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European Biopharmaceutical Review

The Networking Game

One of the biggest obstacles that modern day society faces is the overwhelming cost of healthcare. Increasing changes are continuously being introduced, while simultaneously, resources are being diminished. The concepts of Regenerative Medicine offer cost-effective solutions

Besides the dwindling resources and socio-economic changes introduced by an ageing population, one of the major challenges in today’s industrialised world is the overburdening cost of healthcare (1). Regenerative Medicine (RegenMed) offers a solution to address this challenge. However, it can be a highly complex approach to treating patients because it potentially requires the integration of numerous scientific and clinical disciplines, as well as appropriate infrastructures (2,3). To bring new RegenMed technologies to patients effectively, and to further accelerate the developmental pace for RegenMed therapies, strong and open collaborative efforts are needed.

This article outlines how interregional and open collaboration is an optimal strategy to address the innate complexities of RegenMed. The health and financial opportunities that this cutting-edge approach to medicine represents makes it a natural candidate for driving economic growth (4). Therefore, it deserves to be addressed by increasing the capacity of European regions to invest in, and further develop their commitment to, research-driven translational clusters. Such action could contribute significantly, not only to an accelerated delivery of new regenerative therapies to patients, but also to stronger regional economic development in Europe.

In the future, regional investments will most likely continue to be matched by funding provided by the EU. The new framework programme for research, ‘Horizon 2020’ states that the EU will “provide seamless and coherent funding from idea to market… with a strong focus on creating business opportunities” for industries that develop products addressing the socioeconomic challenges in the area of health, demographics and well-being (5).

The Promises of RegenMed

RegenMed is the process of replacing or regenerating human cells, tissues or organs to restore or establish normal function (2). It refers to a group of biomedical and biomaterial approaches to clinical therapies that may involve the use of small molecule drugs, biologics, biomaterials, devices and cells (cellbased therapies and tissue engineering), either alone or in combination. Although it is not a specific technology, it is a novel approach that is potentially capable of delivering life-changing, or even curative solutions, to highly prevalent conditions, such as neurodegenerative conditions, bone or liver diseases, diabetes, heart or renal failure, which have traditionally been treated as chronic disorders. These novel disruptive solutions could have dramatic implications on the quality of life for the patient, their expected lifespan, her or his productivity, the cost of the treatment, and on the socioeconomic costs associated with such medical indications (3).

Both degenerative and chronic diseases, such as Parkinson’s disease (PD), are prime targets for RegenMed approaches. With increasing life expectancy and a larger proportion of elderly people in the population, degenerative diseases are becoming a growing socioeconomic challenge. We have therefore used PD as an example to illustrate the potential of RegenMed to alter the current treatment paradigm. Parkinson’s is the third most common neurodegenerative disorder after dementia and Alzheimer’s disease (6). The prevalence of PD is about 0.3 per cent of the whole population in industrialised countries, although it is more common in the elderly, with prevalence rising from one per cent in those over 60 years of age, to four per cent in the over 80s. The mean age of onset is around 60 years (6).

RegenMed in Parkinson’s Disease

In the UK in 2007, the average direct annual cost of healthcare for a PD patient was calculated to be £5,993, with indirect costs as high as £27,000 (8). At 38 per cent, the average National Health Service (NHS) costs represented the highest proportion of direct costs, followed by social services costs (35 per cent) and private expenditure (27 per cent) (8). The ratio between primary and secondary care and social and private cost is not static. The older the patient gets, the higher the proportion of social and private cost. Based on Findley’s data, we have estimated the average total costs of a PD patient over 10 years, from a theoretical initial diagnosis of the disease at the age of 60 still of working age for example, to a patient age of 70 years (8). Furthermore, we have assumed that the introduction of a new RegenMed therapy would increase the NHS costs by 100 per cent, but, will decrease the social and private costs and indirect costs by 70 per cent.This decrease in costs would be the consequence of PD patients maintaining an independent lifestyle. This scenario would result in net savings of more than £190,000 per patient over a period of 10 years when using the carer replacement model for indirect cost estimation (see Figure 1).

At present, we do not know how future RegenMed therapeutic products will compare to present PD therapy schemes, whether it will cost more or less, and what the life-changing treatment will look like. In addition, we do not know whether the expected gain in patient independence will lead to a 50, 70 or 100 per cent reduction of the social and private and indirect costs associated with PD. However, the estimations in our example clearly show that the potential savings in societal costs offered by a curative solution is extremely significant.

