Rodman & Renshaw Global Investment Conference, September 10, 2012
Good afternoon, I'm Gary Rabin. I'm the Chairman and CEO of Advanced Cell Technology.
The company has a variety of platforms that we use. Our main platform that we use, the main progenitor cell that we use for creating our therapeutic lines, is an embryonic stem cell line. Now we create embryonic stem cells in a different way than are traditionally created. Normally when you hear about embryonic stem cell research, it involves the destruction of the embryo, and that is because the normal definition for creating embryonic stem cells is the removal of the inner cell mast of the embryo, and we don't do that. We take a much earlier stage embryo as our progenitor cell and we remove a single cell. We do a single cell biopsy on that embryo, which doesn't change the fate of or harm the embryo in any way. Thousands of babies are born every year using an identical technique to this, where in in vitro fertilization clinics, they are removing single cell to do a significant genetic testing operation called pre-implantation genetic diagnostics, so we have essentially cribbed to that technique and we remove a single cell not changing, fixate or harming the embryo. We have 12 embryonic stem cell lines that we use and in all cases except for one where the embryo was discarded, the embryos were frozen back down and they remained viable. So that is an important distinction in our science. There is a big misconception, especially in this political year, where people are talking about how they want to outlaw embryonic stem cell research because of the destruction of the embryos, and there are two major misconceptions that people rely on there. The first is that you have to destroy embryos to do embryonic stem cell research; and the second is that you have to repeatedly destroy embryonic stem cells. So while we have created these 12 embryonic stem cell lines, the last time we were actually in an in vitro fertilization clinic was back in 2005, and we don't ever plan to be there again. Embryonic stem cells replicate or propagate infinitely, so we have a master cell bank that we use, and we can make millions, billions, trillions of doses of whatever we want from that embryonic stem cell line. That is the critical differentiator between the use of embryonic stem cells and other kinds of stem cells, and adult stem cells for example. Now another big differentiator that we will talk about later, is the robustness, the factors that are expressed by these youthful embryonic stem cells. We are now working with mesenchymal stem cells which we create from our embryonic stem cell lines, and in that particular field, we found that the efficacy, the vibrancy, the factors it expressed, the potency of the mesenchymal stem cells that are created from embryonic stem cells are many times more powerful than those derived from adult stem cells. So we will talk about that a little bit more later.
Gary Rabin wisely repeated the fact that the stem cells used are from a bank of embryonic stem cells that replicate constantly, thus no need to destroy embryos. It's amazing how many people DON'T know that. So judging by the looks of the stock today, someone liked what they heard. We'll see where this goes, climb aboard the rocket.
Now our main therapeutic program involves the creation, or the derivation, of retinal pigment epithelium from these embryonic stem cell lines. We create a terminally differentiated cell called a retinal pigment epithelium. It rests at the base of the macula. In this diagram it is depicted in the white and it is a monolayer, or a single cell layer thickness of cells called retinal pigment epithelium. These RPE cells provide a whole variety of important functions to both the photoreceptors and the layer beneath it. To the photoreceptors, it provides the nutrients. It recycles Vitamin A. It detoxifies the photoreceptor layer through a process called phagocytosis which is waste removal. When that process stops, you get a build up of something called drusen, which kind of infects the back of the eye and exacerbates the problem. Now, when the RPE layer begins to go through a period of decline, there is a corresponding decline in the photoreceptor layer, so what patients begin to see is a fuzziness or a little bit of blindness in the central field of vision, which eventually over the period of the course of the development of the disease, which can be 10, 15, 20 years, turns into complete legal blindness. So these RPE cells play a very important role in the function of photoreceptors, but they also deploy another very important role, and that's that they provide a natural angiogenic barrier between that choroidal capillary structure, that you can see there at the bottom of that chart, and the front of the eye. When that Bruch's membrane layer that is secreted or laid down by the RPE cells, when that Bruch's membrane layer begins to break down, you get what's called choroidal neovascularization, or those choroidal cells begin to invade the back of the eye and you get something called wet AMD. Now I just came back from a conference in Europe called Euroretina, the largest retinal conference in the world. There were about 7000 people there, everyone from every hospital in the world that is a vitreoretinal specialist basically was there. It's an enormous conference, and so the focus of course is the retina. So there's lots of discussions about things like retinal tears and you know degenerative genetic retinal defects and things like that, but most of the conference by and large was about a disease called wet AMD. It's when the choroidal infrastructure in the back of the eye leaches to the front of the eye. Now, AMD itself, the age-related macular degeneration, has a patient population in the US of about 15 million people. About 10% of that patient population has wet AMD, which is this choroidal neovascularization. 85% of the patients, 85 to 90% of the patients, are dry AMD patients. There is no cure, no therapy of any kind. So a patient population of 12 to 15 million in the US, and a like number in Europe, and 10's or 100's of millions in the Indian subcontinent and China, South America, there is no cure, no therapy of any kind. And I just came back from the largest retinal conference in the world and it was as if the disease doesn't even exist. There was so little discussion about it, because there is a therapy for wet AMD. It's not a cure, but it dries out the back of the eye through an anti-angiogenic drug called Lucentis, and then there's another drug that has just come on the market as well. So there is lots of discussion about the 10 or 15% of the market opportunity, wet AMD, which has a 4 billion dollar drug in it already, but no discussion of a 40 billion dollar market opportunity called dry AMD because there is nothing that has been demonstrated to work until now.
