On Thursday, May 21, 2015 shares of Neostem (NBS) surged as much as 26% after the company reported that it had received a huge grant from the California Institute For Regenerative Medicine -- CIRM. The CIRM is an independent scientific body that invests in game changing potential therapies. The amount of grant money that NeoStem received was $17.7 million upfront, one of the largest grants CIRM has made, and it will use that to run a large phase 3 trial. The stock subsided a bit Friday but still ended the week up almost 23% over Monday's opening price.

The therapeutic candidate from NeoStem is known as NBS20 and it uses a patient's own cancer cells to attack other cancer cells. That is ground breaking because other immunotherapy biotechs, as they are known, train the immune system to kill cancerous cells. This is the first time that a breakthrough has been discovered in which NBS20 can train cancer cells to attack themselves. 

When cancer cells start off in the body they are known as "cancer stem cells" or cancer initiating cells. These cells are responsible for the initial cancer cell proliferation -- cancer cells dividing spreading through the entire body. This technology from NeoStem has already proven to perform well in human patients in a phase 2 clinical trial. 

In the phase 2 clinical trial with NBS20, patients with metastatic melanoma showed a 2-year survival of 72%. On the other hand patients who took a placebo compound only showed a 2-year survival of of 31%. First, as you can see the overall survival -- OS -- was more than doubled in the NBS20 treatment group compared to placebo. Second, these patients with metastatic melanoma are in stage III to stage IV of the disease where it is far more difficult to treat. 

NBS20 has already been granted Fast Track and Orphan Drug Designation from the FDA. In addition the EMA has classified NBS20 as an Advanced Therapeutic Medicinal Product. If the Phase 3 trial ends up showing efficacious results in terms of overall survival for the metastatic melanoma patient population, then the company expects that it could be a breakthrough medicine possibly approved by early 2018.