global watch usa 2006 report

8/10/2019 Global Watch USA 2006 Report

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GLOBAL WATCH MISSION REPORT

Advanced cell and tissuetherapies a mission tothe USA

SEPTEMBER 2006


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Global Watch Missions

DTI Global Watch Missions enable small groups of

UK experts to visit leading overseas technology

organisations to learn vital lessons about innovation

and its implementation, of benefit to entire industries

and individual organisations.

By stimulating debate and informing industrial

thinking and action, missions offer unique

opportunities for fast-tracking technology transfer,

sharing deployment know-how, explaining new

industry infrastructures and policies, and developing

relationships and collaborations. Around 30 missions

take place annually, with the coordinating

organisation receiving guidance and financial support

from the DTI Global Watch Missions team.

Disclaimer

This report represents the findings of a mission

organised by bioProcessUK with the support of DTI.

Views expressed reflect a consensus reached by the

members of the mission team and do not necessarily

reflect those of the organisations to which the

mission members belong, bioProcessUK, Pera or

DTI.

Comments attributed to organisations visited during

this mission were those expressed by personnel

interviewed and should not be taken as those of the

organisation as a whole.

Whilst every effort has been made to ensure that the

information provided in this report is accurate and up

to date, DTI accepts no responsibility whatsoever in

relation to this information. DTI shall not be liable for

any loss of profits or contracts or any direct, indirect,

special or consequential loss or damages whether in

contract, tort or otherwise, arising out of or in

connection with your use of this information. This

disclaimer shall apply to the maximum extent

permissible by law.

Cover image: Fibroblasts labelled for actin (red), microtubules

(green) and nuclei (blue) courtesy of Andrew E Pelling, Brian M

Nicholls, Michael A Horton, London Centre for Nanotechnology

and Department of Medicine, University College London


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1

Advanced cell andtissue therapies

a mission to the USA

REPORT OF A DTI GLOBAL WATCH MISSION

SEPTEMBER 2006

Report prepared by

Philip Aldridge Centre of Excellence for Life Sciences (CELS) Ltd

Rosemary Drake The Automation Partnership Ltd

Bo Kara Avecia Ltd

Mike Leek Intercytex plc

Chris Mason University College London

Nick Medcalf Smith & Nephew plc

Angela Scott Angel Biotechnology Holdings plc


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CONTENTS

EXECUTIVE SUMMARY 2

FOREWORD 3

1 INTRODUCTION AND 4

OBJECTIVES

2 INFORMATION FROM COMPANY 6

VISITS

2.1 Manufacturing and automation 62.2 Distribution 14

2.3 Process validation and regulation 16

2.4 Commercialisation 23

3 STRATEGIC IMPLICATIONS FOR 27

THE UK

3.1 The state of the Californian industry 27

3.2 The Californian company position 29

on Europe

3.3 A strategy appropriate for the UK 30

4 CONCLUSIONS AND 34

RECOMMENDATIONS

4.1 Conclusions 34

4.2 Recommendations 34

APPENDICES 37

A Acknowledgments 37

B Mission participants 38

C Terms of reference 47

D Company visits 48

E Glossary 56

F Sources of information 64

G List of exhibits 68

This report describes the outcomes from amission to Californian companies working in

the field of advanced cell and tissue therapies

and draws conclusions for UK policy.

After a brief introduction which sets the scene,

Chapter 2 describes the technology seen and

the issues it raises for all those concerned

with commercial activity in the field.

Chapter 3 addresses the lessons from themission in terms of the state of the

Californian companies and their views of the

UK. It then examines the issues raised for UK

strategy beginning with a summary of some

recent actions and how they might be

enhanced. That is followed by an analysis of

how the National Health Service (NHS) could

relate to UK company activity and how the

research councils could contribute.

The above topics lead to a number of

recommendations for future actions which

are dealt with in the final chapter.

The report is followed by appendices which

include a list of the mission participants and

the terms of reference plus acknowledgments

to those who made the mission and this

report possible. The companies visited are

identified and finally a glossary and sources of

information are provided.

2

ADVANCED CELL AND TISSUE THERAPIES A MISSION TO THE USA

EXECUTIVE SUMMARY


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3


FOREWORD

The UK faces major challenges in the field ofhealthcare. Firstly, in common with many

countries it must meet the prospect of a rapid

increase in the old age dependency ratio. This

will bring a greater demand for all kinds of

healthcare but particularly for the treatment of

degenerative diseases. The second challenge is

that many countries, and not just developed

ones, have recognised that healthcare

technologies are worth assigning top priority:

they are knowledge intensive and can justify a

high price if they replace current poorer

alternatives with a better outcome. If the cost

comparison of old and new technologies is a

fair one taking account of social services and

home nursing needs it will demonstrate over

time that the new approaches are of lower cost

as well as greatly enhancing the quality of life.

Because the UK must deal with the challenge

of ageing and is unlikely to be able to

compete globally on less sophisticated

technologies, the sector of advanced cell and

tissue therapies is a crucial one for which to

build a coherent short and longer term

strategy. Part of that plan must be to

understand progress in other countries.

In 2004 a Department of Trade and Industry

(DTI) Global Watch Mission visited countries

in South East Asia and was impressed by the

scale of activities and their ambitions. To

complement that mission the present one

visited California which is at the forefront of

US and global activities on particular

advanced cell and tissue therapies.

The focus of the visit was Californiancompanies and the mission team had experts

on the range of issues that start-ups in the

new field face. I am immensely grateful to all

of them for the time they gave to pre-briefing,

the punishing schedule of visits and their work

on the report. I am also very grateful to

bioProcessUK the sponsoring organisation and

its Technical Director Malcolm Rhodes who

accompanied us, to UK BioIndustry

Association and DTI staff and to the local UK

Trade & Investment and UK Science &

Innovation teams in California whose hard

work laid the foundations for the visits. Most

of all I would like on behalf of all those

involved to thank our American hosts for their

openness, friendliness and willingness to give

us time and to entertain us. The visit has

already strengthened ties and shown

common interests. We share a conviction that

the new field can bring real benefits to

people.

Dr Chris Mason

Mission Leader

University College London

November 2006


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This document describes conclusions of aDTI Global Watch Mission to California to

explore the state of advanced cell and tissue

therapy companies. The California Institute

for Regenerative Medicine (CIRM) plus

14 companies were visited in San Francisco

and San Diego, and a further 80 stakeholders

in the sector attended a reception at the

British Consulate General. The report

describes how companies perceive key

commercial, technical and regulatory

issues. It concludes with an analysis of

the strategic implications for the UK and

recommendations for action.

The activity of the largest companies visited

was centred on human embryonic stem (hES)

cell-based science and technology (S&T), and

CIRM, with a planned $3 billion (~1.5 billion)

research programme, is focused on the same

area at present, given the ban on federal

funds for derivation of hES cells. The term

regenerative medicine is useful in

distinguishing the activity from more

established biomaterial-centred technology.

Therefore we have used regenerative

medicine as shorthand in this report though

the expertise of the mission members is

wider and the conclusions apply to all

advanced cell and tissue therapies. The

mission did not include companies producing

agents such as erythropoietin, which has a

relevant impact on stem cells, because the

technology related to such materials is that of

molecular biopharmaceuticals.

Regenerative medicine has the potential to

become both a key commercial activity for the

UK and a crucial contribution to dealing with

the needs of a population with a growingproportion of older people. With coordinated

management it could become a vital element

in the future NHS with the public sector as akey customer enabling growth of companies.

