Hi Phaedrus,
Thanks for the question. I have considered it before, but for a different reason. More on that later though.
While I don't know for certain why big pharma aren't there yet, I do have some comments and observations on why that may be the case.
Firstly, it is relatively new and just plain difficult. The promise of stem cells has been there for a few decades. I think originally, the gap between the promise and a game changing product was expected to be shorter. What we thought was the knowledge gap to be bridged, has turned out to be bigger and more complex than expected. Every part of the development process still seems a little way away from maturity. What's the best cell extraction method? What's the best cell growth medium? What's the best cell expansion technology? Where is it best to deliver the cells in the body? Dosage? How is it best to deliver them? At what frequency should they be delivered? What is the MOA of the cells? Given some of the cells' unique ability to differentiate, does that MOA change depending on the treatment target? Those are just some of the questions that the experts are attempting to bed down. There are people out there claiming to have the definitive answer to these questions, but the truth is, while the knowledge in the space is growing, and we're drawing closer to mature answers, we've not quite put the questions to bed. I think we're close though. You'd think big pharma, with its resources, would be best placed to bring cell products to market though.
Which brings me to the second point, which is a cultural one on how big companies tend to operate. Past a certain point in a company's development, the money men move to the front and centre of strategy and strategic spending. While this may make commercial sense, it does raise a blind spot or two. So, what do they spend their money on? First, we have to appreciate that they are considering many potential products, not just stem cells, when deciding where to place their R&D dollars. Add to that, they are beholden to their shareholders and board. They also have their own remuneration packages to consider, packages which likely have a significant bonus component to them. The bonus component as we know, is usually financial performance based. What is a CEO to do? Should he/she spend their precious dollars on what they are more familiar with, and what they consider to be more likely to reach commercialisation and provide profits and growth in the near term, or, on a new, risky stem cell product? Good CEOs do look to invest in new tech/products though, either directly or via a third party. Some do so because they believe it will eventually be successful and profitable, and some do it as a hedge. Regardless, they are skittish in the stem cell space, as MSB knows all too well.
Thirdly, big companies don't always produce bleeding edge products. They might start off with a bleeding edge product, grow, and then build mature, great new products around that. Nokia owned the mobile phone space, but are minor players now. Steve Jobs (and Wozniak) - MacBook, iPhone and iPad - revolutionary stuff. Tim Cook - not so much, new tech - yes, but bleeding edge - no. Even Bill Gates, who arguably was the first to bring an OS mainstream, didn't grasp the significance of the internet and wrote it off. To his credit though, when he did grasp it, he turned his behemoth around and got re-focussed quickly. Unlike tech companies, pharmaceutical companies have to deal with longer product development cycles and regulatory hurdles, which makes bleeding edge just that little more difficult for them.
Lastly, bleeding edge biotech usually seems to begin with individuals with highly specialised, in-depth knowledge, researching a specialised field. They're at the pointy end of the stick and so it makes sense to me that they would be the first to see the potential. If they're driven enough and lucky enough, they can articulate that potential and have friends in the investment space who can both stump up cash and bring other investors to the table. They often have a completely different perspective and frame of reference to what a big pharma CEO would have. This comes with all the strengths and weaknesses that that entails. Enter Exhibit 1 - Dr. Silviu Itescu.
As mentioned earlier, my reason for interest in your question is different to yours. I've looked at the question purely as part of risk assessment. I look at our competitors as being in two broad groups, both significant. The first group comprises other aspiring biotechs like ours. Some of them are hardened fund raisers and survivors, including some who have been around for over two decades. I can't see them waving the white flag at this point. First to market matters here. The second group is big pharma. Once they see the success of stem cell products they will want their piece of the pie. Most I think, like Microsoft, will bring their ships around. They will be successful because they have vastly more resources. Hopefully MSB has a strong, established revenue stream by then.
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