Michael Hiltzik Columnist
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Lawsuit against stem cell clinic Stemgenex can move forward, judge rules

A San Diego federal judge on Tuesday cleared a lawsuit against a La Jolla clinic purporting to offer stem cell treatments for various diseases to move toward trial on fraud and misrepresentation claims.

Judge Antony J. Battaglia dismissed several claims brought by three former patients at the clinic, including an allegation that Stemgenex has misled patients because it has produced no evidence that its treatments have any scientific basis. He said it’s unclear that the plaintiffs would be able to show that Stemgenex’s representations about the effectiveness of its treatments are “actually false or misleading” because they haven’t shown that the clinic’s claims have “actually been disproved.”

But he allowed the case to proceed on grounds that Stemgenex misrepresented customer satisfaction statistics on its website. The clinic claimed 100% patient satisfaction, even after the plaintiffs themselves complained that they hadn’t seen any improvement in their medical conditions.

Stemgenex argued that the statistics referred only to customer satisfaction about their stem cell operation, not their medical condition. But Battaglia ruled that the plaintiffs could attempt to show at trial that the clinic presented these data “in a way that was likely to deceive or confuse reasonable customers.”

He wrote that the “plaintiffs’ allegations are sufficient to create the inference that the customer data was at the very least incomplete … and thus, false and misleading.”

Rita Alexander, the co-founder and chief administrative officer of Stemgenex, said in a prepared statement that the ruling left Stemgenex “extremely optimistic,” and added, “We believe sincerely and passionately in the adipose stem cell therapy we provide to our patients."

The plaintiffs’ attorney, Janice F. Mulligan of San Diego, said the judge “left in the guts of the case and that’s fine with us.” She said the issue of whether Stemgenex’s treatments have any scientific basis might be further explored through pre-trial discovery and might yet become part of the case.

Stemgenex is among hundreds of clinics around the country claiming to treat Parkinson’s, lung disease, multiple sclerosis, Alzheimer’s and many other conditions. Typically, the treatment involved extracting fat cells from the patient by liposuction, treating the fat to extract stem cells, and reinjecting those cells into the body to “regenerate” injured or deteriorating tissues.

The Food and Drug Administration has warned that these treatments have no scientific basis and can be dangerous. As The Times reported last year, many such clinics capitalize on the public’s impression that stem cells have become a sort of medical miracle. Scientists engaged in academic research in the field generally say that treatments for most conditions are still well short of clinical reliability.

Stemgenex charges about $15,000 for its treatments, which generally are not covered by health insurers. Stemgenex has declined to provide The Times with any scientific evidence that its treatments work.

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