Sales of stem cell products in 2013 skyrocketed, we estimate, 42% from 2012 to reach $236 million. With several new players entering the market, notably DePuy Synthes (the largest orthopedic company in the world), stem cell sales will accelerate, we estimate, by 61% to reach an eventual sales amount of $380 million. The principal driver of these sales will be improved versions of the cancellous bone with endogenous mesenchymal stem cells (MSCs), new allograft liquid forms with endogenous MSCs for orthopedic use and sharply rising visibility of cell-based companies and recent clinical study results.
The value of the 47 stem cell companies we track rose 82% in 2013 and at the start of 2014 stood at an aggregate $7.6 billion.
The companies and people who are behind this remarkable story of innovation and sales growth will be on the podium at the 9th Annual New York Stem Cell Summit on February 18.
For registration information click here.
Here is a preview of what we expect will be the highlights of this year’s Summit.
Allograft Bone With Endogenous Mesenchymal Stem Cells
Stem cell business models are difficult to design because, actually, everyone is his/her own stem cell factory. One way to use stem cells therapeutically is to harvest and concentrate the patient’s own supply. Why pay for what is already available in the patient? Alternatively, stem cells can be harvested as part of an allograft tissue collection and supplied as endogenous cells within a collagen matrix.
The two most successful business models to date have been sales of equipment which can harvest and concentrate the patient’s own stem cells and the processing of allograft bone matrices in such a way as to preserve the endogenous stem cells.
The later, allograft bone with endogenous mesenchymal stem cells, became the first off-the-shelf stem cell therapy to reach a broad market nearly a decade ago. The primary application has been in spine fusion models (and, to a much lesser extent, fracture models) and has gained share in large measure as Infuse (Medtronic Spine) has come under payer pressure.
Osiris Therapeutics, Inc.’s Osteocel was the first such tissue form. It was, essentially, a cancellous bone matrix with endogenous mesenchymal stem cells. Under the FDA rules, it qualified as an HCT/P.
HCT/P means, quoting FDA documents, “Human cells, tissues, or cellular or tissue-based products (HCT/Ps) means articles containing or consisting of human cells or tissues that are intended for implantation, transplantation, infusion, or transfer into a human recipient. Examples of HCT/Ps include, but are not limited to, bone, ligament, skin, dura mater, heart valve, cornea, hematopoietic stem/progenitor cells derived from peripheral and cord blood, manipulated autologous chondrocytes, epithelial cells on a synthetic matrix, and semen or other reproductive tissue.”
The number of firms that are now supplying cadaveric bone matrices with endogenous stem cells total six with LifeNet Health/DePuy being the newest entrant. All told, we estimate, shipments of these allograft based bone matrix products with endogenous mesenchymal stem cells reached $175 million last year.
In 2014, we estimate, shipments will rise to more than $200 million.
Mesoblast Limited
At $1.7 billion in market value, Mesoblast is the most valuable pure stem cell company in the world.
Over the course of the past six months, Mesoblast made two highly significant announcements: 12-month results of its Mesenchymal Precursor Cells for the treatment of back pain and the acquisition of Osiris’s stem cell intellectual property.
Mesoblast’s 12-month back pain treatment results are highly disruptive on more than one level.
The study results taught that a single injection of stem cells (in the case of Mesoblast, their MPCs) directly into the disc of patients with degenerative disc disease substantially relieved pain, cut opioid use, restored disc stability and reduced further surgeries or other interventions.
The study was a 100-patient Phase 2 clinical trial.
Dr. Hyun Bae, Clinical Investigator and Medical Director, Director of Education, Cedars-Sinai Spine Center, Cedars-Sinai Medical Center, Los Angeles, and Medical Director of Spine Institute, Santa Monica, said: “This is compelling evidence that Mesoblast’s stem cell technology has the potential to change the treatment of spinal disease from focusing on surgical reconstruction to biologic regeneration. Physicians and patients are seeking access to a new modality to treat patients with this highly debilitating disease for whom there are limited options. We hope that these outcomes will be replicated in a pivotal trial.”
The patients in the study had moderate to severe low back pain persisting for more than six months due to early disc degeneration (less than 30% disc height loss, 83% below Pfirrmann Grade 5 by MRI). Thirteen sites participated in the study.
The arms of the study were:
Direct intra-disc injection of saline (n equals 20)
Direct intra-disc injection of hyaluronic acid (HA, n equals 20)
Direct intra-disc injection of 6 million allogeneic MPCs in hyaluronic acid carrier (6M, n equals 30)
Direct intra-disc injection of 18 million allogeneic MPCs in hyaluronic acid carrier (18M, n equals 30).
Importantly, these were outpatient injections.
One of the most powerful trends in orthopedics today is the move to outpatient care and increasingly diverse points of care.
For example, these are the fastest growing points of care for orthopedic patients:
– Family Practitioner
– Internist
– Ambulatory Surgical Center
– Pain Management Clinic
– Pharmacy
– Physical Medicine Specialist
– Rheumatologist
– Sports Medicine Clinic
– Chiropractor
Injectable treatments fit very well into these points of care.
