Regenerative medicine scotland v2

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Over the last 8 years Scotland has made a very significant investment in building the human and physical infrastructure required to leverage our leading position in the field of stem cell biology to support the development of a thriving Scottish Regenerative Medicine industrial sector. This initial investment is nearing completion, has substantially delivered and has started to make a real impact. However its full value will only be realised as the world-wide regenerative medicine sector matures and near term scientific, technical and industrial impediments are overcome. Our competitors in other parts of the UK and across the world are continuing to invest in this space in order to imbue their nascent industries with comparative advantage.

With these considerations in mind the community has undertaken a review of the current state of play, in order to determine what now needs to be done in order to drive the growth of the Regenerative Medicine industry in Scotland and embed significant long-term benefits to the economy and health of the nation.

This document sets out a strategy which has been developed in collaboration with the academic, business and clinical communities. It is intended for high-level discussion and to provide a framework for future collective direction and investment.

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Regenerative medicine scotland v2

  1. 1. Regenerative Medicine ScotlandCollaborate Innovate Translate 1
  2. 2. ForewordOver the last 8 years Scotland has made a very significant investment in building the human and physicalinfrastructure required to leverage our leading position in the field of stem cell biology to support thedevelopment of a thriving sector. This initial investment is nearing completion, has substantially deliveredand has started to make a real impact. However its full value will only be realised as the world-wideregenerative medicine sector matures and near term scientific, technical and industrial impediments areovercome. Our competitors in other parts of the UK and across the world are continuing to invest in thisspace in order to imbue their nascent industries with comparative advantage.With these considerations in mind the community has undertaken a review of the current state of play, inorder to determine what now needs to be done in order to drive the growth of the Regenerative Medicineindustry in Scotland and embed significant long-term benefits to the economy and health of the nation.This document sets out a strategy which has been developed in collaboration with the academic, businessand clinical communities. It is intended for high-level discussion and to provide a framework for futurecollective direction and investment.Marc Turner, Professor of Cellular Therapy and Medical Director SNBTS 2
  3. 3. Section PageForward 2Executive Summary 4Background. 5Progress. 8Caerus 10Challenges and Opportunities 11Strategy Refresh 16Critical Issues 17Guiding Philosophy 20Strategic Objectives and Actions 22References 25References 30 3 The Scottish Centre for Regenerative Medicine
  4. 4. Executive SummaryScotland has internationally competitive strengths in stem cell research and has made very significant public sectorinvestment over the past 8 years in building physical and human capacity to support the development of theRegenerative Medicine sector. The case for Regenerative Medicine products is compelling when considered in thecontext of an ageing population and the projected increase in the prevalence of chronic degenerative diseasessuch as cardio-vascular disease, diabetes mellitus and liver failure. Unless a breakthrough technology, such asregenerative medicine is developed the burden on health and social care systems is likely to prove challenging.Scotland s strategy under the Stem Cell Intervention Framework (SCIF) concludes at the end of 2012, however on aglobal basis, the regenerative medicine sector has not yet matured to the point where private equity is sufficientlyavailable to build on this public investment and create a viable, self-sustaining commercial sector. A strategyrefresh is required to ensure that Scotland s competitive position is not eroded; that other countries who continueto invest do not dominate; that IP and talent is not lost and that the payback from public investment is realised.The Regenerative Medicine community proposes to build on the investment thus far by focusing on extending thecomparative advantage Scotland now enjoys to deliver long term economic, health and social benefit to thenation.Our Vision is to develop a globally recognised regenerative medicine industry in Scotland, building on excellentacademic research and collaborating with a robust commercial sector to deliver all aspects of the innovation valuechain in order to translate health-related benefits to the economy of Scotland and to healthcare internationally.The Regenerative Medicine value chain needs to be fully embedded in the wider Scottish Life Science value systemin order to contribute to building a coherent innovation ecosystem for life sciences as a whole.Our Strategy Refresh addresses supply side issues by continuing to build an inclusive community of companies andpublic sector organisations which can appropriate value from intermediate points along the value chain in theshort to medium term whilst maintaining a long-term focus on the development of a new generation oftherapeutics.It recognises that the international calibre of Scottish academic science and clinical medicine cannot be taken forgranted, that we need to be cognisant of the consolidation and focussed investment apparent amongst ourinternational competitors and that further investment and enhanced collaboration across the Scottish academic,business and healthcare communities is key to building critical mass.It addresses demand side issues including the contribution NHS Scotland can make to the creation of market pullthrough piloting and adoption of new technologies and also takes cognisance of the contribution the sector canmake in the long-term to the health and quality of life of the Scottish people. 4
