Select 2015 Stem Cell Company Catalysts: Sagient Research's Edward Stopke

Under agreement with StreetWise Reports, I'm pleased to share their recent coverage of the regenerative medicine sector.

Original Source: Source: Peter Byrne of The Life Sciences Report (1/22/15)
"Convert Catalysts into Profits: Sagient Research's Edward Stopke"

The biotech sector is teeming with companies racing to bring the hot new drug or therapy to the marketplace. But realistically assessing the therapeutic potential of pipeline products is the healthy approach for selecting a winner. In this interview with The Life Sciences Report, Edward Stopke of Sagient Research unveils his list of companies with catalytic moments in the making.

The Life Sciences Report: What types of catalysts affect biotech stocks?

Edward Stopke: The primary catalyst affecting a biotech stock is trial data, especially large Phase 3 trials that test the compound against a comparator. The other main catalysts emerge from regulatory interactions with the U.S. Food and Drug Administration (FDA) or the European Medicines Agency. Product safety rulings can drastically affect the trajectory of a biotech stock, of course. But investors need to watch a company's interactions in meetings with the advisory committees serving the governmental agencies. These interactions can presage whether or not the agency will eventually approve the drug.

TLSR: Are there economic catalysts that affect the life sciences sector as a whole?

ES: Pending changes in pricing policies for therapies can catalyze shareholder actions. Historically, many companies have been able to price high without too much backlash from payers. Companies have typically charged less for treatments with large patient populations, and the more expensive treatments target smaller numbers of patients. But during the last year, some high pricing became less sustainable. I am thinking of Gilead Sciences Inc.'s (GILD:NASDAQ) pricing for Sovaldi, its treatment for hepatitis C virus (HCV), which caused quite a stir with insurers and governments alike. Companies generally argue that high prices are in line with previous treatments and that the products offer superior efficacy. But the sheer number of eligible patients for a high-priced drug can strain entire healthcare systems. I predict that during 2015 payers will force prices downward, not just for highly prevalent diseases such as HCV, but in all therapeutic markets, stem cells included.

TLSR: What catalysts are coming up for stem cell companies in 2015?

ES: Cytori Therapeutics Inc. (CYTX:NASDAQ) is developing a stem cell therapy from fat-derived stem and regenerative cells. It has Phase 1/2 data for heart disease slated for release in Q1/15. Vericel Corp. (VCEL:NASDAQ), which recently changed its name from Aastrom Biosciences Inc., has Phase 2 data expected in H1/15 on tissue repair cells for heart failure. Athersys Inc.
(ATHX:NASDAQ) is developing a stem cell product called MultiStem.

TLSR: What are the projected applications for MultiStem?

ES: Athersys is studying MultiStem in human trials for stroke, myocardial infarction (MI) and graft-versus-host disease (GvHD). It is in Phase 2 development for stroke and early Phase 1 for MI and GvHD. The firm completed enrollment in its Phase 2 stroke study before the new year, so the first 90-day results will emerge in Q1/15E. Athersys plans to progress its MI program into Phase 2 in Q1/15. The company is looking for a development partner to further its program. Announcing a partnership deal would signal investors that experts have faith in MultiStem, and Athersys' stock price would respond positively.

TLSR: Who else do you like in the stem cell space?

ES: bluebird bio Inc. (BLUE:NASDAQ) is developing its Lenti-D product, which is more of a gene therapy product, but does consist of the patient's own stem cells. These are modified by the lentiviral vector to deliver genetic material into the cells themselves. There is a lot of hype floating around this company. It is currently in Phase 2/3 studies for a rare genetic disease, adrenomyeloneuropathy, which is similar to multiple sclerosis. Hopefully, we will see data for that pipeline product next year.

TLSR: What other therapeutic spaces do you like for strong catalysts in early 2015?

