FDA should freeze Duke EAP & probe $58 million Cryo-Cell deal linked to it

I recently found concerning SEC filings from the biotech Cryo-Cell about a deal it has with a Duke team for infusions of children with unproven umbilical cord cells. This turns out to be a $58 million deal. It relates in a major way to a Duke compassionate use or expanded access program (EAP) that already had raised red flags for me.

Now the new SEC records have greatly increased my concerns. I believe the FDA should freeze the program while it looks into this deal.

What’s in this article

Duke Cryo-Cell deal & the EAPWhat is an EAP?Why Duke’s EAP should be suspended | Potential RisksDuke Cryo-Cell $58 million deal depends on EAP?An expert take on the Duke EAP dealLooking ahead

For background, you might find my fact-check of stem cells for autism useful.

Duke Cryo-Cell Deal SEC filing
The Duke Cryo-Cell Deal is valued as a $58 million asset in the company’s recent SEC filing.  Screenshot of SEC filing.

Duke Cryo-Cell deal & the EAP

The FDA can approve requests for compassionate use of an unapproved drug via an EAP. However, there are rules for EAPs so they do not get misused for commercial gain at the expense of vulnerable patients.

Today’s post goes over why I believe the FDA should step in here.

The Duke team in question is a pediatric cord blood clinical research program run by Professor Joanne Kurtzberg.

Its EAP has evolved to become tightly related to its partnership with Cryo-Cell. Dr. Kurtzberg is also a leader at Cryo-Cell as its Medical Director.

This program infuses children with unproven cord blood products for autism, cerebral palsy (CP), and other neurological conditions. It has often charged large fees for access to the EAP (more details below) even as the team has also been doing clinical trials in parallel.

The team is largely supported by funding from a philanthropic organization called the Marcus Foundation. I don’t see current funding for Kurtzberg from NIH for the pediatric cord cell work. Without NIH funding is there less oversight here?

What is an EAP?

The point of an EAP program is to allow seriously ill people with few to no other options to have the chance to try something new, even if it is a long shot and not yet approved by the FDA. The spirit of allowing EAPs is definitely not for the sponsors to make big profits directly from it. While EAPs naturally can have commercial repercussions and could even help biotechs in the long run, that is not the main purpose. Or it shouldn’t be.

EAPs are often for people with fatal illnesses, but the FDA has authorized EAPs for non-fatal conditions too at times. For example, the agency approved the Duke EAP for infusion of children with autism, CP, or some other neurological conditions with cord blood material.

It’s not clear to me why this EAP was approved in the first place given the limited and generally discouraging clinical trial data from Duke. Related trial data from others has been discouraging too.

cryo cell infusion clinic marketing
Cryo-Cell infusion clinic marketing related to its deal with Duke that relies heavily on a compassionate use program. I believe the Duke-Cryo-Cell deal should be frozen by the FDA and the agency should look into the deal, including in particular the commercial and marketing aspects.

Why Duke’s EAP should be suspended

The big picture reason that I believe the agency should freeze this EAP is that it is not in the best interest of the children and their families. I believe that Duke and Cryo-Cell may be too focused on ultimately profiting off of the EAP in the long run rather than just helping children.

Also, keep in mind again that there is no good evidence that cord blood can help kids with autism or CP. EAPs of this kind are supposed to have at least some quality data that is encouraging. I don’t see such data in this case.

Furthermore,  Duke and Cryo-Cell are/will be charging for families to get their children injected. The cost is $15,000 per infusion. Up to 500 children may have been infused already by Duke with this unproven drug product, which is around $7.5 million in total. Does all of that just go to the basic costs of the infusions?

Cryo-Cell presentation
Cryo-Cell presentation. Screenshot. Keep in mind that an IND cleared by the FDA does not mean a drug is approved and does not OK commercial uses. The slide suggests a major commercial focus to me here.

Looking ahead, Cryo-Cell has also talked about opening at least one new stem cell infusion clinic for administration of Duke’s unproven cord blood product. The intent seems to be to make big money.

Some of the marketing language related to the idea of this new clinic gave me the impression that there may be ambitions to infuse thousands more children with this unproven product via the EAP. In addition, the marketing seems to me to risk giving families the wrong idea about how promising this is, which I see as a recipe for false hope.

David Portnoy, the CEO of Cryo-Cell, just gave an investor presentation yesterday (registration required) that fit with my impressions and reinforced my concerns. For instance, you can see a screenshot of one of his slides above that indicates that the deal with Duke and their EAP is intended to make the company large amounts of revenue. There also seems to be implication of infusions of thousands of children moving forward.

Strikingly, to me the talk had relatively little emphasis on actually helping children.

Potential risks

It’s not trivial for kids to get infused with cord blood and it could be especially traumatic for those with autism or CP, leading to setbacks. Some stem cell clinics sedate children who are getting unapproved cord blood infusions because the process is so hard for the kids. Duke also references sedation with versed in published papers, which likely increases risks.

Overall, going through the infusion protocol is hard on the kids. An interview with Kurtzberg mentioned common side effects:

Many parents reported mild and transient anxiety or other psychiatric symptoms in their children post infusion (27/61 placebo, 22/56 autologous, 30/63 allogeneic)

More broadly, while cord blood is generally seen as a safe product, infusing thousands of children with it could point to new potential side effects.