  5. 5. Whilst individual components of the Scottish offering in terms of the academic, commercial and clinical sectors areall vital strengths, in our opinion the basis of our competitive advantage is our ability to bring these assets togetherin a chain linked value system, built on all key aspects of life science innovation in Scotland, capable of translatingproducts through to clinical application - across the so called Valley of death for new product development. As anation we need to hone this value system through smart, targeted investment in both the individual componentsof the chain and the linkages between them. We need to leverage this position to drive products through tocommercial and clinical translation faster than our competitors, and we need to aggressively pursue opportunitiesfor international collaboration and business.BackgroundScotland has significant intellectual capital in the field of stem cell and developmental biology and is rankednumber one in the world for stem cell research 2. Prominent contributions to the international field include thecloning of Dolly the sheep and the discovery of the pluripotency factor Nanog. In 2004 Scottish Enterprise (SE),working with leading academics, companies and clinicians, developed an ambitious long-term plan to support andenhance the development of the emergent field of stem cell biology and the eventual realisation of commercialand clinical benefits. That strategy, known as the Stem Cell Intervention Framework (SCIF) has leveraged around£90m of public sector investment in order to support the development of manufacturing infrastructure, theattraction and retention of key talented people, funding for flagship projects and the promotion of Scotland s stemcell / regenerative medicine capacity on the international stage (Figure 1). Hepatocytes derived from skin cells using iPS technology, David Hay MRC-CRM 5
  6. 6. Figure 1: The Stem Cell Intervention FrameworkThree key components of the SCIF are: Ø The establishment of the Scottish Stem Cell Network (SSCN) with the primary objective to address the key market failures identified at the time - information deficiencies and sectoral fragmentation - by bringing together academics, biotechnologists, clinicians, business and other professionals from across Scotland. SSCN undertakes activities in 5 main areas: addressing fragmentation by providing networking opportunities through meetings, website, newsletter and social media; supporting the translation and commercialisation of stem cell research; promoting Scottish capability internationally in collaboration with Scottish Development International (SDI); public engagement; and education and skills 3 development . Ø The establishment of Roslin Cells as a not for profit company with the initial purpose of developing cGMP grade human embryonic stem cell (hESC) lines though this has broadened into supporting the development of new clinical therapies derived therefrom. Ø The development of the Scottish Centre for Regenerative Medicine (SCRM) with the vision of creating a critical mass of academic, bio-manufacturing and clinical expertise to drive a translational agenda. The GMP Cell Therapy facility has been designed and built to the highest standards required by the Medicines 6
  7. 7. and Healthcare products Regulatory Agency (MHRA) for the manufacture of Advanced Therapy Medicinal Products (ATMPs) for clinical use operated by Roslin Cells and the Scottish National Blood Transfusion Service (SNBTS).Figure 2: The BioQuarter Complex Arial View of BioQuarter MRC- Centre for Regenerative Medicine BioIncubatorIn addition, the BioQuarter complex, with SCRM at its heart, brings together academics, business, clinicians andpatients to create a compelling competitive edge in cellular therapeutics development that few can emulate. In thebroader Scottish context investment in unique initiatives such as Generation Scotland, Health Sciences Scotlandand NHS Research Scotland provide a path to identifying and recruiting suitable patients for clinical trials.Economic benefits are expected to be generated from collaborations (company-to-academia and company-to-company); the creation of new companies (start-ups and spinouts); the attraction of inward investor companies toScotland; and from companies diversifying their activities to create new products and services to support theindustry sector. Crucial to realising these benefits is the aim of attracting companies and inward investment bymaking Scotland the preferred location for regenerative medicine development (vide infra: Sections 9 and 10). 7
  8. 8. ProgressAn inclusive Monitoring & Evaluation Framework was developed by consultants SQW to enable progress againstthe projected economic benefits from the SCIF to be regularly tracked against the 2004 baseline. Monitoring wassuggested across 6 areas: human capital ( people ), physical capital ( things , infrastructure), intellectual capital( know- how ), financial capital ( money ), market capital ( global positioning ), and social capital ( growth ofnetworks ). An updated assessment was produced in 2011 (Figure 3).Figure 3: SCIF Monitoring and Evaluation FrameworkEconomic impactThe SCIF was approved as a bold long-term investment. Medium-term economic impact (by 2015) was expected tocome from three main areas of activity: recruitment and retention of academic staff; company creation throughstart-up and spinout activity; and via licensing of research. Progress is significantly ahead of expectation (Figure 4),apart from licensing activity. This is lower than originally anticipated, reflecting the trend in this sector as hESC 4lines and now the processes and products created with those cell lines cannot be patented in Europe .Figure 4: Progress against medium term targets 2012 8
  9. 9. This does not appear to have adversely affected the development of the industry thus far, however this problemneeds to be addressed through continued progress in the development of research and clinical GMP grade inducedPluripotent Stem cells (iPSC) and related technologies.Innovation and company growthOne of the key highlights of the focus on stem cells has been in the emergence of a comprehensive commercialsupply chain, supporting the development of new therapeutics as well as new tools and technologies.The company base in 2003/4 consisted of one therapeutic company, and two companies developing stem cell toolsand reagents.In 2011, 24 companies are engaged in the sector, forming a comprehensive supply chain. This supply chainincludes spin-outs or start-ups e.g. Deliverics, Sistemic and Pharmacells and major multi-nationals e.g. CharlesRiver and Life Tech.Inward investmentAttraction of inward investment from companies using or developing stem cell technology has been a major focusof Scottish activity. A detailed understanding ( segmentation ) of customer types and their needs has beendeveloped, supporting detailed, intelligence-led proposition marketing. This has been combined with joint team-working, with support from SE, SDI and the SSCN. A number of existing inward investors are developing productsand services for the stem cell market, including Charles River, Aptuit (Catalent), Millipore and Life Technologieswhilst BioReliance has recently been acquired by Sigma Aldrich. There is an opportunity to use Scotland s stem cellexpertise and the additional components of the Regenerative Medicine value chain already in place to help anchorthese companies In Scotland.Progress to clinicScotland has collectively delivered two cell therapy products into clinical practice: the first, the pancreatic isletprogramme is a collaboration between the Scottish Liver / Pancreas Transplant Unit and the SNBTS whichcommenced in January 2011. From a standing start, it has grown to represent 50% of the UK s activity with 10transplants carried out in the last 12 months. The programme has achieved a transplantation rate from donor torecipient of 70%, which is on a par with the world pioneers in Edmonton and well above the UK average of 50%.The second, an EBV Cytotoxic T lymphocyte (CTL) bank has been established in Aberdeen to treat patientsinternationally with post-transplant lympho-proliferative disease. This is one of the first cellular therapies in thecountry to achieve a MHRA Manufacturing Licence. The first CTL have been released to treat a child with refractoryEBV-driven non-Hodgkin s lymphoma. 9
