Guest Column | August 5, 2019

How Serial Entrepreneur Robert Hariri Is Revolutionizing Cell Therapy

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

Robert Hariri

A real Renaissance man. That’s how some might describe Robert Hariri, M.D., Ph.D.

Why? Well, in addition to being a jet aviator, a surgeon, a biomedical scientist, and a successful serial entrepreneur in two industries (i.e., biomedicine and aerospace), he’s also produced feature films and documentaries, published more than 200 articles, and has over 170 issued or pending patents. And though he’s been a captain in the military, a professor of surgery, and a trauma-center research director, Hariri’s probably most recognized for his discovery of pluripotent stem cells from the placenta, the foundational organ for his latest venture, Celularity, a commercial-stage cell therapeutics company for which he serves as CEO.

A spinout of Celgene, Celularity made big news in February 2018, when it raised $250 million to accelerate development of its stem cell platform to treat cancer, autoimmune disorders, and ultimately, delay the aging process. But the buzz wasn’t just around the amount raised or what the company was striving to do; the participants involved were also of interest. For example, corporate investors included Celgene, Human Longevity, Sorrento Therapeutics, and United Therapeutics. Personal investors included life coach Tony Robbins; former Apple and Pepsi CEO John Sculley; GV (formerly Google Ventures) founder Bill Maris; former FDA Commissioner Andrew Von Eschenbach, M.D.; and XPRIZE and Singularity University founder Peter Diamandis, M.D., who is also a Celularity cofounder. It seems all have literally bought into Hariri’s vision of using donated placentas to turn cellular medicine into a scientifically validated field that is scalable and broadly deliverable — a quest he embarked on more than 22 years ago. To best comprehend the significance of how Celularity came to be today, it is first necessary to understand the arrival of Hariri’s placental epiphany, along with his journey as a serial entrepreneur.

THE PLACENTA AS AN ENTREPRENEURIAL OPPORTUNITY

Because he was trained as an engineer before attending medical school, Hariri says he still thinks in terms of systems engineering. He used that knowledge base to start his first company. “I invented some surgical instruments that I wound up selling to a large instrument company,” he shares. It was this experience that gave him the bug for business, as he saw what could be done with innovation in healthcare. Hariri went on to develop another company in the neurosurgical field capitalized by J&J in the late 1980s. Not long after, stem cells were gaining increased attention, and as a neurosurgeon, Hariri saw these as a potential therapeutic platform to treat the patients in which he was most interested (i.e., those with brain injuries). But he had no idea just how complicated the field was or its underlying limitations. “When stem cells first came out as a research platform, their derivation was limited to embryonic and fetal material,” he recalls. This gave rise to groups attempting to justify the procurement and destruction of human embryos or advocating for stem cell procurement through abortus material. Although both scientifically valid places to find stem cells, Hariri saw these as being riddled with potential problems.

“Aside from moral and ethical debates, deriving stem cell raw material from these two sources seemed impractical,” he explains. “People recovering stem cells from embryos do so at the blastocyst stage, which is just a few weeks into development.” It turns out that about only one of five fertilized eggs that gets to a blastocyst ever goes on to create a fully formed healthy newborn, with most spontaneously ending in the first trimester. “Collecting embryonic stem cells runs the risk of them being grossly abnormal, something I’ve actually shown.” Similar quality- control issues are found when gathering stem cells from abortus material or adult bone marrow. “With these methods, you need to figure out how to build in systems to create control from such an uncontrolled origin,” he says. To Hariri, stem cell raw material sourcing seemed a problem in need of a solution.

While working as an associate professor of surgery at Cornell in the mid-1990s, Hariri says he had a bit of an epiphany. “Through research and observation, I became convinced that the placenta was not simply a vascular interface between the maternal and developing fetal system, but that it somehow served as a supply depot for stem cells in embryo and fetogenesis,” he states. He explains that a mother contributes 50 percent of the DNA to the developing fetus. This means the mother is only 50 percent immunologically type-matched to the fetus, yet she carries the fetus and its placenta without rejection for nine months. In a surrogate pregnancy, a mother carries a fetus and its placenta for which she has zero relation for nine months without her immune system recognizing either as foreign. Hariri wanted to know how that works. “Did you know that women who have certain autoimmune diseases go into remission during pregnancy? Yet when the pregnancy is over, the mother relapses.” Here’s another interesting fact: About one in every 1,000 pregnant women have some form of cancer. However, the reported incidence of maternal to fetal transmission of cancer is essentially zero. “Why is that?” he asks. “The placenta in a pregnant woman is getting 50 percent of her blood supply, so why isn’t she metastasizing like crazy to the fetus?”

Convinced the postpartum placenta might be nature’s stem cell allograft (universal donor tissue), Hariri believed the organ held the potential as a sourcing solution where stem cells (if the organ proved to hold such) could be procured under much tighter standards and subjected to processing and manufacturing methodologies that could be made consistent for productization. “Cells collected from the placenta of a healthy newborn have gone through nature’s quality-control process, and any abnormalities inconsistent with life would result in a pregnancy’s spontaneous termination,” he shares. Now all he had to do was to prove that the postpartum placenta held the key to recovering large quantities of really important and highly versatile cells. However, to do that would require a team of researchers — and that would require building a business.

