November 1, 2012 (Vol. 32, No. 19)
Lee Buckler, J.D.
Enal Razvi Ph.D. Managing Director Select Biosciences
With Over $900 Million in Revenues Expected in 2012, Field Is on a Roll
The stem cells field is an evolving landscape composed of basic and translational research activities in academic institutions as well as companies involved in the development and commercialization of technologies/tools for stem cell research and development of bona fide cellular therapies.
In this article, we focus on the cellular therapy space, which we define as the “deployment of various stem cell classes for the explicit use in the restoration of a given physiological function in vivo that has been damaged by disease or injury processes.” Cell-based immunotherapies such as cancer vaccines are not considered a part of cellular therapy in this focused definition that we adopt here.
Cellular therapy is not a novel concept and has been practiced for more than 40 years in the utilization of bone marrow transplants for hematological malignancies—indeed this field can be viewed as a continuum. The waves are composed of “different classes of cells that are utilized”—from bone marrow to peripheral blood, to cord blood, to now mesenchymal stem cells, and other stem cell classes potentially having clinical impact. Cellular therapy, therefore, has an extensive operating history, a track record of clinical utility, and a track record of revenue generation.
The field is composed of two major segments: tools and cellular therapy. Tools relates to basic research in stem cell biology, development of protocols for stem cell differentiation, methods development, as well as basic research activities in the iPSC area.
Also included in this market segment is the increasing interest and utilization of stem cells in traditional drug discovery and development. This utilization is driven in large part by the acceptance that screens for new medicinal entities are more bona fide when performed on cells that are part of the target organ, and hence the use of stem cells to generate these target cells allows more targeted, more relevant screening in drug discovery.
Stem cells are also finding utility in the generation of cell types that are sentinels for in vivo drug toxicity, such as hepatocytes and cardiomyocytes.
Cellular therapeutics, the main focus here, can be further segmented by the origin of the cellular therapeutic that is being deployed—autologous or allogeneic. Both of these segments will co-exist in the near-term of cellular therapy and our perspective is that for some disease classes autologous cellular therapy will offer value whereas for others—particularly those disease classes where a rapid intervention may be required, such as acute myocardial infarction/heart attack and stroke—the autologous model is not an option and allogeneic cells must be utilized.
It is interesting to point out that autologous cellular therapy (including autologous cancer vaccines) represent the ultimate in personalized medicine wherein the therapeutic agent is derived from the patient itself. While autologous cell therapies may not be fully personalized as an end-product, they employ a patient’s own biological source material and thus are certainly more akin to personalized medicine than those universally manufactured from common ingredients in large-scale lots.
Over the longer term, we expect the allogeneic cellular therapy marketplace to be much larger in size vis-à-vis patient populations, scope of therapeutic classes addressed, and the revenues generated from the space.
The utilization of cord blood for many disease classes, primarily hematological malignancies and inborn errors of metabolism, is a good benchmark for cell therapy. This field’s expansion has been driven by the increasing number of diseases addressed, development of technologies and protocols for cellular processing, cryopreservation, and recovery, as well as clinical protocols for administration of cord blood for maximal clinical impact.
Our industry coverage reveals there are currently 543,000 units of cord blood banked within public cord blood banks around the world. These units are designed for transplantation (infusion in both pediatric and adult populations) and some fraction is designated for research.
The cost of a unit of cord blood for infusion is approximately $35,000. This price point sets one potential benchmark for cost analysis and modeling for cellular therapeutics in the future. For adult patients, two cords are required per cellular therapeutic regimen (as a means to increase the total nucleated cell number infused).
Clinical Trials Analysis
Regenerative medicine is most frequently defined as therapeutics that “replace, regenerate, or repair cells, tissues, or organs or their function”. This can be accomplished through the use of small molecules, biologics, synthetic implantable devices, ex vivo constructed tissues/organs, or ex vivo manufactured cells. In our view, cell therapy is a subset of regenerative medicine with the exception of cell-based immunotherapies or cell-delivered gene therapy, both of which have different therapeutic objectives than regenerative medicine. We focus here on the subset of cell therapy.
The following analysis is focused on that subset of cell therapy products that are industry-sponsored (excluding activity that remains exclusively in the academic domain and all stem cell transplantation whether from bone marrow, peripheral blood, or cord blood).
• Business model. The cell therapy industry represents a number of different business models. On the clinical end of the spectrum, companies in the sector include those developing a cell-based medicinal product, those developing point-of-care devices capable of closed cell collection-processing-delivery at the patient bedside, and those focusing on nonproprietary but highly specialized clinical treatment services.
• Indication. It is hard to imagine an indication for which there is not a cell therapy being pursued, but because we are excluding cell-based immunotherapies and cell-delivered gene therapies from this analysis, we have consequently also left out the indications for which these therapies are largely designed—namely oncology, genetic disorders, and some immune disorders.
• Status. We have included with this article some data and metrics for the stem cell sector pipeline looking first at products that are already commercially available in one or more regulated market and then at the pipeline of industry-sponsored cell therapy products in clinical trials. (See a table of late-stage cell therapy trials here.)
Product Portfolio and Pipeline
There are over 15 cell therapy products commercially distributed by companies in the U.S. including: Dermagraft, Osteocel, PureGen, BioDfactor, BioDfence, Provenge, Carticel, Epicel, Nucel, Appligraf, GINTUIT, Trinity, Grafix, DeNovoET, Prokera, and AmnioGraft.
As the only cell-based immune therapy, Provenge falls out of cellular therapy. Two stem cell products (HemaCord and Clinimmune) were recently granted a BLA by the FDA and are now being commercially distributed in the U.S. by the nonprofit entities that own these products.
There are many stem cell sector products commercially distributed by companies in select countries in Europe, including: MySkin, CryoCell, ReCell, Carticel, Epicel, MACI, ChrondroCelect, AlloStem, BioSeed-C, co.don chondrospheres, Epidex, EpiGraft, and Diabecell. Additionally there are two point-of-care devices (by Therakos and Cytori) commercially marketed in Europe for cell-based treatments.
There are a similar number of stem cell sector products commercially distributed and only available in other similarly regulated countries including: Cupistem (S. Korea), Heartcelligram (S. Korea), Cartistem (S. Korea), J-TEC Epidermis (Japan), J-TEC Cartilage (Japan), J-TEC Corneal Epithelium (Japan), Prochymal (Canada and NZ), and CureXcell (Israel).
This excludes products commercially distributed in countries such as China and India where currently the regulations for these products are less defined.
The cell therapy products distributed in the U.S. and Europe in total are expected to generate approximately $900M in revenues in 2012. Removing Provenge revenue, the bona fide stem cell sector is expected to generate in the range of $550M in 2012. Despite the relative small size of the sector, it is trending in the right direction as this is twice what the sector is estimated to have generated in 2010.
While no cell therapy products received regulatory approval between 2001 and 2009, the sector has had 8 such approvals in the past 36 months.