  10. 10. In addition there are several clinical cell therapy studies ongoing, including the ReNeuron trial of a neural stem cellproduct for patients with stroke in Glasgow; a trial of corneal epithelial stem cells which has recruited its firstpatients in Edinburgh; and a study of CD133 cells in chronic liver failure which is due to open in Edinburgh in May2012. Advanced Cell Therapies (ACT) are intending to open a second site for their European clinical trial of hESCderived retinal cells in Scotland in 2012. In comparison the California Institute of Regenerative Medicine, despite 5its $1.2bn investment thus far, has just announced the start of its first clinical trial .These cell therapy programmes and the expanding commercial sector are the result of far-sighted investment inhuman and physical capacity building over the last 8 years. Scotland has positioned itself at the forefront ofinternational developments in this field. Indeed the development of cellular therapeutics and regenerative 6medicine has become a cornerstone of the Scottish Life Sciences Strategy as it has in a number of other 7,8countries , reflecting the predicted sector growth and the resultant long-term economic, health and knowledgebenefits that are likely to accrue to countries capable of competing in this space.CaerusWe believe Scotland has reached a critical inflection point or Kairos the right or opportune moment where theinvestment made over the last 9 years can be brought together to form the bedrock on which to build a strong andsustainable regenerative medicine industry in Scotland (Figure 5).Figure 5: Caerus In Greek mythology Caerus was the personification of opportunity. He is an allegorical representation of the critical, favorable or advantageous moment. He is usually pictured as running and with wings to fly like the wind. He has scales balanced on a razor to illustrating the fleeting instant in which opportunities appear and disappear. In rhetoric Kairos is a passing moment which must be driven through with force if success is to be achieved.We believe that the success of the Scottish Regenerative Medicine Strategy will be judged by the delivery of 3outcomes: Ø It must contribute to the near and medium term recovery of the Scottish economy Ø It must establish a comparative advantage which leads to economic assets which are embedded for the long term Ø It must have a direct long-term beneficial effect on the health of the Scottish people. 9These outcomes reflect the imperatives laid out in the Scottish Government s Economic and Life Sciences 6Strategies (vide infra). 10
  11. 11. Challenges and OpportunitiesContributing to the Scottish economyLike all advanced economies Scotland has suffered from the global financial crisis of 2007 and the ensuingrecession 9. In 2010/11 Scotland s Gross Domestic Product (GDP) was around £145bn and grew by 0.5% in the 3 rdquarter of last year (or by 0.9% on a rolling annual basis)10.The Life Sciences Industry in Scotland is recognised by both the Scottish and UK Governments as having highgrowth potential and the capacity to contribute significantly to the country s economy in the future. Scotland ishome to the UK s second largest Life Sciences cluster, one of the largest in Europe with more than 640 companiesemploying more than 30,000 staff11-13. It contributes around £1.5bn of added value (GVA) per annum and turnoverworth £3.1bn to the Scottish economy14. An aspirational target has been set for 2020 to double added value to£3bn and turnover to £6bn 6. Given that the market for Regenerative Medicine therapies is predicted to grow from$8bn to $35bn by 2018 8,15, a substantial contribution to this growth target can and should be made by theRegenerative Medicine sector.Over the last 10 years, much greater evidence has been developed to analyse the potential benefits of investmentin new diagnostics and therapeutics, as well as the timescale to realise these benefits. For example, a 2008 Reportfor the MRC, Wellcome Trust and Academy of Medical Sciences showed that every £1 invested in new medicalresearch by Government in medical science offers a 34% annual return (in perpetuity), but that it takes an average 1617 years for the profit to be realised . It is important to be clear that sustaining and supporting research,development and innovation in this space is therefore a long-term commitment. 17The global burden of degenerative disease is enormous and is continuing to grow particularly in low and middleincome countries. A sustainable position in the global market for Regenerative Medicine therapeutics is likely to beof very significant financial value. Realistically, even by 2020, only a limited number of new therapeutics are likelyto be fully-approved in the major international markets. However significant commercial revenues can begenerated in the near and medium term from intermediate points in the value chain for example: Ø Sales of reagents and other tools for supporting regenerative medicine research and development. Ø Sales of assays for new approaches to drug discovery and toxicology studies. Ø Provision of supply chain services (including niche and volume manufacturing) to companies developing near-to-market therapeutics. Ø Provision of services for quality assurance and regulatory advice. Ø Clinical trialling. 11