They in turn could provide a quality of

therapeutic material that the healthcare

industry is highly skilled at achieving. The

necessity for a close relation between clinician

or surgeon and the bioprocessor could also

make this an embedded activity which would

be less likely to be lost from the UK than a

conventional industry.

The field of regenerative medicine addresses

three of the policy challenges posed by the UK

Government Treasury to the research councils:

A rapid increase in the old age

dependency ratio

An acceleration in the pace of innovation

and technological diffusion

The intensification of economic

competition

As people live to older ages and need to be

sustained in an active independent state,

regenerative medicine will have a crucial role.

The commercial activities associated with it

are inherently highly knowledge intensive both

in the goods provided and the services

needed to deliver them. It is going to be

increasingly difficult for the UK to compete on

lower cost goods with a high labour input.

Regenerative medicine is by its nature high

value and, though labour costs are currently

high, the technology is susceptible to the

adoption of automation and the associated

clinical services are often highly sophisticated.

There are already commercial productsaddressing severe burns, chronic ulcers and

damage to the cartilage of the knee.

1 INTRODUCTION AND OBJECTIVES

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Current research suggests that progress canbe expected in the next few years with the

treatment of heart failure and some

neurological conditions, for example,

Parkinsons disease.

For these exciting developments to come to

fruition it will be vital to understand the global

situation. This report describes a visit to

California which currently leads US activity in

key parts of the field and hosts the most

developed commercial activities in any country.

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Exhibit 1.1 Mouse embryonic fibroblast cells (MEFs) are presently used as feeder cells for culturing embryonic

stem cells (Primogenix Inc)


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2.1 Manufacturing and automation2.2 Distribution

2.3 Process validation and regulation

2.4 Commercialisation

This chapter addresses the technical,

commercial and regulatory information that

the mission team heard about during the

company visits. As is the requirement of

Global Watch Mission reports, individual

companies are not identified in terms of what

is described here and confidential information

is excluded. However, the visit reports

provide a valuable insight into the challenges

which all regenerative medicine companies

and their suppliers face. They also indicate the

kind of approaches which will help in

addressing these issues. The specific

Californian companies are described in

Appendix D.

2.1 Manufacturing and automation

2.1.1 Manufacturing overview

Generally the primary systems being used to

manufacture clinical product where cell

expansion was required were standard

tissue culture systems such as T-flasks for

initial expansion from cell banks and either

roller bottles and/or cell factories for the cell

production stage. These were incubated in

standard tissue culture incubators or warm

rooms. Where cells could be grown in

suspension culture, eg stem cells and

progenitor cells from peripheral blood

mononuclear cells (PBMCs), disposable bag-

based bioreactors were used. The latter

provided a scalable system for one of the

companies visited, which noted that shouldone of its universal products (an allogeneic

therapy based on cell enrichment from

PBMCs) achieve blockbuster status, acommercial manufacturing facility would

only require scale-up to batches of hundreds

of litres capacity in a dedicated

manufacturing stream.

A small number of companies visited were

developing products which avoided the need

for cell expansion and relied on cell

enrichment only to deliver therapeutically

useful doses of the cell therapy product.

A schematic of the cell product systems

employed is provided in Exhibit 2.3.

Cell factory scale-up from single to triple units

was generally thought to be without any major

issues. However, a number of companies

visited indicated that further scale-up to higher

multiple layer units was limited by theformation of unwanted gas and temperature

gradients. This was an area they would address

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2 INFORMATION FROM COMPANY VISITS

Exhibit 2.1 Good Manufacturing Practice (GMP) cell

therapy production incubator loading (Cognate

BioServices Inc)


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following process optimisation during clinical

development of their product with the

manufacturing system selected and would be

addressed prior to Phase 3 clinical

manufacture. One of the more advanced

companies in bioprocess terms indicated that

cell factory systems were not viable longerterm and it would ideally like to eliminate them

as soon as possible. There is an opportunity

here for the further development either of the

cell factory system or an alternative disposable

system that scales easily.

Scale of operation was primarily driven by the

therapeutic indication targeted by the cell

therapy product and potential market

opportunity and thus in some cases use of

systems with limited scale-up potential was

not considered an issue. Generally, with all

companies visited it was clear that scale-up,cost of goods (CoG), market and

reimbursement were being considered at an

early stage of product development but not at

the expense of delaying proof-of-principle early

clinical trials. Automation of the manufacturing

process alone was thought insufficient to

achieve longer term CoG targets, with

significant process development being

required/planned during clinical development.

With all of the manufacturing systems

described above, there was a strong focus on

the concept of maintaining a closed system

within the Good Manufacturing Practice

(GMP) facility throughout the manufacturing

process. This was facilitated by non-invasive

process monitoring, eg visual examination of

the cells, by limiting sampling to passage

stages and by using custom sterile welding

and connect technology. In some cases

proprietary integrated bioreactor systems had

been developed which addressed sampling

and further processing requirements in a

purpose designed system. Although these

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Exhibit 2.2 GMP cell therapy production incubator

checking (Cognate BioServices Inc)

Exhibit 2.3 Overview of typical cell product manufacturing systems

Cell bank

Tissue

sample

Enrichment of

desired cell

fraction

Primary

expansion:multiple stages

Production

stage: roller

bottles or cell

factories

Bulk cell product

Bulk cell productExpansion

Bulk cell

product


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could be beneficial there were concerns that

they could increase CoG and introduce risk in

the future in terms of cost and security of

supply of the proprietary bioreactor system

when compared to simpler off the shelf

disposable bioreactor systems.

2.1.2 In-house manufacturing versus

outsourcing

All the companies visited during the mission

that had a pipeline of cell therapy products

either had in-house GMP manufacturing

capability, typically simple single or multiple

clean room facilities for cell banking and cell

processing, or were considering establishing

in-house GMP manufacturing in the nearterm. Two of the companies visited were cell

product contract manufacturing organisations

(CMOs). One had an established track

record in this area whilst the other was a

more recent entrant to the field and was

refocusing itself by offering capacity into the

CMO market.

The experience of the CMOs suggested that

the decision to manufacture internally rather

than outsource during the early phase of

product development was not driven primarily

by cost of product. It was more a need to

avoid technology leakage, a belief that only

they could handle their specific cell product,

or that by manufacturing in-house they could

more easily handle potential regulatory

approval delays, eg Investigational New Drug

(IND) applications or approval by Institutional

Review Boards (IRBs). Typically, in-house

manufacturing costs for an allogeneic product

for Phase 1 clinical trials were at a high level,

described by companies visited as closer to

that typical for autologous products. This was

seen as an area that would be addressed

later, during clinical development.

Both CMOs visited indicated there was a

significant market opportunity in this area for

companies with an established track record

of manufacturing both autologous and

allogeneic cell therapy products. Their

experience of the market to date was a split

between the two cell therapy product classes

in the ratio of 50:50. One of them noted their

customer base was a mixture of clients that

routinely outsourced clinical manufacture and

other activities and clients that had attemptedinternal manufacture but for various reasons

had failed and had then looked at the services

of a specialist CMO for process development

and manufacturing.

The driver for companies partnering with

CMOs, in addition to accessing specialist

skills and know-how, was avoiding having to

devote capital towards GMP manufacturing

facilities, particularly when they would not befully occupied. In addition, one company

noted that venture capitalists generally were

not keen on funding companies at an early

phase of product development which were

capital-intensive, and preferred to reduce risk

going forward. This was due to a concern

that, should the activity fail, a significant

proportion of the value could not be recouped

from disposal of the manufacturing assets

and equipment.

