June 1st, 2009

STEM CELLS

Jie HeTony Jia

Ji Young LeeAndy Yen

HISTORICAL PERSPECTIVE AND SCIENTIFIC BACKGROUND

Timeline 1963 – Discovered by McCulloch and Till 1981 – Mouse Embryonic Stem Cells Isolated 1998 – First Human Embryonic Cell Line

Developed

Scientific Background Self-Renewing Pluripotent Two Main Types

Adult Embryonic

SCIENTIFIC BACKGROUND

Advantages/Disadvantages Embryonic Stem Cells will divide indefinitely Adult Stem Cells have a finite lifetime Not all tissues contain Adult Stem Cells Adult Stem Cells are not controversial Embryonic cell lines Media Reagents Safety

RESEARCH METHODOLOGY

Lots of Primary Research Industry and Academia

Some supporting Secondary Research Issues:

How Big? Future Potential Obstacles Driving Forces Most Promising Opportunities Intellectual Property Commercialization Business Model

LIST OF INTERVIEWS CONDUCTED Dr. David Baltimore

Robert Andrews Millikan Professor of Biology at Caltech, Nobel Laureate

Dr. Martin F. Pera Director of Eli and Edythe Broad Center for Regenerative Medicine and

Stem Cell Research at USC

Dr. Agnes Lukaszewicz Postdoctoral Scholar for Dr. David Anderson (Founder of StemCells, Inc.) at

Caltech

Dr. Owen Witte Founding Director of Eli and Edythe Broad Center of Regenerative

Medicine and Stem Cell Research at UCLA

Dr. Marie Csete Chief Scientific Officer of California Institute of Regenerative Medicine

Kenneth Aldrich Chairman and CEO of International Stem Cell Corporation

S CURVE ANALYSIS

DEVELOPMENT CYCLE

Three Phases

Biotech – long, complicated, expensive development cycle

Stem Cells Complexity of cellular biology Risks of new, unproven therapy

Research Testing/ApprovalCommercializatio

n

DEVELOPMENT - RESEARCH

Where is this research taking place and why?

DEVELOPMENT - RESEARCH

Most research is in academia CIRM grant data

Most Stem Cell companies NOT involved in research.

Research is still in the early stages. Current trend, private sector unwilling to

invest until Stage 2 or Stage 3 Too expensive and complicated Low success rate

DEVELOPMENT – TESTING AND APPROVAL

Human use – requires rigorous testing and approval

No precedent, very unique procedure A form of personalized medicine

How can FDA regulate biotech

they have no experience in?

GMP LabsResearchers must educate

the FDA

Physician Initiated Trials

COMMERCIALIZATION

Bone Marrow Transplantation Not a Commercial Product

Fixed Cost Similar to existing treatments

No potential for business applications

COMMERCIALIZATION

Month

Kidney Transplantation Immune response due to incompatibilities

Expensive Immunodepressant have to be taken throughout lifetime

Stem cell technologies avoids it Cost reduced dramatically

COMMERCIALIZATION

Windpipe Transplant

COMMERCIALIZATION

Patents WARF – Preparation of primate and human

embryonic stem cells Geron – Cell therapy and Drug screening

applications using cells derived from hESC Kyoto University– Derivation of iPS cells from a

somatic cell

Time Estimates vary, Hard to predict Depends on Therapy/Application

Macular degeneration: 3 - 5 years

Diseases in USA

0

5

10

15

20

25

Diabetes Parkinson'sDisease

Alzheimer'sDisease

Skin Cancer Other Cancer

Disease

# o

f C

ases

(M

illi

on

s)

POTENTIAL MARKETS

Stem Cell Therapy Most Obvious Most Future Potential

Peripherals Media and Reagents Supplies Cultures

Disease Study and Drug Development Unlimited Supply of Human Cells Use Stem Cells to test drugs Safer, more Efficient

Most VC+Startup is in the latter 2

DRIVERS

Mainly Intellectual Curiosity

Later: When more money is involved Demand for Cures “Money, Fame, Sex.” –David Baltimore

HOW BIG AND THE NEXT BIG THING

Lots of Funding at USC/UCLA CIRM Funding 180+ Startups Ken Aldrich – $100 billion market after

required FDA approvals.

Next Big Thing Induced Pluripotent Stem Cells (iPS) Macular Degeneration Advanced Melanoma

IPS CELLS

Essentially Pluripotent Stem Cells Derived from non-Pluripotent Adult Cells Uses Skin Cells

Ethical Considerations

Advantages DisadvantagesNot Limited by Existing Cell Lines

Low Efficiency

Can be Derived Universally High CostGenetic Compatability Very New

MACULAR DEGENERATION

Possible immediate applicability Leading cause of blindness and vision loss for

elderly people

Advantages Eye is a small organ Small number of cells required Wide Applicability Optical Tools Exist to Observe Results Eye is a noncritical organ

Age Percentage Afflicted66-74 10%75-85 30%

Advanced Melanoma

Already in Clinical trials Promising Results Stem Cells used as messengers to modify

patient’s immune system Uses Adult Stem cells Does not require detailed understanding of

how stem cells interact with human tissue. Easier to get approval for Stage 4 patients

ROADBLOCKS/RISKS

Cancer Teratoma

Dangers with iPS cells Oncogene retrovirus

These are not “killer” problems Biggest issue – sheer complexity of human

body High cost of production

Stanford GMP facility – $200M

BUSINESS MODEL

BUSINESS MODEL

CONCLUSIONS

Lots of therapies are possible Some are close: Macular Degeneration (3 years) Some are far off: Neural Diseases (5+ years) Impossible to Tell Peripherals Market

Limited by Regulation, Cost, and Science

Too Early for Private Investors Government Funding is Crucial for Basic

Research and Commercialization When it reaches the Market, initial cost will

be high but decrease over time