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BUSINESS TRENDS

Japan hurries to regain lead in race for stem celltherapiesAustralian startup closer to commercializing iPS-based treatment

NORIYUKI TAKADA, Nikkei staff writerSeptember 25, 2018 03:57 JST

An iPS cell lab at Kyoto University. These type of stem cells can be generated from adult cells, which means they are notsubject to the same ethical dilemmas that come with embryonic cells. (Photo by Wataru Ito)

TOKYO -- Japan is scrambling to commercialize a treatment using inducedpluripotent stem cells, hoping to mount a comeback in a field it pioneered.

Australian startup Cynata Therapeutics took the world by storm last month byannouncing that it has successfully tested the safety and efficacy of a treatmentbased on induced pluripotent stem, or iPS, cells. This marked the first suchcompany-led clinical trials. Those "master" cells have the ability to become anyother cell type in the body.

Cynata completed the first phase of clinical trials for a stem cell therapy thatcombats negative reactions to bone marrow transplants. It plans to move on tothe second phase.

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The company is looking to develop so-called mesenchymal stem cells to treat thecondition, called acute graft-versus-host disease. Mesenchymal stem cells,derived from iPS cells, can generate skeletal tissues, fat and muscle.

The U.S. Food and Drug Administration granted the treatment orphan drugdesignation in March, making it eligible for key incentives like tax breaks, andthe company is expected to become the first to commercialize an iPS-basedtherapy.

Japan had led the world in the technology until a few years go, asits pioneer. Kyoto University Professor Shinya Yamanaka discovered iPS cells in2006, successfully generating them in mice. He won the 2012 Nobel Prize inphysiology or medicine for the discovery. Two years later, Japan's Riken -- agovernment-backed research organization -- transplanted an iPS-derived cellsheet into a human eye.

But Riken halted its research in 2015, in response to newly enacted legislationrequiring tougher safety screening for regenerative therapy. "This slammed thebrakes on iPS research in Japan, even while foreign companies moved swiftly,"said a scientist in the field.

Progress since then has been largely limited to basic research and clinical trialsled by doctors at teaching hospitals. Still, Cynata's announcement has energizedJapanese companies that have so far shied away from the area.

Healios could become the first company to test an iPS-based treatment inJapan, with plans to start a clinical trial to treat an eye condition called maculardegeneration as early as this fiscal year. The startup hopes to commercialize theproduct by fiscal 2022.

Kyoto University has already launched a clinical trial for Parkinson's, and willstart transplanting iPS cells into patients by March. It is expected to partner withSumitomo Dainippon Pharma on production and sales of the necessarycells, with the goal of commercializing the treatment by fiscal 2022.

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Heartseed, a startup that grew out of Keio University, plans trials for a stem celltherapy for heart disease as early as 2021. It has raised a total of 800 million yen($7.1 million) from Astellas Pharma and other investors, and will work withthem to mass-produce heart muscles out of iPS cells.

Fujifilm Holdings, which holds a stake in Cynata, will receive technicalassistance from the Australian company, and will start clinical trials and otherefforts in Japan toward treating complications from organ transplants. It is alsoworking with Takeda Pharmaceutical to develop a treatment for heartfailure.

Nonprofit research institutes and universities can conduct basic research, butthey do not have the resources to hold large-scale clinical trials or tomanufacture and sell drugs. Businesses are crucial to making the technologyavailable to the public.

But Japanese companies could get frozen out of the market if they do not get inthe game quickly enough. Many of them are already trailing American andEuropean rivals in biopharmaceuticals, which are commonly used to treat cancerand arthritis and have been among the top-selling drugs in the last decade.

Regenerative medicine, including treatments derived from iPS cells, will becomea more than $100 billion market by 2030, according to Tokyo-based researchand consulting company Seed Planning. Businesses across the world are hungryfor a piece of that pie.