1. Insulin resistance happens because of chronically elevated blood sugar and insulin levels. These elevated levels of sugar and insulin have the effect of "numbing" the cellular processes which move the sugar from the blood stream to the cells - the body cannot respond to the insulin "requests" to move blood sugar into the cells. Roughly 27% of the people who start out as Type 2 diabetics, will, in the future require insulin injections similar to Type 1 diabetics.

Between Type-1 and Type-2 patients with diabetes the total number of diabetics requiring insulin in just North America, is about nine million.

The Rule of Halves

The Rule of Halves is a restatement of the meaning of 'median' in statistics - in any population, and using any measure, half the people will be on one side of the median, half on the other.

Many diseases such as diabetes (and cancer, heart disease, high blood pressure) subscribe to the rule of halves:

Diabetic complications, which occur even in individuals taking insulin injections, include irreversible damage to the heart, blood vessels, eyes, kidneys, skin, feet and hearing. In individuals taking insulin injections to reduce blood sugar levels, severe hypoglycemia from a single injection of too much insulin, can cause organ failure, coma and death.

Pie Chart
The World Economic Forum (WEF) and the Harvard School of Public Health's report entitled "The Global Economic Burden of Non-communicable Diseases"

Diabetes is not considered a high mortality condition, but it is a major risk factor for other causes of death and has an extremely high attributable burden of disability, for example; 2% of people with diabetes become blind and roughly 10% develop severe visual impairment, 50% of people with diabetes die of cardiovascular disease.

Diabetes Key Facts

Islet-cell Transplantation

Islet cell transplantation is the only known therapy that can reduce or eliminate the side effects associated with diabetes.

Paul Lacey was a researcher at Washington University when, in 1972, he cured some diabetic rats by transplanting the islet cells from healthy rats into diabetic ones.

Over the next two decades researchers made hundreds and hundreds of attempts to apply the procedure to humans. Unfortunately no one was successful. By the early 1990's most scientists had come to the conclusion that islet-cell transplantation was a lost cause.

Dr. James Shapiro, Dr. Jonathan Lakey and colleagues from the University of Alberta in Edmonton developed the Edmonton protocol in the late 1990s.

The Edmonton Protocol is a method of implantation of pancreatic islets into the portal vein of the recipient's pancreas along with a steroid free anti-rejection drug regimen. The pancreatic islets are sourced/extracted from pancreases removed from recently deceased adult donors.

Each recipient receives islets from one to four donors. The islets are infused into the patient's portal vein, and are then kept from being destroyed by the recipient's immune system through the use of two immunosuppressant drugs as well as an antibody drug specifically used in transplant patients.

Dr. Shapiro and Dr. Lakey reported Edmonton protocol patient outcomes in the September 28, 2006, issue of the New England Journal of Medicine (NEJM): out of thirty-six patients transplanted, sixteen or 44 percent were insulin-independent after one year. Another 10 percent of patients were able to reduce the number of insulin injections they needed each day and the remaining 10 patients had totally rejected the transplant islet cells.

Since 2000 many more people have received islet transplants distributed across approximately 23 islet transplantation centers - by five years after the procedure fewer than 10% of all patients are free of daily insulin supplementation.

There are issues with infusion of islets into the portal vein, an immediate blood mediated inflammatory reaction (IBMIR) causes over 50% of islets to die within hours or days following infusion into the blood. Another issue is that the liver site is associated with islet transplant related procedural complications including catheter-induced hemorrhage and thrombosis. Additional inhibiting factors include difficulty in imaging the islets, an inability to remove the transplanted islets and the limited number of islet transplants a patient can receive.

A search has been on for an alternative site for islet transplantation as well as for an optimal medical device in which to implant the islets. Several subcutaneous devices have previously been developed for islet transplantation but from a preclinical and clinical perspective the results from these products have been generally disappointing.

Sernova Corp. (SVA.v) has developed the subcutaneous Cell Pouch™ specifically designed to overcome the issues with previous implanted devices for cell transplantation. Sernova's extensive preclinical safety and efficacy studies have shown this device to be both safe and effective, while being sparing of islets, supporting its design and function.

