Arm annual report_2014

Regenerative MedicineRegenerative MedicineALLIANCEfor

Regenerative Medicine Annual Industry Report2014

Table of Contents

Letter from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Regenerative Medicine 2014Geographic Breakdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Industry Sector Breakdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ClinicalRegenerative Medicine and Advanced Therapy Clinical Overview . . . . . . 4

Primary Cell-Based Therapeutics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Stem and Progenitor Cell-Based Therapeutics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Cell-Based Immunotherapies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Gene Therapies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Clinical Breakdown by Therapeutic Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Finance Regenerative Medicine Cell and Gene Therapy Financial Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Noteworthy Deals and Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Noteworthy Financings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Pharma and Large-Cap Biotech Survey The Pharmaceutical and Large-Cap Biotech Perspective on Regenerative Medicine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Where is Pharma Investing? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Autologous vs. Allogeneic Cells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

How Pharma and Large-Cap Biotechs are Organized to Pursue Regenerative Medicine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Where Pharma Sees Major Therapeutic Opportunities . . . . . . . . . . . . . . . . . 30

Where Pharma Sees the Major Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

ARM Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Information in this report is from March 2013 through March 2014.

1

Letter from the Chairman

2014: What a year to be in the Regenerative Medicine

space. The field has matured and we believe is now

“ready for prime time.” From the wide variety of

companies developing innovative medicines and the

creation of numerous support and services companies,

to the range of indications being researched, to the

number of IPOs and major investments in the past

12 months, it is clear that at this point regenerative

medicine has reached a level of critical mass.

Every year we see compounded successes in the

field, and the Alliance for Regenerative Medicine’s

(ARM) Industry Annual Report covers many of these

accomplishments. This year will see some exciting

developments for the field, a few of which I’d like to

highlight here. ARM is actively tracking more than 400 of

these companies and many are featured in this Report.

It’s estimated that there are now more than 700

companies worldwide with a tangible regenerative

medicine focus, ranging from divisions of multinational

corporations, to smaller firms focused on niche

products or platform technologies.

Cell-based therapies represent the most mature

sub-sector of regenerative medicine, and at this

point, hundreds of thousands of patients around the

world have been treated with these therapies. As

the standard-of-care has now evolved to include FDA-

approved cell therapies, new frontiers are also opening.

Exciting breakthroughs in cell-based immune therapy

and gene therapy have opened new avenues to

transform patient care.

2014 is also a big year for regenerative medicine clinical

milestones. Starting on page 9, this report highlights the

major anticipated clinical events of this year.

ARM has also surveyed our colleagues in the

pharmaceutical industry, to gauge the level of interest

and support Big Pharma has for supporting and

developing regenerative medicines. We are pleased

to feature the results of ARM’s Pharma Survey,

demonstrating the increasing level of investment and

activity, starting on page 24.

In March, we were thrilled to see the culmination of

many years of effort, when U.S. Senators Barbara Boxer

(D-CA) and Mark Kirk (R-IL) introduced the Regenerative

Medicine Promotion Act to help accelerate the discovery

and development of new regenerative medicines.

Government regulation can play an important role

in either fostering or impairing innovation. We need

to promote a rigorous, yet efficient and transparent,

CBER regulatory process for cell-based therapies. We

also need to advocate for value-based health policy;

otherwise we will likely see short-sighted decisions

based only around cost controls vs. value creation.

The promise of our field is to deliver cost-effective, life-

saving or life-enhancing medicines which target the

underlying disease, rather than the symptoms. We must

ensure that healthcare reform prizes proven innovation,

and ultimately changes patients’ lives.

This Report is a terrific resource for those who would

like to explain our field in more detail. So let’s dive in to

2014 and learn more about what is on the horizon.

Geoff MacKay

Chairman, Alliance for Regenerative Medicine

President and CEO, Organogenesis Inc.

268North

America

100Europe

56%Therapeutics

& Devices 19%Tools

13%Banks

12%Services

39Asia

11Australia &

New Zealand

Global Breakdown of 418 Leading Companies

2

ARM’s Definition of Regenerative MedicineRegenerative medicine research translates fundamental knowledge in biology, chemistry and physics into materials, devices, systems and a variety of therapeutic strategies, which augment, repair, replace or regenerate organs and tissue.

These therapies represents a new paradigm in human health with the potential to resolve unmet medical needs through technologies that are specifically developed to modify diseases and enable tissue regeneration or replacement. This includes cells, biologics, genes or drugs controlling pathways related to disease causation in addition to regulating tissue regeneration, as well as synthetic or natural scaffolds for tissue engineering.

Regenerative Medicine Industry 2014 It’s estimated that there are more than 700 companies worldwide with a regenerative medicine focus ranging from divisions of multinational corporations to smaller firms focused on niche products or platform technologies. The Alliance for Regenerative Medicine (ARM) is actively tracking 418 of these leading companies. This report covers the clinical activity and trends of 247 therapeutically-focused regenerative medicine and advanced therapy companies developing cell therapies, gene therapies and gene-modified cellular therapies.

Cell TherapiesPrimary cell-based therapies represent the most mature sub-sector of regenerative medicine. These therapies are composed of terminally differentiated adult cells isolated directly from human tissue including fibroblasts, keratinocytes, chondrocytes, osteoblasts, myocytes, hepatocytes, leukocytes, lymphocytes and endothelial cells, to name a few.

Stem cell and progenitor cell therapies represent the largest therapeutic sub-sector of the regenerative medicine industry. These therapies are based on a variety of different stem cell types including hematopoietic stem cells, mesechymal stem cells, neural stem cells, epithelial stem cells, embryonic stem cells and more recently, induced pluripotent stem cells.

First generation cell-based immunotherapy products are based on interleukins, cytokines, chemokines, etc., but an emerging class are cell-based immuno-therapies that employ lymphocytes, macrophages, dendritic cells, T-cells, natural killer cells and cytotoxic T lymphocytes. Some are autologous, while others are allogeneic, and many are being genetically modified to induce the desired immune response.

Gene TherapiesGene therapies address defective or mutated genes needing either correction or improved regulation through the insertion of properly functioning or genetically altered genes into a patient’s cells. The largest segment of gene therapies targets cancer, however regenerative-focused gene therapies are being developed for HIV and other infectious diseases, ocular disease, cardiovascular disease as well as several monogenic diseases.

268North

America

100Europe

56%Therapeutics

& Devices 19%Tools

13%Banks

12%Services

39Asia

11Australia &

New Zealand

Global Breakdown of 418 Leading Companies

3

The majority of regenerative medicine companies are therapeutically focused and developing a variety of technologies including cell-based therapies, small molecule and biologic based therapies, gene therapies, tissue-engineered biomaterials and scaffolds and implantable devices. The second largest group of regenerative medicine companies are developing tools such as stem cells for drug discovery and toxicity testing, as well as clinical tools, bioprocessing tools and platforms that include equipment, consumables, reagents and storage systems to support commercialization and clinical applications. The field also incorporates a variety of service companies specializing in clinical trial management, manufacturing, characterization, engineering and quality control, among others. For the purpose of this report we will concentrate on two therapeutic pillars where the majority of clinical activity is occurring—cell and gene therapies.

