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Stem cell therapies a big risk for biotechs

November 1st, 2012 10:01 am

Companies that want to make big money developing therapies with stem cells and regenerative medicine must take big risks.

Health care executives involved in commercializing these technologies made that point Monday morning at the annual Stem Cell Meeting on the Mesa. But with the science increasingly looking solid, it's time for companies to do their part to bring new treatments to patients, they said in a panel discussion.

Among the unknowns: How effective therapies will be, how much they'll cost, how much insurers will reimburse and the effect of the health care overhaul. Companies have to focus on such questions if they want to succeed, said Dean Tozer, vice president of corporate development for Shire Regenerative Medicine. The unit was formed in July by Shire Pharmaceuticals, which bought San Diego-based Advanced BioHealing last year for $750 million.

"What I'm seeing is: Innovation for innovation's sake is not going to work," said Tozer, who was an Advanced BioHealing senior vice president.

The right approach is to focus innovation on the large-scale trends in health, such as an aging population, that create opportunities, Tozer said. And that's what the business side is taking a more assertive role in doing.

"The business guys are involved a lot earlier, in taking these opportunities and really critically deciding if there is a business to be had," Tozer said. "And it's not just whether it can get to the market and can it help you, but can you identify a payback model."

Stem cells are being tested for a variety of diseases and injuries, usually after being changed into the mature cells required. Besides the well-known embryonic stem cells, there are "adult" stem cells, IPS cells that act like embryonic stem cells but are made from skin cells, parthenogenic stem cells made from unfertilized human egg cells, and others. With this plethora of approaches, one question is which technology to focus on.

"As a business guy -- I'm not a scientist -- I do find it interesting that I'm getting drawn into meetings more often now where I have no idea what the scientists are talking about, but all I've got to do is figure out is there a business model," Tozer said

The panel was moderated by Greg Lucier, chief executive of Life Technologies Corp. The Carlsbad company sells products used in life science research, including stem cell research. Lucier asked the panel if the increased focus on commercialization means that the underlying technology is getting better.

Tozer replied that even with good technology, the real hurdle is financial. Advanced BioHealing is a good example, he said. The company acquired its living skin product Dermagraft in 2001, but only got the payoff 10 years later when the company was sold. Dermagraft promotes healing in diabetic foot ulcers.

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Stem cell therapies a big risk for biotechs

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