The Commercialization of Stem Cells - June 2015 By, ANNA CAULDWELL, PHD ANALYST, CNS, AUTOIMMUNE/INFLAMMATION & OPHTHALMOLOGY

1. ANNA CAULDWELL, PHD
ANALYST, CNS, AUTOIMMUNE/INFLAMMATION
& OPHTHALMOLOGY
The Commercialization
of Stem Cells

2. 22

3. Recent advances have shown that stem cells can provide truly restorative and disease-
modifying treatment. Stem cells have been used to successfully restore sight to those with
vision loss and products are in development for some of the most important and intractable
chronic conditions. These treatments offer greater potential over palliative ones and so
expectations riding on these therapies are high. Here, we investigate the involvement of
biotech and pharma companies in this high-reward, but also high-risk industry.
Historical trends
Citeline’s Pharmaprojects tracks industry-sponsored drug development for human disease since 1980
and since 1995 we have additionally been snapshotting key data points each year. Figure 1 profiles a
year-on-year comparison of the number of stem cell therapies by phase of development. Perhaps
unsurprisingly, the overall trend is of a considerable increase in the number of stem cell therapies in every
phase of development over time. Stem cell therapies started to be developed in the late 1990’s; however,
it wasn’t until the early 2000’s following the discovery of human embryonic stem cells that this area really
started to take off, driven by high expectations about their therapeutic potential. There was an upsurge
in commercial interest and several specialist cell therapy companies were launched whose focus was
on the translation of research into commercially successful products. Recently, there has been a
considerable expansion of late stage candidates — there are currently 87 products in Phase II, Phase III
or Pre-registration, while in 2010 there were only 18. The space is clearly maturing with talk of pivotal
trials becoming commonplace.
Figure 1. Trends in Stem Cell Therapy Development Over Time
0
20
40
60
80
100
120
140
160
180
200
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
No.oftherapies
Launched
Registered
Pre-registration
Phase III
Phase II
Phase I
Preclinical
Source: Citeline’s Pharmaprojects®
, May 2015
3

4. Figure 2 focuses on the number of drugs currently in each stage of development. This healthy developmental
pipeline has a particularly busy Phase II section with 73 drugs — it is common to see a build-up in this phase
because drugs spend far more time passing through Phase II, than undergoing the much shorter Phase I trials
and so this effect is partly produced by the snapshot nature of the data. Eight stem cell therapies have now
been launched in at least one country in the world (mainly in Australia and South Korea). These products have
been developed to treat osteoarthritis, myocardial infarction, anal fistula, bone regeneration and the
treatment of torn or damaged tendons, ligaments and cartilage. These successes suggest opportunities for
similar clinical candidates to progress.
Figure 2. Number of Therapies by Phase
0 20 40 60 80 10010 30 50 70 90
Launched
Registered
Pre-registration
Phase III Clinical Trial
Phase II Clinical Trial
Phase I Clinical Trial
Preclinical
Where is the development taking place?
Citeline’s Sitetrove was used to investigate where in the world this commercial stem cell therapy research is
being undertaken (Figure 3). A large number of trials sites are located in the US and the EU, but a number of
regional regulations have also had a considerable impact on where products are being developed.
Japan is fast becoming a center of importance thanks to regulatory changes which were introduced
at the end of 2014. Japan formally enacted new legislation governing the development, approval and
use of regenerative medicines. The new laws provide a legal framework designed to encourage the
development of novel regenerative therapies and to speed up product approvals in the sector.
This new approval process is similar to the one used in South Korea. Conditional approvals can now be
granted based on safety and efficacy data from Phase II clinical trials instead of full Phase III programs.
These conditional approvals will allow for commercial sales for up to seven years. (Source: PharmAsia
Japan: https://www.pharmamedtechbi.com/publications/pharmasia-news/2014/12/4/japan-regenerative-
medicine-laws-take-effect-encourage-industry).
Sumitomo Dainippon Pharma is one of the Japanese companies investing in this field. It has a joint venture
with Healios KK to commercialize induced pluripotent cell treatments for macular degeneration. Earlier this
year the U.S.-based Athersys entered into a cell therapy alliance with Chugai (Roche). Chugai will develop
and commercialize Athersys’ MultiStem for ischemic stroke in Japan. The alliance is worth $10 million
Source: Citeline’s Pharmaprojects®
, June 2015
4

