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Stem Cell Therapy Has Perhaps the Most Potential of All of the New Technologies in Development by Biopharma


In previous articles, I have written about technologies that have been or promise to be paradigm shifts in drug development:

  • The very earliest drugs used by humans were found in plants. For example, ancient Egyptians chewed on willow bark to relieve pain. It contains a molecule closely related to aspirin.
  • In the late 1800s, advances in organic chemistry allowed researchers to synthesize small organic molecules which until the 1980s was technology base for almost of the drugs that were developed and remain the largest part of our therapeutic armamentarium. This technology created the pharmaceutical industry
  • Large molecule drugs (proteins) created with recombinant DNA technology arose in the 1980s, human insulin being the first important commercial product. The number of therapeutic products arising from this breakthrough was limited. However, it was critical to the manufacturing of monoclonal antibodies.
  • Monoclonal antibodies that use the specific disease targeting action of antibodies to treat many diseases began to emerge in the 1990s. They are currently the major driver of biopharma research and commercial sales.
  • Gene therapy and RNA interference are just beginning to be commercialized and have enormous medical and commercial potential.

What comes next? In  my opinion, understanding the biology of stem cells and their cell lineage has the promise to surpass all of these technologies in treating disease and also trauma. These cells are responsible for the creation of human beings from the time of conception to fully formed humans. They engineer the development of all of the organs and tissues in the human body and are responsible for replacing cells that are continually dying with new cells and repairing damage to cells or tissues damaged by disease or trauma. With the possible exception of gene therapy, none of the technologies I just listed can create or repair tissue as do stem cells. Instead of dealing with proteins involved in a disease state, these cells heal the tissue itself. This is a paradigm shift above  monoclonal antibodies, gene therapy and siRNA and antisense technologies. Scientists are now beginning to harness their biological power to create medically and commercially important drugs.

You can let your imagination soar with where this technology may ultimately lead. The more immediate applications are to repair damaged tissue. I am expecting an FDA approval for the treatment of graft versus host disease this year. Drugs for congestive heart failure, ARDS, ischemic stroke and lower back are in late stage randomized phase 3 trials with data readouts in 2020 and 2021. Other research efforts are underway to repair tissue damaged in spinal cord injury, kidney disease, Parkinson’s disease, genetic diseases, osteoporosis, traumatic brain injury, cerebral palsy, diabetes, blindness, liver failure, burns, cancer et al. Research is also underway to develop new organs such as a pancreas for type 1 diabetics or a new kidney or heart for transplant; to reverse paralysis; or even to regrow lost limbs. Over coming decades, stem cell products for all of these disease targets are very possible.

Research on stem cells has been going on for decades, but to date there is only one FDA approved stem cell treatment. This is stem cell transplant used to treat hematological cancers, a technology which was developed over 50 years ago. Despite the allure of stem cell therapy and many, many research attempts, there have been high hurdles that have been formidable to bring products to market. Stem cells are difficult to isolate, but more importantly trying to replicate how these cells function in the human body has been a road block. Scientists have been able to show some amazing results in laboratory experiments, but have not been able to replicate these results in human beings. As a result, there have been no new stem cell drugs in the last 50 years. This is changing.

Big pharma has been a follower of early entrepreneurial biotechnology companies in adopting recombinant DNA, monoclonal antibodies, RNA interference and gene therapy and it is no surprise that this is the case with stem cells. The leading companies in the space are small companies which few investors have ever heard of such as Mesoblast, Athersys and Pluristem. This development area is the Rodney Dangerfields of biopharma research despite its enormous potential. Stem cell therapy goes more to the direct treatment of disease than any of the current and developing technologies. Of nearly equal importance these products appear to be quite safe and initial products being developed by Mesoblast and Athersys are allogenic, off the shelf products.

