Will 2017 be the year of Cell Therapies?

Will 2017 be the year of Cell Therapies?
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While 2016 may not go down as a lot of people's favorite year, one development most people will agree to put a positive checkmark beside is the near-unanimous passing of the 21st Century Cures Act in the United States.

In the last breaths of its tenure, the Obama Administration was able to bring both sides of Congress, the patient community and industry lobbyists together in a consensus on what was needed to drive better, faster medical innovation in the years to come. Faster cures to future patients.

There are a lot of reasons to be pleased with the many provisions of the 21st Century Cures Act but as the CEO of a cell therapy company, RepliCel Life Sciences Inc., I'll focus this brief post on the area in which I've dedicated most of my professional life.

Out of the spotlight of the more prominent provisions of the Act, is a section pertaining to what I predict will be a growing but eventually radical boost to the development of regenerative medicines such as "cell therapy, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products".

Regenerative medicine is the idea that we can use cells or tissue from a patient or donor and do something more therapeutically significant for patients suffering from disease or conditions than we can do with drugs or other therapies. This next pillar of medicine dares to cure not just slow disease progression or reduce symptoms.

The 21st Century Cures Act promises not only foster the development of such therapeutic products but presents, I believe, exciting reasons to re-look at investing in cell therapy and other regenerative medicine companies. Here are four such reasons:

1. The Act clearly establishes this emerging sector of cell therapies and other regenerative medicines as an official part of the bio-pharmaceutical industry and the future of healthcare in America.

2. The Act provides for any product designated as a "regenerative advanced therapy" to be the beneficiary of 'priority review' by the FDA.

3. The Act mandates the FDA to define a pathway for 'accelerated approval' for products designated as 'regenerative advanced therapies'.

Why does this radically change the investment thesis for cell therapy and regenerative medicine companies? It is almost impossible to imagine how 'accelerated approval' does not translate somehow into provisions that mimic conditional approval such as those implemented in Japan a couple years ago. While there will almost certainly be stringent post-marketing and/or patient registry obligations, this translates inevitably into a shorter clinical development pathway resulting in regenerative medicine products getting faster-to-market and the companies quicker-to-revenue. This shortens the return-on-investment window for those companies developing products likely to be eligible for the 'regenerative advanced therapy' designation.

4. The Act drives a further wedge between the 'stem cell clinics' providing ill-defined treatments with inadequate evidence that they work and the companies investing in regulated clinical trials and developing well-defined products. To the extent that patients and/or investors are confused by the distinction between such clinics and companies developing regulated products, the Act provides yet another piece of clarity and direction that Congress and the FDA will continue to step up efforts to ensure cell therapies are regulated and both patients and investments are protected from unregulated competition.

As larger-cap cell therapy companies such as Juno Therapeutics and Kite Pharma race for FDA market approval in 2017 based on relatively small phase 2 data, it is a prime opportunity for smart investors to look at the wave of cell therapy companies in the micro or nano-cap categories. I'm excited about what we're doing at RepliCel Life Sciences with cell therapies for chronic tendon injury, pattern baldness and anti-aging of the skin and the series of clinical data announcements we have in early 2017 but there are a number of similarly exciting regenerative medicine companies worth attention (see, for example, the website of the Alliance for Regenerative Medicine, as a great resource for finding such companies).

Here's to an exciting year for cell therapy companies, investors, products and - most importantly - the patients who will benefit from our daring to develop regenerative medicine cures.

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