ES: Neuralstem Inc. (CUR:NYSE.MKT) has a major depressive disorder product in clinical trials code named NSI-189. It is an oral compound designed to stimulate neurogenesis of the hippocampus, which could potentially reverse the atrophy seen in depression and schizophrenia. So far, we have only seen earlier preclinical and Phase 1 data, but those results have shown meaningful reductions in both cognitive and depressive symptoms in patients who are on active therapy. And the treatment has been well tolerated.

TLSR: How does Neuralstem's product differ from competitive products?

ES: There are many treatments on the market for treating depression, of course. Most of these products, however, are small molecules. They work by inhibiting the reuptake of a combination of norepinephrine, serotonin and/or dopamine. Neuralstem's treatment uses the patient's own neural stem cells to protect against damage to the nervous system itself, and to repair existing damage, too.
TLSR: What expertise do Neuralstem's managers bring to the marketplace?

ES: Neuralstem's chief scientific officer and senior vice president of research previously worked at the National Institutes of Health's Laboratory of Molecular Biology, where they researched the isolation of human neural stem cells.

TLSR: Do you see any other potential catalysts for Neuralstem?

ES: If all goes well, Neuralstem's NSI-189 product will move into Phase 2 development in Q2/15, so that is a good advancement opportunity. We should see topline results in the early part of this year for the firm's other stem cell products, including NSI-566. That treatment is currently being studied in a Phase 2 trial for Lou Gehrig's disease.

TLSR: Who is making waves in the cancer treatment space?

ES: There is a lot of excitement surrounding the chimeric antigen receptor (CAR) T-cell immunotherapies that engineer the patient's own immune cells to target tumor-specific molecules. Kite Pharma (KITE:NASDAQ) is developing its CAR T programs for hematologic cancers, and its KTE-C19 program has shown high response rates in earlier Phase 1/2 studies. Kite just bought a licensing deal with Amgen Inc. (AMGN:NASDAQ). The deal is related to the next generation of immunotherapies based on Kite's cell therapy platform. Celgene Corp. (CELG:NASDAQ), Novartis AG (NVS:NYSE) and Juno Therapeutics (JUNO:NASDAQ) are working on similar programs.
Rexahn Pharmaceuticals Inc. (RNN:NYSE.MKT) has a couple of clinical-stage oncology candidates. Its most advanced compound is known as Archexin. It targets the PI3K pathway and is being studied in a Phase 2 trial for renal cell cancer. While we have not yet seen data yet from this compound, last year the FDA approved Gilead's Zydelig for lymphoma, which has a similar mechanism of action. Other large pharma companies, such as Novartis and Merck and Co. Inc. (MRK:NYSE), are studying similar compounds in various oncology indications. The research synergy with these big firms could prove fruitful for Rexahn in terms of acquisition potential.

TLSR: I see that Rexahn recently appointed Richard Rodgers to its board. What does Rodgers bring to the company?

ES: He brings experience with in- and out-licensing, as well as mergers and acquisitions. He was previously with Abraxis BioScience Inc. until it was acquired by Celgene. He was also with MGI Pharma Inc., which was acquired by Eisai Inc. (ESALF:OTCPK).

TLSR: What types of specific catalysts are likely to affect Rexahn's stock price?

ES: If Rexahn can harness Rodgers' experience to secure a licensing deal for Archexin, its stock price would obviously respond positively. It has a few other early-stage compounds in various tumor types. If any of these products survive later-stage studies, the market will provide rewards. We could see some Phase 1 data from Rexahn's RX-5902 and RX-3117 compounds in the near future. These are being studied for very solid tumor indications.

TLSR: What other biotechs with emerging catalysts do you follow?

ES: I like quite a few smaller companies, like Raptor Pharmaceutical Corp. (RPTP:NASDAQ), Celator Pharmaceuticals (CPXX:NASDAQ), Sarepta Therapeutics Inc. (SRPT:NASDAQ), Celldex Therapeutics Inc. (CLDX:NASDAQ), PTC Therapeutics Inc. (PTCT:NASDAQ) and Rockwell Medical Inc. (RMTI:NASDAQ). Each of these has a unique pipeline.

TLSR: Can you synopsize where each of these companies is at in the pipeline?

