The 7th annual New York Stem Cell Summit was held on February 21, 2012. The conference was sponsored by Robin Young, former Wall Street Biotech analyst, and featured presentations by numerous public and private companies involved in the stem cell industry. After attending last year’s Stem Cell Summit, we reported on the industry awareness that adipose tissue has more stem cells than bone marrow.
This year Robin Young presented his 2020 U.S. sales forecast for stem cell therapies. Likewise, he took everyone through a look back on what happened in 2011. A total of 27 companies each gave top level overviews of their products, clinical trial statuses, and business models. The majority of the companies are developing allogeneic stem cell therapies, which are based on cells from a donor and scaled up in the manufacturing process.
2011: The darkness before the dawn
It is no secret to biotech investors, that stem cell stocks suffered dramatic declines in 2011. To be more specific, they were taken out to the woodshed and beat to smithereens. Robin Young summarized that the market capitalization of all the public stem cell sectors declined by 25% in 2011 compared to the previous year. In 2011, total market cap of the entire publicly traded stem cell sector was only $ 3.4 Billion. Every single publicly traded stem cell stock declined in value, except for one company, Mesoblast (ASX: MBX).
Robin Young attributed the steep sector decline to ‘FDA regulatory pushback‘ – which is code speak to mean that the FDA reversed some of the previous favorable decisions from the past. In one example, an allograph product from Allosource was already approved, but now the FDA was reclassifying the product from tissue to drug, causing major upheaval in the industry.
However, the good news is that 2011 is now over! The thinking is that the stem cell space is emerging from the ‘valley of death’, or the’ trough of disillusionment’, which is commonly seen in new industries years after their initial hype period. Several cell therapy manufacturing companies are reporting increased commercial activity and clinical trial activity is ramping up.
contract activity in the cell therapy space is heating up
Lonza, a huge Swiss cell therapy company, reported that contract activity is brisk and that they are expanding cGMP manufacturing capacity based on existing and extrapolated demand coming out of clinical trials. In fact, many companies presenting at the conference appeared to be using Lonza as their manufacturer.
According to conference host Robin Young, Mesoblast is now considered the largest and most prolific stem cell company in the industry as measured by clinical trial activity. Mesoblast is actively involved in phase I, II and III clinical trials. Mesoblast is so positive about the future marketplace for commercial stem cell therapy that it has contracted with Lonza to make its own separate manufacturing facility. And Gamida, an Israeli company, detailed how, by manufacturing their approved StemEx® product with Lonza, they reduced the cost of goods sold (COGS). StemEx® is the first approved allogeneic stem cell product to get FDA approval for the marketplace.
Based on the number of times ‘Lonza’ was mentioned during all the presentations, it appears that Lonza will be ready to scale up manufacturing and assist the vast majority of cell therapy companies to get their products out to the marketplace. If this were the railroad industry, Lonza would be the supplier of the train tracks.
MSC’s as a cure: Curing disease vs. managing disease
Arnold Caplan, PhD, a prolific publisher of stem cell research and an Osiris founder, presented the keynote address to the group. Caplan is largely responsible for coining the term MSC, or Mesenchymal Stem Cells, in the late 1980’s. MSCs are one of the prominent types of stem cell cells responsible for healing and curing disease.
Caplan reiterated that stem cells usher in a new era of Regenerative Medicine.
Regenerative medicine is a new paradigm because stem cells will cure diseases, and not just manage them.
Up to now, diseases have only been managed by drugs mass produced by the pharmaceutical industry. Regenerative medicine is a new paradigm because stem cells will cure diseases, and not just manage them. As an example, Caplan reminded the group that diabetes has been managed with insulin for 60 years, but that insulin has not been able to cure diabetes. In another example, nitroglycerin has been used since the 1880’s to treat heart disease, but it has not been able to cure heart disease. According to Dr. Caplan, stem cells will do the curing!
Mesenchymal Stem Cells Medicinal signaling cells
Dr. Caplan called for a name change for the stem cell acronym ‘MSC’, which he created back in the late 80’s. He said that since he created the term, he should have the right to change the wording based on what we have learned since then. The current MSC term is widely known to mean “Mesenchymal Stem Cells”. However, Dr. Caplan feels that a better description of MSC is Medicinal Signaling Cells. This term much better reflects the cells ability to become your own personal medicine cabinet to heal and cure disease.
How do MSCs work their magic?
Much of the original work in the stem cell world over the past decades focused on what stem cells can differentiate into, or turn into. Dr. Caplan believes that while differentiation does occur, we have largely been missing the boat on the magical part of what stem cells do. The magic of stem cells occurs when they leave their niche and secrete a medicine chest of cytokines and other molecules which are capable of healing the body.
According to Dr. Arnold Caplan, all MSC’s sit on blood vessels as pericytes. Every blood vessel has pericytes. MSCs are pericytes. Whenever a blood vessel is inflamed or broken, the pericyte/MSC will leave the blood vessel and travel, (or ‘home’) to the site of injury. As MSC’s leave the blood vessel, they release tons of cytokines and molecules. These cytokines and molecules become your own personal drug store eligible to treat and cure over 40 diseases. Even more exciting is Caplan’s belief that the medicine chest is self renewing—it is capable of restocking itself! After an MSC has performed its duty to repair or cure, the MSC returns to its native niche on the blood vessel, capable of performing its magical healing all over again.
Animal studies point the way to success
There are basically three phases of clinical trials: Phase I, Phase II, and Phase III. Prior to embarking on any Phase I trial, clinical investigators must show results using animals. We are happy to report that the animals are doing great! Vet Stem has treated over 5,000 animals for tendinitis with MSC’s derived from adipose fat. The cure rate is an amazing 89%.