Company Breakdown by Industry Sectors

Cell-Based Immunotherapies

Primary Cell-Based Therapeutics

Stem Cell and Progenitor Cell-Based Therapeutics

Gene Therapies

4

Regenerative Medicine and Advanced Therapy Overview

247Total

TherapeuticCOMPANIES

466Total UniqueTherapeuticPRODUCTS

699Total Preclinical & Clinical Stage

TRIALS

91Companies

69 Companies

45 Companies

42 Companies

154 Unique Products

105 Unique Products

70 Unique Products

137 Unique Products

9 Marketed Products

1 Approved Product

17 Marketed Products

1 Marketed Product

289Trials

143Trials

94Trials

173Trials

uniQure’s Glybera

Other

Respiratory

Hematology

Genitourinary Disorders

Immunology & Inflammation

Gastroenterology

Infectious Disease

Ophthalmology

Endocrine, Metabolic & Genetic

Musculoskeletal

Central Nervous System

Dermatology

Cardiovascular

Oncology64

63

18

101

32

36

35

14

23

27

9

13

9

14

67

38

23

19

19

16

15

14

9

7

5

5

2

2

Approved/Marketed Products

38%Dermatology

30%Musculoskeletal

4% Oncology4% Cardiovascular4% Ophthalmology

8%Immunology

& Inflammation

12%Other

Preclinical & Phase I

Number of Industry- Sponsored Trials by Phase

Phase II & III

5

Regenerative Medicine and Advanced Therapy Clinical Breakdown by Therapeutic Areas

45Companies

70Unique

Products

17 Marketed

Products

Primary Cell-Based Therapeutic Companies

Ophthalmology

Hematology

Ear Diseases


Respiratory

Dental


Gastroenterology

Cardiovascular

Oncology

Musculoskeletal

Endocrine, Metabolic & Genetic Disorders

Dermatology8

2

6

2

13

1

1

0

0

10

1

1

1

18

7

6

5

3

3

3

2

1

0

0

0

0



Phase II & III

6

35

35

14

10

PRECLINICAL

PHASE I

PHASE II

PHASE III94Trials

Company Product Indication

Avita Medical ReCell Dermatology

BioD BioDFence Surgical Protection

BioD BioDFactor Wound Healing

Educell d.o.o. UroArt Vesicoureteral Reflux

Fibrocell Science azficel-T Dermatology

Genzyme, a Sanofi Company Carticel, Carticel Plus Cartilage Defects

Genzyme, a Sanofi Company Epicel Burns

MacroCure CureXcell Wound Healing

MiMedx Group, Inc. EpiFix Wound Healing

Organogenesis Inc. Dermagraft Diabetic Foot Ulcer

Organogenesis Inc. Gintuit Mucogingival Conditions

Organogenesis Inc. Apligraf Diabetic Foot Ulcer

Orthofix Trinity ELITE/Trinity Evolution Musculoskeletal Defects

Osiris Therapeutics Grafix Wound Healing

TETEC Tissue Engineering Technologies

Novocart Inject, Novocart 3D, Novocart Disc Cartilage Defects

TiGenix NV ChondroCelect Cartilage Defects

A Sampling of Commercial Primary Cell Therapy and Allograft Products

Therapeutic Breakdown of Commercially Available Primary Cell Therapies and Allograft Products

40%Dermatology

28%Musculoskeletal 16%

Surgical

Dental

Other

8%8%

7

91Companies

154Unique

Products

9 Marketed

Products

Stem and Progenitor Cell-Based Companies and Products

65%Allogeneic

35%Autologous

Percent of autologous vs. allogeneic stem and progenitor

cell-based products

Other

Respiratory

Hematology


Dermatology

Surgery

Radiation Injury

Ophthalmology

Oncology


Gastroenterology



Musculoskeletal

Cardiovascular35

15

61

21

12

10

10

17

6

0

4

4

4

6

5

25

13

9

6

6

5

4

3

2

2

1

1

1

1

0



Phase II & III

8

177

69

PRECLINICAL

PHASE I 32

PHASE II

PHASE III: 11 289

Trials

Company Product Indication Expected Filing Date

NeoStem VSELs Periodontitis 2Q14

ViaCyte, Inc. VC-01 Insulin-Dependent Diabetes Mellitus 3Q14

ReNeuron Group plc ReN003 Retinitis Pigmentosa 3Q14

International Stem Cell Corporation

human parthenogenetic stem cells Parkinson's Disease 3Q14

NeoStem AMR-001 Congestive Heart Failure 4Q14

Q Therapeutics Q-Cells Amyotrophic Lateral Sclerosis 4Q14

A Sampling of IND Filings Expected in 2014

9

A Sampling of Trials with Expected 2014 Clinical Readouts

Company Product Indication Milestone Estimated Date

Athersys, Inc. MultiStem Ulcerative Colitis Phase II trial result 2Q14

Athersys, Inc. MultiStem Ischemic Stroke Preliminary Phase II trial result 2Q14

Cytomedix ALD-401 Ischemic Stroke Phase II trial result 2Q14

Cytori Therapeutics, Inc. ADRCs Ischemia Phase II trial result 2Q14

Kiadis Pharma ATIR Hematological Malignancies Phase II trial result 2Q14

Neuralstem Inc. NSI-566 Amyotrophic Lateral Sclerosis Phase II trial result 2Q14

NeoStem AMR-001 Myocardial Infarction Phase II trial result 3Q14

StemCells, Inc. HuCNS-SC Spinal Cord Injuries Additional Phase I/II trial result 3Q14

ReNeuron Group plc ReN009 Critical Limb Ischemia Phase I trial result 4Q14

StemCells, Inc. HuCNS-SC Dry Age-Related Macular Degeneration Preliminary Phase I/II trial result 4Q14

Tengion, Inc. Neo-Kidney Augment Chronic Kidney Failure Preliminary Phase I trial result 4Q14

TiGenix NV Cx601 Perianal Fistula Final Phase III trial result 4Q14

10

42Companies

137Unique

Products

1 Marketed

Products

Cell-Based Immunotherapy Companies


Prima BioMed CVac-CAN-003 Ovarian Cancer Final Phase II trial analysis 2Q14

Northwest Biotherapeutics, Inc. DCVax-Direct Solid Tumors Phase I/II trial result 2Q14

Immunocellular Therapeutics, Ltd. ICT-107 Glioblastoma

Multiforme Additional Phase II trial result 3Q14

Argos Therapeutics, Inc. AGS-004Human Immunodeficiency Virus Infection

Phase IIb trial result 3Q14

Northwest Biotherapeutics, Inc. DCVax-L Glioblastoma

Multiforme Phase III trial result 4Q14

Adaptimmune Limited NY-ESO-1/LAGE-1 Multiple Myeloma Final Phase I/II trial analysis 4Q14


77

54

PRECLINICAL

PHASE I

PHASE II

PHASE III

30

12173

Trials




Gastroenterology

Infectious Diseases

Oncology72

10

9

12

2

2

56

5

2

2

1

0



Phase II & III


uniQure NV Glybera Hyperlipoproteinemia European Launch 3Q14

Taxus Cardium Generx Ischemic Heart Diseases Phase III trial analysis 3Q14

Juventas Therapeutics JVS-100 Cardiovascular Failure Phase II trial result 4Q14

Juventas Therapeutics JVS-100 Critical Limb Ischemia Phase II trial result 4Q14


11

69Companies

105Unique

Products

1 Approved

Product:uniQure’s Glybera

Gene Therapy Companies

80

37

PRECLINICAL

PHASE I

PHASE II

PHASE III: 6

20

143Trials

16

10

3

4

18

17

14

5

7

3

3

19

6

4

4

3

2

2

2

1

0

0Immunology & Inflammation

Gastroenterology

Hematology

Musculoskeletal



Ophthalmology

Infectious Diseases

Dermatology

Cardiovascular

Oncology



Phase II & III

12

Regenerative Medicine and Advanced Therapy Clinical Trial Breakdown by

Therapeutic Catagory

Company Product / Indication Phase I Phase II Phase III

Musculoskeletal

Bone Therapeutics SA PREOB / Avascular Necrosis, Bone Fracture

CellCoTec INSTRUCT / Articular Cartilage Lesion of the Knee

Cellular Biomedicine Group ReJoin / Osteoarthritis

Co.don AGco.don chondrosphere / Articular Cartilage Lesion of the Femoral Condyle

Cytori Therapeutics, Inc. ADRCs / Hamstring Injury

DePuy Mitek, Inc. CAIS / Defect of Articular Cartilage

Histogenics NeoCart / Articular Cartilage Damage

ISTO Technologies DeNovoET / Articular Cartilage Damage

ISTO Technologies NuQu / Degenerative Disc Disease

Mesoblast Ltd. MPCs / Spinal Fusion

Mesoblast Ltd. MPCs / Intervertebral Disc Repair

Pluristem Therapeutics Inc. PLX-PAD / Muscle Injury

RepliCel RCT01 / Achilles Tendonitis

Tissue Engineering Technologies AG

Novocart Disc Plus / Lumbar Degenerative Disc Disease

TissueGene, Inc. TissueGene-C / Degenerative Arthritis

TissueGene, Inc. TissueGene-C / Knee Osteoarthritis

A sampling of cell and gene therapy companies in clinical stages of development

Musculoskeletal-related conditions in the U.S. account for 132 million visits to physicians’ offices, 29 million visits to emergency rooms,

15 million hospital outpatient visits and cost over $850 billion each year. Further, musculoskeletal injuries in the U.S. cause workers to miss more than

440 million days of work annually.

