Cell Therapy Might Be Poised For A Comeback
By Amy Reeves, Investor's Business Daily
Posted 12/21/2012 02:18 PM ET
On Dec. 11, Jeremy Levin, the new CEO of giant drugmaker Teva Pharmaceutical Industries (TEVA), laid out his plans for his company in the coming year. After much discussion of the pipeline, cost structure and global opportunities, Levin affirmed one small item on the agenda: Teva is going ahead with a large, late-stage trial of Revascor, an experimental cell therapy for congestive heart failure.
It might seem like a footnote, especially since Revascor isn't even owned by Teva but by a partner, small Australian biotech Mesoblast. But the trial represents a key step forward for true believers in cell therapy, who've spent the last couple years in the wilderness.
"There's never been a more exciting time to look at cell therapy," analyst Jason Kolbert of Maxim Group told IBD.
A technician places stem cell samples into a incubator, where the cells will be grown and multiplied. AP View Enlarged Image
Cell therapy represents a separate treatment platform from pharmaceutical or biologic treatments. The process involves introducing healthy cells into a diseased patient, regenerating the tissue, much like a bone-marrow transplant. In modern therapies, cells are first manipulated to make them healthier or more disease-resistant or just to make more of them.
The main difference between cell therapy and standard drugs is that while drugs introduce chemicals that may halt degeneration and fight off parasites, cell therapy may reverse disease progression in the diseased tissue. Meanwhile, biologics target the immune system.
"What you have now is a situation where you're dealing with the most powerful building blocks in the history of humanity," said Stephen Brozak, president of boutique investment bank WBB Securities. "The (health care) models are based on 'a pill a day,' making disease management exactly that — management. What regenerative medicine can do is reset you to a normal setting."
Despite such promise, Wall Street and the drug industry have been pretty sour on cell therapy ever since the high-profile belly-flop of Dendreon (DNDN).
Dendreon's Provenge, known somewhat misleadingly as a "cancer vaccine," uses what is called autologous cell therapy. Cells are removed from the cancer patient and put through a process that stimulates their immune response, then put back into the same patient.
Avoiding Chemo's Side Effects
Treatment with your own cells has some definite advantages, such as the lack of terrible side effects that come with chemotherapy drugs. Hopes for the new treatment paradigm sent Dendreon's shares soaring to nearly 60 in April 2010, after its initial approval.
Now, its shares hover around 5. The problem, Kolbert says, is that the process is highly cumbersome and expensive and still only extends life for three or four months at the median, making payers reluctant to reimburse it fully. Still, he says Provenge is an important "proof of concept," paving the way for therapies in the pipeline that are better, faster and cheaper.
Revascor's method is not autologous but allogeneic — it uses donor cells instead of the patient's own. For maximum flexibility, Mesoblast uses stem cells, which under the right conditions can produce a great variety of other cell types. Stem cells made news in past years due to scientists' controversial use of cells taken from embryos, but Mesoblast uses adult sources.
In theory, allogeneic treatments can be mass-produced, making them benefit from economies of scale. Kolbert estimates the cost of such a product could be a tenth of Provenge's, making competitive pricing possible. They also can be available off the shelf for a patient who needs them immediately, such as a heart-attack victim.
Cardiology is a popular field for cell-therapy research. The only large player with an in-house cell-therapy program, Baxter International (BAX), is conducting a phase-three trial of an autologous therapy for chronic myocardial ischemia, or insufficient blood flow to the heart, the No. 1 cause of death in the U.S. Osiris Therapeutics (OSIR) is even further along with its allogeneic product Prochymal, approved in Canada and New Zealand to treat transplant resistance, and awaiting FDA approval. It's also being evaluated as a way to rebuild the heart after an attack, which would be a much larger market.
In a sign of the industry's struggles, however, Osiris lost its heavyweight partner Genzyme last year after the latter was acquired by Sanofi (SNY), which chose to end the relationship. Mesoblast faced a similar prospect when Teva acquired its partner Cephalon, making Levin's reassurance all the more important.
Big Pharma still doesn't get cell therapy, Brozak laments. But he says eventually it will have to.
"The pill-a-day model is dead and buried," he said. "Any large pharma that doesn't understand that will go the way of the buggy whip."
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