TERMIS PAP: Session 1 — Introduction to the Regenerative Medicine Industry
Tissue engineering and regenerative medicine (TERM) harnesses the power of cell- and gene-based therapies, often in combination with biomaterials, in order to provide targeted treatments for damaged tissues and a range of life-threatening diseases with previously unmet need. The global market is expected to exceed $20 billion (USD) by 2025 (Mason C, et al., 2011), with an annual growth rate of 21% (Scientia Advisors, 2010). This has led to a recent surge in development of novel therapies across academia, start-up biotech companies and multinational pharmaceutical corporations, driven primarily by technological innovation. Although there have been successes over the last decade, there have also been failures. The industry faces challenges with regards to the commercialisation and adoption of these novel therapeutics. During the course of these webinars we will highlight the issues of: satisfying regulatory requirements; access to capital finances; product valuation; reimbursement; and clinical advocacy.
Our first session will provide an introduction and overview to the current state of the TERM industry. Innovation is rapidly driving industry progression, and despite some promising clinical data coming through the industry faces complex issues in reimbursement and financing, manufacturing, regulation, and more. As an industry we are still to realise the great promise of TERM approaches, and here we look at past and present experiences to discuss how we might realise future commercial success.
- The ‘hype cycle’ and identifying major trends in the TERM industry
- Who are the major players and how is this changing?
- The role of scientific and economic innovation in building a new industry
- The importance of partnering and building alliances for future success
The welcome address was given by Dr Nihal Engin Vrana. Engin is the vice-president of scientific affairs at PROTiP Medical, Strasbourg, France.
Engin talked about the standard route of technology transfer:
An invention or discovery made as student or academic. This is followed by the protection of the intellectual property, normally through the filing of a patent by the university technology transfer office, and out-licensing to the industry to generate revenue. However, this very rarely happens with regenerative medicine therapies, as most technologies are not mature enough for such a scenario at the point of IP protection. More generally a start-up is set up, however these only have 10% rate of success. The most common reasons for failure are:
- A lot of time, money and energy lost due each start-up “re-inventing the wheel”
- The discovery/invention does not fit well with industrial needs
- The discovery/invention cannot be scaled up
- The benefits that the discovery/invention provides is not worth the expenses of commercialisation. Not all interesting scientific solutions are fiscally worthwhile to pursue.
- Target market, market analysis or business plan are not right due to lack of experience
- Fish out of the water effect: It is hard for a scientist to suddenly become a businessman
The keynote lecture was given by Dr Christopher Gemmiti, business development lead at the Harvard Wyss Institute, Harvard University. Christopher assessed the state of the regenerative medicine industry from four perspectives:
There has been plenty of innovation in the past 5–10 years in regenerative medicine. This is important as this fuels clinical trials and commercial successes. A lot of new enabling technologies have been created.
Manufacturing innovation: An overlooked, but essential, area of innovation is manufacturing. Without the ability to scale up for mass production, a new technology is highly likely to fail. Accordingly, a lot of innovation was put into this side of regenerative medicine recently by a diverse range of companies, from the US based pharma giant GE Healthcare to the Chinese company WuXi. This is a very important area for the long-term success of cell and tissue therapies.
Economic innovation: Historically, revenue was raised for commercialisation by setting up a spin-out company and approaching venture capitalists to raise some funds to finance company and develop products. This still exists in regenerative medicine, but it is a very expensive model.
New models have been set up at the country/academic/national level that provide funds and infrastructure to companies to support bridging the translational gap. Examples of these are the CCRM in Canada and the Cell and Gene Therapy Catapult in the UK.
Currently, innovation is one of the strong points of the industry both technologically and when it comes to manufacturing.
2. Financing, a US perspective
Around $1 billion in federal funding have been dedicated per year to regenerative medicine in the last few years. In truth this is not a lot, and is getting reduced. The industry therefore need other sources for funding.
The limited federal funding is contrasted public investment. As much as $2.5 billion was raised publicly in the first half of 2016 in the regenerative medicine industry. This investment is predominantly flowing towards gene and car-T cell technologies, and less so towards “traditional” cell and tissue therapies. A similar trend exists in EU financing.
The majority of investment was raised through venture capital or through Initial Public Offerings (IPOs). Venture capital is preferred. Trends show that IPOs are becoming a less effective means to raise funds. For example, Dimension Therapeutics attempted to raise $115 million through an IPO, but was only able to secure $72 million. Similarly, GenSight was able to secure only $65 million, in contrast to the original target of $100 million.
Trends also show that a lot of money is still flowing into the industry, but not as much as in 2015. However, this is consistent with other markets/industries, and shows a natural trend.
A lot of new small companies are partnering with large companies with much deeper pockets. This is exciting as it show that the science has reached a sufficient level of maturity to pique the interest of large pharmaceutical companies. This will provide the resources and expertise to shepherd the new regenerative medicine technologies through the clinical testing phase, and deal with manufacturing and quality control challenges.
3. Clinical Progress
728 clinical trials are under way as per the second quarter of 2016 (Phase I: 223; Phase II: 439; Phase III: 66). Clinical results show that generally speaking cell therapies have been shown to be safe and efficacious. Over a million patients have been successfully treated. However, clinical trial success rates are “lukewarm” for regenerative medicine, lower than for traditional small molecule therapies.
A key question is how much better “standard of care” regenerative medicine therapies provide compared to traditional (e.g. small molecule) or current competitor approaches. Regenerative medicine therapies will have to demonstrate a much higher standard of care compared to alternatives for the long-term success of the field.
4. Commercial Success
More than 700 regenerative medicine companies have been set up worldwide. The majority of these are in North America (371), followed by Europe and Israel at 195, and Asia with 112.
A major downfall of the early days of tissue engineering in the 1990s was the very high cost and unpredictability of the manufacturing process. These are still challenges; however the field has progressed since, mainly thanks to the growth of GMP facilities, integrated process development and the inflow of investment.
There have been commercial successes, but bankruptcies as well.
The improvement of standard of care offered by a new therapy must justify its price point. Some new therapies are looking for a $300,000 — $1 million price point. Can this be justified?
To understand what standard of care new therapies must offer, and how this will change in time, more investment is needed in health economic outcomes research (HEOR).
A start-up should invest into demonstrating the health-economic benefit of its product, and also into better understanding the mechanism of action of its therapy as this has significant implications on how clinical trials will need to be designed and what patient groups must be targeted.
- Lot of innovation both in the therapeutics and manufacturing at scale
- Financing is “white hot”, but cooling off
- Clinical trial success is mixed
- Commercial success has not been achieved yet
- The regulatory hurdle has been addressed, but not the commercial hurdle
- Cost has to be pushed down, the supply chain improved. Health-economic research is essential.
For further statistics on the regenerative medicine industry visit the Alliance for Regenerative Medicine website: http://alliancerm.org
Alliance for Regenerative Medicine, http://www.alliancerm.org/
Cell and Gene Therapy Catapult, https://ct.catapult.org.uk/
Innovate UK Funding Call, https://www.gov.uk/government/publica...