ACT: Accelerating Regenerative Medicine; An interview with Chairman and CEO Gary Rabin




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Video title: ACT: Accelerating Regenerative Medicine; An interview with Chairman and CEO Gary Rabin
Released on: April 28, 2011. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, Fintan Walton talks to Gary Rabin, Interim Chariman and CEO of Advanced Cell Technology
Clinical area of focus
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BIO-Europe in Milan, spring 2011. On this show I have Gary Rabin, who is Interim Chairman and CEO of Advanced Cell Technology otherwise known as ACT, welcome to the show.
Gary Rabin:
Good to see you Fintan, thanks.
Fintan Walton:
Advanced Cell Technology, tell us about that company what's your specific goal and business driver is?
Gary Rabin:
We use our embryonic stem cells as the progenitor cells to create therapy programs that can be used in the clinic and in fact we have been approved by the FDA to began two clinical trials focused on the subretinal space in the eye there are significant number of degenerative retinal disease and that's the main clinical area of focus for the company right now.
Fintan Walton:
Right, and when was the company actually founded?
Gary Rabin:
In 1998, but the company really began to focus on taking it from a research, pure research company into a more commercial company starting around 2005.
Fintan Walton:
Right, and of course there was always difficulties in the regulatory space in those early days?
Gary Rabin:
Oh indeed well even still, in fact the company has just developed a technology that we were just issued a patent upon that we think it's going to a massive differentiator for our company going forward, the traditional way in which embryonic stem cells are harvested is through the extraction of the inner cell mass of an embryo and that destroys the embryo that has been in particularly in the US but also even here in Italy a very controversial area because the destruction of a fetal embryo is you know a significant, political, legal, regulatory, moral, ethical conundrum for a lot of people. So we have developed this technology where we're taking much earlier stage embryo an eight cell embryo and we extract a single cell out of that embryo and use that as the progenitor cell for our cell therapies this is identical to a technology that has been used in vitro fertilization called preimplantation genetic diagnostics and it has been used for few years and thousand of babies are born every year where there has been this removable of the cell to test for severe genetic defects like Tay-Sachs and Huntington's and others. So and this is a big advance for us, so now we believe that we've solved this conundrum of destroying embryos in the name of science, we don't any longer destroy embryos in name of science.
Therapy areas
Fintan Walton:
And in terms of your clinical programs where they are focused, what specific therapy areas you are going for?
Gary Rabin:
So we have created using these embryonic stem cells we have turned those cells into retinal pigment epithelial cells those are the cells that sit at the back of the subretinal space in front of the bruch's membrane and photoreceptors and they feed tropic factors to the photoreceptors the rods and cones and keep them healthy, when the RPE cells die off as they do in dry age related macular degeneration which has a patient population of 10 to 15 million in the US and 10 to 15 million in Europe, when those RPE cells die off there is a corresponding failure of the photoreceptors and when the photoreceptors begin to die that's when your vision begins to deteriorate and go blind. So we've been cleared by the FDA to began trial for two therapies, the first is dry age-related macular degeneration and the other is stargardt's macular dystrophy which is a horrible juvenile form of macular dystrophy also impacting the subretinal space.
Business model
Fintan Walton:
Right, obviously this whole area is where groundbreaking that's gonna happen in the future, from a business perspective how what is the business model then for a company like ACT?
Gary Rabin:
Well right now we obviously are deficit funding ourselves through our own capital, ultimately we enforce plan to commercialize this product probably in partnership with a large pharma or a biotech that has penetration into the ophthalmology surgeon market and the therapy that we are doing is the subretinal injection 50 to 200,000 RPE cells suspended in ceiling 150 micrometer of ceiling, so this is a very easily scalable, transportable model that looks very much like a traditional pharma product or a biologic.
Fintan Walton:
Right, which is obviously a part of the procedure that has to be done by surgeons?
Gary Rabin:
Yes, not too dissimilar from Nucynta for example another subretinal injection that's of 3, $3.5 billion worldwide market.
Fintan Walton:
So the rest of the pharmaceutical industry will understand it as a particular business model to go forward with it now in terms of your own funding you are a publically quoted company?