After decades of frustration, commercialization appears imminent as both Mesoblast and Athersys have products in late stage development as shown below:


  • Ryoncil: A BLA is filed in steroid refractory, pediatric graft versus host disease with a PDUFA date of September 30. The FDA has designated this as a breakthrough therapy. If approved, marketing could begin in late 2020.
  • Revascor: Data from a randomized phase 3 trial in advanced heart failure is expected in 2Q or 3Q, 2020.
  • MPC-06-ID: Data readout from a randomized phase 3 in lower back pain is expected in 2Q or 3Q, 2020.
  • Ryoncil: A 300 patient, randomized phase 3 trial in ARDS associated with COVID-19 was just started. There should be a first interim look later this year.
  • Revascor: A phase 3 trial in ischemic stroke will soon be initiated.


  • The first disease target of its lead product MultiStem is ischemic stroke. A 300 patient randomized phase 3 trial is expected to have final data in mid to late 2021.
  • A 400 patient, randomized phase 3 trial in ARDS associated with COVID-19 was just started. There should be a first interim look later this year.

Both Mesoblast and Athersys have several products in earlier stage clinical trials as do several other companies. I don’t want to leave the impression that these are the only companies involved in stem cell research and development. It is just that I have done some preliminary work on them and they are certainly leaders in the field.

Introduction to the Stem Cell

The human body is an unimaginably complex machine whose basic production unit is the cell. Estimates of the number of cells in the body range from 10 to 100 trillion although no one knows for sure. There are more than 200 types of cells that form more than 80 organs which are self-contained groups of tissues that perform a specific function such as the heart, liver, stomach, etc.

It is estimated that 50 to 70 billion cells die each day in the average adult so the human body must have a biological mechanism to replace them. It also must have ways to repair and replace cells that have been damaged by disease or trauma, e.g. a heart attack or rheumatoid arthritis. To me the most amazing thing about the human machine is that all of these cells were created from just one zygote which is the cell created by the fusion of the nuclei of a male sperm and a female egg. The ancestry of every cell in the human body can be traced to the zygote.

The cells that we are most familiar with are those that comprise the organs and tissues. These cells replicate by dividing into two identical cells and are referred to as somatic cells. Stem cells are different. When they divide, they create one cell that is identical to the mother cell (an identical stem cell) and a daughter cell. The stem cell itself has no biological function other than undergoing this differentiation. The daughter cell however can go and differentiate that ultimately leads to the creation of one or several types of somatic cells and billions of individual cells. This is called the lineage of the stem cell. For example, the lineage of hematopoietic stem cell consists of all of the red and white cells found in the blood. The lineage of the epithelial stem cell on the other hand is just the epithelial skin cell.

Stem cells do not perform any direct biological function and there are relatively few stem cells in any human organ. They can remain dormant for long periods of times until signals from surrounding cells in response to a stimulus release proteins that cause them to divide. However, the lineage of the stem cell beginning with the first daughter cell can go on to create billions and billions of cells. In my research I came across one laboratory experiment that illustrates the power of this daughter cell to dramatically differentiate into a vast number of somatic cells. In a mouse model, the immune system of the mouse was ablated by chemotherapy and radiation. Then one single hematopoietic stem cell was implanted. This one cell divided into an identical stem cell and a daughter cell that amazingly went on to reconstitute the hematopoietic system by creating several billion red and white blood cells. It is understanding of the lineage of stem cells that offers the promise for commercial drug development.

Established Stem Cell Treatments

Research on stem cells dates back to the 1950s, but harnessing their theoretical medical potential has been frustrating. There have been, however, two important, widely used, life-saving treatments that are based on stem cell therapy. One is hematopoietic stem cell transplants. In this procedure, a patient’s cancerous bone marrow tissue is first ablated (destroyed) using chemotherapy and radiation. Then hemopoietic stem cells are transplanted. These can come from gathering stem cells from the patient themselves before the bone marrow is ablated, from a donor or from cord blood. They are infused into the blood and go on to repopulate the bone marrow and create a whole new hematopoietic system producing the many billions of red and white blood cells that make up blood. This is a widely used procedure for certain hematological tumors- lymphomas, leukemias and multiple myeloma- and is also used to treat certain immune diseases.