  12. 12. Developing a robust supply-side industry will help to ensure that the economic benefits are appropriated inScotland and are not lost. The complexity of manufacture of living cellular therapeutics means that experiential know-how and human capital generally are very highly valued. As such, by being recognised as a location with awell trained and experienced workforce already working in the Regenerative Medicine sector, Scotland will benefitfrom a significant cumulative advantage. In addition, cell therapy products made under a controlled GoodManufacturing Practice (GMP) process, have a unique profile, a function of (inter alia) the biologicalcharacteristics of the starting human material, the reagents and environment, the culture process and testingsystems used et cetera. As the product progresses through the development and regulatory pathway it becomesincreasingly expensive and time-consuming to switch to new facilities and processes. Finally, it is thecomplementarity of the various components of the Scottish Regenerative Medicine value chain which are difficultto move or imitate. For these reasons, once committed to a location, a developer has reduced ability to relocate.Thus a strong supply side will help to anchor new products and services in Scotland thus retaining value in thelonger-term.The Regenerative Medicine strategy therefore needs to address supply side issues by continuing to anchor aninclusive community of companies and public sector organisations which can appropriate value fromintermediate points along the value chain in the short to medium term whilst maintaining a long-term focus onthe development of a new generation of therapeutics.Creating a sustained competitive advantageWhilst Scotland has made significant investment in, and has considerable strengths in, the Regenerative Medicinesector, it is clear that other countries are aggressively investing in this sector. Ø The UK Life Sciences Strategy 18 lays out plans for building a life sciences ecosystem in the Oxford Cambridge London triangle, including investment by the Technology Strategy Board in a Cell Therapy Catapult Centre in London Ø The University of Cambridge has launched the Cambridge Stem Cell Initiative which brings together 25 academic and clinical research laboratories funded by the Medical Research Council (MRC) and the Wellcome Trust (WT). Ø Similarly the Francis Crick Institute is scheduled to open in London in 2015 as collaboration between University College London, King s College and Imperial College London with support from MRC, WT and Cancer Research UK. The Institute has a broad vision to promote multidisciplinary research and support connections between researchers, between disciplines and between academic institutions, healthcare organisations and businesses. 12
  13. 13. Ø The UK Cell Therapy Catapult Centre which is being developed with a focus on driving a small number of cell therapy products from research bench through to Phase Box 1: Canadian Centre for IIb clinical studies over the next 5 years and to hold or Commercialisation of Regenerative Medicine. share IP in order to create a set of investable propositions. In 2005 the Canadian Stem Cell It will not in and of itself have cell therapy manufacturing Network created a researcher- capability at least in the short to medium term. It is owned for profit company called therefore currently unclear (to us) how the economic Aggregate Therapeutics which enjoyed first look IP rights to outcomes of such a strategy will be embedded in the UK. invention disclosures across 16 institutions. Despite aggressive Ø Internationally, there are several high profile examples of promotion, the company was found to be financially public sector led initiatives leading to substantial unsustainable in the absence of 8 investments in Regenerative Medicine . public funding for early stage development. SCN have subsequently established the Ø California has authorised public funding of up to $3bn Centre for Commercialisation of since 2004 to support the California Institute for Regenerative Medicine with $C15m of federal funding on a Regenerative Medicine. As of July 2010 £1.1bn of grants non-profit, graded model with its had been committed with $884m of matched funding own laboratory space for leading to the estimated creation of 24,654 FTE jobs, the development and validation. payment of $157.2m in tax revenues to the State Government and $44.4m to local government. Ø The Canadian Stem Cell Network (SCN) is nearing the end of its second 7 year funding cycle and has established a number of legacy organisations. In 2005 it created a researcher-owned for profit company called Aggregate Therapeutics which enjoyed first look IP rights to invention disclosures across 16 institutions. Despite aggressive promotion, the company was found to be financially unsustainable in the absence of public funding for early stage development. SCN have subsequently established the Centre for Commercialisation of Regenerative Medicine (Box 1). Ø The Australian Stem Cell Centre was founded in 2002 and ceased operations in September 2011. Two legacy organisations continue its work, Stem Cells Australia established by the Australian Government with a grant of $Aus21m in November 2012 and the National Stem Cell Foundation of Australia established in 2011.The Hauser Report identified that the role and structure of Technology and Innovation Centres varies according to 19the innovation system, economic and social landscape of the countries they operate in . 13
  14. 14. The Scottish research and business base remains highly competitive but we need to be cognisant of theconsolidation and focussed investment apparent amongst our international competitors. We believe thatfurther targeted investment and enhanced collaboration across the Scottish academic, business and healthcarecommunities is key to building a more robust business base, accelerating new product and service developmentand facilitating faster growth of Scottish Regenerative Medicine companies. There is a race between nations tobring these new cellular technologies to market quickly in order to gain first mover advantage and act as aplatform from which to try to establish a dominant market position in the future. Scotland has a key competitivestrength in its chain-linked system capable of translating products across the so called valley of death fromresearch laboratory through to initial commercial and clinical application.Delivering better HealthcareLike most other developed economies the age structure ofScotland s population is changing. Between 2000 and 2010 there Box 2: Public Health Burden ofwas a 14% increase in the number of people over 45 years old. Acute Coronary Syndrome in UK.Approximately 17% of the population is currently aged 65 and Cardiovascular disease is theover and 2.2% are over 85 years old. By 2035 the proportion of commonest cause of premature death accounting for 30% of allpeople aged over 65 years is projected to rise to 23% and those deaths amongst men and 22%over 85 to 5% of the population 20. amongst women. Whilst survival post myocardialScotland also has a relatively high burden of ill health. Whilst life infarction is improving, there are more people alive with chronic heartexpectancy is improving, it remains lower than that of most of failure and reduced quality of life.the EU27 countries21. In 2010 28% of deaths were caused by In 2009/10 there was a total 26,778cancer, and the majority of the rest by degenerative conditions Acute Coronary Syndrome (ACS)including ischaemic heart disease (15%), cerebrovascular disease events in Scotland leading to 4,682(9%), other cardiovascular diseases (7%), respiratory diseases deaths.(7%), liver and other gastrointestinal disease (6%), neurological It is estimated that these lead to around 17,730 hospitalisations,disease (3%), renal failure (2%) and diabetes mellitus (2%). The 270,000 work days and 58,860evidence suggests that people are living longer with chronic and disability adjusted life years lost.sometimes multi-factorial disease. It is estimated that in the Economic impact is estimated ascoming decades just under 2/3rds of people over the age of 65 £650m in direct health economicwill suffer from a life-limiting disability. Moreover health expenditure and economic losses and £1.764bn in wider societal costs ofinequality in Scotland is profound the healthy life expectancy care23.in the Scottish Index of Multiple Deprivation 15% most deprived 22areas is 8-10 years below that of the Scottish average . Thedirect impact of degenerative disorders on the health of 14