ES: Raptor Pharmaceutical's main compound is Procysbi. It is already on the market. It was approved in 2013 to treat cystinosis, and it is one of only three such treatments approved in the U.S. Raptor is also studying Huntington's disease and nonalcoholic fatty liver disease, the latter being of notable interest due to its large market size and connection to obesity. Raptor is expecting results from its larger Phase 2b study in H1/15.

Celator Pharmaceuticals is developing CPX-351 for leukemia. It began Phase 3 development in late 2012 with about 300 patients. The first results from this study are expected sometime in Q2/15.
Sarepta Therapeutics has a number of compounds. The most advanced is eteplirsen, developed for a type of muscular dystrophy. We have seen clinical data on it, and it is fairly good, although taken from a small subset. There is a lot of speculation about whether the FDA will accept Sarepta's new drug application (NDA) and what kind of data the agency will require for approval. Sarepta expects to file around the middle of this year. A successful filing and acceptance could move the stock price nicely.

PTC Therapeutics is developing its ataluren compound for muscular dystrophy. The company submitted a rolling NDA to the agency in late December. It is not yet a complete application, but it does allow completed portions of the application to be submitted and reviewed on an ongoing basis. PTC hopes to complete the application in late 2015. We should see the first results from its larger Phase 3 study toward year-end 2015.

Celldex Therapeutics' most advanced candidate is rindopepimut, which is being developed for glioblastoma, brain cancer. Topline results for a large Phase 3 are expected in the middle of this year. If the results prove positive, Celdex shareholders will benefit, as rindopepimut is the firm's main compound in a large treatment space.

Rockwell Medical has a single compound called Triferic. It is being reviewed by the FDA as a treatment for iron deficiency in chronic kidney disease patients. The agency is expected to give a decision on provability by the end of this month.

TLSR: Aside from handicapping the pipeline products, what qualities do you look for in a firm?
ES: It is vitally important to understand the capital structure of a company. As far as a company's potential staying power, I look at the general platform. Is it a stem cell platform? Is it a genetic therapy type of platform? Is it a completely new mechanism of action? Is it something that could be used in various types of diseases?

TLSR: Sounds good, Edward. Thank you for speaking with us.

ES: Thank you, Peter.

Edward Stopke is a financial analyst with BioMedTracker and has been with Sagient Research for three years. He is responsible for day-to-day analysis with the BioMedTracker analyst team, and works with the scientific analysts to determine the financial and market impact of early-stage drugs. In his time with Sagient, Stopke has gained an understanding of the pharmaceutical and biotech development process to better develop revenue models for various indications. Stopke received a bachelor's degree in economics from San Diego State University.

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DISCLOSURE:
1) Peter Byrne conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Rexahn Pharmaceuticals Inc., Neuralstem Inc., Athersys Inc. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
3) Edward Stopke: I own, or my family owns, shares of the following companies mentioned in this interview: Gilead Sciences Inc., Sarepta Therapeutics Inc. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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Washing cryopreserved cells. An emerging need or disappearing process?

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I’m not a fan of the allogeneic vs autologous business model debate because I don’t believe it’s a debate that rages other than at conference panel sessions.  Most investors, researchers, and executives recognize that there will almost certainly be room for both to succeed and that the winner in any particular indication will be largely determined by proven clinical efficacy over the standard of care and other available treatment alternatives.

Cryopreserved vs Fresh

The oft-touted primary commercial advantage of allogeneic cell therapy products over their autologous counterparts is the ability to inventory standardized products for later on-demand distribution and use.  This contributes to the ‘economies of scale’ advantage allogeneic products enjoy.  Certainly this is true.

Critics of the autologous business model cite the high cost of single-batch lot sizes and short shelf-life of autologous products- often shipped fresh - as the primary drivers of the high cost of these types of products and the variation in cell composition of therapeutic products derived from patient to patient.  Certainly also true.

