Media

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Episode 10: SNY’s Taylor Rooks, Stylist Megan Wilson, Replicel’s Lee Buckler
Released Dec 07, 2016
View for free on iTunes: click here

JB opens the show previewing what is to come, talking Chris Sale and the Red Sox, and more.

(7:16-30:11) SNY reporter Taylor Rooks (@TaylorRooks) joins JB in studio. We talk about her rise in the industry, moving to NY, sports, dating apps, sliding in DMs, and much more.

(30:11-49:35) Stylist and designer Megan Wilson (@shegotgame) joins JB in studio. We talk about her career, styling players, basketball shoes, Toronto, and much more.

(49:35-59:47) Replicel CEO Lee Buckler talks about his company and cell therapies that will help treat tendons and much more.

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The Total Tutor Neil Haley will interview Lee Buckler of Replicel.

Click here to view:
http://www.blogtalkradio.com/totaltutor/2016/11/28/lee-buckler-of-replicel-life-sciences

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Find full article here online, at The Asahi Shimbun.

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Source: George S. Mack of The Life Sciences Report (3/2/16)
View the full article as is appears here, on The Life Sciences Report.

Eden Rahim of Toronto-based Next Edge Capital has had his share of multibagger and grand-slam successes, and is one of the few mutual fund managers who feels comfortable investing in micro-cap biotech names side-by-side with billion-dollar biotech stocks. In this interview with The Life Sciences Report, Rahim describes a group of micro-, small- and mid-cap biotech names possessing powerful growth drivers that could perform even when the overall market is not so hot.

The Life Sciences Report: After China’s shares began selling off in early January, investors all over the globe began dumping shares of everything, especially healthcare and biotech. You have managed biotech portfolios since 1994, and you put on hedges so your downside is limited. How did you do during the downturn? Did it take you by surprise?

Eden Rahim: Admittedly, I did not see the intensity of the selling that began in January, compared to when stocks began to slide last August. I was nervous at that time and wrote options against 11 of the fund’s largest holdings. I also had a few hundred IBB (iShares Nasdaq Biotechnology Fund [IBB:NASDAQ]) and XLV (Health Care SPDR (ETF) [XLV:NYSE.Arca]) puts on the portfolio. When the market took that first leg down of 30%, the portfolio weathered the storm really well.

Traditionally, January and February have been a favorable season for biotech, so coming into this year I had small hedges in place, and my cash was only around 10% versus close to 20% back in August. This downturn really came as a surprise.

TLSR: What precipitated the selloff?

ER: It started when the U.S. Federal Reserve raised interest rates a quarter of a percent in mid-December. Rates were near zero, and that was the first hike in nine years. Personally, I would have thought that hike was fully priced into the market, but strangely, the market acted as if it was a complete surprise. Market breadth began to weaken.

Part of the market reaction might have been due to the rhetoric that this was going to be the first of many hikes. When that talk began, we saw the risk-off trade really come to fruition, so that any emerging market—any high-yield debt, any high-beta asset, even housing stocks—came under intense pressure. This included biotech. Biotech, having the longest duration of all asset classes, suffered the brunt of it.

TLSR: How do individual investors maneuver in these situations?

ER: Individual investors are as empowered as I am to hedge their portfolios. In the fund, we use options on the XLV and on the IBB. Investors can use these for protection in their own portfolios. For biotech, you can also sell (write) options against your positions. You can write one-month, out-of-the-money options, and once they go far out of the money, you can cover and rewrite another month. The individual investor is as empowered as a portfolio manager to do these things.

TLSR: Are you ever long the IBB ETF, or do you just use its options?

ER: The fund can be long the index, but generally is not because the portfolio is comprised of fairly high-beta stocks in the mid-cap area, where the fund is focused. If you look at the weighted volatility of the individual portfolio positions, they are roughly 70%, versus ~35% for the IBB. But the portfolio volatility is still less than the IBB’s because of the use of options to mitigate some of that unpredictability. That’s the advantage.

The fund generally uses the IBB options as a counter to the existing portfolio direction because, given the beta of the stocks held—primarily Phase 3 companies—in a market rally such as I think we might embark upon soon, they will have a beta of two or three times the IBB. I’m comfortable being there. Generally, the IBB is a hedge, but as your question implies, it doesn’t have to be. Never say never.

TLSR: You perform meticulous fundamental analysis on biotech stocks, but you are also an elf, as Louis Rukeyser used to call his technical analyst guests on Wall Street Week. I want you to put on your elf’s hat for a moment. You sent out an e-mail on Feb. 10 that included a chart showing the IBB index over a 15-year period. You highlighted the huge biotech rallies following periods when only 0–4% of biotech stocks in the IBB were above their 50-day moving averages. What percentage of biotech stocks in the IBB are above their 50-day moving averages today, and what does that bode for the future?

ER: Technical analysis is an important tool for biotech because of the extent to which shares and biotech indices oscillate between feast and famine. I look at a number of indicators.

Biotech has achieved a very rare oversold level, by many measures. Looking at one of those indicators, such as the 150 stocks in the NASDAQ Biotech Index, only 3% of those stocks were above their 50-day moving average when I sent out that e-mail. That’s the second lowest reading going back to 2001. It hit zero at the very bottom during the crash in 2008, but then again, every market class hit zero at that point. Now, ~6% of stocks in the IBB are above their 50-day moving average, and that’s probably going to go much higher because we are dealing with an elastic band that is stretched at the moment.

But there are other measures as well. The percentage of those same stocks above the 200-day moving average has dropped below 10% to the lowest reading in 14 years, at the bottom of the two-year bear market in 2002. A similar reading in 2008 occurred after the stock market was down more than 50%; the conditions were pretty extreme at that time. That’s the magnitude of extreme oversold readings you are seeing with biotech stocks right now.

TLSR: Having ~6% of stocks in the IBB above the 50-day moving average is a bullish signal from your point of view?

ER: Right. That elastic band could really snap hard off this low. Sometimes, when the market is selling a sector with impunity, you’re not sure where it ends, but usually it ends when you start to see off-the-chart readings like this, because they only happen once every six or seven years.

Furthermore, the NASDAQ biotech index has corrected back to its 200-week moving average for the first time since the bull market began in 2011. It has served as a good starting point for new bull markets four out of the past five times since 2002.

TLSR: Even the worst markets come back eventually. But small-cap biotech investors worry that this kind of weakness will impede the progress of the companies they own. It gets harder to raise capital, new funding comes with less favorable terms, and initial public offerings (IPOs) are nearly unheard of in this kind of market. Even with a market snap-back, is this going to have a damaging effect on very small companies?

ER: After periods like this, small companies remain in the wilderness for some time. That is because you can buy Phase 3 companies pretty cheaply that have already passed key data point barriers, or that are close to commercialization, and hold large cash balances. But there are exceptions. One small company I like has been very resourceful, and has managed to achieve a lot with limited financial reserves. That is a testament to management.

TLSR: Go ahead and talk about that company.

ER: My focus tends to be on larger mid-cap, late-stage development companies, but I do like RepliCel Life Sciences Inc. (RP:TSX.V; REPCF:OTCQB), a micro-cap, Canadian, regenerative medicine company with a novel technology developing autologous cell therapies. What’s interesting about RepliCel is that it has four novel programs on the go, and management has secured a partnership with Shiseido Company Ltd. (4911:TYO) in Japan to fund its alopecia trials.

|“Individual investors are as empowered as the portfolio manager is to hedge their portfolios.”

RCH-01 for pattern baldness could be on the market in 2018. The company has developed a dermal injector device, RCI-02, to pair with its therapeutic approach. It will file for CE mark approval of the dermal injector in the European Union (EU) later this year, and I think the product will be on the market in Europe in 2017. Management has been able to derisk this little company in a way many small companies haven’t been able to do.

TLSR: Tell me a little about the dermal injector, RCI-02.

ER: It’s a novel instrument with extreme precision that sources the cells in the scalp. It has an analgesic delivery capability built in so it can simultaneously anesthetize the skin and obtain autologous dermal sheath cells. It will have many applications. It will be on the market in Europe first, and then in the U.S. RepliCel won’t market the product itself, but will partner that out. The company could have the alopecia therapy on the market in Japan in 2018, and the dermal injector could be on the market in the EU in 2017.

TLSR: What should investors anticipate as a share-moving catalyst for RepliCel?

ER: The device is a catalyst. Even though RepliCel will have data in the alopecia and tendon repair indications, later this year I think the dermal injector may carry more weight because the market may realize it represents the fastest route to commercialization and revenues, which would help the company mitigate some of its cash burn. The adoption and costs to market the device are much less than they would be for developing and commercializing a therapeutic.

To continue reading the full article, visit: The Life Sciences Report.

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Japan’s Bold Steps

By: Iain Marlow\n
ASUKE, JAPAN The Globe and Mail Last\n updated: Saturday, Nov. 14, 2015 3:41PM EST

People over the age of 65 make up a quarter of Japan’s population, and it’s on track to reach 40 per cent. The top-heavy demographic creates huge challenges\n for government and the economy. Now the country is tackling the problem with innovative programs, including everything from comprehensive long-term-care\n insurance to robotics.\n
Yuriko Nakao/Bloomberg\n

This is part of the Globe and Mail’s week-long series on baby boomers and how their spending, investing, health and lifestyle decisions could affect Canada’s\n economy in the next 15 years. Is Canada ready for the boom?\n
For more, visit tgam.ca/boomershift and on Twitter at #GlobeBoomers

The country road leading into the small Japanese community of Asuke meanders past bamboo groves, rice paddies and traditional tiled-roof houses, some of\n which have trees in the yard brimming with oranges in the late October sun. The road also hints at demographic realities the town – and Japan more\n broadly – are currently facing: A construction crew along the route consists solely of senior citizens. In Asuke, 40 per cent of residents are over\n the age of 65.

But on an upper floor of the town’s modern hospital, which sits between a slow-flowing river and a Shinto shrine on a forested hill, Misao Shimamura, a\n 93-year-old with oval glasses, is living out the golden years of her working-class life with a degree of comfort unimaginable to many other seniors\n across the developed world.

Ms. Shimamura worked part-time in a hotel for years, and at the age of 65 began working full-time as a janitor – retiring only when she was 85. The hands\n of her now-deceased husband, who worked as a barber, eventually shook too much to cut hair, and he was forced to work his last years at a local gas\n station. But despite these hardships, and despite living in a rural area, Ms. Shimamura now rests comfortably within Japan’s long-term-care insurance\n program, without burdening her three children. After a formal reassessment by social workers, she was upgraded from home visits and moved to the hospital’s\n long-term-care ward. Here, she has food, shelter, scheduled activities and the attentive care of a Filipino health care worker.

“The people here are very kind,” Ms. Shimamura says.\n
\n
\n

Misao Shimamura and her caregiver.
(Iain Marlow/The Globe and Mail)

Asuke is a microcosm of Japan’s struggle to overcome its enormous demographic challenge. Japan is already the oldest society on earth, and the country\n continues to age rapidly as older Japanese continue to live longer lives and younger Japanese continue to put off having children in an era of economic\n uncertainty.

This has left Japanese governments with little choice but to take bold action. Unlike elsewhere, such as Canada, Japanese leaders have made radical changes\n to the way health care is delivered in recent decades, most notably with the introduction of long-term-care insurance in 2000. The system is far from\n perfect, but Japan has been unafraid to improve the system as they learned its faults, and as an economic boom gave way to zero growth.

Japan, in many ways, is now grappling with the same demographic time bomb looming before Canada and much of the industrialized West over the next 10 to 20 years. But Japan’s government, businesses and society are facing these challenges earlier than others, allowing the world to learn and benefit from their stumbles, innovations and experiments.
A Lawson convenience store in Saitama City with a special
section that caters to seniors and caregivers.
(Iain Marlow/The Globe and Mail)

Business opportunities\n

Roughly 25 per cent of Japan’s population is currently over the age of 65, compared to just 16.1 per cent in Canada. But in Japan, this demographic is\n forecast to make up a full 40 per cent of the country’s population by 2060, the same percentage as in many rural areas emptied of young people today,\n such as Asuke, where the hospital says there are no trainee nurses.

Between 2010 and 2060, the percentage of Japanese citizens over the age of 75 will more than double from 11 per cent to 27 per cent, according to the government.\n The absolute number of old people will soon level off in Japan, but the proportion of the population who are young is declining rapidly: The percentage\n of Japanese younger than 19 years old, who constituted 40 per cent of the population in 1960, will decline to just 13 per cent in 2060. Japan’s total\n population peaked in 2010 at around 127 million people and has already begun to decline. In 2014, the country lost a record 268,000 people, as deaths\n continued to outstrip births.

\n
\n

For corporations such as Lawson Inc., a Tokyo-based convenience store chain with 12,000 stores in Japan, the country’s aging society is a reality, as well\n as a business opportunity.

At a Lawson store in Saitama City, the company created a hybrid store featuring a “seniors’ salon” with a blood pressure monitor, pamphlets on municipal\n health care services and nursing homes, and on-staff social workers. The store also has a special section featuring adult diapers, special wipes for\n bathing the elderly, straw cups, a gargling basin and detergent that is tough on urine and perfect for bed mats and wheelchair coverings. Staff will\n also deliver heavier items, such as bags of rice or water, to local residents.

“This is Japan’s national issue,” says Ming Li, a Lawson spokesperson, as he shows off TV dinners targeted at seniors.

Japan’s baby boom has also detonated within Lawson’s own work force: The company had to raise its maximum age limit for franchisees, and is experimenting\n with lower part-time hours per employee and very limited tasks – for seniors who can only muster energy for a couple of hours, or can only clean or\n sweep, but still want to work.

Prime Minister Shinzo Abe’s administration is concerned about how Japan’s aging and shrinking work force will slow down the national economy. One piece\n of Mr. Abe’s so-called Abenomics revival program – which also includes getting more women in the workplace – is an emphasis on new medical technologies,\n including experimental regenerative medicine and cell therapy. The hope is that with two new acts governing regenerative medicine to help commercialize\n technologies more quickly, the Japanese government can save money on future health care costs while spurring the creation of a valuable new industry\n – particularly in bio-medical hubs such as the one in Kobe, which features a gleaming new mini-city of medical buildings, research centres and hospitals\n on a man-made island near the port city’s airport.

The demographic impetus to spur new medical technologies has an intriguing Canadian connection: Vancouver-based RepliCel Life Sciences Inc. received $35-million from the Japanese cosmetic giant Shiseido Co. Ltd., which is taking the Canadian firm’s cell-based therapy for baldness into a\n clinical trial. Shiseido faces a mature cosmetics industry, and is hoping to cash in on the grey wave in Japan. “It’s a big, big market,” says Jiro\n Kishimoto, who heads Shiseido’s regenerative medicine research at the company’s lab in Kobe.

Lee Buckler, RepliCel’s vice-president of business development, notes that boomers in Japan and elsewhere are retiring in a concentrated wave that is creating\n a critical mass of consumers for new products.

“There’s a lot of disposable income in that population,” he says. “And they’re willing to spend money not just to look good, but to perform at a higher\n level than geriatric people would have in the past.”

Long-term-care insurance\n

On a macro level, Japan’s predicament is prosperity, which is always followed by lower fertility rates and higher life expectancy. At 83.4 years, Japan\n has the longest life expectancy at birth in the world, according to the Organisation for Economic Co-operation and Development (OECD). Many Japanese\n people are also fearful of the type of immigration that has sustained slow population growth in the industrialized West.

In recent years, the challenge has been heightened by changes in Japanese society: The elderly in Japan, similar to seniors across Asia, are less likely\n to live with their children, though in Japan this is still quite common (roughly 41 per cent of Japanese seniors live with a child, compared to about\n 80 per cent in 1960). And women, after decades of opting out of a career after giving birth, are also being encouraged by the government to re-enter\n the work force, something that may eventually help boost Japan’s declining labour numbers, as the government hopes, but also prevents women from acting\n as caregivers.