Besides the societal interest in allocating existing financial resources appropriately, the most important question for the individual patient is: ‘How does a new therapy affect my quality of life?’ In health economic studies, incremental health benefits are expressed in quality-adjusted life years (QALYs) (10). Life years are weighted by quality of life (QoL), where 1 signifies perfect health and 0 represents death. The total incremental QALY gain for a new therapeutic solution, in simplified form, is a function of improvement in QoL (ΔQoL) and the duration over which this improvement is sustained. The formula to calculate incremental QALYs (under the assumption that the therapy leads to QoL improvements only, and not to concurrent gains in life expectancy) is shown in Equation 1:

ΔQALY = (ΔQoL) x time (in years) (10)

Incremental QALYs can be converted into monetary terms to offset the financial costs of the treatment, to arrive at a net health benefit for each treatment (10). If the societal willingness to pay is assumed to be £30,000 per QALY (11), the ‘headroom’ – that is, the maximally acceptable additional cost of the new therapy – can be calculated as shown in Equation 2:

ΔCosts (headroom) =ΔQALY x £30,000 (10) The headroom definition can thus be used to quantify the gain in quality of life introduced by a new therapy in monetary terms. If we assume that a new RegenMed therapy would result in a 20 per cent improvement in quality of life (as determined by the ‘time trade-off method’) over a period of 10 years, this therapy would have an added value (headroom) to society of up to £60,000 for each individual PD patient.

Prerequisites needed to turn RegenMed concepts into successful products

So how do we turn these regenerative approaches into successful products? There are a number of challenges that will need to be addressed, as well as a number of stakeholders that may choose to partner with each other in order to drive the process of RegenMed development.

Clusters of Knowledge and Translation Centres
Efficient and cost-effective interdisciplinary work should be conducted in close physical proximity, ideally in one location. Therefore, in the past, numerous regional clusters and translation centres for regenerative medicine have been established (12). Below is a list of the bottlenecks that have started to be addressed by the various clusters and translation centres and have since turned from challenges and requirements into successful attributes:

● Close proximity to large clinics that provide access to patients, doctors and opinion leaders articulating the medical need, as well as access to clinical material
● Availability to form functional development teams comprised of doctors, scientists and engineers who collaborate in an integrated manner
● Ability to develop and cost-effectively produce medical-grade biomaterials and other materials
● Ability to ‘opportunity-check’ new therapeutic concepts (technical visibility, market analyses, intellectual property (IP) analyses, early dialog with potential commercialisation partners)
● Ability to develop Good Laboratory Practice and Good Manufacturing Practice (GMP), and produce potential new therapeutic solutions
● Availability of disease-relevant and therapeutic platform-relevant animal models
● Ability to finance and perform clinical studies, including the opportunity for integrated interaction with contract research organisations
● Ability to adopt new healthcare cost models and business models ●● Availability of an established regional entrepreneurial culture and network
● Availability of entrepreneurial education programmes and management capacities

Many of these essential characteristics are now being adopted in a number of translational centres and clusters for regenerative medicine that have been founded throughout Europe, North America and Asia over the last few years (13, 14). They present themselves as innovation and de-risking factories for new RegenMed solutions. Some of the necessary commercialisation partners for the later phases of clinical development and distribution are already appreciating the benefits from interacting with these translation centres and clusters.

Important manufacturing issues that are currently addressed by translational centres and RegenMed clusters are (15):

● Lack of standards for (cell-based) production and quality control (16)
● Scale-up issues in manufacturing
● Availability of medical-grade materials
● Sterilisation methods for biomaterials and combination materials
● Economisation of GMP-facility usage
● Regulatory hurdles and lack of harmonisation of regulatory requirements
● Opportunity for integrated interaction with contract manufacturing organisations

All of the above bottlenecks need to be successfully addressed in order to generate a convincing pipeline of RegenMed candidate products and to attract a sufficient amount of sustainable investment to drive the field towards achieving its goals. To further de-risk their projects and to accelerate the development process, leading translational centres have recently formed a consortium, the ‘Regenerative Medicine Coalition’ (17).

Spin-Off and Start-Up Companies
Important stakeholders that help drive the process of RegenMed development are spin-off companies. Small but experienced management teams that participate in the foundation of spinoff companies, and interact closely with translational centres and clusters, comprise another important component of a capital-efficient technology development model. By developing the business model and an appropriate intellectual property (IP) portfolio, and by raising the capital needed for generating comprehensive pre-clinical and clinical proof-of-concept data, these teams can further de-risk a RegenMed therapeutic solution up to the stage where it will be taken over by a strategic partner (large pharma, biotech or medical device companies) or attract substantial investment for final development (typically Phase 3 trials) and market introduction.

