November 25, 2020

The Niche

Knoepfler lab stem cell blog

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.

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