Source: Penn Center for Musculoskeletal Disorders, Overview of the Penn Center for Musculoskeletal Disorders, Perelman School of Medicine website, http://www.med.upenn.edu/pcmd/overview.shtml

13


Amorcyte/NeoStem AMR001 / Myocardial Infarction

Athersys, Inc. MultiStem / Myocardial Infarction

Bioheart, Inc. LipiCell / Congestive Heart Failure

Bioheart, Inc. MyoCell / Congestive Heart Failure

Capricor Therapeutics, Inc. CAP1002 / Myocardial Infarction

Capricor Therapeutics, Inc. CAP1001 / Myocardial Infarction

Cardio3 BioSciences C3BS-CQR-1 / Heart Failure

Celgene Corporation PDA002 / Peripheral Arterial Disease

Cytomedix ALD201 / Ischemic Heart Diseases

Cytomedix ALD301 / Critical Limb Ischemia

Cytomedix ALD301 / Intermittent Claudication

Cytori Therapeutics, Inc. ADRCs / Myocardial Infarction

Cytori Therapeutics, Inc. ADRCs / Ischemia

Harvest Technologies Corp. BMAC / Critical Limb Ischemia

Juventas Therapeutics JVS100 / Congestive Heart Failure

Juventas Therapeutics JVS100 / Crititcal Limb Ischemia

Mesoblast Ltd. Revascor / Congestive Heart Failure

Mesoblast Ltd. Revascor / Myocardial Infarction

Mesoblast Ltd. Autologous MPCs / Ischemia

Pharmicell Hearticellgram-AMI / Acute Myocardial Infarction

Pluristem Therapeutics Inc. PLX-PAD / Intermittent Claudication

Pluristem Therapeutics Inc. PLX-PAD / Critical Limb Ischemia

Stemedica Cell Technologies, Inc.

Allogeneic Mesenchymal Bone Marrow Cells / Myocardial Infarction

TotipotentRX/Cesca Therapeutics

Autologous bone marrow derived stem cells / Critical Limb Ischemia

TotipotentRX/Cesca Therapeutics

Autologous bone marrow derived stem cells / Myocardial Infarction

Cardiovascular/Vascular Disease

Between 2012 and 2030, total stroke-related costs are projected to triple, from $71.6 billion to $184.1 billion.

Source: American Heart Association, Heart Disease and Stroke Statistics—2014 Update, http://circ.ahajournals.org/content/129/3/e28.full#ref-726

14


Adaptimmune LimitedAutologous Genetically modified T cells / Multiple Myeloma

Adaptimmune LimitedNY-ESO-1/LAGE-1 / Metastatic Melanoma, Multiple Myeloma, Ovarian Cancer

Aduro BiotechGVAX Leukemia Vaccine / Acute Myeloid Leukemia, Chronic Myeloid Leukemia

Aduro Biotech GVAX Pancreatic Cancer Vaccine / Pancreatic Cancer

Advantagene, Inc.AdVtk Therapy / Colon Cancer, Malignant Pleural Effusion, Mesothelioma, Ovarian Cancer

Advantagene, Inc. AdVtk Therapy / Glioma

Advantagene, Inc. ProstAtak / Local Prostate Cancer

Advantagene, Inc. PancAtak / Locally Advanced Pancreatic Cancer

Argos Therapeutics, Inc. AGS003 / Metastatic Renal Cell Carcinoma

Argos Therapeutics, Inc. AGS005 / Chronic Lymphoid Leukemia

Argos Therapeutics, Inc. RNA-Loaded Dendritic Cell Vaccine / Melanoma

Bellicum Pharmaceuticals, Inc.BPX101 with AP1903 / Hormone Refractory Metastatic Prostate Cancer

Bellicum Pharmaceuticals, Inc. BPX501 / Hematological Malignancies

California Stem Cell/NeoStemTumor Stem Cell Specific Dendritic Cell Therapy / Renal Cell Carcinoma

Cellerant Therapeutics, Inc. CLT008 / Cancer Chemotherapy Induced Neutropenia

Coronado Biosciences CNDO109 / Acute Myeloid Leukemia

DCPrime B.V. DCP001 / Acute Myeloid Leukemia

Dendreon Corporation Provenge / Local Prostate Cancer

Dendreon Corporation Provenge / Prostate Cancer

Erytech Pharma GRASPA / Acute Myeloid Leukemia

Fate Therapeutics ProHema / Hematological Malignancies

Gamida Cell NiCord / Hematological Malignancies

Gamida Cell StemEx / Hematological Malignancies

Glycostem Natural Killer Cells / Acute Myeloid Leukemia

Immunocellular Therapeutics, Ltd. ICT121 / Glioblastoma Multiforme

Kite PharmaEngineered Adoptive Cell Therapy / Non-Hodgkin’s Lymphoma

Lentigen Corporation LG723 / Melanoma

Lentigen Corporation LG740 / Hematological Malignancies

Oncology

15


Lion BiotechnologiesContego / Breast Cancer, Colorectal Cancer, Metastatic Melanoma, Ovarian Cancer

MolMed S.p.A. HSV-TK / Hematological Malignancies

NewLink Genetics, Inc. HyperAcute Melanoma Immunotherapy / Melanoma

NewLink Genetics, Inc.HyperAcute Prostate Cancer Vaccine / Hormone Refractory Prostate Cancer

NewLink Genetics, Inc. HyperAcute Prostate Cancer Vaccine / Metastatic Renal Cell Carcinoma

NewLink Genetics, Inc. HyperAcute Pancreatic Cancer Vaccine / Pancreatic Cancer

NewLink Genetics, Inc. HyperAcute Lung Immunotherapy / Non-small Cell Lung Cancer

Northwest Biotherapeutics, Inc. DCVax-L / Brain Cancer

Northwest Biotherapeutics, Inc. DCVax Direct / Solid Tumors

Northwest Biotherapeutics, Inc. DCVax Direct / Metastatic Colon Cancer

Northwest Biotherapeutics, Inc. DCVax L Ovarian / Metastatic Ovarian Cancer

Northwest Biotherapeutics, Inc. DCVax Prostate / Hormone Refractory Prostate Cancer

Oxford BioMedicaMetXia with Cyclophosphamide / Breast Cancer, Melanoma, Pancreatic Cancer

Oxford BioMedicaTroVax / Colorectal Cancer, Hormone Refractory Prostate Cancer, Mesothelioma

Oxford BioMedica TroVax / Metastatic Renal Cell Carcinoma

Sangamo BioSciences SB313 / Glioblastoma Multiforme

SOTIODcvac/Pca / Hormone Refractory Metastatic Prostate Cancer, Local Prostate Cancer, Metastatic Prostate Cancer