It was interesting to note that both CMO

companies visited had existing operations on

the East Coast of the USA but had made the

initial decision to expand their manufacturing

capacity in response to existing demands in

California. However, both CMOs also

anticipated the potential impact of Proposition

71 (see section 3.1) on the number of cell

therapy products and the increased market

size as a direct result of the enormity of

additional state funding.

A number of companies visited indicated that

they would outsource early clinical

manufacturing but may consider bringing

manufacturing in-house for commercial

supply. Geographic location of manufacturing

was not thought to be a significant issue

particularly for allogeneic cell therapy

products especially if there were no

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significant shelf-life constraints. Shipment of

product on dry ice or even liquid nitrogen was

not seen as a geographic barrier to the

location of manufacturing versus end use.

Ultimately, the view of one company visited

was that if the manufacturing process could

be automated, and access to specialisttechnical skills was not required, commercial

manufacturing could be located in any low

cost geographic location.

2.1.3 Translation strategies

Distinct approaches to identify stem cell

and/or progenitor populations of cells were

exemplified by two established stem cell

therapy companies.

The first approach was a proprietary platform

technology invented by an hES cell company as

a means of rapidly identifying and isolating

novel embryonic cell lines but without infringing

on the all encompassing WARF (Wisconsin

Alumni Research Foundation) embryonic stem

(ES) cell patents. This technology was

developed from its conception to be easily

scalable. It is complemented by the ability of

the company to accelerate the differentiation of

cells from hES cells. For example, product

candidates discovered by the platform

technology are tested at a very early stage for

the capacity to be scaled up in roller bottles

before being designated a product candidate.

The company has already announced the

isolation of its first line, embryonic smooth

muscle cells which may have potential clinical

application in heart disease.

A different approach was exemplified by

another of the companies visited. It is

developing neural stem cells using a proven

approach to stem cell discovery and isolation.

This is based on use of proprietary panels of

monoclonal antibodies (MAbs) and high

speed cell sorting to establish proprietary

populations. They had found that conventional

cell culture techniques were requiring up to

100 days of culture to select the cell

population required. By using high speed cell

sorting they had reduced the time to do this

and had increased throughput.

The area in which their approach differed from

that used by others was that they cell sorted

aseptically in a GMP facility. Challenges suchas potential for cross contamination, and

adulteration from both direct and indirect cell

product contact materials and surfaces, were

overcome by a combination of bespoke

redesign of the cell sorting equipment and

the enclosures that the equipment was sited

in, and substitution of cost effective parts, eg

the flow path was considered as a single use

disposable. Cell sorting was seen as a viable

bioprocess if the number of cells requiredwas small, viability was not compromised by

the high pressures to achieve high speed cell

sorting, cell size was compatible with

fluids/nozzles, and cells sorted at the

beginning of a run were the same as those

isolated at the end.

A key advantage of the latter approach was

that once cells had been sorted under GMP

they could be further expanded and GMP cell

banks manufactured and characterised without

having to attempt to replicate the derivation of

a required cell line, for example, following

research and development (R&D) work using a

research cell line. The ability to sort cells at

high speed at an early stage clearly provides

an advantage in reducing research translation

and product development risks.

The company using GMP high speed cell

sorting had reviewed its strategy with the

Food and Drug Administration (FDA). The

regulatory focus was on reproducibility and

comparability. The company also indicated

that its quality function had a high degree of

involvement at every stage of development

including discovery and it believed that recent

FDA thinking on concepts such as Quality by

Design and Design Space will have

significant potential to influence cell-based

therapeutic products.

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Getting involvement of a quality function early

in the development of a cell therapy product

and in the development of its manufacturing

process was seen by the mission participants

as a key message for organisations

developing cell-based therapies and tissue

engineering products in the UK.

2.1.4 Raw materials

A vital process factor being addressed by

most of the companies visited during the

mission was the variability seen with some of

the raw materials. With autologous cell

therapy products, processes developed were

required to be able to handle inherent

variability, such as starting tissue mass,genetic variability and growth differences

between cells extracted from different

samples and/or patients.

An area that required a strategy to be defined

early was the sourcing of GMP grade MAbs

used to support cell sorting as well as

bioactive molecules or other manufacturing

components. MAbs were usually employed

at therapeutic grade and at the corresponding

cost. Future supply could present difficulties

since the licensing arrangements were

usually predicated at these low volumes. The

approach to alleviate issues in this area was

to form collaborations and partnerships

though even this route could potentially

impact on longer term CoG. Clearly, the

message here for companies in the UK is to

consider the security of supply and costs of

raw materials used as the research process

begins to be defined, and continue to

re-examine this area as the manufacturing

process is developed and optimised.

Feedback from the companies visited

indicated that, universally, antibiotics are not

used to avoid regulatory issues in this area.

Also of concern was the potential to overlook

endotoxin producing organisms in a

manufacturing process if antibiotics are used

since cell manufacturing processes typically

have no specific endotoxin removal step.

Lot-to-lot variability of some raw materials

was a major concern. In this case the

strategy adopted was to manufacture these

in-house or seek CMOs to manufacture

them. Alternatively, process development

work was undertaken to eliminate as manyundefined media components as possible.

However, changing raw materials required a

significant investment in testing and

characterisation to understand the impact of

the changes. It was evident that there was at

least an appreciation of and in some cases a

focus on ultimate CoG and economics of

manufacturing versus reimbursement within

most of the companies visited. One of the

CMO companies visited with significantexperience of manufacturing a large number

of cell therapy products did indicate that most

US companies did not consider CoG and

reimbursement early enough, a situation

generally similar to that in the UK and one

which requires addressing.

The use of mouse embryonic fibroblast cells

(MEFs), better known as feeders, to grow

hES cell lines was being addressed by one of

the companies visited. It had developed

methods to grow cells without mouse

feeders, had filed patents and avoided the

conventional use of media conditioned with

mouse feeders for the majority of its projects.

Some of the companies visited had indicated

that their work was based on use of the

limited number of ES cell lines approved by

President Bush. One companys view was

that the biggest issue for companies in the

USA was the intellectual property rights (IPR)

of the WARF patents (eg US 5843780) which

unusually had both multi-composition of

matter and methods. Also, even the so-called

Presidential lines are thought to have low

level microbial contamination due to their

origin in research laboratories.

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2.1.5 Minimal manipulation

manufacturing

An alternative, if not unique, manufacturing

route to cell therapy commercialisation was

provided by one of the companies visited.

The therapeutic cell product market isreached by providing equipment and

consumables for cell therapy manufacture at

hospital sites. Technology is based on the

enrichment of stem and progenitor cells

from adipose tissue. Original equipment

manufacture, distribution and servicing of

the next generation device and consumables

are being handled via a 50:50 joint venture

(JV) with a major established global medical

devices company.

These companies are initially targeting heart

failure secondary to acute myocardial

infarction (heart attack) and chronic ischemia

(angina) and have developed a proprietary

device to allow operating theatre cell

processing such that adipose tissue can be

processed and the autologous cell therapy

product be available for administration to the

same patient within one hour of collecting

the initial tissue sample. Manufacturing has

been simplified to an automated cell

processor/centrifuge with predefined

processing algorithms requiring the operator

to interface with the manufacturing system

via just three buttons.