Hematopoietic stem cell transplantation using stem cells derived from bone marrow derived stem cells was pioneered by a team at the Fred Hutchinson Cancer Research Center from the 1950s through the 1970s. This effort was led by E. Donnall Thomas, for which he later received a Nobel Prize in Physiology or Medicine. It was first employed to treat hematological tumors. The first successful human bone marrow transplant on a disease other than cancer was in 1968.

Another great success has been in skin transplants for severely burned patients that has saved countless numbers of lives. In this procedure, skin is harvested from an unburned part of the body and transplanted over a burn area. In a large burn, the stem cells at the outer edges of the burn act to replace skin at the edge of the burn, but they cannot reach the interior. A big wound can take a very long time to heal and makes the patient very susceptible to infections. Seeding the interior of a wound with stem cells that speed up the regeneration of specialized skin cells can speed the healing.

There are Different Types of Stem Cells

To this point, I have just talked about stem cells without explaining that there are in actuality, many types of stem cells. Researchers broadly refer to stem cells as either embryonic or adult. The embryonic stem cells are created at conception and every cell in the body can trace its ancestry to them. All other stem cells are called adult and are found in the tissues to which their lineage gives rise in fully formed human beings. There are also stem cells that occur early in the life of the embryo and fetus that are similar to adult stem cells in fully formed humans that have the added function of aiding the development of the embryo and fetus. In this report, I will mainly refer to embryonic stem cells and adult stem cells that occur in fully formed humans.

Embryonic Stem Cells Occur in the Zygote and Blastocyst

The fusion of the nuclei of a male sperm and a female ovum creates a single cell called the zygote. All other human cells contain in their nucleus 46 chromosomes that house the DNA and genetic instructions for life, but the sperm and ovum each contain just 23. A newly formed zygote contains 46 chromosomes with 23 from the father and 23 from the mother.

The zygote then begins cell division that results in a fully formed human being. In the initial phase of life, the zygote divides into about 100 to 200 identical cells that are called the inner mass and which are enclosed in a hollow ball called the blastocyst. The cells in the blastocyst are embryonic stem cells that have the ability to divide and ultimately become any adult stem cell or somatic cell in the body. Every type of cell in the human body can trace its ancestry back to this little group of cells that are known as pluripotent, embryonic stem cells.

New Types of Stem Cells Evolve in the Embryo and Fetus

After about two weeks, the blastocyst migrates from the fallopian tubes to the uterine wall, implants itself and begins to receive nourishment from the mother's blood. The inter mass cells of the blastocyst have become the embryo and its outer shell has become the placenta and umbilical cord that nourish the embryo. During its very early development, the embryo does not yet possess specialized (somatic) cells and has no human features. Then new types of stem cells evolve and as they divide, they create one identical stem cell and one daughter cell that can differentiate and form lineages of somatic cells.

The stem cells at this point have become more specialized and initially create certain types of specialized cells in three distinct germ layers in the embryo. These are the:

  • endoderm which forms the stomach lining, gastrointestinal tract and lungs,
  • mesoderm that forms muscle, bone, blood, urogenital, and
  • ectoderm that gives rise to epidermal tissues and the nervous system.

These are the cells from which all tissues and organs develop. The stem cells in the germ layers are more specialized than embryonic stem cells and can only cause the development of certain cells, not every cell in the body. These are similar to adult stem cells found in fully developed humans, but have slightly different properties owing to their added role in guiding the rapid development of the embryo. One of the central dogmas of stem cell development is that as stem cells arise from the embryonic stem cells, they become able to produce more specialized cells that are committed to a specific function. Also, they can only progress toward ever more specialized stem cells, they can’t reverse toward embryonic stem cells.

