Gregory A. BonfiglioProteus Venture PartnersSeptember 12, 2011
Stem Cells USA RM Congress:
Cord Blood Banking and Therapeutics
Boston, Massachusetts
CONFIDENTIAL 2
Proteus: An Investment and Advisory Firm Focused on Regenerative Medicine
Proteus, Inc.
Proteus Management, LLC
(Fund Management)
Proteus Insights, LLC
(Consulting Services)
Proteus Advisors, LLC
(Investment Banking Services)
Agenda
I. The Regenerative Medicine Market Key Market Metrics RM Therapeutic Applications
II. The Cord Blood Market Key Market Metrics Banking Other Tissues
III. Therapeutic Applications for Cord Blood Key Transplant Metrics Current Treatments Therapies in Clinical Development
CONFIDENTIAL 3
CONFIDENTIAL 4
Development of Regenerative Medicine
1968 – ALL patient irradiated, infused with identical twin BMT
1968 – ALL patient irradiated, infused with identical twin BMT
1973 – First unrelated bone marrow transplant
1973 – First unrelated bone marrow transplant
2001 – RhBMP-7 Approved
2001 – RhBMP-7 Approved
FDA Approves Dermagraft (2001)FDA Approves Dermagraft (2001)
1997 – Dolly the Sheep cloned; –FDA ApprovesCarticel (19997) & Apligraf (1999)
1997 – Dolly the Sheep cloned; –FDA ApprovesCarticel (19997) & Apligraf (1999)
1960s 1990s1970s 1980s 2000s
Source: Company websites, NIH, Pubmed
2005 Use of unrelated cord blood in BMT
2005 Use of unrelated cord blood in BMT
1963 – Mouse ASCs isolated1963 – Mouse ASCs isolated
1981 – Mouse ESCs Isolated1981 – Mouse ESCs Isolated
1998 – Human ESCs isolated
1998 – Human ESCs isolated
2007 – iPSCs from Humans
2007 – iPSCs from Humans
Current technologies build on 50 years of research
1993 – ViaCell Begins Banking Cord Blood
1993 – ViaCell Begins Banking Cord Blood
1989 – First Sibling Cord Blood Transplant (Gluckman)
1989 – First Sibling Cord Blood Transplant (Gluckman)
1986 – First Mouse Cloned1986 – First Mouse Cloned
RM Is Entering A New ERA
RM Market is Maturing: Key Metrics Rapidly Expanding Market:• $1.6B in 2010• $20.0B in 2025 • CAGR of 18.34%
Dramatic Revenue Growth• $130M in 2001• $1.6B+ in 2010
Worldwide funding for research Increasing• $2.5B Now• $14B in 10 Years
Clinical Programs • Over 3600 Clinical Trials• Over 400 ex-Oncology
Commercial Products • 400 on Market (Mostly Skin, Tools Media,
& Devices); – 900+ in Development
• 44 Cell Therapies on Market– $1B Revenues– 400 in Development– 28 in PIII/Pivotal Trials
1.2M+ Patients Treated with RM Products.
• 320K+ Cell Therapy Patients
RM Companies• 700+ Co’s involved in RM • 50+ Public Co’s;
– $8-$10B Total Market Cap • 250+ Private Co’s
CONFIDENTIAL 5
RM Market: Expanding Rapidly
CONFIDENTIAL 6
Cell Therapy Industry: Billion Dollar Global Business With Unlimited Potential; Regenerative Medicine; Chris Mason, David Brindley, Emily J Culme-Seymour & Natasha L Davie
Dramatic Cell Therapy Revenue Growth
CTI Revenues: $410M (2008) - $5.1B (2014)
RM Market: Global Company Distribution
5%
Asia32 firms
3%
Canada24 firms
56%
USA386 firms
14%
Europe (ex. UK)93 firms
UK133 firms
19%
2%
Middle East17 firms
700+ RM companies worldwide!