Another reason Japan aged so rapidly is because the country’s postwar baby boom between 1947 and 1949 was extremely short – cut off in part by a 1948 law\n that gave easy access to induced abortions – and was followed almost immediately by a prolonged period of low fertility. The young population that\n came from this boom were instrumental in Japan’s remarkable economic recovery, and as the country’s economic reconstruction gained speed, another small\n baby boom “echo” took place between 1971 and 1974, at the height of Japan Inc.’s prosperity. That surging economy allowed the Liberal Democratic Party\n to expand the country’s health care system as Japan aged, but by the 1990s, the enormous price tag raised the spectre of tax hikes.

“The government realized it had to change the system,” says Yoshihiro Kaneko of the National Institute of Population and Social Security Research, noting\n that the system will come under renewed strain as the second baby boom generation begins to retire.\n
\n

Shoppers browse at a store in the Sugamo district of Tokyo. (Kiyoshi Ota/Bloomberg)\n

Japan chose to supplement its national pension plan with long-term-care insurance (LTCI), which was implemented in 2000. Professor Nanako Tamiya, a Japanese\n health care expert writing in The Lancet, called LTCI “one of the most generous long-term-care systems in the world in terms of coverage and benefits.”

It is incredibly comprehensive, and removes the anxiety and unpredictable nature of elderly care elsewhere. People pay into the system starting in their\n 40s and are eligible to receive benefits starting at 65, or earlier in the case of illness. When they apply, applicants are interviewed by a municipal\n employee who feeds the resulting information into an algorithm that assigns the person a care level. That, in turn, is analyzed by an expert committee\n of welfare workers. A care plan is then drawn up, allowing the patient to choose between competing institutions and service providers offering everything\n from home visits, bathing and help getting groceries to paying for short stays in hospitals or long-term residence in nursing homes and specialized\n group homes for dementia patients.

The LTCI system covers up to $2,900 a month in services, as opposed to cash payment, and does require “co-payments” from patients. LTCI co-payments are\n capped or waived for low-income individuals, and the system saves money by providing options other than full-on institutionalization.Canadian companies driving global breakthroughs in regenerative medicine

By Kathryn Boothby

To read this article on the Financial Post website, click here.
CCRM – helping position Canadian companies at the centre of regenerative medicine around the world

Rapid advances in regenerative medicine are bringing the promise of curative solutions for chronic conditions closer to reality. Canadian companies are at the forefront of this revolution, paving the way for this country to be a standard-bearer of breakthrough treatments for patients around the globe.

Therapies using cells are potentially improving outcomes and reducing or eliminating side effects for such devastating diseases as diabetes, hemophilia, and critical limb ischemia, as well as conditions such as chronic tendinosis, damaged skin, and pattern baldness. New tools and technologies are also helping to put an end to bulky, obtrusive mechanisms to deliver life-saving treatments.

“We are at a powerful leading edge for medicine,” says Michael May, president and chief executive officer of the Centre for Commercialization of Regenerative Medicine (CCRM) in Toronto. “The ability to regenerate tissue will transform the treatment of diseases, quality of life, and the economics of health care.”

“Billions are being spent globally in the field of regenerative medicine on investment, research, development and sales,” says May. “Now, with clinical efficacy being demonstrated, we’re seeing more regulatory approvals and resulting mega-deals between small companies and large corporations.”

But where does Canada fit in the global picture? The discovery of stem cells in Canada in the 1960s sparked the worldwide use of bone marrow transplants for patients with leukemia and aplastic anemia. “This spawned an incredible research machine that made some important discoveries over the ensuing years. We are at a similar junction today,” he says. “We’re leading the science and have begun to leverage commercialization around the globe. The system is primed; we now need to fuel it with private investment to ensure Canada is at the centre of this emerging industry.”

CCRM is actively working to achieve that goal by coordinating access to bundles of technologies from around the globe; creating and supporting companies to further develop and commercialize those discoveries; and establishing relevant industry networks and accessible infrastructure. CCRM currently works with a 50-member industry consortium that includes therapeutic innovation companies, multinational pharmaceutical organizations such as Pfizer and Amgen, and infrastructure and tool companies such as GE Healthcare and Stemcell Technologies.

“Access to strong academic and industry networks enables us to now build a third key stakeholder group —an investor network,” says May.

That strategy is beginning to pay off for some of Canada’s cell therapy companies, including RepliCel Life Sciences Inc., Hemostemix Inc., and Sernova Corp.

RepliCel (TSX.V: RP) is driving multiple products in the regenerative medicine arena with three cell therapy products in clinical development, and a dermal injection device that promises to change the way any product is delivered in or under the skin, including the over $2-billion worth of dermal fillers injected annually.

“2015 is a pivotal year for the company,” says Lee Buckler, RepliCel’s vice-president, business and corporate development. “This is the year we moved all our cell therapy assets forward in clinical development, which sets us up for transformative catalysts over the next 18 months.” Earlier this year, RepliCel launched a Canadian trial for chronic tendinosis and just recently announced the launch of a dermatology trial in Germany. Topping off the trio is a trial for pattern baldness with commercialization partner Shiseido Company, which is expected to launch in Japan shortly.

RepliCel is one of a handful of foreign cell therapy companies with an active partnership in Japan. “Having Shiseido, one of the world’s largest cosmetic firms, as RepliCel’s partner for its pattern baldness product, has given us notable credibility in that market,” says Buckler, “and we are now engaging other companies in Japan about partnerships for our other products.”

“Partnering in Japan is at the top of our list because the government has expedited the process of developing cell-based therapies, making it possible to bring cell therapies to market faster there than any other regulated market in the world,” says Buckler.

Hemostemix (TSX.V: HEM) is currently undertaking an international phase-two, double-blind, randomized, placebo-controlled clinical trial to test the efficacy of a cell therapy to treat critical limb ischemia (CLI). CLI is characterized by insufficient blood flow to the lower limbs caused by blockages in small blood vessels. In North America alone, some four million people have the disease, and 25% will die from it. Currently, the only treatment is amputation.

The process involves collecting cells from a patient’s blood that are then manufactured into a cell therapy and delivered back to the patient. The company believes that the reintroduced cells create new blood vessels that restore blood flow and save the limb from amputation.

“CLI is a severe disease, threatening millions of people’s lives worldwide. We are running our clinical trials in leading international centers, including Canada, the U.S., South Africa, and soon in Taiwan,” says Dr. Elmar Burchardt, Hemostemix’ president and chief executive officer and former vice-president of regenerative medicine at Pfizer.

Sernova (TSX.V: SVA), a clinical stage company, is treating chronic, debilitating diseases such as insulin-dependent diabetes, hemophilia A and thyroid disease using a regenerative medicine approach through the placement of immune-protected therapeutic cells into an implanted pre-vascularized medical device. The company believes that the Cell Pouch System, about the size of a business card, creates a natural organ-like environment when placed under the skin and the cells release required proteins or hormones such as insulin, or Factor VIII potentially eliminating the need for chronic injections or infusions.

For diabetes, Sernova’s product — the device and cells implanted in humans — is being designed to mimic the pancreas where cells (islets) read blood sugar levels then release both insulin and other hormones into the bloodstream. The company has recently become a fully integrated pharmaceutical company as it has gained worldwide exclusive rights to a glucose responsive insulin-producing stem cell technology from University Health Network (UHN). The company has received grants from the National Research Council, Juvenile Diabetes Association and support from both the Canadian and Ontario governments to assist with its activities.

“If Sernova’s treatment leads to patients no longer having to take injections or deal with a cumbersome device, this could improve the quality of life for millions of people, reduce the debilitating side-effects of the disease, and cut health care system costs significantly,” says Dr. Philip Toleikis, Sernova’s president and chief executive officer.

“Canada imports close to 100% of our medical treatments,” notes May. “It would be much more exciting to be exporting our treatments and using our health care system to develop and deliver those products to patients around the world, all while improving the health of Canadians here at home.”

Canadian companies working in regenerative cell therapy have globally competitive technologies and great science. RepliCel, Hemostemix, and Sernova are all moving products through clinical trials at a time when big industry players are making investments in manufacturing, therapeutics and tools to facilitate the production of cells.

“While every company’s corporate strategy is different,” concludes RepliCel’s Buckler, “it is our corporate intention to build sufficient value in our assets, licenses, and royalty streams so that the company becomes a home-grown acquisition target thus contributing valuable assets to the growing appetites for regenerative medicine among the global multinational players.”

This story was produced by Postmedia Works on behalf of Market One Media Group for commercial purposes. Postmedia’s editorial departments had no involvement in the creation of this content.

To read this article on the Financial Post website, click here.

FINANCIAL POST ARTICLE – SPONSORED BY REPLICEL LIFE SCIENCES

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Navigating the Global Regulatory Landscape

Written by: Lee Buckler & Colin Lee Novick

The Follower Takes the Lead: How Japan’s trifecta of economic policy, regulatory innovation, and an aging demographic may disrupt a global industry and the very future of medicine.

On November 20th 2014, the Japanese legislature passed the new Act on the Safety of Regenerative Medicine (ASRM) and the revised Pharmaceuticals, Medical Devices, and Other Therapeutic Products Act (PMD Act) [1]. It is hard to make that sentence sound exciting, but what many outsiders have yet to fully appreciate is the tectonic shift in Japanese pharmaceutical regulatory policy this represents. Put another way, these two pieces of legislation lay the foundation for Japan to become a world leader in regenerative medicine and cellular therapy. The most interesting question for many is “why?” Why has a country synonymous with “risk aversion” and “following” taken such a drastic step away from the norm and more importantly, what does this mean for commercial players involved in the regenerative medicine/cellular therapy industries? To answer this, it is important to understand what the Japanese regenerative medicine and cellular therapy regulatory environment looked like prior to these laws and the dynamics that pushed Japan to change the status quo.

Submitted: July 30 2015 Published: September 15 2015; DOI: 10.18609.cgti.2015.009

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To read the full article as it appears on The Life Sciences Report, click here.
Source: Gail Dutton of The Life Sciences Report (9/9/15)

CAR T-cell therapies show amazing potential in treating blood cancers, but there’s a lot of work to do before the cells are ready for commercialization. Alan Leong, senior analyst with BioWatch, tells The Life Sciences Report about the latest in CAR T-cell therapeutics and how some companies are hedging their bets by developing bispecific antibodies. He also describes the reality behind the growing excitement in regenerative medicine, and what investors should know about some very innovative, but often overlooked, small companies.
The Life Sciences Report: To begin, tell our readers about chimeric antigen receptor (CAR) T-cells and why they are generating so much excitement in the oncology field, particularly among companies targeting hematologic (blood) cancers. Alan Leong: We’re seeing remarkable and well-documented response rates for CAR T-cell therapies. These therapeutics are still in the early stages of their lifecycles, so they are likely to evolve and be refined over the next five to 10 years. What is amazing is the incredible array of companies developing CAR T- cell therapies. They include Juno Therapeutics (JUNO:NASDAQ), Kite Pharma (KITE:NASDAQ), Bellicum Pharmaceuticals Inc. (BLCM:NASDAQ), Intrexon Corp. (XON:NYSE), bluebird bio Inc. (BLUE:NASDAQ), Celgene Corp. (CELG:NASDAQ), Selexis SA (private) and many others. These companies are very good at stimulating T cells to be highly active cancer cell killers. Each company is trying to develop its own process and targets, but what excites everyone is the chance to target the CD3 receptor to activate T cells.

“RepliCel Life Sciences Inc. is a very provocative, very interesting company.”

Activating T cells through the CD3 receptor, however, has drawbacks that may limit CAR T-cell therapeutics to hematologic cancers. Because CD3 activation highly stimulates the T cells, we sometimes see something called cytokine release syndrome. In this syndrome, the body mounts an extreme response, in which T cells target major organs in an autoimmune shutdown. This reaction is potentially fatal, so currently, when the leading CAR T-cell companies enroll patients in a CAR T-cell trial, those patients are put into intensive care wards immediately. Companies are trying to find solutions to minimize that risk. If they succeed, they may be able to target solid tumors. If I had a caution about CAR T-cell therapy, it would be that the cost is extremely high. To put this in context, Provenge (sipuleucel-T), by Dendreon Corp. (DNDN:NASDAQ), debuted in 2010 at $93,000 ($93K) for a three-infusion regimen, and was criticized for being so expensive. CAR T-cell therapy is much more complex and, therefore, even more expensive. In some cases CAR T-cell therapies also are less homogenous, so there may be substantial batch-to-batch variation. TLSR: If the CAR T-cell therapeutics are as effective as early results indicate they may be, would their higher costs be worthwhile for payers? AL: Right now, the actual costs of CAR T-cell therapeutics are somewhat opaque, but people are talking about an initial price of $250K per patient. Some suggest payers will provide reimbursement based on Gilead Sciences Inc.’s (GILD:NASDAQ) Sovaldi (sofosbuvir) experience: A 12-week regimen for that hepatitis C therapeutic costs $84K. I always retort, “Well, if there were three or four Sovaldis out at the same time, would they have paid it?” The answer is no.

“When it goes head-to-head against tenofovir, ContraVir Pharmaceuticals Inc.’s CMX157 is a slam dunk.”

I think we’ll see some interesting movement over the next year or two as people raise questions regarding the ability to commercialize CAR T-cell therapies. Nonetheless, this is a time to be excited. We’re seeing response rates we only dreamed of years ago. TLSR: Do you see any alternative therapies in development? AL: We’re entering the age of targeted medicines. This is an exciting time. In the past decade Seattle Genetics (SGEN:NASDAQ) brought out Adcetris (brentuximab vedotin), which elicits amazing response rates in lymphomas. Then Medivation Inc. (MDVN:NASDAQ) introduced a prostate cancer medication. Now we have a plethora of targets and technologies.

“Celator Pharmaceuticals Inc.’s acute myeloid leukemia therapy shows superior delivery and uptake by cancer cells.”

CAR T-cell therapy is expensive, but many companies are creating bispecific antibodies that may recreate what CAR Ts do at a fraction of the cost. Bispecific antibodies are engineered to go after two or more targets. In their favor, bispecifics are much less expensive and much more standardized than CAR Ts, so they probably don’t have to be as effective to be commercially successful. They just have to be effective. Therefore, I raise a caution regarding CAR Ts and bispecifics because they’re going after very similar targets. Perhaps both can be successful. TLSR: Are you seeing any trends among all the companies that have the CAR T-cells out in late-stage research? AL: On the business side, we’re seeing an interesting number of collaborations occurring with one major partner or multiple smaller partners. That’s true for bispecifics, too. Juno and bluebird each recently concluded deals with Celgene. So companies are getting support, whether from the equity markets or from partners, to help them reach their next milestones. That funding is being used primarily to improve their processes. That includes identifying the source of the cells; the most effective methods to condition, transect or modify the cells to become CAR T cells; criteria to select T cells; and the best ways to replicate them in vitro. The methodologies used today will continue to improve.

“Sunesis Pharmaceuticals Inc. was encouraged by European Union regulatory staff to submit for approval of Qinprezo.”