Small and Medium Enterprises (SMEs)
The process of product development can repeat itself many times, for example by adapting a new therapeutic solution to various indications. In addition, spin-off companies may have the potential to grow further and solidify their position by offering manufacturing contract services (such as cell production) to biopharma partners, thereby further leveraging their know-how advantage. As a result, small spin-off companies have the ability to develop into bigger operations (SMEs) employing significant workforces and outgrowing their roots in the capital-efficient translation centre model (18).

In RegenMed, there are autologous therapy options currently being developed that will require new business models, for example servicebased operations and point of care bioprocessing devices. These are personalised approaches to medicine that offer the option to distribute a new therapy through regional cell-production facilities and/or new specialised regional clinics. These business models do not necessarily need financial partners because they can be realised by an adequately financed SME alone. Such SMEs can generate significant new employment in their regions.

Larger Multinational Life Sciences Industry Companies
The role of the Big Pharma, biotech and medical device companies in translation centres is essentially as strategic partners for late clinical development, regulatory approval and distribution. They provide best practice experience to spin-offs and SMEs in collaborative projects.Often they employ a significant part of the region’s workforce and therefore it is important for the regions to maintain an environment that is driven by cuttingedge technology development.

Interregional Collaborations Accelerate Technology Development

Regional clusters have an advantage in that people with different experiences, skill sets and networks can work together in close proximity, communicate regularly and with ease, and most importantly, can develop trust in one another. Together, the members of such a cluster should ideally comprise a skill set portfolio that is highly comprehensive and complementary, serving as an integrated horizontal supply chain such as that seen in Silicon Valley for IT (19). The biotech cluster in the bay area of San Francisco, California, is one prominent example for such a successful industry cluster in the life sciences field. Members of regional clusters operate in the same cultural environment and time zone. Thus regional clusters enable incremental steps to be processed in an efficient integrated multidisciplinary manner in order to have a greater chance of effective innovation and the development of commercial products and services. Research-driven regional clusters typically comprise universities, both research and translational centres, enterprises and regional authorities. It should also be noted that translation centres comprise the extreme form of clusters, since many of the stakeholders essential for translation are located in one organisation.

Despite all the advantages of a regional ‘working network’, interregional collaborations between research-driven clusters provide additional aspects that can further increase the output efficiency of such networks and lead to greater acceleration of technology development.

Regular and structured communication between regional RegenMed clusters could lead to:

● Sharing of experience and accelerating learning curves
● Sharing of current interregional IP with a focus on developing further IP
● Joint definition of the global situation and shared visualisation of the future in order to better define the local ‘niche’ and thereby increase regional competitiveness
● Meaningful and coordinated regional specialisation focusing in the area of RegenMed
● Sharing of infrastructures (for example, expensive instrumentation and GMP production capacities)
● Ability to perform multicentre, largescale clinical verification studies

In essence, interregional collaboration can speed up technology development by broadening the common knowledge base for each region, freeing up resources to be allocated to developing new IP. In addition, developing a shared view on the future, and putting in place a joint strategy or action plan, will allow each regional working network to better prioritise its objectives.

The above aspects could potentially strengthen the research potential of European regions, boost economic development and accelerate the delivery of new RegenMed therapies to patients. The European Commission (EC) is making great efforts to support regional clusters and interregional collaborations – for example, with the initiation of the ‘Regions of Knowledge’ programme in 2007 with ‘the overarching objective to promote European competitiveness and regional development through smart specialisation of regions in a globalised world’ (20). One of the projects funded in the programme is Tissue Engineering and Regenerative Medicine (TERM). TERM links research organisations in the field of cell-based therapies through European cooperation between regional research clusters. The TERM project was commenced at the end of 2010 and will generate a joint action plan for 11 regional European RegenMed clusters (21).

Conclusion

We believe that interregional collaboration between clusters focused on RegenMed will lead to acceleration in the technology development and regional economic growth. In order for this to happen, EU member states and regional authorities need to take stock of the different areas where investment would overcome existing market failure. Solutions include communication platforms that foster interregional communication between stakeholders; exchange programmes for students, researchers, engineers, clinicians and technology transfer experts; regularly scheduled interregional conferences to promote collaboration; implementation and development of translation centres; and the implementation of infrastructure that supports spinoff companies and SMEs. If regional authorities invest in these areas now, such action will contribute significantly to the accelerated delivery of new RegenMed therapies to patients, as well as contributing to the regeneration and future growth of the European economy. So why wait?

