Good morning, thank you all for being brave enough energetic enough to join us bright and early on a Saturday morning early it's not as I could not exactly the type of this session is called selling stem cells and we've taken a little bit of liberty with that title and what we really want to talk about is the broad market for themselves and in stem cell research products therapy is broadly I'm gonna have my panelists introduced themselves in a minute let me begin by introducing myself on Bobby Hutches.
I'm the president and CEO of stem dialysis we have I would call it a one and a half products right now our first product in the market and its action available now is an extra cellular matrix used for the expansion of cells most of that work to be done today to spend an area of mesenchymal stem cells Wednesday of this week we announced a collaboration with bio Bridge global we will be entering be themselves supply market in the middle of next year when we work together with bio Bridge and will be selling cord blood cell doesn't come on stem cells isolated from cord blood.
We're looking forward to launching a product in June so we are relatively new to the stem cells supply market but it will talk about in a minute there's a lot of pieces to that market then we've been around them that space for about a year now so let me ask my panelists to briefly introduce themselves and then I'll make some introductory comments and then what would you do just ask my name is headquartered it's not surprising time and given the bio tech industries were a lot of them are the companies were based on this lot of good stuff happening out there I'm based out of London and my background in academia and farmer research Ramp;D went into consulting been doing consulting an independent leadership development for some time Ora Capital Partners focuses its own independent privately-owned management company we actually help senior manager's leadership teams in the company's focusing mainly on the bio technology and knowledge led industries and we help organizations really with strategic consulting and hands-on operational management looking.
How we can help them change and transform their businesses focus on future we have four basic areas that's capital sourcing strategic consulting global communications and transformation great we're gonna do a couple of things to begin to set the stage this morning I'm gonna walk real quickly through some numbers and then my colleague your causes gonna walk us through a little bit about the cellular dynamics story and I think answer the really interesting question I know when we met for the very first time yesterday to prepare for this panel very first question I asked him is so what attracted Fuji film 22 this market space in closets and going interesting slides.
He'll walk us through in just aminute that but I did want to share with the group some data I did some digging this morning in preparation for this and we looked at a study that bio informatics did last year with the stem cell research products the study was published in June 2014 and just data I think is really interesting to ground ourselves in this they define the stem cell research excludes antibodies theyell research product market globally in this excludes antibodies they went through a set S exercise of estimating that market in 2013 the estimated that mark the to be about 1.75 billion dollars globally that's be a big market and interestingly enough when they did some projections in terms of where the market's going they estimated.
It in just over two and a half billion dollars in 2008 teens you've got about a 40 percent growth rate occurring in a relatively short five your time frames again lots and lots of growth here interestingly to when you look at the players in the market at the time of this study but the ducks and Dickinson sigma-aldrich in thermal Fisher had eighty percent of that market and then the tail 20% was really a lot of little companies that very specialized offerings companies like ours and cellular dynamics were included in that jail at the time the other thing that strikes you got a big market that's growing the other thing that struck me as I was looking at it is lots and lots of collaborations that occurring even a big company like thermal system there were seven collaborations at the time that they had with academic institutions and other companies to prosecute various opportunities so even a company seemingly with relatively unlimited resources by the measure of many of us still need to collaborate because the knowledge of this field is news allover the place and no one organization this is the market cornered on that other interesting data.
I looked at this about half the market split pretty evenly to $25 quarter the market is these and it may actually went and looked at publication to see what was the research that was being published in this was in 2012another quarter was HSC applications and that about 40% look pretty evenly embryonic cells' cancer cells neural cells iPS cells and cord I suspect that if we were looking at that data in 2015 we would see a different mix but that's what it looked like in two thousand well and then in terms of why people buy and what people by the kind of interesting the primary reasons for purchase when cell differentiation and cell culture in terms of the kinds of products people who buy probably no surprise there and then the final thought just in terms of numbers again.
I thought these were kind of interesting they went out and looked at the number of stem cell clinical trials and I'm sure there's been date around this all week but getting to give your contacts in 2009 they identified about 2,300 themselves trials going on a run the world in 2013 that number was up to 4,200 what was really surprising to meas an american 2400 of those trials electric here in the USA by I would not have guessed that hearing that number the more than half of them were here in the USA and then one final statistic to think about in terms of publications in stem cell related field they identified about 8,300publications in 2004 and that number grew nearly threefold to 23,000 or so by2013 so lots and lots of growth and eighty think about this in the context of our discussion.
