The recipe for success for stem cell biotechs such as Geron, ACT, and ViaCyte: 3 key ingredients

What will we define as a success for any given stem cell biotech?

In academia, even if we do pre-clinical, translational kind of biomedical sciences, we still do not often think about what it takes to succeed in industry. Even if we very much want our research to make a difference for patients, do we understand what it takes to make that happen?

It’s a whole different kettle of fish.

Let’s fast forward five-to-seven years. Let’s say Geron’s spinal cord treatment is both effective and safe. I hope this future becomes reality, but we do not know for sure of course what will happen with the trials.

However, let’s assume GRNOPC1 is safe and effective.  That would be very exciting, but perhaps surprisingly to most people, that is not the entire set of ingredients for the recipe for success. Unfortunately there is also the issue of cost, which directly ties into the second issue of profit.

In order for GRNOPC1 or other therapies such as ACT’s to be successful, they have to in addition both (A) make money for those companies but at the same time (B) be affordable enough for patients and insurance companies to actually utilize them. Curing patients of spinal cord injury or blindness is priceless in my opinion, but if it costs $1 million to treat 1 patient is that going to be workable? I don’t think so.

I don’t say that lightly. If someone could 100% cure me of the prostate cancer I had (such that instead of being in remission I could know it would never come back), I would have spent years doing anything I could trying to get together $1 million to pay for it, but what if it took me 10 years to raise that much money through fundraising, etc. and no insurance company wanted to help? Would I be able to get the treatment?

I do not believe that ACT or Geron’s treatments will cost $1 million per patient, but they will be expensive. Even if it “only” costs $100,000 per patient for ACT’s or Geron’s stem cell drugs, is that workable? Will Medicare pay for it?

I think so. I think that would be doable.

Currently, the government will pay for Provenge, the advanced prostate cancer therapy made by Seattle biotech Dendreon, which costs about $100,000/patient and is of course not a cure. By comparison effective therapies at $100,000 a pop developed by ACT and Geron could in the long run not cost Medicare nearly that much because of the money it would save on long-term care for such patients.

However, if the cost per treatment were to go up near or beyond $200,000 per patient, I think there is a high risk that Medicare and insurance companies would not pay for it. It is crucial that stem cell treatments not become something only available to the rich.

I wonder how much do Geron and ACT think they are going to charge per treatment if their stem cell drugs clear all the clinical trials? How much profit would they make per treatment?

These money issues may seem crass when we are talking about facilitating someone standing up out of a wheelchair, maintaining or restoring their sight, or being cured of cancer, but issues related to money are crucial and cannot be ignored.

Companies such as ACT and Geron as well as others that may have stem cell-based drugs enter trials in the future such as ViaCyte, cannot give out their treatments for free or even at cost. They are in it to make a profit. They also have invested many millions of dollars, perhaps 10s or hundreds of millions, into the research that led to the treatments. That has to go into the cost too. Medicare only has a finite amount of total money to use to support medical care.

What this all means is that any given stem cell treatment must not only be safe and effective, but also cost-effective in order to be a true success.

5 thoughts on “The recipe for success for stem cell biotechs such as Geron, ACT, and ViaCyte: 3 key ingredients”

  1. I think more people will want to participate in these type of life changing trials contrary to what the bio-ethicist in the above cited article .

    The Right Decision

    July/.August 2011
    By T. J. Atchison and Tory Minus

    After discussing the pros and cons of the procedure with my mother and maternal grandfather, I realized that I had a great responsibility to fulfill. I’d be the one to help doctors and researchers learn how these cells actually work in humans. I’d be able to encourage continued research in this controversial field from the perspective of someone who had been through the type of injury the researchers hope to treat.

  2. Stem-Cell Gamble

    After years of controversy, a therapy based on human embryonic stem
    cells is finally being tested in humans. The treatment holds out hope
    to paralyzed people, but at how great a risk?

    Still, some patients are clamoring to join the Geron study, even though only people with extremely recent injuries—the kind that lab research suggests might be helped—are allowed to participate. A Dutch man offered Geron $1 million to treat his son, and ­Keirstead says he received an even bigger offer from a paralyzed Texas millionaire.

  3. @rich You are right. Our priorities are messed up.
    And that particular situation is a case of discrimination. What most people do not want to think about is how that airline passenger is not really any different than them. He’s a person who had an accident and the same kind of accident could befall any of us.

  4. As cost effective as this? Where do they find the $?…not pro or con argument but since this post is about money for cures to restore lives I found it ironic that this story popped up in regard to the costs in destroying lives.

    Death penalty costs California more than $300m per execution

    New study also shows that average time between conviction and execution is over 25 years – double the US national average

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