After about seven or eight weeks the embryo develops recognizable human features and is referred to as a fetus. As the fetus continues to develop, individual cells continue to differentiate. The fetus grows rapidly and the baby's external features begin to form. The major body organs are present in the fetus but are not yet fully developed or in their correct anatomical location. Signals from surrounding cells called niche cells guide the particular actions of stem cells. While each cell in the body has the same DNA and genes, the signals from niche cells activate different genes that result in stem cells that have very different lineages.

Adult Stem Cells in Fully Formed Humans

For a stem cell to be called a stem cell, it must possess the two properties of self-renewal and potency. When the cells that comprise human organs and tissues divide, they create two identical cells; these are called somatic cells. When a stem cell divides, it creates one identical stem cell and one progenitor cell that gives rise to a lineage of cells that can further differentiate into several different types of somatic cells. Adult stem cells generally are found in the tissues formed by somatic cells that they give rise to. Specific types of adult stem cells and the lineage of specialized, somatic cells into which they develop are as follows:

  • Hematopoietic stem cells in bone marrow: create red blood cells, B lymphocytes, T lymphocytes, natural killer cells, neutrophils, basophils, eosinophils, monocytes, and macrophages.
  • Mesenchymal stem cells in bone marrow: bone cells (osteocytes), cartilage cells (chondrocytes), fat cells (adipocytes), and other kinds of connective tissue cells such as those in tendons.
  • Neural stem cells in the brain and spinal cord: neurons, astrocytes and oligodendrocytes.
  • Epithelial stem cells in the lining of the digestive tract: absorptive cells, goblet cells, paneth cells, and enteroendocrine cells.
  • Epidermal stem cells in the epidermis and at the base of hair follicles: keratinocytes, which migrate to the surface of the skin and form a protective layer, epidermis and hair follicles.

The body has control mechanisms that activate stem cells when they are needed and then shuts off their action so that they don’t go on dividing uncontrollably once they are activated. Cells adjacent to the stem cell that are called niche cells play an active role in stem cell regulation. There is a complex interplay with proteins from niche cells that lead to the activation of genes in the stem cell. Upon specific kinds of environmental stimulation, the stem cell is activated to divide producing an identical stem cell and a progenitor cell. Progenitor cells and their lineage travel through the body to the locations where they are needed. When people experience injuries, these cells can be triggered to start dividing and maturing to repair and replace damaged tissue.

Stem Cell Potency

Biologists often refer to stem cells based on the number of differentiated cell types that a stem cell can create as follows:

  • Totipotent: can differentiate into all cell types. In humans, only the cells in the zygote are totipotent. They can form the cells of the blastocyst and also the placenta and umbilical cord
  • Pluripotent: can differentiate into all cell types of the adult organism. The embryonic stem cells in the blastocyst can develop into all cells in the body other than the placenta and umbilical cord.
  • Multipotent: can differentiate into multiple different, but closely related somatic cell types. An example is the hematopoietic stem cell that can ultimately create all of the red and white blood cells.
  • Oligopotent: cells are more restricted than multipotent, but can still differentiate into a few closely related somatic cells
  • Unipotent: can differentiate into only one cell type. An example is the epidermal stem cell can only form epidermal skin cells.

Potential Role of Adult Stem Cells as Therapeutics

Adult stem cells are responsible for maintenance and repair of the human body. Research attempts to harness their power to restore damaged tissue that the body can no longer do on its own. Lineages of stem cells can potentially repair any damaged organ as shown in the hematopoietic system with bone marrow transplants and also for skin cell transplants. If we step back and let our imaginations soar, we can envision a mind boggling number of therapeutic applications. The cells in the linages of a stem cell can theoretically repair or replace damaged or diseased tissues in every tissue and organ in the body.