Nonetheless, the two issues most involved in a debate comparing the business models are cost and price implications of the relative bioprocessing scalability and distribution costs of each model.  For sake of convenience it is most often assumed that allogeneic cell therapies are cryopreserved and autologous products are delivered fresh from the manufacturing site to the clinic for delivery to the donor-patient.  This is, of course, an over-simplification because it is not always true.    

Take, for instance, Opexa Therapeutics’ Toxavin which involves the cryopreservation of multiple doses (potentially representing several years) of treatment from a single patient apheresis.  This is in stark contrast with Dendreon’s Provenge which requires a new apheresis for each of three monthly treatments and a limited shelf-life of a fresh product of approximately 72 hours. One cannot avoid concluding that the likely cost implications of such a difference are bound to be significant considering the differences in upstream collection, processing, and distribution costs.

I want, however, in the last few paragraphs of this post to focus attention on a couple of aspects related to cryopreservation of cell therapeutics.  Firstly, as a digression, I am often left with the impression that executives and analysts alike often over-estimate the cost of shipping fresh products (with their temperature and time sensitivities) compared to the costs associated with shipping cryopreserved products which most often require heavy and bulky LN2 shippers as well as facilities and personnel experienced with receiving and handling cryopreserved products at regional repositories and local pharmacies.

 

Does the existence of cryoprotectant excipients dictate point-of-care cell washing?

Currently the short answer is “not necessarily”.  The primary point I want to address here, however, is related to the costs currently associated with balancing the excipient and processing requirements involved in cryopreserving, storing, and thawing cells on the one side with the need to have a product that is clinically safe, effective and well tolerated by the patient on the other side.  Companies developing cryopreserved cell therapies have three choices in this regard:

1. Infuse the patient with a product that includes cryopreservant excipients (almost always including some levels of DMSO being the overwhelmingly dominant reagent) recognizing the impact on patient experience and infusion volumes (a more significant concern in bodily regions where capacity is small (e.g., heart) or potentially sensitive (e.g., brain). 
2. Invest in developing an infusion-ready formulation that significantly minimizes the amount of excipients.  This may or may not involve a thaw or post-thaw dilution.  
3. Commit to a process that involves point-of-care, post-thaw washing and re-concentration of the product to remove excipients and minimize the volume size of the product to be infused.

In terms of examples, we believe Mesoblast is currently in the first camp, Celgene has pursued the second strategy, and Athersys is an example of a company using the 3rd approach.  Each have a similar cell type and all three are pursuing some of the same indications. 


Some companies have worked hard to bring to market cryoprservant formulations that reduce the amount of DMSO (e.g., BioLife Solutions).  Some predict that in the near future DMSO-free cryoprservants will be a real fourth option (e.g, Essential Pharma's Cryo-Ess currently for Research Use Only). 


These products will have to be pioneered by some early-adopters before they are readily considered by the majority of players in a field which is oft-defined both by its dogged pursuit of precedent and reticence to be mold-breaking and innovative.

Stem cell transplanters are also faced with deciding between first and third course.  While different considerations and drivers apply to them vs companies developing s.351/ATMP products, they are still faced with the decision to wash or not.

What factors to consider in the “to wash or not wash” debate?

Of the many and somewhat differing factors to take into account, cell therapy developers and stem cell transplanters share a number of common considerations when deciding how to treat cryopreservants in the clinical setting:

• Regulator’s general tolerance of DMSO in the final product formulation to-date.  Despite this record of tolerance, it is expected that for certain indications and/or for certain types of routes of administration, there may be significantly more regulatory scrutiny concerning injecting DMSO.  Indeed, DMSO is classified as a Class 3 (relatively low risk) solvent in ICH Q3C with a recommendation of 50 mg/day as upper threshold below which one does not need to ‘justify’ its presence.  The typical DMSO solutions used in cell therapy labs contain about 1 gram (not mg) per mL before dilution-- so if used at 10% in final product, this translates to 100 mg per mL. Therefore a 10 mL cell therapy product (at 10% DMSO) would contain 1000 mg (1 gram) of DMSO (20 times the ICH threshold).