5. upfront to Athersys plus additional development and regulatory milestone payments of up to $45 million.
Moreover, as recently as April this year Takeda announced that it will work with the Center for iPS Cell
Research Application (CiRA) of Kyoto University on stem cell research in a 10 year program to develop
clinical applications of induced pluripotent stem cells in areas such as heart failure, diabetes mellitus,
neurological disorders and cancer immunotherapy.
Whilst this new regulation enables stem cell therapies to reach the market more quickly, some critics are
concerned about the lack of rigorous testing and argue that stem cell therapies which aren’t assessed in
Phase III trials should only be designated experimental treatments.
Figure 3. Industry-Sponsored Trial Site Locations
Which are the most commercially attractive
therapeutic areas to invest in?
In order to determine which disease areas are attracting the most R&D investment, we grouped the
indications in Pharmaprojects, as shown in Figure 4. Cardiovascular is the hottest area for stem cell research,
accounting for more than a quarter of all stem cell therapies currently in development. The Phase III pipeline
is dominated by therapies for heart failure, angina and myocardial infarction, making it the most advanced
pipeline among all other therapy areas (Table 1). Currently, conventional management for heart failure does
not address loss or scarring of cardiac muscle cell mass, resulting in a high level of unmet medical need and
an opportunity for regenerative stem cell therapies. A mix of speciality and large pharma are trying to
capitalise in the cardiovascular space, including Bioheart, Teva and Baxter International. Baxter is currently
Source: Citeline’s Sitetrove®
, June 2015
5

6. running a pivotal Phase III trial to evaluate the efficacy and safety of adult autologous CD34+ stem cells to
increase exercise capacity and amelioration of anginal symptoms in patients with chronic myocardial
ischemia, one of the most severe forms of coronary artery disease. The study has enrolled approximately
300 patients in over 40 clinical sites in the US (Trialtrove: https://citeline.com/wp-content/uploads/
TrialtroveID-141015.pdf).
A large number of stem cell products are also in development in the metabolic and neurological
therapeutic areas. Some of the key indications under investigation include hepatic dysfunction, bone
regeneration, spinal cord injury and Parkinson’s disease. Ophthalmology is another up and coming area
for stem cell therapies with treatments for corneal injury, macular degeneration, optic neuritis, macular
oedema and diabetic retinopathy in the clinic. In December last year the EMA approved Holoclar, a
treatment for moderate to severe limbal stem cell deficiency due to physical or chemical burns to the
eye(s) in adults. This was the first advanced therapy medicinal product containing stem cells to
be approved in the EU.
When considering the most commercially attractive cell type to invest in, mesenchymal stem cells
(MSCs) are currently ahead of the field. The ethical concerns and potential for teratoma formation with
embryonic stem cells, and induced pluripotent stem cells, have compromised their utility; whereas,
the unique properties of MSCs have led to their intense investigation as a cell-based therapeutic strategy.
The advantages of MSCs are that they are easily isolated, can be amplified from the bone marrow, are
immunologically tolerated as an allogeneic transplant, and have multi-lineage potential.
16
27
5
30
25 28
14
4
8
17
31
14
15
4
6
6
7
0
10
20
30
40
50
60
70
80
Autoim
m
une/
Inflam
m
ationCardiovascularD
erm
atological
G
astrointestinalG
enitourinary
Infectious
D
isease
M
etabolic
N
eurological
O
ncologyO
phthalm
ology
Respiratory
Figure 4. Number of Stem Cell Products by Therapeutic Area
No.oftherapies
Phase III
Phase II
Phase I
Preclinical
Source: Citeline’s Pharmaprojects®
, May 2015
6

