BWL Investments Ltd: April 17, 2020
This report is meant to offer an overview of the stem cell market and its current regulatory environment. By citing recent economic assessments, regulatory research and industry leaders we provide a concise yet thorough overview of the stem cell market. We highlight the business opportunities that exist due to the lack of good manufacturing practices (GMP), supply chain tracking and monitoring of stem cell production, distribution and quality.
Therapeutic Stem Cells
The evolution of an organism from a zygote is the result of many highly complex and regulated processes. Upon fertilization, the resulting zygote is a single cell containing genetic information from both parents that directs its development into a multicellular, complex, and viable organism. Stem cells are undifferentiated cells that share this remarkable feature; they can differentiate into various cell types as well as self-reproduce1. The potential of stem cells to transform and regenerate makes them ideal candidates for use in treating disease, cell and tissue repair, drug testing, and for the cosmetic industry2.
The therapeutic applications and potential for stem cell therapies have been growing intensely over the past decade. Stem cells and stem cell derived products are being studied for a number of high-impact applications including neurodegeneration, spinal cord injury, heart tissue repair, dental regrowth, vision impairment, orthopedics, regenerative medicine and cosmetic applications, to name a few.
According to one analysis by an industry trade association, 906 regenerative medicine companies exist globally, primarily in the United States (484), Europe and Israel (241), and Asia (142). These companies include both large pharmaceutical corporations and small biotechnology firms that are developing therapies to treat a range of conditions. As of 2018, overall global financing for regenerative medicine amounted to $13.3 billion. Cell therapy alone accounted for $7.6 billion8.
According to Grandview Research, the global market for stem cell therapies in 2019 was $9.6 billion and is expected to reach $16.8 billion by 2025 and $ 27.8 billion by 2030, growing at a CAGR of 10.6% (projections in Figure 1).
Figure 1. Therapeutic stem cell market growth between 2019-2030 at a CAGR of 10.6%.
The explosion of commercial growth experienced by this sector has warranted clinical trials and increased awareness relating to the need for regulations relating to stem cells and stem cell derived products in clinical settings. However, in its current state the regulatory environment, manufacture tracking and supply chain infrastructure surrounding stem cells is disparate, inconsistent and in many cases non-existent.
Andrews et al provide an overview of the considerations to take when developing Good Manufacturing Practices (GMP) for cell-based therapies (Figure 2).
Figure 2. The manufacturing process for induced pluripotent stem cell (iPSC) based therapies. Multiple regulatory, ethical and business issues must be considered (right). The figure excludes issues related to evaluation of cell therapies in clinical trials.
GMP compliant human induced pluripotent stem cells (hIPSCs) have been generated by teams in China (Wang et al), Japan (Azuma et al), the U.S (Baghbaderani et al. 2015) and the UK (Catapult; references future work needed to develop GMP compliance). Indeed, Japan is at the forefront of developing stem cell technologies that integrate GMP and detailed stem cell tracking and characterization, making it a desirable place for entrepreneurs and innovators looking for a sophisticated regulatory ecosystem (Nature 573, 463 (2019)). Korea, a leader in the cosmetic stem cell market, has recently developed GMP for stem cells and stem cell derived products (Jo et al.)
In addition to offering a description of what constitutes GMP in different jurisdictions (Table 1) Bedford et al note:
Health Canada’s regulation surrounding cell therapy clinical trial manufacturing requirements is the most flexible and simplest to follow, but it lacks detail. Health Canada’s approach stands out because the regulator does not require manufacturing establishments to register or obtain a license for their manufacturing establishment when they only produce products under Division 5—Clinical Trial Application of the Food and Drug Regulations.
This approach was more recently applied by Baghbaderani et al. (2016) where the authors describe cGMP manufacturing guidelines for the characterization of hIPSCs manufactured for therapeutic applications. A list of essential tests for validating stem cells can be found in Table 2.
Table 1. Description of GMP in different jurisdictions by Bedford et al.
