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Sep 15, 2011 (Vol. 31, No. 16)

U.S. Stem Cell Firms Partnering Overseas

Companies Find It Easier to Navigate Regulatory Requirements in Asia and Europe

  • American companies focused on stem cell treatments and technology platforms have met with success in finding partnerships and revenues overseas in the past decade. And it’s not for the reason many people might think, namely the controversy over U.S. federal funding of human embryonic stem cell (hESC) research.

    Two other factors better explain why U.S. stem cell companies have been looking beyond their borders to Asia, according to Bernard Siegel, founder and full-time executive director of the nonprofit Genetics Policy Institute (GPI).

    One is the attractiveness of Asian countries as markets for stem cell treatments. That reflects both high population concentrations as well as the willingness by national governments to invest in stem cell research as well as companies commercializing such treatments and encourage additional research by outside parties. The other is Asia’s lower regulatory hurdles when compared to the U.S.

    “It’s easier to move toward the translational process and get clinical trials cranked up in Asia than in the United States,” Siegel pointed out. “I think that’s one aspect of it.”

    U.S. companies can do that and more in Europe as well, if one company’s experience is any indication. Cytori Therapeutics  has won both initial and expanded indication approval in Europe for its Celution® system family of medical devices and instruments, which is not yet available in the U.S. Celution extracts and separates stem and regenerative cells from a patient’s own adipose tissue.

    “As we moved through the European market we found that a head-start was really important relative to the U.S. or other places,” Cytori president Marc H. Hedrick, M.D., told GEN.

  • Japan's Position

    The initial European approval allowed Cytori to expand into Japan where, Dr. Hedrick noted, the company obtained its first clinical experience. The company capitalized on the fact that doctors in Japan can, with a prescription, import technologies approved elsewhere.

    “And it just so happened that we had a relationship with one of the preeminent surgeons in Japan. In fact, our first 20 patients had breast cancer reconstructions performed in Japan at his university hospital,” Dr. Hedrick recalled.

    “At the same time, we identified someone to lead the charge in Japan, that we were very fortunate to get, who was also a business leader at Baxter in Japan. One thing led to another, and we now have the majority of our revenues from Japan. It was all tied back to that original regulatory approval in Europe that allowed us to get into that market very quickly,” Dr. Hedrick added.

    Japan’s share of Cytori’s sales tumbled during the first quarter to 30% from 72% a year earlier due to the March 11 Tohoku earthquake and resulting tsunami. Japan is where Cytori, which maintains a Tokyo office, found two investors among some of the country’s corporate giants.

    Last year Astellas agreed to buy $10 million of Cytori stock, and in 2008, Olympus, a medical device company, led a $17 million private placement financing. Two years prior, Olympus made an $11 million milestone payment to Cytori for obtaining CE Mark approval for the original Celution system.

    “They provided a significant amount of capital to Cytori, and that was another reason why it made sense to focus on the Japanese market,” Dr. Hedrick said.

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