Juno has an autologous process, where the blood is taken out of each patient. Other companies are trying to develop allogeneic processes, to eventually make off-the-shelf products viable. The challenge is how to standardize and optimize each process so that it becomes scalable and cost effective. Scientists throughout the industry also are working to control the dangerous side effect of cytokine release syndrome. Some are inserting a suicide gene so that, within 30 minutes, they can infuse a solution that will kill or deactivate specific CAR T cells. Bellicum is known for that approach, although Juno and others also have CAR T-cell lines that incorporate suicide genes. Companies are trying to find additional methods to inhibit the strength or the application of the CAR T cells in healthy tissue. We’re all crossing our fingers. TLSR: What regulatory challenges do you foresee for this new technology? AL: CAR T-cell therapeutics will experience issues that are typical to any first-in-class therapy. The FDA must give them an extra look. CAR T-cell therapies are very new and very complicated. As much as we’re concerned about evaluating response rates and safety, I’m just as concerned that these therapeutics pass the FDA’s manufacturing inspection. This is an issue for any new drug. For CAR Ts the hurdles may be a bit more significant because the manufacturing process is so complex. But these are issues any first-in-class therapy must contend with. TLSR: Briefly, what makes the process so complex? AL: For years, there have been many attempts to activate T cells. There was a suspicion that, if we could get the T cells really alive, we would see interesting response rates. The ground is littered with predecessors. Juno, among others, found the right therapeutic package. It stimulated the right molecule and developed the compound in a way that elicited great responses. Really, Juno hit the jackpot. The CAR T-cell therapy that emerged from that early work is a first-generation, combination gene/cell therapy. It’s amazing science, but I often wonder if, 10 years from now, we’ll look back and consider it Rube Goldberg science. I hope, in 10 years, that processes will be much more advanced. TLSR: Tell us about some of the companies you are following. AL: There are a great number of interesting companies. Some of these are very early stage, but they caught my eye because of what they imply. I recently looked at Inmedix LLC (private). I’m still analyzing it, but the results of some of its early work are surprisingly robust. There is a whole area of research that looks at the status of a person’s autonomic nervous system, which governs involuntary body functions such as breathing, heartbeat and digestion, and determines whether there is variability within that system, or whether the system is heightened. It also considers the status of the sympathetic nervous system, which controls the body’s reactions to stress. Some of these things are intuitive. For example, if you think of the “fight or flight response,” you can see that the immune system gets upregulated. Those changes trigger other changes in the human body.

“We’re seeing remarkable and well-documented response rates for CAR T-cell therapies.”

For example, Seattle-area rheumatologist Andrew Holman, M.D., with his associates, studied autoimmune disease to determine whether autonomic status can guide therapeutic decisions. The resulting method enables physicians to prescribe the right drug the first time for 80% of their rheumatoid arthritis patients. Without it, they must try multiple regimens until one works. An 80% hit rate is almost unheard of, so I’d like to see the studies replicated. The research protocol is straightforward, relying upon one very strong predictive variable rather than many, and the therapy is very simple. It combines the right autoimmune medication with something, like a benzodiazepine, that stabilizes the autonomic nervous system. Earlier versions used a selective beta blocker and saw some very good effects. Inmedix is a private company at this point, but if its additional data is good, the company may interest very early investors. It’s a very interesting play. TLSR: What about public companies? AL: I have a number of them. On the regenerative side, RepliCel Life Sciences Inc. (RP:TSX.V; REPCF:OTCQB) and Capricor Therapeutics (CAPR:NASDAQ) are very interesting. I’ve been watching the regenerative arena carefully. The interesting thing is the idea that we can rejuvenate parts of the human body or even, perhaps eventually, the entire human body. Most people agree that’s a disruptive development and worthy of further development. Many think regenerative medicine is too early in its lifecycle to seriously be considered as an investment opportunity. But while some applications are in the distant future, others just need refinement. Some regenerative medicine therapeutics, especially those treating major organs or in some of the boutique areas of the sector, are being commercialized now. People, including scientists, who haven’t followed regenerative medicine often are surprised at how far some companies have gotten in terms of results, costs and manufacturability. RepliCel caught my attention because of its hair regeneration or restoration technology. That may not be the application that first goes commercial, but it’s interesting, and there’s a lot of money in this area. About a year ago, BioWatch asked the former president of a cosmetic therapy professional organization to describe the typical hair replacement procedure. It’s incredibly invasive. RepliCel has a way of using dermal-related cells that is far less invasive.

“Many companies are creating bispecific antibodies that may recreate what CAR Ts do at a fraction of the cost.”

RepliCel’s technology can be used to regenerate hair, and a related technology can be used to repair tendons for patients with tendinitis or major tendon injuries. Interestingly, because of the nature of the cells it is using and its process, cost and scale aren’t issues. Other scientists give it a thumbs up, saying the science is good. The company is currently in a set of Phase 1 and 2 trials for both the hair regeneration and for tendon repair. Early results seem to be very good. RepliCel is under the radar. It based in Vancouver, British Columbia, and trades off the Canadian exchange and over the counter in the U.S. at very low prices. Keep an eye out for the next set of results and for a move to a major stock exchange. For those who want to get in very early, this is a very provocative, very interesting company.

To continue reading the article, click here.

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To read the full article as it appears on The Life Science Report, please click here.

Volatility is the nature of the biotech beast, and it must be tamed or utilized to advantage. That’s the philosophy of Eden Rahim, portfolio manager and option strategist at Theta Strategies Capital. Can you grow a portfolio if some of your more successful names are called away by option buyers before the stock goes into the stratosphere? The answer is yes, and in this interview with The Life Sciences Report, Rahim describes his technique and leaves readers with six names that he fully expects to reap very large gains.

The Life Sciences Report: You are CEO and cofounder of Theta Strategies Capital, and also the portfolio manager and innovator of the Next Edge Theta Yield Fund, which derives income from the options strategies you have developed over two decades. These strategies profit, in part, from the decline in pricing that occurs as options approach expiration. Could you describe that strategy?

Eden Rahim: Yes. My partner, Mike Bird, and I formed Theta Strategies Capital a couple of years ago to provide institutions with income and hedging solutions using option strategies as an advantage. We thought we would be able to add yield to institutional portfolios, dampen volatility and protect against downside. We have designed and traded a variety of strategies through virtually every crisis in the past couple of decades.

“BrainStorm Cell Therapeutics Inc. is an inexpensive way to get exposure to a potential blockbuster technology.”

In January, we launched a prospectus fund called the Next Edge Theta Yield Fund. Essentially, what we do is exploit the mathematical property of all options to lose value with the passing of time. That property is called theta. If you own an option, it loses a little bit of value every day, regardless of the underlying security or index. We first conceived of this fund back in 2002, and thought of it as a novel way to provide yield. Bond investors are always trying to pick the best income funds. We created a yield product that exploits strategies option market makers use, and we brought that to average investors through this prospectus-based fund.

TLSR: So, at least with your income fund, you don’t care which way the market is going?

ER: No. Our mandate is agnostic. We don’t rely on forecasts and market direction. We’re not trying to predict whether the market will go up or down, as a traditional fund would do. We know the market is going to do whatever it wants to do. We can’t control that. The Theta Yield Fund basically holds 90–95% cash, and we invest in limited-risk option spreads that exploit time to expiration.

TLSR: As simply as possible, give me an example of how writing an option works for you.

ER: Sure. We use a variety of risk-defined strategies, one of them being a call calendar, for example. Let’s say the S&P 500 is sitting at 2,100 right now. A one-month call option trades at about $25, and it loses value, or decays, about $0.60 a day. A two-month option with a 2,100 strike price costs $40, or 60% more, but that option loses only $0.40 a day. So the longer-dated option loses less value each day than the shorter-dated option. If you short the one-month option at $25 and buy the two-month option with a 2,100 strike at $40, it costs you $15, but with the whole position, you benefit by a gain of $0.20 a day. You’re not making a market call because you’re long and short at the same strike price. All you’re doing is exploiting that property of options to lose value, and you benefit from it. Again, exploiting that property is what we call a theta strategy.

TLSR: Why do you hold so much cash in the Theta Yield Fund?

ER: We only write premiums equal to 2–3% of the net asset value (NAV) of the funds because we’re not there to hit home runs. We’re just trying to hit singles for average. We want to have very low volatility. We want to be agnostic to market changes.

We could obviously have higher returns. The goal is to earn about 0.5% to 1% per month, with very low volatility. If we do that, the fund earns its stripes.

TLSR: Let’s talk about your Bio-Tech Plus Fund. It’s a growth fund. Do you hedge this fund? You limit your upside that way, don’t you?

“When I can get potential blue-sky regenerative technologies like RepliCel Life Sciences Inc.’s at this small valuation, I’m buying.”

ER: Yes. That’s a great point. I do hedge the portfolio. And that does, at times, limit the upside of the portfolio, but with the key ancillary benefit that it also limits the downside exposure. You and I both know that with biotech, it can be up by the escalator, then down by the elevator at times. During this five-year bull, in 2010, 2011 and 2013 we had 15% corrections, and in 2012 and 2014 we had 25% corrections. And yet the bull goes on. It’s just par for the course in the sector. Even this year, in March and April we had 10% selloffs from the peak to the trough, all within this bull move. That’s just natural to biotech. We accept it for what it is, and we take steps to dampen that volatility because we’re counting on stock picking to deliver our returns.

One of my holdings is Inotek Pharmaceuticals Corp. (ITEK:NASDAQ). It’s up more than 100% in a very short period, and that one position adds about 1% return to the fund. I rely on stock picking for excess returns, and then I try to dampen the sector volatility with hedges and written calls. That’s the philosophy behind it.

TLSR: Eden, you have some stocks in the Bio-Tech Plus portfolio that range from $20 million ($20M) to $60M in market cap. These are true micro-cap stocks. You also have some small caps, in the $200–300M range. But you can’t write options on the very small names, can you?

ER: No. Most of the options we have written are in the mid-cap area. I’ve written calls against Acadia Pharmaceuticals Inc. (ACAD:NASDAQ), Amicus Therapeutics Inc. (FOLD:NASDAQ), Halozyme Therapeutics (HALO:NASDAQ), Portola Pharmaceuticals (PTLA:NASDAQ), Raptor Pharmaceutical Corp. (RPTP:NASDAQ), Supernus Pharmaceuticals Inc. (SUPN:NASDAQ) and Synergy Pharmaceuticals Inc. (SGYP:NASDAQ). They’re in the $1–2 billion ($1–2B) range. Each of those are roughly 1.5–2% weights in the fund. And they have all had big moves. I’m trying to hold them for the long term, but when they get extended and move far above their moving averages in a short period of time, as some of them have, I will write options.

Cipher Pharmaceuticals Inc. is a decent risk/reward proposition.”

Every once in a while you miss it and a company might move higher, like Ultragenyx Pharmaceutical Inc. (RARE:NASDAQ). I sold options on my Ultragenyx position at $100 after it moved up from $54, but it then went to $127. It was crazy. I did leave some upside on the table there, but you don’t know these things in advance. Ultragenyx could just as well have fallen back to $90 or $85.

Over time, options just add an extra form of defense for our unit holders because nothing grows to the sky. When these stocks move far above their 50-day moving averages, I’ll write the options.

TLSR: Your Bio-Tech Plus Fund invests in small- and mid-cap Canadian and U.S. biotech companies, as well as some specialty pharmas. My understanding is that over nine years, from 1995 to 2003, you achieved a 26% annual compounded rate of return in a biotech mandate at RBC. You are obviously seeking and achieving growth. If you had to narrow it down, what handful of critical principles should investors adhere to when investing in small-cap biotech stocks?

ER: I think the first principle is to have a healthy respect for the volatility of the biotech sector, and to find ways to use that volatility to your advantage. It’s going to be there anyway, so try to make volatility your friend.

A second principle would be to reduce complexity by following a proven discipline. It doesn’t have to be mine; everyone can find their own. Not straying too far is the key. My discipline is to focus primarily on midstage companies that report efficacious data from well-designed, controlled trials where the data are peer-reviewed. That’s my wheelhouse. I tend not to play overwhelmingly in the preclinical or Phase 1 stages. My exception is that I do play in early-stage regenerative medicine and central nervous system (CNS) indications.

I also rely heavily on key opinion leaders (KOLs), paying attention to what they say about a drug and how it’s going to be adopted by physicians and patients. This is one way to reduce complexity, and is very important.

We’re in a secular bull market—probably a decade-long bull at a minimum—and it is behaving in a very orderly fashion.”

A fourth principle might be to watch what the big money is doing. What technologies are big biotech and big pharma spending on? I try to watch the Genentechs (a unit of Roche Holding AG [RHHBY:OTCQX]), the Amgens (AMGN:NASDAQ), the Biogens (BIIB:NASDAQ), and so on. They have enormous, limitless resources with which to look at molecules, receptors, target sites and mechanisms of action. See what they’re doing, and then find the smaller companies working on something similar.

If I could suggest a fifth principle, it would be to focus on companies that, even though they may be in midstage development, have identified a path to profitability. I’ve seen too many companies get through the approval process and never make money. Perhaps they developed a me-too drug with too small a market, or something like that. The path to profitability has not been mapped out, and the company just burns capital.

TLSR: What is the most favorable environmental factor for biotech today? Is it the technicals? Is it regulatory? Is it the group of new technologies—immune checkpoints, gene and cell therapies, antisense—that are going to feed pipelines for the next two decades?

ER: The new technologies are certainly drivers. There have been revolutionary advances. Illumina Inc. (ILMN:NASDAQ), for example, was able to take the cost of sequencing a genome down from $2.7B to $10,000 ($10K), and that’s now down to about $1K. We’re seeing a technology revolution in biotech enabled by enormous computing power. Our understanding of protein folding right now, for instance, is revolutionary. What CRISPR (clustered regularly interspaced short palindromic repeats) is doing to gene editing is revolutionary. A genome can be edited now in any location. These are drug discovery tools that never existed before, and the increase in scale has been exponential. The technology revolution is one of the underpinnings.

The regulatory environment is another area where things have changed. The FDA started issuing breakthrough designation statuses, generally for rare indications with high fatality rates. Then another group of companies began developing drugs for very narrow populations, and their costs of capital plummeted because the barriers to approval and commercialization went way down. There was also a whole group of initial public offerings that came of age in 2012, 2013 and 2014, and some of these have soared.

It’s going to be there anyway, so try to make volatility your friend.”

I think the stock and biotech index charts showing the multiyear biotech breakouts are capturing the spirit of what’s going on collectively in the space. They confirm that we’re in a secular bull market—probably a decade-long bull at a minimum—and it is behaving in a very orderly fashion. Lots of people have stood on the sidelines and not participated in it. They’ve been calling it a bubble because they remember 2000. I remember 2000 well, and I remember 1992 well, and I remember 1983 well. This is not that. There is something unique happening here, and there’s a fundamental basis for it.

TLSR: Could we talk about some companies in your portfolio?

ER: One of the names on my list is BrainStorm Cell Therapeutics Inc. (BCLI:NASDAQ). I became aware of this company after it reported Phase 2a data in amyotrophic lateral sclerosis (ALS) back on April 21 at the American Academy of Neurology annual meeting in Washington D.C. It was a small trial—just 14 patients and open-label, but it showed up on my radar. I’m always looking for companies in the CNS space, and this one intrigued me.

The data showed that in reinfusing its proprietary NurOwn cells (neurotrophic factor-secreting mesenchymal stem cells [MSC-NTF]), BrainStorm was able to trigger expression of neurotrophic growth factors (NTFs), and there was a definite trend to reduction in the rate of deterioration in ALS six months out. This activity is very interesting. This is an autologous therapy, derived from the patient’s bone marrow. The stem cells are administered directly by injection into the subarachnoid space in the spinal canal. This is called intrathecal administration. They are also injected into muscles—all close to the damaged sites.

It intrigues me that BrainStorm is able to separate the mesenchymal cells from bone marrow and then trigger secretion of neurotrophic growth factors. With a $52M market cap and about $15M in cash on the balance sheet, BrainStorm is awfully cheap for having a compound that has shown a trend toward reduction in ALS progression. It may turn out that multiple doses need to be used.

Right now these are basically safety studies looking for little signals of efficacy, so the company is using a single dose. I think BrainStorm is an inexpensive way to get exposure to a potential blockbuster technology.

TLSR: Why do you think BrainStorm is inexpensive? Since this is an autologous therapy, do you think investors could be thinking about Dendreon Corp.’s (DNDN:NASDAQ) bankruptcy?