  15. 15. individuals and the resultant burden on the broader health,economic and social system is exemplified in Box 2 and has been 24recognised as a serious long-term challenge leading to a shift the Box 3: End Stage Liveremphasis of care away from a reliance on secondary care to Disease.preventative and anticipatory care in the primary and community In Scotland there has been a 25 rapid increase in end stage liversectors of our healthcare system . This will be a serious challenge disease deaths from cirrhosisover the coming decades unless we can take advantage of new have doubled in the past 10Regenerative Medicine approaches to improving functional years.capacity in patients with degenerative disorders. Even relatively The only curative treatment is liver transplantation. In the UKmodest improvements in tissue and organ function may suffice to there are almost 500 peoplemove large numbers of patients from dependency to independent waiting for a liver transplant compared to 300 five years ago.living with benefits including their own quality of life, impact on Unfortunately deaths on thetheir families, wider impact on the Scottish health and social care waiting list are increasinglysystem and the ability to return to work (Box 3). common. Patients with a UKELD score above 49 typically have a poorThe pressures facing healthcare systems in developed economies quality of life with frequentworldwide are similar, even where there are wide differences in hospital admissions and a poorunderpinning financial structure. For example, the current US prognosis, where-as those with a score less than 49 canbudget projects a doubling of the Medicare and Medicaid budget frequently be managed asover 10 years from $733bn currently to $1.5tr in 2022. outpatients. Regenerative therapies targetedHowever, the role of the healthcare system in supporting the at patients across this tipping point could achieve significantdevelopment and adoption of this new generation of diagnostics clinical benefit for a modestand therapeutics also needs to be appreciated. Cellular (20-25%) improvement in physiological function.therapeutics have much more in common with blood transfusion,tissue and organ transplantation than with standardpharmaceuticals including issues of donor selection and screening,procurement, bespoke manufacturing, immunological matching and recipient follow-up. Expertise in these areasalong with access to centralised clinical data bases allowing careful patient stratification, clinical trials capabilityand resources for intense patient monitoring are critical assets which can be used to attract new companies andinvestment into Scotland in order to progress development of their products. 26The Nicholson Report has recognised the contribution the NHS can make to the wider economy throughsupporting growth in the domestic life sciences industry, exporting innovation, ideas and expertise, improving thehealth and economic productivity of the population, and adopting innovation to improve effectiveness, efficiencyand productivity. 15
  16. 16. The Regenerative Medicine strategy also needs to address demand side issues including the contribution NHSScotland can make to the creation of a market through piloting and adoption of new technologies and thecontribution the sector itself can make to economy, health and social care of Scotland in due course.Strategy RefreshWith these considerations in mind we initiated an engagement process with the stem cell and regenerativemedicine community around the development of a strategy refresh focused on enabling Scotland to leverage theinvestment made thus far in human and physical capital to drive the field forward towards commercialisation andclinical impact. Speed is of the essence if we are to maintain our competitive position.A meeting was held on the 27 th January 2012 involving colleagues from across the academic, commercial andclinical sectors and from across Scotland. There was discussion around the scope of the sector, the development ofa vision statement, the identification of strengths, weaknesses, opportunities and threats, and the derivation ofcritical issues. These were subject to further virtual engagement both with the invited group and the broadercommunity from February April 2012 and informed by the Progress to Therapy meeting 21st 23 rd March 2012.Field Statement - Regenerative Medicine Scotland: Collaboration, Innovation, TranslationIt was considered that the term Regenerative Medicine captures the essence of the developing field and reflectsdemand pull rather than academic (stem cells) or technological (cellular therapy) push. As a brand it is reasonablywell established nationally and internationally and is intuitively understood by the public. However the field isbroad in scope and covers near term applications of tools and technologies in (inter alia) disease modelling, drugdiscovery, toxicological screening and diagnostic reagents as well as longer-term therapeutic applications in smallmolecules and pharmaceuticals, cellular therapies, gene therapy and tissue engineering. 16
  17. 17. Figure 6: The Regenerative Medicine space and overlapping fields Tools and Technologies Diagnostics Pharmaceuticals and Disease Small molecules modelling Regenerative Medicine Tissue Gene Therapy Engineering Cellular TherapyVision Statement.We will develop a globally recognised regenerative medicine industry in Scotland, building on excellentacademic research and collaborating with a robust commercial sector to deliver all aspects of the innovationvalue chain in order to translate health-related benefits to the economy of Scotland and to healthcareinternationally.Strengths, Weaknesses, Opportunities and ThreatsStrengths WeaknessesTranslational capability. Scale / critical mass.Commercial supply chain in relevant products and services. Lack of investment.Infrastructure. Too inward focused.Reputation, passion and commitment. Poor integration.Political support. Lack of communal focus.Scotland as a dispersed cluster. Weak PR.Global Scots.Opportunities ThreatsHuge unmet need / market potential. Competition: UK and global.Scotland s population. Lack of finance: public and private.New sources of funding. Negative public and political perceptions.Leverage existing academic, business and clinical excellence. Lack of pull through by NHS.Philanthropy Regulatory barriers.Public outreach / PR Loss of human capital to better financed regions.Recognise and exploit IP. 17
