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Tuesday, July 31, 2012

Monthly recap of funds raised by cell therapy & regenerative medicine companies

 

UPDATED AUG 8

We have been tracking funds raised by companies in the cell therapy and regenerative medicine space since the beginning of the year.  

While we try to include all investments, we don't purport to track all grants coming into the sector.  Where we can, we try to catch the more sizeable non-profit, defense, and regional government-type grants as well as the larger  NIH, SBIR or EU-type grants received by companies.

January and February saw a fair number of relative small deals and grants totaling a mere $22M brought in by Pluristem, Cardio3 Bioscience, Athersys, Cytomedix, Neuralstem and Intellicell Biosciences.

March and April saw companies in the sector bring in a little more than $100M each month. We summarized March in our post Cell Therapy Companies Post a Relatively Good Financing Month and April in our post Another > $100M month for companies in the cell therapy space.  With the addition of bluebird bio's Series C (of $30m) described in more detail below, April actually saw more than $200M pumped into the sector.

April also saw two asset-focused deals in the space for undisclosed amounts with Cook Group buying out General Biotechnology and Shire Pharmaceuticals buying the primary assets of cell therapy company Pervasis Biotechnology.  Additionally, Islet Sciences announced that its wholly-owned subsidiary DiaKine Therapeutics, Inc. received grant support totaling approximately $2.1M including $1,831,250 from the National Institutes of Health (NIH) and $250,000 from the Iacocca Foundation.

May and June were again relatively quiet with companies in the sector (Northwest Bio, Living Cell Technologies, and Gamida Cell) bringing in around $16M.  Near the month's end Coronado Biosciences closed an IPO grossng $28.8M

July has seen the sector once again top the $100M threshold (provided we define the sector broadly).  This month has seen the following in-flow of money:

  • Juventas Therapeutics, a regenerative medicine (not cell-based) company, kicked off the month with a $22M series B co-led by Triathlon Medical Venture Partners and New Science Ventures.  All previous venture firms, including Fletcher Spaght Ventures, Reservoir Venture Partners and Early Stage Partners also participated in the round.  Also joining the syndicate were new investors Takeda Ventures, Venture Investors, Global Cardiovascular Innovation Center, Tri-State Growth Fund, Glengary and some angel investors. This round is targeted at moving Juventas through phase II trials of their lead product, JVS-100, in both chronic heart failure and critical limb ischemia.
  • Histogenics then completed a $49M round led by Sofinnova Ventures with participation from additional new investors Split Rock Partners, BioMed Ventures and FinTech GIMV Fund, L.P. Existing investors ProChon Holdings BV, Altima Partners, Foundation Medical Partners, Inflection Point Capital and Boston Millennia Partners also participated in the financing intended to allow the company to complete a phase III trial of its cell therapy, NeoCart, for the regeneration of cartilage in patients suffering from cartilage lesions in the knee. 
  • bluebird bio, a cell-based gene therapy company (using gene-modified cells as the therapeutic product) then did the month's biggest deal with a $60M over-subscribed Series D.  In this round, new investors Deerfield Partners, RA Capital, Ramius Capital Group, and two undisclosed blue chip public investment funds joined existing investors ARCH Venture Partners, Third Rock Ventures, TVM Capital, and Forbion Capital Partners. In addition, Shire plc joined the round as a strategic investor.  This comes hot on the heals of bluebird's receipt of a $4.2M grant in March and a $30M Series C in April.  (Note that we missed these two in our previous blog posts for March and April.)
  • Opexa Therapuetics then brought in a much-needed injection of $4M in a private offering of convertible secured promissory notes and warrants intended to get them started on their phase IIb of the newly-named cell therapy, Tcelna (formerly Toxavin), in multiple sclerosis.
  • Finally Stem Cells Inc finally backed up to the CIRM trough for a grant of up to $20M which it will spend in conjunction with University of California, Irvine in hopefully moving their HuCNS-SC(R) product candidate (purified human neural stem cells) into a clinical trial for cervical spinal cord injury.