Duke Cryo-Cell $58 million deal depends on EAP?

Initially, I didn’t have much information about the specifics of the deal. However, as a publicly-traded company, Cryo-Cell has to do SEC filings. The most recent SEC filing has some surprising details.

Remarkably, at present the Duke cord blood deal appears to be by far the largest asset of Cryo-Cell at $58 million (see screenshot of SEC filing above). I don’t have a financial background so frankly I don’t understand all the aspects of this SEC filing and the Duke deal is also listed as a liability in some ways, but the numbers sure look huge to me.

I was particularly struck by this passage of the Cryo-Cell SEC filing (emphasis mine):
in the event that the FDA does not authorize an expanded use program for any LICENSED PRODUCT or LICENSED PROCESS or LICENSEE otherwise determines that commercialization of any LICENSED PRODUCT or LICENSED PROCESS is commercially impracticable (including due to a failure by DUKE to provide the RELEVANT DATA  as set forth in Paragraph 2.5, or to enter into the MANUFACTURING AND SUPPLY AGREEMENT), LICENSEE has the right to terminate this Agreement upon sixty (60) days’ written notice to DUKE with respect to such LICENSED PRODUCT(S) or LICENSED PROCESS(ES).

In plain English the passage seems to me to mean that Cryo-Cell can terminate the mega deal with Duke if the FDA does not OK an EAP for just about anything involved. In that way in a sense does the deal rely on injecting hundreds or thousands of vulnerable children with unproven cord cells? I’d say yes.

Then is it kosher for a mega financial deal to depend so strongly on an EAP and by extension a vulnerable pediatric population getting experimental infusions that require payments?

Where’s the line between these kids being compassionate use subjects and customers?

A Seeking Alpha article on the Duke/Cryo-Cell deal is very blunt about the financial implications. It also speculates about Cryo-Cell clinics infusing very large numbers of children in the near future and charging for it. This seems to me to generally fit with the numbers in the investor presentation by Portnoy yesterday.

A reminder again that the cord cell product in question here is an unapproved drug. It has no proven benefit and will have some risks.

An expert take on the Duke EAP deal

I asked FDA regs expert Associate Professor Patti Zettler for her take on this big EAP-related deal:

“Even if there are no technical violations of FDA requirements, the purpose of expanded access is to provide limited access to promising, but unproven, interventions to patients with no other options. It is not intended to be a vehicle for commercialization and profit. It is not intended as an end-run around FDA authorization, or a way to delay/drag-out clinical trials and never actually pursue authorization. That is, this strikes me as discordant with the purpose of expanded access, even if not technically violating FDA requirements.”

This raises the troubling possibility that for Duke and Cryo-Cell the way things are going they don’t need the Duke clinical trials to provide clear, encouraging data. Via the EAP they can work around the trial system and potentially still make tens of millions of dollars without getting an FDA drug approval for the cord cells. Still, this all depends on the FDA allowing the EAP to continue and grow.

Looking ahead

It’s not clear to me if this particular EAP in its current state is compliant with FDA regulations. I hope the agency will look into this. In the meantime, I call on the FDA to freeze this EAP until things are better clarified. No more children should be infused until that time.
Overall, the idea of hundreds or thousands of vulnerable kids being injected with an unapproved drug via an EAP potentially mainly for commercial reasons just doesn’t seem right to me.  How would that be so different than what all the unproven stem cell clinics out there are doing that the FDA has been so vocal about recently?

5 thoughts on “FDA should freeze Duke EAP & probe $58 million Cryo-Cell deal linked to it”

  1. As a father of 2 boys with ASD and who is considering this procedure, I really appreciate you taking the time to write this and explain everything from a factual standpoint. This has helped sway my decision to hold off on this for now until more actual evidence can be shown that it can help my sons. It’s very disturbing that there can be this much conflict of interest allowed in this process. Well intentioned people can quickly slide down that slippery slope with millions of dollars flying around. And unfortunately, families like us are seeking anything and everything that we can do to help our kids and it’s hard to filter through the noise of what’s factually and scientifically based, and what’s not. Again, thank you for your article.

    1. @ASD_Father,
      Thanks for the comment.

      I do think that there were some good intentions involved here and maybe still are, but I believe they’ve gone down the wrong path and just won’t change course so far. In fact, they seem to be pushing more aggressively. I’m not entirely sure why. The 10s of millions of dollars involved are likely part of it, which is really sad.

      I need to keep reminding folks who read this blog that real people are involved here including the kids and their families so your comment is especially appreciated. I’ve talked to so many parents over the years and I respect you all very much.

  2. Great post Paul. $15000 per infusion is highway robbery. These children would need multiple infusions. Ridiculously expensive treatment which has proven NOT to work, ironically by their own work.

  3. Paul- thanks for taking a stand about this possible misuse of the FDA’s expanded access program (EAP). What troubles me is the example it sets for legitimizing collecting money for stem cell treatments that are reasonably safe but have failed to show efficacy. To extend this a bit farther, what is to stop clinics from using this for marketing of cord blood for other diseases? I’m imagining a for-profit clinic offering cord blood for a multitude of other diseases…or even claiming that whatever they’re using is cord blood. This is a slippery slope, and I agree that the FDA needs to step in to make its intentions clear.

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