ER: You’re dead right about Dendreon. But when I look at the autologous nature of this technology, I think of that as an advantage, given the relative safety of using a patient’s own cells. Another thing is that Dendreon’s cancer vaccine, Provenge (sipuleucel-T), addresses a very different issue compared to a neurodegenerative disease. But it could be that BrainStorm’s NurOwn is painted with the same broad brush.

TLSR: The company began a Phase 2b trial with NurOwn in ALS in May 2014. This is a 48-patient, double-blind study. Will results of this study be the next share-price catalyst? When will we be hearing the data?

ER: Those data are due out in early spring 2016. As often happens, I suspect the stock will start to anticipate the event and begin to accrue upward in anticipation of it. Brainstorm shares moved up between February and mid-April in anticipation of the 14-patient trial data, but then pulled back pretty sharply. Speculative investors looked at it and said, “Oh, there’s nothing here for a year, so I’m going to move on.”

TLSR: Go ahead to the next name, please.

ER: An interesting little Canadian company called RepliCel Life Sciences Inc. (RP:TSX.V; REPCF:OTCQB) has, again, an autologous cell platform. It’s a regeneration technology. One indication the company is going after is chronic Achilles tendinosis, and that is based on the non-bulbar dermal sheath (NBDS) cells of the hair follicle. These RCT-01 (NBDS fibroblast therapy) cells are used to restore functional deficits in the tendon, and they are harvested from a single punch biopsy. Another indication is androgenic alopecia; the company is utilizing dermal sheath cup (DSC) cells isolated from the bottom of the hair follicle with its RCH-01 therapy.

“Options just add an extra form of defense for our unit holders because nothing grows to the sky.”

Here you have a micro-cap company with a technology that essentially has been endorsed by Japan-based Shiseido Company Ltd. (4911:TYO) in alopecia. RepliCel has also created a unique injector to load the stem cells back into the epidermis. This injector has a market of its own. The company also has a Phase 1 program with RCS-01 for sun-damaged and aging skin.

RepliCel is in three different trials. RCT-01 is in a 28-patient, Phase 1/2 study in Achilles tendinosis. RCS-01 is in a German Phase 1 trial in aging and damaged skin, which could be a big market eventually. And RCH-01 is in a Phase 2 for alopecia with Shiseido. We’ll see alopecia data in a couple years. With three indications being developed, plus the injector technology, RepliCel is highly intriguing. When I can get potential blue-sky regenerative technologies like this at this small valuation, I’m buying.

TLSR: Except for the chronic Achilles tendinosis indication, RepliCel is developing technologies that are going to be largely out-of-pocket for patients. There will be no reimbursement for treating baldness or sun-damaged or aging skin. Is that a plus or a minus for RepliCel?

ER: It’s probably a minus, but there are people who are willing to pay premium prices for these esthetic services. Keep in mind that for a company this size, with a $23M market cap, it doesn’t have to be a gigantic market. Think about Botox (onabotulinum toxin A; Allergan plc [AGN:NYSE]), which was able to grow an enormous business for an esthetic therapy. I think the same thing will be true for alopecia and sun-damaged skin.

TLSR: If you could go to the next company, please.

To read the full article please click here.

Eden Rahim, cofounder and CEO of Theta Strategies Capital, applies options to source income and returns through strategies not easily accessible to investors, while protecting capital with hedges designed over his career. His experience includes two decades of portfolio and hedge fund money management, as well as work as an options strategist, derivatives and biotech analyst and portfolio manager. Rahim has managed and traded an options book spanning 250+ securities globally and four commodities, with open interest of 500,000 contracts in addition to 14 covered call ETFs (over $0.5B AUM) in Canada, the U.S. and Australia, employing his options writing discipline at Horizons Exchange-Traded Funds. Rahim possessed a top-quartile, five-year, five-star growth fund portfolio manager track record on over $1B in assets across four mandates at RBC Global Asset Management. In addition, Rahim has delivered a +26% compounded annual return across a biotechnology mandate between 1995 and 2003. He also has extensive institutional hedging experience through major crises, and experience in the structuring of notes to create specific payoff profiles.

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Source: Gail Dutton of The Life Sciences Report
Regenerative medicine is just beginning to be understood by governments and investors alike. Last autumn, new regulations took effect in Japan that promise to speed patient access to some of these new therapies. In this interview with The Life Sciences Report, Colin Lee Novick, managing partner with CJ PARTNERS, describes Japan’s regenerative medicine frontier and lists investment-worthy companies that are pushing the boundaries.

The Life Sciences Report: Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) has provided an expedited path to approval for regenerative therapies. How does that help propel Japanese regenerative medicine companies into the life sciences mainstream?

Colin Lee Novick: In terms of getting seed monies and technologies, the West has a much more vibrant venture capital environment, whereas Japan is heavily focused on university research. A lot of Japanese startups do preclinical and early clinical development studies at universities. Japan’s equivalents to clinicaltrials.gov, for instance, show that research institutes and national universities perform almost all regenerative medicine clinical trials.

But there seems to be a belief in Japan that regenerative medicine may become the fourth pillar of medicine, joining small molecules, biotherapeutics and medical devices. Now that Japan has the framework in place, making regenerative medicine a success requires will, capital and some success stories.

“Regeneus Ltd. is actively seeking Japanese partners for Progenza.“

I think the will is there. You can see it among the researchers. They’re very excited, and a lot of Japanese—including Japanese companies, researchers, politicians and regulators—believe in it. The traditionally very cautious PMDA, and the Ministry of Economy, Trade and Industry (METI) are also on board.

Now the growth of the industry depends on obtaining funding, and seeing which companies will bring the more successful seeds of innovation to fruition. Currently, that means Japanese large pharma. Banks, traditionally, have been the Japanese funding vehicles of choice, but the banks are not in a position to make a big move. Therefore, Japanese companies must find ways to interest other investment options.

TLSR: Do you see venture capital playing a larger role in Japan?

CN: To be frank, I think foreign venture capital will catch on faster than Japanese venture capital. The first few infusions of capital into Japanese regenerative medicine probably will be from foreign capital entities. In that respect, Japan will be a follower. But in terms of establishing a regulatory framework, the country definitely has taken the lead.

TLSR: My understanding is that the new regenerative medicine regulations give conditional marketing approval for regenerative therapies before all the clinical trials are completed. How does that affect life sciences companies in Japan and globally?

CN: First, the PMDA has mentioned there is a slight misunderstanding as to the time-limited and conditional approvals mentioned in the legislation. There is not a separate pathway for regenerative therapies. The application form for any type of clinical trial in Japan is exactly the same.

But if the clinical trial is for regenerative medicine or cellular therapy, and if the therapy appears safe and efficacious after Phase 1 or Phase 2, the PMDA may, at its own discretion, grant conditional approval. Companies should not say they are aiming for conditional approval or try to influence the PMDA to grant it. That won’t put a company in a positive light. Instead, companies might mention that they are hoping, should clinical trials present with the right type of data, that the PMDA may consider the therapies for conditional approval. It’s a small difference, but when translated into Japanese, it is much more distinct.

“There seems to be a belief in Japan that regenerative medicine may become the fourth pillar of medicine.”

How does the legislation affect both Japanese companies and Western companies? I’ll begin with the Japanese. The smaller Japanese biotechs and venture companies don’t realize how much the new laws have put Japan in the spotlight. As they understand this, I believe they will begin producing much more information in English, because they’re not getting the attention of Japanese big pharma or the banks. These companies will begin looking for partners outside Japan. They offer new sources of innovation to Western companies and, when compared to similar companies in the West, they are not nearly as costly.

Many of these companies have amazing technology and some very advanced research, but it’s all in Japanese, so it is relatively undiscovered.

The behemoths of the Japanese life sciences industry are the opposite. They aren’t particularly interested in teaming up with smaller Japanese companies and positioning them as the centerpieces of their regenerative medicine strategies. This is because these smaller domestic firms do not generate the global media attention the larger companies want.

The smaller foreign biotechs want to partner with big names, like the recent Chugai Pharmaceutical Co. Ltd. (4519:TYO) and Athersys Inc. (ATHX:NASDAQ) announcement. The big names already have connections with the PMDA and can handle bringing foreign innovation into Japan. Deals with major players signal to international investors and markets that “we’re here and we’re making moves.”

From a Japanese standpoint, the regenerative medicine laws serve as an impetus for both large and small foreign companies to find partners and bring their seeds to the Japanese market.

TLSR: Has the influx of American and European companies to Japan begun?

CN: They’re excited, and they’re moving into Japan from many jurisdictions. European companies are a bit slow to deal with Japan in regenerative, but that’s to be expected because Europe already has a relatively advanced regulatory framework for regenerative and cellular medicines. The FDA, in contrast, is slower. That could help account for the many U.S., Canadian and Australian regenerative medicine firms we see here. But the Europeans will come, and they’ll come relatively soon.

TLSR: What do you see in terms of opportunities for foreign companies to partner with Japanese companies?

CN: Not even the PMDA fully understands how this new law will pan out. Therefore, smaller foreign regenerative medicine companies looking to enter into Japan shouldn’t go it alone.

Regulators—the PMDA or other parts of the Ministry of Health, Labor and Welfare (MHLW)—are looking for a success story, and they will be much more at ease if they’re dealing with familiar faces—Chugai and not Athersys, or Shiseido Company Ltd. (4911:TYO) rather than its partner RepliCel Life Sciences Inc. (RP:TSX.V; REPCF:OTCQB).

“It’s a longer game here in Japan, but if you stick with a company and work with it for the six extra months that it takes, you’ll be rewarded.”

In the Shiseido-RepliCel deal for hair regeneration, for instance, the MHLW’s Regional Bureaus of Health and Welfare will appreciate RepliCel’s presence because of its technology and understanding, but are more likely to deal with a Japanese company that they’re used to talking with. They understand the same language, which makes things a lot easier.

Australia’s Regeneus Ltd. (RGS:ASX) is actively seeking Japanese partners for its adipose-derived mesenchymal stem cell osteoarthritis drug, Progenza, and I suspect that others will follow in Regeneus’ footsteps.

Large Western companies looking to enter Japan have an opportunity to work with smaller Japanese firms with amazing technology but limited capital. Rather than spending hundreds of millions of dollars to buy a regenerative medicine company in the U.S., you can get similar technology, modified to fit Japan’s intellectual property positions, at a fraction of the price.

With constrained capital access, Japanese companies operate much leaner than many of their U.S. counterparts, leveraging the resources of topnotch universities at a cut-rate price. If foreign companies were to approach them with an amount larger than they could raise from the government, banks or traditional funding avenues—but still less than necessary to partner with a similar company in the U.S.—that would be very difficult for Japanese companies to refuse. It’s a relatively easy way to enter the fledgling Japanese regenerative medicine market.

TLSR: How are Japanese companies repositioning themselves to take advantage of the new regulations?

CN: A couple of the larger companies, like Rohto Pharmaceutical Co. Ltd. (4527:TYO), Astellas Pharma Inc. (ALPMF:OTCPK; 4503:TYO) and also Otsuka Holdings Co. Ltd. (OTSKF:OTCPK; 4578:TYO), have set up internal teams that focus specifically on regenerative medicine.

“The regenerative medicine laws serve as an impetus for large and small foreign companies to find partners and bring seeds to the Japanese market.”

Asahi Kasei Corp. (3407:TYO), a very large chemical company, is another good company to follow. It established a small team focused on developing a strategy to enter the regenerative medicine market, aside from its pharmaceutical subsidiary Asahi Kasei Pharma.

Some companies, like Takeda Pharmaceutical Co. Ltd. (TKPYY:OTCMKTS; 4502:TYO), have made statements indicating interest in regenerative medicine.

TLSR: What advantages do Japanese companies have entering Japan’s regenerative market?

CN: The West is focused on the revised Pharmaceutical Affairs Act, but inside Japan, the focus is evenly split between that and the Act on the Safety of Regenerative Medicine (ASRM). The advantage Japanese companies have is their better understanding of the ASRM, so they are positioned to take advantage of it.

TLSR: What are the challenges of leveraging the ASRM?

CN: It’s not necessarily wonderfully designed, so I suspect U.S. and European regulators may not accept data collected from trials or research conducted under the act.

TLSR: Why do you predict problems?

CN: While the Pharmaceutical Affairs Act calls for following standard international guidelines for good manufacturing practices (GMP) and good distribution practices (GDP), the ASRM doesn’t. The ASRM allows medical institutions, at their discretion, to run clinical research and provide clinical and therapeutic treatments to patients using regenerative medicine and cellular therapies under a new umbrella framework overseen by the Health Policy Bureau rather than the PMDA. This may make it more difficult for Western regulators to accept that information.

TLSR: How many regenerative medicine clinical trials are underway in Japan now?

CN: Right now there are 340 stem cell-related trials listed on UMIN-CTR, which is one of the equivalents of clinicaltrials.gov. The vast majority are sponsored by a research institute or a national university.

TLSR: Do any themes emerge in terms of approach or therapeutic areas?

CN: The Japanese companies are focused on autologous stem cell therapy because of their early work with cell sheets—a flat scaffold on which cells were grown. That really hit the news here in Japan a few years ago, after Professor Shinya Yamanaka won the Nobel Prize for his work with iPSCs (induced pluripotent stem cells) in 2012.

TLSR: What companies should investors be watching?

CN: Japan Tissue Engineering Co. Ltd. (7774:TYO), a subsidiary of Fujifilm Holdings Corp. (4901:TYO), focuses on autologous stem cells. J-TEC has the only two regenerative medicine therapies that have been approved for use in Japan. One is called J-TEC Autologous Cultured Cartilage (JACC), and the other is J-TEC Autologous Cultured Epidermis (JACE).

Fujifilm, which just increased its stake in J-TEC to more than 50%, is now squarely in the regenerative medicine arena. In reinventing itself from a film company, I suspect Fujifilm may also be trying to position itself as a contract manufacturer.

Shionogi & Co. Ltd. (4507:TYO) is another promising company. If Takeda had a very successful younger brother, it would be Shionogi. Traditionally, the two have a similar feel in discussions and in terms of what makes them tick. They hold meetings the same way. They make decisions the same way. The main difference is that Takeda is becoming slightly more global now that it has brought in a Western CEO.

“The first few infusions of capital into Japanese regenerative medicine probably will be from foreign capital entities.”

Then, of course, there’s Rohto Pharmaceutical, a relative unknown outside of Japan. Rohto bought a state-of-the-art plant in Kyoto from Bayer AG (BAYRY:OTCMKTS; BAYN:XETRA) and is refurbishing a portion to manufacture adipose-derived mesenchymal stem cells.

Rohto is positioning itself to leverage this new wave of interest in regenerative medicine. This is an over-the-counter (OTC) drug and skin care product company, and is one of Japan’s most respected and award-winning manufacturers within the OTC arena.

The manufacturing facility in its Kyoto research village is expected to be operational soon. Knowing Rohto, that facility will give other companies a very strong run for their money. If you’re a foreign company and you want to manufacture something in Japan, Rohto should be on your list. The other contract cell manufacturers of note are Takara Bio Inc. (4974:TYO) and Medinet Co. Ltd. (2370:TYO).

I also follow I’rom Group Co. Ltd. (2372:TYO). I’rom was founded in the mid-1990s to provide clinical trials support for physicians and hospitals. It expanded into the clinical research organization (CRO) business and then to medical mall development, while keeping an eye on a Japanese government regenerative medicine project that eventually became ID Pharma Co. Ltd.

ID Pharma’s primary platform technology is an RNA sendai virus vector. Unlike DNA vectors (like the often-used adenoviral vectors), RNA vectors do not pose the risk of integrating with the host’s DNA. A simian immunovirus vector also is in development as a secondary platform technology.

The company’s portfolio also includes more than a dozen drugs—for example, prophylactic and therapeutic AIDS vaccines, some of which are being developed in close collaboration with the International AIDS Vaccine Initiative. The company is also developing glaucoma therapeutics. Its lead compound, however, is DVC1-0101 to treat critical limb ischemia and intermittent claudication. [Editor’s note: I’rom Group owns 22.22% of CJ PARTNERS Inc.]

