Regenerative medicine company Regeneus' (ASX: RGS) will use Japan's new laws to fast-track the clinical trial and potential approval of its new human "off-the-shelf" CryoShot® cell therapy to treat osteoarthritis.
The Japanese parliament has passed new laws that provide a rapid approval process specifically designed for human stem cell therapies.
This provides a significant market opportunity for Regeneus to explore a new accelerated cell therapy approval process in Japan - with limited safety and efficacy data.
This will be achieved through a separate approval channel for regenerative medicine products that will allow the new cell therapy to be approved for commercial use once limited safety and efficacy data in humans has been demonstrated.
"Japan, the second largest healthcare market in the world, is setting itself up to be a world leader in regenerative medicine by providing a clear risk-adjusted regulatory framework for swift and safe translation of regenerative medicine research to early access to the latest cell therapies that can address a range of unmet medical needs," Regeneus executive chairman John Martin said.
"These new laws will help drive innovation in the regenerative medicine space and will attract the attention of other health regulators."
Chief executive officer Professor Graham Vesey added the Japanese law provided the company with a well-defined pathway to fast-track the clinical trial and potential approval of its new human off-the-shelf cell therapy to treat osteoarthritis and other inflammatory musculoskeletal conditions.
"CryoShot® is our off-the-shelf cell therapy platform and the canine and equine versions have been used to treat over 2000 dogs and horses with osteoarthritis in extensive field trials in Australia," he said.
"The results have been very encouraging and we anticipate the canine CryoShot product entering into an FDA approved trial for canine osteoarthritis in 2014."
Human CryoShot® uses donor adipose (fat) derived mesenchymal stem cells, which are manufactured in a proprietary method to optimise their potency and viability, to treat osteoarthritis and other musculoskeletal conditions
Experiments have demonstrated that more than 500,000 units of produce can be produced from just one donor using this method, which uses the same manufacturing specifications as the veterinary version.
Once injected into an arthritic joint, the stem cells used in CryoShot seek to embed at the site of inflammation and secrete a range of cytokines which encourage a reduction of inflammation and repair and regeneration of the damaged tissue.
The company has already secured ethics approval for a safety study in 2014.
Extensive clinical data has demonstrated significant reduction in pain and improvement in mobility within 10 days of treatment with no need for ongoing surgery or drug
Notably, this is a simple, low risk, same day procedure performed by licensed medical specialist.
The Japanese laws propose a five year licence with data reporting requirements and up to 70% reimbursement.
Stem cell therapy
Regeneus has already proven the efficacy of its stem cell knee osteoarthritis therapy with the patient specific HiQCell® product already being offered by specialists in New South Wales, Queensland and Victoria.
HiQCell® uses a patient's own stem cells from fat tissue to create the treatment and is considered a surgical procedure, resulting in lower regulatory requirements.
Since 2011, it has been used to treat more than 350 people and over 800 arthritic joints.
A recent clinical study has demonstrated its potential disease modifying effect by slowing cartilage degradation with magnetic resonance imaging (MRI) confirming that participants in the HiQCell® treatment group had slower than expected loss of cartilage at the 6 month post-treatment time point.
Osteoarthritis is the number one chronic disease in Australia, which currently affects 4 million people and is expected to affect 7 million by 2050.
Similar rates of the disease, which has no cure, are also seen in major western countries with ageing populations.
There is a treatment gap between pain medication and joint replacement procedures with cell therapy the only option to delay or overcome the shortcomings of invasive procedure.
Japan also offers a large potential market for CryoShot® with the official Japanese Government data noting in September 2013 that 31.86 million people, or 25% of the population, were over the age of 65.
Proactive Investors believes that the new Japanese laws will allow Regeneus to gain a foothold in the regenerative medicine and cell technology sector.
The new laws provide the company with a well-defined pathway to fast-track the clinical trial and potential approval of CryoShot®, which will be a true off-the-shelf product.
Japanese approval will also open up access to the osteoarthritis market there, which given the country's ageing population is likely to be a comparatively large one.
Osteoarthritis, which was incurable, usually resulted in the need for a hip replacement so there is a real treatment gap and need.
Regeneus is already earning revenues with fast growth potential. This demonstrates how Regeneus is different - very product-focused, developing products and servicing markets with a clear need that generates revenues now from stem cell-related technology products.
Regeneus is product driven first and foremost. It also sells two products, AdiCell and CryoShot, to treat similar musculoskeletal conditions.
While still small in comparison, Regeneus can look to, and beyond Mesoblast Ltd. (ASX:MSB; OTC:MBLTY), with its market capitalisation of $1.9 billion, as an example of where its regenerative medicine ambitions can take it. At $0.51 share price, Proactive Investors can see further growth in the short and medium terms in terms of valuation growth.
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