It may be worth noting that apparent regulatory tolerance of the infusion of DMSO may be somewhat tied to the fact that most previous applications have involved the IV injection - allowing for excipients to e rapidly diluted in systemic circulation.  For cell therapies delivered some other way, potential toxicity may be a more significant concern.

• Concentrations of 10-20% DMSO has been traditionally used since the dawn of stem cell transplantation with minor reports of allergic reactions (e.g., hives, itching or facial or glottal edema) and only rare reports of more serious anaphylactic/oid reactions. Side effects of DMSO include hypernatremia, fluid overload, dysgeusia (distorted taste), nausea, vomiting, elevated liver enzymes, hemolysis, renal failure, and allergic reaction.  DMSO toxicity is the most common complication of stem cell transplantation with symptoms including flushing, rash, chest tightness, nausea and vomiting, an cardiovascular instability (as outlined in the Circular of Information for the Use of Cellular Therapy Products).  Ruiz-DelGado recently reported dimethyl sulfoxide-induced toxicity in cord blood stem cell transplantation and reviewed the literature (Acta Haematol. 2009;122(1):1-5).  The authors reported the incidence of any cord blood infusion reaction ranging from 4% to 65%, with life-threatening infusion reactions occurring in up to 4.6% of patients. 

It is worth noting that  the FDA’s Pharmacovigilance Review Memo, related to the FDA’s recently approval of the New York Blood Centers BLA for its cord blood progenitor product named “Hemacord”, includes the following statement:  

“Exposure to DMSO and Dextran-40, though not completely avoidable, can be limited by proper preparation before infusion of cord blood. Warnings and instructions for preparation (e.g. thawing, washing, dilution) should be included in the label.”

• Even for those patients who do not experience any toxicity, allergic, or anaphylactic/oid reaction, there is an undisputed and significant ‘garlic’ odor and taste experience by the patient as well as the issues related to having to consent around the infusion of such excipients.

• One of the outstanding regulatory questions is to what extent regulators will consider point-of-care washing steps to be a final manufacturing step.  Closely related, but not necessarily intrinsically tied to this issue, is the question of whether a final release assay will be required to test a final product which was washed and re-concentrated post-thaw.

• Finally, one is tempted to wonder whether to what extent regulatory opinion, commercial strategies, development pathways are influenced by what has been to-date a lack of commercially acceptable and viable technical solutions to post-thaw washing and re-concentration.

On this last note, Cell Therapy Group is working with Stem Cell Partners on bringing to market what we believe is potentially a simple, quick, cost-effective, easy-to-use density phase washing centrifugation device utilizing commercially available reagents and centrifuges – the EnsuraSep Cell Washer.  

Have a quick spin through the brief technology outline at www.cellwasher.com and I would be happy to discuss it further with anyone interested.  

We are working on different configurations and sizes of that device for different applications. Stem Cell Partners is working with our clients to design custom canisters and reagent-formulations to meet their specific requirements.  Stem Cell Partners is also working on alternative centrifugation-based device that has a wider-capacity range. 

While we believe the Ensura-Sep Cell Washer may enable a simple and rapid washing and concentration of a cell suspension in a single centrifugation step, CTG is also working with other companies who are pursuing other solutions using different technologies such as filtration.

There is currently much expert divergence on the question of what role point-of-care cell washing/concentration may play in the future of cell therapies.  I invite any and all comments or feedback on this post either using the comment function here or in the discussion thread mentioned below in the LinkedIn Cell Therapy Industry Group.

___

Much thanks to a great discussion thread in the LinkedIn Cell Therapy Industry Group called “Clinical preparation of frozen cell therapy products” which inspired must of this content with a special nod to Jon Rowley, Reinout Hesselink, EJ Read, Christopher Bravery, and Ali Mohamed.

Cell Therapy HiLites 2008-11-14

Here's what caught my attention this week:

Celgene received FDA clearance to proceed with its placenta-derived stem cell clinical ttudy - a phase I, multi-center trial for moderate-to-severe Crohn's disease.

