Next Big Market: Adult Stem Cell Drugs and Therapies

Written by M.E.Garza,

According to a new report in Fortune Magazine, marketable therapies emerging from work in the (less controversial) adult stem space could be the next multi-billion dollar market.

Research on adult stem cells has generated a great deal of excitement. Adult stem cells have already been used successfully with patients: to treat cartilage defects in children; restore vision to patients who were legally blind; relieve systemic lupus, multiple sclerosis, and rheumatoid arthritis; and to serve as an aid in numerous cancer treatments.

Scientists have found adult stem cells in many more tissues than they once thought possible. This finding has led researchers and clinicians to ask whether adult stem cells could be used for transplants. In fact, adult hematopoietic, or blood-forming, stem cells from bone marrow have been used in transplants for 40 years. Scientists now have evidence that stem cells exist in the brain and the heart. If the differentiation of adult stem cells can be controlled in the laboratory, these cells may become the basis of transplantation-based therapies. These Adult stem cells can be harvested from many areas of the body, including the bone marrow, fat and peripheral blood. Once the cells have been harvested, they are sent to the lab where they are purified and assessed for quality before being reintroduced back in the patient. Since the stem cells come from the patient there is no possibility for rejection and they are used in transplants to treat diseases, such as cancers like leukemia.

According to various studies, stem cells isolated from a patient (i.e. from the bone marrow or fat) have the ability to become different cell types (i.e. nerve cells, liver cells, heart cells and cartilage cells). Studies have also shown that these are capable of “homing in” on and repairing damaged tissue. Researchers feel they are far closer to commercializing drugs based on adult stem cells than any product based on embryonic stem cells. In fact, many clinics outside of North America already tout stem cell based treatments to treat chronic diseases for which there are inadequate standard therapies. These clinics currently accept patients with Diabetes Type 2, Autoimmune Diseases, Multiple Sclerosis, Degenerative Joint Disease, Autoimmune Diseases as well as Rheumatoid Arthritis and Osteoarthritis. Unfortunately, patients seeking those treatments in other countries most often run the risk of parting with their money and being disappointed with the results.

Back in the states, Robin Young, a medical industry analyst from RRY Publications, estimates that gross sales of adult cellular therapies will be well over $100 million this year. By 2018, he says stem cell therapy revenues could grow to $8.2 billion.

“Adult derived cells are the ones that have been studied for the past 10 to 15 years and are ready for prime time,” says Debra Grega, the executive director of the Center for Stem Cell and Regenerative Medicine at Case Western Reserve University. “Large pharmaceutical companies are now wanting to get into the adult stem cell therapeutic area. That indicates to me that there is enough safety and enough efficacy that they are willing to put money in.”

Pharmaceutical giant Pfizer (NYSE:PFE)  announced in November that it would invest up to $100 million in regenerative research, which would include both adult and embryonic stem cell research, over a three to five year period.

The overall stem cell market, however, is still quite small. The California-based outfit Geron (NASDAQ:GERN) dominates the embryonic stem cell market, and is perhaps 10 years away from commercializing a spinal cord treatment based on its research.

The frontrunner in the adult stem cell space, according to Forbes, is Osiris Therapeutics, Inc.(NASDAQ:OSIR)- currently trading at $14.20 per share. Genzyme Corp. (NASDAQ:GENZ) has signed a partnership alliance with Osiris Therapeutics to develop two  late-stage adult stem cell treatments — Prochymal and Chondrogen — thought to be useful to treat a variety of diseases by controlling inflammation, promoting growth of new tissue and preventing scars. The deal will pay Osiris $130 million upfront ($75 million initially and the difference to be paid on July 1, 2009).  Assuming the drugs reach the marketplace, Genzyme will pay up to $1.25 billion in development, regulatory and sales milestone payments.

Osiris is focused on developing and marketing products to treat medical conditions in the inflammatory, orthopedic, and cardiovascular areas. Their principal biologic drug candidate, Prochymal, is being evaluated in Phase III clinical trials for three indications, including acute and steroid refractory Graft versus Host Disease (GvHD), Crohn’s disease and for the repair of gastrointestinal injury resulting from radiation exposure, and is the only stem cell therapeutic granted both Orphan Drug and Fast Track status by the United States Food and Drug Administration (FDA). Prochymal is also being developed for the repair of heart tissue following a heart attack, for protection of pancreatic islet cells in patients with type I diabetes, and for the treatment of Chronic Obstructive Pulmonary Disease (COPD). The FDA could approve within a year which fights a painful illness called “graft-versus-host disease” which afflicts transplant recipients.  If they succeed, Osiris would be the first company to gain approval for a stem cell drug. Osiris will commercialize both drugs in the U.S. and Canada, and Genzyme will sell the drugs in all other countries.

Investors should be aware that there are only a limited number of stocks which are pure plays or semi-pure plays in the stem cell industry. Below are some of the companies working in the adult stem cell medicine space:

StemCells, Inc.(NASDAQ:STEM) – a company is engaged in the discovery and development of cell-based therapeutics to treat damage to, or degeneration of, major organ systems. Currently trading at $1.60 with a market cap of $164.09M.

Cytori Therapeutics Inc. (NASDAQ:CYTX) which develops, manufactures, and sells medical technologies to enable the practice of regenerative medicine. The Company’s commercial activities are focused on cosmetic and reconstructive surgery in Europe and Asia-Pacific, and stem and regenerative cell banking (cell preservation) in worldwide. Its product pipeline includes the development of new treatments for cardiovascular disease, spinal disc degeneration, gastrointestinal disorders, liver and renal disease and pelvic health conditions. They currently trade at $3.55 with a market cap of $121.02M.

Aastrom Biosciences, Inc.(NASDAQ:ASTM) engaged in the development of autologous cell products for the repair or regeneration of human tissue. The Company’s tissue repair cell (TRC) technology involves the use of a patient’s own cells to manufacture products to treat a range of chronic diseases and serious injuries affecting vascular, bone, cardiac and neural tissues. Aastrom’s TRC-based products contain increased numbers of stem and early progenitor cells, produced from a small amount of bone marrow collected from the patient. Late last month, the company made headlines after temporarily suspending enrollment and patient treatment in its U.S. Phase II IMPACT-DCM clinical trial following a report that a patient died at home after being released from the hospital following treatment in the trial. The stock trades at $0.36 pps with a market cap of $58.44M.

ThermoGenesis Corp.(NASDAQ:KOOL) designs, manufactures and markets automated and semi-automated devices and single-use processing disposables that enable hospitals and blood banks to manufacture a therapeutic dose of stem cells, wound healing proteins or growth factors from a single unit of cord blood or the patient’s own blood in less than one hour. They currently trade at just under $0.70 and have a market cap of $37.02M.

Opexa Therapeutics, Inc. (Nasdaq:OPXA) is a biopharmaceutical company developing autologous cellular therapies with the potential to treat major illnesses, including multiple sclerosis (MS) and diabetes. The Company has a global license from Baylor College of Medicine (or Baylor) to an individualized T-cell therapeutic vaccine, Tovaxin, which is in clinical development for the treatment of MS. MS is the result of a person’s own T-cells attacking the myelin sheath that coats the nerve cells of the central nervous system (CNS). Shares currently trade under $0.60 with a market cap of $7.29M.

At BioMedReports, we will continue to explore this potentially bountiful market within the healthcare sector in coming weeks, as it sounds like investors would greatly benefit from insight into the current marketplace.

“From a Wall Street perspective, adult stem cells are a much better investment,” said Stephen Dunn of Dawson James Securities.”