References

1. Secretary General of the OECD, Health at a Glance: OECD Indicators, OECD Publishing, pp1-204, 2011

2. Mason C and Dunhill P, A brief description of regenerative medicine, Regen Med 3(1): pp1-5, 2008

3. Mason C and Dunhill P, The strong financial case for regenerative medicine and the regen industry, Regen Med 3(3): pp351-363, 2008

4. Mason C, Brindley DA, Culme-Seymour EJ and Davie NL, Cell therapy industry: billion dollar global business with unlimited potential, Regen Med 6(3): pp265-272, 2011

5. Horizon 2020, The Framework Programme for Research and Innovation, European Commission, 2011 Visit: http://ec.europa.eu/research/ horizon2020/index_en.cfm

6. DeLau LM and Brezeler MM, Epidemiology of Parkinson’s disease, Lancet Neurol 5(6): pp525-535, 2006

7. Huse DM, Schuman K, Orsini L, Castelli- Haley J, Kennedy S and Lenhard C, Burden of illness in Parkinson’s disease, Mov Disord 20, pp1,449-1,454, 2005

8. Findley LJ, The economic impact of Parkinson’s disease, Parkinsonism and Related Disorders 13: pp8-12, 2007

9. Brown G, The Bitter End, New Scientist 196: pp42-43, 2007

10. McAteer H, Cosh E, Freeman G, Pandit A, Wood P and Lilford R, Cost-effectiveness analysis at the development phase of a potential health technology, J Tissue Eng Regen Med 1: pp343-349, 2007

11. Devlin N and Parkin D, Does NICE have a cost-effectiveness threshold and what other factors infl uence its decisions? A binary choice analysis, Health Econ 13: pp437-452, 2004

12. World stem cell report, Regen Med 6(5) Suppl 2011

13. Lauter FR and Wirsching S, Global update Germany in ‘World Stem Cell report 2011’, Regen Med 6(5) Suppl 2011

14. Brindley DA, Reeve BC, Sahlman WA, Bonfi glio GA, Davie NL, Culme-Seymour EJ and Mason C, The impact of market volatility on the cell therapy industry, Cell Stem Cell 9: pp397-401, 2011

15. Davie NL, Brindley DA, Culme-Seymour EJ and Mason C, Streamlining cell therapy manufacture – from clinical to commercial scale, Bioprocess Intl 10(3) Supplement, 2012

16. PAS 84 Cell therapy and regenerative medicine glossary, Regen Med Supplement 2012

17. Visit : www.the-rmc.org

18. REMEDiE: Regenerative medicine in Europe, Emerging needs and challenges in a global context. Visit: www.york. ac.uk/satsu/remedie/

19. Saxenian A, Regional Advantage: Culture and Competition in Silicon Valley and Route 128, Harvard University Press, 1996

20. Website of European Commission programme ‘Regions of Knowledge’. Visit: http://ec.europa.eu/research/fp7/ index_en.cfm?pg=know

21. Visit: www.termproject.eu


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Frank-Roman Lauter serves as Secretary General of the Regenerative Medicine Coalition and Head of Business Development at the Berlin-Brandenburg Centre for Regenerative Therapies (RMC). He co-organises strategy development for regenerative medicine clusters from seven European countries, and has initiated a collaboration between the California Institute for RegenMed and the German Federal Ministry for Education and Research, resulting in a joint funding programme. His interest lies in the organisation of academic infrastructures to promote effi cient translation of research findings into new therapies. He is employed by the Center for Biomaterial Development Helmholtz Center Geesthacht, Germany.

Boo Edgar, Dr Med Sci(Clin Pharm) is the Associate Professor of Innovation and Entrepreneurship at the Institute of Medicine, University of Gothenburg and at Chalmers. Boo has a career in research and marketing within the pharmaceutical industry and is the CEO of a venture seed fund, as well as several entrepreneurial start-ups.

Sylvie Ponchaut is the Scientific Director of BioWin, the Health Competitiveness Cluster of Wallonia in Belgium. She has qualified as a Pharmacist and completed a doctoral thesis at the Christian de Duve Institute in Brussels. Sylvie is the founder and manager of IPinnova sprl.

Chris Mason is the Professor of Regenerative Medicine Bioprocessing at the Advanced Centre for Biochemical Engineering, University College, London. Chris is working on the translation and commercialisation of cell and gene therapies. His other roles include Senior Editor of Regenerative Medicine, Chair of BIA Cell Therapy Industry Group, Trustee of the UK Stem Cell Foundation and Director of the London Regenerative Medicine Network.

Greg Bonfiglio is the Founder and Managing Partner of Proteus LLC, an investment and advisory fi rm focused solely on regenerative medicine. He was an early investor in the fi eld and has been on the board of VistaGen Therapeutics, StemCyte Inc and California Stem Cells Inc. He is a member of the ISSCR and ISCT.
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Frank-Roman Lauter
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Boo Edgar
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Sylvie Ponchaut
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Chris Mason
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Chris Mason
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