CONFIDENTIAL 7
Shire Acquires ABH for $750M
Big Pharma is Actively Engaged
GSK & HSCI: $25M Deal
Merck, Pfizer & Lily Launch Enlight BioScience
Pfizer RM Division: $111M Deal with Athersys (IBD); UCL (RPE); ViaCyte (Diabetes) GSK, AZN & Roche Help Launch Stem Cells
for Safer Medicine in UK
Johnson & Johnson Invests in Tengion & ViaCyte (NovoCell)
Genzyme & Osiris: $1.25B Deal
CONFIDENTIAL 8
GE & Cytori: StemSource
Cephalon & Mesoblast: $2B Deal
RM Business Models: Autologous v. Allogeneic
Autologous Model
Patients Own Cells/Tissue• Personalized Medicine
Advantages: • Easier Regulatory Path
(GTP)• No Immune Response
Challenges: • Difficult to Scale • High COGS
Allogeneic Model
Universal Cells in a Bottle• Big Pharma “Drug Model”
Advantages: • Scalable • Low COGS
Challenges: • More Difficult Regulatory
Path• Immune Response
CONFIDENTIAL 9
Service vs. Product
• Autologous Treatment for Prostate Cancer Using Dendritic Cells
-Centralized Processing • $93K per Treatment
-$1B+ Projected Revenues • $5.0B Market Cap (Until Aug 3, 2011)
Agenda
I. The Regenerative Medicine Market Broad RM Market: Key Metrics RM Therapeutic Applications
II. The Cord Blood Market Cord Blood Market: Key Metrics Banking Other Tissues
III. Therapeutic Applications for Cord Blood Key Transplant Metrics Current Treatments Therapies in Clinical Development
CONFIDENTIAL 10
Cord Blood Market: Key Metrics
Cord Blood Market Metrics
Market Size:• $3.4B (2010)• $14.9B (2015) • CAGR: 27.9%
Cord Blood Banks:• 150+ Private Banks• 44 Public Banks • 26 Countries
Total Cord Blood Units Stored• 500,000 Units in Public Banks • 1M+ Units in Private Banks
Market Penetration • 1-6% of All Births (varies by
country/region)
Average Fees: Private Banks • $1,750 Initial Collection & Storage
– Range: $890 - $2300• $125 Annual Fee
– Range: $85-$150
Average Fee: Public Banks• $35,000 per Unit (US/EU)
Public Bank Utilization Rate:• 1-3% of Units per year
CONFIDENTIAL 11
Cord Blood Market: Key Metrics
Cord Blood Market Metrics
Total Cord Blood Transplants: 25,000 in 43 Countries • 1,500 per year (2005)• 3,000 per year (2010) • 10,000 per year (2015)
50% of All Patients Seeking a BM/PBSC Transplant Cannot Find a Match
Fastest Growing Segment of Cell Transplant Market
• 22% of All Cell Transplants in 2010• 40% by 2015
Regulatory Framework• Regulated as a “Biologic” by FDA/EMA• By October 2011, All Cord Blood Banks
Must be Licensed (BLA)
Therapeutic Applications• 60+ in Clinical Practice• Leukemia; Lymphoma; Blood
Disorders; Hematopoietic Restoration
Clinical Trials • Over 600 FDA Clinical Trials
– 425+ New Therapies – 57 Pivotal/PIII Trials
CONFIDENTIAL 12
Cord Blood Therapies in Clinical Development: 600+ Ongoing FDA Trials
CONFIDENTIAL 13Source: ClinicalTrials.gov (www.clinicaltrials.gov)
Banking Other Tissues
• Wharton’s Jelly/Entire Cord • CHORI Technology (www.chori.org)
• Placental Tissue (MSCs) • Pluristem Therapeutics, Inc. (www.pluristem.com) ; LifebankUSA (
www.lifebankusa.com)
• Amniotic Fluid (MSCs & HSCs)
• Biocell Center (www.biocellcenter.com)
• Autologous Marrowized Bone• Arnie Caplan (Cell Bank Technologies)
• iPS Cell Lines• Shinya Yamanaka (Japan)/Janet Rossant (Toronto); iPerian (