THE BANKING OF LIFE – AN ALL-IN COMMITMENT

It was clear to Hariri that collecting placental raw material from a relatively consistent biological event was a top priority. “The biology of a newborn at 40 weeks gestational age, plus or minus two weeks, approaches a level of consistency I couldn’t see being found anywhere else,” he explains. “Second, subjecting the donors to the right inclusion criteria would ensure the raw material had a certain fundamental quality, giving the highest probability of any end product developed being somewhat consistent.” Another nice thing about getting placentas from newborns is they all show up in the same place (i.e., the labor and delivery suite), and at a point when there is absolutely no risk to the patient. Further, placental harvesting offers an opportunity to monitor the evolving health history of the donor and to subject that information to additional selection criteria. “Let’s say I want to make sure that I never have material that comes from a child who develops diabetes in the first five years of life,” he uses as an example. “Having such a system could enable us to do just that.”

Though Hariri’s intuition told him that the placenta as byproduct of a full-term healthy pregnancy held the potential for being the best source material for stem cells, as he had yet to prove this, he had to figure out how to create a business around procuring placentas under control. This meant building a business that provided a service to expectant parents where they could be enrolled, and data collected. It would require designing a collection procedure, along with enrollment and consent documentation. Collected materials wouldn’t just be stored but researched and potentially processed into products. His original idea was to open an office and cut a processing deal with a cord blood bank. But the more he thought about it, the more he realized what all was involved, and to best manage what needed to be done would require his complete commitment.

In 1997, Hariri decided to leave his faculty job at Cornell to start LifeBank (later known as Anthrogenesis), a company that would use the service business of banking cord blood from newborns for families as a way to properly collect, harvest, and process postpartum placentas. But unlike other providers of such banking services, Hariri had plans of adding a lab with significant research capabilities to interrogate whether or not the placenta was a source for other cells (i.e., stem cells) that might have clinical value. “Everybody thought I had lost my mind,” he laughs. “Remember, my classical research activities were devoted to things like the biology of tumor necrosis factor (TNF) and traumatic brain injury.” Some people thought that if using the placenta for stem cells was such a good idea, why hadn’t some obstetrician thought of it already? Others argued as to the viability of postpartum placentas. But Hariri viewed things differently. He believed the obstetrician was too busy taking care of the newborn and the mother to be thinking about what was in the biohazard waste bag (where the postpartum placenta typically ended up), and what within the placenta might prove useful in biologic drug development.

To get things going required “boots on the ground,” with Hariri directly educating and marketing to consumers and obstetricians about LifeBank as a service to expectant parents. He admits his M.D. and Ph.D. proved highly beneficial in gaining access to busy OB practices. “My angle was education, so I went about building relationships with obstetricians by bringing them something they needed to know,” he says. He did this through a variety of means, including telephone conversations and in-person meetings. “I quickly became a welcome guest in physician offices and hospitals, even being invited to conduct grand rounds and educate residents,” he adds. “Many of these OBs became our customers, and some went so far as to invest with our company” (which you can read more about in Life Science Leader’s “Beyond The Printed Page” article, “How Life- Bank Became A Life-Changing Investment”).

Though the relationships and business grew fairly quickly, getting LifeBank to the point of “trusted service provider” and generating revenue required 90-hour work weeks. Meanwhile, the laboratory within the business, also under the direction of Hariri, had begun taking placentas apart to figure out how they worked, and quickly discovered that placental cells could be given to people with things like Crohn’s disease and induce remission. “That got us really excited and led to us developing our line of placental products used in things like autoimmune disease,” he states. “Fast-forward a few years, and our researchers found a novel natural killer cell in the placenta that is pre-primed to defend against malignant cells.” This convinced Hariri that the placental immune system held the potential upon which to build cellular immunotherapy products to treat cancer. “We’ve taken this placental natural killer cell, which we manufacture in our facility, into the clinic to treat hematologic cancers,” he attests. Not only are they seeing some very exciting results, but Hariri believes they will ultimately be able to take this cell product into solid tumors.

AN ACQUISITION AND EVENTUAL SPINOUT BY CELGENE

The evolution of Hariri’s company — and his idea — took an interesting turn in 2002 when Celgene acquired Anthrogenesis/ LifeBank. At the time, Celgene was still a small, extremely nimble, and very risk-tolerant company.

As Celgene grew to what Hariri considered more of a traditional Big Pharma enterprise, it developed “more of a preference for failing fast and moving on,” he elaborates. “Such a culture doesn’t lend itself well for developmental- stage technologies.” And though Hariri says his company, which became Celgene’s Cellular Therapeutics Division (with its own headquarters and facility), was treated as an independent business, he set out to convince Celgene senior management to spin it off. “I thought Celularity would be able to do things faster, cheaper, and better than being part of a parent company,” he explains. “Plus, by Celgene remaining a significant stakeholder, they’d continue to benefit.” For example, the origins of the company’s entry into immuno-oncology originated with the cell therapy division. “Celgene’s first deal with Bluebird, and subsequent deal with Juno, were largely influenced by our expertise,” he adds. But as Celularity’s developmental efforts were not core to Celgene’s overall business strategy, competing for internal resources proved problematic to progress. “They recognized the value of participating with us as a spinoff to capitalize on non-core research areas, so it wasn’t much of a struggle to convince them,” he assures.