However, although the final device

appeared simple at least in terms of

operability, product development had

involved 30-40 engineers and scientists to

develop the tissue and liquid handling

systems, microfluidics, cell handling/biology

and control systems over a significant

number of years. The development of the

medical device potentially provides a faster

route to market. The system is using the FDA

510(k) pre-marketing approval route in the

USA with a target of full approval in 2007.

2.1.6 Commercial manufacturing

Only two of the companies were in later

phases of clinical development or operating

commercial manufacturing facilities. One of

the CMOs visited had manufactured cell

products for clients at Phases 1, 2 and 3 andwas now in discussion with a client in terms

of commercial production. Generic

information on the challenges faced by

companies as products moved to later clinical

development, process validation and

preparation for commercial manufacture was

therefore limited.

Only one of the companies visited was

moving to manufacturing a licensed productfollowing acquisition of the product licence

and an existing manufacturing facility. It was

fully recommissioning the manufacturing

facility after a short shutdown period. This did

provide some important messages/learning,

albeit based on one facility and one product.

The facility was originally designed to produce

a wound care tissue engineered product to

support a large market. However, low market

penetration resulted in the facility operating at

significantly below capacity. Its high-cost

location coupled with operation below

capacity had influenced CoG significantly. CoG

was primarily driven by the high fixed costs

associated with the facility. One important

message was that, with hindsight, if the

company were to establish the facility again it

would be planned for incremental expansion

and be located in a low-cost location.

Additional issues faced were that the batch

manufacturing time was long (12-13 weeks),

requiring continuous operation of the facility

and accurate predictions from the marketing

group on product requirements. Routinely,

during normal operation, full facility shutdown

was problematic, incurring an estimated 2-3

month facility restart-up time.

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Consequently, a number of operational

strategies had been implemented to reduce

impact, eg initial cell expansion could be

initiated at risk and abandoned if additional

manufacture was not required, and significant

redundancy had been built into the facility

both in terms of some of the utilities and keyequipment as well as building up inventory of

materials such as water for injection (WFI)

and autoclaved parts to allow for breakdowns.

Routine facility maintenance and

requalification activities were scheduled into

short, typically weekend, time slots.

Key learning for cell product development

companies in the UK from this would be to

consider and understand overall commercialmanufacturing strategy as early as possible and

focus process development and automation

efforts during development to eliminate or

reduce any key factors likely to influence facility

operation and CoG for the product.

2.1.7 Automation

The process steps required to produce a cell-

based therapy are highly variable, depending

on the cell type and intended therapeutic

application. The steps can include:

Biopsy

Cell separation/isolation/enrichment

Cell expansion

Cell encapsulation or seeding of a scaffold

Packaging

Cell freezing

Shipping

Generally the companies visited were using

standard cell isolation or separation equipment

and standard tissue culture vessels such as

T-flasks, roller bottles and cell factory systems

for cell expansion and processing. The two

CMO companies had experience of a broader

range of culture systems, including wave

bioreactors for suspension cell culture,

reflecting their need to serve a wide client

base, but neither CMO had yet invested in

significant levels of automation.

There are significant process challenges

associated with automating and scaling up

these steps, particularly for autologous

therapies, where each patients cells

represent a small batch (ie scale-out) and

there is inherent biological variability in the

source material. Most companies expresseda strong preference for allogeneic over

autologous therapies for these reasons and

because allogeneic therapies can be

manufactured on a larger scale, which is

economically much more attractive.

Cell expansion was identified as the highest

priority for automation because it is labour

intensive, involving a lot of manual aseptic

processing over many days or even weeks,and requiring repeated cell feeding and

passaging, harvesting then seeding into a

new culture vessel. Cell freezing (including

cell banking) and cell separation were also

mentioned as areas where automation may

be required in the future.

All the companies visited recognised that

automation would be necessary to enable

cost effective process scale-up and/or scale-

out. The principle reasons are that it removes

people from the process and so will reduce

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Exhibit 2.4 GMP cell therapy production cell

harvesting (Cognate BioServices Inc)


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CoG where labour is a major cost

component, which was true for most of the

companies. Automation also was perceived

as improving staff productivity; for example,

several companies mentioned that

recruitment and especially retention of skilled

staff was an issue and thought this would bean increasing challenge as the company grew.

Automation also reduces potential sources of

process contamination or errors.

Standard culture vessels, flasks and roller

bottles are still used in commercial application

in the biologics industry for animal cell and viral

culture, particularly for certain anchorage

dependent or fragile cell lines that are difficult

to grow in a bioreactor. These culture vesselsare therefore a potential route into production

for some cell-based therapies. Changing to

bioreactor technology may require substantial

time and effort in process optimisation,

whereas scale-up by increasing the number of

vessels is not a major process change, and

may be more suited to the smaller batch size

typical of low volume cell therapy products

such as for treatment of rare neurological

diseases. There may also be regulatory

considerations to take into account, such as if

clinical material has been produced in flasks or

roller bottles, or culture conditions have been

optimised using these vessels, which may be

a barrier to making significant process changes

2.1.8 Automation experience and

expectations

There was limited direct experience of using

automation for cell processing in the

companies visited, with the exception of a

company that recently took over the large GMP

facility (35,000 ft2 3,250 m2) that was built

and commissioned by another company in the

1990s. Significant investment had been made

by the earlier company in automation including

developing custom equipment for product

packaging and for processing the custom

cassettes in which the cells and support are

shipped. However, it was not successful

commercially, partly attributable to the high

fixed cost of the large facility necessitating the

sale of large numbers of units.

The production process takes approximately

12-13 weeks from the start of the expansion

of the fibroblast cells to quality control (QC)test and release. The adherent cells grow in

roller bottles, and two robotic systems are

used to process large batches of up to 500

bottles per day. The robots are used for

aseptic processing of the cells through all

stages, including feeding and passaging, that

is harvesting cells and reseeding to expand

cell numbers. The resulting cells are then

seeded onto a support scaffold. The robotic

systems give improved process consistencyand reproducibility.

Most other companies were either at too

early a stage in their product or process

development to consider investing in

automation, or intended to outsource

production. At least two companies said they

plan to automate cell expansion in roller

bottles in the next two years.

2.1.9 Adoption of automation

The possible business models range from

central processing facility to distributed

regional centres. The model chosen has a

major impact on the type of processing

equipment and automation that is

appropriate. It is difficult therefore to make

appropriate choices about routes to scale-up

if a company has not yet developed its

business model.

Several of the smaller companies identified

the scale of financial investment required as

the main barrier to adoption of automation.

Others believed that it was too early in their

development process for them to be able to

specify appropriate automation. Process re-

engineering takes significant resource and

time, as well as the regulatory consideration.

It was understood by all that during the early

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stages of development scientists are making

significant choices which subsequently lock

them into a particular technology that may be

extremely difficult or costly to automate or

scale up for production. Early involvement of

engineers was not a priority, the major driver

being speed to Phase 1, raising more financeas a result and then re-engineering if

required. This is an important issue for all

stem cell and regenerative medicine

companies to ensure that potential scale-up

or scale-out routes are considered early, as

this can have a major impact on commercial

potential or even make the difference

between commercial success or failure.

There was little evidence of sophisticatedautomated equipment for bioprocessing

being used by the companies visited, with

one exception. Generally companies were no

further advanced than their equivalent in the

UK and Europe, and few described specific

plans for how they would scale up.