7. Table 1. Stem Cell Therapies in Phase III Development or Pre-Registration
THERAPY DESCRIPTION ORIGIN INDICATION COMPANY
PHASEIII
MyoCell
myoblasts removed from a patient’s
thigh muscle, isolated, grown through
their proprietary cell culturing
process, and injected directly in the
scar tissue of a patient’s myocardium
autologous heart failure Bioheart
carlecortemcel-l/
StemEX
ex vivo expanded umbilical cord
blood cell graft
allogeneic
haematopoietic
reconstruction after
chemotherapy in
haematological
malignancies
Gamida Cell;
Teva
stem cell therapy,
Baxter
blood-derived selected CD34+
stem cell therapy
autologous angina
Baxter
International
CX-601
suspension of allogeneic expanded
adipose-derived stem cells
allogeneic anal fistula TiGenix
CEP-41750/Revascor
adult-derived mesenchymal
precursor cells
allogeneic heart failure
Mesoblast;
Teva
C-Cure
bone marrow-derived stem cells
differentiated into cardiopoietic cells
autologous heart failure Celyad
mesenchymal bone
marrow-derived stem
cells, Stemedica-1
ischemic tolerant mesenchymal
stem cells
allogeneic myocardial infarction Stemedica
mesenchymal
precursor cells,
allogenic, BMT,
Mesoblast
adult-derived mesenchymal
precursor cells
allogeneic
stem cell engraftment;
unspecified haemato-
logical cancer
Mesoblast;
Teva
PREOB
osteoblastic cells derived from bone
marrow mesenchymal stem cells
autologous
osteonecrosis; fracture
healing
Bone
Therapeutics
Cerecellgram-Spine
bone marrow derived mesenchymal
stem cells
autologous spinal cord injury Pharmicell
Cerecellgram-Stroke
bone marrow derived mesenchymal
stem cells
autologous cerebral ischaemia Pharmicell
rexlemestrocel-L,
Mesoblast
proprietary adult-derived
mesenchymal precursor cells
allogeneic
chronic lower back pain
due to moderate
intervertebral disc
degeneration of the
lumbar spine
Mesoblast
PRE-REG
Stempeucel
ex vivo cultured adult bone
marrow-derived mesenchymal
stem cells
allogeneic
limb ischaemia;
osteoarthritis
Stempeutics;
Cipla
GSK-2696273
CD34+ haematopoietic stem/
progenitor cells engineered ex vivo
with a retroviral vector encoding the
therapeutic gene adenosine
deaminase
autologous
severe combined
immunodeficiency
GlaxoSmith-
Kline
Source: Citeline’s Pharmaprojects®
, May 2015
7

8. Which companies are investing in the industry?
So who are the key players in this field? We’ve pulled out the companies with four or more products in
development and it’s apparent that most of these are cell therapy specialists (Figure 5). Teva bucks the
trend by being the only top 20 pharmaceutical company on the list.
Biotime is the biggest player in the stem cell field with 9 products in development. Through their
subsidiary companies Cell Cure Neurosciences and OrthoCyte, they are developing OpRegen, (a cell-
based therapy for age-related macular degeneration), and therapies for arthritis. In addition, their
subsidiary ReCyte Therapeutics is using proprietary technology to reverse the developmental aging of
human cells to manufacture young vascular progenitors for the treatment of age-related vascular disease.
Australian company Mesoblast is another key player with 8 stem cell therapies in development.
Mesoblast’s allogeneic regenerative medicine products focus on repair of damaged tissues and
modulation of inflammatory responses in conditions with significant unmet medical needs. The company’s
clinical product candidates focus on four major areas: orthopedic diseases, cardiovascular diseases,
systemic diseases and improving outcomes of bone marrow transplantation in patients with cancer or
genetic diseases. Mesoblast’s remestemcel-L was acquired from Osiris Therapeutics as an off-the-shelf
adult mesenchymal stromal cell product, which has been approved in several countries for acute graft-
versus-host disease, and it is expected to be launched in Japan later this year. Mesoblast had a further
boost recently with Celgene confirming that it will invest $45 million in the company.
Figure 5. Companies With Active Stem Cell Therapy Pipelines
7
4
2
3
2 2
1
3
1
4
1
2
4
2
2
2
1 3
1
1
3 3 1
2
1
2
0
1
2
3
4
5
6
7
8
9
10
BioTim
e
M
esoblast
Pluristem
Teva
Stem
edica
BharatSerum
s
and
Vaccines
Bone
Therapeutics
CH
A
Bio
&
D
iostech
O
cata
Therapeutics
Pharm
icell
Xcelthera
NumberofTherapies
Phase III
Phase II
Cell Therapy
Phase I
Preclinical
Phase III
Phase II
Pharma
Preclinical
Phase III
Preclinical
Biotechnology
Source: Citeline’s Pharmaprojects®
, May 2015
8

