Stem Cells: A Promise Deferred?

Tucked away in a tiny room at last summer's BIO convention, adjacent to a big top vendor circus that would make even P.T. Barnum jealous, a handful of stem cell company executives convened for a panel titled "Stem Cell Therapies...Fact or Fiction?" The meeting was sparsely attended. After trotting out some compelling statistics in support of their chosen field—that stem cell research spending in 2011 was $1.2 billion; that, as of June 2012, 4,067 clinical trials involving stem cells were ongoing worldwide; and that stem cell products will earn upwards of $21 billion in sales by 2020—the executives moved from a discussion of facts to address the fictions.

Eduardo Bravo, CEO at TiGenix, a Belgium-based cell therapy company, said the most problematic fiction was the initial hype around stem cells. "Pharma jumped in and burned their fingers," he said.

Pharma's fingers are still smarting. It's true that the vast majority of stem cell companies are in the earliest stages of product development, and the sector has not been immune to the typical setbacks common in bringing forward a new class of drugs. Tumors in patients receiving human embryonic stem cells (hESC), or immune rejection in allogeneic transplant—a term that refers to patients receiving stem cells originating from another person, embryo or fetus—helped to scare off potential investors, especially those that weren't already frightened by ethical concerns and political or regulatory uncertainty. But as stem cell companies have developed work-arounds and solutions to these problems, they still haven't been able to fully assuage would-be funder's fears.

Time for the pitch

"Seven years ago, partnering discussions with Big Pharma lasted 15 seconds," said Bravo. "Now they last 15 minutes." Even as mid-sized organizations with stem cell programs like Celgene and Shire have "increased the pressure on Big Pharma" to take notice or be left behind, Bravo said the future primary players in stem cell therapeutics won't likely emerge from the Big Pharma set. "I think it will be someone new, like Samsung, General Electric, or Fuji."

Maybe that's fitting. After all, stem cell therapies are fundamentally different than small molecules in that small molecules were designed to address symptomatology, whereas "the promise of cell-based therapies is that they offer the prospect of restoring lost function and preserving against degeneration," says Martin McGlynn, CEO at Stem Cells Inc. "These are areas where the pharmaceutical industry's efforts in the past have not been stellar." The problem is that small molecules aren't the game-changers for patients or blockbuster sources of revenue they once were. As pharma moves increasingly toward specialty products and biologics that block the pathways leading to loss of function, perhaps it's time to reconsider stem cell therapies as an additional area for future growth. Stem cell technologies "could be partnered much earlier if there was vision and support from the [Big Pharma] C-suite, if they said to their executives, 'Go out and put some place-holder bets on the table. You don't have to go for winners, but put us in a favorable position if any of these technologies do pan out in controlled trials,'" says McGlynn.

What the numbers say

While stem cell companies continue searching for the funding and partnerships that will pay for the next round of clinical trials, early-stage data continues to accumulate. With the help of stem cell therapies, embryonic and otherwise, recent animal model tests have shown subjects to regain hearing, memory, and motor function. Human subjects with macular degeneration have demonstrated improvements in vision; paraplegics have regained sensation; and patients with aplastic bone marrow—a condition in which the body fails to produce the critical hemtaopoetic cells that in turn produce red blood cells, white cells, and platelets—have been essentially cured, their lives saved by stem cells. There are other examples of early successes with stem cells, and other programs targeting many of the biggest unmet needs in disease areas like Parkinson's, Huntington's, ALS or Lou Gehrig's disease, traumatic brain injury, stroke, Alzheimer's, multiple sclerosis, cerebral palsy, lysosomal storage disorders, diabetes, hematologic cancers, peripheral artery disease, and critical limb ischemia. Stem cells have been shown to provide protection even from radioactive bombs.

Politics and perceptions

Even if stem cell therapies turn out to be as successful as, for example, the monoclonal antibodies have been, there will continue to be societal and political headwinds. It's notable that every stem cell executive interviewed for this article sought to distance his company from the traditional means of stem cell derivation, which by necessity destroys a human embryo. Questions of when precisely life begins, and the implications of that largely subjective determination, are far beyond the scope of this article. It is important, however, to understand the complexities of the current political landscape with respect to funding stem cell research, and how companies working in the space have managed to innovate around the most controversial practices.

