Stem Cell Therapy
Stem cell technologies are of great interest to investors and scientists because of their purported potential to offer therapies for many diseases. In 2004 California voters gave the go ahead to provide $3 billion in funding for embryonic stem cell research. Seven years later after $1 billion in project funding through the California Institute for Regenerative Medicine no major milestones have been found nor clinical trials initiated.
Many companies have significant funding and several have reached the clinical stage using adult stem cells. Deals and collaborations are de rigueur. Cephalon announced in January that it was acquiring a 20% stake in the Australian stem cell company Mesoblast to develop treatments for cardiovascular and CNS disorders. Mesoblast has an ongoing Phase II trial using its Revascor adult stem cell product against for congestive heart failure. Cephalon plans to invest $350 million into the company including licensing, equity, and R&D milestones.
Henry McCusker, director of research and founder of Scimitar Equity, sees strong investment in R&D. He pegs adult stem cell research at $2.4 billion. McCusker believes the companies to watch are Geron, Cytori, Biotime, Pluristem, and Osiris.
Geron’s ongoing U.S.-based stem cell clinical trial is evaluating pluripotent human embryonic stem cells for treatment of spinal cord injury. Another Geron product candidate is in the preclinical stage utilizing cardiomyocytes for heart disease. The company has spent over $600 million since inception developing IP and its anticancer telomerase technology.
Last year’s financial results showed over $175 million in cash but losses of over $100 million. In the stem cell sector, cash is king as exhibited by the flurry of financings over the last four months. Check balance sheets and burn rates before investing.
Pluristem recently completed at $38 million public offering and has a platform technology PluriX (placental expanded cells) for growing adherent stromal cells that mimic a bone marrow environment. It is proceeding to a Phase II/II trial for critical limb ischemia.
Biotime sells stem cell products for regenerative medicine research and has a good cash position of about $20 million. Cytori, which utilizes adipose-derived and regenerative cells for heart disease and regenerative medicine, raised $20 million in October 2010 and has $60 million in cash (minus Q4 burn), including a $10 million partnership with Astellas focused on liver disease. Revenues are expected to be in the $12–$15 million range in 2011.
Osiris Therapeutics’ lead biologic product, Prochymal, utilizes mesenchymal stem cells from healthy adult donors and is in Phase III trials for acute and steroid refractory graft vs. host disease on an FDA fast track. Prochymal is also in Phase III trials for Crohn disease and acute radiation syndrome. Chondrogen is in Phase II trials for osteoarthritis of the knee. The company has a strong balance sheet with about $75 million in cash.