Gary Rabin:
Yes, trigger Advance ACTC.
Fintan Walton:
Right and what is it like to try and raise money for the company like yours particularly in today's environment?
Gary Rabin:
Well I've only been the Chairman, CEO for about three months, but the company historically has had a hard time traditionally companies at our stage may be they are public now but we would have only been public recently you would have had a big slug of venture capital kind of carrying the company through these pure research and clinical development in years and so we had to raise money in the public capital markets, we had to do some very adverse death spiral convertible debentures and so forth to get us through this period, but happily the company is finally through that, we are basically debt free, we have $15 million in cash on the balance sheet and I can draw down another $21 million under our fully funded equity commitment whenever I want. So we are burning about $2.3 million a quarter, 15 in cash on the books so we're for the first time in the company's history in pretty good financial condition.
Phases of clinical trials
Fintan Walton:
And in terms of may be would looking at similarities to take a normal drug through clinical trials what are the hurdles are there, is that a shorter route to go with cell therapy?
Gary Rabin:
Well because we were using embryonic stem cells as our progenitor cells we had a big job to do at the FDA to convince them that we were going to be injecting anything at anyone's eye that wasn't a terminally differentiated RPE cells, right these cell start as embryonic stem cells which by definition can become any kind of cell in the body, so we our assay is extraordinarily exact and we will not be injecting any tissue, any cells into the eye that are not terminally differentiated RPE cells. So that was a major safety hurdle to us, after that to prove efficacy what we need to show is that these cells are some even very modest portion of these cells lay down at the back of the retina there and attached or in graft to the bruch's membrane layer which is this layer that sits the back in the retina space.
Fintan Walton:
And so you go through how many Phases of clinical trials for that cell therapy?
Gary Rabin:
So we've been approved for what's called Phase I/II in the US for both of these therapies. In Phase I for both of the two therapies stargardt's and dry-AMD will be enrolling 12 patients, we'll start patient enrollment very soon, we will be putting our first patients into the clinic sometime late in the first half of this year, each trial is set up as four patient, sorry four sets of three patients each the first patient would be injected with a relatively small dosage six weeks later we will inject patients two and three and then so forth as we escalate the dosage to alter of rotations.
Fintan Walton:
Okay, and then when do you think you would have a product on a market or ready for?
Gary Rabin:
Well hopefully we'll be able to be in Phase II by early 2012 and we believe because this subretinal there are lot of advantages to working on the eye, the two most distinct are that subretinal space of the eye is an immune privileged area so it doesn't interfere with the vascular system of the body very much so we are not anticipating any kind of immune rejection, that's a big advantage. The other really big advantage is that I can image the eye down to the cellular level so if you are my first patient I can take a cellular image of your retina of your photoreceptors rather than counts in RPE layer right down to the cellular level I know exactly what's happening, I am going to make my injection we are going to follow up with retinal scans every week and so by six weeks in I am going to know pretty well what's happened to those cells I injected, I will know how they've attached and I will be able to at that point even measure some function of performance of your photoreceptor layer.
Focus on opportunities in hemangioblasts and myopic macular dystrophy
Fintan Walton:
So when you get to with this particular first line therapy that you are developing what other therapies are you exploring out there?
Gary Rabin:
As a company?
Fintan Walton:
As a company.
Gary Rabin:
Well there are 200 retinal diseases that we believe we can treat, our next IND is going to be for myopic macular dystrophy which has a huge Asian population it is actually prevalent in the Asian population as it is in the US senior population. So we think this is a bigger-and-bigger opportunity for us, and then there are a whole bunch of other subretinal spaces. We also have a front of eye therapy that we are working on, we have developed corneal endothelial tissue and so we are developing a corneal program there 10 million Asia Americans that need corneal transplants or some kind of adjustment to the front of the eye we believe this is a big market for us beyond that though we are focused also on using our embryonic stem cells as the progenitor cells what are called hemangioblasts which is the second major area of clinical focus for us. Hemangioblasts are the stem cells that become all of the other cells in your circulatory and vascular system and so we have in the lab we have made universal donor or red blood cells and platelets out of these hemangioblasts obviously that could be a very attractive market, because the red blood cells and platelets market today are donor driven markets and so to have a pathogen free form of red blood cells and platelets obviously could be a very attractive market for us and then there are all kinds of other things that we can treat in vascular system, in the lab we have taken a mouse that had a left leg fully ischemic with no blood flow what's so ever the kind of cell you might see in an advanced diabetes patient and after injecting the hemangioblasts we see that leg return to normal blood flow within 30 days, so there are big opportunities for us in this area of blood flow circulatory system, diabetes so focusing on these hemangioblasts is going to be our next area of key clinical focus.