Roughly 64 percent of Americans support federal funding of stem cell research, according to data presented at the aforementioned BIO panel. Sensing this majority sentiment, President Obama, during his first 100 days in office, repealed former President Bush's executive order which limited NIH funding of hESC research to cell lines already in existence, of which there were approximately 60. As a result, "the federal government removed itself from the marketplace for innovation on hESC because its money couldn't be used," according to Jennifer Geetter, partner at the law firm McDermott Will & Emery. "The second impact was that if the existing stem cell lines weren't adequate from a quantity or quality perspective, [researchers] were frozen in what they could do, if they rely on federal funds to do it."

With Obama's repeal of the Bush order, NIH was allowed to develop its own guidelines on funding hESC research, which involved an interpretation of the Dickey-Wicker amendment, the latter of which was signed into law in 1995 by Bill Clinton, three years before James Thomson, of the University of Wisconsin, successfully derived the first hESC. The Dickey-Wicker amendment states that no federal funds be made available for "the creation of a human embryo or embryos for research purposes," or "research in which a human embryo or embryos are destroyed, discarded, or knowingly subjected to risk of injury or death greater than that allowed for research on fetuses in utero" under the Public Health Service Act.

NIH produced guidelines, which allowed for funding of research on hESC, so long as the scope of the specific research program didn't involve creating an embryo or destroying an embryo, even if researchers did indeed use cell lines derived from newly created embryos, or destroyed them as part of the derivation process. This reading of the Dickey-Wicker amendment was challenged in court, and even after two appellate courts considered the matter, first in 2011 and most recently in August of this year, the NIH guidelines continue to stand, for now.

How important is government's preclinical research funding on hESC? "Since there isn't a whole hell of a lot of private activity in the stem cell area, it's crucial," says Hank Greely, a professor of law and genetics and director of Stanford University's Center for Law and the Biosciences. "If stem cells are ever going to make a significant medical contribution through the biotech or associated industries, there has to be some sustainable source of funding for the kinds of basic research that is going on now."

Hello Costa Rica

It's important, too, to note that in vitro fertilization (IVF), which is more or less legal in every country except Costa Rica, where it is banned entirely, is an indispensible source of embryos for hESC research. Typically, many embryos are developed as part of the IVF process, the healthiest of which is then transferred into the uterus of the patient for gestation. The embryos left over are typically frozen, discarded or used for research. In January of 2011, Rep. Paul Ryan (R-WI), potentially the next vice president of the United States, co-sponsored a bill—along with 63 of his Republican colleagues in the House—titled the Sanctity of Human Life Act, the purpose of which is to "provide that human life shall be deemed to begin with fertilization." If this bill were to pass, leftover embryos developed during the IVF process would ostensibly be considered human beings, and off limits to the research community.

A Romney administration would "be highly likely to reinstate the Bush era restrictions on federal funding, or be even more restrictive."-Hank Greely

Mitt Romney, for his part, would "be highly likely to reinstate the Bush era restrictions on federal funding, or even be more restrictive," says Greely. "I don't think he has strong feelings about it"—several of Romney's grandchildren were conceived via IVF—"but powerful voices in his party do." Asked if a Romney Administration would mean a setback for stem cell research, McGlynn, Stem Cells Inc.'s CEO, declined to enter the political fray, but said that "a critical success factor in other technologies in the healthcare field has been a very active NIH, one that is not only active and knowledgeable, but also able to fund early research, to prime the pump, and to provide funding to academia as well as companies like ours that are engaged in translating scientific discovery into clinical outcomes."