Tengion, Inc. Neo-Urinary Conduit / Bladder Cancer

Vical, Inc. Leuvectin / Metastatic Melanoma, Sarcomas

Oncology continued


Infectious Diseases

Argos Therapeutics, Inc. AGS004

Calimmune Cal-1

Cell Medica Cytovir ADV

Cell Medica Cytovir CMV

Sangamo BioSciences SB-728

16

Cytomedix ALD601 / Lysosomal Storage Disorders

Living Cell Technologies Limited DIABECELL / Type 1 Diabetes

Mesoblast Ltd. MPCs / Diabetic Nephropathy

Mesoblast Ltd. MPCs / Non-Insulin-Dependent Diabetes Mellitus

NeoStem Treg Program / Insulin-Dependent Diabetes Mellitus

Oxford BioMedica UshStat / Usher syndrome type 1B

Promethera Hepastem / Metabolic Disorders

Promethera Hepastem / Urea Cycle Disorder

t2cure t2c002/t2c003 / Diabetic Neuropathy


Endocrine, Metabolic and Genetic Disorders

Diabetes affects 25.8 million people or 8.3% of the U.S. population. Total direct and indirect medical cost for diabetes care in the U.S. as of 2007

equaled $174 billion—$116 billion of that was direct medical costs.Source: Centers for Disease Control and Prevention, 2011 National Diabetes Fact Sheet,

Diabetes Public Health Resource, http://www.cdc.gov/diabetes/pubs/factsheet11/fastfacts.htm

Athersys, Inc. MultiStem / Ulcerative Colitis

Celgene Corporation PDA001 / Crohn’s Disease

Innovacell Biotechnologie AG ICEF15 / Fecal Incontinence

Mesoblast Ltd. Prochymal / Crohn’s Disease

TiGenix NV Cx601 / Perianal Fistula

TxCell SA OvaSave / Crohn’s Disease


Gastroenterology



AlloCure AC607 / Acute Kidney Failure

Cook Myosite AMDC / Stress Urinary Incontinence

Cytonet Group HHLivC / Urea Cycle Disorders

Innovacell Biotechnologie AG ICES13 / Stress Urinary Incontinence

Tengion, Inc. Neo-Kidney Augment / Chronic Kidney Failure

uniQure NV/Digna Biotech AAV5-PB6D / Acute Intermittent Porphyria

17

Athersys, Inc. MultiStem / Ischemic Stroke

bluebird bio Lenti-D / Adrenoleukodystrophy

BrainStorm Cell Therapeutics SC Therapy / Amyotrophic Lateral Sclerosis

Cytomedix ALD401 / Ischemic Stroke

MEDIPOST Neurostem / Alzheimer’s Disease

Neuralstem Inc. NSI567 / Spinal Cord Injuries

Neuralstem Inc. NSI566 / Amyotrophic Lateral Sclerosis

Neuralstem Inc. NSI566 / Ischemic Stroke

NsGene A/S NsG0202 / Alzheimer’s Disease

Oxford BioMedica Prosavin / Idiopathic Parkinson’s Disease

REGENX Biosciences CLN2 Gene Therapy / Batten Disease

ReNeuron Group plc ReN001 / Cerebral Ischemia

SanBio, Inc. SB623 / Ischemic Stroke

Sangamo BioSciences CERE-110 / Alzheimer’s Disease

StemCells, Inc. HuCNS-SC / Batten Disease

StemCells, Inc. HuCNS-SC / Pelizaeus-Merzbacher Disease

StemCells, Inc. HuCNS-SC / Spinal Cord Injuries

uniQure NV AAV2-GDNF / Parkinson’s Disease



In 2012, Americans spent and estimated $200 billion to care for those with Alzheimer’s, including $140 billion

to Medicare and Medicaid.

Unless something is done, the costs of Alzheimer’s in 2050 are estimated to total $1.1 trillion (in today’s dollars).

Costs to Medicare and Medicaid will increase nearly 500%.

Source: Alzheimer’s Association, March 2012 Fact Sheet, https://www.alz.org/documents_custom/2012_facts_figures_fact_sheet.pdf

18

Advanced Cell Technology Retinal Pigmented Epithelial therapy / Stargardt’s Disease

AGTC AAV2-sFLT01 / Wet Age-Related Macular Degeneration

AGTC AAVRPE65 / Leber’s Congenital Amaurosis

Avalanche Biotech AVA101 / Wet Age-Related Macular Degeneration

Neurotech NT-501 / Retinitis Pigmentosa

NightstaRx Limited AAV.REP1 / Choroideremia

Oxford BioMedica RetinoStat / Wet Age-Related Macular Degeneration

Oxford BioMedica StarGen / Stargardt’s Disease

StemCells, Inc. HuCNS-SC / Dry Age-Related Macular Degeneration


Ophthalmology

The estimated annual total financial burden to the U.S. economy of four major adult vision problems (AMD, cataract, diabetic retinopathy and

glaucoma), refractive errors, visual impairment and blindness is $35.4 billion.

Source: The Economic Impact of Vision Problems: The Toll of Major Adult Eye Disorders, Visual Impairment and Blindness on the U.S. Economy, http://www.preventblindness.net/site/DocServer/Impact_of_Vision_Problems.pdf?docID=1321

(published by Prevent Blindness America, 2007)

bluebird bio LentiGlobin / Beta Thalassemia

bluebird bio LentiGlobin / Sickle Cell Anemia

Cell Medica Cytorex EBV / Lymphoma

Gamida Cell NiCord / Sickle Cell Anemia

REGENX Biosciences Factor IX Gene therapy / Hemophilia B

uniQure NV AMT060 / Hemophilia B

uniQure NV/Digna AMT021 / Acute Intermittent Porphyria


Hematology

19

Avita Medical ReCell / Burn Scar

Avita Medical ReCell / Hypertrophic Scar

Celgene Corporation PDA002 / Diabetic Foot Ulcer

Fibrocell Science azficel-T / Burn Scar

Histogen Inc. Regenica / Androgenetic Alopecia

Intercytex ProtoDerm / Skin Ulcers

IntercytexVavelta / Burns, Acne Scars, Contracture Scar, Epidermolysis Bullosa, Wrinkles

Juventas Therapeutics JVS100 / Surgical Wound

MacroCure CureXcell / Diabetic Foot Ulcer

NeoStem VSELs / Wound

Stratatech Corporation StrataGraft / Burns

Taxus Cardium Genedexa / Diabetic Foot Ulcer


Dermatology

Acorda Therapeutics Ampydin / Guillain-Barre Syndrome

Argos Therapeutics, Inc. AGS009 / Systemic Lupus Erythematosus

Athersys, Inc. MultiStem / Bone Marrow Transplantation

Athersys, Inc. MultiStem / Liver Transplantation

Cellerant Therapeutics, Inc. CLT008 / Cord Blood Transplants

Kiadis Pharma Reviroc / Bone Marrow Transplantation

Kiadis Pharma Rhitol / Graft-Versus-Host Disease

MEDIPOST Promostem / Graft-Versus-Host Disease

Mesoblast Ltd. Revascor / Bone Marrow Transplantation

Opexa Therapeutics, Inc. Tcelna / Secondary Progressive Multiple Sclerosis

Pluristem Therapeutics Inc. PLX-BMT / Bone Marrow Transplantation

TiGenix NV Cx611 / Rheumatoid Arthritis


Immunology and Inflammation

20

Regenerative Medicine Cell and Gene Therapy Financial Performance

$4.74Billion

Combined Regenerative

Medicine Field

Acquisitions

Public Offerings

Partnerships

Grants

PIPES

Venture Capital and Private Equity$737.7

$530.9

$103.2

$1,954.7

$1,116.2

$297.3

$181.3 Up Front

Dollars Raised

$437.9Million

Primary Cell Therapy

$11.3

0

$0.3

$347.2

$79.1 Public Offerings

Partnerships

Grants

PIPES

Venture Capital and Private Equity

Dollars Raised

$1.872Billion

Stem Cell and Progenitor Cell

Therapy

$81.4

$367.3

$80.7

$855.9

$352.4

$133.8

$57.4 Up Front

Acquisitions

Public Offerings

Partnerships

Grants

PIPES


Dollars Raised

Financings from March 2013 to March 2014.