Today has been who's been a lot of growth today and certainly as we look forward to doing that with that I'm gonna turn out of the cars who's gonna walk us through a few slides to number one just tell us a little bit about cellular dynamics but peace I know when I looked at these this morning the piece it was really interesting to me is why did this field what did they see and what was so attractive about it so as you know about any got into problems in the future and we now have a disproportionate to markets prosperous life science research market and the other is serious about it as you know kind of these IDs try to be used as well and then we think ABC's myriad ounce of the market place and its terrorist in a few parties in the sea breezes.
I don't know I am getting but I guess but he's not really started putting the go test and then we are also trying to get into that market this well this is a brief actually the Polo Grounds around the 10 iPS cell products struggle cardiomyocytes outside the New Orleans then here made a small but this is actually we actually are trying I saw for the research product quality control and hear people screaming and Jimmy facility project we have not yet actually the buyout sales we are now proud was recently disclosed then we had a lot of actually quite delicious and Gordon stated in this industry we need a portable issues because we have a barrage to produce a good sale but in order to use their renewed I say all other actually technologies to be given to the customer's usage.
So then I wrote about the collaboration was down for their past and then many papers now actually maybe two remarkable things is the first ones if approved cGMP babies testing of which are in the taxi so there if the actual Cooper standard of that took so that is a ghost and that will be used to the ideas and then the other one is a fear is about eating ice which is actually a reason here this season now and the world but probably end of 2016 2017 ICSE we tried the guideline for this test to the case I P S will be used regularly so those two I think she meant so and then this is actually just simply does situations ha ha luxury we qualitatively or any quality cells so starting from the actually dude sample and establishing the iPS cell then making the present itself and those processes are totally controlled and then production scale operations has been building up that is reasons.
Why so a billion themselves has already produced company and also variety of has been developed and they know that to sell the cell refocusing on several things possible is how to make great as busy as can make people do new things in the past they cannot do but IB cell based assays we can do so it's kind of new market has been created and then we have a three actually different of course approach in the induced and the engineers and those sweet we already established internally horse races first example diabetes associated cardiovascular disease based on the SP and there he goes and we actually picked up samples and create my site and then these actually functionality has been said and then this is actually pretty much to be protecting the business background in sales so then based on this by the way this is actually goes to initiate related to use.
This based on this one we actually tried to screen what compounds can be effective for those kinds of disease so then this is actually frustrating actually process 1340 seven hits and then lastly absolutely 18 he has been denied based on businesses so this is just examples because I P S so we can actually get different background with disease gene samples very easily and in that can be attributed news basement elections the disease requires this kind of penalty kick type of screen can be very much imposed this is another example this is actually based on the used to induce actually know they're using actually interested in receiving you see the CDCDNAP actually gave it can be clearly indicated grass and then also you seethe score is a very good to be used this one and this one is actually engineering examples we actually use this one is it depicts the PC then he's also graphs shows this the cell can actually represent the disease best of naturally gene modify he 924 airports has been created so then that is very clearly actually back to that and then we have those hostages like they're so.
We think actually this can be used for the drug discovery right now so this is a tourist area which we did so and then now widely believed to be changing because as you know that there are many idea's cell banks is now available in the world so that is we think very great chance to make new world of the drug discovery and screening and then that will be present for the pharmaceutical companies we got this is the reason that each that means that many disease more than the gym between different both this sale can beta use that is actually going through the screening that means drug actual assessment can be done it's not before using people so that means a more efficient actually.
I'll be down to that's the concept of NBC's I just examples how many IPS bank is now emerging road then we several and may be france granted asylum so they actually do battle ground to establish at the end of story sounds into doing those different disease ABC's GCB for NBC's Annabel absolutely protected you have different needs these backgrounds and they recreate those actually gossips cell and that this is available for everybody in the world so that we can actually make a jump start to help states new drug discovery another case this is actually any yet we aren't we got and they will actually produce 200iPS cell so he's actually cardiovascular disease actually gotten more than what I want to say is currently these different iPS cell is apparently the market so that means many drug companies pharmaceutical companies would like house those kinda sales for their screen that can change the world in the near future that's we are now feel been noted to do that most important technology is how to make purity Hibernian time so this is actually we think very competitive edge of our company.