www.ipierian.com)
CONFIDENTIAL 14
Banking Other Tissues
• Peripheral Blood/Bone Marrow• Stem Cell Assurance, Inc. (www.stemcellassurance.com)• StemCor - Marrow-Miner
• ALDH Cells (Hematopoietic Stem And Progenitor Cells)• Aldagen (www.aldagen.com)
• Adipose Derived Mesenchymal Cells (MSCs) • Cytori (www.cytori.com); GE Healthcare • Stem Cell Assurance, Inc. (www.stemcellassurance.com)
• Menstrual Blood • CryoCell (www.cryo-cell.com)
CONFIDENTIAL 15
Agenda
I. The Regenerative Medicine Market Key Market Metrics RM Therapeutic Applications
II. The Cord Blood Market Key Market Metrics Banking Other Tissues
III. Therapeutic Applications for Cord Blood Key Transplant Metrics Current Treatments Therapies in Clinical Development
CONFIDENTIAL 16
Current Therapeutic Applications for Cord Blood Market
• 25,000 + Cord Blood Transplant To Date
• 3000+ Transplants in 2010o 9% Increase over 2009o 100% Increase (2X) over 2005
• 10,000 Transplants per year projected by 2015o CAGR: 49.3%
• Multi-Cord Transplants Increased 25% in 2010
• 60+ Diseases Treated
CONFIDENTIAL 17
Key Metrics
Cord Blood Therapeutics: Comparison with Bone Marrow
Confidential 18
Cord Blood v. Bone Marrow
Donor Morbidity
HLA Match Required
Units Available
Search Time
2nd or Double Graft
Engraftment Time
GvHD Risk
Ethnic Match
Cord Blood
None 4/6550,000Units
1 Day Yes 26 Days Minimal Easier
Bone Marrow
50%8/810/10
14.6MDonors
3-4 Months
Possible if donor is available
18 Days 50% Difficult
Cord Blood Transplants Have Doubled In Last 5 Years (NMDP Data)
CONFIDENTIAL 19
Cord Blood Is the Preferred Cell Source for Pediatric Patients (NMDP Data)
CONFIDENTIAL 20
Adult Patients Are the Fastest Growing Population: 58% 0f 2010 Cord Transplants
CONFIDENTIAL 21
0
200
400
600
800
1,000
1,200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
0-17 18+
Cord Blood Transplants By Patient Age (NMDP Data)
Transplant Outcomes Have Improved Dramatically in Last 5 Years
CONFIDENTIAL 22
• Improved HLA Matching;
• Advances in Conditioning Regimes; KEY FACTORS
• Advances in Post-Transplant Supportive Care
Report Year Period One-Year Survival
2008 2002-2006 54.0%
2007 2001-2005 51.5%
2006 2000-2004 48.8%
2003 1996-2001 42.2%
Clinical Outcomes Related to Quality of Tissue & Match
Quality of Tissue• TNC Count (150+)• CD34+ Count • Size of Unit
Matching Criteria • HLA Match (4/6 Min)• Race & Ethnicity Match • Genetic Match (DNA tissue typing)
CONFIDENTIAL 23
Key Metrics
Cord Shipments By TNC Count for Adults
CONFIDENTIAL 24
0
200
400
600
800
1,000
1,200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
150+
125-149
90-124
<90
Most Units (77%) for Adults Had TNC >150 (NMDP Data)
82% of all 2010 shipments came from 31% of the available inventory. (NMDP Data)
Less than 12518%
Greater than or equal to
12582%
TNC of Shipments -CY 2010
Less than 12569%
Greater than or equal to
12531%
TNC of Inventory as of June 30, 2010
Public Bank Utilization Rates: 2010 Inventory and Shipments
CONFIDENTIAL 25
Current Therapeutic Applications for Cord Blood
60+ Diseases Treated• Leukemias And Lymphomas, Including:
– Acute Myelogenous Leukemia