Emerging therapeutics

Despite the ongoing funding issues and political challenges, several companies are moving forward with clinical trials and logging impressive early stage data. Last May, Osiris Therapeutics, an elder statesman in the stem cell space, secured the approval of Prochymal in Canada, for the treatment of graft-vs-host disease in children who have received bone marrow transplantation. The product received a second approval in New Zealand in June. Prochymal isn't the first stem cell therapy approved; Genzyme's Carticel was the first FDA approved therapy, way back in 1997. The reason that Osiris can legitimately claim to be the first approved stem cell "product" is because Carticel, and several other therapies approved globally, rely on an autologous procedure, meaning that adult stem cells are extracted from the patient, and then readministered to the same patient. Autologous therapies are limited, from a commercial standpoint, by the fact that cells must be derived from the individual adult patient that will make use of them. Prochymal, on the other hand, utilizes human mesenchymal stem cells sourced from the bone marrow of healthy adults ages 18 to 30, for use in other patients, a cell transfer process known as allogeneic transplant. Allogeneic therapies are closer to products in the sense that they can be scaled and used by any number of people.

A critical success factor in other technologies in the healthcare field has been a very active NIH…one that is able to fund early research. -Martin McGlynn

Autologous therapies have much to recommend them, however. Tim Mayleben, CEO at Ann Arbor, Michigan-based Aastrom Biosciences, says primary market research conducted by his company found that autologous therapies, like Aastrom's Phase III candidate targeting critical limb ischemia, are perceived as safer by physicians, payers, and patients. "Physicians in particular like autologous cell therapies, because if you're starting with the patient's own cells, there's not the risk of [immune] rejection and there's not the perceived or real safety issues that people have with allogeneic cells," says Mayleben. However, Mayleben concedes that in some ways, working with allogeneic cells is "easier" due to manufacturers not having to process cells for each individual seeking treatment.

At Stem Cells Inc., which is focused on CNS disorders using cells derived from fetal brain tissue—which are classified as "adult" stem cells as opposed to hESC, since organs have fully formed—there is less of a tumorigenicity risk to patients, a key challenge with embryonic stem cells. Being close to "totipotent," or capable of turning into any cell type in the body, hESC must be "terminally differentiated" in the lab, ex vivo, a complex process that prevents the cells from turning into anything other than the cell type or organ tissue that's being targeted in the patient. If just one cell slips through without being differentiated in the manner, it could lead to tumors. In this example, a patient could end up with tumors containing cartilage, teeth, hair or bone, for example, a gruesome outcome to clinicians and potential investors. However, stem cell companies—Stem Cells Inc. included—have largely avoided this problem, primarily by using other kinds of stem cells whose fates are more hardwired, unlike the youthful and fancy-free embryonic stem cells. Or by meticulously screening embryonic cells using assays or procedures to assess whether cells have indeed been made to "dance to a tune" that leads to terminal differentiation, as McGlynn put it.

Stem Cells Inc. is pursuing therapies across a range of CNS disorders including spinal cord injury, stroke, Alzheimer's, lysosomal storage disorders, cerebral palsy, and macular degeneration, among others. McGlynn says the putative label for his company's neural stem cells would be as follows: "A neuro-active, cell-based therapeutic, for the restoration and preservation of neurological function in a broad range of CNS disorders."

We were last in the IVF clinics in 2005, so our methodology doesn’t destroy, harm, or change the fate of the embryo in any way. -Gary Rabin

Pluristem Therapeutics, an Israeli cell therapy firm that raised roughly $34 million in a September public offering of common stock, is also targeting patients with critical limb ischemia, the end stage and most severe form of pulmonary artery disease. In its lead program, Pluristem treated 27 patients —12 in the United States and 15 in Germany—with the goal of demonstrating progression-free survival against historical data. The result was 85 percent progression-free survival, compared to 65 percent in the historical, placebo-controlled studies. For CLI, however, it's likely that FDA would require amputation-free survival, which the endpoint that Aastrom Biosciences is looking at in Phase III. Pluristem is now moving forward with a Phase II trial evaluating its placental expanded cells (PLX) in the treatment of intermittent claudication, a subset of peripheral artery disease. Through a compassionate use program in Israel earlier this year, the company also successfully saved the life of a seven-year-old patient with aplastic bone marrow, who had failed a bone marrow transplant. She was given two doses of PLX cells one week apart, via intramuscular injection, and "in seven to 10 days, she had recovery of her red cells, white cells, and platelets, and was discharged" from the hospital, says Bill Prather, Pluristem's senior VP, corporate development. The company has saved two additional bone marrow patients' lives in the last few months.