A couple more companies that investors should consider, either as investment prospects or as comparison points, are PharmaBio Corp. (private), which is partnered with an Australian company called Cell Therapies Pty Ltd. (private), and Nikon Corp. (7731:TYO), which is partnered with Lonza Group AG (LONN:SIX; LO3:FSE; LZAGF:OTCPK).

TLSR: What milestones should investors watch for in the coming months to gauge the success of these companies in this new environment?

CN: I would be on the lookout for whether JCR Pharmaceuticals Co. Ltd.’s (4552:TYO) product for graft-versus-host disease (a preparation of mesenchymal stem cells dubbed JR-031 in Japan, and Prochymal elsewhere) receives a regular approval—which I expect—or receives conditional approval. If it receives conditional approval, it will set a precedent. What must be shown in terms of probable efficacy to receive conditional approval remains to be seen, so watch this approval closely.

Also watch announcements from the major Japanese companies to see how they are investing in regenerative medicine, and watch the companies foreign investors are partnering with.

TLSR: How does your personal history add value in your business?

CN: I’m a third culture kid. My brother, sister, and I came to Japan when we were very young. My father was a U.S. Navy officer. Early on, my parents decided we needed to learn Japanese; I still speak marginally better Japanese, especially when it comes to business, as most of my business career has been here in Japan.

How does that translate into value for our companies and clients? At my previous company, SMBC Nikko Securities Inc., I noticed Japanese companies negotiating with foreign companies inevitably were less successful because the conversations inevitably were in English. Therefore, we provide the Japanese with a conduit for better negotiations.

“The Japanese companies are focused on autologous stem cell therapy because of their early work with cell sheets.”

For foreign companies, the major challenge is that Japanese negotiations move at a much slower pace than in the West. When working with Western companies, I must explain that even signing a confidentiality agreement is a big deal for the Japanese because it’s a sign of interest. People in Japan need to be seriously interested in the opportunity before they will sign a nondisclosure agreement. Once signed though, you can consider the deal to be further along than at a similar junction in a traditional “Western” deal.

It’s a longer game here in Japan, but if you stick with a company and work with it for the six extra months that it takes, you’ll be rewarded. Too many Western companies pull out too soon when trying to strike a deal with a Japanese company.

TLSR: Do you have any parting thoughts for our readers?

CN: Growing up in Japan and understanding the Japanese culture, I realize Japan can be frustrating. It’s a very difficult nut to crack. But it’s the second largest pharmaceutical market on the planet. It has an aging society. It’s very affluent. And it has one of the best healthcare plans in the world.

The gentleman’s agreement still exists in Japanese business, which is why it takes a long time for Japanese executives to make a decision. But if you stick with it, take the time and use the resources necessary to find a good partner here in Japan, it can be a very rewarding market.

There are between 200 and 300 noteworthy Japanese companies operating in the pharmaceutical market. That makes it likely that a foreign company will find a partner with the right connections to industry, physicians and hospitals and, importantly, the right emotional quotient, so the partnership can work for years.

I would advise companies that have tried to enter Japan before, and given up, to try again. Consultants like myself can help. The Japan External Trade Organization (JETRO) is another good place to start. If Japan isn’t on your radar, put it on your radar. Japan is going places with regenerative medicine.

TLSR: Thank you for sharing your insights.

Colin Lee Novick is cofounder and managing director of CJ PARTNERS. As an American born in South Korea and raised in Japan, Novick matriculated from Japanese public school to study at Cornell University. After working as a management consultant at Deloitte Tohmatsu Consulting within the Financial Services Industry Group for three years, Novick sought out a new industry at SMBC Nikko Securities, where he facilitated mergers and acquisitions. In 2012, Novick and cross-cultural colleague Jason David Sieger founded CJ PARTNERS Inc. to assist in Japan Inc.’s development.

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Click here to view the article on Cantech Letter

Vancouver-based RepliCel Life Sciences (TSXV:RP) concentrated on hair regeneration until 2011, participating in the $3 billion annual male pattern baldness industry. But when the far-reaching effects of its solution became apparent to its founders, RepliCel began expanding its offer to apply the technique of using cell therapy to encourage the healing of damaged or injured tissues to other body parts.

The company recently partnered with Tokyo-based cosmetic giant Shiseido, offering RepliCel access to the vast Asian market.

Cantech Letter talked to RepliCel as part of our “Five Questions” series. Our “Five Questions” Series runs all this week, posing the same five questions to up-and-coming Canadian innovation sector companies.

What does your company do?

RepliCel Life Sciences Inc. is a regenerative medicine company focused on developing autologous cell therapies for the treatment of musculoskeletal tissue injuries, aging and UV-damaged skin and pattern baldness. All product candidates are based on RepliCel’s innovative technology utilizing cell populations isolated from a patient’s own healthy hair follicles.

RepliCel’s strategy is to license its assets to partners for late-stage development and commercialization. Shiseido, one of the world’s largest cosmetic companies, has an exclusive license for RepliCel’s pattern baldness product, RCH-01, in certain Asian countries including Japan, China and South Korea.

What problem are you trying to solve?

RepliCel is developing autologous cell therapies which address conditions caused by a deficit of the healthy, active cells required for normal healing and function.

RepliCel’s propriety injector device (RCI-02) is programmed to control depth, dose, and volume of the injection and allows for widespread injections across broad areas. In addition, RepliCel’s device has a built-in peltier element which numbs the skin just prior to injection eliminating the need for anesthetic. These features distinguish Replicel’s dermal injector from any others currently on the market.

How is your solution better than what is currently offered?

The regeneration of chronically injured tendon, the natural rejuvenation of the extra-cellular matrix under the dermis of those with aging or sun-damaged skin, and the regrowth of hair for those people suffering from pattern baldness attributed to androgenic alopecia are not conditions which can be resolved by currently available products or treatments.

How big is the market you are addressing?

The combined total addressable market size for pattern baldness, skin rejuvenation, tendon repair, and a next-generation dermal injector potentially valuable for any kind of dermal injection is understandably large – easily estimated at >$2 billion annually.

What will you be working to accomplish in the next year?

2015 is on track to be a transformative year for RepliCel as we move each of our assets into next-stage of clinical development. We anticipate accomplishing the following over the next 12 months:

-Clinical data from the RCT-01 (chronic Achilles tendinosis) trial in Canada and from
-Clinical data from the RCS-01 (aging and sun-damaged skin) trial in Germany
-Receipt of a CE mark clearing the RCI-02 dermal injector for sale in Europe
-Execution of a licensing partnership in Japan for RCT-01 or RCS-01
-Execution of a global licensing partnership for RCI-02 for select product(s)
-Launch of our phase 2 RCH-01 (pattern baldness) clinical trial in Germany
-Shiseido’s launch of its RCH-01 (pattern baldness) clinical trial in Japan
-Technology transfer complete to a contract manufacturing facility in North America

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Posted by Richard Tsai on May 28, 2015 11:00:00 AM

When Shinzo Abe was re-elected as Japan’s Prime Minister he aggressively embarked on a challenge to revive Japan’s “sluggish” economy. With the introduction of Abenomics, an economic policy that includes “three arrows” of fiscal stimulus, monetary easing, and structural reforms, the ball was set in motion to redefine Japan’s standings within the global market. Over the past several years, Japan has developed a foothold in the cell therapy clinical trial space and gained global attention based on their regulation reform. In this blog, we’ll address how these new regulations are impacting cell therapy clinical trials conducted by the biopharma industry on a global scale.

The Streamlined Regulatory Process The national focus on regenerative medicine and cell therapies in Japan, coupled with Abenomics, paved an accelerated pathway for a new regulatory system to be put in place last year. According to Toshio Miyata, executive director of the Health and Global Policy Institute in Japan, “the new approval system for the commercialization of cellular therapy products would move approval from the end of clinical trials to a stage intermediate between the confirmation of probable benefit and safety and marketing with further confirmation of efficacy and safety to follow.” As the figure below (courtesy of National Academy of Sciences) indicates, this new regulatory framework expedites the clinical development process by limiting the amount of time, and money, spent in the clinical trial phase.

Advantages of Changing Regulations Several advantages of these regulatory changes were recently published in a blog by Robert Kamphuis,General Manager, Fisher Clinical Services, Japan. The post noted how the changes have increased the ease to which clinical trials are facilitated in Japan, including:

“Clinical Research Associates (CRAs) no longer have to hand-carry clinical trial materials to clinical sites. There is no longer a legal need for a ‘white glove’ approach.
Investigator sites are more willing to use clinical product manufactured and packaged outside of Japan, without additional quality testing. I would estimate 99% of all product received from overseas is stored and distributed to sites as is.
Distribution patterns have changed. Direct-to-site distribution has increased significantly. To this end, there is a greater range of vendors offering supply chain solutions. However, they are providing logistical solutions only. There are very few leading players in the marketplace offering full-range solutions including packaging, labeling and comparator sourcing.
Greater acceptance and flexibility by local authorities who are willing to work with global contracts and globally set-up project structures.
A slow but steady increase in the uptake of Interactive Response Technology (IRT) systems in Japan, particularly for global or Asia studies. There is still a hesitation to use IRT for local Japanese studies, but this hesitation is beginning to diminish.
The signing of the Pharmaceutical Inspection Convention & Pharmaceutical Inspection Co-operation Scheme (PIC/S) by the Japanese government; a clear sign that the industry is keen to harmonize global GxP practices going forward.”

In addition to these advantages, the post also identifies several challenges including the obvious language barrier (though improving in younger generations of Japanese nationals), as well as the cultural differences that impact business operations.

Japanese Culture and Corporate Partnerships Japanese culture has been historically skeptical of Western culture, research, and corporations, making it a difficult market for foreign-owned entities to break into. However, to facilitate economic development within the cell therapy market, there has been increasing confidence by Japanese pharmaceutical companies in forging mutually-beneficial with foreign partners.

An example of this is evident by the corporate partnership between RepliCel, a Canada-based regenerative medicine company, and Japan-based cosmetics leader, Shiseido. Though this is an interesting partnership, it isn’t uncommon that a life sciences company would collaborate with a cosmetics company. In a recent interview RepliCel’s CEO, David Hall, discussed how a mutual interest in the treatment of male pattern baldness lead to discussions on how to get a product to market quickly.

“It’s always been a challenge [to break into the Japanese market] due to the different regulatory environment, as everyone will attest to. But with the changes that have been led by Prime Minister Abe, indeed making an international commitment in 2013 to improve the challenging regulatory environment especially in the area of regenerative medicine…that has highlighted a commercial strategy, a good business strategy, for biotech in the regenerative medicine business in particular to be going to Japan, where the rules themselves have opened up an opportunity under a still highly regulated environment…but the sort of accelerated paces to get into the clinic.”

He goes on to discuss how the new regulatory framework in Japan allows companies to avoid the lengthy protocols followed within the US, and “get products into humans in a quicker fashion, but also adjust their clinical protocols as they advance.” These new Japanese regulations allow the protocol to be adjusted and fine-tuned as you move along.

Conclusions

Although there are some challenges associated with conducting business in Japan, the new regulatory changes are already showing evidence of driving folks to partner and conduct clinical trials in this industry. If Japan’s changed approach to the industry proves to be as effective as they hope it to be, perhaps other countries’ regulatory bodies will follow lead, eventually decreasing the difficulty in getting cell therapies to market.

To learn more about some important considerations in transporting cell therapy materials, download our eBook, Commercially Successful Cell Therapies: Navigating the Ultra Cold Chain Distribution Minefield.

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Business | By Matthew Perrone | AP May 18, 2015

In this Dec. 5, 2014 photo, Dr. Mark Berman, of the Cell Surgical Network, injects a patient with a solution he says is rich in adult stem cells, at his practice in Beverly Hills, Calif. Berman’s company is the largest in the mushrooming industry of for-profit clinics that market stem cells to patients with dozens of different diseases and conditions. Critics say the businesses have flourished due to a lack of government oversight. (Raquel Dillion/Associated Press)

BEVERLY HILLS, Calif. — The liquid is dark red, a mixture of fat and blood, and Dr. Mark Berman pumps it out of the patient’s backside. He treats it with a chemical, runs it through a processor — and injects it into the woman’s aching knees and elbows.

The “soup,” he says, is rich in shape-shifting stem cells — magic bullets that, according to some doctors, can be used to treat everything from Parkinson’s disease to asthma to this patient’s chronic osteoarthritis.

“I don’t even know what’s in the soup,” says Berman. “Most of the time, if stem cells are in the soup, then the patient’s got a good chance of getting better.”

It’s quackery, critics say. But it’s also a mushrooming business — and almost wholly unregulated.

The number of stem-cell clinics across the United States has surged from a handful in 2010 to more than 170 today, according to figures compiled by The Associated Press. Many of the clinics are linked in large, for-profit chains. New businesses continue to open; doctors looking to get into the field need only take a weekend seminar offered by a training company.

Berman, a Beverly Hills plastic surgeon, is co-founder of the largest chain, the Cell Surgical Network. Like most doctors in the field, he has no formal background in stem cell research. His company offers stem cell procedures for more than 30 diseases and conditions, including Lou Gehrig’s disease, multiple sclerosis, lupus and erectile dysfunction.

There are clinics that market “anti-aging” treatments; others specialize in “stem-cell facelifts” and other cosmetic procedures. The cost is high, ranging from $5,000 to $20,000.

Berman and others point to anecdotal accounts of seemingly miraculous recoveries. But while stem cells from bone marrow have become an established therapy for a handful of blood cancers — and while there are high hopes that the cells will someday lead to other major medical advances — critics say entrepreneurs are treating patients with little or no evidence that what they do is effective.

Or even safe. They point to one stem-cell doctor who has had two patients die under his care.

“It’s sort of this 21st century cutting-edge technology,” says Dr. Paul Knoepfler, a stem cell researcher at the University of California at Davis. “But the way it’s being implemented at these clinics and how it’s regulated is more like the 19th century. It’s a Wild West.”

DISCOVERING ‘LIQUID GOLD’

Doctors in South Korea and Japan pioneered the fat-based stem cell technique, using it to supposedly enhance face lifts and breast augmentation. For years, U.S. patients would travel to hospitals in Asia, Latin America and Eastern Europe — places where regulation is more lax than in the United States — to have these procedures as part of the international “stem cell tourism” trade.

Plastic surgeons in the U.S. quickly realized the financial potential of the fat they were already taking out of patients’ bellies and backsides through liposuction — something that had been disposed of previously. Berman calls it “liquid gold.”

Some early adopters have expanded into chains, offering doctors across the country a chance to join the franchise after buying some equipment and attending a seminar. These doctors sometimes appear on local TV news broadcasts, drumming up new business from patients and stoking interest from other doctors.

One national chain markets itself online with accounts of celebrity athletes who have been treated with its stem cell procedures. Prospective patients are then directed to a call center, where sales representatives try to match them with stem cell doctors over the phone.

Berman spent over 30 years as a Beverly Hills cosmetic surgeon before co-founding the Cell Surgical Network in 2012. He and his business partner, a urologist, adapted equipment and techniques from Asia into a liposuction-based procedure.

Today, the Cell Surgical Network is the largest stem cell chain in the nation, with 67 locations and a roster of more than 100 doctors in 22 states. Doctors who join the network generally charge about $9,000 per procedure; they pay Berman and his partner $25,000 to $30,000 for a South Korean cell-separating machine and other equipment.

Stem cells have long been recognized for their ability to reproduce and transform into other cell types. Because of their ability to repair and replace tissue, they are thought to hold potential for treating many diseases and injuries.

Embryonic stem cells are the most versatile because they have the ability to form all the various cell types in the body, but their use in medicine is considered controversial by some because it involves the destruction of human embryos.