21

Deal Type Company(s) Total Deal Value

Upfront Payment Date

Collaboration Tengion / Celgene $15M $15M 7/1/13

Merger Capricor / Nile Therapeutics NA - 7/8/13

Commercialization Agreement uniQure NV / Chiesi Farmaceutici $39.8M $39.8M 7/9/13

Collaboration Stratatech / BARDA Contract $47.2M - 7/31/13

Acquisition Mesoblast / Osiris Stem Cell Therapeutic Business $100M $50M 10/11/13

Licensing Deal Cytori Therapeutics, Inc. / Lorem Vascular $500M $24M 11/4/13

Licensing Deal Pluristem / CHA Biotech $10.4M $10.4M 12/17/13

Acquisition Intrexon / Medistem $26M - 12/20/13

Collaboration/Licensing Deal Capricor / J&J $325M $12.5M 1/6/14

Collaboration Sangamo / Biogen Idec $320M $20M 1/9/14

Acquisition of Dermagraft Organogenesis Inc. / Shire $300M 0 1/17/14

Acquisition SillaJen / Jennerex $150M - 3/17/14

$580.7Million

Cell-Based Immunotherapy

$249.8

$102.4

$4.9

$110.6

$99.5

$13.5

$7.9 Up Front

Acquisitions

Public Offerings

Partnerships

Grants

PIPES


Dollars Raised

Noteworthy Deals and Acquisitions

$1.85Billion

Gene Therapy

$395.2

$61.2

$17.3

$641.0

$585.2

$150.0

$116 Up Front

Acquisitions

Public Offerings

Partnerships

Grants

PIPES


Dollars Raised

22

01/13/13Juno Therapeutics, Inc. raises

$145M in a Series A round

02/12/13Voyager Therapeutics

raises $45M in Series A round

03/14/13Mesoblast Ltd. raises $175.3M

in private placement

05/28/2013Jennerex

Biotherapeutics, Inc. raises $21.6M in

private placement

06/24/2013bluebird bio closes

$116.1M IPO

08/12/2013Fate Therapeutics raises $20M in private offering

10/08/2013StemCells, Inc. raises $18.6M

in public offering

10/09/2013NeoStem raises

$40.3M in public offering

11/20/2013TiGenix NV raises

$16.2 million in private placement

10/22/13Spark Therapeutics launches with $50M capital commitment

12/13/2013Stem Cell

Therapeutics raises $31.13


07/04/13Cardio3 BioSciences

closes $30M IPO

02/27/13Celladon

Corporationcloses $50.6M IPO

05/15/2013Kite Phara raises $35M

in Series A round

07/01/2013Tengion, Inc. raises $18.6M

07/10/2013ViaCyte, Inc.

raises $10.6M in private equity

08/26/2013Argos

Therapeutics, Inc. raises $42.5M in a Series E round

08/13/2013Opexa Therapeutics, Inc.

raises $19.3M in public offering

09/04/2013 iPierian

secures $30M in venture financing

06/04/2013StemCells, Inc. secures $30M

07/30/2013Cellular Dynamics

International closes $46.1M IPO

09/23/2013Sangamo

BioSciences raises $74.2M in public offering

11/25/13Editas Medicine raises


10/04/13Fate Therapeutics closes $46M IPO

11/06/2013Lion Biotechnologies

raises $23.3M in private placement

03/19/2014Sangamo

BioSciences raises $100M in public offering

02/10/2014uniQure NV closes

$91.8M IPO

01/10/2014AGTC closed $50M IPO

12/12/13MiMedix raises $34M in public

offering

01/10/2014Athersys, Inc. raises

$20.5M in direct offering

11/25/2013Northwest Biotherapeutics, Inc.

raises $27M in public offering

02/20/2014Argos Therapeutics, Inc.

closes $45M IPO

01/04/14Bellicum

Pharmaceuticals, Inc. raises $14.7M in Series B Round

March2013

April2013

May2013

June2013

July2013

August2013

September2013

October2013

November2013

December2013

January2014

February2014

March2014

A Sampling of Noteworthy FinancingsMarch 2013 through March 2014

“We believe that regenerative medicine is at a critical juncture —

similar to the position of monoclonal antibodies in the mid to late 90s.”

23

01/13/13Juno Therapeutics, Inc. raises


02/12/13Voyager Therapeutics

raises $45M in Series A round

03/14/13Mesoblast Ltd. raises $175.3M


05/28/2013Jennerex

Biotherapeutics, Inc. raises $21.6M in

private placement

06/24/2013bluebird bio closes

$116.1M IPO

08/12/2013Fate Therapeutics raises $20M in private offering

10/08/2013StemCells, Inc. raises $18.6M

in public offering

10/09/2013NeoStem raises

$40.3M in public offering

11/20/2013TiGenix NV raises

$16.2 million in private placement

10/22/13Spark Therapeutics launches with $50M capital commitment

12/13/2013Stem Cell

Therapeutics raises $31.13


07/04/13Cardio3 BioSciences

closes $30M IPO

02/27/13Celladon

Corporationcloses $50.6M IPO

05/15/2013Kite Phara raises $35M

in Series A round

07/01/2013Tengion, Inc. raises $18.6M

07/10/2013ViaCyte, Inc.

raises $10.6M in private equity

08/26/2013Argos

Therapeutics, Inc. raises $42.5M in a Series E round

08/13/2013Opexa Therapeutics, Inc.

raises $19.3M in public offering

09/04/2013 iPierian

secures $30M in venture financing

06/04/2013StemCells, Inc. secures $30M

07/30/2013Cellular Dynamics

International closes $46.1M IPO

09/23/2013Sangamo

BioSciences raises $74.2M in public offering

11/25/13Editas Medicine raises


10/04/13Fate Therapeutics closes $46M IPO

11/06/2013Lion Biotechnologies

raises $23.3M in private placement

03/19/2014Sangamo

BioSciences raises $100M in public offering

02/10/2014uniQure NV closes

$91.8M IPO

01/10/2014AGTC closed $50M IPO

12/12/13MiMedix raises $34M in public

offering

01/10/2014Athersys, Inc. raises

$20.5M in direct offering

11/25/2013Northwest Biotherapeutics, Inc.

raises $27M in public offering

02/20/2014Argos Therapeutics, Inc.

closes $45M IPO

01/04/14Bellicum

Pharmaceuticals, Inc. raises $14.7M in Series B Round

March2013

April2013

May2013

June2013

July2013

August2013

September2013

October2013

November2013

December2013

January2014

February2014

March2014

24

The Alliance for Regenerative Medicine’s Science and Technology Committee began a project in the summer of 2013 to survey the R&D, product development and business development leadership in top pharma and biotech companies regarding their strategic perspectives of regenerative medicine. The primary objective of the survey was to engage pharma and biotech executives to speak candidly and openly about their views of the sector—highlighting opportunities and the therapeutic potential of the technologies while also addressing concerns regarding major regulatory and commercial hurdles yet to be overcome. The

summary that is provided herein is a compilation of their responses that provides an unprecedented look into the thought process used by large companies to evaluate regenerative medicine opportunities.

Survey RespondentsAllergan, Amgen, Baxter, Biogen Idec, Boehringer Ingelheim, Celgene, Eli Lilly, GSK, Johnson & Johnson, Merck Serono, Novartis, Novo Nordisk, Pfizer, Roche, Sanofi-Genzyme, Shire

Pharmaceutical and Large-Cap Biotechnology Survey

“Our working definition of regenerative medicine includes a broad range of products that leverage the body’s intrinsic abilities to heal itself.”

“Regenerative medicine is the use of cells or entities that stimulate cells to repair or replace damaged tissues.”

“We define regenerative medicine broadly. We include all technologies that are regenerative including cells, antibodies, gene therapies, small molecules, biologics, biomaterials, etc. Our company also considers stem cells for drug screening and safety toxicology testing as regenerative medicine. Immunotherapy is not positioned within our regenerative medicine group.”

How Pharmaceutical and Large-Cap Biotech Companies Define Regenerative Medicine

“Our team views ‘cell-based immunotherapy’ as regenerative medicine with a large focus on oncology.”

