Scotland has significantly invested in building a robust infrastructure for regenerative medicine, leveraging its strengths in stem cell research to develop a competitive industry. The strategy aims to overcome existing challenges and focuses on collaboration among academia, business, and healthcare to drive innovation and economic growth, especially in response to an aging population facing chronic diseases. With the maturation of this sector, Scotland seeks to establish itself as a global leader in regenerative medicine, benefiting the economy and health of its citizens long term.

1. Regenerative Medicine
Scotland
Collaborate Innovate
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2. Foreword
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 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.
Marc Turner, Professor of Cellular Therapy and Medical Director SNBTS
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3. Section Page
Forward 2
Executive Summary 4
Background. 5
Progress. 8
Caerus 10
Challenges and Opportunities 11
Strategy Refresh 16
Critical Issues 17
Guiding Philosophy 20
Strategic Objectives and Actions 22
References 25
References 30
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The Scottish Centre for Regenerative Medicine

4. Executive Summary
Scotland has internationally competitive strengths in stem cell research and has made very significant public sector
investment over the past 8 years in building physical and human capacity to support the development of the
Regenerative Medicine sector. The case for Regenerative Medicine products is compelling when considered in the
context of an ageing population and the projected increase in the prevalence of chronic degenerative diseases
such as cardio-vascular disease, diabetes mellitus and liver failure. Unless a breakthrough technology, such as
regenerative 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 a
global basis, the regenerative medicine sector has not yet matured to the point where private equity is sufficiently
available to build on this public investment and create a viable, self-sustaining commercial sector. A strategy
refresh is required to ensure that Scotland s competitive position is not eroded; that other countries who continue
to 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 the
comparative advantage Scotland now enjoys to deliver long term economic, health and social benefit to the
nation.
Our Vision is to develop a globally recognised regenerative medicine industry in Scotland, building on excellent
academic research and collaborating with a robust commercial sector to deliver all aspects of the innovation value
chain 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 system
in 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 and
public sector organisations which can appropriate value from intermediate points along the value chain in the
short to medium term whilst maintaining a long-term focus on the development of a new generation of
therapeutics.
It recognises that the international calibre of Scottish academic science and clinical medicine cannot be taken for
granted, that we need to be cognisant of the consolidation and focussed investment apparent amongst our
international 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 pull
through piloting and adoption of new technologies and also takes cognisance of the contribution the sector can
make in the long-term to the health and quality of life of the Scottish people.
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5. Whilst individual components of the Scottish offering in terms of the academic, commercial and clinical sectors are
all vital strengths, in our opinion the basis of our competitive advantage is our ability to bring these assets together
in a chain linked value system, built on all key aspects of life science innovation in Scotland, capable of translating
products through to clinical application - across the so called Valley of death for new product development. As a
nation we need to hone this value system through smart, targeted investment in both the individual components
of the chain and the linkages between them. We need to leverage this position to drive products through to
commercial and clinical translation faster than our competitors, and we need to aggressively pursue opportunities
for international collaboration and business.
Background
Scotland has significant intellectual capital in the field of stem cell and developmental biology and is ranked
number one in the world for stem cell research 2. Prominent contributions to the international field include the
cloning 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 and
enhance the development of the emergent field of stem cell biology and the eventual realisation of commercial
and 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, the
attraction and retention of key talented people, funding for flagship projects and the promotion of Scotland s stem
cell / regenerative medicine capacity on the international stage (Figure 1).
Hepatocytes derived from skin cells using iPS technology, David Hay MRC-CRM
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6. Figure 1: The Stem Cell Intervention Framework
Three 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
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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
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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 BioIncubator
In addition, the BioQuarter complex, with SCRM at its heart, brings together academics, business, clinicians and
patients to create a compelling competitive edge in cellular therapeutics development that few can emulate. In the
broader Scottish context investment in unique initiatives such as Generation Scotland, Health Sciences Scotland
and 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 to
Scotland; and from companies diversifying their activities to create new products and services to support the
industry sector. Crucial to realising these benefits is the aim of attracting companies and inward investment by
making Scotland the preferred location for regenerative medicine development (vide infra: Sections 9 and 10).