Mindblower for MSC applications: Use as an antibiotic
Dr. Caplan said the mindblower of all applications is MSC’s use as an antibiotic. When MSC’s upregulate, they secrete a molecule called hcap18-LL37, which acts like an antibiotic. Antibiotics treat infections. There is currently a clinical trial on the condition known as ‘sepsis’ which is a life threatening form of infection in the bloodstream. Caplan stated that early trial results using MSC’s are extremely encouraging. Speaking to the point of MSC’s inherent capability as an antibiotic, Caplan pointed out that if you were to go back and look at the databases for allographs, which are simply a matrix seeded with adult stem cells, you would see that these have incredibly low, nearly zero, infection rates. According to Dr. Caplan, this is due to the antibiotic properties of MSC’s.
FDA regulatory guidelines
Dr. Arnold Caplan called on the FDA to create a new category in the regulations for stem cell therapy with MSCs. He suggested that stem cells are neither tissues, nor drugs (in the pharma sense), but their own unique category. Additionally the idea of performing phase I, II, and III drugs trials for each indication is not realistic because stem cells are multi functional multi purpose, multi reactive agents, as opposed to single agent drugs that have been the standard in the pharma industry. He called for a distinct new classification in the FDA regulations to help mobilize the stem cell sector. He emphasized that we can not shape the new era of stem cell therapy to the existing FDA regulatory code. This sounded like an awesome idea to me, but inquiring minds want to know who has the authority to make that change? How do we put that in motion?
Market projections and crystal ball gazing
The total U.S. stem cell market is projected to be $6 Billion by year 2020. However, this assumes less than a 3% penetration rate for nearly all indications and is based on 44 million procedures. By all accounts, this 3% projection is an extremely conservative estimate of penetration. Top level category breakdowns for the US market in 2020 include orthopedic, cardiovascular, dental, diabetes, nerve repair, and others. An interesting application from the ‘others’ category included a presentation by Celtigen whereby stem cells repair the hair shaft and restore hair growth.
2012: Looking forward
After a year of contracted growth in 2011, according to Robin Young, this is the inflection point in the growth curve.
In 15 years, stem cell therapies will eliminate 80% of all spine surgery.
In 2012 the stem cell sector will embark on its prolific and steady rise, resulting in higher market caps and stock price for stem cell companies. The sector will not look back.
Top Treatment Category for Year 2020: Neurological diseases
Robin Young predicts that in 2020, cell therapy treatments for neurological diseases will be the biggest sector of the stem cell economy. The sector will command the highest prices per treatment. He estimates that pricing for neuro treatments will be $35K-$40K.
Orthopedic applications: Stem cells to trounce spine surgery
How do you spell disruptive? According to one orthopedic surgeon involved in a clinical trial for lower back pain, cell therapy will one day own the orthopedic market. Dr.Kenneth Pettrine of the Spine Institute has teamed with SpineSmith and they are using Mesoblast’s mesenchymal precursor cells (MPC’s). Dr. Pettrine predicts that in 15 years, stem cell therapies will eliminate 80% of all spine surgery.
Stem cell clinical trials
Number of stem cell trials: According to Dr. Caplan, there are currently 182 active clinical trials using MSC’s for over 40 different applications.
Conditions being treated: heart attack, ischemia, stroke, asthma, Crohn’s disease, acute renal failure, tendon and meniscus repair, diabetes, arthritis, Lupus, ALS, MS, sepsis.
Tissue sources used to isolate stem cells: adipose fat, bone marrow, cord blood.
Stem Cell Delivery Methods: In the marketplace, stem cells will be delivered by two methods. Many companies will be distributing products in both categories.
- Direct Delivery to the injury site by injection or placement of a matrix. This method of cell delivery is used in orthopedics and cardiac.
- IV infusion delivery. Disease indications using this delivery method include asthma, osteoporosis, inflammatory joint disease, multiple sclerosis, and acute radiation syndrome.
Dosing and timing of injections matter: Mesoblast reports that there is a clear dose response curve in cardiac applications. In their phase II trial they reported that a single dosage of 150 Million MPC cells in their Revascor project significantly reduced hospitalization and death rates for congestive heart failure patients, compared to lower dosages of 25 million, or 75 million cells.
one week after injections with MSC’s patients are euphoric
In orthopedic applications, Dr. Pettine reported using dosages of 6 Million and 12 Million stem cells for disc repair. He reported that one week after injection with MSC’s, patients are euphoric.
Jason Kolbert, a former Wall Street Biotech analyst and now VP of Neostem, stated that dosing must be given with enough time for the cells to migrate to the site of injury or disease. Neostem has identified that period as day 4 or 5 for one of its cardiac applications.
Are stem cell therapies safe?
On the topic of safety, Allosource, a maker of allographs, which is a matrix seeded with stem cells, reported that there have been NO reported adverse events with over 4,000 procedures.
The future of healthcare
In closing remarks to the conference attendees, Robin Young noted that he believes stem cell therapy will ultimately be less expensive for the healthcare system. He gave an example whereby a $40K orthopedic procedure will be replaced with a single session $5K cell therapy injection.
Best soundbite heard
“Stem cells are a way to naturally heal your body.”
If Don Draper of Mad Men were hired to run a PR campaign for public awareness of stem cell therapies, he would likely have zoomed in on this sound bite spoken during the course of the conference. It’s quite simple, yet accurate:
Nuff said. Onward with the revolution!