Though currently private, Hariri aspires to take the company public someday. “The discipline necessary to operate as a public company in this industry is not only beneficial for the internal culture of the organization, but important to the consumer-facing side of the business as well. The consumer has some degree of confidence that public companies operate under the watchful eye of agencies like the SEC,” he contends. Celularity already has two products on the market from its functional regeneration group, Interfyl Human Connective Tissue Matrix and Biovance. Also, its biologic wound-care business is actively promoting the UltraMIST Therapy System, a device technology used in conjunction with the company’s wound technology. “We’re hopeful to be deploying cell therapy products commercially within the next 24 to 36 months, and I think there are some applications that could be deployed internationally in certain receptive jurisdictions — perhaps even earlier,” he concludes.

We started this article referencing Hariri as a “real Renaissance man.” But upon reflection, perhaps an exponential Renaissance man would be more appropriate. Because should he prove successful, his efforts will go well beyond being real — but transformational.


HOW HARIRI ASSESSES TALENT FOR CELULARITY

Though Celularity, a 2018 spinout of Celgene, has been in existence for a little over a year, many of its employees have worked with Robert Hariri, M.D., Ph.D., the company’s cofounder and CEO, for many years — some around 20 or more. When asked of his approach to hiring, he said, “There’s no doubt that companies are made or broken by each individual cog in the wheels that are employees.” Thus, Hariri says he strives to find people who not only want to work with him, but those who will share in the vision, the dream, and the enthusiasm for the company. “That’s hard to do, because people will tell you whatever they think you want to hear during the interview,” he admits. “When I’m talking about the company, I want to see a fire in their eyes. And when they join us, I watch very carefully for whether or not that fire goes out.”

Hariri says some people describe his leadership style as being somewhat evangelical. “Listen, I like to drive people to be excited and enthusiastic about things. What happens is, you very quickly begin to screen out those who like that environment and those who don’t,” he attests. Those who like it typically don’t want to leave. “My technical operations people have been with me since they got out of college and are now married with kids getting ready to go to college themselves,” he notes. “Jeff Bezos said that in building Amazon he hired missionaries, not mercenaries, and I subscribe to that notion completely.”


Advice From A Successful Serial Entrepreneur

Robert Hariri, M.D., Ph.D., a successful serial entrepreneur and CEO of Celularity, believes a lot of companies fail because they have a very linear development strategy. And if they reach a milestone and fail, there isn’t much of a future. “A lot of scientists have a discovery — a molecule, a biologic, etc. — and they often think that single asset worthy of a company. I don’t necessarily buy into that.” Hariri says those assets may be worthy of a development relationship, but he would not go out and build a company around something like a single molecule, at least not until he saw a much broader and more flexible opportunity for it in the future. “In the case of Celularity, we have a rich portfolio that can be redirected based upon changes that occur along the development cycle, giving the business a much longer horizon than some other companies,” he attests. Plus, it doesn’t hurt that Hariri, Celularity’s cofounder, holds over 170 issued or pending patents for discoveries including placenta-derived stem cells, which has been recognized by Nature as one of the 10 most important patent estates in the field.


The Logistics Of Placenta Collection

When Robert Hariri, M.D., Ph.D., had the idea that the human placenta might hold the potential of stem cells to be used for therapeutic drug development, he understood that realizing his dream would require building a biopharmaceutical company. He also knew it would necessitate the creation of a complementary business capable of collecting, transporting, and storing placentas. “A lot of attention has to be dedicated to understanding the relationship between the company and the placental donor, as they will have to give fully informed positive consent,” says the CEO of Celularity, a 2018 spinout of Celgene. “There’s an educational process. The patient needs to understand the technology, that they will be providing a significant amount of health history information, and that the collected placenta will be used to develop products and in medical applications.” Education is also required for the physicians who will do the collection and for the hospitals where the collection will take place. Further, the patient has to inform their physician about the collection procedure, and from there, Celularity provides the necessary collection apparatus.

Once collected, the placenta is then shipped using a controlled courier system. “The physician does the collection as a service to Celularity, and they are reimbursed for their time,” Hariri explains. Once the materials arrive at Celularity, it enters protocol verification as a means to ensure all the necessary steps to qualify the raw material have been taken. “It’s a highly proceduralized process we developed and have refined over the last 20 years,” he clarifies.

According to Hariri, Celularity has relationships with birthing centers that understand and have approved the company’s consent and collection methodologies. “It’s a partnership in some ways, as we are taking over a component of a center’s biohazard waste they’d otherwise have to pay to dispose of,” he elaborates. “So we want to be sure we meet or exceed all their internal risk management standards, so everyone feels comfortable with the process.” Celularity has agreements with local and regional centers because Hariri believes a greater diversity of donors could ultimately prove important.