MiscroIslet filed for Chapter 11 bankruptcy protection but expects to restructure as a private company, continue operations, and file its first IND by year's end for an encapsulated porcine-islet product to treat diabetes.

Celladon released promising phase I results for the first gene therapy trial for advanced heart failure.

Cytori is starts to sell some of its StemSource® cell banking systems for collecting, processing, and storing adipose-derived cells. The company received its first order from Asian distributor Green Hospital Supply. The cell bank is to be set up in Japan. Despite all the continued skepticism about the value of cell banking to the donor-potential-patient, cell banking businesses are popping up prolifically around the world on the promise of short-term revenue to fund long-term R&D while providing a service some believe to be of irreplaceable value.

Although technically not a company-related cell therapy story, one of the more interesting developments this week was the announcement out of Charite in Berlin that they have a patient who is AIDS-free following a unique stem cell transplant. The patient developed leukemia which the docs were going to treat with a stem cell transplant. But rather than do the routine transplant by finding a match and treating just his leukemia they dared to be a little different. They went looking for a donor that matched and also had a CCR5-gene mutation (a naturally-occurring mutation which makes life difficult for the HIV virus according to some studies). The Berlin team found 80 compatible bone marrow donors for their patient, an unusually high sum, two of whom had the CCR5-Gene mutation. One of these they used with surprising and heartening results. What I like about this story almost as much as the happy ending and exciting discovery is how the doctors are trying to control the hype around this single-patient data and early results. It's not likely that this kind of transplant is a future treatmtent (for reasons related to supply, demand, and other commercial realities) but perhaps there is a kernal of a cell therapy product here somewhere that someone as innovative as these doctors will develop in time.

Ok I'm late on the draw here but it just came to my attention that in August NovaRx initiated a pivotal phase III in lung cancer patients. Watch on this blog in the coming days for more on the perception-vs-reality gap related to the number of industry-sponsored cell and gene therapy trials currently active worldwide.

Introgen may disappear while on the brink of success. Despite have an MAA being reviewed in the EU for their gene therapy for head and neck cancer, their BLA submission for the same therapy was rejected by the FDA as incomplete (currently under appeal). The company is now "exploring options" after a troubled Q3.

While not for its cell therapy program, Athersys announced it had achieved a clinical development milestone in its Bristol-Myers Squibb alliance. The amount of the milestone payment has not yet been revealed but any revenue is good revenue to offset the cell therapy development burn.

Bucking recent trends, StemCells Inc. (STEM) announced it will raise $20M in a stock sale to select institutional investors. Good news for any company in these times. Even better news for the cell therapy sector!

Finally, in the most over-reported news of the day, Pfizer opens up a regenerative medicine shop. I agree this is big news. This is not a minor investment; it's not throwing some money at a portfolio of biotechs in hopes that something will stick; it's not using stem cells as tools for drug testing or discovery. This is evidence of a belief by those in the halls of some of the tallest towers in life sciences, that cell therapies are going to change the way we treat people. Here are a couple quotes:

“Pfizer Regenerative Medicine represents a great opportunity to focus world-class research in a field that holds considerable promise for biomedical science and for the treatment of many debilitating conditions such as diabetes and neurodegenerative disorders.” said Rod MacKenzie, PhD, head of Worldwide Research at Pfizer.

The unit will be led by Chief Scientific Officer, Ruth McKernan, PhD, who said “I’m very excited to lead this new research unit. While there is still a lot to understand about how stem cells can be used therapeutically, we believe it is one of the most promising areas of scientific research.”

Ok, one more. Corey Goodman, PhD, President of Pfizer’s Biotherapeutics and Bioinnovation Center, said, “The formation of this new unit represents another key step forward in Pfizer’s commitment to be at the forefront of new approaches in biotherapeutics and bioinnovation and to expand our research efforts and expertise into emerging areas of biomedical science, like regenerative medicine, that have great potential for human health.”

Apparently the unit will operate independently (in the fashion of smaller biotechs) with about 70 researchers when fully staffed - in both Cambridge, UK and Cambridge, Mass - and work collaboratively with "leading academic, biotech and pharmaceutical partners around the world.


