Stem Cell and Progenitor Cell Therapy: Current Uses and Future Possibilities

Report Highlights

• Hematopoietic stem cell therapies are still the most widely used and generate the most revenue, as can be seen in the table below. We project this will remain the case through 2007, by which time over $1.3 billion in revenues will be generated by the purchase of products and services in support of these therapies. The average annual growth rate for these products, from 2001 to 2007 is expected to be 29.2%. These revenue projections, like all others in this report, exclude fees charged by physicians for their services and general hospital costs.
• Skin, bone, and cartilage are largely derived from mesenchymal stem cells, as are tendons, ligaments, and fat cells (the epidermal layer of skin, however, comes from the ectoderm). Skin replacement to treat ulcers, burns, and surgical wounds was the first "off-the-shelf" living cell therapy to be approved. The progenitor cells for these products are fibroblasts and keratinocytes from newborn human foreskin. Chondrocytes (cartilage producing cells) are used to repair articular cartilage after knee injuries, with additional applications on the way. Combined cell and tissue engineering approaches for repairing bone fractures are being developed. In 2001, we estimate that progenitor cell therapies to replace skin, bone, or cartilage will generate about $43 million in revenues. By 2007, we expect this category to grow ten-fold to $457 million, as indicated above, for an AAGR of 48.1%.

INTRODUCTION

REASON FOR DOING THE STUDY

In 1998, BCC published Cell Therapy and Engineering: Emerging Products. Since that time, human embryonic germ cells have been isolated and propagated, engendering a large controversy over how and whether they should be used in therapy. The concept of therapeutic cloning has emerged as a feasible option. Additionally, numerous reports have been published concerning the properties of adult stem cells. Most significantly, it has been found that adult stem cells have an unforeseen plasticity that may allow almost any tissue to be derived from them.

Cell Therapy and Tissue Engineering has been rendered obsolete in record time. The current volume, by the same author, is not really an update to that report. The advances that have occurred in cell therapy, at least on the research front, are so all-encompassing that many were not even dreamed of at the time the previous report was written. Also, only therapies involving living cells are considered in this volume, excluding collagen implants and similar scaffolds used as products independently to rebuild tissues and organs.

STUDY GOAL AND OBJECTIVES

In this report, we seek to answer the following questions:

• What stem cell or progenitor cell therapies (hereinafter called simply "cell therapies") are currently in use to treat human disease?
• What cell therapies are currently envisioned?
• What is the likelihood that such cell therapies will ever be put into effect in the practice of medicine?
• What is the market for particular cell therapies, from the current year until 2007?
• Finally, what new technologies might come to fruition that might bear on the success of future cell therapies?

There is significant controversy over some aspects of cell therapy¾particularly the derivation of embryonic stem cells, the use of "therapeutic cloning", and the use of xenotransplanted (animal cells) in therapy. We will try to assess how the political and technological climate will impact the adoption of these controversial practices.

CONTRIBUTIONS OF THE STUDY AND FOR WHOM

This is a comprehensive and cohesive report on the development of cell therapies set within the existing regulatory framework and taking into account not only technical accomplishments but also political and financial realities. The study, therefore, establishes the necessary context from which to make rational decisions regarding decisions in this expanding field.

We have not shied from using our own experience and knowledge to make predictions on the likely course of events concerning the adoption of cell therapies and, in doing so, we have explained our reasoning. While we lay no claim to omniscience, we hope to have contributed at least a way of examining likely outcomes in this area.

This report is intended for entrepreneurs, venture capitalists, CEOs, development officers, and R & D directors, as well as research scientists looking for an overview of the cell therapy field.

SCOPE AND FORMAT

This report reflects the state of the art of progenitor cell therapy as of October 2001. We purposely chose the title Stem Cell and Progenitor Cell Therapy to avoid conflicts in the literature and in the popular press over what is and is not a stem cell. For the purposes of this report, a progenitor cell has the capacity to create progeny that are more differentiated than itself and retains the capacity to replenish the pool of progenitors. By that definition, both embryonic stem cells and adult stem cells are also progenitor cells, as well as the more immediate precursors to terminally differentiated cells.

This report covers the therapeutic uses of progenitor cells. In addition to replacing tissues that have degenerated—for instance, pancreatic beta cells in type 1 diabetes—progenitor cells may be used as delivery vehicles for drugs or genes, and for cellular vaccines. We do not consider non-therapeutic uses, such as the use of progenitor cells in drug discovery, toxicology or other biological research.

We examine, in some detail, the regulation of cell therapies in the U.S. and elsewhere, as well as the political and ethical controversies concerning the creation and use of embryonic stem cells.

We do not cover in this report the and issues of the largely non-profit transfusion industry—red blood cells, platelets, plasma, etc. We also do not consider tissue-engineering therapies that do not include living cells.

METHODOLOGY AND INFORMATION SOURCES

The information reported herein has been gathered from a variety of industry and other sources. The 10K forms and other SEC filings from public companies have been examined along with annual reports, catalogues, press releases, etc.. The World Wide Web is a rich source of information, as almost every commercial concern now has its own web page. Product literature and trade journals have been monitored, including BCC's own Medical Materials Update and Applied Genetics News. Where appropriate, medical literature and scientific literature have served as a research source.

We have also gathered statistical information from the U.S. government, the World Health Organization, and private foundations.

Armed with the industry and statistical information garnered above, market participants were interviewed to fill in the gaps of our understanding.

ANALYST'S CREDENTIALS

The author of this report, Steven Edwards, Ph.D., has a broad background in the biological and health sciences, and is well acquainted with advancing technology. He received his doctorate in Biology from the University of California, San Diego. His thesis work centered on the expression of murine leukemia virus genes, and was then awarded a National Health Institutes postdoctoral Fellowship to study neuroendocrinology at the Salk Institute. Subsequently Dr. Edwards was a Research Associate at La Jolla Cancer Research Foundation (now Burnham Institute) and later an Assistant Professor in the Biochemistry Department of Meharry Medical College in Nashville, TN. There he directed a research laboratory studying transcriptional regulation supported by grants from the American Heart Association and the NIH.

Dr. Edwards is now a medical industry analyst, science writer and editor. He is the editor of two BCC newsletters: Applied Genetics News, and Drug Discovery/Technology News. His journalistic work has also appeared in MIT's Technology Review, Diabetes Forecast, Genetic Engineering News, and other publications.

Dr. Edwards was the Project Analyst responsible for the BCC reports B-119 Cell Therapy and Tissue Engineering, Emerging Products (1998), B-127 Microelectronic Medical Implants, Products, Technology and Opportunity (1999) and B-143 Bones and Joints: Drugs, Devices and Regenerative Technologies (2000). He has performed market research on the orthopedics industry for Phaelixe, Inc., a consulting firm from Denver, CO, and consulted for venture capital companies.