By Lee Buckler, RepliCel Life Sciences Inc.
Despite recent progress in regenerative medicine, cell and gene therapy executives are still pioneering many new pathways as they shape science into never-before-realized medicinal applications. From innovation and growth come surmountable, yet challenging issues which can hinder — even halt —groundbreaking progress in its tracks. Outlined below are a few issues that weigh heavily on the minds cell and gene therapy executives.
1. Production technology innovation
Manufacturing technologies underlying the cell and gene therapy sector are evolving rapidly. Pressure is high to employ innovation throughout clinical development to optimize manufacturing prior to commercial launch. Yet each manufacturing change has the potential to alter the product in some meaningful way.
Here lies the rub: clinical trial design and regulations resist product evolution. The solution is to ensure that manufacturing process changes do not change the product. This is much harder than it sounds.
Early-stage cell and gene therapies clinical testing is often done, for good reason, on platforms which are not commercially viable. To avoid a product being outdated by the time it is commercialized, the manufacturing platforms must evolve as the product evolves through clinical testing.
The only way to manage process development changes without creating setbacks for clinical development is to ensure the product is sufficiently characterized so that comparability data may be generated which demonstrates that the changes have not had material impact on the product (see #6 below).
2. Adverse events
While gene therapies and gene-modified cell therapies have finally been approved and are being widely adopted, we are still at the cutting-edge of innovation, which has inadvertently caused patient death.
Cytokine storms and other adverse events not uncommon with gene-modified cell therapy in current clinical testing keep the finger of regulatory agencies on the trigger of the clinical trial hold. Cell and gene therapy executives must remain ever-vigilant to red flags in their data, which may only be ignored at the sector’s peril.
3. Marginal efficacy
On the flip side to that which may be keeping gene therapy executives restless (the adverse cost of phenomenal clinical efficacy), those in the stem cell, cell therapy, and regenerative medicine space outside of immunotherapy and genetic diseases, are struggling to show the level of clinical efficacy which excites patients, regulators, and investors alike.
Despite the fact that there are several approved products commercially available, this side of the regenerative medicine sector remains wanting for the kind of "wow-factor" clinical data that promises blockbuster commercial returns. These executives must raise funds and strategically plan in the absence of a great precedent to which stakeholders can point and believe.
4. Cost of goods (masquerading for profit margin)
In cell and gene therapy, the cost of goods (COGs) is the cost of each batch production (including related costs like logistics). For autologous cell therapies a batch may be as small as a single dose. Much is made of cell and gene therapy production costs. While COGs are certainly important, it is not the real problem.
The real issue is margin. High production cost is only a problem if the product cannot demand a sufficiently high price to establish a commercially viable margin — typically generalized as 100% in the biopharmaceutical industry. With high-margin clinical efficacy over standard of care comes the opportunity to charge a sufficiently high price to create the profit margin needed to produce a healthy return on investment. Indeed, such is the case with the oft-pursued orphan drug model.
Establishing health insurance reimbursement for novel products is always a challenge. Establishing it for a whole new category of products is even more challenging. And, more challenging still is procuring it for a new category of products that do not fit the established healthcare delivery or insurance model. Cell and gene therapies offer the kind of medicines which health insurance has not been structured to deal with or afford: high-cost, long-term (if not permanent) clinical benefit (if not, cures), which often do not require permanently ongoing treatment.
Health insurance reimbursement of these products will differ radically by country. Influences include economic analysis, demographic data, and a great deal of politics. National health insurance programs will often apply very different analysis to the long-term benefit of such products than a private health insurance company, which typically has shorter coverage windows.
Very simply put, assays are tests that assess whether or not every batch of manufactured product meets the specifications which the regulators have agreed are critical to the product’s safety and efficacy. This can be accomplished with some combination of both identity and functional assays and may be either a combination of positive and negative assays in that the test shows something exists or proves something does not.
First, it is often a considerable challenge to nail down, with any precision, a proposed mechanism of action for a cell and gene therapy. Once a rational mechanism of action is accepted, they must establish that the assays they propose actually measure for the specifications allegedly critical to their product.
Second, a company must sufficiently define or characterize its product. Defining a cell population with specificity cannot be done at the same level as one can define a chemical compound.
A significant number of well-established assays used in traditional biologics do not fit well with cell and gene therapies. On the flip side, many of the assays used in early-stage cell and gene therapy academic research are not well suited in a commercial manufacturing setting either because they are too time-consuming, cumbersome, not suitable for the cGMP-compliant clean room, or too expensive.
Sometimes these challenges result in a company having to develop — either on its own or with a partner — its own unique assay or assay panel because the right ones are not commercially available.
7. Going global
The vast majority of approved cell and gene therapies products commercially available (and there are at least 40 with perhaps upwards of 60 approved around the world), are only available on a limited regional basis.
While there are several products which are multi-national, there are very few, if any, which can be described as being on the market globally. This has two real consequences.
First, there have not yet been many multi-agency regulatory clearances negotiated to-date for multi-national clinical pivotal trials. The lack of cohesiveness between jurisdictions combined with the lack of precedent means every such submission is still breaking new, challenging ground.
Second, because there are few, if any, truly global cell and gene therapy products, there are few insights into the wide variety of issues such global launches are expected to present ranging from logistics, import/export, reimbursement, regulatory approvals, market variability, clinical adoption differences, etc.
8. Regulatory impacts on location
For those cell and gene therapy executives developing products in Europe or North America, a very real question is where to geographically locate initial development and commercial efforts. Do they continue where they can work close to home but face some of the highest regulatory hurdles, or do they prioritize activity in a place like Japan which presents an opportunity to launch a product commercially after what might be the equivalent of a phase 2a trial?
In Europe (with their hospital exemption provisions) and now in the United States (with the recent Right To Try legislation passed), cell and gene therapy executives must additionally address the question of whether to provide patient access to their pre-commercial product. Products still in clinical trial testing may be made available to patients on a limited basis (under these provisions) and garner some revenue associated with that enterprise.
The strongest roots of all financing waves begin with clinical data. Good data drives everything and certainly excites investors. Deliver unprecedented clinical outcomes and you will be flush with capital opportunity. Such is the current state of cell-based immunotherapy and gene therapies.
For those not enjoying a rush of capital racing to invest in their company, a viable option is often to look at prioritizing strategic investors who are also commercial partners over the more fickle and short-term venture capital money. For those looking to finance with strategic investor/partner money, the trick is to find the right partner and negotiate the right early-stage co-development deal that maintains enough of the future blue-sky upside of the products in development to keep investors excited while leveraging the less-dilutive financing of a partner.
While the challenges of cell and gene therapy are unique and span the full spectrum of issues related to biologics development, the potential for therapeutic benefit and commercial opportunity is groundbreaking. The scientific, clinical, technical, regulatory and commercial challenges are all surmountable and now being actively addressed by a stunning array engineers, scientists, investors, and executives.