The prize for companies whose biotechnologies meet the need? Joseph Vacanti and Robert Langer, tissue-engineering pioneers at Harvard and MIT, respectively, put the potential market as high as $80 billion a year. But they say it may take as long as three decades to move from today, when the ability to perform transplants is limited by organ availability and tissue rejection, to a time when engineered tissue and organs are widely available and perhaps even grown from a person’s own cells. Executives are betting entire companies on which technologies will succeed first and biggest. Some hope for nearer-term success in engineering artificial skin and bone using live cells. Others are developing animal tissue for routine transplant to humans. The largest payoff may go to those who ultimately engineer human growth factors to repair or regenerate tissue in humans or in the lab for transplants.
Unlimited tissue repair and replacement organs? Not any time soon. So before you invest in Bio-utopia, you should look at what’s already here in the rapidly emerging field of biomaterials.
Artificial skin, bone and cartilage. Contrary to industry claims, the first biomaterials on the market are not living tissue but artificial products composed of some living cells. These include Organogenesis’s skin substitute called Apligraf (made from neonatal foreskin cells–ouch!) and two products from Advanced Tissue Sciences, Dermagraft (not yet approved in the United States, but sold abroad) and Trans-Cyte. Both are designed to heal chronic wounds like venous ulcers and diabetic foot ulcers that persist from other causes such as infection, inadequate blood circulation or malnutrition. Curis, meanwhile, is test- ing and seeking approval of two other biomaterials: OP-1, to mend nonhealing fractures and speed recovery from other bone injuries; and Chrondrogel, for cartilage repair.
Animal tissue. (Warning: this section is not recommended for fans of “Charlotte’s Web.”) To increase the replacement-tissue supply and reduce or eliminate host rejection, Alexion Pharmaceuticals and Geron Corp. have turned to genetically engineered pigs. These animals offer fast growth, large litters and organ size similar to humans’. Geron’s expertise comes from its 1999 purchase of Roslin Bio-Med, the Scottish company whose cloning techniques helped produce Dolly the sheep. Armed with that biotechnology, Geron is competing with Alexion to engineer pigs without the gene that causes human-host tissue rejection. The temporary goal: “bridge” transplants until human organs become available, especially for the 150,000 people hospitalized annually for liver disease. Also Organogenesis is lab-testing a system based on pig-liver cells that provides liver function until or instead of transplantation.
Stem cells and protein growth factors. Many companies believe that the key to restoring or regenerating tissue is to use the body’s natural functions. They are trying to re-create the conditions that support the growth of cells and tissue, and harness the body’s ability to repair damage caused by disease, trauma or age. To do this, they research and test stem cells and human protein growth factors.
Researchers have shown in the lab that stem cells from human embryos can differentiate into almost every kind of cell in the body, possibly enabling the generation of complete organs. The result could be relief from conditions as varied as Parkinson’s disease to spinal injury. That’s why the National Institutes of Health (NIH) last August announced federal funding for human embryonic stem-cell research. Because of Congress’s 1996 ban on such funding where human embryos are specifically destroyed, the NIH’s new guidelines require that grantees obtain specimens discarded from in vitro fertilization clinics or other private sources.
Despite continued grumbling from groups opposed to embryo research–the Bush administration is reviewing the guidelines–the NIH decision turned investors’ attention to companies such as Geron, which has worked for years to develop biotechnology to harvest human embryonic stem cells, grow them in sufficient quantities, urge their differentiation into particular cells from skin to heart to nerve, and make them work in the body. At the same time, Human Genome Sciences thinks it can advance stem cells’ promise by isolating the signaling protein that can cause them to differentiate into the desired tissue. Curis and others are working with adult stem cells, despite the prevailing view that they are not as powerful as those contained in embryos. But adult stem cells, found primarily in skin and bone marrow, offer two advantages: the supply is greater, and the research doesn’t invite political objections.
Therapeutic protein growth factors may offer another route to growing and repairing tissue throughout the body. Human Genome Sciences is moving to phase II trials of the protein repifermin, which has shown positive results in treating venous ulcers and is also being tested for mucosal tissue injuries common in chemotherapy. Joining Human Genome Sciences, companies such as biotechnology pioneer Genentech and privately held ZymoGenetics work hard to identify, test and patent therapeutic proteins that can repair or regenerate human tissue.
What’s an investor to do? Biomaterials is a complex industry, with potentially great rewards well into the future. But you need to have patience and look to the very long term. And the risks are considerable. This is not investing for the faint of heart.
Look for signposts–for example, whether sales of Organogenesis’s Apligraf will grow and make the company profitable. Or whether the Food and Drug Administration will approve Advanced Tissue Sciences’ Dermagraft for diabetic foot ulcers. Watch for data from Human Genome Sciences’ repifermin human trials.
Watch, too, for deals inside the in-dustry. Newer biotech companies need cash-rich partners to fund product development. For example, giant drugmaker Novartis markets Organogenesis’s Apligraf. Human Genome Sciences develops repifermin through an alliance with multinational drug power GlaxoSmithKline. Typically, the larger partner provides global sales and marketing muscle. Its investment also validates the younger company’s technology and shows confidence in management.
Displays of confidence are critical. Almost all biomaterials companies are still in early product development, regardless of how long they’ve been public. It’s far from clear which tissue-engineering approaches will work. Investors must therefore satisfy themselves that companies they’re interested in have enough cash on hand to have a good chance to survive until profitability. Alexion Pharmaceuticals, for example, had $375 million in hand as of the end of the third quarter of 2000, and was burning through its cash at the rate of $33 million a year, giving it a potential survival term of 11.2 years. Human Genome Sciences had $837 million and a burn rate of $119 million, producing a survival term of seven years. Organogenesis, with only $18 million on hand and a burn rate of $20 million, needs more money just to get through the year.
The biomaterials and tissue-engineering field is full of hype, says industry gadfly Martin Yarmush of Harvard. He assigns much of the blame to science magazines that print “very far-out” content that “can be characterized as pure fantasy, sounding more like science entertainment.” Instead of expecting “that any of these futuristic materials will be around to do that for us,” he recommends trips with the children to Disney World every six months to extend our lives.
While success with biomaterials can mean help for millions of people, remember Professors Vacanti and Langer’s estimates: expect a 30-year path to complete success. Interested investors should research carefully, know the substantial risks–and schedule that next trip to Disney World.
