The Business of Cell Therapy
Hype cycle or Gartner plateau of productivity?
June 2008 May 2000
Tissue Engineering will be the #1 job of the 21st century. “Stem Cells Get Real.” Finally, real businesses, real science, and real hope. Everything you've heard until now is wrong.
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A Comparator…
Gene Therapy 1940s discovery that isolated DNA could genetically transform cells
• 1990s first successful gene therapy in rare disorder • 2008: <10 companies with marketed gene therapies for a couple conditions & # of patients is small (mostly outside the US)
Recombinants 1972 discovery of recombinant DNA
• 1982 FDA approval of genetically engineered human insulin • 2008: 106 recombinant and mAb products approved plus a few tissue engineered products for 392 products (citing BIO in GenEng News,
April 1, 2008 p. 9)
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Unprecedented Innovation
Out of six biotechnology innovations measured, the study found that four (targeted therapies, monoclonal antibodies, radiotherapy and drug device combinations) advanced significantly in 2007, marking a year of unprecedented progress and commercial impact. Targeted therapies with companion molecular diagnostics have experienced the most profound surge in realization, rising 50 percent in just three years. "As a first step toward more personalized treatments, targeted therapies with companion diagnostics are reaching more patients. However, there remain significant economic, reimbursement and regulatory challenges that could prevent valuable treatments from becoming available to people who need them.“ [1] Monoclonal antibodies - Have achieved widespread clinical acceptance in the past three years after more than 20 years of variable progress. In 2002, monoclonal antibodies were the highest achieving innovative technology in terms of discovery, while RNAi-based gene therapy was the least. By 2007, stem cells moved from the middle of the pack to achieving the highest discovery innovation index among the six technologies; RNAi moved up, and monoclonal antibodies moved down to a lower level of innovation.
Deloitte Center for Health Solutions 2008 Survey of Health Care Consumers can found at www.deloitte.com/us/healthcareconsumersurvey [1] Matthew Hudes, U.S. managing principal, Biotechnology, for Deloitte Consulting LLP's Life Sciences & Health Care practice, and the director of the study.
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2008 to-date (July) summary
~$500+M in deals ~$225M in direct investment
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The market: size
Jain PharmaBiotech’s “Cell Therapy” market report: ~$25 billion (2008) [1] Michael Lysaght, PhD (Brown University):] $3.4 billion (2008) [2] A. Coury (Genzyme): ~$50 billion (25% of the non-pharmaceutical medical products industry at 2006). [2] Bionest Partners projects the global cell therapy market to post a 27% CAGR 2005 to 2015. [3] Proteus Venture Partners cites a 26%39% CAGR 2005-2020.
[1] Once his figures are discounted for “blood transfusion” products, devices, and reagents that we do not consider “cell therapy products” for the purpose of this analysis. [2] Lysaght, M., Jaklenec, A., Deweerd, E., Great Expectations: Private Sector Activity in Tissue Engineering, Regenerative Medicine, and Stem Cell Therapeutics. Tissue Eng 14, 305. 2008. Lysaght cites two 2007 publications of Chris Mason, PhD (University College London) confirming his projections for “size and scope of development-stage industry” and cites Greg Bonfiglio (Proteus Venture Partners) as having numbers close to his regarding commercial sale tallies. Lysaght also cites but disagrees with a 2006 publication by A. Coury (Genzyme) putting the cell therapy market at “25% of the nonpharmaceutical medical products industry or ~$50 billion. [3] Bionest Partners, “Cell therapies and tissue engineering” February 2007
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The market: companies by phase
Data suggests there are ~700 “stakeholder” companies involved in some material way in the cell therapy space; ~250 therapeutic “cell therapy” companies with approximately 344 products broken down into the following stages:
Phase Pre-clinical Phase I Phase II Phase III Commercial # of companies in 2008 78 77 89 32 68
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The market: commercial
~68 commercial therapeutic products* from ~65 companies
•
Including (a) ~17 stem cell transplantation “products” where clinics are transplanting stem cells in clinic outside the US for a variety of diseases, (b) ~14 skin products in various countries, (c) ~10 cartilage repair products in various countries – many of which are autologous chondrocyte transplant (ACT) products, (d) some multiple inclusions of the same product commercially**, and (e) 3 vetinary products.
Currently ~27 clearly distinguishable types of commercial cell therapies.
* “Products” is defined to include any therapy commercially available from one or more companies in one or more countries in the world ** Sometimes available through different companies in different countries, under different brand names, minor variations of the same product, same product for different indications, and/or second-generation products under a different brand name
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The market: 220+ Investors
~224 investors listed with one or more investments in a cell therapy
~286 investments in ~107 cell therapy companies
~23 pharma, biotech, or device companies listed with an investment in stem cells and/or cell therapy
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