DNA analysis for stem cell characterization
It is important to note that cells have intrinsic variability. It’s possible their genetic information can change during the manufacturing process or after implementation due to spontaneous mutations and/or their response to different environments. Therefore, it is crucial for regulatory tests throughout these processes to be implemented. Baghbaderani et al. (2016) suggest DNA sequencing methods should be considered in stem cell therapy GMP. Karyotyping, a test in which one’s chromosomes are examined for abnormalities, is currently in place for characterizing hIPSCs. Additionally, Baghbaderani et al. (2016) utilize methods such as transcriptome analysis (RNA-seq), a SNP-CHIP/CGH array, and whole genome sequencing (WGS) to facilitate the characterization and screening of hIPSCs. These assays typically reveal vast amounts of information about populations of stem cells (Nakayama et al.) and Baghbaderani et al. were able to reveal genetic signatures at single base resolution
The authors posit that for a relatively modest investment useful information about the molecular signature of stem cells can be obtained, while emphasizing their methods may miss epigenetic factors and less abundant variants (depending on sequencing depth and assay sensitivity).
Table 2. A list of critical required tests for cGMP generation of stem cells from Baghbaderani 2016.
Stem Cell Good Manufacturing Practice (GMP)
MSCs reside in many human tissues and can regulate inflammation, immune response, healing, and regeneration. As a result of this, MSCs have been extensively used in preclinical disease models and early phase clinical trials with promising results, though no FDA-approved indications exist yet.
In 2019, Mcgrath et al. claimed to generate GMP-compatible MSCs for clinical application but offered no specific details regarding their GMP guidelines (other than utilizing GMP-compatible low-serum Allegro™ Unison Medium), highlighting the need for more transparency, consistency and regulation in the space.
In a 2020 review, Ntege et al. highlight the need for more tracking and quantification of MSC characteristics for useful application:
Deeper understanding of factors contributing to the biological and pharmacological disparities between pre-clinical research and human translational studies is needed. Suggested factors significantly contributing to the dissonance include differences in cell preparation, potency, and functionality among MSCs tissue sources, culture methods, and expansion levels, and variations in cell handling including thawing, route of delivery, and dosing.
Furthermore, Bedford et al eluded to the lack of a robust stem cell specific GMP:
With few regulators developing manufacturing requirements specifically for Cell Therapy Products (CTPs), highly harmonized regulatory principles of Good Manufacturing Practice (GMP) for pharmaceuticals and biologics apply. However, what people mean when they say they make “GMP grade” CTPs remains ambiguous, and this confusion is exacerbated because most CTPs in early stage development are processed in whole or in part in academic hospital-based settings instead of industrial facilities.
The prevalence of concerns and lack of consistency relating to GMP in the stem-cell market highlights a valuable opportunity for disruptive, commercializable solutions.
Stem Cell Supply Chain
Unlike many other medical and consumer products, stem cell products lack robust and standardized supply chain tracking protocols.
According to Gerald Garrett, VP of clinical operations at the stem cell/cell therapy company Marker Therapeutics:
“For the safety of our patient, accurate tracking is a must,” states Garrett. “We need to know exactly where the product is at any step of the way. We also need to know critical details such as the shipping company and the temperature and orientation of the product. Chain of custody must be tracked all the way through from pickup to infusion, and we also need to know exactly when it arrives at the site and where it is physically located.”
A schematic of the ideal stem cell supply chain (Figure 3) was published as part of a review by Teng et al. In this analysis, the authors advocate for a standardized and detailed approach to managing supply chains for stem cells.
Figure 3. A schematic representation of a generic stem cell therapy production and supply chain.
The implementation of a standardized supply chain system to monitor, validate and track production and logistic data would provide significant value for businesses and consumers.
Biotechnology Research Products
Innovative biotechnology companies have created significant value in recent years by capitalizing on the potential of stem cell technology. Rooster Bio, a US company that markets mesenchymal stem cells (MSCs) and associated products and services has raised a total of $28.2 million since 2014. Rooster bio is part of a growing number of stem cell manufacturing labs (ex. PredTech Group) that offer solutions to the regulatory issues that plague the sector.
Lonza Group is a more multifaceted pharmaceutical company with a large stem cell market share and an estimated revenue of $6 billion.
With over 1400 employees, British Columbia based Stem Cell Technologies is one of the leading producers of stem cells and stem cell related products. According to Owler, Stem Cell Technologies has a revenue of approximately $200 million and about 10 competitors. Stem Cell Technologies quality assurance and regulatory information can be found at this link.
The research stem cell market size in 2020 is approximately $1.1 billion and is expected to grow at a CAGR of 8.2% according to Grand View Research, just below the CAGR of the therapeutic stem cell market (10.6%).