Pluristem struck its first PLX out-licensing deal with United Therapeutics in 2011, to fund development for treating pulmonary arterial hypertension, a chronic syndrome characterized by abnormally high pressure in the arteries leading from the heart to the lungs. The company manufactures its own cells, which are derived from human placentas, and hopes that its sophisticated 3D culturing process will lead to a situation where "we will be considered by our partner as the best supplier," says CEO Zami Aberman. "We don't want to give any manufacturing rights to the pharma companies." The subcutaneous administration of PLX is also a differentiating factor of Pluristem's therapies. "We don't believe we need to go to the intravenous route because that's a dose-limiting procedure. There's a certain amount of cells you can't exceed because the cells get stuck in your lung," says Prather. "In our ischemia trials, it was an outpatient procedure...it took about 20 minutes [to administer the cells]." Pluristem's PLX cells cannot be differentiated, and the company isn't focused on pluripotent cells, or cells that can be differentiated in the lab. Instead, Pluristem is focused on cells that are "good secretors, that can secrete a variety of factors, which is a completely different approach than embryonic stem cell therapies." The company is "working with both the EMA and the FDA on all our projects," says Prather. By forming relationships with expectant mothers, Pluristem is able to show up for scheduled C-sections to collect the placenta. "We'll be able to manufacture 10,000 doses at a dose of 300 million cells from one placenta, and we have a lot of them,"according to Prather.

High risks remain

Aberman uses Geron, the first company to invest heavily in developing stem cell therapies, as a supportive example of Pluristem's approach. Geron shuttered its embryonic stem cell R&D programs late last year, a sign many interpreted as a swan song for stem cell therapies. "Geron was involved in the field for 20 years, and they tried to differentiate hESC for spinal cord injury. They spent about $500 million over 20 years, and nothing happened," says Aberman. "Talking with them a year ago before they shut down, they agreed that the therapeutic effect is achieved by the factors that are secreted by the embryonic stem cell...so why mess with embryonic stem cells if you're looking for these [secreted] factors? What we do is inject the cell, which releases a multifactorial process that interacts with the patient's body to generate a paracrine or endocrine effect...that helps the body to heal itself and to change or modify the disease progression."

Advanced Cell Technology (ACT), based in Santa Monica, California, hasn't given up on hESC, but "unlike the conventional methodology for creating human embryonic stem cells," which necessarily destroys the embryo, "we don't do that," says Gary Rabin, CEO. "That activity, obviously, has cultural, religious, ethical, political, and legal repercussions involved." So how does ACT avoid destroying embryos during the derivation process? "We take a much earlier stage embryo, when it's at about the eight-cell stage, and remove a single cell," which is then used as the progenitor cell for ACT's embryonic stem cell lines. "This technique is identical to what's done in pre-implantation genetic diagnostics in IVF clinics," a routine procedure conducted when a parent is donating embryos, and the embryos are screened for significant genetic disorders like Huntington's or Tay-Sachs, for example. "We were last in the IVF clinics in about 2005, so our methodology doesn't destroy, harm, or change the fate of the embryo in any way," says Rabin. The problem with using the NIH approved cell lines, per Rabin, is that the NIH lines "are already exhibiting a fairly significant amount of fate commitment to become the kinds of cells that they're already going to become. Our much earlier stage cells don't exhibit any of this kind of fate commitment, so they're much more efficient at creating the three germ cell layers, than any of the NIH lines we tested."

Having sidestepped the cultural, religious, ethical, political, and legal implications associated with embryonic stem cell research and development, ACT's lead clinical program involves taking hESC and turning them into retinal pigment epithelium (RPE), which are cells that sit at the back of the macula, in the eye. These cells provide "a whole variety of trophic factors," as well as waste removal for the photoreceptor layer. As RPE cells decline, the photoreceptor layer begins to decline, the result of which is age-related macular generation (AMD), "a massive unmet medical need," says Rabin. "There are 15 million people in the United States that have this disease, and there's no cure."