Adult stem cells are less versatile, but can be easily harvested from various tissues in the body, including bone marrow and fat. For decades, they have been routinely transplanted, first in bone marrow transplants and then in procedures that transfer the cells alone. They have been useful in combatting leukemia, lymphoma and other blood diseases, saving the lives of tens of thousands of people each year.

The stem cell clinics, though, promise results far beyond those currently considered prudent by mainstream medicine.

“I think responsible professionals have a broad consensus that marketing of these unproven interventions is premature and unprofessional, if not unethical,” says Dr. George Daley, a founding executive of the Harvard Stem Cell Institute and professor at Harvard Medical School

Julia Matsumoto, of Fountain Valley, Calif., claims stem cell injections have helped maintain her eyesight four years after being diagnosed with chronic relapsing neuropathy, which causes inflammation of the optic nerves and can lead to blindness.

Berman has treated her on a monthly basis since 2012, free of charge, because Matsumoto cannot afford repeat procedures. Berman liposuctions fat from her abdomen then processes it with a spinning centrifuge machine and a drug, before filtering it and infusing the mixture into an injection site in Matsumoto’s chest.

“Things were so vivid and bright literally 30 minutes after the stem cells were given to me,” Matsumoto says, recalling her first treatment. “I started crying on the way home.”

Such patient anecdotes are not considered reliable medical evidence. And because stem cell clinics have not published large, rigorous studies of their techniques, it’s virtually impossible to evaluate their record of success.

Berman calls his business model “patient-funded research,” and says he plans to soon publish the results of a 1,000-patient study demonstrating its safety. Cell Surgical has hired consultants to follow up with patients over the phone and survey how they are feeling.

But Leigh Turner, a professor of bioethics at the University of Minnesota, says charging patients to participate in medical research is bizarre and unethical. He calls the approach “unauthorized, for-profit human experimentation,” and has asked the Food and Drug Administration to investigate Berman, arguing that his business amounts to selling unapproved, experimental drugs.

Some practitioners point to early-stage laboratory and animal studies which have been published in scientific journals. But academics say such findings cannot be applied to humans and don’t provide critical information about potential side effects like infections, tumors and blood clots.

“This field, sadly, is contaminated by lots of poor-quality data that people are using to move forward and actually treat patients,” says Daley, of Harvard Medical School.

THE RISKS

The clinics insist that their treatments are safe, but routinely require that patients sign waivers.

Cell Surgical’s patients sign an informed consent form acknowledging that they are participating in an experimental study. The form states that there is no guarantee that the stem cell treatment will work, and lists potential risks. It also makes clear that patients are responsible for paying the full cost of the procedure, which is not covered by insurance.

Patients of Dr. Zannos Grekos, a cardiologist in Bonita Springs, Florida, who specialized in using stem cells to treat debilitating diseases, also were required to sign a consent form, acknowledging the procedures’ risks, including death.

But families of at least two of Grekos’ patients say he downplayed the risks. Gina Adams, daughter of patient Richard Poling, says her family was told her father would be “back on the golf course the next day” after a routine procedure he hoped would help him recover from a lung condition that made breathing difficult. The cost was $8,000.

The family was told that the stem cells would regenerate Poling’s lung cells.

In March 2012, Grekos harvested fat from Poling’s abdomen and sent it to an off-site processing facility to isolate the stem cells. Later that afternoon, he directed an assistant to infuse the resulting mixture into the patient’s bloodstream.

Poling suffered cardiac arrest and was pronounced dead after being rushed to a local hospital.

An investigation by the Florida Department of Health concluded the procedure had “no substantiated medical or scientific value.”

Two years earlier, in 2010, 69-year old Domenica Fitzgerald suffered a stroke after Grekos infused unfiltered bone marrow-derived stem cells into the arteries of her brain. The state report concluded “it was virtually inevitable that the procedure would clog blood vessels in the brain and cause a major and very possibly fatal stroke.” Fitzgerald suffered severe brain damage and was later removed from life support.

Jack Fitzgerald says his wife, who used a wheel chair, had hoped that stem cells might help her walk again in time for her grandson’s college graduation. She had previously suffered nerve damage as a side effect of chemotherapy used to treat breast cancer.

“When they’re desperate, people try things,” Fitzgerald says. “When you’re really ill you’ll say, ‘Let me give it a shot and see if it can help me.’”

After Domenica Fitzgerald’s death, the state ordered Grekos to stop using stem cells in his practice, but he did not. Not until 2013, after Poling’s death, did the Florida Medical Board unanimously vote to revoke the doctor’s license.

“It was proved overwhelmingly that the procedures he used did not meet the standard of care,” says Natalie Spindle, spokeswoman for the Department of Health.

Fitzgerald and his family brought a wrongful death lawsuit against Grekos, which was settled out of court for an undisclosed amount. The Poling family considered suing Grekos, but their lawyer advised that little money was left to recover.

Both families had hoped the Florida state attorney general would bring criminal charges against Grekos. But last May, state prosecutors declined to move forward with the case.

Though barred from practicing medicine in Florida, Grekos continues to treat patients in the Dominican Republican through his company Regenocyte, which promotes treatments for autism, dementia, cystic fibrosis and many other diseases.

He believes the two patients’ deaths were unrelated to his care — the state targeted him to discourage other doctors from working with stem cells, he says.

MURKY REGULATION

The regulators tasked with weeding out dangerous medical practices are the 50 state medical boards responsible for licensing and disciplining health professionals. But those groups have taken action against only a handful of stem cell doctors.

Last year, the Oregon Medical Board revoked the license of Dr. Kenneth Welker, a Eugene physician who performed at least five experimental stem cell procedures. In one case, a 62-year-old woman who received a spinal injection of stem cells experienced tingling, elevated blood pressure and rapid breathing, according to the board’s complaint. The group fined Welker $10,000 and revoked his license, citing “unprofessional or dishonorable conduct.”

State sanctions against stem cell doctors are rare because medical boards generally begin investigating practitioners only after patients have been harmed. That’s led many industry critics to conclude that regulation must come from the FDA, which regulates experimental drugs and medical products on a national level.

But the FDA’s authority to regulate stem cell procedures is not clearly defined and has been debated by legal experts for years. In that time, the agency has cracked down only on a handful of clinics, which industry observers say has emboldened stem cell entrepreneurs.

Lee Buckler, a stem cell consultant for drug and device makers, says many doctors “believe that there is no problem with what they’re doing because the FDA hasn’t knocked on their door.”

The key issue in FDA’s oversight of cell-based medicines turns on how much processing the stem cells undergo. According to FDA regulations, human cells that are more than “minimally manipulated” are subject to the same regulations as prescription drugs. But “minimal manipulation” is not clearly defined in FDA guidelines.

When the FDA has shut down stem cell clinics, it has usually been for growing stem cells in the laboratory for weeks at a time. In at least two cases, the FDA said that that approach exceeds the “minimal manipulation” threshold and could endanger patients due to potential contamination and infection.

But the FDA appeared less interested in policing the far more common practice of same-day stem cell procedures, in which cells are extracted and returned to patients in a few hours.

Now, the FDA appears to be stepping up its oversight. In the last days of 2014, it released draft guidelines dealing with these procedures. The agency said that processing fat into stem cells for medical use is more than “minimal manipulation,” essentially creating a new drug, which cannot be sold in the U.S. without the agency’s approval.

The guidelines have not been finalized — a process that can take years. And the agency said in a statement that it hopes doctors will use the proposed rules to essentially police themselves “and reduce the need for enforcement actions.”

The FDA declined to make officials available for an on-the-record interview for this story. But in a statement, it said it “takes violations of the regulations seriously and routinely follows up on entities producing products that potentially violate FDA regulations.”

Many stem cell doctors continue to argue that they don’t need FDA permission because they are not creating drugs, but performing in-office surgical procedures, which are not regulated by the agency.

But Alta Charo, a professor of law and bioethics at University of Wisconsin, says the FDA’s draft guidelines make clear that processed fat stem cells meet the same definition as prescription drugs. “You cannot sell that in the United States without it having been approved,” says Charo, who spent two years at the FDA as a policy adviser.

Getting a drug approved by the FDA requires extensive clinical testing. And if stem cell doctors followed the FDA’s requirements, they would not be able to begin testing their techniques on patients until completing a rigorous FDA application process, which can take years and cost millions of dollars. Patients would then be carefully tracked through large clinical trials, measured against a control group of patients receiving a sham treatment or a traditional therapy.

Academic researchers are slowly moving ahead with hundreds of their own, more traditional studies. Researchers at the University of Florida, Duke University and six other universities are studying fat-derived stem cells as a treatment for heart disease. The trial is sponsored by Cytori Therapeutics, a company that makes a fat-processing stem cell device.

Elsewhere, doctors at the Mayo Clinic in Minnesota are investigating stem cells for Lou Gehrig’s Disease. And Baylor College of Medicine in Texas plans to begin enrolling patients for a study using stem cells to treat erectile dysfunction.

In the meantime, doctors who perform stem cell procedures continue to practice what they see as transformative medicine.

For now, Berman says he has no plans to change his business because he is helping people.

“How is it unethical if you’re actually helping people, even if we don’t have evidence-based studies to prove it?” he says.

He adds: “If I’m breaking the law, how come I haven’t been arrested yet?”

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Clinical trials underway for chronic Achilles tendinosis

By: Tammey George

Being sidelined due to an injury puts a tremendous amount of pressure on an athlete or on a team to get them back in the game as quickly as possible. Returning too soon, before adequate healing or recovery has taken place, can put the athlete at risk for re-injury and possibly an even longer down time. If this injury turns into a chronic condition it can be career ending, as was the case for Major League Soccer (MLS) Vancouver Whitecap’s captain, Jay DeMerit.

For years, DeMerit struggled with Achilles tendinosis, and often played through his pain. His injuries took him out of play for most of the 2011 season. Looking for a solution, the Whitecaps brought in physiotherapist consultant Rick Celebrini hoping that his innovative methods would get DeMerit back on the field. His efforts paid off and DeMerit was able to play the entire 2012 season. As luck would have it, DeMerit tore his left Achilles tendon in 2013, missing six months of the major league soccer season. Finally, in July 2014, DeMerit was forced to announce his retirement after his Achilles tendon ruptured. Unfortunately, DeMerit isn’t the only athlete who’s been forced into retirement due to a chronic tendon injury.

RepliCel Life Sciences, a Vancouver-based company, is conducting a clinical trial at the University of British Columbia Hospital to address chronic Achilles tendinosis. RepliCel’s cell-based treatment could be a game-changer in sports medicine, offering athletes a way to permanently repair their tendon injury by introducing new collagen producing cells into the degenerated tendon to kick-start the stalled healing process.

When an athlete has chronic tendinosis, it has generally been caused by repetitive injuries and incomplete healing cycles which leads to a degenerative breakdown of the collagen tissue within a tendon causing pain, dysfunction and often rupture.

RepliCel’s technology utilizes a rich source of fibroblast cells isolated from the patient’s own hair follicle. These cells, known as non-bulbar dermal sheath (NBDS) cells, are prolific in their expression of type 1 collagen which is the key to creating a complete healing cycle within the damaged and degenerated tendon. These injected cells are able to accomplish what the resident fibroblasts are no longer able to do – regenerate tendon.

RepliCel’s Phase 1/2 clinical trial will enroll 28 patients who have all failed traditional tendon therapy and who are otherwise in good health. NBDS cells will be isolated from a small punch biopsy taken from the back of the patient’s scalp. These cells will be replicated and then reintroduced into the damaged areas within the tendon via ultrasound guided imaging. After injections are performed, patients will undergo regular physiotherapy and will return to the clinic for assessments of safety, function and pain, as well as changes in tendon thickness, echotexture, interstitial tears and neovascularity. Measurements will be made at 1, 2, 4 and 6 months. Based on data from previous clinical studies, it is anticipated this treatment will restore a responding patient’s chronic tendinosis to a completely healed state. To learn more about this trial, and to determine possible candidacy, one may visit www.tendonstudy.com. Further indications being explored by RepliCel will include Patellar and lateral elbow tendinosis.

RepliCel is building a diverse portfolio of patented products within the field of autologous cell therapy. This includes RCT-01, a treatment of chronic tendinosis, RCS-01, a treatment for UV-damaged and aged skin, RCH-01, a treatment for pattern baldness, and RCI-02, a proprietary injector device used for a variety of dermatological applications.

All of RepliCel’s products leverage the unique biological function of hair follicle cells.

For more information, or to set-up an interview, please contact Tammey George, Media Relations

T: (604) 248-8696 / E: tg@replicel.com

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Regenerative Medicine Promises New Cure for Chronic Tendon Injuries

By Dr. Jack Taunton

A Regerative Cell therapy is now being tested on people suffering from chronic Achilles tendinosis at the Sport Medicine Clinic at the University of British Columbia. ________________________________________________________________________

Clinical researchers are testing a treatment developed by RepliCel Life Sciences called RCT-01 which is manufactured personally for each patient using specialized cells isolated from their own hair follicles. Several weeks after the collection of a single-suture biopsy taken from the back of the patient’s scalp, the product, a suspension of their own cells, is injected, under ultrasound guidance, into the injured tendon to promote its repair, Capturerestore function and eliminate pain.

It is exciting that following nearly 20 years of tendinopathy research, the medical community, at last, may have an answer for patients with chronic tendinopathy which current treatments simply cannot address.

Achilles tendinosis is a painful overuse injury that affects the lower leg. Often caused by a cycle of injury, improper healing and re-injury, chronic tendinosis is an accumulation of micro-tears which leads to structural degeneration of the tendon associated with weakness, loss of function, chronic pain and susceptibility to re-tearing and further injury.

Physiotherapy and dextrose injections are the most common treatments, but often don’t heal all the micro-tears. Up to 30 per cent of patients don’t satisfactorily improve despite following the prescribed protocols.

This is where the injection under ultrasound guidance comes into play. RCT-01 is a cell therapy product made from fibroblast cells that express high levels of Type 1 collagen – the key and missing ingredient needed to permanently heal the micro-tears and fully repair the tendon. In an injured tendon, these fibroblasts (or tenocytes as they are called when resident in a tendon) are simply exhausted and incapable of the Type 1 collagen production needed, or lay down the weak Type 3 collagen highly susceptible to re-tearing. RCT-01 is an ultrasound guided injection of fresh fibroblasts highly expressive of the Type 1 collagen needed to permanently repair the tendon and return the patient to full function.

RepliCel plans to expand clinical testing of its product to other areas of tendinosis (e.g., knee, elbow, etc.) as well as investigating both the treatment’s long-term durability and its potential to treat the more acute and inflammatory tendinitis, which often precedes the chronic condition.

To learn more, visit www.tendonstudy.com
Find the full article in Impact Magazine on Pg. 78.

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University studying the injection of cultivated cells from one’s own body to speed the healing process

By Tony Gallagher, The Province May 9, 2015

Gallagher: UBC achilles research could be key to revolutionary treatment

Rob Lloyd-Smith is one of the principal investigators into a UBC Sports Medicine study into achilles tendon repair. Photograph by: Jenelle Schneider , PRV

If you have a sore, stiff Achilles tendon, and have been through at least three months of physiotherapy which has maybe helped a little but topped out, and you have not had surgery on that area, you have a chance to help both yourself and millions of people around the world.

And if these proposed UBC clinical trials work as quickly as many involved in the research think they might, you may also be helping the likes of Dan Hamhuis and Kevin Bieksa and many other athletes who have experienced abdominal wall-groin issues, to say nothing of the many other areas of application.

The outstanding doctors at UBC Sports Medicine are looking for 28 men and women with just such an ailment situation to participate in clinical trials for a new study which has the potential to help patients with all kinds of injuries — groin, knee and tennis elbow, just to name a few. Twenty-one will be given real injections and seven will be in a control group, but after the research is unblinded, those control-group patients will have the option to get the injections because their cells will already have been harvested. But let’s explain this fairly expensive study being funded by RepliCel.