2.2 Distribution

2.2.1 Overview

The regenerative medicine industry has now

reached the point that it must consider the

issues of cryopreservation, shipping,

distribution and end-point use as key

components in its aim to bring these

therapies successfully to the clinic. It is

imperative that these issues should not be

considered as separate processes at the end

of the development/manufacturing process

but should be an integral part in the whole

regenerative therapy process.

Issues to be considered include identifying

which methods of shipping have been

developed to ensure final product consistency

and delivery in order to achieve the required

clinical needs while still maintaining cell

viability. Furthermore, there are requirements

for consistent distribution and delivery of final

products to distant geographic sites; for further

processing post-production to prepare the final

product at these distribution sites; and any

requirements to involve training in final

product handling and delivery methods for

end users. There may also be a need for

this training to be formally implemented to

ensure consistency in meeting regulatoryrequirements. Those providing stem cell

therapies need to be aware of new

developments in cryopreservation technologies

that involve the use of new materials and

equipment to achieve the cell type-dependent

requirements for storage and shipping without

compromising GMP standards.

Although storage and distribution of stem cell

therapies may be viewed as separate entitiesit is more realistic or practical to consider that

shipping of cells is simply mobile storage.

2.2.2 Cryopreservation

All the companies visited deployed

either vapour phase or liquid nitrogen

cryopreservation for their master cell banks

(MCBs). However, for storage and distribution

of their cell-based products, a variety of

techniques and temperatures were being used.

The majority shipped either on dry ice or used

bespoke shipping cartons (shippers). Individual

products are first packed in a sealed sterile

inner pack complete with transport media. This

sealed pack is then placed in a secondary

shipping carton which is heavily insulated and,

through the use of phase-change packaging

material, can maintain the product within a

narrow predetermined range of temperature for

prolonged periods (3-4 days). The advantage of

this system is that it is in common use and has

been extensively tested by shipping companies

and airlines globally. However, transportation of

samples in these conditions has its limitations

and must comply with local hazardous material

transportation laws.

One common problem of shipping products

on dry ice or liquid nitrogen is the

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requirement for cryoprotection of the cells.

The traditional use of dimethylsulphoxide

(DMSO) as a cryopreservant has limitations

due to it being associated with potentially

severe adverse reactions upon reinfusion into

patients and is restricted by regulatory

authorities, therefore suitable alternatives arebeing sought and include naturally-occurring

disaccharides such as trehalose.

The best example of cryopreservation was

from a company with a wealth of experience in

tissue-engineered products. The company

manufactures a live product for use in wound

repair and has FDA approval for the treatment

of diabetic foot ulcers. For distribution, the

product is kept frozen at -70C using DMSO asa cryopreservant (approved by FDA). The

product uses a biodegradable mesh scaffold

which provides product stability during

shipping and aids final product application to

the patients wound. Shipping is carried out in

unique shippers which were custom designed

by the company, extensively validated and

capable of maintaining temperature for over

100 hours, thus reducing logistical limits for

the location of clinics using the companys

product. The shippers have additional in-built

design features that allow use at the end-point

clinics as short-term storage devices where

suitable low temperature freezers are not

available; this is an important issue ensuring

that lack of correct storage conditions does not

become a limiting factor.

2.2.3 Shipping

Recent advances in temperature-controlled

packaging have seen the development of new

types of systems. These use novel

technologies to provide a closed system

package that can maintain 2-8C for up 72

hours and would be ideally suited for stem

cell-based regenerative therapies which can

be stored and shipped at these temperatures.

The technology relies on a prepackaged unit

which, following push-button activation,

causes evaporation of a small amount of

water under low pressure creating a cooling

effect that is seven times more effective than

ice packs to cool and maintain the package

interior at the required temperature. As this is

an active process, the package has the ability

to adjust to variations in ambient temperaturewhich can occur during shipping and

distribution and appears to be a significant

advance over conventional shipping methods.

Internal temperatures can be data-logged and

the process validated.

2.2.4 Local production

Two of the companies visited by the mission

team have taken novel alternative approaches tothe issues of storage, shipping and distribution.

For example, one company has developed

portable equipment that can enrich stem and

precursor cell populations from adipose tissue

(fat) for treatment of cardiovascular disease and

return them to the patient in around an hour, as

described in section 2.1. By fitting its equipment

with single-use disposable components the

company has provided an ease-of-use system,

allowing change of consumables between

patients and the potential to use the equipment

for multiple different cell-dependent applications.

It has developed this in partnership with a major

technology and engineering company with a

proven track record in technical manufacturing,

an established distribution network and

extensive follow-up maintenance capabilities.

Furthermore, a second more compact version

of this equipment is currently under

development. There is also the potential to store

spare stem cells isolated from the patient for

future autologous therapies, and the company

planned to address the cryopreservation issues

associated with this as they arise.

2.2.5 Future storage and distribution

Based upon the technologies currently

employed by the regenerative therapy

companies visited, a number of suggestions

for the future were evident with respect to

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allowing improvement on existing

cryopreservation, shipping and distribution

methods to achieve optimum conditions for

the products arrival at the clinic. These include

further development of current

cryopreservants which are GMP compliant.

The next generation of cryopreservants shouldideally provide product stabilisation that would

assist in global shipping and distribution, allow

resuscitation of high numbers of viable cells

from storage, and replacement of any

components which are not fully compliant

with the regulatory authorities. Certain

autologous processes that do not require

cryopreservation may employ interim stages

of quality release from the end of

manufacture and throughout the distributionprocess. Otherwise, it may be preferable for

most processes to undergo quality release at

the point of manufacture rather than at the

end-point clinic, placing an emphasis on

effective shipping and distribution processes.

In autologous processes where time may be

at a premium, rapid sterility (including

mycoplasma testing) has proven invaluable

and is now being accepted by regulatory

authorities provided it is carried out in parallel

with standard tests. A number of

manufacturers are developing more

sophisticated rapid sterility tests to address

this need, at least one of which is already in

use with a cell therapy product, and some of

these have advantages over polymerase chain

reaction (PCR)-based detection methods as

they selectively detect only viable

mycoplasma. The current trend for rapid

release testing in the manufacture of

autologous cell therapies will facilitate the

release of product for patient treatment;

however, there is a requirement that these

tests are fully validated against standard US

pharmacopoeia testing methods.

Shipping equipment should ideally be a fully

monitored closed system in order to simplify

use and increase safety. Disposable

compartment components should be used to

minimise cross-contamination, and robust

equipment employed that can be used by any

courier or airline. There must also be

compliance with relevant hazardous material

transportation legislation. Important factors to

achieve will be to data log as well as validate

the storage and transport systems allowingany risk reduction to be implemented and

ensure final product consistency. Final

product delivery systems should also be

engineered to provide ease-of-use at the

clinic. There should be cost-effective product

design where the costs of the deliverable

ideally should not outweigh the costs of the

process, and the delivery systems should

have low maintenance commitments.

The advent of these new stem cell therapies,

their progression to the clinic and their

predicted success will rely not only on their

scientific merits but on robustness of final

product formulation, effective and precise

shipping and distribution, and ultimately

ease-of-use in the clinic. These should be

major considerations for regenerative

medicine companies moving their products

forward to the clinical setting in the future.

2.3 Process validation and regulation

2.3.1 Overview

When any bioprocess is executed it is

important to be confident that the product

will conform to the specification registered.