Regulatory environment
Fintan Walton:
And finally do you believe that the regulatory environment now is conducive to your company being successful? What remaining hurdles do you have?
Gary Rabin:
Well first of all right now our cell lines are not eligible for NIH funding, the definition of what would be an expectable cell line is still an open question in the US, and so obviously getting NIH funding would be helpful as we take the next set of therapies into the clinic, but we believe that the regulatory overhang of the embryonic stem cell companies has been eased a lot because of Geron success in getting their human trials to begin and ours to begin as well. It took Geron two-years to get through the agency to get approval to begin their human therapies, it took us one-year for our first but only 30 days for our second, so we think that the FDA is now coming to understand that if you have the proper assays, if you take the proper care that you are not going to inject undifferentiated embryonic stem cells or some short follower to that into a person's body we are focusing on developing therapies that can be used, that are safe from the perspective of teratomas and tumors and all those sorts of things that you might be worried about in undifferentiated cells, so we think the regulatory environment has got in a lot friendlier for us obviously the success of Geron safety trial and the success of our safety trial will raise the profile of this industry, it's an industry that for 10, 15-years there has been so much hope pinned on. In the United States there is this fellow Christopher Reeve who is superman and he had this spinal accident and ultimately died and it was around the time of his spinal accident that people became aware of the opportunities around stem cell science and now just this year 2011 we are actually going to see the reality of these things so it's very excited.
Fintan Walton:
Gary Rabin, thank you very much indeed for coming on the show.
Gary Rabin:
Indeed, thank you.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Gary Rabin
Chairman
Gary Rabin currently serves as Interim Chairman and CEO of Advanced Cell Technology. He has a 23-year career in finance and operations that primarily encompasses investing in, managing and capital-raising for small-cap and emerging growth companies. From 2007 to 2010, he was the Managing Partner of GR Advisors, LLC, investment manager for two long/short hedge funds focused on the media and communications industry. His previous positions include Portfolio Manager at MAC Investment Management, LLC ("MAC"), Managing Director and Portfolio Manager at Marketus Associates, a long/short hedge fund where he focused on communications, healthcare services, energy and special situations, Managing Director and Co-Head of the Media and Telecom Investment Banking Group at CIBC World Markets ("CIBC"),Chief Strategy Officer of CAIS Internet, Inc. ("CAIS"). Mr. Rabin earned an AB in Economics from the University of Michigan.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialisation.
Advanced Cell Technology
Advanced Cell Technology Inc. ("ACT" OTCBB: ACTC) is a biotechnology company that specializes in the development of cellular therapies for the treatment of rare and common diseases that impact millions of people worldwide. The company applies stem cell -based technologies (both adult and human embryonic) and other proprietary methods in the field of regenerative medicine to bring patient-specific therapies from the lab to the bedside. ACT has three cellular product platforms based on ground-breaking stem cell technology. The company is focused on commercializing its Retinal Pigment Epithelial (RPE) therapy for degenerative retinal disease, for which it has recently secured two FDA clearances for Phase I/II clinical trials, as well as other milestones. The company is also focused on its Phase II-approved Myoblast stem cell therapy for the treatment of chronic heart failure , advanced cardiac disease , myocardial infarction , and ischemia, and is also developing its Hemangioblast (HG)platform for the treatment of blood and cardiovascular diseases . ACT's principal laboratory and GMP facility is located in Marlborough, Massachusetts, and its corporate offices are located in Santa Monica, California. ACT is led by an experienced management team and a world-class scientific team helmed, respectively, by Interim Chairman and CEO Gary Rabin and Chief Scientific Officer Robert Lanza, M.D.