'De-risking' Stem Cell Therapy with Government Cash and Assistance

Nature Biotechnology this month took a crack at what it called “therapies of the state,” three government- financed efforts at turning stem cells into cures.

The piece by Beth Schachter discussed “thorny technical challenges,” safety issues and regulatory and IP risk – not to mention the dreaded “reimbursement” risk. (Reimbursement is a PR euphemism that revolves around industry fears of losing money.)

Greg Bonfiglio
Proteus photo

In addition to California’s $3 billion effort, Schachter wrote about Cell Therapy Catapult in the UK and Canada’s Center for Commercialization of Regenerative Medicine, whose board is chaired by Greg Bonfiglio, who is also founder and managing partner of Proteus Venture Partners of Palo Alto, Ca.

Schachter said that all three are to attempting to “de-risk the perilous process of advancing cell therapies that show potential in animal studies through human testing to commercialization.”

The Nature Biotech piece said that until recently Big Pharma and venture capitalists have steered clear of the cell therapies coming out of academia. Schachter wrote,

“For one thing, big pharma’s business model is very different from what is needed to translate cell therapies into practice. The pharma model involves mass manufacturing of products that can be stored in warehouses and distributed through pharmacies to large markets of patients. Cell therapies, on the other hand, may be highly individualized, are incompletely characterized, are expensive to produce, have a short shelf life and onerous supply chain, must be transplanted into patients by skilled healthcare workers and have complex regulatory requirements. These challenges, along with a dearth of cell-therapy successes, have kept away investors, too.”

As for the stem cell agency in California, Schachter wrote,

“In developing (its) extensive program, the CIRM has, in a sense, been standing in for the National Institutes of Health (NIH). It has also been taking the role that venture capital might have assumed, had the US government given the go-ahead on human embryonic stem cells, thereby building a robust preclinical/translational research program. As Bonfiglio it, ‘CIRM galvanized the industry, putting regenerative medicine on the map, both in terms of what the politicians and the lay people saw and in terms of maintaining scientific training in that arena.'” 

Schachter said that it is not clear how long taxpayer cash will be needed or wanted. She wrote,

“Also not clear is how each of the governments will assess the success or failure of these programs. How will governments know when the time is right to wean the programs from public monies? Will they consider job creation, the number of companies spun out, or launching successful products in the marketplace? Given the complexity of cell therapies and regulatory uncertainty, none of these things may happen for decades. Perhaps a better measure is whether any of the companies created gets traction with big pharma. That might indicate that the commercial promise of these therapies is finally evident.”