So in our animal studies, in our preclinical studies, what we saw was when we injected human retinal pigment epithelium into the back of mice and rat eyes, we saw that the cells would migrate or biodistribute and find their natural home, laying down this monolayer on top of the Bruch's membrane in the mouse and rat eyes. In fact, at the top here, in the mouse model, you can see that the human cells are fluoresced, and they form a monolayer adjacent to existing mouse RPEs. So you've got human and mouse RPE adjacent to each other sitting on the Bruch's membrane. In the bottom there, there is an image here that you can see the photoreceptor layer and this is the left or control eye, and the right or treated eye of the same animal. In the control eye, this is in six months, the animal has a highly dissociated photoreceptor layer. In other words, it is only one or zero photoreceptors in thickness. That animal is basically completely blind. On the right, the treated animal's eye at six months, you've got a photoreceptor layer five to seven cells in depth, and that animal has 70 to 80% the visual acuity of a healthy field rat. So we saw in our animal studies remarkable results, results that hadn't been really replicated in the history of trying to treat AMD. So we have now decided that we can take this into humans and we started last year a couple of human trials and I will talk about those a little bit. But one of the knocks on cell therapy in general has been that you require massive amounts of cells, you require donor-specific matching. How are you going to scale this? Well we don't have to do that. We use an allogeneic source of cells. We have a single cell line that we created in a master cell bank for this product. And the amount of cells that get injected, 50,000 or 100,000, or 150,000 cells that we are injecting into the back of the human eye, that's about the head of a pin of number of cells, and because the eye is an immune-privileged area, which is to say that it's not part of the vascular and immune infrastructure of the body; you don't have the issues that you would have with immune cell rejection, that you would see if we were to try to create, for example, out of an allogeneic or generic source of cells, some kind of tissue for the body. So if I were to try to create liver tissue out of an allogeneic source of cells, your body almost certainly would reject the tissue through immune cell rejection. You don't have that issue in the eye; one of the key reasons why the company chose to focus on the eye. Other reasons of course we chose to focus on the eye, are that the eye has these massive unmet medical needs, including AMD. And then of course in the back of the eye, through the kind of photography and OCT scanning that we have, you can see what is actually going on in the eye down to the cellular level. So this is a very different kind of pursuit. This is a different kind of treatment than other cell therapy. Geron had an embryonic stem cell-derived technique that they had to inject 100's of millions of cells into the body using a highly designed and tailored injection method. They actually had to design something that would float along the vertebra. We use a standard off-the-shelf cannula, a standard injector. The procedure is a two-minute procedure. I'm actually going to show you the video in a couple of minutes. We ship this from our 1100 sq. foot manufacturing facility in Marlboro, Massachusetts. In that facility, we can make 3/4 of a million to a million doses of these cells on an annual basis. So to scale up for worldwide production, you wouldn't need an enormous facility. That makes this very different than other cell-based therapies. Small doses, easily shipped in the Cold Chains. Today when we ship to our various centers, we have five centers where we are treating patients around the world, we ship them on dry ice in the Cold Chain. On the other end, they're thawed, agitated and put into the injector mechanism. We're actually now working on a way to take that shell prep out of the hands of the local centers and looking at ways that we can ship maybe even in syringes. So, turning this into a scalable product that looks like a big pharmaceutical product like a monoclonal antibody or something like that is completely within our hands.