9. The pharmaceutical industry has embraced stem cells as a tool in drug discovery. Most of the major
pharmaceutical companies are using embryonic stem cells or adult stem cells for internal drug discovery
programs. These internal efforts are often enhanced through the expertise of external partnerships with
academics or biotech companies. However, big pharma has historically been slow to invest in developing
stem cell-based regenerative medicine. The barriers facing this industry will be dependent on the type of
cell-based approach under development, but there are also a range of more general concerns that have
worried investors. These include a lack of familiarity with the business model, pricing, concerns over
whether the products can be manufactured on a commercial scale, regulatory concerns and the question
of whether they can be proven safe and offer substantial benefit over existing therapies.
Despite the concerns these truly restorative and disease-modifying treatments offer considerable promise
and the involvement of big pharma has the potential to dramatically support the space in terms of
providing finance, the capability of conducting Phase II/III clinical trials, expertise in communicating with
regulators and lobbying for regulation in their favour, as well as the potential to mass produce and enable
worldwide distribution of cell therapies.
Table 2 shows the stem cell products being developed by the top pharma companies. There’s been a
steady increase in the number of therapeutic products in development year-on-year since the late 2000’s
with many well-recognised names joining the fray. For several companies the “tipping point” has been
reached and the potential benefits are starting to outweigh the risks. Indeed, not only has there been an
increased number of pharmaceutical stem cell assets; but also the opening of large separate units and
programs (e.g. Neusentis of Pfizer) and a trend for more partnership with academic institutions, which
illustrates the growth in this sector. It seems that big pharma has moved from being curious about the stem
cell therapy industry to being increasingly committed.
In contrast to the key players shown in Figure 5, who were mostly developing their own products, the big
pharma companies are more likely to be in-licensing products for development. These companies often
take the observer’s chair as a company works to complete a crucial leg of the R&D journey. Teva has the
most products in active development with 7 in total. The company has licensee agreements in place with
Mesoblast, BioTime and Gamida Cell. In addition, Teva has three products in Phase III development
including Revascor which is currently in a global, pivotal, 1,700-person trial in congestive heart failure
(Trialtrove: https://citeline.com/wp-content/uploads/TrialtroveID-125374.pdf).
Novartis broadened its position in the stem cell space in 2014 by investing $35 million in Gamida Cell.
This development came after Novartis announced in September 2013 that it had partnered with Regenerex
to gain access to their stem cell technology. Johnson & Johnson is another big name which has recently
shown its commitment to this field by betting $12.5 million on the Capricor Therapeutics cell therapy
program for cardiovascular applications, notably CAP-1002, through its subsidiary, Janssen Pharmaceuticals,
Inc. In addition, through Janssen Pharmaceuticals, J&J invested in ViaCyte’s VC-01 combination product
being developed for type 1 diabetes. The agreement provides Janssen with an option in the future to
consider a transaction related to the VC-01 combination product.
Despite these investments, there is also an increasing realization of just how long a road stem cell research
has to travel and this has triggered some companies to back out of the area. For instance, Osiris offloaded
its mesenchymal stem cell platform and Prochymal to Mesoblast, after Sanofi decided not to sign up to a
$1.25 billion collaboration that came with a $130 million upfront payment. Even so, other companies are
showing that they are still prepared to invest — Chiesi and AstraZeneca entered the space just this year
with their own preclinical candidates.
9

