SAN FRANCISCO – There is no doubt the regenerative medicine sector, which encompasses among other things cell and gene therapies aimed at tissue and organ repair, has been recognized as pivotal for the development of the next generation of innovative medicines. However, like any new field, the science has had to prove itself before being able to attract meaningful investments and industry involvement. According to the Washington-based Alliance for Regenerative Medicine’s (ARM) second annual report, the sector has now “come of age” and momentum is building thanks to a number of positive clinical data readouts coupled with strong investor interest during the past year.

Big pharma also is taking notice and is starting to get involved in the space. Earlier in January, Los Angeles-based Capricor Therapeutics Inc. became a beneficiary of that interest, inking a collaboration agreement with Janssen Biotech Inc., a division of Johnson & Johnson, covering the company’s allogeneic adult stem cell therapy for heart disease. (See BioWorld Today, Jan. 7, 2014.)

The agreement covers development of CAP-1002 for myocardial infarction. The deal is worth $12.5 million up front for Capricor, and gives Janssen the right to license CAP-1002 exclusively after follow-up results from a Phase II trial are available. If Janssen takes that option, Capricor will be eligible for up to $325 million in additional payments.

CAP-1002 is an allogeneic cardiosphere-derived cell therapeutic (CDC). The cells are derived from donor tissue, which, according to Capricor, offers the advantage of being an off-the-shelf therapy. That means the patient does not need an invasive procedure to harvest tissue, and quality control is highly reproducible. The therapy is delivered through an intramyocardial injection catheter into an artery, guided by an electronic map of the heart.

INDUSTRY BRIEFING

Drawing from the data that his organization had generated in the annual report, Geoff MacKay, chairman of ARM and president and CEO of Organogenesis Inc., presented some of the major highlights during a state of the industry briefing at the Biotech Showcase meeting last week.

He noted that the regenerative medicine sector already has more than 40 cell therapy products that are commercially available. With a maturing pipeline that number undoubtedly will grow over the next few years.

He also pointed to the fact that the sector is attracting more investments with more than $1.3 billion in combined public and private funding last year, including several companies taking advantage of the open initial public offering (IPO) window. Among those was Fate Therapeutics Inc., which garnered about $39.6 million from its IPO. The company works with modulators of adult stem cells to find therapies for orphan diseases that include hematologic malignancies, lysosomal storage disorders and muscular dystrophies. (See BioWorld Today, Oct. 2, 2013.)

The firm’s two main technology platforms involve pharmacologically optimizing hematopoietic stem cells (HSCs) and activating satellite stem cells by way of ex vivo procedures.

Another encouraging sign is that the larger biopharmaceutical companies are paying closer attention to partnering and acquisition opportunities and are willing to invest in product pipeline development. All those factors are combining to point to 2014 as a potential breakout year for the sector.

“There is real momentum,” said Dave Stadinski, head of equity capital markets at Piper Jaffray, who was chairing a panel on the financial environment for regenerative medicine. Although still early, it has evolved into an investable technology, he noted.

One of the beneficiaries of that enthusiasm has been Bluebird Bio Inc., which is developing gene therapies for genetic and orphan diseases.

In June, the company completed an above-the-range IPO, selling about 5.9 million shares at $17 each to raise $101 million. The firm’s gene therapy deploys stem cells harvested from the patient’s bone marrow, and the lead program is slated to kick off a Phase II/III trial late this year in childhood cerebral adrenoleukodystrophy (CCALD), a condition caused by the buildup of fatty acids that damages the myelin sheath.

In December, Bluebird said the first subject with beta-thalassemia major had been enrolled in its Phase I/II HGB-205 study in France and had undergone infusion with its Lentiglobin drug product in autologous hematopoietic stem cell transplantation. Panelist Jeffrey Walsh, chief operating officer at the company, said that after hitting some hurdles several years ago gene therapy has addressed many of those and now positive clinical data from gene therapy trials have begun to emerge.

That fact, combined with biotech in general enjoying strong support in the financial community, came together to help the company complete its successful IPO.

BUSINESS PLANS

The business plans of leading companies developing regenerative medicine products also are evolving. That was reinforced by panelist Michael Schuster, head of global therapeutic products at Mesoblast Ltd.

He said the company is widening its focus from cardiovascular and neurological programs in partnership with Teva Pharmaceutical Industries Ltd.

Melbourne, Australia-based Mesoblast recently inked a partnership with Intrexon Corp., of Germantown, Md., and Ziopharm Oncology Inc., of Boston, to develop a class of cancer therapeutics. Under the terms, the firms will combine Mesoblast’s mesenchymal lineage cells with Intrexon’s Rheoswitch therapeutic system platform to co-develop complex transgene enabled cell-based treatments for oncology applications. The goal is to enable development of therapeutic candidates in the treatment of cancer that exhibit both specific tumor-targeting characteristics and controlled gene expression. The deal is a 50-50 collaboration between Mesoblast and Ziopharm, with Intrexon participating through its collaboration with Ziopharm. (See BioWorld Today, Oct. 24, 2013.)

Also on the deal front, Cytori Therapeutics Inc. disclosed an agreement in November with Chinese firm Lorem Vascular to commercialize Cytori cell therapy in the cardiovascular, renal and diabetes markets in China, Hong Kong, Malaysia, Singapore and Australia. The deal includes $24 million to San Diego-based Cytori in exchange for 8 million shares of the company’s common stock at $3 apiece.

Last week, Cytori received investigational device exemption (IDE) approval from the FDA to begin a prospective clinical trial to evaluate the safety and feasibility of its cell therapy as a potential treatment for hamstring injuries. The RECOVER trial will begin as a 10-patient, open-label study. Following a 90-day assessment of those patients, Cytori is approved by the FDA to expand RECOVER to a multidose, multicenter, double-blind, placebo-controlled trial. The therapy is derived from the company’s Celution system, which enables access to a patient’s own adipose-derived regenerative cells at the point of care.

Once the safety and feasibility of administering the cell therapy has been confirmed, the company has the option to expand RECOVER to include an additional 60-patients in the multi-center, double-blind, placebo-controlled phase of the trial.

Editor’s note: The second part of this feature will appear in next week’s issue.