Dr. Ross Davidson, the former Canucks orthopedic surgeon for 20 years, and Dr. Jack Taunton, the former chairman of the Allan McGavin UBC Sports Medicine Clinic, are the advisers on a study which will take the patient’s own cells, culture them to allow them to multiply and then inject them into the injured area, using ultrasound to pinpoint the exact locations for said injections, with the intent of stimulating cell growth and healing in the area.

Principal investigators Dr. Don McKenzie and Dr. Rob Lloyd-Smith will take a biopsy of several hair follicles from the back of the scalp and send the biopsies to Austria, where the fibroblasts will be isolated and then cultured over a four- to six-week period to several million cells. They will then be frozen and sent back to UBC and injected under ultrasound guidance into the damaged area of the tendon, to kick-start the healing process and the formation of type 1 collagen so essential for the healing process.

The fact that fibroblasts from the linings of hair follicles produce up to eight times more type 1 collagen than fibroblasts from other cells was originally discovered by dermatologists looking to stimulate hair growth. And the UBC Sports Centre guys were contacted to see what they could do with such a find, given they had already been doing groundbreaking work in fibroblast growth.

“Fibroblasts form the lining of the tube that the hair fibre grows out of,” said Davidson. “And so what was happening was they were getting mixed in with the hair follicles in their cultures and those guys noticed these fibroblasts were also growing in that culture and they asked: ‘What’s different about these cells?’ And by doing some tests they found out these fibroblasts produced all this type 1 collagen and that’s the spinoff. That’s how this all got started.”

The UBC guys had been stimulating fibroblasts and doing dextrose as well as platelet-rich plasma injections for years, and that’s why they’re at the centre of this exciting new research.

The study is going to look at injecting these fibroblasts into a diseased Achilles where tendinosis has occurred and these micro-tears (which cause the damage) have been formed and where the healing process has run out of oomph. The cells will be injected in a patterned way (using ultrasound as a guide) to get to the right places and therefore stimulate continued healing.

“We’re starting small because immediately when you say you’re using cells, the alarm bells go off and you have to go through all kinds of regulatory approval,” said Taunton. “We’ve contacted all the necessary people and received the approval of all the appropriate bodies and we’re ready to go.”

It should be mentioned these are not stem cells but rather cellular-based regeneration. The cells have differentiated into fibroblasts and so are one step removed from stem cells and the attendant controversies.

Needless to say, if this is successful it opens up a whole new world of injury recovery applicable to all manner of athlete, to say nothing of the person on the street. To give you an example of how, take the knee sprain suffered by Ryan Miller in the later stages of this season. If he had been through this process whereby at the outset of the season he had his cells harvested and fibroblasts grown and then frozen until he needed them, those cells could have been injected into his knee after the injury and the expectation is that it would significantly shorten the time needed for full recovery. For instance, Hamhuis’s cells could be injected precisely into the groin area that needs help the most, using the same ultrasound techniques to target the right areas, thereby increasing the likelihood that increased healing would be kick-started, again improving his overall condition in the area. For all future injuries of anyone else, the cells could be immediately injected, thus speeding and increasing the entire healing process. It will be open season on all tendon injuries — and not just for athletes, for everyone.

“That’s why WorkSafe (B.C.) is and has been so interested and supportive of our work, because we have all kinds of people who are laid up by these injuries,” said Taunton. “They can’t work, their lives are significantly impacted. It has the potential to help a tremendous number of people.”

So if you fit the criteria or think you might and want to help, give UBC sports medicine a call at (604) 822-3614.

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By: Gaalen Engen
First here’s a little biotech. RepliCel Life Sciences (TSX: V.RP, Stock Forum) has been a little favourite of mine for the past while as the company looks to revolutionize the hair loss treatment market with a potentially permanent solution involving a minimally invasive process that cultivates important healthy hair follicle cells, known as dermal sheath cup cells, from a small sample taken from the patient.These cells can be reinserted into affected areas of compatible patients and stimulate the growth of hair with a possibly permanent solution not known to creams, involving the patient’s own hair unlike weaves and toupees, and in a minimally invasive manner unlike painfully prolonged and extremely limited procedures like hair transplants.

There’s more to hair loss treatment for this company even though the sector currently brought in $590 million in annual revenues at the end of 2014 in the U.S. alone. RepliCel has other innovative solutions for both rejuvenation of aging and sun-damaged skin as well as a ground-breaking treatment for chronic tendinosis, each utilizing something called NBDS fibroblast therapy.

Wait, that’s not it, the company has also developed an industry-leading patented dermal injector that can be used for a variety of procedures beyond the aforementioned treatments.

Okay, the company’s still bringing all of this to market, but it has made significant headway and has an active slate for both 2015 and 2016, that is expected to see the completion of some late stage clinical trials and the market-readiness of their dermal injector device. To this end, the company has been garnering attention from not just me, but industry analysts. In fact, just recently Euro Pacific Canada analyst, Douglas Loe, initiated coverage of his own volition giving the company a speculative BUY rating with a $1.50 target price. Click here if you want to read the particulars.

There’s still work to be done, but the company has its collective nose to the grindstone and stands to capitalize on some fairly substantial markets. If all the pieces can be put into place over the next three years, RepliCel, could be a long-term investment winner.
Read the full article at Stockhouse.

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By Gail Dutton, Contributing Editor
Follow Me On Twitter @GailLdutton

New regulations accelerating the approval of regenerative therapeutics in Japan took effect Nov. 25, 2014, propelling that nation onto the radar screens of life sciences companies around the world. The chief benefit of these new rules is that they enable companies to receive conditional marketing approval and generate revenue from regenerative products while trials are being conducted.

“A lot of people here (in the U.S.) don’t know about it,” says Gil Van Bokkelen, Ph.D., CEO and chairman of Athersys and ex officio chair of the Alliance for Regenerative Medicine. “As more visibility and tangible progress is generated, I think it will create a lot of additional interest and excitement.”

The acceleration of regenerative medicine development and commercialization is part of the economic revitalization plan – “Abenomics” – launched by Prime Minister Shinzō Abe in 2012. That plan also includes ¥110 ($1 billion) in funding for stem cell research.

“Regenerative medicine is a huge issue for Japan. Half the population is over age 50, but regenerative medicines have been limited because of the difficulty getting through Japan’s Pharmaceuticals and Medical Devices Agency (PMDA),” notes David Hall, CEO, RepliCel.

For example, Karine Kleinhaus, M.D., MPH, divisional VP for North America at Pluristem Therapeutics, explains, as of May 2014, there were only two approved allogenic cell therapy products and fewer than 15 clinical trials. “Japan’s goal is to increase the number of approved cell therapy products, expand targeted indications, and extend its capabilities from manufacturing to bedside. Partnering interest from Japanese pharmaceutical companies is strong.”

TWO NEW REGENERATIVE MEDICINE LAWS
Japan’s new regenerative medicine legislation is actually two separate laws. Law No. 84/2013 amends the Pharmaceutical Affairs Act, renamed the Pharmaceutical and Medical Device (PMD) Act, and pertains to the commercial development of regenerative therapeutics. Law 85/2013, the Safety of Regenerative Medicine Act, deals with clinical and physician-led research.

The PMD Act defines regenerative medicine as cultured or processed human or animal cells, or transgenic cells, used to reconstruct, repair, or form structures or functions in the human body, or to treat or prevent human diseases.

Gene therapies also are covered by that act, providing they are at least equivalent to cellular and tissue-based products and meet either the FDA definition of gene therapy or the EU definition of advanced-therapy medicinal products.

This law speeds therapeutics to market by allowing conditional marketing authorization. For example, Hall says, “A 20-person trial that shows safety and is predictive of efficacy is sufficient to get conditional approval for seven years, without needing placebo trials. Efficacy will be determined by the market. The new regulations dramatically change the pathway toward revenue.”

During the seven-year conditional approval period, companies are expected to continue filing data. By the end of that period, they must either apply for final marketing approval (the equivalent of a BLA [Biologic License Application]) or withdraw the product.

The companion law, the Safety of Regenerative Medicine Act, governs clinical and physician-sponsored research. It allows cells to be processed outside hospitals for safer and faster manufacturing. Oversight is provided through tier-based, risk-dependent analysis, and through accreditation of cell-processing centers.

JAPANESE TRIALS NICE BUT NOT NECESSARY
“Our understanding of the PMD Act is that the PMDA is looking for more than just a Phase 1-type analysis. It would like to see a record of safety and some meaningful evidence of therapeutic benefit,” Van Bokkelen says.

In effect, that means “The option of going to market is after a solid Phase 2 trial,” Kleinhaus concludes. “Meanwhile, post-commercialization and observational studies must be conducted.”

“We are likely to see a meaningful increase in clinical trial activity in Japan as a result of this new framework,” Van Bokkelen says. Although the regulations don’t specify that trials must be conducted in Japan, the PMDA is clearly guiding sponsors toward running a clinical trial in Japan.

“Policymakers in Japan realized regenerative medicine has tremendous potential to address serious areas of unmet medical need that impact their national healthcare system,” Van Bokkelen says. “By encouraging clinical development, they simultaneously are promoting innovation, the creation of more effective healthcare solutions, and economic development.”

WESTERN COMPANIES IN JAPAN
A handful of companies have ventures underway in Japan, including Athersys, RepliCel, Pluristem, and Mesoblast.

The new regulations already have affected Athersys in a major way. In March, the company announced a partnership with Japan’s Chugai Pharmaceuticals to develop MultiStem to treat ischemic stroke patients in Japan. That deal’s potential value exceeds $200 million even before double-digit royalties and payments for manufactured products are added. “That deal might not have happened without Japan’s greater emphasis on regenerative medicine,” Van Bokkelen says.

Athersys began laying the groundwork for this deal soon after the bills passed the Diet (Japan’s bicameral legislature), working with Japan’s PMDA to prepare to initiate clinical trials. “That’s a real priority for us,” Van Bokkelen says. Now Athersys is reviewing clinical trial results with Chugai and the PMDA while continuing to pursue other clinical programs.

RepliCel and its Japanese partner Shishedo already have trials underway for RCH-01, a therapy to reverse pattern baldness in men and women. A year ago, Shishedo opened a cell manufacturing facility dedicated to R&D and the commercialization of RCH-01.

Hall says he envisions a straightforward path to commercialization in Japan because, “We’re not using embryonic stem cells or conducting induced pluripotent stem cell therapy. We’re addressing a deficit of fibroblasts or dermal cup cells.” Cells are removed from the back of the scalp, isolated, replicated into the millions, and injected where needed, causing new hair follicles to grow.

“We can get more data faster in Japan, and then can license them [these products] in the West,” Hall says. “Therefore, it’s very attractive to go there.”

Israel-based Pluristem also plans to enter the Japanese market with its placenta-based cell therapy PLacental eXpanded, or PLX. “We’re hoping to announce a partnership with a Japanese pharmaceutical company this year and begin trials,” Kleinhaus says.

“In Japan, we’re targeting peripheral artery disease and critical limb ischemia. We conducted two Phase 1 trials in the U.S. and Germany, and we want to build on that for a Phase 2 or 2/3 in Japan. This could shave two to three years off time to market,” Kleinhaus says. Importantly, she adds, “They’re not expecting us to start from the beginning. We expect that Japan will accept cells manufactured outside the country for use in clinical studies conducted in Japan. We can scale up to produce 150,000 doses in our facility in Israel.”

Mesoblast is reinvigorating its relationship with Japan’s JCR Pharmaceuticals Co., Ltd. since the new regulations were passed. Last October, JCR filed a marketing approval application for Mesoblast’s adult stem cell portfolio Prochymal (which Mesoblast acquired from Osiris Therapeutics). That therapeutic targets pediatric graft versus host disease (GvHD).

Also last fall, Mesoblast prioritized its lead candidates in Phase 2 trials for the Japanese market and is working with consultants in Japan as well as the PDMA to advance development and commercialization. The company is talking with potential Japanese partners.

“Partnering interest from Japanese pharmaceutical companies is strong.”

KARINE KLEINHAUS, M.D., MPH
divisional VP for North America at Pluristem Therapeutics

Japan’s new regulations regarding regenerative medicine are positive for the entire sector, so other companies are likely to explore their options in Japan, too. As Van Bokkelen says, “This will cause some companies to consider running trials in Japan or running truly international studies that include Japanese sites. It also creates the potential for a more efficient, less expensive path to market. That’s something all investors should really like.”

SIMILAR U.S. PROVISIONS IN THE WORKS
Improvements in the U.S. regulatory system have included some provisions that are similar to those of the Japanese regulations. The Prescription Drug User Fee Act (PDUFA-V), for example, includes a new “breakthrough therapies” designation and broadens the potential application of the accelerated approval pathways.

Congress also is considering the 21st Century Cures Initiative. By taking a comprehensive look at the entire drug development process from discovery through development, commercialization, and delivery, Congress intends to find ways to streamline the process and bring life sciences products to market faster than is possible now.

“This is at the discussion draft stage and has bipartisan support,” Van Bokkelen says. “I’m optimistic it will advance and will contain some important provisions to accomplish some of the same objectives as the Japanese legislation.”

While U.S. efforts remain in discussions, Japan’s efforts are in effect now. By granting conditional approval, Japan delivers a path to reimbursement while trials are underway, demonstrating a commitment to bringing advanced regenerative medicine to its populace and to enhancing its standing as a destination that actively supports biotech innovation.

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Source: George S. Mack of The Life Sciences Report (4/23/15)

There’s a new kind of incubator in town. The Centre for Commercialization of Regenerative Medicine (CCRM) is a Canadian nonprofit that fosters hands-on association between academia, government, industry and investors to grow stem cell and regenerative medicine companies from the ground up. In this interview with The Life Sciences Report, CCRM President and CEO Michael May guides us through the process that brings ideas out of academia and adds the essential nurturing elements to get startups off the ground and into commercial development. Along the way, he mentions a few names that may interest investors.

The Life Sciences Report: You are the president and CEO of Centre for Commercialization of Regenerative Medicine (CCRM), a Canadian not-for-profit organization supporting development of technologies that will hopefully hasten the journey of stem cell and related therapeutics through regulatory pathways and to the market. How does it work?

Michael May: CCRM was founded through a unique government program called the Networks of Centres of Excellence. It was built around the concept of creating the right kind of ecosystem and network to drive commercialization. The government of Canada invests in three types of networks: academic; commercialization, which is where CCRM fits in; and what is called business-led networks—consortia of established companies that work together in an open innovation model.

“RepliCel Life Sciences Inc. has a diversified portfolio of technologies, is very focused and is growing rapidly.“

CCRM actually followed on an academic network that was around for 14 years. That network had built a very strong culture of collaboration among the stem cell and regenerative medicine scientists in Canada, and prepared them to commercialize their technologies. CCRM was established to integrate elements over and above the discovery phase—access to industry, company creation and access to investors. And now CCRM has built an industry consortium of more than 40 companies from around the world. You could almost envision CCRM spinning off a business-led network one day to take full advantage of the government’s strategy for building the right kind of ecosystem for commercialization.

TLSR: Does CCRM recruit innovators to Canada?

MM: Our model is to build a global network and to be a not-for-profit, neutral, safe place to bring together the right resources, elements and leaders, including innovators, to drive technologies forward. We, of course, need to look at a benefit for Canada, but we don’t see a benefit to Canada as being mutually exclusive from the benefit to any investor or innovator or stakeholder around the world.

TLSR: How does CCRM differ from other industry advocacy organizations—for instance, from the Alliance for Regenerative Medicine (ARM), which was formed in the U.S. in 2009. I recently spoke with ARM Chairman Edward Lanphier about ARM. Are you familiar with that organization?

MM: Indeed I am. I’m on the executive committee for ARM.