We have those kinds of bridges no house and then this is the examples for their case and defender us and you see the purity of this is always 95% so this kind of technology is very important we leave because their work properly and then people can access part this is current actually our active pipeline still IPS set up the case has not get into the clinical stage mostly first-run these Euro you should see the people this is we are expecting the 2017 I P maybe first day of this session doctor Kaphil explain the state as a bad we are heavily involved with that shit this is actually the project which I said now have to the big study has been more is finalized.
I was CBI actually wrote it is established those protocols of cGMP facilities that means based on these protocols this can be reduced and the decision people seriously where you see that those kinds of protocols and at the end very glad case he has produced this is actually very high purity this is good news for us to actually establish sale is a very bad idea but after finishing processes goes there's actually purity 98% so then this protocol is now going to their if we assessment about two hours rather than music ideas programs this is still very early here actually a motorist stage ever actually some efficacy point and prejudices program is next one this is actually we produced the government has been very active precise talk is found also this month as in graft vented to the Golden Corral and also the monkey and the dot case you see if you can see now is what we are now doing these IDs see HIV about you see the disparagement.
We actually now established to each others and they which is around 35% us' population is covered but then you see that these kinds of car then maybe 558 types can be covered populations and then we have a very great source of the donors so they are based on the different actually people and they probably we believe each country's maybe fifty percent coverage can be designed the future so that we are now working poor and then press questions about a tragedy because this is a very understandable why some architectural towards expressing so they're huge growth is expected and if this is so season Minister of Economy Trade and Industry so our government japan's government has also seen stem cell actually dated business very high goals.
I said that is why Japan is very much dressing on this business they actually changed regulatory last year November then we actually saw this market opportunities really in the next 12 strategy feet after perhaps fearing businesses because with these impact we actually need to diversify our companies and one of the most important directions helps chaos now his cure Kelsey's 18% of total company David you know that you actually make health care businesses of course we have to compete with big farmers which we are now here however for such kind of huge Ramp;D expenses new and newcomer is very difficult to capture and compete with them so there is a reason why so what kind of space is the most workable that is the essential medicine field which is actually we front-runner right now which is very take care section 2 p.m. the approved products in Japan tissue products.
We have actually materials which is careful to materials because businesses music has a very low level control of materials required so there we had a very strong technologies for that concerning the functional materials so that is the asset values and then goes to press iPS cell we can create actually really knew important if he does well organized and actually designed or the3d I say those kinds of new body can be created in the market that's the Technology Strategy feat for us simply say experts and intelligence technologies and also the high production volume process technology engineering this kind of things are very great synergies between Huyen CDI so that is why gender power company creating synergies CDI has actually biotechnology know-how and expertise in the future has a processing or the optic Engineering's and also machinery engineering this kind of combinations can create the next generation the production facilities and we believe these failed businesses through that system could be next very important complications award so there may be introduced for the discussions.
I was four hours we believe however still very challenging market the reason is this is very famous sexually Notation zero chance we have actually still using the primary cells who are actually studies and then regulatory people who can call those tables and of course pharmaceutical people are also due to get those details and there because of the past dangerous people can charge so this is right not to go to the next technologies so some better relations could be very important but that's takes time of course so there we can now we I guess business shadow part so there how to make a good year for the next actually starting point that's our challenge right now however if every week at work camp at Sure we can actually make great roles as everybody seems exceptionally high growth of the stem cell businesses.
I told you that could be a very important for the next competitive reaction the reason is now almost to be such greats as being in the next stages' industrialization yesterday's decision is always production capabilities a key because it costs of sense a sense of course or they're actually assess because he's and high Baltimore at those kinds of things was very important things for the management and especially my DSL we see ya there are 10 scale up production he says because there can you need a lot of volumes if we go to the cardiovascular therapy enormous amount necessary but then I treatment so not so much as there is not necessary then also tautologous and allogeneic approach to manage both especially this kid out how to manage to carry out it is a very challenging for us and their ideas into yesterday's manufacturing similar here but there maybe some discussion.
I think that's ability challenge but then that company can get more profitably be the final maybe this is discussion point we will hear a common goal among stakeholders a very important to overcome those early stage of business I just released their app actually patient's ability groups researchers doctors industry car windows 88 but actually of course take Pilates have a different case so then sometimes that you called freaky shelters however we know that to happen in the to make something we believe actually some common goals of needs and then make a collaboration to blacks who the current situation which is more important than I hope so I think that was a great overview of the state of the market I thought it was really interesting what I looked at on what was the attraction for Fuji into this because I know when I first heard about this acquisition I can't scratch my head its built-in camera company doing buying a cell iPS cell companies.