During processing, natural variations in the

process features will cause variations in

outcome. There are two ways of assuring that

these variations are acceptable:

The first method is to verify that all is well

during or after the step has occurred by

applying direct measurement. This is the

act of verification and an example would

be the confirmation that a cleaning

operation had been successful by taking

surface samples at all critical points in a

piece of apparatus and testing for residues.

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The second method is used where

verification cannot be applied or where it is

not practical. In the example above it could

be the earlier development of a cleaning

procedure (complete with verifiable

parameters such as temperature, duration

and reagent quality) which, if appliedcorrectly, was known to produce an

acceptable level of cleanliness.

Knowledge of critical control points (CCPs) for

any given process acts as a barrier to entry

for competitors so it was unsurprising that,

for almost all of the companies visited, the

exact identity of the CCPs of each process

was proprietary information and would not be

disclosed. However, some patterns wereevident. Every company visited expressed the

view that the first principle of process

validation should be to ensure patient safety.

The processes fell within two broad categories:

those that did not require control under a

manufacturing quality system (basic research)

and those that required an auditable quality

system related to manufacture. In the latter

category, the three systems that applied were:

Good Tissue Practice (GTP)

Good Laboratory Practice (GLP)

Good Manufacturing Practice (GMP)

Process validation applies with varying degree

to each of these three quality systems but

most particularly to GMP. In order to satisfy

claims to GMP it is necessary for a

manufacturing company to understand its

process, to have identified the CCPs and to

have designed a process around the CCPs

such that, under normal variation in

manufacturing controls, the product remains

within the desired specification.

It was evident that FDA had expectations that

had strongly influenced both process design

and the subjects that had been investigated

the most during development. Broadly these

subjects were:

Removal of unwelcome sources of variation

in the raw materials for the process

Rigorous investigation of the process so as

to provide compelling evidence that the

industry understands the process in detail

Control of process variation using in-

process controls

2.3.2 Raw materials

Natural raw materials were universally

viewed as an unwelcome source of

unpredictability in the processing. Solutions

to the problem comprised:

The removal of animal-derived serum or

other materials of natural origin from the

growth medium to give processes based

on defined media (many of the companies)

Exclusion of feeder cell layers from

animal sources (usually murine) (all the

hES cell companies)

Replacement of a natural raw material with

one made in-house from recombinant

technology to a predictable specification

(one company)

None of the products affected by these

developments was yet on the market; however,

the implication is clear, ie it is important fully to

define the feedstock. Once the precedent is set

for a commercial product that is made by a

process that contains no highly variable natural

raw materials then the bar will be raised for

competitors. In the event of any disease scares

in the natural source of the raw materials it will

be unlikely that parallel products which still

contain such components will be acceptable

anywhere and the regulatory position will be

toughened. This subject represents a barrier to

entry for less well established companies but it

is also a potential theme for precompetitive

collaborative research in UK industry, eg the

creation of reliable libraries of serum-free media.

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2.3.3 Cell source and banks

There can be a problem when working with

human stem cell lines as they may grow at

hugely different rates when harvested from

different sources. For this reason some

researchers had sought to developimmunologically-acceptable lines that could

then be used as a single bank of known

(predictable) behaviour. At least one such

master line had been created. Some work on

the feasibility of establishing immunologically

simpler cell libraries had also been

undertaken, not single cell lines but a move

towards a small set of validated lines to cover

the whole patient population instead of a fully

autologous product. The aim here was toproduce one homogeneous genetic

background to the cells including only helpful

alleles. This subject (banks of cells with

reduced immunogenicity) is starting to be

addressed in the UK and may be a suitable

topic for UK-US precompetitive research.

The natural variability of the cell source was

clearly a problem at the design stage for

autologous processes. Assurances were given

by some providers that the process efficacy

had been validated for the natural envelope of

properties that were to be expected in cell

isolates from a normal population. However,

on further questioning it was recognised that

there is no simple or definitive way to do this,

and 90% capture of variation was the best

that could be hoped for. Inevitably some

batches had to be scrapped in production

because they fell outside specification on

maturity. The implication was that during early

phase clinical trials it was important to define

and capture a representative sample of

variation in the patients. Guidance for doing

this was not possible and changed for one

indication to another.

2.3.4 Asepsis

Aseptic validation was crucial in every case as

there were no instances of the inclusion of

antibiotics in-process and none of the

products could be terminally sterilised.

However, with the exception of the centres

that offered modular clean rooms for service-

based business models, there remained the

issue of finding suitable downtime for deep

clean operations (such as might be doneannually in a therapeutic protein production

plant). This seems to be a feature of scaled-

out processes, ie those where the production

is done in many small units rather than only a

few large ones (scale-up). The overlap in time

for prolonged periods of culture makes it

difficult to take the whole plant off-line and

may contain implications for facility design, eg

the creation of several parallel production

suites instead of one large one.

There was a trend, shown by several

companies, to set up non-accredited clean

suites containing identical apparatus to that in

the authorised clean rooms. This allowed

production dress-rehearsals at

manufacturing scale. Operator training can

thus be validated without compromising the

production floor, and the facility also allowed

debugging of the production protocols before

they were issued as controlled documents.

2.3.5 Manufacturing equipment

Manufacture using certain types of popular

equipment was limited in some areas by

validation problems. More than one company

alluded to the differences encountered on

scale-up when using cell factory systems

with multiple layers for cell growth. When

moving from three layers to ten layers

problems arise in control of buffer gas

content and temperature control. For full-

scale work, triple layer machines with full

automation were therefore regarded as a

suitable upper limit.

Cleaning validation was also of primary

importance. In the case of autologous

therapies, individual patient, process line-

clearance was of course critical to avoid

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cross-contamination but in addition the

companies had found that surprisingly low

levels of some cleaning agents exerted a

detectable effect on product. Hydrogen

peroxide, now gaining popularity for inter-

campaign sterilisation in situ, was a good

example of this. The acceptable residue levelshad been determined, suitable analyses put in

place and the cleaning and sterilising cycles

had been constrained to protocols guaranteed

to reduce residues to an acceptable level.

Automation and design for manufacture

remains at a low level, with most

organisations using scaled-up versions of the

familiar T-flasks and roller bottles of their

primary research. On process scale-up, theroute to manufacture can be defined by this

choice as it becomes expensive to revisit

early work and repeat clinical studies using

more amenable systems due to lack of

comparability data. However, some

organisations had done just this. It appears to

be an issue of confidence and is related to

the value of the indication. If the therapeutic

target is high value and life threatening then

the value release by efficiency engineering is

worth making the investment for, but if a low

margin product is proposed then the financial

justification to repeat clinical studies for a

new manufacturing protocol simply will not

be justified.

2.3.6 Process Analytical Technologies

and in-process control

Science, risk management and Process

Analytical Technologies (PAT ie tests applied

in real time or near real time to ensure that

the process is conforming to specification)

are seen by FDA as important for new

bioprocesses. Cell markers derived by some

of the companies were based mainly on past

experience and used in-process to monitor

progress. FDA has advised that more

extensive characterisation will be needed

including real time, non-invasive monitoring.

There are surface markers for cell activation

but the envelope of the parameter is rather

too wide to be very useful.

The products in development were mostly

made by recipe-driven processes, ie

processes designed and validated early in

development in terms of passage number, re-feed times for cells together with medium

delivery volume and supplements. There

were two notable exceptions to this. The first

was an instance of the development and

validation of a proprietary in-process control.

