Lazard 11/28 - last section
Wednesday, November 28, 2007
Lazard Capital Markets Presentation
wsw.com
DR. OKARMA: ... So now I want to turn to the embryonic stem cell platform, but before I speak about some of the programs, I wanted to make some pointed and important comments about last week's news in the field. So what – as you know, what was discovered last week is that one can genetically modify skin cells with a family of genes and turn those skin cells at low efficiency into cells that begin to resemble human pluripotent cells. So what does all that mean?
Well, the bottom line, the take home message is that discovery has absolutely no impact on the development of stem cell therapies generally, and certainly no impact on Geron specifically. And there are really three categories of reasons for that conclusion.
The first is that these are not embryonic stem cells. These so-called "induced pluripotent cells" are proxies for human embryonic stem cells. First of all they differ dramatically in their gene expression patterns. So in the Japanese group, they characterized them and showed that there were over a thousand genes that are differentially expressed between embryonic stem cells and the induced pluripotent cell – that's an enormous genetic difference, the significance of which is completely unknown. We don't know what those genes are and what their functions are that are up or down regulated in these new cells.
The second is, remember, in contrast to embryonic stem cells which are natural pluripotent cells, these are highly genetically modified. The Japanese group even had to transduce the receptor for the retrovirus in order to get the transduction efficiency high enough to transform the cells. These cells contain at least 30 random, permanent genetic inserts of the viral carriers to get those four genes in. This is a molecular time bomb – because the insertion is random, it breaks the coding sequence of normal genes which sets up for mutation. So it is almost a certainty that any differentiated cell made from these pluripotent cells will have a high likelihood of malignant transformation. And so, the cells are not well characterized. They grew for a few months at small quantities. The Japanese group even used one of our differentiation schemes to show that in vitro it made beating cells, but none of the differentiated cells have been characterized at all. And in the Wisconsin paper, not all of those induced lines even formed full teratomas. So the jury is really out on what these cells are and moreover if you take a step back, consider the regulatory hurdle of trying to scalably, quality control, and introduce into the clinic a cell that first starts from your skin with an aliquot of environmental damage and then has multiple, random, genetic inserts in it. It would be a regulatory nightmare.
The second bucket of reasons has to do with the oft-stated notion that we have to individualize stem cell therapies, we all need our own stem cell line, allegedly because we're going to reject these cells immunologically. I'm going to show you in a minute that that's not the case. So there is no biological justification for the notion of having to have your own line. Moreover, the technical difficulty of having everyone's been made their own line and then make the therapeutic cell from that line is astronomical and it is economically unfeasible. Bone marrow transplantation costs $100,000 today – this would cost $1 million. It's a non-starter.
And lastly, and importantly for your understanding of Geron's philosophy. Remember that we started this whole story. So at the very beginning we funded the labs that not only generate embryonic stem cells, but also embryonic germ, another human pluipotent cell, and we, our initial work was to distinguish which one of those was the best to work on. All of our patents that have issued, that are in prosecution, that cover differentiation, growth, feeder-free growth, the production of differentiated cells, even those that have issued in the US that cover composition of matter of differentiated cells made from embryonic stem cells – that entire patent estate reads on human pluripotent cells, not just embryonic stem cells because we knew 8 years ago that there were at least two and we anticipated that there would be more as time progressed. So regardless of the source of the human pluripotent cell, our entire patent estate - which is downstream from that invention - is sound and unaffected.
So, back to our technology. What we have in our hands today is a master cell bank of GMP produced starter cells, embryonic stem cells, that enable us to manufacture our cellular products commodities. We use our master cell bank and working cell banks just like monoclonal antibodies. We know how stable our lines are. They're GMP. We can actually service the entire spinal cord injury market for the next 22 years just with OPC1 cells we make from the first master cell bank. So our first product is the OPC1 cell for acute spinal cord injury. We finished all of the IND enabling studies. There are no show-stoppers. This is the cell, shown here, that transforms a paralyzed rat into a rat that walks almost normally. And I'm going to share with you now some data that actually comes from our IND. First, data that shows the robust durability of this effect. On the righthand side is a cross section of the animal's injured spinal cord nine months after the injury with no treatment or with a control. This is the entire top to bottom of the cord, shown left to right, and what you see is a gaping hole – there are no neurons, that's why the animals are permanently paralyzed. In contrast, on the left, nine months after a single injection of human OPC 1 cells that cavity is filled with rat axons, shown in brown, that are myelinated with human myelin, shown in blue. This effect is durable. You are looking at permanent regeneration of the spinal cord injury.
Here is the data to show that we don't need to worry about immune rejection. So if we take either undifferentiated embryonic stem cells or our OPC1 cells, at any effector to responder ratio there is no activation of human T cells, and we've done this across many, many donors. On the right panel the same data is shown against NK cells; there is no reactivity. We understand why and in the paper cited here, The Journal of Neurology, where this was first published, we actually have a few mechanisms that explain this effect, and we think this will be generalizable to all cells made from bonafide embryonic stem cells.
So we've written the protocol. The investigators are lined up. We know what we're going to do. We have developed the injection device that enables the surgeon to inject these cells. We are really ready to go post FDA approval.
Our second stem cell product will be cardiomyocytes. We published on this in the September issue of Nature Biotech. Same kind of rigorous proof of concept. These cells with a single injection survive in the infarct zone and their survival results in the prevention of the onset of heart failure. These animals have almost normal cardiac function after a single injection of human cells.
Earlier story for diabetes. We've learned how to make these cells. They make all of the islet hormones. They produce insulin in the animal model of diabetes. We've not yet normalized their blood glucose but that's the next milestone.
And I've spoken about how our IP emanates from the pioneering technology and goes all the way through, for a long time to come, covering all the product formulations that come from these two disruptive technologies.
So, looking forward, 2008 is going to be a very busy year for this company. So the first near term milestone on the first two 163L trials is to turn it into single agent Phase II dose. We've–and that then of course translates into a number of Phase II programs. We have initiated the non small cell lung combination; final data from that should occur in the middle of next year. There should now be a checkmark here. We've initiated our Phase I/II in multiple myeloma single agent study, and the important news there is that leads to the initiation this time next year of a potential pivotal for this drug in myeloma as a single agent, assuming the results of this trial are what we expect them to be. We've initiated the VAC1 trial as we mentioned. We expect Merck to file their IND soon. We'll have data on our study next year. We expect to initiate the spinal cord clinical trial by the second quarter of 2008, assuming FDA approval of the IND, and there will be interim data at the end of next year that we can report on. Our next milestone for cardiomyocytes is proof of concept in a large animal where we can rule out the formation of arrhythmogenic [] which we've not seen yet, but need a large animal to rule out. And lastly, next year we expect to have animal proof of concept in diabetes where we not only show human insulin in the bloodstream of the animal, but we stably and permanently correct hyperglycemia.
So this is the story in 2008 of Geron Corporation. Programs and products that are going to change medicine in oncology and chronic disease, all based from technologies we developed and that we own.
Thanks very much.
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