Recently I’ve been reading a post on investor’s web-site Seeking Alpha, entitled “Asterias Biotherapeutics’ Stem Cell Program Is Dead On Arrival“. It made me think – Aren’t most (if not all) divested cell products are “dead on arrival”? And if yes, what can we learn from it?
Let’s look at the biggest shots in cell products divestment of the last 3 years:
- Geron divested stem cell assets to Asterias Therapeutics in 2013.
- Dendreon Corp filed for bankruptcy in 2014 and sold Provenge assets on auction to Valeant Pharmaceuticals in 2015.
- Osiris divested Prochymal to Mesoblast in 2013
- Sanofi divested 3 products – Carticel, Epicel and MACI to Vericel Corp in 2014.
- Shire divested regenerative medicine product Dermagraft to Organogenesis in 2014.
Now, I’d like to highlight some common features of these divested products:
- They were divested for a reason. The most frequent reason, mentioned in press releases is financial and strategic – too expensive to handle and changing the company’s focus. However, I truly believe that single most important untold reason is therapeutic under-performance.
- None of them were stellar therapeutically. Everyone was hoping for dramatic (significant, impressive, nearly curative – pick the right term) therapeutic improvements, but reality was very different.
- All of them were sort of pioneering. Read – first generation. Read – obsolete.
- All of them have very very long history of development (20+ years for Prochymal and Provenge)
- Most of them had a history of bumpy regulatory approval paths (FDA versus Geron/ Osiris/ Dendreon).
So, there is nothing more important than therapeutic boost! If 3 out 5 of Geron’s trial patients would walk away from wheel chair in couple of months after “magic injection”, investors would “shower them by gold” and company would not drop the program. But none of 5 patients reported notable improvements. In cell therapy today our expectations set so high – we are looking for amazing therapeutic performance! Who in clear mind today would drop potentially curative product candidate with response rate 90% (yes, I’m talking about CART)? But if therapeutic effects are marginal (Provenge) or moderate (Prochymal) or response rate below 50%, companies may divest without looking back.
If product cannot deliver great therapeutic performance, it should deliver great economics benefit. In other words – save a lot of money performing therapeutically as good as competitor. In order to achieve economics benefit, the cost of manufacturing should be low, logistics should be very simple and therapeutic effect should last very long. This is not the case for divested products, mentioned above. Manufacturing of Provenge is expensive and logistics is very complex. Prochymal required multiple infusions (up to 10 in GVHD), lasting short time.
The last point, I’d like to make here is rapid obsolescence of pioneering cell products. In the current speed of technological innovations, long-term cell product development will collide with unavoidable obsolescence. Provenge and Prochymal are typical examples of such collision. They were stalled in development and at the moment of arrival they were already obsolete – dead on arrival. So, why “beat a dead horse” and try to resuscitate it? This field is fluid, let it go!
So, what can we learn from examples of divestment? I’d put a few things for discussion:
- In the field with high demand for dramatic therapeutic boost, the products which able to deliver it should be picked and cherished.
- In such dynamic highly technological and innovative field as cell therapy, divestment of products is normal.
- There are only 2 real significant reasons for divestment of cell products – therapeutic under-performance and unjustified cost.
- If you’re spending 10/15+ years for cell product development you’re running into the risk of technological obsolescence.
- Frequently, there is no reason to pick up divested products and try to ask “dead horse to race”. Let it go, kill it. Learn from it and develop new amazing product!
For those of you, who picked up divested products and trying to resuscitate it – good luck guys! I’d not be in your place.