US Regenerative Medicine Companies Gets Boost from Japanese Laws PHoto Coutesy of Cytori Therapeutics, Inc.

US Regenerative Medicine Company Gets Boost from Japanese Laws

Before these new laws were enacted, the regulatory pathway for clinical use of regenerative cell therapy was ‘one-size-fits-all,’ irrespective of the risk posed by certain cell types and approaches," said Marc Hedrick, CEO of Cytori Therapeutics, Inc.

The U.S. stem cell and regenerative medicine industry recently received good news from an unlikely source -- Japanese lawmakers. The country passed two new laws which have both modernized and streamlined the approval process for regenerative medicine products.

The reason Japan is acting so quickly in this field is due to the nation’s demographics which will result in the percentage of its population over 65 doubling in the coming years. Consequently health care costs will dramatically increase. Regenerative medicine, which is the process of replacing, engineering or regenerating human cells, tissues or organs to restore or establish normal function, is looked to as a solution for some health issues.

Japan is placing great expectations on this field. In a keynote speech at the World Economic Forum in Davos, Switzerland, Prime Minister Shinzo Abe expressed Japan's national commitment to leadership in regenerative medicine, saying, "We will make it possible to generate cells (i.e. cell based medicines) at private sector factories."

Japan's laws improving the approval process of the devices will bolster U.S. companies in the sector.

“Japan’s new regenerative medicine laws substantially clarify regulatory ambiguities of pre-existing guidelines and this news represents a significant event for Cytori,” said Dr. Marc Hedrick, CEO of Cytori Therapeutics, Inc.  “We have a decade of operating experience in Japan, and Cytori is nicely positioned to see an impact both on existing commercial efforts and on our longer-term efforts to obtain therapeutic claims and reimbursement for our products.”

Cytori Therapeutics, Inc., which is based in San Diego and became listed on NASDAQ in 2004, is in the business of developing cell therapies based on autologous adipose-derived stem and regenerative cells (ADRCs) to treat cardiovascular disease and repair soft tissue defects.

Adipose tissue is one of the richest cell sources, according to the company, and as a result the patient’s own cells are available to them in real-time at the point of care using the company’s Celution system.  The ADRCs improve blood flow, moderate the immune response and keep tissue at risk of dying alive. These properties are enabling the company to apply these cells across multiple “ischemic” conditions.

Regulations Speed up Process

The laws, which went into effect on November 25, 2014, remove regulatory uncertainties and provide a clear path for the company’s products.

One aspect of the new law is that unlike most developed countries that require three stages of clinical trials, including lengthy mid- and late-stage trials before new therapies are considered for approval, Japan's new policy requires an early stage clinical trial ( which is comparable to a Phase I or small Phase II) at the minimum to confirm safety of the therapy.

Rather than requiring that the therapy then be evaluated in subsequent trials before making it available to patients, Japan's new law will allow for a "conditional approval" enabling the product to be brought to market, and for the product to obtain reimbursement in an accelerated manner.

“Before these new laws were enacted, the regulatory pathway for clinical use of regenerative cell therapy was ‘one-size-fits-all,’ irrespective of the risk posed by certain cell types and approaches,” said Hedrick. “Now, Cytori’s point-of-care Celution System can be transparently integrated into clinical use by providers under our Class I device status and the streamlined approval process granted to cell therapies that pose the lowest risk.

This development has caught the attention of the investment community. MarketWatch noted that “the company has already conducted several clinical trials in Japan with more underway that have shown a consistent safety profile for its technologies. Cytori also offers StemSource, a cell bank product line, that could see an uptick in use as stem cell research increases in Japan.”

Regulations in Europe

Other global locations have held great importance to the growth of this company as well.  Early on the company received the CE marking which indicates a product’s compliance with EU legislation and enables the free movement of products within the European market. 

“While we are active in the EU, there are some challenges in that there are different issues in each market,” explains Hedrick. “You need to have a strategy for each country and the patent system in Europe is different from both the U.S. and Asia.“

Patents are especially important in this technology and the company has obtained 75 patents in a variety of countries since 2001. Currently they have 45 applications pending.

In Europe the company has completed and reported results from three clinical trials for heart attacks and has initiated a feasibility trial in the U.S. for refractory heart failure due to chronic myocardial ischemia.

US Approvals Moving Along

The approval process in the U.S is moving forward. In January the FDA approved a phase 3/ pivotal clinical trial to evaluate Cytori Cell Therapy as a treatment for severe hand disabilities in patients with scleroderma. Called ‘STAR,’ the trial of just 80 patients was approved based on data from a 12-patient Phase 2 clinical trial.  

This technology is approved in many countries around the world, and the company has a number of active global partnerships with academic hospitals, companies and government agencies.

And just last week Cytori treated the first patient in a clinical study of a stem cell therapy derived from the patient's own fat to treat one of the most common knee injuries - meniscus tears.

This two center phase I trial will be open-label and treat up to 60 patients. The study will evaluate if augmenting knee surgery with Cytori’s Cell Therapy, EDDM-50, will lead to quicker and more complete healing.

These recent approvals align with the company’s prediction that growth will continue which in turn will require increased manufacturing capability. As the maufacturing process is quite complex the device is produced at the company’s San Diego location, but materials are sourced from a variety of locations. One particular location that will do more manufacturing in the future is Wales.

Both this year and next will see growth based on the company'si strong competitive advantage. In its note to investors the company explains. “We have invested more than $200 million in research, product development and clinical trials. This gives us a significant first-mover advantage that strengthens barriers-to-entry against potential competition."

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