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8. Progress
An inclusive Monitoring & Evaluation Framework was developed by consultants SQW to enable progress against
the projected economic benefits from the SCIF to be regularly tracked against the 2004 baseline. Monitoring was
suggested 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 of
networks ). An updated assessment was produced in 2011 (Figure 3).
Figure 3: SCIF Monitoring and Evaluation Framework
Economic impact
The SCIF was approved as a bold long-term investment. Medium-term economic impact (by 2015) was expected to
come from three main areas of activity: recruitment and retention of academic staff; company creation through
start-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
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lines and now the processes and products created with those cell lines cannot be patented in Europe .
Figure 4: Progress against medium term targets 2012
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9. This does not appear to have adversely affected the development of the industry thus far, however this problem
needs to be addressed through continued progress in the development of research and clinical GMP grade induced
Pluripotent Stem cells (iPSC) and related technologies.
Innovation and company growth
One of the key highlights of the focus on stem cells has been in the emergence of a comprehensive commercial
supply 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 tools
and reagents.
In 2011, 24 companies are engaged in the sector, forming a comprehensive supply chain. This supply chain
includes spin-outs or start-ups e.g. Deliverics, Sistemic and Pharmacells and major multi-nationals e.g. Charles
River and Life Tech.
Inward investment
Attraction of inward investment from companies using or developing stem cell technology has been a major focus
of Scottish activity. A detailed understanding ( segmentation ) of customer types and their needs has been
developed, 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 products
and services for the stem cell market, including Charles River, Aptuit (Catalent), Millipore and Life Technologies
whilst BioReliance has recently been acquired by Sigma Aldrich. There is an opportunity to use Scotland s stem cell
expertise and the additional components of the Regenerative Medicine value chain already in place to help anchor
these companies In Scotland.
Progress to clinic
Scotland has collectively delivered two cell therapy products into clinical practice: the first, the pancreatic islet
programme is a collaboration between the Scottish Liver / Pancreas Transplant Unit and the SNBTS which
commenced in January 2011. From a standing start, it has grown to represent 50% of the UK s activity with 10
transplants carried out in the last 12 months. The programme has achieved a transplantation rate from donor to
recipient 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 patients
internationally with post-transplant lympho-proliferative disease. This is one of the first cellular therapies in the
country to achieve a MHRA Manufacturing Licence. The first CTL have been released to treat a child with refractory
EBV-driven non-Hodgkin s lymphoma.
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10. In addition there are several clinical cell therapy studies ongoing, including the ReNeuron trial of a neural stem cell
product for patients with stroke in Glasgow; a trial of corneal epithelial stem cells which has recruited its first
patients in Edinburgh; and a study of CD133 cells in chronic liver failure which is due to open in Edinburgh in May
2012. Advanced Cell Therapies (ACT) are intending to open a second site for their European clinical trial of hESC
derived retinal cells in Scotland in 2012. In comparison the California Institute of Regenerative Medicine, despite
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its $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 in
human and physical capacity building over the last 8 years. Scotland has positioned itself at the forefront of
international developments in this field. Indeed the development of cellular therapeutics and regenerative
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medicine has become a cornerstone of the Scottish Life Sciences Strategy as it has in a number of other
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countries , reflecting the predicted sector growth and the resultant long-term economic, health and knowledge
benefits that are likely to accrue to countries capable of competing in this space.
Caerus
We believe Scotland has reached a critical inflection point or Kairos the right or opportune moment where the
investment made over the last 9 years can be brought together to form the bedrock on which to build a strong and
sustainable 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 3
outcomes:
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.
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These outcomes reflect the imperatives laid out in the Scottish Government s Economic and Life Sciences
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Strategies (vide infra).
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11. Challenges and Opportunities
Contributing to the Scottish economy
Like all advanced economies Scotland has suffered from the global financial crisis of 2007 and the ensuing
recession 9. In 2010/11 Scotland s Gross Domestic Product (GDP) was around £145bn and grew by 0.5% in the 3 rd
quarter 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 high
growth potential and the capacity to contribute significantly to the country s economy in the future. Scotland is
home to the UK s second largest Life Sciences cluster, one of the largest in Europe with more than 640 companies
employing more than 30,000 staff11-13. It contributes around £1.5bn of added value (GVA) per annum and turnover
worth £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 the
Regenerative Medicine sector.