CCRM is not just an advocacy group. It’s actually built around tangible facilities and infrastructure that can drive not only technology development for out-licensing to our industry partners, but can also enable company creation in a very different way than has been done here in the past.

“If we can get companies over early hurdles with unique resources, we can demonstrate accelerated commercialization.”

We have a tie-in to a network of academics and in-house facilities that develop technologies the way a startup company would. With our founding academic network of Canadian institutions and scientists, we have access to global innovators. We have been able to negotiate access to their intellectual property (IP). When we find IP, and after doing due diligence on it and bundling it with other IP, we can bring that technology into our own facility, where we have a staff of 35 people, including about 20 scientists, who can conduct wet diligence and product development. We fill a gap—we are doing work that academics typically don’t like to do or don’t always do very well. By bringing together all these capabilities, along with some specialized platforms, like cellular reprogramming, gene editing, cell manufacturing and biomaterial synthesis, we can complement what a standard academic network would bring to the table.

We are also driven by a government mandate to be sustainable, so when we invest in promising technologies or bundles of technologies, we expect to take some equity, or some position, in those opportunities. That way, over time, we can grow and sustain an industry around our network.

TLSR: Regenerative medicine appears to have been left behind in terms of development, compared to other biotechnologies. Why do you think these powerful breakthrough technologies have languished on the lab bench?

MM: The bottom line is that regenerative medicine is complicated. It’s an expensive process to take on from start to finish.

Our model at CCRM is built around a couple of assumptions. One is that you have to do more with less these days, and so you need capital efficiency, especially at the very early stages, where investors really have abandoned projects. Although today they say there’s a lot of investment in early-stage development, that typically means venture capitalists providing follow-on investment to their current companies. New startups are still having trouble getting financed. Regenerative medicine is also a new industry, so I think this “left-behind” feeling is symptomatic of that fact.

TLSR: You just used an important term: capital efficiency. How do you get around, or solve, this problem of doing more with less?

MM: I think it can be solved through collaborative vehicles. CCRM started with an academic network that was building collaboration and getting access to IP. We then leveraged the reputation of our academic network to attract industry. Then, of course, industry brought its ever-important validation and marketing savvy to the table, which represents expertise that is largely absent in the academic environment.

“Canada is very clear about its willingness to be both a cost-and time-effective regulator of these new therapies.”

After three years of operation, with significant deal flow and two networks in place, CCRM is now at a stage where it’s building the third key element of its model: an investor network. The system was primed with a very modest amount of money, but now we want to fuel our model with risk capital. Global networks, access to deal flow, sufficient funding and coordination of specialized infrastructure/expertise are all key elements of CCRM’s model for filling the gap between discovery and the market.

Investors are looking for good investments. If we can get companies over some of the early hurdles with unique resources, I think we will demonstrate accelerated commercialization.

TLSR: Michael, is it hard to get investors to invest in science projects? They really need to see the path to commercialization, don’t they?

MM: Absolutely. Financiers don’t like to take scientific risks. They are more comfortable with commercial risk. Despite what people think, scientists are also risk takers, but they don’t like to take financial risk. The role of an entrepreneur is to sit in the middle and manage everyone’s comfort or discomfort with different risks. That’s an important role for an organization like CCRM and the entrepreneurs that it brings to bear.

TLSR: You have said that Japan and Canada would lead the way in regenerative medicine. Does that imply that the U.S. has lagged?

MM: I would never discount the ability of the U.S. to muster resources and drive innovation in any field. There are strengths in regenerative medicine across the U.S., but regenerative medicine has a unique status in Canada. Stem cells were actually discovered in Canada prior to the bone marrow transplants of the 1960s. Of course, Japan’s Shinya Yamanaka received the 2012 Nobel Prize in Physiology or Medicine for discovering that mature cells could be reprogrammed to become “pluripotent.” There is a nationalistic element to regenerative medicine in both Canada and Japan. That’s one difference.

Japan has taken it one step further. It has taken a novel approach in its regulatory policy by acknowledging that cell-based products may require a different regulatory pathway than drugs or devices. In November 2013, the Japanese Diet (parliament) approved new legislation, the Regenerative Medicine Law, to provide for conditional approvals of cell-based products that demonstrate very strong safety data. These products can go to the market and be sold. Once enough patients have been treated to demonstrate proof of efficacy, then they get full approval. This is a very different model. In fact, if you think about it, if a company can sell its product after Phase 2 development with proof of safety, it changes the return on investment (ROI) model entirely for early-stage programs.

“I would never discount the ability of the U.S. to muster resources and drive innovation.”

Canada has been the first to approve regenerative medicine products. It was the first country to approve the early skin substitutes from Organogenesis (private) and Advanced Tissue Sciences (Chapter 11 liquidation under bankruptcy in March 2009). Canada was also the first to approve Osiris Therapeutics Inc.’s (OSIR:NASDAQ) (OSIR:NASDAQ) Prochymal (remestemcel-L). Where Canada needs to be innovative now is with reimbursement. None of those products has been reimbursed in Canada.

TLSR: Is CCRM working with regulators on reimbursement?

MM: Yes, it’s one of the areas of focus for CCRM. Who is going to pay for a therapy is typically the last question people ask in the development process. We are working with government agencies in Canada so that the reimbursement issue gets addressed early in development. That would put Japan and Canada at the leading edge of innovation in the commercialization of these products.

TLSR: You have referenced Japan’s new regulatory legislation. Does Canada propose to do anything like that, so that companies could effectively get a drug on the market with strong Phase 2 safety data?

MM: Canada is not proposing legislation like that—at least that I’m aware of. What the Canadian regulatory authority, Health Canada, has demonstrated in the past is that it will approve cell-based products on a conditional basis, just like Japan. Health Canada is focusing more on risk/benefit, and is therefore flexible. It has also demonstrated that it will approve cell-based products much faster than other jurisdictions. So although Canada doesn’t appear to be going down the same regulatory route as Japan in creating a formal Phase 2 approval policy, it is being very clear about its willingness to be open-minded and to be both a cost-and time-effective regulator of these new therapies.

TLSR: Risk/benefit implies efficacy, not just safety.

MM: It does. It also implies that if patients have no other option, then having an experimental therapy available quickly fits into the risk/benefit equation. That’s part of the flexibility embedded in the Canadian system. About six months ago Health Canada produced a guidance document for cell-based clinical trials to try to provide not only flexibility in its regulation but also some clarity on what it’s expecting in terms of clinical data.

TLSR: Tell me about some of the interesting companies developing regenerative medicine technologies in Canada?

MM: One of our leading company creations (private) concerns the expansion of hematopoietic stem cells from cord blood. Getting the levels of stem cells to treat leukemias in adults, versus children, has been a clinical development goal for some time. We have brought together a couple of technologies from different institutions, along with some bioreactor technology from one of our industry consortium partners, to deliver best-in-class hematopoietic stem cell expansion, gene therapy and potentially the ability to produce mature blood products.

“There is a nationalistic element to regenerative medicine in both Canada and Japan.”

Another area where Canadian researchers have been leading is in cancer stem cells and the thesis that cancer is actually driven by a stem cell that’s gone awry. If you can find and target that cancer stem cell, you can target the cancer. One of the companies that CCRM has funded in the past year is Actium Research (private), which is raising money now. Its technology is based on the work of Dr. Mick Bhatia, a senior scientist at McMaster University in Hamilton, Ontario. Actium has created a unique platform to screen molecules that will attack cancer stem cells as opposed to normal stem cells.

TLSR: Is Actium’s technology about identifying cell membrane antigens that might be exclusive to a cancer stem cell?

MM: That could be part of it. The company is identifying ways to attack a cancer stem cell versus a normal cell. For instance, if you can push a stem cell to differentiate, you can kill it with standard treatments. Because a stem cell is in a pluripotent state, it’s more resistant to drug therapy. There are a number of different mechanisms there, but Actium is a good example of a very young Canadian company that is focused on the country’s strength in stem cell research.

TLSR: What about another name? Do you have a public name or two that investors could access?

MM: Yes. RepliCel Life Sciences Inc. (RP:TSX.V; REPCF:OTCQB) is focused on cell therapy for orthopedic and hair restoration applications. It too is a Canadian company, and it has been aggressively developing ties to Japan, in association with its partnership with Shiseido Company Ltd. (4911:TSE), around transplanting cells for hair growth. The company has a diversified portfolio of technologies, is very focused and is growing rapidly as a public company.

TLSR: Many cell therapy companies have not participated in this tremendous biotech bull market of the past few years. RepliCel’s stock has done quite well over the past 12 weeks, while most cell therapy companies have not. Do you have a thought on why that might be?

MM: I think, in part, that comes down to the leadership of the company and its understanding of what it takes to not only advance a technology, but to also tell its story. RepliCel has made some key hires in the last year to augment and strengthen its offering. The company has experienced management, and we all know that’s a key piece of the puzzle in moving these companies forward.

TLSR: Is there another public company you might mention?

MM: Canadian company Sernova Corp. (SVA:TSX.V) is an interesting name. It has developed a unique vascularized pouch for cells, and it is working in the same area as San Diego-based ViaCyte Inc. (private) in the U.S., which has been funded by the California Institute for Regenerative Medicine. Sernova is working with Dr. James Shapiro, at the University of Alberta in Edmonton, around transplanting islets, or islet-like cells, to treat diabetes. Sernova is focused on the device to transplant those cells.

TLSR: Thanks for your insights, Michael.

Michael May is president and chief executive officer of the Centre for the Commercialization of Regenerative Medicine (CCRM). Prior to CCRM, he was president, chief operating officer and cofounder of Rimon Therapeutics Ltd., a Toronto-based regenerative medicine company developing novel medical polymers that possess druglike activity. May completed his Ph.D. in chemical engineering at the University of Toronto in 1998 as a NSERC (Natural Sciences and Engineering Research Council of Canada) Scholar, and was awarded the Martin Walmsley Fellowship for Technological Entrepreneurship. May sits on a number of boards and advisory committees, including MaRS Innovation, the Alliance for Regenerative Medicine, 20/20 Vision and the Department of Chemical Engineering and Applied Chemistry at the University of Toronto.

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RepliCel Targets Low-Risk, Near-Term Opportunities in Regenerative Medicine

By: Gail Dutton

The regenerative medicine company RepliCel Life Sciences is developing potential cures for chronic tendinosis, damaged or aging skin, and pattern baldness by reseeding affected areas with specific cell populations isolated from patients’ own healthy hair follicles.

RepliCel is picking the low-hanging fruit of regenerative medicine—low technological risk, underserved markets, clear clinical indications. Furthermore, commercial success is not dependent on successful reimbursement negotiations.

“On the technical level, we’re not asking these cells to do anything other than what they naturally do, or be anything more than they are,” CEO David Hall says. “These are adult, somatic cells derived from the patient which we simply isolate and grow. We’re not differentiating, genetically modifying, or manipulating these cells in any way.

At present, there is no therapy to treat the underlying causes of tendinosis, which include a deficit of collagen-producing tenocytes (fibroblasts). RepliCel’s approach to the treatment of tendinosis uses injections of cultured autologous, collagen-producing, nonbulbar dermal sheath cells into the injury site to stimulate tendon regeneration

From the scientific and manufacturing perspective, RepliCel is using the hair follicle as the cell source because the cells are simple to collect, grow well in culture, and are both relatively naive and highly functional. On a clinical level, the company is simply addressing a deficit of active cells in the patient by local delivery of cells shown to function in ways needed to solve a human condition such as tendinosis or pattern baldness.

“The cells are injected in ways and places that largely eliminate any concerns around in vivo cell migration,” explains Hall. “[This approach ensures] enough cells stay in situ and viable to affect a sustained effect.”

Indications

For tendinosis—a disrupted healing cycle of the tendon—nonbulbar dermal sheath (NBDS) fibroblast cells are isolated from a biopsy of hair follicles taken from the back of the scalp. After these cells are replicated, creating populations of millions of cells, they are injected into the wound site to jump-start the disrupted wound repair.

In early-stage trials, clinical advisory board member David Connell, M.D., used a similar approach with tendinosis patients who had been failed by other therapies. The NBDS approach returned these patients to painless, near-normal function.

In the next 18 months, Hall says he expects to conclude a Phase I/II study at the University of British Columbia involving 28 participants. As yet, there is no approved therapy that treats the underlying cause of this chronic condition.

This same NBDS platform technology also may be used to repair damaged and aging skin. RepliCel filed a clinical trial application for Germany in February.

Phase II trials to treat baldness—specifically, androgenetic alopecia—will begin this year. For this therapy, dermal sheath cup (DSC) cells are isolated from the base of the hair follicle, replicated into the millions, and injected to the area of thinning hair.

“DSC cells are responsible for maintaining the number of dermal papillae cells, which directly corresponds to the hair thickness,” Hall explains. “We are simply delivering a volume of androgen-insensitive DSC cells into an area where androgen-sensitive DSC cells have disappeared … to restore the normal hair follicle cycle.”

RepliCel’s autologous cell therapy utilizes dermal sheath cup (DSC) cells to treat androgenetic alopecia. DSC cells are responsible for the regulation of the volume of dermal papillae (DP) cells, which are responsible for the thickness and growth of a hair fiber. Another RepliCel technology uses nonbulbar dermal sheath (NBDS) fibroblast cells to treat tendinosis.

In animal studies, this approach grew hair on the feet of mice (which have no hair follicles there). When these cells were injected into their ears, the healthy cells migrated into resident hair follicles, making that hair thicker.

In humans, this approach could address existing hair follicle damage. “This is our longer-term program,” Hall stresses. RepliCel will begin a clinical trial in Germany this year involving 160 patients. Hall says results from RepliCel’s Phase I and Phase II clinical trials for chronic tendinosis and UV-damaged/aged skin are expected in 2016.

Manufacturing and Delivery

RepliCel currently uses industry-standard fetal calf serum in its manufacturing process, but is validating a serum-free process. “This is a distinguishing commercial step,” Hall asserts. “[It] adds value to our therapeutics program.” Hall notes that RepliCel anticipates licensing the process.

RepliCel is also investigating the potential of using its cells in an allogeneic setting. Hall says that a successful licensing effort could enhance both the business model and the value of company assets.
RepliCel also is developing a dermal injector to ensure controlled, consistent delivery of the cells to the skin and scalp. RepliCel expects that this device will control cell volume and delivery depth while minimizing shear force to the cells.

“We have also incorporated a Pelletier element into the tip, which reduces or removes the need for pre-injection anesthetics,” Hall informs. This second-generation injector is available for licensure. RepliCel plans to file for the CE mark in the latter half of 2015.

Partnerships

RepliCel already has a partnership with Shiseido in Japan to co-develop and commercialize RepliCel’s RCH-01 technology as a therapy for thinning hair in China, South Korea, and the ASEAN nations. RepliCel is actively pursuing similar geographically focused licensing and co-development partnerships for its other products.

It also is commercially active in Japan, where recent changes to Japanese regulations for regenerative medicine “have dramatically changed the pathway toward revenue generation,” Hall remarks. Those changes allow products that have demonstrated safety and potential efficacy in early-stage trials to gain conditional marketing approval. That lets them be sold and reimbursed up to seven years before being subjected to a final marketing approval review.

“In the current Japanese environment, we can generate data while simultaneously generating revenue and continuing to develop the same technology in the West,” Hall confides. He suggests that as a result of these regulatory changes, Japan will become important as a test bed for regenerative medicine.

RepliCel’s business model seems well-suited to Japan’s new regulatory stance for regenerative medicine. “We’re built to discover, validate, and license,” Hall states. “Commercialization is done with partners.”

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The information in these press releases is historical in nature, has not been updated, and is current only to the date indicated in the particular press release. This information may no longer be accurate and therefore you should not rely on the information contained in these press releases. To the extent permitted by law, RepliCel Life Sciences Inc. and its employees, agents and consultants exclude all liability for any loss or damage arising from the use of, or reliance on, any such information, whether or not caused by any negligent act or omission.

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