Regenerative medicine makes progress but still struggles to attract investors
Regenerative medicine is now Tim Bertram's work but in previous chapters of his career, he focused on drugs while working for large pharmaceutical companies such as Pfizer (NYSE:PFE), Smithkline Beecham Pharmaceuticals and Procter & Gamble (NYSE:PG).
Bertram left big pharma seven years ago to join Tengion (NASDAQ:TNGN), whose tissue regeneration technology was originally developed at Wake Forest University’s Institute for Regenerative Medicine. But before joining Tengion, his pharma colleagues gave him a warning: “This technology will not go anywhere for at least 25 years,” recalled Bertram, who is now Tengion’s chief scientific officer and interim CEO.
Regenerative medicine has come a long way. In 2005, most regenerative medicine research was done in academic institutions, Bertram said. Now there are companies such as Tengion. Applications for the kidney have been estimated to be a $32 billion opportunity. The eye represents a $40 billion annual market. As for East Norriton, Pennsylvania-based Tengion, the company’s technology has orphan drug designation from the U.S. Food and Drug Administration and is now being studied in clinical trials for use in patients with bladder cancer.
Bertram was the keynote speaker last week at the Regenerative Medicine Roundtable, a conference coordinated by Nagoya University. The university, located in central Japan, sponsors an annual roundtable in Research Triangle Park showcasing some of Nagoya’s research. Nagoya maintains a three-person technology transfer office near RTP with the goal of licensing the university’s intellectual property. Nagoya’s research includes work that could lead to treatments for neurogenic bladder and prostate cancer.
If the market opportunities are apparent, what are the barriers to the technology? Bertram said that many people think the biggest barrier is money. But that’s not necessarily the case. Bertram is a member of the Tissue Engineering International & Regenerative Medicine Society, or TERMIS. The group is scheduled to release results of a regenerative medicine survey at the TERMIS North America chapter meeting in December, but Bertram gave an early peek at some of the findings. Academics, companies and venture capitalists were queried about the barriers to commercializing regenerative medicine. Companies believe there’s a dearth of investment dollars. But venture capitalists did not rank the availability of money as a hurdle for regenerative medicine. VCs have money to invest but their concerns lie in translating this science into clinical applications.
Money is available, said Abner Mhashilkar, medical translational officer for the Wake Forest Institute for Regenerative Medicine. Before joining Wake Forest, Mhashilkar worked for venture capital firm Toucan Capital, which focuses on investments in stem cells and regenerative medicine. Mhashilkar said that from the venture capitalist’s standpoint, one of regenerative medicine’s investment hurdles is time. Venture capitalists would like to see a return three to five times their investment within five to six years. That’s a tough timeline for regenerative medicine to meet. But Mhashilkar said that the technology has progressed and investors are interested. They’re willing to invest now if they can find the right opportunity.
In order to find funding, companies need to go beyond discussing the science and emphasize the commercial applications, Bertram said. If the story of the technology is not simple and clear, the investment opportunity won’t be apparent.
It will be up to investors to decide whether regenerative medicine is a sound investment. The National Venture Capital Association recently released a report that said life sciences investments are shifting from the United States to Europe and Asia, a move driven by the uncertainty and length of the Food and Drug Administration’s approval process. The investment picture is cloudy but it’s clear that regenerative medicine technology was not 25 years away.
“It’s coming,” Bertram said. “It’s here. I don’t believe it’s going to be beyond my lifetime. At least I hope.”