Over the last 10 years, much greater evidence has been developed to analyse the potential benefits of investment
in new diagnostics and therapeutics, as well as the timescale to realise these benefits. For example, a 2008 Report
for the MRC, Wellcome Trust and Academy of Medical Sciences showed that every £1 invested in new medical
research by Government in medical science offers a 34% annual return (in perpetuity), but that it takes an average
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17 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.
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The global burden of degenerative disease is enormous and is continuing to grow particularly in low and middle
income countries. A sustainable position in the global market for Regenerative Medicine therapeutics is likely to be
of very significant financial value. Realistically, even by 2020, only a limited number of new therapeutics are likely
to be fully-approved in the major international markets. However significant commercial revenues can be
generated 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.
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12. Developing a robust supply-side industry will help to ensure that the economic benefits are appropriated in
Scotland 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 a
well trained and experienced workforce already working in the Regenerative Medicine sector, Scotland will benefit
from a significant cumulative advantage. In addition, cell therapy products made under a controlled Good
Manufacturing Practice (GMP) process, have a unique profile, a function of (inter alia) the biological
characteristics of the starting human material, the reagents and environment, the culture process and testing
systems used et cetera. As the product progresses through the development and regulatory pathway it becomes
increasingly expensive and time-consuming to switch to new facilities and processes. Finally, it is the
complementarity of the various components of the Scottish Regenerative Medicine value chain which are difficult
to 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 the
longer-term.
The Regenerative Medicine strategy therefore needs to address supply side issues by continuing to anchor an
inclusive community of companies and public sector organisations which can appropriate value from
intermediate points along the value chain in the short to medium term whilst maintaining a long-term focus on
the development of a new generation of therapeutics.
Creating a sustained competitive advantage
Whilst Scotland has made significant investment in, and has considerable strengths in, the Regenerative Medicine
sector, 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.
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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
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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
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the innovation system, economic and social landscape of the countries they operate in .
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14. The Scottish research and business base remains highly competitive but we need to be cognisant of the
consolidation and focussed investment apparent amongst our international competitors. We believe that
further targeted investment and enhanced collaboration across the Scottish academic, business and healthcare
communities is key to building a more robust business base, accelerating new product and service development
and facilitating faster growth of Scottish Regenerative Medicine companies. There is a race between nations to
bring these new cellular technologies to market quickly in order to gain first mover advantage and act as a
platform from which to try to establish a dominant market position in the future. Scotland has a key competitive
strength in its chain-linked system capable of translating products across the so called valley of death from
research laboratory through to initial commercial and clinical application.
Delivering better Healthcare
Like most other developed economies the age structure of
Scotland s population is changing. Between 2000 and 2010 there Box 2: Public Health Burden of
was 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 the
over and 2.2% are over 85 years old. By 2035 the proportion of commonest cause of premature
death accounting for 30% of all
people 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 myocardial
Scotland also has a relatively high burden of ill health. Whilst life infarction is improving, there are
more people alive with chronic heart
expectancy 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 26,778
cancer, 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 58,860
evidence 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 as
coming decades just under 2/3rds of people over the age of 65 £650m in direct health economic
will suffer from a life-limiting disability. Moreover health expenditure and economic losses and
£1.764bn in wider societal costs of
inequality in Scotland is profound the healthy life expectancy
care23.
in the Scottish Index of Multiple Deprivation 15% most deprived
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areas is 8-10 years below that of the Scottish average . The
direct impact of degenerative disorders on the health of
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15. individuals and the resultant burden on the broader health,
economic and social system is exemplified in Box 2 and has been
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recognised as a serious long-term challenge leading to a shift the Box 3: End Stage Liver
emphasis 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 liver
sectors of our healthcare system . This will be a serious challenge
disease deaths from cirrhosis
over the coming decades unless we can take advantage of new have doubled in the past 10
Regenerative Medicine approaches to improving functional years.
capacity in patients with degenerative disorders. Even relatively The only curative treatment is
liver transplantation. In the UK
modest improvements in tissue and organ function may suffice to
there are almost 500 people
move 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 the
their families, wider impact on the Scottish health and social care waiting list are increasingly
system and the ability to return to work (Box 3). common.
