THE LAST WORD

By Michael H. May

Taking The Pulse –

Indicators of Strength and Growth in the RM Industry

I am often asked whether Regenerative Medicine has truly emerged as a viable industry. It has been almost 30 years since the launch of the industry’s pioneering companies. Are we there yet? I thought we were there in 2000 when Time Magazine issued the prophecy that “Tissue Engineer” would be the career of the future. Unfortunately, the hype generated by the financing of those Michael H. May, President & CEO, Centre for Commercialization of Regenerative Medicine (CCRM) pioneering companies and the promise of engineered organs (e.g., “heart in a box”) would soon be corrected by a sharp decline in the industry, punctuated by the bankruptcies of those pioneering companies and ethical/political debates surrounding the “savior” of this emerging industry – the embryonic stem cell.

That correction has led to the (re)emergence of what we now refer to as Regenerative Medicine (RM). Today there are thousands of cell therapy trials underway globally. And what happened to those pioneering therapeutics companies? They now sell products focusing less on science than on manufacturing, distribution and quality systems.

Of course, science still underlies the industry, advancing at an incredible pace and earning the sector a Nobel Prize last year. There are, however, several non-scientific indicators that commercializing RM in North America is approaching a “tipping point.”

More Funding is Being Directed to Translation

The California Institute for Regenerative Medicine (CIRM) has transitioned in recent years from funding basic R&D and infrastructure to funding “disease teams,” which have strict timelines for achieving IND status around lead clinical applications.

In addition, CIRM is proposing so-called Alpha-Clinics to educate the public on the state of stem cell therapies, deliver approved stem cell therapies to patients, and enable clinical trials of experimental treatments.

One of the core areas of focus for my organization, the Centre for Commercialization of Regenerative Medicine (CCRM), is on technologies and processes that enable cell manufacturing. If even a fraction of the therapies currently in human trials are successful, there will be significant bottlenecks in scaling to commercial levels.

Industry Organizations and Consortia are Growing

The Washington-based Alliance for Regenerative Medicine (ARM) has grown to over 150 member organizations. ARM promotes the industry to government, hosts several key annual events and leads standing committees that address industry-wide issues, such as regulation.

CCRM has built a consortium of 30 plus companies from all sectors of the industry that co-invest in technology development, provide market input in support of due diligence and stand as ready receptors for technologies emerging from CCRM’s development pipeline.

Deal-Making is Increasing

Cephalon’s investment in Mesoblast helped create the world’s largest RM cell therapy company. During the past year, several large pharma and device companies made acquisitions, investments or closed licensing deals, which enhanced the flow of capital within the sector. ARM’s 2013 Annual Report stated that the total investment in RM companies in 2012 exceeded $1.2 billion, with 75 per cent of this investment coming in the form of equity investment.

According to Toronto’s Lumira Capital Life Sciences, more money was raised in the biotech industry in the first half of this year through IPO than in any year since 2007. The recent IPO of RM industry leader Cellular Dynamics and Fate Therapeutics’ filing for IPO indicate that RM companies are participating actively in the current flurry of biotech investing.

Canadian partners in CCRM’s industry consortium continue to progress. Toronto-based Tissue Regeneration Therapeutics (TRT) closed a multi-million dollar raise during the summer, Stem Cell Therapeutics merged with Trillium Therapeutics in April 2013 and STEMCELL Technologies continues to grow its reagent business globally.

ARM’s Annual Report included an unweighted stock performance index of 29 RM companies with market caps greater than $10 million. Comparisons against the S&P500 and NASDAQ Biotech indices indicate that RM companies trended well against other biotech companies from March 2012 to March 2013.

If there is any doubt that RM is attracting investor interest, the First Regen Med Investor Day, organized by ARM in NYC, attracted over 300 investors – double what was expected.

The Industry Gets its First Stem Cell Therapy Approval

Health Canada approved Osiris’ Prochymal, in 2012, for acuteGvHD in children unresponsive to steroids. While approximately 12 cellbased products have been approved in regulated countries since 2008, this represented the first approval of a stem cell-based therapy. Earlier this year, CCRM and other stakeholders led a series of workshops to address the lack of consensus and standards associated with mesenchymal stromal cell (MSC)-based products. In September, a second workshop, led by CIRM, looked at the regulation of cell-based therapies in Europe, the U.S., Canada and Japan. I believe that close ties to the leading activities in the sector will create the right environment for bundling and launching the next wave of therapies and new companies in RM over the next five to 10 years. Certainly, the industry doesn’t want to wait another 30 years to realize returns on the current explosion of discoveries in the field.

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