Stemcell research will forge ahead despite a pioneer company’s recent move to drop a high-profile clinical trial, says an Orange County-based professor and entrepreneur who is a seminal figure in the field.
The stem-cell segment of the biotech industry was rocked earlier this month when Menlo Park-based Geron Corp. announced plans to halt a clinical trial on a potential spinal-cord injury treatment. The program was based on human embryonic stem cells licensed from Hans Keirstead, a professor at the University of California, Irvine.
Geron was the first company to start a Food and Drug Administration-approved clinical trial on stem cell treatments. It reported data a month ago that showed the therapy was safe in four patients who received the treatment, but Geron’s plans appear to have been undone by the economics of its niche.
“Frankly, the cost of development wasn’t supported by the very small market that spinal cord injury represents,” said Keirstead, who also serves as chairman of the scientific advisory board of California Stem Cell Inc., an Irvine-based startup that is pursuing embryonic stem cell treatments for neurological ailments and cancer. “This was a financial decision, not a reflection of stem cell technology.”
Potential
California Stem Cell is “investigating the possibility” of acquiring the Geron program, Keirstead said.
“Is there potential for California Stem Cell? Absolutely,” he said.
Geron said it plans to cut 66 jobs, or 38% of its work force, and change its focus to cancer treatments that don’t involve stem cells.
“We’re making these changes because in the current environment of economic scarcity and uncertain economic conditions, we need to focus our resources on advancing our phase II (cancer drug) trials,” Geron Chief Executive John Scarlett said.
Researchers have long seen great potential in stem cells, which have the ability to multiply into different types of cells and repair the human body. The World Health Organization has said that such cells may one day be used to treat currently incurable ailments such as Parkinson’s and Alzheimer’s diseases.
Geron was pursuing a potential market of only a few hundred potential patients because of criteria that were “so specific that they were trying to capture a needle in a haystack in spinal cord injury,” Keirstead said. “They had a plan to do seven clinical sites in order to capture eight patients—that’s kind of expensive.”
Geron also would have been “facing a ramp-up” if it had chosen to continue the tests, according to Keirstead.
“At this stage in development, when you know it’s looking good for safety, you begin to ramp up your production for the next phase, which will be many more patients,” Keirstead said.
Geron’s decision to exit the trial “certainly comes as a surprise and shock, given the company’s longstanding brand as a pioneer in stem-cell therapies,” said Joseph Pantginis, an analyst for Newport Beach-based Roth Capital Partners LLC, in a research report issued after Geron’s decision.
Pantginis said he expected Geron’s “brand” as embryonic stem cell pioneer to “carry significant weight” in any talks about any acquisition of the business or a partnership.
A company that acquires Geron’s stem-cell business could continue clinical trials in China or another overseas market with lower costs, Keirstead said.
California Stem Cell is working on developing potential human embryonic stem treatments for amyotrophic lateral sclerosis, or Lou Gehrig’s disease, and spinal muscular atrophy. Keirstead said the latter is the leading genetic cause of death for infants.
FDA Review
The company has an active investigational new drug application with the FDA that’s on clinical hold.
“The FDA’s reviewed our application to begin work in humans and asked us to do some additional work,” Keirstead said. “That work’s being done now.”
California Stem Cell expects to begin trials in 12 to 18 months.
The company also is in late-stage clinical trials on a potential treatment for melan-oma, a common type of skin cancer.
The company is funded by angel in-vestors (see related story, “VC Holds Own Here,” page 1).
It’s beginning to bring in some revenue through a division that produces liquids and screening plates used in drug development.
“We’ve just made it a decision to keep it to angel money,” Keirstead said. “Frankly, the VC world is a bit on its head, and the demands for securities and preferences and returns are a little bit onerous.”