Patients with a UKELD score
above 49 typically have a poor
The pressures facing healthcare systems in developed economies
quality of life with frequent
worldwide are similar, even where there are wide differences in hospital admissions and a poor
underpinning financial structure. For example, the current US prognosis, where-as those with
a score less than 49 can
budget projects a doubling of the Medicare and Medicaid budget frequently be managed as
over 10 years from $733bn currently to $1.5tr in 2022. outpatients.
Regenerative therapies targeted
However, the role of the healthcare system in supporting the at patients across this tipping
point could achieve significant
development and adoption of this new generation of diagnostics clinical benefit for a modest
and 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 standard
pharmaceuticals including issues of donor selection and screening,
procurement, bespoke manufacturing, immunological matching and recipient follow-up. Expertise in these areas
along with access to centralised clinical data bases allowing careful patient stratification, clinical trials capability
and resources for intense patient monitoring are critical assets which can be used to attract new companies and
investment into Scotland in order to progress development of their products.
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The Nicholson Report has recognised the contribution the NHS can make to the wider economy through
supporting growth in the domestic life sciences industry, exporting innovation, ideas and expertise, improving the
health and economic productivity of the population, and adopting innovation to improve effectiveness, efficiency
and productivity.
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16. The Regenerative Medicine strategy also needs to address demand side issues including the contribution NHS
Scotland can make to the creation of a market through piloting and adoption of new technologies and the
contribution the sector itself can make to economy, health and social care of Scotland in due course.
Strategy Refresh
With these considerations in mind we initiated an engagement process with the stem cell and regenerative
medicine community around the development of a strategy refresh focused on enabling Scotland to leverage the
investment made thus far in human and physical capital to drive the field forward towards commercialisation and
clinical 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 and
clinical sectors and from across Scotland. There was discussion around the scope of the sector, the development of
a vision statement, the identification of strengths, weaknesses, opportunities and threats, and the derivation of
critical issues. These were subject to further virtual engagement both with the invited group and the broader
community from February April 2012 and informed by the Progress to Therapy meeting 21st 23 rd March 2012.
Field Statement - Regenerative Medicine Scotland: Collaboration, Innovation, Translation
It was considered that the term Regenerative Medicine captures the essence of the developing field and reflects
demand pull rather than academic (stem cells) or technological (cellular therapy) push. As a brand it is reasonably
well established nationally and internationally and is intuitively understood by the public. However the field is
broad in scope and covers near term applications of tools and technologies in (inter alia) disease modelling, drug
discovery, toxicological screening and diagnostic reagents as well as longer-term therapeutic applications in small
molecules and pharmaceuticals, cellular therapies, gene therapy and tissue engineering.
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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
Therapy
Vision Statement.
We will develop a globally recognised regenerative medicine industry in Scotland, building on excellent
academic research and collaborating with a robust commercial sector to deliver all aspects of the innovation
value chain in order to translate health-related benefits to the economy of Scotland and to healthcare
internationally.
Strengths, Weaknesses, Opportunities and Threats
Strengths Weaknesses
Translational 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 Threats
Huge 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.
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18. Critical Issues
A number of issues were identified by the community as critical to the delivery of the Vision, which were
condensed into 5 Critical Issues:
I. Research
Scotland has a strong track record in stem cell and
developmental biology, but also in clinical medicine and related
fields such as chemistry, engineering and informatics. It Box 4: BloodPharma.
currently attracts 11% of the total annualised spend on Blood Transfusion was arguably the
Regenerative Medicine by the UK Research Councils and first cellular therapeutic. Much of
the pioneering work was carried out
Technology Strategy Board27. However, recruitment and in Scotland in the early 19th Century
retention 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 with
Collaboration across complementary skills in Scotland s sufficiency of supply, transfusion
transmitted infections and averse
Universities can leverage large tranches of funding such as that effects persist, particularly in
supporting 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 of
cross-disciplinary programmes are required if we are to build Edinburgh and Glasgow, Roslin Cells
and the English and Irish Blood
world-leading companies of the future. Services have been granted £6m in
funding from the Wellcome Trust
and Scottish Funding Council to
II. Commercial develop GMP-grade red cells from
Scotland 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 Special
building 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 significant
of these are SMEs which often don t have the resources to benefits to international healthcare
engage in extensive negotiations with public sector and to the Scottish economy, but is
also builds generalisable expertise in
organisations or identify potential opportunities and partners the development of this new
on the national and international stage. Supporting business generation of complex scalable
cellular therapeutics.
access to University knowledge and facilities, to the NHS
Scotland clinical environment and to other companies in the
national and international environment is key to supporting the
birth and growth of SMEs in this sector.