All tolled, July saw $155M come into the sector through various means and into companies ranging in maturity from pre-clinical to an ongoing phase 3 trial.

This makes a running total for the year to-date of just over $570M.  

If you are aware of other monies brought into the sector let us know and we'll update our data accordingly. 

Thursday, July 26, 2012

FDA 1. RSI 0. Regenerative Sciences (Regenexx) vs FDA (2012)

 

As followers of this blog will know I've been blogging about Regenerative Sciences and predicting their eventual run-in with the FDA since my first post in September 2008 (Cell Therapy is Not the Practice of Medicine) and again in February 2009 (Regenexx vs the FDA 2009).  When the FDA finally proceeded with an injunction against RSI in August 2010,I helped spread the news (here).

I've watched the development of the fight between RSI and the FDA with interest.  In September 2001 I posted a rather lengthy commentary about the potential impact of the case (Potential far-reaching implications of the ongoing fight over point-of-care autologous cell therapy.

Since then I have welcomed other bloggers and commentators who are now following and commenting on the case much more closely and frequently than I including @LeighGTurner (on Twitter) and Paul Knoepfler (@PKnoepfler on Twitter and his Knoeplfer Lab Stem Cell Blog).  Recently I enjoyed being interviewed by Paul on the issue of unregulated stem cell activity and touched on the case for his blog.

Consequently I read with interest yesterday's federal court ruling upholding the FDA's injunction against RSI and the immediate commentary from the New Scientist, Stanford's Scope Blog and Knopfler's multiple posts (here and here). As a long-term follower of this case, I've been asked to comment.  Here is my brief reaction:

This is a case that was always destined for the appellate courts regardless of which way the initial court ruled.    The fact the federal court ruled in the FDA's favor certainly now sets the onus on RSI and what is anticipated to be a gamut of intervenors but taking this case to the appellate courts is what the legal team have anticipated and legal arguments designed for all along.

This is just the beginning of what will be a long and interesting battle.  The ruling was nothing more than the granting of an injunction in response to the government's motion for summary judgement.  In granting the injunction the court  agreed with the government's position that it was acting under the authority given it under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 321(g) but it provided little-to-no rationale for its ruling.

The court chose, in its wisdom, not to address the bulk of the RSI's legal arguments which are largely jurisdictional in nature. These are the kinds of arguments which the lower courts prefer be dealt with by appellate courts and frankly the judge did us all a favor by ruling quickly, succinctly and punting the case where we all knew it was inevitably headed.

In my opinion, other than chalking one up in the government's win column there is little to be gleaned from this ruling in terms of how RSI's arguments will be received in appellate court.  The interesting day is yet to come.

In terms of a short-term practical impact, frankly I see very little.  RSI has already ceased distributing Regenexx within the US so there will be little-to-no impact there.  As for the potential impact on other companies or clinics who might be operating on the fringes of FDA regulation within the US, I suspect it will be business as usual.

Most of the clinics/companies offering cell-based treatments/products which are arguably in contravention of FDA regulation are operating under the clear knowledge of what they are doing and where the FDA stands with respect to the treatments/products they offer and yet they persist and continue.


 For the truly fraudulent there is the risk of criminal charges and/or litigation but for those companies or practitioners who are operating in this shade of grey which are not shady (and they do exist), the  risks associated with this practice are barely higher than in the routine practice of medicine. 


In reality, with the exception of the most fraudulent examples, it takes a fair long-time for the FDA to catch up with these folks and there is good money to be made in the interim.  When they get caught, they will stop. If they've recouped their initial investment (which is nominal and the margins are high) there is very little penalty to this course of action.  Perhaps they set up shot elsewhere or simply enjoy the proceeds.  I doubt we will see much of a slow-down of this kind of activity.  Indeed it may strengthen the resolve of those committed to the cause.

In my opinion yesterday's ruling was in interesting and important milestone in a continuing evolution in the debate of how best to regulate the use of cells in treating people but I'm not sure it's the seminal pivot point that some believe.  I suspect we will not see any radical shift in terms of FDA or industry activity until (if then) the appellate courts rule.

Just my two cents....

--Lee