There Are Very Difficult Hurdles to Overcome

At first glance, stem cell therapy would appear to be straightforward. Laboratory experiments have shown that stem cells can be made to differentiate into numerous tissues. Why not just find the appropriate stem cell, deliver it to the area, say a neural stem cell to the brain or spinal cord, and let things happen? It is infinitely more complex than this. This is evidenced by the fact that the FDA has not approved a single stem cell treatment apart the hematopoietic stem cell treatment which was developed over 50 years ago. (Skin replacement is regulated somewhat differently as a living tissue.)

One vexing factor is that adult stem cells are really rare and hard to isolate. The hematopoietic stem cells are unique and an exception to this rule because they are found in a liquid and are single cells not attached to anything; they are relatively easy to identify and isolate. Stem cells in solid tissues are not so easy to identify, isolate and expand. Typically, there is a very small number of stem cells in each tissue, and once removed from the body, their capacity to divide is limited, making manufacturing of large quantities of stem cells difficult.

In stem cell therapies, the cells are grown in cultures and the living cells produced are the product. Tightly controlling the doublings and number of passages, without compromising cell integrity are key challenges. The growth, expansion and preservation of living cells produces major challenges to consistently reproduce cells without allowing them to change into an unwanted cell type. Cells are not like small molecule drugs or monoclonal antibodies which if manufactured in one factory will be pretty much the same as those manufactured in another. The media and growth factors and other environmental factors involved can cause huge differences in the kinds of cells that a manufacturing process gives rise to. Moreover, a cell taken from one donor and cultured in two different laboratories can produce products with radically different properties.

After 50 Years, Mesenchymal Stem Cells May Finally be the Next/ First Big Thing

Over the last decade there has been an encouraging advance that may lead to a series of approvals of products based on using cells produced from the lineage of mesenchymal stem cells. A small Australian company called Mesoblast has filed a BLA for its product Ryoncil for the treatment of pediatric graft versus host disease and it has several other related products in late stage development. The PDUFA date for Ryoncil is September 20, 2020 and if approved at that time, Mesoblast plans to introduce the product before year end. Ryoncil has been designated as a breakthrough product by  the FDA.

Embryonic Stem Cells Used as Therapeutics

Therapeutic stem cells must produce the correct lineage of cells. Otherwise, they will not repair the tissue of the damaged organ. But adult stem cells are very rare so the quest has been to find some kind of substitute for adult stem cells. One possibility is embryonic stem cells (ESCs) which offer the greatest differential potential. From them researchers can theoretically create any stem cell and somatic cell in the body. Differentiation is what defines a stem cell and given the right stimuli, it can differentiate into another type of cell that can be medically important. Embryonic stem cells can become virtually any type of cell but there are certain types of environmental factors that have to be present. However, great differentiation potential also means great risk. Improper differentiation can turn into cancer. There is much research going on to decipher the conditions that control the differentiation of an embryonic stem cell.

There are troublesome issues with embryonic stem cells. One is ethical in that they are harvested from human embryos. Researchers have to obtain and harvest human embryos to get these cells. Currently, scientists are not allowed to do much human embryo work to obtain human stem cells. If science can get past this hurdle, there the problem that these cells are non-autologous. They do not match the immune system of the donor and recipient and may be rejected.

Induced Pluripotent Stem Cells as Therapeutics

A recent exciting innovation has been induced pluripotent (IPS) stem cells, in which scientists convert somatic cells into stem cells by adding transcription factors. By introduction of a few specific genes into somatic cells like muscle cells, this can cause them to revert back into a pluripotent stem cell. Like embryonic stem cells, these induced pluripotent stem cells can go on to become any type of cell in the body. This is a huge discovery with a lot of medicinal implications

In the future IPS stem cells may be used to regrow or repair organs that have been damaged by disease. With IPS cells, each person can have their own pluripotent stem cell line that theoretically can repair any damaged tissue or organ with new ones made out of their own cells without immune system rejection issues.