10. Table 2. Stem Cell Therapies Being Developed by Big Pharma
THERAPY DESCRIPTION COMPANY
PRECLINICAL
anticancers,
MedImmune
anti-cancer stem cell therapies to directly and specifically attack tumor cells
AstraZeneca
(Originator)
epidermolysis
bullosa therapy,
Chiesi
ex-vivo-expanded autologous human keratinocytes containing
epidermal stem cells transduced with a LAMB3-encoding retroviral
vector for epidermolysis bullosa
Chiesi (Originator)
HLS-001
iPS cell-derived retinal pigment epithelial cells for age-related
macular degene
Dainippon Sumitomo
Pharma (Licensee)
PF-05206388
embryonic stem cell derived retinal pigment epithelium for wet
age-related macular degeneration
Pfizer (Originator)
Multistem multipotent adherent progenitor cells for ischemic stroke Roche (Licensee)
Parkinson’s therapy,
Cell Cure
embryonic stem cell-derived mid-brain progenitor cell therapy Teva (Licensee)
NeurArrest
embryonic stem cell-derived neural progenitor cell therapy for
multiple sclerosis
Teva (Licensee)
PHASEII
Cenplacel-L placental-derived adherent stem cell product for Crohn’s disease Celgene (Originator)
SB-623 allogeneic neural stem cell therapy for cerebral ischaemia
Dainippon Sumitomo
Pharma (Licensee)
GSK-2696275
ex vivo gene therapy based on insertion of a lentiviral vector expressing
human Wiskott-Aldrich syndrome protein into autologous CD34 positive
haematopoietic stem cells
GlaxoSmithKline
(Originator)
GSK-2696274
ex vivo gene therapy based on insertion of a lentiviral vector expressing
arylsulfatase A (ARSA) into autologous CD34 positive haematopoietic
stem cells for metachromatic leukodystrophy
GlaxoSmithKline
(Originator)
CAP-1002
allogeneic cardiosphere-derived stem cells for heart failure and
myocardial infarction
Johnson & Johnson
(Licensee)
HSC-835
LFU835-expanded umbilical cord blood haematopoietic stem cells for
leukaemia & lymphoma
Novartis (Originator)
Multistem
multipotent adherent progenitor cells for irritable bowel disease and
ulcerative colitis
Pfizer (Licensee)
MPC-25-IC
allogeneic stem cell therapy based upon proprietary adult-derived
mesenchymal precursor cells for intra-coronary treatment of acute
myocardial infarction
Teva (Licensee)
PDA-002
placental derived stem cells for peripheral arterial disease & diabetic
foot ulcers
Celgene (Originator)
PHASEIII
Stem cell therapy,
Baxter
blood-derived selected CD34+ st em cell therapy for angina
Baxter International
(Originator)
Revascor
allogeneic stem cell therapy based upon its proprietary adult-derived
mesenchymal precursor cells for heart failure & myocardial infarction
Teva (Licensee)
MPC-CBE
allogeneic stem cell therapy based upon its proprietary adult-derived
mesenchymal precursor cells for bone marrow transplantation
Teva (Licensee)
Carlecortemcel-l
cord blood-derived ex vivo expanded CD34-positive stem/progenitor
cells for haematopoietic reconstruction after chemotherapy in haemato-
logical malignancies
Teva (Licensee)
VC-01
pancreatic endocrine ß-islet cells derived from embryonic stem cells for
type I and II diabetes
Pfizer (Licensee)
OpRegen
retinal pigmented epithelial cells derived from human embryonic stem
cells for dry age-related macular degeneration
Teva (Licensee)
CNTO-2476 allogeneic umbilical cord tissue-derived cell therapy
Johnson & Johnson
(Originator)
PRE-REG
GSK-2696273
autologous stem cell therapy that consists of CD34+ haematopoietic
stem/progenitor cells engineered ex vivo with a retroviral vector
encoding the therapeutic gene adenosine deaminase for ADA severe
combined immune deficiency
GlaxoSmithKline
(Originator)
Stempeucel
ex vivo cultured adult bone marrow-derived mesenchymal stem cell
product for osteoarthritis & critical limb ischemia, other indications
Cipla (Licensee)
Source: Citeline’s Pharmaprojects®
, May 2015
10

11. Conclusions
The worldwide stem cell therapy market and development pipelines are poised to grow at a considerable
rate. Increased global awareness, as well as funding and commitment from larger pharmaceutical companies,
are propelling the growth of this industry. Allogeneic stem cell therapies enable the treatment of many
patients from the same cell bank in an off-the-shelf manner and we expect that these therapies will offer the
greatest commercial opportunities. The advantages of allogeneic stem cell products over autologous
products are that they have wider therapeutic applications and the batch to batch consistency means greater
product reproducibility for clinical trial outcomes and widespread clinical use. The opportunity for batch
production also significantly lowers costs compared with patient-specific autologous products and pricing
is critical to both patient accessibility and therapy development. Currently approved allogeneic stem cell
therapies include remestemcel-L (Mesoblast) for graft-versus-host disease and Cartistem (Medipost).
To develop stem cell therapies on a commercial scale it’s essential that stem cell populations can be expanded
successfully. Much work has been done to expand the growth of stem cells from classical cell culture flasks to
novel multilayer vessels, microcarriers and bioreactors; however cell expansion still remains a major challenge.
Many biotech and pharma companies are developing their own proprietary processes to facilitate this and, in
addition, are developing technologies for cryopreservation. Due to the importance of cell expansion and cell
preservation we expect this to be an area of considerable innovation in the coming years.
Overall, despite the complexity of many diseases and the risks involved in developing stem cell therapies,
the pace of research in this industry continues to increase, with new advances announced regularly. It will be
interesting to monitor this field over the coming decade to see if its considerable potential can be realised.
11

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