“Regenerative medicine means any therapy that will repair or restore cells and physiology leading to improved function.”

“We view the field of regenerative medicine in the same way ARM does. In fact, our group was part of the team that came up with ARM’s definition of regenerative medicine.”

“Within our venture group we don’t have a specific definition, but from our understanding it can include a range of technologies including small molecules, biomaterials, cell-based therapies and stem cells. We would also include gene therapy.”

re•gen•er•a•tive med•i•cine

25

Pharmaceutical and Large-Cap Biotechnology Survey

The Pharmaceutical and Large-Cap Biotech Perspective on Regenerative Medicine

“We are actively looking for a partner in the cell therapy business and are open to any relationship from partnership to divestiture.”

“We realize it’s a frontier technology beyond a five year time horizon and we don’t want to miss the boat. Our company is engaged in various levels and

resources are internally devoted.”

“We are engaged in the Alliance for Regenerative Medicine because we want expertise, we want to be at the right place at the right time.”

Of the 16 pharmaceutical and large-cap biotech companies interviewed, the detailed discussions revealed each of them is investing in some aspect of regenerative medicine and view the sector as a potential paradigm shift in the development of breakthrough medicines. One hundred percent of the companies interviewed also indicated that they are closely monitoring both preclinical and clinical stage technologies and 40% of these companies are in

active pursuit of therapeutic opportunities. In addition to having some level of investment in the industry, a recurring message that echoed throughout each interview is that pharma does not want to miss this opportunity; they are monitoring the space diligently and methodically assessing the key questions to commercialize and bring these products to market. Lastly, not one company representative stated that they were not interested in this burgeoning field.

100% Investing With

Programs Underway

100% Monitoring

44% Actively Pursuing

Opportunities

0% Not Interested

Pharma and Large-Cap Biotechs Engagement in Regenerative Medicine

26

Where is Pharma Investing?

“We’re just beginning to understand the

potential for regeneration. As this unfolds the

potential for endogenous repair is

going to accelerate.”

“We are not currently interested in devices

alone. Combination products are a future

area of interest.”

“We would like to invest early, close to proof

of concept. We will continue to invest in the

areas of stem cells, gene therapy and other

regenerative medicine venture investments.”

“Our internal investment in regenerative

medicine is probably upward of

10% of the overall R&D budget.”

69%

64%

56%

31%

31%

Endogenous Activation

Beyond cell-based therapies, the interviews revealed a core group of pharma and large-cap biotechs, especially those focusing on specific neurodegerative disease indications, to have teams of cellular biologists in place studying endogenous stem cell microenvironments. The common goal of these groups is to discover small molecules and/or biologics that can activate dormant cells and down regulated cellular pathways, thus restoring the body’s natural ability to regenerate certain tissues.

Gene and Gene-Modified Cell Therapies

As previously mentioned, 31% of the pharma companies interviewed expressed moderate to significant interest in gene therapies and gene-modified cell therapies for a variety of disease indications. The highest level of interest was in the area of monogenic disease. The companies focused on these indications saw potential for these therapies since the mechanism of action is clear—a single nucleotide mutation resulting in the manifestation of the disease.

Cell Therapies

On the cell-based therapeutic front, 69% of the companies have already invested in cellular-based regenerative medicine products outside their company and 31% of them had made, or were making, investments in gene-modified cell therapy programs.

Drug Discovery

Of the interviewed companies, 88% considered the use of stem cells for disease modeling, drug discovery and toxicology testing as regenerative medicine, and of those companies, 64% are actively working with stem cells as key drug discovery tools. Furthermore, several of those companies mentioned that stem cells represent a paradigm shift in drug discovery.

Combination Products

Fifty-six percent of the companies’ surveyed expressed moderate to significant interest in combination products that include a tissue engineered scaffold/device component.

27

“We view iPSCs as very important tools for

modeling monogenic diseases.”

“iPSCs for drug discovery, toxicology and

modeling is our core focus in regenerative

medicine. This technology not only enhances

drug discovery, it is a paradigm shift

in drug discovery.”

“We’re getting more used to using stem cells

for modeling and discovery. We have a group

that’s very focused on genetics and genetic

variants that cause disease. For this group

cellular models make a lot of sense.”

“Stem cells are a tremendous resource for

high-throughput screening and toxicology

testing, they allow for efficient screening and

it gets around animal models.”

“Our team is a major proponent of stem cells

for drug discovery, modeling and

toxicology studies.”

“We use iPSCs and embryonic stem cells for

modeling disease. High throughput screening

is also fantastic use for these cells.”

Pharma and Large-Cap Biotechs’ Level of Interest in Stem Cells for Drug Discovery, Modeling and Toxicology Testing

50%Very Important

19%Important

13%Neutral

6%SomewhatImportant

6%Not at allImportant

6%N/A

28

“The most successful products to date

have been autologous and though they

are very challenging, manufacturing costs

amongst other challenges, we think they

are very promising.”

“The most promising cell types are

allogeneic MSCs and ESCs.”

“Autologous versus allogeneic is a tough

question…historically there has been concerns

around using non-autologous systems but

proof is in the data—relatively agnostic.

Unmet medical needs are wide open for

autologous products.”

“We are working with both autologous and

allogeneic stem cells —clinical data will be

what’s most important.”

“Autologous is difficult because of logistical

challenges but at the end of the day it’s all

manageable if it can impact patients.”

“We have some concerns about autologous

therapies because of manufacturing

and logistics. But there is also concern

about allogeneic as there could be an

immune response—this seems to be

getting less risky. We will certainly look at

all different approaches.”

Autologous vs. Allogeneic Cells as Therapeutic Modalities

The responses from the interviews were diverse and open-minded around autologous and allogeneic cell therapies. Very few of the companies interviewed had a strong preference toward one model versus the other, despite the logistical challenges and potentially higher costs linked to patient-specific or autologous cellular therapeutics. Of the 16 companies interviewed, 50% of them are already investing in patient-specific autologous

cellular therapies. Investment in off-the-shelf allogeneic cell therapies was virtually the same with 56% of the participants declaring projects and investments under way. The findings clearly illustrate that, for the most part, pharma does not believe there is a dominant technology. This was evident as 50% of the participants stated that their company remains agnostic toward the two therapeutic modalities.

Percent of Companies Focused on Investing or Developing Autologous and Allogeneic Cell Therapies

Allogeneic

Autologous

Agnostic

58%

50%

50%

29

“In the next 5-10 years a lot will be done here

through external partnerships. Our expertise

is regulatory, manufacturing

and commercialization, the rest will be

done with partners.”

“We have several validated programs

with academic labs. It’s important for an

independent entity to look at the data.”

“Our company is tracking stem cell

partnerships through science focus groups

and companies in areas of interest. We’ve

also in-licensed technology from universities

and we’re funding research projects at several

external academic partner laboratories.”

“Most of our effort in regenerative medicine

would be through partnerships…we want to

be working with the experts.”

How Pharma and Large-Cap Biotech Companies Are Organized to Pursue

Regenerative Medicine

Of the four major group types, the most common organizational structure was through vertically integrated regenerative medicine R&D units. The interviews revealed that 69% of the companies already have regenerative medicine focused teams established, each with unique strategies and therapeutic targets.

External regenerative medicine partnerships were also highly common among the participating companies. Several of them considered partnerships a critical component of success within the regenerative medicine

industry. Pharma generally agreed that they are not experts in cell-based therapies and must rely on the experts in industry and academia to successfully co- develop regenerative medicine products.

The common message that resonated through the majority of interviews was that pharma cannot do this alone and will need to rely on a variety of external partners to advance their regenerative medicine programs.