The study showed that MPCs injected directly in the disc of patients with pain arising from degenerative discs:
Reduced pain at one year better than saline or HA alone. At 12 months mean pain reduction was 40 points for the 18M MPC group, 37 points for the 6M MPC group, 27 points for HA controls, and 27 points for saline controls (p equals 0.046 and p equals 0.11, respectively, for 18M MPC and 6M MPC vs pooled controls)
Reduced use of opioid for pain relief. At 12 months, mean daily use of opioid medications for back pain was reduced by as much as 42% in the 18M MPC group compared with the saline control group (p equals 0.17)
Reduced further treatment. By 12 months, 25% saline controls had undergone an additional intervention, compared with 10% HA controls, 6.9% of 6M MPC and only 3.3% of 18M MPC treated patients
Better Oswestry Disability Index (ODI) scores. Mean reduction in the ODI functional disability score was 43% for the 18M MPC group, 35% for the 6M MPC group, 30% for HA controls, and 28% for saline controls (p equals 0.09 for 18M MPC group vs saline).
Then, in early October, Mesoblast acquired all of the assets of Osiris’s mesenchymal stem cell business including all intellectual property, products (including Prochymal) and customer accounts.
Logistics Bursts on the Scene
The stem cell business is an injection business. Approximately 94% of current stem cell product sales are for orthopedic indications and 70% of those are for spine repair and 23% are for articulating joint repair. Both markets are increasingly outpatient treatment markets.
The number of hyaluronic acid injections annually, for example, is approximately 2 million for large joints. The number of steroid injections into the spine is also counted in the millions annually. Stem cell injections could effectively replace both HA and steroid injections. But it won’t happen if the logistics problems with stem cells aren’t solved for the physician office, pain clinic or ambulatory surgery center.
Stem cells must be cryo-preserved. Storage and shipping temperatures range from minus 50 degrees Fahrenheit to minus 150 degrees Fahrenheit. This is generally accomplished by shipping stem cells in dry ice (maintaining the minus 50 degrees) and then either using immediately or storing briefly in a cryogenic freezer (minus 150 degrees).
Most physician offices, pain clinics or ambulatory centers do not have cryogenic freezers. To use stem cell therapies, they must engage in just-in-time shipping. As soon as the dry-ice container arrives, use the cells.
But patient schedules vary. A simple schedule change can risk discarding the dry-iced stem cell product and writing off thousands of dollars of biologics. Furthermore, orthopedics is built on the concept of consignment shipping. The surgeon uses only what they need in surgery and all unused products go back to the manufacturer. That appears to be impossible for suppliers of cellular therapies.
The logistics of managing stem cell therapies will be, we expect, the next great area of opportunity for both suppliers of off-the-shelf stem cell products. Getting away from dry-ice and cryogenic freezers could open up every corner of orthopedics to these cell based tissue forms.
One of the most exciting new presenters at this year’s Stem Cell Summit is Cryoport, Inc. which has just such a logistics solution for stem cell companies.
Key Presenters
With DePuy Synthes entering the stem cell business, Rony Thomas’s presentation will carry special weight. Mr. Thomas is President and CEO of LifeNet Health, the supplier to DePuy Synthes.
Parcell Laboratories, Inc., which received a critical stem cell patent in 2013 (and has many more in the works) is presenting at an interesting juncture in its development.
NuVasive, Inc., arguably the largest distributor of stem cell products in the world, will be presenting for the first time at this year’s Summit.
Eduardo Bravo, CEO of TiGenix NV, is the most experienced and, we calculate, the largest supplier of cell based therapies in Europe. His presentation is always a highlight of the Summit.
Mesoblast, which has become the colossus of the stem cell industry, will be the first presenter in the morning.
Michael West of BioTime, Inc., Yael Margolin of Gamida Cell LTD, BJ Lehmann of Athersys, Inc. and Zami Aberman of Pluristem Therapeutics, Inc. are all leaders in the allogeneic stem cell arena and are coming off particularly strong 2013.
ISTO Technologies, Inc., Histogen, Inc. and Cellular Biomedicine Group, Inc. all made terrific progress in 2013 and appear poised to jump to the next level in 2014.
Clinic based stem cell business models will be amply represented by the leader autologous stem cell therapies—Celling Biosciences and the new logistics solution for clinic based treatments—Cryoport.
Neostem, Inc.’s CEO Robin Smith is probably the best known stem cell company executive and has her finger on virtually every major stem cell development. Her talks are always the highlight of the New York Summit.
Rounding out the stem cell companies presenting are DiscGenics, Inc., Promethera Biosciences SA/NV, INCELL Corporation, LLC, Lonza Group Ltd, AllCells, LLC, CTI Clinical Trial and Consulting Services, Progenitor Cell Therapy LLC, and California Stem Cell, Inc.
Dr. Arnold Caplan, Case Western Reserve University, the father of mesenchymal stem cells, will open the meeting and Andrew Ittleman, Esq., Fuerst Ittleman David & Joseph, PL, the attorney who has tackled the very tough issues of FDA regulation of cellular therapies, will close the meeting.
All in all, this year’s Summit promises to be a truly extraordinary seminar.