  18. 18. Critical IssuesA number of issues were identified by the community as critical to the delivery of the Vision, which werecondensed into 5 Critical Issues:I. ResearchScotland has a strong track record in stem cell anddevelopmental biology, but also in clinical medicine and relatedfields such as chemistry, engineering and informatics. It Box 4: BloodPharma.currently attracts 11% of the total annualised spend on Blood Transfusion was arguably theRegenerative Medicine by the UK Research Councils and first cellular therapeutic. Much of the pioneering work was carried outTechnology Strategy Board27. However, recruitment and in Scotland in the early 19th Centuryretention of the best scientists is subject to strong international by John Leacock and James Blundell.competition and needs to be a continued focus of investment. Two centuries on, problems withCollaboration across complementary skills in Scotland s sufficiency of supply, transfusion transmitted infections and averseUniversities can leverage large tranches of funding such as that effects persist, particularly insupporting the BloodPharma programme, but take time to developing countries.build and can be complex to manage (Box 4). More of these SNBTS along with the Universities ofcross-disciplinary programmes are required if we are to build Edinburgh and Glasgow, Roslin Cells and the English and Irish Bloodworld-leading companies of the future. Services have been granted £6m in funding from the Wellcome Trust and Scottish Funding Council toII. Commercial develop GMP-grade red cells fromScotland has a supply chain of organisations with a strong track hESC lines for clinical use.record in translating research to the market. Anchoring and We expect to create a Specialbuilding local companies is key to building a vibrant and Purpose Vehicle this year to leverage further funding for scale-innovative business sector, attracting inward investment and up and clinical trialing.embedding the economic benefits for Scotland. However, 96% This work has potential significantof these are SMEs which often don t have the resources to benefits to international healthcareengage in extensive negotiations with public sector and to the Scottish economy, but is also builds generalisable expertise inorganisations or identify potential opportunities and partners the development of this newon the national and international stage. Supporting business generation of complex scalable cellular therapeutics.access to University knowledge and facilities, to the NHSScotland clinical environment and to other companies in thenational and international environment is key to supporting thebirth and growth of SMEs in this sector.As SMEs are particularly vulnerable to financial failure and acquisition before their true potential has been realised 18
  19. 19. often by non-UK competitors, it is critical to develop companies of scale which are significantly embedded in theScottish economy. Creating this service sector will attract domestic and international businesses to develop theirproducts in Scotland and retain the economic benefits.III. ClinicalScotland has a unified healthcare system with excellent data linkage, an infrastructure for managing andsupporting clinical studies and state of the art clinical trialling and imaging facilities. However innovation is usuallypatchy and slow, procurement is increasingly focused on cost saving and support for the research anddevelopment agenda is a low priority. The development and implementation of regenerative medicine strategies isimperative if we are to reduce the long-term burden of chronic disability. Without recognition by the NHS of itsbroader and long-term role in supporting innovation and facilitating economic development, and the need todevelop strategic partnerships with the sector to facilitate the growth of a local market as a springboard to globalmarkets will be slow and poor. Scotland s historic reputation for Medical excellence could and should be leveragedon the international stage.IV. FinanceAs is the case with most emerging technologies, much of the investment in stem cell sector to date has beenfunded by the public and charitable sectors. For example on a UK basis the public sector has invested £200m since 82003 and the charitable sector £38m . The relative lack of funding from the private sector is in part due to theearly stage of commercialisation reflected in the size and structure of the industrial sector. Worldwide there areonly 391 companies operating in regenerative medicine the majority based in North America (47%) or Europe(37%) the latter predominantly in UK, Germany and France. 91% of these companies are SMEs and on average 8 28have only filed 1-5 patent applications to date . The recent Finance, Innovation and Growth European Policy Briefemphasises the critical role of Government investment in research, development and supporting innovation andthis is reflected in continued public sector investment in the Regenerative Medicine sector elsewhere in the UKand internationally. Ways need to be found to continue to leverage public, private and philanthropic investmentover the next few years as a bridge across the so-called valley of death .V. CollaborationIn 2004 fragmentation of the community across professional, institutional and geographic boundaries withresultant information silos and lack of a collective voice was recognised to be a key problem and one that has beenlargely addressed by SSCN. Whilst that organisation is coming to the end of its public funding there is concernwithin the community that, in the absence of SSCN or a legacy organisation, that connectivity and voice willdissipate and a unique collective asset will be lost. 19