Focused Research & Development Units

Disease Teams or Therapeutic Divisions

Business Development Teams

Venture Groups

69%

44%

44%

25%

Top Four Business Strategies

Focused on external investments outside the company’s core areas of expertise

30

Where Pharma Sees Major Therapeutic Opportunities

Here and Now OpportunitiesThe majority of participants, 63%, stated that regenerative medicine technologies for wound healing are here now and will continue to constitute the nearest term therapeutic opportunity. Other therapeutic areas just over the horizon included cell-based therapies for musculoskeletal conditions, bladder and autoimmune disorders such as GvHD and Crohn’s Disease and adoptive T-Cell therapies to treat hematological malignancies.

Near-Term OpportunitiesIn the nearest-term—within the next five years—treating cardiovascular and ischemic-related diseases with autologous and allogeneic stem cell based technologies received the most comments from the participants.

Interviewees also clearly identified cell and gene-based therapies for ocular diseases, such as age-related macular degeneration, to be a near-term opportunity for the field. Each of the six companies engaged in this space considered ocular disease to be a key therapeutic opportunity for regenerative medicine and strongly believed that these technologies will show clear clinical efficacy and could represent a major advancement in standard of care.

Another disease area that garnered interest of big pharma is the monogenic disease space. Of the three pharma companies that expressed significant interest in monogenic disease, they each believed that this area of regenerative medicine is a wide-open opportunity and achievable in the near term.

Long-Term OpportunitiesNeurodegenerative diseases were viewed as the greatest longer-term opportunity for regenerative medicine, especially as several of these indications affect millions and treatment options are highly limited.

The 25% of companies that viewed diabetes as a major opportunity for regenerative medicine were extremely passionate about their reply and highly committed to the therapeutic area. The companies interested in targeting diabetes also stated that despite the difficulty in under-standing the science behind the disease, they believe that there will be a major breakthrough within the next 10 years and the opportunities to treat the disease with regenerative therapies for beta cell replacement and other insulin regulating mechanisms will be tremendous. The dominant technology strategy for each of the four companies was predominantly cell-based, testing a variety of multipotent and pluripotent cell types, both patient specific and off-the-shelf cell. Additionally, there was interest expressed in regenerative gene therapies for diabetes.

“Most promising areas of regenerative

medicine include the ischemic space/

cardiovascular, autoimmune/UC/IB/GVHD,

skin and musculoskeletal related injury

and disease.”

“In the next five years we will see progress in

the areas of oncology and cardiovascular.

The cardio space will see the most progress

in the next 10 years.”

“The disease area that holds the greatest

promise is the monogenic disease space.”

“The most promising areas for regenerative

medicine in the next 5-10 years include

cardiovascular, ischemia and immunology.”

31

“We have a large effort currently taking place in gene-modified HSCs for several rare diseases.

Focusing on rare diseases allows us to test transformative platforms on small patient groups

with lower regulatory boundaries.”

“We believe that monogenic disease is where you can focus and be successful because there’s

no other therapeutic option. We can also be successful in this area because the MOA is 100%

clear. Large indications are tough because we don’t really understand the disease.”

“Mesenchymal stem cell trials for GvHD, cardiovascular and other indications will read out—

potentially transformative one way or the other. Regardless, they will definitely be safe and find

their place in medicine. The skin is where cell-based therapy is now.”

63%

56%

44%

38%

37%

32%

25%

25%

25%

19%

19%

13%

13%

Spinal Cord Injury

Stroke

Monogenic Disease

Vascular Disease

Oncology

Diabetes

Metabolic Disorders

Musculoskeletal

Cardiovascular Disease

Ocular Disease

Autoimmune

Neurodegenerative

Wound & Burns

Percent of Companies that Consider the Therapeutic Area as Highly Opportunistic for Regenerative Medicine

32

Where Pharma Sees Major Challenges

Lack of Predictable and Clear Regulatory GuidanceOf the 10 areas of challenge examined, the lack of predictable and clear regulatory guidance received the lowest amount of concern from the participants—indicating that these companies feel that regenerative medicine products have the ability to succeed within current regulatory constructs.

15%

8%

77%

Lack of Predictable and Clear Regulatory Guidance

No Concern

Marginal/Moderate Concern

Significant/High Concern

“Cost of goods is a very low concern. Scientific

and technical challenges must be determined

up-front. Safety and efficacy defines the risk

benefit. Regulatory pathway defines if the

technology can be successful.”

“The key questions we’re considering are

mostly centric around business models and

regulatory pathways.”

“Disagreement amongst regulatory agencies

adds to the challenge.”

“Lack of geographic harmonization

is not a unique issue and true of all

drug development.”

Manufacturing and Scale-UpThe common message from the participants around manufacturing and scale-up was that cell-based therapeutics, combination products and other advanced therapies will be more complex in manufacturing design than current drugs, and therefore will confront significant development challenges. However, these are engineering questions that companies will undoubtedly solve; similar to the way manufacturing and scale-up challenges were solved for biotechnology products such as proteins and antibodies in the early- to mid-1990s.

8%

46%

Manufacturing/scale up

No Concern


Significant/High Concern 46%

“People over estimate CMC as an issue.

Although it is a significant hurdle, we believe

if the therapy shows a significant benefit and

the data is robust, companies will figure out

how to address CMC issues. Science is the

main challenge.”

“We manufacture all of our products on

our own, but we don’t have any cell therapy

manufacturing capabilities.”

33

Uncertain Financing EnvironmentDespite the variation gathered from the quantitative survey, the comments made throughout the interviews were quite homogenous. Each of the 16 companies interviewed mentioned that lack of access to capital is causing companies to run scaled-down, inadequately powered clinical trials with poorly understood end-points—a major concern of pharma. Small-cap companies struggling to run high quality clinical trials due to lack of capital was the most frequently mentioned concern. Several participants even men-tioned that the science and technology behind many of the regenerative medicine companies may, in fact, be sound, but without well-designed trials generating quality clinical data, it will be very difficult for pharma to measure the opportunity and the clinical value of these technologies. The bottom line message is that the lack of access to capital may be forcing companies to run poorly designed clinical trials, therefore resulting in questionable clinical data—the single most influential factor for pharmaceutical investment.

15%

54%

Uncertain financing environment

No Concern



“We always focus on data and our strategy

evolves based on the data.”

Uncertain Reimbursement EnvironmentThroughout the interviews, pharma consistently mentioned that reimbursement is a challenge, but not one specific to regenerative medicine. Companies focusing on indications such as diabetes, incurable neurological disorders, rare diseases or other indications with a high level of unmet medical need displayed less concern around reimbursement than companies targeting therapeutic areas with higher product competition, i.e., wound healing and orthopedic conditions. Of the participants, 15% considered reimbursement to be no concern or challenge; 23% marginal concern or challenge; 23% moderate concern or challenge and 39% considered this to be a significant concern or challenge.

15%

46%

Uncertain reimbursement environment

No Concern



“Reimbursement would be layered in the

discussion very early, and more and more

so that is the case. Public perception is not

an issue. Scale-up and manufacturing is a

secondary situation.”

“Companies are going to reinvest once they see clinical success and marketed products.

Mechanism of action is important but not critical, we’ve had products on the market

without knowing the mechanism of action.”

“Government funding would help get small companies through some of the valleys. There are

lots of gaps in the preclinical work, early trial and experiments due to shoestring budgets.”

“The finance environment is very difficult. It’s causing companies

to run poor trials with poor clinical endpoints.”

34

Potency Assay ValidationThe quantitative survey revealed 43% of participants found potency assay development to be a more than moderate concern. Additionally, potency assay validation was often the first challenge or concern mentioned during the interviews. These top -of-mind concerns may mirror where we are as an industry, and may be especially reflective of the clinical development challenges facing the leading companies—many of which are now moving past safety trials and entering later stage efficacy and dosing trials. Potency assay validation is a here-and-now issue and something with which pharma is grappling with. The good news is that no companies viewed potency assay validation as a highly significant concern and only 23% considered this to be a significant concern. Instead, potency assay validation is considered to be a somewhat new and unique issue that cell-based regenerative medicine companies are actively facing.

8%

69%

Potency assay validation

No Concern


Significant/High Concern23%

“Potency assay development and validation

is an issue. Cell characterization on the other

hand is getting much better with a pretty

good roadmap at this time.”