Mounting unmet need

To illustrate the unmet need, Rabin says "there's only been one blockbuster [AMD] ophthalmology drug in the last 30 years—Genentech's Lucentis—which is used for "wet" AMD. Lucentis doesn't correct the underlying problem, but it dries out the vascular infrastructure of the eye, which allows patients to maintain vision rather than having blood in the eye. According to Rabin, 90 percent of patients with AMD have dry AMD, as opposed to wet AMD; the latter, "in almost all instances, is the end stage of dry AMD." A second reason for targeting the eye is that, like the blood/brain barrier, the eye is "immunoprivileged," meaning that transplanting allogeneic cells into the eye will not typically trigger an immune response. The third reason for choosing the eye, says Rabin, is that advanced scanning techniques make it possible to observe what's happening "all the way down to the cellular level" in the back of the eye. Since ACT is dosing AMD patients with a relatively small number of cells—100,000, suspended in 150 microliters of a saline-like fluid—the therapy has the potential to become "a real off-the-shelf product," says Rabin. Currently in Phase I, ACT's patients, after a year with no safety complications, have demonstrated remarkable results. "Our first patient had only hand-motion vision. Now she can read three lines on an eye chart. She can thread a needle and work on a computer; it's pretty amazing," Rabin says. Also administered by an injection, ACT's therapy is an outpatient procedure that takes about 90 seconds to perform.

In addition to AMD, ACT is also conducting trials on Stargardt's disease, which Rabin characterizes as a juvenile onset of essentially the same problem presented in AMD, but it's a genetic defect. Preliminary results from that Phase I trial were published in The Lancet last January. Rabin said early results were published because "this was the first time ever that a human embryonic stem cell-derived tissue was used and demonstrated efficacy in a human trial, and also, it was the first time that any therapy demonstrated efficacy against macular degenerative disease. Rabin adds that FDA has recognized RPE cells' unique pigmentation—there are only two kinds of pigmented cells in the body, RPE and melanocytes in the skin—as a way to prove and validate terminal differentiation. The cells' pigmentation makes the screening process much more effective than the standard polymerase chain reaction (PCR) assay typically used to validate differentiation in cell therapies. "That went a long way in making the FDA comfortable that we were not going to inject undifferentiated cells," says Rabin. The head of opthamology at FDA, Wiley Chambers, established the three lines of an eye chart improvement as a test for visual acuity, and Rabin says he hopes to work with FDA to develop new metrics, since early stage patients won't have lost a degree of vision equivalent to three lines on an eye chart.

Rabin, like the other executives and CEOs interviewed, is optimistic about the future of stem cell therapies. For ACT, using hESC despite lingering perceptions among politicians and the public at large makes sense because the "efficacy, potency, and the survivability of cells derived from embryonic stem cells versus those derived from adult stem cells is that the embryonic stem cell-derived tissue, time after time, always outshines the adult stem cell-derived cells...it's basically the equivalent of taking very young tissue versus very old tissue," he says.

Time for a reset?

Still, uncertainty remains. Mayleben, Aastrom Biosciences's CEO, says FDA's regulatory culture in the stem cell area needs to evolve toward the kind of culture it exhibits in oncology, which involves a more enlightened risk/benefit assessment with respect to unique, emerging products. But it may be the public at large that pushes these therapies forward, by whipping up demand for access. "Everyone knows someone that has a condition that might link up to these kinds of technologies down the road," says Geetter. "It doesn't matter whether you are a Republican or Democrat. There are some interesting, although quiet institutional supporters of hESC research that cross political lines."

Everyone knows someone that has a condition that might link up to these kinds of technologies down the road. -Jennifer Geetter

These supporters—which include thousands of patients—should speak out now. When they do, pharmaceutical companies will be compelled to listen. The promise of cell-based therapies, while there have been setbacks, hasn't been broken; it may just need more funding and a little risk-taking to gain the traction it will need in the commercial world. Using new scientific procedures and different cell types, stem cell companies have largely moved past the political and ethical debates that ignored the vaulting promise of science. To keep pace with the changing contours of disease, politicians and their constituents should, too.

Ben Comer is Pharmaceutical Executive's senior editor. He can be reached at bcomer@advanstar.com.