Will the Clinical Promise of Stem Cells be Wasted by Profit Over Science?

By Chris Centeno, MD /

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stem cell company investor concerns

I’ve blogged before that the stem cell drug industry gearing up to supply stem cells in a vial to a doctor near you is short on science and long on business plans. What do I mean? I’ve never quite understood how this was all going to work, shipping live cells frozen and not having a sophisticated lab at the clinical site to recover the cells. Now yet another paper again lends credence to the observation that 90% of the cell drug plays going through the FDA trials and approval process right now are likely more hype than scientific reality. Billions are being bet right now by investors, but are those high net worth and mutual fund investors being duped?

Stem cells are delicate things with great clinical promise. There’s been a bit of a Bonanza mentality in college campuses all over the U.S right now, with college professors in cell biology tripping over one another to file the latest patent. There’s even commentary and speculation on science blogs about whether the latest stem cell patent will hold up-either guaranteeing it’s college professor filer great riches for a valid patent or nothing if it fails to issue. So conflicts of interests abound in the brave new world of university based for profit science.

Now back to the delicate part. While some adult stem cell types are tougher than others, to avoid problems, there are two general rules that you need to follow in culturing cells to bigger numbers. First, you can’t grow the cells for too long, or they will lose potency. This creates a problem for cell based drug companies as there is a huge fixed cost for testing cells from a donor and growing them. This is a stark difference between cell drugs and chemical drugs, as the latter can be made for pennies a dose. So you can greatly reduce production costs by growing cells for a long time to produce more doses. However, doing so will likely render the cells relatively useless. You can hide this fact in a creatively spun assay to presumably show that the cells are fine, but at the end of the day there’s only so much lipstick you can apply to that pig-in the end the issues will show up in the clinic. I’ve already blogged on one big study that showed that just culturing cell a little longer made a profound difference in the clinic.

The second issue is that you can’t freeze these cells for shipping and then shock thaw them on the other end for clinical use. In fact, any cell biologist worth his salt knows that it can take days gently coaxing cells from a frozen state and getting them healthy again to be used clinically. This creates a problem for stem cell companies hoping to mass produce cells, as very few clinical treatment sites have the complex equipment and know how to properly recover cells. So many companies have no choice but to use a less than smart distribution method. Why not just develop these sites? Good question. I suspect that in the Bonanza mentality that is stem cells, the guys putting together the business plans and spreadsheets really don’t want to scare investors.

The new study is now one of many that has looked at whether freezing and shock thawing stem cells is a bad idea. However, when you look at what the authors did, they basically compared the use of stem cells fresh from the patient to the spreadsheet driven business plan put into place in almost every stem cell drug company now in clinical trials. Fresh cells that were cultured for short time periods (low passage) and then used showed much better lab tests of stem cell function. In addition, the freeze-thawed cells were more likely to be destroyed by the host’s immune system as foreign or activate this defense system. At the end of the day, the only test that really matters for any stem cells is their efficacy in the clinic. Patients treated with freshly harvested cells at low passage had a 100% response rate, twice the response rate of 50% in a similar group of patients treated with freeze-thawed cells that were grown for longer.

I’ve had people contact me with stem cell company investor concerns on this issue. They feel warm and fuzzy that their favorite company has solved this issue by showing that it’s lab assay says the cells look great even after growing and thawing the snot out of them. The companies can of course never produce results for the final assay and the only one that really matters-does this over grown cellular junk work in real patients?

The upshot? There are big problems brewing in stem cell drug companies right now and the smart university professors are wasting no time getting papers published to show these issues in the bright light of science. The less than smart university guys behind many new stem cell drug companies are letting the number crunchers mess up their stem cells. Who will win this battle between science and spreadsheets? Regrettably patients will likely be on the loosing end of this business calculus, as if these companies can’t pass clinical muster, their products won’t get approval. Even for the ones that get through the FDA gauntlet by hiring smart consultants to put statistical lipstick on the clinical trials data, getting insurance reimbursement when the clinical data isn’t great may be tough. If I were a stem cell company investor, I’d be concerned.

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Chris Centeno, MD

Regenexx Founder

Chris Centeno, MD is a specialist in regenerative medicine and the new field of Interventional Orthopedics. Centeno pioneered orthopedic stem cell procedures in 2005 and is responsible for a large amount of the published research on stem cell use for orthopedic applications.
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