I think it's clear that up for me to touch you wonder if you might comment there were three challengers that caused laid out one was around sort of this inflection point that were out for things going from primary cells iPS this potentially other new technologies there was one around the salable manufacturing and this final one around stakeholders you see others do you think these are our legitimate challenges for the space or like you I was scratching my head right about it but when you look at the kind of declining one business looking to diversify kind of makes sense in terms of the challenges I think you know you mentioned three I think there is anumber of others think when you look at the regulator challenges and how they differ across different jurisdictions.
I think that's one there's also something about lack of standardization we have we really don't have any common measures that referred to when we talk about even how to count the number of cells there is accessibility of the tissues and cells so how do you have accessibility how to people manufacturing I read somewhere some statistical leaders about three hundred and twenty trial going on at the moment if even twenty percent of those go ahead and approved we have roughly sixty odd you know production capabilities are needed and we just don't have the luxury to be able to manufacture these you pointed out at the right quality that's one thing there's the clinical aspect of it you know people who are able to do the clinical trials and it rained in this GMP facilities and then I think the scale of investment although investment is happening people are still investing with a lot of trepidation.
I think we started talking last night a little bit about some of the differences globally and maybe to reach common and less and you touched on these remarks it is not one world is as you think about this today both be curious what you both think about that if you think about this market yeah yeah yes I think we have an us- and Europe and Japan those three seasons and then specialty research Pepsi's I believe Europe and USA head right now japan is one of the more innovative approaches to regulatory there is a difference between the research and clinical especially if you look at the number of papers that have been published but when you look at clinical applications and also investment there is a difference in the three markets I see I guess from the regulator spectrum Japan is miles ahead know when you look at the numbers somewhere between two to four hundred billion by 2050 this market.
I think Japan looks at this and so we've got to do something we want to we want a piece of that and they looked at this as having the potential to really change lives significantly so they've just gone ahead and done it there are risks but we're seeing already investment going to Japan from the USA and from Europe and we're already seeing approval of therapy Europe I see is almost a little bit of a halfway house between the two hospital exemptions and other ways of doing it and you have the complication 29 members day 28 member states but they have a lot of good research that's going on and they also have clinical advancement and U S has a lot of great research and great potential but the regulatory system is perhaps still in a sense using the drug approach as opposed to you know looking at it from a different paradigm which is sold drugs.
I think the question is how to enable that I think the challenges are also slightly different and the environment in the USA still depending on what you want to do stem cells to have this you know how much doing much more than that we see in Europe and much more than Japan and I think that stigma is going to be cute overcame depending on where we started talking outside in particular around embryonic yeah embryonic is a great example in the UK application went in from the Francis Crick Institute research involving basic research involving gene editing Talon 30 using Chris Picasa 94 human embryos and that's just the basic research is not the clinical applications but it if that's approved by the authority there will be the first regulatory approval of June editing so that I could not imagine the moment given the environment that we have in the us- that being even if it's just for basic research and there was the first clinical application and treatment of a young girl at Great Ormond StreetHospital using Talon technologies to treat her lol so you know she's been cancer-free for a year.
So there is a huge difference in terms of at least perception in the previous session I said I'm for the first 40 minutes or so before we before you met him there was some discussion about costs and the cost of these costs of cells and it would you care to comment I mean is this is this going to ultimately save money for the system in your viewers this jury's still out where are we in theory this you know that the dream is of course I give you have diabetes I give you a sub 3 p.m. can you cared for the rest of your life and you look to be a hundred and ten die crossing the street because the bus hit Steele rs I'm playing any thoughts well I think the United States think I think that's what number of reasons one of the arguments is this is not positive so how do you put a price on cure yeah but is a lifetime worth of treatment using injections of pills think there are a number of strains of thought.
I see coming out some people have the argument that this is going to cost a few thousand dollars as opposed to you know hundreds of thousands and then pricing comes out of the treatment is actually $100,000 yeah that shocks everyone and they can I go well this was supposed to be cheaper but I think the issue there is one of those opposed to $100,000 you know about ten years we will end up being a million dollars but I think the other aspect of the economics of this that I think perhaps sometimes gets missed is it depends on whether it's also vs are low and what I mean by that is it's a very different game if you're in the Allen market potentially.
