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HiGHliGHTs FROM THE BUSINESS OF REGENERATIVE MEDICINE COURSE By Mark Curtis, Business Development Analyst Centre for Commercialization of Regenerative Medicine (CCRM) Ask a student of any age what makes a course great and it always comes down to the teacher. Interesting subject matter helps, but a great teacher can make any subject worth staying awake for. The “students” who attended The Business of Regenerative Medicine course, in Toronto, in July 2014, were treated to more than 40 great “teachers” all sharing their vast knowledge of critical issues relevant to commercialization in the world of regenerative medicine and cell therapy (RM). As experts in their fields – whether they were discussing investing, drug screening, reagents/tools/manufacturing, tissue engineering/regenerative molecules or cell therapy – they all brought frankness, enthusiasm and insight to their talks. Here are some highlights from the 2.5 day course. Reimbursement and accelerated approval were popular themes. It is clear that demonstrating value to payers will be absolutely essential for the successful uptake of RM technologies. Activity in the RM space is picking up as clinical data continues to substantiate the use of live cells for myriad different disease areas and indications. Importantly, the global clinical pipeline shows a greater percentage of ongoing mid-stage RM studies versus early-stage, suggesting a bolus of commercial outputs could be on its way. Pharma is becoming more comfortable working in the RM space, having identified the major bottlenecks and gaps in the industry, which is reflected by increased partnering activity. Accelerated approval regulatory pathways are also contributing to Pharma involvement, as clearer and shorter paths to market are forged. Early-stage biotechnology companies will have to be creative, at least in the short-term, and take advantage of Pharma’s willingness to partner to secure funds for development. Last quarter saw an alltime historical low for first-time venture capital (VC) financings in the biotech space. The financing outlook for mid-to-late-stage companies is more promising, as these companies can still take advantage of the IPO (initial public offering) window that burst open in 2013, but this window is beginning to constrict.
Reimbursement and Accelerated Approval There was particular excitement around accelerated approval regulatory pathways that are being developed to facilitate the commercialization of live cell technologies. As Gil Van Bokkelen, chairman and CEO of Ohio-based Athersys put it, we’re experiencing a “magical era of accelerated approval.” But he also wonders about the fate of cell therapy technologies upon approval, and what is being done to link accelerated approval with reimbursement. This sentiment was echoed by cell therapy consultant Lee Buckler, who pointed to Korea as an example of a country that has been progressive with RM approval, having approved 16 therapies to date – the most of any country in the world – but has failed to support 24 BIOTECHNOLOGY FOCUS October/November 2014
technologies through reimbursement. So far, none are paid for or exported out of the country. Lee stressed the need to show effectiveness in the clinic, worried that if the necessary precautions are not taken we could wake up and find ourselves working in a “withering industry with a plethora of approvals.” It is evident that if these therapies are to gain market access, a dialogue between regulators and payers must be opened imminently. On the topic of reimbursement, we heard from Chris McCabe, a leading health economist based out of the University of Alberta. He laid out the path to de-risking reimbursement through valueengineered translation: completing therapeutic headroom analysis, value-based market access risk assessment, and efficient research and development design. The impact of reimbursement on RM companies could not be illustrated more clearly than in the case of U.S. company Organogenesis, which currently manufactures and markets the two dominant skinsubstitute products for chronic wounds – Apligraf and Dermagraft. Geoff MacKay, CEO, gave a heroic account of corporate survival following a decision by the Centers for Medicare and Medicaid Services (CMS), late in 2013, to bundle payment of cellular products for wound healing with acellular products. To get by, the company slashed $200 million from its cost-structure, cut competition by purchasing the primary competing product Dermagraft from Shire, and put an end to its R&D program across multiple indications to shift its focus to being a manufacturer of products solely for wound healing. Attendees also discussed the notion of conditional approval of cell therapies – essentially leap-frogging Phase 3 studies and launching a Phase 4 study post-marketing. Arnold Caplan, professor at Case Western Reserve University and founder of the course seven years