As SMEs are particularly vulnerable to financial failure and acquisition before their true potential has been realised
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19. often by non-UK competitors, it is critical to develop companies of scale which are significantly embedded in the
Scottish economy. Creating this service sector will attract domestic and international businesses to develop their
products in Scotland and retain the economic benefits.
III. Clinical
Scotland has a unified healthcare system with excellent data linkage, an infrastructure for managing and
supporting clinical studies and state of the art clinical trialling and imaging facilities. However innovation is usually
patchy and slow, procurement is increasingly focused on cost saving and support for the research and
development agenda is a low priority. The development and implementation of regenerative medicine strategies is
imperative if we are to reduce the long-term burden of chronic disability. Without recognition by the NHS of its
broader and long-term role in supporting innovation and facilitating economic development, and the need to
develop strategic partnerships with the sector to facilitate the growth of a local market as a springboard to global
markets will be slow and poor. Scotland s historic reputation for Medical excellence could and should be leveraged
on the international stage.
IV. Finance
As is the case with most emerging technologies, much of the investment in stem cell sector to date has been
funded by the public and charitable sectors. For example on a UK basis the public sector has invested £200m since
8
2003 and the charitable sector £38m . The relative lack of funding from the private sector is in part due to the
early stage of commercialisation reflected in the size and structure of the industrial sector. Worldwide there are
only 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 28
have only filed 1-5 patent applications to date . The recent Finance, Innovation and Growth European Policy Brief
emphasises the critical role of Government investment in research, development and supporting innovation and
this is reflected in continued public sector investment in the Regenerative Medicine sector elsewhere in the UK
and internationally. Ways need to be found to continue to leverage public, private and philanthropic investment
over the next few years as a bridge across the so-called valley of death .
V. Collaboration
In 2004 fragmentation of the community across professional, institutional and geographic boundaries with
resultant information silos and lack of a collective voice was recognised to be a key problem and one that has been
largely addressed by SSCN. Whilst that organisation is coming to the end of its public funding there is concern
within the community that, in the absence of SSCN or a legacy organisation, that connectivity and voice will
dissipate and a unique collective asset will be lost.
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20. Guiding Philosophy
Whilst individual components of the Scottish offering in terms of the academic, commercial and clinical sectors
are 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 research
laboratory and clinical application.
As a nation we need to hone that value system through further investment in both the individual components of
the chain and the linkages between them; we need to leverage this position to drive products through
commercial and clinical translation faster than our competitors; and we need to aggressively pursue
opportunities for international collaboration and business.
We believe that this strategy will facilitate the development of a globally recognised regenerative medicine
industry 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 Objectives
Our Vision is to develop a globally recognised regenerative medicine industry in Scotland, building on excellent
academic research and collaborating with a robust commercial sector to deliver all aspects of the innovation value
chain 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 system
in 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 and
public sector organisations which can appropriate value from intermediate points along the value chain in the
short to medium term whilst maintaining a long-term focus on the development of a new generation of
therapeutics.
It recognises that the international calibre of Scottish academic science and clinical medicine cannot be taken for
granted, that we need to be cognisant of the consolidation and focussed investment apparent amongst our
international competitors and that further investment and enhanced collaboration across the Scottish academic,
business and healthcare communities is key to building critical mass.
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21. It addresses demand side issues including the contribution NHS Scotland can make to the creation of market pull
through piloting and adoption of new technologies and also takes cognisance of the contribution the sector can
make 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 are
all vital strengths, in our opinion the basis of our competitive advantage is our ability to bring these assets together
in a chain linked value system, built on all key aspects of life science innovation in Scotland, capable of translating
products through to clinical application - across the so called Valley of death for new product development. As a
nation we need to hone this value system through smart, targeted investment in both the individual components
of the chain and the linkages between them. We need to leverage this position to drive products through to
commercial and clinical translation faster than our competitors, and we need to aggressively pursue opportunities
for international collaboration and business.