  20. 20. Guiding PhilosophyWhilst individual components of the Scottish offering in terms of the academic, commercial and clinical sectorsare all vital strengths, our key competitive advantage is our ability to bring these assets together in a chain-linked value system capable of translating products across the so called valley of death between researchlaboratory and clinical application.As a nation we need to hone that value system through further investment in both the individual components ofthe chain and the linkages between them; we need to leverage this position to drive products throughcommercial and clinical translation faster than our competitors; and we need to aggressively pursueopportunities for international collaboration and business.We believe that this strategy will facilitate the development of a globally recognised regenerative medicineindustry in Scotland with the following benefits: Ø contribute to the near and medium term recovery of the Scottish economy Ø establish a comparative advantage which will leads to embedded, long-term economic benefits to the Scottish economy Ø have a direct long-term impact on the health and quality of life of the Scottish people.Strategic ObjectivesOur Vision is to develop a globally recognised regenerative medicine industry in Scotland, building on excellentacademic research and collaborating with a robust commercial sector to deliver all aspects of the innovation valuechain in order to translate health-related benefits to the economy of Scotland and to healthcare internationally.The Regenerative Medicine value chain needs to be fully embedded in the wider Scottish Life Science value systemin order to contribute to building a coherent innovation ecosystem for life sciences as a whole.Our Strategy Refresh addresses supply side issues by continuing to build an inclusive community of companies andpublic sector organisations which can appropriate value from intermediate points along the value chain in theshort to medium term whilst maintaining a long-term focus on the development of a new generation oftherapeutics.It recognises that the international calibre of Scottish academic science and clinical medicine cannot be taken forgranted, that we need to be cognisant of the consolidation and focussed investment apparent amongst ourinternational competitors and that further investment and enhanced collaboration across the Scottish academic,business and healthcare communities is key to building critical mass. 20
  21. 21. It addresses demand side issues including the contribution NHS Scotland can make to the creation of market pullthrough piloting and adoption of new technologies and also takes cognisance of the contribution the sector canmake in the long-term to the health and quality of life of the Scottish people.Whilst individual components of the Scottish offering in terms of the academic, commercial and clinical sectors areall vital strengths, in our opinion the basis of our competitive advantage is our ability to bring these assets togetherin a chain linked value system, built on all key aspects of life science innovation in Scotland, capable of translatingproducts through to clinical application - across the so called Valley of death for new product development. As anation we need to hone this value system through smart, targeted investment in both the individual componentsof the chain and the linkages between them. We need to leverage this position to drive products through tocommercial and clinical translation faster than our competitors, and we need to aggressively pursue opportunitiesfor international collaboration and business.Collaboration and integrationThere has been, over the last year or so, a significant increase in the investment and activity aimed at developingnew products and therapies utilising stem cell technology in the UK; the Cell Therapy Catapult Centre; the Strategyfor UK Life Sciences7 and most recently a Strategy for UK Regenerative Medicine27 published by the MRC, BBSRC,EPSRC, ESRC and TSB. Scottish Enterprise has also invested, with the UK Stem Cell Foundation, to create a newfund to support Scottish research.All of these initiatives provide opportunities for Scotland. Edinburgh has been identified as a partner for theCatapult, the UK Life Sciences strategy points to best practice in Scotland s NHS and the MRC Centre forRegenerative Medicine will play a key role in the Research Councils plans for Regenerative Medicine. Indeed thekey areas for action under this strategy, such as clinical delivery, product development, therapeutics andunderpinning research are already areas where Scotland has a lead.On a global level there is the California Institute for Regenerative Medicine (CIRM) and the Kyoto UniversityInstitute for Integrated Cell-Material Sciences (iCEMS) both of which have signed collaboration agreements withScotland. There is also the newly formed Canadian Centre for the Commercialisation of Regenerative Medicine(CCRM) which aims to drive commercialisation forward and is focused on international collaborations. Scotland isparty to a collaborative project to forge closer economic ties with Canada in regenerative medicine.Scotland must be capable of interacting with, having influence over and integrating into its own strategy the valuethat these initiatives will generate. Unless Scotland has an organisation coordinating activity the centre of gravityfor leadership, at least in the UK, will be dominated by the Cell Therapy Catapult and Scotland will be left to followrather than play a leadership role. To succeed we must collaborate on a global scale and have a single entitymanaging the interface. Within Scotland we must connect the academic, commercial and clinical environments to 21
  22. 22. drive translation forward but in doing so we must also consider the donor, manufacturing, patient continuum.These represent different cultures and values but together are essential for success.This proposal calls for a single organisation to be formed, with a strong brand identity, that would be the singlepoint of contact for interaction within Scotland, driving strategy and ensuring Scotland is globally connected andleveraging the many external initiatives to best deliver. Effective coordination and collaboration within Scotland iskey. The way we collaborate and can make things happen is a recognised strength which we must hone anddevelop. This will provide the hook to attracting companies to move here or conduct their clinical trials here. Theorganisation would have a focused sales function, (working alongside SDI) expert in what Scotland can offer theworld, empowered to negotiate and measured against specific targets for inward investment. By attractingcompanies to invest here Scotlands service sector growth will be supported by private rather than public funds.Strategic Actions:1. Ensure Scotland is seen as the go to location in Europe for companies looking to undertake clinical trials andassociated high-value manufacturing for new cell therapies. Build on Scotland s proven clinical development andsupply chain expertise by attracting significant additional inward investment.By end of 2012, establish a dedicated, multi-skilled professional sales team to support and enhance existing SDI-led sales activity. This will: Ø potentially deliver 2 new clinical trials per year to Scotland; Ø provide significant additional business to Scottish supply chain companies, with a potential economic impact of £500m by 2020; Ø support and enhance the marketing efforts of individual companies; Ø work closely with, and build on the early success of, Health Sciences ScotlandBuild on international linkages. Participation in CIRM calls, by mid 2013 establish stronger linkages with keyinternational locations e.g. Canada, China, India2. By mid 2013, establish one or more high growth potential companies based in Scotland, focused ondeveloping new therapeutics in regenerative medicineThese companies will act as a focus for commercial development, provide an opportunity to attract and retainstrong management teams and scientists; and act as a magnet to attract investors. These companies should focuson commercialising some of the therapeutic development programmes already in clinical development in theacademic and NHS environment, maximising the potential for the company top succeed, and maximising thepotential for a new generation of therapies to benefit the health and wealth of the Scottish population. 22