I really looks at a product of the Holy economics of that is based around having which is what farmer has always done which is how do we manufacture this large-scale to sell it to millions of people in a bottle or as an auto his personalized medicine and for that there are two different challenges and one is how do you get investment and therefore which affect the ultimate cost so how do you encourage investment into that area because given the current regulatory system and the challenges that we describe people don't want invest in this so you don't even know that things gonna be available they don't want to invest in this which of course affect the pricing because they don't come see coming on because its personalized medicine because the patient target group could be a few thousand yea or even you know fifty yeah but small children comes a very or chrome that's the first thing the second thing is you know that could be changed.
If we see some kind of Japanese approval system way where people have approval post safety and efficacy and some kinda investment which changes the economic so I think that's that's another thing that affects the pricing which is also versatile oh terrific thank you know I've done lots of talking about all the questions what I'd like to do we got about 10 minutes left is there any questions from the floor we be we'd be happy to entertain them these people I know in the room I'll cold calls potential problem with lots and lots of people lots and lots of effort going on and that would be I think the optimum outcome for everyone from everybody standpoint this sort of the other end of the stream is the regulatory regulators convinced themselves that even though that the ZnO elements to the process if you will we can convince ourselves that we can get it safe enough and that particular.
We've got work in conditions that there are no alternatives one could envision some acceptance on the part of regulators certainly in some countries to accept they base medium or there may be some middle ground where some have one answer and some have the other long-term my hope would be that it's gonna be the first one will crack the code on the serum-free but we're probably a ways away from that I know we're working on that right now in my company and it's not it's not simple yeah I mean I think the ZnO 03 great point and that goes to the thing that we were talking about manufacturing challenges absolutely and I think we will probably see wanted two things happen to see tidal wave of evidence and pressure mounting up to allow us to require regulators to look at this in a different way meaning that we have to have a different way of proving safety on that so what are the different markers when they would have to prove or I think we'll see a disruptive technology something which will be completely left field which are common and it's going to change that so moving away from 2003 one of the tip.
I think I am force one of those too industry we can produce a reasonable basis we are now in his ideas related businesses and in terms of iPS cell so then i did cases it is insanely here and there may be cases we use at 18:19 so they're actually yes does not change any regulations 10 years that means it goes here to drug discovery CH those disease diabetes 50 girls can he started to be used because maybe you saw the hour news readers which is related to the garage so then we expect that pharmaceutical companies are trying to use I yes for their asses handed to us so that means those bodies greasing maybe 12 years range and also other speakers' toxicology testing which has been already and then he's ready to go big regulation has to be a great change so they're all actually changing sometimes I think it depends on critical things and one is how come so maturity depends on which party talking to the market whether it's just researchers clinical.
I think the research aspect will see maturity much quicker basic research advances in that like we've seen in the last 18 months to years and it will really start to apply more and more that's inevitable I think the maturity of the applications' investment the manufacturing the large investments that is needed is really dependent on the policy and regulatory environment because whether we like it or not this comes back to investment environment depends on how comfortable do people feel putting their money behind something which they don't know if it's going to be allowed right so if I don't know something's gonna be allowed I'm not gonna go out and get money to fund it and in that uncertainty the majority will take longer so I'm hesitant to give you a figure is it gonna be 10 years five years if the FDA and government changes the legislation or regulatory environment next year I think we will see a huge surge investment which will lead to things that we don't envisage but I think that is really a key turning point because it brings to the market a lot of stability lot of certainty which perhaps people hesitant so there's a direct relationship between the investment and the majority i just want to echo.
I think barring a change in the regulatory environment were probably ten to twenty years away from any kind of industry that global my own view this is just my opinion is we can't afford that if you look at the United States spends on health care if you look at the demographics and every major country in the world I believe the regulatory environment is going to change because it's gonna have to just cannot afford the system we've got so I think with that you could accelerate that maybe is it five years to fifteen maybe that's what it looked like but who knows we're out of time I want to thank everybody for coming I hope this was at least an interesting and thought-provoking session on a Saturday morning and I really want to thank all of you for coming I want to thank the group for the questions and we hope you enjoy the rest of the conference thank you.