Increased Public Private Partnerships to Drive Cutting Edge Innovation and Business Growth

With few existing therapies capable of curing or significantly changing the course of a disease, healthcare providers are starting to look towards stem cells and regenerative medicine as a viable alternative. Regenerative medicine has the potential to cure diseases like we have never seen before.  Because of this, the market, especially in the area of stem cell therapy, will continue to experience positive growth, boosted by support from other sectors. Stem cell therapy will continue to be the largest market segment of regenerative medicine, However, cross segment therapies that combine the use of immunology, genetic and stem cell therapy are rapidly advancing. Several initiatives in this field of medicine are now attracting new public and private funding. 

Globally, the stem cell therapy market is expected to be worth US $40 billion by 2020 and US $180 billion by 2030. Factors that are driving stem cell manufacturing in the short term include aging populations in need of alternative medicine and in the long term, new evidence that stem cell therapy works. However, an area of concern in the immediate future and long term is the lack of early stage funding and the inherent variability in living cells culture and manufacturing. Despite this, it is expected that investors will increasingly support early and mid-stage clinical trials as this fast moving market continues to develop and show promise. The market will continue to grow by attracting more public and private funding, which is necessary to support faster innovation in the filed. Pharmaceutical companies like Johnson & Johnson and Pfizer and biotechnology companies such as Celgene will continue to invest in stem cell therapy. Last year, J&J invested 12.5 million in Capricor Therapeutics (CAPR) to support a stem cell therapy program. The investment could increase to $325 million depending on milestone attainment. The program also received $20 million funding from the California Institute for Regenerative Medicine.  Phase II trials for treatment of cardiovascular disease have been scheduled.

APAC countries are progressing fast in the field of various stem cells research, including adult, embryonic stem cells and IPSc. Japan, China, Singapore and South Korea are the front runners and would dominate the APAC stem cell market in the coming years. Favourable regulatory changes and funding support from respective governments have helped the commercialization of stem cell market. Japan is taking global lead in promoting stem cell research for addressing conditions such as macular degeneration, Parkinson's disease, spinal cord injuries, cardiovascular disorders, stroke and so on. The stem cell market is poised for significant growth with the anticipated launch of JCR Pharmaceuticals’ MSC product, JR-031. It is a proposed treatment of steroid-refractory GvHD in children and adults, following bone marrow transplantation. 

Adult stem cells are the most popular choice for research and treatment globally 
Stem cells obtained from adult organisms are the main focus of research and the ethics surrounding the use of these cells are more straightforward. Therapies employing adult stem cells are being developed by various companies (such as ViaCell, StemSource, Osiris Therapeutics, Neural Stem, and Angioblast) and are pacing fast from laboratory to the clinical application phase.  Let’s have a look at the regional overview of stem cell market.

• North American market is expected to be driven by greater government funding, higher treatment affordability and increase in fast-track approval for stem cell therapeutics by the FDA. With the support of Obama administration, the National Institutes of Health plans to expand federal funding for stem cell lines.
  
  
• European stem cells market is expected to be driven by high prevalence of chronic diseases and support in terms of funding from government and private organizations. There is more than $500 million invested in regenerative medicine in the UK over the next 5 years.
  
  
• Asia-Pacific stem cell market is expected to record the highest growth rate in next 5-6 years. Driven by favourable government policies, increased funding from government and private organizations, and increased patient population in the region. The major initiatives and established funding structures for the stem cell sector are in Singapore, Israel, and Australia.

Embryonic stem cell, infamous due to ethical concerns
On the other hand, embryonic stem cells seem promising in therapy as they can potentially develop into all cell types. However, their research and use is deeply embedded in ethical concerns and controversy. Despite the challenges, many companies see an encouraging future in using human embryonic stem cells as tools for testing and developing new drugs. Some companies like Geron Corporation have initiated a move towards testing cell therapies in humans.

Induced pluripotent stem cells (iPSC), a rising star on the horizon
A more recent area of stem cell research includes iPSC cells and scientists are in the process of uncovering their full potential. iPSCs present an attractive option for countries where embryonic cell derivation and reproductive cloning are banned; they can use iPSCs to develop therapies for drug toxicity screening and development of disease models. Companies such as Fate Therapeutics, Plasticell, and Cellular Dynamics are actively involved in this area of research.