This biochemical example was based upon a

metabolite of energy production (adenosine

triphosphate (ATP) turnover) and was used as

an aid to define the time when product

should be harvested. The second was a casewhere the batch manufacturing protocols

allowed for additional passages in cases

where cells were unusually slow-growing

(autologous source).

A general point was that early identification of

robust markers during research could help to

obviate the need for extensive requalification

during process changes in development since

it could be shown that little alteration had

taken place.

2.3.7 The product

There was considerable reliance on release

assays (an example of verification, eg PCR-

based mycoplasma assays, analysis for tissue

matrix components, cell viability and cell

number). In one case, release testing was done

pre-shipment with some features at risk, ie

the results not known before the product had

been used. For this to be an acceptable risk the

statistics of process validation have to be very

robust. Several companies expressed

aspirations to move to fully responsive

manufacturing based upon in-process controls

as time went on. A sterility test based upon the

supernatant medium alone was negotiated

with FDA by one company.

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FDA places emphasis on confirmation of

potency of the product batches. This is based

on a multiparametric approach. It was felt by

the organisations visited that there was too

high a risk associated with relying on just one

outcome measure cross-calibrated to in vivo

potency, and there had been cases wheresuch a marker had eventually turned out to be

indicative of undesirable features that could

not later be disentangled from the potency

question. Therefore several such outcome

measures per product, independently

determined, were favoured by regulator and

industry alike.

Validation of product shelf life seems to be an

issue that continually recurs during acompanys development. The extension of

shelf life in certain indications was of such

high economic benefit that it justified the

expense of revisiting the early work and

repeating (and extending) ageing studies.

In some organisations, development activity

has been carried out on the stem cell banks

to find out what happens to the cells post-

differentiation under some of the growth

conditions. This takes the process validation

beyond the lifetime of the process into post-

therapy areas on the assumption that some

changes may not become apparent until later

in development and raises a question about

how long such studies should or could last. If

this subject becomes the accepted custom

and practice then it must be taken into

account in the calculation of product

development costs.

On a related subject, FDA is concerned about

potential problems with certain stem cell types

where the starting preparations might

potentially form cancerous tissues under some

conditions. There may therefore be a need to

confirm the absence of significant numbers of

such cells in the final preparation. At present,

preclinical tests cannot be done in the

numbers required to give statistical

significance for such tests so the current

implication is that at-line analysis must

supplement an already validated process.

2.3.8 Delivery

For products in which the transit to the

customer is made in a refrigerated state itwas necessary to validate the chosen carrier

container during transit trials. In spite of this

some customers had requested that

verification for their particular route and

holding conditions be made with temperature

mapping during special transit trials. This

request produced problems because the very

presence of thermocouple arrays within the

package led to thermal conductance across

the insulated boundary and invalidated theoutcome. A compromise was reached to

provide some measurement without rigid

adherence to this request. Similarly there was

some variation in the approach to end-user

training with preference for company field

staff offering training to new clients in the

thaw process (previously validated for cell

recovery and product potency). This effectively

means that the manufacturing company has

qualified specific named individuals only for

use of goods. Formal validation ended with

the thawing of the product.

2.3.9 Impact of process understanding

There was evidence from several organisations

of an emerging confidence in understanding

the CCPs for different classes of operation

during development. It was clear that for

specific activities that were addressed

repeatedly for different products (eg cell sorting

and expansion in different classes of bioreactor

such as the wave bioreactor and the cell factory

systems) the parameters that will turn out to

be the dominant process features are now

more predictable than they were even a few

years ago. This emerging know-how holds out

the potential that a unit operations approach

can now begin to be applied to cell therapy

processing along similar lines to those enjoyed

by the molecular pharmaceuticals industry.

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2.3.10 Validation of training

Staff training is paramount with such labour-

intensive operations. There is much turnover

of manufacturing staff in the Californian

biotechnology sector because of the close

proximity of so many related industries, andthis creates a burden of ongoing training for

employers. A positive outcome, however, is

that there is a growing pool of technical and

production staff in the area who are fluent in

clean production of cell and tissue therapies

and that the training is always fresh. This is a

benefit of having so many companies in one

geographical location.

2.3.11 Examples of company approachesto regulations

Regulatory awareness is a vital component in

business planning for the successful medical

company. In addition, California occupies a

unique position in the American legal

landscape because of the special state funding

for ES cell research that was voted in after the

veto on Federal funding by President Bush.

Some of the companies visited were solely

focused on stem cell activity and were still

engaged in research work. As a result their

awareness of regulatory and quality issues was

high as it had a bearing on how they were to

move towards commercialisation. The mission

team observed a high level of pragmatism with

regard to the generation and maintenance of

statewide regulations on this subject.

Broadly there were three levels of operation

evident in the companies visited, depending

on the state of maturity of the business and

the business model. At the preclinical, pre-

GMP stage were several of the organisations

visited. One example was a company

focusing on the commercial development of

ES cells for use purely as assay-based

screens. In order to achieve this, the research

concentrated on a robust understanding of

the biochemical switches that drive the cells

down the alternative differentiation pathways;

specifically to pancreas, heart, liver,

endothelium, blood and nerve. The

commercial aim was to offer the cells as a

means of assessing the potency of

therapeutic treatments (eg by acting as a

calibrated control against activepharmaceutical ingredients (APIs) that are

intended to drive the regeneration of different

organs or tissues). The target markets are

cardiovascular, diabetes, drug screen and

predictive toxicology. It was not necessary to

manufacture to GMP as the technology is

intended as a research tool; the company

does, however, work to GLP.

Moving closer to the marketplace, anothercompany was commercialising allogeneic cell

therapies derived from ES cells. Fully aware

of all quality and regulatory issues it will need

to address with regard to commercialisation,

for nearly a decade the company has been at

the leading edge of developing human ES

cell-based therapeutics for several diseases

including neural cells for spinal cord injury and

Parkinsons disease, and cardiomyocytes for

heart disease. It has developed proprietary

methods to grow, maintain and scale up

undifferentiated hES cells using feeder cell-

free, chemically defined culture medium,

before differentiating them into

therapeutically relevant cells. The companys

most advanced programme is hES cell-

derived glial cell for acute spinal cord injuries.

It has already had multiple FDA pre-IND filing

meetings, and the GMP grade MCB has been

produced and stored. The GMP cell line has

now been rigorously qualified for human use

after extensive animal and in vitro testing. The

data generated will be used to support the

IND filing in 2007. If successful, this will be

the worlds first hES cell-derived product to

enter clinical testing.

The mission team also met with two CMOs.

Some saw the European Quality Procedures

(QP) system as a potential barrier to entry in

exporting cell therapy products from the USA

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to the EU. All were keen to develop rapid

release assays and as a consequence some

have implemented automated bacterial

contamination detection systems but still

follow up with a conventional 14-day sterility

test. Many had also looked at PCR-based

mycoplasma assays. Product is generallyreleased at risk based on standard tests such

as cell count, viability and gram staining,

whilst awaiting sterility data.

One of the few companies in the clinic had

two product approaches:

Cell-based delivery of missing lysosomal

enzymes in Battens disease

Re-myelination of axons to restore

motor function

The companys approach was predicated on

use of fluorescence-activated cell sorting

(FACS) to isolate a population of stem cells

which are then reintroduced into the patient. In

its discussion with regulatory agencies, focus

has been on GMP-related issues, such as use

of clinical grade material and techniques to

reduce potential for contamination. It tries to

avoid use of antibiotic as yield and phenotype

may be affected.