Collaboration and integration
There has been, over the last year or so, a significant increase in the investment and activity aimed at developing
new products and therapies utilising stem cell technology in the UK; the Cell Therapy Catapult Centre; the Strategy
for 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 new
fund to support Scottish research.
All of these initiatives provide opportunities for Scotland. Edinburgh has been identified as a partner for the
Catapult, the UK Life Sciences strategy points to best practice in Scotland s NHS and the MRC Centre for
Regenerative Medicine will play a key role in the Research Councils plans for Regenerative Medicine. Indeed the
key areas for action under this strategy, such as clinical delivery, product development, therapeutics and
underpinning 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 University
Institute for Integrated Cell-Material Sciences (iCEMS) both of which have signed collaboration agreements with
Scotland. 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 is
party 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 value
that these initiatives will generate. Unless Scotland has an organisation coordinating activity the centre of gravity
for leadership, at least in the UK, will be dominated by the Cell Therapy Catapult and Scotland will be left to follow
rather than play a leadership role. To succeed we must collaborate on a global scale and have a single entity
managing the interface. Within Scotland we must connect the academic, commercial and clinical environments to
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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 single
point of contact for interaction within Scotland, driving strategy and ensuring Scotland is globally connected and
leveraging the many external initiatives to best deliver. Effective coordination and collaboration within Scotland is
key. The way we collaborate and can make things happen is a recognised strength which we must hone and
develop. This will provide the hook to attracting companies to move here or conduct their clinical trials here. The
organisation would have a focused sales function, (working alongside SDI) expert in what Scotland can offer the
world, empowered to negotiate and measured against specific targets for inward investment. By attracting
companies 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 and
associated high-value manufacturing for new cell therapies. Build on Scotland s proven clinical development and
supply 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 Scotland
Build on international linkages. Participation in CIRM calls, by mid 2013 establish stronger linkages with key
international locations e.g. Canada, China, India
2. By mid 2013, establish one or more high growth potential companies based in Scotland, focused on
developing new therapeutics in regenerative medicine
These companies will act as a focus for commercial development, provide an opportunity to attract and retain
strong management teams and scientists; and act as a magnet to attract investors. These companies should focus
on commercialising some of the therapeutic development programmes already in clinical development in the
academic and NHS environment, maximising the potential for the company top succeed, and maximising the
potential for a new generation of therapies to benefit the health and wealth of the Scottish population.
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23. 3. Facilitate growth in the number and size of Scottish SMEs participating in regenerative medicine markets
Building 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 scheme
4. NHS Scotland as a smart customer and early adopter
NHS Scotland has the infrastructure to support the growth and development of the Regenerative Medicine sector
and facilitate the development of a local market. Rapid adoption is essential to the future long-term health and of
the Scottish people; and the development of credible, viable reimbursement mechanisms by a major healthcare
provider 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 partnerships
and networking between academia, business and the health service both on a local and national basis and as a
driving force for the sector.
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24. 6. Continue to build research excellence in Scottish Universities in order to gain further understanding of disease
mechanisms and to feed the pipeline of potential novel therapeutics.
Work with the Scottish Funding Council to ensure Scottish Universities capture a significant proportion of UK
funding 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 Blood
project, to help overcome barriers to collaboration between Scottish Universities, the NHS and businesses
Recommendation
We believe that Scotland requires an organisation, or organisations that provide the following functions over
the 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.
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25. References
1. Rumelt R. Good Strategy / Bad Strategy. Profile Books, London. 2011.
2. ScienceWatch
3. 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 18
October 2011.
5. California Institute of Regenerative Medicine www.cirm.ca.gov/Video_SpotlightLeukemia
6. 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.com
13. www.sdi.co.uk/sectors/life-sciences/sub-sectors/stem-cell-research/strengths.aspx
14. 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 Medical
Research 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.html
18. 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 March
2012.
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. September
2011.
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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
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