In September 2010, following an extensive review of Sernova's preclinical data, Dr. Shapiro MD, Ph.D. FRCS (Eng) FRCSC joined Sernova Corp's Scientific Advisory Board.

Sernova Corp. TSX:V-SVA is a Canadian-based medical device development company focused on chronic metabolic, neurological, and haematological diseases. Due to the enormous market and potential for significantly improved patient treatment, Sernova's first product focus is on diabetes.

The Standard of Care for patients with reduced or missing critical hormones or proteins, such as insulin, is often monitoring and injecting these proteins multiple times a day. Worldwide expenditures on insulin are estimated to be over $15 billion annually, and growing, while a patient track record of missing dosages and serious side effects results in US $150 billion a year in hospital costs.

Sernova's Cell Pouch System™ is a versatile, scalable credit card-sized device, made of FDA approved materials that provides a natural "organ-like" environment for therapeutic cells such as insulin producing islets for diabetics. Think of the Cell Pouch System™ as a potential natural insulin producing pump with the added benefit of fine-tuned glucose control. Placed under the skin in a simple inexpensive procedure it develops endocrine pancreas like characteristics when islets are placed into the device taking over normal glucose control. A key feature of the device is its ability to stimulate natural microvessel development, thought to be essential for long-term survival and function of therapeutic cells.

Sernova has presented evidence at leading scientific conferences demonstrating that the Cell Pouch System™ can be used as an effective platform for delivery of insulin from both autograft (self) and allograft (donor) islets to restore glucose control in stringent preclinical models of diabetes using a much lower dose of islets than currently used for the Edmonton Protocol. As a result, Sernova is currently contract manufacturing the Cell Pouch™ under strict guidelines in preparation for upcoming clinical trials.

At this time there is no approved device to house and protect therapeutic cells in the body.

In late October of 2011 Sernova entered into a collaboration with the Clinical Islet Transplant Program at the University of Alberta Hospital headed by Dr. James Shapiro.

The collaboration is intended to expand access to islet transplantation, for the treatment of diabetes, to a much wider base of patients using Sernova's Cell Pouch™

In addition to the upcoming clinical trials for diabetes Sernova plans to explore the additional utility of the Cell Pouch System™ as an enabling platform for a range of therapeutic cell types (including natural cells, stem cells and genetically engineered cells) with the potential to treat a number of chronic debilitating diseases (Parkinson's disease and Haemophilia are two candidates) representing broad unmet medical needs.


There is no market cycle for bio-technology drug or device stocks. The need is always there and demand is growing at an alarming rate. More and more people are receiving medical coverage while at the same time big pharma's number of patents and pipeline of new drugs has been drastically reduced.

Dr. Shapiro joining Sernova's advisory board, and the subsequent collaboration, is a huge confidence boost for the company's technology.

Sernova's management team has a very realistic end game plan - their objective is to add substantial value to existing assets and subsequently monetize them for the benefit of shareholders. This could take the form of an acquisition or such other mechanism whereby the value can be transferred to shareholders. It is not the objective of the company to build a large permanent, integrated pharmaceutical company.

Sernova Corp. TSX:V-SVA should be on every investor's radar screen. Is it on yours?

If not, maybe it should be.


Richard Mills owns shares of Sernova Corp. TSX:V-SVA

Sernova Corp. TSX:V-SVA is an advertiser on Richards website

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Richard Mills

Author: Richard Mills

Richard (Rick) Mills

Richard Mills

Richard lives with his family on a 160 acre ranch in northern British Columbia. He invests in the resource and biotechnology/pharmaceutical sectors and is the owner of His articles have been published on over 400 websites, including:, WallStreetJournal, USAToday, NationalPost, Lewrockwell, MontrealGazette, VancouverSun, CBSnews, HuffingtonPost, Beforeitsnews, Londonthenews, Wealthwire, CalgaryHerald, Forbes, Dallasnews, SGTreport, Vantagewire, Indiatimes, Ninemsn, Ibtimes, Businessweek, HongKongHerald, Moneytalks, SeekingAlpha, BusinessInsider, and the Association of Mining Analysts.

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