  23. 23. 3. Facilitate growth in the number and size of Scottish SMEs participating in regenerative medicine marketsBuilding on the success of the Scottish Stem Cell Network and Roslin Cells, by the end of 2012: Ø Drive greater linkages between businesses and the academic and clinical communities across Scotland through a single, knowledgeable point of contact Ø Work with the industry to scope, develop and deliver multi-partner, multi-disciplinary collaborative research and development programmes to address key challenges and bottlenecks for the industry. The aim would be to establish 1 programme within the first 6 months of operation, and approximately 2 new programmes per year thereafter. Ø Improve the focus on business of these sectors and provide connectivity with other parts of the life sciences and physical sciences communities. Ø Provide problem-solving capability both on a technical and quality / regulatory level either directly or through linkage to other companies and institutions. Ø Drive products through the Translational Funnel Ø Provide access to regulatory, patent and legal expertise; Ø Work with Universities, the NHS and other organisations to accelerate and ease the transfer of IP, for example by preparing IP circulars under the Easy IP scheme4. NHS Scotland as a smart customer and early adopterNHS Scotland has the infrastructure to support the growth and development of the Regenerative Medicine sectorand facilitate the development of a local market. Rapid adoption is essential to the future long-term health and ofthe Scottish people; and the development of credible, viable reimbursement mechanisms by a major healthcareprovider will encourage reimbursement in other healthcare environments globally. Ø Working in partnership with the NHS, initiate pharmacoeconomic impact assessment for three candidate therapies by the end of 2012, building on the REALISE Roadmap, and establish potential reimbursement models for these therapies; Ø Enhance the role of SNBTS as an interface with NHS Scotland in terms of Cellular Therapeutics adoption. Ø Encourage the SMC to take the most progressive approach to product approval in the developed nation world;5. As highlighted in the UK Regenerative Medicine strategy, continue to focus on support for triadic partnershipsand networking between academia, business and the health service both on a local and national basis and as adriving force for the sector. 23
  24. 24. 6. Continue to build research excellence in Scottish Universities in order to gain further understanding of diseasemechanisms and to feed the pipeline of potential novel therapeutics.Work with the Scottish Funding Council to ensure Scottish Universities capture a significant proportion of UKfunding for regenerative medicine, for example: Ø Ensuring that the Scottish Centre for Regenerative Medicine is one of the main centres of the UK Regenerative Medicine Platform; Ø Ensuring Scotland retains and enhances its position for regenerative medicine funding in the UK;Continue to encourage an industry-led, joined up Public Sector approach to supporting initiatives like the Bloodproject, to help overcome barriers to collaboration between Scottish Universities, the NHS and businessesRecommendationWe believe that Scotland requires an organisation, or organisations that provide the following functions overthe next 5-10 years: Ø Not for profit, core funded and focused primarily on supporting economic growth in the Regenerative Medicine sector. Ø Strong brand identity and presence. Ø Linkage across the academic, commercial and clinical sectors. Ø cGMP and development laboratories. Ø Strong focused sales team Ø The ability to establish and manage multi-partner collaborative projects. 24
  25. 25. References1. Rumelt R. Good Strategy / Bad Strategy. Profile Books, London. 2011.2. ScienceWatch3. Ekogen. Evaluation of Scottish Stem Cell Network (SSCN) Final Report. February 2012.4. Court of Justice of the European Union: Judgment in Case C-34/10. Press Release no 112/11, Luxembourg 18October 2011.5. California Institute of Regenerative Medicine www.cirm.ca.gov/Video_SpotlightLeukemia6. Scottish Life Sciences Strategy 2011: Creating Wealth, Promoting Health. 2020 Vision.7. Department of Business Innovation and Skills. Strategy for UK Life Sciences. December 2011.8. Department of Business Innovation and Skills. Taking stock of regenerative medicine in the United Kingdom.July 2011.9. The Scottish Government Economic Strategy 2011.10. www.scotland.gov.uk/Topics/Statistics/Browse/Economy.11. Life Sciences Key Sector Report Scottish Government, Nov 2009.12. www.healthsciencesscotland.com13. www.sdi.co.uk/sectors/life-sciences/sub-sectors/stem-cell-research/strengths.aspx14. Scottish Enterprise and Scottish Government Analysis using source book definition of Life Sciences.15. Tissue Engineering, Cell Therapy and Transplantation: Products, Technologies & Market Opportunities,Worldwide, 2009-2018.16. Health Economic Research Group Brunel University, Office of Health Economic, RAND Europe for the MedicalResearch Council, Wellcome Trust and Academy of Medical Sciences: Medical Research: What s it worth?Estimating the economic benefits from medical research in the UK. November 2008.17. World Health Organisation Health statistics and health information systems.www.who.int/healthinfo/statistics/nortality/en/index.html18. Department for Business, Innovation and Skills: Strategy for UK Life Sciences.19. Dr Hermann Hauser. The current and future role of Technology and Innovation Centres in the UK.20. UK National Statistics. www.statistics.gov.uk/hub/population/ageing/older-people/index.html accessed March2012.21. General Register Office for Scotland. www.gro-scotland.gov.uk/files2/stats/high-level-summary/1198/j1119804.htm accessed March 2012.22. The Scottish Health Survey: Older People s Health. 2011.23. Charles River Life Sciences Survey 2011.24. Building a Health service Fit for the Future, Scottish Executive 2005.25. The Scottish Government. Achieving sustainable quality in Scotland s healthcare: a 20:20 vision. September2011. 25
  26. 26. 26. Department of Health: Innovation Health and Wealth, Accelerating Adoption and Diffusion in the NHS.December 2011.27. A Strategy for UK Regenerative Medicine. Technology Strategy Board, March 2012.28. Finance, Innovation and Growth: European Policy Brief February 2012.29. Scottish Enterprise Business Plan 2012-2015 26

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