Cost of GoodsAfter reviewing the interviews and the quantitative results it was evident that a fair amount of disparity existed around the level of concern regarding cost of goods for regenerative medicine therapies. Despite the range of concerns, 61% of the participants responded within the no concern to moderate concern brackets— a positive sign for the regenerative medicine industry. The remaining 39% viewed cost of goods to be a significant concern.

39%

15%

46%

Cost of goods

No Concern


Significant/High Concern

“Development costs and unproven business

models are not major concerns. Areas of high

concern include lack of standards and geo

regulatory harmonization.”

“We want to use regenerative medicine

technologies where there is clear benefit over

drugs on the market.”

“Potency assay development and validation is a concern—it’s a necessity for the end-user

and of course important from a regulatory standpoint.”

“Potency assay development and validation is also very difficult as it’s hard to say

that a given marker indicates a particular clinical outcome.”

“Dosing of cell therapies is an area of concern. Cell characterization

is not as risky as cell potency as it’s more objective.”

35

Product Consistency and StandardsResults from the quantitative survey and the personal interviews revealed that product consistency and lack of standards is possibly the single greatest challenge facing the field. Of the companies interviewed 92% rated this to be area of moderate-to- significant concern. The interviews also illustrate how young the regenerative medicine industry still is, despite the excitement and number of companies in the space, and that time is still needed for the industry to mature and become more standardized. It was mentioned by several participants however, that the issue around standards has improved when compared to 10 or even five years ago.

8%

46%

Product consistency/standards

No Concern



“Lack of standards has been problematic,

but the situation is improving.”

“Areas of high concern include lack of

standards and geo regulatory harmonization.”

Clinical Adoption and Medical ExpertiseSixty-two percent of the respondents believed that clinical adoption and medical expertise is a marginal to moderate concern. Of the remaining survey participants, 15% considered clinical adoption to be of no concern while 23% considered clinical adoption to be significant concern. Lastly, none of the participants considered this to be a highly significant concern.

15%

62%

Clinical adoption/medical expertise

No Concern


Significant Concern23%

Supply Chain LogisticsSupply chain logistics were not considered to be a significant or highly significant challenge facing the field. In fact, the majority of participants, 77%, considered supply chain logistics to be a moderate concern or less. A handful of participants mentioned that shipping and storage of cell-based therapies will be significantly more challenging than shipping and storage of chemical and protein-based drugs. Several participants additionally mentioned that with recent advances in quality control systems and the available expertise from supply chain focused service partners, supply chain and logistical concerns will not be a major hurdle for regenerative medicine technologies. Regardless, supply chain logistics is something that should not be dismissed and will be a marginal to moderate challenge facing the field.

8%

69%

Supply chain logistics

No Concern


Significant/High Concern23%

“Cells will be the ‘easy’ part—the engineering

and delivery will be the complex part.”

“Scalability, development costs, risk of lot

failure, unproven business models and COGs

are concerns. Other logistical challenges

include shipping conditions for live cells.”

36

MembershipRegenerative MedicineRegenerative MedicineALLIANCEfor

CompaniesAastrom Biosciences, Inc.

Abeona Therapeutics

Advanced Cell Technology

AGTC

Akron Biotechnology

AlloCure

AlloSource

Athersys, Inc.

Avita Medical

AxoGen, Inc.

Baxter

Bell BioSystems

BioLife Solutions, Inc.

Biomatrica

Biospherix, Ltd.

BioTime, Inc.

Blood Centers of America Inc.

bluebird bio

BrainStorm Cell Therapeutics

Calimmune

Capricor Therapeutics, Inc.

Celgene Corporation

Cell Cure Neurosciences Ltd.

Cell Line Genetics, Inc.

Cell Therapy Group

CellGenix GmbH

Cellular Dynamics International

Cellular Technology Limited

Celsense Inc.

Cesca Therapeutics

Circle Biologics, Inc.

Cord Blood Registry

Clinical Trial & Consulting

Cynata Therapeutics Inc.

Cytomedix

Cytori Therapeutics, Inc.

DiscGenics, Inc.

Dohmen

EMD Millipore Corporation

Fate Therapeutics

Fibrocell Science

Fisher BioServices

GE Healthcare

GenVec

Global BioTherapeutics

Harvard Apparatus Regenerative Technology

HemoGenix

Histogen Inc.

Histogenics

Humacyte, Inc.

Invetech

InvivoSciences, Inc.

iPierian Inc.

ISTO Technologies

Johnson & Johnson

Juventas Therapeutics

Lonza Group Ltd.

MaxCyte, Inc.

Medpace

Mesoblast Ltd.

MiMedx Group, Inc.

Minerva Biotechnologies Corporation

Nanofiber Solutions

NeoStem

Northwest Biotherapeutics, Inc.

Organogenesis Inc.

Organovo Holdings, Inc.

OrthoCyte Corp.

Osiris Therapeutics

Oxford BioMedica

Pfizer Inc.

Pluristem Therapeutics Inc.

Progenitor Cell Therapy

Q Therapeutics

Regeneus Ltd.

Reglera

RepliCel

RhinoCyte Inc.

Rossi Group Consulting

RxGen

Sangamo BioSciences

Sanofi-Genzyme

Sartorius AG

Shire

SironRX Therapeutics

Smith & Nephew

StemBioSys

StemCells, Inc.

Tengion, Inc.

TERUMO BCT, Inc.

Thermo Fisher Scientific

Tissue Banks International

37

TissueGene, Inc.

Tissue Genesis, Inc.

TrakCel Ltd.

Vet-Stem, Inc.

ViaCyte, Inc.

InvestorsAsset Management Ventures

Kentucky Seed Capital Fund

Novitas Capital

Toucan Capital

Triathlon Medical Ventures

Patient Advocates/Foundations/AssociationsAssociation of Clinical Research Organizations

Alpha-1 Foundation

ALS Association

American Association for Dental Research

BioBridge Global

California Institute for Regenerative Medicine

Californians 4 Cures

Cell Society

Centre for Commercialization of Regenerative Medicine

Friends of Cancer Research

Genetics Policy Institute

Human Organ Project, Inc.

International Society for Stem Cell Research

JDRF

Missouri Cures

National Disease Research Interchange

National Multiple Sclerosis Society

National Stem Cell Foundation

Nebraska Coalition for Lifesaving Cures

New York Stem Cell Foundation

Parkinson’s Action Network

Prevent Cancer Foundation

Stop ALD Foundation

Student Society for Stem Cell Research

Texas Cures Education Foundation

Unite 2 Fight Paralysis

Research InstitutionsCleveland Clinic

Cornell University

Johns Hopkins Translational Tissue Engineering Center

Neural Stem Cell Institute

Northwestern University Comprehensive Transplant Center

Pittsburgh Tissue Engineering Initiative

Sanford-Burnham Medical Research Institute

Texas Heart Institute

UC San Diego Stem Cell Program

University of Maryland Center for Stem Cell Biology and Regenerative Medicine

University of Minnesota Stem Cell Institute

University of Utah Cell Therapy and Regenerative Medicine Program

AffiliatesAlphaMed Press

European AffiliatesAndalusian Initiative for Advanced Therapies

Aposcience AG

ATMI

Cardio3 BioSciences

Cell2B

CellData Services

Cell Therapy Catapult

Chemelot Campus B.V.

DCPrime B.V.

Foundation for Biomedical Research and Innovation

Fraunhofer Institute for Cell Therapy and Immunology

Gri-Cel, S.A.

Kiadis Pharma

K.U. Leuven

Med Cell Europe AG

Newcastle University

Novadip Biosciences SA

PharmaCell B.V.

Promethera

ReGenesys B.V. B.A.

ReNeuron Group plc

Sistemic Scotland Limited

TiGenix NV

University College London Center for Stem Cells and Regenerative Medicine

Voisin Consulting

Regenerative MedicineRegenerative MedicineALLIANCEfor

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