Taking a two-pronged approach to cell

therapy, one company was developing both

autologous and allogeneic products through

the clinic. Its first product, an autologous

population of mesenchymal stem cells

derived by plasmapheresis and indicated for

treatment of sickle cell anaemia and

thalassaemia, is minimally manipulated and

derived from the patients own blood. It was

able to progress from Phase 1 safety studies

straight to Phase 4 studies. Because of yield

issues there have been problems with quality

testing of batches whilst still retaining enough

product to treat an individual.

The companys second product is allogeneic

and consists of human universal myeloid

progenitor (hUMP) cells. Currently at the

preclinical/Phase 1 stage, it comprises pooled

samples from multiple donors. The initial

indication will be neutropenia (abnormally low

levels of a particular type of white blood cell);

however, the product may offer some

protection from the effects of radiation. Thecompany claims an expansion of 30-50 fold in

culture. Interestingly it treats the product

more like a primary culture than an MCB and

uses routine hospital testing as a means of

screening for adventitious agents so that the

approach is more like transfusion.

One company was able to fast track its

development programme by acquiring

technology approved by FDA in one indicationand shoehorn it into another. Regulated as a

biological it is currently in Phase 1 trials, and

will need a potency assay for subsequent

studies. The company currently performs

basic assays including standard colorimetric

MTT and Sirius red as release criteria.

Taking the minimal manipulation approach to

cell therapy, one company has developed an

autologous system to isolate stem cells

from fat. As a simple system the

concept/service can be sold with little need

for clinical trial or regulatory involvement via

the GTP pathway. CE approval has been

obtained for the isolation device, facilitating

selling direct into the EU. The main clinical

indications will be the prevention of heart

failure following a heart attack. The company

has already conducted a Phase 1 safety study

earlier this year and is planning additional

clinical studies in peripheral vascular disease

and aesthetic applications.

By far the most advanced, one company was

in the process of reintroducing a wound care

product back to the US market having

acquired it in a post-Chapter 11 of the United

States Bankruptcy Code sale. As a well

established product there were no major

quality or regulatory issues to be addressed.

However, as a consequence of bankruptcy-

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induced hiatus in manufacture the acquirer

was able to initiate a thorough overhaul of the

facility, which has the advantage of not

requiring to be reinspected as there has been

no material change to product or facility.

2.4 Commercialisation

A range of Californian companies was visited

and their approach to commercialisation

assessed. Overall the mission team looked at

the types of business models and strategies

being used as well as the barriers and risks

they faced.

During the mission formal meetings were had

with 15 stakeholder organisations includingCIRM, a leading venture capitalist in the

sector, plus 13 stem cell and regenerative

medicine biotechnology companies. Eight of

the companies were targeting therapeutic

products, two were CMOs, one a drug

discovery tools company, one a technology

holding company and one a consultancy.

2.4.1 Therapeutic companies

The majority of companies were firmly

focused on the therapeutic sector of

regenerative medicine involving tissue

engineering and cell therapy. California has

had a long association going back to the early

1990s with tissue engineering companies

with headquarters and manufacturing facilities

in the state. Indeed one of the earliest

pioneers, Advanced Tissue Sciences, set up

in San Diego, listed on NASDAQ, achieved

FDA approval of its products and at its peak

employed over 200 people.

This background of early pioneers has left

California with a wealth of talent and

experience capable of forming, leading and

growing new companies in the sector.

Experience with the sector extended to all

the stakeholders, eg venture capitalists, angel

investors, service companies, clinicians,

distribution companies as well as the

workforce. Every company almost without

exception had leading management people

who were on either their second or even third

regenerative medicine related venture. Thus

not only were the companies being led by

seasoned management but also all the

individuals knew one another. An informalclub of managers was evidently in play both

within California and also throughout the

USA. Where key people had not been

available from the pioneers in the sector, the

shortfalls had been made up from the local

biotechnology communities both in the Bay

Area and around San Diego. The links to the

UK via this informal network are minimal.

Funding the companies did not appear to be asignificant problem although individual

company funding is not on the scale of the

hundreds of millions of dollars poured into the

pioneers in the late 1990s with just one

exception. This was a leading human

embryonic stem cell/cancer therapy company

which was the first to enter the stem cell

sector and thus enjoyed the sharp rise in the

NASDAQ stock market prior to its major

downturn in the early 2000s.

Funding was extremely diverse including

angel investments, venture capital, defence

monies (Project BioShield and Defense

Advanced Research Projects Agency

(DARPA)) and stock market. All the companies

expected Proposition 71 funding to help them

in the near future with many having already

applied as the partner of an eligible academic

or non-profit organisation.

Several angel investors attended the official

mission reception; whilst some were already

invested in the area and planning to invest

further, the remainder expressed a strong

desire to become involved in the not too

distant future. Leverage with the Proposition

71 funding was certainly a driver with none

expressing an interest to invest outside the

State of California.

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Venture capitalists had wider geographical

interests, but they too fully understood the

potential benefits of Proposition 71. Indeed

one leading venture capitalist had nearly

completed the formation of a $150 million

(~77 million) fund. Interestingly the same

venture capitalist was preparing to invest inUK companies because they were by current

US standards very undervalued.

Four of the companies visited had publicly

traded shares (three on NASDAQ and one on

the over-the-counter (OTC) market but was

expected to transfer soon to NASDAQ).

California also had a third vital ingredient for

the future success of its regenerativemedicine companies, namely an experienced

service sector. Two of the companies visited

were established CMOs in the cell therapy

sector. The leading one had experience of

growing more than 20 different cell lines in a

wide range of bioreactors. It provided a

turnkey operation including expansion,

storage, distribution and regulatory matters.

Other local supply chain companies included

major culture media and reagent

manufacturers, bioreactor designers and

international distribution companies. For

example, one of the pioneers in the sector

had originally planned to produce cell culture

media using 100 litre stainless steel media

vessels. However, after a short period of

operation it became apparent that it was far

easier, cheaper and more reliable to

outsource the supply of media. This initial

approach of being totally self-sufficient has

been turned around as the local supply chain

industries have become established. The

more recently established regenerative

medicine companies were considering total

outsourcing of the eventual production

including outside the USA such as Singapore

and the Irish Republic.

The therapeutic cell companies have adopted

a wide range of cell types and approaches.

All the major cell types were represented

including human embryonic, foetal and adult

stem cells and progenitor and somatic cells.

The companies business models very much

reflected the state of the science that their

respective chosen cell type had reached. For

example, companies with somatic cell basedproducts had either FDA approved product or

products in clinical trials whilst the human

embryonic stem cell based companies were

at a much earlier stage in their product life

cycles. The most advanced was at the stage

of being just about to file its FDA IND

application prior to being able to commence

Phase 1 clinical trials.

This range of stages was likewise reflected inthe investor base and its expectation with

respect to size and timing of likely returns.

However, the uncertainty with respect to

returns had not put off some of the

companies with very early stage products

from investing heavily in GMP production

facilities. For example, one hES cell company

had invested considerably in the purchase of

a 10,000 ft2 (~930 m2) GMP ex-

biopharmaceutical factory complete with

modest automation capability. The plan

was to be ready for when scale-up is required

and also to perform contract manufacture in

the meantime. Future staffing of the facility

was not perceived by the management

to be a problem as local talent was

relatively abundant due to the plethora of

biotech companies.

During the course of the mission it became

apparent that two distinct business models

were being considered. At one extreme was

the

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