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Originally published December 23, 2008 at 12:15 PM | Page modified December 24, 2008 at 9:03 AM

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Troubled CellCyte biotech shuts down

CellCyte Genetics, whose market value briefly put it among the region's biggest biotech firms last year, has shut down — and hasn't...

Seattle Times business reporter

CellCyte Genetics, whose market value briefly put it among the region's biggest biotech firms last year, has shut down — and hasn't been able to pay rent on its Bothell headquarters.

"We presently do not have sufficient cash to fund our operations, and have curtailed substantially all activities," the company said in a delayed quarterly report, filed Monday with the Securities and Exchange Commission.

CellCyte said it had $5,734 in cash at the end of September, and for duration of the third quarter, it couldn't pay the lease on its facility. The company said it was talking with the landlord to renegotiate the lease and to find subtenants to take over parts of the building. The landlord is holding on to a $44,000 security depost. It's been a hard fall for CellCyte. The fledgling stem-cell research company, whose shares traded over-the-counter and in the Frankfurt Stock Exchange, saw its value soar past $400 million last year in the wake of a spamming campaign paid for by one of its main shareholders. The shareholder, a Vancouver, B.C.-based stock promoter named G. Brent Pierce, was then under a 15-year ban by the B.C. Securities Commission.

CellCyte's shares plummeted in January after The Seattle Times published stories describing the stock-promotion efforts and inconsistencies in the résumé of CellCyte Chief Executive Gary Reys.

The company faces shareholder lawsuits and is under a formal investigation by the SEC. Last August, the company said it had fired some employees and stopped paying salaries to those who remained.

Its technology to make stem cells home in on damaged organs, which promoters hyped in colorful brochures, also turned out to be a disappointment. The latest filing said that in July the company recorded a $569,000 loss on the licenses and patents it obtained from the Veterans Administration, which developed the technology.

As of Tuesday, CellCyte was worth about $9.5 million. From its inception in 2005, the company has lost $10 million.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com

Copyright © 2008 The Seattle Times Company

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