That's the cell therapy industry as I saw it this week. Happy weekend.

The Perfect M&A Storm is Brewing.

I'm not going to write only about the financial side of cell therapy sector but I'm on a roll here so I'll continue on the theme for at least on more post.

I've been privy to a lot of conversations recently in which M&A is on the tip of everyone's tongue. I'm likely not going out on too much of a limb - and certainly won't be the only one on it - when I make the prediction that the next 12-24 months is going to see a spike in M&A activity at all levels in the cell therapy industry.

I don't think I need a hard data set to convince you that we've seen an increase in M&A activity over the past 6 months.

This I know:

• There is a fair amount of M&A activity right now in the sector.
• The M&A pendulum has now swung back to the "sexy" side after falling out of favor for some time.
  
• A high percentage of companies in the sector are expressing interest in some level of merger or acquisition.
  
• There are a lot of M&A discussions currently being explored.

Certainly we're seeing this in the larger biotech sector with Roche's offer for Genentech, MacroGenics' acquisition of Raven Biotechnologies, Lonza's purchase of Amaxa Biosystems, and Invitrogen's merger with Applied Biosystems as prime examples just in the past few weeks alone.

There is a perfect storm of factors brewing up the ideal climate for a spike in M&A. VCs are increasingly tightfisted and conservative about life sciences for now, capital markets are tough with predictions it won't get better for some time (see today's IN VIVO blog), and - to round out the trifecta - the sector's maturation translates into increasingly larger burn rates for a higher number of cell therapy companies in later stage trials.

I'm not in the business of spilling confidential information or spreading rumor so any companies mentioned below are used simply by way of example. Don't assume I know something you don't know about any of the companies referenced below.

So what might this potential M&A dustup look like?

It will certainly involve many smaller companies - think Onyvax, KeraCure, Aastrom, Memgen, ReNeuron, HemoGenix, Novocell, Opexa, IRX, BioLife Solutions, BioSafe, Cellerant, Eufets, Progenitor Cell Therapy, Angel Biotech, Epiontis, ISCO, Lifeblood Biological Services, Stem Cell Sciences, Thermogenesis, TiGenix - some of which will look to M&A to solve their fundraising needs and others will be M&A targets because of their revenue stream.

Larger companies are not likely to be immune from this swing of the M&A pendulum - say (for example!) Dendreon, Neurotech or even - might it be possible - Osiris? The newly improved, profitable, and growing Organogenesis might be a target for its revenue and Stem Cells Inc has been none-too-shy about its M&A intentions for some time. It may involve some bigger companies in the sector - say like Genzyme or Caridian BCT (formerly GambroBCT) which we know is almost certainly being positioned for a resale by the private group that bought it to maximize its value for resale.

What is not clear is who might be the buyers. Potential companies that pop to mind include BD , Celgene, and J&J. Might Amgen make a play? What about Shire, Schering, or any of a number of other pharma looking to diversify their sagging pipelines and bolster their lackluster innovation initiatives. There will likely be other players external to the field who use M&A as an entree into the sector - think Reliance Life Sciences

We know Hospira is making a play in the cell therapy space with several investments they won't yet disclose. They hiring key and experienced executives (e.g., K. Gunter from ViaCell some time ago and recent D. Perritt from J&J). It would appear they are positioning to make a significant play in the market and it would not be surprising to see it in the services side of the sector.

It is likely to be an interesting year or two for cell therapy. On the other side of it, the industry will likely look much different, be more robust, held by a much wider diversity of parent companies, investors, and shareholders, and likely somewhat more integrated with other biotech/pharma.

So...make sure your boat is tied up, get a good window seat (if you're a watcher) or a kite sail (if you're want to participate), and let's have fun. Let's make sure smart deals get done that get good technologies in the hands of companies that will make them work - as therapies, as the base of sold companies, and rewarding to investors with the cojones & foresight to put cell therapies in their portfolio.