– Acute Lymphoblastic Leukemia• Multiple Myeloma And Other Plasma Cell Disorders• Severe Aplastic Anemia And Other Marrow Failure States, Including:
– Severe Aplastic Anemia
– Fanconi Anemia • SCID And Other Inherited Immune System Disorders, Including:
– Severe Combined Immunodeficiency (SCID, All Sub-types)
– Wiskott-aldrich Syndrome • Hemoglobinopathies, Including:
– Beta Thalassemia Major
– Sickle Cell Disease
CONFIDENTIAL 26
Diseases Treated: Hematologic Malignancies (NMDP Data)
CONFIDENTIAL 27
Diseases Treated:Non-Malignant Disorders (NMDP Data)
CONFIDENTIAL 28
FDA Trials Involving Cord Blood Address Numerous Conditions & Diseases
Source: ClinicalTrials.gov (www.clinicaltrials.gov)
• Bacterial and Fungal Diseases• Behaviors and Mental Disorders• Blood and Lymph Conditions• Cancers and Other Neoplasms• Digestive System Diseases• Diseases and Abnormalities at or
before Birth• Ear, Nose, and Throat Diseases• Eye Diseases• Gland and Hormone Related
Diseases• Heart and Blood Diseases• Immune System Diseases• Wounds and Injuries
• Mouth and Tooth Diseases• Muscle, Bone, and Cartilage Diseases• Nervous System Diseases• Nutritional and Metabolic Diseases• Parasitic Diseases• Respiratory Tract (Lung and Bronchial)
Diseases• Skin and Connective Tissue Diseases• Substance Related Disorders• Symptoms and General Pathology• Urinary Tract, Sexual Organs, and
Pregnancy Conditions• Viral Diseases
CONFIDENTIAL 29
CONFIDENTIAL 30
APPENIDX
NMDP Data
CONFIDENTIAL 31
NMDP Data
CONFIDENTIAL 32
NMDP Data
CONFIDENTIAL 33
Adult Patients Are the Fastest Growing Population: 58% 0f 2010 Cord Transplants
CONFIDENTIAL 34
The Promise of Regenerative Medicine
To Regenerate Heart MuscleTo Replace Entire Organs
CONFIDENTIAL 35
Paralyzed Rat(double click to see video)
Paralyzed Rat Walks(double click to see video)
To Heal Acute Spinal Cord InjuryTo Cure Vision DisordersTo Cure Diabetes
Tools for Drug Discovery
Gartner’s Hype Cycle of Emerging Technologies
CONFIDENTIAL 36
Technology Trigger
Peak of Inflated Expectations
Trough of Disillusionment
Slope of Enlightment
Plateau of Productivity
Time
Visibility
RM Market: On 2nd Half of the Gartner Curve
Stage of Development
Visibility
Technology Trigger
Peak of Inflated Expectations
Trough of Disillusionment
Slope of Enlightment
Plateau of Productivity
1980 Early TE research (MIT)
1986 ATS and Organogenesis founded
1988 SyStemix founded
1992 Geron founded
1997 First FDA approved cell therapy (Carticel)
1997 Dolly the sheep
1998 Human ESCs first derived
1999 First FDA approved TE product (Apligraf)
1999 TE bladders in clinic
2000 Time Magazine:TE No. 1 job
2001 Bush “partial ban” on HESCs
2001 Dermagraft FDA approved
2001 Ortec FDA approved
2001: 3300 jobs, 73 firms, mkt cap > $2.5B
2002 ISSCR Founded
2002 ATS + Organogenesis file Chapter 11
Time
2009 Obama Ends Ban on hESCs
2007 iPS Technology Developed
2005 CIRM Founded
2003 UK Stem Cell Bank Formed
CONFIDENTIAL 37
2010 Dendreon’s Provenge Approved
2010 Cephalon & Mesoblast $2B Deal
Nov 2008 Genzyme-Osiris $1.25B Deal
2011 Shire Acquires ABH -$750M
2007 Apligraf - 200,000 Patients Treated2006 Carticel - 10,000 Patients Treated
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