Numerous advances have been seen in the field of iPSC research over the last few years: 

• First clinical research involving transplant of iPSCs into humans was initiated in year 2013. This new study in Japan would test the safety and feasibility of using iPSC taken from adult patients to treat their blindness.
  
  
• In 2012, The University of Michigan announced that they had developed innovative methods for use of induced pluripotent stem cells derived from skin biopsies to create cardiac muscle cells.

Figure 1 indicates the breadth of various clinical applications using Adult Stem cells (ASCs) and Embryonic Stem Cells (ESCs).

Breakthrough in the stem cell research: A deep dive into recent developments
Stem cells are specific cells characterized by three unique features that include long-term self-replication, even after extended periods of dormancy, no specialised function but ability to differentiate into various specialized cell types under appropriate conditions. The stem cells therapeutics market is still in its infancy stage. Some of the key facts of stem cell industry are:

• Over 60,000 stem cell transplants take place annually.
  
  
• Currently there are no licensed stem cell products approved by the U.S FDA, although a handful of products are commercialized in other regulated markets such as Europe, Korea and others.
  
  
• With the discovery of the therapeutic potential of adult stem cells and encouraging preclinical and clinical results, stem cell research for commercial development has largely moved beyond the controversial embryonic stem cells (ESCs).
  
  
• With Geron’s recent exit from the stem cell space, the only companies that appear to be pursuing ESC development and commercialization in the U.S. are Advanced Cell Therapy, BioTime and California Stem Cell.
  
  
• Although not technically, a stem cell therapeutic treatment—Hemacord, composed of hematopoietic progenitor cells for transplant, is the first U.S FDA licensed cord blood product. Hemacord, manufactured by the New York Blood Center, was approved by the FDA in November 2010.
  
  
• With several companies in advanced clinical development, the first licensed stem cell therapeutic product is expected to reach the U.S market by 2015–2016

Potential game-changing strategy to overcome the pressing challenges:  
Industry is going through several challenges such as funding to continue researches, reimbursement issues and so on. It goes without saying that stem cell related treatments will be quite expensive owing to obvious factors such as high customization requirement for each patient, highly specialized equipment,  special storage condition requirement, complicated cell isolation and harvesting system and many more. Figure 2 highlights some of the major challenges. the industry faces.

Figure 2: Industry Challenges in Stem cell and Regenerative medicine market.

The role of reimbursement would be very critical for the success of any stem cell medicine or treatment. In order to create a favorable reimbursement environment there is a need to establish a well-defined government body that can regulate and define the treatment efficacy and outcome, which ultimately will boost the confidence of insurance payers. Also, there is a need to establish a more efficient reimbursement coverage framework that can work in co-ordination with regulators for an accelerated clinical approval process.

To summarize, stem cells have the potential to transform healthcare, enabling effective treatment for several diseases where current forms of medicine are largely ineffective. It is set to play a significant role in patient care, introducing therapies that avoid traditional drugs, devices and surgeries and are more cost effective. Stem cell therapy will be beneficial for a rapidly aging population and rising proportion of patients with neurological and other chronic disorders. Scientists around the globe firmly believe that stem cells hold the key for entire organ transplant in future and constant efforts are being made to achieve it. Despite promising treatment options, stem cells market is facing challenges due to unfavorable regulatory policies in several countries. However, countries such as Japan and South Korea have recently come up with favorable guidelines on stem cell research, providing the much needed boost to the industry globally. More countries are yet to follow the suit and there is still a long way to go. 

To learn more about the stem cell and regenerative market stay tuned for Frost & Sullivan’s upcoming study, ‘Global Regenerative medicine Market’. This research study provides insights on successful stem cell therapy treatments, Marketed Products, Stem Cell Manufacturing and Funding and Partnerships in the regenerative market.  Apart from our upcoming report, we have a number of reports on topics related to Stem cells and Regenerative medicine available on our website www.frost.com. Frost & Sullivan is going to conduct a GIL Webinar – ‘The New Age of Regenerative Medicine – Why Stem Cell Therapy?’ in November 2015. If you would like to be notified for this complimentary briefing, please email on enquiries@frost.com.  

Author: Sanjeev Kumar | Consultant | Transformational Health: Life sciences| Frost & Sullivan