Overview of the commercial translation of cell therapies and regenerative medicine by Greg Bonfiglio, Proteus Venture Partners
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1. Funding & Commercialization Strategies forRegenerative Medicine CompaniesGregory A. BonglioProteus Venture Partners"November 15, 2011 "
2. AgendaI. The RM Market Is Entering A New Era RM Has Made Great Progress But Serious Commercialization Challenges RemainII. New Economic Realties A Fundamental Shift in Biotech Economics The Valley of Death Is Expanding A New Capital Efficient Model Is RequiredII. The Role of RM Translation Centers Enabling Capital Efficient RM Technology Development Facilitating Collaborations in RM Technology Development The RMC: An International Coalition of RMTCs CONFIDENTIAL 2
3. Gartners Hype Cycle of Emerging TechnologiesVisibility" Technology Peak of Inflated Trough of Slope of Plateau of Productivity Trigger Expectations Disillusionment Enlightment Time" CONFIDENTIAL 3
4. RM Market: On 2nd Half of the Gartner CurveVisibility" Peak of Inated Trough of Slope of Plateau of Expectations" Disillusionment" Enlightment" Productivity" 2001: 3300 jobs, 73 rms, mkt cap > $2.5B" 2011 Shire Acquires ABH -$750M " 2001 Ortec FDA approved" 2000 Time Magazine: 2010 Cephalon & Mesoblast $2B Deal" TE No. 1 job" 2001 Dermagraft FDA approved" 2010 Dendreons Provenge Approved" 1999 TE bladders in clinic" 2001 Bush partial ban on HESCs" 1999 First FDA approved 2009 Obama Ends Ban on hESCs" TE product (Apligraf)" 1998 Human ESCs rst derived" Nov 2008 Genzyme-Osiris $1.25B Deal" 1997 Dolly the sheep" 2007 iPS Technology Developed " 1997 First FDA approved cell therapy (Carticel)" 2007 Apligraf - 200,000 Patients Treated" 2006 Carticel - 10,000 Patients Treated" 2002 ISSCR Founded" 1992 Geron founded" 2005 CIRM Founded" 1988 SyStemix founded" 1986 ATS and Organogenesis founded" 2003 UK Stem Cell Bank Formed" 1980 Early TE research (MIT)" 2002 ATS + Organogenesis le" Chapter 11" Technology Trigger" Stage of Development" Time" CONFIDENTIAL 4
5. RM Is Entering A New ERA RM Market is Maturing: Key Metrics Rapidly Expanding Market: Commercial Products $1.6B in 2010 400 on Market (Mostly Skin, Tools Media, & Devices); $20.0B in 2025 900+ in Development CAGR of 18.34% 44 Cell Therapies on Market $1B Revenues Dramatic Revenue Growth 400 in Development $130M in 2001 28 in PIII/Pivotal Trials $1.6B+ in 2010 1.2M+ Patients Treated with RM Products. Worldwide funding for research Increasing 320K+ Cell Therapy Patients $2.5B Now RM Companies $14B in 10 Years 600+ Cos involved in RM 50+ Public Cos; Clinical Programs Over 3600 Clinical Trials $8.7B Total Market Cap Over 400 ex-Oncology 225+ Private Cos CONFIDENTIAL 5
6. RM Market: Expanding Rapidly Dramatic Cell Therapy Revenue Growth CTI Revenues: $410M (2008) - $5.1B (2014)" Cell Therapy Industry: Billion Dollar Global Business With Unlimited Potential; " Regenerative Medicine; Chris Mason, David Brindley, Emily J Culme-Seymour & Natasha L Davie" CONFIDENTIAL 6
7. Global Company DistributionCanada UK24 firms 133 firms Europe (ex. UK) 3% 19% 14% 93 firms Asia 56% 2% 32 firms 5% Middle East 17 firms USA 386 firms 600+ RM companies worldwide!" CONFIDENTIAL 7
8. RM Has Made Great Progress, but .Challenges Remain R&D Manufacturing Creation And Characterization Of Technologies For Scale-up Optimal Cells For Therapy - Safe & Reliable Expansion Controlling Differentiation Pathways - Sterility Testing & Validation Standards For The Field - Process Control & Reproducibility; What is an iPS Cell? or MSC? Consistent Lots - Closed Systems Contaminant Free Cell Lines Product Characterization Safe & Reliable Expansion Safety; Identify; Potency Track Cell Migration & Engraftment Process Control : Process Is The - Imaging Technology And Product Biological Markers COGS; QC; & cGMP Immune Modulation Centralized Vs. Point Of Care CONFIDENTIAL 8
9. A Few More Challenges Regulatory& IP Landscape Business Issues Regulatory Environment Needs Business Model Questions Clarity - Capital Efficient R&D - Standards & Guidelines Are Evolving - Product V. Service Models - Characterization - Autologous V. Allogeneic - Safety / Efficacy / Consistency - Cross Border Inconsistencies Reimbursement Issues - Cost Savings Justification IP Landscape Is Treacherous : Patent Thicket Sales & Marketing - Fragmented Ownership; - Complex Channel Arrangements - Patents Proliferating Rapidly : 25% GAGR - Define Marketable Product - Inconsistent & Competing Patents: Invites Litigation - Educate Consumers Re: New Treatment Paradigms - Need Freedom To Operate Opinions CONFIDENTIAL 9