Products Stemming from Mesenchymal Stem Cells

A misconception about stem cell therapy is that stem cells are isolated and then transplanted into tissue where they divide and become cells of the same kind of tissue. This would repair damage caused by disease or trauma. Remember that it is not the stem cell itself that repairs tissue. It actually has no biological function other than to reproduce and form an identical cell stem and a progenitor cell. Depending on the type of stem cell, the progenitor cell can undergo numerous differentiations resulting in many cells with distinct functions. This is how an hemopoietic stem cell can create all of the red and white blood cells. This is called the lineage of the hemopoietic stem cell.

In the case of Mesoblast and Athersys, they are using cells of  the lineage of mesenchymal stem cells. They respond to inflammatory signals by migrating to the site of inflammation where they employ a plethora of different molecular mechanisms including secretion of anti-inflammatory proteins and growth factors that promote healing. They reduce inflammation, protect damaged or injured tissue, and enhancing the formation of new blood vessels in regions of ischemic injury. The cells are subsequently cleared from the body over time, much like a traditional drug or biologic treatment.

These mesenchymal stem cell lineages are unlike other categories of stem cells and their cell lineages. They do not express specific cell surface co-stimulatory molecules that initiate an immune response when administered to unrelated patients. This means that they are allogeneic so that cells taken from a donor do not cause an immune response. Hence, cells from a single donor can enable the treatment of hundreds or even thousands of patients.

The Manufacturing Processes of Mesoblast and Athersys

Manufacturing is critical to stem cell therapy and is extremely challenging; the manufacturing process is the product. As the cells are expanded exponentially, cell integrity must be maintained. In the case of Mesoblast and Athersys, manufacturing starts with isolating mesenchymal stem cells from bone marrow although they could also be taken from fat tissue or peripheral blood. Typically, there is a very small number of stem cells in each tissue, and once removed from the body, their capacity to divide is limited, making generation of large quantities of stem cells difficult.

The stem cells are then expanded so that they are scalable for widespread use. In addition, unlike fetal or embryonic stem cells, which require the harvesting of fetal or embryonic tissue to obtain the cells, there are no ethical concerns. The cells are derived from the bone marrow of healthy, consenting adult volunteers. The growth, expansion and preservation of living cells produce major challenges. Mesoblast and Athersys developed scalable culture expansion that allow the production commercial quantities having batch to batch consistency and reproducibility.

After manufacturing, the cells are stored frozen in a vial until needed. The frozen suspension of cells is thawed when needed, the liquid cell suspension is removed from the vial using a sterile syringe and the cells are then added to an IV bag. The cells can be prepared for the patient in less than one hour and administered intravenously. Tissue matching is not required, nor are immune suppressive agents. These calls are typically administered through a simple intravenous infusion.

Brief Overview of Biological Effect of Products of Mesoblast

Mesoblast’s lead product in the US is Ryoncil (remestemcel-L). The first targeted indication in the US is in in steroid-refractory graft versus host disease. It has immunomodulatory properties to counteract the inflammatory processes by down-regulating the production of pro-inflammatory cytokines, increasing production of anti-inflammatory cytokines, and enabling recruitment of naturally occurring anti-inflammatory cells to involved tissues. A BLA has been submitted and the FDA has set a PDUFA date of September 30, 2020. If approved, it could be commercially available by the end of 2020 or early 2021.

Mesoblast is also developing Revascor that is designed for local delivery to damaged heart muscle. A similar mechanism of action to Ryoncil appears to grow new blood vessels in the heart, protect viable cells, create new cells so that there is a reduction of scarring. It is now in pivotal trials for the treatment of congestive heart failure. A third product is

MPC-06-ID is administered by local delivery to degenerating intervertebral discs to allow our MLCs to secrete biomolecules involved in enhanced migration and proliferation of intervertebral disc progenitor cells, and in enhanced proteoglycan and collagen synthesis in the disc nucleus and annulus. These biomolecules include Angiopoietin-1 and transforming growth factor beta.



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