HONG KONG – China has released a draft of its long-awaited first-ever regulations on stem cell studies, which provide guidance for an industry with huge scientific and commercial potential.

"China still needs to form its framework for stem cell therapy. China was promoting it and a lot of people were flying to China for stem cell treatment, but then the government banned it, even the clinical trials," said BN Manohar, CEO of Indian stem cell research company Stempeutics Research. "They're forming a new regulation; hopefully, it will come out soon."

The Chinese government has put together a set of regulations to help with the development of an industry it sees as having great potential.

The CFDA developed the trial regulations on clinical studies of stem cell products and distributed them to FDAs across the country as well as the Ministry of Science and Technology, the Chinese Academy of Sciences, drug companies and research institutes. All those organizations can submit feedback to the National Health and Family Planning Commission by April 10.

"Upon the implementation of this new regulation, stem cell therapy [will] no longer be administrated as class III medical technology," said the CFDA.

The regulation would not apply to hematopoietic stem cell transplantation, which already has clear technical requirements in the country, or to stem cell pharmaceuticals, which are being registered as new drugs.

At the same time, the regulations prohibit stem cell clinical studies from going directly into clinical application upon completion without additional clinical trial applications. The data collected during the studies can be submitted as technical documents for the evaluation of applications.

Under the draft regulations, organizations would be required to conduct clinical studies of stem cell products on a scientific, standard and open basis. The new regs also prohibit charging study subjects to participate as well as advertising.

Companies also will have to have enough science to back up their studies, and the therapies have to be better than existing therapeutic or preventive treatments, target diseases for which there are no treatments or aim to meet important unmet medical needs.

Meanwhile, all clinical studies should follow China's clinical trial quality control regulations and other guidelines. The organizations conducting the stem cell studies will be responsible for quality management.

The trial regulation also provides for seven criteria that qualify stem cell research organizations, which must be first-class tertiary-level hospitals; be qualified to conduct trials; have strong medical, educational and research abilities; comprise mature systems to manage stem cell products such as quality control, risk control and audits; have top researchers trained in good clinical practice; have academic boards and ethics committees; and have plans to deal with adverse events.

Even though China has taken steps to encourage the stem cell therapy studies, there are still numerous challenges companies face, including a shortage of funding, difficulties with large-scale manufacturing and cold chain maintenance as well as ensuring the consistency of cells and the challenge of lowering costs to achieve affordability.

Process control is a big part of delivering product to patients. Stem cell products are very sensitive and need to be maintained, shipped and validated in a cold chain environment.

"The cells will die if they're not stored or transported properly," Manohar pointed out. "So maintaining the cells in a cold chain and stability are some of the biggest challenges.

"Expanding and multiplying stem cells in a large scale is a big challenge for the commercialization of stem cell products in terms of scientific technology," Manohar added. "But raising money is the biggest one for Asian countries."

Unlike with most other therapies, studies on stem cell research can be very time consuming and lengthy, which scares away investors.

"Equity players want to see how soon they can make money and, since the risk is high and the regulations are also evolving, they're not willing to put large capitals in our business," Manohar said.

"The only way we can raise money is to form strategy partnership with pharmaceutical companies; they understand [the process] and have more patience."