Figure 4. Research stem cell market growth between 2020-2030 at a CAGR of 8.2%.
Many applications of stem cells in consumer products occur in so-called cosmeceuticals. A cosmeceutical is defined as a cosmetic that has or is claimed to have medicinal properties, especially anti-aging ones. These products include skincare lotions, injections to stimulate hair growth and tissue repair solutions. However, the FDA has not approved or deemed safe the use of human derived stem cells for cosmetic procedures and has issued warning letters to physician-owned stem cell treatment centers in California, Florida and New York. These restrictions led scientists to turn to plant derived stem cells to avoid FDA regulation.
The FDA does not recognize the term cosmeceutical and insists it has no meaning under law. Regardless of the FDA’s definition, products in the cosmeceutical industry frequently utilize plant derived stem cells to treat and prevent undesirable cosmetic outcomes.
However, skeptical dermatologists, such as Leslie Baumann MD, claim that plant stem cells are simply too large to penetrate the skin and cannot live in the cream while it stays on the shelf for months or even years According to another dermatologist, Richard Hope MD, stem cells in topical skin care products are of no value at this point. The stem cells are plant derived, dead and basically have no activity in human skin.
A research report by Future Medicine focused on the Canadian market identified around 30 businesses offering unregulated stem cell interventions. Six of these businesses stem cell procedures for cosmetic indications such as ‘wrinkles and face/neck sagging, skin imperfections and aging of the hands and prominent veins.
According to Credence Research (San Jose, CA) the stem cell market as it relates to cosmeceuticals is growing at a CAGR of 8.81% and is expected to exceed $4.8 billion by 2022.
Figure 5. Cosmetic stem cell market growth between 2020-2030 at a CAGR of 8.81%
Cosmetic Stem Cell Regulations
Cosmetic treatments that utilize stem cells (ex. Anti-wrinkle skin injections) are becoming increasingly common and the lack of effective stem cell regulation introduces uncertainties and risks to patients. Historically, clinics offering stem cell injections have been located in Asia, Mexico and Columbia but are becoming increasingly common in the US, the UK and parts of Europe. Korea has a massive cosmetics economy and has been utilizing stem cells for cosmetic purposes for years without the utilization of GMP or supply chain tracking.
Often, if not always, these products lack FDA approval, are sold online, are sourced through a dermatologist or are administered by unlicensed aestheticians. There does not yet exist a reliable and robust system for researchers and medical practitioners to validate the quality and safety of stem cell-based products. Furthermore, additional safety measures and transparency efforts offer immense value for patients undergoing medical treatments that currently or could potentially utilize stem cells.
The FDA has recognized these problems and has issued warnings to Loreal and Cell Vitals, a stem cell face cream maker, related to products that include stem cells. These creams can cost more than $100 USD per bottle and claim to have both cosmetic and, in defiance of the FDAs regulations, medicinal benefits.
The FDA has also issued official warnings to companies selling unapproved products marketed as containing exosomes, a stem cell derived biologic. It states that it has not approved any exosome products and highlights the lack of regulation in the space.
Non-profit groups and charities have also taken advantage of the opportunity for innovation in the management of stem cell technologies. For example, Anthony Nolan operates a registry for bone marrow donors to facilitate transplants, which require compatible hematopoietic stem cells, for leukemia patients.
In addition to increased safety, efficacy and accountability having in place GMP and supply chain tracking for stem cells offers revenue opportunities for motivated entrepreneurs. With a so many brands and products available to consumers, corporate ethics often heavily influence buying patterns. According to a recent analysis by IBM, 70% of purpose-driven shoppers pay an added premium of 35% more per upfront cost for sustainable purchases, such as recycled or eco-friendly goods and 57% of them are even willing to change their purchasing habits to help reduce negative environmental impact. Additionally, 79% of all consumers today state it is important for brands to provide guaranteed authenticity, like certifications, when they’re purchasing goods. Within this group, 71% are willing to pay an added premium – 37% more – for companies offering full transparency and traceability. These statistics further emphasize the motivation for developing more advanced tracking and monitoring of stem cell products across multiple sectors.
Overall the concerning lack of regulation and oversight in cosmetic stem cell applications highlights an opportunity for innovation. As cosmetic formulations advance in their complexity and sophistication an increased level of validation and manufacturing transparency is needed to ensure both the safety of consumers and the accountability of manufacturers.
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